|
Server : Apache/2.4.62 System : FreeBSD fbsdweb2.web.rcn.net 14.1-RELEASE FreeBSD 14.1-RELEASE releng/14.1-n267679-10e31f0946d8 GENERIC amd64 User : www ( 80) PHP Version : 8.3.8 Disable Function : NONE Directory : /domains/enrgy/statelin/ |
Upload File : |
<html>
<head>
<title>August 2002: Illinois Court Interprets Reciprocity Provision of Consumer
Choice Law</title>
</head>
<body style="font-family: Arial" vlink="#808080">
<div align="center"><center>
<table border="0" cellpadding="8" cellspacing="0" width="98%" bgcolor="#000000">
<tr>
<td width="100%" valign="middle"><a name="top"></a>
<img src="../images/pmamagsm.gif" alt="PMA Online Magazine" border="0" align="right" width="229" height="100"></td>
</tr>
</table>
</center></div><div align="left">
<table border="0" cellpadding="8" width="100%" style="border-collapse: collapse" bordercolor="#111111" cellspacing="0">
<tr>
<td width="15%" valign="top" align="center">
<!--webbot bot="Include" U-Include="sl_sidebar.htm" TAG="BODY" startspan -->
<table border="2" cellpadding="8" width="15%" id="table1" bordercolor="#FFFF00" bgcolor="#C0C0C0">
<tr>
<td width="100%" valign="top" align="center"><map name="FPMap0_I1">
<area href="http://www.powermarketers.com/adrates.html" shape="rect" coords="14, 297, 97, 322">
<area href="http://www.powermarketers.com/pmajobs.htm" shape="rect" coords="11, 230, 95, 257">
<area href="http://www.powermarketers.com/main.htm" target="_parent" shape="rect" coords="12, 163, 96, 189">
<area href="http://www.powermarketers.com/power2.htm" target="_blank" shape="rect" coords="12, 95, 96, 121">
<area href="../pmamag.htm" shape="rect" coords="11, 29, 96, 54"></map><img rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" usemap="#FPMap0_I1" width="110" height="350"><p><a href="../searchpma.htm"><img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p><a href="#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></td>
</tr>
</table>
<!--webbot bot="Include" i-checksum="45188" endspan --></td>
<td width="71%" valign="top">
<img src="../images/statelin.gif" alt="STATELINE by Robert Olson" border="0" width="375" height="75">
</center><p align="left"><b><u><br>
August 2002</u>
<br>
</b><font size="6">Illinois Court Interprets
Reciprocity Provision of
Consumer Choice Law<br>
</font><strong>by Robert Olson -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
200</em>2/11/26)</font></p>
<center>
</p>
<font SIZE="3">
</font>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<p ALIGN="JUSTIFY">The Appellate Court of Illinois, Fifth District, recently
construed the scope of the reciprocity provision of the Illinois Electric
Service Customer Choice and Rate Relief Law of 1997, 220 ILCS 5/16-101 et
seq. ("Customer Choice Law"). See Local Union Nos. 15, 51, and 702,
International Brotherhood of Electrical Workers v. The Illinois Commerce
Commission and WPS Energy Services, Inc., and Blackhawk Energy Services,
L.L.C., No. 5-01-0416 (Ill. App. Ct., 5th District, June 20, 2002).
