101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB4929

 

Introduced 2/18/2020, by Rep. David A. Welter

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/8-306
220 ILCS 5/9-201  from Ch. 111 2/3, par. 9-201
220 ILCS 5/9-210.5

    Amends the Public Utilities Act. Provides that additional notice requirements apply for water or sewer utilities with greater than 2,500 total customers (rather than 15,000 total customers). Provides that such water or sewer utilities shall include in a separate bill insert the percentage change from the rate of the customer's previous bill to the rate of the customer's current bill. Provides that water utilities under the jurisdiction of the Illinois Commerce Commission shall not increase water and sewer rates by more than 2.5% annually. Provides that an acquisition of a water or sewer utility shall be paid for by shareholders and not existing ratepayers (rather than charging ratepayers in the tariff group into which the water or sewer utility is to be combined specific rates).


LRB101 19183 SPS 68646 b

 

 

A BILL FOR

 

HB4929LRB101 19183 SPS 68646 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Public Utilities Act is amended by changing
5Sections 8-306, 9-201, and 9-210.5 as follows:
 
6    (220 ILCS 5/8-306)
7    Sec. 8-306. Special provisions relating to water and sewer
8utilities.
9    (a) No later than 120 days after the effective date of this
10amendatory Act of the 94th General Assembly, the Commission
11shall prepare, make available to customers upon request, and
12post on its Internet web site information concerning the
13service obligations of water and sewer utilities and remedies
14that a customer may pursue for a violation of the customer's
15rights. The information shall specifically address the rights
16of a customer of a water or sewer utility in the following
17situations:
18        (1) The customer's water meter is replaced.
19        (2) The customer's bill increases by more than 50%
20    within one billing period.
21        (3) The customer's water service is terminated.
22        (4) The customer wishes to complain after receiving a
23    termination of service notice.

 

 

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1        (5) The customer is unable to make payment on a billing
2    statement.
3        (6) A rate is filed, including without limitation a
4    surcharge or annual reconciliation filing, that will
5    increase the amount billed to the customer.
6        (7) The customer is billed for services provided prior
7    to the date covered by the billing statement.
8        (8) The customer is due to receive a credit.
9    Each billing statement issued by a water or sewer utility
10shall include an Internet web site address where the customer
11can view the information required under this subsection (a) and
12a telephone number that the customer may call to request a copy
13of the information.
14    (b) A water or sewer utility may discontinue service only
15after it has mailed or delivered by other means a written
16notice of discontinuance substantially in the form of Appendix
17A of 83 Ill. Adm. Code 280. The notice must include the
18Internet web site address where the customer can view the
19information required under subsection (a) and a telephone
20number that the customer may call to request a copy of the
21information. Any notice required to be delivered or mailed to a
22customer prior to discontinuance of service shall be delivered
23or mailed separately from any bill. Service shall not be
24discontinued until at least 5 days after delivery or 8 days
25after the mailing of this notice. Service shall not be
26discontinued and shall be restored if discontinued for the

 

 

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1reason which is the subject of a dispute or complaint during
2the pendency of informal or formal complaint procedures of the
3Illinois Commerce Commission under 83 Ill. Adm. Code 280.160 or
4280.170, where the customer has complied with those rules.
5Service shall not be discontinued and shall be restored if
6discontinued where a customer has established a deferred
7payment agreement pursuant to 83 Ill. Adm. Code 280.110 and has
8not defaulted on such agreement. Residential customers who are
9indebted to a utility for past due utility service shall have
10the opportunity to make arrangements with the utility to retire
11the debt by periodic payments, referred to as a deferred
12payment agreement, unless this customer has failed to make
13payment under such a plan during the past 12 months. The terms
14and conditions of a reasonable deferred payment agreement shall
15be determined by the utility after consideration of the
16following factors, based upon information available from
17current utility records or provided by the customer or
18applicant:
19        (1) size of the past due account;
20        (2) customer or applicant's ability to pay;
21        (3) customer or applicant's payment history;
22        (4) reason for the outstanding indebtedness; and
23        (5) any other relevant factors relating to the
24    circumstances of the customer or applicant's service.
25A residential customer shall pay a maximum of one-fourth of the
26amount past due and owing at the time of entering into the

 

 

