State of Illinois
92nd General Assembly
Legislation

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92_SB2081ham002

 










                                             LRB9212879JScsam

 1                    AMENDMENT TO SENATE BILL 2081

 2        AMENDMENT NO.     .  Amend Senate Bill 2081, AS  AMENDED,
 3    in  the  introductory  clause  to  Section  5  of the bill by
 4    changing "Section 16-102" to "Sections  16-102  and  16-111";
 5    and

 6    in the body of Section 5 of the bill by inserting immediately
 7    below the last line of Sec. 16-102 the following:

 8        "(220 ILCS 5/16-111)
 9        Sec.  16-111. Rates and restructuring transactions during
10    mandatory transition period.
11        (a)  During    the    mandatory    transition     period,
12    notwithstanding  any provision of Article IX of this Act, and
13    except as provided in subsections (b), (d), (e), and  (f)  of
14    this   Section,   the  Commission  shall  not  (i)  initiate,
15    authorize or order any change by way of increase (other  than
16    in  connection  with  a  request  for rate increase which was
17    filed after September 1, 1997 but prior to October 15,  1997,
18    by  an electric utility serving less than 12,500 customers in
19    this State),  (ii)  initiate  or,  unless  requested  by  the
20    electric  utility,  authorize  or  order any change by way of
21    decrease, restructuring or unbundling (except as provided  in
22    Section  16-109A),  in the rates of any electric utility that
 
                            -2-              LRB9212879JScsam
 1    were in effect on October 1, 1996,  or  (iii)  in  any  order
 2    approving  any  application  for a merger pursuant to Section
 3    7-204 that was  pending  as  of  May  16,  1997,  impose  any
 4    condition  requiring any filing for an increase, decrease, or
 5    change in, or other review of, an electric utility's rates or
 6    enforce any such  condition  of  any  such  order;  provided,
 7    however,   that   this  subsection  shall  not  prohibit  the
 8    Commission from:
 9             (1)  approving  the  application  of   an   electric
10        utility  to  implement  an  alternative to rate of return
11        regulation or a  regulatory  mechanism  that  rewards  or
12        penalizes  the  electric  utility  through  adjustment of
13        rates based on utility performance, pursuant  to  Section
14        9-244;
15             (2)  authorizing  an  electric  utility to eliminate
16        its fuel adjustment  clause  and  adjust  its  base  rate
17        tariffs in accordance with subsection (b), (d), or (f) of
18        Section  9-220  of  this  Act, to fix its fuel adjustment
19        factor in accordance with subsection (c) of Section 9-220
20        of this Act, or to eliminate its fuel  adjustment  clause
21        in  accordance  with  subsection  (e) of Section 9-220 of
22        this Act;
23             (3)  ordering  into  effect  tariffs  for   delivery
24        services   and  transition  charges  in  accordance  with
25        Sections 16-104 and  16-108,  for  real-time  pricing  in
26        accordance  with  Section 16-107, or the options required
27        by Section 16-110 and subsection  (n) of 16-112, allowing
28        a billing experiment in accordance with  Section  16-106,
29        or modifying delivery services tariffs in accordance with
30        Section 16-109; or
31             (4)  ordering  or allowing into effect any tariff to
32        recover charges pursuant to  Sections  9-201.5,  9-220.1,
33        9-221,  9-222  (except  as  provided in Section 9-222.1),
34        16-108, and 16-114  of  this  Act,  Section  5-5  of  the
 
                            -3-              LRB9212879JScsam
 1        Electricity  Infrastructure  Maintenance Fee Law, Section
 2        6-5 of the Renewable Energy, Energy Efficiency, and  Coal
 3        Resources  Development Law of 1997, and Section 13 of the
 4        Energy Assistance Act of 1989.
 5        After  December  31,  2004,  the   provisions   of   this
 6    subsection  (a)  shall not apply to an electric utility whose
 7    average residential retail rate was less than or equal to 90%
 8    of the average  residential  retail  rate  for  the  "Midwest
 9    Utilities", as that term is defined in subsection (b) of this
10    Section,  based  on  data  reported  on Form 1 to the Federal
11    Energy Regulatory Commission  for  calendar  year  1995,  and
12    which  served between 150,000 and 250,000 retail customers in
13    this State on January 1, 1995.
14        (b)  Notwithstanding the provisions  of  subsection  (a),
15    each  Illinois  electric  utility  serving  more  than 12,500
16    customers  in  Illinois  shall  file  tariffs  (i)  reducing,
17    effective August 1, 1998, each component of its base rates to
18    residential retail customers by 15% from the  base  rates  in
19    effect  immediately  prior to January 1, 1998 and (ii) if the
20    public utility provides electric service  to  (A)  more  than
21    500,000  customers  but less than 1,000,000 customers in this
22    State on January 1, 1999, reducing, effective  May  1,  2002,
23    each  component  of  its  base  rates  to  residential retail
24    customers by an additional 5% from the base rates  in  effect
25    immediately  prior  to  January  1,  1998,  or  (B)  at least
26    1,000,000  customers  in  this  State  on  January  1,  1999,
27    reducing, effective October 1, 2001, each  component  of  its
28    base  rates  to residential retail customers by an additional
29    5% from the base rates in effect immediately prior to January
30    1, 1998. Provided, however, that (A) if an electric utility's
31    average residential retail rate is less than or equal to  the
32    average  residential  retail  rate  for  a  group  of Midwest
33    Utilities  (consisting   of   all   investor-owned   electric
34    utilities   with  annual  system  peaks  in  excess  of  1000
 
