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


Rep. Brandon W. Phelps

Filed: 5/17/2013





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2    AMENDMENT NO. ______. Amend Senate Bill 2266 by replacing
3everything after the enacting clause with the following:
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.



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1    (b) A natural gas public utility shall report annually to
2the Commission the following information, compiled on a
3calendar-year basis, beginning with the first report on April
41, 2014:
5        (1) the number of emergency calls with response times
6    exceeding both 30 minutes and 60 minutes and the number of
7    emergency calls in which the utility stopped the flow of
8    natural gas on the system or appropriately vented natural
9    gas in a time exceeding both 60 minutes and 90 minutes;
10        (2) the number of incidents of damage per thousand gas
11    facility locate requests to the utility's pipeline
12    facilities resulting from utility error and the number of
13    incidents of damage per thousand gas facility locate
14    requests to the utility's pipeline facilities resulting
15    from the fault of third parties;
16        (3) the number of scheduled cathodic protection
17    readings below -0.850 volts;
18        (4) the number of service lines that were inactive for
19    over 3 years and not disconnected from a source of supply;
20        (5) the number of difficult to locate services
21    replaced;
22        (6) the number of remotely-readable cathodic
23    protection devices;
24        (7) the miles of main and numbers of services replaced
25    that were constructed of cast iron, wrought iron, ductile
26    iron, unprotected coated steel, unprotected bare steel,



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1    mechanically coupled steel, copper, Cellulose Acetate
2    Butyrate (CAB) plastic, pre-1973 DuPont Aldyl "A"
3    polyethylene, PVC, or other types of materials identified
4    by a State or federal governmental agency as being prone to
5    leakage;
6        (8) the number of miles of transmission facilities on
7    which maximum allowable operating pressures have been
8    established;
9        (9) the number of miles of transmission facilities
10    equipped with remotely controlled shut-off valve
11    capability; and
12        (10) the value in dollars of contracts in force with
13    minority-owned, female-owned, and qualified
14    service-disabled veteran-owned businesses.
15    (c) Reports required under this Section shall be submitted
16to the Commission by April 1 of each year. Reports shall be
17verified in the same manner as Form 21 ILCC and contain the
18information specified in subsection (b) of this Section for the
19preceding calendar year. The reports shall further identify the
20number of jobs attributable to each of the reporting
21requirements in (b)(1) through (b)(10) of this Section.
22Following the submission of a utility's initial report,
23subsequent reports by the utility shall state year-over-year
24changes in the information being reported. The Commission shall
25post the reports on the public portion of its web site.
26    (d) A natural gas utility shall submit an annual plan



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1specifying its goals for each of the items identified in
2subsection (b) of this Section, and such utility is expected to
3show reasonable and continuing progress in improving its
4performance under the criteria identified in subsection (b) of
5this Section. If the Commission finds, after notice and
6hearing, that a utility has failed to show progressive
7improvement in its performance under those criteria, the
8Commission may require the natural gas utility to submit a
9remediation plan for the criteria identified in subsection (b)
10of this Section designed to improve the utility's performance.
11    (e) The Commission may adopt rules to implement the
12requirements of this Section.
13    (220 ILCS 5/9-220.3 new)
14    Sec. 9-220.3. Natural gas surcharges authorized.
15    (a) Tariff.
16        (1) Pursuant to Section 9-201 of this Act, a natural
17    gas utility serving more than 700,000 customers may file a
18    tariff for a surcharge which adjusts rates and charges to
19    provide for recovery of costs associated with investments
20    in qualifying infrastructure plant, independent of any
21    other matters related to the utility's revenue
22    requirement.
23        (2) Within 30 days after the effective date of this
24    amendatory Act of the 98th General Assembly, the Commission
25    shall adopt emergency rules to implement the provisions of



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1    this amendatory Act of the 98th General Assembly. The
2    utility may file with the Commission tariffs implementing
3    the provisions of this amendatory Act of the 98th General
4    Assembly after the effective date of the emergency rules
5    authorized by subsection (i).
6        (3) The Commission shall issue an order approving, or
7    approving with modification to ensure compliance with this
8    Section, the tariff no later than 120 days after such
9    filing of the tariffs filed pursuant to this Section. The
10    utility shall have 7 days following the date of service of
11    the order to notify the Commission in writing whether it
12    will accept any modifications so identified in the order or
13    whether it has elected not to proceed with the tariff. If
14    the order includes no modifications or if the utility
15    notifies the Commission that it will accept such
16    modifications, the tariff shall take effect on the first
17    day of the calendar year in which the Commission issues the
18    order, subject to petitions for rehearing and appellate
19    procedures. After the tariff takes effect, the utility may,
20    upon 10 days' notice to the Commission, file to withdraw
21    the tariff at any time, and the Commission shall approve
22    such filing without suspension or hearing, subject to a
23    final reconciliation as provided in subsection (e) of this
24    Section.
25        (4) When a natural gas utility withdraws the surcharge
26    tariff, the utility shall not recover any additional



