90HB0362enr1220 ILCS 5/4-201 from Ch. 111 2/3, par. 4-201 Amends the Public Utilities Act. Adds a caption to a Section concerning the enforcement of laws affecting public utilities. LRB9002496JScc1HB0362 Enrolled LRB9002496JScc 1 AN ACT in relation to the competitive provision of 2 utility services, amending named Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5ARTICLE I 6 Section 5. The Public Utilities Act is amended by adding 7 Articles XVI, XVII, and XVIII as follows: 8 (220 ILCS 5/Art. XVI heading new) 9 ARTICLE XVI. ELECTRIC SERVICE CUSTOMER CHOICE AND RATE 10 RELIEF LAW OF 1997 11 (220 ILCS 5/16-101 new) 12 Sec. 16-101. Short title and applicability. 13 (a) This Article may be cited as the Electric Service 14 Customer Choice and Rate Relief Law of 1997 and shall apply 15 to electric utilities and alternative retail electric 16 suppliers as defined in this Article. Except to the extent 17 modified or supplemented by the provisions of this Article, 18 or where the context clearly renders such provisions 19 inapplicable, the other Articles of the Public Utilities Act 20 pertaining to public utilities, public utility rates and 21 services and the regulation thereof, are fully and equally 22 applicable to the tariffed services electric utilities 23 provide. 24 (b) The provisions of subsections (a) through (h) of 25 Section 16-111 of this Act shall not be applicable to any 26 electric utility which elects to file biennial rate 27 proceedings before the Commission in the years 1998, 2000 and 28 2002. An electric utility electing this option shall do so 29 by filing a notice of such election with the Commission 1HB0362 Enrolled -2- LRB9002496JScc 1 within 60 days after the effective date of this amendatory 2 Act of 1997, or its right to make such election shall be 3 irrevocably waived. An electric utility electing the option 4 specified in this paragraph shall file its rate proceeding 5 with the Commission no later than August 1 of the years 1998, 6 2000, and 2002. The electric utility's filing shall comply 7 with all requirements of 83 Illinois Administrative Code 8 Parts 255 and 285 as though the electric utility were filing 9 for an increase in its rates, without regard to whether such 10 filing would produce an increase, a decrease or no change in 11 the electric utility's rates and the Commission shall review 12 the electric utility's filing and shall issue its order in 13 accordance with the provisions of Section 9-201 of this Act. 14 (220 ILCS 5/16-101A new) 15 Sec. 16-101A. Legislative findings. 16 (a) The citizens and businesses of the State of Illinois 17 have been well-served by a comprehensive electrical utility 18 system which has provided safe, reliable, and affordable 19 service. The electrical utility system in the State of 20 Illinois has historically been subject to State and federal 21 regulation, aimed at assuring the citizens and businesses of 22 the State of safe, reliable, and affordable service, while at 23 the same time assuring the utility system of a return on its 24 investment. 25 (b) Competitive forces are affecting the market for 26 electricity as a result of recent federal regulatory and 27 statutory changes and the activities of other states. 28 Competition in the electric services market may create 29 opportunities for new products and services for customers and 30 lower costs for users of electricity. Long-standing 31 regulatory relationships need to be altered to accommodate 32 the competition that could fundamentally alter the structure 33 of the electric services market.1HB0362 Enrolled -3- LRB9002496JScc 1 (c) With the advent of increasing competition in this 2 industry, the State has a continued interest in assuring that 3 the safety, reliability, and affordability of electrical 4 power is not sacrificed to competitive pressures, and to that 5 end, intends to implement safeguards to assure that the 6 industry continues to operate the electrical system in a 7 manner that will serve the public's interest. Under the 8 existing regulatory framework, the industry has been 9 encouraged to undertake certain investments in its physical 10 plant and personnel to enhance its efficient operation, the 11 cost of which it has been permitted to pass on to consumers. 12 The State has an interest in providing the existing utilities 13 a reasonable opportunity to obtain a return on certain 14 investments on which they depended in undertaking those 15 commitments in the first instance while, at the same time, 16 not permitting new entrants into the industry to take 17 unreasonable advantage of the investments made by the 18 formerly regulated industry. 19 (d) A competitive wholesale and retail market must 20 benefit all Illinois citizens. The Illinois Commerce 21 Commission should act to promote the development of an 22 effectively competitive electricity market that operates 23 efficiently and is equitable to all consumers. Consumer 24 protections must be in place to ensure that all customers 25 continue to receive safe, reliable, affordable, and 26 environmentally safe electric service. 27 (e) All consumers must benefit in an equitable and 28 timely fashion from the lower costs for electricity that 29 result from retail and wholesale competition and receive 30 sufficient information to make informed choices among 31 suppliers and services. The use of renewable resources and 32 energy efficiency resources should be encouraged in 33 competitive markets.1HB0362 Enrolled -4- LRB9002496JScc 1 (220 ILCS 5/16-102 new) 2 Sec. 16-102. Definitions. For the purposes of this 3 Article the following terms shall be defined as set forth in 4 this Section. 5 "Alternative retail electric supplier" means every 6 person, cooperative, corporation, municipal corporation, 7 company, association, joint stock company or association, 8 firm, partnership, individual, or other entity, their 9 lessees, trustees, or receivers appointed by any court 10 whatsoever, that offers electric power or energy for sale, 11 lease or in exchange for other value received to one or more 12 retail customers, or that engages in the delivery or 13 furnishing of electric power or energy to such retail 14 customers, and shall include, without limitation, resellers, 15 aggregators and power marketers, but shall not include (i) 16 electric utilities (or any agent of the electric utility to 17 the extent the electric utility provides tariffed services to 18 retail customers through that agent), (ii) any electric 19 cooperative or municipal system as defined in Section 17-100 20 to the extent that the electric cooperative or municipal 21 system is serving retail customers within any area in which 22 it is or would be entitled to provide service under the law 23 in effect immediately prior to the effective date of this 24 amendatory Act of 1997, (iii) a public utility that is owned 25 and operated by any public institution of higher education of 26 this State, or a public utility that is owned by such public 27 institution of higher education and operated by any of its 28 lessees or operating agents, within any area in which it is 29 or would be entitled to provide service under the law in 30 effect immediately prior to the effective date of this 31 amendatory Act of 1997, (iv) any retail customer to the 32 extent that customer obtains its electric power and energy 33 from its own cogeneration or self-generation facilities, (v) 34 any entity that sells or arranges for the installation of 1HB0362 Enrolled -5- LRB9002496JScc 1 cogeneration or self-generation facilities to be owned by a 2 retail customer described in subparagraph (iv), but only to 3 the extent the entity is engaged in selling or arranging for 4 such installation, or (vi) an industrial or manufacturing 5 customer that owns its own distribution facilities, to the 6 extent that the customer provides service from that 7 distribution system to a third-party contractor located on 8 the customer's premises that is integrally and predominantly 9 engaged in the customer's industrial or manufacturing 10 process; provided, that if the industrial or manufacturing 11 customer has elected delivery services, the customer shall 12 pay transition charges applicable to the electric power and 13 energy consumed by the third-party contractor unless such 14 charges are otherwise paid by the third party contractor, 15 which shall be calculated based on the usage of, and the base 16 rates or the contract rates applicable to, the third-party 17 contractor in accordance with Section 16-102. 18 "Base rates" means the rates for those tariffed services 19 that the electric utility is required to offer pursuant to 20 subsection (a) of Section 16-103 and that were identified in 21 a rate order for collection of the electric utility's base 22 rate revenue requirement, excluding (i) separate automatic 23 rate adjustment riders then in effect, (ii) special or 24 negotiated contract rates, (iii) delivery services tariffs 25 filed pursuant to Section 16-108, (iv) real-time pricing, or 26 (v) tariffs that were in effect prior to October 1, 1996 and 27 that based charges for services on an index or average of 28 other utilities' charges, but including (vi) any subsequent 29 redesign of such rates for tariffed services that is 30 authorized by the Commission after notice and hearing. 31 "Competitive service" includes (i) any service that has 32 been declared to be competitive pursuant to Section 16-113 of 33 this Act, (ii) contract service, and (iii) services, other 34 than tariffed services, that are related to, but not 1HB0362 Enrolled -6- LRB9002496JScc 1 necessary for, the provision of electric power and energy or 2 delivery services. 3 "Contract service" means (1) services, including the 4 provision of electric power and energy or other services, 5 that are provided by mutual agreement between an electric 6 utility and a retail customer that is located in the electric 7 utility's service area, provided that, delivery services 8 shall not be a contract service until such services are 9 declared competitive pursuant to Section 16-113; and also 10 means (2) the provision of electric power and energy by an 11 electric utility to retail customers outside the electric 12 utility's service area pursuant to Section 16-116. Provided, 13 however, contract service does not include electric utility 14 services provided pursuant to (i) contracts that retail 15 customers are required to execute as a condition of receiving 16 tariffed services, or (ii) special or negotiated rate 17 contracts for electric utility services that were entered 18 into between an electric utility and a retail customer prior 19 to the effective date of this amendatory Act of 1997 and 20 filed with the Commission. 21 "Delivery services" means those services provided by the 22 electric utility that are necessary in order for the 23 transmission and distribution systems to function so that 24 retail customers located in the electric utility's service 25 area can receive electric power and energy from suppliers 26 other than the electric utility, and shall include, without 27 limitation, standard metering and billing services. 28 "Electric utility" means a public utility, as defined in 29 Section 3-105 of this Act, that has a franchise, license, 30 permit or right to furnish or sell electricity to retail 31 customers within a service area. 32 "Mandatory transition period" means the period from the 33 effective date of this amendatory Act of 1997 through January 34 1, 2005. 1HB0362 Enrolled -7- LRB9002496JScc 1 "Municipal system" shall have the meaning set forth in 2 Section 17-100. 3 "Real-time pricing" means charges for delivered electric 4 power and energy that vary on an hour-to-hour basis for 5 nonresidential retail customers and that vary on a periodic 6 basis during the day for residential retail customers. 7 "Retail customer" means a single entity using electric 8 power or energy at a single premises and that (A) either (i) 9 is receiving or is eligible to receive tariffed services from 10 an electric utility, or (ii) that is served by a municipal 11 system or electric cooperative within any area in which the 12 municipal system or electric cooperative is or would be 13 entitled to provide service under the law in effect 14 immediately prior to the effective date of this amendatory 15 Act of 1997, or (B) an entity which on the effective date of 16 this Act was receiving electric service from a public utility 17 and (i) was engaged in the practice of resale and 18 redistribution of such electricity within a building prior to 19 January 2, 1957, or (ii) was providing lighting services to 20 tenants in a multi-occupancy building, but only to the extent 21 such resale, redistribution or lighting service is authorized 22 by the electric utility's tariffs that were on file with the 23 Commission on the effective date of this Act. 24 "Service area" means (i) the geographic area within which 25 an electric utility was lawfully entitled to provide electric 26 power and energy to retail customers as of the effective date 27 of this amendatory Act of 1997, and includes (ii) the 28 location of any retail customer to which the electric utility 29 was lawfully providing electric utility services on such 30 effective date. 31 "Small commercial retail customer" means those 32 nonresidential retail customers of an electric utility 33 consuming 15,000 kilowatt-hours or less of electricity 34 annually in its service area. 1HB0362 Enrolled -8- LRB9002496JScc 1 "Tariffed service" means services provided to retail 2 customers by an electric utility as defined by its rates on 3 file with the Commission pursuant to the provisions of 4 Article IX of this Act, but shall not include competitive 5 services. 