2023 Illinois Compiled Statutes › Chapter 220 - UTILITIES › 220 ILCS 5/ - Public Utilities Act. › Article VII - Intercorporate Relations

(220 ILCS 5/Art. VII heading)
ARTICLE VII.  
		INTERCORPORATE RELATIONS
(220 ILCS 5/7-101) (from Ch. 111 2/3, par. 7-101)
Sec. 7-101. 
		Transactions with affiliated interests.
(1) The Commission shall have jurisdiction over holders of the
voting capital stock of all public utilities under the jurisdiction of the
Commission to such extent as may be necessary to enable the Commission to
require the disclosure of the identity in respective interests of every owner
of any substantial interest in such voting capital stocks.  One per centum
or more is a substantial interest, within the meaning of this subdivision.
(2) (i) Except as provided in subparagraph (ii) of this subsection (2),
the Commission shall have jurisdiction over affiliated interests having
transactions, other than ownership of stock and receipt of dividends thereon,
with public utilities under the jurisdiction of the Commission, to the extent
of access to all accounts and records of such affiliated interests relating
to such transactions, including access to accounts and records of joint or
general expenses, any portion of which may be applicable to such transactions;
and to the extent of authority to require such reports with respect to such
transactions to be submitted by such affiliated interests, as the Commission
may prescribe.
(ii) The Commission shall have jurisdiction over affiliated interests
having transactions, other than ownership of stock and receipt of dividends
thereon, with electric and gas public utilities under the jurisdiction of the
Commission, to the extent of access to all accounts and records of such
affiliated interests relating to such transactions, including access to
accounts and records of joint and general expenses with the electric or gas
public utility any portion of which is related to such transactions; and to the
extent of authority to require such reports with respect to such transactions
to be submitted by such affiliated interests, as the Commission may prescribe;
provided, however, that prior to requesting such access or reports from the
affiliated interest, the Commission shall first seek to obtain the information
that would be included in such accounts, records or reports from the public
utility.  The Commission shall not have access to any accounts and records of,
or require any reports from, an affiliated interest that are not related to a
transaction, including without limitation a transfer or exchange of tangible or
intangible assets, with the electric or gas public utility.  Nothing in this
paragraph shall limit the authority of the Commission otherwise provided under
this Act to have access to accounts and records of, or to require reports from,
the electric or gas public utility or to prescribe guidelines which the
electric or gas public utility must follow in allocating costs to transactions
with affiliated interests.
For the purpose of this Section, the phrase "affiliated
interests" means:
(a) Every corporation and person owning or holding,     directly or indirectly, 10% or more of the voting capital stock of such public utility;
(b) Every corporation and person in any chain of     successive ownership of 10% or more of voting capital stock;
(c) Every corporation, 10% or more of whose voting     capital stock is owned by any person or corporation owning 10% or more of the voting capital stock of such public utility, or by any person or corporation in any such chain of successive ownership of 10% or more of voting capital stock;
(d) Every corporation, 10% or more of whose voting     securities is owned, directly or indirectly by such public utility;
(e) Every person who is an elective officer or     director of such public utility or of any corporation in any chain of successive ownership of 10% or more of voting capital stock;
(f) Every corporation which has one or more elective     officers or one or more directors in common with such public utility;
(g) Every corporation or person which the Commission     may determine as a matter of fact after investigation and hearing is actually exercising any substantial influence over the policies and actions of such public utility even though such influence is not based upon stock holding, stockholders, directors or officers to the extent specified in this Section;
(h) Every person or corporation who or which the     Commission may determine as a matter of fact after investigation and hearing is actually exercising such substantial influence over the policies and actions of such public utility in conjunction with one or more other corporations or persons with which or whom they are related by ownership or blood relationship or by action in concert that together they are affiliated with such public utility within the meaning of this Section even though no one of them alone is so affiliated.
No such person or corporation is affiliated within the meaning of this
Section however, if such person or corporation is otherwise subject to
the jurisdiction of the Commission or such person or corporation has not had
transactions or dealings other than the holding of stock and the receipt of
dividends thereon with such public utility during the 2 year period next
preceding.
(3) No management, construction, engineering, supply, financial or similar
contract and no contract or arrangement for the purchase, sale, lease or
exchange of any property or for the furnishing of any service, property
or thing, hereafter made with any affiliated interest, as hereinbefore defined,
shall be effective unless it has first been filed with and consented to
by the Commission or is exempted in accordance with the provisions of this
Section or of Section 16-111 of this Act.  The Commission may condition such
approval
in such manner
as it may deem necessary to safeguard the public interest.  If it be found
by the Commission, after investigation and a hearing, that any such contract
or arrangement
is not in the public interest, the Commission may disapprove such contract or
arrangement.
Every contract or arrangement not consented to or excepted by the Commission
as provided for in this Section is void.
The consent to, or exemption or waiver of consent to, any contract or
arrangement under this Section or Section 16-111,
does not
constitute approval of payments thereunder for the purpose of computing
expense of operation in any rate proceeding.  However, the Commission shall
not require a public utility to make purchases at prices exceeding the prices
offered by an affiliated interest, and the Commission shall not be required
to disapprove or disallow, solely on the ground that such payments yield
the affiliated interest a return or rate of return in excess of that allowed
the public utility, any portion of payments for purchases from an affiliated
interest.
