Illinois General Assembly - 220 ILCS 5/ Public Utilities Act.

(220 ILCS 5/18-104)

Sec. 18-104. Terms and provisions of transitional funding orders.

(a) Each transitional funding order shall create and establish intangible transition property in an amount not to exceed the sum of (i) the rate base established by the Commission in the electric utility's last rate case prior to the effective date of this amendatory Act of 1997, plus (ii) any expenditures required to be undertaken by such electric utility by the provisions of Section 16-128 of this Act, including labor severance costs and employee retraining costs, plus (iii) amounts necessary to fund debt service and other reserves, commercially reasonable costs and fees necessary in connection with the marketing of the transitional funding instruments and grantee instruments, if any, plus (iv) commercially reasonable costs incurred from and after the effective date of this amendatory Act of 1997 or to be incurred which are associated with the issuance and collateralization of transitional funding instruments and grantee instruments, if any, plus (v) commercially reasonable costs incurred from and after the effective date of this amendatory Act of 1997 or to be incurred which are associated with issuance of such transitional funding instruments, including the costs incurred from and after the effective date of this amendatory Act of 1997, or to be incurred, in connection with transactions to recapitalize, refinance or retire stock and/or debt, any associated taxes and the costs incurred to obtain, collateralize, issue, service and/or administer transitional funding instruments and grantee instruments, if any, including interest and other related fees, costs and charges (all of the foregoing costs described in clauses (i) through (v) above to include any taxes, where applicable, to the extent the costs thereof would otherwise have been recoverable by an electric utility through rates for tariffed services under the Public Utilities Act as in effect prior to this amendatory Act of 1997), minus (vi) the amount of any intangible transition property previously created and established at the request of and for the benefit of such electric utility in a prior transitional funding order. The transitional funding order shall authorize (A) the sale, pledge, assignment or other transfer of, or the establishment, creation and granting of an electric utility's, assignee's or grantee's rights in and to, a specific dollar amount of intangible transition property (which amount may be in excess of the principal and interest payable on the transitional funding instruments and grantee instruments, if any, in order to provide for servicing costs and the funding or maintenance of debt service and other reserves as security to the holders of the transitional funding instruments), (B) the issuance of a specific dollar amount of grantee instruments or, if the transitional funding order does not provide for the issuance of grantee instruments, a specific dollar amount of transitional funding instruments, by or on behalf of an electric utility, assignee, issuer or grantee, as the case may be, and (C) the imposition and collection of a specific amount of instrument funding charges projected to be sufficient to pay when due the principal of and interest on the corresponding grantee instruments or, if the transitional funding order does not provide for the issuance of grantee instruments, the corresponding transitional funding instruments, in each case, together with premium, servicing fees and other fees, costs and charges related thereto, and to maintain any required reserves. Except as otherwise specifically set forth in the transitional funding order, the transitional funding instruments issued pursuant to such order shall be non-recourse to the credit or to any assets of the electric utility other than any assets comprising intangible transition property or grantee instruments, as applicable. The obligation of retail customers and other persons to pay instrument funding charges shall be contingent upon the receipt by such retail customers and other persons of electric power and energy, the kilowatt hours of which are included in the calculation of the dollar amount of such instrument funding charges, but the transitional funding order shall specifically provide that such instrument funding charges will not be subject to any defense, counterclaim or right of set off arising as a result of failure by the pertinent electric utility, upon whose application the intangible transition property was created, to perform or provide past, present or future services. For purposes of the foregoing sentence, an electric utility or alternative retail electric supplier obligated to pay transition charges under subsection (b) of Section 16-118 on behalf of certain retail customers shall be deemed to have received the electric power and energy provided to such retail customers. The transitional funding order shall also set forth the time to maturity for the grantee instruments or, if the transitional funding order does not provide for the issuance of grantee instruments, the time to maturity for the transitional funding instruments issued thereunder. Concurrently with the sale, pledge, assignment or other transfer of, or the establishment, creation and granting of an electric utility's, assignee's or grantee's rights in and to, intangible transition property and grantee instruments, if any, and the issuance of transitional funding instruments, an electric utility, grantee, issuer or an assignee shall begin to impose and collect the specified instrument funding charges from retail customers, classes of retail customers, and any other persons or groups of persons as set forth in the pertinent transitional funding order and shall file tariffs in accordance with subsection (j) of Section 18-104 of this Article.

(b) The transitional funding order shall require that the proceeds from the issuance of transitional funding instruments shall be used for the purposes set forth in subparagraph (1) of subsection (d) of Section 18-103 of this Article.

(c) Notwithstanding any other provision of law, neither the transitional funding order nor the intangible transition property created and established thereby nor the instrument funding charges authorized to be imposed and collected thereunder shall be subject to reduction, postponement, impairment or termination by any subsequent action of the Commission; provided, however, that nothing in this paragraph is intended to supersede any right of any party to the Commission's proceeding relating to the transitional funding order to seek judicial review of such transitional funding order.

