SB3124 93RD GENERAL ASSEMBLY

LRB093 15700 AMC 46480 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB3124

Introduced 2/6/2004, by Jacqueline Y. Collins

SYNOPSIS AS INTRODUCED:

220 ILCS 5/5-108.1 new
220 ILCS 5/8-207.2 new
220 ILCS 5/8-207.5 new
220 ILCS 5/8-306 new
305 ILCS 20/4.5 new
305 ILCS 20/13

Amends the Public Utilities Act. Provides that every public utility that provides gas or electric service to residential customers as primary or secondary sources of heating or cooling must report all of the following information annually in writing to the Illinois Commerce Commission: (1) the number of accounts that are past due each month, (2) the aggregate amount of past due balances each month, (3) the number of disconnection notices issued to residential customers each month, (4) the number of residential customers disconnected each month, (5) the number of residential customers eligible for emergency services under the Energy Assistance Act each year, and (6) the aggregate amount of arrears that are written off as bad business debt each year. Requires a utility to reconnect service to LIHEAP-eligible households whose service was disconnected for nonpayment if the consumer (i) pays 20% of the outstanding bill for the household or $250, whichever is less or (ii) agrees to a payment plan negotiated with the public utility by the local area agency on behalf of the consumer. Requires an electric or gas public utility to participate in the Percentage of Income Payment Plan established under the Energy Assistance Act and establish and implement an arrearage reduction program for consumers who are participating in the Plan. Provides that, if a public utility writes off uncollectable account arrearages as a bad business debt on its State or federal income tax return, the utility shall cease all collection activities for that debt and write the indebtedness off of its books. Amends the Energy Assistance Act. Requires the Department of Commerce and Economic Opportunity to institute a Percentage of Income Payment Plan to ensure the availability of heating, cooling, and electric service to low income citizens. Requires that the Plan be in operation by November 1, 2005. Authorizes the Department to enter into contracts and other agreements with local agencies for the purpose of administering the Plan. Provides that monies in the Supplemental Low-Income Energy Assistance Fund be used to to fund the Plan. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning public utilities.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Public Utilities Act is amended by adding Sections 5-108.1, 8-207.2, 8-207.5, and 8-306 as follows:

(220 ILCS 5/5-108.1 new)

Sec. 5-108.1. Report. Every public utility that provides gas or electric service to residential customers as primary or secondary sources of heating or cooling must report all of the following information annually in writing to the Illinois Commerce Commission:

(1) The number of accounts that are past due each month.

(2) The aggregate amount of past due balances each month.

(3) The number of disconnection notices issued to residential customers each month.

(4) The number of residential customers disconnected each month.

(5) The number of residential customers eligible for emergency services under the Energy Assistance Act each year.

(6) The aggregate amount of arrears that are written off as bad business debt each year.

(220 ILCS 5/8-207.2 new)

Sec. 8-207.2. Reconnection of LIHEAP-eligible households. Notwithstanding any other provision of this Act, a utility must reconnect service to LIHEAP-eligible households whose service was disconnected for nonpayment if the consumer (i) pays 20% of the outstanding bill for the household or $250, whichever is less or (ii) agrees a payment plan negotiated with the public utility by the local area agency on behalf of the consumer. Before reconnecting service a utility shall not impose any other condition upon a LIHEAP-eligible household except those provided in this subsection.

(220 ILCS 5/8-207.5 new)

Sec. 8-207.5. Percentage of Income Payment Plan.

(a) An electric or gas public utility that provides service to consumers in Illinois must participate in the Percentage of Income Payment Plan established under the Energy Assistance Act.

(b) As a part of the Percentage of Income Payment Plan, an electric or gas public utility must establish and implement an arrearage reduction program for consumers who are participating in the Plan. The arrearage reduction program shall provide that one-tenth of a participant's arrearage shall be reduced for every 3 months of timely monthly payments under the Plan.

