Eminent domain law pits Montana landowners against
growth and big business.

Story and photos by Emily Stifler, Explore Big Sky Managing Editor

Marie Garrison is a fourth generation Montanan, a
rancher and farmer, and a very concerned mother.

Garrison lives on a 4,500-acre ranch in Divide, south
of Butte, with her husband and two young children.
It’s land her husband inherited from his family, and the
Garrisons today run 350 head of mother cows there.

NorthWestern Energy has proposed to build a high
voltage transmission line that would run through the
Garrisons’ property on its way from Townsend, Mont.
to a substation near Jerome, Idaho. The permit could
be issued to the utility company in late 2012, at which
time it could further negotiate with landowners and
start condemnation proceedings, if necessary.

NorthWestern’s ability to exercise the power of
eminent domain for the Mountain States Transmission
Intertie (MSTI) was granted by House Bill
198, which was passed by the 2011 Legislature and
was allowed to become law without
Gov. Schweitzer’s signature or veto.
The new law allows private utility
companies to use eminent domain to
condemn private property for public
use and private corporate projects.

Landowners like Garrison argue this
is an unprecedented infringement on
property rights, while proponents of the bill say it’s
necessary for economic growth.

Garrison says the family would lose 300 acres to the
MSTI line between the access road and the proposed
24 ‘Guy V’ structures, which take up half an acre
each.

“[But mostly], the health effects scare the heck out
of me,” she said. “We have two small children and I
don’t care if it’s one in a million, if it increases their
likelihood of childhood leukemia or brain cancer, no
amount of money is worth it.”

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The Garrisons’ ranch already has three, 230-kilovolt
wooden ‘H’ poles running across it. Her
husband’s grandfather sold those easements to the
power company for $1 in the ‘50s, and the lines
bring power to nearby Bannack and Dillon.

“That’s transporting power to the neighbors.
That, to us, is a public use,” Garrison said.
She’s afraid HB 198 puts property owners in jeopardy
of losing land to anyone who wants to come
in and build something for profit.

In 2009, because of that concern, Garrison and
her neighbors started movemsti.com and Concerned
Citizens Montana, a website and organization
to fight for landowners’ rights.

These evolved into votefor125.com, a statewide
grassroots movement by citizens, lawmakers and
organizations concerned about the future of Montana
private property rights. They’re petitioning to get a
ballot initiative, Initiative Referendum-125 (IR-125),
on the November 2012 ballot that would repeal HB
198. The group would have to collect 24,337 signatures,
representing 34 districts, before Sept. 30, 2011.

Eminent domain in Montana

The power of public service companies to claim land
for themselves is nothing new for Montana, which
has had an eminent domain law since 1877.

Today, the law reads, “eminent domain is the right
of the state to take private property for public use.”
It sets out 45 specific public uses for which this
power may be exercised; among them roads, utilities,
public buildings, water supply systems, agriculture,
logging and mining. The condemner must
show “by a preponderance of the evidence” that the
public interest requires the taking.

HB 198 is being interpreted in different ways, with
the two sides arguing whether or not the process for
gaining the power of eminent domain has changed.

Its proponents—backers of utility expansion
projects and big merchant transmission lines like
MSTI—say that when the state put the law on the
books, they identified a number of private parties
(like telegraph companies, railroads, agriculture and
mining companies) as having the right to condemn
private property for public use. So, in their eyes 198
clarifies the original law that was in place for 100
years.

Opponents of HB 198 say this is the first time in
Montana history that a merchant (for profit) line has
this power. They’re concerned it’s become too easy
to gain the power of eminent domain.

House Bill 198

In a December 2010 Glacier County lawsuit, District
Judge Laurie McKinnon ruled that there wasn’t
an existing statute conferring the power of eminent
domain to a private entity.

