S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of Michigan ) Electric Transmission Company, LLC for ) Case No. U-17041 a certificate of public convenience and ) necessity for the construction of a transmission) line in Almena Township, Van Buren County, ) and Oshtemo Township, Kalamazoo County, ) Michigan. )

NOTICE OF PROPOSAL FOR DECISION

The attached Proposal for Decision is being issued and served on all parties of

record in the above matter on April 29, 2013.

Exceptions, if any, must be filed with the Michigan Public Service Commission,

4300 West Saginaw, Lansing, Michigan 48917, and served on all other parties of record on

or before May 20, 2013, or within such further period as may be authorized for filing

exceptions. If exceptions are filed, replies thereto may be filed on or before June 3, 2013.

The Commission has selected this case for participation in its Paperless Electronic

Filings Program. No paper documents will be required to be filed in this case.

At the expiration of the period for filing exceptions, an Order of the Commission will

be issued in conformity with the attached Proposal for Decision and will become effective

unless exceptions are filed seasonably or unless the Proposal for Decision is reviewed by

action of the Commission. To be seasonably filed, exceptions must reach the Commission

on or before the date they are due.

MICHIGAN ADMINISTRATIVE HEARING SYSTEM For the Michigan Public Service Commission _____________________________________ Sharon L. Feldman Administrative Law Judge

April 29, 2013 Lansing, Michigan

S T A T E O F M I C H I G A N

MICHIGAN ADMINISTRATIVE HEARING SYSTEM FOR THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of Michigan ) Electric Transmission Company, LLC for ) Case No. U-17041 a certificate of public convenience and ) necessity for the construction of a transmission) line in Almena Township, Van Buren County, ) and Oshtemo Township, Kalamazoo County, ) Michigan. )

PROPOSAL FOR DECISION

I.

PROCEDURAL HISTORY

This Proposal for Decision (PFD) addresses the July 31, 2012 application of

Michigan Electric Transmission Company, LLC (METC) for a certificate of public

convenience and necessity. The company filed its application under 1995 PA 30, as

amended (Act 30),1 and seeks to construct two double-circuit 138 kV transmission lines

on a 220-foot right-of-way through Oshtemo Township, over approximately seven miles,

with a new electric substation in Almena Township in Van Buren County. The company

filed the testimony and exhibits of eight witnesses in support of its application: Carlo P.

Capra, Jason Sutton, Stephen G. Thornhill, Gary R. Kirsh, Steven J. Koster, J. Michael

Silva, Mark A. Israel, and H. Dwight Mercer.

1 MCL 460.561 et seq.

U-17041 Page 2

Pursuant to notice in accordance with instructions from the Commission, a

prehearing conference was held on September 9, 2012. At the prehearing conference,

METC and Staff appeared, and the following parties appeared and were granted

intervention: Consumers Energy Company; Oshtemo Charter Township; and a group of

property owners jointly represented and referred to collectively throughout the

proceeding as the Landowners. The Landowners group includes: HARCO, LLC; Ken

Irish; Margaret Irish; Jack Kuipers; Jane Kuipers individually and as trustee of the Jane

Kuipers Trust; JMK Holdings, LLC; Doug Maxwell individually and as trustee of the

Doug E. Maxwell 2000 Trust; Micki Maxwell individually and as trustee of the Micki A.

Maxwell Trust; Ward Squiers; and Henrietta Squiers.2

The parties also agreed to a schedule at the prehearing conference.

Subsequently, late intervention was granted to 4110 S. 9th Street, LLC, and the

Terry and Jacqueline M. Schley Trust, by ruling issued October 19, 2012, and reflecting

the stipulation of all parties to the late intervention. Also subsequent to the prehearing

conference, a protective order was issued on October 22, 2012, by consent of the

parties.

On November 7, 2012, at a hearing on the Landowner’s motion to compel

discovery and extend the schedule, the ALJ granted a one-week extension of the

deadline for the Landowners to file the testimony of James R. Dauphinais, and

correspondingly extended the deadline for filing of Staff testimony and rebuttal

testimony.

2 Other individuals were named in the initial petition to intervene filed on behalf of this group, but were not granted intervention at the prehearing conference. See 1 Tr 19.

U-17041 Page 3

Based on this ruling and the schedule agreed to at the prehearing conference,

Oshtemo Charter Township filed the testimony and exhibits of two witnesses, Elizabeth

Heiny-Cogswell and Gregory Milliken, on November 5, 2012;3 the Landowners filed

testimony and exhibits of Mr. Dauphinais on November 14, 2012; Staff filed the

testimony and exhibits of Lynn M. Beck, Naomi J. Simpson, and Steven E. Kulesia on

November 30, 2012; and the company filed the rebuttal testimony of Mr. Capra, Mr.

Sutton, Mr. Thornhill, and Mr. Kirsch on December 18, 2012. At the evidentiary hearing,

by agreement of the parties, the testimony and exhibits were bound into the record.

II.

OVERVIEW OF THE RECORD

The evidentiary record is contained in 365 transcript pages and 137 exhibits,

including exhibits identified by the witnesses as well as other exhibits admitted by

stipulation of the parties.4 This section reviews the testimony presented by the

witnesses, starting first with the direct testimony and then turning to the rebuttal

testimony.

A. METC

Carlos P. Capra, Manager of Regional Planning for ITC Holdings Corp. (ITC),

with a background in engineering, described METC’s system, the electrical

configuration of the proposed lines, and the company’s evaluation of the need for and

benefits of its proposal.

3 The prefiled direct testimony was subsequently amended without objection. 4 Note that several exhibits are duplicates as METC and the Landowners each selected some of the same discovery responses to include in the record.

U-17041 Page 4

He testified that the Kalamazoo area is currently served primarily by three

345/138 kV transformers at the Argenta substation. He explained that National Electric

Reliability Council (NERC) requirements form the basis for the company’s planning, and

that if one of those three transformers is taken out of service for maintenance, the

system must be capable of operating so that no equipment would be overloaded if a

second transformer is lost.5 He testified that the company’s proposed lines and the

additional substation at Weeds Lake would allow METC to comply with the mandatory

NERC planning criteria.

Mr. Capra described two general alternative paths for the lines: one from the

existing Argenta substation east to northern Kalamazoo, the other from Argenta south to

western Kalamazoo, and testified that planning studies showed the path to western

Kalamazoo would result in better system performance. He testified that more detailed

studies were performed by an outside consultant to determine the path to the west of

Kalamazoo that would have the least adverse impact without significantly increasing line

length. The outside consultant, Burns & McDonnell, was asked to evaluate potential

routes from a point near where the existing 138 kV circuit turns east, to a point along the

345 kV circuit where the new Weeds Lake station would be built.

Mr. Capra testified that the company first identified a concern with potential

overloads on the Argenta transformers in 2007, as part of the company’s annual system

assessment submitted to the Midwest Independent System Operator (MISO). He

further testified that the company’s plans to address this concern were submitted to

MISO for evaluation in 2009, as part of the company’s 2009 MISO Transmission

5 See 3 Tr 78-80.

U-17041 Page 5

Expansion Plan (“MTEP”), and that MISO’s analysis helped verify the need for the

project.6

Mr. Capra explained the evaluation process METC used prior to submitting its

plans to MISO, which included the review of at least 8 other options.7 He testified that

these alternatives were rejected for a variety of reasons, including failure to meet the

planning criteria, and overloading of the circuits.8

Mr. Capra testified that the company considered the option of adding a fourth

transformer to the Argenta station, but rejected that option because it would not also

protect against the risk that the station in its entirety could be disconnected from the

345kV source or the 138 kV transmission lines that serve the Kalamazoo and Battle

Creek area.9

Mr. Capra testified to the company’s rationale for choosing two double-circuit kV

pole lines in the proposed right-of-way.10 He testified that as an alternative, the

company considered and rejected locating the Weeds Lake substation along the 138 kV

right-of-way, using one double-circuit 345 kV pole line rather than the proposed two

double-circuit 138 kV pole lines, concluding that although this would reduce the length

of the right-of-way required, it would be more expensive, and would make it more

difficult in the future to connect additional 345 kV circuits into the new substation. He

further testified that connecting one rather than two 138 kV circuits to the existing two

138 kV circuits between Argenta and Milham would cause flows on the 138 kV circuit

6 See 3 Tr 80, 86-88. 7 These options are described at 3 Tr 81-83. 8 See 3 Tr 83-84. 9 See 3 Tr 84. 10 See 3 Tr 85-86.

U-17041 Page 6

around Kalamazoo to become unbalanced, especially if additional MISO-approved

plans to connect some of the Argenta circuit to northern Indiana are pursued.

Mr. Capra also summarized the benefits from the proposal, indicating that it will

meet NERC reliability standards, reduce outage risks in the Kalamazoo and Battle

Creek area, and reduce system losses during peak loading conditions, improving the

efficiency of the system.11 Wholesale users of the proposed transmission line include

Consumers Energy Company as well as all transmission customers taking service

under MISO’s open access transmission tariff, which provides non-discriminatory

access to METC’s transmission facilities.12

Mr. Capra presented Exhibits A-1 through A-4 in support of his testimony,

including the Weeds Lake Project Justification Document (Exhibit A-1) and the Weeds

Lake Section of the company’s 2009 MISO Transmission Expansion Plan (MTEP) filing

with FERC. Exhibit A-4 shows the proposed line in relation to the new line.

Mr. Capra also provided rebuttal testimony, discussed below.

Jason Sutton, Manager in the Project Engineering Group at ITC, also with a

background in engineering, testified to the physical configuration of the proposed lines,

the necessary right-of-way, and the construction schedule.13 He testified that the two

double-circuit 138 kV lines would run parallel, with the centerlines for each separated by

60 feet, and would require a total right-of-way width of 220 feet.14

Mr. Sutton also testified that the new substation would be located on 41 acres in

Almena Township, with one transformer stepping down 345 kV to 138 kV, an unmanned

11 See 3 Tr 88-89. 12 See 3 Tr 89. 13 His direct testimony is transcribed at 3 Tr 109-121. 14 See 3 Tr 113, 114-115.

U-17041 Page 7

electrical equipment and control center, circuit breakers designed to isolate system

faults, and space available for future 345 kV and 138 kV equipment. He estimated the

total cost of the project to be approximately $45 million, $23.3 million for the substation

and $20 million for the transmission lines, and further described the construction

process.

Additionally, Mr. Sutton’s direct testimony identified and discussed an Oshtemo

Township ordinance and environmental requirements that might apply to the project.15

His Exhibit A-5 is a drawing showing the proposed line; his Exhibits A-6 and A-7

provide information on the conductor, and the applicable vegetation management

schedule for the proposed lines. His calculation of the necessary right-of-way is

presented in Exhibit A-8, and the Oshtemo Township utility control ordinance is his

Exhibit A-9.

Mr. Sutton also presented rebuttal testimony, discussed below.

Stephen G. Thornhill, Associate Project Manager in the Environmental Studies

and Permitting Global Practice Division of the consulting firm Burns & McDonnell

Engineering Company, Inc., testified regarding the route selection study performed by

the consulting firm, and the resulting “Preferred Route” and “Alternate Route”

recommendations.16

Mr. Thornhill has a background in both routing and environmental studies for

transmission lines, shown in more detail in Exhibit A-10. As the project manager for this

project, he explained the work the consulting firm did and the route selection process

used, beginning with the development of a study area, the development of detailed

15 See 3 Tr 117-121. 16 Mr. Thornhill’s testimony is transcribed at 3 Tr 126-149.

U-17041 Page 8

information about the area, development of numerous potential routes and route

segments, and analysis of the impacts associated with each route and segment. He

testified to the draft report initially presented in June 2011, public open houses and

discussions presenting the recommendations, and subsequent revisions and updates to

the preferred route to result in the Final Route Study that he presented as his

Exhibit A-11.17 His Exhibit A-12 is a map showing the route resulting from the June

2011 draft report.

Focusing the bulk of his testimony on the route selection process, Mr. Thornhill

testified in more detail regarding the information compiled for the study, and the

development of route screening criteria. He testified that 19 screening criteria were

developed to compare 90 route segments and 321 potential routes, and statistical

techniques were employed to identify a smaller number of routes for further evaluation.

He explained that z-scores were computed for each route for each of the 19 criteria to

statistically measure the positive or negative deviation from the average value for that

criterion, and weights were developed for each criteria leading to a calculation of a

weighted z-score for each route. The criteria, weighting, raw and adjusted z-scores for

each route/segment are included in Exhibit A-11. The 50 least-impact routes based on

53 route segments were selected using this process for further evaluation, leading to

the identification of the preferred and alternate routes included in the company’s

application.18

17 See 3 Tr 131-134. 18 See 3 Tr 134-140.

U-17041 Page 9

Mr. Thornhill testified to the further analysis used to select the preferred and

alternate routes, and described those routes in greater detail.19 He testified to his

opinion that both these routes are reasonable and feasible routes that minimize the

overall social and environmental impacts associated with a project of this nature.

