220 ILCS 5/ Public Utilities Act.

(220 ILCS 5/16-108.16)

Sec. 16-108.16. Commercial Rate Impacts.

(a) Each electric utility that serves more than 500,000 retail customers in the State shall file with the Commission the reports required by this Section, which shall identify the annual average increases due to future energy investment costs for the applicable period or periods in electric bills to commercial and industrial retail customers. For purposes of this Section, "commercial and industrial retail customers" means non-residential retail customers other than those customers who are exempt from subsections (a) through (j) of Section 8-103B of this Act under subsection (l) of Section 8-103B.

(b) The increase determination required by subsection (a) of this Section shall be based on a calculation comprised of the following components:

(1) Beginning with the 2017 calendar year, the average annual amount paid by commercial and industrial retail customers, expressed on a cents-per-kilowatthour basis, to recover future energy investment costs, which include the charges to recover the costs incurred by the utility under the following provisions:

(A) Sections 8-103, Section 8-103B, and 16-111.5B of this Act, as applicable, and as such costs may be recovered under Sections 8-103, 8-103B, 16-111.5B or Section 16-108.5 of this Act;

(B) subsection (d-5) of Section 1-75 of the Illinois Power Agency Act, as such costs may be recovered under subsection (k) of Section 16-108 of this Act; and

(C) Section 16-107.6 of this Act.

Beginning with the 2018 calendar year, each of the average annual charges calculated in subparagraphs (A) through (C) of this paragraph (1) shall be equal to the average of each such charge applied over a period that commences with the calendar year ending December 31, 2017 and ends with the most recently completed calendar year prior to the calculation or calculations required by this Section.

(2) The sum of the following:

(A) annual net energy savings to commercial and industrial retail customers that are attributable to the implementation of voltage optimization measures under Section 8-103B of this Act, expressed on a cents-per-kilowatthour basis, which are estimated energy and capacity benefits for commercial and industrial retail customers minus the measure costs recovered from those customers, divided by the average annual kilowatt-hour consumption of commercial and industrial retail customers; notwithstanding this subparagraph (A), a utility may elect not to include an estimate of net energy savings as described in this subparagraph (A), in which case the value under this subparagraph (A) shall be zero;

(B) the average annual cents-per-kilowatthour charge applied under Section 8-103 of this Act to commercial and industrial retail customers during calendar year 2016 to recover the costs authorized by such Section; and

(C) incremental energy efficiency savings, which shall be calculated by subtracting the value determined in item (ii) of this subparagraph (C) from the value determined in item (i) of this subparagraph and dividing the difference by the value identified in item (iii) of this subparagraph:

(i) Total value, in dollars, of the cumulative persisting annual saving achieved from the installation or implementation of all energy efficiency measures for commercial and industrial retail customers under Sections 8-103, 8-103B and 16-111.5 of this Act, net of the cumulative annual percentage savings in kilowatt-hours, if any, calculated under subparagraph (A) of this paragraph (2).

(ii) 2016 value, which shall equal the value calculated under item (i) of this subparagraph (C) multiplied by the quotient of (aa) the cumulative persisting annual savings, in kilowatt-hours, achieved from the installation or implementation of all energy efficiency measures for commercial and industrial retail customers under Sections 8-103, 8-103B and 16-111.5B of this Act as of December 31, 2016, divided by (bb) the cumulative persisting annual savings, in kilowatt-hours, from the installation or implementation of all energy efficiency measures for commercial and industrial retail customers under Sections 8-103, 8-103B and 16-111.5 of this Act, net of the cumulative annual percentage savings in kilowatt-hours, if any, calculated under subparagraph (A) of this paragraph (2).

(iii) The average annual kilowatt-hour consumption of those commercial and industrial retail customers that installed or implemented energy efficiency measures under energy efficiency programs or plans approved pursuant to Sections 8-103, 8-103B or 16-111.5B of this Act.

Beginning with the 2018 calendar year, each of the values identified in subparagraphs (A) and (C) of this paragraph (2) shall be equal to the average of each such value during a period that commences with the calendar year ending December 31, 2017 and ends with the most recently completed calendar year prior to the calculation or calculations required by this Section.

For purposes of this Section, cumulative persisting annual savings shall have the meaning set forth in Section 8-103B of this Act, and energy efficiency measures shall have the meaning set forth in Section 1-10 of the Illinois Power Agency Act.

(c)(1) No later than June 30, 2017, and every June 30 thereafter until June 30, 2027, an electric utility subject to this Section shall submit a report to the Commission that sets forth the utility's 10-year projection of the values of each of the components described in paragraphs (1) and (2) of subsection (b) of this Section. Each utility's report to the Commission shall identify the result of the computation performed under this Section for the immediately preceding calendar year and update its 10-year projection. Such calculations shall be performed by subtracting the sum of paragraph (2) of subsection (b) of this Section from the sum of paragraph (1) of such subsection (b).

In the event that the actual or projected average annual increase for commercial and industrial retail customers exceeds 1.3% of 8.90 cents-per-kilowatthour, which is the average amount paid per kilowatt-hour for electric service during the year ending December 31, 2015 by Illinois commercial retail customers, as reported to the Edison Electric Institute, then the applicable utility shall comply with the provisions of paragraphs (2) through (4) of this subsection (c), as applicable.

(2) In the event that the projected average annual increase for commercial and industrial retail customers during a calendar year exceeds the applicable limitation set forth in paragraph (1) of this subsection (c), then the utility shall comply with the following provisions, as applicable:

(A) If an exceedance is projected during the first four calendar years of the 10-year projection, then the utility shall include in its report submitted under paragraph (1) of this subsection (c) the utility's proposal or proposals to decrease the future energy investment costs described in paragraph (1) of subsection (b) of this Section to ensure that the limitation set forth in such paragraph (1) is not exceeded. The Commission shall, after notice and hearing, enter an order directing the utility to implement one or more proposals, as such proposals may be modified by the Commission. The Commission shall have the authority under this subparagraph (A) to approve modifications to the contracts executed under subsection (d-5) of Section 1-75 of the Illinois Power Agency Act. If the Commission approves modifications to such contracts that are in an amount that reduces the quantities to be procured under such contracts by more than 7%, then the supplier shall have the option of accepting the modifications or terminating the modified contract or contracts, subject to the termination requirements and notice provisions set forth in item (i) of subparagraph (B) of paragraph (4) of this Section.

(B) If an exceedance is projected during any calendar year during the last 6 years of the 10-year projection, then the utility shall demonstrate in its report submitted under paragraph (1) of this subsection (c) how the utility will reduce the future energy investment costs described in paragraph (1) of subsection (b) of this Section to ensure that the limitation set forth in such paragraph (1) is not exceeded.

(3) If the actual average annual increase for commercial and industrial retail customers during a calendar year exceeded the limitation set forth in paragraph (1) of this subsection (c), then the utility shall prepare and file with the Commission, at the time it submits its report under paragraph (1) of this subsection (c), a corrective action plan. The Commission shall initiate an investigation to determine the factors that contributed to the actual average annual increase exceeding such limitation for the applicable calendar year, and shall, after notice and hearing, enter an order approving, or approving with modification, the utility's corrective action plan within 120 days after the utility files such plan. The Commission shall also submit a report to the General Assembly no later than 30 days after it enters such order, and the report shall explain the results of the Commission's investigation and findings and conclusions of its order.

(4) If the actual average annual increase for commercial and industrial retail customers during a calendar year exceeds the limitation set forth in paragraph (1) of this subsection (c) for two consecutive years, then the utility shall indicate in its report filed under paragraph (1) of this subsection (c) whether the utility will proceed with or terminate the future energy investments described and authorized under subsection (d-5) of the Illinois Power Agency Act and Sections 8-103B and 16-107.6 of this Act. The utility's election shall be subject to the requirements of subparagraph (A) or (B) of this paragraph (4), as applicable.

(A) If the utility elects to proceed with the future energy investments, then it shall be subject to the corrective action plan requirements set forth in paragraph (3) of this subsection (c). In addition, the utility must commit to apply a credit to commercial and industrial retail customers' bills if the actual average annual increase for such customers exceeds the limitation set forth in paragraph (1) of this subsection (c) for the year in which the utility files its corrective action plan, which credit shall be in an amount that equals the portion by which the increase exceeds such limitation. The Commission shall initiate an investigation to determine the factors that contributed to the actual average annual increase exceeding such limitation for the applicable calendar year, including an analysis of the factors contributing to the limitation being exceeded for two consecutive years, and shall, after notice and hearing, enter an order approving, or approving with modification, the utility's corrective action plan within 120 days after the utility files such plan. The Commission shall also submit a supplemental report to the General Assembly no later than 30 days after it enters such order, and the report shall explain the results of the Commission's investigation and findings and conclusions of its order.

(B) If the utility elects to terminate future energy investments, then the Commission shall, notwithstanding anything to the contrary:

(i) Order the utility to terminate the contract or contracts executed under subsection (d-5) of Section 1-75 of the Illinois Power Agency Act, pursuant to the contract termination provisions set forth in such subsection (d-5), provided that notice of such termination must be made at least 3 years and 75 days prior to the effective date of such termination. In the event that only a portion of the contracts executed under such subsection (d-5) are terminated for a particular zero emission facility, then the zero emission facility may elect to terminate all of the contracts executed for that facility under such subsection (d-5).

(ii) Within 30 days of the utility's report identifying its election to terminate future energy investments, initiate a proceeding to approve the process for terminating future expenditures under Sections 16-107.6 of the Public Utilities Act. The Commission shall, after notice and hearing, enter its order approving such process no later than 120 days after initiating such proceeding.

(iii) Within 30 days of the utility's report identifying its election to terminate future energy investments, initiate a proceeding under Section 8-103B of this Act to reduce the cumulative persisting annual savings goals previously approved by the Commission under such Section to ensure just and reasonable rates. The Commission shall, after notice and hearing, enter its order approving such goal reductions no later than 120 days after initiating such proceeding.

Notwithstanding the termination of future energy investments pursuant to this subparagraph (B), the utility shall be permitted to continue to recover the costs of such investments that were incurred prior to such termination, including but not limited to all costs that are recovered through regulatory assets created under Sections 8-103B and 16-107.6 of this Act. Nothing in this Section shall limit the utility's ability to fully recover such costs. The utility shall also be permitted to continue to recover the costs of all payments made under contracts executed under subsection (d-5) until the effective date of the contract's termination.

(5) Notwithstanding anything to the contrary, if, under this Section or subsection (m) of Section 16-108 of this Act, modifications to the contracts executed under subsection (d-5) of Section 1-75 of the Illinois Power Agency Act are, in total, in an amount that reduces the quantities to procured under such contracts by more than 10%, then the supplier shall have the option of accepting the modifications or terminating the modified contract or contracts, subject to the termination requirements and notice provisions set forth in item (i) of subparagraph (B) of paragraph (4) of this Section.

(Source: P.A. 99-906, eff. 6-1-17.)

(220 ILCS 5/16-108.18)

Sec. 16-108.18. Performance-based ratemaking.

(a) The General Assembly finds:

(1) That improving the alignment of utility customer and company interests is critical to ensuring equity, rapid growth of distributed energy resources, electric vehicles, and other new technologies that substantially change the makeup of the grid and protect Illinois residents and businesses from potential economic and environmental harm from the State's energy systems.

(2) There is urgency around addressing increasing threats from climate change and assisting communities that have borne disproportionate impacts from climate change, including air pollution, greenhouse gas emissions, and energy burdens. Addressing this problem requires changes to the business model under which utilities in Illinois have traditionally functioned.

(3) Providing targeted incentives to support change through a new performance-based structure to enhance ratemaking is intended to enable alignment of utility, customer, community, and environmental goals.

