Indiana Court of Appeals Rules on I&M’s Use of Eminent Domain

SOUTH BEND, Ind. (WNDU) – Did a local power company abuse its power?

The Indiana Court of Appeals has a constitutional issue with Indiana Michigan Power’s recent use of eminent domain.

The sharply worded decision states that “owners have the right to defend themselves against subterfuge and bad faith in the seizure of property”.

Indiana Michigan Power is doing a lot of work to upgrade its Central South Bend transmission system.

The project includes the installation of a new two-mile underground transmission line connecting the Colfax and Muessel substations.

This transmission line would cross three privately owned parcels owned by developer Dave Matthews and 701 Niles LLC.

Matthews did not object to the project until he learned that a third party was involved.

“The memorandum of understanding (memorandum of understanding) is uh, it disclosed that there was this arrangement in place, or attempted to be put in place, to allow piggybacking,” said Shawn Ryan, an attorney representing Matthews and 701 Niles LLC.

Late in the process, it was revealed that Notre Dame was looking for a way to get electricity from a hydroelectric plant it was building in Seitz Park, back on campus.

The plan was for the university to use the same Indiana Michigan Power underground conduit bank was to build on land the utility seized through eminent domain.

Indiana Michigan Power argued that Notre Dame’s involvement was “incidental” to the “primary public use” of the utility – therefore permitted.

The Indiana Court of Appeals sent a strong opposite message.

“There is a separate division between public use and private use, and this will completely prohibit the use of eminent domain for private or private use,” Ryan said.

It looks like the ruling won’t have much practical application. A written statement provided by the University of Notre Dame reads: “Due to ongoing litigation and in order to meet our project schedule, the university has worked with the city to find an alternative route to the property in question. This has been accomplished and we are pleased that an important sustainability project that benefits the community and the university is nearing completion.

AEP Indiana Michigan Transmission Company issued the following written statement:

“AEP Indiana Michigan Transmission Company has appropriately exercised its statutory powers of eminent domain to obtain easement rights to construct an underground transmission line that will contribute to its goals of providing reliable service to the South Bend area. The Indiana Court of Appeals recently ruled that AEP Indiana Michigan Transmission Company cannot authorize the University of Notre Dame to use, in connection with Notre Dame’s planned hydroelectric facility, easement rights duly guaranteed by AEP Indiana Michigan Transmission Company. As AEP Indiana Michigan Transmission Company carefully considers the Court of Appeals decision to determine its next step, the underground transmission line will go ahead without the use of Notre Dame and will be used by AEP for the benefit of the South Bend area. Construction of the project has been largely completed since the beginning of May, and the remaining work related to conductor installation is expected to be completed by the fall.

While Dave Matthews initially had no objection to the utility work taking place on his property, he objected to the amount of compensation offered (approximately $75,000).

This disagreement led to the use of condemnation.

In its decision, the court wrote:

“The line of the AEP and the private line of the University constitute two distinct sets of easements and that only the first can be obtained by condemnation.

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