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92_SB2081enr SB2081 Enrolled LRB9212879JSpc 1 AN ACT concerning public utilities. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Public Utilities Act is amended by 5 changing Sections 9-220, 16-102, and 16-111 and adding 6 Section 16-111.3 as follows: 7 (220 ILCS 5/9-220) (from Ch. 111 2/3, par. 9-220) 8 Sec. 9-220. Rate changes based on changes in fuel costs. 9 (a) Notwithstanding the provisions of Section 9-201, the 10 Commission may authorize the increase or decrease of rates 11 and charges based upon changes in the cost of fuel used in 12 the generation or production of electric power, changes in 13 the cost of purchased power, or changes in the cost of 14 purchased gas through the application of fuel adjustment 15 clauses or purchased gas adjustment clauses. The Commission 16 may also authorize the increase or decrease of rates and 17 charges based upon expenditures or revenues resulting from 18 the purchase or sale of emission allowances created under the 19 federal Clean Air Act Amendments of 1990, through such fuel 20 adjustment clauses, as a cost of fuel. For the purposes of 21 this paragraph, cost of fuel used in the generation or 22 production of electric power shall include the amount of any 23 fees paid by the utility for the implementation and operation 24 of a process for the desulfurization of the flue gas when 25 burning high sulfur coal at any location within the State of 26 Illinois irrespective of the attainment status designation of 27 such location; but shall not include transportation costs of 28 coal (i) except to the extent that for contracts entered into 29 on and after the effective date of this amendatory Act of 30 1997, the cost of the coal, including transportation costs, 31 constitutes the lowest cost for adequate and reliable fuel SB2081 Enrolled -2- LRB9212879JSpc 1 supply reasonably available to the public utility in 2 comparison to the cost, including transportation costs, of 3 other adequate and reliable sources of fuel supply reasonably 4 available to the public utility, or (ii) except as otherwise 5 provided in the next 3 sentences of this paragraph. Such 6 costs of fuel shall, when requested by a utility or at the 7 conclusion of the utility's next general electric rate 8 proceeding, whichever shall first occur, include 9 transportation costs of coal purchased under existing coal 10 purchase contracts. For purposes of this paragraph "existing 11 coal purchase contracts" means contracts for the purchase of 12 coal in effect on the effective date of this amendatory Act 13 of 1991, as such contracts may thereafter be amended, but 14 only to the extent that any such amendment does not increase 15 the aggregate quantity of coal to be purchased under such 16 contract. Nothing herein shall authorize an electric utility 17 to recover through its fuel adjustment clause any amounts of 18 transportation costs of coal that were included in the 19 revenue requirement used to set base rates in its most recent 20 general rate proceeding. Cost shall be based upon uniformly 21 applied accounting principles. Annually, the Commission shall 22 initiate public hearings to determine whether the clauses 23 reflect actual costs of fuel, gas, power, or coal 24 transportation purchased to determine whether such purchases 25 were prudent, and to reconcile any amounts collected with the 26 actual costs of fuel, power, gas, or coal transportation 27 prudently purchased. In each such proceeding, the burden of 28 proof shall be upon the utility to establish the prudence of 29 its cost of fuel, power, gas, or coal transportation 30 purchases and costs. The Commission shall issue its final 31 order in each such annual proceeding for an electric utility 32 by December 31 of the year immediately following the year to 33 which the proceeding pertains, provided, that the Commission 34 shall issue its final order with respect to such annual SB2081 Enrolled -3- LRB9212879JSpc 1 proceeding for the years 1996 and earlier by December 31, 2 1998. 3 (b) A public utility providing electric service, other 4 than a public utility described in subsections (e) or (f) of 5 this Section, may at any time during the mandatory transition 6 period file with the Commission proposed tariff sheets that 7 eliminate the public utility's fuel adjustment clause and 8 adjust the public utility's base rate tariffs by the amount 9 necessary for the base fuel component of the base rates to 10 recover the public utility's average fuel and power supply 11 costs per kilowatt-hour for the 2 most recent years for which 12 the Commission has issued final orders in annual proceedings 13 pursuant to subsection (a), where the average fuel and power 14 supply costs per kilowatt-hour shall be calculated as the sum 15 of the public utility's prudent and allowable fuel and power 16 supply costs as found by the Commission in the 2 proceedings 17 divided by the public utility's actual jurisdictional 18 kilowatt-hour sales for those 2 years. Notwithstanding any 19 contrary or inconsistent provisions in Section 9-201 of this 20 Act, in subsection (a) of this Section or in any rules or 21 regulations promulgated by the Commission pursuant to 22 subsection (g) of this Section, the Commission shall review 23 and shall by order approve, or approve as modified, the 24 proposed tariff sheets within 60 days after the date of the 25 public utility's filing. The Commission may modify the 26 public utility's proposed tariff sheets only to the extent 27 the Commission finds necessary to achieve conformance to the 28 requirements of this subsection (b). During the 5 years 29 following the date of the Commission's order, but in any 30 event no earlier than January 1, 20072005, a public utility 31 whose fuel adjustment clause has been eliminated pursuant to 32 this subsection shall not file proposed tariff sheets 33 seeking, or otherwise petition the Commission for, 34 reinstatement of a fuel adjustment clause. SB2081 Enrolled -4- LRB9212879JSpc 1 (c) Notwithstanding any contrary or inconsistent 2 provisions in Section 9-201 of this Act, in subsection (a) of 3 this Section or in any rules or regulations promulgated by 4 the Commission pursuant to subsection (g) of this Section, a 5 public utility providing electric service, other than a 6 public utility described in subsection (e) or (f) of this 7 Section, may at any time during the mandatory transition 8 period file with the Commission proposed tariff sheets that 9 establish the rate per kilowatt-hour to be applied pursuant 10 to the public utility's fuel adjustment clause at the average 11 value for such rate during the preceding 24 months, provided 12 that such average rate results in a credit to customers' 13 bills, without making any revisions to the public utility's 14 base rate tariffs. The proposed tariff sheets shall 15 establish the fuel adjustment rate for a specific time period 16 of at least 3 years but not more than 5 years, provided that 17 the terms and conditions for any reinstatement earlier than 5 18 years shall be set forth in the proposed tariff sheets and 19 subject to modification or approval by the Commission. The 20 Commission shall review and shall by order approve the 21 proposed tariff sheets if it finds that the requirements of 22 this subsection are met. The Commission shall not conduct 23 the annual hearings specified in the last 3 sentences of 24 subsection (a) of this Section for the utility for the period 25 that the factor established pursuant to this subsection is in 26 effect. 27 (d) A public utility providing electric service, or a 28 public utility providing gas service may file with the 29 Commission proposed tariff sheets that eliminate the public 30 utility's fuel or purchased gas adjustment clause and adjust 31 the public utility's base rate tariffs to provide for 32 recovery of power supply costs or gas supply costs that would 33 have been recovered through such clause; provided, that the 34 provisions of this subsection (d) shall not be available to a SB2081 Enrolled -5- LRB9212879JSpc 1 public utility described in subsections (e) or (f) of this 2 Section to eliminate its fuel adjustment clause. 