Dear Governor Parson,

On behalf of Missouri agricultural producers comprising nearly 100, 000 family farms,
concerned citizens, and taxpayers, I know you understand our interests and want to
preserve the number one industry in Missouri today. In fact, as our Governor you have
been quoted as saying, "To prepare the next generation of Missourians who will be a
part of this industry, we must unite and focus on important issues that matter to all of us."

Farming and agriculture are threatened by the proposed private use, merchant transmission line, Grain Belt Express Clean Line (GBE). This line is currently proposed to cross through eight Missouri counties, and if approved would set a terrible precedent that will sacrifice our state's agricultural heritage, and its future, for the benefit of out-of-state energy speculators.
Most folks affected by the project did not become aware of it until late 2013, however the company had been working behind the scenes to gain support from county governments and legislators since 2011. In fact, the company's Houston-based CEO has bragged that getting local governments on board before affected landowners find out about a project gives the people nowhere to turn for help. Since 2013, grassroots opposition to GBE has grown like wildfire, with membership in opposition groups numbering in the thousands. These citizens have worked diligently through the legal processes to block GBE for more than five years, spending hundreds of thousands of dollars of their hard
earned money simply to preserve their homes, businesses, and local economies from investment speculators from other states who seek to gain riches at our expense.

Landowners don't seek to gain if they win, they will merely be awarded the right to continue to live their lives and run their agricultural businesses unencumbered. The Missouri Public Service Commission has now denied two applications filed by GBE, but yet the company persists. The Missouri Supreme Court, at the request of GBE and former Governor Nixon, remanded the last denial back to the PSC. In the interim, GBE's owners have signed a contract to sell the transmission project to out-of-state wind energy generation company lnvenergy. Evidentiary hearings on the remand concluded in December and once briefing has completed this month, a decision could be made at any time.

If approved by the PSC, the GBE private electric transmission company would have the
same status as a Missouri utility company to take private property for its own use through eminent domain. However, GBE is not at all similar to our state public utilities that serve all customers equally. As originally created, GBE intended to sell transmission service at negotiated rates under federal supervision that would prevent self-dealing and unfair bidding. GBE owned no generation interests that could receive undue preference and therefore received federal authority to begin negotiations. While GBE received approval of its negotiation plan from the federal government, that authority cannot pass to lnvenergy without federal approval. lnvenergy owns substantial wind generation assets in Kansas and Oklahoma, near the starting point of GBE. Without federal supervision, lnvenergy may favor its own generation interests while selling transmission service on GBE, and lnvenergy may use GBE to serve only its own
generation interests in other states, turning GBE into a private highway through Missouri
that does not serve the public. Furthermore, under different federal rules, lnvenergy's private generation tie transmission line could be protected from a public use by Missouri
utilities or generators.

Utilities that do not serve the public do not qualify as a "public use" deserving of eminent
domain authority. However, GBE and lnvenergy have stated in PSC testimony that the company will need to exercise eminent domain on 700 properties in Missouri immediately upon approval of the PSC. GBE needs easements on 739 properties in Missouri and has only secured 39 voluntarily, requiring the use of eminent domain on 95% of its route across the state. The companies propose to begin condemning property before their project is approved in other states, and before they find enough customers to financially support its construction. lnvenergy plans to undertake condemnation first, while maintaining the option to change the route, need, and purpose of its project later. We urge great caution here, for condemnation cannot be easily undone if lnvenergy later changes GBE into its private electric delivery highway through Missouri.

GBE has been proposing the same old, outdated, overhead line technology for the past ten years. New technology can make burial alongside existing public rights-of-way
possible, such as along highways. Burial of GBE along highways would provide much needed lease revenue for MO DOT to improve our roadways, without new taxes for our citizens, and eliminate eminent domain on private property.

