HB0465 94TH GENERAL ASSEMBLY

LRB094 05804 MKM 35857 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB0465

Introduced 1/26/2005, by Rep. Marlow H. Colvin

SYNOPSIS AS INTRODUCED:

220 ILCS 5/5-108.1 new
220 ILCS 5/8-207.2 new
220 ILCS 5/8-207.5 new
220 ILCS 5/8-306 new
305 ILCS 20/3	from Ch. 111 2/3, par. 1403
305 ILCS 20/4	from Ch. 111 2/3, par. 1404
305 ILCS 20/4.5 new
305 ILCS 20/5	from Ch. 111 2/3, par. 1405
305 ILCS 20/8	from Ch. 111 2/3, par. 1408
305 ILCS 20/13

Amends the Public Utilities Act. Provides that every public utility that provides gas or electric service to residential customers as primary or secondary sources of heating must report all of the following information annually in writing to the Illinois Commerce Commission: (1) the number of accounts that are past due each month, (2) the aggregate amount of past due balances each month, (3) the number of disconnection notices issued to residential customers each month, (4) the number of residential customers disconnected each month, (5) the number of LIHEAP households reconnected each month, (6) the number of residential customers eligible for emergency services under the Energy Assistance Act each year, and (7) the aggregate amount of arrears that are written off as bad business debt each year. Requires a utility to reconnect service to LIHEAP households whose service was disconnected for nonpayment if the consumer (i) pays 20% of the outstanding bill for the household or $250, whichever is less or (ii) agrees to a payment plan negotiated with the public utility by the local area agency on behalf of the consumer. Requires an electric or gas public utility to participate in the Percentage of Income Payment Plan established under the Energy Assistance Act and establish and implement an arrearage reduction program for consumers who are participating in the Plan. Provides that, if a public utility writes off an uncollectable account arrearage as a bad business debt on its State or federal income tax return, the utility shall cease all collection activities for that debt and write the indebtedness off of its books. Amends the Energy Assistance Act. Changes references to the Department of Commerce and Economic Opportunity to the Department of Public Aid pursuant to the transfer of powers and duties under Executive Order 3 (2004). Requires the Department of Public Aid to institute a Percentage of Income Payment Plan to ensure the affordability of heating service to low income Illinois residents. Requires that the Plan be in operation by September 1, 2005. Authorizes the Department to enter into contracts and other agreements with local agencies for the purpose of administering the Plan. Provides that monies in the Supplemental Low-Income Energy Assistance Fund be used to to fund the Plan. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning public utilities.

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 adding Sections 5-108.1, 8-207.2, 8-207.5, and 8-306 as follows:

(220 ILCS 5/5-108.1 new)

Sec. 5-108.1. Report. Every public utility that provides gas or electric service to residential customers as primary or secondary sources of heating must report all of the following information annually in writing to the Illinois Commerce Commission:

(1) The number of accounts that are past due each month.

(2) The aggregate amount of past due balances each month.

(3) The number of disconnection notices issued to residential customers each month.

(4) The number of residential customers disconnected each month.

(5) The number of residential households reconnected each month pursuant to Section 8-207.2.

(6) The number of residential customers eligible for emergency services under the Energy Assistance Act each year.

(7) The aggregate amount of arrears that are written off as bad business debt each year.

(220 ILCS 5/8-207.2 new)

Sec. 8-207.2. Reconnection of LIHEAP households. Notwithstanding any other provision of this Act, a utility must reconnect service to households that have applied for and been determined to be eligible for LIHEAP and whose service was disconnected for nonpayment if the consumer (i) pays 20% of the outstanding bill for the household or $250, whichever is less or (ii) agrees to a payment plan negotiated with the public utility by the local area agency on behalf of the consumer. Before reconnecting service, a utility shall not impose any other condition upon a household that has applied for and has been determined to be eligible for LIHEAP, except those conditions provided in this subsection.

(220 ILCS 5/8-207.5 new)

Sec. 8-207.5. Percentage of Income Payment Plan.

(a) An electric or gas public utility that provides heating service to consumers in Illinois must participate in the Percentage of Income Payment Plan established under the Energy Assistance Act.

(b) As a part of the Percentage of Income Payment Plan, an electric or gas public utility that provides heating service must establish and implement a default or arrearage reduction program for consumers who are participating in the Plan. The default or arrearage reduction program shall provide that one-tenth of a participant's default amount or arrearage shall be reduced for every 3 months of timely monthly payments under the Plan.

(c) Notwithstanding any other provision of this Act, an electric or gas public utility may not disconnect heating service to any residential consumer who is a participant in good standing in the Percentage of Income Payment Plan.