3 Notwithstanding any contrary or inconsistent provisions in 4 Section 9-201 of this Act, in subsection (a) of this Section, 5 or in any rules or regulations promulgated by the Commission 6 pursuant to subsection (g) of this Section, the Commission 7 shall review and shall by order approve, or approve as 8 modified in the Commission's order, the proposed tariff 9 sheets within 240 days after the date of the public utility's 10 filing. The Commission's order shall approve rates and 11 charges that the Commission, based on information in the 12 public utility's filing or on the record if a hearing is held 13 by the Commission, finds will recover the reasonable, prudent 14 and necessary jurisdictional power supply costs or gas supply 15 costs incurred or to be incurred by the public utility during 16 a 12 month period found by the Commission to be appropriate 17 for these purposes, provided, that such period shall be 18 either (i) a 12 month historical period occurring during the 19 15 months ending on the date of the public utility's filing, 20 or (ii) a 12 month future period ending no later than 15 21 months following the date of the public utility's filing. 22 The public utility shall include with its tariff filing 23 information showing both (1) its actual jurisdictional power 24 supply costs or gas supply costs for a 12 month historical 25 period conforming to (i) above and (2) its projected 26 jurisdictional power supply costs or gas supply costs for a 27 future 12 month period conforming to (ii) above. If the 28 Commission's order requires modifications in the tariff 29 sheets filed by the public utility, the public utility shall 30 have 7 days following the date of the order to notify the 31 Commission whether the public utility will implement the 32 modified tariffs or elect to continue its fuel or purchased 33 gas adjustment clause in force as though no order had been 34 entered. The Commission's order shall provide for any SB2081 Enrolled -6- LRB9212879JSpc 1 reconciliation of power supply costs or gas supply costs, as 2 the case may be, and associated revenues through the date 3 that the public utility's fuel or purchased gas adjustment 4 clause is eliminated. During the 5 years following the date 5 of the Commission's order, a public utility whose fuel or 6 purchased gas adjustment clause has been eliminated pursuant 7 to this subsection shall not file proposed tariff sheets 8 seeking, or otherwise petition the Commission for, 9 reinstatement or adoption of a fuel or purchased gas 10 adjustment clause. Nothing in this subsection (d) shall be 11 construed as limiting the Commission's authority to eliminate 12 a public utility's fuel adjustment clause or purchased gas 13 adjustment clause in accordance with any other applicable 14 provisions of this Act. 15 (e) Notwithstanding any contrary or inconsistent 16 provisions in Section 9-201 of this Act, in subsection (a) 17 of this Section, or in any rules promulgated by the 18 Commission pursuant to subsection (g) of this Section, a 19 public utility providing electric service to more than 20 1,000,000 customers in this State may, within the first 6 21 months after the effective date of this amendatory Act of 22 1997, file with the Commission proposed tariff sheets that 23 eliminate, effective January 1, 1997, the public utility's 24 fuel adjustment clause without adjusting its base rates, and 25 such tariff sheets shall be effective upon filing. To the 26 extent the application of the fuel adjustment clause had 27 resulted in net charges to customers after January 1, 1997, 28 the utility shall also file a tariff sheet that provides for 29 a refund stated on a per kilowatt-hour basis of such charges 30 over a period not to exceed 6 months; provided however, that 31 such refund shall not include the proportional amounts of 32 taxes paid under the Use Tax Act, Service Use Tax Act, 33 Service Occupation Tax Act, and Retailers' Occupation Tax Act 34 on fuel used in generation. The Commission shall issue an SB2081 Enrolled -7- LRB9212879JSpc 1 order within 45 days after the date of the public utility's 2 filing approving or approving as modified such tariff sheet. 3 If the fuel adjustment clause is eliminated pursuant to this 4 subsection, the Commission shall not conduct the annual 5 hearings specified in the last 3 sentences of subsection (a) 6 of this Section for the utility for any period after 7 December 31, 1996 and prior to any reinstatement of such 8 clause. A public utility whose fuel adjustment clause has 9 been eliminated pursuant to this subsection shall not file a 10 proposed tariff sheet seeking, or otherwise petition the 11 Commission for, reinstatement of the fuel adjustment clause 12 prior to January 1, 20072005. 13 (f) Notwithstanding any contrary or inconsistent 14 provisions in Section 9-201 of this Act, in subsection (a) of 15 this Section, or in any rules or regulations promulgated by 16 the Commission pursuant to subsection (g) of this Section, a 17 public utility providing electric service to more than 18 500,000 customers but fewer than 1,000,000 customers in this 19 State may, within the first 6 months after the effective date 20 of this amendatory Act of 1997, file with the Commission 21 proposed tariff sheets that eliminate, effective January 1, 22 1997, the public utility's fuel adjustment clause and adjust 23 its base rates by the amount necessary for the base fuel 24 component of the base rates to recover 91% of the public 25 utility's average fuel and power supply costs for the 2 most 26 recent years for which the Commission, as of January 1, 1997, 27 has issued final orders in annual proceedings pursuant to 28 subsection (a), where the average fuel and power supply costs 29 per kilowatt-hour shall be calculated as the sum of the 30 public utility's prudent and allowable fuel and power supply 31 costs as found by the Commission in the 2 proceedings divided 32 by the public utility's actual jurisdictional kilowatt-hour 33 sales for those 2 years, provided, that such tariff sheets 34 shall be effective upon filing. To the extent the SB2081 Enrolled -8- LRB9212879JSpc 1 application of the fuel adjustment clause had resulted in net 2 charges to customers after January 1, 1997, the utility shall 3 also file a tariff sheet that provides for a refund stated on 4 a per kilowatt-hour basis of such charges over a period not 5 to exceed 6 months. Provided however, that such refund shall 6 not include the proportional amounts of taxes paid under the 7 Use Tax Act, Service Use Tax Act, Service Occupation Tax Act, 8 and Retailers' Occupation Tax Act on fuel used in generation. 9 The Commission shall issue an order within 45 days after the 10 date of the public utility's filing approving or approving as 11 modified such tariff sheet. If the fuel adjustment clause is 12 eliminated pursuant to this subsection, the Commission shall 13 not conduct the annual hearings specified in the last 3 14 sentences of subsection (a) of this Section for the utility 15 for any period after December 31, 1996 and prior to any 16 reinstatement of such clause. A public utility whose fuel 17 adjustment clause has been eliminated pursuant to this 18 subsection shall not file a proposed tariff sheet seeking, or 19 otherwise petition the Commission for, reinstatement of the 20 fuel adjustment clause prior to January 1, 20072005. 21 (g) The Commission shall have authority to promulgate 22 rules and regulations to carry out the provisions of this 23 Section. 24 (Source: P.A. 90-561, eff. 12-16-97.) 25 (220 ILCS 5/16-102) 26 Sec. 16-102. Definitions. For the purposes of this 27 Article the following terms shall be defined as set forth in 28 this Section. 