The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN MIKE COX, ATTORNEY GENERAL ELECTRIC TRANSMISSION LINE CERTIFICATION ACT: CONDEMNATION: Requirement to obtain certificate of public
convenience and necessity before commencing condemnation under Electric
Transmission Line Certification Act An electric utility company wishing to construct a transmission
line must obtain a certificate of public convenience and necessity from the
Michigan Public Service Commission before instituting condemnation proceedings,
if, under the particular circumstances, a certificate is required by 1929 PA 69,
MCL 460.501 et seq, or the Electric Transmission Line Certification Act,
1995 PA 30, MCL 460.561 et seq. Thus, a company must obtain a certificate
from the Commission before commencing condemnation proceedings if: 1) An electric utility has 50,000 or more residential
customers in this State or is an affiliated transmission company or an
independent transmission company, and the line is a "major transmission
line"; 2) An electric utility company of any size, an affiliated
transmission company, or an independent transmission company voluntarily
applies for a certificate for a non-major transmission line; or 3) The construction of the transmission line falls within
section 2 of 1929 PA 69, MCL 460.502. Section 5 of 1923 PA 238, MCL 486.255, requires an independent
transmission company or an affiliated transmission company to exercise its power
of condemnation in accordance with applicable provisions of the Electric
Transmission Line Certification Act, 1995 PA 30, MCL 460.561 et seq, and
the Uniform Condemnation Procedures Act, 1980 PA 87, MCL 213.51 et seq.
To the extent a company is required by the Electric Transmission Line
Certification Act to obtain a certificate of public convenience and necessity
before commencing condemnation proceedings, section 3(2) of 1923 PA 238, MCL
486.253(2), requires it to do so. A company may seek a limited license to conduct preconstruction
activity on property in accordance with the terms of section 11 of the Electric
Transmission Line Certification Act, MCL 460.571, and section 4 of the Uniform
Condemnation Procedures Act, MCL 213.54, even though it has not yet applied to
the Michigan Public Service Commission for a certificate of public convenience
and necessity under the Electric Transmission Line Certification Act. Opinion No. 7216 June 30, 2008 Honorable Bruce Caswell You have asked several questions regarding the issuance of a
certificate of public convenience and necessity (certificate) by the Michigan
Public Service Commission (Commission). You first ask whether an electric utility company wishing to
construct a transmission line is required to obtain a certificate under the
Electric Transmission Line Certification Act (Certification Act), 1995 PA 30,
MCL 460.561 et seq, in order to condemn property.
State Representative
The Capitol
Lansing, Michigan
The power to condemn private property has been conferred on electric utility companies, among others, by 1923 PA 238 (Act 238), MCL 486.251 et seq. Section 4 of Act 238, MCL 486.254, provides that the power of condemnation may be exercised in accordance with Act 238 by corporations organized and duly authorized to carry on the electric business as a public utility:
Corporations heretofore lawfully organized, among other things, for any of the purposes specified in section 1 hereof; corporations heretofore lawfully organized, or that may hereafter be lawfully organized and duly authorized to carry on the electric or gas business as a public utility in the state of Michigan; and foreign corporations heretofore lawfully organized or that may hereafter be lawfully organized, among other things, for any of the purposes specified in section 1 hereof, and duly authorized to carry on business in the state of Michigan shall have and are hereby given the right to condemn private property in accordance with the provisions of this act and subject to the same conditions and requirements as herein specified. [Emphasis added.]
Section 3(2) of Act 238, MCL 486.253(2), addresses the requirement to obtain a certificate before condemnation proceedings are commenced:
If 1929 PA 9, MCL 483.101 to 483.120, 1929 PA 69, MCL 460.501 to 460.506, or the electric transmission line certification act, 1995 PA 30, MCL 460.561 to 460.575, requires a certificate of necessity to be obtained from the Michigan public service commission, then the corporation shall, before commencing any condemnation proceedings, first make application to, and obtain from the commission a certificate as required under those acts. [Emphasis and underscoring added.]
Thus, if one of these three public acts requires that a certificate be obtained from the Commission, the company must obtain that certificate before it may commence condemnation proceedings. Each of these public acts must therefore be examined to respond to your question.
