101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3395

 

Introduced 2/14/2020, by Sen. Patrick J. Joyce

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/16-108

    Amends the Public Utilities Act. Makes a technical change in a Section concerning recovery of costs associated with the provision of delivery services.


LRB101 20083 RJF 69615 b

 

 

A BILL FOR

 

SB3395LRB101 20083 RJF 69615 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Public Utilities Act is amended by changing
5Section 16-108 as follows:
 
6    (220 ILCS 5/16-108)
7    Sec. 16-108. Recovery of costs associated with the
8provision of delivery and other services.
9    (a) An electric utility shall file a delivery services
10tariff with the the Commission at least 210 days prior to the
11date that it is required to begin offering such services
12pursuant to this Act. An electric utility shall provide the
13components of delivery services that are subject to the
14jurisdiction of the Federal Energy Regulatory Commission at the
15same prices, terms and conditions set forth in its applicable
16tariff as approved or allowed into effect by that Commission.
17The Commission shall otherwise have the authority pursuant to
18Article IX to review, approve, and modify the prices, terms and
19conditions of those components of delivery services not subject
20to the jurisdiction of the Federal Energy Regulatory
21Commission, including the authority to determine the extent to
22which such delivery services should be offered on an unbundled
23basis. In making any such determination the Commission shall

 

 

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1consider, at a minimum, the effect of additional unbundling on
2(i) the objective of just and reasonable rates, (ii) electric
3utility employees, and (iii) the development of competitive
4markets for electric energy services in Illinois.
5    (b) The Commission shall enter an order approving, or
6approving as modified, the delivery services tariff no later
7than 30 days prior to the date on which the electric utility
8must commence offering such services. The Commission may
9subsequently modify such tariff pursuant to this Act.
10    (c) The electric utility's tariffs shall define the classes
11of its customers for purposes of delivery services charges.
12Delivery services shall be priced and made available to all
13retail customers electing delivery services in each such class
14on a nondiscriminatory basis regardless of whether the retail
15customer chooses the electric utility, an affiliate of the
16electric utility, or another entity as its supplier of electric
17power and energy. Charges for delivery services shall be cost
18based, and shall allow the electric utility to recover the
19costs of providing delivery services through its charges to its
20delivery service customers that use the facilities and services
21associated with such costs. Such costs shall include the costs
22of owning, operating and maintaining transmission and
23distribution facilities. The Commission shall also be
24authorized to consider whether, and if so to what extent, the
25following costs are appropriately included in the electric
26utility's delivery services rates: (i) the costs of that

 

 

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1portion of generation facilities used for the production and
2absorption of reactive power in order that retail customers
3located in the electric utility's service area can receive
4electric power and energy from suppliers other than the
5electric utility, and (ii) the costs associated with the use
6and redispatch of generation facilities to mitigate
7constraints on the transmission or distribution system in order
8that retail customers located in the electric utility's service
9area can receive electric power and energy from suppliers other
10than the electric utility. Nothing in this subsection shall be
11construed as directing the Commission to allocate any of the
12costs described in (i) or (ii) that are found to be
13appropriately included in the electric utility's delivery
14services rates to any particular customer group or geographic
15area in setting delivery services rates.
16    (d) The Commission shall establish charges, terms and
17conditions for delivery services that are just and reasonable
18and shall take into account customer impacts when establishing
19such charges. In establishing charges, terms and conditions for
20delivery services, the Commission shall take into account
21voltage level differences. A retail customer shall have the
22option to request to purchase electric service at any delivery
23service voltage reasonably and technically feasible from the
24electric facilities serving that customer's premises provided
25that there are no significant adverse impacts upon system
26reliability or system efficiency. A retail customer shall also

 

 

