An Illinois Appellate Court has reversed a ruling by the Illinois Commerce Commission (ICC) that had allowed Commonwealth Edison Co. to enter negotiated rate contracts with up to 25 large general-service customers to retain existing load. The ICC had ruled that the antibypass tariff would not conflict with state laws requiring filing and publication of utility rates, because it must contain a description of the pricing and service parameters used in negotiating the individual contracts. Re Commonwealth Edison Co., 153 PUR4th 151 (Ill.C.C.).
The Appellate Court (First District, Fifth Division) found that the ICC erred in allowing the utility to file a tariff that contained no specific rates, but instead referred to charges contained in contracts to be negotiated with eligible customers. Despite increasing changes in the public utility industries had made regulation more complicated, the court reaffirmed that the regulatory compact required strict compliance with state laws governing utility rates and operations, including the filing and publication of rates: "otherwise the regulatory world is turned on its head, as in this case, where the regulated has in effect become the regulator."
Since the contracts did not yet exist at the time the tariff was filed, no rates were on file and the arrangement violated Illinois filing and publication requirements. The court added that "stripped of its technical jargon," the tariff provision did nothing more than limit the utility's otherwise unfettered right to charge any rate it desired as long as the rate is below marginal cost. While rate tariffs relying on mathematical formulas may sometimes satisfy statutory requirements, the court ruled, the ICC may not permit a utility to set its own rates subject only to the condition that the charges contribute to fixed costs. The court also said the ICC's tariff ruling violated the state's notice and publication requirements by allowing the utility to keep confidential the actual charges negotiated under each contract. Citizens Utility Board v. Illinois Commerce Commission, Nos. 1-94-2714, 1-94-2828, Oct. 5, 1995 (Ill.App.Ct.).
Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.