Illinois appellate court has upheld a decision by the Illinois Commerce
Commission defining the terms that govern how ComEd can tweak its power rates.
11 ruling was penned by Justice Margaret McBride, of the Illinois First
District Appellate Court in Chicago, with concurrence from justices Cynthia
Cobbs and Nathaniel Howse Jr.
ComEd proposed a change in the definition of the "formula rate
structure." The definition determines which changes to the company's rate
structure are made in annual rate update proceedings before the ICC and which
are made in separate proceedings. The utility giant said the redefinition would
bring "specificity, standardization, and transparency" to the formula
rate process and would make the formula "more readily understood."
definition change would allow the company to include more factors in
calculating how much revenue it required. The ICC must approve ComEd's rates.
held a hearing at which the definition was hashed out. The ICC arrived at a
definition that did not increase the number of factors as desired by ComEd. The
company's request for a rehearing was denied in January 2015, prompting the
utility to appeal.
Justice McBride saw the issue as revolving around the question
of whether or not the state statute covering the formula rate is ambiguous,
because if it is ambiguous the appellate court bows to the ICC's
interpretation. ComEd argued the statute was in “plain language” and thus
subject to examination by the appellate court.
McBride disagreed with ComEd, finding the statute ambiguous and fair game for
of its expertise and experience in the complex field of utility regulation, we
accord deference to decisions of the Commission. We will not substitute our own
construction of an ambiguous statute for a reasonable interpretation adopted by
the agency charged with its administration,” McBride wrote. “We give
substantial weight and deference to the Commission’s interpretation. The
Commission has the authority to interpret the ambiguous term ‘formula rate
was also persuaded by the Commission’s contention ComEd’s proposed redefinition
would delay implementation of rate adjustments favoring consumers, with the
Commission estimating that under the proposal, almost two years could elapse
before an adjustment was reflected in rates. ComEd countered that the ICC was
engaging in speculation, but McBride concluded it was right for the Commission
to consider the “natural and probable consequences of the interpretation of the
was further swayed by the fact the Commission’s definition of “formula rate
structure” was consistent with its recent and similar decision involving
another power company, Ameren.
ComEd was represented by Chicago lawyer John Ratnaswamy. The ICC
was represented by its own attorneys, designated as Special Attorneys General for the proceedings.