Commonwealth Edison Co. v. Illinois Commerce Comm'n

Illinois Official Reports

Appellate Court

Commonwealth Edison Co. v. Illinois Commerce Comm’n,
2014 IL App (1st) 130302

Appellate Court COMMONWEALTH EDISON COMPANY, Petitioner, v. ILLINOIS
Caption COMMERCE COMMISSION; THE PEOPLE OF THE STATE OF
ILLINOIS ex rel. THE ATTORNEY GENERAL OF THE STATE
OF ILLINOIS; AARP; BUILDING OWNERS AND MANAGERS
ASSOCIATION OF CHICAGO; CITIZENS UTILITY BOARD;
CITY OF CHICAGO, Respondents.

District & No. First District, Third Division
Docket Nos. 1-13-0302, 1-13-0493 cons.

Filed June 30, 2014
Rehearing denied September 15, 2014

Held In the consolidated review of the Illinois Commerce Commission’s
(Note: This syllabus rulings in petitioner’s statutory rate update and reconciliation case for
constitutes no part of the 2012, the appellate court found that petitioner failed to meet its burden
opinion of the court but of showing any error in the contested rulings by the Commission or
has been prepared by the the denial of 2011 Rate Case expenses, and the legal issues with
Reporter of Decisions respect to the billing determinants and cost allocation were resolved in
for the convenience of the 2011 Rate Case, which constituted a collateral estoppel bar to
the reader.) relitigation.

Decision Under Petition for review of orders of Illinois Commerce Commission, No.
Review 12-0321.

Judgment Affirmed.
 Counsel on Barry Levenstam, of Jenner & Block LLP, and E. Glenn Rippie, of
Appeal Rooney Rippie & Ratnaswamy LLP, both of Chicago, and David W.
DeBruin and Matthew E. Price, both of Jenner & Block LLP, of
Washington, D.C., for petitioner.

Lisa Madigan, Attorney General, of Chicago (John P. Kelliher and
Thomas R. Stanton, Special Assistant Attorneys General, of counsel),
for respondent Illinois Commerce Commission.

No brief filed for respondent Citizens Utility Board.

Panel JUSTICE PUCINSKI delivered the judgment of the court, with
opinion.
Justices Hyman and Mason concurred in the judgment and opinion.

OPINION

¶1 This is a consolidated case for review of the rulings of the Illinois Commerce Commission
(Commission) in Commonwealth Edison’s (ComEd) 2012 statutory rate update and
reconciliation case (2012 Rate Case), applying section 16-108.5 of the Public Utilities Act,
commonly known as the Energy Infrastructure Modernization Act (220 ILCS 5/16-108.5
(West 2012)), which amended the Public Utilities Act (220 ILCS 5/1-101 et seq. (West 2012)).
ComEd seeks review of three issues in the 2012 rate update order: (1) the billing determinants;
(2) the allocation of certain common costs that ComEd incurs in connection with its interstate
transmission service and its local delivery service; and (3) the denial of most of ComEd’s 2011
rate case attorney fees and expenses as costs. ComEd argues that the Commission’s errors on
these issues, taken together, prevent ComEd from recovering millions of dollars in its actual
costs to provide electric service to its customers. We hold ComEd has failed to sustain its
burden on appeal of establishing error by the Commission.

¶2 BACKGROUND
¶3 The Public Utilities Act, as amended, permits electric utilities to use a “performance-based
formula” (220 ILCS 5/16-108.5(b) (West 2012)) to set rates for delivery of the electricity they
sell. Under section 16-108 of the Electric Service Customer Choice and Rate Relief Law of
1997, a utility is required to file a delivery services tariff (DST) with the Commission at least
210 days prior to the date on which the utility is to begin supplying such services. 220 ILCS
5/16-108(a) (West 2012). The Commission is then required to enter an order approving or
approving as modified the utility’s DST no later than 30 days prior to the date on which the
utility is to begin supplying such services. 220 ILCS 5/16-108(b) (West 2012).

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¶4 In 2011, the legislature enacted the Energy Infrastructure Modernization Act, which is
section 16-108.5 of the Public Utilities Act (220 ILCS 5/16-108.5 (West 2012)), to stimulate
new investments by utilities in the State’s energy infrastructure. The Act provides for
guaranteed payment of utilities’ costs and a rate of return for its investments in infrastructure.
“A public utility is entitled both to recover in its rates certain operating costs and to earn a
return on its rate base (i.e., the amount of its invested capital).” Commonwealth Edison Co. v.
Illinois Commerce Comm’n, 322 Ill. App. 3d 846, 849 (2001) (citing Citizens Utilities Co. of
Illinois v. Illinois Commerce Comm’n, 124 Ill. 2d 195, 200 (1988)).
¶5 In exchange for this legislative guarantee of payment, the utility must commit to making
very substantial investments in updating and improving its facilities, and in hiring new
employees. 220 ILCS 5/16-108.5(b) (West 2012). A public utility’s participation in the Act is
voluntary. 220 ILCS 5/16-108.5(b) (West 2012). ComEd is a participating utility and
committed to invest an estimated $2.6 billion in infrastructure on top of its normal annual
capital investment program over the next ten years. 220 ILCS 5/16-108.5(b)(2) (West 2012).
Under the Act the formula to establish rates enables ComEd to make planned substantial
investment increases in its capital commitment by providing it with greater certainty of timely
cost recovery than it would have received under previous rates.
¶6 To understand the issues in this case, it is necessary to first explain the Act’s formula and
define certain terms used under the Act and in rate-setting generally. We therefore explain
these terms and then we summarize the procedural history and rulings in the 2011 rate case,
which is the first rate case under the Act, as well as the issues now presented in this case, before
providing our analysis and holding. We explain the revenue requirement formula and explain
the terms common cost “allocation,” “billing determinants,” and “rate case expenses.” The
issues presented in this case regarding the Commission’s 2012 rate update order concern
billing determinants, allocation, and rate case expenses.

¶7 Revenue Requirement Formula
¶8 The Act sets forth a performance-based formula to set a rate for electricity delivery
services. See 220 ILCS 5/16-108.5(b) (West 2012). “The components of the revenue
requirement have frequently been expressed in the formula ‘R (revenue requirement) = C
(operating costs) + Ir (invested capital or rate base times rate of return on capital).’ ” Business
& Professional People for the Public Interest v. Illinois Commerce Comm’n, 146 Ill. 2d 175,
195 (1991) (quoting Citizens Utilities Co. of Illinois v. Illinois Commerce Comm’n, 124 Ill. 2d
195, 200-01 (1988)).
¶9 In establishing the rates that a public utility can charge its customers, the Commission
considers the company’s operating costs, rate base, and allowed rate of return. Commonwealth
Edison Co. v. Illinois Commerce Comm’n, 322 Ill. App. 3d 846, 849 (2001) (citing Citizens
Utilities Co. of Illinois, 124 Ill. 2d at 200).
¶ 10 In this formula the cost of capital equals the rate base times the rate of return on capital.
Commonwealth Edison Co. v. Illinois Commerce Comm’n, 2014 IL App (1st) 122860, ¶ 3
(citing Business & Professional People for the Public Interest v. Illinois Commerce Comm’n,
146 Ill. 2d 175, 195 (1991)). The rate base is defined as the total value of all invested capital.
Id. Invested capital includes investments in projected plant additions. The Commission
practice in rate proceedings is to make adjustments to account for the effects of pro forma
projected plant additions to the rate base.

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¶ 11 “The rate of return is typically established with reference to what would be a reasonable
return on the present value of a utility’s property.” Commonwealth Edison Co. v. Illinois
Commerce Comm’n, 398 Ill. App. 3d 510, 515 (2009) (citing Villages of Milford v. Illinois
Commerce Comm’n, 20 Ill. 2d 556, 562 (1960)). “The return is the product of the allowed rate
of return and the rate base.” Commonwealth Edison Co., 322 Ill. App. 3d at 849 (citing Citizens
Utilities Co., 124 Ill. 2d at 200). The company’s revenue requirement comprises the sum of
operating costs and the return on the rate base. Id.