6 "Transition charge" means a charge expressed in cents per 7 kilowatt-hour that is calculated for a customer or class of 8 customers as follows for each year in which an electric 9 utility is entitled to recover transition charges as provided 10 in Section 16-108: 11 (1) the amount of revenue that an electric utility 12 would receive from the retail customer or customers if it 13 were serving such customers' electric power and energy 14 requirements as a tariffed service based on (A) all of 15 the customers' actual usage during the 3 years ending 90 16 days prior to the date on which such customers were first 17 eligible for delivery services pursuant to Section 18 16-104, and (B) on (i) the base rates in effect on 19 October 1, 1996 (adjusted for the reductions required by 20 subsection (b) of Section 16-111, for any reduction 21 resulting from a rate decrease under Section 16-101(b), 22 for any restatement of base rates made in conjunction 23 with an elimination of the fuel adjustment clause 24 pursuant to subsection (b), (d), or (f) of Section 9-220 25 and for any removal of decommissioning costs from base 26 rates pursuant to Section 16-114) and any separate 27 automatic rate adjustment riders (other than a 28 decommissioning rate as defined in Section 16-114) under 29 which the customers were receiving or, had they been 30 customers, would have received electric power and energy 31 from the electric utility during the year immediately 32 preceding the date on which such customers were first 33 eligible for delivery service pursuant to Section 16-104, 34 or (ii) to the extent applicable, any contract rates, 1HB0362 Enrolled -9- LRB9002496JScc 1 including contracts or rates for consolidated or 2 aggregated billing, under which such customers were 3 receiving electric power and energy from the electric 4 utility during such year; 5 (2) less the amount of revenue, other than revenue 6 from transition charges and decommissioning rates, that 7 the electric utility would receive from such retail 8 customers for delivery services provided by the electric 9 utility, assuming such customers were taking delivery 10 services for all of their usage, based on the delivery 11 services tariffs in effect during the year for which the 12 transition charge is being calculated and on the usage 13 identified in paragraph (1); 14 (3) less the market value for the electric power 15 and energy that the electric utility would have used to 16 supply all of such customers' electric power and energy 17 requirements, as a tariffed service, based on the usage 18 identified in paragraph (1), with such market value 19 determined in accordance with Section 16-112 of this Act; 20 (4) less the following amount which represents the 21 amount to be attributed to new revenue sources and cost 22 reductions by the electric utility through the end of the 23 period for which transition costs are recovered pursuant 24 to Section 16-108, referred to in this Article XVI as a 25 "mitigation factor": 26(A) for nonresidential retail customers, an 27 amount equal to the greater of (i) 0.5 cents per 28 kilowatt-hour during the period October 1, 1999 29 through December 31, 2004, 0.6 cents per 30 kilowatt-hour in calendar year 2005, and 0.9 cents 31 per kilowatt-hour in calendar year 2006, multiplied 32 in each year by the usage identified in paragraph 33 (1), or (ii) an amount equal to the following 34 percentages of the amount produced by applying the 1HB0362 Enrolled -10- LRB9002496JScc 1 applicable base rates (adjusted as described in 2 subparagraph (1)(B)) or contract rate to the usage 3 identified in paragraph (1): 8% for the period 4 October 1, 1999 through December 31, 2002, 10% in 5 calendar years 2003 and 2004, 11% in calendar year 6 2005 and 12% in calendar year 2006; and 7(B) for residential retail customers, an 8 amount equal to the following percentages of the 9 amount produced by applying the base rates in effect 10 on October 1, 1996 (adjusted as described in 11 subparagraph (1)(B)) to the usage identified in 12 paragraph (1): (i) 6% from May 1, 2002 through 13 December 31, 2002, (ii) 7% in calendar years 2003 14 and 2004, (iii) 8% in calendar year 2005, and (iv) 15 10% in calendar year 2006; 16 (5) divided by the usage of such customers 17 identified in paragraph (1), 18 provided that the transition charge shall never be less than 19 zero. 20 "Unbundled service" means a component or constituent part 21 of a tariffed service which the electric utility subsequently 22 offers separately to its customers. 23 (220 ILCS 5/16-103 new) 24 Sec. 16-103. Service obligations of electric utilities. 25 (a) An electric utility shall continue offering to 26 retail customers each tariffed service that it offered as a 27 distinct and identifiable service on the effective date of 28 this amendatory Act of 1997 until the service is (i) 29 declared competitive pursuant to Section 16-113, or (ii) 30 abandoned pursuant to Section 8-508. Nothing in this 31 subsection shall be construed as limiting an electric 32 utility's right to propose, or the Commission's power to 33 approve, allow or order modifications in the rates, terms and 1HB0362 Enrolled -11- LRB9002496JScc 1 conditions for such services pursuant to Article IX or 2 Section 16-111 of this Act. 3 (b) An electric utility shall also offer, as tariffed 4 services, delivery services in accordance with this Article, 5 the power purchase options described in Section 16-110 and 6 real-time pricing as provided in Section 16-107. 7 (c) Notwithstanding any other provision of this Article, 8 each electric utility shall continue offering to all 9 residential customers and to all small commercial retail 10 customers in its service area, as a tariffed service, bundled 11 electric power and energy delivered to the customer's 12 premises consistent with the bundled utility service provided 13 by the electric utility on the effective date of this 14 amendatory Act of 1997. Upon declaration of the provision of 15 electric power and energy as competitive, the electric 16 utility shall continue to offer to such customers, as a 17 tariffed service, bundled service options at rates which 18 reflect recovery of all cost components for providing the 19 service. For those components of the service which have been 20 declared competitive, cost shall be the market based prices. 21 Market based prices as referred to herein shall mean, for 22 electric power and energy, either (i) those prices for 23 electric power and energy determined as provided in Section 24 16-112, or (ii) the electric utility's cost of obtaining the 25 electric power and energy at wholesale through a competitive 26 bidding or other arms-length acquisition process. 27 (d) Any residential or small commercial retail customer 28 which elects delivery services is entitled to return to the 29 electric utility's bundled utility tariffed service offering 30 provided in accordance with subsection (c) of this Section 31 upon payment of a reasonable administrative fee which shall 32 be set forth in the tariff, provided, however, that the 33 electric utility shall be entitled to impose the condition 34 that such customer may not elect delivery services for up to 1HB0362 Enrolled -12- LRB9002496JScc 1 24 months thereafter. 2 (e) The Commission shall not require an electric utility 3 to offer any tariffed service other than the services 4 required by this Section, and shall not require an electric 5 utility to offer any competitive service. 6 (220 ILCS 5/16-104 new) 7 Sec. 16-104. Delivery services transition plan. An 8 electric utility shall provide delivery services to retail 9 customers in accordance with the provisions of this Section. 10 (a) Each electric utility shall offer delivery services 10 to retail customers located in its service area in accordance 11 with the following provisions: 12 (1) On or before October 1, 1999, the electric 14 utility shall offer delivery services (i) to any 15 non-residential retail customer whose average monthly 16 maximum electrical demand on the electric utility's 17 system during the 6 months with the customer's highest 18 monthly maximum demands in the 12 months ending June 30, 19 1999 equals or exceeds 4 megawatts; (ii) to any 20 non-governmental, non-residential, commercial retail 21 customers under common ownership doing business at 10 or 22 more separate locations within the electric utility's 23 service area, if the aggregate coincident average monthly 24 maximum electrical demand of all such locations during 25 the 6 months with the customer's highest monthly maximum 26 electrical demands during the 12 months ending June 30, 27 1999 equals or exceeds 9.5 megawatts, provided, however, 28 that an electric utility's obligation to offer delivery 29 services under this clause (ii) shall not exceed 3.5% of 30 the maximum electric demand on the electric utility's 31 system in the 12 months ending June 30, 1999; and (iii) 32 to non-residential retail customers whose annual electric 33 energy use comprises 33% of the kilowatt-hour sales, 1HB0362 Enrolled -13- LRB9002496JScc 1 excluding the kilowatt-hour sales to customers described 2 in clauses (i) and (ii), to each non-residential retail 3 customer class of the electric utility. 4 (2) On or before October 1, 2000, the electric 5 utility shall offer delivery services to the eligible 6 governmental customers described in subsections (a) and 7 (b) of Section 16-125A if the aggregate coincident 8 average monthly maximum electrical demand of such 9 customers during the 6 months with the customers' highest 10 monthly maximum electrical demands during the 12 months 11 ending June 30, 2000 equals or exceeds 9.5 megawatts. 12 (3) On or before December 31, 2000, the electric 13 utility shall offer delivery services to all remaining 14 nonresidential retail customers in its service area. 15 (4) On or before May 1, 2002, the electric utility 16 shall offer delivery services to all residential retail 17 customers in its service area. 18 The loads and kilowatt-hour sales used for purposes of 19 this subsection shall be those for the 12 months ending June 20 30, 1999 for nonresidential retail customers. The electric 21 utility shall identify those customers to be offered delivery 22 service pursuant to clause (1)(iii) pursuant to a lottery or 23 other random nondiscriminatory selection process set forth in 23 the electric utility's delivery services implementation plan 24 pursuant to Section 16-105. Provided, that non-residential 26 retail customers under common ownership at separate locations 27 within the electric utility's service area may elect, prior 28 to the date the electric utility conducts the lottery or 29 other random selection process for purposes of clause 30 (1)(iii), to designate themselves as a common ownership 31 group, to be excluded from such lottery and to instead 32 participate in a separate lottery for such common ownership 33 group pursuant to which delivery services will be offered to 34 non-residential retail customers comprising 33% of the total 1HB0362 Enrolled -14- LRB9002496JScc 1 kilowatt-hour sales to the common ownership group on or 2 before October 1, 1999. For purposes of this subsection (a), 3 an electric utility may define "common ownership" to exclude 4 sites which are not part of the same business, provided, that 5 auxiliary establishments as defined in the Standard 6 Industrial Classification Manual published by the United 7 States Office of Management and Budget shall not be excluded. 8 (b) The electric utility shall allow the aggregation of 9 loads that are eligible for delivery services so long as such 10 aggregation meets the criteria for delivery of electric power 11 and energy applicable to the electric utility established by 12 the regional reliability council to which the electric 13 utility belongs, by an independent system operating 14 organization to which the electric utility belongs, or by 15 another organization responsible for overseeing the integrity 16 and reliability of the transmission system, as such criteria 17 are in effect from time to time. The Commission may adopt 18 rules and regulations governing the criteria for aggregation 19 of the loads utilizing delivery services, but its failure to 20 do so shall not preclude any eligible customer from electing 21 delivery services. The electric utility shall allow such 22 aggregation for any voluntary grouping of customers, 23 including without limitation those having a common agent with 24 contractual authority to purchase electric power and energy 25 and delivery services on behalf of all customers in the 26 grouping. 27 (c) An electric utility shall allow a retail customer 28 that generates power for its own use to include the 29 electrical demand obtained from the customer's cogeneration 30 or self-generation facilities that is coincident with the 31 retail customer's maximum monthly electrical demand on the 32 electric utility's system in any determination of the 33 customer's maximum monthly electrical demand for purposes of 34 determining when such retail customer shall be offered1HB0362 Enrolled -15- LRB9002496JScc 1 delivery services pursuant to clause (i) of subparagraph (1) 2 of subsection (a) of this Section. 3 (d) The Commission shall establish charges, terms and 4 conditions for delivery services in accordance with Section 5 16-108. _______ 6 (e) Subject to the terms and conditions which the 7 electric utility is entitled to impose in accordance with 8 Section 16-108, a retail customer that is eligible to elect 9 delivery services pursuant to subsection (a) may place all or 10 a portion of its electric power and energy requirements on 11 delivery services. 12 (f) An electric utility may require a retail customer 13 who elects to (i) use an alternative retail electric supplier 14 or another electric utility for some but not all of its 15 electric power or energy requirements, and (ii) use the 16 electric utility for any portion of its remaining electric 17 power and energy requirements, to place the portion of the 18 customer's electric power or energy requirement that is to be 19 served by the electric utility on a tariff containing charges 20 that are set to recover the lowest reasonably available cost 21 to the electric utility of acquiring electric power and 22 energy on the wholesale electric market to serve such 23 remaining portion of the customer's electric power and energy 24 requirement, reasonable compensation for arranging for and 25 providing such electric power or energy, and the electric 26 utility's other costs of providing service to such remaining 27 electric power and energy requirement. 