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1have the option to request to purchase electric service at any
2point of delivery that is reasonably and technically feasible
3provided that there are no significant adverse impacts on
4system reliability or efficiency. Such requests shall not be
5unreasonably denied.
6    (e) Electric utilities shall recover the costs of
7installing, operating or maintaining facilities for the
8particular benefit of one or more delivery services customers,
9including without limitation any costs incurred in complying
10with a customer's request to be served at a different voltage
11level, directly from the retail customer or customers for whose
12benefit the costs were incurred, to the extent such costs are
13not recovered through the charges referred to in subsections
14(c) and (d) of this Section.
15    (f) An electric utility shall be entitled but not required
16to implement transition charges in conjunction with the
17offering of delivery services pursuant to Section 16-104. If an
18electric utility implements transition charges, it shall
19implement such charges for all delivery services customers and
20for all customers described in subsection (h), but shall not
21implement transition charges for power and energy that a retail
22customer takes from cogeneration or self-generation facilities
23located on that retail customer's premises, if such facilities
24meet the following criteria:
25        (i) the cogeneration or self-generation facilities
26    serve a single retail customer and are located on that

 

 

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1    retail customer's premises (for purposes of this
2    subparagraph and subparagraph (ii), an industrial or
3    manufacturing retail customer and a third party contractor
4    that is served by such industrial or manufacturing customer
5    through such retail customer's own electrical distribution
6    facilities under the circumstances described in subsection
7    (vi) of the definition of "alternative retail electric
8    supplier" set forth in Section 16-102, shall be considered
9    a single retail customer);
10        (ii) the cogeneration or self-generation facilities
11    either (A) are sized pursuant to generally accepted
12    engineering standards for the retail customer's electrical
13    load at that premises (taking into account standby or other
14    reliability considerations related to that retail
15    customer's operations at that site) or (B) if the facility
16    is a cogeneration facility located on the retail customer's
17    premises, the retail customer is the thermal host for that
18    facility and the facility has been designed to meet that
19    retail customer's thermal energy requirements resulting in
20    electrical output beyond that retail customer's electrical
21    demand at that premises, comply with the operating and
22    efficiency standards applicable to "qualifying facilities"
23    specified in title 18 Code of Federal Regulations Section
24    292.205 as in effect on the effective date of this
25    amendatory Act of 1999;
26        (iii) the retail customer on whose premises the

 

 

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1    facilities are located either has an exclusive right to
2    receive, and corresponding obligation to pay for, all of
3    the electrical capacity of the facility, or in the case of
4    a cogeneration facility that has been designed to meet the
5    retail customer's thermal energy requirements at that
6    premises, an identified amount of the electrical capacity
7    of the facility, over a minimum 5-year period; and
8        (iv) if the cogeneration facility is sized for the
9    retail customer's thermal load at that premises but exceeds
10    the electrical load, any sales of excess power or energy
11    are made only at wholesale, are subject to the jurisdiction
12    of the Federal Energy Regulatory Commission, and are not
13    for the purpose of circumventing the provisions of this
14    subsection (f).
15If a generation facility located at a retail customer's
16premises does not meet the above criteria, an electric utility
17implementing transition charges shall implement a transition
18charge until December 31, 2006 for any power and energy taken
19by such retail customer from such facility as if such power and
20energy had been delivered by the electric utility. Provided,
21however, that an industrial retail customer that is taking
22power from a generation facility that does not meet the above
23criteria but that is located on such customer's premises will
24not be subject to a transition charge for the power and energy
25taken by such retail customer from such generation facility if
26the facility does not serve any other retail customer and

 

 

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1either was installed on behalf of the customer and for its own
2use prior to January 1, 1997, or is both predominantly fueled
3by byproducts of such customer's manufacturing process at such
4premises and sells or offers an average of 300 megawatts or
5more of electricity produced from such generation facility into
6the wholesale market. Such charges shall be calculated as
7provided in Section 16-102, and shall be collected on each
8kilowatt-hour delivered under a delivery services tariff to a
9retail customer from the date the customer first takes delivery
10services until December 31, 2006 except as provided in
11subsection (h) of this Section. Provided, however, that an
12electric utility, other than an electric utility providing
13service to at least 1,000,000 customers in this State on
14January 1, 1999, shall be entitled to petition for entry of an
15order by the Commission authorizing the electric utility to
16implement transition charges for an additional period ending no
17later than December 31, 2008. The electric utility shall file
18its petition with supporting evidence no earlier than 16
19months, and no later than 12 months, prior to December 31,
202006. The Commission shall hold a hearing on the electric
21utility's petition and shall enter its order no later than 8
22months after the petition is filed. The Commission shall
23determine whether and to what extent the electric utility shall
24be authorized to implement transition charges for an additional
25period. The Commission may authorize the electric utility to
26implement transition charges for some or all of the additional

