State of Illinois
90th General Assembly
Legislation

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[ Engrossed ]

90_HB2650

      220 ILCS 5/16-111
          Amends the  Public  Utilities  Act.   Makes  a  technical
      change  in  a  Section relating to rates during the mandatory
      transition period.
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                                               LRB9009285JSmg
 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 that which was
16    filed after September 1, 1997 but before prior to October 15,
17    1997,  by  an  electric  utility  serving  less  than  12,500
18    customers  in this state), (ii) initiate or, unless requested
19    by the electric utility, authorize or order any change by way
20    of decrease, restructuring or unbundling (except as  provided
21    in  Section  16-109A),  in  the rates of any electric utility
22    that 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-                LRB9009285JSmg
 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 August 1, 1998, each component of its base rates to
33    residential  retail  customers  by 15% from the base rates in
34    effect immediately prior to January 1, 1998 and (ii)  if  the
                            -3-                LRB9009285JSmg
 1    public utility provides electric service to more than 500,000
 2    customers  in  this  State  on  the  effective  date  of this
 3    amendatory Act of 1997, reducing, effective May 1, 2002, each
 4    component of its base rates to residential  retail  customers
 5    by an additional 5% from the base rates in effect immediately
 6    prior  to  January 1, 1998. Provided, however, that (A) if an
 7    electric utility's average residential retail  rate  is  less
 8    than  or  equal  to the average residential retail rate for a
 9    group of Midwest Utilities (consisting of all  investor-owned
10    electric utilities with annual system peaks in excess of 1000
11    megawatts in the States of Illinois, Indiana, Iowa, Kentucky,
12    Michigan,  Missouri,  Ohio,  and  Wisconsin),  based  on data
13    reported  on  Form  1  to  the  Federal   Energy   Regulatory
14    Commission  for  calendar  year  1995,  then it shall only be
15    required to file tariffs (i) reducing,  effective  August  1,
16    1998,  each component of its base rates to residential retail
17    customers by 5% from the base  rates  in  effect  immediately
18    prior to January 1, 1998, (ii) reducing, effective October 1,
19    2000,  each component of its base rates to residential retail
20    customers by the lesser of 5% of the  base  rates  in  effect
21    immediately  prior  to  January  1, 1998 or the percentage by
22    which the electric utility's average residential retail  rate
23    exceeds  the  average  residential retail rate of the Midwest
24    Utilities, based on data reported on Form 1  to  the  Federal
25    Energy  Regulatory  Commission  for  calendar  year 1999, and
26    (iii) reducing, effective October 1, 2002, each component  of
27    its   base  rates  to  residential  retail  customers  by  an
28    additional amount equal to the lesser of 5% of the base rates
29    in effect  immediately  prior  to  January  1,  1998  or  the
30    percentage   by   which   the   electric   utility's  average
31    residential  retail  rate  exceeds  the  average  residential
32    retail rate of the Midwest Utilities, based on data  reported
33    on  Form  1  to  the Federal Energy Regulatory Commission for
34    calendar year 2001; and (B) if the average residential retail
                            -4-                LRB9009285JSmg
 1    rate of an  electric  utility  serving  between  150,000  and
 2    250,000  retail customers in this State on January 1, 1995 is
 3    less than or equal to 90% of the average  residential  retail
 4    rate  for  the  Midwest  Utilities, based on data reported on
 5    Form 1  to  the  Federal  Energy  Regulatory  Commission  for
 6    calendar  year  1995,  then it shall only be required to file
 7    tariffs  (i)  reducing,  effective  August  1,   1998,   each
 8    component  of  its base rates to residential retail customers
 9    by 2% from the base rates  in  effect  immediately  prior  to
10    January  1,  1998;  (ii) reducing, effective October 1, 2000,
11    each component  of  its  base  rates  to  residential  retail
12    customers  by  2%  from  the  base rate in effect immediately
13    prior to January  1,  1998;  and  (iii)  reducing,  effective
14    October  1,  2002,  each  component  of  its  base  rates  to
15    residential  retail  customers  by  1% from the base rates in
16    effect  immediately  prior  to  January  1,  1998.  Provided,
17    further, that any electric utility for which  a  decrease  in
18    base  rates has been or is placed into effect between October
19    1, 1996 and the dates specified in the preceding sentences of
20    this subsection, other than pursuant to the  requirements  of
21    this  subsection,  shall  be entitled to reduce the amount of
22    any reduction or reductions in its  base  rates  required  by
23    this  subsection  by  the  amount of such other decrease. The
24    tariffs required under this subsection shall be filed 45 days
25    in advance of the effective date. Notwithstanding anything to
26    the contrary in Section 9-220 of this Act, no restatement  of
27    base  rates  in  conjunction  with  the elimination of a fuel
28    adjustment clause under that Section shall result in a lesser
29    decrease in base rates than customers would otherwise receive
30    under  this  subsection  had  the  electric  utility's   fuel
31    adjustment clause not been eliminated.
