Full Text of SB1083 102nd General Assembly
SB1083sam001 102ND GENERAL ASSEMBLY | Sen. Linda Holmes Filed: 4/8/2021
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| 1 | | AMENDMENT TO SENATE BILL 1083
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1083 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Public Utilities Act is amended by adding | 5 | | Section 9-254 as follows: | 6 | | (220 ILCS 5/9-254 new) | 7 | | Sec. 9-254. Greenhouse Gas Plan; multi-year rate | 8 | | structure, tariff, and protocols; annual reconciliations. | 9 | | (a) Participating gas utility commitments. | 10 | | (1) For purposes of this Section, "participating gas | 11 | | utility" means a public utility that provides natural gas | 12 | | distribution services to more than 150,000 retail | 13 | | customers in Illinois that voluntarily elects and commits | 14 | | to develop and implement a Greenhouse Gas Plan that | 15 | | significantly reduces, offsets, or avoids greenhouse gas | 16 | | emissions in the State of Illinois attributable to the |
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| 1 | | utility's operations and customers' end use of gas | 2 | | delivered by the utility. A participating gas utility | 3 | | shall commit, at the time it elects to participate, that, | 4 | | by 2030, it will: (i) lower the overall carbon intensity | 5 | | of the fuel supply provided to its customers as set forth | 6 | | in subparagraph (A) of paragraph (2) of this subsection; | 7 | | (ii) make qualified investments as described in | 8 | | subparagraph (B) of paragraph (2) of this subsection | 9 | | designed to, among other things, measure, reduce, | 10 | | displace, or offset methane and other greenhouse gas | 11 | | emissions from utility operations; and (iii) implement and | 12 | | deploy customer programs and make qualified investments | 13 | | designed to reduce or offset greenhouse gas emissions in | 14 | | the State of Illinois as set forth in subparagraph (C) of | 15 | | paragraph (2) of this subsection. A participating gas | 16 | | utility is entitled to recover the expenditures made under | 17 | | the Greenhouse Gas Plan through its regulated rates, | 18 | | including, but not limited to, through the multi-year | 19 | | performance-based rate process set forth in subsection (b) | 20 | | of this Section. | 21 | | (2) Each participating gas utility shall implement a | 22 | | Greenhouse Gas Plan that contains the following | 23 | | commitments to lower the overall carbon intensity of the | 24 | | fuel supply provided to its customers and reducing, | 25 | | offsetting, or avoiding greenhouse gas emissions in the | 26 | | State of Illinois attributable to the utility's operations |
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| 1 | | and customers' end use by 2030: | 2 | | (A) A participating gas utility shall commit to | 3 | | lowering the overall carbon intensity of the fuel | 4 | | supply delivered to its customers by incorporating | 5 | | sustainable gas into its gas supply portfolio by not | 6 | | less than 2% of the natural gas utility's total gas | 7 | | supply portfolio (by volume) by the year 2030 through | 8 | | activities that may include, but are not limited to: | 9 | | (i) contracting with a producer of sustainable | 10 | | gas to purchase gas supply from a sustainable gas | 11 | | facility; | 12 | | (ii) purchasing gas produced from a | 13 | | sustainable gas facility, whether or not the gas | 14 | | has environmental commodities; | 15 | | (iii) incorporating the gas produced from a | 16 | | sustainable gas facility into the supply portfolio | 17 | | of the natural gas utility; and | 18 | | (iv) selling the gas produced from a | 19 | | sustainable gas facility directly to the customers | 20 | | of the natural gas utility; | 21 | | (B) The calculation of the share of the supply | 22 | | portfolio shall not include the volume of gas of any | 23 | | type delivered but not sold by the natural gas | 24 | | utility. For purposes of this subsection, sustainable | 25 | | gas shall include the following: | 26 | | (i) renewable natural gas, which includes any |
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| 1 | | of the following products processed to meet | 2 | | applicable utility pipeline quality standards or | 3 | | transportation fuel grade requirements that it may | 4 | | blend with, or substitute for, geologic natural | 5 | | gas: | 6 | | (1) biogas, which is a mixture of carbon | 7 | | dioxide and hydrocarbons, primarily methane | 8 | | gas, released from the biological | 9 | | decomposition of organic materials, including, | 10 | | without limitation, biomass, manure, plant | 11 | | material, sewage, and landfill waste; | 12 | | (2) hydrogen gas derived from renewable | 13 | | energy sources; and | 14 | | (3) methane gas derived from any | 15 | | combination of: biogas; hydrogen gas or carbon | 16 | | oxides derived from renewable energy sources; | 17 | | or carbon dioxide; | 18 | | (ii) other low-carbon fuels, which include: | 19 | | (1) hydrogen or other fuels derived from | 20 | | zero-carbon or low-carbon energy sources or | 21 | | from other sources where the CO 2 produced is | 22 | | capture and stored; | 23 | | (2) methane gas derived from hydrogen or | 24 | | other fuels derived from zero-carbon or | 25 | | low-carbon energy sources or from other | 26 | | sources where the CO 2 produced is capture and |
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| 1 | | stored; and | 2 | | (3) any additional fuel that has a lower | 3 | | lifecycle carbon emissions than traditionally | 4 | | derived geological natural gas; and | 5 | | (iii) next generation natural gas, which is a | 6 | | geological natural gas supplied from a producer | 7 | | who has certified contractually or through a third | 8 | | party to a lower methane intensity from production | 9 | | and gathering operations that results in a lower | 10 | | lifecycle carbon dioxide equivalent emissions than | 11 | | an established baseline for geologic natural gas | 12 | | or otherwise has certified that the gas has been | 13 | | produced through operational practices to lower | 14 | | emissions. | 15 | | Nothing in this Section shall be interpreted as | 16 | | preventing the gas utility from purchasing sustainable | 17 | | fuels without environmental commodities, although such | 18 | | purchases shall not be applicable to meeting the goals | 19 | | set forth in this Section if environmental commodities | 20 | | do apply to such fuels. As used in this paragraph, | 21 | | "sustainable fuels" includes renewable natural gas and | 22 | | other low-carbon fuels. | 23 | | (C) A participating gas utility shall commit to | 24 | | making qualified investments in gas distribution | 25 | | system improvements designed to, among other things, | 26 | | support the measurement, reduction, displacement, or |
