Rep. Jay Hoffman

Filed: 5/12/2023

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 851

2    AMENDMENT NO. ______. Amend Senate Bill 851 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Public Utilities Act is amended by
5changing Sections 16-108.5 and 21-201 as follows:
 
6    (220 ILCS 5/16-108.5)
7    Sec. 16-108.5. Infrastructure investment and
8modernization; regulatory reform.
9    (a) (Blank).
10    (b) For purposes of this Section, "participating utility"
11means an electric utility or a combination utility serving
12more than 1,000,000 customers in Illinois that voluntarily
13elects and commits to undertake (i) the infrastructure
14investment program consisting of the commitments and
15obligations described in this subsection (b) and (ii) the
16customer assistance program consisting of the commitments and

 

 

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1obligations described in subsection (b-10) of this Section,
2notwithstanding any other provisions of this Act and without
3obtaining any approvals from the Commission or any other
4agency other than as set forth in this Section, regardless of
5whether any such approval would otherwise be required.
6"Combination utility" means a utility that, as of January 1,
72011, provided electric service to at least one million retail
8customers in Illinois and gas service to at least 500,000
9retail customers in Illinois. A participating utility shall
10recover the expenditures made under the infrastructure
11investment program through the ratemaking process, including,
12but not limited to, the performance-based formula rate and
13process set forth in this Section.
14    During the infrastructure investment program's peak
15program year, a participating utility other than a combination
16utility shall create 2,000 full-time equivalent jobs in
17Illinois, and a participating utility that is a combination
18utility shall create 450 full-time equivalent jobs in Illinois
19related to the provision of electric service. These jobs shall
20include direct jobs, contractor positions, and induced jobs,
21but shall not include any portion of a job commitment, not
22specifically contingent on an amendatory Act of the 97th
23General Assembly becoming law, between a participating utility
24and a labor union that existed on December 30, 2011 (the
25effective date of Public Act 97-646) and that has not yet been
26fulfilled. A portion of the full-time equivalent jobs created

 

 

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1by each participating utility shall include incremental
2personnel hired subsequent to December 30, 2011 (the effective
3date of Public Act 97-646). For purposes of this Section,
4"peak program year" means the consecutive 12-month period with
5the highest number of full-time equivalent jobs that occurs
6between the beginning of investment year 2 and the end of
7investment year 4.
8    A participating utility shall meet one of the following
9commitments, as applicable:
10        (1) Beginning no later than 180 days after a
11    participating utility other than a combination utility
12    files a performance-based formula rate tariff pursuant to
13    subsection (c) of this Section, or, beginning no later
14    than January 1, 2012 if such utility files such
15    performance-based formula rate tariff within 14 days of
16    October 26, 2011 (the effective date of Public Act
17    97-616), the participating utility shall, except as
18    provided in subsection (b-5):
19            (A) over a 5-year period, invest an estimated
20        $1,300,000,000 in electric system upgrades,
21        modernization projects, and training facilities,
22        including, but not limited to:
23                (i) distribution infrastructure improvements
24            totaling an estimated $1,000,000,000, including
25            underground residential distribution cable
26            injection and replacement and mainline cable

 

 

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1            system refurbishment and replacement projects;
2                (ii) training facility construction or upgrade
3            projects totaling an estimated $10,000,000,
4            provided that, at a minimum, one such facility
5            shall be located in a municipality having a
6            population of more than 2 million residents and
7            one such facility shall be located in a
8            municipality having a population of more than
9            150,000 residents but fewer than 170,000
10            residents; any such new facility located in a
11            municipality having a population of more than 2
12            million residents must be designed for the purpose
13            of obtaining, and the owner of the facility shall
14            apply for, certification under the United States
15            Green Building Council's Leadership in Energy
16            Efficiency Design Green Building Rating System;
17                (iii) wood pole inspection, treatment, and
18            replacement programs;
19                (iv) an estimated $200,000,000 for reducing
20            the susceptibility of certain circuits to
21            storm-related damage, including, but not limited
22            to, high winds, thunderstorms, and ice storms;
23            improvements may include, but are not limited to,
24            overhead to underground conversion and other
25            engineered outcomes for circuits; the
26            participating utility shall prioritize the

 

 

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1            selection of circuits based on each circuit's
2            historical susceptibility to storm-related damage
3            and the ability to provide the greatest customer
4            benefit upon completion of the improvements; to be
5            eligible for improvement, the participating
6            utility's ability to maintain proper tree
7            clearances surrounding the overhead circuit must
8            not have been impeded by third parties; and
9            (B) over a 10-year period, invest an estimated
10        $1,300,000,000 to upgrade and modernize its
11        transmission and distribution infrastructure and in
12        Smart Grid electric system upgrades, including, but
13        not limited to:
14                (i) additional smart meters;
15                (ii) distribution automation;
16                (iii) associated cyber secure data
17            communication network; and
18                (iv) substation micro-processor relay
19            upgrades.
20        (2) Beginning no later than 180 days after a
21    participating utility that is a combination utility files
22    a performance-based formula rate tariff pursuant to
23    subsection (c) of this Section, or, beginning no later
24    than January 1, 2012 if such utility files such
25    performance-based formula rate tariff within 14 days of
26    October 26, 2011 (the effective date of Public Act

 

 

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1    97-616), the participating utility shall, except as
2    provided in subsection (b-5):
3            (A) over a 10-year period, invest an estimated
4        $265,000,000 in electric system upgrades,
5        modernization projects, and training facilities,
6        including, but not limited to:
7                (i) distribution infrastructure improvements
8            totaling an estimated $245,000,000, which may
9            include bulk supply substations, transformers,
10            reconductoring, and rebuilding overhead
11            distribution and sub-transmission lines,
12            underground residential distribution cable
13            injection and replacement and mainline cable
14            system refurbishment and replacement projects;
15                (ii) training facility construction or upgrade
16            projects totaling an estimated $1,000,000; any
17            such new facility must be designed for the purpose
18            of obtaining, and the owner of the facility shall
19            apply for, certification under the United States
20            Green Building Council's Leadership in Energy
21            Efficiency Design Green Building Rating System;
22            and
23                (iii) wood pole inspection, treatment, and
24            replacement programs; and
25            (B) over a 10-year period, invest an estimated
26        $360,000,000 to upgrade and modernize its transmission

 

 

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1        and distribution infrastructure and in Smart Grid
2        electric system upgrades, including, but not limited
3        to:
4                (i) additional smart meters;
5                (ii) distribution automation;
6                (iii) associated cyber secure data
7            communication network; and
8                (iv) substation micro-processor relay
9            upgrades.
10    For purposes of this Section, "Smart Grid electric system
11upgrades" shall have the meaning set forth in subsection (a)
12of Section 16-108.6 of this Act.
13    The investments in the infrastructure investment program
14described in this subsection (b) shall be incremental to the
15participating utility's annual capital investment program, as
16defined by, for purposes of this subsection (b), the
17participating utility's average capital spend for calendar
18years 2008, 2009, and 2010 as reported in the applicable
19Federal Energy Regulatory Commission (FERC) Form 1; provided
20that where one or more utilities have merged, the average
21capital spend shall be determined using the aggregate of the
22merged utilities' capital spend reported in FERC Form 1 for
23the years 2008, 2009, and 2010. A participating utility may
24add reasonable construction ramp-up and ramp-down time to the
25investment periods specified in this subsection (b). For each
26such investment period, the ramp-up and ramp-down time shall

 

 

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1not exceed a total of 6 months.
2    Within 60 days after filing a tariff under subsection (c)
3of this Section, a participating utility shall submit to the
4Commission its plan, including scope, schedule, and staffing,
5for satisfying its infrastructure investment program
6commitments pursuant to this subsection (b). The submitted
7plan shall include a schedule and staffing plan for the next
8calendar year. The plan shall also include a plan for the
9creation, operation, and administration of a Smart Grid test
10bed as described in subsection (c) of Section 16-108.8. The
11plan need not allocate the work equally over the respective
12periods, but should allocate material increments throughout
13such periods commensurate with the work to be undertaken. No
14later than April 1 of each subsequent year, the utility shall
15submit to the Commission a report that includes any updates to
16the plan, a schedule for the next calendar year, the
17expenditures made for the prior calendar year and
18cumulatively, and the number of full-time equivalent jobs
19created for the prior calendar year and cumulatively. If the
20utility is materially deficient in satisfying a schedule or
21staffing plan, then the report must also include a corrective
22action plan to address the deficiency. The fact that the plan,
23implementation of the plan, or a schedule changes shall not
24imply the imprudence or unreasonableness of the infrastructure
25investment program, plan, or schedule. Further, no later than
2645 days following the last day of the first, second, and third

 

 

