Illinois Power Co. v. Illinois Commerce Com'n

• Decision Date: 19 September 1984
• Docket Number: No. 5-84-0036,5-84-0036
• Citation: 82 Ill.Dec. 813,127 Ill.App.3d 937,469 N.E.2d 347
• Parties: , 82 Ill.Dec. 813 ILLINOIS POWER COMPANY, Appellant, v. ILLINOIS COMMERCE COMMISSION, Appellee. MT. CARMEL PUBLIC UTILITY CO., Appellant, v. ILLINOIS COMMERCE COMMISSION, Appellee.
• Court: United States Appellate Court of Illinois

Page 347

469 N.E.2d 347

127 Ill.App.3d 937, 82 Ill.Dec. 813

ILLINOIS POWER COMPANY, Appellant, v. ILLINOIS COMMERCE COMMISSION, Appellee.

MT. CARMEL PUBLIC UTILITY CO., Appellant, v. ILLINOIS COMMERCE COMMISSION, Appellee.

No. 5-84-0036.

Appellate Court of Illinois Fifth District.

Sept. 19, 1984.

Rehearing Denied Oct. 17, 1984.

Albert A. Scriber, Barnhard, Scriber & Koger, Mount Carmel, for appellant Mt. Carmel Public Utility Co.

Schiff, Hardin & Waite, Chicago, for appellant Illinois Power Co.

David J. Rosso, Boyd J. Springer & Michael F. Kerr, Isham, Lincoln & Beale, Chicago, for Central Illinois Public Service Co.

Neil F. Hartigan, Atty. Gen., Hercules F. Bolos, Sp. Asst. Atty. Gen., Chief Counsel, Ill. Commerce Com'n and Kathleen Nolan, Asst. Atty. Gen., Chicago, for Illinois Commerce Com'n.

KARNS, Justice:

This appeal was taken from an order of the circuit court of Wabash County affirming the denial by the Illinois Commerce Commission (Commission) of a proposed merger of Illinois Power Company (Illinois Power) and Mt. Carmel Public Utility Company (Mt. Carmel). (Ill.Rev.Stat.1983, ch. 111 2/3, pars. 72, 73.) The petition, filed on December 7, 1981, sought approval of Illinois Power's proposed acquisition of Mt. Carmel, a small utility company which provided electric energy and natural gas to customers in Wabash and Lawrence Counties. On March 10, 1982, the Commission allowed Central Illinois Public Service Company (CIPS), which also desired to acquire Mt. Carmel, to intervene in opposition to the proposed merger.

On November 23, 1982, the Commission entered its order denying Illinois Power's application concluding, based upon a comparison of acquisition proposals of Illinois Power and CIPS, that the merger of Illinois Power and Mt. Carmel would not be consistent with the public interest. Both Illinois Power and Mt. Carmel appealed the Commission's decision to the circuit court of Wabash County. That court found that the Commission had correctly interpreted section 27 of the Illinois Public Utilities Act (Ill.Rev.Stat.1983, ch. 111 2/3, par. 27) as authorizing it to consider viable alternatives in determining whether a proposed merger serves the public interest and further found that the Commission's determination that the acquisition of Mt. Carmel by Illinois Power would not be consistent with the public interest was not against the manifest weight of the evidence.

Appellants contest the lower court's affirmance of the Commission's decision, asserting three points for review: (1) that the Commission's interpretation of section 27 was legally incorrect; (2) that finding CIPS' acquisition of Mt. Carmel was a viable, mutually exclusive alternative was contrary to the evidence; and (3) that finding Illinois Power's acquisition to be inconsistent with the public interest was against the manifest weight of the evidence.

Our consideration is confined to the first issue, which we perceive to be dispositive and which presents a question of first impression in this state; although, other Illinois cases may tangentially touch on the issue presented (see Klopf v. Illinois Commerce Com. (2nd Dist.1977), 54 Ill.App.3d 491, 12 Ill.Dec. 199, 369 N.E.2d 906.) Because we agree that an erroneous statutory application prompted the Commission's decision, we reverse.

In its petition to intervene, CIPS requested that the Commission deny approval of Illinois Power's merger plan if the evidence demonstrated that the acquisition of Mt. Carmel by CIPS would best serve the public interest. The Commission agreed, declaring that, in deciding whether a public utility merger is in the public interest, "viable, mutually exclusive alternatives should be considered," and that if such an alternative would "better serve the public interest, a proposed merger should not be approved." The Commission then conducted a comparative analysis of Illinois Power and CIPS in light of several factors deemed pertinent to the public interest in the Mt. Carmel case. The list included contiguity of the properties, simplication of electric service facility planning, fairness and reasonableness to shareholders, interest of ratepayers, and incremental cost of service. In each instance, the Commission comprehensively reviewed the relevant facts presented by both Illinois Power and CIPS. The record fails to show that Illinois Power's application was ever considered independently as compared to the continued operation of Mt. Carmel as a separate utility.

The purpose of the Public Utilities Act (hereinafter the "Act") is to assure provision of efficient and adequate utility service to the public at a reasonable cost. (Local 777, DUOC, Seafarers International Union of North America v. Illinois Commerce Com. (1970), 45 Ill.2d 527, 260 N.E.2d 225.) To that end, the Commission was created and vested with regulatory powers, including the control of certain acts of utility companies affecting the public. (Ill.Rev.Stat.1983, ch. 111 2/3, par. 1, et seq.). Because it is a statutory creation, however, and derives its power exclusively from legislative mandate, the Commission may act only in accordance with expressly delegated authority and within the jurisdictional purview granted by the Act. (City of Chicago v. Illinois Commerce Com. (1980), 79 Ill.2d 213, 37 Ill.Dec. 593, 402 N.E.2d 595; Liberty Trucking Co. v. Illinois Commerce Com. (2nd Dist.1980), 81 Ill.App.3d 466, 36 Ill.Dec. 740, 401 N.E.2d 581; Black Hawk Motor Transit Co. v. Illinois Commerce Com. (1947), 398 Ill. 542, 76 N.E.2d 478.) It is our duty on judicial review to reverse those orders of the Commission which unlawfully exceed the scope of its authority. (Citizens Utilities Co. v. Illinois Commerce Com. (1971), 50 Ill.2d 35, 276 N.E.2d 330; Thompson v. Illinois Commerce Com. (1953), 1 Ill.2d 350, 115 N.E.2d 622.) Finally, a reviewing court may inquire into the method used by an administrative agency to achieve the result which is being reexamined. (Union Electric Co. v. Illinois Commerce Com. (1979), 77 Ill.2d 364, 376, 33 Ill.Dec. 121, 127, 396 N.E.2d 510, 516, citing City of Alton v. Commerce Com. (1960), 19 Ill.2d 76, 80, 165 N.E.2d 513, 516.)

The Commission's authority to rule upon Illinois Power's petition requires it to ascertain whether the proposed merger is consistent with the public interest. Specifically, the controlling statute provides that "upon the filing of such petition * * * if the Commission is satisfied that such petition shall reasonably be granted, and that the public will be convenienced thereby, the Commission shall make such...