29 "Alternative retail electric supplier" means every 30 person, cooperative, corporation, municipal corporation, 31 company, association, joint stock company or association, 32 firm, partnership, individual, or other entity, their 33 lessees, trustees, or receivers appointed by any court SB2081 Enrolled -9- LRB9212879JSpc 1 whatsoever, that offers electric power or energy for sale, 2 lease or in exchange for other value received to one or more 3 retail customers, or that engages in the delivery or 4 furnishing of electric power or energy to such retail 5 customers, and shall include, without limitation, resellers, 6 aggregators and power marketers, but shall not include (i) 7 electric utilities (or any agent of the electric utility to 8 the extent the electric utility provides tariffed services to 9 retail customers through that agent), (ii) any electric 10 cooperative or municipal system as defined in Section 17-100 11 to the extent that the electric cooperative or municipal 12 system is serving retail customers within any area in which 13 it is or would be entitled to provide service under the law 14 in effect immediately prior to the effective date of this 15 amendatory Act of 1997, (iii) a public utility that is owned 16 and operated by any public institution of higher education of 17 this State, or a public utility that is owned by such public 18 institution of higher education and operated by any of its 19 lessees or operating agents, within any area in which it is 20 or would be entitled to provide service under the law in 21 effect immediately prior to the effective date of this 22 amendatory Act of 1997, (iv) a retail customer to the extent 23 that customer obtains its electric power and energy from that 24 customer's own cogeneration or self-generation facilities, 25 (v) an entity that owns, operates, sells, or arranges for the 26 installation of a customer's own cogeneration or 27 self-generation facilities, but only to the extent the entity 28 is engaged in owning, selling or arranging for the 29 installation of such facility, or operating the facility on 30 behalf of such customer, provided however that any such third 31 party owner or operator of a facility built after January 1, 32 1999, complies with the labor provisions of Section 16-128(a) 33 as though such third party were an alternative retail 34 electric supplier, or (vi) an industrial or manufacturing SB2081 Enrolled -10- LRB9212879JSpc 1 customer that owns its own distribution facilities, to the 2 extent that the customer provides service from that 3 distribution system to a third-party contractor located on 4 the customer's premises that is integrally and predominantly 5 engaged in the customer's industrial or manufacturing 6 process; provided, that if the industrial or manufacturing 7 customer has elected delivery services, the customer shall 8 pay transition charges applicable to the electric power and 9 energy consumed by the third-party contractor unless such 10 charges are otherwise paid by the third party contractor, 11 which shall be calculated based on the usage of, and the base 12 rates or the contract rates applicable to, the third-party 13 contractor in accordance with Section 16-102. 14 "Base rates" means the rates for those tariffed services 15 that the electric utility is required to offer pursuant to 16 subsection (a) of Section 16-103 and that were identified in 17 a rate order for collection of the electric utility's base 18 rate revenue requirement, excluding (i) separate automatic 19 rate adjustment riders then in effect, (ii) special or 20 negotiated contract rates, (iii) delivery services tariffs 21 filed pursuant to Section 16-108, (iv) real-time pricing, or 22 (v) tariffs that were in effect prior to October 1, 1996 and 23 that based charges for services on an index or average of 24 other utilities' charges, but including (vi) any subsequent 25 redesign of such rates for tariffed services that is 26 authorized by the Commission after notice and hearing. 27 "Competitive service" includes (i) any service that has 28 been declared to be competitive pursuant to Section 16-113 of 29 this Act, (ii) contract service, and (iii) services, other 30 than tariffed services, that are related to, but not 31 necessary for, the provision of electric power and energy or 32 delivery services. 33 "Contract service" means (1) services, including the 34 provision of electric power and energy or other services, SB2081 Enrolled -11- LRB9212879JSpc 1 that are provided by mutual agreement between an electric 2 utility and a retail customer that is located in the electric 3 utility's service area, provided that, delivery services 4 shall not be a contract service until such services are 5 declared competitive pursuant to Section 16-113; and also 6 means (2) the provision of electric power and energy by an 7 electric utility to retail customers outside the electric 8 utility's service area pursuant to Section 16-116. Provided, 9 however, contract service does not include electric utility 10 services provided pursuant to (i) contracts that retail 11 customers are required to execute as a condition of receiving 12 tariffed services, or (ii) special or negotiated rate 13 contracts for electric utility services that were entered 14 into between an electric utility and a retail customer prior 15 to the effective date of this amendatory Act of 1997 and 16 filed with the Commission. 17 "Delivery services" means those services provided by the 18 electric utility that are necessary in order for the 19 transmission and distribution systems to function so that 20 retail customers located in the electric utility's service 21 area can receive electric power and energy from suppliers 22 other than the electric utility, and shall include, without 23 limitation, standard metering and billing services. 24 "Electric utility" means a public utility, as defined in 25 Section 3-105 of this Act, that has a franchise, license, 26 permit or right to furnish or sell electricity to retail 27 customers within a service area. 28 "Mandatory transition period" means the period from the 29 effective date of this amendatory Act of 1997 through January 30 1, 20072005. 31 "Municipal system" shall have the meaning set forth in 32 Section 17-100. 33 "Real-time pricing" means charges for delivered electric 34 power and energy that vary on an hour-to-hour basis for SB2081 Enrolled -12- LRB9212879JSpc 1 nonresidential retail customers and that vary on a periodic 2 basis during the day for residential retail customers. 3 "Retail customer" means a single entity using electric 4 power or energy at a single premises and that (A) either (i) 5 is receiving or is eligible to receive tariffed services from 6 an electric utility, or (ii) that is served by a municipal 7 system or electric cooperative within any area in which the 8 municipal system or electric cooperative is or would be 9 entitled to provide service under the law in effect 10 immediately prior to the effective date of this amendatory 11 Act of 1997, or (B) an entity which on the effective date of 12 this Act was receiving electric service from a public utility 13 and (i) was engaged in the practice of resale and 14 redistribution of such electricity within a building prior to 15 January 2, 1957, or (ii) was providing lighting services to 16 tenants in a multi-occupancy building, but only to the extent 17 such resale, redistribution or lighting service is authorized 18 by the electric utility's tariffs that were on file with the 19 Commission on the effective date of this Act. 20 "Service area" means (i) the geographic area within which 21 an electric utility was lawfully entitled to provide electric 22 power and energy to retail customers as of the effective date 23 of this amendatory Act of 1997, and includes (ii) the 24 location of any retail customer to which the electric utility 25 was lawfully providing electric utility services on such 26 effective date. 27 "Small commercial retail customer" means those 28 nonresidential retail customers of an electric utility 29 consuming 15,000 kilowatt-hours or less of electricity 30 annually in its service area. 31 "Tariffed service" means services provided to retail 32 customers by an electric utility as defined by its rates on 33 file with the Commission pursuant to the provisions of 34 Article IX of this Act, but shall not include competitive SB2081 Enrolled -13- LRB9212879JSpc 1 services. 