Section 551.10  Definitions and Incorporations

 

a)         Definitions

 

"Accountant's report" has the same meaning as in 17 CFR 210.1-02 and 210.2-02 as of April 1, 2001.

 

"Act" means the Public Utilities Act [220 ILCS 5].

 

"Alternative gas supplier" or "AGS" has the same meaning as in Section 19-105 of the Act [220 ILCS 5/19-105].

 

"Applicant" means an entity that files an application with the Illinois Commerce Commission to provide residential or small commercial gas service as an alternative gas supplier under Section 19-115 of the Act [220 ILCS 5/19-115].

 

"Best's financial size category" refers to a numerical value that A.M. Best or its successor assigns to an insurance company based on the amount of that insurance company's policyholders' surplus and reserve funds.

 

"Best's rating" refers to a rating from A.M. Best or its successor that provides an overall opinion of an insurance company's ability to meet its obligations to policyholders.

 

"Certified", when used in regard to financial statements, has the same meaning as in 17 CFR 210.1-02 as of April 1, 2001.

 

"Commission" means the Illinois Commerce Commission.

 

"Dekatherm" means one thousand Mcf of natural gas at one thousand British Thermal Units per cubic foot or one million British Thermal Units.

 

"Dun & Bradstreet Business Information Report" means a credit report on businesses published by Dun & Bradstreet or its successor.

 

"Dun & Bradstreet Composite Credit Appraisal" means a number, one through four (one being the highest), that reflects Dun & Bradstreet's or its successor's overall assessment of a firm's creditworthiness.

 

"Experian Small Business Intelliscore report" means a credit report on individuals or businesses published by Experian or its successor.

 

"Financial statements" has the same meaning as in 17 CFR 210.3-01 to 210.3-05 as of April 1, 2001.

 

"Funds from operations interest coverage" equals (cash flow from operations exclusive of changes in working capital plus gross interest expense) divided by gross interest incurred before subtraction of capitalized interest and interest income.

 

"Funds from operations to average total debt" equals (cash flow from operations exclusive of changes in working capital plus depreciation adjustment for operating leases) divided by the average balance of total debt.

 

"Guarantee" means an undertaking by a guarantor to pay or fulfill the obligation upon failure of the principal obligor to fulfill its contractual obligations. A guarantee shall contain the following provisions:

 

The guarantee is one of payment and not of collection;

 

The guarantor's obligations under the guarantee are weighed equally with other guarantees;

 

The obligations from transactions entered into under the original guarantee must be the subject of an ongoing guarantee;

 

The guarantee reinstates if any guaranteed payment made by the primary obligor is recaptured as a result of bankruptcy or insolvency; and

 

The guarantee is binding on successors of the guarantor.

 

"Intelliscore" means a score range from 0 to 100 that reflects Experian's assessment of the likelihood of an individual or business becoming seriously delinquent on its outstanding obligations, as reported in the Experian Small Business Intelliscore report.

 

"Letter of credit" means an instrument issued by a bank guaranteeing the payment of a customer's (i.e., the applicant or AGS) drafts in favor of a third party up to a stated amount for a specified period.

 

"License bond" or "Permit bond" means an obligation of a surety to pay the monies that the licensee owes the State of Illinois for violations of the duties and obligations imposed on it as an AGS.

 

"Management position" means an employed position whereby an individual is responsible for directing, supervising, or administering the activities of a group of two or more people with fiscal responsibility and authority over that group.

 

"Material" has the same meaning as in 17 CFR 210.1-02 as of April 1, 2001.

 

"Mcf" means one thousand cubic feet at 14.73 pounds per square inch and 60 degrees Fahrenheit and free of water vapor.

 

"Parent" has the same meaning as in 17 CFR 210.1-02 as of April 1, 2001.

 

"Payment bond" means an obligation of a surety to pay the monies that the principal (i.e., the applicant or AGS) owes another party in the event that the applicant or AGS fails for whatever reason to perform its contracts.

 

"PAYDEX Score" is a number from 1 to 100 that represents Dun & Bradstreet's assessment of a company's payment performance, as reported in the Dun & Bradstreet Business Information Report.

 

"Pre-tax interest coverage" equals earnings from continuing operations before interest and taxes divided by gross interest incurred before subtraction of capitalized interest and interest income.

 

"Qualifying surety" or "insurance company" means a surety or insurer that is authorized by the U.S. Department of the Treasury pursuant to 31 USC 9305. A qualifying surety or insurer may not underwrite more than the amount specified by the U.S. Department of the Treasury on a single bond.

 

"Ratings agency" means Standard & Poor's or its successor, Moody's Investors Service or its successor, or Fitch Ratings or its successor.

