Real Estate & Property Law

Cabarrus sues over pipeline project

By Alan Ackerman

Independent Tribune

But Hovanec explained why the city wants the pipeline. Monroe sells natural gas and is building the pipeline to connect to the Transcontinental Gas Pipeline in Mooresville. That pipeline runs from Texas to New York.

The pipeline will reduce the cost of natural gas for its customers by $18 per year once it is complete.

The pipeline also will allow Monroe to receive three times the amount of gas currently allowed by the Piedmont Natural Gas contract, allowing the city to expand its customer base.

Hovanec said the City of Monroe agreed to pay Midland $1.6 million upfront and then an ongoing fee based on the amount of natural gas that comes to Monroe.

"Originally, Monroe was to pay a higher ongoing fee and no upfront money, but Midland needed some funds for infrastructure updates, and we restructured the deal where they would get a large portion up front and a reduced rate on the back end when the gas starts to flow," Hovanec said. "From a long term perspective, Monroe comes out spending less money than if we had the higher rate all along."

This article deals with a number of issues, which vex many communities.  Is it fair to have one entity with the power to condemn move forward to expropriate for the benefit of another governmental entity?  Should the condemning authority utilize the eminent domain power in such a fashion so as to provide one community an advantage over others?

Full post as published by National Eminent Domain Blog on August 07, 2009 (boomark / email).