Cell Phone Carrier- Theft of Utilities

The standard cell tower lease typically includes a provision that requires the cell site tenant to pay for all electricity it uses in connection with the operation of its equipment. This can be accomplished in one of two ways. The first way is through a direct meter, in which the carrier installs its own monitoring device on the landowner’s property that exclusively monitors the carrier’s use of electricity. In this instance, the carrier has its own separate account with the utility company. The second way is through a sub-meter, in which the cell phone carrier installs a monitoring device that attaches to the landowner’s existing meter on the property. This also monitor’s the carrier’s use of electricity, however, the cell carrier’s electricity usage is part of the landowner’s bill with the utility company.

While either of the above scenarios seem to adequately protect the landowner, we have seen many instances where the cell phone carrier finds a loophole in this provision. Specifically, what happens when the cell site tenant uses electricity during its due diligence phase or initial construction or testing phase of the property but prior to the installation of a direct meter or sub-meter? The carrier simply taps into the existing power source and rarely brings it to the landowner’s attention. Moreover, without a monitoring device, there is no way for the landowner to determine how much electricity is actually being consumed by the cell carrier. The result is that the landowner winds up paying for the electricity consumed by the carrier. Depending on the amount of due diligence and preliminary work involved, this can be become expensive to the landowner.

Unfortunately, most landowners don’t closely examine their utility bills and therefore, don’t realize that they are unnecessarily paying for electricity used by the cell carrier. In those instances when a landowner does realize after the fact and bring it to the carrier’s attention, the carrier inevitably challenges the amount of electricity consumed and the associated charges. Hence, the landowner has an extremely difficult time recouping this expense, if at all.
At Cell Tower Attorney, we can assist you in drafting appropriate lease language that addresses a carrier’s use of electricity throughout the term of the lease and avoid the need to seek reimbursement from the carrier afterwards. If you believe that a carrier has illegally used electricity at your expense, please feel free to contact us. We can assist you in negotiating a settlement with the cell carrier for prior use of electricity and draft lease language to protect you from similar situations in the future.

Landowner's Property and Utility Company Easements

A client recently approached us for advice regarding a consent letter he received from one of the major cell phone companies seeking to place antennas on a transmission tower owned by the utility on his property. The letter stated that the cell phone company had recently entered into a lease agreement with the utility company for the use of the utility-owned tower within the easement granted to it by the landowner over 60 years ago. While the letter was requesting the landowner's consent to file its zoning application for the cell phone company’s use, it did not have any terms and conditions nor did it offer any compensation for the consent.

The general language of the easement granted the utility company certain rights of use, however, it did not permit the use of the easement for telecommunications purposes nor allow the use by third parties. After further discussions and negotiations, the cell phone company ultimately agreed to enter into an easement agreement with our client which included among other things, a monthly rental payment at market rates.

Based on our experience in assisting other clients, we believe that this type of scenario is happening frequently throughout the country. To their detriment, many unknowing landowners assume incorrectly that the cell phone company has the right to use their property and that they are not entitled to any compensation. We suspect, however, that in many instances, the cell phone company does not have such rights and will only negotiate with a landowner when it is brought to their attention. In certain cases, we have found that the cell phone company never even contacted the owner at all and just installed their equipment.

If you have been contacted by cell phone company that has entered into a similar arrangement with a local utility, we can assist you in determining what rights, if any, you have to legally protect your property and seek compensation.