¶ 12 Costs
¶ 13 The Act provides that participating utilities recover their prudent and reasonable “actual
costs of delivery services.” 220 ILCS 5/16-108.5(c)(1) (West 2012). These are the “operating
costs” part of the revenue requirement formula.
¶ 14 The Act specifies many of the “cost components” that form the basis of the rate, including
the “costs of delivery services that are prudently incurred and reasonable in amount consistent
with Commission practice and law,” year-end capital structure, cost of equity, incentive
compensation expense, 1 and pension and other post-employment benefits expense and
severance costs. 220 ILCS 5/16-108.5(c) (West 2012). Generally, a utility’s costs are
recoverable if they are reasonable and prudent. Commonwealth Edison Co. v. Illinois
Commerce Comm’n, 398 Ill. App. 3d 510, 516 (2009) (citing Business & Professional People
for the Public Interest, 146 Ill. 2d at 247). “[T]o be recoverable, in addition to being reasonable
and prudent, a cost must also pertain to operations or service delivery ***.” Commonwealth
Edison Co. v. Illinois Commerce Comm’n, 398 Ill. App. 3d 510, 516 (2009).
¶ 15 The Act provides that a utility’s costs shall include the “final data based on [the utility’s]
most recently filed [Federal Energy Regulatory Commission] FERC Form 1.” 220 ILCS
5/16-108.5(c) (West 2012). The FERC regulates and has exclusive jurisdiction of interstate
transmission of electricity, and it sets rates for the interstate transmission. See 16 U.S.C. § 824
(b)(1) (2012). The FERC Form 1 is an annual report filed by major private utilities with the
FERC. Thus, the Commission bases a utility’s costs, in part, on the “final historical data” of
“the actual costs for the prior rate year” on the FERC Form 1. 220 ILCS 5/16-108.5(d)(1)
(West 2012).
¶ 16 The Act requires that the rate formula “shall specify the cost components that form the
basis of the rate charged to customers with sufficient specificity to operate in a standardized
manner and be updated annually with transparent information that reflects the utility’s actual
costs to be recovered during the applicable rate year.” 220 ILCS 5/16-108.5(c) (West 2012).
The charges are to be “just and reasonable and shall take into account customer impacts.” 220
ILCS 5/16-108(d) (West 2012).

¶ 17 Allocation
¶ 18 ComEd uses its power lines to both distribute power to customers within Illinois and also
to transmit electricity across state lines. Thus, its operating costs include costs that are common

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We do not discuss the “recovery of incentive compensation expense that is based on the
achievement of operational metrics” (220 ILCS 5/16-108.5(c)(4)(A) (West 2012)), as ComEd
withdrew its appeal of the Commission’s ruling concerning this component of cost.

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 to both intrastate and interstate delivery of electricity. Common costs are costs that ComEd
incurs for things that serve both interstate transmission and intrastate distribution, such as
expenses for what are called “general plant” costs (e.g., land, buildings, equipment and tools)
and “intangible plant” costs (e.g., incorporation and franchise fees), and real estate taxes. The
interstate component is referred to as interstate “transmission” and the intrastate component is
referred to as intrastate “distribution.” The FERC regulates and has exclusive jurisdiction of
interstate transmission of electricity (16 U.S.C. § 824(b)(1) (2012)), while the Commission
regulates and has exclusive jurisdiction of intrastate distribution.
¶ 19 When ComEd incurs costs that relate to both its interstate transmission and intrastate
distribution services, those costs must be “allocated” or “functionalized,” 2 meaning
apportioned, between interstate transmission and intrastate distribution. These common costs
must be allocated between federal and state costs so that an appropriate portion of each
common cost is assigned to each jurisdiction to allow the regulator to set rates. Section
16-108.5(c)(4) directs the Commission to set protocols “for the allocation of common costs”
using its traditional article IX general ratemaking authority. 220 ILCS 5/16-108.5(c)(4)(I)
(West 2012). The Commission historically has exercised broad discretion in allocating
common costs.
¶ 20 ComEd argues on appeal in this case that unless the federal and state costs are allocated
using the same methodologies, some of the costs it incurs will not be allocated to either the
federal jurisdiction (FERC) or the state jurisdiction (Commission), and therefore these costs
will be unrecoverable from either the federal rate or the state rate. ComEd refers to such
allegedly unrecoverable costs as “trapped” costs. There is, however, no requirement under
either the Act or federal statute or regulations that the FERC and the Commission use the same
methodologies in allocating costs.

¶ 21 Billing Determinants
¶ 22 Billing determinants are not “costs” that ComEd has incurred; rather, they are measures of
the quantity of customer demand for service used to set rates that will allow a utility to recover
its revenue requirement. Once a utility establishes its revenue requirement, the utility must
then spread the revenue requirement to several established classes of ratepayers, and set rates,
based on historical data, that the utility expects to generate its required revenue.
Commonwealth Edison Co., 2014 IL App (1st) 122860, ¶ 3. To set the rates that would allow
ComEd to recover its revenue requirement, the Commission must calculate the quantity of
ComEd’s services that customers will demand. A utility’s revenues are a function of both unit
rates, which is the price per kilowatt hour (kWh) of electricity delivered, and the quantity of
services used (both the number of customers and the volume of kWh delivered to them). The
greater the demand for and use of electricity, the lower the unit prices need to be in order for
ComEd to realize its revenue requirement.
¶ 23 The Act specifically requires that as part of providing for the recovery of a utility’s actual
costs of delivery services, the Commission shall “[p]ermit and set forth protocols, subject to a
determination of prudence and reasonableness consistent with Commission practice and law”
for “historical weather normalized billing determinants.” 220 ILCS 5/16-108.5(c)(4)(H) (West

2
ComEd uses the terms “allocation” and “functionalization” and “allocating” and “functionalizing”
interchangeably.

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 2012). Weather normalization is the process of accounting for any deviation between the
historic year’s temperature and normal temperatures.
¶ 24 Other billing determinants may be used to measure the quantity of customer demand,
including new customer growth as the result of plant additions. The Commission is not limited
to considering only “historical weather normalized billing determinants.” Rather, the Act
provides that the performance-based formula rate approved by the Commission shall
“[p]rovide for the recovery of the utility’s actual costs of delivery services that are prudently
incurred and reasonable in amount consistent with Commission practice and law.” 220 ILCS
5/16-108.5(c)(1) (West 2012). The Act is permissive in providing that the Commission shall
“[p]ermit and set forth protocols” (emphasis added) for the historical weather normalized
billing determinants. 220 ILCS 5/16-108.5(c)(4)(H) (West 2012). The Act does not limit
billing determinants to only historical weather normalization.

¶ 25 Rate Case Expenses
¶ 26 Under the Act, the formula also includes as one of the cost components the “recovery of the
expenses related to the Commission proceeding *** to approve th[e] performance-based
formula rate” (220 ILCS 5/16-108.5(c)(4)(E) (West 2012)). The Act was amended, effective
July 10, 2009, to add a provision specifically governing consideration of attorney fees and
expert expenses as part of a utility’s cost. See Pub. Act 96-33, § 10 (eff. July 10, 2009). Section
9-229 of the Act now requires that the Commission “specifically assess the justness and
reasonableness of any amount expended by a public utility to compensate attorneys or
technical experts to prepare and litigate a general rate case filing.” 220 ILCS 5/9-229 (West
2012).

¶ 27 2011 Rate Case
¶ 28 “A rate case is started when a utility *** ‘files tariffs providing for a rate increase and the
Commission suspends those tariffs to conduct an investigation and hearing.’ ” People ex rel.
Madigan v. Illinois Commerce Comm’n, 2011 IL App (1st) 101776, ¶ 11 (quoting
Commonwealth Edison Co. v. Illinois Commerce Comm’n, 405 Ill. App. 3d 389, 394 (2010)).
“The Commission may approve, reject, or modify the proposed tariffs. Section 9-201(c) of the
Act provides that, if the Commission initiates a proceeding concerning the appropriateness of a
utility’s proposed rates, the utility has the burden of proving that the proposed rates are just and
reasonable.” Commonwealth Edison, 405 Ill. App. 3d at 394; see also 220 ILCS 5/9-201(c)
(West 2010).
¶ 29 In 2011, ComEd chose to file a new rate tariff under the performance-based formula in the
Act. The Illinois Attorney General, the American Association of Retired Persons (AARP) and
the Citizens Utility Board (CUB) opposed parts of the proposed rate tariff and were allowed to
intervene. The disputed issues centered on the reconciliation process, in particular about when
to include new capital additions in the rate base and how much interest ratepayers should pay
on the reconciliation amount. The Attorney General, AARP and CUB proposed an upward
adjustment to ComEd’s year-end 2010 billing determinants to account for the effect on billing
determinants of customer growth from ComEd’s inclusion of the new business component of
its 2011 projected plant additions in rate base.

