UTILITY-TERMINATION/REFERENDUM

Illinois General Assembly - Full Text of SB3579

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3579

Introduced 2/5/2026, by Sen. Sue Rezin

SYNOPSIS AS INTRODUCED:

220 ILCS 5/8-205

from Ch. 111 2/3, par. 8-205
220 ILCS 5/9-210.5

Amends the Public Utilities Act. Provides that termination of water
utility service to a residential user, including a tenant of a
mastermetered apartment building, for nonpayment of bills is prohibited:
(1) on any day when the National Weather Service forecast for the following
6 days covering the area of the utility in which the residence is located
includes a forecast that the temperature will be 32 degrees Fahrenheit or
below; (2) on any day when the National Weather Service forecast for the
following 6 days covering the area of the utility in which the residence is
located includes a forecast that the temperature will be 90 degrees
Fahrenheit or above; or (3) when the National Weather Service issues an
excessive heat watch, excessive heat warning, or heat advisory covering
the area of the utility in which the residence is located. In provisions
concerning procedures for a large public utility to acquire a water or
sewer utility, provides that if the water or sewer utility being acquired
is owned by the State or a political subdivision of the State, a referendum
will be required to approve the acquisition of the water or sewer utility
by the large public utility (rather than only requiring a public meeting
and publication of the terms of acquisition in a newspaper of general
circulation in the area that the water or sewer utility operates).
Effective immediately.
LRB104 16285 AAS 29670 b

A BILL FOR

SB3579
LRB104 16285 AAS 29670 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 8-205 and 9-210.5 as follows:

6

(220 ILCS 5/8-205)

(from Ch. 111 2/3, par. 8-205)
7

Sec. 8-205.
Termination of a utility service.

8

(a) Termination of gas and electric utility service to all
9
residential users, including all tenants of mastermetered
10
apartment buildings, for nonpayment of bills, where gas or
11
electricity is used as the only source of space heating or to
12
control or operate the only space heating equipment at the
13
residence is prohibited:
14

(1) on any day when the National Weather Service
15

forecast for the following 24 hours covering the area of
16

the utility in which the residence is located includes a
17

forecast that the temperature will be 32 degrees
18

Fahrenheit or below; or
19

(2) on any day preceding a holiday or a weekend when
20

such a forecast indicated that the temperature will be 32
21

degrees Fahrenheit or below during the holiday or weekend.
22

(b) If gas or electricity is used as the only source of
23
space cooling or to control or operate the only space cooling

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LRB104 16285 AAS 29670 b
1
equipment at a residence, then a utility may not terminate gas
2
or electric utility service to a residential user, including
3
all tenants of mastermetered apartment buildings, for
4
nonpayment of bills:
5

(1) on any day when the National Weather Service
6

forecast for the following 24 hours covering the area of
7

the utility in which the residence is located includes a
8

forecast that the temperature will be 90 degrees
9

Fahrenheit or above;
10

(2) on any day preceding a holiday or weekend when the
11

National Weather Service for the following 24 hours
12

covering the area of the utility in which the residence is
13

located includes a forecast that the temperature will be
14

90 degrees Fahrenheit or above during the holiday or
15

weekend; or
16

(3) when the National Weather Service issues an
17

excessive heat watch, heat advisory, or excessive heat
18

warning covering the area of the utility in which the
19

residence is located.
20

(c) Termination of water utility service to a residential
21
user, including a tenant of a mastermetered apartment
22
building, for nonpayment of bills is prohibited:

23

(1) on any day when the National Weather Service
24

forecast for the following 6 days covering the area of the
25

utility in which the residence is located includes a
26

forecast that the temperature will be 32 degrees

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Fahrenheit or below;

2

(2) on any day when the National Weather Service
3

forecast for the following 6 days covering the area of the
4

utility in which the residence is located includes a
5

forecast that the temperature will be 90 degrees
6

Fahrenheit or above; or

7

(3) when the National Weather Service issues an
8

excessive heat watch, excessive heat warning, or heat
9

advisory covering the area of the utility in which the
10

residence is located.

11
(Source: P.A. 103-19, eff. 1-1-24; 103-605, eff. 7-1-24.)