Generally, in this context, "reciprocity" is the concept under which an
entity may market competitive power in the state if the entity is based in a
state that also allows such sales. As construed by the court, the Customer
Choice Law prevents the competitive retail sale of electricity in Illinois
by electricity suppliers that are themselves, or are affiliated with, or
obtain their electricity primarily from, utilities located in jurisdictions
that do not allow competition in the sale of electricity, or to which
Illinois utilities are not otherwise physically or economically able to sell
electricity. The Illinois Commerce Commission ("ICC") and WPS Energy
Services, Inc. ("WPS") have each filed separate petitions for leave to
appeal the lower court’s decision to the Illinois Supreme Court.</p>
<font SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">The case arose from an application by WPS for a
certificate of service authority to operate as an alternative retail
electric supplier ("ARES") in Illinois. The application sought to establish
that WPS was in compliance with the reciprocity requirements of Section
16-115(d)(5), which states in pertinent part as follows:</p>
<font SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<dir>
<dir>
<p ALIGN="JUSTIFY">(d) The [ICC] shall grant the application for a
certificate of service authority if it makes the findings set forth in
this subsection . . . :</p>
<p ALIGN="JUSTIFY">. . . .</p>
</dir>
</dir>
<font SIZE="2">
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"></p>
</font>
<dir>
<dir>
<p ALIGN="JUSTIFY">(5) That if the applicant, its corporate affiliates
or the applicant’s principal source of electricity (to the extent such
source is known at the time of the application) owns or controls
facilities, for public use, for the transmission or distribution of
electricity to end-users within a defined geographic area to which
electric power and energy can be physically and economically delivered
by the electric utility or utilities in whose service area or areas the
proposed service will be offered, the applicant, its corporate
affiliates or principal source of electricity, as the case may be,
provides delivery services to the electric utility or utilities in whose
service area or areas the proposed service will be offered that are
reasonably comparable to those offered by the electric utility, and
provided further, that the applicant agrees to certify annually to the
Commission that it is continuing to provide such delivery services and
that it has not knowingly assisted any person or entity to avoid the
requirements of this Section . . . </p>
<font SIZE="2">
<p ALIGN="JUSTIFY"></p>
</dir>
</dir>
</font>
<p ALIGN="JUSTIFY">As stated in the court’s opinion, WPS acknowledged that
the purpose of the reciprocity provision "was to ensure that those Illinois
utilities that have opened their service areas to competition have
comparable rights to compete in the service areas controlled by utility
affiliates of an ARES applicant." The service areas of WPS’s affiliates in
Wisconsin and Michigan were not open to competition at the time of the
application. WPS argued, however, that under the plain language of the
reciprocity provision, the reciprocity requirement did not apply because the
affected Illinois utilities could not "economically and physically deliver"
electricity to the service areas of WPS’s affiliates. </p>
<font SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">Local Union Nos. 15, 51, and 702, International
Brotherhood of Electrical Workers intervened in the proceedings before the
ICC and argued to the contrary, claiming that the reciprocity provision
actually requires the applicant to affirmatively establish both that
electricity can be "physically and economically delivered" by affected
Illinois utilities and that "the necessary political and administrative
actions have been taken in the applicant’s or its affiliates’ jurisdiction
to physically permit the delivery of such electricity by Illinois utilities
to end-users in the applicant’s or its affiliates’ service areas." Under the
intervenors’ interpretation, WPS was non-compliant with the reciprocity
provision in both respects – the affected Illinois utilities could not
physically or economically deliver power to the applicable states, nor had
the necessary political or administrative action been taken to allow the
Illinois utilities to compete in those jurisdictions. </p>
<font SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">The ICC rejected the intervenors’ argument and granted
WPS’s application. The intervenors then appealed to the Appellate Court of
Illinois, Fifth District. The court ruled in favor of the intervenors. The
court found that the Statute was facially ambiguous, and therefore
considered evidence of the underlying legislative intent. The court
concluded that the intervenors’ interpretation was more consistent with the
legislative intent to prevent new market entrants from taking unreasonable
advantage of existing utilities than was the interpretation advanced by the
ICC and WPS. </p>
<font SIZE="2">
<p ALIGN="JUSTIFY"></p>
</font>
<p ALIGN="JUSTIFY">Based on the court’s decision, it appears that a
prospective retail supplier of electricity to customers in Illinois may have
to demonstrate that any affected Illinois utility is physically,
economically and politically able to sell electricity in any applicable
service area of the prospective supplier, its affiliates and its principal
source of electricity. The ICC and WPS filed their petitions for leave to
appeal to the Illinois Supreme Court on July 25, 2002. </p>
<!--webbot bot="Include" u-include="sl_bottom.htm" tag="BODY" startspan -->
<hr color="#FFFF00">
<blockquote>
<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
<!--webbot bot="Include" i-checksum="27861" endspan --><center>
<center>
<center>
<center>
<center>
<center>
<hr color="#FFFF00">
</td>
</tr>
</table>
</div>
<p align="center"><a href="#top">
<img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></p>
</body>
</html>