 

 

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1period, and shall determine the mitigation factors to be used
2in implementing such transition charges; provided, that the
3Commission shall not authorize mitigation factors less than
4110% of those in effect during the 12 months ended December 31,
52006. In making its determination, the Commission shall
6consider the following factors: the necessity to implement
7transition charges for an additional period in order to
8maintain the financial integrity of the electric utility; the
9prudence of the electric utility's actions in reducing its
10costs since the effective date of this amendatory Act of 1997;
11the ability of the electric utility to provide safe, adequate
12and reliable service to retail customers in its service area;
13and the impact on competition of allowing the electric utility
14to implement transition charges for the additional period.
15    (g) The electric utility shall file tariffs that establish
16the transition charges to be paid by each class of customers to
17the electric utility in conjunction with the provision of
18delivery services. The electric utility's tariffs shall define
19the classes of its customers for purposes of calculating
20transition charges. The electric utility's tariffs shall
21provide for the calculation of transition charges on a
22customer-specific basis for any retail customer whose average
23monthly maximum electrical demand on the electric utility's
24system during the 6 months with the customer's highest monthly
25maximum electrical demands equals or exceeds 3.0 megawatts for
26electric utilities having more than 1,000,000 customers, and

 

 

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1for other electric utilities for any customer that has an
2average monthly maximum electrical demand on the electric
3utility's system of one megawatt or more, and (A) for which
4there exists data on the customer's usage during the 3 years
5preceding the date that the customer became eligible to take
6delivery services, or (B) for which there does not exist data
7on the customer's usage during the 3 years preceding the date
8that the customer became eligible to take delivery services, if
9in the electric utility's reasonable judgment there exists
10comparable usage information or a sufficient basis to develop
11such information, and further provided that the electric
12utility can require customers for which an individual
13calculation is made to sign contracts that set forth the
14transition charges to be paid by the customer to the electric
15utility pursuant to the tariff.
16    (h) An electric utility shall also be entitled to file
17tariffs that allow it to collect transition charges from retail
18customers in the electric utility's service area that do not
19take delivery services but that take electric power or energy
20from an alternative retail electric supplier or from an
21electric utility other than the electric utility in whose
22service area the customer is located. Such charges shall be
23calculated, in accordance with the definition of transition
24charges in Section 16-102, for the period of time that the
25customer would be obligated to pay transition charges if it
26were taking delivery services, except that no deduction for

 

 

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1delivery services revenues shall be made in such calculation,
2and usage data from the customer's class shall be used where
3historical usage data is not available for the individual
4customer. The customer shall be obligated to pay such charges
5on a lump sum basis on or before the date on which the customer
6commences to take service from the alternative retail electric
7supplier or other electric utility, provided, that the electric
8utility in whose service area the customer is located shall
9offer the customer the option of signing a contract pursuant to
10which the customer pays such charges ratably over the period in
11which the charges would otherwise have applied.
12    (i) An electric utility shall be entitled to add to the
13bills of delivery services customers charges pursuant to
14Sections 9-221, 9-222 (except as provided in Section 9-222.1),
15and Section 16-114 of this Act, Section 5-5 of the Electricity
16Infrastructure Maintenance Fee Law, Section 6-5 of the
17Renewable Energy, Energy Efficiency, and Coal Resources
18Development Law of 1997, and Section 13 of the Energy
19Assistance Act.
20    (j) If a retail customer that obtains electric power and
21energy from cogeneration or self-generation facilities
22installed for its own use on or before January 1, 1997,
23subsequently takes service from an alternative retail electric
24supplier or an electric utility other than the electric utility
25in whose service area the customer is located for any portion
26of the customer's electric power and energy requirements

 

 

