Illinois General Assembly - Full Text of HB3941
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Full Text of HB3941  102nd General Assembly

HB3941 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3941

 

Introduced 2/22/2021, by Rep. Joyce Mason

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/9-220.3

    Amends the Public Utilities Act. Changes the repeal date for provisions authorizing natural gas surcharges to provide for recovery of costs associated with investments in qualifying infrastructure plants from December 31, 2023 to January 1, 2022.


LRB102 11274 SPS 16607 b

 

 

A BILL FOR

 

HB3941LRB102 11274 SPS 16607 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Public Utilities Act is amended by changing
5Section 9-220.3 as follows:
 
6    (220 ILCS 5/9-220.3)
7    (Section scheduled to be repealed on December 31, 2023)
8    Sec. 9-220.3. Natural gas surcharges authorized.
9    (a) Tariff.
10        (1) Pursuant to Section 9-201 of this Act, a natural
11    gas utility serving more than 700,000 customers may file a
12    tariff for a surcharge which adjusts rates and charges to
13    provide for recovery of costs associated with investments
14    in qualifying infrastructure plant, independent of any
15    other matters related to the utility's revenue
16    requirement.
17        (2) Within 30 days after the effective date of this
18    amendatory Act of the 98th General Assembly, the
19    Commission shall adopt emergency rules to implement the
20    provisions of this amendatory Act of the 98th General
21    Assembly. The utility may file with the Commission tariffs
22    implementing the provisions of this amendatory Act of the
23    98th General Assembly after the effective date of the

 

 

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1    emergency rules authorized by subsection (i).
2        (3) The Commission shall issue an order approving, or
3    approving with modification to ensure compliance with this
4    Section, the tariff no later than 120 days after such
5    filing of the tariffs filed pursuant to this Section. The
6    utility shall have 7 days following the date of service of
7    the order to notify the Commission in writing whether it
8    will accept any modifications so identified in the order
9    or whether it has elected not to proceed with the tariff.
10    If the order includes no modifications or if the utility
11    notifies the Commission that it will accept such
12    modifications, the tariff shall take effect on the first
13    day of the calendar year in which the Commission issues
14    the order, subject to petitions for rehearing and
15    appellate procedures. After the tariff takes effect, the
16    utility may, upon 10 days' notice to the Commission, file
17    to withdraw the tariff at any time, and the Commission
18    shall approve such filing without suspension or hearing,
19    subject to a final reconciliation as provided in
20    subsection (e) of this Section.
21        (4) When a natural gas utility withdraws the surcharge
22    tariff, the utility shall not recover any additional
23    charges through the surcharge approved pursuant to this
24    Section, subject to the resolution of the final
25    reconciliation pursuant to subsection (e) of this Section.
26    The utility's qualifying infrastructure investment net of

 

 

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1    accumulated depreciation may be transferred to the natural
2    gas utility's rate base in the utility's next general rate
3    case. The utility's delivery base rates in effect upon
4    withdrawal of the surcharge tariff shall not be adjusted
5    at the time the surcharge tariff is withdrawn.
6        (5) A natural gas utility that is subject to its
7    delivery base rates being fixed at their current rates
8    pursuant to a Commission order entered in Docket No.
9    11-0046, notwithstanding the effective date of its tariff
10    authorized pursuant to this Section, shall reflect in a
11    tariff surcharge only those projects placed in service
12    after the fixed rate period of the merger agreement has
13    expired by its terms.
14    (b) For purposes of this Section, "qualifying
15infrastructure plant" includes only plant additions placed in
16service not reflected in the rate base used to establish the
17utility's delivery base rates. "Costs associated with
18investments in qualifying infrastructure plant" shall include
19a return on qualifying infrastructure plant and recovery of
20depreciation and amortization expense on qualifying
21infrastructure plant, net of the depreciation included in the
22utility's base rates on any plant retired in conjunction with
23the installation of the qualifying infrastructure plant.
24Collectively the "qualifying infrastructure plant" and "costs
25associated with investments in qualifying infrastructure
26plant" are referred to as the "qualifying infrastructure

 

 

