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91_SB0963 LRB9103287JSpc 1 AN ACT to amend the Public Utilities Act by changing 2 Section 16-111. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Public Utilities Act is amended by 6 changing Section 16-111 as follows: 7 (220 ILCS 5/16-111) 8 Sec. 16-111. Rates and restructuring transactions during 9 mandatory transition period. 10 (a) During the mandatory transition period, 11 notwithstanding any provision of Article IX of this Act, and 12 except as provided in subsections (b), (d), (e), and (f) of 13 this Section, the Commission shall not (i) initiate, 14 authorize or order any change by way of increase (other than 15 in connection with a request for rate increase which was 16 filed after September 1, 1997 but prior to October 15, 1997, 17 by an electric utility serving less than 12,500 customers in 18 this state), (ii) initiate or, unless requested by the 19 electric utility, authorize or order any change by way of 20 decrease, restructuring or unbundling (except as provided in 21 Section 16-109A), in the rates of any electric utility that 22 were in effect on October 1, 1996, or (iii) in any order 23 approving any application for a merger pursuant to Section 24 7-204 that was pending as of May 16, 1997, impose any 25 condition requiring any filing for an increase, decrease, or 26 change in, or other review of, an electric utility's rates or 27 enforce any such condition of any such order; provided, 28 however, that this subsection shall not prohibit the 29 Commission from: 30 (1) approving the application of an electric 31 utility to implement an alternative to rate of return -2- LRB9103287JSpc 1 regulation or a regulatory mechanism that rewards or 2 penalizes the electric utility through adjustment of 3 rates based on utility performance, pursuant to Section 4 9-244; 5 (2) authorizing an electric utility to eliminate 6 its fuel adjustment clause and adjust its base rate 7 tariffs in accordance with subsection (b), (d), or (f) of 8 Section 9-220 of this Act, to fix its fuel adjustment 9 factor in accordance with subsection (c) of Section 9-220 10 of this Act, or to eliminate its fuel adjustment clause 11 in accordance with subsection (e) of Section 9-220 of 12 this Act; 13 (3) ordering into effect tariffs for delivery 14 services and transition charges in accordance with 15 Sections 16-104 and 16-108, for real-time pricing in 16 accordance with Section 16-107, or the options required 17 by Section 16-110 and subsection (n) of 16-112, allowing 18 a billing experiment in accordance with Section 16-106, 19 or modifying delivery services tariffs in accordance with 20 Section 16-109; or 21 (4) ordering or allowing into effect any tariff to 22 recover charges pursuant to Sections 9-201.5, 9-220.1, 23 9-221, 9-222 (except as provided in Section 9-222.1), 24 16-108, and 16-114 of this Act, Section 5-5 of the 25 Electricity Infrastructure Maintenance Fee Law, Section 26 6-5 of the Renewable Energy, Energy Efficiency, and Coal 27 Resources Development Law of 1997, and Section 13 of the 28 Energy Assistance Act of 1989. 29 (b) Notwithstanding the provisions of subsection (a), 30 each Illinois electric utility serving more than 12,500 31 customers in Illinois shall file tariffs (i) reducing, 32 effective August 1, 1998, each component of its base rates to 33 residential retail customers by 15% from the base rates in 34 effect immediately prior to January 1, 1998 and (ii) if the -3- LRB9103287JSpc 1 public utility provides electric service to more than 500,000 2 customers in this State on the effective date of this 3 amendatory Act of 1997, reducing, effective May 1, 2002, each 4 component of its base rates to residential retail customers 5 by an additional 5% from the base rates in effect immediately 6 prior to January 1, 1998. Provided, however, that (A) if an 7 electric utility's average residential retail rate is less 8 than or equal to the average residential retail rate for a 9 group of Midwest Utilities (consisting of all investor-owned 10 electric utilities with annual system peaks in excess of 1000 11 megawatts in the States of Illinois, Indiana, Iowa, Kentucky, 12 Michigan, Missouri, Ohio, and Wisconsin), based on data 13 reported on Form 1 to the Federal Energy Regulatory 14 Commission for calendar year 1995, then it shall only be 15 required to file tariffs (i) reducing, effective August 1, 16 1998, each component of its base rates to residential retail 17 customers by 5% from the base rates in effect immediately 18 prior to January 1, 