                            -4-              LRB9212879JScsam
 1    megawatts in the States of Illinois, Indiana, Iowa, Kentucky,
 2    Michigan, Missouri,  Ohio,  and  Wisconsin),  based  on  data
 3    reported   on   Form  1  to  the  Federal  Energy  Regulatory
 4    Commission for calendar year 1995,  then  it  shall  only  be
 5    required  to  file  tariffs (i) reducing, effective August 1,
 6    1998, each component of its base rates to residential  retail
 7    customers  by  5%  from  the base rates in effect immediately
 8    prior to January 1, 1998, (ii) reducing, effective October 1,
 9    2000, each component of its base rates to residential  retail
10    customers  by  the  lesser  of 5% of the base rates in effect
11    immediately prior to January 1, 1998  or  the  percentage  by
12    which  the electric utility's average residential retail rate
13    exceeds the average residential retail rate  of  the  Midwest
14    Utilities,  based  on  data reported on Form 1 to the Federal
15    Energy Regulatory Commission  for  calendar  year  1999,  and
16    (iii)  reducing, effective October 1, 2002, each component of
17    its  base  rates  to  residential  retail  customers  by   an
18    additional amount equal to the lesser of 5% of the base rates
19    in  effect  immediately  prior  to  January  1,  1998  or the
20    percentage  by   which   the   electric   utility's   average
21    residential  retail  rate  exceeds  the  average  residential
22    retail  rate of the Midwest Utilities, based on data reported
23    on Form 1 to the Federal  Energy  Regulatory  Commission  for
24    calendar year 2001; and (B) if the average residential retail
25    rate  of  an  electric  utility  serving  between 150,000 and
26    250,000 retail customers in this State on January 1, 1995  is
27    less  than  or equal to 90% of the average residential retail
28    rate for the Midwest Utilities, based  on  data  reported  on
29    Form  1  to  the  Federal  Energy  Regulatory  Commission for
30    calendar year 1995, then it shall only be  required  to  file
31    tariffs   (i)   reducing,  effective  August  1,  1998,  each
32    component of its base rates to residential  retail  customers
33    by  2%  from  the  base  rates in effect immediately prior to
34    January 1, 1998; (ii) reducing, effective  October  1,  2000,
 
                            -5-              LRB9212879JScsam
 1    each  component  of  its  base  rates  to  residential retail
 2    customers by 2% from the  base  rate  in  effect  immediately
 3    prior  to  January  1,  1998;  and  (iii) reducing, effective
 4    October  1,  2002,  each  component  of  its  base  rates  to
 5    residential retail customers by 1% from  the  base  rates  in
 6    effect  immediately  prior  to  January  1,  1998.  Provided,
 7    further,  that  any  electric utility for which a decrease in
 8    base rates has been or is placed into effect between  October
 9    1, 1996 and the dates specified in the preceding sentences of
10    this  subsection,  other than pursuant to the requirements of
11    this subsection, shall be entitled to reduce  the  amount  of
12    any  reduction  or  reductions  in its base rates required by
13    this subsection by the amount of  such  other  decrease.  The
14    tariffs required under this subsection shall be filed 45 days
15    in advance of the effective date. Notwithstanding anything to
16    the  contrary in Section 9-220 of this Act, no restatement of
17    base rates in conjunction with  the  elimination  of  a  fuel
18    adjustment clause under that Section shall result in a lesser
19    decrease in base rates than customers would otherwise receive
20    under   this  subsection  had  the  electric  utility's  fuel
21    adjustment clause not been eliminated.
22        (c)  Any utility reducing its base rates by 15% on August
23    1,  1998  pursuant  to  subsection  (b)  shall  include   the
24    following  statement  on  its bills for residential customers
25    from August 1 through December 31, 1998: "Effective August 1,
26    1998, your rates have been reduced by  15%  by  the  Electric
27    Service Customer Choice and Rate Relief Law of 1997 passed by
28    the  Illinois  General  Assembly.".  Any utility reducing its
29    base rates by 5% on August 1, 1998,  pursuant  to  subsection
30    (b)  shall  include  the following statement on its bills for
31    residential customers from  August  1  through  December  31,
32    1998:   "Effective  August  1,  1998,  your  rates  have been
33    reduced by 5% by the Electric  Service  Customer  Choice  and
34    Rate  Relief  Law  of  1997  passed  by  the Illinois General
 
