Requests for Rehearing Filed in ICC Grain Belt Case

On Monday, the Illinois Commerce Commission was hit with an onslaught of Requests for Rehearing of its Order issuing a Certificate of Public Convenience and Necessity to Grain Belt Express.  Even Clean Line filed one!

The majority of the requests focus on the Commission's error in allowing GBE to utilize the expedited permitting process reserved for public utilities.  Grain Belt Express is not a public utility.

Rehearing requests came from:

Concerned Citizens & Property Owners.  CCPO concentrates on the expedited process error.

Illinois Farm Bureau.  Farm Bureau concentrates on the expedited process error and additionally contends that the project is not the least cost option.

GBX is asking for a back-up plan for its field of dreams approach to recovering costs, by coming back to the Commission to comply with the financing condition proposed in the Final Order.

GBE does not have the capacity to manage and supervise construction of the project, nor the ability to finance it.  Farm Bureau contends that issuance of the CPCN is premature.  It also believes that the actions of the Missouri PSC make GBE moot.

As the Farm Bureau previously argued before this Commission, the denial of GBX’s Application by the MPSC, along with the recent Circuit Court of Caldwell County Order which held that GBX has no authority to construct the proposed line through Caldwell County, Missouri, there will be no construction in Illinois by GBX due to the denials in Missouri. This Commission should consider additional evidence on this issue which occurred after the close of the evidentiary hearings, as described in Exhibit A, the Affidavit of Paul A. Agathen, a Missouri attorney who represents the Missouri Landowners Alliance (“MLA”). The Final Order erred on this issue. Thus, the Commission should rehear this issue.

The Illinois Landowners Alliance request parallels the Farm Bureau's, and adds that the Commission erred in its finding that GBE would promote the public convenience and necessity and promote the development of a competitive electricity market.  It also contends that the permit will "create an immediate cloud and deprivation of property rights which the landowners along the 200-mile route would experience for an unknown period of time."

Grain Belt whines that the Commission made an error when it said, "The Commission finds that GBX has not demonstrated that the Project is needed to provide adequate, reliable, and efficient service to customers within the meaning of Section 8-406.1."  Sounds good to me!  What's not to like?  GBE also gets its panties in a wad over the fact that the Order did not specifically mention the 345-kV facilities running from the converter station to the substation in Indiana.

But... I've saved the best for last.  Read this one slowly and savor it like a tasty after dinner mint.  The request for rehearing of Mary Ellen Zotos is a knowledgeable, entertaining look at the bald truth of GBE and points out all that is plainly ridiculous about GBE and the ICC's Order.  This attorney is awesome!  What separates a good attorney from a great attorney his command of written language, and this request contains enough zingers and snark to fuel a thousand anti-Clean Line Facebook posts.  Here's just a few snippets:

The record in this docket is devoid of any evidence that the Project would promote the convenience or necessity of anyone other than GBX and certain West Kansas wind developers who said they would use the Project if it ever gets built.

Boiled down, GBX merely asserts that a beneficial project like the Project is needed. Why is it needed? Because it is so beneficial. GBX’s argument that a need for the project exists based on a set of alleged benefits amounts to question-begging on a grand scale. GBX assumes what the Commission should require it to prove. Rather than focus on whether there is any need for the project, GBX jumps right into a show-and-tell on how beneficial the Project will be. The Commission concludes from this that a project with this many benefits must be needed.

Stated another way, the Commission fails to distinguish a benefit from a need. It merely accepts GBX’s catalog of purported benefits as proof of need. Under the Commission’s look-only-at-the-benefits logic, it could just as easily conclude that residents of Point Barrow, Alaska need Frigidaires.

...the Illinois RPS may be satisfied by buying RECs generated in GBX’s targeted west Kansas resource area, and those west Kansas-generated RECs can be purchased without having to build a $2,750,000,000 transmission line across four states.

...the GBX Project is “[l]ike that old 1970s song about Oz and the Tin Man, [because GBX] will give nothing to PJM that it doesn’t already have.”

While the Commission makes soothing noises that it takes seriously the landowners’ concerns about GBX’s ability to use the power of eminent domain against them, it immediately and blatantly contradicts itself by dismissing their concerns as unwarranted because GBX has not specifically requested eminent domain authority in this docket.  Less than a moment’s thought suffices to show the absurdity of the Commission’s position on this issue. If GBX is granted a CPCN it could ultimately use the power of eminent domain against landowners under Section 8-509.
Instead of coming to grips with the power of eminent domain as an integral component of public utility easement acquisitions, the Commission adopts the Pollyanna Principle and accepts at face value GBX’s well-oiled talking points about its voluntary “code of conduct” when dealing with landowners, its promises of respectful treatment, its commitment to negotiate reasonably, and so forth. For the Commission to completely discount the potential impact of eminent domain on landowners simply because GBX did not ask for it in this docket is arbitrary and capricious, and an utter abdication of the Commission’s duty to Illinois citizens.

The Commission’s attitude toward GBX is one of serene and nearly limitless benevolence: whatever GBX can’t do now, it can certainly do later. The Commission will grant GBX its CPCN here and now even though it can’t satisfy most of the requirements of Section 8-406.1 until some unknown point in the future.

But when the landowners raise the issue of GBX’s potential future use of the power of eminent domain against them, which the Commission knows full well inheres in every easement negotiation between GBX and a landowner, the Commission summarily dismisses their concerns as premature because GBX hasn’t asked for eminent domain power here and now, in this docket. In this the Commission subjects the landowners to an egregious double standard, and indulges itself in arbitrariness and caprice of the grossest sort.

GBX’s least cost argument thus rests entirely on its claim that it has no alternative but to be least cost because its entire corporate existence will be some kind of Darwinian
market struggle where only the fittest survive.

The unmistakable irony here is that GBX destroys its own claim to be least cost by asserting that it can exempt itself from those same inexorable free market forces if the going gets tough: GBX reserves to itself the right to seek cost allocation to ratepayers, and in so doing proves itself just another corporate dissembler trying to evade committing itself irrevocably to the ups and downs of the market. And if there are too many downs, the ratepayers can bail GBX out.

But in this docket GBX tells the Commission that it is a “merchant transmission owner” not because it has assumed the full market risk of the Project, but because it plans to earn revenues through discrete transmission services contracts with shippers. This definition of “merchant” transmission owner” appears nowhere in FERC’s orders. That’s because it is a definition concocted entirely by GBX itself, and it differs fundamentally from FERC’s.

Understanding the term “assumption of all market risk” does not require a degree in economics: an assumption of all market risk means exactly that, all market risk, come Hell or high water.

This Commission has no jurisdiction to determine whether or how much of an interstate transmission operator’s costs may be recovered from anyone. The rates, terms and conditions of service for interstate transmission are exclusively matters of federal jurisdiction.

...GBX has no power to confer on this Commission subject matter jurisdiction over the rates, terms and conditions of service on interstate transmission facilities.

If GBX were really a “merchant” transmission owner as defined by FERC, then there would be no questions concerning cost allocation,
and this entire discussion would be unnecessary. GBX simply wants to have it both ways, eating its free market cake while having its cost allocation too.

I hope you enjoyed that as much as I did!   The attorney who wrote it, Paul Neilan, also writes a blog.  If you enjoyed that filing, you'll probably enjoy the blog as well.

The ICC now has 20 days to consider the requests and make a decision to either rehear the case or deny the requests.  If the Commission denies the requests, the litigants can proceed to court appeals.

Things are definitely heating up in Illinois!  More fun to come!