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1quarters of each year of the plan, a participating utility
2shall submit to the Commission a verified quarterly report for
3the prior quarter that includes (i) the total number of
4full-time equivalent jobs created during the prior quarter,
5(ii) the total number of employees as of the last day of the
6prior quarter, (iii) the total number of full-time equivalent
7hours in each job classification or job title, (iv) the total
8number of incremental employees and contractors in support of
9the investments undertaken pursuant to this subsection (b) for
10the prior quarter, and (v) any other information that the
11Commission may require by rule.
12    With respect to the participating utility's peak job
13commitment, if, after considering the utility's corrective
14action plan and compliance thereunder, the Commission enters
15an order finding, after notice and hearing, that a
16participating utility did not satisfy its peak job commitment
17described in this subsection (b) for reasons that are
18reasonably within its control, then the Commission shall also
19determine, after consideration of the evidence, including, but
20not limited to, evidence submitted by the Department of
21Commerce and Economic Opportunity and the utility, the
22deficiency in the number of full-time equivalent jobs during
23the peak program year due to such failure. The Commission
24shall notify the Department of any proceeding that is
25initiated pursuant to this paragraph. For each full-time
26equivalent job deficiency during the peak program year that

 

 

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1the Commission finds as set forth in this paragraph, the
2participating utility shall, within 30 days after the entry of
3the Commission's order, pay $6,000 to a fund for training
4grants administered under Section 605-800 of the Department of
5Commerce and Economic Opportunity Law, which shall not be a
6recoverable expense.
7    With respect to the participating utility's investment
8amount commitments, if, after considering the utility's
9corrective action plan and compliance thereunder, the
10Commission enters an order finding, after notice and hearing,
11that a participating utility is not satisfying its investment
12amount commitments described in this subsection (b), then the
13utility shall no longer be eligible to annually update the
14performance-based formula rate tariff pursuant to subsection
15(d) of this Section. In such event, the then current rates
16shall remain in effect until such time as new rates are set
17pursuant to Article IX of this Act, subject to retroactive
18adjustment, with interest, to reconcile rates charged with
19actual costs.
20    If the Commission finds that a participating utility is no
21longer eligible to update the performance-based formula rate
22tariff pursuant to subsection (d) of this Section, or the
23performance-based formula rate is otherwise terminated, then
24the participating utility's voluntary commitments and
25obligations under this subsection (b) shall immediately
26terminate, except for the utility's obligation to pay an

 

 

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1amount already owed to the fund for training grants pursuant
2to a Commission order.
3    In meeting the obligations of this subsection (b), to the
4extent feasible and consistent with State and federal law, the
5investments under the infrastructure investment program should
6provide employment opportunities for all segments of the
7population and workforce, including minority-owned and
8female-owned business enterprises, and shall not, consistent
9with State and federal law, discriminate based on race or
10socioeconomic status.
11    (b-5) Nothing in this Section shall prohibit the
12Commission from investigating the prudence and reasonableness
13of the expenditures made under the infrastructure investment
14program during the annual review required by subsection (d) of
15this Section and shall, as part of such investigation,
16determine whether the utility's actual costs under the program
17are prudent and reasonable. The fact that a participating
18utility invests more than the minimum amounts specified in
19subsection (b) of this Section or its plan shall not imply
20imprudence or unreasonableness.
21    If the participating utility finds that it is implementing
22its plan for satisfying the infrastructure investment program
23commitments described in subsection (b) of this Section at a
24cost below the estimated amounts specified in subsection (b)
25of this Section, then the utility may file a petition with the
26Commission requesting that it be permitted to satisfy its

 

 

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1commitments by spending less than the estimated amounts
2specified in subsection (b) of this Section. The Commission
3shall, after notice and hearing, enter its order approving, or
4approving as modified, or denying each such petition within
5150 days after the filing of the petition.
6    In no event, absent General Assembly approval, shall the
7capital investment costs incurred by a participating utility
8other than a combination utility in satisfying its
9infrastructure investment program commitments described in
10subsection (b) of this Section exceed $3,000,000,000 or, for a
11participating utility that is a combination utility,
12$720,000,000. If the participating utility's updated cost
13estimates for satisfying its infrastructure investment program
14commitments described in subsection (b) of this Section exceed
15the limitation imposed by this subsection (b-5), then it shall
16submit a report to the Commission that identifies the
17increased costs and explains the reason or reasons for the
18increased costs no later than the year in which the utility
19estimates it will exceed the limitation. The Commission shall
20review the report and shall, within 90 days after the
21participating utility files the report, report to the General
22Assembly its findings regarding the participating utility's
23report. If the General Assembly does not amend the limitation
24imposed by this subsection (b-5), then the utility may modify
25its plan so as not to exceed the limitation imposed by this
26subsection (b-5) and may propose corresponding changes to the

 

 

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1metrics established pursuant to subparagraphs (5) through (8)
2of subsection (f) of this Section, and the Commission may
3modify the metrics and incremental savings goals established
4pursuant to subsection (f) of this Section accordingly.
5    (b-10) All participating utilities shall make
6contributions for an energy low-income and support program in
7accordance with this subsection. Beginning no later than 180
8days after a participating utility files a performance-based
9formula rate tariff pursuant to subsection (c) of this
10Section, or beginning no later than January 1, 2012 if such
11utility files such performance-based formula rate tariff
12within 14 days of December 30, 2011 (the effective date of
13Public Act 97-646), and without obtaining any approvals from
14the Commission or any other agency other than as set forth in
15this Section, regardless of whether any such approval would
16otherwise be required, a participating utility other than a
17combination utility shall pay $10,000,000 per year for 5 years
18and a participating utility that is a combination utility
19shall pay $1,000,000 per year for 10 years to the energy
20low-income and support program, which is intended to fund
21customer assistance programs with the primary purpose being
22avoidance of imminent disconnection. Such programs may
23include:
24        (1) a residential hardship program that may partner
25    with community-based organizations, including senior
26    citizen organizations, and provides grants to low-income

 

 

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1    residential customers, including low-income senior
2    citizens, who demonstrate a hardship;
3        (2) a program that provides grants and other bill
4    payment concessions to veterans with disabilities who
5    demonstrate a hardship and members of the armed services
6    or reserve forces of the United States or members of the
7    Illinois National Guard who are on active duty pursuant to
8    an executive order of the President of the United States,
9    an act of the Congress of the United States, or an order of
10    the Governor and who demonstrate a hardship;
11        (3) a budget assistance program that provides tools
12    and education to low-income senior citizens to assist them
13    with obtaining information regarding energy usage and
14    effective means of managing energy costs;
15        (4) a non-residential special hardship program that
16    provides grants to non-residential customers such as small
17    businesses and non-profit organizations that demonstrate a
18    hardship, including those providing services to senior
19    citizen and low-income customers; and
20        (5) a performance-based assistance program that
21    provides grants to encourage residential customers to make
22    on-time payments by matching a portion of the customer's
23    payments or providing credits towards arrearages.
24    The payments made by a participating utility pursuant to
25this subsection (b-10) shall not be a recoverable expense. A
26participating utility may elect to fund either new or existing

 

 

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1customer assistance programs, including, but not limited to,
2those that are administered by the utility.
3    Programs that use funds that are provided by a
4participating utility to reduce utility bills may be
5implemented through tariffs that are filed with and reviewed
6by the Commission. If a utility elects to file tariffs with the
7Commission to implement all or a portion of the programs,
8those tariffs shall, regardless of the date actually filed, be
9deemed accepted and approved, and shall become effective on
10December 30, 2011 (the effective date of Public Act 97-646).
11The participating utilities whose customers benefit from the
12funds that are disbursed as contemplated in this Section shall
13file annual reports documenting the disbursement of those
14funds with the Commission. The Commission has the authority to
15audit disbursement of the funds to ensure they were disbursed
16consistently with this Section.
17    If the Commission finds that a participating utility is no
18longer eligible to update the performance-based formula rate
19tariff pursuant to subsection (d) of this Section, or the
20performance-based formula rate is otherwise terminated, then
21the participating utility's voluntary commitments and
22obligations under this subsection (b-10) shall immediately
23terminate.
24    (c) A participating utility may elect to recover its
25delivery services costs through a performance-based formula
26rate approved by the Commission, which shall specify the cost

 

 

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1components that form the basis of the rate charged to
2customers with sufficient specificity to operate in a
3standardized manner and be updated annually with transparent
4information that reflects the utility's actual costs to be
5recovered during the applicable rate year, which is the period
6beginning with the first billing day of January and extending
7through the last billing day of the following December. In the
8event the utility recovers a portion of its costs through
9automatic adjustment clause tariffs on October 26, 2011 (the
10effective date of Public Act 97-616), the utility may elect to
11continue to recover these costs through such tariffs, but then
12these costs shall not be recovered through the
13performance-based formula rate. In the event the participating
14utility, prior to December 30, 2011 (the effective date of
15Public Act 97-646), filed electric delivery services tariffs
16with the Commission pursuant to Section 9-201 of this Act that
17are related to the recovery of its electric delivery services
18costs that are still pending on December 30, 2011 (the
19effective date of Public Act 97-646), the participating
20utility shall, at the time it files its performance-based
21formula rate tariff with the Commission, also file a notice of
22withdrawal with the Commission to withdraw the electric
23delivery services tariffs previously filed pursuant to Section
249-201 of this Act. Upon receipt of such notice, the Commission
25shall dismiss with prejudice any docket that had been
26initiated to investigate the electric delivery services

 

 

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1tariffs filed pursuant to Section 9-201 of this Act, and such
2tariffs and the record related thereto shall not be the
3subject of any further hearing, investigation, or proceeding
4of any kind related to rates for electric delivery services.
5    The performance-based formula rate shall be implemented
6through a tariff filed with the Commission consistent with the
7provisions of this subsection (c) that shall be applicable to
8all delivery services customers. The Commission shall initiate
9and conduct an investigation of the tariff in a manner
10consistent with the provisions of this subsection (c) and the
11provisions of Article IX of this Act to the extent they do not
12conflict with this subsection (c). Except in the case where
13the Commission finds, after notice and hearing, that a
14participating utility is not satisfying its investment amount
15commitments under subsection (b) of this Section, the
16performance-based formula rate shall remain in effect at the
17discretion of the utility. The performance-based formula rate
18approved by the Commission shall do the following:
19        (1) Provide for the recovery of the utility's actual
20    costs of delivery services that are prudently incurred and
21    reasonable in amount consistent with Commission practice
22    and law. The sole fact that a cost differs from that
23    incurred in a prior calendar year or that an investment is
24    different from that made in a prior calendar year shall
25    not imply the imprudence or unreasonableness of that cost
26    or investment.

