Illinois General Assembly - Full Text of HB2200
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Full Text of HB2200  93rd General Assembly

HB2200sam002 93rd General Assembly



                                     LRB093 07959 AMC 19600 a

 1                    AMENDMENT TO HOUSE BILL 2200

 2        AMENDMENT NO.     .  Amend House Bill 2200  by  replacing
 3    everything after the enacting clause with the following:

 4        "Section  5.   The  Public  Utilities  Act  is amended by
 5    changing Section 7-204 and adding Section 8-402.2 as follows:

 6        (220 ILCS 5/7-204) (from Ch. 111 2/3, par. 7-204)
 7        Sec. 7-204. Reorganization defined;  Commission  approval
 8    therefore.
 9        (a)  For purposes of this Section, "reorganization" means
10    any transaction which, regardless of the means by which it is
11    accomplished,  results  in  a  change  in  the ownership of a
12    majority of the voting capital stock of  an  Illinois  public
13    utility; or the ownership or control of any entity which owns
14    or  controls  a  majority  of  the  voting capital stock of a
15    public utility; or by which 2 public utilities merge,  or  by
16    which  a  public  utility  acquires  substantially all of the
17    assets  of  another  public  utility;  or  the   transactions
18    described   in   subsection   (g);  provided,  however,  that
19    "reorganization" as used in this Section shall not include  a
20    mortgage  or pledge transaction entered into to secure a bona
21    fide borrowing by the party granting the mortgage  or  making
22    the pledge.
                            -2-      LRB093 07959 AMC 19600 a
 1        In  addition  to  the  foregoing,  "reorganization" shall
 2    include for purposes of this Section any  transaction  which,
 3    regardless  of  the  means  by which it is accomplished, will
 4    have the effect of terminating the affiliated interest status
 5    of any entity as defined in paragraphs (a), (b), (c)  or  (d)
 6    of  subsection  (2)  of  Section 7-101 of this Act where such
 7    entity had transactions with the public utility,  in  the  12
 8    calendar months immediately preceding the date of termination
 9    of  such affiliated interest status subject to subsection (3)
10    of Section 7-101 of this Act with a value greater than 15% of
11    the public utility's revenues for that same 12-month  period.
12    If   the  proposed  transaction  would  have  the  effect  of
13    terminating the affiliated interest status of more  than  one
14    Illinois  public  utility,  the  utility  with  the  greatest
15    revenues  for  the 12-month period shall be used to determine
16    whether such proposed transaction is a reorganization for the
17    purposes  of  this  Section.   The  Commission   shall   have
18    jurisdiction over any reorganization as defined herein.
19        (b)  No  reorganization  shall  take  place without prior
20    Commission approval.  The Commission shall  not  approve  any
21    proposed reorganization if the Commission finds, after notice
22    and  hearing,  that  the reorganization will adversely affect
23    the utility's ability to perform its duties under  this  Act.
24    In reviewing any proposed reorganization, the Commission must
25    find that:
26             (1)  the  proposed  reorganization will not diminish
27        the utility's  ability  to  provide  adequate,  reliable,
28        efficient, safe and least-cost public utility service;
29             (2)  the  proposed reorganization will not result in
30        the unjustified subsidization of  non-utility  activities
31        by the utility or its customers;
32             (3)  costs  and facilities are fairly and reasonably
33        allocated between utility and non-utility  activities  in
34        such  a  manner  that  the  Commission may identify those
