NY Limits Eminent Domain Rights of Gas and Electric Companies

New York Governor George Pataki has signed legislation (Senate Bill S8349-A) that will limit the use of eminent domain by electric and gas corporations.

“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,” Governor Pataki said. “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.”

Senators and Assemblymembers applauded the enactment of the new law. Saying it was a "large step toward protecting our homes and communities” and ensures "that a company like New York Regional Interconnect (NYRI) cannot take land from an unwilling seller so that they can further their project, at the expense of our communities and our economy.” NYRI has proposed a controversial 200-mile-long high-voltage electricity transmission line from Utica in central New York to New York City and Long Island.

Under the State Transportation Corporations Law, gas and electric corporations have “the 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 procedures law.”

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

- The transmission company commences 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 new law takes effect immediately.

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Xcel Energy's Green Pricing May Be Abolished in Colorado

The fact that a small portion of Public Service Company of Colorado's (Xcel Energy) ratepayers pay a "green premium" on their electric bills to support 60 MW of wind energy while 1000 MW of wind power costs will be spread over all customers is deemed to make "little sense." The PUC staff have proposed the elimination of Xcel's Windsource green power program and for the program's cost to be absorbed by the entire ratebase.

A recent story in The Denver Post said that spreading Xcel Energy's Windsource program costs among all ratepayers would create a "negligible" increase in rates, a small fraction of 1 percent. The story added, "Customers who buy all their power from Windsource now pay an average of $58.55 a month, not including taxes and franchise fees. Typical customers using conventional power pay $52.58 a month. For a two-month period last year when natural-gas costs rose, Windsource power was priced up to $10 a month less than conventional power."

To our knowledge this is the first time that a state regulatory agency has advocated that a green pricing program be scrapped and incorporated into the general rate base.

In August 2006 testimony submitted as part of a proceeding (Docket No. 06S-234EG) related to Xcel Energy's proposed rate increase in Colorado, PUC staff engineer Richard P. Mignogna said, "Windsource comprises approximately 60 MW (actually a total of 61.35 MW to be precise) of wind resources on a system that will soon contain more than 1000 MW of wind generation. Charging a small group of customers a price premium for these 60 MW when the costs of the remaining thousand will be shared by all ratepayers makes little sense."

Mignogna's testimony was also critical of Xcel Energy's cost recovery analysis and accounting of its Windsource program. The PUC staff says that the program is over-subscribed and the utility is generating revenues far above the program's cost. Xcel claims that the program is not covering its costs and wants to raise the green power premium for program participants.

The PUC proposal to drop the Windsource program is opposed by Xcel Energy, the Colorado Office of Consumer Counsel and Western Resource Advocates.

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