Bill Text: IL HB2541 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Public Utilities Act. Provides that in a ratemaking proceeding, the Illinois Commerce Commission shall not approve for ratemaking purposes either a cost of equity exceeding 8% unless clear and convincing record evidence demonstrates that a higher return on equity is strictly necessary to prevent an imminent and significant threat of negative credit action that would be expected to increase the cost of service for the utility's ratepayers; or a capital structure comprised of more than 50% common equity unless clear and convincing record evidence demonstrates that a higher equity ratio is strictly necessary to prevent an imminent and significant threat of negative credit action that would be expected to increase the cost of service for the utility's ratepayers. Provides that the Commission shall not treat the utility's interest in offsetting the revenue impact of enforcing either of these limitations as justification for approving or adjusting any other proposed revenues. Makes corresponding changes to the Multi-Year Rate Plan.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced) 2023-03-22 - Added Co-Sponsor Rep. Lindsey LaPointe [HB2541 Detail]

Download: Illinois-2023-HB2541-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2541 Introduced , by Rep. Theresa Mah SYNOPSIS AS INTRODUCED:
220 ILCS 5/1-102 from Ch. 111 2/3, par. 1-102
220 ILCS 5/9-201 from Ch. 111 2/3, par. 9-201
220 ILCS 5/16-108.18
Amends the Public Utilities Act. Provides that in a ratemaking proceeding, the Illinois Commerce Commission shall not approve for ratemaking purposes either a cost of equity exceeding 8% unless clear and convincing record evidence demonstrates that a higher return on equity is strictly necessary to prevent an imminent and significant threat of negative credit action that would be expected to increase the cost of service for the utility's ratepayers; or a capital structure comprised of more than 50% common equity unless clear and convincing record evidence demonstrates that a higher equity ratio is strictly necessary to prevent an imminent and significant threat of negative credit action that would be expected to increase the cost of service for the utility's ratepayers. Provides that the Commission shall not treat the utility's interest in offsetting the revenue impact of enforcing either of these limitations as justification for approving or adjusting any other proposed revenues. Makes corresponding changes to the Multi-Year Rate Plan.
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A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Utilities Act is amended by changing
Sections 1-102, 9-201, and 16-108.18 as follows:
(220 ILCS 5/1-102) (from Ch. 111 2/3, par. 1-102)
Sec. 1-102. Findings and Intent. The General Assembly
finds that the health, welfare and prosperity of all Illinois
citizens require the provision of adequate, efficient,
reliable, environmentally safe and least-cost public utility
services at prices which accurately reflect the long-term cost
of such services and which are equitable to all citizens. It is
therefore declared to be the policy of the State that public
utilities shall continue to be regulated effectively and
comprehensively. It is further declared that the goals and
objectives of such regulation shall be to ensure
(a) Efficiency: the provision of reliable energy
services at the least possible cost to the citizens of the
State; in such manner that:
(i) physical, human and financial resources are
allocated efficiently;
(ii) all supply and demand options are considered
and evaluated using comparable terms and methods in

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order to determine how utilities shall meet their
customers' demands for public utility services at the
least cost;
(iii) utilities are allowed only a sufficient
return on investment so as to enable them to attract
capital in financial markets at competitive rates and
no more;
(iv) tariff rates for the sale of various public
utility services are authorized such that they
accurately reflect the cost of delivering those
services and allow utilities to recover the total
costs prudently and reasonably incurred;
(v) variation in costs by customer class and time
of use is taken into consideration in authorizing
rates for each class.
(b) Environmental Quality: the protection of the
environment from the adverse external costs of public
utility services so that
(i) environmental costs of proposed actions having
a significant impact on the environment and the
environmental impact of the alternatives are
identified, documented and considered in the
regulatory process;
(ii) the prudently and reasonably incurred costs
of environmental controls are recovered.
(c) Reliability: the ability of utilities to provide

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consumers with public utility services under varying
demand conditions in such manner that suppliers of public
utility services are able to provide service at varying
levels of economic reliability giving appropriate
consideration to the costs likely to be incurred as a
result of service interruptions, and to the costs of
increasing or maintaining current levels of reliability
consistent with commitments to consumers.
(d) Equity: the fair treatment of consumers and
investors in order that
(i) the public health, safety and welfare shall be
protected;
(ii) the application of rates is based on public
understandability and acceptance of the reasonableness
of the rate structure and level;
(iii) the cost of supplying public utility
services is allocated to those who cause the costs to
be incurred;
(iv) if factors other than cost of service are
considered in regulatory decisions, the rationale for
these actions is set forth;
(v) regulation allows for orderly transition
periods to accommodate changes in public utility
service markets;
(vi) regulation does not result in undue or
sustained adverse impact on utility earnings;

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(vii) the impacts of regulatory actions on all
sectors of the State are carefully weighed;
(viii) the rates for utility services are
affordable and therefore preserve the availability of
such services to all citizens.
It is further declared to be the policy of the State that
this Act shall not apply in relation to motor carriers and rail
carriers as defined in the Illinois Commercial Transportation
Law, or to the Commission in the regulation of such carriers.
Nothing in this Act shall be construed to limit, restrict,
or mitigate in any way the power and authority of the State's
Attorneys or the Attorney General under the Consumer Fraud and
Deceptive Business Practices Act.
(Source: P.A. 92-22, eff. 6-30-01.)
(220 ILCS 5/9-201) (from Ch. 111 2/3, par. 9-201)
Sec. 9-201. (a) Unless the Commission otherwise orders,
and except as otherwise provided in this Section, no change
shall be made by any public utility in any rate or other charge
or classification, or in any rule, regulation, practice or
contract relating to or affecting any rate or other charge,
classification or service, or in any privilege or facility,
except after 45 days' notice to the Commission and to the
public as herein provided. Such notice shall be given by
filing with the Commission and keeping open for public
inspection new schedules or supplements stating plainly the

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change or changes to be made in the schedule or schedules then
in force, and the time when the change or changes will go into
effect, and by publication in a newspaper of general
circulation or such other notice to persons affected by such
change as may be prescribed by rule of the Commission. The
Commission, for good cause shown, may allow changes without
requiring the 45 days' notice herein provided for, by an order
specifying the changes so to be made and the time when they
shall take effect and the manner in which they shall be filed
and published.
When any change is proposed in any rate or other charge, or
classification, or in any rule, regulation, practice, or
contract relating to or affecting any rate or other charge,
classification or service, or in any privilege or facility,
such proposed change shall be plainly indicated on the new
schedule filed with the Commission, by some character to be
designated by the Commission, immediately preceding or
following the item.
When any public utility providing water or sewer service
proposes any change in any rate or other charge, or
classification, or in any rule, regulation, practice, or
contract relating to or affecting any rate or other charge,
classification or service, or in any privilege or facility,
such utility shall, in addition to the other notice
requirements of this Act, provide notice of such change to all
customers potentially affected by including a notice and

