Yes, it was a good day at the Appellate Court.  Myself, Carol Overland representing NoCapX & U-CAN, and Paula Maccabee, representing CETF, had a good time and, well, either they were hearing what we were arguing or they had indigestion.  There were what seemed heartfelt questions, and … well… more questions…

Issues 1 and 3 raised by NoCapX and U-CAN were the focus of questions today:

1. Whether the Commission’s failure to enter and consider evidence of significantly decreased demand in NoCapX’s Offer of Proof, or remand to the Administrative Law Judge for further proceedings regarding need, constitutes an error of law.

3. Whether the Commission’s determination that the Environmental Report prepared by the Department of Commerce was adequate was an error of law.

THEME OF THE DAY: AN OFFER OF PROOF WAS SUBMITTED — WHY WOULDN’T THE PUC WANT TO KNOW ABOUT DECREASED DEMAND?

And the answers provided by the PUC and Applicants didn’t seem satisfying.  But again, maybe it was indigestion, tight shoes, or … or…

We shall see, in about 90 days.  My notes are pretty sketchy.

We all appeared before Judge Schumaker, Judge Klaphake, and Judge Crippen (no photo available).

Here are some examples of questions.  Don’t pay much attention to the “quotes” because these are not verbatim quotes, just the jist of what they were asking.

When Paula was up, she was up first, there were a lot of questions about forecasts, whether CETF or other parties had produced forecasts, and there was some frustration that forecasts are ephemeral.  Paula went over options, that system issues, their failure to prove need, and the Mississippi River crossings (doesn’t the Minnesota River matter?).  She handled the question well about “Doesn’t environmental review happen in routing?” —  maybe that was in rebuttal?

Given that exchange about forecasts, I noted right away that we were asking that it be remanded back to the PUC to be reopened for additional demand information.  And to their questions, we do have concrete new information, from Xcel’s SEC filings, their 10-Ks, which show (and I ran down a few of these):

… a 1,200MW drop in demand.

Judge Klaphake asked whether we’d produced forecasts, and I said we had not, that we couldn’t afford forecasting, there is no Intervenor Compensation in Minnesota, and that’s the PUC’s job.  He also asked whether there was any specific information in the Offer of Proof in the way of forecasting, and I replied that in the Wall Street Journal article on CEO said that demand was so far down that companies planning infrastructure had better take a closer look, but no, no forecasts specifically.

I noted Respondents were claiming this is just a blip, short term, but that’s not the case, it’s been years and has put this project out at least the three years that demand has dropped, and likely more.

I stressed that decreased demand affects all types of need, local load, regional system reliability, and generation outlet.  When demand goes down, the system isn’t as stressed, the bathtub is below the drain, not overflowing.  And there’s no need for new generation, no need for new generation outlet.

I brought up the Minnesota River, that everything about the Mississippi also applies to the Minnesota, and that it’s crucial to look at Certificate of Need stage inquiry about system analysis because it won’t happen anywhere else.  I also raised RUS review was ongoing and that the Environmental Report should have been done in conjunction with RUS.

The minute Alison Archer, Asst. A.G. from the PUC got up, and started talking about threats of brownouts (really!), Judge Crippen heard about 30 seconds and asked, “We’re going nowhere here, we give deference to agency decision.  How do we handle new evidence?”  She wandered around and didn’t get to the point.

Judge Schumaker (? I think?):  “We’re wanting to know whether it’s a short term decrease in demand or long term… weren’t there statements by folks who generation, saying that demand was going down, an indication that there was a longer term decrease?  Archer’s response noted that the three lines are needed for reasons other than forecast.

Judge Klaphake asked the question that was the theme of the day: “Why would the Commission NOT want to know?”  And Archer stated that the Commission determined that decreased demand was short term and would not impact the long term decision.

Judge Crippen:  Unnecessary delay — is there any evidence of a need to hastily complete this project?  Archer: No, it hasn’t been hasty, this process has been quite detailed, but there’s stress on the system… The Commission determined there was no systematic bias…

Judge Klaphake – “Why is demand low?  Was there inquiry?  Are there other options bringing down need?”

Judge ? to Mike Krikava: What harm is there in taking the time to look at this?  Krikava: Delay…

In rebuttal, Paula hit on some good topics, but I didn’t get my rebuttal time.  What I was ready to address, what I wanted to say, was that:

The NERC report IS in the record, and also the most recent one in the Offer of Proof, noting that the system is fine for local load but the issue is that the system is stressed because of market activity, wholesale transactions not contemplated when the current grid was designed.  The system is NOT as stressed, fewer TLRs, etc., this is NOT only a reliability issue, decreased demand affects all types of need.

Environmental review yet to come, in routing?  NO, Commerce is refusing to do joint review with RUS.

Oh well, maybe next time.  And there will be a next time because we’re arguing the Environmental Review piece in the LaCrosse routing right now — the PUC does not want to order Commerce to do a joint EIS with Rural Utilities Service, and Commerce does not want to do joint EIS with Rural Utilities Service, and if they keep this up, we’ll have to challenge that!

A good time was had by some… and a not so good time was had by others!

We shall see… 90 days?