HB3941- 4 -LRB102 11274 SPS 16607 b

1investment" and that are related to one or more of the
2following:
3        (1) the installation of facilities to retire and
4    replace underground natural gas facilities, including
5    facilities appurtenant to facilities constructed of those
6    materials such as meters, regulators, and services, and
7    that are constructed of cast iron, wrought iron, ductile
8    iron, unprotected coated steel, unprotected bare steel,
9    mechanically coupled steel, copper, Cellulose Acetate
10    Butyrate (CAB) plastic, pre-1973 DuPont Aldyl "A"
11    polyethylene, PVC, or other types of materials identified
12    by a State or federal governmental agency as being prone
13    to leakage;
14        (2) the relocation of meters from inside customers'
15    facilities to outside;
16        (3) the upgrading of the gas distribution system from
17    a low pressure to a medium pressure system, including
18    installation of high-pressure facilities to support the
19    upgrade;
20        (4) modernization investments by a combination
21    utility, as defined in subsection (b) of Section 16-108.5
22    of this Act, to install:
23            (A) advanced gas meters in connection with the
24        installation of advanced electric meters pursuant to
25        Sections 16-108.5 and 16-108.6 of this Act; and
26            (B) the communications hardware and software and

 

 

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1        associated system software that creates a network
2        between advanced gas meters and utility business
3        systems and allows the collection and distribution of
4        gas-related information to customers and other parties
5        in addition to providing information to the utility
6        itself;
7        (5) replacing high-pressure transmission pipelines and
8    associated facilities identified as having a higher risk
9    of leakage or failure or installing or replacing
10    high-pressure transmission pipelines and associated
11    facilities to establish records and maximum allowable
12    operating pressures;
13        (6) replacing difficult to locate mains and service
14    pipes and associated facilities; and
15        (7) replacing or installing transmission and
16    distribution regulator stations, regulators, valves, and
17    associated facilities to establish over-pressure
18    protection.
19    With respect to the installation of the facilities
20identified in paragraph (1) of subsection (b) of this Section,
21the natural gas utility shall determine priorities for such
22installation with consideration of projects either: (i)
23integral to a general government public facilities improvement
24program or (ii) ranked in the highest risk categories in the
25utility's most recent Distribution Integrity Management Plan
26where removal or replacement is the remedial measure.

 

 

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1    (c) Qualifying infrastructure investment, defined in
2subsection (b) of this Section, recoverable through a tariff
3authorized by subsection (a) of this Section, shall not
4include costs or expenses incurred in the ordinary course of
5business for the ongoing or routine operations of the utility,
6including, but not limited to:
7        (1) operating and maintenance costs; and
8        (2) costs of facilities that are revenue-producing,
9    which means facilities that are constructed or installed
10    for the purpose of serving new customers.
11    (d) Gas utility commitments. A natural gas utility that
12has in effect a natural gas surcharge tariff pursuant to this
13Section shall:
14        (1) recognize that the General Assembly identifies
15    improved public safety and reliability of natural gas
16    facilities as the cornerstone upon which this Section is
17    designed, and qualifying projects should be encouraged,
18    selected, and prioritized based on these factors; and
19        (2) provide information to the Commission as requested
20    to demonstrate that (i) the projects included in the
21    tariff are indeed qualifying projects and (ii) the
22    projects are selected and prioritized taking into account
23    improved public safety and reliability.
24        (3) The amount of qualifying infrastructure investment
25    eligible for recovery under the tariff in the applicable
26    calendar year is limited to the lesser of (i) the actual

 

 

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1    qualifying infrastructure plant placed in service in the
2    applicable calendar year and (ii) the difference by which
3    total plant additions in the applicable calendar year
4    exceed the baseline amount, and subject to the limitation
5    in subsection (g) of this Section. A natural gas utility
6    can recover the costs of qualifying infrastructure
7    investments through an approved surcharge tariff from the
8    beginning of each calendar year subject to the
9    reconciliation initiated under paragraph (2) of subsection
10    (e) of this Section, during which the Commission may make
11    adjustments to ensure that the limits defined in this
12    paragraph are not exceeded. Further, if total plant
13    additions in a calendar year do not exceed the baseline
14    amount in the applicable calendar year, the Commission,
15    during the reconciliation initiated under paragraph (2) of
16    subsection (e) of this Section for the applicable calendar
17    year, shall adjust the amount of qualifying infrastructure
18    investment eligible for recovery under the tariff to zero.
19        (4) For purposes of this Section, "baseline amount"
20    means an amount equal to the utility's average of total
21    depreciation expense, as reported on page 336, column (b)
22    of the utility's ILCC Form 21, for the calendar years 2006
23    through 2010.
24    (e) Review of investment.
25        (1) The amount of qualifying infrastructure investment
26    shall be shown on an Information Sheet supplemental to the