32        (c)  Any utility reducing its base rates by 15% on August
33    1,   1998  pursuant  to  subsection  (b)  shall  include  the
34    following statement on its bills  for  residential  customers
                            -5-                LRB9009285JSmg
 1    from August 1 through December 31, 1998: "Effective August 1,
 2    1998,  your  rates  have  been reduced by 15% by the Electric
 3    Service Customer Choice and Rate Relief Law of 1997 passed by
 4    the Illinois General Assembly.".  Any  utility  reducing  its
 5    base  rates  by  5% on August 1, 1998, pursuant to subsection
 6    (b) shall include the following statement on  its  bills  for
 7    residential  customers  from  August  1  through December 31,
 8    1998:  "Effective  August  1,  1998,  your  rates  have  been
 9    reduced  by  5%  by  the Electric Service Customer Choice and
10    Rate Relief Law  of  1997  passed  by  the  Illinois  General
11    Assembly.".
12        Any  utility  reducing  its base rates by 2% on August 1,
13    1998 pursuant to subsection (b) shall include  the  following
14    statement  on its bills for residential customers from August
15    1 through December 31, 1998: "Effective August 1, 1998,  your
16    rates  have  been  reduced  by  2%  by  the  Electric Service
17    Customer Choice and Rate Relief Law of  1997  passed  by  the
18    Illinois General Assembly.".
19        (d)  During  the  mandatory  transition  period,  but not
20    before January 1, 2000, and notwithstanding   the  provisions
21    of  subsection  (a),  an  electric  utility  may  request  an
22    increase   in   its   base  rates  if  the  electric  utility
23    demonstrates that the 2-year average of its  earned  rate  of
24    return  on  common  equity,  calculated  as  its  net  income
25    applicable  to  common  stock  divided  by the average of its
26    beginning and ending balances of  common  equity  using  data
27    reported  in  the  electric  utility's  Form  1 report to the
28    Federal Energy Regulatory Commission but adjusted  to  remove
29    the  effects  of  accelerated depreciation or amortization or
30    other transition or mitigation measures  implemented  by  the
31    electric  utility  pursuant to subsection (g) of this Section
32    and the effect of any refund paid pursuant to subsection  (e)
33    of  this  Section, is below the 2-year average for the same 2
34    years of the monthly average yields of 30-year  U.S. Treasury
                            -6-                LRB9009285JSmg
 1    bonds published by the Board of Governors  of  the    Federal
 2    Reserve  System  in  its  weekly  H.15 Statistical Release or
 3    successor  publication.  The  Commission  shall  review   the
 4    electric  utility's  request, and may review the justness and
 5    reasonableness  of  all  rates  for  tariffed  services,   in
 6    accordance  with  the  provisions  of Article IX of this Act,
 7    provided that the Commission shall consider  any  special  or
 8    negotiated  adjustments  to the revenue requirement agreed to
 9    between the electric utility and the  other  parties  to  the
10    proceeding.    In  setting  rates  under  this  Section,  the
11    Commission shall exclude the  costs  and  revenues  that  are
12    associated  with  competitive  services  and  any  billing or
13    pricing experiments conducted under Section 16-106.