(4) The Commission may by general rules applicable alike to all public
utilities affected thereby waive the filing and necessity for approval of
contracts and arrangements described in subparagraph (3) of this Section in
cases of (a) contracts or arrangements made in the ordinary course of business
for the employment of officers or employees; (b) contracts or arrangements
made in the ordinary course of business for the purchase of services, supplies,
or other personal property at prices not exceeding the standard or prevailing
market prices, or at prices or rates fixed pursuant to law; (c) contracts
or arrangements where the total obligation to be incurred under such contract
or arrangement does
not exceed the lesser of (i) $5,000,000 or (ii) 2% of the public utility's
receipts from all tariffed services (as defined in Article XVI) in the
preceding calendar year; (d) the temporary leasing, lending or interchanging of
equipment in the ordinary course of business or in case of an emergency;
and (e) contracts made by a public utility with a person or corporation
whose bid is the most favorable to the public utility, as ascertained by
competitive bidding.
If the Commission, after a hearing, finds that any public utility is abusing
or has abused such general rule and thereby is evading compliance with the
standard established herein, the Commission may require such public utility
to thereafter file and receive the Commission's approval upon all such
transactions, but that general rule shall remain in full force and effect
as to all other public utilities.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/7-102) (from Ch. 111 2/3, par. 7-102)
Sec. 7-102. 
		Transactions requiring Commission approval.
(A) Unless the
consent and approval of the Commission is first
obtained or unless such approval is waived by the Commission or is exempted
in
accordance with the provisions of this Section or of any other Section of
this Act:
(a) No 2 or more public utilities may enter into     contracts with each other that will enable such public utilities to operate their lines or plants in connection with each other.
(b) No public utility may purchase, lease, or in any     other manner acquire control, direct or indirect, over the franchises, licenses, permits, plants, equipment, business or other property of any other public utility.
(c) No public utility may assign, transfer, lease,     mortgage, sell (by option or otherwise), or otherwise dispose of or encumber the whole or any part of its franchises, licenses, permits, plant, equipment, business, or other property, but the consent and approval of the Commission shall not be required for the sale, lease, assignment or transfer (1) by any public utility of any tangible personal property which is not necessary or useful in the performance of its duties to the public, or (2) by any railroad of any real or tangible personal property.
(d) No public utility may by any means, direct or     indirect, merge or consolidate its franchises, licenses, permits, plants, equipment, business or other property with that of any other public utility.
(e) No public utility may purchase, acquire, take or     receive any stock, stock certificates, bonds, notes or other evidences of indebtedness of any other public utility.
(f) No public utility may in any manner, directly or     indirectly, guarantee the performance of any contract or other obligation of any other person, firm or corporation whatsoever.
(g) No public utility may use, appropriate, or divert     any of its moneys, property or other resources in or to any business or enterprise which is not, prior to such use, appropriation or diversion essentially and directly connected with or a proper and necessary department or division of the business of such public utility; provided that this subsection shall not be construed as modifying subsections (a) through (e) of this Section.
(h) No public utility may, directly or indirectly,     invest, loan or advance, or permit to be invested, loaned or advanced any of its moneys, property or other resources in, for, in behalf of or to any other person, firm, trust, group, association, company or corporation whatsoever, except that no consent or approval by the Commission is necessary for the purchase of stock in development credit corporations organized under the Illinois Development Credit Corporation Act, providing that no such purchase may be made hereunder if, as a result of such purchase, the cumulative purchase price of all such shares owned by the utility would exceed one-fiftieth of one per cent of the utility's gross operating revenue for the preceding calendar year.
(B) Any public utility may present to the Commission for
approval
options or contracts to sell or lease real property, notwithstanding
that the value of the property under option may have changed between the
date of the option and the subsequent date of sale or lease. If the
options or contracts are approved by the Commission, subsequent sales or
leases in conformance with those options or contracts may be made by the
public utility without any further action by the Commission. If approval
of the options or contracts is denied by the Commission, the options or
contracts are void and any consideration theretofore paid to the public
utility must be refunded within 30 days following disapproval of the
application.
(C) The proceedings for obtaining the approval of the Commission
provided
for in this Section shall be as follows: There shall be filed with
the Commission a petition, joint or otherwise, as the case may be,
signed and verified by the president, any vice president, secretary,
treasurer, comptroller, general manager, or chief engineer of the
respective companies, or by the person or company, as the case may be,
clearly setting forth the object and purposes desired, and setting forth
the full and complete terms of the proposed assignment, transfer, lease,
mortgage, purchase, sale, merger, consolidation, contract or other
transaction, as the case may be. Upon the filing of such petition, the
Commission shall, if it deems necessary, fix a time and place for the
hearing thereon. After such hearing, or in case no hearing is required,
if the Commission is satisfied that such petition should reasonably be
granted, and that the public will be convenienced thereby, the
Commission shall make such order in the premises as it may deem proper
and as the circumstances may require, attaching such conditions as it
may deem proper, and thereupon it shall be lawful to do the things
provided for in such order. The Commission shall impose such conditions
as will protect the interest of minority and preferred stockholders.
