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Public Act 92-0537
SB2081 Enrolled LRB9212879JSpc
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
changing Sections 9-220, 16-102, and 16-111 and adding
Section 16-111.3 as follows:
(220 ILCS 5/9-220) (from Ch. 111 2/3, par. 9-220)
Sec. 9-220. Rate changes based on changes in fuel costs.
(a) Notwithstanding the provisions of Section 9-201, the
Commission may authorize the increase or decrease of rates
and charges based upon changes in the cost of fuel used in
the generation or production of electric power, changes in
the cost of purchased power, or changes in the cost of
purchased gas through the application of fuel adjustment
clauses or purchased gas adjustment clauses. The Commission
may also authorize the increase or decrease of rates and
charges based upon expenditures or revenues resulting from
the purchase or sale of emission allowances created under the
federal Clean Air Act Amendments of 1990, through such fuel
adjustment clauses, as a cost of fuel. For the purposes of
this paragraph, cost of fuel used in the generation or
production of electric power shall include the amount of any
fees paid by the utility for the implementation and operation
of a process for the desulfurization of the flue gas when
burning high sulfur coal at any location within the State of
Illinois irrespective of the attainment status designation of
such location; but shall not include transportation costs of
coal (i) except to the extent that for contracts entered into
on and after the effective date of this amendatory Act of
1997, the cost of the coal, including transportation costs,
constitutes the lowest cost for adequate and reliable fuel
supply reasonably available to the public utility in
comparison to the cost, including transportation costs, of
other adequate and reliable sources of fuel supply reasonably
available to the public utility, or (ii) except as otherwise
provided in the next 3 sentences of this paragraph. Such
costs of fuel shall, when requested by a utility or at the
conclusion of the utility's next general electric rate
proceeding, whichever shall first occur, include
transportation costs of coal purchased under existing coal
purchase contracts. For purposes of this paragraph "existing
coal purchase contracts" means contracts for the purchase of
coal in effect on the effective date of this amendatory Act
of 1991, as such contracts may thereafter be amended, but
only to the extent that any such amendment does not increase
the aggregate quantity of coal to be purchased under such
contract. Nothing herein shall authorize an electric utility
to recover through its fuel adjustment clause any amounts of
transportation costs of coal that were included in the
revenue requirement used to set base rates in its most recent
general rate proceeding. Cost shall be based upon uniformly
applied accounting principles. Annually, the Commission shall
initiate public hearings to determine whether the clauses
reflect actual costs of fuel, gas, power, or coal
transportation purchased to determine whether such purchases
were prudent, and to reconcile any amounts collected with the
actual costs of fuel, power, gas, or coal transportation
prudently purchased. In each such proceeding, the burden of
proof shall be upon the utility to establish the prudence of
its cost of fuel, power, gas, or coal transportation
purchases and costs. The Commission shall issue its final
order in each such annual proceeding for an electric utility
by December 31 of the year immediately following the year to
which the proceeding pertains, provided, that the Commission
shall issue its final order with respect to such annual
proceeding for the years 1996 and earlier by December 31,
1998.
(b) A public utility providing electric service, other
than a public utility described in subsections (e) or (f) of
this Section, may at any time during the mandatory transition
period file with the Commission proposed tariff sheets that
eliminate the public utility's fuel adjustment clause and
adjust the public utility's base rate tariffs by the amount
necessary for the base fuel component of the base rates to
recover the public utility's average fuel and power supply
costs per kilowatt-hour for the 2 most recent years for which
the Commission has issued final orders in annual proceedings
pursuant to subsection (a), where the average fuel and power
supply costs per kilowatt-hour shall be calculated as the sum
of the public utility's prudent and allowable fuel and power
supply costs as found by the Commission in the 2 proceedings
divided by the public utility's actual jurisdictional
kilowatt-hour sales for those 2 years. Notwithstanding any
contrary or inconsistent provisions in Section 9-201 of this
Act, in subsection (a) of this Section or in any rules or
regulations promulgated by the Commission pursuant to
subsection (g) of this Section, the Commission shall review
and shall by order approve, or approve as modified, the
proposed tariff sheets within 60 days after the date of the
public utility's filing. The Commission may modify the
public utility's proposed tariff sheets only to the extent
the Commission finds necessary to achieve conformance to the
requirements of this subsection (b). During the 5 years
following the date of the Commission's order, but in any
event no earlier than January 1, 2007 2005, a public utility
whose fuel adjustment clause has been eliminated pursuant to
this subsection shall not file proposed tariff sheets
seeking, or otherwise petition the Commission for,
reinstatement of a fuel adjustment clause.
(c) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section or in any rules or regulations promulgated by
the Commission pursuant to subsection (g) of this Section, a
public utility providing electric service, other than a
public utility described in subsection (e) or (f) of this
Section, may at any time during the mandatory transition
period file with the Commission proposed tariff sheets that
establish the rate per kilowatt-hour to be applied pursuant
to the public utility's fuel adjustment clause at the average
value for such rate during the preceding 24 months, provided
that such average rate results in a credit to customers'
bills, without making any revisions to the public utility's
base rate tariffs. The proposed tariff sheets shall
establish the fuel adjustment rate for a specific time period
of at least 3 years but not more than 5 years, provided that
the terms and conditions for any reinstatement earlier than 5
years shall be set forth in the proposed tariff sheets and
subject to modification or approval by the Commission. The
Commission shall review and shall by order approve the
proposed tariff sheets if it finds that the requirements of
this subsection are met. The Commission shall not conduct
the annual hearings specified in the last 3 sentences of
subsection (a) of this Section for the utility for the period
that the factor established pursuant to this subsection is in
effect.
(d) A public utility providing electric service, or a
public utility providing gas service may file with the
Commission proposed tariff sheets that eliminate the public
utility's fuel or purchased gas adjustment clause and adjust
the public utility's base rate tariffs to provide for
recovery of power supply costs or gas supply costs that would
have been recovered through such clause; provided, that the
provisions of this subsection (d) shall not be available to a
public utility described in subsections (e) or (f) of this
Section to eliminate its fuel adjustment clause.