(d) The Commission shall provide in any transitional funding order for a procedure for periodic adjustments to the instrument funding charges set forth therein in order to ensure the repayment in accordance with the projections set forth in the transitional funding order of all grantee instruments or, if such transitional funding order does not provide for the issuance of grantee instruments, the corresponding transitional funding instruments authorized therein and to reconcile the revenues received from instrument funding charges during the applicable adjustment period with the revenues projected to be received from such charges as set forth in the relevant transitional funding order. Unless the transitional funding order otherwise provides, such adjustments shall be required whenever the instrument funding charges actually collected during the applicable adjustment period by the appropriate party or parties were greater or less than the instrument funding charges projected in the relevant transitional funding order to be collected in such adjustment period; provided that, if so requested by an electric utility in any application for a transitional funding order, the transitional funding order may (i) specify a dollar or percentage amount of variation from the projected revenues within which no such adjustments will be required and/or (ii) set forth a maximum adjustment amount for the instrument funding charges. The electric utility (or such other party as may be specified in the pertinent transitional funding order) shall determine, within 90 days of the end of each adjustment period (or such shorter period as may be provided in the documents relating to the pertinent transitional funding instruments or grantee instruments, as applicable), whether any adjustments described above in this subsection (d) of Section 18-104 are required. If any such adjustments are so required, such adjustments shall be implemented by the electric utility, grantee, issuer or assignee, as applicable, with written notice to the Commission, within such 90-day period (or such shorter period as may be provided for in the documents relating to the pertinent transitional funding instruments or grantee instruments, as applicable). Any such adjustment shall be calculated to include amounts necessary for recovery of any additional costs incurred by the grantee, electric utility, assignee or issuer as a result of the relevant delay in collections of instrument funding charges. If, as a result of any adjustment, the amount of any instrument funding charge, as so adjusted, will exceed an amount per kilowatt-hour greater than the amount per kilowatt-hour of the instrument funding charge initially authorized by the Commission in its transitional funding order, then the relevant electric utility shall be obligated to file amendatory tariffs in compliance with subsection (k) of Section 18-104.

(e) Except where this Article specifically requires otherwise, the collection of instrument funding charges and the allocation of any such collections as among holders, assignees, issuers, grantees and any other parties entitled to receive portions thereof, may be accomplished according to the provisions set forth in the applicable transitional funding order, or, if the order is silent on any such matters, according to the provisions set forth in the documents relating to the pertinent transitional funding instruments or grantee instruments, as applicable. Notwithstanding the foregoing, the electric utility, grantee, issuer or assignee, as applicable, shall determine no later than 90 days after the stated maturity date of each series of grantee instruments or, if the related transitional funding order does not provide for the issuance of grantee instruments, the stated maturity date of transitional funding instruments, whether the aggregate amount of instrument funding charges collected prior to such stated maturity date exceeds the amount required to provide for the payment of all principal, interest, premium and servicing and other fees, costs and charges owing under such grantee instruments or transitional funding instruments, as the case may be. If it is determined that the aggregate amount of instrument funding charges collected exceeds the amount required to provide for the payment of all principal, interest, premium and servicing and other fees, costs and charges related to such grantee instruments or transitional funding instruments, as the case may be, such excess, together with any investment earnings thereon, shall be paid to the owner of the pertinent intangible transition property.

(f) Notwithstanding any other provision of law, on such conditions as the Commission may approve in the pertinent transitional funding order, the interest of an electric utility, assignee, issuer or grantee in intangible transition property or grantee instruments, as applicable, may be assigned, sold or otherwise transferred, in whole or in part, and may, in whole or in part, be pledged or assigned as security to or for the benefit of a holder or holders. To the extent that any such interest or portion thereof is assigned, sold or otherwise transferred or is established, created and granted to a grantee or is pledged or assigned as security, the Commission, in the pertinent transitional funding order, shall authorize the electric utility or any affiliate thereof to contract with the grantee, issuer, assignee or holders to collect the applicable instrument funding charges for the benefit and account of the grantee, issuer, assignee or holder, and such electric utility or affiliate will, except as otherwise specified in the transitional funding order, account for and remit the applicable instrument funding charge, without the obligation to remit any investment earnings thereon, to or for the account of the grantee, issuer, assignee or holder. The obligation of such electric utility or affiliate to collect and remit the applicable instrument funding charges hereunder shall continue irrespective of whether such electric utility is providing electric power and/or other services to the retail customers and other persons obligated to pay such instrument funding charges. If the documents creating the transitional funding instruments or grantee instruments, if any, so provide, such obligations shall, in the event of a default by such electric utility or affiliate in performing such obligations, be undertaken and performed by any other entity selected by the assignee or any holder, group of holders or trustee or agent on behalf of such holder or holders, as the case may be, (i) which provides electric power or services to a person that was a retail customer of such electric utility and (ii) from whom such electric utility is entitled to recover transition charges under Section 16-108; provided, however, that any failure by the designated party to perform such obligations shall not affect the existence of the intangible transition property or the instrument funding charges or the validity or enforceability of the instrument funding charges in accordance with their terms.

(g) In its transitional funding order, the Commission shall afford flexibility in establishing the terms and conditions of the transitional funding instruments and the grantee instruments, if any, including repayment schedules, collateral, required debt service and other reserves, interest rates and other financing costs and the ability of the electric utility, at its option, to effect a series of issuances of transitional funding instruments and grantee instruments and correlated assignments, sales, pledges or other transfers of intangible transition property and grantee instruments, if any, not to exceed the aggregate dollar amounts approved in the transitional funding order.

(h) The electric utility shall file a statement of the final terms of the issuance of any series of transitional funding instruments or grantee instruments, if any, with the Commission within 90 days of the receipt of proceeds from such issuance. In addition, the Commission may require the electric utility to file periodic reports on its use of the proceeds at intervals of not less than one year.

(i) Any adjustment to instrument funding charges that is necessary due to subsequent refinancing of transitional funding instruments or grantee instruments, if any, shall be authorized by the Commission in a supplemental order.