 

"Residential customer", as used in this Part, means the same as the term is defined in Section 19-105 of the Act.

 

"Segment" refers to a component of an entity whose activities represent a separate major line of business or class of residential or small commercial customer.

 

"Small commercial customer", as used in this Part, means the same as the term is defined in Section 19-105 of the Act.

 

"Surplus Line Association of Illinois" is an organization of Illinois surplus line producers as defined in Section 445.1 of the Illinois Insurance Code [215 ILCS 5/445.1].

 

"Technical staff" means a staff of trained technical experts in gas and energy supply, including persons who have completed an accredited or otherwise recognized apprenticeship program or a formal education program and persons who possess no less than four years of experience working in a similar position with a utility, AGS or related business. This shall also include those persons registered as professional engineers as required by the Professional Engineering Practice Act of 1989 [225 ILCS 325].

 

"Total debt" equals notes payable plus the current portion of long-term debt, preferred stock and capitalized lease obligations plus long-term debt plus capitalized lease obligations plus total off balance sheet debt.

 

"Total debt to total capitalization" equals total debt divided by (total debt, plus minority interest, plus total preferred and preference stock, plus common equity).

 

"Unconditional guarantee" has the same meaning as "guarantee" with these additional provisions:

 

The guarantor has subjected itself to jurisdiction and service of process in accordance with the laws of the State of Illinois, and the guarantee will be construed in accordance with the laws of the State of Illinois without reference to conflict of laws principles; and

 

The guaranteed obligations are unconditional, irrespective of value, genuineness, validity, waiver, release, alteration, amendment, and enforceability of the guaranteed obligations.

 

b)         Incorporations by Reference. No incorporation by reference in this Part includes any later amendment or edition beyond the date stated.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.20  Requirements for Applicants under Section 19-110(e) of the Act

 

Each applicant for certification as an AGS shall include with its application the following items, as required by Section 19-110(e) of the Act [220 ILCS 5/19-110(e)]:

 

a)         The applicant shall certify that it will comply with all applicable Federal, State, regional and industry rules, policies, practices, procedures and tariffs for the use, operation, maintenance, safety, integrity, and reliability of the interstate natural gas system and shall agree to submit good faith schedules of natural gas deliveries in accordance with applicable tariffs.

 

b)         The applicant shall certify that it will provide service to residential or small commer­cial customers that are eligible to take service from an AGS.

 

c)         The applicant shall certify that it will comply with informational and reporting requirements that the Commission may by rule establish. [220 ILCS 5/19-110(e)]

 

d)         The applicant shall certify compliance with all other applicable laws and regulations and Commission rules and orders.

 

e)         The applicant shall demonstrate that it is licensed to do business in the State of Illinois.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.30  Required Filings and Procedures

 

a)         The applicant shall publish, as provided by the Notice by Publication Act [715 ILCS 5], notice of its application for certification in the Official State Newspaper within 10 days following the filing of the application for certification. The applicant shall file proof of publication with the Clerk of the Commission.

 

b)         All applications for certification under this Part shall be verified as required by Sec­tion 200.130 of the Commission's "Rules of Practice" (83 Ill. Adm. Code 200.130).

 

c)         The applicant shall identify the geographic area or geographic areas in which the applicant seeks to be authorized to offer service and the types of services it intends to offer. [220 ILCS 5/19-110(d)] The applicant shall provide the following:

 

1)         Description of the applicant's business.

 

2)         Description of the characteristics of residential or small commercial customer groups the applicant proposes to serve.

 

3)         Proof that notification of an intent to serve in any allowed gas utility's service area has been previously provided to the agent designated by the gas utility pursuant to 83 Ill. Adm. Code 215.10 of each gas utility in whose service area the applicant intends to serve.

 

d)         Itemized filing requirements

 

1)         At the time an AGS files an application for certification under this Part, the applicant shall also file its statement in support of application, supporting documents, and schedules containing information showing that the applicant meets the requirements of Section 19-110 of the Act.

 

2)         The applicant shall certify compliance with all terms and conditions required by Section 19-115 of the Act, to the extent that Section has application to the services being offered by the AGS.

 

e)         Contents of documents shall be consistent with Subpart B of the Commission's "Rules of Practice" (83 Ill. Adm. Code 200: Subpart B).

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.40  Residential and Small Commercial Customer Records and Information

 

a)         The applicant shall agree to adopt and follow rules and procedures ensuring that authorizations received from residential or small commercial customers, customer billing records, and requests for service transmitted to utilities are retained for a period of not less than two calendar years after the calendar year in which they were created. In addition to other lawful means of discovery, these records shall be made available by request to the Commission or its Staff on a confidential and proprietary basis, as necessary to carry out the Commission's obligations under the Act.