Notwithstanding any contrary or inconsistent provisions in
Section 9-201 of this Act, in subsection (a) of this Section,
or in any rules or regulations promulgated by the Commission
pursuant to subsection (g) of this Section, the Commission
shall review and shall by order approve, or approve as
modified in the Commission's order, the proposed tariff
sheets within 240 days after the date of the public utility's
filing. The Commission's order shall approve rates and
charges that the Commission, based on information in the
public utility's filing or on the record if a hearing is held
by the Commission, finds will recover the reasonable, prudent
and necessary jurisdictional power supply costs or gas supply
costs incurred or to be incurred by the public utility during
a 12 month period found by the Commission to be appropriate
for these purposes, provided, that such period shall be
either (i) a 12 month historical period occurring during the
15 months ending on the date of the public utility's filing,
or (ii) a 12 month future period ending no later than 15
months following the date of the public utility's filing.
The public utility shall include with its tariff filing
information showing both (1) its actual jurisdictional power
supply costs or gas supply costs for a 12 month historical
period conforming to (i) above and (2) its projected
jurisdictional power supply costs or gas supply costs for a
future 12 month period conforming to (ii) above. If the
Commission's order requires modifications in the tariff
sheets filed by the public utility, the public utility shall
have 7 days following the date of the order to notify the
Commission whether the public utility will implement the
modified tariffs or elect to continue its fuel or purchased
gas adjustment clause in force as though no order had been
entered. The Commission's order shall provide for any
reconciliation of power supply costs or gas supply costs, as
the case may be, and associated revenues through the date
that the public utility's fuel or purchased gas adjustment
clause is eliminated. During the 5 years following the date
of the Commission's order, a public utility whose fuel or
purchased gas adjustment clause has been eliminated pursuant
to this subsection shall not file proposed tariff sheets
seeking, or otherwise petition the Commission for,
reinstatement or adoption of a fuel or purchased gas
adjustment clause. Nothing in this subsection (d) shall be
construed as limiting the Commission's authority to eliminate
a public utility's fuel adjustment clause or purchased gas
adjustment clause in accordance with any other applicable
provisions of this Act.
(e) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a)
of this Section, or in any rules promulgated by the
Commission pursuant to subsection (g) of this Section, a
public utility providing electric service to more than
1,000,000 customers in this State may, within the first 6
months after the effective date of this amendatory Act of
1997, file with the Commission proposed tariff sheets that
eliminate, effective January 1, 1997, the public utility's
fuel adjustment clause without adjusting its base rates, and
such tariff sheets shall be effective upon filing. To the
extent the application of the fuel adjustment clause had
resulted in net charges to customers after January 1, 1997,
the utility shall also file a tariff sheet that provides for
a refund stated on a per kilowatt-hour basis of such charges
over a period not to exceed 6 months; provided however, that
such refund shall not include the proportional amounts of
taxes paid under the Use Tax Act, Service Use Tax Act,
Service Occupation Tax Act, and Retailers' Occupation Tax Act
on fuel used in generation. The Commission shall issue an
order within 45 days after the date of the public utility's
filing approving or approving as modified such tariff sheet.
If the fuel adjustment clause is eliminated pursuant to this
subsection, the Commission shall not conduct the annual
hearings specified in the last 3 sentences of subsection (a)
of this Section for the utility for any period after
December 31, 1996 and prior to any reinstatement of such
clause. A public utility whose fuel adjustment clause has
been eliminated pursuant to this subsection shall not file a
proposed tariff sheet seeking, or otherwise petition the
Commission for, reinstatement of the fuel adjustment clause
prior to January 1, 2007 2005.
(f) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section, or in any rules or regulations promulgated by
the Commission pursuant to subsection (g) of this Section, a
public utility providing electric service to more than
500,000 customers but fewer than 1,000,000 customers in this
State may, within the first 6 months after the effective date
of this amendatory Act of 1997, file with the Commission
proposed tariff sheets that eliminate, effective January 1,
1997, the public utility's fuel adjustment clause and adjust
its base rates by the amount necessary for the base fuel
component of the base rates to recover 91% of the public
utility's average fuel and power supply costs for the 2 most
recent years for which the Commission, as of January 1, 1997,
has issued final orders in annual proceedings pursuant to
subsection (a), where the average fuel and power supply costs
per kilowatt-hour shall be calculated as the sum of the
public utility's prudent and allowable fuel and power supply
costs as found by the Commission in the 2 proceedings divided
by the public utility's actual jurisdictional kilowatt-hour
sales for those 2 years, provided, that such tariff sheets
shall be effective upon filing. To the extent the
application of the fuel adjustment clause had resulted in net
charges to customers after January 1, 1997, the utility shall
also file a tariff sheet that provides for a refund stated on
a per kilowatt-hour basis of such charges over a period not
to exceed 6 months. Provided however, that such refund shall
not include the proportional amounts of taxes paid under the
Use Tax Act, Service Use Tax Act, Service Occupation Tax Act,
and Retailers' Occupation Tax Act on fuel used in generation.
The Commission shall issue an order within 45 days after the
date of the public utility's filing approving or approving as
modified such tariff sheet. If the fuel adjustment clause is
eliminated pursuant to this subsection, the Commission shall
not conduct the annual hearings specified in the last 3
sentences of subsection (a) of this Section for the utility
for any period after December 31, 1996 and prior to any
reinstatement of such clause. A public utility whose fuel
adjustment clause has been eliminated pursuant to this
subsection shall not file a proposed tariff sheet seeking, or
otherwise petition the Commission for, reinstatement of the
fuel adjustment clause prior to January 1, 2007 2005.
(g) The Commission shall have authority to promulgate
rules and regulations to carry out the provisions of this
Section.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/16-102)
Sec. 16-102. Definitions. For the purposes of this
Article the following terms shall be defined as set forth in
this Section.
