HB4661 EngrossedLRB103 37733 SPS 67860 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 9-241 and 16-108.5 as follows:
 
6    (220 ILCS 5/9-241)  (from Ch. 111 2/3, par. 9-241)
7    Sec. 9-241. Nondiscrimination.
8    (a) No public utility shall, as to rates or other charges,
9services, facilities or in other respect, make or grant any
10preference or advantage to any corporation or person or
11subject any corporation or person to any prejudice or
12disadvantage. No public utility shall establish or maintain
13any unreasonable difference as to rates or other charges,
14services, facilities, or in any other respect, either as
15between localities or as between classes of service.
16    (b) An electric utility in a county with a population of
173,000,000 or more shall not establish or maintain any
18unreasonable difference as to rates or other charges,
19services, contractual terms, or facilities for access to or
20the use of its utility infrastructure by another person or for
21any other purpose. Notwithstanding any other provision of law,
22the Commission and its staff shall interpret this Section in
23accordance with Article XVI of this Act.

 

 

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1     (c) Nothing However, nothing in this Section shall be
2construed as limiting the authority of the Commission to
3permit the establishment of economic development rates as
4incentives to economic development either in enterprise zones
5as designated by the State of Illinois or in other areas of a
6utility's service area. Such rates should be available to
7existing businesses which demonstrate an increase to existing
8load as well as new businesses which create new load for a
9utility so as to create a more balanced utilization of
10generating capacity. The Commission shall ensure that such
11rates are established at a level which provides a net benefit
12to customers within a public utility's service area.
13    (d) On or before January 1, 2023, the Commission shall
14conduct a comprehensive study to assess whether low-income
15discount rates for electric and natural gas residential
16customers are appropriate and the potential design and
17implementation of any such rates. The Commission shall include
18its findings, together with the appropriate recommendations,
19in a report to be provided to the General Assembly. Upon
20completion of the study, the Commission shall have the
21authority to permit or require electric and natural gas
22utilities to file a tariff establishing low-income discount
23rates.
24    Such study shall assess, at a minimum, the following:
25        (1) customer eligibility requirements, including
26    income-based eligibility and eligibility based on

 

 

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1    participation in or eligibility for certain public
2    assistance programs;
3        (2) appropriate rate structures, including
4    consideration of tiered discounts for different income
5    levels;
6        (3) appropriate recovery mechanisms, including the
7    consideration of volumetric charges and customer charges;
8        (4) appropriate verification mechanisms;
9        (5) measures to ensure customer confidentiality and
10    data safeguards;
11        (6) outreach and consumer education procedures; and
12        (7) the impact that a low-income discount rate would
13    have on the affordability of delivery service to
14    low-income customers and customers overall.
15    (e) The Commission shall adopt rules requiring utility
16companies to produce information, in the form of a mailing,
17and other approved methods of distribution, to its consumers,
18to inform the consumers of available rebates, discounts,
19credits, and other cost-saving mechanisms that can help them
20lower their monthly utility bills, and send out such
21information semi-annually, unless otherwise provided by this
22Article.
23    (f) Prior to October 1, 1989, no public utility providing
24electrical or gas service shall consider the use of solar or
25other nonconventional renewable sources of energy by a
26customer as a basis for establishing higher rates or charges

 

 

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1for any service or commodity sold to such customer; nor shall a
2public utility subject any customer utilizing such energy
3source or sources to any other prejudice or disadvantage on
4account of such use. No public utility shall without the
5consent of the Commission, charge or receive any greater
6compensation in the aggregate for a lesser commodity, product,
7or service than for a greater commodity, product or service of
8like character.
9    The Commission, in order to expedite the determination of
10rate questions, or to avoid unnecessary and unreasonable
11expense, or to avoid unjust or unreasonable discrimination
12between classes of customers, or, whenever in the judgment of
13the Commission public interest so requires, may, for rate
14making and accounting purposes, or either of them, consider
15one or more municipalities either with or without the adjacent
16or intervening rural territory as a regional unit where the
17same public utility serves such region under substantially
18similar conditions, and may within such region prescribe
19uniform rates for consumers or patrons of the same class.
20    Any public utility, with the consent and approval of the
21Commission, may as a basis for the determination of the
22charges made by it classify its service according to the
23amount used, the time when used, the purpose for which used,
24and other relevant factors.
25(Source: P.A. 102-662, eff. 9-15-21.)
 

 

 

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1    (220 ILCS 5/16-108.5)
2    Sec. 16-108.5. Infrastructure investment and
3modernization; regulatory reform.
4    (a) (Blank).
5    (b) For purposes of this Section, "participating utility"
6means an electric utility or a combination utility serving
7more than 1,000,000 customers in Illinois that voluntarily
8elects and commits to undertake (i) the infrastructure
9investment program consisting of the commitments and
10obligations described in this subsection (b) and (ii) the
11customer assistance program consisting of the commitments and
12obligations described in subsection (b-10) of this Section,
13notwithstanding any other provisions of this Act and without
14obtaining any approvals from the Commission or any other
15agency other than as set forth in this Section, regardless of
16whether any such approval would otherwise be required.
17"Combination utility" means a utility that, as of January 1,
182011, provided electric service to at least one million retail
19customers in Illinois and gas service to at least 500,000
20retail customers in Illinois. A participating utility shall
21recover the expenditures made under the infrastructure
22investment program through the ratemaking process, including,
23but not limited to, the performance-based formula rate and
24process set forth in this Section.
25    During the infrastructure investment program's peak
26program year, a participating utility other than a combination

 

 

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1utility shall create 2,000 full-time equivalent jobs in
2Illinois, and a participating utility that is a combination
3utility shall create 450 full-time equivalent jobs in Illinois
4related to the provision of electric service. These jobs shall
5include direct jobs, contractor positions, and induced jobs,
6but shall not include any portion of a job commitment, not
7specifically contingent on an amendatory Act of the 97th
8General Assembly becoming law, between a participating utility
9and a labor union that existed on December 30, 2011 (the
10effective date of Public Act 97-646) and that has not yet been
11fulfilled. A portion of the full-time equivalent jobs created
12by each participating utility shall include incremental
13personnel hired subsequent to December 30, 2011 (the effective
14date of Public Act 97-646). For purposes of this Section,
15"peak program year" means the consecutive 12-month period with
16the highest number of full-time equivalent jobs that occurs
17between the beginning of investment year 2 and the end of
18investment year 4.
19    A participating utility shall meet one of the following
20commitments, as applicable:
21        (1) Beginning no later than 180 days after a
22    participating utility other than a combination utility
23    files a performance-based formula rate tariff pursuant to
24    subsection (c) of this Section, or, beginning no later
25    than January 1, 2012 if such utility files such
26    performance-based formula rate tariff within 14 days of

 

 

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1    October 26, 2011 (the effective date of Public Act
2    97-616), the participating utility shall, except as
3    provided in subsection (b-5):
4            (A) over a 5-year period, invest an estimated
5        $1,300,000,000 in electric system upgrades,
6        modernization projects, and training facilities,
7        including, but not limited to:
8                (i) distribution infrastructure improvements
9            totaling an estimated $1,000,000,000, including
10            underground residential distribution cable
11            injection and replacement and mainline cable
12            system refurbishment and replacement projects;
13                (ii) training facility construction or upgrade
14            projects totaling an estimated $10,000,000,
15            provided that, at a minimum, one such facility
16            shall be located in a municipality having a
17            population of more than 2 million residents and
18            one such facility shall be located in a
19            municipality having a population of more than
20            150,000 residents but fewer than 170,000
21            residents; any such new facility located in a
22            municipality having a population of more than 2
23            million residents must be designed for the purpose
24            of obtaining, and the owner of the facility shall
25            apply for, certification under the United States
26            Green Building Council's Leadership in Energy

 

 

