_____________________________________________________________________________ 201 6 IL App ( 3d ) 150099

Opinion filed August 10, 2016

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

2016

ILLINOIS LANDOWNERS ALLIANCE

, ) Petition s for Review of Order NFP
, ) of the Illinois Commerce ) Commission , No. 12-0560. Petitioner

, ) )

v. ) ) Appeal No s. 3-15-0099, 3-15-0103 & THE ILLINOIS COMMERCE COMMISSION ; ) 3-15-0104 C OMMONWEALTH EDISON C O MPANY ; ) I NTERNATIONAL BROTHERHOOD OF ) ELECTRICAL WORKERS

, AFL

- CIO ) LOCAL UNIONS 51, 9, 145 & 196; ILLINOIS ) A GRICULTURAL ASSOC IATION a/k/a ) Illinois Farm Bureau; WIND ON THE WIRES ; ) ENVIRONMENTAL LAW AND POLICY ) CENTER ; NATURAL RESOURCES ) DEFENSE COUNCIL ; BUILDING OWNERS ) AND MANAGERS ASSOCIATION OF ) CHICAGO ; DYNEGY MIDWEST ) GENERATION, LLC ; DYNEGY KENDALL ) ENERGY, LLC ; AMEREN TRANSMISSION ) CO MPANY OF ILLINOIS ; MIDWEST ) G ENERATION, LLC ; JOHN L. CANTLIN ; ) and J OSEPH H. CANTLIN

, ) ) Respondents. ) _______________________________________) ) ILLINOIS AGRICULTURAL ASSOCIATION ) a/k/a Illinois Farm Bureau

, ) ) Petitioner, ) )

v. )) THE ILLINOIS COMMERCE COMMISSION; ) ROCK ISLAND CLEAN LI NE, LLC; ) COMMONWEALTH EDISON CO MPANY ; ) INTERNATIONAL BROTHE RHOOD OF ) ELECTRICAL WORKERS, AFL

- CIO ) LOCAL UNIONS 51, 9, 145 & 196; ) ILLINOIS LANDOWNERS ALLIANCE , ) NFP ; WIND ON THE WIRES; ) ENVIRONMENTAL LAW AND POLICY ) CENTER; NATURAL RESOURCES ) DEFENSE COUNCIL; BUI LDING OWNERS ) AND MANAGERS ASSOCIATION OF ) CHICAGO; DYNEGY MIDWEST ) GENERATION, LLC; DYNEGY KENDALL ) ENERGY, LLC; AMEREN TRANSMISSION ) COMPANY OF ILLINOIS; MIDWEST ) GENERATION, LLC; JOH N L. CANTLIN; ) J OSEPH H. CANTLIN ; TIMOTHY B. ) CANTLIN; FRIESLAND FARMS, LLC ; ) LARRY GERDES; STEVEN GERDES; ) JASON D. JAMES; JAME S BEDEKER; ) SALLY BEDEKER; and FIRST MIDWEST ) BANK TRUST #6243

, ) ) Respondents. ) _______________________________________) ) COMMONWEA L TH EDISON COMPANY , ) ) Petitioner, ) )

v. ) ) THE ILLINOIS COMMERCE COMMISSION; ) ROCK ISLAND CLEAN LI NE, LLC ; ) INTERNATIONAL BROTHERHOOD OF ) ELECTRICAL WORKERS, AFL

- CIO ) LOCAL UNION S 51, 9, 145 & 196; I LLINOIS ) AGRICULTURAL ASSOCIATION a/k/a ) Illinois Farm Bureau ; WIND ON THE WIRES; ) ENVIRONMENTAL LAW AND POLICY ) CENTER; NATURAL RESOURCES ) DEFENSE COUNCIL; BUILDING OW NERS ) AND MANAGERS ASSOCIATION OF ) CHICAGO; DYNEGY MIDWEST ) GENERATION, LLC; DYN EGY KENDALL )

