SB3766eng 97TH GENERAL ASSEMBLY

SB3766 Engrossed LRB097 19347 CEL 64596 b

AN ACT concerning public utilities.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Public Utilities Act is amended by changing Section 19-145 and by adding Sections 19-150 and 19-155 as follows:

(220 ILCS 5/19-145)

Sec. 19-145. Automatic adjustment clause tariff; uncollectibles.

(a) A gas utility shall be permitted, at its election, to recover through an automatic adjustment clause tariff the incremental difference between its actual uncollectible amount as set forth in Account 904 in the utility's most recent annual Form 21 ILCC and the uncollectible amount included in the utility's rates for the period reported in such annual Form 21 ILCC. The Commission may, in a proceeding to review a general rate case filed subsequent to the effective date of the tariff established under this Section, prospectively switch, from using the actual uncollectible amount set forth in Account 904 to using net write-offs in such tariff, but only if net write-offs are also used to determine the utility's uncollectible amount in rates. In the event the Commission requires such a change, it shall be made effective at the beginning of the first full calendar year after the new rates approved in such proceeding are first placed in effect and an adjustment shall be made, if necessary, to ensure the change does not result in double-recovery or unrecovered uncollectible amounts for any year. For purposes of this Section, "uncollectible amount" means the expense set forth in Account 904 of the utility's Form 21 ILCC or cost of net write-offs as appropriate. In the event the utility's rates change during the period of time reported in its most recent annual Form 21 ILCC, the uncollectible amount included in the utility's rates during such period of time for purposes of this Section will be a weighted average, based on revenues earned during such period by the utility under each set of rates, of the uncollectible amount included in the utility's rates at the beginning of such period and at the end of such period. This difference may either be a charge or a credit to customers depending on whether the uncollectible amount is more or less than the uncollectible amount then included in the utility's rates.

(b) The tariff may be established outside the context of a general rate case filing, and shall specify the terms of any applicable audit. The Commission shall review and by order approve, or approve as modified, the proposed tariff within 180 days after the date on which it is filed. Charges and credits under the tariff shall be allocated to the appropriate customer class or classes. In addition, customers who do not purchase their gas supply from a gas utility and whose receivables are not included in a purchase of receivable program under Section 19-150 shall not be charged by the utility for uncollectible amounts associated with gas supply provided by the utility to the utility's customers. Upon approval of the tariff, the utility shall, based on the 2008 Form 21 ILCC, apply the appropriate credit or charge based on the full year 2008 amounts for the remainder of the 2010 calendar year. Starting with the 2009 Form 21 ILCC reporting period and each subsequent period, the utility shall apply the appropriate credit or charge over a 12-month period beginning with the June billing period and ending with the May billing period, with the first such billing period beginning June 2010.

(c) The approved tariff shall provide that the utility shall file a petition with the Commission annually, no later than August 31st, seeking initiation of an annual review to reconcile all amounts collected with the actual uncollectible amount in the prior period. As part of its review, the Commission shall verify that the utility collects no more and no less than its actual uncollectible amount in each applicable Form 21 ILCC reporting period. The Commission shall review the prudence and reasonableness of the utility's actions to pursue minimization and collection of uncollectibles which shall include, at a minimum, the 6 enumerated criteria set forth in this Section. The Commission shall determine any required adjustments and may include suggestions for prospective changes in current practices. Nothing in this Section or the implementing tariffs shall affect or alter the gas utility's existing obligation to pursue collection of uncollectibles or the gas utility's right to disconnect service. A utility that has in effect a tariff authorized by this Section shall pursue minimization of and collection of uncollectibles through the following activities, including but not limited to:

(1) identifying customers with late payments;

(2) contacting the customers in an effort to obtain payment;

(3) providing delinquent customers with information about possible options, including payment plans and assistance programs;

(4) serving disconnection notices;

(5) implementing disconnections based on the level of uncollectibles; and

(6) pursuing collection activities based on the level of uncollectibles.

(d) Nothing in this Section shall be construed to require a utility to immediately disconnect service for nonpayment.

(Source: P.A. 96-33, eff. 7-10-09.)

(220 ILCS 5/19-150 new)

Sec. 19-150. Purchase of receivables.

