2023 Illinois Compiled Statutes › Chapter 220 - UTILITIES › 220 ILCS 5/ - Public Utilities Act. › Article XVIII - Electric Utility Transitional Funding Law

(220 ILCS 5/Art. XVIII heading)
ARTICLE XVIII.  
		ELECTRIC UTILITY
TRANSITIONAL FUNDING LAW
(220 ILCS 5/18-101)
Sec. 18-101. 
		Short title and applicability. 
		This Article may
be cited as the Electric Utility Transitional Funding Law of
1997 and shall apply to electric utilities as defined in this
Article.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-102)
Sec. 18-102. 
		Definitions. 
		For the purposes of this
Article the following terms shall be defined as set forth in
this Section. Terms defined in Article XVI shall have the same meanings in this
Article.
"Assignee" means any party, other than an electric
utility or grantee, to which an interest in intangible
transition property shall have been assigned, sold or
transferred.  The term "assignee" includes any corporation,
public authority, trust, financing vehicle, partnership,
limited liability company or other entity.
"Grantee" means any party, other than an electric utility
or an assignee which acquires its interest from an electric
utility, to whom or for whose benefit the Commission shall
create, establish and grant rights in, to and under intangible
transition property.  The term "grantee" includes any
corporation, public authority, trust, financing vehicle,
partnership, limited liability company or other entity.
"Grantee instruments" means (a) any instruments,
documents, notes, debentures, bonds or other evidences of
indebtedness evidencing any contractual right to receive the
payment of money from a grantee or (b) any certificates of
participation, certificates of beneficial interest or other
instruments evidencing a beneficial or ownership interest in a
grantee or in intangible transition property of such grantee
which are (i) issued (A) by or on behalf of a grantee pursuant
to a transitional funding order and (B) pursuant to an
executed indenture, pooling agreement, security agreement or
other similar agreement of such grantee creating a security
interest, ownership interest or other beneficial interest in
intangible transition property and (ii) payable solely from
proceeds of intangible transition property, including amounts
received with respect to the related instrument funding
charges.
"Holder" means any holder of transitional funding
instruments, including a trustee, collateral agent, nominee or
other such party acting for the benefit of such a holder.
"Instrument funding charge" means a non-bypassable charge
expressed in cents per kilowatt-hour authorized in a
transitional funding order to be applied and invoiced to each
retail customer, class of retail customers of an electric
utility or other person or group of persons obligated to pay
any base rates, transition charges or other rates for tariffed
services from which such instrument funding charge has been
deducted and stated separately pursuant to
subsection (j) of Section 18-104.
"Intangible transition property" means the right, title,
and interest of an electric utility or grantee or assignee arising pursuant to
a
transitional funding order to
impose and receive instrument funding charges, and all related
revenues, collections, claims, payments, money, or proceeds
thereof,
including all right, title, and interest of an electric
utility, grantee or assignee in, to, under and pursuant to
such transitional funding order,  whether or not such
intangible transition property described above is
characterized on the books of the electric utility as a
regulatory asset or as a cost incurred by the electric utility
or otherwise. Intangible transition property shall arise and
exist only when, as, and to the extent that instrument funding
charges are authorized in a transitional funding order that
has become effective in accordance with this Article and shall
thereafter continuously exist to the extent provided in the
order.
"Issuer" means any party, other than an electric utility,
which has issued transitional funding instruments.  The term
"issuer" includes any corporation, public authority, trust,
financing vehicle, partnership, limited liability company or
other entity.
"Transitional funding instruments" means any instruments,
pass-through certificates, notes, debentures, certificates of
participation, bonds, certificates of beneficial interest or
other evidences of indebtedness or instruments evidencing a
beneficial interest (i) which are issued by or on behalf of an
electric utility or issuer pursuant to a transitional funding
order, (ii) which are issued pursuant to an executed
indenture, pooling agreement, security agreement or other
similar agreement of an electric utility or issuer creating a
security interest, ownership interest or other beneficial
interest in intangible transition property or grantee
instruments, if any, and (iii) the proceeds of which are to be
used for the purposes set forth in subparagraph (1) of
subsection (d) of Section 18-103 of this Article.
"Transitional funding order" means an order of the
Commission issued in accordance with the provisions of this
Article creating and establishing intangible transition
property and the rights of any party therein and approving the
sale, pledge, assignment or other transfer of intangible
transition property and grantee instruments, if any, the
issuance of transitional funding instruments and grantee
instruments, if any, and the imposition and collection of
instrument funding charges.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-103)
Sec. 18-103. 
		Transitional funding orders.
(a) Notwithstanding any other provision of this Act or
other law, the Commission is hereby authorized to issue
transitional funding orders in  accordance with the provisions
of this Section, in order to facilitate (i) the issuance of
transitional funding instruments by or on behalf of electric
utilities or issuers and (ii) the issuance of grantee
instruments by or on behalf of grantees.
(b) A transitional funding order may be issued by the
Commission only upon the application of an electric utility
and shall become effective in accordance with its terms only
after such electric utility files with the Commission its
written consent to all terms and conditions of such order.
After the issuance of a transitional funding order, the
electric utility or grantee shall retain sole discretion
regarding whether to assign, sell, pledge or otherwise
transfer intangible transition property and grantee
instruments, if any, or to cause transitional funding
instruments and grantee instruments, if any, to be issued,
including the right to defer or postpone such assignment,
sale, transfer, pledge or issuance or to change the terms
thereof as allowed by such order.
