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Illinois House Bill HB2533

Illinois 2025-2026 Regular Session

Illinois House Bill HB2533 Compare Versions

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11 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2533 Introduced , by Rep. Nabeela Syed SYNOPSIS AS INTRODUCED: 220 ILCS 5/9-210.5 Amends the Public Utilities Act. Provides that at the next election following the public meeting and notice required in provisions regarding a water or sewer utility that is owned by the State or any political subdivision thereof being acquired by a large public utility, a referendum, subject to the requirements of the Election Code, shall be placed on the ballot for all electors within the area the water or sewer utility operates. Provides that the votes on the referendum shall be recorded as "yes" or "no". Provides that, if a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, then the acquisition may continue. Provides that, if less than a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, the Illinois Commerce Commission shall not approve the large public utility's acquisition of the water or sewer utility. LRB104 08136 AAS 18182 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2533 Introduced , by Rep. Nabeela Syed SYNOPSIS AS INTRODUCED: 220 ILCS 5/9-210.5 220 ILCS 5/9-210.5 Amends the Public Utilities Act. Provides that at the next election following the public meeting and notice required in provisions regarding a water or sewer utility that is owned by the State or any political subdivision thereof being acquired by a large public utility, a referendum, subject to the requirements of the Election Code, shall be placed on the ballot for all electors within the area the water or sewer utility operates. Provides that the votes on the referendum shall be recorded as "yes" or "no". Provides that, if a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, then the acquisition may continue. Provides that, if less than a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, the Illinois Commerce Commission shall not approve the large public utility's acquisition of the water or sewer utility. LRB104 08136 AAS 18182 b LRB104 08136 AAS 18182 b A BILL FOR
22 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2533 Introduced , by Rep. Nabeela Syed SYNOPSIS AS INTRODUCED:
33 220 ILCS 5/9-210.5 220 ILCS 5/9-210.5
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55 Amends the Public Utilities Act. Provides that at the next election following the public meeting and notice required in provisions regarding a water or sewer utility that is owned by the State or any political subdivision thereof being acquired by a large public utility, a referendum, subject to the requirements of the Election Code, shall be placed on the ballot for all electors within the area the water or sewer utility operates. Provides that the votes on the referendum shall be recorded as "yes" or "no". Provides that, if a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, then the acquisition may continue. Provides that, if less than a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, the Illinois Commerce Commission shall not approve the large public utility's acquisition of the water or sewer utility.
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1111 1 AN ACT concerning regulation.
1212 2 Be it enacted by the People of the State of Illinois,
1313 3 represented in the General Assembly:
1414 4 Section 5. The Public Utilities Act is amended by changing
1515 5 Section 9-210.5 as follows:
1616 6 (220 ILCS 5/9-210.5)
1717 7 (Section scheduled to be repealed on June 1, 2028)
1818 8 Sec. 9-210.5. Valuation of water and sewer utilities.
1919 9 (a) In this Section:
2020 10 "Disinterested" means that the person directly
2121 11 involved (1) is not a director, officer, or an employee of
2222 12 the large public utility or the water or sewer utility or
2323 13 its direct affiliates or subsidiaries for at least 12
2424 14 months before becoming engaged under this Section; (2)
2525 15 shall not derive a material financial benefit from the
2626 16 sale of the water or sewer utility other than fees for
2727 17 services rendered, and (3) shall not have a member of the
2828 18 person's immediate family, including a spouse, parents or
2929 19 spouse's parents, children or spouses of children, or
3030 20 siblings and their spouses or children, be a director,
3131 21 officer, or employee of either the large public utility or
3232 22 water or sewer utility or the water or sewer utility or its
3333 23 direct affiliates or subsidiaries for at least 12 months
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3737 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2533 Introduced , by Rep. Nabeela Syed SYNOPSIS AS INTRODUCED:
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3939 220 ILCS 5/9-210.5
4040 Amends the Public Utilities Act. Provides that at the next election following the public meeting and notice required in provisions regarding a water or sewer utility that is owned by the State or any political subdivision thereof being acquired by a large public utility, a referendum, subject to the requirements of the Election Code, shall be placed on the ballot for all electors within the area the water or sewer utility operates. Provides that the votes on the referendum shall be recorded as "yes" or "no". Provides that, if a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, then the acquisition may continue. Provides that, if less than a majority of the electors voting on the referendum within the service area of the water or sewer utility vote in favor of the referendum, the Illinois Commerce Commission shall not approve the large public utility's acquisition of the water or sewer utility.
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6868 1 before becoming engaged under this Section or receive a
6969 2 material financial benefit from the sale of the water or
7070 3 sewer utility other than fees for services rendered.
