Pataki Signs Law Limiting Use Of Eminent Domain
BY JOHN TOSCANO

Declaring that the state's legal power to take property must be used carefully, Governor George Pataki has signed into law legislation that will limit the use of eminent domain by electricity and gas companies.

Pataki's signing of the bill goes counter to a United States Supreme Court historic and controversial ruling about a year ago which stated that the government could transfer private land from one owner to another for the purpose of economic development. The ruling also claimed states were free to change their laws.

It's possible the New York state law can be overturned on appeal as violating the Supreme Court decision.

The governor's action appears to be aimed at a proposed power transmission project in Upstate New York that would bring cheaper electricity into New York City and Long Island, but would raise utility rates upstate and require the taking of some homes and other property.

Mayor Michael Bloomberg issued a statement indicating opposition to the governor's action, saying it could be used to stop a potentially beneficial project, but did not allude directly to financial benefits for city residents or a new power source to help meet the city's power needs.

The project in question has been proposed by the New York Regional Interconnect (NYRI). It calls for construction of a $1.6 billion, 190-milelong power transmission line from Utica in Upstate New York to the Hudson Valley, and from there to New York City and Long Island. The proposed line would traverse seven counties and 37 towns and villages.

City officials are on record as supporting the In signing the bill into law, the governor 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."

project because the new power source would help prevent power breakdowns such as those that occurred this past summer in Astoria and Westchester.

Upstate lawmakers who issued statements applauding Pataki's new law hindering eminent domain indicated the NYRI project would take homes by eminent domain and referred to the NYRI project as "the effort of a foreign company to run roughshod over the lives, homes and communities of Central New York".

The new law limiting the use of eminent domain, would make it very difficult for the private company to acquire the property that is required for the project.

In signing the bill into law, the governor 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."

Pataki added: "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."

Bloomberg said he was disappointed that the governor signed a bill aimed at prohibiting New York Regional Interconnect from exercising its right of eminent domain to build a power transmission line.

The mayor said NYRI had only recently initiated its Article VII application with the Public Service Commission (PSC). "This legislation attempts to undermine a reasoned examination of the project's expected benefits," he said.

The new law, the mayor pointed out, "would effectively pre-empt the state, through the Public Service Commission, from evaluating the pros and cons of the proposal. In addition, this legislation will send a signal to capital market participants, who otherwise would invest in energy infrastructure, that local opposition could be used to stop a potential beneficial project even before it has an opportunity to be considered on the merits".

The legislation signed into law by the governor amends the Transportation Corporations Law to prohibit gas and electricity merchant transmission corporations from using eminent domain if:

a transmission line project begins and ends in New York state

the construction of power transmission lines will increase electric rates in any part of the state, and

the corporation applied for but did not receive early designation as a national interest electric transmission corridor under the Federal Energy Policy Act of 2005.

The NYRI project would violate each of these restrictions. It would run from Utica in Upstate New York to the Hudson Valley, and from there to New York City and Long Island.

Several upstate lawmakers said in their comments supporting the governor's signing the new law that the creation of the NYRI project would increase utility costs upstate. State Senator John Bonacic (R) declared that projects like the NYRI proposal "would take homes by eminent domain and raise electric rates all for their own profit, clearly is not working for the people".

Senator William Larkin (R) charged the project "would force upstate residents to face a severe decline in their property values while also experiencing a major increase in their utility costs".