Well, it's finally happened.  An electric transmission owner sited its line in the backyard of the wrong person.  Those transmission siting etch-a-sketch toys can be so risky!

And now the way society thinks about the use of eminent domain for energy transmission easements is about to change.

Andrew P. Morriss, Dean & Anthony G. Buzbee Dean’s Endowed Chairholder, Texas A&M School of Law; Senior Fellow, Property & Environment Research Center; Senior Fellow, Reason Foundation; and Research Scholar, Regulatory Studies Center, George Washington University. A.B. Princeton University; J.D., M.Pub.Aff. The University of Texas at Austin; Ph.D. (Economics) M.I.T., lately found himself in the bullseye of an electric transmission project.  And he hired counsel.  And then Morris and his lawyers wrote a paper published in the LSU Journal of Energy Law and Resources.
In the interests of full disclosure, we should note that we are not neutral observers of
eminent domain abuse in this area. Morriss’s wife’s parents, wife, brother-inlaw, and sister-in-law are involved in proceedings contesting the valuation of a power transmission easement across property held by a family limited partnership in Kimble County, Texas, in which they are represented by Barron & Adler. As a result, none of us feels particularly charitable toward utilities that make use of eminent domain for acquisition of power line corridors.
Whoopsy!  But, finally, someone with a big enough megaphone to question the utility easement status quo has done the unspeakable -- suggested that the use of eminent domain for "large infrastructure easements" (or LIEs, proving that acronym creation is an art) should end.
We argue that eminent domain laws need to be reformed to address these problems. The simplest reform is to eliminate eminent domain from LIEs entirely, forcing utilities to negotiate easement terms in arm’s length transactions and leveling the playing field between the utilities and landowners. Because the burdened landowners are a dispersed and unorganized interest group, while utilities have considerable political clout, this may be
unobtainable through the political process in many states. Similarly, the even more potent “bootleggers and Baptists” coalition of utilities and environmental pressure groups, which
back expansion of transmission lines for renewable energy, if not natural gas or oil pipelines, mobilize powerful interests behind
maintaining the power.
In Involuntary Cotenants: Eminent Domain and Energy
and Communications Infrastructure Growth
, Morriss and his co-author attorneys point out the bald truth about utility LIEs:
  • Easement agreements are written by utilities in their own interests.
  • Easement agreements do not adequately compensate landowners.
  • Courts hearing the eminent domain case simply accept the easement agreement as written and concentrate solely on "fair market value" of the property taken.
Why do we allow ourselves to be treated this way?
Much of the growth is likely to involve the use of eminent domain because utilities and
governments often consider eminent domain to be a cheaper and easier alternative to negotiating with potentially resistant, unhappy landowners for the acquisition of property.
The paper points out that in lieu of doing away with utility eminent domain authority altogether, reform is needed.
 For example, providing courts (and other third parties with roles in eminent domain proceedings) with the opportunity to alter the easement terms proposed by utilities for LIEs would serve as an important step toward solving many of the problems we describe. In addition, states and the federal government can take further steps to improve the LIE acquisition process by gathering and disseminating market data to, and providing greater statutory guidance for, valuation
The five reforms recommended in the paper include:
  1. Limiting eminent domain power of utilities.
  2. Empowering neutral decision makers to structure easements.
  3. Create exit rights.  (Utilities should not be able to take perpetual easements).
  4. Create better data on LIE costs and provisions.
  5. Establish standards to guide determination of value.  (Not all costs to landowners are immediate or quantifiable).
The paper is also a great guide to things you should consider adding to any proposed easement agreement presented to you by a utility during the "good faith" negotiation period required by law before the utility resorts to eminent domain.  Of course, the utility will most likely bat your efforts away, but in that case, how much "good faith" is the utility actually displaying?  It's all about the money to them, although money is usually at the bottom of the landowner's list of concerns about involuntarily hosting a utility LIE.

And this paper makes you think.  Ever since I saw my first purchase option agreement and easement agreement presented to landowners by the PATH transmission company more than five years ago, I've wondered how anyone thinks this playing field is fair.  The agreements contained many clauses that I would never agree to, however these agreements are often presented to landowners lacking legal knowledge of any kind, and without the benefit of counsel.  When real estate changes hands in a market-based arm's length transaction, both parties are represented by their own counsel.  It's the way we do things.  Have you ever sold your real property sitting alone at your kitchen table with a fast-talking stranger who's just come knocking on your door, checkbook in hand?  Of course not, unless you've been a victim of a utility LIE.  Why is it okay for utilities to prey on landowners this way?  This needs to stop!  The landowner should have the right to independent counsel, at the utility's expense, before signing any agreements.  In fact, it should be required.

Any why should eminent domain for utility LIES continue?  If you've never been affected by a LIE, you may think eminent domain is a necessary evil to providing a public necessity, like electricity, highways, and other public infrastructure.  Arrogant eminent domain proponents believe that because the power you use required an easement across someone else's land at some point, that you should be eager to provide that same easement for someone else's electric need.  It's been many, many years since America was electrified.  During electrification, eminent domain was accepted because everyone was getting the benefit of the infrastructure.  Today, some greedy transmission companies are proposing eminent domain be used for LIES that aren't needed to provide anyone with basic service.  Transmission lines have been proposed that are intended to make the electricity cities waste keeping their skylines lit up all night "greener."  This isn't public necessity.  It's keeping you stupid believing that utilities shall have the right of eminent domain for whatever they propose.  It's time to rethink this because America is rebelling against this kind of thinking in a big, big way.