12

(220 ILCS 5/9-210.5)
13

(Section scheduled to be repealed on June 1, 2028)
14

Sec. 9-210.5.
Valuation of water and sewer utilities.
15

(a) In this Section:
16

"Disinterested" means that the person directly
17

involved (1) is not a director, officer, or an employee of
18

the large public utility or the water or sewer utility or
19

its direct affiliates or subsidiaries for at least 12
20

months before becoming engaged under this Section; (2)
21

shall not derive a material financial benefit from the
22

sale of the water or sewer utility other than fees for
23

services rendered, and (3) shall not have a member of the
24

person's immediate family, including a spouse, parents or
25

spouse's parents, children or spouses of children, or

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siblings and their spouses or children, be a director,
2

officer, or employee of either the large public utility or
3

water or sewer utility or the water or sewer utility or its
4

direct affiliates or subsidiaries for at least 12 months
5

before becoming engaged under this Section or receive a
6

material financial benefit from the sale of the water or
7

sewer utility other than fees for services rendered.
8

"District" means a service area of a large public
9

utility whose customers are subject to the same rate
10

tariff.
11

"Large public utility" means an investor-owned public
12

utility that:
13

(1) is subject to regulation by the Illinois
14

Commerce Commission under this Act;
15

(2) regularly provides water or sewer service to
16

more than 15,000 customer connections;
17

(3) provides safe and adequate service; and
18

(4) is not a water or sewer utility as defined in
19

this subsection (a).
20

"Next rate case" means a large public utility's first
21

general rate case after the date the large public utility
22

acquires the water or sewer utility where the acquired
23

water or sewer utility's cost of service is considered as
24

part of determining the large public utility's resulting
25

rates.
26

"Prior rate case" means a large public utility's

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general rate case resulting in the rates in effect for the
2

large public utility at the time it acquires the water or
3

sewer utility.
4

"Utility service source" means the water or sewer
5

utility or large public utility from which the customer
6

receives its utility service type.
7

"Utility service type" means water utility service or
8

sewer utility service or water and sewer utility service.
9

"Water or sewer utility" means any of the following:
10

(1) a public utility that regularly provides water
11

or sewer service to 6,000 or fewer customer
12

connections;
13

(2) a water district, including, but not limited
14

to, a public water district, water service district,
15

or surface water protection district, or a sewer
16

district of any kind established as a special district
17

under the laws of this State that regularly provides
18

water or sewer service;
19

(3) a waterworks system or sewerage system
20

established under the Township Code that regularly
21

provides water or sewer service; or
22

(4) a water system or sewer system owned by a
23

municipality that regularly provides water or sewer
24

service; and
25

(5) any other entity that is not a public utility
26

that regularly provides water or sewer service.

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(b) Notwithstanding any other provision of this Act, a
2
large public utility that acquires a water or sewer utility
3
may request that the Commission use, and, if so requested, the
4
Commission shall use, the procedures set forth under this
5
Section to establish the ratemaking rate base of that water or
6
sewer utility at the time when it is acquired by the large
7
public utility.
8

(c) If a large public utility elects the procedures under
9
this Section to establish the rate base of a water or sewer
10
utility that it is acquiring, then 3 appraisals shall be
11
performed. The average of these 3 appraisals shall represent
12
the fair market value of the water or sewer utility that is
13
being acquired. The appraisals shall be performed by 3
14
appraisers approved by the Commission's Executive Director or
15
designee and engaged by either the water or sewer utility
16
being acquired or by the large public utility. Each appraiser
17
shall be engaged on reasonable terms approved by the
18
Commission. Each appraiser shall be a disinterested person
19
licensed as a State certified general real estate appraiser
20
under the Real Estate Appraiser Licensing Act of 2002.
21

Each appraiser shall:
22

(1) be sworn to determine the fair market value of the
23

water or sewer utility by establishing the amount for
24

which the water or sewer utility would be sold in a
25

voluntary transaction between a willing buyer and willing
26

seller under no obligation to buy or sell;

SB3579
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(2) determine fair market value in compliance with the
2

Uniform Standards of Professional Appraisal Practice;
3

(3) engage one disinterested engineer who is licensed
4

in this State, and who may be the same engineer that is
5

engaged by the other appraisers, to prepare an assessment
6

of the tangible assets of the water or sewer utility,
7

which is to be incorporated into the appraisal under the
8

cost approach;
9

(4) request from the manager of the Accounting
10

Department, if the water or sewer utility is a public
11

utility that is regulated by the Commission, a list of
12

investments made by the water or sewer utility that had
13

been disallowed previously and that shall be excluded from
14

the calculation of the large public utility's rate base in
15

its next rate case; and
16

(5) return their appraisal, in writing, to the water
17

or sewer utility and large public utility in a reasonable
18

and timely manner.
19

If the appraiser cannot engage an engineer, as described
20
in paragraph (3) of this subsection (c), within 30 days after
21
the appraiser is engaged, then the Commission's Executive
22
Director or designee shall recommend the engineer the
23
appraiser should engage. The Commission's Executive Director
24
or designee shall provide his or her recommendation within 30
25
days after he or she is officially notified of the appraiser's
26
failure to engage an engineer and the appraiser shall promptly