                            -6-              LRB9212879JScsam
 1    Assembly.".
 2        Any utility reducing its base rates by 2%  on  August  1,
 3    1998  pursuant  to subsection (b) shall include the following
 4    statement on its bills for residential customers from  August
 5    1  through December 31, 1998: "Effective August 1, 1998, your
 6    rates have  been  reduced  by  2%  by  the  Electric  Service
 7    Customer  Choice  and  Rate  Relief Law of 1997 passed by the
 8    Illinois General Assembly.".
 9        (d)  During the  mandatory  transition  period,  but  not
10    before  January  1, 2000, and notwithstanding  the provisions
11    of  subsection  (a),  an  electric  utility  may  request  an
12    increase  in  its  base  rates  if   the   electric   utility
13    demonstrates  that  the  2-year average of its earned rate of
14    return  on  common  equity,  calculated  as  its  net  income
15    applicable to common stock divided  by  the  average  of  its
16    beginning  and  ending  balances  of common equity using data
17    reported in the electric  utility's  Form  1  report  to  the
18    Federal  Energy  Regulatory Commission but adjusted to remove
19    the effects of accelerated depreciation  or  amortization  or
20    other  transition  or  mitigation measures implemented by the
21    electric utility pursuant to subsection (g) of  this  Section
22    and  the effect of any refund paid pursuant to subsection (e)
23    of this Section, is below the 2-year average for the  same  2
24    years of the monthly average yields of 30-year  U.S. Treasury
25    bonds  published  by  the  Board of Governors of the  Federal
26    Reserve System in its  weekly  H.15  Statistical  Release  or
27    successor   publication.  The  Commission  shall  review  the
28    electric utility's request, and may review the  justness  and
29    reasonableness   of  all  rates  for  tariffed  services,  in
30    accordance with the provisions of Article  IX  of  this  Act,
31    provided  that  the  Commission shall consider any special or
32    negotiated adjustments to the revenue requirement  agreed  to
33    between  the  electric  utility  and the other parties to the
34    proceeding.   In  setting  rates  under  this  Section,   the
 
                            -7-              LRB9212879JScsam
 1    Commission  shall  exclude  the  costs  and revenues that are
 2    associated with  competitive  services  and  any  billing  or
 3    pricing experiments conducted under Section 16-106.
 4        (e)  For   the   purposes  of  this  subsection  (e)  all
 5    calculations and  comparisons  shall  be  performed  for  the
 6    Illinois operations of multijurisdictional utilities.  During
 7    the   mandatory   transition   period,   notwithstanding  the
 8    provisions of subsection (a), if the  2-year  average  of  an
 9    electric  utility's  earned  rate of return on common equity,
10    calculated as its  net  income  applicable  to  common  stock
11    divided  by  the average of its beginning and ending balances
12    of  common  equity  using  data  reported  in  the   electric
13    utility's  Form  1  report  to  the Federal Energy Regulatory
14    Commission but adjusted to remove the effect  of  any  refund
15    paid  under  this  subsection  (e),  and  further adjusted to
16    include the annual amortization of any difference between the
17    consideration received  by  an  affiliated  interest  of  the
18    electric  utility in the sale of an asset which had been sold
19    or transferred by the  electric  utility  to  the  affiliated
20    interest  subsequent to the effective date of this amendatory
21    Act of 1997 and the consideration for which  such  asset  had
22    been  sold  or  transferred  to the affiliated interest, with
23    such difference to be amortized ratably from the date of  the
24    sale by the affiliated interest to December 31, 2006, exceeds
25    the  2-year  average of the Index for the same 2 years by 1.5
26    or more percentage points, the electric  utility  shall  make
27    refunds to customers beginning the first billing day of April
28    in  the  following  year in the manner described in paragraph
29    (3) of this subsection. For purposes of this subsection  (e),
30    the  "Index"  shall  be the sum of (A) the average for the 12
31    months ended September 30 of the monthly  average  yields  of
32    30-year  U.S.  Treasury  bonds  published  by  the  Board  of
33    Governors  of  the  Federal Reserve System in its weekly H.15
34    Statistical Release or successor publication  for  each  year
 
