                           Illinois Official Reports

                                  Appellate Court



    Commonwealth Edison Co. v. Illinois Commerce Comm’n, 2014 IL App (1st) 130544



Appellate Court       COMMONWEALTH EDISON COMPANY, Petitioner, v. ILLINOIS
Caption               COMMERCE COMMISSION; AMEREN ILLINOIS COMPANY;
                      C3, INC.; COALITION 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.

District & No.        First District, Second Division
                      Docket Nos. 1-13-0544, 1-13-0632, 1-13-0653, 1-13-1063, 1-13-1120
                      cons.
Filed                     July 22, 2014

Held                       An order of the Illinois Commerce Commission requiring petitioner to
(Note: This syllabus enter into a sourcing agreement to procure electricity for the retail
constitutes no part of the customers of alternative retail electric suppliers and recoup the costs
opinion of the court but through a “competitively neutral” charge, rather than requiring each
has been prepared by the alternative retail electric supplier to enter into its own sourcing
Reporter of Decisions agreement, was upheld on appeal over petitioner’s contentions that the
for the convenience of Commission made the decision without support from the record and
the reader.)               violated the Rate Relief Law by requiring petitioner to enter into a
                           sourcing agreement to procure electricity for customers other than its
                           own “eligible retail customers,” since the Commission was entitled to
                           substantial deference with respect to its interpretation of the statute it
                           administers and the approach adopted by the Commission in the
                           instant case was within its statutory authority and was a cost-effective
                           alternative to administering the nearly 70 individual sourcing
                           agreements that would result from requiring each alternative retail
                           electric supplier to have its own agreement.

Decision Under            Petition for review of order of Illinois Commerce Commission, No.
Review                    1-12-0544.
Judgment                  Affirmed.


Counsel on                Rooney Rippie & Ratnaswamy LLP (E. Glenn Rippie, of counsel),
Appeal                    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.


                                                -2-
     Panel                    PRESIDING JUSTICE HARRIS delivered the judgment of the court,
                              with opinion.
                              Justice Pierce concurred in the judgment and opinion.
                              Justice Pucinski dissented, with opinion.




                                                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




                                                   -3-
     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,

         1
          The parties agree that an initial clean coal facility has never been established by the legislature and
     therefore the statutory provisions dealing with the initial clean coal facility are not relevant in this
     appeal.

         2
             Ameren is not a party to this consolidated appeal.

                                                       -4-
       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 Commission issued its final order approving the Illinois Power
       Agency’s procurement plan, but modified the plan to reflect the staff’s alternate approach
       regarding sourcing agreements with FutureGen 2.0. It concluded that the staff’s proposal was
       “quite reasonable in light of the administrative burden that would be placed on FutureGen, the
       Commission, Staff and ARES if a separate sourcing agreement were required for each and
       every ARES as well as ComEd and Ameren.” Illinois Power Agency, Ill. Com. Comm’n
       Docket 12-0544, at 236 (Order Dec. 19, 2012). The Commission found that while sections
       1-75(d)(5) of the Illinois Power Agency Act and 16-115 of the Public Utilities Act did not
       explicitly sanction the alternate approach, “the intent of the Legislature that all customers
       equally bear the costs and benefits of the State’s clean coal portfolio standard is consistent with
       the alternative proposal.” Id. Upon a motion for clarification, the Commission entered an
       amendatory order on January 29, 2013, stating that under the alternate approach, ComEd
       would be able to recover its costs incurred under the FutureGen 2.0 sourcing agreement
       through a competitively neutral charge that is not a delivery services charge. Illinois Power
       Agency, Ill. Com. Comm’n Docket 12-0544 (Amend. Order Jan. 29, 2013). After denial of the
       petitions for rehearing filed on January 29, 2013, ComEd, ICEA, and IIEC initiated this action
       for administrative review. This court consolidated the appeals.

¶ 12                                          ANALYSIS
¶ 13       Initially, we address a preliminary issue raised by the Commission. The Commission
       contends that this court should disregard and strike the brief of Coalition of Energy Suppliers
       (CES), and strike portions of ComEd’s brief in response to ICEA/IIEC’s appellant brief. It
       argues that CES is an appellee, but CES’s brief attacks the Commission’s order. The
       Commission contends that if CES seeks reversal or modification of the order, it must file its
       own appeal or cross-appeal. The Commission also argues that this court should strike the
       portion of ComEd’s response brief raising the dormant commerce clause argument, because
       ComEd did not present the issue as a ground for error in its application for rehearing as

          3
          The majority of customers in ComEd’s service territory receive their electricity from ARES, not
       ComEd.

