Over the last week, eminent domain has been in the news as three California municipalities consider allowing Mortgage Resolution Partners to “seize and restructure mortgages.” This issue has made news across the country, including an op-ed from Congressman David Schweikart (R-AZ), with this summary from a Heritage Foundation Issue Brief:
San Bernardino County’s reported attempt to use eminent domain to expropriate mortgages could be struck down by the courts as inconsistent with the requirements of the Fifth Amendment’s Takings Clause. Although weakened by decades of court decisions ignoring its original meaning, the clause remains a vital protection of private property rights, particularly where the government seeks to seize property from one private party for the narrow benefit of another.
Not only does the San Bernardino plan run afoul of that limitation, but it is also structured so as to deny mortgage owners the full degree of “just compensation” to which they are entitled by the Takings Clause.
Any attempt to seize mortgages from their owners would inevitably be met with litigation that could drag on for years, substantially undermining any benefit the county may hope to achieve. County officials would be reckless to discount these concerns.
Across the country and north a bit, another issue related to eminent domain has been raised in my home state of New Hampshire. The Northern Pass Project (NPP), initiated by Canadian company Hydro-Quebec, in partnership with Northeast Utilities subsidiary Northern Pass Transmission, LLC, aims to put up a direct current transmission line to bring 1,200 megawatts of electricity into the New England region. While eminent domain is not critical to the project’s success, it was deemed important enough for both chambers of the New Hampshire legislature to pass, and for Governor John Lynch to sign, legislation in March 2012 preventing public utilities (initiated from concerns related to NPP) from using eminent domain, unless it is being used for a project being paid for by customers through electric rates.
I first learned of the Northern Pass issue from Katie Rose, a professional singer whose song “Live Free or Die” has led some of the grassroots opposition to the power lines. Katie, also known as my little sister (full disclosure and all that), brought to my attention just how widespread the opposition is to Northern Pass when she was asked to play her song at a GOP event and a Tea Party event, and later both sang at and emceed the liberal “North Country Summer Festival.” Liberal environmental groups and the New Hampshire chapter of Americans for Prosperity are even on the same side, a sure sign of either a bad policy idea being presented or the sign of the Apocalypse.
“I am opposed to this project because it is going to hurt thousands of people,” said Katie. “Additionally, their methods leave much to be desired. One major problem is that the Northern Pass people seem to have an entitlement problem. Much like the wind turbines in Vermont that had little local input and ended up blocking off an entire mountain, Northern Pass is not trying to work with the people their project would affect. Governor Lynch made it very clear they need the approval and support of local towns and their residents, but instead of being upfront Northern Pass has created multiple offshoot businesses in order to trick locals into selling their land for well above market value. Over 30 towns have nearly unanimously opposed the project, yet Northern Pass continues to try and bulldoze their way through the North Country’s residents.”
According to Charlie Jordan, editor of the Colebrook Chronicle, the largest local weekly newspaper in Northern New Hampshire, this opposition to Northern Pass is no surprise to him. “This area has a strongly libertarian streak. Coos County may have been the strongest area for Ron Paul in the state, and may have even carried the most votes per capita of any county in the country. This makes it the worst area in the state to try and take over. It was very naïve of Governor [John] Lynch to think the North Country would just roll over and go along with this, which is why I am grateful he listened to the people of New Hampshire signed the eminent domain bill in March 2012.”
Jordan explained that he foresaw this kind of issue coming a decade ago. “Ten years ago there was a big move for the state to own more property to protect it from harm. I opposed that because, while conservation is noble, it means the only areas that can be developed are those where people live. In this case, wires are going to be running over and near the homes of people. I’m all for protecting animals, but when you can put a fluorescent light bulb underneath these wires and it turns on, that’s a problem. What about the dangers to people?”
According to Jordan, the issue includes both home-based businesses and general property value principles. “While it will be mostly homes that will impacted, a variety of businesses – such as a golf course in Campton – will be affected. They’re even planning on running lines almost directly through the center of my town, Clarksville.”