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¶ 30 The Commission established the formula in the 2011 Rate Case. Commonwealth Edison
Co., Ill. Com. Comm’n, Docket 11-0721 (Order May 29, 2012) (hereinafter, 2011 Rate Case).
The Commission adopted ComEd’s proposed protocols for weather normalized billing
determinants. These protocols are the variables, models, and methodologies ComEd uses to
modify certain billing determinants to reduce the impact of abnormal weather. The
Commission has generally accepted ComEd’s weather normalization protocols and did so in
the 2011 Rate Case order. Commonwealth Edison Co., Ill. Com. Comm’n, Docket 11-0721
(Order May 29, 2012).
¶ 31 The Commission, however, concluded that ComEd’s proposed rate failed to adjust the
billing determinants to account for the effect of ComEd’s 2011 projected new business plant
additions on customer growth, which would allow for the recovery of more than the actual
costs of delivery services, in contravention of section 16-108.5(c)(4)(1). The Commission
found the Attorney General, AARP, CUB and its staff’s proposal reasonable to ensure accurate
billing determinants and permit ComEd to recover no more in revenue than that to which it is
entitled under its revenue requirement. The Commission agreed that without an appropriate
adjustment to the billing determinants to include new customer growth, ComEd would
consistently earn more in revenue than its revenue requirement.
¶ 32 The Commission considered evidence and argument regarding a decline in kWh sales but
rejected ComEd’s argument to take into account this change in usage. The Commission
concluded in its 2011 Rate Case order:
“[A] decline in [kWh] sales, in and of itself, does not establish that there are less
customers. It simply means that less electricity was sold. Other factors, such as energy
efficiency, a bad economy, etc. may very well contribute to a decline in [kWh] sales.
Without information as to what causes a decline in [kWh] sales, it does not appear that
this decline should offset the increase in billing determinants that reflects ComEd’s
new business.” Commonwealth Edison Co., Ill. Com. Comm’n, Docket 11-0721, at 75
(Order May 29, 2012).
¶ 33 The Commission directed ComEd to take its 2010 year-end billing determinants and adjust
them to reflect the estimated increase in customer bill count or new customer growth produced
by the 2011 projected new business plant additions.
¶ 34 Regarding allocation, ComEd proposed to change its allocation method for general and
intangible plant costs which would produce a net increase of approximately $18.2 million in
net plant costs allocated to distribution, and result in a $2.171 million increase in its revenue
requirement. ComEd also changed its allocation of real estate taxes, shifting $3.345 million in
real estate taxes to intrastate distribution, instead of allocating this cost to interstate
transmission. According to ComEd, its methodologies were consistent with the methodologies
FERC had used in setting ComEd’s interstate transmission rates. The methodologies the FERC
used, however, were the ones urged by ComEd. The FERC did not determine these different
methodologies.
¶ 35 The Commission, however, rejected these changes in allocation and reaffirmed ComEd’s
prior existing cost allocation methods which it had used in its most recent rate case prior to the
2011 Rate Case. In weighing ComEd’s evidence, the Commission found that ComEd failed to
demonstrate that a change from the existing, long-standing, Commission-approved just and
reasonable cost allocation methodologies was warranted. The Commission found that ComEd
failed to establish that its proposal was more accurate or just and reasonable than the existing

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 allocation, or necessary to align federal and state tariffs, or that there were any trapped costs.
The Commission specifically found that ComEd presented no factual evidence to establish that
costs were in fact being trapped between the FERC and the Commission’s jurisdictions or to
establish that it was necessary to align ComEd’s FERC-filed tariff and its Commission-filed
tariff in the manner ComEd proposed. ComEd claimed that, as a result of the Commission’s
ruling some of ComEd’s costs were “trapped” and unable to be recovered.
¶ 36 ComEd appealed, challenging the following rulings by the Commission: (1) requiring an
adjustment to rates charged to ComEd customers to reflect the expected increase in the number
of customers served; (2) allocating certain general costs between distribution to ratepayers and
transmission to out-of-state purchasers; (3) restricting ComEd’s recovery from ratepayers for
certain performance bonuses paid to ComEd employees; (4) denying ComEd recovery from
ratepayers for part of the amount ComEd paid to an affiliate, which was used by the affiliate to
give its employees bonuses based on net income; and (5) denying ComEd recovery from
ratepayers for compensation paid to ComEd managers in the form of stock in ComEd’s parent
corporation. We recently issued an opinion rejecting ComEd’s arguments and affirming the
Commission’s order. See Commonwealth Edison Co. v. Illinois Commerce Comm’n, 2014 IL
App (1st) 122860.
¶ 37 In the 2011 Rate Case, ComEd had also challenged two other Commission rulings: (1)
using an average rate base instead of a year-end rate base when calculating the reconciliation
balance; and (2) applying an interest rate equal to ComEd’s short-term debt rate rather than
ComEd’s weighted average cost of capital to the reconciliation balance. But these issues were
resolved by legislative amendment in Public Act 98-15, which preempted and superseded
those Commission orders. See Pub. Act 98-15, § 1 (eff. May 22, 2013). We noted this
amendatory Act in our opinion in the 2011 Rate Case. See Commonwealth Edison Co., 2014 IL
App (1st) 122860, ¶ 49. These previous alleged errors are not at issue in this appeal.

¶ 38 2012 Rate Case
¶ 39 The Act requires that the formula “be updated annually with transparent information that
reflects the utility’s actual costs to be recovered during the applicable rate year.” 220 ILCS
5/16-108.5(c) (West 2012). While the appeal of the 2011 Rate Case was pending, the
Commission was required to continue to apply the formula in annual update proceedings. This
case arises from the Commission’s first update under that formula.
¶ 40 The final order by the Commission under review in this case (2012 Rate Case) was issued
on December 19, 2012. In the 2012 Rate Case, ComEd was required to submit a rate filing that
conformed with the Commission’s order and rulings in the 2011 Rate Case. Accordingly,
ComEd’s filed rate reflected the “functionalization of plant between the transmission and
distribution functions *** in conformance with the May 11-0721 Order,” but ComEd stated in
its brief before the Commission that by doing so it “did not change its position on the issues,
nor did it waive any rights to pursue them currently or in the future.” Commonwealth Edison
Co., Ill. Com. Comm’n, Docket 12-0321 (Order Dec. 19, 2012).
¶ 41 ComEd did not, however, adjust its 2011 year-end billing determinants to reflect the
estimated increase in customers attributable to the 2012 projected new business plant
additions. ComEd’s position is that the 2011 Rate Case order was limited to that year, and that
ComEd did not need to adjust its billing determinants for 2012 to reflect the estimated increase
in customer bill count due to projected new plant additions. The Attorney General, AARP,

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 CUB and the Commission staff disagreed and recommended that the Commission adopt an
upward adjustment to ComEd’s 2011 billing determinants to reflect the 2012 projected new
business plant additions, consistent with the approach in the 2011 Rate Case order. The
Commission agreed and so ordered.
¶ 42 ComEd’s tariff filing for 2012 measured its rate base as of December 31, 2011, and then
increased that end-of-year figure by the amount of 2012 projected plant additions. One of the
components of ComEd’s total 2012 projected plant additions is for “New Business,” which
was estimated to be about $130 million and represents facilities to accommodate customer
growth and includes equipment and line extensions to serve new residential and commercial
development.
¶ 43 In ComEd’s application for rehearing, ComEd requested that the Commission correct the
2012 order’s revenue requirement and rates to allocate ComEd’s assets and costs consistently
with federal law and with the allocation approved by the FERC. The application for rehearing
was denied. ComEd then filed a timely notice of appeal and petition for review with this court.
On February 14, 2013, the Commission issued an amendatory order, and ComEd filed a notice
of appeal and petition for review of that amendatory order. We granted a motion to consolidate
the appeals.

¶ 44 ANALYSIS
¶ 45 In this 2012 rate update case, ComEd seeks review of three issues: (1) the billing
determinants; (2) the allocation of certain common costs that ComEd incurs in connection with
its interstate transmission service and its intrastate distribution or local delivery service (which
is regulated by the Commission); and (3) the denial of ComEd’s 2011 Rate Case expenses,
such as the legal fees incurred in making its rate case filings, as not reasonable. The first two
issues involve the same alleged formula errors as alleged in the 2011 Rate Case. ComEd argues
those “errors” recurred in this case, as the Commission again applied those same aspects of the
formula rate. The third issue is raised for the first time. ComEd also initially sought review of
the Commission’s treatment of incentive compensation, arguing that the Commission used a
legally erroneous standard, but in its reply brief ComEd withdraws its request for review of this
issue because ComEd concedes that the Commission allowed ComEd’s requested
compensation expense and thus ComEd was not harmed.
¶ 46 “When reviewing the Commission’s orders, we are limited to considering whether (1) the
Commission acted within its authority; (2) adequate findings were made to support the
decision; (3) the decision was supported by substantial evidence; and (4) state or federal
constitutional rights were infringed.” Commonwealth Edison Co. v. Illinois Commerce
Comm’n, 322 Ill. App. 3d 846, 849 (2001) (citing Citizens United for Responsible Energy
Development, Inc. v. Illinois Commerce Comm’n, 285 Ill. App. 3d 82, 89 (1996)).
“ ‘Substantial evidence’ means more than a mere scintilla; however, it does not have to rise to
the level of a preponderance of the evidence.” Commonwealth Edison Co. v. Illinois
Commerce Comm’n, 398 Ill. App. 3d 510, 514 (2009) (citing Citizens Utility Board v. Illinois
Commerce Comm’n, 291 Ill. App. 3d 300, 304 (1997)). “It is evidence that a ‘reasoning mind
would accept as sufficient to support a particular conclusion.’ ” Commonwealth Edison Co. v.
Illinois Commerce Comm’n, 398 Ill. App. 3d at 514 (quoting Citizens Utility Board, 291 Ill.
App. 3d at 304).