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1formerly obtained from those facilities (including that amount
2purchased from the utility in lieu of such generation and not
3as standby power purchases, under a cogeneration displacement
4tariff in effect as of the effective date of this amendatory
5Act of 1997), the transition charges otherwise applicable
6pursuant to subsections (f), (g), or (h) of this Section shall
7not be applicable in any year to that portion of the customer's
8electric power and energy requirements formerly obtained from
9those facilities, provided, that for purposes of this
10subsection (j), such portion shall not exceed the average
11number of kilowatt-hours per year obtained from the
12cogeneration or self-generation facilities during the 3 years
13prior to the date on which the customer became eligible for
14delivery services, except as provided in subsection (f) of
15Section 16-110.
16    (k) The electric utility shall be entitled to recover
17through tariffed charges all of the costs associated with the
18purchase of zero emission credits from zero emission facilities
19to meet the requirements of subsection (d-5) of Section 1-75 of
20the Illinois Power Agency Act. Such costs shall include the
21costs of procuring the zero emission credits, as well as the
22reasonable costs that the utility incurs as part of the
23procurement processes and to implement and comply with plans
24and processes approved by the Commission under such subsection
25(d-5). The costs shall be allocated across all retail customers
26through a single, uniform cents per kilowatt-hour charge

 

 

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1applicable to all retail customers, which shall appear as a
2separate line item on each customer's bill. Beginning June 1,
32017, the electric utility shall be entitled to recover through
4tariffed charges all of the costs associated with the purchase
5of renewable energy resources to meet the renewable energy
6resource standards of subsection (c) of Section 1-75 of the
7Illinois Power Agency Act, under procurement plans as approved
8in accordance with that Section and Section 16-111.5 of this
9Act. Such costs shall include the costs of procuring the
10renewable energy resources, as well as the reasonable costs
11that the utility incurs as part of the procurement processes
12and to implement and comply with plans and processes approved
13by the Commission under such Sections. The costs associated
14with the purchase of renewable energy resources shall be
15allocated across all retail customers in proportion to the
16amount of renewable energy resources the utility procures for
17such customers through a single, uniform cents per
18kilowatt-hour charge applicable to such retail customers,
19which shall appear as a separate line item on each such
20customer's bill.
21    Notwithstanding whether the Commission has approved the
22initial long-term renewable resources procurement plan as of
23June 1, 2017, an electric utility shall place new tariffed
24charges into effect beginning with the June 2017 monthly
25billing period, to the extent practicable, to begin recovering
26the costs of procuring renewable energy resources, as those

 

 

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1charges are calculated under the limitations described in
2subparagraph (E) of paragraph (1) of subsection (c) of Section
31-75 of the Illinois Power Agency Act. Notwithstanding the date
4on which the utility places such new tariffed charges into
5effect, the utility shall be permitted to collect the charges
6under such tariff as if the tariff had been in effect beginning
7with the first day of the June 2017 monthly billing period. For
8the delivery years commencing June 1, 2017, June 1, 2018, and
9June 1, 2019, the electric utility shall deposit into a
10separate interest bearing account of a financial institution
11the monies collected under the tariffed charges. Any interest
12earned shall be credited back to retail customers under the
13reconciliation proceeding provided for in this subsection (k),
14provided that the electric utility shall first be reimbursed
15from the interest for the administrative costs that it incurs
16to administer and manage the account. Any taxes due on the
17funds in the account, or interest earned on it, will be paid
18from the account or, if insufficient monies are available in
19the account, from the monies collected under the tariffed
20charges to recover the costs of procuring renewable energy
21resources. Monies deposited in the account shall be subject to
22the review, reconciliation, and true-up process described in
23this subsection (k) that is applicable to the funds collected
24and costs incurred for the procurement of renewable energy
25resources.
26    The electric utility shall be entitled to recover all of

 

 

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1the costs identified in this subsection (k) through automatic
2adjustment clause tariffs applicable to all of the utility's
3retail customers that allow the electric utility to adjust its
4tariffed charges consistent with this subsection (k). The
5determination as to whether any excess funds were collected
6during a given delivery year for the purchase of renewable
7energy resources, and the crediting of any excess funds back to
8retail customers, shall not be made until after the close of
9the delivery year, which will ensure that the maximum amount of
10funds is available to implement the approved long-term
11renewable resources procurement plan during a given delivery
12year. The electric utility's collections under such automatic
13adjustment clause tariffs to recover the costs of renewable
14energy resources and zero emission credits from zero emission
15facilities shall be subject to separate annual review,
16reconciliation, and true-up against actual costs by the
17Commission under a procedure that shall be specified in the
18electric utility's automatic adjustment clause tariffs and
19that shall be approved by the Commission in connection with its
20approval of such tariffs. The procedure shall provide that any
21difference between the electric utility's collections under
22the automatic adjustment charges for an annual period and the
23electric utility's actual costs of renewable energy resources
24and zero emission credits from zero emission facilities for
25that same annual period shall be refunded to or collected from,
26as applicable, the electric utility's retail customers in