(a) For the purposes of this Section:

"Qualifying alternative gas supplier" means an alternative gas supplier that (i) is certified under Section 19-110 of this Act and (ii) includes its charges for gas sales made in a gas utility's service area on that gas utility's bill pursuant to Section 19-135 of this Act.

"Administrative costs" means all of the utility's costs incurred in its administration of the purchase of receivables program except for the deemed intangible costs.

(b) Within 6 months after the effective date of this amendatory Act of the 97th General Assembly, a gas utility with at least 100,000 customers that offers transportation service to residential customers and small commercial customers shall file a tariff pursuant to Article IX of this Act that provides qualifying alternative gas suppliers with the option to have the gas utility purchase their receivables for gas sales that are (1) made to residential customers and small commercial customers, as those terms are defined in Section 19-105 of this Article, and (2) charged on the gas utility's bill.

(c) Receivables for gas sales of qualifying alternative gas suppliers that are charged on the gas utility's bill shall be purchased by the gas utility at a discount rate of 1%. The rate shall include 0.5% to be retained by the gas utility for recovery of deemed intangible costs, and neither this 0.5% portion of the rate, nor the deemed intangible costs, are subject to review by the Commission. The remaining 0.5% of the 1% discount rate shall be retained by the gas utility for recovery of the gas utility's administrative costs and is subject to periodic review by the Commission. Any portion of the 0.5% intended for recovery of administrative costs that is found by the Commission, after notice and hearing, to be in excess of just and reasonable costs shall annually, no later than August 1, be provided to the Department of Commerce and Economic Opportunity for the purpose of paying late payment charges and reconnection fees for households at or below 150% of the poverty level that have entered into a payment plan behind the individual utility service territory that is making the payment. The Department of Commerce and Economic Opportunity shall spend the entire amount provided before August 1 of the following year. To the extent there is a surplus, the Department shall have the ability to pay commodity arrearage amounts for households at or below 150% of the poverty level. Prior to August 1 of each year, the Department of Commerce and Economic Opportunity shall provide a report to the Commission on the number of households that received funds from this payment and for what purpose the payment was made.

(d) In making a just and reasonable determination on the administrative costs, the Commission shall consider:

(1) the gas utility's reasonable start-up costs and administrative costs associated with the gas utility's purchase of receivables;

(2) the impact, if used by the gas utility, of an automatic adjustment clause tariff pursuant to Section 19-145 of this Act to recover uncollectible expense; and

(3) whether the gas utility recovers uncollectible expenses from customers of qualifying alternative gas suppliers through any of its existing rates or charges.

(e) Reasonable start-up costs and administrative costs associated with the gas utility's purchase of receivables shall in the first instance be recovered from qualifying alternative gas suppliers through the gas utility's discount rate assessed by the gas utility on those qualifying alternative gas suppliers who have the gas utility purchase their receivables. In order to prevent barriers to suppliers' use of a purchase of receivables program and ensure full cost recovery for the gas utility in a timely manner, a portion of the gas utility's reasonable start-up costs, subject to reasonable carrying charges as determined by the Commission, may be deferred for later recovery from qualifying alternative gas suppliers who have the gas utility purchase their receivables through the discount rate or a monthly per bill fee, if such deferral is deemed to be necessary by the Commission. The gas utility retains the rights to (1) impose the same terms on residential customers supplied by qualifying alternative gas suppliers with respect to credit and collection, including requests for deposits, and (2) disconnect the customers, if it does not receive payment for its tariffed services or purchased receivables, in the same manner that it would be permitted to if the customers had purchased gas supply service from the gas utility. Any combination gas and electric utility serving more than 1,000,000 total customers shall be exempt from the requirements of this Section unless and until the Commission approves a proposed small volume transportation tariff that includes consolidated billing and any associated cost recovery provisions for an exempt utility. With regard to exempt utilities, the Commission may approve a small volume transportation tariff including consolidated billing and associated cost recovery as part of a general rate increase or other tariff filing.

