UTILITY-RECOVERABLE EXPENSES

Illinois General Assembly - Full Text of HB4781

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4781

Introduced , by Rep. Theresa Mah

SYNOPSIS AS INTRODUCED:

220 ILCS 5/9-224

from Ch. 111 2/3, par. 9-224
220 ILCS 5/9-224.1 new
220 ILCS 5/9-225

from Ch. 111 2/3, par. 9-225
220 ILCS 5/9-229

Amends the Public Utilities Act. In provisions concerning expenses
that are recoverable by a public utility, provides that the Illinois
Commerce Commission shall not consider as an expense of any public utility
company, for the purpose of determining any rate or charge, any amount
expended for political activity or lobbying, any amount expended for
contributions to a trade association or a chamber of commerce, and any
amount expended by a public utility for director and officer liability
insurance and fiduciary liability insurance. Provides that, in determining
whether the purchase of other types of insurance by a public utility is
recoverable, the Commission shall determine whether the specific type of
insurance is financially beneficial to the public utility's ratepayers or
the public utility's shareholders. Provides that, if the Commission
determines that the insurance purchased by the public utility is
financially beneficial to its shareholders, then the purchase of the
insurance shall not be a recoverable expense. Provides that goodwill or
institutional advertising shall not be a recoverable expense by a public
utility. Provides that the Commission shall deem as a nonrecoverable
expense by a public utility (rather than the Commission shall specifically
assess the justness and reasonableness of) any amount expended by a public
utility to compensate attorneys or technical experts to prepare and
litigate a general rate case filing. Provides that the amount that is
deposited into the Consumer Intervenor Compensation Fund by a public
utility shall not be a recoverable expense by the public utility. Provides
that the computation of compensation awarded from the Fund shall take into
consideration the market rates paid to persons of comparable training and
experience who offer similar services, but may not exceed the comparable
market rate for services paid by the public utility as part of its
nonrecoverable rate case expense reported to the Commission (rather than
as part of its rate case expense). Makes other changes.
LRB104 16327 AAS 29713 b

A BILL FOR

HB4781
LRB104 16327 AAS 29713 b
1

AN ACT concerning regulation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Public Utilities Act is amended by changing
5
Sections 9-224, 9-225, and 9-229 and by adding Section 9-224.1
6
as follows:

7

(220 ILCS 5/9-224)

(from Ch. 111 2/3, par. 9-224)
8

Sec. 9-224.
The Commission shall not consider as an
9
expense of any public utility company, for the purpose of
10
determining any rate or charge, any amount expended for
11
political activity or lobbying
,
as defined in the Lobbyist
12
Registration Act
, and any amount expended for contributions to
13
a trade association or a chamber of commerce
.
14
(Source: P.A. 84-617.)

15

(220 ILCS 5/9-224.1 new)
16

Sec. 9-224.1.
Amounts expended by public utilities for
17
director and officer liability insurance and fiduciary
18
liability insurance.
The Commission shall not consider as an
19
expense of any public utility company, for the purpose of
20
determining any rate or charge, any amount expended by a
21
public utility for director and officer liability insurance
22
and fiduciary liability insurance. In determining whether the

HB4781
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LRB104 16327 AAS 29713 b
1
purchase of other types of insurance by the public utility is
2
recoverable, the Commission shall determine whether the
3
specific type of insurance is of financial benefit to the
4
public utility's ratepayers or the public utility's
5
shareholders. If the Commission determines that the insurance
6
purchased by the public utility is beneficial to its
7
shareholders, then the purchase of the insurance shall not be
8
a recoverable expense.