"Alternative retail electric supplier" means every
person, cooperative, corporation, municipal corporation,
company, association, joint stock company or association,
firm, partnership, individual, or other entity, their
lessees, trustees, or receivers appointed by any court
whatsoever, that offers electric power or energy for sale,
lease or in exchange for other value received to one or more
retail customers, or that engages in the delivery or
furnishing of electric power or energy to such retail
customers, and shall include, without limitation, resellers,
aggregators and power marketers, but shall not include (i)
electric utilities (or any agent of the electric utility to
the extent the electric utility provides tariffed services to
retail customers through that agent), (ii) any electric
cooperative or municipal system as defined in Section 17-100
to the extent that the electric cooperative or municipal
system is serving retail customers within any area in which
it is or would be entitled to provide service under the law
in effect immediately prior to the effective date of this
amendatory Act of 1997, (iii) a public utility that is owned
and operated by any public institution of higher education of
this State, or a public utility that is owned by such public
institution of higher education and operated by any of its
lessees or operating agents, within any area in which it is
or would be entitled to provide service under the law in
effect immediately prior to the effective date of this
amendatory Act of 1997, (iv) a retail customer to the extent
that customer obtains its electric power and energy from that
customer's own cogeneration or self-generation facilities,
(v) an entity that owns, operates, sells, or arranges for the
installation of a customer's own cogeneration or
self-generation facilities, but only to the extent the entity
is engaged in owning, selling or arranging for the
installation of such facility, or operating the facility on
behalf of such customer, provided however that any such third
party owner or operator of a facility built after January 1,
1999, complies with the labor provisions of Section 16-128(a)
as though such third party were an alternative retail
electric supplier, or (vi) an industrial or manufacturing
customer that owns its own distribution facilities, to the
extent that the customer provides service from that
distribution system to a third-party contractor located on
the customer's premises that is integrally and predominantly
engaged in the customer's industrial or manufacturing
process; provided, that if the industrial or manufacturing
customer has elected delivery services, the customer shall
pay transition charges applicable to the electric power and
energy consumed by the third-party contractor unless such
charges are otherwise paid by the third party contractor,
which shall be calculated based on the usage of, and the base
rates or the contract rates applicable to, the third-party
contractor in accordance with Section 16-102.
"Base rates" means the rates for those tariffed services
that the electric utility is required to offer pursuant to
subsection (a) of Section 16-103 and that were identified in
a rate order for collection of the electric utility's base
rate revenue requirement, excluding (i) separate automatic
rate adjustment riders then in effect, (ii) special or
negotiated contract rates, (iii) delivery services tariffs
filed pursuant to Section 16-108, (iv) real-time pricing, or
(v) tariffs that were in effect prior to October 1, 1996 and
that based charges for services on an index or average of
other utilities' charges, but including (vi) any subsequent
redesign of such rates for tariffed services that is
authorized by the Commission after notice and hearing.
"Competitive service" includes (i) any service that has
been declared to be competitive pursuant to Section 16-113 of
this Act, (ii) contract service, and (iii) services, other
than tariffed services, that are related to, but not
necessary for, the provision of electric power and energy or
delivery services.
"Contract service" means (1) services, including the
provision of electric power and energy or other services,
that are provided by mutual agreement between an electric
utility and a retail customer that is located in the electric
utility's service area, provided that, delivery services
shall not be a contract service until such services are
declared competitive pursuant to Section 16-113; and also
means (2) the provision of electric power and energy by an
electric utility to retail customers outside the electric
utility's service area pursuant to Section 16-116. Provided,
however, contract service does not include electric utility
services provided pursuant to (i) contracts that retail
customers are required to execute as a condition of receiving
tariffed services, or (ii) special or negotiated rate
contracts for electric utility services that were entered
into between an electric utility and a retail customer prior
to the effective date of this amendatory Act of 1997 and
filed with the Commission.
"Delivery services" means those services provided by the
electric utility that are necessary in order for the
transmission and distribution systems to function so that
retail customers located in the electric utility's service
area can receive electric power and energy from suppliers
other than the electric utility, and shall include, without
limitation, standard metering and billing services.
"Electric utility" means a public utility, as defined in
Section 3-105 of this Act, that has a franchise, license,
permit or right to furnish or sell electricity to retail
customers within a service area.
"Mandatory transition period" means the period from the
effective date of this amendatory Act of 1997 through January
1, 2007 2005.
"Municipal system" shall have the meaning set forth in
Section 17-100.
"Real-time pricing" means charges for delivered electric
power and energy that vary on an hour-to-hour basis for
nonresidential retail customers and that vary on a periodic
basis during the day for residential retail customers.
"Retail customer" means a single entity using electric
power or energy at a single premises and that (A) either (i)
is receiving or is eligible to receive tariffed services from
an electric utility, or (ii) that is served by a municipal
system or electric cooperative within any area in which the
municipal system or electric cooperative is or would be
entitled to provide service under the law in effect
immediately prior to the effective date of this amendatory
Act of 1997, or (B) an entity which on the effective date of
this Act was receiving electric service from a public utility
and (i) was engaged in the practice of resale and
redistribution of such electricity within a building prior to
January 2, 1957, or (ii) was providing lighting services to
tenants in a multi-occupancy building, but only to the extent
such resale, redistribution or lighting service is authorized
by the electric utility's tariffs that were on file with the
Commission on the effective date of this Act.
"Service area" means (i) the geographic area within which
an electric utility was lawfully entitled to provide electric
power and energy to retail customers as of the effective date
of this amendatory Act of 1997, and includes (ii) the
location of any retail customer to which the electric utility
was lawfully providing electric utility services on such
effective date.
"Small commercial retail customer" means those
nonresidential retail customers of an electric utility
consuming 15,000 kilowatt-hours or less of electricity
annually in its service area.
"Tariffed service" means services provided to retail
customers by an electric utility as defined by its rates on
file with the Commission pursuant to the provisions of
Article IX of this Act, but shall not include competitive
services.
