Concerned Citizens & Property Owners v. Illinois Commerce Comm'n , 2018 IL App (5th) 150551 ( 2018 )

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Date: 2018.12.05
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Concerned Citizens & Property Owners v. Illinois Commerce Comm’n,
2018 IL App (5th) 150551
Appellate Court CONCERNED CITIZENS AND PROPERTY OWNERS; ILLINOIS
Caption AGRICULTURAL ASSOCIATION, a/k/a Illinois Farm Bureau;
MARY ELLEN ZOTOS; and LANDOWNERS ALLIANCE OF
CENTRAL ILLINOIS, NFP, Petitioners, v. THE ILLINOIS
COMMERCE COMMISSION; GRAIN BELT EXPRESS CLEAN
LINE LLC; BROWN BRANCH LLC; JAR BRANCH LLC;
INFINITY WIND POWER; CITIZENS UTILITY BOARD;
ILLINOIS CENTRAL RAILROAD COMPANY; ROCKIES
EXPRESS PIPELINE LLC; REX ENCORE FARMS LLC; REX
ENCORE PROPERTIES LLC; WIND ON THE WIRES;
ENVIRONMENTAL LAW AND POLICY CENTER; BNSF
RAILWAY COMPANY; LOCAL UNIONS 51 AND 702
INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS, AFL-CIO; and BUILDING OWNERS AND
MANAGERS ASSOCIATION OF CHICAGO, Respondents.
District & No. Fifth District
Docket Nos. 5-15-0551 through 5-15-0554
Rule 23 order filed March 13, 2018
Motion to
publish granted April 17, 2018
Opinion filed April 17, 2018
Decision Under Petition for review of order of Illinois Commerce Commission, No.
Review 15-0277.
Judgment Reversed and remanded.
Counsel on Edward D. McNamara Jr. and Joseph H. O’Brien, of McNamara &
Appeal Evans, of Springfield, for petitioner Concerned Citizens and Property
Owners.
Charles Y. Davis and Claire A. Manning, of Brown Hay & Stephens
LLP, of Springfield, for petitioner Illinois Agricultural Association.
Jonathan L. Phillips and William M. Shay, of Shay Phillips, Ltd., of
Peoria, and Elizabeth E. Nohren and Dustin L. Probst, of Dove &
Dove, of Shelbyville, for petitioner Landowners Alliance of Central
Illinois, NFP.
Paul G. Neilan, of Law Offices of Paul G. Neilan, P.C., of Highland
Park, for other petitioner.
Thomas R. Stanton, James E. Weging, and Douglas P. Harvath, all of
Chicago, for respondent Illinois Commerce Commission.
Diana Z. Bowman and Owen E. MacBride, of Schiff Hardin LLP, of
Chicago, for respondent Grain Belt Express Clean Line LLC.
James A. Hansen, of Schmiedeskamp, Robertson, Neu & Mitchell
LLP, of Quincy, for respondents Brown Branch LLC and JAR Branch
LLC.
David D. Streicker and Paula S. Kim, of Polsinelli PC, of Chicago, for
respondent Infinity Wind Power.
E. Glenn Rippie, of Rooney, Rippie & Ratnaswamy LLP, of Chicago,
for respondents Rex Encore Farms LLC, Rex Encore Properties LLC,
and Rockies Express Pipeline LLC.
Sean R. Brady, of Wheaton, for respondent Wind on the Wires.
Justin M. Vickers, of Chicago, for respondent Environmental Law and
Policy Center.
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Patrick K. Shinners and Rochelle G. Skolnick, of Schuchat, Cook &
Werner, of St. Louis, Missouri, for respondent International
Brotherhood of Electrical Workers, AFL-CIO.
Michael A. Munson, of Chicago, for respondent Building Owners and
Managers Association of Chicago.
No brief filed for other respondents.
Panel PRESIDING JUSTICE BARBERIS delivered the judgment of the
court, with opinion.
Justices Goldenhersh and Chapman concurred in the judgment and
opinion.
OPINION
¶1 Concerned citizens, landowners, and intervening parties (appellants) sought judicial
review of a decision by the Illinois Commerce Commission (Commission) granting a
certificate of public convenience and necessity to Grain Belt Express Clean Line LLC
(GBX), an Indiana company formed to construct and manage a high voltage electric service
transmission line to connect wind generation facilities. For reasons that follow, we reverse.