2 "Transition charge" means a charge expressed in cents per 3 kilowatt-hour that is calculated for a customer or class of 4 customers as follows for each year in which an electric 5 utility is entitled to recover transition charges as provided 6 in Section 16-108: 7 (1) the amount of revenue that an electric utility 8 would receive from the retail customer or customers if it 9 were serving such customers' electric power and energy 10 requirements as a tariffed service based on (A) all of 11 the customers' actual usage during the 3 years ending 90 12 days prior to the date on which such customers were first 13 eligible for delivery services pursuant to Section 14 16-104, and (B) on (i) the base rates in effect on 15 October 1, 1996 (adjusted for the reductions required by 16 subsection (b) of Section 16-111, for any reduction 17 resulting from a rate decrease under Section 16-101(b), 18 for any restatement of base rates made in conjunction 19 with an elimination of the fuel adjustment clause 20 pursuant to subsection (b), (d), or (f) of Section 9-220 21 and for any removal of decommissioning costs from base 22 rates pursuant to Section 16-114) and any separate 23 automatic rate adjustment riders (other than a 24 decommissioning rate as defined in Section 16-114) under 25 which the customers were receiving or, had they been 26 customers, would have received electric power and energy 27 from the electric utility during the year immediately 28 preceding the date on which such customers were first 29 eligible for delivery service pursuant to Section 16-104, 30 or (ii) to the extent applicable, any contract rates, 31 including contracts or rates for consolidated or 32 aggregated billing, under which such customers were 33 receiving electric power and energy from the electric 34 utility during such year; SB2081 Enrolled -14- LRB9212879JSpc 1 (2) less the amount of revenue, other than revenue 2 from transition charges and decommissioning rates, that 3 the electric utility would receive from such retail 4 customers for delivery services provided by the electric 5 utility, assuming such customers were taking delivery 6 services for all of their usage, based on the delivery 7 services tariffs in effect during the year for which the 8 transition charge is being calculated and on the usage 9 identified in paragraph (1); 10 (3) less the market value for the electric power 11 and energy that the electric utility would have used to 12 supply all of such customers' electric power and energy 13 requirements, as a tariffed service, based on the usage 14 identified in paragraph (1), with such market value 15 determined in accordance with Section 16-112 of this Act; 16 (4) less the following amount which represents the 17 amount to be attributed to new revenue sources and cost 18 reductions by the electric utility through the end of the 19 period for which transition costs are recovered pursuant 20 to Section 16-108, referred to in this Article XVI as a 21 "mitigation factor": 22 (A) for nonresidential retail customers, an 23 amount equal to the greater of (i) 0.5 cents per 24 kilowatt-hour during the period October 1, 1999 25 through December 31, 2004, 0.6 cents per 26 kilowatt-hour in calendar year 2005, and 0.9 cents 27 per kilowatt-hour in calendar year 2006, multiplied 28 in each year by the usage identified in paragraph 29 (1), or (ii) an amount equal to the following 30 percentages of the amount produced by applying the 31 applicable base rates (adjusted as described in 32 subparagraph (1)(B)) or contract rate to the usage 33 identified in paragraph (1): 8% for the period 34 October 1, 1999 through December 31, 2002, 10% in SB2081 Enrolled -15- LRB9212879JSpc 1 calendar years 2003 and 2004, 11% in calendar year 2 2005 and 12% in calendar year 2006; and 3 (B) for residential retail customers, an 4 amount equal to the following percentages of the 5 amount produced by applying the base rates in effect 6 on October 1, 1996 (adjusted as described in 7 subparagraph (1)(B)) to the usage identified in 8 paragraph (1): (i) 6% from May 1, 2002 through 9 December 31, 2002, (ii) 7% in calendar years 2003 10 and 2004, (iii) 8% in calendar year 2005, and (iv) 11 10% in calendar year 2006; 12 (5) divided by the usage of such customers 13 identified in paragraph (1), 14 provided that the transition charge shall never be less than 15 zero. 16 "Unbundled service" means a component or constituent part 17 of a tariffed service which the electric utility subsequently 18 offers separately to its customers. 19 (Source: P.A. 90-561, eff. 12-16-97; 91-50, eff. 6-30-99.) 20 (220 ILCS 5/16-111) 21 Sec. 16-111. Rates and restructuring transactions during 22 mandatory transition period. 23 (a) During the mandatory transition period, 24 notwithstanding any provision of Article IX of this Act, and 25 except as provided in subsections (b), (d), (e), and (f) of 26 this Section, the Commission shall not (i) initiate, 27 authorize or order any change by way of increase (other than 28 in connection with a request for rate increase which was 29 filed after September 1, 1997 but prior to October 15, 1997, 30 by an electric utility serving less than 12,500 customers in 31 this State), (ii) initiate or, unless requested by the 32 electric utility, authorize or order any change by way of 33 decrease, restructuring or unbundling (except as provided in SB2081 Enrolled -16- LRB9212879JSpc 1 Section 16-109A), in the rates of any electric utility that 2 were in effect on October 1, 1996, or (iii) in any order 3 approving any application for a merger pursuant to Section 4 7-204 that was pending as of May 16, 1997, impose any 5 condition requiring any filing for an increase, decrease, or 6 change in, or other review of, an electric utility's rates or 7 enforce any such condition of any such order; provided, 8 however, that this subsection shall not prohibit the 9 Commission from: 10 (1) approving the application of an electric 11 utility to implement an alternative to rate of return 12 regulation or a regulatory mechanism that rewards or 13 penalizes the electric utility through adjustment of 14 rates based on utility performance, pursuant to Section 15 9-244; 16 (2) authorizing an electric utility to eliminate 17 its fuel adjustment clause and adjust its base rate 18 tariffs in accordance with subsection (b), (d), or (f) of 19 Section 9-220 of this Act, to fix its fuel adjustment 20 factor in accordance with subsection (c) of Section 9-220 21 of this Act, or to eliminate its fuel adjustment clause 22 in accordance with subsection (e) of Section 9-220 of 23 this Act; 24 (3) ordering into effect tariffs for delivery 25 services and transition charges in accordance with 26 Sections 16-104 and 16-108, for real-time pricing in 27 accordance with Section 16-107, or the options required 28 by Section 16-110 and subsection (n) of 16-112, allowing 29 a billing experiment in accordance with Section 16-106, 30 or modifying delivery services tariffs in accordance with 31 Section 16-109; or 32 (4) ordering or allowing into effect any tariff to 33 recover charges pursuant to Sections 9-201.5, 9-220.1, 34 9-221, 9-222 (except as provided in Section 9-222.1), SB2081 Enrolled -17- LRB9212879JSpc 1 16-108, and 16-114 of this Act, Section 5-5 of the 2 Electricity Infrastructure Maintenance Fee Law, Section 3 6-5 of the Renewable Energy, Energy Efficiency, and Coal 4 Resources Development Law of 1997, and Section 13 of the 5 Energy Assistance Act of 1989. 6 After December 31, 2004, the provisions of this 7 subsection (a) shall not apply to an electric utility whose 8 average residential retail rate was less than or equal to 90% 9 of the average residential retail rate for the "Midwest 10 Utilities", as that term is defined in subsection (b) of this 11 Section, based on data reported on Form 1 to the Federal 12 Energy Regulatory Commission for calendar year 1995, and 13 which served between 150,000 and 250,000 retail customers in 14 this State on January 1, 1995 unless the electric utility or 15 its holding company has been acquired by or merged with an 16 affiliate of another electric utility subsequent to January 17 1, 2002. This exemption shall be limited to this subsection 18 (a) and shall not extend to any other provisions of this Act. 19 (b) Notwithstanding the provisions of subsection (a), 20 each Illinois electric utility serving more than 12,500 21 customers in Illinois shall file tariffs (i) reducing, 22 effective August 1, 1998, each component of its base rates to 23 residential retail customers by 15% from the base rates in 24 effect immediately prior to January 1, 1998 and (ii) if the 25 public utility provides electric service to (A) more than 26 500,000 customers but less than 1,000,000 customers in this 27 State on January 1, 1999, reducing, effective