14        (e)  For  the  purposes  of  this  subsection   (e)   all
15    calculations  and  comparisons  shall  be  performed  for the
16    Illinois operations of multijurisdictional utilities.  During
17    the  mandatory   transition   period,   notwithstanding   the
18    provisions  of  subsection  (a),  if the 2-year average of an
19    electric utility's earned rate of return  on  common  equity,
20    calculated  as  its  net  income  applicable  to common stock
21    divided by the average of its beginning and  ending  balances
22    of   common  equity  using  data  reported  in  the  electric
23    utility's Form 1 report  to  the  Federal  Energy  Regulatory
24    Commission  but  adjusted  to remove the effect of any refund
25    paid under this  subsection  (e),  and  further  adjusted  to
26    include the annual amortization of any difference between the
27    consideration  received  by  an  affiliated  interest  of the
28    electric utility in the sale of an asset which had been  sold
29    or  transferred  by  the  electric  utility to the affiliated
30    interest subsequent to the effective date of this  amendatory
31    Act  of  1997  and the consideration for which such asset had
32    been sold or transferred to  the  affiliated  interest,  with
33    such  difference to be amortized ratably from the date of the
34    sale by the affiliated interest to December 31, 2006, exceeds
                            -7-                LRB9009285JSmg
 1    the 2-year average of the Index for the same 2 years  by  1.5
 2    or  more  percentage  points, the electric utility shall make
 3    refunds to customers beginning the first billing day of April
 4    in the following year in the manner  described  in  paragraph
 5    (3)  of this subsection. For purposes of this subsection (e),
 6    the "Index" shall be the sum of (A) the average  for  the  12
 7    months  ended  September  30 of the monthly average yields of
 8    30-year  U.S.  Treasury  bonds  published  by  the  Board  of
 9    Governors of the Federal Reserve System in  its  weekly  H.15
10    Statistical  Release  or  successor publication for each year
11    1998 through 2004, and (B) (i)  4.00  percentage  points  for
12    each  of  the  12-month  periods  ending  September  30, 1998
13    through September 30, 1999 or 8.00 percentage points  if  the
14    electric  utility's  average  residential retail rate is less
15    than or equal to 90% of the average residential  retail  rate
16    for  the  "Midwest  Utilities",  as  that  term is defined in
17    subsection (b) of this Section, based  on  data  reported  on
18    Form  1  to  the  Federal  Energy  Regulatory  Commission for
19    calendar year 1995, and the electric utility  served  between
20    150,000  and  250,000 retail customers on January 1, 1995, or
21    (ii) 5.00 percentage points for each of the 12-month  periods
22    ending  September 30, 2000 through September 30, 2004 or 9.00
23    percentage  points  if   the   electric   utility's   average
24    residential  retail  rate is less than or equal to 90% of the
25    average residential retail rate for the "Midwest  Utilities",
26    as  that  term  is defined in subsection (b) of this Section,
27    based on data reported  on  Form  1  to  the  Federal  Energy
28    Regulatory Commission for calendar year 1995 and the electric
29    utility  served  between 150,000 and 250,000 retail customers
30    in this State on January 1, 1995.
31             (1)  For purposes of this  subsection  (e),  "excess
32        earnings"  means  the  difference  between (A) the 2-year
33        average of the electric utility's earned rate  of  return
34        on  common equity, less (B) the 2-year average of the sum
                            -8-                LRB9009285JSmg
 1        of (i) the Index applicable to each of the  2  years  and
 2        (ii)   1.5  percentage  points;  provided,  that  "excess
 3        earnings" shall never be less than zero.
 4             (2)  On or before March 31 of each year 2000 through
 5        2005 each electric utility shall file a report  with  the
 6        Commission  showing  its  earned rate of return on common
 7        equity, calculated in accordance  with  this  subsection,
 8        for  the  preceding calendar year and the average for the
 9        preceding 2 calendar years.