7171 4 "District" means a service area of a large public
7272 5 utility whose customers are subject to the same rate
7373 6 tariff.
7474 7 "Large public utility" means an investor-owned public
7575 8 utility that:
7676 9 (1) is subject to regulation by the Illinois
7777 10 Commerce Commission under this Act;
7878 11 (2) regularly provides water or sewer service to
7979 12 more than 15,000 customer connections;
8080 13 (3) provides safe and adequate service; and
8181 14 (4) is not a water or sewer utility as defined in
8282 15 this subsection (a).
8383 16 "Next rate case" means a large public utility's first
8484 17 general rate case after the date the large public utility
8585 18 acquires the water or sewer utility where the acquired
8686 19 water or sewer utility's cost of service is considered as
8787 20 part of determining the large public utility's resulting
8888 21 rates.
8989 22 "Prior rate case" means a large public utility's
9090 23 general rate case resulting in the rates in effect for the
9191 24 large public utility at the time it acquires the water or
9292 25 sewer utility.
9393 26 "Utility service source" means the water or sewer
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104104 1 utility or large public utility from which the customer
105105 2 receives its utility service type.
106106 3 "Utility service type" means water utility service or
107107 4 sewer utility service or water and sewer utility service.
108108 5 "Water or sewer utility" means any of the following:
109109 6 (1) a public utility that regularly provides water
110110 7 or sewer service to 6,000 or fewer customer
111111 8 connections;
112112 9 (2) a water district, including, but not limited
113113 10 to, a public water district, water service district,
114114 11 or surface water protection district, or a sewer
115115 12 district of any kind established as a special district
116116 13 under the laws of this State that regularly provides
117117 14 water or sewer service;
118118 15 (3) a waterworks system or sewerage system
119119 16 established under the Township Code that regularly
120120 17 provides water or sewer service; or
121121 18 (4) a water system or sewer system owned by a
122122 19 municipality that regularly provides water or sewer
123123 20 service; and
124124 21 (5) any other entity that is not a public utility
125125 22 that regularly provides water or sewer service.
126126 23 (b) Notwithstanding any other provision of this Act, a
127127 24 large public utility that acquires a water or sewer utility
128128 25 may request that the Commission use, and, if so requested, the
129129 26 Commission shall use, the procedures set forth under this
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140140 1 Section to establish the ratemaking rate base of that water or
141141 2 sewer utility at the time when it is acquired by the large
142142 3 public utility.
143143 4 (c) If a large public utility elects the procedures under
144144 5 this Section to establish the rate base of a water or sewer
145145 6 utility that it is acquiring, then 3 appraisals shall be
146146 7 performed. The average of these 3 appraisals shall represent
147147 8 the fair market value of the water or sewer utility that is
148148 9 being acquired. The appraisals shall be performed by 3
149149 10 appraisers approved by the Commission's Executive Director or
150150 11 designee and engaged by either the water or sewer utility
151151 12 being acquired or by the large public utility. Each appraiser
152152 13 shall be engaged on reasonable terms approved by the
153153 14 Commission. Each appraiser shall be a disinterested person
154154 15 licensed as a State certified general real estate appraiser
155155 16 under the Real Estate Appraiser Licensing Act of 2002.
156156 17 Each appraiser shall:
157157 18 (1) be sworn to determine the fair market value of the
158158 19 water or sewer utility by establishing the amount for
159159 20 which the water or sewer utility would be sold in a
160160 21 voluntary transaction between a willing buyer and willing
161161 22 seller under no obligation to buy or sell;
162162 23 (2) determine fair market value in compliance with the
163163 24 Uniform Standards of Professional Appraisal Practice;
164164 25 (3) engage one disinterested engineer who is licensed
165165 26 in this State, and who may be the same engineer that is
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176176 1 engaged by the other appraisers, to prepare an assessment
177177 2 of the tangible assets of the water or sewer utility,
178178 3 which is to be incorporated into the appraisal under the
179179 4 cost approach;
180180 5 (4) request from the manager of the Accounting
181181 6 Department, if the water or sewer utility is a public
182182 7 utility that is regulated by the Commission, a list of
183183 8 investments made by the water or sewer utility that had
184184 9 been disallowed previously and that shall be excluded from
185185 10 the calculation of the large public utility's rate base in
186186 11 its next rate case; and
187187 12 (5) return their appraisal, in writing, to the water
188188 13 or sewer utility and large public utility in a reasonable
189189 14 and timely manner.