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| 1 | | offset of greenhouse gas emissions from utility | 2 | | operations. The participating gas utility shall, | 3 | | except as provided in this subsection (a), make these | 4 | | qualified investments over a 9-year period beginning | 5 | | no later than 180 days after a participating gas | 6 | | utility files a multi-year performance-based rate | 7 | | tariff pursuant to subsection (b) of this Section or | 8 | | beginning no later than January 1, 2022. As used in | 9 | | this subparagraph (C), "qualified investments" | 10 | | includes, but is not limited to: | 11 | | (i) investments in pipeline replacement, | 12 | | meter, and other infrastructure modernization | 13 | | targeted at lowering system leakage; | 14 | | (ii) improvements in nonemergency operational | 15 | | programs for pipe maintenance to reduce venting; | 16 | | (iii) advanced leak detection, response, and | 17 | | repair; | 18 | | (iv) investments that improve direct | 19 | | measurement of emissions from operations; | 20 | | (v) other operational investments targeted at | 21 | | developing sources of sustainable fuels in the | 22 | | State of Illinois for the purpose of providing | 23 | | environmental benefits and diversifying the supply | 24 | | of energy in the State or otherwise targeted at | 25 | | reducing greenhouse gas emissions from utility | 26 | | operations, including, without limitation, |
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| 1 | | investments in research and development in | 2 | | emerging technologies; | 3 | | (vi) investments in sustainable fuels | 4 | | facilities, including, but not limited to, owning, | 5 | | in whole or in part, and operating a sustainable | 6 | | fuels facility connected to the distribution | 7 | | system where the utility retains all or a majority | 8 | | of the environmental commodities unless otherwise | 9 | | determined by the natural gas utility; | 10 | | (vii) extending the transmission or | 11 | | distribution system of the natural gas utility to | 12 | | interconnect with a sustainable fuels facility | 13 | | where the utility retains all or a majority of the | 14 | | environmental commodities unless otherwise | 15 | | determined by the natural gas utility unless | 16 | | otherwise determined by the natural gas utility; | 17 | | (viii) sustainable fuels investments that | 18 | | reduce or avoid greenhouse gas emissions in the | 19 | | State of Illinois, where the utility retains all | 20 | | or a majority of the environmental commodities | 21 | | unless otherwise determined by the natural gas | 22 | | utility; | 23 | | (ix) investments that reduce or offset methane | 24 | | and other greenhouse gas emissions from utility | 25 | | operations that the Commission finds are prudent | 26 | | and reasonable; |
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| 1 | | (x) investment in natural gas, compressed | 2 | | natural gas, and hydrogen infrastructure and | 3 | | vehicles to convert utility fleet vehicles and | 4 | | support customers looking to convert vehicles from | 5 | | gasoline and diesel fuel, including installation | 6 | | of vehicle refueling stations accessible to the | 7 | | public at each regional distribution center with | 8 | | both rapid fill and overnight fill stations; | 9 | | (xi) investment in infrastructure and vehicles | 10 | | to convert certain fleet vehicles to electric | 11 | | vehicles; and | 12 | | (xii) other prudently incurred investments | 13 | | made by the participating natural gas utility that | 14 | | contribute to the participating natural gas | 15 | | utility meeting a goal to be net-zero methane | 16 | | emissions by 2030. | 17 | | (D) A participating gas public utility commits to | 18 | | implement and deploy customer programs and make | 19 | | qualified investments designed to reduce or offset | 20 | | greenhouse gas emissions in the State of Illinois in | 21 | | the residential, commercial, and other sectors. | 22 | | Examples of these programs and qualified investments | 23 | | may include, but are not limited to: | 24 | | (i) investment in natural gas energy | 25 | | efficiency programs in addition to programs set | 26 | | forth in Section 8-104 of this Act with increased |
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| 1 | | focus on greenhouse gas reductions and support for | 2 | | low-income customers; | 3 | | (ii) programs to offer customers opportunities | 4 | | to reduce their carbon footprint, including, but | 5 | | not limited to, voluntary customer programs that | 6 | | provide carbon offsets or purchase of renewable | 7 | | natural gas; and | 8 | | (iii) Investments into research and | 9 | | development and emerging technologies aimed at | 10 | | operational safety, greenhouse gas emission | 11 | | reductions, and energy savings, including energy | 12 | | and appliance efficiency, carbon capture, and use | 13 | | of future fuels like hydrogen as a substitute for | 14 | | or blending with geologic natural gas, or as a | 15 | | source for substitute natural gas. | 16 | | (3) As part of the filing for the first triennial base | 17 | | rate case under the participating utility's multi-year | 18 | | rate tariff filed under subsection (b) of this Section, a | 19 | | participating utility shall submit to the Commission its | 20 | | Greenhouse Gas Plan, including a scope, schedule, and | 21 | | investment plan designed to satisfy commitments made | 22 | | pursuant to paragraph (2) of this subsection for the | 23 | | 9-year period following the filing of the plan. The plan | 24 | | need not allocate the work equally over the respective | 25 | | periods, but should allocate material increments | 26 | | throughout such periods commensurate with the work to be |
