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91_HB3024
LRB9109971JSpc
1 AN ACT to amend the Public Utilities Act by changing
2 Section 16-111.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Public Utilities Act is amended by
6 changing Section 16-111 as follows:
7 (220 ILCS 5/16-111)
8 Sec. 16-111. Rates and restructuring transactions during
9 mandatory transition period.
10 (a) During the mandatory transition period,
11 notwithstanding any provision of Article IX of this Act, and
12 except as provided in subsections (b), (d), (e), and (f) of
13 this Section, the Commission shall not (i) initiate,
14 authorize or order any change by way of increase (other than
15 in connection with a request for rate increase which was
16 filed after September 1, 1997 but prior to October 15, 1997,
17 by an electric utility serving less than 12,500 customers in
18 this State), (ii) initiate or, unless requested by the
19 electric utility, authorize or order any change by way of
20 decrease, restructuring or unbundling (except as provided in
21 Section 16-109A), in the rates of any electric utility that
22 were in effect on October 1, 1996, or (iii) in any order
23 approving any application for a merger pursuant to Section
24 7-204 that was pending as of May 16, 1997, impose any
25 condition requiring any filing for an increase, decrease, or
26 change in, or other review of, an electric utility's rates or
27 enforce any such condition of any such order; provided,
28 however, that this subsection shall not prohibit the
29 Commission from:
30 (1) approving the application of an electric
31 utility to implement an alternative to rate of return
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1 regulation or a regulatory mechanism that rewards or
2 penalizes the electric utility through adjustment of
3 rates based on utility performance, pursuant to Section
4 9-244;
5 (2) authorizing an electric utility to eliminate
6 its fuel adjustment clause and adjust its base rate
7 tariffs in accordance with subsection (b), (d), or (f) of
8 Section 9-220 of this Act, to fix its fuel adjustment
9 factor in accordance with subsection (c) of Section 9-220
10 of this Act, or to eliminate its fuel adjustment clause
11 in accordance with subsection (e) of Section 9-220 of
12 this Act;
13 (3) ordering into effect tariffs for delivery
14 services and transition charges in accordance with
15 Sections 16-104 and 16-108, for real-time pricing in
16 accordance with Section 16-107, or the options required
17 by Section 16-110 and subsection (n) of 16-112, allowing
18 a billing experiment in accordance with Section 16-106,
19 or modifying delivery services tariffs in accordance with
20 Section 16-109; or
21 (4) ordering or allowing into effect any tariff to
22 recover charges pursuant to Sections 9-201.5, 9-220.1,
23 9-221, 9-222 (except as provided in Section 9-222.1),
24 16-108, and 16-114 of this Act, Section 5-5 of the
25 Electricity Infrastructure Maintenance Fee Law, Section
26 6-5 of the Renewable Energy, Energy Efficiency, and Coal
27 Resources Development Law of 1997, and Section 13 of the
28 Energy Assistance Act of 1989.
29 (b) Notwithstanding the provisions of subsection (a) of
30 this Section, each Illinois electric utility serving more
31 than 12,500 customers in Illinois shall file tariffs (i)
32 reducing, effective August 1, 1998, each component of its
33 base rates to residential retail customers by 15% from the
34 base rates in effect immediately prior to January 1, 1998 and
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1 (ii) if the public utility provides electric service to (A)
2 more than 500,000 customers but less than 1,000,000 customers
3 in this State on January 1, 1999, reducing, effective May 1,
4 2002, each component of its base rates to residential retail
5 customers by an additional 5% from the base rates in effect
6 immediately prior to January 1, 1998, or (B) at least
