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FIRST DIVISION
March 15, 2004

Plaintiff, the Village of Orland Hills (Orland Hills), brought this action seeking adeclaratory judgment that defendant Citizens Utilities Company of Illinois (Citizens)⁽¹⁾ wasobligated to provide water service to an undeveloped parcel of land recently annexed into OrlandHills and that Citizens' water supply contract with defendant, the Village of Tinley Park (TinleyPark), did not preclude such service. The parties filed cross-motions for summary judgment. Thecircuit court granted plaintiff's motion for summary judgment and denied defendants' jointmotions for summary judgment. This appeal followed. For the reasons that follow, we reversethe judgment of the circuit court.

BACKGROUND

The underlying facts of this case are not in dispute. In 1962, Orland Hills, then known asthe Village of Westhaven, enacted Ordinance 62-0-018 which granted to the predecessor ofCitizens, the Fernway Utility Co., "the franchise, right and privilege of supplying the Village ofWeshaven and all the inhabitants of said Village within the present and future corporate limits ofsaid Village with water." The franchise expired by its terms on December 31, 1991. It isundisputed that since the expiration of the ordinance, Citizens and Orland Hills have continued toact consistently with its terms. In particular, Citizens has continued to provide water service tothe residents of Orland Hills.

From 1962 to 1982, Citizens serviced the residents of Orland Hills with well water. InFebruary of 1982, however, Citizens entered into a water supply contract (hereinafter, TinleyPark/Citizens Water Supply Contract, or Water Supply Contract) with adjacent municipalitieswhich had access to Lake Michigan water, namely, the Village of Tinley Park, the City of OakForest and the Village of Oak Lawn (Oak Lawn), in order to provide Lake Michigan water, ratherthan well water, to residents of Orland Hills. As was stated before the circuit judge, "LakeMichigan water is infinitely preferable to well water." Pursuant to the terms of that contract,Citizens agreed to purchase Lake Michigan water from Oak Lawn and Tinley Park agreed toallow Citizens to receive Lake Michigan water through its water distribution system. The WaterSupply Contract also contained several restrictions. First, Citizens could not extend its waterservice within Tinley Park, nor could Citizens use the Lake Michigan water purchased under theWater Supply Contract to service any customers within a restricted area referred to as the "TinleyPark planning area as shown on the map attached hereto." Second, the Water Supply Contractprohibited Citizens from connecting its water distribution system, except for emergency purposes,to any wells, so long as its water distribution system was connected to Tinley Park's water worksdistribution system.

Citizens is an Illinois public utility regulated by the Illinois Commerce Commission (theCommission). The Commission expressly approved the Water Supply Contract after conductinghearings. In 1985, upon a regulatory directive by the Commission, the term of the Water SupplyContract was extended through September 30, 2006.

Attached to the Water Supply Contract and setting forth the restricted area in whichCitizens may not provide water service was a map of the "Tinley Park planning area" as it existedin 1982. It encompassed an area of southwest Cook County located south of 171st Street andbounded on the east by 86th Avenue, on the west by Route 45, and on the south by Interstate 80. The "epicenter" of this lawsuit is the so-called "A&M Parcel"⁽²⁾ located within the restricted areadescribed in the Water Supply Contract. The A&M Parcel consists of 11