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Blogs | January 15, 2015
3 minute read

No showing of “necessity” is required to issue a certificate of “public convenience and necessity” for major electric transmission lines, says COA

What’s in a name?  Though the legislature dubbed it a “certificate of public convenience and necessity,” that does not mean public utilities must prove “necessity” to obtain a certificate for the construction of major transmission lines, according to In re Application of Mich Elec. Transmission Co., Nos. 317872, 317893.  While the application must include information “supporting the need for the [line],” the Court of Appeals observed that none of “Act 30’s” criteria require the Public Service Commission (“PSC”) to determine that the new line is necessary before granting the certificate. MCL 460.567(2)(f).  It also held that local governments cannot exact a stricter standard through their own ordinances.

In No. 317872, a group of landowners argued that the PSC failed to follow Act 30’s requirements for granting a certificate to Michigan Electric Transmission Company (“METC”). Act 30 states that the PSC shall issue a certificate if the “public benefits of the proposed major transmission line justify its construction,” “the proposed or alternative route is feasible and reasonable,” and “the proposed major transmission line does not present an unreasonable threat to public health or safety.” MCL 460.568(5). The plaintiffs argued that the METC failed to show that the new transmission line was necessary. The Court of Appeals found, however, that “necessity” was not required by Act 30. While the METC’s application needed to include information “supporting the need for the [line],” the PSC was not required to deem the new line necessary. MCL 460.567(2)(f).

Next, the Court found that the PSC’s findings were supported by the requisite evidence. Experts testified for each party. Michigan case law holds that the testimony of a single expert constitutes substantial evidence in PSC cases. So, the PSC was justified in its finding for the METC.

The last stroke in No. 317872 was the Court’s holding that the PSC did not violate due process in granting the certificate. The PSC held public meetings regarding the certificate. It also held a contested case hearing on the METC’s application. The plaintiffs participated in that hearing. Given those facts, the PSC did not violate due process.

In No. 317893, Oshtemo Township argued that a local ordinance should prevail over a conflicting CPCN issued by the PSC under Act 30. The Michigan Constitution, after all, grants broad powers to municipalities in the management of public places. See Mich. Const. art. 7, § 29 (1963). Oshtemo’s ordinance required the METC to install part of the new power lines underground. The METC’s, on the other hand, was to build the lines entirely overhead. Michigan case law makes clear that municipalities wield power subject to the greater forces of the constitution and state laws. In short, municipal power is not absolute. Because the certificate was issued properly under Act 30, Oshtemo’s ordinance lost the battle.