Illinois Administrative Code
Title 83 - PUBLIC UTILITIES
Part 556 - QUALIFYING INFRASTRUCTURE PLANT SURCHARGE
Section 556.100 - Annual Reconciliation

Universal Citation: 83 IL Admin Code ยง 556.100

Current through Register Vol. 48, No. 38, September 20, 2024

a) A utility that has a QIP surcharge in effect shall file with the Commission an annual petition to initiate a reconciliation proceeding. The petition shall comply with the following provisions:

1) For each calendar year in which a surcharge tariff is in effect, the natural gas utility shall file a petition on or before March 20 of the following year with the Commission to initiate hearings to reconcile amounts billed under each surcharge authorized with the actual prudently incurred costs recoverable under this tariff in the preceding year. The petition filed by the natural gas utility shall include testimony and schedules that support the accuracy and the prudence of the qualifying infrastructure investment for the calendar year being reconciled. [220 ILCS 5/9-220.3(e)(2)]

2) The petition filed shall also include the number of jobs attributable to the qualifying infrastructure investments whose costs are recovered through the QIP surcharge tariff. [220 ILCS 5/9-220.3(e)(2)] The utility shall describe in its petition how it determined the number of jobs.

3) As required by this Section, the annual reconciliation shall include a calculation of the R component necessary to adjust revenue collected under the QIP surcharge in effect during the reconciliation year to an amount equivalent to the actual level of prudently-incurred qualified infrastructure investment for the reconciliation year.

b) After a hearing on the petition, the Commission shall determine the amount of the adjustment, if any, that should be made through the O component to the level of revenue collected by operation of the QIP surcharge during the reconciliation year. The adjustment shall be calculated so that the amount of the revenue equals the actual level of prudently incurred qualified infrastructure investment costs for the reconciliation year, to the extent that the adjustment has not already been reflected through an adjustment made by the utility to the R component of the QIP surcharge percentage.

c) The R component shall be calculated by using the following formula:

R

=

(ActNetQIP x PTR) + ActNetDep - QIPRev + Rpy + Opy

Where:

R

=

Utility-determined reconciliation component.

ActNetQIP

=

The average actual cost of the investment in QIP for the reconciliation year net of the actual accumulated depreciation and accumulated deferred income tax liabilities net of deferred tax assets resulting from the additional QIP associated with the investment in QIP based on the 13-month average for the reconciliation year.

PTR

=

Pre-tax overallrate of return authorized by the Commission in the utility's last rate case calculated as described in Section 556.50 [220 ILCS 5/9-220.3(f)].

ActNetDep

=

Actual depreciation expense related to the investment in QIP for the reconciliation year. Depreciation expense shall be net of depreciation expense applicable to the plant being retired, as defined in Section 556.10.

QIPRev

=

Actual QIP revenues collected during the reconciliation year through the QIP surcharge.

Rpy

=

The R component from the previous reconciliation year.

Opy

=

The sum of the O components and the calculated interest attributable to the O components included in the calculation of the QIP surcharge percentage during the reconciliation year.

d) Each annual reconciliation shall include the following schedules:

1) A schedule showing the actual monthly costs associated with the qualified infrastructure investment for the reconciliation year;

2) A schedule showing the actual monthly revenues arising from the application of the QIP surcharge during the reconciliation year;

3) A schedule showing the reconciliation component determined by the utility of the amount to be recovered or refunded over a nine-month period commencing on April 1; and

4) A schedule showing the utility's calculation of actual operating income and 13-month average rate base for the reconciliation year. The calculation of actual operating income and 13-month average rate base shall be adjusted for the impact of adjustments accepted by the Commission in the utility's last rate case represented by the pro rata percentages of net plant and operating expenses approved by the Commission compared to the net plant and operating expenses requested by the utility in its initial filing. In calculating the amount of federal and State income tax expense reflected in operating income, the utility shall show as deductible interest expense for tax purposes the product that results when the weighted embedded cost-of-debt reflected in the overall rate of return calculation used in the utility's last rate proceeding is multiplied by the rate as shown in the annual reconciliation.

e) The first reconciliation year shall take effect on the first day of the calendar year in which the Commission issues an order approving the QIP surcharge tariff and shall end on December 31 of the same calendar year. Subsequent reconciliation years shall end on December 31.

f) When the utility files its annual reconciliation petition, the utility shall provide to the Commission's Manager of the Accounting Department electronic copies of the following items:

1) Copies of all work papers pertaining to the reconciliation;

2) A summary of all work orders or projects that support the costs claimed for recovery through the QIP surcharge;

3) The total annual amounts invested, for each of the categories described in Section 9-220.3(b)(1) through (b)(7) of the Act, for qualifying infrastructure investment that support the costs claimed for recovery through the QIP surcharge;

4) Copies of the applicable general ledger or comparable material supporting the recovery of the QIP surcharge;

5) A detailed worksheet showing the calculation of any utility-determined reconciliation component (R component) amount based upon the annual reconciliation; and

6) Information regarding the prudence of the utility's investment in QIP.

g) The annual reconciliation shall be verified by an officer of the utility.

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