Bill Text: IL SB3696 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Public Utilities Act. Provides that a participating gas utility may elect to recover its natural gas utility service costs through a formula rate approved by the Illinois Commerce Commission. Provides that the Commission shall have the authority to conduct hearings concerning the prudence and reasonableness of the service costs incurred by the utility to be recovered. Provides that a gas public utility may apply for a certificate of public convenience and necessity to increase its gas service territory and extend its gas distribution system to serve a designated hardship area. Provides that the Illinois Commerce Commission shall, after notice and hearing, grant a certificate of public convenience and necessity if, based upon the application filed with the Commission and the evidentiary record, the Commission finds that specified criteria are satisfied. Provides that the Commission shall issue its decision with findings of fact and conclusions of law granting or denying the application no later than 120 days after the application is filed. Defines terms. Effective immediately.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB3696 Detail]

Download: Illinois-2019-SB3696-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3696

Introduced 2/14/2020, by Sen. Linda Holmes

SYNOPSIS AS INTRODUCED:
220 ILCS 5/8-406.2 new
220 ILCS 5/9-220.4 new

Amends the Public Utilities Act. Provides that a participating gas utility may elect to recover its natural gas utility service costs through a formula rate approved by the Illinois Commerce Commission. Provides that the Commission shall have the authority to conduct hearings concerning the prudence and reasonableness of the service costs incurred by the utility to be recovered. Provides that a gas public utility may apply for a certificate of public convenience and necessity to increase its gas service territory and extend its gas distribution system to serve a designated hardship area. Provides that the Illinois Commerce Commission shall, after notice and hearing, grant a certificate of public convenience and necessity if, based upon the application filed with the Commission and the evidentiary record, the Commission finds that specified criteria are satisfied. Provides that the Commission shall issue its decision with findings of fact and conclusions of law granting or denying the application no later than 120 days after the application is filed. Defines terms. Effective immediately.
LRB101 18658 SPS 68113 b
FISCAL NOTE ACT MAY APPLY

A BILL FOR

SB3696LRB101 18658 SPS 68113 b
1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Public Utilities Act is amended by adding
5Sections 8-406.2 and 9-220.4 as follows:
6 (220 ILCS 5/8-406.2 new)
7 Sec. 8-406.2. Certificate of public convenience and
8necessity; extension of utility service area and facilities to
9serve designated hardship areas.
10 (a) This Section is intended to provide a mechanism by
11which a gas public utility may extend its service territory and
12gas distribution system to provide service to designated
13low-income areas whose residents do not have access to natural
14gas service and must purchase more costly alternatives to
15satisfy their energy needs.
16 (b) For purposes of this Section:
17 (1) "Designated hardship area" means a defined
18 geographic area described by the applicant gas utility that
19 meets the following requirements:
20 (A) the area is designated as a qualified census
21 tract by the U.S. Department of Housing and Urban
22 Development as published in the most current Federal
23 Register; if the U.S. Department of Housing and Urban

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1 Development ceases to make this designation, then at
2 least 25% of the households in the area are at or below
3 the poverty level; and
4 (B) the area is not currently served by a gas
5 utility.
6 (2) "Hardship area facilities" means all gas
7 distribution system facilities that are proposed to be
8 constructed or extended and used to serve the designated
9 hardship area, through and including retail gas meters.
10 "Hardship area facilities" includes the capacity to
11 address reasonably foreseeable growth in areas adjacent to
12 or in the vicinity of the designated hardship area.
13 (c) A gas public utility may apply for a certificate of
14public convenience and necessity pursuant to this Section to
15increase its gas service territory and extend its gas
16distribution system to serve a designated hardship area. An
17application under this Section shall include all of the
18following:
19 (1) a description of the designated hardship area and
20 its relationship to the existing gas distribution system of
21 the applicant;
22 (2) a showing that the designated hardship area meets
23 the criteria of paragraph (1) of subsection (b) of this
24 Section;
25 (3) a description of the hardship area facilities
26 proposed to serve the designated hardship area;

