STATE OF ILLINOIS

ILLINOIS COMMERCE COMMISSION Rock Island Clean Line LLC : : Petition for an Order granting Rock Island : Clean Line LLC a Certificate of Public : Convenience and Necessity pursuant to : 12-0560 Section 8-406 of the Public Utilities Act : (on remand) as a Transmission Public Utility and to : Construct, Operate and Maintain an : Electric Transmission Line and Authorizing : and Directing Rock Island Clean Line LLC : pursuant to Section 8-503 of the Public : Utilities Act to Construct an Electric : Transmission Line. :

PROPOSED ORDER ON REMAND

By the Commission:

I. PROCEDURAL HISTORY

On October 10, 2012, Rock Island Clean Line LLC (“Rock Island,” “RI,” or “Petitioner”) filed the above-referenced Petition with the Illinois Commerce Commission (“Commission” or “ICC”) pursuant to Sections 8-406 and 8-503 of the Public Utilities Act (“Act” or “PUA”), 220 ILCS 5/1-101, et seq.

Rock Island therein requests an order granting it a certificate of public convenience and necessity (“CPCN” or “Certificate”), pursuant to Section 8-406 of the Act, authorizing it to operate as a transmission public utility in the State of Illinois and to construct, operate and maintain an electric transmission line (“Project”); and authorizing and directing it, pursuant to Section 8-503 of the Act, to construct the proposed line. Rock Island also seeks authorization to use the Federal Energy Regulatory Commission (“FERC”) Uniform System of Accounts to file annual financial information required by ICC forms, and to maintain its books and records at a location outside of Illinois.

Petitions for leave to intervene were filed by Commonwealth Edison Company (“ComEd”); Locals 51, 9, 145, and 196, International Brotherhood of Electrical Workers, AFL-CIO (“IBEW”); the Illinois Agricultural Association a/k/a Illinois Farm Bureau (“IAA”); the Illinois Landowners Alliance, NFP (“ILA”); Wind on the Wires (“WOW”); the Environmental Law & Policy Center (“ELPC”) and the Natural Resources Defense Council (“NRDC”), also collectively referred to as “Environmental Intervenors”); the Building Owners and Managers Association of Chicago (“BOMA”); Dynegy Midwest Generation, LLC and Dynegy Kendall Energy, LLC; Ameren Transmission Company of Illinois; Midwest Generation, LLC; John L. Cantlin; Joseph H. Cantlin; Timothy B. Cantlin; Jason

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D. James; James Bedeker, Sally Bedeker and First Midwest Bank Trust #6243 (“Bedeker Intervenors”); Friesland Farms LLC, Larry Gerdes and Steven Gerdes (“Gerdes Intervenors”); and the Illinois Department of Agriculture (“IDOA”). IDOA later filed a motion to withdraw which is granted.

Pursuant to due notice as required by law and by the rules and regulations of the Commission, a prehearing conference was held in this matter before a duly authorized Administrative Law Judge (“ALJ”) at the Commission’s offices in Springfield on January 8, 2013.

On February 7, 2013, ILA and IAA filed Motions to Dismiss, challenging Rock Island’s eligibility to be granted a Certificate under Section 8-406 of the PUA. The Motions to Dismiss were denied in a written ruling, on March 18, 2017. At the prehearing conference, the parties acknowledged that it was not necessary for ILA and IAA to file petitions for interlocutory review of the Ruling in order to preserve their objections for final argument to the Commission. Various other Motions were filed and ruled upon throughout the proceeding.

Public Forums were held on September 18 and October 28, 2013, and were well attended. Numerous landowners and others expressed their objections to the proposed transmission line.

Evidentiary hearings were held on December 5 through 13, 2013. At the evidentiary hearings, Rock Island presented the filed testimony and exhibits of its witnesses: Karl McDermott, Michael Skelly, Gary Moland, Rudolph Wynter, Matthew Koch, Leonard Januzik, Hans Detweiler, David Loomis, Wayne Galli, Neil Wallack, Pierre Adam and David Berry. The Commission Staff (“Staff”), presented the testimony of Yassir Rashid, Daniel G. Kahle, Richard Zuraski and Alan Pregozen. ComEd presented the testimony of Steven T. Naumann and Ellen Lapson. ILA presented the testimony of Jeffrey Gray, Paul Marshall, Curtis Jacobs, Randy Rosengren, Sid Nelson, Ed Simpson and Bill Cole. Michael Goggin testified for WOW. The IBEW presented the testimony of James Bates. Michael Cornicelli testified on BOMA’s behalf. Larry and Steve Gerdes testified on behalf of the Gerdes Intervenors. James Bedeker testified on behalf of the Bedeker Intervenors. The IAA did not offer witness testimony.

Post-hearing initial briefs (“IBs”) and reply briefs (“RBs”) were filed by Rock Island, ComEd, Staff, ILA, IAA, WOW and Environmental Intervenors. An initial brief was filed by IBEW. Suggested orders were filed by Rock Island and ComEd, and a summary of its position was filed by ILA.

A Proposed Order was served on August 11, 2014. Briefs on exceptions (“BOEs”) were filed by Rock Island, Staff, ComEd, ILA, IAA, WOW, IBEW and Environmental Intervenors. Reply briefs on exceptions (“RBOEs”) were filed by Rock Island, Staff, ComEd, ILA, IAA, WOW, IBEW, and Environmental Intervenors.

On November 25, 2014, the Commission entered its Final Order, which granted the requested Certificate. Thereafter, ILA, ComEd, and IAA, filed appeals to the Third District Appellate Court (docketed as 3-15-0099, 3-15-0103, and 3-15-0104, respectively). The appeals were consolidated. On August 10, 2016, the appellate court reversed the Final Order, finding that the Commission had no authority under the PUA to

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consider Rock Island’s Petition for a Certificate because Rock Island did not qualify as a public utility under Illinois law. Ill. Landowners Alliance, NFP v. Ill. Commerce Comm’n, 2016 IL App (3d) 150099, 60 N.E.3d 150, 406 Ill.Dec. 248 (3rd Dist. 2016).

The Commission and other parties filed petitions for leave to appeal to the Illinois Supreme Court. The petitions were granted and consolidated. On September 21, 2017, the supreme court filed its opinion, affirming the appellate court’s opinion. The supreme court found that Rock Island cannot meet the ownership requirement for qualification as a public utility and therefore, was ineligible to receive a Certificate from the Commission. 2017 IL 121302, 90 N.E.3d 448, 418 Ill.Dec. 290 (2017).

On December 29, 2017, the appellate court remanded the matter back to the Commission with directions to enter an order consistent with its decision.

II. DESCRIPTION OF ROCK ISLAND AND THE PROJECT

Rock Island is a Delaware limited liability company with principal offices in Houston, Texas, and it is authorized to do business in Illinois. Rock Island is a wholly owned subsidiary of Rock Island Wind Line, LLC, a Delaware limited liability company, which is in turn a wholly owned subsidiary of Clean Line Energy Partners LLC (“Clean Line”), a Delaware limited liability company. The owners of Clean Line are GridAmerica Holdings Inc. (“GridAmerica”), Clean Line Investor Corp., Michael Zilkha, and Clean Line Investment LLC. GridAmerica is a subsidiary of National Grid USA. A major owner and operator of electric transmission and distribution facilities and natural gas distribution systems in New York, Massachusetts, and Rhode Island.

