Western Area Power Administration Land Acquisition Discussion May 11, 2016

Steve Webber, Lands Team Lead Presented by: Carey Ashton, Realty Specialist Western Area Power Administration

Purpose: Provide a general understanding of Western’s Land Acquisition policies and procedures

Agenda Introduction and Review Agenda Western Background Western Land Rights Western Acquisition Process Condemnation Experience Joint Projects Estimating Costs Other Topics and Questions

What is Western? Power Marketing Administration, under DOE Wholesale electricity supplier 457 long-term/firm power preference customers when agency formed in customers today

Statutory Authority Reclamation Project Act of 1902 Sec. 7, Right to Acquire Property “…by purchase or by condemnation under judicial process…..” Reclamation Project Act of 1939 Allows us to lease, license and grant rights to others (outgrant) Flood Control Act of 1944 Authority to transmit and dispose of power and construct or purchase necessary transmission Department of Energy Organization Act of 1977 Transferred functions/authority from Interior to Energy & gave authority to enter into agreements to further those purposes Energy Policy Act of 2005 (§ 1222) 3rd party funding to assist them American Recovery & Reinvestment Act of 2009 Authority to construct, finance, plan operate or maintain new or upgraded lines and facilities that deliver or facility delivery of renewable energy (implies right to condemn

Uniform Act of 1970 Governs federal land acquisition Written offer Appraise to federal standards Good faith negotiations Private entities using federal money must follow Uniform Act

DOE Delegations DOE Delegation No , ( ) Administrator can sign acquisition documents Administrator can initiate condemnation Western can prepare its own title opinions

Land Acquisition Survey Appraisal Title Negotiations Record/Close transactions Federal Agency Coordination Condemnation

OWNERSHIP Obtain from affected counties (much of this is now online) Sometimes available from environmental contractor

Right of Entry Simple, revocable Sometimes pay $200-$500 per ROE Face to Face best Can condemn for this right (rare/expensive)

Obtain Title Evidence Who Owns Lands Title Marketable Department of Justice Requirements – Approval of Sufficiency of Title Prior to Acquisition (40 USC § 3111) – 2001 Title Standards from DOJ ENRD Title Insurance (Commitment then Policy) U.S. Policy Form 9/28/91

Legal Descriptions Product of Survey Contractor Include Access Roads Signed by a PLS ?

Appraisal Consistent to Uniform Act Standards Before and After (includes Damage to the Remainder) Three approaches to Value (Sales Comparison, Cost, Income Approach) State certified, prefer an MAI, or other certification Waivers under $10k or $25k if uncomplicated

Negotiation Face to Face is best Explain project, contract and dollars Be creative No set percentage increase and increases require justification Must consider impact on other owners

Landowner Perspectives Annual Payments Severance Damage Development Values Term Limited EMF View Noise Underground

Condemnation Last Resort We condemn rarely (3%) Through Department of Justice, their case We get title on filing Costly and time consuming Very Unpredictable Can take years to get to trial Authority Challenges Increasing Congressionally Authorized Public Use

Condemnation tasks Brief DOJ on Project Prepare Declaration of Taking – Legal Authorities Deposit Appraisal Amount (not last offer) Identify Witnesses – Appraiser, Agency witness, Developers, Planners, Pilots, EMF, etc

WAPA Experience with DOJ Varying levels of attorney experience They usually use their own appraiser Courts unpredictable on allowable evidence Help DOJ as much as possible, they don’t know industry

Condemnation Outcomes Best: Landowner had to pay us back some money Worst: WAPA appraisal $85k, Landowner appraisal $17/m, Verdict $3m Very unpredictable

Federal Rights-Of-Way BLM, Forest Service, Park Service Can Be Very Restrictive – Operating Plans – Term Limited

Native American ROW Negotiate with Tribe/Allottees, Grant from BIA Very costly Time consuming Politically sensitive Tribes want electrical improvements, or often negotiate on cost to go around Adamant against perpetual easements

Joint Projects Historically, Western preferred “all or nothing” re: land acquisition (Different procedures, lease, damage pmts up front) If developer acquires all land rights, make sure their condemnation authority is sound If developer to acquire partial land rights, must: Make sure their contract, strategy, payments consistent with agencies Make sure they follow federal procedures

Timeframes No acquisition until ROD Often advance survey, appraisal and title pre- ROD Allow one year for acquisition negotiations/condemnation Can stage construction with ROW if critical time frames

Use of Contractors Common for survey and appraisal work Clarify they are presenting contracts and recommending settlements Prior federal experience is helpful Closely monitor and provide negotiation parameters

Estimating Costs Survey: $5,000-$10,000 per mile Appraisal: $2,500-$5,000 per appraisal Title: $1,000 per ownership Negotiation: – Depends on Quantity, Title Review, Complications Title Review: – Depends on legal staffing. May have to contract out.

Other topics ?? Relocation – Almost never Damages – Not up-front – Based on actual damages

Questions