The Missouri Public Service Commission, in an order issued on Aug. 16, denied Grain Belt Express Clean Line LLC’s (referred to as GBE in the order) application for a certificate of convenience and necessity (CCN) for an approximately 780-mile transmission line.
GBE is a wholly owned subsidiary of Grain Belt Express Holding LLC, which is a wholly owned subsidiary of Clean Line Energy Partners LLC.
The order also noted that GBE in August 2016 filed the application with the commission seeking approval to build, own, operate, control, manage, and maintain the high voltage direct current, overhead, multi-terminal +600-kV transmission line, as well as associated facilities within Buchanan, Clinton, Caldwell, Carroll, Chariton, Randolph, Monroe and Ralls counties in Missouri, and a converter station in Ralls County.
The commission noted that the project would traverse Kansas, Missouri, Illinois, and Indiana, including about 206 miles in Missouri. The project would deliver 500 MW of wind-generated electricity from western Kansas to customers in Missouri, and another 3,500 MW to states further east, the commission said.
The project would have three converter stations, with one of them located in western Kansas, where wind generating facilities would connect to the project via alternating current (AC) lines, while the other two – which would be located in eastern Missouri and eastern Illinois – would deliver electricity to the AC grid through interconnections with transmission owners in the systems of the Midcontinent ISO (MISO) and PJM Interconnection.
The project’s development, construction, and operations costs would be borne by the investors in Clean Line and the transmission customers, the commission added, noting that the project’s costs would not be recovered through the cost allocation process of any regional transmission organization approved by FERC. The project is a participant-funded, “shipper pays” transmission line, and GBE would recover its capital costs by entering into voluntary, market-driven contracts with entities that want to become transmission customers of the project, the commission said.
GBE would offer transmission service through an open access transmission tariff that would be filed with, and subject to the jurisdiction of, FERC under the Federal Power Act and FERC regulations, the commission said. GBE customers would consist principally of wind energy producers in western Kansas and wholesale buyers of electricity, such as utilities, competitive retail energy suppliers, brokers, and marketers, the commission said.
The project would not provide service to end-use customers or provide retail service in Missouri, so the project would not be rate-regulated by the commission.
The commission added that GBE in 2012 received assent from the county commissioners of Buchanan, Caldwell, Carroll, Chariton, Clinton, Monroe, Ralls, and Randolph counties authorizing the company to build and operate poles, lines, conduits, and conductors for utility purposes through, along, and across the public roads and highways of those counties.
The county commissioners of Clinton, Chariton, Caldwell, Ralls, and Monroe counties in 2014 attempted to rescind the previously granted county assents, the commission said, adding that GBE does not have an assent from the Caldwell County Commission to cross that county’s public roads and highways. The commission noted that by judgment dated Oct. 7, 2015, the Caldwell County Circuit Court held that the Caldwell County Commission violated the Missouri Sunshine Law when it gave its assent, rendering that assent invalid and void.
The commission noted that in a prior and separate case, Ameren’s (NYSE:AEE) Ameren Transmission Company of Illinois (ATXI) requested a CCN to build and operate an interstate electric transmission line running through several counties in Missouri that would not serve retail customers.
ATXI did not have assent from any of the counties through which that proposed line would traverse, the commission said, adding that in granting the CCN, it concluded that such assents were required and imposed a condition that ATXI must obtain the assent from each such county before the CCN became effective.
ATXI had argued, in part, that it need not obtain county assents because it applied to the commission for a line certificate under “Section 393.170.1,” and not an area certificate under “Section 393.170.2, RSMo,” the commission said. ATXI claimed that line certificates do not require such county assents, the commission noted.
The commission said that the threshold issue for determination is whether it may lawfully issue to GBE the CCN that the company seeks. The parties’ arguments involve whether proof of county assents under Section 229.100, RSMo affects the commission’s statutory authority to grant a CCN in this case, the commission said. Section 229.100 requires assent of the county commission before a company may erect poles for the suspension of electric light or power wires under or across the public roads or highways of that county, the commission noted.
