Thursday, January 30, 2014

What is RICL's Iowa Land Acquisition Comany


What is the purpose of a subsidiary of RICL called the Iowa Land Acquisition Company?

The attorney for the Illinois Landowners Alliance did a good number on Skelly at his testimony before the ICC.  After reading it, I can image Michael Skelly smirking and thinking “Is this all you got”.   The Illinois Landowners Alliance attorney, Bill Shay started questioning Skelly about Exhibit 1.1 of his original testimony back in October 2012.  Exhibit 1.1 is an organizational chart, a flow chart basically.  Unlike other organizational charts, that list people, titles, and position, this organizational chart lists shell companies under Clean Line Energy Partners LLC.



What threw Skelly off his game was questions about the word “confidential” in the upper corner. It was an apparent trivial misprint of sorts, as this organizational chart has nothing to do with the company’s lack of finances.  Like I said, I image Skelly was thinking “Is this all you got?  A misprint of the word “confidential”…Your making a big deal of that?” 

From there the questioning became more difficult for Skelly.  As it was discussed who is actually the investors, National Grid, Does Skelly and company own a piece of CLE, does National Grid have an option to buy RICL, and as mentioned in the previous post, what the heck is the Rock Island Wind Line LLC.  From reading the transcript, it looked brutal for Skelly. 

BTW Mike, if your reading this, when “Exhibit 1.1 was mentioned, I knew where he was going immediately.  “LMAO” is the correct term for how I felt as I began reading the testimony.  It’s probably best I wasn’t there.  I’d be bursting out laughing, doing the church pew laugh, attempting to hold it in, or doing like Clean Line's Executive Vice President  Dave Barry, mouth open and swinging my neck to every question and every response.  Wow, that guy was doing some intense listening.

So anyway, as mentioned in a previous post, the ComEd attorney questioned Skelly about the company Rock Island Wind Line LLC.  Michael Skelly wasn’t sure the purpose of that company and the lawyer needed to ask Dave Barry.  It wouldn’t be for a possible wind energy company would it?

In the Clean Line Energy Partners LLC organizational chart, there is another two companies of interest, the Iowa Land Acquisition Company LLC and the Oklahoma Land Acquisition Company LLC.  I know what the purpose of the Oklahoma Company, a subsidiary of Plains & Eastern Clean Line, but I don’t know what the purpose of the Iowa Land Acquisition Company is.  The best way to explain what the purpose of the Iowa Land Acquisition Company LLC is to explain the purpose of the Oklahoma company.

Clean Line desires to build Plains & Eastern Clean Line under Section 1222 of the 2005 Energy Powers Act.  Section 1222 allows for federal siting authority (eminent domain to trump Arkansas rulings) for projects in the SPP region.  SPP is a Regional Transmission Organization, like MISO and PJM.  Clean Line failed to obtained public utility status in Arkansas, but they got it in Oklahoma.  So Clean Line is using Sec 1222 to obtain federal eminent domain in Arkansas. 

Unfortunately for Clean Line, there  are some strings attached to SEC 1222.  There is a money cap.  Officially, Clean Line won’t be acquiring the land in Arkansas, the Department of Energy will be acquiring the Right of Way Easement for Clean Line.  To stay under the DoE cap, Clean Line will pay for everything but the ROW through Arkansas.  If the DoE were to pay for the ROW through both Arkansas and Oklahoma at a fair market value (not the pittance offered by CLE) for a ROW, Clean Line would likely  be over the limit.  So Clean Line will acquire the easement in Oklahoma through is subsidiary/shell company Oklahoma Land Acquisition Company LLC and let the DoE acquire the land through Arkansas. 

So what’s the purpose of the Iowa Land Acquisition Company? 

One more question.  If there is a pre-constructional sale of RICL to National Grid, does the use of the Iowa Land Acquisition Company enhance Michael Skelly's profit from the sale?  Let's not forget Michael Skelly finally conceded under cross examination that he will personally profit from the sale of projects, like the Rock Island Clean Line.

ILA Attorney Q. Okay. And just to finish up this line, you are an owner of limited liability company units in Clean Line Energy?
Michael Skelly A. Right.


OK, this is really my final question.  Looking at the Clean Line Energy Partners organizational chart, if RICL were to be sold to National Grid (assuming they recieve public utility status in Iowa and Illinois)  will the sale be at the Rock Island Clean Line LLC or will the sale be at the Rock Island Wind Line LLC (RIWL)?  

When asked at the ICC, Michael Skelly could not remember the purpose of the Rock Island Wind Line LLC division of Clean Line Energy.  If RICL is sold to National Grid, does Clean Line Energy still have a purpose of RIWL?




ComEd Atty Q. Okay. And Rock Island Wind Line LLC -- is that an -- does that entity have any operating role?
Michael Skelly A. No.
ComEd Atty Q.  What is the function of that entity,if you could describe it?
Michael Skelly A. Just give me -- if you don't mind directing me to the --
ComEd Atty Q.  Oh, sure. It's the attachment to your direct testimony or Rock Island Exhibit 1.1. It's that flow chart of the entities or  organizational structure. Do you need me to repeat the question?
Michael Skelly A. No. No. I understand the question. I am not a hundred percent sure; so I will defer to my colleague Dave Berry.
ComEd Atty Q.  Okay. As far as you know, it has no active role in management or operation of Rock Island?
Michael Skelly A. I'll defer to my colleague, if that's okay.

I'd suggest Mr. Skelly come up with some better answers than "ASK DAVE BERRY" before the Iowa Utility Board asks the same question.

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