Public Act 094-0063
 
SB0090 Enrolled LRB094 07173 MKM 37328 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Public Utilities Act is amended by changing
Section 9-220 as follows:
 
    (220 ILCS 5/9-220)  (from Ch. 111 2/3, par. 9-220)
    Sec. 9-220. Rate changes based on changes in fuel costs.
    (a) Notwithstanding the provisions of Section 9-201, the
Commission may authorize the increase or decrease of rates and
charges based upon changes in the cost of fuel used in the
generation or production of electric power, changes in the cost
of purchased power, or changes in the cost of purchased gas
through the application of fuel adjustment clauses or purchased
gas adjustment clauses. The Commission may also authorize the
increase or decrease of rates and charges based upon
expenditures or revenues resulting from the purchase or sale of
emission allowances created under the federal Clean Air Act
Amendments of 1990, through such fuel adjustment clauses, as a
cost of fuel. For the purposes of this paragraph, cost of fuel
used in the generation or production of electric power shall
include the amount of any fees paid by the utility for the
implementation and operation of a process for the
desulfurization of the flue gas when burning high sulfur coal
at any location within the State of Illinois irrespective of
the attainment status designation of such location; but shall
not include transportation costs of coal (i) except to the
extent that for contracts entered into on and after the
effective date of this amendatory Act of 1997, the cost of the
coal, including transportation costs, constitutes the lowest
cost for adequate and reliable fuel supply reasonably available
to the public utility in comparison to the cost, including
transportation costs, of other adequate and reliable sources of
fuel supply reasonably available to the public utility, or (ii)
except as otherwise provided in the next 3 sentences of this
paragraph. Such costs of fuel shall, when requested by a
utility or at the conclusion of the utility's next general
electric rate proceeding, whichever shall first occur, include
transportation costs of coal purchased under existing coal
purchase contracts. For purposes of this paragraph "existing
coal purchase contracts" means contracts for the purchase of
coal in effect on the effective date of this amendatory Act of
1991, as such contracts may thereafter be amended, but only to
the extent that any such amendment does not increase the
aggregate quantity of coal to be purchased under such contract.
Nothing herein shall authorize an electric utility to recover
through its fuel adjustment clause any amounts of
transportation costs of coal that were included in the revenue
requirement used to set base rates in its most recent general
rate proceeding. Cost shall be based upon uniformly applied
accounting principles. Annually, the Commission shall initiate
public hearings to determine whether the clauses reflect actual
costs of fuel, gas, power, or coal transportation purchased to
determine whether such purchases were prudent, and to reconcile
any amounts collected with the actual costs of fuel, power,
gas, or coal transportation prudently purchased. In each such
proceeding, the burden of proof shall be upon the utility to
establish the prudence of its cost of fuel, power, gas, or coal
transportation purchases and costs. The Commission shall issue
its final order in each such annual proceeding for an electric
utility by December 31 of the year immediately following the
year to which the proceeding pertains, provided, that the
Commission shall issue its final order with respect to such
annual proceeding for the years 1996 and earlier by December
31, 1998.
    (b) A public utility providing electric service, other than
a public utility described in subsections (e) or (f) of this
Section, may at any time during the mandatory transition period
file with the Commission proposed tariff sheets that eliminate
the public utility's fuel adjustment clause and adjust the
public utility's base rate tariffs by the amount necessary for
the base fuel component of the base rates to recover the public
utility's average fuel and power supply costs per kilowatt-hour
for the 2 most recent years for which the Commission has issued
final orders in annual proceedings pursuant to subsection (a),
where the average fuel and power supply costs per kilowatt-hour
shall be calculated as the sum of the public utility's prudent
and allowable fuel and power supply costs as found by the
Commission in the 2 proceedings divided by the public utility's
actual jurisdictional kilowatt-hour sales for those 2 years.
Notwithstanding any contrary or inconsistent provisions in
Section 9-201 of this Act, in subsection (a) of this Section or
in any rules or regulations promulgated by the Commission
pursuant to subsection (g) of this Section, the Commission
shall review and shall by order approve, or approve as
modified, the proposed tariff sheets within 60 days after the
date of the public utility's filing. The Commission may modify
the public utility's proposed tariff sheets only to the extent
the Commission finds necessary to achieve conformance to the
requirements of this subsection (b). During the 5 years
following the date of the Commission's order, but in any event
no earlier than January 1, 2007, a public utility whose fuel
adjustment clause has been eliminated pursuant to this
subsection shall not file proposed tariff sheets seeking, or
otherwise petition the Commission for, reinstatement of a fuel
adjustment clause.
