Illinois General Assembly - Full Text of SB1705
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Full Text of SB1705  94th General Assembly


Rep. Barbara Flynn Currie

Filed: 3/30/2006





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2     AMENDMENT NO. ______. Amend Senate Bill 1705, AS AMENDED,
3 by replacing everything after the enacting clause with the
4 following:
5     "Section 5. The Public Utilities Act is amended by changing
6 Sections 16-101A, 16-102, and 16-107 as follows:
7     (220 ILCS 5/16-101A)
8     Sec. 16-101A. Legislative findings.
9     (a) The citizens and businesses of the State of Illinois
10 have been well-served by a comprehensive electrical utility
11 system which has provided safe, reliable, and affordable
12 service. The electrical utility system in the State of Illinois
13 has historically been subject to State and federal regulation,
14 aimed at assuring the citizens and businesses of the State of
15 safe, reliable, and affordable service, while at the same time
16 assuring the utility system of a return on its investment.
17     (b) Competitive forces are affecting the market for
18 electricity as a result of recent federal regulatory and
19 statutory changes and the activities of other states.
20 Competition in the electric services market may create
21 opportunities for new products and services for customers and
22 lower costs for users of electricity. Long-standing regulatory
23 relationships need to be altered to accommodate the competition
24 that could fundamentally alter the structure of the electric



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1 services market.
2     (c) With the advent of increasing competition in this
3 industry, the State has a continued interest in assuring that
4 the safety, reliability, and affordability of electrical power
5 is not sacrificed to competitive pressures, and to that end,
6 intends to implement safeguards to assure that the industry
7 continues to operate the electrical system in a manner that
8 will serve the public's interest. Under the existing regulatory
9 framework, the industry has been encouraged to undertake
10 certain investments in its physical plant and personnel to
11 enhance its efficient operation, the cost of which it has been
12 permitted to pass on to consumers. The State has an interest in
13 providing the existing utilities a reasonable opportunity to
14 obtain a return on certain investments on which they depended
15 in undertaking those commitments in the first instance while,
16 at the same time, not permitting new entrants into the industry
17 to take unreasonable advantage of the investments made by the
18 formerly regulated industry.
19     (d) A competitive wholesale and retail market must benefit
20 all Illinois citizens. The Illinois Commerce Commission should
21 act to promote the development of an effectively competitive
22 electricity market that operates efficiently and is equitable
23 to all consumers. Consumer protections must be in place to
24 ensure that all customers continue to receive safe, reliable,
25 affordable, and environmentally safe electric service.
26     (e) All consumers must benefit in an equitable and timely
27 fashion from the lower costs for electricity that result from
28 retail and wholesale competition and receive sufficient
29 information to make informed choices among suppliers and
30 services. The use of renewable resources and energy efficiency
31 resources should be encouraged in competitive markets.
32     (f) The efficiency of electric markets depends both upon
33 the competitiveness of supply and upon the
34 price-responsiveness of the demand for service. Therefore, to



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1 ensure the lowest total cost of service and to enhance the
2 reliability of service, all classes of the electricity
3 customers of electric utilities should have access to and be
4 able to voluntarily use real-time pricing and other
5 price-response and demand-response mechanisms.
6 (Source: P.A. 90-561, eff. 12-16-97.)
7     (220 ILCS 5/16-102)
8     Sec. 16-102. Definitions. For the purposes of this Article
9 the following terms shall be defined as set forth in this
10 Section.
11     "Alternative retail electric supplier" means every person,
12 cooperative, corporation, municipal corporation, company,
13 association, joint stock company or association, firm,
14 partnership, individual, or other entity, their lessees,
15 trustees, or receivers appointed by any court whatsoever, that
16 offers electric power or energy for sale, lease or in exchange
17 for other value received to one or more retail customers, or
18 that engages in the delivery or furnishing of electric power or
19 energy to such retail customers, and shall include, without
20 limitation, resellers, aggregators and power marketers, but
21 shall not include (i) electric utilities (or any agent of the
22 electric utility to the extent the electric utility provides
23 tariffed services to retail customers through that agent), (ii)
24 any electric cooperative or municipal system as defined in
25 Section 17-100 to the extent that the electric cooperative or
26 municipal system is serving retail customers within any area in
27 which it is or would be entitled to provide service under the
28 law in effect immediately prior to the effective date of this
29 amendatory Act of 1997, (iii) a public utility that is owned
30 and operated by any public institution of higher education of
31 this State, or a public utility that is owned by such public
32 institution of higher education and operated by any of its
33 lessees or operating agents, within any area in which it is or