The transmission line planned by Rock Island would be 500 miles long and would originate at a converter station in O’Brien County, Iowa, “traverse Iowa” for 379 miles, cross the Mississippi River near Princeton, Iowa, and then enter Illinois south of Cordova, Illinois. From there, the proposed line would extend for approximately 121 miles in Illinois to the Collins Substation in Grundy County.

The primary purpose of the 500-mile line is to connect unidentified, unbuilt wind generation facilities in northwest Iowa and nearby areas in South Dakota, Nebraska, and Minnesota (“Resource Area”) with electricity markets in northeast Illinois and elsewhere in the PJM Interconnection grid.

Except as noted below, the transmission line would be a direct current (“DC”) line. The energy generated in wind farms is in alternating current (“AC”) form. To transmit this energy over a high voltage DC (“HVDC”) or “DC” transmission line, the energy must be converted to DC form. The DC portion of the proposed transmission line would originate from an AC-to-DC converter station at O’Brien County in Iowa and terminate at a DC-to-AC converter station located approximately four miles north of the Collins Substation in Grundy County. From the converter station, a four-mile AC segment, consisting of two parallel 345 kilovolt ("kV") AC lines, would connect to ComEd’s existing 765 kV AC transmission system at or near the Collins substation.

The DC transmission line’s nominal voltage would be ± 600 kV. It is described as the first DC transmission line proposed in Illinois.

Rock Island characterizes the line as a “merchant project.” As such, Rock Island asserts that it will recover its costs of construction and operation solely through the

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revenues it receives from the specific transmission customers that purchase capacity and take transmission service on the Project. The FERC approved Rock Island’s proposal to pre-subscribe “up to” 75 percent of transmission capacity to anchor customers. The FERC also approved Rock Island’s request to sell the remaining 25 percent of the capacity using an open season auction.

III. PUBLIC UTILITY STATUS

IAA and ILA filed Motions to Dismiss (“Motions”) on February 8, 2013. IAA and ILA argued that, as a threshold matter, in a proceeding under Sections 8-406 and 8-503 of the PUA, it must be determined whether Rock Island meets the definition of public utility under Section 3-105 of the PUA. IAA and ILA asserted that Section 3-105 requires that to be a public utility an entity must own, control, operate, or manage, property within Illinois, to be used to engage in the provision of utility service for public use. IAA and ILA argued that because Rock Island owned no such plant, equipment or property it is not a public utility and therefore the proceeding should be dismissed. Rock Island, IBEW, and WOW filed responses in which they opposed the Motions. The Motions to Dismiss were denied. The parties reiterated their arguments in their post-hearing briefs.

A. Rock Island’s Position

Rock Island asserts that it has demonstrated that construction and operation of the Project will promote the public convenience and necessity and that Rock Island meets the statutory requirements for issuance of a CPCN for the Project under Section 8-406(b) of the PUA and for an order authorizing construction of the Project pursuant to Section 8-503 of the PUA. Petitioner asserts 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. Rock Island maintains that in addition to promoting the development of an effectively competitive electricity market, the Project will provide specific reliability benefits for Illinois and will enable new wind generation capacity to access the Illinois market. Rock Island states that it has demonstrated that it is capable of efficiently managing and supervising the construction process for the Project and has taken sufficient action to ensure adequate and efficient construction and supervision thereof. Rock Island asserts that it has demonstrated that it is capable of financing the construction of the Project without significant adverse financial consequences for Rock Island and its customers.

Rock Island maintains that the Motions to Dismiss were properly denied. The Petitioner asserts that ILA’s and IAA’s arguments set up an impossible construction, only existing, incumbent utilities, or entities that acquired and operated significant transmission infrastructure in Illinois, could be issued a CPCN. The Petitioner states that owning and operating such infrastructure, before applying for and obtaining a CPCN, could arguably be a prohibited action. The Petitioner argues that the issue for this case is whether the Commission can determine, based on the record, that Rock Island meets the requirements of Section 8-406 to be issued a CPCN as a public utility and to construct, operate, and maintain the Project. In Rock Island’s view, if and when the Commission finds the requirements of the PUA are satisfied, Rock Island will be authorized to construct, operate, and maintain its proposed transmission line and to conduct a public utility business in the State of Illinois.

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Rock Island asserts that ILA’s and IAA’s proposed construction of Section 3-105 and Section 8-406 is unreasonable and implausible. Petitioner states that under their construction of the statutory provisions, an entity cannot apply for a Certificate to construct public utility facilities and transact public utility business unless it already owns public utility plant, equipment or property. Rock Island concludes that IAA’s and ILA’s construction of the PUA sets up a classic “catch-22,” is unreasonable, and would produce absurd results. Rock Island asserts that the General Assembly cannot have intended that an applicant for a Certificate to construct new public utility facilities or to transact a public utility business must already be a public utility and already own plant, equipment or property used or to be used to provide public utility service. It notes that ownership would arguably violate Section 8-406. Rock Island asserts that under that construction no new entrants could ever apply for, let alone be granted, Certificates to construct new public utility facilities and to transact a public utility business. Rock Island concludes that ILA’s and IAA’s argument violates the principle of statutory construction that a statute should not be construed in a manner that produces an absurd result or leads to consequences that the General Assembly could not have contemplated or intended.

According to Rock Island, Sections 3-105 and 8-406 of the PUA can be reasonably and sensibly read to allow an entity which does not yet own plant, equipment or property in Illinois to be used in utility operations to apply for and be granted a Certificate to construct proposed public utility facilities and to transact a public utility business.

In response to IAA’s and ILA’s argument that the statute must be construed based on the plain meaning of its text, Rock Island states that it is well-established that a literal construction of a statute will not be followed where it would lead to consequences that the legislature could not have contemplated or intended. In re Marriage of Eltrevoog, 92 Ill. 2d 66, 70, 440 N.E.2d 840, 842 (1982). Petitioner emphasizes that in construing a statute, it should be presumed that the General Assembly, in enacting it, did not intend an absurd result. Adams v. Northern Ill. Gas Co., 211 Ill.2d 32, 64, 809 N.E.2d 1248 (2004); citations omitted. Petitioner states that statutory language should be given the fullest, rather than the narrowest, possible meaning to which it is susceptible. People ex rel. Sherman v. Cryns, 203 Ill. 2d at 279, 786 N.E.2d at 151; Lake Cnty. Bd. of Review v. Property Tax Appeal Bd., 119 Ill. 2d 419, 423, 519 N.E.2d 459, 461 (1988). Rock Island asserts that IAA’s and ILA’s construction would provide a narrow, rather than a broad, scope of authority for the Commission by limiting it to considering petitions by, and granting Certificates to, only entities that are already public utilities, and prohibiting the Commission from considering petitions from, and granting Certificates to, new entrants that are not public utilities at the time of their petitions even though the new entrant would meet the substantive criteria for a Certificate specified in Section 8-406(b).