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description of such change, and of Commission procedures for
intervention, in the first bill sent to each such customer
after the filing of the proposed change.
For water or sewer utilities with greater than 15,000
total customers, the following notice requirements are
applicable, in addition to the other notice requirements of
this Act:
(1) As a separate bill insert, an initial notice in
the first bill sent to all customers potentially affected
by the proposed change after the filing of the proposed
change shall include:
(A) the approximate date when the change or
changes shall go into effect assuming the Commission
utilizes the 11-month process as described in this
Section;
(B) a statement indicating that the estimated bill
impact may vary based on multiple factors, including,
but not limited to, meter size, usage volume, and the
fire protection district;
(C) the water or sewer utility's customer service
number or other number as may be appropriate where an
authorized agent of the water or sewer utility can
explain how the proposed increase might impact an
individual customer's bill;
(D) if the proposed change involves a change from
a flat to a volumetric rate, an explanation of

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volumetric rate;
(E) a reference to the water or sewer utility's
website where customers can find tips on water
conservation; and
(F) for customers receiving both water and sewer
service from a utility and if the customer has an
option to install a separate meter for irrigation to
mitigate sewer charges, an explanation of the water
and sewer utility's and the customer's
responsibilities for installation of a separate meter
if such a change is approved.
(2) A second notice to all customers shall be included
on the first bill after the Commission suspends the
tariffs initiating the rate case.
(3) Final notice of such change shall be sent to all
customers potentially affected by the proposed change by
including information required under this paragraph (3)
with the first bill after the effective date of the rates
approved by the Final Order of the Commission in a rate
case. The notice shall include the following:
(A) the date when the change or changes went into
effect;
(B) the water or sewer utility's customer service
number or other number as may be appropriate where an
authorized agent of the water or sewer utility can
explain how the proposed increase might impact an

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individual customer's bill;
(C) an explanation that usage shall now be charged
at a volumetric rate rather than a flat rate, if
applicable;
(D) a reference to the water or sewer utility's
website where the customer can find tips on water
conservation; and
(E) for customers receiving both water and sewer
service from a utility and if the customer has an
option to install a separate meter for irrigation to
mitigate sewer charges, an explanation of the water
and sewer utility's and the customer's
responsibilities for installation of a separate meter
if such a change is approved.
(b) Whenever there shall be filed with the Commission any
schedule stating an individual or joint rate or other charge,
classification, contract, practice, rule or regulation, the
Commission shall have power, and it is hereby given authority,
either upon complaint or upon its own initiative without
complaint, at once, and if it so orders, without answer or
other formal pleadings by the interested public utility or
utilities, but upon reasonable notice, to enter upon a hearing
concerning the propriety of such rate or other charge,
classification, contract, practice, rule or regulation, and
pending the hearing and decision thereon, such rate or other
charge, classification, contract, practice, rule or regulation

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shall not go into effect. The period of suspension of such rate
or other charge, classification, contract, practice, rule or
regulation shall not extend more than 105 days beyond the time
when such rate or other charge, classification, contract,
practice, rule or regulation would otherwise go into effect
unless the Commission, in its discretion, extends the period
of suspension for a further period not exceeding 6 months.
All rates or other charges, classifications, contracts,
practices, rules or regulations not so suspended shall, on the
expiration of 45 days from the time of filing the same with the
Commission, or of such lesser time as the Commission may
grant, go into effect and be the established and effective
rates or other charges, classifications, contracts, practices,
rules and regulations, subject to the power of the Commission,
after a hearing had on its own motion or upon complaint, as
herein provided, to alter or modify the same.
Within 30 days after such changes have been authorized by
the Commission, copies of the new or revised schedules shall
be posted or filed in accordance with the terms of Section
9-103 of this Act, in such a manner that all changes shall be
plainly indicated. The Commission shall incorporate into the
period of suspension a review period of 4 business days during
which the Commission may review and determine whether the new
or revised schedules comply with the Commission's decision
approving a change to the public utility's rates. Such review
period shall not extend the suspension period by more than 2

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days. Absent notification to the contrary within the 4
business day period, the new or revised schedules shall be
deemed approved.
(c) If the Commission enters upon a hearing concerning the
propriety of any proposed rate or other charge,
classification, contract, practice, rule or regulation, the
Commission shall establish the rates or other charges,
classifications, contracts, practices, rules or regulations
proposed, in whole or in part, or others in lieu thereof, which
it shall find to be just and reasonable. In such hearing, the
burden of proof to establish the justness and reasonableness
of the proposed rates or other charges, classifications,
contracts, practices, rules or regulations, in whole and in
part, shall be upon the utility. The utility, the staff of the
Commission, the Attorney General, or any party to a proceeding
initiated under this Section who has been granted intervenor
status and submitted a post-hearing brief must be given the
opportunity to present oral argument, if requested no later
than the date for filing exceptions, on the propriety of any
proposed rate or other charge, classification, contract,
practice, rule, or regulation. No rate or other charge,
classification, contract, practice, rule or regulation shall
be found just and reasonable unless it is consistent with
Sections of this Article.
(d) Except where compliance with Section 8-401 of this Act
is of urgent and immediate concern, no representative of a

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public utility may discuss with a commissioner, commissioner's
assistant, or administrative law judge in a non-public setting
a planned filing for a general rate increase. If a public
utility makes a filing under this Section, then no substantive
communication by any such person with a commissioner,
commissioner's assistant, or administrative law judge
concerning the filing is permitted until a notice of hearing
has been issued. After the notice of hearing has been issued,
the only communications by any such person with a
commissioner, commissioner's assistant, or administrative law
judge concerning the filing permitted are communications
permitted under Section 10-103 of this Act. If any such
communication does occur, then within 5 days of the docket
being initiated all details relating to the communication
shall be placed on the public record of the proceeding. The
record shall include any materials, whether written, recorded,
filmed, or graphic in nature, produced or reproduced on any
media, used in connection with the communication. The record
shall reflect the names of all persons who transmitted,
received, or were otherwise involved in the communication, the
duration of the communication, and whether the communication
occurred in person or by other means. In the case of an oral
communication, the record shall also reflect the location or
locations of all persons involved in the communication and, if
the communication occurred by telephone, the telephone numbers
for the callers and recipients of the communication. A

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commissioner, commissioner's assistant, or administrative law
judge who is involved in any such communication shall be
recused from the affected proceeding. The Commission, or any
commissioner or administrative law judge presiding over the
proceeding shall, in the event of a violation of this Section,
take action necessary to ensure that such violation does not
prejudice any party or adversely affect the fairness of the
proceedings including dismissing the affected proceeding.
Nothing in this subsection (d) is intended to preclude
otherwise allowable updates on issues that may be indirectly
related to a general rate case filing because cost recovery
for the underlying activity may be requested. Such updates may
include, without limitation, issues related to outages and
restoration, credit ratings, security issuances, reliability,
Federal Energy Regulatory Commission matters, Federal
Communications Commission matters, regional reliability
organizations, consumer education, or labor matters, provided
that such updates may not include cost recovery in a planned
rate case.
(e) In a ratemaking proceeding, the Commission shall not
approve for ratemaking purposes either of the following:
(1) a cost of equity exceeding 8% unless clear and
convincing record evidence demonstrates that a higher
return on equity is strictly necessary to prevent an
imminent and significant threat of negative credit action
that would be expected to increase the cost of service for

