MOUNT VERNON - Illinois commerce commissioners approved 207 miles of windmill power line for Grain Belt Express with no plan beyond a promise of high demand and a hint of bailout, according to an Aug. 8 decision of Fifth District appellate judges.
They reversed an order of commissioners who certified the public convenience and necessity of the line last year.
“Grain Belt Express must prove that it has the capacity to finance the project prior to the commission granting any certificate of public convenience and necessity,” Justice Randy Moore wrote.
He called it a condition precedent and added, “This simply is a classic case of putting the cart before the horse.”
Former Grain Belt Express owners sought a certificate in 2015 for the Illinois portion of an 800 mile line from a potential wind farm in Kansas to a substation in Indiana.
The line would run through Pike, Scott, Greene, Macoupin, Montgomery, Christian, Shelby, Cumberland, and Clark counties.
Commissioners granted a certificate and owners of land along the line appealed.
The owners claimed commissioners could grant certificates only to public utilities and Fifth District judges agreed in 2018.
Moore wrote in his current decision that rather than change its plan, Grain Belt Express set out to have legislation enacted.
He wrote that the Climate and Equitable Jobs Act of 2021 authorized a “qualifying direct current applicant” to file for a certificate without owning, controlling, operating, or managing any plant, equipment or property in Illinois.
Grain Belt Express and its owner Invenergy met the qualification and applied for a certificate.
They stated the line would connect to Southwest Power Pool, Midcontinent Independent System Operator, Associated Electric Cooperative, and PJM Interconnection.
They stated they would not finance the project through rate payers but would base the financing on significant demand for renewable energy.
They claimed when the project reached an advanced stage Grain Belt Express would enter into specific arrangements with investors and lenders.
Commissioners agreed and found Grain Belt Express could finance construction without significant adverse consequences for the utility or customers.
They found that evidence of the need for the project and the interest of developers supported a conclusion that Grain Belt Express could enter into sufficient contracts.
They adopted a “revised financing condition” to prohibit installation on easement property until Grain Belt Express has obtained commitments for sufficient funds.
They found the condition would prevent adverse consequences, specifically that Grain Belt Express would be unable to complete construction. And they found that if Grain Belt Express couldn’t satisfy the condition, its investors would be the only parties experiencing financial consequences.
Their certificate granted authority to commence the project within five years.
Land owners and Illinois Farm Bureau appealed and prevailed.
Justice Moore found Grain Belt Express simply asked the commission to speculate and trust that many unknown variables would fall into place.
Moore wrote that it didn’t claim it had funding capability and claimed instead that it would obtain financing once it had executed customer contracts and supply agreements.
He wrote that it anticipated financing 65% to 80% of the project through debt funded largely through Department of Energy grants or commercial banks.
He wrote that a plan to obtain financing after entering into agreements with unknown parties and unknown terms didn’t satisfy the capability criteria in the law.
He wrote that at the time of the commission’s decision, Grain Belt Express had no customers or commitments and had not been awarded any Department of Energy funds.
He found it even more concerning that the wind farm in Kansas does not exist.
He wrote that Grain Belt Express allegedly abandoned a sister project in Northern Illinois despite its contentions before the commission about necessity and market demand.
He wrote that Grain Belt Express claimed Invenergy has billions of dollars in assets and would fund the project until financing is secured.
“However, Grain Belt Express failed to introduce any evidence, not even a balance sheet, to establish the financial health of either Grain Belt Express or Invenergy,” he wrote.
He found a witness confirmed that Invenergy had a balance sheet and statements of profit and loss but didn’t submit them to the commission.
“Instead, Grain Belt Express asked the commission to simply take its word and trust that it had the funding and financial stability it alleges," he wrote.
“However, Grain Belt Express has the burden of proof on that matter.”
He found Grain Belt Express argued that its witnesses were available for cross examination, implying the court should construe that against the petitioners.
He wrote that there is no presumption against a defendant for failure to call witnesses when a plaintiff has not made a case.
He found Grain Belt Express sought to benefit from a certificate as a private company.
“That is not an excuse to protect or hide its or Invenergy’s balance sheets which would indisputably prove that what Grain Belt Express is contending is true,” he wrote.
He found commissioners apparently recognized the speculative nature of the project when they adopted the revised financing condition.
He wrote that land owners argued to commissioners that the condition allowed Grain Belt Express to place a cloud on titles to their land.
He found commissioners found the cloud was purely speculative.
“However, we do not find it to be any more speculative than Grain Belt Express’s prospects of obtaining commitments from the Department of Energy or entering into contracts with customers prior to completion of the project,” he wrote.
Invenergy’s website features Jim Murphy of Chicago as president and Michael Polsky as founder and chief executive.