In short
To build a high voltage transmission line serving an AI data center, an electric utility must first get a state permit for the route. The permit process triggers eminent domain, the legal power to take private land for a public use in exchange for fair market value. Every state requires a finding of public necessity and offers landowners the chance to be heard before their property is taken. A federal backstop lets the Federal Energy Regulatory Commission (FERC) step in if a state blocks a needed line inside a designated energy corridor, but that authority has never been successfully used. The key deadline is one year, the maximum time a state may take to decide on a siting application before the federal backstop becomes available. In 2026, massive transmission projects in Virginia, Texas, Georgia, and Arizona are testing just how far eminent domain can go when the main user is a private AI data center, not the general public.
How does a utility get the right to build a power line?
In every state, the process follows a similar set of steps.
- The utility identifies the need for more transmission capacity and proposes a route.
- It files an application with the state public utility commission. The application is usually called a certificate of public convenience and necessity (CPCN) or certificate of convenience and necessity (CCN).
- The state agency mails notice to all property owners along the proposed route and holds public hearings. The agency must balance the need for the line against its impact on landowners, the environment, and scenic resources.
- If the commission approves the line, it issues the certificate. That certificate is what triggers the utility’s eminent domain power.
- The utility then contacts each landowner to negotiate a voluntary easement. The law requires the utility to make a good faith offer based on a certified appraisal of fair market value.
- If a landowner refuses, the utility can file a condemnation lawsuit in court. In many states, a panel of three special commissioners first sets the compensation. Either side can appeal and get a full trial before a jury.
This structure was built for an era when a new transmission line clearly served the public. The rise of hyperscale AI data centers, each pulling hundreds of megawatts, is testing whether that public use rationale still fits.
What is the federal backstop siting authority?
Normally, states alone decide where high voltage transmission lines go. But since the Energy Policy Act of 2005, federal law includes a limited override called the FERC backstop. It is found in section 216 of the Federal Power Act. 16 U.S.C. § 824p The Department of Energy (DOE) first designates National Interest Electric Transmission Corridors (NIETCs) where electric transmission capacity constraints or congestion adversely affects consumers or is expected to do so. 16 U.S.C. § 824p(a) Inside a NIETC, if a state either denies a siting application, puts conditions that make the project uneconomic, or simply fails to act within one year, FERC can take over and issue a federal permit. 16 U.S.C. § 824p(b)(1)(C)
The Infrastructure Investment and Jobs Act of 2021 strengthened the backstop. It corrected a 2009 court ruling that had said FERC could not override a state’s outright denial. IIJA § 40105 Now, a state denial is an explicit trigger.
FERC’s Order No. 1977, issued in May 2024, set the ground rules. Order No. 1977 An applicant must first spend one year in the state process. Only after that year can it start a prefiling at FERC. The state and federal reviews are sequential, not simultaneous. The order also requires applicants to follow an Applicant Code of Conduct. Agents must show identification, explain the process, and cannot use high pressure tactics or misrepresentations. There is also a Landowner Bill of Rights and environmental justice plans.
If FERC issues a permit, the permit holder can go to federal district court to take the needed rights of way by eminent domain. But the Commission must first determine the holder made good faith efforts to engage with landowners and other stakeholders early in the permitting process. 16 U.S.C. § 824p(e)
Despite all this law on the books, FERC’s backstop authority has never been successfully used to permit a single transmission line in the United States. Congressional Research Service The original NIETCs from 2007 were thrown out by a federal appeals court for insufficient environmental review. In May 2024, DOE announced a preliminary list of 10 new NIETCs, restarting the designation process, but none have been finalized with the required NEPA analysis. Tax alert
In practice, the entire fight over AI data center transmission lines stays in state hands. The federal backstop is a threat that has not yet materialized.
How does Virginia handle transmission line easements and eminent domain?
