TABLE OF CONTENTS
Appearances ....................................................................................................................... 2
Procedural History ............................................................................................................. 4
The Issues ....................................................................................................................... 4
Findings of Fact .................................................................................................................. 6
Background................................................................................................................. 6
Certificate
of convenience and necessity............................................................ 8
Need...................................................................................................................... 8
Qualifications...................................................................................................... 21
Financial
ability .................................................................................................. 22
Economic
feasibility.......................................................................................... 23
Public
interest..................................................................................................... 24
County
assents........................................................................................................... 31
Conditions.................................................................................................................... 31
Conclusions of Law............................................................................................................ 31
Decision ....................................................................................................................... 36
Ordered
Paragraphs........................................................................................................... 40
BEFORE THE
PUBLIC SERVICE COMMISSION
OF THE STATE OF
MISSOURI
In
the Matter of the Application of Ameren Transmission )
Company
of Illinois for Other Relief or, in the Alternative, )
a Certificate of Public Convenience and Necessity )
Authorizing
it to Construct, Install, Own, Operate, )
Maintain
and Otherwise Control and Manage a ) File
No. EA-2015-0146
345,000-volt
Electric Transmission Line from Palmyra, )
Missouri,
to the Iowa Border and Associated Substation )
Near Kirksville, Missouri.
REPORT AND ORDER
APPEARANCES
James B. Lowery, Michael R. Tripp, Esq., Smith Lewis,
LLP, P.O. Box 918, Columbia, Missouri 65205-0918, for Ameren Transmission
Company of Illinois.
Jeffrey K. Rosencrants,
Edward Fitzhenry, Eric Dearmont, Esq., Ameren Services
Company, One Ameren Plaza, 1901 Chouteau Avenue, P.O. Box 66149 (MC 1310), St. Louis, Missouri, 63166-6149, for Ameren
Transmission Company of Illinois.
James
Owen, Esq., Public
Counsel, Office of the Public Counsel, 200 Madison Street, Suite 650, Post
Office Box 2230, Jefferson City, Missouri 65102, for the Office of the
Public Counsel and the public.
Nathan Williams, Mark Johnson, Jamie Myers,
Jacob Western, Hampton Williams, Esq., Missouri Public Service Commission, Post Office Box 360, Jefferson
City, Missouri 65102, for the Staff of the Missouri Public Service Commission.
Sherrie
A. Hall, Emily R. Perez, Esq., Hammond and Shinners, P.C., 7730 Carondelet
Avenue, Suite 200, St. Louis, Missouri 63105, for International Brotherhood of
Electrical Workers Local Union 1439.
Edward
F. Downey, Esq., Bryan
Cave, LLP, 221 Bolivar Street, Suite 101, Jefferson City, Missouri 65101, for
Missouri Industrial Energy Consumers.
Diana
M. Vuylsteke, Esq., Bryan Cave, LLP, 211 N. Broadway, Suite
3600, St. Louis, Missouri 63102, for Missouri Industrial Energy Consumers.
David
C. Linton, Esq., 314
Romaine Spring View, Fenton, Missouri 63026, for United for Missouri, Inc.
Jeffrey
L. Small, Karl Zobrist, Joshua Harden, Jacqueline M. Whipple, Esq., Dentons US LLP,
4520 Main Street, Suite 1100, Kansas City, Missouri 64111, for Midcontinent
Independent System Operator, Inc.
REGULATORY
LAW JUDGE: Ronald
D. Pridgin, Deputy Chief
Procedural History
On May 29, 2015, Ameren Transmission
Company of Illinois (“ATXI”) applied to the Missouri Public Service Commission (“Commission”)
for a certificate of convenience and necessity to build a transmission line and
associated facilities in the counties of Schulyer,
Adair, Knox, Shelby, and Marion, Missouri.
In the alternative, ATXI asks the Commission to dismiss the application
on the grounds that ATXI is not a public utility.
The Commission received timely interventions requests
from: Neighbors United Against Ameren’s
Power Line (“Neighbors United”), United for Missouri (“UFM”), Midcontinent
Independent System Operator (“MISO”), and IBEW Local Union 1439 (“Local 1439”). The Commission received no objection to those
applications. Thus, the Commission
granted intervention to those applicants.
The Commission convened an evidentiary hearing on January 25-29, 2016,
and received post-hearing briefs on March 4 and 18, 2016.
The
Issues
On January 15, 2016,
the parties filed an Issues List. The
issues the parties present to the Commission for resolution are:
1. Does the Commission possess authority to approve
ATXI’s application?
2. Does the
evidence establish that the Mark Twain transmission line project, as described
in ATXI’s application in this docket, and for which ATXI is seeking a
certificate of convenience and necessity (“CCN”), is “necessary or convenient
for the public service” within the meaning of that phrase in section 393.170, RSMo?
3. Do §§
393.170 and 229.100, RSMo, require that before the
Commission can lawfully issue the requested CCN the evidence must show the
Commission that where the proposed Mark Twain transmission line project will
cross public roads and highways in that county ATXI has received the consent of
each county to cross them? If so, does the evidence establish that ATXI has
made that showing?
4. If the
Commission decides to grant the CCN, what conditions, if any, should the
Commission impose?
The Commission, having
considered all of the competent and substantial evidence upon the whole record,
makes the following findings of fact and conclusions of law. The positions and arguments of all of the
parties have been considered by the Commission in making this decision. Failure
to specifically address a piece of evidence, position or argument of any party
does not indicate that the Commission has failed to consider relevant evidence. Rather, it indicates that the omitted
material was not dispositive of this decision.