28 (220 ILCS 5/16-105 new) 29 Sec. 16-105. Delivery services implementation plan. To 30 ensure the safe and orderly implementation of delivery 31 services, each electric utility shall submit to the 32 Commission no later than March 1, 1999, a delivery services 33 implementation plan for non-residential customers and no1HB0362 Enrolled -16- LRB9002496JScc 1 later than August 1, 2001, a delivery services implementation 2 plan for residential customers. The delivery services 3 implementation plan shall detail the process and procedures 4 by which each electric utility will offer delivery services 5 to each customer class and shall be designed to insure an 6 orderly transition and the maintenance of reliable service. 7 The Commission shall enter an order approving, or approving 8 as modified, the delivery services implementation plan of 9 each electric utility no later than 60 days prior to the date 10 on which the electric utility must commence offering such 11 services. 12 (220 ILCS 5/16-106 new) 13 Sec. 16-106. Billing experiments. During the mandatory 14 transition period, an electric utility may at its discretion 15 conduct one or more experiments for the provision or billing 16 of services on a consolidated or aggregated basis, for the 17 provision of real-time pricing, or other billing or pricing 18 experiments, and may include experimental programs offered to 19 groups of retail customers possessing common attributes as 20 defined by the electric utility, such as the members of an 21 organization that was established to serve a well-defined 22 industry group, companies having multiple sites, or closely 23 located or affiliated buildings, provided that such groups 24 exist for a purpose other than obtaining energy services and 25 have been in existence for at least 10 years. The offering 26 of such a program by an electric utility to retail customers 27 participating in the program, and the participation by those 28 customers in the program, shall not create any right in any 29 other retail customer or group of customers to participate in 30 the same or a similar program. The Commission shall allow 31 such experiments to go into effect upon the filing by the 32 electric utility of a statement describing the program. 33 Nothing contained in this Section shall be deemed to prohibit1HB0362 Enrolled -17- LRB9002496JScc 1 the electric utility from offering, or the Commission from 2 approving, experimental rates, tariffs and services in 3 addition to those allowed under this Section. The Commission 4 shall review and report annually the progress, participation 5 and effects of such experiments to the General Assembly. 6 Based upon its review, recommendations for modification of 7 such experiments may be made by the Commission to the 8 Illinois General Assembly. 9 (220 ILCS 5/16-107 new) 10 Sec. 16-107. Real-time pricing. 11 (a) Each electric utility shall file, on or before May 12 1, 1998, a tariff or tariffs which allow nonresidential 13 retail customers in the electric utility's service area to 14 elect real-time pricing beginning October 1, 1998. 15 (b) Each electric utility shall file, on or before May 16 1, 2000, a tariff or tariffs which allow residential retail 17 customers in the electric utility's service area to elect 18 real-time pricing beginning October 1, 2000. 19 (c) The electric utility's tariff or tariffs filed 20 pursuant to this Section shall be subject to Article IX. 21 (220 ILCS 5/16-108 new) 22 Sec. 16-108. Recovery of costs associated with the 23 provision of delivery services. 24 (a) An electric utility shall file a delivery services 25 tariff with the Commission at least 210 days prior to the 26 date that it is required to begin offering such services 27 pursuant to this Act. An electric utility shall provide the 28 components of delivery services that are subject to the 29 jurisdiction of the Federal Energy Regulatory Commission at 30 the same prices, terms and conditions set forth in its 31 applicable tariff as approved or allowed into effect by that 32 Commission. The Commission shall otherwise have the authority 33 HB0362 Enrolled -18- LRB9002496JScc 1 pursuant to Article IX to review, approve, and modify the 2 prices, terms and conditions of those components of delivery 3 services not subject to the jurisdiction of the Federal 4 Energy Regulatory Commission, including the authority to 5 determine the extent to which such delivery services should 6 be offered on an unbundled basis. In making any such 7 determination the Commission shall consider, at a minimum, 8 the effect of additional unbundling on (i) the objective of 9 just and reasonable rates, (ii) electric utility employees, 10 and (iii) the development of competitive markets for electric 11 energy services in Illinois. 12 (b) The Commission shall enter an order approving, or 13 approving as modified, the delivery services tariff no later 14 than 30 days prior to the date on which the electric utility 15 must commence offering such services. The Commission may 16 subsequently modify such tariff pursuant to this Act. 17 (c) The electric utility's tariffs shall define the 18 classes of its customers for purposes of delivery services 19 charges. Delivery services shall be priced and made 20 available to all retail customers electing delivery services 21 in each such class on a nondiscriminatory basis regardless of 22 whether the retail customer chooses the electric utility, an 23 affiliate of the electric utility, or another entity as its 24 supplier of electric power and energy. Charges for delivery 25 services shall be cost based, and shall allow the electric 26 utility to recover the costs of providing delivery services 27 through its charges to its delivery service customers that 28 use the facilities and services associated with such costs. 29 Such costs shall include the costs of owning, operating and 30 maintaining transmission and distribution facilities. The 31 Commission shall also be authorized to consider whether, and 32 if so to what extent, the following costs are appropriately 33 included in the electric utility's delivery services rates: 34 (i) the costs of that portion of generation facilities used 1HB0362 Enrolled -19- LRB9002496JScc 1 for the production and absorption of reactive power in order 2 that retail customers located in the electric utility's 3 service area can receive electric power and energy from 4 suppliers other than the electric utility, and (ii) the costs 5 associated with the use and redispatch of generation 6 facilities to mitigate constraints on the transmission or 7 distribution system in order that retail customers located in 8 the electric utility's service area can receive electric 9 power and energy from suppliers other than the electric 10 utility. Nothing in this subsection shall be construed as 11 directing the Commission to allocate any of the costs 12 described in (i) or (ii) that are found to be appropriately 13 included in the electric utility's delivery services rates to 14 any particular customer group or geographic area in setting 15 delivery services rates. 16 (d) The Commission shall establish charges, terms and 17 conditions for delivery services that are just and reasonable 18 and shall take into account customer impacts when 19 establishing such charges. In establishing charges, terms and 20 conditions for delivery services, the Commission shall take 21 into account voltage level differences. A retail customer 22 shall have the option to request to purchase electric service 23 at any delivery service voltage reasonably and technically 24 feasible from the electric facilities serving that customer's 25 premises provided that there are no significant adverse 26 impacts upon system reliability or system efficiency. A 27 retail customer shall also have the option to request to 28 purchase electric service at any point of delivery that is 29 reasonably and technically feasible provided that there are 30 no significant adverse impacts on system reliability or 31 efficiency. Such requests shall not be unreasonably denied. 32 (e) Electric utilities shall recover the costs of 33 installing, operating or maintaining facilities for the 34 particular benefit of one or more delivery services 1HB0362 Enrolled -20- LRB9002496JScc 1 customers, including without limitation any costs incurred in 2 complying with a customer's request to be served at a 3 different voltage level, directly from the retail customer or 4 customers for whose benefit the costs were incurred, to the 5 extent such costs are not recovered through the charges 6 referred to in subsections (c) and (d) of this Section. 7 (f) An electric utility shall be entitled but not 8 required to implement transition charges in conjunction with 9 the offering of delivery services pursuant to Section 16-104. 10 If an electric utility implements transition charges, it 11 shall implement such charges for all delivery services 12 customers and for all customers described in subsection (h). 13 Such charges shall be calculated as provided in Section 14 16-102, and shall be collected on each kilowatt-hour 15 delivered under a delivery services tariff to a retail 16 customer from the date the customer first takes delivery 17 services until December 31, 2006 except as provided in 18 subsection (h) of this Section. Provided, however, that an 19 electric utility shall be entitled to petition for entry of 20 an order by the Commission authorizing the electric utility 21 to implement transition charges for an additional period 22 ending no later than December 31, 2008. The electric utility 23 shall file its petition with supporting evidence no earlier 24 than 16 months, and no later than 12 months, prior to 25 December 31, 2006. The Commission shall hold a hearing on 26 the electric utility's petition and shall enter its order no 27 later than 8 months after the petition is filed. The 28 Commission shall determine whether and to what extent the 29 electric utility shall be authorized to implement transition 30 charges for an additional period. The Commission may 31 authorize the electric utility to implement transition 32 charges for some or all of the additional period, and shall 33 determine the mitigation factors to be used in implementing 34 such transition charges; provided, that the Commission shall 1HB0362 Enrolled -21- LRB9002496JScc 1 not authorize mitigation factors less than 110% of those in 2 effect during the 12 months ended December 31, 2006. In 3 making its determination, the Commission shall consider the 4 following factors: the necessity to implement transition 5 charges for an additional period in order to maintain the 6 financial integrity of the electric utility; the prudence of 7 the electric utility's actions in reducing its costs since 8 the effective date of this amendatory Act of 1997; the 9 ability of the electric utility to provide safe, adequate and 10 reliable service to retail customers in its service area; and 11 the impact on competition of allowing the electric utility to 12 implement transition charges for the additional period. 13 (g) The electric utility shall file tariffs that 14 establish the transition charges to be paid by each class of 15 customers to the electric utility in conjunction with the 16 provision of delivery services. The electric utility's 17 tariffs shall define the classes of its customers for 18 purposes of calculating transition charges. The electric 19 utility's tariffs shall provide for the calculation of 20 transition charges on a customer-specific basis for any 21 retail customer whose average monthly maximum electrical 22 demand on the electric utility's system during the 6 months 23 with the customer's highest monthly maximum electrical 24 demands equals or exceeds 3.0 megawatts for electric 25 utilities having more than 1,000,000 customers, and for other 26 electric utilities for any customer that has an average 27 monthly maximum electrical demand on the electric utility's 28 system of one megawatt or more, and (A) for which there 29 exists data on the customer's usage during the 3 years 30 preceding the date that the customer became eligible to take 31 delivery services, or (B) for which there does not exist data 32 on the customer's usage during the 3 years preceding the date 33 that the customer became eligible to take delivery services, 34 if in the electric utility's reasonable judgment there exists 1HB0362 Enrolled -22- LRB9002496JScc 1 comparable usage information or a sufficient basis to develop 2 such information, and further provided that the electric 3 utility can require customers for which an individual 4 calculation is made to sign contracts that set forth the 5 transition charges to be paid by the customer to the electric 6 utility pursuant to the tariff. 7 (h) An electric utility shall also be entitled to file 8 tariffs that allow it to collect transition charges from 9 retail customers in the electric utility's service area that 10 do not take delivery services but that take electric power or 11 energy from an alternative retail electric supplier or from 12 an electric utility other than the electric utility in whose 13 service area the customer is located. Such charges shall be 14 calculated, in accordance with the definition of transition 15 charges in Section 16-102, for the period of time that the 16 customer would be obligated to pay transition charges if it 17 were taking delivery services, except that no deduction for 18 delivery services revenues shall be made in such calculation, 19 and usage data from the customer's class shall be used where 20 historical usage data is not available for the individual 21 customer. The customer shall be obligated to pay such 22 charges on a lump sum basis on or before the date on which 23 the customer commences to take service from the alternative 24 retail electric supplier or other electric utility, provided, 25 that the electric utility in whose service area the customer 26 is located shall offer the customer the option of signing a 27 contract pursuant to which the customer pays such charges 28 ratably over the period in which the charges would otherwise 29 have applied. 