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1deferred payment agreement, and the water or sewer utility
2shall allow a minimum of 2 months from the date of the
3agreement and a maximum of 12 months for payment to be made
4under a deferred payment agreement. Late payment charges may be
5assessed against the amount owing that is the subject of a
6deferred payment agreement.
7    (c) A water or sewer utility shall provide notice as
8required by subsection (a) of Section 9-201 after the filing of
9each information sheet under a purchased water surcharge,
10purchased sewage treatment surcharge, or qualifying
11infrastructure plant surcharge. The utility also shall post
12notice of the filing in accordance with the requirements of 83
13Ill. Adm. Code 255. Unless filed as part of a general rate
14increase, notice of the filing of a purchased water surcharge
15rider, purchased sewage treatment surcharge rider, or
16qualifying infrastructure plant surcharge rider also shall be
17given in the manner required by this subsection (c) for the
18filing of information sheets.
19    (d) Commission rules pertaining to formal and informal
20complaints against public utilities shall apply with full and
21equal force to water and sewer utilities and their customers,
22including provisions of 83 Ill. Adm. Code 280.170, and the
23Commission shall respond to each complaint by providing the
24consumer with a copy of the utility's response to the complaint
25and a copy of the Commission's review of the complaint and its
26findings. The Commission shall also provide the consumer with

 

 

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1all available options for recourse.
2    (e) Any refund shown on the billing statement of a customer
3of a water or sewer utility must be itemized and must state if
4the refund is an adjustment or credit.
5    (f) Water service for building construction purposes. At
6the request of any municipality or township within the service
7area of a public utility that provides water service to
8customers within the municipality or township, a public utility
9must (1) require all water service used for building
10construction purposes to be measured by meter and subject to
11approved rates and charges for metered water service and (2)
12prohibit the unauthorized use of water taken from hydrants or
13service lines installed at construction sites.
14    (g) Water meters.
15        (1) Periodic testing. Unless otherwise approved by the
16    Commission, each service water meter shall be periodically
17    inspected and tested in accordance with the schedule
18    specified in 83 Ill. Adm. Code 600.340, or more frequently
19    as the results may warrant, to insure that the meter
20    accuracy is maintained within the limits set out in 83 Ill.
21    Adm. Code 600.310.
22        (2) Meter tests requested by customer.
23            (A) Each utility furnishing metered water service
24        shall, without charge, test the accuracy of any meter
25        upon request by the customer served by such meter,
26        provided that the meter in question has not been tested

 

 

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1        by the utility or by the Commission within 2 years
2        previous to such request. The customer or his or her
3        representatives shall have the privilege of witnessing
4        the test at the option of the customer. A written
5        report, giving the results of the test, shall be made
6        to the customer.
7            (B) When a meter that has been in service less than
8        2 years since its last test is found to be accurate
9        within the limits specified in 83 Ill. Adm. Code
10        600.310, the customer shall pay a fee to the utility
11        not to exceed the amounts specified in 83 Ill. Adm.
12        Code 600.350(b). Fees for testing meters not included
13        in this Section or so located that the cost will be out
14        of proportion to the fee specified will be determined
15        by the Commission upon receipt of a complete
16        description of the case.
17        (3) Commission referee tests. Upon written application
18    to the Commission by any customer, a test will be made of
19    the customer's meter by a representative of the Commission.
20    For such a test, a fee as provided for in subsection (g)(2)
21    shall accompany the application. If the meter is found to
22    be registering more than 1.5% fast on the average when
23    tested as prescribed in 83 Ill. Adm. Code 600.310, the
24    utility shall refund to the customer the amount of the fee.
25    The utility shall in no way disturb the meter after a
26    customer has made an application for a referee test until

 

 

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1    authority to do so is given by the Commission or the
2    customer in writing.
3    (h) Water and sewer utilities; low usage. Each public
4utility that provides water and sewer service must establish a
5unit sewer rate, subject to review by the Commission, that
6applies only to those customers who use less than 1,000 gallons
7of water in any billing period.
8    (i) Water and sewer utilities; separate meters. Each public
9utility that provides water and sewer service must offer
10separate rates for water and sewer service to any commercial or
11residential customer who uses separate meters to measure each
12of those services. In order for the separate rate to apply, a
13combination of meters must be used to measure the amount of
14water that reaches the sewer system and the amount of water
15that does not reach the sewer system.
16    (j) Each water or sewer public utility must disclose on
17each billing statement any amount billed that is for service
18provided prior to the date covered by the billing statement.
19The disclosure must include the dates for which the prior
20service is being billed. Each billing statement that includes
21an amount billed for service provided prior to the date covered
22by the billing statement must disclose the dates for which that
23amount is billed and must include a copy of the document
24created under subsection (a) and a statement of current
25Commission rules concerning unbilled or misbilled service.
26    (k) When the customer is due a refund resulting from

