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Full Text of SR0821  97th General Assembly

SR0821sam001 97TH GENERAL ASSEMBLY

 


 
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AMENDMENT TO SENATE RESOLUTION 821

2    AMENDMENT NO. ___. Amend Senate Resolution 821 by replacing
3line 2 on page 1 through line 14 on page 5 with the following:
4    "WHEREAS, The 97th Illinois General Assembly passed Senate
5Bill 1652 and House Bill 3036 with supermajority votes in both
6legislative chambers; Senate Bill 1652 became law on October
726, 2011 as Public Act 97-616 and House Bill 3036 became law on
8December 30, 2011 as Public Act 97-646; and
 
9    WHEREAS, Public Act 97-616, which is commonly referred to
10as the Energy Infrastructure Modernization Act, confers
11substantial benefits upon the State's electric utility
12customers; it established detailed infrastructure investment
13plans to modernize and upgrade the State's aging electric grid
14in order to ensure the continued provision of safe, reliable,
15and affordable service to Illinoisans; participating utilities
16that elect to undertake the infrastructure investment plan may
17recover their costs through a performance-based formula rate

 

 

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1tariff mechanism, which was designed to increase
2predictability, stability, and transparency in the ratemaking
3process; and
 
4    WHEREAS, Public Act 97-646 was enacted as "trailer
5legislation" to Public Act 97-616 with the intent to amend the
6Energy Infrastructure Modernization Act to provide additional
7benefits to customers; and
 
8    WHEREAS, To make this investment possible, the
9performance-based formula rate tariff must, among other
10things, establish and set forth certain protocols providing
11that participating utilities recover the costs of service and
12these investments, including, but not limited to, allowing for
13the recovery of an "investment return on pension assets net of
14deferred tax benefits equal to the utility's long-term debt
15cost of capital as of the end of the applicable calendar year",
16which is set forth in subparagraph (D) of paragraph (4) of
17subsection (c) of Section 16-108.5 of the Public Utilities Act;
18and
 
19    WHEREAS, In so providing, the General Assembly did not, and
20did not intend to, overturn or generally depart from Illinois
21Commerce Commission practice and law regarding the
22establishment of these protocols, including the electric
23utility's ability to continue to recover a debt return on its

 

 

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1pension assets as the Commission has previously allowed; and
 
2    WHEREAS, No statutory authority was given to the Illinois
3Commerce Commission to deny recovery of a debt return on what
4is commonly referred to as, what is reported in the Federal
5Energy Regulatory Commission Form 1 (FERC Form 1) as, and what
6the General Assembly regarded to be a pension asset; and
 
7    WHEREAS, The Energy Infrastructure Modernization Act
8further provides in subsections (c) and (d) of Section 16-108.5
9that those amounts to be credited or charged to customers
10following the annual reconciliation process under the
11performance-based formula rate shall be "with interest" so the
12utility will be made whole for unrecovered amounts that were
13prudently and reasonably incurred and customers will be made
14whole for amounts they overpaid, if any; and
 
15    WHEREAS, Such interest is intended to be set at the
16utility's weighted average cost of capital, determined in
17accordance with the statute, which represents the reasonable
18cost and means of financing a utility's investments and
19operating costs, so that the utility and customers are made
20whole when charges or credits are necessary to reconcile to
21actual prudent and reasonable investments and costs; and
 
22    WHEREAS, The Energy Infrastructure Modernization Act also

 

 

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1provides that the final year-end cost data filed in FERC Form 1
2should generally be used to determine rates; and
 
3    WHEREAS, No statutory authority was given to the Illinois
4Commerce Commission to set rate base and capital structure
5using average numbers that do not represent final year-end
6values reflected in the FERC Form 1, and the Illinois Commerce
7Commission's use of such average is contrary to the statute;
8and
 
9    WHEREAS, The Illinois Commerce Commission Orders, entered
10on May 29, 2012 and September 19, 2012, in Commission Docket
11Nos. 11-0721 and 12-0001, respectively, failed to reflect the
12statutory directives and the intent of the Illinois General
13Assembly regarding numerous issues, including, but not limited
14to, the pension asset, interest rate, and rate base issues
15described herein; and
 
16    WHEREAS, Commonwealth Edison Company sought rehearing on a
17number of wrongly decided issues, including the pension asset,
18interest rate, and rate base issues described herein, and the
19Illinois Commerce Commission granted rehearing with respect to
20only these 3 issues; and
 
21    WHEREAS, The Illinois Commerce Commission Order on
22Rehearing, entered on October 3, 2012, in Commission Docket No.

