Lansink Appraisals and Consulting

Real Estate Appraisers & Consultants A Division of Wellington Realty Group Inc.

Case Studies Power Corridors

Diminution in Price

regarding 230kV and a 500kV* Industrial High Voltage Electrical Power Transmission Corridors Located in Ontario, Canada *(1.0 Kilovolt (kV) = 1000 volts)
Estimated Diminution in Price and / or Estimated Injurious Affection, if any.

1

Report Author

Ben Lansink, ACCI, P. App, MRICS
ben@lansink.ca    519-645-0750

The study that follows is not a static document. It will continue to evolve and be edited as new research and Price evidence is collected.

Methodology to Measure Injurious Affection

To estimate the detrimental effect, harm or injurious affection to a property, it is necessary to consider the following:

  1. Has the property been harmed or injured by the power corridor?
  2. Is there obsolescence resulting in value diminution (incurable by the owner)?
  3. Is there a reduction in market value?
  4. Is there an improvement or set-off that has increased the market value?

Value diminution, if any, is best measured by an analysis of the actions of willing buyers and willing sellers functioning in the open market. Does the construction and use of a high-voltage power transmission corridor on all or part of a property cause a diminution in value? Price is an historic fact, value is an opinion.

Value diminution, if any, is best measured by an analysis of the actions of willing buyers and willing sellers functioning in the open market. Does the construction and use of a high-voltage power transmission corridor on all or part of a property cause a diminution in value? Price is an historic fact, value is an opinion.

Appraisers utilize three methods to estimate value diminution:

  1. Case (Market) Study Method: The most reliable method(This is the method used by Lansink in this report) The most reliable evidence is represented by Market Case Studies, or individual property value loss, if any, directly linked to the cause of the Price loss. The purchase of land for an Industrial High Voltage Electrical Power Transmission Corridor use, the taking of the required easement, and then the re-sale of the property provides the best evidence of diminution in Price, hence value. Minimal judgement opinion of an appraiser is required.
  2. Paired Sales Method: The second most reliable method (This method has been used by HONI’s appraisers).The second most reliable basis for demonstrating “detrimental conditions” valuation opinion, when one does not have enough factual background for a Case Study, is the use of “paired sales.” That is, the comparison of one sale near an Industrial High Voltage Electrical Power Transmission Corridor to one sale far away in order to isolate the impact of the corridor on value. The appraiser must make subjective adjustments with the result that the Paired Sales Method is much less reliable than the Case Study Method.
  3. Regression Analysis Method: The least reliable method. The Appraisal Institute (US) recognizes this technique as the third and least reliable method, which should only be used in the absence of case study or paired sale data. This type of study is very dependent on subjective variables inserted by the author of the report.

Not with standing that the Market Study is a good indication of diminution in value, it is not perfect. There was variation in the diminution in value among properties with similar distances from the corridor. It is reasonable to conclude that there are many unknown variations, including buyer motivation, health issues, loss of control of land uses, and loss of efficiencies that may account for these variations.

It is impossible to account for all of these other factors, some of which may be specific to individual buyers. This Study nonetheless demonstrates a consistent and strong correlation between closeness to the transmission corridors and diminution in Price.

The Market Study Method, despite some of the variance in the data, is still the best method available. The study looked at elements of comparison: the differences in vacant land or building improved land; whether it was next to an existing corridor or not; the distance in feet from the corridor to a building; and whether the corridor traversed the land diagonally, along its property line, or through the center of the land.

The Study properties were affected by a 1970s-1980s 500kV Industrial High Voltage Electrical Power Transmission Corridor. In some areas there was an existing 230kV corridor that had the 500kV corridor constructed next to it.

Based on the data and patterns in the study, a Distant Grid was established as a reasonable estimate of the average diminution in value based on the distance between the corridor and the buildings.

Case Study – Hydro One vs. Lazar

The Case Study Method was used to support an injurious affection claim before the Ontario Municipal Board, File LC010005, June 11, 2002 – Hydro One v. Lazar. The Ontario Municipal Board accepted the Case Study Method and was satisfied that the erection of the towers would have an injurious effect on the value of the lands.

In the 1990s Hydro One intended to increase the width of an existing 100-foot wide hydro power corridor easement in the Municipality of Clearview by 20 feet, replacing the existing 35-foot high wooden poles with 130-foot high metal towers, and replacing the existing 44kV lines with 230kV lines.

The Ontario Municipal Board decided that

the injurious affection] would be in the range of 30% to 54%

based on
open market evidence gathered and analyzed by Ben Lansink.

In Lazar, the Ontario Municipal Board concluded -30 percent injurious affection and the decision was not appealed by Hydro One.

Market-Based Case Study – Effects of a Visible Transmission Corridor

The first part of this study is a market-based case study pertaining to the effects of visible Industrial High Voltage Electrical Power Transmission Corridor. Ontario Hydro constructed, 1970s-1980s, a 500kV transmission line and corridor from Bruce to Milton.

Ontario Hydro purchased numerous properties on the open market and resold the properties on the open market after creating an easement for the construction, use, and maintenance – all in perpetuity – of the additionally required strip of land to accommodate the 500kV hydro power transmission line.

The second part of this study is a market-based case study pertaining to the effect of widening an existing hydro power corridor in the 1990s.

Hydro One widened an existing 100-foot wide easement by 20 feet and constructed a second corridor of wooden poles and wires next to the existing corridor of wooden poles and wires.

Case Study Findings

In Groups A and B, there was an existing hydro corridor next to the new corridor. Notwithstanding the existing corridor, the value diminution ranged from -4.76 to 54.23 percent, while in Group C, with no existing corridor, the value diminution ranged from a low of -10.5 percent to a high of – 46.65 percent due to the new corridor. In the Steel Towers – Clearview case, existing wooden poles were replaced with new wooden poles and there was still a value diminution.

Case Study – Open Market Sales Minimum Diminution in Value Maximum Diminution in Value Average Diminution in Value (
Bruce to Milton 1977 to 1986
Group A: Vacant Land, Existing Hydro Power Corridor -4.76% -54.23% -27.80%
Group B: Land with Dwelling/Building, Existing Hydro Power Corridor, distance from the towers varied from 279 feet to 2,096 feet. -6.29% -53.50% -22.57%
Group C: Land with Building(s), New Hydro Power Corridor, distance from the towers varied from 123 feet to 1,863 feet -10.50% -46.65% -36.39%
Steel Towers – Clearview – 1990s, existing wooden towers replaced by steel towers -30.65% -56.76% -43.71%

Injurious affection varied with corridor distance to buildings which suggests other factors were at play. Corridor distance results illustrate the difficulties in estimating injurious affection derived from the imperfect market place. Another factor is the location of a corridor, at the rear vs. diagonally. In the case study, Hydro One did not expropriate ingress/egress but does so now.

Generally, the greater the corridor distance to a building, the lower the value diminution. This statement is confirmed by a decision of the Assessment Review Board (ARB) February 19, 2010, released May 11, 2010 (ARB File WR85716). It is quoted in part:

The subject property is 1.04 acres with a one and a half storey, single-family home, built 1946… The easement’s edge is 20 feet from their house and the easement itself affects approximately half of their 1.04 acres. They cannot build on or alter the land that is subject to the easement… Based on the Lansink case study, the Board finds that 54% more suitably reflects the diminution of value as a result of this particular easement

Injurious Affection – Distance to Corridor

The Distance Grid on the right was created to show how the distance from a building to a corridor affects diminution in value, injurious affection.

Hydro One Networks Inc. (HONI) has a Voluntary Buyout Policy that can apply if the primary residence is within 75 meters or 246 feet of the corridor. Using this HONI policy and the -54 percent accepted by the Assessment Review Board, the starting point for injurious affection is -54 percent.

The market data analyzed suggest that the percentages shown in the Distance Grid are reasonable.

The Distance Chart can be applied as an objective starting point to measure distance injurious affection. It is the most significant factor in an analysis; however, it is not the only factor to consider.