(220 ILCS 5/8-306 new)

Sec. 8-306. Bad business debt. If a public utility writes off an uncollectable account arrearage as a bad business debt on its State or federal income tax return, the utility shall cease all collection activities for that debt and write the indebtedness off of its books.

Section 10. The Energy Assistance Act is amended by changing Sections 3, 4, 5, 8, and 13 and by adding Section 4.5 as follows:

(305 ILCS 20/3) (from Ch. 111 2/3, par. 1403)

Sec. 3. Definitions. As used in this Act, unless the context otherwise requires:

(a) the terms defined in Sections 3-101 through 3-121 of The Public Utilities Act have the meanings ascribed to them in that Act;

(b) "Department" means the Department of Public Aid Commerce and Community Affairs;

(c) "energy provider" means any utility, municipal utility, cooperative utility, or any other corporation or individual which provides winter energy services;

(d) "winter" means the period from November 1 of any year through April 30 of the following year.

(Source: P.A. 86-127; 87-14; revised 12-6-03.)

(305 ILCS 20/4) (from Ch. 111 2/3, par. 1404)

Sec. 4. Energy Assistance Program.

(a) The Department of Commerce and Economic Opportunity Community Affairs is hereby authorized to institute a program to ensure the availability and affordability of heating and electric service to low income citizens. Notwithstanding any other provision of law to the contrary, on and after July 1, 2004, the Department of Public Aid The Department shall implement the program by rule promulgated pursuant to The Illinois Administrative Procedure Act. The program shall be consistent with the purposes and objectives of this Act and with all other specific requirements provided herein. The Department may enter into such contracts and other agreements with local agencies as may be necessary for the purpose of administering the energy assistance program.

(b) Nothing in this Act shall be construed as altering or limiting the authority conferred on the Illinois Commerce Commission by the Public Utilities Act to regulate all aspects of the provision of public utility service, including but not limited to the authority to make rules and adjudicate disputes between utilities and customers related to eligibility for utility service, deposits, payment practices, discontinuance of service, and the treatment of arrearages owing for previously rendered utility service.

(Source: P.A. 92-690, eff. 7-18-02; revised 12-6-03.)

(305 ILCS 20/4.5 new)

Sec. 4.5. Percentage of Income Payment Plan.

(a) As part of the energy assistance program established under Section 4, the Department must institute a Percentage of Income Payment Plan to more adequately ensure the affordability of heating service to low income Illinois residents. The Department shall implement the Plan by rule. The Plan shall be consistent with the objectives of this Section. The Department shall ensure that the Plan is in operation by September 1, 2005, and may enter into such contracts and other agreements with local agencies as may be necessary for the purpose of administering the Plan.

(b) Illinois LIHEAP consumers shall have the option of participating in the Percentage of Income Payment Plan. The Percentage of Income Payment Plan shall be a year-round program that requires participants to pay 7% of their income for the primary energy source for heating and 3% of their income for the secondary energy source for heating. Households that use electricity as their sole energy source can elect to participate in the Percentage of Income Payment Plan and pay 10% of their income to the utility supplying electricity. All percentage of income payments shall first be applied to the consumer's current monthly payment obligation. For months in which the consumer's payment under the Percentage of Income Payment Plan exceeds his or her current bill, the balance of the payment shall be applied to any default under a deferred payment plan or, if none, to the consumer's arrearage, if any. If there is no default amount or arrearage, the overpayment shall be retained by the utility and treated as a budget plan payment to be credited to the consumer against potential arrearages in the future. For months in which the consumer's payment under the Percentage of Income Payment Plan is less than his or her current bill, the balance of the current bill shall be paid to the utility out of the State LIHEAP fund. Prior to entering into a Percentage of Income Payment Plan, the local area agency shall counsel the consumer as to the possible benefits of the Percentage of Income Payment Plan and will work with the consumer to develop an energy payment plan that meets the needs of the consumer.

(c) The amount of the monthly LIHEAP payment made to the utility on the behalf of the consumer shall be based on an annual report on typical energy usage for the climate zone in which the consumer receives heating service as determined by the Department of Natural Resources. Any monthly consumption of energy for heating services that is more than one standard deviation above the typical energy usage shall be the responsibility of the consumer.

(d) The LIHEAP flat grant direct vendor payment program in existence prior to the effective date of this amendatory Act of the 94th General Assembly shall continue in effect for eligible consumers that (i) have utility costs included as an undesignated portion of the rent("heat-in-rent" consumers) or (ii) have home-delivered fuel or that purchase fuel in bulk for residential use. However, "heat-in-rent" consumers who pay separately for electricity may participate in a 3% percentage of income payment plan, and "electricity-in rent" consumers who pay separately for gas service may participate in a 7% percentage of income payment plan.