 

 

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111-0721, reversed itself on the pension asset issue only; and
 
2    WHEREAS, On October 4, 2012, Commonwealth Edison Company
3filed its Notice of Appeal from the Illinois Commerce
4Commission's Order in Commission Docket No. 11-0721; and
 
5    WHEREAS, Ameren Illinois Company sought rehearing on a
6number of wrongly decided issues, including the interest rate
7and rate base issues described herein, and the Illinois
8Commerce Commission denied rehearing on October 17, 2012; and
 
9    WHEREAS, On October 26, 2012, Ameren Illinois Company filed
10its Notice of Appeal from the Illinois Commerce Commission's
11Order in Commission Docket No. 12-0001; and
 
12    WHEREAS, The revenue deficiencies caused because of the
13errors in the Illinois Commerce Commission Orders, entered on
14May 29, 2012 and October 3, 2012 in Commission Docket No.
1511-0721 and on September 19, 2012 in Commission Docket No.
1612-0001, may preclude the participating utilities from
17implementing their infrastructure investment plans, including,
18but not limited to, their advanced metering infrastructure
19deployment plans, according to the schedule set forth in
20subsection (b) of Section 16-108.5, Section 16-108.6, or in any
21Illinois Commerce Commission order entered thereunder; and
 

 

 

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1    WHEREAS, The Illinois Supreme and Appellate Courts have
2consistently held that, because the administrative agencies
3are creatures of statute, administrative agencies possess only
4those powers expressly delegated by law and may not act beyond
5their statutorily delegated authority; and
 
6    WHEREAS, The Illinois Supreme and Appellate Courts have
7consistently held that public policy in Illinois is expressed
8by the General Assembly, and it is not the province of an
9administrative agency to inquire into the wisdom and propriety
10of the legislature's act or to substitute its own judgment for
11that of the legislature; therefore, be it
 
12    RESOLVED, BY THE SENATE OF THE NINETY-SEVENTH GENERAL
13ASSEMBLY OF THE STATE OF ILLINOIS, that we express serious
14concerns that the Illinois Commerce Commission Orders, entered
15on May 29, 2012 and October 3, 2012 in Commission Docket No.
1611-0721 and on September 19, 2012 in Commission Docket No.
1712-0001, fail to reflect the statutory directives and the
18intent of the Illinois General Assembly by (1) assessing
19interest on those amounts to be credited or charged to
20customers as set forth in subsection (d) of Section 16-108.5 of
21the Public Utilities Act at an amount that is not based on the
22utility's weighted average cost of capital; (2) determining
23rate base and capital structure using an average, rather than
24the year-end amounts as reflected in FERC Form 1; and (3)

 

 

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1departing in numerous other ways from the directives of
2subsection (c) of Section 16-108.5 of the Public Utilities Act;
3and be it further
 
4    RESOLVED, That the Illinois Commerce Commission correctly
5reversed itself in its Order on Rehearing in Commission Docket
6No. 11-0721 by allowing Commonwealth Edison Company to earn a
7debt return on what is commonly referred to as, identified in
8the FERC Form 1 as, and referred to by the General Assembly as
9a pension asset in subparagraph (D) of paragraph (4) of
10subsection (c) of Section 16-108.5 of the Public Utilities Act;
11and be it further
 
12    RESOLVED, That we urge the Illinois Commerce Commission to
13order Commonwealth Edison Company and Ameren Illinois Company
14to file changes to their performance-based formula rate tariffs
15that (1) apply an interest rate set at the utility's weighted
16average cost of capital as described herein; (2) set rate base
17and capital structure using final year-end values reflected in
18the FERC Form 1 rather than average numbers; and (3) correct
19other errors reflected in the Illinois Commerce Commission
20Orders entered May 29, 2012 and September 19, 2012 in
21Commission Docket Nos. 11-0721 and 12-0001, respectively, so
22that the tariffs reflect the statutory directives and the
23intent of the General Assembly in passing Public Acts 97-616
24and 97-646 as reaffirmed in this resolution; and be it further
 

 

 

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1    RESOLVED, That we urge the Illinois Commerce Commission to
2enter orders approving such changes no later than December 31,
32012; and be it further
 
4    RESOLVED, That each participating utility should be
5permitted, without penalty or being subject to any other
6adverse action, a reasonable time to ensure its infrastructure
7investment plan, including, but not limited to, its advanced
8metering infrastructure deployment plan, is in compliance with
9the schedule set forth in subsection (b) of Section 16-108.5,
10Section 16-108.6, or in any Illinois Commerce Commission order
11entered thereunder; and be it further
 
12    RESOLVED, That suitable copies of this resolution be
13delivered to the Governor of the State of Illinois and the
14Chairman and Commissioners of the Illinois Commerce
15Commission.".