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May 18, 2001

POWER GRAB
Landowners, utilities wrangle
over rights-of-way

By Lana Robinson
Field Editor

Part II of a two-part series

With the postponement of a Public Utility Commission hearing until later this month, the unwelcome prospect of a 52-mile mammoth transmission line cutting through the farms and ranches of 97 South Texas landowners yet looms. Notwithstanding, grassroots organizers working to halt the controversial power line—or at least see that its routing follows existing rights-of-ways rather than cutting a swath through virgin land— have strengthened their resolve.

Henry Miller of Kenedy is a landowner/intervenor in the process by which Central Power and Light (CPL) is seeking a permit to build a line from their generation plant at Coleto Creek, west of Victoria in Goliad County, to a substation at Pawnee, which is southwest of Kenedy in Karnes County. Miller, a spokesman for landowners who feel somewhat disenfranchised by the process, said he is not at all surprised by the PUC's "procrastination."

"This is yet another delay that emphasizes the sloppiness in which they (PUC) have worked. When they started this thing, PUC put it on a 180-day rush schedule. When it became clear that more time was needed for the Commission to help CPL make its case, the 180-day time frame was ignored. At the end of May, we will already have reached 360 days beyond that 180 days since the application was filed," said Miller.

Meanwhile, legislation sponsored by Rep. Judy Hawley (D-Portland) which would require public utilities to use existing rights-of-ways or fence lines for routing of new lines where possible, has stalled. H.B. 2709, crafted as a direct result of the case in point, lost steam in committee when several investor-owned utility companies testified in opposition.

Order of events told

To recap the order of events in the dispute, in 1999, CPL requested that the PUC order CPL to build the line. PUC refused the request because ERCOT/ISO (the independent entity responsible for managing the state's electrical grid) had not labeled the project critical. Next, the PUC required CPL to appear before an administrative law judge in order to prove the need for the new transmission line.

After five days of written and oral testimony in March 2000, Judge Barbara Owens (ALJ) in her Proposal For Decision (PFD) determined that the need did not exist because it had been satisfied by new generation plants in the Rio Grande Valley with a capacity of over 5,000 megawatts. However, PUC Commissioners–Chairman Pat Wood, Commissioners Judy Walsh and Bret Pearlman–disregarded the ALJ ruling and tentatively approved CPL's application.

In the wake of the reversal, many disappointed landowners, backed by resolutions from Farm Bureaus in Goliad and Karnes counties, filed for a rehearing. On Feb. 8, 2001, the PUC denied all motions. Landowners filed subsequent motions for a rehearing, which was originally set for the Commission's regular meeting on April 25, 2001, and later rescheduled for May 18.

Texas Farm Bureau President Donald Patman said "Texas Farm Bureau is concerned that recent actions at the Commission have contributed to `stacking the deck' against the landowners and their ability to participate."

As an example of what Miller sees as preferential treatment given applicants over landowners, he pointed out that CPL even has an "in box" for receiver service of documents at the PUC Central Records office.

"The intervenors, on the other hand, are so remote from the process, they are not provided notice of the order until more than a month late," he said.

Jane Montgomery, who owns land in Goliad County, worries that a bigger problem awaits landowners and their heirs in the future. That's why she's resisting, along with Miller and others.

"One of the PUC commissioners stated in the first hearing in September 1999 that the intent of cutting a new path through virgin land was to create a new pathway for multiple easements. On my place, the only place they can add it is to the south, because the road is to the north.

"I have just under 200 acres. It's long and skinny. This line is going alongside of our property. They intend to cut this new path so they can keep adding on to the south side of that easement. Going along the side, it won't take many of these 160 to 180 foot easements to take up most of my land. Then they'll move to my sister-in-law's and onto my other brother's land," said Montgomery. "We have 600 acres altogether. Eventually, they would keep eating and eating away at it. That's why I have been so adamant, saying 'You are not taking my place!' My family has owned and ranched that land since the 1870s."

A South Texas Electric power line cuts across one corner of Robert Rosson's 100-acre tract of land. Now, CPL wants to take 15 more acres along the east border of his property. Rosson entered the process too late to register as an intervenor. But he believes he may have an ace up his sleeve because contractors hired by CPL to conduct a routing study allegedly disturbed an Indian site on his property without Rosson's permission.

"I'm going to try to get a restraining order out of the court to prevent them from going back down there again," he said.

Legal recourse next?

Jeanette Wharton, whose 130 acres lays between Henry Miller's place and property belonging to her brother, Lee Hammack, sensed early on that the process was flawed and along with Hammack hired legal counsel. Hammack's son, an engineer, challenged the CPL routing study during one hearing.

"We filed motions for continuance. New discovery given to us by CPL revealed gross 'cut/paste errors' in the document submitted to the PUC. There were 14 different mistakes in routings. Some were not complete. They studied 29 miles and there were gaps of five miles. They admitted to the mistakes and corrected them before the hearing," Hammack recalled. "We then discovered a major formula error mistake in the documents they filed on Feb. 11 (2001). They didn't acknowledge that at the time. In March, they made it public that the study had a problem, in their presentation of how it worked. And that's my concern. I am not happy at all. They could use an existing corridor that doesn't cut across 52 acres of brand new land.