7 1,000,000 customers in this State on January 1, 1999,
8 reducing, effective October 1, 2001, each component of its
9 base rates to residential retail customers by an additional
10 5% from the base rates in effect immediately prior to January
11 1, 1998. Provided, however, that (A) if an electric utility's
12 average residential retail rate is less than or equal to the
13 average residential retail rate for a group of Midwest
14 Utilities (consisting of all investor-owned electric
15 utilities with annual system peaks in excess of 1000
16 megawatts in the States of Illinois, Indiana, Iowa, Kentucky,
17 Michigan, Missouri, Ohio, and Wisconsin), based on data
18 reported on Form 1 to the Federal Energy Regulatory
19 Commission for calendar year 1995, then it shall only be
20 required to file tariffs (i) reducing, effective August 1,
21 1998, each component of its base rates to residential retail
22 customers by 5% from the base rates in effect immediately
23 prior to January 1, 1998, (ii) reducing, effective October 1,
24 2000, each component of its base rates to residential retail
25 customers by the lesser of 5% of the base rates in effect
26 immediately prior to January 1, 1998 or the percentage by
27 which the electric utility's average residential retail rate
28 exceeds the average residential retail rate of the Midwest
29 Utilities, based on data reported on Form 1 to the Federal
30 Energy Regulatory Commission for calendar year 1999, and
31 (iii) reducing, effective October 1, 2002, each component of
32 its base rates to residential retail customers by an
33 additional amount equal to the lesser of 5% of the base rates
34 in effect immediately prior to January 1, 1998 or the
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1 percentage by which the electric utility's average
2 residential retail rate exceeds the average residential
3 retail rate of the Midwest Utilities, based on data reported
4 on Form 1 to the Federal Energy Regulatory Commission for
5 calendar year 2001; and (B) if the average residential retail
6 rate of an electric utility serving between 150,000 and
7 250,000 retail customers in this State on January 1, 1995 is
8 less than or equal to 90% of the average residential retail
9 rate for the Midwest Utilities, based on data reported on
10 Form 1 to the Federal Energy Regulatory Commission for
11 calendar year 1995, then it shall only be required to file
12 tariffs (i) reducing, effective August 1, 1998, each
13 component of its base rates to residential retail customers
14 by 2% from the base rates in effect immediately prior to
15 January 1, 1998; (ii) reducing, effective October 1, 2000,
16 each component of its base rates to residential retail
17 customers by 2% from the base rate in effect immediately
18 prior to January 1, 1998; and (iii) reducing, effective
19 October 1, 2002, each component of its base rates to
20 residential retail customers by 1% from the base rates in
21 effect immediately prior to January 1, 1998. Provided,
22 further, that any electric utility for which a decrease in
23 base rates has been or is placed into effect between October
24 1, 1996 and the dates specified in the preceding sentences of
25 this subsection, other than pursuant to the requirements of
26 this subsection, shall be entitled to reduce the amount of
27 any reduction or reductions in its base rates required by
28 this subsection by the amount of such other decrease. The
29 tariffs required under this subsection shall be filed 45 days
30 in advance of the effective date. Notwithstanding anything to
31 the contrary in Section 9-220 of this Act, no restatement of
32 base rates in conjunction with the elimination of a fuel
33 adjustment clause under that Section shall result in a lesser
34 decrease in base rates than customers would otherwise receive
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1 under this subsection had the electric utility's fuel
2 adjustment clause not been eliminated.