1998, (ii) reducing, effective October 1, 19 2000, each component of its base rates to residential retail 20 customers by the lesser of 5% of the base rates in effect 21 immediately prior to January 1, 1998 or the percentage by 22 which the electric utility's average residential retail rate 23 exceeds the average residential retail rate of the Midwest 24 Utilities, based on data reported on Form 1 to the Federal 25 Energy Regulatory Commission for calendar year 1999, and 26 (iii) reducing, effective October 1, 2002, each component of 27 its base rates to residential retail customers by an 28 additional amount equal to the lesser of 5% of the base rates 29 in effect immediately prior to January 1, 1998 or the 30 percentage by which the electric utility's average 31 residential retail rate exceeds the average residential 32 retail rate of the Midwest Utilities, based on data reported 33 on Form 1 to the Federal Energy Regulatory Commission for 34 calendar year 2001; and (B) if the average residential retail -4- LRB9103287JSpc 1 rate of an electric utility serving between 150,000 and 2 250,000 retail customers in this State on January 1, 1995 is 3 less than or equal to 90% of the average residential retail 4 rate for the Midwest Utilities, based on data reported on 5 Form 1 to the Federal Energy Regulatory Commission for 6 calendar year 1995, then it shall only be required to file 7 tariffs (i) reducing, effective August 1, 1998, each 8 component of its base rates to residential retail customers 9 by 2% from the base rates in effect immediately prior to 10 January 1, 1998; (ii) reducing, effective October 1, 2000, 11 each component of its base rates to residential retail 12 customers by 2% from the base rate in effect immediately 13 prior to January 1, 1998; and (iii) reducing, effective 14 October 1, 2002, each component of its base rates to 15 residential retail customers by 1% from the base rates in 16 effect immediately prior to January 1, 1998. Provided, 17 further, that any electric utility for which a decrease in 18 base rates has been or is placed into effect between October 19 1, 1996 and the dates specified in the preceding sentences of 20 this subsection, other than pursuant to the requirements of 21 this subsection, shall be entitled to reduce the amount of 22 any reduction or reductions in its base rates required by 23 this subsection by the amount of such other decrease. The 24 tariffs required under this subsection shall be filed 45 days 25 in advance of the effective date. Notwithstanding anything to 26 the contrary in Section 9-220 of this Act, no restatement of 27 base rates in conjunction with the elimination of a fuel 28 adjustment clause under that Section shall result in a lesser 29 decrease in base rates than customers would otherwise receive 30 under this subsection had the electric utility's fuel 31 adjustment clause not been eliminated. 32 (c) Any utility reducing its base rates by 15% on August 33 1, 1998 pursuant to subsection (b) shall include the 34 following statement on its bills for residential customers -5- LRB9103287JSpc 1 from August 1 through December 31, 1998: "Effective August 1, 2 1998, your rates have been reduced by 15% by the Electric 3 Service Customer Choice and Rate Relief Law of 1997 passed by 4 the Illinois General Assembly.". Any utility reducing its 5 base rates by 5% on August 1, 1998, pursuant to subsection 6 (b) shall include the following statement on its bills for 7 residential customers from August 1 through December 31, 8 1998: "Effective August 1, 1998, your rates have been 9 reduced by 5% by the Electric Service Customer Choice and 10 Rate Relief Law of 1997 passed by the Illinois General 11 Assembly.". 12 Any utility reducing its base rates by 2% on August 1, 13 1998 pursuant to subsection (b) shall include the following 14 statement on its bills for residential customers from August 15 1 through December 31, 1998: "Effective August 1, 1998, your 16 rates have been reduced by 2% by the Electric Service 17 Customer Choice and Rate Relief Law of 1997 passed by the 18 Illinois General Assembly.". 