Illinois General Assembly - Full Text of HB4541
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Full Text of HB4541  102nd General Assembly

HB4541 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4541

 

Introduced 1/21/2022, by Rep. David A. Welter

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/8-306
220 ILCS 5/9-201  from Ch. 111 2/3, par. 9-201
220 ILCS 5/9-210.5

    Amends the Public Utilities Act. Provides that additional notice requirements apply for water or sewer utilities with greater than 2,500 total customers (rather than 15,000 total customers). Provides that such water or sewer utilities shall include in a separate bill insert the percentage change from the rate of the customer's previous bill to the rate of the customer's current bill. Provides that water utilities under the jurisdiction of the Illinois Commerce Commission shall not increase water and sewer rates by more than 2.5% annually. Provides that an acquisition of a water or sewer utility shall be paid for by shareholders and not existing ratepayers (rather than charging ratepayers in the tariff group into which the water or sewer utility is to be combined specific rates).


LRB102 23678 SPS 32861 b

 

 

A BILL FOR

 

HB4541LRB102 23678 SPS 32861 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 5. The Public Utilities Act is amended by changing
5Sections 8-306, 9-201, and 9-210.5 as follows:
 
6    (220 ILCS 5/8-306)
7    Sec. 8-306. Special provisions relating to water and sewer
8utilities.
9    (a) No later than 120 days after the effective date of this
10amendatory Act of the 94th General Assembly, the Commission
11shall prepare, make available to customers upon request, and
12post on its Internet web site information concerning the
13service obligations of water and sewer utilities and remedies
14that a customer may pursue for a violation of the customer's
15rights. The information shall specifically address the rights
16of a customer of a water or sewer utility in the following
17situations:
18        (1) The customer's water meter is replaced.
19        (2) The customer's bill increases by more than 50%
20    within one billing period.
21        (3) The customer's water service is terminated.
22        (4) The customer wishes to complain after receiving a
23    termination of service notice.

 

 

HB4541- 2 -LRB102 23678 SPS 32861 b

1        (5) The customer is unable to make payment on a
2    billing statement.
3        (6) A rate is filed, including without limitation a
4    surcharge or annual reconciliation filing, that will
5    increase the amount billed to the customer.
6        (7) The customer is billed for services provided prior
7    to the date covered by the billing statement.
8        (8) The customer is due to receive a credit.
9    Each billing statement issued by a water or sewer utility
10shall include an Internet web site address where the customer
11can view the information required under this subsection (a)
12and a telephone number that the customer may call to request a
13copy of the information.
14    (b) A water or sewer utility may discontinue service only
15after it has mailed or delivered by other means a written
16notice of discontinuance substantially in the form of Appendix
17A of 83 Ill. Adm. Code 280. The notice must include the
18Internet web site address where the customer can view the
19information required under subsection (a) and a telephone
20number that the customer may call to request a copy of the
21information. Any notice required to be delivered or mailed to
22a customer prior to discontinuance of service shall be
23delivered or mailed separately from any bill. Service shall
24not be discontinued until at least 5 days after delivery or 8
25days after the mailing of this notice. Service shall not be
26discontinued and shall be restored if discontinued for the

 

 

HB4541- 3 -LRB102 23678 SPS 32861 b

1reason which is the subject of a dispute or complaint during
2the pendency of informal or formal complaint procedures of the
3Illinois Commerce Commission under 83 Ill. Adm. Code 280.160
4or 280.170, where the customer has complied with those rules.
5Service shall not be discontinued and shall be restored if
6discontinued where a customer has established a deferred
7payment agreement pursuant to 83 Ill. Adm. Code 280.110 and
8has not defaulted on such agreement. Residential customers who
9are indebted to a utility for past due utility service shall
10have the opportunity to make arrangements with the utility to
11retire the debt by periodic payments, referred to as a
12deferred payment agreement, unless this customer has failed to
13make payment under such a plan during the past 12 months. The
14terms and conditions of a reasonable deferred payment
15agreement shall be determined by the utility after
16consideration of the following factors, based upon information
17available from current utility records or provided by the
18customer or applicant:
19        (1) size of the past due account;
20        (2) customer or applicant's ability to pay;
21        (3) customer or applicant's payment history;
22        (4) reason for the outstanding indebtedness; and
23        (5) any other relevant factors relating to the
24    circumstances of the customer or applicant's service.
25A residential customer shall pay a maximum of one-fourth of
26the amount past due and owing at the time of entering into the

 

 

