People ex rel. Madigan v. Illinois Commerce Comm'n
988 N.E.2d 146
Ill. App. Ct.2013Background
- Consolidated appeal challenging the ICC’s approval of Rider VBA for Peoples Gas and North Shore Gas in the Chicago area.
- Rider VBA is a volume-balancing-adjustment rider designed to decouple utility revenues from volume, holding revenues constant despite varying gas usage; originally approved as a four-year pilot in 2008, made permanent in 2012.
- Petitioners Lisa Madigan (Attorney General) and CUB argue Rider VBA is unlawful retroactive and single-issue ratemaking.
- ICC described VBA as symmetrical, transparent, reducing reliance on forecasted sales and promoting rate stability for customers and utilities.
- The court applies 10-201 review, deferring to the ICC on findings of fact and reviewing for substantial evidence, not reweighing credibility.
- The court holds Rider VBA does not violate retroactive or single-issue ratemaking and is supported by substantial evidence; the ICC order is affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rider VBA violates retroactive ratemaking. | Madigan/CUB argue VBA refunds/credits retroactively adjust rates. | Peoples/North Shore contend VBA is not retroactive ratemaking; approved design. | No retroactive ratemaking; upheld. |
| Whether Rider VBA constitutes single-issue ratemaking. | Madigan/CUB claim VBA isolates a single cost component, distorting revenue requirement. | ICC and utilities argue it fixes revenues and is not single-issue ratemaking. | Not categorically single-issue ratemaking; not prohibited as such. |
| What is the appropriate standard of review and whether VBA yields just and reasonable rates. | Review should be strict given departure from past practice (arguably). | Review under 10-201 with deference to ICC findings; substantial evidence standard. | Court defers to ICC; Rider VBA supported by substantial evidence and just and reasonable. |
Key Cases Cited
- Mandel Brothers, Inc. v. Chicago Tunnel Terminal Co., 2 Ill. 2d 205 (1954) (retroactive ratemaking established as a rule for reparations)
- Illinois Bell Telephone Co. v. Illinois Commerce Comm’n, 203 Ill. App. 3d 424 (1990) (retroactive ratemaking principles applied to rate design)
- Citizens Utility Board v. Illinois Commerce Comm’n, 166 Ill. 2d 111 (1995) (single-issue ratemaking prohibition)
- People ex rel. Hartigan v. Illinois Commerce Comm’n, 148 Ill. 2d 348 (1992) (early ratemaking precedents on propriety of rate moves)
- Commonwealth Edison Co. v. Illinois Commerce Comm’n, 405 Ill. App. 3d 389 (2010) (deference to ICC; review of findings and sufficiency of record)
- Business & Professional People for the Public Interest v. Illinois Commerce Comm’n, 146 Ill. 2d 175 (1991) (prospective ratemaking principles; retroactivity guidance)