98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB2529

 

Introduced , by Rep. Lou Lang

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Public Utilities Act. Requires the Illinois Commerce Commission to make a report to the Governor, the General Assembly, or either branch of the General Assembly (rather than the Governor) upon request. In provisions concerning recovery of delivery service costs through performance-based formula rate tariffs, makes changes concerning how the Commission shall determine the investment return on certain pension assets. Allows a utility to retroactively recover certain costs of delivery service to the extent not recovered through reconciliation by assessing a surcharge reflecting those unrecovered costs with interest at the utility's weighted average cost of capital during the period in which those costs were unrecovered. Provides that the utility's filing on its updated cost inputs to the performance-based formula rate shall include a reconciliation of the revenue requirement in effect for the prior rate year (as set by the cost inputs for the prior rate year) with the actual revenue requirement for the prior rate year (determined using a year-end rate base) that uses amounts reflected in the applicable FERC Form 1 that reports actual costs for the prior rate year. States that the changes are intended to: be a restatement and clarification of existing law; give binding effect to certain legislative actions; and preempt and supersede certain final orders of the Commission. Provides that each participating utility is deemed to have been in full compliance with specified requirements and all Commission orders entered under specified provisions. Provides that the Commission shall not undertake any investigation of such compliance and no penalty shall be assessed or adverse action taken against a participating utility for noncompliance with Commission orders associated with the Act. Makes other changes. Effective immediately.


LRB098 10876 JLS 41377 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2529LRB098 10876 JLS 41377 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Intent; orders preempted and superseded. The
5changes made in subsections (c) and (d) of Section 16-108.5 of
6the Public Utilities Act by this Act are intended to be a
7restatement and clarification of existing law, and intended to
8give binding effect to the legislative intent expressed in
9House Resolution 1157 adopted by the House of Representatives
10of the 97th General Assembly and Senate Resolution 821 adopted
11by the Senate of the 97th General Assembly.
12    This Act preempts and supersedes any final Commission
13orders entered in Docket Nos. 11-0721, 12-0001, 12-0293, and
1412-0321 to the extent inconsistent with the amendatory language
15in subsections (c) and (d) of Section 16-108.5 of the Public
16Utilities Act.
 
17    Section 5. The Public Utilities Act is amended by changing
18Sections 4-301 and 16-108.5 as follows:
 
19    (220 ILCS 5/4-301)  (from Ch. 111 2/3, par. 4-301)
20    Sec. 4-301. The Commission may confer in person, or by
21correspondence, by attending conventions, or in any other way,
22with Commissions and any and all agencies dealing with public

 

 

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1utilities of other states and of the United States on any
2matters relating to public utilities.
3    The Commission shall have full power and authority to make
4joint investigations, hold joint hearings within or without the
5State, and issue joint or concurrent orders in conjunction with
6any official, board, commission or agency of any state or of
7the United States. In the holding of such investigations or
8hearings, or in the making of such orders, the Commission shall
9function under agreements or compacts between states or under
10the concurrent power of states to regulate the interstate
11commerce, or as an agency of the United States, or otherwise.
12    The Commission shall make whenever requested by the
13Governor, the General Assembly, or either branch of the General
14Assembly a report within 90 days or any other time period
15specified within of such request, which shall contain copies of
16all orders issued by the Commission which it deems of special
17importance or general significance, and any information in the
18possession of the Commission which it shall deem of value to
19the people of the State.
20    The Commission shall conduct a hearing and take testimony
21relative to any pending legislation with respect to any person,
22corporation or matter within its jurisdiction, if requested to
23do so by the Governor, the General Assembly, or by either
24branch of the General Assembly thereof, and shall report its
25conclusions to the Governor or the General Assembly, as the
26case may be. The Commission may also recommend the enactment of

 

 

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1such legislation with respect to any matter within its
2jurisdiction as it deems wise or necessary in the public
3interest. The Commission shall, at such times as the Governor,
4the General Assembly, or either branch of the General Assembly
5shall direct, examine any particular subject connected with the
6condition and management of public utilities, and report to the
7Governor or the General Assembly, as the case may be, him in
8writing its opinion thereon with its reasons therefor.
9(Source: P.A. 84-617.)
 
10    (220 ILCS 5/16-108.5)
11    Sec. 16-108.5. Infrastructure investment and
12modernization; regulatory reform.
13    (a) (Blank).
14    (b) For purposes of this Section, "participating utility"
15means an electric utility or a combination utility serving more
16than 1,000,000 customers in Illinois that voluntarily elects
17and commits to undertake (i) the infrastructure investment
18program consisting of the commitments and obligations
19described in this subsection (b) and (ii) the customer
20assistance program consisting of the commitments and
21obligations described in subsection (b-10) of this Section,
22notwithstanding any other provisions of this Act and without
23obtaining any approvals from the Commission or any other agency
24other than as set forth in this Section, regardless of whether
25any such approval would otherwise be required. "Combination

 

 

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1utility" means a utility that, as of January 1, 2011, provided
2electric service to at least one million retail customers in
3Illinois and gas service to at least 500,000 retail customers
4in Illinois. A participating utility shall recover the
5expenditures made under the infrastructure investment program
6through the ratemaking process, including, but not limited to,
7the performance-based formula rate and process set forth in
8this Section.
9    During the infrastructure investment program's peak
10program year, a participating utility other than a combination
11utility shall create 2,000 full-time equivalent jobs in
12Illinois, and a participating utility that is a combination
13utility shall create 450 full-time equivalent jobs in Illinois
14related to the provision of electric service. These jobs shall
15include direct jobs, contractor positions, and induced jobs,
16but shall not include any portion of a job commitment, not
17specifically contingent on an amendatory Act of the 97th
18General Assembly becoming law, between a participating utility
19and a labor union that existed on the effective date of this
20amendatory Act of the 97th General Assembly and that has not
21yet been fulfilled. A portion of the full-time equivalent jobs
22created by each participating utility shall include
23incremental personnel hired subsequent to the effective date of
24this amendatory Act of the 97th General Assembly. For purposes
25of this Section, "peak program year" means the consecutive
2612-month period with the highest number of full-time equivalent

 

 

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1jobs that occurs between the beginning of investment year 2 and
2the end of investment year 4.
3    A participating utility shall meet one of the following
4commitments, as applicable:
5        (1) Beginning no later than 180 days after a
6    participating utility other than a combination utility
7    files a performance-based formula rate tariff pursuant to
8    subsection (c) of this Section, or, beginning no later than
9    January 1, 2012 if such utility files such
10    performance-based formula rate tariff within 14 days of the
11    effective date of this amendatory Act of the 97th General
12    Assembly, the participating utility shall, except as
13    provided in subsection (b-5):
14            (A) over a 5-year period, invest an estimated
15        $1,300,000,000 in electric system upgrades,
16        modernization projects, and training facilities,
17        including, but not limited to:
18                (i) distribution infrastructure improvements
19            totaling an estimated $1,000,000,000, including
20            underground residential distribution cable
21            injection and replacement and mainline cable
22            system refurbishment and replacement projects;
23                (ii) training facility construction or upgrade
24            projects totaling an estimated $10,000,000,
25            provided that, at a minimum, one such facility
26            shall be located in a municipality having a

 

 

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1            population of more than 2 million residents and one
2            such facility shall be located in a municipality
3            having a population of more than 150,000 residents
4            but fewer than 170,000 residents; any such new
5            facility located in a municipality having a
6            population of more than 2 million residents must be
7            designed for the purpose of obtaining, and the
8            owner of the facility shall apply for,
9            certification under the United States Green
10            Building Council's Leadership in Energy Efficiency
11            Design Green Building Rating System;
12                (iii) wood pole inspection, treatment, and
13            replacement programs;
14                (iv) an estimated $200,000,000 for reducing
15            the susceptibility of certain circuits to
16            storm-related damage, including, but not limited
17            to, high winds, thunderstorms, and ice storms;
18            improvements may include, but are not limited to,
19            overhead to underground conversion and other
20            engineered outcomes for circuits; the
21            participating utility shall prioritize the
22            selection of circuits based on each circuit's
23            historical susceptibility to storm-related damage
24            and the ability to provide the greatest customer
25            benefit upon completion of the improvements; to be
26            eligible for improvement, the participating