 

b)         The applicant shall preserve the confidentiality of its residential and small commercial customers' data and shall agree to adopt and follow rules and procedures to preserve the confidentiality of those customers' data.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.50  License or Permit Bond Requirements

 

a)         The applicant shall execute and maintain a license or permit bond issued by a qualifying surety or insurance company authorized to transact business in the State of Illinois in favor of the People of the State of Illinois. The amount of the bond shall equal $150,000. The bond shall be conditioned upon the full and faithful performance of all duties and obligations of the applicant as an AGS and shall be valid for a period of not less than one year. The cost of the bond shall be paid by the applicant. The applicant shall file this bond as part of its application for certification.

 

b)         In the event that a license or permit bond is cancelled, expires or is drawn upon, the AGS shall execute and maintain an additional or replacement bond such that the cumulative value of all outstanding bonds never falls below the amount required in subsection (a) of this Section. The AGS shall file a copy of the additional or replacement bond with the Chief Clerk of the Commission and provide a copy to the Commission's Director of the Financial Analysis Division or its successor at least 15 days in advance of the effective date of the bond. The filing shall include a cover letter that explains the purpose of the filing and shall be identified by the name of the AGS as it appears in the most recent Commission order granting the AGS certification.

 

c)         In the event that a license or permit bond is modified, the AGS shall file a copy of the modified bond with the Chief Clerk of the Commission and provide a copy of that bond to the Commission's Director of the Financial Analysis Division or its successor at least 15 days in advance of the effective date of the modification. The filing shall include a cover letter that explains the purpose of the filing and shall be identified by the name of the AGS as it appears in the most recent Commission order granting the AGS certification.

 

Section 551.60  Confidential Documentation

 

If an applicant or AGS believes any of the information to be disclosed by an applicant or AGS is privileged or confidential, the applicant or AGS should request that the Commission enter an order to protect the confidential, proprietary or trade secret nature of any data, information or studies pursuant to 83 Ill. Adm. Code 200.430. The applicant or AGS shall designate which information is privileged and confidential. Such information shall be marked as "confidential" and submitted separately under seal to the Chief Clerk of the Commission. The applicant or AGS is required to explain why that information is entitled to that protection in a supporting document pursuant to Section 551.30(d)(1).

 

Section 551.70  General Procedures for Applicants

 

a)         An applicant that seeks to serve residential or small commercial customers within a geographic area that is smaller than a gas utility's service area shall demonstrate that the designation of this smaller area does not violate any part of Section 19-115 of the Act [220 ILCS 5/19-115]. An applicant may  state in its application for certification any limitations that will be imposed on the number of residential or small commercial customers or maximum load to be served [220 ILCS 5/19-110(d)] and certify that it will not deny service to a residential or small commercial customer or group of customers nor establish any differences as to prices, terms, conditions, services, products, facilities, or in any other respect, whereby such denial or differences are based upon race, gender or income nor deny service to a residential or small commercial customer or group of customers based on locality nor establish any unreasonable difference as to prices, terms, conditions, services, products, or facilities as between localities. [220 ILCS 5/19-115(e)]

 

b)         The applicant shall certify that it will comply with the following requirements with respect to the marketing, offering and provision of products or services to residential and small commercial customers:

 

1)         Any marketing materials that make statements concerning prices, terms and conditions of service shall contain information that adequately discloses the prices, terms and conditions of the products or services that the alternative gas supplier is offering or selling to the residential or small commercial customer.

 

2)         Before any residential or small commercial customer is switched from another supplier, the alternative gas supplier shall give the customer written information that adequately discloses, in plain language, the prices, terms and conditions of the products and services being offered and sold to the customer.

 

3)         The alternative gas supplier shall provide to the residential customer accurate, timely, and itemized billing statements that describe the products and services provided to the customer and their prices and that specify the gas consumption amount and any service charges and taxes; and an additional statement, at least annually, that adequately discloses the average monthly prices, and the terms and conditions, of the products and services sold to the residential customer.

 

4)         The alternative gas supplier shall provide refunds of any deposits with interest within 30 days after the date that the residential or small commercial customer changes gas suppliers or discontinues service if the customer has satisfied all of its outstanding financial obligations to the alternative gas supplier at an interest rate set by the Commission which shall be the same as that required of gas utilities.

