093_HB2313ham002

 










                                     LRB093 07456 JLS 14457 a

 1                    AMENDMENT TO HOUSE BILL 2313

 2        AMENDMENT NO.     .  Amend House Bill 2313  by  replacing
 3    the title with the following:

 4        "AN ACT concerning public utilities."; and

 5    by  replacing  everything  after the enacting clause with the
 6    following:

 7        "Section 5.  The  Public  Utilities  Act  is  amended  by
 8    adding Section 9-220.3 as follows:

 9        (220 ILCS 5/9-220.3 new)
10        Sec. 9-220.3.  Asbestos surcharges authorized.
11        (a)  The  Commission  shall  adopt  a rule authorizing an
12    electric or gas utility to implement a  surcharge  ("asbestos
13    rider").  The surcharge shall be applied to customer bills no
14    earlier than January 1, 2007,  to  recover  costs  associated
15    with  asbestos;  provided  that,  for  any calendar year, the
16    amount of the surcharge for an electric or gas utility  shall
17    not exceed 5% of its annual Illinois retail revenue for sales
18    to ultimate customers as reported in the Commission's Form 21
19    of the utility for 2002.
20        (b)  Recoverable  costs  under  an  asbestos  rider for a
21    given year shall consist of the prudent costs incurred by the
 
                            -2-      LRB093 07456 JLS 14457 a
 1    electric or gas utility and the prudent costs incurred by  an
 2    owner  of  electric  property or gas property, as those terms
 3    are defined in subsection (c) of this Section for:
 4             (1)  litigation costs and final  injury  and  damage
 5        award  judgments  by a court of competent jurisdiction or
 6        settlements relating to asbestos  exposure  by  employees
 7        and others on electric or gas property while owned by the
 8        utility;
 9             (2)  costs  related  to  asbestos exposure insurance
10        coverage, litigation pertaining  to  insurance  coverage,
11        and insurance claims; and
12             (3)  the   cost   of   site  remediation  (including
13        removal, encapsulation, or other appropriate  remediation
14        methods).
15        For  purposes  of  this  subsection,  "settlement  costs"
16    include  litigation  expenses, including legal consulting and
17    dispute resolution costs.
18        "Recoverable costs" under  an  asbestos  rider  shall  be
19    those costs in excess of the level of such costs reflected in
20    the   establishment  of  a  utility's  base  rates.  However,
21    "recoverable costs" under an asbestos rider shall not include
22    any internal costs of the electric or gas utility.
23        (c)  The cost of  site  remediation  (including  removal,
24    encapsulation,  or  other  appropriate  remediation  methods)
25    shall be recoverable under an asbestos rider if the costs are
26    associated  with  remediation  of  electric  property  or gas
27    property and the site remediation is performed by a workforce
28    of skilled and trained employees  equipped  with  appropriate
29    technical  training and experience. Adequate skill, training,
30    and expertise  shall  be  demonstrated  by  factors  such  as
31    completion  by  the  employee  of  an accredited or otherwise
32    recognized apprenticeship program for the  particular  craft,
33    trade,  or  skill.  Contractors  performing  site remediation
34    shall comply with all governmental requirements for licensing
 
                            -3-      LRB093 07456 JLS 14457 a
 1    and for the  removal  and  handling  of  asbestos  materials.
 2    "Electric  property"  or  "gas property" shall mean all plant
 3    and property in the rate base of the electric utility or  gas
 4    utility as of or subsequent to October 1, 1996, regardless of
 5    whether the electric or gas utility has subsequently retired,
 6    sold,   leased,   or  otherwise  transferred  such  plant  or
 7    property.
 8        (d)  Under  an  asbestos  rider,  all  related  insurance
 9    recoveries shall be offset against costs charged through  the
10    rider, and allowable costs and revenues under the rider shall
11    be  reconciled  annually  pursuant  to subsection (f) of this
12    Section. Recoverable  costs,  net  of  insurance  recoveries,
13    incurred between the effective date of this amendatory Act of
14    the  93rd  General  Assembly  and  December  31,  2006 may be
15    deferred by an  electric  utility  for  recovery  through  an
16    asbestos  rider  provided that those costs and recoveries are
17    booked to deferred accounts that are not the subject  of  the
18    Commission's  determination  of  the  return on common equity
19    pursuant  to  subsection  (d)  or  (e)  of  Section   16-111.
20    Recoverable  costs,  net  of  insurance  recoveries, incurred
21    between the effective date of this amendatory Act of the 93rd
22    General Assembly and December 31, 2006 may be deferred  by  a
23    gas  utility  for recovery through an asbestos rider provided
24    that those  costs  and  recoveries  are  booked  to  deferred
25    accounts  that  are  not  the  subject  of  the  Commission's
26    determination  of  the gas utility's return on common equity.
27    Additionally, electric and gas utilities may defer amounts in
28    excess of the 5% annual cap. The electric or gas utility  may
29    accrue  a  carrying charge on the deferred amounts each month
30    at a rate to be determined by  the  Commission's  rulemaking.
31    The  Commission  may  determine that any such deferred amount
32    and associated carrying costs may be amortized over a  period
33    not  to  exceed 60 months; provided that the deferred amounts
34    shall continue to accrue carrying charges at  the  authorized
 
                            -4-      LRB093 07456 JLS 14457 a
 1    rate during the amortization period.
 2        (e)  The   Commission   shall   initiate   a   rulemaking
 3    proceeding  within  90  days after the effective date of this
 4    amendatory Act of the 93rd General Assembly to addresses  the
 5    following considerations:
 6             (1)  rate  design  for  recovering  asbestos related
 7        costs, including jurisdictional  allocation  methods  for
 8        multi-state utilities;
 9             (2)  frequency   of   rate  changes  and  timing  of
10        filings;
11             (3)  true-up mechanisms for over-or-under collection
12        of costs;
13             (4)  information requirements;
14             (5)  methodology for determining amount of  asbestos
15        costs  in  existing base rates and for deferring asbestos
16        costs in excess of base rate level;
17             (6)  guidelines  for  the   prudence   of   incurred
18        recoverable costs to be used in annual reviews;
19             (7)  tariff terms and conditions;
20             (8)  carrying  charge  rate  applicable  to deferred
21        recoverable costs; and
22             (9)  length  of  the  amortization  period  for  the
23        deferred costs.
24        The  utility  must  file  a  tariff  complying  with  the
25    Commission's final rules to initiate the asbestos  surcharge.
26    The  asbestos  surcharge shall appear as a separate line item
27    on customer bills. A utility intending to  defer  recoverable
28    costs  under this Section shall provide written notice to the
29    Commission's Chief Clerk and Manger of  Accounting  prior  to
30    deferring  such  costs.  A  utility  is  required  to file an
31    asbestos rider in compliance with the Commission's final rule
32    prior  to  implementing  the  surcharge  for  recovering  any
33    deferred costs and current recoverable costs after 2006.
34        (f)  Annually, the Commission shall initiate a proceeding
 
                            -5-      LRB093 07456 JLS 14457 a
 1    to reconcile any amounts collected under the tariff with  the
 2    actual  amount  of prudent recoverable costs in excess of the
 3    level of such costs already reflected in the  utility's  base
 4    rates.  In  each  proceeding, the burden of proof shall be on
 5    the  utility  to  establish  the  prudence  of  its  incurred
 6    recoverable costs. The Commission shall endeavor to issue its
 7    final order in each such annual proceeding by December 31  of
 8    the year following the year to which it pertains.

 9        Section  99.  Effective  date. This Act takes effect upon
10    becoming law.".