The Citizens Utility Board v. Illinois Commerce Commission

2016 IL App (1st) 152936, 55 N.E.3d 736

• Court: Appellate Court of Illinois
• Decided: June 10, 2016
• Docket: 1-15-2936
• Status: Unpublished

Opinion

2016 IL App (1st) 152936

SIXTH DIVISION Opinion filed: June 10, 2016

No. 1-15-2936 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

FIRST DISTRICT ______________________________________________________________________________

THE CITIZENS UTILITY BOARD and ) Direct Administrative ENVIRONMENTAL DEFENSE FUND, ) Review of the Illinois ) Commerce Commission Petitioners-Appellants, ) ) v. ) No. 15-0156 ) ILLINOIS COMMERCE COMMISSION, ) ) Respondent-Appellee, ) ) (Commonwealth Edison Company, Intervenor- ) Appellee; the People of the State of Illinois ex rel. Lisa ) Madigan and the City of Chicago, Respondents; ) Environmental Law and Policy Center and Illinois ) Competitive Energy Association, Intervenors). ) ______________________________________________________________________________

JUSTICE HOFFMAN delivered the judgment of the court, with opinion. Presiding Justice Rochford and Justice Delort concurred in the judgment and opinion.

OPINION

¶1 The Citizens Utility Board (CUB) and Environmental Defense Fund (EDF) (collectively

referred to as CUB/EDF) filed a joint petition with the Illinois Commerce Commission

(Commission), requesting that the Commission initiate a proceeding to approve a community-

owned solar pilot program utilizing virtual net metering in the service territory of the No. 1-15-2936

Commonwealth Edison Company (Edison) and order a modification to Edison's tariff to extend

net metering to customers who collaboratively participate in the operation of eligible renewable

electrical generating facilities that are not located on their own premises. Edison filed a motion

to dismiss the petition. The Commission granted the motion and denied CUB/EDF's subsequent

application for rehearing. CUB/EDF filed a timely petition for direct review of the

Commission's orders with this court. For the reasons that follow, we affirm the orders of the

Commission.

¶2 CUB is an organization created by statute (220 ILCS 10/4 (West 2014)) and charged with

the duty of representing and protecting the interests of the residential utility customers of Illinois

(220 ILCS 10/5(a) (West 2014)). EDF is a non-profit organization whose mission is to provide

solutions to environmental problems.

¶3 Pursuant to a rider to its tariff known as "Parallel Operation of Retail Customer

Generating Facilities with Net Metering" (Rider POGNM), Edison offers "net electrical

metering" to "eligible customers" who generate their own electricity from a renewable source

such as solar panels located on the customer's own premises. Eligible customers who participate

in net electrical metering may offset some or all of their utility charges by exporting the

electricity which they generate to the electric grid and netting their usage and generation.

¶4 On February 15, 2015, CUB and EDF filed a joint petition, requesting that the

Commission approve a community-owned solar pilot program utilizing virtual net metering and

modify Rider POGNM to Edison's tariff to extend the net metering option to groups of customers

who collaboratively participate in the operation of eligible renewable electrical generating

facilities that are not located on their own premises and to allow those customers to share in the

attendant billing credits from those facilities. The tariff modification proposed by CUB/EDF is

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known as "Rider Parallel Operation of Community Generating Facilities with Virtual Net

Metering" (Rider POGVNM).

¶5 Edison filed a motion to dismiss CUB/EDF's petition, arguing, inter alia: that the

Commission is prohibited under section 16-103(e) of the Public Utilities Act (Act) (220 ILCS

5/16-103(e) (West 2014)) from requiring it to expand net metering presently available under

Rider POGNM to allow customers who do not meet the statutory definition of an "eligible

customer" to participate in net metering; that after considering whether to allow net metering on

properties owned or leased by multiple customers that contribute to the operation of an eligible

renewable electrical generating facility but who do not meet the statutory definition of eligible

customers, it elected not to allow net metering under those circumstances; and that only a utility

can initiate a rate change.

