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The People Ex Rel. v. Charles E. Box

December 14, 2010

THE PEOPLE EX REL.
LISA MADIGAN, ATTORNEY GENERAL OF ILLINOIS; CITIZENS UTILITY BOARD; ON DIRECT REVIEW OF ORDERS OF THE THE CITY OF CHICAGO; MULTIUT ILLINOIS COMMERCE CORPORATION; NORTH SHORE GAS ) COMMISSION IN ITS DOCKET NOS. COMPANY; AND THE PEOPLES GAS LIGHT 07-0241/07-0242 CONSOLIDATED AND COKE COMPANY PETITIONERS,
v.
CHARLES E. BOX, ILLINOIS COMMERCE COMMISSION; CHAIRMAN OF THE ILLINOIS. THE PEOPLE EX REL. LISA MADIGAN, ATTORNEY COMMERCE COMMISSION GENERAL OF ILLINOIS; CITIZENS UTILITY BOARD; THE CITY OF CHICAGO; CONSTELLATION NEWENERGY, INC.; CONSTELLATION NEWENERGY - GAS DIVISION, LLC; ENVIRONMENTAL LAW AND POLICY CENTER; ILLINOIS INDUSTRIAL ENERGY CONSUMERS STYLED AS SUCH COLLECTIVELY FROM THE FOLLOWING INTERVENORS: ABBOTT LABORATORIES, INC., GENERAL IRON INDUSTRIES, AND THE UNIVERSITY OF ILLINOIS; MULTIUT CORPORATION; NICOR ADVANCED ENERGY, LLC; PRAIRIE POINT ENERGY, LLC; RETAIL GAS SUPPLIERS STYLED AS SUCH COLLECTIVELY FROM THE FOLLOWING INTERVENORS: DIRECT ENERGY SERVICES, LLC, DOMINION RETAIL INC., INTERSTATE GAS SUPPLY OF ILLINOIS, INC., AND US ENERGY SAVINGS CORPORATION; LOCAL UNION NO. 18007, UTILITY WORKERS UNION OF AMERICA, AFL-CIO; AND VANGUARD ENERGY SERVICES, LLC, RESPONDENTS.



The opinion of the court was delivered by: Justice Joseph Gordon

JUSTICE JOSEPH GORDON delivered the judgment of the court, with opinion. Justices Cahill and McBride concurred in the judgment and opinion.

OPINION

This is an appeal from an order of respondent the Illinois Commerce Commission (ICC or respondent), canceling previous gas rates for customers in Illinois and authorizing North Shore Gas Company (North Shore) and Peoples Gas Light and Coke Company (Peoples Gas) (together, the Utilities) to file new tariff sheets. Petitioners, the People of the State of Illinois (People), the Citizens Utility Board (CUB) and the City of Chicago (Chicago) (together, the GC petitioners), the Utilities, and Multiut Corporation (Multiut), now appeal from that order on various grounds. Respondent contends, inter alia, that this court does not have jurisdiction to reach the merits of this appeal under the Public Utilities Act (Act) (220 ILCS 5/10-201(a) (West 2008)), because the Illinois Appellate Court for the Second District was first to acquire jurisdiction over this matter. For the reasons discussed below, we agree with respondent and transfer this case back to the Second District.

I. BACKGROUND

On March 9, 2007, the Utilities filed tariffs with the ICC proposing general increases in natural gas rates of $102,560,000 for Peoples Gas and $6,314,000 for North Shore, new rate mechanisms and other tariff revisions. On April 4, 2007, the ICC suspended the proposed rates and initiated contested rate cases to examine the proposed rates and revisions. Several parties intervened, including the parties to this appeal, and an evidentiary hearing was held.

The ICC entered its dispositive order on February 5, 2008, permanently canceling previous gas rates and ordering the filing of new tariff sheets. In doing do, the ICC authorized Peoples Gas to file new tariff sheets designed to produce annual revenues of $461,780,000, which reflected an increase of $71,191,000; and North Shore to file new tariff sheets to produce annual revenues of $63,439,000, reflecting a decrease of $213,000. In calculating those rates, the ICC denied the Utilities recovery of certain incentive compensation and pension costs. However, the ICC authorized a volume balancing adjustment rider (Rider VBA), a decoupling mechanism that imposes a monthly per-customer surcharge for decreased gas consumption, and a credit for increased gas consumption. In addition, the ICC authorized two changes to the full standby transportation rider (Rider FST), a rider used by transportation customers.

Several parties, namely, the People, the Utilities, Multiut, the Illinois Industrial Energy Consumers (IIEC), the University of Illinois (UI), the CUB, and Chicago, filed applications for rehearing within the statutorily allowed period of 30 days. On March 26, 2008, the ICC issued a notice of commission action allowing IIEC and UI's rehearing application on only one issue and denied all other applications for rehearing.

Each party sought to file an appeal, in varying chronological order, which raises the jurisdictional question that we now address. Substantively, GC petitioners contend that the ICC erred in authorizing the Rider VBA because it violates the prohibition against single-issue rate-making and test-year principles, it improperly discriminates against two classes of customers, and the Utilities did not prove that it was necessary. They also argue that the ICC also erred in calculating the reduction in the Utilities' return on equity due to the decreased risk brought by the rider and in calculating the rates by failing to account for some portions of depreciation of the rate base. Moreover, the Utilities contend that the ICC erred by not including all of their incentive compensation in the rate base and operating expenses, by excluding pension costs from the rate base, and by making a reduction in their approved rate of return to account for the lower risk caused by Rider VBA. Finally, Multiut contends that the ICC erred in allowing changes to Rider FST because, in doing so, it approved a non-unanimous settlement without conducting an independent factual review.

