International Right of Way Association Education Conference, Seattle, WA

1. New York Forestry Practices from a Utility Attorney’s Perspective International Right of Way Association Education Conference, Seattle, WA Vegetation Management: Compatibility vs. Reliability Wed., June 13, 2012 8:00 am – 9:30am David C. Hatch, Esq.

2. David C. Hatch • Background • Consultant – Utilities, Real Estate • National Grid Distribution Rights • Attorney • Licensed Real Estate Broker • Master of Corporate Real Estate

4. Agenda • I. Utility Tariffs and Tree Trimming • II. Tree Claims • III. Utility Easements • IV. Tree Trimming and the Public • V. Open Discussion/Questions

6. I. Utility Tariffs and Tree Trimming • What are Utility Tariffs? • Contract between the customer and utility • Approved by regulator • Terms and conditions of service • Rights and responsibilities • What does the tariff say about tree trimming??

8. I. Utility Tariffs and Tree Trimming • What good are utility tariffs? • Access to customer property to “maintain” facilities • Maintenance can be argued to include tree trimming

9. Niagara Mohawk Electric Tariff • 13.1 In accepting service, customer grants to identified Company employees and agents the right of access to customer premises, or any building or other location supplied with service by the utility, at all reasonable times for such purposes as the reading of meters, inspection, and examination of meters, wiring and appliances, or installing, operating, maintaining, disconnecting and removing any or all property belonging to the Company. Company may discontinue service if access to its meters or other equipment is unreasonably refused, or if access is obstructed or hazardous provided Company has complied with applicable provisions of 16 NYCRR, Parts 11, 12, and 13.

10. I. Utility Tariffs and Tree Trimming • Can we improve our tariffs in regards to tree trimming? • Yes! Ironically street lighting tariff provides explicit right to trim and remove trees. “As a condition of receiving service hereunder, Customer authorized Company, insofar as it lawfully may, to trim, cut, remove, and to keep trimmed, cut and removed any and all trees and other obstructions which, in the opinion of the Company, interfere with or may tend to interfere with the operation and maintenance of service hereunder.”

11. I. Utility and Tariffs and Tree Trimming • Limitations of Utility Tariffs • Only apply to customers • Does not apply to non-customers • Does not apply to facilities NOT providing customer with electric service • Without specific language, courts can limit the application of tariff language to tree trimming

13. II. Tree Claims • New York Damage Statute • § 861 – Real Property Actions and Proceedings Law (see handout) • Attempts to provide measuring standard for damages • Potential for very high damages • No definition of “tree” • “Stumpage” very open ended • May include restoration costs • How to evaluate a claim

14. II. Tree Claims • Handling Tree Claims • Many departments can be involved: • Forestry • Legal • ROW • Claims • Security • Customer Relations • Regulatory Compliance (QRS) • Proposed Procedure for Investigating and Resolving Tree-Trimming/Trespass Complaints/Claims (see handout) • Issues Related to Tree Claims (see handout)

15. II. Tree Claims • Settlement • Establish trust • Research rights • Good damage estimates • Stay involved throughout settlement process (even if in trial)

16. II. Tree Claims – Case Studies • Claim #1 – Rural Community Farmer • Cutting without easement after refusal • Sizable payments • Restricted Cutting Rights • Claim #2 – Indemnification Defense by Contractor • Right of Way not involved initially in claim • Experienced counsel, but limited utility knowledge • During trial, ROW was finally consulted • ROW advised on utility practices and tariffs • Ultimately matter was settled without ROW involvement in settlement discussions • No easement secured

18. III. Utility Easements • Language can be general… “With the right to maintain and manage said right of way to preserve the environment and to trim, cut and remove all trees, limbs, brush or other obstructions either mechanically or by use of approved herbicides within said strip of land and any trees outside of said area which, in the opinion of the Company, may be likely to fall upon said lines or to interfere with the satisfactory operation thereof.”