In Virginia, overhead electrical transmission lines of 138 kilovolts or more require a certificate of public convenience and necessity (CPCN) from the State Corporation Commission (SCC), and transmission lines of exactly 138 kilovolts may alternatively obtain local approval under § 15.2-2232 and applicable zoning ordinances. Va. Code § 56-265.2 The SCC must find the line is needed and that the chosen route reasonably minimizes adverse impact on scenic assets, historic and cultural resources, and the environment. The utility must send notice by first class mail to every property owner on the route at least 30 days before the SCC hearing.
Once the SCC issues a CPCN, the utility can use eminent domain under Va. Code § 56-49. Va. Code § 56-49 That statute allows a public service corporation to take any lands, easements, or rights of way needed for a transmission line. It also gives an adjacent landowner the right to claim damages for the loss in value caused by the line and to intervene in the condemnation case.
A critical protection for landowners is the 2012 amendment to the Virginia Constitution. Article I, Section 11 now says private property may be taken only for public use. In all other cases, a taking or damaging of private property is not for public use if the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development, except for the elimination of a public nuisance existing on the property. Va. Const. Art. I, § 11
Dominion’s Northern Virginia projects
Dominion Energy’s NOVA Reliability Loop shows how these rules play out. The final segment, the Golden to Mars 500 kV line across Loudoun County, was approved by the SCC in 2026. The SCC chose an overhead route, rejecting a far more expensive underground option. The preferred route runs near two schools, but the Loudoun County School Board has the power to block it. If it does, Dominion will use a backup route that cuts through a residential neighborhood, requiring new rights-of-way. News From The States
A smaller but telling project occurred in August 2025, when the SCC approved a CPCN for a Dominion substation and about one mile of transmission line to serve a 176 megawatt hyperscale AI data center in Fairfax County. Homeowner objections were overruled, but one commissioner wrote separately that it is time to reexamine how transmission costs are allocated. Virginia energy update
Virginia is also a landing point for long distance lines. The MidAtlantic Resiliency Link (MARL), a 107 mile 500 kV line from Pennsylvania to northern Virginia, is moving through state review in Pennsylvania, where NextEra is seeking eminent domain authority. WESA/Allegheny Front
On the rate side, the SCC created a new GS-5 class for customers drawing 25 megawatts or more, effective January 1, 2027. Certain large-scale customers must cover at least 85 percent of contracted distribution and transmission demand and 60 percent of generation demand. SCC news release This cost allocation shift may blunt the argument that residential ratepayers are subsidizing lines that benefit private companies.
How does Texas handle transmission line easements and eminent domain?
Texas places the Certificate of Convenience and Necessity (CCN) at the center of its transmission siting. The Public Utility Commission of Texas (PUCT) must find the certificate is necessary for the service, accommodation, convenience, or safety of the public. Tex. Util. Code § 37.056 The utility must mail notice to all landowners within 500 feet of the route centerline.
After a CCN is granted, the utility approaches each landowner to negotiate an easement. If the landowner says no, the utility follows the Texas Property Code Chapter 21 procedure. Tex. Prop. Code Ch. 21 That procedure provides strong landowner protections. The Texas Landowner’s Bill of Rights requires the utility to make a good faith written offer based on an appraisal by a certified appraiser before filing a condemnation petition. Texas Landowner’s Bill of Rights The case then goes to three special commissioners who set compensation. Either side may appeal for a trial de novo in county court, with the right to a jury.
Texas also writes on the face of its Landowner’s Bill of Rights that condemning authorities may not exercise eminent domain for tax revenue or economic development purposes. Texas Landowner’s Bill of Rights That clause is now being tested.