(c) Notwithstanding any other provision of this Act, an electric or gas public utility may not disconnect service to any residential customer who is a participant in the Percentage of Income Payment Plan.

(220 ILCS 5/8-306 new)

Sec. 8-306. Bad business debt. If a public utility writes off uncollectable account arrearages as a bad business debt on its State or federal income tax return, the utility shall cease all collection activities for that debt and write the indebtedness off of its books.

Section 10. The Energy Assistance Act is amended by changing Section 13 and by adding Section 4.5 as follows:

(305 ILCS 20/4.5 new)

Sec. 4.5. Percentage of Income Payment Plan.

(a) As part of the energy assistance program established under Section 4, the Department must institute a Percentage of Income Payment Plan to further ensure the availability of heating, cooling, and electric service to low income citizens. The Department shall implement the Plan by rule. The Plan shall be consistent with the objectives of this Section. The Department shall ensure that the Plan is in operation by November 1, 2005, and may enter into such contracts and other agreements with local agencies as may be necessary for the purpose of administering the Plan.

(b) Illinois energy assistance consumers shall have the option of participating in the Percentage of Income Payment Plan. The Percentage of Income Payment Plan shall be a year-round program that requires participants to pay 7% of their income for the primary energy source for heating and cooling and 3% of their income for the secondary energy source for heating and cooling. Households that use electricity as their sole energy source can elect to participate in the Percentage of Income Payment Plan and pay 10% of their income to the utility supplying electricity. All percentage of income payments shall first be applied to the consumer's current monthly payment obligation. For months in which the consumer's payment under the Percentage of Income Payment Plan exceeds his or her current bill, the balance of the payment shall be applied to any default under a deferred payment plan or, if none, to the consumer's arrearage, if any. If there is no default amount or arrearage, the overpayment shall be retained by the utility and treated as a budget plan payment to be credited to the consumer against potential arrearages in the future. For months in which the consumer's payment under the Percentage of Income Payment Plan is less than his or her current bill, the balance of the current bill shall be paid to the utility out of the State LIHEAP fund. Prior to entering into a Percentage of Income Payment Plan, the local area agency shall counsel the consumer as to the possible benefits of the Percentage of Income Payment Plan and will work with the consumer to develop an energy payment plan that meets the needs of the consumer.

(c) The amount of a consumer's percentage of income payment shall be based on an annual report on average energy usage issued by the Illinois Department of Natural Resources. Any consumption of energy over the average use amount shall be the responsibility of the consumer.

(d) The LIHEAP flat grant direct vendor payment program in existence prior to the effective date of this amendatory Act of the 93rd General Assembly shall continue in effect for eligible consumers that (i) have utility costs included as an undesignated portion of the rent("heat-in-rent" consumers) or (ii) have home-delivered fuel or that purchase fuel in bulk for residential use. However, "heat-in-rent" consumers who pay separately for electricity may participate in a 3% percentage of income payment plan, and "electricity-in rent" consumers who pay separately for gas service may participate in a 7% percentage of income payment plan.

(e) A LIHEAP flat grant shall be available to eligible consumers who elect not to participate in the Percentage of Income Payment Program. The amount of the flat grant shall be set by the Department of Commerce and Economic Opportunity in consultation with the Policy Advisory Committee, taking into consideration the amount of available LIHEAP funds. The flat grant amount shall be set at a level that encourages participation in the Percentage of Income Payment Plan.

(f) Emergency Services grants under LIHEAP shall be limited to the amount necessary to reconnect service to the household unless another emergency exists such as the need for repairs or service in the dwelling.

(g) The General Assembly finds that energy efficiency is an important component of LIHEAP because it helps the State control costs by lowering the heating and cooling bills of eligible consumers. The Department, in consultation with the Policy Advisory Committee, shall establish an energy efficiency and weatherization program targeted, to the extent practicable, to high-cost high-volume use buildings occupied by LIHEAP-eligible consumers with the goal of reducing the energy bills of the occupants. Acceptance of energy efficiency and weatherization services provided under LIHEAP shall be a condition for participation in the Percentage of Income Payment Plan. The energy efficiency component of LIHEAP shall (i) target the highest cost households for weatherization and (ii) provide no-cost or low-cost efficiency strategies for all participants. The Department and the Policy Advisory Committee shall review appropriate data provided by consumers, local area agencies and other appropriate sources in deciding how to target energy efficiency resources.

