Rep. George Scully Jr.

Filed: 1/7/2007

 

 


 

 


 
09400SB1714ham003 LRB094 10702 RCE 60955 a

1
AMENDMENT TO SENATE BILL 1714

2     AMENDMENT NO. ______. Amend Senate Bill 1714 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Public Utilities Act is amended by changing
5 Sections 16-102, 16-111, and 16-113 as follows:
 
6     (220 ILCS 5/16-102)
7     Sec. 16-102. Definitions. For the purposes of this Article
8 the following terms shall be defined as set forth in this
9 Section.
10     "Alternative retail electric supplier" means every person,
11 cooperative, corporation, municipal corporation, company,
12 association, joint stock company or association, firm,
13 partnership, individual, or other entity, their lessees,
14 trustees, or receivers appointed by any court whatsoever, that
15 offers electric power or energy for sale, lease or in exchange
16 for other value received to one or more retail customers, or
17 that engages in the delivery or furnishing of electric power or
18 energy to such retail customers, and shall include, without
19 limitation, resellers, aggregators and power marketers, but
20 shall not include (i) electric utilities (or any agent of the
21 electric utility to the extent the electric utility provides
22 tariffed services to retail customers through that agent), (ii)
23 any electric cooperative or municipal system as defined in
24 Section 17-100 to the extent that the electric cooperative or

 

 

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1 municipal system is serving retail customers within any area in
2 which it is or would be entitled to provide service under the
3 law in effect immediately prior to the effective date of this
4 amendatory Act of 1997, (iii) a public utility that is owned
5 and operated by any public institution of higher education of
6 this State, or a public utility that is owned by such public
7 institution of higher education and operated by any of its
8 lessees or operating agents, within any area in which it is or
9 would be entitled to provide service under the law in effect
10 immediately prior to the effective date of this amendatory Act
11 of 1997, (iv) a retail customer to the extent that customer
12 obtains its electric power and energy from that customer's own
13 cogeneration or self-generation facilities, (v) an entity that
14 owns, operates, sells, or arranges for the installation of a
15 customer's own cogeneration or self-generation facilities, but
16 only to the extent the entity is engaged in owning, selling or
17 arranging for the installation of such facility, or operating
18 the facility on behalf of such customer, provided however that
19 any such third party owner or operator of a facility built
20 after January 1, 1999, complies with the labor provisions of
21 Section 16-128(a) as though such third party were an
22 alternative retail electric supplier, or (vi) an industrial or
23 manufacturing customer that owns its own distribution
24 facilities, to the extent that the customer provides service
25 from that distribution system to a third-party contractor
26 located on the customer's premises that is integrally and
27 predominantly engaged in the customer's industrial or
28 manufacturing process; provided, that if the industrial or
29 manufacturing customer has elected delivery services, the
30 customer shall pay transition charges applicable to the
31 electric power and energy consumed by the third-party
32 contractor unless such charges are otherwise paid by the third
33 party contractor, which shall be calculated based on the usage
34 of, and the base rates or the contract rates applicable to, the

 

 

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1 third-party contractor in accordance with Section 16-102.
2     "Base rates" means the rates for those tariffed services
3 that the electric utility is required to offer pursuant to
4 subsection (a) of Section 16-103 and that were identified in a
5 rate order for collection of the electric utility's base rate
6 revenue requirement, excluding (i) separate automatic rate
7 adjustment riders then in effect, (ii) special or negotiated
8 contract rates, (iii) delivery services tariffs filed pursuant
9 to Section 16-108, (iv) real-time pricing, or (v) tariffs that
10 were in effect prior to October 1, 1996 and that based charges
11 for services on an index or average of other utilities'
12 charges, but including (vi) any subsequent redesign of such
13 rates for tariffed services that is authorized by the
14 Commission after notice and hearing.
15     "Competitive service" includes (i) any service that has
16 been declared to be competitive pursuant to Section 16-113 of
17 this Act, (ii) contract service, and (iii) services, other than
18 tariffed services, that are related to, but not necessary for,
19 the provision of electric power and energy or delivery
20 services.
21     "Contract service" means (1) services, including the
22 provision of electric power and energy or other services, that
23 are provided by mutual agreement between an electric utility
24 and a retail customer that is located in the electric utility's
25 service area, provided that, delivery services shall not be a
26 contract service until such services are declared competitive
27 pursuant to Section 16-113; and also means (2) the provision of
28 electric power and energy by an electric utility to retail
29 customers outside the electric utility's service area pursuant
30 to Section 16-116. Provided, however, contract service does not
31 include electric utility services provided pursuant to (i)
32 contracts that retail customers are required to execute as a
33 condition of receiving tariffed services, or (ii) special or
34 negotiated rate contracts for electric utility services that

 

 

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1 were entered into between an electric utility and a retail
2 customer prior to the effective date of this amendatory Act of
3 1997 and filed with the Commission.
4     "Delivery services" means those services provided by the
5 electric utility that are necessary in order for the
6 transmission and distribution systems to function so that
7 retail customers located in the electric utility's service area
8 can receive electric power and energy from suppliers other than
9 the electric utility, and shall include, without limitation,
10 standard metering and billing services.
11     "Electric utility" means a public utility, as defined in
12 Section 3-105 of this Act, that has a franchise, license,
13 permit or right to furnish or sell electricity to retail
14 customers within a service area.
15     "Mandatory transition period" means the period from the
16 effective date of this amendatory Act of 1997 through the date
17 on which the Commission has approved declarations of
18 competitive service, pursuant to Section 16-113, for all
19 classes of service offered in the service areas of all electric
20 utilities that, on December 31, 2005, served at least 100,000
21 customers January 1, 2007.
22     "Municipal system" shall have the meaning set forth in
23 Section 17-100.
24     "Real-time pricing" means tariffed retail charges for
25 delivered electric power and energy that vary hour-to-hour and
26 are determined from wholesale market prices using a methodology
27 approved by the Illinois Commerce Commission.
28     "Retail customer" means a single entity using electric
29 power or energy at a single premises and that (A) either (i) is
30 receiving or is eligible to receive tariffed services from an
31 electric utility, or (ii) that is served by a municipal system
32 or electric cooperative within any area in which the municipal
33 system or electric cooperative is or would be entitled to
34 provide service under the law in effect immediately prior to