9

(220 ILCS 5/9-225)

(from Ch. 111 2/3, par. 9-225)
10

Sec. 9-225.
(1) For the purposes of this Section:
11

(a) "Advertising" means the commercial use, by an
12

electric, gas, water, or sewer utility, of any media,
13

including newspapers, printed matter, radio and
14

television, in order to transmit a message to a
15

substantial number of members of the public or to such
16

utility's consumers;
17

(b) "Political advertising" means any advertising for
18

the purpose of influencing public opinion with respect to
19

legislative, administrative or electoral matters, or with
20

respect to any controversial issue of public importance;
21

(c) "Promotional advertising" means any advertising
22

for the purpose of encouraging any person to select or use
23

the service or additional service of a utility or the
24

selection or installation of any appliance or equipment
25

designed to use such utility's service; and

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LRB104 16327 AAS 29713 b
1

(d) "Goodwill or institutional advertising" means any
2

advertising either on a local or national basis designed
3

primarily to bring the utility's name before the general
4

public in such a way as to improve the image of the utility
5

or to promote controversial issues for the utility or the
6

industry.
7

(2) In any general rate increase requested by any gas,
8
electric, water, or sewer utility company under the provisions
9
of this Act, the Commission shall not consider, for the
10
purpose of determining any rate, charge
,
or classification of
11
costs, any direct or indirect expenditures for promotional,
12
political,
or goodwill or
institutional
or goodwill

13
advertising, unless the Commission finds the advertising to be
14
in the best interest of the Consumer or authorized as provided
15
pursuant to subsection
(3)

3
of this Section.
16

(3) The following categories of advertising shall be
17
considered allowable operating expenses for gas, electric,
18
water, or sewer utilities:
19

(a) Advertising which informs consumers how they can
20

conserve energy or water, reduce peak demand for electric
21

or gas energy, or reduce demand for water;
22

(b) Advertising required by law or regulations,
23

including advertising required under Part I of Title II of
24

the National Energy Conservation Policy Act;
25

(c) Advertising regarding service interruptions,
26

safety measures or emergency conditions;

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LRB104 16327 AAS 29713 b
1

(d) Advertising concerning employment opportunities
2

with such utility;
3

(e) Advertising which promotes the use of energy
4

efficient appliances, equipment or services;
5

(f) Explanations of existing or proposed rate
6

schedules or notifications of hearings thereon;
7

(g) Advertising that identifies the location and
8

operating hours of company business offices;
9

(h) Advertising which promotes the shifting of demand
10

from peak to off-peak hours or which encourages the
11

off-peak usage of the service; and
12

(i) "Other" categories of advertisements not
13

includable in paragraphs (a) through (h), but which are
14

not political, promotional, institutional or goodwill
15

advertisements.
16

(4) Notwithstanding subsections (2) and (3) of this
17
Section, goodwill or institutional advertising shall not be a
18
recoverable expense.

19
(Source: P.A. 95-814, eff. 8-13-08.)

20

(220 ILCS 5/9-229)
21

Sec. 9-229.
Consideration of attorney and expert
22
compensation as an expense and
the Consumer Intervenor
23
Compensation Fund

intervenor compensation fund
.
24

(a) The Commission shall
deem as a nonrecoverable expense
25
by a public utility

specifically assess the justness and

HB4781
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LRB104 16327 AAS 29713 b
1
reasonableness of
any amount expended by a public utility to
2
compensate attorneys or technical experts to prepare and
3
litigate a general rate case filing. This issue shall be
4
expressly addressed in the Commission's final order.
5

(b) The State of Illinois shall create a Consumer
6
Intervenor Compensation Fund subject to the following:
7

(1) Provision of compensation for Consumer Interest
8

Representatives that intervene in Illinois Commerce
9

Commission proceedings will increase public engagement,
10

encourage additional transparency, expand the information
11

available to the Commission, and improve decision-making.
12

(2) As used in this Section, "Consumer interest
13

representative" means:
14

(A) a residential utility customer or group of
15

residential utility customers represented by a
16

not-for-profit group or organization registered with
17

the Illinois Attorney General under the Solicitation
18

for Charity Act;
19

(B) representatives of not-for-profit groups or
20

organizations whose membership is limited to
21

residential utility customers; or
22

(C) representatives of not-for-profit groups or
23

organizations whose membership includes Illinois
24

residents and that address the community, economic,
25

environmental, or social welfare of Illinois
26

residents, except government agencies or intervenors

HB4781
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LRB104 16327 AAS 29713 b
1