In addition to the distance injurious affection obtained from the Distance Grid, other injurious affection factors, if any, that pertain to a specific subject property must be considered on the bases of that factor being overall inferior, overall similar, or overall superior.

Summary of Findings

When confronted with an Industrial High Voltage Electrical Power Transmission Corridor traversing a property, potential buyers could view the transmission corridor as aesthetically “ugly”; potentially hazardous to their health and their animals’ health; disruptive to the rural lifestyle; an increase in liability; and causing the agriculture land use to be less efficient while the owner continues to pay realty taxes on the land subject to the corridor easement (unless the expropriation was the Fee Simple).

The main concerns are:

  1. Human health issues : Property owners are concerned about the effect of electric and magnet fields on the health and welfare of their families.
  2. Animal health issues resulting from air borne disease, electric magnetic fields, and stray voltage. Interviews with twenty farmers confirmed animal health concerns. Cows and goats have milking problems when close to a corridor. An Ontario horse farmer stated that a horse in foal in pasture next to an existing 500 kV corridor had an 85 to 95 per cent chance of still birth but away from the corridor, the birth rate was normal.

    Dr. Sue Burlatschenko, B.Sc., Dipl. ABVP-SHAP states …buildings housing animals must be constructed the furthest distance possible from a road towards the rear of the land; however, this is not possible if there is an Industrial High Voltage Electrical Power Transmission Corridor at the rear

    Dr. Sue Burlatschenko also states: A decision to move livestock out of the corridor area and re-siting them away from overhead power lines may result in decreasing the distance between neighbouring barns and/or pastured livestock. This in itself can result in an increased risk of disease transmission, either through direct animal-to-animal contact (fence line) or airborne transmission

  3. Loss of control of land use. Buildings and other structures and growing tree crops are not possible in the corridor. The non-corridor lands’ “right to build” is reduced or eliminated due to air borne disease, electric magnetic fields, and stray voltage.
  4. Loss of efficiencies. Steel towers interfere with the efficient operation of farm equipment. The towers are disruptive and time consuming; there is a loss of crop yields; trees cannot be grown; land owners’ liability increases; and land owners must continue to pay realty taxes on the tower easement lands.

Although concerns can be real or perceived; all result in a diminution in value.

Lazar v. Hydro One, Ontario Municipal Board (OMB)

In Lazar v. Hydro One, Ontario Municipal Board (OMB) File LC010005, June 11, 2002, OMB Decision No. 0781, the issue was to determine if there was “injurious affection” caused by the widening of an easement and the erection of a 130-foot metal tower on the easement.

The Lazar property is within the Township of Clearview, now the Municipality of Clearview.

The appraiser for Hydro One claimed that the towers had no impact on the value of the lands; however, the appraiser for Mr. Lazar conducted a thorough market analysis that supported a negative impact caused by the towers.

The Ontario Municipal Board was satisfied that the erection of the towers would have an injurious effect on the value of the lands. The OMB decided that

the injurious affection] would be in the range of 30% to 54%

based on
open market evidence gathered and analyzed by Ben Lansink.

In Lazar, the Ontario Municipal Board concluded -30 percent injurious affection and the decision was not appealed by Hydro One.

Ontario Municipal Board (OMB) Decision

Ontario Municipal Board (OMB) Decision Ontario Municipal Board (OMB) Decision Ontario Municipal Board (OMB) Decision

Market Based Case Study

Authored by Ben Lansink and Ward Lansink December 2010,
Revised and Updated February-March-April 2013 by Ben Lansink.
Supporting Book of Authorities dated February–March 2013 by Ben Lansink

Market Study: Introduction

Opinions about power transmission corridors – and their effect on property values – have been discussed for many years. Most people have an opinion regarding hydro power transmission corridors and their effect on themselves, their surroundings, and society. Hydro power transmission corridors are a necessity of modern age.

The Final Environmental Impact Statement, Arrowhead—Weston Electric Transmission Line Project states:

A power transmission corridor may either increase or decrease an individual’s perception of a property’s worth. This perception is indicative of how much one is willing to pay for the property (the fair market value).
Value of property traversed by (or located close by) a power transmission corridor may decrease for a variety of reasons, including:
  • Concern of fear of health effects from electric magnetic fields (EMF).
  • The potential noise and visual unattractiveness of the transmission line.
  • Potential interference with farming operations and foreclosure of present or future land uses.
On properties that are being farmed, installation of a power transmission corridor can remove land from production, interfere with operation of equipment, create safety hazards, and foreclose the opportunity to consolidate farmlands or develop the land for another use, such as a large scale livestock operation and the inherent airborne disease issues.

Are hydro power transmission corridors safe? Are there health impacts related to hydro power transmission corridors? Would someone choose to live close to a hydro power transmission corridor? If a hydro power transmission corridor crossed a property, would that property have the same market value as without the power corridor? Are crops under a hydro power transmission line affected by the power corridor? Does a hydro power transmission corridor cause an increase or decrease in property value? There may be endless questions from a potential buyer and/or seller when dealing with a property affected by a hydro power transmission corridor. When considering property value, these questions are difficult to quantify; however, the overall impact of a hydro power transmission corridor can be analyzed within the actions of an open real estate market

This market based case study endeavors to isolate any loss in value caused by a hydro power transmission corridor. The construction and use of a hydro power transmission corridor is an event over which the property owner has no control. Each example in this study illustrates some type of ‘harm’ or ‘injurious affection’ that can be caused to a real property as a result of a hydro power transmission corridor. The harm may be real or perceived and it may be different for each property and to each property seller and buyer.

This study analyzes specific examples that occurred within the open real estate market value in order to isolate the impact on property value caused by a hydro power transmission corridor.

Market Study: Effects of a Visible Power Transmission Corridor Bruce to Milton 1977 to 1986

Background

In the late 1970s and early 1980s, an existing hydro power transmission corridor stretched easterly and southerly from the Bruce Transformer Station, Lake Huron, Ontario, Canada. The existing power corridor consisted of a 230kV transmission line that ran easterly from the Bruce Transformer Station past the Colbeck Junction in the Municipality of East Luther Grand Valley and a 500kV transmission line that ran easterly from Bruce Transformer Station and turned south at the Willow Creek Jet Junction in Bruce Township.

In this era, Ontario Hydro constructed a new (second) 500kV transmission line and corridor from Bruce to Milton to serve the greater Toronto area. This was accomplished by purchasing or expropriating easements over privately owned land.

The new 500kV hydro power corridor parallels portions of the existing 230kV and the existing 500kV power transmission corridor. The expansion of the corridor consists of a strip of land about 190 feet wide (widths vary) to house the new 500kV hydro power transmission line and the corridor extends from the Bruce Transformer Station to Milton.

Environmental Assessment

Between 1977 to 1986, in accordance with the corridor expansion plan, Ontario Hydro purchased numerous properties (on the open market) and resold the properties (on the open market) after creating an easement for the construction, use, and maintenance – all in perpetuity – of the additionally required strip of land to house the new 500kV hydro power transmission line.

Market Study

To estimate any diminution in value and the resulting injurious affection due to a hydro power corridor over 60 properties were analyzed, of which 37 properties are detailed in this study. All but two of the properties were purchased and sold by Ontario Hydro in the 1977 to 1983 era. The remaining two properties were purchased and sold by Ontario Hydro in the 1990s.

It has been argued that the Ontario Hydro purchases should not be considered open market sales as they do not meet the willing seller/willing buyer, open market concept. It may be considered that the purchases were made under a direct or an implied threat of expropriation, and theoretically at least, are not free and voluntary. However, when purchasing the property, Ontario Hydro received and accepted a deed signed by a grantor (seller). In each deed analyzed in this study, the following remarks and explanations regarding the market value of the lands and other entitlements (compensation) were stated:

‘…total consideration $X represents Ontario Hydro’s opinion of the market value of the lands; and $Y represents entitlements which would have been paid under The Expropriations Act had the property been expropriated by Ontario Hydro.

The consideration that Ontario Hydro paid for the land in the transactions analyzed in this study is stated to be the “market value of the lands” and therefore all transactions analyzed in this study represent fair market value.

