How Much is Fair? Will Senate Bill 18 Ensure Condemnors Pay Just Compensation for Land Taken Due to the CREZ Transmission Lines?

Abstract:     
Although the growing wind industry has the potential to play a key role in creating an energy-independent United States, it is also exposing a critical problem: an inadequate transmission infrastructure that plagues the entire country. Texas is leading the way in upgrading its transmission infrastructure through the comprehensive Competitive Renewable Energy Zones (CREZ) transmission project. The CREZ transmission project involves a collection of utility companies selected to build over 2,000 miles of high voltage transmission lines from West Texas to higher populated areas in the eastern portion of the state. While these transmission lines are critical to ensure that the electricity generated by the wind farms is not wasted, the size and scope of the project requires utility companies to obtain easements on a substantial amount of private property. As a result, landowners are facing condemnation proceedings and are realizing that most of the power lies with the condemning authority. In order to equalize the power, the Texas legislature spent the past five years focusing on reforming various aspects of the condemnation process to ensure that landowners have a chance to fight back against the abuses of the utility companies who refuse to compensate landowners justly for their loss. Senate Bill 18 (S.B. 18), effective September 1, 2011, takes the first substantial step towards leveling the playing field between landowners and utility companies, but it still leaves landowners vulnerable in critical areas.

This Comment focuses primarily on whether S.B. 18 ensures that landowners receive just compensation for the land utility companies condemn as part of the CREZ project. In order to gain an understanding of how the CREZ project came about, Part II provides the history of wind energy development in Texas. Specifically, Part II will address federal and state legislative incentives enacted to encourage the development of a commercialized wind energy sector. Part III then switches gears and looks at the land appraisal process and how the subjectivity inherent in that process creates problems in the condemnation process. Part IV then provides an overview of how the condemnation process occurred in Texas prior to the enactment of S.B. 18 and how the problems mentioned in Part III could cause confusion in the condemnation process. Part V looks at how S.B 18 changes the condemnation process in Texas by analyzing the key provisions that focus on creating an equal playing field between the condemning authority and the landowner. In addition, Part V focuses on why S.B. 18 failed to enact an attorney’s fees provision, which is critical in helping ensure landowners receive just compensation for the taking of their land. Part VI expands upon the concept of an attorney’s fees provision by looking at how other states incorporated an attorney’s fees provision into their condemnation process. Part VII concludes that Texas needs to adopt an attorney’s fees provision in order to ensure that condemning authorities do not continue to have an unfair advantage over landowners. Specifically, Texas should adopt a provision that adopts elements of both the Wisconsin and Florida approaches in order to create a unique provision that achieves the goal more efficiently than either approach does independently. This proposed approach encourages meaningful negotiations between the landowner and the condemning authority and provides the best chance to reach a successful resolution for both sides.

Number of Pages in PDF File: 43

Keywords: Texas, Energy Law, Senate Bill 18, Eminent Domain, CREZ, Property, Administrative Law

Accepted Paper Series