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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Public Utilities Act is amended by changing | ||||||||||||||||||||||||||||||
5 | Sections 8-102, 8-401, and 9-213 and by adding Section 9-219 as | ||||||||||||||||||||||||||||||
6 | follows:
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7 | (220 ILCS 5/8-102) (from Ch. 111 2/3, par. 8-102)
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8 | Sec. 8-102. Audit or investigation. The Commission is | ||||||||||||||||||||||||||||||
9 | authorized to
conduct or order a management audit or | ||||||||||||||||||||||||||||||
10 | investigation of any public utility or
part thereof. The audit | ||||||||||||||||||||||||||||||
11 | or investigation may examine the
reasonableness, prudence, or | ||||||||||||||||||||||||||||||
12 | efficiency of any aspect of the
utility's operations, costs, | ||||||||||||||||||||||||||||||
13 | management, decisions or functions that may affect the | ||||||||||||||||||||||||||||||
14 | adequacy, safety, efficiency or reliability of utility
service | ||||||||||||||||||||||||||||||
15 | or the reasonableness or prudence of the costs
underlying rates | ||||||||||||||||||||||||||||||
16 | or charges for utility service , including power procurement | ||||||||||||||||||||||||||||||
17 | costs . The Commission may conduct or
order a management audit | ||||||||||||||||||||||||||||||
18 | or investigation only when it has reasonable grounds
to believe | ||||||||||||||||||||||||||||||
19 | that the audit or investigation is necessary to assure
that the | ||||||||||||||||||||||||||||||
20 | utility is providing adequate, efficient, reliable, safe,
and | ||||||||||||||||||||||||||||||
21 | least-cost service and charging only just and reasonable rates
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22 | therefor, or that the audit or investigation is likely to be
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23 | cost-beneficial in enhancing the quality of service or the
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1 | reasonableness of rates therefor. The Commission shall, before | ||||||
2 | initiating
any such audit or investigation, issue an order | ||||||
3 | describing the grounds for
the audit or investigation and the | ||||||
4 | appropriate scope and nature of
the audit or investigation. The | ||||||
5 | scope and nature of any such
audit or investigation shall be | ||||||
6 | reasonably related to the grounds relied upon
by the Commission | ||||||
7 | in its order.
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8 | Any audit or investigation authorized pursuant to this | ||||||
9 | Section may be
conducted by the Commission, or if the | ||||||
10 | Commission is unable to adequately
perform the audit or | ||||||
11 | investigation, the Commission may arrange for
it to be | ||||||
12 | conducted by persons independent of the utility and selected by | ||||||
13 | the
Commission. The cost of an independent audit shall be borne | ||||||
14 | initially
by the utility, but shall be recovered as an expense | ||||||
15 | through normal
ratemaking procedures. Any audit or | ||||||
16 | investigation shall be conducted in
accordance with generally | ||||||
17 | accepted auditing standards.
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18 | (Source: P.A. 90-655, eff. 7-30-98.)
