Commonwealth Edison Co. v. Ill. Commerce Comm'n

Decision Date22 July 2014
Docket Number1–13–1063,Nos. 1–12–0544,1–13–1120.,1–13–0544,1–13–0653,1–13–0632,s. 1–12–0544
Citation16 N.E.3d 228
PartiesCOMMONWEALTH EDISON COMPANY, Petitioner, v. ILLINOIS COMMERCE COMMISSION ; Ameren Illinois Company; C3, Inc.; Colation of Energy Suppliers (Interstate Gas Supply, Inc.; MidAmerican Energy Company; and North American Power and Gas, LLC ); Constellation NewEnergy, Inc.; Environmental Law and Policy Center; Exelon Generation Company, LLC; FutureGen Industrial Alliance, Inc.; Illinois Coalition to Advance Renewable Energy (ACCIONA Energy North America Corporation; EDP Renewables North America LLC ; Iberdrola Renewables, LLC ; Invenergy LLC; and NextEra Energy Resources, LLC); Illinois Competitive Energy Association (Ameren Energy Marketing Company; Champion Energy, LLC ; Constellation NewEnergy, Inc.; Direct Energy Services, LLC; Exelon Energy Company; Integrys Energy Services, Inc.; MC Squared Energy Services, LLC; FirstEnergy Solutions Corporation; Nordic Energy Services, LLC; and Reliant); Illinois Industrial Energy Consumers; Illinois Power Agency; National Resources Defense Council; Retail Energy Supply Association (Champion Energy Services, LLC ; ConEdison Solutions; Constellation NewEnergy, Inc.; Direct Energy Services, LLC; Energetix, Inc.; Energy Plus Holdings, LLC; Exelon Energy Company; GDF Suez Energy Resources NA, Inc. ; Green Mountain Energy Company; Hess Corporation; Integrys Energy Services, Inc.; Just Energy; Liberty Power ; MC Squared Energy Services, LLC; Mint Energy LLC; NextEra Energy Services; Noble American Energy Solutions LLC; PPL EnergyPlus, LLC ; Reliant; Stream Energy; TransCanada Power Marketing Ltd.; and TriEagle Energy, L.P. ); Wind on the Wires, Respondents.
CourtUnited States Appellate Court of Illinois

Rooney Rippie & Ratnaswamy LLP (E. Glenn Rippie, of counsel), and Jenner & Block LLP (Barry Levenstam and Irina Dmitrieva, of counsel), both of Chicago, and Jenner & Block LLP, of Washington, D.C. (David W. Debruin and Matthew E. Price, of counsel), for petitioner.

Shefsky & Froelich Ltd., (John F. Kennedy, Jonathan B. Amarillo, Barton J. O'Brien, Rachel L. Schaller, and Cary E. Donham, of counsel), Illinois Commerce Commission, Office of General Counsel (John P. Kelliher and Thomas R. Stanton, of counsel), Quarles & Brady LLP (Christopher J. Townsend, Christopher N. Skey, and Adam T. Margolin, of counsel), Law Offices of Gerald T. Fox (Gerald T. Fox, of counsel), Husch Blackwell LLP (Douglas F. McMeyer, of counsel), Lisa Madigan, Attorney General (Clifford W. Berlow, Assistant Attorney General, of counsel), and Citizens Utility Board (Julie Soderman and Orijit Ghoshal, of counsel), all of Chicago, Lueders Robertson and Konzen LLC, of Granite City (Eric Robertson, Ryan Robertson, and Drew Rankin, of counsel), and Husch Blackwell LLP, of St. Louis, Missouri (Kyle C. Barry and JoAnn T. Sandifer, of counsel), for respondents.

OPINION

Presiding Justice HARRIS

delivered the judgment of the court, with opinion.

¶ 1 Petitioner Commonwealth Edison Company (ComEd), Illinois Competitive Energy Association (ICEA), and Illinois Industrial Energy Consumers (IIEC) appeal the order of the Illinois Commerce Commission (Commission) that requires ComEd to enter into a sourcing agreement to procure electricity for the retail customers of alternative retail electric suppliers (ARES) and recoup the costs through a “competitively neutral” charge. On appeal, appellants contend that the Commission violated section 16–111.5 of the Public Utilities Act (220 ILCS 5/16–111.5 (West 2012)

) when it ordered ComEd to enter into a sourcing agreement to procure electricity for customers other than its own “eligible retail customers” and rendered its decision without substantial support from the record.

¶ 2 JURISDICTION

¶ 3 The Commission issued its final order on December 19, 2012. ComEd filed a timely application for rehearing on January 22, 2013, and a joint motion for clarification of the final order. On January 29, 2013, the Commission denied the application for rehearing but granted the motion for clarification and, on the same day, issued an amendatory order. On February 22, 2013, ComEd filed a notice of appeal. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rule 335(a)

governing direct review of administrative orders by the appellate court. Ill. S.Ct. R. 335(a) (eff. Feb. 1, 1994).

¶ 4 BACKGROUND

¶ 5 Under the Public Utilities Act, article XVI (titled Electric Service Customer Choice and Rate Relief Law of 1997) (Rate Relief Law) sought to restructure the electricity industry in order to create competition and introduce customer choice in the supply of electricity. 220 ILCS 5/16–101A(b)

(West 2012). Prior to the passage of this article, electric utilities like ComEd both sold electricity to customers and delivered that electricity through its distribution network. Article XVI separated the two components so that ARES could now compete with one another to sell electricity to consumers. 220 ILCS 5/16–115 (West 2012)

. Before an ARES can serve any retail customer, it must first obtain a certificate of service authority from the Commission in accordance with section 16–115. As part of its certification, subsection (d)(5) requires an ARES applicant to source some electricity from clean coal facilities, and further provides that “the required sourcing of electricity generated by clean coal facilities, other than the initial clean coal facility,1 shall be limited to the amount of electricity that can be procured or sourced at a price at or below the benchmarks * * * in accordance with item (1) of subsection (c) and items (1) and (5) of subsection (d) of Section 1–75 of the Illinois Power Agency Act.” 220 ILCS 5/16–115(d)(5)(iii) (West 2012). ComEd, however, remains responsible for delivering electricity to ARES customers over its distribution network. 220 ILCS 5/16–108 (West 2012).

