Sen. John J. Cullerton

Filed: 2/13/2013

 

 


 

 


 
09800SB0009sam001LRB098 04269 JLS 40869 a

1
AMENDMENT TO SENATE BILL 9

2    AMENDMENT NO. ______. Amend Senate Bill 9 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Intent; orders preempted and superseded. The
5changes made in subsections (c) and (d) of Section 16-108.5 of
6the Public Utilities Act by this Act are intended to be a
7restatement and clarification of existing law, and intended to
8give binding effect to the legislative intent expressed in
9House Resolution 1157 adopted by the House of Representatives
10of the 97th General Assembly and Senate Resolution 821 adopted
11by the Senate of the 97th General Assembly.
12    This Act preempts and supersedes any final Commission
13orders entered in Docket Nos. 11-0721, 12-0001, 12-0293, and
1412-0321 to the extent inconsistent with the amendatory language
15in subsections (c) and (d) of Section 16-108.5 of the Public
16Utilities Act.
 

 

 

09800SB0009sam001- 2 -LRB098 04269 JLS 40869 a

1    Section 5. The Public Utilities Act is amended by changing
2Sections 4-301 and 16-108.5 as follows:
 
3    (220 ILCS 5/4-301)  (from Ch. 111 2/3, par. 4-301)
4    Sec. 4-301. The Commission may confer in person, or by
5correspondence, by attending conventions, or in any other way,
6with Commissions and any and all agencies dealing with public
7utilities of other states and of the United States on any
8matters relating to public utilities.
9    The Commission shall have full power and authority to make
10joint investigations, hold joint hearings within or without the
11State, and issue joint or concurrent orders in conjunction with
12any official, board, commission or agency of any state or of
13the United States. In the holding of such investigations or
14hearings, or in the making of such orders, the Commission shall
15function under agreements or compacts between states or under
16the concurrent power of states to regulate the interstate
17commerce, or as an agency of the United States, or otherwise.
18    The Commission shall make whenever requested by the
19Governor, the General Assembly, or either branch of the General
20Assembly a report within 90 days or any other time period
21specified within of such request, which shall contain copies of
22all orders issued by the Commission which it deems of special
23importance or general significance, and any information in the
24possession of the Commission which it shall deem of value to
25the people of the State.

 

 

09800SB0009sam001- 3 -LRB098 04269 JLS 40869 a

1    The Commission shall conduct a hearing and take testimony
2relative to any pending legislation with respect to any person,
3corporation or matter within its jurisdiction, if requested to
4do so by the Governor, the General Assembly, or by either
5branch of the General Assembly thereof, and shall report its
6conclusions to the Governor or the General Assembly, as the
7case may be. The Commission may also recommend the enactment of
8such legislation with respect to any matter within its
9jurisdiction as it deems wise or necessary in the public
10interest. The Commission shall, at such times as the Governor,
11the General Assembly, or either branch of the General Assembly
12shall direct, examine any particular subject connected with the
13condition and management of public utilities, and report to the
14Governor or the General Assembly, as the case may be, him in
15writing its opinion thereon with its reasons therefor.
16(Source: P.A. 84-617.)
 
17    (220 ILCS 5/16-108.5)
18    Sec. 16-108.5. Infrastructure investment and
19modernization; regulatory reform.
20    (a) (Blank).
21    (b) For purposes of this Section, "participating utility"
22means an electric utility or a combination utility serving more
23than 1,000,000 customers in Illinois that voluntarily elects
24and commits to undertake (i) the infrastructure investment
25program consisting of the commitments and obligations

 

 

09800SB0009sam001- 4 -LRB098 04269 JLS 40869 a

1described in this subsection (b) and (ii) the customer
2assistance program consisting of the commitments and
3obligations described in subsection (b-10) of this Section,
4notwithstanding any other provisions of this Act and without
5obtaining any approvals from the Commission or any other agency
6other than as set forth in this Section, regardless of whether
7any such approval would otherwise be required. "Combination
8utility" means a utility that, as of January 1, 2011, provided
9electric service to at least one million retail customers in
10Illinois and gas service to at least 500,000 retail customers
11in Illinois. A participating utility shall recover the
12expenditures made under the infrastructure investment program
13through the ratemaking process, including, but not limited to,
14the performance-based formula rate and process set forth in
15this Section.
16    During the infrastructure investment program's peak
17program year, a participating utility other than a combination
18utility shall create 2,000 full-time equivalent jobs in
19Illinois, and a participating utility that is a combination
20utility shall create 450 full-time equivalent jobs in Illinois
21related to the provision of electric service. These jobs shall
22include direct jobs, contractor positions, and induced jobs,
23but shall not include any portion of a job commitment, not
24specifically contingent on an amendatory Act of the 97th
25General Assembly becoming law, between a participating utility
26and a labor union that existed on the effective date of this

 

 

09800SB0009sam001- 5 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 6 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 7 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 8 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 9 -LRB098 04269 JLS 40869 a

1            (B) over a 10-year period, invest an estimated
2        $360,000,000 to upgrade and modernize its transmission
3        and distribution infrastructure and in Smart Grid
4        electric system upgrades, including, but not limited
5        to:
6                (i) additional smart meters;
7                (ii) distribution automation;
8                (iii) associated cyber secure data
9            communication network; and
10                (iv) substation micro-processor relay
11            upgrades.
12    For purposes of this Section, "Smart Grid electric system
13upgrades" shall have the meaning set forth in subsection (a) of
14Section 16-108.6 of this Act.
15    The investments in the infrastructure investment program
16described in this subsection (b) shall be incremental to the
17participating utility's annual capital investment program, as
18defined by, for purposes of this subsection (b), the
19participating utility's average capital spend for calendar
20years 2008, 2009, and 2010 as reported in the applicable
21Federal Energy Regulatory Commission (FERC) Form 1; provided
22that where one or more utilities have merged, the average
23capital spend shall be determined using the aggregate of the
24merged utilities' capital spend reported in FERC Form 1 for the
25years 2008, 2009, and 2010. A participating utility may add
26reasonable construction ramp-up and ramp-down time to the

 

 

