Caterpillar, Inc. v. Illinois Commerce Comm'n

Case Date: 03/24/2004
Court: 1st District Appellate
Docket No: 1-03-0263, 1-03-1706 cons. Rel

THIRD DIVISION
March 24, 2004




Nos. 1-03-0263 and1-03-1706 (consolidated)


 

CATERPILLAR, INC.; ABBOTT LABORATORIES,
INC.; FORD MOTOR COMPANY; A FINKL AND
SONS COMPANY; DAIMLER CHRYSLER
CORPORATION; MODERN DROP FORGE
COMPANY AND GENERAL MOTORS
CORPORATION,

                    Petitioners,

v.

 

ILLINOIS COMMERCE COMMISSION;
COMMONWEALTH EDISON COMPANY; PEOPLES
ENERGY SERVICE CORPORATION; CENTRAL
ILLINOIS LIGHT COMPANY; THE PEOPLE OF
COOK COUNTY; THE PEOPLE OF THE STATE OF
ILLINOIS; ILLINOIS POWER COMPANY;
BLACKHAWK ENERGY SERVICES, LLC;
MIDAMERICAN ENERGY COMPANY; UNITED
STATES DEPARTMENT OF ENERGY; CITIZENS
UTILITY BOARD; METROPOLITAN WATER
 RECLAMATION DISTRICT; CHICAGO AREA
CUSTOMER COALITION; AMEREN CIPS AND
AMEREN UE; BUILDING OWNERS AND
MANAGERS ASSOCIATION; TRIZEC PROPERTIES,
INC; NATIONAL ENERGY MARKETERS
ASSOCIATION; AES NEW ENERGY, INC;
 METROPOLITAN CHICAGO HEALTHCARE
COUNCIL; and THE CITY OF CHICAGO;

                    Respondents.

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On direct appeal from the
Illinois Commerce
Commission,
Docket No.  02-0479


 

JUSTICE KARNEZIS delivered the opinion of the court:

This consolidated appeal arose as a result of a petition filed by CommonwealthEdison (ComEd) to declare certain electrical services "competitive" and to allow certaintariff amendments implementing the competitive service. Numerous parties intervened,including: Peoples Energy Service Corporation; Central Illinois Light Company; thePeople of Cook County; the People of the State of Illinois; Illinois Power Company;Blackhawk Energy Services, LLC; MidAmerican Energy Company; Illinois IndustrialEnergy Consumers; the United States Department of Energy; Citizens Utility Board;Metropolitan Water Reclamation District; Chicago Area Customer Coalition; AmerenCIPS and Ameren UE; Building Owners and Managers Association; Trizec Properties,Inc; National Energy Marketers Association; AES NewEnergy, Inc; and the MetropolitanChicago Healthcare Council. Appearances were also filed by the City of Chicago andthe Illinois Commerce Commission.

Appellants Caterpillar, Inc.; Abbott Laboratories, Inc.; Ford Motor Company; AFinkl & Sons Co.; Daimler Chrysler Corporation; Modern Drop Forge Company; andGeneral Motors Corporation participated in the proceedings collectively as the IllinoisIndustrial Energy Consumers (IIEC) and filed separate appeals. Both appeals concernthe petition filed by ComEd. We affirm the Commission's determination finding certainelectrical services competitive (appeal number 1-03-0263) and affirm its order settingthe "Rate Hourly Energy Price" as modified (appeal number 1-03-1706).

Proceedings Before the Commission

On July 19, 2002, ComEd filed a petition with the Commission to declare certainelectrical services "competitive" pursuant to section 16-113 of the Public Utilities Act(Act) (220 ILCS 5/16-113 (West 2000)). Section 16-113 provides in part:

"An electric utility may, by petition, request the Commission todeclare a tariffed service provided by the electric utility to be acompetitive service. *** The Commission shall declare the service to be acompetitive service * * * if the service or a reasonably equivalentsubstitute service is reasonably available * * * at a comparable price fromone or more providers other than the electric utility or an affiliate of theelectric utility, and the electric utility has lost or there is a reasonablelikelihood that the electric utility will lose business for the service to theother provider or providers * * *." 220 ILCS 5/16-113 (West 2000).

ComEd's petition concerned its Rate 6L - Large General Service (Rate 6L),which provides electric power and energy to large commercial and industrial customerswith loads of 3 megawatts (3MW) or greater. The petition alleged that because therewas equivalent service available at comparable prices from other providers, ComEd'sRate 6L should be declared competitive. The petition also requested approval of the"related tariff amendments," which refers to the rate or cost of the service if it weredeemed competitive.

Shortly thereafter, several parties moved to dismiss the petition or, in thealternative, to bifurcate the proceedings. The Commission denied the motion todismiss the proceedings but agreed to bifurcate the proceedings. The Commissionwould first determine whether to declare Rate 6L competitive. Then, if Rate 6L wasdeclared competitive, the Commission would determine what "tariff," or rate, wouldapply to the service.