¶ 6 Article XVI also requires ComEd to continue supplying electricity to residential and small commercial customers within their service territory who have not chosen an ARES and who purchase power from the utility “under fixed-price bundled service tariffs.” 220 ILCS 5/16–111.5(a)

(West 2012). The statute refers to these customers as “eligible retail customers.” Id. To guide ComEd's procurement of electricity, the General Assembly passed the Illinois Power Agency Act (20 ILCS 3855/1–5(1) (West 2012)), which created the Illinois Power Agency (IPA). The IPA has the powers and duties enumerated in the Illinois Power Agency Act. 20 ILCS 3855/1–15(a) (West 2012).

¶ 7 The goal of the Illinois Power Agency Act is to protect [t]he health, welfare, and prosperity of all Illinois citizens” in the “provision of adequate, reliable, affordable, efficient, and environmentally sustainable electric services at the lowest total cost over time.” 20 ILCS 3855/1–5(1)

(West 2012). To accomplish this goal, the General Assembly declared it “necessary to improve the process of procuring electricity to serve Illinois residents, to promote investment in energy efficiency * * *, and to support development of clean coal technologies and renewable resources.” 20 ILCS 3855/1–5(4) (West 2012). The legislature established that by January 1, 2025, “25% of the electricity used in the State shall be generated by cost-effective clean coal facilities.” 20 ILCS 3855/1–75(d)(1) (West 2012). It also determined that [p]rocuring a diverse electricity supply portfolio will ensure the lowest total cost over time for adequate, reliable, efficient, and environmentally sustainable electric service.” 20 ILCS 3855/1–5(5) (West 2012).

¶ 8 Pursuant to the Illinois Power Agency Act, the Illinois Power Agency is tasked with procuring electricity for ComEd and Ameren Illinois Company (Ameren).2 To this end, the Illinois Power Agency develops annual electricity procurement plans for the utilities and submits the plans for final approval by the Commission. 220 ILCS 5/16–111.5(b)

(West 2012) ([a] procurement plan shall be prepared for each electric utility consistent with the applicable requirements of the Illinois Power Agency Act). Relevant to this appeal, the clean coal portfolio standard contained in the Illinois Power Agency Act states that the IPA's “procurement plans shall include electricity generated using clean coal.” 20 ILCS 3855/1–75(d)

(West 2012).

¶ 9 On September 28, 2013, the Illinois Power Agency filed a proposed procurement plan with the Commission. The plan required ComEd and ARES to enter into sourcing agreements with FutureGen 2.0, a project of the FutureGen Industrial Alliance, Inc. (FutureGen Alliance). The FutureGen Alliance is a nonprofit corporation “formed to create the world's first coal-fueled, near-zero emissions electric power plant.” The FutureGen 2.0 project consists of the retrofitting of Ameren's facility in Meredosia, Illinois, to utilize clean-coal technology. The Illinois Power Agency determined that the utilities and ARES should purchase the facility's output in an amount consistent with their proportional share, or in a “competitively neutral” manner.

¶ 10 The Commission found that, pursuant to section 1–75(d)(5) of the Illinois Power Agency Act, it had the authority to compel both the utilities and ARES to enter into sourcing agreements with retrofitted clean coal facilities approved by the Commission. However, Commission staff expressed concern that, given the number of ARES involved (approximately 70), requiring each ARES to enter into a sourcing agreement with FutureGen 2.0 would present an administrative burden.3 The staff suggested an alternate approach whereby FutureGen 2.0 would contract only with ComEd and Ameren, and each utility would purchase FutureGen 2.0 power for its own eligible retail customers as well as the retail customers of ARES. The utilities would then recover the additional costs through a competitively neutral charge assessed to ARES' customers for their share of the output.

¶ 11 On December 19, 2012, the...

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3 cases
  • Commonwealth Edison Co. v. Ill. Commerce Comm'n
    • United States
    • Illinois Supreme Court
    • May 19, 2016
    ...force ARES to enter into sourcing agreements. On appeal, the appellate court affirmed the order of the Commission. 2014 IL App (1st) 130544, 384 Ill.Dec. 132, 16 N.E.3d 228. This court allowed the petition for leave to appeal of the Illinois Competitive Energy Association and Illinois Indus......
  • McGrath v. City of Kankakee, 3–14–0523.
    • United States
    • United States Appellate Court of Illinois
    • May 16, 2016
    ...for the majority to address the issue. See Commonwealth Edison Co. v. Illinois Commerce Comm'n, 2014 IL App (1st) 130544, ¶ 35, 384 Ill.Dec. 132, 16 N.E.3d 228 (discussing standing requirements and noting, inter alia, that “[g]enerally, courts will not consider a constitutional challenge to......
  • Wells Fargo Bank N.A. v. Bednarz
    • United States
    • United States Appellate Court of Illinois
    • May 6, 2016
    ...351, 975 N.E.2d 153 ; see also Commonwealth Edison Co. v. Illinois Commerce Comm'n, 2014 IL App (1st) 130544, ¶¶ 34, 36, 384 Ill.Dec. 132, 16 N.E.3d 228. Because the defendant failed to allege that he had sustained, or was in immediate danger of sustaining, a direct injury as the result of ......

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