220 ILCS 5/7-106
2021 Illinois Compiled Statutes|Chapter 220 - UTILITIES|220 ILCS 5/ - Public Utilities Act.|Article VII - Intercorporate Relations

Sec. 7-106.         (a) Subject to the limitations contained in this Section  7-106, and notwithstanding anything to the contrary in Section 6-103 and  items (f), (g), and (h) of subsection (A) of  Section 7-102 of this Act or any rule or  regulation promulgated by the Commission under this Act, a public utility that  has filed, pursuant to Section 7-105(d) of this Act, the information described  in Section 7-204A(a) of this Act, may, without the approval  or consent of, or other prior filing with, the Commission, form, invest moneys  denominated in United States dollars in, and guarantee contractual obligations  of a subsidiary which engages in any business that provides to persons,  corporations, municipal corporations, or other entities that are customers or  potential customers of the public utility (i) heating, cooling, or lighting  services; (ii) energy management services; or (iii) design, development,  construction, engineering, financial, maintenance, management, or consulting  services for owners, lessees, managers, or operators of facilities for the  generation, transmission, or distribution of electricity; each such subsidiary  is referred to in this Act as a "Section 7-106 subsidiary".(b) Prior to investing in or guaranteeing any contractual obligations of  a Section 7-106 subsidiary, the utility shall file with the Commission a  statement identifying all public utility assets or information in existence,  such as customer lists, which the utility plans to transfer to or permit the  Section 7-106 subsidiary or any associate or affiliate of the subsidiary to  use, which statement shall include a description of the proposed terms and  conditions under which the assets or information will be transferred or used.(c) In any proceeding pending before the Commission to determine the rates  to be charged for electric service by a public utility which has a Section  7-106 subsidiary, or which is a subsidiary of a holding company formed under  Section 7-105 of this Act, the Commission shall reduce the public utility's  rates to reflect the additional amount of revenue it would have earned during  the test year if the Section 7-106 subsidiary, such holding company, or any  other subsidiary company of such holding company had not provided the customer  with the services described in items (i), (ii), and (iii) of subsection (a) of  this Section. The Commission shall not reduce the revenues of the public  utility unless it finds that there was no reasonable probability that the  customer would have obtained the services described in items (i), (ii), and  (iii) of subsection (a) of this Section from another source (including the  customer), if such subsidiary, holding company, or other subsidiary company had  not entered into a contract or arrangement with the customer. A written  statement by an employee or authorized agent of the customer that such services  are available from other sources (including the customer) and that such agent  or employee believes that there was a reasonable probability that the customer  would have so obtained such services from another source (including the  customer) shall constitute prima facie evidence of such reasonable probability.  The provisions of this subsection shall not be construed as limiting the  authority of the Commission with respect to rates under any other Section of  this Act.(d) The aggregate amount of a public utility's investments in, and  guarantees of, the contractual obligations of Section 7-106 subsidiaries  without the approval or consent of, or prior filing with, the Commission,  outstanding at the time of and after giving effect to any such investment or  guarantee, shall not exceed as of the date of such investment or guarantee an  amount equal to the lesser of $170,000,000 or 20% of the retained earnings of  the public utility as reported on its most recent annual report to the  Commission.  The amount of each such guarantee shall be limited to a maximum  dollar amount which shall be specified in such guarantee.  The terms of each  such guarantee shall provide that it shall terminate, and it shall terminate,  at the time that the public utility liquidates or transfers to any  entity or person, the interest and investment of such public utility in the  Section 7-106 subsidiary whose obligations are subject to such guarantee.  The  authority of a public utility to invest in and guarantee the contractual  obligations of a Section 7-106 subsidiary without the approval or consent of,  or prior filing with, the Commission, as permitted by this Section 7-106, shall  expire on the date such public utility liquidates or transfers its interest and  investment in such Section 7-106 subsidiary.(e) The Commission shall not consider the investment of a public utility in  or its obligation to make an investment in a Section 7-106 subsidiary, or the  guarantee by a public utility of contractual obligations of its Section 7-106  subsidiaries, in considering the amount or terms of any reparations or refunds  to be made by such public utility to its customers.