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| 1 | | undertaken. Consistent with subsection (b) of this | 2 | | Section, the Greenhouse Gas Plan shall be updated with | 3 | | each successive triennial base rate case filing through | 4 | | the conclusion of the Greenhouse Gas Plan. | 5 | | (4) For purposes of meeting the goals set forth in | 6 | | this Section, sustainable gas that is purchased by the | 7 | | natural gas utility or if the natural gas utility makes | 8 | | investments in a sustainable gas facility, the gas must, | 9 | | if applicable, include environmental commodities | 10 | | associated with the gas. In addition, if the natural gas | 11 | | utility makes investments in a sustainable gas facility, | 12 | | the natural gas utility may retain all or a majority of the | 13 | | environmental commodities, unless otherwise determined by | 14 | | the natural gas utility. For purposes of this subsection, | 15 | | "environmental commodities" means non-tangible energy | 16 | | credits, and any and all current and future rights, | 17 | | credits, benefits, air quality credits, methane capture | 18 | | credits, renewable energy credits, emission reductions, | 19 | | offsets, and allowances, howsoever referred to, associated | 20 | | with the capture, production, generation, transportation, | 21 | | use, and environmental characteristics of biogas and | 22 | | sustainable gas, the displacement of fossil-based natural | 23 | | gas for any use (including, without limitation, thermal | 24 | | use, electricity generation, and use as a transportation | 25 | | fuel), the reduction of air pollutants or the avoidance of | 26 | | the emission of any gas, chemical, or other substance, |
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| 1 | | including, without limitation, any similar commodities, | 2 | | whether arising out of international, federal, state, or | 3 | | local laws or regulations. | 4 | | (5) If the Commission finds that a participating | 5 | | utility is no longer eligible to update the multi-year | 6 | | rate pursuant to subsection (b) of this Section, or the | 7 | | multi-year rate tariff is otherwise terminated, then the | 8 | | participating utility's commitments and obligations under | 9 | | this subsection shall immediately terminate. | 10 | | (6) In meeting the obligations of this subsection, to | 11 | | the extent feasible and consistent with State and federal | 12 | | law, the investments under the Greenhouse Gas Plan should | 13 | | provide employment opportunities for all segments of the | 14 | | population and workforce, including minority-owned and | 15 | | women-owned business enterprises, and shall not, | 16 | | consistent with State and federal law, discriminate based | 17 | | on race or socioeconomic status. | 18 | | (7) Nothing in this Section shall prohibit the | 19 | | Commission from investigating the prudence and | 20 | | reasonableness of the expenditures made under the | 21 | | Greenhouse Gas Plan submitted in accordance with this | 22 | | Section during the triennial base rate cases or the annual | 23 | | reconciliations required by subsection (c) of this Section | 24 | | and shall, as part of the investigation, determine whether | 25 | | the utility's actual costs under the program are prudent | 26 | | and reasonable. |
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| 1 | | (b) Multi-year rate structure, tariff, and protocols. | 2 | | (1) Notwithstanding any of the ratemaking provisions | 3 | | of this Article that are deemed to require rate of return | 4 | | regulation, a participating gas utility that meets the | 5 | | requirements of subsection (a) of this Section may | 6 | | implement a multi-year rate tariff, structure, and | 7 | | protocols approved by the Commission in order to establish | 8 | | just and reasonable rates for natural gas delivery | 9 | | services on a multi-year cycle. The multi-year rate tariff | 10 | | shall specify the cost components that form the basis of | 11 | | the rates to be charged to customers with sufficient | 12 | | specificity to operate in a standardized manner and be | 13 | | reconciled annually with transparent information that | 14 | | reflects the utility's actual costs to be recovered during | 15 | | each applicable rate year, which is the period beginning | 16 | | with the first billing day of January and extending | 17 | | through the last billing day of the following December. | 18 | | (2) The multi-year rate tariff, structure, and | 19 | | protocols approved by the Commission shall: | 20 | | (A) Provide for the recovery of the gas utility's | 21 | | actual costs of gas delivery services that are | 22 | | prudently incurred and reasonable in amount consistent | 23 | | with Commission practice and law. The sole fact that a | 24 | | cost differs from that incurred in a prior calendar | 25 | | year or that an investment is different from that made | 26 | | in a prior calendar year shall not imply the |
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| 1 | | imprudence or unreasonableness of that cost or | 2 | | investment. | 3 | | (B) Require a participating gas utility to file a | 4 | | base rate case every 3 years, which shall be known as | 5 | | the triennial base rate case, that contains a detailed | 6 | | investment plan for the 3 calendar years beginning the | 7 | | January 1 after the filing. The investment plan shall | 8 | | include the requisite information and detail, | 9 | | consistent with the Commission's future test year | 10 | | rules to establish 3 forward test years for the gas | 11 | | utility. | 12 | | (C) Calculate revenue requirements for the | 13 | | calendar year following each base rate case, and, in | 14 | | addition, the second and third years following the | 15 | | base rate case. | 16 | | (D) Provide that if the participating gas | 17 | | utility's earned rate of return on common equity | 18 | | related to the provision of natural gas delivery | 19 | | services for the prior rate year (calculated using | 20 | | costs of debt and actual year-end capital structure | 21 | | approved by the Commission in its most recent | 22 | | triennial base rate case subject to the Commission | 23 | | reviewing for reasonableness and prudence and | 24 | | difference between the actual capital structure and | 25 | | the capital structure approved in the previous | 26 | | triennial base rate case) consistent with this |