¶6 On July 28, 2015, the Commission issued a decision granting Edison's motion to dismiss.

The Commission found that it lacked the authority to order the implementation of a community-

owned solar pilot program utilizing virtual net metering or to require Edison to offer net

metering pursuant to CUB/EDF's proposed Rider POGVNM. In support of its finding, the

Commission concluded that the service outlined in proposed Rider POGVNM is "sufficiently

beyond that service provided under *** [Edison's] Rider POGNM to constitute a new service[,]"

and as a consequence, section 16-103(e) of the Act prohibits it from requiring Edison to

implement the service described in CUB/EDF's proposed tariff rider. The Commission also

found that, although section 16-107.5(l) of the Act (220 ILCS 5/16-107.5(l) (West 2014)) directs

an electrical provider such as Edison to "consider" allowing meter aggregation for purposes of

net metering on properties owned or leased by multiple customers that contribute to the operation

of an eligible renewable electrical facility such as a community-owned solar project, the decision

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of whether to offer net metering under those circumstances is "in the hands of the electricity

provider."

¶7 On August 26, 2015, CUB and EDF filed a joint application with the Commission

seeking a rehearing on Edison's motion to dismiss and an order reversing its decision of July 28,

2015. The Commission denied the application for rehearing on September 11, 2015. Thereafter,

CUB and EDF filed their timely joint petition for direct review of the Commission's decision

with this court. See 220 ILCS 5/10-201(a) (West 2014).

¶8 The Commission is an administrative agency responsible for setting utility rates, whose

powers and duties are set forth in the Act. Consequently, we give substantial deference to the

Commission's decisions in light of its expertise in the area of utility rate making.

Commonwealth Edison Co. v. Illinois Commerce Comm'n, 398 Ill. App. 3d 510, 514 (2009). On

review of a decision of the Commission, the Act requires that we consider its findings of fact to

be prima facie true and its orders and decisions to be prima facie reasonable. 220 ILCS 5/10-

201(d) (West 2014); United Cities Gas Co. v. Illinois Commerce Comm'n, 163 Ill. 2d 1, 11

(1994). We will not reverse an order or decision of the Commission unless it acted outside of its

jurisdiction, its decision is not supported by substantial evidence, or the proceeding or manner by

which the Commission considered and arrived at its decision or order were in violation of the

State or Federal Constitutions or relevant laws, to the prejudice of the appellant. 220 ILCS 5/10-

201(e)(iv)(A)-(D) (West 2014); United Cities Gas, 163 Ill. 2d at 12.

¶9 We first address the question of whether the Commission erred in concluding that it was

statutorily prohibited from ordering the implementation of the community-owned solar pilot

program utilizing virtual net metering as requested by CUB/EDF or from requiring Edison to

offer net metering pursuant to proposed Rider POGVNM. CUB/EDF contends that net

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electricity metering as contemplated by its proposed Rider POGVNM is not a new service. It

asserts that Edison already offers net metering under Rider POGNM and that the services

outlined in its proposed Rider POGVNM are identical with the exception that the proposed tariff

rider expands the eligible customers to include those individuals and entities that contribute to

the operation of an eligible renewable electrical generating facility located on premises other

than their own. CUB/EDF appears to reason that, since Edison already offers net metering under

Rider POGNM, section 16-103(e) of the Act is not an impediment to the Commission's authority

to order net metering pursuant to its proposed Rider POGVNM.