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1 would be entitled to provide service under the law in effect
2 immediately prior to the effective date of this amendatory Act
3 of 1997, (iv) a retail customer to the extent that customer
4 obtains its electric power and energy from that customer's own
5 cogeneration or self-generation facilities, (v) an entity that
6 owns, operates, sells, or arranges for the installation of a
7 customer's own cogeneration or self-generation facilities, but
8 only to the extent the entity is engaged in owning, selling or
9 arranging for the installation of such facility, or operating
10 the facility on behalf of such customer, provided however that
11 any such third party owner or operator of a facility built
12 after January 1, 1999, complies with the labor provisions of
13 Section 16-128(a) as though such third party were an
14 alternative retail electric supplier, or (vi) an industrial or
15 manufacturing customer that owns its own distribution
16 facilities, to the extent that the customer provides service
17 from that distribution system to a third-party contractor
18 located on the customer's premises that is integrally and
19 predominantly engaged in the customer's industrial or
20 manufacturing process; provided, that if the industrial or
21 manufacturing customer has elected delivery services, the
22 customer shall pay transition charges applicable to the
23 electric power and energy consumed by the third-party
24 contractor unless such charges are otherwise paid by the third
25 party contractor, which shall be calculated based on the usage
26 of, and the base rates or the contract rates applicable to, the
27 third-party contractor in accordance with Section 16-102.
28     "Base rates" means the rates for those tariffed services
29 that the electric utility is required to offer pursuant to
30 subsection (a) of Section 16-103 and that were identified in a
31 rate order for collection of the electric utility's base rate
32 revenue requirement, excluding (i) separate automatic rate
33 adjustment riders then in effect, (ii) special or negotiated
34 contract rates, (iii) delivery services tariffs filed pursuant



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1 to Section 16-108, (iv) real-time pricing, or (v) tariffs that
2 were in effect prior to October 1, 1996 and that based charges
3 for services on an index or average of other utilities'
4 charges, but including (vi) any subsequent redesign of such
5 rates for tariffed services that is authorized by the
6 Commission after notice and hearing.
7     "Competitive service" includes (i) any service that has
8 been declared to be competitive pursuant to Section 16-113 of
9 this Act, (ii) contract service, and (iii) services, other than
10 tariffed services, that are related to, but not necessary for,
11 the provision of electric power and energy or delivery
12 services.
13     "Contract service" means (1) services, including the
14 provision of electric power and energy or other services, that
15 are provided by mutual agreement between an electric utility
16 and a retail customer that is located in the electric utility's
17 service area, provided that, delivery services shall not be a
18 contract service until such services are declared competitive
19 pursuant to Section 16-113; and also means (2) the provision of
20 electric power and energy by an electric utility to retail
21 customers outside the electric utility's service area pursuant
22 to Section 16-116. Provided, however, contract service does not
23 include electric utility services provided pursuant to (i)
24 contracts that retail customers are required to execute as a
25 condition of receiving tariffed services, or (ii) special or
26 negotiated rate contracts for electric utility services that
27 were entered into between an electric utility and a retail
28 customer prior to the effective date of this amendatory Act of
29 1997 and filed with the Commission.
30     "Delivery services" means those services provided by the
31 electric utility that are necessary in order for the
32 transmission and distribution systems to function so that
33 retail customers located in the electric utility's service area
34 can receive electric power and energy from suppliers other than



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1 the electric utility, and shall include, without limitation,
2 standard metering and billing services.
3     "Electric utility" means a public utility, as defined in
4 Section 3-105 of this Act, that has a franchise, license,
5 permit or right to furnish or sell electricity to retail
6 customers within a service area.
7     "Mandatory transition period" means the period from the
8 effective date of this amendatory Act of 1997 through January
9 1, 2007.
10     "Municipal system" shall have the meaning set forth in
11 Section 17-100.
12     "Real-time pricing" means tariffed retail charges for
13 delivered electric power and energy that vary on an
14 hour-to-hour and are determined from wholesale market prices
15 using a methodology approved by the Illinois Commerce
16 Commission basis for nonresidential retail customers and that
17 vary on a periodic basis during the day for residential retail
18 customers.
19     "Retail customer" means a single entity using electric
20 power or energy at a single premises and that (A) either (i) is
21 receiving or is eligible to receive tariffed services from an
22 electric utility, or (ii) that is served by a municipal system
23 or electric cooperative within any area in which the municipal
24 system or electric cooperative is or would be entitled to
25 provide service under the law in effect immediately prior to
26 the effective date of this amendatory Act of 1997, or (B) an
27 entity which on the effective date of this Act was receiving
28 electric service from a public utility and (i) was engaged in
29 the practice of resale and redistribution of such electricity
30 within a building prior to January 2, 1957, or (ii) was
31 providing lighting services to tenants in a multi-occupancy
32 building, but only to the extent such resale, redistribution or
33 lighting service is authorized by the electric utility's
34 tariffs that were on file with the Commission on the effective