1929 PA 9, MCL 483.101 et seq, applies to the transportation of natural gas and not to the transmission of electricity and, accordingly, is not relevant to your question.
1929 PA 69, MCL 460.501 et seq, requires a utility to obtain a certificate before it undertakes certain business in areas already served by a utility:
No public utility shall hereafter begin the construction or operation of any public utility plant or system thereof nor shall it render any service for the purpose of transacting or carrying on a local business either directly, or indirectly, by serving any other utility or agency so engaged in such local business, in any municipality in this state where any other utility or agency is then engaged in such local business and rendering the same sort of service, or where such municipality is receiving service of the same sort, until such public utility shall first obtain from the commission a certificate that public convenience and necessity requires or will require such construction, operation, service, or extension. [MCL 460.502; emphasis added.]
If this provision applies to a proposed transmission line, then section 3(2) of Act 238, MCL 486.253(2), requires that the certificate be obtained before condemnation proceedings may be commenced.
The Certification Act has several provisions requiring utilities to obtain a certificate from the Commission in connection with the proposed construction of transmission lines.
Section 2(g) and (k) of the Certification Act, MCL 460.562(g) and (k), define both a "major transmission line" and a "transmission line," as follows:
As used in this act:
* * *
(g) "Major transmission line" means a transmission line of 5 miles or more in length wholly or partially owned by an electric utility, affiliated transmission company, or independent transmission company through which electricity is transferred at system bulk supply voltage of 345 kilovolts or more.
* * *
(k) "Transmission line" means all structures, equipment, and real property necessary to transfer electricity at system bulk supply voltage of 100 kilovolts or more.
If the transmission line to be constructed is a "major transmission line," plans to construct it must be submitted in accordance with the requirements of section 4(1) of the Certification Act, MCL 460.564(1):
If an electric utility that has 50,000 or more residential customers in this state, affiliated transmission company, or an independent transmission company plans to construct a major transmission line in this state in the 5 years after planning commences, the electric utility, affiliated transmission company, or independent transmission company shall submit a construction plan to the commission. An electric utility with fewer than 50,000 residential customers in this state may submit a plan under this section.
Thus, if a major transmission line is to be constructed by an electric utility with 50,000 or more residential customers in this State, an affiliated transmission company, or an independent transmission company, the company "shall submit a construction plan to the commission." Use of the word "shall" makes submission of the plan mandatory.
3Section 4(1) of the Certification Act also permits a smaller electric utility company to voluntarily submit such a plan for a major transmission line
4 to the Commission: "An electric utility with fewer than 50,000 residential customers in this state may submit a plan under this section." MCL 460.564(1).If a plan has been submitted for a major transmission line under section 4 � whether to comply with a mandate or voluntarily � section 5 of the Certification Act, MCL 460.565, prohibits the company from beginning construction until the Commission issues a certificate
5:An electric utility, affiliated transmission company or independent transmission company shall not begin construction of a major transmission line for which a plan has been submitted under section 4 until the commission issues a certificate for that transmission line. Except as otherwise provided in section 9, a certificate of public convenience and necessity under this act is not required for constructing a new transmission line other than a major transmission line or for reconstructing, repairing, replacing, or improving an existing transmission line, including the addition of circuits to an existing transmission line. [Emphasis added.]
In part reiterating that requirement, section 7(1) of the Certification Act, MCL 460.567(1), requires application to the Commission for a certificate for a proposed major transmission line as follows:
An electric utility that has 50,000 or more residential customers in this state, an affiliated transmission company, or an independent transmission company shall apply to the commission for a certificate for a proposed major transmission line. An applicant may withdraw an application at any time. [Emphasis added.]
Accordingly, if a plan has been submitted for a major transmission line under section 4 of the Certification Act and an application for a certificate has been filed under section 7(1) of the Certification Act, then a company is required to obtain a certificate for a proposed major transmission line and section 3(2) of Act 238, MCL 486.253(2), prohibits the company from instituting condemnation proceedings until the Commission issues a certificate.