                                                    -5-
       required, nor did it raise the issue in its main brief. The striking of a brief, in whole or in part, is
       a harsh sanction and is proper only in cases where the alleged violations interfere with or
       preclude our review. In re Detention of Powell, 217 Ill. 2d 123, 132 (2005). This consolidated
       appeal involves numerous parties presenting, and responding to, arguments on complex issues
       regarding the regulation of the electricity industry. The fact that this court ordered a specific
       briefing schedule, pursuant to an agreement by the parties, underscores the unique nature of
       this appeal. The briefs before us sufficiently set forth the issues, and we find that the alleged
       violations identified by the Commission do not preclude meaningful review of the merits of
       this case. Therefore, in the exercise of our discretion, we deny the Commission’s request to
       strike and will address the arguments briefed in this appeal. Id.
¶ 14       On appeal, ComEd and ICEA/IIEC challenge the Commission’s order. Courts give
       substantial deference to the Commission’s decisions for it is an administrative body with
       expertise in the area of public utilities, and thus is qualified to interpret highly technical
       evidence. United Cities Gas Co. v. Illinois Commerce Comm’n, 163 Ill. 2d 1, 12 (1994). The
       Commission’s findings are considered prima facie reasonable and the burden of proof is on the
       appellant on all issues raised in the appeal. 220 ILCS 5/10-201(d) (West 2012). In reviewing
       the Commission’s orders, a court is limited to determining whether (1) the Commission acted
       within its authority; (2) it made adequate findings to support its decision; (3) substantial
       evidence supports its decision; and (4) any constitutional rights were violated. Commonwealth
       Edison Co. v. Illinois Commerce Comm’n, 322 Ill. App. 3d 846, 849 (2001).
¶ 15       ComEd and ICEA/IIEC contend that the Commission’s approval of the procurement plan,
       which compels ComEd to enter into a sourcing agreement with FutureGen 2.0 on behalf of
       ARES, exceeded its statutory authority. The scope of the Commission’s authority is a question
       of law, which we review de novo. City of Chicago v. Illinois Commerce Comm’n, 294 Ill. App.
       3d 129, 134-35 (1997).
¶ 16       An administrative agency derives its authority to act solely from the statute creating the
       agency. Resource Technology Corp. v. Commonwealth Edison Co., 343 Ill. App. 3d 36, 44
       (2003). Therefore, the issue before this court is one involving statutory interpretation. In
       interpreting a statute, a court’s primary objective is to ascertain and give effect to legislative
       intent as indicated by the plain and ordinary meaning of the statutory language.
       Commonwealth Edison Co. v. Illinois Commerce Comm’n, 328 Ill. App. 3d 937, 942 (2002).
       However, courts appreciate an agency’s experience and expertise in a given area and therefore
       will give substantial deference to its interpretation of an ambiguous statute it administers and
       enforces. Illinois Consolidated Telephone Co. v. Illinois Commerce Comm’n, 95 Ill. 2d 142,
       152-53 (1983). While not binding on the courts, an agency’s interpretations are an informed
       source for ascertaining the legislature’s intent in enacting the statute. Id. at 153.
¶ 17       In construing a statute, courts must “ascertain and give effect to the overall intent of the
       drafters.” Knolls Condominium Ass’n v. Harms, 202 Ill. 2d 450, 458 (2002). The Rate Relief
       Law of the Public Utilities Act sought to restructure the electricity industry so as to create
       competition and introduce customer choice in the supply of electricity. 220 ILCS
       5/16-101A(b) (West 2012). Accordingly, section 16-111.5(a) of the Public Utilities Act sets
       forth ComEd’s procurement of electricity for its customers. It states that an electric utility
       “shall procure power and energy for its eligible retail customers in accordance with the
       applicable provisions set forth in Section 1-75 of the Illinois Power Agency Act and this
       Section.” 220 ILCS 5/16-111.5(a) (West 2012). “Those customers that are excluded from the