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1 date of this Act.
2     "Service area" means (i) the geographic area within which
3 an electric utility was lawfully entitled to provide electric
4 power and energy to retail customers as of the effective date
5 of this amendatory Act of 1997, and includes (ii) the location
6 of any retail customer to which the electric utility was
7 lawfully providing electric utility services on such effective
8 date.
9     "Small commercial retail customer" means those
10 nonresidential retail customers of an electric utility
11 consuming 15,000 kilowatt-hours or less of electricity
12 annually in its service area.
13     "Tariffed service" means services provided to retail
14 customers by an electric utility as defined by its rates on
15 file with the Commission pursuant to the provisions of Article
16 IX of this Act, but shall not include competitive services.
17     "Transition charge" means a charge expressed in cents per
18 kilowatt-hour that is calculated for a customer or class of
19 customers as follows for each year in which an electric utility
20 is entitled to recover transition charges as provided in
21 Section 16-108:
22         (1) the amount of revenue that an electric utility
23     would receive from the retail customer or customers if it
24     were serving such customers' electric power and energy
25     requirements as a tariffed service based on (A) all of the
26     customers' actual usage during the 3 years ending 90 days
27     prior to the date on which such customers were first
28     eligible for delivery services pursuant to Section 16-104,
29     and (B) on (i) the base rates in effect on October 1, 1996
30     (adjusted for the reductions required by subsection (b) of
31     Section 16-111, for any reduction resulting from a rate
32     decrease under Section 16-101(b), for any restatement of
33     base rates made in conjunction with an elimination of the
34     fuel adjustment clause pursuant to subsection (b), (d), or



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1     (f) of Section 9-220 and for any removal of decommissioning
2     costs from base rates pursuant to Section 16-114) and any
3     separate automatic rate adjustment riders (other than a
4     decommissioning rate as defined in Section 16-114) under
5     which the customers were receiving or, had they been
6     customers, would have received electric power and energy
7     from the electric utility during the year immediately
8     preceding the date on which such customers were first
9     eligible for delivery service pursuant to Section 16-104,
10     or (ii) to the extent applicable, any contract rates,
11     including contracts or rates for consolidated or
12     aggregated billing, under which such customers were
13     receiving electric power and energy from the electric
14     utility during such year;
15         (2) less the amount of revenue, other than revenue from
16     transition charges and decommissioning rates, that the
17     electric utility would receive from such retail customers
18     for delivery services provided by the electric utility,
19     assuming such customers were taking delivery services for
20     all of their usage, based on the delivery services tariffs
21     in effect during the year for which the transition charge
22     is being calculated and on the usage identified in
23     paragraph (1);
24         (3) less the market value for the electric power and
25     energy that the electric utility would have used to supply
26     all of such customers' electric power and energy
27     requirements, as a tariffed service, based on the usage
28     identified in paragraph (1), with such market value
29     determined in accordance with Section 16-112 of this Act;
30         (4) less the following amount which represents the
31     amount to be attributed to new revenue sources and cost
32     reductions by the electric utility through the end of the
33     period for which transition costs are recovered pursuant to
34     Section 16-108, referred to in this Article XVI as a



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1     "mitigation factor":
2             (A) for nonresidential retail customers, an amount
3         equal to the greater of (i) 0.5 cents per kilowatt-hour
4         during the period October 1, 1999 through December 31,
5         2004, 0.6 cents per kilowatt-hour in calendar year
6         2005, and 0.9 cents per kilowatt-hour in calendar year
7         2006, multiplied in each year by the usage identified
8         in paragraph (1), or (ii) an amount equal to the
9         following percentages of the amount produced by
10         applying the applicable base rates (adjusted as
11         described in subparagraph (1)(B)) or contract rate to
12         the usage identified in paragraph (1): 8% for the
13         period October 1, 1999 through December 31, 2002, 10%
14         in calendar years 2003 and 2004, 11% in calendar year
15         2005 and 12% in calendar year 2006; and
16             (B) for residential retail customers, an amount
17         equal to the following percentages of the amount
18         produced by applying the base rates in effect on
19         October 1, 1996 (adjusted as described in subparagraph
20         (1)(B)) to the usage identified in paragraph (1): (i)
21         6% from May 1, 2002 through December 31, 2002, (ii) 7%
22         in calendar years 2003 and 2004, (iii) 8% in calendar
23         year 2005, and (iv) 10% in calendar year 2006;
24         (5) divided by the usage of such customers identified
25     in paragraph (1),
26 provided that the transition charge shall never be less than
27 zero.
28     "Unbundled service" means a component or constituent part
29 of a tariffed service which the electric utility subsequently
30 offers separately to its customers.
31 (Source: P.A. 91-50, eff. 6-30-99; 92-537, eff. 6-6-02.)
32     (220 ILCS 5/16-107)
33     Sec. 16-107. Real-time pricing.



