care in this case is a consolidated matter emran the only commerce commission et al the numbers these consolidated matters are four one zero zero nine six two four one zero zero nine seven six and four one one zero zero seven five for the apple lea now it's important to note that commission's own staff does not agree with this interpretation nor should the commission's interpretation suggest that its decision making in this case was backed that it made a decision to change  specifically section nine to ten and that statute says that the commission quote shall have the power to ascertain the value of the property of every public utility industry and every fact when it which in its judgment may or that he decision to spend that money was reasonable i e proof and the money was spent for something that is using useful to provide service or making some determination of how to appreciate it should be calculated the problem here is that the way the commission on about the exercise constituted a drastic change from its pas practice on that very subject it justified the change by saying that section nine to eleven required it to do the valuation the way that it did when and fact and prior cases the commission when jack did that argument and said no nine to eleven doesn't require us to make this of just one and we're not going to do it in four cases the most recent court case proceeding our case that's what the commission said that's what the commission continued to say after we filed our case and whether those prior cases were on appeal mr waiving argued those cases and said nine to eleven doesn't bind this commission to make the adjustments that the partisan act has advocate context of a contest to take place it can do that but if it does that it passed to that has to be clearly indicated and those are the words in the statute clearly indicated at the beginning of the proceeding can then then and that's no such notice was provided in our case as i indicated f time we filed our case and while the case was being litigated some other parties agree that rather the set rates on the traditional one year basis under the tester it was going to set rates over a five year period and allow it to step increase now the commission didn't have a problem with the idea of setting rates over five years it actually found some merit in that approach because it provided great stability and there were all sorts of customer benefits that could be cleaned from that arrangement the problem of cour together signed off on some parties but not others leaving to get another problem which is that stipulations can't be imposed on non signatory parties as a commission trying to do with so again i'm sorry served by amor emraan originally proposed rates in this case that would have increased the livery service cost for each of the amerind utilities the s four rate classes which include most of the i e c companies in this case by almost fifty seven percent these were the largest increases proposed by anyone for any requests in this case that is one of the reasons we are in in the case the proposed increases however for many i see customers were worse than those for the d s for class as a whole the d s for class has for sub classes subclass contain the most i've seen companies would have been subject to increases of five hundred forty one percent on the silk of system so that i'm sixty seven yelling my power system and one thousand two hundred seventy percent on the sets a simple little my public service company says the biggest factor by far driving these one retain the current plan and service allocator that have been used for many many years or to use a composite allocator based partly on plan and service and partly on key to each the liver you get recognition of the fact that there were other factors besides planted service that may be affecting this tax amount i see appeals the commissions change in the method of allocating the pira tax among amerinds customer rate classes from an allocation based on plan and service the one based on customer's electric usage i see also appeals to commissions this treatment of the cure of tax expense by removing it from existing rates to collect it through a wire as a pass through tax rate structure that is in the act that our evidence showed in this case was intended to maintain the current then current level of the tax on each individual w and the utilities as though they were there to pay socially the same invested capital tax they were paying and the legislature added come up with a way to collect that amount and they used the mechanics of the the climbing or incline block rate so our position is essentially that if you look beyond the sentence in the legislature that talks about the  you will discover in our evidence show the imperial evidence showed that while roughly eighty three percent seventy seven percent something like that of the tax is related to the original invested heavily taxed which is a function of plan and service which was the basis for the original allocation out r c also has taken you have asked us to address the objection restructured the electric utility industry as a result you tell a swer expected to transfer significant assets to nonlethal of these using a customer designed here tax rate structure the legislature preserve the amount of the  says regarding this is reasonable i think under the cases that we cite in our brief if the commission's actions were based on a misconception or misunderstanding of the law you can remain on the case to them with instructions that they consider the case again with the proper understanding of the law so the issue here is really whether or not they understood the law correctly and whether that what the legislature was doing the mechanics our structure for collecting this fixed amount of the tax that was going to be escalated by some inflation over time is innocent the mechanics of that  not the issue here issue of year was whether or not or what caused the tax or what causes that action the first instance of i can't speak for the general assembly as to whether or not they knew what they were doing sometimes they think they do and she only got a little bit of time left i actually covered most of the points i was going to make