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HB 2862

FUEL RECOVERY FEE PROHIBITION

104th Regular Session Introduced by Amy Elik

HB 2862 bans fuel-indexed charges for utilities and landfills, stopping automatic bill increases tied to fuel costs and shifting recovery to base rates and regulatory review.

House Committee Amendment No. 1 Rule 19(c) / Re-referred to Rules Committee
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Bill Summary · HB 2862

HB 2862 — Fuel Recovery Fee Prohibition (summary)

Note on versions: HB 2862 was originally filed with unrelated language (an Arizona bill addressing school-based mental‑health services). House Committee Amendment No. 1 (filed March 5, 2025, by Rep. Amy Elik) replaces that text with Illinois-focused language that (1) amends the Public Utilities Act (220 ILCS 5/9‑220) to limit fuel‑based rate adjustments and (2) adds a new Environmental Protection Act provision (415 ILCS 5/22.16c) prohibiting sanitary landfills from imposing motor‑fuel‑indexed surcharges. This summary focuses on the amended (current) content relating to fuel recovery/fees.

Purpose / Intent

To prohibit certain pass‑through charges to customers that are expressly tied to changes in motor fuel or fuel‑cost indices — both (a) utility fuel adjustment mechanisms and (b) landfill fuel surcharges — thereby preventing automatic, fuel‑indexed surcharges on customer bills or waste‑hauler contracts.

Key provisions

  • Public Utilities Act (amendment to 220 ILCS 5/9‑220)

    • Removes or prohibits Commission authorization of charges that vary based on changes in the cost of fuel, purchased power, or purchased gas through fuel adjustment clauses or purchased gas adjustment clauses (language in the introduced synopsis and replacement text).
    • Deletes/limits provisions that previously allowed utilities to automatically increase/decrease customer charges via fuel adjustment mechanisms (and related provisions for emissions allowance costs treated as fuel costs).
    • (The full replacement text would affect the Commission’s existing procedures for fuel reconciliation and the ability of utilities to use fuel adjustment clauses — see Section 9‑220 references.)

  • Environmental Protection Act (addition of 415 ILCS 5/22.16c)

    • Prohibits any owner or operator of a sanitary landfill (permitted or required to be permitted by the Illinois EPA) from, by contract or otherwise, charging or assessing customers — including residential or commercial waste‑hauling companies — a fee or surcharge that changes based on changes in the cost of motor fuel (as defined in the Motor Fuel Tax Law).

Who is affected

  • Regulated utilities (electric and natural gas providers) and their customers: residential, commercial and industrial ratepayers who previously could see adjustments via fuel/purchased‑gas clauses.
  • Illinois Commerce Commission: alters the scope of authority to authorize fuel‑indexed rate adjustments and may require changes to existing tariffs and reconciliation practices.
  • Sanitary landfill owners/operators and commercial waste haulers: eliminates the ability to impose motor‑fuel‑indexed surcharges in contracts and billing.
  • Potential secondary impacts on contractors, haulers, and service providers who previously relied on fuel surcharges to hedge fuel‑cost volatility.

Potential impacts

  • Rate stability for customers: fewer automatic, short‑term bill increases tied to fuel price spikes.
  • Cost‑allocation shift: utilities and landfill operators may need to absorb more fuel‑cost volatility or seek recovery through base rate proceedings (which require regulatory review) instead of automatic adjustments.
  • Contract and tariff revisions: landfill contracts and utility tariffs may require renegotiation or regulatory filings to reflect the prohibition.
  • Regulatory workload: Illinois Commerce Commission may face additional rate cases or policy questions about alternative recovery mechanisms.

Procedural status (selected)

  • Introduced: Feb 6, 2025 (Rep. Amy Elik).
  • Amendment (House Committee Amendment No. 1) filed: Mar 5, 2025 (Rep. Amy Elik) — replacement text added (Public Utilities + Environmental Protection Act provisions).
  • Assigned and re‑referred: Public Utilities Committee; Energy & Environment; Rules Committee (multiple referrals and re‑referrals noted through Mar 21, 2025).
  • Readings: First reading Feb 6, 2025; subsequent procedural entries through Mar 21, 2025.

Statutory references

  • Public Utilities Act: proposed changes to 220 ILCS 5/9‑220.
  • Environmental Protection Act: new provision proposed as 415 ILCS 5/22.16c.
  • Motor Fuel Tax Law: referenced for the definition of motor fuel.

If you want, I can:
- Pull and compare the exact pre‑existing statutory language in 220 ILCS 5/9‑220 to show precisely what would be removed,
- Draft a side‑by‑side of likely compliance steps for utilities and landfills, or
- Summarize stakeholder positions and likely impacts on rates in more quantitative terms.

Compiled from official sources — confirm details with the bill’s official record.

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