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1            Efficiency Design Green Building Rating System;
2                (iii) wood pole inspection, treatment, and
3            replacement programs;
4                (iv) an estimated $200,000,000 for reducing
5            the susceptibility of certain circuits to
6            storm-related damage, including, but not limited
7            to, high winds, thunderstorms, and ice storms;
8            improvements may include, but are not limited to,
9            overhead to underground conversion and other
10            engineered outcomes for circuits; the
11            participating utility shall prioritize the
12            selection of circuits based on each circuit's
13            historical susceptibility to storm-related damage
14            and the ability to provide the greatest customer
15            benefit upon completion of the improvements; to be
16            eligible for improvement, the participating
17            utility's ability to maintain proper tree
18            clearances surrounding the overhead circuit must
19            not have been impeded by third parties; and
20            (B) over a 10-year period, invest an estimated
21        $1,300,000,000 to upgrade and modernize its
22        transmission and distribution infrastructure and in
23        Smart Grid electric system upgrades, including, but
24        not limited to:
25                (i) additional smart meters;
26                (ii) distribution automation;

 

 

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1                (iii) associated cyber secure data
2            communication network; and
3                (iv) substation micro-processor relay
4            upgrades.
5        (2) Beginning no later than 180 days after a
6    participating utility that is a combination utility files
7    a performance-based formula rate tariff pursuant to
8    subsection (c) of this Section, or, beginning no later
9    than January 1, 2012 if such utility files such
10    performance-based formula rate tariff within 14 days of
11    October 26, 2011 (the effective date of Public Act
12    97-616), the participating utility shall, except as
13    provided in subsection (b-5):
14            (A) over a 10-year period, invest an estimated
15        $265,000,000 in electric system upgrades,
16        modernization projects, and training facilities,
17        including, but not limited to:
18                (i) distribution infrastructure improvements
19            totaling an estimated $245,000,000, which may
20            include bulk supply substations, transformers,
21            reconductoring, and rebuilding overhead
22            distribution and sub-transmission lines,
23            underground residential distribution cable
24            injection and replacement and mainline cable
25            system refurbishment and replacement projects;
26                (ii) training facility construction or upgrade

 

 

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1            projects totaling an estimated $1,000,000; any
2            such new facility must be designed for the purpose
3            of obtaining, and the owner of the facility shall
4            apply for, certification under the United States
5            Green Building Council's Leadership in Energy
6            Efficiency Design Green Building Rating System;
7            and
8                (iii) wood pole inspection, treatment, and
9            replacement programs; and
10            (B) over a 10-year period, invest an estimated
11        $360,000,000 to upgrade and modernize its transmission
12        and distribution infrastructure and in Smart Grid
13        electric system upgrades, including, but not limited
14        to:
15                (i) additional smart meters;
16                (ii) distribution automation;
17                (iii) associated cyber secure data
18            communication network; and
19                (iv) substation micro-processor relay
20            upgrades.
21    For purposes of this Section, "Smart Grid electric system
22upgrades" shall have the meaning set forth in subsection (a)
23of Section 16-108.6 of this Act.
24    The investments in the infrastructure investment program
25described in this subsection (b) shall be incremental to the
26participating utility's annual capital investment program, as

 

 

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1defined by, for purposes of this subsection (b), the
2participating utility's average capital spend for calendar
3years 2008, 2009, and 2010 as reported in the applicable
4Federal Energy Regulatory Commission (FERC) Form 1; provided
5that where one or more utilities have merged, the average
6capital spend shall be determined using the aggregate of the
7merged utilities' capital spend reported in FERC Form 1 for
8the years 2008, 2009, and 2010. A participating utility may
9add reasonable construction ramp-up and ramp-down time to the
10investment periods specified in this subsection (b). For each
11such investment period, the ramp-up and ramp-down time shall
12not exceed a total of 6 months.
13    Within 60 days after filing a tariff under subsection (c)
14of this Section, a participating utility shall submit to the
15Commission its plan, including scope, schedule, and staffing,
16for satisfying its infrastructure investment program
17commitments pursuant to this subsection (b). The submitted
18plan shall include a schedule and staffing plan for the next
19calendar year. The plan shall also include a plan for the
20creation, operation, and administration of a Smart Grid test
21bed as described in subsection (c) of Section 16-108.8. The
22plan need not allocate the work equally over the respective
23periods, but should allocate material increments throughout
24such periods commensurate with the work to be undertaken. No
25later than April 1 of each subsequent year, the utility shall
26submit to the Commission a report that includes any updates to

 

 

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1the plan, a schedule for the next calendar year, the
2expenditures made for the prior calendar year and
3cumulatively, and the number of full-time equivalent jobs
4created for the prior calendar year and cumulatively. If the
5utility is materially deficient in satisfying a schedule or
6staffing plan, then the report must also include a corrective
7action plan to address the deficiency. The fact that the plan,
8implementation of the plan, or a schedule changes shall not
9imply the imprudence or unreasonableness of the infrastructure
10investment program, plan, or schedule. Further, no later than
1145 days following the last day of the first, second, and third
12quarters of each year of the plan, a participating utility
13shall submit to the Commission a verified quarterly report for
14the prior quarter that includes (i) the total number of
15full-time equivalent jobs created during the prior quarter,
16(ii) the total number of employees as of the last day of the
17prior quarter, (iii) the total number of full-time equivalent
18hours in each job classification or job title, (iv) the total
19number of incremental employees and contractors in support of
20the investments undertaken pursuant to this subsection (b) for
21the prior quarter, and (v) any other information that the
22Commission may require by rule.
23    With respect to the participating utility's peak job
24commitment, if, after considering the utility's corrective
25action plan and compliance thereunder, the Commission enters
26an order finding, after notice and hearing, that a

 

 

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1participating utility did not satisfy its peak job commitment
2described in this subsection (b) for reasons that are
3reasonably within its control, then the Commission shall also
4determine, after consideration of the evidence, including, but
5not limited to, evidence submitted by the Department of
6Commerce and Economic Opportunity and the utility, the
7deficiency in the number of full-time equivalent jobs during
8the peak program year due to such failure. The Commission
9shall notify the Department of any proceeding that is
10initiated pursuant to this paragraph. For each full-time
11equivalent job deficiency during the peak program year that
12the Commission finds as set forth in this paragraph, the
13participating utility shall, within 30 days after the entry of
14the Commission's order, pay $6,000 to a fund for training
15grants administered under Section 605-800 of the Department of
16Commerce and Economic Opportunity Law, which shall not be a
17recoverable expense.
18    With respect to the participating utility's investment
19amount commitments, if, after considering the utility's
20corrective action plan and compliance thereunder, the
21Commission enters an order finding, after notice and hearing,
22that a participating utility is not satisfying its investment
23amount commitments described in this subsection (b), then the
24utility shall no longer be eligible to annually update the
25performance-based formula rate tariff pursuant to subsection
26(d) of this Section. In such event, the then current rates

 

 

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1shall remain in effect until such time as new rates are set
2pursuant to Article IX of this Act, subject to retroactive
3adjustment, with interest, to reconcile rates charged with
4actual costs.
5    If the Commission finds that a participating utility is no
6longer eligible to update the performance-based formula rate
7tariff pursuant to subsection (d) of this Section, or the
8performance-based formula rate is otherwise terminated, then
9the participating utility's voluntary commitments and
10obligations under this subsection (b) shall immediately
11terminate, except for the utility's obligation to pay an
12amount already owed to the fund for training grants pursuant
13to a Commission order.
14    In meeting the obligations of this subsection (b), to the
15extent feasible and consistent with State and federal law, the
16investments under the infrastructure investment program should
17provide employment opportunities for all segments of the
18population and workforce, including minority-owned and
19female-owned business enterprises, and shall not, consistent
20with State and federal law, discriminate based on race or
21socioeconomic status.
22    (b-5) Nothing in this Section shall prohibit the
23Commission from investigating the prudence and reasonableness
24of the expenditures made under the infrastructure investment
25program during the annual review required by subsection (d) of
26this Section and shall, as part of such investigation,

 

 

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1determine whether the utility's actual costs under the program
2are prudent and reasonable. The fact that a participating
3utility invests more than the minimum amounts specified in
4subsection (b) of this Section or its plan shall not imply
5imprudence or unreasonableness.
6    If the participating utility finds that it is implementing
7its plan for satisfying the infrastructure investment program
8commitments described in subsection (b) of this Section at a
9cost below the estimated amounts specified in subsection (b)
10of this Section, then the utility may file a petition with the
11Commission requesting that it be permitted to satisfy its
12commitments by spending less than the estimated amounts
13specified in subsection (b) of this Section. The Commission
14shall, after notice and hearing, enter its order approving, or
15approving as modified, or denying each such petition within
16150 days after the filing of the petition.
17    In no event, absent General Assembly approval, shall the
18capital investment costs incurred by a participating utility
19other than a combination utility in satisfying its
20infrastructure investment program commitments described in
21subsection (b) of this Section exceed $3,000,000,000 or, for a
22participating utility that is a combination utility,
23$720,000,000. If the participating utility's updated cost
24estimates for satisfying its infrastructure investment program
25commitments described in subsection (b) of this Section exceed
26the limitation imposed by this subsection (b-5), then it shall