 

 

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1            utility's ability to maintain proper tree
2            clearances surrounding the overhead circuit must
3            not have been impeded by third parties; and
4            (B) over a 10-year period, invest an estimated
5        $1,300,000,000 to upgrade and modernize its
6        transmission and distribution infrastructure and in
7        Smart Grid electric system upgrades, including, but
8        not limited to:
9                (i) additional smart meters;
10                (ii) distribution automation;
11                (iii) associated cyber secure data
12            communication network; and
13                (iv) substation micro-processor relay
14            upgrades.
15        (2) Beginning no later than 180 days after a
16    participating utility that is a combination utility files a
17    performance-based formula rate tariff pursuant to
18    subsection (c) of this Section, or, beginning no later than
19    January 1, 2012 if such utility files such
20    performance-based formula rate tariff within 14 days of the
21    effective date of this amendatory Act of the 97th General
22    Assembly, the participating utility shall, except as
23    provided in subsection (b-5):
24            (A) over a 10-year period, invest an estimated
25        $265,000,000 in electric system upgrades,
26        modernization projects, and training facilities,

 

 

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1        including, but not limited to:
2                (i) distribution infrastructure improvements
3            totaling an estimated $245,000,000, which may
4            include bulk supply substations, transformers,
5            reconductoring, and rebuilding overhead
6            distribution and sub-transmission lines,
7            underground residential distribution cable
8            injection and replacement and mainline cable
9            system refurbishment and replacement projects;
10                (ii) training facility construction or upgrade
11            projects totaling an estimated $1,000,000; any
12            such new facility must be designed for the purpose
13            of obtaining, and the owner of the facility shall
14            apply for, certification under the United States
15            Green Building Council's Leadership in Energy
16            Efficiency Design Green Building Rating System;
17            and
18                (iii) wood pole inspection, treatment, and
19            replacement programs; and
20            (B) over a 10-year period, invest an estimated
21        $360,000,000 to upgrade and modernize its transmission
22        and distribution infrastructure and in Smart Grid
23        electric system upgrades, including, but not limited
24        to:
25                (i) additional smart meters;
26                (ii) distribution automation;

 

 

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1                (iii) associated cyber secure data
2            communication network; and
3                (iv) substation micro-processor relay
4            upgrades.
5    For purposes of this Section, "Smart Grid electric system
6upgrades" shall have the meaning set forth in subsection (a) of
7Section 16-108.6 of this Act.
8    The investments in the infrastructure investment program
9described in this subsection (b) shall be incremental to the
10participating utility's annual capital investment program, as
11defined by, for purposes of this subsection (b), the
12participating utility's average capital spend for calendar
13years 2008, 2009, and 2010 as reported in the applicable
14Federal Energy Regulatory Commission (FERC) Form 1; provided
15that where one or more utilities have merged, the average
16capital spend shall be determined using the aggregate of the
17merged utilities' capital spend reported in FERC Form 1 for the
18years 2008, 2009, and 2010. A participating utility may add
19reasonable construction ramp-up and ramp-down time to the
20investment periods specified in this subsection (b). For each
21such investment period, the ramp-up and ramp-down time shall
22not exceed a total of 6 months.
23    Within 60 days after filing a tariff under subsection (c)
24of this Section, a participating utility shall submit to the
25Commission its plan, including scope, schedule, and staffing,
26for satisfying its infrastructure investment program

 

 

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1commitments pursuant to this subsection (b). The submitted plan
2shall include a schedule and staffing plan for the next
3calendar year. The plan shall also include a plan for the
4creation, operation, and administration of a Smart Grid test
5bed as described in subsection (c) of Section 16-108.8. The
6plan need not allocate the work equally over the respective
7periods, but should allocate material increments throughout
8such periods commensurate with the work to be undertaken. No
9later than April 1 of each subsequent year, the utility shall
10submit to the Commission a report that includes any updates to
11the plan, a schedule for the next calendar year, the
12expenditures made for the prior calendar year and cumulatively,
13and the number of full-time equivalent jobs created for the
14prior calendar year and cumulatively. If the utility is
15materially deficient in satisfying a schedule or staffing plan,
16then the report must also include a corrective action plan to
17address the deficiency. The fact that the plan, implementation
18of the plan, or a schedule changes shall not imply the
19imprudence or unreasonableness of the infrastructure
20investment program, plan, or schedule. Further, no later than
2145 days following the last day of the first, second, and third
22quarters of each year of the plan, a participating utility
23shall submit to the Commission a verified quarterly report for
24the prior quarter that includes (i) the total number of
25full-time equivalent jobs created during the prior quarter,
26(ii) the total number of employees as of the last day of the

 

 

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1prior quarter, (iii) the total number of full-time equivalent
2hours in each job classification or job title, (iv) the total
3number of incremental employees and contractors in support of
4the investments undertaken pursuant to this subsection (b) for
5the prior quarter, and (v) any other information that the
6Commission may require by rule.
7    With respect to the participating utility's peak job
8commitment, if, after considering the utility's corrective
9action plan and compliance thereunder, the Commission enters an
10order finding, after notice and hearing, that a participating
11utility did not satisfy its peak job commitment described in
12this subsection (b) for reasons that are reasonably within its
13control, then the Commission shall also determine, after
14consideration of the evidence, including, but not limited to,
15evidence submitted by the Department of Commerce and Economic
16Opportunity and the utility, the deficiency in the number of
17full-time equivalent jobs during the peak program year due to
18such failure. The Commission shall notify the Department of any
19proceeding that is initiated pursuant to this paragraph. For
20each full-time equivalent job deficiency during the peak
21program year that the Commission finds as set forth in this
22paragraph, the participating utility shall, within 30 days
23after the entry of the Commission's order, pay $6,000 to a fund
24for training grants administered under Section 605-800 of The
25Department of Commerce and Economic Opportunity Law, which
26shall not be a recoverable expense.

 

 

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1    With respect to the participating utility's investment
2amount commitments, if, after considering the utility's
3corrective action plan and compliance thereunder, the
4Commission enters an order finding, after notice and hearing,
5that a participating utility is not satisfying its investment
6amount commitments described in this subsection (b), then the
7utility shall no longer be eligible to annually update the
8performance-based formula rate tariff pursuant to subsection
9(d) of this Section. In such event, the then current rates
10shall remain in effect until such time as new rates are set
11pursuant to Article IX of this Act, subject to retroactive
12adjustment, with interest, to reconcile rates charged with
13actual costs.
14    If the Commission finds that a participating utility is no
15longer eligible to update the performance-based formula rate
16tariff pursuant to subsection (d) of this Section, or the
17performance-based formula rate is otherwise terminated, then
18the participating utility's voluntary commitments and
19obligations under this subsection (b) shall immediately
20terminate, except for the utility's obligation to pay an amount
21already owed to the fund for training grants pursuant to a
22Commission order.
23    In meeting the obligations of this subsection (b), to the
24extent feasible and consistent with State and federal law, the
25investments under the infrastructure investment program should
26provide employment opportunities for all segments of the

 

 

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1population and workforce, including minority-owned and
2female-owned business enterprises, and shall not, consistent
3with State and federal law, discriminate based on race or
4socioeconomic status.
5    (b-5) Nothing in this Section shall prohibit the Commission
6from investigating the prudence and reasonableness of the
7expenditures made under the infrastructure investment program
8during the annual review required by subsection (d) of this
9Section and shall, as part of such investigation, determine
10whether the utility's actual costs under the program are
11prudent and reasonable. The fact that a participating utility
12invests more than the minimum amounts specified in subsection
13(b) of this Section or its plan shall not imply imprudence or
14unreasonableness.
15    If the participating utility finds that it is implementing
16its plan for satisfying the infrastructure investment program
17commitments described in subsection (b) of this Section at a
18cost below the estimated amounts specified in subsection (b) of
19this Section, then the utility may file a petition with the
20Commission requesting that it be permitted to satisfy its
21commitments by spending less than the estimated amounts
22specified in subsection (b) of this Section. The Commission
23shall, after notice and hearing, enter its order approving, or
24approving as modified, or denying each such petition within 150
25days after the filing of the petition.
26    In no event, absent General Assembly approval, shall the