(j) In connection with the issuance of a transitional funding order and as a precondition to the imposition of any instrument funding charges authorized thereby, the relevant electric utility shall file tariffs directing that the amount of such instrument funding charges be deducted, stated, and collected separately from the amounts otherwise billed by such electric utility for base rates and transition charges and, where applicable, other rates for tariffed services as set forth in the transitional funding order. Upon the effectiveness of such tariff, the amounts of instrument funding charges thereby deducted and to be deducted shall have become intangible transition property as specified in the transitional funding order. The Commission shall have no authority to review such tariffs except to confirm that the instrument funding charges authorized in the transitional funding order have been deducted, stated, and collected separately from base rates and transition charges and, where applicable, other rates for tariffed services otherwise in effect at such time, and the filing of any such tariff may not be suspended for any other reason. No such deductions referred to in this subsection shall be construed as a change in or otherwise require a recalculation of the authorized amounts of such base rates, transition charges, and other rates for tariffed services under Section 16-102, 16-107, 16-108, or 16-110, as applicable. Instrument funding charges shall be recoverable with respect to electric power and energy or other services for which the deductions provided in this subsection have become effective and no such deduction shall be effective with respect to any services or power in respect of which instrument funding charges have not been so authorized and imposed.

(k) If any adjustment under subsection (d) of Section 18-104 results in the amount of any instrument funding charge as so adjusted exceeding an amount per kilowatt-hour greater than the amount per kilowatt-hour of the instrument funding charge initially authorized by the Commission in its transitional funding order, the relevant electric utility shall file amendatory tariffs reducing the amounts otherwise billed by such electric utility for base rates and transition charges or, where applicable, other rates for tariffed services, by the amount of such excess. Such amendatory tariff shall be subject to the provisions of subsection (j) of Section 18-104, except that (i) the failure of such amendatory tariff to become effective for any reason shall not delay or impair the effectiveness of the adjustments required under subsection (d) of Section 18-104 and (ii) the obligation of retail customers and other persons or groups of persons to pay instrument funding charges as so adjusted shall not be subject to any defense, counterclaim or right of set off arising as a result of failure by the pertinent electric utility to comply with this subsection (k) of Section 18-104. Nothing in this subsection (k) of Section 18-104 shall restrict any retail customer or other person from bringing any suit in any court or from exercising any other legal or equitable remedy against an electric utility for any failure by such electric utility to comply with this subsection (k) of Section 18-104.

(l) The intangible transition property created under a transitional funding order and the authority of the grantee, assignee, issuer, electric utility or other person authorized thereunder to impose and collect instrument funding charges shall continue beyond the final date set forth in the applicable transitional funding order until such time as all grantee instruments authorized in such order or, if the applicable transitional funding order does not provide for grantee instruments, the related transitional funding instruments authorized in such order, have been paid in full.

Upon the later of the final date set forth in the applicable transitional funding order for the imposition and collection of instrument funding charges or the repayment in full of any grantee instruments or transitional funding instruments, as applicable, authorized in such order, the authority to impose and collect the related instrument funding charges shall cease and the relevant electric utility shall be entitled to file tariffs revoking any deductions from base rates, transition charges or other rates for tariffed services which were granted in connection with such instrument funding charges pursuant to subsection (j) of Section 18-104 or subsection (k) of Section 18-104. The Commission shall have no authority to review such tariffs except to determine that the rates and charges resulting from such revocation do not exceed the applicable base rates, transition charges, or other rates for tariffed services which would otherwise have been in effect at the time of such revocation had no instrument funding charges ever been deducted therefrom.

(m) If so requested by an electric utility in its application for a transitional funding order, the Commission, in the relevant transitional funding order, may authorize (i) the issuance of grantee instruments and/or transitional funding instruments with expected maturity dates later than December 31, 2008 but not later than December 31, 2010 and (ii) the imposition and collection of instrument funding charges by electric utilities, grantees, or assignees later than December 31, 2008 but not later than December 31, 2010 if the electric utility includes in its application a pro forma calculation of the impact of the issuance of the transitional funding instruments or grantee instruments and the associated use of proceeds on the revenue requirement established by the Commission in the electric utility's last rate case, with such calculation to be presented for illustrative purposes only, and the Commission, in its review of the relevant application for the transitional funding order, finds that such action is in the public interest and that the instrument funding charges to be applied toward payment of transitional funding instruments after December 31, 2008 will be deducted, stated, and collected separately from base rates and, where applicable, other rates for tariffed services otherwise in effect at such time and as scheduled to be in effect through such expected maturity date.

(Source: P.A. 90-561, eff. 12-16-97.)

(220 ILCS 5/18-105)

Sec. 18-105. Intangible transition property.

(a) Notwithstanding any other provision of this Act or other law, the Commission is hereby authorized, in accordance with the application for a transitional funding order, to create, establish and grant rights in, to and under intangible transition property in and to any grantee, electric utility, issuer or assignee, and such party shall be granted the power to levy general tariffs on retail customers of an electric utility or any other person required to pay an instrument funding charge in order to collect the instrument funding charges related to the intangible transition property in which such party has been granted rights and in order to facilitate the issuance of transitional funding instruments and grantee instruments, if any, to, by or on behalf of electric utilities, grantees, issuers or assignees. The Commission shall be authorized to create, establish and grant such rights hereunder in and to such party with or without receiving consideration from such party.

(b) The State pledges to and agrees with the holders of any transitional funding instruments who may enter into contracts with an electric utility, grantee, assignee or issuer pursuant to this Article XVIII that the State will not in any way limit, alter, impair or reduce the value of intangible transition property created by, or instrument funding charges approved by, a transitional funding order so as to impair the terms of any contract made by such electric utility, grantee, assignee or issuer with such holders or in any way impair the rights and remedies of such holders until the pertinent grantee instruments or, if the related transitional funding order does not provide for the issuance of grantee instruments, the pertinent transitional funding instruments and interest, premium and other fees, costs and charges related thereto, as the case may be, are fully paid and discharged. Electric utilities, grantees and issuers are authorized to include these pledges and agreements of the State in any contract with the holders of transitional funding instruments or with any assignees pursuant to this Article XVIII and any assignees are similarly authorized to include these pledges and agreements of the State in any contract with any issuer, holder or any other assignee. Nothing in this Article XVIII shall preclude the State of Illinois from requiring adjustments as may otherwise be allowed by law to the electric utility's base rates, transition charges, delivery services charges, or other charges for tariffed services, so long as any such adjustment does not directly affect or impair any instrument funding charges previously authorized by a transitional funding order issued by the Commission.

