Monday, December 7, 2015

Jimmy Glotfelty, Gallant Gallstone … and Registered Bifurcator



It’s getting a bit tiresome and sickening reading how Clean Line Energy claims to be so “gallant” in attempts to provide “clean” energy and wants to build privately owned for-profit transmission lines.  It’s a for profit powerline with a desire to obtain right of ways at the lowest price to maximize profits.  There’s nothing gallant about it.   This entire process of opposing Clean Line is probably more comparable to a gallstone, being uncomfortable at best, painful and causing worry in many.   At best, Clean Line is a gallant gallstone.  It’s a gallstone that thinks it is the center of the body.  It’s a gallstone that believe the body is there to serve its needs. 

Two interesting things happened last week.  The appeal of the Illinois Commerce Commission ruling that the Rock Island Clean Line (RICL) is granted public utility status under 8-406 of the Public Utility Act held oral arguments at the Third District Court of Appeals in Ottawa, Illinois.  RICL was granted approval by the ICC under 8-406 but denied under 8-503.  The latter is the road to eminent domain.  Ironically, the qualifications in the written law are to same and mystifying how the ICC can approve one and deny the other. 

While briefs and such have been filed, the oral arguments before the three judges was an interesting sparring match.   The Illinois Land Owners Association, Illinois Farm Bureau and Exelon were opposing RICL’s attorney.  The ICC attorney was in a tough position in the middle.  The ICC attorney clearly didn’t want to make any forward focused statements supporting RICL’s intentions.  Unfortunately for the ICC attorney, all Clean Line has is intentions.  They own nothing that can be considered a public utility.   

This placed the ICC attorney in a very awkward position.  Even more awkward, The Illinois Landowners Alliance, Farm Buruea, and Exelon are opposing the ICC decision, and not directly Clean Line’s llc. 

While the oral arguments are only a small part of the case and process of the appeal, my personal opinion is things went well for the residents of Illinois.  RICL’s request for approval under 8-503 died at the ICC and Clean Line did not choose to appeal that decision.  In my personal opinion there is a very good chance the Appellate Court will deny RICL’s request for Public Utility Status under 8-406. 

Arguments lasted about an hour fifteen minutes or so.  Here are some quotes from the oral arguments.  Each side had about 15 minutes to present their arguments with a final fifteen minutes for a rebuttal from the attorney representing the ILA, IFB, and Exelon. 

Attorney representing those groups opposing RICL
Rock Island got the certificate a year ago.  They haven’t even filed the purported financing documents that are supposed to be filed in the future.  They weren’t a utility then.  They aren’t one now, and they didn’t commit to ever be one.

They would not commit to ever building the project.  In fact they would only build the project in the words of their CFO “if it could find adequate market financing and that market financing would depend on whether or not that project would make profitable sense at some point in the future.

Judge:  Rock Island is not operating as a utility…
Attorney: No where.  No where.  No where in the world.

But the point is, that in Mississippi River (Fuel Corporation), there was assets, there were customers, that there was utility service, but because there was no pledge to serve the public, even that caused the Illinois Supreme Court to rule that it wasn’t a utility.   Here there are none of the six characteristics apply and again there is no commitment, no promise, no pledge to ever have them apply. 

You don’t grant a license to someone who doesn’t qualify in the hope or belief that years down the road they may be retroactively be qualified. 

ICC Attorney
This is a good example why we are all here.  This case is certainly unusual and bordering on unprecedented.

RICL Attorney
Iowa is a little strange.  ….In Iowa they seem to require you to go out and acquire the land and ask for eminent domain first and then present to the commission whether your project is needed and an appropriate transmission project.
Judge:  And your think that is strange?
Well it is just unusual in my experience.  When you look at it, why should it be an important issue, argue about getting eminent domain on someone’s property when the utility board hasn’t even ruled that you have a project that meets the criteria under our statute for being a public utility project.   

So ah, I don’t represent Rock Island in the Iowa proceedings, but it is my understanding that they are spending considerable amount of time with the commission trying to come up with a procedure that will result in the commission first deciding that the project is what we would call a Certificate…I don’t know what they call it there…and then addresses eminent domain so that it would be more consistent with Illinois …and both states together…so that there is a procedure in file that its…I would say it is moving forward but slowly attempting to resolve this sort of threshold.

