Rep. Karen May

Filed: 5/13/2011

 

 


 

 


 
09700HB0014ham003LRB097 05207 ASK 55629 a

1
AMENDMENT TO HOUSE BILL 14

2    AMENDMENT NO. ______. Amend House Bill 14, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Public Utilities Act is amended by changing
6Section 9-201 and by adding Sections 9-220.3 and 9-228 as
7follows:
 
8    (220 ILCS 5/9-201)  (from Ch. 111 2/3, par. 9-201)
9    Sec. 9-201. (a) Unless the Commission otherwise orders, and
10except as otherwise provided in this Section, no change shall
11be made by any public utility in any rate or other charge or
12classification, or in any rule, regulation, practice or
13contract relating to or affecting any rate or other charge,
14classification or service, or in any privilege or facility,
15except after 45 days' notice to the Commission and to the
16public as herein provided. Such notice shall be given by filing

 

 

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1with the Commission and keeping open for public inspection new
2schedules or supplements stating plainly the change or changes
3to be made in the schedule or schedules then in force, and the
4time when the change or changes will go into effect, and by
5publication in a newspaper of general circulation or such other
6notice to persons affected by such change as may be prescribed
7by rule of the Commission. The Commission, for good cause
8shown, may allow changes without requiring the 45 days' notice
9herein provided for, by an order specifying the changes so to
10be made and the time when they shall take effect and the manner
11in which they shall be filed and published.
12    When any change is proposed in any rate or other charge, or
13classification, or in any rule, regulation, practice, or
14contract relating to or affecting any rate or other charge,
15classification or service, or in any privilege or facility,
16such proposed change shall be plainly indicated on the new
17schedule filed with the Commission, by some character to be
18designated by the Commission, immediately preceding or
19following the item.
20    When any public utility providing water or sewer service
21proposes any change in any rate or other charge, or
22classification, or in any rule, regulation, practice, or
23contract relating to or affecting any rate or other charge,
24classification or service, or in any privilege or facility,
25such utility shall, in addition to the other notice
26requirements of this Act, provide notice of such change to all

 

 

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1customers potentially affected by including a notice and
2description of such change, and of Commission procedures for
3intervention, in the first bill sent to each such customer
4after the filing of the proposed change.
5    (b) Whenever there shall be filed with the Commission any
6schedule stating an individual or joint rate or other charge,
7classification, contract, practice, rule or regulation, the
8Commission shall have power, and it is hereby given authority,
9either upon complaint or upon its own initiative without
10complaint, at once, and if it so orders, without answer or
11other formal pleadings by the interested public utility or
12utilities, but upon reasonable notice, to enter upon a hearing
13concerning the propriety of such rate or other charge,
14classification, contract, practice, rule or regulation, and
15pending the hearing and decision thereon, such rate or other
16charge, classification, contract, practice, rule or regulation
17shall not go into effect. The period of suspension of such rate
18or other charge, classification, contract, practice, rule or
19regulation shall not extend more than 105 days beyond the time
20when such rate or other charge, classification, contract,
21practice, rule or regulation would otherwise go into effect
22unless the Commission, in its discretion, extends the period of
23suspension for a further period of not exceeding 6 months. The
24Commission may further extend this suspension period for a
25period equivalent to the length of any delay that the
26Commission finds to have been caused by the applicant's failure

 

 

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1to provide data or information requested by the Commission or
2that the Commission ordered the applicant to provide to the
3parties.
4    All rates or other charges, classifications, contracts,
5practices, rules or regulations not so suspended shall, on the
6expiration of 45 days from the time of filing the same with the
7Commission, or of such lesser time as the Commission may grant,
8go into effect and be the established and effective rates or
9other charges, classifications, contracts, practices, rules
10and regulations, subject to the power of the Commission, after
11a hearing had on its own motion or upon complaint, as herein
12provided, to alter or modify the same.
13    Within 30 days after such changes have been authorized by
14the Commission, copies of the new or revised schedules shall be
15posted or filed in accordance with the terms of Section 9-103
16of this Act, in such a manner that all changes shall be plainly
17indicated. The Commission shall incorporate into the period of
18suspension a review period of 4 business days during which the
19Commission may review and determine whether the new or revised
20schedules comply with the Commission's decision approving a
21change to the public utility's rates. Such review period shall
22not extend the suspension period by more than 2 days. Absent
23notification to the contrary within the 4 business day period,
24the new or revised schedules shall be deemed approved.
25    (c) If the Commission enters upon a hearing concerning the
26propriety of any proposed rate or other charge, classification,

 

 