 

5)         The alternative gas supplier shall provide timely refunds of any undisputed overpayments upon oral or written request of the residential or small commercial customer. [220 ILCS 5/19-115(f)]

 

6)         The alternative gas supplier shall file with the Commission and maintain procedures addressing the manner in which any disputed amount for which a residential or small commercial customer is billed may be resolved, stating that while the dispute is pending, the customer shall pay the undisputed portion of the bill or an amount equal to last year's bill at the same location for the same period, normalized for weather, whichever is greater.  Any disputed amount in excess of last year's bill for the same address adjusted for weather shall not be included in the amount that must be paid by the due date.  The alternative gas supplier is required to inform its customers how to contact the Commission's Consumer Services Division to pursue an unresolved dispute.  The alternative gas supplier's billing statements shall include a toll-free number and other means by which a customer may contact it with inquiries or complaints.

 

7)         The alternative gas supplier shall inform its residential and small commercial customers how to contact the Commission to obtain consumer education materials provided pursuant to Section 19-125 of the Act. [220 ILCS 5/19-125(b)]

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.80  Financial Qualifications

 

An applicant shall be deemed to possess sufficient financial resources to be certified as an AGS able to serve available residential or small commercial customers if it meets any of the following criteria:

 

a)         The applicant provides a copy of a Dun & Bradstreet Business Information Report that demonstrates, at a minimum, that the applicant has a Composite Credit Appraisal of "3" or lower and a PAYDEX score of "70" or higher. If the applicant does not have a Dun & Bradstreet Composite Credit Appraisal, the applicant provides a copy of an Experian Small Business Intelliscore report that demonstrates, at a minimum, that the applicant has an Intelliscore of "63" or higher. At the time of application for certification, the report shall be no more than 30 days old.

 

b)         The applicant maintains at least one of the following short-term credit ratings: A-2 or higher from Standard & Poor's or its successor, P-2 or higher from Moody's Investors Service or its successor, or F-2 or higher from Fitch Ratings or its successor; or at least one of the following long-term credit ratings: BBB- or higher from Standard & Poor's or its successor, Baa3 or higher from Moody's Investors Service or its successor, or BBB- or higher from Fitch Ratings or its successor. The applicant shall provide with its application a copy of the ratings agency reports that present the ratings of the applicant.

 

c)         The applicant maintains a borrowing agreement with an affiliate.

 

1)         The affiliate must have at least one of the following short-term credit ratings: A-2 or higher from Standard & Poor's or its successor, P-2 or higher from Moody's Investors Service or its successor, or F-2 or higher from Fitch Ratings or its successor; or at least one of the following long-term credit ratings: BBB- or higher from Standard & Poor's or its successor, Baa3 or higher from Moody's Investors Service or its successor, or BBB- or higher from Fitch Ratings or its successor.

 

2)         The amount of credit available to the applicant under the borrowing agreement shall be no less than the greater of $500,000 or 5% of the amount of the applicant's revenue for its most recently completed fiscal year adjusted for any amount of revenue expected from customer accounts purchased or under contract to be purchased from another AGS.  The amount of revenue for the applicant's most recently completed fiscal year must appear in the applicant's certified financial statements, or those of the applicant's parent, that have received an accountant's report that certifies those financial statements to be free of material misstatement. If the applicant is using the certified financial statements of its parent, the amount of credit available under the borrowing agreement shall be determined using the applicable revenue amount from the segment information section of the certified financial statements of the applicant's parent.

 

A)        If the applicant is listed separately in the segment information section, the applicant's revenue shall be used.

 

B)        If the segment information section is broken down by operation, or other means, the revenue for the entire segment of which the applicant is part shall be used, unless a certified breakdown of the segment by company is provided.

 

3)         The borrowing agreement shall be valid for a period of not less than one year.

 

4)         The applicant shall provide a copy of the following:

 

A)        The ratings agency reports that present the ratings of the affiliate with which the applicant maintains the borrowing agreement;

 

B)        The borrowing agreement;

 

C)        The applicant's certified financial statements, or those of the applicant's parent, as applicable;

 

D)        The accountant's report for the applicant's certified financial statements or those of the applicant's parent, as applicable; and

 

E)        Documents supporting any estimate of revenue from customer accounts purchased or under contract to be purchased from another AGS.

 

d)        The obligations of the applicant to unaffiliated companies arising from the acquisition of natural gas that can be delivered to residential or small commercial customers in the State of Illinois, for sale or lease or in exchange for other value received are covered under a guarantee, payment bond, or letter of credit.

 

1)         This option is only available to an applicant that will engage in activi­ties that could result in the applicant holding an ownership interest in or taking title to natural gas for the purpose of sale or resale to Illinois residential or small commercial customers.

 

2)         The guarantee, payment bond, or letter of credit shall be in an amount that is no less than the greater of $500,000 or 5% of the amount of the applicant's revenue from the sale of natural gas for the most recently completed fiscal year adjusted for any amount of revenue expected from customer accounts purchased or under contract to be purchased from another AGS.  The amount of revenue for the applicant's most recently completed fiscal year must appear in the applicant's certified financial statements, or those of the applicant's parent, that have received an accountant's report that certifies those financial statements to be free of material misstatement. If the applicant is using the certified financial statements of its parent, the amount of credit available under the borrowing agreement shall be determined using the applicable revenue amount from the segment information section of the certified financial statements of the applicant's parent.

