Illinois General Assembly - Full Text of SB2266
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Full Text of SB2266  98th General Assembly



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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 adding
5Sections 5-111 and 9-220.3 as follows:
6    (220 ILCS 5/5-111 new)
7    Sec. 5-111. Natural gas performance reporting.
8    (a) The General Assembly recognizes that for well over a
9century Illinois residents and businesses have relied on the
10natural gas utility system. The General Assembly finds that in
11order for a natural gas utility to provide safe, reliable, and
12affordable service to the State's current and future utility
13customers, a utility must refurbish, rebuild, modernize, and
14expand its infrastructure and adequately train its workforce on
15appropriate operations procedures and policies designed to
16effectively maintain its infrastructure.
17    (b) A natural gas public utility shall report annually to
18the Commission the following information, compiled on a
19calendar-year basis, beginning with the first report on April
201, 2014:
21        (1) the number of emergency calls with response times
22    exceeding both 30 minutes and 60 minutes and the number of
23    emergency calls in which the utility stopped the flow of



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1    natural gas on the system or appropriately vented natural
2    gas in a time exceeding both 60 minutes and 90 minutes;
3        (2) the number of incidents of damage per thousand gas
4    facility locate requests to the utility's pipeline
5    facilities resulting from utility error and the number of
6    incidents of damage per thousand gas facility locate
7    requests to the utility's pipeline facilities resulting
8    from the fault of third parties;
9        (3) the number of scheduled cathodic protection
10    readings below -0.850 volts;
11        (4) the number of service lines that were inactive for
12    over 3 years and not disconnected from a source of supply;
13        (5) the number of difficult to locate services
14    replaced;
15        (6) the number of remotely-readable cathodic
16    protection devices;
17        (7) the miles of main and numbers of services replaced
18    that were constructed of cast iron, wrought iron, ductile
19    iron, unprotected coated steel, unprotected bare steel,
20    mechanically coupled steel, copper, Cellulose Acetate
21    Butyrate (CAB) plastic, pre-1973 DuPont Aldyl "A"
22    polyethylene, PVC, or other types of materials identified
23    by a State or federal governmental agency as being prone to
24    leakage;
25        (8) the number of miles of transmission facilities on
26    which maximum allowable operating pressures have been



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1    established;
2        (9) the number of miles of transmission facilities
3    equipped with remotely controlled shut-off valve
4    capability; and
5        (10) the value in dollars of contracts in force with
6    minority-owned, female-owned, and qualified
7    service-disabled veteran-owned businesses.
8    (c) Reports required under this Section shall be submitted
9to the Commission by April 1 of each year. Reports shall be
10verified in the same manner as Form 21 ILCC and contain the
11information specified in subsection (b) of this Section for the
12preceding calendar year. The reports shall further identify the
13number of jobs attributable to each of the reporting
14requirements in (b)(1) through (b)(10) of this Section.
15Following the submission of a utility's initial report,
16subsequent reports by the utility shall state year-over-year
17changes in the information being reported. The Commission shall
18post the reports on the public portion of its web site.
19    (d) A natural gas utility shall submit an annual plan
20specifying its goals for each of the items identified in
21subsection (b) of this Section, and such utility is expected to
22show reasonable and continuing progress in improving its
23performance under the criteria identified in subsection (b) of
24this Section. If the Commission finds, after notice and
25hearing, that a utility has failed to show progressive
26improvement in its performance under those criteria, the



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1Commission may require the natural gas utility to submit a
2remediation plan for the criteria identified in subsection (b)
3of this Section designed to improve the utility's performance.
4    (e) The Commission may adopt rules to implement the
5requirements of this Section.
6    (f) This Section does not apply to a gas utility that on
7January 1, 2013 provided gas service to fewer than 100,000
8customers in Illinois.
9    (220 ILCS 5/9-220.3 new)
10    Sec. 9-220.3. Natural gas surcharges authorized.
11    (a) Tariff.
12        (1) Pursuant to Section 9-201 of this Act, a natural
13    gas utility serving more than 700,000 customers may file a
14    tariff for a surcharge which adjusts rates and charges to
15    provide for recovery of costs associated with investments
16    in qualifying infrastructure plant, independent of any
17    other matters related to the utility's revenue
18    requirement.
19        (2) Within 30 days after the effective date of this
20    amendatory Act of the 98th General Assembly, the Commission
21    shall adopt emergency rules to implement the provisions of
22    this amendatory Act of the 98th General Assembly. The
23    utility may file with the Commission tariffs implementing
24    the provisions of this amendatory Act of the 98th General
25    Assembly after the effective date of the emergency rules