HB4541- 4 -LRB102 23678 SPS 32861 b

1deferred payment agreement, and the water or sewer utility
2shall allow a minimum of 2 months from the date of the
3agreement and a maximum of 12 months for payment to be made
4under a deferred payment agreement. Late payment charges may
5be assessed against the amount owing that is the subject of a
6deferred payment agreement.
7    (c) A water or sewer utility shall provide notice as
8required by subsection (a) of Section 9-201 after the filing
9of each information sheet under a purchased water surcharge,
10purchased sewage treatment surcharge, or qualifying
11infrastructure plant surcharge. The utility also shall post
12notice of the filing in accordance with the requirements of 83
13Ill. Adm. Code 255. Unless filed as part of a general rate
14increase, notice of the filing of a purchased water surcharge
15rider, purchased sewage treatment surcharge rider, or
16qualifying infrastructure plant surcharge rider also shall be
17given in the manner required by this subsection (c) for the
18filing of information sheets.
19    (d) Commission rules pertaining to formal and informal
20complaints against public utilities shall apply with full and
21equal force to water and sewer utilities and their customers,
22including provisions of 83 Ill. Adm. Code 280.170, and the
23Commission shall respond to each complaint by providing the
24consumer with a copy of the utility's response to the
25complaint and a copy of the Commission's review of the
26complaint and its findings. The Commission shall also provide

 

 

HB4541- 5 -LRB102 23678 SPS 32861 b

1the consumer with all available options for recourse.
2    (e) Any refund shown on the billing statement of a
3customer of a water or sewer utility must be itemized and must
4state if the refund is an adjustment or credit.
5    (f) Water service for building construction purposes. At
6the request of any municipality or township within the service
7area of a public utility that provides water service to
8customers within the municipality or township, a public
9utility must (1) require all water service used for building
10construction purposes to be measured by meter and subject to
11approved rates and charges for metered water service and (2)
12prohibit the unauthorized use of water taken from hydrants or
13service lines installed at construction sites.
14    (g) Water meters.
15        (1) Periodic testing. Unless otherwise approved by the
16    Commission, each service water meter shall be periodically
17    inspected and tested in accordance with the schedule
18    specified in 83 Ill. Adm. Code 600.340, or more frequently
19    as the results may warrant, to insure that the meter
20    accuracy is maintained within the limits set out in 83
21    Ill. Adm. Code 600.310.
22        (2) Meter tests requested by customer.
23            (A) Each utility furnishing metered water service
24        shall, without charge, test the accuracy of any meter
25        upon request by the customer served by such meter,
26        provided that the meter in question has not been

 

 

HB4541- 6 -LRB102 23678 SPS 32861 b

1        tested by the utility or by the Commission within 2
2        years previous to such request. The customer or his or
3        her representatives shall have the privilege of
4        witnessing the test at the option of the customer. A
5        written report, giving the results of the test, shall
6        be made to the customer.
7            (B) When a meter that has been in service less than
8        2 years since its last test is found to be accurate
9        within the limits specified in 83 Ill. Adm. Code
10        600.310, the customer shall pay a fee to the utility
11        not to exceed the amounts specified in 83 Ill. Adm.
12        Code 600.350(b). Fees for testing meters not included
13        in this Section or so located that the cost will be out
14        of proportion to the fee specified will be determined
15        by the Commission upon receipt of a complete
16        description of the case.
17        (3) Commission referee tests. Upon written application
18    to the Commission by any customer, a test will be made of
19    the customer's meter by a representative of the
20    Commission. For such a test, a fee as provided for in
21    subsection (g)(2) shall accompany the application. If the
22    meter is found to be registering more than 1.5% fast on the
23    average when tested as prescribed in 83 Ill. Adm. Code
24    600.310, the utility shall refund to the customer the
25    amount of the fee. The utility shall in no way disturb the
26    meter after a customer has made an application for a

 

 

HB4541- 7 -LRB102 23678 SPS 32861 b

1    referee test until authority to do so is given by the
2    Commission or the customer in writing.
3    (h) Water and sewer utilities; low usage. Each public
4utility that provides water and sewer service must establish a
5unit sewer rate, subject to review by the Commission, that
6applies only to those customers who use less than 1,000
7gallons of water in any billing period.
8    (i) Water and sewer utilities; separate meters. Each
9public utility that provides water and sewer service must
10offer separate rates for water and sewer service to any
11commercial or residential customer who uses separate meters to
12measure each of those services. In order for the separate rate
13to apply, a combination of meters must be used to measure the
14amount of water that reaches the sewer system and the amount of
15water that does not reach the sewer system.
16    (j) Each water or sewer public utility must disclose on
17each billing statement any amount billed that is for service
18provided prior to the date covered by the billing statement.
19The disclosure must include the dates for which the prior
20service is being billed. Each billing statement that includes
21an amount billed for service provided prior to the date
22covered by the billing statement must disclose the dates for
23which that amount is billed and must include a copy of the
24document created under subsection (a) and a statement of
25current Commission rules concerning unbilled or misbilled
26service.