Start your thought journey by reading the Morriss paper.  And think, really think, what if this happened to me?  Because if we let this continue unabated, it will.

This post wouldn't be complete without thanks to Janna Swanson in Iowa for digging up this thought-provoking paper.  Janna
moonlights as an energy activist and researcher, when not producing food to feed ungrateful utility executive pieholes.
Let's get the profitable infrastructure project party started!
A landowner from southeast Iowa today said he has recorded proof a land agent for the proposed Bakken Pipeline offered to get him an 18-year-old prostitute if he’d grant access rights to his property so the pipeline may pass through.

Hughie Tweedy of Montrose said he recorded two of his conversations with the land agent.
“On these recordings you will hear evidence of my senior pipeline representative offering me not once, not twice, but three times the sexual services of a woman,” Tweedy said, “the last time being a $1200 teenage prostitute.”

“If anybody knows of anyone who’s been dealt with unfairly,” Boeyink says, “get the names to me and we will deal with it swiftly.”
I'm thinking Boeyink didn't move too "swiftly."  Or maybe he's been a whirling dervish but simply can't keep up with the unsavory activities of his hired land agents.

Whether it's offering ponies and prostitutes to landowners in exchange for easements, or pizza parties and puppy chow to college students in exchange for signatures on petitions of support, buying public support for infrastructure projects is big business! 

And who do you think is first in line for the free cheese?
“If an old junkyard dog like me was offered the sexual services of little girls to get my hackles down, I wonder what was offered to the powerbrokers of this state to gain their support for silence,” Tweedy said. “Shame, shame, shame.”
Can't add anything to that wisdom.
Great news out of Iowa yesterday!  Legislation targeted to restrict the use of eminent domain by private companies not serving Iowans advanced as hundreds of landowners and other stakeholders gathered to speak out at a subcommittee meeting at the Capitol.

NPR has the story.  Listen to the audio, it's better than the print version.

Several landowners spoke out about abusive practices of land agents attempting to secure right-of-way.

“I've heard this from other landowners being told the same thing,” Murray says. “Right-of-way agents are saying this is inevitable so you better take the easement deal before you.”
A spokesman for Bakken crude pipeline company Dakota Access said what the companies always say when faced with the transgressions of their shifty land agents:
“If anybody knows of anyone who’s been dealt with unfairly,” Boeyink says, “get the names to me and we will deal with it swiftly.”
Yada, yada, yada, we will fire any land agent who violates the "code of conduct."  Tell me, if land agents were regularly subjected to firing for using abusively coercive tactics to secure easements, why does it still happen with such regularity?  I don't think I believe it.  I think it's merely window dressing for instances where a land agent is caught by a landowner in a pack of lies.  I think that companies routinely look the other way when violations occur, as long as easement agreements are being filed.  Because for every one unscrupulous land agent that gets reported in the media, there are probably hundreds of others that got away with it.  I have heard numerous horror stories about transmission right-of-way land agents, continuing up until the present.  Where there's this much smoke, there is certainly fire.

The Sierra Club seems to be backing off its hypocritical support of Clean Line transmission projects, while simultaneously opposing pipelines as an abuse of eminent domain.
Wally Taylor of Cedar Rapids, a lawyer for the Iowa chapter of the Sierra Club, said his organization is worried about an "extreme risk to property and the environment" if the pipeline project proceeds. There is no doubt that oil spills will occur and it will be many years before the land can be farmed again, he added.

It's also clear that if Bakken crude oil is transported through Iowa, it will be shipped from Illinois onto the world petroleum market via the Gulf of Mexico, Taylor said. "This is all about private property. It isn't about benefiting Iowa or the nation," he said. Similarly, the Rock Island Clean Line would not provide a way for Iowans to connect to the line or to obtain energy from the transmission facility, he added.
That's right, Sierra Club!  Clean Line does not provide a way for pass-thru states to benefit from its projects!   The projects also destroy the environment and economy of pass-thru states and won't actually shut down any coal plants.  Not one!  Sierra Club should really get its act together here and stop worshipping at the alter of grant funding and renewable energy make-believe.

Clean Line's spokesperson tried to get the committee to believe the company plans on acquiring more than 90% of the easements it needs voluntarily. 

Paula Dierenfeld, representing Clean Line Energy Partners, said her company currently has obtained voluntary easements from about 15 to 20 percent of property owners and has a goal of obtaining "well in excess of 90 percent" voluntary easements. But she questioned the proposed requirement to obtain 75 percent voluntary sign-ups before eminent domain can be requested. She said a company could spend millions of dollars on obtaining easements without even knowing whether a project could move forward. She asked whether any businesses would support that idea.
Paula must be new.  Clean Line has obtained all the voluntary easements it's going to get, even with the hard sell tactics reported by Mr. Murray.  15%.  That's it.  The rest is a fairy tale.  The  people of Iowa aren't buying what you're selling.  You know, Paula, risk is a big, big part of being in the merchant transmission business when you don't have an order to construct the project from a regional transmission authority.  Maybe you should ask your bosses at Clean Line why they're supporting the company spending millions of dollars on obtaining easements without even knowing whether their project could move forward?

