Bill Text: IL HB5083 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Public Utilities Act. Provides that a public utility shall demonstrate to the Illinois Commerce Commission that existing customers will not subsidize the cost of new facilities beyond what is provided for in rules and in excess of certain payments by customers for the Commission to approve new construction. Provides that the Commission's order concerning new construction shall explicitly address the economic impact on customers. Requires the Commission to annually report to the General Assembly a gas utility's projects related to a qualifying infrastructure plant, the projected timeline for the replacement of the cast iron and bare and vintage steel in the utility's system, and whether that timeline is adequate to address public safety concerns and reliability. Provides that when a gas public utility connects an applicant to its gas distribution system, certain costs associated with investments in plant additions shall be excluded from a cost-recovery mechanism that allocates the excess cost among existing customers. Requires the Commission to investigate each gas public utility tariff that provides for gas main extensions without additional charge to new customers. Requires the Commission to initiate a rulemaking proceeding providing for rules to establish a uniform method by which a natural gas public utility determines the value of a gas main extension provided to new customers without additional charge.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2019-01-08 - Session Sine Die [HB5083 Detail]

Download: Illinois-2017-HB5083-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB5083 Introduced , by Rep. Thomas Morrison SYNOPSIS AS INTRODUCED:
220 ILCS 5/8-406 from Ch. 111 2/3, par. 8-406
220 ILCS 5/9-220.3
220 ILCS 5/9-228 new
220 ILCS 5/9-235 new
220 ILCS 5/9-237 new
Amends the Public Utilities Act. Provides that a public utility shall demonstrate to the Illinois Commerce Commission that existing customers will not subsidize the cost of new facilities beyond what is provided for in rules and in excess of certain payments by customers for the Commission to approve new construction. Provides that the Commission's order concerning new construction shall explicitly address the economic impact on customers. Requires the Commission to annually report to the General Assembly a gas utility's projects related to a qualifying infrastructure plant, the projected timeline for the replacement of the cast iron and bare and vintage steel in the utility's system, and whether that timeline is adequate to address public safety concerns and reliability. Provides that when a gas public utility connects an applicant to its gas distribution system, certain costs associated with investments in plant additions shall be excluded from a cost-recovery mechanism that allocates the excess cost among existing customers. Requires the Commission to investigate each gas public utility tariff that provides for gas main extensions without additional charge to new customers. Requires the Commission to initiate a rulemaking proceeding providing for rules to establish a uniform method by which a natural gas public utility determines the value of a gas main extension provided to new customers without additional charge.
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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
Sections 8-406 and 9-220.3 and by adding Sections 9-228, 9-235,
and 9-237 as follows:
(220 ILCS 5/8-406) (from Ch. 111 2/3, par. 8-406)
Sec. 8-406. Certificate of public convenience and
necessity.
(a) No public utility not owning any city or village
franchise nor engaged in performing any public service or in
furnishing any product or commodity within this State as of
July 1, 1921 and not possessing a certificate of public
convenience and necessity from the Illinois Commerce
Commission, the State Public Utilities Commission or the Public
Utilities Commission, at the time this amendatory Act of 1985
goes into effect, shall transact any business in this State
until it shall have obtained a certificate from the Commission
that public convenience and necessity require the transaction
of such business.
(b) No public utility shall begin the construction of any
new plant, equipment, property or facility which is not in
substitution of any existing plant, equipment, property or

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facility or any extension or alteration thereof or in addition
thereto, unless and until it shall have obtained from the
Commission a certificate that public convenience and necessity
require such construction. Whenever after a hearing the
Commission determines that any new construction or the
transaction of any business by a public utility will promote
the public convenience and is necessary thereto, it shall have
the power to issue certificates of public convenience and
necessity. The Commission shall determine that proposed
construction will promote the public convenience and necessity
only if the utility demonstrates: (1) that the proposed
construction is necessary to provide adequate, reliable, and
efficient service to its customers and is the least-cost means
of satisfying the service needs of its customers or that the
proposed construction will promote the development of an
effectively competitive electricity market that operates
efficiently, is equitable to all customers, and is the least
cost means of satisfying those objectives; (2) that the utility
is capable of efficiently managing and supervising the
construction process and has taken sufficient action to ensure
adequate and efficient construction and supervision thereof;
and (3) that the utility is capable of financing the proposed
construction without significant adverse financial
consequences for the utility or its customers; and (4) that
existing customers will not subsidize the cost of new
facilities beyond that provided for in rules adopted by the