Findings of Fact
Background
1. ATXI (formerly named Ameren
Illinois Transmission Company) is an lllinois company
dedicated to electric transmission infrastructure investment. ATXI presently is
constructing approximately 375 miles of 345-kV transmission line that forms the
Illinois Rivers Project, a line that runs from the Indiana border, across Illinois into Missouri.
2. ATXI admits that it is engaged in the construction,
ownership, and operation of interstate transmission lines that transmit
electricity for the public use, and a part of such lines ATXI plans to
construct, own, and operate will be located in Missouri.
3. ATXI has dubbed the transmission line for which it seeks a certificate of
convenience and necessity the Mark Twain Project (“Mark Twain”). It would consist of approximately 95 miles of
new 345-kV electric transmission line, a 2.2-mile 161-kV connector line, a
substation and related facilities. The proposed 345-kV transmission line will
be routed from the new Maywood Switching Station near Palmyra, Missouri,
through Marion, Shelby, Knox and Adair counties to the new Zachary Substation,
located near Kirksville, Missouri, and then continuing north through Adair and
Schuyler counties to the Iowa border. The 345-kV transmission line will
primarily consist of single-shaft, self-supported steel poles, 90-130 feet in
height, within a 150-foot right of way. Also, a new 2.2-mile 161-kV line will
connect the Zachary Substation with the existing Adair Substation. These
facilities will be constructed in a manner consistent with industry-wide
standards. ATXI's expected total cost of
Mark Twain along the route described above is approximately $224 million.
4. The breakdown
of the estimated $224 million cost is: two 345 kV lines at a cost of $192.5 million;
the Zachary substation, at a cost of $27 million; a connector line between the
Zachary and Adair substations, at a cost of $2.6 million; and modifications at
the Adair substation, at a cost of $1.9 million.
5. The Midcontinent Independent System
Operation, Inc. (“MISO”) is an independent, not-for-profit, and FERC-approved
Regional Transmission Organization responsible for regional transmission
planning, reliability assurance and managing competitive electricity markets
across all or parts of 15 states, including Missouri, and the Canadian province
of Manitoba. MISO's regional area of
operations ("footprint") stretches from the Ohio-Indiana line in the
east to eastern Montana in the west, and south to New Orleans.
6. Mark Twain stems from a study conducted
by MISO. In 2008, MISO began an
extensive study of the regional electric transmission grid to identify
transmission needs and develop a planning process to construct transmission
projects to meet those needs. In 2011, MISO identified a "multi-value
portfolio" ("MVP") of 17 transmission projects that would
increase the overall reliability and efficiency of the regional transmission
grid, meet public policy demands for renewable energy, and provide economic
benefits in excess of the portfolio costs. Mark Twain consists of the Missouri portion
of two of those MVP projects, MVP #7 and nearly all of #8 included in the MISO
Transmission Expansion Plan in accordance with MISO's FERC-approved tariff.
7. The costs to construct and operate MVP
projects such as Mark Twain are reflected in transmission charges to
load-serving entities in MISO's footprint, which in turn reflect charges they collect in their retail revenue requirements.
Missouri represents just under 8% of the load in MISO. This means that less than 8% of the
transmission charges arising from the Project will be paid by Ameren Missouri
and other wholesale load-serving entities in Missouri. The remainder will be paid for by other
load-serving entities across the MISO footprint.
8. MISO’s stakeholders include state
regulatory commissions, consumer advocates, transmission owners, independent
power producers, and environmental intervenors.
The vast differences in the interests of those stakeholders ensure that
MISO’s decision to build transmission is not biased towards simply building more
transmission.
Certificate of convenience and
necessity criteria
Need
Renewable energy
9. The 17 projects that comprise the MVP
portfolio were determined by MISO and the MISO Board of Directors to be
necessary to facilitate the delivery of renewable energy, resolve numerous
reliability issues, reduce transmission line losses and provide economic and
efficiency benefits to customers throughout the MISO footprint. The portfolio
is a “no regrets” portfolio, meaning it creates significant benefits in excess
of costs across a wide variety of scenarios.
10. The benefits of Mark Twain are proven by
multiple cost-benefit analyses. One such
analysis was conducted by MISO as part of the MVP portfolio approval process,
in which MISO evaluated the economics of the overall MVP portfolio under four scenarios. Those scenarios included
two different “business as usual” cases (one with lower load growth and one
using historical load growth), one scenario
that assumed the continuation of current energy policies with the addition of
some carbon limitations, and one scenario with even greater carbon-related
regulation combined with the enactment of various new state and federal energy policies.
11. The MVP portfolio is a group of
transmission projects distributed across the MISO footprint that enables the
reliable delivery of the requirements of state policies regarding renewable
energy (oftentimes referred to as RPS or RES mandates).
12. Mark Twain will help Missouri meet its
renewable energy obligations, even if no additional wind generation is
developed in the relevant portions of Missouri.
13. Mark
Twain will also provide an additional means by which electricity may be
delivered into and from Missouri, particularly from areas rich in wind energy. This delivery potentially increases available
wind energy resources for compliance with Missouri’s renewable energy standard
and with the EPA’s clean power plan (“CPP”).
It will also encourage the development of wind as an electricity
resource in Missouri by increasing the availability of transmission capacity in
areas where that resource is available.
14. Presently,
The Empire District Electric Company, Kansas City Power & Light Company and
KCP&L Greater Missouri Operations Company have sufficient sources of
electricity and renewable energy attributes in place to exceed the maximum
fifteen percent (15%) requirement, but Ameren Missouri does not.
15. Ameren
Missouri anticipates that its current resources will not allow it to meet its
renewable energy standards requirements after 2018, but it plans to acquire 400
MW of wind capacity, starting in 2019 and have it in place by 2026.