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the utility's ratepayers;
(2) a capital structure comprised of more than 50%
common equity unless clear and convincing record evidence
demonstrates that a higher equity ratio is strictly
necessary to prevent an imminent and significant threat of
negative credit action that would be expected to increase
the cost of service for the utility's ratepayers.
The Commission shall not treat the utility's interest in
offsetting the revenue impact of enforcing either of the
limitations set forth in this subsection as justification for
approving or adjusting any other proposed revenues.
(Source: P.A. 100-840, eff. 8-13-18.)
(220 ILCS 5/16-108.18)
Sec. 16-108.18. Performance-based ratemaking.
(a) The General Assembly finds:
(1) That improving the alignment of utility customer
and company interests is critical to ensuring equity,
rapid growth of distributed energy resources, electric
vehicles, and other new technologies that substantially
change the makeup of the grid and protect Illinois
residents and businesses from potential economic and
environmental harm from the State's energy systems.
(2) There is urgency around addressing increasing
threats from climate change and assisting communities that
have borne disproportionate impacts from climate change,

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including air pollution, greenhouse gas emissions, and
energy burdens. Addressing this problem requires changes
to the business model under which utilities in Illinois
have traditionally functioned.
(3) Providing targeted incentives to support change
through a new performance-based structure to enhance
ratemaking is intended to enable alignment of utility,
customer, community, and environmental goals.
(4) Though Illinois has taken some measures to move
utilities to performance-based ratemaking through the
establishment of performance incentives and a
performance-based formula rate under the Energy
Infrastructure Modernization Act, these measures have not
been sufficiently transformative in urgently moving
electric utilities toward the State's ambitious energy
policy goals: protecting a healthy environment and
climate, improving public health, and creating quality
jobs and economic opportunities, including wealth
building, especially in economically disadvantaged
communities and communities of color.
(5) These measures were not developed through a
process to understand first what performance measures and
penalties would help drive the sought-after behavior by
the utilities.
(6) While the General Assembly has not made a finding
that the spending related to the Energy Infrastructure and

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Modernization Act and its performance metrics was not
reasonable, it is important to address concerns that these
measures may have resulted in excess utility spending and
guaranteed profits without meaningful improvements in
customer experience, rate affordability, or equity.
(7) Discussions of performance incentive mechanisms
must always take into account the affordability of
customer rates and bills for all customers, including
low-income customers.
(8) The General Assembly therefore directs the
Illinois Commerce Commission to complete a transition that
includes a comprehensive performance-based regulation
framework for electric utilities serving more than 500,000
customers. The breadth of this framework should revise
existing utility regulations to position Illinois electric
utilities to effectively and efficiently achieve current
and anticipated future energy needs of this State, while
ensuring affordability for consumers.
(b) As used in this Section:
"Commission" means the Illinois Commerce Commission.
"Demand response" means measures that decrease peak
electricity demand or shift demand from peak to off-peak
periods.
"Distributed energy resources" or "DER" means a wide range
of technologies that are connected to the grid including those
that are located on the customer side of the customer's

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electric meter and can provide value to the distribution
system, including, but not limited to, distributed generation,
energy storage, electric vehicles, and demand response
technologies.
"Economically disadvantaged communities" means areas of
one or more census tracts where average household income does
not exceed 80% of area median income.
"Environmental justice communities" means the definition
of that term as used and as may be updated in the long-term
renewable resources procurement plan by the Illinois Power
Agency and its Program Administrator in the Illinois Solar for
All Program.
"Equity investment eligible community" means the
geographic areas throughout Illinois which would most benefit
from equitable investments by the State designed to combat
discrimination. Specifically, the equity investment eligible
communities shall be defined as the following areas:
(1) R3 Areas as established pursuant to Section 10-40
of the Cannabis Regulation and Tax Act, where residents
have historically been excluded from economic
opportunities, including opportunities in the energy
sector; and
(2) Environmental justice communities, as defined by
the Illinois Power Agency pursuant to the Illinois Power
Agency Act, where residents have historically been subject
to disproportionate burdens of pollution, including

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pollution from the energy sector.
"Performance incentive mechanism" means an instrument by
which utility performance is incentivized, which could include
a monetary performance incentive.
"Performance metric" means a manner of measurement for a
particular utility activity.
(c) Through coordinated, comprehensive system planning,
ratemaking, and performance incentives, the performance-based
ratemaking framework should be designed to accomplish the
following objectives:
(1) maintain and improve service reliability and
safety, including and particularly in environmental
justice, low-income and equity investment eligible
communities;
(2) decarbonize utility systems at a pace that meets
or exceeds State climate goals, while also ensuring the
affordability of rates for all customers, including
low-income customers;
(3) direct electric utilities to make cost-effective
investments that support achievement of Illinois' clean
energy policies, including, at a minimum, investments
designed to integrate distributed energy resources, comply
with critical infrastructure protection standards, plans,
and industry best practices, and support and take
advantage of potential benefits from the electric vehicle
charging and other electrification, while mitigating the

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impacts;
(4) choose cost-effective assets and services, whether
utility-supplied or through third-party contracting,
considering both economic and environmental costs and the
effects on utility rates, to deliver high-quality service
to customers at least cost;
(5) maintain the affordability of electric delivery
services for all customers, including low-income
customers;
(6) maintain and grow a diverse workforce, diverse
supplier procurement base and, for relevant programs,
diverse approved-vendor pools, including increased
opportunities for minority-owned, female-owned,
veteran-owned, and disability-owned business enterprises;
(7) improve customer service performance and
engagement;
(8) address the particular burdens faced by consumers
in environmental justice and equity investment eligible
communities, including shareholder, consumer, and publicly
funded bill payment assistance and credit and collection
policies, and ensure equitable disconnections, late fees,
or arrearages as a result of utility credit and collection
practices, which may include consideration of impact by
zip code; and
(9) implement or otherwise enhance current supplier
diversity programs to increase diverse contractor

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participation in professional services, subcontracting,
and prime contracting opportunities with programs that
address barriers to access. Supplier diversity programs
shall address specific barriers related to RFP and
contract access, access to capital, information technology
and cyber security access and costs, administrative
burdens, and quality control with specific metrics,
outcomes, and demographic data reported.
(d) Multi-Year Rate Plan.
(1) If an electric utility had a performance-based
formula rate in effect under Section 16-108.5 as of
December 31, 2020, then the utility may file a petition
proposing tariffs implementing a 4-year Multi-Year Rate
Plan as provided in this Section no later than, January
20, 2023, for delivery service rates to be effective for
the billing periods January 1, 2024 through December 31,
2027. The Commission shall issue an order approving or
approving as modified the utility's plan no later than
December 20, 2023. The term "Multi-Year Rate Plan" refers
to a plan establishing the base rates the utility shall
charge for each delivery year of the 4-year period to be
covered by the plan, which shall be subject to
modification only as expressly allowed in this Section.
(2) A utility proposing a Multi-Year Rate Plan shall
provide a 4-year investment plan and a description of the
utility's major planned investments, including, at a

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minimum, all investments of $2,000,000 or greater over the
plan period for an electric utility that serves more than
3,000,000 retail customers in the State or $500,000 for an
electric utility that serves less than 3,000,000 retail
customers in the State but more than 500,000 retail
customers in the State. The 4-year investment plan must be
consistent with the Multi-Year Integrated Grid Plan
described in Section 16-105.17 of this Act. The investment
plan shall provide sufficiently detailed information, as
required by the Commission, including, at a minimum, a
description of each investment, the location of the
investment, and an explanation of the need for and benefit
of such an investment to the extent known.
(3) The Multi-Year Rate Plan shall be implemented
through a tariff filed with the Commission consistent with
the provisions of this paragraph (3) that shall apply to
all delivery service customers. The Commission shall
initiate and conduct an investigation of the tariff in a
manner consistent with the provisions of this paragraph
(3) and the provisions of Article IX of this Act, to the
extent they do not conflict with this paragraph (3). The
Multi-Year Rate Plan approved by the Commission shall do
the following:
(A) Provide for the recovery of the utility's
forecasted rate base, based on the 4-year investment
plan and the utility's Integrated Grid Plan. The

