Glidepath Development LLC v. Illinois Commerce Commission

          Petition for Review of Orders of the Illinois Commerce Commission. Docket No. 17-0331

          JUSTICE REYES delivered the judgment of the court, with opinion. Justice Burke concurred in the judgment and opinion.

          OPINION

          REYES JUSTICE.

         ¶ 1 Commonwealth Edison Co. (ComEd) filed a petition before the Illinois Commerce Commission (Commission) pursuant to the Public Utilities Act (Act) (220 ILCS 5/1-101 et seq. (West 2016)) for approval to construct a microgrid in the Bronzeville area of Chicago. GlidePath Development LLC (GlidePath), a vendor of distributed energy resources, requested leave to intervene in the matter. The administrative law judge (ALJ) denied the petition as well as GlidePath's amended petition to intervene. GlidePath then moved for an interlocutory appeal before the Commission, which was also denied. After an extensive evidentiary hearing was conducted, the Commission entered its final order approving ComEd's petition. Thereafter, GlidePath sought further review of its petitions to intervene, which the Commission also denied. GlidePath then filed its notice of appeal with this court naming the Commission, ComEd, and the other intervening parties, as respondents.^[1]

         ¶ 2 On appeal, GlidePath maintains that the Commission applied the incorrect law when it denied the petitions to intervene, failed to make adequate findings to support its decisions, and that the decisions were not supported by substantial evidence. GlidePath requests this court vacate the Commission's final order approving the project, reverse each of the orders denying its petitions to intervene, and remand the matter to the Commission for rehearing on ComEd's petition with GlidePath's full participation as an intervening party. In response, both the Commission and ComEd maintain the appeal is moot in light of events that occurred subsequent to the entry of the Commission's final order. For the reasons that follow, we agree with respondents and dismiss the appeal as moot.

         ¶ 3 BACKGROUND

         ¶ 4 ComEd is a public electric utility responsible for delivering electricity to a majority of northern Illinois through its network of electric distribution power lines known as a "distribution grid." Traditionally, this distribution grid was designed to be a one-way delivery system, essentially taking power from a large central generating station and supplying it to customers. New technologies have since been invented that have created new ways of distributing power and improving reliability against severe weather disturbances and catastrophic events. One of these new technologies is known as "distributed energy resources"-small-scale devices, such as solar panels or battery storage, that can generate or store power. By employing the use of distributed energy resources as part of a microgrid (a small power grid within the larger grid which can disconnect from the larger grid and operate independently), these distributed energy resources can be relied on to supply energy when the larger grid is unable to do so. GlidePath is a company in the business of developing distributed energy resources and interconnecting those facilities to the distribution grid.

         ¶ 5 As a public utility, ComEd is governed by the Act and therefore, it must obtain an order from the Commission when it seeks to develop new technologies and pass the cost on to the consumer. To this end, on July 28, 2017, ComEd filed a verified petition with the Commission requesting the authorization to carry out an "innovative distribution microgrid demonstration project and study" in the Bronzeville neighborhood of Chicago (Bronzeville Microgrid). According to the petition, ComEd chose the Bronzeville location because the microgrid could be overlaid on the existing utility grid in an urban area, was capable of clustering by connecting to an adjacent microgrid owned by the Illinois Institute of Technology, and could be operated in tandem with the Illinois Institute of Technology microgrid. The petition further alleged that the Bronzeville Microgrid would be the first project of its kind in the United States and would be funded, in part, by United States Department of Energy grants. The goal of the Bronzeville Microgrid was to "generate real world planning and operational experience with, a range of learnings about, cutting-edge microgrid technologies, the interconnection of microgrids, and the planning and operation of a clustered and/or community microgrid." According to ComEd, this project would benefit consumers and the public generally with the increased knowledge it would gain regarding distribution grid design and operation. ComEd also alleged in its petition that it intended to enlist third parties to develop the Bronzeville Microgrid's distributed energy resources either through a lease, operating agreement, or other economic arrangement, but sought permission from the Commission to own the distributed energy resources if those options were unavailable.

         ¶ 6 ComEd requested the following relief from the Commission in its petition: (1) a finding that it is reasonable and prudent for ComEd to proceed with the Project; (2) that the operating and capital investment costs associated with the project are distribution costs that are properly recoverable in distribution rates; (3) the reasonable and prudent costs of the project are recoverable from all delivery services customers; and (4) that the project would not adversely affect the State's retail electric competition.