 

 

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1capital investment costs incurred by a participating utility
2other than a combination utility in satisfying its
3infrastructure investment program commitments described in
4subsection (b) of this Section exceed $3,000,000,000 or, for a
5participating utility that is a combination utility,
6$720,000,000. If the participating utility's updated cost
7estimates for satisfying its infrastructure investment program
8commitments described in subsection (b) of this Section exceed
9the limitation imposed by this subsection (b-5), then it shall
10submit a report to the Commission that identifies the increased
11costs and explains the reason or reasons for the increased
12costs no later than the year in which the utility estimates it
13will exceed the limitation. The Commission shall review the
14report and shall, within 90 days after the participating
15utility files the report, report to the General Assembly its
16findings regarding the participating utility's report. If the
17General Assembly does not amend the limitation imposed by this
18subsection (b-5), then the utility may modify its plan so as
19not to exceed the limitation imposed by this subsection (b-5)
20and may propose corresponding changes to the metrics
21established pursuant to subparagraphs (5) through (8) of
22subsection (f) of this Section, and the Commission may modify
23the metrics and incremental savings goals established pursuant
24to subsection (f) of this Section accordingly.
25    (b-10) All participating utilities shall make
26contributions for an energy low-income and support program in

 

 

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1accordance with this subsection. Beginning no later than 180
2days after a participating utility files a performance-based
3formula rate tariff pursuant to subsection (c) of this Section,
4or beginning no later than January 1, 2012 if such utility
5files such performance-based formula rate tariff within 14 days
6of the effective date of this amendatory Act of the 97th
7General Assembly, and without obtaining any approvals from the
8Commission or any other agency other than as set forth in this
9Section, regardless of whether any such approval would
10otherwise be required, a participating utility other than a
11combination utility shall pay $10,000,000 per year for 5 years
12and a participating utility that is a combination utility shall
13pay $1,000,000 per year for 10 years to the energy low-income
14and support program, which is intended to fund customer
15assistance programs with the primary purpose being avoidance of
16imminent disconnection. Such programs may include:
17        (1) a residential hardship program that may partner
18    with community-based organizations, including senior
19    citizen organizations, and provides grants to low-income
20    residential customers, including low-income senior
21    citizens, who demonstrate a hardship;
22        (2) a program that provides grants and other bill
23    payment concessions to disabled veterans who demonstrate a
24    hardship and members of the armed services or reserve
25    forces of the United States or members of the Illinois
26    National Guard who are on active duty pursuant to an

 

 

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1    executive order of the President of the United States, an
2    act of the Congress of the United States, or an order of
3    the Governor and who demonstrate a hardship;
4        (3) a budget assistance program that provides tools and
5    education to low-income senior citizens to assist them with
6    obtaining information regarding energy usage and effective
7    means of managing energy costs;
8        (4) a non-residential special hardship program that
9    provides grants to non-residential customers such as small
10    businesses and non-profit organizations that demonstrate a
11    hardship, including those providing services to senior
12    citizen and low-income customers; and
13        (5) a performance-based assistance program that
14    provides grants to encourage residential customers to make
15    on-time payments by matching a portion of the customer's
16    payments or providing credits towards arrearages.
17    The payments made by a participating utility pursuant to
18this subsection (b-10) shall not be a recoverable expense. A
19participating utility may elect to fund either new or existing
20customer assistance programs, including, but not limited to,
21those that are administered by the utility.
22    Programs that use funds that are provided by a
23participating utility to reduce utility bills may be
24implemented through tariffs that are filed with and reviewed by
25the Commission. If a utility elects to file tariffs with the
26Commission to implement all or a portion of the programs, those

 

 

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1tariffs shall, regardless of the date actually filed, be deemed
2accepted and approved, and shall become effective on the
3effective date of this amendatory Act of the 97th General
4Assembly. The participating utilities whose customers benefit
5from the funds that are disbursed as contemplated in this
6Section shall file annual reports documenting the disbursement
7of those funds with the Commission. The Commission has the
8authority to audit disbursement of the funds to ensure they
9were disbursed consistently with this Section.
10    If the Commission finds that a participating utility is no
11longer eligible to update the performance-based formula rate
12tariff pursuant to subsection (d) of this Section, or the
13performance-based formula rate is otherwise terminated, then
14the participating utility's voluntary commitments and
15obligations under this subsection (b-10) shall immediately
16terminate.
17    (c) A participating utility may elect to recover its
18delivery services costs through a performance-based formula
19rate approved by the Commission, which shall specify the cost
20components that form the basis of the rate charged to customers
21with sufficient specificity to operate in a standardized manner
22and be updated annually with transparent information that
23reflects the utility's actual costs to be recovered during the
24applicable rate year, which is the period beginning with the
25first billing day of January and extending through the last
26billing day of the following December. In the event the utility

 

 

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1recovers a portion of its costs through automatic adjustment
2clause tariffs on the effective date of this amendatory Act of
3the 97th General Assembly, the utility may elect to continue to
4recover these costs through such tariffs, but then these costs
5shall not be recovered through the performance-based formula
6rate. In the event the participating utility, prior to the
7effective date of this amendatory Act of the 97th General
8Assembly, filed electric delivery services tariffs with the
9Commission pursuant to Section 9-201 of this Act that are
10related to the recovery of its electric delivery services costs
11that are still pending on the effective date of this amendatory
12Act of the 97th General Assembly, the participating utility
13shall, at the time it files its performance-based formula rate
14tariff with the Commission, also file a notice of withdrawal
15with the Commission to withdraw the electric delivery services
16tariffs previously filed pursuant to Section 9-201 of this Act.
17Upon receipt of such notice, the Commission shall dismiss with
18prejudice any docket that had been initiated to investigate the
19electric delivery services tariffs filed pursuant to Section
209-201 of this Act, and such tariffs and the record related
21thereto shall not be the subject of any further hearing,
22investigation, or proceeding of any kind related to rates for
23electric delivery services.
24    The performance-based formula rate shall be implemented
25through a tariff filed with the Commission consistent with the
26provisions of this subsection (c) that shall be applicable to

 

 

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1all delivery services customers. The Commission shall initiate
2and conduct an investigation of the tariff in a manner
3consistent with the provisions of this subsection (c) and the
4provisions of Article IX of this Act to the extent they do not
5conflict with this subsection (c). Except in the case where the
6Commission finds, after notice and hearing, that a
7participating utility is not satisfying its investment amount
8commitments under subsection (b) of this Section, the
9performance-based formula rate shall remain in effect at the
10discretion of the utility. The performance-based formula rate
11approved by the Commission shall do the following:
12        (1) Provide for the recovery of the utility's actual
13    costs of delivery services that are prudently incurred and
14    reasonable in amount consistent with Commission practice
15    and law. The sole fact that a cost differs from that
16    incurred in a prior calendar year or that an investment is
17    different from that made in a prior calendar year shall not
18    imply the imprudence or unreasonableness of that cost or
19    investment.
20        (2) Reflect the utility's actual year-end capital
21    structure for the applicable calendar year, excluding
22    goodwill, subject to a determination of prudence and
23    reasonableness consistent with Commission practice and
24    law.
25        (3) Include a cost of equity, which shall be calculated
26    as the sum of the following:

 

 

