Alerts and Updates
New York Restricts Use of Eminent Domain by Utilities, Part of National Trend
October 18, 2006
New York has enacted new legislation to restrict the right of certain gas and gas electric corporations to exercise eminent domain within the state, joining sister states in response to the Supreme Court's Kelo decision and subsequent public outcry.
Prior to the new law, Section 11(3)(a) of New York Transportation Corporation Law provided that: "An electric corporation and a gas corporation shall have power and authority to acquire such real estate as may be necessary for its corporate purposes and the right of way through any property in the manner prescribed by the eminent domain procedure law."
Senate Bill 8349, signed by Governor George Pataki on October 3, 2006, amends Section 11 of New York Transportation Corporation Law to revoke, effective immediately, the eminent domain right of any gas or electric company which:
- commences and ends in the state of New York;
- through its employees, agents, representatives, or assigns, has represented in testimony that the construction of such power transmission lines will increase electric rates in any part of the state; and
- applied for and did not receive an early designation as a national interest electric transmission corridor under an act of Congress commonly known as the Energy Policy Act of 2005.
The legislation is specifically directed at the New York Regional Interconnection (N.Y.R.I.), a project of a private corporation to build an approximately 200-mile-long high-voltage electricity transmission line from Utica in central New York to New York City and Long Island. It has been reported that, in order for the project to be built, the company would need to acquire land in 37 towns and villages. The company has stated that the project would lower electricity prices in downstate New York, but would increase prices upstate.
In a press release announcing his signing of the new law, Governor Pataki stated:
"The use of eminent domain can have a significant impact on communities, and we must ensure that the legal power to take lands for public benefit is used appropriately. Through this law, we will establish additional protections for communities across New York State by prohibiting transmission companies from utilizing eminent domain if a proposed project does not meet designated criteria. These new restrictions help to clarify the rights of a community and its residents, and will uphold their interests with regard to certain projects involving eminent domain."
Notwithstanding the new legislation, the project could still go forward if the federal government designates the N.Y.R.I. as a national interest electric transmission corridor under the Energy Policy Act of 2005. The new state statute could also be subject to legal challenge on the ground that it appears to single out one company. No such challenge has yet been filed.
For Further Information
If you have any questions about this Alert or would like to learn more about eminent domain and redevelopment laws, please contact George J. Kroculick or any of the other attorneys in our Eminent Domain and Land Valuation Practice Group.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
