Issues that Owners Potentially Impacted by the Michigan Electric Transmission Company ITC Helix Substation to Hipple Substation and Oneida Substation to Nelson Road Substation Projects
Michigan Electric Transmission Company (“METC”), which is related to International Transmission Company or ITC, is pursuing two petitions for Michigan Public Service Commission approval. It is starting land acquisition by sending letters advising property owners that land consultants will be contacting them in the coming weeks to obtain easements.
Here are key issues for consideration.
Should I retain eminent domain counsel now? Is it expensive?
Early retention of counsel is beneficial. I charge a contingent fee that is 1/3 of the additional money obtained above METC’s good faith offer. MCL 213.66 generally requires agencies like METC to “reimburse in whole or in part to the owner by the agency of the owner's reasonable attorney's fees, but not in excess of 1/3 of the amount by which the ultimate award exceeds the agency's written offer.” My contingent fee matches this statute. While past results are not a promise of future performance, I have handled hundreds of cases against METC and ITC where they have voluntarily reimbursed those attorney fees.
If you retain me now and METC’s final route does not include your property, I will simply close your file and you will not be charged an attorney fee.
Assuming that METC receives certificates, it will likely move quickly to either gather information or seek easements. MCL 213.54 allows agencies to “enter upon property before filing an action for the purpose of making surveys, measurements, examinations, tests, soundings, and borings; taking photographs or samplings; appraising the property; conducting an environmental inspection; conducting archaeological studies…; or determining whether the property is suitable to take for public purposes.” MCL 213.55 allows agencies to “to secure tax returns, financial statements, and other relevant financial information.” Having counsel immediately available to guide you through these processes and buffer you from the sometimes abusive practices of right of way agents will simplify these processes for you while helping to avoid mistakes that could harm future just compensation claims.
Are there benefits to groups of owners hiring the same attorney?
Yes. In addition to requiring reimbursement of attorney fees, MCL 213.66 requires METC to pay “expert witness fees” that are “reasonably necessary.” At attorney working with experts preparing multiple reports allows for economies of scale that reduce the fees for each parcel, making payment by METC easier to obtain. This also applies to other expenses. Additionally, an attorney representing more clients will have greater knowledge about the project and its impacts. I learn from my clients. Having one client raise an issue allows me to discuss it with other clients. Finally, while each case must receive individual attention, there are benefits to negotiating simultaneously for multiple clients.
If Public Service Commission approves the project, can I challenge the taking in court?
Probably not. MCL 213.56 the standards for challenging the project. “The granting of a permanent or temporary certificate by the public service commission… constitutes a prima facie case that the project in furtherance of which the particular parcel would be acquired is required by the public convenience and necessity. The granting of a certificate of public convenience and necessity by the public service commission…is binding on the court.”
As such, trial courts must defer to the PSC. There may be a basis to challenge the taking if METC seeks to acquire more rights than are necessary to build the approved project. But in a similar project, my presence caused METC to voluntarily limit the easements requested to avoid such a challenge. METC constructed a new transmission line through rural farmland near Coldwater. The easements that METC sought during preliminary, voluntary negotiations broadly sought the right to construct unlimited numbers of transmission lines of unlimited size. In other words, while METC planned to construct only a single, relatively smaller line (compared to some of its other transmission installations), METC was landbanking the ability to install new or larger lines in the future without paying additional just compensation at that time. After I informed METC’s attorneys that I would likely challenge such an acquisition, it modified the easement significantly by limiting itself to constructing “one single circuit 138kV electric transmission line.”
What are some of the things you consider when seeking more just compensation?
A case involving acquisition of an easement is called a partial taking. The property rights retained by the owner are called the remainder. Michigan’s jury instruction relating to partial takings summarizes some of the key issues raised in partial taking cases:
This case involves what is known as a “partial taking”; that is to say, the property being acquired by the condemning authority is part of a larger parcel under the control of the owner.
When only part of a larger parcel is taken, as is the case here, the owner is entitled to recover not only for the property taken, but also for any loss in the value to his or her remaining property.
The measure of compensation is the difference between (1) the market value of the entire parcel before the taking and (2) the market value of what is left of the parcel after the taking.
In valuing the property that is left after the taking, you should take into account various factors, which may include: (1) its reduced size, (2) its altered shape, (3) reduced access, (4) any change in utility or desirability of what is left after the taking, (5) the effect of the applicable zoning ordinances on the remaining property, and (6) the use which the condemning authority intends to make of the property it is acquiring and the effect of that use upon the owner’s remaining property.
Further, in valuing what is left after the taking, you must assume that the condemning authority will use its newly acquired property rights to the full extent allowed by the law.
The bold language is critical to understanding the just compensation issues arising from a partial taking. If METC acquires rights in an easement, they must pay for those rights even if they lack a present intention to fully implement them. This article, published by the International Right of Way Association, describes how this rule was applied in other contexts.
Homes may suffer negative aesthetics; impacts from tree removal like loss of privacy, shade, and buffering from noise or wind; and limitations on the ability to add or expand structures. Wind issues are often pronounced in agricultural areas. Removal of trees close to a home may require additional air conditioning or irrigation for yards. METC’s easements typically prohibit any new construction in a wide swath of property on either side of their poles.
Farm fields may see impacts on irrigation and drain tile; less efficient farming and reduced yields caused by pole placement; lower yields in construction areas; extra costs during construction; and problems from future access. The existence of poles may restrict the movement of pivots. Given that property must be valued based on highest and best use, not the current use, value may be reduced if a pivot is not present but could be added for a cost-effective price. In another project, I retained a pivot installation expert to evaluate these issues. Construction of METC’s towers require significant excavations. These reduce yields by disturbing soil. In past projects, METC acquired easements that allow it to travel anywhere on the property for access, without requiring travel only through the utility corridor. But in those matters, METC’s appraiser ignored this issue.
Easements can reduce density and increase site costs for development parcels. I have handled numerous matters where civil engineers have prepared before and after site plans demonstrating that less could be developed and that the impact is greater on a percentage basis than the amount of land subjected to the easement. Further, building around the easement was more costly on a per unit basis.
I would be happy to discuss issues relating to these projects with you and your neighbors. Please feel free to call or email me.