                                                      -6-
       definition of ‘eligible retail customers’ shall not be included in the procurement plan load
       requirements ***.” Id. The Rate Relief Law further provides that utilities shall procure power
       pursuant to procurement plans approved by the Commission. 220 ILCS 5/16-111.5(b) (West
       2012).
¶ 18        Section 1-75 of the Illinois Power Agency Act grants the Illinois Power Agency authority
       to “develop procurement plans and conduct competitive procurement processes in accordance
       with the requirements of Section 16-111.5 of the Public Utilities Act for the eligible retail
       customers of electric utilities.” 20 ILCS 3855/1-75(a) (West 2012). It also sets forth specific
       provisions relating to the procurement plan requirements. Relevant to this appeal, section
       1-75(d)(1) provides that such procurement plans “shall include electricity generated using
       clean coal.” 20 ILCS 3855/1-75(d)(1) (West 2012). This section is referred to as the clean coal
       portfolio standard.
¶ 19        Section 1-75(d)(5) provides that the Illinois Power Agency shall also “consider sourcing
       agreements covering electricity generated by power plants” previously owned by Illinois
       utilities “that have been or will be converted into clean coal facilities.” 20 ILCS
       3855/1-75(d)(5) (West 2012). As part of the procurement planning process, owners of these
       retrofitted facilities “may propose to the [Illinois Power] Agency sourcing agreements with
       utilities and alternative retail electric suppliers required to comply with subsection (d) of this
       Section and item (5) of subsection (d) of Section 16-115 of the Public Utilities Act.” Id.
¶ 20        The legislature included a corresponding clean coal electricity requirement in the
       certification of ARES. Before servicing any customer in Illinois, an ARES “must obtain a
       certificate of service authority from the Commission in accordance with this Section.” 220
       ILCS 5/16-115(a) (West 2012). As part of the certification process, an ARES applicant must
       source some of its electricity from clean coal facilities including retrofitted facilities. 220 ILCS
       5/16-115(d)(5)(iii) (West 2012). This section provides:
                    “(d) The Commission shall grant the application for a certificate of service
                authority if it makes the findings set forth in this subsection based on the verified
                application and such other information as the applicant may submit:
                                                             ***
                         (5) That the applicant will procure renewable energy resources in accordance
                    with Section 16-115D of this Act, and will source electricity from clean coal
                    facilities, as defined in Section 1-10 of the Illinois Power Agency Act, in amounts
                    at least equal to the percentages set forth in subsections (c) and (d) of Section 1-75
                    of the Illinois Power Agency Act. For purposes of this Section:
                                                             ***
                              (iii) the required sourcing of electricity generated by clean coal facilities,
                         other than the initial clean coal facility, shall be limited to the amount of
                         electricity that can be procured or sourced at a price at or below the benchmarks
                         approved by the Commission each year 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).
¶ 21        Appellants agree that these statutory provisions allow the Illinois Power Agency to
       develop a procurement plan that compels ComEd to enter a sourcing agreement with a
       retrofitted clean coal facility on behalf of ComEd’s eligible retail customers. However, they
       argue for a strict reading of the statutory provisions. ComEd and ICEA/IIEC contend that the

