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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.)".