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| 1 | | Section, in accordance with Commission rules and | 2 | | orders, including, but not limited to, adjustments for | 3 | | goodwill, and after any Commission-ordered | 4 | | disallowances and taxes, is higher than the rate of | 5 | | return on common equity calculated pursuant to | 6 | | subparagraph (G) of paragraph (2) of this subsection | 7 | | (b) for that same rate year, then the participating | 8 | | utility shall apply a credit through the annual | 9 | | reconciliation process described in subsection (c) of | 10 | | this Section that reflects an amount equal to the | 11 | | value of that portion of the earned rate of return on | 12 | | common equity that is higher than the rate of return on | 13 | | common equity calculated pursuant to subparagraph (G) | 14 | | of paragraph (2) of this subsection (b) for the prior | 15 | | rate year, adjusted for taxes. If the participating | 16 | | utility's earned rate of return on common equity | 17 | | related to the provision of natural gas delivery | 18 | | services for the prior rate year (calculated using | 19 | | costs and capital structure approved by the Commission | 20 | | as provided in subparagraphs (F) and (G) of paragraph | 21 | | (2) of this subsection, consistent with this Section | 22 | | in accordance with Commission rules and orders, | 23 | | including, but not limited to, adjustments for | 24 | | goodwill, and after any Commission-ordered | 25 | | disallowances and taxes) is less than the return on | 26 | | common equity calculated pursuant to subparagraph (G) |
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| 1 | | of paragraph (2) of this subsection (b), then the | 2 | | participating utility shall apply a charge through the | 3 | | annual reconciliation process described in subsection | 4 | | (c) of this Section that reflects an amount equal to | 5 | | the value of that portion of the earned rate of return | 6 | | on common equity that is less than the rate of return | 7 | | on common equity calculated pursuant to subparagraph | 8 | | (G) of paragraph (2) of this subsection (b) for the | 9 | | prior rate year, adjusted for taxes. | 10 | | (E) Provide for an annual reconciliation, as | 11 | | described in subsection (c) of this Section, with | 12 | | interest, of the revenue requirement reflected in | 13 | | rates for each calendar year, beginning with the first | 14 | | calendar year after the utility files its multi-year | 15 | | rate tariff pursuant to subsection (b) of this | 16 | | Section, with what the revenue requirement would have | 17 | | been had the actual cost information for the | 18 | | applicable calendar year been available at the filing | 19 | | date. | 20 | | (F) Reflect the utility's actual capital structure | 21 | | for the applicable calendar years, excluding goodwill, | 22 | | subject to a determination of prudence and | 23 | | reasonableness consistent with Commission practice and | 24 | | law. | 25 | | (G) Reflect the gas utility's cost of equity, | 26 | | which shall be determined in each triennial base rate |
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| 1 | | case and shall be applied to calculate the | 2 | | participating gas utility's revenue requirement for | 3 | | each of the 3 test years filed with the base rate case. | 4 | | (H) Follow the general protocols and procedures of | 5 | | the ratemaking provisions of this Article, including | 6 | | tariff filing, timing, and suspension requirements. | 7 | | Filing requirements, discovery, and proceeding | 8 | | protocols shall be similar to traditional rate | 9 | | proceedings under this Article, subject to Commission | 10 | | rulemakings to set forth the details of the | 11 | | proceedings. | 12 | | The inputs to the rate for each applicable rate year | 13 | | shall reflect the year-end rate base based on projected | 14 | | data for that rate year consistent, insofar as applicable, | 15 | | with the Commission's existing future test year rules or | 16 | | the rules adopted for this Section, and shall include | 17 | | projected plant additions and correspondingly updated | 18 | | depreciation reserve and expense for the calendar year in | 19 | | which the inputs are filed. | 20 | | The multi-year rate shall be applicable to all natural | 21 | | gas delivery services customers. | 22 | | (3) A participating gas utility shall initiate the | 23 | | multi-year rate process by filing with the Commission its | 24 | | proposed multi-year rate tariff, structure, and protocols, | 25 | | and initial rates for the first 3 years. The Commission | 26 | | shall initiate a docket to review the filing and enter an |
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| 1 | | order approving, or approving as modified, the multi-year | 2 | | rate tariff, structure, and protocols, the initial rates, | 3 | | and any conforming revisions to other tariffs as just and | 4 | | reasonable within 330 days after the date on which the | 5 | | tariff was filed. The Commission's review shall be based | 6 | | on the same evidentiary standards, including, but not | 7 | | limited to, those concerning the prudence and | 8 | | reasonableness of the costs incurred by the utility, the | 9 | | Commission applies in a hearing to review a filing for a | 10 | | general increase in rates under this Article. The | 11 | | multi-year rate tariff, structure, and protocols, initial | 12 | | rates, and any conforming revisions to other tariffs shall | 13 | | take effect no later than 30 days after the Commission's | 14 | | order approving them. | 15 | | (4) The Commission may adopt rules specifying filing | 16 | | and information requirements for multi-year rate filings | 17 | | that generally contain the level of detail currently set | 18 | | forth in the Commission's rules for future test year rate | 19 | | case filings. If the Commission has not adopted such | 20 | | rules, the utility shall file information that generally | 21 | | contains the same level of detail as required by the | 22 | | information requirements applicable to forward test years | 23 | | under the Commission's current rules. | 24 | | (5) If the participating gas utility recovers a | 25 | | portion of its costs through automatic adjustment clause | 26 | | tariffs other than those authorized by Section 9-220.3 of |