09800SB0009sam001- 10 -LRB098 04269 JLS 40869 a

1investment periods specified in this subsection (b). For each
2such investment period, the ramp-up and ramp-down time shall
3not exceed a total of 6 months.
4    Within 60 days after filing a tariff under subsection (c)
5of this Section, a participating utility shall submit to the
6Commission its plan, including scope, schedule, and staffing,
7for satisfying its infrastructure investment program
8commitments pursuant to this subsection (b). The submitted plan
9shall include a schedule and staffing plan for the next
10calendar year. The plan shall also include a plan for the
11creation, operation, and administration of a Smart Grid test
12bed as described in subsection (c) of Section 16-108.8. The
13plan need not allocate the work equally over the respective
14periods, but should allocate material increments throughout
15such periods commensurate with the work to be undertaken. No
16later than April 1 of each subsequent year, the utility shall
17submit to the Commission a report that includes any updates to
18the plan, a schedule for the next calendar year, the
19expenditures made for the prior calendar year and cumulatively,
20and the number of full-time equivalent jobs created for the
21prior calendar year and cumulatively. If the utility is
22materially deficient in satisfying a schedule or staffing plan,
23then the report must also include a corrective action plan to
24address the deficiency. The fact that the plan, implementation
25of the plan, or a schedule changes shall not imply the
26imprudence or unreasonableness of the infrastructure

 

 

09800SB0009sam001- 11 -LRB098 04269 JLS 40869 a

1investment program, plan, or schedule. Further, no later than
245 days following the last day of the first, second, and third
3quarters of each year of the plan, a participating utility
4shall submit to the Commission a verified quarterly report for
5the prior quarter that includes (i) the total number of
6full-time equivalent jobs created during the prior quarter,
7(ii) the total number of employees as of the last day of the
8prior quarter, (iii) the total number of full-time equivalent
9hours in each job classification or job title, (iv) the total
10number of incremental employees and contractors in support of
11the investments undertaken pursuant to this subsection (b) for
12the prior quarter, and (v) any other information that the
13Commission may require by rule.
14    With respect to the participating utility's peak job
15commitment, if, after considering the utility's corrective
16action plan and compliance thereunder, the Commission enters an
17order finding, after notice and hearing, that a participating
18utility did not satisfy its peak job commitment described in
19this subsection (b) for reasons that are reasonably within its
20control, then the Commission shall also determine, after
21consideration of the evidence, including, but not limited to,
22evidence submitted by the Department of Commerce and Economic
23Opportunity and the utility, the deficiency in the number of
24full-time equivalent jobs during the peak program year due to
25such failure. The Commission shall notify the Department of any
26proceeding that is initiated pursuant to this paragraph. For

 

 

09800SB0009sam001- 12 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 13 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 14 -LRB098 04269 JLS 40869 a

1Commission requesting that it be permitted to satisfy its
2commitments by spending less than the estimated amounts
3specified in subsection (b) of this Section. The Commission
4shall, after notice and hearing, enter its order approving, or
5approving as modified, or denying each such petition within 150
6days after the filing of the petition.
7    In no event, absent General Assembly approval, shall the
8capital investment costs incurred by a participating utility
9other than a combination utility in satisfying its
10infrastructure investment program commitments described in
11subsection (b) of this Section exceed $3,000,000,000 or, for a
12participating utility that is a combination utility,
13$720,000,000. If the participating utility's updated cost
14estimates for satisfying its infrastructure investment program
15commitments described in subsection (b) of this Section exceed
16the limitation imposed by this subsection (b-5), then it shall
17submit a report to the Commission that identifies the increased
18costs and explains the reason or reasons for the increased
19costs no later than the year in which the utility estimates it
20will exceed the limitation. The Commission shall review the
21report and shall, within 90 days after the participating
22utility files the report, report to the General Assembly its
23findings regarding the participating utility's report. If the
24General Assembly does not amend the limitation imposed by this
25subsection (b-5), then the utility may modify its plan so as
26not to exceed the limitation imposed by this subsection (b-5)

 

 

09800SB0009sam001- 15 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 16 -LRB098 04269 JLS 40869 a

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 disabled veterans who demonstrate a
5    hardship and members of the armed services or reserve
6    forces of the United States or members of the Illinois
7    National Guard who are on active duty pursuant to an
8    executive order of the President of the United States, an
9    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 and
12    education to low-income senior citizens to assist them with
13    obtaining information regarding energy usage and effective
14    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

 

 

09800SB0009sam001- 17 -LRB098 04269 JLS 40869 a

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 by
6the Commission. If a utility elects to file tariffs with the
7Commission to implement all or a portion of the programs, those
8tariffs shall, regardless of the date actually filed, be deemed
9accepted and approved, and shall become effective on the
10effective date of this amendatory Act of the 97th General
11Assembly. The participating utilities whose customers benefit
12from the funds that are disbursed as contemplated in this
13Section shall file annual reports documenting the disbursement
14of those funds with the Commission. The Commission has the
15authority to audit disbursement of the funds to ensure they
16were disbursed consistently 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

 

 

09800SB0009sam001- 18 -LRB098 04269 JLS 40869 a

1components that form the basis of the rate charged to customers
2with sufficient specificity to operate in a standardized manner
3and be updated annually with transparent information that
4reflects the utility's actual costs to be recovered during the
5applicable rate year, which is the period beginning with the
6first billing day of January and extending through the last
7billing day of the following December. In the event the utility
8recovers a portion of its costs through automatic adjustment
9clause tariffs on the effective date of this amendatory Act of
10the 97th General Assembly, the utility may elect to continue to
11recover these costs through such tariffs, but then these costs
12shall not be recovered through the performance-based formula
13rate. In the event the participating utility, prior to the
14effective date of this amendatory Act of the 97th General
15Assembly, filed electric delivery services tariffs with the
16Commission pursuant to Section 9-201 of this Act that are
17related to the recovery of its electric delivery services costs
18that are still pending on the effective date of this amendatory
19Act of the 97th General Assembly, the participating utility
20shall, at the time it files its performance-based formula rate
21tariff with the Commission, also file a notice of withdrawal
22with the Commission to withdraw the electric delivery services
23tariffs previously filed pursuant to Section 9-201 of this Act.
24Upon receipt of such notice, the Commission shall dismiss with
25prejudice any docket that had been initiated to investigate the
26electric delivery services tariffs filed pursuant to Section

 

 

09800SB0009sam001- 19 -LRB098 04269 JLS 40869 a

19-201 of this Act, and such tariffs and the record related
2thereto shall not be the subject of any further hearing,
3investigation, or proceeding of any kind related to rates for
4electric 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 the
13Commission 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 not
25    imply the imprudence or unreasonableness of that cost or
26    investment.