(c) After the effective date of this amendatory Act of
1997, an electric utility may file any number of applications
for transitional funding orders.  Each application for a
transitional funding order shall contain detailed information
regarding the electric utility's proposal for (i) the
assignment, sale, pledge or other transfer of, or the
establishment, creation and granting of rights in and to,
intangible transition property and grantee instruments, if
any, (ii) the issuance of transitional funding instruments and
grantee instruments, if any, (iii) the total dollar amount of
intangible transition property to be created and the amount to
be sold, pledged, assigned or otherwise transferred or granted
hereunder (which amount may be in excess of the principal and
interest payable on the transitional funding instruments and
grantee instruments, if any, in order to provide for servicing
costs and the funding or maintenance of debt service and other
reserves, costs and fees as security to the holders of the
transitional funding instruments and grantee instruments, if
any), (iv) the amount of transitional funding instruments and
grantee instruments, if any, to be issued, (v) the amount,
expressed in cents per kilowatt-hour, of instrument funding
charges to be collected from retail customers or other
persons, (vi) the time to maturity for the transitional
funding instruments and grantee instruments, if any, and (vii) the
electric utility's planned use of the proceeds from the
issuance of transitional funding instruments including the amounts allocated
for the respective uses specified in subparagraph (1) of subsection (d) of
Section 18-103 of this Article.
(d) The Commission shall, after proper notice, hold a hearing for the sole
purpose of determining whether the application and requested
transitional funding order are in compliance with this
Article and shall complete its review of the
application and issue its final transitional funding order by no later than
90 days after the filing of such application by the
electric utility;  provided, that, in contested cases where the public interest
is in issue pursuant to subparagraph (1)(B) of this subsection (d) or pursuant
to subsection (m) of Section 18-104, the Commission may complete its review and
issue its final transitional funding order by no later than 120 days after the
filing of such application.
The order shall create and
establish the proposed intangible transition property in
the amount requested by the applicant and approve the
proposed sale, pledge, assignment or other transfer of, or the
establishment, creation and granting of rights in and to,
intangible transition property and grantee instruments, if
any, the proposed issuance of transitional funding instruments
and grantee instruments, if any, and the proposed imposition
and collection of the corresponding instrument funding
charges, if the Commission finds that each of the following conditions are met:
(1) the electric utility will use the proceeds of the     sale and issuance of the transitional funding instruments for one or more of the following purposes:
(A) to refinance debt or equity, or both, in a         manner which the electric utility reasonably demonstrates will result in an overall reduction in its cost of capital, taking into account the costs of financing; provided, however, that any proceeds transferred to a parent company through a common stock repurchase transaction shall be used to retire publicly traded common stock of the parent company or to pay commercially reasonable transaction costs associated with such retirement;
(B) if the Commission finds that the sale or         issuance of transitional funding instruments for the following purposes is in the public interest, then the following uses of proceeds:  (i) to repay or retire fuel contracts or obligations related to nuclear spent fuel previously incurred by the electric utility in providing electric power or energy services prior to the effective date of this amendatory Act of 1997 or (ii) to pay any expenditures required to be undertaken by such electric utility by the provisions of Section 16-128 of this Act including labor severance costs and employee retraining costs;
(C) to fund debt service and other reserves,         commercially reasonable costs and fees necessary or desirable in connection with the marketing of the transitional funding instruments and grantee instruments, if any;
(D) to pay for commercially reasonable costs         associated with the issuance and collateralization of transitional funding instruments and grantee instruments, if any; and
(E) to pay for the commercially reasonable costs         associated with the issuance of such transitional funding instruments, including the costs incurred since the effective date of this amendatory Act of 1997, or to be incurred, in connection with transactions to recapitalize, refinance or retire stock and/or debt, any associated taxes, and the costs incurred or to be incurred to obtain, collateralize, issue, service and administer transitional funding instruments and grantee instruments, including interest and other related fees, costs and charges;
provided, (i) that the transitional funding order shall     require the electric utility to use (1) at least 80% of such proceeds for the purposes specified in subparagraphs (A) and (B) above and (2) no more than 20% of the maximum amount of such proceeds permitted under subparagraph (6)(B) of this subsection for purposes other than those specified in subparagraph (A) above; (ii) that the electric utility's use of such proceeds for the purposes specified in subparagraph (A) above shall not, as of the date of application of such proceeds, result in the common equity component of its capital structure, exclusive of the portion of its capital structure that consists of obligations representing transitional funding instruments or grantee instruments, being reduced below the lesser of (1) 40% and (2) the common equity percentage as of December 31, 1996 adjusted to reflect any write-off of assets or common equity implemented or required to be implemented as a result of this amendatory Act of 1997; and (iii) in no event shall the electric utility use the proceeds of the sale of grantee instruments or transitional funding instruments to repay or retire obligations incurred by any affiliate of the electric utility (other than in connection with any refinancing of grantee instruments or transitional funding instruments issued by such affiliate), without the consent of the Commission;
(2) the expected maturity date for the grantee     instruments or the transitional funding instruments, and the final date on which the electric utility, grantee or assignee shall be entitled to charge and collect instrument funding charges, shall each be set to occur no later than December 31, 2008, subject to the provisions of subsections (l) and (m) of Section 18-104;
(3) the instrument funding charges authorized in such     order will be deducted and stated separately from base rates and transition charges, and, where applicable, other rates for tariffed services, all as provided in subsection (j) of Section 18-104 and in a manner conforming to the allocation of the instrument funding charges implemented pursuant to subparagraph (4) of this subsection;
(4) the instrument funding charges authorized in such     order shall have been allocated among classes of retail customers in accordance with percentage ratios determined by dividing the base rate revenue from each class by the electric utility's total base rate revenue for the 1996 calendar year;
(5) the issuance of the transitional funding     instruments will not cause the rates for tariffed services to increase over the rates then in existence as adjusted for the rate decreases provided in subsection (b) of Section 16-111; and
(6) the aggregate principal amount of grantee     instruments or, if such transitional funding order does not provide for the issuance of grantee instruments, transitional funding instruments, to be issued pursuant to such order, together with the aggregate amount of such instruments issued under any prior orders requested by such electric utility, shall not exceed:
(A) during the twelve-month period commencing         August 1, 1998, an amount equal to 25% of the applicable electric utility's total capitalization, including both debt and equity, as of December 31, 1996, multiplied by the ratio of the electric utility's revenues from Illinois electric utility retail customers in the 1996 calendar year to its total electric retail revenues for such 1996 year; and
(B) thereafter, an amount equal to 50% of the         applicable electric utility's total capitalization, including both debt and equity, as of December 31, 1996 multiplied by the ratio of the electric utility's revenues from Illinois electric utility retail customers in the 1996 calendar year to its total electric retail revenues for such 1996 year.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-104)
Sec. 18-104. 