Mr. Thornhill also presented rebuttal testimony, discussed below.

Gary R. Kirsh, Manager of Community Relations in the Local Government and

Community Affairs Department of ITC, testified to address the company’s

communications with elected officials and community members regarding the route,

including meetings and open houses held with Oshtemo Township and Almena

Township between December of 2010 and June of 2012.20 He presented Exhibits A-13

through A-18 to support his testimony.

Mr. Kirsh also presented rebuttal testimony, discussed below.

Steven J. Koster, P.E., a consultant employed by Environmental Resources

Management, Inc., testified to applicable environmental regulatory requirements and

METC’s plans to comply with those requirements.21 Although the requirements cannot

be identified with specificity at this point, he testified that the proposed project would

comply with all applicable state and federal environmental standards, laws, and rules.

J. Michael Silva, P.E., a research engineer specializing in electric and magnetic

fields and president of ENERTECH Consultants, testified regarding anticipated EMF

levels associated with the project, and provided a comparison of those levels to other

EMF sources in everyday environments.22 He testified that computer modeling and field

19 See 3 Tr 140-149. 20 Mr. Kirsh’s direct testimony is transcribed at 3 Tr 158-165. 21 Mr. Koster’s testimony is transcribed at 3 Tr 171-182. 22 Mr. Silva’s testimony is transcribed at 3 Tr 183-202.

U-17041 Page 10

instrumentation developed by his company have been used throughout the world to

evaluate levels of EMF exposure. He testified to his evaluation of the EMF levels for the

proposed transmission line, and his conclusion that levels from the proposed

transmission line are similar or lower than those from other similar lines already

operating in Michigan and throughout the country, below levels recommended by

credible international expert organizations, and within the range that people experience

every day in normal living and work environments. He presented Exhibit A-19 to show

EMF levels he measured around Oshtemo and Kalamazoo.

Mark A. Israel, M.D., Professor and Director of the Norris Cotton Cancer Center

at Dartmouth Medical School, also testified regarding EMF exposure levels.23 He

testified that he conducted an independent evaluation of the published peer-reviewed

scientific research on EMF exposure and the development of cancer. He looked at

laboratory studies focused on cell and tissue effects from EMF, as well as large animal

studies, and concluded that the published, peer-reviewed laboratory research does not

provide a reliable scientific basis to conclude that exposure to power frequency EMF

causes or contributes to the development of cancer.

H. Dwight Mercer, PhD, DVM, testified as a veterinarian and comparative

toxicologist to his evaluation of the potential effects of EMF from the proposed

transmission lines on animals living along the route. 24 Based on his experience and

review of the scientific literature, he concluded that there is no reliable scientific basis to

conclude that the line will cause or contribute to adverse health effects in these animals.

23 Dr. Israel’s testimony is transcribed at 3 Tr 203-215. 24 Dr. Mercer’s testimony is transcribed at 3 Tr 216-229.

U-17041 Page 11

B. Staff

Steven E. Kulesia, Manager of the Generation and Certificate of Need Section of

the MPSC’s Electric Reliability Division, testified to Staff’s recommendation that the

Commission approve the proposed transmission project.25 Mr. Kulesia testified to

Staff’s involvement with the project, beginning with the MISO Transmission Expansion

Plan (MTEP) process. He confirmed the company’s characterization of the project as

not a “major” project under Act 30. He explained that in addition to reviewing the

testimony and discovery in this case, he conducted a field review of the proposed lines.

Citing Mr. Capra’s testimony, he concluded that the quantifiable and nonquantifiable

public benefits of the project justify the construction. He further testified that the

proposed route is feasible and reasonable, and not an unreasonable threat to the public

health and safety.

Lynn M. Beck, an analyst in the Generation and Certificate of Need Section of

the MPSC’s Electric Reliability Division, testified that the company complied with the

public notice and property owner notice requirements in Act 30, set forth in MCL 460.66,

460.567(2)(j), and 460.568(1).26 Ms. Beck’s Exhibit S-1 is the full transcript from the

public meetings METC conducted; she also presented Exhibits S-2 and S-3 to show the

circulation of the papers METC used to publish the notices of hearing and opportunity to

comment, and Exhibit S-10 containing additional discovery responses from the

company.

Naomi J. Simpson, an engineer in the Generation and Certificate of Need

Section of the MPSC’s Electric Reliability Division, testified that the company’s

25 Mr. Kulesia’s testimony is transcribed at 3 Tr 350-362. 26 Ms. Beck’s testimony is transcribed at 3 Tr 319-328.

U-17041 Page 12

application meets the filing requirements set forth in sections 4 and 7(2)(a) through (l) of

Act 30.27 Ms. Simpson described Staff’s review of the application and related

documents. To show compliance with section 7(2)(c), which requires the company to

demonstrate consideration of alternative routes, she presented Exhibit S-4 (a map

showing both the company’s preferred and alternate routes ) and Exhibit S-5 (discovery

responses from the company). She testified that Staff agrees with the company’s

decision to remove the southern routes within the I-94 corridor from consideration.

Other discovery responses from the company regarding the project are contained in her

Exhibits S-6 through S-9 and S-11.

Ms. Simpson relied on Ms. Beck’s testimony regarding the company’s

compliance with the requirement of section 7(2)(j) of Act 30. She further testified,

however, that the company’s summaries of the comments made at the public meetings

were oversimplified when compared to the transcripts. She recommended that the

company make greater efforts to address commenter concerns, although she testified

this is not required by Act 30.

C. Oshtemo Charter Township

Elizabeth Heiny-Cogswell, Oshtemo Charter Township Supervisor, testified on

behalf of the Township.28 She explained the Township’s position opposing the

proposed route, and provided foundational information regarding the Township’s Utility

Control Ordinance, including recent amendments. She presented as exhibits the

Oshtemo Township Master Plan (Exhibit OCT-1), the Oshtemo Township Future Land

27 Ms. Simpson’s testimony is transcribed at 3 Tr 329-349. 28 Ms. Heiny-Cogswell’s testimony is transcribed at 3 Tr 287-303, including amended testimony at 3 Tr 302-303.

U-17041 Page 13

Use Map Exhibit OCT-2), the Oshtemo Township Village Theme Development Plan and

Map (Exhibits OCT-3 and OCT-4), Oshtemo Township Zoning Ordinances and Zoning

Map (Exhibits OCT-5 and OCT-6) as well as the Township resolution adopting the Utility

Control Ordinance amendment (Exhibit OCT-7), the Utility Control Ordinance as

amended (Exhibit OCT-8), and other Township Ordinances (Exhibits OCT-9 and

OCT-10).

Ms. Heiny-Cogswell described communication between the Township and METC

beginning in December of 2010, and explained her opinion that METC had not been fair

and open in dealing with the citizens and the Township during the route selection

process. Among other concerns, she testified that METC had implied to Oshtemo

residents that the Township had approved the project, and she quoted a letter she had

written to Michigan Attorney General Bill Schuette complaining that METC was not

providing sufficient and accurate information regarding the project. She characterized

meetings as short and few, and testified that at the meetings, only general mapping

information was available, and no specific explanation of the routing criteria or analysis

of the criteria was provided.

Ms. Heiny-Cogswell testified that the Township believes that the preliminary

routes numbered 166 and 219 as identified in the June 2012 Burns & McDonnell

Report, which generally parallel the north side of I-94, are better than METC’s preferred

and alternate route, concluding that the routes along I-94 will have a lesser impact on

the community at large because they rely in part on an existing corridor and public

lands, lessening the burden on private homeowners.

U-17041 Page 14

She also testified extensively regarding the Township’s amendment of Ordinance

No. 114 through the adoption of Ordinance No. 525, explaining the purposes behind the

amendment, her understanding of its legal status and relationship to the company’s

1995 PA 30 application, and the interrelation of Ordinance No. 114 to the Township’s

Future Land Use Plan and other Township ordinances.

Gregory Milliken, Oshtemo Charter Township Planning Director, with a

background in urban planning, also testified for the Township.29 He provided what he

characterized as “foundational information” for the Township’s Ordinance No. 114, as

amended by Ordinance No. 525. He testified that the proposed Weeks Lake project is

not consistent with the vision of the Township as embodied in its Master Plan, which

focuses on preserving the rural character of the Township and protecting its natural

features. He testified that the proposed route would destroy the tree-lined corridor

along substantial stretches of many roadways, resulting in irreparable damage to the

rural character of the Township. He contrasted this with the Township Master Plan

which has as one of its main goals to preserve and encourage tree-lined roads. He also

described the “Village Area” that is part of the Township’s long-term planning, with

South 9th Street intended to be the gateway into the Village Area from the highway. He

testified to his opinion that because the proposed route crosses South 9th Street

between I-94 and the Village Area, it would interfere with the main corridor for accessing

the Township and implementation of the Village Theme Development Plan, asserting it

would look more like the entrance to an industrialized area than a quaint village. He

also testified that the Township recommends a route for the transmission line using the

29 Mr. Milliken’s testimony is transcribed at 3 Tr 304-316, including amended testimony at 3 Tr 314-316.

U-17041 Page 15

I-94 corridor, routes 166 and 219 in Exhibit A-11, which will have a lesser impact on the

community at large.

D. Landowners

James R. Dauphinais testified on behalf of the Landowners.30 He is a consultant

and Principal with Brubaker & Associates, Inc., with a background in electrical

engineering, and experience in transmission planning.

Mr. Dauphinais testified to his opinion that the quantifiable and nonquantifable

benefits of the proposal do not justify the offsetting quantifiable and nonquantifiable

detriments, including the estimated $45 million cost of construction, the adverse impact

of locating the project within 500 feet of 30 residences and across 40 to 50 parcels of

land in the Kalamazoo area, and the associated loss of woodland and cropland.

See 3 Tr 246.

He described METC’s existing system and METC’s proposal, presenting Exhibits

LO-1 and LO-2, one-line diagrams of the current system and the system as modified by

the company’s proposal, simplified for discussion purposes. He also reviewed NERC

reliability requirements and METC’s analysis. In support of his conclusion that the

benefits of the Weeds Lake project do not justify the costs, Mr. Dauphinais identified two

alternatives that he concluded achieve comparable benefits at less cost and are

therefore preferable to the Weeds Lake project.

First, he testified that the legitimate reliability need in the Kalamazoo area can

reasonably be met with the addition of a fourth transformer at Argenta.31 His Exhibit

LO-3 shows the fourth transformer overlaid on the one-line diagram in Exhibit LO-1. He 30 Mr. Dauphinais’s testimony is transcribed at 3Tr 234-284. 31 See 3 Tr 253-264.

U-17041 Page 16

testified that by adding this fourth transformer, no additional lines would be needed. He

rejected METC’s claim that adding a fourth transformer would be akin to putting all its

eggs in one basket.32 He characterized the loss of 345 kV connection to the Argenta

station, or the loss of all 138 kV connections from Argenta, as a NERC Category D

extreme contingency, beyond NERC requirements and METC’s stated planning criteria,

presenting Exhibits LO-6, LO-8, and LO-9, and addressed what he characterized as the

company’s “philosophical” objection to using four transformers at on substation,

indicating that he is aware of at least one instance where such a configuration has been

used.33

Second, he testified that the “B Avenue” alternative evaluated by the company in

its planning process and in Exhibit A-1 is preferable to the company’s Weeds Lake

proposals, because it achieves the reliability benefits at a significantly lower cost. His

Exhibit LO-4 shows the one-line diagram of this alternative.

In discussing these alternatives, Mr. Dauphinais addressed the company’s claim

that the power flows are better balanced under the Weeds Lake proposals in the event

of a contingency loss of the double circuit 345 kV lines serving the Argenta and Battle

Creek substations. He testified that the power flow advantages that METC identifies to

support its proposal (reducing induced power flows on the 138 kV lines in the event of a

double-circuit 345 kV transmission line outage) could only be achieved by also

rebuilding the 138 kV lines from Morrow to Battle Creek (which the company indicates it

intends to do). Given replacement of this line, he testified that the fourth transformer

and the B Avenue alternative would achieve similar benefits if the appropriate

32 See 3 Tr 257-259. 33 See 3 Tr 260-261.

U-17041 Page 17

protections (power flow control reactors) are installed along with the replacement. His

Exhibit LO-7 contains his power flow analysis of the company’s proposal in comparison

to the use of a fourth transformer at Argenta and to the B Avenue alternative. His

Exhibits LO-10 and LO-11 provide information on the use of power flow control reactors.

