Mo. Supreme Court reverses rejection of $2.3B Clean Line project

Source: Jeffrey Tomich, E&E News reporter • Posted: Thursday, July 19, 2018

Missouri’s highest court reversed a Public Service Commission order last year denying Clean Line Energy Partners a permit to build a $2.3 billion high-voltage transmission line across the state.

In an 11-page order, the Missouri Supreme Court unanimously ruled that the PSC erred by basing its rejection of the project on an appellate court opinion regarding an unrelated transmission project in northeast Missouri.

Yesterday’s decision represents the latest twist in Clean Line Energy Partners’ efforts to get regulatory approval for the 780-mile Grain Belt Express transmission line.

The project, originally proposed in 2010, would deliver wind energy from remote southwest Kansas to Indiana to serve more populous areas in the East. The line would have 4,000 megawatts of capacity, with 3,500 MW sent to the PJM Interconnection grid and 500 MW delivered to eastern Missouri, part of the Midcontinent Independent System Operator’s grid.

The PSC has twice rejected the company’s application to build the line, once in 2015 and again last summer.

A majority of the PSC agreed that the Grain Belt Express project had satisfied criteria for approval, but the commission denied the company because the developer didn’t have up-to-date approvals from each of the eight counties to be crossed (Energywire, Aug. 17, 2017).

But the Supreme Court said consent by the counties wasn’t necessary for the Clean Line project, which was applied for under a different subsection of Missouri statute than a separate Ameren Transmission Co. line.

“The commission erred in holding that prior county consent was necessary before it could approve Grain Belt’s application,” yesterday’s order said.

The court remanded the case to the PSC, which Clean Line expects will grant approval of the line based on the statements of state regulators.

Michael Skelly, Clean Line’s chief executive, said the company will seek expedited approval from the PSC and hopes it will do so based on evidence and testimony previously filed.

“We think the commission can take the existing record and issue an order,” he said.

Paul Agathan, an attorney for the Missouri Landowners Alliance, a group of property owners who live in or near the pathway of the Grain Belt Express and oppose the project, said it remains to be seen whether the commission will seek updated information on the merits of the case.

“The question is whether, after two years, there’s been any change of circumstance, and that’s something we’ll be exploring,” Agathan said.

The Missouri Joint Municipal Electric Utility Commission, which supplies electricity to three dozen cities, said the wind energy delivered via the Grain Belt Express line would save electric consumers in the cities at least $10 million annually.

Duncan Kincheloe, president of the Missouri Public Utility Alliance, the power agency’s parent organization, said he looks forward to seeing the Clean Line project move forward in the wake of the court decision.

“Municipal utilities are encouraged by this decision, especially coupled with the earlier findings of the Public Service Commission recognizing the substantial benefit this project brings to electric customers in the state,” Kincheloe said in a statement.

Renewable energy advocates, too, welcomed the court’s ruling.

“While this case has lingered in limbo for years as our neighbor states like Iowa and Illinois have passed us by, this puts the Show-Me State back on the map for wind energy,” said James Owen, executive director of Renew Missouri.

Clean Line was represented in its appeal by former Gov. Jay Nixon, a two-term Democrat who left office in January 2017.

Nixon argued the case first before a panel of three judges at the Missouri Court of Appeals for the Eastern District, which in February ruled in Clean Line’s favor (Energywire, Feb. 28). But instead of remanding the case to the PSC, judges transferred the case to the Supreme Court, citing the importance of the case.

The former governor made the same case to the Supreme Court in April, arguing that Clean Line applied for approval of the project under a provision in statute that doesn’t require the company to first get consent from the affected counties.

Skelly said the court’s decision was important not just for Clean Line but for other large infrastructure projects that could otherwise be vetoed by a couple of county officials.

Clean Line has acknowledged that a different statute requires assents from counties before transmission lines can be built over local roads. But the law “does not purport to give counties the authority to stand in the shoes of the [PSC] in determining whether a proposed utility project is in the public interest of the state,” the order said.

Even if Clean Line ultimately gets PSC approval, the company faces more legal and regulatory questions in neighboring Illinois.

That’s because the Illinois Appellate Court rejected the certificate approved by the Illinois Commerce Commission on the grounds that the company wasn’t a public utility when it applied for the certificate under a statute reserved for utilities (Energywire, March 15).

The order upheld a lower court ruling that the ICC wrongly approved the project under an expedited state review process that’s intended for public utilities. Because Clean Line didn’t own assets in Illinois and had only an option to purchase land when it applied to the ICC, the company is categorized as a nonpublic utility.

Skelly said Clean Line will likely wait until it has approval from the Missouri PSC before applying for a new certificate in Illinois. But he said the court order made it clear what the company needs to do to achieve public utility status.

“That makes it 100 percent clear what we need to do to refile in Illinois,” he said.

The Clean Line CEO also dismissed concerns that the clock is running out on the Grain Belt Express project because of the looming expiration of the federal production tax credit.

The company is likely still facing several years of work to obtain needed regulatory approvals for the Grain Belt Express, he said.

But Skelly said there’s growing need for new transmission in the Midwest, and wind costs are continuing to fall, driven by technology improvements.

While the tax credit was once vital to the economics of wind energy, and the Grain Belt Express, that’s not the case anymore, Skelly said, predicting that wind power in Kansas is expected to cost 2.5 cents per kilowatt-hour in the mid-2020s.

“While the project has been held up, the technological advances have sort of marched on,” he said.