Appeal from Circuit Court of Sangamon County Nos. 01MR71 99MR333 Honorable Robert J. Eggers, Judge Presiding.
The opinion of the court was delivered by: Justice Cook
Plaintiff, Central Illinois Public Service Company, d/b/a AmerenCIPS (CIPS), is an Illinois public utility. Defendant, Illinois Rural Electric Company (IREC), is an Illinois not-for-profit corporation organized on a cooperative basis for the purpose of furnishing and distributing electrical energy. Both are electric suppliers within the meaning of the Electric Supplier Act (Act) (220 ILCS 30/1 through 16 (West 2000)).
Since November 12, 1957, IREC has provided electrical service to the Schimmel farm in Pike County. On June 26, 1969, IREC and CIPS entered into a service-area agreement (agreement) delineating the service areas in which each was entitled to provide electric service to customers. The boundary line established by the agreement ran through the Schimmel farm.
A portion of the Schimmel premises was eventually transferred to the Akers in 1988 and is currently owned by them in the form of the Oakbrook Subdivision. Another portion was eventually transferred to the Longs in 1995, and a third portion was eventually transferred to Paxton in 1997. The Long premises are divided approximately in half by the boundary line established by the agreement. The Paxton premises and the Oakbrook Subdivision are located wholly on the IREC side of the boundary line.
The three tracts were annexed to the City of Pittsfield in 1995. Although they were not on the CIPS side of the boundary line, and CIPS had not previously furnished service to them or to the Schimmel premises, CIPS connected electric service to the Paxton premises and several lots in the Oakbrook Subdivision in 1997. CIPS connected electrical service to the Long premises in 1996, but none of that service is supplied or used on IREC's side of the boundary line. In 1997, IREC filed a complaint with the Illinois Commerce Commission (Commission) regarding service to the Long premises. In 1998, IREC filed an amended complaint regarding service to the Paxton premises and Oakbrook Subdivision. The Commission ruled in favor of CIPS as to the Long premises and in favor of IREC as to the Paxton premises and Oakbrook Subdivision (ICC No. 97-0287).
The Commission referred to the following provisions of the agreement between CIPS and IREC as relevant to the instant dispute.
Paragraph one provides that "[t]he parties hereto covenant and agree that each shall continue to be entitled to (a) furnish service to customers at locations which each was serving on July 2, 1965." (Emphasis added.)
"[T]he parties hereby covenant and agree that [IREC] shall be entitled exclusively to serve all consumers with their electric service requirements in the area or areas designated as IREC on the maps hereto attached as Appendices 1 to 8, inclusive, and [CIPS] shall be entitled exclusively to serve all consumers with their electric service requirements in the areas designated as CIPS on said Appendices 1 to 8, inclusive, provided, however, that each party may continue to serve any location or premises which it is entitled to serve under paragraph 1 above even though such locations or premises be located in the areas designated on Appendices 1 to 8, inclusive, as the area of the other party ***." Paragraph six provides:
"The future annexation into a municipality of any part or all of the service areas of one or both the parties hereto shall not affect this [a]greement provided that such party whose service area or areas, or a part thereof, is, or are, annexed in whole or in part, can or does qualify to serve in such municipal area under the provisions of [s]section 14 of the Electric Supplier Act, as approved July 2, 1965. If such party does not or cannot so qualify then the right to serve in such area shall be determined under the Electric Supplier Act as approved July 2, 1965."
Service-area agreements control the rights of the parties to such agreements, to the exclusion of the Act, except insofar as the agreement incorporates the Act. Rural Electric Convenience Cooperative Co. v. Illinois Commerce Comm'n, 75 Ill. 2d 142, 146, 387 N.E.2d 670, 672 (1979). The Commission concluded that neither CIPS nor IREC had any rights to continue to furnish service under paragraph one of the agreement, the "grandfather" clause, because none of these three tracts were a "location" served by IREC or CIPS on July 2, 1965. The Commission held that a "location" in the context of paragraph one means "a particular point at which electricity is being supplied, rather than an entire farm or tract of land on which there is at least one service point." Central Illinois Public Service Co. v. Illinois Commerce Comm'n, 219 Ill. App. 3d 291, 299, 579 N.E.2d 1200, 1205 (1991) (hereinafter Canton Prison). IREC was providing electrical service to the Schimmel premises on July 2, 1965, but the point at which electricity was supplied by IREC was not on the three tracts in dispute.
The Commission concluded that CIPS had the exclusive right to provide service to the Long premises. The Long premises were on CIPS's side of the boundary line. Although the Long premises had been annexed to the City of Pittsfield, CIPS "can or does qualify to serve in such municipal area" as required by paragraph six of the agreement.
Although the Paxton premises and Oakbrook Subdivision were on IREC's side of the boundary line, the Commission, referring to paragraph six of the agreement, held that IREC "does not qualify to serve in such municipal area under section 14 of the Act due to its lack of a franchise with the City of Pittsfield." Because the issue accordingly was not ...