                            -3-      LRB093 07959 AMC 19600 a
 1        costs and facilities which are properly included  by  the
 2        utility for ratemaking purposes;
 3             (4)  the    proposed    reorganization    will   not
 4        significantly  impair  the  utility's  ability  to  raise
 5        necessary capital on reasonable terms or  to  maintain  a
 6        reasonable capital structure;
 7             (5)  the   utility   will   remain  subject  to  all
 8        applicable  laws,  regulations,  rules,   decisions   and
 9        policies  governing  the  regulation  of  Illinois public
10        utilities;
11             (6)  the proposed reorganization is  not  likely  to
12        have a significant adverse effect on competition in those
13        markets over which the Commission has jurisdiction;
14             (7)  the  proposed  reorganization  is not likely to
15        result in any adverse rate impacts on retail customers.
16        (c)  The Commission shall not  approve  a  reorganization
17    without   ruling  on:  (i)  the  allocation  of  any  savings
18    resulting from the proposed reorganization; and (ii)  whether
19    the companies should be allowed to recover any costs incurred
20    in  accomplishing the proposed reorganization and, if so, the
21    amount of costs eligible for recovery and how the costs  will
22    be allocated.
23        (d)  The  Commission  shall  issue its Order approving or
24    denying the proposed reorganization within  11  months  after
25    the  application  is  filed.  The  Commission  may extend the
26    deadline for a period equivalent to the length of  any  delay
27    which  the  Commission  finds  to  have  been  caused  by the
28    Applicant's failure to provide data or information  requested
29    by   the  Commission  or  that  the  Commission  ordered  the
30    Applicant to provide to the parties. The Commission may  also
31    extend  the  deadline by an additional period not to exceed 3
32    months to consider amendments to the Applicant's  filing,  or
33    to consider reasonably unforeseeable changes in circumstances
34    subsequent to the Applicant's initial filing.
                            -4-      LRB093 07959 AMC 19600 a
 1        (e)  Subsections  (c)  and  (d) and subparagraphs (6) and
 2    (7) of subsection (b) of this Section  shall  apply  only  to
 3    merger applications submitted to the Commission subsequent to
 4    April  23,  1997.  No  other  Commission  approvals  shall be
 5    required for mergers that are subject to this Section.
 6        (f)  In approving any proposed reorganization pursuant to
 7    this Section the Commission may impose such terms, conditions
 8    or requirements as, in its judgment, are necessary to protect
 9    the interests of the public utility and its customers.
10        (g)  The Commission  shall,  within  9  months  after  an
11    application  is  filed,  issue its Order approving or denying
12    any proposed reorganization involving the  acquisition  by  a
13    public utility or its affiliate of all of the common stock or
14    substantially all of the operating assets, whether by merger,
15    creation  and  acquisition  of  a  limited liability or other
16    company, or otherwise, of another  public  utility  that  has
17    secured  debt  which is, or was, within the year prior to the
18    filing of the application, rated below investment grade by at
19    least 3 nationally recognized rating agencies. The Commission
20    shall in such  a  proceeding  review  and  approve,  with  or
21    without  modification,  the entries to be made as a result of
22    such  reorganization  on  the  books  and  records   of   the
23    reorganized  public  utility.  The Commission shall also have
24    the authority in such a proceeding to approve  a  rate  plan,
25    with  or  without modification, which if approved shall be in