190190 15 If the appraiser cannot engage an engineer, as described
191191 16 in paragraph (3) of this subsection (c), within 30 days after
192192 17 the appraiser is engaged, then the Commission's Executive
193193 18 Director or designee shall recommend the engineer the
194194 19 appraiser should engage. The Commission's Executive Director
195195 20 or designee shall provide his or her recommendation within 30
196196 21 days after he or she is officially notified of the appraiser's
197197 22 failure to engage an engineer and the appraiser shall promptly
198198 23 work to engage the recommended engineer. If the appraiser is
199199 24 unable to negotiate reasonable engagement terms with the
200200 25 recommended engineer within 15 days after the recommendation
201201 26 by the Commission's Executive Director or designee, then the
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212212 1 appraiser shall notify the Commission's Executive Director or
213213 2 designee and the process shall be repeated until an engineer
214214 3 is successfully engaged.
215215 4 (d) The lesser of (i) the purchase price or (ii) the fair
216216 5 market value determined under subsection (c) of this Section
217217 6 shall constitute the rate base associated with the water or
218218 7 sewer utility as acquired by and incorporated into the rate
219219 8 base of the district designated by the acquiring large public
220220 9 utility under this Section, subject to any adjustments that
221221 10 the Commission deems necessary to ensure such rate base
222222 11 reflects prudent and useful investments in the provision of
223223 12 public utility service. The reasonable transaction and closing
224224 13 costs incurred by the large public utility shall be treated
225225 14 consistent with the applicable accounting standards under this
226226 15 Act. The total amount of all of the appraisers' fees to be
227227 16 included in the transaction and closing costs shall not exceed
228228 17 the greater of $15,000 or 5% of the appraised value of the
229229 18 water or sewer utility being acquired. This rate base
230230 19 treatment shall not be deemed to violate this Act, including,
231231 20 but not limited to, any Sections in Articles VIII and IX of
232232 21 this Act that might be affected by this Section. Any
233233 22 acquisition of a water or sewer utility that affects the
234234 23 cumulative base rates of the large public utility's existing
235235 24 ratepayers in the tariff group into which the water or sewer
236236 25 utility is to be combined by less than (1) 2.5% at the time of
237237 26 the acquisition for any single acquisition completed under
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248248 1 this Section or (2) 5% for all acquisitions completed under
249249 2 this Section before the Commission's final order in the next
250250 3 rate case shall not be deemed to violate Section 7-204 or any
251251 4 other provision of this Act.
252252 5 In the Commission's order that approves the large public
253253 6 utility's acquisition of the water or sewer utility, the
254254 7 Commission shall issue its decision establishing (1) the
255255 8 ratemaking rate base of the water or sewer utility; (2) the
256256 9 district or tariff group with which the water or sewer utility
257257 10 shall be combined for ratemaking purposes, if such combination
258258 11 has been proposed by the large public utility; and (3) the
259259 12 rates to be charged to customers in the water or sewer utility.
260260 13 (e) If the water or sewer utility being acquired is owned
261261 14 by the State or any political subdivision thereof, then the
262262 15 water or sewer utility must inform the public of the terms of
263263 16 its acquisition by the large public utility by (1) holding a
264264 17 public meeting prior to the acquisition and (2) causing to be
265265 18 published, in a newspaper of general circulation in the area
266266 19 that the water or sewer utility operates, a notice setting
267267 20 forth the terms of its acquisition by the large public utility
268268 21 and options that shall be available to assist customers to pay
269269 22 their bills after the acquisition.
270270 23 At the next election following the public meeting and
271271 24 notice required by this subsection (e), a referendum, subject
272272 25 to the requirements of Section 16-7 of the Election Code,
273273 26 shall be placed on the ballot for all electors within the area
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284284 1 the water or sewer utility operates in substantially the
285285 2 following form:
286286 3 May the (name of large public utility) acquire the
287287 4 (name of water or sewer utility) under the terms of
288288 5 acquisition published in (name of newspaper) on (date)?
289289 6 The votes shall be recorded as "Yes" or "No".
290290 7 If a majority of the electors voting on the referendum
291291 8 within the service area of the water or sewer utility vote in
292292 9 favor of the referendum, then the acquisition may continue as
293293 10 provided in this Section. If less than a majority of the
294294 11 electors voting on the referendum within the service area of
295295 12 the water or sewer utility vote in favor of the referendum, the
296296 13 Commission shall not approve the large public utility's
297297 14 acquisition of the water or sewer utility.
298298 15 (f) The large public utility may recommend the district or
299299 16 tariff group of which the water or sewer utility shall, for
300300 17 ratemaking purposes, become a part after the acquisition, or
301301 18 may recommend a lesser rate for the water or sewer utility. If
302302 19 the large public utility recommends a lesser rate, it shall
303303 20 submit to the Commission its proposed rate schedule and the
304304 21 proposed final tariff group for the acquired water or sewer
305305 22 utility. The Commission's approved district or tariff group or
306306 23 rates shall be consistent with the large public utility's
307307 24 recommendation, unless such recommendation can be shown to be
308308 25 contrary to the public interest.