 

 

HB4541- 8 -LRB102 23678 SPS 32861 b

1    (k) When the customer is due a refund resulting from
2payment of an overcharge, the utility shall credit the
3customer in the amount of overpayment with interest from the
4date of overpayment by the customer. The rate for interest
5shall be at the appropriate rate determined by the Commission
6under 83 Ill. Adm. Code 280.70.
7    (l) Water and sewer public utilities; subcontractors. The
8Commission shall adopt rules for water and sewer public
9utilities to provide notice to the customers of the proper
10kind of identification that a subcontractor must present to
11the customer, to prohibit a subcontractor from soliciting or
12receiving payment of any kind for any service provided by the
13water or sewer public utility or the subcontractor, and to
14establish sanctions for violations.
15    (m) Water and sewer public utilities; unaccounted-for
16water. By December 31, 2006, each water public utility shall
17file tariffs with the Commission to establish the maximum
18percentage of unaccounted-for water that would be considered
19in the determination of any rates or surcharges. The rates or
20surcharges approved for a water public utility shall not
21include charges for unaccounted-for water in excess of this
22maximum percentage without well-documented support and
23justification for the Commission to consider in any request to
24recover charges in excess of the tariffed maximum percentage.
25    (n) Rate increases; public forums. When any public utility
26providing water or sewer service proposes a general rate

 

 

HB4541- 9 -LRB102 23678 SPS 32861 b

1increase, in addition to other notice requirements, the water
2or sewer public utility must notify its customers of their
3right to request a public forum. A customer or group of
4customers must make written request to the Commission for a
5public forum and must also provide written notification of the
6request to the customer's municipal or, for unincorporated
7areas, township government. The Commission, at its discretion,
8may schedule the public forum. If it is determined that public
9forums are required for multiple municipalities or townships,
10the Commission shall schedule these public forums, in
11locations within approximately 45 minutes drive time of the
12municipalities or townships for which the public forums have
13been scheduled. The public utility must provide advance notice
14of 30 days for each public forum to the governing bodies of
15those units of local government affected by the increase. The
16day of each public forum shall be selected so as to encourage
17the greatest public participation. Each public forum will
18begin at 7:00 p.m. Reports and comments made during or as a
19result of each public forum must be made available to the
20hearing officials and reviewed when drafting a recommended or
21tentative decision, finding or order pursuant to Section
2210-111 of this Act.
23    (o) Water utilities under the jurisdiction of the
24Commission shall not increase water and sewer rates by more
25than 2.5% annually. For purposes of this subsection, "rates"
26means the Commission-approved rates on January 1, 2022.

 

 

HB4541- 10 -LRB102 23678 SPS 32861 b

1(Source: P.A. 94-950, eff. 6-27-06.)
 
2    (220 ILCS 5/9-201)  (from Ch. 111 2/3, par. 9-201)
3    Sec. 9-201. (a) Unless the Commission otherwise orders,
4and except as otherwise provided in this Section, no change
5shall be made by any public utility in any rate or other charge
6or classification, or in any rule, regulation, practice or
7contract relating to or affecting any rate or other charge,
8classification or service, or in any privilege or facility,
9except after 45 days' notice to the Commission and to the
10public as herein provided. Such notice shall be given by
11filing with the Commission and keeping open for public
12inspection new schedules or supplements stating plainly the
13change or changes to be made in the schedule or schedules then
14in force, and the time when the change or changes will go into
15effect, and by publication in a newspaper of general
16circulation or such other notice to persons affected by such
17change as may be prescribed by rule of the Commission. The
18Commission, for good cause shown, may allow changes without
19requiring the 45 days' notice herein provided for, by an order
20specifying the changes so to be made and the time when they
21shall take effect and the manner in which they shall be filed
22and published.
23    When any change is proposed in any rate or other charge, or
24classification, or in any rule, regulation, practice, or
25contract relating to or affecting any rate or other charge,

 

 

