The MPSC Has Approved the Oneida to Nelson and Helix to Hiple Project: What Comes Next?

The Michigan Public Service Commission (“MPSC”) has issued a certificate for Michigan Electric Transmission Line Company’s (“METC”) Oneida Substation to Nelson Road Substation and Helix to Hiple Projects. 

The Oneida project entails a new 345 kV double circuit transmission line for approximately 40 miles in Lebanon Township in Clinton County, North Plains Township in Ionia County, Dallas, Westphalia, and Eagle Townships in Clinton County, and Oneida Charter Township in Eaton County, Michigan.  The Helix project entails a new 345 kV double circuit transmission line for approximately 55 miles in Clarence, Lee, Marengo, Eckford, Clarendon and Tekonsha Townships in Calhoun County and Girard, Union, Batavia, Coldwater, Bethel, and Gilead Townships in Branch County. METC’s project seeks to increase overall systemic reliability and is in response to long-term plans to transition from fossil-fuel generation to other alternative energy sources like solar and wind. Essentially, METC intends to provide additional transmission line capacity, in part to connect alternative energy generation sources into the larger power grid.

MPSC approval is necessary for these projects to proceed.  The issuance of the certificate also removes other obstacles to construction of the projects. It allows METC to forego compliance with local zoning ordinances that might otherwise regulate construction of the lines.  It also facilitates the acquisition of property via eminent domain. 

Eminent domain lawsuits are filed in the local county circuit court.  That court must defer to the determinations made MPSC.  Specifically, the issuance of these certificates “constitutes a prima facie case that the project in furtherance of which the particular parcel would be acquired is required by the public convenience and necessity” and “is binding on the court.”  MCL 216.56(3).  As such, certain types of judicial challenges are foreclosed by the certificate.  Here, the certificate approves construction of double circuit 345 kV transmission lines within a 200-foot-wide right of way at locations approved by the MPSC. These issues cannot be challenged in court as the law currently exists. 

There is pending legislation initiated as a direct response to these projects that, if enacted by the state legislature, would expand the powers of the circuit courts.  That legislation would require the court to “determine the acquisition is necessary only if the independent transmission company or affiliated transmission company demonstrates by clear and convincing evidence that the proposed route of the transmission line is more reasonable than other possible routes for the transmission line. In determining if the proposed route of the transmission line is more reasonable than other possible routes for the transmission line, the court shall give priority to all of the following:

(a) Routes within or adjacent to public land.

(b) Routes within or adjacent to current rights-of-way and easements.

(c) Routes adjacent to property boundaries.”

Notably, the alternate route for the Oneida line requires METC to overlap with right of way owned by Consumers Power for a portion of the route.  As such, it may have anticipated one of the issues that could be raised if the new legislation is implemented.  The MPSC did not require a portion of the Oneida route to be shifted to parkland, which is another factor identified in the proposed legislation.  The approved, alternative Oneida route prior to any property owner accommodations is depicted in orange on this illustration.

The approved, proposed Helix route prior to any property owner accommodations is depicted in green on this illustration.

METC has been asking property owners to sign option agreements conveying property rights to allow it to build the projects contemplated by the certificates.  With the certificate in hand, METC can be expected to begin more aggressive property acquisition efforts both in terms of pressing owners to sign the options and exercising rights conveyed to it by the Uniform Condemnation Procedures Act (“UCPA”) to secure property rights.

The option agreements that METC have pursued are problematic for several reasons:

• METC, its agents, employees, and government representatives may enter the property whenever they want, without notice, and unaccompanied.

• Granting these options may violate existing mortgages.  Property owners must obtain consent from their mortgage lenders.

• The option allows METC to use whatever property it wants outside the easement area for construction, without paying any compensation for it. Construction activities like those contemplated by METC in this project often have detrimental impacts on farmland that lasts for years, including compaction and soil mixing, not to mention crop loss during the duration of the use. 

• METC can construct however many transmission lines that it desires.

• METC can increase the kilovolt capacity of the lines at its discretion.

• The easement allows METC to cross over the entire property to access the area encumbered by the easement, without paying for that right.