Way to go, Iowa!
Silly!  But that's exactly what Grain Belt Express expects the Missouri Public Service Commission to do -- issue a permit for the project and then trust Grain Belt Express to later meet all the requirements for a permit.  In the words of the attorney for one of the intervening landowner groups:
Even though the Commission gave GBE a second chance to provide the additional information the Commission said it requires in order to make a decision in this case, GBE did not provide the requested information. Much of the requested information—for example, the RTO interconnection studies—will not be available for some time, perhaps years. And, GBE may never be able to get the required consents from all of the county commissions. GBE’s general attitude is summed up thusly: Trust us—we will give you the information only after you give us our CCN.
As you may recall, instead of making a decision on the application of Grain Belt Express for a Certificate of Convenience and Necessity after going through all the motions of a contested case (discovery, testimony, evidentiary hearing), the MO PSC issued an Order demanding more information from the applicant.  This would be additional evidence submitted after the hearing record had closed.  This generates due process concerns, and the PSC had asked the parties how they wanted to deal with this submission of additional evidence.

The response of of Show Me Concerned Landowners points out that Clean Line didn't actually submit the information ordered -- in many instances, it submitted excuses for not providing information, claiming that it would provide the necessary information AFTER the MO PSC issued the CCN.  Clean Line seems to overlook the fact that much of this information is REQUIRED in order to issue the permit in the first place!  No information, no permit.  It's as simple as that.
The Commission should not allow GBE to play this “which comes first—the chicken or the egg” game. Show Me recommends that the Commission deny GBE’s Application without prejudice. GBE is free to refile its Application after it obtains all of the relevant information and documentation that the law and this Commission require.
The Missouri Landowners Alliance, another landowner group, took a different approach to this permitting circus:  Asking that the entire legal process be repeated in order to allow this new evidence to be examined and rebutted by the other parties.  That should only add... oh... another year or so to the permitting process?

But wait, Clean Line is whining about the amount of time this is taking!  It's already been more than a year! 
The Commission’s supplemental procedure should be scheduled with consideration given to the time that has already elapsed in this case. The Company filed its Application for a Certificate of Convenience and Necessity on March 26, 2014, over 12 months ago. Staff and other parties conducted extensive discovery regarding the Company’s Application, testimony, and schedules. The Commission held eight local public hearings, which occurred on August 12 and 14, and September 3 and 4. Three rounds of pre-filed testimony occurred, and the Commission conducted five days of evidentiary hearings (November 10, November 12-14, and November 21).
...and then the Commission ordered GBE to submit new evidence after the record had closed.  Return to "Go!"

United for Missouri, another citizens' group, thinks the whole idea of asking for more evidence after the record is closed isn't legal in the first place and the PSC should just deny GBE's application outright:
UFM recommends that the Commission reject the Grain Belt Express Response and deny Grain Belt Express’ application because the Commission misapplied its rules in its March 11 Order. The Commission’s order, therefore, was unlawful, arbitrary and capricious. Further, a review of the Grain Belt Express Response shows that there is very little additional relevant evidence to be adduced in additional proceedings. As a result, further proceedings would be inappropriate and a useless exercise. Finally, a review of the Grain Belt Express Response confirms UFM’s argument in its briefs previously filed in this case, that the proposed facilities are a private enterprise not devoted to the public convenience or necessity, and therefore are not qualified to receive a certificate of convenience and necessity.
And the Missouri Farm Bureau can't resist pointing out how futile this whole exercise has been:
Another initial point pertains to the information provided on the number of voluntary easements Grain Belt Express has obtained from landowners on the proposed route. According to Supplemental Exhibit 1 of Grain Belt Express’ Response, out of 724 tracts of land, Grain Belt Express has acquired only 45 easements voluntarily—about 6.2%. Grain Belt Express has been aggressively pursuing voluntary easements from landowners for a year. Given Grain Belt Express’ lack of success in convincing landowners that this is a good project for Missouri, granting Grain Belt Express the power of eminent domain would be inappropriate.
Really?  Would the MO PSC really grant eminent domain to a company that's going to need to use it on 93.8% of the properties?

Perhaps the MO PSC should have just denied the application in the first place, instead of opening this can of worms.  It's not too late!
If Clean Line's "Code of Conduct for Land Agents" was any more than window dressing, landowner reports of harassment by Clean Line land agents wouldn't keep happening.  It's nothing but a piece of paper Clean Line uses as a fig leaf to cover its transgressions.

Who enforces the "Code?"  Clean Line says it does.  How is this enforcement undertaken?  Nobody knows.  Despite continual public statements that Clean Line doesn't condone the kind of behavior that has been reported by landowners over and over again, there's never any obvious "enforcement," and the company's agents simply continue harassing landowners.
In a recent letter to the editor, Ms. Mary Adair Horsechief stated that “a representative of Plains & Eastern Clean Line recently dropped by” her home and he told her she “had no recourse but to let them take our land for their use.” Clean Line takes these assertions seriously and we do not condone or endorse statements like the one Ms. Horsechief claims was made on our behalf. Clean Line is committed to treating every landowner with consideration and respect. We require our representatives to follow a Code of Conduct that can be downloaded from our website. We strive to maintain long-lasting relationships with landowners by working in a respectful and collaborative manner. If you have information on interactions you have had with a Clean Line representative that goes against this code, we would like to know. Please contact us at 1-877-573-2851 or info@plainsandeasterncleanline.com and someone will respond to you in a timely fashion.
Read Mary Horsechief's entire Letter to the Editor here.