3 (c) Any utility reducing its base rates by 15% on August
4 1, 1998 pursuant to subsection (b) shall include the
5 following statement on its bills for residential customers
6 from August 1 through December 31, 1998: "Effective August 1,
7 1998, your rates have been reduced by 15% by the Electric
8 Service Customer Choice and Rate Relief Law of 1997 passed by
9 the Illinois General Assembly.". Any utility reducing its
10 base rates by 5% on August 1, 1998, pursuant to subsection
11 (b) shall include the following statement on its bills for
12 residential customers from August 1 through December 31,
13 1998: "Effective August 1, 1998, your rates have been
14 reduced by 5% by the Electric Service Customer Choice and
15 Rate Relief Law of 1997 passed by the Illinois General
16 Assembly.".
17 Any utility reducing its base rates by 2% on August 1,
18 1998 pursuant to subsection (b) shall include the following
19 statement on its bills for residential customers from August
20 1 through December 31, 1998: "Effective August 1, 1998, your
21 rates have been reduced by 2% by the Electric Service
22 Customer Choice and Rate Relief Law of 1997 passed by the
23 Illinois General Assembly.".
24 (d) During the mandatory transition period, but not
25 before January 1, 2000, and notwithstanding the provisions
26 of subsection (a), an electric utility may request an
27 increase in its base rates if the electric utility
28 demonstrates that the 2-year average of its earned rate of
29 return on common equity, calculated as its net income
30 applicable to common stock divided by the average of its
31 beginning and ending balances of common equity using data
32 reported in the electric utility's Form 1 report to the
33 Federal Energy Regulatory Commission but adjusted to remove
34 the effects of accelerated depreciation or amortization or
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1 other transition or mitigation measures implemented by the
2 electric utility pursuant to subsection (g) of this Section
3 and the effect of any refund paid pursuant to subsection (e)
4 of this Section, is below the 2-year average for the same 2
5 years of the monthly average yields of 30-year U.S. Treasury
6 bonds published by the Board of Governors of the Federal
7 Reserve System in its weekly H.15 Statistical Release or
8 successor publication. The Commission shall review the
9 electric utility's request, and may review the justness and
10 reasonableness of all rates for tariffed services, in
11 accordance with the provisions of Article IX of this Act,
12 provided that the Commission shall consider any special or
13 negotiated adjustments to the revenue requirement agreed to
14 between the electric utility and the other parties to the
15 proceeding. In setting rates under this Section, the
16 Commission shall exclude the costs and revenues that are
17 associated with competitive services and any billing or
18 pricing experiments conducted under Section 16-106.
19 (e) For the purposes of this subsection (e) all
20 calculations and comparisons shall be performed for the
21 Illinois operations of multijurisdictional utilities. During
22 the mandatory transition period, notwithstanding the
23 provisions of subsection (a), if the 2-year average of an
24 electric utility's earned rate of return on common equity,
25 calculated as its net income applicable to common stock
26 divided by the average of its beginning and ending balances
27 of common equity using data reported in the electric
28 utility's Form 1 report to the Federal Energy Regulatory
29 Commission but adjusted to remove the effect of any refund
30 paid under this subsection (e), and further adjusted to
31 include the annual amortization of any difference between the
32 consideration received by an affiliated interest of the
33 electric utility in the sale of an asset which had been sold
34 or transferred by the electric utility to the affiliated
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1 interest subsequent to the effective date of this amendatory
2 Act of 1997 and the consideration for which such asset had
3 been sold or transferred to the affiliated interest, with
4 such difference to be amortized ratably from the date of the
5 sale by the affiliated interest to December 31, 2006, exceeds
6 the 2-year average of the Index for the same 2 years by 1.5
7 or more percentage points, the electric utility shall make
8 refunds to customers beginning the first billing day of April
9 in the following year in the manner described in paragraph
10 (3) of this subsection. For purposes of this subsection (e),
11 the "Index" shall be the sum of (A) the average for the 12
12 months ended September 30 of the monthly average yields of
13 30-year U.S. Treasury bonds published by the Board of
14 Governors of the Federal Reserve System in its weekly H.15
15 Statistical Release or successor publication for each year
16 1998 through 2004, and (B) (i) 4.00 percentage points for
17 each of the 12-month periods ending September 30, 1998
18 through September 30, 1999 or 8.00 percentage points if the
19 electric utility's average residential retail rate is less
20 than or equal to 90% of the average residential retail rate
21 for the "Midwest Utilities", as that term is defined in
22 subsection (b) of this Section, based on data reported on
23 Form 1 to the Federal Energy Regulatory Commission for
24 calendar year 1995, and the electric utility served between
25 150,000 and 250,000 retail customers on January 1, 1995, (ii)
26 7.00 percentage points for each of the 12-month periods
27 ending September 30, 2000 through September 30, 2004 if the
28 electric utility was providing service to at least 1,000,000
29 customers in this State on January 1, 1999, or 9.00
30 percentage points if the electric utility's average
31 residential retail rate is less than or equal to 90% of the
32 average residential retail rate for the "Midwest Utilities",
33 as that term is defined in subsection (b) of this Section,
34 based on data reported on Form 1 to the Federal Energy