		
		Terms and provisions of transitional
funding orders.
(a) Each transitional funding order shall create and
establish intangible transition property in an amount not to
exceed the sum of (i) the rate base established by the
Commission in the electric utility's last rate case prior to the effective date
of this amendatory Act of 1997, plus (ii)
any expenditures required
to be undertaken by such electric utility by the provisions of Section 16-128
of this Act, including labor severance costs and employee retraining costs,
plus
(iii) amounts necessary to fund debt
service and other reserves, commercially reasonable costs and fees necessary
in connection with the marketing of the transitional
funding instruments and grantee instruments, if any, plus (iv)
commercially reasonable costs incurred from and after the effective date of
this amendatory Act of 1997 or to be incurred which are associated with the
issuance and collateralization of transitional funding
instruments and grantee instruments, if any, plus (v) commercially reasonable
costs
incurred from and after the effective date of this amendatory Act of 1997 or to
be incurred which are associated with issuance of
such transitional funding instruments,
including the costs incurred from and after the effective date of this
amendatory Act of 1997, or to be
incurred, in connection with transactions to recapitalize, refinance
or retire stock and/or debt, any associated taxes
 and the costs
incurred to obtain, collateralize, issue, service and/or
administer transitional funding instruments and grantee
instruments, if any, including interest and
other related fees, costs and charges (all of the foregoing
costs described in clauses (i) through (v) above to include
any taxes, where applicable, to the extent the costs thereof
would otherwise have been recoverable by an electric utility
through rates for tariffed services under the Public Utilities
Act as in effect prior to this amendatory Act of 1997), minus
(vi) the amount of any intangible transition property
previously created and established at the request of and for
the benefit of such electric utility in a prior transitional
funding order.  The transitional funding order shall authorize
(A) the sale, pledge, assignment or other transfer of, or the
establishment, creation and granting of an electric utility's,
assignee's or grantee's rights in and to, a specific dollar
amount of intangible transition property (which amount may be
in excess of the principal and interest payable on the
transitional funding instruments and grantee instruments, if
any, in order to provide for servicing costs and the funding
or maintenance of debt service and other reserves as security
to the holders of the transitional funding instruments), (B)
the issuance of a specific dollar amount of grantee
instruments or, if the transitional funding order does not
provide for the issuance of grantee instruments, a specific
dollar amount of transitional funding instruments, by or on
behalf of an electric utility, assignee, issuer or grantee, as
the case may be, and (C) the imposition and collection of a
specific amount of instrument funding charges projected to be
sufficient to pay when due the principal of and interest on
the corresponding grantee instruments or, if the transitional
funding order does not provide for the issuance of grantee
instruments, the corresponding transitional funding
instruments, in each case, together with premium, servicing
fees and other fees, costs and charges related thereto, and to
maintain any required reserves.  Except as otherwise
specifically set forth in the transitional funding order, the
transitional funding instruments issued pursuant to such order
shall be non-recourse to the credit or to any assets of the
electric utility other than any assets comprising intangible
transition property or grantee instruments, as applicable. The
obligation of retail customers and other persons to pay
instrument funding charges shall be contingent upon the
receipt by such retail customers and other persons of electric
power and energy, the kilowatt hours of which are included in
the calculation of the dollar amount of such instrument
funding charges, but the transitional funding order shall
specifically provide that such instrument funding charges will
not be subject to any defense, counterclaim or right of set
off arising as a result of failure by the pertinent electric
utility, upon whose application the intangible transition
property was created, to perform or provide past, present or
future services.  For purposes of the foregoing sentence, an
electric utility or alternative retail electric supplier
obligated to pay transition charges under subsection (b) of
Section 16-118 on behalf of certain retail customers shall be
deemed to have received the electric power and energy provided
to such retail customers.  The transitional funding order
shall also set forth the time to maturity for the grantee
instruments or, if the transitional funding order does not
provide for the issuance of grantee instruments, the time to
maturity for the transitional funding instruments issued
thereunder.  Concurrently with the sale, pledge, assignment or
other transfer of, or the establishment, creation and granting
of an electric utility's, assignee's or grantee's rights in
and to, intangible transition property and grantee
instruments, if any, and the issuance of transitional funding
instruments, an electric utility, grantee, issuer or an
assignee shall begin to impose and collect the specified
instrument funding charges from retail customers, classes of
retail customers, and any other persons or groups of persons
as set forth in the pertinent transitional funding order and
shall file tariffs in accordance with subsection (j) of
Section 18-104 of this Article.