Petitioner states that IAA’s and ILA’s construction of Sections 3-105 and 8-406 ignores other relevant provisions of these sections that contradict their interpretation. Rock Island observes: the word “only” does not appear in Section 3-105; “already” does not appear in Section 8-406; and “public utility” does not appear in Section 8-503. Rock Island states the IAA and ILA construction ignores the last clause of the first paragraph of Section 3-105: “. . . or owns or controls any franchise, license, permit or right to engage in: . . . [the transmission of electricity].” It argues that this clause begins with “or,” which means it is an alternative to the preceding clause “owns, controls, operates or manages,

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within this State . . . plant, equipment or property. . . .” Rock Island concludes that an entity holding “any franchise, license, permit or right to engage in: . . . [the transmission of electricity]” is a “public utility” even if it owns no plant, equipment or property for that purpose in this State. It asserts that a Certificate granted by the Commission is a “franchise, license, permit or right to engage in” one or more of the enumerated activities that is covered by the certificate (e.g., the “transmission of electricity”), and makes the holder a “public utility.” Rock Island argues that the granting of a Certificate by the Commission is “the granting of a privilege or license to do a certain thing issued by an agency of the State in the exercise of the police power.” Railway Express Agency v. Ill. Commerce Comm’n, 374 Ill. 151, 155, 28 N.E.2d 116, 118 (1940). A Certificate issued by the Commission is a property right to build the facility authorized by the Certificate. Quantum Pipeline Co. v. Ill. Commerce Comm’n, 304 Ill.App.3d 310, 317, 709 N.E.2d 950, 954 (3rd Dist. 1999). Rock Island states the construction also ignores the second sentence of subsection (f) of Section 8-406: “Unless exercised within a period of 2 years from the grant thereof authority conferred by a certificate of convenience and necessity issued by the Commission shall be null and void.” It maintains that Section 8-406(f) expressly recognizes that an entity can be granted a Certificate by the Commission, but still have things to do before it can “exercise” the authority.

Rock Island disputes IAA’s and ILA’s argument that by removing the phrase “that now or hereafter may” in the 1967 amendment to Section 3-105, the General Assembly intended to limit the definition of “public utility” only to entities that currently own, etc., plant, equipment or property. Rock Island asserts that the “now or hereafter” language was included in the original enactment of the PUA in 1913 and refers to the time of enactment. According to Rock Island, the purpose of this phrase in the original enactment of the PUA was to subject to regulation as “public utilities” both existing entities that fell within the definition at the time of the enactment of the PUA and future entities that would fall within the definition at a future date. It states that years after the enactment of the PUA, however, such a reference was no longer needed.

Rock Island maintains that IAA’s and ILA’s construction of the PUA is contradicted by a long line of Commission cases, in which applicants owning no plant, equipment or property in Illinois to be used for utility purposes have applied for and been granted Certificates. Petitioner notes that IAA and ILA have cited no cases in which the Commission has dismissed or denied a petition for a Certificate based on the construction of the statute they advocate for in this proceeding. Rock Island asserts that the Commission has not construed the PUA in the manner that IAA and ILA contend it should be construed. To the contrary, Rock Island states, under Section 8-406 and its predecessor section, and under the parallel language of Section 13-401, the Commission has granted Certificates to entities that did not, at the time of their petitions, own, control, operate or manage any plant, equipment or property in this State that was used or to be used to provide the utility service for which the entity sought certification. It notes that the Commission granted Certificates in Docket Nos. 07-0246 and 02-0702, where, although transmission assets existed, they were not owned by the applicants for public utility status and in Docket No. 06-0179, where the applicant was a newly formed Illinois corporation that had no assets.

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Finally, Rock Island asserts that it satisfies the statutory test that IAA and ILA espouse. Rock Island explains that it has purchased options entitling it to purchase in fee the land needed for one of its converter stations.

Rock Island asserts that Section 8-406(b) affirmatively authorizes the Commission to grant CPCNs when it finds that the proposed construction and/or the proposed transaction of business will promote the public convenience and necessity. It maintains that nothing in this affirmative grant of authority to the Commission requires that the applicant satisfy the definition of “public utility” at the time it files its petition, or even at the time of the Commission’s order. Rock Island states that it is the Commission’s order granting the CPCN that authorizes the applicant to proceed with the proposed construction and the proposed transaction of business, which makes the applicant a “public utility.”

Rock Island states the cardinal rule of statutory construction, to which all other rules are subordinate, is to ascertain and give effect to the intent of the legislature. Wade v. City of North Chicago Police Pension Bd., 226 Ill.2d 485, 509, 877 N.E.2d 1101 (2007); citations omitted. It argues that determining statutory intent from the “plain meaning” of the text of the statute is not an exercise in parsing individual words, but requires reading the text of the relevant statutory provisions in their entirety to ascertain what the General Assembly intended. Rock Island asserts that the General Assembly intended to prohibit an entity owning plant, property or equipment for the transmission of electricity from constructing new transmission facilities or transacting the business of transmitting electricity until the entity obtained a Certificate from the Commission based on a determination that public convenience and necessity requires the construction of the plant, equipment or property or the transaction of the business. Rock Island says the General Assembly intended to empower the Commission to grant Certificates authorizing the construction of new facilities for the transmission of electricity and/or the transaction of the business of transmitting electricity, where the Commission makes a determination that public convenience and necessity require the construction of the new facilities and/or the transaction of the proposed business.

Rock Island states that Staff has already rejected IAA’s and ILA’s construction of Section 8-406 in Docket No. 10-0579, Rock Island’s previous Certificate case. Petitioner explains that in Docket 10-0579, Rock Island filed a petition requesting only a Certificate as a public utility under Section 8-406(a), and did not request a Certificate under Section 8-406(b) for the construction of specific facilities, stating that it would file a separate petition at a later date requesting a Certificate to construct the Rock Island Clean Line transmission project. Rock Island states that Staff filed a motion to dismiss the petition without prejudice as premature, on the grounds that the Commission could not evaluate and rule on Rock Island’s request for a Certificate to operate as public utility unless it also had before it a request from Rock Island for a Certificate to construct and operate the specific facilities that Rock Island proposed to use to operate as a public utility. Rock Island says that Staff dismissed Rock Island’s concerns that it needed a Certificate to be a public utility in order to request a Certificate, as baseless, tantamount to an argument that because an entity is not now a public utility, that entity cannot at any point become a public utility. Rock Island notes that Staff did not treat the fact that Rock Island owned no plant, property or equipment in Illinois used or to be used to provide public utility service

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as a statutory bar to requesting and obtaining a Certificate under Section 8-406. Rather, it says, Staff’s construction of the statute was that Rock Island needed to have “a concrete plan to present to the Commission regarding the manner in which it will deploy” the assets it would use to provide public utility service.

Rock Island distinguishes the Arkansas Public Service Commission (“Arkansas Commission”) docket, Docket No. 10-041-U, in which the Arkansas Commission dismissed, without prejudice, a petition of a sister company of Rock Island for a certificate of public utility status. Rock Island explains that Docket No. 10-041-U is not like the instant case, but rather is like Rock Island’s filing in Docket No. 10-0579, in which Rock Island sought only a certificate as a public utility pursuant to Section 8-406(a) and did not request a CPCN to construct and operate the Rock Island Project.