30 (i) An electric utility shall be entitled to add to the 31 bills of delivery services customers charges pursuant to 32 Sections 9-221, 9-222 (except as provided in Section 33 9-222.1), and Section 16-114 of this Act, Section 5-5 of the 34 Electricity Infrastructure Maintenance Fee Law, Section 6-5 1HB0362 Enrolled -23- LRB9002496JScc 1 of the Renewable Energy, Energy Efficiency, and Coal 2 Resources Development Law of 1997, and Section 13 of the 3 Energy Assistance Act of 1989. 4 (j) If a retail customer that obtains electric power and 5 energy from cogeneration or self-generation facilities 6 installed for its own use on or before January 1, 1997, 7 subsequently takes service from an alternative retail 8 electric supplier or an electric utility other than the 9 electric utility in whose service area the customer is 10 located for any portion of the customer's electric power and 11 energy requirements formerly obtained from those facilities 12 (including that amount purchased from the utility in lieu of 13 such generation and not as standby power purchases, under a 14 cogeneration displacement tariff in effect as of the 15 effective date of this amendatory Act of 1997), the 16 transition charges otherwise applicable pursuant to 17 subsections (f), (g), or (h) of this Section shall not be 18 applicable in any year to that portion of the customer's 19 electric power and energy requirements formerly obtained from 20 those facilities, provided, that for purposes of this 21 subsection (j), such portion shall not exceed the average 22 number of kilowatt-hours per year obtained from the 23 cogeneration or self-generation facilities during the 3 years 24 prior to the date on which the customer became eligible for 25 delivery services, except as provided in subsection (f) of 26 Section 16-110. 27 (220 ILCS 5/16-109 new) 28 Sec. 16-109. Unbundling of delivery services; Commission 29 review. The General Assembly finds that the offering of 30 delivery services will, and is intended to, facilitate the 31 development of competition for generation services, and that 32 competition may develop for other services currently offered 33 on a tariffed basis by the electric utility. The Commission 1HB0362 Enrolled -24- LRB9002496JScc 1 shall open a proceeding to investigate the need for and 2 desirability of different or additional unbundling of 3 delivery services for some or all electric utilities 3 years 4 from the date that a tariff for delivery services is first 5 approved or allowed into effect pursuant to this Section. 6 The Commission shall open an additional proceeding to again 7 investigate the need for and desirability of different or 8 additional unbundling of delivery services for some or all 9 electric utilities, 3 years after the entry of its final 10 order in the first investigation proceeding. The Commission 11 shall issue its final order in each investigation proceeding 12 no later than 6 months after the proceeding is initiated. In 13 each such proceeding the Commission shall consider, at a 14 minimum, the effect of additional unbundling on (i) the 15 objective of just and reasonable rates, (ii) electric utility 16 employees, and (iii) the development of competitive markets 17 for electric energy services in Illinois. Specific changes 18 to the delivery services tariffs of individual electric 19 utilities to implement findings and directives stated in an 20 order in an investigation proceeding initiated under this 21 Section shall be addressed through individual electric 22 utility tariff filings. The Commission may also, in 23 accordance with Section 16-108, upon complaint or upon its 24 own initiative without complaint, upon reasonable notice, 25 enter upon a hearing concerning the need and desirability of 26 requiring additional or other unbundling of delivery services 27 offered by electric utilities. 28 (220 ILCS 5/16-109A new) 29 Sec. 16-109A. Unbundling of prices for tariffed 30 services; Commission investigation. In addition to the 31 unbundling authorized under Sections 16-108 and 16-109, the 32 Commission shall have the authority to investigate the need 33 for, and to require, the restructuring or unbundling of1HB0362 Enrolled -25- LRB9002496JScc 1 prices for tariffed services, other than delivery services, 2 offered by an electric utility; provided, however, that the 3 Commission shall not enter an order requiring the 4 restructuring or unbundling of prices for any such tariffed 5 services for a customer class of an electric utility prior to 6 the date that the class first becomes eligible for delivery 7 services pursuant to Section 16-104. 8 (220 ILCS 5/16-110 new) 9 Sec. 16-110. Delivery services customer power purchase 10 options. 11 (a) Each electric utility shall offer a tariffed service 12 or services in accordance with the terms and conditions set 13 forth in this Section pursuant to which its non-residential 14 delivery services customers may purchase from the electric 15 utility an amount of electric power and energy that is equal 16 to or less than the amounts that are delivered by such 17 electric utility. 18 (b) Except as provided in subsection (o) of Section 19 16-112, a non-residential delivery services customer that is 20 paying transition charges to the electric utility shall be 21 permitted to purchase electric power and energy from the 22 electric utility at a price or prices equal to the sum of (i) 23 the market values that are determined for the electric 24 utility in accordance with Section 16-112 and used by the 25 electric utility to calculate the customer's transition 26 charges and (ii) a fee that compensates the electric utility 27 for any administrative costs it incurs in arranging to supply 28 such electric power and energy. The electric utility may 29 require that the customer purchase such electric power and 30 energy for periods of not less than one year and may also 31 require that the customer give up to 30 days notice for a 32 purchase of one year's duration, and 90 days notice for a 33 purchase of more than one year's duration. A non-residential1HB0362 Enrolled -26- LRB9002496JScc 1 delivery service customer exercising the option described in 2 this subsection may sell or assign its interests in the 3 electric power or energy that the customer has purchased. At 4 least twice per year, each electric utility shall notify its 5 small commercial retail customers, through bill inserts and 6 other similar means, of their option to obtain electric power 7 and energy through purchases at market value pursuant to this 8 subsection. 9 (c) After the transition charge period applicable to a 10 non-residential delivery services customer, and until the 11 provision of electric power and energy is declared 12 competitive for the customer group to which the customer 13 belongs, a non-residential delivery services customer that 14 paid any transition charges it was legally obligated to pay 15 to an electric utility shall be permitted to purchase 16 electric power and energy from the electric utility for 17 contract periods of one year at a price or prices equal to 18 the sum of (i) the market value determined for that 19 customer's class pursuant to Section 16-112 and (ii) to the 20 extent it is not included in such market value, a fee to 21 compensate the electric utility for the service of arranging 22 the supply or purchase of such electric power and energy. 23 The electric utility may require that a delivery services 24 customer give the following notice for such a purchase: (i) 25 for a small commercial retail customer, not more than 30 26 days; (ii) for a nonresidential customer which is not a small 27 commercial retail customer but which has maximum electrical 28 demand of less than 500 kilowatts, not more than 6 months; 29 (iii) for a nonresidential customer with maximum electrical 30 demand of 500 kilowatts or more but less than one megawatt, 31 not more than 9 months; and (iv) for a nonresidential 32 customer with maximum electrical demand of one megawatt or 33 more, not more than one year. At least twice per year, each 34 electric utility shall notify its small commercial retail1HB0362 Enrolled -27- LRB9002496JScc 1 customers, through bill inserts or other similar means, of 2 their option to obtain electric power and energy through 3 purchases at market value pursuant to this subsection. 4 (d) After the transition charge period applicable to a 5 non-residential delivery services customer, and until the 6 provision of electric power and energy is declared 7 competitive for the customer group to which the customer 8 belongs, a non-residential delivery services customer, other 9 than a small commercial retail customer, that paid any 10 transition charges it was legally obligated to pay to an 11 electric utility shall be permitted to purchase electric 12 power and energy from the electric utility for contract 13 periods of one year at a price or prices equal to (A) the sum 14 of (i) the electric utility's actual cost of procuring such 15 electric power and energy and (ii) a broker's fee to 16 compensate the electric utility for arranging the supply, or, 17 if the utility so elects, (B) the market value of electric 18 power or energy provided by the electric utility determined 19 as set forth in the electric utility's tariff for that 20 customer's class. The electric utility may require that the 21 delivery services customer give up to 30 days notice for such 22 a purchase. 23 (e) Each delivery services customer purchasing electric 24 power and energy from the electric utility pursuant to a 25 tariff filed in accordance with this Section shall also pay 26 all of the applicable charges set forth in the electric 27 utility's delivery services tariffs and any other tariffs 28 applicable to the services provided to that customer by the 29 electric utility. 30 (f) An electric utility can require a retail customer 31 taking delivery services that formerly generated electric 32 power and energy for its own use and that would not otherwise 33 pay transition charges on a portion of its electric power and 34 energy requirements served on delivery services to pay1HB0362 Enrolled -28- LRB9002496JScc 1 transition charges on that portion of the customer's electric 2 power and energy requirements as a condition of exercising 3 the delivery services customer power purchase options set 4 forth in this Section. 5 (220 ILCS 5/16-111 new) 6 Sec. 16-111. Rates and restructuring transactions during 7 mandatory transition period. 8 (a) During the mandatory transition period, 9 notwithstanding any provision of Article IX of this Act, and 10 except as provided in subsections (b), (d), (e), and (f) of 11 this Section, the Commission shall not (i) initiate, 12 authorize or order any change by way of increase (other than 13 in connection with a request for rate increase which was 14 filed after September 1, 1997 but prior to October 15, 1997, 15 by an electric utility serving less than 12,500 customers in 16 this state), (ii) initiate or, unless requested by the 17 electric utility, authorize or order any change by way of 18 decrease, restructuring or unbundling (except as provided in 19 Section 16-109A), in the rates of any electric utility that 20 were in effect on October 1, 1996, or (iii) in any order 21 approving any application for a merger pursuant to Section 22 7-204 that was pending as of May 16, 1997, impose any 23 condition requiring any filing for an increase, decrease, or 24 change in, or other review of, an electric utility's rates or 25 enforce any such condition of any such order; provided, 26 however, that this subsection shall not prohibit the 27 Commission from: 28 (1) approving the application of an electric 29 utility to implement an alternative to rate of return 30 regulation or a regulatory mechanism that rewards or 31 penalizes the electric utility through adjustment of 32 rates based on utility performance, pursuant to Section 33 9-244; ______ 1HB0362 Enrolled -29- LRB9002496JScc 1 (2) authorizing an electric utility to eliminate 2 its fuel adjustment clause and adjust its base rate 3 tariffs in accordance with subsection (b), (d), or (f) of 4 Section 9-220 of this Act, to fix its fuel adjustment 5 factor in accordance with subsection (c) of Section 9-220 6 of this Act, or to eliminate its fuel adjustment clause 7 in accordance with subsection (e) of Section 9-220 of 8 this Act; 9 (3) ordering into effect tariffs for delivery 10 services and transition charges in accordance with 11 Sections 16-104 and 16-108, for real-time pricing in 12 accordance with Section 16-107, or the options required 13 by Section 16-110 and subsection (n) of 16-112, allowing 14 a billing experiment in accordance with Section 16-106, 15 or modifying delivery services tariffs in accordance with 16 Section 16-109; or 17 (4) ordering or allowing into effect any tariff to 18 recover charges pursuant to Sections 9-201.5, 9-220.1, 19 9-221, 9-222 (except as provided in Section 9-222.1), 20 16-108, and 16-114 of this Act, Section 5-5 of the 21 Electricity Infrastructure Maintenance Fee Law, Section 22 6-5 of the Renewable Energy, Energy Efficiency, and Coal 23 Resources Development Law of 1997, and Section 13 of the 24 Energy Assistance Act of 1989. 