(D) The Commission shall have power by general rules applicable alike to
all public utilities, other than electric and gas public utilities,
affected thereby to waive the filing and necessity
for approval of the following: (a) sales of property involving a
consideration of not more than $300,000 for utilities with gross revenues in
excess of $50,000,000 annually and a consideration of not more than
$100,000 for all other utilities;  (b)  leases, easements and
licenses involving a consideration or rental of not more than $30,000 per
year for utilities with gross revenues in excess of $50,000,000 annually and
a
consideration or rental of not more than $10,000 per
year for all other utilities; (c) leases of office building space not
required by
the public
utility in rendering service to the public; (d) the temporary leasing,
lending or interchanging of equipment in the ordinary course of business
or in case of an emergency; and (e) purchase-money mortgages given by a
public utility in connection with the purchase of tangible personal
property where the total obligation to be secured shall be payable
within a period not exceeding one year. However, if the
Commission,
after a hearing, finds that any public utility to which such rule is
applicable is abusing or has abused
such general rule and thereby is evading compliance with the standard
established herein, the Commission shall have power to require such
public utility to thereafter file and receive the Commission's approval
upon all such transactions as described in this Section, but such
general rule shall remain in full force and effect as to all other
public utilities to which such rule is applicable.
(E) The filing of, and the consent and approval of the Commission for,
any
assignment, transfer, lease, mortgage, purchase, sale, merger, consolidation,
contract or other transaction by an electric or gas public utility with gross
revenues in all jurisdictions of $250,000,000 or more annually involving a sale
price or annual consideration in an amount of $5,000,000 or less shall not be
required.  The Commission shall also have the authority, on petition by an
electric or gas public utility with gross revenues in all jurisdictions of
$250,000,000 or more annually, to establish by order higher thresholds than the
foregoing for the requirement of approval of transactions by the Commission
pursuant to this Section for the electric or gas public utility, but no greater
than 1% of the electric or gas public utility's average total gross utility
plant in service in the case of sale, assignment or acquisition of property, or
2.5% of the electric or gas public utility's total revenue in the case of
other sales price or annual consideration, in each case based on the preceding
calendar year, and subject to the power of the Commission, after notice and
hearing, to further revise those thresholds at a later date.  In addition to
the foregoing, the Commission shall have power by general rules applicable
alike to all electric and gas public utilities affected thereby to waive the
filing and necessity for approval of the following: (a) sales of property
involving a consideration of $100,000 or less for electric and gas utilities
with gross revenues in all jurisdictions of less than $250,000,000 annually;
(b)
leases, easements and licenses involving a consideration or rental of not more
than $10,000 per year for electric and gas utilities with gross revenues in all
jurisdictions of less than $250,000,000 annually; (c) leases of office building
space not required by the electric or gas public utility in rendering service
to the public; (d) the temporary leasing, lending or interchanging of equipment
in the ordinary course of business or in the case of an emergency; and (e)
purchase-money mortgages given by an electric or gas public utility in
connection with the purchase of tangible personal property where the total
obligation to be secured shall be payable within a period of one year or less.
However, if the Commission, after a hearing, finds that any electric or gas
public utility is abusing or has abused such general rule and thereby is
evading compliance with the standard established herein, the Commission shall
have power to require such electric or gas public utility to thereafter file
and receive the Commission's approval upon all such transactions as described
in this Section and not exempted pursuant to the first sentence of this
paragraph or to subsection (g) of Section 16-111 of this Act, but such general
rule shall remain in full force and effect as to all other electric and gas
public utilities.
Every assignment, transfer, lease, mortgage, sale or other
disposition or encumbrance of the whole or any part of the franchises,
licenses, permits, plant, equipment, business or other property of any
public utility, or any merger or consolidation thereof, and every
contract, purchase of stock, or other transaction referred to in this
Section and not exempted in accordance with the provisions of the immediately
preceding paragraph of this Section, made otherwise than in accordance with
an order
of the
Commission authorizing the same, except as provided in this Section,
shall be void. The provisions of this Section shall not apply to any
transactions by or with a political subdivision or municipal corporation
of this State.
(F) The provisions of this Section do not apply to the purchase or sale
of
emission allowances created under and defined in Title IV of the federal Clean
Air Act Amendments of 1990 (P.L. 101-549), as amended.
(Source: P.A. 90-561, eff. 12-16-97; 91-357, eff. 7-29-99.)
(220 ILCS 5/7-103) (from Ch. 111 2/3, par. 7-103)
Sec. 7-103. 
		
		(1) Whenever the Commission finds that the capital of any public
utility has become impaired, or will be impaired by the payment of a
dividend, the Commission shall have power to order said public utility to
cease and desist the declaration and payment of any dividend upon its
common and preferred stock, and no such public utility shall pay any
dividend upon its common and preferred stock until such impairment shall
have been made good.
(2) No utility shall pay any dividend upon its common stock and
preferred stock unless:
(a) The utility's earnings and earned surplus are sufficient to declare
and pay same after provision is made for reasonable and proper reserves.