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forecasted rate base must include the utility's
planned capital investments, with rates based on
average annual plant investment, and
investment-related costs, including income tax
impacts, depreciation, and ratemaking adjustments and
costs that are prudently incurred and reasonable in
amount consistent with Commission practice and law.
The process used to develop the forecasts must be
iterative, rigorous, and lead to forecasts that
reasonably represent the utility's investments during
the forecasted period and ensure that the investments
are projected to be used and useful during the annual
investment period and least cost, consistent with the
provisions of Articles VIII and IX of this Act.
(B) The cost of equity shall be approved by the
Commission consistent with Commission practice and law
and shall not exceed 8% unless clear and convincing
record evidence demonstrates that a higher return on
equity is strictly necessary to prevent an imminent
and significant threat of negative credit action that
would be expected to increase the cost of service for
the utility's ratepayers. The Commission shall not
treat offsetting the impact of the cap on equity ratio
in subparagraph (C) of this Section on the utility's
revenues as a justification for increasing the cost of
equity beyond what is otherwise sufficient and

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necessary. A cost of equity of more than 8% shall not
be permitted unless specifically approved by the
Commission.
(C) The revenue requirement shall reflect the
utility's actual capital structure for the applicable
calendar year, subject to the limitations that (i) the
Commission shall not approve a common equity ratio
above 50% absent clear and convincing record evidence
demonstrating that a higher equity ratio is strictly
necessary to prevent an imminent and significant
threat of negative credit action that would be
expected to increase the cost of service for
ratepayers, and (ii) the Commission shall not treat
offsetting the impact of the cap on cost of equity in
subparagraph (B) on the utility's revenues as a
justification for increasing the equity ratio beyond
what is otherwise sufficient and necessary. A year-end
capital structure that includes a common equity ratio
of up to and including 50% of the total capital
structure shall be deemed prudent and reasonable. A
higher common equity ratio of more than 50% shall not
be permitted unless must be specifically approved by
the Commission.
(E) Provide for recovery of prudent and reasonable
projected operating expenses, giving effect to
ratemaking adjustments, consistent with Commission

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practice and law under Article IX of this Act.
Operating expenses for years after the first year of
the Multi-Year Rate Plan may be estimated by the use of
known and measurable changes, expense reductions
associated with planned capital investments as
appropriate, and reasonable and appropriate
escalators, indices, or other metrics.
(F) Amortize the amount of unprotected
property-related excess accumulated deferred income
taxes in rates as of January 1, 2023 over a period
ending December 31, 2027, unless otherwise required to
amortize the excess deferred income tax pursuant to
Section 16-108.21 of this Act.
(G) Allow recovery of incentive compensation
expense that is based on the achievement of
operational metrics, including metrics related to
budget controls, outage duration and frequency,
safety, customer service, efficiency and productivity,
environmental compliance and attainment of
affordability and environmental goals, and other goals
and metrics approved by the Commission. Incentive
compensation expense that is based on net income or an
affiliate's earnings per share shall not be
recoverable.
(H) To the maximum extent practicable, align the
4-year investment plan and annual capital budgets with

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the electric utility's Multi-Year Integrated Grid
Plan.
(4) The Commission shall establish annual rates for
each year of the Multi-Year Rate Plan that accurately
reflect and are based only upon the utility's reasonable
and prudent costs of service over the term of the plan,
including the effect of all ratemaking adjustments
consistent with Commission practice and law as determined
by the Commission, provided that the costs are not being
recovered elsewhere in rates. Tariff riders authorized by
the Commission may continue outside of a plan authorized
under this Section to the extent such costs are not
recovered elsewhere in rates. For the first multi-year
rate plan, the burden of proof shall be on the electric
utility to establish the prudence of investments and
expenditures and to establish that such investments
consistent with and reasonably necessary to meet the
requirements of the utility's first approved Multi-Year
Integrated Grid Plan described in Section 16-105.17 of
this Act. For subsequent Multi-Year Rate Plans, the burden
of proof shall be on the electric utility to establish the
prudence of investments and expenditures and to establish
that such investments are consistent with and reasonably
necessary to meet the requirements of the utility's most
recently approved Multi-Year Integrated Grid Plan
described in Section 16-105.17 of this Act. The sole fact

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that a cost differs from that incurred in a prior period or
that an investment is different from that described in the
Multi-Year Integrated Grid Plan shall not imply the
imprudence or unreasonableness of that cost or investment.
The sole fact that an investment is the same or similar to
that described in the Multi-Year Integrated Grid Plan
shall not imply prudence and reasonableness of that
investment.
(5) To facilitate public transparency, all materials,
data, testimony, and schedules shall be provided to the
Commission in an editable, machine-readable electronic
format including .doc, .docx, .xls, .xlsx, and similar
file formats, but not including .pdf or .exif. Should
utilities designate any materials confidential, they shall
have an affirmative duty to explain why the particular
information is marked confidential. In determining
prudence and reasonableness of rates, the Commission shall
make its determination based upon the record, including
each public comment filed or provided orally at open
meetings consistent with the Commission's rules and
practices.
(6) The Commission may, by order, establish terms,
conditions, and procedures for submitting and approving a
Multi-Year Rate Plan necessary to implement this Section
and ensure that rates remain just and reasonable during
the course of the plan, including terms and procedures for

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rate adjustment.
(7) An electric utility that files a tariff pursuant
to paragraph (3) of this subsection (e) must submit a
one-time $300,000 filing fee at the time the Chief Clerk
of the Commission accepts the filing, which shall be a
recoverable expense.
(8) An electric utility operating under a Multi-Year
Rate Plan shall file a new Multi-Year Rate Plan at least
300 days prior to the end of the initial Multi-Year Rate
Plan unless it elects to file a general rate case pursuant
to paragraph (9), and every 4 years thereafter, with a
rate-effective date of the proposed tariffs such that,
after the Commission suspension period, the rates would
take effect immediately at the close of the final year of
the initial Multi-Year Rate Plan. In subsequent Multi-Year
Rate Plans, as in the initial plans, utilities and
stakeholders may propose additional metrics that achieve
the outcomes described in paragraph (2) of subsection (f)
of this Section.
(9) Election of Rate Case.
(A) On or before the date prescribed by
subparagraph (B) of paragraph (9) of this Section,
electric utilities that serve more than 500,000 retail
customers in the State shall file either a general
rate case under Section 9-201 of this Act, or a
Multi-Year Rate Plan, as set forth in paragraph (1) of