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1 (4) a projection of the costs to construct and deploy
2 the hardship area facilities;
3 (5) a statement indicating that the gas distribution
4 utility has received written indications of interest from
5 at least 50% of the customers within the boundaries of the
6 designated hardship area demonstrating an interest shown
7 in obtaining gas service; and
8 (6) a showing that the estimated cost to construct and
9 deploy the hardship area facilities is equal to or less
10 than 250% of the amount allowed under the gas utilities'
11 then current tariffs to provide standard service to extend
12 main and services.
13 (d) The Commission shall, after notice and hearing, grant a
14certificate of public convenience and necessity under this
15Section if, based upon the application filed with the
16Commission and the evidentiary record, the Commission finds
17that all of the following criteria are satisfied:
18 (1) the area to be served is a designated hardship
19 area;
20 (2) the proposed hardship area facilities will provide
21 adequate, reliable, and efficient gas delivery service to
22 the customers within the designated hardship area and are
23 the least-cost means of providing such gas delivery service
24 to these customers;
25 (3) the public utility is capable of efficiently
26 managing and supervising the construction of the hardship

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1 area facilities and has taken sufficient action to ensure
2 adequate and efficient construction and supervision of the
3 construction;
4 (4) the public utility is capable of financing the
5 construction of the hardship area facilities without
6 significant adverse financial consequences for the utility
7 or its customers; and
8 (5) the estimated cost to construct and deploy the
9 hardship area facilities is equal to or less than 250% of
10 the amount allowed under the gas utilities then current
11 tariffs to provide standard service to extend main and
12 services.
13 (e) The Commission shall issue its decision with findings
14of fact and conclusions of law granting or denying the
15application no later than 120 days after the application is
16filed.
17 (220 ILCS 5/9-220.4 new)
18 Sec. 9-220.4. Natural gas utility formula rate.
19 (a) As used in this Section:
20 "Participating gas utility" means a public utility that
21provides natural gas distribution services to more than 150,000
22retail customers in Illinois that voluntarily elects to
23participate.
24 "ICC Form 21" means the Annual Report of Electric Utilities
25and/or Natural Gas Utilities to the Illinois Commerce

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1Commission that natural gas utilities are required to file with
2the Illinois Commerce Commission under Section 5-109 of the
3Public Utilities Act.
4 "FERC Form 1" means the Annual Report of Major Electric
5Utilities, Licensees and Others that electric utilities are
6required to file with the Federal Energy Regulatory Commission
7under the Federal Power Act, Sections 3, 4(a), 304, and 209,
8modified as necessary to be consistent with 83 Ill. Adm. Code
9415 as of May 1, 2011.
10 "FERC Form 2" means the Annual Report of Major Natural Gas
11Companies that natural gas utilities are required to file with
12the Federal Energy Regulatory Commission under the Natural Gas
13Act, Sections 10(a) and 16, and 18 CFR Parts 260.1 and 260.300,
14modified as necessary to be consistent with 83 Ill. Adm. Code
15505 as of August 1, 2019.
16 (b) A participating gas utility may elect to recover its
17natural gas delivery services costs through a formula rate
18approved by the Commission, which shall specify the cost
19components that form the basis of the rate charged to customers
20with sufficient specificity to operate in a standardized manner
21and be updated annually with transparent information that
22reflects the utility's actual costs to be recovered during the
23applicable rate year, which is the period beginning with the
24first billing day of January and extending through the last
25billing day of the following December.
26 If the participating gas utility recovers a portion of its

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1costs through automatic adjustment clause tariffs other than
2those authorized by Section 9-220.3 of this Act on the
3effective date of this amendatory Act of the 101st General
4Assembly, the participating gas utility may elect to continue
5to recover these costs through such tariffs, but such costs
6shall not be recovered through the formula rate. Automatic
7adjustment clause tariffs providing for the recovery of costs
8that the participating gas utility elects to be included in the
9formula rate will be suspended by operation of law as of the
10effective date of the initial formula rate recovering such
11costs, provided that neither such suspension nor the formula
12rate shall alter or affect reconciling charges or credits under
13such automatic adjustment clause tariffs that arise from
14periods prior to the beginning of the first calendar year to be
15reconciled under subsection (c). Such suspended automatic
16adjustment clause tariffs shall again become effective, by
17operation of law and without any further order of the
18Commission, as of the date when a formula rate recovering such
19costs is no longer effective. If the participating gas utility,
20prior to the effective date of this amendatory Act of the 101st
21General Assembly, filed natural gas delivery services tariffs
22with the Commission pursuant to Section 9-201 of this Act that
23are still pending on the effective date of this amendatory Act
24of the 101st General Assembly, the participating gas utility
25shall, at the time it files its formula rate tariff with the
26Commission, also file a notice of withdrawal with the