(h) The costs of operating the Percentage of Income Payment Plan as part of LIHEAP shall be paid out of the Supplemental Low-Income Energy Assistance Fund. To meet the anticipated increase in costs, the following portfolio of funding sources for the State LIHEAP fund shall be added to existing funding sources:

(1) The Department shall use financial hedging tools to minimize its vulnerability to periodic swings in the cost of natural gas. The Department, in consultation with the Policy Advisory Committee, shall predetermine the annual amount of LIHEAP funding available for hedging strategies. This amount shall be based on projections of the cost of natural gas and the projected natural gas consumption by consumers participating in a Percentage of Income Payment Plan. The Department shall put out for competitive bidding the development and implementation of the hedging strategy. Money saved by the use of hedging strategies in colder-than-normal winters shall be used to pay for the cost of hedging strategies during warmer-than-normal winters.

(2) The Department shall apply the savings realized from lower flat grants to LIHEAP-eligible consumers who opt not to participate in the Percentage of Income Payment Plan and lower average emergency services grants to help cover the additional costs of the energy assistance program changes created by this amendatory Act of the 93rd General Assembly.

(3) The savings in LIHEAP funds resulting from the alleviation of arrearages for eligible consumers resulting from the program changes created by this amendatory Act of the 93rd General Assembly shall by applied to help cover the additional costs resulting from this amendatory Act of the 93rd General Assembly.

(4) Bulk purchasing and other cost-saving practices shall be used to reduce LIHEAP expenditures. These savings shall be applied to the additional costs created by this amendatory Act of the 93rd General Assembly.

(5) Interest earned on funds deposited in the LIHEAP funds shall be applied to the cost of the LIHEAP program.

(i) The Department may adopt any rules necessary for the implementation of this Section.

(305 ILCS 20/13)

Sec. 13. Supplemental Low-Income Energy Assistance Fund.

(a) The Supplemental Low-Income Energy Assistance Fund is hereby created as a special fund in the State Treasury. The Supplemental Low-Income Energy Assistance Fund is authorized to receive, by statutory deposit, the moneys collected pursuant to this Section. Subject to appropriation, the Department shall use moneys from the Supplemental Low-Income Energy Assistance Fund for payments to electric or gas public utilities, municipal electric or gas utilities, and electric cooperatives on behalf of their customers who are participants in the program authorized by Section 4 of this Act, for administration of the Percentage of Income Payment Plan under Section 4.5 of this Act, for the provision of weatherization services and for administration of the Supplemental Low-Income Energy Assistance Fund. The yearly expenditures for weatherization may not exceed 10% of the amount collected during the year pursuant to this Section. The yearly administrative expenses of the Supplemental Low-Income Energy Assistance Fund may not exceed 10% of the amount collected during that year pursuant to this Section.

(b) Notwithstanding the provisions of Section 16-111 of the Public Utilities Act but subject to subsection (k) of this Section, each public utility, electric cooperative, as defined in Section 3.4 of the Electric Supplier Act, and municipal utility, as referenced in Section 3-105 of the Public Utilities Act, that is engaged in the delivery of electricity or the distribution of natural gas within the State of Illinois shall, effective January 1, 1998, assess each of its customer accounts a monthly Energy Assistance Charge for the Supplemental Low-Income Energy Assistance Fund. The delivering public utility, municipal electric or gas utility, or electric or gas cooperative for a self-assessing purchaser remains subject to the collection of the fee imposed by this Section. The monthly charge shall be as follows:

(1) $0.40 per month on each account for residential electric service;

(2) $0.40 per month on each account for residential gas service;

(3) $4 per month on each account for non-residential electric service which had less than 10 megawatts of peak demand during the previous calendar year;

(4) $4 per month on each account for non-residential gas service which had distributed to it less than 4,000,000 therms of gas during the previous calendar year;

(5) $300 per month on each account for non-residential electric service which had 10 megawatts or greater of peak demand during the previous calendar year; and

(6) $300 per month on each account for non-residential gas service which had 4,000,000 or more therms of gas distributed to it during the previous calendar year.

