Lawmakers advance bill to intervene in land dispute for wealthy drug distributor

Transmission towers carry electricity in LaPlace on Dec. 28, 2021. (Photo credit: Wes Muller/Louisiana Illuminator)

State lawmakers advanced a bill Tuesday that intervenes in a land dispute and threatens to block construction of an interstate power line at the behest of a small group of north Louisiana landowners, including the wealthy owner of a large pharmaceutical company that made billions during the opioid crisis.  

Paul Dickson Sr. is a principal owner and former board chairman of the Shreveport-based Morris & Dickson Co., one of the largest wholesale pharmaceutical distributors in the nation. It was the target of a federal investigation that revealed one of its own agents was secretly negotiating with the company to preserve its federal license. 

Senate Bill 108, sponsored by Sen. Alan Seabaugh, R-Shreveport, stands to benefit Dickson in his dispute with a Texas power company. It cleared the House Committee on Civil Law and Procedure without objection and will head to the House floor for consideration. 

The bill is tailored in ways that would effectively prohibit a single business from exercising its expropriation rights, which allow governments and certain companies to force the sale of private land for public use. It’s typically used for development of a project that serves a public need, such as a new highway or, as in this case, a power line. In exchange, the owner must be paid, at minimum, fair market value for their land. 

Proponents of Seabaugh’s measure tout it as a way to protect landowners from businesses and projects that don’t benefit the people of Louisiana. 

“We’re here because of one project,” Seabaugh told the committee. 

The project Seabaugh targets — Pattern Energy’s Southern Spirit Transmission line — would deliver electricity to the regional power grid that covers most of the state. 

The Southern Spirit Transmission project is a 320-mile line that will begin at a power station in DeSoto Parish and deliver wind power from the Texas grid to a power station in Choctaw County, Mississippi, crossing through North Louisiana. Onshore wind has been the cheapest source of electricity for the past several years in the United States and around the world, according to a study by the financial firm Lazard. 

Although the line would end in Mississippi, it would feed electricity into Louisiana by way of the regional Midcontinent Independent System Operator grid. The MISO grid covers most of Louisiana, and Mississippi and spans into a large swath of the Midwest and into Manitoba, Canada. 

Dickson told the committee Seabaugh’s bill won’t kill Pattern Energy’s project but will merely give the landowners a better advantage in their negotiations.

“It needs to be negotiated in the private sector,” Dickson said. “It will get done well… Right now, the landowner’s hands are tied behind his back. Senate Bill 108 gives the landowner the ability to negotiate by removing the threat of expropriation.”

Pattern Energy has claimed the project will bring economic development to towns and parishes in North Louisiana, but Public Service Commissioner Foster Campbell, D-Bossier City, said he hasn’t heard from any of those local officials. Campbell is against the Pattern transmission project but has not taken a position on Seabaugh’s bill.

“I’m troubled by the way they do business,” Campbell said in a phone interview, referring to Pattern Energy. He said it has been difficult to get straight answers from the company.

Seabaugh told the committee the power line would not deliver “one watt of electricity” to Louisiana and that the company would claim lucrative state tax incentives such as the Industrial Tax Exemption Program (ITEP). When it was his turn to testify, Pattern Energy executive Adam Renz failed to give concise answers in response to Seabaugh’s accusations, neither of which were accurate.

Instead, Renz gave lengthy, detailed explanations on the concepts of inter-regional interconnection, the history of the Southern Spirit project and the geography of the MISO grid. His long discourse continued even after lawmakers specifically pointed it out, asking for shorter answers.

When Renz finally did say electricity would indeed flow to Louisiana and that “we’re not using ITEP — you have my word,” half of the committee members had long ago left the room.

Pattern Energy land director Shannon Gwen and attorney Scott Keaty were more concise in their testimony. Gwen explained how the company has nearly acquired 60% of the land needed for the project and that it begins land negotiations with offers of at least 120% of market value. Keaty said he had deals worked out with the two landowners until Seabaugh filed his bill.

“We have not taken anybody’s property,” Keaty said. “We have not initiated any expropriation proceedings.”

The company has rerouted the transmission project 11 times at the request of one landowner who is still not satisfied, he said.

Even if Pattern Energy were to initiate expropriation proceedings for the land, it would have to do so through lawsuits filed in the landowner’s parish and would have to show the judge why the project is in the best interest of the public. Gwen said the company also includes value for any timber on the land and even pays the landowner’s legal fees if they hire an attorney to negotiate.

Many others testified against Seabaugh’s bill, including Public Service Commissioners Mike Francis, R-Crowley, and Davanté Lewis, D-Baton Rouge. 

Lewis said the bill is a big solution for what is a small contested issue. He said it will have “significant ramifications” for improving Louisiana’s grid and signal to other companies that Louisiana will change the rules on them at the finish line. 

The Louisiana-based utility Southwestern Electric Power Cooperative (SWEPCO) currently imports cheap electricity from wind turbines in Oklahoma — in the same way Louisiana would benefit from the Southern Spirit line — through the MISO grid, Lewis said. 

“If Oklahoma passed this same law, it would undoubtedly raise the rates for people in Louisiana,” Lewis said.

At the end of Tuesday’s hearing, the committee members who had left the room finally returned, having missed testimony given in support of the project. Even those lawmakers who stayed and voiced some sympathy to Pattern Energy’s position were confronted with one final question from Speaker Pro Tempore Rep. Mike Johnson, R-Pineville, who had returned to his chair just before the bill’s fate was decided. 

“Sen. Seabaugh, I have just one question, and I don’t think I heard it in your testimony earlier: Do you know if the governor supports or opposes your bill?” Johnson said.

Seabaugh replied that Gov. Jeff Landry “quietly supports it” but admitted he doesn’t “quite know what that means.”

“If he opposed it, he wouldn’t likely be quiet, would he?” Johnson asked.

“I think that’s probably correct,” Seabaugh said.

When committee chairman Rep. Nicholas Muscarello, R-Hammond, asked if anyone objected to moving the bill favorably to the floor, the lawmakers remained silent. 

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