Eminent Domain

Eminent domain is the power of the government or its designees to acquire privately owned land for public use, subject to the protections against unlawful “takings” as provided by the Fifth Amendment of the U.S. Constitution, and similar provisions of state constitutions.

Utilities, railroads and highway transportation entities are commonly granted the right to acquire property through eminent domain. When a property is taken through the process of eminent domain, the owner of the condemned property is entitled to receive just compensation in the amount of the fair market value for the land. In some cases, additional money may be awarded to the landowner if they are running a business or other operation at the site that adds to the value of the property.

An important step in preventing abuse of eminent domain authority is to have a clear definition of “public use”. Establishing parameters that a project must fulfill to be considered in this category will help to weed out frivolous proposals.

In 2005, the case of Kelo v. The City of New London brought this issue to the forefront. The U.S. Supreme Court decision in this Connecticut case allowed the city to take one owner’s private property and transfer it to another private owner for the purpose of economic development. Private-property advocates argue that such action was not the intent of eminent domain laws, because the property condemned was not used for a public purpose.

Utility industry practices

Eminent domain is a necessary tool for utility companies to complete projects that require the specific use of certain property for the public good. The issue of eminent domain typically arises in connection with proposals to construct new power lines or generating plants.

Carbon capture is another area which will require utilities to acquire specific property for the transportation and storage of carbon dioxide. Several states have begun investigations into extending eminent domain rights to possible sequestration sites.