10             (3)  If an electric  utility  has  excess  earnings,
11        determined  in  accordance with paragraphs (1) and (2) of
12        this subsection, the refunds which the  electric  utility
13        shall  pay   to its customers beginning the first billing
14        day of April in the following year  shall  be  calculated
15        and applied as follows:
16                  (i)  The  electric  utility's  excess  earnings
17             shall  be multiplied by the average of the beginning
18             and ending balances of the electric utility's common
19             equity  for  the  2-year  period  in  which   excess
20             earnings occurred.
21                  (ii)  The  result  of  the  calculation  in (i)
22             shall be multiplied by 0.50 and then  divided  by  a
23             number  equal  to  1  minus  the  electric utility's
24             composite federal and State income tax rate.
25                  (iii)  The result of the  calculation  in  (ii)
26             shall   be  divided  by  the  sum  of  the  electric
27             utility's projected  total  kilowatt-hour  sales  to
28             retail customers plus projected kilowatt-hours to be
29             delivered  to delivery services customers over a one
30             year period beginning with the first billing date in
31             April in the succeeding year to  determine  a  cents
32             per kilowatt-hour refund factor.
33                  (iv)  The cents per kilowatt-hour refund factor
34             calculated   in  (iii)  shall  be  credited  to  the
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 1             electric utility's customers by applying the  factor
 2             on    the   customer's   monthly   bills   to   each
 3             kilowatt-hour sold  or  delivered  until  the  total
 4             amount   calculated   in   (ii)  has  been  paid  to
 5             customers.
 6        (f)  During the mandatory transition period, an  electric
 7    utility  may  file  revised tariffs reducing the price of any
 8    tariffed service offered by  the  electric  utility  for  all
 9    customers  taking  that  tariffed  service,  which  shall  be
10    effective 7 days after filing.
11        (g)  During  the mandatory transition period, an electric
12    utility may, without obtaining any approval of the Commission
13    other  than  that  provided  for  in  this   subsection   and
14    notwithstanding  any  other provision of this Act or any rule
15    or regulation of  the  Commission  that  would  require  such
16    approval:
17             (1)  implement a reorganization, other than a merger
18        of 2 or more public utilities as defined in Section 3-105
19        or their holding companies;
20             (2)  retire generating plants from service;
21             (3)  sell,   assign,  lease  or  otherwise  transfer
22        assets to an affiliated or  unaffiliated  entity  and  as
23        part  of  such transaction enter into service agreements,
24        power purchase agreements, or other agreements  with  the
25        transferee; provided, however, that the prices, terms and
26        conditions  of  any  power  purchase  agreement  must  be
27        approved  or  allowed  into  effect by the Federal Energy
28        Regulatory Commission; or
29             (4)  use  any  accelerated  cost   recovery   method
30        including     accelerated    depreciation,    accelerated
31        amortization or other capital recovery methods, or record
32        reductions to the original cost of its assets.
33        In order to implement a reorganization, retire generating
34    plants from service, or  sell,  assign,  lease  or  otherwise
                            -10-               LRB9009285JSmg
 1    transfer  assets  pursuant  to  this  Section,  the  electric
 2    utility  shall comply with subsections (c) and (d) of Section
 3    16-128, if applicable, and provide  the  Commission  with  at
 4    least  30  days  notice  of  the  proposed  reorganization or
 5    transaction,  which  notice  shall  include   the   following
 6    information:
 7                  (i)  a  complete  statement of the entries that
 8             the electric utility will  make  on  its  books  and
 9             records   of   account  to  implement  the  proposed
10             reorganization  or  transaction  together   with   a
11             certification  from  an independent certified public
12             accountant that such  entries  are  in  accord  with
13             generally accepted accounting principles and, if the
14             Commission  has  previously  approved guidelines for
15             cost  allocations  between  the  utility   and   its
16             affiliates,   a   certification   from   the   chief
17             accounting  officer of the utility that such entries
18             are in accord with those cost allocation guidelines;
19                  (ii)  a description of how the electric utility
20             will use proceeds of any sale, assignment, lease  or
21             transfer  to  retire  debt  or  otherwise  reduce or
22             recover the  costs  of  services  provided  by  such