(b) The dividend proposed to be paid upon such common stock can
reasonably be declared and paid without impairment of the ability of the
utility to perform its duty to render reasonable and adequate service at
reasonable rates.
(c) It shall have set aside the depreciation annuity prescribed by the
Commission or a reasonable depreciation annuity if none has been prescribed.
If any dividends on common stock are proposed to be declared and paid
other than as above provided, the utility shall give the Commission at
least thirty days' notice in writing of its intention to so declare and pay
such dividends and the Commission shall authorize the payment of such
dividends only if it finds that the public interest requires such payment.
Provided, however, that the Commission may grant such authority upon such
conditions as it may deem necessary to safeguard the public interest.
(Source: P.A. 84-617.)
(220 ILCS 5/7-104) (from Ch. 111 2/3, par. 7-104)
Sec. 7-104. 
		
		In a proceeding before the Commission in which the consent and approval
of the Commission to the sale, lease or other disposition of any real
property owned by a public utility is sought, any tenant in possession who
has been in possession of such property for more than 5 years and who has
made substantial improvements to the property has standing to appear and
offer evidence to the Commission with respect to the proposed disposition,
and the Commission, in making its determination, shall consider the rights
and equities of such tenant in possession.
(Source: P.A. 84-617; 84-1025.)
(220 ILCS 5/7-105)
Sec. 7-105. 
		
		(a) Notwithstanding anything to the contrary in Sections 6-103,
7-101, 7-102, 7-203, 7-204, and 7-204A of this Act or any rule or regulation
promulgated by the Commission, a public utility providing electric service to
more than 500,000 customers in this State may, within 550 days after the
effective date of this amendatory Act of 1993 or any extension of time pursuant
to Section 7-106 of this Act, without the approval or consent of, or prior
filing for the approval or consent of, the Commission:
(i) engage in only those transactions as are     reasonably necessary to create a holding company and make the public utility a subsidiary company of the holding company; and
(ii) loan to such holding company prior to the 60th     day after the day on which such public utility becomes a subsidiary company of the holding company, amounts which, in the aggregate, do not exceed the lesser of $10,000,000 or 2.5% of the retained earnings of the public utility as reported on its most recent annual report to the Commission.
(b) The terms of transactions authorized by Section 7-105(a)(i) shall
require that the holding company pay, or reimburse the public utility for, all
expenses incurred, services rendered, or facilities provided by the public
utility engaging in such transactions.  Such public utility shall incur no
liabilities in or in connection with such transactions other than expenses
incurred to effect such transactions.  The terms of any loan authorized by
Section 7-105(a)(ii) shall require that the loan (i) be repaid no later than
the 240th day after the public utility becomes a subsidiary company of the
holding company and (ii) bear interest at the rate of 10% per annum.
Contracts or arrangements between the public utility and any of its affiliates,
including the holding company, other than as authorized by Section 7-105(a),
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.
(c) Costs incurred by a public utility in effecting or attempting to effect
any transaction authorized by this Section 7-105 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.
(d) Not later than the earlier of (i) the 30th day after a public utility or
a company which seeks to become a holding company of such public utility in
accordance with this Section 7-105 files any registration statement or
application with any federal regulatory agency seeking authority for a
transaction in which such public utility would become a subsidiary of such
holding company or (ii) the 180th day after the effective date of this
amendatory Act of 1993, such public utility or holding company shall file with
the Commission, for the information of the Commission and the public, the
information, to the extent available to such public utility or company on such
day, described in Section 7-204A(a) of this Act, and such public utility or
company shall, until the day on which such public utility becomes a
subsidiary of a holding company, file with the Commission all additional such
information, and corrections, amendments, or supplements to all previously
filed such information, as soon as practicable after it becomes available to
such public utility or company; provided, that nothing in this Section 7-105
eliminates or restricts the Commission's authority, on timely motion of any
person or corporation, to enter an order to protect confidential, proprietary,
or trade secret data or information filed with the Commission.
(e) As used in Sections 7-105 and 7-106 of this Act, "subsidiary company"
and "holding company" mean a "subsidiary company" and a "holding company" as
defined in the Public Utility Holding Company Act of 1935, as amended.
(Source: P.A. 88-83.)
(220 ILCS 5/7-106)
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.)
(220 ILCS 5/7-107)
Sec. 7-107. 
		
		Nothing in Section 7-105 or 7-106 of this Act shall be
construed as (a) limiting the ability of any public utility to engage in, or
the authority of the Commission to authorize, any transaction subject to
Section 7-101, 7-102, 7-204, or 7-204A of this Act as in effect prior to the
effective date of this amendatory Act of 1993 or (b) affecting the validity of
any petition or application for authorization under Section 7-101, 7-102,
7-204, or 7-204A of this Act pending before the Commission as of the effective
date of this amendatory Act of 1993.
(Source: P.A. 88-83.)
(220 ILCS 5/7-108)
Sec. 7-108. 
		
		(a) Where an affiliate of an electric public utility has
offered an unregulated sale of electricity, and such affiliate would use a
portion of the utility's distribution or transmission facilities to distribute
or transmit the electricity that is to be so sold, the utility shall make such
portion of its facilities available to any other person or entity that offers
to make such sale, at the same price and under the same terms and conditions as
the utility makes such portion of its facilities available to its affiliate.
