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90_HB2433 220 ILCS 5/16-111 Amends the Public Utilities Act. Provides that under the Electric Service Customer Choice and Rate Relief Law of 1997 residential retail rates shall be reduced effective February 1, rather than August 1, 1998. Effective immediately. LRB9008410JSgc LRB9008410JSgc 1 AN ACT to amend the Public Utilities Act by changing 2 Section 16-111. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Public Utilities Act is amended by 6 changing Section 16-111 as follows: 7 (220 ILCS 5/16-111) 8 Sec. 16-111. Rates and restructuring transactions during 9 mandatory transition period. 10 (a) During the mandatory transition period, 11 notwithstanding any provision of Article IX of this Act, and 12 except as provided in subsections (b), (d), (e), and (f) of 13 this Section, the Commission shall not (i) initiate, 14 authorize or order any change by way of increase (other than 15 in connection with a request for rate increase which was 16 filed after September 1, 1997 but prior to October 15, 1997, 17 by an electric utility serving less than 12,500 customers in 18 this State), (ii) initiate or, unless requested by the 19 electric utility, authorize or order any change by way of 20 decrease, restructuring or unbundling (except as provided in 21 Section 16-109A), in the rates of any electric utility that 22 were in effect on October 1, 1996, or (iii) in any order 23 approving any application for a merger pursuant to Section 24 7-204 that was pending as of May 16, 1997, impose any 25 condition requiring any filing for an increase, decrease, or 26 change in, or other review of, an electric utility's rates or 27 enforce any such condition of any such order; provided, 28 however, that this subsection shall not prohibit the 29 Commission from: 30 (1) approving the application of an electric 31 utility to implement an alternative to rate of return -2- LRB9008410JSgc 1 regulation or a regulatory mechanism that rewards or 2 penalizes the electric utility through adjustment of 3 rates based on utility performance, pursuant to Section 4 9-244; 5 (2) authorizing an electric utility to eliminate 6 its fuel adjustment clause and adjust its base rate 7 tariffs in accordance with subsection (b), (d), or (f) of 8 Section 9-220 of this Act, to fix its fuel adjustment 9 factor in accordance with subsection (c) of Section 9-220 10 of this Act, or to eliminate its fuel adjustment clause 11 in accordance with subsection (e) of Section 9-220 of 12 this Act; 13 (3) ordering into effect tariffs for delivery 14 services and transition charges in accordance with 15 Sections 16-104 and 16-108, for real-time pricing in 16 accordance with Section 16-107, or the options required 17 by Section 16-110 and subsection (n) of 16-112, allowing 18 a billing experiment in accordance with Section 16-106, 19 or modifying delivery services tariffs in accordance with 20 Section 16-109; or 21 (4) ordering or allowing into effect any tariff to 22 recover charges pursuant to Sections 9-201.5, 9-220.1, 23 9-221, 9-222 (except as provided in Section 9-222.1), 24 16-108, and 16-114 of this Act, Section 5-5 of the 25 Electricity Infrastructure Maintenance Fee Law, Section 26 6-5 of the Renewable Energy, Energy Efficiency, and Coal 27 Resources Development Law of 1997, and Section 13 of the 28 Energy Assistance Act of 1989. 29 (b) Notwithstanding the provisions of subsection (a), 30 each Illinois electric utility serving more than 12,500 31 customers in Illinois shall file tariffs (i) reducing, 32 effective February
August1, 1998, each component of its base 33 rates to residential retail customers by 15% from the base 34 rates in effect immediately prior to January 1, 1998 and (ii) -3- LRB9008410JSgc 1 if the public utility provides electric service to more than 2 500,000 customers in this State on December 16, the effective3 date of this amendatory Act of1997, reducing, effective May 4 1, 2002, each component of its base rates to residential 5 retail customers by an additional 5% from the base rates in 6 effect immediately prior to January 1, 1998. Provided, 7 however, that (A) if an electric utility's average 8 residential retail rate is less than or equal to the average 9 residential retail rate for a group of Midwest Utilities 10 (consisting of all investor-owned electric utilities with 11 annual system peaks in excess of 1000 megawatts in the States 12 of Illinois, Indiana, Iowa, Kentucky, Michigan, Missouri, 13 Ohio, and Wisconsin), based on data reported on Form 1 to the 14 Federal Energy Regulatory Commission for calendar year 1995, 15 then it shall only be required to file tariffs (i) reducing, 16 effective February August1, 1998, each component of its base 17 rates to residential retail customers by 5% from the base 18 rates in effect immediately prior to January 1, 1998, (ii) 19 reducing, effective October 1, 2000, each component of its 20 base rates to residential retail customers by the lesser of 21 5% of the base rates in effect immediately prior to January 22 1, 1998 or the percentage by which the electric utility's 23 average residential retail rate exceeds the average 24 