Full Text of HB3657 95th General Assembly
HB3657 95TH GENERAL ASSEMBLY
|
|
|
95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB3657
Introduced 2/28/2007, by Rep. Robert F. Flider SYNOPSIS AS INTRODUCED: |
|
220 ILCS 5/8-102 |
from Ch. 111 2/3, par. 8-102 |
220 ILCS 5/8-401 |
from Ch. 111 2/3, par. 8-401 |
220 ILCS 5/9-213 |
from Ch. 111 2/3, par. 9-213 |
220 ILCS 5/9-219 new |
|
|
Amends the Public Utilities Act. Provides that an audit or investigation may examine the
reasonableness, prudence, or efficiency of any aspect of the
utility's operations, costs, management, decisions, or functions that may affect the adequacy, safety, efficiency, or reliability of utility
service or the reasonableness or prudence of the costs
underlying rates or charges including power procurement costs for utility service. Provides that every 3 years each electric utility that provides electric services shall file with the Illinois Commerce Commission an energy plan for its service territory consistent with certain planning objectives and requirements. Provides that the cost of new electric utility generating plants and
significant additions to electric utility generating plants shall not be
included in the rate base of any utility unless such cost is reasonable and prudently incurred. Provides that the Commission shall authorize a decrease of rates and charges based upon changes in the cost of purchased power if it determines that a utility's power procurement costs were not the lowest cost possible. Effective immediately.
|
| |
|
|
| FISCAL NOTE ACT MAY APPLY | |
|
|
A BILL FOR
|
|
|
|
|
HB3657 |
|
LRB095 10191 MJR 32362 b |
|
| 1 |
| AN ACT concerning regulation.
| 2 |
| Be it enacted by the People of the State of Illinois,
| 3 |
| represented in the General Assembly:
| 4 |
| Section 5. The Public Utilities Act is amended by changing | 5 |
| Sections 8-102, 8-401, and 9-213 and by adding Section 9-219 as | 6 |
| follows:
| 7 |
| (220 ILCS 5/8-102) (from Ch. 111 2/3, par. 8-102)
| 8 |
| Sec. 8-102. Audit or investigation. The Commission is | 9 |
| authorized to
conduct or order a management audit or | 10 |
| investigation of any public utility or
part thereof. The audit | 11 |
| or investigation may examine the
reasonableness, prudence, or | 12 |
| efficiency of any aspect of the
utility's operations, costs, | 13 |
| management, decisions or functions that may affect the | 14 |
| adequacy, safety, efficiency or reliability of utility
service | 15 |
| or the reasonableness or prudence of the costs
underlying rates | 16 |
| or charges for utility service , including power procurement | 17 |
| costs . The Commission may conduct or
order a management audit | 18 |
| or investigation only when it has reasonable grounds
to believe | 19 |
| that the audit or investigation is necessary to assure
that the | 20 |
| utility is providing adequate, efficient, reliable, safe,
and | 21 |
| least-cost service and charging only just and reasonable rates
| 22 |
| therefor, or that the audit or investigation is likely to be
| 23 |
| cost-beneficial in enhancing the quality of service or the
|
|
|
|
HB3657 |
- 2 - |
LRB095 10191 MJR 32362 b |
|
| 1 |
| reasonableness of rates therefor. The Commission shall, before | 2 |
| initiating
any such audit or investigation, issue an order | 3 |
| describing the grounds for
the audit or investigation and the | 4 |
| appropriate scope and nature of
the audit or investigation. The | 5 |
| scope and nature of any such
audit or investigation shall be | 6 |
| reasonably related to the grounds relied upon
by the Commission | 7 |
| in its order.
| 8 |
| Any audit or investigation authorized pursuant to this | 9 |
| Section may be
conducted by the Commission, or if the | 10 |
| Commission is unable to adequately
perform the audit or | 11 |
| investigation, the Commission may arrange for
it to be | 12 |
| conducted by persons independent of the utility and selected by | 13 |
| the
Commission. The cost of an independent audit shall be borne | 14 |
| initially
by the utility, but shall be recovered as an expense | 15 |
| through normal
ratemaking procedures. Any audit or | 16 |
| investigation shall be conducted in
accordance with generally | 17 |
| accepted auditing standards.
| 18 |
| (Source: P.A. 90-655, eff. 7-30-98.)