26    effect for a 4-year term following the end of  the  mandatory
27    transition  period defined in Section 16-102 of this Act, for
28    the  retail  bundled  electric  service  rates  of  both  the
29    reorganized public utility and of any public utility that  is
30    affiliated,  or  becomes affiliated, with such public utility
31    as  a  result  of  the  reorganization  approved  under  this
32    subsection, provided  that  the  proposed  plan,  along  with
33    supporting testimony and data, is filed with the application.
34    The  Commission may approve such a rate plan if it finds that
                            -5-      LRB093 07959 AMC 19600 a
 1    such plan (i) is likely to promote rate certainty and  reduce
 2    exposure  to  volatile energy prices for those customers with
 3    maximum electric demands of less than 1 MW, (ii) is likely to
 4    assist the utilities  in  managing  risk,  raising  necessary
 5    capital  on reasonable terms, and providing reliable electric
 6    service, (iii) is likely to generate sufficient  revenues  so
 7    as to provide each utility an adequate opportunity to recover
 8    its expected costs of providing service and earn a reasonable
 9    return  of  and on its invested capital, and (iv) is just and
10    reasonable and  consistent  with  the  goals  and  objectives
11    stated  in Section 16-101A of this Act. If it approves such a
12    plan, the Commission shall also have the authority to  extend
13    the  provisions  of subsections (d) and (e) of Section 16-111
14    of this Act (as modified by Section 16-111.3) for the  period
15    in  which  such  rate  plan  is  in effect, using information
16    applicable to such period. The Commission shall also have the
17    authority to review  in  such  proceeding  the  prudence  and
18    reasonableness  of any purchased power agreement entered into
19    by the electric utilities, the costs of which  are  reflected
20    in  the rate plan. The Commission's approval of the rate plan
21    shall also be  conditioned  on  completion  of  the  proposed
22    reorganization,  and  shall  be  subject  to the Commission's
23    authority pursuant to subsection (f)  above  to  impose  such
24    terms,  conditions,  or requirements as, in its judgment, are
25    necessary to protect the interests of  the  public  utilities
26    and their customers. The filing, approval, and implementation
27    of  a rate plan pursuant to this subsection shall comply with
28    the provisions of 83 Illinois Administrative Code Parts  285,
29    286,  and  287,  provided  that the Commission shall have the
30    authority to grant appropriate waivers from those parts based
31    on requests for waivers filed at least 14 days prior  to  the
32    filing  of the application, and to require the filing of such
33    additional information as determined  by  the  Commission  to
34    support  a  just  and  reasonable  plan  for  a  4-year  term
                            -6-      LRB093 07959 AMC 19600 a
 1    following  the end of the mandatory transition period. If the
 2    reorganization involves the sale  or  transfer  of  operating
 3    assets,  then  notwithstanding  any other provision of law or
 4    any rule or regulation, the Commission  shall  also  in  such
 5    proceeding  make  such  other determinations and approvals as
 6    may be necessary to implement the reorganization and  provide
 7    for  an  orderly  transition,  including, but not limited to,
 8    providing for the adoption by the reorganized public  utility
 9    of  existing  rates, terms, and conditions not addressed in a
10    rate plan (including those filed pursuant to  Section  16-108
11    or  Article  XVIII of this Act), the abandonment, transfer or
12    granting of certificates, or the assignment of  service  area
13    agreements.
14    (Source: P.A. 90-561, eff. 12-16-97.)

