SB2619 93RD GENERAL ASSEMBLY

LRB093 15964 AMC 41587 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2619

Introduced 2/4/2004, by Patrick Welch

SYNOPSIS AS INTRODUCED:

New Act

Creates the Affordable Standard Electric Service Act. Provides that any residential customer that is not otherwise being served by a competitive electricity supplier shall be automatically provided with standard electric service and any residential customer who is served by a competitive electricity supplier shall have the option to select standard electric service at any time. Provides that each electric distribution company shall procure and provide standard electric service pursuant to a procurement plan for generation supply approved by the Commission and that standard electric service shall be priced based on the underlying costs associated with the provision of this service and shall not be structured to stimulate or force the development of a competitive retail market. Requires that standard electric service be available to residential and small commercial customers at any time and without the imposition of an additional fee or charge for switching to such service. Creates the Residential Advisory Committee. Effective immediately.

A BILL FOR

AN ACT concerning utilities.

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

Section 1. Short title. This Act may be cited as the Affordable Standard Electric Service Act.

Section 5. Legislative findings and intent.

(a) The Illinois General Assembly finds the following:

(1) Electric service is essential to the health and well-being of residents, public safety, and orderly economic development.

(2) Electric service should be available to residential and small commercial customers at affordable prices and reasonable terms and conditions.

(3) The transition to a competitive market for residential and small commercial customers has taken longer than originally expected and the General Assembly finds that a regulated electric service must be provided to residential and small commercial customers for an extended period of time.

(4) The price for electric service provided to residential and small commercial customers should reflect a diversified portfolio of electric supply and demand options to assure stable and affordable rates that reflect long-term prices.

(b) It is the intent of the Illinois General Assembly to assure just, reasonable, and affordable rates for residential customers who are not served by a competitive electricity supplier.

Section 10. Definitions. As used in this Act:

"Commission" means the Illinois Commerce Commission.

"Competitive electricity supplier" means the person licensed to sell electricity supply service to retail customers in this State.

"Electric distribution company" means the electric utility authorized to provide electric service.

"Residential customer" means a customer receiving electric service pursuant to the residential rate tariff approved by the Commission.

"Standard electric service" shall include regulated distribution and transmission services and an electricity supply service provided to a customer who is not being served by a competitive electricity provider.

Section 15. Standard Electric Service.

(a) As of January 1, 2007, any residential customer that is not otherwise being served by a competitive electricity supplier shall be automatically provided with standard electric service and any residential customer who is served by a competitive electricity supplier shall have the option to select standard electric service at any time. The terms and conditions for standard electric service shall, at a minimum, reflect the consumer protection programs and policies governing application for service, deposit, billing, credit, and collection rules currently in effect.

(b) Standard electric service shall be priced in accordance with the purposes of this Act.

Section 20. Standard Electric Service Provider.

(a) Each electric distribution company shall procure and provide standard electric service pursuant to a procurement plan for generation supply approved by the Commission after notice and opportunity for public hearing. This procurement plan shall include a competitive bidding methodology for that portion of the generation supply service that is not otherwise under contract or otherwise owned by the distribution company or demonstrate why such process is unlikely to result in prices or terms of service that comply with this Act. The procurement plan and competitive bid methodology shall comply with the minimum requirements set forth in Section 25 of this Act.

(b) Standard electric service shall be priced based on the underlying costs associated with the provision of this service and shall not be structured to stimulate or force the development of a competitive retail market. Rather, this service shall operate as a "benchmark" or "price to compare" against which competitive electricity 'suppliers can market their services.

(c) Standard electric service shall be billed and collected by the electric distribution company.

Section 25. Procurement plan for standard electric Service.

(a) The Commission shall require each electric distribution company to submit a procurement plan for the acquisition of Standard Electric Service that reflects all of the following requirements:

(1) A minimum of a 10 to 15-year planning and acquisition horizon.

(2) Acquisition strategies that will provide the lowest total cost and stable prices over the term of the plan.

(3) A portfolio that will reflect a diversity of electric supply and cost-effective demand reduction products and services.

(4) A portfolio in which the use of spot market transactions is reduced to a minimum consistent with a reasonable assessment of risk with respect to both price and generation supply availability during the term of the plan.

(5) An incentive mechanism that establishes a procurement benchmark that relies upon quantifiable objectives and standards and that balances risks and rewards for the electric distribution company.

(b) With respect to the acquisition of any portion of standard electric service pursuant to a competitive auction, the Commission shall specify the format of that process, as well as the criteria to ensure that the auction process is open and adequately subscribed. Prior to the approval of any competitive auction mechanism, the Commission shall find that such an approach is likely to result in a price for standard electric service that meets the objectives of item (1) of subsection (a) of this Section.

Section 30. Terms and conditions for standard electric service.

(a) Standard electric service shall be available to residential and small commercial customers at any time and without the imposition of an additional fee or charge for switching to such service. However, the Commission may adopt minimum terms of service (not to exceed 12 months) or additional fees for switching to competitive electric providers if the Commission finds, after notice and opportunity for public hearing and comment, that a significant number of residential and small commercial customers have switched or are likely to switch in the near future to competitive electric suppliers or aggregators, thus increasing the risk associated with the provision of standard electric service under stable prices for the remaining customers. Any party that proposes to impose minimum terms of service or switching fees on residential and small commercial customers shall demonstrate that switching activity by such customers has or is likely to result in an increase in total costs for standard electric service for that class of customers that exceeds 1% on an annual basis.

(b) The Commission may adopt restrictions on the access to, switching fees, or terms of service requirements for the provision of standard electric service for large commercial and industrial customers. Alternatively, the Commission is authorized to terminate the obligation of the electric distribution company to provide standard electric service to such customers if it finds, after opportunity for public hearing and comment, that a robust competitive market is providing such service at reasonable prices. A robust competitive market shall reflect the scope and depth of switching activity and variety of competitive electric providers offering electric service to affected customers.

Section 35. Prohibitions.

(a)The Commission shall not isolate nonpaying or customers with poor credit risk in a separate class for the purpose of any service. The Commission shall use the pricing method for standard electric service (based on the approved procurement plan for the electric distribution company) for each rate classification currently in effect on the effective date of this Act.

(b) The Commission shall not require any residential to install a new meter or adopt a different method of rate design for standard electric service, but the Commission may approve alternative electric service options that may require an advanced meter or that reflect an approved demand response program that are available to customers on a voluntary basis, except that the Commission shall not approve or allow the standard electric service provider to require a customer to install or accept a prepayment meter as a condition of receipt of standard electric service.

Section 40. Residential Advisory Committee.

(a)The Commission shall appoint a 10-member Residential Advisory Committee to oversee the implementation of this Act. Membership shall consist of 4 legislators, one each recommended by the President of the Senate, the Minority Leader of the Senate, the Speaker of the House of Representatives, and the Minority Leader of the House of Representatives; 2 representatives of the Citizens Utility Board; 2 representatives of a Statewide consumer advocacy organization; and 2 representatives of a membership-based Statewide senior citizen advocacy organization. The Committee shall be chaired by the Chair of the Commission, or his or her designee. The Committee shall meet quarterly or more frequently at the call of the Chair.

(b) The Board shall be provided copies of all administrative rules, policy statements, guidelines, and memorandums and changes to administrative rules, policy statements, guidelines, and memorandums for review and comment prior to notice being given to the public. If the Board, having been asked for its review, fails to advise the Department within 90 days, the rules shall be considered acted upon.

(c) This Section is repealed on January 1, 2008.

Section 99. Effective date. This Act takes effect upon becoming law.