Thursday, December 19, 2013

National Grid's "Preconstruction" Option to Buy RICL, GBE, P&ECL, and those other projects out west

To:     Micheal Skelly
          Clean Line Energy Partners llc
          d.b.a. Rock Island Clean Line
From: A Concerned Farmer
Date: December 19, 2013
Re:     National Grid's Preconstruction Option to Buy
Code Name: The Poop is Hitting the Fan

In case you haven’t realized it, just wanted to let you know the testimonies given at the Illinois Commerce Commission have been raising quite a ruckus out here in the country.  The admission that you and …well…we are perceiving it to be you and several others in the upper management of the company have an ownership stake in the company and it;s not sitting well.  Combine that with the new knowledge that Nation Grid has an option to buy any and all projects including the Grain Belt Express and the Rock Island Clean Line is not looking good.

I believe the word you used in the testimony in reference to National Grid’s option was “preconstruction”.  It’s being understood that there is an option to buy these projects and there’s what amount to as a bonus for you to obtain the right of way easements.  It’s also being interpreted the cheaper you can purchase these easements, the greater your piece of the rewards will be when National Grid exercises their option. 

This is not going to play well in Kansas.
How is this going to play out in a Marshall County court house for an eminent domain hearing?

Clean Line will go before the court in multiple eminent domain hearing, amble into the courthouse, and tell a local judge;

“We are a “public utility”.  The Kansas Corporation Commission says so.  We want to acquire this right of way for a “fair” price and as a “public utility” we plan to sell it to National Grid as soon as all the easements are obtained.  The cheaper we can obtain the easements, the more money will go into my back pocket when I sell it to National Grid.”

That’s essentially Clean Line’s message for an eminent domain hearing, at least that’s likely the message a local judge and a local jury will hear at each individual eminent domain hearing.  That's not going to play well before a jury.

Don’t think for a minute that all eminent domain cases in a state will be heard as one case.  Each property will surely need their own hearing.  Just because eminent domain can be granted on a state wide basis for a project, doesn’t mean all landowners will be grouped into one generic hearing.  Each property is different.  Each landowner is different.

How else do would you explain a farmers logic to answers like this given in your cross examination;

ComEd Attorney: About that topic. My question is, is it part of Clean Line's business plan to contemplate selling Rock Island or one of the other projects after they are operational and built?

Michael Skelly: Well, the optionality that Grid has or the right they have to purchase a project is preconstruction. So does that answer your question?

ComEd Attorney: Well, that answers part of it. Is it -- so I think that certainly answers it for National Grid.  But would Clean Line otherwise -- do they otherwise have any plan to consider selling any of the transmission lines that are in development if they're completed and made operational?

Michael Skelly: Some of this hinges around the definition of "selling," which sounds like a nonsensical thing, but when you're a company and you're raising money, you're selling part of the company. So in that sense, yes, we have plans to sell part of the company along the way.

Yeah, I think more information was given out freely than what RICL’s lawyer would prefer and perhaps more than Michael Skelly intended.  “Preconstruction” is a rather big and telling word.  As a simple farmboy from Illinois, I hear that as “after the easements are all obtained”.

Mike, my advice is get on top of this immediately!  Do not hide behind "confidential" court orders.  Tell the public exactly how much ownership you have and if a project is sold, if there is a "profit sharing" plan for Clean Line's employee's out in the field, you might want to share that also.  Real public utilities disclose this kind of information.

Going forward it is going to become much harder to make comparisons with other existing public utilities and hide behind "confidentiality" of being a company made up of speculation projects.  Providing more information about how the management will profit from the sale of project will allow Clean Line Energy to stay in front of this issue before grassroot organizations are able to utilize the lack of information.

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