                            -8-              LRB9212879JScsam
 1    1998  through  2004,  and  (B) (i) 4.00 percentage points for
 2    each of  the  12-month  periods  ending  September  30,  1998
 3    through  September  30, 1999 or 8.00 percentage points if the
 4    electric utility's average residential retail  rate  is  less
 5    than  or  equal to 90% of the average residential retail rate
 6    for the "Midwest Utilities",  as  that  term  is  defined  in
 7    subsection  (b)  of  this  Section, based on data reported on
 8    Form 1  to  the  Federal  Energy  Regulatory  Commission  for
 9    calendar  year  1995, and the electric utility served between
10    150,000 and 250,000 retail customers on January 1, 1995, (ii)
11    7.00 percentage points  for  each  of  the  12-month  periods
12    ending  September  30, 2000 through September 30, 2004 if the
13    electric utility was providing service to at least  1,000,000
14    customers   in  this  State  on  January  1,  1999,  or  9.00
15    percentage  points  if   the   electric   utility's   average
16    residential  retail  rate is less than or equal to 90% of the
17    average residential retail rate for the "Midwest  Utilities",
18    as  that  term  is defined in subsection (b) of this Section,
19    based on data reported  on  Form  1  to  the  Federal  Energy
20    Regulatory Commission for calendar year 1995 and the electric
21    utility  served  between 150,000 and 250,000 retail customers
22    in this State on January  1,  1995,  (iii)  11.00  percentage
23    points  for each of the 12-month periods ending September 30,
24    2000 through September 30, 2004, but  only  if  the  electric
25    utility's  average  residential  retail  rate is less than or
26    equal to 90% of the average residential retail rate  for  the
27    "Midwest  Utilities",  as  that term is defined in subsection
28    (b) of this Section, based on data reported on Form 1 to  the
29    Federal  Energy Regulatory Commission for calendar year 1995,
30    the electric  utility  served  between  150,000  and  250,000
31    retail  customers  in  this State on January 1, 1995, and the
32    electric utility offers delivery services on or  before  June
33    1,  2000 to retail customers whose annual electric energy use
34    comprises 33% of the kilowatt hour sales  to  that  group  of
 
                            -9-              LRB9212879JScsam
 1    retail customers that are classified under Division D, Groups
 2    20  through 39 of the Standard Industrial Classifications set
 3    forth  in  the  Standard  Industrial  Classification   Manual
 4    published  by  the  United  States  Office  of Management and
 5    Budget, excluding the kilowatt hour sales to those  customers
 6    that  are  eligible for delivery services pursuant to Section
 7    16-104(a)(1)(i),  and  offers  delivery   services   to   its
 8    remaining  retail  customers  classified  under  Division  D,
 9    Groups  20  through  39  on  or  before October 1, 2000, and,
10    provided further, that the electric utility  commits  not  to
11    petition  pursuant to Section 16-108(f) for entry of an order
12    by  the  Commission  authorizing  the  electric  utility   to
13    implement  transition  charges for an additional period after
14    December 31, 2006, or (iv) 5.00 percentage points for each of
15    the  12-month  periods  ending  September  30,  2000  through
16    September 30, 2004 for all other electric utilities  or  7.00
17    percentage points for such utilities for each of the 12-month
18    periods  ending September 30, 2000 through September 30, 2004
19    for any such utility that commits not to petition pursuant to
20    Section 16-108(f) for entry of an  order  by  the  Commission
21    authorizing  the  electric  utility  to  implement transition
22    charges for an additional period after December 31, 2006.
23             (1)  For purposes of this  subsection  (e),  "excess
24        earnings"  means  the  difference  between (A) the 2-year
25        average of the electric utility's earned rate  of  return
26        on  common equity, less (B) the 2-year average of the sum
27        of (i) the Index applicable to each of the  2  years  and
28        (ii)   1.5  percentage  points;  provided,  that  "excess
29        earnings" shall never be less than zero.
30             (2)  On or before March 31 of each year 2000 through
31        2005 each electric utility shall file a report  with  the
32        Commission  showing  its  earned rate of return on common
33        equity, calculated in accordance  with  this  subsection,
34        for  the  preceding calendar year and the average for the
 
