Illinois General Assembly - Full Text of SB3766
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Full Text of SB3766  97th General Assembly


Sen. Don Harmon

Filed: 3/26/2012





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2    AMENDMENT NO. ______. Amend Senate Bill 3766 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Public Utilities Act is amended by changing
5Section 19-145 and by adding Sections 19-150 and 19-155 as
7    (220 ILCS 5/19-145)
8    Sec. 19-145. Automatic adjustment clause tariff;
10    (a) A gas utility shall be permitted, at its election, to
11recover through an automatic adjustment clause tariff the
12incremental difference between its actual uncollectible amount
13as set forth in Account 904 in the utility's most recent annual
14Form 21 ILCC and the uncollectible amount included in the
15utility's rates for the period reported in such annual Form 21
16ILCC. The Commission may, in a proceeding to review a general



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1rate case filed subsequent to the effective date of the tariff
2established under this Section, prospectively switch, from
3using the actual uncollectible amount set forth in Account 904
4to using net write-offs in such tariff, but only if net
5write-offs are also used to determine the utility's
6uncollectible amount in rates. In the event the Commission
7requires such a change, it shall be made effective at the
8beginning of the first full calendar year after the new rates
9approved in such proceeding are first placed in effect and an
10adjustment shall be made, if necessary, to ensure the change
11does not result in double-recovery or unrecovered
12uncollectible amounts for any year. For purposes of this
13Section, "uncollectible amount" means the expense set forth in
14Account 904 of the utility's Form 21 ILCC or cost of net
15write-offs as appropriate. In the event the utility's rates
16change during the period of time reported in its most recent
17annual Form 21 ILCC, the uncollectible amount included in the
18utility's rates during such period of time for purposes of this
19Section will be a weighted average, based on revenues earned
20during such period by the utility under each set of rates, of
21the uncollectible amount included in the utility's rates at the
22beginning of such period and at the end of such period. This
23difference may either be a charge or a credit to customers
24depending on whether the uncollectible amount is more or less
25than the uncollectible amount then included in the utility's



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1    (b) The tariff may be established outside the context of a
2general rate case filing, and shall specify the terms of any
3applicable audit. The Commission shall review and by order
4approve, or approve as modified, the proposed tariff within 180
5days after the date on which it is filed. Charges and credits
6under the tariff shall be allocated to the appropriate customer
7class or classes. In addition, customers who do not purchase
8their gas supply from a gas utility and whose receivables are
9not included in a purchase of receivable program under Section
1019-150 shall not be charged by the utility for uncollectible
11amounts associated with gas supply provided by the utility to
12the utility's customers. Upon approval of the tariff, the
13utility shall, based on the 2008 Form 21 ILCC, apply the
14appropriate credit or charge based on the full year 2008
15amounts for the remainder of the 2010 calendar year. Starting
16with the 2009 Form 21 ILCC reporting period and each subsequent
17period, the utility shall apply the appropriate credit or
18charge over a 12-month period beginning with the June billing
19period and ending with the May billing period, with the first
20such billing period beginning June 2010.
21    (c) The approved tariff shall provide that the utility
22shall file a petition with the Commission annually, no later
23than August 31st, seeking initiation of an annual review to
24reconcile all amounts collected with the actual uncollectible
25amount in the prior period. As part of its review, the
26Commission shall verify that the utility collects no more and



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1no less than its actual uncollectible amount in each applicable
2Form 21 ILCC reporting period. The Commission shall review the
3prudence and reasonableness of the utility's actions to pursue
4minimization and collection of uncollectibles which shall
5include, at a minimum, the 6 enumerated criteria set forth in
6this Section. The Commission shall determine any required
7adjustments and may include suggestions for prospective
8changes in current practices. Nothing in this Section or the
9implementing tariffs shall affect or alter the gas utility's
10existing obligation to pursue collection of uncollectibles or
11the gas utility's right to disconnect service. A utility that
12has in effect a tariff authorized by this Section shall pursue
13minimization of and collection of uncollectibles through the
14following activities, including but not limited to:
15        (1) identifying customers with late payments;
16        (2) contacting the customers in an effort to obtain
17    payment;
18        (3) providing delinquent customers with information
19    about possible options, including payment plans and
20    assistance programs;
21        (4) serving disconnection notices;
22        (5) implementing disconnections based on the level of
23    uncollectibles; and
24        (6) pursuing collection activities based on the level
25    of uncollectibles.
26    (d) Nothing in this Section shall be construed to require a



