Clean Line's Grain Belt Express received a conditional CPCN (permit) from the Illinois Commerce Commission last week. Another random number covered on Clean Line's Bingo Board.
Clean Line's Skelly acted like it actually did something to speed up the project.
Clean Line's Skelly acted like it actually did something to speed up the project.
“The ICC approval brings the Grain Belt Express Clean Line one step closer to dramatically increasing the low-cost wind energy available to customers in Missouri and Illinois.”
I disagree. The ICC's CPCN expires two years from date of issue. Although GBE requested its permit be issued with a two and one-half year expiration date, the Order did not do so. So, it's two years. Tick Tock, Clean Line!
Clean Line's patchwork quilt of permits is an exercise in harvesting low-hanging fruit, with the most desired pieces still way out of reach. Despite its six years of effort to get any of its four (or it is five?) transmission projects totaling thousands of miles permitted, Clean Line still doesn't have all the permits it needs for even one of them. They've built a crazy quilt of random permits and their timing is way off. Permits are going to start expiring before new ones are issued, creating a game of permitting whack-a-mole.
Its Rock Island project has a two-year Illinois permit on which it only has one year left to begin construction. Meanwhile, Rock Island is completely stalled in Iowa. No way will it complete its Iowa permitting before the Illinois permit expires.
Its Plains and Eastern project lacks a permit in Arkansas and eminent domain authority in Oklahoma.
And its Grain Belt Express project has been flat out rejected by Missouri. Clean Line made some noises about figuring out its options in Missouri -- either reapplying with the state or attempting a federal override. Either way, Clean Line has no chance of clearing up its issue in Missouri within two years.
I think this is just poor strategy and management of Clean Line's permitting process. Clean Line seems more concerned about having a piece of paper to show its investors, rather than making logical progress toward building a single project. Maybe this handful of speculators have bitten off more than they can chew?
Anyhow... about Grain Belt's CPCN from the ICC... Its a conditional permit, again (the Rock Island permit also came with conditions and no eminent domain authority).
The first condition imposed by the ICC is that GBE have all its financing in place before beginning construction. The ICC figures this will stop GBE from building the transmission line to nowhere before running out of money and expecting the government or electric ratepayers to bail it out to finish the project. Does the ICC think this is a possibility without the condition? That's quite telling in itself, isn't it? A real public utility usually has more than an idea and a fantastical plan to get rich quick. At least the ICC seems to realize Grain Belt Express has nothing behind it.
The second condition imposed by the ICC is a whole bunch of make-believe. The ICC requires Clean Line to come back before it to receive "permission" to charge Illinois ratepayers for the project through FERC-jurisdictional regional cost allocation. Ha ha ha ha ha ha ha. Why am I laughing? Because the ICC has no authority to accept or reject cost allocation to Illinois ratepayers. It is a regional process under the jurisdiction of the Federal Energy Regulatory Commission. The most the ICC can do is file a complaint that goes like this, "But, FERC, GBE promised us that we would have jurisdiction over a cost allocation decision!" And who is GBE to change FERC's jurisdiction? Can't happen. So, the ICC's logic goes like this: If GBE tries to get cost allocation to Illinois ratepayers, then we can suspend its permit and then they can't build the project! But... what if... GBE constructs its project and THEN receives approval for regional cost allocation? What you gonna do then, ICC? Cry? Waste time and money fighting this at FERC like you did the PJM cost allocation for the Project Mountaineer projects? That took, what... 10 years? And cost how much? The really frustrating part about this is that ICC has had it explained to them six ways to Sunday that they have no jurisdiction to impose this "condition."