Discussing the ATXI matter, the commission noted that on appeal, the Western District Court of Appeals determined that the commission lacked authority to grant a CCN without evidence that ATXI had received those county assents, even if the commission made the CCN conditional on ATXI obtaining the assents in the future.
The court vacated the commission’s report and order issuing a CCN to ATXI, the commission said, adding that while it disagreed with the legal analysis and conclusions in that opinion and asked the Supreme Court of Missouri to accept transfer of the case, that court declined. The Western District ATXI opinion is now final and binding on the commission, the commission said.
ATXI, in its CCN application case at the commission, applied for and received a line certificate, not an area certificate, the commission noted.
In the GBE case, as in the ATXI court case, there is a disputed issue as to whether the commission has the statutory authority to grant a line certificate to GBE without it having filed the required county assents. However, the commission added, in the ATXI case, the court stated that “county commission assents required by section 229.100 and 4 CSR 240-3.105(1)(D)1 must be submitted to the PSC before the PSC grants a CCN.”
There are no material factual distinctions between the ATXI court case and the GBE case that would permit the commission to reach a different result on the question of statutory authority to grant a CCN in this case, the commission said. Accordingly, the ATXI court case and its plain language regarding the necessity of obtaining prior county assents apply to the GBE application even though that opinion did not specifically cite to subsection 1 of Section 393.170, the subsection under which GBE requested a CCN, the commission said.
GBE did not submit evidence of county assents in this case, and there is clear evidence that GBE lacks a county assent from at least one county, the commission said.
“Under the court’s direction set forth in Ameren Transmission Co., the commission cannot lawfully issue a CCN to GBE until the company submits evidence that it has obtained the necessary county assents under Section 229.100,” the commission said.
The commission noted that since the application must be denied, the pending motions in the case are rendered moot and will be denied. The order is become effective on Sept. 15, the commission said.
According to the order, Commissioner Stephen Stoll concurs, while Chairman Daniel Hall and Commissioners William Kenney, Scott Rupp, and Maida Coleman concur, with a separate concurring opinion.
In that concurring opinion, the commissioners said that had it not been for the ATXI court opinion, “we would have granted the GBE application, as the evidence showed that the GBE project is ‘necessary or convenient for the public service.’”
The commissioners said, “The parties have not disputed that GBE is qualified or has the financial ability to provide the service, and in our view the evidence in the record shows that GBE also meets the remaining three factors that were in dispute – need, economic feasibility, and public interest.”
In an Aug. 16 statement, Clean Line Energy President Michael Skelly said: “We will review the order in detail to determine next steps for the project. We are currently assessing all existing authorities available to move the Grain Belt Express project forward, including but not limited to legal appeals.”
Among other things, he said: “The PSC’s decision to deny approval of the project, despite the clear public benefits, sends a clear message that investors contemplating new infrastructure projects should not come to Missouri. Today’s ruling is inconsistent with good government and sound public policy and it is our hope that moving forward Missouri will work to remove barriers to building new critical infrastructure projects.”
Clean Line Energy said in the statement that the commission’s ruling precludes new linear infrastructure projects from being approved by the commission without first securing road crossing permission from each county they traverse.
While the commission’s decision is disappointing to the project, the company said that “it is devastating for Missouri workers who will be deprived of good paying local jobs and Missouri ratepayers who will lose more than $200 million in energy savings. This decision directly impacts the many Missouri companies who stood ready to construct the line and build the components in Missouri factories.”
Steve Adams, president of PAR Electrical Contractors, Inc., said in the statement, in part, that the company is disappointed in the commission’s decision, adding that the company was selected to build the line, which would create opportunity for more than 600 Missouri-based PAR employees.
Clean Line Energy said that Grain Belt Express has a contract with more than three dozen Missouri cities to provide access to new low-cost energy, estimated to save Missourians more than $10m annually, and that the commission’s decision prevents the opportunity for those savings.
Clean Line Energy also said that companies and organizations that participated in the case in support of the Grain Belt Express include the Missouri Industrial Energy Consumers, Missouri Retailers Association, Missouri Department of Economic Development, Walmart, IBEW, Natural Resources Defense Council, Missouri Sierra Club, and Wind on the Wires.