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1utility to immediately disconnect service for nonpayment.
2(Source: P.A. 96-33, eff. 7-10-09.)
3    (220 ILCS 5/19-150 new)
4    Sec. 19-150. Purchase of receivables.
5    (a) For the purposes of this Section:
6    "Qualifying alternative gas supplier" means an alternative
7gas supplier that (i) is certified under Section 19-110 of this
8Act and (ii) includes its charges for gas sales made in a gas
9utility's service area on that gas utility's bill pursuant to
10Section 19-135 of this Act.
11    "Administrative costs" means all of the utility's costs
12incurred in its administration of the purchase of receivables
13program except for the deemed intangible costs.
14    (b) Within 6 months after the effective date of this
15amendatory Act of the 97th General Assembly, a gas utility with
16at least 100,000 customers that offers transportation service
17to residential customers and small commercial customers shall
18file a tariff pursuant to Article IX of this Act that provides
19qualifying alternative gas suppliers with the option to have
20the gas utility purchase their receivables for gas sales that
21are (1) made to residential customers and small commercial
22customers, as those terms are defined in Section 19-105 of this
23Article, and (2) charged on the gas utility's bill.
24    (c) Receivables for gas sales of qualifying alternative gas
25suppliers that are charged on the gas utility's bill shall be



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1purchased by the gas utility at a discount rate of 1%. The rate
2shall include 0.5% to be retained by the gas utility for
3recovery of deemed intangible costs, and neither this 0.5%
4portion of the rate, nor the deemed intangible costs, are
5subject to review by the Commission. The remaining 0.5% of the
61% discount rate shall be retained by the gas utility for
7recovery of the gas utility's administrative costs and is
8subject to periodic review by the Commission. Any portion of
9the 0.5% intended for recovery of administrative costs that is
10found by the Commission, after notice and hearing, to be in
11excess of just and reasonable costs shall annually, no later
12than August 1, be provided to the Department of Commerce and
13Economic Opportunity for the purpose of paying late payment
14charges and reconnection fees for households at or below 150%
15of the poverty level that have entered into a payment plan
16behind the individual utility service territory that is making
17the payment. The Department of Commerce and Economic
18Opportunity shall spend the entire amount provided before
19August 1 of the following year. To the extent there is a
20surplus, the Department shall have the ability to pay commodity
21arrearage amounts for households at or below 150% of the
22poverty level. Prior to August 1 of each year, the Department
23of Commerce and Economic Opportunity shall provide a report to
24the Commission on the number of households that received funds
25from this payment and for what purpose the payment was made.
26    (d) In making a just and reasonable determination on the



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1administrative costs, the Commission shall consider:
2        (1) the gas utility's reasonable start-up costs and
3    administrative costs associated with the gas utility's
4    purchase of receivables;
5        (2) the impact, if used by the gas utility, of an
6    automatic adjustment clause tariff pursuant to Section
7    19-145 of this Act to recover uncollectible expense; and
8        (3) whether the gas utility recovers uncollectible
9    expenses from customers of qualifying alternative gas
10    suppliers through any of its existing rates or charges.
11    (e) Reasonable start-up costs and administrative costs
12associated with the gas utility's purchase of receivables shall
13in the first instance be recovered from qualifying alternative
14gas suppliers through the gas utility's discount rate assessed
15by the gas utility on those qualifying alternative gas
16suppliers who have the gas utility purchase their receivables.
17In order to prevent barriers to suppliers' use of a purchase of
18receivables program and ensure full cost recovery for the gas
19utility in a timely manner, a portion of the gas utility's
20reasonable start-up costs, subject to reasonable carrying
21charges as determined by the Commission, may be deferred for
22later recovery from qualifying alternative gas suppliers who
23have the gas utility purchase their receivables through the
24discount rate or a monthly per bill fee, if such deferral is
25deemed to be necessary by the Commission. The gas utility
26retains the rights to (1) impose the same terms on residential



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1customers supplied by qualifying alternative gas suppliers
2with respect to credit and collection, including requests for
3deposits, and (2) disconnect the customers, if it does not
4receive payment for its tariffed services or purchased
5receivables, in the same manner that it would be permitted to
6if the customers had purchased gas supply service from the gas
7utility. Any combination gas and electric utility serving more
8than 1,000,000 total customers shall be exempt from the
9requirements of this Section unless and until the Commission
10approves a proposed small volume transportation tariff that
11includes consolidated billing and any associated cost recovery
12provisions for an exempt utility. With regard to exempt
13utilities, the Commission may approve a small volume
14transportation tariff including consolidated billing and
15associated cost recovery as part of a general rate increase or
16other tariff filing.
17    (f) The tariff filed pursuant to this Section shall permit
18the gas utility to recover from customers any uncollected
19receivables that may arise as a result of the purchase of
20receivables under this Section. The tariff filed pursuant to
21this Section shall provide for recovery of the prudently
22incurred costs associated with the provision of this service
23pursuant to this Section and may include other just and
24reasonable terms and conditions. Nothing in this Section
25permits the double recovery of uncollectible expenses from