"Transition charge" means a charge expressed in cents per
kilowatt-hour that is calculated for a customer or class of
customers as follows for each year in which an electric
utility is entitled to recover transition charges as provided
in Section 16-108:
(1) the amount of revenue that an electric utility
would receive from the retail customer or customers if it
were serving such customers' electric power and energy
requirements as a tariffed service based on (A) all of
the customers' actual usage during the 3 years ending 90
days prior to the date on which such customers were first
eligible for delivery services pursuant to Section
16-104, and (B) on (i) the base rates in effect on
October 1, 1996 (adjusted for the reductions required by
subsection (b) of Section 16-111, for any reduction
resulting from a rate decrease under Section 16-101(b),
for any restatement of base rates made in conjunction
with an elimination of the fuel adjustment clause
pursuant to subsection (b), (d), or (f) of Section 9-220
and for any removal of decommissioning costs from base
rates pursuant to Section 16-114) and any separate
automatic rate adjustment riders (other than a
decommissioning rate as defined in Section 16-114) under
which the customers were receiving or, had they been
customers, would have received electric power and energy
from the electric utility during the year immediately
preceding the date on which such customers were first
eligible for delivery service pursuant to Section 16-104,
or (ii) to the extent applicable, any contract rates,
including contracts or rates for consolidated or
aggregated billing, under which such customers were
receiving electric power and energy from the electric
utility during such year;
(2) less the amount of revenue, other than revenue
from transition charges and decommissioning rates, that
the electric utility would receive from such retail
customers for delivery services provided by the electric
utility, assuming such customers were taking delivery
services for all of their usage, based on the delivery
services tariffs in effect during the year for which the
transition charge is being calculated and on the usage
identified in paragraph (1);
(3) less the market value for the electric power
and energy that the electric utility would have used to
supply all of such customers' electric power and energy
requirements, as a tariffed service, based on the usage
identified in paragraph (1), with such market value
determined in accordance with Section 16-112 of this Act;
(4) less the following amount which represents the
amount to be attributed to new revenue sources and cost
reductions by the electric utility through the end of the
period for which transition costs are recovered pursuant
to Section 16-108, referred to in this Article XVI as a
"mitigation factor":
(A) for nonresidential retail customers, an
amount equal to the greater of (i) 0.5 cents per
kilowatt-hour during the period October 1, 1999
through December 31, 2004, 0.6 cents per
kilowatt-hour in calendar year 2005, and 0.9 cents
per kilowatt-hour in calendar year 2006, multiplied
in each year by the usage identified in paragraph
(1), or (ii) an amount equal to the following
percentages of the amount produced by applying the
applicable base rates (adjusted as described in
subparagraph (1)(B)) or contract rate to the usage
identified in paragraph (1): 8% for the period
October 1, 1999 through December 31, 2002, 10% in
calendar years 2003 and 2004, 11% in calendar year
2005 and 12% in calendar year 2006; and
(B) for residential retail customers, an
amount equal to the following percentages of the
amount produced by applying the base rates in effect
on October 1, 1996 (adjusted as described in
subparagraph (1)(B)) to the usage identified in
paragraph (1): (i) 6% from May 1, 2002 through
December 31, 2002, (ii) 7% in calendar years 2003
and 2004, (iii) 8% in calendar year 2005, and (iv)
10% in calendar year 2006;
(5) divided by the usage of such customers
identified in paragraph (1),
provided that the transition charge shall never be less than
zero.
"Unbundled service" means a component or constituent part
of a tariffed service which the electric utility subsequently
offers separately to its customers.
(Source: P.A. 90-561, eff. 12-16-97; 91-50, eff. 6-30-99.)
(220 ILCS 5/16-111)
Sec. 16-111. Rates and restructuring transactions during
mandatory transition period.
(a) During the mandatory transition period,
notwithstanding any provision of Article IX of this Act, and
except as provided in subsections (b), (d), (e), and (f) of
this Section, the Commission shall not (i) initiate,
authorize or order any change by way of increase (other than
in connection with a request for rate increase which was
filed after September 1, 1997 but prior to October 15, 1997,
by an electric utility serving less than 12,500 customers in
this State), (ii) initiate or, unless requested by the
electric utility, authorize or order any change by way of
decrease, restructuring or unbundling (except as provided in
Section 16-109A), in the rates of any electric utility that
were in effect on October 1, 1996, or (iii) in any order
approving any application for a merger pursuant to Section
7-204 that was pending as of May 16, 1997, impose any
condition requiring any filing for an increase, decrease, or
change in, or other review of, an electric utility's rates or
enforce any such condition of any such order; provided,
however, that this subsection shall not prohibit the
Commission from:
(1) approving the application of an electric
utility to implement an alternative to rate of return
regulation or a regulatory mechanism that rewards or
penalizes the electric utility through adjustment of
rates based on utility performance, pursuant to Section
9-244;
(2) authorizing an electric utility to eliminate
its fuel adjustment clause and adjust its base rate
tariffs in accordance with subsection (b), (d), or (f) of
Section 9-220 of this Act, to fix its fuel adjustment
factor in accordance with subsection (c) of Section 9-220
of this Act, or to eliminate its fuel adjustment clause
in accordance with subsection (e) of Section 9-220 of
this Act;
(3) ordering into effect tariffs for delivery
services and transition charges in accordance with
Sections 16-104 and 16-108, for real-time pricing in
accordance with Section 16-107, or the options required
by Section 16-110 and subsection (n) of 16-112, allowing
a billing experiment in accordance with Section 16-106,
or modifying delivery services tariffs in accordance with
Section 16-109; or
(4) ordering or allowing into effect any tariff to
recover charges pursuant to Sections 9-201.5, 9-220.1,
9-221, 9-222 (except as provided in Section 9-222.1),
16-108, and 16-114 of this Act, Section 5-5 of the
Electricity Infrastructure Maintenance Fee Law, Section
6-5 of the Renewable Energy, Energy Efficiency, and Coal
Resources Development Law of 1997, and Section 13 of the
Energy Assistance Act of 1989.
After December 31, 2004, the provisions of this
subsection (a) shall not apply to an electric utility whose
average residential retail rate was less than or equal to 90%
of the average residential retail rate for the "Midwest
Utilities", as that term is defined in subsection (b) of this
Section, based on data reported on Form 1 to the Federal
Energy Regulatory Commission for calendar year 1995, and
which served between 150,000 and 250,000 retail customers in
this State on January 1, 1995 unless the electric utility or
its holding company has been acquired by or merged with an
affiliate of another electric utility subsequent to January
1, 2002. This exemption shall be limited to this subsection
(a) and shall not extend to any other provisions of this Act.