residential retail rate of the Midwest Utilities, based on 25 data reported on Form 1 to the Federal Energy Regulatory 26 Commission for calendar year 1999, and (iii) reducing, 27 effective October 1, 2002, each component of its base rates 28 to residential retail customers by an additional amount equal 29 to the lesser of 5% of the base rates in effect immediately 30 prior to January 1, 1998 or the percentage by which the 31 electric utility's average residential retail rate exceeds 32 the average residential retail rate of the Midwest Utilities, 33 based on data reported on Form 1 to the Federal Energy 34 Regulatory Commission for calendar year 2001; and (B) if the -4- LRB9008410JSgc 1 average residential retail rate of an electric utility 2 serving between 150,000 and 250,000 retail customers in this 3 State on January 1, 1995 is less than or equal to 90% of the 4 average residential retail rate for the Midwest Utilities, 5 based on data reported on Form 1 to the Federal Energy 6 Regulatory Commission for calendar year 1995, then it shall 7 only be required to file tariffs (i) reducing, effective 8 February August1, 1998, each component of its base rates to 9 residential retail customers by 2% from the base rates in 10 effect immediately prior to January 1, 1998; (ii) reducing, 11 effective October 1, 2000, each component of its base rates 12 to residential retail customers by 2% from the base rate in 13 effect immediately prior to January 1, 1998; and (iii) 14 reducing, effective October 1, 2002, each component of its 15 base rates to residential retail customers by 1% from the 16 base rates in effect immediately prior to January 1, 1998. 17 Provided, further, that any electric utility for which a 18 decrease in base rates has been or is placed into effect 19 between October 1, 1996 and the dates specified in the 20 preceding sentences of this subsection, other than pursuant 21 to the requirements of this subsection, shall be entitled to 22 reduce the amount of any reduction or reductions in its base 23 rates required by this subsection by the amount of such other 24 decrease. The tariffs required under this subsection shall be 25 filed 45 days in advance of the effective date. 26 Notwithstanding anything to the contrary in Section 9-220 of 27 this Act, no restatement of base rates in conjunction with 28 the elimination of a fuel adjustment clause under that 29 Section shall result in a lesser decrease in base rates than 30 customers would otherwise receive under this subsection had 31 the electric utility's fuel adjustment clause not been 32 eliminated. 33 (c) Any utility reducing its base rates by 15% on 34 February August1, 1998 pursuant to subsection (b) shall -5- LRB9008410JSgc 1 include the following statement on its bills for residential 2 customers from February August1 through December 31, 1998: 3 "Effective February August1, 1998, your rates have been 4 reduced by 15% by the Electric Service Customer Choice and 5 Rate Relief Law of 1997 passed by the Illinois General 6 Assembly.". Any utility reducing its base rates by 5% on 7 February August1, 1998, pursuant to subsection (b) shall 8 include the following statement on its bills for residential 9 customers from February August1 through December 31, 1998: 10 "Effective February August1, 1998, your rates have been 11 reduced by 5% by the Electric Service Customer Choice and 12 Rate Relief Law of 1997 passed by the Illinois General 13 Assembly.". 14 Any utility reducing its base rates by 2% on February 15 August1, 1998 pursuant to subsection (b) shall include the 16 following statement on its bills for residential customers 17 from February August1 through December 31, 1998: "Effective 18 February August1, 1998, your rates have been reduced by 2% 19 by the Electric Service Customer Choice and Rate Relief Law 20 of 1997 passed by the Illinois General Assembly.". 21 (d) During the mandatory transition period, but not 22 before January 1, 2000, and notwithstanding the provisions 23 of subsection (a), an electric utility may request an 24 increase in its base rates if the electric utility 25 demonstrates that the 2-year average of its earned rate of 26 return on common equity, calculated as its net income 27 applicable to common stock divided by the average of its 28 beginning and ending balances of common equity using data 29 reported in the electric utility's Form 1 report to the 30 Federal Energy Regulatory Commission but adjusted to remove 31 the effects of accelerated depreciation or amortization or 32 other transition or mitigation measures implemented by the 33 electric utility pursuant to subsection (g) of this Section 34 and the effect of any refund paid pursuant to subsection (e) -6- LRB9008410JSgc 1 of this Section, is below the 2-year average for the same 2 2 years of the monthly average yields of 30-year U.S. Treasury 3 bonds published by the Board of Governors of the Federal 4 Reserve System in its weekly H.15 Statistical Release or 5 successor publication. The Commission shall review the 6 electric utility's request, and may review the justness and 7 reasonableness of all rates for tariffed services, in 8 accordance with the provisions of Article IX of this Act, 9 provided that the Commission shall consider any special or 10 negotiated adjustments to the revenue requirement agreed to 11 between the electric utility and the other parties to the 12 proceeding. In setting rates under this Section, the 13 Commission shall exclude the costs and revenues that are 14 associated with competitive services and any billing or 15 pricing experiments conducted under Section 16-106. 