19 (d) During the mandatory transition period, but not 20 before January 1, 2000, and notwithstanding the provisions 21 of subsection (a), an electric utility may request an 22 increase in its base rates if the electric utility 23 demonstrates that the 2-year average of its earned rate of 24 return on common equity, calculated as its net income 25 applicable to common stock divided by the average of its 26 beginning and ending balances of common equity using data 27 reported in the electric utility's Form 1 report to the 28 Federal Energy Regulatory Commission but adjusted to remove 29 the effects of accelerated depreciation or amortization or 30 other transition or mitigation measures implemented by the 31 electric utility pursuant to subsection (g) of this Section 32 and the effect of any refund paid pursuant to subsection (e) 33 of this Section, is below the 2-year average for the same 2 34 years of the monthly average yields of 30-year U.S. Treasury -6- LRB9103287JSpc 1 bonds published by the Board of Governors of the Federal 2 Reserve System in its weekly H.15 Statistical Release or 3 successor publication. The Commission shall review the 4 electric utility's request, and may review the justness and 5 reasonableness of all rates for tariffed services, in 6 accordance with the provisions of Article IX of this Act, 7 provided that the Commission shall consider any special or 8 negotiated adjustments to the revenue requirement agreed to 9 between the electric utility and the other parties to the 10 proceeding. In setting rates under this Section, the 11 Commission shall exclude the costs and revenues that are 12 associated with competitive services and any billing or 13 pricing experiments conducted under Section 16-106. 14 (e) For the purposes of this subsection (e) all 15 calculations and comparisons shall be performed for the 16 Illinois operations of multijurisdictional utilities. During 17 the mandatory transition period, notwithstanding the 18 provisions of subsection (a), if the 2-year average of an 19 electric utility's earned rate of return on common equity, 20 calculated as its net income applicable to common stock 21 divided by the average of its beginning and ending balances 22 of common equity using data reported in the electric 23 utility's Form 1 report to the Federal Energy Regulatory 24 Commission but adjusted to remove the effect of any refund 25 paid under this subsection (e), and further adjusted to 26 include the annual amortization of any difference between the 27 consideration received by an affiliated interest of the 28 electric utility in the sale of an asset which had been sold 29 or transferred by the electric utility to the affiliated 30 interest subsequent to the effective date of this amendatory 31 Act of 1997 and the consideration for which such asset had 32 been sold or transferred to the affiliated interest, with 33 such difference to be amortized ratably from the date of the 34 sale by the affiliated interest to December 31, 2006, exceeds -7- LRB9103287JSpc 1 the 2-year average of the Index for the same 2 years by 1.5 2 or more percentage points, the electric utility shall make 3 refunds to customers beginning the first billing day of April 4 in the following year in the manner described in paragraph 5 (3) of this subsection. For purposes of this subsection (e), 6 the "Index" shall be the sum of (A) the average for the 12 7 months ended September 30 of the monthly average yields of 8 30-year U.S. Treasury bonds published by the Board of 9 Governors of the Federal Reserve System in its weekly H.15 10 Statistical Release or successor publication for each year 11 1998 through 2004, and (B) (i) 4.00 percentage points for 12 each of the 12-month periods ending September 30, 1998 13 through September 30, 1999 or 8.00 percentage points if the 14 electric utility's average residential retail rate is less 15 than or equal to 90% of the average residential retail rate 16 for the "Midwest Utilities", as that term is defined in 17 subsection (b) of this Section, based on data reported on 18 Form 1 to the Federal Energy Regulatory Commission for 19 calendar year 1995, and the electric utility served between 20 150,000 and 250,000 retail customers on January 1, 1995, or 21 (ii) 5.00 percentage points for each of the 12-month periods 22 ending September 30, 2000 through September 30, 2004 or 9.00 23 percentage points if the electric utility's average 24 residential retail rate is less than or equal to 90% of the 25 average residential retail rate for the "Midwest Utilities", 26 as that term is defined in subsection (b) of this Section, 27 based on data reported on Form 1 to the Federal Energy 28 Regulatory Commission for calendar year 1995 and the electric 29 utility served between 150,000 and 250,000 retail customers 30 in this State on January 1, 1995. 