Plaintiff, Central Illinois Public Service Company,d/b/a AmerenCIPS (CIPS), is an Illinois public utility. Defendant, Illinois Rural Electric Company (IREC), is an Illinois not-for-profit corporation organized on a cooperative basis for thepurpose of furnishing and distributing electrical energy. Bothare electric suppliers within the meaning of the Electric Supplier Act (Act) (220 ILCS 30/1 through 16 (West 2000)).

Since November 12, 1957, IREC has provided electricalservice to the Schimmel farm in Pike County. On June 26, 1969,IREC and CIPS entered into a service-area agreement (agreement)delineating the service areas in which each was entitled toprovide electric service to customers. The boundary line established by the agreement ran through the Schimmel farm.

A portion of the Schimmel premises was eventuallytransferred to the Akers in 1988 and is currently owned by themin the form of the Oakbrook Subdivision. Another portion waseventually transferred to the Longs in 1995, and a third portionwas eventually transferred to Paxton in 1997. The Long premisesare divided approximately in half by the boundary line established by the agreement. The Paxton premises and the OakbrookSubdivision are located wholly on the IREC side of the boundaryline.

The three tracts were annexed to the City of Pittsfieldin 1995. Although they were not on the CIPS side of the boundaryline, and CIPS had not previously furnished service to them or tothe Schimmel premises, CIPS connected electric service to thePaxton premises and several lots in the Oakbrook Subdivision in1997. CIPS connected electrical service to the Long premises in1996, but none of that service is supplied or used on IREC's sideof the boundary line. In 1997, IREC filed a complaint with theIllinois Commerce Commission (Commission) regarding service tothe Long premises. In 1998, IREC filed an amended complaintregarding service to the Paxton premises and Oakbrook Subdivision. The Commission ruled in favor of CIPS as to the Longpremises and in favor of IREC as to the Paxton premises andOakbrook Subdivision (ICC No. 97-0287).

The Commission referred to the following provisions ofthe agreement between CIPS and IREC as relevant to the instantdispute.

Paragraph one provides that "[t]he parties heretocovenant and agree that each shall continue to be entitled to (a)furnish service to customers at locations which each was servingon July 2, 1965." (Emphasis added.)

Paragraph two provides:

"[T]he parties hereby covenant and agree that [IREC] shall be entitled exclusively to serve all consumers with their electric service requirements in the area or areas designated as IREC on the maps hereto attached as Appendices 1 to 8, inclusive, and [CIPS] shall be entitled exclusively to serve all consumers with their electric service requirements in the areas designated as CIPS on said Appendices 1 to 8, inclusive, provided, however, that each party may continue to serve any location or premises which it is entitled to serve under paragraph 1 above even though such locations or premises be located in the areas designated on Appendices 1 to 8, inclusive, as the area of the other party ***."

Paragraph six provides:

"The future annexation into a municipality of any part or all of the service areas of one or both the parties hereto shall not affect this [a]greement provided that such party whose service area or areas, or a part thereof, is, or are, annexed in wholeor in part, can or does qualify to serve in such municipal area under the provisions of [s]ection 14 of the Electric Supplier Act, as approved July 2, 1965. If such party does not or cannot so qualify then the right to serve in such area shall be determined under the Electric Supplier Act as approved July 2, 1965."

Service-area agreements control the rights of theparties to such agreements, to the exclusion of the Act, exceptinsofar as the agreement incorporates the Act. Rural ElectricConvenience Cooperative Co. v. Illinois Commerce Comm'n, 75 Ill.2d 142, 146, 387 N.E.2d 670, 672 (1979). The Commission concluded that neither CIPS nor IREC had any rights to continue tofurnish service under paragraph one of the agreement, the "grandfather" clause, because none of these three tracts were a "location" served by IREC or CIPS on July 2, 1965. The Commissionheld that a "location" in the context of paragraph one means "aparticular point at which electricity is being supplied, ratherthan an entire farm or tract of land on which there is at leastone service point." Central Illinois Public Service Co. v.Illinois Commerce Comm'n, 219 Ill. App. 3d 291, 299, 579 N.E.2d1200, 1205 (1991) (hereinafter Canton Prison). IREC was providing electrical service to the Schimmel premises on July 2, 1965,but the point at which electricity was supplied by IREC was noton the three tracts in dispute.