                            -10-             LRB9212879JScsam
 1        preceding 2 calendar years.
 2             (3)  If an electric  utility  has  excess  earnings,
 3        determined  in  accordance with paragraphs (1) and (2) of
 4        this subsection, the refunds which the  electric  utility
 5        shall  pay   to its customers beginning the first billing
 6        day of April in the following year  shall  be  calculated
 7        and applied as follows:
 8                  (i)  The  electric  utility's  excess  earnings
 9             shall  be multiplied by the average of the beginning
10             and ending balances of the electric utility's common
11             equity  for  the  2-year  period  in  which   excess
12             earnings occurred.
13                  (ii)  The  result  of  the  calculation  in (i)
14             shall be multiplied by 0.50 and then  divided  by  a
15             number  equal  to  1  minus  the  electric utility's
16             composite federal and State income tax rate.
17                  (iii)  The result of the  calculation  in  (ii)
18             shall   be  divided  by  the  sum  of  the  electric
19             utility's projected  total  kilowatt-hour  sales  to
20             retail customers plus projected kilowatt-hours to be
21             delivered  to delivery services customers over a one
22             year period beginning with the first billing date in
23             April in the succeeding year to  determine  a  cents
24             per kilowatt-hour refund factor.
25                  (iv)  The cents per kilowatt-hour refund factor
26             calculated   in  (iii)  shall  be  credited  to  the
27             electric utility's customers by applying the  factor
28             on    the   customer's   monthly   bills   to   each
29             kilowatt-hour sold  or  delivered  until  the  total
30             amount   calculated   in   (ii)  has  been  paid  to
31             customers.
32        (f)  During the mandatory transition period, an  electric
33    utility  may  file  revised tariffs reducing the price of any
34    tariffed service offered by  the  electric  utility  for  all
 
                            -11-             LRB9212879JScsam
 1    customers  taking  that  tariffed  service,  which  shall  be
 2    effective 7 days after filing.
 3        (g)  During  the mandatory transition period, an electric
 4    utility may, without obtaining any approval of the Commission
 5    other  than  that  provided  for  in  this   subsection   and
 6    notwithstanding  any  other provision of this Act or any rule
 7    or regulation of  the  Commission  that  would  require  such
 8    approval:
 9             (1)  implement a reorganization, other than a merger
10        of 2 or more public utilities as defined in Section 3-105
11        or their holding companies;
12             (2)  retire generating plants from service;
13             (3)  sell,   assign,  lease  or  otherwise  transfer
14        assets to an affiliated or  unaffiliated  entity  and  as
15        part  of  such transaction enter into service agreements,
16        power purchase agreements, or other agreements  with  the
17        transferee; provided, however, that the prices, terms and
18        conditions  of  any  power  purchase  agreement  must  be
19        approved  or  allowed  into  effect by the Federal Energy
20        Regulatory Commission; or
21             (4)  use  any  accelerated  cost   recovery   method
22        including     accelerated    depreciation,    accelerated
23        amortization or other capital recovery methods, or record
24        reductions to the original cost of its assets.
25        In order to implement a reorganization, retire generating
26    plants from service, or  sell,  assign,  lease  or  otherwise
27    transfer  assets  pursuant  to  this  Section,  the  electric
28    utility  shall comply with subsections (c) and (d) of Section
29    16-128, if applicable, and subsection (k) of this Section, if
30    applicable, and provide the Commission with at least 30  days
31    notice  of  the proposed reorganization or transaction, which
32    notice shall include the following information:
33                  (i)  a complete statement of the  entries  that
34             the  electric  utility  will  make  on its books and
 
                            -12-             LRB9212879JScsam
 1             records  of  account  to  implement   the   proposed
 2             reorganization   or   transaction  together  with  a
 3             certification from an independent  certified  public
 4             accountant  that  such  entries  are  in accord with
 5             generally accepted accounting principles and, if the
 6             Commission has previously  approved  guidelines  for
 7             cost   allocations   between  the  utility  and  its
 8             affiliates,   a   certification   from   the   chief
 9             accounting officer of the utility that such  entries
10             are in accord with those cost allocation guidelines;
11                  (ii)  a description of how the electric utility
12             will  use proceeds of any sale, assignment, lease or
13             transfer to  retire  debt  or  otherwise  reduce  or
14             recover  the  costs  of  services  provided  by such
15             electric utility;
16                  (iii)  a  list  of  all  federal  approvals  or
17             approvals required from departments and agencies  of
18             this  State,  other  than  the  Commission, that the
19             electric  utility  has   or   will   obtain   before
20             implementing the reorganization or transaction;
21                  (iv)  an irrevocable commitment by the electric
22             utility  that  it  will  not,  as  a  result  of the
23             transaction, impose any stranded cost  charges  that
24             it  might  otherwise  be  allowed  to  charge retail
25             customers  under  federal  law   or   increase   the
26             transition  charges that it is otherwise entitled to
27             collect under this Article XVI; and
28                  (v)  if the electric utility proposes to  sell,
29             assign,  lease  or  otherwise  transfer a generating
30             plant that  brings  the  amount  of  net  dependable
31             generating  capacity  transferred  pursuant  to this
32             subsection to an amount equal to or greater than 15%
33             of the electric utility's net dependable capacity as
34             of the effective date  of  this  amendatory  Act  of
 