This isn't the first report of heavy-handed Clean Line land agent tactics, and I doubt it will be the last.  There's something wrong with the company doing Clean Line's land acquisitions.  They're not abiding by the Code of Conduct.  What's the punishment?  Judging from the continuation of this behavior... there is no punishment.

If you had contracted a company to do a job, given them a set of rules, and then the company systematically violated those rules and caused your company bad will in the community that could ultimately derail your entire project, would you fire them?  I would.

Instead, Clean Line keeps making excuses for this kind of behavior and pretending it's doing something about it.  Oh, poppycock, Mario!  Actions speak louder than words!

However, the "Land Agent Code of Conduct" is an old transmission owner trick that has been recycled again and again.  In fact, Clean Line's "code" was plagiarized nearly word for word from previous "Codes of Conduct" used by Allegheny Energy for its TrAIL and PATH projects.  In its original form on the TrAIL project, the "Code" was enforceable by the court.  The very idea that the company responsible for these transgressions would police itself is ludicrous!

In addition, Mario goes on and on disseminating his "facts" about how his project won't have health effects and will provide "opportunities" for landowners.  He's preaching to the choir.  No matter how many times Clean Line repeats this mantra, nobody believes it.  A company selling the benefits of its own project is ALWAYS suspected of dishonesty and bias from its public.  There is no amount of "information" from the company that's going to turn public opinion.  It's just not going to happen.

Here's what's actually happening... a fantastically researched and fairly presented story about Clean Line from NPR, Big Wind Blowing Through North ArkansasGive it a listen.

The jig is up, Clean Line!
Just one more post about Requests for Rehearing of the Illinois Commission's issuance of a conditional permit for the Rock Island Clean Line.

The Illinois Landowners Alliance not only reiterates the arguments put forth by ComEd and the Illinois Farm Bureau, but adds a stylish lambasting of the Commission for permitting "a significant and unwarranted intrusion upon landowners."
ILA’s witnesses and its many other members have expressed repeatedly their uniform opposition to the Project, routing and treatment of landowners and their concerns. The Order’s granting of a CPCN to Rock Island will permit Rock Island to force its way onto landowner property to “make land surveys and land use studies” (220 ILCS 5/8-510), a significant and unwarranted intrusion upon affected landowners for a project that is so speculative and tenuous.
Although the ICC significantly conditioned RICL's permit before any actual construction begins, and denied them eminent domain authority at this time, the ICC also allowed RICL immediate access to private property to conduct its "surveys."

It's a powder keg.  Let's hope it doesn't explode before the ICC reconsiders its misguided decision to order the trespassing and destruction of private property by a company with no financial assets.  The landowners don't seem to have changed their opinion about RICL and probably aren't going to welcome them to their properties with open arms and a forgiving attitude.  I hope the ICC thinks this though...
Finally got around to reviewing the Illinois Commerce Commission's 200+ page final Order on Clean Line's RICL project.  Imagine my shock and horror to find that the actual Order bore no resemblance to the posturing Clean Line did for the media immediately following the Commission's vote.

Clean Line is nothing if not optimistic about its business plan to construct nearly 2000 miles of new "merchant" transmission lines across eight Midwestern states.  However, Clean Line's claims rarely comport with reality.  Isn't it odd that Clean Line had a press release ready to go the second the Commission voted?  It's all about pretending the Commission's decision "marks a critical milestone needed to deliver low-cost wind energy to Illinois and [those mysterious, unnamed] states farther east," no matter what the actual Order said.

And the press ate it up.  Shame on them!  The rest of us have been snickering at how much egg ended up on Clean Line's face for running with a media fantasy, and now the REAL story shall be told.

The ICC's Order issued a CPCN for the proposed business plan, finding it would be "needful and useful to promote competitive electricity markets in Illinois" if it ever gets built.  However, the Commission also found that RICL is not necessary to provide adequate service to customers, and that is is not necessary.  In addition, the Order requires Clean Line to jump some pretty high hurdles to make its business plan actually happen before it can build anything.
  A couple of conditions the ICC attached to the CPCN require that the company make a compliance filing demonstrating that it has funds available to construct the entire project before beginning any construction.  The ICC also attached a stipulation making the CPCN null and void if Clean Line attempts to allocate costs of its project to Illinois ratepayers through regional cost allocation administered by regional transmission organizations and FERC.  And, all this must happen within 2 years from the date of issue.  Tick-tock, Clean Line!

