On November 18, 2011, we met with the CapX attorneys handling the condemnation, John Drawz and Steve Quam from the Fredrikson & Byron law firm.  We also met with Dan Lesher of Great River Energy, who is in charge of all acquisitions on this line, Rod Clarke, who is the real estate project manager in charge of six land agents who will be or have been visiting with you, and Steve Carlson, the right-of-way and relocation agent who deals with specific right-of-way and relocation issues.  We also received an updated “Buy the Farm” chart, which was made by CapX’s attorneys in an effort to try and lay out CapX’s understanding of how “Buy the Farm” might work.  This chart may undergo some additional future updates.  CapX’s attorneys made this chart because, in our previous meetings, we concluded that there simply is no guidance in the Buy the Farm Act that gives any indication of the actual process.  I am also enclosing a draft “Buy the Farm closing agenda,” which CapX is now using on the Fargo to St. Cloud line for properties whose owners have elected to have the utility “buy the farm.”  As I am sure you are aware, CapX started construction on the Fargo to St. Cloud line earlier this year and has actually been stringing the line for quite some time. 

The real purpose of the meeting was to see if we could agree on a format for those of you who want to begin discussions to have CapX buy your farm.  In the course of the discussions, however, we obtained additional information that we would like to share with you.  On this line, they will be building from west to east starting in Renville County, then coming through Sibley County and into Scott County.  CapX hopes to file its condemnation petitions in Renville County by January 31, 2012.  That means they would have to obtain appraisals and make final offers to property owners in Renville County by the end of this month.  CapX hopes to file in Sibley County perhaps at the end of January or perhaps at the end of February, 2012.  That means they would have to obtain appraisals and make final offers on Sibley County property by the end of December 2011.  CapX is planning to file in Scott County by the end of February, 2012, so again, they would have to obtain appraisals and make final offers before the end of this year.  With respect to our clients, we told CapX to go ahead and order appraisals now, because we would be requiring them under any circumstances. 

CapX intends to begin construction on this line during the year 2012, but will wait until the winter of 2012-2013 to construct the river crossings, so it can work while the rivers are frozen.  They have not yet decided whether to use helicopters to string the line on this line, as it used on the Fargo to St. Cloud line, since it has not yet determined whether helicopters are cost effective.  CapX may use helicopters on our line, they may decide not to use them at all, or they may use them on some portions of our line.  They understand that the helicopter stringing creates a great deal of noise from the helicopters themselves, and then from the percussion sound you hear when the lines are literally attached to the poles by an explosive.  We have not yet heard that explosion, but have talked to people on the Fargo to St. Cloud line who said it was literally the noisiest sound they had ever heard.  One person described it as “like an artillery blast.”  We can complain about the use of helicopters, but I assume CapX will simply do what is most cost effective for them.

Another new piece of information is that CapX does not intend to use the shiny stainless steel poles they have put up on the Fargo to St. Cloud line, but are going to use poles which they describe as a “rusty brown” color because they think that color will better blend into the environment and be more acceptable to people.

We did talk about what needs to be done with respect to CapX obtaining appraisals in general, and particularly, the additional appraisal work that needs to be done as a result of any “Buy the Farm” election made.  Since we have asked them to go ahead and get appraisals for all of our clients, we have told them it is acceptable to have their appraisers contact you directly to arrange a time to come and look at your land.  CapX would prefer to have a quick look inside your home, but if you are not comfortable with that, you can simply tell them they are not permitted to do a home inspection.  They will want to see the remainder of your property, and in particular, the area across which the poles and lines will be.

CapX will also need access for survey purposes, so that they can tell us exactly where the poles and lines will be.  They will need to take some soil borings in the areas where they have to build a foundation for the poles.  They are going to want to know where your drain tile is so they can determine if they are going to impact your drainage system at all.  They are, of course, required to repair any damage to your drain tile system.  They also need to do what is generally called a “cultural survey,” looking for things such as historical artifacts, including arrowheads or other historically important items.  It may be they will find none on your property, but the law requires them to do such a survey.  For those who elect “Buy the Farm,” they will also need to do a Phase I Environmental Survey, looking for such things as contamination or field drainage problems.  CapX also wishes to talk directly to you about issues such as crops and pole locations.  Sometimes, they have the ability to move poles a short distance if the present location presents some significant problem for you. 

We have told all of the CapX representatives that they have authority to talk to you directly about the issues I have listed here.  So, you may expect a knock on your door, perhaps some time fairly soon, by a land agent who works for Mr. Clarke or right-of-way agent, Steve Carlson.  They both work for an entity called Land Service Company.  They have an office located at 1604 South Broadway Street, New Ulm, MN  56073.  Their toll free number is 1-855-543-3994.  Mr. Clarke has also made available his cell phone number, which is 608-212-7135. 