May 1, 2002, 28 each component of its base rates to residential retail 29 customers by an additional 5% from the base rates in effect 30 immediately prior to January 1, 1998, or (B) at least 31 1,000,000 customers in this State on January 1, 1999, 32 reducing, effective October 1, 2001, each component of its 33 base rates to residential retail customers by an additional 34 5% from the base rates in effect immediately prior to January SB2081 Enrolled -18- LRB9212879JSpc 1 1, 1998. Provided, however, that (A) if an electric utility's 2 average residential retail rate is less than or equal to the 3 average residential retail rate for a group of Midwest 4 Utilities (consisting of all investor-owned electric 5 utilities with annual system peaks in excess of 1000 6 megawatts in the States of Illinois, Indiana, Iowa, Kentucky, 7 Michigan, Missouri, Ohio, and Wisconsin), based on data 8 reported on Form 1 to the Federal Energy Regulatory 9 Commission for calendar year 1995, then it shall only be 10 required to file tariffs (i) reducing, effective August 1, 11 1998, each component of its base rates to residential retail 12 customers by 5% from the base rates in effect immediately 13 prior to January 1, 1998, (ii) reducing, effective October 1, 14 2000, each component of its base rates to residential retail 15 customers by the lesser of 5% of the base rates in effect 16 immediately prior to January 1, 1998 or the percentage by 17 which the electric utility's average residential retail rate 18 exceeds the average residential retail rate of the Midwest 19 Utilities, based on data reported on Form 1 to the Federal 20 Energy Regulatory Commission for calendar year 1999, and 21 (iii) reducing, effective October 1, 2002, each component of 22 its base rates to residential retail customers by an 23 additional amount equal to the lesser of 5% of the base rates 24 in effect immediately prior to January 1, 1998 or the 25 percentage by which the electric utility's average 26 residential retail rate exceeds the average residential 27 retail rate of the Midwest Utilities, based on data reported 28 on Form 1 to the Federal Energy Regulatory Commission for 29 calendar year 2001; and (B) if the average residential retail 30 rate of an electric utility serving between 150,000 and 31 250,000 retail customers in this State on January 1, 1995 is 32 less than or equal to 90% of the average residential retail 33 rate for the Midwest Utilities, based on data reported on 34 Form 1 to the Federal Energy Regulatory Commission for SB2081 Enrolled -19- LRB9212879JSpc 1 calendar year 1995, then it shall only be required to file 2 tariffs (i) reducing, effective August 1, 1998, each 3 component of its base rates to residential retail customers 4 by 2% from the base rates in effect immediately prior to 5 January 1, 1998; (ii) reducing, effective October 1, 2000, 6 each component of its base rates to residential retail 7 customers by 2% from the base rate in effect immediately 8 prior to January 1, 1998; and (iii) reducing, effective 9 October 1, 2002, each component of its base rates to 10 residential retail customers by 1% from the base rates in 11 effect immediately prior to January 1, 1998. Provided, 12 further, that any electric utility for which a decrease in 13 base rates has been or is placed into effect between October 14 1, 1996 and the dates specified in the preceding sentences of 15 this subsection, other than pursuant to the requirements of 16 this subsection, shall be entitled to reduce the amount of 17 any reduction or reductions in its base rates required by 18 this subsection by the amount of such other decrease. The 19 tariffs required under this subsection shall be filed 45 days 20 in advance of the effective date. Notwithstanding anything to 21 the contrary in Section 9-220 of this Act, no restatement of 22 base rates in conjunction with the elimination of a fuel 23 adjustment clause under that Section shall result in a lesser 24 decrease in base rates than customers would otherwise receive 25 under this subsection had the electric utility's fuel 26 adjustment clause not been eliminated. 27 (c) Any utility reducing its base rates by 15% on August 28 1, 1998 pursuant to subsection (b) shall include the 29 following statement on its bills for residential customers 30 from August 1 through December 31, 1998: "Effective August 1, 31 1998, your rates have been reduced by 15% by the Electric 32 Service Customer Choice and Rate Relief Law of 1997 passed by 33 the Illinois General Assembly.". Any utility reducing its 34 base rates by 5% on August 1, 1998, pursuant to subsection SB2081 Enrolled -20- LRB9212879JSpc 1 (b) shall include the following statement on its bills for 2 residential customers from August 1 through December 31, 3 1998: "Effective August 1, 1998, your rates have been 4 reduced by 5% by the Electric Service Customer Choice and 5 Rate Relief Law of 1997 passed by the Illinois General 6 Assembly.". 7 Any utility reducing its base rates by 2% on August 1, 8 1998 pursuant to subsection (b) shall include the following 9 statement on its bills for residential customers from August 10 1 through December 31, 1998: "Effective August 1, 1998, your 11 rates have been reduced by 2% by the Electric Service 12 Customer Choice and Rate Relief Law of 1997 passed by the 13 Illinois General Assembly.". 14 (d) During the mandatory transition period, but not 15 before January 1, 2000, and notwithstanding the provisions 16 of subsection (a), an electric utility may request an 17 increase in its base rates if the electric utility 18 demonstrates that the 2-year average of its earned rate of 19 return on common equity, calculated as its net income 20 applicable to common stock divided by the average of its 21 beginning and ending balances of common equity using data 22 reported in the electric utility's Form 1 report to the 23 Federal Energy Regulatory Commission but adjusted to remove 24 the effects of accelerated depreciation or amortization or 25 other transition or mitigation measures implemented by the 26 electric utility pursuant to subsection (g) of this Section 27 and the effect of any refund paid pursuant to subsection (e) 28 of this Section, is below the 2-year average for the same 2 29 years of the monthly average yields of 30-year U.S. Treasury 30 bonds published by the Board of Governors of the Federal 31 Reserve System in its weekly H.15 Statistical Release or 32 successor publication. The Commission shall review the 33 electric utility's request, and may review the justness and 34 reasonableness of all rates for tariffed services, in SB2081 Enrolled -21- LRB9212879JSpc 1 accordance with the provisions of Article IX of this Act, 2 provided that the Commission shall consider any special or 3 negotiated adjustments to the revenue requirement agreed to 4 between the electric utility and the other parties to the 5 proceeding. In setting rates under this Section, the 6 Commission shall exclude the costs and revenues that are 7 associated with competitive services and any billing or 8 pricing experiments conducted under Section 16-106. 