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The best onshore renewable wind resources (i.e., those with the highest potential
capacity factors) tend to be located far from load and sometimes in areas with less
transmission than desired for effective resource development. The best offshore renewable wind resources, however, are often located close to load centers, as is the case with New England.

All of Clean Line’s projects originate in a Type 1 Conditional Constraint Area, identified by DOE in the 2009 National Electric Transmission Congestion Study (“2009 Congestion Study”) and illustrated in Figure 2. The 2009 Congestion Study defined a Type I Conditional Constraint Area as, “an area where large quantities of renewable resources could be developed economically using existing technology with known cost and performance characteristics – if transmission were available to serve them.” The 2009 Congestion Study also noted, “Construction of major new transmission projects would enable development of thousands of MW of new renewable generation” within these areas.

Clean Line has engaged with thousands of local stakeholders in eleven states, where its five projects are actively under development.

These are real projects, many of which have land leased for wind turbines from
farmers seeking new sources of income, as drought has made traditional farming livelihoods uncertain. Wind power represents new hope for drought-resistant income and economic development in regions of the country otherwise struggling with diminishing populations.

Large-scale wind farms paired with new transmission lines -- not distributed solar generation -- is the cheapest way for the US to decarbonise its electricity system, claims an executive at Clean Line Energy Partners.

Jayshree Desai, executive vice president at Clean Line Energy Partners, also believes that over the next few years the cost curve for wind will bend downward more rapidly than for PV, after solar’s spectacular price decline in recent years. Large-scale wind farms paired with new transmission lines -- not distributed solar generation -- is the cheapest way for the US to decarbonise its electricity system, claims an executive at Clean Line Energy Partners.

“I’m a supporter – I have nothing against [distributed generation]”, she said, speaking this week at the AWEA Finance conference in New York. “But the math is just not right.”

Desai argues that the true cost of integrating distributed solar into the grid is not being accounted for – a line increasingly employed by electrical utilities keen to curb the growth of rooftop solar.

“It’s heavily subsidised, not only at the federal level, but at the transmission and distribution [level too],” she says. Given those subsidies, “of course DG looks so good”.

Kris Zadlo – a multi-decade veteran of the transmission sector, and currently vice president at Invenergy – believes distributed generation will “take a big bite” out of the electricity transmission sector in the years ahead.

Zadlo says that being able to cut the transmission portion out of the picture entirely is a big advantage for distributed generation. “And it’s not only about cost, but also about control,” he says.

“We can’t underestimate that what DG allows people is their own peace of mind, control of their own destiny. What sort of premium is that worth to the customer?”

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.

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.

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.

"Generic statements that transmission reinforcement is desirable do not amount to establishment of need."

Construction of major new transmission facilities, in particular, raises unique issues because transmission facilities have long lives – typically 40 years or more. Evaluating the merits of a proposed new facility is  challenging, because common practices take into account only those expected costs and benefits from a project that can be quantified with a high degree of perceived certainty. This has two effects:
First, it leads to a focus on the subset of cost and benefits that can be readily quantified. Not taking into account the costs and benefits that are hard to quantify has the effect of setting their value to zero in a comparison of costs and benefits.
Second, it leads to projections of costs and benefits that are generally on extrapolations drawn from recent experiences. Projections based only on recent experiences will not value the costs and benefits a transmission project will have under very different assumptions or scenarios regarding the future because they ignore or discount the likelihood of these possibilities. Such a narrow view of the range of costs and benefits that could occur provides a false sense of precision.

As will be discussed later in this chapter, many states adopted Renewable Portfolio Standards with requirements or goals to use more  renewable‐sourced electricity.
Because much of the best utility‐scale renewable resource potential is relatively remote from the load centers, the states then had to authorize new transmission construction to enable the desired renewable‐based electricity to reach the grid.

Many points of transmission congestion today result from the need to deliver electricity from
changing sources of generation. For example, generation sources are changing because of
state‐mandated RPSs. The best renewable resources (i.e., those with the highest potential capacity factors) tend to be located far from load and sometimes in areas with less transmission than desired for effective resource development. Existing transmission constraints may deter development of these resources. While this is not a challenge in all parts of the Eastern Interconnect, it is a principal cause of evolving congestion concerns in the Midwest.

Designation of an area as a National Corridor is one of several preconditions required for
possible exercise by the Federal Energy Regulatory Commission (FERC) of “backstop” authority to approve the siting of transmission facilities in that area.

"The economic potential for our area is tremendous and uses South Dakota's renewable resources to help solve our country's energy needs," said Beresford Mayor Jim Fedderson.

Based on a study done for a similar project, Dakota Power says the potential revenue from turbines to landowners could be between $6 million and $7 million annually. State gross production annual tax receipts could reach more than $4.5 million and the county nameplate tax revenue could equal $3 million per year. Statewide direct economic effect could be more than $200 million.

Earlier this month, several hearings were held across Missouri concerning a proposed transmission line that has the potential to carry Midwest wind energy to eastern markets. The Missouri Public Service Commission heard testimony from Missouri residents concerning the Grain Belt Express project, one of several new transmission projects in the region that could help boost new renewable energy projects.

These hearings are an essential part of the transmission development process, as they provide communities and landowners the opportunity to ask questions and share their concerns. Transmission is an important factor in bringing new renewable energy onto the grid, but it’s vital new transmission is developed the right way. That means that we must have landowners and community members getting involved.

Public involvement helps reveal the weak points. For example, many worry about the use of eminent domain for large-scale transmission projects. Insight from landowners points to flaws in the way that compensation for property is determined, and makes clear that there is more to property than just it’s fair market value. Developers must work hard to address these concerns, and work with communities and landowners to find a better way to develop transmission.

Public involvement in transmission development offers all involved the opportunity to think about the future. As more renewable energy is developed, we will require more and better infrastructure to connect it to the electric grid. But we also need to change the way we develop projects, making the process more fair and agreeable to landowners.

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. 

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.

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).

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.  

AND

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).

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. 

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.

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 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.