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1    authorized by subsection (i).
2        (3) The Commission shall issue an order approving, or
3    approving with modification to ensure compliance with this
4    Section, the tariff no later than 120 days after such
5    filing of the tariffs filed pursuant to this Section. The
6    utility shall have 7 days following the date of service of
7    the order to notify the Commission in writing whether it
8    will accept any modifications so identified in the order or
9    whether it has elected not to proceed with the tariff. If
10    the order includes no modifications or if the utility
11    notifies the Commission that it will accept such
12    modifications, the tariff shall take effect on the first
13    day of the calendar year in which the Commission issues the
14    order, subject to petitions for rehearing and appellate
15    procedures. After the tariff takes effect, the utility may,
16    upon 10 days' notice to the Commission, file to withdraw
17    the tariff at any time, and the Commission shall approve
18    such filing without suspension or hearing, subject to a
19    final reconciliation as provided in subsection (e) of this
20    Section.
21        (4) When a natural gas utility withdraws the surcharge
22    tariff, the utility shall not recover any additional
23    charges through the surcharge approved pursuant to this
24    Section, subject to the resolution of the final
25    reconciliation pursuant to subsection (e) of this Section.
26    The utility's qualifying infrastructure investment net of



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1    accumulated depreciation may be transferred to the natural
2    gas utility's rate base in the utility's next general rate
3    case. The utility's delivery base rates in effect upon
4    withdrawal of the surcharge tariff shall not be adjusted at
5    the time the surcharge tariff is withdrawn.
6        (5) A natural gas utility that is subject to its
7    delivery base rates being fixed at their current rates
8    pursuant to a Commission order entered in Docket No.
9    11-0046, notwithstanding the effective date of its tariff
10    authorized pursuant to this Section, shall reflect in a
11    tariff surcharge only those projects placed in service
12    after the fixed rate period of the merger agreement has
13    expired by its terms.
14    (b) For purposes of this Section, "qualifying
15infrastructure plant" includes only plant additions placed in
16service not reflected in the rate base used to establish the
17utility's delivery base rates. "Costs associated with
18investments in qualifying infrastructure plant" shall include
19a return on qualifying infrastructure plant and recovery of
20depreciation and amortization expense on qualifying
21infrastructure plant, net of the depreciation included in the
22utility's base rates on any plant retired in conjunction with
23the installation of the qualifying infrastructure plant.
24Collectively the "qualifying infrastructure plant" and "costs
25associated with investments in qualifying infrastructure
26plant" are referred to as the "qualifying infrastructure



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1investment" and that are related to one or more of the
3        (1) the installation of facilities to retire and
4    replace underground natural gas facilities, including
5    facilities appurtenant to facilities constructed of those
6    materials such as meters, regulators, and services, and
7    that are constructed of cast iron, wrought iron, ductile
8    iron, unprotected coated steel, unprotected bare steel,
9    mechanically coupled steel, copper, Cellulose Acetate
10    Butyrate (CAB) plastic, pre-1973 DuPont Aldyl "A"
11    polyethylene, PVC, or other types of materials identified
12    by a State or federal governmental agency as being prone to
13    leakage;
14        (2) the relocation of meters from inside customers'
15    facilities to outside;
16        (3) the upgrading of the gas distribution system from a
17    low pressure to a medium pressure system, including
18    installation of high-pressure facilities to support the
19    upgrade;
20        (4) modernization investments by a combination
21    utility, as defined in subsection (b) of Section 16-108.5
22    of this Act, to install:
23            (A) advanced gas meters in connection with the
24        installation of advanced electric meters pursuant to
25        Sections 16-108.5 and 16-108.6 of this Act; and
26            (B) the communications hardware and software and



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1        associated system software that creates a network
2        between advanced gas meters and utility business
3        systems and allows the collection and distribution of
4        gas-related information to customers and other parties
5        in addition to providing information to the utility
6        itself;
7        (5) replacing high-pressure transmission pipelines and
8    associated facilities identified as having a higher risk of
9    leakage or failure or installing or replacing
10    high-pressure transmission pipelines and associated
11    facilities to establish records and maximum allowable
12    operating pressures;
13        (6) replacing difficult to locate mains and service
14    pipes and associated facilities; and
15        (7) replacing or installing transmission and
16    distribution regulator stations, regulators, valves, and
17    associated facilities to establish over-pressure
18    protection.
19    With respect to the installation of the facilities
20identified in paragraph (1) of subsection (b) of this Section,
21the natural gas utility shall determine priorities for such
22installation with consideration of projects either: (i)
23integral to a general government public facilities improvement
24program or (ii) ranked in the highest risk categories in the
25utility's most recent Distribution Integrity Management Plan
26where removal or replacement is the remedial measure.



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1    (c) Qualifying infrastructure investment, defined in
2subsection (b) of this Section, recoverable through a tariff
3authorized by subsection (a) of this Section, shall not include
4costs or expenses incurred in the ordinary course of business
5for the ongoing or routine operations of the utility,
6including, but not limited to:
7        (1) operating and maintenance costs; and
8        (2) costs of facilities that are revenue-producing,
9    which means facilities that are constructed or installed
10    for the purpose of serving new customers.
11    (d) Gas utility commitments. A natural gas utility that has
12in effect a natural gas surcharge tariff pursuant to this
13Section shall:
14        (1) recognize that the General Assembly identifies
15    improved public safety and reliability of natural gas
16    facilities as the cornerstone upon which this Section is
17    designed, and qualifying projects should be encouraged,
18    selected, and prioritized based on these factors; and
19        (2) provide information to the Commission as requested
20    to demonstrate that (i) the projects included in the tariff
21    are indeed qualifying projects and (ii) the projects are
22    selected and prioritized taking into account improved
23    public safety and reliability.
24        (3) The amount of qualifying infrastructure investment
25    eligible for recovery under the tariff in the applicable
26    calendar year is limited to the lesser of (i) the actual