 

 

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1subsequent periods.
2    Nothing in this subsection (k) is intended to affect,
3limit, or change the right of the electric utility to recover
4the costs associated with the procurement of renewable energy
5resources for periods commencing before, on, or after June 1,
62017, as otherwise provided in the Illinois Power Agency Act.
7    Notwithstanding anything to the contrary, the Commission
8shall not conduct an annual review, reconciliation, and true-up
9associated with renewable energy resources' collections and
10costs for the delivery years commencing June 1, 2017, June 1,
112018, June 1, 2019, and June 1, 2020, and shall instead conduct
12a single review, reconciliation, and true-up associated with
13renewable energy resources' collections and costs for the
144-year period beginning June 1, 2017 and ending May 31, 2021,
15provided that the review, reconciliation, and true-up shall not
16be initiated until after August 31, 2021. During the 4-year
17period, the utility shall be permitted to collect and retain
18funds under this subsection (k) and to purchase renewable
19energy resources under an approved long-term renewable
20resources procurement plan using those funds regardless of the
21delivery year in which the funds were collected during the
224-year period.
23    If the amount of funds collected during the delivery year
24commencing June 1, 2017, exceeds the costs incurred during that
25delivery year, then up to half of this excess amount, as
26calculated on June 1, 2018, may be used to fund the programs

 

 

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1under subsection (b) of Section 1-56 of the Illinois Power
2Agency Act in the same proportion the programs are funded under
3that subsection (b). However, any amount identified under this
4subsection (k) to fund programs under subsection (b) of Section
51-56 of the Illinois Power Agency Act shall be reduced if it
6exceeds the funding shortfall. For purposes of this Section,
7"funding shortfall" means the difference between $200,000,000
8and the amount appropriated by the General Assembly to the
9Illinois Power Agency Renewable Energy Resources Fund during
10the period that commences on the effective date of this
11amendatory act of the 99th General Assembly and ends on August
121, 2018.
13    If the amount of funds collected during the delivery year
14commencing June 1, 2018, exceeds the costs incurred during that
15delivery year, then up to half of this excess amount, as
16calculated on June 1, 2019, may be used to fund the programs
17under subsection (b) of Section 1-56 of the Illinois Power
18Agency Act in the same proportion the programs are funded under
19that subsection (b). However, any amount identified under this
20subsection (k) to fund programs under subsection (b) of Section
211-56 of the Illinois Power Agency Act shall be reduced if it
22exceeds the funding shortfall.
23    If the amount of funds collected during the delivery year
24commencing June 1, 2019, exceeds the costs incurred during that
25delivery year, then up to half of this excess amount, as
26calculated on June 1, 2020, may be used to fund the programs

 

 

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1under subsection (b) of Section 1-56 of the Illinois Power
2Agency Act in the same proportion the programs are funded under
3that subsection (b). However, any amount identified under this
4subsection (k) to fund programs under subsection (b) of Section
51-56 of the Illinois Power Agency Act shall be reduced if it
6exceeds the funding shortfall.
7    The funding available under this subsection (k), if any,
8for the programs described under subsection (b) of Section 1-56
9of the Illinois Power Agency Act shall not reduce the amount of
10funding for the programs described in subparagraph (O) of
11paragraph (1) of subsection (c) of Section 1-75 of the Illinois
12Power Agency Act. If funding is available under this subsection
13(k) for programs described under subsection (b) of Section 1-56
14of the Illinois Power Agency Act, then the long-term renewable
15resources plan shall provide for the Agency to procure
16contracts in an amount that does not exceed the funding, and
17the contracts approved by the Commission shall be executed by
18the applicable utility or utilities.
19    (l) A utility that has terminated any contract executed
20under subsection (d-5) of Section 1-75 of the Illinois Power
21Agency Act shall be entitled to recover any remaining balance
22associated with the purchase of zero emission credits prior to
23such termination, and such utility shall also apply a credit to
24its retail customer bills in the event of any over-collection.
25        (m)(1) An electric utility that recovers its costs of
26    procuring zero emission credits from zero emission