(b) The transitional funding order shall require that
the proceeds from the issuance of transitional funding
instruments  shall be used for the purposes set
forth in subparagraph (1) of subsection (d) of Section 18-103
of this Article.
(c) Notwithstanding any other provision of law, neither
the transitional funding order nor the intangible transition
property created and established thereby nor the instrument
funding charges authorized to be imposed and collected
thereunder shall be subject to reduction, postponement,
impairment or termination by any subsequent action of the
Commission; provided, however, that nothing in this paragraph
is intended to supersede any right of any party to the
Commission's proceeding relating to the transitional funding
order to seek judicial review of such transitional funding
order.
(d) The Commission shall
provide in any transitional funding order for a
procedure for periodic adjustments to the instrument funding
charges set forth therein in order to ensure the repayment in
accordance with the projections set forth in the transitional
funding order of all grantee instruments or, if such
transitional funding order does not provide for the issuance
of grantee instruments, the corresponding transitional funding
instruments authorized therein and to reconcile the revenues
received from instrument funding charges during the applicable
adjustment period with the revenues projected to be received
from such charges as set forth in the relevant transitional
funding order.  Unless the transitional funding order
otherwise provides, such adjustments shall be required
whenever the instrument funding charges actually collected
during the applicable adjustment period by the appropriate
party or parties were greater or less than the instrument
funding charges projected in the relevant transitional funding
order to be collected in such adjustment period; provided
that, if so requested by an electric utility in any
application for a transitional funding order, the transitional
funding order may (i) specify a dollar or percentage amount of
variation from the projected revenues within which no such
adjustments will be required and/or (ii) set forth a maximum
adjustment amount for the instrument funding charges.  The
electric utility (or such other party as may be specified in
the pertinent transitional funding order) shall determine,
within 90 days of the end of each adjustment period (or such
shorter period as may be provided in the documents relating to
the pertinent transitional funding instruments or grantee
instruments, as applicable), whether any adjustments described
above in this subsection (d) of Section 18-104 are required.
If any such adjustments are so required, such adjustments
shall be implemented by the electric utility, grantee, issuer
or assignee, as applicable, with written notice to the
Commission, within such 90-day period (or such shorter period
as may be provided for in the documents relating to the
pertinent transitional funding instruments or grantee
instruments, as applicable).  Any such adjustment shall be
calculated to include amounts necessary for recovery of any
additional costs incurred by the grantee, electric utility,
assignee or issuer as a result of the relevant delay in
collections of instrument funding charges.  If, as a result of
any adjustment, the amount of any instrument funding charge,
as so adjusted, will exceed an amount per kilowatt-hour
greater than the amount per kilowatt-hour of
the instrument funding charge initially authorized by the
Commission in its transitional funding order,
then the relevant electric utility shall be obligated to file
amendatory tariffs in compliance with subsection (k) of
Section 18-104.
(e) Except where this Article
specifically requires otherwise, the collection of instrument
funding charges and the allocation of any such collections as
among holders, assignees, issuers, grantees and any other
parties entitled to receive portions thereof, may be
accomplished according to the provisions set forth in the
applicable transitional funding order, or, if the order is
silent on any such matters, according to the provisions set
forth in the documents relating to the pertinent transitional
funding instruments or grantee instruments, as applicable.
Notwithstanding the foregoing, the electric utility, grantee,
issuer or assignee, as applicable, shall determine no later
than 90 days after the stated maturity date of each series of
grantee instruments or, if the related transitional funding
order does not provide for the issuance of grantee
instruments, the stated maturity date of transitional funding
instruments, whether the aggregate amount of instrument
funding charges collected prior to such stated maturity date
exceeds the amount required to provide for the payment of all
principal, interest, premium and servicing and other fees,
costs and charges owing under such grantee instruments or
transitional funding instruments, as the case may be.  If it
is determined that the aggregate amount of instrument funding
charges collected exceeds the amount required to provide for
the payment of all principal, interest, premium and servicing
and other fees, costs and charges related to such grantee
instruments or transitional funding instruments, as the case
may be, such excess, together with any investment earnings
thereon, shall be paid to the owner of the pertinent
intangible transition property.