                                                     -7-
       plain words of the procurement plan provisions of the Rate Relief Law and the Illinois Power
       Agency Act refer only to ComEd’s eligible retail customers, which by definition excludes
       ARES customers. Therefore, the IPA has no power to propose, and the Commission has no
       power to approve, procurement plans requiring ComEd to procure electricity for ARES
       customers. At most, the Commission can compel each ARES to enter into a sourcing
       agreement with FutureGen 2.0, but it cannot compel ComEd to enter such agreements on
       behalf of ARES.
¶ 22        We disagree. While the general statutory provisions relating to procurement plans for
       utilities refer only to ComEd’s eligible retail customers, the specific provisions setting forth
       ComEd’s required procurement of electricity from retrofitted clean coal sources make no
       mention of eligible retail customers. We will not place undue emphasis on the statutory
       construction rule that the inclusion of one term necessarily excludes other possible terms. See
       Knolls, 202 Ill. 2d at 459. Instead, courts must construe statutes relating to the same subject
       with reference to one another in order to give effect to all the provisions if possible. Henrich v.
       Libertyville High School, 186 Ill. 2d 381, 392 (1998). If it appears a conflict exists between the
       statutes, courts will try to construe the provisions harmoniously. United Citizens of Chicago &
       Illinois v. Coalition to Let the People Decide in 1989, 125 Ill. 2d 332, 339 (1988). The intent of
       the legislature is most significant. Id. at 338-39.
¶ 23        The legislature clearly found the use of electricity generated by clean coal facilities
       important for both utilities and ARES. Both parties must utilize such electricity in their supply
       to customers, and when the electricity comes from retrofitted clean coal facilities, procurement
       by utilities and ARES must meet the same benchmarks set forth in section 1-75(d)(5). This
       legislative intent is reflected in the clean coal portfolio standard which, by its terms, grants the
       Illinois Power Agency and the Commission more authority in the procurement of electricity
       from such sources. See Knolls, 202 Ill. 2d at 459 (where both a general statutory provision and
       a specific statutory provision address the same subject, “the specific provision controls and
       should be applied”).
¶ 24        The question is whether these provisions authorize the Illinois Power Agency to compel
       ARES to enter into a sourcing agreement with FutureGen 2.0. ICEA/IIEC argue that the
       statutes grant no such authority. The statutory procurement planning process, after all, is aimed
       at the utilities and not at ARES. Also, the statutes do not expressly state that ARES can be
       compelled to enter into a sourcing agreement with a retrofitted clean coal facility.
¶ 25        However, as part of the certification process ARES must source electricity from clean coal
       facilities in amounts at least equal to those set forth in section 1-75(c)(1) and (d)(5) of the
       Illinois Power Agency Act. Subsection (d)(5) provides that pursuant to the procurement
       planning process, owners of qualified retrofitted clean coal facilities “may propose to the
       [Illinois Power] Agency sourcing agreements with utilities and alternative retail electric
       suppliers required to comply with” subsection (d) and section 16-115(d)(5) of the Public
       Utilities Act. (Emphasis added.) 20 ILCS 3855/1-75(d)(5) (West 2012). The statute clearly
       contemplates, at the very least, that the Illinois Power Agency can consider such sourcing
       agreements with ARES in the procurement planning process. If the Illinois Power Agency can
       consider such agreements, it is reasonable to presume that the Illinois Power Agency can
       compel ARES to enter into sourcing agreements with such facilities as part of the procurement
       planning process if doing so furthers statutory goals. The Commission contends that it has such
       authority where compelling ARES to enter into sourcing agreements with retrofitted clean coal

