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Caterpillar, Inc. v. Illinois Commerce Commission

March 24, 2004

[5] CATERPILLAR, INC.; ABBOTT LABORATORIES, INC.; FORD MOTOR COMPANY; A FINKL AND SONS COMPANY; DAIMLER CHRYSLER CORPORATION; MODERN DROP FORGE COMPANY AND GENERAL MOTORS CORPORATION, PETITIONERS,
v.
ILLINOIS COMMERCE COMMISSION; COMMONWEALTH EDISON COMPANY; PEOPLES ENERGY SERVICE CORPORATION; CENTRAL ILLINOIS LIGHT COMPANY; THE PEOPLE OF COOK COUNTY; THE PEOPLE OF THE STATE OF ILLINOIS; ILLINOIS POWER COMPANY; BLACKHAWK ENERGY SERVICES, LLC; MIDAMERICAN ENERGY COMPANY; UNITED STATES DEPARTMENT OF ENERGY; CITIZENS UTILITY BOARD; METROPOLITAN WATER RECLAMATION DISTRICT; CHICAGO AREA CUSTOMER COALITION; AMEREN CIPS AND AMEREN UE; BUILDING OWNERS AND MANAGERS ASSOCIATION; TRIZEC PROPERTIES, INC; NATIONAL ENERGY MARKETERS ASSOCIATION; AES NEW ENERGY, INC; METROPOLITAN CHICAGO HEALTHCARE COUNCIL; AND THE CITY OF CHICAGO; RESPONDENTS.



[6] On direct appeal from the Illinois Commerce Commission, Docket No. 02-0479

[7] The opinion of the court was delivered by: Justice Karnezis

[8]  This consolidated appeal arose as a result of a petition filed by Commonwealth Edison (ComEd) to declare certain electrical services "competitive" and to allow certain tariff amendments implementing the competitive service. Numerous parties intervened, including: Peoples Energy Service Corporation; Central Illinois Light Company; the People of Cook County; the People of the State of Illinois; Illinois Power Company; Blackhawk Energy Services, LLC; MidAmerican Energy Company; Illinois Industrial Energy Consumers; the United States Department of Energy; Citizens Utility Board; Metropolitan Water Reclamation District; Chicago Area Customer Coalition; Ameren CIPS and Ameren UE; Building Owners and Managers Association; Trizec Properties, Inc; National Energy Marketers Association; AES NewEnergy, Inc; and the Metropolitan Chicago Healthcare Council. Appearances were also filed by the City of Chicago and the Illinois Commerce Commission.

[9]  Appellants Caterpillar, Inc.; Abbott Laboratories, Inc.; Ford Motor Company; A Finkl & Sons Co.; Daimler Chrysler Corporation; Modern Drop Forge Company; and General Motors Corporation participated in the proceedings collectively as the Illinois Industrial Energy Consumers (IIEC) and filed separate appeals. Both appeals concern the petition filed by ComEd. We affirm the Commission's determination finding certain electrical services competitive (appeal number 1-03-0263) and affirm its order setting the "Rate Hourly Energy Price" as modified (appeal number 1-03-1706).

[10]   Proceedings Before the Commission

[11]   On July 19, 2002, ComEd filed a petition with the Commission to declare certain electrical services "competitive" pursuant to section 16-113 of the Public Utilities Act (Act) (220 ILCS 5/16-113 (West 2000)). Section 16-113 provides in part:

[12]   "An electric utility may, by petition, request the Commission to declare a tariffed service provided by the electric utility to be a competitive service. *** The Commission shall declare the service to be a competitive service * * * if the service or a reasonably equivalent substitute service is reasonably available * * * at a comparable price from one or more providers other than the electric utility or an affiliate of the electric utility, and the electric utility has lost or there is a reasonable likelihood that the electric utility will lose business for the service to the other provider or providers * * *." 220 ILCS 5/16-113 (West 2000).

[13]   ComEd's petition concerned its Rate 6L - Large General Service (Rate 6L), which provides electric power and energy to large commercial and industrial customers with loads of 3 megawatts (3MW) or greater. The petition alleged that because there was equivalent service available at comparable prices from other providers, ComEd's Rate 6L should be declared competitive. The petition also requested approval of the "related tariff amendments," which refers to the rate or cost of the service if it were deemed competitive.

[14]   Shortly thereafter, several parties moved to dismiss the petition or, in the alternative, to bifurcate the proceedings. The Commission denied the motion to dismiss the proceedings but agreed to bifurcate the proceedings. The Commission would first determine whether to declare Rate 6L competitive. Then, if Rate 6L was declared competitive, the Commission would determine what "tariff," or rate, would apply to the service.

[15]   After several hearings addressing whether Rate 6L should be declared competitive, the Commission issued an "interim order" on November 14, 2002. The interim order did not specifically grant or deny ComEd's petition. The interim order stated it would allow the petition to take effect by "operation of law" on the 120th day following the filing of the petition pursuant to section 16-113, which occurred on November 16, 2002. Section 16-113 provides, in part:

[16]   "The Commission shall make its determination and issue its final order declaring or refusing to declare the service to be a competitive service within 120 days following the date that the petition is filed, or otherwise the petition shall be deemed to be granted; provided, that if the petition is deemed to be granted by operation of law, the Commission shall not thereby be precluded from finding and ordering, in a subsequent proceeding initiated by the Commission, and after notice and hearing, that the service is not competitive * * *." 220 ILCS 5/16-113 (West 2000).

[17]   The Commission's order included a summary of the evidence as well as findings of fact. It also explained its reason for allowing the petition to take effect by operation of law. The interim order specifically stated, "the Commission, in its review of the evidence, finds that competitive conditions in the ComEd service territory for Rate 6L customers 3MW and greater exist in considerable degree; however, there are sufficient concerns about recent developments that cause the Commission to refrain at this time from either granting or denying ComEd's petition." Appellants filed a petition for rehearing with the Commission to reconsider the Commission's interim order, which was denied. Appellants filed an appeal on January 31, 2003, which was given appellate number 1-03-0263.

[18]   The Commission held several additional hearings to determine what rate should apply to ComEd's Rate 6L service. ComEd proposed a rate they referred to as "Rate Hourly Energy Pricing" (HEP), which would provide hourly energy prices to consumers the day before the service is provided. The Commission entered an order on March 28, 2003, adopting the Rate HEP, with some modifications. Appellants filed a petition for rehearing with the Commission to reconsider the order, which the Commission denied. Appellants filed an appeal on June 18, 2003, from the Commission's March 28, 2003, order, which was given appellate number 1-03-1706.

[19]   Appeal Number 1-03-0263

[20]   Appellants contend: (1) the interim order is unlawful because the Commission lacked authority to state in the interim order that the petition would take effect by operation of law; (2) the Commission was required to either grant or deny the petition because it held hearings on the matter; (3) ComEd failed to meet its burden that Rate 6L should be declared competitive; and (4) the Commission's conclusion that the evidence regarding the number ...


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