Okla. Gas v. Beecher

Decision Date12 January 2011
Docket Number107.649,107.647,107.650,Division No. 4., Released for Publication by Order of the Court of Civil Appeals of Oklahoma,107.648, Nos. 107.839,107.651
Citation2011 OK CIV APP 1,256 P.3d 1008
PartiesOKLAHOMA GAS AND ELECTRIC COMPANY, an Oklahoma corporation, Plaintiff/Appellee,v.Gerald A. BEECHER and Lucy Beecher, husband and wife, Defendants/Appellants,andBoard of County Commissioners of Kingfisher County, a body corporate and politic; and Karen Mueggenborg, Kingfisher County Treasurer, Defendants.
CourtUnited States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

OPINION TEXT STARTS HERE

Appeal from the District Court Of Kingfisher County, Oklahoma; Honorable Tom L, Newby, Trial Judge.AFFIRMED.Dennis R. Box, Paul Lefebvre, Audrey D. Blank, Michael D. O'Neal, David M. Box, Williams, Box, Forshee and Bullard, P.C., Oklahoma City, OK, for Plaintiff/Appellee.Henry A. Meyer, III, Meyer & Leonard, PLLC, Oklahoma City, OK, and Robert G. Gum, Gum, Puckett & MacKechnie, L.L.P., Oklahoma City, OK, and Micheal L. Darrah, E. Edd Prichett, Jr., Durbin, Larimore & Bialick, Oklahoma City, OK, for Defendants/Appellants.DOUG GABBARD II, Presiding Judge.

¶ 1 This is one of six eminent domain appeals in which Plaintiff, Oklahoma Gas and Electric Company (OG & E), seeks to condemn easements for construction of electrical transmission lines to wind farms in northwestern Oklahoma. The appeals were made companion cases by the Supreme Court, and we simultaneously issue a decision in each appeal. In the present case, Defendants, Gerald A. Beecher and Lucy Beecher (Landowners), appeal the trial court's denial of Landowners' exception to the Report of Commissioners. We affirm.

BACKGROUND

¶ 2 OG & E is an Oklahoma public utility that generates, transmits, and furnishes electric power to approximately 750,000 customers in Oklahoma and Arkansas. In 2007, OG & E began work on the “Transmission Line Project,” a $218 million plan to transmit large amounts of wind-generated electricity through high capacity transmission lines (the Project). The Project is designed to consist of a 200–foot wide right-of-way running 121 miles across six Oklahoma counties, from Woodward to Oklahoma City. On this right-of-way, a series of 200–foot tall steel poles will be placed to support the transmission lines. The right-of-way will also have enough space for a second set of poles and lines, if needed.

¶ 3 The Oklahoma Corporation Commission (OCC) approved the Project as being “in the public interest,” and authorized OG & E to pass along the Project's costs to its customers. The Southwest Power Pool (SPP) also approved the Project. SPP is one of several Regional Transmission Organizations throughout the U.S. It is regulated by the Federal Energy Regulatory Commission (FERC) and was created to coordinate and ensure the reliability of electricity transmission across a multistate area (also known as “the transmission grid”) pursuant to a regional tariff. East Texas Elec. Coop., Inc. v. Fed. Energy Reg. Comm'n, 331 F.3d 131 (D.C.Cir.2003). By contract with its members, SPP approves construction of new transmission lines, determines which entities may connect to those lines, decides whether to defer service to members until necessary line improvements are made, collects FERC tariffs on wholesale electricity transactions, and reimburses the appropriate owner of the transmission line utilized in the transaction. OG & E is a member of SPP.

¶ 4 OG & E began acquiring the necessary right of way, which included a portion of Landowners' property. On February 19, 2009, after negotiations with Landowners failed, OG & E filed a condemnation action seeking a permanent easement over Landowners' property. The court-appointed Commissioners determined that Landowners' damage was $31,420. Landowners filed both a demand for jury trial and an exception to the Commissioners' Report, asserting the taking was for an unauthorized private use, and not a public use.

