Sen. Don Harmon

Filed: 5/20/2011

 

 


 

 


 
09700HB3037sam001LRB097 05720 ASK 55986 a

1
AMENDMENT TO HOUSE BILL 3037

2    AMENDMENT NO. ______. Amend House Bill 3037 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Public Utilities Act is amended by changing
5Section 19-145 and by adding Section 19-150 as follows:
 
6    (220 ILCS 5/19-145)
7    Sec. 19-145. Automatic adjustment clause tariff;
8uncollectibles uncollectibles.
9    (a) A gas utility shall be permitted, at its election, to
10recover through an automatic adjustment clause tariff the
11incremental difference between its actual uncollectible amount
12as set forth in Account 904 in the utility's most recent annual
13Form 21 ILCC and the uncollectible amount included in the
14utility's rates for the period reported in such annual Form 21
15ILCC. The Commission may, in a proceeding to review a general
16rate case filed subsequent to the effective date of the tariff

 

 

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1established under this Section, prospectively switch, from
2using the actual uncollectible amount set forth in Account 904
3to using net write-offs in such tariff, but only if net
4write-offs are also used to determine the utility's
5uncollectible amount in rates. In the event the Commission
6requires such a change, it shall be made effective at the
7beginning of the first full calendar year after the new rates
8approved in such proceeding are first placed in effect and an
9adjustment shall be made, if necessary, to ensure the change
10does not result in double-recovery or unrecovered
11uncollectible amounts for any year. For purposes of this
12Section, "uncollectible amount" means the expense set forth in
13Account 904 of the utility's Form 21 ILCC or cost of net
14write-offs as appropriate. In the event the utility's rates
15change during the period of time reported in its most recent
16annual Form 21 ILCC, the uncollectible amount included in the
17utility's rates during such period of time for purposes of this
18Section will be a weighted average, based on revenues earned
19during such period by the utility under each set of rates, of
20the uncollectible amount included in the utility's rates at the
21beginning of such period and at the end of such period. This
22difference may either be a charge or a credit to customers
23depending on whether the uncollectible amount is more or less
24than the uncollectible amount then included in the utility's
25rates.
26    (b) The tariff may be established outside the context of a

 

 

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1general rate case filing, and shall specify the terms of any
2applicable audit. The Commission shall review and by order
3approve, or approve as modified, the proposed tariff within 180
4days after the date on which it is filed. Charges and credits
5under the tariff shall be allocated to the appropriate customer
6class or classes. In addition, customers who do not purchase
7their gas supply from a gas utility and whose receivables are
8not included in a purchase of receivable program under Section
919-150 shall not be charged by the utility for uncollectible
10amounts associated with gas supply provided by the utility to
11the utility's customers. Upon approval of the tariff, the
12utility shall, based on the 2008 Form 21 ILCC, apply the
13appropriate credit or charge based on the full year 2008
14amounts for the remainder of the 2010 calendar year. Starting
15with the 2009 Form 21 ILCC reporting period and each subsequent
16period, the utility shall apply the appropriate credit or
17charge over a 12-month period beginning with the June billing
18period and ending with the May billing period, with the first
19such billing period beginning June 2010.
20    (c) The approved tariff shall provide that the utility
21shall file a petition with the Commission annually, no later
22than August 31st, seeking initiation of an annual review to
23reconcile all amounts collected with the actual uncollectible
24amount in the prior period. As part of its review, the
25Commission shall verify that the utility collects no more and
26no less than its actual uncollectible amount in each applicable

 

 

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1Form 21 ILCC reporting period. The Commission shall review the
2prudence and reasonableness of the utility's actions to pursue
3minimization and collection of uncollectibles which shall
4include, at a minimum, the 6 enumerated criteria set forth in
5this Section. The Commission shall determine any required
6adjustments and may include suggestions for prospective
7changes in current practices. Nothing in this Section or the
8implementing tariffs shall affect or alter the gas utility's
9existing obligation to pursue collection of uncollectibles or
10the gas utility's right to disconnect service. A utility that
11has in effect a tariff authorized by this Section shall pursue
12minimization of and collection of uncollectibles through the
13following activities, including but not limited to:
14        (1) identifying customers with late payments;
15        (2) contacting the customers in an effort to obtain
16    payment;
17        (3) providing delinquent customers with information
18    about possible options, including payment plans and
19    assistance programs;
20        (4) serving disconnection notices;
21        (5) implementing disconnections based on the level of
22    uncollectibles; and
23        (6) pursuing collection activities based on the level
24    of uncollectibles.
25    (d) Nothing in this Section shall be construed to require a
26utility to immediately disconnect service for nonpayment.

