The current market design in ERCOT primarily places the responsibility for system costs on ERCOT customers. This docket has revealed that the Southern Cross DC tie will result in additional costs to ERCOT, which include extraordinary costs that arise specifically from the Southern Cross DC tie, the Garland line, and the Garland or Oncor substations. Because the customers of exported power are not ERCOT customers, under the current market design and rules, they will not bear any responsibility for the extraordinary costs specific to the Southern Cross DC tie, Garland line, and Garland or Oncor substations that they impose on the ERCOT system. Southern Cross believes that those customers—and therefore Southern Cross—should get a free ride as to these extraordinary costs. The Commission disagrees and determines that the public interest demands that ERCOT ratepayers should not bear any of the costs associated with the Garland line, the Oncor substation, the Garland substation, or the Southern Cross DC tie that are properly borne by others.
The costs that a user of the ERCOT system causes cannot be determined simply by focusing on the costs of the facilities on the last forty miles of a multi-thousand-mile network. There is little doubt that additional facilities will be required in ERCOT because of the electricity flowing over the Southern Cross DC tie. Southern Cross believes that the costs of those facilities should be borne by customers in ERCOT, not the out-of-ERCOT customers that cause those costs.  And Southern Cross opposed even an investigation into whether revisions to the current ERCOT cost-allocation method were needed. Southern Cross attempts to justify this free-ride position based on theoretical benefits that this project will provide to ERCOT.

The Commission agrees, however, that no party met the burden of proof to prove what benefits, if any, Texas ratepayers will enjoy as a result of the Garland line and the Southern Cross DC tie and concurs with the ALJs that any benefits are questionable.  This is one of the issues that will be evaluated by ERCOT and if subsequent investigations show any benefits, then any such benefits could be reflected in the new market-design rules. The record in this case does not justify a free ride for these questionable benefits.  Texans are in the process of paying billions of dollars for the newly constructed CREZ transmission lines, and for substantial other facilities, that are integral to transmitting electricity to the Garland line and the Southern Cross DC tie. As proposed by Southern Cross Transmission, the Garland line would simply interconnect with these CREZ lines and reap benefits without paying its fair share of costs.

Further, Southern Cross argues that the DC tie will not cause a substantial increase in ancillary services needed in ERCOT, and that no change in the current manner that ancillary costs are assigned is necessary.  Southern Cross argues that the DC tie should get a free ride on these extraordinary costs also. The Commission agrees that this is a highly technical question and has requested ERCOT to evaluate this matter. The Commission also agrees, however, with ERCOT and other parties that additional ancillary services will likely be required to support the operation of the DC tie, and at certain levels, that requirement may be significant.  And, as with the other extraordinary costs discussed in this Order, it is appropriate that the cost causer be responsible for the costs, not for ERCOT customers to bear the costs of others. The Commission does note that Southern Cross softened its position some by agreeing that it could and would provide reactive-power service through the DC tie.

One benefit offered by Southern Cross is the lowering of the price of electricity in ERCOT during high-load periods.  However, Southern Cross Transmission's analysis does not appropriately account for the effect on the ERCOT energy market, which sends market signals through scarcity pricing when electricity resources are becoming scarce. Distortions to ERCOT's market signals could prevent the energy-only market from appropriately responding to shortages, leading to inadequate resources in this market. This risk to ERCOT's market structure and the grid's reliability must be assessed and addressed through recommended changes.

“Anytime you have legal clouds pending, you’re not going to spend a lot of time with that uncertainty,” said Lawlor. “We’ll see how the decisions play out before we put a lot of people to work building the project.”

The ruling, Clean Line director of development Mark Lawlor said last week, would discourage renewable energy development in Illinois.
“It is clearly a setback, and a signal not only to our investors, but to other developers, on the tremendous amount of legal barriers in Illinois,” said Lawlor. “It goes beyond Rock Island. It goes beyond Grain Belt.”

Officials with Clean Line Energy Partners are complaining about Missouri and its set of laws, as if the company didn’t know what it was getting into when it proposed stringing a high-voltage power line across the state.

...the problem is Clean Line has not yet done enough to allay concerns of key decision-makers — in this case, county commissioners who by law have a big say in this matter.