 

 

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1    facilities through a cents-per-kilowatthour charge under
2    to subsection (k) of this Section shall be subject to the
3    requirements of this subsection (m). Notwithstanding
4    anything to the contrary, such electric utility shall,
5    beginning on April 30, 2018, and each April 30 thereafter
6    until April 30, 2026, calculate whether any reduction must
7    be applied to such cents-per-kilowatthour charge that is
8    paid by retail customers of the electric utility that are
9    exempt from subsections (a) through (j) of Section 8-103B
10    of this Act under subsection (l) of Section 8-103B. Such
11    charge shall be reduced for such customers for the next
12    delivery year commencing on June 1 based on the amount
13    necessary, if any, to limit the annual estimated average
14    net increase for the prior calendar year due to the future
15    energy investment costs to no more than 1.3% of 5.98 cents
16    per kilowatt-hour, which is the average amount paid per
17    kilowatthour for electric service during the year ending
18    December 31, 2015 by Illinois industrial retail customers,
19    as reported to the Edison Electric Institute.
20        The calculations required by this subsection (m) shall
21    be made only once for each year, and no subsequent rate
22    impact determinations shall be made.
23        (2) For purposes of this Section, "future energy
24    investment costs" shall be calculated by subtracting the
25    cents-per-kilowatthour charge identified in subparagraph
26    (A) of this paragraph (2) from the sum of the

 

 

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1    cents-per-kilowatthour charges identified in subparagraph
2    (B) of this paragraph (2):
3            (A) The cents-per-kilowatthour charge identified
4        in the electric utility's tariff placed into effect
5        under Section 8-103 of the Public Utilities Act that,
6        on December 1, 2016, was applicable to those retail
7        customers that are exempt from subsections (a) through
8        (j) of Section 8-103B of this Act under subsection (l)
9        of Section 8-103B.
10            (B) The sum of the following
11        cents-per-kilowatthour charges applicable to those
12        retail customers that are exempt from subsections (a)
13        through (j) of Section 8-103B of this Act under
14        subsection (l) of Section 8-103B, provided that if one
15        or more of the following charges has been in effect and
16        applied to such customers for more than one calendar
17        year, then each charge shall be equal to the average of
18        the charges applied over a period that commences with
19        the calendar year ending December 31, 2017 and ends
20        with the most recently completed calendar year prior to
21        the calculation required by this subsection (m):
22                (i) the cents-per-kilowatthour charge to
23            recover the costs incurred by the utility under
24            subsection (d-5) of Section 1-75 of the Illinois
25            Power Agency Act, adjusted for any reductions
26            required under this subsection (m); and

 

 

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1                (ii) the cents-per-kilowatthour charge to
2            recover the costs incurred by the utility under
3            Section 16-107.6 of the Public Utilities Act.
4            If no charge was applied for a given calendar year
5        under item (i) or (ii) of this subparagraph (B), then
6        the value of the charge for that year shall be zero.
7        (3) If a reduction is required by the calculation
8    performed under this subsection (m), then the amount of the
9    reduction shall be multiplied by the number of years
10    reflected in the averages calculated under subparagraph
11    (B) of paragraph (2) of this subsection (m). Such reduction
12    shall be applied to the cents-per-kilowatthour charge that
13    is applicable to those retail customers that are exempt
14    from subsections (a) through (j) of Section 8-103B of this
15    Act under subsection (l) of Section 8-103B beginning with
16    the next delivery year commencing after the date of the
17    calculation required by this subsection (m).
18        (4) The electric utility shall file a notice with the
19    Commission on May 1 of 2018 and each May 1 thereafter until
20    May 1, 2026 containing the reduction, if any, which must be
21    applied for the delivery year which begins in the year of
22    the filing. The notice shall contain the calculations made
23    pursuant to this Section. By October 1 of each year
24    beginning in 2018, each electric utility shall notify the
25    Commission if it appears, based on an estimate of the
26    calculation required in this subsection (m), that a

 

 

SB3395- 21 -LRB101 20083 RJF 69615 b

1    reduction will be required in the next year.
2(Source: P.A. 99-906, eff. 6-1-17.)