An example of part of a typical deed Affidavit is shown below:

Once Ontario Hydro took the land requirements for the new 500kV hydro power transmission line, it marketed and sold the lands (via the open market), providing an Affidavit stating the ‘Total Consideration.’ For each property purchase analyzed in this study, Ontario Hydro signed a deed that included an Affidavit stating the ‘Total Consideration’ that ‘represents Ontario Hydro’s opinion of the market value of the lands’.

To determine the diminution in value (if any) after the easement, each property sale and resale was analyzed. The Ontario Hydro purchase price (before) was compared to the Ontario Hydro sale price (after). With regards to marketing, it is believed the majority of the properties were sold by a Realtor® and had been exposed to the open market. It seems logical that a meeting of the minds has occurred when a purchaser acquires rights for an advertised price and that such a sale constitutes competent market evidence. Also, Ontario Hydro is a public corporation and as such it must obtain fair market value for any property it sells. It does not give an ‘equity gift’ to a stranger. This further supports the assumption that all transactions analyzed in this study represent “fair market value”. Also, during the sale and resale period, it is understood that no other changes were made to the properties detailed in this study.

The properties studied were grouped into the following example groups:

  • Example Group A Vacant Land, Existing Hydro Power Corridor, Visible Easement
  • Example Group B Land with Building(s), Existing Hydro Power Corridor, Visible Easement
  • Example Group C Land with Building(s), New Hydro Power Corridor, Visible Easement

The following map indicates the study areas.

Below is an example of the calculations performed for each property sale and resale:

Sale Date 1 (Before) Month Day 1977
Sale Price 1 per Acre $10,000
Sale Date 2 (After) Month Day 1979
Sale Price 2 per Acre $7,000
Adjustment for Time from Sale Date 1 to Sale Date 2
Average Price *: Sale Date 1 (1977) $39,218
Average Price *: Sale Date 2 (1979) $37,535
% Change     from: Average Price (Sale Date 1) to: Average Price (Sale Date 2)         ——————————- A 44.99%
Sale Price 1         ——————————- B $126,000
$ Adjustment         ——————————- A x B = C $56,690
ADJUSTED Sale Price 1         ——————————- B + C $182,690
Conclusion
The property should have sold for… (adjusted for time) $9,571 per Acre
The property sold for… $7,000 per Acre
Monetary Loss -$2,571
Percentage Loss (Diminution in Value) -26.86%
* Note: Average price includes sold residential property and does not include sold commercial or industrial real property. The average price used to adjust for time is provided by the Canadian Real Estate Association (based on the example property board-specific statistics).

Example Group A
Vacant Land, Existing Hydro Power Corridor, Visible Easement

Example Group A illustrates the effect of a hydro power corridor on the property value of vacant land located along an existing power corridor.

Summary of Findings

Example # Lot Concession Vacant or Building Existing Corridor Feet to Building Diminution in Value
1A 5 2 NDR Vacant 230kV N/A -10.60%
2A 13 2 NDR Vacant 230kV N/A -4.76%
3A 6 11 Vacant 230kV N/A -20.40%
4A 4 12 Vacant 230kV N/A -25.22%
*5A 27 w1/2 4 Vacant No * N/A -51.43%
6A 7 1 Vacant 230kV N/A -19.43%
7A 20 11 Vacant 230kV N/A -37.96%
8A 18 W1/2 12 Vacant 230kV N/A -28.07%
9A 19 12 Vacant 230kV N/A -54.23%
10A 16 2 Vacant 230kV N/A -28.35%
11A 17 2 Vacant 230kV N/A -28.48%
12A 16, 17 14, 13 Vacant 230kV N/A -24.65%
Average Loss (Diminution in Value) -27.80%
Median Loss (Diminution in Value) -26.65%
Min Loss (Diminution in Value) -4.76%
Max Loss (Diminution in Value) -54.23%
* Note: Example 5A was not next to an existing hydro power corridor.

Example Group B
Land with Buildings, Existing Hydro Power Corridor, Visible Easement

Example Group B illustrates the effect of a hydro power corridor on the property value of building-improved land located along an existing power corridor.

Summary of Findings

Example # Lot Concession Vacant or Building Existing Corridor Feet to Building Diminution in Value
1B 45 E1/2 2 SDR Dwelling 230kV 789 -29.09%
2B 2,3,4 3 NDR Dwelling 230kV 851 -31.55%
3B 50 3 NDR Dwelling 230kV 666 -16.45%
4B 52, 53 3 SDR Dwelling 230kV 1,378 -16.80%
5B 31, 32 6 Dwelling 230kV 378 -17.57%
6B 8 11 Dwelling 230kV 500 -8.77%
7B 1,2,3 12 Dwelling 230kV 981 -12.87%
8B 22, 23 11 Dwelling 230kV 1,681 -27.91%
9B 23 11 Dwelling 230kV 1,356 -19.67%
10B 24 3 Dwelling 230kV 1,768 -11.78%
11B 26, 27 10 Building 230kV 279 -46.54%
12B 22 10, 11 Dwelling 230kV 1,289 -6.29%
13B 20 12 Dwelling 230kV 480 -23.21%
14B 3, 4 15 Dwelling 230kV 797 -9.97%
15B 18, 19 1 Dwelling 230kV 2,096 -22.04%
16B 15 2 Dwelling 230kV 1,062 -18.26%
17B 18 2 Building 230kV 1,826 -16.67%
18B 13 3 Dwelling 230kV 1,143 -46.50%
19B 2,3,4 6 Dwelling 230kV 1,010 -15.98%
20B 15 14 Building 230kV 1,676 -53.50%
Average Loss (Diminution in Value) -22.57%
Median Loss (Diminution in Value) -17.92%
Minimum Loss (Diminution in Value) -6.29%
Maximum Loss (Diminution in Value) -53.50%

Example Group C
Land with Buildings, New Hydro Power Corridor, Visible Easement

Example Group C illustrates the effect of a new hydro power corridor on the property value of building-improved land.

Illustration

Summary of Findings

Example # Lot Concession Vacant or Building Existing Corridor Feet to Building Diminution in Value
1C 6 11 Dwelling No 1,863 -10.50%
2C 26, 27 5 Dwelling No 410 -32.18%
3C 15 4 Dwelling No 542 -46.38%
4C 16 4 Building No 666 -46.65%
5C 16 5 Dwelling No 123 -46.26%
Average Loss (Diminution in Value) -36.39%
Median Loss (Diminution in Value) -46.26%
Minimum Loss (Diminution in Value) -10.50%
Maximum Loss (Diminution in Value) -46.65%
Note: The feet to building (distance) from the building/dwelling to the corridor were scaled.

Effects of a Visible Hydro Power Corridor Easement:
Steel Towers to replace Wooden Poles – 1990s

This section of the study illustrates the effect on property value when an existing hydro power corridor is widened and higher towers are installed.

The Township of Clearview is located approximately 100 kilometers northwest of Toronto and consists of the west portion of the County of Simcoe. The area includes Collingwood, the Blue Mountain ski resorts, golf destinations, and Wasaga Beach on the shore of Georgian Bay.

During the 1990s, Hydro One intended to increase the width of an existing 100-foot wide hydro power corridor easement by 20 feet and replace the existing 35-foot high wooden poles with 130-foot high metal towers. The existing 100-foot wide easement has wooden poles and anchors, with guys, braces, and string wires housing a 44kV line and a 115kV line. The new towers will house a 230kV line. Due to the proximity of the Collingwood Airport, some of the transmission lines may need to be lit by red aircraft warning lights.

Hydro One purchased numerous properties (on the open market) and resold the properties (on the open market) after creating an easement for the construction, use, and maintenance – all in perpetuity – of the additionally required strip of land to house the 230kV hydro power transmission line.

To determine the diminution in value (if any) after the easement, each property sale and resale was analyzed. The Hydro One purchase price (before) was compared to the Hydro One sale price (after).