(b) Notwithstanding the provisions of subsection (a),
each Illinois electric utility serving more than 12,500
customers in Illinois shall file tariffs (i) reducing,
effective August 1, 1998, each component of its base rates to
residential retail customers by 15% from the base rates in
effect immediately prior to January 1, 1998 and (ii) if the
public utility provides electric service to (A) more than
500,000 customers but less than 1,000,000 customers in this
State on January 1, 1999, reducing, effective May 1, 2002,
each component of its base rates to residential retail
customers by an additional 5% from the base rates in effect
immediately prior to January 1, 1998, or (B) at least
1,000,000 customers in this State on January 1, 1999,
reducing, effective October 1, 2001, each component of its
base rates to residential retail customers by an additional
5% from the base rates in effect immediately prior to January
1, 1998. Provided, however, that (A) if an electric utility's
average residential retail rate is less than or equal to the
average residential retail rate for a group of Midwest
Utilities (consisting of all investor-owned electric
utilities with annual system peaks in excess of 1000
megawatts in the States of Illinois, Indiana, Iowa, Kentucky,
Michigan, Missouri, Ohio, and Wisconsin), based on data
reported on Form 1 to the Federal Energy Regulatory
Commission for calendar year 1995, then it shall only be
required to file tariffs (i) reducing, effective August 1,
1998, each component of its base rates to residential retail
customers by 5% from the base rates in effect immediately
prior to January 1, 1998, (ii) reducing, effective October 1,
2000, each component of its base rates to residential retail
customers by the lesser of 5% of the base rates in effect
immediately prior to January 1, 1998 or the percentage by
which the electric utility's average residential retail rate
exceeds the average residential retail rate of the Midwest
Utilities, based on data reported on Form 1 to the Federal
Energy Regulatory Commission for calendar year 1999, and
(iii) reducing, effective October 1, 2002, each component of
its base rates to residential retail customers by an
additional amount equal to the lesser of 5% of the base rates
in effect immediately prior to January 1, 1998 or the
percentage by which the electric utility's average
residential retail rate exceeds the average residential
retail rate of the Midwest Utilities, based on data reported
on Form 1 to the Federal Energy Regulatory Commission for
calendar year 2001; and (B) if the average residential retail
rate of an electric utility serving between 150,000 and
250,000 retail customers in this State on January 1, 1995 is
less than or equal to 90% of the average residential retail
rate for the Midwest Utilities, based on data reported on
Form 1 to the Federal Energy Regulatory Commission for
calendar year 1995, then it shall only be required to file
tariffs (i) reducing, effective August 1, 1998, each
component of its base rates to residential retail customers
by 2% from the base rates in effect immediately prior to
January 1, 1998; (ii) reducing, effective October 1, 2000,
each component of its base rates to residential retail
customers by 2% from the base rate in effect immediately
prior to January 1, 1998; and (iii) reducing, effective
October 1, 2002, each component of its base rates to
residential retail customers by 1% from the base rates in
effect immediately prior to January 1, 1998. Provided,
further, that any electric utility for which a decrease in
base rates has been or is placed into effect between October
1, 1996 and the dates specified in the preceding sentences of
this subsection, other than pursuant to the requirements of
this subsection, shall be entitled to reduce the amount of
any reduction or reductions in its base rates required by
this subsection by the amount of such other decrease. The
tariffs required under this subsection shall be filed 45 days
in advance of the effective date. Notwithstanding anything to
the contrary in Section 9-220 of this Act, no restatement of
base rates in conjunction with the elimination of a fuel
adjustment clause under that Section shall result in a lesser
decrease in base rates than customers would otherwise receive
under this subsection had the electric utility's fuel
adjustment clause not been eliminated.
(c) Any utility reducing its base rates by 15% on August
1, 1998 pursuant to subsection (b) shall include the
following statement on its bills for residential customers
from August 1 through December 31, 1998: "Effective August 1,
1998, your rates have been reduced by 15% by the Electric
Service Customer Choice and Rate Relief Law of 1997 passed by
the Illinois General Assembly.". Any utility reducing its
base rates by 5% on August 1, 1998, pursuant to subsection
(b) shall include the following statement on its bills for
residential customers from August 1 through December 31,
1998: "Effective August 1, 1998, your rates have been
reduced by 5% by the Electric Service Customer Choice and
Rate Relief Law of 1997 passed by the Illinois General
Assembly.".
Any utility reducing its base rates by 2% on August 1,
1998 pursuant to subsection (b) shall include the following
statement on its bills for residential customers from August
1 through December 31, 1998: "Effective August 1, 1998, your
rates have been reduced by 2% by the Electric Service
Customer Choice and Rate Relief Law of 1997 passed by the
Illinois General Assembly.".
(d) During the mandatory transition period, but not
before January 1, 2000, and notwithstanding the provisions
of subsection (a), an electric utility may request an
increase in its base rates if the electric utility
demonstrates that the 2-year average of its earned rate of
return on common equity, calculated as its net income
applicable to common stock divided by the average of its
beginning and ending balances of common equity using data
reported in the electric utility's Form 1 report to the
Federal Energy Regulatory Commission but adjusted to remove
the effects of accelerated depreciation or amortization or
other transition or mitigation measures implemented by the
electric utility pursuant to subsection (g) of this Section
and the effect of any refund paid pursuant to subsection (e)
of this Section, is below the 2-year average for the same 2
years of the monthly average yields of 30-year U.S. Treasury
bonds published by the Board of Governors of the Federal
Reserve System in its weekly H.15 Statistical Release or
successor publication. The Commission shall review the
electric utility's request, and may review the justness and
reasonableness of all rates for tariffed services, in
accordance with the provisions of Article IX of this Act,
provided that the Commission shall consider any special or
negotiated adjustments to the revenue requirement agreed to
between the electric utility and the other parties to the
proceeding. In setting rates under this Section, the
Commission shall exclude the costs and revenues that are
associated with competitive services and any billing or
pricing experiments conducted under Section 16-106.