Following McKinnon’s ruling, the group proposing
the Montana-Alberta Tie Line (MATL, another
high voltage power line), along with NorthWestern
Energy and Montana Dakota Utilities, lobbied the
state legislature, requesting that existing eminent
domain statutes apply to all entities providing
those 45 specified uses. Since some of these are
only built by private entities (roads, utilities,
mining and pipelines, for example), that meant
private interests would be granted the state’s
power of eminent domain.

“[HB 198] doesn’t change the regulatory process,
landowner compensation, due process, or the requirement
to negotiate with individual landowners
on such things as centerline and pole location
within the state-approved corridor,” said Darryl
James, Regulatory Affairs Manager for the MATL
project.

Instead, it intends to “clarify and restore what
was understood to be the law for over 100 years,”
said the bill’s sponsor, Rep. Ken Peterson, R-Billings.

That’s a misrepresentation, says John Vincent,
Gallatin County Public Service Commissioner and
a representative for IR-125. The eminent domain
law may be close to what it’s always been, Vincent
says, but with 198, the manner in
which eminent domain is acquired is
changed.

“Before [the new law] you could get
a permit from the [Department of
Environmental Quality], but that
didn’t give you eminent domain,” Vincent said.

“Under the law, you went to the landowner to see
if you could negotiate a deal—if not, you went to
the district court … Now, all you need is a certificate
of compliance from the DEQ.”

House Bill 198, abridged

An act clarifying a public utility’s power of eminent domain; clarifying
that a person issued a certificate under the Major Facility Siting Act
has the power of eminent domain; and providing an immediate effective
date and retroactive applicability date. Be it enacted by the
legislature of the State of Montana:

Section 1. Power of eminent domain. A public utility … may acquire
by eminent domain any interest in property, as provided in Title 70,
chapter 30 (the eminent domain law), for a public use authorized by
law to provide service to the customers of its regulated service.

Section 2. Power to exercise eminent domain. A person issued a
certificate pursuant to this chapter may acquire by eminent domain
any interest in property, as provided in Title 70, chapter 30, for a public
use authorized by law to construct a facility in accordance with the
certificate.

Section 6. Retroactive applicability. [Section 2] applies retroactively …
to certificates issued after Sept. 30, 2008.

Both sides agree that Montana, like all states,
needs an eminent domain law. They part ways
when it comes to how eminent domain should be
obtained by a private individual or corporation for
a private, for-profit project.

Most new high voltage transmission lines are
market lines built to sell more electricity in a
deregulated market rather than meet a public
need for power in a regulated market or service area,
Vincent said.

Proponents for the bill say the projects, many of which
propose utilizing wind power, are necessary for grid
stability and economic growth in Montana; plus, they
pay substantial state taxes and provide jobs.

“HB 198 is absolutely necessary if some of these projects
are going to go forward,” Peterson said.

Gov. Brian Schweitzer has called the bill “a deal with the
Devil.” He had announced an amendment prior to
the bill’s passing that would’ve required lawmakers to
address HB 198 again in 2013. But when
received the bill too late to amend it he instead let it
pass, saying it protected the economy and jobs.

Proposed transmission line upgrade in Gallatin Canyon

Gallatin Canyon residents may soon be
impacted by 198, as well.

NorthWestern Energy is acquiring
property easements to upgrade the
69-kilovolt power line that runs south
from the Jackrabbit Substation, west
of Bozeman, down Highway 191, and
into Big Sky to a 161-kilovolt line.

The upgraded line is needed to support
development in Gallatin Canyon,
Big Sky and at the resorts, said John
Fitzpatrick, NorthWestern’s executive
director.

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“Big Sky is one area that probably is
going to be more affected by eminent
domain than anyplace else in the North-
Western system in the short term,”
Fitzpatrick said.

If Northwestern lost the power of eminent
domain by having IR-125 pass,
Fitzpatrick says any landowner along
that project could shut it down, and Big Sky
wouldn’t get the needed upgrade in
services.

Property rights and IR-125

Both federal and state eminent domain
laws are designed to ensure that
landowners are given just compensation
if their property is acquired for
public use.