The Commission concluded that CIPS had the exclusiveright to provide service to the Long premises. The Long premiseswere on CIPS's side of the boundary line. Although the Longpremises had been annexed to the City of Pittsfield, CIPS "can ordoes qualify to serve in such municipal area" as required byparagraph six of the agreement.

Although the Paxton premises and Oakbrook Subdivisionwere on IREC's side of the boundary line, the Commission, referring to paragraph six of the agreement, held that IREC "does notqualify to serve in such municipal area under section 14 of theAct due to its lack of a franchise with the City of Pittsfield." Because the issue accordingly was not controlled by the agreement, the Commission looked to section 5, the grandfather clauseof the Act:

"Each electric supplier is entitled, except as otherwise provided in this Act or (in the case of public utilities) the Public Utilities Act, to (a) furnish service to customers at locations which it is serving on the effective date of this Act ***." (Emphasis added.) 220 ILCS 30/5 (West 2000).

In applying the Act, the Commission used a different definitionof "location" than it did with the grandfather clause in theagreement, despite their identical language:

"In order to constitute a separate location [under section 5], there must be some feature of the area in question which would set it apart from the surrounding parcels. A public road, a body of water, or a legal division (such as platting or subdividing the land) all could serve to distinguish one location from the surrounding area." Coles-Moultrie Electric Cooperative v. Illinois Commerce Comm'n, 76 Ill. App. 3d 165, 167, 394 N.E.2d 1068, 1069 (1979).

The Commission concluded that the entire Schimmel premises was a"location" for purposes of section 5 of the Act, and there wereno separating features that would break it into separate locations. Therefore, since the Paxton premises and Oakbrook Subdivision were located within the geographical boundaries of theSchimmel premises as of July 2, 1965, IREC, which at that timesupplied electrical service to the Schimmel farm, had the exclusive right to serve the Paxton premises and Oakbrook Subdivision. On May 7, 2002, the circuit court affirmed the decisionof the Commission in Sangamon County case No. 99-MR-0333. CIPSappeals, arguing the Commission should have applied the CantonPrison "particular point at which electricity is being supplied"definition of "location" to section 5, rather than the broadColes-Moultrie "feature which would set it apart" definition. Itis not clear how that would help CIPS. Even if IREC's rightsunder section 5 were limited to the Schimmel point of supply,CIPS did not furnish service to the three tracts on the effectivedate of the Act. Since neither IREC nor CIPS served any particular point in the three tracts, the outcome would depend on wherethe boundary line was drawn in the agreement. CIPS also arguesthat the use of a broad definition in the section 5 grandfatherclause interferes with the rights of municipalities to grantfranchises.

On May 28, 2002, the City of Pittsfield granted IREC afranchise that apparently includes the Paxton premises andOakbrook Subdivision. IREC has moved to dismiss CIPS's appeal onthat basis. CIPS, however, argues that, at the time it began tofurnish service to the Paxton premises and Oakbrook Subdivision,it had municipal franchise authority to serve those customers andIREC did not. CIPS argues that IREC's after-acquired municipalfranchise authority should not be dispositive of this case. CIPSalso questions whether the Pittsfield ordinance in fact coversthe Paxton premises and the Oakbrook Subdivision and suggeststhat IREC should not be allowed to supplement the record withmatters that were not considered by the Commission.

