093_SB0025ham001

 










                                     LRB093 03173 AMC 20195 a

 1                     AMENDMENT TO SENATE BILL 25

 2        AMENDMENT NO.     .  Amend Senate Bill  25  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 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 03173 AMC 20195 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 03173 AMC 20195 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 03173 AMC 20195 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 further have
24    the  authority, consistent with State jurisdiction, to review
25    and approve in such proceeding any purchased power  agreement
26    related  to the reorganization agreement that is entered into
27    by the reorganized utility,  or  by  a  public  utility  that
28    becomes  affiliated  with  such public utility as a result of
29    the reorganization, and may condition  its  approval  of  any
30    such  agreement  in  such  manner as it may deem necessary to
31    safeguard the public interest. Any approval of such agreement
32    does not constitute approval of payments thereunder  for  the
33    purpose  of  computing  expense  of  operation  in  any  rate
34    proceeding.  If  the  reorganization  involves  the  sale  or
 
                            -5-      LRB093 03173 AMC 20195 a
 1    transfer  of operating assets, then the Commission shall also
 2    in such proceeding have the  authority  to  make  such  other
 3    determinations  and approvals as may be required to implement
 4    the reorganization and provide  for  an  orderly  transition,
 5    including,  but not limited to, providing for the adoption by
 6    the reorganized public utility of existing rates, terms,  and
 7    conditions  (including those filed pursuant to Section 16-108
 8    or Article XVIII of this Act), the abandonment,  transfer  or
 9    granting  of  certificates, or the assignment of service area
10    agreements. Any application filed pursuant to this subsection
11    (g) must be filed no later than 3 months after the  effective
12    date of this amendatory Act of the 93rd General Assembly.
13    (Source: P.A. 90-561, eff. 12-16-97.)

14        Section  99.  Effective date.  This Act takes effect upon
15    becoming law.".