 

 

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1submit a report to the Commission that identifies the
2increased costs and explains the reason or reasons for the
3increased costs no later than the year in which the utility
4estimates it will exceed the limitation. The Commission shall
5review the report and shall, within 90 days after the
6participating utility files the report, report to the General
7Assembly its findings regarding the participating utility's
8report. If the General Assembly does not amend the limitation
9imposed by this subsection (b-5), then the utility may modify
10its plan so as not to exceed the limitation imposed by this
11subsection (b-5) and may propose corresponding changes to the
12metrics established pursuant to subparagraphs (5) through (8)
13of subsection (f) of this Section, and the Commission may
14modify the metrics and incremental savings goals established
15pursuant to subsection (f) of this Section accordingly.
16    (b-10) All participating utilities shall make
17contributions for an energy low-income and support program in
18accordance with this subsection. Beginning no later than 180
19days after a participating utility files a performance-based
20formula rate tariff pursuant to subsection (c) of this
21Section, or beginning no later than January 1, 2012 if such
22utility files such performance-based formula rate tariff
23within 14 days of December 30, 2011 (the effective date of
24Public Act 97-646), and without obtaining any approvals from
25the Commission or any other agency other than as set forth in
26this Section, regardless of whether any such approval would

 

 

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1otherwise be required, a participating utility other than a
2combination utility shall pay $10,000,000 per year for 5 years
3and a participating utility that is a combination utility
4shall pay $1,000,000 per year for 10 years to the energy
5low-income and support program, which is intended to fund
6customer assistance programs with the primary purpose being
7avoidance of imminent disconnection. Such programs may
8include:
9        (1) a residential hardship program that may partner
10    with community-based organizations, including senior
11    citizen organizations, and provides grants to low-income
12    residential customers, including low-income senior
13    citizens, who demonstrate a hardship;
14        (2) a program that provides grants and other bill
15    payment concessions to veterans with disabilities who
16    demonstrate a hardship and members of the armed services
17    or reserve forces of the United States or members of the
18    Illinois National Guard who are on active duty pursuant to
19    an executive order of the President of the United States,
20    an act of the Congress of the United States, or an order of
21    the Governor and who demonstrate a hardship;
22        (3) a budget assistance program that provides tools
23    and education to low-income senior citizens to assist them
24    with obtaining information regarding energy usage and
25    effective means of managing energy costs;
26        (4) a non-residential special hardship program that

 

 

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1    provides grants to non-residential customers such as small
2    businesses and non-profit organizations that demonstrate a
3    hardship, including those providing services to senior
4    citizen and low-income customers; and
5        (5) a performance-based assistance program that
6    provides grants to encourage residential customers to make
7    on-time payments by matching a portion of the customer's
8    payments or providing credits towards arrearages.
9    The payments made by a participating utility pursuant to
10this subsection (b-10) shall not be a recoverable expense. A
11participating utility may elect to fund either new or existing
12customer assistance programs, including, but not limited to,
13those that are administered by the utility.
14    Programs that use funds that are provided by a
15participating utility to reduce utility bills may be
16implemented through tariffs that are filed with and reviewed
17by the Commission. If a utility elects to file tariffs with the
18Commission to implement all or a portion of the programs,
19those tariffs shall, regardless of the date actually filed, be
20deemed accepted and approved, and shall become effective on
21December 30, 2011 (the effective date of Public Act 97-646).
22The participating utilities whose customers benefit from the
23funds that are disbursed as contemplated in this Section shall
24file annual reports documenting the disbursement of those
25funds with the Commission. The Commission has the authority to
26audit disbursement of the funds to ensure they were disbursed

 

 

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1consistently with this Section.
2    If the Commission finds that a participating utility is no
3longer eligible to update the performance-based formula rate
4tariff pursuant to subsection (d) of this Section, or the
5performance-based formula rate is otherwise terminated, then
6the participating utility's voluntary commitments and
7obligations under this subsection (b-10) shall immediately
8terminate.
9    (c) A participating utility may elect to recover its
10delivery services costs through a performance-based formula
11rate approved by the Commission, which shall specify the cost
12components that form the basis of the rate charged to
13customers with sufficient specificity to operate in a
14standardized manner and be updated annually with transparent
15information that reflects the utility's actual costs to be
16recovered during the applicable rate year, which is the period
17beginning with the first billing day of January and extending
18through the last billing day of the following December. In the
19event the utility recovers a portion of its costs through
20automatic adjustment clause tariffs on October 26, 2011 (the
21effective date of Public Act 97-616), the utility may elect to
22continue to recover these costs through such tariffs, but then
23these costs shall not be recovered through the
24performance-based formula rate. In the event the participating
25utility, prior to December 30, 2011 (the effective date of
26Public Act 97-646), filed electric delivery services tariffs

 

 

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1with the Commission pursuant to Section 9-201 of this Act that
2are related to the recovery of its electric delivery services
3costs that are still pending on December 30, 2011 (the
4effective date of Public Act 97-646), the participating
5utility shall, at the time it files its performance-based
6formula rate tariff with the Commission, also file a notice of
7withdrawal with the Commission to withdraw the electric
8delivery services tariffs previously filed pursuant to Section
99-201 of this Act. Upon receipt of such notice, the Commission
10shall dismiss with prejudice any docket that had been
11initiated to investigate the electric delivery services
12tariffs filed pursuant to Section 9-201 of this Act, and such
13tariffs and the record related thereto shall not be the
14subject of any further hearing, investigation, or proceeding
15of any kind related to rates for electric delivery services.
16    The performance-based formula rate shall be implemented
17through a tariff filed with the Commission consistent with the
18provisions of this subsection (c) that shall be applicable to
19all delivery services customers. The Commission shall initiate
20and conduct an investigation of the tariff in a manner
21consistent with the provisions of this subsection (c) and the
22provisions of Article IX of this Act to the extent they do not
23conflict with this subsection (c). Except in the case where
24the Commission finds, after notice and hearing, that a
25participating utility is not satisfying its investment amount
26commitments under subsection (b) of this Section, the

 

 

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1performance-based formula rate shall remain in effect at the
2discretion of the utility. The performance-based formula rate
3approved by the Commission shall do the following:
4        (1) Provide for the recovery of the utility's actual
5    costs of delivery services that are prudently incurred and
6    reasonable in amount consistent with Commission practice
7    and law. The sole fact that a cost differs from that
8    incurred in a prior calendar year or that an investment is
9    different from that made in a prior calendar year shall
10    not imply the imprudence or unreasonableness of that cost
11    or investment.
12        (2) Reflect the utility's actual year-end capital
13    structure for the applicable calendar year, excluding
14    goodwill, subject to a determination of prudence and
15    reasonableness consistent with Commission practice and
16    law. To enable the financing of the incremental capital
17    expenditures, including regulatory assets, for electric
18    utilities that serve less than 3,000,000 retail customers
19    but more than 500,000 retail customers in the State, a
20    participating electric utility's actual year-end capital
21    structure that includes a common equity ratio, excluding
22    goodwill, of up to and including 50% of the total capital
23    structure shall be deemed reasonable and used to set
24    rates.
25        (3) Include a cost of equity, which shall be
26    calculated as the sum of the following:

 

 

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1            (A) the average for the applicable calendar year
2        of the monthly average yields of 30-year U.S. Treasury
3        bonds published by the Board of Governors of the
4        Federal Reserve System in its weekly H.15 Statistical
5        Release or successor publication; and
6            (B) 580 basis points.
7        At such time as the Board of Governors of the Federal
8    Reserve System ceases to include the monthly average
9    yields of 30-year U.S. Treasury bonds in its weekly H.15
10    Statistical Release or successor publication, the monthly
11    average yields of the U.S. Treasury bonds then having the
12    longest duration published by the Board of Governors in
13    its weekly H.15 Statistical Release or successor
14    publication shall instead be used for purposes of this
15    paragraph (3).
16        (4) Permit and set forth protocols, subject to a
17    determination of prudence and reasonableness consistent
18    with Commission practice and law, for the following:
19            (A) recovery of incentive compensation expense
20        that is based on the achievement of operational
21        metrics, including metrics related to budget controls,
22        outage duration and frequency, safety, customer
23        service, efficiency and productivity, and
24        environmental compliance. Incentive compensation
25        expense that is based on net income or an affiliate's
26        earnings per share shall not be recoverable under the