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| 1 | | this Act on the effective date of this amendatory Act of | 2 | | the 102nd General Assembly, the participating gas utility | 3 | | may elect to continue to recover these costs through such | 4 | | tariffs, but such costs shall not be recovered through the | 5 | | multi-year rate. The applicability of an automatic | 6 | | adjustment clause tariff providing for the recovery of | 7 | | costs that the participating gas utility elects to be | 8 | | included in the multi-year rate is suspended by operation | 9 | | of law on the date on which costs that would have been | 10 | | otherwise recovered through the automatic adjustment | 11 | | clause begin being recovered through rates established | 12 | | under the multi-year rate tariff and structure, provided | 13 | | that neither the suspension nor the multi-year rate alters | 14 | | or affects reconciling charges or credits under such | 15 | | automatic adjustment clause tariff that arise from periods | 16 | | prior to the beginning of the first calendar year to be | 17 | | reconciled under subsection (c). Such suspended automatic | 18 | | adjustment clause tariff again becomes effective, by | 19 | | operation of law and without any further order of the | 20 | | Commission, on the date when a multi-year rate recovering | 21 | | such costs is no longer effective. If the participating | 22 | | gas utility, before the effective date of this amendatory | 23 | | Act of the 102nd General Assembly, filed natural gas | 24 | | delivery services tariffs with the Commission pursuant to | 25 | | Section 9-201 of this Act that are still pending on the | 26 | | effective date of this amendatory Act of the 102nd General |
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| 1 | | Assembly, the participating gas utility shall, at the time | 2 | | it files its multi-year rate tariff with the Commission, | 3 | | also file a notice of withdrawal with the Commission to | 4 | | withdraw the natural gas delivery services tariffs | 5 | | previously filed pursuant to Section 9-201 of this Act. | 6 | | Upon receipt of the notice of withdrawal, the Commission | 7 | | shall dismiss with prejudice any docket that had been | 8 | | initiated to investigate the natural gas delivery services | 9 | | tariffs filed pursuant to Section 9-201 of this Act, and | 10 | | the tariffs and the record related to the tariffs shall | 11 | | not be the subject of any further hearing, investigation, | 12 | | or proceeding of any kind related to rates for natural gas | 13 | | delivery services. The participating gas utility may also | 14 | | file revisions to other tariffs then in effect that refer | 15 | | to a base rate or base rate case to conform those | 16 | | references to the applicable multi-year rate tariff, | 17 | | structure, protocols, or process. | 18 | | (6) Subsequent changes to the multi-year rate | 19 | | structure or protocols shall be made as set forth in | 20 | | Section 9-201 of this Act, but nothing in this subsection | 21 | | (b) is intended to limit the Commission's authority under | 22 | | this Article and other provisions of this Act to initiate | 23 | | an investigation of a participating utility's multi-year | 24 | | rate tariff, provided that any such changes shall be | 25 | | consistent with this subsection (b) and subsection (c). | 26 | | Any change ordered by the Commission shall be made at the |
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| 1 | | same time new rates take effect following the Commission's | 2 | | next triennial base rate case order pursuant to | 3 | | subsections (b) and (c) of this Section, provided that the | 4 | | new rates take effect no less than 30 days after the date | 5 | | on which the Commission issues an order adopting the | 6 | | change. | 7 | | (7) The multi-year rate tariff, structure, and | 8 | | protocols shall remain in effect at the discretion of the | 9 | | utility. The participating gas utility is not precluded | 10 | | from filing a rate case under the provisions of this | 11 | | Article at any time. If the participating utility chooses | 12 | | to terminate the multi-year rate structure, or in the | 13 | | event the multi-year rate structure is terminated by the | 14 | | Commission, the then current rates shall remain in effect | 15 | | until new rates are set pursuant to this Article, subject | 16 | | to retroactive rate adjustment, with interest, to | 17 | | reconcile rates charged with actual costs. At the time the | 18 | | multi-year rate structure is terminated, the participating | 19 | | utility's voluntary commitments and obligations under | 20 | | subsection (a) of this Section shall immediately terminate | 21 | | and any investments made pursuant to the most recent | 22 | | Greenhouse Gas Plan shall be included as rate base in the | 23 | | following rate proceeding filed pursuant to this Article. | 24 | | (c) Annual reconciliations. | 25 | | (1) On or before June 1 of the year immediately | 26 | | following year one, the participating gas utility shall |