 

 

09800SB0009sam001- 20 -LRB098 04269 JLS 40869 a

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.
6        (3) Include a cost of equity, which shall be calculated
7    as the sum of the following:
8            (A) the average for the applicable calendar year of
9        the monthly average yields of 30-year U.S. Treasury
10        bonds published by the Board of Governors of the
11        Federal Reserve System in its weekly H.15 Statistical
12        Release or successor publication; and
13            (B) 580 basis points.
14        At such time as the Board of Governors of the Federal
15    Reserve System ceases to include the monthly average yields
16    of 30-year U.S. Treasury bonds in its weekly H.15
17    Statistical Release or successor publication, the monthly
18    average yields of the U.S. Treasury bonds then having the
19    longest duration published by the Board of Governors in its
20    weekly H.15 Statistical Release or successor publication
21    shall instead be used for purposes of this paragraph (3).
22        (4) Permit and set forth protocols, subject to a
23    determination of prudence and reasonableness consistent
24    with Commission practice and law, for the following:
25            (A) recovery of incentive compensation expense
26        that is based on the achievement of operational

 

 

09800SB0009sam001- 21 -LRB098 04269 JLS 40869 a

1        metrics, including metrics related to budget controls,
2        outage duration and frequency, safety, customer
3        service, efficiency and productivity, and
4        environmental compliance. Incentive compensation
5        expense that is based on net income or an affiliate's
6        earnings per share shall not be recoverable under the
7        performance-based formula rate;
8            (B) recovery of pension and other post-employment
9        benefits expense, provided that such costs are
10        supported by an actuarial study;
11            (C) recovery of severance costs, provided that if
12        the amount is over $3,700,000 for a participating
13        utility that is a combination utility or $10,000,000
14        for a participating utility that serves more than 3
15        million retail customers, then the full amount shall be
16        amortized consistent with subparagraph (F) of this
17        paragraph (4);
18            (D) investment return at a rate equal to the
19        utility's weighted average cost of long-term debt, on
20        the pension assets as, and in the amount, reported in
21        Account 186 (or in such other Account or Accounts as
22        such asset may subsequently be recorded) of the
23        utility's most recently filed FERC Form 1, net of
24        deferred tax benefits equal to the utility's long-term
25        debt cost of capital as of the end of the applicable
26        calendar year;

 

 

09800SB0009sam001- 22 -LRB098 04269 JLS 40869 a

1            (E) recovery of the expenses related to the
2        Commission proceeding under this subsection (c) to
3        approve this performance-based formula rate and
4        initial rates or to subsequent proceedings related to
5        the formula, provided that the recovery shall be
6        amortized over a 3-year period; recovery of expenses
7        related to the annual Commission proceedings under
8        subsection (d) of this Section to review the inputs to
9        the performance-based formula rate shall be expensed
10        and recovered through the performance-based formula
11        rate;
12            (F) amortization over a 5-year period of the full
13        amount of each charge or credit that exceeds $3,700,000
14        for a participating utility that is a combination
15        utility or $10,000,000 for a participating utility
16        that serves more than 3 million retail customers in the
17        applicable calendar year and that relates to a
18        workforce reduction program's severance costs, changes
19        in accounting rules, changes in law, compliance with
20        any Commission-initiated audit, or a single storm or
21        other similar expense, provided that any unamortized
22        balance shall be reflected in rate base. For purposes
23        of this subparagraph (F), changes in law includes any
24        enactment, repeal, or amendment in a law, ordinance,
25        rule, regulation, interpretation, permit, license,
26        consent, or order, including those relating to taxes,

 

 

09800SB0009sam001- 23 -LRB098 04269 JLS 40869 a

1        accounting, or to environmental matters, or in the
2        interpretation or application thereof by any
3        governmental authority occurring after the effective
4        date of this amendatory Act of the 97th General
5        Assembly;
6            (G) recovery of existing regulatory assets over
7        the periods previously authorized by the Commission;
8            (H) historical weather normalized billing
9        determinants; and
10            (I) allocation methods for common costs.
11        (5) Provide that if the participating utility's earned
12    rate of return on common equity related to the provision of
13    delivery services for the prior rate year (calculated using
14    costs and capital structure approved by the Commission as
15    provided in subparagraph (2) of this subsection (c),
16    consistent with this Section, in accordance with
17    Commission rules and orders, including, but not limited to,
18    adjustments for goodwill, and after any Commission-ordered
19    disallowances and taxes) is more than 50 basis points
20    higher than the rate of return on common equity calculated
21    pursuant to paragraph (3) of this subsection (c) (after
22    adjusting for any penalties to the rate of return on common
23    equity applied pursuant to the performance metrics
24    provision of subsection (f) of this Section), then the
25    participating utility shall apply a credit through the
26    performance-based formula rate that reflects an amount

 

 

09800SB0009sam001- 24 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 25 -LRB098 04269 JLS 40869 a

1    pursuant to paragraph (3) of this subsection (c) (after
2    adjusting for any penalties to the rate of return on common
3    equity applied pursuant to the performance metrics
4    provision of subsection (f) of this Section) for the prior
5    rate year, adjusted for taxes.
6        (6) Provide for an annual reconciliation, as described
7    in subsection (d) of this Section, with interest as
8    described in subsection (d) of this Section, of the revenue
9    requirement reflected in rates for each calendar year,
10    beginning with the calendar year in which the utility files
11    its performance-based formula rate tariff pursuant to
12    subsection (c) of this Section, with what the revenue
13    requirement would have been had the actual cost information
14    for the applicable calendar year been available at the
15    filing date.
16    The utility shall file, together with its tariff, final
17data based on its most recently filed FERC Form 1, plus
18projected plant additions and correspondingly updated
19depreciation reserve and expense for the calendar year in which
20the tariff and data are filed, that shall populate the
21performance-based formula rate and set the initial delivery
22services rates under the formula. For purposes of this Section,
23"FERC Form 1" means the Annual Report of Major Electric
24Utilities, Licensees and Others that electric utilities are
25required to file with the Federal Energy Regulatory Commission
26under the Federal Power Act, Sections 3, 4(a), 304 and 209,

 

 