31 (1) For purposes of this subsection (e), "excess 32 earnings" means the difference between (A) the 2-year 33 average of the electric utility's earned rate of return 34 on common equity, less (B) the 2-year average of the sum -8- LRB9103287JSpc 1 of (i) the Index applicable to each of the 2 years and 2 (ii) 1.5 percentage points; provided, that "excess 3 earnings" shall never be less than zero. 4 (2) On or before March 31 of each year 2000 through 5 2005 each electric utility shall file a report with the 6 Commission showing its earned rate of return on common 7 equity, calculated in accordance with this subsection, 8 for the preceding calendar year and the average for the 9 preceding 2 calendar years. 10 (3) If an electric utility has excess earnings, 11 determined in accordance with paragraphs (1) and (2) of 12 this subsection, the refunds which the electric utility 13 shall pay to its customers beginning the first billing 14 day of April in the following year shall be calculated 15 and applied as follows: 16 (i) The electric utility's excess earnings 17 shall be multiplied by the average of the beginning 18 and ending balances of the electric utility's common 19 equity for the 2-year period in which excess 20 earnings occurred. 21 (ii) The result of the calculation in (i) 22 shall be multiplied by 0.50 and then divided by a 23 number equal to 1 minus the electric utility's 24 composite federal and State income tax rate. 25 (iii) The result of the calculation in (ii) 26 shall be divided by the sum of the electric 27 utility's projected total kilowatt-hour sales to 28 retail customers plus projected kilowatt-hours to be 29 delivered to delivery services customers over a one 30 year period beginning with the first billing date in 31 April in the succeeding year to determine a cents 32 per kilowatt-hour refund factor. 33 (iv) The cents per kilowatt-hour refund factor 34 calculated in (iii) shall be credited to the -9- LRB9103287JSpc 1 electric utility's customers by applying the factor 2 on the customer's monthly bills to each 3 kilowatt-hour sold or delivered until the total 4 amount calculated in (ii) has been paid to 5 customers. 6 (f) During the mandatory transition period, an electric 7 utility may file revised tariffs reducing the price of any 8 tariffed service offered by the electric utility for all 9 customers taking that tariffed service, which shall be 10 effective 7 days after filing. 11 (g) During the mandatory transition period, an electric 12 utility may, without obtaining any approval of the Commission 13 other than that provided for in this subsection and 14 notwithstanding any other provision of this Act or any rule 15 or regulation of the Commission that would require such 16 approval: 17 (1) implement a reorganization, other than a merger 18 of 2 or more public utilities as defined in Section 3-105 19 or their holding companies; 20 (2) retire generating plants from service; 21 (3) sell, assign, lease or otherwise transfer 22 assets to an affiliated or unaffiliated entity and as 23 part of such transaction enter into service agreements, 24 power purchase agreements, or other agreements with the 25 transferee; provided, however, that the prices, terms and 26 conditions of any power purchase agreement must be 27 approved or allowed into effect by the Federal Energy 28 Regulatory Commission; or 29 (4) use any accelerated cost recovery method 30 including accelerated depreciation, accelerated 31 amortization or other capital recovery methods, or record 32 reductions to the original cost of its assets. 33 In order to implement a reorganization, retire generating 34 plants from service, or sell, assign, lease or otherwise -10- LRB9103287JSpc 1 transfer assets pursuant to this Section, the electric 2 utility shall comply with subsections (c) and (d) of Section 3 16-128, if applicable, and provide the Commission with at 4 least 30 days notice of the proposed reorganization or 5 transaction, which notice shall include the following 6 information: 7 (i) a complete statement of the entries that 8 the electric utility will make on its books and 9 records of account to implement the proposed 10 reorganization or transaction together with a 11 certification from an independent certified public 12 accountant that such entries are in accord with 13 generally accepted accounting principles and, if the 14 Commission has previously approved guidelines for 15 cost allocations between the utility and its 16 affiliates, a certification from the chief 17 accounting officer of the utility that such entries 18 are in accord with those cost allocation guidelines; 19 (ii) a description of how the electric utility 20 will use proceeds of any sale, assignment, lease or 21 transfer to