| 19 |
| (220 ILCS 5/8-401) (from Ch. 111 2/3, par. 8-401)
| 20 |
| Sec. 8-401. (a) Every public utility subject to this Act | 21 |
| shall provide
service and facilities which are in all respects | 22 |
| adequate, efficient,
reliable and environmentally safe and | 23 |
| which, consistent with these
obligations, constitute the | 24 |
| least-cost means of meeting the utility's service obligations. | 25 |
| (b) Every 3 years, each electric utility shall file with |
|
|
|
HB3657 |
- 3 - |
LRB095 10191 MJR 32362 b |
|
| 1 |
| the Commission an energy plan for its service territory | 2 |
| consistent with the planning objectives and requirements | 3 |
| described in this Article. The Commission shall review each | 4 |
| such plan and provide testimony before the Commission in the | 5 |
| hearings required by this Article as to the adequacy of each | 6 |
| plan in satisfying the objectives of this Article and this Act. | 7 |
| Subsequent to the effective date of this amendatory Act of the | 8 |
| 95th General Assembly, the next such utility electric plans | 9 |
| shall be filed on July 1, 2008. | 10 |
| (c) In preparing the plans required under subsection (b) of | 11 |
| this Section each electric utility shall include the following: | 12 |
| (1) Year-by-year, 20-year demand projections for each | 13 |
| electric utility for services and projected customers by | 14 |
| major service classifications of the electric utility, as | 15 |
| well as the basis for the projections, including an | 16 |
| examination of possible alternative levels of demand and | 17 |
| discussions of the forecasting methodologies and input | 18 |
| variables used in making the forecasts. In particular the | 19 |
| actual and forecasted impact of conservation, renewable | 20 |
| resources, cogeneration, and other improvements in energy | 21 |
| efficiency shall be identified and analyzed. | 22 |
| (2) Year-by-year projections of all available sources | 23 |
| of supply for each of the next 20 years for each electric | 24 |
| utility, including, but not limited to: | 25 |
| (A) available electric generating capacity, | 26 |
| indicating planned additions, retirements, purchases, |
|
|
|
HB3657 |
- 4 - |
LRB095 10191 MJR 32362 b |
|
| 1 |
| substantial planned outages, deratings, and all other | 2 |
| expected changes in levels of generating and | 3 |
| production capacity; | 4 |
| (B) the projected utilization of cogeneration, and | 5 |
| nonconventional technologies relying on renewable | 6 |
| resources, identifying specifically any such capacity | 7 |
| expected to be available for purchase by the utility; | 8 |
| and | 9 |
| (C) a discussion of all existing and proposed | 10 |
| programs and policies to promote and ensure the full | 11 |
| utilization of all practical and economical energy | 12 |
| conservation; | 13 |
| (3) A demonstration that the proposed plan represents | 14 |
| the least-cost means of satisfying energy service needs | 15 |
| consistent with the objective of this Section, including: | 16 |
| (A) a discussion of how the utility has determined | 17 |
| the appropriate level of reliability to be used in its | 18 |
| forecasts and plans, and how this determination has | 19 |
| influenced its forecasts and plans; | 20 |
| (B) a demonstration that the plan fully considers | 21 |
| and utilizes all available, practical, and economical | 22 |
| conservation, renewable resources, cogeneration, and | 23 |
| improvements in energy efficiency; | 24 |
| (C) with respect to the planned construction of any | 25 |
| new generation or production facilities: | 26 |
| (i) a discussion of proposed and alternative |
|
|
|
HB3657 |
- 5 - |
LRB095 10191 MJR 32362 b |
|
| 1 |
| sites and of the likely or possible environmental | 2 |
| consequences of the construction and operation of | 3 |
| planned facilities; | 4 |
| (ii) a discussion of the types of fuel and | 5 |
| methods of generation to be employed at planned | 6 |
| facilities; | 7 |
| (iii) a discussion of the operating and | 8 |
| capital costs of planned facilities and the | 9 |
| expected financial impacts and requirements of | 10 |
| construction and operation; and | 11 |
| (iv) a discussion of the expected impact of any | 12 |
| planned facility on system reserve margins and | 13 |
| rates at the time of proposed inclusion into rate | 14 |
| base; and | 15 |
| (D) a demonstration that the utility's rate design | 16 |
| accurately reflects the long-term cost of service for | 17 |
| each customer class or group and provides full and | 18 |
| adequate incentives for each customer class or group to | 19 |
| conserve energy. | 20 |
| The Commission shall determine the precise form, scope, and | 21 |
| contents of such energy plans consistent with the requirements | 22 |
| of this paragraph and shall have the power to require the | 23 |
| provision of such additional date, information, and analysis as | 24 |
| necessary to effectuate the planning objectives of this | 25 |
| Section.