“Nobody wants to go through eminent
domain because of the cost and
time involved. It’s better to go talk to a
landowner,” Fitzpatrick said. “You have
to talk to landowners anyway… to give
them a final written offer.”

IR-125 is more about property rights
than about compensation.

“It wasn’t just about transmission lines,”
said Marie Garrison, the rancher from
Divide. “It was about who would want
to come in here and take our land. It’s
not right. It could be more than just the
power company; it could be anything.”

The right of Montana property owners
to have a level playing field when it
comes to eminent domain and condemnation
is too important to allow the automatic
‘trigger’ that a DEQ certificate
of approval provides private individuals
and corporations for private uses and
profit, commissioner Vincent said.

It’s about whether a corporation should
have the right of eminent domain and
the legal ability to condemn private
land for a private project whose primary
purpose is its own benefit and profit
rather than meeting an objectively
established public need.

The Major Facility
Siting Act

The DEQ uses the Major Facility Siting
Act (MFSA) to determine a project’s
worthiness, environmental compatibility,
public need and location.

The MFSA was developed in the 1970s
alongside the Montana Environmental
Policy Act (MEPA). It instituted a regulatory
and public engagement process
to review linear transmission, public
oil and gas facilities, energy generation,
coal fired power plants and nuclear
facilities.

Both Vincent and James pointed to
major problems in this process.

“Although the MFSA has criteria to
establish public need, they are, in practice,
virtually meaningless,” Vincent
said. He called the siting process a political
process disguised as an objective,
scientific, fact finding effort.

It’s been 40 years since the DEQ has
denied a certificate of approval, Vincent added. “They always
find a public need…because DEQ is
an executive agency and will always do
what the governor wants them to do.”

Vincent said that under former Gov.
Martz, the DEQ found a public need
justification for Holcim (the cement
supplier in Three Forks) to burn tires
for fuel in making cement. When
the DEQ’s data on air pollution from
burning tires was shown to be “virtually
baseless,” they forced to reverse its
decision.

“MFSA is a badly broken regulatory
tool,” said James from MATL. “It’s
confusing to the public, and [in the
case of transmission lines] it places
the state in the role of project developer,
rather than the objective role of
regulatory review… If we had a siting
process that worked, we wouldn’t be
embroiled in this eminent domain
debate to begin with.”

“It could work better,” said Tom Ring
from the DEQ’s Environmental Management
Bureau about the MFSA.

And policy changes are moving
forward. Under SB 206, a bill sponsored
by Sen. Llew Jones, R-Conrad,
the MFSA will now provide more
flexibility for landowners and project
developers.

Implications of repeal

If Montana voters repealed HB 198,
the 2013 Legislature would likely address
the eminent domain issue again.

Vincent hopes that under a new law,
private interests would be required—
both under the law and objective
public interest criteria—to prove that
a project benefits the public.

A repeal would have broad implications
on the regulatory process for
major projects like MATL and MSTI,
James says. Investor confidence may
suffer the biggest impact, he added.

Repeal could also drive up the cost
of energy bills statewide. As in the
case of the proposed Gallatin Canyon
power line upgrade, if a utilities
company like NorthWestern Energy
couldn’t exercise eminent domain
and ended up paying a high price on
legal negotiations or a new right-of-way,
all ratepayers would absorb that
extra cost.

Ideas for compromise are disparate.

Rep. Ken Peterson says the bill was
already a compromise, because they’d
had “substantial input from everyone
interested.” He doesn’t see any possibility
for future compromise.

James sees room for improvement in
the siting and environmental review
processes, the way the state engages
with landowners, and the way it responds
to landowner concerns as the
DEQ makes critical siting decisions.

“Before this bill was passed, we
already had a compromise in place
with the BLM and the DEQ and
NorthWestern Energy as far as line
placement,” said Marie Garrison. She
suggested placing the utility projects
on public lands.

“I make a choice to take care of my
kids,” Garrison added. “For them to
just come and slap this on our ground
would put extra stress on my life.
That’s why I got in the fight, because
I’m a very concerned mother.”