• It only requires reimbursement for growing crops that are damaged, without any payment for future reduced yields attributable to compaction, soil mixing, damaged drain tile, or impacted irrigation.

• There are no provisions governing how excavated soils are treated to avoid mixing top soil.

• Many of these easements impact timber stands. There is no language about how those areas will be treated afterwards, including what happens to the cut wood or removal of stumps, filling, and grading.  Areas cut through woodlands are susceptible to buckthorn infestations. Buckthorn is a host for soybean aphids.

The compensation being offered in METC’s options is woeful. METC’s options consider only the value of the land encumbered by the easement. Just compensation requires consideration of damages to the remainder, including the impacts of the access rights encumbering the entire property, damage to drain tiles or irrigation systems, limitations on the future ability to install irrigation systems, reduction of value to any homes on the property, impacts on future development if that is within the highest and best use, loss of trees, costs to avoid business interruption incurred when seeking to restore the property, and just compensation for temporary work spaces. If properties are improved with homes, then the potential devaluation of the home must be evaluated. For example, loss of trees that provide practical benefits like screening from wind or noise and add aesthetic value that is replaced with a view unsightly utility towers will likely negatively impact the value of that home. These lines will also generate noise, an issue discussed in the MPSC order.

METC will demand that Owners who refuse to sign the options provide access to their properties (the options grant unfettered access rights) and financial information. METC’s attorneys have contacted me about these processes before the certificate was granted. METC is entitled to do so pursuant to the Uniform Condemnation Procedures Act. There are statutes governing physically accessing the property and providing financial information.

MCL 213.54(3) allows “an agent or employee of an agency” to “enter upon property before filing an action for the purpose of making surveys, measurements, examinations, tests, soundings, and borings; taking photographs or samplings; appraising the property; conducting an environmental inspection; conducting archaeological studies.” There must be “reasonable notice to the owner” and “a reasonable opportunity to accompany the agency's agent or employee during the entry upon the property.” “The agency shall make restitution for actual damage resulting from the entry.”

MCL 213.55(2) gives METC “the right to secure tax returns, financial statements, and other relevant financial information for a period not to exceed 5 years before the agency's request.” An owner may be reimbursed up to $1,000 to produce this information.

METC is empowered to file lawsuits to enforce these rights.

While the UCPA provides significant rights to METC, it also provides significant rights to property owners. MCL 213.66 contemplates that METC reimburse the contingent attorney fee that is traditionally charged to property owners who seek to contest the just compensation. It also contemplates that METC reimburse the cost of property owners obtaining their own independent experts to evaluate just compensation issues, including a real estate appraisal.

At this point, it is prudent for owners to retain an attorney who specializes in representing property owners in eminent domain cases rather than waiting for METC to file eminent domain lawsuits. It is dangerous for property owners who are unaware of the law to engage in direct communications with right of way agents. My clients have reported horrific experiences with right of way agents. For example, clients have reported being told by right of way agents not to hire legal counsel due to the expense, where the UCPA contemplates reimbursement of the standard contingent attorney fee. Right of way agents have minimized the legal rights conveyed by easements, where Michigan law requires that just compensation be based upon the assumption that the newly acquired property rights be used to the full extent allowed by law. I advise my clients not to engage in direct contact with right of way agents.

Retained legal counsel can also simplify the process of responding to METC’s access and information requests. For example, I facilitate access with the caveat that neither side will seek to admit anything said during that process. As to the information requests, METC will likely seek to obtain more than is contemplated by the statute or is reasonable. For example, while the statute requires property owners to produce existing documents, it does not contemplate owners being compelled to either create new documents or submit to being interviewed. METC will likely ask property owners to sit for interviews by their appraisers. There is no legal obligation to do so and it is inadvisable. It would be like a litigant sitting for a deposition without an attorney being present.

I have represented property owners in eminent domain matters since 1996, have represented more property owners against METC and ITC than any other attorney in Michigan in hundreds of matters in counties throughout the state, and I have already been retained by dozens of clients in each of the projects. There is strength in numbers and representation of a large group by the same attorney is mutually beneficial. If you are impacted by these projects, please do not hesitate to contact me.