HB1370ham002 97TH GENERAL ASSEMBLY

Rep. Thomas Holbrook

Filed: 4/12/2011

09700HB1370ham002 LRB097 09315 ASK 54260 a

AMENDMENT TO HOUSE BILL 1370

AMENDMENT NO. ______. Amend House Bill 1370 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Power Agency Act is amended by changing Section 1-92 as follows:

(20 ILCS 3855/1-92)

Sec. 1-92. Aggregation of retail electrical load of residential and small commercial retail customers by municipalities and counties.

(a) The corporate authorities of a municipality or county board of a county may adopt an ordinance under which it may aggregate, in accordance with this Section, residential and small commercial retail electrical loads of applicable residential and small commercial retail customers located, respectively, within the municipality or the unincorporated areas of the county and, for that purpose, shall may solicit bids and enter into service agreements to facilitate for those loads the sale and purchase of electricity and related services and equipment through a competitive procurement process. For purposes of this Section, small commercial retail customers of an electric utility that on December 31, 2010 provided electric service to at least 2,000,000 customers in Illinois shall be those customers of the watt-hour only delivery service class. For purposes of this Section, small commercial retail customers of an electric utility that on December 31, 2010 provided electric service to 2,000,000 or fewer customers but more than 100,000 customers in Illinois shall be those customers of an electric utility consuming 15,000 kilowatt-hours or less of electricity annually in its service area. Applicable residential and small commercial retail customers in an aggregation program shall not include customers of an alternative retail electric supplier that is not the chosen supplier of the aggregation program or customers participating in a residential real-time pricing program or Percentage of Income Payment Plan (PIPP) unless those customers affirmatively choose to join the aggregation program.

If the corporate authorities or the county board seek to operate the aggregation program as an opt-out program, then the program applies solely to residential and small commercial retail customers that are taking service from the electric utility through fixed-price bundled service tariffs or taking electric supply service offered by an alternative retail electric supplier from an expiring or current aggregation program. The corporate authorities or the county board shall allow new residents outside of an opt-out period, and non-applicable residential and small commercial retail customers who were not eligible to receive the opt-out notice, to affirmatively commit to the terms and conditions of an opt-out program at any time during the length of the program under a process disclosed in the plan of operation and governance.

The corporate authorities or county board may also exercise such authority jointly with any other municipality or county. Two or more municipalities or counties, or a combination of both, may initiate a process jointly to authorize aggregation by a majority vote of each particular municipality or county as required by this Section.

If the corporate authorities or the county board seek to operate the aggregation program as an opt-out program for residential and small commercial retail customers, then prior to the adoption of an ordinance with respect to aggregation of residential and small commercial retail electric loads, the corporate authorities of a municipality or the county board of a county shall submit a referendum to its residents to determine whether or not the aggregation program shall operate as an opt-out program for residential and small commercial retail customers.

In addition to the notice and conduct requirements of the general election law, notice of the referendum shall state briefly the purpose of the referendum. The question of whether the corporate authorities or the county board shall adopt an opt-out aggregation program for residential and small commercial retail customers shall be submitted to the electors of the municipality or county board at a regular election and approved by a majority of the electors voting on the question. The corporate authorities or county board must certify to the proper election authority, which must submit the question at an election in accordance with the Election Code.

The election authority must submit the question in substantially the following form:

Shall the (municipality or county in which the question is being voted upon) have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such program? The election authority must record the votes as "Yes" or "No".

If a majority of the electors voting on the question vote in the affirmative, then the corporate authorities or county board may implement an opt-out aggregation program for residential and small commercial retail customers.

A referendum must pass in each particular municipality or county that is engaged in the aggregation program. If the referendum fails, then the corporate authorities or county board shall operate the aggregation program as an opt-in program for residential and small commercial retail customers.

An ordinance under this Section shall specify whether the aggregation will occur only with the prior consent of each person owning, occupying, controlling, or using an electric load center proposed to be aggregated. Nothing in this Section, however, authorizes the aggregation of electric loads that are served or authorized to be served by an electric cooperative as defined by and pursuant to the Electric Supplier Act or loads served by a municipality that owns and operates its own electric distribution system. No aggregation shall take effect unless approved by a majority of the members of the corporate authority or county board voting upon the ordinance.

A governmental aggregator under this Section is not a public utility, agent, broker, consultant, or an alternative retail electric supplier. Nothing in this Section prohibits a governmental aggregator from retaining the services of an agent, broker, or consultant.

(a-5) A governmental aggregator must utilize the services of a qualified expert for the execution of a competitive procurement process to meet the supply needs of its aggregation. The qualified expert must be separate from, and maintain no business relationship with, any other consultant providing services to the governmental aggregator. A qualified expert, as evidenced by a certified affidavit, must have:

(1) direct previous experience administering large-scale competitive procurement processes;

(2) an advanced degree in economics, mathematics, engineering, or a related area of study;

(3) ten years of experience in the electricity sector, including risk management experience;

(4) expertise in credit and contract protocols;

(5) adequate resources to perform and fulfill the required functions and responsibilities, including a bidding and posting process that provides complete auditable communication and bidding recording functions; and

(6) the absence of a conflict of interest and inappropriate bias for or against potential bidders as evidenced by an affidavit certifying that the expert does not maintain compensation or agency agreements with any of the bidders participating in the procurement event.

(a-10) The Director of the Illinois Power Agency shall provide governmental aggregators and other interested parties with the names of experts deemed as qualified by the Agency to serve as the procurement administrators for the most recent Agency-administered procurement events.