HB4541- 11 -LRB102 23678 SPS 32861 b

1classification or service, or in any privilege or facility,
2such proposed change shall be plainly indicated on the new
3schedule filed with the Commission, by some character to be
4designated by the Commission, immediately preceding or
5following the item.
6    When any public utility providing water or sewer service
7proposes any change in any rate or other charge, or
8classification, or in any rule, regulation, practice, or
9contract relating to or affecting any rate or other charge,
10classification or service, or in any privilege or facility,
11such utility shall, in addition to the other notice
12requirements of this Act, provide notice of such change to all
13customers potentially affected by including a notice and
14description of such change, and of Commission procedures for
15intervention, in the first bill sent to each such customer
16after the filing of the proposed change.
17    For water or sewer utilities with greater than 2,500
1815,000 total customers, the following notice requirements are
19applicable, in addition to the other notice requirements of
20this Act:
21        (1) As a separate bill insert, an initial notice in
22    the first bill sent to all customers potentially affected
23    by the proposed change after the filing of the proposed
24    change shall include:
25            (A) the approximate date when the change or
26        changes shall go into effect assuming the Commission

 

 

HB4541- 12 -LRB102 23678 SPS 32861 b

1        utilizes the 11-month process as described in this
2        Section;
3            (B) a statement indicating that the estimated bill
4        impact may vary based on multiple factors, including,
5        but not limited to, meter size, usage volume, and the
6        fire protection district;
7            (C) the water or sewer utility's customer service
8        number or other number as may be appropriate where an
9        authorized agent of the water or sewer utility can
10        explain how the proposed increase might impact an
11        individual customer's bill;
12            (D) if the proposed change involves a change from
13        a flat to a volumetric rate, an explanation of
14        volumetric rate;
15            (E) a reference to the water or sewer utility's
16        website where customers can find tips on water
17        conservation; and
18            (F) for customers receiving both water and sewer
19        service from a utility and if the customer has an
20        option to install a separate meter for irrigation to
21        mitigate sewer charges, an explanation of the water
22        and sewer utility's and the customer's
23        responsibilities for installation of a separate meter
24        if such a change is approved; and .
25            (G) the percentage change from the rate of the
26        customer's previous bill to the rate of the customer's

 

 

HB4541- 13 -LRB102 23678 SPS 32861 b

1        current bill.
2        (2) A second notice to all customers shall be included
3    on the first bill after the Commission suspends the
4    tariffs initiating the rate case.
5        (3) Final notice of such change shall be sent to all
6    customers potentially affected by the proposed change by
7    including information required under this paragraph (3)
8    with the first bill after the effective date of the rates
9    approved by the Final Order of the Commission in a rate
10    case. The notice shall include the following:
11            (A) the date when the change or changes went into
12        effect;
13            (B) the water or sewer utility's customer service
14        number or other number as may be appropriate where an
15        authorized agent of the water or sewer utility can
16        explain how the proposed increase might impact an
17        individual customer's bill;
18            (C) an explanation that usage shall now be charged
19        at a volumetric rate rather than a flat rate, if
20        applicable;
21            (D) a reference to the water or sewer utility's
22        website where the customer can find tips on water
23        conservation; and
24            (E) for customers receiving both water and sewer
25        service from a utility and if the customer has an
26        option to install a separate meter for irrigation to

 

 

HB4541- 14 -LRB102 23678 SPS 32861 b

1        mitigate sewer charges, an explanation of the water
2        and sewer utility's and the customer's
3        responsibilities for installation of a separate meter
4        if such a change is approved.
5        (4) In each notice provided to a customer, the water
6    or sewer utility shall include the phone number and
7    website information for the Citizens Utility Board and the
8    Consumer Services Division of the Commission with
9    instructions on how to dispute or file a complaint
10    relating to a rate increase.
11    (b) Whenever there shall be filed with the Commission any
12schedule stating an individual or joint rate or other charge,
13classification, contract, practice, rule or regulation, the
14Commission shall have power, and it is hereby given authority,
15either upon complaint or upon its own initiative without
16complaint, at once, and if it so orders, without answer or
17other formal pleadings by the interested public utility or
18utilities, but upon reasonable notice, to enter upon a hearing
19concerning the propriety of such rate or other charge,
20classification, contract, practice, rule or regulation, and
21pending the hearing and decision thereon, such rate or other
22charge, classification, contract, practice, rule or regulation
23shall not go into effect. The period of suspension of such rate
24or other charge, classification, contract, practice, rule or
25regulation shall not extend more than 105 days beyond the time
26when such rate or other charge, classification, contract,

 

 

