NZIER report on compensation for transmission infrastructure

3.8 Summary of literature key points
Efficiency: calculating easement costs
Compensation is usually a function of:
easement area and land value
operational costs
injurious affection
disturbance.
Easement area is compensated at land market value for 100 percent of the
„footprint‟ and for 100 percent of easement area through commercial forests.
Other land uses are usually compensated based on how remaining easement
land can be used for normal farming operations.
Land value is generally based on market data, although the accuracy of such data
is disputed by some authors.
Equity: payment methods
We found examples of lump-sum one-off payments; lump-sum together with
periodic and reviewable payments; and periodic payments only. In theory the
current value of a lump-sum payment is the same as periodic payments, with
preference for one or the other reflecting time preference or willingness to bear
risk.
Equity: splitting the surplus
The same base factors are generally used to determine operational costs in
different countries, although exactly how compensation is calculated in practice is
not always clear.
Some countries award compensation for damage to views and perceived damage
to health from EMFs, although again it is not clear how compensation is
calculated.
Other
Damages - In all cases compensation is awarded for one-off direct damages
caused during the transmission lines construction.
Negotiating strength - Utilities are usually in better bargaining positions than
landowners due to compulsory acquisition powers, greater size, experience and
awareness of the compensation process. Landowners‟ positions are strengthened
by joining forces and hold-out possibilities.
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