(e) A LIHEAP flat grant shall be available to eligible consumers who elect not to participate in the Percentage of Income Payment Program. The amount of the flat grant shall be set by the Department of Public Aid in consultation with the Policy Advisory Committee, taking into consideration the amount of available LIHEAP funds. The flat grant amount shall be set at a level that encourages participation in the Percentage of Income Payment Plan.

(f) An Emergency Services grant under LIHEAP shall be limited to the amount necessary to reconnect service to the household or to repair equipment, purchase replacement parts, or obtain services necessary to restore or maintain heating services to the household.

(g) The General Assembly finds that energy efficiency is an important component of LIHEAP because it helps the State control costs by lowering the heating bills of consumers who have applied for and been determined to be eligible for LIHEAP. The Department, in consultation with the Policy Advisory Committee, shall establish an energy efficiency curriculum and training program targeted to high-cost, high-volume use buildings occupied by LIHEAP consumers with the goal of reducing the energy bills of the occupants. Acceptance of energy efficiency training and weatherization services provided under LIHEAP shall be a condition for participation in the Percentage of Income Payment Plan. The energy efficiency component of LIHEAP shall (i) target the highest cost households for weatherization and (ii) provide no-cost or low-cost efficiency strategies for all participants. The Department and the Policy Advisory Committee shall review appropriate data provided by consumers, local area agencies, and other appropriate sources in deciding how to target energy efficiency resources.

(h) The costs of operating the Percentage of Income Payment Plan as part of LIHEAP shall be paid out of the Supplemental Low-Income Energy Assistance Fund. To meet the anticipated increase in costs, the Department shall use financial hedging tools to minimize its vulnerability to periodic swings in the cost of natural gas. The Department, in consultation with the Policy Advisory Committee, shall predetermine the annual amount of LIHEAP funding available for hedging strategies, but in no case shall that amount exceed 15% of the amount in the Supplemental Low-Income Energy Assistance Fund. The amount available shall be based on projections of the cost of natural gas and the projected natural gas consumption by consumers participating in a Percentage of Income Payment Plan. The Department shall put out for competitive bidding the development and implementation of the hedging strategy. Revenue earned by the use of hedging strategies shall either be used to cover additional program costs in the current LIHEAP year or to cover costs in future LIHEAP program years.

(i) The Department may adopt any rules necessary for the implementation of this Section.

(305 ILCS 20/5) (from Ch. 111 2/3, par. 1405)

Sec. 5. Policy Advisory Council.

(a) Within the Department of Public Aid Commerce and Community Affairs is created a Low Income Energy Assistance Policy Advisory Council.

(b) On and after July 1, 2004, the The Council shall be chaired by the Director of Public Aid Commerce and Community Affairs or his or her designee. There shall be 20 members of the Low Income Energy Assistance Policy Advisory Council, including the chairperson and the following members:

(1) one member designated by the Illinois Commerce Commission;

(2) one member designated by the Illinois Department of Natural Resources;

(3) one member designated by the Illinois Energy Association to represent electric public utilities serving in excess of 1 million customers in this State;

(4) one member agreed upon by gas public utilities that serve more than 500,000 and fewer than 1,500,000 customers in this State;

(5) one member agreed upon by gas public utilities that serve 1,500,000 or more customers in this State;

(6) one member designated by the Illinois Energy Association to represent combination gas and electric public utilities;

(7) one member agreed upon by the Illinois Municipal Electric Agency and the Association of Illinois Electric Cooperatives;

(8) one member agreed upon by the Illinois Industrial Energy Consumers;

(9) three members designated by the Department to represent low income energy consumers;

(10) two members designated by the Illinois Community Action Association to represent local agencies that assist in the administration of this Act;

(11) one member designated by the Citizens Utility Board to represent residential energy consumers;

(12) one member designated by the Illinois Retail Merchants Association to represent commercial energy customers;

(13) one member designated by the Department to represent independent energy providers; and

(14) three members designated by the Mayor of the City of Chicago.

(c) Designated and appointed members shall serve 2 year terms and until their successors are appointed and qualified. The designating organization shall notify the chairperson of any changes or substitutions of a designee within 10 business days of a change or substitution. Members shall serve without compensation, but may receive reimbursement for actual costs incurred in fulfilling their duties as members of the Council.

