In the Missouri Court of Appeals Eastern District DIVISION THREE
MISSOURI LANDOWNERS ALLIANCE, ) No. ED107886 et al., ) ) Appellants, ) Appeal from the ) Missouri Public Service Commission vs. ) EA-2016-0358 ) PUBLIC SERVICE COMMISSION, et al., ) ) Respondents. ) FILED: December 17, 2019
OPINION
Missouri Landowners Alliance (“MLA”) and Eastern Missouri Landowners Alliance,
d/b/a Show Me Concerned Landowners, Christina Reichert, and Missouri Farm Bureau
(collectively “Farm Bureau”) appeal the report and order issued by the Public Service
Commission of the State of Missouri (“Commission”) on remand granting Grain Belt
Express Clean Line, LLC (“Grain Belt”) its application for a certificate of convenience and
necessity (“CCN”) to construct and maintain an interstate electrical line and associated
facilities. We affirm.1
1 The Commission’s motion to strike portions of MLA’s brief and appendix is denied as moot. Procedural Background
The procedural history surrounding this consolidated appeal is complicated and involves
multiple parties and intervenors.2
Relevant to this appeal, Appellant MLA was an intervenor in the matter before the
Commission as were Appellants Eastern Missouri Landowners Alliance, d/b/a Show Me
Concerned Landowners, Christina Reichert, and Missouri Farm Bureau (collectively “Farm
Bureau”). Additional intervenors were Respondents Missouri Joint Municipal Electric Utility
Commission (“MJMEUC”) and Renew Missouri. Respondent MJMEUC is a joint action agency
and a public and corporate body of the State of Missouri authorized by legislation to construct,
operate, and maintain transmission and generation facilities for the production and transmission
of electric power for its members, purchase and sell electric power and energy, and enter into
agreements with any person for the transmission of electric power. MJMEUC has 68 Missouri
municipal members, and Citizens Electric Corporation, a rural electric cooperative with more
than 21,000 members, is an advisory member. Together, MJMEUC’s members serve
approximately 347,000 Missouri retail electric customers.
Again, relevant to this appeal, Respondent Commission is the state agency responsible
for the regulation of public utilities in Missouri and whose authority extends to the issuance of
CCNs for the construction of electric plants within Missouri.
Respondent Grain Belt is the limited liability company that applied for a CCN to
construct and maintain an interstate electrical line and related facilities.
Respondent Renew Missouri is a non-profit group focused on renewable energy and
energy efficiency policy that submitted several filings in support of Grain Belt’s application.
2 In all, there were over twenty parties to whom the Commission granted intervention.
2 Factual Background
On August 30, 2016, Grain Belt filed an application with the Commission for
authorization to build the Missouri portion of an electric transmission line which would run
approximately 780 miles and which would move wind-generated energy from western
Kansas to Missouri and other states farther east. Grain Belt filed its application pursuant to
Section 393.170.1, RSMo (2016),3 4 CSR 240-2.060, and 4 CSR 240-3.105(1)(B).
The proposed route of the line would cross 206 miles through eight northern
Missouri counties: Buchanan, Caldwell, Carroll, Chariton, Clinton, Monroe, Randolph, and
Ralls. The transmission line would cross the property of approximately 570 Missouri
landowners and would deliver 4,000 megawatts of wind-generated electricity from western
Kansas, including 500 megawatts to Missouri and 3,500 megawatts to states further east. Grain
Belt also proposed to construct the Missouri converter station and associated AC
interconnecting facilities in Ralls County.
The Commission conducted local public hearings in each of the eight counties where the
proposed transmission line would be located. From March 20 through March 24, 2017, the
Commission held an evidentiary hearing and issued its decision on August 16, 2017, rejecting
Grain Belt’s application for a CCN on procedural grounds.4
Grain Belt appealed the Commission’s decision to this Court, which reversed and
then transferred the case to the Missouri Supreme Court. On transfer, the Missouri Supreme
Court concluded that the Commission had erred in finding it could not lawfully grant a CCN to
3 Unless otherwise indicated, all further statutory references are to RSMo (2016), as amended. 4 The decision was essentially based on the ground that Grain Belt had not secured the consents pursuant to Section 229.100 from all of the County Commissions in the eight counties where the line would be built, a requirement imposed by a case from the Western District of the Court of Appeals in an unrelated case. In re Ameren Transmission Co. of Illinois (ATXI), 523 S.W.3d 21 (Mo. App. W.D. 2017).