After several hearings addressing whether Rate 6L should be declaredcompetitive, the Commission issued an "interim order" on November 14, 2002. Theinterim order did not specifically grant or deny ComEd's petition. The interim orderstated it would allow the petition to take effect by "operation of law" on the 120th dayfollowing the filing of the petition pursuant to section 16-113, which occurred onNovember 16, 2002. Section 16-113 provides, in part:

"The Commission shall make its determination and issue its final orderdeclaring or refusing to declare the service to be a competitive servicewithin 120 days following the date that the petition is filed, or otherwisethe petition shall be deemed to be granted; provided, that if the petition isdeemed to be granted by operation of law, the Commission shall notthereby be precluded from finding and ordering, in a subsequentproceeding initiated by the Commission, and after notice and hearing, thatthe service is not competitive * * *." 220 ILCS 5/16-113 (West 2000).

The Commission's order included a summary of the evidence as well as findingsof fact. It also explained its reason for allowing the petition to take effect by operationof law. The interim order specifically stated, "the Commission, in its review of theevidence, finds that competitive conditions in the ComEd service territory for Rate 6Lcustomers 3MW and greater exist in considerable degree; however, there are sufficientconcerns about recent developments that cause the Commission to refrain at this timefrom either granting or denying ComEd's petition." Appellants filed a petition forrehearing with the Commission to reconsider the Commission's interim order, whichwas denied. Appellants filed an appeal on January 31, 2003, which was givenappellate number 1-03-0263.

The Commission held several additional hearings to determine what rate shouldapply to ComEd's Rate 6L service. ComEd proposed a rate they referred to as "RateHourly Energy Pricing" (HEP), which would provide hourly energy prices to consumersthe day before the service is provided. The Commission entered an order on March 28,2003, adopting the Rate HEP, with some modifications. Appellants filed a petition forrehearing with the Commission to reconsider the order, which the Commission denied. Appellants filed an appeal on June 18, 2003, from the Commission's March 28, 2003,order, which was given appellate number 1-03-1706.

Appeal Number 1-03-0263

Appellants contend: (1) the interim order is unlawful because the Commissionlacked authority to state in the interim order that the petition would take effect byoperation of law; (2) the Commission was required to either grant or deny the petitionbecause it held hearings on the matter; (3) ComEd failed to meet its burden that Rate6L should be declared competitive; and (4) the Commission's conclusion that theevidence regarding the number of consumers that switched from ComEd's Rate 6Lservice to other competitors was not supported by substantial evidence.

It is clear from section 16-113 that the Commission had three options; it coulddeclare the service competitive; refuse to declare the service competitive; or, do neitherand let the petition be deemed granted by operation of law. The latter alternativewould, in effect, decide that the service was competitive with the additional factor of theCommission retaining the ability to review or reconsider its finding. Section 16-113gives the Commission a great deal of flexibility.

Appellants first contend the "interim order" issued by the Commission was"unlawful" because the Commission lacked authority to state that the petition, or atleast a portion of the petition (i.e., that the service was competitive) would take effect"by operation of law."

We find nothing in the Act that prohibits the Commission from preparing or filingan interim order. We note that appellants have cited no authority that would precludethis action by the Commission. They simply state that it is unlawful. The Commissionhas the power to administer its proceedings and can, if it chooses, file "interim orders." The interim order, in essence, became a final and appealable decision as to thequestion of "competitive service" 120 days after the filing of the petition and after thepetition for rehearing was denied. We do not treat this case as an appeal of the interimorder; rather, it is an appeal of the determination that the service was competitive.

Appellants next suggest the Commission was "required" to either grant or denythe petition because it held hearings on the matter. However, nowhere in the Act is this"requirement" stated. Rather, the Commission may or may not order hearings andwhether hearings are held does not limit the Commission's actions. Clearly, it maygrant or deny a petition, or take no action on the petition.

Appellants next argue that because "the Commission was unable to find ComEdhad met its burden of proof," the decision finding the service competitive must bereversed. The interim order does not state that ComEd failed to meet its burden. Theorder specifically stated "competitive conditions in the ComEd service territory for Rate6L customers 3 MW and greater exist in considerable degree." The order thencautioned, however that "there are sufficient concerns about recent developments thatcause the Commission to refrain at this time from either granting or denying ComEd'spetition." Nowhere does the order state that ComEd failed to meet its burden.

