case and i'm trying to remember if they have tried to remember it but our concern was that they did not use procedure for any they called it right here and then we told them they had to go back and do something else on smart grid that was an established procedure this is a new the process even though they're calling it a writer because i don't think you know what has to call it why isn't this exempt control and did that cost could be recovered if it fit that category of expense and it also did not i just think utilities affray income didn't affect the utilities profits in this instance were still recovering revenues reverse that recovery money from ratepayers but it doesn't fit that two prong task because it's not a good expense imposed on utility such as municipal franchise fees or coal tar cleanup costs or the price of purchase care gas which were specifically identified by well this record in illinois appellate courts in the past and is expenses that were passe fit the criteria for permissible riders that this court talked about in established in the comic but isn't it very clear in this case or at least the the idea in this case and whether it works we'll have to see that say in smart grid they having a great day in a rate set up and then they wanted to impose this to go back right and collect these fees here or this is the rate for however far this is how much really increase you're going to get for however long it takes you you're not going to get any more you are not going to have any taken away from you you manage everything within this rate increase that we're going to give you and that includes well maybe we won't that's i mean maybe winter should have been over and today so that we don't have ten inches of snow tomorrow right but they're probably not going to happen but they do here there's no guessing you get this amount of money and you do with it is you have to and here's why it's inappropriate your honor because it creates this legal and factual fiction they have a revenue requirement to stay on this and the date of the order back in january two thousand and twelve is due to lose revenue write requirement from that point going forward isolates those two revenue streams which includes a profit level unlike other writer expenses it includes of how the level says it will soon you must recover that level of revenues from just  mimic the competitive marketplace what does it mean that means to you to set the rates yes to recover the cost in a reasonable profit level but there's no guarantee of profits going forward and the point of that is the only game in town in terms of of where a customer can go get natural gas delivery service so because this is a monopoly we need to incite efficiencies so who are the commission to assume that those two revenue streams residential small business customers revenue streams which includes net operating profit level must be guaranteed going forward this is isolated a particular cost in this case fixed cost it  concern is well when they went to this to make sure that since these are the only game in town that the big meeting their health and they can maintain their infrastructure whatever it takes to do what needs to be done to provide this service to and if you could see small businesses but commercial businesses of the they can be bigger or smaller and residential well certainly  protected utility in those situations where it needs additional revenues on first of all but they have to come back years later to make up here death doesn't that isn't necessary well if it's that revenue requirement that we sat we said there's a that's a prohibition against there's a prohibition you could answer attractive rate making under illinois law we don't look back we look forward and that's again the whole point here on that that on rates are set the utility is set free to go and do what it can with a fair amount of money and hopefully operate efficiently but the notion that that revenue requirement must be guaranteed month after month this utility tome or the commerce commission said let's go back each year and a really true offer of reconcile the amount of revenues that the presidential and commercial customer classes have supplied  concept says and that's part of the illinois administrative code eighty three illinois administrators code parts to eighty five in two eighty seven and that says that when you to leave seeks to adjust its rates it's required to file twelve months worth of information and that's known as utilities test here and they can choose either historical test year or a future test year and there are certain restrictions of this to how far back or how for far forward they can go with a layoff in twelve months worth of  but here that's what the and importance of that test your rule is that when the commerce commission is setting rates i want to make sure they have the entire picture of the utilities finances and they have to be very clear in the commission's own rule which is in the comment decision to this notion again that you're isolating experience in this case what with utilities calls their fixed costs for those two customer classes that includes a profit and now be looking at the e the risk of single hair issue great making requires that all writers be closely scrutinized to prevent understatement or overstatement of revenue carmen and the comments decision also stated that the reviewing also closely scrutinized all writers to prevent understatement or overstate you know the revenue requirement and that's the root of our appeal here were saying when the commission made the decision to go the concept still the same we in the past we've given them discretion and we look we give them from discretion because they know this and we don't  that that this this process nappy continued that this now be calm reviewed as as a lawful act of the commission because again the purpose of regulation opportunity quote under efficient and economical management for the utility to raise some money necessary for the proper discharge of its public duties and then also  legal formula and often must be tentative since exact results cannot be foretold and that's in the state public utility decision it reached to eighteen right eleanor is not the only state that's looked at this in actually adopted this to correct that yes that's right your honor then only one state apparently has ohio is abandoned for something else at this