Mr. Dauphinais also addressed the transmission loss levels under each

alternative. He acknowledged that the addition of a fourth transformer alone, or the B

Avenue alternative, would increase transmission losses slightly, in comparison to the

company’s proposal which is estimated to reduce transmission losses by approximately

2.6 MW at system peak. He concluded based on his analysis that additional efficiency

gained from the company’s proposal, which he estimated at not more than 1 MW per

year, did not justify the additional $10 to $20 million cost.34

Mr. Dauphinais also discussed the MISO Board of Director’s review of the

company’s proposal, characterizing it as “skin deep” on the basis that the Board did not

review or discuss the evaluation of any alternatives.35 He provided this testimony to

support his contention that the MISO Board of Director’s approval of the project should

not be a substitute for thorough Commission review in this case.

Mr. Dauphinais also testified regarding the reasonableness of the preferred and

alternate routes recommended by the company for the Weeds Lake project, and the

Burns & McDonnell analysis. He testified that the general method used by Mr. Thornhill

was reasonable, and reached results that are “not wildly off base”, although he took

issue with some of the routing factors and some of the weightings.36

34 See 3 Tr 263-364. 35 See 3 Tr 265. 36 See 3 Tr 270-273.

U-17041 Page 18

Mr. Dauphinais testified that the company rejected the best-scoring routes in its

preliminary analysis, contending that the company unreasonably rejected them based

on a concern a portion of the best-scoring route paralleling I-94 could not accommodate

a 220-foot right of way. He testified that METC should have explored narrowing its

right-of-way requirement for the two constrained route segments 26 and 37 to determine

whether the apparent available right of way could be expanded for those segments or

the required right-of-way for the project narrowed for those segments. He also testified

that quad-circuit structures should also be considered for those route portions,

recognizing this would introduce additional NERC planning requirements.37

Additionally, he testified that METC could redesign its project to require only a

single double-circuit transmission line, as shown in his Exhibit LO-5, which would

require only 160 foot right-of-way. He refers to this alternative as the “Tapping Variant”.

He included a power flow analysis of the “Tapping Variant” in his Exhibit LO-7, and

presented a comparison of the routing factors in his Exhibit LO-12. He testified that the

“Tapping Variant” would be a mile shorter, and require significantly less right of way.

His power flow analysis in Exhibit LO-7 showed that it provides nearly identical relief to

the reliability issue and parallel 138 kV power flow issue as the company’s proposal, at

a cost of $10 million less.

Mr. Dauphinais testified further regarding METC’s conclusion that I-94 expansion

plans would interfere with using the I-94 corridor for the transmission line. He testified

that the Michigan Department of Transportation (MDOT) plans are only preliminary, and

may not involve expansion of the existing right of way or sound barriers. He presented

Exhibits LO-13 and LO-14 to support his testimony. 37 See 3 Tr 273-275.

U-17041 Page 19

E. Rebuttal to Landowners testimony

Three witnesses testified in rebuttal to Mr. Dauphinais’s testimony, disagreeing

with his conclusion that the quantifiable and nonquantifiable benefits of the company’s

proposal do not justify its approval.

Mr. Capra testified regarding the company’s consideration of alternatives to its

proposal, including the addition of a fourth transformer.38 He testified that the company

did perform a power flow analysis of the option of adding a fourth transformer at

Argenta, but did not rely exclusively on a power flow analysis in concluding that the

Weeds Lake project provides the most relief of the already heavily loaded 138 kV

circuits serving Battle Creek and Kalamazoo from Argenta.

He testified adding a fourth transformer at Argenta or adding a new station less

than 2 miles south of Argenta would continue to require the Kalamazoo area to be fed

primarily from the north and would not help to mitigate the risk of blackouts and/or

brownouts for certain NERC category D contingencies.

Likewise, he testified, the company did not rely only on the factors identified by

Mr. Dauphinais in rejecting the B Avenue alternative, but on a multi-year and multi-facet

study approach that considered many aspects including impacts to the 138 kV system

in the Kalamazoo and Battle Creek areas.

He testified that the benefits of the Weeds Lake proposal in reducing flows on the

Argenta to Morrow and Argenta to Riverview 138 kV circuits for certain contingencies

were not dependent on rebuilding sections of the Morrow to Battle Creek 138 kV circuit.

While he agreed this benefit could be obtained by the addition of reactors, he further

38 Mr. Capra’s rebuttal testimony is transcribed at 3 Tr 91-108.

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testified that the addition of reactors would not add a second, geographically distant

source for the Kalamazoo area, reduce the risks of blackouts or brownouts associated

with the loss of the 345 kV lines serving Argenta, or reduce transmission losses.39

Mr. Capra disputed that METC unnecessarily plans for Category D

contingencies, indicating that METC reasonably plans for load growth and that a broad

range of contingencies could shift into different categories for planning purposes as load

grows and/or dispatch patterns change, and testified that it is reasonable to plan for

contingencies even if they have not occurred within a 10-year period. He presented

Exhibits A-20 and A-21 to show that certain category D contingencies identified by

METC could lead to brownouts and/or blackouts in the Kalamazoo area, which would

lead to a substantial loss of customer demand.

Mr. Capra also addressed system efficiencies, presented Exhibit A-22 to show

that the company’s proposal results in reductions in system losses at both peak and off-

peak system loads, while the alternatives identified by Mr. Dauphinais increase system

losses at peak and off-peak loads.

Mr. Capra disputed Mr. Dauphinais’s characterization of the MISO Board review

as “skin deep”, presenting his response to the Landowner’s discovery in Exhibit A-23,

and citing his earlier Exhibits A-1 and A-2.

Finally, Mr. Capra discussed the “Tapping Variant” identified by Mr. Dauphinais,

asserting it is not a valid solution to the reliability need and would create a three-circuit

system, which METC tries to avoid because they are less reliable and difficult to

properly protect.

39 See 3 Tr 97.

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Mr. Sutton’s rebuttal testimony addressed the required right of way, disputing Mr.

Dauphinais’s testimony that the width of the required right of way could be reduced over

any portion of the route, or that quad-circuit structures could reliably be used on certain

route segments, to allow METC to use the I-94 corridor for the project.40

Mr. Thornhill’s rebuttal testimony addressed Mr. Dauphinais’s conclusion that

routes following I-94 should have been given more consideration.41 He testified that

even with reduced right of way, routes 166 and 219 would be closer to more residences

and have greater visibility than the company’s preferred and alternate routes. He also

disputed Mr. Dauphinais’s testimony that some of the route selection criteria and

weightings were unusual.

F. Rebuttal to Township testimony

Two witnesses testified in rebuttal to the testimony presented by the Township.

Mr. Thornhill’s rebuttal testimony also addressed Mr. Milliken’s and Ms. Heiny-

Cogswell’s testimony that the Township’s recommended route would have a lesser

impact on the community at large. He testified that the Township’s preferred route would

have 10 to 12 more homes within 500 feet of the corridor, 43 homes rather than 31 and

33 homes for METC’s preferred and alternate routes. Further, he testified that METC’s

proposed and alternate routes minimize overall impacts to human and natural resources

better than the other routes evaluated, relying on his Exhibit A-11. And he testified that

the proposed and alternate routes were no more incompatible with the Township’s

master plan than the alternatives preferred by the Township.

40 Mr. Sutton’s rebuttal testimony is transcribed at 3 Tr 122-125. 41 Mr. Thornhill’s rebuttal testimony is transcribed at 3 Tr 150-157.

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Mr. Kirsh testified in rebuttal to Ms. Heiny-Cogswell’s testimony regarding

METC’s dealings with the township during the route selection process, contending that

METC had numerous meetings and communications with the Township, identifying

several of those meetings and communications in his testimony.42

III.

STATUTORY FRAMEWORK

Before turning to an overview of the arguments the parties make in their briefs, it

is appropriate to review the statutory framework. Because METC’s project does not

meet the statutory definition of a “major transmission line” under section 2(g) of Act 30,

METC is not required to obtain a certificate of public convenience and necessity for the

proposed transmission line. Instead, section 9 of Act 30 gives METC the option to apply

for a certificate of public convenience and necessity. Under section 9, the Commission

is directed to proceed on the application in the same manner as provided in section 8

for major transmission lines. Section 4, which requires the initial filing of a construction

plan prior to an application for a certificate, does not apply to METC’s application under

section 9, but section 9 further provides that “the provisions of this act that apply to

applications and certificates for major transmission lines apply in the same manner to

applications and certificates issued under this section.” 43

Section 6 of the Act contains provisions for public meetings and meetings with

local officials in advance of an application. Section 7 states the requirements for an

42 Mr. Kirsch’s rebuttal testimony is transcribed at 3 Tr 166-170 43 MCL 460.569.

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application. And section 8 directs the Commission’s proceedings on an application, with

requirements for notice and a contested case hearing.

Subsection 4 of section 8 provides as follows:

The Commission shall grant or deny the application for a certificate not later than 1 year after the application’s filing date. If a party submits an alternative route for the proposed major transmission line, the commission shall grant the application for either the electric utility’s, affiliated transmission company’s, or independent transmission company’s proposed route or 1 alternative route or shall deny the application. The commission may condition its approval upon the applicant taking additional action to assure the public convenience, health, and safety and reliability of the proposed major transmission line.44

Subsection 5 of section 8 further governs the Commission’s decision making:

The commission shall grant the application and issue a certificate if it determines all of the following: (a) The quantifiable and nonquantifiable public benefits of the

proposed major transmission line justify its construction. (b) The proposed or alternative route is feasible and reasonable. (c) The proposed major transmission line does not present an

unreasonable threat to public health or safety. (d) The applicant has accepted the conditions contained in a

conditional grant.45

Additionally, subsection 6 of section 8 requires that a certificate “identify the major

transmission line’s route and . . . contain an estimated cost for the transmission line.”

Section 10 of the act expressly addresses local ordinances:

(1) If the commission grants a certificate under this act, that certificate shall take precedence over a conflicting local ordinance, law, rule, regulation, policy, or practice that prohibits or regulates the location or construction of a transmission line for which the commission has issued a certificate.

(2) A zoning ordinance or limitation imposed after an electric utility, affiliated transmission company, or independent transmission

44 MCL 460.568(4). 45 MCL 460.568(5).

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company files for a certificate shall not limit or impair the transmission line’s construction, operation, or maintenance.

(3) In an eminent domain or other related proceeding arising out of or related to a transmission line for which a certificate is issued, a certificate issued under this act is conclusive and binding as to the public convenience and necessity for that transmission line and its compatibility with the public health and safety or any zoning or land use requirements in effect when the application was filed.46

Section 15 of Act 30 expressly provides that judicial review of a Commission

decision is pursuant to MCL 462.26.

IV.

POSTITIONS OF THE PARTIES METC, Oshtemo Township, the Landowners, and Staff filed initial briefs, and

each of the parties except the Township filed reply briefs. The arguments of the parties

are largely tailored to the statutory criteria and other provisions described above, in

addition to arguments regarding the constitutionality of some of the provisions.

METC argues in its initial brief that the company has satisfied all of the

procedural requirements of Act 30 set forth in sections 6 and 7, and demonstrated on

the record that its proposed and alternate transmission line routes meet the

requirements of section 8(5) of Act 30. It argues on this basis that the Commission

must approve its application, and should select the proposed route over the alternate

route. METC further argues that in granting a certificate under the Act, the Commission

will preempt the Oshtemo Township ordinance requiring underground placement of the

lines within the public right of way.

46 MCL 460.570.

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Staff’s brief also recommends approval of METC’s application, reviewing the

provisions of Act 30 and the record evidence in support of its recommendation.

Oshtemo Township’s initial brief argues that the Commission should deny the

requested certificate of public convenience and necessity, or in the alternative, require

adherence to the Township’s ordinances. The Township criticizes METC’s efforts to

provide information to the Township during its route selection process, contending that a

lack of adequate notice of the public hearings and a lack of an opportunity for the public

to be heard violated due process and the requirements of MCL 460.566. The Township

also argues that its ordinances are valid and should be upheld. The Township does not

otherwise address the specific route selection in its brief.

The Landowners’ initial brief argues that METC has not established that its

proposed or alternate route meets the requirements for a certificate of public

convenience and necessity, arguing that the quantifiable and nonquantifable public

benefits of the line do not justify its construction because alternatives exist that are less

expensive and less destructive, and that the proposed and alternate routes are not

reasonable because less intrusive alternative routes exist. Additionally, the Landowners

also argue that Act 30 is unconstitutional as written and as METC asks that it be applied

in this case, as a taking of private property without due process, and a violation of the

separation of powers doctrine. The Landowners similarly argue that ignoring the

Township’s zoning ordinances in reliance on section 10 of Act 30 also violates

constitutionally required separation of powers and due process.

