Rep. Kevin A. McCarthy
Filed: 2/18/2011
| |||||||
| |||||||
| |||||||
1 | AMENDMENT TO HOUSE BILL 14
| ||||||
2 | AMENDMENT NO. ______. Amend House Bill 14 by replacing | ||||||
3 | everything after the enacting clause with the following:
| ||||||
4 | "Section 5. The Public Utilities Act is amended by adding | ||||||
5 | Sections 16-108.5 and 19-150 as follows: | ||||||
6 | (220 ILCS 5/16-108.5 new) | ||||||
7 | Sec. 16-108.5. Infrastructure investment and | ||||||
8 | modernization; regulatory reform. | ||||||
9 | (a) The General Assembly recognizes that for well over a | ||||||
10 | century Illinois residents and businesses have been | ||||||
11 | well-served by and have benefitted from a comprehensive | ||||||
12 | electric utility system. The General Assembly finds that | ||||||
13 | electric utilities are now entering a new construction cycle | ||||||
14 | that is needed to refurbish, rebuild, modernize, and expand | ||||||
15 | systems to continue to provide safe, reliable, and affordable | ||||||
16 | service to the State's current and future utility customers in |
| |||||||
| |||||||
1 | this newly digitized age. In particular, the General Assembly | ||||||
2 | finds that it is the policy of this State that significant | ||||||
3 | investments must be made in the State's electric grid over the | ||||||
4 | next decade to modernize and upgrade transmission and | ||||||
5 | distribution facilities in the State. These investments will | ||||||
6 | ensure that the State's electric utility infrastructure will | ||||||
7 | promote future economic development in the State and that the | ||||||
8 | State's electric utilities will be able to continue to provide | ||||||
9 | quality electric service to their customers, including | ||||||
10 | innovative technological offerings that will enhance customer | ||||||
11 | experience and choice such as smart meters that are dependent | ||||||
12 | on a modernized or smart grid. These investments, including | ||||||
13 | programs to reinforce the safety and security of high voltage | ||||||
14 | transmission lines, will also ensure that the State's electric | ||||||
15 | utility infrastructure continues to be safe and reliable. The | ||||||
16 | introduction of performance metrics will further ensure that | ||||||
17 | safety and reliability and other indicators are not just | ||||||
18 | maintained but improved by more than 15% over the next decade. | ||||||
19 | The General Assembly further recognizes that, in addition | ||||||
20 | to attracting capital and businesses to the State, these | ||||||
21 | investments will create training opportunities for the | ||||||
22 | citizens of this State, all of which will create new employment | ||||||
23 | opportunities for Illinoisans at a time when they are most | ||||||
24 | needed, especially for minority-owned and female-owned | ||||||
25 | business enterprises. The General Assembly further finds that | ||||||
26 | regulatory reform measures that increase predictability, |
| |||||||
| |||||||
1 | stability, and transparency in the ratemaking process are | ||||||
2 | needed to promote prudent, long-term infrastructure investment | ||||||
3 | and to mutually benefit the State's electric utilities and | ||||||
4 | their customers, regulators, and investors. | ||||||
5 | (b) For purposes of this Section, "participating utility" | ||||||
6 | means an electric utility that voluntarily elects and commits | ||||||
7 | to undertake the infrastructure investment program consisting | ||||||
8 | of the commitments and obligations described in paragraphs (1) | ||||||
9 | and (2) of this subsection (b), notwithstanding any other | ||||||
10 | provisions of this Act and without obtaining any approvals from | ||||||
11 | the Commission or any other agency other than as set forth in | ||||||
12 | this Section, regardless of whether any such approval would | ||||||
13 | otherwise be required, provided further that Illinois electric | ||||||
14 | utilities that are affiliated by virtue of a common parent | ||||||
15 | company may, at such utilities' election, be considered a | ||||||
16 | single electric utility. The utility shall recover the | ||||||
17 | expenditures made under the infrastructure investment program | ||||||
18 | through the ratemaking process, including, but not limited to, | ||||||
19 | the formula rate and process set forth in this Section. | ||||||
20 | During the infrastructure investment program's peak | ||||||
21 | program year, it shall create approximately 2000 full-time | ||||||
22 | equivalent jobs, including direct jobs, contractor positions, | ||||||
23 | positions that would otherwise be eliminated, and induced jobs. | ||||||
24 | For purposes of this Section, "peak program year" means the | ||||||
25 | consecutive 12-month period with the highest number of | ||||||
26 | full-time equivalent jobs that occurs between the beginning of |
| |||||||
| |||||||
1 | investment year 2 and the end of investment year 4. | ||||||
2 | Beginning on the date that the initial rates take effect | ||||||
3 | pursuant to subsection (c) of this Section, a participating | ||||||
4 | utility shall: | ||||||
5 | (1) over a 5-year period, invest at least $1.1 billion | ||||||
6 | in electric system upgrades, modernization projects, and | ||||||
7 | training facilities, including, but not limited to: | ||||||
8 | (A) distribution infrastructure improvements | ||||||
9 | totaling at least $1 billion, including underground | ||||||
10 | residential distribution cable injection and | ||||||
11 | replacement and mainline cable system refurbishment | ||||||
12 | and replacement projects; | ||||||
13 | (B) training facility construction or upgrade | ||||||
14 | projects totaling at least $5 million; any such new | ||||||
15 | facility must be designed for the purpose of obtaining, | ||||||
16 | and the owner of the facility shall apply for, | ||||||
17 | certification under the United States Green Building | ||||||
18 | Council's Leadership in Energy Efficiency Design Green | ||||||
19 | Building Rating System; and | ||||||
20 | (C) wood pole inspection, treatment, and | ||||||
21 | replacement programs; and | ||||||
22 | (2) over a 10-year period, invest at least $1.5 billion | ||||||
23 | to upgrade and modernize its transmission and distribution | ||||||
24 | infrastructure and in smart grid electric system upgrades, | ||||||
25 | including, but not limited to: | ||||||
26 | (A) additional smart meters; |
| |||||||
| |||||||
1 | (B) distribution automation; | ||||||
2 | (C) associated cyber secure data communication | ||||||
3 | network; and | ||||||
4 | (D) substation micro-processor relay upgrades. | ||||||
5 | The investment amounts and job figures set forth in this | ||||||
6 | subsection (b) are applicable to a participating utility that | ||||||
7 | serves 3 million or more electric distribution customers in | ||||||
8 | Illinois. If a participating utility serves less than 3 million | ||||||
9 | electric distribution customers in Illinois, then the | ||||||
10 | infrastructure investment program commitments and obligations | ||||||
11 | described in this subsection (b) shall be reduced | ||||||
12 | proportionately, based on the number of customers, for the | ||||||
13 | utility. | ||||||
14 | The investments in the infrastructure investment program | ||||||
15 | described in this subsection (b) shall be incremental to the | ||||||
16 | participating utility's annual capital investment program, as | ||||||
17 | defined by, for purposes of this subsection (b), the | ||||||
18 | participating utility's average capital spend for calendar | ||||||
19 | years 2008, 2009, and 2010 as reported in the applicable | ||||||