2______________________________________________________________________________

_____________________________________________________________________________ ENERGY, LLC; AMEREN TRANSMISSION ) COMPANY OF ILLINOIS; MIDWEST ) GENERATION, LLC; ILLINOIS LAND ) OWNERS ALLIANCE, NFP ; JOHN L. ) CANTLIN; JOSEPH H. CANTLIN ; ) TIMOTHY B. CANTLIN; FRIESLAND ) FARMS, LLC; LARRY GE RDES ; STEVEN ) GERDES; JASON D. JAM ES; JAMES ) BEDEKER; SALLY BEDEK ER; AND FIRST ) MIDWEST BANK TRUST #6243, ) ) ) ) Respondents

. )

JUSTICE LYTTON delivered the judgment of the court, with opinion. Justice s Carter and Wright concurred in the judgment and opinion.

O PINION

¶ 1 Illinois Landowners Alliance (ILA), Illinois Agricultural Association also known as

Illinois Farm Bureau (IAA), and Commonwealth Edison Company (Com Ed) petition this court

for review of an o rder of the Illinois Commerce Commission (Commission) allowing Rock

Island Clean Line, LLC (Rock Island) to operate as a public utility under the Public Utilities Act

(Act) (220 ILCS 5/1 -101 e t seq. (West 2012)) and granti ng the company a certificate of public

convenience and necessity to construct, operate

, and maintain a high voltage electric

transmission line across several counties in Illinois

. On appeal, petitioners a rgue that (1) the

application should have been dismissed as a matter of law because Rock Island is not a public

utility and (2) the Commission ’ s findings in favor of a certificate of public convenience and

necessity (CPCN) w ere not supported by substantial evidence. We reverse the Com mission ’ s
order granting the certificate and remand for further proceedings.

3¶ 2 BACKGROUND

¶ 3 Rock Island is a subsidiary of Clean Line Energy Partners LLC (Clean Line) , a
transmission energy development company , with its principal offices in Houston, Texas

. In

addition to Rock Island, C lean Line owns four other companies that are developing long -distance

transmission projects across the northe rn states. Clean Line is owned in part by Grid America

Holdings, Inc.

, which is owned by National Grid USA, a business that owns and operates more

than 8 600 miles of high voltage transmission facilities in the United States

.
¶ 4 Rock Island was formed to construct and manage an electric transmission line project that

would run from O ’ Brien County in northwest Iowa to Grundy County in northeast Illinois. The

primary purpose of the project is to connect wind generation facilities in northwest Iowa, South

Dakota, Nebraska

, and Minnesota with electricity markets on the PJM Interconnection grid. PJM

is a regional transmi ssion organization that coordinates the movement of wholesale electricity to

markets in Illinois, Indiana, Michigan, Ohio, Kentucky, the District of Columbia

, and eight other

states in the northeast.

¶ 5 The proposed line would span 379 miles through Iowa t o the Mississippi R iver, crossing

the river in Princeton, Iowa, and entering Illinois near Cordova, Illinois

. It would then extend

approximately 121 miles in Illinois to a Com Ed substation i n Grundy County (Collins

substation).

¶ 6 In preparation for the pr oject, Rock Island filed an application with the Commission for a

certificate of public convenience and necessity under section 8-4 06 of the Act (220 ILCS 5/8

­
406(a), (b) (West 2012)) authorizing it to operate as a transmission -only public utility in Illin ois

and to construct, operate

, and maintain an electric transmission line for wind energy. In its

application , Rock Island stated that the development of additional transmission infrastructure is

critical to our nation ’ s ability to utilize its wind resources to meet the demand for electricity from

4renewable sources. Rock Island further claimed that although w ind energy generates an

alternating electrical current (AC)

, it is more cost effective to transmit the energy usin g a direct

current (DC) transmission line.

¶ 7 According to the proposed plan, t he Rock Island project would construct a high voltage

direct current (HVDC) electric transmission line from Iowa to Illinois

. The line would convert

AC w ind energy to DC electricity at a converter station in O ’ Brien County, Iowa

. From there,

the high voltage current would travel 500 miles to a DC

- to

- AC converter station in Grundy

County , Illinois

. The proposal stated that Rock Island w ould then run an AC transmission line a

few miles to the Collins s ubstation, where the electricity w ould be delivered into the PJM grid.