retire debt or otherwise reduce or 22 recover the costs of services provided by such 23 electric utility; 24 (iii) a list of all federal approvals or 25 approvals required from departments and agencies of 26 this State, other than the Commission, that the 27 electric utility has or will obtain before 28 implementing the reorganization or transaction; 29 (iv) an irrevocable commitment by the electric 30 utility that it will not, as a result of the 31 transaction, impose any stranded cost charges that 32 it might otherwise be allowed to charge retail 33 customers under federal law or increase the 34 transition charges that it is otherwise entitled to -11- LRB9103287JSpc 1 collect under this Article XVI;
and2 (v) If the electric utility proposes to sell, 3 assign, lease, or otherwise transfer any generating 4 plants, it must make an irrevocable commitment that, 5 within 30 months after the transfer of an electric 6 generating plant, emissions of nitrogen oxides from 7 the plant will be reduced to 0.15 lbs/mmbtu and 8 emissions of sulfur dioxides from the plant will be 9 reduced to 0.30 lbs/mmbtu. It must put in escrow in 10 a form to be determined by the Commission an amount 11 equal to 30% of the proceeds from the transfer of 12 the plant. The escrow amount may not be released 13 until the Commission determines that the emissions 14 have been reduced to the levels set forth in this 15 item, provided, however, that the electric utility 16 may elect to sell more than one electric generating 17 plant as a package and, for purposes of determining 18 compliance with the emissions limits in this item, 19 may use a weighted average of the emissions of the 20 coal-fired plants in the package to reach the 21 emissions levels required by this item; and 22 (vi) (v)if the electric utility proposes to 23 sell, assign, lease or otherwise transfer a 24 generating plant that brings the amount of net 25 dependable generating capacity transferred pursuant 26 to this subsection to an amount equal to or greater 27 than 15% of the electric utility's net dependable 28 capacity as of the effective date of this amendatory 29 Act of 1997, and enters into a power purchase 30 agreement with the entity to which such generating 31 plant is sold, assigned, leased, or otherwise 32 transferred, the electric utility also agrees, if 33 its fuel adjustment clause has not already been 34 eliminated, to eliminate its fuel adjustment clause -12- LRB9103287JSpc 1 in accordance with subsection (b) of Section 9-220 2 for a period of time equal to the length of any such 3 power purchase agreement or successor agreement, or 4 until January 1, 2005, whichever is longer; if the 5 capacity of the generating plant so transferred and 6 related power purchase agreement does not result in 7 the elimination of the fuel adjustment clause under 8 this subsection, and the fuel adjustment clause has 9 not already been eliminated, the electric utility 10 shall agree that the costs associated with the 11 transferred plant that are included in the 12 calculation of the rate per kilowatt-hour to be 13 applied pursuant to the electric utility's fuel 14 adjustment clause during such period shall not 15 exceed the per kilowatt-hour cost associated with 16 such generating plant included in the electric 17 utility's fuel adjustment clause during the full 18 calendar year preceding the transfer, with such 19 limit to be adjusted each year thereafter by the 20 Gross Domestic Product Implicit Price Deflator. 21 (vii) (vi)In addition, if the electric utility 22 proposes to sell, assign, or lease, (A) either (1) 23 an amount of generating plant that brings the amount 24 of net dependable generating capacity transferred 25 pursuant to this subsection to an amount equal to or 26 greater than 15% of its net dependable capacity on 27 the effective date of this amendatory Act of 1997, 28 or (2) one or more generating plants with a total 29 net dependable capacity of 1100 megawatts, or (B) 30 transmission and distribution facilities that either 31 (1) bring the amount of transmission and 32 distribution facilities transferred pursuant to this 33 subsection to an amount equal to or greater than 15% 34 of the electric utility's total depreciated original -13- LRB9103287JSpc 1 cost investment in such facilities, or (2) represent 2 an investment of $25,000,000 in terms of total 3 depreciated original cost, the electric utility 4 shall provide, in addition to the information listed 5 in subparagraphs (i) through (vi) (v), the following 6 information: (A) a description of how the electric 7 utility will meet its service obligations under this 8 Act in a safe and reliable manner and (B) the 9 electric utility's projected earned rate of return 10 on common equity, calculated in accordance with 11 subsection (d) of this Section, for each year from 12 the date of the notice through December 31, 2004 13 both with and without the proposed transaction. If 14 the Commission has not issued an order initiating a 15 hearing on the proposed transaction within 30 days 16 after the date the electric utility's notice is 17 filed, the transaction shall be deemed approved. 