(c) Transitional funding instruments and grantee instruments, if any, issued under this Article do not constitute debt or liability of the State or of any political subdivision thereof, and transitional funding orders authorizing such issuance do not constitute a pledge of the full faith and credit of the State or of any of its political subdivisions. The issuance of transitional funding instruments and grantee instruments, if any, under this Article shall not directly, indirectly or contingently obligate the State or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment, and any such transitional funding instruments and grantee instruments, if any, shall be payable solely from the intangible transition property or grantee instruments, as the case may be, or from such other proceeds or property as may be pledged therefor. Nothing in this Section shall be construed to prevent the State or any political subdivision thereof from owning any interest in a grantee, assignee or issuer or to prevent any electric utility, issuer, grantee or assignee from selling, pledging or assigning intangible transition property or grantee instruments, as the case may be, or from providing recourse or guarantees or any other third-party credit enhancement in connection with such sale, pledge or assignment.

(Source: P.A. 90-561, eff. 12-16-97.)

(220 ILCS 5/18-106)

Sec. 18-106. Grantee instruments.

(a) If an electric utility to which grantee instruments have been issued discontinues providing electric power and energy services prior to the maturity date of such grantee instruments, such electric utility shall not be entitled to receive any payment on such grantee instruments on and after the date of such discontinuance.

(b) Notwithstanding the provisions of subsection (a) of this Section, any assignee holding such grantee instruments or any holder of transitional funding instruments which are secured by such grantee instruments shall nevertheless be entitled to recover amounts payable by such grantee under such grantee instruments in accordance with their terms as if such electric utility had not discontinued the provision of electric power and energy.

(c) Notwithstanding any other provision of law, the issuance of any grantee instruments in accordance with the terms and provisions of a transitional funding order shall for all purposes be exempt from the application of Section 17-59 or Article 39 of the Criminal Code of 2012 or the Criminal Code of 1961 and the Interest Act.

(Source: P.A. 97-1150, eff. 1-25-13.)

(220 ILCS 5/18-107)

Sec. 18-107. Security interests in intangible transition property and grantee instruments.

(a) Notwithstanding any other provision of law, neither intangible transition property, grantee instruments nor any right, title or interest therein, shall constitute property in which a security interest may be created under the Uniform Commercial Code nor shall any such rights be deemed proceeds of any property which is not intangible transition property or grantee instruments, as the case may be. For purposes of the foregoing, the terms "account", "general intangible", "instrument", and "payment intangible" (as defined under Section 9-102 of the Uniform Commercial Code) shall, as used in the Uniform Commercial Code, be deemed to exclude any such intangible transition property, grantee instruments or any right, title, or interest therein.

(b) The granting, perfection and enforcement of security interests in intangible transition property or grantee instruments are governed by this Section rather than by Article 9 of the Uniform Commercial Code.

(c) A valid and enforceable security interest in intangible transition property and in grantee instruments shall attach and be perfected only by the means set forth below in this subsection (c) of Section 18-107:

(1) To the extent transitional funding instruments or grantee instruments are purported to be secured by intangible transition property or to the extent transitional funding instruments are purported to be secured by grantee instruments, as the case may be, as specified in the applicable transitional funding order, the lien of the transitional funding instruments and grantee instruments, if any, shall attach automatically to such intangible transition property and grantee instruments, if any, from the time of issuance of the transitional funding instruments and grantee instruments, if any. Such lien shall be a valid and enforceable security interest in the intangible transition property or the grantee instruments, as the case may be, securing the transitional funding instruments and grantee instruments, if any, and shall be continuously perfected if, before the date of issuance of the applicable transitional funding instruments or grantee instruments, if any, or within no more than 10 days thereafter, a filing has been made by or on behalf of the holder with the Chief Clerk of the Commission stating that such transitional funding instruments or grantee instruments, if any, have been issued. Any such filing made with the Commission in respect to such transitional funding instruments or grantee instruments shall take precedence over any subsequent filing except as may otherwise be provided in the applicable transitional funding order.

(2) The liens under subparagraph (1) are enforceable against the electric utility, any assignee, grantee or issuer, and all third parties, including judicial lien creditors, subject only to the rights of any third parties holding security interests in the intangible transition property or grantee instruments previously perfected in the manner described in this subsection if value has been given by the purchasers of transitional funding instruments or grantee instruments. A perfected lien in intangible transition property and grantee instruments, if any, is a continuously perfected security interest in all then existing or thereafter arising revenues and proceeds arising with respect to the associated intangible transition property or grantee instruments, as the case may be, whether or not the electric power and energy included in the calculation of such revenues and proceeds have been provided. The lien created under this subsection is perfected and ranks prior to any other lien, including any judicial lien, which subsequently attaches to the intangible transition property or grantee instruments, as the case may be, and to any other rights created by the transitional funding order or any revenues or proceeds of the foregoing. The relative priority of a lien created under this subsection is not defeated or adversely affected by changes to the transitional funding order or to the instrument funding charges payable by any retail customer, class of retail customers or other person or group of persons obligated to pay such charges.

(3) The relative priority of a lien created under this subsection is not defeated or adversely affected by the commingling of revenues arising with respect to intangible transition property or grantee instruments with funds of the electric utility or other funds of the assignee, issuer or grantee.