(4) Though Illinois has taken some measures to move utilities to performance-based ratemaking through the establishment of performance incentives and a performance-based formula rate under the Energy Infrastructure Modernization Act, these measures have not been sufficiently transformative in urgently moving electric utilities toward the State's ambitious energy policy goals: protecting a healthy environment and climate, improving public health, and creating quality jobs and economic opportunities, including wealth building, especially in economically disadvantaged communities and communities of color.

(5) These measures were not developed through a process to understand first what performance measures and penalties would help drive the sought-after behavior by the utilities.

(6) While the General Assembly has not made a finding that the spending related to the Energy Infrastructure and Modernization Act and its performance metrics was not reasonable, it is important to address concerns that these measures may have resulted in excess utility spending and guaranteed profits without meaningful improvements in customer experience, rate affordability, or equity.

(7) Discussions of performance incentive mechanisms must always take into account the affordability of customer rates and bills for all customers, including low-income customers.

(8) The General Assembly therefore directs the Illinois Commerce Commission to complete a transition that includes a comprehensive performance-based regulation framework for electric utilities serving more than 500,000 customers. The breadth of this framework should revise existing utility regulations to position Illinois electric utilities to effectively and efficiently achieve current and anticipated future energy needs of this State, while ensuring affordability for consumers.

(b) As used in this Section:

"Commission" means the Illinois Commerce Commission.

"Demand response" means measures that decrease peak electricity demand or shift demand from peak to off-peak periods.

"Distributed energy resources" or "DER" means a wide range of technologies that are connected to the grid including those that are located on the customer side of the customer's electric meter and can provide value to the distribution system, including, but not limited to, distributed generation, energy storage, electric vehicles, and demand response technologies.

"Economically disadvantaged communities" means areas of one or more census tracts where average household income does not exceed 80% of area median income.

"Environmental justice communities" means the definition of that term as used and as may be updated in the long-term renewable resources procurement plan by the Illinois Power Agency and its Program Administrator in the Illinois Solar for All Program.

"Equity investment eligible community" means the geographic areas throughout Illinois which would most benefit from equitable investments by the State designed to combat discrimination. Specifically, the equity investment eligible communities shall be defined as the following areas:

(1) R3 Areas as established pursuant to Section 10-40 of the Cannabis Regulation and Tax Act, where residents have historically been excluded from economic opportunities, including opportunities in the energy sector; and

(2) Environmental justice communities, as defined by the Illinois Power Agency pursuant to the Illinois Power Agency Act, where residents have historically been subject to disproportionate burdens of pollution, including pollution from the energy sector.

"Performance incentive mechanism" means an instrument by which utility performance is incentivized, which could include a monetary performance incentive.

"Performance metric" means a manner of measurement for a particular utility activity.

(c) Through coordinated, comprehensive system planning, ratemaking, and performance incentives, the performance-based ratemaking framework should be designed to accomplish the following objectives:

(1) maintain and improve service reliability and safety, including and particularly in environmental justice, low-income and equity investment eligible communities;

(2) decarbonize utility systems at a pace that meets or exceeds State climate goals, while also ensuring the affordability of rates for all customers, including low-income customers;

(3) direct electric utilities to make cost-effective investments that support achievement of Illinois' clean energy policies, including, at a minimum, investments designed to integrate distributed energy resources, comply with critical infrastructure protection standards, plans, and industry best practices, and support and take advantage of potential benefits from the electric vehicle charging and other electrification, while mitigating the impacts;

(4) choose cost-effective assets and services, whether utility-supplied or through third-party contracting, considering both economic and environmental costs and the effects on utility rates, to deliver high-quality service to customers at least cost;

(5) maintain the affordability of electric delivery services for all customers, including low-income customers;

(6) maintain and grow a diverse workforce, diverse supplier procurement base and, for relevant programs, diverse approved-vendor pools, including increased opportunities for minority-owned, female-owned, veteran-owned, and disability-owned business enterprises;

(7) improve customer service performance and engagement;

(8) address the particular burdens faced by consumers in environmental justice and equity investment eligible communities, including shareholder, consumer, and publicly funded bill payment assistance and credit and collection policies, and ensure equitable disconnections, late fees, or arrearages as a result of utility credit and collection practices, which may include consideration of impact by zip code; and

(9) implement or otherwise enhance current supplier diversity programs to increase diverse contractor participation in professional services, subcontracting, and prime contracting opportunities with programs that address barriers to access. Supplier diversity programs shall address specific barriers related to RFP and contract access, access to capital, information technology and cyber security access and costs, administrative burdens, and quality control with specific metrics, outcomes, and demographic data reported.

(d) Multi-Year Rate Plan.

(1) If an electric utility had a performance-based formula rate in effect under Section 16-108.5 as of December 31, 2020, then the utility may file a petition proposing tariffs implementing a 4-year Multi-Year Rate Plan as provided in this Section no later than, January 20, 2023, for delivery service rates to be effective for the billing periods January 1, 2024 through December 31, 2027. The Commission shall issue an order approving or approving as modified the utility's plan no later than December 20, 2023. The term "Multi-Year Rate Plan" refers to a plan establishing the base rates the utility shall charge for each delivery year of the 4-year period to be covered by the plan, which shall be subject to modification only as expressly allowed in this Section.

(2) A utility proposing a Multi-Year Rate Plan shall provide a 4-year investment plan and a description of the utility's major planned investments, including, at a minimum, all investments of $2,000,000 or greater over the plan period for an electric utility that serves more than 3,000,000 retail customers in the State or $500,000 for an electric utility that serves less than 3,000,000 retail customers in the State but more than 500,000 retail customers in the State. The 4-year investment plan must be consistent with the Multi-Year Integrated Grid Plan described in Section 16-105.17 of this Act. The investment plan shall provide sufficiently detailed information, as required by the Commission, including, at a minimum, a description of each investment, the location of the investment, and an explanation of the need for and benefit of such an investment to the extent known.

(3) The Multi-Year Rate Plan shall be implemented through a tariff filed with the Commission consistent with the provisions of this paragraph (3) that shall apply to all delivery service customers. The Commission shall initiate and conduct an investigation of the tariff in a manner consistent with the provisions of this paragraph (3) and the provisions of Article IX of this Act, to the extent they do not conflict with this paragraph (3). The Multi-Year Rate Plan approved by the Commission shall do the following:

(A) Provide for the recovery of the utility's forecasted rate base, based on the 4-year investment plan and the utility's Integrated Grid Plan. The forecasted rate base must include the utility's planned capital investments, with rates based on average annual plant investment, and investment-related costs, including income tax impacts, depreciation, and ratemaking adjustments and costs that are prudently incurred and reasonable in amount consistent with Commission practice and law. The process used to develop the forecasts must be iterative, rigorous, and lead to forecasts that reasonably represent the utility's investments during the forecasted period and ensure that the investments are projected to be used and useful during the annual investment period and least cost, consistent with the provisions of Articles VIII and IX of this Act.

(B) The cost of equity shall be approved by the Commission consistent with Commission practice and law.

(C) The revenue requirement shall reflect the utility's actual capital structure for the applicable calendar year. A year-end capital structure that includes a common equity ratio of up to and including 50% of the total capital structure shall be deemed prudent and reasonable. A higher common equity ratio must be specifically approved by the Commission.

(E) Provide for recovery of prudent and reasonable projected operating expenses, giving effect to ratemaking adjustments, consistent with Commission practice and law under Article IX of this Act. Operating expenses for years after the first year of the Multi-Year Rate Plan may be estimated by the use of known and measurable changes, expense reductions associated with planned capital investments as appropriate, and reasonable and appropriate escalators, indices, or other metrics.

(F) Amortize the amount of unprotected property-related excess accumulated deferred income taxes in rates as of January 1, 2023 over a period ending December 31, 2027, unless otherwise required to amortize the excess deferred income tax pursuant to Section 16-108.21 of this Act.

(G) Allow recovery of incentive compensation expense that is based on the achievement of operational metrics, including metrics related to budget controls, outage duration and frequency, safety, customer service, efficiency and productivity, environmental compliance and attainment of affordability and environmental goals, and other goals and metrics approved by the Commission. Incentive compensation expense that is based on net income or an affiliate's earnings per share shall not be recoverable.

(H) To the maximum extent practicable, align the 4-year investment plan and annual capital budgets with the electric utility's Multi-Year Integrated Grid Plan.

(4) The Commission shall establish annual rates for each year of the Multi-Year Rate Plan that accurately reflect and are based only upon the utility's reasonable and prudent costs of service over the term of the plan, including the effect of all ratemaking adjustments consistent with Commission practice and law as determined by the Commission, provided that the costs are not being recovered elsewhere in rates. Tariff riders authorized by the Commission may continue outside of a plan authorized under this Section to the extent such costs are not recovered elsewhere in rates. For the first multi-year rate plan, the burden of proof shall be on the electric utility to establish the prudence of investments and expenditures and to establish that such investments consistent with and reasonably necessary to meet the requirements of the utility's first approved Multi-Year Integrated Grid Plan described in Section 16-105.17 of this Act. For subsequent Multi-Year Rate Plans, the burden of proof shall be on the electric utility to establish the prudence of investments and expenditures and to establish that such investments are consistent with and reasonably necessary to meet the requirements of the utility's most recently approved Multi-Year Integrated Grid Plan described in Section 16-105.17 of this Act. The sole fact that a cost differs from that incurred in a prior period or that an investment is different from that described in the Multi-Year Integrated Grid Plan shall not imply the imprudence or unreasonableness of that cost or investment. The sole fact that an investment is the same or similar to that described in the Multi-Year Integrated Grid Plan shall not imply prudence and reasonableness of that investment.

(5) To facilitate public transparency, all materials, data, testimony, and schedules shall be provided to the Commission in an editable, machine-readable electronic format including .doc, .docx, .xls, .xlsx, and similar file formats, but not including .pdf or .exif. Should utilities designate any materials confidential, they shall have an affirmative duty to explain why the particular information is marked confidential. In determining prudence and reasonableness of rates, the Commission shall make its determination based upon the record, including each public comment filed or provided orally at open meetings consistent with the Commission's rules and practices.

(6) The Commission may, by order, establish terms, conditions, and procedures for submitting and approving a Multi-Year Rate Plan necessary to implement this Section and ensure that rates remain just and reasonable during the course of the plan, including terms and procedures for rate adjustment.

(7) An electric utility that files a tariff pursuant to paragraph (3) of this subsection (e) must submit a one-time $300,000 filing fee at the time the Chief Clerk of the Commission accepts the filing, which shall be a recoverable expense.

(8) An electric utility operating under a Multi-Year Rate Plan shall file a new Multi-Year Rate Plan at least 300 days prior to the end of the initial Multi-Year Rate Plan unless it elects to file a general rate case pursuant to paragraph (9), and every 4 years thereafter, with a rate-effective date of the proposed tariffs such that, after the Commission suspension period, the rates would take effect immediately at the close of the final year of the initial Multi-Year Rate Plan. In subsequent Multi-Year Rate Plans, as in the initial plans, utilities and stakeholders may propose additional metrics that achieve the outcomes described in paragraph (2) of subsection (f) of this Section.

(9) Election of Rate Case.

(A) On or before the date prescribed by subparagraph (B) of paragraph (9) of this Section, electric utilities that serve more than 500,000 retail customers in the State shall file either a general rate case under Section 9-201 of this Act, or a Multi-Year Rate Plan, as set forth in paragraph (1) of this subsection (d).

(B) Electric utilities described in subparagraph (A) of paragraph (9) of this Section shall file their initial general rate case or Multi-Year Rate Plan, as applicable, with the Commission no later than January 20, 2023.

(C) Notwithstanding which rate filing option an electric utility elects to file on the date prescribed by subparagraph (B) of paragraph (9) of this Section, the electric utility shall be subject to the Multi-year Integrated Plan filing requirements.