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1    (g) Amounts collected by the gas utility attributable to
2the 0.5% portion of the discount rate under this Section for
3deemed intangible costs shall not be used by the Commission to
4lower the base rate revenue requirement of the gas utility in
5any subsequent rate case. In order to limit the implications on
6short-term debt of the gas utility, a gas utility may choose to
7delay purchase of unpaid receivables until the bill due date.
8Other than for initial implementation of the purchase of
9receivables program, when so choosing, a gas utility shall
10remit payments to the alternative gas suppliers no more than 2
11business days after the due date.
12    (220 ILCS 5/19-155 new)
13    Sec. 19-155. Aggregation of natural gas load by
14municipalities and counties.
15    (a) The corporate authorities of a municipality or county
16board of a county may adopt an ordinance under which it may
17aggregate in accordance with this Section residential
18customers and small commercial customer natural gas loads
19located, respectively, within the municipality or the
20unincorporated areas of the county and, for that purpose, may
21solicit bids and enter into service agreements to facilitate
22for those loads the sale and purchase of natural gas and
23related services and equipment.
24    The corporate authorities or county board may also exercise
25such authority jointly with any other municipality or county.



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1Two or more municipalities or counties, or a combination of
2both, may initiate a process jointly to authorize aggregation
3by a majority vote of each particular municipality or county as
4required by this Section.
5    If the corporate authorities or the county board seek to
6operate the aggregation program as an opt-out program for
7residential customers and small commercial customers, then
8prior to the adoption of an ordinance with respect to
9aggregation of residential customers and small commercial
10customer natural gas loads, the corporate authorities of a
11municipality or the county board of a county shall submit a
12referendum to its residents to determine whether or not the
13aggregation program shall operate as an opt-out program for
14residential customers and small commercial customers.
15    In addition to the notice and conduct requirements of the
16general election law, notice of the referendum shall state
17briefly the purpose of the referendum. The question of whether
18the corporate authorities or the county board shall adopt an
19opt-out aggregation program for residential customers and
20small commercial customers shall be submitted to the electors
21of the municipality or county board at a regular election and
22approved by a majority of the electors voting on the question.
23The corporate authorities or county board must certify to the
24proper election authority, which must submit the question at an
25election in accordance with the Election Code.
26    The election authority must submit the question in



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1substantially the following form:
2        "Shall the (municipality or county in which the
3    question is being voted upon) have the authority to arrange
4    for the supply of natural gas for its residential customers
5    and small commercial customers who have not opted out of
6    such program?"
7    The election authority must record the votes as "Yes" or
9    If a majority of the electors voting on the question vote
10in the affirmative, then the corporate authorities or county
11board may implement an opt-out aggregation program for
12residential customers and small commercial customers.
13    A referendum must pass in each particular municipality or
14county that is engaged in the aggregation program. If the
15referendum fails, then the corporate authorities or county
16board shall operate the aggregation program as an opt-in
17program for residential customers and small commercial
19    An ordinance under this Section shall specify whether the
20aggregation shall occur only with the prior consent of each
21person owning, occupying, controlling, or using a natural gas
22load center proposed to be aggregated. Nothing in this Section,
23however, authorizes the aggregation of natural gas loads that
24are served or authorized to be served by a municipality that
25owns and operates its own gas distribution system. No
26aggregation shall take effect unless approved by a majority of



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1the members of the corporate authority or county board voting
2upon the ordinance. A governmental aggregator under this
3Section is not a public utility, agent, broker, consultant or
4an alternative retail gas supplier.
5    (b) Upon the applicable requisite authority under this
6Section, the corporate authorities or the county board shall
7develop a plan of operation and governance for the aggregation
8program so authorized. Before adopting a plan under this
9Section, the corporate authorities or county board shall hold
10at least 2 public hearings on the plan. Before the first
11hearing, the corporate authorities or county board shall
12publish notice of the hearings once a week for 2 consecutive
13weeks in a newspaper of general circulation in the
14jurisdiction. The notice shall summarize the plan and state the
15date, time, and location of each hearing. Any load aggregation
16plan established pursuant to this Section shall:
17        (1) provide for universal access to all applicable
18    residential customers and equitable treatment of
19    applicable residential customers;
20        (2) describe demand management and energy efficiency
21    services to be provided to each class of customers; and
22        (3) meet any requirements established by law
23    concerning aggregated service offered pursuant to this
24    Section.
25    (c) The process for selecting a natural gas supplier and
26awarding proposed agreements for the purchase of natural gas