Permian Basin STEP and 765 kV lines
In April 2025, the PUCT approved three 765 kV transmission import paths as part of the Permian Basin Reliability Plan. AEP Texas These are the first 765 kV lines in ERCOT. Oncor and LCRA TSC filed CCN applications for the segments, with PUCT decisions expected in mid to late 2026. The Bell County East to Big Hill line stretches about 214 to 244 miles across 14 counties. The Big Hill to Sand Lake line is about 197 miles. The Howard Solstice project, a joint effort of AEP Texas and CPS Energy, is an approximately 370 mile 765 kV line with a CCN filed in March 2026. AEP Transmission, CPS Energy
These lines are enormous. Towers are 140 to 160 feet tall, requiring a permanent easement width of 200 feet and an additional 200 foot temporary construction area. Landowners estimate the average residential customer will pay about $200 more per year. PUCT Interchange landowner filing They argue the lines primarily serve private AI data centers and cryptocurrency mines, not the general public, and so fail the public necessity test. The PUCT has not yet ruled on the merits of those arguments.
A compressed review timeline under HB 5066, passed in 2023, requires the PUC to approve or deny a transmission CCN application within 180 days instead of the former one year deadline. HB 5066, SB 1076
How does Georgia handle transmission line easements and eminent domain?
Georgia Power, as a state regulated public utility, obtains its eminent domain power through certificates of convenience and necessity from the Georgia Public Service Commission (PSC). The utility states it uses eminent domain in less than one percent of all land transactions each year and calls it a last resort. NY Post
But the AI data center boom is pushing more landowners into that one percent. In December 2025, the PSC approved Georgia Power’s resource plan to acquire nearly 10 gigawatts of new capacity, much of it for AI data centers. The plan is estimated to cost customers $50 billion to $60 billion over its life. SELC The utility’s five year grid expansion plan is $16 billion, with roughly 80 percent earmarked for AI data center load. FOX 5 Atlanta
The PSC has tried to control costs through an AI data center tariff rule adopted in January 2025. Any new customer using more than 100 megawatts must pay upstream generation, transmission, and distribution costs and is subject to longer contracts and minimum billing. That rule, however, does not prevent the use of eminent domain.
Project Wansley
The most visible fight is Project Wansley, a 35 mile 500 kV line built by Georgia Power to serve the QTS Project Sail AI data center campus in Coweta and Fayette Counties. The line crosses more than 330 properties. Georgia Power says 20 to 30 homes will be demolished. The utility offered at least 125 percent of fair market value, but residents say the appraisals are far below what they believe their homes are worth. AJC, WSB-TV, WSB-TV, 11Alive
Ansley Brown’s TikTok about her family’s home drew 6 million views and brought national attention. Georgia Power says the line serves broad regional load growth and is not built just for one customer, but the direct connection to the QTS site makes that claim hard for landowners to accept.
Georgia’s eminent domain law has not yet been squarely challenged on the public use question for an AI data center line. But the Wansley dispute is a prime candidate for such a challenge.
How does Arizona handle transmission line siting and eminent domain?
Arizona requires a Certificate of Environmental Compatibility (CEC) from the Power Plant and Transmission Line Siting Committee, which must be affirmed and approved by the Arizona Corporation Commission (ACC), before a transmission line can be built. Ariz. Rev. Stat. § 40-360.03, Ariz. Rev. Stat. § 40-360.07 The Arizona Power Plant and Line Siting Committee holds a public hearing and makes a recommendation, then the full ACC votes. Public service corporations can use eminent domain under the state’s general condemnation statutes. Ariz. Rev. Stat. § 12-1111
Arizona has over 2,000 megawatts of operating data center capacity and more than 10,600 megawatts of planned capacity. ACC In April 2025, the ACC opened a docket to review whether current rate classifications adequately protect customers from AI data center costs. The Commission discussed a Trump administration pledge calling on technology companies to guarantee no cost increases for households, though that order’s legal force is untested. ACC, PBS News
Recent projects show Arizona’s approach. In 2019, the ACC approved a 1.45 mile 230 kV line for APS to serve two AI data centers in Goodyear. NewsData For Tucson Electric Power’s Project Blue AI data center, the developer agreed to pay for two new transmission lines alongside the energy supply agreement approved in December 2025. Arizona Capitol Times And a 700.2 megawatt gas plant co located with an AI data center received a CEC in February 2026, with the developer bringing its own power solution so ratepayers bear none of the costs to power the facility. Arizona Daily Independent
So far, Arizona has not seen the same fierce eminent domain battles as Virginia or Georgia, partly because developers and utilities have structured agreements so that the AI data center, not the ratepayer, pays for the new transmission. That upfront cost commitment can weaken the argument that the taking is for private gain.