09800SB0009sam001- 26 -LRB098 04269 JLS 40869 a

1modified as necessary to be consistent with 83 Ill. Admin. Code
2Part 415 as of May 1, 2011. Nothing in this Section is intended
3to allow costs that are not otherwise recoverable to be
4recoverable by virtue of inclusion in FERC Form 1.
5    After the utility files its proposed performance-based
6formula rate structure and protocols and initial rates, the
7Commission shall initiate a docket to review the filing. The
8Commission shall enter an order approving, or approving as
9modified, the performance-based formula rate, including the
10initial rates, as just and reasonable within 270 days after the
11date on which the tariff was filed, or, if the tariff is filed
12within 14 days after the effective date of this amendatory Act
13of the 97th General Assembly, then by May 31, 2012. Such review
14shall be based on the same evidentiary standards, including,
15but not limited to, those concerning the prudence and
16reasonableness of the costs incurred by the utility, the
17Commission applies in a hearing to review a filing for a
18general increase in rates under Article IX of this Act. The
19initial rates shall take effect within 30 days after the
20Commission's order approving the performance-based formula
21rate tariff.
22    Until such time as the Commission approves a different rate
23design and cost allocation pursuant to subsection (e) of this
24Section, rate design and cost allocation across customer
25classes shall be consistent with the Commission's most recent
26order regarding the participating utility's request for a

 

 

09800SB0009sam001- 27 -LRB098 04269 JLS 40869 a

1general increase in its delivery services rates.
2    Subsequent changes to the performance-based formula rate
3structure or protocols shall be made as set forth in Section
49-201 of this Act, but nothing in this subsection (c) is
5intended to limit the Commission's authority under Article IX
6and other provisions of this Act to initiate an investigation
7of a participating utility's performance-based formula rate
8tariff, provided that any such changes shall be consistent with
9paragraphs (1) through (6) of this subsection (c). Any change
10ordered by the Commission shall be made at the same time new
11rates take effect following the Commission's next order
12pursuant to subsection (d) of this Section, provided that the
13new rates take effect no less than 30 days after the date on
14which the Commission issues an order adopting the change.
15    A participating utility that files a tariff pursuant to
16this subsection (c) must submit a one-time $200,000 filing fee
17at the time the Chief Clerk of the Commission accepts the
18filing, which shall be a recoverable expense.
19    In the event the performance-based formula rate is
20terminated, the then current rates shall remain in effect until
21such time as new rates are set pursuant to Article IX of this
22Act, subject to retroactive rate adjustment, with interest, to
23reconcile rates charged with actual costs. At such time that
24the performance-based formula rate is terminated, the
25participating utility's voluntary commitments and obligations
26under subsection (b) of this Section shall immediately

 

 

09800SB0009sam001- 28 -LRB098 04269 JLS 40869 a

1terminate, except for the utility's obligation to pay an amount
2already owed to the fund for training grants pursuant to a
3Commission order issued under subsection (b) of this Section.
4    (d) Subsequent to the Commission's issuance of an order
5approving the utility's performance-based formula rate
6structure and protocols, and initial rates under subsection (c)
7of this Section, the utility shall file, on or before May 1 of
8each year, with the Chief Clerk of the Commission its updated
9cost inputs to the performance-based formula rate for the
10applicable rate year and the corresponding new charges. Each
11such filing shall conform to the following requirements and
12include the following information:
13        (1) The inputs to the performance-based formula rate
14    for the applicable rate year shall be based on final
15    historical data reflected in the utility's most recently
16    filed annual FERC Form 1 plus projected plant additions and
17    correspondingly updated depreciation reserve and expense
18    for the calendar year in which the inputs are filed. The
19    filing shall also include a reconciliation of the revenue
20    requirement that was in effect for the prior rate year (as
21    set by the cost inputs for the prior rate year) with the
22    actual revenue requirement for the prior rate year
23    (determined using a year-end rate base) that uses amounts
24    as reflected in the applicable FERC Form 1 that reports the
25    actual costs for the prior rate year). Any over-collection
26    or under-collection indicated by such reconciliation shall

 

 

09800SB0009sam001- 29 -LRB098 04269 JLS 40869 a

1    be reflected as a credit against, or recovered as an
2    additional charge to, respectively, with interest
3    calculated at a rate equal to the utility's weighted
4    average cost of capital approved by the Commission for the
5    prior rate year, the charges for the applicable rate year.
6    Provided, however, that the first such reconciliation
7    shall be for the calendar year in which the utility files
8    its performance-based formula rate tariff pursuant to
9    subsection (c) of this Section and shall reconcile (i) the
10    revenue requirement or requirements established by the
11    rate order or orders in effect from time to time during
12    such calendar year (weighted, as applicable) with (ii) the
13    revenue requirement determined using a year-end rate base
14    for that calendar year calculated pursuant to the
15    performance-based formula rate using (A) actual costs for
16    that year as reflected in the applicable FERC Form 1, and
17    (B) for the first such reconciliation only, the cost of
18    equity, which shall be calculated as the sum of 590 basis
19    points plus the average for the applicable calendar year of
20    the monthly average yields of 30-year U.S. Treasury bonds
21    published by the Board of Governors of the Federal Reserve
22    System in its weekly H.15 Statistical Release or successor
23    publication. The first such reconciliation is not intended
24    to provide for the recovery of costs previously excluded
25    from rates based on a prior Commission order finding of
26    imprudence or unreasonableness. Each reconciliation shall

 

 

09800SB0009sam001- 30 -LRB098 04269 JLS 40869 a

1    be certified by the participating utility in the same
2    manner that FERC Form 1 is certified. The filing shall also
3    include the charge or credit, if any, resulting from the
4    calculation required by paragraph (6) of subsection (c) of
5    this Section.
6        Notwithstanding anything that may be to the contrary,
7    the intent of the reconciliation is to ultimately reconcile
8    the revenue requirement reflected in rates for each
9    calendar year, beginning with the calendar year in which
10    the utility files its performance-based formula rate
11    tariff pursuant to subsection (c) of this Section, with
12    what the revenue requirement determined using a year-end
13    rate base for the applicable calendar year would have been
14    had the actual cost information for the applicable calendar
15    year been available at the filing date.
16        (2) The new charges shall take effect beginning on the
17    first billing day of the following January billing period
18    and remain in effect through the last billing day of the
19    next December billing period regardless of whether the
20    Commission enters upon a hearing pursuant to this
21    subsection (d).
22        (3) The filing shall include relevant and necessary
23    data and documentation for the applicable rate year that is
24    consistent with the Commission's rules applicable to a
25    filing for a general increase in rates or any rules adopted
26    by the Commission to implement this Section. Normalization

