Bill Text: IL HB4898 | 2017-2018 | 100th General Assembly | Introduced
Bill Title: Amends the Public Utilities Act. Provides that provisions concerning natural gas surcharges do not apply to a natural gas utility in northern Illinois serving less than 1,000,000 customers on and after the effective date of the amendatory Act. Effective May 31, 2018.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Failed) 2019-01-08 - Session Sine Die [HB4898 Detail]
Download: Illinois-2017-HB4898-Introduced.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Public Utilities Act is amended by changing | ||||||||||||||||||||||||
5 | Section 9-220.3 as follows:
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6 | (220 ILCS 5/9-220.3) | ||||||||||||||||||||||||
7 | (Section scheduled to be repealed on December 31, 2023) | ||||||||||||||||||||||||
8 | Sec. 9-220.3. Natural gas surcharges authorized. | ||||||||||||||||||||||||
9 | (a) Tariff. | ||||||||||||||||||||||||
10 | (1) Pursuant to Section 9-201 of this Act, a natural | ||||||||||||||||||||||||
11 | gas utility serving more than 700,000 customers may file a | ||||||||||||||||||||||||
12 | tariff for a surcharge which adjusts rates and charges to | ||||||||||||||||||||||||
13 | provide for recovery of costs associated with investments | ||||||||||||||||||||||||
14 | in qualifying infrastructure plant, independent of any | ||||||||||||||||||||||||
15 | other matters related to the utility's revenue | ||||||||||||||||||||||||
16 | requirement. | ||||||||||||||||||||||||
17 | (2) Within 30 days after the effective date of this | ||||||||||||||||||||||||
18 | amendatory Act of the 98th General Assembly, the Commission | ||||||||||||||||||||||||
19 | shall adopt emergency rules to implement the provisions of | ||||||||||||||||||||||||
20 | this amendatory Act of the 98th General Assembly. The | ||||||||||||||||||||||||
21 | utility may file with the Commission tariffs implementing | ||||||||||||||||||||||||
22 | the provisions of this amendatory Act of the 98th General | ||||||||||||||||||||||||
23 | Assembly after the effective date of the emergency rules |
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1 | authorized by subsection (i). | ||||||
2 | (3) The Commission shall issue an order approving, or | ||||||
3 | approving with modification to ensure compliance with this | ||||||
4 | Section, the tariff no later than 120 days after such | ||||||
5 | filing of the tariffs filed pursuant to this Section. The | ||||||
6 | utility shall have 7 days following the date of service of | ||||||
7 | the order to notify the Commission in writing whether it | ||||||
8 | will accept any modifications so identified in the order or | ||||||
9 | whether it has elected not to proceed with the tariff. If | ||||||
10 | the order includes no modifications or if the utility | ||||||
11 | notifies the Commission that it will accept such | ||||||
12 | modifications, the tariff shall take effect on the first | ||||||
13 | day of the calendar year in which the Commission issues the | ||||||
14 | order, subject to petitions for rehearing and appellate | ||||||
15 | procedures. After the tariff takes effect, the utility may, | ||||||
16 | upon 10 days' notice to the Commission, file to withdraw | ||||||
17 | the tariff at any time, and the Commission shall approve | ||||||
18 | such filing without suspension or hearing, subject to a | ||||||
19 | final reconciliation as provided in subsection (e) of this | ||||||
20 | Section. | ||||||
21 | (4) When a natural gas utility withdraws the surcharge | ||||||
22 | tariff, the utility shall not recover any additional | ||||||
23 | charges through the surcharge approved pursuant to this | ||||||
24 | Section, subject to the resolution of the final | ||||||
25 | reconciliation pursuant to subsection (e) of this Section. | ||||||
26 | The utility's qualifying infrastructure investment net of |
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1 | accumulated depreciation may be transferred to the natural | ||||||
2 | gas utility's rate base in the utility's next general rate | ||||||
3 | case. The utility's delivery base rates in effect upon | ||||||
4 | withdrawal of the surcharge tariff shall not be adjusted at | ||||||
5 | the time the surcharge tariff is withdrawn. | ||||||
6 | (5) A natural gas utility that is subject to its | ||||||
7 | delivery base rates being fixed at their current rates | ||||||
8 | pursuant to a Commission order entered in Docket No. | ||||||