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¶ 47 The Act sets forth our standard of review: “The findings and conclusions of the
Commission on questions of fact shall be held prima facie to be true and as found by the
Commission; rules, regulations, orders or decisions of the Commission shall be held to be
prima facie reasonable, and the burden of proof upon all issues raised by the appeal shall be
upon the person or corporation appealing from such rules, regulations, orders or decisions.”
220 ILCS 5/10-201(d) (West 2012). See also People ex rel. Madigan v. Illinois Commerce
Comm’n, 2011 IL App (1st) 101776, ¶ 6 (“The Commission’s factual findings are to be
‘considered prima facie true; its orders are considered prima facie reasonable; and the burden
of proof on all issues raised in an appeal is on the appellant.’ ” (quoting Commonwealth Edison
Co. v. Illinois Commerce Comm’n, 398 Ill. App. 3d 510, 514 (2009))).
¶ 48 “Our courts give great deference to the Commission’s decisions as they are ‘ “judgment[s]
of a tribunal appointed by law and informed by experience.” ’ ” Commonwealth Edison Co. v.
Illinois Commerce Comm’n, 322 Ill. App. 3d 846, 849 (2001) (quoting United Cities Gas Co.
v. Illinois Commerce Comm’n, 163 Ill. 2d 1, 12 (1994), quoting Village of Apple River v.
Illinois Commerce Comm’n, 18 Ill. 2d 518, 523 (1960)). The Commission is entitled to great
deference from a reviewing court because it is an administrative body possessing expertise in
the field of public utilities. Archer-Daniels-Midland Co. v. Illinois Commerce Comm’n, 184
Ill. 2d 391, 397 (1998). “Our supreme court has held that deference to the Commission is
‘especially appropriate in the area of fixing rates.’ ” Commonwealth Edison Co., 398 Ill. App.
3d at 514 (quoting Iowa-Illinois Gas & Electric Co. v. Illinois Commerce Comm’n, 19 Ill. 2d
436, 442 (1960)). When reviewing an order from the Commission, we therefore give deference
to the Commission’s decision, in light of its expertise and experience in this area.
Commonwealth Edison Co., 398 Ill. App. 3d at 514.

¶ 49 Billing Determinants
¶ 50 The Commission argues that our previous decision in Commonwealth Edison Co., 2014 IL
App (1st) 122860, regarding the 2011 Rate Case is dispositive of the first two issues on appeal,
including the first issue concerning billing determinants. ComEd, however, argues that our
decision in Commonwealth Edison Co. was “based upon a different evidentiary record, a
different Commission Order, and different arguments by the Commission in defense of that
Order.”
¶ 51 Commonwealth Edison Co., 2014 IL App (1st) 122860, involved Commission order
No. 11-0721 for ComEd’s 2011 Rate Case, which presented issues as to ComEd’s formula rate
for 2011. The present appeal involves Commission order No. 12-0321 for ComEd’s 2012 Rate
Case, which presents issues as to ComEd’s formula rate reconciliation for 2012. ComEd’s
position was that the Commission’s order in the 2011 Rate Case to adjust ComEd’s billing
determinants to reflect the estimated increase in customers attributable to the 2011 projected
new business plant additions should not operate beyond the 2011 Rate Case order. The
Attorney General, AARP, CUB, and the Commission’s staff disagreed and recommended that
the Commission adopt an upward adjustment or reconciliation to ComEd’s 2011
weather-normalized billing determinants to reflect the 2012 projected new business plant
additions. The Commission agreed and held that the same billing determinants approach used
in the 2011 Rate Case should be used in this case. The Act specifies that the Commission may
not, in a rate update proceeding, “consider or order any changes to the structure or protocols of
the performance-based formula rate approved” in an order by the Commission. 220 ILCS

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 5/16-108.5(d) (West 2012). Thus, in the 2012 update proceeding, the Commission could not
consider any changes to the structure or protocols it had already approved in the 2011 Rate
Case order.
¶ 52 ComEd does not argue there was an error in the update aspect of this 2012 Rate Case.
Instead, ComEd argues, as it did in the 2011 Rate Case, that the Commission erred in its
approved formula rate and violated section 16-108.5(c)(4)(H) because the Act only allows
“historical weather normalized billing determinants,” and “removes from the Commission any
discretion” to apply any other billing determinants, including customer growth due to plant
additions. ComEd also argues the Commission’s adjustment to reflect projected new business
plant additions, as it also approved in the 2011 Rate Case, is arbitrary and capricious because
the Commission did not also consider other variables that would affect consumer demand. The
Commission replies that our decision in the 2011 Rate Case controls determination of these
issues.
¶ 53 We agree with the Commission. These legal issues have already been determined by this
court and relitigation is barred by collateral estoppel. “Collateral estoppel is a branch of
res judicata that prohibits the relitigation of an issue actually decided in an earlier proceeding
between the same parties.” Richter v. Village of Oak Brook, 2011 IL App (2d) 100114, ¶ 17
(citing Mabie v. Village of Schaumburg, 364 Ill. App. 3d 756, 758 (2006)). Collateral estoppel,
or issue preclusion, is “much narrower” than res judicata, however, “in that it prevents
relitigation of issues of law or fact that have previously been litigated and decided in an action
that resulted in a final judgment on the merits involving the same parties or their privies.”
Gallaher v. Hasbrouk, 2013 IL App (1st) 122969, ¶ 21 (citing Du Page Forklift Service, Inc. v.
Material Handling Services, Inc., 195 Ill. 2d 71, 77 (2001), Schratzmeier v. Mahoney, 246 Ill.
App. 3d 871, 875 (1993), and Dowrick v. Village of Downers Grove, 362 Ill. App. 3d 512,
515-16 (2005)). “While res judicata bars subsequent actions involving identical causes of
action, the related doctrine of collateral estoppel prevents relitigation of issues decided in
earlier proceedings.” (Emphasis added.) Diotallevi v. Diotallevi, 2013 IL App (2d) 111297,
¶ 21 (citing Dowrick v. Village of Downers Grove, 362 Ill. App. 3d 512, 516 (2005)).
¶ 54 “The doctrine applies when a party participates in two separate and consecutive cases
arising on different causes of action and some controlling fact or question material to the
determination of both causes has been adjudicated against that party in the former case by a
court of competent jurisdiction.” (Emphasis omitted.) People v. Hopkins, 235 Ill. 2d 453, 468
(2009) (citing People v. Tenner, 206 Ill. 2d 381, 396 (2002), and People v. Moore, 138 Ill. 2d
162, 166 (1990)). “[F]or collateral estoppel to apply: (1) the issue decided in the prior
proceeding must be identical to the one in the current suit; (2) the prior adjudication must have
been a final judgment on the merits; and (3) the party against whom the estoppel is asserted
must have been a party to, or must be in privity with a party to, the prior adjudication.” Hope
Clinic for Women, Ltd. v. Flores, 2013 IL 112673, ¶ 77 (citing In re A.W., 231 Ill. 2d 92, 99
(2008)).
¶ 55 Here, collateral estoppel applies to the first two issues raised by ComEd on appeal to the
extent ComEd makes the same arguments raised in the 2011 Rate Case. We note that this 2012
Rate Case is not an identical cause of action as the 2011 Rate Case. Rather, this 2012 Rate Case
is a rate update case. The Act requires that the formula “be updated annually with transparent
information that reflects the utility’s actual costs to be recovered during the applicable rate
year.” 220 ILCS 5/16-108.5(c) (West 2012). This 2012 Rate Case thus applies the same

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 approved formula from the 2011 Rate Case but, because it is an annual update, the actual costs
and the resulting rate is different. ComEd again raises the same legal issue concerning billing
determinants addressed by this court in our opinion in the 2011 Rate Case, where we
determined that the Act does not limit the Commission in rate-setting to only weather
normalized billing determinants. In our opinion in the 2011 Rate Case, we acknowledged that
while “[t]he Act does not specifically mention adjustments to performance-based rates for
expected changes in the number of customers, usage, or any other determinant of total sales,
apart from weather normalization” (Commonwealth Edison Co., 2014 IL App (1st) 122860,
¶ 56), as the Commission’s staff pointed out, the Act directs the Commission to determine
rates “ ‘subject to a determination of prudence and reasonableness consistent with
Commission practice and law.’ ” Commonwealth Edison Co., 2014 IL App (1st) 122860, ¶ 57
(quoting 220 ILCS 5/16-108.5(c)(4) (West 2012)). We explicitly held that the Commission
could use projected new business plant additions, in addition to normalized weather billing
determinants, and that ComEd failed to show that the Commission violated the Act when it
required an adjustment to ComEd’s rates to take into account expected growth in the number of
customers it served. Commonwealth Edison Co., 2014 IL App (1st) 122860, ¶ 57. We reiterate
our prior holding. We underscore the fact that the Act is permissive in providing that the
Commission shall “[p]ermit and set forth protocols” (emphasis added) for the historical
weather normalized billing determinants. 220 ILCS 5/16-108.5(c)(4)(H) (West 2012). The Act
does not limit billing determinants to only historical weather normalized billing determinants.
This precise issue was already decided and ComEd is barred from relitigating it.
¶ 56 Our decision in the 2011 Rate Case also controls the related billing determinant legal issue
of whether the Commission is also required to take into account other customer usage factors
in establishing the appropriate rate and, in turn, ComEd’s revenue requirement. In our opinion
in the 2011 Rate Case, we also held that the Commission was not required to take into account
any other factors as billing determinants, such as an alleged decline in kWh usage, and that
ComEd failed to establish what the cause was for the decline in kWh usage. We held that
ComEd did not meet its burden of showing that the Commission’s finding was contrary to the
manifest weight of the evidence, or that the Commission acted unreasonably when it ordered
an adjustment to rates to account for the expected increase in the number of customers.
Commonwealth Edison Co., 2014 IL App (1st) 122860, ¶ 58.
¶ 57 Thus, our opinion deciding the 2011 Rate Case settled the legal issues that the Commission
can use projected new business plant additions in establishing ComEd’s rate, and the
Commission is not required to also account for usage without any proof of what the cause is for
the change in usage.
¶ 58 As to the factual findings specific to the 2012 Rate Case, as we have set forth above in our
standard of review, the Commission’s findings are prima facie true and correct and it is
ComEd’s burden on appeal to rebut that presumption. The Act provides: “The
performance-based formula rate approved by the Commission shall” “[p]ermit and set forth
protocols, subject to a determination of prudence and reasonableness consistent with
Commission practice and law, for *** historical weather normalized billing determinants.”
220 ILCS 5/16-108.5(c)(4)(H) (West 2012). The Act also directs the Commission to determine
rates “subject to a determination of prudence and reasonableness consistent with Commission
practice and law.” 220 ILCS 5/16-108.5(c)(4) (West 2012).