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1 Regulatory Commission for calendar year 1995 and the electric
2 utility served between 150,000 and 250,000 retail customers
3 in this State on January 1, 1995, (iii) 11.00 percentage
4 points for each of the 12-month periods ending September 30,
5 2000 through September 30, 2004, but only if the electric
6 utility's average residential retail rate is less than or
7 equal to 90% of the average residential retail rate for the
8 "Midwest Utilities", as that term is defined in subsection
9 (b) of this Section, based on data reported on Form 1 to the
10 Federal Energy Regulatory Commission for calendar year 1995,
11 the electric utility served between 150,000 and 250,000
12 retail customers in this State on January 1, 1995, and the
13 electric utility offers delivery services on or before June
14 1, 2000 to retail customers whose annual electric energy use
15 comprises 33% of the kilowatt hour sales to that group of
16 retail customers that are classified under Division D, Groups
17 20 through 39 of the Standard Industrial Classifications set
18 forth in the Standard Industrial Classification Manual
19 published by the United States Office of Management and
20 Budget, excluding the kilowatt hour sales to those customers
21 that are eligible for delivery services pursuant to Section
22 16-104(a)(1)(i), and offers delivery services to its
23 remaining retail customers classified under Division D,
24 Groups 20 through 39 on or before October 1, 2000, and,
25 provided further, that the electric utility commits not to
26 petition pursuant to Section 16-108(f) for entry of an order
27 by the Commission authorizing the electric utility to
28 implement transition charges for an additional period after
29 December 31, 2006, or (iv) 5.00 percentage points for each of
30 the 12-month periods ending September 30, 2000 through
31 September 30, 2004 for all other electric utilities or 7.00
32 percentage points for such utilities for each of the 12-month
33 periods ending September 30, 2000 through September 30, 2004
34 for any such utility that commits not to petition pursuant to
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1 Section 16-108(f) for entry of an order by the Commission
2 authorizing the electric utility to implement transition
3 charges for an additional period after December 31, 2006.
4 (1) For purposes of this subsection (e), "excess
5 earnings" means the difference between (A) the 2-year
6 average of the electric utility's earned rate of return
7 on common equity, less (B) the 2-year average of the sum
8 of (i) the Index applicable to each of the 2 years and
9 (ii) 1.5 percentage points; provided, that "excess
10 earnings" shall never be less than zero.
11 (2) On or before March 31 of each year 2000 through
12 2005 each electric utility shall file a report with the
13 Commission showing its earned rate of return on common
14 equity, calculated in accordance with this subsection,
15 for the preceding calendar year and the average for the
16 preceding 2 calendar years.
17 (3) If an electric utility has excess earnings,
18 determined in accordance with paragraphs (1) and (2) of
19 this subsection, the refunds which the electric utility
20 shall pay to its customers beginning the first billing
21 day of April in the following year shall be calculated
22 and applied as follows:
23 (i) The electric utility's excess earnings
24 shall be multiplied by the average of the beginning
25 and ending balances of the electric utility's common
26 equity for the 2-year period in which excess
27 earnings occurred.
28 (ii) The result of the calculation in (i)
29 shall be multiplied by 0.50 and then divided by a
30 number equal to 1 minus the electric utility's
31 composite federal and State income tax rate.
32 (iii) The result of the calculation in (ii)
33 shall be divided by the sum of the electric
34 utility's projected total kilowatt-hour sales to
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1 retail customers plus projected kilowatt-hours to be
2 delivered to delivery services customers over a one
3 year period beginning with the first billing date in
4 April in the succeeding year to determine a cents
5 per kilowatt-hour refund factor.
6 (iv) The cents per kilowatt-hour refund factor
7 calculated in (iii) shall be credited to the
8 electric utility's customers by applying the factor
9 on the customer's monthly bills to each
10 kilowatt-hour sold or delivered until the total
11 amount calculated in (ii) has been paid to
12 customers.
13 (f) During the mandatory transition period, an electric
14 utility may file revised tariffs reducing the price of any
15 tariffed service offered by the electric utility for all
16 customers taking that tariffed service, which shall be
17 effective 7 days after filing.
18 (g) During the mandatory transition period, an electric
19 utility may, without obtaining any approval of the Commission
20 other than that provided for in this subsection and
21 notwithstanding any other provision of this Act or any rule
22 or regulation of the Commission that would require such
23 approval:
24 (1) implement a reorganization, other than a merger
25 of 2 or more public utilities as defined in Section 3-105
26 or their holding companies;
27 (2) retire generating plants from service;
28 (3) sell, assign, lease or otherwise transfer
29 assets to an affiliated or unaffiliated entity and as
30 part of such transaction enter into service agreements,
31 power purchase agreements, or other agreements with the
32 transferee; provided, however, that the prices, terms and
33 conditions of any power purchase agreement must be
34 approved or allowed into effect by the Federal Energy
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1 Regulatory Commission; or
2 (4) use any accelerated cost recovery method
3 including accelerated depreciation, accelerated
4 amortization or other capital recovery methods, or record
5 reductions to the original cost of its assets.