 

 

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1payment of an overcharge, the utility shall credit the customer
2in the amount of overpayment with interest from the date of
3overpayment by the customer. The rate for interest shall be at
4the appropriate rate determined by the Commission under 83 Ill.
5Adm. Code 280.70.
6    (l) Water and sewer public utilities; subcontractors. The
7Commission shall adopt rules for water and sewer public
8utilities to provide notice to the customers of the proper kind
9of identification that a subcontractor must present to the
10customer, to prohibit a subcontractor from soliciting or
11receiving payment of any kind for any service provided by the
12water or sewer public utility or the subcontractor, and to
13establish sanctions for violations.
14    (m) Water and sewer public utilities; unaccounted-for
15water. By December 31, 2006, each water public utility shall
16file tariffs with the Commission to establish the maximum
17percentage of unaccounted-for water that would be considered in
18the determination of any rates or surcharges. The rates or
19surcharges approved for a water public utility shall not
20include charges for unaccounted-for water in excess of this
21maximum percentage without well-documented support and
22justification for the Commission to consider in any request to
23recover charges in excess of the tariffed maximum percentage.
24    (n) Rate increases; public forums. When any public utility
25providing water or sewer service proposes a general rate
26increase, in addition to other notice requirements, the water

 

 

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1or sewer public utility must notify its customers of their
2right to request a public forum. A customer or group of
3customers must make written request to the Commission for a
4public forum and must also provide written notification of the
5request to the customer's municipal or, for unincorporated
6areas, township government. The Commission, at its discretion,
7may schedule the public forum. If it is determined that public
8forums are required for multiple municipalities or townships,
9the Commission shall schedule these public forums, in locations
10within approximately 45 minutes drive time of the
11municipalities or townships for which the public forums have
12been scheduled. The public utility must provide advance notice
13of 30 days for each public forum to the governing bodies of
14those units of local government affected by the increase. The
15day of each public forum shall be selected so as to encourage
16the greatest public participation. Each public forum will begin
17at 7:00 p.m. Reports and comments made during or as a result of
18each public forum must be made available to the hearing
19officials and reviewed when drafting a recommended or tentative
20decision, finding or order pursuant to Section 10-111 of this
21Act.
22    (o) Water utilities under the jurisdiction of the
23Commission shall not increase water and sewer rates by more
24than 2.5% annually. For purposes of this subsection (o),
25"rates" means the Commission-approved rates on January 1, 2020.
26(Source: P.A. 94-950, eff. 6-27-06.)
 

 

 

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1    (220 ILCS 5/9-201)  (from Ch. 111 2/3, par. 9-201)
2    Sec. 9-201. (a) Unless the Commission otherwise orders, and
3except as otherwise provided in this Section, no change shall
4be made by any public utility in any rate or other charge or
5classification, or in any rule, regulation, practice or
6contract relating to or affecting any rate or other charge,
7classification or service, or in any privilege or facility,
8except after 45 days' notice to the Commission and to the
9public as herein provided. Such notice shall be given by filing
10with the Commission and keeping open for public inspection new
11schedules or supplements stating plainly the change or changes
12to be made in the schedule or schedules then in force, and the
13time when the change or changes will go into effect, and by
14publication in a newspaper of general circulation or such other
15notice to persons affected by such change as may be prescribed
16by rule of the Commission. The Commission, for good cause
17shown, may allow changes without requiring the 45 days' notice
18herein provided for, by an order specifying the changes so to
19be made and the time when they shall take effect and the manner
20in which they shall be filed and published.
21    When any change is proposed in any rate or other charge, or
22classification, or in any rule, regulation, practice, or
23contract relating to or affecting any rate or other charge,
24classification or service, or in any privilege or facility,
25such proposed change shall be plainly indicated on the new

 

 