The application set forth a proposed route for the line but did not seek the right of eminent

domain.

¶ 8 Rock Island stated that t he project has a capacity of 3500 megawatts and is able to

connect up to 4000 megawatts of generating capacity in the resource area in Iowa to northern

Illinois. At that rate, it will deliver 15 million megawatt

- hours of electricity annual ly , enough to

power 1.4 million homes.

¶ 9 Rock Island ’ s application and supporting materials outlined a plan for raising the capital

necessary to finance construction at an unspecified future date on a “ project financing basis. ”

Rock Island emphasized that it was a “ merchant developer ”— not a tradi tional utility with cost

based rates

— and claimed that Illinois residents would no t pay for the line through rate

assessments

. It does not plan to seek cost re co very through the electric rates paid by consumers

in Illinois. Instead, it indicated that its ra tes will be regulated by the Federal Energy Regulatory

Commission (FERC) and that the project w ill pay for itself through the revenues it receives from

anticipated purchase agreements with wind generators

. Rock Island stated that it plan s to enter

into lon g- term financing agreement s with one or more wind generators , or “ anchor tenants ,” in

5the resource area (northwest Iowa) and then attract lender s using the anchor tenant agreements as

collateral. The financing plan included in the application did not ident ify a ny current anchor

tenants or lenders.

¶ 10 Numerous parties sought and were granted leave to intervene, including ILA, IAA, Com

Ed

, local unions of the International Brotherhood of Electrical Workers , W ind on the Wires, and

various private landowners. Commission staff members also participated in the application

process by presenting evaluations, reports, and recommendations to the Commission.

¶ 11 Initially, IAA and ILA filed motions to dismiss, arguing that Rock Island was not a

public utility under section 3

- 105 of the Act because it d id not own infrastructure for electric

transmission in Illinois. The intervenors argued that 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. They maintained t hat becaus e Rock Island was not a public

utility , it could not be granted a certificate of public convenience and necessity under the Act

.
¶ 12 The Commission ’ s a dministrative l aw j udge (ALJ) denied both motions

. The ALJ ruled

that the application process under section 8 -406 of the Act is not limited to entities that are

already certified public utilities and concluded that Rock Island could apply for public utility

status and seek certificatio n to c onstruct and manage a transmission facility at the same time

.
¶ 13 At the evidentiary hearing on the application, witnesses for Rock Island testified that its

objective in constructing the project is to provide a direct transmission link for wind generating

plants that will be built in the Iowa resource area and to transport th at output to electricity

markets in Illinois. According to Rock Island , t he demand for electricity from renewable

resources in Illinois and surrounding states will remain high for years to come due to state

renewable portfolio standards requirements imposed by recent legislation

. These state -imposed

6mandates require utilities to replace energy generated by fossil fuels with renewable energy , and

at least 75% of that renewable energy must come from wind power.

¶ 14 David Berry , v ice p resident of s trategy and f inance for Clean Line, characterized the

proposed transmission line as a “ merchant project ” beca use Rock Island is assum ing t he market

ri s k of the project. Rock Island does not have a process t o recover i t s costs from ratepayers and

therefore must sell cap a city through negotiated contracts. Berry testified that the FERC

approved Rock Island ’ s proposal to presubscribe up to 75% of its t ransmission capacity to

anchor tenants and sell the remaining 25% of the line ’ s capacity to other generators

. Rock Island

would market its excess capacity using a bidding process, otherwise known as “ open season ”

bidding, in which Rock Island would offer services t o other wind generator customers along the

line

. According to Berry ’ s testimony , the FERC order require s Rock Island to provide

standardized generator interconnection service to any generator that request s to connect through

the bidding process, subject to an open access transmission tariff administered by PJM.