(d) The Council shall have the following duties:

(1) to monitor the administration of this Act to ensure effective, efficient, and coordinated program development and implementation;

(2) to assist the Department in developing and administering rules and regulations required to be promulgated pursuant to this Act in a manner consistent with the purpose and objectives of this Act;

(3) to facilitate and coordinate the collection and exchange of all program data and other information needed by the Department and others in fulfilling their duties pursuant to this Act;

(4) to advise the Department on the proper level of support required for effective administration of the Act;

(5) to provide a written opinion concerning any regulation proposed pursuant to this Act, and to review and comment on any energy assistance or related plan required to be prepared by the Department;

(6) to advise the Department on the use of funds collected pursuant to Section 11 of this Act, and on any changes to existing low income energy assistance programs to make effective use of such funds, so long as such uses and changes are consistent with the requirements of the Act.

(Source: P.A. 92-690, eff. 7-18-02; revised 12-6-03.)

(305 ILCS 20/8) (from Ch. 111 2/3, par. 1408)

Sec. 8. Program Reports.

(a) The Department of Natural Resources shall prepare and submit to the Governor and the General Assembly reports on September 30 biennially, beginning in 2003, evaluating the effectiveness of the energy assistance and weatherization policies authorized by this Act. The first report shall cover such effects during the first winter during which the program authorized by this Act, is in operation, and successive reports shall cover effects since the issuance of the preceding report.

(1) Reports issued pursuant to this Section shall be limited to, information concerning the effects of the policies authorized by this Act on (1) the ability of eligible applicants to obtain and maintain adequate and affordable winter energy services and (2) changes in the costs and prices of winter energy services for people who do not receive energy assistance pursuant to this Act.

(2) The Department of Natural Resources shall by September 30, 2002, in consultation with the Policy Advisory Council, determine the kinds of numerical and other information needed to conduct the evaluations required by this Section, and shall advise the Policy Advisory Council of such information needs in a timely manner. The Department of Commerce and Economic Opportunity or its successor, the Department of Public Aid Community Affairs, the Department of Human Services, and the Illinois Commerce Commission shall each provide such information as the Department of Natural Resources may require to ensure that the evaluation reporting requirement established by this Section can be met.

(b) On or before December 31, 2002, 2004, 2006, and 2007, the Department of Commerce and Economic Opportunity or its successor, the Department of Public Aid, shall prepare a report for the General Assembly on the expenditure of funds appropriated for the programs authorized under this Act.

(c) On or before December 31 of each year in 2004, 2006, and 2007, the Department shall, in consultation with the Council, prepare and submit evaluation reports to the Governor and the General Assembly outlining the effects of the program designed under this Act on the following as it relates to the propriety of continuing the program:

(1) the definition of an eligible low income residential customer;

(2) access of low income residential customers to essential energy services;

(3) past due amounts owed to utilities by low income persons in Illinois;

(4) appropriate measures to encourage energy conservation, efficiency, and responsibility among low income residential customers;

(5) the activities of the Department in the development and implementation of energy assistance and related policies and programs, which characterizes progress toward meeting the objectives and requirements of this Act, and which recommends any statutory changes which might be needed to further such progress.

(d) The Department of Commerce and Economic Opportunity shall by September 30, 2002 in consultation with the Council determine the kinds of numerical and other information needed to conduct the evaluations required by this Section.

(e) The Illinois Commerce Commission shall require each public utility providing heating or electric service to compile and submit any numerical and other information needed by the Department of Natural Resources to meet its reporting obligations.

(Source: P.A. 92-690, eff. 7-18-02; revised 12-6-03.)

(305 ILCS 20/13)

Sec. 13. Supplemental Low-Income Energy Assistance Fund.

(a) The Supplemental Low-Income Energy Assistance Fund is hereby created as a special fund in the State Treasury. The Supplemental Low-Income Energy Assistance Fund is authorized to receive, by statutory deposit, the moneys collected pursuant to this Section. Subject to appropriation, the Department shall use moneys from the Supplemental Low-Income Energy Assistance Fund for payments to electric or gas public utilities, municipal electric or gas utilities, and electric cooperatives on behalf of their customers who are participants in the program authorized by Section 4 of this Act, for administration of the Percentage of Income Payment Plan under Section 4.5 of this Act, for the provision of weatherization services and for administration of the Supplemental Low-Income Energy Assistance Fund. The yearly expenditures for weatherization may not exceed 10% of the amount collected during the year pursuant to this Section. The yearly administrative expenses of the Supplemental Low-Income Energy Assistance Fund may not exceed 10% of the amount collected during that year pursuant to this Section.