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1Commission to withdraw the natural gas delivery services
2tariffs previously filed in accordance with Section 9-201 of
3this Act. Upon receipt of such notice, the Commission shall
4dismiss with prejudice any docket that had been initiated to
5investigate the natural gas delivery services tariffs filed in
6accordance with Section 9-201, and such tariffs and the record
7related thereto shall not be the subject of any further
8hearing, investigation, or proceeding of any kind related to
9rates for natural gas delivery services.
10 The formula rate shall be implemented through a tariff
11filed with the Commission consistent with the provisions of
12this subsection (b) that shall be applicable to all natural gas
13delivery services customers. The Commission shall initiate and
14conduct an investigation of the tariff in a manner consistent
15with the provisions of this subsection (b) and the provisions
16of Article IX of this Act to the extent they do not conflict
17with this subsection (b). The formula rate shall remain in
18effect at the discretion of the utility.
19 The formula rate approved by the Commission shall do the
20following:
21 (1) Provide for the recovery of the utility's actual
22 costs of natural gas delivery services that are prudently
23 incurred and reasonable in amount consistent with
24 Commission practice and law. The sole fact that a cost
25 differs from that incurred in a prior calendar year or that
26 an investment is different from that made in a prior

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1 calendar year shall not imply the imprudence or
2 unreasonableness of that cost or investment.
3 (2) Reflect the utility's actual year-end capital
4 structure for the applicable calendar year, excluding
5 goodwill, unless that capital structure is shown to be
6 imprudent and unreasonable consistent with Commission
7 practice and law.
8 (3) Include a cost of equity, which shall be calculated
9 as the sum of the following:
10 (A) the average for the applicable calendar year of
11 the monthly average yields of 30-year U.S. Treasury
12 bonds published by the Board of Governors of the
13 Federal Reserve System in its weekly H.15 Statistical
14 Release or successor publication multiplied by
15 0.59491; and
16 (B) 771.20 basis points.
17 At such time as the Board of Governors of the Federal
18 Reserve System ceases to include the monthly average yields
19 of 30-year U.S. Treasury bonds in its weekly H.15
20 Statistical Release or successor publication, the monthly
21 average yields of the U.S. Treasury bonds then having the
22 longest duration published by the Board of Governors in its
23 weekly H.15 Statistical Release or successor publication
24 shall instead be used for purposes of this paragraph (3).
25 (4) Permit and set forth protocols, subject to a
26 determination of prudence and reasonableness consistent

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1 with Commission practice and law, for the following:
2 (A) irrespective of the form of the award, recovery
3 of the expense of incentive compensation that is
4 awarded based on non-financial criteria such as the
5 achievement of operational metrics, including metrics
6 related to budget controls, safety, customer service,
7 efficiency and productivity, and environmental
8 compliance. The expense of incentive compensation that
9 is awarded based on net income or an affiliate's
10 earnings per share shall not be recoverable under the
11 formula rate;
12 (B) recovery of pension and other post-employment
13 benefits expense, provided that such costs are
14 supported by an actuarial study;
15 (C) recovery of severance costs, provided that if
16 the amount is over $3,700,000, then the full amount
17 shall be amortized consistent with subparagraph (F) of
18 this paragraph (4);
19 (D) investment return at a rate equal to the
20 participating gas utility's weighted average cost of
21 long-term debt, on the pension assets as, and in the
22 amount, reported in Account 182.3 and 186 (or in such
23 other Account or Accounts as such asset may
24 subsequently be recorded) of the utility's most
25 recently filed ICC Form 21, FERC Form 2, or FERC Form 1
26 (to the extent applicable to gas delivery or common

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1 costs a portion of which are allocable to gas
2 delivery), as applicable, net of deferred tax
3 benefits;
4 (E) recovery of the expenses related to the
5 Commission proceeding under this subsection (b) to
6 approve this formula rate and initial rates or to
7 subsequent proceedings related to the formula,
8 provided that the recovery shall be amortized over a
9 3-year period; recovery of expenses related to the
10 annual Commission proceedings under subsection (c) of
11 this Section to review the inputs to the formula rate
12 shall be expensed and recovered through the formula
13 rate;
14 (F) amortization over a 5-year period of the full
15 amount of each charge or credit that exceeds $3,700,000
16 and that relates to a workforce reduction program's
17 severance costs, changes in accounting rules, changes
18 in law, compliance with any Commission-initiated
19 audit, or other similar expense, provided that any
20 unamortized balance shall be reflected in rate base.
21 For purposes of this subparagraph (F), changes in law
22 includes any enactment, repeal, or amendment in a law,
23 ordinance, rule, regulation, interpretation, permit,
24 license, consent, or order, including those relating
25 to taxes, accounting, or to environmental matters, or
26 in the interpretation or application thereof by any