 

 

09800SB0009sam001- 31 -LRB098 04269 JLS 40869 a

1    adjustments shall not be required. Notwithstanding any
2    other provision of this Section or Act or any rule or other
3    requirement adopted by the Commission, a participating
4    utility that is a combination utility with more than one
5    rate zone shall not be required to file a separate set of
6    such data and documentation for each rate zone and may
7    combine such data and documentation into a single set of
8    schedules.
9    Within 45 days after the utility files its annual update of
10cost inputs to the performance-based formula rate, the
11Commission shall have the authority, either upon complaint or
12its own initiative, but with reasonable notice, to enter upon a
13hearing concerning the prudence and reasonableness of the costs
14incurred by the utility to be recovered during the applicable
15rate year that are reflected in the inputs to the
16performance-based formula rate derived from the utility's FERC
17Form 1. During the course of the hearing, each objection shall
18be stated with particularity and evidence provided in support
19thereof, after which the utility shall have the opportunity to
20rebut the evidence. Discovery shall be allowed consistent with
21the Commission's Rules of Practice, which Rules shall be
22enforced by the Commission or the assigned hearing examiner.
23The Commission shall apply the same evidentiary standards,
24including, but not limited to, those concerning the prudence
25and reasonableness of the costs incurred by the utility, in the
26hearing as it would apply in a hearing to review a filing for a

 

 

09800SB0009sam001- 32 -LRB098 04269 JLS 40869 a

1general increase in rates under Article IX of this Act. The
2Commission shall not, however, have the authority in a
3proceeding under this subsection (d) to consider or order any
4changes to the structure or protocols of the performance-based
5formula rate approved pursuant to subsection (c) of this
6Section. In a proceeding under this subsection (d), the
7Commission shall enter its order no later than the earlier of
8240 days after the utility's filing of its annual update of
9cost inputs to the performance-based formula rate or December
1031. The Commission's determinations of the prudence and
11reasonableness of the costs incurred for the applicable
12calendar year shall be final upon entry of the Commission's
13order and shall not be subject to reopening, reexamination, or
14collateral attack in any other Commission proceeding, case,
15docket, order, rule or regulation, provided, however, that
16nothing in this subsection (d) shall prohibit a party from
17petitioning the Commission to rehear or appeal to the courts
18the order pursuant to the provisions of this Act.
19    In the event the Commission does not, either upon complaint
20or its own initiative, enter upon a hearing within 45 days
21after the utility files the annual update of cost inputs to its
22performance-based formula rate, then the costs incurred for the
23applicable calendar year shall be deemed prudent and
24reasonable, and the filed charges shall not be subject to
25reopening, reexamination, or collateral attack in any other
26proceeding, case, docket, order, rule, or regulation.

 

 

09800SB0009sam001- 33 -LRB098 04269 JLS 40869 a

1    A participating utility's first filing of the updated cost
2inputs, and any Commission investigation of such inputs
3pursuant to this subsection (d) shall proceed notwithstanding
4the fact that the Commission's investigation under subsection
5(c) of this Section is still pending and notwithstanding any
6other law, order, rule, or Commission practice to the contrary.
7    (e) Nothing in subsections (c) or (d) of this Section shall
8prohibit the Commission from investigating, or a participating
9utility from filing, revenue-neutral tariff changes related to
10rate design of a performance-based formula rate that has been
11placed into effect for the utility. Following approval of a
12participating utility's performance-based formula rate tariff
13pursuant to subsection (c) of this Section, the utility shall
14make a filing with the Commission within one year after the
15effective date of the performance-based formula rate tariff
16that proposes changes to the tariff to incorporate the findings
17of any final rate design orders of the Commission applicable to
18the participating utility and entered subsequent to the
19Commission's approval of the tariff. The Commission shall,
20after notice and hearing, enter its order approving, or
21approving with modification, the proposed changes to the
22performance-based formula rate tariff within 240 days after the
23utility's filing. Following such approval, the utility shall
24make a filing with the Commission during each subsequent 3-year
25period that either proposes revenue-neutral tariff changes or
26re-files the existing tariffs without change, which shall

 

 

09800SB0009sam001- 34 -LRB098 04269 JLS 40869 a

1present the Commission with an opportunity to suspend the
2tariffs and consider revenue-neutral tariff changes related to
3rate design.
4    (f) Within 30 days after the filing of a tariff pursuant to
5subsection (c) of this Section, each participating utility
6shall develop and file with the Commission multi-year metrics
7designed to achieve, ratably (i.e., in equal segments) over a
810-year period, improvement over baseline performance values
9as follows:
10        (1) Twenty percent improvement in the System Average
11    Interruption Frequency Index, using a baseline of the
12    average of the data from 2001 through 2010.
13        (2) Fifteen percent improvement in the system Customer
14    Average Interruption Duration Index, using a baseline of
15    the average of the data from 2001 through 2010.
16        (3) For a participating utility other than a
17    combination utility, 20% improvement in the System Average
18    Interruption Frequency Index for its Southern Region,
19    using a baseline of the average of the data from 2001
20    through 2010. For purposes of this paragraph (3), Southern
21    Region shall have the meaning set forth in the
22    participating utility's most recent report filed pursuant
23    to Section 16-125 of this Act.
24        (3.5) For a participating utility other than a
25    combination utility, 20% improvement in the System Average
26    Interruption Frequency Index for its Northeastern Region,

 

 

