Illinois General Assembly - Illinois Compiled Statutes

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220 ILCS 5/9-244

(220 ILCS 5/9-244) (from Ch. 111 2/3, par. 9-244)

Sec. 9-244.

Alternative rate regulation.

(a) Notwithstanding any of the ratemaking provisions of
this Article IX or other Sections of this Act, or the
Commission's rules that are deemed to require rate of return
regulation, and except as provided in Article XVI, the
Commission, upon petition by an electric or gas public utility, and after
notice and hearing, may authorize for some or all of the
regulated services of that utility, the implementation of one
or more programs consisting of (i) alternatives to rate of
return regulation, including but not limited to earnings
sharing, rate moratoria, price caps or flexible rate options,
or (ii) other regulatory mechanisms that reward or penalize
the utility through the adjustment of rates based on utility
performance.  In the case of other regulatory mechanisms that
reward or penalize utilities through the adjustment of rates
based on utility performance, the utility's performance shall
be compared to standards established in the Commission order
authorizing the implementation of other regulatory mechanisms.
 The Commission is specifically authorized to approve in
response to such petitions different forms of alternatives to
rate of return regulation or other regulatory mechanisms to
fit the particular characteristics and requirements of
different utilities and their service territories.

(b) The Commission shall approve the program if it
finds, based on the record, that:

(1) the program is likely to result in rates lower

than otherwise would have been in effect under traditional rate of return regulation for the services covered by the program and that are consistent with the provisions of Section 9-241 of the Act; and

(2) the program is likely to result in other

substantial and identifiable benefits that would be realized by customers served under the program and that would not be realized in the absence of the program; and

(3) the utility is in compliance with applicable

Commission standards for reliability and implementation of the program is not likely to adversely affect service reliability; and

(4) implementation of the program is not likely to

result in deterioration of the utility's financial condition; and

(5) implementation of the program is not likely to

adversely affect the development of competitive markets; and

(6) the electric utility is in compliance with its

obligation to offer delivery services pursuant to Article XVI; and

(7) the program includes annual reporting

requirements and other provisions that will enable the Commission to adequately monitor its implementation of the program; and

(8) the program includes provisions for an equitable

sharing of any net economic benefits between the utility and its customers to the extent the program is likely to result in such benefits.

The Commission shall issue its order approving or denying the
program no later than 270 days from the date of filing of the
petition.  Any program approved under this Section shall
continue in effect until revised, modified or terminated by
order of the Commission as provided in this Section.   If the
Commission cannot make the above findings, it shall
specifically identify in its order the reason or reasons why
the proposed program does not meet the above criteria, and
shall identify any modifications supported in the record, if
any, that would cause the program to satisfy the above
criteria.  In the event the order identifies any such
modifications it shall not become a final order subject to
petitions for rehearing until 15 days after service of same by
the Commission.  The utility shall have 14 days following the
date of service of the order to notify the Commission in
writing whether it will accept any modifications so identified
in the order or whether it has elected not to proceed with the
program.  If the utility notifies the Commission that it will
accept such modifications, the Commission shall issue an
amended order, without further hearing, within 14 days
following such notification, approving the program as modified
and such order shall be considered to be a final order of the
Commission subject to petitions for rehearing and appellate
procedures.

(c) The Commission shall open a proceeding to review any
program approved under subsection (b) 2 years after the
program is first implemented to determine whether the program
is meeting its objectives, and may make such revisions, no
later than 270 days after the proceeding is opened, as are
necessary to result in the program meeting its objectives.  A
utility may elect to discontinue any program so revised.  The
Commission shall not otherwise direct a utility to revise,
modify or cancel a program during its term of operation,
except as found necessary, after notice and hearing, to ensure
system reliability.

(d) Upon its own motion or complaint, the Commission may
investigate whether the utility is implementing an approved
program in accordance with the Commission order approving the
program.  If the Commission finds after notice and hearing,
that the utility is not implementing the program in accordance
with such order, the Commission shall order the utility to
comply with the terms of the order.  Complaints relating to
the program filed under Section 9-250 of this Act, alleging
that the program does not comply with that Section or the
requirements of subsection (b) shall not be filed sooner than
one year after the review provided for in subsection (c).  The
complainant shall bear the burden of proving the allegations
in the complaint.

(e) The Commission shall not be authorized to allow or
order an electric utility to place a program into effect,
pursuant to this Section, applicable to delivery services
provided by a utility, unless the utility already has in
effect a delivery services tariff conforming to the
requirements of Section 16-108 of this Act.

(f) The Commission may, upon subsequent petition by the
utility, after notice and hearing, authorize the extension of
a program that was previously approved pursuant to this
Section or approve revisions or modifications of such a
program to be effective, after the initially approved program
has been in effect.  Any such petition seeking an extension,
revision, or modification of such a program must be
accompanied by an evaluation of the program addressing the
criteria set forth in subsection (b) hereof.  The utility's
petition may, but is not required to, specify a termination
date for the extended, revised or modified program.  The
Commission may require a review of the extended, revised, or
modified program at such intervals as may be ordered by the
Commission, for the purpose of determining whether the program
should be revised, modified, or terminated.

(Source: P.A. 89-194, eff. 1-1-96; 90-561, eff. 12-16-97.)