20 | Federal Energy Regulatory Commission (FERC) Form 1. | ||||||
21 | Within 60 days after filing a tariff under subsection (c) | ||||||
22 | of this Section, a participating utility shall submit to the | ||||||
23 | Commission its plan, including scope, schedule, and staffing, | ||||||
24 | for satisfying its infrastructure investment program | ||||||
25 | commitments pursuant to this subsection (b). The submitted plan | ||||||
26 | shall include a schedule and staffing plan for the current |
| |||||||
| |||||||
1 | year. The plan need not allocate the work equally over the | ||||||
2 | respective periods, but should allocate material increments | ||||||
3 | throughout such periods commensurate with the work to be | ||||||
4 | undertaken. No later than September 1 of each subsequent year, | ||||||
5 | the utility shall submit to the Commission a report that | ||||||
6 | includes any update to the plan, a schedule for the current | ||||||
7 | year, the expenditures made for the prior year and | ||||||
8 | cumulatively, and the number of full-time equivalent jobs for | ||||||
9 | the prior year and cumulatively. If the utility is materially | ||||||
10 | deficient in satisfying a schedule or staffing plan, then the | ||||||
11 | plan must also include a corrective action plan to address the | ||||||
12 | deficiency. The fact that the plan or a schedule changes shall | ||||||
13 | not imply the imprudence or unreasonableness of the | ||||||
14 | infrastructure investment program, plan, or schedule. | ||||||
15 | If, subsequent to completion of a corrective action plan, | ||||||
16 | the Commission enters an order finding, after notice and | ||||||
17 | hearing, that a participating utility did not satisfy its peak | ||||||
18 | job commitment described in this subsection (b) for reasons | ||||||
19 | that are reasonably within its control, then the Commission | ||||||
20 | shall also determine, after consideration of the evidence, | ||||||
21 | including, but not limited to, evidence submitted by the | ||||||
22 | Department of Commerce and Economic Opportunity and the | ||||||
23 | utility, the reduction in the number of full-time equivalent | ||||||
24 | jobs during the peak program year due to such failure. The | ||||||
25 | Commission shall notify the Department of any proceeding that | ||||||
26 | is initiated pursuant to this paragraph. For each full-time |
| |||||||
| |||||||
1 | equivalent job deficiency during the peak program year that the | ||||||
2 | Commission finds as set forth in this paragraph, the | ||||||
3 | participating utility shall, within 30 days after the entry of | ||||||
4 | the Commission's order, pay $1,500 to a fund for training | ||||||
5 | grants administered under Section 605-800 of The Department of | ||||||
6 | Commerce and Economic Opportunity Law. | ||||||
7 | If the Commission finds, after notice and hearing, that a | ||||||
8 | participating utility is not satisfying its investment amount | ||||||
9 | commitments described in this subsection (b), then the utility | ||||||
10 | shall no longer be eligible for a formula rate tariff under | ||||||
11 | subsection (c) of this Section. | ||||||
12 | The fact that a participating utility invests more than the | ||||||
13 | minimum amounts specified in this subsection (b) shall not | ||||||
14 | imply imprudence or unreasonableness. | ||||||
15 | If a participating utility ceases to have in effect a | ||||||
16 | formula rate under subsection (c) of this Section, then the | ||||||
17 | participating utility's voluntary commitments and obligations | ||||||
18 | under this subsection (b) shall immediately terminate, except | ||||||
19 | for the utility's obligation to pay an amount already owed to | ||||||
20 | the fund for training grants pursuant to a Commission order. | ||||||
21 | In meeting the obligations of paragraphs (1) and (2) of | ||||||
22 | this subsection (b), to the extent feasible and consistent with | ||||||
23 | State and federal law, the investments under the infrastructure | ||||||
24 | investment program should provide employment opportunities for | ||||||
25 | all segments of the population and workforce, including | ||||||
26 | minority-owned and female-owned business enterprises. |
| |||||||
| |||||||
1 | (c) A participating utility may elect to recover its | ||||||
2 | delivery services costs through a formula rate approved by the | ||||||
3 | Commission, which shall specify the cost components that form | ||||||
4 | the basis of the rate charged to customers with sufficient | ||||||
5 | specificity to operate in a standardized manner and be updated | ||||||
6 | annually with transparent information included in the | ||||||
7 | utility's most recent FERC Form 1 that reflects the utility's | ||||||
8 | actual costs for the applicable 12-month period. In the event | ||||||
9 | the utility recovers a portion of its costs through automatic | ||||||
10 | adjustment clause tariffs on the effective date of this | ||||||
11 | amendatory Act of the 97th General Assembly, the utility may | ||||||
12 | elect to continue to recover these costs through such tariffs, | ||||||
13 | but then these costs shall not be recovered through the formula | ||||||
14 | rate. | ||||||
15 | The formula rate shall be implemented through a tariff | ||||||
16 | filed with the Commission consistent with the provisions of | ||||||
17 | this subsection (c) that shall be applicable to all delivery | ||||||
18 | service customers. The Commission shall initiate and conduct an | ||||||
19 | investigation of the tariff in a manner consistent with the | ||||||
20 | provisions of this subsection (c) and the provisions of Article | ||||||
21 | IX of this Act to the extent they do not conflict with this | ||||||
22 | subsection (c). The formula rate shall remain in effect at the | ||||||
23 | discretion of the utility. The formula rate approved by the | ||||||
24 | Commission shall do the following: | ||||||
25 | (1) Provide for the recovery of the utility's actual | ||||||
26 | costs of service for the applicable 12-month period that |
| |||||||
| |||||||
1 | are prudently incurred and reasonable in amount consistent | ||||||
2 | with Commission practice and law. The fact that a cost | ||||||
3 | differs from that incurred in a prior 12-month period or | ||||||
4 | that an investment is different from that made in a prior | ||||||
5 | 12-month period shall not imply the imprudence or | ||||||
6 | unreasonableness of that cost or investment. | ||||||
7 | (2) Reflect the utility's actual capital structure for | ||||||
8 | the applicable 12-month period, excluding goodwill, | ||||||
9 | subject to a determination of prudence and reasonableness | ||||||
10 | consistent with Commission practice and law. | ||||||
11 | (3) Include a cost of equity, which shall be calculated | ||||||
12 | as the sum of the following: | ||||||
13 | (A) the average for the applicable 12-month period | ||||||
14 | of the monthly average yields of 30-year U.S. Treasury | ||||||
15 | bonds published by the Board of Governors of the | ||||||
16 | Federal Reserve System in its weekly H.15 Statistical | ||||||
17 | Release or successor publication; and | ||||||
18 | (B) 650 basis points. | ||||||
19 | At such time as the Board of Governors of the Federal | ||||||
20 | Reserve System ceases to include the monthly average yields | ||||||
21 | of 30-year U.S. Treasury bonds in its weekly H.15 | ||||||
22 | Statistical Release or successor publication, the monthly | ||||||
23 | average yields of the U.S. Treasury bonds then having the | ||||||
24 | longest duration published by the Board of Governors in its | ||||||