“People don’t come to New Hampshire to move into, or vacation near, an industrial zone,” continued Jordan. “The state told the North Country what to do in certain ways ten and more years ago, ostensibly to help us, and now it’s decided to hurt us through the Northern Pass Project, which does not help Northern New Hampshire. It doesn’t even help southern New Hampshire – it only helps southern New England. The problem isn’t up here; it’s in New Haven, Connecticut, where they want to have ten lightbulbs instead of five. We shouldn’t be punished for the irresponsibility and excesses of people two states away.”
According to Mike Skelton, spokesman for Public Service of New Hampshire (PSNH) and Northern Pass, LLC, the state would benefit far more than Jordan and Katie believe. “The primary driver behind the Northern Pass Project is to deliver low-cost, environmentally-friendly energy into New Hampshire and the New England power system, thereby meeting the expectations of policy makers that we move toward a cleaner, more renewable energy future. The 1,200 megawatts this project would provide is equal to the power needed to power one million residential homes.”
Skelton continued, saying “The project will utilize 180 miles in total of power line rights of way in New Hampshire, 140 miles of which already exist today.Northern Pass is seeking to establish a new right of way north of Groveton New Hampshire to the Canadian border for the remaining 40 miles. The project ends in Deerfield, New Hampshire where it connects to the regional power grid.. By injecting 1,200 megawatts of new low cost power to the regional market, New Hampshire will save $20 million to $35 million annually in energy costs. New Hampshire is a net energy exporter, but that does not mean New Hampshire is “energy independent” or does not need projects like Northern Pass.Energy currently produced by privately owned power generators and sold out of state does not benefit New Hampshire customers, yet is cited as a reason as why we don’t need the power from Northern Pass. What opponents of Northern Pass are missing is that New Hampshire is part of a regional power grid, and all customers will benefit from bringing 1200 megawatts of low cost power to the regional market.”
According to Skelton, the concern of eminent domain is a non-issue the transmission line. “NPP never depended on the use of eminent domain nor did we seek to use it. To be frank, concerns over eminent domain have only been brought forth as an issue by opponents of NPP, not the project. The new law adopted by the legislature regarding eminent domain has had no effect on our plans to move the project forward. The law clearly prohibits the use of eminent domain for projects like Northern Pass. However, eminent domain has never been part of our plans and we are focused on working with landowners.”
“Concerns about jobs cited by project opponents are misplaced,” continued Skelton. “NPP has provided economic impact studies and engaged an economist to demonstrate that the project will create 1,200 jobs annually during the three year during construction period. The project will create 200 additional jobs per year once the line is in service through decreased energy costs. Project opponents have not put forward anything to substantially refute the positive economic benefits of this project. Beyond the economic impact studies that Northern Pass has provided, its useful to consider what the impact of a similar power line in New Hampshire has been. This power line larger, both in size and the amount of energy delivered, and goes through Bedford and Hopkington, which are two of the more desirable towns in New Hampshire. A property appraisal expert were hired to look at this issue found the existing line did not have an impact on property values.”
Regarding Katie’s assertion that manipulation was taking place, Skelton said Northern Pass has worked openly and honestly with local landowners. “We have worked with land owners who are willing to work with us for a number of months. Our team is transparent with all property owners as a matter of practice. I would disagree with Katie’s perspective completely. . It seems hypocritical that those who were most supportive of taking eminent domain off the table are now criticizing those who sell property to Northern Pass. We are not forcing any landowner to sell to us, it’s simply a matter if our interests and the landowners interests are in alightment and we are able to reach an agreement .. Sometimes that happens, sometimes it doesn’t. That’s how market works, and how this process works.”
I’ve spoken to a number of New Hampshire friends and acquaintances over the last 18 months about this, from libertarians to conservatives to moderates to liberals, and the closest thing to supporting the NPP I have found was one friend who didn’t know enough to really have an opinion. According to these people, admittedly largely based in the North Country, opposition is strong. However, a February 2012 UNH poll shows support is actually slightly larger than opposition, and Skelton noted there is support for the project outside of the North Country.
Of course, the battle is not over, though the grassroots opposition seems to be pressuring many public figures regarding their positions. GOP gubernatorial candidate Ovide Lamontagne, who works for a law firm representing NPP, had to significantly clarify his stance in April, and Newt Gingrich was hammered for taking a middling position on NPP when he campaigned in the state last year. We’ll have to see if the energy of the grassroots can match the funding and organization of NPP.