Oh... where to begin?  Let's talk about that financing stipulation.  In order to convince lenders to pony up the money to build the project, Clean Line must demonstrate an income stream.  It needs to have signed contracts with shippers or end users.  It has no end users.  The proposed shippers have not even been constructed yet.  In order to construct these mythical shippers (wind farms), the wind farms also have to borrow money to construct their projects.  In order to receive financing to build, these shippers must also demonstrate an income stream via signed contracts with purchasers.  It's a headache-inducing string of dominoes fraught with risk.  Utilities hate risk.  If utilities need to purchase renewables, there's plenty of EXISTING renewables available at concrete prices.  Since none of Clean Line's shippers exist, none of their proposed prices can be negotiated into signed contracts.  Remember... only two years to get this done!  And if you think it's going to happen, I'm a fairy princess.

Because the ICC did not find the project necessary under Sec. 8-503 of the PUA, Clean Line's CPCN only authorizes the company to build on voluntarily-negotiated easements.  The easements Clean Line has managed to sign with landowners are few and far between.  The rest of the landowners have rejected Clean Line's efforts and may continue to do so.  Clean Line was so certain that it would be granted eminent domain authority to take property that it has disrespected landowners with fantastical claims that bear no resemblance to reality
, along with underhanded tactics and empty promises.  You've got to get up pretty early in the morning to fool a farmer.  Nobody's buying it.  And since Clean Line has already ruined any possible cordial relationship with landowners, it is unlikely to regain what has already been tossed away.

And that brings us to the match tossed into the powder keg...  the CPCN issued by the ICC:

The Commission also observes that the approval of a line route as part of this Certificate Order should facilitate negotiations with landowners, and that the issuance of the Certificate will enable Rock Island to gain access to the property to conduct surveys and related activities, which are steps characterized by Rock Island as important ones in which to engage in the near future.
That's funny.  The Commission was so uncertain about this company's financial resources that it required it to have financing in place before beginning construction, but yet this same company can now enter upon and damage private property to conduct its surveys, without the demonstrated financial resources to guarantee that landowners will be compensated for damages.  What happens when Clean Line's surveys damage private property and the company refuses to make landowners whole?  Where's the remedy for landowners?  Will the ICC be policing Clean Line's survey activities?  Will landowners be left swinging in the wind with only a civil remedy?  And, I don't think Clean Line barging onto private property and leaving a mess behind will "facilitate negotiations with landowners."  Call me jaded...

So, Illinois landowner groups now have been handed the task of figuring out how to protect their interests all on their own.  And they will.

Two years, remember that.

And, in addition, RICL has just barely begun the permitting process in Iowa, where thousands of landowners have joined forces as the Preservation of Rural Iowa Alliance, and hired counsel and witnesses to participate in the Iowa Utility Board's review of RICL.

Two years.

I'm thinking that this thing is NEVER going to happen.  The ICC Order requires Clean Line to perform in accordance with its fantastical business plan to get all this accomplished in two years.

So, despite sweeping bluster like
“The ICC approval is a great step forward for the Rock Island Clean Line project and brings Illinois one step closer to creating a cleaner energy future,” said Michael Skelly, President of Clean Line Energy. “We are grateful to the Commission for their careful consideration of our application and proposed route. By approving game-changing projects like the Rock Island Clean Line, Illinois will benefit from access to low-cost clean energy and job creation in the construction and manufacturing sectors.”
the Order doesn't actually move RICL closer to reality.  It simply starts the clock.  Tick-tock.

Todd Maisch, President of the Illinois Chamber of Commerce should be eating the words Clean Line put in his mouth:

Companies like Clean Line that propose electric transmission projects are forced to meet a high threshold to prove that their energy project serves the public need and benefits consumers.
...because Clean Line didn't actually meet the ICC's high threshold to be found necessary, and therefore has to make its plan a reality before it could be granted the authority to build the project and take land from unwilling owners.

Michael Cornicelli, Executive Vice President of the Building Owners and Managers Association of Chicago, or BOMA/Chicago also had some inapt words:
This project should demonstrate that independent, investor-driven transmission infrastructure can become a viable business solution in a traditionally utility-driven arena.
...but only if it can make its fantastical business plan into reality.   I think the ICC's Order demonstrates that merchant transmission projects undertaken outside the traditional regional planning process cannot succeed, but time will tell.  Two years.

Clean Line also makes fantasy claims about its ability to reduce carbon emissions:
The wind energy delivered by the Rock Island Clean Line will allow other generators to run less and burn less fuel by eliminating the need for the equivalent amount of energy to come from fossil fuels, thereby reducing pollution. More than 1.4 million homes will be powered by the renewable energy generated as a result of this project.
Because it is an intermittent resource, baseload fossil fuel generators will be required to run constantly to back up Clean Line.  The ramping up and down of baseload plants actually produces MORE emissions than running at a constant rate.  Clean Line's insistence that its transmission line will reduce fossil fuel generation on a basis equal to its production is unrealistic fantasy. 

And, we'll end with this:

Developing a project of this scale is a long-term undertaking...
Yes, indeed.  Two years.  Tick-tock!
You won't be seeing variations of the word "approve" in my headline.  That's because the Illinois Commerce Commission decision yesterday was not a pivotal moment that sealed the project's success.

Far from it.

Although the actual Order has been withheld from the parties and the general public for the time being, I've been able to piece together a general idea of its contents from various news stories, along with knowledge of what was in the proposed order issued by ALJ Larry Jones several months ago.