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| 1 | | file with the Chief Clerk of the Commission updated actual | 2 | | cost inputs to the rates established under the multi-year | 3 | | rate plan for year one, the resulting updated charges | 4 | | applicable to year one, and a request for reconciliation | 5 | | of year one rates in accordance with the provisions of | 6 | | this subsection. This reconciliation, which shall be known | 7 | | as the initial annual reconciliation, shall reconcile the | 8 | | revenue requirement initially established for year one by | 9 | | Commission's initial triennial base rate case order (if | 10 | | not in effect for the entirety of year one, weighted, as | 11 | | applicable, with any prior rates in effect that year) and | 12 | | the amount collected by the participating gas utility via | 13 | | a surcharge tariff pursuant to Section 9-220.3 of this Act | 14 | | during year one on account of qualifying infrastructure | 15 | | investment, as that term is defined in subsection (b) of | 16 | | 9-220.3, that occurred during year one, with the revenue | 17 | | requirement determined in the same manner, including the | 18 | | utility's capital structure and cost of equity as | 19 | | determined in the most recent triennial base rate case, as | 20 | | the revenue requirement initially established for year one | 21 | | by Commission's initial triennial base rate case order, | 22 | | except using the actual costs for year one, and a year-end | 23 | | rate base for year one. The first such reconciliation is | 24 | | not intended to provide for the recovery of costs | 25 | | previously excluded from rates based on a prior Commission | 26 | | order finding of imprudence or unreasonableness. Any |
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| 1 | | over-collection or under-collection indicated by such | 2 | | reconciliation shall be reflected as a credit against, or | 3 | | recovered as an additional charge to, respectively, with | 4 | | interest calculated at a rate equal to the utility's | 5 | | weighted average cost of capital approved by the | 6 | | Commission in the initial triennial base rate case, the | 7 | | rates applicable in the following applicable rate year. As | 8 | | used in this subsection, "year one" means the calendar | 9 | | year in which rates established the participating gas | 10 | | utility's initial triennial base rate case and multi-year | 11 | | rate structure and protocols first go into effect. | 12 | | (2) On or before June 1 of each subsequent year in | 13 | | which rates established under any triennial base rate case | 14 | | and the multi-year rate tariff, structure, and protocols | 15 | | are in effect, the participating gas utility shall file | 16 | | with the Chief Clerk of the Commission its updated actual | 17 | | cost inputs to the rates established under the multi-year | 18 | | rate tariff for the previous calendar year and a request | 19 | | for reconciliation of rates in accordance with the | 20 | | provisions of this subsection. Each such reconciliation | 21 | | shall address the prior calendar year in which rates | 22 | | established under the multi-year tariff and structure were | 23 | | in effect and shall reconcile the revenue requirements | 24 | | established by Commission's previous triennial base rate | 25 | | case order in effect for that year with the revenue | 26 | | requirement determined in the same manner, including the |
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| 1 | | utility's capital structure and cost of equity, as in the | 2 | | most recent triennial base rate case, using actual costs | 3 | | for that year, and the year-end rate base for that year | 4 | | subject to metric performance adjustments set forth in | 5 | | subsection (e) of this Section. Any over-collection or | 6 | | under-collection indicated by such reconciliation of the | 7 | | rate period shall be reflected as a credit against, or | 8 | | recovered as an additional charge to, respectively, with | 9 | | interest calculated at a rate equal to the utility's | 10 | | weighted average cost of capital approved by the | 11 | | Commission in the most recent triennial base rate case, | 12 | | the charges for the following applicable rate year. | 13 | | (3) Notwithstanding anything to the contrary, the | 14 | | intent of the reconciliation is to ultimately reconcile | 15 | | the revenue requirement reflected in rates for each | 16 | | calendar year, beginning with the calendar year following | 17 | | year one pursuant to this subsection (c), with what the | 18 | | revenue requirement determined using a year-end rate base | 19 | | for the applicable calendar year would have been had the | 20 | | actual cost information for the applicable calendar year | 21 | | been available at the filing date, considering any charge | 22 | | or credit required by subparagraph (D) of paragraph (2) of | 23 | | subsection (d) of this Section. | 24 | | (4) The new charge or credit resulting from the | 25 | | initial and subsequent annual reconciliation, if any, | 26 | | resulting from the calculation required by this subsection |
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| 1 | | (c) shall take effect beginning on the first billing day | 2 | | of the following January billing period and remain in | 3 | | effect through the last billing day of the December | 4 | | billing period. | 5 | | (5) The initial and each annual reconciliation filing | 6 | | shall include relevant and necessary data and | 7 | | documentation for the applicable rate year that is | 8 | | consistent with the Commission's rules applicable to a | 9 | | filing for a general increase in rates or any rules | 10 | | adopted by the Commission to implement this Section. | 11 | | Normalization adjustments shall not be required. | 12 | | (6) Within 45 days after the utility makes its initial | 13 | | or subsequent annual reconciliation filing, the Commission | 14 | | shall have the authority, either upon complaint or its own | 15 | | initiative, but with reasonable notice, to enter upon a | 16 | | hearing concerning the prudence and reasonableness of the | 17 | | costs incurred by the utility to be recovered during the | 18 | | applicable rate year that are reflected in the inputs to | 19 | | the multi-year rate. During the course of the hearing, | 20 | | each objection shall be stated with particularity and | 21 | | evidence provided in support thereof, after which the | 22 | | utility shall have the opportunity to rebut the evidence. | 23 | | Discovery shall be allowed consistent with the | 24 | | Commission's Rules of Practice, which Rules shall be | 25 | | enforced by the Commission or the assigned administrative | 26 | | law judge. The Commission shall apply the same evidentiary |
