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Citizens For Better Environment v. Icc

OPINION FILED DECEMBER 30, 1981.

CITIZENS FOR A BETTER ENVIRONMENT, PLAINTIFF-APPELLANT,

v.

ILLINOIS COMMERCE COMMISSION, DEFENDANT-APPELLEE. — ILLINOIS POWER COMPANY, PLAINTIFF-CROSS-APPELLANT,

v.

ILLINOIS COMMERCE COMMISSION, DEFENDANT-CROSS-APPELLEE. — AMERICAN STEEL FOUNDRIES, DIVISION OF AMSTED INDUSTRIES, INC., ET AL., PLAINTIFFS,

v.

ILLINOIS COMMERCE COMMISSION, DEFENDANT-APPELLEE. — (ILLINOIS POWER COMPANY, DEFENDANT-APPELLEE AND CROSS-APPELLANT.) — GEORGIA HAMPTON ET AL., PLAINTIFFS-APPELLANTS,

v.

ILLINOIS COMMERCE COMMISSION ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Champaign County; the Hon. JOHN G. TOWNSEND, Judge, presiding.

JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:

This appeal lies from an order of the circuit court of Champaign County which affirmed an order of the Illinois Commerce Commission (Commission) granting a general increase in its gas and electric rates to Illinois Power Company (IPC).

Some brief background will be helpful in understanding the issue with which we are concerned. IPC filed a request for rate increases with the Commission on January 9, 1979. Hearings were held by the Commission, and various parties were permitted to intervene. Among these were the two groups of appellants here: (1) Georgia Hampton and six other low-income, elderly customers of IPC (Hampton), and (2) Citizens for a Better Environment (CBE), a state-wide consumer and environmental group, which has been active in Commission proceedings for a number of years.

The Commission granted the rate increase by an order issued November 28, 1979. Rehearing was denied by the Commission and appeals were taken to the circuit court of Champaign County by Hampton, CBE and certain other intervenors. IPC cross-appealed. On March 2, 1981, the circuit court entered its order affirming the Commission.

Meanwhile, during the pendency of the appeal in the circuit court, on August 8, 1980, IPC filed revised tariff sheets with the Commission. The Commission thereupon suspended the tariffs which are the subject of this appeal and entered into an investigation of the tariffs submitted August 8. About a year later, on July 1, 1981, the Commission issued its order "permanently canceling and annulling" the tariffs under this appeal and directed IPC to place into effect the tariffs of August 8, 1980, although at a lesser amount than IPC requested in those tariffs. Rehearing was denied by the Commission of its July 1, 1981, order, and no appeal has been taken from that denial.

The order of the circuit court affirming the Commission was appealed to this court by Hampton and CBE; IPC cross-appealed. In October 1981, the Commission filed a motion in this court to dismiss the appeal on the ground of mootness, viz., the tariffs and rate increases granted by the Commission and affirmed by the circuit court had been entirely superseded by the new tariffs of July 1, 1981, which were not appealed, and therefore this court could grant no relief.

• 1 Responses were filed to the motion by Hampton and CBE, and we took oral argument on the motion only. We concluded that the appeal had become moot, but notwithstanding, the question of inclusion of construction work in progress (CWIP) in the rate base, as provided in the Commission's order, was one of public importance, required authoritative guidance in the future for public officers, and was likely to recur. Under this exception to the mootness doctrine (People ex rel. Wallace v. Labrenz (1952), 411 Ill. 618, 104 N.E.2d 769), we denied the motion to dismiss.

While some peripheral issues have been raised in this appeal, the principal and only significant issue is the inclusion of CWIP in the rate base. IPC cross-appealed in the circuit court and in this court, alleging the failure of the Commission to determine fair value rate bases and using instead original cost. However, counsel for IPC has represented to the circuit court and to this court that if the order of the Commission is affirmed, IPC would not request reversal on that ground, and in effect would withdraw its cross-appeal. Since we do affirm, we will not concern ourselves with the cross-appeal. The cross-appeal was based on the decision in Union Electric Co. v. Illinois Commerce Com. (1979), 77 Ill.2d 364, 396 N.E.2d 510, which was handed down on October 2, 1979, very near the end of the Commission hearings in the instant case and was still in the process of application for rehearing at the time of the Commission's order.

The CWIP question arises in the instant case by reason of IPC's request to include in its rate base $240,000,000 attributable to an atomic generating station which has been under construction near Clinton, Illinois, since 1975. The record demonstrates that at December 31, 1978, IPC had invested in this plant, known as Clinton Unit No. 1, some $443,000,000 which had been acquired for the most part through the sales of securities. Projections indicated that for construction during the period 1978-1982 over $1,450,000,000 would be required, of which about $1,230,000,000 would be raised through the sale of new securities. No date upon which the Clinton station would become operational was indicated, but it would appear to be several years away. Meanwhile, fresh infusions of cash would be needed. IPC's position was that the servicing of such a large burden of securities which generated no cash earnings was damaging its financial condition and credit-worthiness, so that it would be more difficult to raise additional capital to complete the Clinton station.

IPC therefore requested that the $240 million mentioned above be included in its rate base. The Commission allowed $97 million.

Anterior to any discussion of CWIP as an element in a rate base, we may dispose quickly of a procedural point. The trial court struck from Hampton's and CBE's briefs before it any discussion of CWIP on the basis that the question had not been properly preserved as a matter of law in their petitions for rehearing before the Commission and therefore it could not be appealed under section 67 of the Public Utilities Act (Ill. Rev. Stat. 1979, ch. 111 2/3, par. 71). However, the trial court did discuss the issue in the framework of manifest weight of the evidence. That section provides in part: "* * * No person or corporation in any appeal shall urge or rely upon any grounds not set forth in such application for a rehearing before the Commission." We disagree with the trial court.

• 2 The components of a rate base must be determined from statutory and case law. Therefore, it is a legal, not a factual, question. Upon examination of the record, we find that Hampton properly raised the CWIP question as a legal issue. Her petition for rehearing reads in part:

"An allowance for CWIP for the Clinton plant is contrary to the rate making principle that the rate payer should pay for plant which is `used or useful' in supplying electricity to the consumer."

The "used or useful" language derives from section 36 of the Public Utilities Act (Ill. Rev. Stat. 1979, ch. 111 2/3, par. 36). While we have some reservations about the application of section 36 to a CWIP question, nevertheless, the question is raised as one of law and all parties to the appeal were therefore on notice of its existence as such. CBE's petition for rehearing raises the question in the posture of manifest weight of the evidence, a mixed question of law and fact. While not so strong as Hampton's position, there is an easily seen parallelism between the two throughout the case, even though there has been no formal adoption of each other's briefs. We therefore are of the opinion that the question has been adequately raised both in the trial court and in this court.

The Commission and IPC argue that if the question has been raised, it has not been passed on by the trial court which struck the matter at that level, and therefore the case must be remanded for findings by that court. We do not agree. The record in this case is almost stupefying in its size; over 8,000 pages of testimony before the Commission covering 56 days of hearings, together with an enormous number of exhibits. To require a trial court to reconsider the record and to make conclusions which would only return to this court which has already spent large amounts of time in digesting that record would be an extremely unwise use of judicial time and effort. The question has been adequately briefed here, and we see nothing to be gained by remandment. Compare Krasnow v. Bender (1979), 78 Ill.2d 42, 47, 397 N.E.2d 1381.

Any discussion of the inclusion of CWIP in a rate base must begin with an examination of the pertinent statutes. Section 36 of the Public Utilities Act (Ill. Rev. Stat. 1979, ...


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