                            -13-             LRB9212879JScsam
 1             1997,  and  enters  into  a power purchase agreement
 2             with the entity to which such  generating  plant  is
 3             sold,  assigned,  leased,  or otherwise transferred,
 4             the electric  utility  also  agrees,  if   its  fuel
 5             adjustment  clause  has not already been eliminated,
 6             to  eliminate  its   fuel   adjustment   clause   in
 7             accordance  with subsection (b) of Section 9-220 for
 8             a period of time equal to the  length  of  any  such
 9             power  purchase agreement or successor agreement, or
10             until January 1, 2005, whichever is longer;  if  the
11             capacity  of the generating plant so transferred and
12             related power purchase agreement does not result  in
13             the  elimination of the fuel adjustment clause under
14             this subsection, and the fuel adjustment clause  has
15             not  already  been  eliminated, the electric utility
16             shall agree  that  the  costs  associated  with  the
17             transferred   plant   that   are   included  in  the
18             calculation of the  rate  per  kilowatt-hour  to  be
19             applied  pursuant  to  the  electric  utility's fuel
20             adjustment  clause  during  such  period  shall  not
21             exceed the per kilowatt-hour  cost  associated  with
22             such  generating  plant  included  in  the  electric
23             utility's  fuel  adjustment  clause  during the full
24             calendar year  preceding  the  transfer,  with  such
25             limit  to  be   adjusted each year thereafter by the
26             Gross Domestic Product Implicit Price Deflator.
27                  (vi)  In  addition,  if  the  electric  utility
28             proposes to sell, assign, or lease, (A)  either  (1)
29             an amount of generating plant that brings the amount
30             of  net  dependable  generating capacity transferred
31             pursuant to this subsection to an amount equal to or
32             greater than 15% of its net dependable  capacity  on
33             the  effective  date of this amendatory Act of 1997,
34             or (2) one or more generating plants  with  a  total
 
                            -14-             LRB9212879JScsam
 1             net  dependable  capacity  of 1100 megawatts, or (B)
 2             transmission and distribution facilities that either
 3             (1)   bring   the   amount   of   transmission   and
 4             distribution facilities transferred pursuant to this
 5             subsection to an amount equal to or greater than 15%
 6             of the electric utility's total depreciated original
 7             cost investment in such facilities, or (2) represent
 8             an investment  of  $25,000,000  in  terms  of  total
 9             depreciated  original  cost,  the  electric  utility
10             shall provide, in addition to the information listed
11             in  subparagraphs  (i)  through  (v),  the following
12             information: (A) a description of how  the  electric
13             utility will meet its service obligations under this
14             Act  in  a  safe  and  reliable  manner  and (B) the
15             electric utility's projected earned rate  of  return
16             on  common  equity,  calculated  in  accordance with
17             subsection (d) of this Section, for each  year  from
18             the  date  of  the  notice through December 31, 2004
19             both with and without the proposed transaction.   If
20             the  Commission has not issued an order initiating a
21             hearing on the proposed transaction within  30  days
22             after  the  date  the  electric  utility's notice is
23             filed, the transaction  shall  be  deemed  approved.
24             The   Commission  may,  after  notice  and  hearing,
25             prohibit the proposed transaction if it makes either
26             or both of the  following  findings:  (1)  that  the
27             proposed   transaction   will  render  the  electric
28             utility unable to provide its tariffed services in a
29             safe and reliable manner, or (2)  that  there  is  a
30             strong  likelihood that consummation of the proposed
31             transaction will  result  in  the  electric  utility
32             being  entitled  to  request an increase in its base
33             rates  during  the   mandatory   transition   period
34             pursuant  to  subsection  (d)  of this Section.  Any
 