(D) Following its initial rate filing pursuant to paragraph (2), an electric utility subject to the requirements of this Section shall thereafter be permitted to elect a different rate filing option consistent with any filing intervals established for a general rate case or Multi-Year Rate Plan, as follows:

(i) An electric utility that initially elected to file a Multi-Year Rate Plan and thereafter elects to transition to a general rate case may do so upon completion of the 4-year Multi-Year Rate Plan by filing a general rate case at the same time that the utility would have filed its subsequent Multi-Year Rate Plan, as specified in paragraph (8) of this subsection (d). Notwithstanding this election, the annual adjustment of the final year of the Multi-Year Rate Plan shall proceed as specified in paragraph (6) of subsection (f).

(ii) An electric utility that initially elected to a file general rate case and thereafter elects to transition to a Multi-Year Rate Plan may do so only at the 4-year filing intervals identified by paragraph (8) of this subsection (d).

(10) The Commission shall approve tariffs establishing rate design for all delivery service customers unless the electric utility makes the election specified in Section 16-105.5, in which case the rate design shall be subject to the provisions of that Section.

(11) The Commission shall establish requirements for annual performance evaluation reports to be submitted annually for performance metrics. Such reports shall include, but not be limited to, a description of the utility's performance under each metric and an identification of any extraordinary events that adversely affected the utility's performance.

(12) For the first Multi-Year Rate Plan, the Commission shall consolidate its investigation with the proceeding under Section 16-105.17 to establish the Multi-Year Integrated Grid Plan no later than 45 days after plan filing.

(13) Where a rate change under a Multi-Year Rate Plan will result in a rate increase, an electric utility may propose a rate phase-in plan that the Commission shall approve with or without modification or deny in its final order approving the new delivery services rates. A proposed rate phase-in plan under this paragraph (13) must allow the new delivery services rates to be implemented in no more than 2 steps, as follows: in the first step, at least 50% of the approved rate increase must be reflected in rates, and, in the second step, 100% of the rate increase must be reflected in rates. The second step's rates must take effect no later than 12 months after the first step's rates were placed into effect. The portion of the approved rate increase not implemented in the first step shall be recorded on the electric utility's books as a regulatory asset, and shall accrue carrying costs to ensure that the utility does not recover more or less than it otherwise would because of the deferral. This portion shall be recovered, with such carrying costs at the weighted average cost of capital, through a surcharge applied to retail customer bills that (i) begins no later than 12 months after the date on which the second step's rates went into effect and (ii) is applied over a period not to exceed 24 months. Nothing in this paragraph is intended to limit the Commission's authority to mitigate the impact of rates caused by rate plans, or any other instance on a revenue-neutral basis; nor shall it mitigate a utility's ability to make proposals to mitigate the impact of rates. When a deferral, or similar method, is used to mitigate the impact of rates, the utility should be allowed to recover carrying costs.

(14) Notwithstanding the provisions of Section (13), the Commission may, on its own initiative, take revenue-neutral measures to relieve the impact of rate increases on customers. Such initiatives may be taken by the Commission in the first Multi-Year Rate Plan, subsequent multi-year plans, or in other instances described in this Act.

(15) Whenever during the pendency of a Multi-year Rate Plan, an electric utility subject to this Section becomes aware that, due to circumstances beyond its control, prudent operating practices will require the utility to make adjustments to the Multi-Year Rate Plan, the electric utility may file a petition with the Commission requesting modification of the approved annual revenue requirements included in the Multi-Year Rate Plan. The electric utility must support its request with evidence demonstrating why a modification is necessary, due to circumstances beyond the utility's control, to follow prudent operating practices and must set forth the changes to each annual revenue requirement to be approved, and the basis for any changes in anticipated operating expenses or capital investment levels. The utility shall affirmatively address the impact of the changes on the Multi-Year Integrated Grid Plan and Multi-Year Rate Plan originally submitted and approved by the Commission. Any interested party may file an objection to the changes proposed, or offer alternatives to the utility's proposal, as supported by testimony and evidence. After notice and hearing, the Commission shall issue a final order regarding the electric utility's request no later than 180 days after the filing of the petition.

(e) Performance incentive mechanisms.

(1) The electric industry is undergoing rapid transformation, including fundamental changes in how electricity is generated, procured, and delivered and how customers are choosing to participate in the supply and delivery of electricity to and from the electric grid. Building upon the State's goals to increase the procurement of electricity from renewable energy resources, including distributed generation and storage devices, the General Assembly finds that electric utilities should make cost-effective investments that support moving forward on Illinois' clean energy policies. It is therefore in the State's interest for the Commission to establish performance incentive mechanisms in order to better tie utility revenues to performance and customer benefits, accelerate progress on Illinois energy and other goals, ensure equity and affordability of rates for all customers, including low-income customers, and hold utilities publicly accountable.

(2) The Commission shall approve, based on the substantial evidence proffered in the proceeding initiated pursuant to this subsection performance metrics that, to the extent practicable and achievable by the electric utility, encourage cost-effective, equitable utility achievement of the outcomes described in this subsection (e) while ensuring no degradation in the significant performance improvement achieved through previously established performance metrics. For each electric utility, the Commission shall approve metrics designed to achieve incremental improvements over baseline performance values and targets, over a performance period of up to 10 years, and no less than 4 years.

(A) The Commission shall approve no more than 8 metrics, with at least one metric from each of the categories below, for each electric utility, from subparagraphs (i) through (vi) of this subsection (A). Upon a utility request, the Commission may approve the use of a specific, measurable, and achievable tracking metric described in paragraph (3) of subsection (e) as a performance metric pursuant to paragraph (2) of subsection (e).

(i) Metrics designed to ensure the utility maintains and improves the high standards of both overall and locational reliability and resiliency, and makes improvements in power quality, including and particularly in environmental justice and equity investment eligible communities.

(ii) Peak load reductions attributable to demand response programs.

(iii) Supplier diversity expansion, including diverse contractor participation in professional services, subcontracting, and prime contracting opportunities, development of programs that address the barriers to access, aligning demographics of contractors to the demographics in the utility's service territory, establish long-term mentoring relationships that develop and remove barriers to access for diverse and underserved contractors. The utilities shall provide solutions, resources, and tools to address complex barriers of entry related to costly and time-intensive cyber security requirements, increasingly complex information technology requirements, insurance barriers, service provider sign-up process barriers, administrative process barriers, and other barriers that inhibit access to RFPs and contracts. For programs with contracts over $1,000,000, winning bidders must demonstrate a subcontractor development or mentoring relationship with at least one of their diverse subcontracting partners for a core component of the scope of the project. The mentoring time and cost shall be taken into account in the creation of RFP and shall include a structured and measured plan by the prime contractor to increase the capabilities of the subcontractor in their proposed scope. The metric shall include reporting on all supplier diversity programs by goals, program results, demographics and geography, with separate reporting by category of minority-owned, female-owned, veteran-owned, and disability-owned business enterprise metrics. The report shall include resources and expenses committed to the programs and conversion rates of new diverse utility contractors.

(iv) Achieve affordable customer delivery service costs, with particular emphasis on keeping the bills of lower-income households, households in equity investment eligible communities, and household in environmental justice communities within a manageable portion of their income and adopting credit and collection policies that reduce disconnections for these households specifically and for customers overall to ensure equitable disconnections, late fees, or arrearages as a result of utility credit and collection practices, which may include consideration of impact by zip code.

(v) Metrics designed around the utility's timeliness to customer requests for interconnection in key milestone areas, such as: initial response, supplemental review, and system feasibility study; improved average service reliability index for those customers that have interconnected a distributed renewable energy generation device to the utility's distribution system and are lawfully taking service under an applicable tariff; offering a variety of affordable rate options, including demand response, time of use rates for delivery and supply, real-time pricing rates for supply; comprehensive and predictable net metering, and maximizing the benefits of grid modernization and clean energy for ratepayers; and improving customer access to utility system information according to consumer demand and interest.

(vi) Metrics designed to measure the utility's customer service performance, which may include the average length of time to answer a customer's call by a customer service representative, the abandoned call rate and the relative ranking of the electric utility, by a reputable third-party organization, in customer service satisfaction when compared to other similar electric utilities in the Midwest region.

(B) Performance metrics shall include a description of the metric, a calculation method, a data collection method, annual performance targets, and any incentives or penalties for the utility's achievement of, or failure to achieve, their performance targets, provided that the total amount of potential incentives and penalties shall be symmetrical. Incentives shall be rewards or penalties or both, reflected as basis points added to, or subtracted from, the utility's cost of equity. The metrics and incentives shall apply for the entire time period covered by a Multi-Year Rate Plan. The total for all metrics shall be equal to 40 basis points, however, the Commission may adjust the basis points upward or downward by up to 20 basis points for any given Multi-Year Rate Plan, as appropriate, but in no event may the total exceed 60 basis points or fall below 20 basis points.

(C) Metrics related to reliability shall be implemented to ensure equitable benefits to environmental justice and equity investment eligible communities, as defined in this Act.

(D) The Commission shall approve performance metrics that are reasonably within control of the utility to achieve. The Commission also shall not approve a metric that is solely expected to have the effect of reducing the workforce. Performance metrics should measure outcomes and actual, rather than projected, results where possible. Nothing in this paragraph is intended to require that different electric utilities must be subject to the same metrics, goals, or incentives.

(E) Increases or enhancements to an existing performance goal or target shall be considered in light of other metrics, cost-effectiveness, and other factors the Commission deems appropriate. Performance metrics shall include one year of tracking data collected in a consistent manner, verifiable by an independent evaluator in order to establish a baseline and measure outcomes and actual results against projections where possible.

(F) For the purpose of determining reasonable performance metrics and related incentives, the Commission shall develop a methodology to calculate net benefits that includes customer and societal costs and benefits and quantifies the effect on delivery rates. In determining the appropriate level of a performance incentive, the Commission shall consider: the extent to which the amount is likely to encourage the utility to achieve the performance target in the least cost manner; the value of benefits to customers, the grid, public health and safety, and the environment from achievement of the performance target, including in particular benefits to equity investment eligible community; the affordability of customer's electric bills, including low-income customers, the utility's revenue requirement, the promotion of renewable and distributed energy, and other such factors that the Commission deems appropriate. The consideration of these factors shall result in an incentive level that ensures benefits exceed costs for customers.

(G) Achievement of performance metrics are based on the assumptions that the utility will adopt or implement the technology and equipment, and make the investments to the extent reasonably necessary to achieve the goal. If the electric utility is unable to meet the performance metrics as a result of extraordinary circumstances outside of its control, including but not limited to government-declared emergencies, then the utility shall be permitted to file a petition with the Commission requesting that the utility be excused from compliance with the applicable performance goal or goals and the associated financial incentives and penalties. The burden of proof shall be on the utility, consistent with Article IX, and the utility's petition shall be supported by substantial evidence. The Commission shall, after notice and hearing, enter its order approving or denying, in whole or in part, the utility's petition based on the extent to which the utility demonstrated that its achievement of the affected metrics and performance goals was hindered by extraordinary circumstances outside of the utility's control.

(3) The Commission shall approve reasonable and appropriate tracking metrics to collect and monitor data for the purpose of measuring and reporting utility performance and for establishing future performance metrics. These additional tracking metrics shall include at least one metric from each of the following categories of performance:

(A) Minimize emissions of greenhouse gases and other air pollutants that harm human health, particularly in environmental justice and equity investment eligible communities, through minimizing total emissions by accelerating electrification of transportation, buildings and industries where such electrification results in net reductions, across all fuels and over the life of electrification measures, of greenhouse gases and other pollutants, taking into consideration the fuel mix used to produce electricity at the relevant hour and the effect of accelerating electrification on electricity delivery services rates, supply prices and peak demand, provided the revenues the utility receives from accelerating electrification of transportation, buildings and industries exceed the costs.