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1schedule filed with the Commission, by some character to be
2designated by the Commission, immediately preceding or
3following the item.
4    When any public utility providing water or sewer service
5proposes any change in any rate or other charge, or
6classification, or in any rule, regulation, practice, or
7contract relating to or affecting any rate or other charge,
8classification or service, or in any privilege or facility,
9such utility shall, in addition to the other notice
10requirements of this Act, provide notice of such change to all
11customers potentially affected by including a notice and
12description of such change, and of Commission procedures for
13intervention, in the first bill sent to each such customer
14after the filing of the proposed change.
15    For water or sewer utilities with greater than 2,500 15,000
16total customers, the following notice requirements are
17applicable, in addition to the other notice requirements of
18this Act:
19        (1) As a separate bill insert, an initial notice in the
20    first bill sent to all customers potentially affected by
21    the proposed change after the filing of the proposed change
22    shall include:
23            (A) the approximate date when the change or changes
24        shall go into effect assuming the Commission utilizes
25        the 11-month process as described in this Section;
26            (B) a statement indicating that the estimated bill

 

 

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1        impact may vary based on multiple factors, including,
2        but not limited to, meter size, usage volume, and the
3        fire protection district;
4            (C) the water or sewer utility's customer service
5        number or other number as may be appropriate where an
6        authorized agent of the water or sewer utility can
7        explain how the proposed increase might impact an
8        individual customer's bill;
9            (D) if the proposed change involves a change from a
10        flat to a volumetric rate, an explanation of volumetric
11        rate;
12            (E) a reference to the water or sewer utility's
13        website where customers can find tips on water
14        conservation; and
15            (F) for customers receiving both water and sewer
16        service from a utility and if the customer has an
17        option to install a separate meter for irrigation to
18        mitigate sewer charges, an explanation of the water and
19        sewer utility's and the customer's responsibilities
20        for installation of a separate meter if such a change
21        is approved.
22            (G) the percentage change from the rate of the
23        customer's previous bill to the rate of the customer's
24        current bill.
25        (2) A second notice to all customers shall be included
26    on the first bill after the Commission suspends the tariffs

 

 

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1    initiating the rate case.
2        (3) Final notice of such change shall be sent to all
3    customers potentially affected by the proposed change by
4    including information required under this paragraph (3)
5    with the first bill after the effective date of the rates
6    approved by the Final Order of the Commission in a rate
7    case. The notice shall include the following:
8            (A) the date when the change or changes went into
9        effect;
10            (B) the water or sewer utility's customer service
11        number or other number as may be appropriate where an
12        authorized agent of the water or sewer utility can
13        explain how the proposed increase might impact an
14        individual customer's bill;
15            (C) an explanation that usage shall now be charged
16        at a volumetric rate rather than a flat rate, if
17        applicable;
18            (D) a reference to the water or sewer utility's
19        website where the customer can find tips on water
20        conservation; and
21            (E) for customers receiving both water and sewer
22        service from a utility and if the customer has an
23        option to install a separate meter for irrigation to
24        mitigate sewer charges, an explanation of the water and
25        sewer utility's and the customer's responsibilities
26        for installation of a separate meter if such a change

 

 

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1        is approved.
2        (4) In each notice provided to a customer, the water or
3    sewer utility shall include the phone number and website
4    information for the Citizens Utility Board and the Consumer
5    Services Division of the Commission with instructions on
6    how to dispute or file a complaint relating to a rate
7    increase.
8    (b) Whenever there shall be filed with the Commission any
9schedule stating an individual or joint rate or other charge,
10classification, contract, practice, rule or regulation, the
11Commission shall have power, and it is hereby given authority,
12either upon complaint or upon its own initiative without
13complaint, at once, and if it so orders, without answer or
14other formal pleadings by the interested public utility or
15utilities, but upon reasonable notice, to enter upon a hearing
16concerning the propriety of such rate or other charge,
17classification, contract, practice, rule or regulation, and
18pending the hearing and decision thereon, such rate or other
19charge, classification, contract, practice, rule or regulation
20shall not go into effect. The period of suspension of such rate
21or other charge, classification, contract, practice, rule or
22regulation shall not extend more than 105 days beyond the time
23when such rate or other charge, classification, contract,
24practice, rule or regulation would otherwise go into effect
25unless the Commission, in its discretion, extends the period of
26suspension for a further period not exceeding 6 months.