Nothing contained in this Section 7-108(a) shall be construed as requiring or
authorizing the Commission to require an electric public utility to make any
portion of its facilities available to its affiliate.
(b) Where an affiliate of a gas public utility has offered an unregulated
sale of gas, and such affiliate would use a portion of the utility's
distribution or transmission facilities to distribute or transmit the gas that
is to be so sold, the utility shall make such portion of its facilities
available to any other person or entity that offers to make such sale, at the
same price and under the same terms and conditions as the utility makes such
portion of its facilities available to its affiliate.  Nothing contained in
this Section 7-108(b) shall be construed as requiring or authorizing the
Commission to require a gas public utility to make any portion of its
facilities available to its affiliate.
(c) As used in this Section 7-108:
(1) The term "affiliate" shall mean (i) every     corporation and person owning or holding, directly or indirectly, 10% or more of the voting capital stock of a public utility; (ii) every corporation and person in any chain of successive ownership of 10% or more of the voting capital stock of such public utility; (iii) every corporation, 10% or more of whose voting capital stock is owned by any person or corporation owning 10% or more of the voting capital stock of such public utility, or by any person or corporation in any such chain of successive ownership of 10% or more of the voting capital stock of such public utility; (iv) every entity, 10% or more of whose voting securities is owned, directly or indirectly, by such public utility or by an entity described in clauses (i), (ii), or (iii) of this paragraph; and (v) every entity in which such public utility or an entity described in clauses (i), (ii), (iii), or (iv) of this paragraph owns, controls, or holds, directly or indirectly, a financial interest entitling it or a contract right potentially entitling it to 10% or more of revenues or profits and losses of any such entity.
(2) the term "voting security" shall mean a "voting     security" as defined in the Public Utility Holding Company Act of 1935, as amended, and shall also mean any security giving the owner or holder thereof the privilege to convert such security in whole or in part into a voting security, or any security directly or indirectly secured in whole or in part by the pledge of a voting security.
(3) the term "security" shall mean a "security" as     defined in the Public Utility Holding Company Act of 1935, as amended.
(4) the term "unregulated sale" shall mean a sale of     electricity or gas to an end-user for use in facilities in this State, the price of which sale is not regulated by the Commission.
(Source: P.A. 88-83.)
(220 ILCS 5/7-201) (from Ch. 111 2/3, par. 7-201)
Sec. 7-201. 
		
		No franchise, license, permit or right to own, operate, manage or
control any public utility, except common carriers engaged in interstate
commerce and except telegraph or telephone companies engaged in interstate
commerce, and except other public utility companies owning or operating a
public utility system situated partly in Illinois and partly in an
adjoining State or States, shall be hereafter granted or transferred to any
grantee or transferee other than a corporation duly incorporated under the
laws of this State.
No public utility shall be in any manner exempt from the provisions of
this Act because or by virtue of the fact that it may be or may have been
incorporated or organized under the laws of another State, or of the United
States, or of a foreign country, except to the extent expressly provided herein.
(Source: P.A. 84-617.)
(220 ILCS 5/7-202) (from Ch. 111 2/3, par. 7-202)
Sec. 7-202. 
		(Repealed).
(Source: P.A. 90-372, eff. 7-1-98. Repealed internally, eff. 7-1-98.)
(220 ILCS 5/7-203) (from Ch. 111 2/3, par. 7-203)
Sec. 7-203. 
		
		No franchise, license, permit or right to own, operate, manage or
control any public utility shall be assigned, transferred or leased nor shall
any contract or agreement with reference to or affecting any such franchise,
license, permit or right be valid or of any force or effect whatsoever,
unless such assignment, lease, contract, or agreement shall have been approved
by the Commission. Such permission shall not be construed to revive or
validate any lapsed or invalid franchise, license, permit or right,
or to enlarge or add to the powers and privileges contained in the grant
of any franchise, license, permit or right, or to waive any forfeiture.
The provisions of this Section shall not apply to any transactions by or
with a political subdivision or municipal corporation organized under the
laws of this State.
(Source: P.A. 84-617.)
(220 ILCS 5/7-204) (from Ch. 111 2/3, par. 7-204)
Sec. 7-204. Reorganization defined; Commission approval.
(a) For purposes of this Section, "reorganization" means any
transaction which, regardless of the means by which it is accomplished,
results in a change in the ownership of a majority of the voting capital
stock of an Illinois public utility; or the ownership or control of any
entity which owns or controls a majority of the voting capital stock of a
public utility; or by which 2 public utilities merge, or by which a public
utility acquires substantially all of the assets of another public utility;
provided, however, that "reorganization" as used in this
Section shall not include a mortgage or pledge transaction entered into to
secure a bona fide borrowing by the party granting the mortgage or making the
pledge.