309309 26 (g) From the date of acquisition until the date that new
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320320 1 rates are effective in the acquiring large public utility's
321321 2 next rate case, the customers of the acquired water or sewer
322322 3 utility shall pay the approved then-existing rates of the
323323 4 district or tariff group as ordered by the Commission, or some
324324 5 lesser rates as recommended by the large public utility and
325325 6 approved by the Commission under subsection (f); provided,
326326 7 that, if the application of such rates of the large public
327327 8 utility to customers of the acquired water or sewer utility
328328 9 using 54,000 gallons annually results in an increase to the
329329 10 total annual bill of customers of the acquired water or sewer
330330 11 utility, exclusive of fire service or related charges, then
331331 12 the large public utility's rates charged to the customers of
332332 13 the acquired water or sewer utility shall be uniformly
333333 14 reduced, if any reduction is required, by the percent that
334334 15 results in the total annual bill, exclusive of fire services
335335 16 or related charges, for the customers of the acquired water or
336336 17 sewer utility using 54,000 gallons being equal to 1.5% of the
337337 18 latest median household income as reported by the United
338338 19 States Census Bureau for the most applicable community or
339339 20 county. For each customer of the water or sewer utility with
340340 21 potable water usage values that cannot be reasonably obtained,
341341 22 a value of 4,500 gallons per month shall be assigned. These
342342 23 rates shall not be deemed to violate this Act including, but
343343 24 not limited to, Section 9-101 and any other applicable
344344 25 Sections in Articles VIII and IX of this Act. The Commission
345345 26 shall issue its decision establishing the rates effective for
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356356 1 the water or sewer utility immediately following an
357357 2 acquisition in its order approving the acquisition.
358358 3 (h) In the acquiring large public utility's next rate
359359 4 case, the water or sewer utility and the district or tariff
360360 5 group ordered by the Commission and their costs of service may
361361 6 be combined under the same rate tariff. This rate tariff shall
362362 7 be based on allocation of costs of service of the acquired
363363 8 water or sewer utility and the large public utility's district
364364 9 or tariff group ordered by the Commission and utilizing a rate
365365 10 design that does not distinguish among customers on the basis
366366 11 of utility service source or type. This rate tariff shall not
367367 12 be deemed to violate this Act including, but not limited to,
368368 13 Section 9-101 of this Act. In the acquiring large public
369369 14 utility's 2 rate cases after an acquisition, but in no
370370 15 subsequent rate case, the large public utility may file a rate
371371 16 tariff for a water or sewer utility acquired under this
372372 17 Section that establishes lesser rates than the district or
373373 18 tariff group into which the water or sewer utility is to be
374374 19 combined. Those lesser rates shall not be deemed to violate
375375 20 Section 7-204 or any other provision of this Act if they affect
376376 21 the cumulative base rates of the large public utility's
377377 22 existing rate payers in the district or tariff by less than
378378 23 2.5%.
379379 24 (i) Any post-acquisition improvements made by the large
380380 25 public utility in the water or sewer utility shall accrue a
381381 26 cost for financing set at the large public utility's
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392392 1 determined rate for allowance for funds used during
393393 2 construction, inclusive of the debt, equity, and income tax
394394 3 gross up components, after the date on which the expenditure
395395 4 was incurred by the large public utility until the investment
396396 5 has been in service for a 4-year period or, if sooner, until
397397 6 the time the rates are implemented in the large public
398398 7 utility's next rate case.
399399 8 Any post-acquisition improvements made by the large public
400400 9 utility in the water or sewer utility shall not be depreciated
401401 10 for ratemaking purposes from the date on which the expenditure
402402 11 was incurred by the large public utility until the investment
403403 12 has been in service for a 4-year period or, if sooner, until
404404 13 the time the rates are implemented in the large public
405405 14 utility's next rate case.
406406 15 (j) This Section shall be exclusively applied to large
407407 16 public utilities in the voluntary and mutually agreeable
408408 17 acquisition of water or sewer utilities. Any petitions filed
409409 18 with the Commission related to the acquisitions described in
410410 19 this Section, including petitions seeking approvals or
411411 20 certificates required by this Act, shall be deemed approved
412412 21 unless the Commission issues its final order within 11 months
413413 22 after the date the large public utility filed its initial
414414 23 petition. This Section shall only apply to utilities providing
415415 24 water or sewer service and shall not be construed in any manner
416416 25 to apply to electric corporations, natural gas corporations,
417417 26 or any other utility subject to this Act.
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