(c) For purposes of this Section:

(1) "residential electric service" means electric utility service for household purposes delivered to a dwelling of 2 or fewer units which is billed under a residential rate, or electric utility service for household purposes delivered to a dwelling unit or units which is billed under a residential rate and is registered by a separate meter for each dwelling unit;

(2) "residential gas service" means gas utility service for household purposes distributed to a dwelling of 2 or fewer units which is billed under a residential rate, or gas utility service for household purposes distributed to a dwelling unit or units which is billed under a residential rate and is registered by a separate meter for each dwelling unit;

(3) "non-residential electric service" means electric utility service which is not residential electric service; and

(4) "non-residential gas service" means gas utility service which is not residential gas service.

(d) At least 45 days prior to the date on which it must begin assessing Energy Assistance Charges, each public utility engaged in the delivery of electricity or the distribution of natural gas shall file with the Illinois Commerce Commission tariffs incorporating the Energy Assistance Charge in other charges stated in such tariffs.

(e) The Energy Assistance Charge assessed by electric and gas public utilities shall be considered a charge for public utility service.

(f) By the 20th day of the month following the month in which the charges imposed by the Section were collected, each public utility, municipal utility, and electric cooperative shall remit to the Department of Revenue all moneys received as payment of the Energy Assistance Charge on a return prescribed and furnished by the Department of Revenue showing such information as the Department of Revenue may reasonably require. If a customer makes a partial payment, a public utility, municipal utility, or electric cooperative may elect either: (i) to apply such partial payments first to amounts owed to the utility or cooperative for its services and then to payment for the Energy Assistance Charge or (ii) to apply such partial payments on a pro-rata basis between amounts owed to the utility or cooperative for its services and to payment for the Energy Assistance Charge.

(g) The Department of Revenue shall deposit into the Supplemental Low-Income Energy Assistance Fund all moneys remitted to it in accordance with subsection (f) of this Section.

(h) (Blank).

On or before December 31, 2002, the Department shall prepare a report for the General Assembly on the expenditure of funds appropriated from the Low-Income Energy Assistance Block Grant Fund for the program authorized under Section 4 of this Act.

(i) The Department of Revenue may establish such rules as it deems necessary to implement this Section.

(j) The Department of Commerce and Economic Opportunity Community Affairs may establish such rules as it deems necessary to implement this Section.

(k) The charges imposed by this Section shall only apply to customers of municipal electric or gas utilities and electric or gas cooperatives if the municipal electric or gas utility or electric or gas cooperative makes an affirmative decision to impose the charge. If a municipal electric or gas utility or an electric cooperative makes an affirmative decision to impose the charge provided by this Section, the municipal electric or gas utility or electric cooperative shall inform the Department of Revenue in writing of such decision when it begins to impose the charge. If a municipal electric or gas utility or electric or gas cooperative does not assess this charge, the Department may not use funds from the Supplemental Low-Income Energy Assistance Fund to provide benefits to its customers under the program authorized by Section 4 of this Act.

In its use of federal funds under this Act, the Department may not cause a disproportionate share of those federal funds to benefit customers of systems which do not assess the charge provided by this Section.

This Section is repealed effective December 31, 2007 unless renewed by action of the General Assembly. The General Assembly shall consider the results of the evaluations described in Section 8 in its deliberations.

(Source: P.A. 92-690, eff. 7-18-02; revised 12-6-03.)

Section 99. Effective date. This Act takes effect upon becoming law.