Shelley Ross Saxer

Government Power Unleashed: Using Eminent Domain to Acquire a Public Utility or Other Ongoing Enterprise

This Article examines both state and local government’s use of eminent domain to acquire an ongoing utility company. The focus is on utility companies since they have experienced both public ownership and regulation, and only recently “deregulated” to allow private owners to run them competitively. However, and overriding concern remains – what is the limitation on government poser after a municipality or state condemns a private business it determines can be run more efficiently as a public function? The impetus for this Article was the City of Corona’s exercise of eminent domain power to acquire Southern California Edison in order to provide less expensive rates and more reliable electricity service to residents.Part I discusses the history of industries that have been historically subject to public ownership or regulation and why state and local government officials have felt compelled to acquire these industries to respond to citizen needs. Part II outlines Fifth Amendment limitations and various state constitutional and statutory constraints on eminent domain power. The Article concludes by suggesting that people can either limit or expand this government power through legislative action, and, in some cases, state constitutional amendment. Social, economic, and political pressures will combine to either prevent or enable wide scale nationalization and what some might refer to as “creeping statism” or “creeping economic socialism.”