Condemnation and CREZ: What Texas Panhandle Landowners Should Know


The demand for electric power just keeps going up. Providing additional capacity to satisfy the growing need is a priority for Texas. Wind is plentiful in the Panhandle and West Texas. The Texas Legislature decided to capture more wind power as a way to supplement other energy resources in populated areas. However, the power must be transported from where it is generated to where it will be used. This is done over giant power lines that carry the energy to substations for distribution.

Utility companies have the right to build power lines necessary for public use on the property of any landowner with property between where the power is collected and where it will be distributed. It is probably no surprise Texas landowners do not take kindly to having their property messed with. Nor do most enjoy having power lines run across the aesthetic beauty of their landscape.

The Problem with Getting Energy to Where It’s Needed in Texas

Adding to the list of big things in Texas is the wind. Texas is the largest U.S. producer of wind energy. However, the areas that are best suited to generate wind power are far removed from the dense population areas needing the energy.

In 2005, Texas lawmakers passed a plan to get wind energy from where it is produced to where it can be used. The Legislature directed relevant state agencies to locate areas in the state best suited for wind energy generation. These areas would be known as Competitive Renewable Energy Zones (CREZ).

Five locations in West Texas and the Panhandle were identified. From those five locations, a network of transmission lines was to be built to carry the power to population centers in Central and East Texas. The project was completed in 2013 and included 3,500 miles of transmission lines allowing high-voltage transmission to the Panhandle for the first time.

In order to complete the project, utility companies had to acquire legal permission from landowners to build the transmission lines across their properties. Permission could be acquired by agreement with a landowner or by going to court in a condemnation proceeding. Utility companies got the right to use a specified portion of a landowner’s property for the purpose of building and then operating the power transmission lines.

Texas’ Right to Run Power Lines Through Your Backyard

A government’s right to acquire privately owned property for public use – eminent domain – is well established in the United States. It is also well established that just compensation must be paid to the landowner as reimbursement for the property taken.

The Texas Utilities Code gives a gas or electric company the right and power to enter on, condemn, and appropriate the land, right-of-way, easement, or other property of any person or corporation. But landowners are also given rights that must be recognized as utility companies seek to enforce an energy right-of-way.

Landowner Rights in Condemnation Proceedings

Condemnation is the legal process by which a utility company exercises its right to eminent domain. In Texas, the Landowner’s Bill of Rights applies in any attempt to condemn property.

Texas landowners facing property condemnation have the right to:

  • Notification of the intention to condemn the property
  • Adequate compensation for the property
  • Property can only be condemned for public use
  • Condemnation can be only by a government agency or a private entity authorized by law
  • A property appraisal by the condemning party
  • Good faith offer to purchase the property before filing a condemnation lawsuit
  • A hearing before a court-appointed panel of three special commissioners to determine the amount of compensation owed
  • Object to the special commissioners’ award

What is Adequate Compensation for Condemned Property?

The Texas Attorney General says adequate compensation includes market value. The actual amount of compensation for a landowner in condemnation proceedings is determined by a panel of three local landowners who live in the county where the proceeding is filed. These landowners are sworn to determine the amount of compensation ‘fairly, impartially, and according to the law.’

The special commissioners consider appraisal reports from both sides and other evidence of property value, including damage to the surrounding property, value added by the condemnation, and the proposed use of the condemned property. The amount of compensation determined by the panel is called the Award.

The compensation awarded by the commissioners affects who pays the cost of the condemnation proceedings. If the amount awarded is less than or equal to the amount offered by the condemning party, the landowner may be responsible for the cost of the proceedings. If the amount awarded is more than what was offered, the condemning party is responsible for the costs.

Landowner’s Right to Challenge a Condemnation Award

A landowner who is dissatisfied with the amount awarded by the special commissioners can file a written objection with the court. Landowners have the right to a trial by either judge or jury. Costs are allocated in the same manner as with the special commissioners’ award. Either side may appeal the court’s decision.

The Continuing Need to Expand Transmission Capacity

The CREZ project added much-needed transmission capacity to help better serve the state’s increasing power needs. But that was ten years ago. High demands on power grids in recent years have kept the Electric Reliability Council of Texas (ERCOT) scrambling to keep power flowing to Texans.

Part of the problem, once again, is the need for lines to transmit the plentiful emission-free power being generated in remote parts of the state. If renewable energy is produced but cannot be sent because there are not enough available transmission lines, then the power will be wasted. Wasting power is referred to as curtailing, and it is occurring with increasing frequency due to a lack of adequate transmission infrastructure.

The need for energy is so great that it makes no sense to have to curtail the production of low-cost electricity because the system has nowhere to go with it. Building additional power transmission lines is an obvious solution, and one Panhandle landowners should be prepared to confront as the power supply must expand to meet increasing demand.

If you or someone you know have questions about the Texas Panhandle condemnation process, our Texas landowner rights lawyers in Amarillo can help.

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