 

 

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1        performance-based formula rate;
2            (B) recovery of pension and other post-employment
3        benefits expense, provided that such costs are
4        supported by an actuarial study;
5            (C) recovery of severance costs, provided that if
6        the amount is over $3,700,000 for a participating
7        utility that is a combination utility or $10,000,000
8        for a participating utility that serves more than 3
9        million retail customers, then the full amount shall
10        be amortized consistent with subparagraph (F) of this
11        paragraph (4);
12            (D) investment return at a rate equal to the
13        utility's weighted average cost of long-term debt, on
14        the pension assets as, and in the amount, reported in
15        Account 186 (or in such other Account or Accounts as
16        such asset may subsequently be recorded) of the
17        utility's most recently filed FERC Form 1, net of
18        deferred tax benefits;
19            (E) recovery of the expenses related to the
20        Commission proceeding under this subsection (c) to
21        approve this performance-based formula rate and
22        initial rates or to subsequent proceedings related to
23        the formula, provided that the recovery shall be
24        amortized over a 3-year period; recovery of expenses
25        related to the annual Commission proceedings under
26        subsection (d) of this Section to review the inputs to

 

 

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1        the performance-based formula rate shall be expensed
2        and recovered through the performance-based formula
3        rate;
4            (F) amortization over a 5-year period of the full
5        amount of each charge or credit that exceeds
6        $3,700,000 for a participating utility that is a
7        combination utility or $10,000,000 for a participating
8        utility that serves more than 3 million retail
9        customers in the applicable calendar year and that
10        relates to a workforce reduction program's severance
11        costs, changes in accounting rules, changes in law,
12        compliance with any Commission-initiated audit, or a
13        single storm or other similar expense, provided that
14        any unamortized balance shall be reflected in the rate
15        base. For purposes of this subparagraph (F), changes
16        in law includes any enactment, repeal, or amendment in
17        a law, ordinance, rule, regulation, interpretation,
18        permit, license, consent, or order, including those
19        relating to taxes, accounting, or to environmental
20        matters, or in the interpretation or application
21        thereof by any governmental authority occurring after
22        October 26, 2011 (the effective date of Public Act
23        97-616);
24            (G) recovery of existing regulatory assets over
25        the periods previously authorized by the Commission;
26            (H) historical weather normalized billing

 

 

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1        determinants; and
2            (I) allocation methods for common costs.
3        (5) Provide that if the participating utility's earned
4    rate of return on common equity related to the provision
5    of delivery services for the prior rate year (calculated
6    using costs and capital structure approved by the
7    Commission as provided in subparagraph (2) of this
8    subsection (c), consistent with this Section, in
9    accordance with Commission rules and orders, including,
10    but not limited to, adjustments for goodwill, and after
11    any Commission-ordered disallowances and taxes) is more
12    than 50 basis points higher than the rate of return on
13    common equity calculated pursuant to paragraph (3) of this
14    subsection (c) (after adjusting for any penalties to the
15    rate of return on common equity applied pursuant to the
16    performance metrics provision of subsection (f) of this
17    Section), then the participating utility shall apply a
18    credit through the performance-based formula rate that
19    reflects an amount equal to the value of that portion of
20    the earned rate of return on common equity that is more
21    than 50 basis points higher than the rate of return on
22    common equity calculated pursuant to paragraph (3) of this
23    subsection (c) (after adjusting for any penalties to the
24    rate of return on common equity applied pursuant to the
25    performance metrics provision of subsection (f) of this
26    Section) for the prior rate year, adjusted for taxes. If

 

 

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1    the participating utility's earned rate of return on
2    common equity related to the provision of delivery
3    services for the prior rate year (calculated using costs
4    and capital structure approved by the Commission as
5    provided in subparagraph (2) of this subsection (c),
6    consistent with this Section, in accordance with
7    Commission rules and orders, including, but not limited
8    to, adjustments for goodwill, and after any
9    Commission-ordered disallowances and taxes) is more than
10    50 basis points less than the return on common equity
11    calculated pursuant to paragraph (3) of this subsection
12    (c) (after adjusting for any penalties to the rate of
13    return on common equity applied pursuant to the
14    performance metrics provision of subsection (f) of this
15    Section), then the participating utility shall apply a
16    charge through the performance-based formula rate that
17    reflects an amount equal to the value of that portion of
18    the earned rate of return on common equity that is more
19    than 50 basis points less than the rate of return on common
20    equity calculated pursuant to paragraph (3) of this
21    subsection (c) (after adjusting for any penalties to the
22    rate of return on common equity applied pursuant to the
23    performance metrics provision of subsection (f) of this
24    Section) for the prior rate year, adjusted for taxes.
25        (6) Provide for an annual reconciliation, as described
26    in subsection (d) of this Section, with interest, of the

 

 

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1    revenue requirement reflected in rates for each calendar
2    year, beginning with the calendar year in which the
3    utility files its performance-based formula rate tariff
4    pursuant to subsection (c) of this Section, with what the
5    revenue requirement would have been had the actual cost
6    information for the applicable calendar year been
7    available at the filing date.
8    The utility shall file, together with its tariff, final
9data based on its most recently filed FERC Form 1, plus
10projected plant additions and correspondingly updated
11depreciation reserve and expense for the calendar year in
12which the tariff and data are filed, that shall populate the
13performance-based formula rate and set the initial delivery
14services rates under the formula. For purposes of this
15Section, "FERC Form 1" means the Annual Report of Major
16Electric Utilities, Licensees and Others that electric
17utilities are required to file with the Federal Energy
18Regulatory Commission under the Federal Power Act, Sections 3,
194(a), 304 and 209, modified as necessary to be consistent with
2083 Ill. Adm. Code Part 415 as of May 1, 2011. Nothing in this
21Section is intended to allow costs that are not otherwise
22recoverable to be recoverable by virtue of inclusion in FERC
23Form 1.
24    After the utility files its proposed performance-based
25formula rate structure and protocols and initial rates, the
26Commission shall initiate a docket to review the filing. The

 

 

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1Commission shall enter an order approving, or approving as
2modified, the performance-based formula rate, including the
3initial rates, as just and reasonable within 270 days after
4the date on which the tariff was filed, or, if the tariff is
5filed within 14 days after October 26, 2011 (the effective
6date of Public Act 97-616), then by May 31, 2012. Such review
7shall be based on the same evidentiary standards, including,
8but not limited to, those concerning the prudence and
9reasonableness of the costs incurred by the utility, the
10Commission applies in a hearing to review a filing for a
11general increase in rates under Article IX of this Act. The
12initial rates shall take effect within 30 days after the
13Commission's order approving the performance-based formula
14rate tariff.
15    Until such time as the Commission approves a different
16rate design and cost allocation pursuant to subsection (e) of
17this Section, rate design and cost allocation across customer
18classes shall be consistent with the Commission's most recent
19order regarding the participating utility's request for a
20general increase in its delivery services rates.
21    Subsequent changes to the performance-based formula rate
22structure or protocols shall be made as set forth in Section
239-201 of this Act, but nothing in this subsection (c) is
24intended to limit the Commission's authority under Article IX
25and other provisions of this Act to initiate an investigation
26of a participating utility's performance-based formula rate

 

 

