HB3037sam001 97TH GENERAL ASSEMBLY

Sen. Don Harmon

Filed: 5/20/2011

09700HB3037sam001 LRB097 05720 ASK 55986 a

AMENDMENT TO HOUSE BILL 3037

AMENDMENT NO. ______. Amend House Bill 3037 by replacing everything after the enacting clause with the following:

"Section 5. The Public Utilities Act is amended by changing Section 19-145 and by adding Section 19-150 as follows:

(220 ILCS 5/19-145)

Sec. 19-145. Automatic adjustment clause tariff; uncollectibles uncollectibles.

(a) A gas utility shall be permitted, at its election, to recover through an automatic adjustment clause tariff the incremental difference between its actual uncollectible amount as set forth in Account 904 in the utility's most recent annual Form 21 ILCC and the uncollectible amount included in the utility's rates for the period reported in such annual Form 21 ILCC. The Commission may, in a proceeding to review a general rate case filed subsequent to the effective date of the tariff established under this Section, prospectively switch, from using the actual uncollectible amount set forth in Account 904 to using net write-offs in such tariff, but only if net write-offs are also used to determine the utility's uncollectible amount in rates. In the event the Commission requires such a change, it shall be made effective at the beginning of the first full calendar year after the new rates approved in such proceeding are first placed in effect and an adjustment shall be made, if necessary, to ensure the change does not result in double-recovery or unrecovered uncollectible amounts for any year. For purposes of this Section, "uncollectible amount" means the expense set forth in Account 904 of the utility's Form 21 ILCC or cost of net write-offs as appropriate. In the event the utility's rates change during the period of time reported in its most recent annual Form 21 ILCC, the uncollectible amount included in the utility's rates during such period of time for purposes of this Section will be a weighted average, based on revenues earned during such period by the utility under each set of rates, of the uncollectible amount included in the utility's rates at the beginning of such period and at the end of such period. This difference may either be a charge or a credit to customers depending on whether the uncollectible amount is more or less than the uncollectible amount then included in the utility's rates.

(b) The tariff may be established outside the context of a general rate case filing, and shall specify the terms of any applicable audit. The Commission shall review and by order approve, or approve as modified, the proposed tariff within 180 days after the date on which it is filed. Charges and credits under the tariff shall be allocated to the appropriate customer class or classes. In addition, customers who do not purchase their gas supply from a gas utility and whose receivables are not included in a purchase of receivable program under Section 19-150 shall not be charged by the utility for uncollectible amounts associated with gas supply provided by the utility to the utility's customers. Upon approval of the tariff, the utility shall, based on the 2008 Form 21 ILCC, apply the appropriate credit or charge based on the full year 2008 amounts for the remainder of the 2010 calendar year. Starting with the 2009 Form 21 ILCC reporting period and each subsequent period, the utility shall apply the appropriate credit or charge over a 12-month period beginning with the June billing period and ending with the May billing period, with the first such billing period beginning June 2010.

(c) The approved tariff shall provide that the utility shall file a petition with the Commission annually, no later than August 31st, seeking initiation of an annual review to reconcile all amounts collected with the actual uncollectible amount in the prior period. As part of its review, the Commission shall verify that the utility collects no more and no less than its actual uncollectible amount in each applicable Form 21 ILCC reporting period. The Commission shall review the prudence and reasonableness of the utility's actions to pursue minimization and collection of uncollectibles which shall include, at a minimum, the 6 enumerated criteria set forth in this Section. The Commission shall determine any required adjustments and may include suggestions for prospective changes in current practices. Nothing in this Section or the implementing tariffs shall affect or alter the gas utility's existing obligation to pursue collection of uncollectibles or the gas utility's right to disconnect service. A utility that has in effect a tariff authorized by this Section shall pursue minimization of and collection of uncollectibles through the following activities, including but not limited to:

(1) identifying customers with late payments;

(2) contacting the customers in an effort to obtain payment;

(3) providing delinquent customers with information about possible options, including payment plans and assistance programs;

(4) serving disconnection notices;

(5) implementing disconnections based on the level of uncollectibles; and

(6) pursuing collection activities based on the level of uncollectibles.