Clean Line applied to the ICC under two separate statutes.
Rock Island therein requests an order granting it a certificate of public convenience and necessity (“CPCN” or “Certificate”), pursuant to Section 8-406 of the Act, authorizing it to operate as a transmission public utility in the State of Illinois and to construct, operate and maintain an electric transmission line (“Project”); and authorizing and directing it, pursuant to Section 8-503 of the Act, to construct the proposed line. 
News reports say that the Commission granted the CPCN under Section 8-406, but did NOT order it to construct the line under Section 8-503.

Sec. 8-406 makes it technically possible to construct the line, if it can acquire VOLUNTARY easements from all affected landowners. 

Only under Sec. 8-503 may the company be granted the authority to take property through eminent domain condemnation.  An order under 8-503 would set the company up to effect takings through mere procedural steps.  But the ICC DENIED Clean Line's application under Section 8-503.  Therefore, Clean Line would have to come back before the Illinois Commerce Commission with a second application for an order under Sec. 8-503 at some point in the future, with likely similar results.


Big win for landowners!

Know this -- the ICC would never grant Clean Line eminent domain authority to take the majority of its route.  Usually, holdouts in transmission line cases that actually end up being taken via eminent domain are few and far between.  There's strength in numbers.

Feel free to say "no."  Isn't it ironic that a company that has been telling regulators and the media how well it has been "collaborating with landowners" would now actually have to... well... collaborate with landowners?  Perfect!  However, Clean Line's lies and underhanded tactics have inspired massive distrust by landowners.  And every farmer knows... you reap what you sow.
I got an email yesterday from DOE's Office of Electricity Delivery and Energy Reliability (OE) with a link to DOE's new Section 1222 FAQ.  FAQ stands for "frequently asked questions."  This is supposed to be a list of the questions about Section 1222 that you all have sent to Energy Secretary Ernest Moniz lately.  Instead of actually answering your specific questions though, Ernie's staffers first sent out a form letter response.

The form letter encourages the hoi polloi and affected landowners to make comment on the Environmental Impact Statement (EIS).  It insinuates that the public's only avenue for participation in a process that could ultimately condemn and take their property via eminent domain is through the EIS.  This is preposterous. 

The EIS simply decides where to put the transmission line to cause the least environmental damage.  It does not prevent environmental (or historic, cultural, and socioeconomic) damage.  Damage is allowed, as long as the company perpetrating it makes payment for "mitigation."  In other words your land and environment is for sale to the highest bidder.  Confining your comments to the EIS is a losing, feel-good way to contain you and stop you from causing a ruckus until after the decision is made.
  By that time, it will be too late.

During any state jurisdictional transmission permitting process, affected landowners may intervene and participate in the hearing process, providing evidence and pleading their case to the Public Service Commission who will ultimately make the decision on permitting and siting.  The DOE's Section 1222 "program" doesn't provide you landowner stakeholders with any due process to participate in the decision making.

Instead, companies standing to profit from Sec. 1222 were having their own little private party with DOE, urging DOE to hurry up and sign up to be Clean Line's land agent.

Due process?  No.  Landowners were being excluded.  So, the landowners crashed the party.  And the best DOE could offer them is this unhelpful FAQ?

A couple of affected landowners who looked at the FAQ last night has more questions than answers.  Everything from "what is OE?" to "what ever happened to Clean Line's Grain Belt Express Sec. 1222 application?"

What are the statutory requirements for a project under Sec. 1222?  DOE skips over this while patting you on the head and telling you not to worry about all that complicated stuff:
The DOE will conduct a thorough review that includes making all required statutory findings as well as consideration of the proposed project’s environmental impacts, the project’s technical and economic feasibility, and whether the project is in the public interest.
What are the decisional guidelines?  Or is DOE just making this crap up as they go?

What is "other due diligence?"
DOE will decide whether to participate in the proposed project, a decision which would include route selection, once all environmental reviews and other due diligence have been completed. The earliest a decision could be made is at least 30 days after issuing the Final EIS, which is not expected before 2015.
How can you participate in the decision making process outside the EIS?  How should landowner stakeholders be consulted in this process?  Where's the due process?
Issues Not Addressed in the EIS: Before DOE conducts its review of all of the factors discussed above, the applicant will be required to submit further information and update its original application. Once DOE receives the updated information, and deems the application complete, it will provide notice that the application is available for public review through a notice in the Federal Register and an announcement on the OE website. Publication of this notice in the Federal Register will begin a 45-day public comment period. The notice will describe how to comment on the application for the proposed project. All comments submitted during the comment period will be considered in the DOE’s ultimate decision as to whether to participate in the proposed project under the Section 1222 program.
Oh, now I know they're just making the rules up at they go.  Updated application?  Why?  So that Clean Line can address any shortcomings and make its application a little more legally bulletproof?  A "do-over," as we used to call it on the playground.  Where is this 45-day comment period written into the statute (hint:  it's not -- they just made it up!)

So, what to do?  Keep asking questions!  Submit your additional questions here and encourage Angela to flesh out her confusing FAQ.  And be sure to ask her... "Where's the due process for affected landowners?"
Last Monday, Illinois Commerce Commission ALJ Larry Jones issued his proposal for an Order of the Commission regarding RICL's request for authority to build its project in Illinois.  Note that this is just a proposal, it is NOT an official Order of the Commission and has no authority unless adopted by the five member Commission.