(e) For the purposes of this subsection (e) all
calculations and comparisons shall be performed for the
Illinois operations of multijurisdictional utilities. During
the mandatory transition period, notwithstanding the
provisions of subsection (a), if the 2-year average of an
electric utility's earned rate of return on common equity,
calculated as its net income applicable to common stock
divided by the average of its beginning and ending balances
of common equity using data reported in the electric
utility's Form 1 report to the Federal Energy Regulatory
Commission but adjusted to remove the effect of any refund
paid under this subsection (e), and further adjusted to
include the annual amortization of any difference between the
consideration received by an affiliated interest of the
electric utility in the sale of an asset which had been sold
or transferred by the electric utility to the affiliated
interest subsequent to the effective date of this amendatory
Act of 1997 and the consideration for which such asset had
been sold or transferred to the affiliated interest, with
such difference to be amortized ratably from the date of the
sale by the affiliated interest to December 31, 2006, exceeds
the 2-year average of the Index for the same 2 years by 1.5
or more percentage points, the electric utility shall make
refunds to customers beginning the first billing day of April
in the following year in the manner described in paragraph
(3) of this subsection. For purposes of this subsection (e),
the "Index" shall be the sum of (A) the average for the 12
months ended September 30 of the monthly average yields of
30-year U.S. Treasury bonds published by the Board of
Governors of the Federal Reserve System in its weekly H.15
Statistical Release or successor publication for each year
1998 through 2006 2004, and (B) (i) 4.00 percentage points
for each of the 12-month periods ending September 30, 1998
through September 30, 1999 or 8.00 percentage points if the
electric utility's average residential retail rate is less
than or equal to 90% of the average residential retail rate
for the "Midwest Utilities", as that term is defined in
subsection (b) of this Section, based on data reported on
Form 1 to the Federal Energy Regulatory Commission for
calendar year 1995, and the electric utility served between
150,000 and 250,000 retail customers on January 1, 1995, (ii)
7.00 percentage points for each of the 12-month periods
ending September 30, 2000 through September 30, 2006 2004 if
the electric utility was providing service to at least
1,000,000 customers in this State on January 1, 1999, or 9.00
percentage points if the electric utility's average
residential retail rate is less than or equal to 90% of the
average residential retail rate for the "Midwest Utilities",
as that term is defined in subsection (b) of this Section,
based on data reported on Form 1 to the Federal Energy
Regulatory Commission for calendar year 1995 and the electric
utility served between 150,000 and 250,000 retail customers
in this State on January 1, 1995, (iii) 11.00 percentage
points for each of the 12-month periods ending September 30,
2000 through September 30, 2006 2004, but only if the
electric utility's average residential retail rate is less
than or equal to 90% of the average residential retail rate
for the "Midwest Utilities", as that term is defined in
subsection (b) of this Section, based on data reported on
Form 1 to the Federal Energy Regulatory Commission for
calendar year 1995, the electric utility served between
150,000 and 250,000 retail customers in this State on January
1, 1995, and the electric utility offers delivery services on
or before June 1, 2000 to retail customers whose annual
electric energy use comprises 33% of the kilowatt hour sales
to that group of retail customers that are classified under
Division D, Groups 20 through 39 of the Standard Industrial
Classifications set forth in the Standard Industrial
Classification Manual published by the United States Office
of Management and Budget, excluding the kilowatt hour sales
to those customers that are eligible for delivery services
pursuant to Section 16-104(a)(1)(i), and offers delivery
services to its remaining retail customers classified under
Division D, Groups 20 through 39 on or before October 1,
2000, and, provided further, that the electric utility
commits not to petition pursuant to Section 16-108(f) for
entry of an order by the Commission authorizing the electric
utility to implement transition charges for an additional
period after December 31, 2006, or (iv) 5.00 percentage
points for each of the 12-month periods ending September 30,
2000 through September 30, 2006 2004 for all other electric
utilities or 7.00 percentage points for such utilities for
each of the 12-month periods ending September 30, 2000
through September 30, 2006 2004 for any such utility that
commits not to petition pursuant to Section 16-108(f) for
entry of an order by the Commission authorizing the electric
utility to implement transition charges for an additional
period after December 31, 2006 or 11.00 percentage points for
each of the 12-month periods ending September 30, 2005 and
September 30, 2006 for each electric utility providing
service to fewer than 6,500, or between 75,000 and 150,000,
electric retail customers in this State on January 1, 1995 if
such utility commits not to petition pursuant to Section
16-108(f) for entry of an order by the Commission authorizing
the electric utility to implement transition charges for an
additional period after December 31, 2006.
(1) For purposes of this subsection (e), "excess
earnings" means the difference between (A) the 2-year
average of the electric utility's earned rate of return
on common equity, less (B) the 2-year average of the sum
of (i) the Index applicable to each of the 2 years and
(ii) 1.5 percentage points; provided, that "excess
earnings" shall never be less than zero.
(2) On or before March 31 of each year 2000 through
2007 2005 each electric utility shall file a report with
the Commission showing its earned rate of return on
common equity, calculated in accordance with this
subsection, for the preceding calendar year and the
average for the preceding 2 calendar years.
(3) If an electric utility has excess earnings,
determined in accordance with paragraphs (1) and (2) of
this subsection, the refunds which the electric utility
shall pay to its customers beginning the first billing
day of April in the following year shall be calculated
and applied as follows:
(i) The electric utility's excess earnings
shall be multiplied by the average of the beginning
and ending balances of the electric utility's common
equity for the 2-year period in which excess
earnings occurred.
(ii) The result of the calculation in (i)
shall be multiplied by 0.50 and then divided by a
number equal to 1 minus the electric utility's
composite federal and State income tax rate.
(iii) The result of the calculation in (ii)
shall be divided by the sum of the electric
utility's projected total kilowatt-hour sales to
retail customers plus projected kilowatt-hours to be
delivered to delivery services customers over a one
year period beginning with the first billing date in
April in the succeeding year to determine a cents
per kilowatt-hour refund factor.
(iv) The cents per kilowatt-hour refund factor
calculated in (iii) shall be credited to the
electric utility's customers by applying the factor
on the customer's monthly bills to each
kilowatt-hour sold or delivered until the total
amount calculated in (ii) has been paid to
customers.
(f) During the mandatory transition period, an electric
utility may file revised tariffs reducing the price of any
tariffed service offered by the electric utility for all
customers taking that tariffed service, which shall be
effective 7 days after filing.
(g) During the mandatory transition period, an electric
utility may, without obtaining any approval of the Commission
other than that provided for in this subsection and
notwithstanding any other provision of this Act or any rule
or regulation of the Commission that would require such
approval:
(1) implement a reorganization, other than a merger
of 2 or more public utilities as defined in Section 3-105
or their holding companies;
(2) retire generating plants from service;
(3) sell, assign, lease or otherwise transfer
assets to an affiliated or unaffiliated entity and as
part of such transaction enter into service agreements,
power purchase agreements, or other agreements with the
transferee; provided, however, that the prices, terms and
conditions of any power purchase agreement must be
approved or allowed into effect by the Federal Energy
Regulatory Commission; or
(4) use any accelerated cost recovery method
including accelerated depreciation, accelerated
amortization or other capital recovery methods, or record
reductions to the original cost of its assets.