3 Grain Belt and remanded back to the Commission to determine whether Grain Belt’s “proposed
utility project is necessary or convenient for the public service.”5 Grain Belt Express Clean
Line, LLC v. Public Service Comm’n, 555 S.W.3d 469, 474 (Mo. banc 2018).
On remand, the Commission held another evidentiary hearing on December 18-19, 2018.
The Commission received additional evidence regarding potential changes which may have
occurred since the issuance of its Report and Order on August 16, 2017.
On March 20, 2019 (effective April 19, 2019), the Commission issued its Report and
Order granting Grain Belt a certificate of convenience and necessity, subject to conditions, and
thereby approving Grain Belt’s application to build the Missouri portion of the proposed
transmission line.
In granting the CCN, the Commission considered whether the Grain Belt proposal was
“necessary or convenient for the public service” under the five “Tartan factors.”6 The factors
considered are: a) there must be a need for the service; b) the applicant must be qualified to
provide the proposed service; c) the applicant must have the financial ability to provide the
service; d) the applicant’s proposal must be economically feasible; and e) the service must
promote the public interest.
Under the first Tartan factor, the Commission found that Grain Belt was devoting its
transmission line and converter station to a public use and that there was need for the Grain Belt
project. The Commission found that Grain Belt would benefit MJMEUC and the Missouri
5 In finding that prior consent from would-be affected counties is required for a utility to obtain an “area” CCN, the Missouri Supreme Court held that such consent is not required for a “line” CCN, thereby abrogating In re Ameren Transmission Co. of Illinois, 523 S.W.3d 21. 6 In re Tartan, GA-94-127, 1994 WL 762882 (Mo.P.S.C. Sept. 16, 1994).
4 Public Energy Pool7 (“MoPEP”), as well other Missouri cities that have contracted to purchase
wind energy from Kansas over the Grain Belt transmission line.
Under the second and third Tartan factors, the Commission found that Grain Belt
established its qualifications and financial ability to support the Grain Belt project.
Under the fourth Tartan factor, regarding economic feasibility, the Commission found
that the Grain Belt project is an interregional transmission line that would lead to lower
transmission congestion costs for utilities, and reduce the cost to utilities of serving their load.
Higher wind speeds in Kansas, together with tax incentives, and lower construction costs allow
Kansas to generate wind energy at a lower cost compared to wind energy generated in the east.
Compared to other forms of alternative energy the total delivered cost of energy from Grain Belt
is less than other renewable or conventional energy alternatives. Finally, the Commission found
that the size of the Grain Belt Project would achieve an economy of scale that is significantly
less expensive than a project that served Missouri alone.
Under the fifth Tartan factor, regarding public interest, the Commission found that Grain
Belt’s final proposed route “represents the best route to minimize the overall effect of the Project
on the natural and human environment while avoiding unreasonable and circuitous routes,
unreasonable costs, and special design requirements.” Additionally, the Commission found that
the project would lower Missouri’s adjusted energy production costs, provide benefits to
Missouri’s environmental and public health, through the generation of no emissions wind energy,
and would have a “substantial and favorable effect on the reliability of electric service in
Missouri.” The Commission found that the economic impact of the Grain Belt project would be
dramatic, both in terms of job creation as well as state revenue.
7 MoPEP is a group of 35 Missouri cities for which MJMEUC provides full requirements for wholesale energy, capacity, and ancillary services.
5 Finally, the Commission found that Grain Belt qualified as an electrical corporation for
purposes of Sections 386.020 (14), (15) and Section 393.170. The Commission found that Grain
Belt had acquired 39 easements for the transmission line from Missouri landowners, which gave
Grain Belt the right to construct, operate, repair, maintain, and remove an overhead transmission
line and related facilities, along with rights of access to the right-of-way for the transmission
line. The Commission also found that Grain Belt had cash on hand to be used for project
development.