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1and other related services shall be conducted in the following
3        (1) First, the corporate authorities or county board
4    may solicit bids for natural gas and other related
5    services.
6        (2) Then, notwithstanding Section 19-115 of this Act
7    and Section 2FFF of the Consumer Fraud and Deceptive
8    Business Practices Act, a natural gas utility that provides
9    residential customers and small commercial customers
10    natural gas service in the aggregate area must, upon
11    request of the corporate authorities or the county board in
12    the aggregate area, submit to the requesting party, in an
13    electronic format, those account numbers, names, and
14    addresses of residential customers and small commercial
15    customers in the aggregate area that are reflected in the
16    natural gas utility's records at the time of the request.
17    Any corporate authority or county board receiving customer
18    information from a natural gas utility shall be subject to
19    the limitations on the disclosure of the information
20    described in Section 19-115 of this Act and Section 2FFF of
21    the Consumer Fraud and Deceptive Business Practices Act,
22    and a natural gas utility shall not be held liable for any
23    claims arising out of the provision of information pursuant
24    to this item (2).
25    (d) If the corporate authorities or county board operate
26under an opt-in program for residential customers and small



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1commercial customers, then:
2        (1) within 60 days after receiving the bids, the
3    corporate authorities or county board shall allow
4    residential customers and small commercial customers to
5    commit to the terms and conditions of a bid that has been
6    selected by the corporate authorities or county board; and
7        (2) if (A) the corporate authorities or county board
8    award proposed agreements for the purchase of natural gas
9    and other related services and (B) an agreement is reached
10    between the corporate authorities or county board for those
11    services, then residential customers and small commercial
12    customers committed to the terms and conditions according
13    to item (1) of this subsection (d) shall be committed to
14    the agreement.
15    (e) If the corporate authorities or county board operate as
16an opt-out program for residential customers and small
17commercial customers, then it shall be the duty of the
18aggregated entity to fully inform residential customers and
19small commercial customers in advance that they have the right
20to opt out of the aggregation program. The disclosure shall
21prominently state all charges to be made and shall include full
22disclosure of the cost to obtain service pursuant to Section
2319-115 of this Act, how to access it, and the fact that it is
24available to them without penalty, if they are currently
25receiving service under that Section. Early termination fees,
26subject to paragraph (5) of subsection (g) of Section 19-115 of



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1this Act, for consumers currently under contract with an
2alternative retail gas supplier or an entity that provides
3services in competition with and similar to an alternative
4retail gas supplier, are not considered penalties under this
6    (f) The Illinois Commerce Commission shall adopt rules to
7implement this Section, including, but not limited to, the
8protection of customers already under contract with an
9alternative retail gas supplier, gas utility processes for
10enrollment of opt-out customers, and minimum opt-out
11disclosure requirements for opt-out aggregation. The rules
12adopted under this subsection (f) shall specifically state that
13if a customer is currently under contract with an alternative
14retail gas supplier or an entity that provides services in
15competition with and similar to an alternative retail gas
16supplier, the customer shall not be automatically enrolled in
17the relevant municipal or county opt-out program and that the
18opt-out program shall not interfere with the existing agreement
19between the customer and alternative retail gas supplier or an
20entity that provides services in competition with and similar
21to an alternative retail gas supplier. Nothing shall prohibit a
22customer under contract with an alternative retail gas supplier
23or an entity that provides services in competition with and
24similar to an alternative retail gas supplier from explicitly,
25in writing, affirmatively choosing to enter into the local
26municipality's or county's opt-out program. The opt-out



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1disclosure rules adopted under this subsection shall, at a
2minimum, disclose the possibility of a contract termination
3fee, subject to the terms of paragraph (5) of subsection (g) of
4Section 19-115 of this Act, for those customers under contract
5with alternative retail gas suppliers or an entity that
6provides services in competition with and similar to an
7alternative retail gas supplier.
8    (g) No municipality or county shall implement, in its plan
9of operation and governance, an opt-out program that
10automatically enrolls a customer that is currently under
11contract with an alternative retail gas supplier or an entity
12that provides services in competition with and similar to an
13alternative retail gas supplier into its municipal or county
14opt-out program. A customer that is currently under contract
15with an alternative retail gas supplier or an entity that
16provides services in competition with and similar to an
17alternative retail gas supplier that seeks to enroll in an
18opt-out program shall be required by the municipality or
19county, as applicable, to explicitly, in writing, affirm the
20choice to enter into said opt-out program.
21    (h) Nothing in this Section shall require a natural gas
22public utility without a Commission-approved small volume
23transportation program to accommodate aggregated load
24switching for any natural gas customers.
25    Section 99. Effective date. This Act takes effect upon



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1becoming law.".