(f) The tariff filed pursuant to this Section shall permit the gas utility to recover from customers any uncollected receivables that may arise as a result of the purchase of receivables under this Section. The tariff filed pursuant to this Section shall provide for recovery of the prudently incurred costs associated with the provision of this service pursuant to this Section and may include other just and reasonable terms and conditions. Nothing in this Section permits the double recovery of uncollectible expenses from customers.

(g) Amounts collected by the gas utility attributable to the 0.5% portion of the discount rate under this Section for deemed intangible costs shall not be used by the Commission to lower the base rate revenue requirement of the gas utility in any subsequent rate case. In order to limit the implications on short-term debt of the gas utility, a gas utility may choose to delay purchase of unpaid receivables until the bill due date. Other than for initial implementation of the purchase of receivables program, when so choosing, a gas utility shall remit payments to the alternative gas suppliers no more than 2 business days after the due date.

(220 ILCS 5/19-155 new)

Sec. 19-155. Aggregation of natural gas load by municipalities and counties.

(a) The corporate authorities of a municipality or county board of a county may adopt an ordinance under which it may aggregate in accordance with this Section residential customers and small commercial customer natural gas loads located, respectively, within the municipality or the unincorporated areas of the county and, for that purpose, may solicit bids and enter into service agreements to facilitate for those loads the sale and purchase of natural gas and related services and equipment.

The corporate authorities or county board may also exercise such authority jointly with any other municipality or county. Two or more municipalities or counties, or a combination of both, may initiate a process jointly to authorize aggregation by a majority vote of each particular municipality or county as required by this Section.

If the corporate authorities or the county board seek to operate the aggregation program as an opt-out program for residential customers and small commercial customers, then prior to the adoption of an ordinance with respect to aggregation of residential customers and small commercial customer natural gas loads, the corporate authorities of a municipality or the county board of a county shall submit a referendum to its residents to determine whether or not the aggregation program shall operate as an opt-out program for residential customers and small commercial customers.

In addition to the notice and conduct requirements of the general election law, notice of the referendum shall state briefly the purpose of the referendum. The question of whether the corporate authorities or the county board shall adopt an opt-out aggregation program for residential customers and small commercial customers shall be submitted to the electors of the municipality or county board at a regular election and approved by a majority of the electors voting on the question. The corporate authorities or county board must certify to the proper election authority, which must submit the question at an election in accordance with the Election Code.

The election authority must submit the question in substantially the following form:

"Shall the (municipality or county in which the question is being voted upon) have the authority to arrange for the supply of natural gas for its residential customers and small commercial customers who have not opted out of such program?"

The election authority must record the votes as "Yes" or "No".

If a majority of the electors voting on the question vote in the affirmative, then the corporate authorities or county board may implement an opt-out aggregation program for residential customers and small commercial customers.

A referendum must pass in each particular municipality or county that is engaged in the aggregation program. If the referendum fails, then the corporate authorities or county board shall operate the aggregation program as an opt-in program for residential customers and small commercial customers.

An ordinance under this Section shall specify whether the aggregation shall occur only with the prior consent of each person owning, occupying, controlling, or using a natural gas load center proposed to be aggregated. Nothing in this Section, however, authorizes the aggregation of natural gas loads that are served or authorized to be served by a municipality that owns and operates its own gas distribution system. No aggregation shall take effect unless approved by a majority of the members of the corporate authority or county board voting upon the ordinance. A governmental aggregator under this Section is not a public utility, agent, broker, consultant or an alternative retail gas supplier.

(b) Upon the applicable requisite authority under this Section, the corporate authorities or the county board shall develop a plan of operation and governance for the aggregation program so authorized. Before adopting a plan under this Section, the corporate authorities or county board shall hold at least 2 public hearings on the plan. Before the first hearing, the corporate authorities or county board shall publish notice of the hearings once a week for 2 consecutive weeks in a newspaper of general circulation in the jurisdiction. The notice shall summarize the plan and state the date, time, and location of each hearing. Any load aggregation plan established pursuant to this Section shall:

(1) provide for universal access to all applicable residential customers and equitable treatment of applicable residential customers;

(2) describe demand management and energy efficiency services to be provided to each class of customers; and

(3) meet any requirements established by law concerning aggregated service offered pursuant to this Section.

