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:
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
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:
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:
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:
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:
And, we'll end with this:
Developing a project of this scale is a long-term undertaking...
Yes, indeed. Two years. Tick-tock!
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