The Landowners characterize this as “the” proceeding that will decide the fate

and property rights of the landowners whose property is impacted by the lines, and thus

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argue this proceeding must meet certain constitutional standards, asserting that

subsequent proceedings in circuit court exist merely to determine the reasonable value

of the land METC is taking.

In its reply brief, the Landowners amplify their argument that the company failed

to comply with the public meetings requirement of the act, and failed to justify the

expense of the project. The Landowners further argue that the Commission should not

consider MISO approval of the project in determining whether to issue a certificate, and

addresses Staff’s brief, asserting that Staff’s recommendation relies on METC’s

assertions rather than an analysis of the alternatives identified by Mr. Dauphinais.

In its reply brief, Staff addresses the Township’s challenge to METC’s

compliance with the public meeting requirement of the Act, emphasizing Mr. Kirsch’s

testimony regarding METC’s meetings with Township leaders and the public meeting

held in Oshtemo Township, and Ms. Beck’s conclusion that these meetings satisfied the

statutory requirements. Staff also addresses the Township’s ordinances, arguing that

any township regulation of the proposed line would directly conflict with the authority

granted to the Commission under Act 30.

In its reply brief, METC argues that the Landowners and the Township have not

shown that METC failed to satisfy a statutory requirement entitling METC to a certificate

of public convenience and necessity for the project. METC argues that the alternatives

identified by the Landowners “are not based on a prudent and holistic transmission

planning process, are unreasonable, and do not provide the same public benefits as the

proposed transmission line.”47 METC also argues that a certificate issued by the

47 See METC reply brief, page 9.

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Commission will take precedence over the Township’s ordinances, and disputes that

Act 30 as written or applied in this case raises any constitutional concern.

Based on the briefs of the parties,48 the following issues require resolution:

1. Whether METC complied with the meeting requirements of section 6 of Act 30

prior to filing its application.

2. Whether METC has demonstrated that the quantifiable and nonquantifiable

benefits of the project justify its construction, including consideration of whether a

benefit/cost analysis is required, and the extent to which other less expensive or

less intrusive alternatives should be considered in evaluating METC’s proposal.

3. Whether METC’s proposed route is feasible and reasonable, including the

extent to which METC should have considered less intrusive alternative routes.

4. Whether and the Commission should consider and separately address the

Township ordinances pertaining to utility infrastructure.

5. The extent to which certain constitutional arguments raised by the Township

and the Landowners can be resolved in this proceeding.

48 The level of rancor in the arguments of all parties is unusual in Commission proceedings and not helpful to a determination of the merits of the arguments. One party states: “Although the Landowners attempt to make some arguments regarding the Proposed Transmission Line’s route and benefits, those arguments never actually address Act 30’s standards for granting a Certificate, ignore the substantial record evidence . . . and ultimately amount to nothing more than the typical ‘not-in-my-backyard’ self-interested arguments commonly associated with construction projects.” One party states: “Counsel . . . has never seen such a travesty in his entire life.” Another party claims: “[N]othing in the testimony or briefs of [the opposing parties] has credibility . . .” And a fourth party characterizes MISO as “an industry dominated artifice put in place to simply echo industry interests.”

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V.

PUBLIC MEETING REQUIREMENTS The parties dispute whether METC complied with the meeting requirements of

sections 6 of Act 30, MCL 460.566. This section requires that an applicant hold a public

meeting in each municipality through which the proposed line will pass,49 and prior to

that meeting, offer to meet with the chief elected official of each affected municipality.

METC contends that it satisfied these meeting requirements, citing Mr. Kirsch’s

testimony and Staff witness Ms. Beck’s testimony.50 Staff concurs that the statutory

requirements have been met.51

Oshtemo Township and the Landowners argue that METC failed to comply with

the meeting requirement. In its brief, the Township expresses dissatisfaction with the

quality of notice and information provided by METC. The Township further argues that

defects in the notice and information provided violate the requirements of due process

by depriving the residents of a meaningful opportunity to be heard.52 The Landowners

argue in their reply brief that the meetings were legally inadequate.53

Mr. Kirsch testified specifically with regard to Oshtemo Township, that the

company first communicated with the Township regarding a proposed transmission line

in December of 2010, and held meetings beginning in 2011. In advance of its July 31,

2012 application in this case, Mr. Kirsch testified that the company held a public

49 The statutory reference is to a major transmission line for which a plan has been submitted under section 4. As discussed above, section 4 is not applicable to this pipeline, but under section 9 of the act, an applicant must follow the same procedures except for the section 4 plan submission. No party has contended the meeting requirements of section 6 are inapplicable to METC's application in this case. 50 See METC brief, page 15; reply brief, pages 4-8. 51 See Staff brief, page 29; reply brief, pages 4-7. 52 See Oshtemo Township brief, pages 1-6. 53 See Landowners reply brief, pages 8-9.

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meeting in Oshtemo on June 27, 2012. He presented the public notice of that meeting

as his Exhibit A-17, and a summary of the comments received as his Exhibit A-18.54 He

further testified that the company invited Ms. Heiny-Cogswell, the Township Supervisor,

or her designee, to meet prior to that public meeting, presenting the June 5, 2012 letter

as his Exhibit A-13.55 In response to this letter, Mr. Kirsch testified that he accepted an

invitation to attend an Oshtemo Township Board meeting on June 12, 2012. The

minutes of that meeting are contained in Exhibit A-14.

Ms. Beck testified to her review of Mr. Kirsch’s testimony and exhibits, and her

Exhibit S-1 included transcripts of the public meetings held in Almena and Oshtemo

Townships, on June 26 and June 27, 2012 respectively.56

The record reflects the Township Supervisor's dissatisfaction with the company's

communications. Ms. Heiny-Cogswell testified that METC’s communications with the

Township were “not fair and open.”57 She acknowledged that communications between

METC and the Township dated back to December 2010, and her chronology of

meetings tracks with Mr. Kirsch’s testimony. But she further testified that the company

provided insufficient or misleading information, characterizing the information provided

as “general verbal and sketch plan information, without specific data or analysis.” The

Township’s dissatisfaction with METC’s communications appears to stem from 2011,

and is described in a letter Ms. Heiny-Cogswell wrote to Attorney General Bill Schuette

on January 4, 2012, quoted in her testimony at 3 Tr 291-292. Her letter states in part:

54 A summary of comments received is required to be included in the application per section 7((2)(j) of Act 30. 55 See Kirsch, 3 Tr 161-163; 168-170. 56 See Beck, 3 Tr 324-325. 57 See 3 Tr 289-292.

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The unfair practices to which I refer include ITC providing misinformation to individual citizens and to Township government. The unfair practices include lack of timely notice to all property owners, lack of sufficient overall project information, lack of accurate information, and lack of information about the proposed project timeline to property owners and residents.58

This letter references the June 2, 2011 meeting, and asserts that at the meeting,

METC told residents the right of way for the project would be 150 feet, rather than the

current proposed right of way of 220 feet. The letter also takes issue with the postcard

mailed to inform residences of the June 2, 2011 meeting. Ms. Heiny-Cogswell stated in

her letter that the postcard did not clearly convey that the company was proposing a

new transmission line through residents’ property, and was not sent to all property

owners along the proposed route.59

Mr. Kirsh did not address this letter or the specific allegations regarding the June

2011 meeting in either his direct or rebuttal testimony. Instead, his rebuttal testimony

reiterates that meetings took place, and cites the documentary evidence presented in

his direct testimony and Staff exhibits. In its reply brief, METC disputes that the 2011

postcard was deficient, providing a quotation from the postcard but not a record

citation.60 METC and Staff also argue that the 2011 communications are not relevant to

a determination whether the company complied with the requirements of section 6 in

preparation for its July 2012 filing.

The Landowners argue in their reply brief that the June 27, 2012 meeting was

inadequate because there was no real discussion at the meeting. The Landowners

argue that a “meeting” is defined as “a gathering of people for discussion” and a

58 See 3 Tr 291. 59 See 3 Tr 291-292. 60 See METC reply brief at page 6.

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“discussion” is defined as a “talk between people”. It cites the transcript of the June 27,

2012 public meeting in Exhibits S-1 and LO-15 with the following characterization:

The transcripts clearly show METC allowed interested parties to give “public comment” to voice their opinions of the project (which was not available in its final form at that time) and ask questions. What is glaringly absent from the transcripts is any real response from METC or meaningful answers to the questions posed. METC did not provide any direct response to the inquiries of the speakers. When the interested parties finished asking substantive questions, METC’s only response was “thank you.” Nor only is this rude and inconsiderate, but it is a one-sided monologue and not a gathering with the purpose of having people discuss an issue.61

Ms. Simpson testified on behalf of Staff as follows:

Although Act 30 does not require METC to respond to public comments, Staff’s position is that METC should make every attempt to address commenter concerns in the interest of open and transparent communication. As noted in the public meeting summary and transcript, METC did not attempt to provide a response to several comments. Staff notes that METC did address many of these topics within their application, however the affected landowners would have benefitted from complete responses to the questions posed during the public meeting process.62

This PFD concludes that METC satisfied the meeting requirements of section 6

of Act 30. The Township’s concerns with the company’s communications are directed

primarily at communications in 2011, rather than at the meetings the company held to

comply with the requirements of Act 30 in June of 2012.63 No party disputes that events

titled “public meetings” occurred on June 26 and 27, 2012, in Almena and Oshtemo

Townships, or that those meetings were properly noticed. No party disputes that

61 See Landowners reply brief, page 8. 62 See 3 Tr 347-348. Staff’s briefs assert that the meeting requirements were met, and do not mention Ms. Simpson’s concerns. 63 The Township brief’s objection to inadequate notice appears to refer to the postcard regarding the June 2011 meeting, since it places the timing prior to Ms. Heiny-Cogswell’s January 4, 2012 letter to the Attorney General. See Township brief, page 1 (“ITC’s information was so inadequate and so misleading that the Township Supervisor filed a complaint with the Michigan State Attorney General’ Office.”)

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Township officials were invited to meet with METC representatives prior to the public

meetings.64 As METC argues: “[T]he 2011 notice was beyond any statutory

requirement—it was part of METC’s community involvement and information gathering

efforts unrelated to the Act 30 filing.”65

Regarding the Landowners’ argument that the public meeting in Oshtemo

Township contained little discussion and therefore should not be considered to meet the

statutory requirement, it does appear from the transcript that the public meeting bore

more resemblance to a quasi-legislative or public hearing, in which members of the

public are given an opportunity to make comments for the record, with no discussion or

dialogue.66 There was no initial presentation by the company at the June 27, 2012

meeting; instead, the 7:30 p.m. meeting commenced with what the company called the

“public comment period”. Following numerous comments by members of the public,

the company spent approximately 8 minutes addressing some of the issues raised by

the commenters, in what it called the “panel response period”, with Mr. Thornhill, Mr.

Capra, and Mr. Sutton speaking.67 Nonetheless, in that brief panel response period,

METC did address some of the comments received. Moreover, immediately prior to the

“public meeting”, Mr. Kirsh testified that the company held an “open house” to provide

64 The Township's brief does allege that METC refused to meet with Township officials in public, but this appears to refer to earlier time periods, because the minutes of the June 12 2012 Oshtemo Township Board Meeting, Exhibit A-14, show that Mr. Kirsch attended that open meeting. 65 See METC reply brief, page 7. 66 The Township brief, however, appears to equate the terms “public meeting” and “public hearing” in its brief, pages 2, 4 and 6. 67 The June 27, 2012 transcript reflects that the public comment period was concluded at approximately 8:30 p.m., after a break (Exhibit S-1, page 45 of 63), and that the panel presentation was concluded by 8:38 (Exhibit S-1, page 52 of 63).

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information to members of the public, beginning at 5:30 p.m. on June 27, 2012, and

forty-nine people attended this portion of the event.68

In Case No. U-14861, the Commission addressed the public meeting

requirement as follows:

[T]he Commission finds nothing in Act 30 to suggest that the Legislature did not intend the mandatory meetings required by MCL 460.566 as a prerequisite for the filing of a certificate application to “encourage” an applicant to try to work out differences with municipalities and affected landowners. The meetings required . . . are to be informational in nature and were intended to promote an understanding on the part of governmental officials, affected landowners, and the general public of the applicant’s “desire to build the major transmission line and to explore the routes to be considered.” MCL 460.566(2).69

While the Commission recognized that the “public meeting” requirement is not intended

as a meaningless exercise, Act 30 contains no standards for the required meetings

except for the requirement in section 7(j) that an application contain a review of

comments received at such a meeting, and the company’s response to such

comments.70 METC did solicit comments at the public meeting, as noted above. It is

also reasonable and appropriate to consider the open house as part of the public

meeting, although METC identifies the open house and public meeting as distinct

events, and although the notice published in the Kalamazoo paper referred only to the

7:30 p.m. public meeting.