In addition to the foregoing, "reorganization" shall include for purposes
of this Section any transaction which, regardless of the means by which it
is accomplished, will have the effect of terminating the affiliated
interest status of any entity as defined in paragraph (a), (b), (c) or
(d) of subsection (2) of Section 7-101 of this Act where such entity had
transactions with the public utility, in the 12 calendar months
immediately preceding the date of termination of such affiliated interest
status subject to subsection (3) of Section 7-101 of this Act with a
value greater than 15% of the public utility's revenues for that same
12-month period.  If the proposed transaction would have
the effect of
terminating the affiliated interest status of more than one Illinois public
utility, the utility with the greatest revenues for the 12-month period
shall be used to determine whether such proposed transaction is a
reorganization for the purposes of this Section.  The Commission shall have
jurisdiction over any reorganization as defined herein.
(b) No reorganization shall take place without prior Commission
approval.
The Commission shall not approve any proposed reorganization if the
Commission finds, after notice and hearing, that the reorganization will
adversely affect the utility's ability to perform its duties under this
Act. The Commission shall not approve any proposed reorganization unless the Commission finds, after notice and hearing, that:
(1) the proposed reorganization will not diminish the     utility's ability to provide adequate, reliable, efficient, safe and least-cost public utility service;
(2) the proposed reorganization will not result in     the unjustified subsidization of non-utility activities by the utility or its customers;
(3) costs and facilities are fairly and reasonably     allocated between utility and non-utility activities in such a manner that the Commission may identify those costs and facilities which are properly included by the utility for ratemaking purposes;
(4) the proposed reorganization will not     significantly impair the utility's ability to raise necessary capital on reasonable terms or to maintain a reasonable capital structure;
(5) the utility will remain subject to all applicable     laws, regulations, rules, decisions and policies governing the regulation of Illinois public utilities;
(6) the proposed reorganization is not likely to have     a significant adverse effect on competition in those markets over which the Commission has jurisdiction;
(7) the proposed reorganization is not likely to     result in any adverse rate impacts on retail customers.
(c) The Commission shall not approve a reorganization
without ruling on: (i) the allocation of any savings resulting
from the proposed reorganization; and (ii) whether the companies should
be allowed to recover any costs incurred in accomplishing the
proposed reorganization and, if so, the amount of costs eligible for
recovery and how the costs will be allocated.
(d) The Commission shall issue its Order approving or
denying the proposed reorganization within 11 months after the
application is filed. The Commission may extend the deadline
for a period equivalent to the length of any delay which the
Commission finds to have been caused by the Applicant's
failure to provide data or information requested by the
Commission or that the Commission ordered the Applicant to
provide to the parties. The Commission may also extend the
deadline by an additional period not to exceed 3 months to
consider amendments to the Applicant's filing, or to consider
reasonably unforeseeable changes in circumstances subsequent
to the Applicant's initial filing.
(e) Subsections (c) and (d) and subparagraphs (6) and (7) of
subsection (b) of this Section shall apply only to merger
applications submitted to the Commission subsequent to April
23, 1997. No other Commission approvals shall be required for
mergers that are subject to this Section.
(f) In approving any proposed reorganization pursuant to this Section
the
Commission may impose such terms, conditions or requirements as, in its
judgment, are necessary to protect the interests of the public utility and its
customers.
(Source: P.A. 100-840, eff. 8-13-18; 101-81, eff. 7-12-19.)
(220 ILCS 5/7-204A) (from Ch. 111 2/3, par. 7-204A)
Sec. 7-204A. 
		
		(a) No Illinois public utility may reorganize as defined
in Section 7-204 until the Commission has approved the application therefor.
 The application for approval of reorganization must at a minimum include
the following information:
(1) The names and corporate relationships of all companies which are
affiliated interests of the public utility on the date the public utility applies for
reorganization and the name of any parent or subsidiary
corporation of the public utility;
(2) A description of how the public utility plans to reorganize,
including, if available at the time of application:
(i) copies of the organizational documents associated with the
reorganization, including articles of incorporation or amendments to the
articles of incorporation of all companies including the public utility and
any affiliated interests;
(ii) copies of any filings, including securities filings, related to the
reorganization made with any agency of this State or the federal government;
(3) The costs and fees attributable to the reorganization;
(4) The method by which management, personnel, property, income, losses,
costs and expenses will be allocated between the public utility and any
affiliated interest;
(5) A copy of any proposed agreement between the public utility and any
person with which it will be an affiliated interest at the time of the
application for reorganization;  the application for reorganization shall be amended to
provide the Commission with any proposed agreement up until the time the
reorganization is approved;
(6) An identification of all public utility
assets or information in
existence, such as customer
lists, which the applicant plans to transfer to or permit an affiliated
interest to use, which identification shall include a description of the
proposed terms and conditions under which the assets or information will be
transferred or used; and
(7) A copy of a forecast showing the capital requirements of
the public utility at the time of the proposed reorganization.  The
forecast shall include for each public utility on an annual basis
for 5 years following the year of application:
(i) projected capital requirements;
(ii) sources of capital;
(iii) the range of the projected capital structure; and
(iv) the assumptions underlying the information included in the forecast.
(b) No public utility may permit the use of any public utility employee's
services by any affiliated interest except by contract or arrangement.  No
public utility may sell, lease, transfer to or exchange with any affiliated
interest any property except by contract or arrangement.  The contract or
arrangement herein is subject to Commission review at the discretion of the
Commission, in the same manner as it may review any other public utility
and its affiliated interest.
