Eminent domain appears to be on Vermont Gas’ side

AN SIGN STANDS in the yard of Jane and Nathan Palmer of Monkton, who are fighting to keep a natural gas pipeline from being built on their property. Independent photo/Zach Despart

A sign stands in the yard of Jane and Nathan Palmer of Monkton, who are fighting to keep a natural gas pipeline from being built on their property. Addison Independent photo/Zach Despart

Editor’s note: This article is by Zach Despart of the Addison Independent, in which it was first published Feb. 24, 2014.

ADDISON COUNTY — If Vermont Gas Systems does move forward with eminent domain
proceedings against Addison County landowners to secure necessary easements to build its proposed natural gas pipeline, it will have both state statute and recent precedents on its side.

The Canadian-owned utility sent letters to nine Monkton homes last month stating that if an agreement on a right-of-way easement could not be reached, the utility would have no choice but to begin the process of eminent domain.

Eminent domain is the process by which a government seizes private land for public use. It is enshrined in the Fifth Amendment to the U.S. Constitution, which mandates that the government pay landowners just compensation for property it appropriates.

The basis for Vermont’s eminent domain law can be found in the state constitution. Chapter I, Section II states that private property is subservient to public uses, provided that “whenever any particular man’s property is taken for the use of the public, the owner ought to receive an equivalent in money.”

In its 49-year history, Vermont Gas has never acquired land through eminent domain, and has said that it does not want to use this approach in Monkton. However, since several landowners have said they will not negotiate with the utility under any circumstances, it seems increasingly likely that Vermont Gas will have no choice.

State statutes empower Vermont Gas to seize property via eminent domain, and there is precedent of Vermont utility companies using eminent domain to secure necessary right-of-way easements.

The state’s specific eminent domain laws are codified in Title 30 of the Vermont Statutes. The Public Service Board, a three-member quasi-judicial panel that supervises the state’s utilities, oversees eminent domain proceedings. Section 110 of Title 30 gives utilities regulated by the Public Service Board, such as Vermont Gas, the right to condemn property needed to provide service to the public, provided that the utility adheres to several statutes.

Steps in the process and important factors to consider if Vermont Gas must pursue eminent domain proceedings against landowners along the pipeline route include:

• The company must file a petition with the Public Service Board and Public Service Department. In it, the utility must explain why it was unable to secure the necessary easements without the use of eminent domain, and why securing the land is necessary for the project.

• The Public Service Board will then schedule two hearings, which the landowners that are subject to the proceeding are entitled to attend. In the first hearing, the Public Service Board determines if the land seizure is necessary. In the second, the board decides what compensation landowners will receive.

• In order to prove the necessity of the land acquisition, Vermont Gas would have to prove that the project will benefit the public, and not hinder regional development or scenic preservation.

• The Public Service Board in December granted a Certificate of Public Good for Phase I of the project, a 43-mile section of pipeline from Colchester to Middlebury. The 157-page ruling states that the board believes the pipeline can be built without “undue adverse impacts” on the environment, and without endangering the safety of Vermonters. This prior approval conceivably lessens the burden Vermont Gas would have to meet in eminent domain proceedings, and places the onus on landowners, who must prove that the project is not in the public good.

• The Public Service Board’s findings in the necessity hearing are directly appealable to the Supreme Court. Findings in the compensation hearing must first be appealed to the Superior Court of the county in which the action originated. Landowners can demand the Superior Court appeal be heard by a jury. The final recourse for determining compensation is the Supreme Court.

• If Vermont Gas does initiate eminent domain proceedings, either the utility or landowners can request that similar cases be heard together. The Public Service Board has the authority on consolidating cases together, and can also do so on its own authority.

During the eminent domain proceedings related to the Northwest Reliability Project, the Public Service Board consolidated many of the eminent domain proceedings. The Vermont Electric Power Co. (VELCO) used the process to successfully secure the right-of-way easements it needed to construct a 35.5-mile transmission line from West Rutland to New Haven.

The Public Service Board presided over 21 eminent domain proceedings related to the Northwest Reliability Project between 2005 and 2008. VELCO withdrew condemnation petitions in 11 of those cases after it reached settlements with landowners out of court. In five cases, the Public Service Board ruled in favor of VELCO and awarded compensation to landowners. In one case, VELCO withdrew its petition because it moved the proposed electric line to a different property. In no instance did the Public Service Board rule that the utility was not entitled to the land it sought. The dockets from the remaining four cases could not immediately be located.

Not only have landowners been historically unsuccessful in eminent domain proceedings, they are also unlikely to receive compensation for attorneys’ fees, should they retain counsel to represent them.