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¶ 59 In the 2011 Rate Case, we found, based on the evidentiary record before the Commission in
that case, that the Commission’s “factual finding that ComEd did not show a cause for the
decrease, and the Commission could not project on the basis of ComEd’s data whether ComEd
would likely experience further declines in sales per customer” was not against the manifest
weight of the evidence. Commonwealth Edison Co., 2014 IL App (1st) 122860, ¶ 58.
¶ 60 Similarly here, although we acknowledge that this is a separate case and separate
proceeding with a different record, the evidentiary record similarly lacks support for ComEd’s
contention that the Commission erred in not considering the future decline in kWh usage. The
Commission did not “refuse” to consider ComEd’s alleged future changes in kWh sales. The
Commission again considered ComEd’s evidence and argument regarding a decline in kWh
sales. And ComEd again could not show what the cause was or would be for any decline in
usage and the Commission again could not project on the basis of ComEd’s data whether
ComEd would likely experience future declines in kWh usage per customer. The Commission
found: “In this proceeding, ComEd provides no evidence indicating why there is a decline in
usage.” Commonwealth Edison Co., Ill. Com. Comm’n, Docket 12-0321, at 28 (Order Dec. 19,
2012) The Commission reasoned that, “[a]s the customer base of the billing determinants
equation is a ‘fixed charge,’ it is appropriate to insure that the customer base component is
accurate and accounts for expected customer growth so that customers are not charged an
inflated rate.” Commonwealth Edison Co., Ill. Com. Comm’n, Docket 12-0321, at 28 (Order
Dec. 19, 2012).
¶ 61 ComEd’s argument ignores the fact that the Commission had previously set rates by
recognizing both growth in the number of customers and an increase in kWh sales. In this case,
the Commission did not also find any projected increase in kWh sales but, rather, only an
increase in the number of customers due to the plant growth projection. But, because there was
insufficient evidence regarding the decline in kWh sales, the Commission could not
definitively find a decline in kWh sales such that the formula rate should be impacted. The
Commission concluded as follows:
“Mr. Effron did not recommend increasing the total amount of kWh sales billing
determinants in light of the overall decline in ComEd’s total kWh sales. *** While the
Commission has previously recognized growth in both the number of customers and
kWh sales, such a determination is inappropriate in this proceeding based on record
evidence. There is insufficient evidence in this proceeding to find that a decline in kWh
sales affects the number of customers amongst whom the revenue requirement should
be spread, and as such there is insufficient evidence to determine that this decline
should offset the increase in billing determinants that reflects New Business.”
Commonwealth Edison Co., Ill. Com. Comm’n, Docket 12-0321, at 29-30 (Order Dec.
19, 2012).
¶ 62 On this point, the Commission appropriately considered only the increase in the number of
customers, as ComEd failed to provide enough information on a decrease in kWh usage to
change the rate formula. We affirm the Commission’s order regarding billing determinants in
setting ComEd’s rate.

¶ 63 Cost Allocation
¶ 64 ComEd next argues that the Commission erred in its order in this rate case because it
continues to refuse ComEd’s proposed new allocation methodologies from the 2011 Rate

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 Case. In the 2011 Rate Case, ComEd proposed new methodologies for allocating two
categories of shared costs: general and intangible plant costs; and real estate taxes. According
to ComEd, its methodologies were consistent with the methodologies the FERC had used in
setting ComEd’s interstate transmission rates and would have resulted in the appropriate
recovery of the full amount of its reasonable and prudent intrastate distribution costs. But,
according to ComEd, the Commission rejected ComEd’s methodologies and adopted
methodologies inconsistent with the FERC’s which resulted in some of its costs being
“trapped” and unrecoverable because the FERC ruled that certain costs could not be allocated
to interstate transmission, and the Commission ruled that those costs could not be allocated to
intrastate distribution either. In this 2012 Rate Case, ComEd was required to submit a rate
filing that conformed with the Commission’s allocation rulings in the 2011 Rate Case. ComEd
again argues that the Commission’s methodology for allocating certain costs to intrastate
distribution violated federal and state law.
¶ 65 As in the 2011 Rate Case, ComEd again reiterates the same arguments regarding
allocation: (1) that the Commission is required to follow the FERC’s allocation methodologies
under Illinois law, specifically that section 16-108(c) of the Act (220 ILCS 5/16-108(c) (West
2012)) requires the Commission to set rates that will allow ComEd to fully recover all costs
related to both interstate transmission and intrastate distribution; and (2) that the federal
constitution’s supremacy clause and the filed rate doctrine bar the Commission from allocating
common costs in a manner inconsistent with the FERC’s allocation.
¶ 66 We note at the outset that in our decision in the 2011 Rate Case, in addressing these same
allocation arguments, we held generally that ComEd “has not met its burden of proving that the
Commission violated either federal or state law or acted unreasonably in its allocation of
general wages and plant costs [and] real estate taxes.” Commonwealth Edison Co., 2014 IL
App (1st) 122860, ¶ 61. Thus, to this extent, relitigation of the general issue of allocation is
barred by collateral estoppel.
¶ 67 To the extent that the specific arguments under state and federal law may not have been
actually addressed in our previous opinion in Commonwealth Edison Co., 2014 IL App (1st)
122860, because ComEd is raising them again, we address them here. These specific
arguments concern: (1) section 16-108(c) of the Act; and (2) federal preemption and the filed
rate doctrine.
¶ 68 First, ComEd’s reliance on section 16-108(c) not only is not on point for the formula rate,
but ComEd also does not include the full text of that provision, misleadingly suggesting that
section 16-108(c) requires the Commission to allow a utility to recover all the costs of
providing delivery services in whatever manner suggested by the utility. This is not the case.
The full text of section 16-108(c) provides as follows:
“(c) The electric utility’s tariffs shall define the classes of its customers for
purposes of delivery services charges. Delivery services shall be priced and made
available to all retail customers electing delivery services in each such class on a
nondiscriminatory basis regardless of whether the retail customer chooses the electric
utility, an affiliate of the electric utility, or another entity as its supplier of electric
power and energy. Charges for delivery services shall be cost based, and shall allow the
electric utility to recover the costs of providing delivery services through its charges to
its delivery service customers that use the facilities and services associated with such
costs. Such costs shall include the costs of owning, operating and maintaining