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Commission and in excess of any refundable or nonrefundable
payments by customers to be served by the new facilities.
(c) After the effective date of this amendatory Act of
1987, no construction shall commence on any new nuclear power
plant to be located within this State, and no certificate of
public convenience and necessity or other authorization shall
be issued therefor by the Commission, until the Director of the
Illinois Environmental Protection Agency finds that the United
States Government, through its authorized agency, has
identified and approved a demonstrable technology or means for
the disposal of high level nuclear waste, or until such
construction has been specifically approved by a statute
enacted by the General Assembly.
As used in this Section, "high level nuclear waste" means
those aqueous wastes resulting from the operation of the first
cycle of the solvent extraction system or equivalent and the
concentrated wastes of the subsequent extraction cycles or
equivalent in a facility for reprocessing irradiated reactor
fuel and shall include spent fuel assemblies prior to fuel
reprocessing.
(d) In making its determination, the Commission shall
attach primary weight to the cost or cost savings to the
customers of the utility. The Commission may consider any or
all factors which will or may affect such cost or cost savings,
including the public utility's engineering judgment regarding
the materials used for construction. The Commission shall

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explicitly address cost and cost savings to customers in its
order. For construction under subsection (b) serving one or
more customers in a discrete group, the Commission shall also
evaluate and explicitly address in its order the period by
which the construction investment will be considered
economical from the customer perspective.
(e) The Commission may issue a temporary certificate which
shall remain in force not to exceed one year in cases of
emergency, to assure maintenance of adequate service or to
serve particular customers, without notice or hearing, pending
the determination of an application for a certificate, and may
by regulation exempt from the requirements of this Section
temporary acts or operations for which the issuance of a
certificate will not be required in the public interest.
A public utility shall not be required to obtain but may
apply for and obtain a certificate of public convenience and
necessity pursuant to this Section with respect to any matter
as to which it has received the authorization or order of the
Commission under the Electric Supplier Act, and any such
authorization or order granted a public utility by the
Commission under that Act shall as between public utilities be
deemed to be, and shall have except as provided in that Act the
same force and effect as, a certificate of public convenience
and necessity issued pursuant to this Section.
No electric cooperative shall be made or shall become a
party to or shall be entitled to be heard or to otherwise

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appear or participate in any proceeding initiated under this
Section for authorization of power plant construction and as to
matters as to which a remedy is available under The Electric
Supplier Act.
(f) Such certificates may be altered or modified by the
Commission, upon its own motion or upon application by the
person or corporation affected. Unless exercised within a
period of 2 years from the grant thereof authority conferred by
a certificate of convenience and necessity issued by the
Commission shall be null and void.
No certificate of public convenience and necessity shall be
construed as granting a monopoly or an exclusive privilege,
immunity or franchise.
(g) A public utility that undertakes any of the actions
described in items (1) through (3) of this subsection (g) or
that has obtained approval pursuant to Section 8-406.1 of this
Act shall not be required to comply with the requirements of
this Section to the extent such requirements otherwise would
apply. For purposes of this Section and Section 8-406.1 of this
Act, "high voltage electric service line" means an electric
line having a design voltage of 100,000 or more. For purposes
of this subsection (g), a public utility may do any of the
following:
(1) replace or upgrade any existing high voltage
electric service line and related facilities,
notwithstanding its length;

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(2) relocate any existing high voltage electric
service line and related facilities, notwithstanding its
length, to accommodate construction or expansion of a
roadway or other transportation infrastructure; or
(3) construct a high voltage electric service line and
related facilities that is constructed solely to serve a
single customer's premises or to provide a generator
interconnection to the public utility's transmission
system and that will pass under or over the premises owned
by the customer or generator to be served or under or over
premises for which the customer or generator has secured
the necessary right of way.
(h) A public utility seeking to construct a high-voltage
electric service line and related facilities (Project) must
show that the utility has held a minimum of 2 pre-filing public
meetings to receive public comment concerning the Project in
each county where the Project is to be located, no earlier than
6 months prior to filing an application for a certificate of
public convenience and necessity from the Commission. Notice of
the public meeting shall be published in a newspaper of general
circulation within the affected county once a week for 3
consecutive weeks, beginning no earlier than one month prior to
the first public meeting. If the Project traverses 2 contiguous
counties and where in one county the transmission line mileage
and number of landowners over whose property the proposed route
traverses is one-fifth or less of the transmission line mileage

