Rep. Joyce Mason

Filed: 1/27/2022

 

 


 

 


 
10200HB3941ham001LRB102 11274 SPS 31034 a

1
AMENDMENT TO HOUSE BILL 3941

2    AMENDMENT NO. ______. Amend House Bill 3941 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Public Utilities Act is amended by
5changing Section 9-220.3 as follows:
 
6    (220 ILCS 5/9-220.3)
7    (Section scheduled to be repealed on December 31, 2023)
8    Sec. 9-220.3. Natural gas surcharges authorized.
9    (a) Tariff.
10        (1) Pursuant to Section 9-201 of this Act, a natural
11    gas utility serving more than 700,000 customers may file a
12    tariff for a surcharge which adjusts rates and charges to
13    provide for recovery of costs associated with investments
14    in qualifying infrastructure plant, independent of any
15    other matters related to the utility's revenue
16    requirement.

 

 

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1        (2) Within 30 days after the effective date of this
2    amendatory Act of the 98th General Assembly, the
3    Commission shall adopt emergency rules to implement the
4    provisions of this amendatory Act of the 98th General
5    Assembly. The utility may file with the Commission tariffs
6    implementing the provisions of this amendatory Act of the
7    98th General Assembly after the effective date of the
8    emergency rules authorized by subsection (i).
9        (3) The Commission shall issue an order approving, or
10    approving with modification to ensure compliance with this
11    Section, the tariff no later than 120 days after such
12    filing of the tariffs filed pursuant to this Section. The
13    utility shall have 7 days following the date of service of
14    the order to notify the Commission in writing whether it
15    will accept any modifications so identified in the order
16    or whether it has elected not to proceed with the tariff.
17    If the order includes no modifications or if the utility
18    notifies the Commission that it will accept such
19    modifications, the tariff shall take effect on the first
20    day of the calendar year in which the Commission issues
21    the order, subject to petitions for rehearing and
22    appellate procedures. After the tariff takes effect, the
23    utility may, upon 10 days' notice to the Commission, file
24    to withdraw the tariff at any time, and the Commission
25    shall approve such filing without suspension or hearing,
26    subject to a final reconciliation as provided in

 

 

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1    subsection (e) of this Section.
2        (4) When a natural gas utility withdraws the surcharge
3    tariff, the utility shall not recover any additional
4    charges through the surcharge approved pursuant to this
5    Section, subject to the resolution of the final
6    reconciliation pursuant to subsection (e) of this Section.
7    The utility's qualifying infrastructure investment net of
8    accumulated depreciation may be transferred to the natural
9    gas utility's rate base in the utility's next general rate
10    case. The utility's delivery base rates in effect upon
11    withdrawal of the surcharge tariff shall not be adjusted
12    at the time the surcharge tariff is withdrawn.
13        (5) A natural gas utility that is subject to its
14    delivery base rates being fixed at their current rates
15    pursuant to a Commission order entered in Docket No.
16    11-0046, notwithstanding the effective date of its tariff
17    authorized pursuant to this Section, shall reflect in a
18    tariff surcharge only those projects placed in service
19    after the fixed rate period of the merger agreement has
20    expired by its terms.
21    (b) For purposes of this Section, "qualifying
22infrastructure plant" includes only plant additions placed in
23service not reflected in the rate base used to establish the
24utility's delivery base rates. "Costs associated with
25investments in qualifying infrastructure plant" shall include
26a return on qualifying infrastructure plant and recovery of

 

 

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1depreciation and amortization expense on qualifying
2infrastructure plant, net of the depreciation included in the
3utility's base rates on any plant retired in conjunction with
4the installation of the qualifying infrastructure plant.
5Collectively the "qualifying infrastructure plant" and "costs
6associated with investments in qualifying infrastructure
7plant" are referred to as the "qualifying infrastructure
8investment" and that are related to one or more of the
9following:
10        (1) the installation of facilities to retire and
11    replace underground natural gas facilities, including
12    facilities appurtenant to facilities constructed of those
13    materials such as meters, regulators, and services, and
14    that are constructed of cast iron, wrought iron, ductile
15    iron, unprotected coated steel, unprotected bare steel,
16    mechanically coupled steel, copper, Cellulose Acetate
17    Butyrate (CAB) plastic, pre-1973 DuPont Aldyl "A"
18    polyethylene, PVC, or other types of materials identified
19    by a State or federal governmental agency as being prone
20    to leakage;
21        (2) the relocation of meters from inside customers'
22    facilities to outside;
23        (3) the upgrading of the gas distribution system from
24    a low pressure to a medium pressure system, including
25    installation of high-pressure facilities to support the
26    upgrade;