Based on these findings, the Commission determined that the Grain Belt project would
benefit Missouri citizens and serve the public interest. Thereafter, the Commission unanimously
granted Grain Belt the CCN for which it had applied on August 30, 2016.
MLA and Farm Bureau timely filed applications for rehearing with the Commission.
The Commission denied the applications for rehearing. MLA and Farm Bureau now appeal.8
Standard of Review
Pursuant to Section 386.510, our review of the Commission’s final report and order “is
two-pronged: ‘first, the reviewing court must determine whether the [Commission’s] order is
lawful; and second, the court must determine whether the order is reasonable.’” Grain Belt
Express Clean Line, LLC v. Public Serv. Comm’n, 555 S.W.3d 469, 471 (Mo. banc 2018). “The
Commission’s order is presumed valid, and the burden of showing the order is unlawful or
unreasonable rests with the appellant.” Grain Belt Express Clean Line, LLC, 555 S.W.3d at 471.
This procedure “for judicial review in section 386.510 is exclusive and jurisdictional.” State ex
rel. AG Processing, Inc. v. Pub. Serv. Comm’n, 120 S.W.3d 732, 735 (Mo. banc 2003).
The first prong is the “lawfulness of a [Commission] order.” State ex rel. AG Processing,
Inc., 120 S.W.3d at 734. An order is lawful if the Commission acted within its statutory 8 Additional facts will be included, as necessary, in the discussion section below.
6 authority. Id. If the reviewing court finds the Commission’s order to be unlawful, the order is
overturned and the reviewing court “need not reach the issue of the reasonableness of the
[Commission’s] order.” Verified Application & Petition of Liberty Energy (Midstates) Corp. v.
Office of Public Counsel, 464 S.W. 3d 520, 524 (Mo. banc 2015).
However, if the Commission’s order is determined to be lawful, the reviewing court
moves to the second prong to determine whether the order is reasonable. State ex rel. Praxair,
Inc. v. Missouri Public Service Commission, 344 S.W.3d 178, 184 (Mo. banc 2011). An order is
reasonable if it “is supported by substantial, competent evidence on the whole record; the
decision is not arbitrary or capricious or where the [Commission] has not abused its discretion.”
State ex rel. Praxair, Inc., 344 S.W.3d at 184.
We defer to the Commission’s findings of fact, but whether a statute applies to a given
set of facts is a question of law this Court will review de novo. State ex rel. Union Elec. Co. v.
Pub. Serv. Comm’n, 399 S.W.3d 467, 477 (Mo. App. W.D. 2013). It is the burden of the party
seeking to set aside the Commission’s order to prove by clear and satisfactory evidence that the
order was unlawful or unreasonable. Section 386.430; In re Request for an Increase in Sewer
Operating Revenues of Emerald Pointe Util. Co., 438 S.W.3d 482, 489 (Mo. App. W.D. 2014).
This standard of review is applicable to all points on appeal.
Collateral Estoppel/Res Judicata/Judicial Estoppel/Collateral Attacks
Before considering MLA’s and Farm Bureau’s points on appeal, we must address Grain
Belt’s/MJMEUC’s contention that this Court should decline to exercise jurisdiction over this
consolidated appeal because the issues raised before this Court are barred under the doctrines of
collateral estoppel and res judicata. In short, Grain Belt/MJMEUC contend that MLA and Farm
Bureau are attempting to re-litigate matters that were already tried and settled between the
7 parties. We find no merit in these claims because the two prior Commission orders relied upon
by Grain Belt/MJMEUC to support their position were outright denials of Grain Belt’s
application for the CCN. As such, the Appellants prevailed in both instances and there was no
logical reason to appeal the Commission’s findings regarding its authority to issue the CCN.9
Similarly, we deny Grain Belt’s/MJMEUC’s arguments that MLA’s evidentiary
challenges are barred by the doctrines of judicial estoppel. MLA is allowed to raise these claims
given that the CCN was initially denied and the matter eventually remanded to the Commission
by the Missouri Supreme Court.
