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90_HB0362sam002 SRS90HB0362JJsaam02 1 AMENDMENT TO HOUSE BILL 362 2 AMENDMENT NO. . Amend House Bill 362 by replacing 3 the title with the following: 4 "AN ACT in relation to the competitive provision of 5 utility services, amending named Acts."; and 6 by replacing everything after the enacting clause with the 7 following: 8 "ARTICLE I 9 Section 5. The Public Utilities Act is amended by adding 10 Articles XVI, XVII, and XVIII as follows: 11 (220 ILCS 5/Art. XVI heading new) 12 ARTICLE XVI. ELECTRIC SERVICE CUSTOMER CHOICE AND RATE 13 RELIEF LAW OF 1997 14 (220 ILCS 5/16-101 new) 15 Sec. 16-101. Short title and applicability. 16 (a) This Article may be cited as the Electric Service 17 Customer Choice and Rate Relief Law of 1997 and shall apply 18 to electric utilities and alternative retail electric 19 suppliers as defined in this Article. Except to the extent 20 modified or supplemented by the provisions of this Article, -2- SRS90HB0362JJsaam02 1 or where the context clearly renders such provisions 2 inapplicable, the other Articles of the Public Utilities Act 3 pertaining to public utilities, public utility rates and 4 services and the regulation thereof, are fully and equally 5 applicable to the tariffed services electric utilities 6 provide. 7 (b) The provisions of subsections (a) through (h) of 8 Section 16-111 of this Act shall not be applicable to any 9 electric utility which elects to file biennial rate 10 proceedings before the Commission in the years 1998, 2000 and 11 2002. An electric utility electing this option shall do so 12 by filing a notice of such election with the Commission 13 within 60 days after the effective date of this amendatory 14 Act of 1997, or its right to make such election shall be 15 irrevocably waived. An electric utility electing the option 16 specified in this paragraph shall file its rate proceeding 17 with the Commission no later than August 1 of the years 1998, 18 2000, 2002. The electric utility's filing shall comply with 19 all requirements of 83 Illinois Administrative Code Parts 255 20 and 285 as though the electric utility were filing for an 21 increase in its rates, without regard to whether such filing 22 would produce an increase, a decrease or no change in the 23 electric utility's rates and the Commission shall review the 24 electric utility's filing and shall issue its order in 25 accordance with the provisions of Section 9-201 of this Act. 26 (220 ILCS 5/16-101A new) 27 Sec. 16-101A. Legislative findings. 28 (a) The citizens and businesses of the State of Illinois 29 have been well-served by a comprehensive electrical utility 30 system which has provided safe, reliable, and affordable 31 service. The electrical utility system in the State of 32 Illinois has historically been subject to State and federal 33 regulation, aimed at assuring the citizens and businesses of -3- SRS90HB0362JJsaam02 1 the State of safe, reliable, and affordable service, while at 2 the same time assuring the utility system of a return on its 3 investment. 4 (b) Competitive forces are affecting the market for 5 electricity as a result of recent federal regulatory and 6 statutory changes and the activities of other states. 7 Competition in the electric services market may create 8 opportunities for new products and services for customers and 9 lower costs for users of electricity. Long-standing 10 regulatory relationships need to be altered to accommodate 11 the competition that could fundamentally alter the structure 12 of the electric services market. 13 (c) With the advent of increasing competition in this 14 industry, the State has a continued interest in assuring that 15 the safety, reliability, and affordability of electrical 16 power is not sacrificed to competitive pressures, and to that 17 end, intends to implement safeguards to assure that the 18 industry continues to operate the electrical system in a 19 manner that will serve the public's interest. Under the 20 existing regulatory framework, the industry has been 21 encouraged to undertake certain investments in its physical 22 plant and personnel to enhance its efficient operation, the 23 cost of which it has been permitted to pass on to consumers. 24 The State has an interest in providing the existing utilities 25 a reasonable opportunity to obtain a return on certain 26 investments on which they depended in undertaking those 27 commitments in the first instance while, at the same time, 28 not permitting new entrants into the industry to take 29 unreasonable advantage of the investments made by the 30 formerly regulated industry. 31 (d) A competitive wholesale and retail market must 32 benefit all Illinois citizens. The Illinois Commerce 33 Commission should act to promote the development of an 34 effectively competitive electricity market that operates -4- SRS90HB0362JJsaam02 1 efficiently and is equitable to all consumers. Consumer 2 protections must be in place to ensure that all customers 3 continue to receive safe, reliable, affordable, and 4 environmentally safe electric service. 5 (e) All consumers must benefit in an equitable and 6 timely fashion from the lower costs for electricity that 7 result from retail and wholesale competition and receive 8 sufficient information to make informed choices among 9 suppliers and services. The use of renewable resources and 10 energy efficiency resources should be encouraged in 11 competitive markets. 12 (220 ILCS 5/16-102 new) 13 Sec. 16-102. Definitions. For the purposes of this 14 Article the following terms shall be defined as set forth in 15 this Section. 16 "Alternative retail electric supplier" means every 17 person, cooperative, corporation, municipal corporation, 18 company, association, joint stock company or association, 19 firm, partnership, individual, or other entity, their 20 lessees, trustees, or receivers appointed by any court 21 whatsoever, that offers electric power or energy for sale, 22 lease or in exchange for other value received to one or more 23 retail customers, or that engages in the delivery or 24 furnishing of electric power or energy to such retail 25 customers, and shall include, without limitation, resellers, 26 aggregators and power marketers, but shall not include (i) 27 electric utilities (or any agent of the electric utility to 28 the extent the electric utility provides tariffed services to 29 retail customers through that agent), (ii) any electric 30 cooperative or municipal system as defined in Section 17-100 31 to the extent that the electric cooperative or municipal 32 system is serving retail customers within any area in which 33 it is or would be entitled to provide service under the law -5- SRS90HB0362JJsaam02 1 in effect immediately prior to the effective date of this 2 amendatory Act of 1997, (iii) a public utility that is owned 3 and operated by any public institution of higher education of 4 this State, or a public utility that is owned by such public 5 institution of higher education and operated by any of its 6 lessees or operating agents, within any area in which it is 7 or would be entitled to provide service under the law in 8 effect immediately prior to the effective date of this 9 amendatory Act of 1997, (iv) any retail customer to the 10 extent that customer obtains its electric power and energy 11 from its own cogeneration or self-generation facilities, (v) 12 any entity that sells or arranges for the installation of 13 cogeneration or self-generation facilities to be owned by a 14 retail customer described in subparagraph (iv), but only to 15 the extent the entity is engaged in selling or arranging for 16 such installation, or (vi) an industrial or manufacturing 17 customer that owns its own distribution facilities, to the 18 extent that the customer provides service from that 19 distribution system to a third-party contractor located on 20 the customer's premises that is integrally and predominantly 21 engaged in the customer's industrial or manufacturing 22 process; provided, that if the industrial or manufacturing 23 customer has elected delivery services, the customer shall 24 pay transition charges applicable to the electric power and 25 energy consumed by the third-party contractor unless such 26 charges are otherwise paid by the third party contractor, 27 which shall be calculated based on the usage of, and the base 28 rates or the contract rates applicable to, the third-party 29 contractor in accordance with Section 16-102. 30 "Base rates" means the rates for those tariffed services 31 that the electric utility is required to offer pursuant to 32 subsection (a) of Section 16-103 and that were identified in 33 a rate order for collection of the electric utility's base 34 rate revenue requirement, excluding (i) separate automatic -6- SRS90HB0362JJsaam02 1 rate adjustment riders then in effect, (ii) special or 2 negotiated contract rates, (iii) delivery services tariffs 3 filed pursuant to Section 16-108, (iv) real-time pricing, or 4 (v) tariffs that were in effect prior to October 1, 1996 and 5 that based charges for services on an index or average of 6 other utilities' charges, but including (vi) any subsequent 7 redesign of such rates for tariffed services that is 8 authorized by the Commission after notice and hearing. 9 "Competitive service" includes (i) any service that has 10 been declared to be competitive pursuant to Section 16-113 of 11 this Act, (ii) contract service, and (iii) services, other 12 than tariffed services, that are related to, but not 13 necessary for, the provision of electric power and energy or 14 delivery services. 15 "Contract service" means (1) services, including the 16 provision of electric power and energy or other services, 17 that are provided by mutual agreement between an electric 18 utility and a retail customer that is located in the electric 19 utility's service area, provided that, delivery services 20 shall not be a contract service until such services are 21 declared competitive pursuant to Section 16-113; and also 22 means (2) the provision of electric power and energy by an 23 electric utility to retail customers outside the electric 24 utility's service area pursuant to Section 16-116. Provided, 25 however, contract service does not include electric utility 26 services provided pursuant to (i) contracts that retail 27 customers are required to execute as a condition of receiving 28 tariffed services, or (ii) special or negotiated rate 29 contracts for electric utility services that were entered 30 into between an electric utility and a retail customer prior 31 to the effective date of this amendatory Act of 1997 and 32 filed with the Commission. 33 "Delivery services" means those services provided by the 34 electric utility that are necessary in order for the -7- SRS90HB0362JJsaam02 1 transmission and distribution systems to function so that 2 retail customers located in the electric utility's service 3 area can receive electric power and energy from suppliers 4 other than the electric utility, and shall include, without 5 limitation, standard metering and billing services. 6 "Electric utility" means a public utility, as defined in 7 Section 3-105 of this Act, that has a franchise, license, 8 permit or right to furnish or sell electricity to retail 9 customers within a service area. 10 "Mandatory transition period" means the period from the 11 effective date of this amendatory Act of 1997 through January 12 1, 2005. 13 "Municipal system" shall have the meaning set forth in 14 Section 17-100. 15 "Real-time pricing" means charges for delivered electric 16 power and energy that vary on an hour-to-hour basis for 17 nonresidential retail customers and that vary on a periodic 18 basis during the day for residential retail customers. 19 "Retail customer" means a single entity using electric 20 power or energy at a single premises and that (A) either (i) 21 is receiving or is eligible to receive tariffed services from 22 an electric utility, or (ii) that is served by a municipal 23 system or electric cooperative within any area in which the 24 municipal system or electric cooperative is or would be 25 entitled to provide service under the law in effect 26 immediately prior to the effective date of this amendatory 27 Act of 1997, or (B) an entity which on the effective date of 28 this Act was receiving electric service from a public utility 29 and (i) was engaged in the practice of resale and 30 redistribution of such electricity within a building prior to 31 January 2, 1957, or (ii) was providing lighting services to 32 tenants in a multi-occupancy building, but only to the extent 33 such resale, redistribution or lighting service is authorized 34 by the electric utility's tariffs that were on file with the -8- SRS90HB0362JJsaam02 1 Commission on the effective date of this Act. 2 "Service area" means (i) the geographic area within which 3 an electric utility was lawfully entitled to provide electric 4 power and energy to retail customers as of the effective date 5 of this amendatory Act of 1997, and includes (ii) the 6 location of any retail customer to which the electric utility 7 was lawfully providing electric utility services on such 8 effective date. 9 "Small commercial retail customer" means those 10 nonresidential retail customers of an electric utility 11 consuming 15,000 kilowatt-hours or less of electricity 12 annually in its service area. 13 "Tariffed service" means services provided to retail 14 customers by an electric utility as defined by its rates on 15 file with the Commission pursuant to the provisions of 16 Article IX of this Act, but shall not include competitive 17 services. 18 "Transition charge" means a charge expressed in cents per 19 kilowatt-hour that is calculated for a customer or class of 20 customers as follows for each year in which an electric 21 utility is entitled to recover transition charges as provided 22 in Section 16-108: 23 (1) the amount of revenue that an electric utility 24 would receive from the retail customer or customers if it 25 were serving such customers' electric power and energy 26 requirements as a tariffed service based on (A) all of 27 the customers' actual usage during the 3 years ending 90 28 days prior to the date on which such customers were first 29 eligible for delivery services pursuant to Section 30 16-104, and (B) on (i) the base rates in effect on 31 October 1, 1996 (adjusted for the reductions required by 32 subsection (b) of Section 16-111, for any reduction 33 resulting from a rate decrease under Section 16-101(b), 34 for any restatement of base rates made in conjunction -9- SRS90HB0362JJsaam02 1 with an elimination of the fuel adjustment clause 2 pursuant to subsection (b), (d), or (f) of Section 9-220 3 and for any removal of decommissioning costs from base 4 rates pursuant to Section 16-114) and any separate 5 automatic rate adjustment riders (other than a 6 decommissioning rate as defined in Section 16-114) under 7 which the customers were receiving or, had they been 8 customers, would have received electric power and energy 9 from the electric utility during the year immediately 10 preceding the date on which such customers were first 11 eligible for delivery service pursuant to Section 16-104, 12 or (ii) to the extent applicable, any contract rates, 13 including contracts or rates for consolidated or 14 aggregated billing, under which such customers were 15 receiving electric power and energy from the electric 16 utility during such year; 17 (2) less the amount of revenue, other than revenue 18 from transition charges and decommissioning rates, that 19 the electric utility would receive from such retail 20 customers for delivery services provided by the electric 21 utility, assuming such customers were taking delivery 22 services for all of their usage, based on the delivery 23 services tariffs in effect during the year for which the 24 transition charge is being calculated and on the usage 25 identified in paragraph (1); 26 (3) less the market value for the electric power 27 and energy that the electric utility would have used to 28 supply all of such customers' electric power and energy 29 requirements, as a tariffed service, based on the usage 30 identified in paragraph (1), with such market value 31 determined in accordance with Section 16-112 of this Act; 32 (4) less the following amount which represents the 33 amount to be attributed to new revenue sources and cost 34 reductions by the electric utility through the end of the -10- SRS90HB0362JJsaam02 1 period for which transition costs are recovered pursuant 2 to Section 16-108, referred to in this Article XVI as a 3 "mitigation factor": 4 (A) for nonresidential retail customers, an 5 amount equal to the greater of (i) 0.5 cents per 6 kilowatt-hour during the period October 1, 1999 7 through December 31, 2004, 0.6 cents per 8 kilowatt-hour in calendar year 2005, and 0.9 cents 9 per kilowatt-hour in calendar year 2006, multiplied 10 in each year by the usage identified in paragraph 11 (1), or (ii) an amount equal to the following 12 percentages of the amount produced by applying the 13 applicable base rates (adjusted as described in 14 subparagraph (1)(B)) or contract rate to the usage 15 identified in paragraph (1): 8% for the period 16 October 1, 1999 through December 31, 2002, 10% in 17 calendar years 2003 and 2004, 11% in calendar year 18 2005 and 12% in calendar year 2006; and 19 (B) for residential retail customers, an 20 amount equal to the following percentages of the 21 amount produced by applying the base rates in effect 22 on October 1, 1996 (adjusted as described in 23 subparagraph (1)(B)) to the usage identified in 24 paragraph (1): (i) 6% from May 1, 2002 through 25 December 31, 2002, (ii) 7% in calendar years 2003 26 and 2004, (iii) 8% in calendar year 2005, and (iv) 27 10% in calendar year 2006; 28 (5) divided by the usage of such customers 29 identified in paragraph (1), 30 provided that the transition charge shall never be less than 31 zero. 32 "Unbundled service" means a component or constituent part 33 of a tariffed service which the electric utility subsequently 34 offers separately to its customers. -11- SRS90HB0362JJsaam02 1 (220 ILCS 5/16-103 new) 2 Sec. 16-103. Service obligations of electric utilities. 3 (a) An electric utility shall continue offering to 4 retail customers each tariffed service that it offered as a 5 distinct and identifiable service on the effective date of 6 this amendatory Act of 1997 until the service is (i) 7 declared competitive pursuant to Section 16-113, or (ii) 8 abandoned pursuant to Section 8-508. Nothing in this 9 subsection shall be construed as limiting an electric 10 utility's right to propose, or the Commission's power to 11 approve, allow or order modifications in the rates, terms and 12 conditions for such services pursuant to Article IX or 13 Section 16-111 of this Act. 14 (b) An electric utility shall also offer, as tariffed 15 services, delivery services in accordance with this Article, 16 the power purchase options described in Section 16-110 and 17 real-time pricing as provided in Section 16-107. 18 (c) Notwithstanding any other provision of this Article, 19 each electric utility shall continue offering to all 20 residential customers and to all small commercial retail 21 customers in its service area, as a tariffed service, bundled 22 electric power and energy delivered to the customer's 23 premises consistent with the bundled utility service provided 24 by the electric utility on the effective date of this 25 amendatory Act of 1997. Upon declaration of the provision of 26 electric power and energy as competitive, the electric 27 utility shall continue to offer to such customers, as a 28 tariffed service, bundled service options at rates which 29 reflect recovery of all cost components for providing the 30 service. For those components of the service which have been 31 declared competitive, cost shall be the market based prices. 32 Market based prices as referred to herein shall mean, for 33 electric power and energy, either (i) those prices for 34 electric power and energy determined as provided in Section -12- SRS90HB0362JJsaam02 1 16-112, or (ii) the electric utility's cost of obtaining the 2 electric power and energy at wholesale through a competitive 3 bidding or other arms-length acquisition process. 4 (d) Any residential or small commercial retail customer 5 which elects delivery services is entitled to return to the 6 electric utility's bundled utility tariffed service offering 7 provided in accordance with subsection (c) of this Section 8 upon payment of a reasonable administrative fee which shall 9 be set forth in the tariff, provided, however, that the 10 electric utility shall be entitled to impose the condition 11 that such customer may not elect delivery services for up to 12 24 months thereafter. 13 (e) The Commission shall not require an electric utility 14 to offer any tariffed service other than the services 15 required by this Section, and shall not require an electric 16 utility to offer any competitive service. 17 (220 ILCS 5/16-104 new) 18 Sec. 16-104. Delivery services transition plan. An 19 electric utility shall provide delivery services to retail 20 customers in accordance with the provisions of this Section. 21 (a) Each electric utility shall offer delivery services 22 to retail customers located in its service area in accordance 23 with the following provisions: 24 (1) On or before October 1, 1999, the electric 25 utility shall offer delivery services (i) to any 26 non-residential retail customer whose average monthly 27 maximum electrical demand on the electric utility's 28 system during the 6 months with the customer's highest 29 monthly maximum demands in the 12 months ending June 30, 30 1999 equals or exceeds 4 megawatts; (ii) to any 31 non-governmental, non-residential, commercial retail 32 customers under common ownership doing business at 10 or 33 more separate locations within the electric utility's -13- SRS90HB0362JJsaam02 1 service area, if the aggregate coincident average monthly 2 maximum electrical demand of all such locations during 3 the 6 months with the customer's highest monthly maximum 4 electrical demands during the 12 months ending June 30, 5 1999 equals or exceeds 9.5 megawatts, provided, however, 6 that an electric utility's obligation to offer delivery 7 services under this clause (ii) shall not exceed 3.5% of 8 the maximum electric demand on the electric utility's 9 system in the 12 months ending June 30, 1999; and (iii) 10 to non-residential retail customers whose annual electric 11 energy use comprises 33% of the kilowatt-hour sales, 12 excluding the kilowatt-hour sales to customers described 13 in clauses (i) and (ii), to each non-residential retail 14 customer class of the electric utility. 15 (2) On or before October 1, 2000, the electric 16 utility shall offer delivery services to the eligible 17 governmental customers described in subsections (a) and 18 (b) of Section 16-125A if the aggregate coincident 19 average monthly maximum electrical demand of such 20 customers during the 6 months with the customers' highest 21 monthly maximum electrical demands during the 12 months 22 ending June 30, 2000 equals or exceeds 9.5 megawatts. 23 (3) On or before December 31, 2000, the electric 24 utility shall offer delivery services to all remaining 25 nonresidential retail customers in its service area. 26 (4) On or before May 1, 2002, the electric utility 27 shall offer delivery services to all residential retail 28 customers in its service area. 29 The loads and kilowatt-hour sales used for purposes of 30 this subsection shall be those for the 12 months ending June 31 30, 1999 for nonresidential retail customers. The electric 32 utility shall identify those customers to be offered delivery 33 service pursuant to clause (1)(iii) pursuant to a lottery or 34 other random non-discriminatory selection process set forth -14- SRS90HB0362JJsaam02 1 in the electric utility's delivery services implementation 2 plan pursuant to Section 16-105. Provided, that 3 non-residential retail customers under common ownership at 4 separate locations within the electric utility's service area 5 may elect, prior to the date the electric utility conducts 6 the lottery or other random selection process for purposes of 7 clause (1)(iii), to designate themselves as a common 8 ownership group, to be excluded from such lottery and to 9 instead participate in a separate lottery for such common 10 ownership group pursuant to which delivery services will be 11 offered to non-residential retail customers comprising 33% of 12 the total kilowatt-hour sales to the common ownership group 13 on or before October 1, 1999. For purposes of this 14 subsection (a), an electric utility may define "common 15 ownership" to exclude sites which are not part of the same 16 business, provided, that auxiliary establishments as defined 17 in the Standard Industrial Classification Manual published by 18 the United States Office of Management and Budget shall not 19 be excluded. 20 (b) The electric utility shall allow the aggregation of 21 loads that are eligible for delivery services so long as such 22 aggregation meets the criteria for delivery of electric power 23 and energy applicable to the electric utility established by 24 the regional reliability council to which the electric 25 utility belongs, by an independent system operating 26 organization to which the electric utility belongs, or by 27 another organization responsible for overseeing the integrity 28 and reliability of the transmission system, as such criteria 29 are in effect from time to time. The Commission may adopt 30 rules and regulations governing the criteria for aggregation 31 of the loads utilizing delivery services, but its failure to 32 do so shall not preclude any eligible customer from electing 33 delivery services. The electric utility shall allow such 34 aggregation for any voluntary grouping of customers, -15- SRS90HB0362JJsaam02 1 including without limitation those having a common agent with 2 contractual authority to purchase electric power and energy 3 and delivery services on behalf of all customers in the 4 grouping. 5 (c) An electric utility shall allow a retail customer 6 that generates power for its own use to include the 7 electrical demand obtained from the customer's cogeneration 8 or self-generation facilities that is coincident with the 9 retail customer's maximum monthly electrical demand on the 10 electric utility's system in any determination of the 11 customer's maximum monthly electrical demand for purposes of 12 determining when such retail customer shall be offered 13 delivery services pursuant to clause (i) of subparagraph (1) 14 of subsection (a) of this Section. 15 (d) The Commission shall establish charges, terms and 16 conditions for delivery services in accordance with Section 17 16-108. 18 (e) Subject to the terms and conditions which the 19 electric utility is entitled to impose in accordance with 20 Section 16-108, a retail customer that is eligible to elect 21 delivery services pursuant to subsection (a) may place all or 22 a portion of its electric power and energy requirements on 23 delivery services. 24 (f) An electric utility may require a retail customer 25 who elects to (i) use an alternative retail electric supplier 26 or another electric utility for some but not all of its 27 electric power or energy requirements, and (ii) use the 28 electric utility for any portion of its remaining electric 29 power and energy requirements, to place the portion of the 30 customer's electric power or energy requirement that is to be 31 served by the electric utility on a tariff containing charges 32 that are set to recover the lowest reasonably available cost 33 to the electric utility of acquiring electric power and 34 energy on the wholesale electric market to serve such -16- SRS90HB0362JJsaam02 1 remaining portion of the customer's electric power and energy 2 requirement, reasonable compensation for arranging for and 3 providing such electric power or energy, and the electric 4 utility's other costs of providing service to such remaining 5 electric power and energy requirement. 6 (220 ILCS 5/16-105 new) 7 Sec. 16-105. Delivery services implementation plan. To 8 ensure the safe and orderly implementation of delivery 9 services, each electric utility shall submit to the 10 Commission no later than March 1, 1999, a delivery services 11 implementation plan for non-residential customers and no 12 later than August 1, 2001, a delivery services implementation 13 plan for residential customers. The delivery services 14 implementation plan shall detail the process and procedures 15 by which each electric utility will offer delivery services 16 to each customer class and shall be designed to insure an 17 orderly transition and the maintenance of reliable service. 18 The Commission shall enter an order approving, or approving 19 as modified, the delivery services implementation plan of 20 each electric utility no later than 60 days prior to the date 21 on which the electric utility must commence offering such 22 services. 23 (220 ILCS 5/16-106 new) 24 Sec. 16-106. Billing experiments. During the mandatory 25 transition period, an electric utility may at its discretion 26 conduct one or more experiments for the provision or billing 27 of services on a consolidated or aggregated basis, for the 28 provision of real-time pricing, or other billing or pricing 29 experiments, and may include experimental programs offered to 30 groups of retail customers possessing common attributes as 31 defined by the electric utility, such as the members of an 32 organization that was established to serve a well-defined -17- SRS90HB0362JJsaam02 1 industry group, companies having multiple sites, or 2 closely-located or affiliated buildings, provided that such 3 groups exist for a purpose other than obtaining energy 4 services and have been in existence for at least 10 years. 5 The offering of such a program by an electric utility to 6 retail customers participating in the program, and the 7 participation by those customers in the program, shall not 8 create any right in any other retail customer or group of 9 customers to participate in the same or a similar program. 10 The Commission shall allow such experiments to go into effect 11 upon the filing by the electric utility of a statement 12 describing the program. Nothing contained in this Section 13 shall be deemed to prohibit the electric utility from 14 offering, or the Commission from approving, experimental 15 rates, tariffs and services in addition to those allowed 16 under this Section. The Commission shall review and report 17 annually the progress, participation and effects of such 18 experiments to the General Assembly. Based upon its review, 19 recommendations for modification of such experiments may be 20 made by the Commission to the Illinois General Assembly. 21 (220 ILCS 5/16-107 new) 22 Sec. 16-107. Real-time pricing. 23 (a) Each electric utility shall file, on or before May 24 1, 1998, a tariff or tariffs which allow nonresidential 25 retail customers in the electric utility's service area to 26 elect real-time pricing beginning October 1, 1998. 27 (b) Each electric utility shall file, on or before May 28 1, 2000, a tariff or tariffs which allow residential retail 29 customers in the electric utility's service area to elect 30 real-time pricing beginning October 1, 2000. 31 (c) The electric utility's tariff or tariffs filed 32 pursuant to this Section shall be subject to Article IX. -18- SRS90HB0362JJsaam02 1 (220 ILCS 5/16-108 new) 2 Sec. 16-108. Recovery of costs associated with the 3 provision of delivery services. 4 (a) An electric utility shall file a delivery services 5 tariff with the Commission at least 210 days prior to the 6 date that it is required to begin offering such services 7 pursuant to this Act. An electric utility shall provide the 8 components of delivery services that are subject to the 9 jurisdiction of the Federal Energy Regulatory Commission at 10 the same prices, terms and conditions set forth in its 11 applicable tariff as approved or allowed into effect by that 12 Commission. The Commission shall otherwise have the authority 13 pursuant to Article IX to review, approve, and modify the 14 prices, terms and conditions of those components of delivery 15 services not subject to the jurisdiction of the Federal 16 Energy Regulatory Commission, including the authority to 17 determine the extent to which such delivery services should 18 be offered on an unbundled basis. In making any such 19 determination the Commission shall consider, at a minimum, 20 the effect of additional unbundling on (i) the objective of 21 just and reasonable rates, (ii) electric utility employees, 22 and (iii) the development of competitive markets for electric 23 energy services in Illinois. 24 (b) The Commission shall enter an order approving, or 25 approving as modified, the delivery services tariff no later 26 than 30 days prior to the date on which the electric utility 27 must commence offering such services. The Commission may 28 subsequently modify such tariff pursuant to this Act. 29 (c) The electric utility's tariffs shall define the 30 classes of its customers for purposes of delivery services 31 charges. Delivery services shall be priced and made 32 available to all retail customers electing delivery services 33 in each such class on a non-discriminatory basis regardless 34 of whether the retail customer chooses the electric utility, -19- SRS90HB0362JJsaam02 1 an affiliate of the electric utility, or another entity as 2 its supplier of electric power and energy. Charges for 3 delivery services shall be cost based, and shall allow the 4 electric utility to recover the costs of providing delivery 5 services through its charges to its delivery service 6 customers that use the facilities and services associated 7 with such costs. Such costs shall include the costs of 8 owning, operating and maintaining transmission and 9 distribution facilities. The Commission shall also be 10 authorized to consider whether, and if so to what extent, the 11 following costs are appropriately included in the electric 12 utility's delivery services rates: (i) the costs of that 13 portion of generation facilities used for the production and 14 absorption of reactive power in order that retail customers 15 located in the electric utility's service area can receive 16 electric power and energy from suppliers other than the 17 electric utility, and (ii) the costs associated with the use 18 and redispatch of generation facilities to mitigate 19 constraints on the transmission or distribution system in 20 order that retail customers located in the electric utility's 21 service area can receive electric power and energy from 22 suppliers other than the electric utility. Nothing in this 23 subsection shall be construed as directing the Commission to 24 allocate any of the costs described in (i) or (ii) that are 25 found to be appropriately included in the electric utility's 26 delivery services rates to any particular customer group or 27 geographic area in setting delivery services rates. 28 (d) The Commission shall establish charges, terms and 29 conditions for delivery services that are just and reasonable 30 and shall take into account customer impacts when 31 establishing such charges. In establishing charges, terms and 32 conditions for delivery services, the Commission shall take 33 into account voltage level differences. A retail customer 34 shall have the option to request to purchase electric service -20- SRS90HB0362JJsaam02 1 at any delivery service voltage reasonably and technically 2 feasible from the electric facilities serving that customer's 3 premises provided that there are no significant adverse 4 impacts upon system reliability or system efficiency. A 5 retail customer shall also have the option to request to 6 purchase electric service at any point of delivery that is 7 reasonably and technically feasible provided that there are 8 no significant adverse impacts on system reliability or 9 efficiency. Such requests shall not be unreasonably denied. 10 (e) Electric utilities shall recover the costs of 11 installing, operating or maintaining facilities for the 12 particular benefit of one or more delivery services 13 customers, including without limitation any costs incurred in 14 complying with a customer's request to be served at a 15 different voltage level, directly from the retail customer or 16 customers for whose benefit the costs were incurred, to the 17 extent such costs are not recovered through the charges 18 referred to in subsections (c) and (d) of this Section. 19 (f) An electric utility shall be entitled but not 20 required to implement transition charges in conjunction with 21 the offering of delivery services pursuant to Section 16-104. 22 If an electric utility implements transition charges, it 23 shall implement such charges for all delivery services 24 customers and for all customers described in subsection (h). 25 Such charges shall be calculated as provided in Section 26 16-102, and shall be collected on each kilowatt-hour 27 delivered under a delivery services tariff to a retail 28 customer from the date the customer first takes delivery 29 services until December 31, 2006 except as provided in 30 subsection (h) of this Section. Provided, however, that an 31 electric utility shall be entitled to petition for entry of 32 an order by the Commission authorizing the electric utility 33 to implement transition charges for an additional period 34 ending no later than December 31, 2008. The electric utility -21- SRS90HB0362JJsaam02 1 shall file its petition with supporting evidence no earlier 2 than 16 months, and no later than 12 months, prior to 3 December 31, 2006. The Commission shall hold a hearing on 4 the electric utility's petition and shall enter its order no 5 later than 8 months after the petition is filed. The 6 Commission shall determine whether and to what extent the 7 electric utility shall be authorized to implement transition 8 charges for an additional period. The Commission may 9 authorize the electric utility to implement transition 10 charges for some or all of the additional period, and shall 11 determine the mitigation factors to be used in implementing 12 such transition charges; provided, that the Commission shall 13 not authorize mitigation factors less than 110% of those in 14 effect during the 12 months ended December 31, 2006. In 15 making its determination, the Commission shall consider the 16 following factors: the necessity to implement transition 17 charges for an additional period in order to maintain the 18 financial integrity of the electric utility; the prudence of 19 the electric utility's actions in reducing its costs since 20 the effective date of this amendatory Act of 1997; the 21 ability of the electric utility to provide safe, adequate and 22 reliable service to retail customers in its service area; and 23 the impact on competition of allowing the electric utility to 24 implement transition charges for the additional period. 25 (g) The electric utility shall file tariffs that 26 establish the transition charges to be paid by each class of 27 customers to the electric utility in conjunction with the 28 provision of delivery services. The electric utility's 29 tariffs shall define the classes of its customers for 30 purposes of calculating transition charges. The electric 31 utility's tariffs shall provide for the calculation of 32 transition charges on a customer-specific basis for any 33 retail customer whose average monthly maximum electrical 34 demand on the electric utility's system during the 6 months -22- SRS90HB0362JJsaam02 1 with the customer's highest monthly maximum electrical 2 demands equals or exceeds 3.0 megawatts for electric 3 utilities having more than 1,000,000 customers, and for other 4 electric utilities for any customer that has an average 5 monthly maximum electrical demand on the electric utility's 6 system of one megawatt or more, and (A) for which there 7 exists data on the customer's usage during the 3 years 8 preceding the date that the customer became eligible to take 9 delivery services, or (B) for which there does not exist data 10 on the customer's usage during the 3 years preceding the date 11 that the customer became eligible to take delivery services, 12 if in the electric utility's reasonable judgment there exists 13 comparable usage information or a sufficient basis to develop 14 such information, and further provided that the electric 15 utility can require customers for which an individual 16 calculation is made to sign contracts that set forth the 17 transition charges to be paid by the customer to the electric 18 utility pursuant to the tariff. 19 (h) An electric utility shall also be entitled to file 20 tariffs that allow it to collect transition charges from 21 retail customers in the electric utility's service area that 22 do not take delivery services but that take electric power or 23 energy from an alternative retail electric supplier or from 24 an electric utility other than the electric utility in whose 25 service area the customer is located. Such charges shall be 26 calculated, in accordance with the definition of transition 27 charges in Section 16-102, for the period of time that the 28 customer would be obligated to pay transition charges if it 29 were taking delivery services, except that no deduction for 30 delivery services revenues shall be made in such calculation, 31 and usage data from the customer's class shall be used where 32 historical usage data is not available for the individual 33 customer. The customer shall be obligated to pay such 34 charges on a lump sum basis on or before the date on which -23- SRS90HB0362JJsaam02 1 the customer commences to take service from the alternative 2 retail electric supplier or other electric utility, provided, 3 that the electric utility in whose service area the customer 4 is located shall offer the customer the option of signing a 5 contract pursuant to which the customer pays such charges 6 ratably over the period in which the charges would otherwise 7 have applied. 8 (i) An electric utility shall be entitled to add to the 9 bills of delivery services customers charges pursuant to 10 Sections 9-221, 9-222 (except as provided in Section 11 9-222.1), and Section 16-114 of this Act, Section 5-5 of the 12 Electricity Infrastructure Maintenance Fee Law, Section 6-5 13 of the Renewable Energy, Energy Efficiency, and Coal 14 Resources Development Law of 1997, and Section 13 of the 15 Energy Assistance Act of 1989. 16 (j) If a retail customer that obtains electric power and 17 energy from cogeneration or self-generation facilities 18 installed for its own use on or before January 1, 1997, 19 subsequently takes service from an alternative retail 20 electric supplier or an electric utility other than the 21 electric utility in whose service area the customer is 22 located for any portion of the customer's electric power and 23 energy requirements formerly obtained from those facilities 24 (including that amount purchased from the utility in lieu of 25 such generation and not as standby power purchases, under a 26 cogeneration displacement tariff in effect as of the 27 effective date of this amendatory Act of 1997), the 28 transition charges otherwise applicable pursuant to 29 subsections (f), (g), or (h) of this Section shall not be 30 applicable in any year to that portion of the customer's 31 electric power and energy requirements formerly obtained from 32 those facilities, provided, that for purposes of this 33 subsection (j), such portion shall not exceed the average 34 number of kilowatt-hours per year obtained from the -24- SRS90HB0362JJsaam02 1 cogeneration or self-generation facilities during the 3 years 2 prior to the date on which the customer became eligible for 3 delivery services, except as provided in subsection (f) of 4 Section 16-110. 5 (220 ILCS 5/16-109 new) 6 Sec. 16-109. Unbundling of delivery services; Commission 7 review. The General Assembly finds that the offering of 8 delivery services will, and is intended to, facilitate the 9 development of competition for generation services, and that 10 competition may develop for other services currently offered 11 on a tariffed basis by the electric utility. The Commission 12 shall open a proceeding to investigate the need for and 13 desirability of different or additional unbundling of 14 delivery services for some or all electric utilities 3 years 15 from the date that a tariff for delivery services is first 16 approved or allowed into effect pursuant to this Section. 17 The Commission shall open an additional proceeding to again 18 investigate the need for and desirability of different or 19 additional unbundling of delivery services for some or all 20 electric utilities, 3 years after the entry of its final 21 order in the first investigation proceeding. The Commission 22 shall issue its final order in each investigation proceeding 23 no later than 6 months after the proceeding is initiated. In 24 each such proceeding the Commission shall consider, at a 25 minimum, the effect of additional unbundling on (i) the 26 objective of just and reasonable rates, (ii) electric utility 27 employees, and (iii) the development of competitive markets 28 for electric energy services in Illinois. Specific changes 29 to the delivery services tariffs of individual electric 30 utilities to implement findings and directives stated in an 31 order in an investigation proceeding initiated under this 32 Section shall be addressed through individual electric 33 utility tariff filings. The Commission may also, in -25- SRS90HB0362JJsaam02 1 accordance with Section 16-108, upon complaint or upon its 2 own initiative without complaint, upon reasonable notice, 3 enter upon a hearing concerning the need and desirability of 4 requiring additional or other unbundling of delivery services 5 offered by electric utilities. 6 (220 ILCS 5/16-109A new) 7 Sec. 16-109A. Unbundling of prices for tariffed 8 services; Commission investigation. In addition to the 9 unbundling authorized under Sections 16-108 and 16-109, the 10 Commission shall have the authority to investigate the need 11 for, and to require, the restructuring or unbundling of 12 prices for tariffed services, other than delivery services, 13 offered by an electric utility; provided, however, that the 14 Commission shall not enter an order requiring the 15 restructuring or unbundling of prices for any such tariffed 16 services for a customer class of an electric utility prior to 17 the date that the class first becomes eligible for delivery 18 services pursuant to Section 16-104. 19 (220 ILCS 5/16-110 new) 20 Sec. 16-110. Delivery services customer power purchase 21 options. 22 (a) Each electric utility shall offer a tariffed service 23 or services in accordance with the terms and conditions set 24 forth in this Section pursuant to which its non-residential 25 delivery services customers may purchase from the electric 26 utility an amount of electric power and energy that is equal 27 to or less than the amounts that are delivered by such 28 electric utility. 29 (b) Except as provided in subsection (o) of Section 30 16-112, a non-residential delivery services customer that is 31 paying transition charges to the electric utility shall be 32 permitted to purchase electric power and energy from the -26- SRS90HB0362JJsaam02 1 electric utility at a price or prices equal to the sum of (i) 2 the market values that are determined for the electric 3 utility in accordance with Section 16-112 and used by the 4 electric utility to calculate the customer's transition 5 charges and (ii) a fee that compensates the electric utility 6 for any administrative costs it incurs in arranging to supply 7 such electric power and energy. The electric utility may 8 require that the customer purchase such electric power and 9 energy for periods of not less than one year and may also 10 require that the customer give up to 30 days notice for a 11 purchase of one year's duration, and 90 day's notice for a 12 purchase of more than one year's duration. A non-residential 13 delivery service customer exercising the option described in 14 this subsection may sell or assign its interests in the 15 electric power or energy that the customer has purchased. At 16 least twice per year, each electric utility shall notify its 17 small commercial retail customers, through bill inserts and 18 other similar means, of their option to obtain electric power 19 and energy through purchases at market value pursuant to this 20 subsection. 21 (c) After the transition charge period applicable to a 22 non-residential delivery services customer, and until the 23 provision of electric power and energy is declared 24 competitive for the customer group to which the customer 25 belongs, a non-residential delivery services customer that 26 paid any transition charges it was legally obligated to pay 27 to an electric utility shall be permitted to purchase 28 electric power and energy from the electric utility for 29 contract periods of one year at a price or prices equal to 30 the sum of (i) the market value determined for that 31 customer's class pursuant to Section 16-112 and (ii) to the 32 extent it is not included in such market value, a fee to 33 compensate the electric utility for the service of arranging 34 the supply or purchase of such electric power and energy. -27- SRS90HB0362JJsaam02 1 The electric utility may require that a delivery services 2 customer give the following notice for such a purchase: (i) 3 for a small commercial retail customer, not more than 30 4 days; (ii) for a nonresidential customer which is not a small 5 commercial retail customer but which has maximum electrical 6 demand of less than 500 kilowatts, not more than 6 months; 7 (iii) for a nonresidential customer with maximum electrical 8 demand of 500 kilowatts or more but less than one megawatt, 9 not more than 9 months; and (iv) for a nonresidential 10 customer with maximum electrical demand of one megawatt or 11 more, not more than one year. At least twice per year, each 12 electric utility shall notify its small commercial retail 13 customers, through bill inserts or other similar means, of 14 their option to obtain electric power and energy through 15 purchases at market value pursuant to this subsection. 16 (d) After the transition charge period applicable to a 17 non-residential delivery services customer, and until the 18 provision of electric power and energy is declared 19 competitive for the customer group to which the customer 20 belongs, a non-residential delivery services customer, other 21 than a small commercial retail customer, that paid any 22 transition charges it was legally obligated to pay to an 23 electric utility shall be permitted to purchase electric 24 power and energy from the electric utility for contract 25 periods of one year at a price or prices equal to (A) the sum 26 of (i) the electric utility's actual cost of procuring such 27 electric power and energy and (ii) a broker's fee to 28 compensate the electric utility for arranging the supply, or, 29 if the utility so elects, (B) the market value of electric 30 power or energy provided by the electric utility determined 31 as set forth in the electric utility's tariff for that 32 customer's class. The electric utility may require that the 33 delivery services customer give up to 30 days notice for such 34 a purchase. -28- SRS90HB0362JJsaam02 1 (e) Each delivery services customer purchasing electric 2 power and energy from the electric utility pursuant to a 3 tariff filed in accordance with this Section shall also pay 4 all of the applicable charges set forth in the electric 5 utility's delivery services tariffs and any other tariffs 6 applicable to the services provided to that customer by the 7 electric utility. 8 (f) An electric utility can require a retail customer 9 taking delivery services that formerly generated electric 10 power and energy for its own use and that would not otherwise 11 pay transition charges on a portion of its electric power and 12 energy requirements served on delivery services to pay 13 transition charges on that portion of the customer's electric 14 power and energy requirements as a condition of exercising 15 the delivery services customer power purchase options set 16 forth in this Section. 17 (220 ILCS 5/16-111 new) 18 Sec. 16-111. Rates and restructuring transactions during 19 mandatory transition period. 20 (a) During the mandatory transition period, 21 notwithstanding any provision of Article IX of this Act, and 22 except as provided in subsections (b), (d), (e), and (f) of 23 this Section, the Commission shall not (i) initiate, 24 authorize or order any change by way of increase (other than 25 in connection with a request for rate increase which was 26 filed after September 1, 1997 but prior to October 15, 1997, 27 by an electric utility serving less than 12,500 customers in 28 this state), (ii) initiate or, unless requested by the 29 electric utility, authorize or order any change by way of 30 decrease, restructuring or unbundling (except as provided in 31 Section 16-109A), in the rates of any electric utility that 32 were in effect on October 1, 1996, or (iii) in any order 33 approving any application for a merger pursuant to Section -29- SRS90HB0362JJsaam02 1 7-204 that was pending as of May 16, 1997, impose any 2 condition requiring any filing for an increase, decrease, or 3 change in, or other review of, an electric utility's rates or 4 enforce any such condition of any such order; provided, 5 however, that this subsection shall not prohibit the 6 Commission from: 7 (1) approving the application of an electric 8 utility to implement an alternative to rate of return 9 regulation or a regulatory mechanism that rewards or 10 penalizes the electric utility through adjustment of 11 rates based on utility performance, pursuant to Section 12 9-244; 13 (2) authorizing an electric utility to eliminate 14 its fuel adjustment clause and adjust its base rate 15 tariffs in accordance with subsection (b), (d), or (f) of 16 Section 9-220 of this Act, to fix its fuel adjustment 17 factor in accordance with subsection (c) of Section 9-220 18 of this Act, or to eliminate its fuel adjustment clause 19 in accordance with subsection (e) of Section 9-220 of 20 this Act; 21 (3) ordering into effect tariffs for delivery 22 services and transition charges in accordance with 23 Sections 16-104 and 16-108, for real-time pricing in 24 accordance with Section 16-107, or the options required 25 by Section 16-110 and subsection (n) of 16-112, allowing 26 a billing experiment in accordance with Section 16-106, 27 or modifying delivery services tariffs in accordance with 28 Section 16-109; or 29 (4) ordering or allowing into effect any tariff to 30 recover charges pursuant to Sections 9-201.5, 9-220.1, 31 9-221, 9-222 (except as provided in Section 9-222.1), 32 16-108, and 16-114 of this Act, Section 5-5 of the 33 Electricity Infrastructure Maintenance Fee Law, Section 34 6-5 of the Renewable Energy, Energy Efficiency, and Coal -30- SRS90HB0362JJsaam02 1 Resources Development Law of 1997, and Section 13 of the 2 Energy Assistance Act of 1989. 3 (b) Notwithstanding the provisions of subsection (a), 4 each Illinois electric utility serving more than 12,500 5 customers in Illinois shall file tariffs (i) reducing, 6 effective August 1, 1998, each component of its base rates to 7 residential retail customers by 15% from the base rates in 8 effect immediately prior to January 1, 1998 and (ii) if the 9 public utility provides electric service to more than 500,000 10 customers in this State on the effective date of this 11 amendatory Act of 1997, reducing, effective May 1, 2002, each 12 component of its base rates to residential retail customers 13 by an additional 5% from the base rates in effect immediately 14 prior to January 1, 1998. Provided, however, that if an 15 electric utility's average residential retail rate is less 16 than or equal to the average residential retail rate for a 17 group of Midwest Utilities (consisting of all investor-owned 18 electric utilities with annual system peaks in excess of 1000 19 megawatts in the States of Illinois, Indiana, Iowa, Kentucky, 20 Michigan, Missouri, Ohio, and Wisconsin), based on data 21 reported on Form 1 to the Federal Energy Regulatory 22 Commission for calendar year 1995, then it shall only be 23 required to file tariffs (i) reducing, effective August 1, 24 1998, each component of its base rates to residential retail 25 customers by 5% from the base rates in effect immediately 26 prior to January 1, 1998, (ii) reducing, effective October 1, 27 2000, its base rates to residential retail customers by the 28 lesser of 5% of the base rates in effect immediately prior to 29 January 1, 1998 or the percentage by which the electric 30 utility's average residential retail rate exceeds the average 31 residential retail rate of the Midwest Utilities, based on 32 data reported on Form 1 to the Federal Energy Regulatory 33 Commission for calendar year 1999, and (iii) reducing, 34 effective October 1, 2002, each component of its base rates -31- SRS90HB0362JJsaam02 1 to residential retail customers by an additional amount equal 2 to the lesser of 5% of the base rates in effect immediately 3 prior to January 1, 1998 or the percentage by which the 4 electric utility's average residential retail rate exceeds 5 the average residential retail rate of the Midwest Utilities, 6 based on data reported on Form 1 to the Federal Energy 7 Regulatory Commission for calendar year 2001. Provided, 8 further, that any electric utility for which a decrease in 9 base rates has been or is placed into effect between October 10 1, 1996 and the dates specified in the preceding sentences of 11 this subsection, other than pursuant to the requirements of 12 this subsection, shall be entitled to reduce the amount of 13 any reduction or reductions in its base rates required by 14 this subsection by the amount of such other decrease. The 15 tariffs required under this subsection shall be filed 45 days 16 in advance of the effective date. Notwithstanding anything to 17 the contrary in Section 9-220 of this Act, no restatement of 18 base rates in conjunction with the elimination of a fuel 19 adjustment clause under that Section shall result in a lesser 20 decrease in base rates than customers would otherwise receive 21 under this subsection had the electric utility's fuel 22 adjustment clause not been eliminated. 23 (c) Any utility reducing its base rates by 15% on August 24 1, 1998 pursuant to subsection (b) shall include the 25 following statement on its bills for residential customers 26 from August 1 through December 31, 1998: "Effective August 1, 27 1998, your rates have been reduced by 15% by the Electric 28 Service Customer Choice and Rate Relief Law of 1997 passed by 29 the Illinois General Assembly.". Any utility reducing its 30 base rates by 5% on August 1, 1998, pursuant to subsection 31 (b) shall include the following statement on its bills for 32 residential customers from August 1 through December 31, 33 1998: "Effective August 1, 1998, your rates have been 34 reduced by 5% by the Electric Service Customer Choice and -32- SRS90HB0362JJsaam02 1 Rate Relief Law of 1997 passed by the Illinois General 2 Assembly.". 3 (d) During the mandatory transition period, but not 4 before January 1, 2000, and notwithstanding the provisions 5 of subsection (a), an electric utility may request an 6 increase in its base rates if the electric utility 7 demonstrates that the 2-year average of its earned rate of 8 return on common equity, calculated as its net income 9 applicable to common stock divided by the average of its 10 beginning and ending balances of common equity using data 11 reported in the electric utility's Form 1 report to the 12 Federal Energy Regulatory Commission but adjusted to remove 13 the effects of accelerated depreciation or amortization or 14 other transition or mitigation measures implemented by the 15 electric utility pursuant to subsection (g) of this Section 16 and the effect of any refund paid pursuant to subsection (e) 17 of this Section, is below the 2-year average for the same 2 18 years of the monthly average yields of 30-year U.S. Treasury 19 bonds published by the Board of Governors of the Federal 20 Reserve System in its weekly H.15 Statistical Release or 21 successor publication. The Commission shall review the 22 electric utility's request, and may review the justness and 23 reasonableness of all rates for tariffed services, in 24 accordance with the provisions of Article IX of this Act, 25 provided that the Commission shall consider any special or 26 negotiated adjustments to the revenue requirement agreed to 27 between the electric utility and the other parties to the 28 proceeding. In setting rates under this Section, the 29 Commission shall exclude the costs and revenues that are 30 associated with competitive services and any billing or 31 pricing experiments conducted under Section 16-106. 