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Illinois Commerce Commission Finds Statute Only Allows Single POR Discount Rate
August 19, 2011
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Statute permits only a single Purchase of Receivables discount rate, the Illinois Commerce Commission concluded in an order on rehearing regarding Commonwealth Edison's POR program.
As first reported by Matters yesterday (8/18), the ICC found that the blended uncollectibles discount component shall continue to be used in ComEd's POR program, rather than separate, class-specific uncollectible factors.
Aside from policy reasons, the ICC affirmed that this result was compelled by the POR statute.
"[W]e conclude that the language in Section 16-118(c) of the Public Utilities Act, in its current form, does not permit this Commission to devise more than one 'rate' for POR services," the ICC held.
Specifically, the ICC noted that the statute governing the rate to be charged for POR services uses the word "rate" (singular) at least four times. "This is in contrast to other portions of the Public Utilities Act which, in general, use the word 'rates,'" the ICC said.
"The primary rule of statutory construction is to ascertain and give effect to the intent of the General Assembly. When construing a statute, this Commission must look to the plain meaning of the statutory provision. We cannot depart from the plain meaning in a statute by reading into it exceptions, limitations, or conditions that conflict with the express legislative intent," the ICC said.
"Section 16-118(c) of the Public Utilities Act provides, in four places, that a 'rate' shall be formed, not 'rates.' In English, the 's' on the end of a word connotes plurality. Absent that 's,' we cannot presume that the General Assembly intended to allow the existence of more than one 'rate' for POR services," the ICC concluded.
While the Retail Energy Supply Association and Illinois Competitive Energy Association, on exceptions, cited precedent for singulars to be read as plurals for purposes of statutory construction, the ICC dismissed this argument, stating that such construction shall only be applied when the plan language of the statute is not clear.
"Here, in the context of public utility regulation, the word 'rate' is a legal term of art. As was mentioned above, the statutes governing 'rates' of other types of utilities in the Public Utilities Act use the word 'rates' in the plural form. The treatises/case law that RESA/ICEA cite do not require this Commission to abandon what is written in a statute. In fact, they state the opposite, as, in essence, that a statute must be construed according to its plain meaning, unless the meaning cannot be derived from the statute. That is not the case here," the ICC said.
"The language in Section 16-118(c) provides, in four different locations, that a 'rate' shall be formed. We cannot conclude that the absence of plurality in the statute is accidental," the ICC continued, citing several court cases establishing that singular terms shall not be read as plural when interpreting statutes if the plain meaning is already clear.
While the ICC found that only a single rate for POR may be established, the Commission said that this conclusion does not impact its prior finding allowing the use of a flat, 50 cents per-bill charge for POR in addition to the blended uncollectibles discount.
The 50 cents charge was not subject to rehearing, but is being appealed at the courts by Dominion Retail. Staff had raised concern that concluding that the statute only permits a single discount rate would complicate defense of the 50 cents per-bill charge, since a flat charge results in an infinite number of "effective" discount rates, depending on usage.
The ICC said that, "there are no statutory limitations upon the manner in which a 'rate' is formed. (e.g., whether it is based upon a percentage, or, a flat charge for services, irrespective of the amount of services.). In fact, many charges that are subject to Commission review as 'rates' can be flat fees, (e.g., meter charges, charges for energy efficiency programs) like the $0.50 charge. Therefore, the statutory limitations regarding charging a single rate in Section 16-118(c) do not concern the $0.50 charge. The charges for uncollectibles, in contrast, would have two entirely separate numerical amounts, if they were not blended. The statute governing how to impose a 'rate,' speaks of a 'rate' in the singular, four times. We see a logical distinction between imposition of the $0.50 charge, to all customers, and imposing two separate charges," the ICC explained.
The Commission said that, "[w]e also recognize that ComEd's PORCB program will, in all likelihood, continue for many years in the future. This Commission is not adverse to revisiting the issue of an uncollectible rate for all of ComEd's PORCB customers, at some point in time in the future."
However, given that the Commission ruled that a single discount rate is compelled by statute, and not only current policy reasons, it would appear that the Commission could only revisit the single discount rate issue if it reverses its statutory interpretation as contained in the instant order (or, obviously, if the statute changes).
As for the ICC's policy reasons for adopting a blended uncollectibles rate, they generally followed those cited by an ALJ in a proposed order (see 7/21 for discussion)
Moreover, the ICC said that parties supporting class-specific uncollectibles factors, "did not present evidence establishing that a blended rate would harm competition."
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