(4) If an event of default occurs under transitional funding instruments or grantee instruments, the holders thereof or their authorized representatives, as secured parties, may foreclose or otherwise enforce the lien in the grantee instruments or in the intangible transition property securing the transitional funding instruments or grantee instruments, as applicable, subject to the rights of any third parties holding prior security interests in the intangible transition property or grantee instruments previously perfected in the manner provided in this subsection. Upon application by the holders or their authorized representatives, without limiting their other remedies, the Commission shall order the sequestration and payment to the holders or their authorized representatives of revenues arising with respect to the intangible transition property or grantee instruments pledged to the holders. An order under this subsection shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the electric utility, grantee, assignee or issuer.

(5) The Commission shall maintain segregated records which reflect the date and time of receipt of all filings made under this subsection. The Commission may provide that transfers of intangible transition property or of grantee instruments be filed in accordance with the same system.

(Source: P.A. 90-561, eff. 12-16-97; 91-893, eff. 7-1-01.)

(220 ILCS 5/18-108)

Sec. 18-108. Characterization of transfer. A sale, assignment or other transfer of intangible transition property or grantee instruments which is expressly stated in the documents governing such transaction to be a sale or other absolute transfer, in a transaction approved in a transitional funding order, shall be treated as an absolute transfer of all of the transferor's right, title and interest in, to and under such intangible transition property or grantee instruments which places such transferred property beyond the reach of the transferor or its creditors, as in a true sale, and not as a pledge or other financing, of such intangible transition property or grantee instruments, as the case may be; provided, however, that whether or not such transfer is deemed to be a sale for federal tax purposes shall be governed by applicable law without regard to this Section 18-108. The characterization of any such transfer as an absolute transfer and the corresponding characterization of the transferee's property interest shall not be defeated or adversely affected by, among other things: (i) the commingling of revenues arising with respect to intangible transition property or grantee instruments, as the case may be, with funds of the electric utility or other funds of the assignee, issuer or grantee; (ii) granting to holders of transitional funding instruments a preferred right to the intangible transition property, whether direct or indirect; (iii) the provision by the electric utility, grantee, assignee, or issuer of any recourse, collateral or credit enhancement with respect to transitional funding instruments or grantee instruments, as the case may be; (iv) the retention by the assigning party of a partial interest in any intangible transition property, whether direct or indirect, or whether subordinate or otherwise; or (v) the electric utility's responsibilities for collecting instrument funding charges and any retention of bare legal title for the purpose of such collection activities; provided, however, that nothing in this Section 18-108 is intended to preclude consideration of such provisions in determining whether or not such transfer is deemed to be a sale for federal tax purposes under other applicable law. A sale, assignment, or other transfer of intangible transition property or grantee instruments, as the case may be, shall be deemed perfected as against third persons, including any judicial lien creditors, when all of the following have taken place:

(1) The Commission has issued the transitional funding order creating the intangible transition property; and

(2) A sale, assignment or transfer of the intangible transition property or grantee instruments, as the case may be, has been executed and delivered in writing by the electric utility.

(Source: P.A. 90-561, eff. 12-16-97.)

(220 ILCS 5/18-109)

Sec. 18-109. Actions with respect to intangible transition property and related instrument funding charges.

(a) Notwithstanding any other provision of this Act or other law, any electric utility, issuer, assignee, grantee or holder shall be expressly permitted hereby to bring action against a retail customer or other person for nonpayment of any instrument funding charges constituting a part of the intangible transition property then held by such electric utility, issuer, assignee, grantee or holder. Notwithstanding any other provision of this Act, any such action shall be subject to any and all applicable consumer credit protection laws and other laws relating to origination, collection and reporting of consumer credit obligations.

(b) Notwithstanding any other provision of this Act or other law, the Commission shall have exclusive jurisdiction over any dispute arising out of the obligations to impose and collect instrument funding charges of an electric utility, its successor or any other entity which provides electric power or energy or delivery services to a person from whom the electric utility is authorized to recover transition charges under Section 16-108. Nothing in this Section shall prevent holders from bringing any suit in any court or from exercising any other legal or equitable remedy against an electric utility for failure to distribute collections of instrument funding charges from retail customers, classes of retail customers or other persons or from bringing suit against an electric utility for damages arising from any failure by such electric utility to perform the contractual obligations agreed to by it under any documents pertaining to or executed in connection with the transitional funding instruments issued by or on behalf of such electric utility.

(Source: P.A. 90-561, eff. 12-16-97.)

(220 ILCS 5/18-110)

Sec. 18-110. Taxation of transfers of intangible transition property and grantee instruments.

(a) Any sale, pledge, assignment or other transfer of intangible transition property and grantee instruments, if any, shall be exempt from any State or local sales, income, transfers, gains, receipts or similar taxes.

(b) Any transfer of intangible transition property and grantee instruments, if any, shall be treated as a pledge or other financing for State tax purposes, including State and local income and franchise taxes, unless the documents governing such transfer specifically state that the transfer is intended to be treated otherwise.

(Source: P.A. 90-561, eff. 12-16-97.)

(220 ILCS 5/18-111)

Sec. 18-111. Limitations on issuance of transitional funding orders, collection of instrument funding charges, and use of proceeds from issuance of transitional funding instruments and grantee instruments.

Notwithstanding any other provisions of this Article XVIII:

(1) The Commission shall be prohibited from issuing any transitional funding order prior to January 1, 1998, and no electric utility shall issue any transitional funding instrument or grantee instrument, prior to August 1, 1998, or after December 31, 2004.

(2) The Commission shall be authorized to include in any transitional funding order an expiration date after which date the electric utility shall no longer be authorized to issue transitional funding instruments or grantee instruments pursuant to such order, provided, that any such expiration date specified in a transitional funding order shall be no earlier than 24 months following the date of issuance of the relevant transitional funding order.

