Court Opinion

ID: 7026192
Source: CourtListenerOpinion
Date Created: 2022-07-24 05:08:35.240088+00
Date Added: 2024-06-11T16:10:45.008059
License: Public Domain

JUSTICE BARRY concurring in part and dissenting in part: I subscribe fully to my colleagues’ disposition of issues I through IV in this appeal. I do not, however, concur in their apparent approval of the Commission’s ultimate decision to pass along to CILCO’s ratepayers all or part of the costs of cleaning up the utility’s 50-year-old coal tar deposits (issue V). In its original order of January 16, 1991, the Commission stated: “The Commission has carefully reviewed the evidence and arguments presented by all parties. While noting that the issue has been well analyzed by CILCO in its testimony and briefs, the Commission is of the opinion that the recommendation of Staff should be adopted. Given the nature and statewide scope of the issue, a determination of the proper ratemaking treatment relative to the recovery of cleanup costs can best be addressed in a generic proceeding, provided that these expenditures are accounted for in a manner that would allow CILCO to preserve the opportunity to recover such costs, including carrying costs, if and to the extent the Commission decides that such recovery is appropriate. Under Staff’s proposal, these costs would be accounted for in such a manner. The Commission also agrees with Staff that the carrying charge should be set at the after tax cost of capital. The Commission would add that Staff’s proposal for a generic proceeding is especially appropriate where, as in the instant case, the Company is seeking approval to recover costs through a PGA type mechanism which would continually pass through costs to ratepayers without the scrutiny of a rate proceeding. The Commission concludes that CILCO’s proposal to implement Rider TAR should not be approved at this time.” Subsequently, the Commission granted CILCO’s application for rehearing and entered its final order on August 2, 1991, approving Rider TAR. In the order the Commission finds that the coal tar cleanup costs are “current and legitimate business expenses reasonably incurred” and that they are not “extraordinary by their nature or sufficiently different to require a deviation from the general rule that [such] expenses reasonably incurred are subject to recovery from ratepayers.” Three of the commissioners dissented. Having carefully reviewed the record on appeal, I would reverse the Commission’s order on rehearing granting CILCO’s request to recover its coal tar cleanup expenses from the ratepayers. The Commission is an administrative agency governed by the Public Utilities Act (111. Rev. Stat. 1989, ch. lll2/3, par. 1 — 101 et seq.) and the Illinois Administrative Procedure Act (111. Rev. Stat. 1989, ch. 127, par. 1001 et seq.). Its rate-setting authority is limited to powers granted by the legislature in the Public Utilities Act. (People ex rel. Hartigan v. Illinois Commerce Comm’n, 148 Ill. 2d at 366, 592 N.E.2d at 1074.) It is the declared policy of this State to provide “environmentally safe and least-cost public utility services *** which are equitable to all citizens.” Goals of regulation include ensuring environmental quality and equitable treatment of consumers and investors. With respect to the latter, this State’s objective is to allocate the cost of supplying public utility services “to those who cause the costs to be incurred.” (Ill. Rev. Stat. 1989, ch. lll2/3, par. 1 — 102(d)(iii).) In presenting its rate case before the Commission, a regulated utility “has the burden of proving that any operating expense for which it seeks reimbursement directly benefits the ratepayers or the services which the utility renders.” (Candlewick Lake Utilities Co. v. Illinois Commerce Comm’n (1983), 122 Ill. App. 3d 219, 227, 460 N.E.2d 1190, 1196, citing Illinois Bell Telephone Co. v. Illinois Commerce Comm’n (1973), 55 Ill. 2d 461, 303 N.E.2d 364.) The Commission’s interpretations of law, unlike determinations of fact, are not binding on a reviewing court. Hartigan, 148 Ill. 2d at 367, 592 N.E.2d at 1074. By my view, the Commission erred in its determination as a matter of law that the coal tar cleanup costs are recoverable from current ratepayers. Contrary to the Commission’s finding, the coal tar cleanup costs here at issue are an “extraordinary” expense. The cause of the expense is the utility’s decision to dispose of hazardous waste deposited on the sites of manufactured gas plants more than 50 years ago. This is not a case of installing environmental controls for the current operation of the utility. Were such the case, the Public Utilities Act clearly authorizes the recovery of prudently and reasonably incurred costs. See Ill. Rev. Stat. 1989, ch. lll2/3, par. 1 — 102(b)(ii). Nor does the mere fact that the utility failed to recognize the environmental impact of its practice until some 40 to 50 years later and is now mandated by Federal and State law to clean up the sites convert the cleanup costs into current business expenses which inure to the benefit of current ratepayers. If anything, the costs expended to clean up coal tar deposits inure primarily to the benefit of the utility’s property owners — i.e., the shareholders — and secondarily to the general citizenry of this State. The cleanup is unrelated to the providing of current utility service. Therefore, evidence that the utility’s past practices of disposing of the waste were deemed reasonable 50 years ago or that the manufactured gas plants were decommissioned in a reasonable and prudent manner cannot be used to justify the utility’s theory that current ratepayers should bear the burden of paying for the cleanup. In my opinion the Public Utilities Act provides no authority for the utility’s recovery of “extraordinary” expenses neither related to supplying current services nor caused by current consumers of the utility’s services. I would hold that the Commission exceeded its statutory authority in approving CILCO’s request to charge its consumers for any of the utility’s coal tar cleanup costs. SUPPLEMENTAL OPINION ON DENIAL OF REHEARING JUSTICE STOUDER delivered the opinion of the court: On January 22, 1993, this court filed an opinion (Justice Barry, dissenting) in this case affirming the Commission’s order of January 16, 1991. However, we reversed and remanded the Commission’s August 2, 1991, order on rehearing before the Commission which dealt solely with the proper ratemaking treatment of coal tar remediation costs.  Previously, while this case was under advisement, this court became aware of the Commission’s September 30, 1992, decision in what was termed the “generic coal tar case.” (Illinois Commerce Commission on its Own Motion — Investigation Concerning Issues Related to Coal Tar Cleanup Expenditures (September 30, 1992), Nos. 91 — 0080 through 91 — 0095.) Also while this case was under advisement, the parties to the generic case filed appeals from the September 30 generic order. (The Hlinois Supreme Court subsequently ordered the appeals consolidated in this district.) Noting the conflict between the Commission’s decision in the instant case and the Commission’s decision in the generic case, we initially ordered the cause remanded to clear up the conflict. CILCO filed a petition for rehearing which, inter alia, challenged this court’s remandment of the coal tar issue. We have now addressed the coal tar issue on the merits in the generic case, finding the Commission had the authority to work a “sharing” of coal tar remediation costs between ratepayers and utility shareholders. (Central Illinois Light Co. v. Illinois Commerce Comm’n (3d Dist. December 29, 1993), No. 3—92—0864 (Justice Barry, dissenting).) Having approved the Commission’s action in the generic case, we believe the cause in the instant case should now be remanded, and direct the Commission to reconsider the facts and enter an order consistent with the generic order. Therefore, as modified we affirm the Commission’s order of January 16, 1991; reverse the Commission’s order on rehearing dated August 2, 1991, and remand the cause, with directions, to the Commission for further proceedings in light of our decision in case No. 3 — 92—0864; otherwise, CILCO’s petition for rehearing in the instant case is denied. Affirmed in part; reversed in part and remanded with directions; petition for rehearing denied. SLATER, J., concurs.