But here's the big oops... the vote to issue the CPCN in the first place was 3-2 in favor. Two Commissioners issued a dissent that I'm going to call "blistering" (because Clean Line likes to say that about the Missouri dissent). The issue here is particular to Illinois law. Section 8-406 allows for the application for and issuance of a CPCN. Section 8-503 allows the ICC to order or authorize a company to build a certain project. Section 8-503 is a prerequisite to eminent domain authority under Section 8-509. The ICC may issue a CPCN under 8-406 without Section 8-503's authority that is the basis for an eminent domain grant under 8-509. That's exactly what happened with the Rock Island project. The project was issued an 8-406 CPCN but the Commission did not order or authorize the project to be be built under 8-503. This gives Rock Island the ability to build its project if it can get 100% voluntary land acquisition, otherwise Rock Island has to go back before the Commission to request a determination under 8-503 before it can proceed to 8-509's eminent domain authority. However, in 2010 the Illinois legislature added Section 8-406.1 to create an expedited process for public utilities to apply for a CPCN. This speedy process automatically includes the 8-503 grant. Because Clean Line didn't want to end up with another useless CPCN without 8-503 authority, it decided to use the expedited 8-406.1 process. The fly in the ointment, however, is that only a public utility may apply under 8-406.1. Clean Line is not a public utility in Illinois. This issue was the subject of several motions to dismiss and an interlocutory appeal to the Illinois Supreme Court during the proceedings. I've heard that the ICC acted quite suspiciously in denying the motions, without public discussion of any kind at the meeting where they denied the motions to dismiss. And here it comes again, in the form of a dissent from two Commissioners. I'd say chances of GBE's permit being overturned on appeal are pretty good.
And what then, Clean Line, what then? Why were you in such a hurry to get your Illinois permit for GBE when it was obvious Missouri was going to deny your application? What strategy was that? Just covering another square on your transmission permitting bingo board? Yay, you!
So, the Clean Line saga grinds on. No generators, no customers, not enough permits. When are Clean Line's investors going to quit tossing money down this rat hole? One of the more interesting things to come out of Illinois recently was Clean Line's filing regarding its Rock Island project regarding a change of investors. Although Clean Line made much earlier this year of a "$50M investment" in its company by Bluescape Resources, it turns out that investment was tied up in a ball of string. Clean Line got $12M. Bluescape got two seats on Clean Line's Board of Directors. The Board of Directors can order Bluescape to kick in another $5M at any time, once Oklahoma approves Bluescape's investment. The other $33M is completely at Bluescape's option. Bluescape wasn't foolish enough to give these wind cowboys all $50M up front. Clean Line keeps adding investors to its stable as the ones already there don't seem to be interested in upping their investment. Remember, if Clean Line can't get their projects built, their investors lose everything. Every last dime.
And there Clean Line's management sits, with their permit bingo board missing crucial links and no idea whether the balls they need are even in the hopper.
Clean Line's patchwork quilt of permits is an exercise in harvesting low-hanging fruit, with the most desired pieces still way out of reach. Despite its six years of effort to get any of its four (or it is five?) transmission projects totaling thousands of miles permitted, Clean Line still doesn't have all the permits it needs for even one of them. They've built a crazy quilt of random permits and their timing is way off. Permits are going to start expiring before new ones are issued, creating a game of permitting whack-a-mole.
Its Rock Island project has a two-year Illinois permit on which it only has one year left to begin construction. Meanwhile, Rock Island is completely stalled in Iowa. No way will it complete its Iowa permitting before the Illinois permit expires.
Its Plains and Eastern project lacks a permit in Arkansas and eminent domain authority in Oklahoma.
And its Grain Belt Express project has been flat out rejected by Missouri. Clean Line made some noises about figuring out its options in Missouri -- either reapplying with the state or attempting a federal override. Either way, Clean Line has no chance of clearing up its issue in Missouri within two years.
I think this is just poor strategy and management of Clean Line's permitting process. Clean Line seems more concerned about having a piece of paper to show its investors, rather than making logical progress toward building a single project. Maybe this handful of speculators have bitten off more than they can chew?
Anyhow... about Grain Belt's CPCN from the ICC... Its a conditional permit, again (the Rock Island permit also came with conditions and no eminent domain authority).
The first condition imposed by the ICC is that GBE have all its financing in place before beginning construction. The ICC figures this will stop GBE from building the transmission line to nowhere before running out of money and expecting the government or electric ratepayers to bail it out to finish the project. Does the ICC think this is a possibility without the condition? That's quite telling in itself, isn't it? A real public utility usually has more than an idea and a fantastical plan to get rich quick. At least the ICC seems to realize Grain Belt Express has nothing behind it.