6 In order to implement a reorganization, retire generating
7 plants from service, or sell, assign, lease or otherwise
8 transfer assets pursuant to this Section, the electric
9 utility shall comply with subsections (c) and (d) of Section
10 16-128, if applicable, and subsection (k) of this Section, if
11 applicable, and provide the Commission with at least 30 days
12 notice of the proposed reorganization or transaction, which
13 notice shall include the following information:
14 (i) a complete statement of the entries that
15 the electric utility will make on its books and
16 records of account to implement the proposed
17 reorganization or transaction together with a
18 certification from an independent certified public
19 accountant that such entries are in accord with
20 generally accepted accounting principles and, if the
21 Commission has previously approved guidelines for
22 cost allocations between the utility and its
23 affiliates, a certification from the chief
24 accounting officer of the utility that such entries
25 are in accord with those cost allocation guidelines;
26 (ii) a description of how the electric utility
27 will use proceeds of any sale, assignment, lease or
28 transfer to retire debt or otherwise reduce or
29 recover the costs of services provided by such
30 electric utility;
31 (iii) a list of all federal approvals or
32 approvals required from departments and agencies of
33 this State, other than the Commission, that the
34 electric utility has or will obtain before
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1 implementing the reorganization or transaction;
2 (iv) an irrevocable commitment by the electric
3 utility that it will not, as a result of the
4 transaction, impose any stranded cost charges that
5 it might otherwise be allowed to charge retail
6 customers under federal law or increase the
7 transition charges that it is otherwise entitled to
8 collect under this Article XVI; and
9 (v) if the electric utility proposes to sell,
10 assign, lease or otherwise transfer a generating
11 plant that brings the amount of net dependable
12 generating capacity transferred pursuant to this
13 subsection to an amount equal to or greater than 15%
14 of the electric utility's net dependable capacity as
15 of the effective date of this amendatory Act of
16 1997, and enters into a power purchase agreement
17 with the entity to which such generating plant is
18 sold, assigned, leased, or otherwise transferred,
19 the electric utility also agrees, if its fuel
20 adjustment clause has not already been eliminated,
21 to eliminate its fuel adjustment clause in
22 accordance with subsection (b) of Section 9-220 for
23 a period of time equal to the length of any such
24 power purchase agreement or successor agreement, or
25 until January 1, 2005, whichever is longer; if the
26 capacity of the generating plant so transferred and
27 related power purchase agreement does not result in
28 the elimination of the fuel adjustment clause under
29 this subsection, and the fuel adjustment clause has
30 not already been eliminated, the electric utility
31 shall agree that the costs associated with the
32 transferred plant that are included in the
33 calculation of the rate per kilowatt-hour to be
34 applied pursuant to the electric utility's fuel
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1 adjustment clause during such period shall not
2 exceed the per kilowatt-hour cost associated with
3 such generating plant included in the electric
4 utility's fuel adjustment clause during the full
5 calendar year preceding the transfer, with such
6 limit to be adjusted each year thereafter by the
7 Gross Domestic Product Implicit Price Deflator.
8 (vi) In addition, if the electric utility
9 proposes to sell, assign, or lease, (A) either (1)
10 an amount of generating plant that brings the amount
11 of net dependable generating capacity transferred
12 pursuant to this subsection to an amount equal to or
13 greater than 15% of its net dependable capacity on
14 the effective date of this amendatory Act of 1997,
15 or (2) one or more generating plants with a total
16 net dependable capacity of 1100 megawatts, or (B)
17 transmission and distribution facilities that either
18 (1) bring the amount of transmission and
19 distribution facilities transferred pursuant to this
20 subsection to an amount equal to or greater than 15%
21 of the electric utility's total depreciated original
22 cost investment in such facilities, or (2) represent
23 an investment of $25,000,000 in terms of total
24 depreciated original cost, the electric utility
25 shall provide, in addition to the information listed
26 in subparagraphs (i) through (v), the following
27 information: (A) a description of how the electric
28 utility will meet its service obligations under this
29 Act in a safe and reliable manner and (B) the
30 electric utility's projected earned rate of return
31 on common equity, calculated in accordance with
32 subsection (d) of this Section, for each year from
33 the date of the notice through December 31, 2004
34 both with and without the proposed transaction. If
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1 the Commission has not issued an order initiating a
2 hearing on the proposed transaction within 30 days
3 after the date the electric utility's notice is
4 filed, the transaction shall be deemed approved.
