United States District Court, D. Nevada
PASEO VERDE GIBSON APTS. LLC, a Nevada Limited Liability Company, Plaintiff,
v.
VALLEY ELECTRIC ASSOCIATION, INC., et al., Defendants.
ORDER
The
Honorable Kent J. Dawson United States District Judge.
Presently
before the Court is Plaintiff's Motion for Summary
Judgment (#17). Defendants filed a response in opposition
(#20) to which Plaintiff replied (#21). Also before the Court
is Defendants' Motion for Summary Judgment (#18).
Plaintiff filed a response in opposition (#20) to which
Defendants replied (#22). The parties agree that the Court
will determine on cross-motions for summary judgment whether
Defendant Valley Electric Association, Inc.
(“VEA”), a wholly owned subsidiary of Valley
Electric Transmission Association, LLC, is entitled to and
did renew its fifty (50) year right-of-way
(“ROW”) across Plaintiff's property for an
additional fifty-year term. The facts are not in issue and
only a question of law regarding renewal of the ROW remains
pending.
I.
Facts
Valley
Electric Association, Inc. is a non-profit electric utility
incorporated in 1965 and based in Pahrump, Nevada. VEA
originated as a consolidation of the Amargosa Valley
Cooperative (“Amargosa”), the Amargosa Power
Company, the Beatty Utility Company, and the White Mountain
Electric Cooperative. Among the assets transferred to VEA
from these constituent entities was a 138 kilovolt
(“kv”) electric transmission line that was built
in 1963 by Amargosa with funds that were made available from
the Rural Electrification Association. The line was built to
import power needed by the local farmers and the community in
the Amargosa Valley to satisfy growing demand and to increase
reliability of service. In 2010, Valley Electric Transmission
Association, LLC was formed to hold VEA's transmission
assets.
The
construction of the transmission line at issue in this case
was funded by a loan under the Rural Electrification Act of
1936 (“REA”), 7 U.S.C. § 31, et.
seq., which was intended to provide electrical service
to rural America and agricultural communities. The statute
provided low cost loans to farmers to enable them to form and
operate cooperatives to build electrical infrastructure to
modernize operations and to obtain low cost power at
wholesale and transmit it to rural and agricultural load
centers.
The
transmission line originates at Western Area Power
Administration's (“WAPA's”) Amargosa
Substation in Henderson, Nevada, and extends 142-miles to
Beatty, Nevada. It interconnects with Nevada Power
Company's transmission system at the Department of
Energy's Jackass Flats Substation.
WAPA is
a federal agency and part of the U.S. Department of Energy
that sells electricity at wholesale to various utilities in
fifteen western states from more than fifty hydroelectric
power plants operated by the U.S. Bureau of Reclamation, U.S.
Army Corps of Engineers, and the International Boundary and
Water Commission. VEA is entitled to approximately thirty
(30) megawatts of low-cost hydroelectric power from WAPA in
the summer and, twenty-seven (27) megawatts of power in the
winter, which is transmitted across the subject transmission
lines for the benefit of VEA's members and customers.
Segments
of the transmission line traverse federal land under the
jurisdiction and control of the Bureau of Land Management
(“BLM”). In 1965, the BLM issued a right-of-way
to Amargosa pursuant to a federal statute, 43 U.S.C. §
961, which permits the Department of Interior the right to
grant right-of-way across federal land to facilitate the
construction of electric transmission, distribution and
communication facilities throughout the United States, and in
particular the American West, where large sections of
property were, and still are, owned by the United States.
Significantly,
in keeping with the public policies favoring the development
of electricity and communications to rural and agricultural
communities in the West, the BLM regulations enacted to
implement 43 U.S.C. § 961 expressly exempted
transmission projects funded and financed through REA from
any obligation to pay rent for any rights-of-way granted
under and pursuant to federal acts. See 43 C.F.R.
§ 2234.1-6.
The BLM
granted Amargosa rights-of-way across federal lands for its
138 kv transmission line for a period of fifty years,
including the ROW at issue. The ROW grant specifically
incorporated into its provisions terms and conditions set
forth in two regulations, 43 C.F.R. § 2234.1 and 43
C.F.R. § 2234.4-1, both published in Circular Number
2161.
43
C.F.R. § 2234.4-1(1)(8) provides that “unless
sooner canceled, the right of way shall expire 50 years from
the date thereof. If, however, within the period of 1 year
prior to the expiration date, the grantee shall file, in
accordance with section 2234.1-2(a), a written application to
renew the right of way, and shall agree to comply with all
the laws and regulations existing at such expiration date
governing the occupancy and use of lands of the United States
for the purpose desired, the right of way may be
renewed.”
43
C.F.R. § 2234.1-2(a) establishes that an applicant may
have its right-of-way renewed provided that it meets five
specific requirements. Specifically, the regulation provides
that a renewal application: (1) shall require no special form
other than it must be typewritten or in legible handwriting;
(2) must identify the authorizing regulation; (3) state that
the right-of-way will continue to be subject to existing law;
and (4) cite the original Act under which the right-of-way
was authorized; and (5) state the primary purpose for which
the right-of-way is used. No. fee is required under the
section to file the request for renewal if the right of way
is an REA project. 43 C.F.R. § 2234.1-2(a)(2).
In
November 1971, the BLM transferred a small portion of the
land over which VEA's ROW is situated to the City of
Henderson, under Land Patent 27-72-0017 (“the Land
Patent”). The Land Patent expressly provided that the
ROW was “[s]ubject to those rights for transmission
line purposes which have been granted to [VEA], its
successors and assigns under the Act of March 4, 1911, 43
U.S.C. § 961 . . . which are due to expire on July 5,
2015.” The Land Patent was recorded in the offices of
the Clark County Recorder on December 19, 1971.
Plaintiff
acquired the property that is the subject of this litigation
from successors in interest to H.M. Greenspun in 2014, who
had acquired the property from the City of Henderson in 1972.
The land acquired by Plaintiff over which the ROW is situated
comprises approximately 1.19 acres of 1, 377 acres of land
over which the entire right-of-way is situated. Plaintiff
admits that ...