N.C. Supreme Court Says Water Authority Owes Hydroelectric
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ISSN 0549-799X Number 381 January-March 2013 State’s ability to plan for water supply could be affected N.C. Supreme Court says water authority owes hydroelectric producers compensation for takings under Fifth Amendment by Jeri Gray On December 14, 2012, the North Caro- eminent domain in North Carolina, listing Property rights lina Supreme Court decided that it had the entities to whom the power of eminent and riparian rights erred in agreeing to review a unanimous domain is delegated, the purposes for Exactly what the term “property rights” Appeals Court ruling in the case of L & S which they can exercise eminent domain, comprises is the subject of long-standing Water Power, Inc., et al v Piedmont Triad the procedures they must follow and how disagreement in the United States. In L&S Regional Water Authority (PTRWA). damages are to be measured. In North Water Power et al. v. PTRWA, the Ap- This leaves standing the Court of Appeals Carolina, there are two types of “condem- peals Court decided that persons owning ruling that PTRWA owes downstream nors”: private (such as public utilities) and land bordering rivers and streams have a hydroelectric producers compensation for public (such as local governments). property right to water flowing by their permanently reducing flow in the Deep In 2006 in the wake of the U.S. land, as opposed to a usufructory right, or River and thereby taking their property Supreme Court decision in Kelo v. City a right to use the water. Further, the Ap- rights (background on the case can be of New London, the General Assembly peals Court decided that riparian owners read in the October-December 2012 issue amended the statutes governing eminent have the right to water flow undiminished of the WRRI News. domain to delete provisions that expressly by upstream use as opposed to water flow The decision turns on the Appeals allowed taking of private property for that may be diminished by “reasonable Court application of the “takings clause” economic development. House Bill 8 use” of riparian owners upstream. Both of the Fifth Amendment to the U.S. Con- under consideration in the current General of these decisions are counter to previous stitution and its interpretation of North Assembly, would put before voters a pro- interpretations of riparian rights in North Carolina’s common law doctrine of ripar- posed amendment to the N.C. Constitu- Carolina. ian rights and what constitutes property tion to provide that “private property shall rights. not be taken by eminent domain except Consequences of for a public use” and to provide that any the decision Eminent domain party can ask for a jury to determine the A number of entities with the power of The takings clause of the Constitution amount of “just compensation.” continued on page 2 says that if an entity that possesses the au- thority of eminent domain takes property for a “public use” through condemnation, it owes the property owner “just compen- In this issue January-March 2013 sation.” Therefore, this decision applies Page only to entities that exercise eminent Electric utilities under pressure on coal ash ponds 2 domain. Scientists investigate impacts of water discharges from coal The federal government and state ash ponds 5 governments hold the power of eminent Environment-related legislation introduced in the N.C. General domain. States can delegate this power to Assembly 7 other entities. Chapters 40A and 136 of USGS gage infrastructure supports array of critical programs 9 the N.C. General Statutes govern use of 2013 WRRI Research Awards 9 Upcoming events 10 January-March 2013 WRRI NEWS 2 N.C. Supreme Court continued from page 1 eminent domain submitted friend-of-the- doctrine of riparian rights will continue court briefs to the Supreme Court in L&S to play a role in water allocation policy, Water Power et al. v. PTRWA, offering whether it is well suited to modern cir- their views of the consequences of the Ap- cumstances or not.” peals Court decision for them (see WRRI However, Hanchey said that because ISSN 0549-799X News). In a January workshop organized the decision did place riparian rights with- Number 381 by the N.C. Bar Association Foundation, in the scope of condemnation authority, it January-March 2013 attorneys specializing in North Carolina suggests that local governments could use This electronic newsletter is published by water law (of which there are said to be that authority to purchase necessary ripar- the Water Resources Research Institute only a few), offered additional insight into ian rights at reasonable prices by avoiding of the University of North Carolina. It is financed in part by the Department possible consequences of this departure impact to highest value uses. “It is an of the Interior, U.S. Geological Survey, from accepted interpretations. unfortunate aspect