Friday 4 November 2011

Lines and the law

Agricultural consultant and valuer Richard Collins says landowners with genuine cases for compensation for powerlines on their property should turn to arbitration. In response, Eirgrid emphasises the benefits of electrical infrastructure, and says independent arbitration is available for any dispute.

THE ESB/Eirgrid proposal to construct a large high-voltage electric powerline between Dunmanway and Clashavoon in Co Cork (about 50 km) is causing much concern to the landowners whose land will be traversed. There can be little doubt that the erection of such powerlines and pylons will reduce the value of farms along its route.

Pressure from landowners over many years about damage done by road schemes and gas pipelines eventually resulted in reasonably satisfactory levels of compensation for farm devaluation. Not so, however, in the case of powerlines and pylons.

The Entitlement to Compensation: The Electricity (Supply) Act of 1927 gave considerable powers to the ESB, but did not provide for proper compensation payments to landowners for powerlines and pylons on their land. This was legally challenged by Gormley in a landmark court case (ESB v Gormley, 1985). In the Supreme Court judgement, the judge described the right to acquire a wayleave or easement over land to facilitate the construction of powerlines, pylons and masts, as a "burdensome right over land". This opened the door, and resulted in a provision in the Electricity (Supply) (Amendment) Act 1985 for full compensation to landowners for damage done by electric powerlines, poles and pylons. There is now an undisputed entitlement to full compensation for damage to property as a result of these structures.

However, poorly focused efforts by landowners mean that the ESB still steadfastly hold that no such devaluation exists, and landowners remain unpaid for property devaluation.

Why is there a resistance to powerlines? Powerlines and pylons are a visual eyesore and, like any eyesore, cause a devaluation of the property on which they are erected. More importantly, however, there is now a very strong perception that they are a health risk, and this adds further to the property devaluation. Wayleaves and easements taken by the ESB/Eirgrid for the erection of powerlines are registered on the landowner’s property deeds. What most landowners do not realise is that the power given to the ESB/Eirgrid by the various ESB Acts also entitles them to enter any part of a landowner’s property to erect the powerline and afterwards carry out inspections and maintenance, and in emergencies, prior notice does not have to be given. This can have serious animal disturbance and disease implications. Helicopter flights over the powerlines for inspections are a regular occurrence, and can seriously disturb animals, particularly horses.

The combination of the eyesore, the perceived health risk, the burden on title and the access rights, constitutes a significant devaluation of property and appropriate compensation should be paid to landowners for this devaluation.

What are landowners paid? ESB/Eirgrid generally limit compensation payments to crop loss resulting from the construction works. In recent times, there may also be a so-called "facility payment" for co-operation with the pylon construction. However, there is an absolute and total resistance to an acceptance that these structures and rights devalue property, and accordingly, landowners are not paid compensation for same. By nature, landowners are generally co-operative, and will accept crop loss compensation and allow the works continue. It is only when a landowner may wish to sell his farm or erect a dwelling house or farm building that he realises his or her mistake.

The extent of devaluation: No two situations are the same. Clearly, the erection of a low voltage powerline across one corner of a very large holding, several hundred metres from the dwelling house and farm buildings, will not cause the same level of devaluation as a high voltage powerline with a number of pylons in close proximity to the dwelling house, through the centre of a small or medium-sized holding. This latter situation could be so serious as to ruin a potential farm sale, because intensive farmers and bloodstock owners would have no interest in acquiring such land, with the problems referred to above. In the former situation, the level of devaluation is likely to be insignificant, and generally would not justify a reference to arbitration for compensation.

What can landowners do? To disrupt or prevent the erection of powerlines is illegal. ESB/Eirgrid will absolutely refuse, except in extremely exceptional circumstances, to put powerlines underground — and there is no law to compel them to do so. Major protests aimed at having powerlines put underground have seldom been successful, and have generally been a wasted effort. The only realistic route for landowners is to pursue the matter by demanding appropriate compensation.

There is provision in the legislation for compensation for property devaluation, and if ESB/Eirgrid refuse to acknowledge genuine devaluation (as they invariably will), the landowner can have the matter determined by an independent property arbitrator whose decision is binding on both parties.

Landowners with genuine cases should not be afraid of the arbitration process. However, the case must be realistic, worthwhile, and must be properly prepared.

There is little point going before a property arbitrator without evidence and professional expertise to support the case. There is now real evidence that land with large powerlines has been selling at much lower prices than similar land without such structures.

It is not advisable to break the law, while there is a mechanism to get fair play within the law. The threat of having to pay legal costs should not deter landowners, because it is slight, in the right circumstances. As in all such matters, good and reliable legal and valuation advice should be sought at the outset.

Farmer discussion groups are now emerging as a useful forum for having the pros and cons of major issues debated. Large scale protests have been tried throughout the country, but do not appear to have achieved any worthwhile success, mainly because they have been aimed in either illegal or unachievable directions. In the final analysis, such actions are only a distraction from the really worthwhile opportunities that exist for getting fair compensation for property devaluation.

Experience: Having been involved in trying to get compensation for landowners for the past several years, my experience informs me that satisfactory results can be achieved if the approach is correct. The official ESB/Eirgrid position is that they will comply with the entitlement, as covered by the Gormley Supreme Court judgement, but as powerlines do not devalue a property, the compensation for same will always be zero, and if landowners think otherwise, they should go to arbitration. Unfortunately, this then frightens landowners, and the relevant compensation is foregone.

Despite the Gormley success in the Supreme Court, ESB/Eirgrid have succeeded in getting powerlines erected throughout the country, without having to concede that there is devaluation of property.

This has been achieved by powerful and professional management and PR work. Farmers should try the same approach.

Richard Collins is an agricultural consultant and valuer and can be contacted at FBA House, Fermoy, Co Cork

Irish Examiner

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