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Dominion Energy : Atlantic Coast Pipeline starts suing NC landowners as construction schedule looms

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12/08/2017 | 04:19 am

Dec. 07--RALEIGH -- The Atlantic Coast Pipeline has begun suing property owners in North Carolina who have not agreed to lease their land for the planned natural gas pipeline.

The energy consortium, headed by Charlotte-based Duke Energy and Richmond-based Dominion Energy, says it needs to clear away legal obstacles that stand in the way of construction, which is scheduled to begin early next year. The project has fallen more than a year behind schedule and is facing an aggressive review by the N.C. Department of Environmental Quality.

Last week, the Atlantic Coast Pipeline filed seven condemnation actions in U.S. District Court against landowners in Nash and Cumberland counties. Hundreds more could be sued in the coming months as construction deadlines approach.

Through eminent domain, the consortium hopes to gain access for tree clearing, trenching, construction and, after the project is completed, upkeep and repairs.

The 600-mile underground pipeline would cross about 2,900 properties in eight counties in North Carolina as well as West Virginia and Virginia. It would carry natural gas from the Marcellus shale and Utica shale formations in Pennsylvania and West Virginia to supply Duke's natural-gas-fired power plants in North Carolina and South Carolina, and to supply natural gas to homes, business and industries for heating, cooking and manufacturing.

Public infrastructure projects -- such as roads, railways, power lines and pipelines -- have legal authority to seize private property, but they must compensate affected landowners. When landowners refuse to negotiate or can't strike a deal, the prices and terms are set by courts, under eminent domain powers granted the federal and state government.

About 20 percent of the project's affected property owners, including an estimated several hundred in North Carolina, have not agreed to compensation sums.

Dominion Energy spokesman Aaron Ruby said suing residents is a last resort, after negotiations have failed.

"It's now time to secure the remaining easements necessary to begin construction," Ruby said in an email. "Over the last few weeks, we've made final, good faith attempts to reach these agreements. In each case, our final offers were well above the appraised value of the properties. We were pleased to reach an agreement with some of these landowners, but unfortunately we could not reach an agreement with all of them."

The Atlantic Coast Pipeline will not completely take over the affected properties. It will allow crop farming above the buried pipeline, but the project will prohibit construction of buildings and swimming pools or the planting of trees on a 50-foot-wide strip called an easement.

The pipeline project appears to be pursuing an aggressive legal strategy to start construction before all landowners have negotiated agreements, said Chuck Lollar, a Norfolk, Va.-based property rights attorney representing several dozen landowners along the path. Such a strategy, called a "quick take," is generally reserved for governmental agencies, he said. Private companies don't automatically take possession of private land until after they have signed deals with the landowners.

"Their goal is to get it up and running because there's money to be made, and the farther they get along the harder it is to stop them," said Lollar, who doesn't represent any of the seven property owners sued by the Atlantic Coast Pipeline.

The Atlantic Coast Pipeline received approval in October from the Federal Energy Regulatory Commission. It still awaits several permits in North Carolina to operate a compressor station and to cross several hundred creeks, streams and other bodies of water. This week, the N.C. Department of Environmental Quality requested computer modeling and other data from the pipeline's developers, indefinitely delaying an air-quality permit for the compressor station.

But the project does not need to have all regulatory approvals to commence eminent domain lawsuits.

One of those sued is Orpha Gene Watson, president of O.J. Smith Farms in Whitakers, a 2,400-acre crop farm in Nash County.

Watson said the pipeline crosses a section of the farm and also a section of the land where he lives. He said he and his family members have reached an agreement with the Atlantic Coast Pipeline on reimbursement fees, but they are still working out terms that will preserve the organic certification of the farm in the event of a spill or other accident that could contaminate the property.

Watson said he became snared in the eminent domain lawsuit because the Atlantic Coast Pipeline couldn't risk anyone backing out of a deal before it was signed. Watson is represented by an attorney in the negotiations.

"We're not holding out," Watson said. "We're fine with what's going on as far as the settlement."

The lawsuits identify 10.28 acres in Nash County and 7.43 acres in Cumberland County that remain in dispute. The parcels are separated by three counties, indicating at least two separate areas for construction. Ruby declined to say why construction is starting at these locations.

Tracy Marshall Gardner, a Cumberland County crop farmer with a mailing address in the town of Wade, said her family farm is not in the path of the pipeline but the project is temporarily seeking access to the land for construction. Gardner said she is handling the negotiations without lawyers.

The project is seeking a temporary easement up to 5 years, according to the lawsuit, for immediate entry to conduct all work, including restoration and clean-up activities.

"We're talking to the man to get this mess settled up," she said. "I want him to change some of the stuff in the agreement, some of the terms."

John Murawski: 919-829-8932, @johnmurawski

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