HB4541- 15 -LRB102 23678 SPS 32861 b

1practice, rule or regulation would otherwise go into effect
2unless the Commission, in its discretion, extends the period
3of suspension for a further period not exceeding 6 months.
4    All rates or other charges, classifications, contracts,
5practices, rules or regulations not so suspended shall, on the
6expiration of 45 days from the time of filing the same with the
7Commission, or of such lesser time as the Commission may
8grant, go into effect and be the established and effective
9rates or other charges, classifications, contracts, practices,
10rules and regulations, subject to the power of the Commission,
11after a hearing had on its own motion or upon complaint, as
12herein provided, to alter or modify the same.
13    Within 30 days after such changes have been authorized by
14the Commission, copies of the new or revised schedules shall
15be posted or filed in accordance with the terms of Section
169-103 of this Act, in such a manner that all changes shall be
17plainly indicated. The Commission shall incorporate into the
18period of suspension a review period of 4 business days during
19which the Commission may review and determine whether the new
20or revised schedules comply with the Commission's decision
21approving a change to the public utility's rates. Such review
22period shall not extend the suspension period by more than 2
23days. Absent notification to the contrary within the 4
24business day period, the new or revised schedules shall be
25deemed approved.
26    (c) If the Commission enters upon a hearing concerning the

 

 

HB4541- 16 -LRB102 23678 SPS 32861 b

1propriety of any proposed rate or other charge,
2classification, contract, practice, rule or regulation, the
3Commission shall establish the rates or other charges,
4classifications, contracts, practices, rules or regulations
5proposed, in whole or in part, or others in lieu thereof, which
6it shall find to be just and reasonable. In such hearing, the
7burden of proof to establish the justness and reasonableness
8of the proposed rates or other charges, classifications,
9contracts, practices, rules or regulations, in whole and in
10part, shall be upon the utility. The utility, the staff of the
11Commission, the Attorney General, or any party to a proceeding
12initiated under this Section who has been granted intervenor
13status and submitted a post-hearing brief must be given the
14opportunity to present oral argument, if requested no later
15than the date for filing exceptions, on the propriety of any
16proposed rate or other charge, classification, contract,
17practice, rule, or regulation. No rate or other charge,
18classification, contract, practice, rule or regulation shall
19be found just and reasonable unless it is consistent with
20Sections of this Article.
21    (d) Except where compliance with Section 8-401 of this Act
22is of urgent and immediate concern, no representative of a
23public utility may discuss with a commissioner, commissioner's
24assistant, or administrative law judge in a non-public setting
25a planned filing for a general rate increase. If a public
26utility makes a filing under this Section, then no substantive

 

 

HB4541- 17 -LRB102 23678 SPS 32861 b

1communication by any such person with a commissioner,
2commissioner's assistant, or administrative law judge
3concerning the filing is permitted until a notice of hearing
4has been issued. After the notice of hearing has been issued,
5the only communications by any such person with a
6commissioner, commissioner's assistant, or administrative law
7judge concerning the filing permitted are communications
8permitted under Section 10-103 of this Act. If any such
9communication does occur, then within 5 days of the docket
10being initiated all details relating to the communication
11shall be placed on the public record of the proceeding. The
12record shall include any materials, whether written, recorded,
13filmed, or graphic in nature, produced or reproduced on any
14media, used in connection with the communication. The record
15shall reflect the names of all persons who transmitted,
16received, or were otherwise involved in the communication, the
17duration of the communication, and whether the communication
18occurred in person or by other means. In the case of an oral
19communication, the record shall also reflect the location or
20locations of all persons involved in the communication and, if
21the communication occurred by telephone, the telephone numbers
22for the callers and recipients of the communication. A
23commissioner, commissioner's assistant, or administrative law
24judge who is involved in any such communication shall be
25recused from the affected proceeding. The Commission, or any
26commissioner or administrative law judge presiding over the

 

 

HB4541- 18 -LRB102 23678 SPS 32861 b

1proceeding shall, in the event of a violation of this Section,
2take action necessary to ensure that such violation does not
3prejudice any party or adversely affect the fairness of the
4proceedings including dismissing the affected proceeding.
5Nothing in this subsection (d) is intended to preclude
6otherwise allowable updates on issues that may be indirectly
7related to a general rate case filing because cost recovery
8for the underlying activity may be requested. Such updates may
9include, without limitation, issues related to outages and
10restoration, credit ratings, security issuances, reliability,
11Federal Energy Regulatory Commission matters, Federal
12Communications Commission matters, regional reliability
13organizations, consumer education, or labor matters, provided
14that such updates may not include cost recovery in a planned
15rate case.
16(Source: P.A. 100-840, eff. 8-13-18.)
 