To the extent that the Township and Landowners contend that the alleged

deficiencies in the earlier meetings or June 2012 meetings deprived residents of due

process rights, this PFD does not find such a violation. There is no doubt that the

68 See 3 Tr 165, 170; see also Exhibit A-17. 69 See May 31, 2007 order, page 22. 70 It is not clear whether section 7(j) calls for the company to indicate the response it made to each comment at the meeting, or to actually provide a substantive response to the comment as information for the Commission to review. No party has addressed this question.

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essence of due process is a meaningful opportunity to be heard, as the Township’s brief

makes clear. But that meaningful opportunity to be heard is provided to all interested

parties through this contested case proceeding. As METC argues, the opportunity for a

contested case hearing before the Commission on METC's application presumptively

satisfies due process requirements.71 No party contended that notice of this contested

case proceeding was inadequate, and Staff independently verified that all affected

property owners were notified and that publication requirements were met.72

Thus, while meetings are statutorily required under section 6 of Act 30, they

appear to serve to help eliminate issues presented to the Commission for resolution,

rather than to meet the due process requirements of notice and a meaningful

opportunity to be heard. There is no statutory requirement that an applicant meet with

the public before its plans have solidified. Act 30 itself contemplates that public

meetings for major transmission projects will take place only after an applicant has filed

a plan under section 4. Should any applicant, however, conduct its meetings so as to

appear closed-minded or indifferent, alienate the community members, or fail to provide

meaningful information and explanations to justify the applicant's plans, the applicant is

much more likely to confront contentious litigation in its contested case hearing before

the Commission.

VI.

JUSTIFICATION METC contends that it has established pursuant to section 8(5)(a) of Act 30 that

the quantifiable and nonquantifiable benefits of the project justify its construction. Staff 71 See METC reply brief, page 31. 72 See Beck, 3 Tr 327.

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concurs. The Landowners argue that METC has not made this showing, asserting that

the company has failed to show that the benefits of the project justify the expenditure of

$45 million and the additional detriments associated with the construction.

Section A reviews the record evidence regarding the benefits of the Weeds Lake

project, while Section B reviews the benefits associated with certain alternatives to the

Weeds Lake Project identified by the Landowners. Recommendations are presented in

subsection C.

A. Weeds Lake Project

There is no dispute among the parties that the construction costs associated with

the Weeds Lake project as proposed by METC is $45 million.73 The seven-mile

transmission line will require a 220-foot right of way, and following the route proposed

by METC, will require 6 to 6.5 miles of new transmission corridor and a total 162-170

acres of new line right of way, and will pass within 500 feet of 31 to 33 residences.74 It

will cross 40 to 50 parcels of land, and result in the loss of 90 to 100 acres of woodland

and approximately 1.25 miles of cropland.75 METC identifies the following benefits from

the project, discussed in turn below: meeting the NERC Category B reliability

requirement for the maintenance outage of one of the three transformers currently at

Argenta, followed by the forced outage of a second transformer; reduction in loadings

on the Argenta to Morrow and Argenta to Riverview 138 kV circuits for certain

contingencies; decreased system losses translating to increased transmission

73 See Sutton, 3 Tr 116; Exhibit S-6. 74 See Thornhill, 3 Tr 144, 155. 75 See Dauphinais, 3 Tr 246; Exhibit A-11, page 116.

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efficiency; and adding a geographically distant source of power to supply the

Kalamazoo Battle Creek area.76

1. Initial Reliability Issue METC’s explanation of the need for the Weeds Lake project begins with an

explanation that the transmission line is needed to ensure that power will be supplied to

the Kalamazoo area during situations where one of the three 345/138 kV transformers

at the Argenta Station is taken out of service, and another transformer fails, to comply

with NERC planning criteria. Mr. Capra testified as follows, also explaining the current

system:

Q. Please address why this transmission line is needed and why METC is proposing this transmission line. A. The proposed transmission line will ensure that power will still be supplied to the Kalamazoo area during situations where one of the three 345/138 kV transformers at the Argenta station is taken out of service allowing METC to be compliant with the mandatory NERC planning criteria as discussed below. In this situation the system needs to be operated so that no equipment would be overloaded for the loss of a second 245/138 kV transformer. As shown on diagrams . . . found in Exhibit A-2 (CC-2), power generally flows on the 345 kV system from the large power plants on the west side of the state to load centers in the central area of the state, such as Kalamazoo and Battle Creek. Power also typically flows south into the 138 kV system from the 345 kV system at the Argenta station and then from west to east parallel to the 345 kV system. Planning assessments have indicated that following the loss of two of the three 345/138 kV transformers in the Argenta station, the third transformer will become overloaded. According to NERC criteria TPL-002a, transmission systems must be planned considering “the planned (including maintenance) outage of any bulk electrical equipment (including protection systems or their components) at those demand levels for which planned (including maintenance) outages are performed”. METC’s planning criteria, which are based on NERC’s requirements, provide additional detail and define that, at load levels up to 85% of the projected system peak load level, all

76 See, e.g., Capra, 3 Tr 107-108.

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facilities must be able to be operated within their emergency ratings during the shutdown of one transformer plus the contingent loss of a second.77

He further explained that the potential overloads on the Argenta transformers he

describes in this testimony were first identified by METC in its 2007 planning

assessments.78

No party disputes that the proposed Weeds Lake project would resolve the

potential overloading of the third transformer at Argenta, in the event that one

transformer is taken out for maintenance and a second transformer fails. Thus, no party

disputes that meeting the NERC criteria regarding the Argenta transformers is a benefit

of the Weeds Lake project.

2. Reduction in Loadings (short term) METC also identified a short-term reduction in the contingency loadings on two

heavily loaded circuits, the Argenta to Morrow and Argenta to Riverview 138 kV circuits,

as a benefit of the Weeds Lake project.79 Mr. Dauphinais explained the circuit loadings

issue as background to his discussion of the project and alternatives as follows:

Exhibit LO-1 (JRD-1) also shows the double-circuit 345 kV transmission line, located north of Kalamazoo, which runs east from Argenta substation to Battle Creek and Tompkins substations. The relevance of this double-circuit 345 kV line is that it electrically parallels the 138 kV facilities between Argenta, Morrow and Battle Creek substations. As a result, if a NERC Category C.5 contingency loss of this double-circuit 345 kV line occurs, the power that would have flowed over it is distributed across all other parallel transmission paths including, but not limited to, other 345 kV lines located further north in the Lower Peninsula of Michigan and the 138 kV transmission facilities between Argenta, Morrow and Battle Creek substations.

77 See 3 Tr 78-79 (footnotes omitted); see also Exhibits LO-24 and A-35. 78 See 3 Tr 80. 79 See Exhibit A-1, and Capra, 3 Tr 97.

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This is because, in alternating current transmission systems, power flows between two points on all available transmission paths between those two points in inverse proportion to the impendence of each of those paths except when such a path is under phase shifting transformer control such as on the transmission ties between Ontario and the Lower Peninsula of Michigan.80

METC’s analysis in Exhibit A-1 indicates that the Weeds Lake proposal will

reduce loadings on the 138 kV lines from Argenta to Morrow and Argenta to Riverview

by 6.6% and 7.6% respectively, but increase the loadings on the Morrow to Battle Creek

138 kV lines by 8.6%.81 Exhibit A-1 states in part:

Weeds Lake has the advantage of helping reduce the loading on the Argenta-Morrow and Argenta-Riverview 138kV lines . . . . On the other hand, it also increases the loading on the Morrow-Battle Creek 138kV line. This line has been an existing concern on the METC system regarding outages and frequent maintenance problems. There is already an infrastructure determination of rebuilding a 15-mile section of this line to fix this issue, which takes care of the . . . overload on the Morrow-Battle Creek 138kV for the aftermath of Weeds Lake project. This alternative also mitigates the loading on the heavily loaded 138kV lines (Argenta-Morrow & Argenta-Riverview) in the area for the short-term while waiting for a more robust, permanent solution to address the east-to-west flow and 345kV double-circuit-tower outage issues.82

In discussing this analysis, Mr. Dauphinais characterizes the company’s decision to

proceed with the Weeds Lake project as based on the following:

(i) METC was already examining the rebuild of a 15-mile section of the Morrow to Battle Creek 138 kV transmission line in order to raise the capacity of that line and (ii) METC’s Proposed Transmission Line project provided some help with regard to reducing the post-contingency loading of these two 138 kV lines out of Argenta while waiting for a most robust, permanent solution to address west-to-east flows on these 138 kV circuits during an outage of the double-circuit 345 kV transmission line.83

80 See 3 Tr 247-248. 81 See Dauphinais, 3 Tr 251-252. The exact figures are reported in Exhibit A-1, page 8, but are not stated in this PFD because Exhibit A-1 is a confidential exhibit. 82 See Exhibit A-1, page 8, percentage omitted. 83 See 3 Tr 252.

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Mr. Dauphinais testified that the short-term benefits the company would obtain from the

load reductions are dependant on the additional rebuilding of the Morrow to Battle

Creek line to address the adverse impact of the Weeds Lake project. He then testified

that METC does not currently have firm plans to rebuild that line: “Our review of ITC’s

website and MISO Transmission Expansion Plan tables did not reveal any announced

firm plans to pursue this transmission line rebuild project.”84

In rebuttal, Mr. Capra testified that the Morrow-Battle Creek rebuild was not

relevant:

The short term benefit noted in Exhibit A-1 (CC-1) was referring to the fact that the Weeds Lake project will help to reduce flows on the Argenta to Morrow and Argenta to Riverview 138 kV circuits for certain contingencies, not the Morrow to Battle Creek 138 kV circuit. Rebuilding sections of the Morrow to Battle Creek 138 kV circuit will have minimal impacts on the Argenta to Morrow and Argenta to Riverview 138 kV loadings, thus the short term benefits—reduced loading on the Argenta to Morrow and Argenta to Riverview 139 kV circuits—will be realized even if sections of the Morrow to Battle Creek 138 kV circuit are not rebuilt.85

The record supports METC’s contention that the Weeds Lake project will achieve

a short-term reduction in the loadings on the Argenta to Morrow and Argenta to

Riverview 138 kV circuits, although as discussed below, it also supports Mr.

Dauphinais’s conclusion that additional work will be required on the Morrow to Battle

Creek circuits to address the impacts of the Weeds Lake project.

3. Reduction in system losses METC also identified the reduction in system losses associated with the Weeds

Lake project, or increased efficiency, as a nonquantifiable benefit of the project. More

efficient systems require less power production, all else equal. Mr. Capra testified that 84 See 3 Tr 253, n6. 85 See 3 Tr 97.

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the transmission line would reduce system losses during peak loading conditions by

about 2.6 MW, with projected peak and off peak savings of 2 to 3.5 MW for 2017 and

2020.86 Mr. Dauphinais attempted to quantify the benefit, estimating an annual savings

of $1.3 million.87

4. Geographically distant source of power METC also identified as a nonquantifiable benefit of the project that it would add

a geographically distant source of power into the Kalamazoo area. METC contrasts this

benefit to the alternatives such as a fourth transformer at Argenta, which it characterizes

as putting all its eggs in one basket, as discussed below. A geographically distant

source of power could enhance system reliability in event of certain contingencies, such

as the loss of the ties from the 345 kV lines to the Argenta substation.88

B. Alternatives

It is also appropriate to review alternatives identified by the Landowners as less

costly and less destructive than the Weeds Lake Project. Mr. Dauphinais testified:

METC has not reasonably shown that the quantifiable and non-quantifiable benefits of its Proposed Transmission Line Project justify the construction of it. The legitimate reliability concern it has with the contingency loss of two Argenta 345/138 kV transformers can be reasonably addressed by the addition of a fourth 345/138 kV transformer at Argenta without any new transmission lines at one-third of the cost, or about $20 million less, than METC’s Proposed Transmission Line Project. Alternatively, the “B Ave” Alternative could be utilized at approximately two-thirds the cost, or about $10 million less, than METC’s Proposed Transmission Line Project with a much shorter and less extensive transmission line.89

86 See 3 Tr 88; see also Exhibit A-9, Exhibit A-22. 87 See 3 Tr 263-264. Mr. Dauphinais also expressed his opinion that these savings did not justify the choice of the Weeds Lake project at the estimated cost of $45 million in comparison to alternatives. 88 See, e.g., Capra, 3 Tr 84, 95. 89 See 3 Tr 266.