(3) No electric utility shall be allowed to increase its rates for tariffed services, including delivery charges, or its transition charges, above the level or levels which would have been allowed in accordance with this Act if the electric utility were not authorized to impose and collect instrument funding charges.

(4) Any transitional funding order issued by the Commission shall set forth, based on the information set forth in the electric utility's application, the procedures to be followed by the electric utility for assuring that proceeds from the issuance of the transitional funding instruments or grantee instruments authorized by such order are applied in accordance with the terms of the order. Any use by an electric utility of the proceeds from issuance of transitional funding instruments or grantee instruments other than in accordance with the purposes specified in the relevant transitional funding order of the Commission, pursuant to subsection (d) of Section 18-103, shall be void.

(Source: P.A. 90-561, eff. 12-16-97.)

(220 ILCS 5/Art. XIX heading) ARTICLE XIX. ALTERNATIVE GAS SUPPLIER LAW

(220 ILCS 5/19-100)

Sec. 19-100. Short title. This Article may be cited as the Alternative Gas Supplier Law.

(Source: P.A. 92-529, eff. 2-8-02.)

(220 ILCS 5/19-105)

Sec. 19-105. Definitions. For the purposes of this Article, the following terms shall be defined as set forth in this Section.

"Alternative gas supplier" means every person, cooperative, corporation, municipal corporation, company, association, joint stock company or association, firm, partnership, individual, or other entity, their lessees, trustees, or receivers appointed by any court whatsoever, that offers gas for sale, lease, or in exchange for other value received to one or more customers, or that engages in the furnishing of gas to one or more customers, and shall include affiliated interests of a gas utility, resellers, aggregators and marketers, but shall not include (i) gas utilities (or any agent of the gas utility to the extent the gas utility provides tariffed services to customers through an agent); (ii) public utilities that are owned and operated by any political subdivision, public institution of higher education or municipal corporation of this State, or public utilities that are owned by a political subdivision, public institution of higher education, or municipal corporation and operated by any of its lessees or operating agents; (iii) natural gas cooperatives that are not-for-profit corporations operated for the purpose of administering, on a cooperative basis, the furnishing of natural gas for the benefit of their members who are consumers of natural gas; and (iv) the ownership or operation of a facility that sells compressed natural gas at retail to the public for use only as a motor vehicle fuel and the selling of compressed natural gas at retail to the public for use only as a motor vehicle fuel.

"Gas utility" means a public utility, as defined in Section 3-105 of this Act, that has a franchise, license, permit, or right to furnish or sell gas or transportation services to customers within a service area.

"Residential customer" means a customer who receives gas utility service for household purposes distributed to a dwelling of 2 or fewer units which is billed under a residential rate or gas utility service for household purposes distributed to a dwelling unit or units which is billed under a residential rate and is registered by a separate meter for each dwelling unit.

"Sales agent" means any employee, agent, independent contractor, consultant, or other person that is engaged by the alternative gas supplier to solicit customers to purchase, enroll in, or contract for alternative gas service on behalf of an alternative gas supplier.

"Service area" means (i) the geographic area within which a gas utility was lawfully entitled to provide gas to customers as of the effective date of this amendatory Act of the 92nd General Assembly and includes (ii) the location of any customer to which the gas utility was lawfully providing gas utility services on such effective date.

"Single billing" means the combined billing of the services provided by both a natural gas utility and an alternative gas supplier to any customer who has enrolled in a customer choice program.

"Small commercial customer" means a nonresidential retail customer of a natural gas utility who consumed 5,000 or fewer therms of natural gas during the previous year; provided that any alternative gas supplier may remove the customer from designation as a "small commercial customer" if the customer consumes more than 5,000 therms of natural gas in any calendar year after becoming a customer of the alternative gas supplier. In determining whether a customer has consumed 5,000 or fewer therms of natural gas during the previous year, usage by the same commercial customer shall be aggregated to include usage at the same premises even if measured by more than one meter, and to include usage at multiple premises. Nothing in this Section creates an affirmative obligation on a gas utility to monitor or inform customers or alternative gas suppliers as to a customer's status as a small commercial customer as that term is defined herein. Nothing in this Section relieves a gas utility from any obligation to provide information upon request to a customer, alternative gas supplier, the Commission, or others necessary to determine whether a customer meets the classification of small commercial customers as that term is defined herein.

"Tariffed service" means a service provided to customers by a gas utility as defined by its rates on file with the Commission pursuant to the provisions of Article IX of this Act.

"Transportation services" means those services provided by the gas utility that are necessary in order for the storage, transmission and distribution systems to function so that customers located in the gas utility's service area can receive gas from suppliers other than the gas utility and shall include, without limitation, standard metering and billing services.

(Source: P.A. 95-1051, eff. 4-10-09; 96-435, eff. 1-1-10; 96-1000, eff. 7-2-10.)

(220 ILCS 5/19-110)

Sec. 19-110. Certification of alternative gas suppliers.

(a) The provisions of this Section shall apply only to alternative gas suppliers serving or seeking to serve residential or small commercial customers and only to the extent such alternative gas suppliers provide services to residential or small commercial customers.

(b) An alternative gas supplier must obtain a certificate of service authority from the Commission in accordance with this Section before serving any customer or other user located in this State. An alternative gas supplier may request, and the Commission may grant, a certificate of service authority for the entire State or for a specified geographic area of the State. A certificate granted pursuant to this Section is not property, and the grant of a certificate to an entity does not create a property interest in the certificate. This Section does not diminish the existing rights of a certificate holder to notice and hearing as proscribed by the Illinois Administrative Procedure Act and in rules adopted by the Commission. A person, corporation, or other entity acting as an alternative gas supplier on the effective date of this amendatory Act of the 92nd General Assembly shall have 180 days from the effective date of this amendatory Act of the 92nd General Assembly to comply with the requirements of this Section in order to continue to operate as an alternative gas supplier.

