Sen. James F. Clayborne, Jr.

Filed: 5/26/2016





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2    AMENDMENT NO. ______. Amend Senate Bill 2939 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Public Utilities Act is amended by changing
5Section 16-126.1 and by adding Section 16-126.2 as follows:
6    (220 ILCS 5/16-126.1)
7    Sec. 16-126.1. Regional transmission organization
8memberships. The State shall not directly or indirectly
9prohibit an electric utility that on December 31, 2005 provided
10electric service to at least 100,000 customers in Illinois from
11membership in a Federal Energy Regulatory Commission approved
12regional transmission organization of its choosing. Nothing in
13this Section limits any authority the Commission otherwise has
14to regulate that electric utility. This Section ceases to be
15effective on July 1, 2016 2022 unless extended by the General
16Assembly by law.



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1(Source: P.A. 95-481, eff. 8-28-07.)
2    (220 ILCS 5/16-126.2 new)
3    Sec. 16-126.2. Regional transmission organization capacity
5    (a) The General Assembly finds that the electric generation
6capacity market design of one or more regional transmission
7organizations of which Illinois electric utilities are members
8fails to adequately provide price signals that (i) incent the
9development and availability of electric generation capacity
10resources at times of high demand or unusual stress on the
11electric generation and transmission system, and thereby fail
12to promote the provision of adequate, reliable, and efficient
13electric service to the citizens and businesses of the State of
14Illinois, and (ii) provide adequate compensation to providers
15of electric generation capacity resources needed to maintain,
16at all times of the day, week, and year and under all
17conditions affecting the electric generation and transmission
18resources and system, adequate, reliable, and efficient
19electric service to the citizens and businesses of the State of
21    One of the regional transmission organizations of which
22Illinois electric utilities are members has a membership that
23overwhelmingly consists of vertically integrated utilities
24that own generating facilities the costs of which are recovered
25through cost-of-service-based rates that are charged to



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1captive retail customers and that serve customers in states
2that, unlike Illinois, have elected not to enter into retail
3electric competition; and the other regional transmission
4organization has a membership that overwhelmingly consists of
5utilities that do not own the generation facilities but rather
6obtain their electric supply in competitive wholesale
7generation markets and that serve customers in states that,
8like Illinois, have adopted retail electric competition.
9    The State of Illinois has a direct interest and
10responsibility in ensuring that the citizens and businesses of
11the State of Illinois receive and obtain adequate, reliable,
12and efficient electric service at all hours of the day, week,
13and year and under all conditions affecting the electric
14generation and transmission resources and system serving the
15State of Illinois, and in thereby promoting the health,
16welfare, and safety of the citizens of this State.
17    It is in the public interest of the State of Illinois and
18its citizens for the State to ensure that electric utilities
19holding certificates of public convenience and necessity to
20provide service in this State and providing electric service to
21citizens and businesses in the State of Illinois participate in
22regional transmission organizations with wholesale electricity
23market structures and processes that provide price signals that
24(i) incent the development and availability of electric
25generation capacity resources at times of high demand or
26unusual stress on the electric generation and transmission



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1system, and thereby promote the provision of adequate,
2reliable, and efficient electric service to the citizens and
3businesses of the State of Illinois, and (ii) provide adequate
4compensation to providers of electric generation capacity
5resources needed to maintain, at all times of the day, week,
6and year and under all conditions affecting the electric
7generation and transmission resources and system, adequate,
8reliable, and efficient electric service to the citizens and
9businesses of the State of Illinois, while (iii) maintaining
10appropriate mechanisms to measure and protect against the
11exercise of undue market power by both suppliers and buyers of
12electric generation capacity resources.
13    The General Assembly has heretofore allowed electric
14utilities serving customers in Illinois to exercise choice in
15determining which regional transmission organization to join,
16in the interests of experimentation during the formative years
17of regional transmission organizations and electric industry
18restructuring, the General Assembly now finds, based on the
19review of experience in Illinois, that having portions of the
20State of Illinois located within different regional
21transmission organizations is undesirable for numerous
22reasons, including those stated in the other findings in this
23subsection (a), and that it results in electric generating
24capacity located within the different regional transmission
25organizations receiving different compensation for providing
26the same electric capacity, energy, and reliability services



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1and that absent overwhelming justification to the contrary, it
2is in the public interest of the State of Illinois and its
3citizens and businesses that all electric utilities in this
4State serving more than 100,000 retail electric customers
5should be members of the same regional transmission
7    (b) On or before September 1, 2016, the Illinois Commerce
8Commission shall initiate a proceeding to evaluate the existing
9regional transmission organization of which each electric
10utility that on December 31, 2015 provided delivery services to
11at least 100,000 retail electric customers in Illinois is a
12member. No later than February 28, 2017, the Commission shall
13make a determination as to whether each such regional
14transmission organization met each of the following criteria as
15of September 1, 2016:
16        (1) The regional transmission organization maintains a
17    market for the provision and acquisition of electric
18    generation capacity resources including an electric
19    generation capacity auction process that has the following
20    characteristics:
21            (A) a downward-sloping demand curve for electric
22        generation capacity resources;
23            (B) buyer-side and supplier-side market power
24        mitigation mechanisms sufficient to prevent
25        manipulation of the electric capacity market by both
26        buyers and sellers of electric generation capacity,