16. Mark
Twain could help enable Ameren Missouri to comply with its renewable energy
standards requirements and with the EPA’s CPP.
17. There is significant potential for wind
development in north central and northeast Missouri, including in the Adair
Wind Zone.
18. The northeast Missouri Energy Zone has
the opportunity for significant generation development, more specifically
renewable generation in the form of wind generation. This region has topography and wind speeds
favorable to the development of wind generation especially with current wind
turbine technology.
Reliability
19. For northeast Missouri, including Kirksville, the project
would maintain voltage levels if certain North American Electric Reliability
Corporation (“NERC”) Category C contingencies were to happen.
20. The addition of the 345 kV lines and step
down transformer at West Adair is especially effective in resolving 161 kV line
overloads on the lines out of West Adair and preventing the loss of the
generation at West Adair during certain NERC Category C events. This project will mitigate two bulk electric
system (BES) NERC Category B thermal constraints and five NERC Category C
constraints. It will also relieve three non-BES NERC Category B and two NERC
Category C constraints.
21. Mark Twain is an integral part of a
portfolio of MVPs that was approved by the MISO Board of Directors in December
2011 as necessary to facilitate the delivery of renewable energy, resolve
numerous reliability issues, reduce transmission line losses, and provide
economic and efficiency benefits to customers within the MISO footprint.
22. In 2008, MISO began the study process by
undertaking a Regional Generation Outlet Study to investigate how best to
fulfill various Renewable Portfolio Standards ("RPS") requirements
reliably and efficiently by accessing wind resources located across the MISO
footprint.
23. During the study process, MISO and the
stakeholders developed a robust business case for the MVPs which demonstrated
that not only will the MVP Portfolio reliably enable RPS requirements to be
met, but it will do so in a manner where its economic benefits exceed its
costs. While the study focused upon the states' RPS requirements, the MVP
Portfolio has widespread benefits beyond the delivery of wind and other
renewable energy. It will enhance system reliability and efficiency under a
variety of different generation build outs. It will also open markets to
competition, reducing congestion and spreading the benefits of low cost generation
across the MISO footprint. The projects in the 20 II MVP Portfolio
were evaluated against MVP criteria and their ability to reliably enable the
renewable energy mandates of the MISO states.
24. For a project to be an MVP, it must meet
at least one of the following criteria:
1) it must be developed through
the transmission expansion planning process to enable the system to deliver
energy reliably and economically in support of documented energy policy or
mandates; 2) it must give multiple types of economic value across multiple
pricing zones with a total MVP benefit to cost ratio of 1.0 or higher; 3) it
must address a least one transmission issue associated with a projected
violation of a NERC or Regional Entity standard, and at least one economic-based
transmission issue that gives economic value across multiple pricing zones.
25. Specifically, Mark Twain will increase reliability in the
northeast portion of Missouri, including Kirksville.
26. Ameren Services determined that the northeastern
Missouri area, including Kirksville, would be exposed to low voltages for
certain contingency conditions at peak load levels. The existing transmission
system has three 161-kV lines that supply Ameren Missouri and rural electric
cooperative customers located in northeastern Missouri (including Adair,
Kirksville, Newark, Novelty, Emerson, etc.). Ameren Services determined that if
certain NERC Category C events occurred during peak load periods, then low
voltage conditions would occur in northeastern Missouri that could result in
the loss of customer load in the area. The addition of the Mark Twain Project
will provide a new 345-kV source to the northeastern Missouri area that will
maintain adequate system voltages for the identified NERC Category C contingencies
and prevent loss of customer loads.
Transmission
line losses
27. The 17 projects that comprise the MVP
portfolio were determined by MISO and the MISO Board of Directors to be
necessary to facilitate the delivery of renewable energy, resolve numerous
reliability issues, reduce transmission line losses and provide economic and
efficiency benefits to customers throughout the MISO footprint. The portfolio
is a “no regrets” portfolio, meaning it creates significant benefits in excess
of costs across a wide variety of scenarios.
Economic
benefits
28. ATXI also performed an economic analysis of Mark Twain. The analysis found that Mark Twain would
enable additional wind generation to support achievement of Missouri renewable
requirements, thus demonstrating the need for.
It also found that Mark Twain’s development would be expected to decrease wholesale
prices for electric power and decrease the costs of producing electricity to
meet customer loads. Reductions in
production costs, in turn, would lead to reductions in the charges for electric
power to retail customers in Missouri that far outweigh the impact of
transmission charges to Missouri load-serving entities (primarily Ameren
Missouri) that would arise from Mark Twain.
Thus, these reductions in payments for electric energy would far
outweigh the ultimate impact of Mark Twain
on Missouri customers' retail electric rates.
29. In addition, ATXI’s analysis reflects
supplies of wind power that would be enabled by Mark Twain and that can support the achievement of state renewable energy
targets. Finally, Mark Twain would also reduce emissions of carbon dioxide
("CO”) generated throughout the MISO footprint, as well as reduce
emissions of nitrogen oxides ("NOx"), sulfur dioxide ("SO2")
and mercury from sources within Missouri. In total, these impacts would provide
substantial benefits to Missouri.
30. MISO's Triennial Review identified
benefits of $21,451,000-$66,816,000 associated with the cost of $8,303,000-$17,192,000
for the MVP portfolio. The majority of the benefits are found in reducing
congestion-driven production costs, providing for more efficient dispatch of generators
by using lowest cost generation throughout the MISO footprint. Mark Twain provides Missouri access to the region,
zero production cost of the renewable energy, and takes advantage of the
efficiencies of participation in the multi-state energy trading construct.