¶ 15 Berry further testified that developers will not invest capital in the construction of

additional wind generation facilities in the resource area without reasonable assurance of

adequate transmission capacity and infrastructure to deliver the energy to population centers such

as northern Illinois. He stated that while it is theoretically possible to move power from the

resource area to northern I llinois using existing 345 -kilovolt lines, it would entail substantially

higher losses as compared to using the proposed HVDC transmission lines.

¶ 16 Rock Island admitted that the wind generators used in its energy and financial simulation

models are based o n predictions and do not yet exist. Current l y, Rock Island does not have any

transmission customers ; t he only way it could serve a customer is by building the project.

¶ 17 Rock Island witnesses further testified that the project will cost approximately $1.8

billion to construct, operate

, and maintain. A s of December 2013, shareholders h ad committed

7approximately $95 million of equity to Clean Line , with approximately $21.6 million specifically

invested in the Rock Island project. Rock Island currently possesses an option to purchase real

property in Grundy County, Illinois, upon which it intends to construct a converter station next to

the C ollins substation.

¶ 18 On cross -examination, Michael Skelly, the president of Rock Island and Clean Line

,

testified th at on the date the application was filed, Rock Island did not own, control, operate , or
manage any transmission plants, equipment

, or property in Illinois

. He also stated that as of the

date of his testimony , Rock Island still did not own property in Illinois.

¶ 19 Paul Marshall, an ILA board member, testified that I LA is a not -for- profit entity

composed of approximately 300 members who own or have an interest in land impacted by the

path of the transmission line. According to his testimony, roughly 100,000 a cres of land fall on
or along the proposed project route.

¶ 20 Dr. Jeffrey Gray , a federal electricity regulation and policies expert , performed an

economic analysis for ILA

. He testified that Rock Island “ might be able to demonstrate need if it

could show that the project is adequately subscribed. ” He noted that, until then, the demand or

need for the project is “ speculative.” Gray explained that the electric industry has a structured

wholesale marketing system that us es regional transmission organizations like PJM to collect the

electricity generated in a region and distribute it to consumers, particularly those in need of

renewable energy credits

. In this case, Rock Island would use the transmission line to “ship”

renewable energy create d by the wind gener ators to the PJM grid. Gray noted that the Rock

Island project is not currently included in the PJM regional transmission plan because none of

the project ’ s capacity has been contracted and no potential generator s have obtained rights to buy

service on the line

.

8¶ 21 Gray further testified that the impact of the project is unknown because Rock Island ha s

not addressed the costs of negative land use impacts and has assumed traits and characteristics

about connect ing generators that cannot be substantiated becau se the generators have yet to be

built. He opined that the financial aspects of the project le ave open the possibility of switching

the project from “ merchant ” status to “ cost

- allocation ” status and allocating future transmission

costs of unknown amounts to Illinois electricity customers.

¶ 22 Steven Naumann, a ComEd witness , testified that the impact of the project on

competition was unknown because the project was not sufficiently developed and had to o many

un certain factors. He noted that while Rock Island stated that it has no current plans to request

that the project be cost

- allocated, the company d oes not explicitly rule out making such a future

request.

¶ 23 Commission s taff economist

, Richard Zuras ki, noted that a competitive electricity market

already exists in Illinois and stated in his report that the proposed project was unnecessary. He

further noted that the determination of whether the proposed project would promote the

development of an effec tively competitive electricity market was “ subject to considerable

uncertainty. ” Zuraski opined that Rock Island failed to demonstrate that the purported benefits of

the project would outweigh its costs. He reported that, based on his model analysis, the economic

benefit to Illinois electricity consumers was also subject to “ considerable uncertainty. ” Zuraski

stated that he was concerned that if the project failed to be successful in the competitive market,

Rock Island would look to the Commission to get th e project “ back on its feet, ” a request that

could end up costing ratepayers more money. He opined that, based on the project ’ s financial

uncertainty, it was an overstatement to say that there was no risk to Illinois ratepayers. Zura sk i’s

concerns led Commission s taff to conclude that Rock Island had not met its burden to show that

the proposed project would promote development of an effectively competitive market that

9operates efficiently, is equitable to all customers, and is the least cost means of satisfying the

objectives.