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1tariff, provided that any such changes shall be consistent
2with paragraphs (1) through (6) of this subsection (c). Any
3change ordered by the Commission shall be made at the same time
4new rates take effect following the Commission's next order
5pursuant to subsection (d) of this Section, provided that the
6new rates take effect no less than 30 days after the date on
7which the Commission issues an order adopting the change.
8    A participating utility that files a tariff pursuant to
9this subsection (c) must submit a one-time $200,000 filing fee
10at the time the Chief Clerk of the Commission accepts the
11filing, which shall be a recoverable expense.
12    In the event the performance-based formula rate is
13terminated, the then current rates shall remain in effect
14until such time as new rates are set pursuant to Article IX of
15this Act, subject to retroactive rate adjustment, with
16interest, to reconcile rates charged with actual costs. At
17such time that the performance-based formula rate is
18terminated, the participating utility's voluntary commitments
19and obligations under subsection (b) of this Section shall
20immediately terminate, except for the utility's obligation to
21pay an amount already owed to the fund for training grants
22pursuant to a Commission order issued under subsection (b) of
23this Section.
24    (d) Subsequent to the Commission's issuance of an order
25approving the utility's performance-based formula rate
26structure and protocols, and initial rates under subsection

 

 

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1(c) of this Section, the utility shall file, on or before May 1
2of each year, with the Chief Clerk of the Commission its
3updated cost inputs to the performance-based formula rate for
4the applicable rate year and the corresponding new charges.
5Each such filing shall conform to the following requirements
6and include the following information:
7        (1) The inputs to the performance-based formula rate
8    for the applicable rate year shall be based on final
9    historical data reflected in the utility's most recently
10    filed annual FERC Form 1 plus projected plant additions
11    and correspondingly updated depreciation reserve and
12    expense for the calendar year in which the inputs are
13    filed. The filing shall also include a reconciliation of
14    the revenue requirement that was in effect for the prior
15    rate year (as set by the cost inputs for the prior rate
16    year) with the actual revenue requirement for the prior
17    rate year (determined using a year-end rate base) that
18    uses amounts reflected in the applicable FERC Form 1 that
19    reports the actual costs for the prior rate year. Any
20    over-collection or under-collection indicated by such
21    reconciliation shall be reflected as a credit against, or
22    recovered as an additional charge to, respectively, with
23    interest calculated at a rate equal to the utility's
24    weighted average cost of capital approved by the
25    Commission for the prior rate year, the charges for the
26    applicable rate year. Provided, however, that the first

 

 

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1    such reconciliation shall be for the calendar year in
2    which the utility files its performance-based formula rate
3    tariff pursuant to subsection (c) of this Section and
4    shall reconcile (i) the revenue requirement or
5    requirements established by the rate order or orders in
6    effect from time to time during such calendar year
7    (weighted, as applicable) with (ii) the revenue
8    requirement determined using a year-end rate base for that
9    calendar year calculated pursuant to the performance-based
10    formula rate using (A) actual costs for that year as
11    reflected in the applicable FERC Form 1, and (B) for the
12    first such reconciliation only, the cost of equity, which
13    shall be calculated as the sum of 590 basis points plus the
14    average for the applicable calendar year of the monthly
15    average yields of 30-year U.S. Treasury bonds published by
16    the Board of Governors of the Federal Reserve System in
17    its weekly H.15 Statistical Release or successor
18    publication. The first such reconciliation is not intended
19    to provide for the recovery of costs previously excluded
20    from rates based on a prior Commission order finding of
21    imprudence or unreasonableness. Each reconciliation shall
22    be certified by the participating utility in the same
23    manner that FERC Form 1 is certified. The filing shall
24    also include the charge or credit, if any, resulting from
25    the calculation required by paragraph (6) of subsection
26    (c) of this Section.

 

 

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1        Notwithstanding anything that may be to the contrary,
2    the intent of the reconciliation is to ultimately
3    reconcile the revenue requirement reflected in rates for
4    each calendar year, beginning with the calendar year in
5    which the utility files its performance-based formula rate
6    tariff pursuant to subsection (c) of this Section, with
7    what the revenue requirement determined using a year-end
8    rate base for the applicable calendar year would have been
9    had the actual cost information for the applicable
10    calendar year been available at the filing date.
11        (2) The new charges shall take effect beginning on the
12    first billing day of the following January billing period
13    and remain in effect through the last billing day of the
14    next December billing period regardless of whether the
15    Commission enters upon a hearing pursuant to this
16    subsection (d).
17        (3) The filing shall include relevant and necessary
18    data and documentation for the applicable rate year that
19    is consistent with the Commission's rules applicable to a
20    filing for a general increase in rates or any rules
21    adopted by the Commission to implement this Section.
22    Normalization adjustments shall not be required.
23    Notwithstanding any other provision of this Section or Act
24    or any rule or other requirement adopted by the
25    Commission, a participating utility that is a combination
26    utility with more than one rate zone shall not be required

 

 

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1    to file a separate set of such data and documentation for
2    each rate zone and may combine such data and documentation
3    into a single set of schedules.
4    Within 45 days after the utility files its annual update
5of cost inputs to the performance-based formula rate, the
6Commission shall have the authority, either upon complaint or
7its own initiative, but with reasonable notice, to enter upon
8a hearing concerning the prudence and reasonableness of the
9costs incurred by the utility to be recovered during the
10applicable rate year that are reflected in the inputs to the
11performance-based formula rate derived from the utility's FERC
12Form 1. During the course of the hearing, each objection shall
13be stated with particularity and evidence provided in support
14thereof, after which the utility shall have the opportunity to
15rebut the evidence. Discovery shall be allowed consistent with
16the Commission's Rules of Practice, which Rules shall be
17enforced by the Commission or the assigned administrative law
18judge. The Commission shall apply the same evidentiary
19standards, including, but not limited to, those concerning the
20prudence and reasonableness of the costs incurred by the
21utility, in the hearing as it would apply in a hearing to
22review a filing for a general increase in rates under Article
23IX of this Act. The Commission shall not, however, have the
24authority in a proceeding under this subsection (d) to
25consider or order any changes to the structure or protocols of
26the performance-based formula rate approved pursuant to

 

 

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1subsection (c) of this Section. In a proceeding under this
2subsection (d), the Commission shall enter its order no later
3than the earlier of 240 days after the utility's filing of its
4annual update of cost inputs to the performance-based formula
5rate or December 31. The Commission's determinations of the
6prudence and reasonableness of the costs incurred for the
7applicable calendar year shall be final upon entry of the
8Commission's order and shall not be subject to reopening,
9reexamination, or collateral attack in any other Commission
10proceeding, case, docket, order, rule or regulation, provided,
11however, that nothing in this subsection (d) shall prohibit a
12party from petitioning the Commission to rehear or appeal to
13the courts the order pursuant to the provisions of this Act.
14    In the event the Commission does not, either upon
15complaint or its own initiative, enter upon a hearing within
1645 days after the utility files the annual update of cost
17inputs to its performance-based formula rate, then the costs
18incurred for the applicable calendar year shall be deemed
19prudent and reasonable, and the filed charges shall not be
20subject to reopening, reexamination, or collateral attack in
21any other proceeding, case, docket, order, rule, or
22regulation.
23    A participating utility's first filing of the updated cost
24inputs, and any Commission investigation of such inputs
25pursuant to this subsection (d) shall proceed notwithstanding
26the fact that the Commission's investigation under subsection

 

 

HB4661 Engrossed- 35 -LRB103 37733 SPS 67860 b

1(c) of this Section is still pending and notwithstanding any
2other law, order, rule, or Commission practice to the
3contrary.
4    (e) Nothing in subsections (c) or (d) of this Section
5shall prohibit the Commission from investigating, or a
6participating utility from filing, revenue-neutral tariff
7changes related to rate design of a performance-based formula
8rate that has been placed into effect for the utility.
9Following approval of a participating utility's
10performance-based formula rate tariff pursuant to subsection
11(c) of this Section, the utility shall make a filing with the
12Commission within one year after the effective date of the
13performance-based formula rate tariff that proposes changes to
14the tariff to incorporate the findings of any final rate
15design orders of the Commission applicable to the
16participating utility and entered subsequent to the
17Commission's approval of the tariff. The Commission shall,
18after notice and hearing, enter its order approving, or
19approving with modification, the proposed changes to the
20performance-based formula rate tariff within 240 days after
21the utility's filing. Following such approval, the utility
22shall make a filing with the Commission during each subsequent
233-year period that either proposes revenue-neutral tariff
24changes or re-files the existing tariffs without change, which
25shall present the Commission with an opportunity to suspend
26the tariffs and consider revenue-neutral tariff changes

 

 

