HB3258 97TH GENERAL ASSEMBLY

LRB097 10880 ASK 51401 b

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.

A BILL FOR

AN ACT concerning regulation.

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 Section 9-220.3 as follows:

(220 ILCS 5/9-220.3 new)

Sec. 9-220.3. Automatic adjustment clause tariff for investment in qualifying natural gas and electric utility infrastructure.

(a) For purposes of this Section:

(1) "Costs associated with an investment in qualifying infrastructure facilities" means all costs incurred by the utility associated with construction and installation of qualifying infrastructure facilities that are not reflected in the rate base used to establish the utility's base rates, including, but not limited to, a return on the capital investment in such facilities at the rate of return on rate base approved in the utility's most recently completed general rate case and depreciation expense related to such facilities at the depreciation rate used in the utility's most recently completed general rate case.

(2) "Director" means the Director of the Department of Commerce and Economic Opportunity.

(3) "Qualifying infrastructure facilities" means gas or electric equipment and facilities used in connection with the distribution and delivery of gas or electricity to qualifying projects and include, but are not limited to, new or replacement gas distribution mains, meters, services, regulators and compressors, and new or replacement electric distribution lines, substations, and meters.

(4) "Qualifying projects" means new or expanded customer facilities that are classified by the North American Industry Classification System under classification codes 424510 or 493130 or under classification codes beginning with 31, 32, 33, 48, 49, 51, 52, 55, 56, or 62 and that have been certified by the Director as being reasonably projected to create 50 or more incremental full-time equivalent jobs associated with the construction, installation, and operations of such facilities within 12 months after the start of operations.

(5) "Contributions in Aid of Construction" means the costs in excess of the free limits resulting from the utility's implementation of Part 500.310, Part 500.320, or Part 410.410 of the Illinois Administrative Code that are to be paid by the customer. Such contributions shall be calculated including a credit for the anticipated incremental delivery service revenues resulting from the project's first 3 years of operation. The utility shall supply the customer, upon request, (A) a detailed breakdown of facilities cost estimate before construction begins and (B) a final detailed cost statement upon project completion if the utility intends to rebill the customer due to variances from the estimate.

(b) A gas or electric utility shall be permitted, at its election, to recover through an automatic adjustment clause tariff the costs associated with investments in qualifying infrastructure facilities that have not been recovered from the customer as provided under subsection (d) of this Section, and such costs may be amortized over a 4-year period at the election of the utility. The automatic adjustment clause tariff may be established outside the context of a general rate filing, and 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. 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.

Costs associated with investment in qualifying infrastructure facilities related to qualifying projects may be included for recovery under the automatic adjustment clause tariff in each of the first 3 years following the effective date of the tariff subject to the following limitations:

(1) For a gas or electric utility that serves 3,000,000 or more customers, the costs associated with investments in qualifying infrastructure facilities shall not exceed: $20,000,000 in the first year, an additional $15,000,000 in the second year, and an additional $10,000,000 in the third year.

(2) For a gas or electric utility that serves less than 3,000,000 customers but more than 250,000 customers, the costs associated with investments in qualifying infrastructure facilities shall not exceed: $6,600,000 in the first year, an additional $5,000,000 in the second year, and an additional $3,300,000 in the third year.

(3) For a gas or electric utility that serves 250,000 or less customers, the costs associated with investments in qualifying infrastructure facilities shall not exceed: $1,500,000 in the first year, an additional $1,000,000 in the second year, and an additional $500,000 in the third year.

Costs included for recovery under the automatic adjustment clause tariff during the first 3 years following the effective date of the tariff shall continue to be recovered through the tariff following such 3-year period until the costs are fully recovered. In the event that the number of qualifying projects related to a gas or electric utility is anticipated to cause the limitations set forth in this subsection (b) to be exceeded, qualifying projects shall be prioritized in the order in which the Director approves the projects.

(c) A gas or electric utility that has implemented an automatic adjustment clause tariff approved by the Commission pursuant to this Section may effectuate a change in its surcharge pursuant to the provisions of this Section no more than twice every 12 months, provided, however, that if the utility's investments require a change in the surcharge more than twice in a 12-month period to fully recover such investments, then the utility shall be permitted to record and defer those costs plus carrying charges as a regulatory asset to be included for recovery through the automatic adjustment clause tariff the next time the surcharge is changed. At such time as the regulatory asset is included in the next change to the surcharge, it shall, consistent with subsection (b) of this Section, be amortized over a 4-year period.

(d) Customers with qualifying projects may elect to have their Contributions in Aid of Construction capped at 25% of the calculated value or $250,000, whichever is less. Any customer who elects to have the Contribution in Aid of Construction capped waives the right to refunds that would otherwise result if other customers are connected to qualifying infrastructure facilities.

(e) In the event the Commission issues an order establishing customer rates in a general rate proceeding or a proceeding pursuant to subsection (c) or (d) of Section 16-108.5 or subsection (c) or (d) of Section 19-150 of the Act that incorporates in the utility's base rates all costs associated with the utility's investments in qualifying infrastructure facilities that were prudently incurred and reasonable in amount, the utility shall file revised rate schedules to reset the surcharge in the automatic adjustment clause tariff to zero.

(f) This Section is repealed on December 31, 2014, provided that such repeal shall have no impact on the validity or continued operation of a tariff approved by the Commission pursuant to this Section.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

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