32 (e) For the purposes of this subsection (e) all 33 calculations and comparisions shall be performed for the 34 Illinois operations of multijurisdictional utilities. During -33- SRS90HB0362JJsaam02 1 the mandatory transition period, notwithstanding the 2 provisions of subsection (a), if the 2-year average of an 3 electric utility's earned rate of return on common equity, 4 calculated as its net income applicable to common stock 5 divided by the average of its beginning and ending balances 6 of common equity using data reported in the electric 7 utility's Form 1 report to the Federal Energy Regulatory 8 Commission but adjusted to remove the effect of any refund 9 paid under this subsection (e), and further adjusted to 10 include the annual amortization of any difference between the 11 consideration received by an affiliated interest of the 12 electric utility in the sale of an asset which had been sold 13 or transferred by the electric utility to the affiliated 14 interest subsequent to the effective date of this amendatory 15 Act of 1997 and the consideration for which such asset had 16 been sold or transferred to the affiliated interest, with 17 such difference to be amortized ratably from the date of the 18 sale by the affiliated interest to December 31, 2006, exceeds 19 the 2-year average of the Index for the same 2 years by 1.5 20 or more percentage points, the electric utility shall make 21 refunds to customers beginning the first billing day of April 22 in the following year in the manner described in paragraph 23 (3) of this subsection. For purposes of this subsection (e), 24 the "Index" shall be the sum of (A) the average for the 12 25 months ended September 30 of the monthly average yields of 26 30-year U.S. Treasury bonds published by the Board of 27 Governors of the Federal Reserve System in its weekly H.15 28 Statistical Release or successor publication for each year 29 1998 through 2004, and (B) (i) 4.00 percentage points for 30 each of the 12-month periods ending September 30, 1998 31 through September 30, 1999 or (ii) 5.00 percentage points for 32 each of the 12-month periods ending September 30, 2000 33 through September 30, 2004. 34 (1) For purposes of this subsection (e), "excess -34- SRS90HB0362JJsaam02 1 earnings" means the difference between (A) the 2-year 2 average of the electric utility's earned rate of return 3 on common equity, less (B) the 2-year average of the sum 4 of (i) the Index applicable to each of the 2 years and 5 (ii) 1.5 percentage points; provided, that "excess 6 earnings" shall never be less than zero. 7 (2) On or before March 31 of each year 2000 through 8 2005 each electric utility shall file a report with the 9 Commission showing its earned rate of return on common 10 equity, calculated in accordance with this subsection, 11 for the preceding calendar year and the average for the 12 preceding 2 calendar years. 13 (3) If an electric utility has excess earnings, 14 determined in accordance with paragraphs (1) and (2) of 15 this subsection, the refunds which the electric utility 16 shall pay to its customers beginning the first billing 17 day of April in the following year shall be calculated 18 and applied as follows: 19 (i) The electric utility's excess earnings 20 shall be multiplied by the average of the beginning 21 and ending balances of the electric utility's common 22 equity for the 2-year period in which excess 23 earnings occurred. 24 (ii) The result of the calculation in (i) 25 shall be multiplied by 0.50 and then divided by a 26 number equal to 1 minus the electric utility's 27 composite federal and State income tax rate. 28 (iii) The result of the calculation in (ii) 29 shall be divided by the sum of the electric 30 utility's projected total kilowatt-hour sales to 31 retail customers plus projected kilowatt-hours to be 32 delivered to delivery services customers over a one 33 year period beginning with the first billing date in 34 April in the succeeding year to determine a cents -35- SRS90HB0362JJsaam02 1 per kilowatt-hour refund factor. 2 (iv) The cents per kilowatt-hour refund factor 3 calculated in (iii) shall be credited to the 4 electric utility's customers by applying the factor 5 on the customer's monthly bills to each 6 kilowatt-hour sold or delivered until the total 7 amount calculated in (ii) has been paid to 8 customers. 9 (f) During the mandatory transition period, an electric 10 utility may file revised tariffs reducing the price of any 11 tariffed service offered by the electric utility for all 12 customers taking that tariffed service, which shall be 13 effective 7 days after filing. 14 (g) During the mandatory transition period, an electric 15 utility may, without obtaining any approval of the Commission 16 other than that provided for in this subsection and 17 notwithstanding any other provision of this Act or any rule 18 or regulation of the Commission that would require such 19 approval: 20 (1) implement a reorganization, other than a merger 21 of 2 or more public utilities as defined in Section 3-105 22 or their holding companies; 23 (2) retire generating plants from service; 24 (3) sell, assign, lease or otherwise transfer 25 assets to an affiliated or unaffiliated entity and as 26 part of such transaction enter into service agreements, 27 power purchase agreements, or other agreements with the 28 transferee; provided, however, that the prices, terms and 29 conditions of any power purchase agreement must be 30 approved or allowed into effect by the Federal Energy 31 Regulatory Commission; or 32 (4) use any accelerated cost recovery method 33 including accelerated depreciation, accelerated 34 amortization or other capital recovery methods, or record -36- SRS90HB0362JJsaam02 1 reductions to the original cost of its assets. 2 In order to implement a reorganization, retire generating 3 plants from service, or sell, assign, lease or otherwise 4 transfer assets pursuant to this Section, the electric 5 utility shall comply with subsections (c) and (d) of Section 6 16-128, if applicable, and provide the Commission with at 7 least 30 days notice of the proposed reorganization or 8 transaction, which notice shall include the following 9 information: 10 (i) a complete statement of the entries that 11 the electric utility will make on its books and 12 records of account to implement the proposed 13 reorganization or transaction together with a 14 certification from an independent certified public 15 accountant that such entries are in accord with 16 generally accepted accounting principles and, if the 17 Commission has previously approved guidelines for 18 cost allocations between the utility and its 19 affiliates, a certification from the chief 20 accounting officer of the utility that such entries 21 are in accord with those cost allocation guidelines; 22 (ii) a description of how the electric utility 23 will use proceeds of any sale, assignment, lease or 24 transfer to retire debt or otherwise reduce or 25 recover the costs of services provided by such 26 electric utility; 27 (iii) a list of all federal approvals or 28 approvals required from departments and agencies of 29 this State, other than the Commission, that the 30 electric utility has or will obtain before 31 implementing the reorganization or transaction; 32 (iv) an irrevocable commitment by the electric 33 utility that it will not, as a result of the 34 transaction, impose any stranded cost charges that -37- SRS90HB0362JJsaam02 1 it might otherwise be allowed to charge retail 2 customers under federal law or increase the 3 transition charges that it is otherwise entitled to 4 collect under this Article XVI; and 5 (v) if the electric utility proposes to sell, 6 assign, lease or otherwise transfer a generating 7 plant that brings the amount of net dependable 8 generating capacity transferred pursuant to this 9 subsection to an amount equal to or greater than 15% 10 of the electric utility's net dependable capacity as 11 of the effective date of this amendatory Act of 12 1997, and enters into a power purchase agreement 13 with the entity to which such generating plant is 14 sold, assigned, leased, or otherwise transferred, 15 the electric utility also agrees, if its fuel 16 adjustment clause has not already been eliminated, 17 to eliminate its fuel adjustment clause in 18 accordance with subsection (b) of Section 9-220 for 19 a period of time equal to the length of any such 20 power purchase agreement or successor agreement, or 21 until January 1, 2005, whichever is longer; if the 22 capacity of the generating plant so transferred and 23 related power purchase agreement does not result in 24 the elimination of the fuel adjustment clause under 25 this subsection, and the fuel adjustment clause has 26 not already been eliminated, the electric utility 27 shall agree that the costs associated with the 28 transferred plant that are included in the 29 calculation of the rate per kilowatt-hour to be 30 applied pursuant to the electric utility's fuel 31 adjustment clause during such period shall not 32 exceed the per kilowatt-hour cost associated with 33 such generating plant included in the electric 34 utility's fuel adjustment clause during the full -38- SRS90HB0362JJsaam02 1 calendar year preceding the transfer, with such 2 limit to be adjusted each year thereafter by the 3 Gross Domestic Product Implicit Price Deflator. 4 (vi) In addition, if the electric utility 5 proposes to sell, assign, or lease, (A) either (1) 6 an amount of generating plant that brings the amount 7 of net dependable generating capacity transferred 8 pursuant to this subsection to an amount equal to or 9 greater than 15% of its net dependable capacity on 10 the effective date of this amendatory Act of 1997, 11 or (2) one or more generating plants with a total 12 net dependable capacity of 1100 megawatts, or (B) 13 transmission and distribution facilities that either 14 (1) bring the amount of transmission and 15 distribution facilities transferred pursuant to this 16 subsection to an amount equal to or greater than 15% 17 of the electric utility's total depreciated original 18 cost investment in such facilities, or (2) represent 19 an investment of $25,000,000 in terms of total 20 depreciated original cost, the electric utility 21 shall provide, in addition to the information listed 22 in subparagraphs (i) through (v), the following 23 information: a description of how the electric 24 utility will meet its service obligations under this 25 Act in a safe and reliable manner. If the Commission 26 has not issued an order initiating a hearing on the 27 proposed transaction within 30 days after the date 28 the electric utility's notice is filed, the 29 transaction shall be deemed approved. The 30 Commission may, after notice and hearing, prohibit 31 the proposed transaction if it makes either or both 32 of the following findings: (1) that the proposed 33 transaction will render the electric utility unable 34 to provide its tariffed services in a safe and -39- SRS90HB0362JJsaam02 1 reliable manner, or (2) that there is a strong 2 likelihood that consummation of the proposed 3 transaction will result in the electric utility 4 being entitled to request an increase in its base 5 rates during the mandatory transition period 6 pursuant to subsection (d) of this Section. Any 7 hearing initiated by the Commission into the 8 proposed transaction shall be completed, and the 9 Commission's final order approving or prohibiting 10 the proposed transaction shall be entered, within 90 11 days after the date the electric utility's notice 12 was filed. Provided, however, that a sale, 13 assignment, or lease of transmission facilities to 14 an independent system operator that meets the 15 requirements of Section 16-126 shall not be subject 16 to Commission approval under this Section. 17 In any proceeding conducted by the Commission 18 pursuant to this subparagraph (vi), intervention 19 shall be limited to parties with a direct interest 20 in the transaction which is the subject of the 21 hearing and any statutory consumer protection agency 22 as defined in subsection (d) of Section 9-102.1. 23 Notwithstanding the provisions of Section 10-113 of 24 this Act, any application seeking rehearing of an 25 order issued under this subparagraph (vi), whether 26 filed by the electric utility or by an intervening 27 party, shall be filed within 10 days after service 28 of the order. 29 The Commission shall not in any subsequent proceeding or 30 otherwise, review such a reorganization or other transaction 31 authorized by this Section, but shall retain the authority to 32 allocate costs as stated in Section 16-111(i). An entity to 33 which an electric utility sells, assigns, leases or transfers 34 assets pursuant to this subsection (g) shall not, as a result -40- SRS90HB0362JJsaam02 1 of the transactions specified in this subsection (g), be 2 deemed a public utility as defined in Section 3-105. Nothing 3 in this subsection (g) shall change any requirement under the 4 jurisdiction of the Illinois Department of Nuclear Safety 5 including, but not limited to, the payment of fees. Nothing 6 in this subsection (g) shall exempt a utility from obtaining 7 a certificate pursuant to Section 8-406 of this Act for the 8 construction of a new electric generating facility. Nothing 9 in this subsection (g) is intended to exempt the transactions 10 hereunder from the operation of the federal or State 11 antitrust laws. Nothing in this subsection (g) shall require 12 an electric utility to use the procedures specified in this 13 subsection for any of the transactions specified herein. Any 14 other procedure available under this Act may, at the electric 15 utility's election, be used for any such transaction. 16 (h) During the mandatory transition period, the 17 Commission shall not establish or use any rates of 18 depreciation, which for purposes of this subsection shall 19 include amortization, for any electric utility other than 20 those established pursuant to subsection (c) of Section 5-104 21 of this Act or utilized pursuant to subsection (g) of this 22 Section. Provided, however, that in any proceeding to review 23 an electric utility's rates for tariffed services pursuant to 24 Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the 25 Commission may establish new rates of depreciation for the 26 electric utility in the same manner provided in subsection 27 (d) of Section 5-104 of this Act. An electric utility 28 implementing an accelerated cost recovery method including 29 accelerated depreciation, accelerated amortization or other 30 capital recovery methods, or recording reductions to the 31 original cost of its assets, pursuant to subsection (g) of 32 this Section, shall file a statement with the Commission 33 describing the accelerated cost recovery method to be 34 implemented or the reduction in the original cost of its -41- SRS90HB0362JJsaam02 1 assets to be recorded. Upon the filing of such statement, 2 the accelerated cost recovery method or the reduction in the 3 original cost of assets shall be deemed to be approved by the 4 Commission as though an order had been entered by the 5 Commission. 6 (i) Subsequent to the mandatory transition period, the 7 Commission, in any proceeding to establish rates and charges 8 for tariffed services offered by an electric utility, shall 9 consider only (1) the then current or projected revenues, 10 costs, investments and cost of capital directly or indirectly 11 associated with the provision of such tariffed services; (2) 12 collection of transition charges in accordance with Sections 13 16-102 and 16-108 of this Act; (3) recovery of any employee 14 transition costs as described in Section 16-128 which the 15 electric utility is continuing to incur, including recovery 16 of any unamortized portion of such costs previously incurred 17 or committed, with such costs to be equitably allocated among 18 bundled services, delivery services, and contracts with 19 alternative retail electric suppliers; and (4) recovery of 20 the costs associated with the electric utility's compliance 21 with decommissioning funding requirements; and shall not 22 consider any other revenues, costs, investments or cost of 23 capital of either the electric utility or of any affiliate of 24 the electric utility that are not associated with the 25 provision of tariffed services. In setting rates for 26 tariffed services, the Commission shall equitably allocate 27 joint and common costs and investments between the electric 28 utility's competitive and tariffed services. In determining 29 the justness and reasonableness of the electric power and 30 energy component of an electric utility's rates for tariffed 31 services subsequent to the mandatory transition period and 32 prior to the time that the provision of such electric power 33 and energy is declared competitive, the Commission shall 34 consider the extent to which the electric utility's tariffed -42- SRS90HB0362JJsaam02 1 rates for such component for each customer class exceed the 2 market value determined pursuant to Section 16-112, and, if 3 the electric power and energy component of such tariffed rate 4 exceeds the market value by more than 10% for any customer 5 class, may establish such electric power and energy component 6 at a rate equal to the market value plus 10%. In any such 7 case, the Commission may also elect to extend the provisions 8 of Section 16-111(e) for any period in which the electric 9 utility is collecting transition charges, using information 10 applicable to such period. 11 (j) During the mandatory transition period, an electric 12 utility may elect to transfer to a non-operating income 13 account under the Commission's Uniform System of Accounts 14 either or both of (i) an amount of unamortized investment tax 15 credit that is in addition to the ratable amount which is 16 credited to the electric utility's operating income account 17 for the year in accordance with Section 46(f)(2) of the 18 federal Internal Revenue Code of 1986, as in effect prior to 19 P.L. 101-508, or (ii) "excess tax reserves", as that term is 20 defined in Section 203(e)(2)(A) of the federal Tax Reform Act 21 of 1986, provided that (A) the amount transferred may not 22 exceed the amount of the electric utility's assets that were 23 created pursuant to Statement of Financial Accounting 24 Standards No. 71 which the electric utility has written off 25 during the mandatory transition period, and (B) the transfer 26 shall not be effective until approved by the Internal Revenue 27 Service. An electric utility electing to make such a 28 transfer shall file a statement with the Commission stating 29 the amount and timing of the transfer for which it intends to 30 request approval of the Internal Revenue Service, along with 31 a copy of its proposed request to the Internal Revenue 32 Service for a ruling. The Commission shall issue an order 33 within 14 days after the electric utility's filing approving, 34 subject to receipt of approval from the Internal Revenue -43- SRS90HB0362JJsaam02 1 Service, the proposed transfer. 2 (220 ILCS 5/16-112 new) 3 Sec. 16-112. Determination of market value. 4 (a) The market value to be used in the calculation of 5 transition charges as defined in Section 16-102 shall be 6 determined in accordance with either (i) a tariff that has 7 been filed by the electric utility with the Commission 8 pursuant to Article IX of this Act and that provides for a 9 determination of the market value for electric power and 10 energy as a function of an exchange traded or other market 11 traded index, options or futures contract or contracts 12 applicable to the market in which the utility sells, and the 13 customers in its service area buy, electric power and energy, 14 or (ii) in the event no such tariff has been placed into 15 effect for the electric utility, or in the event such tariff 16 does not establish market values for each of the years 17 specified in the neutral fact-finder process described in 18 subsections (b) through (h) of this Section, a tariff 19 incorporating the market values resulting from the neutral 20 fact-finder process set forth in subsections (b) through (h) 21 of this Section. 22 (b) Except as provided in subsection (m) of this 23 Section, on or before April 30, 1998, on or before February 24 28, 1999, and on or before each April 30 from 2000 until 25 2007, the Commission shall appoint a neutral fact-finder to 26 make the calculations described in subsection (c) of this 27 Section. The neutral fact-finder shall be a member of a 28 national public accounting firm, shall not have served as the 29 neutral fact-finder in the previous year, and shall be 30 selected from a list of candidates provided by a nationally 31 recognized provider of neutral fact-finders that has 32 established rules for maintaining confidentiality. An amount 33 sufficient to pay the fees of the neutral fact-finder shall -44- SRS90HB0362JJsaam02 1 be appropriated annually from the Public Utility Fund in the 2 State treasury. 3 (c) On or before June 1, 1998, on or before April 1, 4 1999, and on or before each June 1 from 2000 until 2007, or 5 until discontinued in accordance with subsection (m) of this 6 Section, each electric utility and each alternative retail 7 electric supplier shall submit to the neutral fact-finder a 8 summary of (A) all contracts entered into after June 1, 1997 9 that are for the sale of electric power and energy from a 10 generating facility or facilities located in this State or 11 located in a contiguous State and owned by an electric 12 utility as part of its interconnected operating system and 13 delivery during one or more of the 5 years succeeding the 14 date of submission, and (B) all contracts entered into after 15 June 1, 1997 for purchase and delivery of electric power and 16 energy in or into this State during one or more of the 5 17 years succeeding the date of submission; provided, however, 18 that such contracts shall not include (i) contracts between 19 the electric utility and an affiliate; (ii) sales, purchases, 20 or deliveries made under rates and tariffs filed with the 21 Commission, except for tariffs filed pursuant to subsection 22 (d) of Section 16-110 and except for special or negotiated 23 rate contracts between an electric utility and a retail 24 customer to the extent that such contracts are for the 25 provision of electric power and energy after the date that 26 the customer becomes eligible for delivery services; and 27 (iii) extensions or amendments to full requirements wholesale 28 contracts existing as of the effective date of this 29 amendatory Act of 1997, provided that such contracts, 30 extensions, or amendments are cost of service regulated by 31 the Federal Energy Regulatory Commission. The summaries 32 shall, at a minimum, identify the date of the contract; the 33 year in which the electric power or energy is to be sold or 34 delivered; the point of delivery; defining characteristics -45- SRS90HB0362JJsaam02 1 such as the nature of the power transaction (for example, 2 reserve responsibility (firm, non-firm)), length of contract 3 and temporal differences (for example, season, on-peak or 4 off-peak); and the applicable prices stated at the point at 5 which the electric power and energy leaves the electric 6 utility's or alternative retail electric supplier's 7 transmission system, as the case may be, in the case of 8 contracts described in item (A) and at the point at which the 9 electric power and energy enters the electric utility's 10 transmission system in the case of contracts in item (B), 11 provided, that the applicable price shall be stated at the 12 point at which the electric power and energy enters the 13 electric utility's transmission system in the case of 14 electric power and energy generated for delivery within the 15 electric utility's service area. In reporting to the neutral 16 fact-finder the price of power and energy sold under bundled 17 service contracts, electric utilities and alternative retail 18 electric suppliers shall deduct from the contract price the 19 charges for delivery services, including transition charges, 20 applicable to delivery services customers in a utility's 21 service area, and charges for services, if any, other than 22 the provision of power and energy or delivery services. The 23 Commission may adopt orders setting forth requirements 24 governing the form and content of such summaries. 25 (d) The neutral fact-finder shall calculate market 26 values for electric power and energy for each electric 27 utility, taking into account the defining characteristics set 28 forth in subsection (c) of this Section; provided, however, 29 that the neutral fact-finder may determine that a particular 30 value is appropriate for more than one electric utility, or 31 for all electric utilities in this State. The neutral 32 fact-finder shall calculate the market values for the next 33 year and, to the extent the summaries include a sufficient 34 number of actual contracts to represent a viable market for -46- SRS90HB0362JJsaam02 1 the sale and delivery of electric power and energy in 2 subsequent years, for each of the 4 succeeding years. 3 (e) In calculating market values for electric power, the 4 neutral fact-finder shall weight contract prices (including 5 any contract price indices) by both the amount of capacity 6 covered by the contract and the number of hours in which 7 capacity is to be provided under the contract in each period 8 of the year, shall take into account all of the defining 9 characteristics set forth in subsection (c) of this Section 10 and shall develop such values as required to represent the 11 different types of market values of electric power. 12 (f) The neutral fact-finder shall base calculations of 13 the market values for electric energy on the energy prices 14 stated in the contracts, and where no explicit energy prices 15 or index price basis are stated, on the actual energy costs 16 of the supplier in the corresponding period of the preceding 17 year that would have been applicable to the electric energy 18 provided under the contract. The neutral fact-finder shall 19 develop market values for electric energy and shall take into 20 account the defining characteristics set forth in subsection 21 (c) of this Section, as required to represent the market 22 values of such electric energy. 23 (g) If the contracts used by the neutral fact-finder 24 base prices for future years on one or more indices, the 25 neutral fact-finder shall identify such indices in his or her 26 final report, develop a weighting for each index, and 27 calculate a weighted average index. The market values shall 28 be calculated using the weighted average index when the 29 actual values of the component indices are known. 30 (h) The neutral fact-finder shall publish a final report 31 on or before July 30 of each year, except that in 1999 the 32 neutral fact finder shall publish the report on or before May 33 30, setting forth the calculated market values and stating 34 the basis for such calculations. The final report shall not, -47- SRS90HB0362JJsaam02 1 however, disclose any proprietary or confidential data. 2 (i) The market values calculated by the neutral 3 fact-finder shall not be admissible in any proceeding for any 4 purpose other than the calculation of transition charges or 5 calculation of the price for the power purchase options 6 provided pursuant to subsection (b) and (c) of Section 7 16-110. 8 (j) The Commission shall have access to all contracts 9 described in subsection (c) of this Section and shall perform 10 such audits as it and the neutral fact-finder deem necessary 11 to insure the accuracy of the summaries submitted to the 12 neutral fact-finder. The summaries described in subsection 13 (c) of this Section and each contract shall be accorded 14 confidential and proprietary treatment and their review shall 15 be subject to the provisions of Sections 4-404 and 5-108 of 16 this Act, and the contract between the Commission and the 17 neutral fact-finder shall contain provisions obligating the 18 neutral fact-finder to comply with such Sections. The 19 summaries shall not be discoverable by any party in any 20 proceeding absent a compelling demonstration of need. 21 (k) In determining the market values to be used for the 22 various customer classes in calculating transition charges as 23 defined in Section 16-102 or for the power purchase options 24 set forth in Section 16-110, an electric utility shall apply 25 the market values that are determined as set forth in 26 subsection (a) to the electric power and energy that would 27 have been used to serve the delivery services customers' 28 electric power and energy requirements, based on the usage 29 specified in Section 16-102 and taking into account the 30 daily, monthly, annual and other relevant characteristics of 31 the customers' demands on the electric utility's system. 32 (l) In calculating a lump sum transition charge payment 33 for the purposes of subsection (h) of Section 16-108, the 34 electric utility shall use the market values that were -48- SRS90HB0362JJsaam02 1 determined as provided in its tariff, or if such market 2 values have not been determined for the full period of time 3 covered by such lump sum calculation, such other basis as is 4 stated in the electric utility's tariff filed pursuant to 5 Section 16-108. 6 (m) The Commission may approve or reject, or propose 7 modifications to, any tariff providing for the determination 8 of market value that has been proposed by an electric utility 9 pursuant to subsection (a) of this Section, but shall not 10 have the power to otherwise order the electric utility to 11 implement a modified tariff or to place into effect any 12 tariff for the determination of market value other than one 13 incorporating the neutral fact-finder procedure set forth in 14 this Section. Provided, however, that if each electric 15 utility serving at least 300,000 customers has placed into 16 effect a tariff that provides for a determination of market 17 value as a function of an exchange traded or other market 18 traded index, options or futures contract or contracts, then 19 the Commission can require any other electric utilities to 20 file such a tariff, and can terminate the neutral fact-finder 21 procedure for the periods covered by such tariffs. 22 (n) To the extent that the summaries list a sufficient 23 number of actual contracts to represent a viable market and 24 market values can be determined for more than one year, the 25 electric utility shall offer customers that are obligated to 26 pay transition charges contracts that establish for one or 27 more years, up to a maximum of the lesser of 5 years or the 28 remaining number of years until December 31, 2008, the market 29 value or values to be used in calculating the customer's 30 transition charges in such years and for which market value 31 determinations have been made. The electric utility may 32 require any customer to give up to one year notice prior to 33 entering into a one or 2 year contract pursuant to this 34 subsection, up to 2 years notice for a 3 year contract, and -49- SRS90HB0362JJsaam02 1 up to 3 years notice for a 4 or 5 year contract. Contracts 2 of one or 2 years duration shall incorporate the market 3 values that were determined as provided in this Section in 4 the year in which the notice is required to be given. 5 Contracts of more than 2 years duration shall incorporate the 6 market values that are determined in the year prior to the 7 first year in which the electric utility will collect 8 transition charges from the customer under the contract. The 9 electric utility shall also allow customers to select, at the 10 time that a customer gives its notice, an option to revoke 11 the notice within 30 days following the determination of the 12 market values that will apply under the contract requested by 13 the customer, and may charge customers a fee for such option 14 that is set forth in a tariff filed pursuant to Article IX 15 and that is adequate to allow the electric utility to recover 16 its transactional costs and compensate it based on the cost 17 that would be incurred to purchase an option to cover the 18 risk associated with the customer's option to revoke. The 19 electric utility shall not be required to offer customers a 20 contract under this paragraph for any year for which no 21 determination of market value has been made either by the 22 neutral fact-finder or pursuant to a tariff filed by the 23 electric utility. 24 (o) An electric utility shall have no obligation to 25 provide electric power or energy as a tariffed service for 26 the electric power and energy requirements placed on delivery 27 service by any customer that has entered into a contract 28 pursuant to subsection (n) of this Section and has not 29 purchased and exercised an option to revoke, during the term 30 of the contract. A customer that has purchased and exercised 31 an option to revoke under this subsection shall remain 32 eligible to receive any tariffed service for which it would 33 otherwise be eligible. -50- SRS90HB0362JJsaam02 1 (220 ILCS 5/16-113 new) 2 Sec. 16-113. Declaration of service as a competitive 3 service. 4 (a) An electric utility may, by petition, request the 5 Commission to declare a tariffed service provided by the 6 electric utility to be a competitive service. The electric 7 utility shall give notice of its petition to the public in 8 the same manner that public notice is provided for proposed 9 general increases in rates for tariffed services, in 10 accordance with rules and regulations prescribed by the 11 Commission. The Commission shall hold a hearing on the 12 petition if a hearing is deemed necessary by the Commission. 13 The Commission shall declare the service to be a competitive 14 service for some identifiable customer segment or group of 15 customers, or some clearly defined geographical area within 16 the electric utility's service area, if the service or a 17 reasonably equivalent substitute service is reasonably 18 available to the customer segment or group or in the defined 19 geographical area at a comparable price from one or more 20 providers other than the electric utility or an affiliate of 21 the electric utility, and the electric utility has lost or 22 there is a reasonable likelihood that the electric utility 23 will lose business for the service to the other provider or 24 providers; provided, that the Commission may not declare the 25 provision of electric power and energy to be competitive 26 pursuant to this subsection with respect to (i) any retail 27 customer or group of retail customers that is not eligible 28 pursuant to Section 16-104 to take delivery services provided 29 by the electric utility and (ii) any residential and small 30 commercial retail customers prior to the last date on which 31 such customers are required to pay transition charges. In 32 determining whether to grant or deny a petition to declare 33 the provision of electric power and energy competitive, the 34 Commission shall consider, in applying the above criteria, -51- SRS90HB0362JJsaam02 1 whether there is adequate transmission capacity into the 2 service area of the petitioning electric utility to make 3 electric power and energy reasonably available to the 4 customer segment or group or in the defined geographical area 5 from one or more providers other than the electric utility or 6 an affiliate of the electric utility, in accordance with this 7 subsection. The Commission shall make its determination and 8 issue its final order declaring or refusing to declare the 9 service to be a competitive service within 120 days following 10 the date that the petition is filed, or otherwise the 11 petition shall be deemed to be granted; provided, that if the 12 petition is deemed to be granted by operation of law, the 13 Commission shall not thereby be precluded from finding and 14 ordering, in a subsequent proceeding initiated by the 15 Commission, and after notice and hearing, that the service is 16 not competitive based on the criteria set forth in this 17 subsection. 18 (b) Any customer except a customer identified in 19 subsection (c) of Section 16-103 who is taking a tariffed 20 service that is declared to be a competitive service pursuant 21 to subsection (a) of this Section shall be entitled to 22 continue to take the service from the electric utility on a 23 tariffed basis for a period of 3 years following the date 24 that the service is declared competitive, or such other 25 period as is stated in the electric utility's tariff pursuant 26 to Section 16-110. This subsection shall not require the 27 electric utility to offer or provide on a tariffed basis any 28 service to any customer (except those customers identified in 29 subsection (c) of Section 16-103) that was not taking such 30 service on a tariffed basis on the date the service was 31 declared to be competitive. 32 (c) If the Commission denies a petition to declare a 33 service to be a competitive service, or determines in a 34 separate proceeding that a service is not competitive based -52- SRS90HB0362JJsaam02 1 on the criteria set forth in subsection (a), the electric 2 utility may file a new petition no earlier than 6 months 3 following the date of the Commission's order, requesting, on 4 the basis of additional or different facts and circumstances, 5 that the service be declared to be a competitive service. 6 (d) The Commission shall not deny a petition to declare 7 a service to be a competitive service, and shall not find 8 that a service is not a competitive service, on the grounds 9 that it has previously denied the petition of another 10 electric utility to declare the same or a similar service to 11 be a competitive service or has previously determined that 12 the same or a similar service provided by another electric 13 utility is not a competitive service. 14 (e) An electric utility may declare a service, other 15 than delivery services or the provision of electric power or 16 energy, to be competitive by filing with the Commission at 17 least 14 days prior to the date on which the service is to 18 become competitive a notice describing the service that is 19 being declared competitive and the date on which it will 20 become competitive; provided, that any customer who is taking 21 a tariffed service that is declared to be a competitive 22 service pursuant to this subsection (e) shall be entitled to 23 continue to take the service from the electric utility on a 24 tariffed basis until the electric utility files, and the 25 Commission grants, a petition to declare the service 26 competitive in accordance with subsection (a) of this 27 Section. The Commission shall be authorized to find and 28 order, after notice and hearing in a subsequent proceeding 29 initiated by the Commission, that any service declared to be 30 competitive pursuant to this subsection (e) is not 31 competitive in accordance with the criteria set forth in 32 subsection (a) of this Section. 33 (220 ILCS 5/16-114 new) -53- SRS90HB0362JJsaam02 1 Sec. 16-114. Recovery of decommissioning charges. On or 2 before April 1, 1999, each electric utility owning an 3 interest in, or having responsibility as a matter of contract 4 or statute for decommissioning costs as defined in Section 5 8-508.1 of, one or more nuclear power plants shall file with 6 the Commission a tariff or tariffs conforming to the 7 provisions of Section 9-201.5 of this Act, to be applicable 8 to each and every kilowatt-hour of electricity delivered or 9 sold at retail in the electic utility's service area, 10 including, but not limited to, sales by the electric utility 11 to tariffed services retail customers, sales by the electric 12 utility to retail customers pursuant to special contracts or 13 other negotiated arrangements, sales by alternative retail 14 electric suppliers, and sales by an electric utility other 15 than the electric utility in whose service area the retail 16 customer is located; provided, however, that for a user that 17 obtained electric power and energy from its own cogeneration 18 or self-generation facilities on or before January 1, 1997, 19 and subsequently takes services from an alternative retail 20 electric supplier or an electric utility other than the 21 electric utility in whose service area the user is located 22 for any portion of its electric power and energy requirements 23 formerly obtained from those facilities, the tariff required 24 by this Section shall not be applicable in any year to that 25 portion of the user's electric power and energy requirements 26 formerly obtained from those facilities, provided that for 27 the purposes of this Section, such portion shall not exceed 28 the average number of kilowatt-hours per year obtained from 29 the cogeneration or self-generation facilities during the 3 30 years prior to the date on which the user became eligible for 31 delivery services. 32 The Commission shall determine whether the tariff meets 33 the requirements of Sections 9-201 and 9-201.5 and of this 34 Section, and shall permit the electric utility's tariff -54- SRS90HB0362JJsaam02 1 together with any modifications made after hearing to become 2 effective no later than October 1, 1999. In making its 3 determination, the Commission shall retain the authority it 4 possessed prior to the effective date of this amendatory Act 5 of 1997 to make jurisdictional allocations of decommissioning 6 expense recovery. The tariff filed pursuant to this Section 7 shall be applicable to any user taking some or all of its 8 electric power and energy requirements from an alternative 9 retail electric supplier or from an electric utility other 10 than the electric utility in whose service area the user is 11 located on and after the date that the user becomes eligible 12 for delivery services in accordance with Section 16-104. If 13 the electric utility has in effect as of the effective date 14 of this amendatory Act of 1997 a decommissioning rate as 15 defined in Section 9-201.5 conforming to the requirements of 16 that Section, the tariff or tariffs required by this Section 17 shall if the electric utility requests be consistent with its 18 decommissioning rate that is already in effect; provided, 19 that the tariff or tariffs filed pursuant to this Section 20 shall provide for the removal from base rates of any 21 decommissioning costs that are included in the electric 22 utility's base rates and their inclusion in the tariff or 23 tariffs required by this Section. The tariff required by this 24 Section shall be included by the Commission in the reviews 25 required by subsection (d) of Section 9-201.5. 26 (220 ILCS 5/16-115 new) 27 Sec. 16-115. Certification of alternative retail electric 28 suppliers. 29 (a) Any alternative retail electric supplier must obtain 30 a certificate of service authority from the Commission in 31 accordance with this Section before serving any retail 32 customer or other user located in this State. An alternative 33 retail electric supplier may request, and the Commission may -55- SRS90HB0362JJsaam02 1 grant, a certificate of service authority for the entire 2 State or for a specified geographic area of the State. 3 (b) An alternative retail electric supplier seeking a 4 certificate of service authority shall file with the 5 Commission a verified application containing information 6 showing that the applicant meets the requirements of this 7 Section. The alternative retail electric supplier shall 8 publish notice of its application in the official State 9 newspaper within 10 days following the date of its filing. 10 No later than 45 days after the application is properly filed 11 with the Commission, and such notice is published, the 12 Commission shall issue its order granting or denying the 13 application. 14 (c) An application for a certificate of service 15 authority shall identify the area or areas in which the 16 applicant intends to offer service and the types of services 17 it intends to offer. Applicants that seek to serve 18 residential or small commercial retail customers within a 19 geographic area that is smaller than an electric utility's 20 service area shall submit evidence demonstrating that the 21 designation of this smaller area does not violate Section 22 16-115A. An applicant that seeks to serve residential or 23 small commercial retail customers may state in its 24 application for certification any limitations that will be 25 imposed on the number of customers or maximum load to be 26 served. 27 (d) The Commission shall grant the application for a 28 certificate of service authority if it makes the findings set 29 forth in this subsection based on the verified application 30 and such other information as the applicant may submit: 31 (1) That the applicant possesses sufficient 32 technical, financial and managerial resources and 33 abilities to provide the service for which it seeks a 34 certificate of service authority. In determining the -56- SRS90HB0362JJsaam02 1 level of technical, financial and managerial resources 2 and abilities which the applicant must demonstrate, the 3 Commission shall consider (i) the characteristics, 4 including the size and financial sophistication, of the 5 customers that the applicant seeks to serve, and (ii) 6 whether the applicant seeks to provide electric power and 7 energy using property, plant and equipment which it owns, 8 controls or operates; 9 (2) That the applicant will comply with all 10 applicable federal, State, regional and industry rules, 11 policies, practices and procedures for the use, 12 operation, and maintenance of the safety, integrity and 13 reliability, of the interconnected electric transmission 14 system; 15 (3) That the applicant will only provide service to 16 retail customers in an electric utility's service area 17 that are eligible to take delivery services under this 18 Act; 19 (4) That the applicant will comply with such 20 informational or reporting requirements as the Commission 21 may by rule establish and provide the information 22 required by Section 16-112. Any data related to 23 contracts for the purchase and sale of electric power and 24 energy shall be made available for review by the Staff of 25 the Commission on a confidential and proprietary basis 26 and only to the extent and for the purposes which the 27 Commission determines are reasonably necessary in order 28 to carry out the purposes of this Act; 29 (5) That if the applicant, its corporate affiliates 30 or the applicant's principal source of electricity (to 31 the extent such source is known at the time of the 32 application) owns or controls facilities, for public use, 33 for the transmission or distribution of electricity to 34 end-users within a defined geographic area to which -57- SRS90HB0362JJsaam02 1 electric power and energy can be physically and 2 economically delivered by the electric utility or 3 utilities in whose service area or areas the proposed 4 service will be offered, the applicant, its corporate 5 affiliates or principal source of electricity, as the 6 case may be, provides delivery services to the electric 7 utility or utilities in whose service area or areas the 8 proposed service will be offered that are reasonably 9 comparable to those offered by the electric utility, and 10 provided further, that the applicant agrees to certify 11 annually to the Commission that it is continuing to 12 provide such delivery services and that it has not 13 knowingly assisted any person or entity to avoid the 14 requirements of this Section. For purposes of this 15 subparagraph, "principal source of electricity" shall 16 mean a single source that supplies at least 65% of the 17 applicant's electric power and energy, and the purchase 18 of transmission and distribution services pursuant to a 19 filed tariff under the jurisdiction of the Federal Energy 20 Regulatory Commission or a state public utility 21 commission shall not constitute control of access to the 22 provider's transmission and distribution facilities; 23 (6) With respect to an applicant that seeks to 24 serve residential or small commercial retail customers, 25 that the area to be served by the applicant and any 26 limitations it proposes on the number of customers or 27 maximum amount of load to be served meet the provisions 28 of Section 16-115A, provided, that the Commission can 29 extend the time for considering such a certificate 30 request by up to 90 days, and can schedule hearings on 31 such a request; 32 (7) That the applicant meets the requirements of 33 subsection (a) of Section 16-128; and 34 (8) That the applicant will comply with all other -58- SRS90HB0362JJsaam02 1 applicable laws and regulations. 2 (e) A retail customer that owns a cogeneration or 3 self-generation facility and that seeks certification only to 4 provide electric power and energy from such facility to 5 retail customers at separate locations which customers are 6 both (i) owned by, or a subsidiary or other corporate 7 affiliate of, such applicant and (ii) eligible for delivery 8 services, shall be granted a certificate of service authority 9 upon filing an application and notifying the Commission that 10 it has entered into an agreement with the relevant electric 11 utilities pursuant to Section 16-118. 12 (f) The Commission shall have the authority to 13 promulgate rules and regulations to carry out the provisions 14 of this Section. On or before May 1, 1999, the Commission 15 shall adopt a rule or rules applicable to the certification 16 of those alternative retail electric suppliers that seek to 17 serve only nonresidential retail customers with maximum 18 electrical demands of one megawatt or more which shall 19 provide for (i) expedited and streamlined procedures for 20 certification of such alternative retail electric suppliers 21 and (ii) specific criteria which, if met by any such 22 alternative retail electric supplier, shall constitute the 23 demonstration of technical, financial and managerial 24 resources and abilities to provide service required by 25 subsection (d) (1) of this Section, such as a requirement to 26 post a bond or letter of credit, from a responsible surety or 27 financial institution, of sufficient size for the nature and 28 scope of the services to be provided; demonstration of 29 adequate insurance for the scope and nature of the services 30 to be provided; and experience in providing similar services 31 in other jurisdictions. 32 (220 ILCS 5/16-115A new) 33 Sec. 16-115A. Obligations of alternative retail electric -59- SRS90HB0362JJsaam02 1 suppliers. 2 (a) An alternative retail electric supplier shall: 3 (i) comply with the requirements imposed on public 4 utilities by Sections 8-201 through 8-207, 8-301, 8-505 5 and 8-507 of this Act, to the extent that these sections 6 have application to the services being offered by the 7 alternative retail electric supplier; and 8 (ii) continue to comply with the requirements for 9 certification stated in subsection (d) of Section 16-115. 10 (b) An alternative retail electric supplier shall obtain 11 verifiable authorization from a customer, in a form or manner 12 approved by the Commission consistent with Section 2EE of the 13 Consumer Fraud and Deceptive Business Practices Act, before 14 the customer is switched from another supplier. 15 (c) No alternative retail electric supplier, or electric 16 utility other than the electric utility in whose service area 17 a customer is located, shall (i) enter into or employ any 18 arrangements which have the effect of preventing a retail 19 customer with a maximum electrical demand of less than one 20 megawatt from having access to the services of the electric 21 utility in whose service area the customer is located or (ii) 22 charge retail customers for such access. This subsection 23 shall not be construed to prevent an arms-length agreement 24 between a supplier and a retail customer that sets a term of 25 service, notice period for terminating service and provisions 26 governing early termination through a tariff or contract as 27 allowed by Section 16-119. 28 (d) An alternative retail electric supplier that is 29 certified to serve residential or small commercial retail 30 customers shall not: 31 (1) deny service to a customer or group of 32 customers nor establish any differences as to 33 prices, terms, conditions, services, products, 34 facilities, or in any other respect, whereby such -60- SRS90HB0362JJsaam02 1 denial or differences are based upon race, gender or 2 income. 3 (2) deny service to a customer or group of 4 customers based on locality nor establish any 5 unreasonable difference as to prices, terms, 6 conditions, services, products, or facilities as 7 between localities. 8 (e) An alternative retail electric supplier shall comply 9 with the following requirements with respect to the 10 marketing, offering and provision of products or services to 11 residential and small commercial retail customers: 12 (i) Any marketing materials which make statements 13 concerning prices, terms and conditions of service shall 14 contain information that adequately discloses the prices, 15 terms and conditions of the products or services that the 16 alternative retail electric supplier is offering or 17 selling to the customer. 18 (ii) Before any customer is switched from another 19 supplier, the alternative retail electric supplier shall 20 give the customer written information that adequately 21 discloses, in plain language, the prices, terms and 22 conditions of the products and services being offered and 23 sold to the customer. 24 (iii) An alternative retail electric supplier shall 25 provide documentation to the Commission and to customers 26 that substantiates any claims made by the alternative 27 retail electric supplier regarding the technologies and 28 fuel types used to generate the electricity offered or 29 sold to customers. 30 (iv) The alternative retail electric supplier shall 31 provide to the customer (1) itemized billing statements 32 that describe the products and services provided to the 33 customer and their prices, and (2) an additional 34 statement, at least annually, that adequately discloses -61- SRS90HB0362JJsaam02 1 the average monthly prices, and the terms and conditions, 2 of the products and services sold to the customer. 3 (f) An alternative retail electric supplier may limit 4 the overall size or availability of a service offering by 5 specifying one or more of the following: a maximum number of 6 customers, maximum amount of electric load to be served, time 7 period during which the offering will be available, or other 8 comparable limitation, but not including the geographic 9 locations of customers within the area which the alternative 10 retail electric supplier is certificated to serve. The 11 alternative retail electric supplier shall file the terms and 12 conditions of such service offering including the applicable 13 limitations with the Commission prior to making the service 14 offering available to customers. 15 (g) Nothing in this Section shall be construed as 16 preventing an alternative retail electric supplier, which is 17 an affiliate of, or which contracts with, (i) an industry or 18 trade organization or association, (ii) a membership 19 organization or association that exists for a purpose other 20 than the purchase of electricity, or (iii) another 21 organization that meets criteria established in a rule 22 adopted by the Commission, from offering through the 23 organization or association services at prices, terms and 24 conditions that are available solely to the members of the 25 organization or association. 26 (220 ILCS 5/16-115B new) 27 Sec. 16-115B. Commission oversight of services provided 28 by alternative retail electric suppliers. 29 (a) The Commission shall have jurisdiction in accordance 30 with the provisions of Article X of this Act to entertain and 31 dispose of any complaint against any alternative retail 32 electric supplier alleging (i) that the alternative retail 33 electric supplier has violated or is in nonconformance with -62- SRS90HB0362JJsaam02 1 any applicable provisions of Section 16-115 through Section 2 16-115A; (ii) that an alternative retail electric supplier 3 serving retail customers having maximum demands of less than 4 one megawatt has failed to provide service in accordance with 5 the terms of its contract or contracts with such customer or 6 customers; (iii) that the alternative retail electric 7 supplier has violated or is in non-conformance with the 8 delivery services tariff of, or any of its agreements 9 relating to delivery services with, the electric utility, 10 municipal system, or electric cooperative providing delivery 11 services; or (iv) that the alternative retail electric 12 supplier has violated or failed to comply with the 13 requirements of Sections 8-201 through 8-207, 8-301, 8-505, 14 or 8-507 of this Act as made applicable to alternative retail 15 electric suppliers. 16 (b) The Commission shall have authority, after notice 17 and hearing held on complaint or on the Commission's own 18 motion: 19 (1) To order an alternative retail electric 20 supplier to cease and desist, or correct, any violation 21 of or non-conformance with the provisions of Section 22 16-115 or 16-115A; 23 (2) To impose financial penalties for violations of 24 or non-conformances with the provisions of Section 16-115 25 or 16-115A, not to exceed (i) $10,000 per occurrence or 26 (ii) $30,000 per day for those violations or 27 non-conformances which continue after the Commission 28 issues a cease-and-desist order; and 29 (3) To alter, modify, revoke or suspend the 30 certificate of service authority of an alternative retail 31 electric supplier for substantial or repeated violations 32 of or non-conformances with the provisions of Section 33 16-115 or 16-115A. -63- SRS90HB0362JJsaam02 1 (220 ILCS 5/16-116 new) 2 Sec. 16-116. Commission oversight of electric utilities 3 serving retail customers outside their service areas or 4 providing competitive, non-tariffed services. 5 (a) An electric utility that has a tariff on file for 6 delivery services may, without regard to any otherwise 7 applicable tariffs on file, provide electric power and energy 8 to one or more retail customers located outside its service 9 area, but only to the extent (i) such retail customer (A) is 10 eligible for delivery services under any delivery services 11 tariff filed with the Commission by the electric utility in 12 whose service area the retail customer is located and (B) has 13 either elected to take such delivery services or has paid or 14 contracted to pay the charges specified in Sections 16-108 15 and 16-114, or (ii) if such retail customer is served by a 16 municipal system or electric cooperative, the customer is 17 eligible for delivery services under the terms and conditions 18 for such service established by the municipal system or 19 electric cooperative serving that customer. 20 (b) An electric utility may offer any competitive 21 service to any customer or group of customers without filing 22 contracts with or seeking approval of the Commission, 23 notwithstanding any rule or regulation that would require 24 such approval. The Commission shall not increase or decrease 25 the prices, and may not alter or add to the terms and 26 conditions for the utility's competitive services, from those 27 agreed to by the electric utility and the customer or 28 customers. Non-tariffed, competitive services shall not be 29 subject to the provisions of the Electric Supplier Act or to 30 Articles V, VII, VIII or IX of the Act, except to the extent 31 that any provisions of such Articles are made applicable to 32 alternative retail electric suppliers pursuant to Sections 33 16-115 and 16-115A, but shall be subject to the provisions of 34 subsections (b) through (g) of Section 16-115A, and Section -64- SRS90HB0362JJsaam02 1 16-115B to the same extent such provisions are applicable to 2 the services provided by alternative retail electric 3 suppliers. 4 (220 ILCS 5/16-117 new) 5 Sec. 16-117. Commission consumer education program. 6 (a) The restructuring of the electricity industry will 7 create a new electricity market with new marketers and 8 sellers offering new goods and services, many of which the 9 average consumer will not be able to readily evaluate. It is 10 the intent of the General Assembly that (i) electricity 11 consumers be provided with sufficient and reliable 12 information so that they are able to compare and make 13 informed selections of products and services provided in the 14 electricity market; and (ii) mechanisms be provided to enable 15 consumers to protect themselves from marketing practices that 16 are unfair or abusive. 17 (b) The Commission shall implement and maintain a 18 consumer education program to provide residential and small 19 commercial retail customers with information to help them 20 understand their service options in a competitive electric 21 services market, and their rights and responsibilities. 22 (c) The Commission shall form a working group following 23 the enactment of this amendatory Act of 1997. This group 24 shall consist of 5 representatives of the investor-owned 25 electric utilities in this State, 2 of which shall be 26 appointed by electric utilities serving over 1,000,000 retail 27 customers in this State; 2 representatives of alternative 28 retail electric suppliers; 3 representatives of organizations 29 representing the interests of residential and small 30 commercial retail customers; and the Commission. 31 (d) By March 1, 1999, with respect to educational 32 materials for small commercial customers and by November 1, 33 2001 with respect to educational materials for residential -65- SRS90HB0362JJsaam02 1 customers, the working group appointed pursuant to this 2 Section shall develop a package of printed educational 3 materials which meet the requirements of subsection (e) and 4 shall submit such package to the Commission for approval, 5 along with recommendations for implementing this consumer 6 education program. Such materials shall consider the needs of 7 different types of consumers in this State, such as elderly, 8 low-income, multilingual, minority, rural and disabled 9 customers. The working group shall issue recommendations to 10 the Commission on how such education program can be 11 implemented through a variety of communication methods, 12 including specifically mass media, distribution of printed 13 material, public service announcements, and posting on the 14 Internet. 