We are pleading with you as our Governor to please help us preserve our agriculture in Missouri. We are not against progress or renewable energy, but we do object to granting eminent domain authority to a private business for its own profit. GBE is not
guaranteed to provide any future benefit to Missouri and could end up transporting energy produced in other states to the west across Missouri for use by other states to the east. Eminent domain authority awarded to a speculative, private venture will permanently damage our agricultural businesses. For example, crops grown under the proposed line must be less than 10 feet high, making corn production impossible in fields crossed by the project. As a result, how can we expect those in agriculture to carry this burden when every bushel counts for our livelihood?

Thank you for your support of agricultural interests. We hope you share our concerns about condemnation by a non-public utility and will strive to take whatever action is within your power to make sure Missouri property owners are sufficiently protected from Grain Belt Express.

Sincerely,
Russell Pisciotta
President
Block Grain Belt Express-Missouri

The MLA respectfully contends that the type of “need” created by Grain Belt in inducing MJMEUC to buy its product is not a true “need” for the service in the sense envisioned in the Tartan case. By analogy, it seems safe to say that not every family in Jefferson City truly “needs” to own a Cadillac. But if a dealer were for some reason to offer a Cadillac to everyone in the City for say $5.00, would the fact that virtually every family in the City was now driving a Cadillac suddenly prove there really was a “need” for those cars after all?

To the contrary, the MLA submits that actual “need” for any product cannot be artificially created by practically giving it away, as Grain Belt has done here. “Need” is not the same as “Want”.

To begin with, the only meaningful means to determine what MJMEUC might have saved by using the Grain Belt line is to compare MJMEUC’s total cost of power from that line to MJMEUC’s next best alternative at the time it signed the contract with Grain Belt. The problem is, before MJMEUC signed the TSA with Grain Belt, it did not bother to solicit bids from any other party to replace the expiring Illinois coal contract. Therefore, neither MJMEUC nor anyone else will ever know what the best alternative would have been to signing the TSA with Grain Belt.

For the above reasons, the MLA respectfully submits that Grain Belt failed to prove that the need for the line in Missouri is anything but an illusion of its own making.

In short, all of the cases cited by Grain Belt on this issue merely support the reliance on the resources of Clean Line, and not those of a third party with no ownership in the Applicant.  Thus based on Grain Belt’s own analysis, it is asking the Commission to take a position here for which there apparently is no precedent.

A more fundamental problem with Grain Belt’s argument on this point is that it is once again taking for granted that future decisions of the Commission will be made in Grain Belt’s favor. Specifically, before the sale of Grain Belt to Invenergy may close, those parties need not only the CCN in this proceeding, but also the permission of the Commission for the sale of the Grain Belt project to Invenergy in a case which has yet to be filed. If that sale is not approved, then of course Grain Belt never gains access to the resources of Invenergy. Thus in asking the Commission to decide the two Tartan criteria on the basis of Invenergy’s expertise and stronger financial status, they are necessarily asking the Commission to assume that it will later approve the sale of Grain Belt to Invenergy. And this request is being made by Grain Belt before the Commission has even seen or heard a word of evidence in the case which will decide that issue.

This is particularly presumptuous on Grain Belt’s part, in that they have stated unequivocally that the Commission does not even have the authority to approve the proposed sale which they now take for granted will be approved.

Even if Grain Belt successfully manages to disavow its earlier position, which seems unlikely, it is totally inappropriate for Grain Belt to even suggest to the Commission that it should assume it will approve the sale of Grain Belt to Invenergy before that case is even filed.

Despite the prognoses of what the Commission will do in some unfiled case, as matters now stand there is no basis for granting a CCN to the Applicant on the basis of speculation about its possible access to Invenergy’s resources.

Grain Belt supports its position on this issue primarily with broad generalizations about the market for wind generation. And while it contends that “the economic feasibility of the Project continues to be strong”, it does not even attempt to make a case for the economic feasibility of the Missouri segment of the line, without access to the PJM market.

As the MLA and Show Me discussed in their initial brief on remand, there is a definite possibility that the line will ultimately terminate in Missouri, thereby precluding access to the very markets which could make the project economically feasible.

