Bill Text: IL HB3044 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Public Utilities Act. Makes changes to provisions concerning natural gas surcharge authorization to provide that those provisions apply only to a natural gas utility that, on or after the effective date of the amendatory Act, serves more than 1,000,000 customers or is a combination utility as defined in the Act. Specifies that nothing in the provisions prevents the Illinois Commerce Commission from issuing an order pursuant to certain provisions concerning service obligations and conditions. Effective immediately.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced - Dead) 2019-12-16 - Added Chief Co-Sponsor Rep. Mary E. Flowers [HB3044 Detail]

Download: Illinois-2019-HB3044-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB3044 Introduced , by Rep. Sonya M. Harper SYNOPSIS AS INTRODUCED:
220 ILCS 5/9-220.3
Amends the Public Utilities Act. Makes changes to provisions concerning natural gas surcharge authorization to provide that those provisions apply only to a natural gas utility that, on or after the effective date of the amendatory Act, serves more than 1,000,000 customers or is a combination utility as defined in the Act. Specifies that nothing in the provisions prevents the Illinois Commerce Commission from issuing an order pursuant to certain provisions concerning service obligations and conditions. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
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
Section 9-220.3 as follows:
(220 ILCS 5/9-220.3)
(Section scheduled to be repealed on December 31, 2023)
Sec. 9-220.3. Natural gas surcharges authorized.
(a) Tariff.
(1) Pursuant to Section 9-201 of this Act, a natural
gas utility serving more than 700,000 customers may file a
tariff for a surcharge which adjusts rates and charges to
provide for recovery of costs associated with investments
in qualifying infrastructure plant, independent of any
other matters related to the utility's revenue
requirement.
(2) Within 30 days after the effective date of this
amendatory Act of the 98th General Assembly, the Commission
shall adopt emergency rules to implement the provisions of
this amendatory Act of the 98th General Assembly. The
utility may file with the Commission tariffs implementing
the provisions of this amendatory Act of the 98th General
Assembly after the effective date of the emergency rules

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authorized by subsection (i).
(3) The Commission shall issue an order approving, or
approving with modification to ensure compliance with this
Section, the tariff no later than 120 days after such
filing of the tariffs filed pursuant to this Section. The
utility shall have 7 days following the date of service of
the order to notify the Commission in writing whether it
will accept any modifications so identified in the order or
whether it has elected not to proceed with the tariff. If
the order includes no modifications or if the utility
notifies the Commission that it will accept such
modifications, the tariff shall take effect on the first
day of the calendar year in which the Commission issues the
order, subject to petitions for rehearing and appellate
procedures. After the tariff takes effect, the utility may,
upon 10 days' notice to the Commission, file to withdraw
the tariff at any time, and the Commission shall approve
such filing without suspension or hearing, subject to a
final reconciliation as provided in subsection (e) of this
Section.
(4) When a natural gas utility withdraws the surcharge
tariff, the utility shall not recover any additional
charges through the surcharge approved pursuant to this
Section, subject to the resolution of the final
reconciliation pursuant to subsection (e) of this Section.
The utility's qualifying infrastructure investment net of

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accumulated depreciation may be transferred to the natural
gas utility's rate base in the utility's next general rate
case. The utility's delivery base rates in effect upon
withdrawal of the surcharge tariff shall not be adjusted at
the time the surcharge tariff is withdrawn.
(5) A natural gas utility that is subject to its
delivery base rates being fixed at their current rates
pursuant to a Commission order entered in Docket No.
11-0046, notwithstanding the effective date of its tariff
authorized pursuant to this Section, shall reflect in a
tariff surcharge only those projects placed in service
after the fixed rate period of the merger agreement has
expired by its terms.
(b) For purposes of this Section, "qualifying
infrastructure plant" includes only plant additions placed in
service not reflected in the rate base used to establish the
utility's delivery base rates. "Costs associated with
investments in qualifying infrastructure plant" shall include
a return on qualifying infrastructure plant and recovery of
depreciation and amortization expense on qualifying
infrastructure plant, net of the depreciation included in the
utility's base rates on any plant retired in conjunction with
the installation of the qualifying infrastructure plant.
Collectively the "qualifying infrastructure plant" and "costs
associated with investments in qualifying infrastructure
plant" are referred to as the "qualifying infrastructure