9 | 11-0046, notwithstanding the effective date of its tariff | ||||||
10 | authorized pursuant to this Section, shall reflect in a | ||||||
11 | tariff surcharge only those projects placed in service | ||||||
12 | after the fixed rate period of the merger agreement has | ||||||
13 | expired by its terms. | ||||||
14 | (b) For purposes of this Section, "qualifying | ||||||
15 | infrastructure plant" includes only plant additions placed in | ||||||
16 | service not reflected in the rate base used to establish the | ||||||
17 | utility's delivery base rates. "Costs associated with | ||||||
18 | investments in qualifying infrastructure plant" shall include | ||||||
19 | a return on qualifying infrastructure plant and recovery of | ||||||
20 | depreciation and amortization expense on qualifying | ||||||
21 | infrastructure plant, net of the depreciation included in the | ||||||
22 | utility's base rates on any plant retired in conjunction with | ||||||
23 | the installation of the qualifying infrastructure plant. | ||||||
24 | Collectively the "qualifying infrastructure plant" and "costs | ||||||
25 | associated with investments in qualifying infrastructure | ||||||
26 | plant" are referred to as the "qualifying infrastructure |
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1 | investment" and that are related to one or more of the | ||||||
2 | following: | ||||||
3 | (1) the installation of facilities to retire and | ||||||
4 | replace underground natural gas facilities, including | ||||||
5 | facilities appurtenant to facilities constructed of those | ||||||
6 | materials such as meters, regulators, and services, and | ||||||
7 | that are constructed of cast iron, wrought iron, ductile | ||||||
8 | iron, unprotected coated steel, unprotected bare steel, | ||||||
9 | mechanically coupled steel, copper, Cellulose Acetate | ||||||
10 | Butyrate (CAB) plastic, pre-1973 DuPont Aldyl "A" | ||||||
11 | polyethylene, PVC, or other types of materials identified | ||||||
12 | by a State or federal governmental agency as being prone to | ||||||
13 | leakage; | ||||||
14 | (2) the relocation of meters from inside customers' | ||||||
15 | facilities to outside; | ||||||
16 | (3) the upgrading of the gas distribution system from a | ||||||
17 | low pressure to a medium pressure system, including | ||||||
18 | installation of high-pressure facilities to support the | ||||||
19 | upgrade; | ||||||
20 | (4) modernization investments by a combination | ||||||
21 | utility, as defined in subsection (b) of Section 16-108.5 | ||||||
22 | of this Act, to install: | ||||||
23 | (A) advanced gas meters in connection with the | ||||||
24 | installation of advanced electric meters pursuant to | ||||||
25 | Sections 16-108.5 and 16-108.6 of this Act; and | ||||||
26 | (B) the communications hardware and software and |
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1 | associated system software that creates a network | ||||||
2 | between advanced gas meters and utility business | ||||||
3 | systems and allows the collection and distribution of | ||||||
4 | gas-related information to customers and other parties | ||||||
5 | in addition to providing information to the utility | ||||||
6 | itself; | ||||||
7 | (5) replacing high-pressure transmission pipelines and | ||||||
8 | associated facilities identified as having a higher risk of | ||||||
9 | leakage or failure or installing or replacing | ||||||
10 | high-pressure transmission pipelines and associated | ||||||
11 | facilities to establish records and maximum allowable | ||||||
12 | operating pressures; | ||||||
13 | (6) replacing difficult to locate mains and service | ||||||
14 | pipes and associated facilities; and | ||||||
15 | (7) replacing or installing transmission and | ||||||
16 | distribution regulator stations, regulators, valves, and | ||||||
17 | associated facilities to establish over-pressure | ||||||
18 | protection. | ||||||
19 | With respect to the installation of the facilities | ||||||
20 | identified in paragraph (1) of subsection (b) of this Section, | ||||||
21 | the natural gas utility shall determine priorities for such | ||||||
22 | installation with consideration of projects either: (i) | ||||||
23 | integral to a general government public facilities improvement | ||||||
24 | program or (ii) ranked in the highest risk categories in the | ||||||
25 | utility's most recent Distribution Integrity Management Plan | ||||||
26 | where removal or replacement is the remedial measure. |