(d) Nothing in this Section shall be construed to require a utility to immediately disconnect service for nonpayment.

(Source: P.A. 96-33, eff. 7-10-09.)

(220 ILCS 5/19-150 new)

Sec. 19-150. Purchase of receivables.

(a) A gas utility with more than 100,000 customers that offers transportation service to residential and small commercial customers shall file a tariff pursuant to Article IX of this Act within 6 months after the date of this amendatory Act of the 97th General Assembly that provides qualifying alternative gas suppliers with the option to have the gas utility purchase their receivables for gas sales that are (1) made to residential retail customers and small commercial customers, as those terms are defined in Section 19-105 of this Act, and (2) charged on the gas utility's bill. For purposes of this Section, "qualifying alternative gas supplier" means an alternative gas supplier that (i) is certified under Section 19-110 of this Act and (ii) includes its charges for gas sales made in a gas utility's service area on that gas utility's bill pursuant to Section 19-135 of this Act.

(b) Receivables for gas sales of qualifying alternative gas suppliers that are charged on the gas utility's bill shall be purchased by the gas utility at a discount rate of 1%. The rate shall include 0.5% to be retained by the gas utility for recovery of deemed intangible costs, and neither this 0.5% portion of the rate, nor the deemed intangible costs, are subject to review by the Commission. The remaining 0.5% of the 1% discount rate shall be retained by the gas utility for recovery of the utility's administrative costs and is subject to periodic review by the Commission. Any portion of the 0.5% intended for recovery of administrative costs that is found by the Commission, after notice and hearing, to be in excess of prudent and reasonable costs shall be refunded to all customers, including customers of qualifying alternative gas suppliers using purchase of receivables. For purposes of this Section, "administrative costs" means all of the utility's costs incurred in its administration of the purchase of receivables program except for the deemed intangible costs.

(c) In making a just and reasonable determination on the administrative costs, the Commission shall consider:

(1) the gas utility's reasonable start-up costs and administrative costs associated with the gas utility's purchase of receivables;

(2) the impact if used by the gas utility of an automatic adjustment clause tariff pursuant to Section 19-145 of this Act to recover uncollectible expense; and

(3) whether the gas utility recovers uncollectible expense from customers of qualifying alternative gas suppliers through any of its existing rates or charges.

(d) Reasonable start-up costs and administrative costs associated with the gas utility's purchase of receivables shall in the first instance be recovered from qualifying alternative gas suppliers through the utility's discount rate assessed by the utility on those qualifying alternative gas suppliers who have the utility purchase their receivables. In order to prevent barriers to suppliers' use of a purchase of receivables program and ensure full cost recovery for the gas utility in a timely manner, a portion of the gas utility's reasonable start-up costs, subject to reasonable carrying charges as determined by the Commission, may be deferred for later recovery from qualifying alternative gas suppliers who have the gas utility purchase their receivables through the discount rate or a monthly per bill fee if such deferral is deemed to be necessary by the Commission. The gas utility retains the rights to (1) impose the same terms on retail customers supplied by qualifying alternative gas suppliers with respect to credit and collection, including requests for deposits, and (2) disconnect the retail customers, if it does not receive payment for its tariffed services or purchased receivables, in the same manner that it would be permitted to if the retail customers had purchased gas supply service from the gas utility.

(e) The tariff filed pursuant to this Section shall permit the gas utility to recover from retail customers any uncollected receivables that may arise as a result of the purchase of receivables under this Section. The tariff filed pursuant to this Section shall provide for recovery of the prudently incurred costs associated with the provision of this service pursuant to this Section and may also include other just and reasonable terms and conditions. Nothing in this Section permits the double recovery of uncollectible expenses from customers.

(f) Amounts collected by the utility attributable to the 0.5% portion of the discount rate under this Section for deemed intangible costs shall not be used by the Commission to lower the base rate revenue requirement of the utility in any subsequent rate case. In order to limit the implications on short-term debt of the utility, a utility may choose to delay purchase of unpaid receivables until the bill due date. Other than for initial implementation of the purchase of receivables program, when so choosing, a utility shall remit payments to the alternative gas suppliers no more than 2 business days following the due date.

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