This Section 7-204A shall not apply to any telecommunications carrier
regulated pursuant to Article XIII of this Act or to any public utility
which became a subsidiary of another corporation
prior to the effective date of this
amendatory Act of 1989.  However, this amendatory Act of 1989 may not be
deemed to diminish the Commission's control and regulation over any public utility.
(Source: P.A. 86-218.)
(220 ILCS 5/7-205) (from Ch. 111 2/3, par. 7-205)
Sec. 7-205. 
		
		If any public utility is engaged in carrying on any business
other than that of a public utility, which other business is not otherwise
subject to the jurisdiction of the Commission, that public utility in
respect of such other business shall be subject to inquiry, examination and
inspection by the Commission in the same manner as the public utility
business insofar as such inquiry, examination and inspection may be
necessary to enforce any provision of this Act. The determination of the
Commission that a necessity for any regulation of nonpublic business of a
public utility exists shall be prima facie evidence of the fact in any
action in a court of this State to enforce or set aside an order or ruling
of the Commission.
Every public utility and affiliated interest thereof shall provide the
Commission with access to books, records, accounts, documents and other
data and information which the Commission finds necessary to effectively
implement and effectuate the provisions of Section 7-204.
(Source: P.A. 84-617.)
(220 ILCS 5/7-206) (from Ch. 111 2/3, par. 7-206)
Sec. 7-206. 
		Separate accounts for nonpublic business of public utility. 
		
The Commission may require every public utility engaged
directly or indirectly in any other than a public utility business, as
defined by law, to keep separately in like manner and form the accounts
of
all such other business, and the Commission may provide for the examination
and inspection of the books, accounts, papers and records of such other
business, in so far as may be necessary to enforce any provisions of this
Act. The Commission shall have the power to inquire as to and prescribe the
apportionment of capitalization, earnings, debts and expenses fairly and
justly to be awarded to or borne by the ownership, operation, management or
control of such public utility as distinguished from such other business.
Provided, however, that an electric or gas public utility shall not be
required to maintain the accounts of any non-public utility business in the
same
manner and form as the electric or gas public utility is required to keep the
accounts of its public utility business unless expressly ordered by the
Commission.
(Source: P.A. 90-561, eff. 12-16-97.)
(220 ILCS 5/7-207) (from Ch. 111 2/3, par. 7-207)
Sec. 7-207. 
		Nonprofit affiliates.
(a) A public utility or telecommunications carrier may organize a
not-for-profit corporation for the purpose of assisting low-income
consumers in the acquisition of utility and telephone services.  The
not-for-profit corporation may be organized by a public utility, a
telecommunications carrier, a combination of either or both, or in
combination with any other person or organization upon application to and
approval by the Commission.
(b) The Commission shall promulgate reasonable rules and regulations for
the administration of this Section.
(Source: P.A. 87-449.)
(220 ILCS 5/7-208)
Sec. 7-208. 
		HVAC affiliate marketing.
(a) "HVAC affiliate" means all affiliated interests of a gas utility
that
provide heating, ventilating, or air conditioning services to customers
within the service territory of the affiliated gas utility.
(b) When an HVAC affiliate advertises or markets heating, ventilating, or
air
conditioning services to the public, it shall include a disclaimer
that, if audible, is conspicuous and if printed is of sufficient size to be
clearly legible, and that states:
(Insert name of affiliate) is an affiliate of (insert name of gas
utility) and is not regulated by the Illinois Commerce Commission.
Customers are not required to buy products or services from (insert name
of affiliate) in order to receive the same quality of service from the gas
utility.
(c) The requirements in subsection (b) apply to all forms of advertising and
marketing, including, but not limited to, print, television, radio, internet,
telephonic, bill inserts, and newsletters.
(Source: P.A. 92-852, eff. 8-26-02.)
(220 ILCS 5/7-209)
Sec. 7-209. 
		Marketing limitation; gas utilities. 
		If a gas utility has an
HVAC
affiliate, the prohibition contained in this Section applies to the employees
of the gas
utility. While a gas utility employee is responding to a service call related
to services
provided under tariffs on file with the Illinois Commerce Commission, the
employee of
the gas utility is prohibited from marketing the services of an HVAC affiliate;
provided,
however, the gas utility employee may refer the customer to the telephone
directory in
response to specific requests for referrals. If a customer's gas appliance or
gas service
has been disconnected due to an emergency situation that requires immediate
attention, a
gas utility employee may provide to that customer a list, including contact
phone
numbers, that includes HVAC affiliates and non-affiliated entities that provide
heating,
ventilating, or air conditioning services.
(Source: P.A. 92-852, eff. 8-26-02.)
(220 ILCS 5/7-210)
Sec. 7-210. Commission oversight of nonpublic, unregulated sales
at retail of natural gas by public utilities.
(a) This Section shall apply to any gas utility that served more than 60,000 gas customers but less than 75,000 gas customers in this State on January 1, 2000 and that provides competitive electric power and energy to electric delivery service customers through a business division of its electric utility pursuant to Section 16-116. For the purposes of this Section, terms shall have the same
meaning as defined in Section 7-108, Article XVI, and Article XIX.