18 The Commission may, after notice and hearing, 19 prohibit the proposed transaction if it makes either 20 or both of the following findings: (1) that the 21 proposed transaction will render the electric 22 utility unable to provide its tariffed services in a 23 safe and reliable manner, or (2) that there is a 24 strong likelihood that consummation of the proposed 25 transaction will result in the electric utility 26 being entitled to request an increase in its base 27 rates during the mandatory transition period 28 pursuant to subsection (d) of this Section. Any 29 hearing initiated by the Commission into the 30 proposed transaction shall be completed, and the 31 Commission's final order approving or prohibiting 32 the proposed transaction shall be entered, within 90 33 days after the date the electric utility's notice 34 was filed. Provided, however, that a sale, -14- LRB9103287JSpc 1 assignment, or lease of transmission facilities to 2 an independent system operator that meets the 3 requirements of Section 16-126 shall not be subject 4 to Commission approval under this Section. 5 In any proceeding conducted by the Commission 6 pursuant to this subparagraph (vii) (vi), 7 intervention shall be limited to parties with a 8 direct interest in the transaction which is the 9 subject of the hearing and any statutory consumer 10 protection agency as defined in subsection (d) of 11 Section 9-102.1. Notwithstanding the provisions of 12 Section 10-113 of this Act, any application seeking 13 rehearing of an order issued under this subparagraph 14 (vii) (vi), whether filed by the electric utility or 15 by an intervening party, shall be filed within 10 16 days after service of the order. 17 The Commission shall not in any subsequent proceeding or 18 otherwise, review such a reorganization or other transaction 19 authorized by this Section, but shall retain the authority to 20 allocate costs as stated in Section 16-111(i). An entity to 21 which an electric utility sells, assigns, leases or transfers 22 assets pursuant to this subsection (g) shall not, as a result 23 of the transactions specified in this subsection (g), be 24 deemed a public utility as defined in Section 3-105. Nothing 25 in this subsection (g) shall change any requirement under the 26 jurisdiction of the Illinois Department of Nuclear Safety 27 including, but not limited to, the payment of fees. Nothing 28 in this subsection (g) shall exempt a utility from obtaining 29 a certificate pursuant to Section 8-406 of this Act for the 30 construction of a new electric generating facility. Nothing 31 in this subsection (g) is intended to exempt the transactions 32 hereunder from the operation of the federal or State 33 antitrust laws. Nothing in this subsection (g) shall require 34 an electric utility to use the procedures specified in this -15- LRB9103287JSpc 1 subsection for any of the transactions specified herein. Any 2 other procedure available under this Act may, at the electric 3 utility's election, be used for any such transaction. 4 (h) During the mandatory transition period, the 5 Commission shall not establish or use any rates of 6 depreciation, which for purposes of this subsection shall 7 include amortization, for any electric utility other than 8 those established pursuant to subsection (c) of Section 5-104 9 of this Act or utilized pursuant to subsection (g) of this 10 Section. Provided, however, that in any proceeding to review 11 an electric utility's rates for tariffed services pursuant to 12 Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the 13 Commission may establish new rates of depreciation for the 14 electric utility in the same manner provided in subsection 15 (d) of Section 5-104 of this Act. An electric utility 16 implementing an accelerated cost recovery method including 17 accelerated depreciation, accelerated amortization or other 18 capital recovery methods, or recording reductions to the 19 original cost of its assets, pursuant to subsection (g) of 20 this Section, shall file a statement with the Commission 21 describing the accelerated cost recovery method to be 22 implemented or the reduction in the original cost of its 23 assets to be recorded. Upon the filing of such statement, 24 the accelerated cost recovery method or the reduction in the 25 original cost of assets shall be deemed to be approved by the 26 Commission as though an order had been entered by the 27 Commission. 