Summary of Findings

Example # Lot Vacant or Building Existing Corridor Proposed Corridor Diminution in Value
1D 1270 Fairgrounds Road Building 44kV and 115kV 230kV -56.76%
2D 1636 Centre Line Road Building 44kV and 115kV 230kV -30.65%
Average Loss (Diminution in Value) -43.71%
Median Loss (Diminution in Value) -43.71%
Minimum Loss (Diminution in Value) -30.65%
Maximum Loss (Diminution in Value) -56.76%

Market Study: Conclusion, Lazar Decision

Market evidence suggests that properties, vacant or building improved, will be harmed or injured by the construction, use, and maintenance of a hydro power corridor. Diminution in value to a property is a result of buyer resistance which may be real or perceived.

The construction of a hydro power corridor carrying high voltage electricity across a tract of land creates apprehension in the general public, which makes the property less desirable and thus diminishes the market value of the property. The continuing scientific uncertainty over the adverse health consequences of electric and magnetic fields only serves to perpetuate the debilitating effect of power lines on property values.

A real estate appraiser is not expert at electric and magnetic fields and cannot conclude that there are health risks associated with living close to power transmission corridors. A real estate appraiser can only analyze the actions of willing sellers and willing buyers acting in the open market place, sellers and buyers who may believe or who may perceive health risks and other consequences associated with power transmission corridors.

Example Minimum Diminution in Value Maximum Diminution in Value Average Diminution in Value
Bruce to Milton 1977 to 1986
Example Group A:
Vacant Land, Existing Hydro Power Corridor
-4.76% -54.23% -27.80%
Example Group B:
Land with Building(s), Existing Hydro Power Corridor
-6.29% -53.50% -22.57%
Example Group C:
Land with Building(s), New Hydro Power Corridor
-10.50% -46.65% -36.39%
Steel Towers to replace Wooden Poles -30.65% -56.76% -43.71%
Lazar v. Hydro One, Ontario Municipal Board (OMB) -30.00% -54.00% -30.00%

Based upon real or perceived fear and other consequences of the construction, use, and maintenance of a power corridor in the market place, this analysis concludes that there is a diminution in value to a property that is subject to a visible easement such as a power transmission corridor.

ARB: Palcic/Morrison vs. Municipal Property Assessment Corporation

Hydro Corridor vs. Telecommunication Tower/Wind Turbine

The erection of hydro power transmission towers, telecommunication towers, and wind turbines require the use of lands owned by other parties. This study investigates the effect on the property owner.

Hydro One Networks Inc. (HONI) expropriates land for the use of a hydro power transmission corridor. A transmission corridor generally consists of large overhead high-voltage wires suspended between large metal tower structures across large stretches of land. The landowner receives a one-time payment and cannot refuse to have the transmission corridor on his land.

Roger Wireless Inc. negotiates land leases with land owners on the open market to use land for a telecommunications tower. A telecommunications tower consists primarily of a large single tower structure, sometimes supported by guy wires, which supports equipment that transmits communication related data. A Rogers Wireless Inc. lease is forem …the erection, replacement, maintenance, and operation of telecommunications facilities and equipment and the provision of telecommunications services.

Wind turbine developers also negotiate leases with land owners on the open market to use land for wind turbines. A wind turbine is a rotary device that extracts energy from the wind and consists primarily of a tubular steel tower, ranging from 60 to 90 meters (200 to 300 feet) tall, that usually supports a three-bladed turbine. A wind turbine lease is for …the erection, replacement, maintenance, and operation of wind turbine facilities and equipment and the provision of wind turbine

Lease vs. Easement Analysis

For the purpose of this study, a typical Rogers Wireless Inc. telecommunication tower land lease was compared to a typical Hydro One Networks Inc. rural land easement expropriated along the Bruce to Milton corridor, Ontario, Canada, 2009/2010. Details of the Roger Wireless Inc. lease:

Property:      3119 Bruce County Road 3, Ontario(1 mile south of Paisley)
Owner:       Hutton Land and Cattle Limited
Tenant:       Rogers Wireless Inc.
Land/Tower Area:       Land area is 1.370 hectares or 3.385 acres:

A public open house was held in the area on August 31, 2001 and leases were negotiated in the open market. The lease commenced on December 27, 2001 for a term of 25 years.

The rent is outlined as follows:

Years 1 to 5    >    $5,000 per year
Years 6 to 10   >    $8,000 per year (negotiated and extended in 2006)
Years 16 to 20   >    To be negotiated
Years 21 to 25   >    To be negotiated

The tenant was granted further options to extend for five year periods commencing Nov 1, 2011, 2016, and 2021. The tenant, Rogers Wireless Inc., pays pro-rationed realty taxes and liability insurance. The land owner, Hutton Land and Cattle Limited, has the right to farm on the leased area not occupied by the tower and guy wire footprint areas.

Rogers Wireless Inc. states it pays a ‘market rate per year’ regardless of the land area required. For example, if a telecommunication tower can be constructed on 2.0 acres, it would pay $8,000; however, if the land area is 6.0 acres, it still pays $8,000.

Value capitalization for the price per acre is illustrated below:

Example Area Requirements
Net Rent Acres $/Acre Cap Rate Value/Acre Cap Rate Value/Acre
$8,000 2.0 $4,000 5.0% $80,000 8.0% $50,000
$8,000 3.0 $2,667 5.0% $53,333 8.0% $33,333
$8,000 4.0 $2,000 5.0% $40,000 8.0% $25,000
$8,000 5.0 $1,600 5.0% $32,000 8.0% $20,000
$8,000 6.0 $1,333 5.0% $26,667 8.0% $16,667
Hutton Land and Cattle Limited Lease
Net Rent Acres $/Acre Cap Rate Value/Acre Cap Rate Value/Acre
$8,000 3.4 $2,363 5.0% $47,267 8.0% $29,542

In a typical rural Rogers Wireless Inc. lease, the estimated land price is between $16,667 to $80,000 per acre given the lease is paid yearly. In the Hutton Land and Cattle Limited lease, $8,000 divided by 3.385 acres equals $2,363.36 per acre rent per year. The net rent of $2,363.36 capitalized at 5.0 percent is $47,267 per acre price. The net rent of $2,363.36 capitalized at 8.0 percent is $29,542 per acre price.

The value of the Hutton Land and Cattle Limited land was not $30,000 to $47,000 per acre. Land prices in the Hutton neighbourhood leading up to December 2006 are examined:

Hutton Neighbourhood Sold Land (January 1, 2005 to December 31, 2006)
Search parameter: 5 km radius from the Hutton lands (PIN 33181-0644)
PIN Address Sale Price Sale Date Acres Sale Price/Acre
331800078 1269 Concession 8 $190,000 Jan/05 103.80 $1,830
331890041 461 Brant-Elderslie $180,000 Mar/05 101.32 $1,777
331890055 329 Brant-Elderslie $243,000 Jun/05 73.37 $3,312
331810571 963 Bruce Road 11 $200,000 Sep/05 148.68 $1,345
332390015 S/S Concession Rd 16 $200,000 Dec/05 100.50 $1,990
331800102 3506 Bruce Road 3 $335,000 Dec/05 135.33 $2,475
332400011 1720 Sideroad 5 $250,000 Dec/05 100.52 $2,487
331890011 2497 Bruce Road 3 $131,250 Feb/06 100.69 $1,304
332800042 N/S Concession Rd 8 $280,000 Mar/06 200.43 $1,397
331890003 1752 Greenock-Brant $207,500 Jun/06 57.88 $3,585
332400015 W/S Baseline South $283,000 Sep/06 138.00 $2,051
Average price per acre $2,141
Median price per acre $1,990

Rogers Wireless Inc. pays Hutton $8,000 per year. HONI typically pays a farmer a one-time payment of approximately $4,000 to $5,000 per acre depending on land value. HONI then discounts this value per acre by 25 percent claiming this is an “industry standard”. It is not an industry standard as Union Gas, Bell Canada, and TransCanada Pipelines pay 100 percent of the fee simple value (and in some cases more).

The differences between HONI and Rogers Wireless Inc./wind turbine developers are summarized in the table below.

