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Transmission Lines & Pipelines: Routing-

Condemnation-Easements

Wednesday, May 28, 2014

Texas Association of Realtors

Big Picture

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• Phase 1: Company study• Phase 2: Routing• Phase 3: Land acquisition

(condemnation)• Phase 4: Construction

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Phase 2: Routing

Routing Process Transmission/Pipeli

nes• Regulated Formal Process–Powerline Company Files

CCN–Heard by SOAH/PUC

• Non-transparent Process–O&G Company/Railroad–Private/Threat of

Condemnation

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Powerlines in SOAH

• Intervene or Comment• If Intervening, Provide Written Direct Testimony

• Critical Difference: Protestors are Not Parties and Comments Are Not Evidence

Powerline Critical Fact!

“RECOMMENDED ROUTE”

DOES NOT MEAN MUCH

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Roles and Strategies of the TeamLandowne

rs:

Alliances

Lawyers:

Legal

Experts:

Routing

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How Experts Can Help You

• Analyze Routes and Segments

• Recommend a Route• Support or Rebut Routes Chosen By Routing Agency

• Provide Testimony at Hearing

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Critical Conclusion!

“INTERVENORS” INFLUENCE

ROUTE SELECTION

Big Picture

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• Phase 1: Company study• Phase 2: Routing• Phase 3: Land acquisition

(condemnation)• Phase 4: Construction

Steps in Eminent Domain/Condemnation

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• Phase 1: The Call, Visit or Letters from Landman

• Phase 2: Negotiating Your Terms and Compensation

• Phase 3: Special Commissioners’ Hearing

• Phase 4: District Court/County Court at Law Appeal

Phase 1: The Letters• “Bona fide offer”

required• Condemnor’s “initial

offer”• Generally, includes a

30-day deadline• Law requires a written

appraisal and 14-day “final offer” before any hearing

• Critical time to have consulted with an attorney

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Phase 2: Negotiating Your Terms & Compensation

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• Company landman makes the written offer

• First offer typically “low”

• Offer and terms are negotiable

• Landman and/or company lawyers discuss price, location, and terms

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Phase 3: Commissioners’ Court

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• If no agreement, company files condemnation lawsuit

• Purpose of Commissioners’ Court is to assess damages and “award” a dollar amount to landowner

• Braun & Gresham continues to negotiate

• Company can begin building after award

Phase 4: Appeal

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• Objection to award

• Formal courtroom jury trial

• Decides price• Expensive• Should be used

as last resort

General Negotiations

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• Price of land taken• Other damages• Details of routes• Location of

structures• Temporary

agreements– e.g., Roads/Easements

• Permanent easements

Easement Negotiations

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• Restore/protect land

• Access points • Roads• Improvements• Fences and gates• Liability

protections• Landowner’s

future use• Limits on others’

use

Pipeline Specific Negotiations

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• Non-exclusivity• Limitation of number

of lines• Limitation of diameter

of pipe• Limitation of easement

width• Limitation of surface

facilities• Depth of pipe• Surface restoration

measures • Indemnity protection• Termination clause• Land/ranch specifics• Miscellaneous

provisions– No warranty, dispute

resolution, etc.

QUESTIONS?• Do transmission lines/pipelines

negatively affect property values?

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QUESTIONS?• Do transmission lines/pipelines

negatively affect property values?• Should the seller tell the buyer an

electric utility company has notified the seller the property may be impacted by the routing of a new transmission line?

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QUESTIONS?• Do transmission lines/pipelines

negatively affect property values?• Should the seller tell the buyer an

electric utility company has notified the seller the property may be impacted by the routing of a new transmission line?

• Should the seller tell the buyer a pipeline company has notified seller about the possible routing of a new pipeline across the seller’s property?

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QUESTIONS?• Do transmission lines/pipelines

negatively affect property values?• Should the seller tell the buyer an

electric utility company has notified the seller the property may be impacted by the routing of a new transmission line?

• Should the seller tell the buyer a pipeline company has notified seller about the possible routing of a new pipeline across the seller’s property?

• Should the seller disclose whether the property is under the threat of potential condemnation?

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Bad Old Easements• Blanket easements by past failure to

negotiate• Undefined ingress and egress locations• Undefined width of permanent

easement• Undefined number and sizes of

pipelines• Undefined number of transmission line

circuits, etc• Undefined use of additional temporary

work space• Payment for new lines at 1930’s prices

-- or worse!!– Example $0.25/rod for each additional line (1 rod =

16.5 feet)

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Harrington v. Magellan Pipeline Co., L.P. (2011 Waco Court of

Appeals)• An easement agreement in 1919 that

grants the pipeline company the right to lay multiple pipelines “over and through [Grantor’s] lands” is ambiguous as to whether it means multiple pipelines in the same ditch as the first pipeline, or multiple pipelines at different locations and in different directions on Grantor’s lands.

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Natural Resources Code Sec. 111.0194

• Applies to easements prior to January 1, 1994

• Applies to pipelines laid under threat of Condemnation or Eminent Domain

• If width of easement is undefined in old easement then “extends only a width of 50 feet as to each pipeline laid”

• Company may rebut with evidence it needs more

• Statute is unfortunately ambiguous33

Exceptions to Title Policy• Buyer should request the documents

and carefully review the language before closing

• Without a careful review by buyer and his/her attorney, the buyer man not realize the extent of the burden of a bad old easement`

• Company may decide to “maintain” an old easement and remove all trees/growth in a 50-100 foot strip of land -- or lay additional lines anywhere on the property

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Q & A

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Patrick L. Reznik512-894-5426

preznik@braungresham.comwww.braungresham.com