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1 governmental authority occurring after the effective
2 date of this amendatory Act of the 101st General
3 Assembly;
4 (G) recovery of existing regulatory assets over
5 the periods previously authorized by the Commission;
6 (H) historical weather normalized billing
7 determinants; and
8 (I) allocation methods for common costs.
9 (5) Provide for recovery of certain adjustments or
10 additions to amounts included in the utility's ICC Form 21
11 as directed in the participating utility's most recent
12 final Commission rate order relating to the following:
13 (A) additions to rate base that reflect an
14 allocated portion of the plant assets on the books and
15 records of an affiliated shared service company,
16 subject to adjustments for associated accumulated
17 depreciation and accumulated deferred income taxes,
18 that are used to support the operations of the utility
19 and represent assets that would otherwise be required
20 if the utility were not receiving services from the
21 shared service company;
22 (B) removal from rate base of any asset created to
23 adjust the basis of the utility's natural gas inventory
24 resulting from a decrement in inventory for tax
25 purposes not reflected for the utility's book basis;
26 and

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1 (C) recovery of existing regulatory assets over
2 the periods previously authorized by the Commission,
3 including without limitation any regulatory asset
4 created to amortize an allocable portion of the
5 utility's shared service company's unrecognized gain
6 or loss on pension and other post-employment benefits
7 assets and prior service costs.
8 (6) Provide that if the participating gas utility's
9 earned rate of return on common equity related to the
10 provision of natural gas delivery services for the prior
11 rate year (calculated using costs and capital structure
12 approved by the Commission as provided in paragraphs (2)
13 and (3) of this subsection (b), consistent with this
14 Section, in accordance with Commission rules and orders,
15 including, but not limited to, adjustments for goodwill,
16 and after any Commission-ordered disallowances and taxes)
17 is higher than the rate of return on common equity
18 calculated pursuant to paragraph (3) of this subsection (b)
19 then the participating utility shall apply a credit through
20 the formula rate that reflects an amount equal to the value
21 of that portion of the earned rate of return on common
22 equity that is higher than the rate of return on common
23 equity calculated pursuant to paragraph (3) of this
24 subsection (b) for the prior rate year, adjusted for taxes.
25 If the participating utility's earned rate of return on
26 common equity related to the provision of natural gas

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1 delivery services for the prior rate year (calculated using
2 costs and capital structure approved by the Commission as
3 provided in paragraphs (2) and (3) of this subsection (b),
4 consistent with this Section, in accordance with
5 Commission rules and orders, including, but not limited to,
6 adjustments for goodwill, and after any Commission-ordered
7 disallowances and taxes) is less than the return on common
8 equity calculated pursuant to paragraph (3) of this
9 subsection (b), then the participating utility shall apply
10 a charge through the formula rate that reflects an amount
11 equal to the value of that portion of the earned rate of
12 return on common equity that is less than the rate of
13 return on common equity calculated pursuant to paragraph
14 (3) of this subsection (b) for the prior rate year,
15 adjusted for taxes.
16 (7) Provide for an annual reconciliation, as described
17 in subsections (c) and (e) of this Section, with interest,
18 of the revenue requirement reflected in rates for each
19 calendar year, beginning with the calendar year in which
20 the utility files its formula rate tariff pursuant to
21 subsection (b) of this Section, with what the revenue
22 requirement would have been had the actual cost information
23 for the applicable calendar year been available at the
24 filing date.
25 The participating gas utility shall file, together with its
26tariff, final data based on its most recently filed ICC Form 21