(B) Enhance the grid's flexibility to adapt to increased deployment of nondispatchable resources, improve the ability and performance of the grid on load balancing, and offer a variety of rate plans to match consumer consumption patterns and lower consumer bills for electricity delivery and supply.

(C) Ensure rates reflect cost savings attributable to grid modernization and utilize distributed energy resources that allow the utility to defer or forgo traditional grid investments that would otherwise be required to provide safe and reliable service.

(D) Metrics designed to create and sustain full-time-equivalent jobs and opportunities for all segments of the population and workforce, including minority-owned businesses, women-owned businesses, veteran-owned businesses, and businesses owned by a person or persons with a disability, and that do not, consistent with State and federal law, discriminate based on race or socioeconomic status as a result of this amendatory Act of the 102nd General Assembly.

(E) Maximize and prioritize the allocation of grid planning benefits to environmental justice and economically disadvantaged customers and communities, such that all metrics provide equitable benefits across the utility's service territory and maintain and improve utility customers' access to uninterrupted utility services.

(4) The Commission may establish new tracking and performance metrics in future Multi-Year Rate Plans to further measure achievement of the outcomes set forth in paragraph (2) of subsection (f) of this Section and the other goals and requirements of this Section.

(5) The Commission shall also evaluate metrics that were established in prior Multi-Year Rate Plans to determine if there has been an unanticipated material change in circumstances such that adjustments are required to improve the likelihood of the outcomes described in paragraph (2) of subsection (f). For metrics that were established in prior Multi-Year Rate Plan proceedings and that the Commission elects to continue, the design of these metrics, including the goals of tracking metrics and the targets and incentive levels and structures of performance metrics, may be adjusted pursuant to the requirements in this Section. The Commission may also change, adjust or phase out tracking and performance metrics that were established in prior Multi-Year Rate Plan proceedings if these metrics no longer meet the requirements of this Section or if they are rendered obsolete by the changing needs and technology of an evolving grid. Additionally, performance metrics that no longer require an incentive to create improved utility performance may become tracking metrics in a Multi-Year Rate Plan proceeding.

(6) The Commission shall initiate a workshop process no later than August 1, 2021, or 15 days after the effective date of this amendatory Act of the 102nd General Assembly, whichever is later, for the purpose of facilitating the development of metrics for each utility. The workshop shall be coordinated by the staff of the Commission, or a facilitator retained by staff, and shall be organized and facilitated in a manner that encourages representation from diverse stakeholders and ensures equitable opportunities for participation, without requiring formal intervention or representation by an attorney. Working with staff of the Commission the facilitator may conduct a combination of workshops specific to a utility or applicable to multiple utilities where content and stakeholders are substantially similar. The workshop process shall conclude no later than October 31, 2021. Following the workshop, the staff of the Commission, or the facilitator retained by the Staff, shall prepare and submit a report to the Commission that identifies the participants in the process, the metrics proposed during the process, any material issues that remained unresolved at the conclusions of such process, and any recommendations for workshop process improvements. Any workshop participant may file comments and reply comments in response to the Staff report.

(A) No later than January, 20, 2022, each electric utility that intends to file a petition pursuant to subsection (b) of this Section shall file a petition with the Commission seeking approval of its performance metrics, which shall include for each metric, at a minimum, (i) a detailed description, (ii) the calculation of the baseline, (iii) the performance period and overall performance goal, provided that the performance period shall not commence prior to January 1, 2024, (iv) each annual performance goal, (v) the performance adjustment, which shall be a symmetrical basis point increase or decrease to the utility's cost of equity based on the extent to which the utility achieved the annual performance goal, and (vi) the new or modified tariff mechanism that will apply the performance adjustments. The Commission shall issue its order approving, or approving with modification, the utility's proposed performance metrics no later than September 30, 2022.

(B) No later than August 1, 2025, the Commission shall initiate a workshop process that conforms to the workshop purpose and requirements of this paragraph (6) of this Section to the extent they do not conflict. The workshop process shall conclude no later than October 31, 2025, and the staff of the Commission, or the facilitator retained by the Staff, shall prepare and submit a report consistent with the requirements described in this paragraph (6) of this Section. No later than January 20, 2026, each electric utility subject to the requirements of this Section shall file a petition the reflects, and is consistent with, the components required in this paragraph (6) of this Section, and the Commission shall issue its order approving, or approving with modification, the utility's proposed performance metrics no later than September 30, 2026.

(f) On May 1 of each year, following the approval of the first Multi-Year Rate Plan and its initial year, the Commission shall open an annual performance evaluation proceeding to evaluate the utilities' performance on their metric targets during the year just completed, as well as the appropriate Annual Adjustment as defined in paragraph (6). The Commission shall determine the performance and annual adjustments to be applied through a surcharge in the following calendar year.

(1) On February 15 of each year, prior to the annual performance evaluation proceeding, each utility shall file a performance evaluation report with the Commission that includes a description of and all data supporting how the utility performed under each performance metric and an identification of any extraordinary events that adversely impacted the utility's performance.

(2) The metrics approved under this Section are based on the assumptions that the utility may fully implement the technology and equipment, and make the investments, required to achieve the metrics and performance goals. If the utility is unable to meet the metrics and performance goals because it was hindered by unanticipated technology or equipment implementation delays, government-declared emergencies, or other investment impediments, then the utility shall be permitted to file a petition with the Commission on or before the date that its report is due pursuant to paragraph (1) of this subsection (f) requesting that the utility be excused from compliance with the applicable performance goal or goals. The burden of proof shall be on the utility, consistent with Article IX, and the utility's petition shall be supported by substantial evidence. No later than 90 days after the utility files its petition, the Commission shall, after notice and hearing, enter its order approving or denying, in whole or in part, the utility's petition based on the extent to which the utility demonstrated that its achievement of the affected metrics and performance goals was hindered by unanticipated technology or equipment implementation delays, or other investment impediments, that were reasonably outside of the utility's control.

(3) The electric utility shall provide for an annual independent evaluation of its performance on metrics. The independent evaluator shall review the utility's assumptions, baselines, targets, calculation methodologies, and other relevant information, especially ensuring that the utility's data for establishing baselines matches actual performance, and shall provide a report to the Commission in each annual performance evaluation describing the results. The independent evaluator shall present this report as evidence as a nonparty participant and shall not be represented by the utility's legal counsel. The independent evaluator shall be hired through a competitive bidding process with approval of the contract by the Commission.

The Commission shall consider the report of the independent evaluator in determining the utility's achievement of performance targets. Discrepancies between the utility's assumptions, baselines, targets, or calculations and those of the independent evaluator shall be closely scrutinized by the Commission. If the Commission finds that the utility's reported data for any metric or metrics significantly and incorrectly deviates from the data reported by the independent evaluator, then the Commission shall order the utility to revise its data collection and calculation process within 60 days, with specifications where appropriate.

(4) The Commission shall, after notice and hearing in the annual performance evaluation proceeding, enter an order approving the utility's performance adjustment based on its achievement of or failure to achieve its performance targets no later than December 20 each year. The Commission-approved penalties or incentives shall be applied beginning with the next calendar year.

(5) In order to promote the transparency of utility investments during the effective period of a multi-year rate plan, inform the Commission's investigation and adjustment of rates in the annual adjustment process, and to facilitate the participation of stakeholders in the annual adjustment process, an electric utility with an effective Multi-Year Rate Plan shall, within 90 days of the close of each quarter during the Multi-Year Rate Plan period, submit to the Commission a report that summarizes the additions to utility plant that were placed into service during the prior quarter, which for purposes of the report shall be the most recently closed fiscal quarter. The report shall also summarize the utility plant the electric utility projects it will place into service through the end of the calendar year in which the report is filed. The projections, estimates, plans, and forward-looking information that are provided in the reports pursuant to this paragraph (5) are for planning purposes and are intended to be illustrative of the investments that the utility proposes to make as of the time of submittal. Nothing in this paragraph (5) precludes, or is intended to limit, a utility's ability to modify and update its projections, estimates, plans, and forward-looking information previously submitted in order to reflect stakeholder input or other new or updated information and analysis, including, but not limited to, changes in specific investment needs, customer electric use patterns, customer applications and preferences, and commercially available equipment and technologies, however the utility shall explain any changes or deviations between the projected investments from the quarterly reports and actual investments in the annual report. The reports submitted pursuant to this subsection are intended to be flexible planning tools, and are expected to evolve as new information becomes available. Within 7 days of receiving a quarterly report, the Commission shall timely make such report available to the public by posting it on the Commission's website. Each quarterly report shall include the following detail:

(A) The total dollar value of the additions to utility plant placed in service during the prior quarter;

(B) A list of the major investment categories the electric utility used to manage its routine standing operational activities during the prior quarter including the total dollar amount for the work reflected in each investment category in which utility plant in service is equal to or greater than $2,000,000 for an electric utility that serves more than 3,000,000 customers in the State or $500,000 for an electric utility that serves less than 3,000,000 customers but more than 500,000 customers in the State as of the last day of the quarterly reporting period, as well as a summary description of each investment category;

(C) A list of the projects which the electric utility has identified by a unique investment tracking number for utility plant placed in service during the prior quarter for utility plant placed in service with a total dollar value as of the last day of the quarterly reporting period that is equal to or greater than $2,000,000 for an electric utility that serves more than 3,000,000 customers in the State or $500,000 for an electric utility that serves less than 3,000,000 retail customers but more than $500,000 retail customers in the State, as well as a summary of each project;

(D) The estimated total dollar value of the additions to utility plant projected to be placed in service through the end of the calendar year in which the report is filed;

(E) A list of the major investment categories the electric utility used to manage its routine standing operational activities with utility plant projected to be placed in service through the end of the calendar year in which the report is filed, including the total dollar amount for the work reflected in each investment category in which utility plant in service is projected to be equal to or greater than $2,000,000 for an electric utility that serves more than 3,000,000 customers in the State or $500,000 for an electric utility that serves less than 3,000,000 retail customers but more than 500,000 retail customers in the State, as well as a summary description of each investment category; and

(F) A list of the projects for which the electric utility has identified by a unique investment tracking number for utility plant projected to be placed in service through the end of the calendar year in which the report is filed with an estimated dollar value that is equal to or greater than $2,000,000 for an electric utility that serves more than 3,000,000 customers in the State or $500,000 for an electric utility that serves less than 3,000,000 retails customers but more than $500,000 retail customers in the State, as well as a summary description of each project.

(6) As part of the Annual Performance Adjustment, the electric utility shall submit evidence sufficient to support a determination of its actual revenue requirement for the applicable calendar year, consistent with the provisions of paragraphs (d) and (f) of this subsection. The electric utility shall bear the burden of demonstrating that its costs were prudent and reasonable, subject to the provisions of paragraph (4) of this subsection (f). The Commission's review of the electric utility's annual adjustment shall be based on the same evidentiary standards, including, but not limited to, those concerning the prudence and reasonableness of the known and measurable costs forecasted to be incurred by the utility, and the used and usefulness of the actual plant investment pursuant to Section 9-211 of this Act, that the Commission applies in a proceeding to review a filing for changes in rates pursuant to Section 9-201 of this Act. The Commission shall determine the prudence and reasonableness of the actual costs incurred by the utility during the applicable calendar year, as well as determine the original cost of plant in service as of the end of the applicable calendar year. The Commission shall then determine the Annual Adjustment, which shall mean the amount by which, the electric utility's actual revenue requirement for the applicable year of the Multi-Year Rate Plan either exceeded, or was exceeded by, the revenue requirement approved by the Commission for such calendar year, plus carrying costs calculated at the weighted average cost of capital approved for the Multi-Year Rate Plan.

The Commission's determination of the electric utility's actual revenue requirement for the applicable calendar year shall be based on:

(A) the Commission-approved used and useful, prudent and reasonable actual costs for the applicable calendar year, which shall be determined pursuant to the following criteria:

(i) The overall level of actual costs incurred during the calendar year, provided that the Commission may not allow recovery of actual costs that are more than 105% of the approved revenue requirement calculated as provided in item (ii) of this subparagraph (A), except to the extent the Commission approves a modification of the Multi-Year Rate Plan to permit such recovery.