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METC argues that these alternatives do not achieve the same benefits as the

Weeds Lake project or are otherwise not prudent.

1. Fourth Transformer at Argenta Mr. Dauphinais testified that adding a fourth transformer at Argenta station would

cost $12.1 million and require no additional transmission lines to be built.90 The parties

appear to agree that a fourth transformer would satisfy the NERC reliability issue

identified by METC giving rise to its Weeds Lake proposal. But Mr. Capra testified that

it would not be prudent to add a fourth transformer at Argenta:

[T]his option was not considered a prudent option because it would continue to keep all of the Kalamazoo area eggs in one basket. In other words, right now, power for the Kalamazoo area primarily all comes from the Argenta station. If either the 345 kV sources into the Argenta station, the 138 kV facilities that bring the power down to the Kalamazoo area, or the connection between these two sets of facilities were severed, then the greater Kalamazoo and Battle Creek areas would likely experience blackouts or brownouts.91

Regarding the contingency loadings on the Argenta-to-Riverview and Argenta-to-

Morrow 138 kV circuits, Mr. Dauphinais analyzed the impacts in his Exhibit LO-7. His

analysis showed that increased contingency loadings for this alternative would be on

the order of 1% to 2.5%.92 He further testified that the increased loadings could be

addressed by the use of power flow control reactors.93 His Exhibit LO-7 presents this

90 See 3 Tr 255-256; Exhibit LO-7. 91 See 3 Tr 84. 92 See 3 Tr 252; and see Exhibit LO-7, page 5 ([T]he post-contingency parallel power flows on the 138 kV transmission circuits . . . for this alternative . . . are very similar to that for the “B Ave” Alternative”). 93 See 3 Tr 261-262.

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analysis. METC appears to agree.94 He identified the cost of such a solution as less

than $20 million, and possibly less than $10 million.

The parties also appear to agree that the fourth transformer alternative without

the use of power flow control reactors would reduce system efficiency. Mr.

Dauphinais’s analysis showed reductions of .2 to .4 MW;95 Mr. Capra’s analysis showed

reductions closer to 1 MW. With power flow control reactors, Mr. Capra’s analysis

shows that efficiency losses are only .1 MW.96

The fourth transformer obviously would not provide a geographically distant

source of power from the Argenta substation. METC also argues that it is

unconventional, asserting that it is not aware of any substation within MISO that

connects two voltages using four transformers.97 Mr. Dauphinais disagrees that this is a

legitimate concern, asserting that he is aware of at least one similar substation in

Connecticut.98

2. B Avenue Alternative The Landowners also focused on an alternative evaluated by METC in Exhibit

A-1 and rejected in favor of the Weeds Lake project. The parties refer to “Alternative 7”

in that analysis as the “B Avenue” alternative. As described in Mr. Capra’s testimony,

under this alternative, METC would construct a 345 kV substation about 1.4 miles south

of Argenta, and loop the existing Argenta to Robinson Park 345 kV circuit into the new

(“B Avenue”) station. It would also tie the Argenta to Drake 138 kV circuit into the new

94 See Capra, 3 Tr 97; Exhibit LO-49. 95 See 3 Tr 263, 104. 96 See Exhibit A-22. 97 See Capra, 3 Tr 103. 98 See 3 Tr 260-261.

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station, requiring a new 1.9 mile 138 kV right of way.99 The company estimated the cost

of this option as $27 million. Mr. Dauphinais quotes METC’s analysis in Exhibit A-1 to

the effect that this alternative “is one of the working alternatives to address the Argenta

problem without causing any major impact to the system”.

The parties also seem to agree that this alternative would meet the NERC

reliability concern presented by the existing three Argenta transformers.100 METC’s

Exhibit A-1 analysis rejected this option, as Mr. Capra testified: “Proposal 7 was shown

to eliminate the overloads on the Argenta transformers; however it was also shown to

cause an increase in flow on the already heavily loaded 138 kV circuits in the

Kalamazoo area under various contingencies.”101

METC thus argues that this alternative would not reduce the loadings on the

Argenta to Morrow and Argenta to Riverview 138 kV circuits for certain contingencies.

Mr. Dauphinais’s analysis shows that the results for the B Avenue alternative are similar

to the fourth transformer results, with contingency loadings for the Argenta to Morrow

and Argenta to Riverview 138 KV lines increasing 1.2% and 0.9% respectively, and the

Morrow to Battle Creek 138 kV line increasing 2.6% in comparison to the status quo.102

As with the fourth transformer, however, he testified that power flow control reactors

could be used to reduce the loadings.

The parties do not dispute that the B Avenue alternative would not increase

system efficiency. Similar to the fourth transformer alternative, without power flow

99 See Capra, 3 Tr 82. Also see Dauphinais, 3 Tr 250. 100 See Dauphinais, 3 Tr 250. 101 See 3 Tr 84. Also see Exhibit A-1. 102 See 3 Tr 252.

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control reactors, system efficiency would be reduced by up to 1 MW, and with power

flow control reactors, system efficiency would be reduced by up to .2 MW.103

Because the B Avenue alternative would create a new substation, it is not

equivalent to “putting all Kalamazoo’s eggs in one basket” as METC argues regarding a

fourth transformer at Argenta, but this substation would be significantly closer than

Weeds Lake.104

C. Conclusion

In reviewing an application by ITC for a major transmission line in Case

No. U-14993, the Commission made clear that the justification for constructing a line

must demonstrate the need for the line. Citing a long history of making determinations

of public convenience and necessity, the Commission explained:

Cost is clearly an element of justification. The Supreme Court has stated that “The requirement of a certificate of convenience and necessity may enable the commission to . . . keep [] the investment at the lowest figure consonant with satisfactory service.” Huron Portland Cement Co v Public Service Comm, 351 Mich 255, 267; 88 NW2d 492,499 (1958) (quotation omitted). The Commission has held that the issuance of a certificate requires “a showing that the line is cost justified.” January 28, 1993 order in Case No. U-10059, U-10061, p. 50. See, also, Zaremba v Public Service Comm’n, unpublished opinion per curiam of the court of Appeals, issued December 3, 1999 (Docket No. 210673), at 2 (“finding that a proposed project serve[s] the ‘convenience and necessities’ of the public before a CPCN can be issued . . . must include a determination of the economic feasibility of the proposed project.”) Small quantifiable and nonquantifiable public benefits may justify an inexpensive line. An expensive line construction project that will ultimately be funded by ratepayers requires more significant public benefits, that rise above the level of conjecture. The Commission finds that ITC’s testimony regarding reliability and capacity issues was not ignored by the ALJ, but rather was appropriately evaluated in the context of the statutory requirements. The

103 See Exhibit A-22. 104 See Dauphinais, 3 Tr 266.

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ALJ correctly pointed out that a cost/benefit analysis can be helpful in demonstrating the justification for such a project.105

This PFD concludes that the company has failed to make the required justification.

First, despite the Commission’s clear directive that “cost is an element of justification”,

METC has not established that the benefits from the Weeds Lake project justify the

costs. Instead, METC has focused exclusively on the benefits of its project in

comparison to alternatives, with no discussion whether the value of the additional

benefits over and above what is necessary to meet NERC reliability requirements

justifies the additional expenditure.

METC’s analysis began with its effort to identify solutions to the NERC Category

B contingency regarding the potential Argenta transformer overload. Mr. Capra’s

testimony on the “need” for the project is clear on this point.106 METC did not argue the

project is needed to accomplish the short-term benefits of reducing loading on the

138 kV circuits from Argenta to Morrow and Argenta to Riverview, to increase system

efficiency, or to add a separate “geographically distant” source of power into

Kalamazoo.

Following this identification of need, METC evaluated potential solutions without

regard to cost to determine which solution provided the most additional system benefits.

On this basis, it identified the Weeds Lake project, with a $45 million price tag, with the

benefits discussed above. In a discovery response regarding its analysis, METC

responded as follows:

ST-METC-027 Did METC perform a benefit-cost study for this project? If not, please calculate the quantifiable benefits the Weeds Lake project will

105 See February 22, 2008 order, pages 17-18. 106 See 3 Tr 78-79. See also LO-24.

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provide to Kalamazoo and Battle Creek area electric customers. Please provide all calculations and supporting information. Response: The proposed transmission line was approved by MISO as a Baseline Reliability Project and will ensure system reliability and compliance with mandatory planning standards. Benefit-cost studies are not performed for reliability-driven projects. Please see pages 16-17 of Mr. Capra’s testimony [3 Tr 88-89] for a discussion of the proposed transmission line’s quantifiable and non-quantifiable benefits.107

Although the Weeds Lake project has benefits beyond remedying the transformer

reliability issue, METC has not provided any analysis, context, or frame of reference to

show that the additional benefits are cost justified.

In contrast, by identifying solutions to the NERC Category B reliability concern

that do not achieve all of the benefits of the Weeds Lake project, Mr. Dauphinais

correctly concluded that METC has not justified the additional expenditures over the

alternatives. While these alternatives do not achieve all of the benefits of the Weeds

Lake project, Mr. Dauphinais’s analysis is persuasive that either the addition of a fourth

transformer at Argenta or the “B Avenue” alternative would address the reliability

concern with less expense and less destruction.

Regarding METC’s objection that adding a fourth transformer at Argenta would

be imprudent, the company’s explanation makes clear that the real reason it believes

adding a fourth transformer at Argenta is imprudent is because it does not add a

geographically distant source of power into Kalamazoo. The company is already

planning to stage a fourth transformer at Argenta as a “spare” transformer for this area

107 See Exhibit LO-25.

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of the state, so it is not imprudent to locate one there from the standpoint of exposure to

the risk of destruction.108

Regarding METC’s objection that connecting the transformer to the system will

increase flows on the Argenta to Morrow and Argenta to Riverview 138 kV circuits, Mr.

Dauphinais explained that power flow control reactors could be used to balance the

flows, which METC acknowledges. Using power flow control reactors also mitigates

system efficiency reductions for a fourth transformer. Thus, the benefits of the Weeds

Lake project in comparison to use of the fourth transformer at Argenta are first, that the

Weeds Lake project adds a geographically distant source of power to Kalamazoo, and

second, that it increases system efficiency. Both of these benefits should be cost-

justified to meet the justification requirement of section 8(5)(a). Even the cost of

nonquantifiable benefits such as improvements in reliability can be evaluated in

comparison to the cost of other projects under consideration or previously undertaken to

obtain similar improvements.

In addition to concluding that METC has not justified the identified costs of the

Weeds Lake project, this PFD also concludes that METC has failed to address the

undesirable impact the Weeds Lake project would have on the Battle Creek to Morrow

138 kV circuit loadings. METC persuasively argues that a holistic approach to planning

should be undertaken, with the goal of creating a robust system:

METC proposed the Proposed Transmission Line based on a holistic planning process designed to create a stronger and more reliable transmission system by considering many

108 As noted above, METC also argues that no substation in the MISO footprint has two voltage levels connected together through four transformers. See Capra, 3 Tr 103; Dauphinais, 3 Tr 260; Exhibit LO-44. But no safety or operational concerns have been identified that would prohibit this. Instead, it is likely that this degree of redundancy is not common. Note that under the NERC contingency at issue, two out of the three transformers would have to fail to risk overloading the third transformer.

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issues and resolving more than just one problem. The Line will create a longer term more robust and reliable transmission system.109

But the evidence in this record does not establish that the Weeds Lake project is the

result of holistic planning or that it will result in a robust system over the longer term.

Instead, METC’s own analysis indicates that additional projects will be required

to achieve a robust system, projects that were not explained on this record. First, if the

Weeds Lake project is approved, the Morrow to Battle Creek 138 kV line will also need

to be rebuilt, or other remedial measures taken, to address the adverse short-term

impacts of the Weeds Lake project on the loadings for that line. METC has not provided

relevant information regarding its plans. In its reply brief at page 16, METC argues:

There is no reason for METC to “put before this Commission the specific quantifiable benefits that will result from the combined Weeds Lake project and Morrow to Battle Creek re-build,” as asserted by the Landowners, because METC is not relying on such benefits.

Mr. Capra also asserted in his rebuttal testimony, quoted in subsection B above, that

the impact of the project on the Morrow to Battle Creek 138 kV circuit is irrelevant.110 In

making these arguments, METC ignores an important adverse impact of the project,

referred to in Exhibit A-1 as “the aftermath of the Weeds Lake project” and implies that

Mr. Dauphinais misunderstands the company’s analysis. This PFD finds that Mr.

Dauphinais reasonably interpreted the company’s analysis in Exhibit A-1, and the

impact on the Morrow to Battle Creek loadings is a legitimate, and on this record

unaddressed, concern with the proposed project. Given the opportunity to explain the

company’s plans regarding the Morrow to Battle Creek 138 kV circuit, METC declined to

109 See METC reply brief, page 17; also see METC brief, page 36. 110 See 3 Tr 97.

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provide the information. By failing to address this matter in its presentation in this case,

METC overlooks a hidden cost of the project and overstates the benefits.