31. The MISO analyses were completed first in
late 2011 when the MVP portfolio was approved, and were then updated in 2014,
as part of the triennial review required by MISO’s FERC-approved tariff. The
MISO analyses demonstrate that there exist significant MISO-wide benefits from
the entire MVP portfolio in every single scenario that was studied, with benefits
exceeding the costs throughout the MISO footprint by 1.8 to 3.0 times.
32. Also, if a key
element of the plan like Mark Twain is not built, economic benefits are lost
and alternative but less optimal reliability solutions will have to be developed.
33. With Mark Twain in place, the
transmission system can reliably and economically connect and deliver up to
1,347 MW of wind generation constructed in the Adair Wind Zone
(designated by MISO as zone Mo-C), and thus a proposed 400 MW project in Schuyler County, and significantly more wind,
can be connected and delivered from that zone.
34. Also, Mark
Twain was developed through MISO’s MVP study process. That process was designed to support the
achievement of state renewable energy requirements through infrastructure
investments that minimized costs.
Benefits in excess of costs
35. The portfolio is a “no regrets”
portfolio, meaning it creates significant benefits in excess of costs across a
wide variety of scenarios.
36. MISO’s Triennial Review identified
benefits of $21,451,000-66,816,000 associated with the cost of $8,303,000-$17,192,000
for the MVP portfolio.
37. The majority of the benefits are found in
reducing congestion-driven production costs, providing for more efficient
dispatch of generators by using lowest cost generation throughout the MISO
footprint. In all, the MVP portfolio creates benefit to cost ratios of 1.8 to
3.0 as identified under MTEP 2011 assumptions, and 2.6 to 3.9 as identified under
Triennial Review assumptions. The Missouri ratios are 2.0 to 2.9 and 2.3 to 3.3,
respectively.
38. Most of the benefits that will accrue to
Missouri are based upon reduced generation costs made possible by construction
of the MVP portfolio.
Downward impact on wholesale costs
39. Regardless of whether Missouri has a
Renewable Energy Standard, Mark Twain and the other MVP lines in the portfolio
impact the production costs across the system, resulting in lower wholesale
energy costs.
40. If Mark Twain is not in service, and if the wind is cheaper
with the project than without, then Ameren Missouri ratepayers suffer. But adding the wind that Mark Twain could
transmit would have a positive impact on Ameren Missouri ratepayers.
New
generation, including combined cycle natural gas
41. The MVP portfolio facilitates the
delivery of new generation throughout the MISO footprint, including new
combined cycle natural gas generation.
This is because one of the routing considerations used by MISO in
determining the location of the MVPs was the new transmission lines’ proximity
to natural gas pipelines.
42. MISO’s analysis balanced relative wind
capacities with distances from natural gas pipelines and interconnection with
the existing transmission infrastructure.
Access to wind zones
43. There is significant potential for wind
development in north central and northeast Missouri, including in the Adair
Wind Zone.
44. The northeast Missouri Energy Zone has
the opportunity for significant generation development, more specifically
renewable generation in the form of wind generation. This region has topography and wind speeds
favorable to the development of wind generation especially with current wind
turbine technology.
45. With Mark Twain in place, the
transmission system can reliably and economically connect and deliver up to
1,347 MW of wind generation constructed in the Adair Wind Zone
(designated by MISO as zone Mo-C), and thus a proposed 400 MW project and significantly more wind can be connected and
delivered from that zone.
46. Mark Twain, as part of the MVP portfolio,
will provide additional transfer capability for wind resources that may choose
to construct in Northeast Missouri and allow them to provide energy to states
throughout the Midwest.
47. The
Adair Wind Zone presents wind farm siting opportunities due to its topography
and wind speeds. MISO
conducted a study, evaluating, among other things, “optimal wind conditions,”
with the intent to “optimize wind generation placement.”
48. The characteristics of the Adair Wind
zone, combined with Mark Twain’s proximity to it and the ability to transmit
energy generated within the zone, create the potential
for up to 1,347 megawatts of wind generation to be developed in northeast
Missouri.
49. Another reason the additional wind
generation is expected is its low cost relative to other renewable resources.
Looking at the levelized cost of energy, and based on
current technologies, wind-generated electricity is lower cost than
solar-generated electricity. Moreover, the
Production Tax Credit, originally scheduled to expire at the end of 2016, was
extended until 2019. The credit
encourages future wind development by providing a tax credit to wind developers
for a generation project started by the end of 2019.
50. The
location of Mark Twain near the Adair Wind zone, the relatively low cost of
wind as a renewable resource, and the extension of the relevant tax credits
until 2019, all encourage the construction of wind generation, and increase the
likelihood of wind farms delivering electricity onto Mark Twain. MISO recently
added a 400 MW wind generation project into its queue, which is proposed to
connect to the completed Mark Twain project 345 kV line in Schuyler County.
Congestion
51. MISO’s analysis shows
Mark Twain will distribute economic benefits from reduced congestion and
production costs.
52. Mark
Twain “will also increase reliability in the Northeast portion of Missouri,
including the Kirksville area.” If built, Mark Twain would allow the areas it
covers in northeast Missouri to “maintain voltage levels if certain NERC
Category C contingencies were to happen under certain system conditions.”
53. Mark Twain is “critical to resolving
161-kV overloads in northeast Missouri . . . since [g]enerator
interconnection studies for projects in northeast Missouri consistently show
significant overloads on the existing 161-kV system when attempting to add new
generation.”
54. The addition of the 345 kV
lines and step down transformer at West Adair is especially effective in
resolving 161 kV line overloads on the lines out of West Adair and preventing the
loss of the generation at West Adair during certain NERC Category C events.