6If a transmission line is not a major transmission line, section 9(1) of the Certification Act, MCL 460.569(1), allows an electric utility company to voluntarily file an application with the Commission for a certificate for that line:
An electric utility, affiliated transmission company, or independent transmission company may file an application with the commission for a certificate for a proposed transmission line other than a major transmission line. If an electric utility, affiliated transmission company, or independent transmission company applies for a certificate under this section, the electric utility, affiliated transmission company, or independent transmission company shall not begin construction of the proposed transmission line until the commission issues a certificate for that transmission line. [Emphasis added.]
As this provision indicates, if an electric utility company chooses to seek a certificate for a non-major transmission line, it "shall not" begin construction until the commission issues the certificate. Thus, once it voluntarily applies for a certificate, it is then "required" to secure it. As provided in section 3(2) of Act 238, MCL 486.253(2), that company shall obtain a certificate from the Commission "before commencing any condemnation proceedings."
It must be noted that there are good reasons for an electric utility company to voluntarily seek a certificate from the Commission. For example, section 10(2) of the Certification Act, MCL 460.570(2), bars the imposition of restrictive zoning ordinances or limitations after the application has been filed:
A zoning ordinance or limitation imposed after an electric utility, affiliated transmission company, or independent transmission company files for a certificate shall not limit or impair the transmission line's construction, operation, or maintenance.
Section 10(1) of the Certification Act, MCL 460.570(1), provides that, once issued, the certificate takes precedence over a conflicting local prohibition or regulation:
If the commission grants a certificate under this act, that certificate shall take precedence over a conflicting local ordinance, law, rule, regulation, policy, or practice that prohibits or regulates the location or construction of a transmission line for which the commission has issued a certificate.
Finally, section 10(3) of the Certification Act, MCL 460.570(3), provides that, in a condemnation proceeding, the certificate is "conclusive and binding as to the public convenience and necessity" and the compatibility of the transmission line "with the public health and safety or any zoning or land use requirements":
7In an eminent domain or other related proceeding arising out of or related to a transmission line for which a certificate is issued, a certificate issued under this act is conclusive and binding as to the public convenience and necessity for that transmission line and its compatibility with the public health and safety or any zoning or land use requirements in effect when the application was filed.
It is my opinion, therefore, in answer to your first question, that an electric utility company wishing to construct a transmission line must obtain a certificate of public convenience and necessity from the Michigan Public Service Commission before instituting condemnation proceedings, if, under the particular circumstances, a certificate is required by 1929 PA 69, MCL 460.501 et seq, or the Electric Transmission Line Certification Act, 1995 PA 30, MCL 460.561 et seq. Thus, a company must obtain a certificate from the Commission before commencing condemnation proceedings if:
1) An electric utility has 50,000 or more residential customers in this State or is an affiliated transmission company or an independent transmission company, and the line is a "major transmission line";
2) An electric utility company of any size, an affiliated transmission company, or an independent transmission company voluntarily applies for a certificate for a non-major transmission line; or
3) The construction of the transmission line falls within section 2 of 1929 PA 69, MCL 460.502.
You next ask whether section 5 of Act 238, MCL 486.255, requires a company to follow the provisions of the Certification Act regarding certification before initiating condemnation proceedings.
Section 5 of Act 238 authorizes an independent transmission company or an affiliated transmission company to condemn property, but it makes the exercise of that power subject to the Certification Act and the Uniform Condemnation Procedures Act (UCPA), 1980 PA 87, MCL 213.51 et seq.
8 Section 5 provides:(1) Subject to the electric transmission line certification act, 1995 PA 30, MCL 460.561 to 460.575, and the uniform condemnation procedures act, 1980 PA 87, MCL 213.51 to 213.75, an independent transmission company or an affiliated transmission company shall have the power to condemn property that is necessary to transmit electric energy for public use except for both of the following:
(a) An independent transmission company or affiliated transmission company shall not circumvent a private agreement that existed on [July 12, 2004] under which the independent transmission company or affiliated transmission company leases rights-of-way for its electric transmission facilities from the utility.
(b) An independent transmission company or affiliated transmission company shall not condemn property owned by an electric or gas utility or municipally owned utility in a manner which unreasonably disrupts the ability of the electric or gas utility or municipally owned utility to continue to provide service to its customers. If a dispute exists under this subdivision, the condemnation shall not proceed until the Michigan public service commission determines that no unreasonable disruption is involved. [MCL 486.255(1)(a) and (b).]
