The Appellate Court of Illinois (First District) has ruled that the Illinois Commerce Commission (ICC) failed to properly consider the effect on consumers when it approved a rate restructuring plan for Central Telephone Co. of Illinois, a telecommunications local exchange carrier (LEC). An ICC order from a base-rate proceeding had permitted the LEC to eliminate most of its flat-rate calling plans and replace them with usage-sensitive service offerings. The order also permitted a general shift of costs away from business users and onto the residential customer class.
While the restructuring would decrease rates for some customers, others would experience double or triple their monthly bills if their calling patterns remained constant. The court found insufficient rationale in the ICC's contention that the LEC's existing rate design was "fraught with complexity, cross-subsidies, inequities and inefficiencies" and that the restructuring eliminated most of the deficiencies.
Citing a lack of evidence concerning the impact of the rates on consumers, the court ruled that the ICC had failed in its duty to balance the interest of shareholders and ratepayers when setting rates. Citizens Utility Board v. Illinois Commerce Commission, Nos. 1-94-2270, 1-94-2370, Nov. 9, 1995 (Ill.App.Ct.).
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