SB1101sam001 102ND GENERAL ASSEMBLY

Sen. Michael E. Hastings

Filed: 3/30/2021

10200SB1101sam001 LRB102 04925 SPS 23982 a

AMENDMENT TO SENATE BILL 1101

AMENDMENT NO. ______. Amend Senate Bill 1101 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Administrative Procedure Act is amended by adding Section 5-45.8 as follows:

(5 ILCS 100/5-45.8 new)

Sec. 5-45.8. Emergency rulemaking; Public Utilities Act. To provide for the expeditious and timely implementation of changes made to the Public Utilities Act by this amendatory Act of the 102nd General Assembly, emergency rules implementing the changes made to the Public Utilities Act by this amendatory Act of the 102nd General Assembly may be adopted in accordance with Section 5-45 by the Illinois Commerce Commission. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare.

This Section is repealed on January 1, 2026.

Section 10. The Public Utilities Act is amended by adding Sections 4-701, 4-702, 9-228, and 16-131 as follows:

(220 ILCS 5/4-701 new)

Sec. 4-701. Electric Utility Independent Monitor.

(a) It is the policy of this State to ensure public utilities adhere to the highest standards of ethical conduct. Recent events have demonstrated that at least one public utility in this State has not adhered to the standards of conduct expected by the State, and as such, has breached the public trust. The General Assembly finds this offensive conduct warrants a response that ensures transparency and ethical standards are adhered to. The General Assembly therefore declares its intent to impose heightened scrutiny and rigorous standards to increase transparency and ensure ethics compliance. Further, it is the intent of the General Assembly to remediate public utility wrongdoing and penalize impropriety.

(b) This Section applies to electric public utilities serving more than 3,000,000 retail customers in the State for the duration of any deferred prosecution agreement, pending criminal charges, ongoing criminal investigation, and term of criminal penalties against the public utility or any of its officers or former officers.

(c) Within 60 days after the effective date of this amendatory Act of the 102nd General Assembly, the Commission shall begin the process of creating the position of Electric Utility Independent Monitor. The responsibilities of the Electric Utility Independent Monitor shall include the following:

(1) developing and publishing annual ethics audits of electric public utilities serving more than 3,000,000 retail customers in the State;

(2) hiring additional staff or contract entities as necessary to fulfill the obligations of this Section;

(3) developing a public reporting system to record each and every communication, including who was present, the subject matter discussed, materials provided or discussed, whether the meeting was in-person, via video, or telephonic, and the date and time of the communication, between a representative, employee, officer, or executive of an electric public utility and a Commissioner, representative, employee, or staff of the Commission;

(4) overseeing an electric public utility's compliance with the standards described by statute, rule, or court order regarding standards of ethical conduct;

(5) working in coordination with an electric public utility's highest officer responsible for compliance and ethics, such as a Chief Compliance and Ethics Officer, to ensure the utility complies with ethics standards provided by law, rule, and any other applicable authority, through investigation, enforcement, reporting, and disciplinary activities, including fines;

(6) documenting violations of statutes, rules, court order, internal controls, Commission orders, or other applicable authority regarding ethics and transparency and ensure appropriate internal disciplinary actions are taken and the violation is reported to the Commission when appropriate;

(7) filing reports with the Commission of each and every event where an electric public utility has not taken disciplinary action for a violation of statutes, rules, court order, internal controls, Commission orders, or other applicable authority regarding ethics and transparency, or where the public utility does not take a disciplinary action that aligns with the recommendation of the Electric Utility Independent Monitor;

(8) recommending to the Commission that it adopt new internal controls, policies, practices, or procedures to apply to an electric public utility to ensure compliance with statute, rule, court order, or other applicable authority;

(9) publishing an annual ethics audit for an electric public utility subject to this Section describing the electric public utility's internal controls, policies, practices, and procedures to comply with statutes, rules, court orders, or other applicable authority; this report should also include a record of any disciplinary actions taken related to unethical conduct as well as any recommendations the Electric Utility Independent Monitor has made and the public utility's response;

(10) detailing deficiencies in a report to the Commission and the General Assembly that shall include a recommendation for Commission action if the Electric Utility Independent Monitor finds that an electric public utility has not complied with standards set forth by law, rules, or by other applicable authority; and

(11) monitoring, auditing, and subpoenaing all records necessary for the Electric Utility Independent Monitor to meet the responsibilities described in this Section and related rules, including, but not limited to, contracts with third party entities, accounting records, communication with public officials or their staff, lobbying activities, expenses on lobbyists and consultants, legal expenses, and internal compliance policies.