         ¶ 7 Numerous entities and organizations were granted leave to intervene in the proceedings without objection. Among these were the State of Illinois, Citizens Utility Board, Environmental Defense Fund, Direct Energy Services and Direct Energy Business, Environmental Law and Policy Center, Vote Solar, Illinois Competitive Energy Association, Retail Energy Supply Association, and Illinois Power Agency.

         ¶ 8 On August 14, 2017, GlidePath filed its verified petition to intervene in the matter. In the petition, GlidePath set forth that it was in the business of competitive energy generation, supply, and storage within ComEd's service territory and that it had an interest in the "ownership of generation and how GlidePath, as a distributed energy resource developer, could serve customers within the proposed microgrid." ComEd objected on the ground that GlidePath had alleged only a business interest of the type that typically did not merit intervention. GlidePath did not file a timely reply. On August 28, 2017, the ALJ denied GlidePath's petition based upon ComEd's unopposed objection.

         ¶ 9 GlidePath filed a motion for leave to file its response to ComEd's objection on August 29, 2017. In its response, GlidePath asserted it was the only potential intervenor that was a developer of distributed energy resources and therefore it should be allowed to intervene where one of the main issues is whether third-party ownership of distributed energy resources would be more economically efficient. According to GlidePath, this issue was directly within its experience, interest, and expertise. GlidePath further argued that it had an interest in the ownership of the distributed energy resources included in the microgrid project. GlidePath also expressed its concern with ComEd's potential ownership of the distributed energy resources connected to the microgrid project. ComEd did not oppose GlidePath's motion and it was granted. On reconsideration, the ALJ still denied GlidePath's petition to intervene. In so ruling, the ALJ found that GlidePath's petition and response merely alleged GlidePath had a "general business interest in the subject matter of this proceeding." The ALJ observed that GlidePath "is not a customer of ComEd but rather is a vendor in ComEd's service territory." The ALJ concluded that the petition must be denied because "GlidePath neither establishes a cognizable legal interest necessary to support intervention in this docket nor an adverse impact on such an interest."

         ¶ 10 On October 4, 2017, GlidePath filed its first amended verified petition to intervene, in which it alleged more facts surrounding its interests in the cause. Specifically, GlidePath stated it has "developed distributed energy resources for interconnection to the grid in ComEd's service territory," and that it or "its affiliates would be interested in bidding on opportunities to develop, own, or operate generation or storage for the microgrid." GlidePath stressed its interest, as a developer of distributed energy resources, regarding whether ComEd or other third party developers would own the distributed energy resource assets that were connected to the microgrid. According to the petition, GlidePath's concerns were to "ensure that such anticompetitive practices which could favor ComEd as against third party providers of [distributed energy resources] are not included in the project." GlidePath also asserted its interest in "developing and promoting policies necessary to support energy storage and clean energy technologies."

         ¶ 11 GlidePath attached a verified offer of proof to its amended petition which set forth the proposed testimony of Dan Foley, the principal of GlidePath. According to the offer of proof, Foley would testify that GlidePath had applied to be a provider of distributed energy resources for the Bronzeville Microgrid. Foley would explain that GlidePath developed three 20MW battery distributed energy resource facilities in the ComEd footprint which operate in Joliet, West Chicago, and McHenry, Illinois and is developing another facility in Marengo, Illinois. GlidePath also developed one 10MW solar distributed energy resource in the ComEd footprint of Marengo, Illinois. Foley would also testify regarding GlidePath's concerns about the Bronzeville Microgrid, including: (1) ComEd's interpretation of the rules for interconnecting the distributed energy resources; (2) "ComEd's claims that batteries connected to the distribution system are not [Federal Energy Regulatory] or [Commission] jurisdictional;" (3) ComEd's ability to manage time, scope and budget of distributed energy resources projects; (4) ComEd's unwillingness to share an unredacted copy of its Department of Energy grant application referenced in the verified petition; (5) ComEd's use of the distribution tariff; (6) ComEd's interpretation of the tax gross up requirement for interconnections; and (7) the lack of transparency of the distribution interconnection process, including the absence of a published queue, the ...