Federal regs would preempt N.H. regs on eminent domain for pipeline projects like Kinder Morgan

Last modified: 8/7/2015 10:12:42 AM
Several lawmakers want the state to have a say in regulating natural gas pipelines in New Hampshire.

Almost all of that power, including the power to take property by eminent domain, now rests with the federal government under the Natural Gas Act. This power was at the crux of testimony heard by the state Senate Energy and Natural Resources Committee, which yesterday took input on a bill that would effectively allow landowners to require a company take their entire parcel, even if the developer only wanted a sliver of land for an easement.

Sponsors said the bill would protect landowners’ rights, but many cautioned it wouldn’t pre-empt federal statute that allows natural gas pipeline developers from taking private land by eminent domain.

“It’s great to give guidance, but, when you do, my advice to you would be it better not be burdensome to the applicant because you are eventually going to have a fight, and it’s not a fight the state can win,” said F. Anne Ross, legal counsel for the state Public Utilities Commission.

Legislators drafted the bill in response to the proposed Kinder Morgan project, which would run 70 miles of new natural gas pipeline through 17 communities in southern New Hampshire. Advocates say the more natural gas pipeline capacity is badly needed to stabilize the state’s energy costs, but the plan has rattled landowners near the pipeline’s proposed route.

The House of Representatives passed the bill last month, but amendments tacked on in the Senate call for more rigid restrictions and guidelines for natural gas pipeline locations.

“The amendment I have is specifically not designed to prohibit development, it’s specifically not designed to try to stop it,” said state Sen. Andy Sanborn, a Bedford Republican. “It’s really to find a way to find a balance that protects New Hampshire residents and New Hampshire property owners and gives consideration to the fact we have high electric rates.”

The amended bill would cap the amount of land taken by developers at 50 acres, establish fines for issues like noise and ban pipelines from being sited within a quarter mile of schools, playgrounds, daycares and other facilities where children play.

The problem is federal law would pre-empt any state regulations in the bill, Ross said.

“The federal government has completely occupied the field of regulating both the safety and the siting of natural gas transmission pipelines,” she said.

The bill would also require pipeline developers to pay land-use change taxes for property it takes by eminent domain. Developers of energy projects, namely public utilities, are currently exempt from paying the change-of-use tax. Changing this would increase project development costs, which would likely be passed to taxpayers, said Susan Geiger, a lawyer with Orr & Reno who represented Kinder Morgan yesterday.

“If you change the exemption and require the payment of those change-in-use taxes, they will be passed on to ratepayers and put an upward pressure on rates, which at this time as we all know are seeing a lot of upward pressure,” she said.

“The rest of the legislation appears to be aimed at thwarting development of the Kinder Morgan project.”

The Northeast Energy Direct pipeline still needs approval from the Federal Energy Regulatory Commission, which evaluates whether interstate natural gas pipeline projects proposed by private companies should be approved.

If the commission authorizes the project, Kinder Morgan would try to negotiate easements with property owners. If this fails, they can take the easement under eminent domain with the court determining compensation. For its part, Kinder Morgan has said it doesn’t plan to take property through eminent domain, as most of the pipeline would run alongside existing Eversource Energy transmission lines.

The FERC can encourage natural gas pipeline applicants to work with local ordinance or plans, but applicants can challenge the commission in court if it is asked to comply with a burdensome local ordinance, Ross said. In these cases the courts almost always rule in favor of the applicant, she said.

The bill would put the state in a position to clearly express its preferences when it comes to the pipeline safety and location, Sanborn said.

“The question we have to ask ourselves is how high are we going to build these guardrails? I want to see guardrails high enough to protect the people in this state,” he said.

Sponsors of the original House bill said the amendments went too far in restricting pipeline development.

“We need more pipelines. We shouldn’t try to overly restrict them. This is very bad public policy in my opinion,” said state Rep. Dan McGuire, a Republican from Epsom who co-sponsored the House bill. The original version mirrored protections already in place for property owners who have land taken by eminent domain for the construction of above-ground substations and transmission lines.

“It’s not that we wanted to somehow restrict or make putting in pipelines more difficult, it’s just we wanted to make it as fair as possible,” McGuire said.



(Iain Wilson can be reached at 369-3313 or iwilson@cmonitor.com or on Twitter@iainwilsoncm.)




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