(d) An electric public utility subject to this Section shall remit amounts necessary for the Commission to pay the wages, overhead, travel expenses, and other costs of the Electric Utility Independent Monitor and staff as determined by the Commission.

(e) An electric public utility's cost of compliance with this Section is not a cost of service and shall not be recoverable in rates.

(f) Where an electric public utility is the subject of a federal or State criminal investigation or where the Commission initiates an investigation of an ethics violation, the utility's costs related to such investigation are not a cost of service and shall not be recoverable in rates.

(g) The Commission shall have the authority to retain an independent third party to serve as the Electric Utility Independent Monitor pursuant to this Section.

(h) The Commission shall have the authority to create rules and emergency rules where applicable to implement this Section.

(220 ILCS 5/4-702 new)

Sec. 4-702. Electric utility audit.

(a) Within 30 days after the effective date of this amendatory Act of the 102nd General Assembly, the Commission may begin the process of contracting with a third party or hiring additional personnel as needed to conduct an audit pursuant to this Section.

(b) The Commission shall conduct an audit of all electric systems investments made by a participating utility, other than a combination utility. This audit shall include a review of:

(1) system upgrade costs and intended benefits;

(2) whether the investment was part of the participating utility's investment obligations under subsection (b) of Section 16-108.5 of this Act;

(3) benefits to ratepayers;

(4) efficiencies gained as a result of investments made by the participating utility;

(5) steps taken to minimize costs to consumers; and

(6) any other information the Commission determines is necessary to analyze the costs and benefits of these smart grid electric systems upgrades.

(c) The Commission must prepare and file a final report with the General Assembly analyzing the costs and benefits of the smart meter program and other smart grid electric systems upgrades no later than 2 years after the effective date of this amendatory Act of the 102nd General Assembly.

(d) The Commission is authorized to monitor, audit, and subpoena all records necessary to meet responsibilities described in this Section.

(e) An electric public utility subject to this Section shall remit amounts necessary for the Commission to pay the wages, contract costs, overhead, travel expenses, and other costs incurred to meet the responsibilities of this Section. The electric public utility's cost of compliance with this Section is not a cost of service shall not be recoverable in rates.

(220 ILCS 5/9-228 new)

Sec. 9-228. Limits on public utility expenses. The Commission shall not consider any of the following as an expense of any public utility company, including any allocation of those costs to the public utility from an affiliate or corporate parent for the purpose of determining any rate or charge, any amount expended for:

(1) the pension or other post-employment benefits for an employee convicted of committing a criminal act in the course of his or her work with the utility;

(2) any severance or post-employment costs for an employee convicted of committing a criminal act in the course of his or her work with the utility; and

(3) criminal penalties, fines, fees, and costs related to criminal charges, criminal investigations, or deferred prosecution agreements.

(220 ILCS 5/16-131 new)

Sec. 16-131. Criminal penalty electric utility rebate.

(a) It is the policy of this State that ethical and criminal misconduct by electric utilities harms ratepayers by destroying public trust. The General Assembly finds it necessary to remediate harm caused by electric utilities by requiring that criminal penalties, or an amount equal to the criminal penalty paid by an electric utility, be rebated to ratepayers as restitution for the breach of public trust.

(b) Electric utilities shall rebate to ratepayers an amount equal to the total amount of penalties or fines paid to the State or federal government in the preceding 12 months as a result of a criminal investigation, criminal charge, or deferred prosecution agreement beginning in the year subsequent to the remittance of the penalty or fine. This rebate shall be amortized in the rates over a period of 3 years.

(c) The rebate amount is not a cost of service and shall not be recoverable through rates.

(d) The utility must file a rebate rider tariff with the Commission and any bill adjustment resulting from such rebate rider shall appear as a separate line item on the customer's bill.

(e) An electric utility must submit all information regarding criminal fines, fees, and penalties annually to the Commission.

(f) The Commission shall have emergency rulemaking authority to implement this Section.

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