15 (e) At a minimum, the materials constituting the 16 consumer education program submitted to the Commission by the 17 working group shall include concise explanations or 18 descriptions of the following: 19 (1) the structure of the electric utility industry 20 following this amendatory Act of 1997 and a glossary of 21 basic terms; 22 (2) the choices available to consumers to take 23 electric service from an alternative retail electric 24 supplier or remain as a retail customer of an electric 25 utility; 26 (3) a customer's rights, risks and responsibilities 27 in receiving service from an alternative retail electric 28 supplier or remaining as a retail customer of an electric 29 utility; 30 (4) the legal obligations of alternative retail 31 electric suppliers; 32 (5) those services that may be offered on a 33 competitive basis in a deregulated electric services 34 market, including services that could be packaged with -66- SRS90HB0362JJsaam02 1 the delivery of electric power and energy; 2 (6) services that an electric utility is required 3 to provide pursuant to tariffed rates; 4 (7) the components of a bill that could be received 5 by a customer taking delivery services; 6 (8) the complaint procedures set forth in Section 7 10-108 of this Act by which consumers may seek a redress 8 of grievances against an electric utility or an 9 alternative retail electric supplier and a list of phone 10 numbers of the Commission, the Attorney General or other 11 entities that can provide information and assistance to 12 customers; and 13 (9) additional information available from the 14 Commission upon request. 15 (f) Within 45 days following the submission required of 16 the working group by subsection (d) of this Section, the 17 Commission shall approve or disapprove the educational 18 materials and recommendations for program implementation. 19 The Commission shall be deemed to have approved the 20 educational program materials and recommendations unless the 21 Commission disapproves of any such material or recommendation 22 within 45 days following the date of receipt. 23 (g) Once approved by the Commission, materials 24 comprising the consumer education program contemplated by 25 this Section shall be distributed as follows: 26 (1) Electric utilities shall mail printed 27 educational materials specified by the working group and 28 approved by the Commission (a) to all residential and 29 small commercial retail customers within a reasonable 30 period prior to the date that such customers become 31 eligible to purchase power from alternative retail 32 electric suppliers, such "reasonable period" to be 33 determined by the Commission; and (b) once the applicable 34 customer class becomes eligible to receive delivery -67- SRS90HB0362JJsaam02 1 services, to all new residential and small commercial 2 retail customers at the time that such customers begin 3 taking services from the electric utility. 4 (2) Alternative retail electric suppliers shall 5 include such materials with all initial mailings to 6 potential residential and small commercial retail 7 customers but in all circumstances prior to the time by 8 which an alternative retail electric supplier executes 9 any agreements or contracts with such customers for the 10 supply of electric services. 11 (3) Both electric utilities and alternative retail 12 electric suppliers shall provide such materials at no 13 charge to residential and small commercial retail 14 customers upon request. 15 (4) The Commission shall make available upon 16 request and at no charge, and shall make available to the 17 public on the Internet through the State of Illinois 18 World Wide Web Site: 19 (A) all printed educational materials 20 developed by the working group and approved by the 21 Commission; 22 (B) a list of all certified alternative retail 23 electric suppliers serving residential and small 24 commercial retail customers within the service 25 territory of each electric utility; 26 (C) a list of alternative retail electric 27 suppliers serving residential or small commercial 28 retail customers which have been found in the last 3 29 years by the Commission pursuant to Section 10-108 30 to have failed to provide service in accordance with 31 the terms of their contracts with such retail 32 customers; and 33 (D) guidelines to assist customers in 34 determining which energy supplier is most -68- SRS90HB0362JJsaam02 1 appropriate for each customer. 2 (h) The Commission may also adopt a uniform disclosure 3 form which alternative retail electric suppliers would be 4 required to complete enabling consumers to compare prices, 5 terms and conditions offered by such suppliers. 6 (i) The Commission shall make available to the public 7 staff with the ability and knowledge to respond to consumer 8 inquiries. 9 (j) The costs of printing educational materials approved 10 by the Commission pursuant to this Section shall be payable 11 solely from funding as provided in this subsection. 12 Each year the General Assembly shall appropriate money to 13 the Commission from the General Revenue Fund for the expenses 14 of the Commission associated with this Section. The cost of 15 the consumer education program contemplated by this Section 16 shall not exceed the amount of such appropriation. In no 17 event shall any electric utility, alternative retail electric 18 supplier or customer be liable for the costs of printing 19 consumer education program material in accordance with this 20 Section. The obligations associated with this consumer 21 education program shall not exceed the amounts appropriated 22 for this program pursuant to this Section. 23 (k) The Commission shall study the effectiveness of the 24 consumer education program. Such study shall include a 25 notice and an opportunity for participation and comment by 26 all interested and potentially affected parties. Such study 27 shall be completed by January 31st of each year during the 28 mandatory transition period and a summary thereof, together 29 with any legislative recommendations, shall be included in 30 the Commission's Annual Report due in accordance with Section 31 4-304 of this Act. 32 (220 ILCS 5/16-118 new) 33 Sec. 16-118. Services provided by electric utilities to -69- SRS90HB0362JJsaam02 1 alternative retail electric suppliers. 2 (a) It is in the best interest of Illinois energy 3 consumers to promote fair and open competition in the 4 provision of electric power and energy and to prevent 5 anticompetitive practices in the provision of electric power 6 and energy. Therefore, to the extent an electric utility 7 provides electric power and energy or delivery services to 8 alternative retail electric suppliers and such services are 9 not subject to the jurisdiction of the Federal Energy 10 Regulatory Commission, and are not competitive services, they 11 shall be provided through tariffs that are filed with the 12 Commission, pursuant to Article IX of this Act. Each electric 13 utility shall permit alternative retail electric suppliers to 14 interconnect facilities to those owned by the utility 15 provided they meet established standards for such 16 interconnection, and may provide standby or other services to 17 alternative retail electric suppliers. The alternative retail 18 electric supplier shall sign a contract setting forth the 19 prices, terms and conditions for interconnection with the 20 electric utility and the prices, terms and conditions for 21 services provided by the electric utility to the alternative 22 retail electric supplier in connection with the delivery by 23 the electric utility of electric power and energy supplied by 24 the alternative retail electric supplier. 25 (b) An electric utility shall file a tariff pursuant to 26 Article IX of the Act that would allow alternative retail 27 electric suppliers or electric utilities other than the 28 electric utility in whose service area retail customers are 29 located to issue single bills to the retail customers for 30 both the services provided by such alternative retail 31 electric supplier or other electric utility and the delivery 32 services provided by the electric utility to such customers. 33 The tariff filed pursuant to this subsection shall (i) 34 require partial payments made by retail customers to be -70- SRS90HB0362JJsaam02 1 credited first to the electric utility's tariffed services, 2 (ii) impose commercially reasonable terms with respect to 3 credit and collection, including requests for deposits, (iii) 4 retain the electric utility's right to disconnect the retail 5 customers, if it does not receive payment for its tariffed 6 services, in the same manner that it would be permitted to if 7 it had billed for the services itself, and (iv) require the 8 alternative retail electric supplier or other electric 9 utility that elects the billing option provided by this 10 tariff to include on each bill to retail customers an 11 identification of the electric utility providing the delivery 12 services and a listing of the charges applicable to such 13 services. The tariff filed pursuant to this subsection may 14 also include other just and reasonable terms and conditions. 15 In addition, an electric utility, an alternative retail 16 electric supplier or electric utility other than the electric 17 utility in whose service area the customer is located, and a 18 customer served by such alternative retail electric supplier 19 or other electric utility, may enter into an agreement 20 pursuant to which the alternative retail electric supplier 21 or other electric utility pays the charges specified in 22 Section 16-108, or other customer-related charges, including 23 taxes and fees, in lieu of such charges being recovered by 24 the electric utility directly from the customer. 25 (220 ILCS 5/16-119 new) 26 Sec. 16-119. Switching suppliers. An electric utility or 27 an alternative retail electric supplier may establish a term 28 of service, notice period for terminating service and 29 provisions governing early termination through a tariff or 30 contract. A customer may change its supplier subject to 31 tariff or contract terms and conditions. Any notice 32 provisions; or provision for a fee, charge or penalty with 33 early termination of a contract; shall be conspicuously -71- SRS90HB0362JJsaam02 1 disclosed in any tariff or contract. A customer shall remain 2 responsible for any unpaid charges owed to an electric 3 utility or alternative retail electric supplier at the time 4 it switches to another provider. 5 (220 ILCS 5/16-119A new) 6 Sec. 16-119A. Functional separation. 7 (a) Within 90 days after the effective date of this 8 amendatory Act of 1997, the Commission shall open a 9 rulemaking proceeding to establish standards of conduct for 10 every electric utility described in subsection (b). To 11 create efficient competition between suppliers of generating 12 services and sellers of such services at retail and 13 wholesale, the rules shall allow all customers of a public 14 utility that distributes electric power and energy to 15 purchase electric power and energy from the supplier of their 16 choice in accordance with the provisions of Section 16-104. 17 In addition, the rules shall address relations between 18 providers of any 2 services described in subsection (b) to 19 prevent undue discrimination and promote efficient 20 competition. Provided, however, that a proposed rule shall 21 not be published prior to May 15, 1999. 22 (b) The Commission shall also have the authority to 23 investigate the need for, and adopt rules requiring, 24 functional separation between the generation services and the 25 delivery services of those electric utilities whose principal 26 service area is in Illinois as necessary to meet the 27 objective of creating efficient competition between suppliers 28 of generating services and sellers of such services at retail 29 and wholesale. After January 1, 2003, the Commission shall 30 also have the authority to investigate the need for, and 31 adopt rules requiring, functional separation between an 32 electric utility's competitive and non-competitive services. 33 (c) In establishing or considering the need for rules -72- SRS90HB0362JJsaam02 1 under subsections (a) and (b), the Commission shall take into 2 account the effects on the cost and reliability of service 3 and the obligation of the utility to provide bundled service 4 under this Act. The Commission shall adopt rules that are a 5 cost effective means to ensure compliance with this Section. 6 (d) Nothing in this Section shall be construed as 7 imposing any requirements or obligations that are in conflict 8 with federal law. 9 (220 ILCS 5/16-120 new) 10 Sec. 16-120. Development of competitive market; 11 Commission study and reports; investigation. 12 (a) On or before December 31, 1999 and once every 3 years 13 thereafter, the Commission shall monitor and analyze patterns 14 of entry and exit, applications for entry and exit, and any 15 barriers to entry or participation that may exist, for 16 services provided under this Article; shall analyze any 17 impediments to the establishment of a fully competitive 18 energy and power market in Illinois; and shall include its 19 findings together with appropriate recommendations for 20 legislative action in a report to the General Assembly. 21 (b) Beginning in 2001, and ending in 2006, the 22 Commission shall prepare an annual report regarding the 23 development of electricity markets in Illinois which shall be 24 filed by April 1 of each year with the Joint Committee on 25 Legislative Support Services of the General Assembly and the 26 Governor and which shall be publicly available. Such report 27 shall include, at a minimum, the following information: 28 (1) the aggregate annual peak demand of retail 29 customers in the State of Illinois in the preceding calendar 30 year; 31 (2) the total annual kilowatt-hours delivered and 32 sold to retail customers in the State of Illinois by each 33 electric utility within its own service territory, each -73- SRS90HB0362JJsaam02 1 electric utility outside its service territory, and 2 alternative retail electric suppliers in the preceding 3 calendar year; 4 (3) the percentage of the total kilowatt-hours 5 delivered and sold to retail customers in the State of 6 Illinois in the preceding calendar year by each electric 7 utility within its service territory, each electric utility 8 outside its service territory, and each alternative retail 9 electric supplier; and 10 (4) any other information the Commission considers 11 significant in assessing the development of Illinois 12 electricity markets, which may include, to the extent 13 available, information similar to that described in items 1, 14 2 and 3 with respect to cogeneration, self-generation and 15 other sources of electric power and energy provided to 16 customers that do not take delivery services or bundled 17 electric utility services. 18 The Commission may also include such other information as 19 it deems to be necessary or beneficial in describing or 20 explaining the results of its Report. The Report required by 21 this Section shall be adopted by a vote of the full 22 Commission prior to filing. Proprietary or confidential 23 information shall not be disclosed publicly. Nothing 24 contained in this Section shall prohibit the Commission from 25 taking actions that would otherwise be allowed under this 26 Act. 27 (220 ILCS 5/16-121 new) 28 Sec. 16-121. Non-discrimination; adoption of rules and 29 regulations. The Commission shall adopt rules and regulations 30 no later than 180 days after the effective date of this 31 amendatory Act of 1997 governing the relationship between the 32 electric utility and its affiliates, and ensuring 33 non-discrimination in services provided to the utility's -74- SRS90HB0362JJsaam02 1 affiliate and any alternative retail electric supplier, 2 including without limitation, cost allocation, 3 cross-subsidization and information sharing. 4 (220 ILCS 5/16-122 new) 5 Sec. 16-122. Customer information. 6 (a) Upon the request of a retail customer, or a person 7 who presents verifiable authorization and is acting as the 8 customer's agent, and payment of a reasonable fee, electric 9 utilities shall provide to the customer or its authorized 10 agent the customer's billing and usage data. 11 (b) Upon request from any alternative retail electric 12 supplier and payment of a reasonable fee, an electric utility 13 serving retail customers in its service area shall make 14 available generic information concerning the usage, load 15 shape curve or other general characteristics of customers by 16 rate classification. Provided however, no customer specific 17 billing, usage or load shape data shall be provided under 18 this subsection unless authorization to provide such 19 information is provided by the customer pursuant to 20 subsection (a) of this Section. 21 (c) All such customer information shall be made 22 available in a timely fashion in an electronic format, if 23 available. 24 (220 ILCS 5/16-123 new) 25 Sec. 16-123. Establishment of customer information 26 centers for electric utilities and alternative retail 27 electric suppliers. All electric utilities and alternative 28 retail electric suppliers shall be required to maintain a 29 customer call center where customers can reach a 30 representative and receive current information. Customers 31 shall periodically be notified on how to reach the call 32 center. The Commission shall have the authority to establish -75- SRS90HB0362JJsaam02 1 reporting requirements for such centers. 2 (220 ILCS 5/16-124 new) 3 Sec. 16-124. Metering for residential and small 4 commercial retail customers. An electric utility shall not 5 require a residential or small commercial retail customer to 6 take additional metering or metering capability as a 7 condition of taking delivery services unless the Commission 8 finds, after notice and hearing, that additional metering or 9 metering capability is required to meet reliability 10 requirements. Alternative retail electric suppliers serving 11 such customers may provide such additional metering or 12 metering capability at their own expense or take such 13 additional metering or metering capability from the utility 14 as a tariffed service. Any additional metering requirements 15 shall be imposed in a nondiscriminatory manner. Nothing in 16 this subsection shall be construed to prevent the normal 17 maintenance, replacement or upgrade of meters as required to 18 comply with Commission rules. 19 (220 ILCS 5/16-125 new) 20 Sec. 16-125. Transmission and distribution reliability 21 requirements. 22 (a) To assure the reliable delivery of electricity to 23 all customers in this State and the effective implementation 24 of the provisions of this Article, the Commission shall, 25 within 180 days of the effective date of this Article, adopt 26 rules and regulations for assessing and assuring the 27 reliability of the transmission and distribution systems and 28 facilities that are under the Commission's jurisdiction. 29 (b) These rules and regulations shall require each 30 electric utility or alternative retail electric supplier 31 owning, controlling, or operating transmission and 32 distribution facilities and equipment subject to the -76- SRS90HB0362JJsaam02 1 Commission's jurisdiction, referred to in this Section as 2 "jurisdictional entities", to adopt and implement procedures 3 for restoring transmission and distribution services to 4 customers after transmission or distribution outages on a 5 non-discriminatory basis without regard to whether a customer 6 has chosen the electric utility, an affiliate of the electric 7 utility, or another entity as its provider of electric power 8 and energy. These rules and regulations shall also, at a 9 minimum, specifically require each jurisdictional entity to 10 submit annually to the Commission. 11 (1) the number and duration of planned and 12 unplanned outages during the prior year and their impacts 13 on customers; 14 (2) outages that were controllable and outages that 15 were exacerbated in scope or duration by the condition of 16 facilities, equipment or premises or by the actions or 17 inactions of operating personnel or agents; 18 (3) customer service interruptions that were due 19 solely to the actions or inactions of an alternative 20 retail electric supplier or a public utility in supplying 21 power or energy; 22 (4) a detailed report of the age, current 23 condition, reliability and performance of the 24 jurisdictional entity's existing transmission and 25 distribution facilities, which shall include, without 26 limitation, the following data: 27 (i) a summary of the jurisdictional entity's 28 outages and voltage variances reportable under the 29 Commission's rules; 30 (ii) the jurisdictional entity's expenditures 31 for transmission construction and maintenance, the 32 ratio of those expenditures to the jurisdictional 33 entity's transmission investment, and the average 34 remaining depreciation lives of the entity's -77- SRS90HB0362JJsaam02 1 transmission facilities, expressed as a percentage 2 of total depreciation lives; 3 (iii) the jurisdictional entity's expenditures 4 for distribution construction and maintenance, the 5 ratio of those expenditures to the jurisdictional 6 entity's distribution investment, and the average 7 remaining depreciation lives of the entity's 8 distribution facilities, expressed as a percentage 9 of total depreciation lives; 10 (iv) a customer satisfaction survey covering, 11 among other areas identified in Commission rules, 12 reliability, customer service, and understandability 13 of the jurisdictional entity's services and prices; 14 and 15 (v) the corresponding information, in the same 16 format, for the previous 3 years, if available; 17 (5) a plan for future investment and reliability 18 improvements for the jurisdictional entity's transmission 19 and distribution facilities that will ensure continued 20 reliable delivery of energy to customers and provide the 21 delivery reliability needed for fair and open 22 competition; and 23 (6) a report of the jurisdictional entity's 24 implementation of its plan filed pursuant to subparagraph 25 (5) for the previous reporting period. 26 (c) The Commission rules shall set forth the criteria 27 that will be used to assess each jurisdictional entity's 28 annual report and evaluate its reliability performance. Such 29 criteria must take into account, at a minimum: the items 30 required to be reported in subsection (b); the relevant 31 characteristics of the area served; the age and condition of 32 the system's equipment and facilities; good engineering 33 practices; the costs of potential actions; and the benefits 34 of avoiding the risks of service disruption. -78- SRS90HB0362JJsaam02 1 (d) At least every 3 years, beginning in the year the 2 Commission issues the rules required by subsection (a) or the 3 following year if the rules are issued after June 1, the 4 Commission shall assess the annual report of each 5 jurisdictional entity and evaluate its reliability 6 performance. The Commission's evaluation shall include 7 specific identification of, and recommendations concerning, 8 any potential reliability problems that it has identified as 9 a result of its evaluation. 10 (e) In the event that more than 30,000 customers of an 11 electric utility are subjected to a continuous power 12 interruption of 4 hours or more that results in the 13 transmission of power at less than 50% of the standard 14 voltage, or that results in the total loss of power 15 transmission, the utility shall be responsible for 16 compensating customers affected by that interruption for 4 17 hours or more for all actual damages, which shall not 18 include consequential damages, suffered as a result of the 19 power interruption. The utility shall also reimburse the 20 affected municipality, county, or other unit of local 21 government in which the power interruption has taken place 22 for all emergency and contingency expenses incurred by the 23 unit of local government as a result of the interruption. A 24 waiver of the requirements of this subsection may be granted 25 by the Commission in instances in which the utility can show 26 that the power interruption was a result of any one or more 27 of the following causes: 28 (1) Unpreventable damage due to weather events or 29 conditions. 30 (2) Customer tampering. 31 (3) Unpreventable damage due to civil or 32 international unrest or animals. 33 (4) Damage to utility equipment or other actions by 34 a party other than the utility, its employees, agents, -79- SRS90HB0362JJsaam02 1 or contractors. 2 Loss of revenue and expenses incurred in complying with this 3 subsection may not be recovered from ratepayers. 4 (f) In the event of a power surge or other fluctuation 5 that causes damage and affects more than 30,000 customers, 6 the electric utility shall pay to affected customers the 7 replacement value of all goods damaged as a result of the 8 power surge or other fluctuation unless the utility can show 9 that the power surge or other fluctuation was due to one or 10 more of the following causes: 11 (1) Unpreventable damage due to weather events or 12 conditions. 13 (2) Customer tampering. 14 (3) Unpreventable damage due to civil or 15 international unrest or animals. 16 (4) Damage to utility equipment or other actions by 17 a party other than the utility, its employees, agents, 18 or contractors. 19 Loss of revenue and expenses incurred in complying with this 20 subsection may not be recovered from ratepayers. Customers 21 with respect to whom a waiver has been granted by the 22 Commission pursuant to subparagraphs (1)-(4) of subsections 23 (e) and (f) shall not count toward the 30,000 customers 24 required therein. 25 (g) Whenever an electric utility must perform planned 26 or routine maintenance or repairs on its equipment that will 27 result in transmission of power at less than 50% of the 28 standard voltage, loss of power, or power fluctuation (as 29 defined in subsection (f)), the utility shall make 30 reasonable efforts to notify potentially affected customers 31 no less than 24 hours in advance of performance of the 32 repairs or maintenance. 33 (h) Remedies provided for under this Section may be 34 sought exclusively through the Illinois Commerce Commission -80- SRS90HB0362JJsaam02 1 as provided under Section 10-109 of this Act. Damages 2 awarded under this Section for a power interruption shall be 3 limited to actual damages, which shall not include 4 consequential damages, and litigation costs. Damage awards 5 may not be paid out of utility rate funds. 6 (i) The provisions of this Section shall not in any way 7 diminish or replace other civil or administrative remedies 8 available to a customer or a class of customers. 9 (j) The Commission shall by rule require an electric 10 utility to maintain service records detailing information on 11 each instance of transmission of power at less than 50% of 12 the standard voltage, loss of power, or power fluctuation 13 (as defined in subsection (f)), that affects 10 or more 14 customers. Occurrences that are momentary shall not be 15 required to be recorded or reported. The service record 16 shall include, for each occurrence, the following 17 information: 18 (1) The date. 19 (2) The time of occurrence. 20 (3) The duration of the incident. 21 (4) The number of customers affected. 22 (5) A description of the cause. 23 (6) The geographic area affected. 24 (7) The specific equipment involved in the 25 fluctuation or interruption. 26 (8) A description of measures taken to restore 27 service. 28 (9) A description of measures taken to remedy the 29 cause of the power interruption or fluctuation. 30 (10) A description of measures taken to prevent 31 future occurrence. 32 (11) The amount of remuneration, if any, paid to 33 affected customers. 34 (12) A statement of whether the fixed charge was -81- SRS90HB0362JJsaam02 1 waived for affected customers. 2 Copies of the records containing this information shall 3 be available for public inspection at the utility's offices, 4 and copies thereof may be obtained upon payment of a fee not 5 exceeding the reasonable cost of reproduction. A copy of 6 each record shall be filed with the Commission and shall be 7 available for public inspection. Copies of the records may 8 be obtained upon payment of a fee not exceeding the 9 reasonable cost of reproduction. 10 (k) The requirements of subsections (e) through (j) of 11 this Section shall apply only to an electric public utility 12 having 1,000,000 or more customers. 13 (220 ILCS 5/16-125A new) 14 Sec. 16-125A. Consolidated billing provision for 15 established intergovernmental agreement participants. 16 (a) The tariffs of each electric utility serving at 17 least 1,000,000 customers shall permit governmental 18 customers acting through an intergovernmental agreement that 19 was in effect 30 days prior to the date specified in 20 subsection (b) and which provides for these governmental 21 customers to work cooperatively in the purchase of electric 22 energy to aggregate their monthly kilowatt-hour energy usage 23 and monthly kilowatt billing demand. 24 (b) In implementing the provisions of this Section, the 25 rates and charges applicable under the combined billing 26 tariff of the serving utility in effect on May 1, 1997 shall 27 apply to all load of eligible government customers selected 28 by the governmental customers including, but not limited to, 29 load served under contract. 30 (c) For purposes of this Section, "governmental 31 customers" shall mean any customer that is a municipality, 32 municipal corporation, unit of local government, park 33 district, school district, community college district, -82- SRS90HB0362JJsaam02 1 forest preserve district, special district, public 2 corporation, body politic and corporate, sanitary or water 3 reclamation district, or other local government agencies, 4 including any entity created by intergovernmental agreement 5 among any of the foregoing entities to implement the 6 arrangements permitted by subsections (a) and (b) of this 7 Section. 8 (d) Electric utilities shall file tariffs that comply 9 with the requirements of this Section within 60 days after 10 the effective date of this amendatory Act of 1997. 11 (220 ILCS 5/16-126 new) 12 Sec. 16-126. Membership in an independent system 13 operator. 14 (a) The General Assembly finds that the establishment of 15 one or more independent system operators or their functional 16 equivalents is required to facilitate the development of an 17 open and efficient marketplace for electric power and energy 18 to the benefit of Illinois consumers. Therefore, each 19 Illinois electric utility owning or controlling transmission 20 facilities or providing transmission services in Illinois and 21 that is a member of the Mid-American Interconnected Network 22 as of the effective date of this amendatory Act of 1997 shall 23 submit for approval to the Federal Energy Regulatory 24 Commission an application for establishing or joining an 25 independent system operator that shall: 26 (1) independently manage and control transmission 27 facilities of any electric utility; 28 (2) provide for nondiscriminatory access to and use 29 of the transmission system for buyers and sellers of 30 electricity; 31 (3) direct the transmission activities of the 32 control area operators; 33 (4) coordinate, plan, and order the installation of -83- SRS90HB0362JJsaam02 1 new transmission facilities; 2 (5) adopt inspection, maintenance, repair, and 3 replacement standards for the transmission facilities 4 under its control and direct maintenance, repair, and 5 replacement of all facilities under its control; and 6 (6) implement procedures and act to assure the 7 provision of adequate and reliable service. 8 These standards shall be consistent with reliability 9 criteria no less stringent than those established by the 10 Mid-American Interconnected Network and the North American 11 Electric Reliability Council or their successors. 12 (b) The requirements of this Section may be met by 13 joining or establishing a regional independent system 14 operator that meets the criteria enumerated in subsections 15 (a), (c), and (d) of this Section, as determined by the 16 Commission. To achieve the objectives set forth in subsection 17 (a), the State of Illinois, through the appropriate officers, 18 departments, and agencies, shall work cooperatively with the 19 appropriate officials and agencies of those States contiguous 20 to this State and the Federal Energy Regulatory Commission 21 towards the formation of one or more regional independent 22 system operators. 23 (c) The independent system operator's governance 24 structure must be fair and non-discriminatory, and the 25 independent system operator must be independent of any one 26 market participant or class of participants. The independent 27 system operator's rules of governance must prevent control, 28 or the appearance of control, of decision-making by any class 29 of participants. 30 (d) Participants in the independent system operator 31 shall make available to the independent system operator all 32 information required by the independent system operator in 33 performance of its functions described herein. The 34 independent system operator and the electric utilities -84- SRS90HB0362JJsaam02 1 participating in the independent system operator shall make 2 all filings required by the Federal Energy Regulatory 3 Commission. The independent system operator shall ensure that 4 additional filings at the Federal Energy Regulatory 5 Commission request confirmation of the relevant provisions of 6 this amendatory Act of 1997. 7 (e) If a spot market, exchange market, or other 8 market-based mechanism providing transparent real-time market 9 prices for electric power has not been developed, the 10 independent system operator or a closely cooperating agent of 11 the independent system operator may provide an efficient 12 competitive power exchange auction for electric power and 13 energy, open on a nondiscriminatory basis to all suppliers, 14 which meets the loads of all auction customers at efficient 15 prices. 16 (f) For those electric utilities referred to in 17 subsection (a) which have not filed with the Federal Energy 18 Regulatory Commission by June 30, 1998 an application for 19 establishment or participation in an independent system 20 operator or if such application has not been approved by the 21 Federal Energy Regulatory Commission by March 31, 1999, a 5 22 member Oversight Board shall be formed. The Oversight Board 23 shall (1) oversee the creation of an Illinois independent 24 system operator and (2) determine the composition and initial 25 terms of service of, and appoint the initial members of, the 26 Illinois independent system operator board of directors. The 27 Oversight Board shall consist of the following: (1) 3 persons 28 appointed by the Governor; (2) one person appointed by the 29 Speaker of the House of Representatives; and (3) one person 30 appointed by the President of the Senate. The Oversight Board 31 shall take the steps that are necessary to ensure the 32 earliest possible incorporation of an Illinois independent 33 system operator under the Business Corporation Act of 1983, 34 and shall serve until the Illinois independent system -85- SRS90HB0362JJsaam02 1 operator is incorporated. 2 (g) After notice and hearing, the Commission shall 3 require each electric utility referred to in subsection (a), 4 that is not participating in an independent system operator 5 meeting the requirements of subsections (a) and (c), to seek 6 authority from the Federal Energy Regulatory Commission to 7 transfer functional control of transmission facilities to the 8 Illinois independent system operator for control by the 9 Illinois independent system operator consistent with the 10 requirements of subsection (a). Upon approval by the Federal 11 Energy Regulatory Commission, electric utilities may also 12 elect to transfer ownership of transmission facilities to the 13 Illinois independent system operator. Nothing in this Act 14 shall be deemed to preclude the Illinois independent system 15 operator from (1) seeking authority, as necessary, to merge 16 with or otherwise combine its operations with those of one or 17 more other entities authorized to provide transmission 18 services, (2) purchasing or leasing transmission assets from 19 transmission-owning entities not required by this Section to 20 lease transmission facilities to the Illinois independent 21 system operator, or (3) operating as a transmission public 22 utility under the Federal Power Act. 23 (h) Any other owner of transmission facilities in 24 Illinois not required by this Section to participate in an 25 independent system operator shall be permitted, but not 26 required, to become a member of the Illinois independent 27 system operator. 28 (i) The Illinois independent system operator created 29 under this Section, and any other independent system operator 30 authorized by the Federal Energy Regulatory Commission to 31 provide transmission services as a public utility under the 32 Federal Power Act within the State of Illinois, shall be 33 deemed to be a public utility for purposes of Section 8-503 34 and 8-509 of this Act. -86- SRS90HB0362JJsaam02 1 (j) Electric utilities referred to in subsection (a) may 2 withdraw from the Illinois independent system operator upon 3 becoming a member of an independent system operator or 4 operators conforming with the criteria in subsections (a) and 5 (c) and whose formation and operation has been approved by 6 the Federal Energy Regulatory Commission. This subsection 7 does not relieve any electric utility of any obligations 8 under Federal law. 9 (k) Nothing in this Section shall be construed as 10 imposing any requirements or obligations that are in conflict 11 with federal law. 12 (220 ILCS 5/16-127 new) 13 Sec. 16-127. Environmental disclosure. 14 (a) Effective January 1, 1999, every electric utility 15 and alternative retail electric supplier shall provide the 16 following information, to the maximum extent practicable, 17 with its bills to its customers on a quarterly basis: 18 (i) the known sources of electricity supplied, 19 broken-out by percentages, of biomass power, coal-fired 20 power, hydro power, natural gas-fired power, nuclear 21 power, oil-fired power, solar power, wind power and other 22 resources, respectively; and 23 (ii) a pie-chart which graphically depicts the 24 percentages of the sources of the electricity supplied as 25 set forth in subparagraph (i) of this subsection. 26 (b) In addition, every electric utility and alternative 27 retail electric supplier shall provide, to the maximum extent 28 practicable, with its bills to its customers on a quarterly 29 basis, a standardized chart in a format to be determined by 30 the Commission in a rule following notice and hearings which 31 provides the amounts of carbon dioxide, nitrous oxides and 32 sulfur dioxide emissions and nuclear waste attributable to 33 the known sources of electricity supplied as set forth in -87- SRS90HB0362JJsaam02 1 subparagraph (i) of subsection (a) of this Section. 2 (c) The electric utilities and alternative retail 3 electric suppliers may provide their customers with such 4 other information as they believe relevant to the information 5 required in subsections (a) and (b) of this Section. 6 (d) For the purposes of subsection (a) of this Section, 7 "biomass" means dedicated crops grown for energy production 8 and organic wastes. 9 (e) All of the information provided in subsections (a) 10 and (b) of this Section shall be presented to the Commission 11 for inclusion in its World Wide Web Site. 12 (220 ILCS 5/16-128 new) 13 Sec. 16-128. Provisions related to utility employees 14 during the mandatory transition period. 15 (a) The General Assembly finds: 16 (1) The reliability and safety of the electric 17 system has depended on a workforce of skilled and 18 dedicated employees, equipped with technical training and 19 experience. 20 (2) The integrity and reliability of the system has 21 also depended on the industry's commitment to invest in 22 regular inspection and maintenance, to assure that it can 23 withstand the demands of heavy service requirements and 24 emergency situations. 25 (3) It is in the State's interest to protect the 26 interests of utility employees who have dedicated 27 themselves to assuring reliable service to the citizens 28 of this State, and who might otherwise be economically 29 displaced in a restructured industry. 30 The General Assembly further finds that it is necessary 31 to assure that employees operating in the deregulated 32 industry have the requisite skills, knowledge, and competence 33 to provide reliable and safe electrical service and therefore -88- SRS90HB0362JJsaam02 1 that alternative retail electric suppliers shall be required 2 to demonstrate the competence of their employees to work in 3 the industry. 4 The knowledge, skill, and competence levels to be 5 demonstrated shall be consistent with those generally 6 required of or by the electric utilities in this State with 7 respect to their employees. 8 Adequate demonstration of requisite knowledge, skill and 9 competence, shall include such factors as completion by the 10 employee of an accredited or otherwise recognized 11 apprenticeship program for the particular craft, trade or 12 skill, or specified years of employment with an electric 13 utility performing a particular work function. 14 To implement this requirement, the Commission, in 15 determining that an applicant meets the standards for 16 certification as an alternative retail electric supplier, 17 shall require the applicant to demonstrate (i) that the 18 applicant is licensed to do business, and bonded, in the 19 State of Illinois; and (ii) that the employees of the 20 applicant that will be installing, operating, and maintaining 21 generation, transmission, or distribution facilities within 22 this State, or any entity with which the applicant has 23 contracted to perform those functions within this State, have 24 the requisite knowledge, skills, and competence to perform 25 those functions in a safe and responsible manner in order to 26 provide safe and reliable service, in accordance with the 27 criteria stated above. 28 (b) The General Assembly finds, based on experience in 29 other industries that have undergone similar transitions, 30 that the introduction of competition into the State's 31 electric utility industry may result in workforce reductions 32 by electric utilities which may adversely affect persons who 33 have been employed by this State's electric utilities in 34 functions important to the public convenience and welfare. -89- SRS90HB0362JJsaam02 1 The General Assembly further finds that the impacts on 2 employees and their communities of any necessary reductions 3 in the utility workforce directly caused by this 4 restructuring of the electric industry shall be mitigated to 5 the extent practicable through such means as offers of 6 voluntary severance, retraining, early retirement, 7 outplacement and related benefits. Therefore, before any such 8 reduction in the workforce during the transition period, an 9 electric utility shall present to its employees or their 10 representatives a workforce reduction plan outlining the 11 means by which the electric utility intends to mitigate the 12 impact of such workforce reduction on its employees. 13 (c) In the event of a sale, purchase, or any other 14 transfer of ownership during the mandatory transition period 15 of one or more Illinois divisions or business units, and/or 16 generating stations or generating units, of an electric 17 utility, the electric utility's contract and/or agreements 18 with the acquiring entity or persons shall require that the 19 entity or persons hire a sufficient number of non-supervisory 20 employees to operate and maintain the station, division or 21 unit by initially making offers of employment to the 22 non-supervisory workforce of the electric utility's division, 23 business unit, generating station and/or generating unit at 24 no less than the wage rates, and substantially equivalent 25 fringe benefits and terms and conditions of employment that 26 are in effect at the time of transfer of ownership of said 27 division, business unit, generating station, and/or 28 generating units; and said wage rates and substantially 29 equivalent fringe benefits and terms and conditions of 30 employment shall continue for at least 30 months from the 31 time of said transfer of ownership unless the parties 32 mutually agree to different terms and conditions of 33 employment within that 30-month period. The utility shall 34 offer a transition plan to those employees who are not -90- SRS90HB0362JJsaam02 1 offered jobs by the acquiring entity because that entity has 2 a need for fewer workers. If there is litigation concerning 3 the sale, or other transfer of ownership of the electric 4 utility's divisions, business units, generating station, or 5 generating units, the 30-month period will begin on the date 6 the acquiring entity or persons take control or management of 7 the divisions, business units, generating station or 8 generating units of the electric utility. 9 (d) If a utility transfers ownership during the 10 mandatory transition period of one or more Illinois 11 divisions, business units, generating stations or generating 12 units of an electric utility to a majority-owned subsidiary, 13 that subsidiary shall continue to employ the utility's 14 employees who were employed by the utility at such division, 15 business unit or generating station at the time of the 16 transfer under the same terms and conditions of employment as 17 those employees enjoyed at the time of the transfer. If 18 ownership of the subsidiary is subsequently sold or 19 transferred to a third party during the transition period, 20 the transition provisions outlined in subsection (c) shall 21 apply. 22 (e) The plant transfer provisions set forth above shall 23 not apply to any generating station which was the subject of 24 a sales agreement entered into before January 1, 1997. 25 (220 ILCS 5/16-129 new) 26 Sec. 16-129. Existing contracts not affected. Nothing 27 in this Article XVI shall affect the right of an electric 28 utility to continue to provide, or the right of the customer 29 to continue to receive, service pursuant to a contract for 30 electric service between the electric utility and the 31 customer, in accordance with the prices, terms and 32 conditions provided for in that contract. Either the 33 electric utility or the customer may require compliance with -91- SRS90HB0362JJsaam02 1 the prices, terms and conditions of such contract. 2 (220 ILCS 5/16-130 new) 3 Sec. 16-130. Annual Reports. The General Assembly finds 4 that it is necessary to have reliable and accurate 5 information regarding the transition to a competitive 6 electric industry. In addition to the annual report 7 requirements pursuant to Section 5-109 of this Act, each 8 electric utility shall file with the Commission a report on 9 the following topics in accordance with the schedule set 10 forth in subsection (b) of this Section: 11 (1) Data on each customer class of the electric 12 utility in which delivery services have been elected 13 including: 14 (A) number of retail customers in each class 15 that have elected delivery service; 16 (B) kilowatt hours consumed by the customers 17 described in subparagraph (A); 18 (C) revenue loss experienced by the utility as 19 a result of customers electing delivery services or 20 market-based prices as compared to continued service 21 under otherwise applicable tariffed rates; 22 (D) total amount of funds collected from each 23 customer class pursuant to the transition charges 24 authorized in Section 16-108; 25 (E) Such other information as the Commission 26 may by rule require. 27 (2) A description of any steps taken by the 28 electric utility to mitigate and reduce its costs, 29 including both a detailed description of steps taken 30 during the preceding calendar year and a summary of steps 31 taken since the effective date of this amendatory Act of 32 1997, and including, to the extent practicable, 33 quantification of the costs mitigated or reduced by -92- SRS90HB0362JJsaam02 1 specific actions taken by the electric utility. 2 (3) A description of actions taken under Sections 3 5-104, 7-204, 9-220, and 16-111 of this Act. This 4 information shall include but not be limited to: 5 (A) a description of the actions taken; 6 (B) the effective date of the action; 7 (C) the annual savings or additional charges 8 realized by customers from actions taken, by 9 customer class and total for each year; 10 (D) the accumulated impact on customers by 11 customer class and total; and 12 (E) a summary of the method used to quantify 13 the impact on customers. 14 (4) A summary of the electric utility's use of 15 transitional funding instruments, including a description 16 of the electric utility's use of the proceeds of any 17 transitional funding instruments it has issued in 18 accordance with Article XVIII of this Act. 19 (5) Kilowatt-hours consumed in the twelve months 20 ending December 31, 1996 (which kilowatt-hours are hereby 21 referred to as "base year sales") by customer class 22 multiplied by the revenue per kilowatt hour, adjusted to 23 remove charges added to customers bills pursuant to 24 Sections 9-221 and 9-222 of this Act, during the twelve 25 months ending December 31, 1996, adjusted for the 26 reductions required by subsection (b) of Section 16-111 27 and the mitigation factors contained in Section 16-102. 28 This amount shall be stated for: (i) each calendar year 29 preceding the year in which a report is required to be 30 submitted pursuant to subsection (b); and (ii) as a 31 cumulative total of all calendar years beginning with 32 1998 and ending with the calendar year preceding the year 33 in which a report is required to be submitted pursuant to 34 subsection (b). -93- SRS90HB0362JJsaam02 1 (6) Calculations identical to those required by 2 subparagraph (5) except that base year sales shall be 3 adjusted for growth in the electric utility's service 4 territory, in addition to the other adjustments specified 5 by the first sentence of sub-paragraph (5). 6 (7) the electric utility's total revenue and net 7 income for each calendar year beginning with 1997 through 8 the calendar year preceding the year in which a report is 9 required to be submitted pursuant to subsection (b) as 10 reported in the electric utility's Form 1 report to the 11 Federal Energy Regulatory Commission. 12 (8) any consideration in excess of the net book 13 cost as of the effective date of this amendatory Act of 14 1997 received by the electric utility during the year 15 from a sale made subsequent to the effective date of this 16 amendatory Act of 1997 to a non-affiliated third party of 17 any generating plant that was owned by the electric 18 utility on the effective date of this amendatory Act of 19 1997. 20 (9) any consideration received by the electric 21 utility from sales or transfers during the year to an 22 affiliated interest of generating plant, or other plant 23 that represents an investment of $25,000,000 or more in 24 terms of total depreciated original cost, which 25 generating or other plant were owned by the electric 26 utility prior to the effective date of this amendatory 27 Act of 1997. 28 (10) any consideration received by an affiliated 29 interest of an electric utility from sales or transfers 30 during the year to a non-affiliated third party of 31 generating plant, but only if: (i) the electric utility 32 had previously sold or transferred such plant to the 33 affiliated interest subsequent to the effective date of 34 this amendatory Act of 1997; (ii) the affiliated interest -94- SRS90HB0362JJsaam02 1 sells or transfers such plant to a non-affiliated third 2 party prior to December 31, 2006; and (iii) the 3 affiliated interest receives consideration for the sale 4 or transfer of such plant to the non-affiliated third 5 party in an amount greater than the cost or price at 6 which such plant was sold or transferred to the 7 affiliated interest by the electric utility. 8 (b) The information required by subsection (a) shall 9 be filed by each electric utility on or before March 1 of 10 each year 1999 through 2007 or through such additional years 11 as the electric utility is collecting transition charges 12 pursuant to subsection (f) of Section 16-108, for the 13 previous calendar year. The information required by 14 subparagraph (6) of subsection (a) for calendar year 1997 15 shall be submitted by the electric utility on or before March 16 1, 1999. 17 (c) On or before May 15 of each year 1999 through 18 2006 or through such additional years as the electric utility 19 is collecting transition charges pursuant to subsection (f) 20 of Section 16-108, the Commission shall submit a report to 21 the General Assembly which summarizes the information 22 provided by each electric utility under this Section; 23 provided, however, that proprietary or confidential 24 information shall not be publicly disclosed. 25 (220 ILCS 5/Art. XVII heading new) 26 ARTICLE XVII. ELECTRIC COOPERATIVES AND MUNICIPAL 27 SYSTEMS 28 (220 ILCS 5/17-100 new) 29 Sec. 17-100. Exemption from provisions of this 30 amendatory Act of 1997. Electric cooperatives, as defined in 31 Section 3.4 of the Electric Supplier Act, and public 32 utilities that are owned and operated by any political -95- SRS90HB0362JJsaam02 1 subdivision, or municipal corporation of this State, or owned 2 by such an entity and operated by any lessee or any operating 3 agent thereof, hereinafter referred to as municipal systems, 4 shall not be subject to the provisions of this amendatory Act 5 of 1997, except as hereinafter provided in this Article XVII. 6 (220 ILCS 5/17-200 new) 7 Sec. 17-200. Election to provide existing or future 8 customers access to alternative retail electric suppliers. 9 (a) An electric cooperative or municipal system each 10 may, by appropriate action and at the sole discretion of the 11 governing body of each, from time to time make one or more 12 elections to cause one or more of the existing or future 13 customers of each respective system to be eligible to take 14 service from an alternative retail electric supplier for a 15 specified period of time. Provided that, and subject to 16 their authority to serve customers pursuant to the Electric 17 Supplier Act with respect to electric cooperatives and 18 pursuant to the Illinois Municipal Code with respect to 19 municipal systems, each shall continue to provide exclusive 20 distribution facilities for any existing and future customers 21 that the electric cooperative or municipal system are now or 22 in the future otherwise entitled to serve and which customers 23 are now or in the future receiving service provided by an 24 alternative retail electric supplier. 25 (b) Notification of election to provide existing or 26 future customers access to alternative retail electric 27 suppliers. The election by an electric cooperative or 28 municipal system authorizing access to alternative retail 29 electric suppliers for existing or future customers shall be 30 made by filing notice thereof with the Commission and shall 31 be made effective only by such filing. 32 (220 ILCS 5/17-300 new) -96- SRS90HB0362JJsaam02 1 Sec. 17-300. Election to be an alternative retail 2 electric supplier. 3 (a) An electric cooperative or municipal system may, by 4 appropriate action, and at the sole discretion of the 5 governing body of each, make an election to become an 6 alternative retail electric supplier. 7 (b) Commission authority over an electric cooperative or 8 municipal system electing to be an alternative retail 9 electric supplier. An electric cooperative or municipal 10 system electing to be an alternative retail electric supplier 11 shall provide those services in accordance with Sections 12 16-115A and 16-115B of this Act, to the extent that these 13 Sections have application to the services being offered by 14 the electric cooperative or municipal system as an 15 alternative retail electric supplier. In no case shall these 16 provisions apply to the existing or future customers taking 17 delivery services from an electric cooperative or municipal 18 system pursuant to their respective authority under the 19 Electric Supplier Act or the Illinois Municipal Code. 20 (c) Notification of election to be an alternative retail 21 electric supplier. Upon filing notice of intent by an 22 electric cooperative or a municipal system to become an 23 alternative retail electric supplier, the Commission shall 24 issue within 45 days a certificate of service authority for 25 the entire State or for a specified geographic area of the 26 State, as specified in the notice. Issuance of a certificate 27 of service authority shall constitute compliance with Section 28 16-115 of this Act. 29 (d) Delivery services provided by electric cooperatives 30 or municipal systems. Municipal systems or electric 31 cooperatives making an election under this Section shall be 32 required to provide delivery services on their respective 33 systems to the electric utility or utilities in whose service 34 area or areas the proposed service will be offered. Such -97- SRS90HB0362JJsaam02 1 required delivery services to be provided by the electric 2 cooperatives and municipal systems shall be reasonably 3 comparable to the delivery services provided to the electric 4 cooperative's and municipal system's own customers. 5 (e) Exclusive authority over distribution facilities. 6 Provided that, and subject to their authority to serve 7 customers pursuant to the Electric Supplier Act with respect 8 to electric cooperatives and pursuant to the Illinois 9 Municipal Code with respect to municipal systems, each shall 10 continue to provide the exclusive distribution facilities for 11 any existing and future customers that the electric 12 cooperative or municipal system is now or in the future 13 otherwise entitled to serve, and which customers are now or 14 in the future receiving service provided by an alternative 15 retail electric supplier. 16 (220 ILCS 5/17-400 new) 17 Sec. 17-400. Conditions prohibiting municipal system 18 participation. At no time shall a municipal system make an 19 election under Sections 17-200 or 17-300 of this Article if 20 such election places at risk: 21 (1) Any status held by the municipal system or municipal 22 corporation or political subdivision which provides exemption 23 from State or federal tax statutes; or 24 (2) Any debt, credit instrument or other contractual 25 financial obligation held by, or on behalf of the municipal 26 system which was entered into under an exemption from State 27 or federal tax statutes. 28 (220 ILCS 5/17-500 new) 29 Sec. 17-500. Jurisdiction. Except as provided in the 30 Electric Supplier Act, the Illinois Municipal Code, and this 31 Article XVII, the Commission, or any other agency or 32 subdivision thereof of the State of Illinois or any private -98- SRS90HB0362JJsaam02 1 entity shall have no jurisdiction over any electric 2 cooperative or municipal system regardless of whether any 3 election or elections as provided for herein have been made, 4 and all control regarding an electric cooperative or 5 municipal system shall be vested in the electric 6 cooperative's board of directors or trustees or the 7 applicable governing body of the municipal system. 8 (220 ILCS 5/17-600 new) 9 Sec. 17-600. Rights of electric cooperatives and 10 municipal systems in conflict herewith. Except as expressly 11 provided for herein, this Article XVII shall not be construed 12 to conflict with the rights of an electric cooperative or a 13 municipal system as declared in the Electric Supplier Act or 14 as set forth in the Illinois Municipal Code or the public 15 policy against duplication of facilities as set forth 16 therein. 17 (220 ILCS 5/17-700 new) 18 Sec. 17-700. Right to create municipal utility 19 unaffected. Nothing in this amendatory Act of 1997 shall 20 limit the right of a municipality to form a municipal utility 21 in accordance with Article 11, Division 117 of the Illinois 22 Municipal Code and the provisions of this Article XVII shall 23 apply to any municipal utility formed after the effective 24 date of this amendatory Act of 1997. 25 (220 ILCS 5/Art. XVIII heading new) 26 ARTICLE XVIII. ELECTRIC UTILITY TRANSITIONAL FUNDING LAW 27 (220 ILCS 5/18-101 new) 28 Sec. 18-101. Short title and applicability. This Article 29 may be cited as the Electric Utility Transitional Funding Law 30 of 1997 and shall apply to electric utilities as defined in -99- SRS90HB0362JJsaam02 1 this Article. 2 (220 ILCS 5/18-102 new) 3 Sec. 18-102. Definitions. For the purposes of this 4 Article the following terms shall be defined as set forth in 5 this Section. Terms defined in Article XVI shall have the 6 same meanings in this Article. 7 "Assignee" means any party, other than an electric 8 utility or grantee, to which an interest in intangible 9 transition property shall have been assigned, sold or 10 transferred. The term "assignee" includes any corporation, 11 public authority, trust, financing vehicle, partnership, 12 limited liability company or other entity. 