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19 | (220 ILCS 5/8-401) (from Ch. 111 2/3, par. 8-401)
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20 | Sec. 8-401. (a) Every public utility subject to this Act | ||||||
21 | shall provide
service and facilities which are in all respects | ||||||
22 | adequate, efficient,
reliable and environmentally safe and | ||||||
23 | which, consistent with these
obligations, constitute the | ||||||
24 | least-cost means of meeting the utility's service obligations. | ||||||
25 | (b) Every 3 years, each electric utility shall file with |
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1 | the Commission an energy plan for its service territory | ||||||
2 | consistent with the planning objectives and requirements | ||||||
3 | described in this Article. The Commission shall review each | ||||||
4 | such plan and provide testimony before the Commission in the | ||||||
5 | hearings required by this Article as to the adequacy of each | ||||||
6 | plan in satisfying the objectives of this Article and this Act. | ||||||
7 | Subsequent to the effective date of this amendatory Act of the | ||||||
8 | 95th General Assembly, the next such utility electric plans | ||||||
9 | shall be filed on July 1, 2008. | ||||||
10 | (c) In preparing the plans required under subsection (b) of | ||||||
11 | this Section each electric utility shall include the following: | ||||||
12 | (1) Year-by-year, 20-year demand projections for each | ||||||
13 | electric utility for services and projected customers by | ||||||
14 | major service classifications of the electric utility, as | ||||||
15 | well as the basis for the projections, including an | ||||||
16 | examination of possible alternative levels of demand and | ||||||
17 | discussions of the forecasting methodologies and input | ||||||
18 | variables used in making the forecasts. In particular the | ||||||
19 | actual and forecasted impact of conservation, renewable | ||||||
20 | resources, cogeneration, and other improvements in energy | ||||||
21 | efficiency shall be identified and analyzed. | ||||||
22 | (2) Year-by-year projections of all available sources | ||||||
23 | of supply for each of the next 20 years for each electric | ||||||
24 | utility, including, but not limited to: | ||||||
25 | (A) available electric generating capacity, | ||||||
26 | indicating planned additions, retirements, purchases, |
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1 | substantial planned outages, deratings, and all other | ||||||
2 | expected changes in levels of generating and | ||||||
3 | production capacity; | ||||||
4 | (B) the projected utilization of cogeneration, and | ||||||
5 | nonconventional technologies relying on renewable | ||||||
6 | resources, identifying specifically any such capacity | ||||||
7 | expected to be available for purchase by the utility; | ||||||
8 | and | ||||||
9 | (C) a discussion of all existing and proposed | ||||||
10 | programs and policies to promote and ensure the full | ||||||
11 | utilization of all practical and economical energy | ||||||
12 | conservation; | ||||||
13 | (3) A demonstration that the proposed plan represents | ||||||
14 | the least-cost means of satisfying energy service needs | ||||||
15 | consistent with the objective of this Section, including: | ||||||
16 | (A) a discussion of how the utility has determined | ||||||
17 | the appropriate level of reliability to be used in its | ||||||
18 | forecasts and plans, and how this determination has | ||||||
19 | influenced its forecasts and plans; | ||||||
20 | (B) a demonstration that the plan fully considers | ||||||
21 | and utilizes all available, practical, and economical | ||||||
22 | conservation, renewable resources, cogeneration, and | ||||||
23 | improvements in energy efficiency; | ||||||
24 | (C) with respect to the planned construction of any | ||||||
25 | new generation or production facilities: | ||||||
26 | (i) a discussion of proposed and alternative |
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1 | sites and of the likely or possible environmental | ||||||
2 | consequences of the construction and operation of | ||||||
3 | planned facilities; | ||||||
4 | (ii) a discussion of the types of fuel and | ||||||
5 | methods of generation to be employed at planned | ||||||
6 | facilities; | ||||||
7 | (iii) a discussion of the operating and | ||||||
8 | capital costs of planned facilities and the | ||||||
9 | expected financial impacts and requirements of | ||||||
10 | construction and operation; and | ||||||
11 | (iv) a discussion of the expected impact of any | ||||||
12 | planned facility on system reserve margins and | ||||||
13 | rates at the time of proposed inclusion into rate | ||||||
14 | base; and | ||||||
15 | (D) a demonstration that the utility's rate design | ||||||
16 | accurately reflects the long-term cost of service for | ||||||
17 | each customer class or group and provides full and | ||||||
18 | adequate incentives for each customer class or group to | ||||||
19 | conserve energy. | ||||||
20 | The Commission shall determine the precise form, scope, and | ||||||
21 | contents of such energy plans consistent with the requirements | ||||||
22 | of this paragraph and shall have the power to require the | ||||||
23 | provision of such additional date, information, and analysis as | ||||||
24 | necessary to effectuate the planning objectives of this | ||||||
25 | Section.
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26 | (Source: P.A. 84-617.)