 

 

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1        (4) modernization investments by a combination
2    utility, as defined in subsection (b) of Section 16-108.5
3    of this Act, to install:
4            (A) advanced gas meters in connection with the
5        installation of advanced electric meters pursuant to
6        Sections 16-108.5 and 16-108.6 of this Act; and
7            (B) the communications hardware and software and
8        associated system software that creates a network
9        between advanced gas meters and utility business
10        systems and allows the collection and distribution of
11        gas-related information to customers and other parties
12        in addition to providing information to the utility
13        itself;
14        (5) replacing high-pressure transmission pipelines and
15    associated facilities identified as having a higher risk
16    of leakage or failure or installing or replacing
17    high-pressure transmission pipelines and associated
18    facilities to establish records and maximum allowable
19    operating pressures;
20        (6) replacing difficult to locate mains and service
21    pipes and associated facilities; and
22        (7) replacing or installing transmission and
23    distribution regulator stations, regulators, valves, and
24    associated facilities to establish over-pressure
25    protection.
26    With respect to the installation of the facilities

 

 

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1identified in paragraph (1) of subsection (b) of this Section,
2the natural gas utility shall determine priorities for such
3installation with consideration of projects either: (i)
4integral to a general government public facilities improvement
5program or (ii) ranked in the highest risk categories in the
6utility's most recent Distribution Integrity Management Plan
7where removal or replacement is the remedial measure.
8    (c) Qualifying infrastructure investment, defined in
9subsection (b) of this Section, recoverable through a tariff
10authorized by subsection (a) of this Section, shall not
11include costs or expenses incurred in the ordinary course of
12business for the ongoing or routine operations of the utility,
13including, but not limited to:
14        (1) operating and maintenance costs; and
15        (2) costs of facilities that are revenue-producing,
16    which means facilities that are constructed or installed
17    for the purpose of serving new customers.
18    (d) Gas utility commitments. A natural gas utility that
19has in effect a natural gas surcharge tariff pursuant to this
20Section shall:
21        (1) recognize that the General Assembly identifies
22    improved public safety and reliability of natural gas
23    facilities as the cornerstone upon which this Section is
24    designed, and qualifying projects should be encouraged,
25    selected, and prioritized based on these factors; and
26        (2) provide information to the Commission as requested

 

 

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1    to demonstrate that (i) the projects included in the
2    tariff are indeed qualifying projects and (ii) the
3    projects are selected and prioritized taking into account
4    improved public safety and reliability.
5        (3) The amount of qualifying infrastructure investment
6    eligible for recovery under the tariff in the applicable
7    calendar year is limited to the lesser of (i) the actual
8    qualifying infrastructure plant placed in service in the
9    applicable calendar year and (ii) the difference by which
10    total plant additions in the applicable calendar year
11    exceed the baseline amount, and subject to the limitation
12    in subsection (g) of this Section. A natural gas utility
13    can recover the costs of qualifying infrastructure
14    investments through an approved surcharge tariff from the
15    beginning of each calendar year subject to the
16    reconciliation initiated under paragraph (2) of subsection
17    (e) of this Section, during which the Commission may make
18    adjustments to ensure that the limits defined in this
19    paragraph are not exceeded. Further, if total plant
20    additions in a calendar year do not exceed the baseline
21    amount in the applicable calendar year, the Commission,
22    during the reconciliation initiated under paragraph (2) of
23    subsection (e) of this Section for the applicable calendar
24    year, shall adjust the amount of qualifying infrastructure
25    investment eligible for recovery under the tariff to zero.
26        (4) For purposes of this Section, "baseline amount"