Finally, Grain Belt’s/MJMEUC’s arguments that Appellants’ claims are collateral attacks
on the Commission’s Orders issued in EA-2014-0207 and EA-2016-0358 (Issue Date: August
16, 2017) in contravention of Section 386.550 are equally without merit as both of these earlier
orders were decided in MLA’s favor. Therefore, this appeal does not meet the criteria for a
“collateral attack.” See State ex rel. Fee Trunk Sewer, Inc. v. Litz, 596 S.W.2d 466, 468 (Mo.
App. E.D. 1980) (A judgment favorable to plaintiff property owners in the underlying action
would not result in rendering the order of the Commission ineffective and thus it did not
constitute a collateral attack upon the order of the Commission; additionally, plaintiffs did not
seek to have order of Commission modified, amended or declared void.) 9 Collateral estoppel/issue preclusion requires that the issue was fully and fairly litigated, that the issue was essential to the earlier judgment, and that the earlier judgment be final and binding on the party against whom it is asserted. Sexton v. Jenkins & Assocs., Inc., 152 S.W.3d 270, 273 (Mo. banc 2004). Res judicata, or claim preclusion, precludes re-litigation not only of those issues on which the court in an earlier case was required to pronounce judgment, but to every point properly belonging to the subject matter of litigation and which the parties, exercising reasonable diligence, might have brought forward at the time. Chesterfield Village, Inc. v. City of Chesterfield, 64 S.W.3d 315, 318 (Mo. banc 2002).
8 Evidentiary Challenges
In Points I, II, and III of its brief, MLA argues that the Commission erred in admitting
into evidence and/or in denying MLA access to certain documents or testimony. Specifically,
MLA contends that the three documents at issue—the Loomis Study and two wind speed maps—
were inadmissible under Section 536.070(11), and by extension the testimony based on these
documents was also inadmissible.10 Additionally, MLA contends its due process rights were
violated when the Commission denied access to certain “confidential” documents that supported
Grain Belt’s claim regarding the cost of the Kansas wind generation. For ease of discussion, we
address these evidentiary challenges together.
As stated above, pursuant to Section 386.510, our review of the Commission’s final
report and order “is two-pronged: ‘first, the reviewing court must determine whether the
[Commission’s] order is lawful; and second, the court must determine whether the order is
reasonable.’” Grain Belt Express Clean Line, LLC, 555 S.W.3d at 471. Here, none of MLA’s
points relied on allege that the Commission’s report and order is unlawful or unreasonable under
Section 386.510. Instead, in its brief, MLA admits:
None of the appellants are challenging the sufficiency of the evidence to support the Commission’s final Report and Order. The MLA (and the other appellants represented by counsel for the MLA) concede for purposes of this appeal that the evidence which was admitted into the record in this case is sufficient to support the Commission’s individual findings of fact, its conclusions that the project meets each of the five Tartan criteria, and the ultimate finding that the proposed project is necessary or convenient for the public service. Accordingly, there is no need here to set forth in any further detail the evidence and findings which support the final Report and Order. [Emphasis added.]
10 We note that MLA’s “fruit of the poisonous tree” argument, under Point II, is inapplicable to civil or administrative proceedings. This exclusionary rule is an application of the Fourth Amendment rule that evidence discovered during a search and seizure conducted in violation of the Fourth Amendment must be excluded in criminal cases. See Riche v. Director of Revenue, 987 S.W.2d 331, 334-35 (Mo. banc 1999). Accordingly, we decline to address this Point further.
9 Based on this statement, MLA concedes that the Commission’s report and order finding that the
Grain Belt project is necessary or convenient for the public service and is supported by
competent and substantial evidence on the whole record. Additionally, MLA does not establish
why its allegations of error mean the report and order is not lawful or reasonable. MLA merely
concludes in its brief that, “it is reasonable to assume that the evidence in question had a direct
impact upon the Commission’s decision.” We find MLA’s arguments lack merit.
