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Union Electric Co. v. Commerce Com.

OPINION FILED MARCH 28, 1968.

UNION ELECTRIC COMPANY, APPELLANT,

v.

THE ILLINOIS COMMERCE COMMISSION ET AL., APPELLEES.



APPEAL from the Circuit Court of Jersey County; the Hon. HOWARD LEE WHITE, Judge, presiding. MR. CHIEF JUSTICE SOLFISBURG DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order of the circuit court of Jersey County, affirming an order of the Illinois Commerce Commission. The order of the Commission entered on June 22, 1966, purported to amend or modify a certificate of convenience and necessity, previously granted to Union Electric Company to furnish natural gas service to an area in Jersey County, by reducing the area and granting a certificate of convenience and necessity to Central Illinois Public Service Company to serve, inter alia, the major part of the area previously allocated to Union. From this order Union appeals directly to this court.

Both Union Electric Company and Central Illinois Public Service Company are substantial public utilities operating in Illinois furnishing both gas and electric service. On August 14, 1965, Union filed a verified application with the Commission in Docket No. 51686, seeking a certificate of public convenience and necessity to construct, operate and maintain a six-inch gas feeder main, approximately 10.9 miles in length, from Clifton Terrace in Madison County to the city of Grafton in Jersey County, together with necessary distribution lines and systems for providing gas service to the public in the area generally referred to as the Elsah-Grafton area and environs, including The Principia College, in Jersey County, which area is contiguous to Union's present gas service area.

After due notice to Central Illinois Public Service Company and Illinois Power Company, the Commission held a hearing on Union's application in Docket No. 51686. On the day of the hearing, Central Illinois Public Service Company (hereinafter referred to as CIPS) filed a motion to intervene. Union objected on the grounds that CIPS did not seek any affirmative relief and that the intervening petition appeared to be a negative attempt to block Union's affirmative proposal to render gas service in the Elsah-Grafton area. The motion was taken under advisement and the hearing was continued to October 19, 1965.

On September 22, 1965, the Commission denied CIPS's motion to intervene. On October 19, 1965, Union presented evidence in support of its application which showed that the estimated plant investment in the six-inch feeder line and related distribution facilities would be $553,300 at the end of 1966, and $662,500 at the end of 1970; that the estimated net operating income from the project would be $8,700 for the calendar year 1966, and $33,800 for the calendar year 1970; that the estimated rate of return would be approximately 5% after the initial 2-year development period; that total revenue from the project was expected to be $130,277 for 1967, the first full year of operation, $47,400 of which would be derived from sales to The Principia; that The Principia is the only present prospective large-use customer in the area and makes the project feasible for Union; that the project is economically feasible, but without such customer, the project is not economically feasible; that no other public utilities provide gas service in the area proposed to be served; that the nearest public utility furnishing gas service to the public in the general vicinity is Illinois Power Company and CIPS; that Illinois Power Company's closest line is approximately 7 miles east of Union's proposed facilities and CIPS's closest line is approximately 12 miles north of Union's proposed facilities; that Union would provide service in accordance with the Commission's General Order No. 159, and in accordance with Union's Schedule of Rates for Gas Service on file with the Commission, which are the same rates and regulations applicable to gas service in the Alton area; and that 50-year franchises were granted to Union by both the village of Elsah and the city of Grafton. No objection to closing the case was made and the examiner marked the case "heard and taken."

On November 3, 1965, the Commission entered an order granting Union a certificate of public convenience and necessity to serve the Elsah-Grafton area, including The Principia College. In its order the Commission found:

(1) There is a need and demand for the proposed service in the area proposed to be served. (2) Gas service is not presently available to the public in the area. (3) The project is economically feasible. (4) Union has the financial ability to provide the proposed service. (5) Consent has been obtained from the local municipal authorities authorizing the use of the municipal streets and public places by franchises granted to Union. (6) Union will serve the area in accordance with the Commission's General Order No. 159, all applicable codes, and Union's Schedule of Rates for Gas Service on file with the Commission.

No appeal was taken from either the denial of the motion to intervene or the order of November 3.

Following the entry of the November 3 order, Union began construction of the 6-inch feeder main. Installation of pipe was well under way and a total of $43,704 was spent between November 3, 1965, and December 7, 1965, in reliance on the November, 1965, certificate. In all, $66,323 was spent by Union in preparing to render gas service to the Elsah-Grafton area.

On October 18, 1965, one day prior to the scheduled hearing in Union's case in Docket No. 51686, CIPS filed an application in Docket No. 51848 seeking a certificate of convenience and necessity to construct a gas feeder main from Jerseyville to Grafton via Elsah and to furnish gas service to the Elsah-Grafton area, The Principia College, and the unincorporated communities of McClusky, Dow and Newbern along the route of the proposed pipeline. Union was granted leave to intervene in CIPS's case in Docket No. 51848, and the case was set for November 12, 1965.

At the November 12 hearing, CIPS moved to set aside the November 3 order granting a certificate to Union and to consolidate the two proceedings. Union had previously filed another petition for a certificate to serve an additional adjacent area in Docket No. 51899.

On December 7, 1965, the Commission granted CIPS's motion; set aside the November 3 order certifying Union; consolidated the three cases; and set the cause for hearing on January 13, 1966. Thereafter Union applied for a rehearing and CIPS filed its second petition in Docket No. 52058 which covered substantially the same area as Union's second petition, Docket No. 51899.

On January 26, 1966, the Commission granted Union a rehearing and on March 2, 1966, in conference, rescinded their action of December 7 setting aside Union's certificate of November 3. They further ordered that notice be given Union that its certificate granted on November 3, 1965, may be amended or modified and that a hearing would be held on March 16 with respect to such amendments or modifications and that evidence would be taken in support of all four petitions (Docket Nos. 51686, 51848, 51899 and 52058) previously filed.

The hearings were conducted over the objection of Union, and on June 22, 1966, the Commission entered an order granting CIPS a certificate of convenience and necessity to serve Grafton, Elsah, The Principia College, and the largest part of the disputed area. Union's November 3 certificate was "amended" to limit its right to serve a sparsely inhabited area from the east line of The Principia to the west line of Madison County.

Union's petition for rehearing was denied, the trial court affirmed the Commission, and ...


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