23             electric utility;
24                  (iii)  a  list  of  all  federal  approvals  or
25             approvals  required from departments and agencies of
26             this State, other  than  the  Commission,  that  the
27             electric   utility   has   or   will  obtain  before
28             implementing the reorganization or transaction;
29                  (iv)  an irrevocable commitment by the electric
30             utility that  it  will  not,  as  a  result  of  the
31             transaction,  impose  any stranded cost charges that
32             it might  otherwise  be  allowed  to  charge  retail
33             customers   under   federal   law  or  increase  the
34             transition charges that it is otherwise entitled  to
                            -11-               LRB9009285JSmg
 1             collect under this Article XVI; and
 2                  (v)  if  the electric utility proposes to sell,
 3             assign, lease or  otherwise  transfer  a  generating
 4             plant  that  brings  the  amount  of  net dependable
 5             generating capacity  transferred  pursuant  to  this
 6             subsection to an amount equal to or greater than 15%
 7             of the electric utility's net dependable capacity as
 8             of  the  effective  date  of  this amendatory Act of
 9             1997, and enters into  a  power  purchase  agreement
10             with  the  entity  to which such generating plant is
11             sold, assigned, leased,  or  otherwise  transferred,
12             the  electric  utility  also  agrees,  if   its fuel
13             adjustment clause has not already  been  eliminated,
14             to   eliminate   its   fuel   adjustment  clause  in
15             accordance with subsection (b) of Section 9-220  for
16             a  period  of  time  equal to the length of any such
17             power purchase agreement or successor agreement,  or
18             until  January  1, 2005, whichever is longer; if the
19             capacity of the generating plant so transferred  and
20             related  power purchase agreement does not result in
21             the elimination of the fuel adjustment clause  under
22             this  subsection, and the fuel adjustment clause has
23             not already been eliminated,  the  electric  utility
24             shall  agree  that  the  costs  associated  with the
25             transferred  plant  that   are   included   in   the
26             calculation  of  the  rate  per  kilowatt-hour to be
27             applied pursuant  to  the  electric  utility's  fuel
28             adjustment  clause  during  such  period  shall  not
29             exceed  the  per  kilowatt-hour cost associated with
30             such  generating  plant  included  in  the  electric
31             utility's fuel adjustment  clause  during  the  full
32             calendar  year  preceding  the  transfer,  with such
33             limit to be  adjusted each year  thereafter  by  the
34             Gross Domestic Product Implicit Price Deflator.
                            -12-               LRB9009285JSmg
 1                  (vi)  In  addition,  if  the  electric  utility
 2             proposes  to  sell, assign, or lease, (A) either (1)
 3             an amount of generating plant that brings the amount
 4             of net dependable  generating  capacity  transferred
 5             pursuant to this subsection to an amount equal to or
 6             greater  than  15% of its net dependable capacity on
 7             the effective date of this amendatory Act  of  1997,
 8             or  (2)  one  or more generating plants with a total
 9             net dependable capacity of 1100  megawatts,  or  (B)
10             transmission and distribution facilities that either
11             (1)   bring   the   amount   of   transmission   and
12             distribution facilities transferred pursuant to this
13             subsection to an amount equal to or greater than 15%
14             of the electric utility's total depreciated original
15             cost investment in such facilities, or (2) represent
16             an  investment  of  $25,000,000  in  terms  of total
17             depreciated  original  cost,  the  electric  utility
18             shall provide, in addition to the information listed
19             in subparagraphs  (i)  through  (v),  the  following
20             information:  (A)  a description of how the electric
21             utility will meet its service obligations under this
22             Act in a  safe  and  reliable  manner  and  (B)  the
23             electric  utility's  projected earned rate of return
24             on common  equity,  calculated  in  accordance  with
25             subsection  (d)  of this Section, for each year from
26             the date of the notice  through  December  31,  2004
27             both  with and without the proposed transaction.  If
28             the Commission has not issued an order initiating  a
29             hearing  on  the proposed transaction within 30 days
30             after the date  the  electric  utility's  notice  is
31             filed,  the  transaction  shall  be deemed approved.