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this subsection (d).
(B) Electric utilities described in subparagraph
(A) of paragraph (9) of this Section shall file their
initial general rate case or Multi-Year Rate Plan, as
applicable, with the Commission no later than January
20, 2023.
(C) Notwithstanding which rate filing option an
electric utility elects to file on the date prescribed
by subparagraph (B) of paragraph (9) of this Section,
the electric utility shall be subject to the
Multi-year Integrated Plan filing requirements.
(D) Following its initial rate filing pursuant to
paragraph (2), an electric utility subject to the
requirements of this Section shall thereafter be
permitted to elect a different rate filing option
consistent with any filing intervals established for a
general rate case or Multi-Year Rate Plan, as follows:
(i) An electric utility that initially elected
to file a Multi-Year Rate Plan and thereafter
elects to transition to a general rate case may do
so upon completion of the 4-year Multi-Year Rate
Plan by filing a general rate case at the same time
that the utility would have filed its subsequent
Multi-Year Rate Plan, as specified in paragraph
(8) of this subsection (d). Notwithstanding this
election, the annual adjustment of the final year

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of the Multi-Year Rate Plan shall proceed as
specified in paragraph (6) of subsection (f).
(ii) An electric utility that initially
elected to a file general rate case and thereafter
elects to transition to a Multi-Year Rate Plan may
do so only at the 4-year filing intervals
identified by paragraph (8) of this subsection
(d).
(10) The Commission shall approve tariffs establishing
rate design for all delivery service customers unless the
electric utility makes the election specified in Section
16-105.5, in which case the rate design shall be subject
to the provisions of that Section.
(11) The Commission shall establish requirements for
annual performance evaluation reports to be submitted
annually for performance metrics. Such reports shall
include, but not be limited to, a description of the
utility's performance under each metric and an
identification of any extraordinary events that adversely
affected the utility's performance.
(12) For the first Multi-Year Rate Plan, the
Commission shall consolidate its investigation with the
proceeding under Section 16-105.17 to establish the
Multi-Year Integrated Grid Plan no later than 45 days
after plan filing.
(13) Where a rate change under a Multi-Year Rate Plan

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will result in a rate increase, an electric utility may
propose a rate phase-in plan that the Commission shall
approve with or without modification or deny in its final
order approving the new delivery services rates. A
proposed rate phase-in plan under this paragraph (13) must
allow the new delivery services rates to be implemented in
no more than 2 steps, as follows: in the first step, at
least 50% of the approved rate increase must be reflected
in rates, and, in the second step, 100% of the rate
increase must be reflected in rates. The second step's
rates must take effect no later than 12 months after the
first step's rates were placed into effect. The portion of
the approved rate increase not implemented in the first
step shall be recorded on the electric utility's books as
a regulatory asset, and shall accrue carrying costs to
ensure that the utility does not recover more or less than
it otherwise would because of the deferral. This portion
shall be recovered, with such carrying costs at the
weighted average cost of capital, through a surcharge
applied to retail customer bills that (i) begins no later
than 12 months after the date on which the second step's
rates went into effect and (ii) is applied over a period
not to exceed 24 months. Nothing in this paragraph is
intended to limit the Commission's authority to mitigate
the impact of rates caused by rate plans, or any other
instance on a revenue-neutral basis; nor shall it mitigate

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a utility's ability to make proposals to mitigate the
impact of rates. When a deferral, or similar method, is
used to mitigate the impact of rates, the utility should
be allowed to recover carrying costs.
(14) Notwithstanding the provisions of Section (13),
the Commission may, on its own initiative, take
revenue-neutral measures to relieve the impact of rate
increases on customers. Such initiatives may be taken by
the Commission in the first Multi-Year Rate Plan,
subsequent multi-year plans, or in other instances
described in this Act.
(15) Whenever during the pendency of a Multi-year Rate
Plan, an electric utility subject to this Section becomes
aware that, due to circumstances beyond its control,
prudent operating practices will require the utility to
make adjustments to the Multi-Year Rate Plan, the electric
utility may file a petition with the Commission requesting
modification of the approved annual revenue requirements
included in the Multi-Year Rate Plan. The electric utility
must support its request with evidence demonstrating why a
modification is necessary, due to circumstances beyond the
utility's control, to follow prudent operating practices
and must set forth the changes to each annual revenue
requirement to be approved, and the basis for any changes
in anticipated operating expenses or capital investment
levels. The utility shall affirmatively address the impact

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of the changes on the Multi-Year Integrated Grid Plan and
Multi-Year Rate Plan originally submitted and approved by
the Commission. Any interested party may file an objection
to the changes proposed, or offer alternatives to the
utility's proposal, as supported by testimony and
evidence. After notice and hearing, the Commission shall
issue a final order regarding the electric utility's
request no later than 180 days after the filing of the
petition.
(e) Performance incentive mechanisms.
(1) The electric industry is undergoing rapid
transformation, including fundamental changes in how
electricity is generated, procured, and delivered and how
customers are choosing to participate in the supply and
delivery of electricity to and from the electric grid.
Building upon the State's goals to increase the
procurement of electricity from renewable energy
resources, including distributed generation and storage
devices, the General Assembly finds that electric
utilities should make cost-effective investments that
support moving forward on Illinois' clean energy policies.
It is therefore in the State's interest for the Commission
to establish performance incentive mechanisms in order to
better tie utility revenues to performance and customer
benefits, accelerate progress on Illinois energy and other
goals, ensure equity and affordability of rates for all

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customers, including low-income customers, and hold
utilities publicly accountable.
(2) The Commission shall approve, based on the
substantial evidence proffered in the proceeding initiated
pursuant to this subsection performance metrics that, to
the extent practicable and achievable by the electric
utility, encourage cost-effective, equitable utility
achievement of the outcomes described in this subsection
(e) while ensuring no degradation in the significant
performance improvement achieved through previously
established performance metrics. For each electric
utility, the Commission shall approve metrics designed to
achieve incremental improvements over baseline performance
values and targets, over a performance period of up to 10
years, and no less than 4 years.
(A) The Commission shall approve no more than 8
metrics, with at least one metric from each of the
categories below, for each electric utility, from
subparagraphs (i) through (vi) of this subsection (A).
Upon a utility request, the Commission may approve the
use of a specific, measurable, and achievable tracking
metric described in paragraph (3) of subsection (e) as
a performance metric pursuant to paragraph (2) of
subsection (e).
(i) Metrics designed to ensure the utility
maintains and improves the high standards of both

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overall and locational reliability and resiliency,
and makes improvements in power quality, including
and particularly in environmental justice and
equity investment eligible communities.
(ii) Peak load reductions attributable to
demand response programs.
(iii) Supplier diversity expansion, including
diverse contractor participation in professional
services, subcontracting, and prime contracting
opportunities, development of programs that
address the barriers to access, aligning
demographics of contractors to the demographics in
the utility's service territory, establish
long-term mentoring relationships that develop and
remove barriers to access for diverse and
underserved contractors. The utilities shall
provide solutions, resources, and tools to address
complex barriers of entry related to costly and
time-intensive cyber security requirements,
increasingly complex information technology
requirements, insurance barriers, service provider
sign-up process barriers, administrative process
barriers, and other barriers that inhibit access
to RFPs and contracts. For programs with contracts
over $1,000,000, winning bidders must demonstrate
a subcontractor development or mentoring

