Michael Skelly's Impossible Dream

Yesterday, the Missouri Supreme Court handed down a decision that remands the Grain Belt Express matter to the Missouri Public Service Commission.  At issue was whether a transmission line needed to file county assents under Sec. 229.100 of Missouri Statute before the Public Service Commission could issue a conditional permit for the project.  In a well-written decision, the Court reasoned that the PSC could issue a permit conditioned upon a project subsequently obtaining the necessary county consents before beginning construction.

Big deal.

GBE now goes back to the PSC to be reconsidered.  Nearly a year has passed since the PSC denied GBE's permit because it did not have necessary county assents.  And in that time, several things have happened that require a new look by the Commission.  The Illinois Supreme Court vacated GBE's permit in that state.  The economics of wind have changed and federal production tax credits have been reduced and will likely be entirely eliminated before any wind farms could be built and generating for transmission on GBE.  Changes have occurred at Clean Line, where many key employees have left the company and its financial situation may have changed significantly.  Contracts between MJMEUC and GBE, and MJMEUC and wind farms, need to be re-examined to determine their current validity.  It's unlikely to be a simple matter of a rubber stamp because that would risk error that generates further appeals.

The MO Supreme Court also re-affirmed that GBE would need county assent before it could begin construction.  Any hope that county assent would come easy with a PSC approval were immediately dashed.

Wiley Hibbard, presiding commissioner of Ralls County, said that’s unlikely to happen in his county.

“There’s no change in the county’s position, my position, or the citizens of Ralls County position,” he said by phone Tuesday afternoon. “I don’t see the assent from Ralls County forthcoming.”

Ralls County, as well as Monroe, are the impacted counties under the jurisdiction of the Appeals Court of Eastern Missouri, where Grain Belt filed its case against the PSC.

“Our will to fight this further has not been diminished whatsoever,” Hibbard said, adding that he was not surprised by the Supreme Court’s ruling.

He cast doubt that Grain Belt developers were serious about the project, saying that no one from the Houston-based Clean Line Energy had contacted the county commission in four years. The company has not sought a zoning change for a proposed DC/AC converter station site near the town of Center.

Therefore, it matters not whether the PSC approves the project.  It can't proceed without county assent.  Any attempt to force county assent through the courts will be time-consuming, expensive and risky.

It took Clean Line about forever to comment on yesterday's event.  I was starting to wonder if they'd closed up shop completely when Michael Skelly started spewing his classic rainbow farts and dangerous dreams.  But where's Waldo?  Nobody heard a peep out of GBE's awkward, itchy-scratchy project manager.  You'd think if he was still lurking about he would have had a comment.  Instead, all the grandiose claims of project revival came from Skelly in Houston.  Let's examine those claims.

From St. Louis Post-Dispatch:

“We think it’s a good decision for the state, not just for our project,” Clean Line’s president, Michael Skelly, told the Post-Dispatch. “The reason you have a Public Service Commission is to have an eye out for what’s good for the state. What the Supreme Court did here is it reasserted the commission’s jurisdiction over transmission lines.”

“We’re going to have to go back through the process in Illinois, but we have a good understanding of what we need to do,” said Skelly. “You go through a bunch of trial and error.”

Even though it could take a couple of years to regain approval in Illinois — a delay that would coincide with the expiration of federal tax credits for wind energy — Skelly said technology-enabled dips in wind costs would still make the project feasible.

“It’s pretty close to what it costs today,” Skelly said, describing cost projections. “We’ll be roughly in the same position because of technology improvements.”

What do you know about what's "good" for Missouri?  I think you've got your facts mixed up.  You mean it's good for Michael Skelly, right?  I'm not believing you really care about what's "good" for Missouri.  The Court also re-affirmed county jurisdiction over transmission lines crossing county-owned roads.  You STILL need that assent.