This project will mitigate two bulk electric system (BES) NERC Category B
thermal constraints and five NERC Category C constraints. It will also relieve three non-BES NERC Category
B and two NERC Category C constraints.
Meeting
local load needs
55. Mark Twain provides an outlet for generation in the Adair Wind Zone and from
outside Missouri to load centers, including load centers in Missouri.
56. Mark Twain is necessary to meet local
load serving needs of the system in the area.
Redundancy to enhance grid reliability
57. The new
lines “will provide reliability benefits by mitigating a number of contingent
outage events during peak and shoulder periods, where the wind generation
component is much higher.”
58. Mark Twain “is especially
effective in resolving 161 kV line overloads on the lines out of West Adair
during certain NERC Category C events.
59. The addition of Mark Twain will provide a
new 345-kV source to the northeastern Missouri area that will maintain adequate
system voltages for the identified NERC Category C contingencies and prevent
loss of customer loads.
Qualified
to provide the service
60. The
significant experience of ATXI’s
executive personnel shows that it has the qualifications needed to own,
operate, control and manage Mark Twain.
61. Maureen
A. Borkowski, BSME, is the president of ATXI and
senior vice-president of Ameren
Services Company, and has worked continuously at affiliates of Ameren
Corporation since 1981, except when she privately consulted for over four years
from 2000 to 2005, primarily with regard to activities relating to
transmission.
62. James
Jontry, BSE, MBA, PE (Missouri), is employed by
Ameren Services Company as the senior project manager who is responsible for
the planning, execution, completion and operational integration of Mark Twain.
63. David
Endorf, MSCE, PE (Missouri and Illinois), is employed
by Ameren Services Company to design transmission line projects, including Mark
Twain for Ameren affiliates.
64. Dennis
D. Kramer, BS Electrical Technology, MBA, with 35 years of experience in the
regulated electric utility industry, is employed by Ameren Services Company as
Senior Director of Transmission Policy, Planning and Stakeholder Relations, and
provides support services including engineering, construction management,
planning, finance, accounting and legal services.
65. In
addition to providing personnel who are planning, executing, completing and
carrying out the operational integration of the project, ATXI has access to
Ameren Services personnel who will operate and maintain the project.
Financial ability
66. ATXI is a subsidiary of Ameren
Corporation (“Ameren”).
67. Ameren
has investment grade credit ratings from Standard & Poor’s, Moody’s and
Fitch Ratings. Ameren’s investment grade credit ratings are supported by its
ownership of Ameren Missouri and Ameren Illinois.
68. Further,
as of June 30, 2015, Ameren had $364 million of direct borrowing capacity.
69. Simply
based on Ameren’s remaining borrowing capacity, ATXI has the ability to raise
the projected $224 million of capital needed for Mark Twain.
Economically feasible
70. Mark Twain is economically feasible because ATXI will
receive payments for the construction and operation of the project through
MISO’s Open Access Transmission Tariffs.
71. Mark Twain is economically feasible
because the project was developed through MISO’s MVP study process. That process was designed to support the
achievement of state renewable energy requirements through infrastructure
investments that minimized costs.
72. ATXI’s shareholders are willing to
finance the project, which also shows economic feasibility.
Public interest
Cost/benefit
73. The appropriately balanced overall
cost-benefit ratio for the MVP portfolio for the areas of Missouri located in
the MISO region is 2.0-2.9.
74. In 2014, a required triennial review of
the 2011 MTEP, including Mark Twain, increased the projected cost-benefit ratio
of the areas of Missouri located in the MISO region, where Mark Twain is
located, to 2.3-3.3.
Health
75. Anything that generates, transmits or
uses electricity has both an electric field and a magnetic field in the space
surrounding it.
76. These fields, generated at a power
frequency of 60 Hertz (the frequency of the proposed transmission line in this
case), are commonly referred to as EMF.
77. Because all lines, devices, appliances,
and wiring connected to the AC electric power system produce EMF at this
frequency, these fields are virtually everywhere – including at background
levels in homes in the United States.
78. And because electric fields are blocked
by most conductive objects (trees, fences, walls, the human body, etc.) and
magnetic fields are not, EMF most often refers to and is primarily concerned
with the magnetic fields produced by power sources such as the proposed
transmission line.
79. Reliable and recent studies have failed
to show a correlation between EMF and childhood leukemia.
80. Almost 40 years of research has failed to
confirm any adverse health effects from EMF levels found in our environment,
including exposure levels found near high-voltage transmission lines.
81. Also, EMF
has not been demonstrated to adversely affect bee health or productivity.
82. ATXI presented credible evidence of
calculations of the magnetic fields at average loading on Mark Twain in
relation to the nearest residence for each segment of the route. These ranges fell into the range of magnetic
fields similar to those that would be measured in residences in the absence of
a transmission line.
83. Mark Twain will not be a source of stray voltage, thereby it poses no threat to cattle, livestock or people.
Environment
84. Routing principles that ATXI considered
during route selection included minimizing impacts to natural resources such as
wetlands, woodlands and wildlife, and avoiding federal and state lands and
conservation and restricted easement areas.
85. After consulting
with the Missouri Department of Conservation (“MDC”), the Missouri Department
of Natural Resources, and U.S. Fish & Wildlife Service. ATXI made adjustments to the proposed routes
under consideration in order to minimize stream crossings, wetlands, and other
route considerations.
86. The selection of the final routes also took into account environmental concerns.
In the Maywood to Zachary portion of the route, the final route crossed fewer
acres of wetland, avoided crossing federally-owned or operated lands and
state-owned wildlife refuges, parks and conservation areas, and avoided Natural
Resources Conservation Service watershed easements.