¶ 24 The s taff report also noted that if and when th e project becomes subject to a F ERC open

access transmission tariff requiring the provision of nondiscriminatory open access, the project ’ s
limited capacity will still prevent Rock Island from providing access to all eligible customers.

Staff concluded that Rock Island “ is asking the Commission to *** grant it a CPCN so it looks

like a ‘ public utility ’ for purposes of condemning private property to build its line, while at the

same time it plans to offer only a token percentage o f that line ’ s capacity for ‘public use.’ ”

¶ 25 In an attempt to address the financial concerns raised in its report, the Commission s taff

suggested several conditions, including that Rock Island “ will not install transmission facilities

*** on easement property until such time as Rock Island has obtained commitments for funds in

a total amount equal to or greater than the total project cost. ”

¶ 26 The Commission issued a 242

- page order granting Rock Island a certificate of public

convenience and necessity to transact business as a transmission public utility and to construct,

operate , and maintain the proposed transmission line over the preferred route described in the

application. In its order, the C ommission agreed with the ALJ ’ s determination that Rock Island

met the qualifications of a public utility and satisfied the public use requirement under section 3

­

105 (a) of the Act. The Commission stated that, based on the information in the record, it seemed

likely that the line would be used primarily, if not entirely, for delivery of wind energy from

O’Brien County , Iowa, to the Collins substation in Illinois and that it was “ reasonable to assume ”

potential users would include transmission customers who purchased capacity for delivery of

electricity to northern Illinois.

¶ 27 Th e C ommission also determine d that the proposed project would promote public

convenience and necessity under the Act

. The Commission found that although Rock Island

10failed to demons trate that the project was necessary to provide adequate, reliable

, and efficient

service to customer s , it had presented sufficient evidence to demonstrate that the proposed line

“ 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

. ” See 220 ILCS 5/8-406(b)(1) (West 2012).

¶ 28 In reaching its decision, the Commission noted that Rock Island ’ s financial resources

were insufficient to finance the project ’ s construction but concluded that Rock Island could

satisfy the financing requirement based on financing conditions proposed by Commission S taff

.
In accordance with those conditions, t he order required Rock Island to sub mit documents to the

S taff demonstrating that it had obtained the necessary financial commitments and to file

compliance documents with the Commission before beginning construction on easement

properties.

¶ 29 ILA, IAA

, and Com Ed filed applications for rehearing, and the Commission denied their

requests. All three parties filed separate p etitions with this court

, challenging the Commission ’ s

decision. We consolidated their petitions for review.

¶ 30 ANALYSIS

¶ 31 Petitioners challenge the Commission ’ s order on two grounds: (1) that the Commission

lacked authority to grant a certificate of public convenience and necessity b ecause Rock Island is

not a public utility ; and (2) that the findings of the Commission are not supported by substantial

evidence. Our reso lution of the first issue is dispositive.

¶ 32 I. Standard of Review

11¶ 33 On appeal, a reviewing court must reverse the Commission ’ s decision if it finds that (1)

the findings of the Commission are not supported by substantial evidence

, (2) the Commission

lacked jurisdiction to enter the order or decision

, (3) the order or decision is in violation of the

s tate or federal constitution or laws

, or (4) the proceedings violated the appellant ’ s constitutional

rights. 220 ILCS 5/10- 201(e)(iv) (West 2012).

¶ 34 The s tandard of review of the Commission ’ s findings of fact is deferential. Orders of the

Commission are deemed prima facie reasonable, and the Commission ’ s findings of fact are

deemed prima facie true. 220 ILCS 5/10

- 201(d) (West 2012). The Commission ’ s finding s of fact

may only be overturned if they are against the manifest weight of the evidence. Apple Canyon

Lake Property Owners ’ Ass ’n v. Illinois Commerce Comm’n , 2013 IL App (3d) 100832, ¶ 57.

¶ 35 The Commission ’ s interpretation of statutory standards is also entitled to deference;

however, reviewing courts are not bound by its interpretation of law. Citizens Utility Board v.

