Shock Treatment: Negotiating Transmission-Line Easements

Release No.9-0110

(COLLEGE STATION, Tex.) — Wind can generate electricity, but the electricity cannot go anywhere without power lines. One of the state’s experts on negotiating easements has some advice for landowners facing condemnation for transmission lines.

“Very little information exists for landowners on how to negotiate transmission-line easements in lieu of condemnation because such taking occurred infrequently in the past,” said Judon Fambrough, attorney at law with the Real Estate Center at Texas A&M University and author of several articles on condemnation and landowners’ rights. “Condemnation for transmission lines will increase with the development of wind farms.”

Texas wind farms can generate about 8,000 megawatts (MW) of electricity, but existing transmission lines can carry only about 4,500 MWs. Plans are underway to construct 2,334 miles of lines to transport an additional 18,456 MWs of electricity. The plan includes taking 56,581 acres.

“A 2004 decision by the Texas Supreme Court diminished greatly landowners’ rights,” said Fambrough. “Recent legislative attempts to improve landowners’ rights have failed.”

A key practice sanctioned by the court allows condemnors to try and purchase more property rights than could be achieved through condemnation. That is because condemnation can be challenged in court, he said.

“What this means is that the transmission-line easement agreement presented to landowners at the beginning of the process in no way reflects what the condemnor can later condemn,” Fambrough said.

He provided an example. The condemnor may offer a proposal to purchase a 50-foot easement when it can condemn only a 30-foot one. According to the Texas Supreme Court, it is up to the landowners, not the condemnor, to narrow the agreement to what is reasonably necessary for the project.

Fambrough had other suggestions for landowners.

“Get a copy of the condemnor’s Certificate of Convenience and Necessity (CCN) issued by the Public Utility Commission. The CCN contains critical dimensions, such as the width, height and amount of electricity, for the proposed easement that should be inserted in the transmission-line agreement. 

“Never warrant title to the land,” said Fambrough. “Specify the condemnor takes the title to the easement solely at its risk. If title fails, the landowner will not be required to return any consideration.”

Fambrough said landowners should attempt to insert “Time is of the Essence” language and a “Favored Nations” clause in the agreement.  Without the former language, there are no hard and fast deadlines.

The “favored nations” clause ensures no other landowner gets a better deal in the area. However, warns Fambrough, “This provision is very difficult to get.”

As wind turbines generate more and more electricity in Texas, the need for additional transmission lines increases. Landowners must understand the condemnation process and the items to include in a transmission-line easement to best protect their property rights.

For more information on this topic, read “Shock Treatment: Negotiating Transmission-Line Easements,” in the January issue of Tierra Grande magazine.

For years, Fambrough has provided Texas landowners information about how to protect their property rights in different situations.  In the past, he has written extensively on how to negotiate oil and gas leases, groundwater leases, hunting and wind leases, and pipeline easements in lieu of condemnation.  To read more of his articles, go to the Real Estate Center’s website.

"A Must Read for Land Owners!" was originally posted as a blog post at Shannon Register, Realtor^® on February 3, 2010.

Shannon Register, Realtor^® named "Best Real Estate Blog in Texas by the Mays Business School Real Estate Research Center at Texas A&M University.

© 2008-2009 Shannon Register, Realtor^®