Hydro One Networks Inc. (HONI) Rogers Wireless Inc./Wind Turbine Developer
• land use is “industrial”.
• land is taken against the will of the owner (via expropriation).
• landowners receive a one-time payment.
• payment is 75% of the market value estimated by HONI appraisers.
• easement is in perpetuity and is not by consent.
• land owner does not receive a proportional share of realty taxes or insurance.
• land use is “industrial”
• lease is negotiated on the open market.
• payments are YEARLY
• land owner is paid $8,000 per year or $1,333 to $4,000 per acre per year for the term of the lease
with rent escalating provisions every five years.
• lease is terminal, usually 20 years, and is by consent.
• land owner is reimbursed a proportional share of the realty taxes and insurance.

One Acre: Payment illustration via expropriation by HONI

Easement payment per acre $5,000 75% $3,750
Injurious Affection payment per acre $5,000 10% $500
Total one-time payment for one acre $4,250

One Acre: Payment illustration via market negotiation by Rogers Wireless Inc.

Rent payment per acre
(as per Hutton Land and Cattle Limited lease) $8,000 3.4 $2,353
Each payment invested each year for five years Rate Factor Total in 5 Years
5.0% 5.525631 $13,001

One Acre: Payment illustration Summary

Payment received for one acre over five years
Telecommunication Tower (similar for a wind turbine) $13,001
HONI $5,424
$ Difference $7,577
% Difference 140%

It is also noted that for intensively farmed land particularly, telecommunication towers and guy wire infrastructure can impose significant operating costs. Telecommunication towers and structures increase the time and financial costs of applying fertilizer or controlling pests and impede the movement of machinery to prepare or harvest crops. Similar impositions are experienced with wind turbines.

Conclusion – Telecommunication Towers and/or Wind Turbines

It is reasonable to assume that Rogers Wireless Inc. and wind turbine developers are aware of the market value per acre. It is also reasonable to assume that a premium is paid for the use of land as they are aware that telecommunication towers and wind turbines cause a diminution in value.

Wind turbine land leases are very similar to telecommunication tower leases and similar conclusions can be considered.

Therefore, it is reasonable to conclude that a significant portion of the Rogers Wireless Inc. and wind turbine land lease payment is made in acknowledgement of a diminution in value. In other words, the land has been injuriously affected by the use.

Perception vs. Value, Transmission vs. Distribution Lines

Perception motivates a buyer to make a buying decision. Examples are perceived enjoyment of a dwelling home and perceived income stream from a property. Perception is the result of knowledge obtained through literature, print media, electronic media, and the internet.

Perception need not be based on a proven or scientific fact.

The buyer, acting on his/her perceptions, purchases a property with the result that market price has been established. The buyer price is analysed by a real estate appraiser.

Value is an estimate. Price is an historic fact.

Overall, the majority of the articles indicate a “fear” of an Industrial High Voltage Electrical Power Transmission Corridor with health concerns appearing to be the primary factor together with stray voltage issues (mainly in rural publications) and aesthetics. It is clear that most of the information the public receives about Industrial High Voltage Electrical Power Transmission Corridors is negative.

For rural properties the most likely buyers would be those who:

  1. desire a rural lifestyle vs. the urban lifestyle;
  2. typically generate income from working in the agricultural field (farmers);
  3. are sensitive to environmental issues that affect the uses of the land and the land vistas; and
  4. are sensitive to health and safety issues relating to the land and its uses.

Transmission Lines vs. Distribution Lines

The new 500kV HONI Industrial High Voltage Electrical Power Transmission Corridor as well as the existing corridors are transmission lines that transport high voltage electrical power from the generating source or from one substation to another.

These lines have steel support towers 160 feet in height and have more than one set of wires.

Electrical transmission lines do not directly serve electric utility customers. Transmission line wires are not insulated and are “bare”.

Typically, they are constructed to have at least 20 feet of clearance between the ground elevation and the bare wire at low sag.

An electric distribution line is a power line that transports electricity from the substation to the electric utility customers.

These lines are of less voltage, typically under 65kV, are carried on wooden poles and usually hold one pair of wires.

The voltages on distribution lines are downgraded before the electricity is brought to the customer’s residence, institution, farm, industrial, or commercial buildings.

The voltages on distribution lines are downgraded before the electricity is brought to the customer’s residence, institution, farm, industrial, or commercial buildings.

The focus of this report is on transmission lines, not distribution lines.

Effects of Power Transmission Corridors

When an Industrial High Voltage Electrical Power Transmission Corridor and the required easement to Hydro One Networks Inc. traverse a farm property, the consequences to the land owner include:

  1. Reduction in fee simple, loss of control of the use of the corridor land;
  2. Foreclosure of present or future land use;
  3. Interference with operation of equipment;
  4. Loss of land use efficiencies, loss of crop yields;
  5. Loss of vistas, visual nuisance;
  6. Creation of safety hazards;
  7. Real or perceived health issues and quiet enjoyment;
  8. Electric magnetic fields, stray electricity issues;
  9. Owner continues to pay realty tax on the easement land; and
  10. Owner has increased liability responsibilities.

1. Loss of control of the use of the corridor land

  • Ontario Hydro has control of the use and maintenance of the corridor land. Ontario Hydro used Agent Orange to clear power line corridors across the province, through city backyards and thick rural brush from 1950 to 1979.
    Hydro’s own records, obtained by the Star, boast that in one 12-year period, the power company dropped enough chemicals in Ontario to cover a 30-metre-wide swath travelling “four-fifths the distance around the world…
    ‘Every power line in Ontario was sprayed,” said Sidney Rodger, a former Hydro supervisor who worked in eastern Ontario from 1958 to 1968.’
  • Crops may be destroyed, no trees are allowed to be grown beneath a tower or wires, no buildings or structures are allowed;
  • Owners along an existing corridor complain that hydro power corridor maintenance has resulted in messy downed trees and brush left randomly to rot, often across existing paths and trails;
  • At various times, a range of maintenance activities are conducted with the property owner having no control over when property entry can occur;
  • Inspection of the hydro power lines may be conducted by foot patrol and climbing crews without regard to crops and farm animals.

Example: Clause (b) below is a portion of a typical HONI easement registered on lands where power corridors are located . The control given to HONI is set out in the easement :

(b) To enter on and selectively cut or prune, and to clear and keep clear, and remove all trees (subject to compensation for merchantable wood values), branches, bush and shrubs and other obstructions and materials in, over or upon the Strip, and without limitation, to cut and remove all leaning or decayed trees located on the Lands whose proximity to the Works renders them liable to fall and come in contact with the Works or which may in any way interfere with the safe, efficient or serviceable operation of the Works or this easement by HONI.

2. Foreclosure of present or future land use

  • Removal of land from food production;
  • Proximity to hydro power lines restricts the placement of residential and agriculture structures;
  • Proximity to hydro power lines restricts the placement of residential and agriculture structures;
  • Airborne diseases may restrict placement of large scale livestock buildings;
  • When corridors traverse the rear of a farm, buildings cannot be set back the greatest distance possible from the road to avoid possible airborne disease transmission from road animal transportation.;
  • A hydro power corridor traversing land may exclude or restrict the location for an intensive livestock or poultry building footprint and the ‘as-of-right’ land uses.

Example: A modern large scale pork complex is set-back from the road to minimize airborne disease. The pork complex is also situated on the land to minimize any extraneous (stray) voltage.

This intensive livestock building was constructed on a site well back from the road due to the fear of airborne diseases that can come from road vehicles.

If there had been an Industrial High Voltage Electrical Power Transmission Corridor on the rear of this land, a knowledgeable farmer would not have constructed the intensive livestock building at this location for fear of stray electricity.

“Airborne diseases include any that are caused by pathogens and transmitted through the air. The pathogens transmitted may be any kind of microbe, and they may be spread in aerosols of dust or liquids. The aerosols might be generated from sources of infection such as the bodily secretions of an infected animal or person, or biological wastes such as accumulate in lofts, caves, garbage and the like. Such infected aerosols may stay suspended in air currents long enough to travel for considerable distances on air currents, though the rate of infection decreases sharply with the distance between the source and the organism infected.”