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relationship with at least one of their diverse
subcontracting partners for a core component of
the scope of the project. The mentoring time and
cost shall be taken into account in the creation
of RFP and shall include a structured and measured
plan by the prime contractor to increase the
capabilities of the subcontractor in their
proposed scope. The metric shall include reporting
on all supplier diversity programs by goals,
program results, demographics and geography, with
separate reporting by category of minority-owned,
female-owned, veteran-owned, and disability-owned
business enterprise metrics. The report shall
include resources and expenses committed to the
programs and conversion rates of new diverse
utility contractors.
(iv) Achieve affordable customer delivery
service costs, with particular emphasis on keeping
the bills of lower-income households, households
in equity investment eligible communities, and
household in environmental justice communities
within a manageable portion of their income and
adopting credit and collection policies that
reduce disconnections for these households
specifically and for customers overall to ensure
equitable disconnections, late fees, or arrearages

HB2541 - 35 - LRB103 29016 AMQ 55402 b
as a result of utility credit and collection
practices, which may include consideration of
impact by zip code.
(v) Metrics designed around the utility's
timeliness to customer requests for
interconnection in key milestone areas, such as:
initial response, supplemental review, and system
feasibility study; improved average service
reliability index for those customers that have
interconnected a distributed renewable energy
generation device to the utility's distribution
system and are lawfully taking service under an
applicable tariff; offering a variety of
affordable rate options, including demand
response, time of use rates for delivery and
supply, real-time pricing rates for supply;
comprehensive and predictable net metering, and
maximizing the benefits of grid modernization and
clean energy for ratepayers; and improving
customer access to utility system information
according to consumer demand and interest.
(vi) Metrics designed to measure the utility's
customer service performance, which may include
the average length of time to answer a customer's
call by a customer service representative, the
abandoned call rate and the relative ranking of

HB2541 - 36 - LRB103 29016 AMQ 55402 b
the electric utility, by a reputable third-party
organization, in customer service satisfaction
when compared to other similar electric utilities
in the Midwest region.
(B) Performance metrics shall include a
description of the metric, a calculation method, a
data collection method, annual performance targets,
and any incentives or penalties for the utility's
achievement of, or failure to achieve, their
performance targets, provided that the total amount of
potential incentives and penalties shall be
symmetrical. Incentives shall be rewards or penalties
or both, reflected as basis points added to, or
subtracted from, the utility's cost of equity. The
metrics and incentives shall apply for the entire time
period covered by a Multi-Year Rate Plan. The total
for all metrics shall be equal to 40 basis points,
however, the Commission may adjust the basis points
upward or downward by up to 20 basis points for any
given Multi-Year Rate Plan, as appropriate, but in no
event may the total exceed 60 basis points or fall
below 20 basis points.
(C) Metrics related to reliability shall be
implemented to ensure equitable benefits to
environmental justice and equity investment eligible
communities, as defined in this Act.

HB2541 - 37 - LRB103 29016 AMQ 55402 b
(D) The Commission shall approve performance
metrics that are reasonably within control of the
utility to achieve. The Commission also shall not
approve a metric that is solely expected to have the
effect of reducing the workforce. Performance metrics
should measure outcomes and actual, rather than
projected, results where possible. Nothing in this
paragraph is intended to require that different
electric utilities must be subject to the same
metrics, goals, or incentives.
(E) Increases or enhancements to an existing
performance goal or target shall be considered in
light of other metrics, cost-effectiveness, and other
factors the Commission deems appropriate. Performance
metrics shall include one year of tracking data
collected in a consistent manner, verifiable by an
independent evaluator in order to establish a baseline
and measure outcomes and actual results against
projections where possible.
(F) For the purpose of determining reasonable
performance metrics and related incentives, the
Commission shall develop a methodology to calculate
net benefits that includes customer and societal costs
and benefits and quantifies the effect on delivery
rates. In determining the appropriate level of a
performance incentive, the Commission shall consider:

HB2541 - 38 - LRB103 29016 AMQ 55402 b
the extent to which the amount is likely to encourage
the utility to achieve the performance target in the
least cost manner; the value of benefits to customers,
the grid, public health and safety, and the
environment from achievement of the performance
target, including in particular benefits to equity
investment eligible community; the affordability of
customer's electric bills, including low-income
customers, the utility's revenue requirement, the
promotion of renewable and distributed energy, and
other such factors that the Commission deems
appropriate. The consideration of these factors shall
result in an incentive level that ensures benefits
exceed costs for customers.
(G) Achievement of performance metrics are based
on the assumptions that the utility will adopt or
implement the technology and equipment, and make the
investments to the extent reasonably necessary to
achieve the goal. If the electric utility is unable to
meet the performance metrics as a result of
extraordinary circumstances outside of its control,
including but not limited to government-declared
emergencies, then the utility shall be permitted to
file a petition with the Commission requesting that
the utility be excused from compliance with the
applicable performance goal or goals and the

HB2541 - 39 - LRB103 29016 AMQ 55402 b
associated financial incentives and penalties. The
burden of proof shall be on the utility, consistent
with Article IX, and the utility's petition shall be
supported by substantial evidence. The Commission
shall, after notice and hearing, enter its order
approving or denying, in whole or in part, the
utility's petition based on the extent to which the
utility demonstrated that its achievement of the
affected metrics and performance goals was hindered by
extraordinary circumstances outside of the utility's
control.
(3) The Commission shall approve reasonable and
appropriate tracking metrics to collect and monitor data
for the purpose of measuring and reporting utility
performance and for establishing future performance
metrics. These additional tracking metrics shall include
at least one metric from each of the following categories
of performance:
(A) Minimize emissions of greenhouse gases and
other air pollutants that harm human health,
particularly in environmental justice and equity
investment eligible communities, through minimizing
total emissions by accelerating electrification of
transportation, buildings and industries where such
electrification results in net reductions, across all
fuels and over the life of electrification measures,

HB2541 - 40 - LRB103 29016 AMQ 55402 b
of greenhouse gases and other pollutants, taking into
consideration the fuel mix used to produce electricity
at the relevant hour and the effect of accelerating
electrification on electricity delivery services
rates, supply prices and peak demand, provided the
revenues the utility receives from accelerating
electrification of transportation, buildings and
industries exceed the costs.
(B) Enhance the grid's flexibility to adapt to
increased deployment of nondispatchable resources,
improve the ability and performance of the grid on
load balancing, and offer a variety of rate plans to
match consumer consumption patterns and lower consumer
bills for electricity delivery and supply.
(C) Ensure rates reflect cost savings attributable
to grid modernization and utilize distributed energy
resources that allow the utility to defer or forgo
traditional grid investments that would otherwise be
required to provide safe and reliable service.
(D) Metrics designed to create and sustain
full-time-equivalent jobs and opportunities for all
segments of the population and workforce, including
minority-owned businesses, women-owned businesses,
veteran-owned businesses, and businesses owned by a
person or persons with a disability, and that do not,
consistent with State and federal law, discriminate

HB2541 - 41 - LRB103 29016 AMQ 55402 b
based on race or socioeconomic status as a result of
this amendatory Act of the 102nd General Assembly.
(E) Maximize and prioritize the allocation of grid
planning benefits to environmental justice and
economically disadvantaged customers and communities,
such that all metrics provide equitable benefits
across the utility's service territory and maintain
and improve utility customers' access to uninterrupted
utility services.
(4) The Commission may establish new tracking and
performance metrics in future Multi-Year Rate Plans to
further measure achievement of the outcomes set forth in
paragraph (2) of subsection (f) of this Section and the
other goals and requirements of this Section.
(5) The Commission shall also evaluate metrics that
were established in prior Multi-Year Rate Plans to
determine if there has been an unanticipated material
change in circumstances such that adjustments are required
to improve the likelihood of the outcomes described in
paragraph (2) of subsection (f). For metrics that were
established in prior Multi-Year Rate Plan proceedings and
that the Commission elects to continue, the design of
these metrics, including the goals of tracking metrics and
the targets and incentive levels and structures of
performance metrics, may be adjusted pursuant to the
requirements in this Section. The Commission may also