 

 

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1        (2) Reflect the utility's actual year-end capital
2    structure for the applicable calendar year, excluding
3    goodwill, subject to a determination of prudence and
4    reasonableness consistent with Commission practice and
5    law. To enable the financing of the incremental capital
6    expenditures, including regulatory assets, for electric
7    utilities that serve less than 3,000,000 retail customers
8    but more than 500,000 retail customers in the State, a
9    participating electric utility's actual year-end capital
10    structure that includes a common equity ratio, excluding
11    goodwill, of up to and including 50% of the total capital
12    structure shall be deemed reasonable and used to set
13    rates.
14        (3) Include a cost of equity, which shall be
15    calculated as the sum of the following:
16            (A) the average for the applicable calendar year
17        of the monthly average yields of 30-year U.S. Treasury
18        bonds published by the Board of Governors of the
19        Federal Reserve System in its weekly H.15 Statistical
20        Release or successor publication; and
21            (B) 580 basis points.
22        At such time as the Board of Governors of the Federal
23    Reserve System ceases to include the monthly average
24    yields of 30-year U.S. Treasury bonds in its weekly H.15
25    Statistical Release or successor publication, the monthly
26    average yields of the U.S. Treasury bonds then having the

 

 

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1    longest duration published by the Board of Governors in
2    its weekly H.15 Statistical Release or successor
3    publication shall instead be used for purposes of this
4    paragraph (3).
5        (4) Permit and set forth protocols, subject to a
6    determination of prudence and reasonableness consistent
7    with Commission practice and law, for the following:
8            (A) recovery of incentive compensation expense
9        that is based on the achievement of operational
10        metrics, including metrics related to budget controls,
11        outage duration and frequency, safety, customer
12        service, efficiency and productivity, and
13        environmental compliance. Incentive compensation
14        expense that is based on net income or an affiliate's
15        earnings per share shall not be recoverable under the
16        performance-based formula rate;
17            (B) recovery of pension and other post-employment
18        benefits expense, provided that such costs are
19        supported by an actuarial study;
20            (C) recovery of severance costs, provided that if
21        the amount is over $3,700,000 for a participating
22        utility that is a combination utility or $10,000,000
23        for a participating utility that serves more than 3
24        million retail customers, then the full amount shall
25        be amortized consistent with subparagraph (F) of this
26        paragraph (4);

 

 

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1            (D) investment return at a rate equal to the
2        utility's weighted average cost of long-term debt, on
3        the pension assets as, and in the amount, reported in
4        Account 186 (or in such other Account or Accounts as
5        such asset may subsequently be recorded) of the
6        utility's most recently filed FERC Form 1, net of
7        deferred tax benefits;
8            (E) recovery of the expenses related to the
9        Commission proceeding under this subsection (c) to
10        approve this performance-based formula rate and
11        initial rates or to subsequent proceedings related to
12        the formula, provided that the recovery shall be
13        amortized over a 3-year period; recovery of expenses
14        related to the annual Commission proceedings under
15        subsection (d) of this Section to review the inputs to
16        the performance-based formula rate shall be expensed
17        and recovered through the performance-based formula
18        rate;
19            (F) amortization over a 5-year period of the full
20        amount of each charge or credit that exceeds
21        $3,700,000 for a participating utility that is a
22        combination utility or $10,000,000 for a participating
23        utility that serves more than 3 million retail
24        customers in the applicable calendar year and that
25        relates to a workforce reduction program's severance
26        costs, changes in accounting rules, changes in law,

 

 

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1        compliance with any Commission-initiated audit, or a
2        single storm or other similar expense, provided that
3        any unamortized balance shall be reflected in the rate
4        base. For purposes of this subparagraph (F), changes
5        in law includes any enactment, repeal, or amendment in
6        a law, ordinance, rule, regulation, interpretation,
7        permit, license, consent, or order, including those
8        relating to taxes, accounting, or to environmental
9        matters, or in the interpretation or application
10        thereof by any governmental authority occurring after
11        October 26, 2011 (the effective date of Public Act
12        97-616);
13            (G) recovery of existing regulatory assets over
14        the periods previously authorized by the Commission;
15            (H) historical weather normalized billing
16        determinants; and
17            (I) allocation methods for common costs.
18        (5) Provide that if the participating utility's earned
19    rate of return on common equity related to the provision
20    of delivery services for the prior rate year (calculated
21    using costs and capital structure approved by the
22    Commission as provided in subparagraph (2) of this
23    subsection (c), consistent with this Section, in
24    accordance with Commission rules and orders, including,
25    but not limited to, adjustments for goodwill, and after
26    any Commission-ordered disallowances and taxes) is more

 

 

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1    than 50 basis points higher than the rate of return on
2    common equity calculated pursuant to paragraph (3) of this
3    subsection (c) (after adjusting for any penalties to the
4    rate of return on common equity applied pursuant to the
5    performance metrics provision of subsection (f) of this
6    Section), then the participating utility shall apply a
7    credit through the performance-based formula rate that
8    reflects an amount equal to the value of that portion of
9    the earned rate of return on common equity that is more
10    than 50 basis points higher than the rate of return on
11    common equity calculated pursuant to paragraph (3) of this
12    subsection (c) (after adjusting for any penalties to the
13    rate of return on common equity applied pursuant to the
14    performance metrics provision of subsection (f) of this
15    Section) for the prior rate year, adjusted for taxes. If
16    the participating utility's earned rate of return on
17    common equity related to the provision of delivery
18    services for the prior rate year (calculated using costs
19    and capital structure approved by the Commission as
20    provided in subparagraph (2) of this subsection (c),
21    consistent with this Section, in accordance with
22    Commission rules and orders, including, but not limited
23    to, adjustments for goodwill, and after any
24    Commission-ordered disallowances and taxes) is more than
25    50 basis points less than the return on common equity
26    calculated pursuant to paragraph (3) of this subsection

 

 

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1    (c) (after adjusting for any penalties to the rate of
2    return on common equity applied pursuant to the
3    performance metrics provision of subsection (f) of this
4    Section), then the participating utility shall apply a
5    charge through the performance-based formula rate that
6    reflects an amount equal to the value of that portion of
7    the earned rate of return on common equity that is more
8    than 50 basis points less than the rate of return on common
9    equity calculated pursuant to paragraph (3) of this
10    subsection (c) (after adjusting for any penalties to the
11    rate of return on common equity applied pursuant to the
12    performance metrics provision of subsection (f) of this
13    Section) for the prior rate year, adjusted for taxes.
14        (6) Provide for an annual reconciliation, as described
15    in subsection (d) of this Section, with interest, of the
16    revenue requirement reflected in rates for each calendar
17    year, beginning with the calendar year in which the
18    utility files its performance-based formula rate tariff
19    pursuant to subsection (c) of this Section, with what the
20    revenue requirement would have been had the actual cost
21    information for the applicable calendar year been
22    available at the filing date.
23    The utility shall file, together with its tariff, final
24data based on its most recently filed FERC Form 1, plus
25projected plant additions and correspondingly updated
26depreciation reserve and expense for the calendar year in

 

 