Would a pork-chicken-dairy-horse complex be constructed on this land if a 500kV* corridor existed as indicated in red in the photo below?

Disease expert, Dr. Sue Burlatschenko, B.Sc., Dipl. ABVP-SHAP, , advised “…no, an informed farmer would not use this land for large scale agriculture purposes if traversed or next to an Industrial High Voltage Electrical Power Transmission Corridor.”

If land use is restricted, is value affected?

3. Interference with operation of equipment

  • Towers and wires can prohibit automated crop watering;
  • Towers and wires can prohibit aerial crop spraying;

4. Loss of efficiencies

  • Negotiating equipment around the towers results in higher costs to cultivate and crop land;
  • Financial impact and loss – land may be taken out of production;
  • Industrial High Voltage Electrical Power Transmission Corridors with structures increase the time and financial costs of applying fertilizer or controlling pests;
  • The movement of machinery to prepare or harvest crops is restricted;
  • Farmers cannot run metal fences parallel with lines due to the possibility of induced current;
  • HONI controls land use under the lines.

5. Loss of vistas

  • Towers and wires are not attractive.

6. Creation of safety hazards

7. Real or perceived health issues, quiet enjoyment

  • Health Issues
    The most serious health endpoints that have been reported to be associated with extremely low frequency (ELF) and/or radiofrequency radiation (RFR) include childhood and adult leukemia, childhood and adult brain tumors, and increased risk of the neurodegenerative diseases, Alzheimer’s and amyotrophic lateral sclerosis (ALS). In addition, there are reports of increased risk of breast cancer in both men and women, genotoxic effects (DNA damage, chromatin condensation, micronucleation, impaired repair of DNA damage in human stem cells), pathological leakage of the blood–brain barrier, altered immune function including increased allergic and inflammatory responses, miscarriage and some cardiovascular effects.
  • Loss of quiet enjoyment:
    Helicopter inspections … twice a year … scheduled to be concurrent with inspection of the adjacent existing transmission lines. In order to ensure that the transmission facilities are operated and maintained in a safe, reliable and efficient manner, management activities within the Project Right of Way would be undertaken by small crews, generally every seven years. These would include activities such as:
    • periodic tree cutting;
    • soil stabilization;
    • inspection patrols; and
    • selective herbicide application”

Interference during Construction

HONI has the right to construct and then remove temporary access roads during the construction of the hydro towers. Such temporary access roads involve removing the topsoil, laying down landscape cloth, dumping and leveling an aggregate material, removal of the aggregate and landscape cloth, and restoring the topsoil.

This process can result in loss of crops, soil erosion, compaction of the soil, and increased traffic and noise due to the use of large dump trucks and construction vehicles for the access roads and the construction of the towers.

2.2.1.5      Construction Activities Associated with the Undertaking Construction activities which may have an effect on the natural and socio-economic (including cultural and agricultural) environment are presented below:
  • Minor clearing needed to establish the centreline and corridor boundaries;
  • ROW clearing – selective removal of trees/brush from the corridor to permit construction access and to create a vegetative cover compatible with overhead conductors and safe operation of the transmission line;
  • Access road construction – construction of temporary access roads and watercourse crossings to reach work sites;
  • Installation of tower footings – auguring of holes at each tower footing for installation of reinforced concrete and anchor bolts;
  • Delivery of tower steel and erection of towers – delivery of tower steel, assembly and erection of towers using cranes;
  • Installation of conductors – delivery of conductor cable and components and stringing by the tension method; and
  • Transmission corridor restoration – after construction restoration of the corridor to preconstruction condition, to the extent possible.”

Interference with Vegetation

The hydro power corridor operator has the right to control all land uses within the corridor including removal of vegetation which can include crops and trees.

(e) Except for fences and permitted installations, to clear the Strip and keep it clear of all buildings, structures, erections, installations or other obstructions of any nature whether above or below ground, including removal of any materials and equipment or plants and natural growth which in the opinion of HONI, endanger its Works or any person or property or which may be likely to become a hazard to any Works of HONI or to any persons or property or which do or may in any way interfere with the safe, efficient or serviceable operation of the Works or this easement by HONI.

8. Electric magnetic fields, stray electricity issues

  • Reduction in milk production due to stray electricity creating electric shocks from milking equipment …because stray voltages on a farm do not exceed 0.5 V does not mean that the farmer will be free of stray voltage problems. In addition, because sensitivity to electrical current varies with parts of the body through which it passes, it is possible that cows might be even more sensitive to stray voltage if the current passes through the teat or tongue.
  • Stray, tingle or neutral to earth voltage has been implicated as a problem for dairy and other livestock herds for approximately twenty years. Many believe the problem may not be curable if poultry and animals are housed and kept close to a hydro power corridor.
  • A hydro power corridor traversing land may exclude or restrict the location for an intensive livestock or poultry building footprint and the ‘as-of-right’ land uses’.
  • A large number of studies have been carried out investigating the effects of EMF on circulating melatonin levels in animals, because of the possible links between EMF and breast cancer. The impact of melatonin on reproduction is particularly pronounced in seasonally breeding animals, where the effect varies depending on the length of gestation in order to ensure that the offspring are born in late spring when food is plentiful.”
  • An Ontario horse farmer complained that a horse in foal while in pasture next to an existing 500 kV corridor had an 85 to 95 percent chance of still birth. When not kept next to the 500kV corridor, the birth rate was normal.

9. Owner continues to pay realty tax

  • Owners are forced to pay realty taxes on land they may not be able to use and over which they no longer have control;
  • Many appraisers and HONI argue that it is an ‘industry standard’ to pay 75 percent of the Fee Simple value of an easement. There is no support for this statement, most utility companies pay 100 percent, and some pay more. Given the lost rights and additional liabilities, payment must be based on 100 percent of the Fee Simple value for a 500kV easement.

10. Owner has increased liability responsibilitiess

  • Increased insurance premium

General Overview of the Effects of Hydro Power Corridors

There are real or perceived effects, risks, and concerns when a hydro power corridor is constructed, used, and maintained. There are many reasons why property buyers discount the price of land near hydro power corridors.

Proximity to Towers and Power Lines

A particular concern of property owners and property buyers is the proximity of the land to a hydro power corridor.

Electric and magnetic fields are strongest when close to their source. As you move away from the source, the strength of the fields fades rapidly. This means you are exposed to stronger electric and magnetic fields when standing close to a source (e.g., right beside a transformer box or under a high voltage power line), and you are exposed to weaker fields as you move away.

Interference caused by Maintenance of the Power Corridor

Owners along an existing corridor complain that hydro power corridor maintenance has resulted in messy downed trees and brush left randomly to rot, often across existing paths and trails.

At various times, a range of maintenance activities are conducted with the property owner having no control over when property entry can occur. Inspection of the hydro power lines is conducted by foot patrol and climbing crews.

Health Concerns

Childhood Cancer and Leukemia

Sufficient evidence from epidemiological studies of an increased risk from exposure to EMF (power frequency magnetic fields) that cannot be attributed to chance, bias or confounding. Therefore, according to the rules of IARC such exposures can be classified as a Group 1 carcinogen (Known Carcinogen). Scientific evidence suggesting that every day, chronic, low-intensity ELF [extremely low frequency] magnetic field exposure poses a possible health risk is based on epidemiological studies demonstrating a consistent pattern of an increased risk of childhood leukaemia [sic]. Acute biological effects have been established for exposure to ELF electric and magnetic fields in the frequency range up to 100 kHz that may have adverse consequences on health. Consistent epidemiological evidence suggests that chronic low-intensity ELF magnetic field exposure is associated with an increased risk of childhood leukaemia [sic]. A major new study found that children whose birth address was within 200 meters of an overhead power line had a 70% increased risk of leukemia. Children living 200 to 600 meters away from power lines had a 20% increased risk.

