Monday, February 3, 2014

Quotes from the ICC Staff Initial Brief on the Rock Island Clean Line




The ICC Staff's Initial Brief reads like Orion Samuelson's commentary from the US FARM REPORT.  Cryptic and leave a person wondering if they are taking the middle ground or ripping apart the subject matter.  It's understandable why.  Regardless the case and circumstance (in this case it’s RICL Docket 12-0560), they leave room for the judge to make his own decision.  The staff’s job is to advise and not tell the judge how he should rule.  At least that’s my uneducated reasoning
Orion Samuelson, on the other hand, doesn't want to offend Archer Daniels Midland, Monsanto, and Pioneer.  He can't directly offend the show's sponsors.
The guys are Clean Line are probably asking "Who's Orion Samuelson?"  Ask Pierre Adams at Kiewit.  He's Clean Line's expert on all things agricultural. 
Below are so key quotes from the ICC Staff's Initial Brief.  I have a guess on the staff’s opinion and Clean Line is probably reading this brief and interpreting it in another manner.  We all have our inherent bias.

Introduction

Rock Island essentially concedes in its testimony that no need for the proposed Project has actually been established. Specifically, Rock Island witness Berry states that “permanent installation of facilities cannot and will not commence unless and until the need for the Project is actually established through the market test of transmission customers contracting for sufficient service on the transmission line to support and justify financings that raise sufficient capital to cover the total Project cost.” Page 9.

Staff believes that while it cannot be said that RICL has demonstrated that the proposed Project is “indispensably requisite,” and, in fact, acknowledged that there is no actual need for it at this time (Rock Island Ex. 10.13, 3-4), whether the Project is “needful and useful” to a degree sufficient to justify the granting of a certificate of public convenience and necessity should be ascertained, among other things, by comparing the Project’s benefits to its costs. Page 19.

As such, Staff believes that Rock Island has not demonstrated that the Project is the “necessary to provide adequate reliable, and efficient service” test based on any tendency of the RICL to maintain or improve the reliability of the electric system in Illinois. Page 21

In his direct testimony, Mr. Rashid noted that RICL did not provide information on whether it considered or examined alternatives to the proposed project to ensure that the proposed project met the least-cost criterion defined in Section 8-406 of the Act. Page 21

Eminent Domain

Indeed, while the Company said that it would not pursue that option unless it is unsuccessful in obtaining all land and rights-of-way needed after making reasonable efforts to acquire the land rights through negotiations and voluntary transactions, it did not rule out that option. Page 15-16

Staff has concerns with any finding that Rock Island would be an Illinois “public utility,” entitled to rights inherent in that status, including the right, when authorized following proper application to the Commission, to be granted by the Commission the right to exercise the power of eminent domain. Without having clearly shown that it is offering its facilities for “public use,” Rock Island should not be granted a status that would permit it to pursue approvals for the taking of private property. Page 16

The Commission should consider with care the grant of a potential right of infringement on private property rights to an entity which would be doing so primarily for its own admittedly private purposes and not for “public use.”  Page 16.


Argument and Staff Conclusion

Staff believes that with respect to the second part of the first numbered condition of Section 8-406(b), in considering whether the utility has shown that the Project “will promote the development of an effectively competitive electricity market that operates efficiently, is equitable to all customers, and is the least cost means of satisfying those objectives,” the Commission should consider whether the utility has shown that: (a) the Project contributes to increasing the degree of competition for electric energy, capacity availability, renewable energy credits, or other electricity market goods and service; (b) the benefits of the increased competition outweigh the costs of the Project; and (c) the Project will not prevent an even greater degree of competition being attained through an alternative project or some combination of alternative projects. On this record, it is not clear that the Company has met its burden. Page 56

RICL maintains that its Project will enhance competition for electric energy and capacity and renewable energy credits. However, this would be true of any and all transmission projects within MISO or PJM. Page 57

Thus, as Staff argues in sub-section b, above, in considering whether the utility has shown that the Project “will promote the development of an effectively competitive electricity market that operates efficiently, is equitable to all customers, and is the least cost means of satisfying those objectives,” the Commission may consider whether the utility has shown that: (a) the Project contributes to increasing the degree of competition for electric energy, capacity availability, renewable energy credits, or other electricity market goods and service; (b) the benefits of the increased competition outweigh the costs of the Project; and (c) the Project will not prevent an even greater degree of competition being attained through an alternative project or some combination of alternative projects. In Staff’s view, substantial uncertainties exist as to whether the evidence supports such a finding. Page 57.

Staff agrees that there is significant uncertainty about whether the Project will successfully promote or contribute to an effectively competitive electricity market that operates efficiently and is the least cost means of satisfying those objectives. Page 58.

The results were inconclusive and varied widely…. These uncertainties should not be overlooked. Page 59.

Staff notes that there is no evidence suggesting that the Project would prevent an even greater degree of competition being attained through an alternative project or some combination of alternative projects.  Page 60.



Manage and Supervise Construction



Mr. Rashid’s skepticism stemmed from the fact that, in direct testimony, RICL had provided no evidence that it, as an entity, or its parent company had ever managed or supervised a transmission line project, let alone a transmission line project of this magnitude. Mr. Rashid requested that RICL provide information in its rebuttal testimony on its capability to efficiently manage and supervise the construction of the proposed project. Page 61.


Staff believes that RICL has not demonstrated that it is capable of efficiently managing and supervising the construction process and has taken sufficient action to ensure adequate and efficient construction and supervision thereof. Aside from a lack of experienced employees, RICL failed to demonstrate that it has the organization to make use of those employees to succeed in this project. Page 62.


According to the record evidence, RICL has never built a transmission line project of any kind or of any size. Page 62.


As such, Rock Island has not shown that the it is capable of efficiently managing and supervising the construction process and has taken sufficient action to ensure adequate and efficient construction and supervision thereof, as required under Section 8-406(b)(2) of the Act. 220 ILCS 5/8-406(b)(2). Page 62.

No comments:

Post a Comment