Second, Exhibit A-1 indicates that METC intends to supplement the short-term

reductions in contingency loadings on the Argenta-Morrow and Argenta-Riverview lines

from the Weeds Lake project on a long-term basis with improvements to the 345 kV

lines.111 This mitigates against expenditures to address the loadings on a short-term

basis, without an evaluation of the timing and impact of the long-term solution. Holistic

planning would ensure that system upgrades targeted at providing more reliable

transmission service to the Kalamazoo area are coordinated.

In reaching these conclusions, this PFD recognizes that Staff supports this

project, which is an important consideration. Mr. Kulesia testified to his opinion that the

benefits of the project justify the construction. But Mr. Kulesia’s testimony cites only Mr.

Capra’s direct testimony, and does not address the testimony provided by Mr.

Dauphinais.112 It does not address the points of agreement between Mr. Capra and Mr.

Dauphinais, as shown in Mr. Capra’s rebuttal testimony and various discovery

responses. Staff does not address the Commission’s directive that transmission

projects be cost justified, and Staff does not address the contingency loadings on the

Morrow to Battle Creek 138 kV line resulting from the Weeds Lake project.

Although this PFD recommends that the Commission find that METC has not

justified the project under section 8(5)(a) of Act 30, the remaining statutory criteria are

examined and findings and recommendations made in the sections below, to facilitate a

timely decision by the Commission should it instead conclude that the project is justified.

111 See Exhibit A-1, page 8 (“This alternative also mitigates the loading . . . for the short-term while waiting for a more robust, permanent solution . . .”) 112 See 3 Tr 357-362.

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VII.

REASONABLE AND FEASIBLE ROUTE SELECTION The parties also dispute whether METC’s preferred and alternate routes for the

Weeds Lake project are feasible and reasonable in accordance with section 8(5)(b) of

Act 30. Putting aside the justification for the project, discussed in section VI above, the

Landowners argue that METC should use a route that utilizes the I-94 corridor.

METC’s application proposes a route and an alternate route as illustrated in

figures 4-2 and 4-3 of Exhibit A-11. As can be seen from these exhibits there is little

difference between the routes, with the parallel lines through the preferred route

following segments 1, 1a, 1d, 28, 31a, 31c and 31d as well as segments 2, 10, 10a,

10c, 28a, 31, and 36, while the alternate route follows segment 1b instead of 1a and

segment 10b instead of 10a.113

As described above, METC hired an independent consulting firm Burns &

McDonnell, to perform a routing analysis, and presented the testimony of Mr. Thornhill,

the project manager, to describe the process. Mr. Capra explained that the consultants

were given certain parameters for the Weeds Lake project:

There are two 345 kV paths that could be utilized to serve the Kalamazoo area, one traveling east from the Argenta station north of Kalamazoo and the other traveling south from the Argenta station west of Kalamazoo. Planning studies were performed that analyzed the projected performance of utilizing each of these two 345 kV paths to add additional support for the Kalamazoo area and the path to the west of Kalamazoo was found to result in the best system performance. When considering the 345 kV path to the west of Kalamazoo, in order to maximize system reliability and minimize system losses, environmental and social impacts, and project costs, as can be seen in Exhibit A-4 . . . METC identified a path between the 345 kV and 138 kV circuits as far from the Argenta station as possible without significantly increasing the path’s length.

113 See Thornhill, 3 Tr 142-144, 148, and Exhibit A-11, pages 41-44.

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Based on these concepts, we gave Burns and McDonnell the general study area to consider when developing a preferred route for the line. Specifically, we indicated to Burns and McDonnell that the line should extend from a point near where the 138 kV circuits turn east to a point along the 345 kV circuits where the new Weeds Lake station would exist.114

Within these parameters, Mr. Thornhill identified 90 route segments comprising

321 potential routes, and evaluated each of these route segments and routes using

19 criteria categorized as “engineering”, “social” or “environmental”.115 Each criterion

has a quantitative measurement associated with it; the measurement for each route

segment was compared to the average, and using statistical techniques, assigned a

z-score reflecting the magnitude of its deviation from the average. The criteria-specific

z-scores for each route/route segment were weighted, and the weighted z-scores used

to prioritize routes.116

Subsequent to this analysis, the most promising 50 routes were further reviewed.

METC rejected routes utilizing the I-94 corridor,117 leaving the routes presented as the

company’s preferred and alternate route as the remaining best choices.118

The Landowners question the routing factors in two respects, but on the whole

acknowledge that the approach taken in Mr. Thornhill’s analysis was reasonable.119

The two issues they raise are that cost was not an explicit criterion, and that the

criterion reflecting “distance paralleling linear developments” was assigned only a

114 See 3 Tr 77-78. 115 See 3 Tr 137. The evaluation criteria are also listed in Table 3.1 of Exhibit A-11, page 22, and are discussed in the report; weightings for each criterion are shown in Table 3-2, page 26. 116 See Exhibit A-11, pages 111-113; Exhibit LO-40. 117 See Thornhill, 3 Tr 154. 118 The company has also made minor modifications to these routes to accommodate agreements with certain property owners, but none of those modifications are at issue in this proceeding. See Thornhill, 3 Tr 133-134. 119 See Dauphinais, 3 Tr 270.

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midlevel weighting rather than a greater weighting. The Landowners argue that the

result of these two choices was to downplay the advantages of the I-94 corridor.120

In response to these concerns, METC argues that cost was reflected in the

routing study through other factors including length of right of way and the number of

acute angles, and that the weighting for paralleling existing infrastructure was

appropriate, in part because it allowed residential impacts to be weighted more

heavily.121

Given that Mr. Thornhill’s routing analysis initially identified a route using the I-94

corridor as having the lowest weighted z-score, however, the Landowners also

challenge METC’s subsequent decision to reject this routing. Mr. Dauphinais testified:

The best performing preliminary routes under the z-score screening, Preliminary Routes 166 and 219, used these three route segments that generally parallel the north side of Interstate 94. These preliminary routes should not have been discarded until after METC and Burns & McDonnell had failed at making a reasonable effort to solve the right-of-way width issues that precluded their use for METC’s Proposed Transmission Line Project.122

The Landowners do not dispute that the right of way within the I-94 corridor was limited

to 160 feet, rather than the 220 feet that METC plans for the project,123 but argue that

METC should have considered alternatives that would make use of the available right of

way. The Landowners challenge METC’s decision that the lines should run parallel to

each other, thus necessitating the 220 foot right of way, rather than two 160-foot rights

of way. They also argue that METC could use quad-circuit structures to allow one pole

to carry both lines. Finally, the Landowners argue that an alternative routing it calls the

120 See Landowners brief, page 23. 121 See, e.g., Thornhill, 3 Tr 152-153; Exhibit LO-38; Exhibit LO-48, page 3. 122 See 3 Tr 272; Exhibit LO-45. 123 Mr. Sutton testified to the width of the right of way required for the proposed transmission line. See 3 Tr 114; Exhibit A-8.

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“Tapping Variant” would allow METC to make use of the I-94 corridor. The Landowners

argue that analysis of this alternative shows it would perform as well as the Weeds Lake

project at a cost of $10 million less.124

METC cites Mr. Thornhill’s testimony, and further responds that it met with

Michigan Department of Transportation (MDOT) officials prior to reaching the

conclusion that using the I-94 corridor would not be feasible.125 Ms. Simpson testified

that Staff agrees with METC’s decision to exclude the I-94 corridor. Exhibit S-5 is a

discovery response from Mr. Thornhill further explaining the company’s decision:

Overall, the southern routes along the north side of I-94 were dropped from consideration because they could not be developed as parallel routes for the entire length between interconnection points. Considerably more new alignment would have been necessary to develop two routes along substantial portions of new alignment rather than as two lines along the same alignment. This situation was a result of obstacles along I-94 including a water/sewer pipeline along the north side of the interstate, adjacent residential and commercial development, communications facilities, and road overpasses of the interstate. Additionally, the Michigan Department of Transportation had indicated plans for expansion of I-94, which would likely include sound walls which could create considerable clearance conflicts with a transmission line. Finally, as the potential routes extended away from the interstate toward the interconnection points, they extended through residential and commercial area where sufficient open and available right-of-way was not identified for the construction of two parallel lines. As it had been determined that development of the project as two parallel lines would be the least impacting to the community, these alternatives using two different, single line routes were dropped from consideration.

METC rejects the use of quad circuits as a less reliable solution, since the loss of

one pole would result in the loss of all four circuits rather than two, and contends that

quad circuit poles present greater threats to worker safety.126 METC also argues that

124 See Dauphinais, 3 Tr 277-277. 125 See 3 Tr 152-154, Exhibit A-42. 126 See Sutton, 3 Tr 124-125.

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the Tapping Variant would create three-terminal and four-terminal circuits, which are

respectively difficult and impossible to protect.127

This PFD concludes that METC reasonably rejected the use of the I-94 corridor

in its routing analysis. As Mr. Thornhill testified, although the I-94 corridor routings had

the lowest z-scores, they did not have less impact than the proposed and alternate

routes.128 The company reasonably identified a 160-foot right of way limitation.129 None

of the proposals to utilize that 160-foot right of way are clearly preferable. Splitting the

lines would require significantly additional right of way and clearing;130 using a quad-

circuit structure raises other reliability concerns; and the Tapping Variant may be difficult

to adequately protect.131 METC also identified other obstacles in addition to the

160 foot right of way limitation in the I-94 corridor, including potential conflicts with

highway expansion and existing infrastructure.132 If the only issue was METC’s

reluctance to use quad-circuit structures over a small portion of the route, further

analysis of the safety issues might be called for.133 But given the multiple obstacles

potentially hindering construction and maintenance, this PFD finds that METC

appropriately rejected use of the I-94 corridor.

On this basis, this PFD finds that should the Commission find the Weeds Lake

project justified, the company has identified reasonable and feasible routes for that

project.

127 See Capra, 3 Tr 106-107. 128 See 3 Tr 152, 155-156. 129 See Thornhill, 3 Tr 154. 130 See Thornhill, 3 Tr 140-141; 144. 131 Mr. Capra testified that three-terminal circuits are difficult to protect and four-terminal circuits are not possible to protect. Exhibit LO-53 suggests it is possible to construct the Tapping Variant without creating four-terminal circuits, but still does not establish that it would be practicable to overcome difficulties protecting the three-terminal circuits created under that proposal. 132 See, e.g. Exhibit S-5, quoted above; see also Exhibits LO-22, LO-23, LO-45, LO-55, A-42, and A-45. 133 See, e.g. Exhibit LO-54.

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VIII.

THREATS TO PUBLIC HEALTH AND SAFETY To show that the proposed transmission line does not pose an unreasonable

threat to public health and safety in accordance with section 8(5)(c) of Act 30, METC

presented the testimony of several witnesses. As discussed in section II above, Mr.

Silva evaluated EMF levels expected with the proposed line and concluded that, while

there are no recognized public exposure limits, the levels would be well below published

recommendations. Dr. Israel, a medical doctor specializing in cancer research,

reviewed the scientific literature regarding EMF exposure and testified there was no

reliable basis to conclude exposure to EMF causes or contributes to cancer. And Dr.

Mercer, a veterinarian and comparative toxicologist, testified that there is no basis to

conclude that exposure to EMF from the pipeline would cause adverse health effects in

animals. No party challenged the testimony of these experts.

Additionally, Mr. Koster testified that the company would obtain all required

environmental permits and comply with all applicable state and federal environmental

laws. Mr. Sutton testified that the transmission line would be designed and constructed

to maintain compliance with the Institute of Electrical and Electronics Engineers and

NESC requirements. No party challenged this testimony.

Thus, this PFD finds that METC has shown that the proposed transmission line

does not present an unreasonable threat to the public health and safety.

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IX.

TOWNSHIP ORDINANCES In its brief, the Township asks the Commission to find that METC must follow its

local ordinances that require a portion of the line to be placed underground. The

Township makes essentially two arguments: first, that the ordinances do not conflict

with state law or regulation because they do not regulate the location or construction of

the proposed transmission line;134 and second, that the Township ordinances are

reasonable and should not be abrogated.135

The Township’s principal ordinance purporting to affect the construction of the

line is Ordinance No. 525, which on its face addresses at least two concerns of the

Township: first, traffic safety; and second, preserving the rural character and zoning

plan for the Village. Ms. Heiny-Cogswell explained the purposes of the ordinance:

As stated in the Resolution, the purpose of Ordinance No. 525 was to: A. Maintain the rural character of the Township B. Prevent and relieve the utility, transportation and infrastructure burden on the Township’s streets serving numerous businesses and accommodating thousands of vehicles traveling at high speeds along the Township’s public highways and streets. C. Enhance traffic operational safety in the Township by avoiding construction of new poles and overhead lines, wires and related equipment and facilities in order to preserve and approve visibility and sight lines and avoid and eliminate vehicular accident impact on poles or overhead lines, wire and other overhead facilities and equipment.