 

 

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1    All rates or other charges, classifications, contracts,
2practices, rules or regulations not so suspended shall, on the
3expiration of 45 days from the time of filing the same with the
4Commission, or of such lesser time as the Commission may grant,
5go into effect and be the established and effective rates or
6other charges, classifications, contracts, practices, rules
7and regulations, subject to the power of the Commission, after
8a hearing had on its own motion or upon complaint, as herein
9provided, to alter or modify the same.
10    Within 30 days after such changes have been authorized by
11the Commission, copies of the new or revised schedules shall be
12posted or filed in accordance with the terms of Section 9-103
13of this Act, in such a manner that all changes shall be plainly
14indicated. The Commission shall incorporate into the period of
15suspension a review period of 4 business days during which the
16Commission may review and determine whether the new or revised
17schedules comply with the Commission's decision approving a
18change to the public utility's rates. Such review period shall
19not extend the suspension period by more than 2 days. Absent
20notification to the contrary within the 4 business day period,
21the new or revised schedules shall be deemed approved.
22    (c) If the Commission enters upon a hearing concerning the
23propriety of any proposed rate or other charge, classification,
24contract, practice, rule or regulation, the Commission shall
25establish the rates or other charges, classifications,
26contracts, practices, rules or regulations proposed, in whole

 

 

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1or in part, or others in lieu thereof, which it shall find to
2be just and reasonable. In such hearing, the burden of proof to
3establish the justness and reasonableness of the proposed rates
4or other charges, classifications, contracts, practices, rules
5or regulations, in whole and in part, shall be upon the
6utility. The utility, the staff of the Commission, the Attorney
7General, or any party to a proceeding initiated under this
8Section who has been granted intervenor status and submitted a
9post-hearing brief must be given the opportunity to present
10oral argument, if requested no later than the date for filing
11exceptions, on the propriety of any proposed rate or other
12charge, classification, contract, practice, rule, or
13regulation. No rate or other charge, classification, contract,
14practice, rule or regulation shall be found just and reasonable
15unless it is consistent with Sections of this Article.
16    (d) Except where compliance with Section 8-401 of this Act
17is of urgent and immediate concern, no representative of a
18public utility may discuss with a commissioner, commissioner's
19assistant, or administrative law judge in a non-public setting
20a planned filing for a general rate increase. If a public
21utility makes a filing under this Section, then no substantive
22communication by any such person with a commissioner,
23commissioner's assistant, or administrative law judge
24concerning the filing is permitted until a notice of hearing
25has been issued. After the notice of hearing has been issued,
26the only communications by any such person with a commissioner,

 

 

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1commissioner's assistant, or administrative law judge
2concerning the filing permitted are communications permitted
3under Section 10-103 of this Act. If any such communication
4does occur, then within 5 days of the docket being initiated
5all details relating to the communication shall be placed on
6the public record of the proceeding. The record shall include
7any materials, whether written, recorded, filmed, or graphic in
8nature, produced or reproduced on any media, used in connection
9with the communication. The record shall reflect the names of
10all persons who transmitted, received, or were otherwise
11involved in the communication, the duration of the
12communication, and whether the communication occurred in
13person or by other means. In the case of an oral communication,
14the record shall also reflect the location or locations of all
15persons involved in the communication and, if the communication
16occurred by telephone, the telephone numbers for the callers
17and recipients of the communication. A commissioner,
18commissioner's assistant, or administrative law judge who is
19involved in any such communication shall be recused from the
20affected proceeding. The Commission, or any commissioner or
21administrative law judge presiding over the proceeding shall,
22in the event of a violation of this Section, take action
23necessary to ensure that such violation does not prejudice any
24party or adversely affect the fairness of the proceedings
25including dismissing the affected proceeding. Nothing in this
26subsection (d) is intended to preclude otherwise allowable

 

 

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1updates on issues that may be indirectly related to a general
2rate case filing because cost recovery for the underlying
3activity may be requested. Such updates may include, without
4limitation, issues related to outages and restoration, credit
5ratings, security issuances, reliability, Federal Energy
6Regulatory Commission matters, Federal Communications
7Commission matters, regional reliability organizations,
8consumer education, or labor matters, provided that such
9updates may not include cost recovery in a planned rate case.
10(Source: P.A. 100-840, eff. 8-13-18.)
 
