Re this NY Times article I’m not quite understanding how a private gas company has the power of eminent domain over land it is leasing and can force the owners to sell their property.
Here is the lawsuit by the gas company seeking to force condemnation of the land and a forced sale.
The crucial clue is in the third-to-last paragraph of the article.
That act, which is now codified as part of 15 USC § 717, provides
Interesting. So a utility can force a sale via eminent domain to accommodate where it needs to place its service lines. I did not realize they had that inherent power.
A natural gas utility, anyway. And they can’t force it directly, they have to prove their case to the courts in order to take a right-of-way via eminent domain.
Congress’s motivation in setting this up was their belief that an efficient and robust network for interstate distribution of national gas was of vital import to national security. In exchange for these special privileges, Congress set up the Federal Power Commission (since merged into FERC) to regulate interstate gas prices. (Prices in some cases have since been deregulated.)
I guess this is not much different than hydroelectric utilities powers of eminent domain.
Historically speaking…Public utilities have operated in a somewhat different dimension than other businesses. The key to understanding their position is in the “Certificate of Public Convenience & Necessity”. Power Companies, gas companies, railroads, communication facilities and several other basic industries are privately owned but publically regulated. They serve a vital and ongoing need. They require an unusually extensive infrastructure, such that it would be impractical for competitors to duplicate it - Think of the implications of several competing power companies serving the same community, each with their own system of overhead lines for example.
Since this is obviously impractical, utilities are allowed some special privileges. They are allowed to hold a monopoly, to form cartels in which they act as both co-operators and competitors, they are allowed emminent domain, they can issue bonds, etc. On the other hand, they have somewhat more restrictions that other businesses…Their rates must be approved by the regulatory agencies and are subject to ceilings. Changes of ownership must have regulator’s approval, they cannot deny service to anyone (although they can suspend service for non-payment), if they fall into bankruptcy they cannot just close up shop, instead operation continues in the hands of the court.
Hence, public utilities are neither fish nor fowl, neither government services nor entirely free enterprise. From the point of view of investors, they are considered a very safe investment, but also one that will produce no wild price swings nor large returns.
SS
It’s not just gas companies. Sadly, the Supreme Court ruled in 2004 that WallMart could use eminent domain to force landowners to sell their land to build a new store. (Provided the local municipality stated that building a new WallMart would “benefit the community” but obviously it’s easy to influence the politicians with donations).
http://money.cnn.com/2005/06/23/news/fortune500/retail_eminentdomain/
Eminent Domain now is taken to mean any action that benefits the community – under this interpretation, “creating jobs” at a private company still is a benefit, so therefore eminent domain is used, even though it’s obviously just the private company using eminent domain for something it was clearly never intended for.
Nitpick - Walmart didn’t use eminent domain. They benefited from a government entity’s use of eminent domain.
Unlike a utility which can directly state it’s case to regulators and thereby seize property, Walmart needs the cooperation of a government entity like a municipal to do the process.
Actually, what the Supreme Court ruled in Kelo was that there was nothing in the U.S. Constitution to protect a landowner from laws made by their own elected legislators. This refusal to engage in judicial activism somehow enraged the conservatives who usually decry “judicial activism.”
As for eminent domain, it generally is a matter of state law. In Illinois, for example, it’s granted to railroads, plankroads, streetcar companies, canal companies, pipeline companies, electric utilities, telephone utilities, other utilities, and various redevelopment authorities.
They still building many plank roads these days???
I think the freehanded use of “eminent domain” for redevelopment purposes has been successfully challenged in court. Developers were being a little too exuberant in condemning lower-income housing so they could bulldoze it in order to construct some very high rent homes.
Lining pockets is NOT the original intent of the eminent domain process. The purpose is to make some property available “for the public good.” There has to be just compensation for taking the property, however, the losing party typically does not get what he or she wants in value.
~VOW
In rural areas without electricity in Hawaii, one has to deed over the property needed to bring in electricity to your home site. The electric company says in needs access to it’s poles and lines if there is a problem or they require maintenance.
This is one of the reasons we decided to install a mini hydro electric system in the stream that runs along the property line to power our home. The area gets around 150 inches of rain a year and the stream runs 24/7 (365).
Are you literally deeding over the actual right-of-way or is it an easement?
Constantly.
Easement, I’ve been told.
Utility easements are pretty common. I would be shocked if the utility actually condemned land to put up power lines.
Okay, I’ll bite.
What’s a henfur?
No, the Kelo decision reaffirmed that what is a “public purpose” is for your state legislature to decide, just as the Framers anticipated. However, the manufactured uproar in its aftermath prompted several state legislatures to make their redevelopment statutes more restrictive.
No, the uproar over that decision was not manufactured; it was anger that there was no way to review or check-n-balance the decision of a legislature which ruled the “public purpose” was served by condemning land already being used by existing businesses (who just happened to be competitors of WallMart) in order to build a new WallMart (who just happened to be the single largest campaign donor for several of the politicians voting on the project). It undeniably carried at the least the appearance (if not the actuality) of influence-peddling, cronyism, call-it-what-you-will.
You can always argue that using eminent domain to build a new road or park or something will benefit some people more than others, and legislatures are never free from being influenced. But in this case where the benefits of the project went overwhelmingly to one party rather than the general public, that should raise red flags.
Seriously – you’re not very worried by the idea that some rich corporation could simply buy off a few politicians and then have those politicians use eminent domain to force you to sell your land to the corporation for less than you believe it’s worth? You don’t agree there needs to be a higher standard for eminent domain other than “just whatever the local legislature feels like doing”?
If I were worried about that, then my remedy would be in getting my state legislature to redefine “blighted area” or otherwise tighten up the state’s redevelopment statute. Or it would be in working to elect new city councillors. It would not be to ask the Supreme Court to discover a new individual right in the US Constitution, one that would utterly puzzle the Framers, who anticipated virtually omnipotent state legislatures.
And I have no idea what you’re talking about with “WallMart,” which was not involved at all in the Kelo case.