Here, during the evidentiary hearing, the Commission admitted the testimony of 54
witnesses and 135 exhibits into evidence, which supported the Commission’s ultimate finding
that construction of the Grain Belt project is necessary or convenient for the public service. Our
review of the record shows that the Commission carefully considered the evidence under the
criteria set forth under the five Tartan factors, namely; a) there must be a need for the service; b)
the applicant must be qualified to provide the proposed service; c) the applicant must have the
financial ability to provide the service; d) the applicant’s proposal must be economically
feasible; and e) the service must promote the public interest.
Under the first factor, the Commission found there was need for the Grain Belt project.
The Commission found that the Grain Belt project would benefit MJMEUC and MoPEP, as well
other Missouri cities that have contracted to purchase wind energy from Kansas over the Grain
Belt transmission line.11 Under the second and third factors, the Commission found that Grain
Belt established its qualifications and financial ability to support the Grain Belt project. Under
the fourth factor, the Commission found that the Grain Belt project, by providing an alternative
path for electricity between three North American transmission regions, will lead to lower
transmission congestion costs for utilities, and reduce the cost to utilities of serving their load.
11 Missouri cities that have contracted to purchase wind energy from Kansas delivered over the Grain Belt transmission line include Kirkwood, Hannibal, Columbia, and Centralia.
10 Finally, under the fifth factor, the Commission found that Grain Belt’s proposed route, based on
a routing study, represents the best route to minimize the overall effect of the Grain Belt projects
on the natural and human environment, while avoiding unreasonable and circuitous routes,
unreasonable costs, and special design requirements. Additionally, the project would provide
benefits to Missouri’s adjusted energy production costs, provide benefits to Missouri’s
environmental and public health, and would have a favorable effect on the reliability of electric
service in Missouri.
Having conceded that the Commission’s Report and Order is supported by competent and
substantial evidence on the whole record, MLA has failed to meet its burden to prove by clear
and satisfactory evidence that the Commission’s order was unlawful or unreasonable. For this
reason alone, MLA’s three points on appeal fail because the Commission’s report and order is
lawful and reasonable under Section 386.510.
We should also point out that MLA’s arguments fail for an additional reason: MLA does
not challenge the Commission’s decision to admit the challenged documents under Section
490.065.3,12 which was the basis on which the Commission admitted them, but instead insists
that they were inadmissible under Section 536.070(11).
Section 536.070(11) allows the results of statistical examinations, studies, audits, and
other summaries of voluminous information to be admissible in evidence in administrative
contested cases. By comparison, Section 490.065.3 provides:
The facts or data in a particular case upon which an expert bases an opinion or inference may be those perceived by or made known to him at or before the
12 The documents were admitted during the Commission’s March 2017 hearing. Section 490.065 was amended effective August 28, 2017. Section 490.065, RSMo (Supp. 2018). The statutory amendment did not change the standard for admission of expert testimony in administrative cases. See Section 490.065.1(3), RSMo (Cum. Supp. 2018), and Section 490.065(3), RSMo (2016).
11 hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reasonably reliable.
Section 490.065 governs the admission of expert testimony in contested case proceedings before
the Commission. State ex rel. Mo. Gas Energy v. Pub. Serv. Comm’n, 186 S.W.3d 376, 382 &
n.3 (Mo. App. W.D. 2006) (citing State Bd. of Registration for Healing Arts v. McDonagh, 123
S.W.3d 146, 154-55 (Mo. banc 2003)). Documents that form the basis of an expert’s opinion
may be admissible under this statute. Klotz v. St. Anthony’s Medical Ctr., 311 S.W.3d 752, 764
(Mo. banc 2010). Here, the record shows that the Commission admitted the three documents
under Section 490.065(3), RSMo (2016), because they served as the basis for the experts’
opinion testimony.
With respect to the first document, the U.S. Department of Energy’s wind speed map
attached to the testimony of Michael Goggin (“Goggin”) was not relied upon by the Commission
in reaching its decision. Instead, the wind speed map provided the basis for Goggin’s expert
opinion that Kansas has 952,371 megawatts of developable wind energy resources. MLA did not
object that the map was not of the type reasonably relied upon or that it was otherwise unreliable.