in the question raised in the very first instance by the court so i think it would beho commissioners now we keep point of the four commission cases with decreasing majorities of commissioners green with the position we have the one case where we did the opposite that there's all these other cases where you totally agree presumably w the real issue as i see it though is the commission's authority when the commission suspends or proposed a terrible utility determination of the just and reasonable rates becomes the commission's duty under a nine to one see their duty requires us to find  reasonable rates under the statute and we asked the tax than they actually get delivery of electricity and i think that's sufficient cost position show for the commission to adopted a kilowatt per hour u but that's because their jerseys are a different color or worse something it there's just there's a a fundamental violation of due process when the rules are changed after the fact instead of giving parties notice there was no notice of the change here the two thousand and three case that the commission counsel referred to was hammering a case that and for subsequent cases the commission distinguish because of the peculiar facts of fact that had to do with declining investment levels which didn't happen and wasn't at issue in the subsequent four cases wasn't an issue in our case  talk about the universe of cases that exists i think we need to focus on you know what's happened in the past decade in the past decade the treatment has been consistent whenever this was a disputed issue the commission said we're not going to make the adjustment that decision is wrong really for two reasons number one it misanthrope before you get to why it is rome you good guys the commission at this juncture has to follow what the second district said as as of this nine to eleven it does not require us number two the second district basically substituted its judgment for the commissions on the issue of what the appropriate counters the court basically said well we think we know better than the commission what its own rule so we're going to change so we would ask this court to reverse the commission we understand that creates a conflict among the circuits that would ultimately be resolved by the illinois supreme work and there's nothing wrong with that with respect to the statement that the public would be to private just a reasonable rates if this adjustment doesn't stand by definition rates that are say about that is the allocation of this sure tax is an issue of rate really it's initial rate design and if there's any area where the commission has very raucous creche and it's in great design there's no such thing as a correct ra design and the issue here isn't whether the commission based on the evidence made the best possible decision on what the best allocation is that's not the issue the issue is is the commission decision is it is the to the treatment of depreciation and let me suggest that section one dish two eleven does refer to value as part of the sentence when you read it the sentence that makes up that section the word value is in there if it is now without meaning and the term value value of the assets really is referring to the components of the great base which are made up of dollars and it says that you can get the value of your rate base that is in that is currently incurred in used and useful and if it's not then you original cost less depreciation and when the commission determines that value it has to match the depreciation with the rate base of terminations over the same period where the next twelve months or eighteen months if there's going to be pro forma capital additions the commissions rule permitted those adjustments and that's also what the stink which is this case from the b p i case we have a rule here that the commission was follow now there  didn't follow it consistently probably not but the commission was following a rule that was allowing pro forma just once in the real question is if you're going to make a pro forma adjustment burke capital addition after the end of the test year you also have to make corresponding adjustments for accumulated appreciation the answer is yes you do and that's essentially what the second district determine in any event if you also just this side here notice is a little confusing to me because this is more like an argument that amber would be making if they had been subject to making or some other proceeding in front of the commission where the rule was applied to them and there had been no notice given to them at all as a practical matter in a rape case they make their the issues that are governed in a rape case are governed by the utilities initial filing and the direct testimony that's filed by the other parties at the very beginning of this case direct testimony was filed by a c the attorney general and i think by the commission staff that raised this very issue that hamlin house says if you will we didn't get any notice of this but sure did get notice they participated in cross examination they presented testimony in response they brief they got  patient for rehearing filed and they got a rehearing on the issue it's a little have to say that this particular delegate would not have proper notice i think that this was going to be an issue in the case and given the holding in mississippi and given the fact that uses the term value and traditionally when the commission of term instead value they look at original cost lest appreciation and the same the very next session the lead legislature used the term value again that's and secondly it also ignored the imperial evidence presented by i see that demonstrated that there was no such evidence president in the enron case because i was in it for the cometh case it was in  that suggested that this tax was not exclusively a function of kate a ph deliver and the commission allocation method adopted in this case assumes that it is so there's two problems number one they acted on the basis of the misinterpretation of law and number two they ignored the imperial evidence in the record that demonstrated that this cost is not one hundred percent related to look which is what their allocation soon and which is the basis