9 (e) For the purposes of this subsection (e) all 10 calculations and comparisons shall be performed for the 11 Illinois operations of multijurisdictional utilities. During 12 the mandatory transition period, notwithstanding the 13 provisions of subsection (a), if the 2-year average of an 14 electric utility's earned rate of return on common equity, 15 calculated as its net income applicable to common stock 16 divided by the average of its beginning and ending balances 17 of common equity using data reported in the electric 18 utility's Form 1 report to the Federal Energy Regulatory 19 Commission but adjusted to remove the effect of any refund 20 paid under this subsection (e), and further adjusted to 21 include the annual amortization of any difference between the 22 consideration received by an affiliated interest of the 23 electric utility in the sale of an asset which had been sold 24 or transferred by the electric utility to the affiliated 25 interest subsequent to the effective date of this amendatory 26 Act of 1997 and the consideration for which such asset had 27 been sold or transferred to the affiliated interest, with 28 such difference to be amortized ratably from the date of the 29 sale by the affiliated interest to December 31, 2006, exceeds 30 the 2-year average of the Index for the same 2 years by 1.5 31 or more percentage points, the electric utility shall make 32 refunds to customers beginning the first billing day of April 33 in the following year in the manner described in paragraph 34 (3) of this subsection. For purposes of this subsection (e), SB2081 Enrolled -22- LRB9212879JSpc 1 the "Index" shall be the sum of (A) the average for the 12 2 months ended September 30 of the monthly average yields of 3 30-year U.S. Treasury bonds published by the Board of 4 Governors of the Federal Reserve System in its weekly H.15 5 Statistical Release or successor publication for each year 6 1998 through 20062004, and (B) (i) 4.00 percentage points 7 for each of the 12-month periods ending September 30, 1998 8 through September 30, 1999 or 8.00 percentage points if the 9 electric utility's average residential retail rate is less 10 than or equal to 90% of the average residential retail rate 11 for the "Midwest Utilities", as that term is defined in 12 subsection (b) of this Section, based on data reported on 13 Form 1 to the Federal Energy Regulatory Commission for 14 calendar year 1995, and the electric utility served between 15 150,000 and 250,000 retail customers on January 1, 1995, (ii) 16 7.00 percentage points for each of the 12-month periods 17 ending September 30, 2000 through September 30, 20062004if 18 the electric utility was providing service to at least 19 1,000,000 customers in this State on January 1, 1999, or 9.00 20 percentage points if the electric utility's average 21 residential retail rate is less than or equal to 90% of the 22 average residential retail rate for the "Midwest Utilities", 23 as that term is defined in subsection (b) of this Section, 24 based on data reported on Form 1 to the Federal Energy 25 Regulatory Commission for calendar year 1995 and the electric 26 utility served between 150,000 and 250,000 retail customers 27 in this State on January 1, 1995, (iii) 11.00 percentage 28 points for each of the 12-month periods ending September 30, 29 2000 through September 30, 20062004, but only if the 30 electric utility's average residential retail rate is less 31 than or equal to 90% of the average residential retail rate 32 for the "Midwest Utilities", as that term is defined in 33 subsection (b) of this Section, based on data reported on 34 Form 1 to the Federal Energy Regulatory Commission for SB2081 Enrolled -23- LRB9212879JSpc 1 calendar year 1995, the electric utility served between 2 150,000 and 250,000 retail customers in this State on January 3 1, 1995, and the electric utility offers delivery services on 4 or before June 1, 2000 to retail customers whose annual 5 electric energy use comprises 33% of the kilowatt hour sales 6 to that group of retail customers that are classified under 7 Division D, Groups 20 through 39 of the Standard Industrial 8 Classifications set forth in the Standard Industrial 9 Classification Manual published by the United States Office 10 of Management and Budget, excluding the kilowatt hour sales 11 to those customers that are eligible for delivery services 12 pursuant to Section 16-104(a)(1)(i), and offers delivery 13 services to its remaining retail customers classified under 14 Division D, Groups 20 through 39 on or before October 1, 15 2000, and, provided further, that the electric utility 16 commits not to petition pursuant to Section 16-108(f) for 17 entry of an order by the Commission authorizing the electric 18 utility to implement transition charges for an additional 19 period after December 31, 2006, or (iv) 5.00 percentage 20 points for each of the 12-month periods ending September 30, 21 2000 through September 30, 20062004for all other electric 22 utilities or 7.00 percentage points for such utilities for 23 each of the 12-month periods ending September 30, 2000 24 through September 30, 20062004for any such utility that 25 commits not to petition pursuant to Section 16-108(f) for 26 entry of an order by the Commission authorizing the electric 27 utility to implement transition charges for an additional 28 period after December 31, 2006 or 11.00 percentage points for 29 each of the 12-month periods ending September 30, 2005 and 30 September 30, 2006 for each electric utility providing 31 service to fewer than 6,500, or between 75,000 and 150,000, 32 electric retail customers in this State on January 1, 1995 if 33 such utility commits not to petition pursuant to Section 34 16-108(f) for entry of an order by the Commission authorizing SB2081 Enrolled -24- LRB9212879JSpc 1 the electric utility to implement transition charges for an 2 additional period after December 31, 2006. 3 (1) For purposes of this subsection (e), "excess 4 earnings" means the difference between (A) the 2-year 5 average of the electric utility's earned rate of return 6 on common equity, less (B) the 2-year average of the sum 7 of (i) the Index applicable to each of the 2 years and 8 (ii) 1.5 percentage points; provided, that "excess 9 earnings" shall never be less than zero. 10 (2) On or before March 31 of each year 2000 through 11 20072005each electric utility shall file a report with 12 the Commission showing its earned rate of return on 13 common equity, calculated in accordance with this 14 subsection, for the preceding calendar year and the 15 average for the preceding 2 calendar years. 16 (3) If an electric utility has excess earnings, 17 determined in accordance with paragraphs (1) and (2) of 18 this subsection, the refunds which the electric utility 19 shall pay to its customers beginning the first billing 20 day of April in the following year shall be calculated 21 and applied as follows: 22 (i) The electric utility's excess earnings 23 shall be multiplied by the average of the beginning 24 and ending balances of the electric utility's common 25 equity for the 2-year period in which excess 26 earnings occurred. 27 (ii) The result of the calculation in (i) 28 shall be multiplied by 0.50 and then divided by a 29 number equal to 1 minus the electric utility's 30 composite federal and State income tax rate. 31 (iii) The result of the calculation in (ii) 32 shall be divided by the sum of the electric 33 utility's projected total kilowatt-hour sales to 34 retail customers plus projected kilowatt-hours to be SB2081 Enrolled -25- LRB9212879JSpc 1 delivered to delivery services customers over a one 2 year period beginning with the first billing date in 3 April in the succeeding year to determine a cents 4 per kilowatt-hour refund factor. 5 (iv) The cents per kilowatt-hour refund factor 6 calculated in (iii) shall be credited to the 7 electric utility's customers by applying the factor 8 on the customer's monthly bills to each 9 kilowatt-hour sold or delivered until the total 10 amount calculated in (ii) has been paid to 11 customers. 12 (f) During the mandatory transition period, an electric 13 utility may file revised tariffs reducing the price of any 14 tariffed service offered by the electric utility for all 15 customers taking that tariffed service, which shall be 16 effective 7 days after filing. 17 (g) During the mandatory transition period, an electric 18 utility may, without obtaining any approval of the Commission 19 other than that provided for in this subsection and 20 notwithstanding any other provision of this Act or any rule 21 or regulation of the Commission that would require such 22 approval: 23 (1) implement a reorganization, other than a merger 24 of 2 or more public utilities as defined in Section 3-105 25 or their holding companies; 26 (2) retire generating plants from service; 27 (3) sell, assign, lease or otherwise transfer 28 assets to an affiliated or unaffiliated entity and as 29 part of such transaction enter into service agreements, 30 power purchase agreements, or other agreements with the 31 transferee; provided, however, that the prices, terms and 32 conditions of any power purchase agreement must be 33 approved or allowed into effect by the Federal Energy 34 Regulatory Commission; or SB2081 Enrolled -26- LRB9212879JSpc 1 (4) use any accelerated cost recovery method 2 including accelerated depreciation, accelerated 3 amortization or other capital recovery methods, or record 4 reductions to the original cost of its assets. 