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 transmission and distribution facilities. The Commission shall also be authorized to
consider whether, and if so to what extent, the following costs are appropriately
included in the electric utility’s delivery services rates: (i) the costs of that portion of
generation facilities used for the production and absorption of reactive power in order
that retail customers located in the electric utility’s service area can receive electric
power and energy from suppliers other than the electric utility, and (ii) the costs
associated with the use and redispatch of generation facilities to mitigate constraints on
the transmission or distribution system in order that retail customers located in the
electric utility’s service area can receive electric power and energy from suppliers other
than the electric utility. Nothing in this subsection shall be construed as directing the
Commission to allocate any of the costs described in (i) or (ii) that are found to be
appropriately included in the electric utility’s delivery services rates to any particular
customer group or geographic area in setting delivery services rates.” (Emphases
added.) 220 ILCS 5/16-108(c) (West 2012).
¶ 69 The Act specifies that the formula rate shall be computed based on a utility’s actual cost, as
reported to the FERC on FERC Form 1 for the prior year:
“The utility shall file, together with its tariff, final data based on its most recently
filed FERC Form 1, plus projected plant additions and correspondingly updated
depreciation reserve and expense for the calendar year in which the tariff and data are
filed, that shall populate the performance-based formula rate and set the initial delivery
services rates under the formula.” 220 ILCS 5/16-108.5(c) (West 2012).
¶ 70 Thus, the actual costs reported to the FERC the prior year are used by the Commission to
set the revenue requirement for participating utilities under the Act. See 220 ILCS
5/16-108.5(d)(1) (West 2012). ComEd does not explain how or why this actual cost reporting
mechanism to set rates is inadequate, and why the Commission would have to take the
additional step of ensuring its allocation methodologies are exactly the same as the ones used
by the FERC.
¶ 71 Section 16-108.5(c) further provides: “Nothing in this Section is intended to allow costs
that are not otherwise recoverable to be recoverable by virtue of inclusion in FERC Form 1.”
220 ILCS 5/16-108.5(c) (West 2012). Thus, the Commission is not required to allow costs
solely because the costs are included at the FERC.
¶ 72 ComEd’s assertion that “the Commission has little discretion with respect to
functionalizing common costs” is squarely refuted by the Act. Rather, the Act directs the
Commission to determine rates “subject to a determination of prudence and reasonableness
consistent with Commission practice and law.” 220 ILCS 5/16-108.5(c)(4) (West 2012).
Section 16-108.5(c)(4)(I) unequivocally directs the Commission to set forth protocols,
consistent with its own practice and law, regarding the allocation of common costs:
“(c) *** The performance-based formula rate approved by the Commission shall
do the following:
***
(4) Permit and set forth protocols, subject to a determination of prudence and
reasonableness consistent with Commission practice and law, for the following:
***
(I) allocation methods for common costs.” 220 ILCS 5/16-108.5(c)(4)(I)

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 (West 2012).
¶ 73 This is what the Commission did; it set the allocation method consistent with Commission
practice from the prior year’s order. ComEd does not dispute that the Commission’s allocation
was consistent with its previous allocation.
¶ 74 ComEd also reiterates its second allocation argument in this case that under the United
States Constitution’s supremacy clause and the filed rate doctrine, the Commission may not
allocate costs or set rates in a manner that is inconsistent with the FERC’s cost allocations and
rates, citing to Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 964-66 (1986),
Mississippi Power & Light Co. v. Moore, 487 U.S. 354, 371-73 (1988), Entergy Louisiana,
Inc. v. Louisiana Public Service Comm’n, 539 U.S. 39, 47 (2003), and General Motors Corp.
v. Illinois Commerce Comm’n, 143 Ill. 2d 407, 420 (1991). According to ComEd’s brief on
appeal before this court, “when [the] FERC has issued a Transmission Formula Rate (‘TFR’)
that allocates a certain portion of common costs to transmission, then the Commission must
allocate the remaining portion of those costs to distribution,” so no costs could possibly be
trapped. (Emphasis in original.)
¶ 75 We clarify that the filed rate doctrine does not stand for the broad proposition stated by
ComEd and is not applicable in this case. The filed rate doctrine is a doctrine that merely holds
that a state agency cannot disallow recovery of FERC-approved federal costs from ratepayers.
The FERC has exclusive jurisdiction over rates to be charged electric utility’s interstate
wholesale customers. 16 U.S.C. § 824(b) (2012). Pursuant to the filed rate doctrine, the
Commission is preempted from disallowing FERC-approved costs from ratepayers. “[A] state
utility commission setting retail prices must allow, as reasonable operating expenses, costs
incurred as a result of paying a FERC-determined wholesale price.” Nantahala, 476 U.S. at
965. Once the FERC files a rate, that rate must be passed through to ratepayers and state
agencies cannot disallow this cost. The filed rate doctrine concerns only the passing through of
federal costs to retail rates. It operates as a bar against state agencies “trapping” only federal
wholesale costs by disallowing recovery of FERC-approved costs from ratepayers. As the
United States Supreme Court explained, “a State may not exercise its undoubted jurisdiction
over retail sales to prevent the wholesaler-as-seller from recovering the costs of paying the
FERC-approved rate.” Nantahala, 476 U.S. at 970. See also General Motors Corp., 143 Ill. 2d
at 420 (explaining that the filed rate doctrine “protects distributors from the trapping of
wholesale costs”). The Court pointed out however, as many filed rate doctrine cases have
observed, that “an increase in FERC-approved wholesale rates need not lead to an increase in
retail rates” because the company may experience savings in other areas which offset this
FERC rate increase. Nantahala, 476 U.S. at 967.
¶ 76 The filed rate doctrine does not stand for the proposition that a state agency must approve
all remaining costs beyond FERC interstate transmission costs and allocate these costs to
intrastate distribution, as argued by ComEd. As explained by the Commission, the
FERC-approved transmission costs are set forth in FERC-approved rates and FERC-filed
tariffs, which are in fact already “passed through” to ComEd’s customers through a separate
line-item charge on their monthly bills. ComEd makes no reply to this fact. The filed rate
doctrine was not violated by the Commission and simply is not implicated here.
¶ 77 As the Commission argues, the cases cited by ComEd are distinguishable because they
involve passing the cost of wholesale power through to retail rates to allow a distributor to
recover its federal wholesale costs, and not the allocation of costs between transmission and

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 distribution. None of ComEd’s citations involve allocation of interstate and intrastate delivery
costs within the same utility company.
¶ 78 We further determine and highlight the fact that the different allocation methodologies
were a result of ComEd’s own choice. ComEd argues we must give deference to the FERC’s
allocation methodologies pursuant to the Supremacy Clause of the United States Constitution,
but in fact ComEd urged those methodologies at the FERC. In our decision in the 2011 Rate
Case, where ComEd first urged the change in allocation methodology, we noted evidence by
ComEd that it filed documents with the FERC in which ComEd allocated a greater percentage
of its costs of general wages and plant, including real estate taxes, to distribution, thereby
reducing the price for the electricity ComEd sold to out-of-state purchasers. Commonwealth
Edison Co., 2014 IL App (1st) 122860, ¶ 61. Thus, ComEd sought the different methodology
with the FERC for allocating interstate transmission costs. As the Commission points out,
ComEd was well aware of the existing allocation methodology for rate-setting with the
Commission. As the Commission aptly argues:
“That ComEd elected to urge an allegedly different cost allocation method at the FERC
to allocate transmission costs attributable to the interstate jurisdiction does not control
or otherwise limit the Commission’s authority to independently establish the portion of
common costs attributable to the Illinois jurisdiction. If ComEd had concerns that
allegedly incompatible cost allocation methods would not allow it to fully recover costs
allocated between the two regulatory jurisdictions, then it should have applied its
long-standing Commission-approved cost allocation methodologies to allocate
interstate transmission costs in proceedings at the FERC.”
¶ 79 ComEd itself could have ensured consistent methodologies by urging methodologies with
the FERC that were consistent with the Commission’s methodologies instead of urging the
adoption of different methodologies. We thus clarify that we reject ComEd’s claim of error by
the Commission as a result of ComEd’s own selection of methodologies it urged with the
FERC for allocation of common costs.
¶ 80 To the extent that ComEd argues that error in allocation methodologies is shown based on
a different record in this case, litigation of the allocation issue is not barred; however, we hold
that ComEd has again failed to sustain its burden of proving the Commission’s findings and
determination were in error. Though ComEd repeatedly reiterates that some of its general and
intangible plant costs and real estate tax costs are “trapped,” ComEd still does not shed light on
the amount of those trapped costs. The Commission rejected ComEd’s proposal to use the
“wages and salaries” allocator for general and intangible plant costs, as ComEd had urged the
FERC to adopt in its operative transmission formula rate. Under the wages and salaries
allocator, the percentage of total wages going to personnel providing and supporting interstate
transmission services versus intrastate distribution services is analyzed. Instead, according to
ComEd, the Commission “used several different methodologies for allocating different aspects
of G&I Plant.” In its briefing on appeal in this case ComEd does not explain the various
methodologies used by the Commission for general and intangible plant costs and instead cites
to the Commission’s order in the 2011 Rate Case. The Commission’s 2011 Rate Case order
explained that the current allocation approach was a combination of general functional
allocators and direct assignment, but ComEd proposed to use a single generic functional
allocator based on wages and salaries, allegedly to be consistent with the FERC. The
Commission noted however, as argued by the CUB and the City of Chicago, that ComEd relied