Lastly, appellants contend the evidence did not support the finding that theservice was competitive. Our standard of review for reviewing an administrativeagency's decision is governed by the Administrative Review Law. 735 ILCS 5/3-101 etseq. (West 2000). It provides that our review extends to all questions of law and factpresented by the entire record. Abrahamson v. Illinois Department of ProfessionalRegulation, 153 Ill. 2d 76, 88, 606 N.E. 2d 1111, 1117 (1992). The statute furthermandates that an administrative agency's factual findings are "held to be prima facietrue and correct." 735 ILCS 5/3-110 (West 2000); see also Antonelli v. Board ofTrustees of the Hillside Police Pension Board, 287 Ill. App. 3d 348, 353, 678 N.E. 2d773, 776 (1997). Courts conducting administrative review are prohibited fromreweighing the evidence or making an independent determination of the facts. Abrahamson, 153 Ill. 2d at 88, 606 N.E. 2d at 1117. Rather, we are limited toascertaining whether the factual findings of the agency are against the manifest weightof the evidence. Abrahamson, 153 Ill. 2d at 88, 606 N.E. 2d at 1117. Factual findingsare against the manifest weight of the evidence only where all reasonable andunbiased persons would agree it is clearly evident the administrative agency erred andshould have reached the opposite conclusion. See La Salle Partners, Inc. v. IllinoisProperty Tax Appeal Board, 269 Ill. App. 3d 621, 632, 646 N.E. 2d 935, 942 (1995). Ifthe record contains evidence supporting the agency's decision, it should be affirmed. Abrahamson, 153 Ill. 2d at 88, 606 N.E.2d at 1117.

The question before this court is whether the Commission's decision issupported by the evidence. The Commission heard evidence "for and against" findingthe service competitive. The Commission sided with ComEd. Essentially appellantsurge this court to reconsider the Commission's finding, rather than arguing the findingwas not supported by the evidence. We reiterate that our role is not to substitute ourviews for those of the Commission. Appellants have not shown the Commission'sfindings are against the manifest weight of the evidence. We affirm the decision of theCommission finding Rate 6L to 3 MW and greater customers competitive.

Appeal Number 1-03-1706

Appellants contend the Commission's order of March 28, 2003, is unlawfulbecause the Rate HEP allows ComEd to recover a transition charge. The order statesin pertinent part as follows:

Rate HEP would consist of:

(a) charges calculated to equal the charges for deliveryservices;

(b) charges for transmission services and ancillarytransmission services;

(c) charges calculated to equal the charges for the supply ofelectric power and energy;

(d) "a charge expressed in cents per kilowatt-hourcalculated to equal the charge determined using the formula setforth in the definition of the transition charge in Section 16-102 ofthe Act, except that:

(i) the market value in item (3) of such formula that isused to determine such charge shall be determined in accordancewith Section 16-112 of the Public Utilities Act except that suchmarket value will not include any adjustments or any addersunderlying the Market Value Energy Charges of Rider PPO-PowerPurchase Option (Market Index) for the corresponding ApplicablePeriod A, however, such value will be increased for systemaverage line losses and will be increased by 10% consistent withthe increases for system average line losses and the contributionto fixed cost adder included in Price;

(ii) such charge would not be less than zero;" and

(e) metering charges.

Appellants' contentions with respect to the March 28, 2003, order focus onsubsection (d) of the Rate HEP. Appellants contend that subsection (d) is a "transitioncharge," which ComEd is not authorized under the Act to collect. They argue the Actonly permits ComEd to recover a transition charge from those customers who takedelivery service as well as power and energy services from suppliers other thanComEd. They maintain that here, because the customers are taking services fromComEd, ComEd cannot impose a transition charge.

The Commission contends that subsection (d) is not a transition charge. Itargues it is a charge, which is based in part on the transition charge formula in section16-102 of the Act; however, it differs from a transition charge.

Upon review, we are mindful that an order of the Commission is considered to beprima facie reasonable, and the party appealing the decision bears the burden ofovercoming this presumption of reasonableness. 220 ILCS 5/10-201(d) (West 2000). With this consideration in mind, we do not believe appellants have overcome theirburden of establishing the Commission's order was unreasonable. They have providedno compelling argument that subsection (d) is a transition charge. Appellants spend agreat deal of effort arguing that the Rate HEP cannot include a transition charge, yetthey do not specifically argue how subsection (d) qualifies as a transition charge. Section 16-102 provides the definition of a transition charge, which consists ofnumerous subsections too lengthy to reiterate. Nowhere in appellants' brief do theyspecifically argue how subsection (d), which does not include all of the components ofa transition charge, qualifies as a transition charge, other than the fact that it is acharge based in part on the transition charge formula. It is appellants' burden to provethe Commission's order is unreasonable, and they have failed to do so here. Further,the Commission's order specifically stated the Rate HEP does not include "theimposition of [a] delivery service transition charge." We conclude the Commission'sMarch 28, 2003, order adopting the Rate HEP was reasonable.

Accordingly, we affirm the Commission's orders in appeal number 1-03-0263 andappeal number 1-03-1706.

Affirmed.

SOUTH, J. and HALL, J. concur.