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1            (A) the average for the applicable calendar year of
2        the monthly average yields of 30-year U.S. Treasury
3        bonds published by the Board of Governors of the
4        Federal Reserve System in its weekly H.15 Statistical
5        Release or successor publication; and
6            (B) 580 basis points.
7        At such time as the Board of Governors of the Federal
8    Reserve System ceases to include the monthly average yields
9    of 30-year U.S. Treasury bonds in its weekly H.15
10    Statistical Release or successor publication, the monthly
11    average yields of the U.S. Treasury bonds then having the
12    longest duration published by the Board of Governors in its
13    weekly H.15 Statistical Release or successor publication
14    shall instead be used for purposes of this paragraph (3).
15        (4) Permit and set forth protocols, subject to a
16    determination of prudence and reasonableness consistent
17    with Commission practice and law, for the following:
18            (A) recovery of incentive compensation expense
19        that is based on the achievement of operational
20        metrics, including metrics related to budget controls,
21        outage duration and frequency, safety, customer
22        service, efficiency and productivity, and
23        environmental compliance. Incentive compensation
24        expense that is based on net income or an affiliate's
25        earnings per share shall not be recoverable under the
26        performance-based formula rate;

 

 

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1            (B) recovery of pension and other post-employment
2        benefits expense, provided that such costs are
3        supported by an actuarial study;
4            (C) recovery of severance costs, provided that if
5        the amount is over $3,700,000 for a participating
6        utility that is a combination utility or $10,000,000
7        for a participating utility that serves more than 3
8        million retail customers, then the full amount shall be
9        amortized consistent with subparagraph (F) of this
10        paragraph (4);
11            (D) investment return at a rate equal to the
12        utility's weighted average cost of long-term debt, on
13        the pension assets as, and in the amount, reported in
14        Account 186 (or in such other Account or Accounts as
15        such asset may subsequently be recorded) of the
16        utility's most recently filed FERC Form 1, net of
17        deferred tax benefits equal to the utility's long-term
18        debt cost of capital as of the end of the applicable
19        calendar year;
20            (E) recovery of the expenses related to the
21        Commission proceeding under this subsection (c) to
22        approve this performance-based formula rate and
23        initial rates or to subsequent proceedings related to
24        the formula, provided that the recovery shall be
25        amortized over a 3-year period; recovery of expenses
26        related to the annual Commission proceedings under

 

 

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1        subsection (d) of this Section to review the inputs to
2        the performance-based formula rate shall be expensed
3        and recovered through the performance-based formula
4        rate;
5            (F) amortization over a 5-year period of the full
6        amount of each charge or credit that exceeds $3,700,000
7        for a participating utility that is a combination
8        utility or $10,000,000 for a participating utility
9        that serves more than 3 million retail customers in the
10        applicable calendar year and that relates to a
11        workforce reduction program's severance costs, changes
12        in accounting rules, changes in law, compliance with
13        any Commission-initiated audit, or a single storm or
14        other similar expense, provided that any unamortized
15        balance shall be reflected in rate base. For purposes
16        of this subparagraph (F), changes in law includes any
17        enactment, repeal, or amendment in a law, ordinance,
18        rule, regulation, interpretation, permit, license,
19        consent, or order, including those relating to taxes,
20        accounting, or to environmental matters, or in the
21        interpretation or application thereof by any
22        governmental authority occurring after the effective
23        date of this amendatory Act of the 97th General
24        Assembly;
25            (G) recovery of existing regulatory assets over
26        the periods previously authorized by the Commission;

 

 

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1            (H) historical weather normalized billing
2        determinants; and
3            (I) allocation methods for common costs.
4        (5) Provide that if the participating utility's earned
5    rate of return on common equity related to the provision of
6    delivery services for the prior rate year (calculated using
7    costs and capital structure approved by the Commission as
8    provided in subparagraph (2) of this subsection (c),
9    consistent with this Section, in accordance with
10    Commission rules and orders, including, but not limited to,
11    adjustments for goodwill, and after any Commission-ordered
12    disallowances and taxes) is more than 50 basis points
13    higher than the rate of return on common equity calculated
14    pursuant to paragraph (3) of this subsection (c) (after
15    adjusting for any penalties to the rate of return on common
16    equity applied pursuant to the performance metrics
17    provision of subsection (f) of this Section), then the
18    participating utility shall apply a credit through the
19    performance-based formula rate that reflects an amount
20    equal to the value of that portion of the earned rate of
21    return on common equity that is more than 50 basis points
22    higher than the rate of return on common equity calculated
23    pursuant to paragraph (3) of this subsection (c) (after
24    adjusting for any penalties to the rate of return on common
25    equity applied pursuant to the performance metrics
26    provision of subsection (f) of this Section) for the prior

 

 

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1    rate year, adjusted for taxes. If the participating
2    utility's earned rate of return on common equity related to
3    the provision of delivery services for the prior rate year
4    (calculated using costs and capital structure approved by
5    the Commission as provided in subparagraph (2) of this
6    subsection (c), consistent with this Section, in
7    accordance with Commission rules and orders, including,
8    but not limited to, adjustments for goodwill, and after any
9    Commission-ordered disallowances and taxes) is more than
10    50 basis points less than the return on common equity
11    calculated pursuant to paragraph (3) of this subsection (c)
12    (after adjusting for any penalties to the rate of return on
13    common equity applied pursuant to the performance metrics
14    provision of subsection (f) of this Section), then the
15    participating utility shall apply a charge through the
16    performance-based formula rate that reflects an amount
17    equal to the value of that portion of the earned rate of
18    return on common equity that is more than 50 basis points
19    less than the rate of return on common equity calculated
20    pursuant to paragraph (3) of this subsection (c) (after
21    adjusting for any penalties to the rate of return on common
22    equity applied pursuant to the performance metrics
23    provision of subsection (f) of this Section) for the prior
24    rate year, adjusted for taxes.
25        (6) Provide for an annual reconciliation, as described
26    in subsection (d) of this Section, with interest as

 

 

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1    described in subsection (d) of this Section, of the revenue
2    requirement reflected in rates for each calendar year,
3    beginning with the calendar year in which the utility files
4    its performance-based formula rate tariff pursuant to
5    subsection (c) of this Section, with what the revenue
6    requirement would have been had the actual cost information
7    for the applicable calendar year been available at the
8    filing date.
9    The utility shall file, together with its tariff, final
10data based on its most recently filed FERC Form 1, plus
11projected plant additions and correspondingly updated
12depreciation reserve and expense for the calendar year in which
13the tariff and data are filed, that shall populate the
14performance-based formula rate and set the initial delivery
15services rates under the formula. For purposes of this Section,
16"FERC Form 1" means the Annual Report of Major Electric
17Utilities, Licensees and Others that electric utilities are
18required to file with the Federal Energy Regulatory Commission
19under the Federal Power Act, Sections 3, 4(a), 304 and 209,
20modified as necessary to be consistent with 83 Ill. Admin. Code
21Part 415 as of May 1, 2011. Nothing in this Section is intended
22to allow costs that are not otherwise recoverable to be
23recoverable by virtue of inclusion in FERC Form 1.
24    After the utility files its proposed performance-based
25formula rate structure and protocols and initial rates, the
26Commission shall initiate a docket to review the filing. The

 

 

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1Commission shall enter an order approving, or approving as
2modified, the performance-based formula rate, including the
3initial rates, as just and reasonable within 270 days after the
4date on which the tariff was filed, or, if the tariff is filed
5within 14 days after the effective date of this amendatory Act
6of the 97th General Assembly, then by May 31, 2012. Such review
7shall be based on the same evidentiary standards, including,
8but not limited to, those concerning the prudence and
9reasonableness of the costs incurred by the utility, the
10Commission applies in a hearing to review a filing for a
11general increase in rates under Article IX of this Act. The
12initial rates shall take effect within 30 days after the
13Commission's order approving the performance-based formula
14rate tariff.
15    Until such time as the Commission approves a different rate
16design and cost allocation pursuant to subsection (e) of this
17Section, rate design and cost allocation across customer
18classes shall be consistent with the Commission's most recent
19order regarding the participating utility's request for a
20general increase in its delivery services rates.
21    Subsequent changes to the performance-based formula rate
22structure or protocols shall be made as set forth in Section
239-201 of this Act, but nothing in this subsection (c) is
24intended to limit the Commission's authority under Article IX
25and other provisions of this Act to initiate an investigation
26of a participating utility's performance-based formula rate