specifically authorized by Illinois law to participate
2

in Commission proceedings on behalf of Illinois
3

consumers.
4

(3) A consumer interest representative is eligible to
5

receive compensation from the
Consumer Intervenor
6

Compensation Fund

consumer intervenor compensation fund
if
7

its participation included lay or expert testimony or
8

legal briefing and argument concerning the expenses,
9

investments, rate design, rate impact, or other matters
10

affecting the pricing, rates, costs or other charges
11

associated with utility service, the Commission adopts a
12

material recommendation related to a significant issue in
13

the docket, and participation caused a significant
14

financial hardship to the participant; however, no
15

consumer interest representative shall be eligible to
16

receive an award pursuant to this Section if the consumer
17

interest representative receives any compensation,
18

funding, or donations, directly or indirectly, from
19

parties that have a financial interest in the outcome of
20

the proceeding.
21

(4) Within 30 days after September 15, 2021 (the
22

effective date of Public Act 102-662), each utility that
23

files a request for an increase in rates under Article IX
24

or Article XVI shall deposit an amount equal to one half of
25

the rate case attorney and expert expense allowed by the
26

Commission, but not to exceed $500,000, into the fund

HB4781
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LRB104 16327 AAS 29713 b
1

within 35 days of the date of the Commission's final Order
2

in the rate case or 20 days after the denial of rehearing
3

under Section 10-113 of this Act, whichever is later. The
4

Consumer Intervenor Compensation Fund shall be used to
5

provide payment to consumer interest representatives as
6

described in this Section
, and the amount deposited into
7

the Fund by a public utility shall not be a recoverable
8

expense
.
9

(5) An electric public utility with 3,000,000 or more
10

retail customers shall contribute $450,000 to the Consumer
11

Intervenor Compensation Fund within 60 days after
12

September 15, 2021 (the effective date of Public Act
13

102-662). A combined electric and gas public utility
14

serving fewer than 3,000,000 but more than 500,000 retail
15

customers shall contribute $225,000 to the Consumer
16

Intervenor Compensation Fund within 60 days after
17

September 15, 2021 (the effective date of Public Act
18

102-662). A gas public utility with 1,500,000 or more
19

retail customers that is not a combined electric and gas
20

public utility shall contribute $225,000 to the Consumer
21

Intervenor Compensation Fund within 60 days after
22

September 15, 2021 (the effective date of Public Act
23

102-662). A gas public utility with fewer than 1,500,000
24

retail customers but more than 300,000 retail customers
25

that is not a combined electric and gas public utility
26

shall contribute $80,000 to the Consumer Intervenor

HB4781
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LRB104 16327 AAS 29713 b
1

Compensation Fund within 60 days after September 15, 2021
2

(the effective date of Public Act 102-662). A gas public
3

utility with fewer than 300,000 retail customers that is
4

not a combined electric and gas public utility shall
5

contribute $20,000 to the Consumer Intervenor Compensation
6

Fund within 60 days after September 15, 2021 (the
7

effective date of Public Act 102-662). A combined electric
8

and gas public utility serving fewer than 500,000 retail
9

customers shall contribute $20,000 to the Consumer
10

Intervenor Compensation Fund within 60 days after
11

September 15, 2021 (the effective date of Public Act
12

102-662). A water or sewer public utility serving more
13

than 100,000 retail customers shall contribute $80,000,
14

and a water or sewer public utility serving fewer than
15

100,000 but more than 10,000 retail customers shall
16

contribute $20,000.
17

(6)(A) Prior to the entry of a Final Order in a
18

docketed case, the Commission Administrator shall provide
19

a payment to a consumer interest representative that
20

demonstrates through a verified application for funding
21

that the consumer interest representative's participation
22

or intervention without an award of fees or costs imposes
23

a significant financial hardship based on a schedule to be
24

developed by the Commission. The Administrator may require
25

verification of costs incurred, including statements of
26

hours spent, as a condition to paying the consumer

HB4781
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LRB104 16327 AAS 29713 b
1