25 (b) Notwithstanding the provisions of subsection (a), 26 each Illinois electric utility serving more than 12,500 27 customers in Illinois shall file tariffs (i) reducing, 28 effective August 1, 1998, each component of its base rates to 29 residential retail customers by 15% from the base rates in 30 effect immediately prior to January 1, 1998 and (ii) if the 31 public utility provides electric service to more than 500,000 32 customers in this State on the effective date of this 33 amendatory Act of 1997, reducing, effective May 1, 2002, each 34 component of its base rates to residential retail customers1HB0362 Enrolled -30- LRB9002496JScc 1 by an additional 5% from the base rates in effect immediately 2 prior to January 1, 1998. Provided, however, that if an 3 electric utility's average residential retail rate is less 4 than or equal to the average residential retail rate for a 5 group of Midwest Utilities (consisting of all investor-owned 6 electric utilities with annual system peaks in excess of 1000 7 megawatts in the States of Illinois, Indiana, Iowa, Kentucky, 8 Michigan, Missouri, Ohio, and Wisconsin), based on data 9 reported on Form 1 to the Federal Energy Regulatory 10 Commission for calendar year 1995, then it shall only be 11 required to file tariffs (i) reducing, effective August 1, 12 1998, each component of its base rates to residential retail 13 customers by 5% from the base rates in effect immediately 14 prior to January 1, 1998, (ii) reducing, effective October 1, 15 2000, its base rates to residential retail customers by the 16 lesser of 5% of the base rates in effect immediately prior to 17 January 1, 1998 or the percentage by which the electric 18 utility's average residential retail rate exceeds the average 19 residential retail rate of the Midwest Utilities, based on 20 data reported on Form 1 to the Federal Energy Regulatory 21 Commission for calendar year 1999, and (iii) reducing, 22 effective October 1, 2002, each component of its base rates 23 to residential retail customers by an additional amount equal 24 to the lesser of 5% of the base rates in effect immediately 25 prior to January 1, 1998 or the percentage by which the 26 electric utility's average residential retail rate exceeds 27 the average residential retail rate of the Midwest Utilities, 28 based on data reported on Form 1 to the Federal Energy 29 Regulatory Commission for calendar year 2001. Provided, 30 further, that any electric utility for which a decrease in 31 base rates has been or is placed into effect between October 32 1, 1996 and the dates specified in the preceding sentences of 33 this subsection, other than pursuant to the requirements of 34 this subsection, shall be entitled to reduce the amount of1HB0362 Enrolled -31- LRB9002496JScc 1 any reduction or reductions in its base rates required by 2 this subsection by the amount of such other decrease. The 3 tariffs required under this subsection shall be filed 45 days 4 in advance of the effective date. Notwithstanding anything to 5 the contrary in Section 9-220 of this Act, no restatement of 6 base rates in conjunction with the elimination of a fuel 7 adjustment clause under that Section shall result in a lesser 8 decrease in base rates than customers would otherwise receive 9 under this subsection had the electric utility's fuel 10 adjustment clause not been eliminated. 11 (c) Any utility reducing its base rates by 15% on August 12 1, 1998 pursuant to subsection (b) shall include the 13 following statement on its bills for residential customers 14 from August 1 through December 31, 1998: "Effective August 1, 15 1998, your rates have been reduced by 15% by the Electric 16 Service Customer Choice and Rate Relief Law of 1997 passed by 17 the Illinois General Assembly.". Any utility reducing its 18 base rates by 5% on August 1, 1998, pursuant to subsection 19 (b) shall include the following statement on its bills for 20 residential customers from August 1 through December 31, 21 1998: "Effective August 1, 1998, your rates have been 22 reduced by 5% by the Electric Service Customer Choice and 23 Rate Relief Law of 1997 passed by the Illinois General 24 Assembly.". 25 (d) During the mandatory transition period, but not 26 before January 1, 2000, and notwithstanding the provisions 27 of subsection (a), an electric utility may request an 28 increase in its base rates if the electric utility 29 demonstrates that the 2-year average of its earned rate of 30 return on common equity, calculated as its net income 31 applicable to common stock divided by the average of its 32 beginning and ending balances of common equity using data 33 reported in the electric utility's Form 1 report to the 34 Federal Energy Regulatory Commission but adjusted to remove1HB0362 Enrolled -32- LRB9002496JScc 1 the effects of accelerated depreciation or amortization or 2 other transition or mitigation measures implemented by the 3 electric utility pursuant to subsection (g) of this Section 4 and the effect of any refund paid pursuant to subsection (e) 5 of this Section, is below the 2-year average for the same 2 6 years of the monthly average yields of 30-year U.S. Treasury 7 bonds published by the Board of Governors of the Federal 8 Reserve System in its weekly H.15 Statistical Release or 9 successor publication. The Commission shall review the 10 electric utility's request, and may review the justness and 11 reasonableness of all rates for tariffed services, in 12 accordance with the provisions of Article IX of this Act, 13 provided that the Commission shall consider any special or 14 negotiated adjustments to the revenue requirement agreed to 15 between the electric utility and the other parties to the 16 proceeding. In setting rates under this Section, the 17 Commission shall exclude the costs and revenues that are 18 associated with competitive services and any billing or 19 pricing experiments conducted under Section 16-106. 20 (e) For the purposes of this subsection (e) all 21 calculations and comparisons shall be performed for the 22 Illinois operations of multijurisdictional utilities. During 23 the mandatory transition period, notwithstanding the 24 provisions of subsection (a), if the 2-year average of an 25 electric utility's earned rate of return on common equity, 26 calculated as its net income applicable to common stock 27 divided by the average of its beginning and ending balances 28 of common equity using data reported in the electric 29 utility's Form 1 report to the Federal Energy Regulatory 30 Commission but adjusted to remove the effect of any refund 31 paid under this subsection (e), and further adjusted to 32 include the annual amortization of any difference between the 33 consideration received by an affiliated interest of the 34 electric utility in the sale of an asset which had been sold1HB0362 Enrolled -33- LRB9002496JScc 1 or transferred by the electric utility to the affiliated 2 interest subsequent to the effective date of this amendatory 3 Act of 1997 and the consideration for which such asset had 4 been sold or transferred to the affiliated interest, with 5 such difference to be amortized ratably from the date of the 6 sale by the affiliated interest to December 31, 2006, exceeds 7 the 2-year average of the Index for the same 2 years by 1.5 8 or more percentage points, the electric utility shall make 9 refunds to customers beginning the first billing day of April 10 in the following year in the manner described in paragraph 11 (3) of this subsection. For purposes of this subsection (e), 12 the "Index" shall be the sum of (A) the average for the 12 13 months ended September 30 of the monthly average yields of 14 30-year U.S. Treasury bonds published by the Board of 15 Governors of the Federal Reserve System in its weekly H.15 16 Statistical Release or successor publication for each year 17 1998 through 2004, and (B) (i) 4.00 percentage points for 18 each of the 12-month periods ending September 30, 1998 19 through September 30, 1999 or (ii) 5.00 percentage points for 20 each of the 12-month periods ending September 30, 2000 21 through September 30, 2004. 22 (1) For purposes of this subsection (e), "excess 23 earnings" means the difference between (A) the 2-year 24 average of the electric utility's earned rate of return 25 on common equity, less (B) the 2-year average of the sum 26 of (i) the Index applicable to each of the 2 years and 27 (ii) 1.5 percentage points; provided, that "excess 28 earnings" shall never be less than zero. 29 (2) On or before March 31 of each year 2000 through 30 2005 each electric utility shall file a report with the 31 Commission showing its earned rate of return on common 32 equity, calculated in accordance with this subsection, 33 for the preceding calendar year and the average for the 34 preceding 2 calendar years. 1HB0362 Enrolled -34- LRB9002496JScc 1 (3) If an electric utility has excess earnings, 2 determined in accordance with paragraphs (1) and (2) of 3 this subsection, the refunds which the electric utility 4 shall pay to its customers beginning the first billing 5 day of April in the following year shall be calculated 6 and applied as follows: 7(i) The electric utility's excess earnings 8 shall be multiplied by the average of the beginning 9 and ending balances of the electric utility's common 10 equity for the 2-year period in which excess 11 earnings occurred. 12(ii) The result of the calculation in (i) 13 shall be multiplied by 0.50 and then divided by a 14 number equal to 1 minus the electric utility's 15 composite federal and State income tax rate. 16(iii) The result of the calculation in (ii) 17 shall be divided by the sum of the electric 18 utility's projected total kilowatt-hour sales to 19 retail customers plus projected kilowatt-hours to be 20 delivered to delivery services customers over a one 21 year period beginning with the first billing date in 22 April in the succeeding year to determine a cents 23 per kilowatt-hour refund factor. 24(iv) The cents per kilowatt-hour refund factor 25 calculated in (iii) shall be credited to the 26 electric utility's customers by applying the factor 27 on the customer's monthly bills to each 28 kilowatt-hour sold or delivered until the total 29 amount calculated in (ii) has been paid to 30 customers. 31 (f) During the mandatory transition period, an electric 32 utility may file revised tariffs reducing the price of any 33 tariffed service offered by the electric utility for all 34 customers taking that tariffed service, which shall be1HB0362 Enrolled -35- LRB9002496JScc 1 effective 7 days after filing. 2 (g) During the mandatory transition period, an electric 3 utility may, without obtaining any approval of the Commission 4 other than that provided for in this subsection and 5 notwithstanding any other provision of this Act or any rule 6 or regulation of the Commission that would require such 7 approval: 8 (1) implement a reorganization, other than a merger 9 of 2 or more public utilities as defined in Section 3-105 10 or their holding companies; 11 (2) retire generating plants from service; 12 (3) sell, assign, lease or otherwise transfer 13 assets to an affiliated or unaffiliated entity and as 14 part of such transaction enter into service agreements, 15 power purchase agreements, or other agreements with the 16 transferee; provided, however, that the prices, terms and 17 conditions of any power purchase agreement must be 18 approved or allowed into effect by the Federal Energy 19 Regulatory Commission; or 20 (4) use any accelerated cost recovery method 21 including accelerated depreciation, accelerated 22 amortization or other capital recovery methods, or record 23 reductions to the original cost of its assets. 24 In order to implement a reorganization, retire generating 25 plants from service, or sell, assign, lease or otherwise 26 transfer assets pursuant to this Section, the electric 27 utility shall comply with subsections (c) and (d) of Section 28 16-128, if applicable, and provide the Commission with at 29 least 30 days notice of the proposed reorganization or 30 transaction, which notice shall include the following 31 information: 32(i) a complete statement of the entries that 33 the electric utility will make on its books and 34 records of account to implement the proposed 1HB0362 Enrolled -36- LRB9002496JScc 1 reorganization or transaction together with a 2 certification from an independent certified public 3 accountant that such entries are in accord with 4 generally accepted accounting principles and, if the 5 Commission has previously approved guidelines for 6 cost allocations between the utility and its 7 affiliates, a certification from the chief 8 accounting officer of the utility that such entries 9 are in accord with those cost allocation guidelines; 10(ii) a description of how the electric utility 11 will use proceeds of any sale, assignment, lease or 12 transfer to retire debt or otherwise reduce or 13 recover the costs of services provided by such 14 electric utility; 15(iii) a list of all federal approvals or 16 approvals required from departments and agencies of 17 this State, other than the Commission, that the 18 electric utility has or will obtain before 19 implementing the reorganization or transaction; 20(iv) an irrevocable commitment by the electric 21 utility that it will not, as a result of the 22 transaction, impose any stranded cost charges that 23 it might otherwise be allowed to charge retail 24 customers under federal law or increase the 25 transition charges that it is otherwise entitled to 26 collect under this Article XVI; and 27(v) if the electric utility proposes to sell, 28 assign, lease or otherwise transfer a generating 29 plant that brings the amount of net dependable 30 generating capacity transferred pursuant to this 31 subsection to an amount equal to or greater than 15% 32 of the electric utility's net dependable capacity as 33 of the effective date of this amendatory Act of 34 1997, and enters into a power purchase agreement 1HB0362 Enrolled -37- LRB9002496JScc 1 with the entity to which such generating plant is 2 sold, assigned, leased, or otherwise transferred, 3 the electric utility also agrees, if its fuel 4 adjustment clause has not already been eliminated, 5 to eliminate its fuel adjustment clause in 6 accordance with subsection (b) of Section 9-220 for 7 a period of time equal to the length of any such 8 power purchase agreement or successor agreement, or 9 until January 1, 2005, whichever is longer; if the 10 capacity of the generating plant so transferred and 11 related power purchase agreement does not result in 12 the elimination of the fuel adjustment clause under 13 this subsection, and the fuel adjustment clause has 14 not already been eliminated, the electric utility 15 shall agree that the costs associated with the 16 transferred plant that are included in the 17 calculation of the rate per kilowatt-hour to be 18 applied pursuant to the electric utility's fuel 19 adjustment clause during such period shall not 20 exceed the per kilowatt-hour cost associated with 21 such generating plant included in the electric 22 utility's fuel adjustment clause during the full 23 calendar year preceding the transfer, with such 24 limit to be adjusted each year thereafter by the 25 Gross Domestic Product Implicit Price Deflator. 