19. III. Utility Easements • Or language can be very specific… “From time to time, without further payment therefore, clear and keep cleared, by physical, chemical, or other means, the Easement area of any and all trees, vegetation, aboveground or belowground structures, improvements, or other obstructions and trim and/or remove other trees and vegetation adjacent to the Easement Area that, in the opinion of the Grantee, may interfere with the construction, operation, and maintenance of the Facilities. The first clearing may be for less than the full width and may be widened from time to time to the full width;”

20. III. Utility Easements • Easement Negotiations - balance • Be clear and concise to utilities rights • Don’t overreach • Stay clear of “chemical” language if possible • Remember trees are sensitive issue for landowner • Limitations • Utility has no presumed right without easement • An electric line, without an easement to back it up, is a trespass with no trimming rights, no matter how long the line has been there

21. III. Utility Easements • Proposed tree trimming language “From time to time, without further payment therefore, clear and keep cleared, that portion of Grantor’s Land described in Section 3 below (the “Easement Area”) of any and all trees, limbs, branches, roots, or vegetation and trim and remove danger trees adjacent to the Easement Area that, in the opinion of the Grantee may jeopardize the integrity of the Grantees electric distribution facilities; Grantee shall follow accepted arborcultural standards which may require Grantor to make pruning cuts closer to the tree stems, outside the 10 foot easement area.” Section 3 … “said easement shall be a strip of land measured ten (10) feet from the outermost electric conductor on each side of the line”

22. III. Utility Easements – Statutory Provisions and Case law • Highway Occupation by Franchise Right • Typically include a municipal consent (not right) to occupy highways • Subject to notification requirements, and still require permits • Where adjoining landowner’s property runs to the center of the highway, an easement is still required for customer projects • The road exists as an easement only • Property owner could require National Grid to relocate or remove our facilities – at our expense • Abandonment or relocation of the road could leave facilities with no valid occupation rights • In New York it is presumed that the owner owns to the center unless the deed clearly states otherwise • Most Town and many County Roads are owned in fee by the adjoining owners

23. III. Utility Easements – Statutory Provisions and Case law • Rights and Constructive Notice • Misconception • Overhead utility easements require recording – They DO NOT! • Palone v. New York Telephone Company, 34AD2d1091 (1970)

24. III. Utility Easements – Statutory Provisions and Case law • Utility Rights and Constructive Notice • New York Law related to overhead facilities • Landowners are on constructive notice of utility rights if overhead facilities are in existence and open and visible • Recording is not required for an overhead easement to be valid (but there are a number of benefits in doing so) • It is necessary for utility to produce an actual, original, executed easement for our rights to be valid. • Underground easements must be recorded to be valid against a subsequent owner (a bona fide purchase for value)

25. III. Utility Easements – Statutory Provisions and Case law • Undefined Easements • Old utility easements (fairly common) • No exhibit showing location of facility to be installed • Nor language defining installation • Onthank v. Luke S. & M.S.R. Co. • Grantor– 1st right to locate • Grantee– 2nd right to locate • Address an old unclaimed easement: • Replace with new • Issue “comfort letter” • Execute a title affidavit • Affirmative title insurance

26. III. Utility Easements – Statutory Provisions and Case law • Adverse Possession • Misconception: utility facilities installed without easement can be “cured” by adverse possession • Prohibited by Section 261 of the New York Real Property Law • Tariff rights can be asserted with customers– as a term of service customer must give permission to install facility on their property. • Section 543 of the New York Real Property Actions and Proceedings offers some relief to landowners

28. IV. Tree Trimming and the Public • Recommendations for customer communications • Customer contact is critical to avoid tree problems • Customer understanding of what needs to be done and why is important • Personal contact always best, hang tags if not • Try to contact absentee owners • PSC has active roll through QRS/SRS process • All applicable departments should review Information on Company Website, customer notification materials, or other publications BEFORE published

29. Open Discussion and Questions