 

 

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1 the effective date of this amendatory Act of 1997, or (B) an
2 entity which on the effective date of this Act was receiving
3 electric service from a public utility and (i) was engaged in
4 the practice of resale and redistribution of such electricity
5 within a building prior to January 2, 1957, or (ii) was
6 providing lighting services to tenants in a multi-occupancy
7 building, but only to the extent such resale, redistribution or
8 lighting service is authorized by the electric utility's
9 tariffs that were on file with the Commission on the effective
10 date of this Act.
11     "Service area" means (i) the geographic area within which
12 an electric utility was lawfully entitled to provide electric
13 power and energy to retail customers as of the effective date
14 of this amendatory Act of 1997, and includes (ii) the location
15 of any retail customer to which the electric utility was
16 lawfully providing electric utility services on such effective
17 date.
18     "Small commercial retail customer" means those
19 nonresidential retail customers of an electric utility
20 consuming 15,000 kilowatt-hours or less of electricity
21 annually in its service area.
22     "Tariffed service" means services provided to retail
23 customers by an electric utility as defined by its rates on
24 file with the Commission pursuant to the provisions of Article
25 IX of this Act, but shall not include competitive services.
26     "Transition charge" means a charge expressed in cents per
27 kilowatt-hour that is calculated for a customer or class of
28 customers as follows for each year in which an electric utility
29 is entitled to recover transition charges as provided in
30 Section 16-108:
31         (1) the amount of revenue that an electric utility
32     would receive from the retail customer or customers if it
33     were serving such customers' electric power and energy
34     requirements as a tariffed service based on (A) all of the

 

 

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1     customers' actual usage during the 3 years ending 90 days
2     prior to the date on which such customers were first
3     eligible for delivery services pursuant to Section 16-104,
4     and (B) on (i) the base rates in effect on October 1, 1996
5     (adjusted for the reductions required by subsection (b) of
6     Section 16-111, for any reduction resulting from a rate
7     decrease under Section 16-101(b), for any restatement of
8     base rates made in conjunction with an elimination of the
9     fuel adjustment clause pursuant to subsection (b), (d), or
10     (f) of Section 9-220 and for any removal of decommissioning
11     costs from base rates pursuant to Section 16-114) and any
12     separate automatic rate adjustment riders (other than a
13     decommissioning rate as defined in Section 16-114) under
14     which the customers were receiving or, had they been
15     customers, would have received electric power and energy
16     from the electric utility during the year immediately
17     preceding the date on which such customers were first
18     eligible for delivery service pursuant to Section 16-104,
19     or (ii) to the extent applicable, any contract rates,
20     including contracts or rates for consolidated or
21     aggregated billing, under which such customers were
22     receiving electric power and energy from the electric
23     utility during such year;
24         (2) less the amount of revenue, other than revenue from
25     transition charges and decommissioning rates, that the
26     electric utility would receive from such retail customers
27     for delivery services provided by the electric utility,
28     assuming such customers were taking delivery services for
29     all of their usage, based on the delivery services tariffs
30     in effect during the year for which the transition charge
31     is being calculated and on the usage identified in
32     paragraph (1);
33         (3) less the market value for the electric power and
34     energy that the electric utility would have used to supply

 

 

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1     all of such customers' electric power and energy
2     requirements, as a tariffed service, based on the usage
3     identified in paragraph (1), with such market value
4     determined in accordance with Section 16-112 of this Act;
5         (4) less the following amount which represents the
6     amount to be attributed to new revenue sources and cost
7     reductions by the electric utility through the end of the
8     period for which transition costs are recovered pursuant to
9     Section 16-108, referred to in this Article XVI as a
10     "mitigation factor":
11             (A) for nonresidential retail customers, an amount
12         equal to the greater of (i) 0.5 cents per kilowatt-hour
13         during the period October 1, 1999 through December 31,
14         2004, 0.6 cents per kilowatt-hour in calendar year
15         2005, and 0.9 cents per kilowatt-hour in calendar year
16         2006, multiplied in each year by the usage identified
17         in paragraph (1), or (ii) an amount equal to the
18         following percentages of the amount produced by
19         applying the applicable base rates (adjusted as
20         described in subparagraph (1)(B)) or contract rate to
21         the usage identified in paragraph (1): 8% for the
22         period October 1, 1999 through December 31, 2002, 10%
23         in calendar years 2003 and 2004, 11% in calendar year
24         2005 and 12% in calendar year 2006; and
25             (B) for residential retail customers, an amount
26         equal to the following percentages of the amount
27         produced by applying the base rates in effect on
28         October 1, 1996 (adjusted as described in subparagraph
29         (1)(B)) to the usage identified in paragraph (1): (i)
30         6% from May 1, 2002 through December 31, 2002, (ii) 7%
31         in calendar years 2003 and 2004, (iii) 8% in calendar
32         year 2005, and (iv) 10% in calendar year 2006;
33         (5) divided by the usage of such customers identified
34     in paragraph (1),

 

 

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1 provided that the transition charge shall never be less than
2 zero.
3     "Unbundled service" means a component or constituent part
4 of a tariffed service which the electric utility subsequently
5 offers separately to its customers.
6 (Source: P.A. 94-977, eff. 6-30-06.)".
 