Rock Island observes that ComEd opposed ILA’s and IAA’s Motions to Dismiss under subsections 8-406(a) and (b) of the PUA, but not their Motion to Dismiss Rock Island’s request for an order under Section 8-503. It says that ComEd’s argument was that “a Section 8-503 order is a mandate when issued,” and that the Commission has no authority to issue a Section 8-503 Order to a non-utility.” Rock Island asserts that ComEd provided no basis to distinguish its position regarding Section 8-503 from the ILA’s and IAA’s argument that an applicant must already be a public utility” in order to apply for a Certificate. Rock Island states that ComEd’s construction of Section 8-503, in conjunction with Section 8-406, is not logical or reasonable and would not lead to a logical or reasonable result. Rock Island states that the portion of Section 8-503 governing Rock Island’s request does not even use the term “public utility”:

Rock Island notes ComEd’s argument that it cannot request relief under Section 8-503 for a project that is speculative and that Rock Island will not commit to build. Petitioner states that, although its Petition requested an order “authorizing and directing“ it to construct the Project, Rock Island has subsequently made it clear in both its testimony and its Initial Brief that Rock Island is only seeking an order authorizing, not directing or, as ComEd argues, mandating, Rock Island to construct the Project.

Rock Island maintains that the Ruling denying the Motions to Dismiss was correct. It reiterates that IAA’s and ILA’s construction of the PUA sets up a classic ‘catch-22’: Rock Island explains that under IAA’s and ILA’s construction, an entity cannot apply for a Certificate to construct public utility facilities and transact public utility business unless it already owns public utility plant, equipment or property. But, it maintains, constructing the public utility facilities needed (according to IAA and ILA) in order to apply for a Certificate, without already possessing a Certificate authorizing construction of those facilities, is prohibited by Section 8-406(b) (‘no public utility shall begin the construction of any new plant, equipment, property or facility . . . unless and until it shall have obtained from the Commission a certificate that public convenience and necessity require such construction’).”

B. IAA

IAA asserts that, as a matter of law, Rock Island is not a “public utility” and therefore not eligible to be granted the relief it seeks. IAA states that Rock Island fails to plead key facts in its Petition, i.e., that it owned plant, equipment, or property in Illinois at the time of the filing of the Petition used or to be used in connection with the transmission

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of electricity. IAA argues that as a non-utility, merchant transmission-only, private enterprise, without any transmission infrastructure (i.e. plant, equipment or property) or history of service in Illinois, which may or may not provide service to Illinois residents, Rock Island does not meet the threshold criteria required to be deemed a public utility and therefore, as a matter of law, is not eligible for relief under Sections 8-406 or 8-503 of the PUA.

IAA states that the determination of whether Rock Island is a “public utility” as defined in the PUA is a threshold issue. IAA asserts that determination should turn on the definition of “public utility” in Section 3-105(a) of the PUA, which provides: “public utility means and includes: “… every … limited liability company … that ... owns, controls, operates, or manages within this state, directly, for public use, any … plant, equipment or property used or to be used for or in connection with … the transmission, delivery, or furnishing of … electricity.” IAA states that the wording of Section 3-105 is clear and unambiguous. IAA says that as an administrative agency, the Commission has only that jurisdiction conferred upon it by the General Assembly – which is indicated by the plain language of the PUA. Ill.-Ind. Cable Television Ass’n v. Ill. Commerce Comm’n, 55 Ill. 2d. 205, 207 (1973), citing, Lambdin v. Ill. Commerce Comm’n, 352 Ill. 104, 106 (1933). IAA states that the Commission may not, by its own acts, extend its jurisdiction. Sheffler v. Commonwealth Edison Co., 399 Ill. App. 3d 51 (1st Dist. 2010).

IAA asserts that when interpreting a statute, the court’s duty is to ascertain and give effect to the intent of the General Assembly. Board of Trustees of the Teachers’ Retirement System of Ill. v. West, 395 Ill. App. 3d 1028, 1032, 916 N.E.2d 648, 652 (2009). IAA states that intent is best derived from the statutory language, which, if unambiguous, must be enforced as written. Id. at 1032, 652. “Courts must not construe words and phrases in isolation and, instead, should construe them in light of other relevant portions of the statute so that—if possible—no term is rendered superfluous or meaningless.” Id. at 1035, 654. IAA maintains that the Commission must apply the plain language of Section 3-105, and if Rock Island does not fall within the plain meaning of “public utility,” the Commission has no jurisdiction over the Petition.

IAA maintains that Rock Island does not currently own, control, operate, or manage, directly or indirectly any plant, equipment, or property, in Illinois, used or to be used for or in connection with electric transmission service, for public use. It argues that Rock Island simply has a business plan, unnamed anchor tenants, and an assertion that the to-be-determined transmission project will likely benefit Illinois consumers. IAA observes that although Rock Island may have the best of intentions, and its project might benefit someone someday, the Commission is confined by statute. IAA argues that the Commission is not legally permitted to rewrite or expand upon explicit statutory prerequisites in order to accommodate this private merchant project lacking transmission infrastructure in Illinois.

IAA states that for Rock Island to be deemed a public utility, the plain meaning of “public utility” in the statutory text of Section 3-105 would have to be expanded. It adds that presuming Rock Island is a public utility without a showing that it owns, controls, operates, or manages property in Illinois to be used for utility services, ignores the historical language changes made by the legislature to the definition of “public utility” in the PUA. IAA explains that in 1967, the definition of “public utility” was amended to a

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form substantially similar to what it is today. IAA states that prior to the amendment the PUA defined “public utility” as an entity “that now or hereafter: (a) may own, control or manage, within the State … any plant, equipment or property used or to be used for or in connection with the … transmission … of … electricity…”. IAA says that the 1967 amendment, by removing “now or hereafter,” restricted the definition to require that an entity must currently own transmission infrastructure to be deemed a public utility. IAA asserts that Section 3-105 retains the requirement of owning, controlling, operating or managing property in Illinois.

IAA cautions that an Illinois administrative agency has only the jurisdiction conferred upon it by the legislature, and may not expand its jurisdiction, including by expanding the plain meaning of a statute, citing Dusthimer v. Bd. of Trustees of Univ. of Ill., 368 Ill. App. 3d 159, 857 N.E.2d 343 (4th Dist. 2006). IAA asserts that the Commission must presume that the language of Section 3-105 qualifying that a public utility is an entity “that owns, controls, operates or manages, within this State” is worded by the General Assembly in this fashion for a reason. IAA maintains that if the General Assembly wanted its language to be understood otherwise, the definition would have been written to accommodate such a case.

IAA cautions that the Commission should not base its interpretation on current policy concerns or energy conditions. IAA reiterates that there is no latent ambiguity in Section 3-105. IAA asserts that the language of Section 3-105 clearly and unambiguously requires the present ownership of transmission infrastructure in Illinois for an entity to be deemed a public utility.