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investment" and that are related to one or more of the
following:
(1) the installation of facilities to retire and
replace underground natural gas facilities, including
facilities appurtenant to facilities constructed of those
materials such as meters, regulators, and services, and
that are constructed of cast iron, wrought iron, ductile
iron, unprotected coated steel, unprotected bare steel,
mechanically coupled steel, copper, Cellulose Acetate
Butyrate (CAB) plastic, pre-1973 DuPont Aldyl "A"
polyethylene, PVC, or other types of materials identified
by a State or federal governmental agency as being prone to
leakage;
(2) the relocation of meters from inside customers'
facilities to outside;
(3) the upgrading of the gas distribution system from a
low pressure to a medium pressure system, including
installation of high-pressure facilities to support the
upgrade;
(4) modernization investments by a combination
utility, as defined in subsection (b) of Section 16-108.5
of this Act, to install:
(A) advanced gas meters in connection with the
installation of advanced electric meters pursuant to
Sections 16-108.5 and 16-108.6 of this Act; and
(B) the communications hardware and software and

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associated system software that creates a network
between advanced gas meters and utility business
systems and allows the collection and distribution of
gas-related information to customers and other parties
in addition to providing information to the utility
itself;
(5) replacing high-pressure transmission pipelines and
associated facilities identified as having a higher risk of
leakage or failure or installing or replacing
high-pressure transmission pipelines and associated
facilities to establish records and maximum allowable
operating pressures;
(6) replacing difficult to locate mains and service
pipes and associated facilities; and
(7) replacing or installing transmission and
distribution regulator stations, regulators, valves, and
associated facilities to establish over-pressure
protection.
With respect to the installation of the facilities
identified in paragraph (1) of subsection (b) of this Section,
the natural gas utility shall determine priorities for such
installation with consideration of projects either: (i)
integral to a general government public facilities improvement
program or (ii) ranked in the highest risk categories in the
utility's most recent Distribution Integrity Management Plan
where removal or replacement is the remedial measure.

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(c) Qualifying infrastructure investment, defined in
subsection (b) of this Section, recoverable through a tariff
authorized by subsection (a) of this Section, shall not include
costs or expenses incurred in the ordinary course of business
for the ongoing or routine operations of the utility,
including, but not limited to:
(1) operating and maintenance costs; and
(2) costs of facilities that are revenue-producing,
which means facilities that are constructed or installed
for the purpose of serving new customers.
(d) Gas utility commitments. A natural gas utility that has
in effect a natural gas surcharge tariff pursuant to this
Section shall:
(1) recognize that the General Assembly identifies
improved public safety and reliability of natural gas
facilities as the cornerstone upon which this Section is
designed, and qualifying projects should be encouraged,
selected, and prioritized based on these factors; and
(2) provide information to the Commission as requested
to demonstrate that (i) the projects included in the tariff
are indeed qualifying projects and (ii) the projects are
selected and prioritized taking into account improved
public safety and reliability.
(3) The amount of qualifying infrastructure investment
eligible for recovery under the tariff in the applicable
calendar year is limited to the lesser of (i) the actual

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qualifying infrastructure plant placed in service in the
applicable calendar year and (ii) the difference by which
total plant additions in the applicable calendar year
exceed the baseline amount, and subject to the limitation
in subsection (g) of this Section. A natural gas utility
can recover the costs of qualifying infrastructure
investments through an approved surcharge tariff from the
beginning of each calendar year subject to the
reconciliation initiated under paragraph (2) of subsection
(e) of this Section, during which the Commission may make
adjustments to ensure that the limits defined in this
paragraph are not exceeded. Further, if total plant
additions in a calendar year do not exceed the baseline
amount in the applicable calendar year, the Commission,
during the reconciliation initiated under paragraph (2) of
subsection (e) of this Section for the applicable calendar
year, shall adjust the amount of qualifying infrastructure
investment eligible for recovery under the tariff to zero.
(4) For purposes of this Section, "baseline amount"
means an amount equal to the utility's average of total
depreciation expense, as reported on page 336, column (b)
of the utility's ILCC Form 21, for the calendar years 2006
through 2010.
(e) Review of investment.
(1) The amount of qualifying infrastructure investment
shall be shown on an Information Sheet supplemental to the