(b) After the effective date of this amendatory Act of the 93rd General Assembly, unregulated sales
of natural gas by a gas utility within or outside its service area
shall be subject to the provisions of this Section. This Section
shall not be interpreted to invalidate any contract for unregulated
sales of natural gas executed by a gas utility prior to the
effective date of this amendatory Act of the 93rd General Assembly, but unregulated sales of natural
gas pursuant to such contract after the effective date of this
amendatory Act of the 93rd General Assembly shall be subject to the provisions of this Section.
(c) A gas utility offering unregulated sales of natural gas to an
end-use customer within or outside its service area shall be
subject to Sections 7-102(g), 7-205, 7-206, and 9-230 with respect to such sales.
(d) Notwithstanding any language of Article XIX to the contrary,
a gas utility offering unregulated sales of natural gas to a
residential customer or a small commercial customer within or
outside its service area shall be subject to Sections 19-110(e)(2),
19-110(e)(3), 19-110(e)(5), 19-115, and 19-120.
(e) A gas utility offering unregulated sales of natural gas to an
end-use customer within or outside its service area shall not
subsidize such sales through the utility's regulated business. Costs and revenues from the gas utility's unregulated sales of gas to an end-use customer within or outside its service area shall not be included in the calculation of the utility's regulated gas rates and charges.
(f) A gas utility offering unregulated sales of natural gas to an
end-use customer within or outside its service area shall not
discriminate in the provision of regulated gas service based upon
the existence or terms of an unregulated sale of natural gas.
(g) The Commission shall require a gas utility to file reports regarding its unregulated sales of natural gas in the State.  The reports shall be treated as confidential documents.  To the extent the Commission determines it to be necessary and in
the public interest, the Commission may order an audit of a gas utility regarding its unregulated sales of natural gas in the State.
(h) The Commission shall have the authority to require the gas utility to file its contracts for unregulated sales of natural gas in the State.  The contracts shall be treated as confidential documents.
(i)   Within 120 days after the effective date of this amendatory Act of the 93rd General Assembly, the Commission shall adopt provisions requiring functional separation between a gas utility's unregulated retail sales of natural gas in the State and its regulated retail gas services in the State.  In establishing or considering the functional separations provisions, the Commission shall take into account the effects on the cost and reliability of service and the obligation of the gas utility under the Act.  The Commission shall adopt separations provisions that are a cost effective means to ensure compliance with this Section.  The provisions adopted by the Commission shall permit a gas utility to offer unregulated retail sales of natural gas in the State through the same business division of the utility that offers competitive electric power and energy to electric delivery service customers.  Until provisions are adopted by the Commission, the gas utility shall comply with the functional separations rules for electric utilities adopted pursuant to Section 16-119A, to the extent determined applicable by the Commission through emergency rules established within 60 days of the passage of this Act.
(j) A gas utility shall not release or assign gas storage capacity procured for its regulated Illinois retail customers to its business division offering unregulated retail sales of natural gas or allow such storage capacity to be managed by that business division.
(k)  Except as approved by the Commission, a gas utility shall not use gas commodity or interstate pipeline services for unregulated retail sales of natural gas in the State if such commodity or service was procured for its regulated Illinois retail customers.
(l) In addition to any other remedy provided in the Act, the Commission may order a gas utility to cease offering unregulated retail sales of natural gas in the State if it finds, after notice and hearing, that the gas utility willfully violated this Section.
(m) This Section shall not be applicable to unregulated sales of natural gas by an affiliate of a gas utility.  Nothing herein shall be construed as impacting the applicability of other Sections of the Act to the unregulated sale of natural gas by an affiliate.
(Source: P.A. 93-1052, eff. 1-1-05.)
(220 ILCS 5/7-213)
Sec. 7-213. Limitations on the transfer of water systems.
(a) In the event of a sale, purchase, or any other transfer of ownership, including, without limitation, the acquisition by eminent domain, of a water system, as defined under Section 11-124-5 of the Illinois Municipal Code, operated by a privately held public water utility, the water utility's contract or agreements with the acquiring entity (or, in the case of an eminent domain action, the court order) must require that the acquiring entity hire a sufficient number of non-supervisory employees to operate and maintain the water system by initially making offers of employment to the non-supervisory workforce of the water system at no less than the wage rates, and substantially equivalent fringe benefits and terms and conditions of employment that are in effect at the time of transfer of ownership of the water system. The wage rates and substantially equivalent fringe benefits and terms and conditions of employment must continue for at least 30 months after the time of the transfer of ownership unless the parties mutually agree to different terms and conditions of employment within that 30-month period.
(b) The privately held public water utility shall offer a transition plan to those employees who are not offered jobs by the acquiring entity because that entity has a need for fewer workers. The transition plan shall mitigate employee job losses to the extent practical through such means as offers of voluntary severance, retraining, early retirement, out placement, or related benefits. Before any reduction in the workforce during a water system transaction, the privately held public water utility shall present to the employees, or their representatives, a transition plan outlining the means by which the utility intends to mitigate the impact of the workforce reduction of its employees.
(Source: P.A. 103-154, eff. 6-30-23.)