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 on two FERC decisions from 1978 and 1988 and that “there is no change with respect to the
FERC that might have arisen since the Commission’s decision in Docket 10-0467 that would
justify a substantial increase in the distribution revenue requirement under the Formula Rate
Plan.” The Commission found that “ComEd points to no fact in its argument indicating that
there actually is such a ‘trapping’ between the two jurisdictions.” ComEd again provides no
information regarding what the amount of allegedly trapped costs is or, indeed, if there is any
difference in general and intangible plant costs under the differing allocation analyses.
¶ 81 Regarding real estate taxes, the Commission rejected ComEd’s proposal to use a “net plant
allocator,” as the FERC had done, adopting the proposed method of ComEd. The net plant
allocator, according to ComEd, reflects the relative levels of investment in interstate
transmission versus intrastate distribution. Instead, the Commission used the prior method of
allocating real estate taxes based on an analysis of ComEd’s expenditures on general
communication equipment. This was the method previously endorsed by ComEd. ComEd does
not provide any dollar amount “trapped” figure or even a purported percentage of allegedly
“trapped” costs. Regarding support in the record, ComEd again merely cites to the
Commission’s order in the 2011 Rate Case. But the Commission’s order recites that, based on
ComEd’s own review of the prior allocation methodology for real estate taxes in the 2010 rate
case (Docket No. 10-0467), it “proposed a refinement in the methodology that better syncs
with FERC and provides a more reasonable portrayal of the overall relationship between the
investment made in transmission and distribution.” There is no indication of any actual
calculation or proof of any alleged trapped costs. At best, we merely have ComEd’s assertion
that it now believes differing methodologies for the allocators are better.
¶ 82 We cannot discern if any amount of costs is “trapped” as ComEd argues. We will not scour
the record to attempt to find what those costs are. The appellant “has the burden of showing
error; any doubt arising from incompleteness of the record will be resolved against the
appellant.” People v. Kirkpatrick, 240 Ill. App. 3d 401, 406 (1992). ComEd has utterly failed
to sustain its burden on appeal. We therefore affirm the Commission’s order.

¶ 83 2011 Rate Case Expenses
¶ 84 Finally, ComEd argues that the Commission erred in not granting its attorney fees and
expenses for the 2011 Rate Case as one of its costs in the rate formula under the Act in this rate
case. Except for $200,000 paid as a statutory filing fee, the entirety of ComEd’s 2011 Rate
Case expenses, $1,544,161, was disallowed. As this issue concerns the fees and expenses for
the 2011 Rate Case, we are addressing this issue for the first time.
¶ 85 “Illinois courts have allowed utilities to recover rate case expense because ‘[t]he costs
incurred by a utility to prepare and present a rate case are properly recoverable as an ordinary
and reasonable cost of doing business.’ ” People ex rel. Madigan v. Illinois Commerce
Comm’n, 2011 IL App (1st) 101776, ¶ 13 (quoting Central Illinois Public Service Co. v.
Illinois Commerce Comm’n, 243 Ill. App. 3d 421, 432 (1993), citing Du Page Utility Co. v.
Illinois Commerce Comm’n, 47 Ill. 2d 550 (1971)). Section 16-108.5(c)(4)(E) provides that
rate case expenses are properly recoverable through the EIMA performance-based formula
rate and that the Commission is empowered to:
“(4) Permit and set forth protocols, subject to a determination of prudence and
reasonableness consistent with Commission practice and law, for the following:

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 ***
(E) recovery of the expenses related to the Commission proceeding under this
subsection (c) to approve this performance-based formula rate and initial rates or to
subsequent proceedings related to the formula, provided that the recovery shall be
amortized over a 3-year period; recovery of expenses related to the annual
Commission proceedings under subsection (d) of this Section to review the inputs
to the performance-based formula rate shall be expensed and recovered through the
performance-based formula rate[.]” 220 ILCS 5/16-108.5(c)(4)(E) (West 2012).
¶ 86 Pursuant to section 16-108.5(c)(4)(E), ComEd requested that it be allowed to recover
$1,544,161 for expenses in the 2011 Rate Case. Section 9-229 of the Act now requires that the
Commission “specifically assess the justness and reasonableness of any amount expended by a
public utility to compensate attorneys or technical experts to prepare and litigate a general rate
case filing.” 220 ILCS 5/9-229 (West 2012). In interpreting this relatively new section of the
Act, in People ex rel. Madigan v. Illinois Commerce Comm’n, 2011 IL App (1st) 101776, we
held that, while the Commission previously only needed to make sufficient findings to allow
for informed judicial administrative review under section 10-201(e)(iii) (220 ILCS
5/10-201(e)(iii) (West 2008)), section 9-229 created a requirement for more specific findings.
We held that by requiring the Commission to “specifically assess the justness and
reasonableness” of “any amount” paid by a utility for legal and expert fees and to “expressly
address” this issue in its order, the Act mandated a more detailed finding than what was
previously generally required of the Commission. (Internal quotation marks omitted.) People
ex rel. Madigan, 2011 IL App (1st) 101776, ¶ 47.
¶ 87 ComEd argues, however, that in Madigan this court “did not identify what evidence would
be sufficient to satisfy the evidentiary standard.” This argument is not well-grounded. The
Commission’s order in this 2012 Rate Case also did not adopt a “new” or “erroneous”
evidentiary standard as ComEd contends. Both a prior order by the Commission in another rate
case in which ComEd was a party and the decision by this court in People ex rel. Madigan
provided the applicable standard. To this point, we quote at length the Commission’s detailed
explanation of the evidentiary standard regarding approval of rate case legal fees and expenses
as follows:
“In Docket 10-0467, a ComEd rate case, the Commission addressed the issue of
what evidence satisfies the requirements in Section 9-229 of the Public Utilities Act.
This Commission concluded that the parties should adhere to the well-established body
of case law on the subject, which, very generally, requires proof of what services were
performed, the necessity for those services, and proof that the rates at issue for the
services are reasonable for the services performed. The Commission also concluded
that a rulemaking should commence, which should have placed all concerned parties,
including ComEd, ‘on the same page’ regarding that body of law. In that rulemaking
proceeding, an extensive amount of information as to the documentation that is
required by the body of law that was cited in the Docket 10-0467 Order was provided to
all of the parties, including ComEd. Docket 10-0467, Final Order of May 24, 2011 at
81-86; Docket 11-0711, generally, regarding the rulemaking and regarding what that
body of law requires.
With regard to attorney’s fees, in that Order the Commission noted that accountants
do not necessarily know what lawyers do or should be doing on behalf of their clients.

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 Docket 10-0467, final Order of May 24, 2011, at 81. This determination on the part of
the Commission should have made it obvious to all of the parties, including ComEd,
that merely tendering information in discovery, but not placing it in the evidentiary
record, does not satisfy the legal requisites in the applicable body of law regarding
attorney’s fees. Tr. 129. This is true because when there is no evidence of record, the
Commission has no evidence upon which it can determine that the rate case
expenditures were just and reasonable, as required by Section 9-229 of the Public
Utilities Act.
Subsequent to the final Order in Docket 10-0467, on December 9, 2011 the Illinois
Appellate Court ruled in a matter involving another utility that, in order to satisfy
Section 9-229 of the Act, the party seeking attorney’s fees and expert witness fees must
provide evidence that specifies: (1) the services performed; (2) by whom they were
performed; (3) the time expended; and (4) the hourly rate charged. In that decision, the
Illinois Appellate Court cited the very same body of case law that the Commission
Order in Docket 10-0467 referred to above. The Appellate Court then remanded the
matter to the Commission for a determination based upon these criteria. People ex. rel.
Madigan v. Illinois Commerce Comm., 2011 Ill. App. (1st) 101776, at 24-26 *** (Ill.
App. 1st Dist. 2011) [sic]. At that point in time, this Commission became required to
follow the body of law cited in the Appellate opinion and in the final Order in Docket
10-0467 [footnote 9] Notably, even a cursory examination of the body of case law cited
in the final Order in Docket 10-0467 and in People ex. rel. Madigan, cited above,
would reveal that what is necessary to satisfy that body of law is evidence as to what
the lawyers and expert witnesses did, in the case file, for the trier of fact to view, in
order to make a decision based on that evidence. See, e.g., City of Chicago v. Ill.
Commerce Comm., 187 Ill. App. 3d 468, 469-472 *** (1st Dist. 1989); Johnson v.
Thomas, 342 [I]ll. App. 3d 382, 400-404 *** (1st Dist. 2003); Guerrant v. Roth, 334
Ill. App. 3d 259, 267-73 *** (1st Dist. 2002); Watson v. South Shore Nursing and
Rehabilitation Center, 2012 IL App (1st) 103730, 12-14 ***.” Commonwealth Edison
Co., Ill. Com. Comm’n, Docket No. 12-0321, at 53-54 (Order Dec. 19, 2012).
¶ 88 The Commission also noted in its order, in footnote 9, that “[o]f course, even before the
Appellate Court decision, the attorneys were required to follow the very specific requirements
in the code of ethics for attorneys. See, S. Ct. Rule 1.5.” Rule 1.5 of the Illinois Rules of
Professional Conduct of 2010 provides, in relevant part, the following:
“(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable
fee or an unreasonable amount for expenses. The factors to be considered in
determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved,
and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;