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1     (a) Each electric utility shall file, on or before May 1,
2 1998, a tariff or tariffs which allow nonresidential retail
3 customers in the electric utility's service area to elect
4 real-time pricing beginning October 1, 1998.
5     (b) Each electric utility shall file, on or before May 1,
6 2000, a tariff or tariffs which allow residential retail
7 customers in the electric utility's service area to elect
8 real-time pricing beginning October 1, 2000.
9     (b-5) Each electric utility shall file a tariff or tariffs
10 allowing residential retail customers in the electric
11 utility's service area to elect real-time pricing beginning
12 January 2, 2007. A customer who elects real-time pricing shall
13 remain on such rate for a minimum of 12 months. The Commission
14 may, after notice and hearing, approve the tariff or tariffs,
15 provided that the Commission finds that the potential for
16 demand reductions will result in net economic benefits to all
17 residential customers of the electric utility. In examining
18 economic benefits from demand reductions, the Commission
19 shall, at a minimum, consider the following: improvements to
20 system reliability and power quality, reduction in wholesale
21 market prices and price volatility, electric utility cost
22 avoidance and reductions, market power mitigation, and other
23 benefits of demand reductions, but only to the extent that the
24 effects of reduced demand can be demonstrated to lower the cost
25 of electricity delivered to residential customers. A tariff or
26 tariffs approved pursuant to this subsection (b-5) shall, at a
27 minimum, describe (i) the methodology for determining the
28 market price of energy to be reflected in the real-time rate
29 and (ii) the manner in which customers who elect real-time
30 pricing will be provided with ready access to hourly market
31 prices, including, but not limited to, day-ahead hourly energy
32 prices.
33     A proceeding under this subsection (b-5) may not exceed 120
34 days in length.



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1     (b-10) Each electric utility providing real-time pricing
2 pursuant to subsection (b-5) shall install a meter capable of
3 recording hourly interval energy use at the service location of
4 each customer that elects real-time pricing pursuant to this
5 subsection.
6     (b-15) If the Commission issues an order pursuant to
7 subsection (b-5), the affected electric utility shall contract
8 with an entity not affiliated with the electric utility to
9 serve as a program administrator to develop and implement a
10 program to provide consumer outreach, enrollment, and
11 education concerning real-time pricing and to establish and
12 administer an information system and technical and other
13 customer assistance that is necessary to enable customers to
14 manage electricity use. The program administrator: (i) shall be
15 selected and compensated by the electric utility, subject to
16 Commission approval; (ii) shall have demonstrated technical
17 and managerial competence in the development and
18 administration of demand management programs; and (iii) may
19 develop and implement risk management, energy efficiency, and
20 other services related to energy use management for which the
21 program administrator shall be compensated by participants in
22 the program receiving such services. The electric utility shall
23 provide the program administrator with all information and
24 assistance necessary to perform the program administrator's
25 duties, including, but not limited to, customer, account, and
26 energy use data. The electric utility shall permit the program
27 administrator to include inserts in residential customer bills
28 2 times per year to assist with customer outreach and
29 enrollment.
30     The program administrator shall submit an annual report to
31 the electric utility no later than April 1 of each year
32 describing the operation and results of the program, including
33 information concerning the number and types of customers using
34 real-time pricing, changes in customers' energy use patterns,



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1 an assessment of the value of the program to both participants
2 and non-participants, and recommendations concerning
3 modification of the program and the tariff or tariffs filed
4 under subsection (b-5). This report shall be filed by the
5 electric utility with the Commission within 30 days of receipt
6 and shall be available to the public on the Commission's web
7 site.
8     (b-20) The Commission shall monitor the performance of
9 programs established pursuant to subsection (b-15) and shall
10 order the termination or modification of a program if it
11 determines that the program is not, after a reasonable period
12 of time for development not to exceed 4 years, resulting in net
13 benefits to the residential customers of the electric utility.
14     (b-25) An electric utility shall be entitled to recover
15 reasonable costs incurred in complying with this Section,
16 provided that recovery of the costs is fairly apportioned among
17 its residential customers as provided in this subsection
18 (b-25). The electric utility may apportion greater costs on the
19 residential customers who elect real-time pricing, but may also
20 impose some of the costs of real-time pricing on customers who
21 do not elect real-time pricing, provided that the Commission
22 determines that the cost savings resulting from real-time
23 pricing will exceed the costs imposed on customers for
24 maintaining the program.
25     (c) The electric utility's tariff or tariffs filed pursuant
26 to this Section shall be subject to Article IX.
27     (d) This Section does not apply to any electric utility
28 providing service to 100,000 or fewer customers.
29 (Source: P.A. 90-561, eff. 12-16-97.)
30     Section 99. Effective date. This Act takes effect upon
31 becoming law.".