15        (220 ILCS 5/8-402.2 new)
16        Sec. 8-402.2.  Renewable energy portfolio standard.
17        (a)  The  objective  of  this  Section  is  to ensure the
18    development and use of economical renewable energy  resources
19    consistent with the goals stated in Section 5 of the Illinois
20    Resource Development and Energy Security Act and specifically
21    to  assess  whether the State's electric energy providers can
22    economically provide at least 8% of the  energy  used  within
23    the  State  through  renewable energy resources by the end of
24    the year 2010, and 10% by the end of the year 2012.
25        (b)  An electric utility, as defined in Section 16-102 of
26    this Act, that serves over one million customers within  this
27    State,  and any electric utility that is affiliated with such
28    an electric utility, shall use its best efforts to procure by
29    the end of 2005 renewable energy resources equal to at  least
30    2%  of the electric energy to be sold by the electric utility
31    to retail  customers  within  its  service  area  during  the
32    following  calendar  year,  and  procure  by  the end of 2006
33    renewable energy resources  equal  to  at  least  3%  of  the
                            -7-      LRB093 07959 AMC 19600 a
 1    electric  energy to be sold by the electric utility to retail
 2    customers  within  its  service  area  during  the  following
 3    calendar year. This provision is, however, contingent on  the
 4    continued  existence  of  federal  wind energy production tax
 5    credits enacted as part of the Energy  Policy  Act  of  1992.
 6    Such  electric  utilities  shall  report to the Commission on
 7    their efforts and on their compliance with these standards by
 8    April 1 of 2006 and 2007, respectively.  Violations  of  this
 9    Section  shall  be  subject  to the penalties provided for in
10    Section 5-202 of this Act and assessed  through  the  process
11    provided for in Section 4-203.
12        (c)  During  calendar year 2007, the Commission, together
13    with the Department of  Commerce  and  Economic  Opportunity,
14    shall  evaluate  the availability and use of renewable energy
15    resources within this  State  and  shall  also  consider  the
16    feasibility of adoption of an enforceable mandatory renewable
17    energy  resource  portfolio  standard to be applicable to all
18    electric  utilities  and  all  alternative  retail   electric
19    suppliers  as  defined  in  Section  16-102  of this Act. The
20    Commission and the Department shall specifically evaluate the
21    feasibility and cost effectiveness of a  mandatory  renewable
22    energy resource portfolio standard of at least 10% by the end
23    of calendar year 2012, and may require electric utilities and
24    alternative  retail  electric suppliers to introduce evidence
25    as to their ability to meet such a standard. As part of  such
26    investigation,   the  Commission  and  the  Department  shall
27    evaluate and consider the  adequacy  of  existing  generation
28    capacity  and  the availability of renewable energy resources
29    in the State and in the region, the  effect  of  a  mandatory
30    standard  on  the  costs and reliability of electric service,
31    the  continued  availability  of  federal  tax  credits,  the
32    development at both the  State  and  federal  levels  of  the
33    infrastructure  and  rules  and  regulations that promote the
34    development and utilization of  renewable  energy  resources,
                            -8-      LRB093 07959 AMC 19600 a
 1    the  effect  of  a  mandatory  standard on the development of
 2    competition in the provision of such service, the  impact  on
 3    the  environment,  quality  of  life,  and  employment in the
 4    State, and any other factors affecting the  State's  economy.
 5    The  Commission  and  the  Department  shall  report on their
 6    findings to the General Assembly, and shall include  in  such
 7    report recommendations for further legislative changes.
 8        (d)  The  Commission  and  the Department shall work with
 9    other state agencies in  the  Midwest  to  ensure  reciprocal
10    acceptance  of renewable energy credits and certificates from
11    resources located in Illinois  for  purposes  of  such  other
12    state's renewable portfolio standards.
13        (e)  Costs  associated  with the procurement of renewable
14    energy resources pursuant to  this  Section  shall  be  fully
15    recoverable  from  retail  customers to the extent allowed by
16    law and shall not be subject to  any  limitations  stated  in
17    subsection  (i) of Section 16-111 of this Act relating to the
18    recovery of the power and energy cost component  in  tariffed
19    rates. Costs associated with contracts that were prudent when
20    entered  into pursuant to this Section shall not subsequently
21    be denied recovery due to changes in State or federal law.
22        (f)  For purposes  of  this  Section,  "renewable  energy
23    resources"  shall have the meaning as set forth in subsection
24    (f)  of  Section  6-3  of  the   Renewable   Energy,   Energy
25    Efficiency,  and  Coal  Resources Development Law of 1997 and
26    shall  include  renewable  energy  credits  or   certificates
27    associated  with  such  resources.  Provided,  however,  that
28    energy  from landfill gas shall not be counted as a renewable
29    energy resource to the extent that such energy exceeds  27.5%
30    of  an  electric  utility's  or  alternative  retail electric
31    supplier's renewable  energy  resources  portfolio.  Provided
32    further that renewable energy resources shall only be counted
33    for purposes of meeting the standards set forth above if they
34    are  based  on  or relate to production or generation in this
                            -9-      LRB093 07959 AMC 19600 a
 1    State  or  in  an  adjacent  ozone  non-attainment  area   as
 2    designated  by the federal Environmental Protection Agency or
 3    in a state that has entered into a reciprocity agreement with
 4    Illinois as provided in subsection (d) above.

 5        Section 99.  Effective date.  This Act takes effect  upon
 6    becoming law.".