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1 | (c) Qualifying infrastructure investment, defined in | ||||||
2 | subsection (b) of this Section, recoverable through a tariff | ||||||
3 | authorized by subsection (a) of this Section, shall not include | ||||||
4 | costs or expenses incurred in the ordinary course of business | ||||||
5 | for the ongoing or routine operations of the utility, | ||||||
6 | including, but not limited to: | ||||||
7 | (1) operating and maintenance costs; and | ||||||
8 | (2) costs of facilities that are revenue-producing, | ||||||
9 | which means facilities that are constructed or installed | ||||||
10 | for the purpose of serving new customers. | ||||||
11 | (d) Gas utility commitments. A natural gas utility that has | ||||||
12 | in effect a natural gas surcharge tariff pursuant to this | ||||||
13 | Section shall: | ||||||
14 | (1) recognize that the General Assembly identifies | ||||||
15 | improved public safety and reliability of natural gas | ||||||
16 | facilities as the cornerstone upon which this Section is | ||||||
17 | designed, and qualifying projects should be encouraged, | ||||||
18 | selected, and prioritized based on these factors; and | ||||||
19 | (2) provide information to the Commission as requested | ||||||
20 | to demonstrate that (i) the projects included in the tariff | ||||||
21 | are indeed qualifying projects and (ii) the projects are | ||||||
22 | selected and prioritized taking into account improved | ||||||
23 | public safety and reliability. | ||||||
24 | (3) The amount of qualifying infrastructure investment | ||||||
25 | eligible for recovery under the tariff in the applicable | ||||||
26 | calendar year is limited to the lesser of (i) the actual |
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1 | qualifying infrastructure plant placed in service in the | ||||||
2 | applicable calendar year and (ii) the difference by which | ||||||
3 | total plant additions in the applicable calendar year | ||||||
4 | exceed the baseline amount, and subject to the limitation | ||||||
5 | in subsection (g) of this Section. A natural gas utility | ||||||
6 | can recover the costs of qualifying infrastructure | ||||||
7 | investments through an approved surcharge tariff from the | ||||||
8 | beginning of each calendar year subject to the | ||||||
9 | reconciliation initiated under paragraph (2) of subsection | ||||||
10 | (e) of this Section, during which the Commission may make | ||||||
11 | adjustments to ensure that the limits defined in this | ||||||
12 | paragraph are not exceeded. Further, if total plant | ||||||
13 | additions in a calendar year do not exceed the baseline | ||||||
14 | amount in the applicable calendar year, the Commission, | ||||||
15 | during the reconciliation initiated under paragraph (2) of | ||||||
16 | subsection (e) of this Section for the applicable calendar | ||||||
17 | year, shall adjust the amount of qualifying infrastructure | ||||||
18 | investment eligible for recovery under the tariff to zero. | ||||||
19 | (4) For purposes of this Section, "baseline amount" | ||||||
20 | means an amount equal to the utility's average of total | ||||||
21 | depreciation expense, as reported on page 336, column (b) | ||||||
22 | of the utility's ILCC Form 21, for the calendar years 2006 | ||||||
23 | through 2010. | ||||||
24 | (e) Review of investment. | ||||||
25 | (1) The amount of qualifying infrastructure investment | ||||||
26 | shall be shown on an Information Sheet supplemental to the |
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1 | surcharge tariff and filed with the Commission monthly or | ||||||
2 | some other time period at the option of the utility. The | ||||||
3 | Information Sheet shall be accompanied by data showing the | ||||||
4 | calculation of the qualifying infrastructure investment | ||||||
5 | adjustment. Unless otherwise ordered by the Commission, | ||||||
6 | each qualifying infrastructure investment adjustment shown | ||||||
7 | on an Information Sheet shall become effective pursuant to | ||||||
8 | the utility's approved tariffs. | ||||||
9 | (2) For each calendar year in which a surcharge tariff | ||||||
10 | is in effect, the natural gas utility shall file a petition | ||||||
11 | with the Commission to initiate hearings to reconcile | ||||||
12 | amounts billed under each surcharge authorized pursuant to | ||||||
13 | this Section with the actual prudently incurred costs | ||||||
