Settlement would give pipeline companies conditional condemnation powers

By David Falchek (Staff Writer)

Published: September 17, 2010

A settlement filed earlier this month among pipeline company Laser Northeast Gathering LLC and others in its bid to be dubbed a utility would grant conditional power to condemn private land.

Those conditions and landowner protections, critical to how similar companies throughout the state would wield eminent domain, were heavily redacted from the public version of the settlement. Four pages and 25 items under “landholder protections” were redacted.

The settlement is not final. Because it is non-unanimous, parties are expected to file additional briefs. Administrative Law Judge Susan D. Colwell will make a recommendation to the commission; a final decision is expected early next year.

The settlement attempts to meet the need for midstream companies to connect growing numbers of Marcellus Shale wells to interstate pipelines in ways least intrusive to communities, the environment and individuals.

“The joint petitioners agree that this settlement is an innovative and reasonable resolution of this matter in a way that meets and promotes the public interest,” the settlement reads.

According to the agreement, before pursuing eminent domain, a pipeline company must do the following:

– Exhaust efforts. The company must negotiate in good faith with landowners to obtain easements.

– Notify PUC. The company must notify the PUC at least 30 days before commencing eminent domain and explain why it is being used.

– Selectively condemn. The company may not condemn property where the pipeline would result in the abandonment or destruction of existing structures, lakes or ponds.

– Landowner-initiated remediation. After negotiations have reached an impasse, landowners have the ability to opt for nonbinding PUC mediation before eminent domain is begun.

In the eminent domain process, a local board of view under the auspices of a local judge sets a value on the easement.

Public input

Environmental and natural gas attorney Steven Saunders said it is unusual for the PUC to release a settlement agreement with key provisions redacted.

However, PUC spokeswoman Jennifer Kocher said settlement agreements often are not public and don’t become public unless they are part of a commission decision. She said petitioners have the ability to request items be redacted for competitive reasons.

The decision comes after several public hearings with the vast majority of speakers opposed to Laser’s bid for what is known as a certificate of public convenience. The document would set a precedent allowing natural gas collection and gathering companies to be treated as public utilities permitted to use eminent domain in exchange for another layer of regulation.

Parties agreeing in the settlement were the Silver Lake Association, the Office of Consumer Advocate’s independent Office of Trial Staff, and private individuals Vera Scroggins and William C. Fischer.

The settlement described negotiations as “intensive and time-consuming” and said the result “represents give-and-take by all parties.” Many intervenors refused to sign on, including other representatives of the natural gas industry.

“We hope these conditions that protect landowners, the environment and communities will become part of rulemaking,” said Earthjustice attorney Deborah Goldberg who represented Ms. Scroggins in the process. “That’s why others in the industry didn’t sign on – because they don’t want to grant those protections.”

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