17    (220 ILCS 5/9-210.5)
18    (Section scheduled to be repealed on June 1, 2028)
19    Sec. 9-210.5. Valuation of water and sewer utilities.
20    (a) In this Section:
21        "Disinterested" means that the person directly
22    involved (1) is not a director, officer, or an employee of
23    the large public utility or the water or sewer utility or
24    its direct affiliates or subsidiaries for at least 12
25    months before becoming engaged under this Section; (2)

 

 

HB4541- 19 -LRB102 23678 SPS 32861 b

1    shall not derive a material financial benefit from the
2    sale of the water or sewer utility other than fees for
3    services rendered, and (3) shall not have a member of the
4    person's immediate family, including a spouse, parents or
5    spouse's parents, children or spouses of children, or
6    siblings and their spouses or children, be a director,
7    officer, or employee of either the large public utility or
8    water or sewer utility or the water or sewer utility or its
9    direct affiliates or subsidiaries for at least 12 months
10    before becoming engaged under this Section or receive a
11    material financial benefit from the sale of the water or
12    sewer utility other than fees for services rendered.
13        "District" means a service area of a large public
14    utility whose customers are subject to the same rate
15    tariff.
16        "Large public utility" means an investor-owned public
17    utility that:
18            (1) is subject to regulation by the Illinois
19        Commerce Commission under this Act;
20            (2) regularly provides water or sewer service to
21        more than 15,000 customer connections;
22            (3) provides safe and adequate service; and
23            (4) is not a water or sewer utility as defined in
24        this subsection (a).
25        "Next rate case" means a large public utility's first
26    general rate case after the date the large public utility

 

 

HB4541- 20 -LRB102 23678 SPS 32861 b

1    acquires the water or sewer utility where the acquired
2    water or sewer utility's cost of service is considered as
3    part of determining the large public utility's resulting
4    rates.
5        "Prior rate case" means a large public utility's
6    general rate case resulting in the rates in effect for the
7    large public utility at the time it acquires the water or
8    sewer utility.
9        "Utility service source" means the water or sewer
10    utility or large public utility from which the customer
11    receives its utility service type.
12        "Utility service type" means water utility service or
13    sewer utility service or water and sewer utility service.
14        "Water or sewer utility" means any of the following:
15            (1) a public utility that regularly provides water
16        or sewer service to 6,000 or fewer customer
17        connections;
18            (2) a water district, including, but not limited
19        to, a public water district, water service district,
20        or surface water protection district, or a sewer
21        district of any kind established as a special district
22        under the laws of this State that regularly provides
23        water or sewer service;
24            (3) a waterworks system or sewerage system
25        established under the Township Code that regularly
26        provides water or sewer service; or

 

 

HB4541- 21 -LRB102 23678 SPS 32861 b

1            (4) a water system or sewer system owned by a
2        municipality that regularly provides water or sewer
3        service; and
4            (5) any other entity that is not a public utility
5        that regularly provides water or sewer service.
6    (b) Notwithstanding any other provision of this Act, a
7large public utility that acquires a water or sewer utility
8may request that the Commission use, and, if so requested, the
9Commission shall use, the procedures set forth under this
10Section to establish the ratemaking rate base of that water or
11sewer utility at the time when it is acquired by the large
12public utility.
13    (c) If a large public utility elects the procedures under
14this Section to establish the rate base of a water or sewer
15utility that it is acquiring, then 3 appraisals shall be
16performed. The average of these 3 appraisals shall represent
17the fair market value of the water or sewer utility that is
18being acquired. The appraisals shall be performed by 3
19appraisers approved by the Commission's Executive Director or
20designee and engaged by either the water or sewer utility
21being acquired or by the large public utility. Each appraiser
22shall be engaged on reasonable terms approved by the
23Commission. Each appraiser shall be a disinterested person
24licensed as a State certified general real estate appraiser
25under the Real Estate Appraiser Licensing Act of 2002.
26    Each appraiser shall:

 

 

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1        (1) be sworn to determine the fair market value of the
2    water or sewer utility by establishing the amount for
3    which the water or sewer utility would be sold in a
4    voluntary transaction between a willing buyer and willing
5    seller under no obligation to buy or sell;
6        (2) determine fair market value in compliance with the
7    Uniform Standards of Professional Appraisal Practice;
8        (3) engage one disinterested engineer who is licensed
9    in this State, and who may be the same engineer that is
10    engaged by the other appraisers, to prepare an assessment
11    of the tangible assets of the water or sewer utility,
12    which is to be incorporated into the appraisal under the
13    cost approach;
14        (4) request from the manager of the Accounting
15    Department, if the water or sewer utility is a public
16    utility that is regulated by the Commission, a list of
17    investments made by the water or sewer utility that had
18    been disallowed previously and that shall be excluded from
19    the calculation of the large public utility's rate base in
20    its next rate case; and
21        (5) return their appraisal, in writing, to the water
22    or sewer utility and large public utility in a reasonable
23    and timely manner.
24    If the appraiser cannot engage an engineer, as described
25in paragraph (3) of this subsection (c), within 30 days after
26the appraiser is engaged, then the Commission's Executive