point but how about how many other states and what were the challenges there  you can write or maybe a word not tied to energy efficiency which had been a previous reason when it first approved the filing it didn't have anything to do with fears about conservation and declining revenues exceptionally cold winters in the beginning of the pilot and as we know in two thousand and twelve what is an unusually warm winter so we don't know what kind of impact that's going to have on rate payers we believe in the long run as i mentioned in the beginning that this was a writer i mean that it's a fact that this writer what is proposed by the two of us for the utilities because they believe it's in their long run best interests they didn't do this out of the kindness of their heart because they wanted to possibly give always been within the utilities discretion to come and file or a case when they believed it was appropriate and then they present the twelve months worth of data that reason is it turns out and the commission knew this when it when it stated that i think we'll have an opportunity for on because this is this is just what a law if you don't raise something in your petition for a hearing it's either way to forfeit and in the court doesn't really have jurisdiction even to to consider the issue board member who was involved in lots of cases get dismissed on that basis we don't do that anymore because it was really form over substance so is this form over substance or is it truly jurisdictional i believe is truly i i don't know of a case where a court even if it is not jurisdictional in your court has chosen to raise the issue either all or ignore the fact that there was a failure to raise it it's always been it's been base rates but then says if your actual profit your actual rate of return in later years is higher when you have a refund situation that's not going on here when what's going on here is recovering the revenue based on the costs that happen in the future because it isn't because it's insuring the income stream that was once estimated to allow for this rate of return there's probably more of a chance it's going to get in so there's an adjustment to the this right so by setting a standard rather environment and then deciding how it's going to recover the commission really hasn't done anything different it has this right or is it different right here it's not a cost recovery rider it's a vision it is go for it's not something to be done before but it's consistent with remaking principles not the regulators job once you set rates you let me tell you go for it and do what it will with the revenue requirement that's been established in the case and we want to incite efficiencies so we don't want to look over the shoulder and take a retrospective look to see how well they've done to see if they've earned that revenue requirement it's completely into antithetical to the notion of rate of return regulation discussed in those landmark cases state public utilities of bluefield and water works well without an accurate revenue perfect the forecast of revenues is is the problem here on utilities that's their defense their job that's the nature of their business as we indicated in our prior brief  in the first district oh that is the expected reality of running a utility business that you have to forecast demanded usage so there's nothing in that sense unexpected about the notion that utility to come in and say hey we're having a problem forecasting revenues here and then its results we're having trouble recovering our fixed cost it's just the nature of the business there are uncertainties and it's not the job of the regulator flat customer charge part of the bill and decrease the amount that is subject to usage variation on when you recover your delivery service there's a flat charge sheet you pay every month that doesn't vary and then a certain portion of the costs are recovered through the variable charges and your bill is impacted by how much you use so here now hundred writer b yet we have a situation where customers essentially if their class as a whole didn't produce the if in under this new rate design it is the test year exam and i believe that was what you're referring to and perhaps i don't know who started it is misunderstood your question or not but it's clear absolutely detest your i think that prior to b b is a solution in need of a problem again utilities car they present forecasting data and what they talk about in their forecasting tests is that they examine trends in energy efficiency that of that commodity so they look at them with a forecast they look at the level of energy efficiency appliances in this saturation of those appliances in the midwest revenues and again the commission didn't identify any problem with that forecast so that's why i say it's a solution in need of a problem even home so i would direct the court's attention to  you record volume eighty transcript pages eighty two and eighty three where in the lead witness for the utility indicated that in fact revenues for residential customers are not declining and revenues overall for the commission established a new all time year setting order and because it was new and different they said what here's what we'll do each year we'll check back and see if the utilities over and the court threw that out in the saying that that was not within the commission's authority to do that so this was not come on it's not the commission's argument that our citation to that retroactive rate making l markup in profit they were on a post on utility and pass through straight to the customer and in terms of the waiver issue very briefly your honor so we didn't raise it on in the end it initially when the co writer b b a was first approved in two thousand and eight we argued retroactive rate making on principles had been violated the commission rejected that on in the meantime this court came down with this decision and commented on it did not address this rhetoric to rate making the issue because it focused on a single issue aspect of it as a strategy decision in terms of the second case we focused on the single issue rate making aspect that jordi of the commissioners that were present remedy the exhaustion of remedies was was applicable on some of their commission could correct it's a mistake we believe that the commission was all likely to correct something that they believed was not a mistake