In order to implement a reorganization, retire generating
plants from service, or sell, assign, lease or otherwise
transfer assets pursuant to this Section, the electric
utility shall comply with subsections (c) and (d) of Section
16-128, if applicable, and subsection (k) of this Section, if
applicable, and provide the Commission with at least 30 days
notice of the proposed reorganization or transaction, which
notice shall include the following information:
(i) a complete statement of the entries that
the electric utility will make on its books and
records of account to implement the proposed
reorganization or transaction together with a
certification from an independent certified public
accountant that such entries are in accord with
generally accepted accounting principles and, if the
Commission has previously approved guidelines for
cost allocations between the utility and its
affiliates, a certification from the chief
accounting officer of the utility that such entries
are in accord with those cost allocation guidelines;
(ii) a description of how the electric utility
will use proceeds of any sale, assignment, lease or
transfer to retire debt or otherwise reduce or
recover the costs of services provided by such
electric utility;
(iii) a list of all federal approvals or
approvals required from departments and agencies of
this State, other than the Commission, that the
electric utility has or will obtain before
implementing the reorganization or transaction;
(iv) an irrevocable commitment by the electric
utility that it will not, as a result of the
transaction, impose any stranded cost charges that
it might otherwise be allowed to charge retail
customers under federal law or increase the
transition charges that it is otherwise entitled to
collect under this Article XVI; and
(v) if the electric utility proposes to sell,
assign, lease or otherwise transfer a generating
plant that brings the amount of net dependable
generating capacity transferred pursuant to this
subsection to an amount equal to or greater than 15%
of the electric utility's net dependable capacity as
of the effective date of this amendatory Act of
1997, and enters into a power purchase agreement
with the entity to which such generating plant is
sold, assigned, leased, or otherwise transferred,
the electric utility also agrees, if its fuel
adjustment clause has not already been eliminated,
to eliminate its fuel adjustment clause in
accordance with subsection (b) of Section 9-220 for
a period of time equal to the length of any such
power purchase agreement or successor agreement, or
until January 1, 2005, whichever is longer; if the
capacity of the generating plant so transferred and
related power purchase agreement does not result in
the elimination of the fuel adjustment clause under
this subsection, and the fuel adjustment clause has
not already been eliminated, the electric utility
shall agree that the costs associated with the
transferred plant that are included in the
calculation of the rate per kilowatt-hour to be
applied pursuant to the electric utility's fuel
adjustment clause during such period shall not
exceed the per kilowatt-hour cost associated with
such generating plant included in the electric
utility's fuel adjustment clause during the full
calendar year preceding the transfer, with such
limit to be adjusted each year thereafter by the
Gross Domestic Product Implicit Price Deflator.
(vi) In addition, if the electric utility
proposes to sell, assign, or lease, (A) either (1)
an amount of generating plant that brings the amount
of net dependable generating capacity transferred
pursuant to this subsection to an amount equal to or
greater than 15% of its net dependable capacity on
the effective date of this amendatory Act of 1997,
or (2) one or more generating plants with a total
net dependable capacity of 1100 megawatts, or (B)
transmission and distribution facilities that either
(1) bring the amount of transmission and
distribution facilities transferred pursuant to this
subsection to an amount equal to or greater than 15%
of the electric utility's total depreciated original
cost investment in such facilities, or (2) represent
an investment of $25,000,000 in terms of total
depreciated original cost, the electric utility
shall provide, in addition to the information listed
in subparagraphs (i) through (v), the following
information: (A) a description of how the electric
utility will meet its service obligations under this
Act in a safe and reliable manner and (B) the
electric utility's projected earned rate of return
on common equity, calculated in accordance with
subsection (d) of this Section, for each year from
the date of the notice through December 31, 2006
2004 both with and without the proposed transaction.
If the Commission has not issued an order initiating
a hearing on the proposed transaction within 30 days
after the date the electric utility's notice is
filed, the transaction shall be deemed approved.
The Commission may, after notice and hearing,
prohibit the proposed transaction if it makes either
or both of the following findings: (1) that the
proposed transaction will render the electric
utility unable to provide its tariffed services in a
safe and reliable manner, or (2) that there is a
strong likelihood that consummation of the proposed
transaction will result in the electric utility
being entitled to request an increase in its base
rates during the mandatory transition period
pursuant to subsection (d) of this Section. Any
hearing initiated by the Commission into the
proposed transaction shall be completed, and the
Commission's final order approving or prohibiting
the proposed transaction shall be entered, within 90
days after the date the electric utility's notice
was filed. Provided, however, that a sale,
assignment, or lease of transmission facilities to
an independent system operator that meets the
requirements of Section 16-126 shall not be subject
to Commission approval under this Section.
In any proceeding conducted by the Commission
pursuant to this subparagraph (vi), intervention
shall be limited to parties with a direct interest
in the transaction which is the subject of the
hearing and any statutory consumer protection agency
as defined in subsection (d) of Section 9-102.1.
Notwithstanding the provisions of Section 10-113 of
this Act, any application seeking rehearing of an
order issued under this subparagraph (vi), whether
filed by the electric utility or by an intervening
party, shall be filed within 10 days after service
of the order.
The Commission shall not in any subsequent proceeding or
otherwise, review such a reorganization or other transaction
authorized by this Section, but shall retain the authority to
allocate costs as stated in Section 16-111(i). An entity to
which an electric utility sells, assigns, leases or transfers
assets pursuant to this subsection (g) shall not, as a result
of the transactions specified in this subsection (g), be
deemed a public utility as defined in Section 3-105. Nothing
in this subsection (g) shall change any requirement under the
jurisdiction of the Illinois Department of Nuclear Safety
including, but not limited to, the payment of fees. Nothing
in this subsection (g) shall exempt a utility from obtaining
a certificate pursuant to Section 8-406 of this Act for the
construction of a new electric generating facility. Nothing
in this subsection (g) is intended to exempt the transactions
hereunder from the operation of the federal or State
antitrust laws. Nothing in this subsection (g) shall require
an electric utility to use the procedures specified in this
subsection for any of the transactions specified herein. Any
other procedure available under this Act may, at the electric
utility's election, be used for any such transaction.
