Madison - St. Clair Record

Saturday, September 21, 2019

Illinois Commerce Commission didn't have authority to grant company's certificate, court rules

By Tomas Kassahun | Mar 27, 2018

MOUNT VERNON — The Fifth District Appellate Court on March 13 found the Illinois Commerce Commission can't give a certificate of public convenience and necessity to an Indiana company formed to construct and manage a high-voltage electric service transmission line to connect wind-generation facilities.

Grain Belt Express Clean Line LLC (GBX) had filed an application April 10, 2015, with the Illinois Commerce Commission seeking a certificate of public convenience and necessity to build a high-voltage transmission line, according to background information in the ruling. In its application, GBX said it "will own, control, operate, and manage within the State of Illinois, for public use, facilities for the transmission of electricity and therefore will be a 'public utility.”

“GBX sought a certificate of public convenience and necessity to conduct a transmission public utility business to construct, operate, and maintain a 202.7-mile-long electric transmission line to traverse Central Illinois from Pike County to a converter station in Clark County,” according to the ruling. 

On May 18, 2015, a group of landowners and residents owning property in the area filed a motion to dismiss, questioning the commission's authority to grant a certificate of public convenience and necessity to a nonpublic utility, according to the court. 

The appellants said the commission's decision to approve GBX's application should be reversed because GBX was not a public utility at the time of the application.

“Without status as a public utility, the appellants assert that GBX was ineligible to receive, and the Commission had no authority to grant, a certificate of public convenience and necessity,” the court wrote.

The court said GBX must have obtained the ownership, management, or control of utility-related property or equipment at the time of the application to be considered as a public utility.

“It is undisputed that GBX does not presently, or at the time it filed its disputed application with the Commission, own, control, manage, or operate any plant, equipment, or property in Illinois used or to be used for or in connection with the production, transmission, sale, etc. of one of the specified commodities or services,” the court said.

GBX cited section 8-406.1 of the Illinois Public Utilities Act, saying it’s not a question of whether “GBX was a public utility at the time of the application, but whether the applicant is able to demonstrate that its proposed electric transmission line satisfies the substantive criteria for issuance of a certificate.”

The substantive criterion, as noted by the court, includes "the applicant's capability to manage and supervise construction and to finance the construction without significant adverse financial consequences.”

GBX also argued that section 8-406.1 of the act intends “to provide an ‘alternative, more expeditious process for obtaining a Certificate.’"

According to that section, as cited by the court, "[a] public utility may apply for a certificate of public convenience and necessity pursuant to this Section for the construction of any new high voltage electric service line and related facilities (Project)." 

The Public Utilities Act aims to "ensure efficient public utility service at reasonable rates by compelling established public utilities occupying a given field to provide adequate service while at the same time protecting them from ruinous competition," according to the court.

Emphasizing the “public utility” phrase in the act, the court said this law doesn’t apply to GBX because it hasn’t qualified as a public utility.

“Without finding that GBX was a public utility, we hold that the Commission was without authority to grant GBX a certificate of public convenience and necessity under section 8-406.1 of the Act,” the court said.

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Illinois Fifth District Appellate Court