Section 490.065.3.
With respect to the second document, the wind speed map attached to the testimony of
Grain Belt’s witness, David Berry (“Berry”), was also properly admitted under Section
490.065.3. Berry testified that the wind speed map was “prepared by the National Renewable
Energy Laboratory, a federal research laboratory that operates under the direction of the U.S.
Department of Energy, and AWS Truepower, a leading meteorology firm.” Relying partly on
the wind speed map, Berry explained generating wind power in western Kansas is affordable
because it “has some of the highest wind speeds in the country.” The Commission accepted
12 Berry’s testimony about the economic feasibility of producing inexpensive wind energy in
western Kansas, noting the wind speeds only as background for Berry’s ultimate opinion. As
with the wind map relied on by Goggin, MLA made no objection that the wind speed map relied
on by Berry is not the type of information reasonably relied on in forming opinions, or that it was
otherwise unreliable. Section 490.065.3.
Finally, with respect to the third document, the Loomis study, MLA’s arguments also
fail. The expert witness for the Missouri Department of Economic Development, Alan Spell
(“Spell”), testified that he used the Loomis study to estimate direct construction spending in
order to estimate the economic impacts of the Grain Belt project. As with the wind speed
studies, the Commission did not rely on the Loomis Study as independent substantive evidence;
it merely served as background for Spell’s opinion regarding the economic benefits of the Grain
Belt project to the State of Missouri. MLA made no objection that the Loomis study was not of
the type reasonably relied on in forming opinions about the economic impact of construction
projects, nor did MLA object that the Loomis study was otherwise unreliable. Moreover, as with
the wind speed maps, the Loomis study was not the only basis for Spell’s economic impact
analysis.
In all, the witnesses above provided testimony based on documents that were the type of
studies reasonably relied on in forming their opinions, and were otherwise reasonably reliable.
MLA has not challenged this fact. Under Sections 386.510 and 386.430, therefore, MLA has
failed to meet its obligation to show by clear and satisfactory evidence that the Commission’s
report and order was not based on competent and substantial evidence on the whole record.
Finally, contrary to MLA’s contention, the Commission did not err in denying MLA
access during discovery to Grain Belt’s “confidential” documents regarding Grain Belt’s ability
13 to supply low cost energy from the wind farms in western Kansas. At issue is Berry’s testimony
that “[t]he lowest-priced 4,000 [megawatts] [the approximate capacity of the proposed line] of
new wind generation was an average of 2.0 centers per kWh flat for 25 years.”13 Grain Belt
provided over 260 pages of documents to MLA in response to Grain Belt’s claim regarding the
price at which power could be purchased from its line. Moreover, MLA conducted extensive
cross-examination of Berry regarding his calculation and the Commission did not limit MLA’s
cross-examination of Berry in the evidentiary hearing.
Here, the Commission denied MLA’s motion to compel discovery because it found
MLA’s request for additional information was not designed to lead to the discovery of
admissible evidence, where the probative value of the information MLA sought was outweighed
by its prejudicial effect. The Commission noted that MLA’s data requests sought information
regarding responses provided to Grain Belt from potential wind farm generators pursuant to a
request for information (“RFI”) as well as identification of the wind generators it used to
calculate the lowest-priced cost of energy mentioned in the direct testimony of Berry. The
Commission noted that Grain Belt provided considerable information in response to MLA’s data
requests that would permit MLA to develop close estimates of the wind speed and pricing
information necessary to verify or challenge Grain Belt’s energy cost estimates. The
Commission concluded that, “[t]he balancing test for legal relevance indicates that the value of
this additional information is outweighed by the prejudicial effects to Grain Belt . . . and the
wind farm generators that responded to the RFI.” Based on our review of the record, the
Commission lawfully and reasonably found the documents requested by MLA to be proprietary
and protected from its discovery request. See State ex rel. Utility Consumers Council v. Public
13 Additionally, we note that the Commission did not rely on the testimony challenged in this point in its report and order.
