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PA Utility Eminent Domain Exercise Not Limited to “Absolute Necessity”

In a 5-2 en banc opinion issued December 22, the Commonwealth Court flatly rejected the notion that a utility must prove “absolute necessity” before resorting to condemnation.  Affirming the PUC’s grant of PPL Electric’s application to exercise its eminent domain power to acquire rights-of-way and easements over the private lands of protestants to construct a new eleven-mile transmission line across the Susquehanna River and a related substation, the Court reaffirmed prior case law adopting an easier hurdle for would-be utility condemnors.  As the Court reasoned:  “Under Protestants’ proposed standard, utilities could only seek approval … when a problem is looming and the resolution is ‘absolutely necessary.’  Utilities would essentially have to wait until an existing system fails before seeking approval of a project.  Not only would this approach be impractical and unrealistic, it would actually pose a danger to the health, safety and welfare of the public.”  Hess v. Pennsylvania Public Utility Commission, 1370 C.D. 2013 (December 22, 2014) (en banc).

Pennsylvania law permits public utilities to place necessary facilities in the public right-of-way as a matter of right, and provides public utilities with eminent domain power to take private lands for that purpose upon a finding by the PUC that the service to be furnished by the utility is “necessary or proper for the service, accommodation, convenience, or safety of its patrons, employees and the public.” 15 Pa. C.S. §1511(c).  In Hess, the landowners contended that the statutory standard requires proof that the project is “absolutely required,” for example, to avoid imminent “line overloading” and “permanent damage.”   The Court, however, agreed with the Commission that “our courts have not required such a narrow standard to demonstrate necessity under 15 Pa. C.S. §1511(c). Rather, courts have found necessity wherever the project resulted in a benefit to the public, such as an improvement to the reliability of service or lower prices.”

Coming at a time when NIMBY (“Not In My Back Yard”) property owners and BANANA (“Build Absolutely Nothing Anywhere Near Anyone”) environmental groups are increasingly contesting the right of utilities to build natural gas and oil pipelines to support Pennsylvania’s energy boom, the decision is significant, even though its disposition of the “necessity” issue essentially follows existing law.

The dissent, however, offered support to those challenging utility projects such as transmission line siting on the basis of environmental concerns.  Judge Leavitt, joined by Judge McCullough, argued that alternative river crossing sites were available, and that the PUC was required to evaluate the impact of PPL’s proposal on the environment, but failed to do so.  Observing that PPL’s proposal will “degrade the environment” by placing “a new transmission line across the Susquehanna River in a pristine location,” she rejected the PUC’s reliance on its regulation implementing the Pennsylvania Constitution’s Environmental Rights Amendment to conclude that environmental impact analysis was not required because of the size of the transmission line:  “There is no rationale for not including a 69 kV transmission line within the ambit regulation because it will have the same negative impact on the environment as a high-voltage transmission line. It will involve clearing a wide swath of land and leave in its place unsightly transmission poles and lines.”  Given the Pennsylvania Supreme Court plurality’s recent reliance on the Environmental Rights Amendment as a basis for striking down key provisions of Act 13’s Marcellus Shale driller-friendly zoning provisions in the Robinson Township case (see previous blog posts), the dissent provides what may be an inviting basis for the landowners to seek Supreme Court discretionary review.

 A copy of Hess v. Pennsylvania Public Utility Commission, 1370 C.D. 2013 (December 22, 2014) (en banc) is available here.

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