How does Florida handle transmission line easements and eminent domain?
Under Chapter 361 of the Florida Statutes, electric utilities participating in a joint electric power supply project may exercise the power of eminent domain as it relates to the project. Fla. Stat. Ch. 361 The procedure, set out in Chapters 73 and 74, requires the utility to prove a public need, evaluate alternative routes, and pay full fair market value. Florida DEP The Florida Constitution demands full compensation, not merely just compensation, a higher standard. Fla. Const. Art. X, § 6
Florida has not yet seen a high profile eminent domain dispute over an AI data center transmission line. But a new law, SB 484, effective July 1, 2026, will regulate large scale AI data centers through local land use authority, utility tariff requirements, and water permitting restrictions. SB 484 The law defines a large load customer as one with an anticipated monthly peak demand of 50 megawatts or more at a single location. It directs the PSC to develop tariffs ensuring those customers pay the full cost of serving them, including contributions in aid of construction, demand charges, and minimum contract terms with early termination fees. It also prohibits service to foreign entities from countries of concern.
Florida Power & Light already had large load tariffs in place, effective January 1, 2026, for customers using 50 megawatts or more with an 85 percent load factor. EEI Large Load Tariffs Those served as a model for the new law.
The eminent domain angle is indirect but real. When an AI data center developer must pay for the transmission line itself through a contribution in aid of construction, the project looks less like a taking for a private company’s benefit at public expense. That can blunt the public use challenge that is gaining traction in other states.
When is an AI data center power line a public use?
Every state constitution and eminent domain statute requires that a taking be for a public use. For decades, courts have assumed that transmission lines built by public utilities satisfy this requirement, because electricity is essential and the grid benefits everyone. The question now is whether a line built specifically and primarily to power a single private AI data center still qualifies.
The post-Kelo constitutional amendments in Virginia and the explicit prohibition in the Texas Landowner’s Bill of Rights say that a taking may not be for private gain or economic development. In Georgia, the constitution requires public use, and landowners in the Wansley project argue that a line serving a single company’s campus is not for the public. The Florida Constitution similarly requires a public purpose.
No court has yet ruled that an AI data center transmission line fails the public use test, but the legal arguments are sharpening. One law review article argues that AI data centers should be classified as public utilities, which would include tailored eminent domain powers. DiNunzio, 12 Tex. A&M J. Prop. L. 617 Opponents counter that a single user facility does not become a public good simply because it consumes a lot of power.
The outcomes of pending cases will matter. The Texas PUCT’s decisions on the STEP CCNs, the Maryland PSC’s ruling on the MPRP motion to dismiss, and any court challenge to the Wansley takings are the ones to watch. The PUCT, in particular, must reconcile its public necessity finding with the statutory ban on economic development takings. How it handles that tension may become a template for the rest of the country.
Key takeaways
- The siting of a transmission line for an AI data center is almost always a state decision. The federal backstop has never been used successfully and is not a near term option for developers.
- In Virginia, the SCC must approve any line of 138 kV or more after mailed notice to all affected landowners. The 2012 constitutional amendment limits takings to legitimate public uses.
- Texas gives landowners strong procedural rights, including an appraisal based offer and a jury trial on compensation. The explicit ban on takings for economic development is a live issue in the STEP 765 kV cases.
- Georgia Power’s use of eminent domain for Project Wansley, where homes are being taken for a line serving a single AI data center campus, is a national test case.
- Arizona requires a CEC and has so far structured AI data center projects so that developers, not ratepayers, pay for new transmission lines, reducing eminent domain friction.
- Florida’s new SB 484 mandates full cost of service tariffs for loads of 50 MW or more and requires full compensation under the state constitution. This may lower the temperature on public use disputes.