¶2 BACKGROUND
¶3 On April 10, 2015, GBX filed an application with the Commission seeking a certificate
of public convenience and necessity for the construction of a new high voltage transmission
line under the expedited procedure set forth in section 8-406.1 of the Public Utilities Act
(Act) (220 ILCS 5/8-406.1 (West 2012)). 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.
¶4 According to the application filed with the Commission, GBX planned to construct and
manage a high voltage direct current (DC) electric transmission line that would run from an
alternating current (AC)-to-DC current converter station in Ford County, Kansas, across
Kansas and Missouri. The transmission line would then continue as a double AC line for
approximately 5.2 miles from the converter station to an interconnection with the PJM
Interconnection LLC (PJM) transmission network at the Sullivan/Breed substation of
American Electric Power Company in Indiana and a DC-to-AC converter station and
delivery point into the Midcontinent Independent Systems Operator (MISO) transmission
network in northeast Missouri. From western Kansas and through Missouri, the transmission
line would enter Illinois west of New Canton in Pike County, Illinois. The Illinois portion of
the transmission line would travel 202.7 miles in a general southeasterly direction through
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Pike, Scott, Greene, Macoupin, Montgomery, Christian, Shelby, Cumberland, and Clark
Counties to a DC-to-AC converter station to be located near West Union, Clark County,
Illinois.
¶5 GBX included in its April 10, 2015, application that 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,’ ” but it did not state that it was a public utility. GBX
had an option to purchase property that would serve as the site to place equipment for the
proposed project. The purpose of the project was to transport clean, low-cost electricity from
wind generation plants in western Kansas to electricity markets in Illinois and other PJM and
MISO states. The proposed project was to “deliver approximately 2.6 million
megawatt-hours (‘MWh’) of clean energy per year into the MISO market, and up to 18
million MWh of clean energy per year into the PJM market.” The project was expected to
produce additional wind generation accessible to the Illinois market to meet demands for
clean energy and electricity.
¶6 On May 18, 2015, the appellants, a group of various landowners and residents owning
property in the geographical area subject to this proceeding, filed a motion to dismiss, which
questioned the Commission’s authority to grant a certificate of public convenience and
necessity to a nonpublic utility. The appellants’ motion was based on the premise that only a
public utility may file an application for a certificate of public convenience and necessity
under section 8-406.1 of the Act. Subsequently, several additional motions to dismiss were
filed by the following intervening parties: Illinois Agricultural Association, Landowners
Alliance of Central Illinois, NFP, Rex Encore, and Rockies Express Pipeline, LLC. Shortly
thereafter, the staff of the Commission filed a response to the appellants’ motion agreeing
that the motion should be granted.
¶7 On June 12, 2015, the assigned administrative law judge submitted a memorandum to the
Commission recommending that the motions be granted in favor of the appellants. On June
16, 2015, however, the Commission voted 3-2 to deny the motions. The Commission entered
its final order in favor of GBX on November 12, 2015. The majority opinion stated:
“The question of whether an entity which is not yet a public utility may file for a
[certificate of public convenience and necessity (CPCN)] for a new high voltage
electric transmission line under Section 8-406.1 has been extensively addressed, in
the motions to dismiss and in this Order. The Commission notes that the process is
available only for CPCNs for the purpose of constructing a new high voltage electric
service line and related facilities. It notes the numerous additional requirements for
applicants under Section 8-406.1. These requirements include significant pre-filing
activities, public notice provisions, substantial, specifically identified engineering
data, and fees, which are not required under Section 8-406. The Commission finds
that these considerable prerequisites are consistent with the expedited schedule under
Section 8-406.1.” Grain Belt Express Clean Line LLC, Ill. Comm. Comm’n No.
15-0277, at 39 (Order-Final Nov. 12, 2015).
As such, the Commission determined that the legislature did not intend to preclude nonpublic
utility applicants from utilizing section 8-406.1 of the Act to request a certificate of public
convenience and necessity to construct and operate a new high voltage transmission line in
Illinois. GBX was granted a certificate of public convenience and necessity for the
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construction of two transmission lines pursuant to sections 8-503 and 8-406.1 of the Act. See
220 ILCS 5/8-503, 8-406.1 (West 2012).
¶8 In response, the two Commission members who voted to grant the appellants’ motion
filed a dissent in opposition to the majority opinion, stating the following:
“Alternative paths exist for the development of transmission lines, including high
voltage lines transporting electricity produced by renewable sources, through Section
8-406 or through a properly filed application under Section 8-406.1. Section 8-406.1
requires applicants to be public utilities. The Commission must enforce the rules set
by the General Assembly and cannot change those rules where it possesses no
authority to do so.