 

 

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1tariff, provided that any such changes shall be consistent with
2paragraphs (1) through (6) of this subsection (c). Any change
3ordered by the Commission shall be made at the same time new
4rates take effect following the Commission's next order
5pursuant to subsection (d) of this Section, provided that the
6new rates take effect no less than 30 days after the date on
7which the Commission issues an order adopting the change.
8    A participating utility that files a tariff pursuant to
9this subsection (c) must submit a one-time $200,000 filing fee
10at the time the Chief Clerk of the Commission accepts the
11filing, which shall be a recoverable expense.
12    In the event the performance-based formula rate is
13terminated, the then current rates shall remain in effect until
14such time as new rates are set pursuant to Article IX of this
15Act, subject to retroactive rate adjustment, with interest, to
16reconcile rates charged with actual costs. At such time that
17the performance-based formula rate is terminated, the
18participating utility's voluntary commitments and obligations
19under subsection (b) of this Section shall immediately
20terminate, except for the utility's obligation to pay an amount
21already owed to the fund for training grants pursuant to a
22Commission order issued under subsection (b) of this Section.
23    (d) Subsequent to the Commission's issuance of an order
24approving the utility's performance-based formula rate
25structure and protocols, and initial rates under subsection (c)
26of this Section, the utility shall file, on or before May 1 of

 

 

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1each year, with the Chief Clerk of the Commission its updated
2cost inputs to the performance-based formula rate for the
3applicable rate year and the corresponding new charges. Each
4such filing shall conform to the following requirements and
5include the following information:
6        (1) The inputs to the performance-based formula rate
7    for the applicable rate year shall be based on final
8    historical data reflected in the utility's most recently
9    filed annual FERC Form 1 plus projected plant additions and
10    correspondingly updated depreciation reserve and expense
11    for the calendar year in which the inputs are filed. The
12    filing shall also include a reconciliation of the revenue
13    requirement that was in effect for the prior rate year (as
14    set by the cost inputs for the prior rate year) with the
15    actual revenue requirement for the prior rate year
16    (determined using a year-end rate base) that uses amounts
17    as reflected in the applicable FERC Form 1 that reports the
18    actual costs for the prior rate year). Any over-collection
19    or under-collection indicated by such reconciliation shall
20    be reflected as a credit against, or recovered as an
21    additional charge to, respectively, with interest
22    calculated at a rate equal to the utility's weighted
23    average cost of capital approved by the Commission for the
24    prior rate year, the charges for the applicable rate year.
25    Provided, however, that the first such reconciliation
26    shall be for the calendar year in which the utility files

 

 

HB2529- 29 -LRB098 10876 JLS 41377 b

1    its performance-based formula rate tariff pursuant to
2    subsection (c) of this Section and shall reconcile (i) the
3    revenue requirement or requirements established by the
4    rate order or orders in effect from time to time during
5    such calendar year (weighted, as applicable) with (ii) the
6    revenue requirement determined using a year-end rate base
7    for that calendar year calculated pursuant to the
8    performance-based formula rate using (A) actual costs for
9    that year as reflected in the applicable FERC Form 1, and
10    (B) for the first such reconciliation only, the cost of
11    equity, which shall be calculated as the sum of 590 basis
12    points plus the average for the applicable calendar year of
13    the monthly average yields of 30-year U.S. Treasury bonds
14    published by the Board of Governors of the Federal Reserve
15    System in its weekly H.15 Statistical Release or successor
16    publication. The first such reconciliation is not intended
17    to provide for the recovery of costs previously excluded
18    from rates based on a prior Commission order finding of
19    imprudence or unreasonableness. Each reconciliation shall
20    be certified by the participating utility in the same
21    manner that FERC Form 1 is certified. The filing shall also
22    include the charge or credit, if any, resulting from the
23    calculation required by paragraph (6) of subsection (c) of
24    this Section.
25        Notwithstanding anything that may be to the contrary,
26    the intent of the reconciliation is to ultimately reconcile

 

 

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1    the revenue requirement reflected in rates for each
2    calendar year, beginning with the calendar year in which
3    the utility files its performance-based formula rate
4    tariff pursuant to subsection (c) of this Section, with
5    what the revenue requirement determined using a year-end
6    rate base for the applicable calendar year would have been
7    had the actual cost information for the applicable calendar
8    year been available at the filing date.
9        (2) The new charges shall take effect beginning on the
10    first billing day of the following January billing period
11    and remain in effect through the last billing day of the
12    next December billing period regardless of whether the
13    Commission enters upon a hearing pursuant to this
14    subsection (d).
15        (3) The filing shall include relevant and necessary
16    data and documentation for the applicable rate year that is
17    consistent with the Commission's rules applicable to a
18    filing for a general increase in rates or any rules adopted
19    by the Commission to implement this Section. Normalization
20    adjustments shall not be required. Notwithstanding any
21    other provision of this Section or Act or any rule or other
22    requirement adopted by the Commission, a participating
23    utility that is a combination utility with more than one
24    rate zone shall not be required to file a separate set of
25    such data and documentation for each rate zone and may
26    combine such data and documentation into a single set of

 

 

HB2529- 31 -LRB098 10876 JLS 41377 b

1    schedules.
2    Within 45 days after the utility files its annual update of
3cost inputs to the performance-based formula rate, the
4Commission shall have the authority, either upon complaint or
5its own initiative, but with reasonable notice, to enter upon a
6hearing concerning the prudence and reasonableness of the costs
7incurred by the utility to be recovered during the applicable
8rate year that are reflected in the inputs to the
9performance-based formula rate derived from the utility's FERC
10Form 1. During the course of the hearing, each objection shall
11be stated with particularity and evidence provided in support
12thereof, after which the utility shall have the opportunity to
13rebut the evidence. Discovery shall be allowed consistent with
14the Commission's Rules of Practice, which Rules shall be
15enforced by the Commission or the assigned hearing examiner.
16The Commission shall apply the same evidentiary standards,
17including, but not limited to, those concerning the prudence
18and reasonableness of the costs incurred by the utility, in the
19hearing as it would apply in a hearing to review a filing for a
20general increase in rates under Article IX of this Act. The
21Commission shall not, however, have the authority in a
22proceeding under this subsection (d) to consider or order any
23changes to the structure or protocols of the performance-based
24formula rate approved pursuant to subsection (c) of this
25Section. In a proceeding under this subsection (d), the
26Commission shall enter its order no later than the earlier of

 

 

HB2529- 32 -LRB098 10876 JLS 41377 b

1240 days after the utility's filing of its annual update of
2cost inputs to the performance-based formula rate or December
331. The Commission's determinations of the prudence and
4reasonableness of the costs incurred for the applicable
5calendar year shall be final upon entry of the Commission's
6order and shall not be subject to reopening, reexamination, or
7collateral attack in any other Commission proceeding, case,
8docket, order, rule or regulation, provided, however, that
9nothing in this subsection (d) shall prohibit a party from
10petitioning the Commission to rehear or appeal to the courts
11the order pursuant to the provisions of this Act.
12    In the event the Commission does not, either upon complaint
13or its own initiative, enter upon a hearing within 45 days
14after the utility files the annual update of cost inputs to its
15performance-based formula rate, then the costs incurred for the
16applicable calendar year shall be deemed prudent and
17reasonable, and the filed charges shall not be subject to
18reopening, reexamination, or collateral attack in any other
19proceeding, case, docket, order, rule, or regulation.
20    A participating utility's first filing of the updated cost
21inputs, and any Commission investigation of such inputs
22pursuant to this subsection (d) shall proceed notwithstanding
23the fact that the Commission's investigation under subsection
24(c) of this Section is still pending and notwithstanding any
25other law, order, rule, or Commission practice to the contrary.
26    (e) Nothing in subsections (c) or (d) of this Section shall

 

 