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1which the tariff and data are filed, that shall populate the
2performance-based formula rate and set the initial delivery
3services rates under the formula. For purposes of this
4Section, "FERC Form 1" means the Annual Report of Major
5Electric Utilities, Licensees and Others that electric
6utilities are required to file with the Federal Energy
7Regulatory Commission under the Federal Power Act, Sections 3,
84(a), 304 and 209, modified as necessary to be consistent with
983 Ill. Adm. Admin. Code Part 415 as of May 1, 2011. Nothing in
10this Section is intended to allow costs that are not otherwise
11recoverable to be recoverable by virtue of inclusion in FERC
12Form 1.
13    After the utility files its proposed performance-based
14formula rate structure and protocols and initial rates, the
15Commission shall initiate a docket to review the filing. The
16Commission shall enter an order approving, or approving as
17modified, the performance-based formula rate, including the
18initial rates, as just and reasonable within 270 days after
19the date on which the tariff was filed, or, if the tariff is
20filed within 14 days after October 26, 2011 (the effective
21date of Public Act 97-616), then by May 31, 2012. Such review
22shall be based on the same evidentiary standards, including,
23but not limited to, those concerning the prudence and
24reasonableness of the costs incurred by the utility, the
25Commission applies in a hearing to review a filing for a
26general increase in rates under Article IX of this Act. The

 

 

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1initial rates shall take effect within 30 days after the
2Commission's order approving the performance-based formula
3rate tariff.
4    Until such time as the Commission approves a different
5rate design and cost allocation pursuant to subsection (e) of
6this Section, rate design and cost allocation across customer
7classes shall be consistent with the Commission's most recent
8order regarding the participating utility's request for a
9general increase in its delivery services rates.
10    Subsequent changes to the performance-based formula rate
11structure or protocols shall be made as set forth in Section
129-201 of this Act, but nothing in this subsection (c) is
13intended to limit the Commission's authority under Article IX
14and other provisions of this Act to initiate an investigation
15of a participating utility's performance-based formula rate
16tariff, provided that any such changes shall be consistent
17with paragraphs (1) through (6) of this subsection (c). Any
18change ordered by the Commission shall be made at the same time
19new rates take effect following the Commission's next order
20pursuant to subsection (d) of this Section, provided that the
21new rates take effect no less than 30 days after the date on
22which the Commission issues an order adopting the change.
23    A participating utility that files a tariff pursuant to
24this subsection (c) must submit a one-time $200,000 filing fee
25at the time the Chief Clerk of the Commission accepts the
26filing, which shall be a recoverable expense.

 

 

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1    In the event the performance-based formula rate is
2terminated, the then current rates shall remain in effect
3until such time as new rates are set pursuant to Article IX of
4this Act, subject to retroactive rate adjustment, with
5interest, to reconcile rates charged with actual costs. At
6such time that the performance-based formula rate is
7terminated, the participating utility's voluntary commitments
8and obligations under subsection (b) of this Section shall
9immediately terminate, except for the utility's obligation to
10pay an amount already owed to the fund for training grants
11pursuant to a Commission order issued under subsection (b) of
12this Section.
13    (d) Subsequent to the Commission's issuance of an order
14approving the utility's performance-based formula rate
15structure and protocols, and initial rates under subsection
16(c) of this Section, the utility shall file, on or before May 1
17of each year, with the Chief Clerk of the Commission its
18updated cost inputs to the performance-based formula rate for
19the applicable rate year and the corresponding new charges.
20Each such filing shall conform to the following requirements
21and include the following information:
22        (1) The inputs to the performance-based formula rate
23    for the applicable rate year shall be based on final
24    historical data reflected in the utility's most recently
25    filed annual FERC Form 1 plus projected plant additions
26    and correspondingly updated depreciation reserve and

 

 

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1    expense for the calendar year in which the inputs are
2    filed. The filing shall also include a reconciliation of
3    the revenue requirement that was in effect for the prior
4    rate year (as set by the cost inputs for the prior rate
5    year) with the actual revenue requirement for the prior
6    rate year (determined using a year-end rate base) that
7    uses amounts reflected in the applicable FERC Form 1 that
8    reports the actual costs for the prior rate year. Any
9    over-collection or under-collection indicated by such
10    reconciliation shall be reflected as a credit against, or
11    recovered as an additional charge to, respectively, with
12    interest calculated at a rate equal to the utility's
13    weighted average cost of capital approved by the
14    Commission for the prior rate year, the charges for the
15    applicable rate year. Provided, however, that the first
16    such reconciliation shall be for the calendar year in
17    which the utility files its performance-based formula rate
18    tariff pursuant to subsection (c) of this Section and
19    shall reconcile (i) the revenue requirement or
20    requirements established by the rate order or orders in
21    effect from time to time during such calendar year
22    (weighted, as applicable) with (ii) the revenue
23    requirement determined using a year-end rate base for that
24    calendar year calculated pursuant to the performance-based
25    formula rate using (A) actual costs for that year as
26    reflected in the applicable FERC Form 1, and (B) for the

 

 

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1    first such reconciliation only, the cost of equity, which
2    shall be calculated as the sum of 590 basis points plus the
3    average for the applicable calendar year of the monthly
4    average yields of 30-year U.S. Treasury bonds published by
5    the Board of Governors of the Federal Reserve System in
6    its weekly H.15 Statistical Release or successor
7    publication. The first such reconciliation is not intended
8    to provide for the recovery of costs previously excluded
9    from rates based on a prior Commission order finding of
10    imprudence or unreasonableness. Each reconciliation shall
11    be certified by the participating utility in the same
12    manner that FERC Form 1 is certified. The filing shall
13    also include the charge or credit, if any, resulting from
14    the calculation required by paragraph (6) of subsection
15    (c) of this Section.
16        Notwithstanding anything that may be to the contrary,
17    the intent of the reconciliation is to ultimately
18    reconcile the revenue requirement reflected in rates for
19    each calendar year, beginning with the calendar year in
20    which the utility files its performance-based formula rate
21    tariff pursuant to subsection (c) of this Section, with
22    what the revenue requirement determined using a year-end
23    rate base for the applicable calendar year would have been
24    had the actual cost information for the applicable
25    calendar year been available at the filing date.
26        (2) The new charges shall take effect beginning on the

 

 

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1    first billing day of the following January billing period
2    and remain in effect through the last billing day of the
3    next December billing period regardless of whether the
4    Commission enters upon a hearing pursuant to this
5    subsection (d).
6        (3) The filing shall include relevant and necessary
7    data and documentation for the applicable rate year that
8    is consistent with the Commission's rules applicable to a
9    filing for a general increase in rates or any rules
10    adopted by the Commission to implement this Section.
11    Normalization adjustments shall not be required.
12    Notwithstanding any other provision of this Section or Act
13    or any rule or other requirement adopted by the
14    Commission, a participating utility that is a combination
15    utility with more than one rate zone shall not be required
16    to file a separate set of such data and documentation for
17    each rate zone and may combine such data and documentation
18    into a single set of schedules.
19    Within 45 days after the utility files its annual update
20of cost inputs to the performance-based formula rate, the
21Commission shall have the authority, either upon complaint or
22its own initiative, but with reasonable notice, to enter upon
23a hearing concerning the prudence and reasonableness of the
24costs incurred by the utility to be recovered during the
25applicable rate year that are reflected in the inputs to the
26performance-based formula rate derived from the utility's FERC

 

 

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1Form 1. During the course of the hearing, each objection shall
2be stated with particularity and evidence provided in support
3thereof, after which the utility shall have the opportunity to
4rebut the evidence. Discovery shall be allowed consistent with
5the Commission's Rules of Practice, which Rules shall be
6enforced by the Commission or the assigned administrative law
7judge. The Commission shall apply the same evidentiary
8standards, including, but not limited to, those concerning the
9prudence and reasonableness of the costs incurred by the
10utility, in the hearing as it would apply in a hearing to
11review a filing for a general increase in rates under Article
12IX of this Act. The Commission shall not, however, have the
13authority in a proceeding under this subsection (d) to
14consider or order any changes to the structure or protocols of
15the performance-based formula rate approved pursuant to
16subsection (c) of this Section. In a proceeding under this
17subsection (d), the Commission shall enter its order no later
18than the earlier of 240 days after the utility's filing of its
19annual update of cost inputs to the performance-based formula
20rate or December 31. The Commission's determinations of the
21prudence and reasonableness of the costs incurred for the
22applicable calendar year shall be final upon entry of the
23Commission's order and shall not be subject to reopening,
24reexamination, or collateral attack in any other Commission
25proceeding, case, docket, order, rule or regulation, provided,
26however, that nothing in this subsection (d) shall prohibit a

 

 

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1party from petitioning the Commission to rehear or appeal to
2the courts the order pursuant to the provisions of this Act.
3    In the event the Commission does not, either upon
4complaint or its own initiative, enter upon a hearing within
545 days after the utility files the annual update of cost
6inputs to its performance-based formula rate, then the costs
7incurred for the applicable calendar year shall be deemed
8prudent and reasonable, and the filed charges shall not be
9subject to reopening, reexamination, or collateral attack in
10any other proceeding, case, docket, order, rule, or
11regulation.
12    A participating utility's first filing of the updated cost
13inputs, and any Commission investigation of such inputs
14pursuant to this subsection (d) shall proceed notwithstanding
15the fact that the Commission's investigation under subsection
16(c) of this Section is still pending and notwithstanding any
17other law, order, rule, or Commission practice to the
18contrary.
19    (e) Nothing in subsections (c) or (d) of this Section
20shall prohibit the Commission from investigating, or a
21participating utility from filing, revenue-neutral tariff
22changes related to rate design of a performance-based formula
23rate that has been placed into effect for the utility.
24Following approval of a participating utility's
25performance-based formula rate tariff pursuant to subsection
26(c) of this Section, the utility shall make a filing with the