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 (7) the experience, reputation, and ability of the lawyer or lawyers performing the
services; and
(8) whether the fee is fixed or contingent.
(b) The scope of the representation and the basis or rate of the fee and expenses for
which the client will be responsible shall be communicated to the client, preferably in
writing, before or within a reasonable time after commencing the representation,
except when the lawyer will charge a regularly represented client on the same basis or
rate. Any changes in the basis or rate of the fee or expenses shall also be communicated
to the client.” Ill. R. Prof. Conduct (2010) R. 1.5 (eff. Jan. 1, 2010).
¶ 89 Thus, even before the decision in People ex rel. Madigan, the Illinois Supreme Court Rules
of Professional Conduct set forth factors concerning what would be considered in determining
the reasonableness of attorney fees, including the time and labor required and the fee
customarily charged in the locality for similar legal services.
¶ 90 Instead of following the guidance that was provided by both the Commission and this court
regarding the inclusion of fees in setting the revenue requirement and rate, ComEd apparently
approached the proceedings in this 2012 Rate Case as “business as usual,” when both the
Commission and this court have clearly stated otherwise.
¶ 91 ComEd’s evidence in support of its 2011 Rate Case legal expenses consisted entirely of the
testimony of Martin Fruehe, the manager of ComEd’s revenue policy department and a
one-page spreadsheet showing $1,979,831 in expenses for the 2011 Rate Case, adjusted to
exclude $410,000 as a year-end accrual to be amortized and reflected in ComEd’s 2012
reconciliation case, which then yielded $1,544,161, or $523,633 amortized over a three-year
period. The spreadsheet indicated only totals and various entities. Regarding the spreadsheet,
the Commission found as follows:
“[T]he evidence that ComEd presented regarding the amount of rate case expense that
it is requesting, $1,544,161, is a scant one-page spreadsheet that merely lists totals and
various entities. ComEd. Ex. 3.9. There is no proof as to what these entities did to earn
their fees, and no proof as to what time was expended, or as to the rates charged
consumers for various persons or entities, not to mention the reasonableness of those
rates. This document does not even mention what law firms were paid. In fact, this
document does not even establish that the services were performed in conjunction with
any particular proceeding. Id., Tr. 165-66166. There are no invoices in the record from
any of the entities on ComEd Ex. 3.9. Tr. 166.
***
The Commission additionally notes that it appears that several of the items listed on
ComEd Ex. 3.9 appear to be improperly included overhead expenses. *** Overhead
costs, generally, are not recoverable under the body of case law concerning expert
witness fees and attorney’s fees that govern here. Johnson v. Thomas, 342 Ill. App. 3d
382, 402-04 *** (1st Dist. 2003), noting that routine charges are included in overhead
and therefore not recoverable as a cost of litigation; see also Harris Trust & Savings
Bank v. American National Bank & Trust Co., 230 Ill. App. 3d 591, 599 *** (1st Dist.
1992). In fact, ComEd Ex. 3.9 does not state what services were performed by these
entities ***.” Commonwealth Edison Co., Ill. Com. Comm’n, Docket 12-0321, at
54-57 (Order Dec. 19, 2012).

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¶ 92 The Commission found that the only evidence regarding the rate case expenses was
Fruehe’s testimony, but the Commission found that Fruehe’s testimony “does not even
approach establishing the justness and reasonableness of the $1,544,161 of fees that ComEd
seeks to include in rates.”
¶ 93 We agree. Fruehe testified that ComEd reviewed each invoice that it received for the
amounts listed on the spreadsheet for accuracy and reasonableness. Fruehe testified that in his
opinion ComEd’s 2011 Rate Case expenses were prudently incurred and reasonable. Fruehe
based his opinion on his familiarity with ComEd rate case expenses for the past several rate
cases, including flat fee arrangements used in 2011, as well as his working relationship with
Exelon Business Services Company attorneys responsible for negotiating fee arrangements.
Fruehe testified that the ComEd attorneys “are always looking for innovative proposals and
methods to reduce costs and who ensure that outside counsel and other service providers are
responsive to that goal.”
¶ 94 Such testimony does nothing to assist the Commission in determining whether specific
amounts expended for attorney fees were just and reasonable. Based on the extremely vague
testimony by ComEd in this case regarding the 2011 Rate Case expenses and legal fees, we
have no difficulty determining that the Commission correctly concluded that it could not
“assess the justness and reasonableness of any amount expended by” ComEd “to compensate
attorneys” for its 2011 Rate Case filing. 220 ILCS 5/9-229 (West 2012). The evidence
proffered by ComEd before the Commission regarding its attorney fees does not inform
anyone of the “justness and reasonableness” of its fees. There was no evidence as to specific
amounts in fees, what each amount was for, the amount of time that was expended, the rates
charged, or the reasonableness of those rates. Fruehe’s testimony did not establish what law
firms were paid or that the services were performed in any particular proceedings.
¶ 95 ComEd argues that the Act mandates that once a utility establishes a prima facie case that
certain costs are reasonable, the Commission may “enter upon a hearing concerning the
prudence and reasonableness of the costs incurred by the utility,” and that during the hearing
“each objection [to the reasonableness of costs] shall be stated with particularity and evidence
provided in support thereof, after which the utility shall have the opportunity to rebut the
evidence.” 220 ILCS 5/16-108.5(d) (West 2012). But here the “evidence” of fees presented is a
far cry from a prima facie showing of reasonableness of fees and expenses. There was
essentially no evidence concerning the actual fees. Thus, there was no evidence of particular
fees to even object to with any particularity.
¶ 96 ComEd also argues that its fees and expenses should have been allowed because no party
challenged its fees and expenses as unreasonable. But we are unpersuaded by the fact that the
Commission’s staff investigated the attorney fees and expenses at issue and agreed that the
fees and expenses were reasonable. Nothing in the Act provides that the Commission’s staff’s
recommendations are to be given any weight on this issue, either by the Commission or by us
on review of the Commission’s order. The Act specifically provides that the Commission must
hear and decide the prudence and reasonableness of fees. 220 ILCS 5/16-108.5(d) (West
2012). The Commission determined that the record was devoid of information establishing that
payment to the entities was just and reasonable. We review only the Commission’s
determination and the evidence it relied on before it. We agree with the Commission’s findings
and conclusions which are considered prima facie true and the Commission’s decision which

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 is considered prima facie reasonable. ComEd failed to carry its burden of proof to rebut these
prima facie findings and decision. See 220 ILCS 5/10-201(d) (West 2012).
¶ 97 We are also unpersuaded that the Commission erred in refusing to allow ComEd an
opportunity to “supplement” the evidentiary record by introducing evidence of fees after the
fact. Before the Commission issued its final order, ComEd had filed a motion to supplement
the record to introduce discovery materials in response to requests from the Commission’s
staff which, according to ComEd, “included 221 pages of invoices and other documents
supporting the reasonableness of ComEd’s expenses, and an affidavit, which declared that
ComEd’s costs of litigating the 2011 Rate Case were reasonable.” The Act expressly provides:
“The Commission’s determinations of the prudence and reasonableness of the costs
incurred for the applicable calendar year shall be final upon entry of the Commission’s
order and shall not be subject to reopening, reexamination, or collateral attack in any
other Commission proceeding, case, docket, order, rule or regulation, provided,
however, that nothing in this subsection (d) shall prohibit a party from petitioning the
Commission to rehear or appeal to the courts the order pursuant to the provisions of this
Act.” 220 ILCS 5/10-201(d) (West 2012).
¶ 98 ComEd argues that it moved to supplement the record before the final order, but nothing in
the Act requires reopening the proofs after the hearing had already concluded. We note that,
generally, a decision to reopen the proofs is discretionary. See A-Tech Computer Services, Inc.
v. Soo Hoo, 254 Ill. App. 3d 392, 402 (1993) (the decision to reopen a case to allow the
introduction of additional evidence rests within the discretion of the trial court). ComEd was
given a full and fair opportunity to present its evidence. As the Commission found, “ComEd
was afforded ample opportunity to present evidence on the subject. It chose to present virtually
no evidence on the subject.” As the administrative law judges pointed out, ComEd provided
the Commission with no explanation as to why it could not have presented this evidence at the
evidentiary hearing.
¶ 99 Furthermore, the administrative law judges reviewed the documents ComEd sought to
enter into the record in its motion to supplement and found that many of the documents do not
establish what services were actually performed, or included impermissible overhead
expenses, and many entries were unrelated to the 2011 Rate Case and instead related to other
matters.
We therefore affirm the portion of the Commission’s order allowing only $200,000 paid as
a statutory filing fee in costs and denying the remainder of fees and expenses sought by
ComEd.

¶ 100 CONCLUSION
¶ 101 We find that ComEd did not meet its burden of showing error in any of the contested
rulings. The billing determinants and cost allocation legal issues in this appeal have already
been determined in the 2011 Rate Case, and we follow our opinion in Commonwealth Edison
Co. v. Illinois Commerce Comm’n, 2014 IL App (1st) 122860. Relitigation of the merits of
those legal issues is barred by collateral estoppel. Regarding the factual findings, ComEd has
failed to sustain its burden of rebutting the prima facie presumption that the Commission’s
factual findings are correct. ComEd also has not shown error in the Commission’s ruling
denying the 2011 Rate Case expenses. Accordingly, we affirm the Commission’s order.

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¶ 102 Affirmed.

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