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Ameren Illinois Co. v. Illinois Commerce Commission

Court of Appeals of Illinois, Fourth District

December 11, 2013

AMEREN ILLINOIS COMPANY, Petitioner,
v.
ILLINOIS COMMERCE COMMISSION; THE CITIZENS UTILITY BOARD; AARP; THE COMMERCIAL GROUP (Best Buy Company Inc., J.C. Penney Corporation, Inc., Macy's, Inc., Sam's West, Inc., and Wal-Mart Stores, Inc.); THE INDUSTRIAL ENERGY CONSUMERS (Air Products and Chemicals Company, Archer-Daniels-Midland Company, Caterpillar, Inc., CCPS Transportation, LLC, GBC Metals, LLC, Keystone Consolidated Industries, Inc., Marathon Petroleum Company, LP, Olin Corporation, Tate and Lyle Ingredients Americas, Inc., University of Illinois, Viscofan USA, Inc., and Washington Mills Hennepin, Inc.); THE OFFICE OF THE ATTORNEY GENERAL; and THE PEOPLE OF THE STATE OF ILLINOIS, Respondents. AMEREN ILLINOIS COMPANY, Petitioner,
v.
ILLINOIS COMMERCE COMMISSION, THE CITIZENS UTILITY BOARD, AARP, THE OFFICE OF THE ATTORNEY GENERAL, and THE PEOPLE OF THE STATE OF ILLINOIS, Respondents.

Modified upon denial of rehearing January 28, 2014

Held[*]

In proceedings on petitioner's application to establish a performance-(based rate tariff under section 16-108.5 of the Public Utilities Act, commonly known as the Energy Infrastructure Modernization Act, the Illinois Commerce Commission properly reduced petitioner's proposed rate of common equity to make it more consistent with the common equity of petitioner's holding company, considered petitioner's accumulated deferred income taxes for projected plant additions in calculating petitioner's rate base, and decreased petitioner's rate base by unused vacation pay accrued by its employees.

Petition for review of orders of Illinois Commerce Commission, Nos. 12- Review 0001, 12-0293.

Albert D. Sturtevant, of Whitt Sturtevant LLP, of Chicago, Edward C. Fitzhenry, of Ameren Services Company, of St. Louis, Missouri, and Mark A. Whitt (argued) and Andrew J. Campbell, both of Whitt Sturtevant LLP, of Columbus, Ohio, for petitioner.

John P. Kelliher and James E. Weging (argued), Special Assistant Attorneys General, of Chicago, for respondent Illinois Commerce Commission.

Julie L. Soderna, Kristin Munsch, Christie Redd Hicks, and Orijit Ghoshal, all of Citizens Utility Board, of Chicago, for respondent Citizens Utility Board.

Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Jane Elinor Notz, Janice A. Dale, Karen L. Lusson, Susan L. Satter, Timothy O'Brien, and Brian F. Barov, Assistant Attorneys General, of counsel), for respondents Office of the Attorney General and the People.

Eric Robertson and Andrew Rankin, both of Lueders, Robertson & Konzen, LLC, of Granite City, and Conrad R. Reddick, of Wheaton, for other respondents.

Panel JUSTICE HOLDER WHITE delivered the judgment of the court, with opinion.Justices Appleton and Pope concurred in the judgment and opinion.

OPINION

HOLDER WHITE JUSTICE

¶ 1 In January 2012, Ameren Illinois Company (Ameren) filed its initial application with the Illinois Commerce Commission (Commission) to establish a performance-based rate tariff under the authority of section 16-108.5 of the Public Utilities Act (Utilities Act), commonly referred to as the Energy Infrastructure Modernization Act (Modernization Act) (220 ILCS 5/16-108.5 (West 2012)), enacted by Public Act 97-616 (Pub. Act 97-616, § 10 (eff. Oct. 26, 2011)). Following a September 2012 evidentiary hearing, the Commission issued a written decision in which, among other things, it (1) rejected and subsequently reduced Ameren's proposed rate of common equity so that it was more consistent with the common equity of Ameren's holding company, Ameren Company (holding company); (2) considered Ameren's accumulated deferred income taxes (ADIT) for projected plant additions in calculating Ameren's rate base; and (3) decreased Ameren's rate base by unused vacation pay accrued by Ameren employees.

¶ 2 In April 2012, Ameren filed its first annual update with the Commission. In December 2012, the Commission reaffirmed the aforementioned findings.

¶ 3 On appeal, Ameren asserts the Commission made three reversible errors in reaching its decision, including (1) considering the capital structure of Ameren's holding company rather than the actual capital structure of Ameren when determining rate base; (2) reducing Ameren's rate base by ADIT for projected plant additions; and (3) decreasing Ameren's rate base by unused vacation pay accrued by Ameren employees.

¶ 4 We affirm.

¶ 5 I. BACKGROUND

ΒΆ 6 Ameren is a public utility that distributes electricity and gas to customers in Illinois. As a public utility, Ameren's rates are subject to regulation by the State of Illinois pursuant to the Utilities Act (220 ILCS 5/9-101 to 22-503 (West 2012)), through which the General Assembly has delegated to the Commission the authority to review the rates suggested by public utilities ...


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