09800SB0009sam001- 35 -LRB098 04269 JLS 40869 a

1    using a baseline of the average of the data from 2001
2    through 2010. For purposes of this paragraph (3.5),
3    Northeastern Region shall have the meaning set forth in the
4    participating utility's most recent report filed pursuant
5    to Section 16-125 of this Act.
6        (4) Seventy-five percent improvement in the total
7    number of customers who exceed the service reliability
8    targets as set forth in subparagraphs (A) through (C) of
9    paragraph (4) of subsection (b) of 83 Ill. Admin. Code Part
10    411.140 as of May 1, 2011, using 2010 as the baseline year.
11        (5) Reduction in issuance of estimated electric bills:
12    90% improvement for a participating utility other than a
13    combination utility, and 56% improvement for a
14    participating utility that is a combination utility, using
15    a baseline of the average number of estimated bills for the
16    years 2008 through 2010.
17        (6) Consumption on inactive meters: 90% improvement
18    for a participating utility other than a combination
19    utility, and 56% improvement for a participating utility
20    that is a combination utility, using a baseline of the
21    average unbilled kilowatthours for the years 2009 and 2010.
22        (7) Unaccounted for energy: 50% improvement for a
23    participating utility other than a combination utility
24    using a baseline of the non-technical line loss unaccounted
25    for energy kilowatthours for the year 2009.
26        (8) Uncollectible expense: reduce uncollectible

 

 

09800SB0009sam001- 36 -LRB098 04269 JLS 40869 a

1    expense by at least $30,000,000 for a participating utility
2    other than a combination utility and by at least $3,500,000
3    for a participating utility that is a combination utility,
4    using a baseline of the average uncollectible expense for
5    the years 2008 through 2010.
6        (9) Opportunities for minority-owned and female-owned
7    business enterprises: design a performance metric
8    regarding the creation of opportunities for minority-owned
9    and female-owned business enterprises consistent with
10    State and federal law using a base performance value of the
11    percentage of the participating utility's capital
12    expenditures that were paid to minority-owned and
13    female-owned business enterprises in 2010.
14    The definitions set forth in 83 Ill. Admin. Code Part
15411.20 as of May 1, 2011 shall be used for purposes of
16calculating performance under paragraphs (1) through (3.5) of
17this subsection (f), provided, however, that the participating
18utility may exclude up to 9 extreme weather event days from
19such calculation for each year, and provided further that the
20participating utility shall exclude 9 extreme weather event
21days when calculating each year of the baseline period to the
22extent that there are 9 such days in a given year of the
23baseline period. For purposes of this Section, an extreme
24weather event day is a 24-hour calendar day (beginning at 12:00
25a.m. and ending at 11:59 p.m.) during which any weather event
26(e.g., storm, tornado) caused interruptions for 10,000 or more

 

 

09800SB0009sam001- 37 -LRB098 04269 JLS 40869 a

1of the participating utility's customers for 3 hours or more.
2If there are more than 9 extreme weather event days in a year,
3then the utility may choose no more than 9 extreme weather
4event days to exclude, provided that the same extreme weather
5event days are excluded from each of the calculations performed
6under paragraphs (1) through (3.5) of this subsection (f).
7    The metrics shall include incremental performance goals
8for each year of the 10-year period, which shall be designed to
9demonstrate that the utility is on track to achieve the
10performance goal in each category at the end of the 10-year
11period. The utility shall elect when the 10-year period shall
12commence for the metrics set forth in subparagraphs (1) through
13(4) and (9) of this subsection (f), provided that it begins no
14later than 14 months following the date on which the utility
15begins investing pursuant to subsection (b) of this Section,
16and when the 10-year period shall commence for the metrics set
17forth in subparagraphs (5) through (8) of this subsection (f),
18provided that it begins no later than 14 months following the
19date on which the Commission enters its order approving the
20utility's Advanced Metering Infrastructure Deployment Plan
21pursuant to subsection (c) of Section 16-108.6 of this Act.
22    The metrics and performance goals set forth in
23subparagraphs (5) through (8) of this subsection (f) are based
24on the assumptions that the participating utility may fully
25implement the technology described in subsection (b) of this
26Section, including utilizing the full functionality of such

 

 

09800SB0009sam001- 38 -LRB098 04269 JLS 40869 a

1technology and that there is no requirement for personal
2on-site notification. If the utility is unable to meet the
3metrics and performance goals set forth in subparagraphs (5)
4through (8) of this subsection (f) for such reasons, and the
5Commission so finds after notice and hearing, then the utility
6shall be excused from compliance, but only to the limited
7extent achievement of the affected metrics and performance
8goals was hindered by the less than full implementation.
9    (f-5) The financial penalties applicable to the metrics
10described in subparagraphs (1) through (8) of subsection (f) of
11this Section, as applicable, shall be applied through an
12adjustment to the participating utility's return on equity of
13no more than a total of 30 basis points in each of the first 3
14years, of no more than a total of 34 basis points in each of the
153 years thereafter, and of no more than a total of 38 basis
16points in each of the 4 years thereafter, as follows:
17        (1) With respect to each of the incremental annual
18    performance goals established pursuant to paragraph (1) of
19    subsection (f) of this Section,
20            (A) for each year that a participating utility
21        other than a combination utility does not achieve the
22        annual goal, the participating utility's return on
23        equity shall be reduced as follows: during years 1
24        through 3, by 5 basis points; during years 4 through 6,
25        by 6 basis points; and during years 7 through 10, by 7
26        basis points; and

 

 

09800SB0009sam001- 39 -LRB098 04269 JLS 40869 a

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

 

 

09800SB0009sam001- 40 -LRB098 04269 JLS 40869 a

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        (5) With respect to each of the incremental annual
8    performance goals established pursuant to subparagraph (5)
9    of subsection (f) of this Section, for each year that the
10    participating utility does not achieve at least 95% of each
11    such goal, the participating utility's return on equity
12    shall be reduced by 5 basis points for each such unachieved
13    goal.
14        (6) With respect to each of the incremental annual
15    performance goals established pursuant to paragraphs (6),
16    (7), and (8) of subsection (f) of this Section, as
17    applicable, which together measure non-operational
18    customer savings and benefits relating to the
19    implementation of the Advanced Metering Infrastructure
20    Deployment Plan, as defined in Section 16-108.6 of this
21    Act, the performance under each such goal shall be
22    calculated in terms of the percentage of the goal achieved.
23    The percentage of goal achieved for each of the goals shall
24    be aggregated, and an average percentage value calculated,
25    for each year of the 10-year period. If the utility does
26    not achieve an average percentage value in a given year of

 

 