HB2541 - 42 - LRB103 29016 AMQ 55402 b
change, adjust or phase out tracking and performance
metrics that were established in prior Multi-Year Rate
Plan proceedings if these metrics no longer meet the
requirements of this Section or if they are rendered
obsolete by the changing needs and technology of an
evolving grid. Additionally, performance metrics that no
longer require an incentive to create improved utility
performance may become tracking metrics in a Multi-Year
Rate Plan proceeding.
(6) The Commission shall initiate a workshop process
no later than August 1, 2021, or 15 days after the
effective date of this amendatory Act of the 102nd General
Assembly, whichever is later, for the purpose of
facilitating the development of metrics for each utility.
The workshop shall be coordinated by the staff of the
Commission, or a facilitator retained by staff, and shall
be organized and facilitated in a manner that encourages
representation from diverse stakeholders and ensures
equitable opportunities for participation, without
requiring formal intervention or representation by an
attorney. Working with staff of the Commission the
facilitator may conduct a combination of workshops
specific to a utility or applicable to multiple utilities
where content and stakeholders are substantially similar.
The workshop process shall conclude no later than October
31, 2021. Following the workshop, the staff of the

HB2541 - 43 - LRB103 29016 AMQ 55402 b
Commission, or the facilitator retained by the Staff,
shall prepare and submit a report to the Commission that
identifies the participants in the process, the metrics
proposed during the process, any material issues that
remained unresolved at the conclusions of such process,
and any recommendations for workshop process improvements.
Any workshop participant may file comments and reply
comments in response to the Staff report.
(A) No later than January, 20, 2022, each electric
utility that intends to file a petition pursuant to
subsection (b) of this Section shall file a petition
with the Commission seeking approval of its
performance metrics, which shall include for each
metric, at a minimum, (i) a detailed description, (ii)
the calculation of the baseline, (iii) the performance
period and overall performance goal, provided that the
performance period shall not commence prior to January
1, 2024, (iv) each annual performance goal, (v) the
performance adjustment, which shall be a symmetrical
basis point increase or decrease to the utility's cost
of equity based on the extent to which the utility
achieved the annual performance goal, and (vi) the new
or modified tariff mechanism that will apply the
performance adjustments. The Commission shall issue
its order approving, or approving with modification,
the utility's proposed performance metrics no later

HB2541 - 44 - LRB103 29016 AMQ 55402 b
than September 30, 2022.
(B) No later than August 1, 2025, the Commission
shall initiate a workshop process that conforms to the
workshop purpose and requirements of this paragraph
(6) of this Section to the extent they do not conflict.
The workshop process shall conclude no later than
October 31, 2025, and the staff of the Commission, or
the facilitator retained by the Staff, shall prepare
and submit a report consistent with the requirements
described in this paragraph (6) of this Section. No
later than January 20, 2026, each electric utility
subject to the requirements of this Section shall file
a petition the reflects, and is consistent with, the
components required in this paragraph (6) of this
Section, and the Commission shall issue its order
approving, or approving with modification, the
utility's proposed performance metrics no later than
September 30, 2026.
(f) On May 1 of each year, following the approval of the
first Multi-Year Rate Plan and its initial year, the
Commission shall open an annual performance evaluation
proceeding to evaluate the utilities' performance on their
metric targets during the year just completed, as well as the
appropriate Annual Adjustment as defined in paragraph (6). The
Commission shall determine the performance and annual
adjustments to be applied through a surcharge in the following

HB2541 - 45 - LRB103 29016 AMQ 55402 b
calendar year.
(1) On February 15 of each year, prior to the annual
performance evaluation proceeding, each utility shall file
a performance evaluation report with the Commission that
includes a description of and all data supporting how the
utility performed under each performance metric and an
identification of any extraordinary events that adversely
impacted the utility's performance.
(2) The metrics approved under this Section are based
on the assumptions that the utility may fully implement
the technology and equipment, and make the investments,
required to achieve the metrics and performance goals. If
the utility is unable to meet the metrics and performance
goals because it was hindered by unanticipated technology
or equipment implementation delays, government-declared
emergencies, or other investment impediments, then the
utility shall be permitted to file a petition with the
Commission on or before the date that its report is due
pursuant to paragraph (1) of this subsection (f)
requesting that the utility be excused from compliance
with the applicable performance goal or goals. The burden
of proof shall be on the utility, consistent with Article
IX, and the utility's petition shall be supported by
substantial evidence. No later than 90 days after the
utility files its petition, the Commission shall, after
notice and hearing, enter its order approving or denying,

HB2541 - 46 - LRB103 29016 AMQ 55402 b
in whole or in part, the utility's petition based on the
extent to which the utility demonstrated that its
achievement of the affected metrics and performance goals
was hindered by unanticipated technology or equipment
implementation delays, or other investment impediments,
that were reasonably outside of the utility's control.
(3) The electric utility shall provide for an annual
independent evaluation of its performance on metrics. The
independent evaluator shall review the utility's
assumptions, baselines, targets, calculation
methodologies, and other relevant information, especially
ensuring that the utility's data for establishing
baselines matches actual performance, and shall provide a
report to the Commission in each annual performance
evaluation describing the results. The independent
evaluator shall present this report as evidence as a
nonparty participant and shall not be represented by the
utility's legal counsel. The independent evaluator shall
be hired through a competitive bidding process with
approval of the contract by the Commission.
The Commission shall consider the report of the
independent evaluator in determining the utility's
achievement of performance targets. Discrepancies between
the utility's assumptions, baselines, targets, or
calculations and those of the independent evaluator shall
be closely scrutinized by the Commission. If the

HB2541 - 47 - LRB103 29016 AMQ 55402 b
Commission finds that the utility's reported data for any
metric or metrics significantly and incorrectly deviates
from the data reported by the independent evaluator, then
the Commission shall order the utility to revise its data
collection and calculation process within 60 days, with
specifications where appropriate.
(4) The Commission shall, after notice and hearing in
the annual performance evaluation proceeding, enter an
order approving the utility's performance adjustment based
on its achievement of or failure to achieve its
performance targets no later than December 20 each year.
The Commission-approved penalties or incentives shall be
applied beginning with the next calendar year.
(5) In order to promote the transparency of utility
investments during the effective period of a multi-year
rate plan, inform the Commission's investigation and
adjustment of rates in the annual adjustment process, and
to facilitate the participation of stakeholders in the
annual adjustment process, an electric utility with an
effective Multi-Year Rate Plan shall, within 90 days of
the close of each quarter during the Multi-Year Rate Plan
period, submit to the Commission a report that summarizes
the additions to utility plant that were placed into
service during the prior quarter, which for purposes of
the report shall be the most recently closed fiscal
quarter. The report shall also summarize the utility plant