134 See Township brief, pages 15-20, 15 (“Petitioners cannot cite any State law whatsoever which controls or requires the power lines in this case to travel overhead. Therefore, there is no conflict between the local ordinance and State law.”) 135 See Township brief, pages 6-13, 20-23, 20 (“[T]he MPSC must provide some rationale for finding that the Ordinance is invalid.”)

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D. Preserve the Township’s aesthetic environmental by avoiding the increase of unsightly above ground and overhead poles, lines, wires, or related equipment which would instead be out of view of the public. E. Promote the Master Plan and Zoning Ordinance of the Township. F. Support the development requirements of the Township’s Sit Condominium and Subdivision Ordinance. G. Better protect utility lines, wires and related equipment and facilities from weather damage, vehicular accident damage and other causes in order to prevent and reduce service interruptions and accompanying hazards. H. Preserve and enhance the safety of the Township’s residents living in residential dwellings in areas adjacent to and in close proximity to its streets and public rights-of-way, as well as persons traveling on streets from falling poles, overhead lines, wires and other related equipment and facilities. I. Preserve and improve the operational reliability of the utility-related services compared to what would be provided by overhead lines, wires and related equipment and facility. J. Preserve and enhance existing and potential residential dwellings, as well as businesses and business development, particularly in the areas identified as particularly sensitive in the Township’s Master Plan and Zoning Ordinance.136

In its reply brief, METC responds that the ordinances are undeniably preempted

by operation of section 10 of Act 30. METC further argues that underground

construction is prohibitively expensive, citing discovery responses estimating the cost of

underground construction at five to seven times the cost of overhead construction.

Section 10 of Act 30 states:

(1) If the Commission grants a certificate under this act, that certificate shall take precedence over a conflicting local ordinance, law, rule, regulation, policy, or practice that prohibits or regulates the location or construction of a transmission line for which the commission has issued a certificate.

136 See 3 Tr 295-296.

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(2) A zoning ordinance or limitation imposed after an electric utility, affiliated transmission company, or independent transmission company files for a certificate shall not limit or impair the transmission line’s construction, operation, or maintenance. (3) In an eminent domain or other related proceeding arising out of or related to a transmission line for which a certificate is issued, a certificate issued under this act is conclusive and binding as to the public convenience and necessity for that transmission line and its compatibility with the public health and safety or any zoning or land use requirements in effect when the application was filed.137

An ordinance that requires that transmission lines be placed underground clearly

“regulates the location or construction of a transmission line” within the meaning this

section. The Commission has recognized that under state law, the Commission has the

authority to determine how a transmission line should be constructed.138

Recognizing its authority to require aboveground construction, the Commission

has nonetheless reviewed local ordinances prior to making a determination.139 Section

7(d)(2) of Act 30 requires the application to identify local ordinances regulating the

location or construction of the transmission line. Section 8(4) of Act 30 provides: “The

commission may condition its approval upon the applicant taking additional action to

assure the public convenience, health, and safety and reliability of the proposed major

transmission line.” Correspondingly, 8(5)(d) of Act 30 adds as a criterion for granting an

application whether the applicant has agreed to conditions. While local requirements for

underground construction could be evaluated under subsections 8(5)(a) or (b) of Act 30,

the Commission has previously reviewed local ordinances after a discussion of the

justification and routing issues, in the context of whether additional conditions should be

required. 137 See MCL 460.570. 138 See May 31, 2007 order, Case No. U-14681, page 38. 139 See, e.g., May 31, 2007 decision in Case No. U-14861, discussed below.

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On this record, in response to the testimony of Ms. Heiny-Cogswell and Mr.

Milliken supporting the Township ordinances, the evidence presented by METC to

establish that underground construction would conflict with the transmission line is

limited to generalized statements regarding the costs of underground construction and

maintenance.140 Although Mr. Thornhill testified that the crossing of South 9th Street is

within an area zoned industrial or commercial and thus suitable for transmission lines,

he did not discuss the aboveground construction of the project in the context of the

traffic concerns identified in the ordinance and Township testimony.

Likewise, while METC asserted that the cost of underground construction is five

to seven times the cost of aboveground construction, METC did not provide a specific

estimate of the cost of underground construction limited to the 1,500 feet Ms. Heiny-

Cogswell testified the Township was requesting.141 Exhibit A-24 states that the cost of

aboveground construction is approximately $1.7 million per mile. At five times this

amount for underground construction, the cost of 1500 feet of underground construction

(approximately .28 miles) would be approximately $2.4 million, or approximately

$1.9 million more than the cost of aboveground construction. METC also did not

address whether underground construction could be paid for by the Township at its

option.

In contrast, when the Commission confronted the question whether underground

construction should be required to comply with a local ordinance in its May 31, 2007

decision in Case No. U-14861, the Commission had record evidence regarding the

140 See Exhibits A-24 and A-40. 141 See 3 Tr 301. Note that the Township brief also references an additional 2000 feet of underground construction through a portion of the Village Area referred to as the Village Core, but this PFD presumes the Township Supervisor’s testimony regarding the Township’s request in this proceeding is correct.

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costs and other detriments associated with underground construction, as well as

information specific to the community.142 In its January 29, 2008 order on rehearing in

that case, the Commission noted that underground construction would increase the total

construction cost by $25 million, from $15 million to $40 million:

The Commission is sensitive to the concerns of the Township relative to aboveground power lines. Further, the Commission recognizes the Township’s right to enact and enforce ordinances which are not in conflict with state or federal law. The requirement that the lines be underground is not the offensive element of the ordinance in this instance; the Township’s proposal for funding that requirement can not be enforced. If the Township wishes to give effect to the undergrounding requirement of its Ordinance No. 59, it must provide the funding to cover the incremental expense. On this record, it cannot establish a reasonable basis for imposing that expense on ITC or expecting ITC to collect the difference through its rates. 143

Because there is not sufficient record evidence to demonstrate a conflict between

the transmission line project and the underground construction required by the

municipal ordinance and requested by the Township in this proceeding, this PFD

recommends that the Commission condition approval of a certificate on underground

construction of the transmission line over 1500 feet within the Township, or require

METC to make an additional showing that any local benefits of underground

construction do not justify the burden on the ultimate ratepayers for the project. Should

METC choose to make this additional showing, it should also address whether the

Township should be permitted to pay the additional cost of underground construction, if

the Commission accepts the company’s analysis.

The Landowners also argue that preemption of the local zoning ordinances by

section 10 of Act 30 violates the separation of powers doctrine of the Michigan

142 See May 31, 2007 order, pages 37-40. And see January 29, 2008 order, Case No. U-14861, page 6. 143 See January 29, 2008 order, page 7.

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Constitution of 1963, and violates the Landowners’ substantive due process rights.

These arguments are addressed below.

X.

CONSTITUTIONAL CLAIMS

As noted above, the Landowners raise additional arguments not addressed

elsewhere in this PFD, which challenge the constitutionality of Act 30. These

arguments are addressed in turn below, recognizing that administrative agencies are

generally not empowered to find state statutes unconstitutional.

A. Taking

The Landowners argue that grant of a certificate by the Commission constitutes a

taking, and thus Landowners are entitled to a meaningful opportunity to be heard on the

question of the necessity for the taking. This argument is related to the argument

discussed above in section V addressing challenges to the adequacy of the public

meetings held pursuant to section 6 of Act 30. But in this context, the Landowners

appear to contend that the statute itself does not afford due process:

[T]he peremptory rights granted to the MPSC per the Act are not rationally related to a legitimate government purpose, but rather are designed to bestow a private benefit on a for profit entity at the expense of those communities and private property owners who happen to get in the way of METC’s profit motives, and prevent residents from effectively defending their rights to their own property through judicial procedures.144

METC responds in part by arguing that this proceeding is not a condemnation

proceeding, while acknowledging the binding nature of a necessity determination under

Act 30: 144 See Landowners brief, pages 29-30.

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METC’s condemnation power is conferred by Section 5 of The Electric and Gas Corporations Act, MCL 486.251 . . . As an independent transmission company, METC ‘s authority to condemn property is subject to the Uniform Condemnation Procedures Act (the “UCPA”), which provides that a Certificate issued under Act 30 is unconditionally “binding on the court.” . . . Although binding on the issue of necessity, receiving a Certificate in this proceeding would not relieve METC of its obligation to follow the UCPA in all other respects. If private property rights are affected by the Line, METC must still follow the procedures of the UCPA in any eminent domain proceeding that contain a plethora of procedural and substantive safeguards protective of private property rights. The constitutional safeguards the Landowners claim are threatened if the Commission grants a Certificate are secured by the UCPA. See Michigan Dep’t of Transportation v Tomkins, 481 Mich 184, 749 NW2d 716 (2008)(UCPA to be construed consistent with constitutional guarantees).145

This PFD notes that an additional constitutional safeguard is the availability of

judicial review of the Commission’s decision in this matter, pursuant to Art. 6, §28 of the

Michigan Constitution of 1963, which provides in pertinent part:

All final decisions, findings, rulings and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights or licenses, shall be subject to direct review by the courts as provided by law. This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record.146

B. Substantive Due Process

The Landowners argue that by allowing a Commission decision to exempt METC

from Oshtemo Township zoning ordinances, Act 30 violates the substantive due

process rights of the Landowners. The principal case cited by the Landowners is a

Pennsylvania case, Robinson Township v Commonwealth of Pennsylvania, 52 A3d 463

145 METC reply brief, pages 29-30. 146 See also MCL 462.26 and MCL 460.575.

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(PA Cmwlth 2012). In the Robinson case, the Pennsylvania court reviewed a statute

that prohibited municipalities from enforcing or adopting zoning ordinances limiting

hydraulic fracturing or “fracking” operations. The Landowners quote the following

passage from the court’s decision:

[B]y requiring municipalities to violate their comprehensive plans for growth and development, [the Pennsylvania statute] violates substantive due process because it does not protect the interests of neighboring property owners from harm, alters the character of neighborhoods and makes irrational classifications—irrational because it requires municipalities to allow all zones, drilling operations and impoundments, gas compressor stations, storage and use of explosives in all zoning districts, and applies industrial criteria to restrictions on height of structures, screening and fencing, lighting and noise.147

Further, they argue that Michigan law supports the same result.148

In response, METC argues that the Michigan Supreme Court has implicitly

rejected this argument in its decision in City of Taylor v The Detroit Edison Company,

475 Mich 109; 715 NW2d 28 (2006), holding that municipalities cannot regulate in a

manner inconsistent with state law.

This PFD finds that section 10 of Act 30 clearly gives the Commission the

authority to approve a transmission project that conflicts with local regulations on the

location or construction of that transmission line. Ordinarily, administrative agencies

lack the authority to find statutes unconstitutional.

147 See Id., 52 A3d 463, 484. 148 See Landowners brief, page 35, n89.

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XI.

CONCLUSION

Based on the foregoing discussion, this PFD recommends that the Commission

find that METC complied with the requirements of sections 6 and 7 of Act 30 by holding

public meetings, offering to meet with municipal officials, and filing an application

containing the required documentation.

This PFD further recommends that the Commission deny METC’s application for

a certificate of public convenience and necessity based on the conclusion in section VI

above that METC has failed to show that the benefits of the project justify the financial,

environmental, and social costs of the project as required by section 8(5)(a) of Act 30,

MCL 460.568(5)(a).

Should the Commission nonetheless conclude that METC has made the requisite

showing that the quantifiable and nonquantifiable benefits of the project justify

construction and serve the public convenience and necessity, this PFD recommends

that the Commission find that METC has identified reasonable and feasible preferred

and alternate routes for the project. Further, this PFD recommends that the

Commission find that the project does not present an unreasonable threat to the public

health and safety. Regarding the Township’s request that a small portion of the

transmission line be constructed underground, this PFD recommends that the

Commission grant the request or allow METC an opportunity to demonstrate that the

public convenience and necessity requires aboveground construction.

Should the Commission grant a certificate for the project, the $45 million

estimated cost should be used as the stated cost of the project.

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MICHIGAN ADMINISTRATIVE HEARING SERVICES For the Michigan Public Service Commission _____________________________________ Sharon L. Feldman Administrative Law Judge

Issued and Served: 4/29/13 drr