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and number of such landowners of the other county, then the
utility may combine the 2 pre-filing meetings in the county
with the greater transmission line mileage and affected
landowners. All other requirements regarding pre-filing
meetings shall apply in both counties. Notice of the public
meeting, including a description of the Project, must be
provided in writing to the clerk of each county where the
Project is to be located. A representative of the Commission
shall be invited to each pre-filing public meeting.
(i) For applications filed after the effective date of this
amendatory Act of the 99th General Assembly, the Commission
shall by registered mail notify each owner of record of land,
as identified in the records of the relevant county tax
assessor, included in the right-of-way over which the utility
seeks in its application to construct a high-voltage electric
line of the time and place scheduled for the initial hearing on
the public utility's application. The utility shall reimburse
the Commission for the cost of the postage and supplies
incurred for mailing the notice.
(Source: P.A. 99-399, eff. 8-18-15.)
(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

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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
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

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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
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.

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(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
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;

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(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
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

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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.
(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:

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(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
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

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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
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

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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
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

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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
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

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effective no later than 30 days after the effective date of
this amendatory Act of the 98th General Assembly.
(i-5) For each natural gas utility with a tariff effective
under this Section in a calendar year, the Commission shall
annually report to the General Assembly the following:
(1) the gas utility's projects described under
subsection (b) of this Section;
(2) the projected timeline for the replacement of the
cast iron and bare and vintage steel in each utility's
system; and
(3) whether that timeline is adequate to address public
safety concerns and the reliability of natural gas
facilities.
The report shall be submitted no later than December 1 for
the prior calendar year. The first report will be due December
1, 2018.
(j) This Section is repealed December 31, 2023.
(Source: P.A. 98-57, eff. 7-5-13.)
(220 ILCS 5/9-228 new)
Sec. 9-228. Consideration of gas main extension costs.
Whenever a gas public utility connects an applicant to its gas
distribution system, any costs associated with investments in
plant addition beyond that provided for in rules adopted by the
Commission and in excess of any refundable payment or
nonrefundable payment by the applicant at the time of

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connection shall be excluded from a cost-recovery mechanism
that allocates the excess cost among existing customers.
(220 ILCS 5/9-235 new)
Sec. 9-235. Tariffed gas main extension provisions. No
later than 60 days after the effective date of this amendatory
Act of the 100th General Assembly, the Commission shall
initiate a docketed investigation reviewing each gas public
utility tariff that provides for gas main extensions without
additional charge to new customers in excess of the default
extensions without charge as specified in 83 Ill. Adm. Code
501. While the primary focus of the investigations shall be to
determine whether existing customers are subsidizing the
connection of new customers to the gas distribution system, the
Commission is not restricted in considering other issues
related to gas main extensions. To the extent that
subsidization by existing customers is occurring beyond that
provided for in rules adopted by the Commission, the Commission
shall appropriately modify or cancel the tariff to eliminate
any future subsidization. If the Commission modifies a gas
utility's gas main extension tariff, the utility shall either
accept or reject the modifications through an appropriate
filing with the Commission within 10 days after the
Commission's order. If the utility rejects the modifications,
the Commission shall cancel the tariff and the Commission's gas
main extension rules in 83 Ill. Adm. Code 501 govern gas main

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extensions for that utility. During the investigation under
this Section, the relevant provisions of the gas utility's gas
main extension tariff shall be suspended and the Commission's
gas main extension rules in 83 Ill. Adm. Code 501 govern until
the conclusion of the investigation.
(220 ILCS 5/9-237 new)
Sec. 9-237. Gas main extension rulemaking. No later than 60
days after the effective date of this amendatory Act of the
100th General Assembly, the Commission shall initiate a
rulemaking proceeding providing for rules to establish a
uniform method by which a natural gas public utility determines
the value of a gas main extension provided to new customers
without additional charge.