13 "Grantee" means any party, other than an electric utility 14 or an assignee which acquires its interest from an electric 15 utility, to whom or for whose benefit the Commission shall 16 create, establish and grant rights in, to and under 17 intangible transition property. The term "grantee" includes 18 any corporation, public authority, trust, financing vehicle, 19 partnership, limited liability company or other entity. 20 "Grantee instruments" means (a) any instruments, 21 documents, notes, debentures, bonds or other evidences of 22 indebtedness evidencing any contractual right to receive the 23 payment of money from a grantee or (b) any certificates of 24 participation, certificates of beneficial interest or other 25 instruments evidencing a beneficial or ownership interest in 26 a grantee or in intangible transition property of such 27 grantee which are (i) issued (A) by or on behalf of a grantee 28 pursuant to a transitional funding order and (B) pursuant to 29 an executed indenture, pooling agreement, security agreement 30 or other similar agreement of such grantee creating a 31 security interest, ownership interest or other beneficial 32 interest in intangible transition property and (ii) payable 33 solely from proceeds of intangible transition property, -100- SRS90HB0362JJsaam02 1 including amounts received with respect to the related 2 instrument funding charges. 3 "Holder" means any holder of transitional funding 4 instruments, including a trustee, collateral agent, nominee 5 or other such party acting for the benefit of such a holder. 6 "Instrument funding charge" means a non-bypassable charge 7 expressed in cents per kilowatt-hour authorized in a 8 transitional funding order to be applied and invoiced to each 9 retail customer, class of retail customers of an electric 10 utility or other person or group of persons obligated to pay 11 any base rates, transition charges or other rates for 12 tariffed services from which such instrument funding charge 13 has been deducted and stated separately pursuant to 14 subsection (j) of Section 18-104. 15 "Intangible transition property" means the right, title, 16 and interest of an electric utility or grantee or assignee 17 arising pursuant to a transitional funding order to impose 18 and receive instrument funding charges, and all related 19 revenues, collections, claims, payments, money, or proceeds 20 thereof, including all right, title, and interest of an 21 electric utility, grantee or assignee in, to, under and 22 pursuant to such transitional funding order, whether or not 23 such intangible transition property described above is 24 characterized on the books of the electric utility as a 25 regulatory asset or as a cost incurred by the electric 26 utility or otherwise. Intangible transition property shall 27 arise and exist only when, as, and to the extent that 28 instrument funding charges are authorized in a transitional 29 funding order that has become effective in accordance with 30 this Article and shall thereafter continuously exist to the 31 extent provided in the order. 32 "Issuer" means any party, other than an electric utility, 33 which has issued transitional funding instruments. The term 34 "issuer" includes any corporation, public authority, trust, -101- SRS90HB0362JJsaam02 1 financing vehicle, partnership, limited liability company or 2 other entity. 3 "Transitional funding instruments" means any instruments, 4 pass-through certificates, notes, debentures, certificates of 5 participation, bonds, certificates of beneficial interest or 6 other evidences of indebtedness or instruments evidencing a 7 beneficial interest (i) which are issued by or on behalf of 8 an electric utility or issuer pursuant to a transitional 9 funding order, (ii) which are issued pursuant to an executed 10 indenture, pooling agreement, security agreement or other 11 similar agreement of an electric utility or issuer creating a 12 security interest, ownership interest or other beneficial 13 interest in intangible transition property or grantee 14 instruments, if any, and (iii) the proceeds of which are to 15 be used for the purposes set forth in subparagraph (1) of 16 subsection (d) of Section 18-103 of this Article. 17 "Transitional funding order" means an order of the 18 Commission issued in accordance with the provisions of this 19 Article creating and establishing intangible transition 20 property and the rights of any party therein and approving 21 the sale, pledge, assignment or other transfer of intangible 22 transition property and grantee instruments, if any, the 23 issuance of transitional funding instruments and grantee 24 instruments, if any, and the imposition and collection of 25 instrument funding charges. 26 (220 ILCS 5/18-103 new) 27 Sec. 18-103. Transitional funding orders. 28 (a) Notwithstanding any other provision of this Act or 29 other law, the Commission is hereby authorized to issue 30 transitional funding orders in accordance with the 31 provisions of this Section, in order to facilitate (i) the 32 issuance of transitional funding instruments by or on behalf 33 of electric utilities or issuers and (ii) the issuance of -102- SRS90HB0362JJsaam02 1 grantee instruments by or on behalf of grantees. 2 (b) A transitional funding order may be issued by the 3 Commission only upon the application of an electric utility 4 and shall become effective in accordance with its terms only 5 after such electric utility files with the Commission its 6 written consent to all terms and conditions of such order. 7 After the issuance of a transitional funding order, the 8 electric utility or grantee shall retain sole discretion 9 regarding whether to assign, sell, pledge or otherwise 10 transfer intangible transition property and grantee 11 instruments, if any, or to cause transitional funding 12 instruments and grantee instruments, if any, to be issued, 13 including the right to defer or postpone such assignment, 14 sale, transfer, pledge or issuance or to change the terms 15 thereof as allowed by such order. 16 (c) After the effective date of this amendatory Act of 17 1997, an electric utility may file any number of applications 18 for transitional funding orders. Each application for a 19 transitional funding order shall contain detailed information 20 regarding the electric utility's proposal for (i) the 21 assignment, sale, pledge or other transfer of, or the 22 establishment, creation and granting of rights in and to, 23 intangible transition property and grantee instruments, if 24 any, (ii) the issuance of transitional funding instruments 25 and grantee instruments, if any, (iii) the total dollar 26 amount of intangible transition property to be created and 27 the amount to be sold, pledged, assigned or otherwise 28 transferred or granted hereunder (which amount may be in 29 excess of the principal and interest payable on the 30 transitional funding instruments and grantee instruments, if 31 any, in order to provide for servicing costs and the funding 32 or maintenance of debt service and other reserves, costs and 33 fees as security to the holders of the transitional funding 34 instruments and grantee instruments, if any), (iv) the amount -103- SRS90HB0362JJsaam02 1 of transitional funding instruments and grantee instruments, 2 if any, to be issued, (v) the amount, expressed in cents per 3 kilowatt-hour, of instrument funding charges to be collected 4 from retail customers or other persons, (vi) the time to 5 maturity for the transitional funding instruments and grantee 6 instruments, if any, and (vii) the electric utility's planned 7 use of the proceeds from the issuance of transitional funding 8 instruments including the amounts allocated for the 9 respective uses specified in subparagraph (1) of subsection 10 (d) of Section 18-103 of this Article. 11 (d) The Commission shall, after proper notice, hold a 12 hearing for the sole purpose of determining whether the 13 application and requested transitional funding order are in 14 compliance with this Article and shall complete its review of 15 the application and issue its final transitional funding 16 order by no later than 90 days after the filing of such 17 application by the electric utility; provided, that, in 18 contested cases where the public interest is in issue 19 pursuant to subparagraph (1)(B) of this subsection (d) or 20 pursuant to subsection (m) of Section 18-104, the Commission 21 may complete its review and issue its final transitional 22 funding order by no later than 120 days after the filing of 23 such application. The order shall create and establish the 24 proposed intangible transition property in the amount 25 requested by the applicant and approve the proposed sale, 26 pledge, assignment or other transfer of, or the 27 establishment, creation and granting of rights in and to, 28 intangible transition property and grantee instruments, if 29 any, the proposed issuance of transitional funding 30 instruments and grantee instruments, if any, and the proposed 31 imposition and collection of the corresponding instrument 32 funding charges, if the Commission finds that each of the 33 following conditions are met: 34 (1) the electric utility will use the proceeds of -104- SRS90HB0362JJsaam02 1 the sale and issuance of the transitional funding 2 instruments for one or more of the following purposes: 3 (A) to refinance debt or equity, or both, in a 4 manner which the electric utility reasonably 5 demonstrates will result in an overall reduction in 6 its cost of capital, taking into account the costs 7 of financing; provided, however, that any proceeds 8 transferred to a parent company through a common 9 stock repurchase transaction shall be used to retire 10 publicly traded common stock of the parent company 11 or to pay commercially reasonable transaction costs 12 associated with such retirement; 13 (B) if the Commission finds that the sale or 14 issuance of transitional funding instruments for the 15 following purposes is in the public interest, then 16 the following uses of proceeds: (i) to repay or 17 retire fuel contracts or obligations related to 18 nuclear spent fuel previously incurred by the 19 electric utility in providing electric power or 20 energy services prior to the effective date of this 21 amendatory Act of 1997 or (ii) to pay any 22 expenditures required to be undertaken by such 23 electric utility by the provisions of Section 16-128 24 of this Act including labor severance costs and 25 employee retraining costs; 26 (C) to fund debt service and other reserves, 27 commercially reasonable costs and fees necessary or 28 desirable in connection with the marketing of the 29 transitional funding instruments and grantee 30 instruments, if any; 31 (D) to pay for commercially reasonable costs 32 associated with the issuance and collateralization 33 of transitional funding instruments and grantee 34 instruments, if any; and -105- SRS90HB0362JJsaam02 1 (E) to pay for the commercially reasonable 2 costs associated with the issuance of such 3 transitional funding instruments, including the 4 costs incurred since the effective date of this 5 amendatory Act of 1997, or to be incurred, in 6 connection with transactions to recapitalize, 7 refinance or retire stock and/or debt, any 8 associated taxes, and the costs incurred or to be 9 incurred to obtain, collateralize, issue, service 10 and administer transitional funding instruments and 11 grantee instruments, including interest and other 12 related fees, costs and charges; 13 provided, (i) that the transitional funding order shall 14 require the electric utility to use (1) at least 80% of 15 such proceeds for the purposes specified in subparagraphs 16 (A) and (B) above and (2) no more than 20% of the maximum 17 amount of such proceeds permitted under subparagraph 18 (6)(B) of this subsection for purposes other than those 19 specified in subparagraph (A) above ; (ii) that the 20 electric utility's use of such proceeds for the purposes 21 specified in subparagraph (A) above shall not, as of the 22 date of application of such proceeds, result in the 23 common equity component of its capital structure, 24 exclusive of the portion of its capital structure that 25 consists of obligations representing transitional funding 26 instruments or grantee instruments, being reduced below 27 the lesser of (1) 40% and (2) the common equity 28 percentage as of December 31, 1996 adjusted to reflect 29 any write-off of assets or common equity implemented or 30 required to be implemented as a result of this amendatory 31 Act of 1997; and (iii) in no event shall the electric 32 utility use the proceeds of the sale of grantee 33 instruments or transitional funding instruments to repay 34 or retire obligations incurred by any affiliate of the -106- SRS90HB0362JJsaam02 1 electric utility (other than in connection with any 2 refinancing of grantee instruments or transitional 3 funding instruments issued by such affiliate), without 4 the consent of the Commission; 5 (2) the expected maturity date for the grantee 6 instruments or the transitional funding instruments, and 7 the final date on which the electric utility, grantee or 8 assignee shall be entitled to charge and collect 9 instrument funding charges, shall each be set to occur no 10 later than December 31, 2008, subject to the provisions 11 of subsections (l) and (m) of Section 18-104; 12 (3) the instrument funding charges authorized in 13 such order will be deducted and stated separately from 14 base rates and transition charges, and, where applicable, 15 other rates for tariffed services, all as provided in 16 subsection (j) of Section 18-104 and in a manner 17 conforming to the allocation of the instrument funding 18 charges implemented pursuant to subparagraph (4) of this 19 subsection; 20 (4) the instrument funding charges authorized in 21 such order shall have been allocated among classes of 22 retail customers in accordance with percentage ratios 23 determined by dividing the base rate revenue from each 24 class by the electric utility's total base rate revenue 25 for the 1996 calendar year; 26 (5) the issuance of the transitional funding 27 instruments will not cause the rates for tariffed 28 services to increase over the rates then in existence as 29 adjusted for the rate decreases provided in subsection 30 (b) of Section 16-111; and 31 (6) the aggregate principal amount of grantee 32 instruments or, if such transitional funding order does 33 not provide for the issuance of grantee instruments, 34 transitional funding instruments, to be issued pursuant -107- SRS90HB0362JJsaam02 1 to such order, together with the aggregate amount of such 2 instruments issued under any prior orders requested by 3 such electric utility, shall not exceed: 4 (A) during the twelve-month period commencing 5 August 1, 1998, an amount equal to 25% of 6 the applicable electric utility's total 7 capitalization, including both debt and 8 equity, as of December 31, 1996, multiplied 9 by the ratio of the electric utility's 10 revenues from Illinois electric utility 11 retail customers in the 1996 calendar year 12 to its total electric retail revenues for 13 such 1996 year; and 14 (B) thereafter, an amount equal to 50% of the 15 applicable electric utility's total 16 capitalization, including both debt and 17 equity, as of December 31, 1996 multiplied 18 by the ratio of the electric utility's 19 revenues from Illinois electric utility 20 retail customers in the 1996 calendar year 21 to its total electric retail revenues for 22 such 1996 year. 23 (220 ILCS 5/18-104 new) 24 Sec. 18-104. Terms and provisions of transitional funding 25 orders. 26 (a) Each transitional funding order shall create and 27 establish intangible transition property in an amount not to 28 exceed the sum of (i) the rate base established by the 29 Commission in the electric utility's last rate case prior to 30 the effective date of this amendatory Act of 1997, plus (ii) 31 any expenditures required to be undertaken by such electric 32 utility by the provisions of Section 16-128 of this Act, 33 including labor severance costs and employee retraining -108- SRS90HB0362JJsaam02 1 costs, plus (iii) amounts necessary to fund debt service and 2 other reserves, commercially reasonable costs and fees 3 necessary in connection with the marketing of the 4 transitional funding instruments and grantee instruments, if 5 any, plus (iv) commercially reasonable costs incurred from 6 and after the effective date of this amendatory Act of 1997 7 or to be incurred which are associated with the issuance and 8 collateralization of transitional funding instruments and 9 grantee instruments, if any, plus (v) commercially reasonable 10 costs incurred from and after the effective date of this 11 amendatory Act of 1997 or to be incurred which are associated 12 with issuance of such transitional funding instruments, 13 including the costs incurred from and after the effective 14 date of this amendatory Act of 1997, or to be incurred, in 15 connection with transactions to recapitalize, refinance or 16 retire stock and/or debt, any associated taxes and the costs 17 incurred to obtain, collateralize, issue, service and/or 18 administer transitional funding instruments and grantee 19 instruments, if any, including interest and other related 20 fees, costs and charges (all of the foregoing costs described 21 in clauses (i) through (v) above to include any taxes, where 22 applicable, to the extent the costs thereof would otherwise 23 have been recoverable by an electric utility through rates 24 for tariffed services under the Public Utilities Act as in 25 effect prior to this amendatory Act of 1997), minus (vi) the 26 amount of any intangible transition property previously 27 created and established at the request of and for the benefit 28 of such electric utility in a prior transitional funding 29 order. The transitional funding order shall authorize (A) 30 the sale, pledge, assignment or other transfer of, or the 31 establishment, creation and granting of an electric 32 utility's, assignee's or grantee's rights in and to, a 33 specific dollar amount of intangible transition property 34 (which amount may be in excess of the principal and interest -109- SRS90HB0362JJsaam02 1 payable on the transitional funding instruments and grantee 2 instruments, if any, in order to provide for servicing costs 3 and the funding or maintenance of debt service and other 4 reserves as security to the holders of the transitional 5 funding instruments), (B) the issuance of a specific dollar 6 amount of grantee instruments or, if the transitional funding 7 order does not provide for the issuance of grantee 8 instruments, a specific dollar amount of transitional funding 9 instruments, by or on behalf of an electric utility, 10 assignee, issuer or grantee, as the case may be, and (C) the 11 imposition and collection of a specific amount of instrument 12 funding charges projected to be sufficient to pay when due 13 the principal of and interest on the corresponding grantee 14 instruments or, if the transitional funding order does not 15 provide for the issuance of grantee instruments, the 16 corresponding transitional funding instruments, in each case, 17 together with premium, servicing fees and other fees, costs 18 and charges related thereto, and to maintain any required 19 reserves. Except as otherwise specifically set forth in the 20 transitional funding order, the transitional funding 21 instruments issued pursuant to such order shall be 22 non-recourse to the credit or to any assets of the electric 23 utility other than any assets comprising intangible 24 transition property or grantee instruments, as applicable. 25 The obligation of retail customers and other persons to pay 26 instrument funding charges shall be contingent upon the 27 receipt by such retail customers and other persons of 28 electric power and energy, the kilowatt hours of which are 29 included in the calculation of the dollar amount of such 30 instrument funding charges, but the transitional funding 31 order shall specifically provide that such instrument funding 32 charges will not be subject to any defense, counterclaim or 33 right of set off arising as a result of failure by the 34 pertinent electric utility, upon whose application the -110- SRS90HB0362JJsaam02 1 intangible transition property was created, to perform or 2 provide past, present or future services. For purposes of 3 the foregoing sentence, an electric utility or alternative 4 retail electric supplier obligated to pay transition charges 5 under subsection (b) of Section 16-118 on behalf of certain 6 retail customers shall be deemed to have received the 7 electric power and energy provided to such retail customers. 8 The transitional funding order shall also set forth the time 9 to maturity for the grantee instruments or, if the 10 transitional funding order does not provide for the issuance 11 of grantee instruments, the time to maturity for the 12 transitional funding instruments issued thereunder. 13 Concurrently with the sale, pledge, assignment or other 14 transfer of, or the establishment, creation and granting of 15 an electric utility's, assignee's or grantee's rights in and 16 to, intangible transition property and grantee instruments, 17 if any, and the issuance of transitional funding instruments, 18 an electric utility, grantee, issuer or an assignee shall 19 begin to impose and collect the specified instrument funding 20 charges from retail customers, classes of retail customers, 21 and any other persons or groups of persons as set forth in 22 the pertinent transitional funding order and shall file 23 tariffs in accordance with subsection (j) of Section 18-104 24 of this Article. 25 (b) The transitional funding order shall require that 26 the proceeds from the issuance of transitional funding 27 instruments shall be used for the purposes set forth in 28 subparagraph (1) of subsection (d) of Section 18-103 of this 29 Article. 30 (c) Notwithstanding any other provision of law, neither 31 the transitional funding order nor the intangible transition 32 property created and established thereby nor the instrument 33 funding charges authorized to be imposed and collected 34 thereunder shall be subject to reduction, postponement, -111- SRS90HB0362JJsaam02 1 impairment or termination by any subsequent action of the 2 Commission; provided, however, that nothing in this paragraph 3 is intended to supersede any right of any party to the 4 Commission's proceeding relating to the transitional funding 5 order to seek judicial review of such transitional funding 6 order. 7 (d) The Commission shall provide in any transitional 8 funding order for a procedure for periodic adjustments to the 9 instrument funding charges set forth therein in order to 10 ensure the repayment in accordance with the projections set 11 forth in the transitional funding order of all grantee 12 instruments or, if such transitional funding order does not 13 provide for the issuance of grantee instruments, the 14 corresponding transitional funding instruments authorized 15 therein and to reconcile the revenues received from 16 instrument funding charges during the applicable adjustment 17 period with the revenues projected to be received from such 18 charges as set forth in the relevant transitional funding 19 order. Unless the transitional funding order otherwise 20 provides, such adjustments shall be required whenever the 21 instrument funding charges actually collected during the 22 applicable adjustment period by the appropriate party or 23 parties were greater or less than the instrument funding 24 charges projected in the relevant transitional funding order 25 to be collected in such adjustment period; provided that, if 26 so requested by an electric utility in any application for a 27 transitional funding order, the transitional funding order 28 may (i) specify a dollar or percentage amount of variation 29 from the projected revenues within which no such adjustments 30 will be required and/or (ii) set forth a maximum adjustment 31 amount for the instrument funding charges. The electric 32 utility (or such other party as may be specified in the 33 pertinent transitional funding order) shall determine, within 34 90 days of the end of each adjustment period (or such shorter -112- SRS90HB0362JJsaam02 1 period as may be provided in the documents relating to the 2 pertinent transitional funding instruments or grantee 3 instruments, as applicable), whether any adjustments 4 described above in this subsection (d) of Section 18-104 are 5 required. If any such adjustments are so required, such 6 adjustments shall be implemented by the electric utility, 7 grantee, issuer or assignee, as applicable, with written 8 notice to the Commission, within such 90-day period (or such 9 shorter period as may be provided for in the documents 10 relating to the pertinent transitional funding instruments or 11 grantee instruments, as applicable). Any such adjustment 12 shall be calculated to include amounts necessary for recovery 13 of any additional costs incurred by the grantee, electric 14 utility, assignee or issuer as a result of the relevant delay 15 in collections of instrument funding charges. If, as a 16 result of any adjustment, the amount of any instrument 17 funding charge, as so adjusted, will exceed an amount per 18 kilowatt-hour greater than the amount per kilowatt-hour of 19 the instrument funding charge initially authorized by the 20 Commission in its transitional funding order, then the 21 relevant electric utility shall be obligated to file 22 amendatory tariffs in compliance with subsection (k) of 23 Section 18-104. 24 (e) Except where this Article specifically requires 25 otherwise, the collection of instrument funding charges and 26 the allocation of any such collections as among holders, 27 assignees, issuers, grantees and any other parties entitled 28 to receive portions thereof, may be accomplished according to 29 the provisions set forth in the applicable transitional 30 funding order, or, if the order is silent on any such 31 matters, according to the provisions set forth in the 32 documents relating to the pertinent transitional funding 33 instruments or grantee instruments, as applicable. 34 Notwithstanding the foregoing, the electric utility, grantee, -113- SRS90HB0362JJsaam02 1 issuer or assignee, as applicable, shall determine no later 2 than 90 days after the stated maturity date of each series of 3 grantee instruments or, if the related transitional funding 4 order does not provide for the issuance of grantee 5 instruments, the stated maturity date of transitional funding 6 instruments, whether the aggregate amount of instrument 7 funding charges collected prior to such stated maturity date 8 exceeds the amount required to provide for the payment of all 9 principal, interest, premium and servicing and other fees, 10 costs and charges owing under such grantee instruments or 11 transitional funding instruments, as the case may be. If it 12 is determined that the aggregate amount of instrument funding 13 charges collected exceeds the amount required to provide for 14 the payment of all principal, interest, premium and servicing 15 and other fees, costs and charges related to such grantee 16 instruments or transitional funding instruments, as the case 17 may be, such excess, together with any investment earnings 18 thereon, shall be paid to the owner of the pertinent 19 intangible transition property. 20 (f) Notwithstanding any other provision of law, on such 21 conditions as the Commission may approve in the pertinent 22 transitional funding order, the interest of an electric 23 utility, assignee, issuer or grantee in intangible transition 24 property or grantee instruments, as applicable, may be 25 assigned, sold or otherwise transferred, in whole or in part, 26 and may, in whole or in part, be pledged or assigned as 27 security to or for the benefit of a holder or holders. To 28 the extent that any such interest or portion thereof is 29 assigned, sold or otherwise transferred or is established, 30 created and granted to a grantee or is pledged or assigned as 31 security, the Commission, in the pertinent transitional 32 funding order, shall authorize the electric utility or any 33 affiliate thereof to contract with the grantee, issuer, 34 assignee or holders to collect the applicable instrument -114- SRS90HB0362JJsaam02 1 funding charges for the benefit and account of the grantee, 2 issuer, assignee or holder, and such electric utility or 3 affiliate will, except as otherwise specified in the 4 transitional funding order, account for and remit the 5 applicable instrument funding charge, without the obligation 6 to remit any investment earnings thereon, to or for the 7 account of the grantee, issuer, assignee or holder. The 8 obligation of such electric utility or affiliate to collect 9 and remit the applicable instrument funding charges hereunder 10 shall continue irrespective of whether such electric utility 11 is providing electric power and/or other services to the 12 retail customers and other persons obligated to pay such 13 instrument funding charges. If the documents creating the 14 transitional funding instruments or grantee instruments, if 15 any, so provide, such obligations shall, in the event of a 16 default by such electric utility or affiliate in performing 17 such obligations, be undertaken and performed by any other 18 entity selected by the assignee or any holder, group of 19 holders or trustee or agent on behalf of such holder or 20 holders, as the case may be, (i) which provides electric 21 power or services to a person that was a retail customer of 22 such electric utility and (ii) from whom such electric 23 utility is entitled to recover transition charges under 24 Section 16-108; provided, however, that any failure by the 25 designated party to perform such obligations shall not affect 26 the existence of the intangible transition property or the 27 instrument funding charges or the validity or enforceability 28 of the instrument funding charges in accordance with their 29 terms. 30 (g) In its transitional funding order, the Commission 31 shall afford flexibility in establishing the terms and 32 conditions of the transitional funding instruments and the 33 grantee instruments, if any, including repayment schedules, 34 collateral, required debt service and other reserves, -115- SRS90HB0362JJsaam02 1 interest rates and other financing costs and the ability of 2 the electric utility, at its option, to effect a series of 3 issuances of transitional funding instruments and grantee 4 instruments and correlated assignments, sales, pledges or 5 other transfers of intangible transition property and grantee 6 instruments, if any, not to exceed the aggregate dollar 7 amounts approved in the transitional funding order. 8 (h) The electric utility shall file a statement of the 9 final terms of the issuance of any series of transitional 10 funding instruments or grantee instruments, if any, with the 11 Commission within 90 days of the receipt of proceeds from 12 such issuance. In addition, the Commission may require the 13 electric utility to file periodic reports on its use of the 14 proceeds at intervals of not less than one year. 15 (i) Any adjustment to instrument funding charges that is 16 necessary due to subsequent refinancing of transitional 17 funding instruments or grantee instruments, if any, shall be 18 authorized by the Commission in a supplemental order. 19 (j) In connection with the issuance of a transitional 20 funding order and as a precondition to the imposition of any 21 instrument funding charges authorized thereby, the relevant 22 electric utility shall file tariffs directing that the amount 23 of such instrument funding charges be deducted, stated, and 24 collected separately from the amounts otherwise billed by 25 such electric utility for base rates and transition charges 26 and, where applicable, other rates for tariffed services as 27 set forth in the transitional funding order. Upon the 28 effectiveness of such tariff, the amounts of instrument 29 funding charges thereby deducted and to be deducted shall 30 have become intangible transition property as specified in 31 the transitional funding order. The Commission shall have no 32 authority to review such tariffs except to confirm that the 33 instrument funding charges authorized in the transitional 34 funding order have been deducted, stated, and collected -116- SRS90HB0362JJsaam02 1 separately from base rates and transition charges and, where 2 applicable, other rates for tariffed services otherwise in 3 effect at such time, and the filing of any such tariff may 4 not be suspended for any other reason. No such deductions 5 referred to in this subsection shall be construed as a change 6 in or otherwise require a recalculation of the authorized 7 amounts of such base rates, transition charges, and other 8 rates for tariffed services under Section 16-102, 16-107, 9 16-108, or 16-110, as applicable. Instrument funding charges 10 shall be recoverable with respect to electric power and 11 energy or other services for which the deductions provided in 12 this subsection have become effective and no such deduction 13 shall be effective with respect to any services or power in 14 respect of which instrument funding charges have not been so 15 authorized and imposed. 16 (k) If any adjustment under subsection (d) of Section 17 18-104 results in the amount of any instrument funding charge 18 as so adjusted exceeding an amount per kilowatt-hour greater 19 than the amount per kilowatt-hour of the instrument funding 20 charge initially authorized by the Commission in its 21 transitional funding order, the relevant electric utility 22 shall file amendatory tariffs reducing the amounts otherwise 23 billed by such electric utility for base rates and transition 24 charges or, where applicable, other rates for tariffed 25 services, by the amount of such excess. Such amendatory 26 tariff shall be subject to the provisions of subsection (j) 27 of Section 18-104, except that (i) the failure of such 28 amendatory tariff to become effective for any reason shall 29 not delay or impair the effectiveness of the adjustments 30 required under subsection (d) of Section 18-104 and (ii) the 31 obligation of retail customers and other persons or groups of 32 persons to pay instrument funding charges as so adjusted 33 shall not be subject to any defense, counterclaim or right of 34 set off arising as a result of failure by the pertinent -117- SRS90HB0362JJsaam02 1 electric utility to comply with this subsection (k) of 2 Section 18-104. Nothing in this subsection (k) of Section 3 18-104 shall restrict any retail customer or other person 4 from bringing any suit in any court or from exercising any 5 other legal or equitable remedy against an electric utility 6 for any failure by such electric utility to comply with this 7 subsection (k) of Section 18-104. 8 (l) The intangible transition property created under a 9 transitional funding order and the authority of the grantee, 10 assignee, issuer, electric utility or other person authorized 11 thereunder to impose and collect instrument funding charges 12 shall continue beyond the final date set forth in the 13 applicable transitional funding order until such time as all 14 grantee instruments authorized in such order or, if the 15 applicable transitional funding order does not provide for 16 grantee instruments, the related transitional funding 17 instruments authorized in such order, have been paid in full. 18 Upon the later of the final date set forth in the 19 applicable transitional funding order for the imposition and 20 collection of instrument funding charges or the repayment in 21 full of any grantee instruments or transitional funding 22 instruments, as applicable, authorized in such order, the 23 authority to impose and collect the related instrument 24 funding charges shall cease and the relevant electric utility 25 shall be entitled to file tariffs revoking any deductions 26 from base rates, transition charges or other rates for 27 tariffed services which were granted in connection with such 28 instrument funding charges pursuant to subsection (j) of 29 Section 18-104 or subsection (k) of Section 18-104. The 30 Commission shall have no authority to review such tariffs 31 except to determine that the rates and charges resulting from 32 such revocation do not exceed the applicable base rates, 33 transition charges, or other rates for tariffed services 34 which would otherwise have been in effect at the time of such -118- SRS90HB0362JJsaam02 1 revocation had no instrument funding charges ever been 2 deducted therefrom. 3 (m) If so requested by an electric utility in its 4 application for a transitional funding order, the Commission, 5 in the relevant transitional funding order, may authorize (i) 6 the issuance of grantee instruments and/or transitional 7 funding instruments with expected maturity dates later than 8 December 31, 2008 but not later than December 31, 2010 and 9 (ii) the imposition and collection of instrument funding 10 charges by electric utilities, grantees, or assignees later 11 than December 31, 2008 but not later than December 31, 2010 12 if the electric utility includes in its application a pro 13 forma calculation of the impact of the issuance of the 14 transitional funding instruments or grantee instruments and 15 the associated use of proceeds on the revenue requirement 16 established by the Commission in the electric utility's last 17 rate case, with such calculation to be presented for 18 illustrative purposes only, and the Commission, in its review 19 of the relevant application for the transitional funding 20 order, finds that such action is in the public interest and 21 that the instrument funding charges to be applied toward 22 payment of transitional funding instruments after December 23 31, 2008 will be deducted, stated, and collected separately 24 from base rates and, where applicable, other rates for 25 tariffed services otherwise in effect at such time and as 26 scheduled to be in effect through such expected maturity 27 date. 28 (220 ILCS 5/18-105 new) 29 Sec. 18-105. Intangible transition property. 30 (a) Notwithstanding any other provision of this Act or 31 other law, the Commission is hereby authorized, in accordance 32 with the application for a transitional funding order, to 33 create, establish and grant rights in, to and under -119- SRS90HB0362JJsaam02 1 intangible transition property in and to any grantee, 2 electric utility, issuer or assignee, and such party shall be 3 granted the power to levy general tariffs on retail customers 4 of an electric utility or any other person required to pay an 5 instrument funding charge in order to collect the instrument 6 funding charges related to the intangible transition property 7 in which such party has been granted rights and in order to 8 facilitate the issuance of transitional funding instruments 9 and grantee instruments, if any, to, by or on behalf of 10 electric utilities, grantees, issuers or assignees. The 11 Commission shall be authorized to create, establish and grant 12 such rights hereunder in and to such party with or without 13 receiving consideration from such party. 14 (b) The State pledges to and agrees with the holders of 15 any transitional funding instruments who may enter into 16 contracts with an electric utility, grantee, assignee or 17 issuer pursuant to this Article XVIII that the State will not 18 in any way limit, alter, impair or reduce the value of 19 intangible transition property created by, or instrument 20 funding charges approved by, a transitional funding order so 21 as to impair the terms of any contract made by such electric 22 utility, grantee, assignee or issuer with such holders or in 23 any way impair the rights and remedies of such holders until 24 the pertinent grantee instruments or, if the related 25 transitional funding order does not provide for the issuance 26 of grantee instruments, the pertinent transitional funding 27 instruments and interest, premium and other fees, costs and 28 charges related thereto, as the case may be, are fully paid 29 and discharged. Electric utilities, grantees and issuers are 30 authorized to include these pledges and agreements of the 31 State in any contract with the holders of transitional 32 funding instruments or with any assignees pursuant to this 33 Article XVIII and any assignees are similarly authorized to 34 include these pledges and agreements of the State in any -120- SRS90HB0362JJsaam02 1 contract with any issuer, holder or any other assignee. 2 Nothing in this Article XVIII shall preclude the State of 3 Illinois from requiring adjustments as may otherwise be 4 allowed by law to the electric utility's base rates, 5 transition charges, delivery services charges, or other 6 charges for tariffed services, so long as any such adjustment 7 does not directly affect or impair any instrument funding 8 charges previously authorized by a transitional funding order 9 issued by the Commission. 10 (c) Transitional funding instruments and grantee 11 instruments, if any, issued under this Article do not 12 constitute debt or liability of the State or of any political 13 subdivision thereof, and transitional funding orders 14 authorizing such issuance do not constitute a pledge of the 15 full faith and credit of the State or of any of its political 16 subdivisions. The issuance of transitional funding 17 instruments and grantee instruments, if any, under this 18 Article shall not directly, indirectly or contingently 19 obligate the State or any political subdivision thereof to 20 levy or to pledge any form of taxation therefor or to make 21 any appropriation for their payment, and any such 22 transitional funding instruments and grantee instruments, if 23 any, shall be payable solely from the intangible transition 24 property or grantee instruments, as the case may be, or from 25 such other proceeds or property as may be pledged therefor. 26 Nothing in this Section shall be construed to prevent the 27 State or any political subdivision thereof from owning any 28 interest in a grantee, assignee or issuer or to prevent any 29 electric utility, issuer, grantee or assignee from selling, 30 pledging or assigning intangible transition property or 31 grantee instruments, as the case may be, or from providing 32 recourse or guarantees or any other third-party credit 33 enhancement in connection with such sale, pledge or 34 assignment. -121- SRS90HB0362JJsaam02 1 (220 ILCS 5/18-106 new) 2 Sec. 18-106. Grantee instruments. 3 (a) If an electric utility to which grantee instruments 4 have been issued discontinues providing electric power and 5 energy services prior to the maturity date of such grantee 6 instruments, such electric utility shall not be entitled to 7 receive any payment on such grantee instruments on and after 8 the date of such discontinuance. 9 (b) Notwithstanding the provisions of subsection (a) of 10 this Section, any assignee holding such grantee instruments 11 or any holder of transitional funding instruments which are 12 secured by such grantee instruments shall nevertheless be 13 entitled to recover amounts payable by such grantee under 14 such grantee instruments in accordance with their terms as if 15 such electric utility had not discontinued the provision of 16 electric power and energy. 17 (c) Notwithstanding any other provision of law, the 18 issuance of any grantee instruments in accordance with the 19 terms and provisions of a transitional funding order shall 20 for all purposes be exempt from the application of Article 39 21 of the Criminal Code of 1961 and the Interest Act. 22 (220 ILCS 5/18-107 new) 23 Sec. 18-107. Security interests in intangible transition 24 property and grantee instruments. 25 (a) Notwithstanding any other provision of law, neither 26 intangible transition property, grantee instruments nor any 27 right, title or interest therein, shall constitute property 28 in which a security interest may be created under the Uniform 29 Commercial Code nor shall any such rights be deemed proceeds 30 of any property which is not intangible transition property 31 or grantee instruments, as the case may be. For purposes of 32 the foregoing, the terms "account" and "general intangible" 33 (as defined under Section 9-106 of the Uniform Commercial -122- SRS90HB0362JJsaam02 1 Code) and the term "instrument" (as defined under Section 2 9-105 of the Uniform Commercial Code) shall, as used in the 3 Uniform Commercial Code, be deemed to exclude any such 4 intangible transition property, grantee instruments or any 5 right, title, or interest therein. 6 (b) The granting, perfection and enforcement of security 7 interests in intangible transition property or grantee 8 instruments are governed by this Section rather than by 9 Article 9 of the Uniform Commercial Code. 10 (c) A valid and enforceable security interest in 11 intangible transition property and in grantee instruments 12 shall attach and be perfected only by the means set forth 13 below in this subsection (c) of Section 18-107: 14 (1) To the extent transitional funding instruments 15 or grantee instruments are purported to be secured by 16 intangible transition property or to the extent 17 transitional funding instruments are purported to be 18 secured by grantee instruments, as the case may be, as 19 specified in the applicable transitional funding order, 20 the lien of the transitional funding instruments and 21 grantee instruments, if any, shall attach automatically 22 to such intangible transition property and grantee 23 instruments, if any, from the time of issuance of the 24 transitional funding instruments and grantee instruments, 25 if any. Such lien shall be a valid and enforceable 26 security interest in the intangible transition property 27 or the grantee instruments, as the case may be, securing 28 the transitional funding instruments and grantee 29 instruments, if any, and shall be continuously perfected 30 if, before the date of issuance of the applicable 31 transitional funding instruments or grantee instruments, 32 if any, or within no more than 10 days thereafter, a 33 filing has been made by or on behalf of the holder with 34 the Chief Clerk of the Commission stating that such -123- SRS90HB0362JJsaam02 1 transitional funding instruments or grantee instruments, 2 if any, have been issued. Any such filing made with the 3 Commission in respect to such transitional funding 4 instruments or grantee instruments shall take precedence 5 over any subsequent filing except as may otherwise be 6 provided in the applicable transitional funding order. 7 (2) The liens under subparagraph (1) are 8 enforceable against the electric utility, any assignee, 9 grantee or issuer, and all third parties, including 10 judicial lien creditors, subject only to the rights of 11 any third parties holding security interests in the 12 intangible transition property or grantee instruments 13 previously perfected in the manner described in this 14 subsection if value has been given by the purchasers of 15 transitional funding instruments or grantee instruments. 16 A perfected lien in intangible transition property and 17 grantee instruments, if any, is a continuously perfected 18 security interest in all then existing or thereafter 19 arising revenues and proceeds arising with respect to the 20 associated intangible transition property or grantee 21 instruments, as the case may be, whether or not the 22 electric power and energy included in the calculation of 23 such revenues and proceeds have been provided. The lien 24 created under this subsection is perfected and ranks 25 prior to any other lien, including any judicial lien, 26 which subsequently attaches to the intangible transition 27 property or grantee instruments, as the case may be, and 28 to any other rights created by the transitional funding 29 order or any revenues or proceeds of the foregoing. The 30 relative priority of a lien created under this subsection 31 is not defeated or adversely affected by changes to the 32 transitional funding order or to the instrument funding 33 charges payable by any retail customer, class of retail 34 customers or other person or group of persons obligated -124- SRS90HB0362JJsaam02 1 to pay such charges. 2 (3) The relative priority of a lien created under 3 this subsection is not defeated or adversely affected by 4 the commingling of revenues arising with respect to 5 intangible transition property or grantee instruments 6 with funds of the electric utility or other funds of the 7 assignee, issuer or grantee. 8 (4) If an event of default occurs under 9 transitional funding instruments or grantee instruments, 10 the holders thereof or their authorized representatives, 11 as secured parties, may foreclose or otherwise enforce 12 the lien in the grantee instruments or in the intangible 13 transition property securing the transitional funding 14 instruments or grantee instruments, as applicable, 15 subject to the rights of any third parties holding prior 16 security interests in the intangible transition property 17 or grantee instruments previously perfected in the manner 18 provided in this subsection. Upon application by the 19 holders or their authorized representatives, without 20 limiting their other remedies, the Commission shall order 21 the sequestration and payment to the holders or their 22 authorized representatives of revenues arising with 23 respect to the intangible transition property or grantee 24 instruments pledged to the holders. An order under this 25 subsection shall remain in full force and effect 26 notwithstanding any bankruptcy, reorganization, or other 27 insolvency proceedings with respect to the electric 28 utility, grantee, assignee or issuer. 29 (5) The Commission shall maintain segregated 30 records which reflect the date and time of receipt of all 31 filings made under this subsection. The Commission may 32 provide that transfers of intangible transition property 33 or of grantee instruments be filed in accordance with the 34 same system. -125- SRS90HB0362JJsaam02 1 (220 ILCS 5/18-108 new) 2 Sec. 18-108. Characterization of transfer. A sale, 3 assignment or other transfer of intangible transition 4 property or grantee instruments which is expressly stated in 5 the documents governing such transaction to be a sale or 6 other absolute transfer, in a transaction approved in a 7 transitional funding order, shall be treated as an absolute 8 transfer of all of the transferor's right, title and interest 9 in, to and under such intangible transition property or 10 grantee instruments which places such transferred property 11 beyond the reach of the transferor or its creditors, as in a 12 true sale, and not as a pledge or other financing, of such 13 intangible transition property or grantee instruments, as the 14 case may be; provided, however, that whether or not such 15 transfer is deemed to be a sale for federal tax purposes 16 shall be governed by applicable law without regard to this 17 Section 18-108. The characterization of any such transfer as 18 an absolute transfer and the corresponding characterization 19 of the transferee's property interest shall not be defeated 20 or adversely affected by, among other things: (i) the 21 commingling of revenues arising with respect to intangible 22 transition property or grantee instruments, as the case may 23 be, with funds of the electric utility or other funds of the 24 assignee, issuer or grantee; (ii) granting to holders of 25 transitional funding instruments a preferred right to the 26 intangible transition property, whether direct or indirect; 27 (iii) the provision by the electric utility, grantee, 28 assignee, or issuer of any recourse, collateral or credit 29 enhancement with respect to transitional funding instruments 30 or grantee instruments, as the case may be; (iv) the 31 retention by the assigning party of a partial interest in any 32 intangible transition property, whether direct or indirect, 33 or whether subordinate or otherwise; or (v) the electric 34 utility's responsibilities for collecting instrument funding -126- SRS90HB0362JJsaam02 1 charges and any retention of bare legal title for the purpose 2 of such collection activities; provided, however, that 3 nothing in this Section 18-108 is intended to preclude 4 consideration of such provisions in determining whether or 5 not such transfer is deemed to be a sale for federal tax 6 purposes under other applicable law. A sale, assignment, or 7 other transfer of intangible transition property or grantee 8 instruments, as the case may be, shall be deemed perfected as 9 against third persons, including any judicial lien creditors, 10 when all of the following have taken place: 11 (1) The Commission has issued the transitional 12 funding order creating the intangible transition 13 property; and 14 (2) A sale, assignment or transfer of the 15 intangible transition property or grantee instruments, as 16 the case may be, has been executed and delivered in 17 writing by the electric utility. 18 (220 ILCS 5/18-109 new) 19 Sec. 18-109. Actions with respect to intangible 20 transition property and related instrument funding charges. 21 (a) Notwithstanding any other provision of this Act or 22 other law, any electric utility, issuer, assignee, grantee or 23 holder shall be expressly permitted hereby to bring action 24 against a retail customer or other person for nonpayment of 25 any instrument funding charges constituting a part of the 26 intangible transition property then held by such electric 27 utility, issuer, assignee, grantee or holder. Notwithstanding 28 any other provision of this Act, any such action shall be 29 subject to any and all applicable consumer credit protection 30 laws and other laws relating to origination, collection and 31 reporting of consumer credit obligations. 32 (b) Notwithstanding any other provision of this Act or 33 other law, the Commission shall have exclusive jurisdiction -127- SRS90HB0362JJsaam02 1 over any dispute arising out of the obligations to impose and 2 collect instrument funding charges of an electric utility, 3 its successor or any other entity which provides electric 4 power or energy or delivery services to a person from whom 5 the electric utility is authorized to recover transition 6 charges under Section 16-108. Nothing in this Section shall 7 prevent holders from bringing any suit in any court or from 8 exercising any other legal or equitable remedy against an 9 electric utility for failure to distribute collections of 10 instrument funding charges from retail customers, classes of 11 retail customers or other persons or from bringing suit 12 against an electric utility for damages arising from any 13 failure by such electric utility to perform the contractual 14 obligations agreed to by it under any documents pertaining to 15 or executed in connection with the transitional funding 16 instruments issued by or on behalf of such electric utility. 17 (220 ILCS 5/18-110 new) 18 Sec. 18-110. Taxation of transfers of intangible 19 transition property and grantee instruments. 20 (a) Any sale, pledge, assignment or other transfer of 21 intangible transition property and grantee instruments, if 22 any, shall be exempt from any State or local sales, income, 23 transfers, gains, receipts or similar taxes. 24 (b) Any transfer of intangible transition property and 25 grantee instruments, if any, shall be treated as a pledge or 26 other financing for State tax purposes, including State and 27 local income and franchise taxes, unless the documents 28 governing such transfer specifically state that the transfer 29 is intended to be treated otherwise. 30 (225 ILCS 5/18-111 new) 31 Sec. 18-111. Limitations on issuance of transitional 32 funding orders, collection of instrument funding charges, and -128- SRS90HB0362JJsaam02 1 use of proceeds from issuance of transitional funding 2 instruments and grantee instruments. 3 Notwithstanding any other provisions of this Article 4 XVIII: 5 (1) The Commission shall be prohibited from issuing any 6 transitional funding order prior to January 1, 1998, and no 7 electric utility shall issue any transitional funding 8 instrument or grantee instrument, prior to August 1, 1998, or 9 after December 31, 2004. 10 (2) The Commission shall be authorized to include in any 11 transitional funding order an expiration date after which 12 date the electric utility shall no longer be authorized to 13 issue transitional funding instruments or grantee instruments 14 pursuant to such order, provided, that any such expiration 15 date specified in a transitional funding order shall be no 16 earlier than 24 months following the date of issuance of the 17 relevant transitional funding order. 18 (3) No electric utility shall be allowed to increase its 19 rates for tariffed services, including delivery charges, or 20 its transition charges, above the level or levels which would 21 have been allowed in accordance with this Act if the electric 22 utility were not authorized to impose and collect instrument 23 funding charges. 24 (4) Any transitional funding order issued by the 25 Commission shall set forth, based on the information set 26 forth in the electric utility's application, the procedures 27 to be followed by the electric utility for assuring that 28 proceeds from the issuance of the transitional funding 29 instruments or grantee instruments authorized by such order 30 are applied in accordance with the terms of the order. Any 31 use by an electric utility of the proceeds from issuance of 32 transitional funding instruments or grantee instruments other 33 than in accordance with the purposes specified in the 34 relevant transitional funding order of the Commission, -129- SRS90HB0362JJsaam02 1 pursuant to subsection (d) of Section 18-103, shall be void. 2 Section 10. The Public Utilities Act is amended by 3 changing Sections 3-105, 5-104, 6-102, 7-101, 7-102, 7-204, 4 7-206, 8-406, 8-503, 8-510, 9-201.5, 9-220, 9-244, and 10-113 5 and adding Section 4-404 as follows: 6 (220 ILCS 5/3-105) (from Ch. 111 2/3, par. 3-105) 7 Sec. 3-105. Public utility. "Public utility" means and 8 includes, except where otherwise expressly provided in this 9 Section, every corporation, company, limited liability 10 company, association, joint stock company or association, 11 firm, partnership or individual, their lessees, trustees, or 12 receivers appointed by any court whatsoever that owns, 13 controls, operates or manages, within this State, directly or 14 indirectly, for public use, any plant, equipment or property 15 used or to be used for or in connection with, or owns or 16 controls any franchise, license, permit or right to engage 17 in: 18 a. the production, storage, transmission, sale, 19 delivery or furnishing of heat, cold, power, electricity, 20 water, or light, except when used solely for 21 communications purposes; 22 b. the disposal of sewerage; or 23 c. the conveyance of oil or gas by pipe line. 24 "Public utility" does not include, however: 25 1. public utilities that are owned and operated by 26 any political subdivision, public institution of higher 27 education or municipal corporation of this State, or 28 public utilities that are owned by such political 29 subdivision, public institution of higher education, or 30 municipal corporation and operated by any of its lessees 31 or operating agents; 32 2. water companies which are purely mutual -130- SRS90HB0362JJsaam02 1 concerns, having no rates or charges for services, but 2 paying the operating expenses by assessment upon the 3 members of such a company and no other person; 4 3. electric cooperatives as defined in Section 5 3-119; 6 4. residential natural gas cooperatives that are 7 not-for-profit corporations established for the purpose 8 of administering and operating, on a cooperative basis, 9 the furnishing of natural gas to residences for the 10 benefit of their members who are residential consumers of 11 natural gas. For entities qualifying as residential 12 natural gas cooperatives and recognized by the Illinois 13 Commerce Commission as such, the State shall guarantee 14 legally binding contracts entered into by residential 15 natural gas cooperatives for the express purpose of 16 acquiring natural gas supplies for their members. The 17 Illinois Commerce Commission shall establish rules and 18 regulations providing for such guarantees. The total 19 liability of the State in providing all such guarantees 20 shall not at any time exceed $1,000,000, nor shall the 21 State provide such a guarantee to a residential natural 22 gas cooperative for more than 3 consecutive years; 23 5. sewage disposal companies which provide sewage 24 disposal services on a mutual basis without establishing 25 rates or charges for services, but paying the operating 26 expenses by assessment upon the members of the company 27 and no others; 28 6. (Blank); 29 7. cogeneration facilities, small power production 30 facilities, and other qualifying facilities, as defined 31 in the Public Utility Regulatory Policies Act and 32 regulations promulgated thereunder, except to the extent 33 State regulatory jurisdiction and action is required or 34 authorized by federal law, regulations, regulatory -131- SRS90HB0362JJsaam02 1 decisions or the decisions of federal or State courts of 2 competent jurisdiction;and3 8. the ownership or operation of a facility that 4 sells compressed natural gas at retail to the public for 5 use only as a motor vehicle fuel and the selling of 6 compressed natural gas at retail to the public for use 7 only as a motor vehicle fuel; and.8 9. alternative retail electric suppliers as defined 9 in Article XVI. 10For the purpose of the least-cost planning obligations of11Section 8-401 and for all of Section 8-402, the Illinois12Commerce Commission may, for good cause shown in individual13cases, exclude from the meaning of "public utility" the14electric operations of any public utility, as otherwise15defined in this Act, which serves less than 20,000 electric16customers within the State of Illinois, or the gas operations17of any public utility, as otherwise defined in this Act,18which serves less than 20,000 gas customers within the State19of Illinois.20 (Source: P.A. 88-480; 89-42, eff. 1-1-96.) 