C. ILA’s Position

ILA expresses a similar position with respect to Section 8-406. ILA argues, in part, “Both subsections (a) and (b) of Section 8-406 identically require that a petitioner for a certificate be a public utility: only a public utility may obtain a Section 8-406(a) Certificate to transact business and only a public utility may obtain a Section 8-406(b) Certificate to construct facilities.” ILA contends that Rock Island lacks transmission infrastructure, which it states is a threshold requirement under Section 3-105, to being a public utility. ILA maintains that to come within the definition of “public utility,” an entity must have qualifying infrastructure.

ILA, whose members include persons who own or farm land on or near an identified route for the Project, asserts that the Commission lacks the statutory authority to grant Rock Island the relief it requests. ILA states its objections are grounded on the well-established legal principle that an administrative agency has no more authority than the applicable statute grants to it. ILA states that it has been long established that the Commission, as an administrative agency in this State, has only such powers and authority as are expressly conferred by the legislation that created and govern the agency. E.g., Black Hawk Motor Transit Co. v. Ill. Commerce Comm'n, 398 Ill. 542, 76 N.E.2d 478, 484 (1948).

ILA summarizes its argument: (1) Rock Island is not a "public utility" under Section 3-105 of the PUA; and (2) subsections (a) and (b) of Section 8-406, which govern the eligibility for and grant of a Certificate, are directed at public utilities. ILA relies upon subsection (a): “No public utility … shall transact any business …” and similarly,

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subsection (b): “No public utility shall begin the construction ….” ILA argues that either or both subsections could have been worded: “No person shall” or “No entity shall;” rather than referencing a public utility. ILA states that given that the General Assembly chose the particular words that it did, which have remained intact for many years, rather than choosing an alternative, the General Assembly can only have intended that initiation of requests under Section 8-406 of the PUA are restricted to entities that are public utilities at the time of the request. ILA concludes that Rock Island is not a public utility.

ILA describes Rock Island as a special purpose legal entity created solely to pursue development of the Project. ILA says Rock Island has no history of ownership of assets or of any customers, in Illinois or elsewhere. As such, ILA states Rock Island does not fit the definition of a “public utility” under Section 3-105 of the PUA and therefore does not qualify for a Certificate under the laws and regulations of the State of Illinois. Moreover, ILA states, Rock Island does not represent or contend in its Petition that it is a public utility. ILA argues that in requesting a Certificate "to operate as a transmission public utility," Rock Island is effectively seeking to have the Commission grant it public utility status. ILA states that in its Petition, testimony, and exhibits, Rock Island provides extensive information about the Project and its projected benefits to support its contention that the public convenience and necessity require the construction of the Project. However, ILA maintains, such supporting information, is irrelevant to the issue of whether Rock Island meets the definition of a public utility.

ILA maintains that, regardless of the environmental, market or public policy appeal of the instant Project, it does not fit within the legal construct erected by the General Assembly. ILA argues that each of the Section 8-406 proceedings in which a Certificate was granted for a transmission utility in Illinois, are readily distinguishable from the instant proceeding. ILA explains that in each case, the petitioner already owned existing utility infrastructure in Illinois.

ILA asserts that the Section 3-105 definition of “public utility” includes two significant prerequisites. It states that the first prerequisite is that the entity must own, control operate or manage electricity-providing equipment or property; the second prerequisite is that such equipment or property must be for a public use. ILA maintains that Rock Island's Petition, on its face, conclusively demonstrates that it fails on both of these requirements. Consequently, Rock Island may not obtain a Certificate under subsections (a), (b), or any other subsection of Section 8-406.

ILA asserts that it is a well-established principle of statutory construction that when the language of a statute is clear and unambiguous, that language is to be given its effect without resorting to other tools of construction. Gem Electronics of Monmouth, Inc. v. Dept. of Revenue, 183 111.2d 470, 475, 702 N.E.2d 529 (1998). ILA emphasizes that because Section 3-105 is clear and unambiguous, exceptions, limitations, and conditions that conflict with the intent of the General Assembly should not be read into the statute. ILA maintains that the General Assembly chose the present tense, indicating that the petitioning entity must have the requisite infrastructure at the time it wishes to become a public utility. ILA asserts that it is evident that Section 3-105 does not contemplate that an entity may qualify as a public utility based simply on its plans or hopes for such infrastructure, but that the entity must currently possess the infrastructure. ILA insists

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that the entity aspiring to become a public utility must have in place qualifying infrastructure before it may be granted public utility status.

ILA asserts that the plain meaning of Section 3-105 is consistent with the General Assembly’s intention that infrastructure exist before public utility status could be granted. ILA observes that the PUA was first enacted in 1913, and has been amended numerous times. ILA notes that the General Assembly has re-examined and amended the PUA many times, and has seen fit to retain the requirement for current ownership or operation of the infrastructure.

ILA maintains that the current ownership principle, codified in Section 3-105 of the PUA, is one that the courts and this Commission have recognized for over 85 years. It cites, for example, Austin Bros. Transfer Co. v. Bloom, 316 Ill. 435 (1925), stating that the supreme court held that "property becomes clothed with public interest when used in a manner to make it a public consequence and affects the community at large." ILA reiterates that the property must already exist. ILA states that holdings in other cases, including those of the United States Supreme Court, have specifically established and confirmed that the PUA's purpose was to bring property under control so long as it is being used as a public utility, and not after. See Munn v. Illinois, 94 U.S. 113 (1876). Thus, ILA concludes, a public utility is only a public utility once it is serving the public, not before. ILA states that this cornerstone requirement was made further evident in Central Trust Co. v. Calumet Co., 260 Ill.App. 410 (1st Dist. 1931), which held that a corporation is not a public utility until it is actually operated.

ILA emphasizes statements in the Petition, which make clear that Rock Island does not satisfy the prerequisites for being a public utility. ILA observes: the Petition states that the Project "will be" a power line and associated facilities; "will originate" in Iowa and "will terminate" at a converter station in Illinois; Rock Island "will own control, operate and manage" certain facilities for public use; Rock Island "intends" to construct its infrastructure; and Rock Island "expects" that certain types of entities will be its customers. ILA observes that Rock Island does not have assets that could be used to sell, transmit or deliver electricity. It says that at this time, Rock Island is little more than a business entity and a management team with a business plan. ILA asserts that Rock Island has not conducted and cannot conduct any public utility business with no electricity infrastructure or customers.

ILA states that while the decision or reasoning adopted by the Arkansas Commission cannot bind this Commission, its reasoning is applicable and sound. According to ILA, the Arkansas Commission recognized the statutory difficulty, in that Arkansas law "was not drafted to comprehend changes in the utility industry such as this one - where a non-utility, private enterprise endeavors to fill a void in the transmission of renewable power that is much needed but for which the Commission is unable to afford any regulatory oversight." (Ark. Pub. Svc. Comm’n Docket No. 10-041-U, Order No. 9, p. 10.) ILA says that the Arkansas Commission based its decision upon its definition of "public utility," which is similar to that in Illinois. ILA explains that both statutes require that a public utility own or operate equipment or facilities for the transmission of electricity, i.e., not merely a plan that it will own or operate the same at some future date. See id. ILA states that the Arkansas Commission recognized that another Clean Line project entity did not own any such facilities and was not a utility for that reason.