5 In order to implement a reorganization, retire generating 6 plants from service, or sell, assign, lease or otherwise 7 transfer assets pursuant to this Section, the electric 8 utility shall comply with subsections (c) and (d) of Section 9 16-128, if applicable, and subsection (k) of this Section, if 10 applicable, and provide the Commission with at least 30 days 11 notice of the proposed reorganization or transaction, which 12 notice shall include the following information: 13 (i) a complete statement of the entries that 14 the electric utility will make on its books and 15 records of account to implement the proposed 16 reorganization or transaction together with a 17 certification from an independent certified public 18 accountant that such entries are in accord with 19 generally accepted accounting principles and, if the 20 Commission has previously approved guidelines for 21 cost allocations between the utility and its 22 affiliates, a certification from the chief 23 accounting officer of the utility that such entries 24 are in accord with those cost allocation guidelines; 25 (ii) a description of how the electric utility 26 will use proceeds of any sale, assignment, lease or 27 transfer to retire debt or otherwise reduce or 28 recover the costs of services provided by such 29 electric utility; 30 (iii) a list of all federal approvals or 31 approvals required from departments and agencies of 32 this State, other than the Commission, that the 33 electric utility has or will obtain before 34 implementing the reorganization or transaction; SB2081 Enrolled -27- LRB9212879JSpc 1 (iv) an irrevocable commitment by the electric 2 utility that it will not, as a result of the 3 transaction, impose any stranded cost charges that 4 it might otherwise be allowed to charge retail 5 customers under federal law or increase the 6 transition charges that it is otherwise entitled to 7 collect under this Article XVI; and 8 (v) if the electric utility proposes to sell, 9 assign, lease or otherwise transfer a generating 10 plant that brings the amount of net dependable 11 generating capacity transferred pursuant to this 12 subsection to an amount equal to or greater than 15% 13 of the electric utility's net dependable capacity as 14 of the effective date of this amendatory Act of 15 1997, and enters into a power purchase agreement 16 with the entity to which such generating plant is 17 sold, assigned, leased, or otherwise transferred, 18 the electric utility also agrees, if its fuel 19 adjustment clause has not already been eliminated, 20 to eliminate its fuel adjustment clause in 21 accordance with subsection (b) of Section 9-220 for 22 a period of time equal to the length of any such 23 power purchase agreement or successor agreement, or 24 until January 1, 2005, whichever is longer; if the 25 capacity of the generating plant so transferred and 26 related power purchase agreement does not result in 27 the elimination of the fuel adjustment clause under 28 this subsection, and the fuel adjustment clause has 29 not already been eliminated, the electric utility 30 shall agree that the costs associated with the 31 transferred plant that are included in the 32 calculation of the rate per kilowatt-hour to be 33 applied pursuant to the electric utility's fuel 34 adjustment clause during such period shall not SB2081 Enrolled -28- LRB9212879JSpc 1 exceed the per kilowatt-hour cost associated with 2 such generating plant included in the electric 3 utility's fuel adjustment clause during the full 4 calendar year preceding the transfer, with such 5 limit to be adjusted each year thereafter by the 6 Gross Domestic Product Implicit Price Deflator. 7 (vi) In addition, if the electric utility 8 proposes to sell, assign, or lease, (A) either (1) 9 an amount of generating plant that brings the amount 10 of net dependable generating capacity transferred 11 pursuant to this subsection to an amount equal to or 12 greater than 15% of its net dependable capacity on 13 the effective date of this amendatory Act of 1997, 14 or (2) one or more generating plants with a total 15 net dependable capacity of 1100 megawatts, or (B) 16 transmission and distribution facilities that either 17 (1) bring the amount of transmission and 18 distribution facilities transferred pursuant to this 19 subsection to an amount equal to or greater than 15% 20 of the electric utility's total depreciated original 21 cost investment in such facilities, or (2) represent 22 an investment of $25,000,000 in terms of total 23 depreciated original cost, the electric utility 24 shall provide, in addition to the information listed 25 in subparagraphs (i) through (v), the following 26 information: (A) a description of how the electric 27 utility will meet its service obligations under this 28 Act in a safe and reliable manner and (B) the 29 electric utility's projected earned rate of return 30 on common equity, calculated in accordance with 31 subsection (d) of this Section, for each year from 32 the date of the notice through December 31, 2006 332004both with and without the proposed transaction. 34 If the Commission has not issued an order initiating SB2081 Enrolled -29- LRB9212879JSpc 1 a hearing on the proposed transaction within 30 days 2 after the date the electric utility's notice is 3 filed, the transaction shall be deemed approved. 4 The Commission may, after notice and hearing, 5 prohibit the proposed transaction if it makes either 6 or both of the following findings: (1) that the 7 proposed transaction will render the electric 8 utility unable to provide its tariffed services in a 9 safe and reliable manner, or (2) that there is a 10 strong likelihood that consummation of the proposed 11 transaction will result in the electric utility 12 being entitled to request an increase in its base 13 rates during the mandatory transition period 14 pursuant to subsection (d) of this Section. Any 15 hearing initiated by the Commission into the 16 proposed transaction shall be completed, and the 17 Commission's final order approving or prohibiting 18 the proposed transaction shall be entered, within 90 19 days after the date the electric utility's notice 20 was filed. Provided, however, that a sale, 21 assignment, or lease of transmission facilities to 22 an independent system operator that meets the 23 requirements of Section 16-126 shall not be subject 24 to Commission approval under this Section. 25 In any proceeding conducted by the Commission 26 pursuant to this subparagraph (vi), intervention 27 shall be limited to parties with a direct interest 28 in the transaction which is the subject of the 29 hearing and any statutory consumer protection agency 30 as defined in subsection (d) of Section 9-102.1. 31 Notwithstanding the provisions of Section 10-113 of 32 this Act, any application seeking rehearing of an 33 order issued under this subparagraph (vi), whether 34 filed by the electric utility or by an intervening SB2081 Enrolled -30- LRB9212879JSpc 1 party, shall be filed within 10 days after service 2 of the order. 3 The Commission shall not in any subsequent proceeding or 4 otherwise, review such a reorganization or other transaction 5 authorized by this Section, but shall retain the authority to 6 allocate costs as stated in Section 16-111(i). An entity to 7 which an electric utility sells, assigns, leases or transfers 8 assets pursuant to this subsection (g) shall not, as a result 9 of the transactions specified in this subsection (g), be 10 deemed a public utility as defined in Section 3-105. Nothing 11 in this subsection (g) shall change any requirement under the 12 jurisdiction of the Illinois Department of Nuclear Safety 13 including, but not limited to, the payment of fees. Nothing 14 in this subsection (g) shall exempt a utility from obtaining 15 a certificate pursuant to Section 8-406 of this Act for the 16 construction of a new electric generating facility. Nothing 17 in this subsection (g) is intended to exempt the transactions 18 hereunder from the operation of the federal or State 19 antitrust laws. Nothing in this subsection (g) shall require 20 an electric utility to use the procedures specified in this 21 subsection for any of the transactions specified herein. Any 22 other procedure available under this Act may, at the electric 23 utility's election, be used for any such transaction. 