5 The Commission may, after notice and hearing,
6 prohibit the proposed transaction if it makes either
7 or both of the following findings: (1) that the
8 proposed transaction will render the electric
9 utility unable to provide its tariffed services in a
10 safe and reliable manner, or (2) that there is a
11 strong likelihood that consummation of the proposed
12 transaction will result in the electric utility
13 being entitled to request an increase in its base
14 rates during the mandatory transition period
15 pursuant to subsection (d) of this Section. Any
16 hearing initiated by the Commission into the
17 proposed transaction shall be completed, and the
18 Commission's final order approving or prohibiting
19 the proposed transaction shall be entered, within 90
20 days after the date the electric utility's notice
21 was filed. Provided, however, that a sale,
22 assignment, or lease of transmission facilities to
23 an independent system operator that meets the
24 requirements of Section 16-126 shall not be subject
25 to Commission approval under this Section.
26 In any proceeding conducted by the Commission
27 pursuant to this subparagraph (vi), intervention
28 shall be limited to parties with a direct interest
29 in the transaction which is the subject of the
30 hearing and any statutory consumer protection agency
31 as defined in subsection (d) of Section 9-102.1.
32 Notwithstanding the provisions of Section 10-113 of
33 this Act, any application seeking rehearing of an
34 order issued under this subparagraph (vi), whether
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1 filed by the electric utility or by an intervening
2 party, shall be filed within 10 days after service
3 of the order.
4 The Commission shall not in any subsequent proceeding or
5 otherwise, review such a reorganization or other transaction
6 authorized by this Section, but shall retain the authority to
7 allocate costs as stated in Section 16-111(i). An entity to
8 which an electric utility sells, assigns, leases or transfers
9 assets pursuant to this subsection (g) shall not, as a result
10 of the transactions specified in this subsection (g), be
11 deemed a public utility as defined in Section 3-105. Nothing
12 in this subsection (g) shall change any requirement under the
13 jurisdiction of the Illinois Department of Nuclear Safety
14 including, but not limited to, the payment of fees. Nothing
15 in this subsection (g) shall exempt a utility from obtaining
16 a certificate pursuant to Section 8-406 of this Act for the
17 construction of a new electric generating facility. Nothing
18 in this subsection (g) is intended to exempt the transactions
19 hereunder from the operation of the federal or State
20 antitrust laws. Nothing in this subsection (g) shall require
21 an electric utility to use the procedures specified in this
22 subsection for any of the transactions specified herein. Any
23 other procedure available under this Act may, at the electric
24 utility's election, be used for any such transaction.
25 (h) During the mandatory transition period, the
26 Commission shall not establish or use any rates of
27 depreciation, which for purposes of this subsection shall
28 include amortization, for any electric utility other than
29 those established pursuant to subsection (c) of Section 5-104
30 of this Act or utilized pursuant to subsection (g) of this
31 Section. Provided, however, that in any proceeding to review
32 an electric utility's rates for tariffed services pursuant to
33 Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the
34 Commission may establish new rates of depreciation for the
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1 electric utility in the same manner provided in subsection