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ILA cautions that proponents of the Project could argue that transmission utilities are inherently special entities for which the Commission, as a matter of public policy, should push the edge of the legislative envelope. ILA states that such a push based on the facts presented in this proceeding would go impermissibly beyond relief granted in previous transmission Certificate proceedings. ILA says that, since 2001, in at least four other petitions by transmission entities - either for public utility status or for CPCN - public utility status, under the PUA, was found to exist. However, it states, in significant contrast to the present proceeding, each of the petitioners in those proceedings already owned transmission infrastructure in Illinois, and was able immediately to serve the people of the State of Illinois. ILA declares that these electric transmission dockets share a common and significant theme: the Commission finds and grants public utility status for transmission utilities when transmission infrastructure already exists consistent with the statute and case law. In the absence of such infrastructure, ILA maintains, the Commission is without authority to grant public utility status, even when presented with infrastructure plans and purported benefits.

ILA states that while its argument focuses on Rock Island's lack of infrastructure, it is also evident from the Petition that it has no electricity to transmit, another requirement of Section 3-105. ILA argues that Rock Island simply predicts that wind energy development will occur at the western terminus of the transmission line. According to ILA, Rock Island asserts that the project is a "precondition" to development of wind farms, but not a guaranty.

D. Staff’s Position

Staff does not support an interpretation of Section 5-103 that requires an entity to own or operate plant or equipment to be used in providing public utility service, prior to being granted a Certificate under Section 8-406. Staff indicates that Rock Island has not shown that it currently owns, controls, operates or manages any plant, equipment or property to be used in transmission of electricity. However, Staff finds it illogical to suggest that an entity cannot apply for a Certificate to construct public utility facilities and transact public utility business unless it already owns public utility plant, equipment or property. Staff explains that Illinois courts have indicated that a literal reading of a statute will not be followed where it would lead to consequences that the legislature could not have contemplated or intended. In re Marriage of Eltrevoog, 92 Ill. 2d 66, 70 (1982).

Staff opines that restricting entities seeking to engage in public utility business in Illinois in such a manner would erect barriers of entry to the industry or would result in the imposition of requirements on existing public utilities in Illinois which would not apply to non-certificated entities. Staff finds it more logical that the Commission may assess whether a petitioner’s proposal would meet the CPCN criteria of the statute if and when approved. In Staff’s view this approach provides the Commission with the flexibility of assessing a petition and any public need for particular projects on a case by case basis.

As to the issue of public use, Staff states that the courts have interpreted Section 3-105 to require that all persons must have an equal right to use the utility, and it must be in common and upon the same terms. Palmyra Tel. Co. v. Modesto Tel. Co., 336 Ill. 158 (1929). Staff explains that it is the right of public use rather than the extent to which it is in effective use that determines whether or not an entity is a public utility. South Suburban

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Motor Coach Co. v. Levin, 269 Ill. App. 323 (1933). Staff asserts “public use” requires that the benefits must be extended to all persons in common upon the same terms, and it is immaterial how few or how many avail themselves of the rights so extended. State Public Utilities Comm’n ex rel. Macon County Tel. Co. v. Bethany Mut. Tel. Ass’n, 110 N.E. 334 (1915). Staff explains that whether a given business is a public utility depends upon the public character of the business or service rendered which makes its regulation a matter of public consequence and concern because it affects the whole community. Ill. Highway Transp. Co. v. Hantel, 323 Ill. App. 364 (1944).

Staff maintains that, in interpreting Section 3-105, the courts have been clear that the service must be made available to all persons on the same terms and conditions, not confined to privileged persons, such as one group or type of customer as proposed by Rock Island. Staff states the term “public utility” implies a public use of an article, product, or service, carrying with it the duty of the producer or manufacturer, or one attempting to furnish the service, “to serve the public and treat all persons alike, without discrimination. Highland Dairy Farms Co. v. Helvetia Milk Condensing Co., 308 Ill. 294, 300 (1923). Staff emphasizes that the term “public utility” as used historically, implied a public use carrying with it the duty to serve the public “and treat all persons alike, and it precluded the idea of service which was private in its nature and was not to be obtained by the public. See Springfield Gas & Electric Co. v. City of Springfield, 126 N.E. 739 (1920), aff’d, 257 U.S. 66 (assessing PUA of 1913, Section 10, since repealed and now replaced with Section 3-105).

Staff questions whether the Project is for public use. Staff notes that Rock Island states that it will use an anchor tenant model to sell up to 75% of the transmission capacity on the Project with capacity not secured by anchor tenants being sold to customers through an “open season” process or processes that would constitute at least 25% of capacity. Staff observes that Rock Island admits that its “target customer base” for transmission services will be comprised primarily of wind energy producers and purchasers of electricity generated from renewable resources. Staff says that Rock Island indicates that customers and users of the Project will be retail consumers only indirectly of electricity in Illinois and other parts of PJM and the Midwest (now Midcontinent) Independent Transmission System Operator, Inc. (“MISO”).

Staff observes that in this scenario, Rock Island would be acting as a provider of open access transmission services. It explains that the FERC is the federal regulator of, among other things, the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce. 16 USCS § 824(a) (“Federal Power Act”). According to Staff, the FERC requires that the transmission provider offer and provide transmission service to all eligible customers on a non-discriminatory basis. Rock Island Clean Line LLC, Order Conditionally Authorizing Proposal and Granting Waivers in Part, issued on May 22, 2012, 139 FERC ¶ 61,142, at P 16 (2012) (hereinafter, “FERC Order”). This means that Rock Island would not be allowed to give a preference to wind generators, but would be required to offer its service to all customers in a non-discriminatory manner subject to a regional transmission organization (“RTO”) open access transmission tariff (“OATT”). Staff says that the requirement of non-discriminatory open access could arguably overcome the public use hurdle since all customers would

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have an equal right to use the utility on the same terms, as required for public use under Section 3-105 of the Act.

However, according to Staff, Rock Island indicates that it would not be able to resize the Project. Staff states that because of Rock Island’s status as a merchant transmission provider, rather than a public utility under the Federal Power Act, the FERC did not rule definitively on this question of capacity expansion. Rather, the FERC said that if Rock Island’s open season results in oversubscription, it would “require that Rock Island in its open-season report justify in greater detail its reasons for not expanding the Project and for allocating capacity among open season participants.” FERC Order, P 33. Thus, Staff explains, even though the FERC directed Rock Island to file, upon completion of the Project, a rate schedule for service under the OATT for the RTO to which it transfers operational control (FERC Order, Ordering P (C)), Rock Island was not necessarily required to expand its service capacity to accommodate all eligible customers. Staff says that Rock Island did not provide any evidence of an intention, willingness, or capability to expand its capacity if it should become oversubscribed.

Staff maintains that to constitute a “public use,” under Section 3-105, all persons must have an equal right to use the utility, and it must be in common, upon the same terms, however few the number who avail themselves of it. Staff observes that three-fourths of the capacity of the Project is intended to be pre-subscribed for private contracts with a limited number of pre-selected customers. Staff states that only twenty five percent of the Project’s capacity is assured of being available through open auction. Staff reiterates that while the FERC indicates in a policy statement that merchant transmission projects will be considered public utilities required to file an OATT, Rock Island has not provided any evidence here that it would be willing and able to expand the capacity of the Project to provide service to eligible customers if and when it becomes oversubscribed. Staff reiterates that, to the contrary, when the Petitioner was before the FERC seeking negotiated rate authority for the Project, it explained that it would not be able to expand the project’s capacity, stating “it is not financially or practically feasible to materially increase the size of this Project.” FERC Order, P 22. Staff states that Petitioner has not provided any evidence here that this assessment has changed.

