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05/09/88 Royal Elm Nursing and v. Northern Illinois Gas

May 9, 1988





526 N.E.2d 376, 172 Ill. App. 3d 74, 122 Ill. Dec. 117 1988.IL.701

Petition for review of order of Illinois Commerce Commission.


PRESIDING JUSTICE CAMPBELL delivered the opinion of the court. O'CONNOR and MANNING, JJ., concur.


This is a direct appeal brought by complainant, Royal Elm Nursing and Convalescent Center, Inc., from an order entered by the Illinois Commerce Commission (the Commission), denying Royal Elm's complaint against respondent, Northern Illinois Gas Company , which arose out of a bill issued to Royal Elm by NI-G for gas allegedly used during the period of June 18, 1976, through March 14, 1983, but which was unmetered due to a tampered gas meter. In its complaint, Royal Elm denied that it owed NI-G payment for unmetered gas and claimed that NI-G's claim had not been substantiated and was not well-founded. The sole issue on appeal is whether the findings of the Commission as to the date the meter tampering occurred are supported by substantial evidence. For the following reasons, we reverse the Commission's order and remand the cause with directions.

The record sets forth the following facts relevant to this appeal. Royal Elm, located at 7733 Grand Avenue, Elmwood Park, Illinois, commenced operation of its nursing home and convalescent facility in 1975. Rudolph Tessler, Royal Elm's president, testified that the facility's occupancy rate fluctuated over the years until in 1983 it was approximately 80% occupied. In March 1983, as part of a routine service check, NI-G removed the gas meter index from the outside of Royal Elm's facility and replaced it with a new tamper-resistant model. It was NI-G's policy to remove gas meter indexes every 10 years for testing. When the old meter was tested, the results indicated that the meter index had not been registering all of the gas passing through it. In fact, 4 1/2 of the 16 teeth of a critical gear wheel had been cut off, causing the meter index to register only about 75% of the actual gas usage. Because there was no visible means to detect tampering, NI-G had had no indication that anything was wrong with the meter until it had been tested.

Pursuant to Commission Rule 280.100(c) (83 Ill. Adm. Code 280.100(c) (1985)), once it has been discovered that "there has been tampering with wires, pipes, meters or other service equipment and the customer has enjoyed the benefit of such tampering, . . . [the] customer shall be responsible for all service usage . . . during the period tampering occurred." Thus, once tampering is discovered, it is irrelevant who did the tampering. The responsibility for rectifying the underpayment is automatically placed on the gas consumer. In the present case, it is undisputed that someone had tampered with the gas meter index which had been removed from the outside of Royal Elm's facility in March 1983. However, Royal Elm disputes the Commission's finding as to when the tampering occurred on the grounds that it is not supported by substantial evidence in the record.

Lynwood Valor, director of measurement for NI-G, testified at the hearing that, by all outward appearances, the tampered meter index moved and functioned as if everything were operating satisfactorily. The error occurred when the measurement of gas usage was transmitted to the index. The measurement was reduced in direct proportion to the number of teeth removed from that particular gear. In Royal Elm's case, 4 1/2 out of 16 teeth were missing. Thus, there was approximately a 25% reduction in actual measurement.

Norbert Oliver, director of marketing for NI-G, testified as to the analytical method used to determine when the tampering had occurred. Initially, Oliver compiled all of the billing data available for Royal Elm and analyzed this data to obtain an estimate of: (1) use per degree day during the heating season and (2) base use per day during the nonheating season. Oliver then prepared an account analysis which compared the amount of gas usage measured at Royal Elm for the summer periods and winter periods from June 1975 through June 1984. Specifically, Oliver looked for an indicator of a sudden decrease in both use per degree day (winter) and base use (summer) roughly equal to the meter reading error of 25%. Oliver located a decrease in both uses between the 1975 and 1976 readings when the use per degree day dropped 16.6% and the base use dropped 27.6%. Based on his analysis, Oliver estimated that the tampering had occurred close to the end of the 1975-76 heating season. Thus, the reading date taken at the end of that heating season on June 18, 1976, was determined to be the date at which the unmetered gas usage commenced. In order to determine the amount owed for unmetered gas, Oliver adjusted the billing previously issued to Royal Elm for the period from June 18, 1976, through March 14, 1983, the date of meter exchange, by a factor derived from the 25% reduction in gas usage, resulting in a bill to Royal Elm of $45,994.35 for unmetered gas.

Royal Elm filed its complaint against NI-G on May 16, 1984. A hearing was held before the Commission on September 20, 1984, and a final order was entered on October 29, 1986. The findings of fact made by the Commission were as follows:

(1) Royal Elm's gas meter index was damaged by a deliberate act of tampering at or shortly before June 18, 1976, and Royal Elm was responsible for that tampering;

(2) Best estimate of unmetered gas usage: 160,196.53 therms;

(3) Royal Elm was responsible for the tampering, thus held ...

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