26(vi) In addition, if the electric utility 27 proposes to sell, assign, or lease, (A) either (1) 28 an amount of generating plant that brings the amount 29 of net dependable generating capacity transferred 30 pursuant to this subsection to an amount equal to or 31 greater than 15% of its net dependable capacity on 32 the effective date of this amendatory Act of 1997, 33 or (2) one or more generating plants with a total 34 net dependable capacity of 1100 megawatts, or (B) 1HB0362 Enrolled -38- LRB9002496JScc 1 transmission and distribution facilities that either 2 (1) bring the amount of transmission and 3 distribution facilities transferred pursuant to this 4 subsection to an amount equal to or greater than 15% 5 of the electric utility's total depreciated original 6 cost investment in such facilities, or (2) represent 7 an investment of $25,000,000 in terms of total 8 depreciated original cost, the electric utility 9 shall provide, in addition to the information listed 10 in subparagraphs (i) through (v), the following 11 information: a description of how the electric 12 utility will meet its service obligations under this 13 Act in a safe and reliable manner. If the Commission 14 has not issued an order initiating a hearing on the 15 proposed transaction within 30 days after the date 16 the electric utility's notice is filed, the 17 transaction shall be deemed approved. The 18 Commission may, after notice and hearing, prohibit 19 the proposed transaction if it makes either or both 20 of the following findings: (1) that the proposed 21 transaction will render the electric utility unable 22 to provide its tariffed services in a safe and 23 reliable manner, or (2) that there is a strong 24 likelihood that consummation of the proposed 25 transaction will result in the electric utility 26 being entitled to request an increase in its base 27 rates during the mandatory transition period 28 pursuant to subsection (d) of this Section. Any 29 hearing initiated by the Commission into the 30 proposed transaction shall be completed, and the 31 Commission's final order approving or prohibiting 32 the proposed transaction shall be entered, within 90 33 days after the date the electric utility's notice 34 was filed. Provided, however, that a sale, 1HB0362 Enrolled -39- LRB9002496JScc 1 assignment, or lease of transmission facilities to 2 an independent system operator that meets the 3 requirements of Section 16-126 shall not be subject 4 to Commission approval under this Section. 5In any proceeding conducted by the Commission 6 pursuant to this subparagraph (vi), intervention 7 shall be limited to parties with a direct interest 8 in the transaction which is the subject of the 9 hearing and any statutory consumer protection agency 10 as defined in subsection (d) of Section 9-102.1. 11 Notwithstanding the provisions of Section 10-113 of 12 this Act, any application seeking rehearing of an 13 order issued under this subparagraph (vi), whether 14 filed by the electric utility or by an intervening 15 party, shall be filed within 10 days after service 16 of the order. 17 The Commission shall not in any subsequent proceeding or 18 otherwise, review such a reorganization or other transaction 19 authorized by this Section, but shall retain the authority to 20 allocate costs as stated in Section 16-111(i). An entity to 21 which an electric utility sells, assigns, leases or transfers 22 assets pursuant to this subsection (g) shall not, as a result 23 of the transactions specified in this subsection (g), be 24 deemed a public utility as defined in Section 3-105. Nothing 25 in this subsection (g) shall change any requirement under the 26 jurisdiction of the Illinois Department of Nuclear Safety 27 including, but not limited to, the payment of fees. Nothing 28 in this subsection (g) shall exempt a utility from obtaining 29 a certificate pursuant to Section 8-406 of this Act for the 30 construction of a new electric generating facility. Nothing 31 in this subsection (g) is intended to exempt the transactions 32 hereunder from the operation of the federal or State 33 antitrust laws. Nothing in this subsection (g) shall require 34 an electric utility to use the procedures specified in this1HB0362 Enrolled -40- LRB9002496JScc 1 subsection for any of the transactions specified herein. Any 2 other procedure available under this Act may, at the electric 3 utility's election, be used for any such transaction. 4 (h) During the mandatory transition period, the 5 Commission shall not establish or use any rates of 6 depreciation, which for purposes of this subsection shall 7 include amortization, for any electric utility other than 8 those established pursuant to subsection (c) of Section 5-104 9 of this Act or utilized pursuant to subsection (g) of this 10 Section. Provided, however, that in any proceeding to review 11 an electric utility's rates for tariffed services pursuant to 12 Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the 13 Commission may establish new rates of depreciation for the 14 electric utility in the same manner provided in subsection 15 (d) of Section 5-104 of this Act. An electric utility 16 implementing an accelerated cost recovery method including 17 accelerated depreciation, accelerated amortization or other 18 capital recovery methods, or recording reductions to the 19 original cost of its assets, pursuant to subsection (g) of 20 this Section, shall file a statement with the Commission 21 describing the accelerated cost recovery method to be 22 implemented or the reduction in the original cost of its 23 assets to be recorded. Upon the filing of such statement, 24 the accelerated cost recovery method or the reduction in the 25 original cost of assets shall be deemed to be approved by the 26 Commission as though an order had been entered by the 27 Commission. 28 (i) Subsequent to the mandatory transition period, the 29 Commission, in any proceeding to establish rates and charges 30 for tariffed services offered by an electric utility, shall 31 consider only (1) the then current or projected revenues, 32 costs, investments and cost of capital directly or indirectly 33 associated with the provision of such tariffed services; (2) 34 collection of transition charges in accordance with Sections1HB0362 Enrolled -41- LRB9002496JScc 1 16-102 and 16-108 of this Act; (3) recovery of any employee 2 transition costs as described in Section 16-128 which the 3 electric utility is continuing to incur, including recovery 4 of any unamortized portion of such costs previously incurred 5 or committed, with such costs to be equitably allocated among 6 bundled services, delivery services, and contracts with 7 alternative retail electric suppliers; and (4) recovery of 8 the costs associated with the electric utility's compliance 9 with decommissioning funding requirements; and shall not 10 consider any other revenues, costs, investments or cost of 11 capital of either the electric utility or of any affiliate of 12 the electric utility that are not associated with the 13 provision of tariffed services. In setting rates for 14 tariffed services, the Commission shall equitably allocate 15 joint and common costs and investments between the electric 16 utility's competitive and tariffed services. In determining 17 the justness and reasonableness of the electric power and 18 energy component of an electric utility's rates for tariffed 19 services subsequent to the mandatory transition period and 20 prior to the time that the provision of such electric power 21 and energy is declared competitive, the Commission shall 22 consider the extent to which the electric utility's tariffed 23 rates for such component for each customer class exceed the 24 market value determined pursuant to Section 16-112, and, if 25 the electric power and energy component of such tariffed rate 26 exceeds the market value by more than 10% for any customer 27 class, may establish such electric power and energy component 28 at a rate equal to the market value plus 10%. In any such 29 case, the Commission may also elect to extend the provisions 30 of Section 16-111(e) for any period in which the electric 31 utility is collecting transition charges, using information 32 applicable to such period. 33 (j) During the mandatory transition period, an electric 34 utility may elect to transfer to a non-operating income1HB0362 Enrolled -42- LRB9002496JScc 1 account under the Commission's Uniform System of Accounts 2 either or both of (i) an amount of unamortized investment tax 3 credit that is in addition to the ratable amount which is 4 credited to the electric utility's operating income account 5 for the year in accordance with Section 46(f)(2) of the 6 federal Internal Revenue Code of 1986, as in effect prior to 7 P.L. 101-508, or (ii) "excess tax reserves", as that term is 8 defined in Section 203(e)(2)(A) of the federal Tax Reform Act 9 of 1986, provided that (A) the amount transferred may not 10 exceed the amount of the electric utility's assets that were 11 created pursuant to Statement of Financial Accounting 12 Standards No. 71 which the electric utility has written off 13 during the mandatory transition period, and (B) the transfer 14 shall not be effective until approved by the Internal Revenue 15 Service. An electric utility electing to make such a 16 transfer shall file a statement with the Commission stating 17 the amount and timing of the transfer for which it intends to 18 request approval of the Internal Revenue Service, along with 19 a copy of its proposed request to the Internal Revenue 20 Service for a ruling. The Commission shall issue an order 21 within 14 days after the electric utility's filing approving, 22 subject to receipt of approval from the Internal Revenue 23 Service, the proposed transfer. 24 (220 ILCS 5/16-112 new) 25 Sec. 16-112. Determination of market value. 26 (a) The market value to be used in the calculation of 27 transition charges as defined in Section 16-102 shall be 28 determined in accordance with either (i) a tariff that has 29 been filed by the electric utility with the Commission 30 pursuant to Article IX of this Act and that provides for a 31 determination of the market value for electric power and 32 energy as a function of an exchange traded or other market 33 traded index, options or futures contract or contracts1HB0362 Enrolled -43- LRB9002496JScc 1 applicable to the market in which the utility sells, and the 2 customers in its service area buy, electric power and energy, 3 or (ii) in the event no such tariff has been placed into 4 effect for the electric utility, or in the event such tariff 5 does not establish market values for each of the years 6 specified in the neutral fact-finder process described in 7 subsections (b) through (h) of this Section, a tariff 8 incorporating the market values resulting from the neutral 9 fact-finder process set forth in subsections (b) through (h) 10 of this Section. 11 (b) Except as provided in subsection (m) of this 12 Section, on or before April 30, 1998, on or before February 13 28, 1999, and on or before each April 30 from 2000 until 14 2007, the Commission shall appoint a neutral fact-finder to 15 make the calculations described in subsection (c) of this 16 Section. The neutral fact-finder shall be a member of a 17 national public accounting firm, shall not have served as the 18 neutral fact-finder in the previous year, and shall be 19 selected from a list of candidates provided by a nationally 20 recognized provider of neutral fact-finders that has 21 established rules for maintaining confidentiality. An amount 22 sufficient to pay the fees of the neutral fact-finder shall 23 be appropriated annually from the Public Utility Fund in the 24 State treasury. 25 (c) On or before June 1, 1998, on or before April 1, 26 1999, and on or before each June 1 from 2000 until 2007, or 27 until discontinued in accordance with subsection (m) of this 28 Section, each electric utility and each alternative retail 29 electric supplier shall submit to the neutral fact-finder a 30 summary of (A) all contracts entered into after June 1, 1997 31 that are for the sale of electric power and energy from a 32 generating facility or facilities located in this State or 33 located in a contiguous State and owned by an electric 34 utility as part of its interconnected operating system and1HB0362 Enrolled -44- LRB9002496JScc 1 delivery during one or more of the 5 years succeeding the 2 date of submission, and (B) all contracts entered into after 3 June 1, 1997 for purchase and delivery of electric power and 4 energy in or into this State during one or more of the 5 5 years succeeding the date of submission; provided, however, 6 that such contracts shall not include (i) contracts between 7 the electric utility and an affiliate; (ii) sales, purchases, 8 or deliveries made under rates and tariffs filed with the 9 Commission, except for tariffs filed pursuant to subsection 10 (d) of Section 16-110 and except for special or negotiated 11 rate contracts between an electric utility and a retail 12 customer to the extent that such contracts are for the 13 provision of electric power and energy after the date that 14 the customer becomes eligible for delivery services; and 15 (iii) extensions or amendments to full requirements wholesale 16 contracts existing as of the effective date of this 17 amendatory Act of 1997, provided that such contracts, 18 extensions, or amendments are cost of service regulated by 19 the Federal Energy Regulatory Commission. The summaries 20 shall, at a minimum, identify the date of the contract; the 21 year in which the electric power or energy is to be sold or 22 delivered; the point of delivery; defining characteristics 23 such as the nature of the power transaction (for example, 24 reserve responsibility (firm, non-firm)), length of contract 25 and temporal differences (for example, season, on-peak or 26 off-peak); and the applicable prices stated at the point at 27 which the electric power and energy leaves the electric 28 utility's or alternative retail electric supplier's 29 transmission system, as the case may be, in the case of 30 contracts described in item (A) and at the point at which the 31 electric power and energy enters the electric utility's 32 transmission system in the case of contracts in item (B), 33 provided, that the applicable price shall be stated at the 34 point at which the electric power and energy enters the1HB0362 Enrolled -45- LRB9002496JScc 1 electric utility's transmission system in the case of 2 electric power and energy generated for delivery within the 3 electric utility's service area. In reporting to the neutral 4 fact-finder the price of power and energy sold under bundled 5 service contracts, electric utilities and alternative retail 6 electric suppliers shall deduct from the contract price the 7 charges for delivery services, including transition charges, 8 applicable to delivery services customers in a utility's 9 service area, and charges for services, if any, other than 10 the provision of power and energy or delivery services. The 11 Commission may adopt orders setting forth requirements 12 governing the form and content of such summaries. 