As the NRDC and Sierra Club suggest, Missouri might be a “loss leader” for Grain Belt. But as they then note, according to the concurring opinion the project relies for its economic viability on the higher prices in the PJM market. But of course if the project cannot reach the PJM market, it is left only with the loss leader segment of the line in Missouri.

FirstEnergy is planning to construct a new 69-kilovolt transmission line to connect two substations in the Aurora area.  This new line will improve system redundancy and reliability, allowing much faster restoration times should power outages occur like those in recent years.

First, the Grain Belt line will not be selling its services to retail customers in Missouri. Second, Grain Belt has been authorized by the FERC to sell 100% of its capacity at wholesale to buyers (such as wind farms or load-serving utilities) at rates which are to be negotiated between the buyer and seller. Third, as an expected outcome of establishing rates through bilateral negotiation, Grain Belt’s customers will be paying different rates for capacity on the line – even for service from the same beginning and end points. Based on these facts, case law in Missouri tells us that the Grain Belt project is not an “electrical utility” in the sense that term is used in the CCN statute, Section 393.170.

In perhaps the key finding by the Court [in Danciger], it ruled that although the statutory definition of an “electrical corporation” includes no specific reference to public use, or to the necessity that the sale of the electricity be to the public, “it is apparent that the words ‘for public use’ are to be understood and to be read therein.”The question, then, was what constitutes the supply of electricity for “public use”, thereby qualifying the entity as an “electrical corporation.” In answering that question, the Court began with an obvious but critical point: a company either is or is not a public utility. If it is, then it is subject to the entire purview and regulation of the Commission, including the authority of the Commission to compel the company to provide service to all residences and businesses in the area where it provided service.

...

...if Grain Belt is indeed an “electrical corporation”, its negotiation of different rates for similarly situated customers would certainly be in violation of this statute, and no doubt others as well.

Perhaps the closest judicial decision on point is from Illinois, in a case which involved the question of whether the Rock Island Clean Line (a sister line of Grain Belt) was or was not a “public utility” under Illinois law. (Illinois Landowners Alliance v. Illinois Comm. Comm’n, 60 N.E.3d 150 2016). In finding that the proposed line was not a “public utility”, the Court held that “A private company that provides public utility services according to its own terms and conditions does not meet the statutory definition of a public utility.”Furthermore, the court found that in order to qualify as a public utility, the entity must offer its assets for public use without discrimination. The Rock Island line “is not for public use without discrimination.”

Finally, in reaching its decision, the Court relied in part on an earlier case which had found that the Mississippi River Fuel company did not qualify as a public utility. That company sold natural gas through individual contracts with 23 private industrial retail customers, as well as to 2 public utilities which resold the gas to its retail customers. In relying on the Mississippi River Fuel case, the Court noted the following: the company’s contracts were not based on fixed rates, and instead varied as to terms and conditions; and that the company’s act of selling gas to a limited group of customers could not be characterized as “public use.”

However, it is another matter altogether to decide this issue on the basis of the qualifications of Invenergy. That company is not the Applicant here. Nor does it have any ownership interest in the Grain Belt project at this point. And as discussed later under criterion (4), it would be speculative to assume that Invenergy will ever own the Grain Belt project – at least in the form it has been described to the Commission over the past 5 years or so.

Only two conditions must be met before Invenergy is obligated to purchase the Grain Belt project: approvals of the Kansas Commission and this Commission. Closing is not dependent upon approval by the Commission in Illinois. So Invenergy could well end up owning the Grain Belt project, yet never receive permission to build the section of the line providing access to the PJM market. What happens then? According to Mr. Zadlo, Invenergy would need to come back to this Commission with a new plan, which most likely would mean the line would terminate somewhere in Missouri. And of course without the ability to reach the PJM market, Grain Belt has provided no evidence to prove that the line is economically feasible.

In order to go north of Illinois, the line would presumably be rerouted north in Missouri, then pass through Iowa, Wisconsin and even Lake Michigan, necessitating numerous additional consents and routing studies along the way.