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1related to rate design.
2    (f) Within 30 days after the filing of a tariff pursuant to
3subsection (c) of this Section, each participating utility
4shall develop and file with the Commission multi-year metrics
5designed to achieve, ratably (i.e., in equal segments) over a
610-year period, improvement over baseline performance values
7as follows:
8        (1) Twenty percent improvement in the System Average
9    Interruption Frequency Index, using a baseline of the
10    average of the data from 2001 through 2010.
11        (2) Fifteen percent improvement in the system Customer
12    Average Interruption Duration Index, using a baseline of
13    the average of the data from 2001 through 2010.
14        (3) For a participating utility other than a
15    combination utility, 20% improvement in the System Average
16    Interruption Frequency Index for its Southern Region,
17    using a baseline of the average of the data from 2001
18    through 2010. For purposes of this paragraph (3), Southern
19    Region shall have the meaning set forth in the
20    participating utility's most recent report filed pursuant
21    to Section 16-125 of this Act.
22        (3.5) For a participating utility other than a
23    combination utility, 20% improvement in the System Average
24    Interruption Frequency Index for its Northeastern Region,
25    using a baseline of the average of the data from 2001
26    through 2010. For purposes of this paragraph (3.5),

 

 

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1    Northeastern Region shall have the meaning set forth in
2    the participating utility's most recent report filed
3    pursuant to Section 16-125 of this Act.
4        (4) Seventy-five percent improvement in the total
5    number of customers who exceed the service reliability
6    targets as set forth in subparagraphs (A) through (C) of
7    paragraph (4) of subsection (b) of 83 Ill. Adm. Code
8    411.140 as of May 1, 2011, using 2010 as the baseline year.
9        (5) Reduction in issuance of estimated electric bills:
10    90% improvement for a participating utility other than a
11    combination utility, and 56% improvement for a
12    participating utility that is a combination utility, using
13    a baseline of the average number of estimated bills for
14    the years 2008 through 2010.
15        (6) Consumption on inactive meters: 90% improvement
16    for a participating utility other than a combination
17    utility, and 56% improvement for a participating utility
18    that is a combination utility, using a baseline of the
19    average unbilled kilowatthours for the years 2009 and
20    2010.
21        (7) Unaccounted for energy: 50% improvement for a
22    participating utility other than a combination utility
23    using a baseline of the non-technical line loss
24    unaccounted for energy kilowatthours for the year 2009.
25        (8) Uncollectible expense: reduce uncollectible
26    expense by at least $30,000,000 for a participating

 

 

HB4661 Engrossed- 38 -LRB103 37733 SPS 67860 b

1    utility other than a combination utility and by at least
2    $3,500,000 for a participating utility that is a
3    combination utility, using a baseline of the average
4    uncollectible expense for the years 2008 through 2010.
5        (9) Opportunities for minority-owned and female-owned
6    business enterprises: design a performance metric
7    regarding the creation of opportunities for minority-owned
8    and female-owned business enterprises consistent with
9    State and federal law using a base performance value of
10    the percentage of the participating utility's capital
11    expenditures that were paid to minority-owned and
12    female-owned business enterprises in 2010.
13    The definitions set forth in 83 Ill. Adm. Code 411.20 as of
14May 1, 2011 shall be used for purposes of calculating
15performance under paragraphs (1) through (3.5) of this
16subsection (f), provided, however, that the participating
17utility may exclude up to 9 extreme weather event days from
18such calculation for each year, and provided further that the
19participating utility shall exclude 9 extreme weather event
20days when calculating each year of the baseline period to the
21extent that there are 9 such days in a given year of the
22baseline period. For purposes of this Section, an extreme
23weather event day is a 24-hour calendar day (beginning at
2412:00 a.m. and ending at 11:59 p.m.) during which any weather
25event (e.g., storm, tornado) caused interruptions for 10,000
26or more of the participating utility's customers for 3 hours

 

 

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1or more. If there are more than 9 extreme weather event days in
2a year, then the utility may choose no more than 9 extreme
3weather event days to exclude, provided that the same extreme
4weather event days are excluded from each of the calculations
5performed under paragraphs (1) through (3.5) of this
6subsection (f).
7    The metrics shall include incremental performance goals
8for each year of the 10-year period, which shall be designed to
9demonstrate that the utility is on track to achieve the
10performance goal in each category at the end of the 10-year
11period. The utility shall elect when the 10-year period shall
12commence for the metrics set forth in subparagraphs (1)
13through (4) and (9) of this subsection (f), provided that it
14begins no later than 14 months following the date on which the
15utility begins investing pursuant to subsection (b) of this
16Section, and when the 10-year period shall commence for the
17metrics set forth in subparagraphs (5) through (8) of this
18subsection (f), provided that it begins no later than 14
19months following the date on which the Commission enters its
20order approving the utility's Advanced Metering Infrastructure
21Deployment Plan pursuant to subsection (c) of Section 16-108.6
22of this Act.
23    The metrics and performance goals set forth in
24subparagraphs (5) through (8) of this subsection (f) are based
25on the assumptions that the participating utility may fully
26implement the technology described in subsection (b) of this

 

 

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1Section, including utilizing the full functionality of such
2technology and that there is no requirement for personal
3on-site notification. If the utility is unable to meet the
4metrics and performance goals set forth in subparagraphs (5)
5through (8) of this subsection (f) for such reasons, and the
6Commission so finds after notice and hearing, then the utility
7shall be excused from compliance, but only to the limited
8extent achievement of the affected metrics and performance
9goals was hindered by the less than full implementation.
10    (f-5) The financial penalties applicable to the metrics
11described in subparagraphs (1) through (8) of subsection (f)
12of this Section, as applicable, shall be applied through an
13adjustment to the participating utility's return on equity of
14no more than a total of 30 basis points in each of the first 3
15years, of no more than a total of 34 basis points in each of
16the 3 years thereafter, and of no more than a total of 38 basis
17points in each of the 4 years thereafter, as follows:
18        (1) With respect to each of the incremental annual
19    performance goals established pursuant to paragraph (1) of
20    subsection (f) of this Section,
21            (A) for each year that a participating utility
22        other than a combination utility does not achieve the
23        annual goal, the participating utility's return on
24        equity shall be reduced as follows: during years 1
25        through 3, by 5 basis points; during years 4 through 6,
26        by 6 basis points; and during years 7 through 10, by 7

 

 

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1        basis points; and
2            (B) for each year that a participating utility
3        that is a combination utility does not achieve the
4        annual goal, the participating utility's return on
5        equity shall be reduced as follows: during years 1
6        through 3, by 10 basis points; during years 4 through
7        6, by 12 basis points; and during years 7 through 10,
8        by 14 basis points.
9        (2) With respect to each of the incremental annual
10    performance goals established pursuant to paragraph (2) of
11    subsection (f) of this Section, for each year that the
12    participating utility does not achieve each such goal, the
13    participating utility's return on equity shall be reduced
14    as follows: during years 1 through 3, by 5 basis points;
15    during years 4 through 6, by 6 basis points; and during
16    years 7 through 10, by 7 basis points.
17        (3) With respect to each of the incremental annual
18    performance goals established pursuant to paragraphs (3)
19    and (3.5) of subsection (f) of this Section, for each year
20    that a participating utility other than a combination
21    utility does not achieve both such goals, the
22    participating utility's return on equity shall be reduced
23    as follows: during years 1 through 3, by 5 basis points;
24    during years 4 through 6, by 6 basis points; and during
25    years 7 through 10, by 7 basis points.
26        (4) With respect to each of the incremental annual

 

 

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1    performance goals established pursuant to paragraph (4) of
2    subsection (f) of this Section, for each year that the
3    participating utility does not achieve each such goal, the
4    participating utility's return on equity shall be reduced
5    as follows: during years 1 through 3, by 5 basis points;
6    during years 4 through 6, by 6 basis points; and during
7    years 7 through 10, by 7 basis points.
8        (5) With respect to each of the incremental annual
9    performance goals established pursuant to subparagraph (5)
10    of subsection (f) of this Section, for each year that the
11    participating utility does not achieve at least 95% of
12    each such goal, the participating utility's return on
13    equity shall be reduced by 5 basis points for each such
14    unachieved goal.
15        (6) With respect to each of the incremental annual
16    performance goals established pursuant to paragraphs (6),
17    (7), and (8) of subsection (f) of this Section, as
18    applicable, which together measure non-operational
19    customer savings and benefits relating to the
20    implementation of the Advanced Metering Infrastructure
21    Deployment Plan, as defined in Section 16-108.6 of this
22    Act, the performance under each such goal shall be
23    calculated in terms of the percentage of the goal
24    achieved. The percentage of goal achieved for each of the
25    goals shall be aggregated, and an average percentage value
26    calculated, for each year of the 10-year period. If the

