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Bloom Township High School v. Illinois Commerce Commission

November 24, 1999

BLOOM TOWNSHIP HIGH SCHOOL, K & M PLASTICS, INC., MARSHALL FIELD & COMPANY, AND ST. THERESE MEDICAL CENTER, PETITIONERS,
v.
ILLINOIS COMMERCE COMMISSION, AND COMMONWEALTH EDISON CO., AN ILLINOIS PUBLIC UTILITY COMPANY, RESPONDENTS.



Petition for Review of an Order of the Illinois Commerce Commission. Nos. 95 0559 95 0560 95 0561 95 0562 95 0563 (consolidated)

The opinion of the court was delivered by: Justice Hoffman

The petitioners, Bloom Township High School, K & M Plastics, Inc., Marshall Field & Company (Marshall Field), and St. Therese Medical Center, filed separate complaints with the Illinois Commerce Commission (Commission) against the respondent, Commonwealth Edison Company (ComEd), alleging that ComEd wrongfully assessed penalty fees and other charges against them for excessive use of electrical power during the "heat wave" in July 1995. The Commission consolidated the complaints and subsequently entered summary judgment in favor of ComEd. The petitioners have filed a joint petition for review, contending that the Commission erred in granting summary judgment for the following reasons: (1) the "Rider 30 Interruptible/Curtailment Service" tariff (Rider 30), under which they were receiving electrical power, required ComEd to make reasonable efforts to provide them with "buy-through energy" *fn1 in lieu of curtailment; (2) the Commission violated section 2-1005 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1005 (West 1996)) by determining on summary judgment that ComEd made reasonable efforts to provide buy-through energy and that "emergency conditions" existed on July 14, 1995, such that the purchase of buy-through energy was impermissible; and (3) the Commission erred in denying Marshall Field's motion for summary judgment, asserting that it did not receive proper notice of the curtailment.

ComEd filed a tariff with the Commission, known as Rider 30, the purpose of which is to assist ComEd in providing cost-effective and reliable electricity by reducing the amount of electricity that ComEd must provide during peak periods of demand. Service pursuant to Rider 30 is available to certain non-residential customers of ComEd who have discretionary electrical loads which can be interrupted or curtailed. Under Rider 30, customers such as the petitioners enter into contracts with ComEd and agree to reduce their electricity usage to a pre-established Firm Power Level *fn2 (FPL) upon request by ComEd. In exchange for their commitment to limit their electricity usage, ComEd agrees to compensate the customers by applying credits to their electricity bills.

Pursuant to Rider 30, the customers must elect to receive service under one of three options (A, B, or C). The three types of service differ in the number of interruptions or curtailments ComEd is allowed to invoke per year, the maximum number of hours an interruption or curtailment may last, the extent of the notice period before a curtailment can be initiated, the credits to which the customer is entitled, and the ability of the customer to purchase buy-through energy in lieu of curtailment. In this case, all of the petitioners elected to receive service under option C, which specifically provides: "Under this option, the customer may purchase energy during a curtailment period at a cost of $.15/kWh for all killowatthours consumed during the curtailment period associated with 30-minute demands which exceed the customer's Firm Power Level. Such purchases are referred to as purchases in lieu of curtailment. Demand levels associated with such purchases shall be considered when determining the customer's Maximum Demand as determined by the otherwise applicable rate. The availability of such energy shall be at the discretion of the Company, which shall notify the customer of its expected availability at the time the notice of curtailment is given. A reasonable effort to maintain that availability during a curtailment period will be made. The customer shall not be allowed to make purchases during emergency conditions." [Emphasis added]. Rider 30 further provides that all customers, other than those option C customers who purchase buy-through energy, shall be assessed a penalty *fn3 if their demand for power during a curtailment exceeds their pre-selected FPL. According to the parties, on July 13, 1995, the temperatures in the Chicago area reached record levels and ComEd experienced a system peak demand for power. ComEd gave its option C customers notice of a curtailment and provided them with the opportunity to purchase buy-through energy. On July 14, 1995, the temperatures again reached record levels, and ComEd issued another curtailment. This time, ComEd did not offer its option C customers buy-through energy, and all of the petitioners refused to limit their energy usage during the curtailment. As a result, ComEd imposed penalty fees and other charges against them for their energy demand that exceeded their FPL during the curtailment. Each of the petitioners subsequently filed a complaint with the Commission, alleging that ComEd misapplied Rider 30 and wrongfully assessed penalty fees and other charges against them because ComEd failed to make reasonable efforts to provide them with buy-through energy during the curtailment as required by option C. The petitioners did not challenge the amount of the fees and charges assessed against them. In fact, they admitted that, if ComEd was entitled to such fees, then the amount assessed against them was correct. The Commission consolidated the petitioners' complaints and scheduled an evidentiary hearing for April 20, 1998.