HB2529- 33 -LRB098 10876 JLS 41377 b

1prohibit the Commission from investigating, or a participating
2utility from filing, revenue-neutral tariff changes related to
3rate design of a performance-based formula rate that has been
4placed into effect for the utility. Following approval of a
5participating utility's performance-based formula rate tariff
6pursuant to subsection (c) of this Section, the utility shall
7make a filing with the Commission within one year after the
8effective date of the performance-based formula rate tariff
9that proposes changes to the tariff to incorporate the findings
10of any final rate design orders of the Commission applicable to
11the participating utility and entered subsequent to the
12Commission's approval of the tariff. The Commission shall,
13after notice and hearing, enter its order approving, or
14approving with modification, the proposed changes to the
15performance-based formula rate tariff within 240 days after the
16utility's filing. Following such approval, the utility shall
17make a filing with the Commission during each subsequent 3-year
18period that either proposes revenue-neutral tariff changes or
19re-files the existing tariffs without change, which shall
20present the Commission with an opportunity to suspend the
21tariffs and consider revenue-neutral tariff changes related to
22rate design.
23    (f) Within 30 days after the filing of a tariff pursuant to
24subsection (c) of this Section, each participating utility
25shall develop and file with the Commission multi-year metrics
26designed to achieve, ratably (i.e., in equal segments) over a

 

 

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110-year period, improvement over baseline performance values
2as follows:
3        (1) Twenty percent improvement in the System Average
4    Interruption Frequency Index, using a baseline of the
5    average of the data from 2001 through 2010.
6        (2) Fifteen percent improvement in the system Customer
7    Average Interruption Duration Index, using a baseline of
8    the average of the data from 2001 through 2010.
9        (3) For a participating utility other than a
10    combination utility, 20% improvement in the System Average
11    Interruption Frequency Index for its Southern Region,
12    using a baseline of the average of the data from 2001
13    through 2010. For purposes of this paragraph (3), Southern
14    Region shall have the meaning set forth in the
15    participating utility's most recent report filed pursuant
16    to Section 16-125 of this Act.
17        (3.5) For a participating utility other than a
18    combination utility, 20% improvement in the System Average
19    Interruption Frequency Index for its Northeastern Region,
20    using a baseline of the average of the data from 2001
21    through 2010. For purposes of this paragraph (3.5),
22    Northeastern Region shall have the meaning set forth in the
23    participating utility's most recent report filed pursuant
24    to Section 16-125 of this Act.
25        (4) Seventy-five percent improvement in the total
26    number of customers who exceed the service reliability

 

 

HB2529- 35 -LRB098 10876 JLS 41377 b

1    targets as set forth in subparagraphs (A) through (C) of
2    paragraph (4) of subsection (b) of 83 Ill. Admin. Code Part
3    411.140 as of May 1, 2011, using 2010 as the baseline year.
4        (5) Reduction in issuance of estimated electric bills:
5    90% improvement for a participating utility other than a
6    combination utility, and 56% improvement for a
7    participating utility that is a combination utility, using
8    a baseline of the average number of estimated bills for the
9    years 2008 through 2010.
10        (6) Consumption on inactive meters: 90% improvement
11    for a participating utility other than a combination
12    utility, and 56% improvement for a participating utility
13    that is a combination utility, using a baseline of the
14    average unbilled kilowatthours for the years 2009 and 2010.
15        (7) Unaccounted for energy: 50% improvement for a
16    participating utility other than a combination utility
17    using a baseline of the non-technical line loss unaccounted
18    for energy kilowatthours for the year 2009.
19        (8) Uncollectible expense: reduce uncollectible
20    expense by at least $30,000,000 for a participating utility
21    other than a combination utility and by at least $3,500,000
22    for a participating utility that is a combination utility,
23    using a baseline of the average uncollectible expense for
24    the years 2008 through 2010.
25        (9) Opportunities for minority-owned and female-owned
26    business enterprises: design a performance metric

 

 

HB2529- 36 -LRB098 10876 JLS 41377 b

1    regarding the creation of opportunities for minority-owned
2    and female-owned business enterprises consistent with
3    State and federal law using a base performance value of the
4    percentage of the participating utility's capital
5    expenditures that were paid to minority-owned and
6    female-owned business enterprises in 2010.
7    The definitions set forth in 83 Ill. Admin. Code Part
8411.20 as of May 1, 2011 shall be used for purposes of
9calculating performance under paragraphs (1) through (3.5) of
10this subsection (f), provided, however, that the participating
11utility may exclude up to 9 extreme weather event days from
12such calculation for each year, and provided further that the
13participating utility shall exclude 9 extreme weather event
14days when calculating each year of the baseline period to the
15extent that there are 9 such days in a given year of the
16baseline period. For purposes of this Section, an extreme
17weather event day is a 24-hour calendar day (beginning at 12:00
18a.m. and ending at 11:59 p.m.) during which any weather event
19(e.g., storm, tornado) caused interruptions for 10,000 or more
20of the participating utility's customers for 3 hours or more.
21If there are more than 9 extreme weather event days in a year,
22then the utility may choose no more than 9 extreme weather
23event days to exclude, provided that the same extreme weather
24event days are excluded from each of the calculations performed
25under paragraphs (1) through (3.5) of this subsection (f).
26    The metrics shall include incremental performance goals

 

 

HB2529- 37 -LRB098 10876 JLS 41377 b

1for each year of the 10-year period, which shall be designed to
2demonstrate that the utility is on track to achieve the
3performance goal in each category at the end of the 10-year
4period. The utility shall elect when the 10-year period shall
5commence for the metrics set forth in subparagraphs (1) through
6(4) and (9) of this subsection (f), provided that it begins no
7later than 14 months following the date on which the utility
8begins investing pursuant to subsection (b) of this Section,
9and when the 10-year period shall commence for the metrics set
10forth in subparagraphs (5) through (8) of this subsection (f),
11provided that it begins no later than 14 months following the
12date on which the Commission enters its order approving the
13utility's Advanced Metering Infrastructure Deployment Plan
14pursuant to subsection (c) of Section 16-108.6 of this Act.
15    The metrics and performance goals set forth in
16subparagraphs (5) through (8) of this subsection (f) are based
17on the assumptions that the participating utility may fully
18implement the technology described in subsection (b) of this
19Section, including utilizing the full functionality of such
20technology and that there is no requirement for personal
21on-site notification. If the utility is unable to meet the
22metrics and performance goals set forth in subparagraphs (5)
23through (8) of this subsection (f) for such reasons, and the
24Commission so finds after notice and hearing, then the utility
25shall be excused from compliance, but only to the limited
26extent achievement of the affected metrics and performance

 

 

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1goals was hindered by the less than full implementation.
2    (f-5) The financial penalties applicable to the metrics
3described in subparagraphs (1) through (8) of subsection (f) of
4this Section, as applicable, shall be applied through an
5adjustment to the participating utility's return on equity of
6no more than a total of 30 basis points in each of the first 3
7years, of no more than a total of 34 basis points in each of the
83 years thereafter, and of no more than a total of 38 basis
9points in each of the 4 years thereafter, as follows:
10        (1) With respect to each of the incremental annual
11    performance goals established pursuant to paragraph (1) of
12    subsection (f) of this Section,
13            (A) for each year that a participating utility
14        other than a combination utility does not achieve the
15        annual goal, the participating utility's return on
16        equity shall be reduced as follows: during years 1
17        through 3, by 5 basis points; during years 4 through 6,
18        by 6 basis points; and during years 7 through 10, by 7
19        basis points; and
20            (B) for each year that a participating utility that
21        is a combination utility does not achieve the annual
22        goal, the participating utility's return on equity
23        shall be reduced as follows: during years 1 through 3,
24        by 10 basis points; during years 4 through 6, by 12
25        basis points; and during years 7 through 10, by 14
26        basis points.

