97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3258

 

Introduced 2/24/2011, by Rep. Robert W. Pritchard

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/9-220.3 new

    Amends the Public Utilities Act. Provides that a gas or electric utility may recover through an automatic adjustment clause tariff the costs associated with an investment in qualifying infrastructure facilities and such costs may be amortized over a 4-year period at the election of the utility, subject to certain limitations. Provides that the automatic adjustment clause tariff may be established outside the context of a general rate filing. Provides that the Commission shall review and, by order, approve or approve as modified the proposed tariff within 90 days after the date on which it was filed. Provides that the Commission shall not consider the availability or existence of an automatic adjustment clause tariff or any amounts of investments or revenue recovered by such tariff in its determination of a utility's rate of return on rate base. Defines "costs associated with an investment in qualifying infrastructure facilities", "Director", "qualifying infrastructure facilities", "qualifying projects", and "contributions in aid of construction". Makes other changes. Includes a severability clause. Effective immediately.


LRB097 10880 ASK 51401 b

 

 

A BILL FOR

 

HB3258LRB097 10880 ASK 51401 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Public Utilities Act is amended by adding
5Section 9-220.3 as follows:
 
6    (220 ILCS 5/9-220.3 new)
7    Sec. 9-220.3. Automatic adjustment clause tariff for
8investment in qualifying natural gas and electric utility
9infrastructure.
10    (a) For purposes of this Section:
11        (1) "Costs associated with an investment in qualifying
12    infrastructure facilities" means all costs incurred by the
13    utility associated with construction and installation of
14    qualifying infrastructure facilities that are not
15    reflected in the rate base used to establish the utility's
16    base rates, including, but not limited to, a return on the
17    capital investment in such facilities at the rate of return
18    on rate base approved in the utility's most recently
19    completed general rate case and depreciation expense
20    related to such facilities at the depreciation rate used in
21    the utility's most recently completed general rate case.
22        (2) "Director" means the Director of the Department of
23    Commerce and Economic Opportunity.

 

 

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1        (3) "Qualifying infrastructure facilities" means gas
2    or electric equipment and facilities used in connection
3    with the distribution and delivery of gas or electricity to
4    qualifying projects and include, but are not limited to,
5    new or replacement gas distribution mains, meters,
6    services, regulators and compressors, and new or
7    replacement electric distribution lines, substations, and
8    meters.
9        (4) "Qualifying projects" means new or expanded
10    customer facilities that are classified by the North
11    American Industry Classification System under
12    classification codes 424510 or 493130 or under
13    classification codes beginning with 31, 32, 33, 48, 49, 51,
14    52, 55, 56, or 62 and that have been certified by the
15    Director as being reasonably projected to create 50 or more
16    incremental full-time equivalent jobs associated with the
17    construction, installation, and operations of such
18    facilities within 12 months after the start of operations.
19        (5) "Contributions in Aid of Construction" means the
20    costs in excess of the free limits resulting from the
21    utility's implementation of Part 500.310, Part 500.320, or
22    Part 410.410 of the Illinois Administrative Code that are
23    to be paid by the customer. Such contributions shall be
24    calculated including a credit for the anticipated
25    incremental delivery service revenues resulting from the
26    project's first 3 years of operation. The utility shall

 

 

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1    supply the customer, upon request, (A) a detailed breakdown
2    of facilities cost estimate before construction begins and
3    (B) a final detailed cost statement upon project completion
4    if the utility intends to rebill the customer due to
5    variances from the estimate.
6    (b) A gas or electric utility shall be permitted, at its
7election, to recover through an automatic adjustment clause
8tariff the costs associated with investments in qualifying
9infrastructure facilities that have not been recovered from the
10customer as provided under subsection (d) of this Section, and
11such costs may be amortized over a 4-year period at the
12election of the utility. The automatic adjustment clause tariff
13may be established outside the context of a general rate
14filing, and the Commission shall review and, by order, approve
15or approve as modified the proposed tariff within 90 days after
16the date on which it was filed. The Commission shall not
17consider the availability or existence of an automatic
18adjustment clause tariff or any amounts of investments or
19revenue recovered by such tariff in its determination of a
20utility's rate of return on rate base.
21    Costs associated with investment in qualifying
22infrastructure facilities related to qualifying projects may
23be included for recovery under the automatic adjustment clause
24tariff in each of the first 3 years following the effective
25date of the tariff subject to the following limitations:
26        (1) For a gas or electric utility that serves 3,000,000

 

 

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1    or more customers, the costs associated with investments in
2    qualifying infrastructure facilities shall not exceed:
3    $20,000,000 in the first year, an additional $15,000,000 in
4    the second year, and an additional $10,000,000 in the third
5    year.
6        (2) For a gas or electric utility that serves less than
7    3,000,000 customers but more than 250,000 customers, the
8    costs associated with investments in qualifying
9    infrastructure facilities shall not exceed: $6,600,000 in
10    the first year, an additional $5,000,000 in the second
11    year, and an additional $3,300,000 in the third year.
12        (3) For a gas or electric utility that serves 250,000
13    or less customers, the costs associated with investments in
14    qualifying infrastructure facilities shall not exceed:
15    $1,500,000 in the first year, an additional $1,000,000 in
16    the second year, and an additional $500,000 in the third
17    year.
18    Costs included for recovery under the automatic adjustment
19clause tariff during the first 3 years following the effective
20date of the tariff shall continue to be recovered through the
21tariff following such 3-year period until the costs are fully
22recovered. In the event that the number of qualifying projects
23related to a gas or electric utility is anticipated to cause
24the limitations set forth in this subsection (b) to be
25exceeded, qualifying projects shall be prioritized in the order
26in which the Director approves the projects.

 

 

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1    (c) A gas or electric utility that has implemented an
2automatic adjustment clause tariff approved by the Commission
3pursuant to this Section may effectuate a change in its
4surcharge pursuant to the provisions of this Section no more
5than twice every 12 months, provided, however, that if the
6utility's investments require a change in the surcharge more
7than twice in a 12-month period to fully recover such
8investments, then the utility shall be permitted to record and
9defer those costs plus carrying charges as a regulatory asset
10to be included for recovery through the automatic adjustment
11clause tariff the next time the surcharge is changed. At such
12time as the regulatory asset is included in the next change to
13the surcharge, it shall, consistent with subsection (b) of this
14Section, be amortized over a 4-year period.
15    (d) Customers with qualifying projects may elect to have
16their Contributions in Aid of Construction capped at 25% of the
17calculated value or $250,000, whichever is less. Any customer
18who elects to have the Contribution in Aid of Construction
19capped waives the right to refunds that would otherwise result
20if other customers are connected to qualifying infrastructure
21facilities.
22    (e) In the event the Commission issues an order
23establishing customer rates in a general rate proceeding or a
24proceeding pursuant to subsection (c) or (d) of Section
2516-108.5 or subsection (c) or (d) of Section 19-150 of the Act
26that incorporates in the utility's base rates all costs

 

 

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1associated with the utility's investments in qualifying
2infrastructure facilities that were prudently incurred and
3reasonable in amount, the utility shall file revised rate
4schedules to reset the surcharge in the automatic adjustment
5clause tariff to zero.
6    (f) This Section is repealed on December 31, 2014, provided
7that such repeal shall have no impact on the validity or
8continued operation of a tariff approved by the Commission
9pursuant to this Section.
 
10    Section 97. Severability. The provisions of this Act are
11severable under Section 1.31 of the Statute on Statutes.
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.