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09/08/88 the Peoples Gas, Light and v. the Illinois Commerce

September 8, 1988





529 N.E.2d 671, 175 Ill. App. 3d 39, 124 Ill. Dec. 690 1988.IL.1355

Petition for review of order of Illinois Commerce Commission.


JUSTICE McMORROW delivered the opinion of the court. JIGANTI, P.J., and JOHNSON, J., concur.


The Peoples Gas, Light and Coke Company (the gas company) sent a bill to Alpha Baking Company, Inc. (Alpha), based on an estimate of Alpha's gas consumption during a three-month period, May 1985 to July 1985, when the gas company's meter measuring Alpha's consumption malfunctioned and underregistered the gas supplied to Alpha. Alpha unsuccessfully disputed the estimated bill in an action before the Illinois Commerce Commission. Thereafter, the gas company issued a second estimated bill for a subsequent eight-month period, September 1985 to April 1986, during which the same meter malfunctioned by again underregistering the amount of gas consumed. As with the previous underregistration, the second bill represented the difference between estimated consumption and the amount indicated on the meter's digital counter. Alpha applied to the Commission for a rehearing with respect to the gas company's second estimated bill. The Commission found that the gas company was at fault within the meaning of the Illinois Administrative Code (Code) (83 Ill. Adm. Code 500.190 (1985)) with respect to the second malfunction and therefore was not entitled to bill Alpha for the estimated consumption during this period. The gas company seeks direct appellate administrative review.

We affirm.


The meter which is the subject of this dispute is a rotary meter used only for high volume commercial and industrial customers. It is located in a remote area of Alpha's plant where the air temperature varies by as much as 30 degrees. Because the volume of gas consumed varies directly in proportion to the change in the gas temperature, accuracy requires an adjustment to the volume measurement to compensate for changes in gas temperature. To assure correct measurement of Alpha's consumption of gas, a temperature compensating instrument was mounted on the top of the meter to adjust for the variations in temperature. The gas company placed the instrument inside a locked metal box, which has a small window. The window displays the digital counter telling how many cubic feet of gas Alpha has used, which in turn determines how much it will be billed.

In February 1985, an internal gas company computer report indicated that Alpha's counter was registering an irregular consumption, which, under certain circumstances, may be attributable to factors other than a malfunctioning meter. In May 1985, the gas company conducted its annual inspection of Alpha's gas meter and found that the temperature compensating device was stuck at 100 degrees Fahrenheit. The gas company neither replaced the temperature compensating instrument nor performed any tests to determine which device or mechanism in the instrument was malfunctioning. It replaced the follower wheel, an integral part of the temperature compensating device. The gas company maintains that when the follower wheel was replaced, "all problems were solved," and that the gas temperature was in no way associated with the instrument malfunction. The gas company then sent Alpha a bill based on an estimate of Alpha's consumption for the period between March and May 1985. The estimate was derived from a reading of the veeder counter which registers the gas flow without compensating for changes in temperature. Above the veeder counter is written "UNCORRECTED READING."

In September 1985, Alpha filed a formal complaint with the Commission alleging that, with respect to the alleged underregistration for March to May 1985, the gas company was at fault with respect to the meter's malfunction. Alpha requested that the Commission order the gas company to credit Alpha for the difference between the registered consumption and the estimated consumption. The Commission denied Alpha's request. This denial was the Commission's original order (Original Order).

In April 1986, the gas company made a special inspection of the meter. Once again, the meter's temperature compensating device rested at 100 degrees. The gas company claims that the device functioned properly for five months after its replacement of the follower wheel in May 1985, but rested at full scale again in September 1985 and remained at full scale registration until the April 1986 inspection. The gas company sent Alpha a bill based upon the gas company's estimate of the instrument's underregistration of consumption from September 1985 until April 1986. On the basis of this second billing, Alpha applied to the Commission for a rehearing raising the issue of the gas company's compliance with the Commission's testing requirements.

In its order on rehearing (the Order on Rehearing), the Commission found the gas company "at fault for allowing the incorrect meter to remain in service . . . since the prescribed tests for meter accuracy have not been performed." Specifically, it determined that in May 1985, when the first underregistration was uncovered, the gas company should have either removed the device from service or performed the three-temperature test required by section 500.190 of the Illinois Administrative Code (Code) when it receives a complaint and indication that a temperature compensation device incorrectly registers at high or low temperatures. (83 Ill. Adm. Code 500.190 (1985).) The Commission found that the gas company received a complaint and indication that the meter was malfunctioning, and that upon receipt of such complaint and indication, the gas company was obliged to either remove the meter or perform the three-temperature test to be in compliance with the Code. Since the gas company did neither, the Commission concluded that the gas company could not render an estimated ...

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