(h) During the mandatory transition period, the
Commission shall not establish or use any rates of
depreciation, which for purposes of this subsection shall
include amortization, for any electric utility other than
those established pursuant to subsection (c) of Section 5-104
of this Act or utilized pursuant to subsection (g) of this
Section. Provided, however, that in any proceeding to review
an electric utility's rates for tariffed services pursuant to
Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the
Commission may establish new rates of depreciation for the
electric utility in the same manner provided in subsection
(d) of Section 5-104 of this Act. An electric utility
implementing an accelerated cost recovery method including
accelerated depreciation, accelerated amortization or other
capital recovery methods, or recording reductions to the
original cost of its assets, pursuant to subsection (g) of
this Section, shall file a statement with the Commission
describing the accelerated cost recovery method to be
implemented or the reduction in the original cost of its
assets to be recorded. Upon the filing of such statement,
the accelerated cost recovery method or the reduction in the
original cost of assets shall be deemed to be approved by the
Commission as though an order had been entered by the
Commission.
(i) Subsequent to the mandatory transition period, the
Commission, in any proceeding to establish rates and charges
for tariffed services offered by an electric utility, shall
consider only (1) the then current or projected revenues,
costs, investments and cost of capital directly or indirectly
associated with the provision of such tariffed services; (2)
collection of transition charges in accordance with Sections
16-102 and 16-108 of this Act; (3) recovery of any employee
transition costs as described in Section 16-128 which the
electric utility is continuing to incur, including recovery
of any unamortized portion of such costs previously incurred
or committed, with such costs to be equitably allocated among
bundled services, delivery services, and contracts with
alternative retail electric suppliers; and (4) recovery of
the costs associated with the electric utility's compliance
with decommissioning funding requirements; and shall not
consider any other revenues, costs, investments or cost of
capital of either the electric utility or of any affiliate of
the electric utility that are not associated with the
provision of tariffed services. In setting rates for
tariffed services, the Commission shall equitably allocate
joint and common costs and investments between the electric
utility's competitive and tariffed services. In determining
the justness and reasonableness of the electric power and
energy component of an electric utility's rates for tariffed
services subsequent to the mandatory transition period and
prior to the time that the provision of such electric power
and energy is declared competitive, the Commission shall
consider the extent to which the electric utility's tariffed
rates for such component for each customer class exceed the
market value determined pursuant to Section 16-112, and, if
the electric power and energy component of such tariffed rate
exceeds the market value by more than 10% for any customer
class, may establish such electric power and energy component
at a rate equal to the market value plus 10%. In any such
case, the Commission may also elect to extend the provisions
of Section 16-111(e) for any period in which the electric
utility is collecting transition charges, using information
applicable to such period.
(j) During the mandatory transition period, an electric
utility may elect to transfer to a non-operating income
account under the Commission's Uniform System of Accounts
either or both of (i) an amount of unamortized investment tax
credit that is in addition to the ratable amount which is
credited to the electric utility's operating income account
for the year in accordance with Section 46(f)(2) of the
federal Internal Revenue Code of 1986, as in effect prior to
P.L. 101-508, or (ii) "excess tax reserves", as that term is
defined in Section 203(e)(2)(A) of the federal Tax Reform Act
of 1986, provided that (A) the amount transferred may not
exceed the amount of the electric utility's assets that were
created pursuant to Statement of Financial Accounting
Standards No. 71 which the electric utility has written off
during the mandatory transition period, and (B) the transfer
shall not be effective until approved by the Internal Revenue
Service. An electric utility electing to make such a
transfer shall file a statement with the Commission stating
the amount and timing of the transfer for which it intends to
request approval of the Internal Revenue Service, along with
a copy of its proposed request to the Internal Revenue
Service for a ruling. The Commission shall issue an order
within 14 days after the electric utility's filing approving,
subject to receipt of approval from the Internal Revenue
Service, the proposed transfer.
(k) If an electric utility is selling or transferring to
a single buyer 5 or more generating plants located in this
State with a total net dependable capacity of 5000 megawatts
or more pursuant to subsection (g) of this Section and has
obtained a sale price or consideration that exceeds 200% of
the book value of such plants, the electric utility must
provide to the Governor, the President of the Illinois
Senate, the Minority Leader of the Illinois Senate, the
Speaker of the Illinois House of Representatives, and the
Minority Leader of the Illinois House of Representatives no
later than 15 days after filing its notice under subsection
(g) of this Section or 5 days after the date on which this
subsection (k) becomes law, whichever is later, a written
commitment in which such electric utility agrees to expend $2
billion outside the corporate limits of any municipality with
1,000,000 or more inhabitants within such electric utility's
service area, over a 6-year period beginning with the
calendar year in which the notice is filed, on projects,
programs, and improvements within its service area relating
to transmission and distribution including, without
limitation, infrastructure expansion, repair and replacement,
capital investments, operations and maintenance, and
vegetation management.
(Source: P.A. 90-561, eff. 12-16-97; 90-563, eff. 12-16-97;
91-50, eff. 6-30-99.)
(220 ILCS 5/16-111.3 new)
Sec. 16-111.3. Transition period earnings calculations.
At such time as the Board of Governors of the Federal Reserve
System ceases to include the monthly average yields of
30-year U.S. Treasury bonds in its weekly H.15 Statistical
Release or successor publication, the Monthly Treasury
Long-Term Average Rates (25 years and above) published by the
Board of Governors of the Federal Reserve System in its
weekly H.15 Statistical Release or successor publication
shall instead be used to establish a rate for the purpose of
calculating the Index defined in subsection (e) of Section
16-111 of this Act, and at such time, such Monthly Treasury
Long-Term Average Rates (25 years and above) shall also be
used in place of the monthly average yields of 30-year U.S.
Treasury bonds in the rate of return calculation required by
subsection (d) of Section 16-111. An electric utility shall
also remove the effects, if any, of any impairment due to the
application of Statement of Financial Accounting Standards
No. 142, which was issued in June 2001, when making the
calculations required by this Section or by subsections (d)
and (e) of Section 16-111.
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 29, 2002.
Approved June 06, 2002.
Effective June 06, 2002.
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