Bill Text: IL SR0821 | 2011-2012 | 97th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Expresses serious concerns that the Illinois Commerce Commission Order, entered on May 29, 2012 in Commission Docket No. 11-0721, fails to reflect the statutory directives and the intent of the Illinois General Assembly in Public Acts 97-616 and 97-646.

Sponsorship: Bipartisan Bill

Status: (Passed) 2012-11-29 - Resolution Adopted as Amended 047-004-002 [SR0821 Detail]

Download: Illinois-2011-SR0821-Introduced.html

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SENATE RESOLUTION
WHEREAS, The 97th Illinois General Assembly passed Senate
Bill 1652 and House Bill 3036 with supermajority votes in both
legislative chambers; Senate Bill 1652 became law on October
26, 2011 as Public Act 97-616 and House Bill 3036 became law on
December 30, 2011 as Public Act 97-646; and
WHEREAS, Public Act 97-616, which is commonly referred to
as the Energy Infrastructure Modernization Act, confers
substantial benefits upon the State's electric utility
customers; it established detailed infrastructure investment
plans to modernize and upgrade the State's aging electric grid
in order to ensure the continued provision of safe, reliable,
and affordable service to Illinoisans; participating utilities
that elect to undertake the infrastructure investment plan may
recover their costs through a performance-based formula rate
tariff mechanism, which was designed to increase
predictability, stability, and transparency in the ratemaking
process; and
WHEREAS, Public Act 97-646 was enacted as "trailer
legislation" to Public Act 97-616 with the intent to amend the
Energy Infrastructure Modernization Act to provide additional
benefits to customers; and

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WHEREAS, To make this investment possible, the
performance-based formula rate tariff must, among other
things, establish and set forth certain protocols providing
that participating utilities recover the costs of service and
these investments, including, but not limited to, allowing for
the recovery of an "investment return on pension assets net of
deferred tax benefits equal to the utility's long-term debt
cost of capital as of the end of the applicable calendar year",
which is set forth in subparagraph (D) of paragraph (4) of
subsection (c) of Section 16-108.5 of the Public Utilities Act;
and
WHEREAS, In so providing, the General Assembly did not, and
did not intend to, overturn or generally depart from Illinois
Commerce Commission practice and law regarding the
establishment of these protocols, including the electric
utility's ability to continue to recover a return on its
pension assets as the Commission has previously allowed; and
WHEREAS, No statutory authority was given to the Illinois
Commerce Commission to deny recovery of a return on what is
commonly referred to as, what is reported in the Federal Energy
Regulatory Commission Form 1 (FERC Form 1) as, and what the
General Assembly regarded to be a pension asset; and
WHEREAS, The Energy Infrastructure Modernization Act

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further provides in subsections (c) and (d) of Section 16-108.5
that those amounts to be credited or charged to customers
following the annual reconciliation process under the
performance-based formula rate shall be "with interest" so the
utility will be made whole for unrecovered amounts that were
prudently and reasonably incurred and customers will be made
whole for amounts they overpaid, if any; and
WHEREAS, Such interest is intended to be set at the
utility's weighted average cost of capital, determined in
accordance with the statute, which represents the reasonable
cost and means of financing a utility's investments and
operating costs, so that the utility and customers are made
whole when charges or credits are necessary to reconcile to
actual prudent and reasonable investments and costs; and
WHEREAS, The Energy Infrastructure Modernization Act also
provides that the final year-end cost data filed in FERC Form 1
should generally be used to determine rates; and
WHEREAS, No statutory authority was given to the Illinois
Commerce Commission to set rate base and capital structure
using average numbers that do not represent final year-end
values reflected in the FERC Form 1, and the Illinois Commerce
Commission's use of such average is contrary to the statute;
and

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WHEREAS, The Illinois Supreme and Appellate Courts have
consistently held that, because the administrative agencies
are creatures of statute, administrative agencies possess only
those powers expressly delegated by law and may not act beyond
its statutorily delegated authority; and
WHEREAS, The Illinois Supreme and Appellate Courts have
consistently held that public policy in Illinois is expressed
by the General Assembly, and it is not the province of an
administrative agency to inquire into the wisdom and propriety
of the legislature's act or to substitute its own judgment for
that of the legislature; therefore, be it
RESOLVED, BY THE SENATE OF THE NINETY-SEVENTH GENERAL
ASSEMBLY OF THE STATE OF ILLINOIS, that we express serious
concerns that the Illinois Commerce Commission Order, entered
on May 29, 2012 in Commission Docket No. 11-0721, fails to
reflect the statutory directives and the intent of the Illinois
General Assembly by: (1) not allowing Commonwealth Edison
Company to earn a return on what is commonly referred to as,
identified in the FERC Form 1 as, and what the General Assembly
referred to as a pension asset in subparagraph (D) of paragraph
(4) of subsection (c) of Section 16-108.5; (2) assessing
interest on those amounts to be credited or charged to
customers as set forth in subsection (d) of Section 16-108.5 of

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the Public Utilities Act at an amount that is not based on the
utility's weighted average cost of capital; and (3) determining
rate base and capital structure using an average, rather than
the year-end amounts as reflected in FERC Form 1; and be it
further
RESOLVED, That we urge that the Illinois Commerce
Commission rehear the matter and, upon rehearing, reach a
decision that reflects statutory directives and the intent of
the Illinois General Assembly in passing Public Acts 97-616 and
97-646 as reaffirmed in this resolution; and be it further
RESOLVED, That suitable copies of this resolution be
delivered to the Governor of the State of Illinois and the
Chairman and Commissioners of the Illinois Commerce
Commission.