7     (220 ILCS 5/16-111)
8     Sec. 16-111. Rates and restructuring transactions during
9 mandatory transition period.
10     (a) During the mandatory transition period,
11 notwithstanding any provision of Article IX of this Act, and
12 except as provided in subsections (b), (d), (e), and (f) of
13 this Section, the Commission shall order all electric utilities
14 that, on December 31, 2005, served at least 100,000 customers
15 to file and implement tariffs to reinstate all 2006 rates
16 within 10 days after the effective date of this amendatory Act
17 of the 94th General Assembly, and the Commission shall not,
18 prior to 2010, (i) initiate, authorize or order any change by
19 way of increase (other than in connection with a request for
20 rate increase which was filed after September 1, 1997 but prior
21 to October 15, 1997, by an electric utility serving less than
22 12,500 customers in this State) or (ii) , (ii) initiate or,
23 unless requested by the electric utility, authorize or order
24 any change by way of decrease, restructuring or unbundling
25 (except as provided in Section 16-109A), in the rates of any
26 electric utility that were in effect on October 1, 1996, or
27 (iii) in any order approving any application for a merger
28 pursuant to Section 7-204 that was pending as of May 16, 1997,
29 impose any condition requiring any filing for an increase,
30 decrease, or change in, or other review of, an electric
31 utility's rates or enforce any such condition of any such
32 order; provided, however, that this subsection shall not
33 prohibit the Commission from:

 

 

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1         (1) (blank); approving the application of an electric
2     utility to implement an alternative to rate of return
3     regulation or a regulatory mechanism that rewards or
4     penalizes the electric utility through adjustment of rates
5     based on utility performance, pursuant to Section 9-244;
6         (2) authorizing an electric utility to eliminate its
7     fuel adjustment clause and adjust its base rate tariffs in
8     accordance with subsection (b), (d), or (f) of Section
9     9-220 of this Act, to fix its fuel adjustment factor in
10     accordance with subsection (c) of Section 9-220 of this
11     Act, or to eliminate its fuel adjustment clause in
12     accordance with subsection (e) of Section 9-220 of this
13     Act;
14         (3) ordering into effect tariffs for delivery services
15     and transition charges in accordance with Sections 16-104
16     and 16-108, for real-time pricing in accordance with
17     Section 16-107, or the options required by Section 16-110
18     and subsection (n) of 16-112, allowing a billing experiment
19     in accordance with Section 16-106, or modifying delivery
20     services tariffs in accordance with Section 16-109; or
21         (4) ordering or allowing into effect any tariff to
22     recover charges pursuant to Sections 9-201.5, 9-220.1,
23     9-221, 9-222 (except as provided in Section 9-222.1),
24     16-108, and 16-114 of this Act, Section 5-5 of the
25     Electricity Infrastructure Maintenance Fee Law, Section
26     6-5 of the Renewable Energy, Energy Efficiency, and Coal
27     Resources Development Law of 1997, and Section 13 of the
28     Energy Assistance Act.
29     After December 31, 2004, the provisions of this subsection
30 (a) shall not apply to an electric utility whose average
31 residential retail rate was less than or equal to 90% of the
32 average residential retail rate for the "Midwest Utilities", as
33 that term is defined in subsection (b) of this Section, based
34 on data reported on Form 1 to the Federal Energy Regulatory

 

 

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1 Commission for calendar year 1995, and which served between
2 150,000 and 250,000 retail customers in this State on January
3 1, 1995 unless the electric utility or its holding company has
4 been acquired by or merged with an affiliate of another
5 electric utility subsequent to January 1, 2002. This exemption
6 shall be limited to this subsection (a) and shall not extend to
7 any other provisions of this Act.
8     (a-5) During the remainder of the mandatory transition
9 period, if any, the Commission may modify rates in accordance
10 with Article IX of this Act.
11     (b) Notwithstanding the provisions of subsection (a), each
12 Illinois electric utility serving more than 12,500 customers in
13 Illinois shall file tariffs (i) reducing, effective August 1,
14 1998, each component of its base rates to residential retail
15 customers by 15% from the base rates in effect immediately
16 prior to January 1, 1998 and (ii) if the public utility
17 provides electric service to (A) more than 500,000 customers
18 but less than 1,000,000 customers in this State on January 1,
19 1999, reducing, effective May 1, 2002, each component of its
20 base rates to residential retail customers by an additional 5%
21 from the base rates in effect immediately prior to January 1,
22 1998, or (B) at least 1,000,000 customers in this State on
23 January 1, 1999, reducing, effective October 1, 2001, each
24 component of its base rates to residential retail customers by
25 an additional 5% from the base rates in effect immediately
26 prior to January 1, 1998. Provided, however, that (A) if an
27 electric utility's average residential retail rate is less than
28 or equal to the average residential retail rate for a group of
29 Midwest Utilities (consisting of all investor-owned electric
30 utilities with annual system peaks in excess of 1000 megawatts
31 in the States of Illinois, Indiana, Iowa, Kentucky, Michigan,
32 Missouri, Ohio, and Wisconsin), based on data reported on Form
33 1 to the Federal Energy Regulatory Commission for calendar year
34 1995, then it shall only be required to file tariffs (i)

 

 

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1 reducing, effective August 1, 1998, each component of its base
2 rates to residential retail customers by 5% from the base rates
3 in effect immediately prior to January 1, 1998, (ii) reducing,
4 effective October 1, 2000, each component of its base rates to
5 residential retail customers by the lesser of 5% of the base
6 rates in effect immediately prior to January 1, 1998 or the
7 percentage by which the electric utility's average residential
8 retail rate exceeds the average residential retail rate of the
9 Midwest Utilities, based on data reported on Form 1 to the
10 Federal Energy Regulatory Commission for calendar year 1999,
11 and (iii) reducing, effective October 1, 2002, each component
12 of its base rates to residential retail customers by an
13 additional amount equal to the lesser of 5% of the base rates
14 in effect immediately prior to January 1, 1998 or the
15 percentage by which the electric utility's average residential
16 retail rate exceeds the average residential retail rate of the
17 Midwest Utilities, based on data reported on Form 1 to the
18 Federal Energy Regulatory Commission for calendar year 2001;
19 and (B) if the average residential retail rate of an electric
20 utility serving between 150,000 and 250,000 retail customers in
21 this State on January 1, 1995 is less than or equal to 90% of
22 the average residential retail rate for the Midwest Utilities,
23 based on data reported on Form 1 to the Federal Energy
24 Regulatory Commission for calendar year 1995, then it shall
25 only be required to file tariffs (i) reducing, effective August
26 1, 1998, each component of its base rates to residential retail
27 customers by 2% from the base rates in effect immediately prior
28 to January 1, 1998; (ii) reducing, effective October 1, 2000,
29 each component of its base rates to residential retail
30 customers by 2% from the base rate in effect immediately prior
31 to January 1, 1998; and (iii) reducing, effective October 1,
32 2002, each component of its base rates to residential retail
33 customers by 1% from the base rates in effect immediately prior
34 to January 1, 1998. Provided, further, that any electric