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1    qualifying infrastructure plant placed in service in the
2    applicable calendar year and (ii) the difference by which
3    total plant additions in the applicable calendar year
4    exceed the baseline amount, and subject to the limitation
5    in subsection (g) of this Section. A natural gas utility
6    can recover the costs of qualifying infrastructure
7    investments through an approved surcharge tariff from the
8    beginning of each calendar year subject to the
9    reconciliation initiated under paragraph (2) of subsection
10    (e) of this Section, during which the Commission may make
11    adjustments to ensure that the limits defined in this
12    paragraph are not exceeded. Further, if total plant
13    additions in a calendar year do not exceed the baseline
14    amount in the applicable calendar year, the Commission,
15    during the reconciliation initiated under paragraph (2) of
16    subsection (e) of this Section for the applicable calendar
17    year, shall adjust the amount of qualifying infrastructure
18    investment eligible for recovery under the tariff to zero.
19        (4) For purposes of this Section, "baseline amount"
20    means an amount equal to the utility's average of total
21    depreciation expense, as reported on page 336, column (b)
22    of the utility's ILCC Form 21, for the calendar years 2006
23    through 2010.
24    (e) Review of investment.
25        (1) The amount of qualifying infrastructure investment
26    shall be shown on an Information Sheet supplemental to the



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1    surcharge tariff and filed with the Commission monthly or
2    some other time period at the option of the utility. The
3    Information Sheet shall be accompanied by data showing the
4    calculation of the qualifying infrastructure investment
5    adjustment. Unless otherwise ordered by the Commission,
6    each qualifying infrastructure investment adjustment shown
7    on an Information Sheet shall become effective pursuant to
8    the utility's approved tariffs.
9        (2) For each calendar year in which a surcharge tariff
10    is in effect, the natural gas utility shall file a petition
11    with the Commission to initiate hearings to reconcile
12    amounts billed under each surcharge authorized pursuant to
13    this Section with the actual prudently incurred costs
14    recoverable under this tariff in the preceding year. The
15    petition filed by the natural gas utility shall include
16    testimony and schedules that support the accuracy and the
17    prudence of the qualifying infrastructure investment for
18    the calendar year being reconciled. The petition filed
19    shall also include the number of jobs attributable to the
20    natural gas surcharge tariff as required by rule. The
21    review of the utility's investment shall include
22    identification and review of all plant that was ranked
23    within the highest risk categories in that utility's most
24    recent Distribution Integrity Management Plan.
25    (f) The rate of return applied shall be the overall rate of
26return authorized by the Commission in the utility's last gas



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1rate case.
2    (g) The cumulative amount of increases billed under the
3surcharge, since the utility's most recent delivery service
4rate order, shall not exceed an annual average 4% of the
5utility's delivery base rate revenues, but shall not exceed
65.5% in any given year. On the effective date of new delivery
7base rates, the surcharge shall be reduced to zero with respect
8to qualifying infrastructure investment that is transferred to
9the rate base used to establish the utility's delivery base
10rates, provided that the utility may continue to charge or
11refund any reconciliation adjustment determined pursuant to
12subsection (e) of this Section.
13    (h) If a gas utility obtains a surcharge tariff under this
14Section 9-220.3, then it and its affiliates are excused from
15the rate case filing requirements contained in Sections
169-220(h) and 9-220(h-1). In the event a natural gas utility,
17prior to the effective date of this amendatory Act of the 98th
18General Assembly, made a rate case filing that is still pending
19on the effective date of this amendatory Act of the 98th
20General Assembly, the natural gas utility may, at the time it
21files its surcharge tariff with the Commission, also file a
22notice with the Commission to withdraw its rate case filing.
23Any affiliate of such natural gas utility may also file to
24withdraw its rate case filing. Upon receipt of such notice, the
25Commission shall dismiss the rate case filing with prejudice
26and such tariffs and the record related thereto shall not be



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1the subject of any further hearing, investigation, or
2proceeding of any kind related to rates for gas delivery
3services. Notwithstanding the foregoing, a natural gas utility
4shall not be permitted to withdraw a rate case filing for which
5a proposed order recommending a rate reduction is pending. A
6natural gas utility shall not be permitted to withdraw the gas
7delivery services tariffs that are the subject of Commission
8Docket Nos. 12-0511/12-0512 (cons.). None of the costs incurred
9for the withdrawn rate case are recoverable from ratepayers.
10    (i) The Commission shall promulgate rules and regulations
11to carry out the provisions of this Section under the emergency
12rulemaking provisions set forth in Section 5-45 of the Illinois
13Administrative Procedure Act, and such emergency rules shall be
14effective no later than 30 days after the effective date of
15this amendatory Act of the 98th General Assembly.
16    (j) This Section is repealed December 31, 2023.
17    Section 99. Effective date. This Act takes effect upon
18becoming law.