¶ 5 At the hearing on Landowners' exception, OG & E introduced its Resolution of Necessity.1 It also introduced evidence that the Project arose as a result of growing demand by Oklahoma consumers, OCC's refusal to allow OG & E to pass along the cost of a new coal-fired generating plant to consumers, and the likely passage of federal laws mandating the use of renewable energy sources such as wind power.2 An OG & E official testified that while its customers would probably need an additional 640 megawatts of electricity capacity through 2020, each of the two proposed lines would hold 1,800 megawatts of electricity and the extra capacity had been included because SPP determined it was needed. He also testified that several wind-generated electricity producers had already requested access to the lines. Finally, although OG & E had proposed construction of the Project, had determined the route, and would own the line, it admitted that the use of the line would be controlled by SPP. In this regard, OG & E Vice–President Paul Renfrow testified in his deposition:

A.... We build it. OG & E's interest in it is building it and to bring power to OG & E's customers. That's our role in this. But once you build it, again, we even have to pay to use that line once it's built. It's governed by the Southwest Power Pool. And so other independent power producers, if they decide they want to sell to OG & E's customers or some other utility, they have to get the power up there some way. And they would use these power lines, and then they would do it through the SPP.

...

Q. All right. Who controls whether electricity can be shipped on the proposed transmission line?

A. Southwest Power Pool.

Q. Is it possible for Southwest Power Pool to deny OG & E transmission rights along that power line?

A. Yes.

¶ 6 After considering the matter, the court found that OG & E's proposed easement was for a public purpose, but stated that Landowners had presented “compelling evidence” that the taking also included a private purpose. The trial court denied Landowners' exception, and they now appeal. 3

STANDARD OF REVIEW

¶ 7 OG & E's statutory right to condemn property is found at 27 O.S.2001 § 7, which grants corporations that furnish light, heat, or power, by electricity or gas, the same power of eminent domain as is granted to railroads. Pub. Serv. Co. v. Willis, 2007 OK CIV APP 18, ¶¶ 10–11, 155 P.3d 845, 848 (approved for publication by the Oklahoma Supreme Court). Railroads are authorized to exercise the power of eminent domain by 66 O.S.2001 §§ 51 through 66. However, that procedure is subject to Sections 23 and 24 of Article II of the Oklahoma Constitution, providing that private property may only be taken by condemnation for a public use.4 Section 24 provides that the question of whether a taking is for a public use is a judicial question.

¶ 8 When a condemning entity adopts a Resolution of Necessity declaring the necessity for condemning land for a public purpose, as OG & E did in this instance, the Resolution establishes “a prima facie case of necessity, and the burden then shift[s] to the defendant to show that such taking was not for a public use.” Delfeld v. City of Tulsa, 1942 OK 402, ¶ 39, 131 P.2d 754, 761; see also Okla. City v. Shadid, 1966 OK 189, ¶ 3, 439 P.2d 190, 191. On appeal, we review factual issues by the any-competent-evidence standard. However, we review contested issues of law de novo. Salve Regina College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991). Under the de novo standard, no deference is given to the trial court's legal ruling. Neil Acquisition L.L.C. v. Wingrod Investment Corp., 1996 OK 125, n. 1, 932 P.2d 1100, 1103.5

ANALYSIS

¶ 9 The facts of this case are straightforward. OG & E seeks to condemn a portion of Landowners' property to construct part of a large-scale electric transmission project. The Project will serve OG & E's Oklahoma customers by providing them with electricity, both now and in the future. However, the Project may also serve consumers in other states who buy their electricity from private power companies having access to the lines. Moreover, the lines will be controlled, in part, by SPP. The issue is whether the proposed Project has a public purpose.

¶ 10 Since the early days of statehood, the Supreme Court has recognized that generating, storing, and transmitting electricity to those who need it is a public use for which the power of eminent domain may properly be granted to and exercised by electric utility companies. Tuttle v. Jefferson Power & Improvement Co., 1912 OK 232, 122 P. 1102. Generally, OG & E has condemnation authority for that purpose.

¶ 11 Landowners assert in the instant case that OG & E's condemnation does not have a public purpose for two reasons. First, they argue that most of the Project's electric transmission capacity will be used by customers outside of Oklahoma who are not Oklahoma citizens. Second, Landowners contend that SPP will have actual control of the line.

¶ 12 On the first issue, Landowners assert that OG & E's customers are not the primary beneficiaries of the taking because only about 22 percent of the Project's capacity will be needed to meet customer demands through 2020. Landowners then conclude that 78 percent of the Project's capacity will be used to transmit electricity to out-of-state customers, and, therefore, the condemnation fails the “primary beneficiary” test set forth in Board of County Commissioners v. Lowery, 2006 OK 31, 136 P.3d 639.

¶ 13 In Lowery, Muskogee County attempted to condemn an easement across private property for water lines that would serve Energetix, a privately owned electricity generation plant. Although it lacked specific statutory authority to condemn the property for that purpose, the county argued that the general economic benefits of the project to the community qualified as a public purpose. The trial court agreed and confirmed the takings, but the Oklahoma Supreme Court reversed. In doing so, the Court noted...

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