14 Service Commission, 562 S.W.2d 688, 696-97 (Mo. App. E.D. 1978) (affirming Commission’s
order as lawful and reasonable because other evidence was available to the appellant that
provided the same opportunity to challenge the company’s case). For the reasons herein
explained, Points I, II, and III are denied.
Definition of “Electrical Corporation”
In its sole point on appeal, Farm Bureau argues that the Commission erred in granting
Grain Belt a CCN because the Commission lacks the statutory authority to issue such a CCN, in
that Grain Belt does not meet the statutory definition of “electrical corporation” or a public
utility providing a public use or service as required by Section 393.170.1. We disagree.
Under Section 393.170.1, “No … electrical corporation … shall begin construction of
a[n] … electric plant … without first having obtained the permission and approval of the
commission.” Section 393.170.1. Electrical corporation is defined as “…every corporation, [or]
company…owning, operating, controlling or managing any electric plant…” Section
386.020(15). Electric plant is defined as “all real estate, fixtures, and personal property…used or
to be used for or in connection with or to facilitate the…transmission…of electricity for…
power…” Section 386.020(14) [Emphasis added.] The word “used” indicates current use, while
the phrase “to be used” indicates future use. The idea that property “to be used” indicates future
use is further reflected in the requirement that authority to begin construction of electric plant be
exercised “within a period of two years from the grant thereof.” Section 393.170.3.
Here, the proposed Grain Belt transmission line and converter station fall squarely within
the definition of “electric plant” under Section 386.020(14) because they are examples of
“fixtures” and/or “personal property.” Furthermore, Grain Belt’s 39 transmission line easements
with Missouri landowner are on “real estate … to be used” for or in connection with transmission
15 of electrical energy. That personal property and real estate therefore fall under the definition of
“electric plant.” Section 386.020(14).
Also, consistent with Section 386.020(15), Grain Belt is “controlling” the real estate on
its 39 transmission line easements because under its easement agreements, Grain Belt has the
right to “construct, operate, repair, maintain, and remove an overhead transmission line and
related facilities, along with rights of access to the right-of-way for the transmission line.” In
other words, the easement agreements limit the landowners’ legal rights and land use, “including
prohibiting any landowner activity that would interfere with Grain Belt’s use of the easement” or
would interfere with future development of the transmission line. Therefore, Grain Belt is an
“electric corporation” that is required to file a CCN before it can begin construction of its project
across Missouri.
Additionally, Grain Belt currently owns cash on hand. Grain Belt’s cash on hand falls
within the definition of “electric plant” because it is “personal property … to be used… in
connection with or to facilitate the … transmission … of electricity” and because Grain Belt will
use its cash on hand to construct its transmission line and converter station. Section 386.020(14).
Therefore, Grain Belt is an electrical corporation within the meaning of Section 386.020(15), and
it is subject to the jurisdiction of the Commission.
Regarding “public utility,” the relevant statutory definitions contain no explicit
requirement that an entity be operated for a public use in order for it to constitute a public utility.
However, Missouri courts have held that such a “public use” requirement was intended:
While the definitions quoted supra [of “electric plant” and “electrical corporation,” found now at Sections 386.020(11) and (12),] express therein no word of public use, or necessity that the sale of the electricity be to the public, it is apparent that the words “for public use” are to be understood and to be read therein. For the operation of the electric plant must of necessity be for a public use, and therefore be coupled with a public interest; otherwise the Commission
16 can have no authority whatever over it. The electric plant must, in short, be devoted to a public use before it is subject to public regulation.
State ex rel. M.O. Danciger & Co. v. Pub. Serv. Comm’n, 275 Mo. 483, 205 S.W. 36, 38 (1918);
see also Osage Water Co. v. Miller County Water Auth., Inc., 950 S.W.2d 569, 574 (Mo. App.
S.D.1997) (facilities must be “devoted to a public use before [they are] subject to public
regulation”); Khulusi v. Southwestern Bell Yellow Pages, Inc., 916 S.W.2d 227, 232 (Mo. App.
