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Full Text of SR0821  97th General Assembly

SR0821enr 97TH GENERAL ASSEMBLY


  

 


 
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SENATE RESOLUTION NO. 821

 
2    WHEREAS, The 97th Illinois General Assembly passed Senate
3Bill 1652 and House Bill 3036 with supermajority votes in both
4legislative chambers; Senate Bill 1652 became law on October
526, 2011 as Public Act 97-616 and House Bill 3036 became law on
6December 30, 2011 as Public Act 97-646; and
 
7    WHEREAS, Public Act 97-616, which is commonly referred to
8as the Energy Infrastructure Modernization Act, confers
9substantial benefits upon the State's electric utility
10customers; it established detailed infrastructure investment
11plans to modernize and upgrade the State's aging electric grid
12in order to ensure the continued provision of safe, reliable,
13and affordable service to Illinoisans; participating utilities
14that elect to undertake the infrastructure investment plan may
15recover their costs through a performance-based formula rate
16tariff mechanism, which was designed to increase
17predictability, stability, and transparency in the ratemaking
18process; and
 
19    WHEREAS, Public Act 97-646 was enacted as "trailer
20legislation" to Public Act 97-616 with the intent to amend the
21Energy Infrastructure Modernization Act to provide additional
22benefits to customers; and
 

 

 

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1    WHEREAS, To make this investment possible, the
2performance-based formula rate tariff must, among other
3things, establish and set forth certain protocols providing
4that participating utilities recover the costs of service and
5these investments, including, but not limited to, allowing for
6the recovery of an "investment return on pension assets net of
7deferred tax benefits equal to the utility's long-term debt
8cost of capital as of the end of the applicable calendar year",
9which is set forth in subparagraph (D) of paragraph (4) of
10subsection (c) of Section 16-108.5 of the Public Utilities Act;
11and
 
12    WHEREAS, In so providing, the General Assembly did not, and
13did not intend to, overturn or generally depart from Illinois
14Commerce Commission practice and law regarding the
15establishment of these protocols, including the electric
16utility's ability to continue to recover a debt return on its
17pension assets as the Commission has previously allowed; and
 
18    WHEREAS, No statutory authority was given to the Illinois
19Commerce Commission to deny recovery of a debt return on what
20is commonly referred to as, what is reported in the Federal
21Energy Regulatory Commission Form 1 (FERC Form 1) as, and what
22the General Assembly regarded to be a pension asset; and
 
23    WHEREAS, The Energy Infrastructure Modernization Act

 

 

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1further provides in subsections (c) and (d) of Section 16-108.5
2that those amounts to be credited or charged to customers
3following the annual reconciliation process under the
4performance-based formula rate shall be "with interest" so the
5utility will be made whole for unrecovered amounts that were
6prudently and reasonably incurred and customers will be made
7whole for amounts they overpaid, if any; and
 
8    WHEREAS, Such interest is intended to be set at the
9utility's weighted average cost of capital, determined in
10accordance with the statute, which represents the reasonable
11cost and means of financing a utility's investments and
12operating costs, so that the utility and customers are made
13whole when charges or credits are necessary to reconcile to
14actual prudent and reasonable investments and costs; and
 
15    WHEREAS, The Energy Infrastructure Modernization Act also
16provides that the final year-end cost data filed in FERC Form 1
17should generally be used to determine rates; and
 
18    WHEREAS, No statutory authority was given to the Illinois
19Commerce Commission to set rate base and capital structure
20using average numbers that do not represent final year-end
21values reflected in the FERC Form 1, and the Illinois Commerce
22Commission's use of such average is contrary to the statute;
23and
 

 

 

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1    WHEREAS, The Illinois Commerce Commission Orders, entered
2on May 29, 2012 and September 19, 2012, in Commission Docket
3Nos. 11-0721 and 12-0001, respectively, failed to reflect the
4statutory directives and the intent of the Illinois General
5Assembly regarding numerous issues, including, but not limited
6to, the pension asset, interest rate, and rate base issues
7described herein; and
 
8    WHEREAS, Commonwealth Edison Company sought rehearing on a
9number of wrongly decided issues, including the pension asset,
10interest rate, and rate base issues described herein, and the
11Illinois Commerce Commission granted rehearing with respect to
12only these 3 issues; and
 
13    WHEREAS, The Illinois Commerce Commission Order on
14Rehearing, entered on October 3, 2012, in Commission Docket No.
1511-0721, reversed itself on the pension asset issue only; and
 
16    WHEREAS, On October 4, 2012, Commonwealth Edison Company
17filed its Notice of Appeal from the Illinois Commerce
18Commission's Order in Commission Docket No. 11-0721; and
 