87. While the final route for this segment
crosses approximately 0.8 acres of a privately-owned, state-operated easement
along the South Fabius River, selection of this
segment avoided crossing 3.9 acres of a similar state-operated, privately-owned
easement located on the alternate route.
88. ATXI considered environmental concerns –
including those raised by the MDC – when it selected the southern route as the
final route in the Maywood to Zachary segment of the line.
89. Environmental concerns were also
considered in the selection of the final route in the Zachary to Iowa state
line segment of the transmission project. The alternative selected as the final
route for this segment minimized the length across forested lands and avoided
crossing any state- or federally-owned or operated lands, such as wildlife
refuges, state parks and conservation areas.
90. The final route will not cross any of the
locations identified as known habitats for Indiana
bats.
Farming
91. Less than one acre of actual farmland
will be taken out of production for the entire 95-miles of 345-kV line.
92. While the actual easement area includes
523 agricultural acres, less than one acre of farmland will be removed from
production because the only land permanently removed from cultivation is the
area of the footprint of the foundations for the monopole structures.
93. One of the benefits of using such a structure
is to minimize the line’s contact points with the land and allow better
maneuverability around the structures.
94. ATXI has agreed to compensate landowners
for damages associated with constructing the project.
95. Although the final route runs diagonally
on some parcels, the final route selected by ATXI was less diagonal than the
alternative routes.
96. Also, paralleling transmission lines, as
suggested by Neighbors United, increases the likelihood of common-mode failures
– the likelihood that a line failure will cause an adjacent line to fail.
97. Further, burying the line could increase the
cost of the project tenfold.
98. There should be no impact on farming
operations outside the easement area and, for that matter, only minimal
farming-related impacts inside the easement area around the footings as farmers
may continue to use the land under the transmission lines.
99. It is unlikely that additional land would need to be removed from
production because ground-based applications can be used to cover areas no
longer suitable for aerial application.
100. The steel monopoles are designed to meet or
exceed the National Electric Safety Code and will be able to withstand an
extreme wind load of almost 100 miles per hour.
101. The conductors are designed to withstand the
loads imposed by 1 inch of radial ice, along with a 40-mile per hour wind. The line is protected with relays that will
open breakers to take the line out of service in the highly unlikely event
where a conductor would break and fall to the ground.
102. ATXI will address the soil compaction caused
by construction activity by restoring the land using a deep ripper unless the
landowner desires to make other arrangements.
103. ATXI will either compensate the owner for
any compaction caused by construction activities or have a restoration
contractor remove the compaction so that crop yields would not be compromised.
104. If soil issues remain following reclamation
efforts, ATXI’s procedures provide that ATXI will pay damages to the landowner.
105. High-voltage transmission lines do not
interfere with GPS systems due to frequency separation.
106. The proposed transmission line will operate
at 60 Hertz, which is an extremely low frequency, while GPS systems operate in
the frequency range of 1.2
billion to 1.5 billion Hertz. Because
they operate at two different ends of the spectrum, there is no opportunity for
one to interfere with the other.
107. ATXI identified and avoided all known pivot
irrigation systems along the transmission line route.
108. Transmission line monopoles do not prohibit
the future use of pivot irrigation on a particular parcel because the systems
may be designed to operate exclusive of the area where the monopoles are
located.
109. Although it would be rare that an irrigation
system could not be accommodated during construction, the inability to install
a center pivot irrigation system or other irrigation systems would be factored
into the compensation ATXI offered the landowner.
110. Only if the presence of a transmission line
would be entirely inconsistent with land used for a federal Conservation
Reserve Program (“CRP”) would a CRP contract be cancelled. Should this occur, such damages would
eligible for reimbursement.
Amish-Mennonite concerns
111. The proposed line traverses only one
property identified by Neighbors United as having an Amish or Mennonite owner.
112. That family’s residence is located almost one-half mile from the route.
Land values
113. Any loss in fair market value of a property
due to a transmission line easement is something properly considered in the
appraisal process in condemnation cases.
County assents
114. ATXI does
not have county commission permissions for Mark Twain to cross public roads and
highways.
Other conditions on
certificate
115. The conditions upon the certificate as agreed upon by ATXI and
Staff, which are listed in the ordered paragraphs below, are reasonable.
Conclusions of Law
1.
When making findings of fact based upon witness
testimony, the Commission will assign the appropriate weight to the testimony
of each witness based upon their qualifications, expertise and credibility with
regard to the attested to subject matter.
2.
In
making its determination, the Commission may adopt or reject any or all of any
witnesses’ testimony.
3.
Testimony
need not be refuted or controverted to be disbelieved by the Commission.
4.
The
Commission determines what weight to accord to the evidence adduced.
5.
The
Commission may disregard evidence which in its judgment is not credible, even
though there is no countervailing evidence to dispute or contradict it.”
6.
The
Commission may evaluate the expert testimony presented to it and choose between
the various experts.
7.
The Commission has general supervisory authority
over all “electrical corporations.” Specifically, the Commission has authority
over electrical corporations and their plant that are created “for the purpose
of furnishing or transmitting electricity for light, heat, or power.”
8.
Section 386.020(15), RSMo
(Cum. Supp. 2013) defines “electrical corporation” as including:
every corporation, company, association,
joint stock company or association, partnership and person, their lessees,
trustees or receivers appointed by any court whatsoever, other than a railroad,
light rail or street railroad corporation generating electricity solely for
railroad, light rail or street railroad purposes or for the use of its tenants
and not for sale to others, owning, operating, controlling or managing any
electric plant except where electricity is generated or distributed by the
producer solely on or through private property for railroad, light rail or
street railroad purposes for its own use or the use of its tenants and not for
sale to others.
