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Northfield Woods Wtr. & Util. v. Comm. Com.

MAY 1, 1975.

NORTHFIELD WOODS WATER & UTILITY CO., PLAINTIFF-APPELLANT,

v.

ILLINOIS COMMERCE COMMISSION ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.

MR. PRESIDING JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order of the circuit court of Cook County which affirmed an administrative order of the Illinois Commerce Commission granting a certificate of convenience and necessity to the Illinois Municipal Water Company to operate a water distribution utility in an area which had already been certificated to the Northfield Woods Water & Utility Company. On appeal, Northfield Woods raises the issues of whether the Illinois Commerce Commission has the authority to certificate a second utility to territory already within a first utility's service area, and whether the Illinois Commerce Commission's order is contrary to the manifest weight of the evidence.

We reverse and remand.

The pertinent facts are as follows. In the early 1960's, the Illinois Commerce Commission granted certificates of public convenience and necessity to two competing water companies for a subdivision known as Glenbrook Estates (now known as La Fontaine), which is located at the southwest corner of Lake Avenue and Pfingsten Road, due west of Glenview Naval Air Station and across the street from Glenbrook South High School, in Cook County, Illinois. The western part of the subdivision was certificated to Northfield Woods Water & Utility Company, and the eastern part was certificated to Illinois Municipal Water Company. On October 22, 1970, Illinois Municipal applied to the Illinois Commerce Commission for a certificate of public convenience and necessity under the provisions of the Public Utilities Act (Ill. Rev. Stat. 1969, ch. 111 2/3, par. 56) to service that part of the subdivision which had already been certificated to Northfield Woods. The application stated that the developer proposing to develop the subdivision

"has requested that only one water utility company provide service to the entire area in order that a proper water distribution system to serve the entire area may be installed. Petitioner has a water main adjacent to said property and, if authorized by this Commission, is ready, willing and able to extend its water distribution system to serve the entire area. Said Northfield Woods Water & Utility Co., Inc. has a water main adjacent to said area but, at the present time, its water supply facilities are inadequate and unreliable."

A copy of the application was mailed to Northfield Woods by Illinois Municipal. The Commission scheduled a hearing on the application for December 16, 1970, and mailed a form letter notice of the hearing to Northfield Woods about two weeks before the hearing.

On the day of the hearing, Northfield Woods filed a petition to intervene in which it alleged, inter alia, a failure to receive formal notice of the proceedings. At the hearing, Northfield Woods was ably represented by counsel. The hearing was continued until January 8, 1971, by the hearing examiner. Northfield Woods' petition to intervene was granted, and when the hearing resumed, Northfield Woods was allowed to present evidence in its own behalf. Subsequently, both water companies presented memoranda of law to the Commission, which entered an order on February 9, 1972, over a year after the hearing. In its order, the Commission made the following factual determinations relevant to the issues on appeal:

"(6) Petitioner is presently providing water service to customers within its certificated area in said subdivision; no service is being presently provided by Northfield Woods;

(7) approximately 280 feet of water mains would be required to be constructed by Petitioner to connect the remaining part of the subdivision to its existing system, whereas it would require the construction of 453 feet of mains to connect to the existing system of Northfield Woods;

(9) public convenience and interest require that only one public utility company provide water service to the subdivision and a Certificate of Public Convenience and Necessity should be granted to Petitioner, which is already providing such service * * *;

(11) it is in the best interests of the public that one utility provide all water service within said subdivision; the Petitioner — already providing service to a substantial part thereof — should be allowed to serve the entire subdivision; * * *."

The certificate of public convenience and necessity was granted to Illinois Municipal without further reference to Northfield Woods' certificate for the same area. Northfield Woods filed its petition for rehearing with the Commission, which granted the petition, but then failed to hold additional hearings or reconsider its order. Upon the expiration of 150 days, the application for rehearing was deemed to have been denied under section 67 of the Public Utilities Act (Ill. Rev. Stat. 1969, ch. 111 2/3, par. 71). Northfield Woods, having exhausted its administrative remedies, then appealed to the circuit court of Cook County which affirmed the Commission's order. This appeal follows.

Northfield Woods' first contention on appeal is that the Commission acted improperly because by certificating the second utility to the territory, it effectively rescinded Northfield Woods' certificate without having followed the proper procedures for such an action, citing Union Electric Co. v. Illinois Commerce Com. (1968), 39 Ill.2d 386, 235 N.E.2d 604. Illinois Municipal and the Commission insist that the Commission is authorized to grant multiple certificates for a territory to competing utilities, citing Eagle Bus Lines, Inc. v. Illinois Commerce Com. (1954), 3 Ill.2d 66, 119 N.E.2d 915, and that the proceedings were in accordance with the law.

• 1 Section 55 of the Public Utilities Act (Ill. Rev. Stat. 1969, ch. 111 2/3, par. 56) provides that "[n]o certificate of public convenience and necessity shall be construed as granting a monopoly or an exclusive privilege, immunity or franchise." In Eagle Bus Lines, Inc. v. Illinois Commerce Com., our supreme court wrote that this section "discloses the legislature's intention that a mere existence of a certificate shall not preclude the granting of a second certificate * * *. The Commerce Commission has ample power to decide whether one or several companies engaged in furnishing public utility service shall operate in the same locality." (3 Ill.2d 66, 72.) Accordingly, we begin our analysis by noting that the Commission had the authority to grant a certificate to Illinois Municipal for the territory already certificated to Northfield Woods, if the Commission intended for both companies to provide service in the western part of the Glenbrook Estates subdivision. However, the record indicates that the Commission did not ...


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