 

 

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1    utility does not achieve an average percentage value in a
2    given year of at least 95%, the participating utility's
3    return on equity shall be reduced by 5 basis points.
4    The financial penalties shall be applied as described in
5this subsection (f-5) for the 12-month period in which the
6deficiency occurred through a separate tariff mechanism, which
7shall be filed by the utility together with its metrics. In the
8event the formula rate tariff established pursuant to
9subsection (c) of this Section terminates, the utility's
10obligations under subsection (f) of this Section and this
11subsection (f-5) shall also terminate, provided, however, that
12the tariff mechanism established pursuant to subsection (f) of
13this Section and this subsection (f-5) shall remain in effect
14until any penalties due and owing at the time of such
15termination are applied.
16    The Commission shall, after notice and hearing, enter an
17order within 120 days after the metrics are filed approving,
18or approving with modification, a participating utility's
19tariff or mechanism to satisfy the metrics set forth in
20subsection (f) of this Section. On June 1 of each subsequent
21year, each participating utility shall file a report with the
22Commission that includes, among other things, a description of
23how the participating utility performed under each metric and
24an identification of any extraordinary events that adversely
25impacted the utility's performance. Whenever a participating
26utility does not satisfy the metrics required pursuant to

 

 

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1subsection (f) of this Section, the Commission shall, after
2notice and hearing, enter an order approving financial
3penalties in accordance with this subsection (f-5). The
4Commission-approved financial penalties shall be applied
5beginning with the next rate year. Nothing in this Section
6shall authorize the Commission to reduce or otherwise obviate
7the imposition of financial penalties for failing to achieve
8one or more of the metrics established pursuant to
9subparagraphs (1) through (4) of subsection (f) of this
10Section.
11    (g) On or before July 31, 2014, each participating utility
12shall file a report with the Commission that sets forth the
13average annual increase in the average amount paid per
14kilowatthour for residential eligible retail customers,
15exclusive of the effects of energy efficiency programs,
16comparing the 12-month period ending May 31, 2012; the
1712-month period ending May 31, 2013; and the 12-month period
18ending May 31, 2014. For a participating utility that is a
19combination utility with more than one rate zone, the weighted
20average aggregate increase shall be provided. The report shall
21be filed together with a statement from an independent auditor
22attesting to the accuracy of the report. The cost of the
23independent auditor shall be borne by the participating
24utility and shall not be a recoverable expense. "The average
25amount paid per kilowatthour" shall be based on the
26participating utility's tariffed rates actually in effect and

 

 

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1shall not be calculated using any hypothetical rate or
2adjustments to actual charges (other than as specified for
3energy efficiency) as an input.
4    In the event that the average annual increase exceeds 2.5%
5as calculated pursuant to this subsection (g), then Sections
616-108.5, 16-108.6, 16-108.7, and 16-108.8 of this Act, other
7than this subsection, shall be inoperative as they relate to
8the utility and its service area as of the date of the report
9due to be submitted pursuant to this subsection and the
10utility shall no longer be eligible to annually update the
11performance-based formula rate tariff pursuant to subsection
12(d) of this Section. In such event, the then current rates
13shall remain in effect until such time as new rates are set
14pursuant to Article IX of this Act, subject to retroactive
15adjustment, with interest, to reconcile rates charged with
16actual costs, and the participating utility's voluntary
17commitments and obligations under subsection (b) of this
18Section shall immediately terminate, except for the utility's
19obligation to pay an amount already owed to the fund for
20training grants pursuant to a Commission order issued under
21subsection (b) of this Section.
22    In the event that the average annual increase is 2.5% or
23less as calculated pursuant to this subsection (g), then the
24performance-based formula rate shall remain in effect as set
25forth in this Section.
26    For purposes of this Section, the amount per kilowatthour

 

 

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1means the total amount paid for electric service expressed on
2a per kilowatthour basis, and the total amount paid for
3electric service includes without limitation amounts paid for
4supply, transmission, distribution, surcharges, and add-on
5taxes exclusive of any increases in taxes or new taxes imposed
6after October 26, 2011 (the effective date of Public Act
797-616). For purposes of this Section, "eligible retail
8customers" shall have the meaning set forth in Section
916-111.5 of this Act.
10    The fact that this Section becomes inoperative as set
11forth in this subsection shall not be construed to mean that
12the Commission may reexamine or otherwise reopen prudence or
13reasonableness determinations already made.
14    (h) By December 31, 2017, the Commission shall prepare and
15file with the General Assembly a report on the infrastructure
16program and the performance-based formula rate. The report
17shall include the change in the average amount per
18kilowatthour paid by residential customers between June 1,
192011 and May 31, 2017. If the change in the total average rate
20paid exceeds 2.5% compounded annually, the Commission shall
21include in the report an analysis that shows the portion of the
22change due to the delivery services component and the portion
23of the change due to the supply component of the rate. The
24report shall include separate sections for each participating
25utility.
26    The provisions of Sections 16-108.5, 16-108.6, 16-108.7,

 

 

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1and 16-108.8 of this Act and the provisions of this Section,
2other than this subsection (h) and subsection (i) of this
3Section, are inoperative after December 31, 2022 for every
4participating utility, after which time a participating
5utility shall no longer be eligible to annually update the
6performance-based formula rate tariff pursuant to subsection
7(d) of this Section. At such time, the then current rates shall
8remain in effect until such time as new rates are set pursuant
9to Article IX of this Act, subject to retroactive adjustment,
10with interest, to reconcile rates charged with actual costs.
11    The fact that this Section becomes inoperative as set
12forth in this subsection shall not be construed to mean that
13the Commission may reexamine or otherwise reopen prudence or
14reasonableness determinations already made.
15    (i) The provisions of this subsection (i) are inoperative
16after December 31, 2027.
17     While an electric a participating utility may use,
18develop, and maintain broadband systems and the delivery of
19broadband services, Voice over Internet Protocol (VoIP)
20voice-over-internet-protocol services, telecommunications
21services, and cable or and video programming services for use
22in providing delivery services and Smart Grid functionality or
23application to its retail customers, an electric including,
24but not limited to, the installation, implementation and
25maintenance of Smart Grid electric system upgrades as defined
26in Section 16-108.6 of this Act, a participating utility is

 

 

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1prohibited from providing to its retail customers broadband
2services, Voice over Internet Protocol (VoIP)
3voice-over-internet-protocol services, telecommunications
4services, or cable or video programming services, unless they
5are part of a service directly related to delivery services or
6Smart Grid functionality or applications as defined in Section
716-108.6 of this Act, and from recovering the costs of such
8offerings from retail customers. The prohibition set forth in
9this subsection (i) is inoperative after December 31, 2027 for
10every participating utility.
11    Furthermore, an electric utility in a county with a
12population of 3,000,000 or more shall not authorize any other
13person or grant any other person the right, by agreement,
14lease, license, or otherwise, to access, control, use, or
15operate that electric utility's infrastructure, facilities, or
16assets of any kind or to deliver or provide to that electric
17utility's customers or any other person's customers, broadband
18services, Voice over Internet Protocol (VoIP) services,
19telecommunications services, or cable or video programming
20services.
21    However, notwithstanding the prohibitions set forth in
22this Section, an electric utility in a county with a
23population of 3,000,000 or more may authorize or grant another
24person the right to access or use the electric utility's
25infrastructure, facilities, or assets, including, but not
26limited to, middle mile infrastructure, to facilitate the

 

 

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1delivery of broadband services to Illinois residential and
2commercial customers on the condition that the access to and
3use of that electric utility's infrastructure, facilities, and
4assets (A) be granted on a non-discriminatory, non-exclusive,
5and competitively neutral basis; and (B) comply with all other
6State and federal laws, rules, and regulations, including, but
7not limited to, all applicable safety codes and requirements.
8If there is any dispute regarding the terms, rates, or
9conditions of access to or use of that electric utility's
10infrastructure, facilities, and assets to facilitate the
11delivery of broadband services to Illinois residential and
12commercial customers, the Commission, upon the petition of any
13party, shall hear and decide the dispute in accordance with
14the Commission's Rules of Practice (83 Ill. Adm. Code Part
15200).
16    Nothing in this amendatory Act of the 103rd General
17Assembly shall be construed to authorize any electric utility
18in a county with a population of 3,000,000 or more to consent
19to, or grant to, any other person by agreement, lease,
20license, or otherwise, the right to access, occupy, or use any
21infrastructure, facility, easement, or asset of any kind not
22owned by the electric utility.
23    Nothing in this amendatory Act of the 103rd General
24Assembly shall be construed to alter or diminish the rights or
25obligations of any person under, nor shall it be deemed to
26conflict with, the federal Pole Attachment Act (47 U.S.C.