(c) An alternative gas supplier seeking a certificate of service authority shall file with the Commission a verified application containing information showing that the applicant meets the requirements of this Section. The alternative gas supplier shall publish notice of its application in the official State newspaper within 10 days following the date of its filing. No later than 45 days after a complete application is properly filed with the Commission, and such notice is published, the Commission shall issue its order granting or denying the application.

(d) An application for a certificate of service authority shall identify the area or areas in which the applicant intends to offer service and the types of services it intends to offer. Applicants that seek to serve residential or small commercial customers within a geographic area that is smaller than a gas utility's service area shall submit evidence demonstrating that the designation of this smaller area does not violate Section 19-115. An applicant may state in its application for certification any limitations that will be imposed on the number of customers or maximum load to be served. The applicant shall submit as part of its application a statement indicating:

(1) Whether the applicant has been denied a natural gas supplier license in any state in the United States.

(2) Whether the applicant has had a natural gas supplier license suspended or revoked by any state in the United States.

(3) Where, if any, other natural gas supplier license applications are pending in the United States.

(4) Whether the applicant is the subject of any lawsuits filed in a court of law or formal complaints filed with a regulatory agency alleging fraud, deception, or unfair marketing practices, or other similar allegations, identifying the name, case number, and jurisdiction of each such lawsuit or complaint.

For the purposes of this subsection (d), formal complaints include only those complaints that seek a binding determination from a state or federal regulatory body.

(e) The Commission shall grant the application for a certificate of service authority if it makes the findings set forth in this subsection based on the verified application and such other information as the applicant may submit.

(1) That the applicant possesses sufficient technical, financial, and managerial resources and abilities to provide the service for which it seeks a certificate of service authority. In determining the level of technical, financial, and managerial resources and abilities which the applicant must demonstrate, the Commission shall consider:

(A) the characteristics, including the size and financial sophistication of the customers that the applicant seeks to serve;

(B) whether the applicant seeks to provide gas using property, plant, and equipment that it owns, controls, or operates; and

(C) the applicant's commitment of resources to the management of sales and marketing staff, through affirmative managerial policies, independent audits, technology, hands-on field monitoring and training, and, in the case of applicants who will have sales personnel or sales agents within the State of Illinois, the applicant's managerial presence within the State.

(2) That the applicant will comply with all applicable federal, State, regional, and industry rules, policies, practices, and procedures for the use, operation, and maintenance of the safety, integrity, and reliability of the gas transmission system.

(3) That the applicant will comply with such informational or reporting requirements as the Commission may by rule establish.

(4) That the area to be served by the applicant and any limitations it proposes on the number of customers or maximum amount of load to be served meet the provisions of Section 19-115, provided, that if the applicant seeks to serve an area smaller than the service area of a gas utility or proposes other limitations on the number of customers or maximum amount of load to be served, the Commission can extend the time for considering such a certificate request by up to 90 days, and can schedule hearings on such a request.

(5) That the applicant shall continue to comply with requirements for certification stated in this Section.

(6) That the applicant shall execute and maintain a license or permit bond issued by a qualifying surety or insurance company authorized to transact business in the State of Illinois in favor of the People of the State of Illinois. The amount of the bond shall equal $150,000 if the applicant seeks to serve only nonresidential retail customers or $500,000 if the applicant seeks to serve all eligible customers. Applicants shall be required to submit an additional $500,000 bond if the applicant intends to market to residential customers using in-person solicitations. The bonds shall be conditioned upon the full and faithful performance of all duties and obligations of the applicant as an alternative retail gas supplier, shall be valid for a period of not less than one year, and may be drawn up to satisfy any penalties imposed and finally adjudicated, by the Commission pursuant to Section 19-120 for a violation of the applicant's duties or obligations, except that the total amount of claims and penalties against the bond shall not exceed the penal sum of the bond and shall not include any consequential or punitive damage. The cost of the bond shall be paid by the applicant. The applicant shall file a copy of this bond, with a notarized verification page from the issuer, as part of its application for certification under 83 Ill. Adm. Code 551.

(7) That the applicant will comply with all other applicable laws and rules.

(e-5) The Commission may deny with prejudice an application in which the applicant fails to provide the Commission with information sufficient for the Commission to grant the application.

(f) The Commission can extend the time for considering such a certificate request by up to 90 days, and can schedule hearings on such a request if:

(1) a party to the application proceeding has formally requested that the Commission hold hearings in a pleading that alleges that one or more of the allegations or certifications in the application is false or misleading; or

(2) other facts or circumstances exist that will necessitate additional time or evidence in order to determine whether a certificate should be issued.

(g) The Commission shall have the authority to promulgate rules to carry out the provisions of this Section. Within 30 days after the effective date of this amendatory Act of the 92nd General Assembly, the Commission shall adopt an emergency rule or rules applicable to the certification of those gas suppliers that seek to serve residential customers. Within 180 days of the effective date of this amendatory Act of the 92nd General Assembly, the Commission shall adopt rules that specify criteria which, if met by any such alternative gas supplier, shall constitute the demonstration of technical, financial, and managerial resources and abilities to provide service required by paragraph (1) of subsection (e) of this Section, such as a requirement to post a bond or letter of credit, from a responsible surety or financial institution, of sufficient size for the nature and scope of the services to be provided, demonstration of adequate insurance for the scope and nature of the services to be provided, and experience in providing similar services in other jurisdictions.

(h) The Commission may deny with prejudice any application that repeatedly fails to include the attachments, documentation, and affidavits required by the application form or that fails to provide any other information required by this Section.

