Section 4.6.5.1.1

4.6.5.1.1. “Going Rates” and Nonmarket Considerations.For some types of easements, such as for electric, telephone, fiber optics, cable, transmission line, or pipeline purposes, there may be a customary “going rate” (per pole, per line-mile, or per rod, for example). But while customary rates may offer a convenient pricing system in other settings, going rates cannot be used as a proxy for market value in federal acquisitions requiring payment of just compensation.890 Going rates tend to reflect non-compensable considerations above the market value of the property acquired, such as avoiding the cost of condemnation or other litigation, and economic pressures to complete construction and place the planned facility or infrastructure in operation. As the Fifth Circuit recognized, “consideration of the expense and lost motion involved in relocation, additional construction, pipe and material costs and delay—none of which relate to the fair market value—are inevitably involved.”891 Amid such nonmarket considerations, “[t]here is no basis for translating a dollar per rod settlement figure into a market value per acre figure.” 892 Moreover, the use of a “going rate” improperly assumes the easement acquired is a separate economic unit to be valued based on the government’s planned use of the property—assumptions the federal courts reject as improper.893 For these reasons, appraisals of easements for federal acquisitions cannot be based upon going rates but rather must be based upon the accepted before and after appraisal method.894