(f) Notwithstanding any other provision of law, on such
conditions as the Commission may approve in the pertinent
transitional funding order, the interest of an electric
utility, assignee, issuer or grantee in intangible transition
property or grantee instruments, as applicable, may be
assigned, sold or otherwise transferred, in whole or in part,
and may, in whole or in part, be pledged or assigned as
security to or for the benefit of a holder or holders.  To the
extent that any such interest or portion thereof is assigned,
sold or otherwise transferred or is established, created and
granted to a grantee or is pledged or assigned as security,
the Commission, in the pertinent transitional funding order,
shall authorize the electric utility or any affiliate thereof
to contract with the grantee, issuer, assignee or holders to
collect the applicable instrument funding charges for the
benefit and account of the grantee, issuer, assignee or
holder, and such electric utility or affiliate will, except as
otherwise specified in the transitional funding order, account
for and remit the applicable instrument funding charge,
without the obligation to remit any investment earnings
thereon, to or for the account of the grantee, issuer,
assignee or holder.  The obligation of such electric utility
or affiliate to collect and remit the applicable instrument
funding charges hereunder shall continue irrespective of
whether such electric utility is providing electric power
and/or other services to the retail customers and other
persons obligated to pay such instrument funding charges.  If
the documents creating the transitional funding instruments or
grantee instruments, if any, so provide, such obligations
shall, in the event of a default by such electric utility or
affiliate in performing such obligations, be undertaken and
performed by any other entity selected by the assignee or any
holder, group of holders or trustee or agent on behalf of such
holder or holders, as the case may be, (i) which provides
electric power or services to a person that was a retail
customer of such electric utility and (ii) from whom such
electric utility is entitled to recover transition charges
under Section 16-108; provided, however, that any failure by
the designated party to perform such obligations shall not
affect the existence of the intangible transition property or
the instrument funding charges or the validity or
enforceability of the instrument funding charges in accordance
with their terms.
(g) In its transitional funding order, the Commission
shall afford flexibility in establishing the terms and
conditions of the transitional funding instruments and the
grantee instruments, if any, including repayment schedules,
collateral, required debt service and other reserves, interest
rates and other financing costs and the ability of the
electric utility, at its option, to effect a series of
issuances of transitional funding instruments and grantee
instruments and correlated assignments, sales, pledges or
other transfers of intangible transition property and grantee
instruments, if any, not to exceed the aggregate dollar
amounts approved in the transitional funding order.
(h) The electric utility shall file a statement of the
final terms of the issuance of any series of transitional
funding instruments or grantee instruments, if any, with the
Commission within 90 days of the receipt of proceeds from such
issuance.  In addition, the Commission may require the electric utility to file
periodic
reports on its use of the proceeds at intervals of not less than one year.
(i) Any adjustment to instrument funding charges that is
necessary due to subsequent refinancing of transitional
funding instruments or grantee instruments, if any, shall be
authorized by the Commission in a supplemental order.
(j) In connection with the issuance of a transitional
funding order and as a precondition to the imposition of any
instrument funding charges authorized thereby, the relevant
electric utility shall file tariffs
directing that the
amount of such instrument funding charges be deducted,
stated, and collected separately from the amounts otherwise billed by such
electric utility for base rates and transition charges and,
where applicable, other rates for tariffed services as set
forth in the transitional funding order.  Upon the
effectiveness of such tariff, the amounts of instrument
funding charges thereby deducted and to be deducted shall have
become intangible transition property as specified in the
transitional funding order.  The Commission shall have no
authority to review such tariffs except to confirm
that the instrument
funding charges authorized in the transitional funding order
have been deducted, stated, and collected separately from base rates and
transition charges and, where applicable, other rates for
tariffed services otherwise in effect at such time, and the
filing of any such tariff may not be suspended for any other
reason.  No such deductions referred to in this subsection
shall be construed as a change in or otherwise require a
recalculation of the authorized amounts of such base rates,
transition charges, and other rates for tariffed services under
Section 16-102, 16-107, 16-108, or 16-110, as applicable.
Instrument funding charges shall be recoverable with respect
to electric power and energy or other services for which the
deductions provided in this subsection have become effective
and no such deduction shall be effective with respect to any
services or power in respect of which instrument funding
charges have not been so authorized and imposed.
(k) If any adjustment under subsection (d) of Section
18-104 results in the amount of any instrument funding charge
as so adjusted exceeding an amount per kilowatt-hour greater
than the amount per kilowatt-hour of the
instrument funding charge initially authorized by the
Commission in its transitional funding order,
the relevant electric utility shall file amendatory tariffs
reducing the amounts otherwise billed by such electric utility
for base rates and transition charges or, where applicable,
other rates for tariffed services, by the amount of such
excess.  Such amendatory tariff shall be subject to the
provisions of subsection (j) of Section 18-104, except that
(i) the failure of such amendatory tariff to become effective
for any reason shall not delay or impair the effectiveness of
the adjustments required under subsection (d) of Section 18-104 and (ii) the
obligation of retail customers and other
persons or groups of persons to pay instrument funding charges
as so adjusted shall not be subject to any defense,
counterclaim or right of set off arising as a result of
failure by the pertinent electric utility to comply with this
subsection (k) of Section 18-104.  Nothing in this subsection
(k) of Section 18-104 shall restrict any retail customer or
other person from bringing any suit in any court or from
exercising any other legal or equitable remedy against an
electric utility for any failure by such electric utility to
comply with this subsection (k) of Section 18-104.
(l) The intangible transition property created under a
transitional funding order and the authority of the grantee,
assignee, issuer, electric utility or other person authorized
thereunder to impose and collect instrument funding charges
shall continue beyond the final date set forth in the
applicable transitional funding order until such time as all
grantee instruments authorized in such order or, if the
applicable transitional funding order does not provide for
grantee instruments, the related transitional funding
instruments authorized in such order, have been paid in full.
