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PUBLIC SERVICE COMMISSION | CARDINAL-HICKORY CREEK

Utility regulators appeal power line ruling, seek to block discovery in conflict of interest case

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Two utility regulators are appealing a federal court judge’s order that would subject them to questioning over potential conflicts in a lawsuit filed by opponents of a proposed power line through southwest Wisconsin.

The state Public Service Commission filed an appeal Tuesday on behalf of Chair Rebecca Valcq and former Commissioner Mike Huebsch, who are named as defendants in the case brought by Driftless Area Land Conservancy and the Wisconsin Wildlife Federation.

The commission is challenging a ruling late last month by Judge William Conley, who found the plaintiffs have standing to argue their constitutional due process rights were violated when the PSC authorized construction of the $492 million project known as Cardinal-Hickory Creek.

The groups claim Valcq and Huebsch had perceived conflicts of interest that tainted the decision to grant the permit, which ultimately gives the utilities the right to take private property through eminent domain.

Rebecca Valcq

Valcq

The PSC is asking the 7th Circuit Court of Appeals to overturn Conley’s ruling that the commissioners are not protected by sovereign immunity.

While the case is not scheduled to be tried until the summer, the PSC argues the ruling would unlawfully allow the plaintiffs to request records and question the commissioners under oath through a process known as discovery.

“The decision is practically unreviewable on appeal from a final judgment because if the decision were overturned after trial it would be far too late,” the appeal states. “Appellants will have been subjected to exactly what the sovereign immunity defense is designed to avoid.”

The appeal comes days after the court ordered the defendants to comply with most of the plaintiffs’ discovery requests, including correspondence between the commissioners and utilities and other related parties.

“Obviously, not every personal interaction between a commissioner and an applicant creates an improper intrusion into the commission’s decision-making process, but some can,” wrote Magistrate Judge Stephen Crocker. “Defendants in this case cannot avoid pretrial discovery by claiming that they are only required to disclose information that fits their definition of a violation of the applicable conflict-of-interest rules.”

The plaintiffs’ attorney, Howard Learner, said the appeal raises arguments that were “thoroughly assessed and rejected by the circuit court” and accused the commission of attempting to stall the proceedings.

Construction is expected to start in 2021 barring a court injunction.

“The PSC shouldn’t be allowed to run out the clock by filing a weak appeal while the developers move forward with a huge transmission line and condemn family farms and private property,” Learner said.

Citing agency policy, a PSC spokesman declined to comment on the litigation.

The 7th Circuit Court of Appeals earlier this year overturned another of Conley’s decisions, allowing the utilities behind the project to take part in the court proceedings.

The utilities on Friday filed a separate appeal seeking to have the case thrown out.

Protections argued

The PSC had sought to have the case dismissed on the grounds that the Eleventh Amendment protects states and state agencies acting in their official capacity, but Conley found the commissioners play a direct role in defending and enforcing the permit, which he said precludes the claim of sovereign immunity.

Conley dismissed a separate claim that the line would result in an unjust taking of land for private benefit. He also dismissed Commissioner Ellen Nowak as a defendant.

The plaintiffs did not claim any conflict of interest by Nowak but argued the PSC itself should be barred from ruling on the project because the process was “contaminated.”

Approved Cardinal-Hickory Creek transmission line route

A joint venture of American Transmission Co., ITC Midwest and Dairyland Power Cooperative, the line will run between Dubuque, Iowa, and Middleton. The costs will be passed on to ratepayers in 12 states, with about $67 million falling to Wisconsin.

Focus on pair

The plaintiffs have asked the court to invalidate the PSC’s decision and nullify the construction permit, arguing Valcq and Huebsch had outside entanglements that create perceived conflicts of interest.

Prior to her appointment in 2019, Valcq spent 15 years as an attorney for the WEC Energy Group, the majority owner of ATC.

Mike Huebsch

Huebsch

Huebsch, who left the commission in February, served on an advisory committee to the Midwest grid operator, MISO, which was working with ATC to gain approval of the line. In his role with MISO, the opponents argue, Huebsch met with and advised a party to a case over which he was presiding and did not disclose the outside communications.

The plaintiffs have since discovered that Huebsch later applied to be CEO of Dairyland Power Cooperative, a minority owner of the line, and exchanged texts with utility executives.

All three PSC members objected to the recusal requests before unanimously approving the line in September 2019, with Valcq calling the allegations “opportunistic at best and at worst contemptible.”

The PSC argues the accusations of bias, brought after the initial vote to approve the project, are unfounded and that no one’s land has been taken, rendering their due process claim moot.

Driftless Area Land Conservancy and the Wisconsin Wildlife Federation, along with Dane and Iowa county governments and several municipalities along the proposed route, have also challenged the permit in state courts, where Dane County Circuit Judge Jacob Frost has asked for arguments on whether he should consider text messages and emails between Huebsch and leaders of MISO and Dairyland.


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