of PTRWA’s situation as authorized by the Water Resources According to Matthew Hanchey of that it has impacted a string of facilities Research Act of 1964. You may sign up the law firm Hunton & Williams (which that are essentially in the business of to receive the electronic newsletter via an electronic listserv by represented PTRWA in the case), the deci- monetizing river flow,” he said. sending an email to sion seems to require entities with eminent [email protected]. domain to pay for water withdrawals Public water systems Richard Whisnant of the UNC Institute of WRRI that private riparian owners can take for NC State University, Box 7912, Government and co-author of the Water free. Further, said Hanchey, because the Raleigh, NC 27695-7912 Allocation Study for the General Assem- decision frames riparian rights as Consti- [email protected] bly’s Environmental Review Commis- http://www.ncsu.edu/wrri/ tutionally protected property rights, it does sion, said that the decision in L&S Water not recognize the modification of common WRRI STAFF Power v. PTRWA demonstrates that North law riparian rights by statute or admin- Carolina courts are not well situated for Susan White istrative agency action. Therefore, the resolving water conflicts and that unpre- Director decision calls into question the ability of 919-515-2455 dictability will continue to result if such the General Assembly to modify existing conflicts are left to the courts. He said David Genereux water rights through legislation, imply- that because North Carolina water law is Associate Director for Research ing that the legislature cannot pass laws 919-515-6017 sparse, the courts have to go back to very to allocate water in areas where water use old cases for precedent, while society, sci- Mary Beth Barrow conflicts arise. Business Officer ence and policy have moved forward. Hanchey also said that while the 919-513-1152 “The doctrine of natural flow had to decision might seem to adversely affect give way for dams and mills to operate, Nicole Saladin Wilkinson municipal water suppliers, these entities Coordinator for Research and Outreach so the courts developed the doctrine of were probably already at risk in riparian 919-513-1216 reasonable use,” he said. “This decision rights cases since case law had established Wendy Cox runs counter to the course of law in the that municipal water supply is not a “rea- Accounting Technician United States.” sonable use.” He pointed out that if the 919-513-7321 Whisnant said that—added to earlier Court of Appeals had ruled that municipal Anna Arnold rulings that taking water out of a stream water supply is a reasonable use, but that Communications and a reduction in flow is not reasonable, it and piping it offsite for drinking or Program Coordinator 919-513-1203 could have resulted in compensation be- industrial uses is not a riparian right—this ing paid to the plaintiffs and at the same decision places public water systems in Nancy Simpson time corrected a pre-existing problem for the position of the frog in the pot of water Workshop Assistant 919-515-2815 public water suppliers and modernized heating up. the riparian rights doctrine in a way more “The General Assembly will have to Jeri Gray consistent with state policy on water sup- act to straighten this out somehow,” he Rhett Register said. Newsletter Editors ply planning. 919-513-2772 “In short,” said Hanchey, “I think this case has ensured that the venerable 3 WRRI NEWS January-March 2013 Electric utilities under pressure on coal ash ponds Across the United States, there are on the public’s radar screen until a authority, it found—not the 14 they upwards of 2,000 coal combustion few days before Christmas 2008 when expected—but 50 ash ponds large residuals (fly ash, bottom ash, boiler a huge coal ash disposal pond failed enough that they must be inspected slag and gypsum) disposal sites, at a TVA coal-fired power plant near and monitored for structural integrity. including hundreds of wet ponds with Kingston, Tennessee. The failure The EMC also learned that its an average size of 149 acres. Accord- spilled more than 5.4 million cubic regulatory authority regarding water ing to the U.S. EPA, coal-fired power yards of coal ash slurry into the Emory quality concerns linked to coal ash plants produced more than 136 million River, covering nearly 300 acres with ponds comes through state law gov- tons of coal combustion residuals (also sludge, destroying three homes, and erning groundwater protection and called coal ash) in 2008. About 60% damaging others. federal Clean Water Act regulation of goes into storage and disposal sites, Field investigations and labora- discharges to land and surface waters. and about 40% is used “beneficially” tory studies by EPA and independent Discharges to surface waters from de- for construction and geotechnical ap- scientists documented leachable con- watering of coal ash sludge in ponds plications.