093_HB2313ham001











                                     LRB093 07456 JLS 13755 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 ILCS5/9-220.3 new)
10        Sec. 9-220.3.  Asbestos surcharges authorized.
11        (a)  The  Commission  shall  authorize an electric or gas
12    utility to implement a surcharge ("asbestos  rider"),  to  be
13    effective  no  earlier than January 1, 2007, to recover costs
14    associated with asbestos; provided  that,  for  any  calendar
15    year,  the  amount  of  the  surcharge for an electric or gas
16    utility shall not exceed 5% of  its  annual  Illinois  retail
17    revenue  for  sales  to ultimate customers as reported in the
18    Commission's Form 21 of the utility for 2002.
19        (b)  Recoverable costs under  an  asbestos  rider  for  a
20    given year shall consist of the prudent costs incurred by the
21    electric or gas utility for:
 
                            -2-      LRB093 07456 JLS 13755 a
 1             (1)  injury  and  damage awards relating to asbestos
 2        exposure;
 3             (2)  litigation    expenses,    including     legal,
 4        consulting, dispute resolution, and settlement costs; and
 5             (3)  costs   related   to   insurance  coverage  and
 6        insurance claims.
 7        Recoverable costs under an asbestos rider, however, shall
 8    not include any internal labor costs of the electric  or  gas
 9    utility.
10        (c)  The  cost  of  site  remediation (including removal,
11    encapsulation,  or  other  appropriate  remediation  methods)
12    shall also be recoverable under  an  asbestos  rider  if  the
13    costs are associated with remediation of electric property or
14    gas  property  and  the  site  remediation  is performed by a
15    workforce of skilled  and  trained  employees  equipped  with
16    appropriate  technical  training  and  experience.   Adequate
17    skill,  training,  and  expertise  shall  be  demonstrated by
18    factors such as completion by the employee of  an  accredited
19    or   otherwise  recognized  apprenticeship  program  for  the
20    particular craft, trade, or skill.   "Electric  property"  or
21    "gas  property" shall mean all plant and property in the rate
22    base of  the  electric  utility  or  gas  utility  as  of  or
23    subsequent  to  October  1,  1996,  regardless of whether the
24    electric or  gas  utility  has  subsequently  retired,  sold,
25    leased, or otherwise transferred such plant or property.
26        (d)  Under  an  asbestos  rider,  all  related  insurance
27    recoveries  shall be offset against costs charged through the
28    rider, and allowable costs and revenues under the rider shall
29    be reconciled annually pursuant to  subsection  (f)  of  this
30    Section.   Recoverable  costs,  net  of insurance recoveries,
31    incurred between the effective date of this amendatory Act of
32    the 93rd General  Assembly  and  December  31,  2006  may  be
33    deferred  by  an  electric  utility  for  recovery through an
34    asbestos rider provided that those costs and  recoveries  are
 
                            -3-      LRB093 07456 JLS 13755 a
 1    booked  to  deferred accounts that are not the subject of the
 2    Commission's determination of the  return  on  common  equity
 3    pursuant   to  subsection  (d)  or  (e)  of  Section  16-111.
 4    Recoverable costs,  net  of  insurance  recoveries,  incurred
 5    between the effective date of this amendatory Act of the 93rd
 6    General  Assembly  and December 31, 2006 may be deferred by a
 7    gas utility for recovery through an asbestos  rider  provided
 8    that  those  costs  and  recoveries  are  booked  to deferred
 9    accounts  that  are  not  the  subject  of  the  Commission's
10    determination of the gas utility's return on  common  equity.
11    Additionally, electric and gas utilities may defer amounts in
12    excess  of the 5% annual cap. The electric or gas utility may
13    accrue a carrying charge on the deferred amounts  each  month
14    at  a  rate  equal  to the Monthly Treasury Long-Term Average
15    Rate for that month, as published by the Board  of  Governors
16    of the Federal Reserve System in its weekly H.15  Statistical
17    Release   or   successor   publication.  The  Commission  may
18    determine  that  any  such  deferred  amount  and  associated
19    carrying costs may be amortized over a period not  to  exceed
20    60  months; provided that the deferred amounts shall continue
21    to accrue carrying charges at  the  stated  rate  during  the
22    amortization period.
23        (e)  An  electric  or gas utility seeking to implement an
24    asbestos rider shall file  with  the  Commission  a  verified
25    petition  pursuant to Article IX of this Act seeking approval
26    of a  proposed  rider  complying  with  this  Section.  After
27    hearing,  the Commission shall issue an order on the petition
28    that addresses the following considerations:
29             (1)  rate design  for  recovering  asbestos  related
30        costs;
31             (2)  frequency   of   rate  changes  and  timing  of
32        filings;
33             (3)  true-up mechanisms for over-or-under collection
34        of costs;
 
                            -4-      LRB093 07456 JLS 13755 a
 1             (4)  information requirements;
 2             (5)  methodology for determining amount of  asbestos
 3        costs  in  existing base rates and for deferring asbestos
 4        costs in excess of base rate level;
 5             (6)  guidelines  for  the   prudence   of   incurred
 6        recoverable costs to be used in annual reviews; and
 7             (7)  tariff terms and conditions.
 8        The  Commission  shall  issue its order no later than 330
 9    days after the filing of the petition. Nothing  herein  shall
10    preclude  the  Commission  from  consolidating  petitions  of
11    different   utilities   into  a  single  proceeding  or  from
12    approving  uniform  tariff  provisions  applicable   to   all
13    utilities proposing an asbestos rider. Further, utilities may
14    defer  recoverable  costs  beginning on the effective date of
15    this amendatory Act of the 93rd General Assembly irrespective
16    of the date on which the Commission issues an order approving
17    an asbestos rider.
18        (f)  Annually, the Commission shall initiate a proceeding
19    to reconcile any amounts collected under the tariff with  the
20    actual   amount   of   prudent  recoverable  costs.  In  each
21    proceeding, the burden of proof shall be on  the  utility  to
22    establish the prudence of its incurred recoverable costs. The
23    Commission  shall  issue  its final order in each such annual
24    proceeding by December 31 of the year following the  year  to
25    which it pertains.

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