 

 

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1224).
2    As used in this subsection (i):
3    "Broadband services" means the services that are used to
4deliver to subscribers a high-speed service connection to the
5public Internet that is capable of supporting, in at least one
6direction, a speed in excess of 200 kilobits per second (kbps)
7to the network demarcation point at the subscribers' premises.
8    "Electric utility" has the meaning set forth in Section
916-102.
10    "Middle mile infrastructure" has the meaning provided in
11Section 60401 of the federal Infrastructure Investment and
12Jobs Act (47 U.S.C. 1741).
13    (j) Nothing in this Section is intended to legislatively
14overturn the opinion issued in Commonwealth Edison Co. v. Ill.
15Commerce Comm'n, Nos. 2-08-0959, 2-08-1037, 2-08-1137,
161-08-3008, 1-08-3030, 1-08-3054, 1-08-3313 cons. (Ill. App.
17Ct. 2d Dist. Sept. 30, 2010). Public Act 97-616 shall not be
18construed as creating a contract between the General Assembly
19and the participating utility, and shall not establish a
20property right in the participating utility.
21    (k) The changes made in subsections (c) and (d) of this
22Section by Public Act 98-15 are intended to be a restatement
23and clarification of existing law, and intended to give
24binding effect to the provisions of House Resolution 1157
25adopted by the House of Representatives of the 97th General
26Assembly and Senate Resolution 821 adopted by the Senate of

 

 

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1the 97th General Assembly that are reflected in paragraph (3)
2of this subsection. In addition, Public Act 98-15 preempts and
3supersedes any final Commission orders entered in Docket Nos.
411-0721, 12-0001, 12-0293, and 12-0321 to the extent
5inconsistent with the amendatory language added to subsections
6(c) and (d).
7        (1) No earlier than 5 business days after May 22, 2013
8    (the effective date of Public Act 98-15), each
9    participating utility shall file any tariff changes
10    necessary to implement the amendatory language set forth
11    in subsections (c) and (d) of this Section by Public Act
12    98-15 and a revised revenue requirement under the
13    participating utility's performance-based formula rate.
14    The Commission shall enter a final order approving such
15    tariff changes and revised revenue requirement within 21
16    days after the participating utility's filing.
17        (2) Notwithstanding anything that may be to the
18    contrary, a participating utility may file a tariff to
19    retroactively recover its previously unrecovered actual
20    costs of delivery service that are no longer subject to
21    recovery through a reconciliation adjustment under
22    subsection (d) of this Section. This retroactive recovery
23    shall include any derivative adjustments resulting from
24    the changes to subsections (c) and (d) of this Section by
25    Public Act 98-15. Such tariff shall allow the utility to
26    assess, on current customer bills over a period of 12

 

 

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1    monthly billing periods, a charge or credit related to
2    those unrecovered costs with interest at the utility's
3    weighted average cost of capital during the period in
4    which those costs were unrecovered. A participating
5    utility may file a tariff that implements a retroactive
6    charge or credit as described in this paragraph for
7    amounts not otherwise included in the tariff filing
8    provided for in paragraph (1) of this subsection (k). The
9    Commission shall enter a final order approving such tariff
10    within 21 days after the participating utility's filing.
11        (3) The tariff changes described in paragraphs (1) and
12    (2) of this subsection (k) shall relate only to, and be
13    consistent with, the following provisions of Public Act
14    98-15: paragraph (2) of subsection (c) regarding year-end
15    capital structure, subparagraph (D) of paragraph (4) of
16    subsection (c) regarding pension assets, and subsection
17    (d) regarding the reconciliation components related to
18    year-end rate base and interest calculated at a rate equal
19    to the utility's weighted average cost of capital.
20        (4) Nothing in this subsection is intended to effect a
21    dismissal of or otherwise affect an appeal from any final
22    Commission orders entered in Docket Nos. 11-0721, 12-0001,
23    12-0293, and 12-0321 other than to the extent of the
24    amendatory language contained in subsections (c) and (d)
25    of this Section of Public Act 98-15.
26    (l) Each participating utility shall be deemed to have

 

 

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1been in full compliance with all requirements of subsection
2(b) of this Section, subsection (c) of this Section, Section
316-108.6 of this Act, and all Commission orders entered
4pursuant to Sections 16-108.5 and 16-108.6 of this Act, up to
5and including May 22, 2013 (the effective date of Public Act
698-15). The Commission shall not undertake any investigation
7of such compliance and no penalty shall be assessed or adverse
8action taken against a participating utility for noncompliance
9with Commission orders associated with subsection (b) of this
10Section, subsection (c) of this Section, and Section 16-108.6
11of this Act prior to such date. Each participating utility
12other than a combination utility shall be permitted, without
13penalty, a period of 12 months after such effective date to
14take actions required to ensure its infrastructure investment
15program is in compliance with subsection (b) of this Section
16and with Section 16-108.6 of this Act. Provided further, the
17following subparagraphs shall apply to a participating utility
18other than a combination utility:
19        (A) if the Commission has initiated a proceeding
20    pursuant to subsection (e) of Section 16-108.6 of this Act
21    that is pending as of May 22, 2013 (the effective date of
22    Public Act 98-15), then the order entered in such
23    proceeding shall, after notice and hearing, accelerate the
24    commencement of the meter deployment schedule approved in
25    the final Commission order on rehearing entered in Docket
26    No. 12-0298;

 

 

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1        (B) if the Commission has entered an order pursuant to
2    subsection (e) of Section 16-108.6 of this Act prior to
3    May 22, 2013 (the effective date of Public Act 98-15) that
4    does not accelerate the commencement of the meter
5    deployment schedule approved in the final Commission order
6    on rehearing entered in Docket No. 12-0298, then the
7    utility shall file with the Commission, within 45 days
8    after such effective date, a plan for accelerating the
9    commencement of the utility's meter deployment schedule
10    approved in the final Commission order on rehearing
11    entered in Docket No. 12-0298; the Commission shall reopen
12    the proceeding in which it entered its order pursuant to
13    subsection (e) of Section 16-108.6 of this Act and shall,
14    after notice and hearing, enter an amendatory order that
15    approves or approves as modified such accelerated plan
16    within 90 days after the utility's filing; or
17        (C) if the Commission has not initiated a proceeding
18    pursuant to subsection (e) of Section 16-108.6 of this Act
19    prior to May 22, 2013 (the effective date of Public Act
20    98-15), then the utility shall file with the Commission,
21    within 45 days after such effective date, a plan for
22    accelerating the commencement of the utility's meter
23    deployment schedule approved in the final Commission order
24    on rehearing entered in Docket No. 12-0298 and the
25    Commission shall, after notice and hearing, approve or
26    approve as modified such plan within 90 days after the

 

 

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1    utility's filing.
2    Any schedule for meter deployment approved by the
3Commission pursuant to this subsection (l) shall take into
4consideration procurement times for meters and other equipment
5and operational issues. Nothing in Public Act 98-15 shall
6shorten or extend the end dates for the 5-year or 10-year
7periods set forth in subsection (b) of this Section or Section
816-108.6 of this Act. Nothing in this subsection is intended
9to address whether a participating utility has, or has not,
10satisfied any or all of the metrics and performance goals
11established pursuant to subsection (f) of this Section.
12    (m) The provisions of Public Act 98-15 are severable under
13Section 1.31 of the Statute on Statutes.
14(Source: P.A. 102-1031, eff. 5-27-22; 103-154, eff. 6-30-23.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.