25 | weekly H.15 Statistical Release or successor publication | ||||||
26 | shall instead be used for purposes of this paragraph (3) as |
| |||||||
| |||||||
1 | deemed appropriate by the Commission. | ||||||
2 | (4) Permit and set forth protocols, subject to a | ||||||
3 | determination of prudence and reasonableness consistent | ||||||
4 | with Commission practice and law, for the following: | ||||||
5 | (A) recovery of incentive compensation expense | ||||||
6 | that is based on the achievement of operational | ||||||
7 | metrics, including, but not limited to, metrics | ||||||
8 | related to budget controls, outage duration and | ||||||
9 | frequency, safety, customer service, efficiency and | ||||||
10 | productivity, and environmental compliance. Incentive | ||||||
11 | compensation expense that is based on net income or an | ||||||
12 | affiliate's earnings per share shall not be | ||||||
13 | recoverable under the formula rate; | ||||||
14 | (B) recovery of pension and other post-employment | ||||||
15 | benefits expense based on actual costs incurred for the | ||||||
16 | applicable 12-month period, provided that such costs | ||||||
17 | are supported by an actuarial study; | ||||||
18 | (C) recovery of severance costs amortized over a | ||||||
19 | period that is consistent with savings resulting from | ||||||
20 | the severance; | ||||||
21 | (D) investment return on pension assets net of | ||||||
22 | deferred tax benefits equal to the utility's long-term | ||||||
23 | debt cost of capital as of the end of the applicable | ||||||
24 | 12-month period; | ||||||
25 | (E) recovery of the expenses incurred related to | ||||||
26 | the Commission proceeding under this subsection (c) to |
| |||||||
| |||||||
1 | approve this formula rate and initial rates or to | ||||||
2 | subsequent proceedings related to the formula, | ||||||
3 | provided that the recovery shall be amortized over a | ||||||
4 | three year period; recovery of expenses incurred | ||||||
5 | related to the annual Commission proceedings under | ||||||
6 | subsection (d) of this Section to review the inputs to | ||||||
7 | the formula rate shall be recoverable as expenses in | ||||||
8 | the 12-month period incurred; | ||||||
9 | (F) recovery of existing regulatory assets over | ||||||
10 | the periods previously authorized by the Commission; | ||||||
11 | (G) historical weather normalized billing | ||||||
12 | determinants; and | ||||||
13 | (H) allocation methods for common costs. | ||||||
14 | The Commission's review and order with respect to these | ||||||
15 | protocols shall otherwise be consistent with Commission | ||||||
16 | practice and law. | ||||||
17 | The utility shall file, together with its tariff, data | ||||||
18 | based on its most recent FERC Form 1, plus projected plant | ||||||
19 | additions and correspondingly updated depreciation reserve and | ||||||
20 | expense for the current 12-month period, that shall populate | ||||||
21 | the formula rate and set the initial delivery services rates | ||||||
22 | under the formula. These initial rates shall take effect 30 | ||||||
23 | days after the filing, provided, however, that the initial | ||||||
24 | rates shall be subject to retroactive rate adjustments by the | ||||||
25 | Commission, including, but not limited to, refunds or | ||||||
26 | surcharges, that are designed to incorporate the provisions of |
| |||||||
| |||||||
1 | the Commission's final order approving the formula rate | ||||||
2 | structure and protocols and to give effect to the initial rates | ||||||
3 | as therein approved such that the refunds or surcharges that | ||||||
4 | are applied for the remainder of the period until the first | ||||||
5 | rate update will take effect under subsection (d) shall enable | ||||||
6 | the utility to recover the same amount of revenues the utility | ||||||
7 | otherwise would have recovered had the Commission-approved | ||||||
8 | initial rates been in effect as of the date the tariff was | ||||||
9 | filed. | ||||||
10 | After the utility files its proposed formula rate structure | ||||||
11 | and protocols and initial rates, the Commission shall initiate | ||||||
12 | a docket to review and by order approve, or approve as | ||||||
13 | modified, the formula rate, including the initial rates, as | ||||||
14 | just and reasonable within 180 days after the date on which the | ||||||
15 | tariff was filed, or, if the tariff is filed within 30 days | ||||||
16 | after the effective date of this amendatory Act of the 97th | ||||||
17 | General Assembly, then by December 31, 2011. Such review shall | ||||||
18 | be based on the same evidentiary standards, including, but not | ||||||
19 | limited to, those concerning the prudence and reasonableness of | ||||||
20 | the costs incurred by the utility, the Commission applies in a | ||||||
21 | hearing to review a filing for a general increase in rates | ||||||
22 | under Article IX of this Act. | ||||||
23 | Subsequent changes to the formula rate, including changes | ||||||
24 | to the structure or protocols, shall be made as tariff | ||||||
25 | amendments and filed with the Commission as set forth in | ||||||
26 | Section 9-201 of this Act, provided that any such changes shall |
| |||||||
| |||||||
1 | be consistent with paragraphs (1) through (4) of this | ||||||
2 | subsection (c). | ||||||
3 | After 11 years following the effective date of this | ||||||
4 | amendatory Act of the 97th General Assembly, the Commission may | ||||||
5 | upon petition or its own initiative, but with reasonable | ||||||
6 | notice, enter upon a hearing concerning proposed changes to the | ||||||
7 | formula rate, including those protocols established under | ||||||
8 | paragraph (4) of this subsection (c), provided that there shall | ||||||
9 | be a rebuttable presumption that the protocols are just and | ||||||
10 | reasonable. These proposed changes shall be stated with | ||||||
11 | particularity and accompanied by clear and convincing evidence | ||||||
12 | that the changes are just and reasonable. No such change | ||||||
13 | adopted by the Commission shall be applied to the calculation | ||||||
14 | of the utility's rates until the next calendar year, with the | ||||||
15 | rates to become effective on June 1 of the year following that | ||||||
16 | calendar year, provided that the next calendar year begins no | ||||||
17 | less than 90 days following the date on which the Commission | ||||||
18 | issues an order adopting the change. | ||||||
19 | A participating utility that files a tariff pursuant to | ||||||
20 | this subsection (c) must submit a one-time $200,000 filing fee | ||||||
21 | at the time the Chief Clerk of the Commission accepts the | ||||||
22 | filing, which shall be a recoverable expense. | ||||||
23 | (d) Subsequent to the Commission's issuance of an order | ||||||
24 | approving the utility's formula rate and initial rates under | ||||||
25 | subsection (c) of this Section, the utility shall make an | ||||||
26 | annual informational filing with the Chief Clerk of the |
| |||||||
| |||||||
1 | Commission setting forth its updated cost inputs to the formula | ||||||
2 | rate for the applicable 12-month period and the corresponding | ||||||
3 | new charges. Consistent with this subsection (d), the utility | ||||||
4 | shall submit information as set forth in the Commission's rules | ||||||
5 | applicable to a filing for a general increase in rates. | ||||||
6 | Specifically, for each such filing, the utility shall comply | ||||||
7 | with the following requirements and include the following | ||||||
8 | information: | ||||||
9 | (1) File on or before May 1, with the new charges to | ||||||