Our preference is for Clean Line to continue to negotiate with the counties where it has met opposition. Short of that, both opponents and Clean Line should expect to be governed by the web of laws and regulations — both state and federal — that govern these matters.

CHAIRMAN HALL: Yes, I have a few. I want to start with your alternative argument that
the Commission go through the Tartan analysis, determine that Grain Belt has met each of those factors, but then withhold issuing the certificate. Would that be an appealable decision?
MR. ZOBRIST:  I think it would be because if you construe Neighbors United to say that you cannot issue a CCN, you're making these other findings and you're simply withholding it at that point. To be honest, I really haven't thought through that. It may be -- it depends on what your language is. I think if you say that this part is final, you view it as appealable, that that might be something for us to take a look at because it may not be an appealable order until either --
CHAIRMAN HALL: I think that would be your worst-case scenario. Then you're sitting in limbo here and you can't take the order up. MR. ZOBRIST: Well, I'm being the optimist, Chairman. I'm assuming we get favorable  factual findings on the public convenience and necessity. We'd use those to go to the county commissions and say the Public Service Commission has weighed in and says the public is not going to be harmed and you should issue your county assents and then we'll be back. Now, if you -- if you deny it, if you dismiss it, then I think --
CHAIRMAN HALL: Well, that's --
MR. ZOBRIST: Pardon me. Go ahead.
CHAIRMAN HALL: That, to be perfectly blunt, seems a little naive to me that this commission's decision on public interest is going to sway the county commissions, and so --
MR. ZOBRIST: Like I said --
CHAIRMAN HALL: I think the reality is that that would be almost your worst nightmare because then the case just sits in limbo here and you can't take it up on appeal.
MR. ZOBRIST: Well, let me put it this way. The nightmare is if you just dismiss it out of hand because then the project's dead. The
problem -- 
CHAIRMAN HALL: I would say that's better than this because at least then -- oh, okay.   I'm sorry. I'm with you now. Keep going.

May 12, 2017
Today is a day to celebrate!! It is a historic day for property rights! 
Governor Branstad signed a bill Into law forbidding merchant high voltage transmission lines such as RICL from having condemnation power to take private property by eminent domain.  Click here to read
Senate File 516:  an Act relating to state and local finances by making appropriations providing for legal and regulatory responsibilities, concerning taxation, and providing for other properly related matters, and including effective date and retroactive applicability provisions.  This bill passed the Iowa House on April 21, 55-39 and the Iowa Senate on April 21, 27-13.
Read the language related to merchant transmission lines beginning on page 18 of the bill. 

TITLE XIV ROADS AND WATERWAYS Chapter 229 Provisions Relating to All Roads
Section 229.100. Improvements along public roads--location--control.
229.100. No person or persons, association, companies or corporations shall erect poles for the suspension of electric light, or power wires, or lay and maintain pipes, conductors, mains and conduits for any purpose whatever, through, on, under or across the public roads or highways of any county of this state, without first having obtained the assent of the county commission of such county therefor; and no poles shall be erected or such pipes, conductors, mains and conduits be laid or maintained, except under such reasonable rules and regulations as may be prescribed and promulgated by the county highway engineer, with the approval of the county commission.

“We will review the order in detail to determine next steps for the project,” adds Skelly. “We are currently assessing all existing authorities available to move the Grain Belt Express project forward, including but not limited to legal appeals.”

Clean Line executives said Wednesday that they were weighing their options for the Grain Belt Express power line, though they acknowledged that the “legal and regulatory conundrum” could add many months or years to the project if they decide to keep trying.

"So, the Grain Belt Project will deliver enough power for over a million homes, and will do so at costs that are extremely competitive with wind energy that is clean and renewable.”

“We absolutely want to do the project,” said Mark Lawlor, development director for Grain Belt Express. But he added: “Unfortunately, the message that we’re getting from Missouri is that investments of these kind might be better spent in other places.”

Lawlor said the four commissioners’ belief that the project was worthwhile but not approvable under state law “makes for an interesting argument” if Clean Line decides to instead seek federal permission to proceed.

Clean Line director of development Mark Lawlor said another hearing would be sought, but that the company also was exploring legal options.

He added that Clean Line would push ahead with the project, despite the setback in Missouri.