The second condition imposed by the ICC is a whole bunch of make-believe. The ICC requires Clean Line to come back before it to receive "permission" to charge Illinois ratepayers for the project through FERC-jurisdictional regional cost allocation. Ha ha ha ha ha ha ha. Why am I laughing? Because the ICC has no authority to accept or reject cost allocation to Illinois ratepayers. It is a regional process under the jurisdiction of the Federal Energy Regulatory Commission. The most the ICC can do is file a complaint that goes like this, "But, FERC, GBE promised us that we would have jurisdiction over a cost allocation decision!" And who is GBE to change FERC's jurisdiction? Can't happen. So, the ICC's logic goes like this: If GBE tries to get cost allocation to Illinois ratepayers, then we can suspend its permit and then they can't build the project! But... what if... GBE constructs its project and THEN receives approval for regional cost allocation? What you gonna do then, ICC? Cry? Waste time and money fighting this at FERC like you did the PJM cost allocation for the Project Mountaineer projects? That took, what... 10 years? And cost how much? The really frustrating part about this is that ICC has had it explained to them six ways to Sunday that they have no jurisdiction to impose this "condition."
But here's the big oops... the vote to issue the CPCN in the first place was 3-2 in favor. Two Commissioners issued a dissent that I'm going to call "blistering" (because Clean Line likes to say that about the Missouri dissent). The issue here is particular to Illinois law. Section 8-406 allows for the application for and issuance of a CPCN. Section 8-503 allows the ICC to order or authorize a company to build a certain project. Section 8-503 is a prerequisite to eminent domain authority under Section 8-509. The ICC may issue a CPCN under 8-406 without Section 8-503's authority that is the basis for an eminent domain grant under 8-509. That's exactly what happened with the Rock Island project. The project was issued an 8-406 CPCN but the Commission did not order or authorize the project to be be built under 8-503. This gives Rock Island the ability to build its project if it can get 100% voluntary land acquisition, otherwise Rock Island has to go back before the Commission to request a determination under 8-503 before it can proceed to 8-509's eminent domain authority. However, in 2010 the Illinois legislature added Section 8-406.1 to create an expedited process for public utilities to apply for a CPCN. This speedy process automatically includes the 8-503 grant. Because Clean Line didn't want to end up with another useless CPCN without 8-503 authority, it decided to use the expedited 8-406.1 process. The fly in the ointment, however, is that only a public utility may apply under 8-406.1. Clean Line is not a public utility in Illinois. This issue was the subject of several motions to dismiss and an interlocutory appeal to the Illinois Supreme Court during the proceedings. I've heard that the ICC acted quite suspiciously in denying the motions, without public discussion of any kind at the meeting where they denied the motions to dismiss. And here it comes again, in the form of a dissent from two Commissioners. I'd say chances of GBE's permit being overturned on appeal are pretty good.
And what then, Clean Line, what then? Why were you in such a hurry to get your Illinois permit for GBE when it was obvious Missouri was going to deny your application? What strategy was that? Just covering another square on your transmission permitting bingo board? Yay, you!
So, the Clean Line saga grinds on. No generators, no customers, not enough permits. When are Clean Line's investors going to quit tossing money down this rat hole? One of the more interesting things to come out of Illinois recently was Clean Line's filing regarding its Rock Island project regarding a change of investors. Although Clean Line made much earlier this year of a "$50M investment" in its company by Bluescape Resources, it turns out that investment was tied up in a ball of string. Clean Line got $12M. Bluescape got two seats on Clean Line's Board of Directors. The Board of Directors can order Bluescape to kick in another $5M at any time, once Oklahoma approves Bluescape's investment. The other $33M is completely at Bluescape's option. Bluescape wasn't foolish enough to give these wind cowboys all $50M up front. Clean Line keeps adding investors to its stable as the ones already there don't seem to be interested in upping their investment. Remember, if Clean Line can't get their projects built, their investors lose everything. Every last dime.
And there Clean Line's management sits, with their permit bingo board missing crucial links and no idea whether the balls they need are even in the hopper.
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