(ii) The calculation of 105% of the revenue requirement required by this subparagraph (A) shall exclude the revenue requirement impacts of the following volatile and fluctuating variables that occurred during the year: (i) storms and weather-related events for which the utility provides sufficient evidence to demonstrate that such expenses were not foreseeable and not in control of the utility; (ii) new business; (iii) changes in interest rates; (iv) changes in taxes; (v) facility relocations; (vi) changes in pension or post-retirement benefits costs due to fluctuations in interest rates, market returns or actuarial assumptions; (vii) amortization expenses related to costs; and (viii) changes in the timing of when an expenditure or investment is made such that it is accelerated to occur during the applicable year or deferred to occur in a subsequent year.

(B) the year-end rate base;

(C) the cost of equity approved in the multi-year rate plan; and

(D) the electric utility's actual year-end capital structure, provided that the common equity ratio in such capital structure may not exceed the common equity ratio that was approved by the Commission in the Multi-Year Rate Plan.

(2) The Commission's determinations of the prudence and reasonableness of the costs incurred for the applicable year, and of the original cost of plant in service as of the end of the applicable calendar year, shall be final upon entry of the Commission's order and shall not be subject to collateral attack in any other Commission proceeding, case, docket, order, rule, or regulation; however, nothing in this Section shall prohibit a party from petitioning the Commission to rehear or appeal to the courts the order pursuant to the provisions of this Act.

(g) During the period leading to approval of the first Multi-Year Integrated Grid Plan, each electric utility will necessarily continue to invest in its distribution grid. Those investments will be subject to a determination of prudence and reasonableness consistent with Commission practice and law. Any failure to conform to the Multi-Year Integrated Grid Plan ultimately approved shall not imply imprudence or unreasonableness.

(h) After calculating the Performance Adjustment and Annual Adjustment, the Commission shall order the electric utility to collect the amount in excess of the revenue requirement from customers, or issue a refund to customers, as applicable, to be applied through a surcharge beginning with the next calendar year.

Electric utilities subject to the requirements of this Section shall be permitted to file new or revised tariffs to comply with the provisions of, and Commission orders entered pursuant to, this Section.

(Source: P.A. 102-662, eff. 9-15-21.)

(220 ILCS 5/16-108.19)

Sec. 16-108.19. Division of Integrated Distribution Planning.

(a) The Commission shall establish the Division of Integrated Distribution Planning within the Bureau of Public Utilities. The Division shall be staffed by no less than 13 professionals, including engineers, rate analysts, accountants, policy analysts, utility research and analysis analysts, cybersecurity analysts, informational technology specialists, and lawyers to review and evaluate Integrated Grid Plans, updates to Integrated Grid Plans, audits, and other duties as assigned by the Chief of the Public Utilities Bureau.

(b) The Division of Integrated Distribution Planning shall be established by January 1, 2022.

(Source: P.A. 102-662, eff. 9-15-21.)

(220 ILCS 5/16-108.20)

Sec. 16-108.20. Cost-effectiveness incentive.

(a) The General Assembly finds that it is critical to maintain this focus on utility bill affordability as the State transitions to a clean energy economy. The General Assembly accordingly finds that it may be in the public interest to incentivize electric utilities to reduce spending where practicable and where such reduction will not have an adverse impact on the State's clean energy goals; this Act's overarching objectives of efficiency, environmental quality, reliability, and equity; or the utility's achievement on its metrics.

(b) In addition to the performance metrics established and approved by the Commission pursuant to Section 16-108.18 of this Act, the Commission may also determine whether each electric utility that serves more than 500,000 retail customers in the State may also be subject to a performance metric that incentivizes the utility to make cost-effective choices and stretch to achieve cost savings for public utility customers where it can do so without adverse impact (on efficiency, environmental quality, reliability or equity).

(c) The Commission shall initiate a docket on the subject of cost-effective shared savings, and shall make a determination if it would be in the public interest and the best interest of electric utility customers to establish a performance metric that incentivizes utilities to reduce their costs while meeting all other performance metrics and addressing state goals as found in this Act.

(d) At the conclusion of the docket, if the Commission determines that such an incentive is in the best interest of consumers, the Commission shall have the authority to set a specific metric as part of the performance metric process pursuant to Section 16-108.18. Such metric shall include a determination of the percentage of the shared savings to be returned to the customers and to the utility. Such percentage shall be set so as to incentivize the utility to make savings, while providing substantial benefits to consumers.

(Source: P.A. 102-662, eff. 9-15-21.)

(220 ILCS 5/16-108.21)

Sec. 16-108.21. Accelerated repayment of excess deferred income tax.

(a) The General Assembly finds:

(1) That a portion of each utility's compensation from ratepayers is attributable to reimbursement for federal taxes paid by the utility.

(2) Due to the enactment of the 2017 Tax Cut and Jobs Act, the federal income tax rate for corporations was lowered, resulting in excess deferred income tax for distribution utilities in the State that serve more than 100,000 customers.

(3) In proceedings before the Commission, it was determined that the repayment period to ratepayers by the utilities which serve more than 100,000 customers in this State for this excess deferred income tax would be 39.5 years.

(4) The COVID-19 pandemic has harmed many customers of all rate classes in the State, and resulted in the Commission adopting a number of measures to provide relief for customers.

(5) It would be in the interest of the State for the repayment of the excess deferred income tax referenced in Commission Dockets 19-0436, 19-0387, 20-0381, and 20-0393 to be paid back to ratepayers on a timetable greatly accelerated from that set forth in the dockets.

(b) Notwithstanding the Commission Orders in Dockets 19-0436, 19-0387, 20-0381, and 20-0382, the excess deferred income tax referenced in those dockets shall be fully refunded to ratepayers by the respective utilities no later than December 31, 2025.

(c) The Commission shall initiate a docket to provide for the refunding of these excess deferred income taxes to ratepayers of the utilities referenced in those dockets, and shall set forth any necessary provisions to accomplish the reimbursement on the schedule delineated in subsection (b).

(Source: P.A. 102-662, eff. 9-15-21.)

(220 ILCS 5/16-108.25)

Sec. 16-108.25. Tariff regarding transition in rates. Each electric utility that files a Multi-Year Rate Plan pursuant to Section 16-108.18 of this Act or a general rate case as described in this Act shall also file a tariff that sets forth the processes and procedures by which the electric utility will transition from its current rates and ratemaking mechanism to the new Multi-Year Rate Plan or a general rate case and rates that will take effect under that multi-year plan. The proposed tariff shall be consistent with the tariff approved by the Commission in Docket No. 20-0426 and covers the period until the new delivery rates are effective and all required processes and procedures described in the tariff have been completed.

Each electric utility subject to this Section shall file its proposed tariff no later than 30 days after the effective date of this amendatory Act of the 102nd General Assembly, and the Commission shall enter its order approving the tariff no later than 120 days after it was filed if the Commission finds that the proposed tariff is consistent with the tariff previously approved in Docket No. 20-0426 for the period until the new delivery rates are effective and all required processes and procedures described in the tariff have been completed. If the Commission does not so find, then the Commission shall approve the utility's tariff with those modifications that are required to make the proposed tariff consistent with the tariff approved in Docket 20-0426 until the new delivery rates are effective and all required processes and procedures described in the tariff have been completed.

An electric utility that has a tariff in effect on the effective date of this amendatory Act of the 102nd General Assembly that provides for the transition from its current rates and ratemaking mechanism to new base rates approved pursuant to Article IX of this Act, shall file a compliance tariff modifying its existing tariff to comply with the provisions of this Section. The compliance tariff shall go into effect on 45 days' notice.

(Source: P.A. 102-662, eff. 9-15-21.)

(220 ILCS 5/16-108.30)

Sec. 16-108.30. Energy Transition Assistance Fund.

(a) The Energy Transition Assistance Fund is hereby created as a special fund in the State Treasury. The Energy Transition Assistance Fund is authorized to receive moneys collected pursuant to this Section. Subject to appropriation, the Department of Commerce and Economic Opportunity shall use moneys from the Energy Transition Assistance Fund consistent with the purposes of this Act.

(b) An electric utility serving more than 500,000 customers in the State shall assess an energy transition assistance charge on all its retail customers for the Energy Transition Assistance Fund. The utility's total charge shall be set based upon the value determined by the Department of Commerce and Economic Opportunity pursuant to subsection (d) or (e), as applicable, of Section 605-1075 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. For each utility, the charge shall be recovered through a single, uniform cents per kilowatt-hour charge applicable to all retail customers. For each utility, the charge shall not exceed 1.3% of the amount paid per kilowatthour by eligible retail customers during the year ending May 31, 2009.

(c) Within 75 days of the effective date of this amendatory Act of the 102nd General Assembly, each electric utility serving more than 500,000 customers in the State shall file with the Illinois Commerce Commission tariffs incorporating the energy transition assistance charge in other charges stated in such tariffs, which energy transition assistance charges shall become effective no later than the beginning of the first billing cycle that begins on or after January 1, 2022. Each electric utility serving more than 500,000 customers in the State shall, prior to the beginning of each calendar year starting with calendar year 2023, file with the Illinois Commerce Commission tariff revisions to incorporate annual revisions to the energy transition assistance charge as prescribed by the Department of Commerce and Economic Opportunity pursuant to Section 605-1075 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois so that such revision becomes effective no later than the beginning of the first billing cycle in each respective year.

(d) The energy transition assistance charge shall be considered a charge for public utility service.

(e) By the 20th day of the month following the month in which the charges imposed by this Section were collected, each electric utility serving more than 500,000 customers in the State shall remit to Department of Revenue all moneys received as payment of the energy transition assistance charge on a return prescribed and furnished by the Department of Revenue showing such information as the Department of Revenue may reasonably require. If a customer makes a partial payment, a public utility may apply such partial payments first to amounts owed to the utility. No customer may be subjected to disconnection of his or her utility service for failure to pay the energy transition assistance charge.

If any payment provided for in this subsection exceeds the electric utility's liabilities under this Act, as shown on an original return, the Department may authorize the electric utility to credit such excess payment against liability subsequently to be remitted to the Department under this Act, in accordance with reasonable rules adopted by the Department.

All the provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act that are not inconsistent with this Act apply, as far as practicable, to the charge imposed by this Act to the same extent as if those provisions were included in this Act. References in the incorporated Sections of the Retailers' Occupation Tax Act to retailers, to sellers, or to persons engaged in the business of selling tangible personal property mean persons required to remit the charge imposed under this Act.

(f) The Department of Revenue shall deposit into the Energy Transition Assistance Fund all moneys remitted to it in accordance with this Section.

(g) The Department of Revenue may establish such rules as it deems necessary to implement this Section.

(h) The Department of Commerce and Economic Opportunity may establish such rules as it deems necessary to implement this Section.

(Source: P.A. 102-662, eff. 9-15-21; 102-1031, eff. 5-27-22.)

(220 ILCS 5/16-109)

Sec. 16-109. Unbundling of delivery services; Commission review. The General Assembly finds that the offering of delivery services will, and is intended to, facilitate the development of competition for generation services, and that competition may develop for other services currently offered on a tariffed basis by the electric utility. The Commission shall open a proceeding to investigate the need for and desirability of different or additional unbundling of delivery services for some or all electric utilities 3 years from the date that a tariff for delivery services is first approved or allowed into effect pursuant to this Section. The Commission shall open an additional proceeding to again investigate the need for and desirability of different or additional unbundling of delivery services for some or all electric utilities, 3 years after the entry of its final order in the first investigation proceeding. The Commission shall issue its final order in each investigation proceeding no later than 6 months after the proceeding is initiated. In each such proceeding the Commission shall consider, at a minimum, the effect of additional unbundling on (i) the objective of just and reasonable rates, (ii) electric utility employees, and (iii) the development of competitive markets for electric energy services in Illinois. Specific changes to the delivery services tariffs of individual electric utilities to implement findings and directives stated in an order in an investigation proceeding initiated under this Section shall be addressed through individual electric utility tariff filings. The Commission may also, in accordance with Section 16-108, upon complaint or upon its own initiative without complaint, upon reasonable notice, enter upon a hearing concerning the need and desirability of requiring additional or other unbundling of delivery services offered by electric utilities.