9.
“Electric plant” includes:
all real estate, fixtures and personal property
operated, controlled, owned, used or to be used for or in connection with or to
facilitate the generation, transmission, distribution, sale or
furnishing of electricity for light, heat or power; and any conduits, ducts or
other devices, materials, apparatus or property for containing, holding or
carrying conductors used or to be used for the transmission of electricity for
light, heat or power (emphasis added).
10.
ATXI is an electric utility and a public utility
subject to Commission jurisdiction.
11.
The Right to Farm Amendment to The Missouri
Constitution provides that “the right of farmers and ranchers to engage
in farming and ranching practices shall be forever guaranteed in this state . .
. .”
12.
The Commission has no authority to rule on the
constitutionality of a statute.
13.
The Commission is an administrative body of
limited jurisdiction, having only the powers expressly granted by statutes and
reasonably incidental thereto.
14.
However, constitutional issues must be raised at
the first opportunity,
and the Commission must frequently interpret statutory and constitutional
provisions to adjudicate the issues within the scope of its jurisdiction.
15.
Prior to constructing the
requested facility, ATXI must receive a certificate of convenience and necessity
from the Commission.
16.
The Commission may impose
conditions on the certificate of convenience and necessity that it finds
reasonable and necessary.
17.
The Commission may grant a
certificate of convenience and necessity when it determines, after due hearing,
that the proposed project is “necessary or convenient for the public service”.
18.
The term “necessity” does
not mean “essential” or “absolutely indispensable”, but rather that the
proposed project “would be an improvement justifying its cost”.
19.
It is within the
Commission’s discretion to determine when the evidence indicates that the
public interest would be served by the award of the certificate.
20.
“The
Commission has traditionally used five criteria to determine whether to grant a
certificate of convenience and necessity:
(1) there must be a need for the service; (2) the applicant must be
qualified to provide the proposed service; (3) the applicant must have the
financial ability to provide the service; (4) the applicant’s proposal must be
economically feasible; and (5) the service must promote the public interest.”
21. “The
requirement that an applicant's proposal promote the public interest is in
essence a conclusory finding. . . . Generally speaking, positive findings with
respect to the other four standards will in most instances support a finding
that an application for a certificate of convenience and necessity will promote
the public interest.”
22. “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.”
23. “When
consent by a . . . county is required, approval shall be shown by a certified
copy of the document granting the consent . . . , or an affidavit of the
applicant that consent has been acquired.”
24. “If any of the items required under
this rule are unavailable at the time the application is filed, they shall be
furnished prior to the granting of the authority sought.”
25. The
Court of Appeals stated, “Section
229.100 simply prohibits public utilities from erecting power lines without
first having obtained the assent of the county commission of such county
therefore.”
26. A certificate of
convenience and necessity does not override or repeal any existing authority of
municipalities or counties. It simply allows
the utility “to exercise the rights and privileges presumably already
conferred upon it by state charter and municipal consent.”
Decision
Applying
the above Findings of Fact and Conclusions of Law, the Commission reaches the following
decision:
Authority
to rule on application
Neighbors
United claims that ATXI requests relief that would permanently remove citizens’
property from production and prevent these citizen farmers and ranchers from
engaging in farming and/or ranching practices.
Neighbors United asserts that if the Commission were to grant ATXI the
CCN to construct and operate this transmission line, such action would infringe
on its members’ ability to engage in farming or ranching in violation of the
Right to Farm Amendment to the Missouri Constitution.
This assertion fails to distinguish between the legal
significance of granting a CCN based upon a determination that the proposed
project is in the public interest and the taking of property through eminent
domain proceedings. The former is within
the purview of the Commission, while the latter is within the exclusive
jurisdiction of Article III courts. Accordingly,
because the potential issuance of a CCN does not, in and of itself, deprive any
member of Neighbors United of the
ability to farm or ranch, the cited constitutional provision cannot provide the
basis for denying the
Application. The Commission has
authority to rule on ATXI’s application.
Certificate of
convenience and necessity
The
Commission finds that ATXI has shown it is entitled to a CCN. ATXI has shown a need for Mark Twain,
qualifications to own and operate it, the financial ability to build it, the
economic feasibility of building it, and the public interest that would be
served by building it. Notably, there is
a benefit to Missouri ratepayers if this CCN is granted. Thus, ATXI has satisfied the Tartan criteria.
The
Commission has great sympathy for the affected individual landowners,
particularly those in the Amish and Mennonite communities who have certain
values and beliefs that are in conflict with the project. But the Commission must balance the direct but narrow property interests of a few against
the indirect but broad economic and environmental interests of the general
public.
In this case, the project is in the public
interest because it is needed to:
o
Promote grid reliability
o
Relieve congestion
o
Promote renewable energy
o
Meet local load serving needs
o
Provide downward pressure on customer rates
The Commission grants
ATXI the certificate of convenience and necessity.
County assents
However, the Commission will
impose a condition of acquiring county assents upon the certificate. ATXI does not have assent from any of the
counties through which Mark Twain would run.
ATXI must get assent from each county through which Mark Twain would run
before the certificate becomes effective.
The Commission believes the plain language of § 229.100 RSMo and its own rules require as much. If, however, a reviewing court determines
that § 229.100 RSMo does not require ATXI to obtain
these assents, this condition will, of course, be null and void.
The Commission understands
ATXI’s argument that county assent is required for an “area certificate” to
serve retail customers, but is not required for a transmission “line
certificate” which it seeks. The Commission finds all of the applicable cases
distinguishable from the case at bar.