In 2009, a Shelburne real estate company appealed to the Supreme Court after the Public Service Board refused to award the company $45,000 in attorneys’ fees it spent fighting an eminent domain proceeding related to the Northwest Reliability Project. The court affirmed the board’s decision, finding that compensation for attorneys’ fees is not included in the “just compensation” required of eminent domain.

JUST COMPENSATION

While landowners may not prevail in an eminent domain proceeding, they are entitled to seek compensation based on multiple criteria. Section 112 of Title 30 states that landowners shall be compensated for both the current value of the property and “impairment to the value of the remaining property or rights of the owner, and consequential damages.”

Monkton landowners have said that compensation for devalued property is an important issue during their negotiations with Vermont Gas. Selina Peyser, whose property is appraised by the town at $889,000, said she fears her estate will become unsellable if the pipeline is built. Vermont Gas offered her $5,600 to use 1.2 acres of her property.

While utilities are often successful in eminent domain proceedings, there remains the potential for lengthy appeals during the condemnation process. The Grice family of New Haven in 2005 rejected an offer from VELCO to use part of their property for the Northwest Reliability Project. The utility began the eminent domain process, which lasted until 2008, when the Supreme Court ruled in favor of VELCO. The court also denied the Grices’ request to be compensated for attorneys’ fees and the cost of an expert witness.

Vermont Gas has said that the company hopes to begin construction on the pipeline as early as this summer.

Comments

  1. Philip Beliveau :

    There are numerous parcels in Chittenden cty also! We have no say in losing our property, at least offer us just compensation. It is mind boggling that our property will be taken by a Canadian company to bring gas to International Paper co in New York.

  2. Stan Hopson :

    Philip, while IP will be a beneficiary, so will
    ALL THE BUSINESSES IN RUTLAND AND ADDISON COUNTIES.

    Don’t sell it short, we need natural gas to compete for jobs and the prospects of keeping our children here gainfully employed. The benefits clearly outweigh the negatives.

    • Jane Palmer :

      Stan,
      If you think getting methane delivered to Rutland will fix Rutland’s problems, think again. Look at St Albans and Swanton. They have had methane for years. Their unemployment rates are much higher than Middlebury’s and Vergennes, two cities (well, large towns) that have never had methane. Franklin County property values are not in line with Addison County’s, either. Look at Exchange St in Middlebury. All of those new businesses could have built in Franklin County or Chittenden County, but they chose Middlebury and Addison County…and not because there was methane available. The fallacy that bringing methane to Rutland will somehow create jobs and prosperity is a pipe dream (pun intended) created by Vermont Gas. They have spent over half a million dollars in advertising to get you to swallow that propaganda. Gaz Metro wants to establish a corridor from Canada to the US gas pipeline system and Vermont is just in the way.

      • Kathy Nelson :

        I hope people are finally beginning to realize what an enemy America has on it’s northern border.

    • Philip Beliveau :

      Stan, You don’t need to shout! The negatives depend on where your property is and how you feel about fracking and climate change. The positives depend on the price of gas staying at an historical low and the myth of connection between business growth and availability of gas. With those in mind I feel the negatives outweigh the positives. We disagree. Is your land being taken?

  3. Wayne Andrews :

    Sorry Phil, the veins in the left part of your leg cannot tell the veins in the heart what to do. For the better good of the whole body these decisions are being made and yes, some profit too.

    • Philip Beliveau :

      Wayne, my name is Philip. The veins to my heart say don’t take my land! The veins to my head say this pipeline is only for profit for a couple large corps and the rest is just propaganda. The bad business climate is a myth as evidenced by our employment rate. There are cheaper,safer,healthier ways to save on heating costs than this pipeline. There are individual ways that don’t force your neighbor to take an economic hit. The powers that be may confiscate my property rights but at least offer me just compensation.

      • Glenn Thompson :

        Philip Beliveau states “There are cheaper,safer,healthier ways to save on heating costs than this pipeline.”

        What are they?

        • Philip Beliveau :

          Weatherization, insulation, solar,wood. Check out how much this pipeline costs and the individual cost to retrofit homes to change to natural gas.

        • Bobbie Carnwath :

          Glenn –
          I’m glad you asked [about other home heating alternatives] because there is a new alternative for heating homes in the northeast that has been getting increased attention since Efficiecy Maine recently released a study which concludes that new technologies are resulting in air-air heat pumps being the most cost effective alternative to retro-fit homes – cheaper than natural gas. This is important new option for homeowners in Vermont. I refer you to “Energy Efficient Options: Pilot Projects and Relevent Studies”, April 8, 2013.

          • Glenn Thompson :

            Solar is not cheaper nor can it be relied upon to heat one’s home especially during periods of cloudy weather…which is common in Vermont.

            I posted a link to a similar topic which shows wood produces MORE CO2 emissions than Natural Gas. Why do you think the EPA is cracking down on wood stove emissions?