10 | take effect beginning with the June billing period of the | ||||||
11 | current year. These charges shall take effect on the first | ||||||
12 | billing day of the June billing period and remain in effect | ||||||
13 | through the last billing day of the following May billing | ||||||
14 | period regardless of whether the Commission enters upon a | ||||||
15 | hearing pursuant to this subsection (d). | ||||||
16 | (2) The inputs to the formula rate for the applicable | ||||||
17 | 12-month period shall be based on historical data from the | ||||||
18 | utility's most recent annual FERC Form 1 plus projected | ||||||
19 | plant additions and correspondingly updated depreciation | ||||||
20 | reserve and expense for the current 12-month period. In | ||||||
21 | addition, the utility shall also present, for the prior | ||||||
22 | applicable 12-month period, a reconciliation of the inputs | ||||||
23 | for the prior applicable period (FERC Form 1 historical | ||||||
24 | data and projected plant additions) with the actual costs | ||||||
25 | incurred in the prior applicable period, and set forth the | ||||||
26 | applicable charge or credit, if any, resulting from the |
| |||||||
| |||||||
1 | reconciliation that is incorporated in the current formula | ||||||
2 | rate. | ||||||
3 | (3) The utility shall include, together with the filing | ||||||
4 | of the update of cost inputs to the formula rate, | ||||||
5 | supporting data and documentation for the applicable | ||||||
6 | 12-month period that is consistent with the Commission's | ||||||
7 | rules applicable to a filing for a general increase in | ||||||
8 | rates and any rules adopted by the Commission to implement | ||||||
9 | this Section. Normalization adjustments shall not be | ||||||
10 | required. Provided, however, that the utility shall | ||||||
11 | amortize extraordinary charges or credits that are beyond | ||||||
12 | its control and non-recurring in nature, including those | ||||||
13 | related to storms, if the charges or credits exceed | ||||||
14 | $10,000,000 in the applicable 12-month period. | ||||||
15 | Within 45 days after the utility files its annual update of | ||||||
16 | cost inputs to the formula rate, the Commission shall have the | ||||||
17 | authority, either upon complaint or its own initiative, but | ||||||
18 | with reasonable notice, to enter upon a hearing concerning the | ||||||
19 | prudence and reasonableness of the costs incurred by the | ||||||
20 | utility during the applicable 12-month period that are | ||||||
21 | reflected in the inputs to the formula rate derived from the | ||||||
22 | utility's FERC Form 1. The complaining party or Commission, to | ||||||
23 | the extent it is acting on its own initiative, shall state each | ||||||
24 | objection with particularity and provide substantial evidence | ||||||
25 | in support thereof, after which the utility shall have the | ||||||
26 | opportunity to rebut the evidence. The Commission shall apply |
| |||||||
| |||||||
1 | the same evidentiary standards, including, but not limited to, | ||||||
2 | those concerning the prudence and reasonableness of the costs | ||||||
3 | incurred by the utility, in the hearing as it would apply in a | ||||||
4 | hearing to review a filing for a general increase in rates | ||||||
5 | under Article IX of this Act. The Commission shall not, | ||||||
6 | however, have the authority in a proceeding under this | ||||||
7 | subsection (d) to consider or order any changes to the | ||||||
8 | structure or protocols of the formula rate approved pursuant to | ||||||
9 | subsection (c) of this Section. In a proceeding under this | ||||||
10 | subsection (d), the Commission shall enter its order no later | ||||||
11 | than 180 days after the utility's filing of its annual update | ||||||
12 | of cost inputs to the formula rate, provided that the | ||||||
13 | Commission may, in its discretion, extend the period for a | ||||||
14 | further period not to exceed 75 days. If, in the order, the | ||||||
15 | Commission approves an adjustment to the inputs of the formula | ||||||
16 | rate, then the adjustment, whether in the form of a charge or | ||||||
17 | credit, with interest, shall be applied prospectively through | ||||||
18 | the formula rate. The Commission's determinations of the | ||||||
19 | prudence and reasonableness of the costs incurred for the | ||||||
20 | applicable 12-month period shall be final upon entry of the | ||||||
21 | Commission's order and shall not be subject to reopening, | ||||||
22 | reexamination, or collateral attack in any other proceeding, | ||||||
23 | case, docket, order, rule or regulation, provided, however, | ||||||
24 | that nothing in this subsection (d) shall prohibit a party from | ||||||
25 | petitioning the Commission to rehear or appeal to the courts | ||||||
26 | the order pursuant to the provisions this Act. |
| |||||||
| |||||||
1 | In the event the Commission does not, either upon complaint | ||||||
2 | or its own initiative, enter upon a hearing within 45 days | ||||||
3 | after the utility files the annual update of cost inputs to its | ||||||
4 | formula rate, then the costs incurred for the applicable | ||||||
5 | 12-month period shall be deemed prudent and reasonable, and the | ||||||
6 | filed charges shall not be subject to reopening, reexamination, | ||||||
7 | or collateral attack in any other proceeding, case, docket, | ||||||
8 | order, rule, or regulation. | ||||||
9 | (e) Nothing in subsections (c) or (d) of this Section shall | ||||||
10 | prohibit the Commission from investigating, or an electric | ||||||
11 | utility from filing, revenue-neutral tariff changes related to | ||||||
12 | rate design of a formula rate that has been placed into effect | ||||||
13 | for the utility. Following approval of an electric utility's | ||||||
14 | formula rate pursuant to subsection (c) of this Section, the | ||||||
15 | utility shall make a filing with the Commission during each | ||||||
16 | subsequent 3-year period that either proposes revenue-neutral | ||||||
17 | tariff changes or re-files the existing tariffs without change, | ||||||
18 | which shall present the Commission with an opportunity to | ||||||
19 | suspend the tariffs and consider revenue-neutral tariff | ||||||
20 | changes related to rate design. | ||||||
21 | (f) Within 30 days after the filing of a tariff pursuant to | ||||||
22 | subsection (c) of this Section, each participating utility | ||||||
23 | shall develop and file with the Commission a multi-year plan | ||||||
24 | that has the goal of cumulatively improving performance in each | ||||||
25 | of the following categories by 15% over a 10-year period: (1) | ||||||
26 | reliability, (2) safety, (3) providing opportunities for |
| |||||||
| |||||||
1 | minority-owned and female-owned business enterprises | ||||||
2 | consistent with State and federal law, and (4) customer | ||||||
3 | service. The plan may include financial incentives. If the plan | ||||||
4 | does include financial incentives, then it must also include | ||||||
5 | symmetrical financial penalties and is subject to Commission | ||||||
6 | review and modification following notice and hearing. The | ||||||
7 | Commission shall enter an order in the proceeding within 120 | ||||||
8 | days after the plan is filed. If the Commission modifies the | ||||||
9 | plan, then the participating utility may elect to proceed with | ||||||
10 | the plan as modified or to proceed with the plan without | ||||||
11 | financial incentives. | ||||||
12 | On October 1 of each subsequent year, each participating | ||||||
13 | utility shall file a report with the Commission that includes | ||||||