 

 

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1    means an amount equal to the utility's average of total
2    depreciation expense, as reported on page 336, column (b)
3    of the utility's ILCC Form 21, for the calendar years 2006
4    through 2010.
5    (e) Review of investment.
6        (1) The amount of qualifying infrastructure investment
7    shall be shown on an Information Sheet supplemental to the
8    surcharge tariff and filed with the Commission monthly or
9    some other time period at the option of the utility. The
10    Information Sheet shall be accompanied by data showing the
11    calculation of the qualifying infrastructure investment
12    adjustment. Unless otherwise ordered by the Commission,
13    each qualifying infrastructure investment adjustment shown
14    on an Information Sheet shall become effective pursuant to
15    the utility's approved tariffs.
16        (2) For each calendar year in which a surcharge tariff
17    is in effect, the natural gas utility shall file a
18    petition with the Commission to initiate hearings to
19    reconcile amounts billed under each surcharge authorized
20    pursuant to this Section with the actual prudently
21    incurred costs recoverable under this tariff in the
22    preceding year. The petition filed by the natural gas
23    utility shall include testimony and schedules that support
24    the accuracy and the prudence of the qualifying
25    infrastructure investment for the calendar year being
26    reconciled. The petition filed shall also include the

 

 

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1    number of jobs attributable to the natural gas surcharge
2    tariff as required by rule. The review of the utility's
3    investment shall include identification and review of all
4    plant that was ranked within the highest risk categories
5    in that utility's most recent Distribution Integrity
6    Management Plan.
7    (f) The rate of return applied shall be the overall rate of
8return authorized by the Commission in the utility's last gas
9rate case.
10    (g) The cumulative amount of increases billed under the
11surcharge, since the utility's most recent delivery service
12rate order, shall not exceed an annual average 4% of the
13utility's delivery base rate revenues, but shall not exceed
145.5% in any given year. On the effective date of new delivery
15base rates, the surcharge shall be reduced to zero with
16respect to qualifying infrastructure investment that is
17transferred to the rate base used to establish the utility's
18delivery base rates, provided that the utility may continue to
19charge or refund any reconciliation adjustment determined
20pursuant to subsection (e) of this Section.
21    (h) If a gas utility obtains a surcharge tariff under this
22Section 9-220.3, then it and its affiliates are excused from
23the rate case filing requirements contained in Sections
249-220(h) and 9-220(h-1). In the event a natural gas utility,
25prior to the effective date of this amendatory Act of the 98th
26General Assembly, made a rate case filing that is still

 

 

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1pending on the effective date of this amendatory Act of the
298th General Assembly, the natural gas utility may, at the
3time it files its surcharge tariff with the Commission, also
4file a notice with the Commission to withdraw its rate case
5filing. Any affiliate of such natural gas utility may also
6file to withdraw its rate case filing. Upon receipt of such
7notice, the Commission shall dismiss the rate case filing with
8prejudice and such tariffs and the record related thereto
9shall not be the subject of any further hearing,
10investigation, or proceeding of any kind related to rates for
11gas delivery services. Notwithstanding the foregoing, a
12natural gas utility shall not be permitted to withdraw a rate
13case filing for which a proposed order recommending a rate
14reduction is pending. A natural gas utility shall not be
15permitted to withdraw the gas delivery services tariffs that
16are the subject of Commission Docket Nos. 12-0511/12-0512
17(cons.). None of the costs incurred for the withdrawn rate
18case are recoverable from ratepayers.
19    (i) The Commission shall promulgate rules and regulations
20to carry out the provisions of this Section under the
21emergency rulemaking provisions set forth in Section 5-45 of
22the Illinois Administrative Procedure Act, and such emergency
23rules shall be effective no later than 30 days after the
24effective date of this amendatory Act of the 98th General
25Assembly.
26    (j) This Section is repealed December 31, 2022 2023.

 

 

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1(Source: P.A. 98-57, eff. 7-5-13.)".