Sec. 16-105.6. Amortization of charges or credits.

323 words·~1 min read·/il/chapter-220/act-5/16-105-6

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(a)It is in the public interest to mitigate the customer bill impacts of large expenses incurred by electric utilities by directing that expenses exceeding the applicable threshold specified in this Section be amortized over the prescribed period. Such amortization will levelize customer bill impacts and, in many instances, better align the period of cost recovery with the period over which customers receive the benefit of the expenditure. Accordingly, an electric utility that files a general rate increase under Section 9-201 of this Act or a Multi-Year Rate Plan under Section 16-108.18 of this Act shall amortize, over a 5-year period, each charge or credit that exceeds the applicable amount identified in subsection

(b)of this Section and that relates to

(1)a workforce reduction program's severance costs;

(2)changes in accounting rules;

(3)changes in law;

(4)compliance with any Commission-initiated audit; and

(5)a single storm or weather system, or other similar expense.

Any unamortized balance shall be reflected in rate base.

In this Section, "changes in law" includes any enactment, repeal, or amendment in a law, ordinance, rule, regulation, interpretation, permit, license, consent, or order, including those relating to taxes, accounting, or environmental matters, or in the interpretation or application thereof by any governmental authority occurring after the effective date of this amendatory Act of the 102nd General Assembly.

Nothing in this Section is intended to prohibit the Commission from reviewing the prudence and reasonableness of the costs amortized pursuant to this Section.

(b)An electric utility that serves more than 3,000,000 customers in the State shall amortize the full amount of each charge or credit described in subsection

(a)of this Section that exceeds $10,000,000 in the applicable calendar year, and an electric utility that serves less than 3,000,000 customers in the State shall amortize the full amount of each such charge or credit that exceeds $3,700,000 in the applicable calendar year.