28 (i) Subsequent to the mandatory transition period, the 29 Commission, in any proceeding to establish rates and charges 30 for tariffed services offered by an electric utility, shall 31 consider only (1) the then current or projected revenues, 32 costs, investments and cost of capital directly or indirectly 33 associated with the provision of such tariffed services; (2) 34 collection of transition charges in accordance with Sections -16- LRB9103287JSpc 1 16-102 and 16-108 of this Act; (3) recovery of any employee 2 transition costs as described in Section 16-128 which the 3 electric utility is continuing to incur, including recovery 4 of any unamortized portion of such costs previously incurred 5 or committed, with such costs to be equitably allocated among 6 bundled services, delivery services, and contracts with 7 alternative retail electric suppliers; and (4) recovery of 8 the costs associated with the electric utility's compliance 9 with decommissioning funding requirements; and shall not 10 consider any other revenues, costs, investments or cost of 11 capital of either the electric utility or of any affiliate of 12 the electric utility that are not associated with the 13 provision of tariffed services. In setting rates for 14 tariffed services, the Commission shall equitably allocate 15 joint and common costs and investments between the electric 16 utility's competitive and tariffed services. In determining 17 the justness and reasonableness of the electric power and 18 energy component of an electric utility's rates for tariffed 19 services subsequent to the mandatory transition period and 20 prior to the time that the provision of such electric power 21 and energy is declared competitive, the Commission shall 22 consider the extent to which the electric utility's tariffed 23 rates for such component for each customer class exceed the 24 market value determined pursuant to Section 16-112, and, if 25 the electric power and energy component of such tariffed rate 26 exceeds the market value by more than 10% for any customer 27 class, may establish such electric power and energy component 28 at a rate equal to the market value plus 10%. In any such 29 case, the Commission may also elect to extend the provisions 30 of Section 16-111(e) for any period in which the electric 31 utility is collecting transition charges, using information 32 applicable to such period. 33 (j) During the mandatory transition period, an electric 34 utility may elect to transfer to a non-operating income -17- LRB9103287JSpc 1 account under the Commission's Uniform System of Accounts 2 either or both of (i) an amount of unamortized investment tax 3 credit that is in addition to the ratable amount which is 4 credited to the electric utility's operating income account 5 for the year in accordance with Section 46(f)(2) of the 6 federal Internal Revenue Code of 1986, as in effect prior to 7 P.L. 101-508, or (ii) "excess tax reserves", as that term is 8 defined in Section 203(e)(2)(A) of the federal Tax Reform Act 9 of 1986, provided that (A) the amount transferred may not 10 exceed the amount of the electric utility's assets that were 11 created pursuant to Statement of Financial Accounting 12 Standards No. 71 which the electric utility has written off 13 during the mandatory transition period, and (B) the transfer 14 shall not be effective until approved by the Internal Revenue 15 Service. An electric utility electing to make such a 16 transfer shall file a statement with the Commission stating 17 the amount and timing of the transfer for which it intends to 18 request approval of the Internal Revenue Service, along with 19 a copy of its proposed request to the Internal Revenue 20 Service for a ruling. The Commission shall issue an order 21 within 14 days after the electric utility's filing approving, 22 subject to receipt of approval from the Internal Revenue 23 Service, the proposed transfer. 24 (Source: P.A. 90-561, eff. 12-16-97; 90-563, eff. 12-16-97.) 25 Section 99. Effective date. This Act takes effect upon 26 becoming law.
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