Illinois Commerce Comm ’n , 166 Ill. 2d 111, 121 (1995). The Commission ’ s interpretation of a

statute is reviewed de novo

. Commonwealth Edison Co. v. Illinois Commerce Comm ’n , 398 Ill.

App. 3d 510, 522 (2009). Where governing statutory language is clear and unambiguous, it must

be applied as written, and there is no need to resort to extrinsic aids. Illinois Bell Telephone Co

.

v. Illinois Commerce Comm ’n , 362 Ill. App. 3d 652, 657 (2005). Courts will not defer to an

agency ’ s construction where the statute is clear because “ an interpretation placed upon a statute

by an administrative official cannot alter its plain language. ” Burlington Northern, Inc. v.

Department of Revenue , 32 Ill. App. 3d 166, 174 (1975).

12 ¶ 36 II. The Commission ’s Authority to Grant a CPCN¶ 37 The Illinois Commerce Commission was statutorily created to exercise general

supervision over all Illinois public utilities in ac cordance with the provisions of the Public

Utilities Act. 220 ILCS 5/4

- 101 (West 2012). Under the Act

, a public utility must obtain a

certificate of public convenience and necessity from the Commission before transacting any

business or constructing a high

- voltage transmission line

. 220 ILCS 5/8

- 406(a), (b) (West 2012).

The Commission derives its authority to supervise public utilities and issue certificates of public

convenience and necessity solely from the statute creating it and may not, by its own

inte rpretation, extend its jurisdiction. Sheffler v. Commonwealth Edison Co. , 39 9 Ill. App. 3d 51

,
60 (2010). T he Commission ’ s jurisdiction must be found, if at all, in it s power to regulate public

utilities. Peoples Energy Corp. v. Illinois Commerce Comm’n , 142 Ill. App. 3d 917, 924 (1986).

13 ¶ 38 A. Public Utility Status

¶ 39 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

. See 220 ILCS 5/3-105(a) , 5/8

- 406(a), (b) (West 2012)

. Section 3 -105 of the Act

defines a “ public utilit y” 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)(1) (West 2012).¶ 40 A n applicant does not satisfy the statutory qualifications of a public utility si mply

because it sells something ordinarily sold by a public utility

, such as heat, power, water , or
electricity. Mississippi River Fuel Corp. v. I llinois Commerce Comm’n , 1 Ill. 2d 509, 516 (1953).

A public utility also must provide its product or service “ for public use,” carrying with it the duty

of the producer or manufacturer to serve the public and treat all persons alike, without

discrimination. Id . “ The use must concern the public as distinguished from an individual or any

particular number of individuals, but the use and enjoyment of the utility need not extend to the

whole public or political subdivision. ” Palmyra Telephone Co. v. Modesto Telephone Co. , 336

Ill. 158, 164 (1929). A private company that provides public utility services according to its own

terms and conditions does not meet t he statutory definition of a public utility. See Highland

Dairy Farms Co. v. Helvetia Milk Condensing Co , 308 Ill. 294, 301 (1923) (company that

constructed water plants and furnished water to select members of the community “ according to

[its] own wishes ” was not a public utility ).

¶ 41 According to these principles, there are essentially two prongs to attaining public utility

status : (1) a company must own, control, operate, or manage utility assets , directly or indirectly,

within the State; and (2) it must offer those assets for public use without discrimination

. See

Miss issippi River Fuel Corp. , 1 Ill. 2d at 516-19. Based on its application and the evidence

presented to the Commission, Rock Island failed to meet both requirements.

14 ¶ 42 1 . Assets Within the State

¶ 43 Rock Island does not own, control, operate , or manage ass ets within the State

. In

testimony before the Commission, Rock Island admitted that the project was in the planning

stages and that it would only pursue construction if the company determined that it would be

profitable in light of future market developments and financial support. Rock Island currentlydoes not own any transmission assets in Illinois, nor does it have any agreements for service with

renewable energy generators in this state. While the potential may exist for generators to

purchase service on the line, n o Illinois generators have agreed to use the pro posed line.