2 (d) of Section 5-104 of this Act. An electric utility
3 implementing an accelerated cost recovery method including
4 accelerated depreciation, accelerated amortization or other
5 capital recovery methods, or recording reductions to the
6 original cost of its assets, pursuant to subsection (g) of
7 this Section, shall file a statement with the Commission
8 describing the accelerated cost recovery method to be
9 implemented or the reduction in the original cost of its
10 assets to be recorded. Upon the filing of such statement,
11 the accelerated cost recovery method or the reduction in the
12 original cost of assets shall be deemed to be approved by the
13 Commission as though an order had been entered by the
14 Commission.
15 (i) Subsequent to the mandatory transition period, the
16 Commission, in any proceeding to establish rates and charges
17 for tariffed services offered by an electric utility, shall
18 consider only (1) the then current or projected revenues,
19 costs, investments and cost of capital directly or indirectly
20 associated with the provision of such tariffed services; (2)
21 collection of transition charges in accordance with Sections
22 16-102 and 16-108 of this Act; (3) recovery of any employee
23 transition costs as described in Section 16-128 which the
24 electric utility is continuing to incur, including recovery
25 of any unamortized portion of such costs previously incurred
26 or committed, with such costs to be equitably allocated among
27 bundled services, delivery services, and contracts with
28 alternative retail electric suppliers; and (4) recovery of
29 the costs associated with the electric utility's compliance
30 with decommissioning funding requirements; and shall not
31 consider any other revenues, costs, investments or cost of
32 capital of either the electric utility or of any affiliate of
33 the electric utility that are not associated with the
34 provision of tariffed services. In setting rates for
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1 tariffed services, the Commission shall equitably allocate
2 joint and common costs and investments between the electric
3 utility's competitive and tariffed services. In determining
4 the justness and reasonableness of the electric power and
5 energy component of an electric utility's rates for tariffed
6 services subsequent to the mandatory transition period and
7 prior to the time that the provision of such electric power
8 and energy is declared competitive, the Commission shall
9 consider the extent to which the electric utility's tariffed
10 rates for such component for each customer class exceed the
11 market value determined pursuant to Section 16-112, and, if
12 the electric power and energy component of such tariffed rate
13 exceeds the market value by more than 10% for any customer
14 class, may establish such electric power and energy component
15 at a rate equal to the market value plus 10%. In any such
16 case, the Commission may also elect to extend the provisions
17 of Section 16-111(e) for any period in which the electric
18 utility is collecting transition charges, using information
19 applicable to such period.
20 (j) During the mandatory transition period, an electric
21 utility may elect to transfer to a non-operating income
22 account under the Commission's Uniform System of Accounts
23 either or both of (i) an amount of unamortized investment tax
24 credit that is in addition to the ratable amount which is
25 credited to the electric utility's operating income account
26 for the year in accordance with Section 46(f)(2) of the
27 federal Internal Revenue Code of 1986, as in effect prior to
28 P.L. 101-508, or (ii) "excess tax reserves", as that term is
29 defined in Section 203(e)(2)(A) of the federal Tax Reform Act
30 of 1986, provided that (A) the amount transferred may not
31 exceed the amount of the electric utility's assets that were
32 created pursuant to Statement of Financial Accounting
33 Standards No. 71 which the electric utility has written off
34 during the mandatory transition period, and (B) the transfer
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1 shall not be effective until approved by the Internal Revenue
2 Service. An electric utility electing to make such a
3 transfer shall file a statement with the Commission stating
4 the amount and timing of the transfer for which it intends to
5 request approval of the Internal Revenue Service, along with
6 a copy of its proposed request to the Internal Revenue
7 Service for a ruling. The Commission shall issue an order
8 within 14 days after the electric utility's filing approving,
9 subject to receipt of approval from the Internal Revenue
10 Service, the proposed transfer.
11 (k) If an electric utility is selling or transferring to
12 a single buyer 5 or more generating plants located in this
13 State with a total net dependable capacity of 5000 megawatts
14 or more pursuant to subsection (g) of this Section and has
15 obtained a sale price or consideration that exceeds 200% of
16 the book value of such plants, the electric utility must
17 provide to the Governor, the President of the Illinois
18 Senate, the Minority Leader of the Illinois Senate, the
19 Speaker of the Illinois House of Representatives, and the
20 Minority Leader of the Illinois House of Representatives no
21 later than 15 days after filing its notice under subsection
22 (g) of this Section or 5 days after the date on which this
23 subsection (k) becomes law, whichever is later, a written
24 commitment in which such electric utility agrees to expend $2
25 billion outside the corporate limits of any municipality with
26 1,000,000 or more inhabitants within such electric utility's
27 service area, over a 6-year period beginning with the
28 calendar year in which the notice is filed, on projects,
29 programs, and improvements within its service area relating
30 to transmission and distribution including, without
31 limitation, infrastructure expansion, repair and replacement,
32 capital investments, operations and maintenance, and
33 vegetation management.
34 (Source: P.A. 90-561, eff. 12-16-97; 90-563, eff. 12-16-97;
-19- LRB9109971JSpc
1 91-50, eff. 6-30-99.)