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1contract, practice, rule or regulation, the Commission shall
2establish the rates or other charges, classifications,
3contracts, practices, rules or regulations proposed, in whole
4or in part, or others in lieu thereof, which it shall find to
5be just and reasonable. In such hearing, the burden of proof to
6establish the justness and reasonableness of the proposed rates
7or other charges, classifications, contracts, practices, rules
8or regulations, in whole and in part, shall be upon the
9utility. The utility, the staff of the Commission, the Attorney
10General, or any party to a proceeding initiated under this
11Section who has been granted intervenor status and submitted a
12post-hearing brief must be given the opportunity to present
13oral argument, if requested no later than the date for filing
14exceptions, on the propriety of any proposed rate or other
15charge, classification, contract, practice, rule, or
16regulation. No rate or other charge, classification, contract,
17practice, rule or regulation shall be found just and reasonable
18unless it is consistent with Sections of this Article.
19    (d) Except where compliance with Section 8-401 of this Act
20is of urgent and immediate concern, no representative of a
21public utility may discuss with a commissioner, commissioner's
22assistant, or hearing examiner in a non-public setting a
23planned filing for a general rate increase. If a public utility
24makes a filing under this Section, then no substantive
25communication by any such person with a commissioner,
26commissioner's assistant or hearing examiner concerning the

 

 

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1filing is permitted until a notice of hearing has been issued.
2After the notice of hearing has been issued, the only
3communications by any such person with a commissioner,
4commissioner's assistant, or hearing examiner concerning the
5filing permitted are communications permitted under Section
610-103 of this Act. If any such communication does occur, then
7within 5 days of the docket being initiated all details
8relating to the communication shall be placed on the public
9record of the proceeding. The record shall include any
10materials, whether written, recorded, filmed, or graphic in
11nature, produced or reproduced on any media, used in connection
12with the communication. The record shall reflect the names of
13all persons who transmitted, received, or were otherwise
14involved in the communication, the duration of the
15communication, and whether the communication occurred in
16person or by other means. In the case of an oral communication,
17the record shall also reflect the location or locations of all
18persons involved in the communication and, if the communication
19occurred by telephone, the telephone numbers for the callers
20and recipients of the communication. A commissioner,
21commissioner's assistant, or hearing examiner who is involved
22in any such communication shall be recused from the affected
23proceeding. The Commission, or any commissioner or hearing
24examiner presiding over the proceeding shall, in the event of a
25violation of this Section, take action necessary to ensure that
26such violation does not prejudice any party or adversely affect

 

 

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1the fairness of the proceedings including dismissing the
2affected proceeding. Nothing in this subsection (d) is intended
3to preclude otherwise allowable updates on issues that may be
4indirectly related to a general rate case filing because cost
5recovery for the underlying activity may be requested. Such
6updates may include, without limitation, issues related to
7outages and restoration, credit ratings, security issuances,
8reliability, Federal Energy Regulatory Commission matters,
9Federal Communications Commission matters, regional
10reliability organizations, consumer education, or labor
11matters, provided that such updates may not include cost
12recovery in a planned rate case.
13(Source: P.A. 96-33, eff. 7-10-09.)
 
14    (220 ILCS 5/9-220.3 new)
15    Sec. 9-220.3. Electric utility infrastructure enhancement
16cost recovery mechanism.
17    (a) If the Commission finds that substantial investments
18are needed to refurbish, rebuild, modernize, expand, or create
19systems to maintain or improve upon a utility's ability to
20provide safe, reliable, high-quality, and affordable electric
21service to the State's current and future utility customers,
22then the Commission may encourage such investments by
23authorizing utilities to recover such investments, including a
24reasonable return on such investments, if they are reasonably
25and prudently incurred, through special cost-tracking

 

 

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1mechanisms, as further defined in this Section. For purposes of
2this Section, systems to maintain or improve upon a utility's
3ability to provide safe, reliable, high-quality, and
4affordable electric service to the State's current and future
5utility customers may include, but need not be limited to,
6innovative technologies and infrastructure expected to enhance
7customers' control over their energy consumption, better
8identify and control outages, and lead to more widespread or
9efficient use of distributed generation, renewable energy,
10energy efficiency, demand response, and other energy
11resources.
12    (b) To be eligible to recover investments pursuant to the
13special cost-tracking mechanism, a utility must submit to the
14Commission a petition, which must include the following:
15        (1) A description of the utility's plans to refurbish,
16    rebuild, modernize, expand, or create systems to maintain
17    or improve upon the utility's ability to provide safe,
18    reliable, high-quality, and affordable electric service to
19    the State's current and future utility customers. This plan
20    description must include estimated investments for each
21    element of the plan, the changes that would be made to
22    existing systems, and the new systems that would be
23    created, an explanation of how such changes and additions
24    would be used and useful for maintaining or improving upon
25    a utility's ability to provide safe, reliable,
26    high-quality, and affordable electric service to the

 

 