 

 

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1 utility for which a decrease in base rates has been or is
2 placed into effect between October 1, 1996 and the dates
3 specified in the preceding sentences of this subsection, other
4 than pursuant to the requirements of this subsection, shall be
5 entitled to reduce the amount of any reduction or reductions in
6 its base rates required by this subsection by the amount of
7 such other decrease. The tariffs required under this subsection
8 shall be filed 45 days in advance of the effective date.
9 Notwithstanding anything to the contrary in Section 9-220 of
10 this Act, no restatement of base rates in conjunction with the
11 elimination of a fuel adjustment clause under that Section
12 shall result in a lesser decrease in base rates than customers
13 would otherwise receive under this subsection had the electric
14 utility's fuel adjustment clause not been eliminated.
15     (c) Any utility reducing its base rates by 15% on August 1,
16 1998 pursuant to subsection (b) shall include the following
17 statement on its bills for residential customers from August 1
18 through December 31, 1998: "Effective August 1, 1998, your
19 rates have been reduced by 15% by the Electric Service Customer
20 Choice and Rate Relief Law of 1997 passed by the Illinois
21 General Assembly.". Any utility reducing its base rates by 5%
22 on August 1, 1998, pursuant to subsection (b) shall include the
23 following statement on its bills for residential customers from
24 August 1 through December 31, 1998: "Effective August 1, 1998,
25 your rates have been reduced by 5% by the Electric Service
26 Customer Choice and Rate Relief Law of 1997 passed by the
27 Illinois General Assembly.".
28     Any utility reducing its base rates by 2% on August 1, 1998
29 pursuant to subsection (b) shall include the following
30 statement on its bills for residential customers from August 1
31 through December 31, 1998: "Effective August 1, 1998, your
32 rates have been reduced by 2% by the Electric Service Customer
33 Choice and Rate Relief Law of 1997 passed by the Illinois
34 General Assembly.".

 

 

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1     (d) During the mandatory transition period, but not before
2 January 1, 2000, and notwithstanding the provisions of
3 subsection (a), an electric utility may request an increase in
4 its base rates if the electric utility demonstrates that the
5 2-year average of its earned rate of return on common equity,
6 calculated as its net income applicable to common stock divided
7 by the average of its beginning and ending balances of common
8 equity using data reported in the electric utility's Form 1
9 report to the Federal Energy Regulatory Commission but adjusted
10 to remove the effects of accelerated depreciation or
11 amortization or other transition or mitigation measures
12 implemented by the electric utility pursuant to subsection (g)
13 of this Section and the effect of any refund paid pursuant to
14 subsection (e) of this Section, is below the 2-year average for
15 the same 2 years of the monthly average yields of 30-year U.S.
16 Treasury bonds published by the Board of Governors of the
17 Federal Reserve System in its weekly H.15 Statistical Release
18 or successor publication. The Commission shall review the
19 electric utility's request, and may review the justness and
20 reasonableness of all rates for tariffed services, in
21 accordance with the provisions of Article IX of this Act,
22 provided that the Commission shall consider any special or
23 negotiated adjustments to the revenue requirement agreed to
24 between the electric utility and the other parties to the
25 proceeding. In setting rates under this Section, the Commission
26 shall exclude the costs and revenues that are associated with
27 competitive services and any billing or pricing experiments
28 conducted under Section 16-106.
29     (e) For the purposes of this subsection (e) all
30 calculations and comparisons shall be performed for the
31 Illinois operations of multijurisdictional utilities. During
32 the mandatory transition period, notwithstanding the
33 provisions of subsection (a), if the 2-year average of an
34 electric utility's earned rate of return on common equity,

 

 

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1 calculated as its net income applicable to common stock divided
2 by the average of its beginning and ending balances of common
3 equity using data reported in the electric utility's Form 1
4 report to the Federal Energy Regulatory Commission but adjusted
5 to remove the effect of any refund paid under this subsection
6 (e), and further adjusted to include the annual amortization of
7 any difference between the consideration received by an
8 affiliated interest of the electric utility in the sale of an
9 asset which had been sold or transferred by the electric
10 utility to the affiliated interest subsequent to the effective
11 date of this amendatory Act of 1997 and the consideration for
12 which such asset had been sold or transferred to the affiliated
13 interest, with such difference to be amortized ratably from the
14 date of the sale by the affiliated interest to December 31,
15 2006, exceeds the 2-year average of the Index for the same 2
16 years by 1.5 or more percentage points, the electric utility
17 shall make refunds to customers beginning the first billing day
18 of April in the following year in the manner described in
19 paragraph (3) of this subsection. For purposes of this
20 subsection (e), the "Index" shall be the sum of (A) the average
21 for the 12 months ended September 30 of the monthly average
22 yields of 30-year U.S. Treasury bonds published by the Board of
23 Governors of the Federal Reserve System in its weekly H.15
24 Statistical Release or successor publication for each year 1998
25 through 2006, and (B) (i) 4.00 percentage points for each of
26 the 12-month periods ending September 30, 1998 through
27 September 30, 1999 or 8.00 percentage points if the electric
28 utility's average residential retail rate is less than or equal
29 to 90% of the average residential retail rate for the "Midwest
30 Utilities", as that term is defined in subsection (b) of this
31 Section, based on data reported on Form 1 to the Federal Energy
32 Regulatory Commission for calendar year 1995, and the electric
33 utility served between 150,000 and 250,000 retail customers on
34 January 1, 1995, (ii) 7.00 percentage points for each of the

 

 