 

A)        If the applicant is listed separately in the segment information section, the applicant's revenue shall be used.

 

B)        If the segment information section is broken down by operation, or other means, the revenue for the entire segment of which the applicant is part shall be used, unless a certified breakdown of the segment by company is provided.

 

3)         The guarantee, payment bond, or letter of credit shall be valid for a period of not less than one year.

 

4)         Guarantee. The guarantor shall be an affiliate of the applicant that maintains at least one of the following short-term credit ratings: A-2 or higher from Standard & Poor's or its successor, P-2 or higher from Moody's Investors Service or its successor, or F-2 or higher from Fitch Ratings or its successor; or at least one of the following long-term credit ratings: BBB- or higher from Standard & Poor's or its successor, Baa3 or higher from Moody's Investors Service or its successor, or BBB- or higher from Fitch Ratings or its successor. The guarantee shall obligate the guarantor to make contractually required payment, net of set-offs for any amounts owed to the applicant, to the supplier for services rendered or gas supplied in the event the applicant defaults. The applicant shall provide a copy of the following:

 

A)      The ratings agency reports that present the ratings of the affiliate that is the guarantor;

 

B)        The guarantee;

 

C)        The applicant's certified financial statements, or those of the applicant's parent, as applicable, including the accountant's report. If the amount of the guarantee is without dollar limitation, neither the applicant's certified financial statements, nor those of the applicant's parent, are required; and

 

D)        Documents supporting any estimate of revenue from customer accounts purchased or under contract to be purchased from another AGS.

 

5)         Payment Bond. An applicant using a payment bond or payment bonds shall provide a copy of the following:

 

A)        The payment bonds;

 

B)        The certified financial statements of the applicant or those of the applicant's parent, as applicable;

 

C)        The accountant's report for the certified financial statements of the applicant or those of the applicant's parent, as applicable; and

 

D)        Documents supporting any estimate of revenue from customer accounts purchased or under contract to be purchased from another AGS.

 

6)         Letter of Credit. The letter of credit shall be irrevocable and issued by a financial institution with a long-term obligation rating of A- or higher from Standard & Poor's or its successor, A3 or higher from Moody's Investors Service or its successor, or A- or higher from Fitch Ratings or its successor. The applicant shall provide a copy of the following:

 

A)        The letter of credit;

 

B)        The ratings agency report that presents the long-term obligation rating of the financial institution extending the credit;

 

C)        The certified financial statements of the applicant or those of the applicant's parent, as applicable;

 

D)        The accountant's report for the certified financial statements of the applicant or those of the applicant's parent, as applicable; and

 

E)        Documents supporting any estimate of revenue from customer accounts purchased or under contact to be purchased from another AGS.

 

e)         The applicant certifies that it will offer to reimburse its Illinois residential and small commercial customers for the additional costs those customers incur to acquire natural gas as a result of the applicant's failure to comply with a contractual obligation to supply such energy. The applicant's prospective obligation to reimburse Illinois residential and small commercial customers shall be covered by an unconditional guarantee or payment bond. Any dollar limitation on the unconditional guarantee or payment bond shall equal not less than an estimate of the maximum monthly number of Mcf of natural gas the applicant expects to schedule over the next 12 months times the 12-month average of the "Average City Gate Price, by State" for Illinois, as disclosed for the most recent 12-month period in the Energy Information Administration's (EIA) "Natural Gas Monthly". The most recent 12 months of data is available on the EIA's internet website (www.eia.doe.gov). The Average City Gate Price used shall be from not more than 28 days prior to the date of the application. The unconditional guarantee or payment bond shall be valid for a period of not less than one year.

 

1)         Unconditional Guarantee. The guarantor shall be an affiliate of the applicant that maintains at least one of the following short-term credit ratings: A-2 or higher from Standard & Poor's or its successor, P-2 or higher from Moody's Investors Service or its successor, or F-2 or higher from Fitch Ratings or its successor; or at least one of the following long-term credit ratings: BBB- or higher from Standard & Poor's or its successor, Baa3 or higher from Moody's Investors Service or its successor, or BBB- or higher from Fitch Ratings or its successor. The applicant shall provide a copy of the following:

 

A)        The ratings agency reports that present the ratings of the affiliate that is the guarantor;

 

B)        The unconditional guarantee; and

 

C)        A good faith estimate of the maximum daily amount of natural gas in dekatherms the applicant will schedule during the remainder of the current calendar year.