 

 

HB2529- 39 -LRB098 10876 JLS 41377 b

1        (2) With respect to each of the incremental annual
2    performance goals established pursuant to paragraph (2) of
3    subsection (f) of this Section, for each year that the
4    participating utility does not achieve each such goal, the
5    participating utility's return on equity shall be reduced
6    as follows: during years 1 through 3, by 5 basis points;
7    during years 4 through 6, by 6 basis points; and during
8    years 7 through 10, by 7 basis points.
9        (3) With respect to each of the incremental annual
10    performance goals established pursuant to paragraphs (3)
11    and (3.5) of subsection (f) of this Section, for each year
12    that a participating utility other than a combination
13    utility does not achieve both such goals, the participating
14    utility's return on equity shall be reduced as follows:
15    during years 1 through 3, by 5 basis points; during years 4
16    through 6, by 6 basis points; and during years 7 through
17    10, by 7 basis points.
18        (4) With respect to each of the incremental annual
19    performance goals established pursuant to paragraph (4) of
20    subsection (f) of this Section, for each year that the
21    participating utility does not achieve each such goal, the
22    participating utility's return on equity shall be reduced
23    as follows: during years 1 through 3, by 5 basis points;
24    during years 4 through 6, by 6 basis points; and during
25    years 7 through 10, by 7 basis points.
26        (5) With respect to each of the incremental annual

 

 

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1    performance goals established pursuant to subparagraph (5)
2    of subsection (f) of this Section, for each year that the
3    participating utility does not achieve at least 95% of each
4    such goal, the participating utility's return on equity
5    shall be reduced by 5 basis points for each such unachieved
6    goal.
7        (6) With respect to each of the incremental annual
8    performance goals established pursuant to paragraphs (6),
9    (7), and (8) of subsection (f) of this Section, as
10    applicable, which together measure non-operational
11    customer savings and benefits relating to the
12    implementation of the Advanced Metering Infrastructure
13    Deployment Plan, as defined in Section 16-108.6 of this
14    Act, the performance under each such goal shall be
15    calculated in terms of the percentage of the goal achieved.
16    The percentage of goal achieved for each of the goals shall
17    be aggregated, and an average percentage value calculated,
18    for each year of the 10-year period. If the utility does
19    not achieve an average percentage value in a given year of
20    at least 95%, the participating utility's return on equity
21    shall be reduced by 5 basis points.
22    The financial penalties shall be applied as described in
23this subsection (f-5) for the 12-month period in which the
24deficiency occurred through a separate tariff mechanism, which
25shall be filed by the utility together with its metrics. In the
26event the formula rate tariff established pursuant to

 

 

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1subsection (c) of this Section terminates, the utility's
2obligations under subsection (f) of this Section and this
3subsection (f-5) shall also terminate, provided, however, that
4the tariff mechanism established pursuant to subsection (f) of
5this Section and this subsection (f-5) shall remain in effect
6until any penalties due and owing at the time of such
7termination are applied.
8    The Commission shall, after notice and hearing, enter an
9order within 120 days after the metrics are filed approving, or
10approving with modification, a participating utility's tariff
11or mechanism to satisfy the metrics set forth in subsection (f)
12of this Section. On June 1 of each subsequent year, each
13participating utility shall file a report with the Commission
14that includes, among other things, a description of how the
15participating utility performed under each metric and an
16identification of any extraordinary events that adversely
17impacted the utility's performance. Whenever a participating
18utility does not satisfy the metrics required pursuant to
19subsection (f) of this Section, the Commission shall, after
20notice and hearing, enter an order approving financial
21penalties in accordance with this subsection (f-5). The
22Commission-approved financial penalties shall be applied
23beginning with the next rate year. Nothing in this Section
24shall authorize the Commission to reduce or otherwise obviate
25the imposition of financial penalties for failing to achieve
26one or more of the metrics established pursuant to subparagraph

 

 

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1(1) through (4) of subsection (f) of this Section.
2    (g) On or before July 31, 2014, each participating utility
3shall file a report with the Commission that sets forth the
4average annual increase in the average amount paid per
5kilowatthour for residential eligible retail customers,
6exclusive of the effects of energy efficiency programs,
7comparing the 12-month period ending May 31, 2012; the 12-month
8period ending May 31, 2013; and the 12-month period ending May
931, 2014. For a participating utility that is a combination
10utility with more than one rate zone, the weighted average
11aggregate increase shall be provided. The report shall be filed
12together with a statement from an independent auditor attesting
13to the accuracy of the report. The cost of the independent
14auditor shall be borne by the participating utility and shall
15not be a recoverable expense. "The average amount paid per
16kilowatthour" shall be based on the participating utility's
17tariffed rates actually in effect and shall not be calculated
18using any hypothetical rate or adjustments to actual charges
19(other than as specified for energy efficiency) as an input.
20    In the event that the average annual increase exceeds 2.5%
21as calculated pursuant to this subsection (g), then Sections
2216-108.5, 16-108.6, 16-108.7, and 16-108.8 of this Act, other
23than this subsection, shall be inoperative as they relate to
24the utility and its service area as of the date of the report
25due to be submitted pursuant to this subsection and the utility
26shall no longer be eligible to annually update the

 

 

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1performance-based formula rate tariff pursuant to subsection
2(d) of this Section. In such event, the then current rates
3shall remain in effect until such time as new rates are set
4pursuant to Article IX of this Act, subject to retroactive
5adjustment, with interest, to reconcile rates charged with
6actual costs, and the participating utility's voluntary
7commitments and obligations under subsection (b) of this
8Section shall immediately terminate, except for the utility's
9obligation to pay an amount already owed to the fund for
10training grants pursuant to a Commission order issued under
11subsection (b) of this Section.
12    In the event that the average annual increase is 2.5% or
13less as calculated pursuant to this subsection (g), then the
14performance-based formula rate shall remain in effect as set
15forth in this Section.
16    For purposes of this Section, the amount per kilowatthour
17means the total amount paid for electric service expressed on a
18per kilowatthour basis, and the total amount paid for electric
19service includes without limitation amounts paid for supply,
20transmission, distribution, surcharges, and add-on taxes
21exclusive of any increases in taxes or new taxes imposed after
22the effective date of this amendatory Act of the 97th General
23Assembly. For purposes of this Section, "eligible retail
24customers" shall have the meaning set forth in Section 16-111.5
25of this Act.
26    The fact that this Section becomes inoperative as set forth

 

 

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1in this subsection shall not be construed to mean that the
2Commission may reexamine or otherwise reopen prudence or
3reasonableness determinations already made.
4    (h) Sections 16-108.5, 16-108.6, 16-108.7, and 16-108.8 of
5this Act, other than this subsection, are inoperative after
6December 31, 2017 for every participating utility, after which
7time a participating utility shall no longer be eligible to
8annually update the performance-based formula rate tariff
9pursuant to subsection (d) of this Section. At such time, the
10then current rates shall remain in effect until such time as
11new rates are set pursuant to Article IX of this Act, subject
12to retroactive adjustment, with interest, to reconcile rates
13charged with actual costs.
14    By December 31, 2017, the Commission shall prepare and file
15with the General Assembly a report on the infrastructure
16program and the performance-based formula rate. The report
17shall include the change in the average amount per kilowatthour
18paid by residential customers between June 1, 2011 and May 31,
192017. If the change in the total average rate paid exceeds 2.5%
20compounded annually, the Commission shall include in the report
21an analysis that shows the portion of the change due to the
22delivery services component and the portion of the change due
23to the supply component of the rate. The report shall include
24separate sections for each participating utility.
25    In the event Sections 16-108.5, 16-108.6, 16-108.7, and
2616-108.8 of this Act do not become inoperative after December

 

 