(b) Upon the applicable requisite authority under this Section, the corporate authorities or the county board, with assistance from the Illinois Power Agency, shall develop a plan of operation and governance for the aggregation program so authorized.

For an opt-out program, the plan shall specify the process and associated timelines for applicable residential and small commercial retail customers choosing to opt out of the program as well as for non-applicable customers affirmatively choosing to join the aggregation program. The plan for an opt-out program shall ensure that applicable residential and small commercial retail customers are explicitly allowed through written or electronic notice the opportunity to opt out of the aggregation program at a minimum of once every 3 years with no penalty, with the right to opt out to either (i) the electric utility if bundled retail electric service is still offered to that customer class pursuant to Section 16-103 of the Public Utilities Act, (ii) an electric utility's residential real-time pricing rate, if available, or (iii) an electric supply service offered by an alternative retail electric supplier certified by the Commission. The plan for the aggregation program shall not conflict with or otherwise abrogate any existing contracts between an alternative retail electric supplier and residential and small commercial retail customers.

Before adopting a plan under this Section, the corporate authorities or county board shall hold at least 2 public hearings on the plan. Before the first hearing, the corporate authorities or county board shall publish notice of the hearings once a week for 2 consecutive weeks in a newspaper of general circulation in the jurisdiction. The notice shall summarize the plan and state the date, time, and location of each hearing. Any load aggregation plan established pursuant to this Section shall:

(1) provide for universal access to all applicable residential customers and equitable treatment of applicable residential customers;

(2) describe demand management and energy efficiency services to be provided to each class of customers; and

(3) meet any requirements established by law concerning aggregated service offered pursuant to this Section.

(c) The process for soliciting bids for electricity and other related services and awarding proposed agreements for the purchase of electricity and other related services shall be conducted in the following order:

(1) The corporate authorities or county board shall may solicit bids for electricity and other related services through a competitive procurement process.

(2) Notwithstanding Section 16-122 of the Public Utilities Act and Section 2HH of the Consumer Fraud and Deceptive Business Practices Act, an electric utility that provides residential and small commercial retail electric service in the aggregate area must, upon request of the corporate authorities or the county board in the aggregate area, submit to the requesting party, in an electronic format, those account numbers, names, and addresses of applicable residential and small commercial retail customers in the aggregate area of the municipality or unincorporated areas of the county that are reflected in the electric utility's records at the time of the request. An electric utility shall exclude any customer already switched to an alternative retail electric supplier, any customer participating in a residential real-time pricing program, and any customer participating in a Percentage of Income Payment Plan from the information provided to the corporate authority or county board in the aggregate area. Upon receiving enrollments from an opt-out aggregation, an electric utility shall design system processes to reject any opt-out aggregation enrollment that would result in the switch of a customer already under service with an alternative retail electric supplier, participating in a residential real-time pricing program, or participating in a Percentage of Income Payment Plan. Any corporate authority or county board receiving customer information from an electric utility shall only disclose the information for the purpose of the opt-out aggregation of electric power supply and shall be subject to the limitations on the disclosure of the information described in Section 16-122 of the Public Utilities Act and Section 2HH of the Consumer Fraud and Deceptive Business Practices Act, and an electric utility shall not be held liable for any claims arising out of the provision of information pursuant to this item (2).

(d) If the corporate authorities or county board operate under an opt-in program for residential and small commercial retail customers, then the corporate authorities or county board shall comply with all of the following:

(1) Within 60 days after receiving the bids, the corporate authorities or county board shall allow residential and small commercial retail customers to commit to the terms and conditions of a bid that has been selected by the corporate authorities or county board.

(2) If (A) the corporate authorities or county board award proposed agreements for the purchase of electricity and other related services and (B) an agreement is reached between the corporate authorities or county board for those services, then customers committed to the terms and conditions according to item (1) of this subsection (d) shall be committed to the agreement.

(e) If the corporate authorities or county board operate as an opt-out program for residential and small commercial retail customers, then it shall be the duty of the aggregated entity to fully inform applicable residential and small commercial retail customers in advance that they have the right to opt out of the aggregation program. The disclosure shall prominently state all charges to be made and shall include full disclosure of the cost to obtain service pursuant to Section 16-103 of the Public Utilities Act, how to access it, and the fact that it is available to them without penalty, if they are currently receiving service under that Section.

The Illinois Commerce Commission shall adopt emergency rules to implement the provisions of this amendatory Act of the 97th General Assembly, including, but not limited to, protection of customers (i) already under contract with an alternative retail electric supplier, (ii) participating in a residential real-time pricing program, or (iii) participating in a Percentage of Income Payment Plan, utility processes for enrollment of opt-out customers, and minimum disclosure requirements for opt-out aggregation programs within 45 days after the effective date of this amendatory Act of the 97th General Assembly.

The Illinois Power Agency shall furnish, without charge, to any residential and small commercial retail customer citizen a list of all supply options available to them in a format that allows comparison of prices and products.

The Illinois Power Agency shall provide assistance to municipalities, counties, or associations working with municipalities to help complete the plan and bidding process.

This Section does not prohibit municipalities or counties from entering into an intergovernmental agreement to aggregate residential and small commercial retail electric loads.

Any aggregation program plan adopted prior to the effective date of this amendatory Act of the 97th General Assembly shall not be exempt from the provisions of this amendatory Act of the 97th General Assembly.

(Source: P.A. 96-176, eff. 1-1-10.)

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