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90_HB2649
220 ILCS 5/18-103
Amends the Public Utilities Act. Makes a technical
change in a Section relating to transitional funding orders.
LRB9009284JScd
LRB9009284JScd
1 AN ACT to amend the Public Utilities Act by changing
2 Section 18-103.
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 18-103 as follows:
7 (220 ILCS 5/18-103)
8 Sec. 18-103. Transitional funding orders.
9 (a) Notwithstanding any other provision of this Act or
10 other law, the Illinois Commerce Commission is hereby
11 authorized to issue transitional funding orders in
12 accordance with the provisions of this Section, in order to
13 facilitate (i) the issuance of transitional funding
14 instruments by or on behalf of electric utilities or issuers
15 and (ii) the issuance of grantee instruments by or on behalf
16 of grantees.
17 (b) A transitional funding order may be issued by the
18 Commission only upon the application of an electric utility
19 and shall become effective in accordance with its terms only
20 after such electric utility files with the Commission its
21 written consent to all terms and conditions of such order.
22 After the issuance of a transitional funding order, the
23 electric utility or grantee shall retain sole discretion
24 regarding whether to assign, sell, pledge or otherwise
25 transfer intangible transition property and grantee
26 instruments, if any, or to cause transitional funding
27 instruments and grantee instruments, if any, to be issued,
28 including the right to defer or postpone such assignment,
29 sale, transfer, pledge or issuance or to change the terms
30 thereof as allowed by such order.
31 (c) After the effective date of this amendatory Act of
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1 1997, an electric utility may file any number of applications
2 for transitional funding orders. Each application for a
3 transitional funding order shall contain detailed information
4 regarding the electric utility's proposal for (i) the
5 assignment, sale, pledge or other transfer of, or the
6 establishment, creation and granting of rights in and to,
7 intangible transition property and grantee instruments, if
8 any, (ii) the issuance of transitional funding instruments
9 and grantee instruments, if any, (iii) the total dollar
10 amount of intangible transition property to be created and
11 the amount to be sold, pledged, assigned or otherwise
12 transferred or granted hereunder (which amount may be in
13 excess of the principal and interest payable on the
14 transitional funding instruments and grantee instruments, if
15 any, in order to provide for servicing costs and the funding
16 or maintenance of debt service and other reserves, costs and
17 fees as security to the holders of the transitional funding
18 instruments and grantee instruments, if any), (iv) the amount
19 of transitional funding instruments and grantee instruments,
20 if any, to be issued, (v) the amount, expressed in cents per
21 kilowatt-hour, of instrument funding charges to be collected
22 from retail customers or other persons, (vi) the time to
23 maturity for the transitional funding instruments and grantee
24 instruments, if any, and (vii) the electric utility's planned
25 use of the proceeds from the issuance of transitional funding
26 instruments including the amounts allocated for the
27 respective uses specified in subparagraph (1) of subsection
28 (d) of Section 18-103 of this Article.
29 (d) The Commission shall, after proper notice, hold a
30 hearing for the sole purpose of determining whether the
31 application and requested transitional funding order are in
32 compliance with this Article and shall complete its review of
33 the application and issue its final transitional funding
34 order by no later than 90 days after the filing of such
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1 application by the electric utility; provided, that, in
2 contested cases where the public interest is in issue
3 pursuant to subparagraph (1)(B) of this subsection (d) or
4 pursuant to subsection (m) of Section 18-104, the Commission
5 may complete its review and issue its final transitional
6 funding order by no later than 120 days after the filing of
7 such application. The order shall create and establish the
8 proposed intangible transition property in the amount
9 requested by the applicant and approve the proposed sale,
10 pledge, assignment or other transfer of, or the
11 establishment, creation and granting of rights in and to,
12 intangible transition property and grantee instruments, if
13 any, the proposed issuance of transitional funding
14 instruments and grantee instruments, if any, and the proposed
15 imposition and collection of the corresponding instrument
16 funding charges, if the Commission finds that each of the
17 following conditions are met:
18 (1) the electric utility will use the proceeds of
19 the sale and issuance of the transitional funding
20 instruments for one or more of the following purposes:
21 (A) to refinance debt or equity, or both, in a
22 manner which the electric utility reasonably
23 demonstrates will result in an overall reduction in
24 its cost of capital, taking into account the costs
25 of financing; provided, however, that any proceeds
26 transferred to a parent company through a common
27 stock repurchase transaction shall be used to retire
28 publicly traded common stock of the parent company
29 or to pay commercially reasonable transaction costs
30 associated with such retirement;
31 (B) if the Commission finds that the sale or
32 issuance of transitional funding instruments for the
33 following purposes is in the public interest, then
