1. 1 Transmission Lines & Pipelines: Routing-Condemnation- Easements Wednesday, May 28, 2014 Texas Association of Realtors

2. Big Picture 2 Phase 1: Company study Phase 2: Routing Phase 3: Land acquisition (condemnation) Phase 4: Construction

3. 3 Phase 2: Routing

4. Routing Process Transmission/Pipelines Regulated Formal Process –Powerline Company Files CCN –Heard by SOAH/PUC Non-transparent Process –O&G Company/Railroad –Private/Threat of Condemnation

5. 5 Powerlines in SOAH Intervene or Comment If Intervening, Provide Written Direct Testimony Critical Difference: Protestors are Not Parties and Comments Are Not Evidence

6. Powerline Critical Fact! “RECOMMENDED ROUTE” DOES NOT MEAN MUCH 6

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8. 8 Roles and Strategies of the Team Landowners: Alliances Lawyers: Legal Experts: Routing

9. 9 How Experts Can Help You Analyze Routes and Segments Recommend a Route Support or Rebut Routes Chosen By Routing Agency Provide Testimony at Hearing

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11. 11 Critical Conclusion! “INTERVENORS” INFLUENCE ROUTE SELECTION

12. Big Picture 12 Phase 1: Company study Phase 2: Routing Phase 3: Land acquisition (condemnation) Phase 4: Construction

13. Steps in Eminent Domain/Condemnation 13 Phase 1: The Call, Visit or Letters from Landman Phase 2: Negotiating Your Terms and Compensation Phase 3: Sp ecial Commissioners’ Hearing Phase 4: District Court/County Court at Law Appeal

14. Phase 1: The Letters “Bona fide offer” required Condemnor’s “initial offer” Generally, includes a 30-day deadline Law requires a written appraisal and 14-day “final offer” before any hearing Critical time to have consulted with an attorney 14

15. Phase 2: Negotiating Your Terms & Compensation 15 Company landman makes the written offer First offer typically “low” Offer and terms are negotiable Landman and/or company lawyers discuss price, location, and terms

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21. Phase 3: Commissioners’ Court 21 If no agreement, company files condemnation lawsuit Purpose of Commissioners’ Court is to assess damages and “award” a dollar amount to landowner Braun & Gresham continues to negotiate Company can begin building after award

22. Phase 4: Appeal 22 Objection to award Formal courtroom jury trial Decides price Expensive Should be used as last resort

23. General Negotiations 23 Price of land taken Other damages Details of routes Location of structures Temporary agreements –e.g., Roads/Easements Permanent easements

24. Easement Negotiations 24 Restore/protect land Access points Roads Improvements Fences and gates Liability protections Landowner’s future use Limits on others’ use

25. Pipeline Specific Negotiations 25 Non-exclusivity Limitation of number of lines Limitation of diameter of pipe Limitation of easement width Limitation of surface facilities Depth of pipe Surface restoration measures Indemnity protection Termination clause Land/ranch specifics Miscellaneous provisions –No warranty, dispute resolution, etc.

26. QUESTIONS? Do transmission lines/pipelines negatively affect property values? 26

27. QUESTIONS? Do transmission lines/pipelines negatively affect property values? Should the seller tell the buyer an electric utility company has notified the seller the property may be impacted by the routing of a new transmission line? 27

28. QUESTIONS? Do transmission lines/pipelines negatively affect property values? Should the seller tell the buyer an electric utility company has notified the seller the property may be impacted by the routing of a new transmission line? Should the seller tell the buyer a pipeline company has notified seller about the possible routing of a new pipeline across the seller’s property? 28

29. QUESTIONS? Do transmission lines/pipelines negatively affect property values? Should the seller tell the buyer an electric utility company has notified the seller the property may be impacted by the routing of a new transmission line? Should the seller tell the buyer a pipeline company has notified seller about the possible routing of a new pipeline across the seller’s property? Should the seller disclose whether the property is under the threat of potential condemnation? 29

30. Bad Old Easements Blanket easements by past failure to negotiate Undefined ingress and egress locations Undefined width of permanent easement Undefined number and sizes of pipelines Undefined number of transmission line circuits, etc Undefined use of additional temporary work space Payment for new lines at 1930’s prices -- or worse!! –Example $0.25/rod for each additional line (1 rod = 16.5 feet) 30

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32. Harrington v. Magellan Pipeline Co., L.P. (2011 Waco Court of Appeals) An easement agreement in 1919 that grants the pipeline company the right to lay multiple pipelines “over and through [Grantor’s] lands” is ambiguous as to whether it means multiple pipelines in the same ditch as the first pipeline, or multiple pipelines at different locations and in different directions on Grantor’s lands. 32

33. Natural Resources Code Sec. 111.0194 Applies to easements prior to January 1, 1994 Applies to pipelines laid under threat of Condemnation or Eminent Domain If width of easement is undefined in old easement then “extends only a width of 50 feet as to each pipeline laid” Company may rebut with evidence it needs more Statute is unfortunately ambiguous 33

34. Exceptions to Title Policy Buyer should request the documents and carefully review the language before closing Without a careful review by buyer and his/her attorney, the buyer man not realize the extent of the burden of a bad old easement` Company may decide to “maintain” an old easement and remove all trees/growth in a 50-100 foot strip of land -- or lay additional lines anywhere on the property 34

35. Q & A 35

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38. 38 Patrick L. Reznik 512-894-5426 preznik@braungresham.com www.braungresham.com