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

(220 ILCS 5/16-109A)

Sec. 16-109A. Unbundling of prices for tariffed services; Commission investigation. In addition to the unbundling authorized under Sections 16-108 and 16-109, the Commission shall have the authority to investigate the need for, and to require, the restructuring or unbundling of prices for tariffed services, other than delivery services, offered by an electric utility; provided, however, that the Commission shall not enter an order requiring the restructuring or unbundling of prices for any such tariffed services for a customer class of an electric utility prior to the date that the class first becomes eligible for delivery services pursuant to Section 16-104.

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

(220 ILCS 5/16-110)

Sec. 16-110. Delivery services customer power purchase options.

(a) Each electric utility shall offer a tariffed service or services in accordance with the terms and conditions set forth in this Section pursuant to which its non-residential delivery services customers may purchase from the electric utility an amount of electric power and energy that is equal to or less than the amounts that are delivered by such electric utility.

(b) Except as provided in subsection (o) of Section 16-112, a non-residential delivery services customer that is paying transition charges to the electric utility shall be permitted to purchase electric power and energy from the electric utility at a price or prices equal to the sum of (i) the market values that are determined for the electric utility in accordance with Section 16-112 and used by the electric utility to calculate the customer's transition charges and (ii) a fee that compensates the electric utility for any administrative costs it incurs in arranging to supply such electric power and energy. The electric utility may require that the customer purchase such electric power and energy for periods of not less than one year and may also require that the customer give up to 30 days notice for a purchase of one year's duration, and 90 days notice for a purchase of more than one year's duration. A non-residential delivery service customer exercising the option described in this subsection may sell or assign its interests in the electric power or energy that the customer has purchased. In the case of any such assignment or sale by any non-residential delivery service customer to an alternative retail electric supplier that is serving such customer and has been certified pursuant to Section 16-115, an electric utility serving more than 500,000 customers shall provide such power and energy at the same market value as set forth in clause (i) of this subsection, together with the fee charged under clause (ii) of this subsection, less any costs included in such market value or fee with respect to retail marketing activities, provided, however, that in no event shall an electric utility be required after June 1, 2002 to provide power and energy at this market value plus fee that excludes marketing costs for any such assignment or sale by a non-residential customer to an alternative retail electric supplier. At least twice per year, each electric utility shall notify its small commercial retail customers, through bill inserts and other similar means, of their option to obtain electric power and energy through purchases at market value pursuant to this subsection.

(c) After the transition charge period applicable to a non-residential delivery services customer, and until the provision of electric power and energy is declared competitive for the customer group to which the customer belongs, a non-residential delivery services customer that paid any transition charges it was legally obligated to pay to an electric utility shall be permitted to purchase electric power and energy from the electric utility for contract periods of one year at a price or prices equal to the sum of (i) the market value determined for that customer's class pursuant to Section 16-112 and (ii) to the extent it is not included in such market value, a fee to compensate the electric utility for the service of arranging the supply or purchase of such electric power and energy. The electric utility may require that a delivery services customer give the following notice for such a purchase: (i) for a small commercial retail customer, not more than 30 days; (ii) for a nonresidential customer which is not a small commercial retail customer but which has maximum electrical demand of less than 500 kilowatts, not more than 6 months; (iii) for a nonresidential customer with maximum electrical demand of 500 kilowatts or more but less than one megawatt, not more than 9 months; and (iv) for a nonresidential customer with maximum electrical demand of one megawatt or more, not more than one year. At least twice per year, each electric utility shall notify its small commercial retail customers, through bill inserts or other similar means, of their option to obtain electric power and energy through purchases at market value pursuant to this subsection.

(d) After the transition charge period applicable to a non-residential delivery services customer, and until the provision of electric power and energy is declared competitive for the customer group to which the customer belongs, a non-residential delivery services customer, other than a small commercial retail customer, that paid any transition charges it was legally obligated to pay to an electric utility shall be permitted to purchase electric power and energy from the electric utility for contract periods of one year at a price or prices equal to (A) the sum of (i) the electric utility's actual cost of procuring such electric power and energy and (ii) a broker's fee to compensate the electric utility for arranging the supply, or, if the utility so elects, (B) the market value of electric power or energy provided by the electric utility determined as set forth in the electric utility's tariff for that customer's class. The electric utility may require that the delivery services customer give up to 30 days notice for such a purchase.

(e) Each delivery services customer purchasing electric power and energy from the electric utility pursuant to a tariff filed in accordance with this Section shall also pay all of the applicable charges set forth in the electric utility's delivery services tariffs and any other tariffs applicable to the services provided to that customer by the electric utility.

(f) An electric utility can require a retail customer taking delivery services that formerly generated electric power and energy for its own use and that would not otherwise pay transition charges on a portion of its electric power and energy requirements served on delivery services to pay transition charges on that portion of the customer's electric power and energy requirements as a condition of exercising the delivery services customer power purchase options set forth in this Section.

(Source: P.A. 90-561, eff. 12-16-97; 91-50, eff. 6-30-99.)

(220 ILCS 5/16-111)

Sec. 16-111. Rates and restructuring transactions during mandatory transition period; restructuring and other transactions.

(a) During the mandatory transition period, notwithstanding any provision of Article IX of this Act, and except as provided in subsections (b) and (f) of this Section, the Commission shall not (i) initiate, authorize or order any change by way of increase (other than in connection with a request for rate increase which was filed after September 1, 1997 but prior to October 15, 1997, by an electric utility serving less than 12,500 customers in this State), (ii) initiate or, unless requested by the electric utility, authorize or order any change by way of decrease, restructuring or unbundling (except as provided in Section 16-109A), in the rates of any electric utility that were in effect on October 1, 1996, or (iii) in any order approving any application for a merger pursuant to Section 7-204 that was pending as of May 16, 1997, impose any condition requiring any filing for an increase, decrease, or change in, or other review of, an electric utility's rates or enforce any such condition of any such order; provided, however, that this subsection shall not prohibit the Commission from:

(1) approving the application of an electric utility to implement an alternative to rate of return regulation or a regulatory mechanism that rewards or penalizes the electric utility through adjustment of rates based on utility performance, pursuant to Section 9-244;

(2) authorizing an electric utility to eliminate its fuel adjustment clause and adjust its base rate tariffs in accordance with subsection (b), (d), or (f) of Section 9-220 of this Act, to fix its fuel adjustment factor in accordance with subsection (c) of Section 9-220 of this Act, or to eliminate its fuel adjustment clause in accordance with subsection (e) of Section 9-220 of this Act;

(3) ordering into effect tariffs for delivery services and transition charges in accordance with Sections 16-104 and 16-108, for real-time pricing in accordance with Section 16-107, or the options required by Section 16-110 and subsection (n) of 16-112, allowing a billing experiment in accordance with Section 16-106, or modifying delivery services tariffs in accordance with Section 16-109; or

(4) ordering or allowing into effect any tariff to recover charges pursuant to Sections 9-201.5, 9-220.1, 9-221, 9-222 (except as provided in Section 9-222.1), 16-108, and 16-114 of this Act, Section 5-5 of the Electricity Infrastructure Maintenance Fee Law, Section 6-5 of the Renewable Energy, Energy Efficiency, and Coal Resources Development Law of 1997, and Section 13 of the Energy Assistance Act.

After December 31, 2004, the provisions of this subsection (a) shall not apply to an electric utility whose average residential retail rate was less than or equal to 90% of the average residential retail rate for the "Midwest Utilities", as that term is defined in subsection (b) of this Section, based on data reported on Form 1 to the Federal Energy Regulatory Commission for calendar year 1995, and which served between 150,000 and 250,000 retail customers in this State on January 1, 1995 unless the electric utility or its holding company has been acquired by or merged with an affiliate of another electric utility subsequent to January 1, 2002. This exemption shall be limited to this subsection (a) and shall not extend to any other provisions of this Act.

(b) Notwithstanding the provisions of subsection (a), each Illinois electric utility serving more than 12,500 customers in Illinois shall file tariffs (i) reducing, effective August 1, 1998, each component of its base rates to residential retail customers by 15% from the base rates in effect immediately prior to January 1, 1998 and (ii) if the public utility provides electric service to (A) more than 500,000 customers but less than 1,000,000 customers in this State on January 1, 1999, reducing, effective May 1, 2002, each component of its base rates to residential retail customers by an additional 5% from the base rates in effect immediately prior to January 1, 1998, or (B) at least 1,000,000 customers in this State on January 1, 1999, reducing, effective October 1, 2001, each component of its base rates to residential retail customers by an additional 5% from the base rates in effect immediately prior to January 1, 1998. Provided, however, that (A) if an electric utility's average residential retail rate is less than or equal to the average residential retail rate for a group of Midwest Utilities (consisting of all investor-owned electric utilities with annual system peaks in excess of 1000 megawatts in the States of Illinois, Indiana, Iowa, Kentucky, Michigan, Missouri, Ohio, and Wisconsin), based on data reported on Form 1 to the Federal Energy Regulatory Commission for calendar year 1995, then it shall only be required to file tariffs (i) reducing, effective August 1, 1998, each component of its base rates to residential retail customers by 5% from the base rates in effect immediately prior to January 1, 1998, (ii) reducing, effective October 1, 2000, each component of its base rates to residential retail customers by the lesser of 5% of the base rates in effect immediately prior to January 1, 1998 or the percentage by which the electric utility's average residential retail rate exceeds the average residential retail rate of the Midwest Utilities, based on data reported on Form 1 to the Federal Energy Regulatory Commission for calendar year 1999, and (iii) reducing, effective October 1, 2002, each component of its base rates to residential retail customers by an additional amount equal to the lesser of 5% of the base rates in effect immediately prior to January 1, 1998 or the percentage by which the electric utility's average residential retail rate exceeds the average residential retail rate of the Midwest Utilities, based on data reported on Form 1 to the Federal Energy Regulatory Commission for calendar year 2001; and (B) if the average residential retail rate of an electric utility serving between 150,000 and 250,000 retail customers in this State on January 1, 1995 is less than or equal to 90% of the average residential retail rate for the Midwest Utilities, based on data reported on Form 1 to the Federal Energy Regulatory Commission for calendar year 1995, then it shall only be required to file tariffs (i) reducing, effective August 1, 1998, each component of its base rates to residential retail customers by 2% from the base rates in effect immediately prior to January 1, 1998; (ii) reducing, effective October 1, 2000, each component of its base rates to residential retail customers by 2% from the base rate in effect immediately prior to January 1, 1998; and (iii) reducing, effective October 1, 2002, each component of its base rates to residential retail customers by 1% from the base rates in effect immediately prior to January 1, 1998. Provided, further, that any electric utility for which a decrease in base rates has been or is placed into effect between October 1, 1996 and the dates specified in the preceding sentences of this subsection, other than pursuant to the requirements of this subsection, shall be entitled to reduce the amount of any reduction or reductions in its base rates required by this subsection by the amount of such other decrease. The tariffs required under this subsection shall be filed 45 days in advance of the effective date. Notwithstanding anything to the contrary in Section 9-220 of this Act, no restatement of base rates in conjunction with the elimination of a fuel adjustment clause under that Section shall result in a lesser decrease in base rates than customers would otherwise receive under this subsection had the electric utility's fuel adjustment clause not been eliminated.