What representatives of CapX are not to speak to you about is compensation.  They have no authority at this point to negotiate compensation with you or attempt to get you to sign on the dotted line.  There may well be standard forms that you are asked to sign, including the right of the survey access we discussed above, or the right to conduct soil borings.  They indicated they would provide forms to us to review, so unless we advise you otherwise, those forms are acceptable for you to sign, and you shouldn’t be concerned about doing so.  We are always here if you have specific questions, but CapX does need written authority to do some of the preliminary work, and we are eager to have them do that preliminary work and finish your appraisals.

With respect to any of you who wish to make an immediate “Buy the Farm” election, CapX is ready to work with us to attempt to quickly resolve the purchase price to be paid you for the entirety of your property.  It may be that, if we cannot agree on a purchase price, they may be open to discussing paying their appraised value of the entire property as they would in a “quick take” situation, so that you have some of your money and may be able to work on buying alternative property.  In that case, we would defer to a condemnation hearing the amount over and above their appraised value that they are required to pay you.  They understand that some people have opportunities to buy replacement property now and would like to get this issue settled, and they are willing to do so even before they start the actual condemnation process.  Consequently, if you wish us to commence negotiations on your behalf immediately, we need to hear from you.  We are enclosing a form and an envelope for your use to write back to let us know you are making an immediate “Buy the Farm” election and want us to proceed as quickly as possible.  Please understand, CapX is not agreeing that any particular landowner has a right to a “Buy the Farm” election.  The Supreme Court has interpreted the obligation of a utility to “Buy the Farm” to have a “reasonableness test” applied.  That is to say, courts will determine any disputes over whether the amount of your property you wish to require CapX to buy is reasonable.  The courts look at whether the property you want included is commercially viable.  Make no mistake – there will be legal wars fought over whether CapX has to buy your farm, whether the amount of land you want them to buy is reasonable, and whether that property taken together is commercially viable.  That is what we are here for.  We can advise you and help you get through this process. 

We are at a time when things are going to start moving.  We will continue to update you on information we receive from CapX and its lawyers and, as always, please feel free to call either of us with any questions that you have.

Contacts: Rachel Myers, Rod Krass,

I thought I would give you an update on what is happening with the CapX2020 route hearings.  The hearings were held in June and all parties have already submitted their first brief, and the second brief is due on October 7^th.  After the second brief is done, the administrative law judge will close the record and begin working on her recommendations.  The big issue in these hearings has nothing to do with the route near or around you.  It deals with whether or not the 345kV line, after it passes you and heads south, will go through Olmsted or Wabasha County.

In conjunction with these issues, CapX2020 has issued its Final Environmental Impact Statement (EIS), which we received earlier this month.  You can find it online, but it is rather extensive in scope.  I thought I would provide you with some parts of the EIS that may be of interest to you.  On page 45 of the EIS, there is a section called Land-Based Economies.  In that section, CapX2020 notes that approximately 86% of the project area consists of agricultural land, with about 53.2% of that agricultural land classified as prime farm land.  As required by law, CapX2020 has provided an AGRICULTURAL IMPACT MITIGATION PLAN.  I am reproducing most of that Plan on the attachment I am enclosing.  Keep in mind, this is CapX2020’s mitigation plan.  It is promising what it will do as part of this project.  Making certain all of these promises are kept is my job and yours.

 As I am sure you already know, this 345 kV line will be strung on monopoles (a single pole structure with the capacity to handle two 345 kV transmission lines, only one of which will be strung initially.)  The poles themselves are between 130 and 175 feet high, and generally, there is between 700 and 1,000 feet between poles.  The actual right-of-way for the line is 150-feet wide.  The foundation for the poles is circular with a diameter of between 6 and 12 feet.

 CapX2020 indicates that it will minimize impacts from construction activities by:

 1.   Placing construction mats in wet or soft soil locations and narrow ditches to minimize disturbances;

2.   Spanning all streams and rivers and spanning all wetlands to the extent possible;

3.   Not driving construction equipment across waterways except under special circumstances and only after discussion with the appropriate resource agency;

4.   Crossing waterways using boats or by driving equipment in water crossing areas only when frozen in winter (to pull in new conductors and shield wires, for example); and

 5.   Fueling and lubricating far from waterways to insure that fuel and lubricants do not enter waterways.

These are, again, promises that CapX2020 is making, and you should report any deviation of its promises during the construction phase.  Interestingly, CapX2020 indicates that its transmission system is built to withstand normal weather extremes.  It also says: “with the exception of severe weather, such as tornadoes and heavy ice storms, high voltage transmission lines rarely fail.”  CapX2020 also indicates that it will do monthly inspections of the transmission lines by air. 