14 | recoverable under this tariff in the preceding year. The | ||||||
15 | petition filed by the natural gas utility shall include | ||||||
16 | testimony and schedules that support the accuracy and the | ||||||
17 | prudence of the qualifying infrastructure investment for | ||||||
18 | the calendar year being reconciled. The petition filed | ||||||
19 | shall also include the number of jobs attributable to the | ||||||
20 | natural gas surcharge tariff as required by rule. The | ||||||
21 | review of the utility's investment shall include | ||||||
22 | identification and review of all plant that was ranked | ||||||
23 | within the highest risk categories in that utility's most | ||||||
24 | recent Distribution Integrity Management Plan. | ||||||
25 | (f) The rate of return applied shall be the overall rate of | ||||||
26 | return authorized by the Commission in the utility's last gas |
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1 | rate case. | ||||||
2 | (g) The cumulative amount of increases billed under the | ||||||
3 | surcharge, since the utility's most recent delivery service | ||||||
4 | rate order, shall not exceed an annual average 4% of the | ||||||
5 | utility's delivery base rate revenues, but shall not exceed | ||||||
6 | 5.5% in any given year. On the effective date of new delivery | ||||||
7 | base rates, the surcharge shall be reduced to zero with respect | ||||||
8 | to qualifying infrastructure investment that is transferred to | ||||||
9 | the rate base used to establish the utility's delivery base | ||||||
10 | rates, provided that the utility may continue to charge or | ||||||
11 | refund any reconciliation adjustment determined pursuant to | ||||||
12 | subsection (e) of this Section. | ||||||
13 | (h) If a gas utility obtains a surcharge tariff under this | ||||||
14 | Section 9-220.3, then it and its affiliates are excused from | ||||||
15 | the rate case filing requirements contained in Sections | ||||||
16 | 9-220(h) and 9-220(h-1). In the event a natural gas utility, | ||||||
17 | prior to the effective date of this amendatory Act of the 98th | ||||||
18 | General Assembly, made a rate case filing that is still pending | ||||||
19 | on the effective date of this amendatory Act of the 98th | ||||||
20 | General Assembly, the natural gas utility may, at the time it | ||||||
21 | files its surcharge tariff with the Commission, also file a | ||||||
22 | notice with the Commission to withdraw its rate case filing. | ||||||
23 | Any affiliate of such natural gas utility may also file to | ||||||
24 | withdraw its rate case filing. Upon receipt of such notice, the | ||||||
25 | Commission shall dismiss the rate case filing with prejudice | ||||||
26 | and such tariffs and the record related thereto shall not be |
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1 | the subject of any further hearing, investigation, or | ||||||
2 | proceeding of any kind related to rates for gas delivery | ||||||
3 | services. Notwithstanding the foregoing, a natural gas utility | ||||||
4 | shall not be permitted to withdraw a rate case filing for which | ||||||
5 | a proposed order recommending a rate reduction is pending. A | ||||||
6 | natural gas utility shall not be permitted to withdraw the gas | ||||||
7 | delivery services tariffs that are the subject of Commission | ||||||
8 | Docket Nos. 12-0511/12-0512 (cons.). None of the costs incurred | ||||||
9 | for the withdrawn rate case are recoverable from ratepayers. | ||||||
10 | (i) The Commission shall promulgate rules and regulations | ||||||
11 | to carry out the provisions of this Section under the emergency | ||||||
12 | rulemaking provisions set forth in Section 5-45 of the Illinois | ||||||
13 | Administrative Procedure Act, and such emergency rules shall be | ||||||
14 | effective no later than 30 days after the effective date of | ||||||
15 | this amendatory Act of the 98th General Assembly. | ||||||
16 | (i-5) This Section does not apply to a natural gas utility | ||||||
17 | in northern Illinois serving less than 1,000,000 customers on | ||||||
18 | and after the effective date of this amendatory Act of the | ||||||
19 | 100th General Assembly. | ||||||
20 | (j) This Section is repealed December 31, 2023.
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21 | (Source: P.A. 98-57, eff. 7-5-13.)
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22 | Section 99. Effective date. This Act takes effect on May | ||||||
23 | 31, 2018.
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