(c) Any utility reducing its base rates by 15% on August 1, 1998 pursuant to subsection (b) shall include the following statement on its bills for residential customers from August 1 through December 31, 1998: "Effective August 1, 1998, your rates have been reduced by 15% by the Electric Service Customer Choice and Rate Relief Law of 1997 passed by the Illinois General Assembly.". Any utility reducing its base rates by 5% on August 1, 1998, pursuant to subsection (b) shall include the following statement on its bills for residential customers from August 1 through December 31, 1998: "Effective August 1, 1998, your rates have been reduced by 5% by the Electric Service Customer Choice and Rate Relief Law of 1997 passed by the Illinois General Assembly.".

Any utility reducing its base rates by 2% on August 1, 1998 pursuant to subsection (b) shall include the following statement on its bills for residential customers from August 1 through December 31, 1998: "Effective August 1, 1998, your rates have been reduced by 2% by the Electric Service Customer Choice and Rate Relief Law of 1997 passed by the Illinois General Assembly.".

(d) (Blank.)

(e) (Blank.)

(f) During the mandatory transition period, an electric utility may file revised tariffs reducing the price of any tariffed service offered by the electric utility for all customers taking that tariffed service, which shall be effective 7 days after filing.

(g) Until all classes of tariffed services are declared competitive, an electric utility may, without obtaining any approval of the Commission other than that provided for in this subsection and notwithstanding any other provision of this Act or any rule or regulation of the Commission that would require such approval:

(1) implement a reorganization, other than a merger of 2 or more public utilities as defined in Section 3-105 or their holding companies;

(2) retire generating plants from service;

(3) sell, assign, lease or otherwise transfer assets to an affiliated or unaffiliated entity and as part of such transaction enter into service agreements, power purchase agreements, or other agreements with the transferee; provided, however, that the prices, terms and conditions of any power purchase agreement must be approved or allowed into effect by the Federal Energy Regulatory Commission; or

(4) use any accelerated cost recovery method including accelerated depreciation, accelerated amortization or other capital recovery methods, or record reductions to the original cost of its assets.

In order to implement a reorganization, retire generating plants from service, or sell, assign, lease or otherwise transfer assets pursuant to this Section, the electric utility shall comply with subsections (c) and (d) of Section 16-128, if applicable, and subsection (k) of this Section, if applicable, and provide the Commission with at least 30 days notice of the proposed reorganization or transaction, which notice shall include the following information:

(i) a complete statement of the entries that the electric utility will make on its books and records of account to implement the proposed reorganization or transaction together with a certification from an independent certified public accountant that such entries are in accord with generally accepted accounting principles and, if the Commission has previously approved guidelines for cost allocations between the utility and its affiliates, a certification from the chief accounting officer of the utility that such entries are in accord with those cost allocation guidelines;

(ii) a description of how the electric utility will use proceeds of any sale, assignment, lease or transfer to retire debt or otherwise reduce or recover the costs of services provided by such electric utility;

(iii) a list of all federal approvals or approvals required from departments and agencies of this State, other than the Commission, that the electric utility has or will obtain before implementing the reorganization or transaction;

(iv) an irrevocable commitment by the electric utility that it will not, as a result of the transaction, impose any stranded cost charges that it might otherwise be allowed to charge retail customers under federal law or increase the transition charges that it is otherwise entitled to collect under this Article XVI;

(v) if the electric utility proposes to sell, assign, lease or otherwise transfer a generating plant that brings the amount of net dependable generating capacity transferred pursuant to this subsection to an amount equal to or greater than 15% of the electric utility's net dependable capacity as of the effective date of this amendatory Act of 1997, and enters into a power purchase agreement with the entity to which such generating plant is sold, assigned, leased, or otherwise transferred, the electric utility also agrees, if its fuel adjustment clause has not already been eliminated, to eliminate its fuel adjustment clause in accordance with subsection (b) of Section 9-220 for a period of time equal to the length of any such power purchase agreement or successor agreement, or until January 1, 2005, whichever is longer; if the capacity of the generating plant so transferred and related power purchase agreement does not result in the elimination of the fuel adjustment clause under this subsection, and the fuel adjustment clause has not already been eliminated, the electric utility shall agree that the costs associated with the transferred plant that are included in the calculation of the rate per kilowatt-hour to be applied pursuant to the electric utility's fuel adjustment clause during such period shall not exceed the per kilowatt-hour cost associated with such generating plant included in the electric utility's fuel adjustment clause during the full calendar year preceding the transfer, with such limit to be adjusted each year thereafter by the Gross Domestic Product Implicit Price Deflator; and

(vi) in addition, if the electric utility proposes to sell, assign, or lease, (A) either (1) an amount of generating plant that brings the amount of net dependable generating capacity transferred pursuant to this subsection to an amount equal to or greater than 15% of its net dependable capacity on the effective date of this amendatory Act of 1997, or (2) one or more generating plants with a total net dependable capacity of 1100 megawatts, or (B) transmission and distribution facilities that either (1) bring the amount of transmission and distribution facilities transferred pursuant to this subsection to an amount equal to or greater than 15% of the electric utility's total depreciated original cost investment in such facilities, or (2) represent an investment of $25,000,000 in terms of total depreciated original cost, the electric utility shall provide, in addition to the information listed in subparagraphs (i) through (v), the following information: (A) a description of how the electric utility will meet its service obligations under this Act in a safe and reliable manner and (B) the electric utility's projected earned rate of return on common equity for each year from the date of the notice through December 31, 2006 both with and without the proposed transaction. If the Commission has not issued an order initiating a hearing on the proposed transaction within 30 days after the date the electric utility's notice is filed, the transaction shall be deemed approved. The Commission may, after notice and hearing, prohibit the proposed transaction if it makes either or both of the following findings: (1) that the proposed transaction will render the electric utility unable to provide its tariffed services in a safe and reliable manner, or (2) that there is a strong likelihood that consummation of the proposed transaction will result in the electric utility being entitled to request an increase in its base rates. Any hearing initiated by the Commission into the proposed transaction shall be completed, and the Commission's final order approving or prohibiting the proposed transaction shall be entered, within 90 days after the date the electric utility's notice was filed. Provided, however, that a sale, assignment, or lease of transmission facilities to an independent system operator that meets the requirements of Section 16-126 shall not be subject to Commission approval under this Section.

In any proceeding conducted by the Commission pursuant to this subparagraph (vi), intervention shall be limited to parties with a direct interest in the transaction which is the subject of the hearing and any statutory consumer protection agency as defined in subsection (d) of Section 9-102.1. Notwithstanding the provisions of Section 10-113 of this Act, any application seeking rehearing of an order issued under this subparagraph (vi), whether filed by the electric utility or by an intervening party, shall be filed within 10 days after service of the order.

The Commission shall not in any subsequent proceeding or otherwise, review such a reorganization or other transaction authorized by this Section, but shall retain the authority to allocate costs as stated in Section 16-111(i). An entity to which an electric utility sells, assigns, leases or transfers assets pursuant to this subsection (g) shall not, as a result of the transactions specified in this subsection (g), be deemed a public utility as defined in Section 3-105. Nothing in this subsection (g) shall change any requirement under the jurisdiction of the Illinois Department of Nuclear Safety including, but not limited to, the payment of fees. Nothing in this subsection (g) shall exempt a utility from obtaining a certificate pursuant to Section 8-406 of this Act for the construction of a new electric generating facility. Nothing in this subsection (g) is intended to exempt the transactions hereunder from the operation of the federal or State antitrust laws. Nothing in this subsection (g) shall require an electric utility to use the procedures specified in this subsection for any of the transactions specified herein. Any other procedure available under this Act may, at the electric utility's election, be used for any such transaction.

(h) During the mandatory transition period, the Commission shall not establish or use any rates of depreciation, which for purposes of this subsection shall include amortization, for any electric utility other than those established pursuant to subsection (c) of Section 5-104 of this Act or utilized pursuant to subsection (g) of this Section. Provided, however, that in any proceeding to review an electric utility's rates for tariffed services pursuant to Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the Commission may establish new rates of depreciation for the electric utility in the same manner provided in subsection (d) of Section 5-104 of this Act. An electric utility implementing an accelerated cost recovery method including accelerated depreciation, accelerated amortization or other capital recovery methods, or recording reductions to the original cost of its assets, pursuant to subsection (g) of this Section, shall file a statement with the Commission describing the accelerated cost recovery method to be implemented or the reduction in the original cost of its assets to be recorded. Upon the filing of such statement, the accelerated cost recovery method or the reduction in the original cost of assets shall be deemed to be approved by the Commission as though an order had been entered by the Commission.

(i) Subsequent to the mandatory transition period, the Commission, in any proceeding to establish rates and charges for tariffed services offered by an electric utility, shall consider only (1) the then current or projected revenues, costs, investments and cost of capital directly or indirectly associated with the provision of such tariffed services; (2) collection of transition charges in accordance with Sections 16-102 and 16-108 of this Act; (3) recovery of any employee transition costs as described in Section 16-128 which the electric utility is continuing to incur, including recovery of any unamortized portion of such costs previously incurred or committed, with such costs to be equitably allocated among bundled services, delivery services, and contracts with alternative retail electric suppliers; and (4) recovery of the costs associated with the electric utility's compliance with decommissioning funding requirements; and shall not consider any other revenues, costs, investments or cost of capital of either the electric utility or of any affiliate of the electric utility that are not associated with the provision of tariffed services. In setting rates for tariffed services, the Commission shall equitably allocate joint and common costs and investments between the electric utility's competitive and tariffed services. In determining the justness and reasonableness of the electric power and energy component of an electric utility's rates for tariffed services subsequent to the mandatory transition period and prior to the time that the provision of such electric power and energy is declared competitive, the Commission shall consider the extent to which the electric utility's tariffed rates for such component for each customer class exceed the market value determined pursuant to Section 16-112, and, if the electric power and energy component of such tariffed rate exceeds the market value by more than 10% for any customer class, may establish such electric power and energy component at a rate equal to the market value plus 10%.

(j) During the mandatory transition period, an electric utility may elect to transfer to a non-operating income account under the Commission's Uniform System of Accounts either or both of (i) an amount of unamortized investment tax credit that is in addition to the ratable amount which is credited to the electric utility's operating income account for the year in accordance with Section 46(f)(2) of the federal Internal Revenue Code of 1986, as in effect prior to P.L. 101-508, or (ii) "excess tax reserves", as that term is defined in Section 203(e)(2)(A) of the federal Tax Reform Act of 1986, provided that (A) the amount transferred may not exceed the amount of the electric utility's assets that were created pursuant to Statement of Financial Accounting Standards No. 71 which the electric utility has written off during the mandatory transition period, and (B) the transfer shall not be effective until approved by the Internal Revenue Service. An electric utility electing to make such a transfer shall file a statement with the Commission stating the amount and timing of the transfer for which it intends to request approval of the Internal Revenue Service, along with a copy of its proposed request to the Internal Revenue Service for a ruling. The Commission shall issue an order within 14 days after the electric utility's filing approving, subject to receipt of approval from the Internal Revenue Service, the proposed transfer.

(k) If an electric utility is selling or transferring to a single buyer 5 or more generating plants located in this State with a total net dependable capacity of 5000 megawatts or more pursuant to subsection (g) of this Section and has obtained a sale price or consideration that exceeds 200% of the book value of such plants, the electric utility must provide to the Governor, the President of the Illinois Senate, the Minority Leader of the Illinois Senate, the Speaker of the Illinois House of Representatives, and the Minority Leader of the Illinois House of Representatives no later than 15 days after filing its notice under subsection (g) of this Section or 5 days after the date on which this subsection (k) becomes law, whichever is later, a written commitment in which such electric utility agrees to expend $2 billion outside the corporate limits of any municipality with 1,000,000 or more inhabitants within such electric utility's service area, over a 6-year period beginning with the calendar year in which the notice is filed, on projects, programs, and improvements within its service area relating to transmission and distribution including, without limitation, infrastructure expansion, repair and replacement, capital investments, operations and maintenance, and vegetation management.