11    (220 ILCS 5/9-210.5)
12    (Section scheduled to be repealed on June 1, 2028)
13    Sec. 9-210.5. Valuation of water and sewer utilities.
14    (a) In this Section:
15        "Disinterested" means that the person directly
16    involved (1) is not a director, officer, or an employee of
17    the large public utility or the water or sewer utility or
18    its direct affiliates or subsidiaries for at least 12
19    months before becoming engaged under this Section; (2)
20    shall not derive a material financial benefit from the sale
21    of the water or sewer utility other than fees for services
22    rendered, and (3) shall not have a member of the person's
23    immediate family, including a spouse, parents or spouse's
24    parents, children or spouses of children, or siblings and
25    their spouses or children, be a director, officer, or

 

 

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1    employee of either the large public utility or water or
2    sewer utility or the water or sewer utility or its direct
3    affiliates or subsidiaries for at least 12 months before
4    becoming engaged under this Section or receive a material
5    financial benefit from the sale of the water or sewer
6    utility other than fees for services rendered.
7        "District" means a service area of a large public
8    utility whose customers are subject to the same rate
9    tariff.
10        "Large public utility" means an investor-owned public
11    utility that:
12            (1) is subject to regulation by the Illinois
13        Commerce Commission under this Act;
14            (2) regularly provides water or sewer service to
15        more than 30,000 customer connections;
16            (3) provides safe and adequate service; and
17            (4) is not a water or sewer utility as defined in
18        this subsection (a).
19        "Next rate case" means a large public utility's first
20    general rate case after the date the large public utility
21    acquires the water or sewer utility where the acquired
22    water or sewer utility's cost of service is considered as
23    part of determining the large public utility's resulting
24    rates.
25        "Prior rate case" means a large public utility's
26    general rate case resulting in the rates in effect for the

 

 

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1    large public utility at the time it acquires the water or
2    sewer utility.
3        "Utility service source" means the water or sewer
4    utility or large public utility from which the customer
5    receives its utility service type.
6        "Utility service type" means water utility service or
7    sewer utility service or water and sewer utility service.
8        "Water or sewer utility" means any of the following:
9            (1) a public utility that regularly provides water
10        or sewer service to 6,000 or fewer customer
11        connections;
12            (2) a water district, including, but not limited
13        to, a public water district, water service district, or
14        surface water protection district, or a sewer district
15        of any kind established as a special district under the
16        laws of this State that regularly provides water or
17        sewer service;
18            (3) a waterworks system or sewerage system
19        established under the Township Code that regularly
20        provides water or sewer service; or
21            (4) a water system or sewer system owned by a
22        municipality that regularly provides water or sewer
23        service; and
24            (5) any other entity that is not a public utility
25        that regularly provides water or sewer service.
26    (b) Notwithstanding any other provision of this Act, a

 

 

HB4929- 21 -LRB101 19183 SPS 68646 b

1large public utility that acquires a water or sewer utility may
2request that the Commission use, and, if so requested, the
3Commission shall use, the procedures set forth under this
4Section to establish the ratemaking rate base of that water or
5sewer utility at the time when it is acquired by the large
6public utility.
7    (c) If a large public utility elects the procedures under
8this Section to establish the rate base of a water or sewer
9utility that it is acquiring, then 3 appraisals shall be
10performed. The average of these 3 appraisals shall represent
11the fair market value of the water or sewer utility that is
12being acquired. The appraisals shall be performed by 3
13appraisers approved by the Commission's Executive Director or
14designee and engaged by either the water or sewer utility being
15acquired or by the large public utility. Each appraiser shall
16be engaged on reasonable terms approved by the Commission. Each
17appraiser shall be a disinterested person licensed as a State
18certified general real estate appraiser under the Real Estate
19Appraiser Licensing Act of 2002.
20    Each appraiser shall:
21        (1) be sworn to determine the fair market value of the
22    water or sewer utility by establishing the amount for which
23    the water or sewer utility would be sold in a voluntary
24    transaction between a willing buyer and willing seller
25    under no obligation to buy or sell;
26        (2) determine fair market value in compliance with the

 

 

HB4929- 22 -LRB101 19183 SPS 68646 b

1    Uniform Standards of Professional Appraisal Practice;
2        (3) engage one disinterested engineer who is licensed
3    in this State, and who may be the same engineer that is
4    engaged by the other appraisers, to prepare an assessment
5    of the tangible assets of the water or sewer utility, which
6    is to be incorporated into the appraisal under the cost
7    approach;
8        (4) request from the manager of the Accounting
9    Department, if the water or sewer utility is a public
10    utility that is regulated by the Commission, a list of
11    investments made by the water or sewer utility that had
12    been disallowed previously and that shall be excluded from
13    the calculation of the large public utility's rate base in
14    its next rate case; and
15        (5) return their appraisal, in writing, to the water or
16    sewer utility and large public utility in a reasonable and
17    timely manner.
18    If the appraiser cannot engage an engineer, as described in
19paragraph (3) of this subsection (c), within 30 days after the
20appraiser is engaged, then the Commission's Executive Director
21or designee shall recommend the engineer the appraiser should
22engage. The Commission's Executive Director or designee shall
23provide his or her recommendation within 30 days after he or
24she is officially notified of the appraiser's failure to engage
25an engineer and the appraiser shall promptly work to engage the
26recommended engineer. If the appraiser is unable to negotiate

