Takings and Transmission

Abstract:     
Ever since the Supreme Court’s controversial 2005 decision in Kelo v. City of New London, courts, state legislatures, and the public have scrutinized eminent domain actions like never before. Such scrutiny has focused, for the most part, on the now-controversial “economic development” or 'public purpose' takings involved in the Kelo case itself, where government takes private property for a redevelopment project that will benefit another private party as well as increase the tax base, create new jobs, assist in urban renewal, or otherwise provide economic or social benefits to the public. By contrast, until recently, there has been little change in law or public opinion with regard to takings involving publicly-owned projects such as hospitals or post offices or 'use by the public' takings that involve condemnation for railroad lines, electric transmission lines, or other infrastructure projects. However, recent changes in electricity markets and the development of the country’s electric transmission system have raised new questions about the validity of 'use by the public' takings in the context of electric transmission lines. With some transmission lines now being built by private, 'merchant' companies rather than by publicly-regulated utilities, and with the push to build more interstate transmission lines to transport renewable energy to meet state renewable portfolio standards, what was once a classic public use is now subject to new statutory and constitutional challenges. This Article explores the potential impact of these developments on the use of eminent domain for electric transmission lines. Ultimately, it suggests that states should ensure that their eminent domain laws governing transmission lines are consistent with their policy preferences surrounding energy development in the state, and it outlines some ways for states to accomplish this goal.

Number of Pages in PDF File: 84

Keywords: takings, eminent domain, electric transmission lines, renewable energy, merchant transmission lines, FERC Order 1000, Interstate Transmission Lines, Kelo, federalism

JEL Classification: K11, K23, K32, Q40, Q42, R52

Accepted Paper Series