14 | performance under each metric, a discussion of performance | ||||||
15 | under the plan, and any updates to the plan. If the Commission | ||||||
16 | finds in any annual period that the achieved metrics do not | ||||||
17 | show material movement such that the goal is likely to be | ||||||
18 | achieved and then maintained in any or all categories, then the | ||||||
19 | Commission may require the participating utility to devise a | ||||||
20 | corrective action plan, subject to Commission approval and | ||||||
21 | oversight, to bring performance back on track toward reaching | ||||||
22 | and maintaining the 15% goal. | ||||||
23 | (g) Nothing in this Section is intended to legislatively | ||||||
24 | overturn the opinion issued in Commonwealth Edison Co. v. Ill. | ||||||
25 | Commerce Comm'n, Nos. 2-08-0959, 2-08-1037, 2-08-1137, | ||||||
26 | 1-08-3008, 1-08-3030, 1-08-3054, 1-08-3313 cons. (Ill. App. |
| |||||||
| |||||||
1 | Ct. 2d Dist. Sept. 30, 2010) or impact any subsequent review by | ||||||
2 | the Illinois Supreme Court of that opinion. | ||||||
3 | (220 ILCS 5/19-150 new) | ||||||
4 | Sec. 19-150. Infrastructure investment and modernization; | ||||||
5 | regulatory reform. | ||||||
6 | (a) The General Assembly recognizes that for well over a | ||||||
7 | century, Illinois residents and businesses have been | ||||||
8 | well-served by and have benefitted from a comprehensive gas | ||||||
9 | utility system. The General Assembly finds that gas utilities | ||||||
10 | are now entering a new construction cycle that is needed to | ||||||
11 | refurbish, modernize, and expand systems to continue to provide | ||||||
12 | safe, reliable, and affordable service to the State's current | ||||||
13 | and future gas customers in this newly digitized age. In | ||||||
14 | particular, the General Assembly finds that it is the policy of | ||||||
15 | this State that significant investments need to be made over | ||||||
16 | the next decade to modernize and upgrade gas distribution | ||||||
17 | systems in the State. These investments will ensure that the | ||||||
18 | State's gas infrastructure will promote future economic | ||||||
19 | development in the State and that the State's utilities will be | ||||||
20 | able to continue to provide quality gas service to their | ||||||
21 | customers, including innovative technological offerings that | ||||||
22 | will enhance customer experience and choice. These investments | ||||||
23 | will also ensure that the State's gas utility infrastructure | ||||||
24 | continues to be safe and reliable. The introduction of | ||||||
25 | performance metrics will further ensure that safety and |
| |||||||
| |||||||
1 | reliability and other indicators are not just maintained but | ||||||
2 | improved by more than 15% over the next decade. | ||||||
3 | The General Assembly further recognizes that, in addition | ||||||
4 | to attracting capital and businesses to the State, these | ||||||
5 | investments will create training opportunities for the | ||||||
6 | citizens of this State, all of which will create new employment | ||||||
7 | opportunities for Illinoisans at a time when they are most | ||||||
8 | needed, especially for female-owned and minority-owned | ||||||
9 | business enterprises. The General Assembly further finds that | ||||||
10 | regulatory reform measures that increase predictability, | ||||||
11 | stability, and transparency in the ratemaking process are | ||||||
12 | needed to promote prudent, long-term infrastructure investment | ||||||
13 | and to mutually benefit the State's gas utilities and their | ||||||
14 | customers, regulators and investors. | ||||||
15 | (b) For purposes of this Section, "participating utility" | ||||||
16 | means a gas utility that voluntarily elects and commits to | ||||||
17 | undertake the infrastructure investment program consisting of | ||||||
18 | the commitments and obligations described in this subsection | ||||||
19 | (b), notwithstanding any other provisions of this Act and | ||||||
20 | without obtaining any approvals from the Commission or any | ||||||
21 | other agency other than as set forth in this Section, | ||||||
22 | regardless of whether any such approval would otherwise be | ||||||
23 | required, provided further that Illinois gas utilities that are | ||||||
24 | affiliated by virtue of a common parent company may, at such | ||||||
25 | utilities' election, be considered a single gas utility. The | ||||||
26 | utility shall recover the expenditures made under the |
| |||||||
| |||||||
1 | infrastructure investment program through the ratemaking | ||||||
2 | process, including, but not limited to, the formula rate and | ||||||
3 | process set forth in this Section. | ||||||
4 | During the infrastructure investment program's peak | ||||||
5 | program year, it shall create approximately 400 full-time | ||||||
6 | equivalent jobs, including direct jobs, contractor positions, | ||||||
7 | positions that would otherwise be eliminated, and induced jobs. | ||||||
8 | For purposes of this Section, "peak program year" means the | ||||||
9 | consecutive 12-month period with the highest number of | ||||||
10 | full-time equivalent jobs that occurs between the beginning of | ||||||
11 | investment year 2 and the end of investment year 4. Beginning | ||||||
12 | on the date the initial rates take effect pursuant to | ||||||
13 | subsection (c) of this Section, a participating utility shall | ||||||
14 | invest over a 10-year period at least $500,000,000.00 in | ||||||
15 | distribution and transmission upgrades, modernization and | ||||||
16 | compliance projects, and training facilities. | ||||||
17 | The investment amounts and job figures set forth in this | ||||||
18 | subsection (b) are applicable to a participating utility that | ||||||
19 | serves 2 million or more customers in Illinois. If a | ||||||
20 | participating utility serves less than 2 million customers in | ||||||
21 | Illinois, then the infrastructure investment program | ||||||
22 | commitments and obligations described in this subsection (b) | ||||||
23 | shall be reduced proportionately, based on the number of | ||||||
24 | customers, for the utility. | ||||||
25 | The investments in the infrastructure investment program | ||||||
26 | described in this subsection (b) shall be incremental to the |
| |||||||
| |||||||
1 | participating utility's annual capital investment program, as | ||||||
2 | defined by, for purposes of this subsection (b), the | ||||||
3 | participating utility's average capital spend for calendar | ||||||
4 | years 2008, 2009, and 2010 as reported in the applicable | ||||||
5 | Federal Energy Regulatory Commission (FERC) Form 2 or, if the | ||||||
6 | FERC Form 2 was not filed, in the applicable Form 21 ILCC. | ||||||
7 | Within 60 days after filing a tariff under subsection (c) | ||||||
8 | of this Section, a participating utility shall submit to the | ||||||
9 | Commission its plan, including scope, schedule, and staffing, | ||||||
10 | for satisfying its infrastructure investment program | ||||||
11 | commitments pursuant to this subsection (b). The submitted plan | ||||||
12 | shall include a schedule and staffing plan for the current | ||||||
13 | year. The plan need not allocate the work equally over the | ||||||
14 | respective periods, but should allocate material increments | ||||||
15 | throughout these periods commensurate with the work to be | ||||||
16 | undertaken. No later than September 1 of each subsequent year, | ||||||
17 | the utility shall submit to the Commission a report that | ||||||
18 | includes any update to the plan, a schedule for the current | ||||||