Attorney representing those opposing RICL
To quote their president from the record,  “If the project wasn’t worth investing any further, then we would abandon it.”
From there CFO Mr. Berry “Rock Island will not be able to proceed with the construction of the project in the absence of sufficient transmission contracts to support the financing necessary to construct the project.”   That’s the financing they don’t have.  Neither of those things has happened and unlike every other utility including Ameren Transmission Company, they make no pledge to ever serve anyone. 

Even the 25% is an auction.  Highest bidder wins.  Everyone else is left without service.  That is not serving the public.  Now with respect to Ameren in particular, I also want to point out that Ameren started by building one line.  That line was built jointly according to the Commission’s order …. Makes clear that is was going funded, constructed, and operated in conjunction with Ameren IP, the existing utility, and it committed to build the project to serve Illinois customers, which Rock Island does not.  

So we briefly talked about the financing.  However useful that condition is, it is a future condition and it can’t ever replace a statutory requirement.  In 8-406B requires a showing of present capability and there isn’t.  It is not, I submit, the kind of case that warrants expanding, twisting , and disregarding the plain language of the statute.



Seriously, this entire RICL thing is getting old.   Time for this gallstone to be removed.

2 comments:

  1. I'm a reporter in the Quad Cities and produced a feature about last week's developments. You can find it here: http://wvik.org/post/updates-il-ia-transmission-line-project#stream/0 I listened to the audio recording of the oral arguments. My first reaction was, "Why is a ComEd/Exelon lawyer speaking for farmers and landowners, plus the utility itself?" My thought was that ComEd doesn't want any competition from RICL. And it's got the money to hire the best lawyer, so the farmers and landowners were happy to allow it. Second, it seemed at least one or two of the justices didn't understand the proposed project. And third, the ICC and RICL lawyers didn't get to present their case the same way the ComEd lawyer did. The justices kept interrupting them with questions, and some of those questions didn't seem to address the objections and stakes at the center of the case.

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  2. Well, the oral arguments is only a small part of the case after papers and briefs have been filed. It's also a time for the judges to interact with their own questions and challenges. To say one side or another "won" the oral argument isn't a huge indicator which way the case will go but a hint of sorts. This was setup with 15 minutes for those opposing the ICC's order, 15 minutes for the ICC, 15 minutes for the RICL lawyer, and finally 15 minutes rebuttal from those opposing the ICC's order. All told it is 30 minutes for those opposing the order and 30 minutes for those supporting the order to give RICL public utility status under 8-406.

    It would appear those who are contesting the ICC's order to grant RICL approval elected to pool their 30 minutes and let one orator speak on their behalf. Dividing 30 minutes between ComEd, Illinois Landowners Alliance, and the Illinois Farm Bureau would be counterproductive.

    The attorney for ComEd is a treat to watch. While he is probably usually advocating a transmission project for his company, He is also looking out for his company interest, just like in an Ameren transmission case, he is looking out for the interests of his client and potential rulings that could adversely affect the industry down the road. He is good. He is an enjoyment to watch. No attorney knows how to maneuver the halls of the ICC like him.

    As far as the Appellate judges peppering RICL's attorney with questions, let's face it, the company has a weak legal position. He's asking for the Public Utility Act to be reinterpreted to suit his clients business model.

    While listening to this case, it was interesting to reflect how the manipulation of the law to suit ones needs has filtered down to Ottawa, Illinois. I take a rather stick constructionist view if the Constitution and law. The notion the Constitution is a "living document" whose meaning can be manipulated by societal views is a bunch of bunk. The law is what it is and not meant to be manipulated to fit special circumstances. If the RICL business model doesn't fit within to model of the Illinois Public Utilities Act, then modify the business model or add a section to the act to allow Merchant Transmission Lines with proper regulations.


    We don't need to pervert the Public Utilities Act and eminent domain laws because wind energy is a favorite of a political party. The law is the law. If RICL does not want to play by Illinois' rules, then take the long way around the state.

    Look at ComEd's long battle with smartmeters. The law wasn't written to allow cost allocation for smartmeters. The ICC position was cost allocation for smartmeters is OK, but the law doesn't allow it. The law had to be changed to start introducing smartmeters to the Chicagoland market. The law wasn't bent, perverted, or reinterpreted to allow it. Yet, in the case of RICL, the ICC is bending the rules quite a bit to promote wind energy corporations and this merchant transmission model. Shall we make this perversion the new standard of the Illinois Public Utilities Act or is it a one time deal?

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