Upon the later of the final date set forth in the applicable
transitional funding order for the imposition and collection
of instrument funding charges or the repayment in full of any
grantee instruments or transitional funding instruments, as
applicable, authorized in such order, the authority to impose
and collect the related instrument funding charges shall cease
and the relevant electric utility shall be entitled to file
tariffs revoking any deductions from base rates, transition
charges or other rates for tariffed services which were
granted in connection with such instrument funding charges
pursuant to subsection (j) of Section 18-104 or subsection
(k) of Section 18-104.  The Commission shall
have no authority to review such tariffs except to determine
that the rates and charges resulting from such revocation do
not exceed the applicable base rates, transition charges, or
other rates for tariffed services which would otherwise have
been in effect at the time of such revocation had no instrument funding charges
ever been deducted therefrom.
(m) If so requested by an electric utility in its application for a
transitional funding order, the Commission, in the relevant
transitional
funding order, may authorize (i) the issuance of grantee instruments
and/or
transitional funding instruments with expected maturity dates later than
December 31, 2008 but not later than December 31, 2010 and (ii) the
imposition
and collection of instrument funding charges by electric utilities, grantees,
or
assignees later than December 31, 2008 but not later than December 31, 2010 if
the electric utility includes in its application a pro forma calculation of the
impact of the issuance of the transitional funding instruments or grantee
instruments and the associated use of proceeds on the revenue requirement
established by the Commission in the electric utility's last rate case, with
such calculation to be presented for illustrative purposes only,
and the Commission,
in its review of the relevant application for the transitional funding order,
finds that such action is in the public interest and that the
instrument funding charges to be applied toward payment of transitional funding
instruments after December 31, 2008 will be deducted, stated, and collected
separately from base rates and, where applicable, other rates for tariffed
services otherwise in effect at such time and as scheduled to be in effect
through such expected maturity date.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-105)
Sec. 18-105. 
		Intangible transition property.
(a) Notwithstanding any other provision of this Act or
other law, the Commission is hereby authorized, in accordance
with the application for a transitional funding order, to
create, establish and grant rights in, to and under intangible
transition property in and to any grantee, electric utility,
issuer or assignee, and such party shall be granted the power
to levy general tariffs on retail customers of an electric
utility or any other person required to pay an instrument
funding charge in order to collect the instrument funding
charges related to the intangible transition property in which
such party has been granted rights and in order to facilitate
the issuance of transitional funding instruments and grantee
instruments, if any, to, by or on behalf of electric
utilities, grantees, issuers or assignees.  The Commission
shall be authorized to create, establish and grant such rights
hereunder in and to such party with or without receiving
consideration from such party.
(b) The State pledges to and agrees with the holders of
any transitional funding instruments who may enter into
contracts with an electric utility, grantee, assignee or
issuer pursuant to this Article XVIII that the State will not
in any way limit, alter, impair or reduce the value of
intangible transition property created by, or instrument
funding charges approved by, a transitional funding order so
as to impair the terms of any contract made by such electric
utility, grantee, assignee or issuer with such holders or in
any way impair the rights and remedies of such holders until
the pertinent grantee instruments or, if the related
transitional funding order does not provide for the issuance
of grantee instruments, the pertinent transitional funding
instruments and interest, premium and other fees, costs and
charges related thereto, as the case may be, are fully paid
and discharged.  Electric utilities, grantees and issuers are
authorized to include these pledges and agreements of the
State in any contract with the holders of transitional funding
instruments or with any assignees pursuant to this Article
XVIII and any assignees are similarly authorized to include
these pledges and agreements of the State in any contract with
any issuer, holder or any other assignee.
Nothing in this Article XVIII shall preclude the State of Illinois from
requiring adjustments as may otherwise be allowed by law to the electric
utility's base rates, transition charges, delivery services charges, or other
charges for tariffed services, so long as any such adjustment does not directly
affect or impair any instrument funding charges previously authorized by a
transitional funding order issued by the Commission.
(c) Transitional funding instruments and grantee
instruments, if any, issued under this Article do not
constitute debt or liability of the State or of any political
subdivision thereof, and transitional funding orders
authorizing such issuance do not constitute a pledge of the
full faith and credit of the State or of any of its political
subdivisions.  The issuance of transitional funding
instruments and grantee instruments, if any, under this
Article shall not directly, indirectly or contingently
obligate the State or any political subdivision thereof to
levy or to pledge any form of taxation therefor or to make any
appropriation for their payment, and any such transitional
funding instruments and grantee instruments, if any, shall be
payable solely from the intangible transition property or
grantee instruments, as the case may be, or from such other
proceeds or property as may be pledged therefor.  Nothing in
this Section shall be construed to prevent the State or any
political subdivision thereof from owning any interest in a
grantee, assignee or issuer or to prevent any electric
utility, issuer, grantee or assignee from selling, pledging or
assigning intangible transition property or grantee
instruments, as the case may be, or from providing recourse or
guarantees or any other third-party credit enhancement in
connection with such sale, pledge or assignment.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-106)
Sec. 18-106. Grantee instruments.
(a) If an electric utility to which grantee instruments
have been issued discontinues providing electric power and
energy services prior to the maturity date of such grantee
instruments, such electric utility shall not be entitled to
receive any payment on such grantee instruments on and after
the date of such discontinuance.