    (c) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section or in any rules or regulations promulgated by the
Commission pursuant to subsection (g) of this Section, a public
utility providing electric service, other than a public utility
described in subsection (e) or (f) of this Section, may at any
time during the mandatory transition period file with the
Commission proposed tariff sheets that establish the rate per
kilowatt-hour to be applied pursuant to the public utility's
fuel adjustment clause at the average value for such rate
during the preceding 24 months, provided that such average rate
results in a credit to customers' bills, without making any
revisions to the public utility's base rate tariffs. The
proposed tariff sheets shall establish the fuel adjustment rate
for a specific time period of at least 3 years but not more
than 5 years, provided that the terms and conditions for any
reinstatement earlier than 5 years shall be set forth in the
proposed tariff sheets and subject to modification or approval
by the Commission. The Commission shall review and shall by
order approve the proposed tariff sheets if it finds that the
requirements of this subsection are met. The Commission shall
not conduct the annual hearings specified in the last 3
sentences of subsection (a) of this Section for the utility for
the period that the factor established pursuant to this
subsection is in effect.
    (d) A public utility providing electric service, or a
public utility providing gas service may file with the
Commission proposed tariff sheets that eliminate the public
utility's fuel or purchased gas adjustment clause and adjust
the public utility's base rate tariffs to provide for recovery
of power supply costs or gas supply costs that would have been
recovered through such clause; provided, that the provisions of
this subsection (d) shall not be available to a public utility
described in subsections (e) or (f) of this Section to
eliminate its fuel adjustment clause. Notwithstanding any
contrary or inconsistent provisions in Section 9-201 of this
Act, in subsection (a) of this Section, or in any rules or
regulations promulgated by the Commission pursuant to
subsection (g) of this Section, the Commission shall review and
shall by order approve, or approve as modified in the
Commission's order, the proposed tariff sheets within 240 days
after the date of the public utility's filing. The Commission's
order shall approve rates and charges that the Commission,
based on information in the public utility's filing or on the
record if a hearing is held by the Commission, finds will
recover the reasonable, prudent and necessary jurisdictional
power supply costs or gas supply costs incurred or to be
incurred by the public utility during a 12 month period found
by the Commission to be appropriate for these purposes,
provided, that such period shall be either (i) a 12 month
historical period occurring during the 15 months ending on the
date of the public utility's filing, or (ii) a 12 month future
period ending no later than 15 months following the date of the
public utility's filing. The public utility shall include with
its tariff filing information showing both (1) its actual
jurisdictional power supply costs or gas supply costs for a 12
month historical period conforming to (i) above and (2) its
projected jurisdictional power supply costs or gas supply costs
for a future 12 month period conforming to (ii) above. If the
Commission's order requires modifications in the tariff sheets
filed by the public utility, the public utility shall have 7
days following the date of the order to notify the Commission
whether the public utility will implement the modified tariffs
or elect to continue its fuel or purchased gas adjustment
clause in force as though no order had been entered. The
Commission's order shall provide for any reconciliation of
power supply costs or gas supply costs, as the case may be, and
associated revenues through the date that the public utility's
fuel or purchased gas adjustment clause is eliminated. During
the 5 years following the date of the Commission's order, a
public utility whose fuel or purchased gas adjustment clause
has been eliminated pursuant to this subsection shall not file
proposed tariff sheets seeking, or otherwise petition the
Commission for, reinstatement or adoption of a fuel or
purchased gas adjustment clause. Nothing in this subsection (d)
shall be construed as limiting the Commission's authority to
eliminate a public utility's fuel adjustment clause or
purchased gas adjustment clause in accordance with any other
applicable provisions of this Act.
    (e) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section, or in any rules promulgated by the Commission
pursuant to subsection (g) of this Section, a public utility
providing electric service to more than 1,000,000 customers in
this State may, within the first 6 months after the effective
date of this amendatory Act of 1997, file with the Commission
proposed tariff sheets that eliminate, effective January 1,
1997, the public utility's fuel adjustment clause without
adjusting its base rates, and such tariff sheets shall be
effective upon filing. To the extent the application of the
fuel adjustment clause had resulted in net charges to customers
after January 1, 1997, the utility shall also file a tariff
sheet that provides for a refund stated on a per kilowatt-hour
basis of such charges over a period not to exceed 6 months;
provided however, that such refund shall not include the
proportional amounts of taxes paid under the Use Tax Act,
Service Use Tax Act, Service Occupation Tax Act, and Retailers'
Occupation Tax Act on fuel used in generation. The Commission
shall issue an order within 45 days after the date of the
public utility's filing approving or approving as modified such
tariff sheet. If the fuel adjustment clause is eliminated
pursuant to this subsection, the Commission shall not conduct
the annual hearings specified in the last 3 sentences of
subsection (a) of this Section for the utility for any period
after December 31, 1996 and prior to any reinstatement of such
clause. A public utility whose fuel adjustment clause has been
eliminated pursuant to this subsection shall not file a
proposed tariff sheet seeking, or otherwise petition the
Commission for, reinstatement of the fuel adjustment clause
prior to January 1, 2007.