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131, 2017, then these Sections are inoperative after December
231, 2022 for every participating utility, after which time a
3participating utility shall no longer be eligible to annually
4update the performance-based formula rate tariff pursuant to
5subsection (d) of this Section. At such time, the then current
6rates shall remain in effect until such time as new rates are
7set pursuant to Article IX of this Act, subject to retroactive
8adjustment, with interest, to reconcile rates charged with
9actual costs.
10    The fact that this Section becomes inoperative as set forth
11in this subsection shall not be construed to mean that the
12Commission may reexamine or otherwise reopen prudence or
13reasonableness determinations already made.
14    (i) While a participating utility may use, develop, and
15maintain broadband systems and the delivery of broadband
16services, voice-over-internet-protocol services,
17telecommunications services, and cable and video programming
18services for use in providing delivery services and Smart Grid
19functionality or application to its retail customers,
20including, but not limited to, the installation,
21implementation and maintenance of Smart Grid electric system
22upgrades as defined in Section 16-108.6 of this Act, a
23participating utility is prohibited from offering to its retail
24customers broadband services or the delivery of broadband
25services, voice-over-internet-protocol services,
26telecommunications services, or cable or video programming

 

 

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1services, unless they are part of a service directly related to
2delivery services or Smart Grid functionality or applications
3as defined in Section 16-108.6 of this Act, and from recovering
4the costs of such offerings from retail customers.
5    (j) Nothing in this Section is intended to legislatively
6overturn the opinion issued in Commonwealth Edison Co. v. Ill.
7Commerce Comm'n, Nos. 2-08-0959, 2-08-1037, 2-08-1137,
81-08-3008, 1-08-3030, 1-08-3054, 1-08-3313 cons. (Ill. App.
9Ct. 2d Dist. Sept. 30, 2010). This amendatory Act of the 97th
10General Assembly shall not be construed as creating a contract
11between the General Assembly and the participating utility, and
12shall not establish a property right in the participating
13utility.
14    (k) The changes made in subsections (c) and (d) of this
15Section by this amendatory Act of the 98th General Assembly are
16intended to be a restatement and clarification of existing law,
17and intended to give binding effect to the provisions of House
18Resolution 1157 adopted by the House of Representatives of the
1997th General Assembly and Senate Resolution 821 adopted by the
20Senate of the 97th General Assembly that are reflected in
21paragraph (3) of this subsection. In addition, this amendatory
22Act of the 98th General Assembly preempts and supersedes any
23final Commission orders entered in Docket Nos. 11-0721,
2412-0001, 12-0293, and 12-0321 to the extent inconsistent with
25the amendatory language added to subsections (c) and (d).
26        (1) No earlier than 5 business days after the effective

 

 

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1    date of this amendatory Act of the 98th General Assembly,
2    each participating utility shall file any tariff changes
3    necessary to implement the amendatory language set forth in
4    subsections (c) and (d) of this Section by this amendatory
5    Act of the 98th General Assembly and a revised revenue
6    requirement under the participating utility's
7    performance-based formula rate. The Commission shall enter
8    a final order approving such tariff changes and revised
9    revenue requirement within 21 days after the participating
10    utility's filing.
11        (2) Notwithstanding anything that may be to the
12    contrary, a participating utility may file a tariff to
13    retroactively recover its previously unrecovered actual
14    costs of delivery service that are no longer subject to
15    recovery through a reconciliation adjustment under
16    subsection (d) of this Section. This retroactive recovery
17    shall include any derivative adjustments resulting from
18    the changes made to subsections (c) and (d) of this Section
19    by this amendatory Act of the 98th General Assembly. Such
20    tariff shall allow the utility to assess on current
21    customer bills over a period of 12 monthly billing periods,
22    a charge or credit related to those unrecovered costs with
23    interest at the utility's weighted average cost of capital
24    during the period in which those costs were unrecovered. A
25    participating utility may file a tariff that implements a
26    retroactive charge or credit as described in this paragraph

 

 

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1    for amounts not otherwise included in the tariff filing
2    provided for in paragraph (1) of this subsection (k). The
3    Commission shall enter a final order approving such tariff
4    within 21 days after the participating utility's filing.
5        (3) The tariff changes described in paragraphs (1) and
6    (2) of this subsection (k) shall relate only to, and be
7    consistent with, the following provisions of this
8    amendatory Act of the 98th General Assembly: paragraph (2)
9    of subsection (c) regarding year-end capital structure,
10    subparagraph (D) of paragraph (4) of subsection (c)
11    regarding pension assets, and subsection (d) regarding the
12    reconciliation components related to year-end rate base
13    and interest calculated at a rate equal to the utility's
14    weighted average cost of capital.
15        (4) Nothing in this subsection is intended to effect a
16    dismissal of or otherwise affect an appeal from any final
17    Commission orders entered in Docket Nos. 11-0721, 12-0001,
18    12-0293, and 12-0321 other than to the extent of the
19    amendatory language contained in subsections (c) and (d) of
20    this amendatory Act of the 98th General Assembly.
21    (l) Each participating utility shall be deemed to have been
22in full compliance with all requirements of subsection (b) of
23this Section, subsection (c) of this Section, Section 16-108.6
24of this Act, and all Commission orders entered pursuant to
25Sections 16-108.5 and 16-108.6 of this Act, up to and including
26the effective date of this amendatory Act of the 98th General

 

 

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1Assembly. The Commission shall not undertake any investigation
2of such compliance and no penalty shall be assessed or adverse
3action taken against a participating utility for noncompliance
4with Commission orders associated with subsection (b) of this
5Section, subsection (c) of this Section, and Section 16-108.6
6of this Act prior to such date. Each participating utility
7shall be permitted, without penalty, a period of 12 months
8after such effective date to take actions required to ensure
9its infrastructure investment program is in compliance with
10subsection (b) of this Section and with Section 16-108.6 of
11this Act. Provided further:
12        (1) if this amendatory Act of the 98th General Assembly
13    takes effect on or before June 15, 2013, then each
14    participating utility other than an combination utility
15    shall file with the Commission, within 45 days after such
16    effective date, a plan for accelerating the utility's meter
17    deployment schedule approved in the final Commission order
18    on rehearing entered in Docket No. 12-0298 and the
19    Commission shall approve or approve as modified such plan
20    within 90 days after the utility's filing; provided
21    however, that if the Commission has already initiated a
22    proceeding pursuant to subsection (e) of Section 16-108.6
23    of this Act or issued an order thereunder prior to such
24    effective date, then the filing described in this
25    subparagraph shall not be required for the relevant
26    utility; or

 

 

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1        (2) if this amendatory Act of the 98th General Assembly
2    takes effect after June 15, 2013, then the Commission shall
3    dismiss any pending proceeding with respect to a
4    participating utility other than a combination utility
5    initiated pursuant to subsection (e) of Section 16-108.6 of
6    this Act prior to such effective date within 5 days after
7    such effective date and any order entered pursuant to
8    subsection (e) of Section 16-108.6 of this Act prior to
9    such effective date applicable to a participating utility
10    other than a combination utility shall be immediately void
11    upon such effective date; provided further that within 45
12    days after the effective date of this amendatory Act of the
13    98th General Assembly, each participating utility other
14    than a combination utility shall file with the Commission a
15    plan for accelerating its meter deployment schedule
16    approved in the final Commission order on rehearing entered
17    in Docket No. 12-0298 and the Commission shall approve or
18    approve as modified such plan within 90 days after the
19    utility's filing.
20    The order entered by the Commission pursuant to paragraph
21(1) or (2) of this subsection shall provide for accelerated
22deployment, taking into account procurement times for meters
23and other equipment. Nothing in this amendatory Act of the 98th
24General Assembly shall shorten or extend the end dates for the
255-year or 10-year periods set forth in subsection (b) of this
26Section or Section 16-108.6 of this Act. Nothing in this

 

 

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1subsection is intended to address whether a participating
2utility has, or has not, satisfied any or all of the metrics
3and performance goals established pursuant to subsection (f) of
4this Section.
5    (m) The provisions of this amendatory Act of the 98th
6General Assembly are severable under Section 1.31 of the
7Statute on Statutes.
8(Source: P.A. 97-616, eff. 10-26-11; 97-646, eff. 12-30-11.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.

 

 

HB2529- 52 -LRB098 10876 JLS 41377 b

1 INDEX
2 Statutes amended in order of appearance
3    220 ILCS 5/4-301from Ch. 111 2/3, par. 4-301
4    220 ILCS 5/16-108.5