 

 

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1Commission within one year after the effective date of the
2performance-based formula rate tariff that proposes changes to
3the tariff to incorporate the findings of any final rate
4design orders of the Commission applicable to the
5participating utility and entered subsequent to the
6Commission's approval of the tariff. The Commission shall,
7after notice and hearing, enter its order approving, or
8approving with modification, the proposed changes to the
9performance-based formula rate tariff within 240 days after
10the utility's filing. Following such approval, the utility
11shall make a filing with the Commission during each subsequent
123-year period that either proposes revenue-neutral tariff
13changes or re-files the existing tariffs without change, which
14shall present the Commission with an opportunity to suspend
15the tariffs and consider revenue-neutral tariff changes
16related to rate design.
17    (f) Within 30 days after the filing of a tariff pursuant to
18subsection (c) of this Section, each participating utility
19shall develop and file with the Commission multi-year metrics
20designed to achieve, ratably (i.e., in equal segments) over a
2110-year period, improvement over baseline performance values
22as follows:
23        (1) Twenty percent improvement in the System Average
24    Interruption Frequency Index, using a baseline of the
25    average of the data from 2001 through 2010.
26        (2) Fifteen percent improvement in the system Customer

 

 

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1    Average Interruption Duration Index, using a baseline of
2    the average of the data from 2001 through 2010.
3        (3) For a participating utility other than a
4    combination utility, 20% improvement in the System Average
5    Interruption Frequency Index for its Southern Region,
6    using a baseline of the average of the data from 2001
7    through 2010. For purposes of this paragraph (3), Southern
8    Region shall have the meaning set forth in the
9    participating utility's most recent report filed pursuant
10    to Section 16-125 of this Act.
11        (3.5) For a participating utility other than a
12    combination utility, 20% improvement in the System Average
13    Interruption Frequency Index for its Northeastern Region,
14    using a baseline of the average of the data from 2001
15    through 2010. For purposes of this paragraph (3.5),
16    Northeastern Region shall have the meaning set forth in
17    the participating utility's most recent report filed
18    pursuant to Section 16-125 of this Act.
19        (4) Seventy-five percent improvement in the total
20    number of customers who exceed the service reliability
21    targets as set forth in subparagraphs (A) through (C) of
22    paragraph (4) of subsection (b) of 83 Ill. Adm. Admin.
23    Code Part 411.140 as of May 1, 2011, using 2010 as the
24    baseline year.
25        (5) Reduction in issuance of estimated electric bills:
26    90% improvement for a participating utility other than a

 

 

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1    combination utility, and 56% improvement for a
2    participating utility that is a combination utility, using
3    a baseline of the average number of estimated bills for
4    the years 2008 through 2010.
5        (6) Consumption on inactive meters: 90% improvement
6    for a participating utility other than a combination
7    utility, and 56% improvement for a participating utility
8    that is a combination utility, using a baseline of the
9    average unbilled kilowatthours for the years 2009 and
10    2010.
11        (7) Unaccounted for energy: 50% improvement for a
12    participating utility other than a combination utility
13    using a baseline of the non-technical line loss
14    unaccounted for energy kilowatthours for the year 2009.
15        (8) Uncollectible expense: reduce uncollectible
16    expense by at least $30,000,000 for a participating
17    utility other than a combination utility and by at least
18    $3,500,000 for a participating utility that is a
19    combination utility, using a baseline of the average
20    uncollectible expense for the years 2008 through 2010.
21        (9) Opportunities for minority-owned and female-owned
22    business enterprises: design a performance metric
23    regarding the creation of opportunities for minority-owned
24    and female-owned business enterprises consistent with
25    State and federal law using a base performance value of
26    the percentage of the participating utility's capital

 

 

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1    expenditures that were paid to minority-owned and
2    female-owned business enterprises in 2010.
3    The definitions set forth in 83 Ill. Adm. Admin. Code Part
4411.20 as of May 1, 2011 shall be used for purposes of
5calculating performance under paragraphs (1) through (3.5) of
6this subsection (f), provided, however, that the participating
7utility may exclude up to 9 extreme weather event days from
8such calculation for each year, and provided further that the
9participating utility shall exclude 9 extreme weather event
10days when calculating each year of the baseline period to the
11extent that there are 9 such days in a given year of the
12baseline period. For purposes of this Section, an extreme
13weather event day is a 24-hour calendar day (beginning at
1412:00 a.m. and ending at 11:59 p.m.) during which any weather
15event (e.g., storm, tornado) caused interruptions for 10,000
16or more of the participating utility's customers for 3 hours
17or more. If there are more than 9 extreme weather event days in
18a year, then the utility may choose no more than 9 extreme
19weather event days to exclude, provided that the same extreme
20weather event days are excluded from each of the calculations
21performed under paragraphs (1) through (3.5) of this
22subsection (f).
23    The metrics shall include incremental performance goals
24for each year of the 10-year period, which shall be designed to
25demonstrate that the utility is on track to achieve the
26performance goal in each category at the end of the 10-year

 

 

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1period. The utility shall elect when the 10-year period shall
2commence for the metrics set forth in subparagraphs (1)
3through (4) and (9) of this subsection (f), provided that it
4begins no later than 14 months following the date on which the
5utility begins investing pursuant to subsection (b) of this
6Section, and when the 10-year period shall commence for the
7metrics set forth in subparagraphs (5) through (8) of this
8subsection (f), provided that it begins no later than 14
9months following the date on which the Commission enters its
10order approving the utility's Advanced Metering Infrastructure
11Deployment Plan pursuant to subsection (c) of Section 16-108.6
12of this Act.
13    The metrics and performance goals set forth in
14subparagraphs (5) through (8) of this subsection (f) are based
15on the assumptions that the participating utility may fully
16implement the technology described in subsection (b) of this
17Section, including utilizing the full functionality of such
18technology and that there is no requirement for personal
19on-site notification. If the utility is unable to meet the
20metrics and performance goals set forth in subparagraphs (5)
21through (8) of this subsection (f) for such reasons, and the
22Commission so finds after notice and hearing, then the utility
23shall be excused from compliance, but only to the limited
24extent achievement of the affected metrics and performance
25goals was hindered by the less than full implementation.
26    (f-5) The financial penalties applicable to the metrics

 

 

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1described in subparagraphs (1) through (8) of subsection (f)
2of this Section, as applicable, shall be applied through an
3adjustment to the participating utility's return on equity of
4no more than a total of 30 basis points in each of the first 3
5years, of no more than a total of 34 basis points in each of
6the 3 years thereafter, and of no more than a total of 38 basis
7points in each of the 4 years thereafter, as follows:
8        (1) With respect to each of the incremental annual
9    performance goals established pursuant to paragraph (1) of
10    subsection (f) of this Section,
11            (A) for each year that a participating utility
12        other than a combination utility does not achieve the
13        annual goal, the participating utility's return on
14        equity shall be reduced as follows: during years 1
15        through 3, by 5 basis points; during years 4 through 6,
16        by 6 basis points; and during years 7 through 10, by 7
17        basis points; and
18            (B) for each year that a participating utility
19        that is a combination utility does not achieve the
20        annual goal, the participating utility's return on
21        equity shall be reduced as follows: during years 1
22        through 3, by 10 basis points; during years 4 through
23        6, by 12 basis points; and during years 7 through 10,
24        by 14 basis points.
25        (2) With respect to each of the incremental annual
26    performance goals established pursuant to paragraph (2) of

 

 

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1    subsection (f) of this Section, for each year that the
2    participating utility does not achieve each such goal, the
3    participating utility's return on equity shall be reduced
4    as follows: during years 1 through 3, by 5 basis points;
5    during years 4 through 6, by 6 basis points; and during
6    years 7 through 10, by 7 basis points.
7        (3) With respect to each of the incremental annual
8    performance goals established pursuant to paragraphs (3)
9    and (3.5) of subsection (f) of this Section, for each year
10    that a participating utility other than a combination
11    utility does not achieve both such goals, the
12    participating utility's return on equity shall be reduced
13    as follows: during years 1 through 3, by 5 basis points;
14    during years 4 through 6, by 6 basis points; and during
15    years 7 through 10, by 7 basis points.
16        (4) With respect to each of the incremental annual
17    performance goals established pursuant to paragraph (4) of
18    subsection (f) of this Section, for each year that the
19    participating utility does not achieve each such goal, the
20    participating utility's return on equity shall be reduced
21    as follows: during years 1 through 3, by 5 basis points;
22    during years 4 through 6, by 6 basis points; and during
23    years 7 through 10, by 7 basis points.
24        (5) With respect to each of the incremental annual
25    performance goals established pursuant to subparagraph (5)
26    of subsection (f) of this Section, for each year that the

 

 