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1 12-month periods ending September 30, 2000 through September
2 30, 2006 if the electric utility was providing service to at
3 least 1,000,000 customers in this State on January 1, 1999, or
4 9.00 percentage points if the electric utility's average
5 residential retail rate is less than or equal to 90% of the
6 average residential retail rate for the "Midwest Utilities", as
7 that term is defined in subsection (b) of this Section, based
8 on data reported on Form 1 to the Federal Energy Regulatory
9 Commission for calendar year 1995 and the electric utility
10 served between 150,000 and 250,000 retail customers in this
11 State on January 1, 1995, (iii) 11.00 percentage points for
12 each of the 12-month periods ending September 30, 2000 through
13 September 30, 2006, but only if the electric utility's average
14 residential retail rate is less than or equal to 90% of the
15 average residential retail rate for the "Midwest Utilities", as
16 that term is defined in subsection (b) of this Section, based
17 on data reported on Form 1 to the Federal Energy Regulatory
18 Commission for calendar year 1995, the electric utility served
19 between 150,000 and 250,000 retail customers in this State on
20 January 1, 1995, and the electric utility offers delivery
21 services on or before June 1, 2000 to retail customers whose
22 annual electric energy use comprises 33% of the kilowatt hour
23 sales to that group of retail customers that are classified
24 under Division D, Groups 20 through 39 of the Standard
25 Industrial Classifications set forth in the Standard
26 Industrial Classification Manual published by the United
27 States Office of Management and Budget, excluding the kilowatt
28 hour sales to those customers that are eligible for delivery
29 services pursuant to Section 16-104(a)(1)(i), and offers
30 delivery services to its remaining retail customers classified
31 under Division D, Groups 20 through 39 on or before October 1,
32 2000, and, provided further, that the electric utility commits
33 not to petition pursuant to Section 16-108(f) for entry of an
34 order by the Commission authorizing the electric utility to

 

 

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1 implement transition charges for an additional period after
2 December 31, 2006, or (iv) 5.00 percentage points for each of
3 the 12-month periods ending September 30, 2000 through
4 September 30, 2006 for all other electric utilities or 7.00
5 percentage points for such utilities for each of the 12-month
6 periods ending September 30, 2000 through September 30, 2006
7 for any such utility that commits not to petition pursuant to
8 Section 16-108(f) for entry of an order by the Commission
9 authorizing the electric utility to implement transition
10 charges for an additional period after December 31, 2006 or
11 11.00 percentage points for each of the 12-month periods ending
12 September 30, 2005 and September 30, 2006 for each electric
13 utility providing service to fewer than 6,500, or between
14 75,000 and 150,000, electric retail customers in this State on
15 January 1, 1995 if such utility commits not to petition
16 pursuant to Section 16-108(f) for entry of an order by the
17 Commission authorizing the electric utility to implement
18 transition charges for an additional period after December 31,
19 2006.
20         (1) For purposes of this subsection (e), "excess
21     earnings" means the difference between (A) the 2-year
22     average of the electric utility's earned rate of return on
23     common equity, less (B) the 2-year average of the sum of
24     (i) the Index applicable to each of the 2 years and (ii)
25     1.5 percentage points; provided, that "excess earnings"
26     shall never be less than zero.
27         (2) On or before March 31 of each year 2000 through
28     2007 each electric utility shall file a report with the
29     Commission showing its earned rate of return on common
30     equity, calculated in accordance with this subsection, for
31     the preceding calendar year and the average for the
32     preceding 2 calendar years.
33         (3) If an electric utility has excess earnings,
34     determined in accordance with paragraphs (1) and (2) of

 

 

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1     this subsection, the refunds which the electric utility
2     shall pay to its customers beginning the first billing day
3     of April in the following year shall be calculated and
4     applied as follows:
5             (i) The electric utility's excess earnings shall
6         be multiplied by the average of the beginning and
7         ending balances of the electric utility's common
8         equity for the 2-year period in which excess earnings
9         occurred.
10             (ii) The result of the calculation in (i) shall be
11         multiplied by 0.50 and then divided by a number equal
12         to 1 minus the electric utility's composite federal and
13         State income tax rate.
14             (iii) The result of the calculation in (ii) shall
15         be divided by the sum of the electric utility's
16         projected total kilowatt-hour sales to retail
17         customers plus projected kilowatt-hours to be
18         delivered to delivery services customers over a one
19         year period beginning with the first billing date in
20         April in the succeeding year to determine a cents per
21         kilowatt-hour refund factor.
22             (iv) The cents per kilowatt-hour refund factor
23         calculated in (iii) shall be credited to the electric
24         utility's customers by applying the factor on the
25         customer's monthly bills to each kilowatt-hour sold or
26         delivered until the total amount calculated in (ii) has
27         been paid to customers.
28     (f) During the mandatory transition period, an electric
29 utility may file revised tariffs reducing the price of any
30 tariffed service offered by the electric utility for all
31 customers taking that tariffed service, which shall be
32 effective 7 days after filing.
33     (g) During the mandatory transition period, an electric
34 utility may, without obtaining any approval of the Commission

 

 

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1 other than that provided for in this subsection and
2 notwithstanding any other provision of this Act or any rule or
3 regulation of the Commission that would require such approval:
4         (1) implement a reorganization, other than a merger of
5     2 or more public utilities as defined in Section 3-105 or
6     their holding companies;
7         (2) retire generating plants from service;
8         (3) sell, assign, lease or otherwise transfer assets to
9     an affiliated or unaffiliated entity and as part of such
10     transaction enter into service agreements, power purchase
11     agreements, or other agreements with the transferee;
12     provided, however, that the prices, terms and conditions of
13     any power purchase agreement must be approved or allowed
14     into effect by the Federal Energy Regulatory Commission; or
15         (4) use any accelerated cost recovery method including
16     accelerated depreciation, accelerated amortization or
17     other capital recovery methods, or record reductions to the
18     original cost of its assets.
19     In order to implement a reorganization, retire generating
20 plants from service, or sell, assign, lease or otherwise
21 transfer assets pursuant to this Section, the electric utility
22 shall comply with subsections (c) and (d) of Section 16-128, if
23 applicable, and subsection (k) of this Section, if applicable,
24 and provide the Commission with at least 30 days notice of the
25 proposed reorganization or transaction, which notice shall
26 include the following information:
27             (i) a complete statement of the entries that the
28         electric utility will make on its books and records of
29         account to implement the proposed reorganization or
30         transaction together with a certification from an
31         independent certified public accountant that such
32         entries are in accord with generally accepted
33         accounting principles and, if the Commission has
34         previously approved guidelines for cost allocations