 

2)         Payment Bond. The payment bond or payment bonds shall be issued by a qualifying surety authorized to transact business in the State of Illinois or by a surety whose Best's rating is A- or better and whose Best's financial size category is VII or larger, and whose contract of insurance is issued pursuant to Section 445 or 445a of the Illinois Insurance Code [215 ILCS 5/445 or 445a] and countersigned by the Surplus Line Association of Illinois or its successor. The applicant shall provide a copy of the following:

 

A)        The payment bonds or the contract of insurance with the countersignature of the Surplus Line Association of Illinois or its successor as applicable; and

 

B)        A good faith estimate of the maximum daily amount of natural gas in dekatherms the applicant will schedule during the remainder of the current calendar year for residential and small commercial customers.

 

f)         The applicant maintains a line of credit or revolving credit agreement.

 

1)         The line of credit or revolving credit agreement must be from a financial institution with a long-term obligation rating of A- or higher from Standard & Poor's or its successor, A3 or higher from Moody's Investors Service or its successor, or A- or higher from Fitch Ratings or its successor.

 

2)         The amount of the line of credit or revolving credit agreement shall be no less than the greater of $500,000 or 5% of the amount of the applicant's revenue for the most recently completed fiscal year adjusted for any amount of revenue expected from customer accounts purchased or under contract to be purchased from another AGS.  The amount of revenue for the applicant's most recently completed fiscal year must appear in the applicant's certified financial statements, or those of the applicant's parent, that have received an accountant's report that certifies those financial statements to be free of material misstatement. If the applicant is using the certified financial statements of its parent, the amount of credit available under the borrowing agreement shall be determined using the applicable revenue amount from the segment information section of the certified financial statements of the applicant's parent.

 

A)        If the applicant is listed separately in the segment information section, the applicant's revenue shall be used.

 

B)        If the segment information section is broken down by operation, or other means, the revenue for the entire segment of which the applicant is part shall be used, unless a certified breakdown of the segment by company is provided.

 

3)         The line of credit or revolving credit agreement shall be valid for a period of not less than one year.

 

4)         The applicant shall provide a copy of the following:

 

A)        The line of credit or revolving credit agreement;

 

B)        The ratings agency report that presents the long-term obligation rating of the financial institution extending the credit;

 

C)        The applicant's certified financial statements, or those of the applicant's parent, as applicable;

 

D)        The accountant's report for the applicant's certified financial statements, or those of the applicant's parent, as applicable; and

 

E)        Documents supporting any estimate of revenue from customer accounts purchased or under contract to be purchased from another AGS.

 

g)         The applicant earns 12 points on the financial ratios set forth in subsection (g)(1):

 

1)         Financial Ratios

 

A)        Pre-Tax Interest Coverage (rounded to the nearest 0.1)

 

4.4 or above: 5 points

3.9 to 4.3: 4 points

3.4 to 3.8: 3 points

2.9 to 3.3: 2 points

2.4 to 2.8: 1 point

2.3 or below: 0 points

 

B)        Funds from Operations Interest Coverage (rounded to the nearest 0.1)

 

4.9 or above: 5 points

4.4 to 4.8: 4 points

3.9 to 4.3: 3 points

3.4 to 3.8: 2 points

2.9 to 3.3: 1 point

2.8 or below: 0 points

 

C)        Funds from Operations to Average Total Debt (rounded to the nearest 1%)

 

38% or above: 5 points

33% to 37%: 4 points

28% to 32%: 3 points

23% to 27%: 2 points

18% to 22%: 1 point

17% or below: 0 points

 

D)        Total Debt to Total Capitalization (rounded to the nearest 1%)

 

50% or below: 5 points

51% to 53%: 4 points

54% to 56%: 3 points

57% to 59%: 2 points

60% to 62%: 1 point

63% or above: 0 points

 

2)         The applicant shall provide the following:

 

A)        The applicant's certified financial statements for its most recently completed fiscal year;

 

B)        The accountant's report for the applicant's certified financial statements; and

 

C)        A schedule showing the calculation of each financial ratio with a reference to the applicant's certified financial statements provided for each input of the calculation.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.90  Technical Qualifications

 

a)         An applicant that uses natural gas transmission or distribution facilities that it owns, controls, or operates in serving customers shall be deemed to possess sufficient technical capabilities to serve residential or small commercial customers if it maintains a technical staff on duty or on call 24 hours each day to operate and maintain applicant's facilities as needed, and meets the criteria in subsections (b) and (c) of this Section.

 

b)         An applicant shall be deemed to possess sufficient technical capabilities to serve residential or small commercial customers if it has individuals on its staff with demonstrated four years natural gas sales experience and two years experience working with rules and practices established by the North American Energy Standards Board or its successor.