                            -15-             LRB9212879JScsam
 1             hearing  initiated  by  the  Commission   into   the
 2             proposed  transaction  shall  be  completed, and the
 3             Commission's final order  approving  or  prohibiting
 4             the proposed transaction shall be entered, within 90
 5             days  after  the  date the electric utility's notice
 6             was  filed.  Provided,   however,   that   a   sale,
 7             assignment,  or  lease of transmission facilities to
 8             an  independent  system  operator  that  meets   the
 9             requirements  of Section 16-126 shall not be subject
10             to Commission approval under this Section.
11                  In any proceeding conducted by  the  Commission
12             pursuant  to  this  subparagraph  (vi), intervention
13             shall be limited to parties with a  direct  interest
14             in  the  transaction  which  is  the  subject of the
15             hearing and any statutory consumer protection agency
16             as defined in subsection  (d)  of  Section  9-102.1.
17             Notwithstanding  the provisions of Section 10-113 of
18             this Act, any application seeking  rehearing  of  an
19             order  issued  under this subparagraph (vi), whether
20             filed by the electric utility or by  an  intervening
21             party,  shall  be filed within 10 days after service
22             of the order.
23        The Commission shall not in any subsequent proceeding  or
24    otherwise,  review such a reorganization or other transaction
25    authorized by this Section, but shall retain the authority to
26    allocate costs as stated in Section 16-111(i). An  entity  to
27    which an electric utility sells, assigns, leases or transfers
28    assets pursuant to this subsection (g) shall not, as a result
29    of  the  transactions  specified  in  this subsection (g), be
30    deemed a public utility as defined in Section 3-105.  Nothing
31    in this subsection (g) shall change any requirement under the
32    jurisdiction of the Illinois  Department  of  Nuclear  Safety
33    including,  but  not limited to, the payment of fees. Nothing
34    in this subsection (g) shall exempt a utility from  obtaining
 
                            -16-             LRB9212879JScsam
 1    a  certificate  pursuant to Section 8-406 of this Act for the
 2    construction of a new electric generating facility.   Nothing
 3    in this subsection (g) is intended to exempt the transactions
 4    hereunder   from  the  operation  of  the  federal  or  State
 5    antitrust laws. Nothing in this subsection (g) shall  require
 6    an  electric  utility to use the procedures specified in this
 7    subsection for any of the transactions specified herein.  Any
 8    other procedure available under this Act may, at the electric
 9    utility's election, be used for any such transaction.
10        (h)  During  the   mandatory   transition   period,   the
11    Commission   shall   not   establish  or  use  any  rates  of
12    depreciation, which for purposes  of  this  subsection  shall
13    include  amortization,  for  any  electric utility other than
14    those established pursuant to subsection (c) of Section 5-104
15    of this Act or utilized pursuant to subsection  (g)  of  this
16    Section.  Provided, however, that in any proceeding to review
17    an electric utility's rates for tariffed services pursuant to
18    Section  9-201,  9-202,  9-250  or 16-111(d) of this Act, the
19    Commission may establish new rates of  depreciation  for  the
20    electric  utility  in  the same manner provided in subsection
21    (d) of  Section  5-104  of  this  Act.  An  electric  utility
22    implementing  an  accelerated  cost recovery method including
23    accelerated depreciation, accelerated amortization  or  other
24    capital  recovery  methods,  or  recording  reductions to the
25    original cost of its assets, pursuant to  subsection  (g)  of
26    this  Section,  shall  file  a  statement with the Commission
27    describing  the  accelerated  cost  recovery  method  to   be
28    implemented  or  the  reduction  in  the original cost of its
29    assets to be recorded.  Upon the filing  of  such  statement,
30    the  accelerated cost recovery method or the reduction in the
31    original cost of assets shall be deemed to be approved by the
32    Commission as  though  an  order  had  been  entered  by  the
33    Commission.
34        (i)  Subsequent  to  the mandatory transition period, the
 