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1    participating utility does not achieve at least 95% of
2    each such goal, the participating utility's return on
3    equity shall be reduced by 5 basis points for each such
4    unachieved goal.
5        (6) With respect to each of the incremental annual
6    performance goals established pursuant to paragraphs (6),
7    (7), and (8) of subsection (f) of this Section, as
8    applicable, which together measure non-operational
9    customer savings and benefits relating to the
10    implementation of the Advanced Metering Infrastructure
11    Deployment Plan, as defined in Section 16-108.6 of this
12    Act, the performance under each such goal shall be
13    calculated in terms of the percentage of the goal
14    achieved. The percentage of goal achieved for each of the
15    goals shall be aggregated, and an average percentage value
16    calculated, for each year of the 10-year period. If the
17    utility does not achieve an average percentage value in a
18    given year of at least 95%, the participating utility's
19    return on equity shall be reduced by 5 basis points.
20    The financial penalties shall be applied as described in
21this subsection (f-5) for the 12-month period in which the
22deficiency occurred through a separate tariff mechanism, which
23shall be filed by the utility together with its metrics. In the
24event the formula rate tariff established pursuant to
25subsection (c) of this Section terminates, the utility's
26obligations under subsection (f) of this Section and this

 

 

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1subsection (f-5) shall also terminate, provided, however, that
2the tariff mechanism established pursuant to subsection (f) of
3this Section and this subsection (f-5) shall remain in effect
4until any penalties due and owing at the time of such
5termination are applied.
6    The Commission shall, after notice and hearing, enter an
7order within 120 days after the metrics are filed approving,
8or approving with modification, a participating utility's
9tariff or mechanism to satisfy the metrics set forth in
10subsection (f) of this Section. On June 1 of each subsequent
11year, each participating utility shall file a report with the
12Commission that includes, among other things, a description of
13how the participating utility performed under each metric and
14an identification of any extraordinary events that adversely
15impacted the utility's performance. Whenever a participating
16utility does not satisfy the metrics required pursuant to
17subsection (f) of this Section, the Commission shall, after
18notice and hearing, enter an order approving financial
19penalties in accordance with this subsection (f-5). The
20Commission-approved financial penalties shall be applied
21beginning with the next rate year. Nothing in this Section
22shall authorize the Commission to reduce or otherwise obviate
23the imposition of financial penalties for failing to achieve
24one or more of the metrics established pursuant to
25subparagraphs subparagraph (1) through (4) of subsection (f)
26of this Section.

 

 

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1    (g) On or before July 31, 2014, each participating utility
2shall file a report with the Commission that sets forth the
3average annual increase in the average amount paid per
4kilowatthour for residential eligible retail customers,
5exclusive of the effects of energy efficiency programs,
6comparing the 12-month period ending May 31, 2012; the
712-month period ending May 31, 2013; and the 12-month period
8ending May 31, 2014. For a participating utility that is a
9combination utility with more than one rate zone, the weighted
10average aggregate increase shall be provided. The report shall
11be filed together with a statement from an independent auditor
12attesting to the accuracy of the report. The cost of the
13independent auditor shall be borne by the participating
14utility and shall not be a recoverable expense. "The average
15amount paid per kilowatthour" shall be based on the
16participating utility's tariffed rates actually in effect and
17shall not be calculated using any hypothetical rate or
18adjustments to actual charges (other than as specified for
19energy efficiency) as an input.
20    In the event that the average annual increase exceeds 2.5%
21as calculated pursuant to this subsection (g), then Sections
2216-108.5, 16-108.6, 16-108.7, and 16-108.8 of this Act, other
23than this subsection, shall be inoperative as they relate to
24the utility and its service area as of the date of the report
25due to be submitted pursuant to this subsection and the
26utility shall no longer be eligible to annually update the

 

 

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1performance-based formula rate tariff pursuant to subsection
2(d) of this Section. In such event, the then current rates
3shall remain in effect until such time as new rates are set
4pursuant to Article IX of this Act, subject to retroactive
5adjustment, with interest, to reconcile rates charged with
6actual costs, and the participating utility's voluntary
7commitments and obligations under subsection (b) of this
8Section shall immediately terminate, except for the utility's
9obligation to pay an amount already owed to the fund for
10training grants pursuant to a Commission order issued under
11subsection (b) of this Section.
12    In the event that the average annual increase is 2.5% or
13less as calculated pursuant to this subsection (g), then the
14performance-based formula rate shall remain in effect as set
15forth in this Section.
16    For purposes of this Section, the amount per kilowatthour
17means the total amount paid for electric service expressed on
18a per kilowatthour basis, and the total amount paid for
19electric service includes without limitation amounts paid for
20supply, transmission, distribution, surcharges, and add-on
21taxes exclusive of any increases in taxes or new taxes imposed
22after October 26, 2011 (the effective date of Public Act
2397-616). For purposes of this Section, "eligible retail
24customers" shall have the meaning set forth in Section
2516-111.5 of this Act.
26    The fact that this Section becomes inoperative as set

 

 

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1forth in this subsection shall not be construed to mean that
2the Commission may reexamine or otherwise reopen prudence or
3reasonableness determinations already made.
4    (h) By December 31, 2017, the Commission shall prepare and
5file with the General Assembly a report on the infrastructure
6program and the performance-based formula rate. The report
7shall include the change in the average amount per
8kilowatthour paid by residential customers between June 1,
92011 and May 31, 2017. If the change in the total average rate
10paid exceeds 2.5% compounded annually, the Commission shall
11include in the report an analysis that shows the portion of the
12change due to the delivery services component and the portion
13of the change due to the supply component of the rate. The
14report shall include separate sections for each participating
15utility.
16    Sections 16-108.5, 16-108.6, 16-108.7, and 16-108.8 of
17this Act, other than this subsection (h) and subsection (i) of
18this Section, are inoperative after December 31, 2022 for
19every participating utility, after which time a participating
20utility shall no longer be eligible to annually update the
21performance-based formula rate tariff pursuant to subsection
22(d) of this Section. At such time, the then current rates shall
23remain in effect until such time as new rates are set pursuant
24to Article IX of this Act, subject to retroactive adjustment,
25with interest, to reconcile rates charged with actual costs.
26    The fact that this Section becomes inoperative as set

 

 

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1forth in this subsection shall not be construed to mean that
2the Commission may reexamine or otherwise reopen prudence or
3reasonableness determinations already made.
4    (i) While a participating utility may use, develop, and
5maintain broadband systems and the delivery of broadband
6services, voice-over-internet-protocol services,
7telecommunications services, and cable and video programming
8services for use in providing delivery services and Smart Grid
9functionality or application to its retail customers,
10including, but not limited to, the installation,
11implementation and maintenance of Smart Grid electric system
12upgrades as defined in Section 16-108.6 of this Act, a
13participating utility is prohibited from providing to its
14retail customers broadband services,
15voice-over-internet-protocol services, telecommunications
16services, or cable or video programming services, unless they
17are part of a service directly related to delivery services or
18Smart Grid functionality or applications as defined in Section
1916-108.6 of this Act, and from recovering the costs of such
20offerings from retail customers. Furthermore, a participating
21utility in a county having a population of 3,000,000 or more is
22prohibited from making available to its customers broadband
23services, voice-over-internet-protocol services,
24telecommunications services, or cable or video programming
25services, unless they are part of a service directly related
26to delivery services or Smart Grid functionality or

 

 

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1applications as defined in Section 16-108.6, and from
2recovering the costs of such offerings from retail customers.
3The prohibition set forth in this subsection (i) is
4inoperative after December 31, 2027 for every participating
5utility.
6    (j) Nothing in this Section is intended to legislatively
7overturn the opinion issued in Commonwealth Edison Co. v. Ill.
8Commerce Comm'n, Nos. 2-08-0959, 2-08-1037, 2-08-1137,
91-08-3008, 1-08-3030, 1-08-3054, 1-08-3313 cons. (Ill. App.
10Ct. 2d Dist. Sept. 30, 2010). Public Act 97-616 shall not be
11construed as creating a contract between the General Assembly
12and the participating utility, and shall not establish a
13property right in the participating utility.
14    (k) The changes made in subsections (c) and (d) of this
15Section by Public Act 98-15 are intended to be a restatement
16and clarification of existing law, and intended to give
17binding effect to the provisions of House Resolution 1157
18adopted by the House of Representatives of the 97th General
19Assembly and Senate Resolution 821 adopted by the Senate of
20the 97th General Assembly that are reflected in paragraph (3)
21of this subsection. In addition, Public Act 98-15 preempts and
22supersedes any final Commission orders entered in Docket Nos.
2311-0721, 12-0001, 12-0293, and 12-0321 to the extent
24inconsistent with the amendatory language added to subsections
25(c) and (d).
26        (1) No earlier than 5 business days after May 22, 2013

 

 

