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An ongoing dispute between some Kentucky residents and a Louisville energy company is of interest partly because it illustrates issues commonly at stake in eminent domain litigation, and partly because it involves bourbon.
The questions involve whether a true public need allows an energy infrastructure project to tap the government’s power of eminent domain. Opponents say the project serves just one customer, one of the world’s largest bourbon brands.
DISTILLERY EXPANDS ITS OUTPUT AND ITS NEED FOR NATURAL GAS
The Jim Beam brand of bourbon has distilled in Clermont, Kentucky, for 85 years at a facility that recently celebrated its 16 millionth barrel. Five years ago, its parent company (Beam Suntory) initiated plans to expand operations at the location, requiring a larger supply of natural gas from Louisville Gas & Electric (LG&E).
Louisville’s local NPR affiliate recently reported on what happened next, citing a timeline created by Beam Suntory, according to WFPL.
Beam Suntory asked LG&E about its need for more natural gas, but the utility said it would need the bourbon maker to pay up to $25 million to build the increased capacity. The NPR station says a round of meetings between the bourbon and gas companies “determined that future growth in the Bullitt County area would require more gas,” and thus LG&E was justified in footing the bill.
HOLDOUTS QUESTION THE USE OF EMINENT DOMAIN
LG&E now owns most of the land it needs for the expansion, but several homeowners and the Bernheim Arboretum and Research Forest are holdouts and remain in litigation.
The Kentucky Eminent Domain Act requires that the project must serve a public use to avail itself of the state’s power of eminent domain. Therefore, the timeline has been closely scrutinized as the holdouts claim it speaks to whether the pipeline is truly being expanded for more customers than just one.
An attorney for one of the landowners put his client’s view of the controversy in quotable form for the local radio station:
“This was a project that they asked Jim Beam to pay for, and Jim Beam said ‘No.’ So they went back to the drawing table and said, ‘How can we get the ratepayers of this state to have to pay for it?’ … When you have a singular customer who has the idea for the project, the question becomes, ‘Is this for a public purpose or is this for a private purpose?’”