13 (d) The neutral fact-finder shall calculate market 14 values for electric power and energy for each electric 15 utility, taking into account the defining characteristics set 16 forth in subsection (c) of this Section; provided, however, 17 that the neutral fact-finder may determine that a particular 18 value is appropriate for more than one electric utility, or 19 for all electric utilities in this State. The neutral 20 fact-finder shall calculate the market values for the next 21 year and, to the extent the summaries include a sufficient 22 number of actual contracts to represent a viable market for 23 the sale and delivery of electric power and energy in 24 subsequent years, for each of the 4 succeeding years. 25 (e) In calculating market values for electric power, the 26 neutral fact-finder shall weight contract prices (including 27 any contract price indices) by both the amount of capacity 28 covered by the contract and the number of hours in which 29 capacity is to be provided under the contract in each period 30 of the year, shall take into account all of the defining 31 characteristics set forth in subsection (c) of this Section 32 and shall develop such values as required to represent the 33 different types of market values of electric power. 34 (f) The neutral fact-finder shall base calculations of 1HB0362 Enrolled -46- LRB9002496JScc 1 the market values for electric energy on the energy prices 2 stated in the contracts, and where no explicit energy prices 3 or index price basis are stated, on the actual energy costs 4 of the supplier in the corresponding period of the preceding 5 year that would have been applicable to the electric energy 6 provided under the contract. The neutral fact-finder shall 7 develop market values for electric energy and shall take into 8 account the defining characteristics set forth in subsection 9 (c) of this Section, as required to represent the market 10 values of such electric energy. 11 (g) If the contracts used by the neutral fact-finder 12 base prices for future years on one or more indices, the 13 neutral fact-finder shall identify such indices in his or her 14 final report, develop a weighting for each index, and 15 calculate a weighted average index. The market values shall 16 be calculated using the weighted average index when the 17 actual values of the component indices are known. 18 (h) The neutral fact-finder shall publish a final report 19 on or before July 30 of each year, except that in 1999 the 20 neutral fact finder shall publish the report on or before May 21 30, setting forth the calculated market values and stating 22 the basis for such calculations. The final report shall not, 23 however, disclose any proprietary or confidential data. 24 (i) The market values calculated by the neutral 25 fact-finder shall not be admissible in any proceeding for any 26 purpose other than the calculation of transition charges or 27 calculation of the price for the power purchase options 28 provided pursuant to subsection (b) and (c) of Section 29 16-110. _______ 30 (j) The Commission shall have access to all contracts 31 described in subsection (c) of this Section and shall perform 32 such audits as it and the neutral fact-finder deem necessary 33 to insure the accuracy of the summaries submitted to the 34 neutral fact-finder. The summaries described in subsection1HB0362 Enrolled -47- LRB9002496JScc 1 (c) of this Section and each contract shall be accorded 2 confidential and proprietary treatment and their review shall 3 be subject to the provisions of Sections 4-404 and 5-108 of 4 this Act, and the contract between the Commission and the 5 neutral fact-finder shall contain provisions obligating the 6 neutral fact-finder to comply with such Sections. The 7 summaries shall not be discoverable by any party in any 8 proceeding absent a compelling demonstration of need. 9 (k) In determining the market values to be used for the 10 various customer classes in calculating transition charges as 11 defined in Section 16-102 or for the power purchase options 12 set forth in Section 16-110, an electric utility shall apply 13 the market values that are determined as set forth in 14 subsection (a) to the electric power and energy that would 15 have been used to serve the delivery services customers' 16 electric power and energy requirements, based on the usage 17 specified in Section 16-102 and taking into account the 18 daily, monthly, annual and other relevant characteristics of 19 the customers' demands on the electric utility's system. 20 (l) In calculating a lump sum transition charge payment 21 for the purposes of subsection (h) of Section 16-108, the 22 electric utility shall use the market values that were 23 determined as provided in its tariff, or if such market 24 values have not been determined for the full period of time 25 covered by such lump sum calculation, such other basis as is 26 stated in the electric utility's tariff filed pursuant to 27 Section 16-108. 28 (m) The Commission may approve or reject, or propose 29 modifications to, any tariff providing for the determination 30 of market value that has been proposed by an electric utility 31 pursuant to subsection (a) of this Section, but shall not 32 have the power to otherwise order the electric utility to 33 implement a modified tariff or to place into effect any 34 tariff for the determination of market value other than one1HB0362 Enrolled -48- LRB9002496JScc 1 incorporating the neutral fact-finder procedure set forth in 2 this Section. Provided, however, that if each electric 3 utility serving at least 300,000 customers has placed into 4 effect a tariff that provides for a determination of market 5 value as a function of an exchange traded or other market 6 traded index, options or futures contract or contracts, then 7 the Commission can require any other electric utilities to 8 file such a tariff, and can terminate the neutral fact-finder 9 procedure for the periods covered by such tariffs. 10 (n) To the extent that the summaries list a sufficient 11 number of actual contracts to represent a viable market and 12 market values can be determined for more than one year, the 13 electric utility shall offer customers that are obligated to 14 pay transition charges contracts that establish for one or 15 more years, up to a maximum of the lesser of 5 years or the 16 remaining number of years until December 31, 2008, the market 17 value or values to be used in calculating the customer's 18 transition charges in such years and for which market value 19 determinations have been made. The electric utility may 20 require any customer to give up to one year notice prior to 21 entering into a one or 2 year contract pursuant to this 22 subsection, up to 2 years notice for a 3 year contract, and 23 up to 3 years notice for a 4 or 5 year contract. Contracts 24 of one or 2 years duration shall incorporate the market 25 values that were determined as provided in this Section in 26 the year in which the notice is required to be given. 27 Contracts of more than 2 years duration shall incorporate the 28 market values that are determined in the year prior to the 29 first year in which the electric utility will collect 30 transition charges from the customer under the contract. The 31 electric utility shall also allow customers to select, at the 32 time that a customer gives its notice, an option to revoke 33 the notice within 30 days following the determination of the 34 market values that will apply under the contract requested by1HB0362 Enrolled -49- LRB9002496JScc 1 the customer, and may charge customers a fee for such option 2 that is set forth in a tariff filed pursuant to Article IX 3 and that is adequate to allow the electric utility to recover 4 its transactional costs and compensate it based on the cost 5 that would be incurred to purchase an option to cover the 6 risk associated with the customer's option to revoke. The 7 electric utility shall not be required to offer customers a 8 contract under this paragraph for any year for which no 9 determination of market value has been made either by the 10 neutral fact-finder or pursuant to a tariff filed by the 11 electric utility. 12 (o) An electric utility shall have no obligation to 13 provide electric power or energy as a tariffed service for 14 the electric power and energy requirements placed on delivery 15 service by any customer that has entered into a contract 16 pursuant to subsection (n) of this Section and has not 17 purchased and exercised an option to revoke, during the term 18 of the contract. A customer that has purchased and exercised 19 an option to revoke under this subsection shall remain 20 eligible to receive any tariffed service for which it would 21 otherwise be eligible. 22 (220 ILCS 5/16-113 new) 23 Sec. 16-113. Declaration of service as a competitive 24 service. 25 (a) An electric utility may, by petition, request the 26 Commission to declare a tariffed service provided by the 27 electric utility to be a competitive service. The electric 28 utility shall give notice of its petition to the public in 29 the same manner that public notice is provided for proposed 30 general increases in rates for tariffed services, in 31 accordance with rules and regulations prescribed by the 32 Commission. The Commission shall hold a hearing on the 33 petition if a hearing is deemed necessary by the Commission.1HB0362 Enrolled -50- LRB9002496JScc 1 The Commission shall declare the service to be a competitive 2 service for some identifiable customer segment or group of 3 customers, or some clearly defined geographical area within 4 the electric utility's service area, if the service or a 5 reasonably equivalent substitute service is reasonably 6 available to the customer segment or group or in the defined 7 geographical area at a comparable price from one or more 8 providers other than the electric utility or an affiliate of 9 the electric utility, and the electric utility has lost or 10 there is a reasonable likelihood that the electric utility 11 will lose business for the service to the other provider or 12 providers; provided, that the Commission may not declare the 13 provision of electric power and energy to be competitive 14 pursuant to this subsection with respect to (i) any retail 15 customer or group of retail customers that is not eligible 16 pursuant to Section 16-104 to take delivery services provided 17 by the electric utility and (ii) any residential and small 18 commercial retail customers prior to the last date on which 19 such customers are required to pay transition charges. In 20 determining whether to grant or deny a petition to declare 21 the provision of electric power and energy competitive, the 22 Commission shall consider, in applying the above criteria, 23 whether there is adequate transmission capacity into the 24 service area of the petitioning electric utility to make 25 electric power and energy reasonably available to the 26 customer segment or group or in the defined geographical area 27 from one or more providers other than the electric utility or 28 an affiliate of the electric utility, in accordance with this 29 subsection. The Commission shall make its determination and 30 issue its final order declaring or refusing to declare the 31 service to be a competitive service within 120 days following 32 the date that the petition is filed, or otherwise the 33 petition shall be deemed to be granted; provided, that if the 34 petition is deemed to be granted by operation of law, the1HB0362 Enrolled -51- LRB9002496JScc 1 Commission shall not thereby be precluded from finding and 2 ordering, in a subsequent proceeding initiated by the 3 Commission, and after notice and hearing, that the service is 4 not competitive based on the criteria set forth in this 5 subsection. 6 (b) Any customer except a customer identified in 7 subsection (c) of Section 16-103 who is taking a tariffed 8 service that is declared to be a competitive service pursuant 9 to subsection (a) of this Section shall be entitled to 10 continue to take the service from the electric utility on a 11 tariffed basis for a period of 3 years following the date 12 that the service is declared competitive, or such other 13 period as is stated in the electric utility's tariff pursuant 14 to Section 16-110. This subsection shall not require the 15 electric utility to offer or provide on a tariffed basis any 16 service to any customer (except those customers identified in 17 subsection (c) of Section 16-103) that was not taking such 18 service on a tariffed basis on the date the service was 19 declared to be competitive. 20 (c) If the Commission denies a petition to declare a 21 service to be a competitive service, or determines in a 22 separate proceeding that a service is not competitive based 23 on the criteria set forth in subsection (a), the electric 24 utility may file a new petition no earlier than 6 months 25 following the date of the Commission's order, requesting, on 26 the basis of additional or different facts and circumstances, 27 that the service be declared to be a competitive service. 