 

 

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1    surcharge tariff and filed with the Commission monthly or
2    some other time period at the option of the utility. The
3    Information Sheet shall be accompanied by data showing the
4    calculation of the qualifying infrastructure investment
5    adjustment. Unless otherwise ordered by the Commission,
6    each qualifying infrastructure investment adjustment shown
7    on an Information Sheet shall become effective pursuant to
8    the utility's approved tariffs.
9        (2) For each calendar year in which a surcharge tariff
10    is in effect, the natural gas utility shall file a
11    petition with the Commission to initiate hearings to
12    reconcile amounts billed under each surcharge authorized
13    pursuant to this Section with the actual prudently
14    incurred costs recoverable under this tariff in the
15    preceding year. The petition filed by the natural gas
16    utility shall include testimony and schedules that support
17    the accuracy and the prudence of the qualifying
18    infrastructure investment for the calendar year being
19    reconciled. The petition filed shall also include the
20    number of jobs attributable to the natural gas surcharge
21    tariff as required by rule. The review of the utility's
22    investment shall include identification and review of all
23    plant that was ranked within the highest risk categories
24    in that utility's most recent Distribution Integrity
25    Management Plan.
26    (f) The rate of return applied shall be the overall rate of

 

 

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1return authorized by the Commission in the utility's last gas
2rate case.
3    (g) The cumulative amount of increases billed under the
4surcharge, since the utility's most recent delivery service
5rate order, shall not exceed an annual average 4% of the
6utility's delivery base rate revenues, but shall not exceed
75.5% in any given year. On the effective date of new delivery
8base rates, the surcharge shall be reduced to zero with
9respect to qualifying infrastructure investment that is
10transferred to the rate base used to establish the utility's
11delivery base rates, provided that the utility may continue to
12charge or refund any reconciliation adjustment determined
13pursuant to subsection (e) of this Section.
14    (h) If a gas utility obtains a surcharge tariff under this
15Section 9-220.3, then it and its affiliates are excused from
16the rate case filing requirements contained in Sections
179-220(h) and 9-220(h-1). In the event a natural gas utility,
18prior to the effective date of this amendatory Act of the 98th
19General Assembly, made a rate case filing that is still
20pending on the effective date of this amendatory Act of the
2198th General Assembly, the natural gas utility may, at the
22time it files its surcharge tariff with the Commission, also
23file a notice with the Commission to withdraw its rate case
24filing. Any affiliate of such natural gas utility may also
25file to withdraw its rate case filing. Upon receipt of such
26notice, the Commission shall dismiss the rate case filing with

 

 

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1prejudice and such tariffs and the record related thereto
2shall not be the subject of any further hearing,
3investigation, or proceeding of any kind related to rates for
4gas delivery services. Notwithstanding the foregoing, a
5natural gas utility shall not be permitted to withdraw a rate
6case filing for which a proposed order recommending a rate
7reduction is pending. A natural gas utility shall not be
8permitted to withdraw the gas delivery services tariffs that
9are the subject of Commission Docket Nos. 12-0511/12-0512
10(cons.). None of the costs incurred for the withdrawn rate
11case are recoverable from ratepayers.
12    (i) The Commission shall promulgate rules and regulations
13to carry out the provisions of this Section under the
14emergency rulemaking provisions set forth in Section 5-45 of
15the Illinois Administrative Procedure Act, and such emergency
16rules shall be effective no later than 30 days after the
17effective date of this amendatory Act of the 98th General
18Assembly.
19    (j) This Section is repealed January 1, 2022 December 31,
202023.
21(Source: P.A. 98-57, eff. 7-5-13.)