(b) Notwithstanding the provisions of Section 16-111 of the Public Utilities Act but subject to subsection (k) of this Section, each public utility, electric cooperative, as defined in Section 3.4 of the Electric Supplier Act, and municipal utility, as referenced in Section 3-105 of the Public Utilities Act, that is engaged in the delivery of electricity or the distribution of natural gas within the State of Illinois shall, effective January 1, 1998, assess each of its customer accounts a monthly Energy Assistance Charge for the Supplemental Low-Income Energy Assistance Fund. The delivering public utility, municipal electric or gas utility, or electric or gas cooperative for a self-assessing purchaser remains subject to the collection of the fee imposed by this Section. The monthly charge shall be as follows:

(1) $0.40 per month on each account for residential electric service;

(2) $0.40 per month on each account for residential gas service;

(3) $4 per month on each account for non-residential electric service which had less than 10 megawatts of peak demand during the previous calendar year;

(4) $4 per month on each account for non-residential gas service which had distributed to it less than 4,000,000 therms of gas during the previous calendar year;

(5) $300 per month on each account for non-residential electric service which had 10 megawatts or greater of peak demand during the previous calendar year; and

(6) $300 per month on each account for non-residential gas service which had 4,000,000 or more therms of gas distributed to it during the previous calendar year.

(c) For purposes of this Section:

(1) "residential electric service" means electric utility service for household purposes delivered to a dwelling of 2 or fewer units which is billed under a residential rate, or electric utility service for household purposes delivered to a dwelling unit or units which is billed under a residential rate and is registered by a separate meter for each dwelling unit;

(2) "residential gas service" means gas utility service for household purposes distributed to a dwelling of 2 or fewer units which is billed under a residential rate, or gas utility service for household purposes distributed to a dwelling unit or units which is billed under a residential rate and is registered by a separate meter for each dwelling unit;

(3) "non-residential electric service" means electric utility service which is not residential electric service; and

(4) "non-residential gas service" means gas utility service which is not residential gas service.

(d) At least 45 days prior to the date on which it must begin assessing Energy Assistance Charges, each public utility engaged in the delivery of electricity or the distribution of natural gas shall file with the Illinois Commerce Commission tariffs incorporating the Energy Assistance Charge in other charges stated in such tariffs.

(e) The Energy Assistance Charge assessed by electric and gas public utilities shall be considered a charge for public utility service.

(f) By the 20th day of the month following the month in which the charges imposed by the Section were collected, each public utility, municipal utility, and electric cooperative shall remit to the Department of Revenue all moneys received as payment of the Energy Assistance Charge on a return prescribed and furnished by the Department of Revenue showing such information as the Department of Revenue may reasonably require. If a customer makes a partial payment, a public utility, municipal utility, or electric cooperative may elect either: (i) to apply such partial payments first to amounts owed to the utility or cooperative for its services and then to payment for the Energy Assistance Charge or (ii) to apply such partial payments on a pro-rata basis between amounts owed to the utility or cooperative for its services and to payment for the Energy Assistance Charge.

(g) The Department of Revenue shall deposit into the Supplemental Low-Income Energy Assistance Fund all moneys remitted to it in accordance with subsection (f) of this Section.

(h) (Blank).

On or before December 31, 2002, the Department shall prepare a report for the General Assembly on the expenditure of funds appropriated from the Low-Income Energy Assistance Block Grant Fund for the program authorized under Section 4 of this Act.

(i) The Department of Revenue may establish such rules as it deems necessary to implement this Section.

(j) The Department of Public Aid Commerce and Community Affairs may establish such rules as it deems necessary to implement this Section.

(k) The charges imposed by this Section shall only apply to customers of municipal electric or gas utilities and electric or gas cooperatives if the municipal electric or gas utility or electric or gas cooperative makes an affirmative decision to impose the charge. If a municipal electric or gas utility or an electric cooperative makes an affirmative decision to impose the charge provided by this Section, the municipal electric or gas utility or electric cooperative shall inform the Department of Revenue in writing of such decision when it begins to impose the charge. If a municipal electric or gas utility or electric or gas cooperative does not assess this charge, the Department may not use funds from the Supplemental Low-Income Energy Assistance Fund to provide benefits to its customers under the program authorized by Section 4 of this Act.

In its use of federal funds under this Act, the Department may not cause a disproportionate share of those federal funds to benefit customers of systems which do not assess the charge provided by this Section.

This Section is repealed effective December 31, 2007 unless renewed by action of the General Assembly. The General Assembly shall consider the results of the evaluations described in Section 8 in its deliberations.

(Source: P.A. 92-690, eff. 7-18-02; revised 12-6-03.)

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