28 (d) The Commission shall not deny a petition to declare 29 a service to be a competitive service, and shall not find 30 that a service is not a competitive service, on the grounds 31 that it has previously denied the petition of another 32 electric utility to declare the same or a similar service to 33 be a competitive service or has previously determined that 34 the same or a similar service provided by another electric1HB0362 Enrolled -52- LRB9002496JScc 1 utility is not a competitive service. 2 (e) An electric utility may declare a service, other 3 than delivery services or the provision of electric power or 4 energy, to be competitive by filing with the Commission at 5 least 14 days prior to the date on which the service is to 6 become competitive a notice describing the service that is 7 being declared competitive and the date on which it will 8 become competitive; provided, that any customer who is taking 9 a tariffed service that is declared to be a competitive 10 service pursuant to this subsection (e) shall be entitled to 11 continue to take the service from the electric utility on a 12 tariffed basis until the electric utility files, and the 13 Commission grants, a petition to declare the service 14 competitive in accordance with subsection (a) of this 15 Section. The Commission shall be authorized to find and 16 order, after notice and hearing in a subsequent proceeding 17 initiated by the Commission, that any service declared to be 18 competitive pursuant to this subsection (e) is not 19 competitive in accordance with the criteria set forth in 20 subsection (a) of this Section. 21 (220 ILCS 5/16-114 new) 22 Sec. 16-114. Recovery of decommissioning charges. On or 23 before April 1, 1999, each electric utility owning an 24 interest in, or having responsibility as a matter of contract 25 or statute for decommissioning costs as defined in Section 26 8-508.1 of, one or more nuclear power plants shall file with 27 the Commission a tariff or tariffs conforming to the 28 provisions of Section 9-201.5 of this Act, to be applicable 29 to each and every kilowatt-hour of electricity delivered or 30 sold at retail in the electric utility's service area, 31 including, but not limited to, sales by the electric utility 32 to tariffed services retail customers, sales by the electric 33 utility to retail customers pursuant to special contracts or1HB0362 Enrolled -53- LRB9002496JScc 1 other negotiated arrangements, sales by alternative retail 2 electric suppliers, and sales by an electric utility other 3 than the electric utility in whose service area the retail 4 customer is located; provided, however, that for a user that 5 obtained electric power and energy from its own cogeneration 6 or self-generation facilities on or before January 1, 1997, 7 and subsequently takes services from an alternative retail 8 electric supplier or an electric utility other than the 9 electric utility in whose service area the user is located 10 for any portion of its electric power and energy requirements 11 formerly obtained from those facilities, the tariff required 12 by this Section shall not be applicable in any year to that 13 portion of the user's electric power and energy requirements 14 formerly obtained from those facilities, provided that for 15 the purposes of this Section, such portion shall not exceed 16 the average number of kilowatt-hours per year obtained from 17 the cogeneration or self-generation facilities during the 3 18 years prior to the date on which the user became eligible for 19 delivery services. 20 The Commission shall determine whether the tariff meets 21 the requirements of Sections 9-201 and 9-201.5 and of this 22 Section, and shall permit the electric utility's tariff 23 together with any modifications made after hearing to become 24 effective no later than October 1, 1999. In making its 25 determination, the Commission shall retain the authority it 26 possessed prior to the effective date of this amendatory Act 27 of 1997 to make jurisdictional allocations of decommissioning 28 expense recovery. The tariff filed pursuant to this Section 29 shall be applicable to any user taking some or all of its 30 electric power and energy requirements from an alternative 31 retail electric supplier or from an electric utility other 32 than the electric utility in whose service area the user is 33 located on and after the date that the user becomes eligible 34 for delivery services in accordance with Section 16-104. If1HB0362 Enrolled -54- LRB9002496JScc 1 the electric utility has in effect as of the effective date 2 of this amendatory Act of 1997 a decommissioning rate as 3 defined in Section 9-201.5 conforming to the requirements of 4 that Section, the tariff or tariffs required by this Section 5 shall if the electric utility requests be consistent with its 6 decommissioning rate that is already in effect; provided, 7 that the tariff or tariffs filed pursuant to this Section 8 shall provide for the removal from base rates of any 9 decommissioning costs that are included in the electric 10 utility's base rates and their inclusion in the tariff or 11 tariffs required by this Section. The tariff required by this 12 Section shall be included by the Commission in the reviews 13 required by subsection (d) of Section 9-201.5. 14 (220 ILCS 5/16-115 new) 15 Sec. 16-115. Certification of alternative retail electric 16 suppliers. 17 (a) Any alternative retail electric supplier must obtain 18 a certificate of service authority from the Commission in 19 accordance with this Section before serving any retail 20 customer or other user located in this State. An alternative 21 retail electric supplier may request, and the Commission may 22 grant, a certificate of service authority for the entire 23 State or for a specified geographic area of the State. 24 (b) An alternative retail electric supplier seeking a 25 certificate of service authority shall file with the 26 Commission a verified application containing information 27 showing that the applicant meets the requirements of this 28 Section. The alternative retail electric supplier shall 29 publish notice of its application in the official State 30 newspaper within 10 days following the date of its filing. 31 No later than 45 days after the application is properly filed 32 with the Commission, and such notice is published, the 33 Commission shall issue its order granting or denying the1HB0362 Enrolled -55- LRB9002496JScc 1 application. 2 (c) An application for a certificate of service 3 authority shall identify the area or areas in which the 4 applicant intends to offer service and the types of services 5 it intends to offer. Applicants that seek to serve 6 residential or small commercial retail customers within a 7 geographic area that is smaller than an electric utility's 8 service area shall submit evidence demonstrating that the 9 designation of this smaller area does not violate Section 10 16-115A. An applicant that seeks to serve residential or 11 small commercial retail customers may state in its 12 application for certification any limitations that will be 13 imposed on the number of customers or maximum load to be 14 served. _______ 15 (d) The Commission shall grant the application for a 16 certificate of service authority if it makes the findings set 17 forth in this subsection based on the verified application 18 and such other information as the applicant may submit: 19 (1) That the applicant possesses sufficient 20 technical, financial and managerial resources and 21 abilities to provide the service for which it seeks a 22 certificate of service authority. In determining the 23 level of technical, financial and managerial resources 24 and abilities which the applicant must demonstrate, the 25 Commission shall consider (i) the characteristics, 26 including the size and financial sophistication, of the 27 customers that the applicant seeks to serve, and (ii) 28 whether the applicant seeks to provide electric power and 29 energy using property, plant and equipment which it owns, 30 controls or operates; 31 (2) That the applicant will comply with all 32 applicable federal, State, regional and industry rules, 33 policies, practices and procedures for the use, 34 operation, and maintenance of the safety, integrity and 1HB0362 Enrolled -56- LRB9002496JScc 1 reliability, of the interconnected electric transmission 2 system; _______ 3 (3) That the applicant will only provide service to 4 retail customers in an electric utility's service area 5 that are eligible to take delivery services under this 6 Act; ____ 7 (4) That the applicant will comply with such 8 informational or reporting requirements as the Commission 9 may by rule establish and provide the information 10 required by Section 16-112. Any data related to 11 contracts for the purchase and sale of electric power and 12 energy shall be made available for review by the Staff of 13 the Commission on a confidential and proprietary basis 14 and only to the extent and for the purposes which the 15 Commission determines are reasonably necessary in order 16 to carry out the purposes of this Act; 17 (5) That if the applicant, its corporate affiliates 18 or the applicant's principal source of electricity (to 19 the extent such source is known at the time of the 20 application) owns or controls facilities, for public use, 21 for the transmission or distribution of electricity to 22 end-users within a defined geographic area to which 23 electric power and energy can be physically and 24 economically delivered by the electric utility or 25 utilities in whose service area or areas the proposed 26 service will be offered, the applicant, its corporate 27 affiliates or principal source of electricity, as the 28 case may be, provides delivery services to the electric 29 utility or utilities in whose service area or areas the 30 proposed service will be offered that are reasonably 31 comparable to those offered by the electric utility, and 32 provided further, that the applicant agrees to certify 33 annually to the Commission that it is continuing to 34 provide such delivery services and that it has not 1HB0362 Enrolled -57- LRB9002496JScc 1 knowingly assisted any person or entity to avoid the 2 requirements of this Section. For purposes of this 3 subparagraph, "principal source of electricity" shall 4 mean a single source that supplies at least 65% of the 5 applicant's electric power and energy, and the purchase 6 of transmission and distribution services pursuant to a 7 filed tariff under the jurisdiction of the Federal Energy 8 Regulatory Commission or a state public utility 9 commission shall not constitute control of access to the 10 provider's transmission and distribution facilities; 11 (6) With respect to an applicant that seeks to 12 serve residential or small commercial retail customers, 13 that the area to be served by the applicant and any 14 limitations it proposes on the number of customers or 15 maximum amount of load to be served meet the provisions 16 of Section 16-115A, provided, that the Commission can 17 extend the time for considering such a certificate 18 request by up to 90 days, and can schedule hearings on 19 such a request; 20 (7) That the applicant meets the requirements of 21 subsection (a) of Section 16-128; and 22 (8) That the applicant will comply with all other 23 applicable laws and regulations. 24 (e) A retail customer that owns a cogeneration or 25 self-generation facility and that seeks certification only to 26 provide electric power and energy from such facility to 27 retail customers at separate locations which customers are 28 both (i) owned by, or a subsidiary or other corporate 29 affiliate of, such applicant and (ii) eligible for delivery 30 services, shall be granted a certificate of service authority 31 upon filing an application and notifying the Commission that 32 it has entered into an agreement with the relevant electric 33 utilities pursuant to Section 16-118. 34 (f) The Commission shall have the authority to 1HB0362 Enrolled -58- LRB9002496JScc 1 promulgate rules and regulations to carry out the provisions 2 of this Section. On or before May 1, 1999, the Commission 3 shall adopt a rule or rules applicable to the certification 4 of those alternative retail electric suppliers that seek to 5 serve only nonresidential retail customers with maximum 6 electrical demands of one megawatt or more which shall 7 provide for (i) expedited and streamlined procedures for 8 certification of such alternative retail electric suppliers 9 and (ii) specific criteria which, if met by any such 10 alternative retail electric supplier, shall constitute the 11 demonstration of technical, financial and managerial 12 resources and abilities to provide service required by 13 subsection (d) (1) of this Section, such as a requirement to 14 post a bond or letter of credit, from a responsible surety or 15 financial institution, of sufficient size for the nature and 16 scope of the services to be provided; demonstration of 17 adequate insurance for the scope and nature of the services 18 to be provided; and experience in providing similar services 19 in other jurisdictions. 20 (220 ILCS 5/16-115A new) 21 Sec. 16-115A. Obligations of alternative retail electric 22 suppliers. 23 (a) An alternative retail electric supplier shall: 24 (i) comply with the requirements imposed on public 25 utilities by Sections 8-201 through 8-207, 8-301, 8-505 26 and 8-507 of this Act, to the extent that these Sections 27 have application to the services being offered by the 28 alternative retail electric supplier; and 29 (ii) continue to comply with the requirements for 30 certification stated in subsection (d) of Section 16-115. 31 (b) An alternative retail electric supplier shall obtain 32 verifiable authorization from a customer, in a form or manner 33 approved by the Commission consistent with Section 2EE of the1HB0362 Enrolled -59- LRB9002496JScc 1 Consumer Fraud