    (f) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section, or in any rules or regulations promulgated by the
Commission pursuant to subsection (g) of this Section, a public
utility providing electric service to more than 500,000
customers but fewer than 1,000,000 customers in this State may,
within the first 6 months after the effective date of this
amendatory Act of 1997, file with the Commission proposed
tariff sheets that eliminate, effective January 1, 1997, the
public utility's fuel adjustment clause and adjust its base
rates by the amount necessary for the base fuel component of
the base rates to recover 91% of the public utility's average
fuel and power supply costs for the 2 most recent years for
which the Commission, as of January 1, 1997, has issued final
orders in annual proceedings pursuant to subsection (a), where
the average fuel and power supply costs per kilowatt-hour shall
be calculated as the sum of the public utility's prudent and
allowable fuel and power supply costs as found by the
Commission in the 2 proceedings divided by the public utility's
actual jurisdictional kilowatt-hour sales for those 2 years,
provided, that such tariff sheets shall be effective upon
filing. To the extent the application of the fuel adjustment
clause had resulted in net charges to customers after January
1, 1997, the utility shall also file a tariff sheet that
provides for a refund stated on a per kilowatt-hour basis of
such charges over a period not to exceed 6 months. Provided
however, that such refund shall not include the proportional
amounts of taxes paid under the Use Tax Act, Service Use Tax
Act, Service Occupation Tax Act, and Retailers' Occupation Tax
Act on fuel used in generation. The Commission shall issue an
order within 45 days after the date of the public utility's
filing approving or approving as modified such tariff sheet. If
the fuel adjustment clause is eliminated pursuant to this
subsection, the Commission shall not conduct the annual
hearings specified in the last 3 sentences of subsection (a) of
this Section for the utility for any period after December 31,
1996 and prior to any reinstatement of such clause. A public
utility whose fuel adjustment clause has been eliminated
pursuant to this subsection shall not file a proposed tariff
sheet seeking, or otherwise petition the Commission for,
reinstatement of the fuel adjustment clause prior to January 1,
2007.
    (g) The Commission shall have authority to promulgate rules
and regulations to carry out the provisions of this Section.
    (h) Any gas utility may enter into a 20-year supply
contract with any company for synthetic natural gas produced
from coal through the gasification process if the company has
commenced construction of a coal gasification facility by July
1, 2008. The cost for the synthetic natural gas is reasonable
and prudent and recoverable through the purchased gas
adjustment clause for years one through 10 of the contract if:
(i) the only coal used in the gasification process has high
volatile bituminous rank and greater than 1.7 pounds of sulfur
per million Btu content; (ii) at the time the contract term
commences, the price per million Btu does not exceed $5 in 2004
dollars, adjusted annually based on the change in the Annual
Consumer Price Index for All Urban Consumers for the Midwest
Region as published in April by the United States Department of
Labor, Bureau of Labor Statistics (or a suitable Consumer Price
Index calculation if this Consumer Price Index is not
available) for the previous calendar year; provided that the
price per million Btu shall not exceed $5.50 at any time during
the contract; (iii) the utility's aggregate long-term supply
contracts for the purchase of synthetic natural gas produced
from coal through the gasification process does not exceed 25%
of the annual system supply requirements of the utility at the
time the contract is entered into; and (iv) the contract is
entered into within one year after the effective date of this
amendatory Act of the 94th General Assembly and terminates 20
years after the commencement of the production of synthetic
natural gas. The contract shall provide that if, at any time
during years 11 through 20 of the contract, the Commission
determines that the cost for the synthetic natural gas under
the contract is not reasonable and prudent, then the company
shall reimburse the utility for the difference between the cost
deemed reasonable and prudent by the Commission and the cost
imposed under the contract.
    (i) If a gas utility or an affiliate of a gas utility has
an ownership interest in any entity that produces or sells
synthetic natural gas, Article VII of this Act shall apply.
(Source: P.A. 92-537, eff. 6-6-02.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.