Power of Eminent Domain - When? The Post-Chronicle, 6/1/06


By Jim Clark

There's a place for government action that sometimes impinges upon the rights of citizens, one such being the exercising of the "power of eminent domain", or the taking of property with appropriate remuneration to the owner for the purpose of establishing facilities for the common welfare thereon or therewith. Such facilities could include such things as roads, buildings, and parks. This action is perfectly legal, subject to an offended party's access to the courts, and not infrequently exercised.

The "Kelo Case" in Connecticut last year brought the subject front and center, however, when a municipality exercised its eminent-domain power to take property — not for public use, but for use by private concerns — in the interest of profitability for the entrepreneurs and tax-enhancements for the government. The matter made its way to the Supreme Court, which amazingly ruled in favor of the city of New London, thus requiring the owner involved to give up the personal property. Without question, the interests of the businesspeople involved, as well as those of the government, will be more than well-served — they will be grandly enhanced. However, where does that leave the property owner? There are other such cases in the works now, one of them outlined in a recent Fox-News Hannity-Colmes program.

An unusually interesting eminent-domain case has been an on-and-off-and-on matter in Lexington, Ky. since 2003. Notwithstanding that probably 95% of all municipalities in the nation own (either built or bought) and operate their water companies, this city (280,000 population) did not build its own water-supply company years ago and has never owned it. It's owned by the Kentucky-American Water Company, which was purchased a few years ago by RWE, a German outfit that operates water companies in many places.

Suddenly, there was panic in some quarters — especially among some of the city's best-heeled citizens — engendered, at least allegedly, by the fact that a German company had immediately become enabled to somehow cut off the city's water supply on a whim - or as an act of... whatever ...and that something had to be done. These folks set up an organization for the purpose of seeing that the city become the owner of the water company — even through the power-of-eminent-domain route, if necessary. A handful of them "loaned" something like $750,000 to the city to cover the costs of instigating action, and a property-appraisal firm was employed. The water company made it clear that its facility was not for sale, and in subsequent negotiations even offered some prime land (a beautiful park leased by the city at a dollar a year) to the city.

The kicker in all this has to do with the electricity required to operate the water company. Its supplier, Kentucky Utilities, was sold a while back to Louisville Gas and Electric, the company furnishing power to Louisville, Ky., which in turn was sold to a company in Great Britain. In 2000, LG&E was acquired by Powergen plc of the U.K. Then in 2002, Powergen plc was acquired by E.ON, headquartered in Düsseldorf, Germany.

So, not only the water supply in Lexington is controlled by a German company, but so is the power supply. Yet, the folks agitating for water-company ownership offer no exception at all to the German-ownership of the power supply, even though not a gallon could be pumped from the Kentucky River or purified without the use of electricity.

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