16 (e) For the purposes of this subsection (e) all 17 calculations and comparisons shall be performed for the 18 Illinois operations of multijurisdictional utilities. During 19 the mandatory transition period, notwithstanding the 20 provisions of subsection (a), if the 2-year average of an 21 electric utility's earned rate of return on common equity, 22 calculated as its net income applicable to common stock 23 divided by the average of its beginning and ending balances 24 of common equity using data reported in the electric 25 utility's Form 1 report to the Federal Energy Regulatory 26 Commission but adjusted to remove the effect of any refund 27 paid under this subsection (e), and further adjusted to 28 include the annual amortization of any difference between the 29 consideration received by an affiliated interest of the 30 electric utility in the sale of an asset which had been sold 31 or transferred by the electric utility to the affiliated 32 interest subsequent to December 16, the effective date of33 this amendatory Act of1997 and the consideration for which 34 such asset had been sold or transferred to the affiliated -7- LRB9008410JSgc 1 interest, with such difference to be amortized ratably from 2 the date of the sale by the affiliated interest to December 3 31, 2006, exceeds the 2-year average of the Index for the 4 same 2 years by 1.5 or more percentage points, the electric 5 utility shall make refunds to customers beginning the first 6 billing day of April in the following year in the manner 7 described in paragraph (3) of this subsection. For purposes 8 of this subsection (e), the "Index" shall be the sum of (A) 9 the average for the 12 months ended September 30 of the 10 monthly average yields of 30-year U.S. Treasury bonds 11 published by the Board of Governors of the Federal Reserve 12 System in its weekly H.15 Statistical Release or successor 13 publication for each year 1998 through 2004, and (B) (i) 4.00 14 percentage points for each of the 12-month periods ending 15 September 30, 1998 through September 30, 1999 or 8.00 16 percentage points if the electric utility's average 17 residential retail rate is less than or equal to 90% of the 18 average residential retail rate for the "Midwest Utilities", 19 as that term is defined in subsection (b) of this Section, 20 based on data reported on Form 1 to the Federal Energy 21 Regulatory Commission for calendar year 1995, and the 22 electric utility served between 150,000 and 250,000 retail 23 customers on January 1, 1995, or (ii) 5.00 percentage points 24 for each of the 12-month periods ending September 30, 2000 25 through September 30, 2004 or 9.00 percentage points if the 26 electric utility's average residential retail rate is less 27 than or equal to 90% of the average residential retail rate 28 for the "Midwest Utilities", as that term is defined in 29 subsection (b) of this Section, based on data reported on 30 Form 1 to the Federal Energy Regulatory Commission for 31 calendar year 1995 and the electric utility served between 32 150,000 and 250,000 retail customers in this State on January 33 1, 1995. 34 (1) For purposes of this subsection (e), "excess -8- LRB9008410JSgc 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 -9- LRB9008410JSgc 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 -10- LRB9008410JSgc 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 -11- LRB9008410JSgc 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 December 16, the effective date of this12 amendatory Act of1997, and enters into a power 13 purchase agreement with the entity to which such 14 generating plant is sold, assigned, leased, or 15 otherwise transferred, the electric utility also 16 agrees, if its fuel adjustment clause has not 17 already been eliminated, to eliminate its fuel 18 adjustment clause in accordance with subsection (b) 19 of Section 9-220 for a period of time equal to the 20 length of any such power purchase agreement or 21 successor agreement, or until January 1, 2005, 22 whichever is longer; if the capacity of the 23 generating plant so transferred and related power 24 purchase agreement does not result in the 25 elimination of the fuel adjustment clause under this 26 subsection, and the fuel adjustment clause has not 27 already been eliminated, the electric utility shall 28 agree that the costs associated with the transferred 29 plant that are included in the calculation of the 30 rate per kilowatt-hour to be applied pursuant to the 31 electric utility's fuel adjustment clause during 32 such period shall not exceed the per kilowatt-hour 33 cost associated with such generating plant included 34 in the electric utility's fuel adjustment clause -12- LRB9008410JSgc 1 during the full calendar year preceding the 2 transfer, with such limit to be adjusted each year 3 thereafter by the Gross Domestic Product Implicit 4 Price Deflator. 