09800SB0009sam001- 41 -LRB098 04269 JLS 40869 a

1    at least 95%, the participating utility's return on equity
2    shall be reduced by 5 basis points.
3    The financial penalties shall be applied as described in
4this subsection (f-5) for the 12-month period in which the
5deficiency occurred through a separate tariff mechanism, which
6shall be filed by the utility together with its metrics. In the
7event the formula rate tariff established pursuant to
8subsection (c) of this Section terminates, the utility's
9obligations under subsection (f) of this Section and this
10subsection (f-5) shall also terminate, provided, however, that
11the tariff mechanism established pursuant to subsection (f) of
12this Section and this subsection (f-5) shall remain in effect
13until any penalties due and owing at the time of such
14termination are applied.
15    The Commission shall, after notice and hearing, enter an
16order within 120 days after the metrics are filed approving, or
17approving with modification, a participating utility's tariff
18or mechanism to satisfy the metrics set forth in subsection (f)
19of this Section. On June 1 of each subsequent year, each
20participating utility shall file a report with the Commission
21that includes, among other things, a description of how the
22participating utility performed under each metric and an
23identification of any extraordinary events that adversely
24impacted the utility's performance. Whenever a participating
25utility does not satisfy the metrics required pursuant to
26subsection (f) of this Section, the Commission shall, after

 

 

09800SB0009sam001- 42 -LRB098 04269 JLS 40869 a

1notice and hearing, enter an order approving financial
2penalties in accordance with this subsection (f-5). The
3Commission-approved financial penalties shall be applied
4beginning with the next rate year. Nothing in this Section
5shall authorize the Commission to reduce or otherwise obviate
6the imposition of financial penalties for failing to achieve
7one or more of the metrics established pursuant to subparagraph
8(1) through (4) of subsection (f) of this Section.
9    (g) On or before July 31, 2014, each participating utility
10shall file a report with the Commission that sets forth the
11average annual increase in the average amount paid per
12kilowatthour for residential eligible retail customers,
13exclusive of the effects of energy efficiency programs,
14comparing the 12-month period ending May 31, 2012; the 12-month
15period ending May 31, 2013; and the 12-month period ending May
1631, 2014. For a participating utility that is a combination
17utility with more than one rate zone, the weighted average
18aggregate increase shall be provided. The report shall be filed
19together with a statement from an independent auditor attesting
20to the accuracy of the report. The cost of the independent
21auditor shall be borne by the participating utility and shall
22not be a recoverable expense. "The average amount paid per
23kilowatthour" shall be based on the participating utility's
24tariffed rates actually in effect and shall not be calculated
25using any hypothetical rate or adjustments to actual charges
26(other than as specified for energy efficiency) as an input.

 

 

09800SB0009sam001- 43 -LRB098 04269 JLS 40869 a

1    In the event that the average annual increase exceeds 2.5%
2as calculated pursuant to this subsection (g), then Sections
316-108.5, 16-108.6, 16-108.7, and 16-108.8 of this Act, other
4than this subsection, shall be inoperative as they relate to
5the utility and its service area as of the date of the report
6due to be submitted pursuant to this subsection and the utility
7shall no longer be eligible to annually update the
8performance-based formula rate tariff pursuant to subsection
9(d) of this Section. In such event, the then current rates
10shall remain in effect until such time as new rates are set
11pursuant to Article IX of this Act, subject to retroactive
12adjustment, with interest, to reconcile rates charged with
13actual costs, and the participating utility's voluntary
14commitments and obligations under subsection (b) of this
15Section shall immediately terminate, except for the utility's
16obligation to pay an amount already owed to the fund for
17training grants pursuant to a Commission order issued under
18subsection (b) of this Section.
19    In the event that the average annual increase is 2.5% or
20less as calculated pursuant to this subsection (g), then the
21performance-based formula rate shall remain in effect as set
22forth in this Section.
23    For purposes of this Section, the amount per kilowatthour
24means the total amount paid for electric service expressed on a
25per kilowatthour basis, and the total amount paid for electric
26service includes without limitation amounts paid for supply,

 

 

09800SB0009sam001- 44 -LRB098 04269 JLS 40869 a

1transmission, distribution, surcharges, and add-on taxes
2exclusive of any increases in taxes or new taxes imposed after
3the effective date of this amendatory Act of the 97th General
4Assembly. For purposes of this Section, "eligible retail
5customers" shall have the meaning set forth in Section 16-111.5
6of this Act.
7    The fact that this Section becomes inoperative as set forth
8in this subsection shall not be construed to mean that the
9Commission may reexamine or otherwise reopen prudence or
10reasonableness determinations already made.
11    (h) Sections 16-108.5, 16-108.6, 16-108.7, and 16-108.8 of
12this Act, other than this subsection, are inoperative after
13December 31, 2017 for every participating utility, after which
14time a participating utility shall no longer be eligible to
15annually update the performance-based formula rate tariff
16pursuant to subsection (d) of this Section. At such time, the
17then current rates shall remain in effect until such time as
18new rates are set pursuant to Article IX of this Act, subject
19to retroactive adjustment, with interest, to reconcile rates
20charged with actual costs.
21    By December 31, 2017, the Commission shall prepare and file
22with the General Assembly a report on the infrastructure
23program and the performance-based formula rate. The report
24shall include the change in the average amount per kilowatthour
25paid by residential customers between June 1, 2011 and May 31,
262017. If the change in the total average rate paid exceeds 2.5%

 

 

09800SB0009sam001- 45 -LRB098 04269 JLS 40869 a

1compounded annually, the Commission shall include in the report
2an analysis that shows the portion of the change due to the
3delivery services component and the portion of the change due
4to the supply component of the rate. The report shall include
5separate sections for each participating utility.
6    In the event Sections 16-108.5, 16-108.6, 16-108.7, and
716-108.8 of this Act do not become inoperative after December
831, 2017, then these Sections are inoperative after December
931, 2022 for every participating utility, after which time a
10participating utility shall no longer be eligible to annually
11update the performance-based formula rate tariff pursuant to
12subsection (d) of this Section. At such time, the then current
13rates shall remain in effect until such time as new rates are
14set pursuant to Article IX of this Act, subject to retroactive
15adjustment, with interest, to reconcile rates charged with
16actual costs.
17    The fact that this Section becomes inoperative as set forth
18in this subsection shall not be construed to mean that the
19Commission may reexamine or otherwise reopen prudence or
20reasonableness determinations already made.
21    (i) While a participating utility may use, develop, and
22maintain broadband systems and the delivery of broadband
23services, voice-over-internet-protocol services,
24telecommunications services, and cable and video programming
25services for use in providing delivery services and Smart Grid
26functionality or application to its retail customers,