HB2541 - 48 - LRB103 29016 AMQ 55402 b
the electric utility projects it will place into service
through the end of the calendar year in which the report is
filed. The projections, estimates, plans, and
forward-looking information that are provided in the
reports pursuant to this paragraph (5) are for planning
purposes and are intended to be illustrative of the
investments that the utility proposes to make as of the
time of submittal. Nothing in this paragraph (5)
precludes, or is intended to limit, a utility's ability to
modify and update its projections, estimates, plans, and
forward-looking information previously submitted in order
to reflect stakeholder input or other new or updated
information and analysis, including, but not limited to,
changes in specific investment needs, customer electric
use patterns, customer applications and preferences, and
commercially available equipment and technologies, however
the utility shall explain any changes or deviations
between the projected investments from the quarterly
reports and actual investments in the annual report. The
reports submitted pursuant to this subsection are intended
to be flexible planning tools, and are expected to evolve
as new information becomes available. Within 7 days of
receiving a quarterly report, the Commission shall timely
make such report available to the public by posting it on
the Commission's website. Each quarterly report shall
include the following detail:

HB2541 - 49 - LRB103 29016 AMQ 55402 b
(A) The total dollar value of the additions to
utility plant placed in service during the prior
quarter;
(B) A list of the major investment categories the
electric utility used to manage its routine standing
operational activities during the prior quarter
including the total dollar amount for the work
reflected in each investment category in which utility
plant in service is equal to or greater than
$2,000,000 for an electric utility that serves more
than 3,000,000 customers in the State or $500,000 for
an electric utility that serves less than 3,000,000
customers but more than 500,000 customers in the State
as of the last day of the quarterly reporting period,
as well as a summary description of each investment
category;
(C) A list of the projects which the electric
utility has identified by a unique investment tracking
number for utility plant placed in service during the
prior quarter for utility plant placed in service with
a total dollar value as of the last day of the
quarterly reporting period that is equal to or greater
than $2,000,000 for an electric utility that serves
more than 3,000,000 customers in the State or $500,000
for an electric utility that serves less than
3,000,000 retail customers but more than $500,000

HB2541 - 50 - LRB103 29016 AMQ 55402 b
retail customers in the State, as well as a summary of
each project;
(D) The estimated total dollar value of the
additions to utility plant projected to be placed in
service through the end of the calendar year in which
the report is filed;
(E) A list of the major investment categories the
electric utility used to manage its routine standing
operational activities with utility plant projected to
be placed in service through the end of the calendar
year in which the report is filed, including the total
dollar amount for the work reflected in each
investment category in which utility plant in service
is projected to be equal to or greater than $2,000,000
for an electric utility that serves more than
3,000,000 customers in the State or $500,000 for an
electric utility that serves less than 3,000,000
retail customers but more than 500,000 retail
customers in the State, as well as a summary
description of each investment category; and
(F) A list of the projects for which the electric
utility has identified by a unique investment tracking
number for utility plant projected to be placed in
service through the end of the calendar year in which
the report is filed with an estimated dollar value
that is equal to or greater than $2,000,000 for an

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electric utility that serves more than 3,000,000
customers in the State or $500,000 for an electric
utility that serves less than 3,000,000 retails
customers but more than $500,000 retail customers in
the State, as well as a summary description of each
project.
(6) As part of the Annual Performance Adjustment, the
electric utility shall submit evidence sufficient to
support a determination of its actual revenue requirement
for the applicable calendar year, consistent with the
provisions of paragraphs (d) and (f) of this subsection.
The electric utility shall bear the burden of
demonstrating that its costs were prudent and reasonable,
subject to the provisions of paragraph (4) of this
subsection (f). The Commission's review of the electric
utility's annual adjustment shall be based on the same
evidentiary standards, including, but not limited to,
those concerning the prudence and reasonableness of the
known and measurable costs forecasted to be incurred by
the utility, and the used and usefulness of the actual
plant investment pursuant to Section 9-211 of this Act,
that the Commission applies in a proceeding to review a
filing for changes in rates pursuant to Section 9-201 of
this Act. The Commission shall determine the prudence and
reasonableness of the actual costs incurred by the utility
during the applicable calendar year, as well as determine

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the original cost of plant in service as of the end of the
applicable calendar year. The Commission shall then
determine the Annual Adjustment, which shall mean the
amount by which, the electric utility's actual revenue
requirement for the applicable year of the Multi-Year Rate
Plan either exceeded, or was exceeded by, the revenue
requirement approved by the Commission for such calendar
year, plus carrying costs calculated at the weighted
average cost of capital approved for the Multi-Year Rate
Plan.
The Commission's determination of the electric
utility's actual revenue requirement for the applicable
calendar year shall be based on:
(A) the Commission-approved used and useful,
prudent and reasonable actual costs for the applicable
calendar year, which shall be determined pursuant to
the following criteria:
(i) The overall level of actual costs incurred
during the calendar year, provided that the
Commission may not allow recovery of actual costs
that are more than 105% of the approved revenue
requirement calculated as provided in item (ii) of
this subparagraph (A), except to the extent the
Commission approves a modification of the
Multi-Year Rate Plan to permit such recovery.
(ii) The calculation of 105% of the revenue

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requirement required by this subparagraph (A)
shall exclude the revenue requirement impacts of
the following volatile and fluctuating variables
that occurred during the year: (i) storms and
weather-related events for which the utility
provides sufficient evidence to demonstrate that
such expenses were not foreseeable and not in
control of the utility; (ii) new business; (iii)
changes in interest rates; (iv) changes in taxes;
(v) facility relocations; (vi) changes in pension
or post-retirement benefits costs due to
fluctuations in interest rates, market returns or
actuarial assumptions; (vii) amortization expenses
related to costs; and (viii) changes in the timing
of when an expenditure or investment is made such
that it is accelerated to occur during the
applicable year or deferred to occur in a
subsequent year.
(B) the year-end rate base;
(C) the cost of equity approved in the multi-year
rate plan; and
(D) the electric utility's actual year-end capital
structure, provided that the common equity ratio in
such capital structure may not exceed the common
equity ratio that was approved by the Commission in
the Multi-Year Rate Plan.

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(2) The Commission's determinations of the prudence
and reasonableness of the costs incurred for the
applicable year, and of the original cost of plant in
service as of the end of the applicable calendar year,
shall be final upon entry of the Commission's order and
shall not be subject to collateral attack in any other
Commission proceeding, case, docket, order, rule, or
regulation; however, nothing in this Section shall
prohibit a party from petitioning the Commission to rehear
or appeal to the courts the order pursuant to the
provisions of this Act.
(g) During the period leading to approval of the first
Multi-Year Integrated Grid Plan, each electric utility will
necessarily continue to invest in its distribution grid. Those
investments will be subject to a determination of prudence and
reasonableness consistent with Commission practice and law.
Any failure to conform to the Multi-Year Integrated Grid Plan
ultimately approved shall not imply imprudence or
unreasonableness.
(h) After calculating the Performance Adjustment and
Annual Adjustment, the Commission shall order the electric
utility to collect the amount in excess of the revenue
requirement from customers, or issue a refund to customers, as
applicable, to be applied through a surcharge beginning with
the next calendar year.
Electric utilities subject to the requirements of this

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Section shall be permitted to file new or revised tariffs to
comply with the provisions of, and Commission orders entered
pursuant to, this Section.
(Source: P.A. 102-662, eff. 9-15-21.)