Articles Posted in Utilities Law

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Zahn is a residential consumer, decided to purchase electricity from North American Power & Gas (NAPG), an alternative retail electric supplier (ARES) under the Electric Service Customer Choice and Rate Relief Law , 220 ILCS 5/16-102. NAPG sent Zahn a letter stating that she would receive its “New Customer Rate” of $0.0499 per kilowatt-hour during her first month of service and a “market based variable rate” thereafter. NAPG's “Customer Disclosure Statement” indicated a month-to-month term and that “[o]ther than fixed and/or introductory/promotional rates, all rates shall be calculated in response to market pricing, transportation, profit and other market price factors” and that its prices were “variable” based on “market prices for commodity, transportation, balancing fees, storage charges, [NAPG] fees, profit, [and] line losses ... may be higher or lower than your [local public utility].” Zahn never received the $0.0499 per kilowatt-hour rate. During her first two months of service, NAPG charged her $0.0599 per kilowatt-hour. Thereafter, the rate it charged her was always higher than what she would have paid her local public utility. Zahn filed a class action, alleging Consumer Fraud and Deceptive Business Practices Act violations (815 ILCS 505/1), breach of contract, and unjust enrichment. Zahn appealed dismissal of the case to the Seventh Circuit, which certified a question of Illinois law: Does the Illinois Commerce Commission (ICC) have exclusive jurisdiction over a reparation claim, as defined in precedent in Sheffler v. Commonwealth Edison, brought by a residential consumer against an ARES? The Illinois Supreme Court responded that the ICC does not have exclusive original jurisdiction over such claims. The claims may be pursued through the courts. View "Zahn v. North American Power & Gas, LLC" on Justia Law

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FutureGen was created to research and develop near-zero emissions coal technology and sought to use carbon capture and storage to develop the world’s first near-zero emissions coal power plant. The proposed retrofitted “clean coal” electric energy generating facility, known as “FutureGen 2.0,” was to be located in Meredosia, Illinois, and scheduled to begin operating in 2017. To secure private investment for FutureGen 2.0, the Illinois Commerce Commission issued an order finding that it has the authority to force public utility companies and smaller, privately owned and competitively operated Area Retail Electric Suppliers (ARES) to purchase all of FutureGen 2.0’s electrical output over a 20-year term. The appellate court affirmed the order. In 2015, while appeal was pending, the U.S. Department of Energy suspended funding for the FutureGen 2.0 project. The FutureGen Alliance board of directors approved a resolution in January 2016 ceasing all FutureGen 2.0 project development efforts and indicated its intention to terminate the sourcing agreements. The Illinois Supreme Court dismissed the appeal as moot, vacating the decision of the appellate court. View "Commonwealth Edison Co. v. Ill. Commerce Comm'n" on Justia Law

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Peoples Gas and North Shore Gas sell and deliver natural gas to millions of residential and commercial Chicago area customers through their lines. Their operating costs include the costs of the gas itself and the costs of distribution. The Illinois Commerce Commission approved a volume-balancing-adjustment rider, or Rider VBA, which imposed so-called “revenue decoupling” on the companies’ customers. Rider VBA prevents under-recovery and over-recovery of fixed distribution costs by “decoupling” the revenue for those costs from the volume of gas delivered. If actual revenues dip below a level set by the Commission due to decreased delivery volume, the company issues customers a surcharge for the difference. If revenues tick above that level due to increased volume, the company issues customers a credit. In 2012, the Commission approved the rider on a permanent basis. The Attorney General and the Citizens Utility Board challenged that decision. The appellate court and Illinois Supreme Court affirmed, rejecting arguments that Rider VBA departed from “principles of rate-of-return regulation,” that a just and reasonable rate under the Act provides only an opportunity for, and not a guarantee of, a profit; that Rider VBA constituted impermissible single-issue rate-making; and that Rider VBA constitutes impermissible retroactive rate-making. View "People v. Ill. Commerce Comm'n" on Justia Law

Posted in: Utilities Law

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In 2009, IAWC petitioned the Illinois Commerce Commission under the Public Utilities Act (220 ILCS 5/1-101) for approval of its annual reconciliation of purchased water and purchased sewage treatment surcharges. The state was granted leave to intervene. In 2012, the Commission approved the reconciliation with modifications and denied the state’s request for rehearing. Under the Public Utilities Act, the state had 35 days to appeal, placing the deadline for filing the notice of appeal at October 16. Notice of appeal was filed on that date. The record and briefs were filed. The appellate court entered a summary order, dismissing the appeal for lack of jurisdiction on grounds that the notice had not been timely filed, reasoning that under Supreme Court Rule 335(i)(1), the notice should have been filed within the 30-day deadline specified in Rule 303(a). The Illinois Supreme Court reversed; the appellate court erred in concluding that separation of powers principles required the timeliness of the notice to be judged by Supreme Court Rule 303(a) rather than the period specified by the legislature in the Public Utilities Act. View "Madigan v. IL Commerce Comm'n" on Justia Law

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Pusateri, a former employee of Peoples Gas Light and Coke Company (PG) filed a complaint under the False Claims Act, 740 ILCS 175/1, alleging that PG used falsified gas leak response records to justify a fraudulently inflated natural gas rate before the Illinois Commerce Commission. As a customer, the State of Illinois would have paid such fraudulently inflated rates,. The Cook County circuit court dismissed with prejudice, finding that as a matter of law, there was no causal connection between the allegedly false reports and the Commission-approved rates. The appellate court reversed, construing the complaint’s allegations liberally to find PG could have submitted the safety reports in support of a request for a rate increase, despite not being required to do so under the Administrative Code. The Illinois Supreme Court reinstated the dismissal, reasoning that the court lacked jurisdiction to order relief. The legislature did not intend the False Claims Act to apply to a Commission-set rate. The Commission has the duty to ensure regulated utilities obey the Public Utilities Act and other statutes, except where enforcement duties are “specifically vested in some other officer or tribunal.” View "Pusateri v. Peoples Gas Light & Coke Co." on Justia Law

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The Village of Bement, Piatt County, has a five-year contract, under which E.R.H. Enterprises operates and maintains the Village’s potable water facility and parts of its water delivery infrastructure. The Department of Labor issued a subpoena to E.R.H.’s attorney seeing employment records as part of an investigation under the Prevailing Wage Act, 820 ILCS 130/0.01. E.R.H. asserted that it was exempt from the Act as a public utility. The trial court ruled in favor of the Department and ordered E.R.H. to provide the requested documents, noting that the company was not regulated by the Illinois Commerce Commission. The appellate court reversed. The Illinois Supreme Court reversed the appellate court, finding that E.R.H. is simply an outside contractor. View "People v. IL Dep't of Labor" on Justia Law

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The trial court dismissed a third amended class action complaint filed in connection with power outages during severe storms. The complaint alleged negligence, breach of contract, and violation of the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1). The appellate court and Illinois Supreme Court affirmed. The electric utility's tariff precludes an award of damages; even if such claims were not barred, jurisdiction over matters relating to the utility's service and infrastructure lies with the Illinois Commerce Commission. The Consumer Fraud Act claim alleged that that the company knew or should have known that it failed to sufficiently establish policies and procedures to prevent controllable interruptions of power and to timely respond to those interruptions, in order to protect the health, safety, comfort and convenience of its customers, including those on the life support registry. The claim failed because the company is not required to prioritize those on the life support registry and does not intend that those on the registry rely on it doing so. View "Sheffler v. Commonwealth Edison Co." on Justia Law