Prior to the hearing, both the petitioners and ComEd submitted extensive written testimony in support of their positions, as permitted by section 200.660 of the Public Utilities Rules of Practice (83 Ill. Adm. Code §200.660 (1996)). *fn4 At the hearing, Marshall Field presented the testimony of Andrew J. Sebescak, its senior maintenance manager. Following Sebescak's testimony, the hearing examiner gave the parties the option of either limiting the cross-examination of all witnesses to 15 minutes or filing written briefs regarding the issue of whether Rider 30 required ComEd to make reasonable efforts to provide its option C customers with buy-through energy during a curtailment period. The parties objected to limiting the time allowed for cross-examining witnesses. Although the parties agreed that a threshold question existed as to whether option C required ComEd to use reasonable efforts to provide buy-through energy in lieu of curtailment, they disagreed as to whether the decision on this issue was outcome determinative. Consequently, the petitioners objected to the suggestion of filing cross-motions on this issue and expressed their desire to proceed with the hearing. After a lengthy Discussion, the hearing examiner stated:

"[S]ince the parties are not in agreement, I just need to make a ruling or issue a direction which I feel is going to be of benefit to the Commission.

And so to that end, what I am going to direct the parties to do is to, basically, brief for me, and it can be done in the form of a motion for summary judgment with memo attached, again, with any type of testimony attached as exhibits, to indicate what the parties' positions are in regards to the interpretation of Rider 30C."

On May 7, 1998, the petitioners filed a motion for summary judgment and a memorandum in support thereof, arguing that the Commission should grant summary judgment in their favor because: (1) ComEd had a duty to make reasonable efforts to provide buy-through energy during the July 14, 1995 *fn5 , curtailment period; and (2) ComEd failed to provide Marshall Field with proper notice of the curtailment. The following documents were attached to the petitioners' memorandum: (1) an affidavit from Sebescak, stating that Marshall Field did not receive written notice of the curtailment; (2) the Rider 30 contract between Marshall Field and ComEd; (3) Rider 30; (4) a Rider 30 analysis report prepared for Marshall Field by ComEd's technical services department; and (5) ComEd's rate schedule sheets and supplemental materials regarding Advice No. H301 *fn6 that were filed with the chief clerk of the Commission on August 5, 1997.

The following day, ComEd filed its motion for summary Disposition, alleging that the penalty fees and charges assessed against the petitioners were proper based on the plain and unambiguous language of option C. ComEd argued that option C clearly provides that it has discretion to decide whether to offer buy-through energy during a curtailment and that it is only required to make reasonable efforts to maintain the availability of buy-through energy if it has first elected, in its sole discretion, to offer buy-through energy to its option C customers. ComEd also argued that the petitioners' interpretation of option C did not correspond with the purpose of Rider 30, which was to "maintain an appropriate level of interruptible load resources in a cost effective manner, thus deferring the need for additional capacity resources *** by reducing peak period loads." According to ComEd, the petitioners' interpretation was inconsistent with the requirement that it provide option C customers with notice of the availability of buy-through energy four hours prior to a curtailment. In the alternative, ComEd argued that, even if it was required to make reasonable efforts to provide buy-through energy to its option C customers, it did so in this case.

Attached to ComEd's motion was an affidavit from A. Daniel Gorski, its Bulk Power Operations Manager. In his affidavit, Gorski stated that, based on his 20 years of experience in bulk power operations, he believed that the information provided to ComEd on July 14, 1995, supported its Conclusion that buy-through energy would not have been available on the open market during the curtailment period. He stated that ComEd took continuous surveys of the market to determine whether any utilities were willing to pre-schedule energy sales to ComEd before deciding not to offer buy-through energy. According to Gorski, ComEd could not be certain that purchases of hourly energy would be possible on the spot wholesale market. Gorski further stated that, based on the conditions at the time, ComEd had determined that if the demand for energy was not curtailed it would not have enough power to fully service the firm load of its customers.