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1
work to engage the recommended engineer. If the appraiser is
2
unable to negotiate reasonable engagement terms with the
3
recommended engineer within 15 days after the recommendation
4
by the Commission's Executive Director or designee, then the
5
appraiser shall notify the Commission's Executive Director or
6
designee and the process shall be repeated until an engineer
7
is successfully engaged.
8

(d) The lesser of (i) the purchase price or (ii) the fair
9
market value determined under subsection (c) of this Section
10
shall constitute the rate base associated with the water or
11
sewer utility as acquired by and incorporated into the rate
12
base of the district designated by the acquiring large public
13
utility under this Section, subject to any adjustments that
14
the Commission deems necessary to ensure such rate base
15
reflects prudent and useful investments in the provision of
16
public utility service. The reasonable transaction and closing
17
costs incurred by the large public utility shall be treated
18
consistent with the applicable accounting standards under this
19
Act. The total amount of all of the appraisers' fees to be
20
included in the transaction and closing costs shall not exceed
21
the greater of $15,000 or 5% of the appraised value of the
22
water or sewer utility being acquired. This rate base
23
treatment shall not be deemed to violate this Act, including,
24
but not limited to, any Sections in Articles VIII and IX of
25
this Act that might be affected by this Section. Any
26
acquisition of a water or sewer utility that affects the

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LRB104 16285 AAS 29670 b
1
cumulative base rates of the large public utility's existing
2
ratepayers in the tariff group into which the water or sewer
3
utility is to be combined by less than (1) 2.5% at the time of
4
the acquisition for any single acquisition completed under
5
this Section or (2) 5% for all acquisitions completed under
6
this Section before the Commission's final order in the next
7
rate case shall not be deemed to violate Section 7-204 or any
8
other provision of this Act.
9

In the Commission's order that approves the large public
10
utility's acquisition of the water or sewer utility, the
11
Commission shall issue its decision establishing (1) the
12
ratemaking rate base of the water or sewer utility; (2) the
13
district or tariff group with which the water or sewer utility
14
shall be combined for ratemaking purposes, if such combination
15
has been proposed by the large public utility; and (3) the
16
rates to be charged to customers in the water or sewer utility.
17

(e) If the water or sewer utility being acquired is owned
18
by the State or any political subdivision thereof, then the
19
water or sewer utility must inform the public of the terms of
20
its acquisition by the large public utility by (1) holding a
21
public meeting prior to the acquisition and (2) causing to be
22
published, in a newspaper of general circulation in the area
23
that the water or sewer utility operates, a notice setting
24
forth the terms of its acquisition by the large public utility
25
and options that shall be available to assist customers to pay
26
their bills after the acquisition.

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LRB104 16285 AAS 29670 b
1

At the election next following the public meeting and
2
notice required under this subsection (e), a referendum,
3
subject to the requirements of Section 16-7 of the Election
4
Code, shall be placed on the ballot for all electors within the
5
area where the water or sewer utility operates in
6
substantially the following form:

7

May the (name of large public utility) acquire the
8

(name of water or sewer utility) under the terms of
9

acquisition as published in (name of newspaper) on (date)?

10
The votes shall be recorded as "Yes" or "No".

11

If a majority of the electors voting on the referendum
12
within the service area of the water or sewer utility vote in
13
favor of the referendum, then the acquisition may continue as
14
provided in this Section. If less than a majority of the
15
electors voting on the referendum within the service area of
16
the water or sewer utility vote in favor of the referendum, the
17
Commission shall deny the large public utility's acquisition
18
of the water or sewer utility.

19

(f) The large public utility may recommend the district or
20
tariff group of which the water or sewer utility shall, for
21
ratemaking purposes, become a part after the acquisition, or
22
may recommend a lesser rate for the water or sewer utility. If
23
the large public utility recommends a lesser rate, it shall
24
submit to the Commission its proposed rate schedule and the
25
proposed final tariff group for the acquired water or sewer
26
utility. The Commission's approved district or tariff group or

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LRB104 16285 AAS 29670 b
1
rates shall be consistent with the large public utility's
2
recommendation, unless such recommendation can be shown to be
3
contrary to the public interest.
4