 

 

09400SB1714ham003 - 19 - LRB094 10702 RCE 60955 a

1         between the utility and its affiliates, a
2         certification from the chief accounting officer of the
3         utility that such entries are in accord with those cost
4         allocation guidelines;
5             (ii) a description of how the electric utility will
6         use proceeds of any sale, assignment, lease or transfer
7         to retire debt or otherwise reduce or recover the costs
8         of services provided by such electric utility;
9             (iii) a list of all federal approvals or approvals
10         required from departments and agencies of this State,
11         other than the Commission, that the electric utility
12         has or will obtain before implementing the
13         reorganization or transaction;
14             (iv) an irrevocable commitment by the electric
15         utility that it will not, as a result of the
16         transaction, impose any stranded cost charges that it
17         might otherwise be allowed to charge retail customers
18         under federal law or increase the transition charges
19         that it is otherwise entitled to collect under this
20         Article XVI; and
21             (v) if the electric utility proposes to sell,
22         assign, lease or otherwise transfer a generating plant
23         that brings the amount of net dependable generating
24         capacity transferred pursuant to this subsection to an
25         amount equal to or greater than 15% of the electric
26         utility's net dependable capacity as of the effective
27         date of this amendatory Act of 1997, and enters into a
28         power purchase agreement with the entity to which such
29         generating plant is sold, assigned, leased, or
30         otherwise transferred, the electric utility also
31         agrees, if its fuel adjustment clause has not already
32         been eliminated, to eliminate its fuel adjustment
33         clause in accordance with subsection (b) of Section
34         9-220 for a period of time equal to the length of any

 

 

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1         such power purchase agreement or successor agreement,
2         or until January 1, 2005, whichever is longer; if the
3         capacity of the generating plant so transferred and
4         related power purchase agreement does not result in the
5         elimination of the fuel adjustment clause under this
6         subsection, and the fuel adjustment clause has not
7         already been eliminated, the electric utility shall
8         agree that the costs associated with the transferred
9         plant that are included in the calculation of the rate
10         per kilowatt-hour to be applied pursuant to the
11         electric utility's fuel adjustment clause during such
12         period shall not exceed the per kilowatt-hour cost
13         associated with such generating plant included in the
14         electric utility's fuel adjustment clause during the
15         full calendar year preceding the transfer, with such
16         limit to be adjusted each year thereafter by the Gross
17         Domestic Product Implicit Price Deflator.
18             (vi) In addition, if the electric utility proposes
19         to sell, assign, or lease, (A) either (1) an amount of
20         generating plant that brings the amount of net
21         dependable generating capacity transferred pursuant to
22         this subsection to an amount equal to or greater than
23         15% of its net dependable capacity on the effective
24         date of this amendatory Act of 1997, or (2) one or more
25         generating plants with a total net dependable capacity
26         of 1100 megawatts, or (B) transmission and
27         distribution facilities that either (1) bring the
28         amount of transmission and distribution facilities
29         transferred pursuant to this subsection to an amount
30         equal to or greater than 15% of the electric utility's
31         total depreciated original cost investment in such
32         facilities, or (2) represent an investment of
33         $25,000,000 in terms of total depreciated original
34         cost, the electric utility shall provide, in addition

 

 

09400SB1714ham003 - 21 - LRB094 10702 RCE 60955 a

1         to the information listed in subparagraphs (i) through
2         (v), the following information: (A) a description of
3         how the electric utility will meet its service
4         obligations under this Act in a safe and reliable
5         manner and (B) the electric utility's projected earned
6         rate of return on common equity, calculated in
7         accordance with subsection (d) of this Section, for
8         each year from the date of the notice through December
9         31, 2006 both with and without the proposed
10         transaction. If the Commission has not issued an order
11         initiating a hearing on the proposed transaction
12         within 30 days after the date the electric utility's
13         notice is filed, the transaction shall be deemed
14         approved. The Commission may, after notice and
15         hearing, prohibit the proposed transaction if it makes
16         either or both of the following findings: (1) that the
17         proposed transaction will render the electric utility
18         unable to provide its tariffed services in a safe and
19         reliable manner, or (2) that there is a strong
20         likelihood that consummation of the proposed
21         transaction will result in the electric utility being
22         entitled to request an increase in its base rates
23         during the mandatory transition period pursuant to
24         subsection (d) of this Section. Any hearing initiated
25         by the Commission into the proposed transaction shall
26         be completed, and the Commission's final order
27         approving or prohibiting the proposed transaction
28         shall be entered, within 90 days after the date the
29         electric utility's notice was filed. Provided,
30         however, that a sale, assignment, or lease of
31         transmission facilities to an independent system
32         operator that meets the requirements of Section 16-126
33         shall not be subject to Commission approval under this
34         Section.

 

 

09400SB1714ham003 - 22 - LRB094 10702 RCE 60955 a

1             In any proceeding conducted by the Commission
2         pursuant to this subparagraph (vi), intervention shall
3         be limited to parties with a direct interest in the
4         transaction which is the subject of the hearing and any
5         statutory consumer protection agency as defined in
6         subsection (d) of Section 9-102.1. Notwithstanding the
7         provisions of Section 10-113 of this Act, any
8         application seeking rehearing of an order issued under
9         this subparagraph (vi), whether filed by the electric
10         utility or by an intervening party, shall be filed
11         within 10 days after service of the order.
12     The Commission shall not in any subsequent proceeding or
13 otherwise, review such a reorganization or other transaction
14 authorized by this Section, but shall retain the authority to
15 allocate costs as stated in Section 16-111(i). An entity to
16 which an electric utility sells, assigns, leases or transfers
17 assets pursuant to this subsection (g) shall not, as a result
18 of the transactions specified in this subsection (g), be deemed
19 a public utility as defined in Section 3-105. Nothing in this
20 subsection (g) shall change any requirement under the
21 jurisdiction of the Illinois Department of Nuclear Safety
22 including, but not limited to, the payment of fees. Nothing in
23 this subsection (g) shall exempt a utility from obtaining a
24 certificate pursuant to Section 8-406 of this Act for the
25 construction of a new electric generating facility. Nothing in
26 this subsection (g) is intended to exempt the transactions
27 hereunder from the operation of the federal or State antitrust
28 laws. Nothing in this subsection (g) shall require an electric
29 utility to use the procedures specified in this subsection for
30 any of the transactions specified herein. Any other procedure
31 available under this Act may, at the electric utility's
32 election, be used for any such transaction.
33     (h) During the mandatory transition period, the Commission
34 shall not establish or use any rates of depreciation, which for