21 (220 ILCS 5/4-404 new) 22 Sec. 4-404. Protection of confidential and proprietary 23 information. The Commission shall provide adequate 24 protection for confidential and proprietary information 25 furnished, delivered or filed by any person, corporation or 26 other entity. 27 (220 ILCS 5/5-104) (from Ch. 111 2/3, par. 5-104) 28 Sec. 5-104. Depreciation accounts. 29 (a) The Commission shall have power, after hearing, to 30 require any or all public utilities, except electric public 31 utilities, to keep such accounts as will adequately reflect 32 depreciation, obsolescence and the progress of the arts. The -132- SRS90HB0362JJsaam02 1 Commission may, from time to time, ascertain and determine 2 and by order fix the proper and adequate rate of depreciation 3 of the several classes of property for each public utility; 4 and each public utility shall conform its depreciation 5 accounts to the rates so ascertained, determined and fixed. 6 (b) The Commission shall have the power, after hearing, 7 to require any or all electric public utilities to keep such 8 accounts as will adequately reflect depreciation, 9 obsolescence, and the progress of the arts. The Commission 10 may, from time to time, ascertain and determine and by order 11 fix the proper and adequate rate of depreciation of the 12 several classes of property for each electric public utility; 13 and each electric public utility shall thereafter, absent 14 further order of the Commission, conform its depreciation 15 accounts to the rates so ascertained, determined and fixed 16 until at least the end of the first full calendar year 17 following the date of such determination. 18 (c) An electric public utility may from time to time 19 alter the annual rates of depreciation, which for purposes of 20 this subsection (c) and subsection (d) shall include 21 amortization, that it applies to its several classes of 22 assets so long as the rates are consistent with generally 23 accepted accounting principles. The electric public utility 24 shall file a statement with the Commission which shall set 25 forth the new rates of depreciation and which shall contain a 26 certification by an independent certified public accountant 27 that the new rates of depreciation are consistent with 28 generally accepted accounting principles. Upon the filing of 29 such statement, the new rates of depreciation shall be deemed 30 to be approved by the Commission as the rates of depreciation 31 to be applied thereafter by the public utility as though an 32 order had been entered pursuant to subsection (b). 33 (d) In any proceeding conducted pursuant to Section 34 9-201 or 9-202 to set an electric public utility's rates for -133- SRS90HB0362JJsaam02 1 service, the Commission may determine not to use, in 2 determining the depreciation expense component of the public 3 utility's rates for service, the rates of depreciation 4 established pursuant to subsection (c), if the Commission in 5 that proceeding finds based on the record that different 6 rates of depreciation are required to adequately reflect 7 depreciation, obsolescence and the progress of the arts, and 8 fixes by order and uses for purposes of that proceeding new 9 rates of depreciation to be thereafter employed by the 10 electric public utility until the end of the first full 11 calendar year following the date of the determination and 12 thereafter until altered in accordance with subsection (b) or 13 (c) of this Section. 14 (Source: P.A. 84-617.) 15 (220 ILCS 5/6-102) (from Ch. 111 2/3, par. 6-102) 16 Sec. 6-102. Authorization of issues of stock. 17 (a) Subject to the provisions of this Act and of the 18 order of the Commission issued as provided in this Act, a 19 public utility may issue stocks and stock certificates, and 20 bonds, notes and other evidences of indebtedness payable at 21 periods of more than 12 months after the date thereof for any 22 lawful purpose. However, such public utility shall first have 23 secured from the Commission an order authorizing such issue 24 and stating the amount thereof and the purpose or purposes to 25 which the issue or the proceeds thereof are to be applied, 26 and that in the opinion of the Commission, the money, 27 property or labor to be procured or paid for by such issue is 28 reasonably required for the purpose or purposes specified in 29 the order. 30 (b) The provisions of this subsection (b) shall apply 31 only to (1) any issuances of stock in a cumulative amount, 32 exclusive of any issuances referred to in item (3), that are 33 10% or more in a calendar year or 20% or more in a 24-month -134- SRS90HB0362JJsaam02 1 period of the total common stockholders' equity or of the 2 total amount of preferred stock outstanding, as the case may 3 be, of the public utility, and (2) to any issuances of bonds, 4 notes or other evidences of indebtedness in a cumulative 5 principal amount, exclusive of any issuances referred to in 6 item (3), that are 10% or more in a calendar year or 20% or 7 more in a 24-month period of the aggregate principal amount 8 of bonds, notes and other evidences of indebtedness of the 9 public utility outstanding, all as of the date of the 10 issuance, but shall not apply to (3) any issuances of stock 11 or of bonds, notes or other evidences of indebtedness 90% or 12 more of the proceeds of which are to be used by the public 13 utility for purposes of refunding, redeeming or refinancing 14 outstanding issues of stock, bonds, notes or other evidences 15 of indebtedness. To enable it to determine whether it will 16 issue thesuchorder required by subsection (a) of this 17 Section, the Commission mayshallhold a hearing and may make 18 such additional inquiry or investigation, and examine such 19 witnesses, books, papers, accounts, documents and contracts 20 and require the filing of such data as it may deem of 21 assistance. The public utility may be required by the 22 Commission to disclose every interest of the directors of 23 such public utility in any transaction under investigation. 24 The Commission shall have power to investigate all such 25 transactions and to inquire into the good faith thereof, to 26 examine books, papers, accounts, documents and contracts of 27 public utilities, construction or other companies or of firms 28 or individuals with whom the public utility shall have had 29 financial transactions, for the purpose of enabling it to 30 verify any statements furnished, and to examine into the 31 actual value of property acquired by or services rendered to 32 such public utility. Before issuing its order, the 33 Commission, when it is deemed necessary by the Commission, 34 shall make an adequate physical valuation of all property of -135- SRS90HB0362JJsaam02 1 the public utility, but a valuation already made under proper 2 public supervision may be adopted, either in whole or in 3 part, at the discretion of the Commission; and shall also 4 examine all previously authorized or outstanding securities 5 of the public utility, and fixed charges attached thereto. A 6 statement of the results of such physical valuation, and a 7 statement of the character of all outstanding securities, 8 together with the conditions under which they are held, shall 9 be included in the order. The Commission may require that 10 such information or such part thereof as it thinks proper, 11 shall appear upon the stock, stock certificate, bond, note or 12 other evidence of indebtedness authorized by its order. The 13 Commission may by its order grant permission for the issue of 14 such stock certificates, or bonds, notes or other evidences 15 of indebtedness in the amount applied for, or in a lesser 16 amount, or not at all, and may attach to the exercise of its 17 permission such condition or conditions as it may deem 18 reasonable and necessary. Nothing in this Section shall 19 prevent a public utility from seeking, nor the Commission 20 from approving, a shelf registration plan for issuing 21 securities over a reasonable period in accordance with 22 regulations established by the United States Securities and 23 Exchange Commission. Any securities issued pursuant to an 24 approved shelf registration plan need not be further approved 25 by the Commission so long as they are in compliance with the 26 approved shelf registration plan. The Commission shall have 27 the power to refuse its approval of applications to issue 28 securities, in whole or in part, upon a finding that the 29 issue of such securities would be contrary to public 30 interest. The Commission may also require the public utility 31 to compile for the information of its shareholders such facts 32 in regard to its financial transactions, in such form as the 33 Commission may direct. 34 No public utility shall, without the consent of the -136- SRS90HB0362JJsaam02 1 Commission, apply the issue of any stock or stock 2 certificates, or bond, note or other evidence of 3 indebtedness, which was issued pursuant to an order of the 4 Commission entered pursuant to this subsection (b), or any 5 part thereof, or any proceeds thereof, to any purpose not 6 specified in the Commission's order or to any purpose 7 specified in the Commission's order in excess of the amount 8 authorized for such purpose; or issue or dispose of the same 9 on any terms less favorable than those specified in such 10 order, or a modification thereof. The Commission shall have 11 the power to require public utilities to account for the 12 disposition of the proceeds of all sales of stocks and stock 13 certificates, and bonds, notes and other evidences of 14 indebtedness, which were issued pursuant to an order of the 15 Commission entered pursuant to this subsection (b), in such 16 form and detail as it may deem advisable, and to establish 17 such rules and regulations as it may deem reasonable and 18 necessary to insure the disposition of such proceeds for the 19 purpose or purposes specified in its order. 20 (c) A public utility may issue notes, for proper 21 purposes, and not in violation of any provision of this Act 22 or any other Act, payable at periods of not more than 12 23 months after the date of issuance of the same, without the 24 consent of the Commission; but no such note shall, in whole 25 or in part, be renewed or be refunded from the proceeds of 26 any other such note or evidence of indebtedness from time to 27 time without the consent of the Commission for an aggregate 28 period of longer than 2twoyears. 29 (d) Any issuance of stock or of bonds, notes or other 30 evidences of indebtedness, other than issuances of notes 31 pursuant to subsection (c) of this Section, which is not 32 subject to subsection (b) of this Section, shall be regulated 33 by the Commission as follows: the public utility shall file 34 with the Commission, at least 15 days before the date of the -137- SRS90HB0362JJsaam02 1 issuance, an informational statement setting forth the type 2 and amount of the issue and the purpose or purposes to which 3 the issue or the proceeds thereof are to be applied. Prior 4 to the date of the issuance specified in the public utility's 5 filing, the Commission, if it finds that the issuance is not 6 subject to subsection (b) of this Section, shall issue a 7 written order in conformance with subsection (a) of this 8 Section authorizing the issuance. Notwithstanding any other 9 provisions of this Act, the Commission may delegate its 10 authority to enter the order required by this subsection (d) 11 to a hearing examiner. 12 (e) The Commission shall have no power to authorize the 13 capitalization of the right to be a corporation, or to 14 authorize the capitalization of any franchise, license, or 15 permit whatsoever or the right to own, operate or enjoy any 16 such franchise, license, or permit, in excess of the amount 17 (exclusive of any tax or annual charge) actually paid to the 18 State or to a political subdivision thereof as the 19 consideration for the grant of such franchise, license, 20 permit or right; nor shall any contract for consolidation or 21 lease be capitalized, nor shall any public utility hereafter 22 issue any bonds, notes or other evidences of indebtedness 23 against or as a lien, upon any contract for consolidation or 24 merger. 25 (f) The provisions of this Section shall not apply to 26 public utilities which are not corporations duly incorporated 27 under the laws of this State to the extent that any such 28 public utility may issue stock, bonds, notes or other 29 evidences of indebtedness not directly or indirectly 30 constituting or creating a lien or charge on, or right to 31 profits from, any property used or useful in rendering 32 service within this State. Nothing in this Section or in 33 Section 6-104 of this Act shall be construed to require a 34 common carrier by railroad subject to Part I of the -138- SRS90HB0362JJsaam02 1 Interstate Commerce Act, being part of an Act of the 49th 2 Congress of the United States entitled "An Act to Regulate 3 Commerce", as amended, to secure from the Commission 4 authority to issue or execute or deliver any conditional 5 sales contract or similar contract or instrument reserving or 6 retaining title in the seller for all or part of the purchase 7 price of equipment or property used or to be used for or in 8 connection with the transportation of persons or property. 9 (Source: P.A. 84-617.) 10 (220 ILCS 5/7-101) (from Ch. 111 2/3, par. 7-101) 11 Sec. 7-101. Transactions with affiliated interests. 12 (1) The Commission shall have jurisdiction over holders 13 of the voting capital stock of all public utilities under the 14 jurisdiction of the Commission to such extent as may be 15 necessary to enable the Commission to require the disclosure 16 of the identity in respective interests of every owner of any 17 substantial interest in such voting capital stocks. One per 18 centum or more is a substantial interest, within the meaning 19 of this subdivision. 20 (2) (i) Except as provided in subparagraph (ii) of this 21 subsection (2), tThe Commission shall have jurisdiction over 22 affiliated interests having transactions, other than 23 ownership of stock and receipt of dividends thereon, with 24 public utilities under the jurisdiction of the Commission, to 25 the extent of access to all accounts and records of such 26 affiliated interests relating to such transactions, including 27 access to accounts and records of joint or general expenses, 28 any portion of which may be applicable to such transactions; 29 and to the extent of authority to require such reports with 30 respect to such transactions to be submitted by such 31 affiliated interests, as the Commission may prescribe. 32 (ii) The Commission shall have jurisdiction over 33 affiliated interests having transactions, other than -139- SRS90HB0362JJsaam02 1 ownership of stock and receipt of dividends thereon, with 2 electric and gas public utilities under the jurisdiction of 3 the Commission, to the extent of access to all accounts and 4 records of such affiliated interests relating to such 5 transactions, including access to accounts and records of 6 joint and general expenses with the electric or gas public 7 utility any portion of which is related to such transactions; 8 and to the extent of authority to require such reports with 9 respect to such transactions to be submitted by such 10 affiliated interests, as the Commission may prescribe; 11 provided, however, that prior to requesting such access or 12 reports from the affiliated interest, the Commission shall 13 first seek to obtain the information that would be included 14 in such accounts, records or reports from the public utility. 15 The Commission shall not have access to any accounts and 16 records of, or require any reports from, an affiliated 17 interest that are not related to a transaction, including 18 without limitation a transfer or exchange of tangible or 19 intangible assets, with the electric or gas public utility. 20 Nothing in this paragraph shall limit the authority of the 21 Commission otherwise provided under this Act to have access 22 to accounts and records of, or to require reports from, the 23 electric or gas public utility or to prescribe guidelines 24 which the electric or gas public utility must follow in 25 allocating costs to transactions with affiliated interests. 26 For the purpose of this Section, the phrase "affiliated 27 interests" means: 28 (a) Every corporation and person owning or holding, 29 directly or indirectly, 10% or more of the voting capital 30 stock of such public utility; 31 (b) Every corporation and person in any chain of 32 successive ownership of 10% or more of voting capital stock; 33 (c) Every corporation, 10% or more of whose voting 34 capital stock is owned by any person or corporation owning -140- SRS90HB0362JJsaam02 1 10% or more of the voting capital stock of such public 2 utility, or by any person or corporation in any such chain of 3 successive ownership of 10% or more of voting capital stock; 4 (d) Every corporation, 10% or more of whose voting 5 securities is owned, directly or indirectly by such public 6 utility; 7 (e) Every person who is an elective officer or director 8 of such public utility or of any corporation in any chain of 9 successive ownership of 10% or more of voting capital stock; 10 (f) Every corporation which has one or more elective 11 officers or one or more directors in common with such public 12 utility; 13 (g) Every corporation or person which the Commission may 14 determine as a matter of fact after investigation and hearing 15 is actually exercising any substantial influence over the 16 policies and actions of such public utility even though such 17 influence is not based upon stock holding, stockholders, 18 directors or officers to the extent specified in this 19 Section; 20 (h) Every person or corporation who or which the 21 Commission may determine as a matter of fact after 22 investigation and hearing is actually exercising such 23 substantial influence over the policies and actions of such 24 public utility in conjunction with one or more other 25 corporations or persons with which or whom they are related 26 by ownership or blood relationship or by action in concert 27 that together they are affiliated with such public utility 28 within the meaning of this Section even though no one of them 29 alone is so affiliated. 30 No such person or corporation is affiliated within the 31 meaning of this Section however, if such person or 32 corporation is otherwise subject to the jurisdiction of the 33 Commission or such person or corporation has not had 34 transactions or dealings other than the holding of stock and -141- SRS90HB0362JJsaam02 1 the receipt of dividends thereon with such public utility 2 during the 2 year period next preceding. 3 (3) No management, construction, engineering, supply, 4 financial or similar contract and no contract or arrangement 5 for the purchase, sale, lease or exchange of any property or 6 for the furnishing of any service, property or thing, 7 hereafter made with any affiliated interest, as hereinbefore 8 defined, shall be effective unless it has first been filed 9 with and consented to by the Commission or is exempted in 10 accordance with the provisions of this Section or of Section 11 16-111 of this Act. The Commission may condition such 12 approval in such manner as it may deem necessary to safeguard 13 the public interest. If it be found by the Commission, after 14 investigation and a hearing, that any such contract or 15 arrangement is not in the public interest, the Commission may 16 disapprove such contract or arrangement. Every contract or 17 arrangement not consented to or excepted by the Commission as 18 provided for in this Section is void. 19 The consent to, or exemption or waiver of consent to, any 20 contract or arrangement under this Section or Section 16-111 21as required above, does not constitute approval of payments 22 thereunder for the purpose of computing expense of operation 23 in any rate proceeding. However, the Commission shall not 24 require a public utility to make purchases at prices 25 exceeding the prices offered by an affiliated interest, and 26 the Commission shall not be required to disapprove or 27 disallow, solely on the ground that such payments yield the 28 affiliated interest a return or rate of return in excess of 29 that allowed the public utility, any portion of payments for 30 purchases from an affiliated interest. 31 (4) The Commission may by general rules applicable alike 32 to all public utilities affected thereby waive the filing and 33 necessity for approval of contracts and arrangements 34 described in subparagraph (3) of this Section in cases of (a) -142- SRS90HB0362JJsaam02 1 contracts or arrangements made in the ordinary course of 2 business for the employment of officers or employees; (b) 3 contracts or arrangements made in the ordinary course of 4 business for the purchase of services, supplies, or other 5 personal property at prices not exceeding the standard or 6 prevailing market prices, or at prices or rates fixed 7 pursuant to law; (c) contracts or arrangements where the 8 total obligation to be incurred under such contract or 9 arrangementthereunderdoes not exceed the lesser of (i) 10 $5,000,000 or (ii) 2% of the public utility's receipts from 11 all tariffed services (as defined in Article XVI) in the 12 preceding calendar year$500; (d) the temporary leasing, 13 lending or interchanging of equipment in the ordinary course 14 of business or in case of an emergency; and (e) contracts 15 made by a public utility with a person or corporation whose 16 bid is the most favorable to the public utility, as 17 ascertained by competitive biddingunder such rules as may be18prescribed by the Commission. If the Commission, after a 19 hearing, finds that any public utility is abusing or has 20 abused such general rule and thereby is evading compliance 21 with the standard established herein, the Commission may 22 require such public utility to thereafter file and receive 23 the Commission's approval upon all such transactions, but 24 that general rule shall remain in full force and effect as to 25 all other public utilities. 26 (Source: P.A. 84-617.) 27 (220 ILCS 5/7-102) (from Ch. 111 2/3, par. 7-102) 28 Sec. 7-102. Transactions requiring Commission approval. 29 Unless the consent and approval of the Commission is first 30 obtained or unless such approval is waived by the Commission 31 or is exempted in accordance with the provisions of this 32 Section or of any other Section of this Act: 33 (a) No 2 or more public utilities may enter into -143- SRS90HB0362JJsaam02 1 contracts with each other that will enable such public 2 utilities to operate their lines or plants in connection with 3 each other; 4 (b) No public utility may purchase, lease, or in any 5 other manner acquire control, direct or indirect, over the 6 franchises, licenses, permits, plants, equipment, business or 7 other property of any other public utility; 8 (c) No public utility may assign, transfer, lease, 9 mortgage, sell (by option or otherwise), or otherwise dispose 10 of or encumber the whole or any part of its franchises, 11 licenses, permits, plant, equipment, business, or other 12 property, but the consent and approval of the Commission 13 shall not be required for the sale, lease, assignment or 14 transfer (1) by any public utility of any tangible personal 15 property which is not necessary or useful in the performance 16 of its duties to the public, or (2) by any railroad of any 17 real or tangible personal property; 18 (d) No public utility may by any means, direct or 19 indirect, merge or consolidate its franchises, licenses, 20 permits, plants, equipment, business or other property with 21 that of any other public utility; 22 (e) No public utility may purchase, acquire, take or 23 receive any stock, stock certificates, bonds, notes or other 24 evidences of indebtedness of any other public utility; 25 (f) No public utility may in any manner, directly or 26 indirectly, guarantee the performance of any contract or 27 other obligation of any other person, firm or corporation 28 whatsoever; 29 (g) No public utility may use, appropriate, or divert 30 any of its moneys, property or other resources in or to any 31 business or enterprise which is not, prior to such use, 32 appropriation or diversion essentially and directly connected 33 with or a proper and necessary department or division of the 34 business of such public utility; provided that this -144- SRS90HB0362JJsaam02 1 subsection shall not be construed as modifying subsections 2 (a) through (e) of this Section; 3 (h) No public utility may, directly or indirectly, 4 invest, loan or advance, or permit to be invested, loaned or 5 advanced any of its moneys, property or other resources in, 6 for, in behalf of or to any other person, firm, trust, group, 7 association, company or corporation whatsoever, except that 8 no consent or approval by the Commission is necessary for the 9 purchase of stock in development credit corporations 10 organized under the Illinois Development Credit Corporation 11 Act, providing that no such purchase may be made hereunder 12 if, as a result of such purchase, the cumulative purchase 13 price of all such shares owned by the utility would exceed 14 one-fiftieth of one per cent of the utility's gross operating 15 revenue for the preceding calendar year. 16 (i) Any public utility may present to the Commission for 17 approval options or contracts to sell or lease real property, 18 notwithstanding that the value of the property under option 19 may have changed between the date of the option and the 20 subsequent date of sale or lease. If the options or contracts 21 are approved by the Commission, subsequent sales or leases in 22 conformance with those options or contracts may be made by 23 the public utility without any further action by the 24 Commission. If approval of the options or contracts is denied 25 by the Commission, the options or contracts are void and any 26 consideration theretofore paid to the public utility must be 27 refunded within 30 days following disapproval of the 28 application. 29 The proceedings for obtaining the approval of the 30 Commission provided for it in this Section shall be as 31 follows: There shall be filed with the Commission a petition, 32 joint or otherwise, as the case may be, signed and verified 33 by the president, any vice president, secretary, treasurer, 34 comptroller, general manager, or chief engineer of the -145- SRS90HB0362JJsaam02 1 respective companies, or by the person or company, as the 2 case may be, clearly setting forth the object and purposes 3 desired, and setting forth the full and complete terms of the 4 proposed assignment, transfer, lease, mortgage, purchase, 5 sale, merger, consolidation, contract or other transaction, 6 as the case may be. Upon the filing of such petition, the 7 Commission shall, if it deems necessary, fix a time and place 8 for the hearing thereon. After such hearing, or in case no 9 hearing is required, if the Commission is satisfied that such 10 petition should reasonably be granted, and that the public 11 will be convenienced thereby, the Commission shall make such 12 order in the premises as it may deem proper and as the 13 circumstances may require, attaching such conditions as it 14 may deem proper, and thereupon it shall be lawful to do the 15 things provided for in such order. The Commission shall 16 impose such conditions as will protect the interest of 17 minority and preferred stockholders. 18 The Commission shall have power by general rules 19 applicable alike to all public utilities, other than electric 20 and gas public utilities, affected thereby to waive the 21 filing and necessity for approval of the following: (a) sales 22 of property involving a consideration of not more than 23 $300,000 for utilities with gross revenues in excess of 24 $50,000,000 annually and a consideration of not more than 25 $100,000 for all other utilities; (b) leases, easements and 26 licenses involving a consideration or rental of not more than 27 $30,000 per year for utilities with gross revenues in excess 28 of $50,000,000 annually and a consideration or rental of not 29 more than $10,000 per year for all other utilities; (c) 30 leases of office building space not required by the public 31 utility in rendering service to the public; (d) the temporary 32 leasing, lending or interchanging of equipment in the 33 ordinary course of business or in case of an emergency; and 34 (e) purchase-money mortgages given by a public utility in -146- SRS90HB0362JJsaam02 1 connection with the purchase of tangible personal property 2 where the total obligation to be secured shall be payable 3 within a period not exceeding one year. However, if the 4 Commission, after a hearing, finds that any public utility to 5 which such rule is applicable is abusing or has abused such 6 general rule and thereby is evading compliance with the 7 standard established herein, the Commission shall have power 8 to require such public utility to thereafter file and receive 9 the Commission's approval upon all such transactions as 10 described in this Section, but such general rule shall remain 11 in full force and effect as to all other public utilities to 12 which such rule is applicable. 13 The filing of, and the consent and approval of the 14 Commission for, any assignment, transfer, lease, mortgage, 15 purchase, sale, merger, consolidation, contract or other 16 transaction by an electric or gas public utility with gross 17 revenues in all jurisdictions of $250,000,000 or more 18 annually involving a sale price or annual consideration in an 19 amount of $5,000,000 or less shall not be required. The 20 Commission shall also have the authority, on petition by an 21 electric or gas public utility with gross revenues in all 22 jurisdictions of $250,000,000 or more annually, to establish 23 by order higher thresholds than the foregoing for the 24 requirement of approval of transactions by the Commission 25 pursuant to this Section for the electric or gas public 26 utility, but no greater than 1% of the electric or gas public 27 utility's average total gross utility plant in service in the 28 case of sale, assignment or acquisition of property, or 2.5% 29 of the electric or gas public utility's total revenue in the 30 case of other sales price or annual consideration, in each 31 case based on the preceding calendar year, and subject to the 32 power of the Commission, after notice and hearing, to further 33 revise those thresholds at a later date. In addition to the 34 foregoing, the Commission shall have power by general rules -147- SRS90HB0362JJsaam02 1 applicable alike to all electric and gas public utilities 2 affected thereby to waive the filing and necessity for 3 approval of the following: (a) sales of property involving a 4 consideration of $100,000 or less for electric and gas 5 utilities with gross revenues in all jurisdictions of less 6 than $250,000,000 annually; (b) leases, easements and 7 licenses involving a consideration or rental of not more than 8 $10,000 per year for electric and gas utilities with gross 9 revenues in all jurisdictions of less than $250,000,000 10 annually; (c) leases of office building space not required by 11 the electric or gas public utility in rendering service to 12 the public; (d) the temporary leasing, lending or 13 interchanging of equipment in the ordinary course of business 14 or in the case of an emergency; and (e) purchase-money 15 mortgages given by an electric or gas public utility in 16 connection with the purchase of tangible personal property 17 where the total obligation to be secured shall be payable 18 within a period of one year or less. However, if the 19 Commission, after a hearing, finds that any electric or gas 20 public utility is abusing or has abused such general rule and 21 thereby is evading compliance with the standard established 22 herein, the Commission shall have power to require such 23 electric or gas public utility to thereafter file and receive 24 the Commission's approval upon all such transactions as 25 described in this Section and not exempted pursuant to the 26 first sentence of this paragraph or to subsection (g) of 27 Section 16-111 of this Act, but such general rule shall 28 remain in full force and effect as to all other electric and 29 gas public utilities. 30 Every assignment, transfer, lease, mortgage, sale or 31 other disposition or encumbrance of the whole or any part of 32 the franchises, licenses, permits, plant, equipment, business 33 or other property of any public utility, or any merger or 34 consolidation thereof, and every contract, purchase of stock, -148- SRS90HB0362JJsaam02 1 or other transaction referred to in this Section and not 2 exempted in accordance with the provisions of the immediately 3 preceding paragraph of this Section, made otherwise than in 4 accordance with an order of the Commission authorizing the 5 same, except as provided in this Section, shall be void. The 6 provisions of this Section shall not apply to any 7 transactions by or with a political subdivision or municipal 8 corporation of this State. 9 The provisions of this Section do not apply to the 10 purchase or sale of emission allowances created under and 11 defined in Title IV of the federal Clean Air Act Amendments 12 of 1990 (P.L. 101-549), as amended. 13 (Source: P.A. 88-604, eff. 9-1-94; 89-99, eff. 7-7-95.) 14 (220 ILCS 5/7-204) (from Ch. 111 2/3, par. 7-204) 15 Sec. 7-204. Reorganization; defined; Commission approval 16 therefore. 17 (a) For purposes of this Section, "reorganization" means 18 any transaction which, regardless of the means by which it is 19 accomplished, results in a change in the ownership of a 20 majority of the voting capital stock of an Illinois public 21 utility; or the ownership or control of any entity which owns 22 or controls a majority of the voting capital stock of a 23 public utility; or by which 2 public utilities merge, or by 24 which a public utility acquires substantially all of the 25 assets of another public utility; provided, however, that 26 "reorganization" as used in this Section shall not include a 27 mortgage or pledge transaction entered into to secure a bona 28 fide borrowing by the party granting the mortgage or making 29 the pledge. 30 In addition to the foregoing, "reorganization" shall 31 include for purposes of this Section any transaction which, 32 regardless of the means by which ititsis accomplished, will 33 have the effect of terminating the affiliated interest status -149- SRS90HB0362JJsaam02 1 of any entity as defined in paragraphs (a), (b), (c) or (d) 2 of subsection (2) of Section 7-101 of this Act where such 3 entity had transactions with the public utility, in the 12 4twelvecalendar months immediately preceding the date of 5 termination of such affiliated interest status subject to 6 subsection (3) of Section 7-101 of this Act with a value 7 greater than 15% of the public utility's revenues for that 8 same 12-monthtwelve-monthperiod. If the proposed 9 transaction would have the effect of terminating the 10 affiliated interest status of more than one Illinois public 11 utility, the utility with the greatest revenues for the 12 12-monthtwelve-monthperiod shall be used to determine 13 whether such proposed transaction is a reorganization for the 14 purposes of this Section. The Commission shall have 15 jurisdiction over any reorganization as defined herein. 16 (b) No reorganization shall take place without prior 17 Commission approval. The Commission shall not approve any 18 proposed reorganization if the Commission finds, after notice 19 and hearing, that the reorganization will adversely affect 20 the utility's ability to perform its duties under this Act. 21 In reviewing any proposed reorganization, the Commission must 22 find that: 23 (1)(a)the proposed reorganization will not 24 diminish the utility's ability to provide adequate, 25 reliable, efficient, safe and least-cost public utility 26 service; 27 (2)(b)the proposed reorganization will not result 28 in the unjustified subsidization of non-utility 29 activities by the utility or its customers; 30 (3)(c)costs and facilities are fairly and 31 reasonably allocated between utility and non-utility 32 activities in such a manner that the Commission may 33 identify those costs and facilities which are properly 34 included by the utility for ratemaking purposes; -150- SRS90HB0362JJsaam02 1 (4)(d)the proposed reorganization will not 2 significantly impair the utility's ability to raise 3 necessary capital on reasonable terms or to maintain a 4 reasonable capital structure; 5 (5)(e)the utility will remain subject to all 6 applicable laws, regulations, rules, decisions and 7 policies governing the regulation of Illinois public 8 utilities. 9 (6) the proposed reorganization is not likely to 10 have a significant adverse effect on competition in those 11 markets over which the Commission has jurisdiction; 12 (7) the proposed reorganization is not likely to 13 result in any adverse rate impacts on retail customers. 14 (c) The Commission shall not approve a reorganization 15 without ruling on: (i) the allocation of any savings 16 resulting from the proposed reorganization; and (ii) whether 17 the companies should be allowed to recover any costs incurred 18 in accomplishing the proposed reorganization and, if so, the 19 amount of costs eligible for recovery and how the costs will 20 be allocated. 21 (d) The Commission shall issue its Order approving or 22 denying the proposed reorganization within 11 months after 23 the application is filed. The Commission may extend the 24 deadline for a period equivalent to the length of any delay 25 which the Commission finds to have been caused by the 26 Applicant's failure to provide data or information requested 27 by the Commission or that the Commission ordered the 28 Applicant to provide to the parties. The Commission may also 29 extend the deadline by an additional period not to exceed 3 30 months to consider amendments to the Applicant's filing, or 31 to consider reasonably unforeseeable changes in circumstances 32 subsequent to the Applicant's initial filing. 33 (e) Subsections (c) and (d) and subparagraphs (6) and 34 (7) of subsection (b) of this Section shall apply only to -151- SRS90HB0362JJsaam02 1 merger applications submitted to the Commission subsequent to 2 April 23, 1997. No other Commission approvals shall be 3 required for mergers that are subject to this Section. 4 (f) In approving any proposed reorganization pursuant to 5 this Section the Commission may impose such terms, conditions 6 or requirements as, in its judgment, are necessary to protect 7 the interests of the public utility and its customers. 8 (Source: P.A. 84-617; 84-1025.) 9 (220 ILCS 5/7-206) (from Ch. 111 2/3, par. 7-206) 10 Sec. 7-206. Separate accounts for nonpublic business of 11 public utility. The Commission may require every public 12 utility engaged directly or indirectly in any other than a 13 public utility business, as defined by law, to keep 14 separately in like manner and form the accounts of all such 15 other business, and the Commission may provide for the 16 examination and inspection of the books, accounts, papers and 17 records of such other business, in so far as may be necessary 18 to enforce any provisions of this Act. The Commission shall 19 have the power to inquire as to and prescribe the 20 apportionment of capitalization, earnings, debts and expenses 21 fairly and justly to be awarded to or borne by the ownership, 22 operation, management or control of such public utility as 23 distinguished from such other business. Provided, however, 24 that an electric or gas public utility shall not be required 25 to maintain the accounts of any non-public utility business 26 in the same manner and form as the electric or gas public 27 utility is required to keep the accounts of its public 28 utility business unless expressly ordered by the Commission. 29 (Source: P.A. 84-617.) 30 (220 ILCS 5/8-406) (from Ch. 111 2/3, par. 8-406) 31 Sec. 8-406. Certificate of public convenience and 32 necessity. -152- SRS90HB0362JJsaam02 1 (a) No public utility not owning any city or village 2 franchise nor engaged in performing any public service or in 3 furnishing any product or commodity within this State as of 4 July 1, 1921 and not possessing a certificate of public 5 convenience and necessity from the Illinois Commerce 6 Commission, the State Public Utilities Commission or the 7 Public Utilities Commission, at the time this amendatory Act 8 of 1985 goes into effect, shall transact any business in this 9 State until it shall have obtained a certificate from the 10 Commission that public convenience and necessity require the 11 transaction of such business. 12 (b) No public utility shall begin the construction of 13 any new plant, equipment, property or facility which is not 14 in substitution of any existing plant, equipment, property or 15 facility or any extension or alteration thereof or in 16 addition thereto,and which in the case of gas and electric17utilities may affect the energy plan of the utilityunless 18 and until it shall have obtained from the Commission a 19 certificate that public convenience and necessity require 20 such construction. Whenever after a hearing the Commission 21 determines that any new construction or the transaction of 22 any business by a public utility will promote the public 23 convenience and is necessary thereto, it shall have the power 24 to issue certificates of public convenience and necessity. 25 The Commission shall determine that proposed construction 26 will promote the public convenience and necessity only if the 27 utility demonstrates: (1) that the proposed construction is 28 necessary to provide adequate, reliable, and efficient 29 service to its customers and is the least-cost means of 30 satisfying the service needs of its customers;(2) with31respect to gas and electric utilities, that the proposed32construction is consistent with the most recent energy plan33adopted by the Commission for the utility and the State, as34updated;(2)(3)that the utility is capable of efficiently -153- SRS90HB0362JJsaam02 1 managing and supervising the construction process and has 2 taken sufficient action to ensure adequate and efficient 3 construction and supervision thereof; and (3)(4)that the 4 utility is capable of financing the proposed construction 5 without significant adverse financial consequences for the 6 utility or its customers.If the Commission finds that the7public convenience and necessity requires a new electric8generating facility to be added by the utility, the9Commission shall evaluate the proposed construction in10comparison with the merits of a facility designed to use11Illinois coal in an environmentally acceptable way, and shall12consider the economic impact on employment directly or13indirectly related to the production of coal in Illinois over14the entire period of time affected by the proposed15construction or its alternatives.16 (c) After the effective date of this amendatory Act of 17 1987, no construction shall commence on any new nuclear power 18 plant to be located within this State, and no certificate of 19 public convenience and necessity or other authorization shall 20 be issued therefor by the Commission, until the Director of 21 the Illinois Environmental Protection Agency finds that the 22 United States Government, through its authorized agency, has 23 identified and approved a demonstrable technology or means 24 for the disposal of high level nuclear waste, or until such 25 construction has been specifically approved by a statute 26 enacted by the General Assembly. 27 As used in this Section, "high level nuclear waste" means 28 those aqueous wastes resulting from the operation of the 29 first cycle of the solvent extraction system or equivalent 30 and the concentrated wastes of the subsequent extraction 31 cycles or equivalent in a facility for reprocessing 32 irradiated reactor fuel and shall include spent fuel 33 assemblies prior to fuel reprocessing. 34 (d) In making its determination, the Commission shall -154- SRS90HB0362JJsaam02 1 attach primary weight to the cost or cost savings to the 2 customers of the utility. The Commission may consider any or 3 all factors which will or may affect such cost or cost 4 savings. 5 (e) The Commission may issue a temporary certificate 6 which shall remain in force not to exceed one year in cases 7 of emergency, to assure maintenance of adequate service or to 8 serve particular customers, without notice or hearing, 9 pending the determination of an application for a 10 certificate, and may by regulation exempt from the 11 requirements of this Section temporary acts or operations for 12 which the issuance of a certificate will not be required in 13 the public interest. 14 A public utility shall not be required to obtain but may 15 apply for and obtain a certificate of public convenience and 16 necessity pursuant to this Section with respect to any matter 17 as to which it has received the authorization or order of the 18 Commission under the Electric Supplier Act, and any such 19 authorization or order granted a public utility by the 20 Commission under that Act shall as between public utilities 21 be deemed to be, and shall have except as provided in that 22 Act the same force and effect as, a certificate of public 23 convenience and necessity issued pursuant to this Section. 24 No electric cooperative shall be made or shall become a 25 party to or shall be entitled to be heard or to otherwise 26 appear or participate in any proceeding initiated under this 27 Section for authorization of power plant construction and as 28 to matters as to which a remedy is available under The 29 Electric Supplier Act. 30 (f) Such certificates may be altered or modified by the 31 Commission, upon its own motion or upon application by the 32 person or corporation affected. Unless exercised within a 33 period of 2 years from the grant thereof authority conferred 34 by a certificate of convenience and necessity issued by the -155- SRS90HB0362JJsaam02 1 Commission shall be null and void. 2 No certificate of public convenience and necessity shall 3 be construed as granting a monopoly or an exclusive 4 privilege, immunity or franchise. 5 (Source: P.A. 85-377.) 6 (220 ILCS 5/8-503) (from Ch. 111 2/3, par. 8-503) 7 Sec. 8-503. Whenever the Commission, after a hearing, 8 shall find that additions, extensions, repairs or 9 improvements to, or changes in, the existing plant, 10 equipment, apparatus, facilities or other physical property 11 of any public utility or of any 2twoor more public 12 utilities are necessary and ought reasonably to be made or 13 that a new structure or structures is or are necessary and 14 should be erected, to promote the security or convenience of 15 its employees or the public, or in any other way to secure 16 adequate service or facilities, the Commission shall make and 17 serve an order authorizing or directing that such additions, 18 extensions, repairs, improvements or changes be made, or such 19 structure or structures be erected at the location, in the 20 manner and within the time specified in said order; provided, 21 however, that the Commission shall have no authority to order 22 the construction, addition or extension of any electric 23 generating plant unless the public utility requests a 24 certificate for the construction of the plant pursuant to 25 Section 8-406 and in conjunction with such request also 26 requests the entry of an order under this Section. If any 27 additions, extensions, repairs, improvements or changes, or 28 any new structure or structures, which the Commission has 29 authorized or ordered to be erected, require joint action by 30 2twoor more public utilities, the Commission shall notify 31 the said public utilities that such additions, extensions, 32 repairs, improvements or changes or new structure or 33 structures have been authorized or ordered and that the same -156- SRS90HB0362JJsaam02 1 shall be made at the joint cost whereupon the said public 2 utilities shall have such reasonable time as the Commission 3 may grant within which to agree upon the apportionment or 4 division of cost of such additions, extensions, repairs, 5 improvements or changes or new structure or structures, which 6 each shall bear. If at the expiration of such time such 7 public utilities shall fail to file with the Commission a 8 statement that an agreement has been made for a division or 9 apportionment of the cost or expense of such additions, 10 extensions, repairs, improvements or changes, or new 11 structure or structures, the Commission shall have authority, 12 after further hearing, to make an order fixing the proportion 13 of such cost or expense to be borne by each public utility 14 and the manner in which the same shall be paid or secured. 15 Nothing in this Act shall prevent the Commission, upon 16 its own motion or upon petition, from ordering, after a 17 hearing, the extension, construction, connection or 18 interconnection of plant, equipment, pipe, line, facilities 19 or other physical property of a public utility in whatever 20 configuration the Commission finds necessary to ensure that 21 natural gas is made available to consumers at no increased 22 cost to the customers of the utility supplying the gas. 23 Whenever the Commission finds, after a hearing, that the 24 public convenience or necessity requires it, the Commission 25 may order public utilities subject to its jurisdiction to 26 work jointly (1) for the purpose of purchasing and 27 distributing natural gas or gas substitutes, provided it 28 shall not increase the cost of gas to the customers of the 29 participating utilities, or (2) for any other reasonable 30 purpose. 31 (Source: P.A. 84-617.) 32 (220 ILCS 5/8-510) (from Ch. 111 2/3, par. 8-510) 33 Sec. 8-510. Land surveys. For the purpose of making land -157- SRS90HB0362JJsaam02 1 surveys, any public utility that has been granted a 2 certificate of public convenience and necessity by, or 3 received an order under Section 8-503 of this Act from, the 4 Commission may, 30 days after providing written notice to the 5 owner thereof by registered mail, enter upon the property of 6 any owner who has refused permission for entrance upon that 7 property, but subject to responsibility for all damages which 8 may be inflicted thereby. 9 (Source: P.A. 84-617.) 10 (220 ILCS 5/9-201.5) 11 Sec. 9-201.5. Decommissioning nuclear power plants; 12 rates. 13 (a) The Commission may after hearing, in a rate case or 14 otherwise, authorize the institution of rate provisions or 15 tariffs that increase or decrease charges to customers to 16 reflect changes in, or additional or reduced costs of, 17 decommissioning nuclear power plants, including accruals for 18 estimates of those costs, irrespective of any changes in 19 other costs or revenues; provided the revenues collected 20 under such rates or tariffs are used to recover costs 21 associated with contributions to appropriate decommissioning 22 trust funds or to reduce the amounts to be charged under such 23 rates or tariffs in the future. These provisions or tariffs 24 shall hereinafter be referred to as "decommissioning rates". 25 (b) A public utility that does not have a 26 decommissioning rate in effect on the effective date of this 27 amendatory Act of 1994 may not place a decommissioning rate 28 in effect before January 1, 1995. Changes in charges under a 29 decommissioning rate shall not be subject to the notice and 30 filing requirements of subsection (a) of Section 9-201 of 31 this Act, but a decommissioning rate of a utility that does 32 not have such a rate in effect before the effective date of 33 this amendatory Act of 1994 shall provide that no increase in -158- SRS90HB0362JJsaam02 1 charges under that rate may take effect until 60 days after 2 the utility provides the proposed increased charge to the 3 Commission for review. The Commission may require that a 4 decommissioning rate contain provisions for reconciling 5 amounts collected under the rate with both reasonably 6 projected costs and actual costs prudently incurred. As used 7 in this Section, "decommissioning costs" and "decommissioning 8 trust fund" have the same meaning as in Section 8-508.1 of 9 this Act. 10 (c) Nothing contained in this amendatory Act of 1994 11 shall affect any determination of the authority of the 12 Commission before the effective date of this amendatory Act 13 of 1994. Nothing contained in this amendatory Act of 1994 14 shall be used in any determination of the authority of the 15 Commission after the effective date of this amendatory Act of 16 1994, except with respect to decommissioning rates. 17 (d) A decommissioning rate authorized by the Commission 18 under this Section and the decommissioning cost studies 19 underlying the rate shall be subject to hearing and review, 20 in a rate case or otherwise, not less than once every 6 21 years, and the decommissioning rate shall be discontinued by22the Commission unless specifically approved for continuation23by the Commission after the hearing. 24 (Source: P.A. 88-653, eff. 1-1-95.) 25 (220 ILCS 5/9-220) (from Ch. 111 2/3, par. 9-220) 26 Sec. 9-220. Rate changes based on changes in fuel costs. 27 (a) Notwithstanding the provisions of Section 9-201, the 28 Commission may authorize the increase or decrease of rates 29 and charges based upon changes in the cost of fuel used in 30 the generation or production of electric power, changes in 31 the cost of purchased power, or changes in the cost of 32 purchased gas through the application of fuel adjustment 33 clauses or purchased gas adjustment clauses. The Commission -159- SRS90HB0362JJsaam02 1 may also authorize the increase or decrease of rates and 2 charges based upon expenditures or revenues resulting from 3 the purchase or sale of emission allowances created under the 4 federal Clean Air Act Amendments of 1990,as defined in5Section 8-402.1,through such fuel adjustment clauses, as a 6 cost of fuel. For the purposes of this paragraph, cost of 7 fuel used in the generation or production of electric power 8 shall include the amount of any fees paid by the utility for 9 the implementation and operation of a process for the 10 desulfurization of the flue gas when burning high sulfur coal 11 at any location within the State of Illinois irrespective of 12 the attainment status designation of such location, except13for any fees or costs related to a service contract which is14part of a utility's Clean Air Act compliance plan approved15pursuant to Section 8-402.1, to the extent that recovery of16comparable costs would not be permitted under this Section if17incurred directly by a utility owning and operating such a18facility; but shall not include transportation costs of coal 19 (i) except to the extent that for contracts entered into on 20 and after the effective date of this amendatory Act of 1997, 21 the cost of the coal, including transportation costs, 22 constitutes the lowest cost for adequate and reliable fuel 23 supply reasonably available to the public utility in 24 comparison to the cost, including transportation costs, of 25 other adequate and reliable sources of fuel supply reasonably 26 available to the public utility, or (ii) except as otherwise 27 provided in the next 3 sentences of this paragraph. Such 28 costs of fuel shall, when requested by a utility or at the 29 conclusion of the utility's next general electric rate 30 proceeding, whichever shall first occur, include 31 transportation costs of coal purchased under existing coal 32 purchase contracts. For purposes of this paragraph "existing 33 coal purchase contracts" means contracts for the purchase of 34 coal in effect on the effective date of this amendatory Act -160- SRS90HB0362JJsaam02 1 of 1991, as such contracts may thereafter be amended, but 2 only to the extent that any such amendment does not increase 3 the aggregate quantity of coal to be purchased under such 4 contract. Nothing herein shall authorize an electric utility 5 to recover through its fuel adjustment clause any amounts of 6 transportation costs of coal that were included in the 7 revenue requirement used to set base rates in its most recent 8 general rate proceeding. Cost shall be based upon uniformly 9 applied accounting principles. Annually, the Commission shall 10 initiate public hearings to determine whether the clauses 11 reflect actual costs of fuel, gas, power, or coal 12 transportation purchased to determine whether such purchases 13 were prudent, and to reconcile any amounts collected with the 14 actual costs of fuel, power, gas, or coal transportation 15 prudently purchased. In each such proceeding, the burden of 16 proof shall be upon the utility to establish the prudence 17prudencyof its cost of fuel, power, gas, or coal 18 transportation purchases and costs. The Commission shall 19 issue its final order in each such annual proceeding for an 20 electric utility by December 31 of the year immediately 21 following the year to which the proceeding pertains, 22 provided, that the Commission shall issue its final order 23 with respect to such annual proceeding for the years 1996 and 24 earlier by December 31, 1998. 25 (b) A public utility providing electric service, other 26 than a public utility described in subsections (e) or (f) of 27 this Section, may at any time during the mandatory transition 28 period file with the Commission proposed tariff sheets that 29 eliminate the public utility's fuel adjustment clause and 30 adjust the public utility's base rate tariffs by the amount 31 necessary for the base fuel component of the base rates to 32 recover the public utility's average fuel and power supply 33 costs per kilowatt-hour for the 2 most recent years for which 34 the Commission has issued final orders in annual proceedings -161- SRS90HB0362JJsaam02 1 pursuant to subsection (a), where the average fuel and power 2 supply costs per kilowatt-hour shall be calculated as the sum 3 of the public utility's prudent and allowable fuel and power 4 supply costs as found by the Commission in the 2 proceedings 5 divided by the public utility's actual jurisdictional 6 kilowatt-hour sales for those 2 years. Notwithstanding any 7 contrary or inconsistent provisions in Section 9-201 of this 8 Act, in subsection (a) of this Section or in any rules or 9 regulations promulgated by the Commission pursuant to 10 subsection (g) of this Section, the Commission shall review 11 and shall by order approve, or approve as modified, the 12 proposed tariff sheets within 60 days after the date of the 13 public utility's filing. The Commission may modify the 14 public utility's proposed tariff sheets only to the extent 15 the Commission finds necessary to achieve conformance to the 16 requirements of this subsection (b). During the 5 years 17 following the date of the Commission's order, but in any 18 event no earlier than January 1, 2005, a public utility whose 19 fuel adjustment clause has been eliminated pursuant to this 20 subsection shall not file proposed tariff sheets seeking, or 21 otherwise petition the Commission for, reinstatement of a 22 fuel adjustment clause. 23 (c) Notwithstanding any contrary or inconsistent 24 provisions in Section 9-201 of this Act, in subsection (a) of 25 this Section or in any rules or regulations promulgated by 26 the Commission pursuant to subsection (g) of this Section, a 27 public utility providing electric service, other than a 28 public utility described in subsection (e) or (f) of this 29 Section, may at any time during the mandatory transition 30 period file with the Commission proposed tariff sheets that 31 establish the rate per kilowatt-hour to be applied pursuant 32 to the public utility's fuel adjustment clause at the average 33 value for such rate during the preceding 24 months, provided 34 that such average rate results in a credit to customers' -162- SRS90HB0362JJsaam02 1 bills, without making any revisions to the public utility's 2 base rate tariffs. The proposed tariff sheets shall 3 establish the fuel adjustment rate for a specific time period 4 of at least 3 years but not more than 5 years, provided that 5 the terms and conditions for any reinstatement earlier than 5 6 years shall be set forth in the proposed tariff sheets and 7 subject to modification or approval by the Commission. The 8 Commission shall review and shall by order approve the 9 proposed tariff sheets if it finds that the requirements of 10 this subsection are met. The Commission shall not conduct 11 the annual hearings specified in the last 3 sentences of 12 subsection (a) of this Section for the utility for the period 13 that the factor established pursuant to this subsection is in 14 effect. 15 (d) A public utility providing electric service, or a 16 public utility providing gas service may file with the 17 Commission proposed tariff sheets that eliminate the public 18 utility's fuel or purchased gas adjustment clause and adjust 19 the public utility's base rate tariffs to provide for 20 recovery of power supply costs or gas supply costs that would 21 have been recovered through such clause; provided, that the 22 provisions of this subsection (d) shall not be available to a 23 public utility described in subsections (e) or (f) of this 24 Section to eliminate its fuel adjustment clause. 