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1FERC Form 2, or FERC Form 1 (to the extent applicable to gas
2delivery or common costs a portion of which are allocable to
3gas delivery), as applicable, subject to the adjustments
4specified in subsection (b), plus projected plant additions and
5correspondingly updated depreciation reserve and expense for
6the calendar year in which the tariff and data are filed, that
7shall populate the formula rate and set the initial natural gas
8delivery services rates under the formula. The participating
9gas utility may also file revisions to other tariffs then in
10effect that refer to a base rate or base rate case to conform
11those references to the applicable formula rates or rate
12setting process. Any changes taking effect after December 31,
132019 to the manner in which costs, revenues, assets, and
14liabilities are classified, characterized, or allocated for
15the purposes of reporting on ICC Form 21 shall be incorporated
16into the formula rate only if those changes are consistent with
17the manner in which those costs, revenues, assets, and
18liabilities be classified, characterized, or allocated for the
19purposes of reporting on FERC Form 2 or FERC Form 1 (to the
20extent applicable to gas delivery or common costs a portion of
21which are allocable to gas delivery). Nothing in this Section
22is intended to allow costs that are not otherwise recoverable
23to be recoverable by virtue of inclusion in ICC Form 21, FERC
24Form 2, or FERC Form 1 (to the extent applicable to gas
25delivery or common costs a portion of which are allocable to
26gas delivery), as applicable.

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1 After the participating gas utility files its proposed
2formula rate structure and protocols and initial rates, the
3Commission shall initiate a docket to review the filing. The
4Commission shall enter an order approving, or approving as
5modified, the formula rate structure and protocols, the initial
6rates, and any conforming revisions to other tariffs as just
7and reasonable within 270 days after the date on which the
8tariff was filed. Such review shall be based on the same
9evidentiary standards, including, but not limited to, those
10concerning the prudence and reasonableness of the costs
11incurred by the utility, the Commission applies in a hearing to
12review a filing for a general increase in rates under Article
13IX of this Act. The formula rate structure and protocols,
14initial rates, and any conforming revisions to other tariffs
15shall take effect within 30 days after the Commission's order
16approving the formula rate tariff.
17 Until the Commission approves a different rate design and
18cost allocation pursuant to subsection (d) of this Section,
19rate design and cost allocation across customer classes shall
20be consistent with the Commission's most recent order regarding
21the participating utility's request for a general increase in
22its delivery services rates.
23 Subsequent changes to the formula rate structure or
24protocols shall be made as set forth in Section 9-201 of this
25Act, but nothing in this subsection (b) is intended to limit
26the Commission's authority under Article IX and other

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1provisions of this Act to initiate an investigation of a
2participating gas utility's formula rate tariff, provided that
3any such changes shall be consistent with paragraphs (1)
4through (7) of this subsection (b). Any change ordered by the
5Commission shall be made at the same time new rates take effect
6following the Commission's next order in accordance with
7subsection (c) of this Section, provided that the new rates
8take effect no less than 30 days after the date on which the
9Commission issues an order adopting the change.
10 If the formula rate is terminated, the then current rates
11shall remain in effect until new rates are set in accordance
12with Article IX of this Act, subject to retroactive rate
13adjustment, with interest, to reconcile rates charged with
14actual costs.
15 (c) Subsequent to the Commission's issuance of an order
16approving the participating gas utility's formula rate
17structure and protocols, and initial rates under subsection (b)
18of this Section, the participating gas utility shall file, on
19or before May 1 of each year, with the Chief Clerk of the
20Commission its updated cost inputs to the formula rate for the
21applicable rate year and the corresponding new charges. Each
22such filing shall conform to the following requirements and
23include the following information:
24 (1) The inputs to the formula rate for the applicable
25 rate year shall be based on final historical data reflected
26 in the participating gas utility's most recently filed

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1 annual ICC Form 21, FERC Form 2, or FERC Form 1 (to the
2 extent applicable to gas delivery or common costs a portion
3 of which are allocable to gas delivery), as applicable,
4 subject to adjustments specified in subsection (b) of this
5 Act, plus projected plant additions and correspondingly
6 updated depreciation reserve and expense for the calendar
7 year in which the inputs are filed. The filing shall also
8 include a reconciliation of the revenue requirement that
9 was in effect for the prior rate year (as set by the cost
10 inputs for the prior rate year) with the actual revenue
11 requirement for the prior rate year (determined using a
12 year-end rate base) that uses amounts reflected in the
13 applicable ICC Form 21, FERC Form 2, or FERC Form 1 (to the
14 extent applicable to gas delivery or common costs a portion
15 of which are allocable to gas delivery), as applicable,
16 subject to adjustments specified in subsection (b) of this
17 Act, that reports the actual costs for the prior rate year.
18 Any over-collection or under-collection indicated by such
19 reconciliation shall be reflected as a credit against, or
20 recovered as an additional charge to, respectively, with
21 interest calculated at a rate equal to the participating
22 gas utility's weighted average cost of capital approved by
23 the Commission for the prior rate year, the charges for the
24 applicable rate year. Provided, however, that the
25 reconciliations of the revenue requirement that was in
26 effect for a calendar year in which the participating gas