¶ 10 Section 16-103(e) provides, in relevant part, that "[t]he Commission shall not require an

electric utility to offer any tariffed service other than the services required by this Section." 220

ILCS 5/16-103(e) (West 2014). The tariffed services which an electric utility is required to offer

pursuant to the provisions of section 16-103 include: "tariffed service[s] that it offered as a

distinct and identifiable service on the effective date of [the] amendatory Act of 1997 [(Electric

Service Customer Choice and Rate Relief Law of 1997)]" (220 ILCS 5/16-103(a) (West 2014));

"delivery services in accordance with this Article [XVI], the power purchase options described in

Section 16-110 and real-time pricing as provided in Section 16-107" (220 ILCS 5/16-103(b)

(West 2014)); and "bundled electric power and energy delivered to the customer's premises

consistent with the bundled utility service provided by the electric utility on the effective date of

[the] amendatory Act of 1977 [(Electric Service Customer Choice and Rate Relief Law of

1997)]" (220 ILCS 5/16-103(c) (West 2014)). The only tariffed services required by section 16-

103 which are relevant to our inquiry in this case are those services that Edison offered as a

distinct and identifiable service on the effective date of the Electric Service Customer Choice and

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Rate Relief Law of 1997 and delivery services which Edison offered in accordance with Article

XVI of the Act.

¶ 11 When interpreting a statute, our primary function is to ascertain and give effect to the

intent of the legislature, primarily from the language used. Business & Professional People for

the Public Interest v. Illinois Commerce Comm'n, 146 Ill. 2d 175, 207 (1991). The terms used

must be considered in context with a view to the reason and necessity for the statute and the

purpose to be achieved. MCI Telecommunications Corp. v. Illinois Commerce Comm'n, 168 Ill.

App. 3d 1008, 1012 (1988).

¶ 12 By definition, "delivery services" include standard metering and billing services. 220

ILCS 5/16-102 (West 2014). Section 16-107.5(i), which is contained within Article XVI of the

Act, mandates that "[a]ll electricity providers shall begin to offer net metering no later than April

1, 2008." 220 ILCS 5/16-107.5(i) (West 2014). The parties concede that Edison offered net

metering at all times relevant to this case. However, Edison only offered net metering to

"eligible customer[s]" who are defined by statute as "a retail customer that owns or operates a

solar, wind, or other eligible renewable electrical generating facility *** that is located on the

customer's premises and is intended primarily to offset the customer's own electrical

requirements." 220 ILCS 5/16-107.5(b) (West 2014). Edison did not, and was not required to,

offer, either pursuant to section 16-107.5 or any other section contained within Article XVI of

the Act, net metering to customers that contribute to the operation of an eligible renewable

electrical generating facility, such as a community-owned solar project, that was not located on

the customer's premises. We conclude, therefore, that, although the net metering offered by

Edison pursuant to Rider POGNM is statutorily mandated by the provisions of Article XVI of

the Act, and specifically section 16-107.5 thereof, the net metering contemplated by CUB/EDF's

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proposed Rider POGVNM is not. We are left then with the question of whether net metering

service described in proposed Rider POGVNM is a tariffed service offered by Edison as a

"distinct and identifiable service" on the effective date of the Electric Service Customer Choice

and Rate Relief Law of 1997.

¶ 13 CUB/EDF contends that the net metering services offered by Edison as mandated by the

Act and outlined in Rider POGNM are not distinct from net metering to an expanded group of

customers as outlined in its proposed Rider POGVNM. CUB/EDF appears to take the position

that net metering is net metering, regardless of the customers to whom the service is offered. It

concludes, therefore, that section 16-103(e) does not prohibit the Commission from requiring

Edison to offer net metering to customers who operate an eligible renewable electrical generating

facility on premises other than their own.

¶ 14 In contrast, the Commission found that, regardless of its merits, the expanded net

metering service set forth in CUB/EDF's proposed Rider POGVNM "is sufficiently beyond that

provided under *** Edison's Rider POGNM to constitute a new service." Unfortunately, the

Commission did not articulate its finding using the statutory phrase "distinct and identifiable

service" to support its conclusion that section 16-103(e) prevents it from requiring Edison to

implement the net metering service described in proposed Rider POGVNM. Nevertheless, we

believe that implicit in Commission's finding that the net metering described in CUB/EDF's

proposed Rider POGVNM is a "new service" is the finding that the net metering service offered

by Edison under Rider POGNM is a distinct and identifiable service that does not include the net

metering contemplated by proposed Rider POGVNM.