On April 28, 2008, before the last order disposing of the issue for which rehearing was allowed, the Utilities filed a petition for judicial review in the Second District. Likewise, Abbott Laboratories (Abbott), which is one of the Illinois Industry Energy Consumers*fn1 filed a petition for review in the Second District, and the People did the same on May 6, 2008, both before an order was entered disposing of the last pending issue for which rehearing was granted. Subsequently, on July 30, 2008, the ICC entered an order disposing of the last issue for which rehearing was allowed and amending its previous order to reflect that determination. Those orders were served on the parties on July 31, 2008. At 9:23 a.m. that day, the People filed a petition for review in the First District, at 11 a.m., the Utilities refiled a petition for review in the Second District, and at 11:17 that day, the CUB filed its petition in the First District. On August 18, 2008, Chicago also filed its petition for review in the First District, and the People filed a motion in the Second District to dismiss the petitions filed before July 30 as premature and to transfer the Utilities' second petition to the First District. Multiut subsequently filed its petition for review in the First District on August 22, 2008. Although the People filed a motion asking to transfer only the Utilities' second petition, the Second District, on August 26, 2008, apparently transferred the Utilities' first petition and other pending appeals to the First District on its own motion. In doing so, the Second District Appellate Court entered a transfer order without elaboration, in which it determined that the First District Appellate Court had jurisdiction over these appeals. The transferred appeals have been consolidated with four appeals that had been filed in the First District.

On October 1, 2008, respondent filed a motion to the supreme court for a supervisory order to vacate the transfer orders of the Second District and to order that all appeals be transferred and consolidated in the Second District. The supreme court denied the motion on October 29, 2008.

Respondent now contends that the First District does not have jurisdiction over the appeal because the Second District was first to acquire jurisdiction and under the Public Utilities Act, it now has exclusive jurisdiction over the appeals. The Utilities agree with respondent's contention. The GC petitioners did not address this issue in their brief, but pursuant to this court's request at oral argument, the People submitted their response to respondent's motion to the supreme court for a supervisory order. In that response, the People contend that the First District has jurisdiction under the Act because the petitions filed in the Second District were premature and the First District was, therefore, first to acquire jurisdiction over the petitions. The ICC responds that, although the petitions filed in the Second District were premature when filed, that court was first to acquire jurisdiction because the petitions became effective when the ICC entered its order on rehearing. We agree with that contention and therefore transfer the appeal to the Second District Appellate Court.

II. ANALYSIS

In response to the appeals filed in the First District, respondent contends that this court does not have jurisdiction to review the order from the ICC. The Utilities, which are petitioners, state that they are in agreement with respondent's contentions that this court does not have jurisdiction, but assert that they are not pursuing that subject in their brief. Respondent and the Utilities maintain that because the Second District was first to obtain jurisdiction, section 10-201(a) of the Act precludes this court from acquiring jurisdiction over this matter. For the foregoing reasons, we agree with respondent.

We first note that petitioners appeal from a decision of the ICC, an administrative body. This court has jurisdiction to review administrative decisions only as provided by law, and we must exercise special statutory jurisdiction to review such administrative action. Ill. Const. 1970, art. VI, §6; Town & Country Utilities, Inc. v. Illinois Pollution Control Board, 225 Ill. 2d 103, 121; 866 N.E.2d 227, 237-38 (2007). Accordingly, the statute that confers special statutory jurisdiction to an appellate court to review an administrative decision also limits it. Town & Country Utilities, Inc., 225 Ill. 2d at 122, 866 N.E.2d at 237-38.

The statute that gives an appellate court jurisdiction to review an order from the ICC is section 10-201(a) of the Public Utilities Act (220 ILCS 5/10-201(a) (West 2008)). Under section 10-201(a) of the Act: "Within 35 days from the date that a copy of the order or decision sought to be reviewed was served upon the party affected by any order or decision of the Commission refusing an application for a rehearing of any rule, regulation, order or decision of the Commission, including any order granting or denying interim rate relief, or within 35 days from the date that a copy of the order or decision sought to be reviewed was served upon the party affected by any final order or decision of the Commission upon and after a rehearing of any rule, regulation, order or decision of the Commission, including any order granting or denying interim rate relief, any person or corporation affected by such rule, regulation, order or decision, may appeal to the appellate court of the judicial district in which the subject matter of the hearing is situated, or if the subject matter of the hearing is situated in more than one district, then of any one of such districts, for the purpose of having the reasonableness or lawfulness of the rule, regulation, order or decision inquired into and determined.

The court first acquiring jurisdiction of any appeal from any rule, regulation, order or decision shall have and retain jurisdiction of such appeal and of all further appeals from the same rule, regulation, order or decision until such appeal is disposed of in such appellate court." 220 ILCS 5/10-201(a) (West 2008).

Thus, for an appellate court to have jurisdiction over an order from the ICC, the subject matter of the proceeding must be located in the judicial district of the appellate court, and "if the subject matter of the hearing is situated in more than one district," the appellate court which first acquires "jurisdiction of any appeal" from the decision is the court that ...


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