Going south of Illinois presumably would mean rerouting the line south within the state of Missouri to a point somewhere near Cairo, Illinois, then going north through Kentucky and Indiana, until finally reaching a point near the converter station in Clark County, Illinois – a total distance of roughly 450 miles. And without a certificate from Illinois, presumably the converter station would need to be redesigned, and moved out of that state. And that in turn would seemingly require starting anew with the process of gaining permission for the interconnection with PJM.

Given that fact, it seems fair to assume that Invenergy must have a more realistic “Plan B” in mind in the event it cannot obtain consent to build the line in Illinois. For example, it must have crossed their minds that if Invenergy cancels its contract with MJMEUC, it could try to sell that 200 MW at a rate which might exceed any damages it could owe to MJMEUC. Another possibility would be for Invenergy to develop its own wind farms in Kansas, and use the Grain Belt line to move its energy into the MISO market. There are certainly inviting possibilities for combining the generation and transmission functions on the Grain Belt line for Invenergy’s own benefit.
While the MLA does not claim that either scenario is being considered by Invenergy, it has unveiled no logical plan of its own if it is denied entry into Illinois. And Invenergy appears much too sophisticated an organization not to have already developed a realistic plan to deal with that possibility. If it has, we have been given no clue as to what to expect.

Expedited approval of the Transaction is warranted here because the Transaction does not involve the merger of two public utilities that are rate-regulated by the Commission; rather, it involves a transaction at the holding company level of GBE, a public utility that is not rate-regulated by the Commission, that will improve the capability of GBE to complete the Project. Therefore, many of the traditional state and local concerns with regard to public utility mergers are not implicated by the Transaction.

For purposes of the authority to appropriate property through eminent domain, the term "public utility" shall not include any activity for the siting or placement of wind powered electrical generators or turbines, including the towers.

The proposed Transaction will benefit consumers by improving the ability of GBE to complete the Project. In granting GBE a certificate to operate as a public utility, the Commission found that completion of the Project would be in the public interest.

Clean Line Energy, which is in negotiations to sell the project to sustainable energy developer Invenergy, is seeking permits from state regulators in Kansas and Missouri to build the power line.

Invenergy bills itself as North America’s largest privately held renewable energy provider. The Chicago based company has 89 wind projects worldwide that generate 12,814 megawatts of power. The firm and its affiliates claim to have more than $9 billion in total assets.

The Commission’s concerns regarding undue preference and affiliate abuse arise when a merchant transmission owner is affiliated with customers. Applicant does not have any affiliates that currently plan to secure transmission service rights on the Project. Applicant is therefore a purely merchant transmission owner with respect to its proposal to allocate up to 100% of the Project’s capacity pursuant to bilateral negotiations.

Local leaders in the Oklahoma Panhandle are pinning their lingering hopes on the idea that some version can be salvaged. The mostly rural region has struggled to attract employers, and this would have been by far the largest investment in its history, with a projected 4,000 construction jobs and a dramatic increase in tax revenue for local governments.

Its demise is still sinking in for Michael Shannon, director of the region's economic development office. "I'm stunned," he said, adding, "There has to be a Plan B."

As global manager of renewable power for General Motors, Rob Threlkeld speaks often with both RTO and utility managers about transmission. When he depended primarily on power-purchase agreements with wind producers, “That would require a significant amount of transmission to be built.”
While he expects transmission to continue to be a challenge in meeting his company’s renewable energy goals, he is more focused now on green tariffs and sees a new resource on the horizon: the transmission capacity left in the wake of closing coal plants.
“As we shift the generation fleet,” he said, the question is, “How do you repurpose existing transmission?” Wind farms used to rely on all new transmission lines to bring the power to where it was needed, he said. But he sees that changing as coal plants close and reduce the load on parts of the transmission system.
“Don’t build new all the way; build new half the way,” he said. “Those are the types of discussions we have.”