A Missouri landowners group is challenging state regulators’ conclusion that a transmission developer meets the definition of a public utility.
The appeal by the Missouri Landowners Association hinges on whether cash and easements should satisfy a requirement that companies own property in the state. It’s the latest legal hurdle for the long-embattled transmission project.
If built, the Grain Belt Express would move as much as 4,000 megawatts of wind power from western Kansas across Missouri and Illinois to the Indiana border. The project has the potential to relieve a transmission bottleneck that has long constrained the development of Kansas’ abundant wind resources.
The developers caught a major regulatory break in March when the Missouri Public Service Commission ruled it met the state’s criteria for a public utility and awarded it a necessary certificate to develop the long-distance transmission line.
According to Missouri law, only public utilities may be granted the certificates. The law defines an electrical corporation as an entity that owns or operates an “electric plant,” defined as all real estate and personal property “used or to be used for or in connection with or to facilitate the … transmission … of electricity.”
State regulators reasoned that the words “to be used for or in connection with” mean the electric plant may be a future or intended plant. In this case, they determined that Grain Belt’s cash on hand and easement agreements count as real estate and personal property to meet the public utility definition.
To be considered an electrical corporation and a public utility, Missouri courts have said companies must be devoted to a public use. Commissioners wrote that Grain Belt meets that threshold because it will offer transmission services to wholesale customers in Missouri through an open access transmission tariff.
“The Commission concludes that Grain Belt’s Project will serve the public use, and Grain Belt qualifies as a public utility,” it wrote on March 20.
Attorney Paul Agathen, who represents hundreds of Missouri landowners along the proposed route, disagrees.
“The law says they must own, control or manage property which would be used for the purpose of a transmission line,” Agathen said. “My argument is that easements don’t count. They don’t give them control or the right to manage real estate.”
He also argues that because Clean Line negotiated deals with individual utilities along the route but does not offer “indiscriminate service” on a widespread basis, it in fact is not a public utility. He cited a 1918 Missouri Supreme Court ruling that he said states that only entities subject to all provisions of the state’s Public Service Commission Act qualify as public utilities.
“Our argument is that they are not subject to the PSC provisions dealing with how rates are set. If they are not subject to that statute, they are not subject to all statutes in the Public Service Commission Act. And according to the Missouri Supreme Court decision, they are not a public utility.”
Missouri regulators twice rejected the company’s applications for a certificate, but then approved it following a directive from the Missouri Supreme Court.
A similar project by the company was scuttled in 2017 after an Illinois court ruled that developers did not qualify as a utility in that state. A change in ownership, however, could change the projects’ prospects in the region. Clean Line is in the process of being sold to Invenergy, a renewable developer based in Illinois.
Invenergy spokesperson Beth Conley said Missouri regulators said it meets the property requirements, and the company is “confident in that decision.”
Clean Line is a Houston-based entity that at one point was pursuing three long-distance transmission lines aimed at moving wind energy from Kansas, Iowa and Oklahoma to the eastern U.S.
The Rock Island Clean Line was to run from northwest Iowa to central Illinois, where it would connect with transmission that could move the power further east. The company ceased work on that project after the Illinois Supreme Court in 2017 affirmed an Illinois Appellate Court ruling that the company didn’t qualify as a public utility, and therefore could not legally be granted a certificate of convenience and necessity.
A few months later, Clean Line sold its Plains and Eastern Clean Line Oklahoma LLC and all of its in-state assets to NextEra Energy Resources. The Plains and Eastern would have gathered electricity from the Oklahoma and Texas panhandles and shipped it across Arkansas, Tennessee and beyond. Under intense pressure in Arkansas, it ended efforts to build that part of the line.
On June 12, Missouri regulators decided to allow Invenergy to purchase the assets of the Grain Belt Express. Conley said the sale should be completed following a regulatory approval in Kansas, which she expects later this year.
In 2017, the Illinois Appellate Court overturned a decision by the Illinois Commerce Commission to grant the certificate it needed to proceed with construction there. The Illinois court ruled that Clean Line is not a public utility because it owns no property in Illinois. It sent the matter back to the commission where nothing has transpired since.
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