                                                    -8-
       facilities furthers the goals of supporting the development of clean coal technologies, and
       providing electricity at the lowest total cost. We acknowledge the Commission’s experience
       and expertise in this area and give substantial deference to its interpretation of an ambiguous
       statute it administers and enforces. Illinois Consolidated Telephone Co., 95 Ill. 2d at 152-53.
¶ 26        The Commission, however, adopted the alternate approach suggested by its staff. The
       alternate approach requires only ComEd and Ameren to enter into sourcing agreements with
       FutureGen 2.0 to purchase a pro rata share of the output based on the amount of electricity the
       utilities deliver to its distribution customers (including ARES customers). ComEd and Ameren
       then could recover the costs associated with procurement through a competitively neutral
       charge assessed to all of their retail distribution customers (including ARES customers). The
       Commission reasoned that this approach was a cost-effective alternative to the burdensome
       process of administering and monitoring approximately 70 individual sourcing agreements.
¶ 27        We find that the Commission acted within its statutory authority. Pursuant to the Rate
       Relief Law of the Public Utilities Act and the Illinois Power Agency Act, both the utilities and
       ARES must source some of their electricity from clean coal or retrofitted facilities. As
       discussed above, the Commission has the authority to compel both the utilities and ARES to
       enter into sourcing agreements with retrofitted clean coal facilities as part of the procurement
       planning process. Viewed within this framework, the Commission’s order approving a
       procurement plan requiring ComEd to enter a sourcing agreement with FutureGen 2.0 on
       behalf of ARES customers, while not explicitly condoned by statute, is within its “inherent
       authority and wide latitude to adopt regulations or policies reasonably necessary to perform the
       agency’s statutory dut[y].” (Internal quotation marks omitted.) Resource Technology Corp. v.
       Commonwealth Edison Co., 343 Ill. App. 3d 36, 44 (2003).
¶ 28        ComEd argues, however, that even if the Commission has authority to approve the
       alternate approach, it failed to support its finding with substantial evidence that the approach
       was necessary to avoid administrative burdens on the parties. Upon review, courts consider the
       Commission’s factual findings prima facie true and its orders prima facie reasonable. United
       Cities Gas Co., 163 Ill. 2d at 11. Furthermore, the Commission need not provide findings on
       each evidentiary claim; it is sufficient if the findings are specific enough for courts to review
       the order. Commonwealth Edison Co. v. Illinois Commerce Comm’n, 2013 IL App (2d)
       120334, ¶ 38. Substantial evidence is evidence that a reasoning mind finds sufficient to support
       a finding. Central Illinois Public Service Co. v. Illinois Commerce Comm’n, 268 Ill. App. 3d
       471, 479 (1994). Substantial evidence is more than a mere scintilla, but need not rise to the
       level of a preponderance of the evidence. Commonwealth Edison Co., 2013 IL App (2d)
       120334, ¶ 38. A party who argues that the Commission’s findings were not supported by
       substantial evidence must show more than the mere fact that the evidence supports a different
       conclusion. Instead, the party must show that the opposite conclusion was clearly evident.
       Abbott Laboratories, Inc. v. Illinois Commerce Comm’n, 289 Ill. App. 3d 705, 714 (1997).
¶ 29        The parties agreed to proceed before the Commission without hearings and addressed any
       issues by filing verified responses to comments and objections, and by filing replies. The
       Commission’s staff contended that requiring the Illinois Power Agency to negotiate separate
       sourcing agreements with an estimated 70 separate ARES, as well as with ComEd and
       Ameren, would be burdensome. Specifically, the staff determined that the utilities would bear
       the costs of providing FutureGen with billing records for each customer served by ARES,
       ARES and FutureGen would bear costs associated with entering into and managing 70

                                                   -9-
       additional contracts, and the staff would need to devote extra time to review all of the annual
       reports of compliance with the clean coal portfolio standard by each party and to ensure
       compliance with the standard by each ARES. In support of its position, the staff presented
       affidavits of the following staff members: Diana Hathhorn (accountant in the Commission’s
       financial analysis division), Jennifer L. Hinman (economic analyst in the Commission’s policy
       division), Rochelle Phipps (senior financial analyst in the financial analysis division), and Jim
       Zolnierek (director of the policy division). The affidavits stated that the witnesses had personal
       knowledge of the facts and matters discussed in the response and objections, and to the best of
       their knowledge, information, and belief, the facts and nonlegal opinions expressed are
       accurate and true.
¶ 30       ComEd, however, complains that the Commission did not support its findings with
       substantial evidence because it “did not attempt to quantify or analyze in any systematic way
       the burdens” on the parties, nor did it adequately consider the burdens placed on ComEd.
       ComEd provides no authority for its position that the Commission must provide quantifiable
       findings on each evidentiary claim. It is self-evident that the administration of several sourcing
       agreements is overall less burdensome than the administration and monitoring of more than 70
       agreements. Affidavits from Commission staff support that conclusion. We find the evidence
       sufficient to support the Commission’s decision. Furthermore, ComEd does not show that the
       opposite conclusion is clearly evident. It argues only that the Commission made no finding that
       the administrative burdens avoided by the alternate approach outweigh the administrative
       burdens the approach imposes on ComEd.
¶ 31       Pursuant to the Public Utilities Act, the Commission “should act to promote the
       development of an effectively competitive electricity market that operates efficiently and is
       equitable to all consumers.” 220 ILCS 5/16-101A(d) (West 2012). By adopting the alternate
       approach, which presented a more streamlined administration of the clean coal portfolio
       standard required of the utilities and ARES, the Commission properly exercised its authority to
       formulate reasonable means of achieving legislative objectives. We find the Commission’s
       order approving the alternate approach lawful and supported by substantial evidence.
¶ 32       ICEA/IIEC make an additional argument that the Commission has no authority to impose a
       competitively neutral charge, that is not a delivery service charge, upon ARES customers.
       ComEd disagrees, arguing that if the Commission has authority to compel utilities to procure
       electricity from retrofitted clean coal facilities for ARES customers, ComEd should recover
       the costs associated with that procurement. As discussed above, the Commission’s authority to
       compel ComEd to enter into a sourcing agreement with FutureGen 2.0 derives from the Illinois
       Power Agency’s authority to develop a procurement plan for utilities that comply with the
       clean coal portfolio standard of the Illinois Power Agency Act. See 20 ILCS 3855/1-75(d)
       (West 2012). Subsection (d)(6) states that “[c]osts incurred under this subsection (d) or
       pursuant to a contract entered into under this subsection (d) shall be deemed prudently incurred
       and reasonable in amount and the electric utility shall be entitled to full cost recovery pursuant
       to the tariffs filed with the Commission.” 20 ILCS 3855/1-75(d)(6) (West 2012). Allowing
       ComEd to recover these costs from ARES customers further promotes the legislature’s intent
       to allocate the costs of supplying utility services “to those who cause the costs to be incurred.”
       220 ILCS 5/1-102(d)(iii) (West 2012). Therefore, according to the plain terms of the statute,
       ComEd is entitled to recover from ARES customers its costs of entering into the sourcing
       agreement with FutureGen 2.0 on ARES’ behalf.