19 | year, the expenditures made for the prior year and | ||||||
20 | cumulatively, and the number of full-time equivalent jobs for | ||||||
21 | the prior year and cumulatively. If the utility is materially | ||||||
22 | deficient in satisfying a schedule or staffing plan, then the | ||||||
23 | plan must also include a corrective action plan to address the | ||||||
24 | deficiency. The fact that the plan or a schedule changes shall | ||||||
25 | not imply the imprudence or unreasonableness of the | ||||||
26 | infrastructure investment program, plan, or schedule. |
| |||||||
| |||||||
1 | If, subsequent to completion of a corrective action plan, | ||||||
2 | the Commission enters an order finding, after notice and | ||||||
3 | hearing, that a participating utility did not satisfy its peak | ||||||
4 | job commitment described in this subsection (b) for reasons | ||||||
5 | that are reasonably within its control, then the Commission | ||||||
6 | shall also determine, after consideration of the evidence, | ||||||
7 | including, but not limited to, evidence submitted by the | ||||||
8 | Department of Commerce and Economic Opportunity and the | ||||||
9 | utility, the reduction in the number of full-time equivalent | ||||||
10 | jobs during the peak program year due to the failure. The | ||||||
11 | Commission shall notify the Department of any proceeding that | ||||||
12 | is initiated pursuant to this paragraph. For each full-time | ||||||
13 | equivalent job deficiency during the peak program year that the | ||||||
14 | Commission finds as set forth in this paragraph, the | ||||||
15 | participating utility shall, within 30 days after the entry of | ||||||
16 | the Commission's order, pay $1,500 to a fund for training | ||||||
17 | grants administered under Section 605-800 of The Department of | ||||||
18 | Commerce and Economic Opportunity Law. | ||||||
19 | If the Commission finds, after notice and hearing, that a | ||||||
20 | participating utility is not satisfying its investment amount | ||||||
21 | commitments described in this subsection (b), then the utility | ||||||
22 | shall no longer be eligible for a formula rate tariff under | ||||||
23 | subsection (c) of this Section. | ||||||
24 | The fact that a participating utility invests more than the | ||||||
25 | minimum amounts specified in this subsection (b) shall not | ||||||
26 | imply imprudence or unreasonableness. |
| |||||||
| |||||||
1 | If a participating utility ceases to have in effect a | ||||||
2 | formula rate under subsection (c) of this Section, then the | ||||||
3 | participating utility's voluntary commitments and obligations | ||||||
4 | under this subsection (b) shall immediately terminate, except | ||||||
5 | for the utility's obligation to pay an amount already owed to | ||||||
6 | the fund for training grants pursuant to a Commission order. | ||||||
7 | In meeting the obligations of this subsection (b), to the | ||||||
8 | extent feasible and consistent with State and federal law, the | ||||||
9 | investments under the infrastructure investment program should | ||||||
10 | provide employment opportunities for all segments of the | ||||||
11 | population and workforce, including minority-owned and | ||||||
12 | female-owned business enterprises. | ||||||
13 | (c) A participating utility may elect to recover its costs | ||||||
14 | of service through a formula rate approved by the Commission, | ||||||
15 | which shall specify the cost components that form the basis of | ||||||
16 | the rate charged to customers with sufficient specificity to | ||||||
17 | operate in a standardized manner and be updated annually with | ||||||
18 | transparent information included in the utility's most recent | ||||||
19 | FERC Form 2 or, if the FERC Form 2 was not filed, Form 21 ILCC, | ||||||
20 | that reflects the utility's actual costs for the applicable | ||||||
21 | 12-month period. In the event the utility recovers a portion of | ||||||
22 | its costs through automatic adjustment clause tariffs on the | ||||||
23 | effective date of this amendatory Act of the 97th General | ||||||
24 | Assembly, the utility may elect to continue to recover these | ||||||
25 | costs through the tariffs, but then these costs shall not be | ||||||
26 | recovered through the formula rate. |
| |||||||
| |||||||
1 | The formula rate shall be implemented through a tariff | ||||||
2 | filed with the Commission consistent with the provisions of | ||||||
3 | this subsection (c) that shall be applicable to all of the | ||||||
4 | utility's customers. The Commission shall initiate and conduct | ||||||
5 | an investigation of the tariff in a manner consistent with the | ||||||
6 | provisions of this subsection (c) and the provisions of Article | ||||||
7 | IX of this Act to the extent they do not conflict with this | ||||||
8 | subsection (c). The formula rate shall remain in effect at the | ||||||
9 | discretion of the utility. The formula rate approved by the | ||||||
10 | Commission shall do the following: | ||||||
11 | (1) Provide for the recovery of the utility's actual | ||||||
12 | costs of service for the applicable 12-month period that | ||||||
13 | are prudently incurred and reasonable in amount consistent | ||||||
14 | with Commission practice and law. The fact that a cost | ||||||
15 | differs from that incurred in a prior 12-month period or | ||||||
16 | that an investment is different from that made in a prior | ||||||
17 | 12-month period shall not imply the imprudence or | ||||||
18 | unreasonableness of that cost or investment. | ||||||
19 | (2) Reflect the utility's actual capital structure for | ||||||
20 | the applicable 12-month period, excluding goodwill, | ||||||
21 | subject to a determination of prudence and reasonableness | ||||||
22 | consistent with Commission practice and law. | ||||||
23 | (3) Include a cost of equity, which shall be calculated | ||||||
24 | as the sum of the following: | ||||||
25 | (A) the average for the applicable 12-month period | ||||||
26 | of the monthly average yields of 30-year U.S. Treasury |
| |||||||
| |||||||
1 | bonds published by the Board of Governors of the | ||||||
2 | Federal Reserve System in its weekly H.15 Statistical | ||||||
3 | Release or successor publication; and | ||||||
4 | (B) 650 basis points. | ||||||
5 | At such time as the Board of Governors of the Federal | ||||||
6 | Reserve System ceases to include the monthly average yields | ||||||
7 | of 30-year U.S. Treasury bonds in its weekly H.15 | ||||||
8 | Statistical Release or successor publication, the monthly | ||||||
9 | average yields of the U.S. Treasury bonds then having the | ||||||
10 | longest duration published by the Board of Governors in its | ||||||
11 | weekly H.15 Statistical Release or successor publication | ||||||
12 | shall instead be used for purposes of this paragraph (3) as | ||||||
13 | deemed appropriate by the Commission. | ||||||
14 | (4) Permit and set forth protocols, subject to a | ||||||
15 | determination of prudence and reasonableness consistent | ||||||
16 | with Commission practice and law, for the following: | ||||||
17 | (A) recovery of incentive compensation expense | ||||||
18 | that is based on the achievement of operational | ||||||
19 | metrics, including, but not limited to, metrics | ||||||
20 | related to budget controls, safety, customer service, | ||||||
21 | efficiency and productivity, and environmental | ||||||
22 | compliance. Incentive compensation expense that is | ||||||
23 | based on net income or an affiliate's earnings per | ||||||
24 | share shall not be recoverable under the formula rate; | ||||||