“This is a Missouri problem, it’s not just a Grain Belt problem. This says any transmission line looking to build in Missouri cannot set foot on the commission’s doorstep until there’s permission from counties for a road permit,” said Lawlor.

“It’s too important to our country, and to our energy future, to just walk away,” said Lawlor. “This project is just as valuable today as when we started and probably more so.”

The project’s developers and other supporters harshly criticized Wednesday’s PSC ruling.

“It’s going to apply to future infrastructure projects — not just ours, but anyone who wants to come to Missouri and build transmission lines or pipelines, they’re gonna pay attention to this,” said Mark Lawlor, vice president at Clean Line. “It sends a bad signal to the marketplace.”

He argued that Grain Belt Express and projects of statewide significance should be decided by the PSC.

“It’s certainly not what the legislature intended,” Lawlor said. “It’s certainly not how the commission has worked in its 113-year history, but that’s somehow where we found ourselves today.”

Lawlor said Clean Line would need time to determine its next course of action.

A lawyer representing clean-energy interests said that another appeal is a near-certainty. Mark Lawlor, Clean Line’s vice president for development, wasn’t quite as definite.

“I think it’s sort of placed the burden on Clean Line to go ask the courts to sort this out,” he said. “Because of this legal quagmire, the project can’t move forward. It’s a broken system. It’s a problem for Missouri.”

Lawlor said there are a few options that he and his staff are evaluating. One is to essentially take the case back to the state appeals court – the same body that took the position that in part has led to this “quagmire,” as Lawlor called it.

There is actually a chance that the same court that ruled against Clean Line’s interests could see things differently, according to Renew Missouri’s James Owen.

“There are aspects of this that haven’t been presented before,” he said. “We can point out things that haven’t been thought about.”

The legislature is another avenue, according to Lawlor. He suggested they might want to study the pertinent law and ask themselves, “Is this what we meant to do here? Is this what we want, to have county commissions decide which infrastructure moves forward in the state?

“It would be in legislature’s interests to sort this out.”

There is also a federal avenue through which Lawlor said private developers can partner with the Department of Energy to develop infrastructure.

But Lawlor claims that the issue goes beyond Clean Line’s desire to build a high-voltage transmission line across Missouri. The new administration of Gov. Eric Greitens “has made a point of saying, ‘Missouri is open for business, we want investment in our state.’

“This decision runs counter to that.” As it now stands, he predicted that, “Other investors are going to look at Missouri and this will enter into their decision as to whether this is a good place to invest money.”

“It’s impossible if you’re building a multi-state transmission line to get agreements from all 30 counties that you might cross,” said Michael Skelly, the president of Houston-based Clean Line, which is planning about $9 billion of power lines across the Great Plains, Midwest and the Southwest. 

Clean Line has at least three options it is considering, according to Skelly. It can appeal the decision, seek a change of state law or bypass the state by asking the U.S. Energy Department to approve it.

“If none of those three work, we’re toast,” Skelly said in an interview Wednesday.

Clean Line’s other options, said spokesperson Sarah Bray, include asking the PSC for a rehearing, working with the state’s legislature to revise pertinent laws or seeking U.S. Energy Department approval under Section 1222 of the 2005 Energy Policy Act. The latter would authorize the department to take part in “designing, developing, constructing, operating, maintaining or owning” new transmission.

“The project is certainly not dead,” Bray said.

Bray told RTO Insider that Clean Line was “encouraged by the PSC’s determination that the project is in the public interest and will benefit the State of Missouri.”

“The PSC’s decision to deny approval of the project, despite the clear public benefits, sends a clear message that investors contemplating new infrastructure projects should not come to Missouri. Today’s ruling is inconsistent with good government and sound public policy and it is our hope that moving forward Missouri will work to remove barriers to building new critical infrastructure projects.”

Instead, the commission said it was bound by a court opinion rendered earlier this year on the Mark Twain Transmission Project. That case involved the issue of assent — or permission from counties to use right-of-ways to construct the project.

"...the decision on the Grain Belt Express today shows our new Governor’s administration isn’t serious about economic development and household budgets as promised. Just more talk with no action.”