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¶ 33        ComEd and ICEA/IIEC also argue that the Commission’s order violates the dormant
       commerce clause and is therefore unconstitutional. This negative component of the commerce
       clause prohibits states from enacting regulatory measures designed to benefit in-state interests
       at the expense of out-of-state competitors. New Energy Co. of Indiana v. Limbach, 486 U.S.
       269, 273-74 (1988). In other words, “state statutes that clearly discriminate against interstate
       commerce are routinely struck down [citations], unless the discrimination is demonstrably
       justified by a valid factor unrelated to economic protectionism.” Id. at 274.
¶ 34        Appellants argue that the Commission’s order is unconstitutional because it requires
       ComEd to enter into a sourcing agreement for clean-coal energy with FutureGen 2.0, an
       Illinois facility, effectively excluding from consideration out-of-state clean electric sources.
       They allege that the order also has a discriminatory effect because 70% of the rate cap imposed
       on ComEd for clean coal electricity is devoted to FutureGen 2.0’s output, “leaving little room
       for any [other competitors] to place their clean coal electricity on the Illinois market.” The
       order thus prevents customers from obtaining less costly clean coal electricity procured from
       out-of-state sources, in violation of the dormant commerce clause.
¶ 35        Before addressing these constitutional arguments on the merits, however, we first
       determine whether ICEA/IIEC and ComEd have standing to challenge the constitutionality of
       the statute. The doctrine of standing “ensure[s] that courts are deciding actual, specific
       controversies, and not abstract questions or moot issues.” In re Marriage of Rodriguez, 131 Ill.
       2d 273, 279-80 (1989). Generally, courts will not consider a constitutional challenge to a
       statutory provision unless the party challenging it is directly affected by the provision. In re
       M.I., 2013 IL 113776, ¶ 32. In other words, the party challenging the provision “must be
       directly or materially affected by the attacked provision and must be in immediate danger of
       sustaining a direct injury” from the statute’s enforcement. Id. Without evidence of facts
       showing such injury, a party does not have standing to challenge the statutory provision on the
       ground that it would be unconstitutional if applied to third parties in a hypothetical case. Id.
¶ 36        The Commission argues that ICEA/IIEC and ComEd have not shown “any evidence of
       discrimination on any similarly situated clean coal facility.” On the issue of standing to
       challenge this provision, however, the relevant question is whether ICEA/IIEC and/or ComEd
       is “directly or materially affected by the attacked provision” and “in immediate danger of
       sustaining a direct injury” from enforcement of the provision. See In re M.I., 2013 IL 113776,
       ¶ 32. In their briefs, both parties acknowledge that the injured parties directly affected by the
       provision are out-of-state facilities that would compete against FutureGen 2.0 in the
       production of clean coal electricity. See also Alliance for Clean Coal v. Miller, 44 F.3d 591,
       594 (7th Cir. 1995) (for the purpose of standing to challenge a statute that subsidized the use of
       Illinois coal over the use of western coal, the relevant injury is the inability “to compete on an
       equal footing in interstate commerce”). Neither ICEA/IIEC or ComEd claim an interest in
       producing clean coal electricity. Furthermore, neither party has shown a direct, material injury
       that would result from enforcement of the provision. In fact, the Commission has not had the
       opportunity to enforce the provision since the FutureGen 2.0 facility is not yet operable.
       Therefore, we find that ICEA/IIEC and ComEd do not have standing to challenge the
       constitutionality of the provision at this time and, accordingly, we decline to address the issue
       here.
¶ 37        For the foregoing reasons, we affirm the order of the Commission.