¶ 44 2 . Public Use Without Discrimination

¶ 45 In addition, the proposed transmission line is not for public use without discrimination

. In

Mississippi River Fuel Corp.

, a fuel supply company , Mississippi River Fuel, sold natural gas in

Illinois through individual fuel contracts with 23 private industrial retail customers. It also sold

natural gas to Illinois Power and Light Company and Union Electric Power Company for resale

to the general public. Mississippi River Fuel Corp.

, 1 Ill. 2d at 512. Although Mississippi had

facilities and customers in Illinois, our su preme c ourt affirmed the circuit court ’ s conclusion that

it was not a public utility because Mississippi River Fuel did not devote its services to “public

use.” Id. at 513

. In reaching its decision, the court noted that Mississippi River Fuel ’s contracts

with industrial retail customers were not based on fixed rates, that they varied as to terms and

conditions, and that they were only offered to select customers. T he court found that t he interest

of the general public was in obtaining an adequate supply of gas at reasonable prices fr o m the

public utility to which the company sup plie d natural gas for resale , not Mississippi River Fuel

.

Id . at 518 -19. It concluded that , under such circumstances

, the company ’s act of selling gas to a

limited group of industrial customers could not be characterized as “ public use. ” Id. at 519.

¶ 46 Similarly, Rock Island ’ s plan does not devote assets for public use in Illinois without

discrimination

. The anchor tenants, who will use a majority of Rock Island ’ s transmission

capacity, are wind generators in the resource area of northwest Iowa, South Dakota, Nebraska

,

and Minnesota

. According to Rock Island, 75% of the project ’ s capacity will be sold to

generators in the resource area , who will then use the transmission line to deliver their product to

15the PJ M grid

. PJM will then distribute the renewable energy electricity to members of its

multistate regional transmission organization. The remaining 25% will be sold to those seeking

transmission services through an “open season ” bidding process approved by the FERC

. The

FERC order approving the sale of excess cap aci ty does not mandate th at an Illinois wind

generator or other renewable energy generator participate in the bidding process

. But if it did,

there is no way to know whether an Illinois energy generator will submit a successful bid

. Moreover, the project does not designate any p a rt of the renewable energy transmitted along the

proposed line for public use in Illinois. Thus, it fails to satisfy the statute ’ s public use

requirement.

¶ 47 Based on its application and supporting documentation, Rock Island has not attained

public utility status within the meaning of the Public Utilities Act

. Because Rock Island is not a

public utility

, the Commission lacked authority t o issue a certificate of public convenience and

neces sity under section 8-406(b) of the Act

. See Peoples Energy Corp. , 142 Ill. App. 3d at 924.

¶ 48 B. Public Utility Status as Applied to Section 8 -406

¶ 49 In reaching our conclusion, we acknowledge the Commission’ s position that public utility

status is not a prerequisite to seeking a certificate of public convenience and necessity under

section s 8-406(a) and (b)

. The Act does not require an applicant to be a public utility before it

seeks certification under the appropriate provisions

. A plain reading of the statute shows that an

applicant may seek public utility status while, at the same time, applying for a certificate of

public convenience and necessity to transact business and construct facilities

. See 220 ILCS 5/8­

406 (a), (b) (West 2012). In this case, t he issue is whether jurisdiction was properly conferred

based on the Commission ’ s decision that R ock Island was a public utility. We conclude that it

was not.

16¶ 50 III. The Commission ’s Findings

¶ 51 The petitioners also claim that the Commission ’ s decision should be reversed because its

findings are not supported by substantial evidence. We need not address this issue in light of our

determination that t he Commission lack ed authority to issue a certif icate of public convenience

and necessity

.

17 ¶ 52 CONCLUSION

¶ 53 W e reverse the order of the Illinois Commerce Commission

, granting a certificate of

public convenience and necessity

, and remand th e cause to the Commission with directions to

enter an order consistent with this decision.

¶ 54 Reversed; cause remanded

.