25 Notwithstanding any contrary or inconsistent provisions in 26 Section 9-201 of this Act, in subsection (a) of this Section, 27 or in any rules or regulations promulgated by the Commission 28 pursuant to subsection (g) of this Section, the Commission 29 shall review and shall by order approve, or approve as 30 modified in the Commission's order, the proposed tariff 31 sheets within 240 days after the date of the public utility's 32 filing. The Commission's order shall approve rates and 33 charges that the Commission, based on information in the 34 public utility's filing or on the record if a hearing is held -163- SRS90HB0362JJsaam02 1 by the Commission, finds will recover the reasonable, prudent 2 and necessary jurisdictional power supply costs or gas supply 3 costs incurred or to be incurred by the public utility during 4 a 12 month period found by the Commission to be appropriate 5 for these purposes, provided, that such period shall be 6 either (i) a 12 month historical period occurring during the 7 15 months ending on the date of the public utility's filing, 8 or (ii) a 12 month future period ending no later than 15 9 months following the date of the public utility's filing. 10 The public utility shall include with its tariff filing 11 information showing both (1) its actual jurisdictional power 12 supply costs or gas supply costs for a 12 month historical 13 period conforming to (i) above and (2) its projected 14 jurisdictional power supply costs or gas supply costs for a 15 future 12 month period conforming to (ii) above. If the 16 Commission's order requires modifications in the tariff 17 sheets filed by the public utility, the public utility shall 18 have 7 days following the date of the order to notify the 19 Commission whether the public utility will implement the 20 modified tariffs or elect to continue its fuel or purchased 21 gas adjustment clause in force as though no order had been 22 entered. The Commission's order shall provide for any 23 reconciliation of power supply costs or gas supply costs, as 24 the case may be, and associated revenues through the date 25 that the public utility's fuel or purchased gas adjustment 26 clause is eliminated. During the 5 years following the date 27 of the Commission's order, a public utility whose fuel or 28 purchased gas adjustment clause has been eliminated pursuant 29 to this subsection shall not file proposed tariff sheets 30 seeking, or otherwise petition the Commission for, 31 reinstatement or adoption of a fuel or purchased gas 32 adjustment clause. Nothing in this subsection (d) shall be 33 construed as limiting the Commission's authority to eliminate 34 a public utility's fuel adjustment clause or purchased gas -164- SRS90HB0362JJsaam02 1 adjustment clause in accordance with any other applicable 2 provisions of this Act. 3 (e) Notwithstanding any contrary or inconsistent 4 provisions in Section 9-201 of this Act, in subsection (a) 5 of this Section, or in any rules promulgated by the 6 Commission pursuant to subsection (g) of this Section, a 7 public utility providing electric service to more than 8 1,000,000 customers in this State may, within the first 6 9 months after the effective date of this amendatory Act of 10 1997, file with the Commission proposed tariff sheets that 11 eliminate, effective January 1, 1997, the public utility's 12 fuel adjustment clause without adjusting its base rates, and 13 such tariff sheets shall be effective upon filing. To the 14 extent the application of the fuel adjustment clause had 15 resulted in net charges to customers after January 1, 1997, 16 the utility shall also file a tariff sheet that provides for 17 a refund stated on a per kilowatt-hour basis of such charges 18 over a period not to exceed 6 months; provided however, that 19 such refund shall not include the proportional amounts of 20 taxes paid under the Use Tax Act, Service Use Tax Act, 21 Service Occupation Tax Act, and Retailers' Occupation Tax Act 22 on fuel used in generation. The Commission shall issue an 23 order within 45 days after the date of the public utility's 24 filing approving or approving as modified such tariff sheet. 25 If the fuel adjustment clause is eliminated pursuant to this 26 subsection, the Commission shall not conduct the annual 27 hearings specified in the last 3 sentences of subsection (a) 28 of this Section for the utility for any period after 29 December 31, 1996 and prior to any reinstatement of such 30 clause. A public utility whose fuel adjustment clause has 31 been eliminated pursuant to this subsection shall not file a 32 proposed tariff sheet seeking, or otherwise petition the 33 Commission for, reinstatement of the fuel adjustment clause 34 prior to January 1, 2005. -165- SRS90HB0362JJsaam02 1 (f) Notwithstanding any contrary or inconsistent 2 provisions in Section 9-201 of this Act, in subsection (a) of 3 this Section, or in any rules or regulations promulgated by 4 the Commission pursuant to subsection (g) of this Section, a 5 public utility providing electric service to more than 6 500,000 customers but fewer than 1,000,000 customers in this 7 State may, within the first 6 months after the effective date 8 of this amendatory Act of 1997, file with the Commission 9 proposed tariff sheets that eliminate, effective January 1, 10 1997, the public utility's fuel adjustment clause and adjust 11 its base rates by the amount necessary for the base fuel 12 component of the base rates to recover 91% of the public 13 utility's average fuel and power supply costs for the 2 most 14 recent years for which the Commission, as of January 1, 1997, 15 has issued final orders in annual proceedings pursuant to 16 subsection (a), where the average fuel and power supply costs 17 per kilowatt-hour shall be calculated as the sum of the 18 public utility's prudent and allowable fuel and power supply 19 costs as found by the Commission in the 2 proceedings divided 20 by the public utility's actual jurisdictional kilowatt-hour 21 sales for those 2 years, provided, that such tariff sheets 22 shall be effective upon filing. To the extent the 23 application of the fuel adjustment clause had resulted in net 24 charges to customers after January 1, 1997, the utility shall 25 also file a tariff sheet that provides for a refund stated on 26 a per kilowatt-hour basis of such charges over a period not 27 to exceed 6 months. Provided however, that such refund shall 28 not include the proportional amounts of taxes paid under the 29 Use Tax Act, Service Use Tax Act, Service Occupation Tax Act, 30 and Retailers' Occupation Tax Act on fuel used in generation. 31 The Commission shall issue an order within 45 days after the 32 date of the public utility's filing approving or approving as 33 modified such tariff sheet. If the fuel adjustment clause is 34 eliminated pursuant to this subsection, the Commission shall -166- SRS90HB0362JJsaam02 1 not conduct the annual hearings specified in the last 3 2 sentences of subsection (a) of this Section for the utility 3 for any period after December 31, 1996 and prior to any 4 reinstatement of such clause. A public utility whose fuel 5 adjustment clause has been eliminated pursuant to this 6 subsection shall not file a proposed tariff sheet seeking, or 7 otherwise petition the Commission for, reinstatement of the 8 fuel adjustment clause prior to January 1, 2005. 9 (g) The Commission shall have authority to promulgate 10 rules and regulations to carry out the provisions of this 11 Sectionparagraph. 12 (Source: P.A. 87-173; 88-488.) 13 (220 ILCS 5/9-244) (from Ch. 111 2/3, par. 9-244) 14 Sec. 9-244. Alternative rate regulation. 15 (a) Notwithstanding any of the ratemaking provisions of 16 this Article IX or other Sections of this Act, or the 17 Commission's rules that are deemed to require rate of return 18 regulation, and except as provided in Article XVI, the 19 Commission, upon petition by an electric or gas public 20 utility, and after notice and hearing, may authorize for some 21 or all of the regulated services of that utility, the 22 implementation of one or more programs consisting of (i) 23 alternatives to rate of return regulation, including but not 24 limited to earnings sharing, rate moratoria, price caps or 25 flexible rate options, or (ii) other regulatory mechanisms 26 that reward or penalize the utility through the adjustment of 27 rates based on utility performance. In the case of other 28 regulatory mechanisms that reward or penalize utilities 29 through the adjustment of rates based on utility performance, 30 the utility's performance shall be compared to standards 31 established in the Commission order authorizing the 32 implementation of other regulatory mechanisms. The 33 Commission is specifically authorized to approve in response -167- SRS90HB0362JJsaam02 1 to such petitions different forms of alternatives to rate of 2 return regulation or other regulatory mechanisms to fit the 3 particular characteristics and requirements of different 4 utilities and their service territories. 5 (b) The Commission shall approve the program if it 6 finds, based on the record, that: 7 (1) the program is likely to result in rates lower 8 than otherwise would have been in effect under 9 traditional rate of return regulation for the services 10 covered by the program and that are consistent with the 11 provisions of Section 9-241 of the Act; and 12 (2) the program is likely to result in other 13 substantial and identifiable benefits that would be 14 realized by customers served under the program and that 15 would not be realized in the absence of the program; and 16 (3) the utility is in compliance with applicable 17 Commission standards for reliability and implementation 18 of the program is not likely to adversely affect service 19 reliability; and 20 (4) implementation of the program is not likely to 21 result in deterioration of the utility's financial 22 condition; and 23 (5) implementation of the program is not likely to 24 adversely affect the development of competitive markets; 25 and 26 (6) the electric utility is in compliance with its 27 obligation to offer delivery services pursuant to Article 28 XVI; and 29 (7) the program includes annual reporting 30 requirements and other provisions that will enable the 31 Commission to adequately monitor its implementation of 32 the program; and 33 (8) the program includes provisions for an 34 equitable sharing of any net economic benefits between -168- SRS90HB0362JJsaam02 1 the utility and its customers to the extent the program 2 is likely to result in such benefits. 3 The Commission shall issue its order approving or denying 4 the program no later than 270 days from the date of filing of 5 the petition. Any program approved under this Section shall 6 continue in effect until revised, modified or terminated by 7 order of the Commission as provided in this Section. If the 8 Commission cannot make the above findings, it shall 9 specifically identify in its order the reason or reasons why 10 the proposed program does not meet the above criteria, and 11 shall identify any modifications supported in the record, if 12 any, that would cause the program to satisfy the above 13 criteria. In the event the order identifies any such 14 modifications it shall not become a final order subject to 15 petitions for rehearing until 15 days after service of same 16 by the Commission. The utility shall have 14 days following 17 the date of service of the order to notify the Commission in 18 writing whether it will accept any modifications so 19 identified in the order or whether it has elected not to 20 proceed with the program. If the utility notifies the 21 Commission that it will accept such modifications, the 22 Commission shall issue an amended order, without further 23 hearing, within 14 days following such notification, 24 approving the program as modified and such order shall be 25 considered to be a final order of the Commission subject to 26 petitions for rehearing and appellate procedures. 27 (c) The Commission shall open a proceeding to review any 28 program approved under subsection (b) 2 years after the 29 program is first implemented to determine whether the program 30 is meeting its objectives, and may make such revisions, no 31 later than 270 days after the proceeding is opened, as are 32 necessary to result in the program meeting its objectives. A 33 utility may elect to discontinue any program so revised. The 34 Commission shall not otherwise direct a utility to revise, -169- SRS90HB0362JJsaam02 1 modify or cancel a program during its term of operation, 2 except as found necessary, after notice and hearing, to 3 ensure system reliability. 4 (d) Upon its own motion or complaint, the Commission may 5 investigate whether the utility is implementing an approved 6 program in accordance with the Commission order approving the 7 program. If the Commission finds after notice and hearing, 8 that the utility is not implementing the program in 9 accordance with such order, the Commission shall order the 10 utility to comply with the terms of the order. Complaints 11 relating to the program filed under Section 9-250 of this 12 Act, alleging that the program does not comply with that 13 Section or the requirements of subsection (b) shall not be 14 filed sooner than one year after the review provided for in 15 subsection (c). The complainant shall bear the burden of 16 proving the allegations in the complaint. 17 (e) The Commission shall not be authorized to allow or 18 order an electric utility to place a program into effect, 19 pursuant to this Section, applicable to delivery services 20 provided by a utility, unless the utility already has in 21 effect a delivery services tariff conforming to the 22 requirements of Section 16-108 of this Act. 23 (f) The Commission may, upon subsequent petition by the 24 utility, after notice and hearing, authorize the extension of 25 a program that was previously approved pursuant to this 26 Section or approve revisions or modifications of such a 27 program to be effective, after the initially approved program 28 has been in effect. Any such petition seeking an extension, 29 revision, or modification of such a program must be 30 accompanied by an evaluation of the program addressing the 31 criteria set forth in subsection (b) hereof. The utility's 32 petition may, but is not required to, specify a termination 33 date for the extended, revised or modified program. The 34 Commission may require a review of the extended, revised, or -170- SRS90HB0362JJsaam02 1 modified program at such intervals as may be ordered by the 2 Commission, for the purpose of determining whether the 3 program should be revised, modified, or terminated. 4Performance based rates. Notwithstanding any other Sections5of this Act or the Commission's rules, the Commission, upon6petition by a public utility and after hearing, may authorize7for that utility on an experimental basis, the implementation8of one or more programs consisting of (a) alternatives to9rate of return regulation or (b) other regulatory mechanisms10that reward or penalize utilities through the adjustment of11rates based on utility performance. In the case of other12regulatory mechanisms that reward or penalize utilities13through the adjustment of rates based on utility performance,14the utility's performance shall be compared to standards15established in the Commission order authorizing the16implementation of the other regulatory mechanisms. Before17authorizing the implementation of programs that are either18alternatives to rate of return regulation or other regulatory19mechanisms that reward or penalize utilities through the20adjustment of rates based on utility performance, the21Commission shall:22(1) make a finding that the implementation of such23programs is in the public interest;24(2) make a finding that the implementation of such25programs will produce fair, just, and reasonable rates,26consistent with the provisions of Section 9-241 of this27Act;28(3) where appropriate, make a finding that the29programs respond to changes in the utility's industry30that are in fact occurring;31(4) specifically identify how the programs'32departure from traditional rate of return rate making33principles will benefit ratepayers through the34realization of one or more of the following: efficiency-171- SRS90HB0362JJsaam02 1gains; cost savings; or improvements in productivity.2The Commission shall issue its order no later than 113months from the date of the filing of the petition. Any such4programs shall not extend beyond the public utility's service5territory and shall not extend beyond June 30, 2000. No later6than December 31, 2000, the Commission shall report to the7General Assembly, with appropriate legislative8recommendations.9 (Source: P.A. 89-194, eff. 1-1-96.) 10 (220 ILCS 5/10-113) (from Ch. 111 2/3, par. 10-113) 11 Sec. 10-113. Rescission or hearing of order. 12 (a) Anything in this Act to the contrary 13 notwithstanding, the Commission may at any time, upon notice 14 to the public utility affected, and after opportunity to be 15 heard as provided in the case of complaints, rescind, alter 16 or amend any rule, regulation, order or decision made by it. 17 Any order rescinding, altering or amending a prior rule, 18 regulation, order or decision shall, when served upon the 19 public utility affected, have the same effect as is herein 20 provided for original rules, regulations, orders or 21 decisions. Within 30 days after the service of any rule or 22 regulation, order or decision of the Commission any party to 23 the action or proceeding may apply for a rehearing in respect 24 to any matter determined in said action or proceeding and 25 specified in the application for rehearing. The Commission 26 shall receive and consider such application and shall grant 27 or deny such application in whole or in part within 20 days 28 from the date of the receipt thereof by the Commission. In 29 case the application for rehearing is granted in whole or in 30 part the Commission shall proceed as promptly as possible to 31 consider such rehearing as allowed. No appeal shall be 32 allowed from any rule, regulation, order or decision of the 33 Commission unless and until an application for a rehearing -172- SRS90HB0362JJsaam02 1 thereof shall first have been filed with and finally disposed 2 of by the Commission: provided, however, that in case the 3 Commission shall fail to grant or deny an application for a 4 rehearing in whole or in part within 20 days from the date of 5 the receipt thereof, or shall fail to enter a final order 6 upon rehearing within 150 days after such rehearing is 7 granted, the application for rehearing shall be deemed to 8 have been denied and finally disposed of, and an order to 9 that effect shall be deemed to have been served, for the 10 purpose of an appeal from the rule, regulation, order or 11 decision covered by such application. No person or 12 corporation in any appeal shall urge or rely upon any grounds 13 not set forth in such application for a rehearing before the 14 Commission. An application for rehearing shall not excuse any 15 corporation or person from complying with and obeying any 16 rule, regulation, order or decision or any requirement of any 17 rule, regulation, order or decision of the Commission 18 theretofore made, or operate in any manner to stay or 19 postpone the enforcement thereof, except in such cases and 20 upon such terms as the Commission may by order direct. If, 21 after such rehearing and consideration of all the facts, 22 including those arising since the making of the rule, 23 regulation, order or decision, the Commission shall be of the 24 opinion that the original rule, regulation, order or decision 25 or any part thereof is in any respect unjust or unwarranted, 26 or should be changed, the Commission may rescind, alter or 27 amend the same. A rule, regulation, order or decision made 28 after such rehearing, rescinding, altering or amending the 29 original rule, regulation, order or decision shall have the 30 same force and effect as an original rule, regulation, order 31 or decision, but shall not affect any right or the 32 enforcement of any right arising from or by virtue of the 33 original rule, regulation, order or decision unless so 34 ordered by the Commission. Only one rehearing shall be -173- SRS90HB0362JJsaam02 1 granted by the Commission; but this shall not be construed to 2 prevent any party from filing a petition setting up a new and 3 different state of facts after 2 years, and invoking the 4 action of the Commission thereon. 5 (b) Notwithstanding any contrary or inconsistent 6 provision in the Illinois Administrative Procedure Act, the 7 Commission may, in accordance with this Section, make a 8 change in a rule or regulation adopted or modified pursuant 9 to Section 5-40 of the Illinois Administrative Procedure Act, 10 upon consideration of an application for rehearing of the 11 Commission's order directing that the rule or regulation be 12 filed with the Secretary of State and published in the 13 Illinois Register pursuant to subsection (d) of Section 5-40. 14 The Commission shall provide the parties to the original 15 hearing in which the rule was adopted or modified no less 16 than 7 days notice to provide responses to the change the 17 Commission proposes to make. Any such change shall be based 18 upon evidence submitted in the record in the original hearing 19 or in the rehearing. If the Commission makes such a 20 substantive change in the rule or regulation pursuant to this 21 subsection, it shall provide notice of the amendment to the 22 rule or regulation to the Joint Committee on Administrative 23 Rules in accordance with subsection (c) of Section 5-40, and 24 shall thereafter comply with the requirements of subsection 25 (d) of Section 5-40 with respect to the rule or regulation as 26 amended. The running of the time period specified in 27 subsection (e) of Section 5-40 of the Illinois Administrative 28 Procedure Act for completing a rulemaking proceeding shall be 29 tolled for the period of time necessary for the Commission to 30 receive and consider an application for rehearing and to 31 conduct any proceedings on rehearing, provided, that such 32 tolling shall not serve to extend any of the time periods 33 provided for in subsection (a) of this Section. 34 (Source: P.A. 84-617.) -174- SRS90HB0362JJsaam02 1 Section 15.Except as otherwise provided in Section 602of this amendatory Act of 1997, iIf any provision added by 3 this amendatory Act of 1997 is held invalid, this entire 4 amendatory Act of 1997 shall be deemed invalid, and the 5 provisions of Section 1.31, "Severability", of the Statute on 6 Statutes are hereby expressly declared not applicable to this 7 amendatory Act of 1997; provided, however (i) that any 8 contracts entered into and performed, transactions completed, 9 orders issued, services provided, billings rendered, or 10 payments made in accordance with the provisions of this 11 amendatory Act of 1997, other than as provided in clause (ii) 12 below, prior to the date of the determination of such 13 invalidity, shall not thereby be rendered invalid; (ii) that 14 no presumption as to the validity or invalidity of any 15 contracts, transactions, orders, billings, or payments 16 pursuant to Article XVIII of the Public Utilities Act shall 17 result from a determination of invalidity of this amendatory 18 Act of 1997; and (iii) that the provisions of proviso (i) 19 shall not be deemed to preserve the validity of any executory 20 contracts or transactions, of any actions to be taken 21 pursuant to orders issued, or of any services to be 22 performed, billings to be rendered, or payments to be made, 23 pursuant to provisions of this amendatory Act of 1997 24 subsequent to the date of determination of such invalidity. 25 (220 ILCS 5/8-402 rep.) 26 (220 ILCS 5/8-402.1 rep.) 27 (220 ILCS 5/8-404 rep.) 28 Section 18. Sections 8-402, 8-402.1, and 8-404 of the 29 Public Utilities Act are hereby repealed. 30 ARTICLE 2 31 Section 2-1. Short title. This Article may be cited as -175- SRS90HB0362JJsaam02 1 the Electricity Excise Tax Law. 2 Section 2-2. Findings and intent. The General Assembly 3 finds that the deregulation and restructuring of the electric 4 utility industry in this State mandated and implemented by 5 this amendatory Act of 1997, including the unbundling of 6 services and the authorization of competition in the 7 provision of those services such that consumers may in the 8 future transact with multiple providers to obtain the 9 services that were formerly provided by a single franchised 10 monopoly supplier of electricity, renders the system of 11 taxation embodied in the Public Utilities Revenue Act 12 impracticable and infeasible. The General Assembly further 13 finds that the deregulation and restructuring of the electric 14 utility industry necessitate changes to the existing system 15 of taxation in order to preserve revenue neutrality in tax 16 collections for the State of Illinois, to avoid placing any 17 supplier engaged in the business of distributing, supplying, 18 furnishing, selling, transmitting or delivering electricity 19 at a competitive disadvantage, to minimize additional 20 administrative costs and burdens of collection, and to avoid 21 the imposition of increased tax burdens on individual 22 consumers of electricity, particularly residential electric 23 users virtually all of whom, pursuant to Section 2 of the 24 Public Utilities Revenue Act, presently bear the economic 25 burden of the tax imposed thereunder at the rate of .32 cents 26 per kilowatt-hour distributed, supplied, furnished, sold, 27 transmitted or delivered to them. The General Assembly 28 further finds that to change the current rates at which 29 non-residential users bear the economic burden of the Public 30 Utilities Revenue Tax, thereby resulting in increases in the 31 amount of tax for which non-residential users bear the 32 economic burden, could impose additional cost burdens on 33 businesses in this State and adversely affect economic -176- SRS90HB0362JJsaam02 1 development and business retention in Illinois unless such 2 users are provided options for paying an excise tax on the 3 basis of purchase price. The General Assembly therefore 4 finds that there is a compelling public need to modify the 5 system of taxation embodied in the Public Utilities Revenue 6 Act by repealing the tax imposed by Section 2 of that Act and 7 imposing this electricity excise tax so as to: 8 (1) Impose the electricity excise tax on the 9 privilege of electric use measured by the kilowatt-hours 10 delivered to the purchaser; 11 (2) As part of this amendatory Act of 1997, repeal 12 the tax imposed by Section 2-202 of the Public Utilities 13 Act as applicable to electric utilities and establish the 14 rates of tax imposed under the electricity excise tax in 15 order to collect substantially the same amount of revenue 16 as was collected under Section 2-202 of that Act; and 17 (3) Allow non-residential consumers of electricity 18 to elect to register with the Department of Revenue as 19 self-assessing purchasers and to pay the electricity 20 excise tax directly to the Department at a rate which is 21 established as a percentage of such consumer's purchase 22 price for electricity distributed, supplied, furnished, 23 sold, transmitted or delivered to the purchaser. 24 Section 2-3. Definitions. As used in this Law, unless 25 the context clearly requires otherwise: 26 (a) "Department" means the Department of Revenue of the 27 State of Illinois. 28 (b) "Director" means the Director of the Department of 29 Revenue of the State of Illinois. 30 (c) "Person" means any natural individual, firm, trust, 31 estate, partnership, association, joint stock company, joint 32 venture, corporation, limited liability company, or a 33 receiver, trustee, guardian, or other representative -177- SRS90HB0362JJsaam02 1 appointed by order of any court, or any city, town, village, 2 county, or other political subdivision of this State. 3 (d) "Purchase price" means the consideration paid for 4 the distribution, supply, furnishing, sale, transmission or 5 delivery of electricity to a person for non-residential use 6 or consumption (and for both residential and non-residential 7 use or consumption in the case of electricity purchased from 8 a municipal system or electric cooperative described in 9 subsection (b) of Section 2-4) and not for resale, and for 10 all services directly related to the production, transmission 11 or distribution of electricity distributed, supplied, 12 furnished, sold, transmitted or delivered for non-residential 13 use or consumption, and includes transition charges imposed 14 in accordance with Article XVI of the Public Utilities Act 15 and instrument funding charges imposed in accordance with 16 Article XVIII of the Public Utilities Act, as well as cash, 17 services and property of every kind or nature, and shall be 18 determined without any deduction on account of the cost of 19 the service, product or commodity supplied, the cost of 20 materials used, labor or service costs, or any other expense 21 whatsoever. However, "purchase price" shall not include 22 consideration paid for: 23 (i) any charge for a dishonored check; 24 (ii) any finance or credit charge, penalty or 25 charge for delayed payment, or discount for prompt 26 payment; 27 (iii) any charge for reconnection of service or for 28 replacement or relocation of facilities; 29 (iv) any advance or contribution in aid of 30 construction; 31 (v) repair, inspection or servicing of equipment 32 located on customer premises; 33 (vi) leasing or rental of equipment, the leasing or 34 rental of which is not necessary to furnishing, supplying -178- SRS90HB0362JJsaam02 1 or selling electricity; 2 (vii) any purchase by a purchaser if the supplier 3 is prohibited by federal or State constitution, treaty, 4 convention, statute or court decision from recovering the 5 related tax liability from such purchaser; and 6 (viii) any amounts added to purchasers' bills 7 because of charges made pursuant to the tax imposed by 8 this Law. 9 In case credit is extended, the amount thereof shall be 10 included only as and when payments are made. 11 "Purchase price" shall not include consideration received 12 from business enterprises certified under Section 9-222.1 of 13 the Public Utilities Act, as amended, to the extent of such 14 exemption and during the period of time specified by the 15 Department of Commerce and Community Affairs. 16 (e) "Purchaser" means any person who acquires 17 electricity for use or consumption and not for resale, for a 18 valuable consideration. 19 (f) "Non-residential electric use" means any use or 20 consumption of electricity which is not residential electric 21 use. 22 (g) "Residential electric use" means electricity used or 23 consumed at a dwelling of 2 or fewer units, or electricity 24 for household purposes used or consumed at a building with 25 multiple dwelling units where the electricity is registered 26 by a separate meter for each dwelling unit. 27 (h) "Self-assessing purchaser" means a purchaser for 28 non-residential electric use who elects to register with and 29 to pay tax directly to the Department in accordance with 30 Sections 2-10 and 2-11 of this Law. 31 (i) "Delivering supplier" means any person engaged in 32 the business of delivering electricity to persons for use or 33 consumption and not for resale and who, in any case where 34 more than one person participates in the delivery of -179- SRS90HB0362JJsaam02 1 electricity to a specific purchaser, is the last of the 2 suppliers engaged in delivering the electricity prior to its 3 receipt by the purchaser. 4 (j) "Delivering supplier maintaining a place of business 5 in this State", or any like term, means any delivering 6 supplier having or maintaining within this State, directly or 7 by a subsidiary, an office, generation facility, transmission 8 facility, distribution facility, sales office or other place 9 of business, or any employee, agent or other representative 10 operating within this State under the authority of such 11 delivering supplier or such delivering supplier's subsidiary, 12 irrespective of whether such place of business or agent or 13 other representative is located in this State permanently or 14 temporarily, or whether such delivering supplier or such 15 delivering supplier's subsidiary is licensed to do business 16 in this State. 17 (k) "Use" means the exercise by any person of any right 18 or power over electricity incident to the ownership of that 19 electricity, except that it does not include the generation, 20 production, transmission, distribution, delivery or sale of 21 electricity in the regular course of business or the use of 22 electricity for such purposes. 23 Section 2-4. Tax imposed. 24 (a) Except as provided in subsection (b), a tax is 25 imposed on the privilege of using in this State electricity 26 purchased for use or consumption and not for resale, other 27 than by municipal corporations owning and operating a local 28 transportation system for public service, at the following 29 rates per kilowatt-hour delivered to the purchaser: 30 (i) For the first 2000 kilowatt-hours used or consumed 31 in a month: 0.330 cents per kilowatt- hour; 32 (ii) For the next 48,000 kilowatt-hours used or consumed 33 in a month: 0.319 cents per kilowatt-hour; -180- SRS90HB0362JJsaam02 1 (iii) For the next 50,000 kilowatt-hours used or 2 consumed in a month: 0.303 cents per kilowatt-hour; 3 (iv) For the next 400,000 kilowatt-hours used or 4 consumed in a month: 0.297 cents per kilowatt-hour; 5 (v) For the next 500,000 kilowatt-hours used or consumed 6 in a month: 0.286 cents per kilowatt-hour; 7 (vi) For the next 2,000,000 kilowatt-hours used or 8 consumed in a month: 0.270 cents per kilowatt-hour; 9 (vii) For the next 2,000,000 kilowatt-hours used or 10 consumed in a month: 0.254 cents per kilowatt-hour; 11 (viii) For the next 5,000,000 kilowatt-hours used or 12 consumed in a month: 0.233 cents per kilowatt-hour; 13 (ix) For the next 10,000,000 kilowatt-hours used or 14 consumed in a month: 0.207 cents per kilowatt-hour; 15 (x) For all electricity in excess of 20,000,000 16 kilowatt-hours used or consumed in a month: 0.202 cents per 17 kilowatt-hour. 18 Provided, that in lieu of the foregoing rates, the tax is 19 imposed on a self-assessing purchaser at the rate of 5.1% of 20 the self-assessing purchaser's purchase price for all 21 electricity distributed, supplied, furnished, sold, 22 transmitted and delivered to the self-assessing purchaser in 23 a month. 24 (b) A tax is imposed on the privilege of using in this 25 State electricity purchased from a municipal system or 26 electric cooperative, as defined in Article XVII of the 27 Public Utilities Act, which has not made an election as 28 permitted by either Section 17-200 or Section 17-300 of such 29 Act, at the lesser of 0.32 cents per kilowatt hour of all 30 electricity distributed, supplied, furnished, sold, 31 transmitted, and delivered by such municipal system or 32 electric cooperative to the purchaser or 5% of each such 33 purchaser's purchase price for all electricity distributed, 34 supplied, furnished, sold, transmitted, and delivered by such -181- SRS90HB0362JJsaam02 1 municipal system or electric cooperative to the purchaser, 2 whichever is the lower rate as applied to each purchaser in 3 each billing period. 4 (c) The tax imposed by this Section 2-4 is not imposed 5 with respect to any use of electricity by business 6 enterprises certified under Section 9-222.1 of the Public 7 Utilities Act, as amended, to the extent of such exemption 8 and during the time specified by the Department of Commerce 9 and Community Affairs; or with respect to any transaction in 10 interstate commerce, or otherwise, to the extent to which 11 such transaction may not, under the Constitution and statutes 12 of the United States, be made the subject of taxation by this 13 State. 14 Section 2-5. Multistate exemption. To prevent actual 15 multi-state taxation of the privilege that is subject to 16 taxation under this Law, any purchaser, upon proof that 17 purchaser has paid a tax in another state on such event, 18 shall be allowed a credit against the tax imposed by this 19 Law, to the extent of the amount of the tax properly due and 20 paid in the other state. 21 Section 2-6. Sunset of exemptions, credits and 22 deductions. The application of every exemption, credit and 23 deduction against tax imposed by this Law, shall be limited 24 by a reasonable and appropriate sunset date. A purchaser 25 subject to the tax imposed by this Law is not entitled to 26 take the exemption, credit, or deduction beginning on the 27 sunset date and thereafter. If a reasonable and appropriate 28 sunset date is not specified in the Public Act that creates 29 the exemption, credit, or deduction, a purchaser shall not be 30 entitled to take the exemption, credit, or deduction 31 beginning 5 years after the effective date of the Public Act 32 creating the exemption, credit, or deduction and thereafter. -182- SRS90HB0362JJsaam02 1 The provisions of this Section shall not apply to the 2 exemption provided by Section 2-5 of this Law. 3 Section 2-7. Collection of electricity excise tax. The 4 tax imposed by this Law shall be collected from the 5 purchaser, other than a self-assessing purchaser who provides 6 a copy of an active certification described in Sections 2-10 7 and 2-10.5 of this Law, by any delivering supplier 8 maintaining a place of business in this State at the rates 9 stated in Section 2-4 with respect to the electricity 10 delivered by such delivering supplier to or for the 11 purchaser, and shall be remitted to the Department as 12 provided in Section 2-9 of this Law. All sales to a purchaser 13 are presumed subject to tax collection unless the purchaser 14 provides the delivering supplier with a copy of an active 15 certification described in Sections 2-10 and 2-10.5 of this 16 Law. Upon receipt of an active certification from a 17 purchaser, the delivering supplier is relieved of all 18 liability for the collection and remittance of tax from the 19 self-assessing purchaser who has provided the certification. 20 The delivering supplier is relieved of the liability for the 21 collection of the tax from a self-assessing purchaser until 22 such time as the delivering supplier is notified in writing 23 by the purchaser that the purchaser's certification as a 24 self-assessing purchaser is no longer in effect. Delivering 25 suppliers shall collect the tax from purchasers by adding the 26 tax to the amount of the purchase price received from the 27 purchaser for delivering electricity for or to the purchaser. 28 Where a delivering supplier does not collect the tax from a 29 purchaser, other than a self-assessing purchaser, as provided 30 herein, such purchaser shall pay the tax directly to the 31 Department. 32 Section 2-7.5. Registration of delivering suppliers. A -183- SRS90HB0362JJsaam02 1 person who engages in business as a delivering supplier of 2 electricity in this State shall register with the Department. 3 Application for a certificate of registration shall be made 4 to the Department upon forms furnished by the Department and 5 shall contain any reasonable information the Department may 6 require. Upon receipt of the application for a certificate 7 of registration in proper form, the Department shall issue 8 to the applicant a certificate of registration. 9 The Department may deny a certificate of registration to 10 any applicant if such applicant is in default for moneys 11 due under this Law. 12 Any person aggrieved by any decision of the Department 13 under this Section may, within 20 days after notice of such 14 decision, protest and request a hearing, whereupon the 15 Department shall give notice to such person of the time and 16 place fixed for such hearing and shall hold a hearing in 17 conformity with the provisions of this Law and then issue 18 its final administrative decision in the matter to such 19 person. In the absence of such a protest within 20 days, the 20 Department's decision shall become final without any further 21 determination being made or notice given. 22 Section 2-7.6. Revocation of certificate of registration. 23 The Department may, after notice and a hearing as provided 24 herein, revoke the certificate of registration of any person 25 who violates any of the provisions of this Law. Before 26 revocation of a certificate of registration, the Department 27 shall, within 90 days after non-compliance and at least 7 28 days prior to the date of the hearing, give the person so 29 accused notice in writing of the charge against him or her, 30 and on the date designated shall conduct a hearing upon this 31 matter. The lapse of such 90 day period shall not preclude 32 the Department from conducting revocation proceedings at a 33 later date if necessary. Any hearing held under this -184- SRS90HB0362JJsaam02 1 Section shall be conducted by the Director or by any officer 2 or employee of the Department designated in writing by the 3 Director. 4 Upon the hearing of any such proceeding, the Director or 5 any officer or employee of the Department designated in 6 writing by the Director may administer oaths, and the 7 Department may procure by its subpoena the attendance of 8 witnesses and, by its subpoena duces tecum, the production 9 of relevant books and papers. Any circuit court, upon 10 application either of the accused or of the Department, may, 11 by order duly entered, require the attendance of witnesses 12 and the production of relevant books and papers before the 13 Department in any hearing relating to the revocation of 14 certificates of registration. Upon refusal or neglect to 15 obey the order of the court, the court may compel obedience 16 thereof by proceedings for contempt. 17 The Department may, by application to any circuit court, 18 obtain an injunction requiring any person who engages in 19 business as a delivering supplier of electricity to obtain a 20 certificate of registration. Upon refusal or neglect to obey 21 the order of the court, the court may compel obedience by 22 proceedings for contempt. 23 Section 2-8. Tax collected as debt owed to State. The 24 tax herein required to be collected by any delivering 25 supplier maintaining a place of business in this State, and 26 any such tax collected by that person, shall constitute a 27 debt owed by that person to this State, provided, that the 28 delivering supplier shall be allowed credit for such tax 29 related to deliveries of electricity the charges for which 30 are written off as uncollectible, and provided further, that 31 if such charges are thereafter collected, the delivering 32 supplier shall be obligated to remit such tax. For purposes 33 of this Section, any partial payment not specifically -185- SRS90HB0362JJsaam02 1 identified by the purchaser shall be deemed to be for the 2 delivery of electricity. 3 Section 2-9. Return and payment of tax by delivering 4 supplier. Each delivering supplier who is required or 5 authorized to collect the tax imposed by this Law shall make 6 a return to the Department on or before the 15th day of each 7 month for the preceding calendar month stating the following: 8 (1) The delivering supplier's name. 9 (2) The address of the delivering supplier's principal 10 place of business and the address of the principal place of 11 business (if that is a different address) from which the 12 delivering supplier engaged in the business of delivering 13 electricity in this State. 14 (3) The total number of kilowatt-hours which the 15 supplier delivered to or for purchasers during the preceding 16 calendar month and upon the basis of which the tax is 17 imposed. 18 (4) Amount of tax, computed upon Item (3) at the rates 19 stated in Section 2-4. 20 (5) An adjustment for uncollectible amounts of tax in 21 respect of prior period kilowatt-hour deliveries, determined 22 in accordance with rules and regulations promulgated by the 23 Department. 24 (6) Such other information as the Department reasonably 25 may require. 26 In making such return the delivering supplier may use any 27 reasonable method to derive reportable "kilowatt-hours" from 28 the delivering supplier's records. 29 If the average monthly tax liability to the Department of 30 the delivering supplier does not exceed $2,500, the 31 Department may authorize the delivering supplier's returns to 32 be filed on a quarter-annual basis, with the return for 33 January, February and March of a given year being due by -186- SRS90HB0362JJsaam02 1 April 30 of such year; with the return for April, May and 2 June of a given year being due by July 31 of such year; with 3 the return for July, August and September of a given year 4 being due by October 31 of such year; and with the return for 5 October, November and December of a given year being due by 6 January 31 of the following year. 7 If the average monthly tax liability to the Department of 8 the delivering supplier does not exceed $1,000, the 9 Department may authorize the delivering supplier's returns to 10 be filed on an annual basis, with the return for a given year 11 being due by January 31 of the following year. 12 Such quarter-annual and annual returns, as to form and 13 substance, shall be subject to the same requirements as 14 monthly returns. 15 Notwithstanding any other provision in this Law 16 concerning the time within which a delivering supplier may 17 file a return, any such delivering supplier who ceases to 18 engage in a kind of business which makes the person 19 responsible for filing returns under this Law shall file a 20 final return under this Law with the Department not more than 21 one month after discontinuing such business. 22 Each delivering supplier whose average monthly liability 23 to the Department under this Law was $10,000 or more during 24 the preceding calendar year, excluding the month of highest 25 liability and the month of lowest liability in such calendar 26 year, and who is not operated by a unit of local government, 27 shall make estimated payments to the Department on or before 28 the 7th, 15th, 22nd and last day of the month during which 29 tax liability to the Department is incurred in an amount not 30 less than the lower of either 22.5% of such delivering 31 supplier's actual tax liability for the month or 25% of such 32 delivering supplier's actual tax liability for the same 33 calendar month of the preceding year. The amount of such 34 quarter-monthly payments shall be credited against the final -187- SRS90HB0362JJsaam02 1 tax liability of such delivering supplier's return for that 2 month. An outstanding credit approved by the Department or a 3 credit memorandum issued by the Department arising from such 4 delivering supplier's overpayment of his or her final tax 5 liability for any month may be applied to reduce the amount 6 of any subsequent quarter-monthly payment or credited against 7 the final tax liability of such delivering supplier's return 8 for any subsequent month. If any quarter-monthly payment is 9 not paid at the time or in the amount required by this 10 Section, such delivering supplier shall be liable for penalty 11 and interest on the difference between the minimum amount due 12 as a payment and the amount of such payment actually and 13 timely paid, except insofar as such delivering supplier has 14 previously made payments for that month to the Department in 15 excess of the minimum payments previously due. 16 If the Director finds that the information required for 17 the making of an accurate return cannot reasonably be 18 compiled by such delivering supplier within 15 days after the 19 close of the calendar month for which a return is to be made, 20 the Director may grant an extension of time for the filing of 21 such return for a period not to exceed 31 calendar days. The 22 granting of such an extension may be conditioned upon the 23 deposit by such delivering supplier with the Department of an 24 amount of money not exceeding the amount estimated by the 25 Director to be due with the return so extended. All such 26 deposits shall be credited against such delivering supplier's 27 liabilities under this Law. If the deposit exceeds such 28 delivering supplier's present and probable future liabilities 29 under this Law, the Department shall issue to such delivering 30 supplier a credit memorandum, which may be assigned by such 31 delivering supplier to a similar person under this Law, in 32 accordance with reasonable rules and regulations to be 33 prescribed by the Department. 34 The delivering supplier making the return provided for in -188- SRS90HB0362JJsaam02 1 this Section shall, at the time of making such return, pay to 2 the Department the amount of tax imposed by this Law. 3 A delivering supplier who has an average monthly tax 4 liability of $10,000 or more shall make all payments 5 required by rules of the Department by electronic funds 6 transfer. The term "average monthly tax liability" shall be 7 the sum of the delivering supplier's liabilities under this 8 Law for the immediately preceding calendar year divided by 9 12. Any delivering supplier not required to make payments 10 by electronic funds transfer may make payments by electronic 11 funds transfer with the permission of the Department. All 12 delivering suppliers required to make payments by electronic 13 funds transfer and any delivering suppliers authorized to 14 voluntarily make payments by electronic funds transfer shall 15 make those payments in the manner authorized by the 16 Department. 17 Each month the Department shall pay into the Public 18 Utility Fund in the State treasury an amount determined by 19 the Director to be equal to 3.0% of the funds received by the 20 Department pursuant to this Section. The remainder of all 21 moneys received by the Department under this Section shall be 22 paid into the General Revenue Fund in the State treasury. 23 Section 2-10. Election to be self-assessing purchaser. 24 Any purchaser for non-residential electric use may elect to 25 register with the Department as a self-assessing purchaser 26 and to pay the tax imposed by Section 2-4 directly to the 27 Department, at the rate stated in that Section for 28 self-assessing purchasers, rather than paying the tax to such 29 purchaser's delivering supplier. The election by a purchaser 30 to register as a self-assessing purchaser may not be revoked 31 by the purchaser for at least 12 months thereafter. A 32 purchaser who revokes his or her registration as a 33 self-assessing purchaser shall not thereafter be permitted to -189- SRS90HB0362JJsaam02 1 register as a self-assessing purchaser within the succeeding 2 12 months. A self-assessing purchaser shall renew his or her 3 registration every 12 months, or the registration shall be 4 deemed to be revoked. 5 Section 2-10.5. Registration of self-assessing 6 purchaser. Application for a certificate of registration as 7 a self-assessing purchaser shall be made to the Department 8 upon forms furnished by the Department and shall contain any 9 reasonable information the Department may require. Upon 10 receipt of the application for a certificate of registration 11 in proper form and payment of a bi-annual renewal fee not to 12 exceed $200, the Department shall issue to the applicant a 13 certificate of registration that permits the person to whom 14 it was issued to pay the tax incurred under this Law 15 directly to the Department for a period of 2 years. A 16 certificate of registration under this Section shall 17 automatically be renewed, subject to revocation as provided 18 by this Law, for additional 2-year periods from the date of 19 its expiration unless otherwise notified by the Department. 20 Upon the expiration or revocation of a certificate of 21 registration as a self-assessing purchaser, the person to 22 whom such certificate had been issued shall provide written 23 notice of the expiration or revocation of the certificate to 24 that person's delivering supplier or suppliers. 25 The Department may deny a certificate of registration to 26 any applicant if the owner, any partner, any manager or 27 member of a limited liability company, or a corporate 28 officer of the applicant, is or has been the owner, a 29 partner, a manager or member of a limited liability company, 30 or a corporate officer, of another self-assessing purchaser 31 that is in default for moneys due under this Law. 32 Any person aggrieved by any decision of the Department 33 under this Section may, within 20 days after notice of such -190- SRS90HB0362JJsaam02 1 decision, protest and request a hearing, whereupon the 2 Department shall give notice to such person of the time and 3 place fixed for such hearing and shall hold a hearing in 4 conformity with the provisions of this Law and then issue 5 its final administrative decision in the matter to such 6 person. In the absence of such a protest within 20 days, the 7 Department's decision shall become final without any further 8 determination being made or notice given. 9 Section 2-10.6. Revocation of certificate of 10 registration. The Department may, after notice and a 11 hearing as provided herein, revoke the certificate of 12 registration of any person who violates any of the 13 provisions of this Law. Before revocation of a certificate 14 of registration the Department shall, within 90 days after 15 non-compliance and at least 7 days prior to the date of the 16 hearing, give the person so accused notice in writing of the 17 charge against him or her, and on the date designated shall 18 conduct a hearing upon this matter. The lapse of such 90 19 day period shall not preclude the Department from conducting 20 revocation proceedings at a later date if necessary. Any 21 hearing held under this Section shall be conducted by the 22 Director of Revenue or by any officer or employee of the 23 Department designated, in writing, by the Director of 24 Revenue. 25 Upon the hearing of any such proceeding, the Director of 26 Revenue, or any officer or employee of the Department 27 designated, in writing, by the Director of Revenue, may 28 administer oaths, and the Department may procure by its 29 subpoena the attendance of witnesses and, by its subpoena 30 duces tecum, the production of relevant books and papers. 31 Any circuit court, upon application either of the accused or 32 of the Department, may, by order duly entered, require the 33 attendance of witnesses and the production of relevant books -191- SRS90HB0362JJsaam02 1 and papers, before the Department in any hearing relating to 2 the revocation of certificates of registration. Upon refusal 3 or neglect to obey the order of the court, the court may 4 compel obedience thereof by proceedings for contempt. 5 Section 2-11. Direct return and payment by 6 self-assessing purchaser. When electricity is used or 7 consumed by a self-assessing purchaser subject to the tax 8 imposed by this Law who did not pay the tax to a delivering 9 supplier maintaining a place of business within this State 10 and required or authorized to collect the tax, that 11 self-assessing purchaser shall, on or before the 15th day of 12 each month, make a return to the Department for the preceding 13 calendar month, stating all of the following: 14 (1) The self-assessing purchaser's name and 15 principal address. 16 (2) The aggregate purchase price paid by the 17 self-assessing purchaser for the distribution, supply, 18 furnishing, sale, transmission and delivery of such 19 electricity to or for the purchaser during the preceding 20 calendar month, including budget plan and other 21 purchaser-owned amounts applied during such month in 22 payment of charges includible in the purchase price, and 23 upon the basis of which the tax is imposed. 24 (3) Amount of tax, computed upon Item 2 at the rate 25 stated in Section 2-4. 26 (4) Such other information as the Department 27 reasonably may require. 28 In making such return the self-assessing purchaser may 29 use any reasonable method to derive reportable "purchase 30 price" from the self-assessing purchaser's records. 31 If the average monthly tax liability of the 32 self-assessing purchaser to the Department does not exceed 33 $2,500, the Department may authorize the self-assessing -192- SRS90HB0362JJsaam02 1 purchaser's returns to be filed on a quarter-annual basis, 2 with the return for January, February and March of a given 3 year being due by April 30 of such year; with the return for 4 April, May and June of a given year being due by July 31 of 5 such year; with the return for July, August, and September of 6 a given year being due by October 31 of such year; and with 7 the return for October, November and December of a given year 8 being due by January 31 of the following year. 9 If the average monthly tax liability of the 10 self-assessing purchaser to the Department does not exceed 11 $1,000, the Department may authorize the self-assessing 12 purchaser's returns to be filed on an annual basis, with the 13 return for a given year being due by January 31 of the 14 following year. 15 Such quarter-annual and annual returns, as to form and 16 substance, shall be subject to the same requirements as 17 monthly returns. 18 Notwithstanding any other provision in this Law 19 concerning the time within which a self-assessing purchaser 20 may file a return, any such self-assessing purchaser who 21 ceases to be responsible for filing returns under this Law 22 shall file a final return under this Law with the Department 23 not more than one month thereafter. 24 Each self-assessing purchaser whose average monthly 25 liability to the Department pursuant to this Section was 26 $10,000 or more during the preceding calendar year, excluding 27 the month of highest liability and the month of lowest 28 liability during such calendar year, and which is not 29 operated by a unit of local government, shall make estimated 30 payments to the Department on or before the 7th, 15th, 22nd 31 and last day of the month during which tax liability to the 32 Department is incurred in an amount not less than the lower 33 of either 22.5% of such self-assessing purchaser's actual tax 34 liability for the month or 25% of such self-assessing -193- SRS90HB0362JJsaam02 1 purchaser's actual tax liability for the same calendar month 2 of the preceding year. The amount of such quarter-monthly 3 payments shall be credited against the final tax liability of 4 the self-assessing purchaser's return for that month. An 5 outstanding credit approved by the Department or a credit 6 memorandum issued by the Department arising from the 7 self-assessing purchaser's overpayment of the self-assessing 8 purchaser's final tax liability for any month may be applied 9 to reduce the amount of any subsequent quarter-monthly 10 payment or credited against the final tax liability of such 11 self-assessing purchaser's return for any subsequent month. 12 If any quarter-monthly payment is not paid at the time or in 13 the amount required by this Section, such person shall be 14 liable for penalty and interest on the difference between the 15 minimum amount due as a payment and the amount of such 16 payment actually and timely paid, except insofar as such 17 person has previously made payments for that month to the 18 Department in excess of the minimum payments previously due. 19 If the Director finds that the information required for 20 the making of an accurate return cannot reasonably be 21 compiled by a self-assessing purchaser within 15 days after 22 the close of the calendar month for which a return is to be 23 made, the Director may grant an extension of time for the 24 filing of such return for a period of not to exceed 31 25 calendar days. The granting of such an extension may be 26 conditioned upon the deposit by such self-assessing purchaser 27 with the Department of an amount of money not exceeding the 28 amount estimated by the Director to be due with the return so 29 extended. All such deposits shall be credited against such 30 self-assessing purchaser's liabilities under this Law. If 31 the deposit exceeds such self-assessing purchaser's present 32 and probable future liabilities under this Law, the 33 Department shall issue to such self-assessing purchaser a 34 credit memorandum, which may be assigned by such -194- SRS90HB0362JJsaam02 1 self-assessing purchaser to a similar person under this Law, 2 in accordance with reasonable rules and regulations to be 3 prescribed by the Department. 4 The self-assessing purchaser making the return provided 5 for in this Section shall, at the time of making such return, 6 pay to the Department the amount of tax imposed by this Law. 7 A self-assessing purchaser who has an average monthly tax 8 liability of $10,000 or more shall make all payments 9 required by rules of the Department by electronic funds 10 transfer. The term "average monthly tax liability" shall be 11 the sum of the self-assessing purchaser's liabilities under 12 this Law for the immediately preceding calendar year divided 13 by 12. Any self-assessing purchaser not required to make 14 payments by electronic funds transfer may make payments by 15 electronic funds transfer with the permission of the 16 Department. All self-assessing purchasers required to make 17 payments by electronic funds transfer and any self-assessing 18 purchasers authorized to voluntarily make payments by 19 electronic funds transfer shall make those payments in the 20 manner authorized by the Department. 