 

 

HB4541- 23 -LRB102 23678 SPS 32861 b

1Director or designee shall recommend the engineer the
2appraiser should engage. The Commission's Executive Director
3or designee shall provide his or her recommendation within 30
4days after he or she is officially notified of the appraiser's
5failure to engage an engineer and the appraiser shall promptly
6work to engage the recommended engineer. If the appraiser is
7unable to negotiate reasonable engagement terms with the
8recommended engineer within 15 days after the recommendation
9by the Commission's Executive Director or designee, then the
10appraiser shall notify the Commission's Executive Director or
11designee and the process shall be repeated until an engineer
12is successfully engaged.
13    (d) The lesser of (i) the purchase price or (ii) the fair
14market value determined under subsection (c) of this Section
15shall constitute the rate base associated with the water or
16sewer utility as acquired by and incorporated into the rate
17base of the district designated by the acquiring large public
18utility under this Section, subject to any adjustments that
19the Commission deems necessary to ensure such rate base
20reflects prudent and useful investments in the provision of
21public utility service. The reasonable transaction and closing
22costs incurred by the large public utility shall be treated
23consistent with the applicable accounting standards under this
24Act. The total amount of all of the appraisers' fees to be
25included in the transaction and closing costs shall not exceed
26the greater of $15,000 or 5% of the appraised value of the

 

 

HB4541- 24 -LRB102 23678 SPS 32861 b

1water or sewer utility being acquired. This rate base
2treatment shall not be deemed to violate this Act, including,
3but not limited to, any Sections in Articles VIII and IX of
4this Act that might be affected by this Section. Any
5acquisition of a water or sewer utility shall be paid for by
6shareholders and not existing ratepayers that affects the
7cumulative base rates of the large public utility's existing
8ratepayers in the tariff group into which the water or sewer
9utility is to be combined by less than (1) 2.5% at the time of
10the acquisition for any single acquisition completed under
11this Section or (2) 5% for all acquisitions completed under
12this Section before the Commission's final order in the next
13rate case shall not be deemed to violate Section 7-204 or any
14other provision of this Act.
15    In the Commission's order that approves the large public
16utility's acquisition of the water or sewer utility, the
17Commission shall issue its decision establishing (1) the
18ratemaking rate base of the water or sewer utility; (2) the
19district or tariff group with which the water or sewer utility
20shall be combined for ratemaking purposes, if such combination
21has been proposed by the large public utility; and (3) the
22rates to be charged to customers in the water or sewer utility.
23    (e) If the water or sewer utility being acquired is owned
24by the State or any political subdivision thereof, then the
25water or sewer utility must inform the public of the terms of
26its acquisition by the large public utility by (1) holding a

 

 

HB4541- 25 -LRB102 23678 SPS 32861 b

1public meeting prior to the acquisition and (2) causing to be
2published, in a newspaper of general circulation in the area
3that the water or sewer utility operates, a notice setting
4forth the terms of its acquisition by the large public utility
5and options that shall be available to assist customers to pay
6their bills after the acquisition.
7    (f) The large public utility may recommend the district or
8tariff group of which the water or sewer utility shall, for
9ratemaking purposes, become a part after the acquisition, or
10may recommend a lesser rate for the water or sewer utility. If
11the large public utility recommends a lesser rate, it shall
12submit to the Commission its proposed rate schedule and the
13proposed final tariff group for the acquired water or sewer
14utility. The Commission's approved district or tariff group or
15rates shall be consistent with the large public utility's
16recommendation, unless such recommendation can be shown to be
17contrary to the public interest.
18    (g) From the date of acquisition until the date that new
19rates are effective in the acquiring large public utility's
20next rate case, the customers of the acquired water or sewer
21utility shall pay the approved then-existing rates of the
22district or tariff group as ordered by the Commission, or some
23lesser rates as recommended by the large public utility and
24approved by the Commission under subsection (f); provided,
25that, if the application of such rates of the large public
26utility to customers of the acquired water or sewer utility

 

 

