The Illinois Supreme Court rendered a decision on September 21, 2017 which upheld a lower court decision that an application filed by Clean Line Energy, a Houston Company, may not use eminent domain to acquire land to develop a 500 mile transmission line designed to carry wind generated power through the State of Illinois. Illinois Landowners Alliance NRF v Illinois Commerce Commission, 2017 IL 121302.
The basis for the decision was that Clean Line Energy does not qualify as a “public utility.” The $1.8 billion high voltage line has been in development for seven years.
The Supreme Court upheld an appellate court’s view that the utility failed to meet the qualifications to be a public utility as that term is defined by the Public Utilities Act because it neither owned, controlled, operated, nor managed utility assets directly or indirectly within the state, nor did it offer such assets for public use without discrimination.
The Court held, the fact that there may be barriers and significant costs to new companies wishing to enter the state to establish a new public utility is in no way incompatible with the theory and operation of the Public Utilities Act. The Act, after all, is based on a model of limited monopoly and reflects a policy of preventing rather than promoting competition with existing utilities. (Citation omitted.) One may disagree with that model, but the wisdom of this state’s regulatory system is a matter for the legislature, not our court. Of all the principles of statutory construction, few are more basic than that a court may not rewrite a statute to make it consistent with the court’s own idea of orderliness and public policy. (Citation omitted.)
Because Rock Island cannot meet the ownership requirement for qualification as a public utility, there is no need to reach the additional question of whether it also fails the “public use” requirement, as the appellate court concluded. Should the company elect to move forward with the project and reapply for a certificate of public necessity and convenience as a public utility once it moves beyond planning and actually owns, controls, operates or manages transmission assets, the question of public use can be revisited under the facts and circumstances then present. Any ruling on the question now would be purely advisory. That being so, there is likewise no need to address appellants’ argument that the appellate court’s construction of the public use requirement imposes an impermissible burden on interstate commerce in violation of the commerce clause of the United States Constitution (U.S. Const., art. I, § 8, cl. 3).
The project will have to proceed as a private venture. Without public utility status, Clean Line does not have the power of eminent domain which means as a practical matter, the power line is not going anywhere soon.
We have written in this blog on prior occasions on pipelines, see Pipeline Takings – Time to Reconsider their Power of Eminent Domain, January 6, 2017. In this blog, we noted that some legal authorities have questioned whether pipelines should have the power of eminent domain in the first place.
In our blog of March 27, 2014, we reported on Kentuckians United to Restrain Eminent Domain, Inc. v Bluegrass Pipeline, which was decided by the Franklin Circuit Court for the Commonwealth of Kentucky. In Bluegrass, the court granted summary judgment concluding that the power company lacked the power of eminent domain under Kentucky law. This determination was subsequently affirmed in May 2015 and the Kentucky Supreme Court decided not to review the appeal. It is worth noting that the Bluegrass Pipeline was to transmit flammable liquids which raised environmental and safety concerns. The Court noted that Bluegrass was not serving Kentucky’s consumers.
It would seem that there may be some positive movement in state courts to reconsider the right of power lines to use their power of eminent domain without restriction.