Canton Prison involved the 545-acre Gavenda farm, whichwas serviced at one point by CIPS and at two points by SpoonRiver Electric Cooperative (SREC). The State decided to build aprison on 100 acres of the farm, with 92.9% of the electric usagein SREC's area, as set out in the service-area agreement, and7.1% of the usage in CIPS's area. CIPS argued that because itfurnished service to the location (the farm but not the 100acres) on the effective date of the Electric Supplier Act, as didSREC, both had an equal right to serve the entire tract and theDepartment of Corrections could select either to supply theentire prison tract. The court rejected that argument, concluding that the parties, in their agreement, intended the word"locations" to mean the particular point at which electricity issupplied, rather than an entire farm or tract. Canton Prison,219 Ill. App. 3d at 299, 579 N.E.2d at 1205.

The court's holding in Canton Prison was that theservice-area agreement executed by the parties should control. "It must be assumed that when a service-area agreement is executed, the parties have a full understanding of what present andcontemplated service facilities they have in and near the areasallocated to them, and that they intend to abide by the terms ofthe agreement, despite the presence of facilities in or near anarea allocated to the other supplier." Canton Prison, 219 Ill.App. 3d at 300, 579 N.E.2d at 1205-06. The parties had drawntheir boundaries, and the court was unwilling to read the grandfather clause to render the drawn boundaries meaningless for anentire 545-acre tract.

The Commission gave the same effect to the service-areaagreement boundary line in this case. CIPS was allowed toprovide service to the Long premises, which were on its side ofthe boundary line, even though IREC had elsewhere providedservice to the Schimmel farm. IREC was allowed to provideservice to the Paxton premises and Oakbrook Subdivision, whichwere on its side of the boundary line. We disagree with theCommission's conclusion that this case must be decided under theAct and not under the agreement since "IREC does not qualify toserve in such municipal area under [s]ection 14 of the [Act] dueto its lack of a franchise with the City of Pittsfield." Theagreement refers back to the Act only if "such party does not orcannot so qualify." The fact that IREC had not obtained afranchise did not mean that it could not do so. The Commissionshould have decided this case under the agreement's grandfatherclause, in the light of the boundary line drawn by the parties,and not under the Act's grandfather clause. We reaffirm ourholding in Canton Prison, that in interpreting a service-areaagreement's grandfather clause, the word "locations" should beinterpreted narrowly to mean the particular point at whichelectricity is being supplied. Exceptions to the boundary linedrawn by the parties should be narrowly construed.

We also agree with Coles-Moultrie, that when there isno service-area agreement, and no agreed-upon boundary line, andperhaps the only basis for the resolution of the dispute is thedetermination who previously furnished electrical service, abroad definition of "location" should be employed. The entirepremises should be considered a location unless there is somefeature such as a public road, a body of water, or a legaldivision, which would set it apart from the surrounding parcels. Coles-Moultrie, 76 Ill. App. 3d at 167, 394 N.E.2d at 1069.

Finally, we reject CIPS's argument that the use of abroad definition in the Act's grandfather clause somehow interferes with the rights of municipalities to grant franchises. "Nothing in this Act shall be construed to impair, abridge, ordiminish in any way the powers, rights[,] and privileges ofincorporated municipalities." 220 ILCS 30/14 (West 2000). Weare confident that the City of Pittsfield has the ability toprotect itself against any interference with its rights.

A second decision of the Commission (ICC No. 99-0646)was consolidated in the administrative review proceedings in thecircuit court and is a part of this appeal. That case, SangamonCounty case No. 01-MR-0071, involved the same service-areaagreement between IREC and CIPS. IREC provided service to theBybee farm north of the Village of Pleasant Hill (Village), andthe entire farm is on the IREC side of the boundary line. Aportion of the Bybee farm was platted as the Capps Subdivisionand annexed by the Village in 1998. CIPS possessed a franchisefrom the Village, and IREC did not. CIPS connected service totwo houses in the subdivision in 1998 and 1999. IREC filed acomplaint with the Commission in 1999. On November 21, 2000, theCommission ruled in favor of IREC, employing an analysis similarto that set out above. On August 22, 2002, the Village grantedIREC a franchise, which apparently includes the Capps Subdivision.

For the foregoing reasons, we affirm the decision ofthe circuit court, affirming the decisions of the Commission inthese two consolidated cases.

Affirmed.

TURNER and APPLETON, JJ., concur.