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1 utility did not have a formula rate tariff approved in
2 accordance with subsection (b) of this Section effective
3 throughout the calendar year shall reconcile (i) the sum of
4 (x) the base rate revenue requirement or requirements
5 established by the rate order or orders in effect from time
6 to time during such calendar year (weighted, as
7 applicable), (y) the amount collected by the participating
8 gas utility via a surcharge tariff in accordance with
9 Section 9-220.3 of the Act during such calendar year on
10 account of qualifying infrastructure investment (as that
11 term is defined in subsection (b) of Section 9-220.3) that
12 occurred during such calendar year, and (z) the total
13 amount collected under other automatic adjustment clause
14 tariffs that the participating gas utility elects to be
15 included in the formula rate excluding any reconciliation
16 charges or credits applicable to periods prior to the
17 beginning of the first calendar year to be reconciled under
18 subsection (c); with (ii) the revenue requirement
19 determined using a year-end rate base for that calendar
20 year calculated pursuant to the formula rate using actual
21 costs for that year as reflected in the applicable ICC Form
22 21, FERC Form 2, or FERC Form 1 (to the extent applicable
23 to gas delivery or common costs a portion of which are
24 allocable to gas delivery), as applicable, subject to
25 adjustments specified in subsection (b). Such
26 reconciliations are not intended to provide for the

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1 recovery of costs previously excluded from rates based on a
2 prior Commission order finding of imprudence or
3 unreasonableness. Each reconciliation shall be certified
4 by the participating gas utility in the same manner that
5 ICC Form 21, FERC Form 2, or FERC Form 1 (to the extent
6 applicable to gas delivery or common costs a portion of
7 which are allocable to gas delivery), as applicable, is
8 certified. The filing shall also include the charge or
9 credit, if any, resulting from the calculation required by
10 paragraph (7) of subsection (b) of this Section.
11 Notwithstanding anything that may be to the contrary, the
12 intent of the reconciliation is to ultimately reconcile the
13 revenue requirement reflected in base rates, revenues
14 collected under surcharge tariffs in accordance with
15 Section 9-220.3 of this Act to the extent related to
16 investment in the plant that occurred during such calendar
17 year, and revenues collected under other automatic
18 adjustment tariffs that the utility elects to include in
19 formula rates (excluding reconciling charges or credits
20 arising from prior years) beginning with the calendar year
21 in which the participating gas utility files its formula
22 rate tariff in accordance with subsection (b) of this
23 Section, with what the revenue requirement determined
24 using a year-end rate base for the applicable calendar year
25 would have been had the actual cost information for the
26 applicable calendar year been available at the filing date.

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1 (2) The new charges shall take effect beginning on the
2 first billing day of the following January billing period
3 and remain in effect through the last billing day of the
4 next December billing period regardless of whether the
5 Commission enters upon a hearing in accordance with this
6 subsection (c).
7 (3) The filing shall include relevant and necessary
8 data and documentation for the applicable rate year that is
9 consistent with the Commission's rules applicable to a
10 filing for a general increase in rates or any rules adopted
11 by the Commission to implement this Section. Normalization
12 adjustments shall not be required. Notwithstanding any
13 other provision of this Section or Act or any rule or other
14 requirement adopted by the Commission, a participating gas
15 utility with more than one rate zone shall not be required
16 to file a separate set of such data and documentation for
17 each rate zone and may combine such data and documentation
18 into a single set of schedules.
19 Within 45 days after the participating gas utility files
20its annual update of cost inputs to the formula rate, the
21Commission shall have the authority, either upon complaint or
22its own initiative, but with reasonable notice, to enter upon a
23hearing concerning the prudence and reasonableness of the costs
24incurred by the utility to be recovered during the applicable
25rate year that are reflected in the inputs to the formula rate
26derived from the utility's ICC Form 21, FERC Form 2, or FERC