In Harline, the Court held that the
utility did not need a line certificate to build a transmission line in an area
where it already had an area certificate.
Aquila I held that the
utility’s construction of a new power plant was subject to county zoning. And
Aquila II held that the Commission could not lawfully approve a power plant
after it was built. In all these cases, the utility had one or
more area certificates.
The Commission finds some
language from Aquila II instructive;
it states
“(T)his
court has held, in Harline,
that it is not necessary for a utility to obtain a new line certificate before
extending transmission lines through its certificated area . . . Utilities
must, nonetheless, obtain line certificates to extend transmission lines beyond
their certificated areas.”
That language reflects only two
possibilities: either a transmission
line through territory for which a utility holds an area certificate, or
a transmission line beyond the territory for which a utility holds an
area certificate. In both instances, the
utility has an area certificate.
But ATXI would have the
Commission stretch the holding of Harline to read that county commission approval is not
necessary for a new line certificate even when a utility does not already hold an
area certificate. Harline and its progeny did not
contemplate a utility having a line certificate without a corresponding area
certificate, and thus did not address circumstances where a utility has not
already sought county or municipal consent.
The Commission is loath to allow a utility a novel end run around a statutorily
required county commission approval simply because the utility would not serve
retail customers.
Conditions
In addition, the
Commission finds the conditions agreed to by Staff and ATXI to be reasonable,
and thus, will impose them.
THE COMMISSION ORDERS
THAT:
1.
The application for a certificate of convenience
and necessity to construct the Mark Twain Project is granted, subject to the conditions
listed below.
2.
The certificate is contingent upon ATXI
providing certified copies of county assents for the Mark Twain Project from
Marion, Shelby, Knox, Adair, and Schuyler Counties, Missouri.
3.
The plans and specifications for construction of
the proposed Mark Twain Project that ATXI is developing shall be filed with the
Commission as required by 4 CSR 240-3.105(1)(B)2.
4.
Throughout the right-of-way acquisition process,
ATXI will use all reasonable efforts to abide by the depicted route on each of
the 377 parcels identified as of the filing of its application as parcels over
which an easement will be required, but will be allowed to deviate from the
depicted route within one of the 377 parcels in two scenarios:
First, if surveys or testing do not necessitate a
deviation, ATXI may deviate from the depicted route on a particular parcel if
ATXI and the landowner agree, e.g., upon request of the landowner and
ATXI's agreement with the request. Second, if ATXI determines that surveys or
testing require a deviation, ATXI will negotiate in good faith with the affected
landowner and if agreement can be reached ATXI may deviate from the depicted
route on that parcel, as agreed with the affected landowner. With respect to any parcel other than the 377
identified parcels where ATXI determines that testing or surveys necessitate
acquisition of an easement on that parcel, ATXI will negotiate in good faith
with the landowner of the affected parcel over which ATXI has determined an
easement is needed and, if agreement is reached, may deviate from the depicted
route by locating the line on the affected parcel but will notify the
Commission of the deviation and parcels affected prior to construction on that
parcel. If agreement is not reached, despite good faith negotiations, ATXI will
file a request with the Commission to allow it to deviate from the depicted
route onto the affected parcel and shall, concurrently with the filing of its
request with the Commission, send a copy of its request to the owner(s) of
record of the affected parcel via U.S. Mail, postage prepaid, as shown by the
County Assessor's records in the county where the affected parcel is located,
or at such other address that has been provided to ATXI by the owner(s). ATXI shall
fully explain in that request why ATXI determined the change in route is needed
and file supporting testimony with its request and the name(s) and addresses of
the owner(s) to whom it provided a copy of its request. After Commission notice
of the opportunity for a hearing on the issue of whether the change in route
should be approved is given to the owner, Staff and Public Counsel, the
Commission will grant or deny the request.
5.
Absent a voluntary agreement for the purchase of
the property rights, the transmission line shall not be located so that a
residential structure currently occupied by the property owners will be removed
or located in the easement requiring the owners to move or relocate from the
property.
6.
Prior to the commencement of construction on a
parcel, ATXI will secure an easement which will include a surveyed legal
description showing the precise dimension, including the length and width, for
the permanent transmission line easement area for each affected parcel. In
addition, ATXI will track each easement grant by way of a spreadsheet that identifies
each parcel by Grantor and County, and which contains the recording information
for each parcel. Upon securing all necessary easements for the project, ATXI will
file a copy of the spreadsheet with the Commission, to which a map will be
attached. For each parcel, the map and
the spreadsheet will include a unique indicator that allows the Commission to
see where on the map that parcel is located.
7.
ATXI shall follow the
construction, clearing, maintenance, repair, and right-of-way practices set out in Schedule
DB-R-2 attached to Dan Beck’s Rebuttal Testimony.
8.
ATXI shall follow the
construction, clearing, maintenance, repair, and right-of-way practices set out in Schedule
DB-R-2 attached to Dan Beck’s Rebuttal Testimony.
9.
Because the following rules do not
pertain to ATXI due to their lack of retail customers, the Commission finds
good cause to waive them, and so waives them:
Commission Rules 4 CSR 240-3.145, .165, .175, 190(1), (2), (3)(A)-(D).
10.
All pending motions and other requests for
relief not granted are denied.
11.
This Report and Order shall become effective on May
27, 2016.
BY THE COMMISSION
Morris
L. Woodruff
Secretary
Hall, Chm., Stoll, Kenney,
Rupp, CC., concur.
Coleman, C., concurring opinion attached.
Dated at Jefferson City,
Missouri,
on this 27th day of April, 2016