(c) The process for selecting a natural gas supplier and awarding proposed agreements for the purchase of natural gas and other related services shall be conducted in the following order:

(1) First, the corporate authorities or county board may solicit bids for natural gas and other related services.

(2) Then, notwithstanding Section 19-115 of this Act and Section 2FFF of the Consumer Fraud and Deceptive Business Practices Act, a natural gas utility that provides residential customers and small commercial customers natural gas service in the aggregate area must, upon request of the corporate authorities or the county board in the aggregate area, submit to the requesting party, in an electronic format, those account numbers, names, and addresses of residential customers and small commercial customers in the aggregate area that are reflected in the natural gas utility's records at the time of the request. Any corporate authority or county board receiving customer information from a natural gas utility shall be subject to the limitations on the disclosure of the information described in Section 19-115 of this Act and Section 2FFF of the Consumer Fraud and Deceptive Business Practices Act, and a natural gas utility shall not be held liable for any claims arising out of the provision of information pursuant to this item (2).

(d) If the corporate authorities or county board operate under an opt-in program for residential customers and small commercial customers, then:

(1) within 60 days after receiving the bids, the corporate authorities or county board shall allow residential customers and small commercial customers to commit to the terms and conditions of a bid that has been selected by the corporate authorities or county board; and

(2) if (A) the corporate authorities or county board award proposed agreements for the purchase of natural gas and other related services and (B) an agreement is reached between the corporate authorities or county board for those services, then residential customers and small commercial customers committed to the terms and conditions according to item (1) of this subsection (d) shall be committed to the agreement.

(e) If the corporate authorities or county board operate as an opt-out program for residential customers and small commercial customers, then it shall be the duty of the aggregated entity to fully inform residential customers and small commercial customers in advance that they have the right to opt out of the aggregation program. The disclosure shall prominently state all charges to be made and shall include full disclosure of the cost to obtain service pursuant to Section 19-115 of this Act, how to access it, and the fact that it is available to them without penalty, if they are currently receiving service under that Section. Early termination fees, subject to paragraph (5) of subsection (g) of Section 19-115 of this Act, for consumers currently under contract with an alternative retail gas supplier or an entity that provides services in competition with and similar to an alternative retail gas supplier, are not considered penalties under this subsection.

(f) The Illinois Commerce Commission shall adopt rules to implement this Section, including, but not limited to, the protection of customers already under contract with an alternative retail gas supplier, gas utility processes for enrollment of opt-out customers, and minimum opt-out disclosure requirements for opt-out aggregation. The rules adopted under this subsection (f) shall specifically state that if a customer is currently under contract with an alternative retail gas supplier or an entity that provides services in competition with and similar to an alternative retail gas supplier, the customer shall not be automatically enrolled in the relevant municipal or county opt-out program and that the opt-out program shall not interfere with the existing agreement between the customer and alternative retail gas supplier or an entity that provides services in competition with and similar to an alternative retail gas supplier. Nothing shall prohibit a customer under contract with an alternative retail gas supplier or an entity that provides services in competition with and similar to an alternative retail gas supplier from explicitly, in writing, affirmatively choosing to enter into the local municipality's or county's opt-out program. The opt-out disclosure rules adopted under this subsection shall, at a minimum, disclose the possibility of a contract termination fee, subject to the terms of paragraph (5) of subsection (g) of Section 19-115 of this Act, for those customers under contract with alternative retail gas suppliers or an entity that provides services in competition with and similar to an alternative retail gas supplier.

(g) No municipality or county shall implement, in its plan of operation and governance, an opt-out program that automatically enrolls a customer that is currently under contract with an alternative retail gas supplier or an entity that provides services in competition with and similar to an alternative retail gas supplier into its municipal or county opt-out program. A customer that is currently under contract with an alternative retail gas supplier or an entity that provides services in competition with and similar to an alternative retail gas supplier that seeks to enroll in an opt-out program shall be required by the municipality or county, as applicable, to explicitly, in writing, affirm the choice to enter into said opt-out program.

(h) Nothing in this Section shall require a natural gas public utility without a Commission-approved small volume transportation program to accommodate aggregated load switching for any natural gas customers.

Section 99. Effective date. This Act takes effect upon becoming law.