Staff cautions that while Rock Island is not now seeking authority, pursuant to Section 8-509 of the PUA, to acquire land and land rights through eminent domain, if the Commission finds that Rock Island is a public utility, Rock Island could seek such authority going forward. It notes that, while Rock Island said that it would not pursue that option unless reasonable efforts to acquire the land rights are unsuccessful, it did not rule out that option. Staff suggests it would be difficult to reconcile condemnation authority for a private merchant project, built to serve particularly targeted out-of-state customers through private contracts, with Section 3-105 of the Act.

Staff is troubled with the prospect of a finding that Rock Island would be an Illinois public utility, entitled to rights inherent in that status, including the right, when authorized following proper application to the Commission, to be granted the right to exercise the power of eminent domain. Staff asserts that, without having clearly shown that it is offering its facilities for “public use,” Rock Island should not be granted a status that would permit it to pursue approvals for the taking of private property. Staff recommends that the Commission should consider with care the possibility that if found to be a public utility,

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Rock Island would have the right to seek eminent domain over private property although it would be operating primarily for its own admittedly private purposes and not for “public use.”

E. ComEd’s Position

ComEd asserts that the evidence in this proceeding shows that Rock Island is not a public utility. ComEd notes the definition of a “public utility” in Section 3-105 requires not only that a public utility “own[], control[], operate[] or manage[]” transmission assets, but that it do so “for public use,” that it has or will have Illinois customers and that it does or will own, control, operate, and manage, within this State, for public use, facilities used in the transmission of electricity, before issuance of a CPCN.

First, ComEd argues, Rock Island has no Illinois customers and has not provided evidence sufficient to establish who its customers will be or that it will ever have Illinois customers. ComEd concludes that an entity without Illinois customers is not an Illinois public utility. ComEd states that the supreme court’s seminal opinion in Miss. River Fuel Corp. v. Ill. Commerce Comm’n, 1 Ill. 2d 509 (1953) (“Mississippi River”) established that providing a service or product normally provided by a public utility does not make an entity a public utility unless it holds itself out to provide that service or product to the public at large. ComEd explains that the supreme court affirmed the circuit court’s conclusion that Mississippi River Fuel was not a public utility subject to regulation under the PUA because the record failed to support the conclusion that Mississippi River Fuel devoted its property to “public use.” Id. at 515-16.

According to ComEd, neither the fact that other customers in theory could have approached Rock Island for a contract, nor that the public was among the ultimate customers of the power and electric companies, was sufficient to make Mississippi River Fuel a public utility. ComEd maintains that Rock Island cannot hold itself out as providing utility services to the public generally. It notes that Rock Island aims to reserve up to 75% of the Project’s capacity for contract anchor tenants in the Resource Area. ComEd states that these anchor tenants are not Illinois customers but rather hypothetical future generators in Iowa and other “Resource Area” states.

ComEd asserts that even if some customers eventually sign up, Rock Island is, at best, a Mississippi River Fuel in the making. ComEd explains that just as Mississippi River Fuel sold natural gas in Illinois to 23 retail industrial customers, under individual contracts, and also to reselling utilities (Mississippi River, 1 Ill. 2d at 512), if the Project was completed, Rock Island’s actual Illinois customers – if there are any – would be under contract and would be a limited number of resellers or large users. ComEd emphasizes that the supreme court found that an entity providing such service is not a public utility because it has “confined its sales to specific and selected customers, and has done no act by which it has given the reasonable impression that it was holding itself out to serve gas to the public, or to any class of the public, generally.” Id. at 518.

ComEd states that Rock Island has admitted that it has no assets in Illinois that could be used to sell, transmit, or deliver electricity. ComEd asserts that Rock Island’s failure to have any Illinois transmission assets is not simply a product of not having yet received a CPCN. It argues that the failure is more fundamental in that Rock Island has made no commitment to ever own, control, operate or manage Illinois transmission

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assets. ComEd emphasizes that Section 3-105 mandates that a public utility currently “owns, controls, operates or manages … for public use, any plant, equipment or property used or to be used for … the transmission … of … electricity.”

ComEd asserts that this is not a Catch 22. It argues that the law does not require that Rock Island must already be functioning as a public utility at the time that it petitions the Commission for a Section 8-406(a) CPCN because the PUA does not place a limitation on who may seek a CPCN. But, ComEd asserts, that does not mean parties can seek to be declared public utilities that are not prepared to meet the requirement of being a public utility if their petition were granted.

ComEd explains that while the Commission has recognized transmission-only public utilities in the past, in each instance it was assured of the existence of an Illinois customer. ComEd states that in Interstate Power and Light Company and ITC Midwest LLC, Docket No. 07-0246 (Nov. 28, 2007) at 1, the Commission noted the existence of an Illinois transmission service customer – Jo-Carroll Energy Inc. Similarly, it says, in American Transmission Company L.L.C. and ATC Management Inc., Docket No. 01-0142 (Jan. 23, 2003) at 5, the Commission in granting the CPCN found that “Petitioners’ transmission lines are transmitting power within Illinois to serve Illinois customers….”

ComEd maintains that Rock Island cannot prove it will own and operate a transmission facility, now or ever. It asserts that the potential to own and operate transmission assets in the future does not make an entity an Illinois public utility. ComEd maintains that being a public utility requires owning property that is “used or to be used” for public utility purposes. ComEd concludes that the potential to own and operate a transmission facility in the future does not make Rock Island a public utility now.

F. Environmental Intervenors’ Position

Environmental Intervenors state that the FERC Order prohibits Rock Island from privileging one citizen over another. They argue that while it might be impracticable for Rock Island to expand the capacity of the Project should demand outstrip capacity, the Commission should not understand this limitation as a restriction on public use. Environmental Intervenors assert that physical limitations do not reduce Rock Island’s ability to extend access to all persons upon the same terms, which the Illinois courts have held is the basis upon which the Commission should determine whether or not a project is for the public use. State Public Utilities Comm’n ex rel. Macon County Tel. Co. v. Bethany Mut. Telephone Ass’n, 110 N.E. 334, 335-36 (1915). In Environmental Intervenors’ view, the Commission should reject Staff’s argument that the Project does not constitute a public use because Rock Island is unable to guarantee its ability to expand the capacity of the Project should the Project become oversubscribed.

G. WOW’s Position

In response to the Motions to Dismiss, WOW argues that ILA and IAA’s interpretation of Section 8-406(a) is incorrect based on the plain language of the provision. WOW reasons that their interpretation would prohibit the Commission from granting public utility status upon a new company and would create a chicken and-egg scenario in which a company cannot be a public utility unless it owns transmission facilities but the company cannot own transmission facilities unless it is a public utility.

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Their interpretation leaves only one way for a company to become a new public utility – it must purchase existing facilities.