The final EIS does address issues of electric and magnetic fields.  The EIS maintains that the electric and magnetic fields are at harmless rates given CapX2020’s projection of average and peak amperages going through this line.  However, CapX2020’s calculations are all based on an assumed loading of 600 MVA.  Each of the two lines that may be constructed on these poles however, has a designed MVA of 2,050, which CapX2020 refuses to consider.  We have introduced evidence into the record calculating the magnetic fields at the design level, which generates a much higher magnetic field. 

CapX2020 cites a number of health studies indicating that scientific evidence suggests that electromagnetic fields (EMF) exposures posing health risks are “weak.”  However, it acknowledges that the National Institute of Health recognizes that such exposure cannot be considered entirely safe, since there is weak scientific evidence showing that exposure may pose a leukemia hazard.

I know some of you are concerned about “stray voltage.”  CapX2020 references this phenomenon in the EIS and indicates that stray voltage can result from damaged, corroded, or poorly connected wiring, or damaged insulation.  It contends that transmission lines do not, by themselves, create stray voltage because they do not connect to businesses or residences.  But, CapX2020 acknowledges that transmission lines can induce stray voltage on a distribution circuit that is parallel or immediately under the transmission lines.  That is to say, for example, that distribution lines going to your home or farm that cross these 345 kV transmission lines will create stray voltage. 

One of the more interesting sections of the EIS deals with property values, where CapX2020 maintains that most studies show no adverse impact of these transmission lines on property values.  CapX2020 does acknowledge a number of studies that come to the opposite conclusion. 

CapX2020 contends that the noise from these 345kV lines with a single circuit in service is in the range of 45 or 50 decibels (dB).  Its study shows that ordinary bedroom noise is approximately 40 dBs, a library is about 50 dBs, and conversational speech is around 60 dBs.  A business office or a vacuum cleaner is 70 dBs and a jet engine is 140 dBs.  The State noise limits for residential property are between 60 and 65 dBs during the day and 50 to 55 dBs at night.  CapX2020’s contention is that noise is not a problem.

CapX2020 does have a small section on eminent domain in the EIS, which correctly notes that, as a utility, it does have the power to condemn property.  The EIS notes that the utility must negotiate in good faith with the landowner and provide the landowner with a copy of an appraisal of the landowner’s property before beginning the condemnation process.  It also notes that the landowner can obtain his or her own appraisal, and may be reimbursed for the reasonable cost of that appraisal (up to $1,500 for a single family or duplex home; up to $3,000 for others).  The EIS notes that, if condemnation is required, the utility will file a petition for that condemnation in district court in each county where property is to be taken.  It also notes that the court must appoint three impartial commissioners to determine the compensation, and notes that the commissioners have broad powers to hear and consider allegations and proofs of all persons interested.  The EIS contains this interesting provision:

A landowner who chooses not to negotiate a right-of-way on his or her property and instead requires the utility to use eminent domain power by initiating a condemnation process, would likely benefit from legal counsel.  Condemnation proceedings can be time consuming and expensive; however, some landowners may feel this time and expense is necessary and worthwhile.  (Indeed)

With regard to the final route selection, once the administrative law judge makes her decision and recommendation, the Public Utilities Commission will hold public hearings (at which you are welcome if you have any interest) and make a final determination of the route.  The EIS suggests that this will probably occur this winter, and by March or April of next year, CapX2020 expects the condemnation process to begin.  CapX2020 also expects to begin placing poles and stringing line by next fall.  It also expects that much, if not all, of the line stringing will be done by helicopter. 

As always, please call if you have specific questions that we can help with.  I know that some of you have already been contacted by CapX2020 land agents, and in some cases, have already received offers.  We would be most interested in knowing when these offers occur and what these offers are.  Keep in mind, we have yet to see a situation in which the offer made by the utility is not exceeded by the ultimate damages awarded by the condemnation panel, or by negotiation prior to the condemnation hearing.  Also, keep in mind that, once CapX2020 files its condemnation petition in district court, the next thing that occurs will be a hearing at which the condemnation commissioners, who decide your damages, are selected.  It is vitally important that all property owners have input into that decision through their lawyers.  Once the Public Utilities Commission (PUC) makes a final decision on the route, we will let you know.  On September 27, the PUC did approve the plans for the sub-station to be built in Belle Plaine Township.

Contacts: Rachel Myers, Rod Krass,