The majority opinion erroneously concludes that Section 8-406.1 does not require
an applicant to be a public utility. The majority opinion arrives at this conclusion
without the required analysis to support it. This conclusion leads the majority opinion
to then omit a required finding. The majority opinion fails to appropriately apply
Illinois statute, ignores Supreme Court and other precedent, and is inconsistent with
Commission practice without explanation. GBX’s Application should have been
dismissed without prejudice. We respectfully dissent.” Grain Belt Express Clean Line
LLC, Ill. Comm. Comm’n No. 15-0277, at 8 (Dissenting Opinion Nov. 13, 2015)
(Comm’r McCabe, joined by Comm’r Del Valle).
Shortly thereafter, the appellants filed multiple applications for rehearing. Following the
Commission’s denial of all applications, the appellants filed a timely petition for review.
¶9 ANALYSIS
¶ 10 On appeal, the appellants argue that the Commission’s decision to grant GBX’s
application for a certificate of public convenience and necessity was erroneous and should be
set aside because GBX was not a public utility at the time of the application, a necessary
prerequisite under the Act. 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 under the expedited process set forth in section 8-406.1 of
the Act.
¶ 11 In response, GBX and the Commission argue that “the definition of ‘public utility’
clearly applies to new entrants.” To read otherwise, the Commission argues, would have the
effect that “no new entity c[ould] ever become a public utility of any type” where no such
entity would be able to satisfy the statutory definition under section 3-105 of the Act (220
ILCS 5/3-105 (West 2012)). In particular, GBX also asserts that no basis exists to conclude
that the legislature intended to preclude new entrants from requesting and obtaining a
certificate under section 8-406.1, given that new entrants can obtain status as a public utility
during the application process under section 8-406 of the Act (id. § 8-406). Moreover, GBX
asserts that the determinative question for the Commission, and now this court, is not
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. We disagree.
¶ 12 Appellate review of final decisions of the Commission, an administrative agency,
involves the exercise of special statutory jurisdiction and is constrained by the provisions of
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the Act. People ex rel. Madigan v. Illinois Commerce Comm’n, 231 Ill. 2d 370, 387 (2008).
The Act provides that a “court shall reverse a Commission *** order or decision, in whole or
in part, if it finds,” inter alia, that the “findings of the Commission are not supported by
substantial evidence based on the entire record of evidence,” the “order or decision is without
the jurisdiction of the Commission,” or the “order or decision is in violation of the State or
federal constitution or laws.” 220 ILCS 5/10-201(e)(iv) (West 2012). We review such
questions de novo. See Illinois Landowners Alliance, NFP v. Illinois Commerce Comm’n,
2017 IL 121302, ¶ 29.
¶ 13 Pursuant to section 8-406.1, the section utilized by GBX in the instant case, “[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).” 220 ILCS 5/8-406.1(a) (West 2012). Section 8-406.1 sets forth an “expedited
review process of an application,” which requires that the application include additional
information and the public utility meet additional requirements. Id. After a notice and
hearing, the Commission shall “grant a certificate of public convenience and necessity filed
in accordance with the requirements of this Section if, based upon the application filed with
the Commission and the evidentiary record,” the Commission
“finds the Project will promote the public convenience and necessity and that all of
the following criteria are satisfied:
(1) That the Project is necessary to provide adequate, reliable, and
efficient service to the public utility’s customers and is the least-cost means of
satisfying the service needs of the public utility’s customers or that the Project
will promote the development of an effectively competitive electricity market
that operates efficiently, is equitable to all customers, and is the least cost
means of satisfying those objectives.
(2) That the public utility is capable of efficiently managing and
supervising the construction process and has taken sufficient action to ensure
adequate and efficient construction and supervision of the construction.
(3) That the public utility is capable of financing the proposed
construction without significant adverse financial consequences for the utility
or its customers.” Id. § 8-406.1(f)(1)-(3).
¶ 14 We first address the parties’ arguments regarding the definition of “public utility” as set
forth in the Act. Section 3-105 of the Act defines a “public utility” as follows:
“[E]very corporation, company, limited liability company, association, joint stock
company or association, firm, partnership or individual, their lessees, trustees, or
receivers appointed by any court whatsoever that owns, controls, operates or
manages, within this State, directly or indirectly, for public use, any plant, equipment
or property used or to be used for or in connection with, or owns or controls any
franchise, license, permit or right to engage in ***.” Id. § 3-105(a).