32             The  Commission  may,  after  notice  and   hearing,
33             prohibit the proposed transaction if it makes either
34             or  both  of  the  following  findings: (1) that the
                            -13-               LRB9009285JSmg
 1             proposed  transaction  will  render   the   electric
 2             utility unable to provide its tariffed services in a
 3             safe  and  reliable  manner,  or (2) that there is a
 4             strong likelihood that consummation of the  proposed
 5             transaction  will  result  in  the  electric utility
 6             being entitled to request an increase  in  its  base
 7             rates   during   the   mandatory  transition  period
 8             pursuant to subsection (d)  of  this  Section.   Any
 9             hearing   initiated   by  the  Commission  into  the
10             proposed transaction shall  be  completed,  and  the
11             Commission's  final  order  approving or prohibiting
12             the proposed transaction shall be entered, within 90
13             days after the date the  electric  utility's  notice
14             was   filed.   Provided,   however,   that  a  sale,
15             assignment, or lease of transmission  facilities  to
16             an   independent  system  operator  that  meets  the
17             requirements of Section 16-126 shall not be  subject
18             to Commission approval under this Section.
19                  In  any  proceeding conducted by the Commission
20             pursuant to  this  subparagraph  (vi),  intervention
21             shall  be  limited to parties with a direct interest
22             in the transaction  which  is  the  subject  of  the
23             hearing and any statutory consumer protection agency
24             as  defined  in  subsection  (d) of Section 9-102.1.
25             Notwithstanding the provisions of Section 10-113  of
26             this  Act,  any  application seeking rehearing of an
27             order issued under this subparagraph  (vi),  whether
28             filed  by  the electric utility or by an intervening
29             party, shall be filed within 10 days  after  service
30             of the order.
31        The  Commission shall not in any subsequent proceeding or
32    otherwise, review such a reorganization or other  transaction
33    authorized by this Section, but shall retain the authority to
34    allocate  costs  as stated in Section 16-111(i). An entity to
                            -14-               LRB9009285JSmg
 1    which an electric utility sells, assigns, leases or transfers
 2    assets pursuant to this subsection (g) shall not, as a result
 3    of the transactions specified  in  this  subsection  (g),  be
 4    deemed a public utility as defined in Section 3-105.  Nothing
 5    in this subsection (g) shall change any requirement under the
 6    jurisdiction  of  the  Illinois  Department of Nuclear Safety
 7    including, but not limited to, the payment of  fees.  Nothing
 8    in  this subsection (g) shall exempt a utility from obtaining
 9    a certificate pursuant to Section 8-406 of this Act  for  the
10    construction  of a new electric generating facility.  Nothing
11    in this subsection (g) is intended to exempt the transactions
12    hereunder  from  the  operation  of  the  federal  or   State
13    antitrust  laws. Nothing in this subsection (g) shall require
14    an electric utility to use the procedures specified  in  this
15    subsection for any of the transactions specified herein.  Any
16    other procedure available under this Act may, at the electric
17    utility's election, be used for any such transaction.