            Weatherization and insulation is fine…except one still needs to heat their homes with something!

            I would agree, air-air heat pumps would be a good option. If I had to pick one, I’d pick this source over either solar or wood!

            http://www.neep.org/efficient-products/emerging-technologies/Air-Source-Heat-Pumps/index

            http://www.energyefficiencymatters.org/ode-to-the-air-source-heat-pump/#

            http://www.qualitysmith.com/request/articles/articles-hvac/heat-pump-prices/

          • John Greenberg :

            Glenn Thompson argues “Solar is not cheaper nor can it be relied upon to heat one’s home especially during periods of cloudy weather…which is common in Vermont.”

            Passive solar — correctly orienting a house and its openings – is effectively free, and passive solar DOES produce heat (and light) even on cloudy days, though obviously less than on sunny days.

            No form of solar that I’m aware of — active or passive — is able to provide 100% of the heat needed even in a well-insulated house to make it through cold winter nights. So solar is mostly used in combination with other technologies to get the job done.

            Thompson’s oversimplification belittles a solution (albeit partial) which is often cheaper and virtually always less polluting than many other alternatives.

  4. Karen Chickering :

    there is no “public good” in this claim for emminent domain. this is of no benefit to Vermont, except for the coffers of VT Gas and the Canadian utility suppoying the gas, in supplying pipeline for the benefit of the Ticonderoga plant. when did Canadian utilities become aggressors on our soil, all in the interests of big money oil and gas? ….. follow the $$$.

  5. Jaime Ciffo :

    Although the 5th Amendment is enshrined in the Constitution, it is also customary for the law to deport foreigners rather than grant them the same rights and privileges of its citizens.

  6. Wayne Andrews :

    Karen: Your overtones are just the reason why businesses don’t want to come into Vermont. I for one am sick of paying $4/gal for propane.

    • Alex Prolman :

      Wayne, please read this Digger commentary by Mike Ryan. It’s just a tad long, but well-researched, and explains clearly that the reason propane’s been at $4/gal is because the fossil fuel corporations are trying to make as much money as they can off all of us. It has nothing to do with Vermonters’ opinions about big business.

      http://vtdigger.org/2014/02/05/mike-ryan-propane-now-export-profit-vermonters/

      • Alex,
        I am in a buyers group. My rate 1200 gal/yr at 1.86/gal, prepaid.

  7. Stan Hopson :

    Jane Palmer, I see you’re an active member of Rising Tide Vermont, you’re against any kind of fossil fuels. I get it. Not really.

    I support renewables just like you do, however, I acknowledge the reality of the world we live in and the need for efficient low cost fuels to attract manufacturing and other entities. I encourage you to look past past the propaganda your group and other extremists environmentalists spout, you’d see support for the project from mayors, economic development groups (naughty words) and Peter Shumlin.

    BTW, President Obama will be approving the Keystone pipeline shortly, so the “mainstream” democrats and others seem to get the importance of taking care of our own needs.

    You’re on the losing end of this one.

    • Jane Palmer :

      Ah, Stan, Don’t think I don’t realize that those of us who choose to fight this pipeline are the underdogs. But that does not mean I will just lay back and accept it and it doesn’t mean it will not be a tough expensive fight.

      By the way, I am not a member of Rising Tide. I am an individual who is fighting for my property rights and my rights to a future for the next generations of humans that have the right to have a livable planet to inhabit. Rising Tide is just one group of folks who have similar goals and who we have cooperated with in the fight against this pipeline. There are others that I am also not a member of.

      The reality, as you call it, is that there is no such thing anymore as “efficient low cost fuels”. The price folks are paying for methane right now doesn’t even cover the cost of it’s extraction, let alone the externalized costs that are inherent with the industry. This is the case with the condemnation of our land. The statement from our State’s constitution, “whenever any particular man’s property is taken for the use of the public, the owner ought to receive an equivalent in money” leaves the door wide open for a large corporation such as Gaz Metro to interpret the “equivalent” part as what they want to pay, not what it is worth to the landowner as in the case in Monkton where they said they will recommend to the PSB that they award just $245 to a family for an acre of land. I don’t care where you are in Vermont, it has been a loooong time since an acre of land sold for $245. If VGS is forced to pay a fair price for what they are actually taking from homeowners, this project will become too expensive to build. So, yeah, I get it…some of us are supposed to suck it up and give up our property rights so you might get to save some money on your heating bill. I don’t agree with you on that one, Stan. I will not give up what I have worked all my life for so you can continue to live in a fantasy “reality” created by the gas and oil industry.

  8. Wayne Andrews :

    Phillip: The reason why unemployment is lower in Vermont is do to the amount of retirees here in the state as well as migrate workers. ry to sell a piece of real estate and you will see how well everyone is “working”

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