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02/03/97 CITY CHICAGO v. ILLINOIS COMMERCE

February 3, 1997

THE CITY OF CHICAGO, PETITIONER-APPELLANT,
v.
THE ILLINOIS COMMERCE COMMISSION, COMMONWEALTH EDISON COMPANY, ET AL., RESPONDENTS-APPELLEES.



Petition for Review of the Illinois Commerce Commission. No. 92-0268.

Released for Publication March 13, 1997.

The Honorable Justice O'brien delivered the opinion of the court. Hoffman, J., and Cahill, J., concur.

The opinion of the court was delivered by: O'brien

The Honorable Justice O'BRIEN delivered the opinion of the court:

This is a companion case to Peoples Gas Light and Coke Company and North Shore Gas Company v. Illinois Commerce Commission, Commonwealth Edison Company, et al., No. 1-95-1624 (Ill. App. December 30, 1996). Our opening paragraph in Peoples Gas also applies here, so we quote that paragraph in its entirety.

"Section 8-402 of the Public Utilities Act (220 ILCS 5/8-402 (West 1992)) requires each electric utility to file an electric utility energy plan, designed to minimize the cost of providing service to consumers, with the Department of Natural Resources and the Illinois Commerce Commission (ICC) every three years. Such 'least-cost' plans detail the supply-side and demand-side management resource options that the electric utility intends to use to meet its service obligations over a twenty-year period. Supply-side resources are 'those resources that increase the amount of electricity available for consumption in Illinois or in the service territory of each electric utility.' 83 Ill. Adm. Code § 440.100 (1996). Demand-side management resources are designed to increase the efficiency with which customers use electricity. See 83 Ill. Adm. Code § 440.100 (1996). The ICC holds hearings on the filed plans pursuant to rules it has adopted that govern the least-cost planning proceedings. At the conclusion of the hearings, the ICC issues an order adopting an electric energy plan for the State and for each utility." Peoples Gas, slip op. at 1-2.

On July 1, 1992, Commonwealth Edison (hereinafter ComEd) filed the least-cost plan that is the subject of this appeal. In that plan, ComEd proposed to implement or continue implementing 16 demand-side management pilot programs. On November 18, 1994, the hearing examiner recommended ComEd institute or continue implementation of 15 of the 16 pilot programs it had proposed, as well as one program proposed by the City of Chicago (hereinafter the City).

Meanwhile, in a separate proceeding before the ICC, ComEd requested a $460.3 million increase in its base rates for electrical service. ComEd's proposed rate increase included an estimated $23 million for the recovery of the costs of the 16 demand side management (hereinafter DSM) pilot programs. The City argued that the $23 million for the DSM pilot programs should be reduced to $6 million because ComEd's actual DSM expenditures historically had been lower than its DSM budgets. On January 9, 1995, the ICC entered an order in the rate case granting ComEd $303.2 million of the $460.3 million rate increase it had requested. The ICC allowed ComEd $6 million for the 16 DSM pilot programs, finding that "for the past three years, [ComEd] has spent only 62.8% of the amount of DSM expenses budgeted *** Given the recurring and substantial discrepancy between [ComEd's] actual DSM expenses and [ComEd's] budgeted levels, the concludes that a determination of *** DSM expenses based on [ComEd's] [$23 million] estimates would be inappropriate."

On January 11, 1995, the hearing examiner filed an amended proposed order recommending that in order to remain within the reduced DSM budget, ComEd should be required to implement only four of the 16 DSM pilot programs originally approved by the hearing examiner in his November 18, 1994, order. On February 23, 1995, the ICC approved ComEd's implementation of only seven of the 16 DSM pilot programs initially approved by the hearing examiner. The City appeals from the February 23, 1995, order. The Citizens Utility Board (hereinafter CUB) filed an amicus curiae brief in support of the City's appeal.

On appeal, the City argues the ICC erred in reducing ComEd's DSM pilot programs in order to conform with the reduction in ComEd's DSM cost recovery. The City contends the Public Utilities Act does not list cost recovery as a factor for the ICC to consider in evaluating an electric utility's proposed least-cost plan.

The resolution of this issue requires us to construe the Public Utilities Act (hereinafter "the Act"). Because the construction of a statute is a matter of law, we may independently construe the Act. See Metro Utility Co. v. Illinois Commerce Commission, 262 Ill. App. 3d 266, 273 (1994).

The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature. Augustus v. Estate of Somers, 278 Ill. App. 3d 90, 97 (1996). In determining legislative intent, a court should first consider the statutory language. Augustus, 278 Ill. App. 3d at 97. Where the language of the statute is clear, it will be given effect without resort to other aids for construction. Augustus, 278 Ill. App. 3d at 97.

We find that the clear language of section 1-102 of the Act contemplates cost recovery as a factor for the ICC to consider when evaluating an electric utility's proposed least-cost plan. Section 1-102 states:

"the General Assembly finds that the health, welfare and prosperity of all Illinois citizens require the provision of adequate, efficient, reliable, environmentally safe and least-cost public utility services at prices which accurately reflect the long-term cost of such services and which are equitable to all citizens. It is therefore declared to be the policy of the State that public utilities shall continue to be regulated effectively ...


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