(g) From the date of acquisition until the date that new
5
rates are effective in the acquiring large public utility's
6
next rate case, the customers of the acquired water or sewer
7
utility shall pay the approved then-existing rates of the
8
district or tariff group as ordered by the Commission, or some
9
lesser rates as recommended by the large public utility and
10
approved by the Commission under subsection (f); provided,
11
that, if the application of such rates of the large public
12
utility to customers of the acquired water or sewer utility
13
using 54,000 gallons annually results in an increase to the
14
total annual bill of customers of the acquired water or sewer
15
utility, exclusive of fire service or related charges, then
16
the large public utility's rates charged to the customers of
17
the acquired water or sewer utility shall be uniformly
18
reduced, if any reduction is required, by the percent that
19
results in the total annual bill, exclusive of fire services
20
or related charges, for the customers of the acquired water or
21
sewer utility using 54,000 gallons being equal to 1.5% of the
22
latest median household income as reported by the United
23
States Census Bureau for the most applicable community or
24
county. For each customer of the water or sewer utility with
25
potable water usage values that cannot be reasonably obtained,
26
a value of 4,500 gallons per month shall be assigned. These

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LRB104 16285 AAS 29670 b
1
rates shall not be deemed to violate this Act including, but
2
not limited to, Section 9-101 and any other applicable
3
Sections in Articles VIII and IX of this Act. The Commission
4
shall issue its decision establishing the rates effective for
5
the water or sewer utility immediately following an
6
acquisition in its order approving the acquisition.
7

(h) In the acquiring large public utility's next rate
8
case, the water or sewer utility and the district or tariff
9
group ordered by the Commission and their costs of service may
10
be combined under the same rate tariff. This rate tariff shall
11
be based on allocation of costs of service of the acquired
12
water or sewer utility and the large public utility's district
13
or tariff group ordered by the Commission and utilizing a rate
14
design that does not distinguish among customers on the basis
15
of utility service source or type. This rate tariff shall not
16
be deemed to violate this Act including, but not limited to,
17
Section 9-101 of this Act. In the acquiring large public
18
utility's 2 rate cases after an acquisition, but in no
19
subsequent rate case, the large public utility may file a rate
20
tariff for a water or sewer utility acquired under this
21
Section that establishes lesser rates than the district or
22
tariff group into which the water or sewer utility is to be
23
combined. Those lesser rates shall not be deemed to violate
24
Section 7-204 or any other provision of this Act if they affect
25
the cumulative base rates of the large public utility's
26
existing rate payers in the district or tariff by less than

SB3579
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LRB104 16285 AAS 29670 b
1
2.5%.
2

(i) Any post-acquisition improvements made by the large
3
public utility in the water or sewer utility shall accrue a
4
cost for financing set at the large public utility's
5
determined rate for allowance for funds used during
6
construction, inclusive of the debt, equity, and income tax
7
gross up components, after the date on which the expenditure
8
was incurred by the large public utility until the investment
9
has been in service for a 4-year period or, if sooner, until
10
the time the rates are implemented in the large public
11
utility's next rate case.
12

Any post-acquisition improvements made by the large public
13
utility in the water or sewer utility shall not be depreciated
14
for ratemaking purposes from the date on which the expenditure
15
was incurred by the large public utility until the investment
16
has been in service for a 4-year period or, if sooner, until
17
the time the rates are implemented in the large public
18
utility's next rate case.
19

(j) This Section shall be exclusively applied to large
20
public utilities in the voluntary and mutually agreeable
21
acquisition of water or sewer utilities. Any petitions filed
22
with the Commission related to the acquisitions described in
23
this Section, including petitions seeking approvals or
24
certificates required by this Act, shall be deemed approved
25
unless the Commission issues its final order within 11 months
26
after the date the large public utility filed its initial

SB3579
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LRB104 16285 AAS 29670 b
1
petition. This Section shall only apply to utilities providing
2
water or sewer service and shall not be construed in any manner
3
to apply to electric corporations, natural gas corporations,
4
or any other utility subject to this Act.
5

(k) Nothing in this Section shall prohibit a party from
6
declining to proceed with an acquisition or be deemed as
7
establishing the final purchase price of an acquisition.
8

(l) In the Commission's order that approves the large
9
utility's acquisition of the water or sewer utility, the
10
Commission shall address each aspect of the acquisition
11
transaction for which approval is required under the Act.
12

(m) Any contractor or subcontractor that performs work on
13
a water or sewer utility acquired by a large public utility
14
under this Section shall be a responsible bidder as described
15
in Section 30-22 of the Illinois Procurement Code. The
16
contractor or subcontractor shall submit evidence of meeting
17
the requirements to be a responsible bidder as described in
18
Section 30-22 to the water or sewer utility. Any new water or
19
sewer facility built as a result of the acquisition shall
20
require the contractor to enter into a project labor
21
agreement. The large public utility acquiring the water or
22
sewer utility shall offer employee positions to qualified
23
employees of the acquired water or sewer utility.
24

(n) This Section is repealed on June 1, 2028.
25
(Source: P.A. 102-149, eff. 1-1-22
.)

26

Section 99.
Effective date.
This Act takes effect upon

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becoming law.

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