18        (h)  During   the   mandatory   transition   period,  the
19    Commission  shall  not  establish  or  use   any   rates   of
20    depreciation,  which  for  purposes  of this subsection shall
21    include amortization, for any  electric  utility  other  than
22    those established pursuant to subsection (c) of Section 5-104
23    of  this  Act  or utilized pursuant to subsection (g) of this
24    Section.  Provided, however, that in any proceeding to review
25    an electric utility's rates for tariffed services pursuant to
26    Section 9-201, 9-202, 9-250 or 16-111(d)  of  this  Act,  the
27    Commission  may  establish  new rates of depreciation for the
28    electric utility in the same manner  provided  in  subsection
29    (d)  of  Section  5-104  of  this  Act.  An  electric utility
30    implementing an accelerated cost  recovery  method  including
31    accelerated  depreciation,  accelerated amortization or other
32    capital recovery methods,  or  recording  reductions  to  the
33    original  cost  of  its assets, pursuant to subsection (g) of
34    this Section, shall file  a  statement  with  the  Commission
                            -15-               LRB9009285JSmg
 1    describing   the  accelerated  cost  recovery  method  to  be
 2    implemented or the reduction in  the  original  cost  of  its
 3    assets  to  be  recorded.  Upon the filing of such statement,
 4    the accelerated cost recovery method or the reduction in  the
 5    original cost of assets shall be deemed to be approved by the
 6    Commission  as  though  an  order  had  been  entered  by the
 7    Commission.
 8        (i)  Subsequent to the mandatory transition  period,  the
 9    Commission,  in any proceeding to establish rates and charges
10    for tariffed services offered by an electric  utility,  shall
11    consider  only  (1)  the  then current or projected revenues,
12    costs, investments and cost of capital directly or indirectly
13    associated with the provision of such tariffed services;  (2)
14    collection  of transition charges in accordance with Sections
15    16-102 and 16-108 of this Act; (3) recovery of  any  employee
16    transition  costs  as  described  in Section 16-128 which the
17    electric utility is continuing to incur,  including  recovery
18    of  any unamortized portion of such costs previously incurred
19    or committed, with such costs to be equitably allocated among
20    bundled  services,  delivery  services,  and  contracts  with
21    alternative retail electric suppliers; and  (4)  recovery  of
22    the  costs  associated with the electric utility's compliance
23    with decommissioning  funding  requirements;  and  shall  not
24    consider  any  other  revenues, costs, investments or cost of
25    capital of either the electric utility or of any affiliate of
26    the  electric  utility  that  are  not  associated  with  the
27    provision  of  tariffed  services.   In  setting  rates   for
28    tariffed  services,  the  Commission shall equitably allocate
29    joint and common costs and investments between  the  electric
30    utility's  competitive and tariffed services.  In determining
31    the justness and reasonableness of  the  electric  power  and
32    energy  component of an electric utility's rates for tariffed
33    services subsequent to the mandatory  transition  period  and
34    prior  to  the time that the provision of such electric power
                            -16-               LRB9009285JSmg
 1    and energy is  declared  competitive,  the  Commission  shall
 2    consider  the extent to which the electric utility's tariffed
 3    rates for such component for each customer class  exceed  the
 4    market  value  determined pursuant to Section 16-112, and, if
 5    the electric power and energy component of such tariffed rate
 6    exceeds the market value by more than 10%  for  any  customer
 7    class, may establish such electric power and energy component
 8    at  a  rate  equal  to the market value plus 10%. In any such
 9    case, the Commission may also elect to extend the  provisions
10    of  Section  16-111(e)  for  any period in which the electric
11    utility is collecting transition charges,  using  information
12    applicable to such period.
13        (j)  During  the mandatory transition period, an electric
14    utility may elect  to  transfer  to  a  non-operating  income
15    account  under  the  Commission's  Uniform System of Accounts
16    either or both of (i) an amount of unamortized investment tax
17    credit that is in addition to the  ratable  amount  which  is
18    credited  to  the electric utility's operating income account
19    for the year in  accordance  with  Section  46(f)(2)  of  the
20    federal  Internal Revenue Code of 1986, as in effect prior to
21    P.L. 101-508, or (ii) "excess tax reserves", as that term  is
22    defined in Section 203(e)(2)(A) of the federal Tax Reform Act
23    of  1986,  provided  that  (A) the amount transferred may not
24    exceed the amount of the electric utility's assets that  were
25    created   pursuant   to  Statement  of  Financial  Accounting
26    Standards No. 71 which the electric utility has  written  off
27    during  the mandatory transition period, and (B) the transfer
28    shall not be effective until approved by the Internal Revenue
29    Service.   An  electric  utility  electing  to  make  such  a
30    transfer shall file a statement with the  Commission  stating
31    the amount and timing of the transfer for which it intends to
32    request  approval of the Internal Revenue Service, along with
33    a copy of  its  proposed  request  to  the  Internal  Revenue
34    Service  for  a  ruling.  The Commission shall issue an order
                            -17-               LRB9009285JSmg
 1    within 14 days after the electric utility's filing approving,
 2    subject to receipt of  approval  from  the  Internal  Revenue
 3    Service, the proposed transfer.
 4    (Source: P.A. 90-561, eff. 12-16-97; 90-563, eff. 12-16-97.)

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