 

 

09400SB1714ham003 - 23 - LRB094 10702 RCE 60955 a

1 purposes of this subsection shall include amortization, for any
2 electric utility other than those established pursuant to
3 subsection (c) of Section 5-104 of this Act or utilized
4 pursuant to subsection (g) of this Section. Provided, however,
5 that in any proceeding to review an electric utility's rates
6 for tariffed services pursuant to Section 9-201, 9-202, 9-250
7 or 16-111(d) of this Act, the Commission may establish new
8 rates of depreciation for the electric utility in the same
9 manner provided in subsection (d) of Section 5-104 of this Act.
10 An electric utility implementing an accelerated cost recovery
11 method including accelerated depreciation, accelerated
12 amortization or other capital recovery methods, or recording
13 reductions to the original cost of its assets, pursuant to
14 subsection (g) of this Section, shall file a statement with the
15 Commission describing the accelerated cost recovery method to
16 be implemented or the reduction in the original cost of its
17 assets to be recorded. Upon the filing of such statement, the
18 accelerated cost recovery method or the reduction in the
19 original cost of assets shall be deemed to be approved by the
20 Commission as though an order had been entered by the
21 Commission.
22     (i) Subsequent to the mandatory transition period, the
23 Commission, in any proceeding to establish rates and charges
24 for tariffed services offered by an electric utility, shall
25 consider only (1) the then current or projected revenues,
26 costs, investments and cost of capital directly or indirectly
27 associated with the provision of such tariffed services; (2)
28 collection of transition charges in accordance with Sections
29 16-102 and 16-108 of this Act; (3) recovery of any employee
30 transition costs as described in Section 16-128 which the
31 electric utility is continuing to incur, including recovery of
32 any unamortized portion of such costs previously incurred or
33 committed, with such costs to be equitably allocated among
34 bundled services, delivery services, and contracts with

 

 

09400SB1714ham003 - 24 - LRB094 10702 RCE 60955 a

1 alternative retail electric suppliers; and (4) recovery of the
2 costs associated with the electric utility's compliance with
3 decommissioning funding requirements; and shall not consider
4 any other revenues, costs, investments or cost of capital of
5 either the electric utility or of any affiliate of the electric
6 utility that are not associated with the provision of tariffed
7 services. In setting rates for tariffed services, the
8 Commission shall equitably allocate joint and common costs and
9 investments between the electric utility's competitive and
10 tariffed services. In determining the justness and
11 reasonableness of the electric power and energy component of an
12 electric utility's rates for tariffed services subsequent to
13 the mandatory transition period and prior to the time that the
14 provision of such electric power and energy is declared
15 competitive, the Commission shall consider the extent to which
16 the electric utility's tariffed rates for such component for
17 each customer class exceed the market value determined pursuant
18 to Section 16-112, and, if the electric power and energy
19 component of such tariffed rate exceeds the market value by
20 more than 10% for any customer class, may establish such
21 electric power and energy component at a rate equal to the
22 market value plus 10%. In any such case, the Commission may
23 also elect to extend the provisions of Section 16-111(e) for
24 any period in which the electric utility is collecting
25 transition charges, using information applicable to such
26 period.
27     (j) During the mandatory transition period, an electric
28 utility may elect to transfer to a non-operating income account
29 under the Commission's Uniform System of Accounts either or
30 both of (i) an amount of unamortized investment tax credit that
31 is in addition to the ratable amount which is credited to the
32 electric utility's operating income account for the year in
33 accordance with Section 46(f)(2) of the federal Internal
34 Revenue Code of 1986, as in effect prior to P.L. 101-508, or

 

 

09400SB1714ham003 - 25 - LRB094 10702 RCE 60955 a

1 (ii) "excess tax reserves", as that term is defined in Section
2 203(e)(2)(A) of the federal Tax Reform Act of 1986, provided
3 that (A) the amount transferred may not exceed the amount of
4 the electric utility's assets that were created pursuant to
5 Statement of Financial Accounting Standards No. 71 which the
6 electric utility has written off during the mandatory
7 transition period, and (B) the transfer shall not be effective
8 until approved by the Internal Revenue Service. An electric
9 utility electing to make such a transfer shall file a statement
10 with the Commission stating the amount and timing of the
11 transfer for which it intends to request approval of the
12 Internal Revenue Service, along with a copy of its proposed
13 request to the Internal Revenue Service for a ruling. The
14 Commission shall issue an order within 14 days after the
15 electric utility's filing approving, subject to receipt of
16 approval from the Internal Revenue Service, the proposed
17 transfer.
18     (k) If an electric utility is selling or transferring to a
19 single buyer 5 or more generating plants located in this State
20 with a total net dependable capacity of 5000 megawatts or more
21 pursuant to subsection (g) of this Section and has obtained a
22 sale price or consideration that exceeds 200% of the book value
23 of such plants, the electric utility must provide to the
24 Governor, the President of the Illinois Senate, the Minority
25 Leader of the Illinois Senate, the Speaker of the Illinois
26 House of Representatives, and the Minority Leader of the
27 Illinois House of Representatives no later than 15 days after
28 filing its notice under subsection (g) of this Section or 5
29 days after the date on which this subsection (k) becomes law,
30 whichever is later, a written commitment in which such electric
31 utility agrees to expend $2 billion outside the corporate
32 limits of any municipality with 1,000,000 or more inhabitants
33 within such electric utility's service area, over a 6-year
34 period beginning with the calendar year in which the notice is

 

 

09400SB1714ham003 - 26 - LRB094 10702 RCE 60955 a

1 filed, on projects, programs, and improvements within its
2 service area relating to transmission and distribution
3 including, without limitation, infrastructure expansion,
4 repair and replacement, capital investments, operations and
5 maintenance, and vegetation management.
6 (Source: P.A. 91-50, eff. 6-30-99; 92-537, eff. 6-6-02; 92-690,
7 eff. 7-18-02; revised 9-10-02.)
 