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1        such as must-offer requirements for electric
2        generation capacity resources, mandatory participation
3        by load-serving entities for all load, structural
4        market power tests based on numbers of suppliers, and
5        minimum and maximum offer price requirements with
6        energy and ancillary services revenue offsets;
7            (C) a forward term for the base electric generation
8        capacity auction of at least 3 years from the date of
9        each base electric generation capacity auction to the
10        date when the electric generation capacity acquired in
11        the auction is to be provided by the supplier; and
12            (D) an explicit capacity performance product
13        component designed to drive improved generator
14        reliability (i) that incents generators to make
15        investments that help ensure that they perform
16        reliably during extreme weather events and (ii) that
17        places value upon dependable fuel supplies.
18        (2) At least 50% of the electric utilities that are
19    members of the regional transmission organization
20    primarily serve retail electricity customers located in
21    states offering retail electricity competition, or the
22    option to choose the customer's electricity supplier, to a
23    majority of the retail customers in the state.
24    (c) If the Commission determines in the proceeding
25described in subsection (b) that an electric utility that on
26December 31, 2015 provided delivery services to at least



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1100,000 retail electricity customers in Illinois is not a
2member of a regional transmission organization meeting all of
3the criteria specified in subsection (b) as of September 1,
42016, then the Commission shall issue an order in the
5proceeding described in subsection (b) directing the electric
6utility to initiate all actions necessary to become a member of
7a regional transmission organization that the Commission has
8found meets the criteria specified in subsection (b). The
9actions that the Commission shall require of the electric
10utility shall include initiating all actions necessary to
11withdraw from membership in the regional transmission
12organization of which the electric utility is a member and
13applying for membership in a regional transmission
14organization that the Commission has found meets the criteria
15specified in subsection (b). For purposes of this subsection
16(c), "initiating all actions" shall include, without
17limitation: (1) submitting any required notice of withdrawal of
18membership to the regional transmission organization of which
19the electric utility is a member, (2) submitting any required
20application for membership to a regional transmission
21organization that the Commission has found meets the criteria
22specified in subsection (b), and (3) making any necessary
23filings with the Federal Energy Regulatory Commission for
24approval to withdraw from membership in one regional
25transmission organization and to become a member of a regional
26transmission organization meeting the criteria specified in



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1subsection (b).
2    (d) If an electric utility that is directed by the
3Commission pursuant to subsection (c) to become a member of a
4different regional transmission organization owns electric
5transmission facilities in another state in addition to
6Illinois, the electric utility is required to comply with the
7Commission's order issued pursuant to subsection (c) only with
8respect to its transmission facilities located within the State
9of Illinois. Nothing in this subsection (d) shall preclude the
10electric utility from transferring all of its electric
11transmission facilities to a regional transmission
12organization that meets the criteria specified in subsection
14    (e) If an electric utility that is required to withdraw
15from membership in a regional transmission organization
16pursuant to subsection (c) is assessed exit fees or similar
17charges, hereinafter referred to as "exit fees", by the
18regional transmission organization, and the assessment and
19amount of the exit fees is agreed to by the electric utility or
20confirmed or approved by the Federal Energy Regulatory
21Commission, the electric utility may file an application with
22the Commission for authority to recover the amount of the exit
23fees allocable to the electric utility's transmission
24facilities or operations in the State of Illinois through
25charges to the electric utility's delivery services customers
26in Illinois. The Commission shall authorize the electric



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1utility to recover the amount of exit fees assessed by the
2regional transmission organization and agreed to by the
3electric utility or approved by the Federal Energy Regulatory
4Commission that are allocable to Illinois, less any amount of
5the exit fees that the electric utility is authorized to
6recover or be reimbursed for through other means, as a cost of
7service through the electric utility's delivery services
8tariffs. The exit fees shall be recovered through a charge per
9kilowatt-hour included in the electric utility's delivery
10services tariff. The charge per kilowatt-hour shall be uniform
11for all customer classes. The electric utility's tariff shall
12provide for annual reconciliation filings with the Commission
13to reconcile the amount collected with the amount authorized to
14be collected and to provide for surcharges or refunds to
15address any under-collections or over-collections. The
16Commission may direct that the amount of exit fees shall be
17recovered through charges in the electric utility's delivery
18services tariffs over a period longer than one year; provided,
19that in such event, the Commission shall authorize the electric
20utility to record carrying charges, at the rate of return
21authorized in setting the electric utility's delivery services
22rates, on the unrecovered balance of exit fees, and to include
23the carrying charges in the amount of exit fees to be
24recovered. The Commission shall issue its order granting the
25electric utility authority to recover exit fees and approving a
26tariff for this purpose, in accordance with this subsection



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1(e), within 120 days following the filing of the electric
2utility's application.
3    (f) Nothing in this Section shall be construed as imposing
4any requirements or obligations that are in conflict with
5federal law.
6    (g) The Commission shall have authority, on its own motion
7or on complaint, to investigate and determine an electric
8utility's compliance with this Section, including, without
9limiting the scope of the Commission's authority, to determine
10the electric utility's compliance with this Section. Any
11investigation or complaint proceeding before the Commission
12shall be completed by the issuance of a final order within 6
13months following the date that the Commission issued its order
14initiating the investigation or that the complaint was filed.
15    Section 99. Effective date. This Act takes effect upon
16becoming law.".