The Commission argues that “the definition of a public utility clearly includes the owner of
plant, equipment and property which is intended for future public use but has not yet been
built (‘to be used’). There is no restriction in either statutory provision to preexisting public
utilities, i.e., utilities that already own other utility assets.” Thus, the Commission argues that
“to be used,” as written by the legislature, is a term that looks to future usage.
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¶ 15 We note, however, that the definition of “public utility” was recently clarified by the
Illinois Supreme Court in Illinois Landowners Alliance, NFP, 2017 IL 121302. In Illinois
Landowners Alliance, NFP, our supreme court determined that when the Commission grants
a company a certificate of public convenience and necessity under section 8-406 of the Act,
the “central question remains: Does it even qualify as a public utility under Illinois law so as
to be eligible for such a certificate under section 8-406 of the Public Utilities Act (220 ILCS
5/8-406 (West 2012))?” 2017 IL 121302, ¶ 36. In particular, Rock Island Clean Line, LLC
(Rock Island), submitted an application to the Commission for the issuance of a certificate of
public convenience and necessity under sections 8-406(a) and (b) of the Act (220 ILCS
5/8-406(a), (b) (West 2012)) to permit it to operate as a transmission public utility in Illinois
to construct, operate, and maintain an electric transmission line. Illinois Landowners
Alliance, NFP, 2017 IL 121302, ¶ 18. Rock Island also requested that the Commission enter
an order authorizing and directing construction of the proposed transmission line under
section 8-503 of the Act (220 ILCS 5/8-503 (West 2012)). Illinois Landowners Alliance,
NFP, 2017 IL 121302, ¶ 18. Similar to the case at issue, the parties in opposition to Rock
Island’s application filed motions to dismiss asserting that Rock Island “did not meet the
threshold criteria necessary to qualify as a public utility within the meaning of section 3-105
of the Act” and, as a result, Rock Island was ineligible for relief by the Commission. Id. ¶ 20.
¶ 16 Our supreme court determined that Rock Island, a new entrant, was required to present
ownership of utility infrastructure assets to qualify as a public utility, as defined in section
3-105, in order to obtain a certificate of public convenience and necessity under section
8-406 of the Act. Id. ¶ 48. In order to qualify as a public utility, our supreme court concluded
that “the company must also own, control, operate, or manage, within this State, directly or
indirectly, a plant, equipment, or property used or to be used for or in connection with (or
must own or control any franchise, license, permit, or right to engage in) the production,
transmission, sale, etc. of one of the specified commodities or services.” (Emphasis in
original.) Id. ¶ 39. The supreme court noted that the statute is phrased in the present tense
because it requires that a company must own, control, operate, or manage, within the state, a
plant, equipment, property, franchise, etc. at the time it seeks certification by the
Commission. Id. ¶¶ 40, 45.
¶ 17 The supreme court reasoned that when the General Assembly repealed the prior language
in section 3-105 of the Act, which defined a public utility as “every corporation *** that now
or hereafter *** [m]ay own, control, operate or manage” specific plants, equipment, or
property (Ill. Rev. Stat. 1965, ch. 1112/3, ¶ 10.3), it intended, as the court must presume, to
speak only to ownership in the present tense when it eliminated the words “ ‘now or hereafter
*** may.’ ” Illinois Landowners Alliance, NFP, 2017 IL 121302, ¶ 42. As a result, the court
determined that courts must read the statute as “evincing an intention by the legislature to
limit the definition of ‘public utility’ to situations where the subject entity meets the
ownership test at the present time.” Id.
¶ 18 The supreme court noted, however, that the Act does not prohibit new entrants from
commencing development as a purely private project before applying to become a public
utility in Illinois:
“Once their projects are further underway and they have obtained the ownership,
management, or control of utility-related property or equipment required to qualify as
public utilities, they may then seek certification to operate as public utilities if they
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wish to conduct their business in a way that would make them subject to the Public
Utilities Act’s regulatory framework.” Id. ¶ 48.
As a result, applicants may seek recognition as a public utility while, at the same time,
applying for a certificate of public convenience and necessity under section 8-406(a) as long
as they have obtained the ownership, management, or control of utility-related property or
equipment at the time of the application. Id. ¶¶ 48, 51.
¶ 19 Here, GBX similarly fails to establish that it was a public utility at the time it filed its
application with the Commission. 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.
Accordingly, GBX did not meet the definition of a “public utility” under section 3-105 of the
Act at the time it filed its application with the Commission.