¶ 15 CUB/EDF argue that the net metering service which they sought to have the Commission

compel is not a "new service" because Edison presently offers net metering to customers with

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eligible renewable electrical generating facilities, albeit only those customers with eligible

facilities located on the customer's own premises. The Commission argues that a comparison of

the provisions of Rider POGNM to Edison's tariff and the provisions of CUB/EDF's proposed

Rider POGVNM supports its conclusion that the proposed rider constitutes a new service. As

the Commission points out, proposed Rider POGVNM provides for an enlarged group of

customers to whom Edison would be obligated to offer net metering, including customers other

than "eligible customers" as defined by statute. The "eligible customers" that Edison is required

to offer net metering service to does not include customers that contribute to the operation of an

eligible renewable electrical generating facility located on premises other than their own. The

proposed rider would permit the sharing of net metering credits with a group of subscribing

customers whose premises are connected within five miles of an eligible generating facility; a

credit sharing that is not permitted under Edison's current tariff. Further, Edison's current tariff

requires Edison to provide net metering to "eligible customers" until the load of net metering

customers equals 5% of Edison's total peak demand during the previous year. Under proposed

Rider POGVNM the electric capacity produced by an eligible community-owned solar facility

would be counted in determining whether the load of net metering customers reached 5% of

Edison's total peak demand during the previous year, and as a consequence, "eligible customers"

otherwise entitled to the service under the current tariff could be denied net metering.

¶ 16 Whether the net metering service contemplated under proposed Rider POGVNM is

sufficiently different from the net metering service presently offered by Edison under Rider

POGNM so as to constitute a "new service" is a conclusion reached by a comparison of the two.

We believe that the issue is one of fact. Therefore, the Commission's finding that the net

metering service contemplated pursuant to the provisions of CUB/EDF's proposed Rider

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POGVNM is a new service must be considered as prima facie true (220 ILCS 5/10-201(d) (West

2014)) and could only be disturbed on review if it is not supported by "substantial evidence"

(220 ILCS 5/10-201(e)(iv)(A) (West 2014)).

¶ 17 It is not within our province to reweigh the evidence or substitute our judgement for that

of the Commission. Village of Montgomery v. Illinois Commerce Comm'n, 249 Ill. App. 3d 484,

493 (1993). Based upon the record before us and our comparison of the net metering service

offered by Edison pursuant to Rider POGNM and the net metering service contemplated by

proposed Rider POGVNM, we are unable to find that the Commission's finding that the net

metering services contemplated by the proposed rider is a new service is not supported by

substantial evidence as an opposite conclusion is not clearly evident. Continental Mobile

Telephone Co. v. Illinois Commerce Comm'n, 269 Ill. App. 3d 161, 171 (1994). Further, if, as

the Commission has found, the net metering service contemplated pursuant to proposed Rider

POGVNM constitutes a new service, it follows that it is not a tariffed service offered as a distinct

and identifiable service on the effective date of the Electric Service Customer Choice and Rate

Relief Law of 1997.

¶ 18 Based upon the foregoing analysis, we find that the net metering service outlined in

CUB/EDF's proposed Rider POGVNM is not a tariffed service required by section 16-103 of the

Act. Consequently, the Commission was prohibited pursuant to section 16-103(e) from requiring

Edison to offer the net metering service contemplated by proposed Rider POGVNM or

approving a pilot program that would require Edison to offer that service. Our holding in this

regard is dispositive of this review, and we, therefore, need not address CUB/EFD's other

assignments of error.

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¶ 19 For the reasons stated, we affirm the Commission's decision of July 28, 2015, granting

Edison's motion to dismiss, and the Commission's order of September 11, 2015, denying the

application for rehearing.

¶ 20 Affirmed.

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