By granting the power of condemnation "subject to" the two named public acts, the Legislature has required that the company comply with any applicable terms of those two acts in its exercise of the condemnation power.
9 To the extent that the certification requirements of the Certification Act apply to a given undertaking, the company is required to comply with those requirements to exercise the power of condemnation. Section 5 of Act 238 does not purport to impose additional certification requirements beyond those imposed by the Certification Act.10As section 5 of Act 238 provides, the company's exercise of the condemnation power is also subject to the UCPA. That is a detailed and complex law that must be reviewed and applied to the particular circumstances of any given condemnation proceeding. A few general observations will illustrate some of the rights that a property owner has under the UCPA.
Before a company can even begin negotiations to acquire property under the UCPA, it must first establish the amount it believes to be just compensation and give the owner a written good faith offer to purchase the property for that full amount. If the company had an appraisal prepared, the owner and its attorney have a right to review it. If no appraisal was prepared, the company must provide a written statement and summary showing the basis for the amount established as just compensation and allow the owner and attorney to review it. MCL 213.55. To help in the negotiations and serve as an expert witness in a condemnation trial, the property owner may hire its own appraiser to value the property and demand that the company pay the appraiser's fees, as part of any agreed settlement, or reimburse the reasonable fees charged by the appraiser, at the conclusion of a condemnation lawsuit. MCL 213.66. If the owner might be required to move because of the taking of its property, the company must provide a written explanation of the owner's legal rights, including its entitlement to being paid a moving allowance. MCL 213.55. Only after negotiations between the company and owner have proved unsuccessful may the company file a lawsuit to condemn the property. MCL 213.55.
The condemnation lawsuit must be filed in a county where the property is located. MCL 213.55. With certain exceptions, the court will order that the owner be paid the estimated just compensation before the owner must surrender possession of the property. MCL 213.58 and MCL 213.59. If the lawsuit is not dismissed upon a legal challenge made by the property owner, the case will progress to a trial. MCL 213.56. The owner may demand that the amount of its just compensation be determined by a jury after it hears the appraisal testimony of the company and of the owner. MCL 213.62. Once an award of just compensation is made, the court may divide it among the parties who have an interest in the property. MCL 213.63. The owner is entitled to receive interest for the part of the award that exceeds the amount of estimated just compensation previously paid by the company. MCL 213.65. The company will also be required to reimburse the owner's reasonable attorney fees, up to one-third of the difference between the ultimate award (including interest) and the amount of the written good faith offer. MCL 213.66.
It is my opinion, therefore, in answer to your question, that section 5 of 1923 PA 238, MCL 486.255, requires an independent transmission company or an affiliated transmission company to exercise its power of condemnation in accordance with applicable provisions of the Electric Transmission Line Certification Act, 1995 PA 30, MCL 460.561 et seq, and the Uniform Condemnation Procedures Act, 1980 PA 87, MCL 213.51 et seq. To the extent a company is required by the Electric Transmission Line Certification Act to obtain a certificate of public convenience and necessity before commencing condemnation proceedings, section 3(2) of 1923 PA 238, MCL 486.253(2), requires it to do so.
Your final question asks whether a company that has not applied for or obtained a certificate under the Certification Act may seek and obtain a limited license for preconstruction activities as described in section 11 of the Certification Act, MCL 460.571.
Before addressing your specific question, it would be useful to explain the nature and purpose of a limited license that an electric utility company might seek under section 11 of the Certification Act, as well as to explain the rights of the property owner.
Section 11 allows an electric utility, affiliated transmission company, or independent transmission company to seek a limited license to enter upon private property "to conduct preconstruction activity," defined as:
"Preconstruction activity" means any activity on a proposed route conducted before construction of a transmission line begins. Preconstruction activity includes surveys, measurements, examinations, soundings, borings, sample-taking, or other testing procedures, photography, appraisal, or tests of soil, groundwater, structures, or other materials in or on the real property for contamination. Preconstruction activity does not include an action that permanently or irreparably alters the real property on or across the proposed route. [MCL 460.562(i).]