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



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



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1            (A) advanced gas meters in connection with the
2        installation of advanced electric meters pursuant to
3        Sections 16-108.5 and 16-108.6 of this Act; and
4            (B) the communications hardware and software and
5        associated system software that creates a network
6        between advanced gas meters and utility business
7        systems and allows the collection and distribution of
8        gas-related information to customers and other parties
9        in addition to providing information to the utility
10        itself;
11        (5) replacing high-pressure transmission pipelines and
12    associated facilities identified as having a higher risk of
13    leakage or failure or installing or replacing
14    high-pressure transmission pipelines and associated
15    facilities to establish records and maximum allowable
16    operating pressures;
17        (6) replacing difficult to locate mains and service
18    pipes and associated facilities; and
19        (7) replacing or installing transmission and
20    distribution regulator stations, regulators, valves, and
21    associated facilities to establish over-pressure
22    protection.
23    With respect to the installation of the facilities
24identified in paragraph (1) of subsection (b) of this Section,
25the natural gas utility shall determine priorities for such
26installation with consideration of projects either: (i)



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



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



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1    through 2010.
2    (e) Review of investment.
3        (1) The amount of qualifying infrastructure investment
4    shall be shown on an Information Sheet supplemental to the
5    surcharge tariff and filed with the Commission monthly or
6    some other time period at the option of the utility. The
7    Information Sheet shall be accompanied by data showing the
8    calculation of the qualifying infrastructure investment
9    adjustment. Unless otherwise ordered by the Commission,
10    each qualifying infrastructure investment adjustment shown
11    on an Information Sheet shall become effective pursuant to
12    the utility's approved tariffs.
13        (2) For each calendar year in which a surcharge tariff
14    is in effect, the natural gas utility shall file a petition
15    with the Commission to initiate hearings to reconcile
16    amounts billed under each surcharge authorized pursuant to
17    this Section with the actual prudently incurred costs
18    recoverable under this tariff in the preceding year. The
19    petition filed by the natural gas utility shall include
20    testimony and schedules that support the accuracy and the
21    prudence of the qualifying infrastructure investment for
22    the calendar year being reconciled. The petition filed
23    shall also include the number of jobs attributable to the
24    natural gas surcharge tariff as required by rule. The
25    review of the utility's investment shall include
26    identification and review of all plant that was ranked



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1    within the highest risk categories in that utility's most
2    recent Distribution Integrity Management Plan.
3    (f) The rate of return applied shall be the overall rate of
4return authorized by the Commission in the utility's last gas
5rate case.
6    (g) The cumulative amount of increases billed under the
7surcharge, since the utility's most recent delivery service
8rate order, shall not exceed an annual average 4% of the
9utility's delivery base rate revenues, but shall not exceed
105.5% in any given year. On the effective date of new delivery
11base rates, the surcharge shall be reduced to zero with respect
12to qualifying infrastructure investment that is transferred to
13the rate base used to establish the utility's delivery base
14rates, provided that the utility may continue to charge or
15refund any reconciliation adjustment determined pursuant to
16subsection (e) of this Section.
17    (h) If a gas utility obtains a surcharge tariff under this
18Section 9-220.3, then it and its affiliates are excused from
19the rate case filing requirements contained in Sections
209-220(h) and 9-220(h-1). In the event a natural gas utility,
21prior to the effective date of this amendatory Act of the 98th
22General Assembly, made a rate case filing that is still pending
23on the effective date of this amendatory Act of the 98th
24General Assembly, the natural gas utility may, at the time it
25files its surcharge tariff with the Commission, also file a
26notice with the Commission to withdraw its rate case filing.



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1Any affiliate of such natural gas utility may also file to
2withdraw its rate case filing. Upon receipt of such notice, the
3Commission shall dismiss the rate case filing with prejudice
4and such tariffs and the record related thereto shall not be
5the subject of any further hearing, investigation, or
6proceeding of any kind related to rates for gas delivery
7services. Notwithstanding the foregoing, a natural gas utility
8shall not be permitted to withdraw a rate case filing for which
9a proposed order recommending a rate reduction is pending. A
10natural gas utility shall not be permitted to withdraw the gas
11delivery services tariffs that are the subject of Commission
12Docket Nos. 12-0511/12-0512 (cons.). None of the costs incurred
13for the withdrawn rate case are recoverable from ratepayers.
14    (i) The Commission shall promulgate rules and regulations
15to carry out the provisions of this Section under the emergency
16rulemaking provisions set forth in Section 5-45 of the Illinois
17Administrative Procedure Act, and such emergency rules shall be
18effective no later than 30 days after the effective date of
19this amendatory Act of the 98th General Assembly.
20    (j) This Section is repealed December 31, 2023.
21    Section 99. Effective date. This Act takes effect upon
22becoming law.".