Meanwhile, the legal debate will continue.  Under Section 200.830 of the Rules, exceptions to the Proposed Order and replies thereto may be filed by the parties.

Let's just start out by stating that the Proposed Order (P.O., for short) is a beast -- 216 pages of repetitive back and forth, and lots of legal prose.  If you've actually read the whole thing, congratulations!  It took me most of the week to plow through it and to do the research to answer my own questions about certain parts.

First of all, we need to know what RICL asked the ICC to do.
In this proceeding, Rock Island Clean Line LLC (“Rock Island,” “RICL” or “RI”) filed the above-referenced petition with the Illinois Commerce Commission (“Commission” or “ICC”) pursuant to Sections 8-406 and 8-503 of the Public Utilities Act (“Act”),  220 ILCS 5/1-101, et seq.

Rock Island therein requests an order granting it a certificate of public convenience and necessity (“CPCN” or “Certificate”), pursuant to Section 8-406 of the Act, authorizing it to operate as a transmission public utility in the State of Illinois and to construct, operate and maintain an electric transmission line (“Project”); and authorizing and directing it, pursuant to Section 8-503 of the Act, to construct the proposed line. 
Section 8-406 governs the following:
Whenever after a hearing the Commission determines that any new construction or the transaction of any business by a public utility will promote the public convenience and is necessary thereto, it shall have the power to issue certificates of public convenience and necessity. The Commission shall determine that proposed construction will promote the public convenience and necessity only if the utility demonstrates: (1) that the proposed construction is necessary to provide adequate, reliable, and efficient service to its customers and is the least‑cost means of satisfying the service needs of its customers or that the proposed construction will promote the development of an effectively competitive electricity market that operates efficiently, is equitable to all customers, and is the least cost means of satisfying those objectives; (2) that the utility is capable of efficiently managing and supervising the construction process and has taken sufficient action to ensure adequate and efficient construction and supervision thereof; and (3) that the utility is capable of financing the proposed construction without significant adverse financial consequences for the utility or its customers.
Here's what the P.O. determined about RICL's request under 8-406:
Having reviewed the record, the Commission finds, with regard to the first alternative showing in Section 8-406(b)(1), that Rock Island has not demonstrated that the Project is necessary to provide adequate, reliable, and efficient service to customers within the meaning of Section 8-406(b)(1).

BUT, regarding the second alternative:

In conclusion, upon consideration of the record and the determinations contained above, and subject to the conditions set forth above and elsewhere in this Order, the Commission finds that the Project will provide an opportunity for the delivery of more renewable energy into Illinois, and will promote the development of an effectively competitive electricity market that operates efficiently, including with respect to renewable energy; is equitable to all customers; and is the least cost means of satisfying those objectives, within the meaning of Section 8-406(b)(2).
The "conditions" attached to the judge's proposed conclusion are as follows:
Prior to recovering any Project costs from Illinois retail ratepayers through PJM or MISO regional cost allocation, Rock Island will obtain the permission of the Illinois Commerce Commission in a new proceeding initiated by Rock Island. For the purposes of the prior sentence, any system upgrades set forth in an interconnection agreement with PJM or MISO and the costs of which are allocated to Rock Island will be considered “Project costs.” For the avoidance of doubt, the phrase “recovering any Project costs from Illinois retail ratepayers through PJM or MISO regional cost allocation” includes the recovery of costs though PJM and MISO transmission service charges that are paid by retail electric suppliers in respect of their electric load served in Illinois.  


As a condition of this Order, Rock Island shall not attempt to effect the interconnection until it has fully complied with the applicable requirements of PJM and the other conditions in this Order, and has signed all interconnection agreements.

AND (This is a biggie!)

Rock Island will not install transmission facilities for the Rock Island Clean Line Project on easement property until such time as Rock Island has obtained commitments for funds in a total amount equal to or greater than the total project cost.  For the purposes of this condition:

 (i) “install transmission facilities” shall mean to affix permanently to the ground transmission towers or other transmission equipment, including installation of bases and footings for transmission towers, but shall not include (A) preparatory work such as surveys, soil borings, engineering and design, obtaining permits and other approvals from governmental bodies, acquisition of options and easements for right-of-way, and ordering of equipment and materials, and (B) site preparation work and procurement and installation of equipment and facilities on property owned in fee by Rock Island including the converter station sites;

(ii) “easement property” shall mean property on which Rock Island has acquired an easement to install transmission facilities;

(iii)  “has obtained commitments for funds” shall mean (A) for loans and other debt commitments, that Rock Island has entered into a loan agreement(s) with a lender(s) and has received the loan funds or has the right to draw down the loan funds on a schedule that is consistent with the need for funds to complete the Project, and (B) for equity, that Rock Island or its parent company has received the funds from the equity investors or that the equity investors have entered into a commitment to provide funds on a schedule that is consistent with the need for funds to complete the Project; and  

(iv) “total project cost” shall mean the total estimated remaining cost, at the time that Rock Island is prepared to begin to install transmission facilities, for the following Project activities: engineering, manufacturing and installation of converter stations; transmission line engineering; transmission towers; conductor; construction labor necessary to complete the Project; right of way acquisition costs; and other costs necessary to complete the Project.  For reference, the total estimated project cost as of November 1, 2012 is $2.0 billion.