 

c)         The applicant shall include in its application an exhibit containing occupational background information on the persons who are being used to meet the requirements of this Section.

 

d)         In the event the applicant does not meet the length of experience qualifications set forth in subsection (b), the applicant shall demonstrate the extent its technical resources and abilities match the services that it intends to provide to its residential or small commercial customers. The Commission may impose such terms and conditions as deemed necessary in order to insure the applicant is technically qualified, commensurate with the anticipated scope of the service to be provided and residential or small commercial customers to be served.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.100  Managerial Qualifications

 

An applicant shall be deemed to possess sufficient managerial capabilities to serve residential or small commercial customers if it has two or more individuals in management positions with four or more years demonstrated experience in a management position with enterprise financial and administration responsibilities including profit and loss responsibilities and four years natural gas sales experience, and provides the information required in subsections (a) and (b) of this Section.

 

a)         The applicant shall include in its application an exhibit containing occupational background information on the persons who are being used to meet the requirements of this Section.

 

b)         The applicant shall include in its application an exhibit containing a corporate organizational chart and indicating the position of persons indicated in subsection (a) of this Section.

 

c)         In the event the applicant does not meet the managerial qualifications set forth in this Section, the applicant shall demonstrate the extent its managerial resources and abilities match the services that it intends to provide to its residential or small commercial customers. The Commission may impose such terms and conditions as deemed necessary in order to insure the applicant is managerially qualified, commensurate with the anticipated scope of the service to be provided and residential or small commercial customers to be served.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.110  Commission Order in Proceedings

 

The Commission shall issue an order granting or denying an application within 45 days after the date on which a complete application has been filed with the Commission and notice of the application's filing is published in the Official State Newspaper as provided by the Notice of Publication Act [715 ILCS 5], provided that the Commission can extend the time for considering an application filed under this Part by up to 90 days, and can schedule a hearing on such an application. The Commission shall extend the time for considering an application and schedule a hearing if:

 

a)         The applicant has proposed limitations on the number of residential or small commercial customers or the amount of load to be served;

 

b)         A party to the application proceeding has formally requested that the Commission hold hearings in a pleading that contains a verified prima facie showing that one or more of the allegations or certifications in the application is false or misleading;

 

c)         Other facts or circumstances exist that will necessitate additional time or evidence in order to determine whether a certificate should be issued; or

 

d)         The applicant has proposed to serve an area smaller than the service area of a gas utility.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.120  General Procedures for Reporting Continuing Compliance with Certification Requirements

 

a)         An AGS shall continue to remain in compliance with the provisions of the Act and this Part, as now or hereafter amended. If an AGS received a certificate before the effective date of any provision of this Part, that provision applies to applicants seeking certification to serve residential or small commercial customers with the same natural gas demand or usage characteristics as the AGS serves, the AGS shall demonstrate that it has come into compliance with such provision no later than January 31 of the year following the year during which such amendment took effect.

 

b)         All reports required under this Part shall be under oath and shall be filed with the Chief Clerk of the Commission with copies provided to the Commission's Director of the Energy Division or its successor and the Commission's Director of the Financial Analysis Division or its successor. The reports shall be identified with the name of the AGS as it appears in the most recent Commission order granting the AGS certification.

 

c)         All reports made to the Commission by an AGS and the contents thereof shall be open to public inspection, unless otherwise ordered by the Commission. Such reports shall be preserved in the office of the Commission.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.130  Erroneous or Defective Reports

 

a)         When any report is erroneous or defective or appears to the Commission to be erroneous or defective, the Commission may notify the AGS to amend that report within 30 days, and before or after the termination of the period the Commission may examine the officers, agents, or employees, and books, records, accounts, vouchers, plant, equipment and property of the AGS, and correct items in the report the Commission finds defective or erroneous.

 

b)         Any AGS that fails to make and file any report required by the Commission within the time specified or to specifically answer to any question propounded by the Commission within 30 days after the time it is lawfully required to do so, or within such further time, not to exceed 90 days, as may in its discretion be allowed by the Commission, shall, after notice and hearing, forfeit its certificate.

 

Section 551.140  Financial Reporting Requirements

 

The AGS shall provide a copy of only those documents that the AGS requires to demonstrate that it continues to possess sufficient financial resources to serve the residential or small commercial customers for which it has received a certificate of service authority. The applicable documents shall be submitted at the times specified below:

 

a)         An AGS that seeks to demonstrate that it maintains sufficient financial resources to provide the services for which it has received a certificate of service authority using the criteria set forth in Section 551.80(a) shall submit an updated copy of a Dun & Bradstreet Business Information Report that demonstrates, at a minimum, that the AGS has a Composite Credit Appraisal of “3” or lower and a PAYDEX score of “70” or higher. If the AGS does not have a Dun & Bradstreet Composite Credit Appraisal, the AGS shall file an updated copy of an Experian Small Business Intelliscore report that demonstrates, at a minimum, that the AGS has an Intelliscore of “63” or higher. The applicable updated report shall be filed between January 1 and January 31 of each year. The report shall be no more than 30 days old at the date of the annual filing.