The company may seek that license under section 4 of the UCPA, MCL 213.54(3), which provides in part regarding its purpose:
An agency[11] or an agent or employee of an agency may 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 pursuant to section 106 of title I of the national historic preservation act, Public Law 89-665, 16 U.S.C. 470f; or determining whether the property is suitable to take for public purposes.
Section 11 of the Certification Act, MCL 460.571, imposes restrictions on limited licenses to protect the interests of the property owner and provides that the court may grant the license "upon such terms as justice and equity require":
The limited license may be granted upon such terms as justice and equity require. An electric utility, affiliated transmission company, or independent transmission company that obtains a limited license shall provide each affected land owner with a copy of the limited license. A limited license shall include a description of the purpose of entry, the scope of activities permitted, and the terms and conditions of entry with respect to the time, place, and manner of entry. [MCL 460.571.]
Section 4(4) of the UCPA contains similar requirements and mandates that the entry onto the property be done "in a manner that minimizes any damage to the property and any hardship, burden, or damage" to the person possessing the property:
The court may grant a limited license for entry upon such terms as justice and equity require, including the following:
(a) A description of the purpose of the entry.
(b) The scope of activities that are permitted.
(c) The terms and conditions of the entry with respect to the time, place, and manner of the entry.
(5) An entry made under subsection (3) or (4) shall be made in a manner that minimizes any damage to the property and any hardship, burden, or damage to a person in lawful possession of the property. [MCL 213.54.]
Section 4(3) of the UCPA ensures that, if damages are done to the property, the company that gets the limited license will pay them; it also gives additional rights to the owner:
The entry may be made upon reasonable notice to the owner and at reasonable hours. An entry made pursuant to this subsection shall not be construed as a taking. The owner or his or her representative shall be given a reasonable opportunity to accompany the [company's] agent or employee during the entry upon the property. The [company] shall make restitution for actual damage resulting from the entry. [MCL 213.54.]
To specifically address your final question � whether a company that has not applied for or obtained a certificate under the Certification Act may receive a limited license for preconstruction activities as described in section 11 of the Certification Act, MCL 460.571 � it is necessary to review the relevant text of that section:
In a civil action in the circuit court under section 4 of the uniform condemnation procedures act, 1980 PA 87, MCL 213.54, the court may grant a limited license to an electric utility, affiliated transmission company, or independent transmission company for entry on land to conduct preconstruction activity related to a proposed major transmission line or a transmission line if the electric utility, affiliated transmission company, or independent transmission company has scheduled or held a public meeting in connection with a certificate sought under section 7 or 9 and if written notice of the intent to enter the land has been given to each affected landowner on whose property the electric utility, affiliated transmission company, or independent transmission company wishes to enter. [MCL 460.571; emphasis added.]
This provision allows a circuit court to grant a limited license for entry on land to conduct preconstruction activity related to a proposed major transmission line or a transmission line if two conditions are met. First, the electric utility, affiliated transmission company, or independent transmission company must have scheduled or held a public meeting. Second, the company must have given written notice of intent to enter the land to each affected landowner on whose property the company wishes to enter.
A clarification is needed because of the apparent inconsistency between the requirement in section 11 that the public meeting be scheduled or held "in connection with a certificate sought under section 7 or 9" and the requirement in the Certification Act that the public meeting be scheduled or held before application is made for a certificate. Specifically, section 6(1) of the Certification Act requires an electric utility, affiliated transmission company, or independent transmission company, before applying for a certificate, to schedule and hold a public meeting in each municipality through which the proposed line would pass:
Before applying for a certificate under section 5, an electric utility, affiliated transmission company, or independent transmission company shall schedule and hold a public meeting in each municipality through which a proposed major transmission line for which a plan has been submitted under section 4 would pass. A public meeting held in a township satisfies the requirement that a public meeting be held in each affected village located within the township. [MCL 460.566(1); emphasis added.]
Additionally, section 11(b) of the Certification Act, MCL 460.571(b), provides that a court shall not deny a limited license because the company has not yet applied for a certificate:
The court shall not deny a limited license for entry to conduct preconstruction activity[12] for any of the following reasons:
* * *
(b) The electric utility, affiliated transmission company, or independent transmission company has not yet applied for a certificate.