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1    State's current and future utility customers, and a present
2    value of future revenue requirements study that shows a
3    cost comparison between each element of the plan and all
4    reasonable alternatives.
5        (2) A description and quantification, to the extent
6    possible, of the risks involved both in carrying out the
7    plan and in not carrying out the plan.
8        (3) The proposed formula or formulas that would be
9    utilized to compute the rates through which investments
10    would be recovered, which shall include a true-up provision
11    from the prior period's under or over collection of costs.
12        (4) The proposed accounting system and protocols that
13    would be utilized to distinguish between expenses and
14    investments recovered through existing rate mechanisms and
15    expenses and investments that would be recovered through
16    the proposed special cost-tracking mechanism.
17        (5) A report on the expected impact of the utility's
18    plans on economic development, State and local tax
19    revenues, and net job creation within Illinois.
20        (6) The proposed reports through which the utility
21    would keep the Commission informed of progress toward
22    refurbishing, rebuilding, modernizing, expanding, or
23    creating systems, as identified in the plans described in
24    relation to paragraph (1), as well as all material changes
25    to those plans.
26        (7) Schedules, showing key dates for implementation of

 

 

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1    the plan, establishment of the special cost-tracking
2    mechanism, submittal of proposed reports, and the updating
3    of formulas.
4        (8) Any other information that the utility believes
5    necessary to establish the appropriateness of its plans and
6    its proposed special cost-tracking mechanism.
7        (9) Verified statements of qualified experts,
8    attesting to the veracity of the information contained in
9    the petition, and to the likelihood of implementing the
10    plan and the proposed special cost-tracking mechanism
11    within the time frame specified in the proposed schedules.
12    (c) The Commission shall issue an order with respect to a
13special cost-tracking mechanism pursuant to this Section no
14more than 330 days following receipt of a petition filed
15pursuant to subsection (b) of this Section. The Commission
16shall enter an order approving a utility's proposed special
17cost-tracking mechanism, with or without modifications, as
18well as an implementation schedule, if it finds that:
19        (1) The utility's plans to refurbish, rebuild,
20    modernize, expand, or create systems are feasible,
21    necessary to maintain or improve upon the utility's ability
22    to provide safe, reliable, high-quality, and affordable
23    electric service to the State's current and future utility
24    customers, and are the least-cost means of achieving those
25    results.
26        (2) The benefits of the utility's plan, in terms of its

 

 

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1    ability to maintain or improve upon a utility's ability to
2    provide safe, reliable, high-quality, and affordable
3    electric service to the State's current and future utility
4    customers are likely to exceed the plan's costs or the
5    risks involved in not carrying out the plan exceed those of
6    carrying out the plan.
7        (3) The special cost-tracking mechanism adopted in the
8    order, including any formulas, accounting systems, or
9    rates of return, or reconciliation procedures embedded
10    within the mechanism:
11            (A) includes only capitalized infrastructure
12        investments;
13            (B) includes a rate of return on common equity that
14        evaluates the relative risk of cost recovery through
15        the cost-tracking mechanism in comparison to the risk
16        of recovery through base rates;
17            (C) includes provisions for an annual
18        reconciliation of amounts collected from a surcharge
19        pursuant to this special cost-tracking mechanism with
20        the actual, prudently incurred, and just and
21        reasonable costs recoverable for each annual period
22        during which the surcharge was in effect;
23            (D) includes an offset for savings that are
24        realized as a result of the infrastructure investment
25        program for the relevant period;
26            (E) includes provisions for an annual internal

 

 

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1        audit that includes, but is not limited to, a
2        determination of whether the costs recovered through
3        this special cost-tracking mechanism are recovered
4        through other approved tariffs, whether the surcharge
5        is properly billed to customers in the correct time
6        periods, whether the applicable costs and revenues are
7        properly identified and recorded;
8            (F) is expected to provide an adequate incentive
9        for the utility to carry out its plans to refurbish,
10        rebuild, modernize, expand, or create systems
11        necessary to maintain or improve upon the utility's
12        ability to provide safe, reliable, high-quality, and
13        affordable electric service to the State's current and
14        future utility customers;
15            (G) is to be applied to all delivery service
16        customers of the utility; and
17            (H) is otherwise just and reasonable, and in the
18        interests of both the utility and the utility's
19        customers.
20        (4) It is likely that the plan and the special
21    cost-tracking mechanism adopted in the order can be
22    implemented in a manner consistent with the implementation
23    schedule adopted by the order.
24        (5) The surcharge that results from the implementation
25    of a special cost-tracking mechanism established pursuant
26    to this Section shall appear as a separate line item on the

 

 