5 (vi) In addition, if the electric utility 6 proposes to sell, assign, or lease, (A) either (1) 7 an amount of generating plant that brings the amount 8 of net dependable generating capacity transferred 9 pursuant to this subsection to an amount equal to or 10 greater than 15% of its net dependable capacity on 11 December 16, the effective date of this amendatory12 Act of1997, or (2) one or more generating plants 13 with a total net dependable capacity of 1100 14 megawatts, or (B) transmission and distribution 15 facilities that either (1) bring the amount of 16 transmission and distribution facilities transferred 17 pursuant to this subsection to an amount equal to or 18 greater than 15% of the electric utility's total 19 depreciated original cost investment in such 20 facilities, or (2) represent an investment of 21 $25,000,000 in terms of total depreciated original 22 cost, the electric utility shall provide, in 23 addition to the information listed in subparagraphs 24 (i) through (v), the following information: (A) a 25 description of how the electric utility will meet 26 its service obligations under this Act in a safe and 27 reliable manner and (B) the electric utility's 28 projected earned rate of return on common equity, 29 calculated in accordance with subsection (d) of this 30 Section, for each year from the date of the notice 31 through December 31, 2004 both with and without the 32 proposed transaction. If the Commission has not 33 issued an order initiating a hearing on the proposed 34 transaction within 30 days after the date the -13- LRB9008410JSgc 1 electric utility's notice is filed, the transaction 2 shall be deemed approved. The Commission may, after 3 notice and hearing, prohibit the proposed 4 transaction if it makes either or both of the 5 following findings: (1) that the proposed 6 transaction will render the electric utility unable 7 to provide its tariffed services in a safe and 8 reliable manner, or (2) that there is a strong 9 likelihood that consummation of the proposed 10 transaction will result in the electric utility 11 being entitled to request an increase in its base 12 rates during the mandatory transition period 13 pursuant to subsection (d) of this Section. Any 14 hearing initiated by the Commission into the 15 proposed transaction shall be completed, and the 16 Commission's final order approving or prohibiting 17 the proposed transaction shall be entered, within 90 18 days after the date the electric utility's notice 19 was filed. Provided, however, that a sale, 20 assignment, or lease of transmission facilities to 21 an independent system operator that meets the 22 requirements of Section 16-126 shall not be subject 23 to Commission approval under this Section. 24 In any proceeding conducted by the Commission 25 pursuant to this subparagraph (vi), intervention 26 shall be limited to parties with a direct interest 27 in the transaction which is the subject of the 28 hearing and any statutory consumer protection agency 29 as defined in subsection (d) of Section 9-102.1. 30 Notwithstanding the provisions of Section 10-113 of 31 this Act, any application seeking rehearing of an 32 order issued under this subparagraph (vi), whether 33 filed by the electric utility or by an intervening 34 party, shall be filed within 10 days after service -14- LRB9008410JSgc 1 of the order. 2 The Commission shall not in any subsequent proceeding or 3 otherwise, review such a reorganization or other transaction 4 authorized by this Section, but shall retain the authority to 5 allocate costs as stated in Section 16-111(i). An entity to 6 which an electric utility sells, assigns, leases or transfers 7 assets pursuant to this subsection (g) shall not, as a result 8 of the transactions specified in this subsection (g), be 9 deemed a public utility as defined in Section 3-105. Nothing 10 in this subsection (g) shall change any requirement under the 11 jurisdiction of the Illinois Department of Nuclear Safety 12 including, but not limited to, the payment of fees. Nothing 13 in this subsection (g) shall exempt a utility from obtaining 14 a certificate pursuant to Section 8-406 of this Act for the 15 construction of a new electric generating facility. Nothing 16 in this subsection (g) is intended to exempt the transactions 17 hereunder from the operation of the federal or State 18 antitrust laws. Nothing in this subsection (g) shall require 19 an electric utility to use the procedures specified in this 20 subsection for any of the transactions specified herein. Any 21 other procedure available under this Act may, at the electric 22 utility's election, be used for any such transaction. 