W.D. 1995).
Here, the evidence showed that when the Grain Belt project is constructed and begins
operation, it will transmit energy from wind farms in Kansas to wholesale customers in Missouri.
In the case of MJMEUC, those customers are Missouri cities and towns that serve as electric
providers to approximately 347,000 Missouri citizens. An entity, such as Grain Belt, that
constructs and operates a transmission line bringing electrical energy from electrical power
generators to public utilities that serve consumers is a necessary and important link in the
distribution of electricity and qualifies as a public utility. State ex. Rel. Buchanan County Power
Transmission Co. v. Baker, 320 Mo. 1146, 9 S.W.3d 589 (Mo. 1928). Therefore, Grain Belt’s
project will serve the public use, and Grain Belt qualifies as a public utility.
Farm Bureau contends that Grain Belt is not subject to the Commission’s jurisdiction
because it will be engaged in the interstate transmission of electricity and the Commission’s
authority does not apply to interstate commerce, except insofar as the same may be permitted
under the provisions of the Constitution of the United States and the acts of Congress. Sections
386.250(1) and Section 386.030. Farm Bureau further contends that the Commission does not
have jurisdiction because Grain Belt will only provide wholesale transmission service in
Missouri, not retail service, and those customers may pay different rates for capacity, as Grain
17 Belt will be subject to regulation by the Federal Energy Regulatory Commission (“FERC”) and
not subject to rate regulation by this Commission.14
Here, as the Commission correctly argues, its authority to grant a CCN for construction
of transmission lines is established under Section 393.170.1, and is not preempted by federal law.
Only its authority to regulate the rates of wholesale interstate transmission service is preempted
by federal law. The evidence showed that Grain Belt will offer indiscriminate transmission
service through an open access transmission tariff that will be filed and subject to the jurisdiction
of the FERC. Therefore, the fact that FERC regulates wholesale electric rates does not mean that
this Commission lacks the authority to issue a CCN for construction of the Grain Belt Project.
Moreover, the states are granted authority to regulate other matters not specifically
granted to the federal government. Here, the jurisdiction of the Commission extends “[t]o the
manufacture, sale or distribution of … electricity for light, heat and power, within the state, and
to persons or corporations owning, leasing, operating or controlling the same; and to … electric
plants, and to persons or corporations owning, leasing, operating or controlling the same.”
Section 386.250(1). Therefore, the Commission’s authority does not apply to interstate
commerce, except insofar as the same may be permitted under the provisions of the Constitution
of the United States and the acts of Congress. Section 386.030. Since the Grain Belt Project will
transmit energy to a converter station located in Missouri to provide that energy to Missouri
citizens, neither FERC regulations nor Sections 386.250(1) and 386.030, operate to deprive this
Commission of the jurisdiction to decide this CCN case. 14 The Federal Power Act permits the FERC to set interstate wholesale transmission rates either by tariff or with individual electricity purchasers through bilateral contracts. Morgan Stanley Capital Group, Inc. v. Pub. Util. Dist. No. 1 of Snohomish County, 554 U.S. 527, 530 (2008). Rates set by tariffs and negotiated contract are both subject to the same “just and reasonable” standard under the Federal Power Act. Id. FERC can, in response to a complaint or on its own motion, determine that a negotiated rate is not just and reasonable and replace it with a lawful rate. Id.
18 Finally, we note that in remanding this case back to the Commission, the Missouri
Supreme Court expressly indicated that the Grain Belt project was “an interstate transmission
line,” but it was for the Commission to determine if the Grain Belt project met the criteria for
granting a CCN, thereby suggesting that the Commission indeed has the authority to issue, if it so
decides, a CCN in this case. Grain Belt Express Clean Line, LLC, 555 S.W.3d at 471, 474.
For all the reasons stated herein, the Commission has the legal authority to issue a CCN
to Grain Belt for the construction of the Grain Belt project. Point denied.
Conclusion
We affirm the Commission’s report and order.
____________________________ Honorable Mary K. Hoff
Sherri B. Sullivan, Judge and Angela T. Quigless, Judge: Concur