| 26 |
| (Source: P.A. 84-617.)
|
|
|
|
HB3657 |
- 6 - |
LRB095 10191 MJR 32362 b |
|
| 1 |
| (220 ILCS 5/9-213) (from Ch. 111 2/3, par. 9-213)
| 2 |
| Sec. 9-213. The cost of new electric utility generating | 3 |
| plants and
significant additions to electric utility | 4 |
| generating plants shall not be
included in the rate base of any | 5 |
| utility unless such cost is reasonable and prudently incurred .
| 6 |
| Prior to including the cost of plants or additions to utility | 7 |
| plants in the
rate base, the Commission shall conduct an audit | 8 |
| of such costs in order to
ascertain whether the cost associated | 9 |
| with the new generating plant or the
addition to electric | 10 |
| utility generating plant is reasonable. However, the
| 11 |
| Commission may, for good cause shown in individual cases, waive | 12 |
| the
auditing requirement for any generating facility which | 13 |
| meets all of the
following requirements:
| 14 |
| (1) the facility is wholly owned and operated by a | 15 |
| public utility, as
otherwise defined in this Act, which | 16 |
| serves less than 20,000 electric
customers within the State | 17 |
| of Illinois, and
| 18 |
| (2) the facility is designed to generate less than 50
| 19 |
| megawatts of electricity, and
| 20 |
| (3) the facility is located outside of the State of | 21 |
| Illinois.
| 22 |
| If the Commission is unable to conduct such an audit, the | 23 |
| Commission
shall arrange for it to be conducted by persons | 24 |
| independent of the utility
and selected by the Commission. The | 25 |
| cost of such an independent audit
shall be borne initially by |
|
|
|
HB3657 |
- 7 - |
LRB095 10191 MJR 32362 b |
|
| 1 |
| the utility, but shall be recovered as an
expense through | 2 |
| normal ratemaking procedures. Any such audits shall be
| 3 |
| conducted in accordance with generally accepted auditing | 4 |
| standards and
shall include but not be limited to costs | 5 |
| associated with materials, labor,
equipment, professional | 6 |
| services and other direct and indirect costs.
| 7 |
| "Significant additions to the electric utility generating | 8 |
| plant", as
used in this Section, shall not include a public | 9 |
| utility's investment in
pollution control devices for the | 10 |
| control of sulfur dioxide emissions.
Nothing in this Section is | 11 |
| intended to affect the provisions of Section
9-214 of this Act.
| 12 |
| "Reasonable", as used in this Section, means that a | 13 |
| utility's decisions,
construction, and supervision of | 14 |
| construction, underlying the costs of new
electric utility | 15 |
| generating plants and significant additions to electric
| 16 |
| utility generating plants resulted in efficient, economical | 17 |
| and timely
construction. In determining the reasonableness of | 18 |
| plant costs, the
Commission shall consider the knowledge and | 19 |
| circumstances prevailing at the
time of each relevant utility | 20 |
| decision or action.
| 21 |
| Nothing in this Section shall prevent or limit the | 22 |
| Commission from either
entering into and conducting joint | 23 |
| audits concerning such electric
generating plants with the | 24 |
| regulatory authority of another state, or from
relying on | 25 |
| audits conducted by the regulatory authority of another state | 26 |
| in
lieu of an audit as required by this Section.
|
|
|
|
HB3657 |
- 8 - |
LRB095 10191 MJR 32362 b |
|
| 1 |
| (Source: P.A. 87-435.)
| 2 |
| (220 ILCS 5/9-219 new)
| 3 |
| Sec. 9-219. Rates and least cost power procurement | 4 |
| practices. Notwithstanding the provisions of Section 9-201, | 5 |
| the Commission shall authorize a decrease of rates and charges | 6 |
| based upon changes in the cost of purchased power if it | 7 |
| determines that a utility's power procurement costs were not | 8 |
| the lowest cost possible. Annually, the Commission shall | 9 |
| initiate public hearings to determine whether a utility's | 10 |
| purchased power is prudent. In each proceeding, the burden of | 11 |
| proof shall be upon the utility to establish prudence of it | 12 |
| purchased power costs. The Commission shall issue its final | 13 |
| order in each such annual proceeding for an electric utility by | 14 |
| December 31 of that year. The Commission shall adopt rules | 15 |
| specifying least cost power procurement practices.
| 16 |
| Section 99. Effective date. This Act takes effect upon | 17 |
| becoming law.
|
|