23 (h) During the mandatory transition period, the 24 Commission shall not establish or use any rates of 25 depreciation, which for purposes of this subsection shall 26 include amortization, for any electric utility other than 27 those established pursuant to subsection (c) of Section 5-104 28 of this Act or utilized pursuant to subsection (g) of this 29 Section. Provided, however, that in any proceeding to review 30 an electric utility's rates for tariffed services pursuant to 31 Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the 32 Commission may establish new rates of depreciation for the 33 electric utility in the same manner provided in subsection 34 (d) of Section 5-104 of this Act. An electric utility -15- LRB9008410JSgc 1 implementing an accelerated cost recovery method including 2 accelerated depreciation, accelerated amortization or other 3 capital recovery methods, or recording reductions to the 4 original cost of its assets, pursuant to subsection (g) of 5 this Section, shall file a statement with the Commission 6 describing the accelerated cost recovery method to be 7 implemented or the reduction in the original cost of its 8 assets to be recorded. Upon the filing of such statement, 9 the accelerated cost recovery method or the reduction in the 10 original cost of assets shall be deemed to be approved by the 11 Commission as though an order had been entered by the 12 Commission. 13 (i) Subsequent to the mandatory transition period, the 14 Commission, in any proceeding to establish rates and charges 15 for tariffed services offered by an electric utility, shall 16 consider only (1) the then current or projected revenues, 17 costs, investments and cost of capital directly or indirectly 18 associated with the provision of such tariffed services; (2) 19 collection of transition charges in accordance with Sections 20 16-102 and 16-108 of this Act; (3) recovery of any employee 21 transition costs as described in Section 16-128 which the 22 electric utility is continuing to incur, including recovery 23 of any unamortized portion of such costs previously incurred 24 or committed, with such costs to be equitably allocated among 25 bundled services, delivery services, and contracts with 26 alternative retail electric suppliers; and (4) recovery of 27 the costs associated with the electric utility's compliance 28 with decommissioning funding requirements; and shall not 29 consider any other revenues, costs, investments or cost of 30 capital of either the electric utility or of any affiliate of 31 the electric utility that are not associated with the 32 provision of tariffed services. In setting rates for 33 tariffed services, the Commission shall equitably allocate 34 joint and common costs and investments between the electric -16- LRB9008410JSgc 1 utility's competitive and tariffed services. In determining 2 the justness and reasonableness of the electric power and 3 energy component of an electric utility's rates for tariffed 4 services subsequent to the mandatory transition period and 5 prior to the time that the provision of such electric power 6 and energy is declared competitive, the Commission shall 7 consider the extent to which the electric utility's tariffed 8 rates for such component for each customer class exceed the 9 market value determined pursuant to Section 16-112, and, if 10 the electric power and energy component of such tariffed rate 11 exceeds the market value by more than 10% for any customer 12 class, may establish such electric power and energy component 13 at a rate equal to the market value plus 10%. In any such 14 case, the Commission may also elect to extend the provisions 15 of Section 16-111(e) for any period in which the electric 16 utility is collecting transition charges, using information 17 applicable to such period. 18 (j) During the mandatory transition period, an electric 19 utility may elect to transfer to a non-operating income 20 account under the Commission's Uniform System of Accounts 21 either or both of (i) an amount of unamortized investment tax 22 credit that is in addition to the ratable amount which is 23 credited to the electric utility's operating income account 24 for the year in accordance with Section 46(f)(2) of the 25 federal Internal Revenue Code of 1986, as in effect prior to 26 P.L. 101-508, or (ii) "excess tax reserves", as that term is 27 defined in Section 203(e)(2)(A) of the federal Tax Reform Act 28 of 1986, provided that (A) the amount transferred may not 29 exceed the amount of the electric utility's assets that were 30 created pursuant to Statement of Financial Accounting 31 Standards No. 71 which the electric utility has written off 32 during the mandatory transition period, and (B) the transfer 33 shall not be effective until approved by the Internal Revenue 34 Service. An electric utility electing to make such a -17- LRB9008410JSgc 1 transfer shall file a statement with the Commission stating 2 the amount and timing of the transfer for which it intends to 3 request approval of the Internal Revenue Service, along with 4 a copy of its proposed request to the Internal Revenue 5 Service for a ruling. The Commission shall issue an order 6 within 14 days after the electric utility's filing approving, 7 subject to receipt of approval from the Internal Revenue 8 Service, the proposed transfer. 9 (Source: P.A. 90-561, eff. 12-16-97; 90-563, eff. 12-16-97.) 10 Section 99. Effective date. This Act takes effect upon 11 becoming law.
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