Burns said some of the negative feedback is based on misinformation about the project. “There’s a lot of confusion and a lot of things being said that aren’t accurate,” Burns said.

“Burying lines causes problems,” Burns said. “If a line fails and it’s underground, it can’t be located and fixed immediately. That’s what happened recently on the Outer Banks.
“The environmental disturbance is greater to trench and bury a line than to run it overhead. And it’s ten-times more costly to do it underground.”

“I’ve heard people are concerned about land use and whether they will be able to use their properties,” Burns said. “People will still be able to work under the power lines, although obviously there would be a limit on building underneath them. The land is still useable.”
Burns said property owners would be compensated for the easements through their land. “We’re going to be acquiring easements from the landowners and compensate them for it. They will retain the rights to certain activities,” Burns said.
He said property-owners shouldn’t be worried about the threat of eminent domain. “Our approach is we negotiate fair market value for anything that has to be acquired,” he explained. “We use eminent domain less than three percent of the time.”

Burns said he is confident the Independence Energy Connection will save customers money not just in the greater metropolitan areas south of here, but locally. “The driver is to give customers in this area access to lower costs,” he said. He said it is too early to estimate what the cost savings might be, or whether local, independent energy companies will pass the savings on to customers. “They may have other initiatives that will affect your bill,” Burns said.

Despite the many negative comments exchanged from person to person around the packed community center, Transource officials said there was also positive feedback.
“We found in this area, people understand the greater need for infrastructure,” said Abby Foster, community affairs representative for Transource Energy. “Everyone here benefits from something being on someone’s property.”
Foster said the positive comments she heard came from residents who see the financial benefits of easements on their properties as well as the benefits of costs savings on energy bills.
She said some residents don’t like the exact location of the proposed line across their properties but are willing to have it shifted to a different location on their properties.
“There’s a lot that has shifted because of public input,” Foster said.

“We’ll look at a route that strikes the best balance,” Burns said, mentioning recreational activities, historic value and land use concerns. “You rarely come up with one that’s gonna satisfy all those things. Ultimately, it will be at the state level to decide where it goes.”

CHAIRMAN HALL: Yes, I have a few. I want to start with your alternative argument that
the Commission go through the Tartan analysis, determine that Grain Belt has met each of those factors, but then withhold issuing the certificate. Would that be an appealable decision?
MR. ZOBRIST:  I think it would be because if you construe Neighbors United to say that you cannot issue a CCN, you're making these other findings and you're simply withholding it at that point. To be honest, I really haven't thought through that. It may be -- it depends on what your language is. I think if you say that this part is final, you view it as appealable, that that might be something for us to take a look at because it may not be an appealable order until either --
CHAIRMAN HALL: I think that would be your worst-case scenario. Then you're sitting in limbo here and you can't take the order up. MR. ZOBRIST: Well, I'm being the optimist, Chairman. I'm assuming we get favorable  factual findings on the public convenience and necessity. We'd use those to go to the county commissions and say the Public Service Commission has weighed in and says the public is not going to be harmed and you should issue your county assents and then we'll be back.  Now, if you -- if you deny it, if you dismiss it, then I think --
CHAIRMAN HALL: Well, that's --
MR. ZOBRIST: Pardon me. Go ahead.
CHAIRMAN HALL: That, to be perfectly blunt, seems a little naive to me that this commission's decision on public interest is going to sway the county commissions, and so --
MR. ZOBRIST: Like I said --
CHAIRMAN HALL: I think the reality is that that would be almost your worst nightmare because then the case just sits in limbo here and you can't take it up on appeal.
MR. ZOBRIST: Well, let me put it this way. The nightmare is if you just dismiss it out of hand because then the project's dead. The
problem -- 
CHAIRMAN HALL: I would say that's better than this because at least then -- oh, okay.   I'm sorry. I'm with you now. Keep going.

I mean, I completely understand Mr. Zobrist's argument. I'm baffled by yours.

We've also raised the possibility of a county veto being in violation of federal law, and this is based solely on my general knowledge, but it seems that local interference with interstate commerce and electricity would violate the Commerce Clause of the Constitution. The Federal Power Act gives FERC authority over interstate transmission lines. The state still has authority to regulate the siting of interstate transmission lines, but they're otherwise preempted.