Battle over $600M wind power superhighway heads to Illinois Supreme Court

Source: By Becky Yerak, Chicago Tribune • Posted: Monday, December 5, 2016

Rock Island Clean Line envisions building an electric project that would transmit wind energy to Grundy County in Illinois from planned turbines in Iowa.

Backers say $600 million would be spent on the 120-mile stretch in Illinois, in the process creating construction jobs, stimulating the manufacturing sector, generating tax and other revenues for state and local governments, and providing low-cost, clean renewable energy to 1.4 million Midwest homes.

There’s just one problem: The 300-member Illinois Landowners Alliance, the 80,000-member Illinois Farm Bureau and Commonwealth Edison have fought the project. In August, an appellate court handed the opponents a victory, reversing a 2014 Illinois Commerce Commission decision that allowed the construction of the transmission line to proceed.

But it’s not yet lights out for Rock Island Clean Line. Last week the Illinois Supreme Court agreed to review the appellate court’s decision.

In the works for more than five years, backers say the project is unusual because it would be paid for by private investors, not ratepayers. Economic studies and other evidence presented by Rock Island in the case state that the project would reduce electricity costs by hundreds of millions of dollars. In fighting the project, opponents, however, are worried that land may be taken for the project through eminent domain. They also argue that Rock Island doesn’t qualify as a utility, and say the project might never even come to fruition.

Paul Marshall, who owns a fourth-generation 200-acre corn and soybean farm near Serena, said Rock Island would cover about 20 acres of his property. Eminent domain is only one concern.

Marshall, secretary of the landowners alliance, has made accommodations for other utilities, including a natural gas pipeline, but part of the legal fight over Rock Island is whether it even qualifies as a public utility eligible to receive a “certificate of public convenience and necessity” from the ICC. The appellate court ruled that Rock Island wasn’t a public utility, partly because it doesn’t own or operate Illinois assets.

“What’s different about this is that it’s not a utility but a private entity,” Marshall said. “The windmills they say will generate the energy don’t exist yet.”

Nor does Marshall buy Rock Island’s claims of cheaper Midwest energy, given that the project has no track record. And even if the transmission line does create the 1,450 construction jobs that backers estimate, those will be offset by good-paying jobs lost at energy competitors, he said.

Marshall said he doesn’t like the idea of Rock Island paying him once for an easement giving the transmission line “the right to use the property forever.” A rental arrangement or revenue- or profit-sharing would be “eminently more fair,” he said.

The line also would force him to change his farming practices.

He currently applies fungicides to his corn and soybeans using aerial spraying, but a transmission line more than 100 feet high could obstruct low-flying aircraft and force him to change his application methods. He also worries his underground drainage system could be damaged during construction.

Hans Detweiler, vice president of Clean Line Energy Partners, Rock Island’s Houston-based owner, said he’s “encouraged” that Illinois’ high court will review the case and hopes it “will recognize that privately funded infrastructure projects” like Rock Island “serve a public purpose.” Other project backers include the Building Owners and Managers Association of Chicago and the Natural Resources Defense Council.

In a court filing, Rock Island said the appellate court “blatantly ignored the need” to defer to the ICC’s interpretation of the Public Utilities Act. The transmission line would promote competition in the electric market and increase the use of renewable energy, and killing the transmission line also would discourage others from pursuing such projects, it said.

But Mary Mauch, executive director for the landowners group, said she’s “confident that the law will prevail again at the Illinois Supreme Court.” Initial briefs are due at the end of December, Mauch said.

“We’ve believed from the very beginning that private, startup companies operating outside of the established electric grid don’t have the same rights of eminent domain as real electric utility companies,” she said.

Grundy County stands to benefit from about half of the $600 million spent on the project in Illinois, Rock Island says.

In addition to creating construction jobs, the project would benefit Illinois manufacturers like Chicago-based S&C Electric, which designs and makes products that help integrate wind energy plants into the grid, Detweiler said.

Also, besides state and local taxes, Rock Island would pay each county in which the transmission line passes $7,000 a year for each mile for 20 years. That would amount to total payments of $16.8 million. Nancy Norton Ammer, chief executive of the Grundy Economic Development Council, said taxes paid by Rock Island would benefit schools and other municipal bodies.

Rock Island said it holds easements on a “small” percentage of properties on the proposed project route, and has options to buy some parcels, including a Channahon property on which a facility would be installed.

The company didn’t seek to acquire land through eminent domain; to do so, it would need to file another petition with the ICC.

But in an October filing with the state Supreme Court, the farm bureau and Illinois landowners expressed worries about the “threat of eminent domain” that they believe will be inevitable if the commission’s order is allowed to stand. “The many member-landowners of these two organizations oppose having to face the prospect of Rock Island forcing its way onto their farms and other lands through the legal process to build its transmission line,” they said.

Rock Island doesn’t know if the Iowa wind farms that would generate the electricity to carry over the transmission line will ever be built, the farm bureau and landowners argued, calling the project “highly tenuous and, at this point, speculative.”

Financing for the project isn’t entirely lined up, Rock Island’s Detweiler said. Contracts with customers typically are signed after regulatory approvals. Besides the Illinois uncertainty, Rock Island Clean Line also is going through the regulatory process in Iowa, he said.

Clean Line Energy Partners is partly owned by Grid America Holdings, which is owned by National Grid USA. National Grid owns more than 8,600 miles of U.S. transmission lines.

That’s of little consolation to Marshall, the Serena farmer.

“When I look south out of my upstairs bedroom I get a nice view,” Marshall said. “When I try to envision this scar across the ground, it will screw up my view, and I’d rather not live next to it.”