interest representative prior to the entry of a Final
2

Order in a docketed case.
3

(B) If the Commission adopts a material recommendation
4

related to a significant issue in the docket and
5

participation caused a financial hardship to the
6

participant, then the consumer interest representative
7

shall be allowed payment for some or all of the consumer
8

interest representative's reasonable attorney's or
9

advocate's fees, reasonable expert witness fees, and other
10

reasonable costs of preparation for and participation in a
11

hearing or proceeding. Expenses related to travel or meals
12

shall not be compensable.
13

(C) The consumer interest representative shall submit
14

an itemized request for compensation to the Consumer
15

Intervenor Compensation Fund, including the advocate's or
16

attorney's reasonable fee rate, the number of hours
17

expended, reasonable expert and expert witness fees, and
18

other reasonable costs for the preparation for and
19

participation in the hearing and briefing within 30 days
20

of the Commission's final order after denial or decision
21

on rehearing, if any.
22

(7) Administration of the Fund.
23

(A) The Consumer Intervenor Compensation Fund is
24

created as a special fund in the State treasury. All
25

disbursements from the Consumer Intervenor Compensation
26

Fund shall be made only upon warrants of the Comptroller

HB4781
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LRB104 16327 AAS 29713 b
1

drawn upon the Treasurer as custodian of the Fund upon
2

vouchers signed by the Executive Director of the
3

Commission or by the person or persons designated by the
4

Director for that purpose. The Comptroller is authorized
5

to draw the warrant upon vouchers so signed. The Treasurer
6

shall accept all warrants so signed and shall be released
7

from liability for all payments made on those warrants.
8

The Consumer Intervenor Compensation Fund shall be
9

administered by an Administrator that is a person or
10

entity that is independent of the Commission. The
11

administrator will be responsible for the prudent
12

management of the Consumer Intervenor Compensation Fund
13

and for recommendations for the award of consumer
14

intervenor compensation from the Consumer Intervenor
15

Compensation Fund. The Commission shall issue a request
16

for qualifications for a third-party program administrator
17

to administer the Consumer Intervenor Compensation Fund.
18

The third-party administrator shall be chosen through a
19

competitive bid process based on selection criteria and
20

requirements developed by the Commission. The Illinois
21

Procurement Code does not apply to the hiring or payment
22

of the Administrator. All Administrator costs may be paid
23

for using monies from the Consumer Intervenor Compensation
24

Fund, but the Program Administrator shall strive to
25

minimize costs in the implementation of the program.
26

(B) The computation of compensation awarded from the

HB4781
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LRB104 16327 AAS 29713 b
1

Fund

fund
shall take into consideration the market rates
2

paid to persons of comparable training and experience who
3

offer similar services, but may not exceed the comparable
4

market rate for services paid by the public utility as
5

part of its
nonrecoverable
rate case expense
reported to
6

the Commission
.
7

(C)(1) Recommendations on the award of compensation by
8

the administrator shall include consideration of whether
9

the Commission adopted a material recommendation related
10

to a significant issue in the docket and whether
11

participation caused a financial hardship to the
12

participant and the payment of compensation is fair, just
13

and reasonable.
14

(2) Recommendations on the award of compensation by
15

the administrator shall be submitted to the Commission for
16

approval. Unless the Commission initiates an investigation
17

within 45 days after the notice to the Commission, the
18

award of compensation shall be allowed 45 days after
19

notice to the Commission. Such notice shall be given by
20

filing with the Commission on the Commission's e-docket
21

system, and keeping open for public inspection the award
22

for compensation proposed by the Administrator. The
23

Commission shall have power, and it is hereby given
24

authority, either upon complaint or upon its own
25

initiative without complaint, at once, and if it so
26

orders, without answer or other formal pleadings, but upon

HB4781
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LRB104 16327 AAS 29713 b
1

reasonable notice, to enter upon a hearing concerning the
2

propriety of the award.
3

(c) The Commission may adopt rules to implement this
4
Section.
5
(Source: P.A. 102-662, eff. 9-15-21; 103-605, eff. 7-1-24.)

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