(b) Notwithstanding the provisions of subsection (a) of
this Section, any assignee holding such grantee instruments or
any holder of transitional funding instruments which are
secured by such grantee instruments shall nevertheless be
entitled to recover amounts payable by such grantee under such
grantee instruments in accordance with their terms as if such
electric utility had not discontinued the provision of
electric power and energy.
(c) Notwithstanding any other provision of law, the
issuance of any grantee instruments in accordance with the
terms and provisions of a transitional funding order shall for
all purposes be exempt from the application of Section 17-59 or Article 39 of the Criminal Code
of 2012 or the Criminal Code of 1961 and the Interest Act.
(Source: P.A. 97-1150, eff. 1-25-13.)
(220 ILCS 5/18-107)
Sec. 18-107. 
		
		Security interests in intangible transition
property and grantee instruments.
(a) Notwithstanding any other provision of law, neither
intangible transition property, grantee instruments nor any
right, title or interest therein, shall constitute property in
which a security interest may be created under the
Uniform Commercial Code nor shall any such rights be deemed
proceeds of any property which is not intangible transition
property or grantee instruments, as the case may be.  For
purposes of the foregoing, the terms "account", "general
intangible", "instrument", and "payment intangible" (as defined under Section
9-102 of the
Uniform Commercial Code) shall, as used in the
Uniform Commercial Code, be deemed to exclude any
such intangible transition property, grantee instruments or
any right, title, or interest therein.
(b) The granting, perfection and enforcement of security
interests in intangible transition property or grantee
instruments are governed by this Section rather than by
Article 9 of the Uniform Commercial Code.
(c) A valid and enforceable security interest in
intangible transition property and in grantee instruments
shall attach and be perfected only by the means set forth
below in this subsection (c) of Section 18-107:
(1) To the extent transitional funding instruments or     grantee instruments are purported to be secured by intangible transition property or to the extent transitional funding instruments are purported to be secured by grantee instruments, as the case may be, as specified in the applicable transitional funding order, the lien of the transitional funding instruments and grantee instruments, if any, shall attach automatically to such intangible transition property and grantee instruments, if any, from the time of issuance of the transitional funding instruments and grantee instruments, if any.  Such lien shall be a valid and enforceable security interest in the intangible transition property or the grantee instruments, as the case may be, securing the transitional funding instruments and grantee instruments, if any, and shall be continuously perfected if, before the date of issuance of the applicable transitional funding instruments or grantee instruments, if any, or within no more than 10 days thereafter, a filing has been made by or on behalf of the holder with the Chief Clerk of the Commission stating that such transitional funding instruments or grantee instruments, if any, have been issued.  Any such filing made with the Commission in respect to such transitional funding instruments or grantee instruments shall take precedence over any subsequent filing except as may otherwise be provided in the applicable transitional funding order.
(2) The liens under subparagraph (1) are enforceable     against the electric utility, any assignee, grantee or issuer, and all third parties, including judicial lien creditors, subject only to the rights of any third parties holding security interests in the intangible transition property or grantee instruments previously perfected in the manner described in this subsection if value has been given by the purchasers of transitional funding instruments or grantee instruments.  A perfected lien in intangible transition property and grantee instruments, if any, is a continuously perfected security interest in all then existing or thereafter arising revenues and proceeds arising with respect to the associated intangible transition property or grantee instruments, as the case may be, whether or not the electric power and energy included in the calculation of such revenues and proceeds have been provided.  The lien created under this subsection is perfected and ranks prior to any other lien, including any judicial lien, which subsequently attaches to the intangible transition property or grantee instruments, as the case may be, and to any other rights created by the transitional funding order or any revenues or proceeds of the foregoing.  The relative priority of a lien created under this subsection is not defeated or adversely affected by changes to the transitional funding order or to the instrument funding charges payable by any retail customer, class of retail customers or other person or group of persons obligated to pay such charges.
(3) The relative priority of a lien created under     this subsection is not defeated or adversely affected by the commingling of revenues arising with respect to intangible transition property or grantee instruments with funds of the electric utility or other funds of the assignee, issuer or grantee.
(4) If an event of default occurs under transitional     funding instruments or grantee instruments, the holders thereof or their authorized representatives, as secured parties, may foreclose or otherwise enforce the lien in the grantee instruments or in the intangible transition property securing the transitional funding instruments or grantee instruments, as applicable, subject to the rights of any third parties holding prior security interests in the intangible transition property or grantee instruments previously perfected in the manner provided in this subsection.  Upon application by the holders or their authorized representatives, without limiting their other remedies, the Commission shall order the sequestration and payment to the holders or their authorized representatives of revenues arising with respect to the intangible transition property or grantee instruments pledged to the holders.  An order under this subsection shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the electric utility, grantee, assignee or issuer.
(5) The Commission shall maintain segregated records     which reflect the date and time of receipt of all filings made under this subsection. The Commission may provide that transfers of intangible transition property or of grantee instruments be filed in accordance with the same system.
(Source: P.A. 90-561, eff. 12-16-97; 91-893, eff. 7-1-01.)
(220 ILCS 5/18-108)
Sec. 18-108. 
		Characterization of transfer. 