25 | (B) recovery of pension and other post-employment | ||||||
26 | benefits expense based on actual costs incurred for the |
| |||||||
| |||||||
1 | applicable 12-month period, provided that these costs | ||||||
2 | are supported by an actuarial study; | ||||||
3 | (C) recovery of severance costs amortized over a | ||||||
4 | period that is consistent with savings resulting from | ||||||
5 | the severance; | ||||||
6 | (D) investment return on pension assets net of | ||||||
7 | deferred tax benefits equal to the utility's long-term | ||||||
8 | debt cost of capital as of the end of the applicable | ||||||
9 | 12-month period; | ||||||
10 | (E) recovery of the expenses incurred related to | ||||||
11 | the Commission proceeding under this subsection (c) to | ||||||
12 | approve this formula rate and initial rates or to | ||||||
13 | subsequent proceedings related to the formula, | ||||||
14 | provided that the recovery shall be amortized over a | ||||||
15 | 3-year period; recovery of expenses incurred related | ||||||
16 | to the annual Commission proceedings under subsection | ||||||
17 | (d) of this Section to review the inputs to the formula | ||||||
18 | rate shall be recoverable as expenses in the 12-month | ||||||
19 | period incurred; | ||||||
20 | (F) recovery of existing regulatory assets over | ||||||
21 | the periods previously authorized by the Commission; | ||||||
22 | (G) historical weather normalized billing | ||||||
23 | determinants; and | ||||||
24 | (H) allocation methods for common costs. | ||||||
25 | The Commission's review and order with respect to these | ||||||
26 | protocols shall otherwise be consistent with Commission |
| |||||||
| |||||||
1 | practice and law. | ||||||
2 | The utility shall file, together with its tariff, data | ||||||
3 | based on its most recent FERC Form 2 or, if the FERC Form 2 was | ||||||
4 | not filed, Form 21 ILCC, plus projected plant additions and | ||||||
5 | correspondingly updated depreciation reserve and expense for | ||||||
6 | the current 12-month period, that shall populate the formula | ||||||
7 | rate and set the initial rates under the formula. These initial | ||||||
8 | rates shall take effect 30 days after the filing, provided, | ||||||
9 | however, that the initial rates shall be subject to retroactive | ||||||
10 | rate adjustments by the Commission, including, but not limited | ||||||
11 | to, refunds or surcharges, that are designed to incorporate the | ||||||
12 | provisions of the Commission's final order approving the | ||||||
13 | formula rate structure and protocols and to give effect to the | ||||||
14 | initial rates as therein approved such that the refunds or | ||||||
15 | surcharges that are applied for the remainder of the period | ||||||
16 | until the first rate update will take effect under subsection | ||||||
17 | (d), shall enable the utility to recover the same amount of | ||||||
18 | revenues the utility otherwise would have recovered had the | ||||||
19 | Commission-approved initial rates been in effect as of the date | ||||||
20 | the tariff was filed. | ||||||
21 | After the utility files its proposed formula rate structure | ||||||
22 | and protocols and initial rates, the Commission shall initiate | ||||||
23 | a docket to review and by order approve, or approve as | ||||||
24 | modified, the formula rate, including the initial rates, as | ||||||
25 | just and reasonable within 180 days after the date on which the | ||||||
26 | tariff was filed, or, if the tariff is filed within 30 days |
| |||||||
| |||||||
1 | after the effective date of this amendatory Act of the 97th | ||||||
2 | General Assembly, then by December 31, 2011. This review shall | ||||||
3 | be based on the same evidentiary standards, including, but not | ||||||
4 | limited to, those concerning the prudence and reasonableness of | ||||||
5 | the costs incurred by the utility, the Commission applies in a | ||||||
6 | hearing to review a filing for a general increase in rates | ||||||
7 | under Article IX of this Act. | ||||||
8 | Subsequent changes to the formula rate, including changes | ||||||
9 | to the structure or protocols, shall be made as tariff | ||||||
10 | amendments and filed with the Commission as set forth in | ||||||
11 | Section 9-201 of this Act, provided that any such changes shall | ||||||
12 | be consistent with paragraphs (1) through (4) of this | ||||||
13 | subsection (c). | ||||||
14 | After 11 years following the effective date of this | ||||||
15 | amendatory Act of the 97th General Assembly, the Commission may | ||||||
16 | upon petition or its own initiative, but with reasonable | ||||||
17 | notice, enter upon a hearing concerning proposed changes to the | ||||||
18 | formula rate, including those protocols established under | ||||||
19 | paragraph (4) of this subsection (c), provided that there shall | ||||||
20 | be a rebuttable presumption that the protocols are just and | ||||||
21 | reasonable. The proposed changes shall be stated with | ||||||
22 | particularity and accompanied by clear and convincing evidence | ||||||
23 | that the changes are just and reasonable. No such change | ||||||
24 | adopted by the Commission shall be applied to the calculation | ||||||
25 | of the utility's rates until the next calendar year, with the | ||||||
26 | rates to become effective on June 1 of the year following that |
| |||||||
| |||||||
1 | calendar year, provided that the next calendar year begins no | ||||||
2 | less than 90 days following the date on which the Commission | ||||||
3 | issues an order adopting the change. | ||||||
4 | A participating utility that files a tariff pursuant to | ||||||
5 | this subsection (c) must submit a one-time $200,000 filing fee | ||||||
6 | at the time the Chief Clerk of the Commission accepts the | ||||||
7 | filing, which shall be a recoverable expense. | ||||||
8 | (d) Subsequent to the Commission's issuance of an order | ||||||
9 | approving the utility's formula rate and initial rates under | ||||||
10 | subsection (c) of this Section, the utility shall make an | ||||||
11 | annual informational filing with the Chief Clerk of the | ||||||
12 | Commission setting forth its updated cost inputs to the formula | ||||||
13 | rate for the applicable 12-month period and the corresponding | ||||||
14 | new charges. Consistent with this subsection (d), the utility | ||||||
15 | shall submit information as set forth in the Commission's rules | ||||||
16 | applicable to a filing for a general increase in rates. | ||||||
17 | Specifically, for each such filing, the utility shall comply | ||||||
18 | with the following requirements and include the following | ||||||
19 | information: | ||||||
20 | (1) File on or before May 1, with the new charges to | ||||||
21 | take effect beginning with the June billing period of the | ||||||
22 | current year. These charges shall take effect on the first | ||||||
23 | billing day of the June billing period and remain in effect | ||||||
24 | through the last billing day of the following May billing | ||||||
25 | period regardless of whether the Commission enters upon a | ||||||
26 | hearing pursuant to this subsection (d). |
| |||||||
| |||||||
1 | (2) The inputs to the formula rate for the applicable | ||||||
2 | 12-month period shall be based on historical data from the | ||||||
3 | utility's most recent annual FERC Form 2 or, if the FERC | ||||||
4 | Form 2 was not filed, Form 21 ILCC, plus projected plant | ||||||
5 | additions and correspondingly updated depreciation reserve | ||||||
6 | and expense for the current 12-month period. In addition, | ||||||
7 | the utility shall also present, for the prior applicable | ||||||