(f) On the date that a public utility becomes a subsidiary company of a  holding company pursuant to Section 7-105 of this Act, such public utility  shall either:(i) liquidate or transfer its interest and investment     in its Section 7-106 subsidiaries to such holding company or to any other entity or person in a transaction which does not require the prior approval or consent of the Commission under Section 7-101 or Section 7-102 of this Act, or(ii) file with the Commission for its approval under     Section 7-101 or Section 7-102 of this Act, a plan for such public utility to liquidate or transfer its interest and investment in its Section 7-106 subsidiaries.(g) If on the 550th day after the effective date of this amendatory Act of  1993 such public utility is not a subsidiary company of a holding company, such  public utility shall on such 550th day either:(i) liquidate or transfer its interest and investment     in its Section 7-106 subsidiaries to any entity or person in a transaction which does not require the prior approval or consent of the Commission under Section 7-101 or Section 7-102 of this Act, or(ii) file with the Commission for its approval under     Section 7-101 or Section 7-102 of this Act, a plan for such public utility to liquidate or transfer its interest and investment in its Section 7-106 subsidiaries, or(iii) file with the Commission a petition for an     extension of time within which: (A) to become a subsidiary company of a holding company and to take action pursuant to subsection (f) of this Section 7-106; or (B) to take action pursuant to either subparagraph (i) or subparagraph (ii) of subsection (g) of this Section 7-106.  The Commission shall grant such extension to an appropriate date unless it finds that the public utility has not taken action in a timely and appropriate manner to seek all regulatory, shareholder, and other authority for or, after obtaining all such authority, has not taken action in a timely and appropriate manner to effect a transaction in which such public utility would become a subsidiary company of a holding company.  If the Commission finds that the public utility has not taken action in a timely and appropriate manner to seek all regulatory, shareholder, and other authority for or, after obtaining all such authority, has not taken action in a timely and appropriate manner to effect a transaction in which such public utility would become a subsidiary company of a holding company, the Commission shall deny the public utility's petition and shall approve a plan for such public utility to liquidate or transfer its interests and investments in its Section 7-106 subsidiaries.  During the pendency of the proceeding before the Commission initiated by the petition filed by the public utility, the utility may continue to engage in activities described in Sections 7-105 and 7-106, as provided therein.(h) Contracts or arrangements between a public utility and its Section 7-106  subsidiaries, including contracts or arrangements for any services described in  Section 7-106 (a)(i), (ii), and (iii), but excluding investments and guarantees  permitted by this Section 7-106, shall be subject to the jurisdiction of the  Commission under Sections 7-101, 7-102, 7-204A(b), and other applicable  provisions, if any, of this Act, except that such public utility may, pursuant  to contracts or arrangements filed with the Commission, provide its Section  7-106 subsidiaries with office facilities or administrative and management  services which are reasonably necessary for the management of the business of  its Section 7-106 subsidiaries, which contracts or arrangements shall become  effective upon such public utility filing with the Commission a petition  seeking Commission approval thereof, and such contracts and arrangements shall  remain in effect unless modified by the Commission after a hearing on such  petition in which such public utility shall have the burden of proving the  reasonable necessity of the provision of such facilities and services.  Such  contracts or arrangements shall require each Section 7-106 subsidiary to pay to  the public utility the fair market value for the use of such facilities and  services.  The public utility shall keep its books of account and other records  in a manner that will enable the Commission to determine the propriety of any  allocation of costs between the public utility and its Section 7-106  subsidiaries.  The burden of proving the propriety of any such allocation shall  be on the public utility. The public utility shall also have the burden of  proving that it has received or will receive fair market value for all  facilities or services provided to its Section 7-106 subsidiaries under this  Section 7-106.(i) The costs of any public utility investment in or guarantee of the  contractual obligations of its Section 7-106 subsidiaries shall not be included  in rate base or treated as allowable expenses for purposes of determining the  rates to be charged by the public utility.(j) No public utility shall have any liability to any of its Section 7-106  subsidiaries, except any obligation it may have to make investments in such  Section 7-106 subsidiaries in accordance with this Section 7-106.  No public  utility shall have any liability for any obligation or liability of any of its  Section 7-106 subsidiaries, except under any guarantee of contractual  obligations of such Section 7-106 subsidiaries made in accordance with this  Section 7-106.(k) No Section 7-106 subsidiary shall engage in the repair or servicing of  home or other consumer appliances except in emergencies posing a threat to life  or property.    (Source: P.A. 91-357, eff. 7-29-99.)