CUB’s legal department is fighting a record six utility rate cases before state regulators totaling a whopping $2.9 billion in higher rates for consumers. But what exactly is a rate case and how does it work? Here’s a CUB explainer to help you understand.
Step #1 Utilities file for a rate hike
To start a rate case, a utility will file a request for new delivery rates with the Illinois Commerce Commission (ICC), the state’s regulatory body overseeing public utilities. The ICC is made up of five commissioners, appointed by the Governor to serve a five-year term. Under law, the ICC has 11 months to decide what the utility’s new rates will be.
Accompanying the utility’s request are hundreds of pages of testimony and accounting schedules drafted by utility executives, managers, consultants and lawyers explaining how the utility would spend the new revenue brought in with a rate hike. The rate case is given a docket number and assigned to an ICC Administrative Law Judge (ALJ), who works exclusively on cases before the regulatory body and sets the schedule and procedures for the case.
CUB has a special place in this process. Under the CUB Act of 1983, the consumer group is automatically an intervenor in these cases, representing the people of Illinois. The ICC Staff–not the actual commissioners but staff members who provide legal and technical expertise and recommendations in cases–is automatically a party to every ICC docket. The Illinois Attorney General’s Office is entitled by law to intervene in any ICC case it wants to.
Other parties–such as the City of Chicago, AARP Illinois and Public Interest Research Group (PIRG)–must petition the ICC to allow their intervention. Most often groups that intervene are opposing a utility rate hike, but labor groups, which often depend on utilities for jobs, may file in support of an increase.
Step #2 Discovery (approximately months 1-4)
Parties send each other data requests, often drafted by or with the guidance of the expert witnesses who will write testimony in support of their arguments. They typically have about 4 weeks to respond. The parties go back and forth with follow-up questions. Discovery continues throughout the testimony process. After each round of testimony, the turnaround time gets shorter (3 weeks, 2 weeks, 1 week, 3 days, etc.). Discovery is exchanged between parties, usually via email, but is not shared with the ALJ or the public unless and until it is attached to testimony that references it. Even then, some documents and any references to them are confidential (and redacted). Parties sometimes object to the inclusion of certain documents they produced in discovery from being included in the record at all. If the parties cannot resolve the objection, the ALJ settles the dispute.
Step #3 Expert witness testimony (approximately months 5-7)
After gathering all the information they need from each other during the discovery phase, ICC Staff and intervening parties (such as CUB) file “direct” testimony drafted by expert witnesses. Typically, in testimony parties against the proposed rate hikes will identify and correct errors and expose unreasonable assumptions the utility relied upon in determining how much money it needs from ratepayers.
The utility then has an opportunity to file “rebuttal” testimony defending its request (or admitting a mistake). ICC Staff and intervenors respond with their own rebuttal. Finally, the utility gets the last word in what’s called “surrebuttal.” Unlike traditional court cases, witness testimony is prepared, written, and filed online, as opposed to spoken live in a courtroom hearing.
Step #4 Evidentiary hearing (approximately month 7)
After testimony concludes, the ALJ conducts an evidentiary hearing where the evidence that may be referenced in the case is officially finalized.
All non-confidential testimony and pre-hearing motions the parties filed with the Commission online when they were due are available for download via e-Docket. (Type in the docket number and click “Documents.”) However, testimony and other documents parties submit at the hearing for admission into the record are not officially available for the parties to cite in their legal briefs (see below) until the ALJ approves them at the evidentiary hearing.
Most evidentiary hearings consist of lawyers for parties reading their lists of pre-filed testimony, which everyone already has seen, and possibly a few “cross exhibits” that parties typically already have reviewed privately to avoid objections at the hearing. However, if a party or the ALJ requests it, they may conduct an in-person cross-examination of any of the other parties’ witnesses. This would be the only time lawyers or the ALJ can directly question witnesses live. Usually, evidentiary hearings don’t feature any cross-examination, because after months of discovery and five rounds of testimony back and forth, most parties are out of questions and ready to present their cases. At the conclusion of the hearing, the ALJ marks the record “heard and taken,” ending the evidence-gathering phase.
Step #5 Briefs (approximately months 8-9)
After the evidentiary hearing, the parties’ lawyers file their Initial Brief making their affirmative case for why the law, as applied to the facts established by the evidence, supports their position in the case. Parties then file their Reply Brief, which responds to arguments other parties raised in their Initial Briefs. Unlike the testimony phase, where parties have separate filing dates, all parties’ legal briefs are due the same day. Parties also file “statements of positions,” which are summaries of their arguments from briefing, to assist the ALJ in drafting a Proposed Order (see below).
Step #6 Proposed Order (approximately months 10-11)
The ALJ assigned to a rate case will issue a Proposed Order summarizing the parties’ positions (typically using language from those parties’ statements of positions) and recommending how ICC commissioners should rule on each contested issue. These orders run hundreds of pages long, so if you’re in a hurry and looking specifically for the ALJ’s proposed ruling for each issue, look for the sections called “Commission Analysis and Conclusions.” The proposed order is just that, a proposal for how the ICC commissioners should rule in their Final Order. The Proposed Order is not final, but historically, the Illinois Commerce Commission’s Final Order usually differs little, if at all, from the ALJ’s Proposed Order.
Step #7 Exceptions
Parties who take issue with findings the ALJ made in the Proposed Order have two weeks after it’s published to file a Brief on Exceptions. This Brief provides suggested alternative language for the Final Order and explains where the party believes the Proposed Order got it wrong. A party may include in its Brief on Exceptions a request for oral argument on specific topics.
A week later, parties file Reply Briefs on Exceptions, reacting to any Brief on Exceptions they oppose.
We didn’t assign this “step” a number because most cases don’t have an oral argument. If a party requests oral argument and the Commission grants it, lawyers for parties present live oral arguments for the ICC and answer any questions the Commissioners ask. This is the closest ICC rate cases get to the court scenes you see on TV. The party that requested oral argument on the topic presents first, other parties respond, they go back and forth again, and then the requesting party gets the final word. Each party is limited to speaking a few minutes at a time, but Commissioners often have questions.
Step #8 Final Order (month 11)
The ICC issues a Final Order on the rate case and, unless there’s rehearing or a court appeal, the new rates go into effect on the first of the year.
Parties have 30 days to issue a petition for rehearing on specific issues, and the ICC has 20 days to respond to that petition. If the ICC grants rehearing, the disputed issues are the subject of an accelerated version of the testimony, briefing, and orders schedule described above.
If the ICC rejects the petition for rehearing, or after it issues its Final Order on Rehearing, parties have the option of appealing the case to the Illinois Appeals Court. Rehearing is granted from time to time, but court appeals are rare.
If you’re able, please give a donation to support CUB’s legal team as they work around the clock fighting for Illinois consumers. Since its inception in 1984, CUB has saved consumers more than $20 billion by blocking rate hikes and winning consumer refunds. In 2024, CUB will celebrate 40 years of fighting for consumers. Thank you for the support!