HB4541- 26 -LRB102 23678 SPS 32861 b

1using 54,000 gallons annually results in an increase to the
2total annual bill of customers of the acquired water or sewer
3utility, exclusive of fire service or related charges, then
4the large public utility's rates charged to the customers of
5the acquired water or sewer utility shall be uniformly
6reduced, if any reduction is required, by the percent that
7results in the total annual bill, exclusive of fire services
8or related charges, for the customers of the acquired water or
9sewer utility using 54,000 gallons being equal to 1.5% of the
10latest median household income as reported by the United
11States Census Bureau for the most applicable community or
12county. For each customer of the water or sewer utility with
13potable water usage values that cannot be reasonably obtained,
14a value of 4,500 gallons per month shall be assigned. These
15rates shall not be deemed to violate this Act including, but
16not limited to, Section 9-101 and any other applicable
17Sections in Articles VIII and IX of this Act. The Commission
18shall issue its decision establishing the rates effective for
19the water or sewer utility immediately following an
20acquisition in its order approving the acquisition.
21    (h) In the acquiring large public utility's next rate
22case, the water or sewer utility and the district or tariff
23group ordered by the Commission and their costs of service may
24be combined under the same rate tariff. This rate tariff shall
25be based on allocation of costs of service of the acquired
26water or sewer utility and the large public utility's district

 

 

HB4541- 27 -LRB102 23678 SPS 32861 b

1or tariff group ordered by the Commission and utilizing a rate
2design that does not distinguish among customers on the basis
3of utility service source or type. This rate tariff shall not
4be deemed to violate this Act including, but not limited to,
5Section 9-101 of this Act. In the acquiring large public
6utility's 2 rate cases after an acquisition, but in no
7subsequent rate case, the large public utility may file a rate
8tariff for a water or sewer utility acquired under this
9Section that establishes lesser rates than the district or
10tariff group into which the water or sewer utility is to be
11combined. Those lesser rates shall not be deemed to violate
12Section 7-204 or any other provision of this Act if they affect
13the cumulative base rates of the large public utility's
14existing rate payers in the district or tariff by less than
152.5%.
16    (i) Any post-acquisition improvements made by the large
17public utility in the water or sewer utility shall accrue a
18cost for financing set at the large public utility's
19determined rate for allowance for funds used during
20construction, inclusive of the debt, equity, and income tax
21gross up components, after the date on which the expenditure
22was incurred by the large public utility until the investment
23has been in service for a 4-year period or, if sooner, until
24the time the rates are implemented in the large public
25utility's next rate case.
26    Any post-acquisition improvements made by the large public

 

 

HB4541- 28 -LRB102 23678 SPS 32861 b

1utility in the water or sewer utility shall not be depreciated
2for ratemaking purposes from the date on which the expenditure
3was incurred by the large public utility until the investment
4has been in service for a 4-year period or, if sooner, until
5the time the rates are implemented in the large public
6utility's next rate case.
7    (j) This Section shall be exclusively applied to large
8public utilities in the voluntary and mutually agreeable
9acquisition of water or sewer utilities. Any petitions filed
10with the Commission related to the acquisitions described in
11this Section, including petitions seeking approvals or
12certificates required by this Act, shall be deemed approved
13unless the Commission issues its final order within 11 months
14after the date the large public utility filed its initial
15petition. This Section shall only apply to utilities providing
16water or sewer service and shall not be construed in any manner
17to apply to electric corporations, natural gas corporations,
18or any other utility subject to this Act.
19    (k) Nothing in this Section shall prohibit a party from
20declining to proceed with an acquisition or be deemed as
21establishing the final purchase price of an acquisition.
22    (l) In the Commission's order that approves the large
23utility's acquisition of the water or sewer utility, the
24Commission shall address each aspect of the acquisition
25transaction for which approval is required under the Act.
26    (m) Any contractor or subcontractor that performs work on

 

 

HB4541- 29 -LRB102 23678 SPS 32861 b

1a water or sewer utility acquired by a large public utility
2under this Section shall be a responsible bidder as described
3in Section 30-22 of the Illinois Procurement Code. The
4contractor or subcontractor shall submit evidence of meeting
5the requirements to be a responsible bidder as described in
6Section 30-22 to the water or sewer utility. Any new water or
7sewer facility built as a result of the acquisition shall
8require the contractor to enter into a project labor
9agreement. The large public utility acquiring the water or
10sewer utility shall offer employee positions to qualified
11employees of the acquired water or sewer utility.
12    (n) This Section is repealed on June 1, 2028.
13(Source: P.A. 102-149, eff. 1-1-22.)