Readers Speak: Another view of high-voltage transmission lines

By Kevin Pearce

The recently completed report “High Voltage Transmission Lines and Montana Real Estate Values” by James A. Chalmers, Ph.D., was carried out under contract to Northwestern Energy during 2010 and 2011. Northwestern Energy is proposing to construct a 500 kilovolt High Voltage Transmission Line (HVTL) from Townsend southerly some 450 to 500 miles across southwestern Montana to near Twin Falls, Idaho to deliver Montana-generated power to possible users in the western U.S. This proposed line is identified as the Mountain States Transmission Intertie. The Chalmers report was commissioned by NorthWestern Energy to be used to study the effects of HVTL on real estate values as an aid in the process of planning, permitting, and siting the proposed MSTI power line.

The Chalmers report considered the effect of a HVTL on real estate values by studying the approximately 650-mile route of a 500 kilovolt line extending from Colstrip, westerly across Montana to the Idaho/Montana border. This power line was constructed in the early 1980s. The report, however, utilized sales data from “arms length” transactions that occurred in the year 2000 through 2010 on properties within 500 feet centerline of the 500 kilovolt line.

Seven different property types were identified in the Chalmers report across Montana that was analyzed through paired-sales and before and after analysis. This report leads the readers to a conclusion that there is very little, to no effect on real estate values due to HVTLs. This might be expected since this report studied the effects of the power lines approximately 30 years after construction of the power line. After 30 years, the lands affected by the power lines have healed and become a part of the accepted landscape. Also, for the majority of the study period (2000-2010), the Montana real estate market was appreciating rapidly and in many areas, a buying frenzy was occurring which left few substitute and alternative properties that forced buyers to accept properties containing HVTLs (when in most other markets they would not consider) and purchase them at or near par as compared to those without HVTLs.

While I do not necessarily disagree with the results of this report within the context of the scope of work and parameters of the project, I do not believe that this report accurately depicts the effects of HVTLs on real estate values at the time of planning, permitting, construction, or immediately after construction of a HVTL. This report is not relevant or applicable to the proposed MSTI project and its effect on current real estate values.

Studies of market data considering the effects of fire, flood, and other occurrences indicate that there is a considerable negative affect on land values at the time of and immediately after their occurrence. To accurately depict the true effects of HVTLs on real estate values at the time of a new HVTL’s permitting, siting, and construction, a study of sales data consistent and contemporaneously with the planning, construction and immediately following construction should be utilized rather than transactions occurring 30 years after construction.

Kevin T. Pearce is an Accredited Rural Appraiser and Montana and Wyoming Certified General Appraiser. He and his wife Tracey own New Frontier Ranches in Twin Bridges.

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