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1 | (220 ILCS 5/9-213) (from Ch. 111 2/3, par. 9-213)
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2 | Sec. 9-213. The cost of new electric utility generating | ||||||
3 | plants and
significant additions to electric utility | ||||||
4 | generating plants shall not be
included in the rate base of any | ||||||
5 | utility unless such cost is reasonable and prudently incurred .
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6 | Prior to including the cost of plants or additions to utility | ||||||
7 | plants in the
rate base, the Commission shall conduct an audit | ||||||
8 | of such costs in order to
ascertain whether the cost associated | ||||||
9 | with the new generating plant or the
addition to electric | ||||||
10 | utility generating plant is reasonable. However, the
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11 | Commission may, for good cause shown in individual cases, waive | ||||||
12 | the
auditing requirement for any generating facility which | ||||||
13 | meets all of the
following requirements:
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14 | (1) the facility is wholly owned and operated by a | ||||||
15 | public utility, as
otherwise defined in this Act, which | ||||||
16 | serves less than 20,000 electric
customers within the State | ||||||
17 | of Illinois, and
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18 | (2) the facility is designed to generate less than 50
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19 | megawatts of electricity, and
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20 | (3) the facility is located outside of the State of | ||||||
21 | Illinois.
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22 | If the Commission is unable to conduct such an audit, the | ||||||
23 | Commission
shall arrange for it to be conducted by persons | ||||||
24 | independent of the utility
and selected by the Commission. The | ||||||
25 | cost of such an independent audit
shall be borne initially by |
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1 | the utility, but shall be recovered as an
expense through | ||||||
2 | normal ratemaking procedures. Any such audits shall be
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3 | conducted in accordance with generally accepted auditing | ||||||
4 | standards and
shall include but not be limited to costs | ||||||
5 | associated with materials, labor,
equipment, professional | ||||||
6 | services and other direct and indirect costs.
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7 | "Significant additions to the electric utility generating | ||||||
8 | plant", as
used in this Section, shall not include a public | ||||||
9 | utility's investment in
pollution control devices for the | ||||||
10 | control of sulfur dioxide emissions.
Nothing in this Section is | ||||||
11 | intended to affect the provisions of Section
9-214 of this Act.
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12 | "Reasonable", as used in this Section, means that a | ||||||
13 | utility's decisions,
construction, and supervision of | ||||||
14 | construction, underlying the costs of new
electric utility | ||||||
15 | generating plants and significant additions to electric
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16 | utility generating plants resulted in efficient, economical | ||||||
17 | and timely
construction. In determining the reasonableness of | ||||||
18 | plant costs, the
Commission shall consider the knowledge and | ||||||
19 | circumstances prevailing at the
time of each relevant utility | ||||||
20 | decision or action.
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21 | Nothing in this Section shall prevent or limit the | ||||||
22 | Commission from either
entering into and conducting joint | ||||||
23 | audits concerning such electric
generating plants with the | ||||||
24 | regulatory authority of another state, or from
relying on | ||||||
25 | audits conducted by the regulatory authority of another state | ||||||
26 | in
lieu of an audit as required by this Section.
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1 | (Source: P.A. 87-435.)
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2 | (220 ILCS 5/9-219 new)
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3 | Sec. 9-219. Rates and least cost power procurement | ||||||
4 | practices. Notwithstanding the provisions of Section 9-201, | ||||||
5 | the Commission shall authorize a decrease of rates and charges | ||||||
6 | based upon changes in the cost of purchased power if it | ||||||
7 | determines that a utility's power procurement costs were not | ||||||
8 | the lowest cost possible. Annually, the Commission shall | ||||||
9 | initiate public hearings to determine whether a utility's | ||||||
10 | purchased power is prudent. In each proceeding, the burden of | ||||||
11 | proof shall be upon the utility to establish prudence of it | ||||||
12 | purchased power costs. The Commission shall issue its final | ||||||
13 | order in each such annual proceeding for an electric utility by | ||||||
14 | December 31 of that year. The Commission shall adopt rules | ||||||
15 | specifying least cost power procurement practices.
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16 | Section 99. Effective date. This Act takes effect upon | ||||||
17 | becoming law.
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