 

b)         An AGS that seeks to demonstrate that it maintains sufficient financial resources to provide the services for which it has received a certificate of service authority using the criteria set forth in Section 551.80(b), (c), (d)(4), (d)(6), (e)(1), (e)(3), or (f) shall submit a copy of the latest ratings report presenting the short-term or long-term credit or obligation ratings of the AGS, creditors, affiliates, or guarantors, as applicable, from the ratings agencies between January 1 and January 31 of each year and within 15 days following any downgrade of such ratings previously filed with the Commission to a rating below A-1 or A-, if issued from Standard & Poor's or its successor, P-1 or A3, if issued from Moody's Investors Service or its successor, or F-1 or A-, if issued from Fitch Ratings or its successor. Within 30 days after a downgrade of the short-term or long-term credit or obligation ratings of the AGS or its creditors, affiliates, or guarantors, as applicable, to a level below the minimum required under this Part, the AGS shall submit a report that identifies the subsection under which the AGS is seeking to demonstrate that its financial resources remain sufficient for providing the services for which it has received a certificate of service authority and includes the information and documents that subsection requires.

 

c)         An AGS that seeks to demonstrate that it maintains sufficient financial resources to provide the services for which it has received a certificate of service authority using the criteria set forth in Section 551.80(c), (d), (e), or (f) shall submit a copy of any modified, replacement or additional borrowing agreements, unconditional guarantees, lines of credit, revolving credit agreements, payment bonds, and letters of credit, as applicable, at least 15 days in advance of any modification, cancellation or expiration of the financial agreements.

 

d)         Between January 1 and January 31 of each year, an AGS that seeks to use the criteria specified in Section 551.80(d) to demonstrate that it maintains sufficient financial resources to provide the services for which it has received a certificate of service authority shall provide the maximum daily amount of natural gas scheduled in dekatherms during the previous calendar year and the date on which that amount was scheduled. If the AGS has been serving Illinois residential or small commercial customers for less than 12 months, the AGS shall also provide an estimate of the maximum daily amount of natural gas in dekatherms it will schedule during the current calendar year.

 

e)         An AGS that seeks to demonstrate that it maintains sufficient financial resources to provide the services for which it has received a certificate of service authority using the criteria set forth in Section 551.80(c), (d), (f), or (g) shall submit a copy of its certified financial statements, or those of its parent, and accountant's report, as applicable, within 120 days after the close of its fiscal year.

 

f)         An AGS that has contracted to acquire customer accounts from another AGS shall, at least 15 days in advance of any acquistion, demonstrate that it maintains suffient financial resources to provide the service for which it has received a certificate of service authority using the criteria set forth in Section 551.80(c), (d) or (f) and providing an estimate of the amount of revenue expected from the customer accounts under contract to be acquired, including supporting documents.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)

 

Section 551.150  Managerial Reporting Requirements

 

An AGS shall certify during January of each year that it continues to maintain the required managerial qualifications for the service authority granted in its certificate. An AGS that meets the managerial qualifications requirements by entering into one or more contracts with others to provide the required services must identify each agent or contractor on whom the AGS relies to meet the requirements of this Part and must certify that the agent or contractor will comply with all Sections of this Part applicable to the function or functions to be performed by the respective agent or contractor.

 

Section 551.160  Technical Reporting Requirements

 

An AGS shall certify during January of each year that it continues to maintain the required technical qualifications for the service authority granted in its certificate. An AGS that meets the technical qualifications requirements by entering into one or more contracts with others to provide the required services must identify each agent or contractor on whom the AGS relies to meet the requirements of this Part and must certify that the agent or contractor will comply with all Sections of this Part applicable to the function or functions to be performed by the respective agent or contractor.

 

Section 551.170  Information Reporting Requirements

 

No later than March 1 of every year, each AGS shall file with the Chief Clerk of the Commission, and provide to the Commission's Director of the Energy Division or its successor, a report stating the total annual dekatherms delivered and sold to residential and small commercial customers within each utility service territory in the preceding calendar year and the total revenues associated with the sale of natural gas to residential and small commercial customers within each utility service territory in the preceding calendar year. An AGS shall also provide any information and answer any questions upon request of the Commission.

 

(Source:  Amended at 28 Ill. Reg. 833, effective January 1, 2004)