		A sale,
assignment or other transfer of intangible transition property
or grantee instruments which is expressly stated in the
documents governing  such transaction to be a sale or other
absolute transfer, in a transaction approved in a transitional
funding order, shall be treated as an absolute transfer of all
of the transferor's right, title and interest in, to and under
such intangible transition property or grantee instruments
which places such transferred property beyond the reach of the
transferor or its creditors, as in a true sale, and not as a
pledge or other financing, of such intangible transition
property or grantee instruments, as the case may be; provided,
however, that whether or not such transfer is deemed to be a
sale for federal tax purposes shall be governed by applicable
law without regard to this Section 18-108.  The characterization of any such
transfer as an absolute transfer and the corresponding characterization of the
transferee's property interest
shall not be defeated or adversely affected by, among other things:
(i)
the
commingling of revenues arising with respect to intangible
transition property or grantee instruments, as the case may
be, with funds of the electric utility or other funds of the
assignee, issuer or grantee; (ii) granting to holders of
transitional funding instruments a preferred right to the
intangible transition property, whether direct or indirect; (iii)
the provision by the electric utility, grantee, assignee, or issuer of any
recourse,
collateral or credit enhancement with respect to transitional
funding instruments or grantee instruments, as the case may be;
(iv) the retention by the assigning party of a partial interest in any
intangible
transition property, whether direct or indirect, or whether subordinate or
otherwise; or (v) the electric utility's responsibilities for collecting
instrument funding charges and any retention of bare legal title for the
purpose of such collection activities;
provided, however, that
nothing in this Section 18-108 is intended to preclude
consideration of such provisions in determining whether or not
such transfer is deemed to be a sale for federal tax purposes
under other applicable law.  A sale, assignment, or other
transfer of intangible transition property or grantee
instruments, as the case may be, shall be deemed perfected as
against third persons, including any judicial lien creditors,
when all of the following have taken place:
(1) The Commission has issued the transitional     funding order creating the intangible transition property; and
(2) A sale, assignment or transfer of the intangible     transition property or grantee instruments, as the case may be, has been executed and delivered in writing by the electric utility.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-109)
Sec. 18-109. 
		
		Actions with respect to intangible
transition property and related instrument
funding charges.
(a) Notwithstanding any other provision of this Act or
other law, any electric utility, issuer, assignee, grantee or
holder shall be expressly permitted hereby to bring action
against a retail customer or other person for nonpayment of
any instrument funding charges constituting a part of the
intangible transition property then held by such electric
utility, issuer, assignee, grantee or holder.
Notwithstanding any other provision of this Act, any such action shall be
subject to any and all applicable consumer credit protection laws and other
laws relating to origination, collection and reporting of consumer credit
obligations.
(b) Notwithstanding any other provision of this Act or
other law, the Commission shall have exclusive jurisdiction
over any dispute arising out of the obligations to impose and
collect instrument funding charges of an electric utility, its
successor or any other entity which provides electric power or
energy or delivery services to a person from whom the electric
utility is authorized to recover transition charges under
Section 16-108.  Nothing in this Section shall prevent
holders from bringing any suit in any court or from exercising
any other legal or equitable remedy against an electric
utility for failure to distribute collections of instrument
funding charges from retail customers, classes of retail
customers or other persons or from bringing suit against an
electric utility for damages arising from any failure by such
electric utility to perform the contractual obligations agreed
to by it under any documents pertaining to or executed in
connection with the transitional funding instruments issued by
or on behalf of such electric utility.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-110)
Sec. 18-110. 
		
		Taxation of transfers of intangible
transition property and grantee
instruments.
(a) Any sale, pledge, assignment or other transfer of
intangible transition property and grantee instruments, if
any, shall be exempt from any State or local sales, income,
transfers, gains, receipts or similar taxes.
(b) Any transfer of intangible transition property and
grantee instruments, if any, shall be treated as a pledge or
other financing for State tax purposes, including State and
local income and franchise taxes, unless the documents
governing such transfer specifically state that the transfer
is intended to be treated otherwise.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/18-111)
Sec. 18-111. 
		
		Limitations on issuance of transitional funding orders,
collection of instrument funding charges, and use of proceeds from issuance of
transitional funding instruments and grantee instruments.
Notwithstanding any other provisions of this Article XVIII:
(1) The Commission shall be prohibited from issuing any transitional funding
order prior to January 1, 1998, and no electric utility shall issue any
transitional funding instrument
or
grantee instrument, prior to August 1, 1998, or after December 31, 2004.
(2) The Commission shall be authorized to include in any transitional
funding order an expiration date after which date the electric utility shall no
longer be authorized to issue transitional funding instruments or grantee
instruments pursuant to such order, provided, that any such expiration date
specified in a transitional funding order shall be no earlier than 24 months
following the date of issuance of the relevant transitional funding order.
(3) No electric utility shall be allowed to increase its rates for tariffed
services, including delivery charges, or its transition charges, above the
level or levels which would have been allowed in accordance with this Act if
the electric utility were not authorized to impose and collect instrument
funding charges.
(4) Any transitional funding order issued by the Commission shall set forth,
based on the information set forth in the electric utility's application, the
procedures to be followed by the electric utility for assuring that proceeds
from the issuance of the transitional funding instruments or grantee
instruments
authorized by such order are applied in accordance with the terms of the order.
 Any use by an electric utility of the proceeds from issuance of transitional
funding instruments or grantee instruments other than in accordance with the
purposes specified in the relevant transitional funding order of the
Commission, pursuant to subsection (d) of Section 18-103, shall be void.
(Source: P.A. 90-561, eff. 12-16-97.)