Illinois General Assembly - Full Text of HR1157
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Full Text of HR1157  97th General Assembly



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2    AMENDMENT NO. ___. Amend House Resolution 1157 by replacing
3everything after the title with the following:
4    "WHEREAS, The 97th Illinois General Assembly passed Senate
5Bill 1652 and House Bill 3036 with supermajority votes in both
6legislative chambers; Senate Bill 1652 became law on October
726, 2011 as Public Act 97-616 and House Bill 3036 became law on
8December 30, 2011 as Public Act 97-646; and
9    WHEREAS, Public Act 97-616, which is commonly referred to
10as the Energy Infrastructure Modernization Act, confers
11substantial benefits upon the State's electric utility
12customers; it established detailed infrastructure investment
13plans to modernize and upgrade the State's aging electric grid
14in order to ensure the continued provision of safe, reliable,
15and affordable service to Illinoisans; participating utilities
16that elect to undertake the infrastructure investment plan may



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1recover their costs through a performance-based formula rate
2tariff mechanism, which was designed to increase
3predictability, stability, and transparency in the ratemaking
4process; and
5    WHEREAS, Public Act 97-646 was enacted as "trailer
6legislation" to Public Act 97-616 with the intent to amend the
7Energy Infrastructure Modernization Act to provide additional
8benefits to customers; and
9    WHEREAS, To make this investment possible, the
10performance-based formula rate tariff must, among other
11things, establish and set forth certain protocols providing
12that participating utilities recover the costs of service and
13these investments, including, but not limited to, allowing for
14the recovery of an "investment return on pension assets net of
15deferred tax benefits equal to the utility's long-term debt
16cost of capital as of the end of the applicable calendar year",
17which is set forth in subparagraph (D) of paragraph (4) of
18subsection (c) of Section 16-108.5 of the Public Utilities Act;
20    WHEREAS, In so providing, the General Assembly did not, and
21did not intend to, overturn or generally depart from Illinois
22Commerce Commission practice and law regarding the
23establishment of these protocols, including the electric



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1utility's ability to continue to recover a debt return on its
2pension assets as the Commission has previously allowed; and
3    WHEREAS, No statutory authority was given to the Illinois
4Commerce Commission to deny recovery of a debt return on what
5is commonly referred to as, what is reported in the Federal
6Energy Regulatory Commission Form 1 (FERC Form 1) as, and what
7the General Assembly regarded to be a pension asset; and
8    WHEREAS, The Energy Infrastructure Modernization Act
9further provides in subsections (c) and (d) of Section 16-108.5
10that those amounts to be credited or charged to customers
11following the annual reconciliation process under the
12performance-based formula rate shall be "with interest" so the
13utility will be made whole for unrecovered amounts that were
14prudently and reasonably incurred and customers will be made
15whole for amounts they overpaid, if any; and
16    WHEREAS, Such interest is intended to be set at the
17utility's weighted average cost of capital, determined in
18accordance with the statute, which represents the reasonable
19cost and means of financing a utility's investments and
20operating costs, so that the utility and customers are made
21whole when charges or credits are necessary to reconcile to
22actual prudent and reasonable investments and costs; and



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1    WHEREAS, The Energy Infrastructure Modernization Act also
2provides that the final year-end cost data filed in FERC Form 1
3should generally be used to determine rates; and
4    WHEREAS, No statutory authority was given to the Illinois
5Commerce Commission to set rate base and capital structure
6using average numbers that do not represent final year-end
7values reflected in the FERC Form 1, and the Illinois Commerce
8Commission's use of such average is contrary to the statute;
10    WHEREAS, The Illinois Supreme and Appellate Courts have
11consistently held that, because the administrative agencies
12are creatures of statute, administrative agencies possess only
13those powers expressly delegated by law and may not act beyond
14its statutorily delegated authority; and
15    WHEREAS, The Illinois Supreme and Appellate Courts have
16consistently held that public policy in Illinois is expressed
17by the General Assembly, and it is not the province of an
18administrative agency to inquire into the wisdom and propriety
19of the legislature's act or to substitute its own judgment for
20that of the legislature; therefore, be it



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1we express serious concerns that the Illinois Commerce
2Commission Order, entered on May 29, 2012 in Commission Docket
3No. 11-0721, fails to reflect the statutory directives and the
4intent of the Illinois General Assembly by: (1) not allowing
5Commonwealth Edison Company to earn a debt return on what is
6commonly referred to as, identified in the FERC Form 1 as, and
7what the General Assembly referred to as a pension asset in
8subparagraph (D) of paragraph (4) of subsection (c) of Section
916-108.5; (2) assessing interest on those amounts to be
10credited or charged to customers as set forth in subsection (d)
11of Section 16-108.5 of the Public Utilities Act at an amount
12that is not based on the utility's weighted average cost of
13capital; and (3) determining rate base and capital structure
14using an average, rather than the year-end amounts as reflected
15in FERC Form 1; and be it further
16    RESOLVED, That we urge that the Illinois Commerce
17Commission, on rehearing, strongly consider reversing its
18conclusions with respect to each of these 3 issues and reach a
19decision that reflects the statutory directives and the intent
20of the General Assembly in passing Public Acts 97-616 and
2197-646 as reaffirmed in this resolution; and be it further
22    RESOLVED, That suitable copies of this resolution be
23delivered to the Governor of the State of Illinois and the
24Chairman and Commissioners of the Illinois Commerce



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