34 the following uses of proceeds: (i) to repay or
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1 retire fuel contracts or obligations related to
2 nuclear spent fuel previously incurred by the
3 electric utility in providing electric power or
4 energy services prior to the effective date of this
5 amendatory Act of 1997 or (ii) to pay any
6 expenditures required to be undertaken by such
7 electric utility by the provisions of Section 16-128
8 of this Act including labor severance costs and
9 employee retraining costs;
10 (C) to fund debt service and other reserves,
11 commercially reasonable costs and fees necessary or
12 desirable in connection with the marketing of the
13 transitional funding instruments and grantee
14 instruments, if any;
15 (D) to pay for commercially reasonable costs
16 associated with the issuance and collateralization
17 of transitional funding instruments and grantee
18 instruments, if any; and
19 (E) to pay for the commercially reasonable
20 costs associated with the issuance of such
21 transitional funding instruments, including the
22 costs incurred since the effective date of this
23 amendatory Act of 1997, or to be incurred, in
24 connection with transactions to recapitalize,
25 refinance or retire stock and/or debt, any
26 associated taxes, and the costs incurred or to be
27 incurred to obtain, collateralize, issue, service
28 and administer transitional funding instruments and
29 grantee instruments, including interest and other
30 related fees, costs and charges;
31 provided, (i) that the transitional funding order shall
32 require the electric utility to use (1) at least 80% of
33 such proceeds for the purposes specified in subparagraphs
34 (A) and (B) above and (2) no more than 20% of the maximum
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1 amount of such proceeds permitted under subparagraph
2 (6)(B) of this subsection for purposes other than those
3 specified in subparagraph (A) above; (ii) that the
4 electric utility's use of such proceeds for the purposes
5 specified in subparagraph (A) above shall not, as of the
6 date of application of such proceeds, result in the
7 common equity component of its capital structure,
8 exclusive of the portion of its capital structure that
9 consists of obligations representing transitional funding
10 instruments or grantee instruments, being reduced below
11 the lesser of (1) 40% and (2) the common equity
12 percentage as of December 31, 1996 adjusted to reflect
13 any write-off of assets or common equity implemented or
14 required to be implemented as a result of this amendatory
15 Act of 1997; and (iii) in no event shall the electric
16 utility use the proceeds of the sale of grantee
17 instruments or transitional funding instruments to repay
18 or retire obligations incurred by any affiliate of the
19 electric utility (other than in connection with any
20 refinancing of grantee instruments or transitional
21 funding instruments issued by such affiliate), without
22 the consent of the Commission;
23 (2) the expected maturity date for the grantee
24 instruments or the transitional funding instruments, and
25 the final date on which the electric utility, grantee or
26 assignee shall be entitled to charge and collect
27 instrument funding charges, shall each be set to occur no
28 later than December 31, 2008, subject to the provisions
29 of subsections (l) and (m) of Section 18-104;
30 (3) the instrument funding charges authorized in
31 such order will be deducted and stated separately from
32 base rates and transition charges, and, where applicable,
33 other rates for tariffed services, all as provided in
34 subsection (j) of Section 18-104 and in a manner
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1 conforming to the allocation of the instrument funding
2 charges implemented pursuant to subparagraph (4) of this
3 subsection;
4 (4) the instrument funding charges authorized in
5 such order shall have been allocated among classes of
6 retail customers in accordance with percentage ratios
7 determined by dividing the base rate revenue from each
8 class by the electric utility's total base rate revenue
9 for the 1996 calendar year;
10 (5) the issuance of the transitional funding
11 instruments will not cause the rates for tariffed
12 services to increase over the rates then in existence as
13 adjusted for the rate decreases provided in subsection
14 (b) of Section 16-111; and
15 (6) the aggregate principal amount of grantee
16 instruments or, if such transitional funding order does
17 not provide for the issuance of grantee instruments,
18 transitional funding instruments, to be issued pursuant
19 to such order, together with the aggregate amount of such
20 instruments issued under any prior orders requested by
21 such electric utility, shall not exceed:
22 (A) during the twelve-month period commencing
23 August 1, 1998, an amount equal to 25% of the
24 applicable electric utility's total capitalization,
25 including both debt and equity, as of December 31,
26 1996, multiplied by the ratio of the electric
27 utility's revenues from Illinois electric utility
28 retail customers in the 1996 calendar year to its
29 total electric retail revenues for such 1996 year;
30 and
31 (B) thereafter, an amount equal to 50% of the
32 applicable electric utility's total capitalization,
33 including both debt and equity, as of December 31,
34 1996 multiplied by the ratio of the electric
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1 utility's revenues from Illinois electric utility
2 retail customers in the 1996 calendar year to its
3 total electric retail revenues for such 1996 year.
4 (Source: P.A. 90-561, eff. 12-16-97.)