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1    customer bill.
2    The Commission's order approving a special cost-tracking
3mechanism and its implementation schedule, may further include
4requirements for periodic reporting related to the utility's
5plans or the special cost-tracking mechanism adopted in the
6order.
7    If the Commission is unable to make all of the findings
8specified in paragraphs (1) through (5) of this subsection (c),
9then the Commission shall enter an order denying the utility's
10request to establish a special cost-tracking mechanism
11pursuant to this Section, and such order shall be considered to
12be a final order of the Commission subject to petitions for
13rehearing and appellate procedures.
14    (d) Following the date of an order approving a special
15cost-tracking mechanism for a utility, a utility shall have 14
16days to notify the Commission in writing whether it will accept
17any modifications so identified in the order or whether it has
18elected not to proceed with the special cost-tracking
19mechanism. If the utility notifies the Commission that it will
20accept such modifications, then the Commission shall issue an
21amended order, without further hearing, within 14 days
22following such notification, approving the program as
23modified, and such order shall be considered to be a final
24order of the Commission subject to petitions for rehearing and
25appellate procedures.
26    (e) Upon 45 days' notice, a utility that is employing a

 

 

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1special cost-tracking mechanism pursuant to this Section may
2cancel or suspend the mechanism, without the approval of the
3Commission.
4    (f) If a utility is recovering costs through a special
5cost-tracking mechanism, approved pursuant to this Section,
6after a period of 3 years after the effective date of the
7mechanism, then the Commission may, on its own motion (1)
8initiate a proceeding to consider whether the utility is
9achieving the goals of its original plan, or any subsequently
10modified plans, to refurbish, rebuild, modernize, expand, or
11create systems to maintain or improve upon the utility's
12ability to provide safe, reliable, high-quality, and
13affordable electric service to the State's current and future
14utility customers or (2) initiate a proceeding to consider
15whether subsequently modified plans continue to be in the best
16interest of the State's current and future utility customers.
17If the Commission enters an order, following a hearing process,
18finding that the utility's plans are no longer effective in
19achieving their goals, or are no longer in the best interest of
20the State's current and future utility customers, then the
21Commission may direct the utility to take one of the following
22actions, at the choice of the utility:
23        (1) The utility may prepare and file with the
24    Commission, within a period of 12 months after the date of
25    the Commission's order, a general rate case pursuant to
26    Section 9-201. When the rates pursuant to that filing go

 

 

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1    into effect, the utility's special cost-tracking mechanism
2    pursuant to this Section shall be cancelled.
3        (2) The utility may request Commission approval to
4    cancel its special cost-tracking mechanism, within a
5    period of not more than 45 days from the date of the
6    Commission's order.
7    (g) There shall be a rebuttable presumption that any actual
8expenditures and investments identified within special
9cost-tracking mechanisms approved pursuant to this Section
10were prudently incurred by the utility. However, if the
11Commission enters an order, following a hearing process,
12pursuant to subsection (f) of this Section, finding that the
13utility's plans are no longer effective in achieving their
14goals, or are no longer in the best interest of the State's
15current and future utility customers, and the utility's special
16cost-tracking mechanism is subsequently cancelled or
17suspended, then the rebuttable presumption otherwise afforded
18by this subsection (g) shall not apply to costs that have not
19already been found prudent by the Commission in an annual
20reconciliation proceeding pursuant to subparagraph (D) of
21paragraph (3) of subsection (c) of this Section.
22    (h) The Commission may adopt rules to implement the
23provisions of this Section.
 
24    (220 ILCS 5/9-228 new)
25    Sec. 9-228. Recovery of various costs through rates. In

 

 

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1any rate requested by any gas, electric, water, or sewer
2utility company under the provisions of this Act, the following
3costs shall be considered recoverable through rates if the
4Commission determines that the costs are prudent, just,
5reasonable, and consistent with Commission practice and law:
6        (1) incentive compensation expense that is based on the
7    achievement of operational metrics, including metrics
8    related to outage duration and frequency, safety, customer
9    service, efficiency and productivity, and environmental
10    compliance, but not metrics based on net income or an
11    affiliate's earnings per share;
12        (2) pension and other post-employment benefits expense
13    based on actual costs incurred for the applicable calendar
14    year, provided that such costs are supported by an
15    actuarial study;
16        (3) an investment return on the unamortized
17    discretionary pension contributions net of deferred tax
18    benefits equal to the utility's long-term debt cost
19    component of the applicable Commission-approved cost of
20    capital; however, in no case shall the cost associated with
21    the allowed investment return be greater than the benefit
22    ratepayers receive from the discretionary pension
23    contribution;
24        (4) severance costs amortized over a period that is
25    consistent with savings resulting from the severance;
26        (5) regulatory assets previously approved by the

 

 

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1    Commission;
2        (6) costs related to a Commission proceeding to approve
3    a mechanism under Section 9-244 or 9-220.3 of this Act,
4    amortized over a 3-year period; and
5        (7) costs related to annual reconciliation Commission
6    proceedings of mechanisms approved under Section 9-244 and
7    9-220.3 of this Act.
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.".