 

 

HB4929- 23 -LRB101 19183 SPS 68646 b

1reasonable engagement terms with the recommended engineer
2within 15 days after the recommendation by the Commission's
3Executive Director or designee, then the appraiser shall notify
4the Commission's Executive Director or designee and the process
5shall be repeated until an engineer is successfully engaged.
6    (d) The lesser of (i) the purchase price or (ii) the fair
7market value determined under subsection (c) of this Section
8shall constitute the rate base associated with the water or
9sewer utility as acquired by and incorporated into the rate
10base of the district designated by the acquiring large public
11utility under this Section, subject to any adjustments that the
12Commission deems necessary to ensure such rate base reflects
13prudent and useful investments in the provision of public
14utility service. The reasonable transaction and closing costs
15incurred by the large public utility shall be treated
16consistent with the applicable accounting standards under this
17Act. The total amount of all of the appraisers' fees to be
18included in the transaction and closing costs shall not exceed
19the greater of $15,000 or 5% of the appraised value of the
20water or sewer utility being acquired. This rate base treatment
21shall not be deemed to violate this Act, including, but not
22limited to, any Sections in Articles VIII and IX of this Act
23that might be affected by this Section. Any acquisition of a
24water or sewer utility shall be paid for by shareholders and
25not existing ratepayers that affects the cumulative base rates
26of the large public utility's existing ratepayers in the tariff

 

 

HB4929- 24 -LRB101 19183 SPS 68646 b

1group into which the water or sewer utility is to be combined
2by less than (1) 2.5% at the time of the acquisition for any
3single acquisition completed under this Section or (2) 5% for
4all acquisitions completed under this Section before the
5Commission's final order in the next rate case shall not be
6deemed to violate Section 7-204 or any other provision of this
7Act.
8    In the Commission's order that approves the large public
9utility's acquisition of the water or sewer utility, the
10Commission shall issue its decision establishing (1) the
11ratemaking rate base of the water or sewer utility; (2) the
12district or tariff group with which the water or sewer utility
13shall be combined for ratemaking purposes, if such combination
14has been proposed by the large public utility; and (3) the
15rates to be charged to customers in the water or sewer utility.
16    (e) If the water or sewer utility being acquired is owned
17by the State or any political subdivision thereof, then the
18water or sewer utility must inform the public of the terms of
19its acquisition by the large public utility by (1) holding a
20public meeting prior to the acquisition and (2) causing to be
21published, in a newspaper of general circulation in the area
22that the water or sewer utility operates, a notice setting
23forth the terms of its acquisition by the large public utility
24and options that shall be available to assist customers to pay
25their bills after the acquisition.
26    (f) The large public utility may recommend the district or

 

 

HB4929- 25 -LRB101 19183 SPS 68646 b

1tariff group of which the water or sewer utility shall, for
2ratemaking purposes, become a part after the acquisition, or
3may recommend a lesser rate for the water or sewer utility. If
4the large public utility recommends a lesser rate, it shall
5submit to the Commission its proposed rate schedule and the
6proposed final tariff group for the acquired water or sewer
7utility. The Commission's approved district or tariff group or
8rates shall be consistent with the large public utility's
9recommendation, unless such recommendation can be shown to be
10contrary to the public interest.
11    (g) From the date of acquisition until the date that new
12rates are effective in the acquiring large public utility's
13next rate case, the customers of the acquired water or sewer
14utility shall pay the approved then-existing rates of the
15district or tariff group as ordered by the Commission, or some
16lesser rates as recommended by the large public utility and
17approved by the Commission under subsection (f); provided,
18that, if the application of such rates of the large public
19utility to customers of the acquired water or sewer utility
20using 54,000 gallons annually results in an increase to the
21total annual bill of customers of the acquired water or sewer
22utility, exclusive of fire service or related charges, then the
23large public utility's rates charged to the customers of the
24acquired water or sewer utility shall be uniformly reduced, if
25any reduction is required, by the percent that results in the
26total annual bill, exclusive of fire services or related