To allow the Commission to verify its compliance with this condition, Rock Island shall submit the following documents to the Director of the Financial Analysis Division and the Director of the Public Safety & Reliability Division at such time as Rock Island is prepared to begin to install transmission facilities:

a) On a confidential basis, equity and loan or other debt financing agreements and commitments entered into or obtained by Rock Island or its parent company for the purpose of funding the Rock Island Clean Line Project that, in the aggregate, provide commitments for funds for the total project cost;

b) An attestation certified by an officer of Rock Island that Rock Island has not, prior to the date of the attestation, installed transmission facilities on easement property; or a notification that such installation is scheduled to begin on a specified date;

c) A statement of the total project cost, broken out by the components listed in the definition of “total project cost,” above, and certified by an officer of Rock Island, along with a reconciliation of the total project cost in the statement to the total project cost as of November 1, 2012 of $2.0 billion; and

d) A reconciliation statement, certified by an officer of Rock Island, showing that the agreements and commitments for funds provided in (a) are equal to or greater than the total project cost provided in (c).

So, the P.O. did not find that RICL was necessary, but did find that it would promote the development of a competitive electricity market (not that the current market doesn't already do that).  Therefore, the P.O. recommends that RICL be granted a Certificate of Public Convenience and Necessity under Section 8-406 because it satisfied the second part of (1) after the "or" (see 8-406 language above).  However, the proposed finding comes with HEFTY conditions and would expire two years after being granted.  Do you think RICL can get its stuff together to satisfy all the conditions AND get a permit from Iowa within two years?  Tick tock!  How many years has RICL been trying to make these projects work now?  Has it been 5 years already?

Now let's move on to RICL's request that the ICC "authorize" or direct it to construct the line under Section 8-503.  Remember that RICL told the ICC that they might not even construct the project after all if it wasn't profitable enough? 
The Commission has reviewed the evidence and arguments.  First of all, to the extent Rock Island is asserting that the criteria in Sections 8-406(b) and 8-503 are identical, and that a finding the Section 8-406(b) criteria have been met would automatically mean the Commission is required to grant the relief sought under Section 8-503, the Commission disagrees.  Such an interpretation would render Section 8-503 superfluous.    

ComEd and Staff argue that Rock Island’s request for Section 8-503 relief is premature, in that Rock Island is seeking authority that cannot be utilized given the contingencies, conditions and regulatory approvals still needed.    While the Commission is by no means suggesting that RI would have to satisfy every condition, contingency or uncertainty before Section 8-503 authorization may be granted, the Commission does agree with Staff and ComEd that under the circumstances, it would be premature to grant Section 8-503 relief to Rock Island in this proceeding.  

Rock Island claims Section 8-503 approval is needed now because it is one of the major regulatory approvals needed to satisfy potential lenders and investors; however, Rock Island does not explain how a Section 8-503 authorization is somehow more urgent or important in that regard than is the proceeding in Iowa, where the Project originates and the first 379 miles of the 500-mile line would be built.  Even Rock Island does not estimate a decision being reached in Iowa until 2015, assuming the formal proceeding has even begun there.

IT IS FURTHER ORDERED that the request for relief pursuant to Section 8-503 of the Act is not granted at this time; this determination is without prejudice to the filing of a request for such relief in the future. 
Authority under Section 8-503 is necessary to apply for eminent domain under Section 8-509, which reads:
When necessary for the construction of any alterations, additions, extensions or improvements ordered or authorized under Section 8‑503 or 12‑218 of this Act, any public utility may enter upon, take or damage private property in the manner provided for by the law of eminent domain.
But, the P.O. is NOT proposing that RICL be granted eminent domain authority at this time.  RICL may re-apply for Section 8-503 at a later date.  Important:  RICL does NOT have eminent domain authority to condemn and take property in Illinois at this time, and this proposed order would not give it to them!

But, the P.O. also proposed that the recommended CPCN issued under Section 8-406 would allow Section 8-510 of the Code, which states:
Land surveys. For the purpose of making land surveys, any public utility that has been granted a certificate of public convenience and necessity by, or received an order under Section 8‑503 of this Act from, the Commission may, 30 days after providing written notice to the owner thereof by registered mail, enter upon the property of any owner who has refused permission for entrance upon that property, but subject to responsibility for all damages which may be inflicted thereby.
The P.O. recommended granting RICL the Certificate required to enter onto private property under Section 8-510, and reasoned:
...the issuance of the Certificate will enable Rock Island to gain access to the property to conduct surveys and related activities, which are steps characterized by Rock Island as important ones in which to engage in the near future.
The P.O. proposes that RICL be granted authority to trespass upon, enter, and damage private property, although prohibited from taking that same property by eminent domain. Yet, it's clear that RICL at this time does NOT have any dedicated funds, so how would landowners be compensated for damages incurred in the surveying process? What protections are in place for landowners in the likely event that funds are not acquired to build the project and the company goes bankrupt?  At this time... none!

But, remember, this is only a PROPOSED Order, subject to more legal filings and alternative proposed language.  What the Commission actually approves may be radically different.

Meanwhile, keep up to date on all the RICL news and action alerts by liking BlockRICL on facebook or visiting their website.