(l) Notwithstanding any other provision of this Act or any rule, regulation, or prior order of the Commission, a public utility providing electric and gas service may do any one or more of the following: transfer assets to, reorganize with, or merge with one or more public utilities under common holding company ownership or control in the manner prescribed in subsection (g) of this Section. No merger transaction costs, such as fees paid to attorneys, investment bankers, and other consultants, incurred in connection with a merger pursuant to this subsection (l) shall be recoverable in any subsequent rate proceeding. Approval of a merger pursuant to this subsection (l) shall not constitute approval of, or otherwise require, rate recovery of other costs incurred in connection with, or to implement the merger, such as the cost of restructuring, combining, or integrating debt, assets, or systems. Such other costs may be recovered only to the extent that the surviving utility can demonstrate that the cost savings produced by such restructuring, combination, or integration exceed the associated costs. Nothing in this subsection (l) shall impair the terms or conditions of employment or the collective bargaining rights of any employees of the utilities that are transferring assets, reorganizing, or merging.

(m) If an electric utility that on December 31, 2005 provided electric service to at least 100,000 customers in Illinois transfers assets, reorganizes, or merges under this Section, then the same provisions apply that applied during the mandatory transition period under Section 16-128.

(Source: P.A. 95-331, eff. 8-21-07; 95-481, eff. 8-28-07; 95-876, eff. 8-21-08.)

(220 ILCS 5/16-111.1)

Sec. 16-111.1. Illinois Clean Energy Community Trust.

(a) An electric utility which has sold or transferred generating facilities in a transaction to which subsection (k) of Section 16-111 applies is authorized to establish an Illinois clean energy community trust or foundation for the purposes of providing financial support and assistance to entities, public or private, within the State of Illinois including, but not limited to, units of State and local government, educational institutions, corporations, and charitable, educational, environmental and community organizations, for programs and projects that benefit the public by improving energy efficiency, developing renewable energy resources, supporting other energy related projects that improve the State's environmental quality, and supporting projects and programs intended to preserve or enhance the natural habitats and wildlife areas of the State. Provided, however, that the trust or foundation funds shall not be used for the remediation of environmentally impaired property. The trust or foundation may also assist in identifying other energy and environmental grant opportunities.

(b) Such trust or foundation shall be governed by a declaration of trust or articles of incorporation and bylaws which shall, at a minimum, provide that:

(1) There shall be 6 voting trustees of the trust or foundation, one of whom shall be appointed by the Governor, one of whom shall be appointed by the President of the Illinois Senate, one of whom shall be appointed by the Minority Leader of the Illinois Senate, one of whom shall be appointed by the Speaker of the Illinois House of Representatives, one of whom shall be appointed by the Minority Leader of the Illinois House of Representatives, and one of whom shall be appointed by the electric utility establishing the trust or foundation, provided that the voting trustee appointed by the utility shall be a representative of a recognized environmental action group selected by the utility. The Governor shall designate one of the 6 voting trustees to serve as chairman of the trust or foundation, who shall serve as chairman of the trust or foundation at the pleasure of the Governor. In addition, there shall be 5 non-voting trustees, one of whom shall be appointed by the Director of Commerce and Economic Opportunity, one of whom shall be appointed by the Director of the Illinois Environmental Protection Agency, one of whom shall be appointed by the Director of Natural Resources, and 2 of whom shall be appointed by the electric utility establishing the trust or foundation, provided that the non-voting trustee appointed by the utility shall bring financial expertise to the trust or foundation and shall have appropriate credentials therefor.

(2) All voting trustees and the non-voting trustee with financial expertise shall be entitled to compensation for their services as trustees, provided, however, that no member of the General Assembly and no employee of the electric utility establishing the trust or foundation serving as a voting trustee shall receive any compensation for his or her services as a trustee, and provided further that the compensation to the chairman of the trust shall not exceed $25,000 annually and the compensation to any other trustee shall not exceed $20,000 annually. All trustees shall be entitled to reimbursement for reasonable expenses incurred on behalf of the trust in the performance of their duties as trustees. All such compensation and reimbursements shall be paid out of the trust.

(3) Trustees shall be appointed within 30 days after the creation of the trust or foundation and shall serve for a term of 5 years commencing upon the date of their respective appointments, until their respective successors are appointed and qualified.

(4) A vacancy in the office of trustee shall be filled by the person holding the office responsible for appointing the trustee whose death or resignation creates the vacancy, and a trustee appointed to fill a vacancy shall serve the remainder of the term of the trustee whose resignation or death created the vacancy.

(5) The trust or foundation shall have an indefinite term, and shall terminate at such time as no trust assets remain.

(6) The trust or foundation shall be funded in the minimum amount of $250,000,000, with the allocation and disbursement of funds for the various purposes for which the trust or foundation is established to be determined by the trustees in accordance with the declaration of trust or the articles of incorporation and bylaws; provided, however, that this amount may be reduced by up to $25,000,000 if, at the time the trust or foundation is funded, a corresponding amount is contributed by the electric utility establishing the trust or foundation to the Board of Trustees of Southern Illinois University for the purpose of funding programs or projects related to clean coal and provided further that $25,000,000 of the amount contributed to the trust or foundation shall be available to fund programs or projects related to clean coal.

(7) The trust or foundation shall be authorized to employ an executive director and other employees, to enter into leases, contracts and other obligations on behalf of the trust or foundation, and to incur expenses that the trustees deem necessary or appropriate for the fulfillment of the purposes for which the trust or foundation is established, provided, however, that salaries and administrative expenses incurred on behalf of the trust or foundation shall not exceed $500,000 in the first fiscal year after the trust or foundation is established and shall not exceed $1,000,000 in each subsequent fiscal year.

(8) The trustees may create and appoint advisory boards or committees to assist them with the administration of the trust or foundation, and to advise and make recommendations to them regarding the contribution and disbursement of the trust or foundation funds.

(c)(1) In addition to the allocation and disbursement of funds for the purposes set forth in subsection (a) of this Section, the trustees of the trust or foundation shall annually contribute funds in amounts set forth in subparagraph (2) of this subsection to the Citizens Utility Board created by the Citizens Utility Board Act; provided, however, that any such funds shall be used solely for the representation of the interests of utility consumers before the Illinois Commerce Commission, the Federal Energy Regulatory Commission, and the Federal Communications Commission and for the provision of consumer education on utility service and prices and on benefits and methods of energy conservation. Provided, however, that no part of such funds shall be used to support (i) any lobbying activity, (ii) activities related to fundraising, (iii) advertising or other marketing efforts regarding a particular utility, or (iv) solicitation of support for, or advocacy of, a particular position regarding any specific utility or a utility's docketed proceeding.

(2) In the calendar year in which the trust or foundation is first funded, the trustees shall contribute $1,000,000 to the Citizens Utility Board within 60 days after such trust or foundation is established; provided, however, that such contribution shall be made after December 31, 1999. In each of the 6 calendar years subsequent to the first contribution, if the trust or foundation is in existence, the trustees shall contribute to the Citizens Utility Board an amount equal to the total expenditures by such organization in the prior calendar year, as set forth in the report filed by the Citizens Utility Board with the chairman of such trust or foundation as required by subparagraph (3) of this subsection. Such subsequent contributions shall be made within 30 days of submission by the Citizens Utility Board of such report to the Chairman of the trust or foundation, but in no event shall any annual contribution by the trustees to the Citizens Utility Board exceed $1,000,000. Following such 7-year period, an Illinois statutory consumer protection agency may petition the trust or foundation for contributions to fund expenditures of the type identified in paragraph (1), but in no event shall annual contributions by the trust or foundation for such expenditures exceed $1,000,000.

(3) The Citizens Utility Board shall file a report with the chairman of such trust or foundation for each year in which it expends any funds received from the trust or foundation setting forth the amount of any expenditures (regardless of the source of funds for such expenditures) for: (i) the representation of the interests of utility consumers before the Illinois Commerce Commission, the Federal Energy Regulatory Commission, and the Federal Communications Commission, and (ii) the provision of consumer education on utility service and prices and on benefits and methods of energy conservation. Such report shall separately state the total amount of expenditures for the purposes or activities identified by items (i) and (ii) of this paragraph, the name and address of the external recipient of any such expenditure, if applicable, and the specific purposes or activities (including internal purposes or activities) for which each expenditure was made. Any report required by this subsection shall be filed with the chairman of such trust or foundation no later than March 31 of the year immediately following the year for which the report is required.

(d) In addition to any other allocation and disbursement of funds in this Section, the trustees of the trust or foundation shall contribute an amount up to $125,000,000 (1) for deposit into the General Obligation Bond Retirement and Interest Fund held in the State treasury to assist in the repayment on general obligation bonds issued under subsection (d) of Section 7 of the General Obligation Bond Act, and (2) for deposit into funds administered by agencies with responsibility for environmental activities to assist in payment for environmental programs. The amount required to be contributed shall be provided to the trustees in a certification letter from the Director of the Bureau of the Budget that shall be provided no later than August 1, 2003. The payment from the trustees shall be paid to the State no later than December 31st following the receipt of the letter.

(Source: P.A. 99-906, eff. 6-1-17.)

(220 ILCS 5/16-111.2)

Sec. 16-111.2. Provisions related to proposed utility transactions.

(a) The General Assembly finds:

(1) A transaction as described in paragraph (3) of this subsection (a) will contribute to improved reliability of the electric supply system in Illinois which is one of the key purposes of the Illinois Electric Service Customer Choice and Rate Relief Law of 1997.

(2) A transaction as described in paragraph (3) of this subsection (a) is likely to promote additional investment in the existing generating assets and in the development of additional generation capacity in Illinois, and such change in ownership is in the public interest, consistent with the intent of the Illinois Electric Service Customer Choice and Rate Relief Law of 1997 and beneficial for the citizens of this State.

(3) As of the date on which this amendatory Act of 1999 becomes law, an electric utility providing service to more than 1,000,000 customers in this State has proposed to sell or transfer to a single buyer 5 or more generating plants with a total net dependable capacity of 5000 megawatts or more pursuant to subsection (g) of Section 16-111.

(4) Such electric utility anticipates receiving a sale price or consideration as a result of such transaction exceeding 200% of the book value of these plants.

(5) Such electric utility has presented to the Governor and the leaders of the General Assembly a written commitment in which such electric utility agrees to expend $2,000,000,000 outside the corporate limits of any municipality with 1,000,000 or more inhabitants within such electric utility's service area, over a 6-year period beginning with this calendar year on projects, programs and improvements within its service area relating to transmission and distribution including, without limitation, infrastructure expansion, repair and replacement, capital investments, operations and maintenance, and vegetation management.

(6) Such electric utility has committed that, if the sale or transfer contemplated by paragraph (3) of this subsection is consummated on or before December 31, 1999, the electric utility shall make contributions totaling $250,000,000 to entities within this State for, among other purposes, environmental and clean coal initiatives pursuant to Section 16-111.1, which commitment includes a contribution of $25,000,000 to the Board of Trustees of Southern Illinois University for the purpose of funding programs or projects related to clean coal.

(b) That, in light of the findings in paragraphs (1) and (2) of subsection (a) and, in this instance, the circumstances described in paragraphs (3) through (6) of subsection (a) and otherwise, the General Assembly hereby finds that allowing the generating facilities being acquired to be eligible facilities under the provisions of the National Energy Policy Act of 1992 that apply to exempt wholesale generators (A) will benefit consumers; (B) is in the public interest; and (C) does not violate the law of this State.

(c) Nothing in this Section shall have any effect on the authority of the Commission under subsection (g) of Section 16-111 of this Act.

(Source: P.A. 91-50, eff. 6-30-99.)