(i) An alternative gas supplier may seek confidential treatment for the reporting to the Commission of its total annual dekatherms delivered and sold by it to residential and small commercial customers by utility service territory during the preceding year via the filing of an affidavit with the Commission so long as the affidavit meets the requirements of this subsection (i). The affidavit must be filed contemporaneously with the information for which confidential treatment is sought and must clearly state that the affiant seeks confidential treatment pursuant to this subsection (i) and the information for which confidential treatment is sought must be clearly identified on the confidential version of the document filed with the Commission. The affidavit must be accompanied by both a "confidential" and a "public" version of the document or documents containing the information for which confidential treatment is sought.

If the alternative gas supplier has met the affidavit requirements of this subsection (i), then the Commission shall afford confidential treatment to the information identified in the affidavit for a period of 2 years after the date the affidavit is received by the Commission.

Nothing in this subsection (i) prevents an alternative gas supplier from filing a petition with the Commission seeking confidential treatment for information beyond that identified in this subsection (i) or for information contained in other reports or documents filed with the Commission other than annual rate reports.

Nothing in this subsection (i) prevents the Commission, on its own motion, or any party from filing a formal petition with the Commission seeking to reconsider the conferring of confidential status pursuant to this subsection (i).

The Commission, on its own motion, may at any time initiate a docketed proceeding to investigate the continued applicability of this affidavit-based process for seeking confidential treatment. If, at the end of such investigation, the Commission determines that this affidavit-based process for seeking confidential treatment for the information is no longer necessary, the Commission may enter an order to that effect. Notwithstanding any such order, in the event the Commission makes such a determination, nothing in this subsection (i) prevents an alternative gas supplier desiring confidential treatment for such information from filing a formal petition with the Commission seeking confidential treatment for such information.

(Source: P.A. 101-590, eff. 1-1-20; 102-958, eff. 1-1-23.)

(220 ILCS 5/19-111)

Sec. 19-111. Material changes in business.

(a) The provisions of this Section shall apply only to alternative gas suppliers serving or seeking to serve residential or small commercial customers and only to the extent such alternative gas suppliers provide services to residential or small commercial customers.

(b) Alternative gas suppliers shall file with the Commission a notification of any material change to the information supplied in a certification application within 30 days of such material change.

(1) An alternative gas supplier shall file such notice under the docket number assigned to the alternative gas supplier's certification application, whichever is the most recent. The supplier shall also serve such notice upon the gas utility company serving customers in the service area where the alternative gas supplier is certified to provide service.

(2) After notice and an opportunity for a hearing, the Commission may (i) suspend, rescind, or conditionally rescind an alternative gas supplier's certificate if it determines that the material change will adversely affect the alternative gas supplier's fitness or ability to provide the services for which it is certified or (ii) require the alternative gas supplier to provide reasonable financial assurances sufficient to protect their customers and gas utilities from default.

(c) Material changes to the information contained in or supplied with a certification application include, but are not limited to, the following:

(1) Any significant change in ownership (an ownership interest of 5% or more) of the applicant or alternative gas supplier.

(2) An affiliation with any gas utility or change of an affiliation with a gas utility in this State.

(3) Retirement or other long-term changes to the operational status of supply resources relied upon by the alternative gas supplier to provide alternative gas service. Changes in the volume of supply from any given supply resource replaced by a comparable supply resource do not need to be reported.

(4) Revocation, restriction, or termination of any interconnection or service agreement with a pipeline company or natural gas company relied upon by an alternative gas supplier to provide alternative retail natural gas service, but only if such revocation, restriction, or termination creates a situation in which the alternative gas supplier does not meet the tariffed capacity requirements of the relevant Illinois natural gas utility or utilities.

(5) If the alternative gas supplier has a long-term bond rating from Standard & Poor's or its successor, or Fitch Ratings or its successor, or Moody's Investor Service or its successor, and the alternative gas supplier's long-term bond rating falls below BBB as reported by Standard & Poor's or its successor or Fitch Ratings or its successor or below Baa3 as reported by Moody's Investors Service or its successor.

(6) The applicant or alternative gas supplier has or intends to file for reorganization, protection from creditors, or any other form of bankruptcy with any court.

(7) Any judgment, finding, or ruling by a court or regulatory agency that could affect an alternative gas supplier's fitness or ability to provide service in this State.

(8) Any change in the alternative gas supplier's name or logo, including without limitation any change in the alternative gas supplier's legal name, fictitious names, or assumed business names, except for logos and names the alternative gas supplier provided as part of its original certification process or that the alternative gas supplier previously provided to the Commission under this Section.

(Source: P.A. 95-1051, eff. 4-10-09.)

(220 ILCS 5/19-112)

Sec. 19-112. Managerial resources.

(a) An alternative gas supplier must maintain sufficient managerial resources and abilities to provide the service for which it has a certificate of service authority. In determining the level of managerial resources and abilities that the alternative gas supplier must demonstrate, the Commission shall consider, in addition to the requirements in Section 19-110(e)(1), the following:

(1) complaints to the Commission by consumers regarding the alternative gas supplier, including those that reflect on the alternative gas supplier's ability to properly manage solicitation and authorization; and

(2) the alternative gas supplier's involvement in the Commission's consumer complaint process, including the resources the alternative gas supplier dedicates to the process and the alternative gas supplier's ability to manage the issues raised by complaints, and the resolutions of the complaints.

(b) The provisions of this Section shall apply only to alternative gas suppliers serving or seeking to serve residential or small commercial customers and only to the extent such alternative gas suppliers provide services to residential or small commercial customers, unless otherwise noted.

(Source: P.A. 95-1051, eff. 4-10-09; 96-1000, eff. 7-2-10.)