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| 1 | | standards, including, but not limited to, those concerning | 2 | | the prudence and reasonableness of the costs incurred by | 3 | | the utility, in the hearing as it would apply in a hearing | 4 | | to review a filing for a general increase in rates under | 5 | | this Article. The Commission shall not, however, have the | 6 | | authority in a proceeding under this subsection (c) to | 7 | | consider or order any changes to the structure or | 8 | | protocols of the multi-year rate approved pursuant to | 9 | | subsection (b) of this Section. Nor shall the Commission | 10 | | have the authority to reconsider any determinations of the | 11 | | prudence and reasonableness of plans made as part of its | 12 | | approval of a multi-year rate plan, provided that the | 13 | | Commission may consider the prudence of utility actions | 14 | | and reasonableness of utilities costs incurred in | 15 | | executing those plans. In a proceeding under this | 16 | | subsection (c), the Commission shall enter its order no | 17 | | later than the earlier of 240 days after the utility's | 18 | | filing of its annual reconciliation and update of cost | 19 | | inputs to the multi-year rate or December 31. The | 20 | | Commission's determinations of the prudence and | 21 | | reasonableness of the costs incurred for the applicable | 22 | | calendar year shall be final upon entry of the | 23 | | Commission's order and shall not be subject to reopening, | 24 | | reexamination, or collateral attack in any other | 25 | | Commission proceeding, case, docket, order, or rule; | 26 | | however, nothing in this subsection (c) shall prohibit a |
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| 1 | | party from petitioning the Commission to rehear or appeal | 2 | | to the courts the order pursuant to the provisions of this | 3 | | Act. | 4 | | (7) If the Commission does not, either upon complaint | 5 | | or its own initiative, enter upon a hearing within 45 days | 6 | | after the utility files the annual reconciliation and | 7 | | update of cost inputs, then the costs incurred for the | 8 | | applicable calendar year shall be deemed prudent and | 9 | | reasonable, and the filed charges shall not be subject to | 10 | | reopening, reexamination, or collateral attack in any | 11 | | other proceeding, case, docket, order, or rule. | 12 | | (d) Rate design. Nothing in subsection (b) or (c) of this | 13 | | Section shall prohibit the Commission from investigating, or a | 14 | | participating utility from filing, revenue-neutral tariff | 15 | | changes related to rate design of a multi-year rate that has | 16 | | been placed into effect for the utility. Following approval of | 17 | | a participating utility's multi-year rate tariff pursuant to | 18 | | subsection (b) of this Section, the utility shall make a | 19 | | filing with the Commission within one year after the effective | 20 | | date of a multi-year rate tariff that proposes changes to the | 21 | | tariff to incorporate the findings of any final rate design | 22 | | orders of the Commission applicable to the participating | 23 | | utility and entered subsequent to the Commission's approval of | 24 | | the tariff. The Commission shall, after notice and hearing, | 25 | | enter its order approving, or approving with modification, the | 26 | | proposed changes to the multi-year rate tariff within 240 days |
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| 1 | | after the utility's filing. Following such approval, the | 2 | | utility shall make a filing with the Commission during each | 3 | | subsequent 3-year period that either proposes revenue-neutral | 4 | | tariff changes or re-files the existing tariffs without | 5 | | change, which shall present the Commission with an opportunity | 6 | | to suspend the tariffs and consider revenue-neutral tariff | 7 | | changes related to rate design. | 8 | | (e) Performance-based metrics. | 9 | | (1) Within 30 days after the filing of a tariff | 10 | | pursuant to subsection (b) of this Section, each | 11 | | participating gas utility shall develop and file with the | 12 | | Commission a plan designed to achieve, over a 9-year | 13 | | period, the following: | 14 | | (A) incorporation of sustainable gas into its gas | 15 | | supply portfolio by not less than 2% of the natural gas | 16 | | utility's total gas supply portfolio (by volume) by | 17 | | the year 2030 as set forth in subsection (a) of this | 18 | | Section; | 19 | | (B) implementation of the proposed qualified | 20 | | investments, as set forth in subparagraph (B) of | 21 | | paragraph (2) of subsection (a) of this Section, in | 22 | | support of the measurement, reduction, displacement, | 23 | | or offset of greenhouse gas emissions from utility | 24 | | operations by the participating gas utility; | 25 | | (C) implementation of the proposed customer | 26 | | programs and qualified investments, as set forth in |
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| 1 | | subparagraph (B) of paragraph (2) of subsection (a) of | 2 | | this Section, in support of a pathway to reduce, | 3 | | offset, or avoid other greenhouse gas in metric tons | 4 | | of carbon dioxide equivalent in the State of Illinois | 5 | | attributable to residential, commercial, and | 6 | | industrial customer use of energy and opportunities to | 7 | | reduce emissions in other sectors of the State's | 8 | | economy; and | 9 | | (D) opportunities for minority-owned, women-owned, | 10 | | and veteran-owned business enterprises: design a | 11 | | performance metric regarding the creation of | 12 | | opportunities for minority-owned, women-owned, and | 13 | | veteran-owned business enterprises consistent with | 14 | | State and federal law using a base performance value | 15 | | of the percentage of the participating gas utility's | 16 | | capital expenditures that were paid to minority-owned, | 17 | | women-owned, and veteran-owned business enterprises in | 18 | | the years 2018, 2019, and 2020. | 19 | | (2) The metrics plan shall include information about | 20 | | the potential greenhouse gas emission benefits of the | 21 | | investments and programs that are proposed as part of the | 22 | | plan. The natural gas utility shall utilize Environmental | 23 | | Protection Agency and other industry recognized greenhouse | 24 | | gas reporting protocols, subject to adjustments over time | 25 | | by the gas utility as governed by documented changes in | 26 | | industry recognized protocols, governmental and regulatory |
