Fahner appeals ComEd rate hike

ATTY. GEN. Tyrone Fahner filed an appeal August 18 in the Cook County Circuit Court asking the court to review the 15 percent hike granted Commonwealth Edison by the Illinois Commerce Commission (IlCC) July 1. Fahner's appeal of the rate hike is the first of its kind by an attorney general in Illinois.

Fahner had applied for a rehearing on the rate hike before the IlCC in July, but the commission denied the request August 12. Michael Hasten, chairman of the IlCC, said that the application for rehearing was denied because the commission had already "amply and fully responded" to the points raised by the attorney general. "If [Fahner] had raised new issues or offered new evidence, we would have granted the rehearing," Hasten said, "but after 58 public hearings and thousands of pages of testimony, I think I can say we were quite comprehensive." Hasten added that the utility had requested a rate hike of over 19 percent and that the commission had also denied Commonwealth Edison's application for a rehearing, "so nobody's really happy with this one."

In his application for rehearing, Fahner said that the rate increase, which would generate up to $527 million in additional revenue for the utility and is the largest in state history, was granted on the basis of Commonwealth Edison's own management audit, rather than on an independent examination of the company. Farmer was especially critical of the interim rate hike of 8.9 percent (generating $282 million in revenue) which had been granted the utility on an emergency basis in November 1980. He said there are no consistent standards for interim rate relief.

"Commonwealth Edison's actual 1980 total electric generating income exceeded the forecasted 1980 income by $14.8 million," Fahner said. "As a result of an earlier $389.6 million rate increase granted the utility in February of 1980 — nine months before the interim request — Commonwealth Edison's operating income, operating revenues, net income, rate of return and coverage rates . . . were projected to continue to increase."

Fahner also asserted that the IlCC had erroneously included 15 percent of construction-work-in-progress costs in the utility's rate base.

Last November Fahner established a public utilities division in the Attorney General's Office. Its primary purpose is to "challenge data in rate cases," according to W. Paul Zemitzsch, director of policy and planning. The legislature appropriated $200,000 for the division this spring to hire outside specialists in the public utilities field.           John G. Martin

Thompson reassigns functions of Lt. Gov's Office

THE PROGRAMS and personnel of the Lieutenant Governor's Office were reassigned by executive order to the governor's office, due to the resignation of Lt. Gov. Dave O'Neal July 31. Executive Order No. 4, which Gov. James R. Thompson signed the day O'Neal resigned, affects the senior citizen services formerly in the lieutenant governor's office. In his executive order the governor also named Frank Beal, director of the Institute of Natural Resources, to replace O'Neal as chairman of the Illinois Energy Advisory Council on Coal Development. David Kenney, director of the Department of Conservation, had earlier succeeded O'Neal as acting chairman of the Abandoned Mined Lands Reclamation Council.

State Mandates Act

Units of local government in Illinois have saved approximately $2 billion since the State Mandates Act went into effect January 1, 1981, announced Gov. James R. Thompson in July. The act prohibits the state from imposing additional

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expenditures on a local government or removing a local revenue source unless it reimburses that government for its added expense. During the spring legislative session, the Mandates Review Office in the Department of Commerce and Community Affairs determined that 52 bills affecting local governments required reimbursement appropriations. All 52 were defeated in the General Assembly. Pat O'Grady, a state mandates review officer, said he didn't think the reimbursement requirement directly caused the defeat of all 52 bills, but that "from the comments of legislative staffs and from floor debate," it was sometimes a big reason for the defeat of a bill.

Combined apportionment regs for corporate income tax

Emergency regulations outlining how some multi-state and multi-national corporations should utilize the combined apportionment method to calculate Illinois income tax liabilities were filed in the Secretary of State's Office by the Department of Revenue July 16. The regulations became effective immediately, and, pending action by the legislative Joint Committee on Administrative Rules, supersede some existing income tax regulations. Jerry Stewart, manager of research and tax policy for the department, said that there would be "some [corporate] winners and losers with this method. We don't have any projections about what the state stands to gain, but looking at other states [that use the unitary method], we think Illinois will gain revenue."

In the combined apportionment method, upheld in February by the Illinois Supreme Court, each subsidiary of a corporation is looked at, not as a separate company, but as a unitary business group when reporting taxes (see Judicial Rulings, May, p. 34).

The emergency regulations were published in the July 17 Illinois Register, which is available from the rules division of the Secretary of State's Office.

Metro Area Rail Gateway Enterprise

The federal Railroad Administration has approved the draft environmental impact study of the St. Louis Metro Area Rail Gateway Enterprise (MARGE) project, the governor's office said July 31. The project, a $500 million restructuring and consolidation of railyards in the metro-east area of St. Louis, will be financed by a mixture of federal preference shares and other public and private funds. Federal funds are necessary for project completion, and are dependent upon approval of the final environmental impact statement and approval of construction plans by the Railroad Administration and Congress. In reconciling the federal budget, Congress reaffirmed its support for $110 million in preference share financing — in effect, low-cost loans to be repaid over the next 30 years — for rail rehabilitation work and designated MARGE as a priority. Congress still has to appropriate the money, however.

Funeral directors and embalmers

Illinois funeral directors and embalmers would be prohibited from making false statements about the laws concerning disposal of human remains, or other misleading statements if proposed rule changes for the administration of the Funeral Directing and Embalming Act are adopted by the state Department of Registration and Education. The proposed changes include prohibitions against making false statements about the need for embalming or a casket in cremations, suggesting that a customer's expressed interest in inexpensive funeral merchandise or services is improper or disrespectful, or discouraging the purchase of funeral merchandise offered on sale in order to sell a customer more expensive merchandise.

Advocating for the arts

A statewide arts advocacy group, Concerned Citizens for the Arts, has been formed to encourage public and private sector support for the arts in Illinois. At its organizing meeting in June, the new group decided on an agenda of public and legislative education designed to stimulate support of the arts. The group includes representatives of community arts councils, independent arts organizations, educational institutions, labor and business, major cultural institutions, and public broadcasting stations.

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