WOW asserts that ILA and IAA ignore the two middle conditions – if a company does not own a franchise to operate any public service or does not own a Certificate to operate as a utility prior to the amendment to the Act in 1985. In WOW’s view, those two provisions provide needed context for this provision and the instant case. WOW says they clarify that a company that does not already have a certificate to provide public service under one or both of those conditions needs to obtain one prior to starting up service. This provision does not require a company to own, in this case, transmission facilities to receive a CPCN to operate in Illinois. WOW maintains that the Rock Island Petition correctly applies Section 8-406 and creates administrative efficiency by requesting a CPCN to operate as a utility at the same time it outlines the public service it intends to provide.

IV. COMMISSION ANALYSIS AND CONCLUSION

The Commission is an administrative agency created by statute to exercise general supervision over all Illinois public utilities in accordance with the provisions of the PUA. As such, the Commission derives its authority solely from the PUA. Sheffler v. Commonwealth Edison Co., 399 Ill.App.3d 51, 60, 338 Ill.Dec. 110, 923 N.E.2d 1259 (2010); Peoples Energy Corp. v. Ill. Commerce Comm’n, 142 Ill.App.3d 917, 924, 97 Ill.Dec. 115, 492 N.E.2d 551 (1986). Section 8-406 of the PUA provides that a public utility must obtain a CPCN from the Commission before transacting business or constructing a high-voltage transmission line.

In the instant proceeding, Rock Island has requested a Certificate for the Project, i.e., to construct, operate, and maintain a high voltage transmission line along a proposed route across several counties in Illinois. The parties disagree as to whether Rock Island qualifies as a public utility such that it may be issued a Certificate.

The appellate court found that public utility status is determined by operation of Section 3-105 of the Act and conferred by order of the Commission authorizing the utility to transact business and construct and manage utility services. 60 N.E.3d 150, 158.

“Public utility” is defined in Section 3-105 of the PUA as any company that:

"owns, controls, operates or manages, within the 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:

(1) the production, storage, [or] transmission *** of heat, cold, power, electricity, water, or light[.]"

220 ILCS 5/3-105(a).

The appellate court noted the finding in Mississippi River that an applicant does not satisfy the statutory qualifications of a public utility simply because it sells something ordinarily sold by a public utility, such as heat, power, water, or electricity. Mississippi River, 1 Ill. 2d at 516. It stated that a public utility must also provide its product or service “for public use,” with the duty of serving the public and treating all persons alike, without

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discrimination. Id. The appellate court concluded that to attain public utility status a company must: (1) own, control, operate, or manage utility assets, directly or indirectly, within the State; and (2) offer those assets for public use without discrimination. See Id. at 516-19.

The appellate court found that Rock Island does not own, control, operate, or manage assets within the State. Similarly, the appellate court found that the Project does not satisfy the “public use” requirement. It notes that the majority, 75%, of the Project’s transmission capacity will be used by anchor tenants i.e., wind generators in the resource area of northwest Iowa, South Dakota, Nebraska, and Minnesota. Id. at 159. The appellate court states that the remaining 25% will be sold through an “open season” bidding process, but that Illinois generators are not required to participate in the bidding process. Id. at 160. Moreover, it states, the Project does not designate any part of the renewable energy transmitted along the proposed line for public use in Illinois. Id.

The supreme court affirms the judgement of the appellate court. It states that when the General Assembly repealed the prior PUA and replaced it with the present statute, the “now or hereafter *** may” language and all reference to ownership in the future was removed. 90 N.E.3d 448, 460. It states that the current law speaks only of ownership in the present tense. The supreme court states that it is axiomatic that when the legislature amends an unambiguous statute by deleting certain language, it is presumed that the legislature intended to change the law in that respect. Chicago Teachers Union, Local No. 1 v. Board of Education of the City of Chicago, 2012 IL 112566, ¶ 21, 357 Ill.Dec. 520, 963 N.E.2d 918. It therefore reads the current law 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.

The supreme court dismisses the arguments that the legislature has acquiesced to the Commission’s construction because the Commission has granted Certificates to applicants who were not yet public utilities and did not yet own or control assets in Illinois. Id. It states that the “acquiescence rule” applies in the context of administrative action involving consistently followed, long-standing administrative rules, regulations, or interpretations of ambiguous statutes. The supreme court finds those factors are not present here. Id. (citations omitted).

The supreme court also rejects the “Catch-22” concerns. It states that nothing in the PUA prohibits new entrants from commencing development of transmission lines immediately as a purely private project. The supreme court states that so long as the entities do not transact business as a public utility, they will not be subject to the PUA and will not require Commission authority to proceed. It asserts that barriers and 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 PUA. The supreme court explains that the PUA is based on a model of limited monopoly and reflects a policy of preventing rather than promoting competition with existing utilities. Id. at 462-463 (citations omitted).

The supreme court finds that Rock Island cannot meet the ownership requirement for qualification as a public utility and states there is no need to reach the additional question of whether it also fails the “public use” requirement.

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Having considered the entire record and the parties' arguments, the Commission finds that Rock Island does not own, control, operate, or manage assets within the State. The Commission therefore concludes that Rock Island is not a public utility and is therefore not eligible for a Certificate, consistent with the opinion of the appellate court as affirmed by the supreme court.

The Commission finds that the Petition should be dismissed with prejudice consistent with the opinion of the appellate court as affirmed by the supreme court.

V. FINDINGS AND ORDERING PARAGRAPHS

Having given due consideration to the entire record, the Commission is of the opinion and finds that:

(1) the Commission has jurisdiction over the subject matter of this proceeding;

(2) the findings of fact and conclusions of law reached by the Commission in this Order are supported by the record and are hereby adopted as findings of fact and conclusions of law;

(3) consistent with the opinion of the appellate court as affirmed by the supreme court, Rock Island is not a public utility as defined by Section 3-105 of the Public Utilities Act;

(4) consistent with the opinion of the appellate court as affirmed by the supreme court, Rock Island does not qualify to be granted a Certificate under Section 8-406 of the Public Utilities Act;

(5) this matter should be dismissed with prejudice; and

(6) all motions, petitions, objections, and other matters in this proceeding which remain unresolved should be disposed of consistent with the conclusions herein.

IT IS THEREFORE ORDERED by the Illinois Commerce Commission that this matter is dismissed with prejudice.

IT IS FURTHER ORDERED that any and all motions, objections and requests not ruled upon in this proceeding are hereby deemed disposed of in a manner consistent with the determinations and ultimate conclusions herein.

IT IS FURTHER ORDERED that pursuant to Section 10-113(a) of the Public Utilities Act and 83 Ill. Adm. Code 200.880, any application for rehearing shall be filed within 30 days after service of the Order on the party.

IT IS FURTHER ORDERED that subject to the provisions of Section 10-113 of the Act and 83 Ill. Adm. Code 200.880, this Order is final; it is not subject to the Administrative Review Law.

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DATED: April 27, 2018 BRIEFS ON EXCEPTIONS DUE: May 11, 2018 REPLY BRIEFS ON EXCEPTIONS DUE May 18, 2018 Jan Von Qualen, Administrative Law Judge