                            -17-             LRB9212879JScsam
 1    Commission, in any proceeding to establish rates and  charges
 2    for  tariffed  services offered by an electric utility, shall
 3    consider only (1) the then  current  or  projected  revenues,
 4    costs, investments and cost of capital directly or indirectly
 5    associated  with the provision of such tariffed services; (2)
 6    collection of transition charges in accordance with  Sections
 7    16-102  and  16-108 of this Act; (3) recovery of any employee
 8    transition costs as described in  Section  16-128  which  the
 9    electric  utility  is continuing to incur, including recovery
10    of any unamortized portion of such costs previously  incurred
11    or committed, with such costs to be equitably allocated among
12    bundled  services,  delivery  services,  and  contracts  with
13    alternative  retail  electric  suppliers; and (4) recovery of
14    the costs associated with the electric  utility's  compliance
15    with  decommissioning  funding  requirements;  and  shall not
16    consider any other revenues, costs, investments  or  cost  of
17    capital of either the electric utility or of any affiliate of
18    the  electric  utility  that  are  not  associated  with  the
19    provision   of  tariffed  services.   In  setting  rates  for
20    tariffed services, the Commission  shall  equitably  allocate
21    joint  and  common costs and investments between the electric
22    utility's competitive and tariffed services.  In  determining
23    the  justness  and  reasonableness  of the electric power and
24    energy component of an electric utility's rates for  tariffed
25    services  subsequent  to  the mandatory transition period and
26    prior to the time that the provision of such  electric  power
27    and  energy  is  declared  competitive,  the Commission shall
28    consider the extent to which the electric utility's  tariffed
29    rates  for  such component for each customer class exceed the
30    market value determined pursuant to Section 16-112,  and,  if
31    the electric power and energy component of such tariffed rate
32    exceeds  the  market  value by more than 10% for any customer
33    class, may establish such electric power and energy component
34    at a rate equal to the market value plus  10%.  In  any  such
 
                            -18-             LRB9212879JScsam
 1    case,  the Commission may also elect to extend the provisions
 2    of Section 16-111(e) for any period  in  which  the  electric
 3    utility  is  collecting transition charges, using information
 4    applicable to such period.
 5        (j)  During the mandatory transition period, an  electric
 6    utility  may  elect  to  transfer  to  a non-operating income
 7    account under the Commission's  Uniform  System  of  Accounts
 8    either or both of (i) an amount of unamortized investment tax
 9    credit  that  is  in  addition to the ratable amount which is
10    credited to the electric utility's operating  income  account
11    for  the  year  in  accordance  with  Section 46(f)(2) of the
12    federal Internal Revenue Code of 1986, as in effect prior  to
13    P.L.  101-508, or (ii) "excess tax reserves", as that term is
14    defined in Section 203(e)(2)(A) of the federal Tax Reform Act
15    of 1986, provided that (A) the  amount  transferred  may  not
16    exceed  the amount of the electric utility's assets that were
17    created  pursuant  to  Statement  of   Financial   Accounting
18    Standards  No.  71 which the electric utility has written off
19    during the mandatory transition period, and (B) the  transfer
20    shall not be effective until approved by the Internal Revenue
21    Service.   An  electric  utility  electing  to  make  such  a
22    transfer  shall  file a statement with the Commission stating
23    the amount and timing of the transfer for which it intends to
24    request approval of the Internal Revenue Service, along  with
25    a  copy  of  its  proposed  request  to  the Internal Revenue
26    Service for a ruling.  The Commission shall  issue  an  order
27    within 14 days after the electric utility's filing approving,
28    subject  to  receipt  of  approval  from the Internal Revenue
29    Service, the proposed transfer.
30        (k)  If an electric utility is selling or transferring to
31    a single buyer 5 or more generating plants  located  in  this
32    State  with a total net dependable capacity of 5000 megawatts
33    or more pursuant to subsection (g) of this  Section  and  has
34    obtained  a  sale price or consideration that exceeds 200% of
 
                            -19-             LRB9212879JScsam
 1    the book value of such  plants,  the  electric  utility  must
 2    provide  to  the  Governor,  the  President  of  the Illinois
 3    Senate, the Minority  Leader  of  the  Illinois  Senate,  the
 4    Speaker  of  the  Illinois  House of Representatives, and the
 5    Minority Leader of the Illinois House of  Representatives  no
 6    later  than  15 days after filing its notice under subsection
 7    (g) of this Section or 5 days after the date  on  which  this
 8    subsection  (k)  becomes  law,  whichever is later, a written
 9    commitment in which such electric utility agrees to expend $2
10    billion outside the corporate limits of any municipality with
11    1,000,000 or more inhabitants within such electric  utility's
12    service  area,  over  a  6-year  period  beginning  with  the
13    calendar  year  in  which  the  notice is filed, on projects,
14    programs, and improvements within its service  area  relating
15    to   transmission   and   distribution   including,   without
16    limitation, infrastructure expansion, repair and replacement,
17    capital   investments,   operations   and   maintenance,  and
18    vegetation management.
19    (Source: P.A. 90-561, eff. 12-16-97; 90-563,  eff.  12-16-97;
20    91-50, eff. 6-30-99.)".

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