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Rural Electric Co. v. Commerce Com.

OPINION FILED MARCH 20, 1979.

RURAL ELECTRIC CONVENIENCE COOPERATIVE CO., APPELLANT,

v.

THE ILLINOIS COMMERCE COMMISSION ET AL., APPELLEES.



Appeal from the Appellate Court for the Fourth District; heard in that court on appeal from the Circuit Court of Macoupin County, the Hon. Paul C. Verticchio, Judge, presiding.

MR. JUSTICE CLARK DELIVERED THE OPINION OF THE COURT:

This is a dispute over which of two "electric suppliers" (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 403.5) is entitled to serve a major, new, commercial customer. The plaintiff, Rural Electric Convenience Cooperative Co. (Cooperative), is an "electric cooperative" within the meaning of section 3.4(b) of the Electric Supplier Act (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 403.4(b)). The principal defendant, Central Illinois Public Service Company (Utility) is a public utility within the meaning of section 10.3(c) of the Public Utilities Act (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 10.3(c)). (Both "public utilities" and "electric cooperatives" are "electric suppliers" subject to the Electric Supplier Act. (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 403.5.)) Early in 1974, the defendant-intervenor, Freeman Coal Mining Company (Freeman), discussed with Utility plans to construct a new coal mine in the west half of Section 23, Township 12 North, Range 6 West of the Third Principal Meridian, Macoupin County. Shortly thereafter, Utility served notice upon Cooperative pursuant to section 7 of the Electric Supplier Act (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 407) that Utility intended to extend certain of its existing lines to provide service to the Freeman mine. Cooperative thereupon brought this action before the defendant Illinois Commerce Commission (Commission) complaining that Cooperative, and not Utility, was entitled to provide service to the mine.

The Commission found in favor of Utility, and, on administrative review, the circuit and appellate courts affirmed. (56 Ill. App.3d 281.) We granted Cooperative's petition for leave to appeal pursuant to our Rule 315 (65 Ill.2d R. 315), and now we vacate the judgments and set aside the order below and remand the cause to the Commission with directions.

The starting point of our analysis is the Electric Supplier Act (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 401 et seq.). Several sections of the Act set forth a comprehensive scheme for determining which of two or more contending suppliers is entitled to serve a given customer or location. (E.g., Ill. Rev. Stat. 1977, ch. 111 2/3, pars. 405, 408.) However, section 2 of the Act (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 402) states as follows:

"The General Assembly declares it to be in the public interest that, in order to avoid duplication of facilities and to minimize disputes between electric suppliers which may result in inconvenience and diminished efficiency in electric service to the public, any 2 or more electric suppliers may contract, subject to the approval of the Illinois Commerce Commission, as to the respective areas in which each supplier is to provide service."

Section 6 reiterates this point:

"Any 2 or more electric suppliers may contract together defining and delineating, as between themselves, one or more service areas in which each such contracting supplier shall be entitled to furnish service. Such contracts are subject to the approval of the Commission." (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 406.)

These two sections make clear that, once properly approved by the Commission, such service area agreements control the rights of the parties to the agreement, to the exclusion of the Act, except insofar as the agreement incorporates the Act. (We are not faced here with any claim that the agreement is repugnant to the purposes of the Act and therefore void.)

Utility and Cooperative have entered into such a service area agreement, dated February 19, 1969, which was approved by the Commission by an order dated April 9, 1969 (Commission Docket No. ESA-100). Section 2 of that agreement provides in part that,

"The parties hereto covenant and agree that Cooperative shall be entitled exclusively to serve all consumers with their electric service requirements in the area or areas designated as RECC on the maps hereto attached * * *."

It is undisputed that the Freeman mine is located within the area Cooperative is "entitled exclusively to serve" by virtue of the agreement and that Utility's rights therefore depend upon the applicability of one of the exceptions to the above-quoted language of the agreement.

The exception upon which Utility relies provides as follows:

"[P]rovided further, however, whenever the electrical load of a prospective consumer in any area outside of incorporated areas is such that its anticipated load during the first year of normal operation will require, as determined in accordance with accepted engineering practices, that the load be supplied through a connection to and/or an extension of an existing as of July 2, 1965 line having a voltage of 34.5 ...


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