"I look at it as a continuing trespass. I don't want it, for me or whoever owns it," Hammack continued. "It's my job to protect that land. That's what I'm trying to do. It's a wrong that needs to be righted, even if we have to settle it in the courts. But we have to exhaust this process first."

Catherine Webking of the Austin lawfirm Germer, Bernsen and Gertz is Hammack's attorney, and Shannon McLendon is co-counsel. Webking stands ready to file an appeal on behalf of five landowners if the Public Utility Commission leaves the application as being approved in its action later this month.

"CPL has not acquired a majority of the right-of-way at this point. Condemnation proceedings would come after the PUC action is final. This is another time-consuming and arduous procedure," Webking added, indicating that according to filings, CPL has secured easements from fewer than 30 landowners to date.

Although CPL is part of a company–American Electric Company–Webking said they are still considered a public utility with condemnation authority.

Webking, who has practiced before the PUC for a decade, believes landowners have several areas that are appealable.

"First, the historic justification of the lines has been to serve that public utilities' customers directly. But this is being proposed for a much different reason. In this case, the line has been proposed more for the purpose of enhancing the overall transmission grid of ERCOT to allow a more competitive market," Webking explained. "The justification for the one area of the need that was evaluated relied on a standard different than that which has been applied historically and different from the statute, S.B. 7 by Senator David Sibley and supported by Wolens in the House."

Webking also noted examples of how the PUC had departed from its standard with respect to this particular permit application.

"Ordinarily the utility proposes a minimum of three alternative routes. CPL came in with one proposed route. Also, the utility typically comes in with a lot of load-flow studies and technical data. CPL didn't present any studies to support the need. They relied solely on the ERCOT report which expressly says it is not making a determination of need," she said.

Another point made by Webking is the fact that the consulting firm conducting the original study for routing the proposed line studied 29 potential different routes, 11 of which were subsequently excluded by the utility.

"One explanation they gave for not following the existing route was they said they did not want to exit the north side of their generation station because the new line would have to cross two existing lines. Chairman Wood also made reference to an assertion by the utility, that they wanted to reserve space on the north side of their plant for future lines," she said.

Finally, Webking pointed to the basis upon which Judge Owens felt CPL's permit should be rejected–that a number of plants built in South Texas since 1998 have filled the power gap and there is no longer a perceived shortage, as the utility is claiming.

Webking praised landowners for their tenacity and the patience they have demonstrated in trying to give the process a chance to work.

"It is incredibly difficult. The landowner has nothing to gain and everything to lose in this process. These landowners have been willing to act on principle in their efforts and resources to challenge this line. There is no potential upside, no potential to recover any of those costs. The power company will recover costs either way. The Farm Bureau support of the landowners in these issues is invaluable both from a morale standpoint as well as adding the substantive perspective of ag lands. These are key issues," she said.

Annualized payments?

"Our bottom line is first, to try to stop it; to put it on the existing corridor next; and if that doesn't work, we're going through the courts. That will take time. Once the time is there, the next generation of power plants are being built. We're not going to quit," Henry Miller vowed.

But if all else fails, Miller and others are prepared to ask for annualized payments for the use of their land, which he said is perfectly legitimate and only fair.

"It goes back to eminent domain, which says landowners should receive just compensation. In today's world, when you are going from a need-basis out in rural America and going to a strictly profit motive, landowners deserve more than a one time payment," Miller suggested. "I've researched it and verified that the microwave tower people pay anywhere from $300 to $1,000 annually to landowners, and everyone says they consider those towers far less intrusive than a power line. If these utilities were willing to pay so much a foot for an annual payment, they'd have people lined up. This type of landowner incentive would be far more acceptable than forcing them to give up their land."

In a letter to the PUC last fall, TFB President Patman agreed.

"The Public Utility Commission should also be ready to recognize that alternative compensation arrangements, such as annualized payment structures, may be the most reasonable method for utilities to pay landowners for obtaining rights-of-way."

Karnes County Judge Alfred Pawalek is sympathetic to farmers and ranchers whose land is subject to permanent easements and he, along with the county's four commissioners—Darrel Blaschke, Jeffrey Wiatrek, James Rosales, and Isidro "Stormy" Rossett—signed resolution in support of the landowners position. Pawalek thinks the idea of annualized payments or some form of ongoing fee is appropriate.

"Agriculture is a big part of our economy here. When I was growing up in the early 1950s, one of the early lines came through. I spent a lot of extra time plowing around those utility poles. They are still there today," Pawalek observed.

Although CPL has not talked money to landowners, Catherine Webking said she understands they have estimated right-of-way costs at $2,000 per acre.

"Utilities have the ability to recover all of their cost of the line and rights-of-ways through fees. It is not clear to me why the utilities would be directly opposed to annualized payments," she said.