 

 

09800SB0009sam001- 46 -LRB098 04269 JLS 40869 a

1including, but not limited to, the installation,
2implementation and maintenance of Smart Grid electric system
3upgrades as defined in Section 16-108.6 of this Act, a
4participating utility is prohibited from offering to its retail
5customers broadband services or the delivery of broadband
6services, voice-over-internet-protocol services,
7telecommunications services, or cable or video programming
8services, unless they are part of a service directly related to
9delivery services or Smart Grid functionality or applications
10as defined in Section 16-108.6 of this Act, and from recovering
11the costs of such offerings from retail customers.
12    (j) Nothing in this Section is intended to legislatively
13overturn the opinion issued in Commonwealth Edison Co. v. Ill.
14Commerce Comm'n, Nos. 2-08-0959, 2-08-1037, 2-08-1137,
151-08-3008, 1-08-3030, 1-08-3054, 1-08-3313 cons. (Ill. App.
16Ct. 2d Dist. Sept. 30, 2010). This amendatory Act of the 97th
17General Assembly shall not be construed as creating a contract
18between the General Assembly and the participating utility, and
19shall not establish a property right in the participating
20utility.
21    (k) The changes made in subsections (c) and (d) of this
22Section by this amendatory Act of the 98th General Assembly are
23intended to be a restatement and clarification of existing law,
24and intended to give binding effect to the provisions of House
25Resolution 1157 adopted by the House of Representatives of the
2697th General Assembly and Senate Resolution 821 adopted by the

 

 

09800SB0009sam001- 47 -LRB098 04269 JLS 40869 a

1Senate of the 97th General Assembly that are reflected in
2paragraph (3) of this subsection. In addition, this amendatory
3Act of the 98th General Assembly preempts and supersedes any
4final Commission orders entered in Docket Nos. 11-0721,
512-0001, 12-0293, and 12-0321 to the extent inconsistent with
6the amendatory language added to subsections (c) and (d).
7        (1) No earlier than 5 business days after the effective
8    date of this amendatory Act of the 98th General Assembly,
9    each participating utility shall file any tariff changes
10    necessary to implement the amendatory language set forth in
11    subsections (c) and (d) of this Section by this amendatory
12    Act of the 98th General Assembly and a revised revenue
13    requirement under the participating utility's
14    performance-based formula rate. The Commission shall enter
15    a final order approving such tariff changes and revised
16    revenue requirement within 21 days after the participating
17    utility's filing.
18        (2) Notwithstanding anything that may be to the
19    contrary, a participating utility may file a tariff to
20    retroactively recover its previously unrecovered actual
21    costs of delivery service that are no longer subject to
22    recovery through a reconciliation adjustment under
23    subsection (d) of this Section. This retroactive recovery
24    shall include any derivative adjustments resulting from
25    the changes to subsections (c) and (d) of this Section by
26    this amendatory Act of the 98th General Assembly. Such

 

 

09800SB0009sam001- 48 -LRB098 04269 JLS 40869 a

1    tariff shall allow the utility to assess on current
2    customer bills over a period of 12 monthly billing periods,
3    a charge or credit related to those unrecovered costs with
4    interest at the utility's weighted average cost of capital
5    during the period in which those costs were unrecovered. A
6    participating utility may file a tariff that implements a
7    retroactive charge or credit as described in this paragraph
8    for amounts not otherwise included in the tariff filing
9    provided for in paragraph (1) of this subsection (k). The
10    Commission shall enter a final order approving such tariff
11    within 21 days after the participating utility's filing.
12        (3) The tariff changes described in paragraphs (1) and
13    (2) of this subsection (k) shall relate only to, and be
14    consistent with, the following provisions of this
15    amendatory Act of the 98th General Assembly: paragraph (2)
16    of subsection (c) regarding year-end capital structure,
17    subparagraph (D) of paragraph (4) of subsection (c)
18    regarding pension assets, and subsection (d) regarding the
19    reconciliation components related to year-end rate base
20    and interest calculated at a rate equal to the utility's
21    weighted average cost of capital.
22        (4) Nothing in this subsection is intended to affect a
23    dismissal of or otherwise affect an appeal from any final
24    Commission orders entered in Docket Nos. 11-0721, 12-0001,
25    12-0293, and 12-0321 other than to the extent of the
26    amendatory language contained in subsections (c) and (d) of

 

 

09800SB0009sam001- 49 -LRB098 04269 JLS 40869 a

1    this amendatory Act of the 98th General Assembly.
2    (l) Each participating utility shall be deemed to have been
3in full compliance with all requirements of subsection (b) of
4this Section, subsection (c) of this Section, Section 16-108.6
5of this Act, and all Commission orders entered pursuant to
6Sections 16-108.5 and 16-108.6 of this Act, up to and including
7the effective date of this amendatory Act of the 98th General
8Assembly. The Commission shall not undertake any investigation
9of such compliance and no penalty shall be assessed or adverse
10action taken against a participating utility for
11non-compliance with Commission orders associated with
12subsection (b) of this Section, subsection (c) of this Section,
13and Section 16-108.6 of this Act prior to such date. Each
14participating utility shall be permitted, without penalty, a
15period of 18 months after such effective date to take actions
16required to ensure its infrastructure investment program is in
17compliance with subsection (b) of this Section and with Section
1816-108.6 of this Act, provided that nothing in this amendatory
19Act of the 98th General Assembly is intended to change the
20meter deployment schedules approved in the final Commission
21orders on rehearing entered in Docket Nos. 12-0244 and 12-0298
22and provided further that nothing in this amendatory Act of
2398th General Assembly shall extend the end dates for the 5-year
24or 10-year periods set forth in subsection (b) of this Section
25or Section 16-108.6 of this Act. Nothing in this subsection is
26intended to address whether a participating utility has, or has

 

 

09800SB0009sam001- 50 -LRB098 04269 JLS 40869 a

1not, satisfied any or all of the metrics and performance goals
2established pursuant to subsection (f) of this Section.
3    (m) The provisions of this amendatory Act of the 98th
4General Assembly are severable under Section 1.31 of the
5Statute on Statutes.
6(Source: P.A. 97-616, eff. 10-26-11; 97-646, eff. 12-30-11.)
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.".