- The unresolved legal question of whether an AI data center line qualifies as a public use will likely be answered first in Texas or Georgia. Counsel on both sides should prepare for the argument now.
Frequently asked questions
Q:What is an easement and how is it different from eminent domain?
A:An easement is a right to use a strip of land for a specific purpose, like building a power line, without owning the land. A utility first tries to buy an easement from the landowner voluntarily. Eminent domain is the court process that forces the sale if the landowner refuses. In an eminent domain case, the landowner keeps title to the land but the utility gets a permanent easement, and the landowner receives fair market value.
Q:How long does it take to get a state certificate for a transmission line?
A:The timeline varies. In Virginia, the SCC process can take over a year. In Texas, the PUCT now has a compressed 180 day deadline for new transmission facility CCN applications under HB 5066. HB 5066 The one year mark is a critical federal trigger. If a state does not act on a siting application within one year after the later of the application filing or the NIETC designation, the applicant could eventually seek a FERC backstop permit, provided the project is in a designated NIETC. 16 U.S.C. § 824p(b)(1)(C)
Q:Can a landowner stop a transmission line from being built on their property?
A:It is difficult to stop the line entirely, because state law gives utilities a strong presumption of public necessity once the certificate is issued. But a landowner can challenge the route and the public need during the certificate hearing, intervene in the condemnation case, and challenge the amount of compensation. In some states, if the primary beneficiary is a private company, a landowner may argue the taking does not serve a public use.
Q:What does a certificate of public convenience and necessity (CPCN) do?
A:A CPCN, also called a CCN in Texas and Georgia, is the state permit that approves the route and the construction of a transmission line. It is the key document that unlocks the utility’s power of eminent domain. Without it, the utility cannot force any landowner to sell.
Q:How is compensation determined when the utility takes my land?
A:The utility must have a certified appraiser determine fair market value. It must make a good faith written offer based on that appraisal. If you reject it and the case goes to court, a panel of commissioners or a jury will decide the value. In many states, you can present your own evidence. Florida and Texas have especially strong rights. Florida requires full compensation, and Texas gives you the right to a jury trial on the amount.
Q:What is the one year rule for federal backstop siting?
A:Under the Federal Power Act, if a state does not issue a final decision on a transmission siting application within one year after the application is filed or a NIETC is designated (whichever is later), the applicant can eventually petition FERC for a federal permit. 16 U.S.C. § 824p(b)(1)(C)(i) The state must still have a chance to act first. The one year clock is a waiting period.
Q:Has FERC ever used its backstop siting authority?
A:No. Despite the law being on the books since 2005, no transmission line has ever been built using a FERC backstop permit. The original NIETCs were vacated by a court in 2011. New corridors were proposed in 2024 but have not been finalized. Academic analysis, DOE FAQ, DOE NIETC status
Q:Can an AI data center developer itself exercise eminent domain?
A:Generally no. The power of eminent domain belongs to public utilities and governmental entities that hold a state certificate. A private AI data center developer cannot force a landowner to sell for a power line. Only the regulated utility can do that, after it gets the necessary state permits.
Q:Who pays for the new transmission line?
A:Traditionally, the cost of transmission infrastructure was spread across all ratepayers. Today, in all five markets, regulators are shifting the cost onto the AI data center that causes the need. Florida’s new large load law requires large load customers to bear their full cost of service including incremental transmission, ensuring those costs are not shifted to the general body of ratepayers. The Capitolist, Ch. 2026-65, SB 484 This shift is one of the most important changes in the industry and directly affects the public use calculus.
Q:What should a landowner do when they receive notice of a proposed transmission line?
A:First, do not ignore it. The notice will tell you when the public hearing is and how to file comments. Second, get your own appraisal so you know what your property is worth. Third, consider hiring an attorney who handles eminent domain cases. The utility’s initial offer is often not the final word, and you may be entitled to more compensation, especially if you can show the taking is not for a true public use.
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Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.