¶ 20 Nevertheless, GBX argues that when a company applies for a certificate of public
convenience and necessity under section 8-406.1 of the Act (220 ILCS 5/8-406.1 (West
2012)), as opposed to section 8-406 of the Act (id. § 8-406), the determinative question is,
instead, whether the applicant is able to demonstrate that its proposed electric transmission
line satisfies the substantive criteria for issuance of a certificate under the expedited process.
This substantive criterion includes “the applicant’s capability to manage and supervise
construction and to finance the construction without significant adverse financial
consequences.” See id. § 8-406.1(f)(2), (3). For further support, GBX argues that the
legislature’s only intent underlying section 8-406.1 was to provide an “alternative, more
expeditious process for obtaining a Certificate,” as compared to the no-deadline process
under section 8-406. As such, GBX contends that there is no preexisting need to own other
utility assets to be approved for a certificate under section 8-406.1 of the Act. We disagree.
¶ 21 In 2010 the legislature enacted the expedited procedure set forth in section 8-406.1 to
provide a process by which “[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).” (Emphasis added.) Id.
§ 8-406.1(a). The 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.” Illinois Landowners
Alliance, NFP, 2017 IL 121302, ¶ 31 (citing Gulf Transport Co. v. Illinois Commerce
Comm’n, 402 Ill. 11, 19 (1948), and Bartonville Bus Line v. Eagle Motor Coach Line, 326 Ill.
200, 202 (1927)); see also Fountain Water District v. Illinois Commerce Comm’n, 291 Ill.
App. 3d 696, 701 (1997).
¶ 22 Our primary goal in statutory construction is to ascertain and effectuate the intent of the
legislature. Midkiff v. Gingrich, 355 Ill. App. 3d 857, 861 (2005). The best evidence of
legislative intent is the words and statute itself, which should be given their plain and
ordinary meaning. Id. We need only go beyond the words of the statute itself if we cannot
discern the intent of the legislature from the statutory language. Id. at 862. In construing a
statute, we must consider the problem it was enacted to remedy. See Hyatt Corp. v. Sweet,
230 Ill. App. 3d 423, 430 (1992). We must evaluate the statute as a whole, interpreting each
provision in connection with every other provision. Paris v. Feder, 179 Ill. 2d 173, 177
(1997). “Of all the principles of statutory construction, few are more basic than that a court
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may not rewrite a statute to make it consistent with the court’s own idea of orderliness and
public policy.” Illinois Landowners Alliance, NFP, 2017 IL 121302, ¶ 50.
¶ 23 In applying these principles to section 8-406.1, we are not persuaded that the legislature
intended for the expedited review process to be an available avenue for nonpublic utility
entities. The Commission’s conclusion that any nonpublic utility may apply to be a public
utility under section 8-406.1 ignores the express language set out in section 8-406.1(a).
Significantly, section 8-406.1 of the Act clearly and unambiguously reads that “[a] public
utility may apply for a certificate of public convenience and necessity pursuant to this
Section.” (Emphasis added.) 220 ILCS 5/8-406.1(a) (West 2012). As such, our interpretation
of section 8-406.1 requires that the applicant must meet the definition of a public utility. In
order to obtain status as a public utility, the applicant must meet the ownership test at the
time of application, the same prerequisite in section 8-406, and the Commission must make
this finding before issuance of a certificate. Here, GBX holds an option to purchase property
that would serve as the site to place equipment for the proposed project. “[H]aving an option
to buy something is not the same as owning or even controlling it,” and an option agreement
“does not involve the transfer [of] property or an interest therein.” Illinois Landowners
Alliance, NFP, 2017 IL 121302, ¶ 40.
¶ 24 Moreover, we cannot reason that the legislature intended to give unlimited discretion
through an expedited review process to nonpublic entities, which would ultimately provide
the Commission with no jurisdiction to enforce their projects. As a result, the Commission
must find that an entity is a public utility at the time of application in order to utilize the
expedited review process in section 8-406.1 of the Act. Unable to meet the requisite
ownership test, GBX is not a public utility under section 3-105 of the Act, but rather an entity
with a purely private project that does not require the Commission’s authority to proceed.
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.
¶ 25 CONCLUSION
¶ 26 The order of the Commission is hereby reversed and remanded where it granted a
nonpublic utility company the authority to construct and manage an electrical transmission
line project under the Act’s expedited review process without the requisite finding that the
applicant was a public utility.
¶ 27 Reversed and remanded.
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