24 (h) During the mandatory transition period, the 25 Commission shall not establish or use any rates of 26 depreciation, which for purposes of this subsection shall 27 include amortization, for any electric utility other than 28 those established pursuant to subsection (c) of Section 5-104 29 of this Act or utilized pursuant to subsection (g) of this 30 Section. Provided, however, that in any proceeding to review 31 an electric utility's rates for tariffed services pursuant to 32 Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the 33 Commission may establish new rates of depreciation for the 34 electric utility in the same manner provided in subsection SB2081 Enrolled -31- LRB9212879JSpc 1 (d) of Section 5-104 of this Act. An electric utility 2 implementing an accelerated cost recovery method including 3 accelerated depreciation, accelerated amortization or other 4 capital recovery methods, or recording reductions to the 5 original cost of its assets, pursuant to subsection (g) of 6 this Section, shall file a statement with the Commission 7 describing the accelerated cost recovery method to be 8 implemented or the reduction in the original cost of its 9 assets to be recorded. Upon the filing of such statement, 10 the accelerated cost recovery method or the reduction in the 11 original cost of assets shall be deemed to be approved by the 12 Commission as though an order had been entered by the 13 Commission. 14 (i) Subsequent to the mandatory transition period, the 15 Commission, in any proceeding to establish rates and charges 16 for tariffed services offered by an electric utility, shall 17 consider only (1) the then current or projected revenues, 18 costs, investments and cost of capital directly or indirectly 19 associated with the provision of such tariffed services; (2) 20 collection of transition charges in accordance with Sections 21 16-102 and 16-108 of this Act; (3) recovery of any employee 22 transition costs as described in Section 16-128 which the 23 electric utility is continuing to incur, including recovery 24 of any unamortized portion of such costs previously incurred 25 or committed, with such costs to be equitably allocated among 26 bundled services, delivery services, and contracts with 27 alternative retail electric suppliers; and (4) recovery of 28 the costs associated with the electric utility's compliance 29 with decommissioning funding requirements; and shall not 30 consider any other revenues, costs, investments or cost of 31 capital of either the electric utility or of any affiliate of 32 the electric utility that are not associated with the 33 provision of tariffed services. In setting rates for 34 tariffed services, the Commission shall equitably allocate SB2081 Enrolled -32- LRB9212879JSpc 1 joint and common costs and investments between the electric 2 utility's competitive and tariffed services. In determining 3 the justness and reasonableness of the electric power and 4 energy component of an electric utility's rates for tariffed 5 services subsequent to the mandatory transition period and 6 prior to the time that the provision of such electric power 7 and energy is declared competitive, the Commission shall 8 consider the extent to which the electric utility's tariffed 9 rates for such component for each customer class exceed the 10 market value determined pursuant to Section 16-112, and, if 11 the electric power and energy component of such tariffed rate 12 exceeds the market value by more than 10% for any customer 13 class, may establish such electric power and energy component 14 at a rate equal to the market value plus 10%. In any such 15 case, the Commission may also elect to extend the provisions 16 of Section 16-111(e) for any period in which the electric 17 utility is collecting transition charges, using information 18 applicable to such period. 19 (j) During the mandatory transition period, an electric 20 utility may elect to transfer to a non-operating income 21 account under the Commission's Uniform System of Accounts 22 either or both of (i) an amount of unamortized investment tax 23 credit that is in addition to the ratable amount which is 24 credited to the electric utility's operating income account 25 for the year in accordance with Section 46(f)(2) of the 26 federal Internal Revenue Code of 1986, as in effect prior to 27 P.L. 101-508, or (ii) "excess tax reserves", as that term is 28 defined in Section 203(e)(2)(A) of the federal Tax Reform Act 29 of 1986, provided that (A) the amount transferred may not 30 exceed the amount of the electric utility's assets that were 31 created pursuant to Statement of Financial Accounting 32 Standards No. 71 which the electric utility has written off 33 during the mandatory transition period, and (B) the transfer 34 shall not be effective until approved by the Internal Revenue SB2081 Enrolled -33- LRB9212879JSpc 1 Service. An electric utility electing to make such a 2 transfer shall file a statement with the Commission stating 3 the amount and timing of the transfer for which it intends to 4 request approval of the Internal Revenue Service, along with 5 a copy of its proposed request to the Internal Revenue 6 Service for a ruling. The Commission shall issue an order 7 within 14 days after the electric utility's filing approving, 8 subject to receipt of approval from the Internal Revenue 9 Service, the proposed transfer. 10 (k) If an electric utility is selling or transferring to 11 a single buyer 5 or more generating plants located in this 12 State with a total net dependable capacity of 5000 megawatts 13 or more pursuant to subsection (g) of this Section and has 14 obtained a sale price or consideration that exceeds 200% of 15 the book value of such plants, the electric utility must 16 provide to the Governor, the President of the Illinois 17 Senate, the Minority Leader of the Illinois Senate, the 18 Speaker of the Illinois House of Representatives, and the 19 Minority Leader of the Illinois House of Representatives no 20 later than 15 days after filing its notice under subsection 21 (g) of this Section or 5 days after the date on which this 22 subsection (k) becomes law, whichever is later, a written 23 commitment in which such electric utility agrees to expend $2 24 billion outside the corporate limits of any municipality with 25 1,000,000 or more inhabitants within such electric utility's 26 service area, over a 6-year period beginning with the 27 calendar year in which the notice is filed, on projects, 28 programs, and improvements within its service area relating 29 to transmission and distribution including, without 30 limitation, infrastructure expansion, repair and replacement, 31 capital investments, operations and maintenance, and 32 vegetation management. 33 (Source: P.A. 90-561, eff. 12-16-97; 90-563, eff. 12-16-97; 34 91-50, eff. 6-30-99.) SB2081 Enrolled -34- LRB9212879JSpc 1 (220 ILCS 5/16-111.3 new) 2 Sec. 16-111.3. Transition period earnings calculations. 3 At such time as the Board of Governors of the Federal Reserve 4 System ceases to include the monthly average yields of 5 30-year U.S. Treasury bonds in its weekly H.15 Statistical 6 Release or successor publication, the Monthly Treasury 7 Long-Term Average Rates (25 years and above) published by the 8 Board of Governors of the Federal Reserve System in its 9 weekly H.15 Statistical Release or successor publication 10 shall instead be used to establish a rate for the purpose of 11 calculating the Index defined in subsection (e) of Section 12 16-111 of this Act, and at such time, such Monthly Treasury 13 Long-Term Average Rates (25 years and above) shall also be 14 used in place of the monthly average yields of 30-year U.S. 15 Treasury bonds in the rate of return calculation required by 16 subsection (d) of Section 16-111. An electric utility shall 17 also remove the effects, if any, of any impairment due to the 18 application of Statement of Financial Accounting Standards 19 No. 142, which was issued in June 2001, when making the 20 calculations required by this Section or by subsections (d) 21 and (e) of Section 16-111. 22 Section 99. Effective date. This Act takes effect upon 23 becoming law.