Court Opinion

ID: 9525558
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:04:55.468316+00
Date Added: 2024-06-11T13:15:35.395273
License: Public Domain

JUSTICE BARRY dissenting: I respectfully dissent from my colleagues’ resolution of the coal tar issues. As I earlier stated in my dissent in Central Illinois Light Co. v. Illinois Commerce Comm’n (1993), 252 Ill. App. 3d 577 (CILCO I), I believe that the Commission lacks authority to pass on to the utility’s ratepayers charges for remediating past practices that bear no relation to providing services to current customers. As I see it, the remediation expenses here at issue are even less appropriate charges to the ratepayers than the legal expenses incurred by the utility in Candlewick Lake Utilities Co. v. Illinois Commerce Comm’n (1983), 122 Ill. App. 3d 219, 460 N.E.2d 1190, or the lobbying expenses which the utility sought to recover from ratepayers in Illinois Bell Telephone Co. v. Illinois Commerce Comm’n (1973), 55 Ill. 2d 461, 303 N.E.2d 364. I am not swayed by the fact that the expenses here involved may be substantial, far more so than those which were at issue in Candlewick Lake and Illinois Bell. In fact, I am particularly disturbed by the fact that the cost of cleaning up the sites remains unknown. The majority’s approval of the utilities’ recovery of an uncalculable cost from ratepayers, whether “shared” or not with the utilities’ shareholders, as a “policy compromise” or “pragmatic adjustment,” violates the legislative mandate. The Commission majority in this case expressly noted that there was no legal justification for holding ratepayers responsible for coal tar cleanup costs. Nonetheless, the Commission chose to relieve the utility’s investors from bearing the full burden of remediation costs and to “share” part of the costs with ratepayers based on its purported authority to fashion “equitable regulatory policies,” pursuant to section 1 — 102 of the Public Utilities Act. My review of section 1— 102, however, discloses no such broad policy-making authority. The legislature specifically declared that “the health, welfare and prosperity of all Illinois citizens require the provision of environmentally safe and least-cost public utility services at prices which accurately reflect the long-term cost of such services and which are equitable to all citizens.” (Ill. Rev. Stat. 1991, ch. 1112/s, par. 1 — 102.) To that end, the legislature granted authority to the Commission to regulate utilities to ensure efficiency, environmental quality, reliability and equity in the provision of services and the rates charged. The legislature explicitly stated, however, that “the cost of supplying public utility services is [to be] allocated to those who cause the costs to be incurred.” (Ill. Rev. Stat. 1991, ch. 1112/3, par. 1 — 102(d)(iii).) Further, it is the burden of the utility seeking rate increases to prove 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, 122 Ill. App. 3d at 227, 460 N.E.2d at 1196 (citing Illinois Bell Telephone Co. v. Illinois Commerce Comm’n, 55 Ill. 2d at 482-83). In Governor’s Office of Consumer Services v. Illinois Commerce Comm’n (1991), 220 Ill. App. 3d 68, 72, 580 N.E.2d 920, 923, we acknowledged that the expression “long-term cost” was not defined in the statute and that the Attorney General had not provided or recommended a definition for the purpose of selecting an appropriate marginal cost study for redesigning Illinois Power Company’s electric service rates. In Governor’s Office, Illinois Power provided an equal percentage of marginal cost study (EPMC) based on the utility’s five-year projection of the cost of energy to its system. The Attorney General proposed that its own study, based on a 10-year projection of costs, including consideration of the effects of the utility’s excess capacity, would result in fairer treatment for residential customers. The Attorney General argued that the utility’s EPMC study was improperly based on “short-term” considerations in violation of the statute. Having considered the parties’ arguments, we found that either the utility’s five-year estimate or the Attorney General’s 10-year projection of costs could qualify as “long-term,” and we deferred to the Commission’s discretion in adopting the EPMC approach as proposed by the utility. Obviously, the issue posed by Governor’s Office concerned the projection of future costs of providing services. And, I have no doubt but that the legislature contemplated that its expression of “long-term costs” would generally apply to estimations of costs relating to services to be provided to customers over a reasonable period in the future. However, the legislatively granted authority to adjust utility rates reflecting the “long-term” cost of services does not, by my view, empower the Commission to pass on to customers estimated or unknown future costs to remediate management decisions (as in most instances here) rendered by the utilities in the distant past. In my opinion, the statute could hardly be clearer in requiring that costs reflected in utility rates may not be unrelated to services provided to current ratepayers. The remediation costs here at issue are for cleaning up sites decommissioned some 40 or 50 years ago. The Commission, moreover, acknowledged in its order that the coal tar cleanup expenses “have no link to the provision of current utility service to ratepayers.” Thus, the Commission’s self-appointed policy-making authority notwithstanding, I remain convinced that the Commission’s “sharing” decision violated its statutory authority and that no part of the coal tar cleanup costs may be charged to ratepayers. The mere fact that the remediation costs are current expenses of the utilities does not, in my opinion, require a hybrid characterization of the expenses or novel treatment for ratemaking purposes. Inasmuch as the remediation costs relate solely to past management practices in most instances and the provision of utility services to past customers, I would find that they may not be recovered in whole or in part without violating regulatory principles prohibiting retroactive and single-issue ratemaking. See Business & Professional People for the Public Interest v. Illinois Commerce Comm’n (1991), 146 Ill. 2d 175, 243, 585 N.E.2d 1032, 1061, citing Business & Professional People for the Public Interest v. Illinois Commerce Comm’n (1989), 136 Ill. 2d 192, 209, 555 N.E.2d 693. Unless and until the legislature says otherwise, I find no authority for the Commission’s approval of remediation costs in the rider tariff. I would hold that the Commission’s approval of any part of the remediation costs in the coal tar rider was unauthorized and an abuse of the Commission’s discretion as a matter of law.