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| 1 | | requirements and changes. | 2 | | (3) The metrics shall include incremental performance | 3 | | goals for every 3-year period in alignment with the | 4 | | Greenhouse Gas Plan filed with each triennial base rate | 5 | | case filed in accordance with subsection (b) of this | 6 | | Section that shall be designed to demonstrate that the gas | 7 | | utility is on track to achieve the performance goal in | 8 | | each category at the end of the 9-year period. | 9 | | (4) With respect to each of the performance goals | 10 | | established pursuant to paragraphs (1) and (2) of this | 11 | | subsection (e), as applicable, which together measure the | 12 | | participating gas utilities progress relating to the | 13 | | implementation of its commitments set forth in subsection | 14 | | (a) of this Section, the performance under each such | 15 | | 3-year goal shall be calculated in terms of the percentage | 16 | | of the goal achieved or missed. The percentage of goal | 17 | | achieved or missed for each of the goals shall be | 18 | | aggregated and an average percentage value calculated, for | 19 | | each year of the 10-year period. If the utility exceeds an | 20 | | average percentage value in a given year of at least 5%, | 21 | | the participating utility's return on equity approved in | 22 | | the triennial base rate case shall be increased by 25 | 23 | | basis points when the revenue requirement is recalculated | 24 | | for purposes of the following 3 annual reconciliations | 25 | | filed pursuant to subsection (c) of this Section. If the | 26 | | utility does not achieve an average percentage value in a |
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| 1 | | given year of at least 95%, the participating utility's | 2 | | return on equity approved in the triennial base rate case | 3 | | shall be decreased by 25 basis points when the revenue | 4 | | requirement is recalculated for purposes of the following | 5 | | 3 annual reconciliations filed pursuant to subsection (c) | 6 | | of this Section. | 7 | | (5) The Commission shall, after notice and hearing, | 8 | | enter an order within 120 days after the metrics are filed | 9 | | approving, or approving with modification, a participating | 10 | | utility's proposed metrics set forth in this subsection. | 11 | | (6) Along with each triennial base rate case filing | 12 | | (after the initial triennial base rate case) made pursuant | 13 | | to subsection (b), each participating utility shall file a | 14 | | report with the Commission that includes, among other | 15 | | things, a description of how the participating gas utility | 16 | | performed under each metric and an identification of any | 17 | | extraordinary events that adversely or positively impacted | 18 | | the utility's performance. The first report filed with the | 19 | | triennial base rate case filing (after the initial | 20 | | triennial base rate case) shall provide data with respect | 21 | | to the utility's performance under the metrics during the | 22 | | 2 rate years preceding the filing and subsequent reports | 23 | | shall address the utility's performance under the metrics | 24 | | for the previous 3-year period. Whenever a participating | 25 | | utility satisfies or does not satisfy the metrics required | 26 | | pursuant to this subsection (e), the Commission shall |
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| 1 | | approve financial incentives or penalties, as appropriate, | 2 | | in accordance with this subsection (e). The | 3 | | Commission-approved incentives or financial penalties | 4 | | shall be applied to the return on equity that is | 5 | | determined in the triennial base rate case. Nothing in | 6 | | this Section shall authorize the Commission to increase or | 7 | | reduce or otherwise obviate the imposition of financial | 8 | | incentives or penalties for achieving or failing to | 9 | | achieve one or more of the metrics established pursuant to | 10 | | subparagraphs (1) through (3) of this subsection (e). | 11 | | (7) If the multi-year rate tariff established pursuant | 12 | | to subsection (b) of this Section terminates, the | 13 | | utility's obligations under this subsection (e) shall also | 14 | | terminate; however, any penalties due and owing at the | 15 | | time of such termination shall be applied in the | 16 | | participating utilities following rate proceedings under | 17 | | this Article. | 18 | | (f) Relationship to pre-existing automatic adjustment | 19 | | clause tariffs authorized by Section 9-220.3. Any surcharge | 20 | | tariff of a participating gas utility authorized by paragraph | 21 | | (3) of subsection (a) of Section 9-220.3 of this Act that is in | 22 | | effect on the effective date of the multi-year rate tariff | 23 | | approved by the Commission for that utility pursuant to the | 24 | | provisions of this Section shall be suspended by operation of | 25 | | law on the effective date of that multi-year rate tariff. | 26 | | Notwithstanding anything in paragraph (4) of subsection (a) |
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| 1 | | and paragraph (2) of subsection (e) of Section 9-220.3 of this | 2 | | Act, a participating gas utility shall not file a petition to | 3 | | initiate a final reconciliation of amounts collected under | 4 | | such a surcharge tariff on account of qualifying | 5 | | infrastructure investment, as that term is defined in | 6 | | subsection (b) of Section 9-220.3, that occurred during any | 7 | | calendar year for which a reconciliation will be made under | 8 | | subsection (c), and no adjustment to the initial rates set in | 9 | | the participating gas utility's initial triennial base rate | 10 | | case shall be made based on the fact that the utility had such | 11 | | a tariff in effect or recovered any portion of its revenue | 12 | | requirement through such a tariff.
| 13 | | Section 99. Effective date. This Act takes effect upon | 14 | | becoming law.".
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