8     (220 ILCS 5/16-113)
9     Sec. 16-113. Declaration of service as a competitive
10 service.
11     (a) An electric utility may, by petition, request the
12 Commission to declare a tariffed service provided by the
13 electric utility to be a competitive service. The electric
14 utility shall give notice of its petition to the public in the
15 same manner that public notice is provided for proposed general
16 increases in rates for tariffed services, in accordance with
17 rules and regulations prescribed by the Commission. The
18 Commission shall hold a hearing and on the petition if a
19 hearing is deemed necessary by the Commission. The Commission
20 shall declare the class of tariffed service to be a competitive
21 service for some identifiable customer segment or group of
22 customers, or some clearly defined geographical area within the
23 electric utility's service area, only after the electric
24 utility demonstrates that at least 33% of the customers in the
25 electric utility's service area that are eligible to take the
26 class of tariffed service instead take service from alternative
27 retail electric suppliers, as defined in Section 16-102, and
28 that at least 3 alternative retail electric suppliers provide
29 service that is comparable to the class of tariffed service to
30 those customers in the utility's service area that do not take
31 service from the electric utility; if the service or a
32 reasonably equivalent substitute service is reasonably
33 available to the customer segment or group or in the defined

 

 

09400SB1714ham003 - 27 - LRB094 10702 RCE 60955 a

1 geographical area at a comparable price from one or more
2 providers other than the electric utility or an affiliate of
3 the electric utility, and the electric utility has lost or
4 there is a reasonable likelihood that the electric utility will
5 lose business for the service to the other provider or
6 providers; provided, that the Commission may not declare the
7 provision of electric power and energy to be competitive
8 pursuant to this subsection with respect to (i) any retail
9 customer or group of retail customers that is not eligible
10 pursuant to Section 16-104 to take delivery services provided
11 by the electric utility and (ii) any residential and small
12 commercial retail customers prior to the last date on which
13 such customers are required to pay transition charges. In
14 determining whether to grant or deny a petition to declare the
15 provision of electric power and energy competitive, the
16 Commission shall consider, in applying the above criteria,
17 whether there is adequate transmission capacity into the
18 service area of the petitioning electric utility to make
19 electric power and energy reasonably available to the customer
20 segment or group or in the defined geographical area from one
21 or more providers other than the electric utility or an
22 affiliate of the electric utility, in accordance with this
23 subsection. The Commission shall make its determination and
24 issue its final order declaring or refusing to declare the
25 service to be a competitive service within 180 120 days
26 following the date that the petition is filed, or otherwise the
27 petition shall be deemed to be granted; provided, that if the
28 petition is deemed to be granted by operation of law, the
29 Commission shall not thereby be precluded from finding and
30 ordering, in a subsequent proceeding initiated by the
31 Commission, and after notice and hearing, that the service is
32 not competitive based on the criteria set forth in this
33 subsection.
34     (b) Any customer except a customer identified in subsection

 

 

09400SB1714ham003 - 28 - LRB094 10702 RCE 60955 a

1 (c) of Section 16-103 who is taking a tariffed service that is
2 declared to be a competitive service pursuant to subsection (a)
3 of this Section shall be entitled to continue to take the
4 service from the electric utility on a tariffed basis for a
5 period of 3 years following the date that the service is
6 declared competitive, or such other period as is stated in the
7 electric utility's tariff pursuant to Section 16-110. This
8 subsection shall not require the electric utility to offer or
9 provide on a tariffed basis any service to any customer (except
10 those customers identified in subsection (c) of Section 16-103)
11 that was not taking such service on a tariffed basis on the
12 date the service was declared to be competitive.
13     (c) If the Commission denies a petition to declare a
14 service to be a competitive service, or determines in a
15 separate proceeding that a service is not competitive based on
16 the criteria set forth in subsection (a), the electric utility
17 may file a new petition no earlier than 6 months following the
18 date of the Commission's order, requesting, on the basis of
19 additional or different facts and circumstances, that the
20 service be declared to be a competitive service.
21     (d) The Commission shall not deny a petition to declare a
22 service to be a competitive service, and shall not find that a
23 service is not a competitive service, on the grounds that it
24 has previously denied the petition of another electric utility
25 to declare the same or a similar service to be a competitive
26 service or has previously determined that the same or a similar
27 service provided by another electric utility is not a
28 competitive service.
29     (e) An electric utility may declare a service, other than
30 delivery services or the provision of electric power or energy,
31 to be competitive by filing with the Commission at least 14
32 days prior to the date on which the service is to become
33 competitive a notice describing the service that is being
34 declared competitive and the date on which it will become

 

 

09400SB1714ham003 - 29 - LRB094 10702 RCE 60955 a

1 competitive; provided, that any customer who is taking a
2 tariffed service that is declared to be a competitive service
3 pursuant to this subsection (e) shall be entitled to continue
4 to take the service from the electric utility on a tariffed
5 basis until the electric utility files, and the Commission
6 grants, a petition to declare the service competitive in
7 accordance with subsection (a) of this Section. The Commission
8 shall be authorized to find and order, after notice and hearing
9 in a subsequent proceeding initiated by the Commission, that
10 any service declared to be competitive pursuant to this
11 subsection (e) is not competitive in accordance with the
12 criteria set forth in subsection (a) of this Section.
13 (Source: P.A. 90-561, eff. 12-16-97.)
 
14     Section 99. Effective date. This Act takes effect upon
15 becoming law.".