19    WHEREAS, Ameren Illinois Company sought rehearing on a
20number of wrongly decided issues, including the interest rate
21and rate base issues described herein, and the Illinois

 

 

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1Commerce Commission denied rehearing on October 17, 2012; and
 
2    WHEREAS, On October 26, 2012, Ameren Illinois Company filed
3its Notice of Appeal from the Illinois Commerce Commission's
4Order in Commission Docket No. 12-0001; and
 
5    WHEREAS, The revenue deficiencies caused because of the
6errors in the Illinois Commerce Commission Orders, entered on
7May 29, 2012 and October 3, 2012 in Commission Docket No.
811-0721 and on September 19, 2012 in Commission Docket No.
912-0001, may preclude the participating utilities from
10implementing their infrastructure investment plans, including,
11but not limited to, their advanced metering infrastructure
12deployment plans, according to the schedule set forth in
13subsection (b) of Section 16-108.5, Section 16-108.6, or in any
14Illinois Commerce Commission order entered thereunder; and
 
15    WHEREAS, The Illinois Supreme and Appellate Courts have
16consistently held that, because the administrative agencies
17are creatures of statute, administrative agencies possess only
18those powers expressly delegated by law and may not act beyond
19their statutorily delegated authority; and
 
20    WHEREAS, The Illinois Supreme and Appellate Courts have
21consistently held that public policy in Illinois is expressed
22by the General Assembly, and it is not the province of an

 

 

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1administrative agency to inquire into the wisdom and propriety
2of the legislature's act or to substitute its own judgment for
3that of the legislature; therefore, be it
 
4    RESOLVED, BY THE SENATE OF THE NINETY-SEVENTH GENERAL
5ASSEMBLY OF THE STATE OF ILLINOIS, that we express serious
6concerns that the Illinois Commerce Commission Orders, entered
7on May 29, 2012 and October 3, 2012 in Commission Docket No.
811-0721 and on September 19, 2012 in Commission Docket No.
912-0001, fail to reflect the statutory directives and the
10intent of the Illinois General Assembly by (1) assessing
11interest on those amounts to be credited or charged to
12customers as set forth in subsection (d) of Section 16-108.5 of
13the Public Utilities Act at an amount that is not based on the
14utility's weighted average cost of capital; (2) determining
15rate base and capital structure using an average, rather than
16the year-end amounts as reflected in FERC Form 1; and (3)
17departing in numerous other ways from the directives of
18subsection (c) of Section 16-108.5 of the Public Utilities Act;
19and be it further
 
20    RESOLVED, That the Illinois Commerce Commission correctly
21reversed itself in its Order on Rehearing in Commission Docket
22No. 11-0721 by allowing Commonwealth Edison Company to earn a
23debt return on what is commonly referred to as, identified in
24the FERC Form 1 as, and referred to by the General Assembly as

 

 

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1a pension asset in subparagraph (D) of paragraph (4) of
2subsection (c) of Section 16-108.5 of the Public Utilities Act;
3and be it further
 
4    RESOLVED, That we urge the Illinois Commerce Commission to
5order Commonwealth Edison Company and Ameren Illinois Company
6to file changes to their performance-based formula rate tariffs
7that (1) apply an interest rate set at the utility's weighted
8average cost of capital as described herein; (2) set rate base
9and capital structure using final year-end values reflected in
10the FERC Form 1 rather than average numbers; and (3) correct
11other errors reflected in the Illinois Commerce Commission
12Orders entered May 29, 2012 and September 19, 2012 in
13Commission Docket Nos. 11-0721 and 12-0001, respectively, so
14that the tariffs reflect the statutory directives and the
15intent of the General Assembly in passing Public Acts 97-616
16and 97-646 as reaffirmed in this resolution; and be it further
 
17    RESOLVED, That we urge the Illinois Commerce Commission to
18enter orders approving such changes no later than December 31,
192012; and be it further
 
20    RESOLVED, That each participating utility should be
21permitted, without penalty or being subject to any other
22adverse action, a reasonable time to ensure its infrastructure
23investment plan, including, but not limited to, its advanced

 

 

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1metering infrastructure deployment plan, is in compliance with
2the schedule set forth in subsection (b) of Section 16-108.5,
3Section 16-108.6, or in any Illinois Commerce Commission order
4entered thereunder; and be it further
 
5    RESOLVED, That suitable copies of this resolution be
6delivered to the Governor of the State of Illinois and the
7Chairman and Commissioners of the Illinois Commerce
8Commission.