Court Opinion

ID: 9740034
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:26:18.685023+00
Date Added: 2024-06-11T07:24:15.655818
License: Public Domain

JUSTICE LUND, dissenting upon denial of rehearing: This dissent follows United Cities’ petition for rehearing. My apologies to the esteemed members of this panel who continue to participate in the majority opinion. I do not intend to repeat the history of the proceedings as set forth so well in the majority opinion. I do not apologize to counsel for my belated dissent. As appellate judges, we are compelled to consider various subject matter in both criminal and civil cases. Utility law is a very specialized field, and we find ourselves relying upon the experts in that field who practice before us. It appears to me that, in rate regulation cases, the art of simplicity is nonexistent. With this preface, I warn the readers of this dissent that I wrote this as simply as I could, in hopes that even I can understand what this case is about. As a result, some of the terminology is mine. We are concerned with allocation of “demand costs” between Illinois and Tennessee gas customers of United Cities. “Demand costs,” for purpose of this dissent, are costs incurred by United Cities over and above the normal unit of gas cost purchased by utilities. In the present case, the “demand costs” were divided between Illinois customers and Tennessee customers, based upon an earlier pro rata use history. The pro rata expense allocation of demand costs was used in prior Illinois and Tennessee Commissions rate determinations. The present dispute arises as a result of a 1991 Commission determination that the Harrisburg, Illinois, “demand cost” allocations for 1988 and subsequent years must be based upon up-to-date actual use by Illinois and Tennessee customers. The current actual use evidence indicates that, since the original allocation compilation, Tennessee users’ percentage of total use has increased. Problems arise because both Tennessee and Illinois utility regulators, separately, determine the rate United Cities can charge, and Illinois cannot require Tennessee to allow retroactive recovery for United Cities. The Commission has provided for a retroactive allocation of “demand cost,” providing for a smaller percentage of the “demand cost” expense be paid by the Illinois customers. Without concurrent action by the Tennessee regulatory commission reflecting retroactive charges (surcharges) to Tennessee customers, United Cities will not recover all of the “demand cost” expense. There is a strong temptation to say United Cities was in the best position to know of any unfair allocation costs and should stand the loss. United Cities was doing the customer billing for actual use and, in today’s computer-oriented world, the use by Tennessee customers and" Harrisburg, Illinois, customers should be easily ascertainable. Perhaps the monkey should be on United Cities’ back for not petitioning earlier for allocation adjustments before both regulatory commissions. This position sounds simple but, for reasons I will not discuss here, it is not. After further consideration of this case, I conclude the Commission indulged in retroactive rate adjustment. The 1988 United Cities rates included an allocation of 42% of the “demand cost” to the Harrisburg customers. The rate billed was consistent with orders of the Commission. The Commission is now ordering United Cities to refund, based upon an allocation of 28% of the “demand costs” to Illinois users. Once established, a rate is effective unless stayed pending review, and refunds are not allowed because the rate is too high, nor are surcharges allowed because the rate is too low. This rule introduces stability. Citizens Utilities Co. v. Illinois Commerce Comm’n (1988), 124 Ill. 2d 195, 207, 529 N.E.2d 510, 515-16. If the rule set forth in Citizens has been adopted in Tennessee, odds are that the loss to United Cities resulting from the Commission order will not be offset by surcharges in Tennessee. As a result of my conclusion of retroactive rate making, I now dissent from the majority opinion.