21 Each month the Department shall pay into the Public 22 Utility Fund in the State treasury an amount determined by 23 the Director to be equal to 3.0% of the funds received by the 24 Department pursuant to this Section. The remainder of all 25 moneys received by the Department under this Section shall be 26 paid into the General Revenue Fund in the State treasury. 27 Section 2-12. Applicability of Retailers' Occupation Tax 28 Act, Public Utilities Revenue Act and Uniform Penalty and 29 Interest Act. The Department shall have full power to 30 administer and enforce this Law; to collect all taxes, 31 penalties and interest due hereunder; to dispose of taxes, 32 penalties and interest so collected in the manner herein 33 provided; and to determine all rights to credit memoranda or -195- SRS90HB0362JJsaam02 1 refunds arising on account of the erroneous payment of tax, 2 penalty or interest hereunder. 3 All of the provisions of Sections 4 (except that the time 4 limitation provisions shall run from the date when the tax is 5 due rather than from the date when gross receipts are 6 received), 5 (except that the time limitation provisions on 7 the issuances of notices of tax liability shall run from the 8 date when the tax is due rather than from the date when gross 9 receipts are received and except that in the case of a 10 failure to file a return required by this Law, no notice of 11 tax liability shall be issued on and after each July 1 and 12 January 1 covering tax due with that return during any month 13 or period more than 6 years before that July 1 or January 1, 14 respectively, and except that the 30% penalty provided for in 15 Section 5 shall not apply), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i 16 and 5j of the Retailers' Occupation Tax Act, and Sections 6, 17 8, 9, 10 and 11 of the Public Utilities Revenue Act, which 18 are not inconsistent with this Law, and the Uniform Penalty 19 and Interest Act shall apply, as far as practicable, to the 20 subject matter of this Law to the same extent as if such 21 provisions were included herein. References in such 22 incorporated Sections of the Retailers' Occupation Tax Act 23 and Public Utilities Revenue Act and to taxpayers and to 24 persons engaged in the business of selling tangible personal 25 property at retail means both purchasers and delivering 26 suppliers maintaining a place of business in this State, as 27 required by the particular context, when used in this Law. 28 References in such incorporated Sections of the Retailers' 29 Occupation Tax Act and Public Utilities Revenue Act to gross 30 receipts and to gross receipts received means purchase price 31 or kilowatt-hours used or consumed by the purchaser, as 32 required by the particular context. 33 Section 2-13. Inspection of books and records. Every -196- SRS90HB0362JJsaam02 1 delivering supplier maintaining a place of business in this 2 State who is obligated to collect and remit the tax imposed 3 on a purchaser by this Law, and every self-assessing 4 purchaser who is obligated to pay the tax imposed by this Law 5 directly to the Department, shall keep books, records, 6 papers and other documents which are adequate to reflect the 7 information which such supplier or such self-assessing 8 purchaser, as the case may be, is required by Section 2-9 or 9 Section 2-11 of this Law to report to the Department by 10 filing returns with the Department. All books and records 11 and other papers and documents required by this Law to be 12 kept shall be kept in the English language and shall, at all 13 times during business hours of the day, be subject to 14 inspection by the Department or its duly authorized agents 15 and employees. Books and records reflecting purchase price 16 paid and kilowatt-hours delivered, used or consumed during 17 any period with respect to which the Department is authorized 18 to establish liability as provided in Section 2-12 of this 19 Law shall be preserved until the expiration of such period 20 unless the Department, in writing, authorizes their 21 destruction or disposal at an earlier date. 22 The Department may, upon written authorization of the 23 Director, destroy any returns or any records, papers or 24 memoranda pertaining to such returns upon the expiration of 25 any period covered by such returns with respect to which the 26 Department is authorized to establish liability. 27 Section 2-14. Rules and regulations; hearing; review 28 under Administrative Review Law; death or incompetency of 29 party. The Department may make, promulgate and enforce such 30 reasonable rules and regulations relating to the 31 administration and enforcement of this Law as may be deemed 32 expedient. 33 Whenever notice to a purchaser or to a delivering -197- SRS90HB0362JJsaam02 1 supplier is required by this Law, such notice may be 2 personally served or given by United States certified or 3 registered mail, addressed to the purchaser or delivering 4 supplier concerned at his or her last known address, and 5 proof of such mailing shall be sufficient for the purposes of 6 this Law. In the case of a notice of hearing, the notice 7 shall be mailed not less than 21 days prior to the date fixed 8 for the hearing. 9 All hearings provided for in this Law with respect to a 10 purchaser or to a delivering supplier having its principal 11 address or principal place of business in any of the several 12 counties of this State shall be held in the county wherein 13 the purchaser or delivering supplier has its principal 14 address or principal place of business. If the purchaser or 15 delivering supplier does not have its principal address or 16 principal place of business in this State, such hearings 17 shall be held in Sangamon County. The Circuit Court of any 18 county wherein a hearing is held shall have power to review 19 all final administrative decisions of the Department in 20 administering the provisions of this Law. If, however, the 21 administrative proceeding which is to be reviewed judicially 22 is a claim for refund proceeding commenced in accordance with 23 this Law and Section 2a of the State Officers and Employees 24 Money Disposition Act, the Circuit Court having jurisdiction 25 of the action for judicial review under this Section and 26 under the Administrative Review Law shall be the same court 27 that entered the temporary restraining order or preliminary 28 injunction which is provided for in Section 2a of the State 29 Officers and Employees Money Disposition Act and which 30 enables such claim proceeding to be processed and disposed of 31 as a claim for refund proceeding rather than as a claim for 32 credit proceeding. 33 The provisions of the Administrative Review Law, and the 34 rules adopted pursuant thereto, shall apply to and govern all -198- SRS90HB0362JJsaam02 1 proceedings for the judicial review of final administrative 2 decisions of the Department hereunder. The term 3 "administrative decision" is defined as in Section 3-101 of 4 the Code of Civil Procedure. 5 Service upon the Director or Assistant Director of the 6 Department of Revenue of summons issued in any action to 7 review a final administrative decision is service upon the 8 Department. The Department shall certify the record of its 9 proceedings if the person commencing such action shall pay to 10 it the sum of 75 cents per page of testimony taken before the 11 Department and 25 cents per page of all other matters 12 contained in such record, except that these charges may be 13 waived where the Department is satisfied that the aggrieved 14 party is a poor person who cannot afford to pay such charges. 15 Whenever any proceeding provided by this Law has been 16 begun by the Department or by a person subject thereto and 17 such person thereafter dies or becomes a person under legal 18 disability before the proceeding has been concluded, the 19 legal representative of the deceased person or a person under 20 legal disability shall notify the Department of such death or 21 legal disability. The legal representative, as such, shall 22 then be substituted by the Department in place of and for the 23 person. 24 Within 20 days after notice to the legal representative 25 of the time fixed for that purpose, the proceeding may 26 proceed in all respects and with like effect as though the 27 person had not died or become a person under legal 28 disability. 29 Section 2-15. Illinois Administrative Procedure Act; 30 application. The Illinois Administrative Procedure Act is 31 hereby expressly adopted and shall apply to all 32 administrative rules and procedures of the Department under 33 this Law, except that: (1) paragraph (b) of Section 5-10 of -199- SRS90HB0362JJsaam02 1 the Illinois Administrative Procedure Act does not apply to 2 final orders, decisions and opinions of the Department, (2) 3 subparagraph (a)(ii) of Section 5-10 of the Illinois 4 Administrative Procedure Act does not apply to forms 5 established by the Department for use under this Law, and (3) 6 the provisions of Section 10-45 of the Illinois 7 Administrative Procedure Act regarding proposals for decision 8 are excluded and not applicable to the Department under this 9 Law. 10 Section 2-16. Violations. Any purchaser or delivering 11 supplier who is required to but fails to make a return, or 12 who makes a fraudulent return, or who wilfully violates any 13 other provision of this Law or any rule or regulation of the 14 Department for the administration and enforcement of this 15 Law, is guilty of a business offense and, upon conviction 16 thereof, shall be fined not less than $750 nor more than 17 $7,500. 18 Section 2-17. Office of Attorney General; Consumer 19 Utilities Unit. From the moneys collected under this Law, 20 the General Assembly shall appropriate sufficient moneys to 21 the Office of the Attorney General to pay the expenses of the 22 Consumer Utilities Unit incurred in the performance of its 23 duties under Section 6.5 of the Attorney General Act. 24 ARTICLE 3 25 Section 25. The Public Utilities Revenue Act is amended 26 by changing Sections 1, 2a.1, 2a.2, 5, and 7 and adding 27 Section 1a as follows: 28 (35 ILCS 620/1) (from Ch. 120, par. 468) 29 Sec. 1. For the purposes of this Law: -200- SRS90HB0362JJsaam02 1 "Consumer Price Index" means the Consumer Price Index For 2 All Urban Consumers for all items published by the United 3 States Department of Labor; provided that if this index no 4 longer exists, the Department of Revenue shall prescribe the 5 use of a comparable, substitute index. 6 "Gross receipts" means the consideration received for 7 electricity distributed, supplied, furnished or sold to 8 persons for use or consumption and not for resale, and for 9 all services (including the transmission of electricity for 10 an end-user) rendered in connection therewith, and includes 11 cash, services and property of every kind or nature, and 12 shall be determined without any deduction on account of the 13 cost of the service, product or commodity supplied, the cost 14 of materials used, labor or service costs, or any other 15 expense whatsoever. However, "gross receipts" shall not 16 include receipts from: 17 (i) any minimum or other charge for electricity or 18 electric service where the customer has taken no 19 kilowatt-hours of electricity; 20 (ii) any charge for a dishonored check; 21 (iii) any finance or credit charge, penalty or 22 charge for delayed payment, or discount for prompt 23 payment; 24 (iv) any charge for reconnection of service or for 25 replacement or relocation of facilities; 26 (v) any advance or contribution in aid of 27 construction; 28 (vi) repair, inspection or servicing of equipment 29 located on customer premises; 30 (vii) leasing or rental of equipment, the leasing 31 or rental of which is not necessary to distributing, 32 furnishing, supplying, selling or transporting 33 electricity; 34 (viii) any sale to a customer if the taxpayer is -201- SRS90HB0362JJsaam02 1 prohibited by federal or State constitution, treaty, 2 convention, statute or court decision from recovering the 3 related tax liability from such customer; and 4 (ix) any charges added to customers' bills pursuant 5 to the provisions of Section 9-221 or Section 9-222 of 6 the Public Utilities Act, as amended, or any charges 7 added to customers' bills by taxpayers who are not 8 subject to rate regulation by the Illinois Commerce 9 Commission for the purpose of recovering any of the tax 10 liabilities or other amount specified in such provisions 11 of such Act. In case credit is extended, the amount 12 thereof shall be included only as and when payments are 13 received. 14 "Gross receipts" shall not include consideration received 15 from business enterprises certified under Section 9-222.1 of 16 the Public Utilities Act, as amended, to the extent of such 17 exemption and during the period of time specified by the 18 Department of Commerce and Community Affairs. 19 "Department" means the Department of Revenue of the State 20 of Illinois. 21 "Director" means the Director of Revenue for the 22 Department of Revenue of the State of Illinois. 23 "Distributing electricity" means delivering electric 24 energy to an end user over facilities owned, leased, or 25 controlled by the taxpayer. 26 "Taxpayer" for purposes of the tax on the distribution of 27 electricity imposed by this Act means an electric 28 cooperative, an electric utility, or an alternative retail 29 electric supplier (other than a person that is an alternative 30 retail electric supplier solely pursuant to subsection (e) of 31 Section 16-115 of the Public Utilities Act), as those terms 32 are defined in the Public Utilities Act,a personengaged in 33 the business of distributing, supplying, furnishing or34sellingelectricity in this State for use or consumption and -202- SRS90HB0362JJsaam02 1 not for resale. 2 "Taxpayer" for purposes of the Public Utilities Revenue 3 Tax means a person engaged in the business of distributing, 4 suppling, furnishing or selling electricity for use or 5 consumption and not for resale. 6 "Person" means any natural individual, firm, trust, 7 estate, partnership, association, joint stock company, joint 8 adventure, corporation, limited liability company, or a 9 receiver, trustee, guardian or other representative appointed 10 by order of any court, or any city, town, county or other 11 political subdivision of this State. 12 "Invested capital"means that amount equal to (i) the13average of the balances at the beginning and end of each14taxable period of the taxpayer's total stockholder's equity15and total long-term debt, less investments in and advances to16all corporations, as set forth on the balance sheets included17in the taxpayer's annual report to the Illinois Commerce18Commission for the taxable period; (ii) multiplied by a19fraction determined under Sections 301 and 304(a) of the20"Illinois Income Tax Act" and reported on the Illinois income21tax return for the taxable period ending in or with the22taxable period in question. However, notwithstanding the23income tax return reporting requirement stated above,24beginning July 1, 1979, no taxpayer's denominators used to25compute the sales, property or payroll factors under26subsection (a) of Section 304 of the Illinois Income Tax Act27shall include payroll, property or sales of any corporate28entity other than the taxpayer for the purposes of29determining an allocation for the invested capital tax. This30amendatory Act of 1982, Public Act 82-1024, is not intended31to and does not make any change in the meaning of any32provision of this Act, it having been the intent of the33General Assembly in initially enacting the definition of34"invested capital" to provide for apportionment of the-203- SRS90HB0362JJsaam02 1invested capital of each company, based solely upon the2sales, property and payroll of that company.in the case of 3 an electric cooperative subject to the tax imposed by Section 4 2a.1,"invested capital"means an amount equal to the product 5 determined by multiplying, (i) the average of the balances at 6 the beginning and end of the taxable period of the taxpayer's 7 total equity (including memberships, patronage capital, 8 operating margins, non-operating margins, other margins and 9 other equities), as set forth on the balance sheets included 10 in the taxpayer's annual report to the United States 11 Department of Agriculture Rural Utilities Services 12Electrification Administration(established pursuant to the 13 federal Rural Electrification Act of 1936, as amended), by 14 (ii) the fraction determined under Sections 301 and 304(a) of 15 the Illinois Income Tax Act, as amended, for the taxable 16 period. 17 "Taxable period" means each calendar yearperiodwhich 18 ends after the effective date of this Actand which is19covered by an annual report filed by the taxpayer with the20Illinois Commerce Commission. In the case of an electric 21 cooperative subject to the tax imposed by Section 2a.1, 22 "taxable period" means each calendar year ending after the 23 effective date of this Act and covered by an annual report 24 filed by the taxpayer with the United States Department of 25 Agriculture Rural Utilities ServicesElectrification26Administration. 27 (Source: P.A. 88-480.) 28 (35 ILCS 620/1a new) 29 Sec. 1a. Legislative Intent. The General Assembly 30 previously imposed a tax on the invested capital of electric 31 utilities to replace in part the personal property tax that 32 was abolished by the Illinois Constitution of 1970. 33 Subsequent to the enactment and imposition of the invested -204- SRS90HB0362JJsaam02 1 capital tax on electric utilities, State and federal laws 2 regulating the provision of electricity have been enacted 3 which provide for the restructuring of the electric power 4 industry into a competitive industry. In response to this 5 restructuring, this amendatory Act of 1997 is intended to 6 provide for a replacement for the invested capital tax on 7 electric utilities, other than electric cooperatives, and 8 replace it with a new tax based on the quantity of 9 electricity that is delivered in this State. The General 10 Assembly finds and declares that this new tax is a fairer and 11 more equitable means to replace that portion of the personal 12 property tax that was abolished by the Illinois Constitution 13 of 1970 and previously replaced by the invested capital tax 14 on electric utilities, while maintaining a comparable 15 allocation among electric utilities in this State for payment 16 of taxes imposed to replace the personal property tax. 17 (35 ILCS 620/2a.1) (from Ch. 120, par. 469a.1) 18 Sec. 2a.1. Imposition of tax on invested capital and 19 on distribution of electricity. 20 (a) In addition to the taxtaxesimposed by the Illinois 21 Income Tax Actand Section 2 of this Act, there is hereby 22 imposed upon every taxpayerpersons engaged in the business23of distributing, supplying, furnishing or selling electricity24and subject to the tax imposed by this Act(other than an 25 electric cooperative, a school district or unit of local 26 government as defined in Section 1 of Article VII of the 27 Illinois Constitution of 1970and other than persons subject28to the tax imposed by Section 2a.1 of the "Gas Revenue Tax29Act), an additional tax as follows:in an amount equal to .8%30of such persons' invested capital for the taxable period.31 (i) For the first 500,000,000 kilowatt-hours 32 distributed by the taxpayer in this State during the 33 taxable period, 0.031 cents per kilowatt-hour; -205- SRS90HB0362JJsaam02 1 (ii) For the next 1,000,000,000 kilowatt-hours 2 distributed by the taxpayer in this State during the 3 taxable period, 0.050 cents per kilowatt-hour; 4 (iii) For the next 2,500,000,000 kilowatt-hours 5 distributed by the taxpayer in this State during the 6 taxable period, 0.070 cents per kilowatt-hour; 7 (iv) For the next 4,000,000,000 killowatt-hours 8 distributed by the taxpayer in this State during the 9 taxable period, 0.140 cents per kilowatt-hour; 10 (v) For the next 7,000,000,000 kilowatt-hours 11 distributed by the taxpayer in this State during the 12 taxable period, 0.180 cents per kilowatt-hour; 13 (vi) For the next 3,000,000,000 killowatt-hours 14 distributed by the taxpayer in this State during the 15 taxable period, 0.142 cents per kilowatt-hour; and 16 (vii) For all kilowatt-hours distributed by the 17 taxpayer in this State during the taxable period in 18 excess of 18,000,000,000 kilowatt-hours, 0.131 cents per 19 killowatt-hour. 20 (b) There is imposed on electric cooperatives that are 21 required to file reports with the Rural Utilities Service a 22 tax equal to 0.8% of such cooperative's invested capital for 23 the taxable period. The invested capital tax imposed by this 24 subsection shall not be imposed on electric cooperatives not 25 required to file reports with the Rural Utilities Service. 26 (c) If, for any taxable period, the total amount 27 received by the Department from the tax imposed by subsection 28 (a) exceeds $145,279,553 plus, for taxable periods subsequent 29 to 1998, an amount equal to the lesser of (i) 5% or (ii) the 30 percentage increase in the Consumer Price Index during the 31 immediately preceding taxable period, of the total amount 32 received by the Department from the tax imposed by subsection 33 (a) for the immediately preceding taxable period, determined 34 after allowance of the credit provided for in this -206- SRS90HB0362JJsaam02 1 subsection, the Department shall issue credit memoranda in 2 the aggregate amount of the excess to each of the taxpayers 3 who paid any amount of tax under subsection (a) for that 4 taxable period in the proportion which the amount paid by the 5 taxpayer bears to the total amount paid by all such 6 taxpayers. Any credit memorandum issued to a taxpayer under 7 this subsection may be used as a credit by the taxpayer 8 against its liability in future taxable periods for tax under 9 subsection (a). Any amount credited to a taxpayer shall not 10 be refunded to the taxpayer unless the taxpayer demonstrates 11 to the reasonable satisfaction of the Department that it will 12 not incur future liability for tax under subsection (a). The 13 Department shall adopt reasonable regulations for the 14 implementation of the provisions of this subsection. 15If such persons are not liable for such additional tax16for the entire taxable period, such additional tax shall be17computed on the portion of the taxable period during which18such persons were liable for such additional tax. The19invested capital tax imposed by this Section shall not be20imposed upon persons who are not regulated by the Illinois21Commerce Commission or who are not required, in the case of22electric cooperatives, to file reports with the Rural23Electrification Administration.24 (Source: P.A. 87-205; 87-313.) 25 (35 ILCS 620/2a.2) (from Ch. 120, par. 469a.2) 26 Sec. 2a.2. Annual return, collection and payment. A 27 return with respect to the tax imposed by Section 2a.1 shall 28 be made by every person for any taxable period for which such 29 person is liable for such tax. Such return shall be made on 30 such forms as the Department shall prescribe and shall 31 contain the following information: 32 1. Taxpayer's name; 33 2. Address of taxpayer's principal place of -207- SRS90HB0362JJsaam02 1 business, and address of the principal place of business 2 (if that is a different address) from which the taxpayer 3 engages in the business of distributing, supplying,4furnishing or sellingelectricity in this State; 5 3. Thetotal proprietary capital and total6long-term debt as of the beginning and end of the taxable7period as set forth on the balance sheets included in the8taxpayer's annual report to the Illinois Commerce9Commission (or,total equity, in the case of electric 10 cooperatives, in the annual reports filed with the Rural 11 Utilities ServiceElectrification Administration)for the 12 taxable period; 13 3a. The total kilowatt-hours of electricity 14 distributed by a taxpayer, other than an electric 15 cooperative, in this State for the taxable period covered 16 by the return; 174. The taxpayer's base income allocable to Illinois18under Sections 301 and 304(a) of the "Illinois Income Tax19Act", for the period covered by the return;20 4.5.The amount of tax due for the taxable period 21 (computed on the basis of the amounts set forth in Items 22 3 and 3a4); and 23 5.6.Such other reasonable information as may be 24 required by forms or regulations prescribed by the 25 Department. 26 The returns prescribed by this Section shall be due and 27 shall be filed with the Department not later than the 15th 28 day of the third month following the close of the taxable 29 period. The taxpayer making the return herein provided for 30 shall, at the time of making such return, pay to the 31 Department the remaining amount of tax herein imposed and due 32 for the taxable period. Each taxpayer shall make estimated 33 quarterly payments on the 15th day of the third, sixth, ninth 34 and twelfth months of each taxable period. Such estimated -208- SRS90HB0362JJsaam02 1 payments shall be 25% of the tax liability for the 2 immediately preceding taxable period or the tax liability 3 that would have been imposed in the immediately preceding 4 taxable period if this amendatory Act of 1979 had been in 5 effect. All moneys received by the Department under Sections 6 2a.1 and 2a.2 shall be paid into the Personal Property Tax 7 Replacement Fund in the State Treasury. 8 (Source: P.A. 87-205.) 9 (35 ILCS 620/5) (from Ch. 120, par. 472) 10 Sec. 5. All of the provisions of Sections 4, (except that 11 the time limitation provisions shall run from the date when 12 the tax is due rather than from the date when gross receipts 13 are received), 5 (except that the time limitation provisions 14 on the issuance of notices of tax liability shall run from 15 the date when the tax is due rather than from the date when 16 gross receipts are received and except that, in the case of a 17 failure to file a return required by this Act, no notice of 18 tax liability shall be issued covering tax due with that 19 return more than 6 years after the original due date of that 20 return, and except that the 30% penalty provided for in 21 Section 5 shall not apply), 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i 22 and 5j of the Retailers' Occupation Tax Act, which are not 23 inconsistent with this Act, andSection 3-7 ofthe Uniform 24 Penalty and Interest Act shall apply, as far as practicable, 25 to the subject matter of this Act to the same extent as if 26 such provisions were included herein. References in such 27 incorporated Sections of the Retailers' Occupation Tax Act to 28 retailers, to sellers or to persons engaged in the business 29 of selling tangible personal property mean persons engaged in 30 the business of distributing, supplying, furnishing or31sellingelectricity when used in this Act.References in such32incorporated Sections of the Retailers' Occupation Tax Act to33purchasers of tangible personal property mean purchasers of-209- SRS90HB0362JJsaam02 1electricity when used in this Act.References in such 2 incorporated Sections of the Retailers' Occupation Tax Act to 3 sales of tangible personal property mean the distributing,4supplying, furnishing or sellingof electricity when used in 5 this Act. 6 (Source: P.A. 87-205.) 7 (35 ILCS 620/7) (from Ch. 120, par. 474) 8 Sec. 7. Every taxpayer under this Act shall keep books, 9 records, papers and other documents which are adequate to 10 reflect the information which such taxpayers are required by 11 Section 2a.23of this Act to report to the Department by 12 filing annualmonthlyreturns with the Department. The 13 Department may adopt rules that establish requirements, 14 including record forms and formats, for records required to 15 be kept and maintained by taxpayers. For purposes of this 16 Section, "records" means all data maintained by the taxpayer, 17 including data on paper, microfilm, microfiche or any type of 18 machine-sensible data compilation. All books and records and 19 other papers and documents required by this Act to be kept 20 shall be kept in the English language and shall, at all times 21 during business hours of the day, be subject to inspection by 22 the Department or its duly authorized agents and employees. 23 Books and records reflecting kilowatt-hours of electricity 24 distributedgross receipts receivedduring any period with 25 respect to which the Department is authorized to establish 26 liability as provided in SectionSections 4 and5 of this Act 27 shall be preserved until the expiration of such period unless 28 the Department, in writing, authorizes their destruction or 29 disposal at an earlier date. 30 The Department may, upon written authorization of the 31 Director, destroy any returns or any records, papers or 32 memoranda pertaining to such returns upon the expiration of 33 any period covered by such returns with respect to which the -210- SRS90HB0362JJsaam02 1 Department is authorized to establish liability. 2 (Source: P.A. 88-480.) 3 (35 ILCS 620/2 rep.) 4 (35 ILCS 620/2a.3 rep.) 5 (35 ILCS 620/3 rep.) 6 Section 26. The Public Utilities Revenue Act is amended 7 by repealing Sections 2, 2a.3, and 3. 8 Section 30. The Gas Revenue Tax Act is amended by 9 changing Section 2a.1 as follows: 10 (35 ILCS 615/2a.1) (from Ch. 120, par. 467.17a.1) 11 Sec. 2a.1. Imposition of tax on invested capital. In 12 addition to the taxes imposed by the Illinois Income Tax Act 13 and Section 2 of this Act, there is hereby imposed upon 14 persons engaged in the business of distributing, supplying, 15 furnishing or selling gas and subject to the tax imposed by 16 this Act (other than a school district or unit of local 17 government as defined in Section 1 of Article VII of the 18 Illinois Constitution of 1970), an additional tax in an 19 amount equal to .8% of such persons' invested capital for the 20 taxable period. If such persons are not liable for such 21 additional tax for the entire taxable period, such additional 22 tax shall be computed on the portion of the taxable period 23 during which such persons were liable for such additional 24 tax. The invested capital tax imposed by this Section shall 25 not be imposed upon persons who are not regulated by the 26 Illinois Commerce Commission. Provided, in the case of any 27 person which is subject to the invested capital tax imposed 28 by this Section and which is also subject to the tax on the 29 distribution of electricity imposed by Section 2a.1 of the 30 Public Utilities Revenue Act, the invested capital tax 31 imposed by this Section shall be an amount equal to 0.8% of -211- SRS90HB0362JJsaam02 1 such person's invested capital for the taxable period 2 multiplied by a fraction the numerator of which is the 3 average of the beginning and ending balances of such person's 4 gross gas utility plant in service and the denominator of 5 which is the average of the beginning and ending balances of 6 such person's gross electric and gas utility plant in 7 service, as set forth in such person's annual report to the 8 Illinois Commerce Commission for the taxable period. 9 (Source: P.A. 87-205; 87-313.) 10 Section 35. The Public Utilities Act is amended by 11 changing Section 2-202 as follow: 12 (220 ILCS 5/2-202) (from Ch. 111 2/3, par. 2-202) 13 Sec. 2-202. (a) It is declared to be the public policy of 14 this State that in order to maintain and foster the effective 15 regulation of public utilities under this Act in the 16 interests of the People of the State of Illinois and the 17 public utilities as well, the public utilities subject to 18 regulation under this Act and which enjoy the privilege of 19 operating as public utilities in this State, shall bear the 20 expense of administering this Act by means of a tax on such 21 privilege measured by the annual gross revenue of such public 22 utilities in the manner provided in this Section. For 23 purposes of this Section, "expense of administering this Act" 24 includes any costs incident to studies, whether made by the 25 Commission or under contract entered into by the Commission, 26 concerning environmental pollution problems caused or 27 contributed to by public utilities and the means for 28 eliminating or abating those problems. Such proceeds shall be 29 deposited in the Public Utility Fund in the State treasury. 30 (b) All of the ordinary and contingent expenses of the 31 Commission incident to the administration of this Act shall 32 be paid out of the Public Utility Fund except the -212- SRS90HB0362JJsaam02 1 compensation of the members of the Commission which shall be 2 paid from the General Revenue Fund. Notwithstanding other 3 provisions of this Act to the contrary, the ordinary and 4 contingent expenses of the Commission incident to the 5 administration of the Illinois Commercial Transportation Law 6 may be paid from appropriations from the Public Utility Fund 7 through the end of fiscal year 1986. 8 (c) A tax is imposed upon each public utility subject to 9 the provisions of this Act equal to .08% of its gross revenue 10 for each calendar year commencing with the calendar year 11 beginning January 1, 1982, except that the Commission may, by 12 rule, establish a different rate no greater than 0.1%. For 13 purposes of this Section, "gross revenue" shall not include 14 revenue from the production, transmission, distribution, 15 sale, delivery, or furnishing of electricity. 16 (d) Annual gross revenue returns shall be filed in 17 accordance with paragraph (1) or (2) of this subsection (d). 18 (1) Except as provided in paragraph (2) of this 19 subsection (d), on or before January 10 of each year each 20 public utility subject to the provisions of this Act 21 shall file with the Commission an estimated annual gross 22 revenue return containing an estimate of the amount of 23 its gross revenue for the calendar year commencing 24 January 1 of said year and a statement of the amount of 25 tax due for said calendar year on the basis of that 26 estimate. Public utilities may also file revised returns 27 containing updated estimates and updated amounts of tax 28 due during the calendar year. These revised returns, if 29 filed, shall form the basis for quarterly payments due 30 during the remainder of the calendar year. In addition, 31 on or before February 15 of each year, each public 32 utility shall file an amended return showing the actual 33 amount of gross revenues shown by the company's books and 34 records as of December 31 of the previous year. Forms and -213- SRS90HB0362JJsaam02 1 instructions for such estimated, revised, and amended 2 returns shall be devised and supplied by the Commission. 3 (2) Beginning January 1, 1993, the requirements of 4 paragraph (1) of this subsection (d) shall not apply to 5 any public utility in any calendar year for which the 6 total tax the public utility owes under this Section is 7 less than $1,000. For such public utilities with respect 8 to such years, the public utility shall file with the 9 Commission, on or before January 31 of the following 10 year, an annual gross revenue return for the year and a 11 statement of the amount of tax due for that year on the 12 basis of such a return. Forms and instructions for such 13 returns and corrected returns shall be devised and 14 supplied by the Commission. 15 (e) All returns submitted to the Commission by a public 16 utility as provided in this subsection (e) or subsection (d) 17 of this Section shall contain or be verified by a written 18 declaration by an appropriate officer of the public utility 19 that the return is made under the penalties of perjury. The 20 Commission may audit each such return submitted and may, 21 under the provisions of Section 5-101 of this Act, take such 22 measures as are necessary to ascertain the correctness of the 23 returns submitted. The Commission has the power to direct the 24 filing of a corrected return by any utility which has filed 25 an incorrect return and to direct the filing of a return by 26 any utility which has failed to submit a return. A 27 taxpayer's signing a fraudulent return under this Section is 28 perjury, as defined in Section 32-2 of the Criminal Code of 29 1961. 30 (f) (1) For all public utilities subject to paragraph 31 (1) of subsection (d), at least one quarter of the annual 32 amount of tax due under subsection (c) shall be paid to the 33 Commission on or before the tenth day of January, April, 34 July, and October of the calendar year subject to tax. In -214- SRS90HB0362JJsaam02 1 the event that an adjustment in the amount of tax due should 2 be necessary as a result of the filing of an amended or 3 corrected return under subsection (d) or subsection (e) of 4 this Section, the amount of any deficiency shall be paid by 5 the public utility together with the amended or corrected 6 return and the amount of any excess shall, after the filing 7 of a claim for credit by the public utility, be returned to 8 the public utility in the form of a credit memorandum in the 9 amount of such excess or be refunded to the public utility in 10 accordance with the provisions of subsection (k) of this 11 Section. However, if such deficiency or excess is less than 12 $1, then the public utility need not pay the deficiency and 13 may not claim a credit. 14 (2) Any public utility subject to paragraph (2) of 15 subsection (d) shall pay the amount of tax due under 16 subsection (c) on or before January 31 next following the end 17 of the calendar year subject to tax. In the event that an 18 adjustment in the amount of tax due should be necessary as a 19 result of the filing of a corrected return under subsection 20 (e), the amount of any deficiency shall be paid by the public 21 utility at the time the corrected return is filed. Any excess 22 tax payment by the public utility shall be returned to it 23 after the filing of a claim for credit, in the form of a 24 credit memorandum in the amount of the excess. However, if 25 such deficiency or excess is less than $1, the public utility 26 need not pay the deficiency and may not claim a credit. 27 (g) Each installment or required payment of the tax 28 imposed by subsection (c) becomes delinquent at midnight of 29 the date that it is due. Failure to make a payment as 30 required by this Section shall result in the imposition of a 31 late payment penalty, an underestimation penalty, or both, as 32 provided by this subsection. The late payment penalty shall 33 be the greater of: 34 (1) $25 for each month or portion of a month that -215- SRS90HB0362JJsaam02 1 the installment or required payment is unpaid or 2 (2) an amount equal to the difference between what 3 should have been paid on the due date, based upon the 4 most recently filed estimate, and what was actually paid, 5 times 1%one percent, for each month or portion of a 6 month that the installment or required payment goes 7 unpaid. This penalty may be assessed as soon as the 8 installment or required payment becomes delinquent. 9 The underestimation penalty shall apply to those public 10 utilities subject to paragraph (1) of subsection (d) and 11 shall be calculated after the filing of the amended return. 12 It shall be imposed if the amount actually paid on any of the 13 dates specified in subsection (f) is not equal to at least 14 one-fourth of the amount actually due for the year, and shall 15 equal the greater of: 16 (1) $25 for each month or portion of a month that 17 the amount due is unpaid or 18 (2) an amount equal to the difference between what 19 should have been paid, based on the amended return, and 20 what was actually paid as of the date specified in 21 subsection (f), times a percentage equal to 1/12 of the 22 sum of 10% and the percentage most recently established 23 by the Commission for interest to be paid on customer 24 deposits under 83 Ill. Adm. Code 280.70(e)(1), for each 25 month or portion of a month that the amount due goes 26 unpaid, except that no underestimation penalty shall be 27 assessed if the amount actually paid on each of the dates 28 specified in subsection (f) was based on an estimate of 29 gross revenues at least equal to the actual gross 30 revenues for the previous year. The Commission may 31 enforce the collection of any delinquent installment or 32 payment, or portion thereof by legal action or in any 33 other manner by which the collection of debts due the 34 State of Illinois may be enforced under the laws of this -216- SRS90HB0362JJsaam02 1 State. The executive director or his designee may excuse 2 the payment of an assessed penalty if he determines that 3 enforced collection of the penalty would be unjust. 4 (h) All sums collected by the Commission under the 5 provisions of this Section shall be paid promptly after the 6 receipt of the same, accompanied by a detailed statement 7 thereof, into the Public Utility Fund in the State treasury. 8 (i) During the month of October of each odd-numbered 9 year the Commission shall: 10 (1) determine the amount of all moneys deposited in 11 the Public Utility Fund during the preceding fiscal 12 biennium plus the balance, if any, in that fund at the 13 beginning of that biennium; 14 (2) determine the sum total of the following items: 15 (A) all moneys expended or obligated against 16 appropriations made from the Public Utility Fund during 17 the preceding fiscal biennium, plus (B) the sum of the 18 credit memoranda then outstanding against the Public 19 Utility Fund, if any; and 20 (3) determine the amount, if any, by which the sum 21 determined as provided in item (1) exceeds the amount 22 determined as provided in item (2). 23 If the amount determined as provided in item (3) of this 24 subsection exceeds $2,500,000, the Commission shall then 25 compute the proportionate amount, if any, which (x) the tax 26 paid hereunder by each utility during the preceding biennium, 27 and (y) the amount paid into the Public Utility Fund during 28 the preceding biennium by the Department of Revenue pursuant 29 to Sections 2-9 and 2-11 of the Electricity Excise Tax Law, 30 bears to the difference between the amount determined as 31 provided in item (3) of this subsection (i) and $2,500,000. 32 The Commission shall cause the proportionate amount 33 determined with respect to payments made under the 34 Electricity Excise Tax Law to be transferred into the General -217- SRS90HB0362JJsaam02 1 Revenue Fund in the State Treasury, and notify each public 2 utility that it may file during the 3 month period after the 3 date of notification a claim for credit for thein such4 proportionate amount determined with respect to payments made 5 hereunder by the public utility. If the proportionate amount 6 is less than $10, no notification will be sent by the 7 Commission, and no right to a claim exists as to that amount. 8 Upon the filing of a claim for credit within the period 9 provided, the Commission shall issue a credit memorandum in 10 such amount to such public utility. Any claim for credit 11 filed after the period provided for in this Section is void. 12 (j) Credit memoranda issued pursuant to subsection (f) 13 and credit memoranda issued after notification and filing 14 pursuant to subsection (i) may be applied for the 2 year 15 period from the date of issuance, against the payment of any 16 amount due during that period under the tax imposed by 17 subsection (c), or, subject to reasonable rule of the 18 Commission including requirement of notification, may be 19 assigned to any other public utility subject to regulation 20 under this Act. Any application of credit memoranda after the 21 period provided for in this Section is void. 22 (k) The chairman or executive director may make refund 23 of fees, taxes or other charges whenever he shall determine 24 that the person or public utility will not be liable for 25 payment of such fees, taxes or charges during the next 24 26 months and he determines that the issuance of a credit 27 memorandum would be unjust. 28 (Source: P.A. 86-209; 87-971.) 29 Section 40. The Attorney General Act is amended by 30 adding Section 6.5 as follows: 31 (15 ILCS 205/6.5 new) 32 Sec. 6.5. Consumer Utilities Unit. -218- SRS90HB0362JJsaam02 1 (a) The General Assembly finds that the health, welfare, 2 and prosperity of all Illinois citizens, and the public's 3 interest in adequate, safe, reliable, cost-effective electric 4 services, requires effective public representation by the 5 Attorney General to protect the rights and interests of the 6 public in the provision of all elements of electric service 7 both during and after the transition to a competitive market, 8 and that to ensure that the benefits of competition in the 9 provision of electric services to all consumers are attained, 10 there shall be created within the Office of the Attorney 11 General a Consumer Utilities Unit. 12 (b) As used in this Section: "Electric services" means 13 services sold by an electric service provider. "Electric 14 service provider" shall mean anyone who sells, contracts to 15 sell, or markets electric power, generation, distribution, 16 transmission, or services (including metering and billing) in 17 connection therewith. Electric service providers shall 18 include any electric utility and any alternative retail 19 electric supplier as defined in Section 16-102 of the Public 20 Utilities Act. 21 (c) There is created within the Office of the Attorney 22 General a Consumer Utilities Unit, consisting of Assistant 23 Attorneys General appointed by the Attorney General, who, 24 together with such other staff as is deemed necessary by the 25 Attorney General, shall have the power and duty on behalf of 26 the people of the State to intervene in, initiate, enforce, 27 and defend all legal proceedings on matters relating to the 28 provision, marketing, and sale of electric service whenever 29 the Attorney General determines that such action is necessary 30 to promote or protect the rights and interest of all Illinois 31 citizens, classes of customers, and users of electric 32 services. 33 (d) In addition to the investigative and enforcement 34 powers available to the Attorney General, including without -219- SRS90HB0362JJsaam02 1 limitation those under the Consumer Fraud and Deceptive 2 Business Practices Act and the Illinois Antitrust Act, the 3 Attorney General shall be a party as a matter of right to all 4 proceedings, investigations, and related matters involving 5 the provision of electric services before the Illinois 6 Commerce Commission and shall, upon request, have access to 7 and the use of all files, records, data, and documents in the 8 possession or control of the Commission, which material the 9 Attorney General's office shall maintain as confidential, to 10 be used for law enforcement purposes only, which material may 11 be shared with other law enforcement officials. Nothing in 12 this Section is intended to take away or limit any of the 13 powers the Attorney General has pursuant to common law or 14 other statutory law. 15 Section 45. The Consumer Fraud and Deceptive Business 16 Practices Act is amended by changing Section 2P and adding 17 Sections 2EE, 2FF, 2GG, and 2HH as follows: 18 (815 ILCS 505/2EE new) 19 Sec. 2EE. Electric service provider selection. An 20 electric service provider shall not submit or execute a 21 change in a subscriber's selection of a provider of electric 22 service except as follows: 23 The new electric service provider has obtained the 24 customer's written authorization in a form that meets the 25 following requirements: 26 (1) An electric service provider shall obtain any 27 necessary written authorization from a subscriber for a 28 change in electric service by using a letter of agency as 29 specified in this Section. Any letter of agency that 30 does not conform with this Section is invalid. 31 (2) The letter of agency shall be a separate 32 document (an easily separable document containing only -220- SRS90HB0362JJsaam02 1 the authorization language described in subparagraph (5) 2 of this Section) whose sole purpose is to authorize an 3 electric service provider change. The letter of agency 4 must be signed and dated by the subscriber requesting the 5 electric service provider change. 6 (3) The letter of agency shall not be combined with 7 inducements of any kind on the same document. 8 (4) Notwithstanding subparagraphs (1) and (2) of 9 this Section, the letter of agency may be combined with 10 checks that contain only the required letter of agency 11 language prescribed in paragraph (5) of this Section and 12 the necessary information to make the check a negotiable 13 instrument. The letter of agency check shall not contain 14 any promotional language or material. The letter of 15 agency check shall contain in easily readable, bold-face 16 type on the face of the check, a notice that the consumer 17 is authorizing an electric service provider change by 18 signing the check. The letter of agency language also 19 shall be placed near the signature line on the back of 20 the check. 21 (5) At a minimum, the letter of agency must be 22 printed with a print of sufficient size to be clearly 23 legible, and must contain clear and unambiguous language 24 that confirms; 25 (i) The subscriber's billing name and address; 26 (ii) The decision to change the electric 27 service provider from the current provider to the 28 prospective provider; 29 (iii) The terms, conditions, and nature of the 30 service to be provided to the subscriber must be 31 clearly and conspicuously disclosed, in writing, and 32 an electric service provider must directly establish 33 the rates for the service contracted for by the 34 subscriber; and -221- SRS90HB0362JJsaam02 1 (iv) That the subscriber understand that any 2 electric service provider selection the subscriber 3 chooses may involve a charge to the subscriber for 4 changing the subscriber's electric service provider. 5 (6) Letters of agency shall not suggest or require 6 that a subscriber take some action in order to retain the 7 subscriber's current electric service provider. 8 (7) If any portion of a letter of agency is 9 translated into another language, then all portions of 10 the letter of agency must be translated into that 11 language. 12 For purposes of this Section, "electric service provider" 13 shall have the meaning given that phrase in Section 6.5 of 14 the Attorney General Act. 15 (815 ILCS 505/2FF new) 16 Sec. 2FF. Electric service fraud; elderly persons or 17 disabled persons; additional penalties. With respect to the 18 advertising, sale, provider selection, billings, or 19 collections relating to the provision of electric service, 20 where the consumer is an elderly person or disabled person, a 21 civil penalty of $50,000 may be imposed for each violation. 22 For purposes of this Section: 23 (1) "Elderly person" means a person 60 years of age or 24 older. 25 (2) "Disabled person" means a person who suffers from a 26 permanent physical or mental impairment resulting from 27 disease, injury, functional disorder or congenital condition. 28 (3) "Electric service" shall have the meaning given that 29 term in Section 6.5 of the Attorney General Act. 30 (815 ILCS 505/2GG new) 31 Sec. 2GG. Electric service advertising. Any 32 advertisement for electric service that lists rates shall -222- SRS90HB0362JJsaam02 1 clearly and conspicuously disclose all associated costs for 2 such service including, but not limited to, access fees and 3 service fees. 4 (815 ILCS 505/2HH new) 5 Sec. 2HH. Billing and collection practices of electric 6 service providers. Each person selling generation, 7 transmission, distribution, metering, or billing of electric 8 service shall display the name, the toll-free telephone 9 number of such service provider, and a description of the 10 services provided on all bills submitted to subscribers of 11 such services. All personal information relating to the 12 subscriber of generation, transmission, distribution, 13 metering, or billing of electric service shall be maintained 14 by the service providers solely for the purpose of generating 15 the bill for such services, and shall not be divulged to any 16 other persons with the exception of credit bureaus, 17 collection agencies, and persons licensed to market electric 18 service in the State of Illinois, without the written consent 19 of the subscriber. 20 (815 ILCS 505/2P) (from Ch. 121 1/2, par. 262P) 21 Sec. 2P. Offers of free prizes, gifts, or gratuities; 22 disclosure of conditions. It is an unlawful practice for any 23 person to promote or advertise any business, product, utility 24 service, including but not limited to, the provision of 25 electric, telecommunication, or gas service, or interest in 26 property, by means of offering free prizes, gifts, or 27 gratuities to any consumer, unless all material terms and 28 conditions relating to the offer are clearly and 29 conspicuously disclosed at the outset of the offer so as to 30 leave no reasonable probability that the offering might be 31 misunderstood. 32 (Source: P.A. 84-1308.) -223- SRS90HB0362JJsaam02 1 Section 65. The Illinois Municipal Code is amended by 2 changing Section 8-11-2 as follows: 3 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2) 4 Sec. 8-11-2. The corporate authorities of any 5 municipality may tax any or all of the following occupations 6 or privileges: 7 1. Persons engaged in the business of transmitting 8 messages by means of electricity or radio magnetic waves, 9 or fiber optics, at a rate not to exceed 5% of the gross 10 receipts from that business originating within the 11 corporate limits of the municipality. 12 2. Persons engaged in the business of distributing, 13 supplying, furnishing, or selling gas for use or 14 consumption within the corporate limits of a municipality 15 of 500,000 or fewer population, and not for resale, at a 16 rate not to exceed 5% of the gross receipts therefrom. 17 2a. Persons engaged in the business of 18 distributing, supplying, furnishing, or selling gas for 19 use or consumption within the corporate limits of a 20 municipality of over 500,000 population, and not for 21 resale, at a rate not to exceed 8% of the gross receipts 22 therefrom. If imposed, this tax shall be paid in monthly 23 payments. 24 3. The privilege of using or consuming electricity 25 acquired in a purchase at retail and used or consumed 26 within the corporate limits of the municipality at rates 27 not to exceed the following maximum rates, calculated on 28 a monthly basis for each purchaser: 29 (i) For the first 2,000 kilowatt-hours used or 30 consumed in a month; 0.61 cents per kilowatt-hour; 31 (ii) For the next 48,000 kilowatt-hours used or 32 consumed in a month; 0.40 cents per kilowatt-hour; 33 (iii) For the next 50,000 kilowatt-hours used or -224- SRS90HB0362JJsaam02 1 consumed in a month; 0.36 cents per kilowatt-hour; 2 (iv) For the next 400,000 kilowatt-hours used or 3 consumed in a month; 0.35 cents per kilowatt-hour; 4 (v) For the next 500,000 kilowatt-hours used or 5 consumed in a month; 0.34 cents per kilowatt-hour; 6 (vi) For the next 2,000,000 kilowatt-hours used or 7 consumed in a month; 0.32 cents per kilowatt-hour; 8 (vii) For the next 2,000,000 kilowatt-hours used or 9 consumed in a month; 0.315 cents per kilowatt-hour; 10 (viii) For the next 5,000,000 kilowatt-hours used 11 or consumed in a month; 0.31 cents per kilowatt-hour; 12 (ix) For the next 10,000,000 kilowatt-hours used or 13 consumed in a month; 0.305 cents per kilowatt-hour; and 14 (x) For all electricity used or consumed in excess 15 of 20,000,000 kilowatt-hours in a month, 0.30 cents per 16 kilowatt-hour. 17 If a municipality imposes a tax at rates lower than 18 either the maximum rates specified in this Section or the 19 alternative maximum rates promulgated by the Illinois 20 Commerce Commission, as provided below, the tax rates 21 shall be imposed upon the kilowatt hour categories set 22 forth above with the same proportional relationship as 23 that which exists among such maximum rates. 24 Notwithstanding the foregoing, until December 31, 2008, 25 no municipality shall establish rates that are in excess 26 of rates reasonably calculated to produce revenues that 27 equal the maximum total revenues such municipality could 28 have received under the tax authorized by this 29 subparagraph in the last full calendar year prior to the 30 effective date of Section 65 of this amendatory Act of 31 1997; provided that this shall not be a limitation on the 32 amount of tax revenues actually collected by such 33 municipality. 34 Upon the request of the corporate authorities of a -225- SRS90HB0362JJsaam02 1 municipality, the Illinois Commerce Commission shall, 2 within 90 days after receipt of such request, promulgate 3 alternative rates for each of these kilowatt-hour 4 categories that will reflect, as closely as reasonably 5 practical for that municipality, the distribution of the 6 tax among classes of purchasers as if the tax were based 7 on a uniform percentage of the purchase price of 8 electricity. A municipality that has adopted an 9 ordinance imposing a tax pursuant to subparagraph 3 as it 10 existed prior to the effective date of Section 65 of this 11 amendatory Act of 1997 may, rather than imposing the tax 12 permitted by this amendatory Act of 1997, continue to 13 impose the tax pursuant to that ordinance with respect to 14 gross receipts received from residential customers 15 through July 31, 1999, and with respect to gross receipts 16 from any non-residential customer until the first bill 17 issued to such customer for delivery services in 18 accordance with Section 16-104 of the Public Utilities 19 Act but in no case later than the last bill issued to 20 such customer before December 31, 2000. No ordinance 21 imposing the tax permitted by this amendatory Act of 1997 22 shall be applicable to any non-residential customer until 23 the first bill issued to such customer for delivery 24 services in accordance with Section 16-104 of the Public 25 Utilities Act but in no case later than the last bill 26 issued to such non-residential customer before December 27 31, 2000.Persons engaged in the business of28distributing, supplying, furnishing, or selling29electricity for use or consumption within the corporate30limits of the municipality, and not for resale, at a rate31not to exceed 5% of the gross receipts therefrom.32 4. Persons engaged in the business of distributing, 33 supplying, furnishing, or selling water for use or 34 consumption within the corporate limits of the -226- SRS90HB0362JJsaam02 1 municipality, and not for resale, at a rate not to exceed 2 5% of the gross receipts therefrom. 3 None of the taxes authorized by this Section may be 4 imposed with respect to any transaction in interstate 5 commerce or otherwise to the extent to which the business or 6 privilege may not, under the constitution and statutes of the 7 United States, be made the subject of taxation by this State 8 or any political sub-division thereof; nor shall any persons 9 engaged in the business of distributing, supplying, 10 furnishing,orselling or transmitting gas, water, or 11 electricity, or engaged in the business of transmitting 12 messages, or using or consuming electricity acquired in a 13 purchase at retail, be subject to taxation under the 14 provisions of this Section for those transactions that are or 15 may become subject to taxation under the provisions of the 16 "Municipal Retailers' Occupation Tax Act" authorized by 17 Section 8-11-1; nor shall any tax authorized by this Section 18 be imposed upon any person engaged in a business or on any 19 privilege unless the tax is imposed in like manner and at the 20 same rate upon all persons engaged in businesses of the same 21 class in the municipality, whether privately or municipally 22 owned or operated, or exercising the same privilege within 23 the municipality. 24 Any of the taxes enumerated in this Section may be in 25 addition to the payment of money, or value of products or 26 services furnished to the municipality by the taxpayer as 27 compensation for the use of its streets, alleys, or other 28 public places, or installation and maintenance therein, 29 thereon or thereunder of poles, wires, pipes or other 30 equipment used in the operation of the taxpayer's business. 31 (a) If the corporate authorities of any home rule 32 municipality have adopted an ordinance that imposed a tax on 33 public utility customers, between July 1, 1971, and October 34 1, 1981, on the good faith belief that they were exercising -227- SRS90HB0362JJsaam02 1 authority pursuant to Section 6 of Article VII of the 1970 2 Illinois Constitution, that action of the corporate 3 authorities shall be declared legal and valid, 4 notwithstanding a later decision of a judicial tribunal 5 declaring the ordinance invalid. No municipality shall be 6 required to rebate, refund, or issue credits for any taxes 7 described in this paragraph, and those taxes shall be deemed 8 to have been levied and collected in accordance with the 9 Constitution and laws of this State. 10 (b) In any case in which (i) prior to October 19, 1979, 11 the corporate authorities of any municipality have adopted an 12 ordinance imposing a tax authorized by this Section (or by 13 the predecessor provision of the "Revised Cities and Villages 14 Act") and have explicitly or in practice interpreted gross 15 receipts to include either charges added to customers' bills 16 pursuant to the provision of paragraph (a) of Section 36 of 17 the Public Utilities Act or charges added to customers' bills 18 by taxpayers who are not subject to rate regulation by the 19 Illinois Commerce Commission for the purpose of recovering 20 any of the tax liabilities or other amounts specified in such 21 paragraph (a) of Section 36 of that Act, and (ii) on or after 22 October 19, 1979, a judicial tribunal has construed gross 23 receipts to exclude all or part of those charges, then 24 neither those municipality nor any taxpayer who paid the tax 25 shall be required to rebate, refund, or issue credits for any 26 tax imposed or charge collected from customers pursuant to 27 the municipality's interpretation prior to October 19, 1979. 