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1 | HOUSE RESOLUTION 1157
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2 | WHEREAS, The 97th Illinois General Assembly passed Senate | ||||||
3 | Bill 1652 and House Bill 3036 with supermajority votes in both | ||||||
4 | legislative chambers; Senate Bill 1652 became law on October | ||||||
5 | 26, 2011 as Public Act 97-616 and House Bill 3036 became law on | ||||||
6 | December 30, 2011 as Public Act 97-646; and
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7 | WHEREAS, Public Act 97-616, which is commonly referred to | ||||||
8 | as the Energy Infrastructure Modernization Act, confers | ||||||
9 | substantial benefits upon the State's electric utility | ||||||
10 | customers; it established detailed infrastructure investment | ||||||
11 | plans to modernize and upgrade the State's aging electric grid | ||||||
12 | in order to ensure the continued provision of safe, reliable, | ||||||
13 | and affordable service to Illinoisans; participating utilities | ||||||
14 | that elect to undertake the infrastructure investment plan may | ||||||
15 | recover their costs through a performance-based formula rate | ||||||
16 | tariff mechanism, which was designed to increase | ||||||
17 | predictability, stability, and transparency in the ratemaking | ||||||
18 | process; and
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19 | WHEREAS, Public Act 97-646 was enacted as "trailer | ||||||
20 | legislation" to Public Act 97-616 with the intent to amend the | ||||||
21 | Energy Infrastructure Modernization Act to provide additional | ||||||
22 | benefits to customers; and
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1 | WHEREAS, To make this investment possible, the | ||||||
2 | performance-based formula rate tariff must, among other | ||||||
3 | things, establish and set forth certain protocols providing | ||||||
4 | that participating utilities recover the costs of service and | ||||||
5 | these investments, including, but not limited to, allowing for | ||||||
6 | the recovery of an "investment return on pension assets net of | ||||||
7 | deferred tax benefits equal to the utility's long-term debt | ||||||
8 | cost of capital as of the end of the applicable calendar year", | ||||||
9 | which is set forth in subparagraph (D) of paragraph (4) of | ||||||
10 | subsection (c) of Section 16-108.5 of the Public Utilities Act; | ||||||
11 | and
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12 | WHEREAS, In so providing, the General Assembly did not, and | ||||||
13 | did not intend to, overturn or generally depart from Illinois | ||||||
14 | Commerce Commission practice and law regarding the | ||||||
15 | establishment of these protocols, including the electric | ||||||
16 | utility's ability to continue to recover a debt return on its | ||||||
17 | pension assets as the Commission has previously allowed; and
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18 | WHEREAS, No statutory authority was given to the Illinois | ||||||
19 | Commerce Commission to deny recovery of a debt return on what | ||||||
20 | is commonly referred to as, what is reported in the Federal | ||||||
21 | Energy Regulatory Commission Form 1 (FERC Form 1) as, and what | ||||||
22 | the General Assembly regarded to be a pension asset; and | ||||||
23 | WHEREAS, The Energy Infrastructure Modernization Act |
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1 | further provides in subsections (c) and (d) of Section 16-108.5 | ||||||
2 | that those amounts to be credited or charged to customers | ||||||
3 | following the annual reconciliation process under the | ||||||
4 | performance-based formula rate shall be "with interest" so the | ||||||
5 | utility will be made whole for unrecovered amounts that were | ||||||
6 | prudently and reasonably incurred and customers will be made | ||||||
7 | whole for amounts they overpaid, if any; and | ||||||
8 | WHEREAS, Such interest is intended to be set at the | ||||||
9 | utility's weighted average cost of capital, determined in | ||||||
10 | accordance with the statute, which represents the reasonable | ||||||
11 | cost and means of financing a utility's investments and | ||||||
12 | operating costs, so that the utility and customers are made | ||||||
13 | whole when charges or credits are necessary to reconcile to | ||||||
14 | actual prudent and reasonable investments and costs; and | ||||||
15 | WHEREAS, The Energy Infrastructure Modernization Act also | ||||||
16 | provides that the final year-end cost data filed in FERC Form 1 | ||||||
17 | should generally be used to determine rates; and | ||||||
18 | WHEREAS, No statutory authority was given to the Illinois | ||||||
19 | Commerce Commission to set rate base and capital structure | ||||||
20 | using average numbers that do not represent final year-end | ||||||
21 | values reflected in the FERC Form 1, and the Illinois Commerce | ||||||
22 | Commission's use of such average is contrary to the statute; | ||||||
23 | and |
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1 | WHEREAS, The Illinois Supreme and Appellate Courts have | ||||||
2 | consistently held that, because the administrative agencies | ||||||
3 | are creatures of statute, administrative agencies possess only | ||||||
4 | those powers expressly delegated by law and may not act beyond | ||||||
5 | its statutorily delegated authority; and | ||||||
6 | WHEREAS, The Illinois Supreme and Appellate Courts have | ||||||
7 | consistently held that public policy in Illinois is expressed | ||||||
8 | by the General Assembly, and it is not the province of an | ||||||
9 | administrative agency to inquire into the wisdom and propriety | ||||||
10 | of the legislature's act or to substitute its own judgment for | ||||||
11 | that of the legislature; therefore, be it
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12 | RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE | ||||||
13 | NINETY-SEVENTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that | ||||||
14 | we express serious concerns that the Illinois Commerce | ||||||
15 | Commission Order, entered on May 29, 2012 in Commission Docket | ||||||
16 | No. 11-0721, fails to reflect the statutory directives and the | ||||||
17 | intent of the Illinois General Assembly by: (1) not allowing | ||||||
18 | Commonwealth Edison Company to earn a debt return on what is | ||||||
19 | commonly referred to as, identified in the FERC Form 1 as, and | ||||||
20 | what the General Assembly referred to as a pension asset in | ||||||
21 | subparagraph (D) of paragraph (4) of subsection (c) of Section | ||||||
22 | 16-108.5; (2) assessing interest on those amounts to be | ||||||
23 | credited or charged to customers as set forth in subsection (d) |
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1 | of Section 16-108.5 of the Public Utilities Act at an amount | ||||||
2 | that is not based on the utility's weighted average cost of | ||||||
3 | capital; and (3) determining rate base and capital structure | ||||||
4 | using an average, rather than the year-end amounts as reflected | ||||||
5 | in FERC Form 1; and be it further
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6 | RESOLVED, That we urge that the Illinois Commerce | ||||||
7 | Commission, on rehearing, strongly consider reversing its | ||||||
8 | conclusions with respect to each of these 3 issues and reach a | ||||||
9 | decision that reflects the statutory directives and the intent | ||||||
10 | of the General Assembly in passing Public Acts 97-616 and | ||||||
11 | 97-646 as reaffirmed in this resolution; and be it further
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12 | RESOLVED, That suitable copies of this resolution be | ||||||
13 | delivered to the Governor of the State of Illinois and the | ||||||
14 | Chairman and Commissioners of the Illinois Commerce | ||||||
15 | Commission.
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