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1    (the effective date of Public Act 98-15), each
2    participating utility shall file any tariff changes
3    necessary to implement the amendatory language set forth
4    in subsections (c) and (d) of this Section by Public Act
5    98-15 and a revised revenue requirement under the
6    participating utility's performance-based formula rate.
7    The Commission shall enter a final order approving such
8    tariff changes and revised revenue requirement within 21
9    days after the participating utility's filing.
10        (2) Notwithstanding anything that may be to the
11    contrary, a participating utility may file a tariff to
12    retroactively recover its previously unrecovered actual
13    costs of delivery service that are no longer subject to
14    recovery through a reconciliation adjustment under
15    subsection (d) of this Section. This retroactive recovery
16    shall include any derivative adjustments resulting from
17    the changes to subsections (c) and (d) of this Section by
18    Public Act 98-15. Such tariff shall allow the utility to
19    assess, on current customer bills over a period of 12
20    monthly billing periods, a charge or credit related to
21    those unrecovered costs with interest at the utility's
22    weighted average cost of capital during the period in
23    which those costs were unrecovered. A participating
24    utility may file a tariff that implements a retroactive
25    charge or credit as described in this paragraph for
26    amounts not otherwise included in the tariff filing

 

 

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1    provided for in paragraph (1) of this subsection (k). The
2    Commission shall enter a final order approving such tariff
3    within 21 days after the participating utility's filing.
4        (3) The tariff changes described in paragraphs (1) and
5    (2) of this subsection (k) shall relate only to, and be
6    consistent with, the following provisions of Public Act
7    98-15: paragraph (2) of subsection (c) regarding year-end
8    capital structure, subparagraph (D) of paragraph (4) of
9    subsection (c) regarding pension assets, and subsection
10    (d) regarding the reconciliation components related to
11    year-end rate base and interest calculated at a rate equal
12    to the utility's weighted average cost of capital.
13        (4) Nothing in this subsection is intended to effect a
14    dismissal of or otherwise affect an appeal from any final
15    Commission orders entered in Docket Nos. 11-0721, 12-0001,
16    12-0293, and 12-0321 other than to the extent of the
17    amendatory language contained in subsections (c) and (d)
18    of this Section of Public Act 98-15.
19    (l) Each participating utility shall be deemed to have
20been in full compliance with all requirements of subsection
21(b) of this Section, subsection (c) of this Section, Section
2216-108.6 of this Act, and all Commission orders entered
23pursuant to Sections 16-108.5 and 16-108.6 of this Act, up to
24and including May 22, 2013 (the effective date of Public Act
2598-15). The Commission shall not undertake any investigation
26of such compliance and no penalty shall be assessed or adverse

 

 

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1action taken against a participating utility for noncompliance
2with Commission orders associated with subsection (b) of this
3Section, subsection (c) of this Section, and Section 16-108.6
4of this Act prior to such date. Each participating utility
5other than a combination utility shall be permitted, without
6penalty, a period of 12 months after such effective date to
7take actions required to ensure its infrastructure investment
8program is in compliance with subsection (b) of this Section
9and with Section 16-108.6 of this Act. Provided further, the
10following subparagraphs shall apply to a participating utility
11other than a combination utility:
12        (A) if the Commission has initiated a proceeding
13    pursuant to subsection (e) of Section 16-108.6 of this Act
14    that is pending as of May 22, 2013 (the effective date of
15    Public Act 98-15), then the order entered in such
16    proceeding shall, after notice and hearing, accelerate the
17    commencement of the meter deployment schedule approved in
18    the final Commission order on rehearing entered in Docket
19    No. 12-0298;
20        (B) if the Commission has entered an order pursuant to
21    subsection (e) of Section 16-108.6 of this Act prior to
22    May 22, 2013 (the effective date of Public Act 98-15) that
23    does not accelerate the commencement of the meter
24    deployment schedule approved in the final Commission order
25    on rehearing entered in Docket No. 12-0298, then the
26    utility shall file with the Commission, within 45 days

 

 

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1    after such effective date, a plan for accelerating the
2    commencement of the utility's meter deployment schedule
3    approved in the final Commission order on rehearing
4    entered in Docket No. 12-0298; the Commission shall reopen
5    the proceeding in which it entered its order pursuant to
6    subsection (e) of Section 16-108.6 of this Act and shall,
7    after notice and hearing, enter an amendatory order that
8    approves or approves as modified such accelerated plan
9    within 90 days after the utility's filing; or
10        (C) if the Commission has not initiated a proceeding
11    pursuant to subsection (e) of Section 16-108.6 of this Act
12    prior to May 22, 2013 (the effective date of Public Act
13    98-15), then the utility shall file with the Commission,
14    within 45 days after such effective date, a plan for
15    accelerating the commencement of the utility's meter
16    deployment schedule approved in the final Commission order
17    on rehearing entered in Docket No. 12-0298 and the
18    Commission shall, after notice and hearing, approve or
19    approve as modified such plan within 90 days after the
20    utility's filing.
21    Any schedule for meter deployment approved by the
22Commission pursuant to this subsection (l) shall take into
23consideration procurement times for meters and other equipment
24and operational issues. Nothing in Public Act 98-15 shall
25shorten or extend the end dates for the 5-year or 10-year
26periods set forth in subsection (b) of this Section or Section

 

 

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116-108.6 of this Act. Nothing in this subsection is intended
2to address whether a participating utility has, or has not,
3satisfied any or all of the metrics and performance goals
4established pursuant to subsection (f) of this Section.
5    (m) The provisions of Public Act 98-15 are severable under
6Section 1.31 of the Statute on Statutes.
7(Source: P.A. 102-1031, eff. 5-27-22; revised 8-22-22.)
 
8    (220 ILCS 5/21-201)
9    (Section scheduled to be repealed on December 31, 2026)
10    Sec. 21-201. Definitions. As used in this Article:
11    (a) "Access" means that the cable or video provider is
12capable of providing cable services or video services at the
13household address using any technology, other than
14direct-to-home satellite service, that provides 2-way
15broadband Internet capability and video programming, content,
16and functionality, regardless of whether any customer has
17ordered service or whether the owner or landlord or other
18responsible person has granted access to the household. If
19more than one technology is used, the technologies shall
20provide similar 2-way broadband Internet accessibility and
21similar video programming.
22    (b) "Basic cable or video service" means any cable or
23video service offering or tier that includes the
24retransmission of local television broadcast signals.
25    (c) "Broadband service" means a high speed service

 

 

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1connection to the public Internet capable of supporting, in at
2least one direction, a speed in excess of 200 kilobits per
3second (kbps) to the network demarcation point at the
4subscriber's premises.
5    (d) "Cable operator" means that term as defined in item
6(5) of 47 U.S.C. 522.
7    (e) "Cable service" means that term as defined in item (6)
8of 47 U.S.C. 522. "Cable service" does not include any video
9programming accessed via an Internet access service that
10enables end users to access content, information, electronic
11mail, or other services offered over the Internet, including
12streaming video content, regardless of the provider of the
13Internet access service.
14    (f) "Cable system" means that term as defined in item (7)
15of 47 U.S.C. 522.
16    (g) "Commission" means the Illinois Commerce Commission.
17    (h) "Competitive cable service or video service provider"
18means a person or entity that is providing or seeks to provide
19cable service or video service in an area where there is at
20least one incumbent cable operator.
21    (i) "Designated market area" means a designated market
22area, as determined by Nielsen Media Research and published in
23the 1999-2000 Nielsen Station Index Directory and Nielsen
24Station Index United States Television Household Estimates or
25any successor publication. For any designated market area that
26crosses State lines, only households in the portion of the

 

 

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1designated market area that is located within the holder's
2telecommunications service area in the State where access to
3video service will be offered shall be considered.
4    (j) "Footprint" means the geographic area designated by
5the cable service or video service provider as the geographic
6area in which it will offer cable services or video services
7during the period of its State-issued authorization. Each
8footprint shall be identified in terms of either (i)
9exchanges, as that term is defined in Section 13-206 of this
10Act; (ii) a collection of United States Census Bureau Block
11numbers (13 digit); (iii) if the area is smaller than the areas
12identified in either (i) or (ii), by geographic information
13system digital boundaries meeting or exceeding national map
14accuracy standards; or (iv) local units of government.
15    (k) "Holder" means a person or entity that has received
16authorization to offer or provide cable or video service from
17the Commission pursuant to Section 21-401 of this Article.
18    (l) "Household" means a house, an apartment, a mobile
19home, a group of rooms, or a single room that is intended for
20occupancy as separate living quarters. Separate living
21quarters are those in which the occupants live and eat
22separately from any other persons in the building and that
23have direct access from the outside of the building or through
24a common hall. This definition is consistent with the United
25States Census Bureau, as that definition may be amended
26thereafter.