Section 7(2) of the Certification Act, MCL 460.567(2), sets forth the required content of an application for a certificate, providing in part:
An application for a certificate shall contain all of the following:
* * *
(b) A detailed description of the proposed major transmission line, its route, and its expected configuration and use.
(c) A description and evaluation of 1 or more alternate major transmission line routes and a statement of why the proposed route was selected.
* * *
(e) The estimated overall cost of the proposed major transmission line.
The purposes for seeking a limited license under section 4(3) of the UCPA to enter upon land include the gathering of information needed to appraise the property to determine its likely cost and to generally determine whether the property is suitable:
An agency or an agent or employee of an agency may 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 pursuant to section 106 of title I of the national historic preservation act, Public Law 89-665, 16 U.S.C. 470f; or determining whether the property is suitable to take for public purposes. [MCL 213.54(3).]
Such an evaluation would be needed to decide upon the best route for the proposed transmission line and the likely cost of acquiring the property interests needed for it. This is information needed before an application for a certificate can be completed in accordance with section 7(2) of the Certification Act, MCL 460.567(2).
In determining the meaning of the word "sought" in MCL 460.571 found in the phrase "if the electric utility, affiliated transmission company, or independent transmission company has scheduled or held a public meeting in connection with a certificate sought under section 7 or 9," the appropriate principles of statutory construction must be applied.
Since the word "sought" is not defined in the Certification Act, it is appropriate to use a dictionary definition. In doing so, the definition should be selected that is contextually related to the language that surrounds the word to be defined. G C Timmis & Co v Guardian Alarm Co, 468 Mich 416, 430, n 12; 662 NW2d 710 (2003). The word "sought" is generally defined as the past tense and past participle of the word "seek." Given that section 6(1) of the Certification Act expressly requires that the company schedule and hold a public meeting before applying for a certificate, the definition of "seek" that best fits these circumstances is "to try to acquire."
13 That is, the company will have begun the process of trying to acquire a certificate, and the scheduling and holding of a public meeting is a part of that undertaking, even though the company may not have actually applied for the certificate when it seeks a limited license under section 11 of the Certification Act. It would frustrate the intent of the Legislature by contradicting the plain and unambiguous language of sections 6(1) and 11(b) of the Certification Act to construe the word "sought" in section 11 of the Certification Act to mean that the company must have already applied for the certificate.It is an established principle of statutory construction that a court will examine all the relevant provisions of the statutes with the goal of producing a consistent and harmonious result. Eyde Bros Development Co v Eaton County Drain Comm'r, 427 Mich 271, 293; 398 NW2d 297 (1986). As explained in Tyler v Livonia Pub Schools, 459 Mich 382, 390-391; 590 NW2d 560 (1999):
Contextual understanding of statutes is generally grounded in the doctrine of noscitur a sociis: "it is known from its associates," see Black's Law Dictionary (6th ed), p 1060. This doctrine stands for the principle [of interpretation] that a word or phrase is given meaning by its context or setting.
Under the doctrine of noscitur a sociis, a phrase must be read in context and in light of the phrases around it, not in a vacuum. Simply stated, its context gives it meaning. Apsey v Memorial Hosp, 477 Mich 120, 130; 730 NW2d 695 (2007). These rules recognize that "[a]lthough a phrase or a statement may mean one thing when read in isolation, it may mean something substantially different when read in context." G C Timmis & Co v Guardian Alarm Co, 468 Mich at 421.
It is my opinion, therefore, in answer to your final question, that a company may seek a limited license to conduct preconstruction activity on property in accordance with the terms of section 11 of the Electric Transmission Line Certification Act, MCL 460.571, and section 4 of the Uniform Condemnation Procedures Act, MCL 213.54, even though it has not yet applied to the Michigan Public Service Commission for a certificate of public convenience and necessity under the Electric Transmission Line Certification Act.
MIKE COX
Attorney General
If a private agency is required by law to secure a certificate of public necessity from the public service commission or other public agency before it may acquire property, the private agency shall not institute judicial proceedings to acquire the property until it has secured the required certificate.
Subsections (h) and (j) of section 1 of the UCPA, MCL 213.51(h) and (j), define both "private agency" and "public agency." To the extent that an electric utility company has the power to condemn property but is not part of a governmental unit or subdivision, it is a "private agency."