28 This paragraph reflects a legislative finding that it would 29 be contrary to the public interest to require a municipality 30 or its taxpayers to refund taxes or charges attributable to 31 the municipality's more inclusive interpretation of gross 32 receipts prior to October 19, 1979, and is not intended to 33 prescribe or limit judicial construction of this Section. The 34 legislative finding set forth in this subsection does not -228- SRS90HB0362JJsaam02 1 apply to taxes imposed after the effective date of this 2 amendatory Act of 1995. 3 (c) The tax authorized by subparagraph 3 shall be 4 collected from the purchaser by the person maintaining a 5 place of business in this State who delivers the electricity 6 to the purchaser. This tax shall constitute a debt of the 7 purchaser to the person who delivers the electricity to the 8 purchaser and if unpaid, is recoverable in the same manner as 9 the original charge for delivering the electricity. Any tax 10 required to be collected pursuant to an ordinance authorized 11 by subparagraph 3 and any such tax collected by a person 12 delivering electricity shall constitute a debt owed to the 13 municipality by such person delivering the electricity, 14 provided, that the person delivering electricity shall be 15 allowed credit for such tax related to deliveries of 16 electricity the charges for which are written off as 17 uncollectible, and provided further, that if such charges are 18 thereafter collected, the delivering supplier shall be 19 obligated to remit such tax. For purposes of this subsection 20 (c), any partial payment not specifically identified by the 21 purchaser shall be deemed to be for the delivery of 22 electricity. Persons delivering electricity shall collect the 23 tax from the purchaser by adding such tax to the gross charge 24 for delivering the electricity, in the manner prescribed by 25 the municipality. Persons delivering electricity shall also 26 be authorized to add to such gross charge an amount equal to 27 3% of the tax to reimburse the person delivering electricity 28 for the expenses incurred in keeping records, billing 29 customers, preparing and filing returns, remitting the tax 30 and supplying data to the municipality upon request. If the 31 person delivering electricity fails to collect the tax from 32 the purchaser, then the purchaser shall be required to pay 33 the tax directly to the municipality in the manner prescribed 34 by the municipality. Persons delivering electricity who file -229- SRS90HB0362JJsaam02 1 returns pursuant to this paragraph (c) shall, at the time of 2 filing such return, pay the municipality the amount of the 3 tax collected pursuant to subparagraph 3.(Blank). 4 (d) For the purpose of the taxes enumerated in this 5 Section: 6 "Gross receipts" means the consideration received for the 7 transmission of messages, the consideration received for 8 distributing, supplying, furnishing or selling gas for use or 9 consumption and not for resale,and the consideration10received for distributing, supplying, furnishing or selling11electricity for use or consumption and not for resale,and 12 the consideration received for distributing, supplying, 13 furnishing or selling water for use or consumption and not 14 for resale, and for all services rendered in connection 15 therewith valued in money, whether received in money or 16 otherwise, including cash, credit, services and property of 17 every kind and material and for all services rendered 18 therewith, and shall be determined without any deduction on 19 account of the cost of transmitting such messages, without 20 any deduction on account of the cost of the service, product 21 or commodity supplied, the cost of materials used, labor or 22 service cost, or any other expenses whatsoever. "Gross 23 receipts" shall not include that portion of the consideration 24 received for distributing, supplying, furnishing, or selling 25 gas,electricity,or water to, or for the transmission of 26 messages for, business enterprises described in paragraph (e) 27 of this Section to the extent and during the period in which 28 the exemption authorized by paragraph (e) is in effect or for 29 school districts or units of local government described in 30 paragraph (f) during the period in which the exemption 31 authorized in paragraph (f) is in effect. 32 For utility bills issued on or after May 1, 1996, but 33 before May 1, 1997, and for receipts from those utility 34 bills, "gross receipts" does not include one-third of (i) -230- SRS90HB0362JJsaam02 1 amounts added to customers' bills under Section 9-222 of the 2 Public Utilities Act, or (ii) amounts added to customers' 3 bills by taxpayers who are not subject to rate regulation by 4 the Illinois Commerce Commission for the purpose of 5 recovering any of the tax liabilities described in Section 6 9-222 of the Public Utilities Act. For utility bills issued 7 on or after May 1, 1997, but before May 1, 1998, and for 8 receipts from those utility bills, "gross receipts" does not 9 include two-thirds of (i) amounts added to customers' bills 10 under Section 9-222 of the Public Utilities Act, or (ii) 11 amount added to customers' bills by taxpayers who are not 12 subject to rate regulation by the Illinois Commerce 13 Commission for the purpose of recovering any of the tax 14 liabilities described in Section 9-222 of the Public 15 Utilities Act. For utility bills issued on or after May 1, 16 1998, and for receipts from those utility bills, "gross 17 receipts" does not include (i) amounts added to customers' 18 bills under Section 9-222 of the Public Utilities Act, or 19 (ii) amounts added to customers' bills by taxpayers who are 20 not subject to rate regulation by the Illinois Commerce 21 Commission for the purpose of recovering any of the tax 22 liabilities described in Section 9-222 of the Public 23 Utilities Act. 24 For purposes of this Section "gross receipts" shall not 25 include (i) amounts added to customers' bills under Section 26 9-221 of the Public Utilities Act, or (ii) charges added to 27 customers' bills to recover the surcharge imposed under the 28 Emergency Telephone System Act. This paragraph is not 29 intended to nor does it make any change in the meaning of 30 "gross receipts" for the purposes of this Section, but is 31 intended to remove possible ambiguities, thereby confirming 32 the existing meaning of "gross receipts" prior to the 33 effective date of this amendatory Act of 1995. 34 The words "transmitting messages", in addition to the -231- SRS90HB0362JJsaam02 1 usual and popular meaning of person to person communication, 2 shall include the furnishing, for a consideration, of 3 services or facilities (whether owned or leased), or both, to 4 persons in connection with the transmission of messages where 5 those persons do not, in turn, receive any consideration in 6 connection therewith, but shall not include such furnishing 7 of services or facilities to persons for the transmission of 8 messages to the extent that any such services or facilities 9 for the transmission of messages are furnished for a 10 consideration, by those persons to other persons, for the 11 transmission of messages. 12 "Person" as used in this Section means any natural 13 individual, firm, trust, estate, partnership, association, 14 joint stock company, joint adventure, corporation, limited 15 liability company, municipal corporation, the State or any of 16 itsorpolitical subdivisionssubdivision of this State, any 17 State university created by statute, or a receiver, trustee, 18 guardian or other representative appointed by order of any 19 court. 20 "Person maintaining a place of business in this State" 21 shall mean any person having or maintaining within this 22 State, directly or by a subsidiary or other affiliate, an 23 office, generation facility, distribution facility, 24 transmission facility, sales office or other place of 25 business, or any employee, agent, or other representative 26 operating within this State under the authority of the person 27 or its subsidiary or other affiliate, irrespective of whether 28 such place of business or agent or other representative is 29 located in this State permanently or temporarily, or whether 30 such person, subsidiary or other affiliate is licensed or 31 qualified to do business in this State. 32 "Public utility" shall have the meaning ascribed to it in 33 Section 3-105 of the Public Utilities Act and shall include 34 telecommunications carriers as defined in Section 13-202 of -232- SRS90HB0362JJsaam02 1 that Act and alternative retail electric suppliers as defined 2 in Section 16-102 of that Act. 3 "Purchase at retail" shall mean any acquisition of 4 electricity by a purchaser for purposes of use or 5 consumption, and not for resale, but shall not include the 6 use of electricity by a public utility directly in the 7 generation, production, transmission, delivery or sale of 8 electricity. 9 "Purchaser" shall mean any person who uses or consumes, 10 within the corporate limits of the municipality, electricity 11 acquired in a purchase at retail. 12 In the case of persons engaged in the business of 13 transmitting messages through the use of mobile equipment, 14 such as cellular phones and paging systems, the gross 15 receipts from the business shall be deemed to originate 16 within the corporate limits of a municipality only if the 17 address to which the bills for the service are sent is within 18 those corporate limits. If, however, that address is not 19 located within a municipality that imposes a tax under this 20 Section, then (i) if the party responsible for the bill is 21 not an individual, the gross receipts from the business shall 22 be deemed to originate within the corporate limits of the 23 municipality where that party's principal place of business 24 in Illinois is located, and (ii) if the party responsible for 25 the bill is an individual, the gross receipts from the 26 business shall be deemed to originate within the corporate 27 limits of the municipality where that party's principal 28 residence in Illinois is located. 29 (e) Any municipality that imposes taxes upon public 30 utilities or upon the privilege of using or consuming 31 electricity pursuant to this Section whose territory includes 32 any part of an enterprise zone or federally designated 33 Foreign Trade Zone or Sub-Zone may, by a majority vote of its 34 corporate authorities, exempt from those taxes for a period -233- SRS90HB0362JJsaam02 1 not exceeding 20 years any specified percentage of gross 2 receipts of public utilities received from, or electricity 3 used or consumed by, business enterprises that: 4 (1) either (i) make investments that cause the 5 creation of a minimum of 200 full-time equivalent jobs in 6 Illinois, (ii) make investments of at least $175,000,000 7 that cause the creation of a minimum of 150 full-time 8 equivalent jobs in Illinois, or (iii) make investments 9 that cause the retention of a minimum of 1,000 full-time 10 jobs in Illinois; and 11 (2) are either (i) located in an Enterprise Zone 12 established pursuant to the Illinois Enterprise Zone Act 13 or (ii) Department of Commerce and Community Affairs 14 designated High Impact Businesses located in a federally 15 designated Foreign Trade Zone or Sub-Zone; and 16 (3) are certified by the Department of Commerce and 17 Community Affairs as complying with the requirements 18 specified in clauses (1) and (2) of this paragraph (e). 19 Upon adoption of the ordinance authorizing the exemption, 20 the municipal clerk shall transmit a copy of that ordinance 21 to the Department of Commerce and Community Affairs. The 22 Department of Commerce and Community Affairs shall determine 23 whether the business enterprises located in the municipality 24 meet the criteria prescribed in this paragraph. If the 25 Department of Commerce and Community Affairs determines that 26 the business enterprises meet the criteria, it shall grant 27 certification. The Department of Commerce and Community 28 Affairs shall act upon certification requests within 30 days 29 after receipt of the ordinance. 30 Upon certification of the business enterprise by the 31 Department of Commerce and Community Affairs, the Department 32 of Commerce and Community Affairs shall notify the Department 33 of Revenue of the certification. The Department of Revenue 34 shall notify the public utilities of the exemption status of -234- SRS90HB0362JJsaam02 1 the gross receipts received from, and the electricity used or 2 consumed by, the certified business enterprises. Such 3 exemption status shall be effective within 3 months after 4 certification. 5 (f) A municipality that imposes taxes upon public 6 utilities or upon the privilege of using or consuming 7 electricity under this Section and whose territory includes 8 part of another unit of local government or a school district 9 may by ordinance exempt the other unit of local government or 10 school district from those taxes. 11 (g) The amendment of this Section by Public Act 84-127 12 shall take precedence over any other amendment of this 13 Section by any other amendatory Act passed by the 84th 14 General Assembly before the effective date of Public Act 15 84-127. 16 (h) In any case in which, before July 1, 1992, a person 17 engaged in the business of transmitting messages through the 18 use of mobile equipment, such as cellular phones and paging 19 systems, has determined the municipality within which the 20 gross receipts from the business originated by reference to 21 the location of its transmitting or switching equipment, then 22 (i) neither the municipality to which tax was paid on that 23 basis nor the taxpayer that paid tax on that basis shall be 24 required to rebate, refund, or issue credits for any such tax 25 or charge collected from customers to reimburse the taxpayer 26 for the tax and (ii) no municipality to which tax would have 27 been paid with respect to those gross receipts if the 28 provisions of this amendatory Act of 1991 had been in effect 29 before July 1, 1992, shall have any claim against the 30 taxpayer for any amount of the tax. 31 (Source: P.A. 89-325, eff. 1-1-96; 90-16, eff. 6-16-97.) 32 ARTICLE 4 -235- SRS90HB0362JJsaam02 1 Section 75. Effective date of Articles 2 and 5 and 2 Sections 25, 26, 30, 35 and 65. Sections 25 and 30 of this 3 amendatory Act of 1997 take effect January 1, 1998. Articles 4 2 and 5 and Sections 26, 35 and 65 of this amendatory Act of 5 1997 take effect August 1, 1998. 6 ARTICLE 5 7 Section 5-1. Short title. This Article shall be known 8 and may be cited as the Electricity Infrastructure 9 Maintenance Fee Law. 10 Section 5-2. Legislative intent. This Law is intended 11 to create a uniform system for the imposition and collection 12 of fees associated with the privilege of using the public 13 right of way for the delivery of electricity. 14 Section 5-3. Definitions. For the purposes of this Law: 15 (a) "Electricity deliverer" means any person who uses 16 any portion of any public rights of way of an Illinois 17 municipality for the purpose of distributing, transmitting, 18 or otherwise delivering electricity, regardless of its 19 source, for use or consumption within that municipality, and 20 not for resale. For purposes of this definition, use of the 21 public rights of way shall not include the use of real 22 property pursuant to the terms of an easement, lease, or 23 other similar property interest held over municipally-owned 24 property. 25 (b) "Delivery of electricity" means the distribution, 26 transmission, or other delivery of electricity through the 27 use of the municipality's public rights of way, regardless of 28 the source of the electricity, for use or consumption within 29 that municipality, and not for resale. The term includes the 30 delivery of electricity for use or consumption by the -236- SRS90HB0362JJsaam02 1 electricity deliverer, except for electricity used or 2 consumed by the electricity deliverer for the production or 3 distribution of electricity. 4 (c) "Person" means any natural individual, firm, trust, 5 estate, partnership, association, joint stock company, joint 6 adventure, corporation, limited liability company, municipal 7 corporation, the State or any of its political subdivisions, 8 any State university created by statute, or a receiver, 9 trustee, guardian, or other representative appointed by order 10 of any court. 11 (d) "Public rights of way" means streets, alleys, and 12 similar public ways, and all areas over and under such public 13 ways, title to which is owned by the municipality, and which 14 are dedicated exclusively to public use. 15 (e) "Purchaser" means any person who uses or consumes, 16 within the corporate limits of the municipality, electricity 17 acquired in a purchase at retail. 18 (f) "Resale" includes any and all sales of electricity 19 for the purpose of a subsequent sale to another, including 20 the sale of electric energy within the meaning of the Federal 21 Power Act (16 U.S.C. 824), but excluding the distribution of 22 electricity to occupants of a building or buildings, or to a 23 group of customers within the municipality, by a person who 24 owns, controls or manages, or acts as agent for, the 25 building, buildings, or group of customers. 26 Section 5-4. Right to franchise contract. A 27 municipality shall be entitled to require a franchise 28 contract from an electricity deliverer as a condition of 29 allowing the electricity deliverer to use any portion of any 30 public right of way within the municipality for the placement 31 and maintenance of facilities for distributing, transmitting, 32 or delivering electricity. Such franchise contract shall be 33 established by ordinance and shall be valid when accepted in -237- SRS90HB0362JJsaam02 1 writing by the electricity deliverer. 2 Section 5-5. Municipal electricity infrastructure 3 maintenance fee. 4 (a) Any municipality that on the effective date of this 5 Law had in effect a franchise agreement with an electricity 6 deliverer may impose an infrastructure maintenance fee upon 7 electricity deliverers, as compensation for granting 8 electricity deliverers the privilege of using public rights 9 of way, in an amount specified in subsection (b) of this 10 Section. If more than one electricity deliverer is 11 responsible for the delivery of the same electricity to the 12 same consumer, the fee related to that electricity shall be 13 imposed upon the electricity deliverer who last physically 14 uses the public way for delivery of that electricity prior to 15 its consumption. 16 (b) (1) In municipalities with a population greater than 17 500,000, the amount of the infrastructure maintenance fee 18 imposed under this Section shall not exceed the following 19 maximum rates for kilowatt-hours delivered within the 20 municipality to each purchaser: 21 (i) For the first 2,000 kilowatt-hours of 22 electricity used or consumed in a month: 0.53 cents per 23 kilowatt-hour; 24 (ii) For the next 48,000 kilowatt-hours of 25 electricity used or consumed in a month: 0.35 cents per 26 kilowatt-hour; 27 (iii) For the next 50,000 kilowatt-hours of 28 electricity used or consumed in a month: 0.31 cents per 29 kilowatt-hour; 30 (iv) For the next 400,000 kilowatt-hours of 31 electricity used or consumed in a month: 0.305 cents per 32 kilowatt-hour; 33 (v) For the next 500,000 kilowatt-hours of -238- SRS90HB0362JJsaam02 1 electricity used or consumed in a month: 0.30 cents per 2 kilowatt-hour; 3 (vi) For the next 2,000,000 kilowatt-hours of 4 electricity used or consumed in a month: 0.28 cents per 5 kilowatt-hour; 6 (vii) For the next 2,000,000 kilowatt-hours of 7 electricity used or consumed in a month: 0.275 cents per 8 kilowatt-hour; 9 (viii) For the next 5,000,000 kilowatt-hours of 10 electricity used or consumed in a month: 0.27 cents per 11 kilowatt-hour; 12 (ix) For the next 10,000,000 kilowatt-hours used or 13 consumed in a month: 0.265 cents per kilowatt-hour; 14 (x) For all kilowatt-hours of electricity in excess 15 of 20,000,000 kilowatt-hours used or consumed in a month: 16 0.26 cents per kilowatt-hour. 17 (2) In municipalities with a population of 500,000 or 18 less, the amount of the infrastructure maintenance fee 19 imposed under this Section shall be imposed based on the 20 kilowatt-hour categories set forth above and shall be 21 calculated on a monthly basis for kilowatt-hours of 22 electricity delivered to each purchaser; provided, that if, 23 immediately prior to imposing an infrastructure maintenance 24 fee, such municipality receives franchise fees, permit fees, 25 free electrical service, or other forms of compensation 26 pursuant to an existing franchise agreement, the rates 27 established for these kilowatt-hour categories for such 28 infrastructure maintenance fee during the term of the 29 franchise agreement shall not exceed rates reasonably 30 calculated, at the time such infrastructure maintenance fee 31 is initially imposed, to generate an amount of revenue 32 equivalent to the value of the compensation received or 33 provided under the franchise agreement. 34 (3) Notwithstanding any other provision of this -239- SRS90HB0362JJsaam02 1 subsection (b), a fee shall not be imposed if and to the 2 extent that imposition or collection of the fee would violate 3 the Constitution or statutes of the United States or the 4 statutes or Constitution of the State of Illinois. 5 (c) Any electricity deliverer may collect the amount of 6 a fee imposed under this Section from the purchaser using or 7 consuming the electricity with respect to which the fee was 8 imposed. The fee may be collected by the electricity 9 deliverer from the purchaser as a separately stated charge on 10 the purchaser's bills or in any other manner permitted from 11 time to time by law or by the electricity deliverer's 12 tariffs. The electricity deliverer shall be allowed credit 13 for any portion of the fee related to deliveries of 14 electricity the charges for which are written off as 15 uncollectible, provided, that if such charges are thereafter 16 collected, the electricity deliverer shall be obligated to 17 pay such fee. For purposes of this Section, any partial 18 payment not specifically identified by the purchaser shall be 19 deemed to be for the delivery of electricity. No ordinance 20 imposing the fee authorized by this Section with respect to 21 the kilowatt-hours delivered to non-residential customers 22 shall be effective until October 1, 1999. For purposes of 23 this Law, the period of time from the effective date of this 24 Law through and including September 30, 1999 shall be 25 referred to as the "Initial Period." 26 (d) As between the electricity deliverer and the 27 municipality, the fee authorized by this Section shall be 28 collected, enforced, and administered by the municipality 29 imposing the fee. Any municipality adopting an ordinance 30 imposing an infrastructure maintenance fee under this Law 31 shall give written notice to each electricity deliverer 32 subject to the fee not less than 60 days prior to the date 33 the fee is imposed. -240- SRS90HB0362JJsaam02 1 Section 5-6. Validity of existing franchise fees and 2 agreement; police powers. 3 (a) On and after the effective date of this Law, no 4 electricity deliverer paying an infrastructure maintenance 5 fee imposed under this Law may be denied the right to use, 6 directly or indirectly, public rights of way because of the 7 failure to pay any other fee or charge for the right to use 8 those rights of way except to the extent that the electricity 9 deliverer during the Initial Period fails under any existing 10 franchise agreement to pay franchise fees which are based on 11 the gross receipts or gross revenues attributable to 12 non-residential customers or to provide free electrical 13 service or other compensation attributable to non-residential 14 customers. A municipality that imposes an infrastructure 15 maintenance fee pursuant to Section 5-5 shall impose no other 16 fees or charges upon electricity deliverers for such use 17 except as provided by subsections (b) or (c) of this Section. 18 (b) Agreements between electricity deliverers and 19 municipalities regarding use of the public way shall remain 20 valid according to and for their stated terms. However, a 21 municipality that, pursuant to a franchise agreement in 22 existence on the effective date of this Law, receives any 23 franchise fees, permit fees, free electrical service or other 24 compensation for use of the public rights of way, may impose 25 an infrastructure maintenance fee pursuant to this Law only 26 if the municipality: (1) waives its right to receive all 27 compensation from the electricity deliverer for use of the 28 public rights of way during the time the infrastructure 29 maintenance fee is imposed, except as provided in subsection 30 (c), and except that during the Initial Period any 31 municipality may continue to receive franchise fees, free 32 electrical service or other compensation from the electricity 33 deliverer which are equal in value to the Initial Period 34 Compensation; and (2) provides written notice of this waiver -241- SRS90HB0362JJsaam02 1 to the appropriate electricity deliverer at the time that the 2 municipality provides notice of the imposition of the 3 infrastructure maintenance fee under subsection (d) of 4 Section 5-5. For purposes of this Section, "Initial Period 5 Compensation" shall mean the total amount of compensation due 6 under the existing franchise agreement during the Initial 7 Period less the amount of the infrastructure maintenance fee 8 imposed under this Section during the Initial Period. 9 (c) Nothing in this Law prohibits a municipality from 10 the reasonable exercise of its police powers over the public 11 rights of way. In addition, a municipality may require an 12 electricity deliverer to reimburse any special or 13 extraordinary expenses or costs reasonably incurred by the 14 municipality as a direct result of damages to its property or 15 public rights of way, such as the costs of restoration of 16 streets damaged by a electricity deliverer that does not make 17 timely repair of the damage, or for the loss of revenue due 18 to the inability to use public facilities as a direct result 19 of the actions of the electricity deliverer, such as parking 20 meters that are required to be removed because of work of an 21 electricity deliverer. 22 ARTICLE 6 23 Section 6-1. Short title. This Article may be cited as 24 the Renewable Energy, Energy Efficiency, and Coal Resources 25 Development Law of 1997. 26 Section 6-2. Findings and intent. The General Assembly 27 finds and declares that it is desirable to obtain the 28 environmental quality, public health, and fuel diversity 29 benefits of developing new renewable energy resources and 30 clean coal technologies for use in Illinois and to lower the 31 cost of renewable energy resources and clean coal resources -242- SRS90HB0362JJsaam02 1 provided to utility consumers. The General Assembly finds and 2 declares that the benefits of electricity from renewable 3 energy resources and clean coal technologies accrue to the 4 public at large, thus consumers and electric utilities and 5 alternative retail electric suppliers share an interest in 6 developing and using a significant level of these 7 environmentally preferable resources in the State's 8 electricity supply portfolio. The General Assembly finds and 9 declares that encouraging energy efficiency will improve the 10 environmental quality and public health in the State of 11 Illinois. 12 Section 6-3. Renewable energy resources program. 13 (a) The Department of Commerce and Community Affairs, to 14 be called the "Department" hereinafter in this Law, shall 15 administer the Renewable Energy Resources Program to provide 16 grants, loans, and other incentives to foster investment in 17 and the development and use of renewable energy resources. 18 (b) The Department shall establish eligibility criteria 19 for grants, loans, and other incentives to foster investment 20 in and the development and use of renewable energy resources. 21 These criteria shall be reviewed annually and adjusted as 22 necessary. The criteria should promote the goal of fostering 23 investment in and the development and use, in Illinois, of 24 renewable energy resources. 25 (c) The Department shall accept applications for grants, 26 loans, and other incentives to foster investment in and the 27 development and use of renewable energy resources. 28 (d) To the extent that funds are available and 29 appropriated, the Department shall provide grants, loans, and 30 other incentives to applicants that meet the criteria 31 specified by the Department. 32 (e) The Department shall conduct an annual study on the 33 use and availability of renewable energy resources in -243- SRS90HB0362JJsaam02 1 Illinois. Each year, the Department shall submit a report on 2 the study to the General Assembly. This report shall include 3 suggestions for legislation which will encourage the 4 development and use of renewable energy resources. 5 (f) As used in this Law, "renewable energy resources" 6 includes energy from wind, solar thermal energy, photovoltaic 7 cells and panels, dedicated crops grown for energy production 8 and organic waste biomass, hydropower that does not involve 9 new construction or significant expansion of hydropower dams, 10 and other such alternative sources of environmentally 11 preferable energy. "Renewable energy resources" does not 12 include, however, energy from the incineration, burning or 13 heating of waste wood, tires, garbage, general household, 14 institutional and commercial waste, industrial lunchroom or 15 office waste, landscape waste, or construction or demolition 16 debris. 17 Section 6-4. Renewable Energy Resources Trust Fund. 18 (a) A fund to be called the Renewable Energy Resources 19 Trust Fund is hereby established in the State Treasury. 20 (b) The Renewable Energy Resources Trust Fund shall be 21 administered by the Department to provide grants, loans, and 22 other incentives to foster investment in and the development 23 and use of renewable energy resources as provided in Section 24 6-3 of this Law. 25 (c) All funds used by the Department for the Renewable 26 Energy Resources Program shall be subject to appropriation by 27 the General Assembly. 28 Section 6-5. Renewable Energy Resources and Coal 29 Technology Development Assistance Charge. 30 (a) Beginning January 1, 1998, the following charges 31 shall be imposed: 32 (1) $0.05 per month on each account for residential -244- SRS90HB0362JJsaam02 1 electric service as defined in Section 13 of the Energy 2 Assistance Act of 1989; 3 (2) $0.05 per month on each account for residential 4 gas service as defined in Section 13 of the Energy 5 Assistance Act of 1989; 6 (3) $0.50 per month on each account for 7 nonresidential electric service, as defined in Section 13 8 of the Energy Assistance Act of 1989, taking less than 10 9 megawatts of peak demand during the previous calendar 10 year; 11 (4) $0.50 per month on each account for 12 nonresidential gas service, as defined in Section 13 of 13 the Energy Assistance Act of 1989, taking less than 14 4,000,000 therms of gas during the previous calendar 15 year; 16 (5) $37.50 per month on each account for 17 nonresidential electric service, as defined in Section 13 18 of the Energy Assistance Act of 1989, taking 10 megawatts 19 or greater of peak demand during the previous calendar 20 year; and 21 (6) $37.50 per month on each account for 22 nonresidential gas service, as defined in Section 13 of 23 the Energy Assistance Act of 1989, taking 4,000,000 or 24 more therms of gas during the previous calendar year. 25 (b) Except as provided in subsection (e) of this 26 Section, this charge is to be collected by electric and gas 27 utilities, whether owned by investors, municipalities or 28 cooperatives, and alternative retail electric suppliers on a 29 monthly basis from their respective customers. 30 (c) Fifty percent of the moneys collected pursuant to 31 this Section shall be deposited in the Renewable Energy 32 Resources Trust Fund. The remaining 50 percent of the moneys 33 collected pursuant to this Section shall be deposited in the 34 Coal Technology Development Assistance Fund for use under the -245- SRS90HB0362JJsaam02 1 Illinois Coal Technology Development Assistance Act. 2 (d) On a monthly basis, each utility and alternative 3 retail electric supplier collecting charges pursuant to this 4 Section shall remit to the Department for deposit in the 5 Renewable Energy Resources Trust Fund all moneys received as 6 payment of the charge provided for in this Section. 7 (e) The charges imposed by this Section shall only apply 8 to customers of municipal electric utilities and electric 9 cooperatives if the municipal electric utility or electric 10 cooperative makes an affirmative decision to impose the 11 charge. If a municipal electric utility or electric 12 cooperative does not assess this charge, its customers shall 13 not be eligible for the Renewable Energy Resources Program. 14 Section 6-6. Energy efficiency program. 15 (a) For the year beginning January 1, 1998, and 16 thereafter as provided in this Section, each electric utility 17 and each alternative retail electric supplier supplying 18 electric power and energy to retail customers located in the 19 State of Illinois shall contribute annually to the Department 20 a pro rata share of a total amount of $3,000,000 based upon 21 the number of kilowatt-hours sold by each such entity in the 22 12 months preceding the year of contribution. These 23 contributions shall be remitted to the Department on or 24 before June 30 of each year the contribution is due. The 25 funds received by the Department pursuant to this Section 26 shall be subject to the appropriation of funds by the General 27 Assembly. The Department shall place the funds remitted 28 under this Section in a trust fund, that is hereby created in 29 the State Treasury, called the Energy Efficiency Trust Fund. 30 (b) The Department shall disburse the moneys in the 31 Energy Efficiency Trust Fund to residential electric 32 customers to fund projects which the Department has 33 determined will promote energy efficiency in the State of -246- SRS90HB0362JJsaam02 1 Illinois. The Department shall establish a list of projects 2 eligible for grants from the Energy Efficiency Trust Fund 3 including, but not limited to, supporting energy efficiency 4 efforts for low-income households, replacing energy 5 inefficient windows with more efficient windows, replacing 6 energy inefficient appliances with more efficient appliances, 7 replacing energy inefficient lighting with more efficient 8 lighting, insulating dwellings and buildings, and such other 9 projects which will increase energy efficiency in homes and 10 rental properties. 11 (c) The Department shall establish criteria and an 12 application process for this grant program. 13 (d) The Department shall conduct a study of other 14 possible energy efficiency improvements and evaluate methods 15 for promoting energy efficiency and conservation, especially 16 for the benefit of low-income customers. 17 (e) The Department shall submit an annual report to the 18 General Assembly evaluating the effectiveness of the projects 19 and programs provided in this Section, and recommending 20 further legislation which will encourage additional 21 development and implementation of energy efficiency projects 22 and programs in Illinois and other actions that help to meet 23 the goals of this Section. 24 Section 6-7. Repeal. The provisions of this Law are 25 repealed 10 years after the effective date of this amendatory 26 Act of 1997 unless renewed by act of the General Assembly. 27 Section 80. The Illinois Coal Technology Development 28 Assistance Act is amended by changing Section 3 as follows: 29 (30 ILCS 730/3) (from Ch. 96 1/2, par. 8203) 30 Sec. 3. Transfers to Coal Technology Development 31 Assistance Funds. As soon as may be practicable after the -247- SRS90HB0362JJsaam02 1 first day of each month, the Department of Revenue shall 2 certify to the Treasurer an amount equal to 1/64 of the 3 revenue realized from the tax imposed by the Electricity 4 Excise Tax Law, Section 2 of the Public Utilities Revenue 5 Act, Section 2 of the Messages Tax Act, and Section 2 of the 6 Gas Revenue Tax Act, during the preceding month. Upon 7 receipt of the certification, the Treasurer shall transfer 8 the amount shown on such certification from the General 9 Revenue Fund to the Coal Technology Development Assistance 10 Fund, which is hereby created as a special fund in the State 11 treasury, except that no transfer shall be made in any month 12 in which the Fund from moneys received under this Section has 13 reached the following balance: 14 (1) $7,000,000 during fiscal year 1994. 15 (2) $8,500,000 during fiscal year 1995. 16 (3) $10,000,000 during fiscal year 1996 and each 17 year thereafter. 18 (Source: P.A. 88-391.) 19 Section 85. The Energy Assistance Act of 1989 is amended 20 by changing Section 5 and adding Sections 13 and 14 as 21 follows: 22 (305 ILCS 20/5) (from Ch. 111 2/3, par. 1405) 23 (Text of Section before amendment by P.A. 89-507) 24 Sec. 5. Policy Advisory Council. 25 (a) Within the Department of Commerce and Community 26 Affairs is created a Policy Advisory Council to be comprised 27 of: 28 (1) the following ex officio members or their 29 designees: the Director of Commerce and Community 30 Affairs who shall serve as Chair of the Committee, the 31 Director of Natural Resources, the Director of Public 32 Aid, and the Chairman of the Illinois Commerce -248- SRS90HB0362JJsaam02 1 Commission; and 2 (2) 9 persons who shall be appointed by the 3 Governor to serve 2 year terms and until their successors 4 are appointed and qualified, 3 of whom shall be persons 5 who represent low income households or organizations 6 which represent such households, 3 of whom shall be 7 representatives of public utilities or other entities 8 which provide winter energy services, and 3 of whom shall 9 be representatives of local agencies engaged by the 10 Department to assist in the administration of this Act. 11 (3) 6 persons who shall be appointed by the 12 Director of the Department of Commerce and Community 13 Affairs to serve 2twoyear terms and until their 14 successors are appointed and qualified, who shall be 15 persons meeting such qualifications as may be required by 16 the federal government for the administration of the 17 Weatherization Assistance Program funded by the U.S. 18 Department of Energy and any such related energy 19 assistance programs. 20 (4) Members shall serve without compensation, but 21 may receive reimbursement for actual costs incurred in 22 fulfilling their duties as members of the Council. 23 (b) The Policy Advisory Council shall have the following 24 duties: 25 (1) to monitor the administration of this Act to 26 ensure effective, efficient, and coordinated program 27 development and implementation; 28 (2) to assist the Department in developing and 29 administering rules and regulations required to be 30 promulgated pursuant to this Act in a manner consistent 31 with the purpose and objectives of this Act; 32 (3) to facilitate and coordinate the collection and 33 exchange of all program data and other information needed 34 by the Department and others in fulfilling their duties -249- SRS90HB0362JJsaam02 1 pursuant to this Act; 2 (4) to advise the Department on the proper level of 3 support required for effective administration of the Act; 4 (5) to provide a written opinion concerning any 5 regulation proposed pursuant to this Act, and to review 6 and comment on any energy assistance or related plan 7 required to be prepared by the Department;and8 (6) on or before March 1 of each year beginning in 9 1990, to prepare and submit a report to the Governor and 10 General Assembly which describes the activities of the 11 Department in the development and implementation of 12 energy assistance and related policies and programs, 13 which characterizes progress towards meeting the 14 objectives and requirements of this Act, and which 15 recommends any statutory changes which might be needed to 16 further such progress. The report submitted in 1991 17 shall include an analysis of and recommendations 18 regarding this Act's provisions concerning State payment 19 of pre-program arrearages; and.20 (7) to advise the Department on the use of funds 21 collected pursuant to Section 13 of this Act, and on any 22 changes to existing low-income energy assistance programs 23 to make effective use of such funds, so long as such uses 24 and changes are consistent with the requirements of 25 subsection (a) of Section 13 of this Act. 26 (Source: P.A. 89-445, eff. 2-7-96.) 27 (Text of Section after amendment by P.A. 89-507) 28 Sec. 5. Policy Advisory Council. 29 (a) Within the Department of Commerce and Community 30 Affairs is created a Policy Advisory Council to be comprised 31 of: 32 (1) the following ex officio members or their 33 designees: the Director of Commerce and Community 34 Affairs who shall serve as Chair of the Committee, the -250- SRS90HB0362JJsaam02 1 Director of Natural Resources, the Secretary of Human 2 Services, and the Chairman of the Illinois Commerce 3 Commission; and 4 (2) 9 persons who shall be appointed by the 5 Governor to serve 2 year terms and until their successors 6 are appointed and qualified, 3 of whom shall be persons 7 who represent low income households or organizations 8 which represent such households, 3 of whom shall be 9 representatives of public utilities or other entities 10 which provide winter energy services, and 3 of whom shall 11 be representatives of local agencies engaged by the 12 Department to assist in the administration of this Act. 13 (3) 6 persons who shall be appointed by the 14 Director of the Department of Commerce and Community 15 Affairs to serve 2twoyear terms and until their 16 successors are appointed and qualified, who shall be 17 persons meeting such qualifications as may be required by 18 the federal government for the administration of the 19 Weatherization Assistance Program funded by the U.S. 20 Department of Energy and any such related energy 21 assistance programs. 22 (4) Members shall serve without compensation, but 23 may receive reimbursement for actual costs incurred in 24 fulfilling their duties as members of the Council. 25 (b) The Policy Advisory Council shall have the following 26 duties: 27 (1) to monitor the administration of this Act to 28 ensure effective, efficient, and coordinated program 29 development and implementation; 30 (2) to assist the Department in developing and 31 administering rules and regulations required to be 32 promulgated pursuant to this Act in a manner consistent 33 with the purpose and objectives of this Act; 34 (3) to facilitate and coordinate the collection and -251- SRS90HB0362JJsaam02 1 exchange of all program data and other information needed 2 by the Department and others in fulfilling their duties 3 pursuant to this Act; 4 (4) to advise the Department on the proper level of 5 support required for effective administration of the Act; 6 (5) to provide a written opinion concerning any 7 regulation proposed pursuant to this Act, and to review 8 and comment on any energy assistance or related plan 9 required to be prepared by the Department;and10 (6) on or before March 1 of each year beginning in 11 1990, to prepare and submit a report to the Governor and 12 General Assembly which describes the activities of the 13 Department in the development and implementation of 14 energy assistance and related policies and programs, 15 which characterizes progress towards meeting the 16 objectives and requirements of this Act, and which 17 recommends any statutory changes which might be needed to 18 further such progress. The report submitted in 1991 19 shall include an analysis of and recommendations 20 regarding this Act's provisions concerning State payment 21 of pre-program arrearages; and.22 (7) to advise the Department on the use of funds 23 collected pursuant to Section 13 of this Act, and on any 24 changes to existing low-income energy assistance programs 25 to make effective use of such funds, so long as such uses 26 and changes are consistent with the requirements of 27 subsection (a) of Section 13 of this Act. 28 (Source: P.A. 89-445, eff. 2-7-96; 89-507, eff. 7-1-97.) 29 (305 ILCS 20/13 new) 30 Sec. 13. Supplemental Low-Income Energy Assistance Fund. 31 (a) The Supplemental Low-Income Energy Assistance Fund 32 is hereby created as a special fund in the State Treasury. 33 The Supplemental Low-Income Energy Assistance Fund is -252- SRS90HB0362JJsaam02 1 authorized to receive, by statutory deposit, the moneys 2 collected pursuant to this Section. Subject to 3 appropriation, the Department shall use moneys from the 4 Supplemental Low-Income Energy Assistance Fund for payments 5 to electric or gas public utilities, municipal electric or 6 gas utilities, and electric cooperatives on behalf of their 7 customers who are participants in the program authorized by 8 Section 4 of this Act, for the provision of weatherization 9 services and for administration of the Supplemental 10 Low-Income Energy Assistance Fund. The yearly expenditures 11 for weatherization may not exceed 10% of the amount collected 12 during the year pursuant to this Section. In determining 13 which customers will participate in the weatherization 14 component, the Department shall target weatherization for 15 those customers with the greatest energy burden, that is the 16 lowest income and greatest utility bills. The yearly 17 administrative expenses of the Supplemental Low-Income Energy 18 Assistance Fund may not exceed 10% of the amount collected 19 during that year pursuant to this Section. 20 (b) Notwithstanding the provisions of Section 16-111 of 21 the Public Utilities Act, each public utility, electric 22 cooperative, as defined in Section 3.4 of the Electric 23 Supplier Act, and municipal utility, as referenced in Section 24 3-105 of the Public Utilities Act, that is engaged in the 25 delivery of electricity or the distribution of natural gas 26 within the State of Illinois shall, effective January 1, 27 1998, assess each of its customer accounts a monthly Energy 28 Assistance Charge for the Supplemental Low-Income Energy 29 Assistance Fund. The monthly charge shall be as follows: 30 (1) $0.40 per month on each account for residential 31 electric service; 32 (2) $0.40 per month on each account for residential 33 gas service; 34 (3) $4 per month on each account for -253- SRS90HB0362JJsaam02 1 non-residential electric service which had less than 10 2 megawatts of peak demand during the previous calendar 3 year; 4 (4) $4 per month on each account for 5 non-residential gas service which had distributed to it 6 less than 4,000,000 therms of gas during the previous 7 calendar year; 8 (5) $300 per month on each account for 9 non-residential electric service which had 10 megawatts 10 or greater of peak demand during the previous calendar 11 year; and 12 (6) $300 per month on each account for 13 non-residential gas service which had 4,000,000 or more 14 therms of gas distributed to it during the previous 15 calendar year. 16 (c) For purposes of this Section: 17 (1) "residential electric service" means electric 18 utility service for household purposes delivered to a 19 dwelling of 2 or fewer units which is billed under a 20 residential rate, or electric utility service for 21 household purposes delivered to a dwelling unit or units 22 which is billed under a residential rate and is 23 registered by a separate meter for each dwelling unit; 24 (2) "residential gas service" means gas utility 25 service for household purposes distributed to a dwelling 26 of 2 or fewer units which is billed under a residential 27 rate, or gas utility service for household purposes 28 distributed to a dwelling unit or units which is billed 29 under a residential rate and is registered by a separate 30 meter for each dwelling unit; 31 (3) "non-residential electric service" means 32 electric utility service which is not residential 33 electric service; and 34 (4) "non-residential gas service" means gas utility -254- SRS90HB0362JJsaam02 1 service which is not residential gas service. 2 (d) At least 45 days prior to the date on which it must 3 begin assessing Energy Assistance Charges, each public 4 utility engaged in the delivery of electricity or the 5 distribution of natural gas shall file with the Illinois 6 Commerce Commission tariffs incorporating the Energy 7 Assistance Charge in other charges stated in such tariffs. 8 (e) The Energy Assistance Charge assessed by electric 9 and gas public utilities shall be considered a charge for 10 public utility service. 11 (f) On a monthly basis, each public utility, municipal 12 utility, and electric cooperative shall remit to the 13 Department of Revenue all moneys received as payment of the 14 Energy Assistance Charge. If a customer makes a partial 15 payment, a public utility, municipal utility, or electric 16 cooperative may elect either: (i) to apply such partial 17 payments first to amounts owed to the utility or cooperative 18 for its services and then to payment for the Energy 19 Assistance Charge or (ii) to apply such partial payments on a 20 pro-rata basis between amounts owed to the utility or 21 cooperative for its services and to payment for the Energy 22 Assistance Charge. 23 (g) The Department of Revenue shall deposit into the 24 Supplemental Low-Income Energy Assistance Fund all moneys 25 remitted to it in accordance with subsection (f) of this 26 Section. 27 (h) If as of December 31, 2002 the program authorized by 28 Section 4 of this Act has not been replaced by a new energy 29 assistance program which is in operation, then the General 30 Assembly shall review the program; provided however, that 31 after that date, any public utility, municipal utility, or 32 electric cooperative shall continue to assess an Energy 33 Assistance Charge which was originally assessed on or before 34 December 31, 2002 and which remains unpaid. -255- SRS90HB0362JJsaam02 1 On or before December 31, 2003, the Department shall 2 prepare a report for the General Assembly on the expenditure 3 of funds appropriated from the Low-Income Energy Assistance 4 Block Grant Fund for the program authorized under Section 4 5 of this Act. 6 (i) The Department of Revenue may establish such rules 7 as it deems necessary to implement this Section. 8 (j) The Department of Commerce and Community Affairs may 9 establish such rules as it deems necessary to implement this 10 Section. 11 (k) The charges imposed by this Section shall only apply 12 to customers of municipal electric utilities and electric 13 cooperatives if the municipal electric utility or electric 14 cooperative makes an affirmative decision to impose the 15 charge. If a municipal electric utility or electric 16 cooperative does not assess this charge, the Department may 17 not use funds from the Supplemental Low-Income Energy 18 Assistance Fund to provide benefits to its customers under 19 the program authorized by Section 4 of this Act. 20 (305 ILCS 20/14 new) 21 Sec. 14. Energy Assistance Program Design Group. 22 (a) This Section establishes an Energy Assistance 23 Program Design Group to advise the General Assembly with 24 respect to designing a low-income energy assistance program 25 for the period beginning on January 1, 2003. 26 (b) As promptly as practicable following the enactment 27 of this amendatory Act of 1997, the General Assembly, or a 28 Joint Committee thereof, shall establish an Energy Assistance 29 Program Design Group. The Energy Assistance Program Design 30 Group shall be chaired by the Director of the Department of 31 Commerce and Community Affairs and shall include one 32 representative of each of the following: (i) the Illinois 33 Commerce Commission; (ii) the Department of Natural -256- SRS90HB0362JJsaam02 1 Resources; (iii) electric public utilities; (iv) gas public 2 utilities; (v) combination gas and electric public utilities; 3 (vi) municipal utilities and electric cooperatives; (vii) 4 electricity and natural gas marketers; (viii) low-income 5 energy customers; (ix) local agencies engaged by the 6 Department of Commerce and Community Affairs to assist in the 7 administration of the Energy Assistance Act of 1989; (x) 8 residential energy customers; (xi) commercial energy 9 customers; and (xii) industrial energy customers. 10 (c) Within 3 months of its establishment, the Energy 11 Assistance Program Design Group shall meet to begin 12 consideration of the design and implementation of an energy 13 assistance program in Illinois for the period beginning on 14 January 1, 2003. Within 12 months of its establishment, the 15 Program Design Group shall hold public hearings to assist its 16 deliberations. 17 (d) The Program Design Group shall provide a report 18 containing its recommendations to the General Assembly on or 19 before January 1, 2002. This report must include the 20 following: 21 (1) recommendations on the definition of an 22 eligible low-income residential customer; 23 (2) recommendations regarding the continuation of 24 the program authorized by Section 4 of this Act and the 25 Supplemental Low-Income Energy Assistance Fund; 26 (3) recommendations on ensuring low-income 27 residential customers have access to essential energy 28 services; 29 (4) recommendations on addressing past due amounts 30 owed to utilities by low-income persons in Illinois; 31 (5) demographic and other information (including 32 household consumption information) necessary to determine 33 the total number of customers eligible for assistance, 34 the total number of customers likely to apply for -257- SRS90HB0362JJsaam02 1 assistance, and funding estimates for any recommended 2 program; 3 (6) recommendations on appropriate measures to 4 encourage energy conservation, efficiency, and 5 responsibility among low-income residential customers; 6 (7) any recommended changes to existing 7 legislation; and 8 (8) an estimate of the cost of implementing the 9 Program Design Group's recommendations. 10 (e) The recommendations adopted by the Program Design 11 Group shall be competitively neutral in their impact on 12 providers in the energy market and shall spread program costs 13 across the broadest possible base. 14 (f) The Department of Commerce and Community Affairs 15 shall hold public hearings on the recommendations of the 16 Energy Assistance Program Design Group during calendar year 17 2002. 18 Section 90. The State Finance Act is amended by adding 19 Sections 5.449, 5.450, and 5.451 as follows: 20 (30 ILCS 105/5.449 new) 21 Sec. 5.449. The Renewable Energy Resources Trust Fund. 22 (30 ILCS 105/5.450 new) 23 Sec. 5.450. The Energy Efficiency Trust Fund. 24 (30 ILCS 105/5.451 new) 25 Sec. 5.451. The Supplemental Low-Income Energy Assistance 26 Fund. 27 Section 95. The Illinois Antitrust Act is amended by 28 changing Section 5 as follows: -258- SRS90HB0362JJsaam02 1 (740 ILCS 10/5) (from Ch. 38, par. 60-5) 2 Sec. 5. No provisions of this Act shall be construed to 3 make illegal: 4 (1) the activities of any labor organization or of 5 individual members thereof which are directed solely to labor 6 objectives which are legitimate under the laws of either the 7 State of Illinois or the United States; 8 (2) the activities of any agricultural or horticultural 9 cooperative organization, whether incorporated or 10 unincorporated, or of individual members thereof, which are 11 directed solely to objectives of such cooperative 12 organizations which are legitimate under the laws of either 13 the State of Illinois or the United States; 14 (3) the activities of any public utility, as defined in 15 Section 3-105 of the Public Utilities Act to the extent that 16 such activities are subject to a clearly articulated and 17 affirmatively expressed State policy to replace competition 18 with regulation, where the conduct to be exempted is actively 19 supervised by the State itselfthe jurisdiction of the20Illinois Commerce Commission; 21 (4) The activities of a telecommunications carrier, as 22 defined in Section 13-202 of the Public Utilities Act, to the 23 extent those activities relate to the provision of 24 noncompetitive telecommunications services under the Public 25 Utilities Act and are subject to the jurisdiction of the 26 Illinois Commerce Commission or to the activities of 27 telephone mutual concerns referred to in Section 13-202 of 28 the Public Utilities Act to the extent those activities 29 relate to the provision and maintenance of telephone service 30 to owners and customers; 31 (5) the activities (including, but not limited to, the 32 making of or participating in joint underwriting or joint 33 reinsurance arrangement) of any insurer, insurance agent, 34 insurance broker, independent insurance adjuster or rating -259- SRS90HB0362JJsaam02 1 organization to the extent that such activities are subject 2 to regulation by the Director of Insurance of this State 3 under, or are permitted or are authorized by, the Insurance 4 Code or any other law of this State; 5 (6) the religious and charitable activities of any 6 not-for-profit corporation, trust or organization established 7 exclusively for religious or charitable purposes, or for both 8 purposes; 9 (7) the activities of any not-for-profit corporation 10 organized to provide telephone service on a mutual or 11 co-operative basis or electrification on a co-operative 12 basis, to the extent such activities relate to the marketing 13 and distribution of telephone or electrical service to owners 14 and customers; 15 (8) the activities engaged in by securities dealers who 16 are (i) licensed by the State of Illinois or (ii) members of 17 the National Association of Securities Dealers or (iii) 18 members of any National Securities Exchange registered with 19 the Securities and Exchange Commission under the Securities 20 Exchange Act of 1934, as amended, in the course of their 21 business of offering, selling, buying and selling, or 22 otherwise trading in or underwriting securities, as agent, 23 broker, or principal, and activities of any National 24 Securities Exchange so registered, including the 25 establishment of commission rates and schedules of charges; 26 (9) the activities of any board of trade designated as a 27 "contract market" by the Secretary of Agriculture of the 28 United States pursuant to Section 5 of the Commodity Exchange 29 Act, as amended; 30 (10) the activities of any motor carrier, rail carrier, 31 or common carrier by pipeline, as defined in the Common 32 Carrier by Pipeline Law of the Public Utilities Act, to the 33 extent that such activities are permitted or authorized by 34 the Act or are subject to regulation by the Illinois Commerce -260- SRS90HB0362JJsaam02 1 Commission; 2 (11) the activities of any state or national bank to the 3 extent that such activities are regulated or supervised by 4 officers of the state or federal government under the banking 5 laws of this State or the United States; 6 (12) the activities of any state or federal savings and 7 loan association to the extent that such activities are 8 regulated or supervised by officers of the state or federal 9 government under the savings and loan laws of this State or 10 the United States; 11 (13) the activities of any bona fide not-for-profit 12 association, society or board, of attorneys, practitioners of 13 medicine, architects, engineers, land surveyors or real 14 estate brokers licensed and regulated by an agency of the 15 State of Illinois, in recommending schedules of suggested 16 fees, rates or commissions for use solely as guidelines in 17 determining charges for professional and technical services; 18 (14) Conduct involving trade or commerce (other than 19 import trade or import commerce) with foreign nations unless: 20 (a) such conduct has a direct, substantial, and 21 reasonably foreseeable effect: 22 (i) on trade or commerce which is not trade or 23 commerce with foreign nations, or on import trade or 24 import commerce with foreign nations; or 25 (ii) on export trade or export commerce with 26 foreign nations of a person engaged in such trade or 27 commerce in the United States; and 28 (b) such effect gives rise to a claim under the 29 provisions of this Act, other than this subsection (14). 30 (c) If this Act applies to conduct referred to in 31 this subsection (14) only because of the provisions of 32 paragraph (a)(ii), then this Act shall apply to such 33 conduct only for injury to export business in the United 34 States which affects this State; or -261- SRS90HB0362JJsaam02 1 (15) the activities of a unit of local government or 2 school district and the activities of the employees, agents 3 and officers of a unit of local government or school 4 district. 5 (Source: P.A. 90-185, eff. 7-23-97.) 6 Section 97. No acceleration or delay. Where this Act 7 makes changes in a statute that is represented in this Act by 8 text that is not yet or no longer in effect (for example, a 9 Section represented by multiple versions), the use of that 10 text does not accelerate or delay the taking effect of (i) 11 the changes made by this Act or (ii) provisions derived from 12 any other Public Act. 13 ARTICLE 8 14 Section 99. Effective date. Except as provided in 15 Article 4, this Act takes effect on becoming law.".