Adult Cancers

A very recent study by Lowenthal et al. (2007) investigated leukemia in adults in relation to residence near to high-voltage power lines. While they found elevated risk in all adults living near to the high voltage power lines, they found an OR of 3.23 (95% CI = 1.26-8.29) for individuals who spent the first 15 years of life within 300 m of the power line. This study provides support for two important conclusions: adult leukemia is also associated with EMF [electrical magnetic fields] exposure, and exposure during childhood increases risk of adult disease. For a decade, there has been evidence that human breast cancer cells grow faster if exposed to ELF at low environmental levels. This is thought to be because ELF exposure can reduce melatonin levels in the body. The presence of melatonin in breast cancer cell cultures is known to reduce the growth of cancer cells. The absence of melatonin (because of ELF exposure or other reasons) is known to result in more cancer cell growth.

Nervous System and Brain Function Changes

New research indicates that ELF MF [extremely low frequency electromagnetic field] exposure, in vitro, can significantly decrease melatonin activity through effects on MT1, an important melatonin receptor. There is considerable in vitro and animal evidence that melatonin protects against AD. Therefore it is certainly possible that low levels of melatonin production are associated with an increase in the risk of AD. There is now evidence that (i) high levels of peripheral amyloid beta are a risk factor for AD [Alzheimer’s Disease] and (ii) medium to high ELF MF exposure can increase peripheral amyloid beta. High brain levels of amyloid beta are also a risk factor for AD and medium to high ELF MF exposure to brain cells likely also increases these cells’ production of amyloid beta.

Noise Emissions

Owners along an existing corridor complain that the hydro power lines emit a ‘buzzing’ noise that is considered above a ‘hum’. The noise depends on the weather, the observer’s location, and observer’s proximity to the hydro power line.

Cow Behaviour Issues and Lower Milk Production

behavior, health, and milk production of cows were impaired by transients and by the 3rd, 5th, 7th, and triplen harmonic electrical currents from utility power lines. Primary neutral voltage and 3rd, 5th, 7th and other harmonics on dairy farms were reduced to near zero when a shielded neutral isolation transformer was installed between the utility and the dairy. Animal behavior improved immediately, and milk production which had been depressed for 3 years, gradually returned to normal within 18 months after installation of the shielded transformer.

Limitations on Development Potential

A parcel of land, say 50 to 100 acres, with road frontage may be vacant or it may have buildings with limited use value. This parcel has development potential for intensive livestock and poultry production use which may be ‘as-of-right’ permitted via land use (zoning) controls. Poultry, dairy and other livestock herds can be and are affected by stray, tingle, or neutral to earth voltage. Many believe the problem may not be curable if poultry and animals are housed and kept close to a hydro power corridor.

While not an issue historically, today the developer will want the buildings set back the greatest distance possible from the road to avoid possible airborne disease transmission from road animal transportation. A hydro power corridor traversing land may exclude or restrict the location for an intensive livestock or poultry building footprint and the ‘as-of-right’ land uses’

Financial Impact and Loss

Overhead lines and structures increase the time and financial costs of applying fertilizer or controlling pests. The movement of machinery to prepare or harvest crops is impeded. Farmers have limited ability to run metal fences parallel with lines or near the corridor lines due to the possibility of induced current.

Diminution in Value: Industry Research

This section provides a selection of references to other industry research supporting the diminution in value related to a hydro power transmission corridor.

Power Lines and Property Values: The Good, the Bad, and the Ugly Overhead transmission lines can reduce the value of residential and agricultural property. The impact is usually small (0-10%) for single-family residential properties. The greatest impacts have been measured in intensively managed agricultural property (irrigators, etc., and in rural, second (vacation) home developments. In late 1994, Arthur Gimmy, MAI, presented a seminar before the EMF Regulation and Litigation Institute. In part, the seminar presented a matched-sales analysis of California residential property that indicated diminutions in lot values from properties abutting power line easements of 18% to a whopping 53.8%.”

Thomas A Jaconetty,

Chief Deputy Commissioner of the Cook County Board of Review

there have been several other noteworthy studies. One estimated a valuation loss of only 2-3 percent for properties in very close proximity to such lines (Colwell and Foley 1979; Colwell 1990). Another suggested a loss of about 10 percent (DeLaney and Timmons 1992). So did a 1993 review of 100 Houston residential properties that abutted a power line corridor, which found that there was a measurable loss of value relative to non-abutting peer properties (Bolton and Sick 1999; Bolton 1994). A late 1994 California matched-sales analysis showed that vacant lot values were adversely affected by 18-53.8 percent (Bolton and Sick 1999, 336).

Considering all of the market evidence, a value loss of less than 10 percent may be a reasonable expectation for residential properties. The negative impact is possibly greater for other types of properties.

The Real Estate Center

“According to [a Minnesota] study, 50 percent of those that sold a home with overhead power lines said the property’s market value was adversely affected. Two-thirds of the sellers indicated that a longer market time was required for the property to sell.

‘Half of homeowners near overhead power lines did not consider homes with overhead power lines,’ says Jones, vice president and chief economist with Stewart Title Guaranty Company.

‘Forty-four percent said they would have lowered their offering by an average of 7.6 percent if the home they had purchased had been within 200 yards of overhead power lines.’

More than 83 percent of residential appraisers indicate a negative influence on property market value arising from the lines, with an estimated average of 4.1 percent reduction in value for homes with high-voltage overhead power lines. Each respondent appraised an average of 54 residential properties near overhead power lines. A similar 84 percent indicate an average 62 days longer marketing period for residential homes affected by power lines.”

Literature Review – Dr. Sue Burlatschenko, B.Sc., Dipl. ABVP-SHAP

Dr. Sue Burlatschenko was retained and paid a fee by Lansink Appraisals to provide a literature review regarding high voltage power corridors. Her 2012 work follows.

Impacts on Biosecurity, Disease Transmission

A. Health Impacts of Electromagnetic Frequencies

The health impact of high voltage lines, particularly electromagnetic frequencies (EMF) on humans and livestock has been extensively studied. Purported negative effects in livestock include impacts on milk production. Studies have linked effects of electromagnetic frequencies on the pineal gland and secretion of melatonin1. Melatonin regulates release of LHRH in the hypothalamus, and thus influence FSH and LH release from the pituitary gland. A review article suggests that the production of gonadal sex steroids may be altered after acute exposure, thus affecting reproductive cycles of cows2. A report reviewing the epidemiologic literature on EMF and health (in humans) by the International Commission for Non-Ionizing Radiation Protection (Standing Committee on Epidemiology) concluded that childhood leukemias as related to postnatal exposures above 0.4 uT shows the most evidence of an association. There is evidence for occupational EMF exposure and ALS while breast cancer, cardiovascular disease and suicide and depression remain equivocal. Effects both positive and negative (burchard, korean study) have been ascribed to EMF, and other health effects on humans and animals remain inconclusive.

More recent research is revealing that there are some disturbances manifesting at the molecular level, reporting breaks in DNA strands, and upregulation of stress response genes and production of increased levels of stress proteins.

B. Standards for Limits of Exposure

Legal aspects of EMF exposure in Europe include standards that describe maximum limits of exposure and standards that fix distances between power installations and houses. The International Radiation Protection Association (IRPA), under the World Health Organization published a document in 1990 titled Interim guidelines on limits of exposure to 50/60 Hz electric and magnetic fields. For the public, general maximum limits of exposure are 5 kV/m for electric fields and 0.1mT for magnetic fields6. These limits were instituted under a precautionary principle. A definition of precautionary principle from The Canadian Environmental Law Association is: “The precautionary principle denotes a duty to prevent harm, when it is within our power to do so, even when all the evidence is not in.”

In Canada, this principle is not invoked with respect to limits for EMF exposure. The Federal-Provincial-Territorial Radiation Protection Committee – Canada (FPTRPC) in a 2005 position statement suggest that “moderate measures and participation in the process of acquiring new knowledge are sufficient.”8

In June 2007 the Ground Current Pollution Act was passed in the Ontario Legislature. The Ontario Energy Board was ordered to deal with the stray voltage issue. Producers with electrical problems are directed to contact their electricity distributor. The Dairy Farmers of Ontario asked for a reduction in current thresholds for acceptable levels of Neutral to Earth Voltage (NEV) and Animal Contact Current. The Ontario Federation of Agriculture has concurred with this request.