 

 

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1    (m) "Incumbent cable operator" means a person or entity
2that provided cable services or video services in a particular
3area under a franchise agreement with a local unit of
4government pursuant to Section 11-42-11 of the Illinois
5Municipal Code (65 ILCS 5/11-42-11) or Section 5-1095 of the
6Counties Code (55 ILCS 5/5-1095) on January 1, 2007.
7    (n) "Local franchising authority" means the local unit of
8government that has or requires a franchise with a cable
9operator, a provider of cable services, or a provider of video
10services to construct or operate a cable or video system or to
11offer cable services or video services under Section 11-42-11
12of the Illinois Municipal Code (65 ILCS 5/11-42-11) or Section
135-1095 of the Counties Code (55 ILCS 5/5-1095).
14    (o) "Local unit of government" means a city, village,
15incorporated town, or county.
16    (p) "Low-income household" means those residential
17households located within the holder's existing telephone
18service area where the average annual household income is less
19than $35,000, based on the United States Census Bureau
20estimates adjusted annually to reflect rates of change and
21distribution.
22    (q) "Public rights-of-way" means the areas on, below, or
23above a public roadway, highway, street, public sidewalk,
24alley, waterway, or utility easements dedicated for compatible
25uses.
26    (r) "Service" means the provision of cable service or

 

 

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1video service to subscribers and the interaction of
2subscribers with the person or entity that has received
3authorization to offer or provide cable or video service from
4the Commission pursuant to Section 21-401 of this Act.
5    (s) "Service provider fee" means the amount paid under
6Section 21-801 of this Act by the holder to a municipality, or
7in the case of an unincorporated service area to a county, for
8service areas within its territorial jurisdiction, but under
9no circumstances shall the service provider fee be paid to
10more than one local unit of government for the same portion of
11the holder's service area.
12    (t) "Telecommunications service area" means the area
13designated by the Commission as the area in which a
14telecommunications company was obligated to provide
15non-competitive local telephone service as of February 8, 1996
16as incorporated into Section 13-202.5 of this Act.
17    (u) "Video programming" means that term as defined in item
18(20) of 47 U.S.C. 522.
19    (v) "Video service" means video programming and subscriber
20interaction, if any, that is required for the selection or use
21of such video programming services, and that is provided
22through wireline facilities located at least in part in the
23public rights-of-way without regard to delivery technology,
24including Internet protocol technology. This definition does
25not include any video programming provided by a commercial
26mobile service provider defined in subsection (d) of 47 U.S.C.

 

 

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1332 or any video programming provided solely as part of, and
2via, service that enables users to access content,
3information, electronic mail, or other services offered over
4the public Internet.
5(Source: P.A. 100-20, eff. 7-1-17.)
 
6    Section 10. The Broadband Advisory Council Act is amended
7by changing Section 20 and by adding Section 30 as follows:
 
8    (220 ILCS 80/20)
9    Sec. 20. Powers and duties of the Council generally.
10    (a) The Council shall:
11        (1) explore any and all ways to expand the
12    availability to end-user customers of broadband services
13    using available technologies, including, but not limited
14    to, wireline, wireless, fixed wireless, and satellite
15    applications;
16        (2) identify barriers to broadband adoption among the
17    residents and small businesses of Illinois;
18        (3) research ways to eliminate barriers to adoption
19    through measures such as: digital literacy programs;
20    programs to assist older citizens in using broadband
21    Internet access; programs to facilitate adoption by
22    disabled citizens; and programs to encourage collaborative
23    efforts among public universities, community colleges,
24    libraries, public housing, and other institutions;

 

 

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1        (4) assess the availability of broadband for
2    low-income households compared to the availability of
3    broadband for other households;
4        (5) explore the potential for increased use of
5    broadband service for the purposes of education, career
6    readiness, workforce preparation, and alternative career
7    training;
8        (6) explore the potential for increased use of
9    broadband services to facilitate aging in place;
10        (7) explore ways for encouraging State and municipal
11    agencies, including public housing authorities, to expand
12    the use of broadband services for the purpose of better
13    serving the public, including audio and video streaming,
14    voice-over Internet protocol, teleconferencing, and
15    wireless networking;
16        (8) cooperate and assist in the expansion of
17    electronic instruction and distance education services;
18    and
19        (9) as the Federal Communications Commission updates
20    the benchmark downstream data rates and upstream data
21    rates, publish the revised data rates in the Illinois
22    Register within 60 days after the federal update; and .
23        (10) evaluate the expansion of the Illinois Century
24    Network to Illinois public schools, public libraries, and
25    State-owned correctional institutions or facilities,
26    including issuing recommendations for increasing agency

 

 

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1    staffing, infrastructure development, price modeling, and
2    providing download speeds of at least one gigabyte per
3    second and upload speeds of at least one gigabyte per
4    second.
5    (b) In addition to the powers set forth elsewhere in this
6Act, the Council is hereby granted the powers necessary to
7carry out the purpose and intent of this Act, as enumerated in
8this Section, including, but not limited to:
9        (1) promoting awareness of public facilities that have
10    community broadband access that can be used for distance
11    education and workforce development; and
12        (2) advising on deployment of e-government portals
13    such that all public bodies and political subdivisions
14    have websites and encourage one-stop government access and
15    that all public entities stream audio and video of all
16    public meetings.
17    (c) The Council shall also:
18        (1) monitor the broadband-based development efforts of
19    other states in areas such as business, education, aging
20    in place, and health;
21        (2)receive input provided on a voluntary basis from
22    all Illinois broadband stakeholders and advise the
23    Governor and the General Assembly on policies related to
24    broadband in Illinois, provided that no stakeholders shall
25    be required to publicly disclose competitively sensitive
26    information or information that could compromise network

 

 

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1    security or undermine the efficacy of reasonable network
2    management practices, and that any such information
3    voluntarily disclosed shall be protected from public
4    disclosure; and
5        (3) serve as the broadband advocate to State agencies
6    and other State entities to communicate the broadband
7    needs of citizens and organizations that do not have
8    access to broadband service or to broadband service
9    adequate for their needs.
10    (d) The Council shall exercise its powers and authority to
11(1) advise and make recommendations to the General Assembly
12and the Governor on bringing broadband service to unserved and
13underserved rural and urban areas and improving broadband
14service statewide, (2) advise and make recommendations to the
15General Assembly and the Governor on facilitating broadband
16adoption by all citizens, and (3) propose statutory changes
17that may enhance and expand broadband in the State.
18    (e) The Council shall report to the General Assembly on or
19before January 1 of each year. The report to the General
20Assembly shall be filed with the Clerk of the House of
21Representatives and the Secretary of the Senate in electronic
22form only, in the manner that the Clerk and the Secretary shall
23direct. The report shall include the action that was taken by
24the Council during the previous year in carrying out the
25provisions of this Act. The Council shall also make any other
26reports as may be required by the General Assembly or the

 

 

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1Governor.
2(Source: P.A. 100-833, eff. 1-1-19.)
 
3    (220 ILCS 80/30 new)
4    Sec. 30. Illinois Century Network Study.
5    (a) The Council shall study the feasibility of connecting
6all Illinois public schools, public libraries, and State-owned
7correctional facilities to the Illinois Century Network by
8January 1, 2030. The purpose and scope of the study is limited
9to connecting all public schools, public libraries, and
10State-owned correctional facilities to the Illinois Century
11Network, with a goal to give all public schools, public
12libraries, and State-owned correctional institutions or
13facilities access to reliable, gigabit-level broadband service
14by January 1, 2030. The Office of Broadband within the
15Department of Commerce and Economic Opportunity shall support
16and assist the Council in the development of the study.
17    (b) The feasibility study required under subsection (a)
18shall explore:
19        (1) efforts among other states and units of local
20    government to connect public schools, public libraries,
21    and correctional facilities to a public broadband service;
22        (2) the current state of broadband service connection
23    for all public schools, public libraries, and State-owned
24    correctional facilities, including connection speeds, type
25    of technology, and whether the network is serviced by the

 

 

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1    Illinois Century Network currently;
2        (3) models for expanding the Illinois Century Network
3    solely for the purpose of connecting all Illinois public
4    schools, public libraries, and State-owned correctional
5    facilities;
6        (4) the resources necessary to expand the Illinois
7    Century Network across the State of Illinois to all
8    Illinois public schools, public libraries, and State-owned
9    correctional facilities;
10        (5) the benefits of the Illinois Century Network in
11    Illinois public schools, public libraries, and State-owned
12    correctional facilities;
13        (6) potential sources of funding for the expansion of
14    the Illinois Century Network to Illinois public schools,
15    public libraries, and State-owned correctional facilities;
16        (7) additional staff and contracting needs that would
17    be necessary to expand the Illinois Century Network to all
18    Illinois public schools, public libraries, and State-owned
19    correctional facilities;
20        (8) options for partnering with units of local
21    government in Illinois that have taken steps toward
22    offering public broadband service for the purpose of
23    connecting all Illinois public schools, public libraries,
24    and State-owned correctional facilities to the Illinois
25    Century Network; and
26        (9) any other factors that are necessary for the

 

 

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1    exploration of the feasibility of expanding the Illinois
2    Century Network to all Illinois public schools, public
3    libraries, and State-owned correctional facilities.
4    The feasibility study shall offer recommendations based on
5the results of the study and shall offer options for the
6expansion of the Illinois Century Network, including a
7timeline, staffing needs, financial resources needed, and
8suggested rates for broadband service.
9    (c) The Council shall issue a report on its findings,
10recommendations, options for expansion, and any recommended
11legislation to the General Assembly by January 1, 2024.
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.".