Here is an edited version of the Supreme Court's opinion to uphold the Appellate Court and deny the proposed Rock Island Clean Line (RICL) project. This is not the entire version, just an edited piece of the Court's analysis and conclusion. No attempt was made to distort in this edited version. It started with looking for key quotes and it ended in a good condensed version of 20 pages. So if you despise legalese, get a bowl of popcorn and try this version.
Underlying the law is a belief that these objectives can best be met through governmental supervision of public utilities and regulation of competition between them…. Because unrestrained competition prior to adoption of the Act had frequently resulted in the financial failure of utilities, the law adopted the principle of regulated monopoly…and aims to ensure efficient public utility service at reasonable rates by compelling established public utilities occupying a given field to provide adequate service while at the same time protecting them from ruinous competition.
Rock Island disputes this, arguing that it is not currently seeking eminent domain authority and may never do so if it succeeds in obtaining the easements it will need for the project through negotiated agreements with affected landowners.
The company’s second justification for seeking to place itself within the provisions of the Public Utilities Act and obtaining a certificate of public convenience and necessity from the Commission is similarly pragmatic. If it is under state regulatory authority, it will avoid the need to obtain local approval from each governmental unit through which the project will pass.
Whatever Rock Island’s motives for seeking a certificate of public necessity and convenience, the central question remains: Does it even qualify as a public utility under Illinois law so as to be eligible for such a certificate under section 8-406 of the Public Utilities Act (220 ILCS 5/8-406 (West
First, pursuant to the express language of section 3-105 of the Act (220 ILCS 5/3-105 (West 2012)), the company must also own, control, operate or manage, within this State, directly or indirectly, a plant, equipment, or property used or to be used for or in connection with (or must own or control any franchise, license, permit, or right to engage in) the production, transmission, sale, etc. of one of the specified commodities or services. Second, it must own, control, operate, or manage the plant, equipment, property, franchise, etc. “for public use.”
Rock Island fails to meet the first of these requirements. When referring to the ownership, control, management, and operation of a plant, equipment, property, franchise, etc., the statute is phrased in the present tense…. Rock Island does not presently own, control, manage, or operate any plant, equipment, property franchise, etc., in Illinois or elsewhere… It merely holds an option to acquire a parcel of real property. That is insufficient. Even though the parcel is the planned location for part of the yet-to-be-built transmission system, having an option to buy something is not the same as owning or even controlling it.
Under a prior version of the Public Utilities Act, such an interpretation would have been valid. Section 10 of the Public Utilities Act of 1913… the predecessor to section 3-105 of the current law, defined a public utility to mean and include every corporation, company, association, joint stock company or association, firm, partnership, or individual that “now or hereafter *** may own, control, operate or manage”
When the General Assembly repealed the prior Public Utilities Act and replaced it with the present statute, the “now or hereafter *** may” language was removed.
The real disagreement concerns the construction of law.
…and because Rock Island cannot meet the ownership test necessary to qualify as a public utility, the Commission’s order granting Rock Island a certificate of public convenience and necessity fails as a matter of law and cannot be sustained.
Nothing in the Public Utilities
Act prohibits new entrants such as Rock Island from commencing development of transmission lines immediately as a purely private project. So long as they do not transact business as a public utility, they will not be subject to the Public Utilities Act…
Requiring new entrants to proceed in this way may make the initial phase of their operations more difficult and cumbersome. For example, they will not have the benefit of eminent domain to obtain the property on which their facilities will be located. In Rock Island’s case, however, that particular problem should be no obstacle. As we have noted, the company has not sought, is not seeking, and represents that it may never ask for eminent domain power.
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.
For the foregoing reasons, we agree with the appellate court that the Commission erred in finding that Rock Island is a public utility. The company does not qualify as a public utility under Illinois law and was ineligible for a certificate of public convenience and necessity from the Commission. The appellate court was therefore correct when it reversed the Commission’s order granting a certificate of public convenience and necessity to the company, and it properly remanded the cause to the Commission with directions to enter an order consistent with its opinion. Accordingly, its judgment is affirmed.