 

 

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1(Source: P.A. 96-33, eff. 7-10-09.)
 
2    (220 ILCS 5/19-150 new)
3    Sec. 19-150. Purchase of receivables.
4    (a) A gas utility with more than 100,000 customers that
5offers transportation service to residential and small
6commercial customers shall file a tariff pursuant to Article IX
7of this Act within 6 months after the date of this amendatory
8Act of the 97th General Assembly that provides qualifying
9alternative gas suppliers with the option to have the gas
10utility purchase their receivables for gas sales that are (1)
11made to residential retail customers and small commercial
12customers, as those terms are defined in Section 19-105 of this
13Act, and (2) charged on the gas utility's bill. For purposes of
14this Section, "qualifying alternative gas supplier" means an
15alternative gas supplier that (i) is certified under Section
1619-110 of this Act and (ii) includes its charges for gas sales
17made in a gas utility's service area on that gas utility's bill
18pursuant to Section 19-135 of this Act.
19    (b) Receivables for gas sales of qualifying alternative gas
20suppliers that are charged on the gas utility's bill shall be
21purchased by the gas utility at a discount rate of 1%. The rate
22shall include 0.5% to be retained by the gas utility for
23recovery of deemed intangible costs, and neither this 0.5%
24portion of the rate, nor the deemed intangible costs, are
25subject to review by the Commission. The remaining 0.5% of the

 

 

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11% discount rate shall be retained by the gas utility for
2recovery of the utility's administrative costs and is subject
3to periodic review by the Commission. Any portion of the 0.5%
4intended for recovery of administrative costs that is found by
5the Commission, after notice and hearing, to be in excess of
6prudent and reasonable costs shall be refunded to all
7customers, including customers of qualifying alternative gas
8suppliers using purchase of receivables. For purposes of this
9Section, "administrative costs" means all of the utility's
10costs incurred in its administration of the purchase of
11receivables program except for the deemed intangible costs.
12    (c) In making a just and reasonable determination on the
13administrative costs, the Commission shall consider:
14        (1) the gas utility's reasonable start-up costs and
15    administrative costs associated with the gas utility's
16    purchase of receivables;
17        (2) the impact if used by the gas utility of an
18    automatic adjustment clause tariff pursuant to Section
19    19-145 of this Act to recover uncollectible expense; and
20        (3) whether the gas utility recovers uncollectible
21    expense from customers of qualifying alternative gas
22    suppliers through any of its existing rates or charges.
23    (d) Reasonable start-up costs and administrative costs
24associated with the gas utility's purchase of receivables shall
25in the first instance be recovered from qualifying alternative
26gas suppliers through the utility's discount rate assessed by

 

 

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1the utility on those qualifying alternative gas suppliers who
2have the utility purchase their receivables. In order to
3prevent barriers to suppliers' use of a purchase of receivables
4program and ensure full cost recovery for the gas utility in a
5timely manner, a portion of the gas utility's reasonable
6start-up costs, subject to reasonable carrying charges as
7determined by the Commission, may be deferred for later
8recovery from qualifying alternative gas suppliers who have the
9gas utility purchase their receivables through the discount
10rate or a monthly per bill fee if such deferral is deemed to be
11necessary by the Commission. The gas utility retains the rights
12to (1) impose the same terms on retail customers supplied by
13qualifying alternative gas suppliers with respect to credit and
14collection, including requests for deposits, and (2)
15disconnect the retail customers, if it does not receive payment
16for its tariffed services or purchased receivables, in the same
17manner that it would be permitted to if the retail customers
18had purchased gas supply service from the gas utility.
19    (e) The tariff filed pursuant to this Section shall permit
20the gas utility to recover from retail customers any
21uncollected receivables that may arise as a result of the
22purchase of receivables under this Section. The tariff filed
23pursuant to this Section shall provide for recovery of the
24prudently incurred costs associated with the provision of this
25service pursuant to this Section and may also include other
26just and reasonable terms and conditions. Nothing in this

 

 

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1Section permits the double recovery of uncollectible expenses
2from customers.
3    (f) Amounts collected by the utility attributable to the
40.5% portion of the discount rate under this Section for deemed
5intangible costs shall not be used by the Commission to lower
6the base rate revenue requirement of the utility in any
7subsequent rate case. In order to limit the implications on
8short-term debt of the utility, a utility may choose to delay
9purchase of unpaid receivables until the bill due date. Other
10than for initial implementation of the purchase of receivables
11program, when so choosing, a utility shall remit payments to
12the alternative gas suppliers no more than 2 business days
13following the due date.
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.".