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¶ 38      Affirmed.

¶ 39        JUSTICE PUCINSKI, dissenting.
¶ 40        With great respect, I dissent from the opinion of the majority.
¶ 41        This is a one-word/one-phrase case. Some one-word cases require the court to determine
       what the legislature meant by a word that is undefined. Local Union Nos. 15, 51, & 702 v.
       Illinois Commerce Comm’n, 331 Ill. App. 3d 607 (5th Dist. 2002), is a good example. There
       the court, looking at the Public Utilities Act, had to decide whether the word “if” meant: “ ‘in
       the event that’ ” or on the condition that. Id. at 614-15. Either use led to dramatically different
       results. More recently, and more famously, the court has been required to decide what the
       words “ ‘reside in’ ” mean in the Illinois Municipal Code and the Election Code. Maksym v.
       Board of Election Commissioners, 242 Ill. 2d 303, 324 (2011). Some other one-word cases call
       on us to decide what a missing word means. That is, whether we should insert it, as though it
       was an oversight by the legislature to have left it out, or leave the language of the statute as
       written, and consider that the legislature had a purpose in leaving the word out when they
       passed it.
¶ 42        Here the statute in question is the Illinois Power Agency Act (20 ILCS 3855/1-75(d)(5)
       (West 2012)):
                     “(5) [Sentence 1] Re-powering and retrofitting coal-fired power plants previously
                owned by Illinois utilities to qualify as clean coal facilities. [Sentence 2] During the
                2009 procurement planning process and thereafter, the Agency and the Commission
                shall consider sourcing agreements covering electricity generated by power plants that
                were previously owned by Illinois utilities and that have been or will be converted into
                clean coal facilities, as defined by Section 1-10 of this Act. [Sentence 3] Pursuant to
                such procurement planning process, the owners of such facilities may propose to the
                Agency sourcing agreements with utilities and alternative retail electric suppliers
                required to comply with subsection (d) of this Section and item (5) of subsection (d) of
                Section 16-115 of the Public Utilities Act, covering electricity generated by such
                facilities. [Sentence 4] In the case of sourcing agreements that are power purchase
                agreements, the contract price for electricity sales shall be established on a cost of
                service basis. [Sentence 5] In the case of sourcing agreements that are contracts for
                differences, the contract price from which the reference price is subtracted shall be
                established on a cost of service basis. [Sentence 6] The Agency and the Commission
                may approve any such utility sourcing agreements that do not exceed cost-based
                benchmarks developed by the procurement administrator, in consultation with the
                Commission staff, Agency staff and the procurement monitor, subject to Commission
                review and approval.” (Emphases added.)
¶ 43        Under the plain language of sentence 2 above it is clear that FutureGen 2.0 qualifies under
       this section since it is a retrofitted coal fired power plant previously owned by an Illinois
       utility, in this case Ameren. And, with all the federal money (about $1.5 billion) coming into
       the state to develop FutureGen 2.0’s new technology, along with the dedicated property,
       equipment and plant in Meredosia, Illinois, and the pipeline and storage/sequestration facility
       for the carbon dioxide at the Mt. Sinai formation in Morgan County, it is clear that the state’s
       policy makers have decided that FutureGen 2.0 qualifies–at least in theory–as a clean coal
       facility as defined by section 1-10 of the Illinois Power Agency Act. Of course it is not up and