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surcharge tariff and filed with the Commission monthly or
some other time period at the option of the utility. The
Information Sheet shall be accompanied by data showing the
calculation of the qualifying infrastructure investment
adjustment. Unless otherwise ordered by the Commission,
each qualifying infrastructure investment adjustment shown
on an Information Sheet shall become effective pursuant to
the utility's approved tariffs.
(2) For each calendar year in which a surcharge tariff
is in effect, the natural gas utility shall file a petition
with the Commission to initiate hearings to reconcile
amounts billed under each surcharge authorized pursuant to
this Section with the actual prudently incurred costs
recoverable under this tariff in the preceding year. The
petition filed by the natural gas utility shall include
testimony and schedules that support the accuracy and the
prudence of the qualifying infrastructure investment for
the calendar year being reconciled. The petition filed
shall also include the number of jobs attributable to the
natural gas surcharge tariff as required by rule. The
review of the utility's investment shall include
identification and review of all plant that was ranked
within the highest risk categories in that utility's most
recent Distribution Integrity Management Plan.
(f) The rate of return applied shall be the overall rate of
return authorized by the Commission in the utility's last gas

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rate case.
(g) The cumulative amount of increases billed under the
surcharge, since the utility's most recent delivery service
rate order, shall not exceed an annual average 4% of the
utility's delivery base rate revenues, but shall not exceed
5.5% in any given year. On the effective date of new delivery
base rates, the surcharge shall be reduced to zero with respect
to qualifying infrastructure investment that is transferred to
the rate base used to establish the utility's delivery base
rates, provided that the utility may continue to charge or
refund any reconciliation adjustment determined pursuant to
subsection (e) of this Section.
(h) If a gas utility obtains a surcharge tariff under this
Section 9-220.3, then it and its affiliates are excused from
the rate case filing requirements contained in Sections
9-220(h) and 9-220(h-1). In the event a natural gas utility,
prior to the effective date of this amendatory Act of the 98th
General Assembly, made a rate case filing that is still pending
on the effective date of this amendatory Act of the 98th
General Assembly, the natural gas utility may, at the time it
files its surcharge tariff with the Commission, also file a
notice with the Commission to withdraw its rate case filing.
Any affiliate of such natural gas utility may also file to
withdraw its rate case filing. Upon receipt of such notice, the
Commission shall dismiss the rate case filing with prejudice
and such tariffs and the record related thereto shall not be

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the subject of any further hearing, investigation, or
proceeding of any kind related to rates for gas delivery
services. Notwithstanding the foregoing, a natural gas utility
shall not be permitted to withdraw a rate case filing for which
a proposed order recommending a rate reduction is pending. A
natural gas utility shall not be permitted to withdraw the gas
delivery services tariffs that are the subject of Commission
Docket Nos. 12-0511/12-0512 (cons.). None of the costs incurred
for the withdrawn rate case are recoverable from ratepayers.
(i) The Commission shall promulgate rules and regulations
to carry out the provisions of this Section under the emergency
rulemaking provisions set forth in Section 5-45 of the Illinois
Administrative Procedure Act, and such emergency rules shall be
effective no later than 30 days after the effective date of
this amendatory Act of the 98th General Assembly.
(i-5) Notwithstanding any other provision of this Section,
this Section applies only to a natural gas utility that, on or
after the effective date of this amendatory Act of the 101st
General Assembly, (i) serves more than 1,000,000 customers or
(ii) is a combination utility as defined in Section 16-108.5.
(i-10) Nothing in this Section prevents the Commission from
issuing an order pursuant to Section 8-503 of this Act.
(j) This Section is repealed December 31, 2023.
(Source: P.A. 98-57, eff. 7-5-13.)
Section 99. Effective date. This Act takes effect upon
becoming law.