Remember how Enbridge says they treat landowners fairly and consistently? Well, we’ve got a story for you.
This is a very important post, one we’ve had in our back pockets for a while as we’ve tried, with no success and no small amount of frustration, to gather some reliable information about the matter. As many of you know, a longstanding concern for landowners on Line 6B has been the widely disparate treatment– from land agent responsiveness to compensation– landowners have received from Enbridge, despite their claims to the contrary. The subject of this post is a perfect illustration of this inconsistent treatment.
The whole thing is hazy and complicated. But the bottom line here is this: if you are a Line 6B landowner, especially along Phase One, Enbridge might owe you some money. As with most things Enbridge-related, it’s all a little convoluted, so we’ll provide both a short version and a long version. At the end, we also have some contact information in case you’d like to contact Enbridge to inquire about this matter– which we encourage you to do.
Short Version
If you are on Phase One and were NOT taken to court in condemnation proceedings, you probably settled with Enbridge in 2012. However, there is a good chance that Enbridge should have come back to you at some point to make an additional payment based on a recalculation of the values you were originally paid. How do you know? Well, you’ll have to ask Enbridge. But one indication is this: did a land agent come back to you in 2013 and write you a check and give you a receipt? Did you receive a 1099 tax form from Enbridge this year for filing your 2013 tax forms? If not, you might be owed some money.
Long Version
Now here’s the more detailed explanation of all of this. Please bear with us while we try to explain it, also bearing in mind that we are neither accountants nor attorneys. We’ll try to be as accurate as we can and hope that we don’t make any major mistakes. Again, it is our understanding that all of this pertains primarily, perhaps only, to Phase One landowners.
When you settled with Enbridge– again, assuming you did not go to court–you most likely received compensation, in the form of a check from Enbridge, for three things: (1) use of the existing easement (what was probably called an “Additional Pipeline Receipt”), (2) for the use of Temporary Work Space and/or Additional Temporary Work Space (TWS and ATWS), and (3) compensation for damages, including the value of trees (or timber) that were removed from your property. The amounts you were paid for the first two of those items were based on fixed values determined by Enbridge. Compensation for damages was determined by your negotiations with a land agent.
Now, the way in which those fixed values (for the easement and TWS) were determined by Enbridge has been in quite a bit of flux from the beginning of this whole project. For instance, when we were first approached, the per acre value that Enbridge was using to calculate the additional pipeline receipt was $6500 per acre. Some time later, we were told that that value had been increased (as if by magic) to $30,000 per acre. Then we learned that our neighbors were receiving even more per acre than we were for virtually identical properties. We’ve heard stories along the line of different values as well, some higher, some lower (what were you paid per acre, we wonder?). These various values have always seemed to us almost completely arbitrary– and certainly not consistent. In fact, during condemnation hearings in Livingston County, Enbridge all but admitted that they had no real basis for determining those values; it’s as if they were pulling numbers out of thin air.
As for the TWS, Enbridge calculated those payments according to the same values, but paid landowners 30% of that value. So, for instance, if they used 1 acre of TWS, valued at $35k/per acre, they would have paid you $10,500 (that’s 30 percent of 35K).
Finally, Enbridge may have paid you for trees. Trees are even more complicated and arbitrary. In some cases, Enbridge simply paid “timber value” for trees. But in many other cases, the value paid for trees was a matter of negotiation– somewhere between “worthless” (to Enbridge) and “invaluable” (to the landowner).
Now, as near as we can piece this together, here is what happened next (again, we’re being as scrupulously accurate as we can be based on information provided to us by various sources): at some point during the condemnation hearings, Enbridge agreed to pay landowners more than the amounts as described above. Specifically, they agreed to pay 125% of the valuation for the additional pipeline receipt, 50% (not 30%) of the per acre value for TWS, and 150% of the timber valuation. It is our understanding that, at the point, Enbridge decided that all landowners would be similarly compensated– both those who had not yet settled and those who had already been paid.
So here’s what all of this would look like. To make things simple, we’ll use the simplest values possible. (Please note that these numbers are purely fictional and unusually high; there is probably no one with a full acre of easement or TWS.) Let’s say Enbridge had 1 acre of easement on Joe and Jane Jenkins’ property, used 1 acre of TWS, and paid them $1000 for trees (timber). Here’s what the Jenkinses would have received– say, in the summer or fall of 2012) based on those original values:
$35,000 (for additional pipeline) + $10,500 (for TWS) + $1000 (for timber)= $46,500
However, after those condemnation hearings, Enbridge should have come back to the Jenkinses to pay them for the increases stated above. That would look like this:
125% of additional pipeline= $43,750
50% of TWS= $17,500
150% of timber= $1500
Total= $62,750
Now, subtract from that the $46,500 you were already paid and the Jenkinses should have received a check from Enbridge– probably by surprise some time last year– for $19,250.
Again, based on what we were told by our land agent, ALL landowners were to be compensated according to these rates. If you are on Phase Two, these adjusted/increased rates should have been built into your original payments. Check your receipt: were you paid 50% of the per acre value for TWS? By contrast, many Phase One landowners– those who were paid BEFORE these increases– should have received a surprise visit from a land agent to pay out the difference.
However, we know for certain this has not taken place. We know that some people in our neighborhood (we’re on Phase One) have been paid this difference and some have not. Why? We have no clue whatsoever. Partly, it may be because Enbridge has been flying by the seat of its pants since the beginning of this project. More likely, it’s because Enbridge’s land agents are, by turns, overworked, uncaring, hapless, or just not very well trained or informed by Enbridge’s not-terribly-efficient-or-effective land agent supervisors.
This is a matter of basic fairness and decency. We encourage you to contact your land agent– if, that is, you have any idea who your land agent currently is– to find out whether you are due this additional compensation. If we are able to learn anything more about this– though, honestly, we don’t know who is in charge or who might be willing to respond to our inquiries– we will certainly let you know. In the meantime, if you don’t know who your land agent is currently, you can try this number listed on Enbridge’s website for Line 6B landowners:
866-410-4356
Or, if you prefer email, you can try this address: