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About The Author:

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:

Brown, Olson & Gould, PC
2 Delta Drive
Suite 301
Concord, NH 03301
 rolson@bowlaw.com
(603) 225-9716

 

 

 

 

 

 

 

 

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STATELINE by Robert Olson


January 2003
Illinois Competitive Service Declaration Takes Effect by Operation of Law
by Robert Olson  --   Brown, Olson and Wilson, P.C.
(originally published by PMA OnLine Magazine: 2003/06/14)

The Illinois Commerce Commission (the "ICC") declined to approve or deny, within applicable time limits, Commonwealth Edison Company’s ("ComEd") petition for a declaration that the tariffed provision of electric service to the 3MW or greater customer segment (the "Service") is now a "competitive service" under Section 16-113 of the Illinois Public Utilities Act (20 ILCS 5/16-113). See Petition for Declaration of Competitive Service, No. 02-0479 (ICC November 14, 2002) (interim order). As a result, the Service has been declared competitive by operation of law, subject to the possibility of a subsequent ICC determination that the Service is not competitive. The effect of the declaration is that customers currently receiving the Service at rates prescribed by tariff may continue to take Service at those rates for three years measured from June 2003, but new customers and existing customers who are not presently subject to the applicable tariff, will not be eligible for service under the prescribed rates after June 2003.

Section 16-113 of the Act is part of Illinois’ statutory scheme to transition to a competitive energy market. It permits an electric utility to petition the ICC for a declaration that a tariffed service provided by the utility is a competitive service. Following such a declaration, Section 16-113 generally entitles a customer who is taking the tariffed service to continue to receive the service from the utility on a tariffed basis for three years. The ICC is to declare a service to be competitive as to an "identifiable customer segment or group of customers, or some clearly defined geographical area" within the utility’s service area, "if the service or a reasonably equivalent substitute service is reasonably available . . . at a comparable price from one or more providers" other than the utility or an affiliate of the utility, and the utility "has lost or there is a reasonable likelihood that the electric utility will lose business for the service to the other provider or providers." In making its determination, the ICC must also consider whether there is "adequate transmission capacity" to make electric service available from the other provider or providers.

In its interim order on ComEd’s petition, the ICC generally found that ComEd had satisfied the statutory criteria and stated that competitive conditions "exist in considerable degree." The ICC acknowledged, however, that "current competitive conditions may be tenuous," and in recognition of the arguments of numerous intervenors concerning the possibility of a future decrease in competition, the ICC declined to affirmatively grant ComEd’s petition, and instead allowed the competitive service declaration to take effect by operation of law. Under Section 16-113 of the Act, a competitive service declaration is deemed granted if the ICC fails to act within 120 days of the filing of the petition, provided that the ICC is not precluded from making a contrary determination in a subsequent determination. In its interim order on ComEd’s petition, the ICC initiated a proceeding to monitor the development of the marketplace for the affected customer segment to form the basis for a possible future ICC declaration that the Service either is or is not competitive. Section 16-113 does not prescribe a time limit within which any such subsequent determination must be made. If the ICC were to declare that the Service is not competitive, Section 16-113 would permit ComEd to file another petition six (6) months later.


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:

Brown, Olson & Gould, PC
2 Delta Drive, Suite 301
Concord, NH 03301

rolson@bowlaw.com | (603) 225-9716

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