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1Form 1 (to the extent applicable to gas delivery or common
2costs a portion of which are allocable to gas delivery), as
3applicable, subject to adjustments specified in subsection (b)
4of this Act. During the course of the hearing, each objection
5shall be stated with particularity and evidence provided in
6support thereof, after which the utility shall have the
7opportunity to rebut the evidence. Discovery shall be allowed
8consistent with the Commission's Rules of Practice, which Rules
9shall be enforced by the Commission or the assigned
10administrative law judge. The Commission shall apply the same
11evidentiary standards, including, but not limited to, those
12concerning the prudence and reasonableness of the costs
13incurred by the participating gas utility, in the hearing as it
14would apply in a hearing to review a filing for a general
15increase in rates under Article IX of this Act. The Commission
16shall not, however, have the authority in a proceeding under
17this subsection (c) to consider or order any changes to the
18structure or protocols of the formula rate approved in
19accordance with subsection (b) of this Section. In a proceeding
20under this subsection (c), the Commission shall enter its order
21no later than the earlier of 240 days after the utility's
22filing of its annual update of cost inputs to the formula rate
23or December 31. The Commission's determinations of the prudence
24and reasonableness of the costs incurred for the applicable
25calendar year shall be final upon entry of the Commission's
26order and shall not be subject to reopening, reexamination, or

SB3696- 22 -LRB101 18658 SPS 68113 b
1collateral attack in any other Commission proceeding, case,
2docket, order, rule or regulation, provided, however, that
3nothing in this subsection (c) shall prohibit a party from
4petitioning the Commission to rehear or appeal to the courts
5the order pursuant to the provisions of this Act.
6 If the Commission does not, either upon complaint or its
7own initiative, enter upon a hearing within 45 days after the
8utility files the annual update of cost inputs to its formula
9rate, then the costs incurred for the applicable calendar year
10shall be deemed prudent and reasonable, and the filed charges
11shall not be subject to reopening, reexamination, or collateral
12attack in any other proceeding, case, docket, order, rule, or
13regulation.
14 A participating gas utility's first filing of the updated
15cost inputs, and any Commission investigation of such inputs in
16accordance with this subsection (c) shall proceed
17notwithstanding the fact that the Commission's investigation
18under subsection (b) of this Section is still pending and
19notwithstanding any other law, order, rule, or Commission
20practice to the contrary.
21 (d) Nothing in subsections (b) and (c) shall prohibit the
22Commission from investigating, or a participating gas utility
23from filing, revenue-neutral tariff changes related to rate
24design of a formula rate that has been placed into effect for
25the utility. Following approval of a participating gas
26utility's formula rate tariff in accordance with subsection

SB3696- 23 -LRB101 18658 SPS 68113 b
1(b), the utility shall make a filing with the Commission within
2one year after the effective date of the formula rate tariff
3that proposes changes to the tariff to incorporate the findings
4of any final rate design orders of the Commission applicable to
5the participating gas utility and entered subsequent to the
6Commission's approval of the tariff. The Commission shall,
7after notice and hearing, enter its order approving, or
8approving with modification, the proposed changes to the
9formula rate tariff within 240 days after the utility's filing.
10Following such approval, the utility shall make a filing with
11the Commission during each subsequent 3-year period that either
12proposes revenue-neutral tariff changes or re-files the
13existing tariffs without change, which shall present the
14Commission with an opportunity to suspend the tariffs and
15consider revenue-neutral tariff changes related to rate
16design.
17 (e) Any surcharge tariff of a participating gas utility
18authorized by paragraph (3) of subsection (a) of Section
199-220.3 which is in effect as of the effective date of the
20formula rate tariff approved by the Commission for that utility
21in accordance with the provisions of this Section will be
22suspended by operation of law as of the effective date of that
23formula rate tariff. Notwithstanding anything in paragraph (4)
24of subsection (a) of Section 9-220.3 and paragraph (2) of
25subsection (e) of Section 9-220.3, a participating gas utility
26shall not file a petition to initiate a final reconciliation of

SB3696- 24 -LRB101 18658 SPS 68113 b
1amounts collected under such a surcharge tariff on account of
2qualifying infrastructure investment (as that term is defined
3in subsection (b) of Section 9-220.3) that occurred during any
4calendar year for which a reconciliation will be made under
5subsection (c), and no adjustment to the participating gas
6utility's initial rates as calculated under paragraph (1) of
7subsection (c) shall be made based on the fact that the utility
8had such a tariff in effect or recovered any portion of its
9revenue requirement through such a tariff.
10 (f) The provisions of this Section are severable under
11Section 1.31 of the Statute on Statutes.
12 Section 99. Effective date. This Act takes effect upon
13becoming law.
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