ComEd also filed a memorandum in response to the petitioners' motion for summary judgment and in further support of its motion for summary Disposition. Attached to ComEd's memorandum was an excerpt from the hearing on April 20, 1998, containing Sebescak's admission that he knew about the expected curtailment four hours in advance, that he was not in Marshall Field's State Street store on July 14, 1995, and that he did not know if written notice of the curtailment was provided to Marshall Field by ComEd. Also attached to the memorandum were affidavits from Jose G. Andrade and Sharon S. Kochanek, account managers in ComEd's energy services department. Andrade stated in his affidavit that four hours prior to the curtailment on July 14, 1995, he left detailed voice-mail messages for Sebescak and Thomas Mecham, who was also employed in the maintenance operations department at Marshall Field. He informed them that the curtailment would begin at 12:30 p.m. and end at 6:30 p.m., that buy-through energy would not be available, and that Marshall Field should curtail its energy usage to avoid being charged penalties under Rider 30. About one and one-half hours later, Andrade again left detailed voice-mail messages concerning the curtailment for both Mecham and Sebescak. Kochanek stated in her affidavit that she also left detailed voice-mail messages for Sebescak and Mecham and even attempted to page Mecham. In addition, she spoke to Joe Tomaso, another Marshall Field employee, who stated that Marshall Field would not curtail its energy demand during the curtailment. Kochanek also called Chuck Clark at Marshall Field's corporate headquarters in Minnesota and left a message with his secretary regarding the curtailment and stating that buy-through energy would not be available.

The petitioners filed a reply to ComEd's motion for summary Disposition, attaching the rebuttal and surrebuttal testimony of Keith E. Goerss, the director of economics and planning for QST Energy, Inc., a full-service energy company. Goerss's written testimony contained his opinion that option C did not provide ComEd with complete discretion in determining whether to provide buy-through energy and that ComEd did not take reasonable steps to insure the availability of buy-through energy on July 14, 1995. According to Goerss, reasonable efforts would include determining whether ComEd or another supplier (i.e., utilities, marketers, municipalities, or rural electric cooperatives) had energy available at a rate less than 15 cents per kWh that could be provided to ComEd's option C customers. Goerss did not dispute Gorski's testimony that ComEd surveyed other utility companies and the spot wholesale market to determine if such energy would likely be available during the curtailment. He believed, however, that ComEd's efforts were unreasonable because it failed to continue those efforts up to the time of the curtailment. On September 21, 1998, the hearing examiner submitted her proposed order to both parties and informed them of their right to file a "Brief on Exceptions". 83 Ill. Adm. Code § 200.820, 200.830 (1996). The petitioners' filed such a brief, raising eight exceptions to the proposed order. In addition to the arguments that the petitioners previously raised before the hearing examiner, they argued that the order incorrectly stated that the parties agreed to submit cross-motions for summary judgment. The petitioners stated that the hearing examiner gave them two options, neither of which were acceptable. They could either agree to limit the cross-examination of witnesses to 15 minutes, which they argued violated their due process rights, or they could submit cross-motions for summary judgment. When they refused to choose either option, the hearing examiner ordered the parties to file cross-motions for summary judgment. The petitioners, however, only requested that the proposed order be revised to reflect that they did not agree to such a procedure. ComEd filed a reply to the petitioners' brief in which it stated that the petitioners' agreed that the dispute between the parties was based on the interpretation of option C and, therefore, was a question of law to be decided by the Commission.

On December 16, 1998, the Commission issued an order in which it concluded that Rider 30 was not ambiguous. The Commission stated that, based on the plain language of the Rider, ComEd had "discretion" to decide whether to offer buy-through energy to its option C customers and that ComEd was not required to make reasonable efforts to maintain the availability of buy-through energy before initiating a curtailment period. In pertinent part, the order states:

"The Commission concludes that Rider 30C is not ambiguous. Under its plain meaning, ComEd has 'discretion' in deciding whether to offer buy-through energy during a curtailment. ComEd need not first make reasonable efforts to source buy-through power, before deciding not to offer buy-through. It has full discretion to decide whether to offer buy-through. If ComEd has given notice to its Rider 30C customers that it expects buy-through energy to be available during a curtailment, is it [sic] then required to make a reasonable effort to maintain the availability of such buy-through energy during the curtailment period. However, if ComEd has stated at the time it issues its notice of curtailment that buy-through energy will not be available, it has no obligation to provide buy-through energy."

In the alternative, the Commission held that, even if ComEd was required to use reasonable efforts to provide buy-through energy during a curtailment, it presented uncontroverted evidence that it made reasonable efforts to do so but was unable to locate buy-through energy within its own system or from third-party sources. The Commission also found that ComEd could not have provided its option C ...


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