93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB5403


 
Introduced 02/06/04, by Michael J. Madigan
 
SYNOPSIS AS INTRODUCED:
 		













220 ILCS 5/16-126









    Amends the Public Utilities Act.  Makes a technical change in a Section
concerning independent system operators.
















LRB093 17303 AMC 42969 b

















 


 


A BILL FOR









 











HB5403

LRB093 17303 AMC 42969 b






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    AN ACT concerning utilities. 

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


 
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    Section 5. The Public Utilities Act is amended by changing 
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Section 16-126 as
follows:


 
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    (220 ILCS 5/16-126)

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    Sec. 16-126. Membership in an independent system operator.


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    (a) The General Assembly finds that the establishment of 
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one or
more independent system operators or their functional 
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equivalents
is required to facilitate the development of an 
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open and
efficient marketplace for electric power and energy to 
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the
benefit of Illinois consumers. Therefore, an
each Illinois 
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electric
utility owning or controlling transmission facilities 
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or
providing transmission services in Illinois and that is a 
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member
of the Mid-American Interconnected Network as of the 
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effective
date of this amendatory Act of 1997 shall submit for 
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approval to
the Federal Energy Regulatory Commission an 
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application for
establishing or joining an independent system 
19
operator that
shall:


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        (1) independently manage and control transmission 
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    facilities of
any electric utility;


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        (2) provide for nondiscriminatory access to and use of 
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    the
transmission system for buyers and sellers of 
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    electricity;


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        (3) direct the transmission activities of the control 
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    area
operators;


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        (4) coordinate, plan, and order the installation of new

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    transmission facilities;


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        (5) adopt inspection, maintenance, repair, and 
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    replacement
standards for the transmission facilities 
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    under its control and
direct maintenance, repair, and 
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    replacement of all facilities
under its control; and


 


 






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        (6) implement procedures and act to assure the 
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    provision of
adequate and reliable service.


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    These standards shall be
consistent with reliability 
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criteria no less stringent than those
established by the 
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Mid-American Interconnected Network and the
North American 
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Electric Reliability Council or their successors.


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    (b) The requirements of this Section may be met by joining 
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or
establishing a regional independent system operator that 
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meets
the criteria enumerated in subsections (a), (c), and (d) 
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of this
Section, as determined by the Commission. To achieve 
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the
objectives set forth in subsection (a), the State of 
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Illinois,
through the appropriate officers, departments, and 
13
agencies, shall
work cooperatively with the appropriate 
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officials and agencies of
those States contiguous to this State 
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and the Federal Energy
Regulatory Commission towards the 
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formation of one or more
regional independent system operators.


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    (c) The independent system operator's governance structure 
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must be fair and
nondiscriminatory, and
the independent system 
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operator must be independent of any one market
participant or 
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class of participants. The independent system operator's rules

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of
governance must prevent control, or the appearance of 
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control, of
decision-making by any class of participants.


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    (d) Participants in the independent system operator shall 
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make available to
the independent system operator all

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information required by the independent system operator in 
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performance of its
functions
described herein. The independent 
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system operator and the electric utilities
participating in the 
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independent system operator shall make all filings
required by 
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the
Federal Energy Regulatory Commission. The independent 
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system operator shall
ensure that
additional filings at the 
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Federal Energy Regulatory Commission
request confirmation of 
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the relevant provisions of this
amendatory Act of 1997.


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    (e) If a spot market, exchange market, or other 
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market-based
mechanism providing transparent real-time market 
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prices for
electric power has not been developed, the 
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independent system operator or a
closely
cooperating agent of 
 


 






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the independent system operator may provide an efficient

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competitive
power exchange auction for electric power and 
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energy, open on a
nondiscriminatory basis to all suppliers, 
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which meets the loads
of all auction customers at efficient 
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prices.


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    (f) For those electric utilities referred to in subsection 
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(a)
which have not filed with the Federal Energy Regulatory 
8
Commission by June 30,
1998 an
application for establishment or 
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participation in an independent
system operator or if such 
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application has not been approved by
the Federal Energy 
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Regulatory Commission by March 31, 1999, a 5 member
Oversight 
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Board shall
be formed. The Oversight Board shall (1) oversee 
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the creation of
an Illinois independent system operator and (2) 
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determine the composition and
initial
terms of service of, and 
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appoint the initial members of, the
Illinois independent system 
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operator board of directors. The Oversight Board
shall
consist 
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of the following: (1) 3 persons appointed by the
Governor; (2) 
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one person appointed by the Speaker of the House of

19
Representatives; and (3) one person appointed by the President 
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of
the Senate. The Oversight Board shall take the steps that 
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are
necessary to ensure the earliest possible incorporation of 
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an
Illinois independent system operator under the Business 
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Corporation Act of
1983, and
shall serve until the Illinois 
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independent system operator is incorporated.


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    (g) After notice and hearing, the Commission shall require 
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each
electric utility referred to in subsection (a), that is 
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not
participating in an independent system operator meeting the 
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requirements of
subsections
(a) and (c), to seek authority from 
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the Federal Energy Regulatory Commission to
transfer

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functional control of transmission facilities to the Illinois 
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independent
system operator
for control by the Illinois 
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independent system operator consistent with the
requirements

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of subsection (a). Upon approval by the Federal Energy 
34
Regulatory Commission,
electric utilities
may also elect to 
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transfer ownership of transmission facilities
to the Illinois 
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independent system operator. Nothing in this Act shall be

 


 






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deemed to
preclude the  Illinois independent system operator 
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from (1) seeking authority,
as
necessary, to merge with or 
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otherwise combine its operations with
those of one or more 
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other entities authorized to provide
transmission services, 
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(2) purchasing or leasing transmission
assets from 
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transmission-owning entities not required by this
Section to 
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lease transmission facilities to the Illinois independent 
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system
operator, or
(3) operating as a transmission public 
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utility under the Federal
Power Act.


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    (h) Any other owner of transmission facilities in Illinois 
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not
required by this Section to participate in an independent 
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system operator shall
be
permitted, but not required, to become 
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a member of the Illinois
independent system operator.


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    (i) The Illinois independent system operator created under 
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this Section, and
any other
independent system operator 
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authorized by the Federal Energy Regulatory
Commission to 
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provide
transmission services as a
public utility under the 
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Federal Power Act within the State of
Illinois, shall be deemed 
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to be a public utility for purposes of
Section 8-503 and 8-509 
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of this Act.
An independent system operator or regional 
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transmission organization that is
the subject
of an order 
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entered by the Commission under Section 8-503 need not possess 
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a
certificate
of service authority under Section 8-406 in order 
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to be authorized to take the
actions set
forth in Section 
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8-509.


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    (j) Electric utilities referred to in subsection (a) may 
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withdraw
from the Illinois independent system operator upon 
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becoming a member of an
independent
system operator or 
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operators conforming with the criteria in
subsections (a) and 
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(c) and whose formation and operation has
been approved by the 
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Federal Energy Regulatory Commission. This
subsection does not 
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relieve any electric utility of any
obligations under Federal 
33
law.


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    (k) Nothing in this Section shall be construed as imposing 
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any
requirements or obligations that are in conflict with 
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federal
law.


 


 






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    (l) A regional transmission organization created under the 
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rules of the
Federal
Energy Regulatory Commission shall be 
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considered to be the functional
equivalent of an
independent 
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system operator for purposes of this Section, and an electric

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utility shall be
deemed to meet its obligations under this 
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Section through membership in a
regional
transmission 
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organization that fulfills the requirements of an independent

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system operator
under this Section.


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(Source: P.A. 92-12, eff. 7-1-01.)