 

 

HB4929- 26 -LRB101 19183 SPS 68646 b

1charges, for the customers of the acquired water or sewer
2utility using 54,000 gallons being equal to 1.5% of the latest
3median household income as reported by the United States Census
4Bureau for the most applicable community or county. For each
5customer of the water or sewer utility with potable water usage
6values that cannot be reasonably obtained, a value of 4,500
7gallons per month shall be assigned. These rates shall not be
8deemed to violate this Act including, but not limited to,
9Section 9-101 and any other applicable Sections in Articles
10VIII and IX of this Act. The Commission shall issue its
11decision establishing the rates effective for the water or
12sewer utility immediately following an acquisition in its order
13approving the acquisition.
14    (h) In the acquiring large public utility's next rate case,
15the water or sewer utility and the district or tariff group
16ordered by the Commission and their costs of service may be
17combined under the same rate tariff. This rate tariff shall be
18based on allocation of costs of service of the acquired water
19or sewer utility and the large public utility's district or
20tariff group ordered by the Commission and utilizing a rate
21design that does not distinguish among customers on the basis
22of utility service source or type. This rate tariff shall not
23be deemed to violate this Act including, but not limited to,
24Section 9-101 of this Act. In the acquiring large public
25utility's 2 rate cases after an acquisition, but in no
26subsequent rate case, the large public utility may file a rate

 

 

HB4929- 27 -LRB101 19183 SPS 68646 b

1tariff for a water or sewer utility acquired under this Section
2that establishes lesser rates than the district or tariff group
3into which the water or sewer utility is to be combined. Those
4lesser rates shall not be deemed to violate Section 7-204 or
5any other provision of this Act if they affect the cumulative
6base rates of the large public utility's existing rate payers
7in the district or tariff by less than 2.5%.
8    (i) Any post-acquisition improvements made by the large
9public utility in the water or sewer utility shall accrue a
10cost for financing set at the large public utility's determined
11rate for allowance for funds used during construction,
12inclusive of the debt, equity, and income tax gross up
13components, after the date on which the expenditure was
14incurred by the large public utility until the investment has
15been in service for a 4-year period or, if sooner, until the
16time the rates are implemented in the large public utility's
17next rate case.
18    Any post-acquisition improvements made by the large public
19utility in the water or sewer utility shall not be depreciated
20for ratemaking purposes from the date on which the expenditure
21was incurred by the large public utility until the investment
22has been in service for a 4-year period or, if sooner, until
23the time the rates are implemented in the large public
24utility's next rate case.
25    (j) This Section shall be exclusively applied to large
26public utilities in the voluntary and mutually agreeable

 

 

HB4929- 28 -LRB101 19183 SPS 68646 b

1acquisition of water or sewer utilities. Any petitions filed
2with the Commission related to the acquisitions described in
3this Section, including petitions seeking approvals or
4certificates required by this Act, shall be deemed approved
5unless the Commission issues its final order within 11 months
6after the date the large public utility filed its initial
7petition. This Section shall only apply to utilities providing
8water or sewer service and shall not be construed in any manner
9to apply to electric corporations, natural gas corporations, or
10any other utility subject to this Act.
11    (k) Nothing in this Section shall prohibit a party from
12declining to proceed with an acquisition or be deemed as
13establishing the final purchase price of an acquisition.
14    (l) In the Commission's order that approves the large
15utility's acquisition of the water or sewer utility, the
16Commission shall address each aspect of the acquisition
17transaction for which approval is required under the Act.
18    (m) Any contractor or subcontractor that performs work on a
19water or sewer utility acquired by a large public utility under
20this Section shall be a responsible bidder as described in
21Section 30-22 of the Illinois Procurement Code. The contractor
22or subcontractor shall submit evidence of meeting the
23requirements to be a responsible bidder as described in Section
2430-22 to the water or sewer utility. Any new water or sewer
25facility built as a result of the acquisition shall require the
26contractor to enter into a project labor agreement. The large

 

 

HB4929- 29 -LRB101 19183 SPS 68646 b

1public utility acquiring the water or sewer utility shall offer
2employee positions to qualified employees of the acquired water
3or sewer utility.
4    (n) This Section is repealed on June 1, 2028.
5(Source: P.A. 100-751, eff. 8-10-18; 100-1151, eff. 6-1-19.)