C. Public Perceptions and Impact on Property Values

Elliott and Wadley describe a mounting concern of people regarding outcomes of exposure to different kinds of radiation. This concern is reflected in how potential purchasers view the value of properties where transmission lines transverse or are in close proximity. These authors report that per acre values analyzed in Eastern Canada showed a decrease of 16 – 29 percent in properties with easements for transmissions lines than for similar properties without easements10.

Public opinion reflects a hesitant attitude to full opposition to hydro lines. An internet search revealed numerous blogs, articles and opinions on the location of energy lines. A sample piece from The Western Producer a producer comments that he has abandoned any future plans for expansion of his dairy farm as either rights-of-way prohibit expansion, and full market resale value would not be gained11. Elliott and Wadley refer to the negative impact of electricity lines on property values results from the formation of “stigma”. Stigma has been defined as “a market imposed penalty that can affect a property that is known or suspected to be contaminated…”

In the Better Farming article by Kate Proctor, some dairy farmers in Ontario have experienced declines in dairy health and deaths due to stray voltage issues. Bridlewood Electromagnetic Fields Information Services (Richard Woodley) compiled an extensive list of legal filings by property owners across North America and some international location. These filings dealt with the impact of cell phone towers and hydro transmission towers; many owners claimed health concerns and reduction of property value issues.

Don Crosby in the Ontario Clean Air Alliance, wrote an article regarding Ontario Hydro’s plans to install a new transmission line from Bruce Power to Milton. In this article, an agricultural landowner complained that market value alone was insufficient compensation He felt that replacement value of homes and buildings would be a better valuation for compensation to landowners.

In Manitoba, a consequence of hydro towers being placed on agricultural properties was the inability of crop dusting planes to service the farm. Obviously it is illegal for planes to fly underneath the towers. The result of this unforeseen circumstance may be the avoidance of certain crops and income reduction.

D. Biosecurity Considerations

Location of hydro corridors may result in repositioning of livestock pastures and barns due to concerns regarding stray voltage or electromagnetic frequencies. Barns may be sited relative to the dwelling on the property, for ease of moving back and forth between buildings. A decision to move livestock out of the corridor area and re-siting them away from overhead power lines may result in decreasing the distance between neighboring barns and/or pastured livestock. This in itself can result in an increased risk of disease transmission, either through direct animal-to-animal contact (fence line) or airborne transmission.

Biosecurity is a term that is used extensively in livestock production. Biosecurity refers to those practices that prevent or mitigate disease from entering, spreading within or being released from operations that may contain livestock

Recognition of transmission of animal pathogens have resulted in the development of biosecurity programs in various livestock groups. For example, swine biosecurity programs have been designed and implemented to prevent the incursion of domestic swine disease agents, but also to prevent potentially devastating foreign animal diseases. A National Level Swine Biosecurity Standard has been developed to enable producers to develop best management practices for disease prevention and control. Other biosecurity evaluation programs include the Production Animal Disease Risk Assessment Program (PADRAP) and the Canadian Quality Assurance Program.

A separation distance is critical in the maintenance of swine health, of which the Ontario swine industry is fully aware. Since some pathogens e.g. Porcine Reproductive and Respiratory Syndrome virus (PRRSv) may be transmitted via contaminated vehicle tires, contaminated manure in truck contents, insects and rodents as well as airborne transmission, efforts are being undertaken to minimize transfer of disease agents.

A critical pathogen of note in the North American swine industry is PRRSv. This virus initially appeared in the late 1980s and early 1990s as clinical outbreaks in swine herds. The virus caused severe reproductive failure abortions, stillbirths, premature parturition, neonatal deaths, post weaning pneumonia and other impacts on performance and growth. The economic impact was and remains very large, despite attempts to control this virus. This virus is readily transmitted by aerosolization; this was demonstrated in an elegant study by Pitkin and Dee in 200913. Otake demonstrated that the virus may be found up to 9 kilometres from the source herd and remain infectious.

A movement has been undertaken to organize swine producers to limit the area transmission of this virus. Under various Area Regional Control and Elimination (ARC & E) programs, producers agree to review the health status of their herds, reduce or eliminate the virus dynamics within the herd, and monitor the herd for the presence of this virus.

The Canadian Food Inspection Agency (CFIA) produced the National On-Farm Avian Biosecurity Standard. This was developed with the Avian Biosecurity Advisory Council and focused on prevention of avian influenza and other diseases spread through respiratory transmission and addressing gaps in existing on-farm food safety systems. This document noted that recent [avian] disease outbreaks in Canada and overseas demonstrated that there was a serious impact on business, individual livelihoods and local communities.

One of the major concerns with avian influenza breaks is the consideration of zoonosis (an infectious disease of animals that can cause infections humans, sometimes by a vector). This CFIA document noted that stringent biosecurity was important for the prevention of human illnesses.

WHO continues to monitor high pathogenic avian H5N1 influenza, which has infected 608 people as of August 2012 and killed 359.

Swine influenza viruses may be transmitted to turkey flocks. In 2003, influenza viruses were isolated from two geographically distinct turkey farms in Minnesota. The viruses were identified as closely resembling a swine influenza (H3N2) virus, with >97% homology between the two. Turkeys are also susceptible to H1N1 swine influenza viruses16. Corzo et al (AASV 2012) demonstrated that swine influenza A viruses could be airborne and thus aerosolized. The authors also concluded that influenza infection status in turkeys was associated with proximity to pig premises and the size of the turkey flock17.

In 2004 a highly pathogenic avian influenza (H7N3) was initially diagnosed in Abbotsford, B.C., and spread through the Fraser Valley. This virus resulted in the culling and destruction and disposal of 17 million birds. Gross economic costs were estimated at $380 million.18

It is critical that new poultry barns be sited in such a manner that potential airborne transmission of pathogens be minimized. The economic losses resulting from a catastrophic disease break in a barn may spread to other barns in the neighborhood.

The Beef biosecurity document states that “animals of other species, whether from the same or a different operation, may present disease risks that are not being managed within the beef cattle in question. The same is true for cattle from other operations.” In other words, cross-species interaction should be at a minimum for cattle in order to avoid transfer of infectious organisms.

The document also recommends that “minimizing direct and indirect contact, where practical, with animals from another operation, or from other species, helps prevent the introduction of diseases that are not being managed on farms.

End of Dr. Sue Burlatschenko’s Literature Review

Certification by Ben Lansink – Market Study

I, Ben Lansink, certify to the best of my knowledge and belief that:

The statements of fact contained in this Study report are true and correct, the reported analyses, opinion, and conclusion are my personal impartial, and unbiased professional analyses, opinion, and conclusion only pertaining to Injurious Affection.

Other than as stated, no one provided professional analysis assistance to me, the sole report signer.

I have no known bias and no present or prospective personal interest with respect to the issues that are the subject matter of this Case Study, or to the public who may receive this Study.

My work was not contingent upon developing Price diminution or Injurious Affection, or a conclusion favouring anyone.

My analyses, opinions, and conclusions were developed, and this Case Study has been prepared, in conformity with (1) the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP), Appraisal Institute of Canada; (2) the Uniform Standards of Professional Appraisal Practice (USPAP), Appraisal Standards Board, United States; and (3) the International Valuation Standards (IVS).I have the knowledge and experience to complete this Study competently.

The Appraisal Institute of Canada has a Continuing Professional Development Program. As of January 2014, I have fulfilled the requirements of this Program. I am a member in good standing of the Appraisal Institute of Canada.

I inspected the new and existing HONI 500kV Industrial High Voltage Electrical Power Transmission Corridor, existing corridors, and also inspected the neighbourhoods and the communities.

For the purpose of this Case Study report, I, Ben Lansink, did NOT estimate the market value of any one property.

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