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       running yet and will not be until 2017, and then the energy it produces will be more expensive
       than other clean coal facility energy, because our legislature has also decided that “all coal
       used by a clean coal facility shall have high volatile bituminous rank and greater than 1.7
       pounds of sulfur per million btu content,” a restriction which favors Illinois coal. 20 ILCS
       3855/1-10 (West 2012). Further, the record and statements at oral argument make it clear that
       FutureGen 2.0 cannot even continue its development without the sourcing agreements at issue
       in place because without a guaranteed revenue stream–these sourcing agreements–it cannot
       attract future investment in the project.
¶ 44        Sentence 3 mandates the Illinois Power Agency and the Commission “shall” consider
       sourcing agreements from such plants, and since FutureGen 2.0 is the only one like it, it is
       pretty clear that the Illinois Power Agency and the Commission shall at least give sourcing
       agreements with FutureGen 2.0 some consideration, but note the statute does not require that
       the sourcing agreement be accepted, just that it shall be considered, the kind of waffling that
       leaves all the discretion to the Illinois Power Agency and the Commission, and neatly takes the
       legislature off the hook in case someone complains that just maybe this is a restraint of trade
       issue.
¶ 45        Sentence 4 gives the owners of the facilities, in this case FutureGen 2.0, the opportunity to
       propose sourcing agreements to the Illinois Power Agency for both utilities and ARES, but
       only the opportunity to propose the agreements, not any guarantee that the sourcing
       agreements must be accepted.
¶ 46        The rub comes at sentence 6, which says the “Agency and the Commission may approve
       any such utility sourcing agreements” but totally ignores whether the Illinois Power Agency
       and the Commission may also approve such sourcing agreements for ARES. (Emphasis
       added.) 20 ILCS 3855/1-75(d)(5) (West 2012).
¶ 47        The FutureGen 2.0 and Commission briefs want us to insert the phrase: “and alternative
       retail electric suppliers” to sentence 6, so that it would read: the “Agency and the Commission
       may approve such utility and alternative retail electric suppliers sourcing agreements.”
       (Emphasis added.)
¶ 48        Clearly the Illinois Power Agency staff thinks so too, or they would not have proposed the
       FutureGen 2.0 sourcing agreements for ARES, but adding those words has a complicated
       result in that it frustrates the reason the legislature passed another statute, the Rate Relief Law,
       which at section 16-101A(d) calls on the Commission to “act to promote the development of an
       effectively competitive electricity market that operates efficiently and is equitable to all
       consumers” thereby committing this state to a system that is both equitable and competitive.
       220 ILCS 5/16-101A(d) (West 2012).
¶ 49        While it is true that the plan approved by the Commission is equitable to all customers in
       the sense that every customer of every electricity supplier in Illinois will share in the higher
       cost of the FutureGen 2.0 electricity, so the burden is spread around, that is because only clean
       coal facilities that burn the kind of coal we have in abundance in Illinois qualify as clean coal
       suppliers to either utilities or ARES. Coincidentally, FutureGen 2.0 is the only one in existence
       anywhere identified in the record that burns that kind of coal.
¶ 50        However, it is also true that the FutureGen 2.0 energy will be more expensive than other
       clean coal facility electricity that is generated without the particular problems associated with
       Illinois coal thus frustrating the competitive purpose of the Customer Choice Act.


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¶ 51        All of this is further complicated by the approval by the Commission of the Illinois Power
       Agency’s staff recommendation to require ComEd and Ameren (not a party to this appeal) to
       actually do the sourcing agreements on behalf of all ARES. ComEd reasonably wonders under
       what authority the Commission requires it, a regulated utility, to enter into contracts on behalf
       of private sector ARES, even though the Commission has neatly provided a way for ComEd to
       recoup its costs of doing so.
¶ 52        The Commission says it can do this because it has the authority to do those things
       necessary to implement its mandates. However, the Commission has not provided any statute
       to this court demonstrating that there is a mandate, that it has the authority, or that the state has
       a public policy to guarantee 100% of FutureGen 2.0’s output for the next 20 years in
       noncompetitive contracts, let alone by ComEd for the benefit of ARES customers.
¶ 53        I would reverse the order of the Commission and let the legislature work to make sure that
       all the interrelated, overlapping and conflicting laws and public policies are reconciled.
¶ 54        As an alternative, and as suggested by the Illinois Power Agency, the Commission should
       at the very least engage in its rulemaking process to fully develop the set of rules that would
       permit this level of regulatory agency sleight-of-hand.




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