You're going back through the process in Illinois?  So you're going to file a new application that will most likely take several years to get to a decision?  Who's going to finance that?  I mean, we're talking millions here, with no guarantee of success.  And even if that goes well, there's still the issue of whether or not Clean Line fails the public use requirement for being a public utility.  Even if GBE buys some utility property (and where is that market, and how much might it cost, and how long would regulatory approval for that purchase take), and meets that ownership requirement, there's still an undecided issue that the Illinois Supreme Court is eager to take up regarding whether Clean Line's merchant construct meets the public use requirement under state law.  From the Court's decision in Illinois Landowners:

Because Rock Island cannot meet the ownership requirement for qualification as a public utility, there is no need to reach the additional question of whether it also fails the “public use” requirement, as the appellate court concluded. Should the company elect to move forward with the project and reapply for a certificate of public necessity and convenience as a public utility once it moves beyond planning and actually owns, controls, operates, or manages transmission assets, the question of public use can be revisited under the facts and circumstances then present. Any ruling on the question now would be purely advisory. That being so, there is likewise no need to address appellants’ argument that the appellate court’s construction of the public use requirement imposes an impermissible burden on interstate commerce in violation of the commerce clause of the United States Constitution (U.S. Const., art. I, § 8, cl. 3).

The price of wind will go UP after final expiration of federal production tax credits, and in the meantime, while GBE is going through its "trial and error" in Illinois, other wind projects will pretty much fill the market using the production tax credit to lower their costs.  If wind will be just as cheap after the tax credits expire, why the full-tilt, foaming-at-the-mouth rush to build new wind before the credits expire?  I simply don't believe you, Michael Skelly.  Show me.  After all, isn't that the spirit of Missouri?  You've got a flimsy excuse for everything, and considering all your previous claims have come to naught, why should anyone believe you now? 

The proof would come in the form of customers, something GBE doesn't really have.  Offering below cost "service" on GBE to some Missouri munis does not insure future success selling above cost service to other utilities.  In fact, that was the reason some of your other projects failed, right?  No customers.  No utilities were willing to step up and take the risk that 4,000 MW of new wind would come online at the right price.  Yesterday's decision by the MO Supreme Court doesn't change that.  The economics of your project are bad.  It's not attractive to your target buyers.  Without customers, the project will fail.

From KOMU:

Michael Skelly, president of Clean Line Energy, said the ruling "means Missourians are closer than ever to benefiting from the clean, affordable energy and economic boost this transformational infrastructure project will deliver to the Show-Me-State."

He added, "We are now turning our efforts to expediting approval from the Missouri Public Service Commission of this critical infrastructure project so that Missouri can realize these benefits as soon as possible."

No, they're not.  Yesterday's ruling doesn't make GBE any more of a reality than it was the day before.  It's just another round of permit wack-a-mole.  While GBE hit the mole in Missouri yesterday, the Illinois mole is way out of his hole and GBE can't manage to hit it.  Let's do an equation:  One chance at obtaining a permit < one actual permit.  I think the actual permit has more value.  Who would give away an actual permit in order to have a chance at obtaining a different permit.  Michael Skelly's vague chest beating means nothing.

Turning your efforts to the PSC?  Who's going to pay for that?  Don't you need lawyers, very expensive lawyers?  Got enough funds in the Clean Line treasure chest for that?  You're probably going to have an uphill battle convincing your investors to shell out more money on this trip to a brick wall.

From various AP reports:

Clean Line has been working on its proposed direct-current power line since 2010 but still hasn't been able to start construction. Skelly said he now hopes the project can be online by 2023 or 2024.

“The project has been on standby while we awaited the Missouri Supreme Court decision,” Clean Line President Michael Skelly said. “Now with this decision, we can get back after it.”

2023 or 2024?  Isn't it funny that the goal post keeps moving?  I think we're now about a dozen years from Skelly's original target online date.  That's 5 or 6 years from now.  Where is Clean Line going to get the money to continue this battle for another six years when it's running on fumes right now?

The project has been dead as a doornail.  The Court's decision only applied a little polish to the GBE turd that Skelly is rubbing like mad.  It's still a turd.  It has little chance of success.  The only thing Skelly might accomplish is to waste additional time and money and annoy his opponents. 

"Get after it?"  Is that some sort of colloquialism you borrowed in an attempt to sound all Mayberry?  Maybe it's not too late to borrow Jimmy's chore coat and go on a homespun homilies tour of Missouri counties.

Now let's review:

1.  GBE is unlikey to receive a permit in Illinois.
2.  GBE has no customers.
3.  The economics of wind will change with the expiration of the production tax credit.
4.  Clean Line has no revenue to support further regulatory and legal battles.

The only thing Clean Line got yesterday was an empty victory.  Grain Belt Express has little chance of success.

Tilt!  Tilt!  Tilt!