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Fight brewing over proposed power line  

Credit:  By Stephen Elliott | qconline.com Nov. 24, 2012 ~~

ERIE – There’s a fight brewing in rural Illinois over a proposed 500-mile overhead transmission line that backers say will create thousands of jobs and billions of investment dollars in renewable energy projects.

Rock Island Clean Line LLC, a subsidiary of Clean Line Energy Partners, is seeking “public utility” status from the Illinois Commerce Commission in order to proceed.

The company envisions a $2 billion project delivering 3,500 megawatts of wind energy produced in Iowa, Nebraska, South Dakota and Minnesota to communities in Illinois and states to the east.

The governors of Illinois and Iowa, governments and politicians, labor unions, contractors and suppliers have offered support for the project. Good-paying jobs, clean home-grown renewable energy and possible utility rate reductions are some of the reasons Illinois Gov. Pat Quinn listed for his support of the project earlier this year.

The money, in the form of $7,000 per year per mile of transmission line, also will go to counties along the route. That could mean hundreds of thousands of dollars annually to counties such as Bureau and LaSalle.

Henry County could receive $126,000 annually, Rock Island County about $60,000 and Whiteside County more than $50,000, based on the length in each county of the preferred or alternate routes for the transmission line. In all, RICL could affect about 500 landowners along the six Illinois counties it would run through.

Farmers are wary

But landowners, primarily farmers who will be asked to negotiate passage of the line through their properties, say they are wary of the project for a number of reasons.

Rural Erie farmer Bill Rutherford is among the landowners from counties throughout Illinois who have been meeting in recent months, discussing what they think is a bad project for them.

“We don’t like it,” Mr. Rutherford said. “If it’s going to go through, it ought to go through established corridors.”

For instance, Mr. Rutherford said moving the line along right-of-way would prevent the loss of valuable farmland or anti-flooding measures.

He cites an area along Rock River where trees are used to protect against spring flooding.

“We’re very much concerned that the removal of those trees would make an already vulnerable levee much more susceptible to the breach of structure and flooding,” Mr. Rutherford said.

Mr. Rutherford’s neighbor, Curt Jacobs, said the towers that would carry the transmission lines would interfere with operations in a way that is “a big deal.”

“We use airplanes for aerial application of chemicals, fungicides, insecticides, to help protect and improve our yields. With this power line going through, we won’t be able to use aerial applications anymore,” he said.

Mr. Rutherford said the towers also would impede irrigation systems and drag-line manure injections of liquid manure into fields.

Eminent domain an issue

Another concern among landowners is the potential use of eminent domain by RICL if the company is given ICC approval.

Farmer Jim Ufkin, of Geneseo, said the real argument involves property rights.

“They (RICL) don’t seem very willing to change routes, follow property lines or road right-of-ways,” Mr. Ufkin said. “They’re (RICL) adamant they can go through our fields pretty much willy-nilly.”

RICL spokesman Hans Detweiler said his company is “absolutely committed to as much voluntary land acquisition as we can.”

If eminent domain is used, Mr. Detweiler said it would be “as a last resort.”

“That’s why there is a robust compensation package out on the table,” he said. “It’s a very strong offer by historical standards and showing good faith on our part of voluntary land acquisition.”

He said, assuming a land value of $8,000 per acre and a 175-foot-wide easement, the landowner would receive $88,320 for an easement with two mono-poles or $112,320 for an easement with two lattice towers.

“With major infrastructure projects going long distances, condemnation authority is sometimes needed to resolve issues that cannot otherwise be resolved, such as cleaning up unclear title, such as when estates are in probate, or due to absentee landowners that cannot be located,” Mr. Detweiler said.

Equal to or more than market value

Mr. Detweiler said compensation would be equal or more than 100 percent of the fair market value of the easement area of the land.

But, Mr. Ufkin, doesn’t see it that way. He said the price of farmland continues to increase. He said farming practices, particularly with irrigation systems, will be impacted depending on where the poles are placed.

“How do you put a value on this thing?” he said. “Now all of a sudden you want to plant a power pole in my field. There’s no way in the world you can pay for my inconvenience.”

The Illinois Farm Bureau is concerned.

“We have formally intervened in the case,” said IFB senior director of business and regulatory affairs Rae Payne. “If the project is approved and landowners are approached for easements, they need to know certain things in the contracts to protect their rights.

“One of the major arguments, we think, is this project should be along existing right-of-way as much as possible or along section lines and property lines.”

Rock Island County, which initially expressed support for the project, backed away because of feedback from rural landowners. “Our board has decided not to do that,” said Rock Island County Board chairman Jim Bohnsack.

Henry County Board chairman Tim Wells said he supports the project.

Whiteside County also has endorsed RICL as have other Illinois counties where the 121-miles of Illinois transmission line would likely run.

It could take up to a year, or even longer, for the Illinois Commerce Commission to act on RICL’s request to become a utility and proceed with the line.

With ICC approval, RICL could begin work in 2014 and continue over the next few years.

Who is Clean Line?

The name of Rock Island Clean Line comes from the Rock Island Railroad, according to the Rock Island Clean Line website.

“Just as the Rock Island Railroad allowed farmers to move their goods to market, the Rock Island Clean Line will deliver clean, renewable energy to the communities that need it, representing the new farm-to-market model for the 21st century.”

In RICL’s petition filed with the Illinois Commerce Commission on Oct. 10, it lists the majority owner of Clean Line as ZAM Ventures, which is the principal investment vehicle for ZBI Ventures.

ZBI Ventures is a subsidiary of Ziff Brothers Investments, LLC. Ziff Brothers is a multi-billion dollar investment firm headquartered in Manhattan, according to Velvet Energy Ltd., a oil and gas exploration and production company where the Ziff brothers have an investment.

Additional equity owners of Clean Line include Michael Zilkha, of Houston, Texas.

The Zilkha family has a proven track record of building successful companies in the energy industry, according to Clean Line’s application with the ICC.

According to an April 2003 article in the Houston Business Journal, Michael Zilkha and his father, Selim, turned a startup, “oil and gas exploration company into the largest holder of oil and gas acreage in the shallow waters of the Gulf of Mexico with the most successful drill rate in the industry.

“They sold Houston-based Zilkha Energy to Sonat in 1998 for $1 billion.”

According to the website for Zilkha Biomass Energy, the father-and-son team of Selim and Michael Zilkha pioneered new technologies in the energy industry, earning them the reputation as “technology wildcatters.”

“They turned a small wind energy company into one of the most respected in the wind industry by building elegant and community-integrated wind farms throughout the country,” according to the Zilkha Biomass Energy website.

The Zilkhas sold Zilkha Renewable Energy to Goldman Sachs, which the Zilkhas said was a sign that investment banking firms were moving away from petroleum-based energy to renewables.

Source:  By Stephen Elliott | qconline.com Nov. 24, 2012

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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