8 | 12-month period, a reconciliation of the inputs for the | ||||||
9 | prior applicable period (FERC Form 2 or Form 21 ILCC, as | ||||||
10 | applicable, historical data and projected plant additions) | ||||||
11 | with the actual costs incurred in the prior applicable | ||||||
12 | period, and set forth the applicable charge or credit, if | ||||||
13 | any, resulting from the reconciliation that is | ||||||
14 | incorporated in the current formula rate. | ||||||
15 | (3) The utility shall include, together with the filing | ||||||
16 | of the update of cost inputs to the formula rate, | ||||||
17 | supporting data and documentation for the applicable | ||||||
18 | 12-month period that is consistent with the Commission's | ||||||
19 | rules applicable to a filing for a general increase in | ||||||
20 | rates and any rules adopted by the Commission to implement | ||||||
21 | this Section. | ||||||
22 | Within 45 days after the utility files its annual update of | ||||||
23 | cost inputs to the formula rate, the Commission shall have the | ||||||
24 | authority, either upon complaint or its own initiative, but | ||||||
25 | with reasonable notice, to enter upon a hearing concerning the | ||||||
26 | prudence and reasonableness of the costs incurred by the |
| |||||||
| |||||||
1 | utility during the applicable 12-month period that are | ||||||
2 | reflected in the inputs to the formula rate derived from the | ||||||
3 | utility's FERC Form 2 or Form 21 ILCC, as applicable. The | ||||||
4 | complaining party or Commission, to the extent it is acting on | ||||||
5 | its own initiative, shall state each objection with | ||||||
6 | particularity and provide substantial evidence in support | ||||||
7 | thereof, after which the utility shall have the opportunity to | ||||||
8 | rebut the evidence. The Commission shall apply the same | ||||||
9 | evidentiary standards, including, but not limited to, those | ||||||
10 | concerning the prudence and reasonableness of the costs | ||||||
11 | incurred by the utility, in the hearing as it would apply in a | ||||||
12 | hearing to review a filing for a general increase in rates | ||||||
13 | under Article IX of this Act. The Commission shall not, | ||||||
14 | however, have the authority in a proceeding under this | ||||||
15 | subsection (d) to consider or order any changes to the | ||||||
16 | structure or protocols of the formula rate approved pursuant to | ||||||
17 | subsection (c) of this Section. In a proceeding under this | ||||||
18 | subsection (d), the Commission shall enter its order no later | ||||||
19 | than 180 days after the utility's filing of its annual update | ||||||
20 | of cost inputs to the formula rate, provided that the | ||||||
21 | Commission may, in its discretion, extend the period for a | ||||||
22 | further period not to exceed 75 days. If, in the order, the | ||||||
23 | Commission approves an adjustment to the inputs of the formula | ||||||
24 | rate, then the adjustment, whether in the form of a charge or | ||||||
25 | credit, with interest, shall be applied prospectively through | ||||||
26 | the formula rate. The Commission's determinations of the |
| |||||||
| |||||||
1 | prudence and reasonableness of the costs incurred for the | ||||||
2 | applicable 12-month period shall be final upon entry of the | ||||||
3 | Commission's order and shall not be subject to reopening, | ||||||
4 | reexamination, or collateral attack in any other proceeding, | ||||||
5 | case, docket, order, rule, or regulation, provided, however, | ||||||
6 | that nothing in this subsection (d) shall prohibit a party from | ||||||
7 | petitioning the Commission to rehear or appeal to the courts | ||||||
8 | the order pursuant to the provisions this Act. | ||||||
9 | In the event the Commission does not, either upon complaint | ||||||
10 | or its own initiative, enter upon a hearing within 45 days | ||||||
11 | after the utility files the annual update of cost inputs to its | ||||||
12 | formula rate, then the costs incurred for the applicable | ||||||
13 | 12-month period shall be deemed prudent and reasonable, and the | ||||||
14 | filed charges shall not be subject to reopening, reexamination, | ||||||
15 | or collateral attack in any other proceeding, case, docket, | ||||||
16 | order, rule, or regulation. | ||||||
17 | (e) Nothing in subsections (c) or (d) of this Section shall | ||||||
18 | prohibit the Commission from investigating, or a gas utility | ||||||
19 | from filing, revenue-neutral tariff changes related to rate | ||||||
20 | design of a formula rate that has been placed into effect for | ||||||
21 | the utility. Following approval of a gas utility's formula rate | ||||||
22 | pursuant to subsection (c) of this Section, the utility shall | ||||||
23 | make a filing with the Commission during each subsequent 3-year | ||||||
24 | period that either proposes revenue-neutral tariff changes or | ||||||
25 | re-files the existing tariffs without change, which shall | ||||||
26 | present the Commission with an opportunity to suspend these |
| |||||||
| |||||||
1 | tariffs and consider revenue-neutral tariff changes related to | ||||||
2 | rate design. | ||||||
3 | (f) Within 30 days after the filing of a tariff pursuant to | ||||||
4 | subsection (c) of this Section, each participating utility | ||||||
5 | shall develop and file with the Commission a multi-year plan | ||||||
6 | that has the goal of cumulatively improving performance in each | ||||||
7 | of the following categories by 15% over a 10-year period: (1) | ||||||
8 | reliability, (2) safety, (3) providing opportunities for | ||||||
9 | minority-owned and female-owned business enterprises | ||||||
10 | consistent with State and federal law, and (4) customer | ||||||
11 | service. The plan may include financial incentives. If the plan | ||||||
12 | does include financial incentives, then it must also include | ||||||
13 | symmetrical financial penalties and is subject to Commission | ||||||
14 | review and modification following notice and hearing. The | ||||||
15 | Commission shall enter an order in the proceeding within 120 | ||||||
16 | days after the plan is filed. If the Commission modifies the | ||||||
17 | plan, then the participating utility may elect to proceed with | ||||||
18 | the plan as modified or to proceed with the plan without | ||||||
19 | financial incentives. | ||||||
20 | On October 1 of each subsequent year, each participating | ||||||
21 | utility shall file a report with the Commission that includes | ||||||
22 | performance under each metric, a discussion of performance | ||||||
23 | under the plan, and any updates to the plan. If the Commission | ||||||
24 | finds in any annual period that the achieved metrics do not | ||||||
25 | show material movement such that the goal is likely to be | ||||||
26 | achieved and then maintained in any or all categories, then the |
| |||||||
| |||||||
1 | Commission may require the participating utility to devise a | ||||||
2 | corrective action plan, subject to Commission approval and | ||||||
3 | oversight, to bring performance back on track toward reaching | ||||||
4 | and maintaining the 15% goal. | ||||||
5 | (g) Nothing in this Section is intended to legislatively | ||||||
6 | overturn the opinion issued in Commonwealth Edison Co. v. Ill. | ||||||
7 | Commerce Comm'n, Nos. 2-08-0959, 2-08-1037, 2-08-1137, | ||||||
8 | 1-08-3008, 1-08-3030, 1-08-3054, 1-08-3313 cons. (Ill. App. | ||||||
9 | Ct. 2d Dist. Sept. 30, 2010) or impact any subsequent review by | ||||||
10 | the Illinois Supreme Court of that opinion.
| ||||||
11 | Section 99. Effective date. This Act takes effect upon | ||||||
12 | becoming law.".
|