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90_HB0676
SEE INDEX
Amends the Public Utilities Act. Creates the Competitive
Electric Generation Law. Establishes the parameters for
competition in the production and sale of electricity.
Requires utilities to restructure to separate generation
operations from other company operations. Requires utilities
to provide wholesale electricity and energy efficiency
programs. Creates a Universal Service Fund to provide
service to low-income customers. Provides for recovery of
certain uneconomic costs by utilities. Authorizes the
Commission to regulate power marketers. Creates a Ratepayer
Equity Fund into which utilities must pay company stock in
the amount of the uneconomic costs recovered. Requires the
State Treasurer to manage the Fund to maximize returns to
ratepayers. Effective June 1, 1997.
LRB9003687JSgcA
LRB9003687JSgcA
1 AN ACT concerning the generation of electricity, amending
2 named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Public Utilities Act is amended by
6 changing Sections 3-105 and 5-105 and adding Article XVI as
7 follows:
8 (220 ILCS 5/3-105) (from Ch. 111 2/3, par. 3-105)
9 Sec. 3-105. Public utility. "Public utility" means and
10 includes, except where otherwise expressly provided in this
11 Section, every corporation, company, limited liability
12 company, association, joint stock company or association,
13 firm, partnership or individual, their lessees, trustees, or
14 receivers appointed by any court whatsoever that owns,
15 controls, operates or manages, within this State, directly or
16 indirectly, for public use, any plant, equipment or property
17 used or to be used for or in connection with, or owns or
18 controls any franchise, license, permit or right to engage
19 in:
20 (a) a. the production, storage, transmission, sale,
21 delivery or furnishing of heat, cold, power (other than,
22 electricity), water, or light, except when used solely
23 for communications purposes;
24 (b) the transmission, delivery, or furnishing of
25 electricity;
26 (c) b. the disposal of sewerage; or
27 (d) c. the conveyance of oil or gas by pipe line.
28 "Public utility" does not include, however:
29 1. public utilities that are owned and operated by
30 any political subdivision, public institution of higher
31 education or municipal corporation of this State, or
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1 public utilities that are owned by such political
2 subdivision, public institution of higher education, or
3 municipal corporation and operated by any of its lessees
4 or operating agents;
5 2. water companies which are purely mutual
6 concerns, having no rates or charges for services, but
7 paying the operating expenses by assessment upon the
8 members of such a company and no other person;
9 3. electric cooperatives as defined in Section
10 3-119;
11 4. residential natural gas cooperatives that are
12 not-for-profit corporations established for the purpose
13 of administering and operating, on a cooperative basis,
14 the furnishing of natural gas to residences for the
15 benefit of their members who are residential consumers of
16 natural gas. For entities qualifying as residential
17 natural gas cooperatives and recognized by the Illinois
18 Commerce Commission as such, the State shall guarantee
19 legally binding contracts entered into by residential
20 natural gas cooperatives for the express purpose of
21 acquiring natural gas supplies for their members. The
22 Illinois Commerce Commission shall establish rules and
23 regulations providing for such guarantees. The total
24 liability of the State in providing all such guarantees
25 shall not at any time exceed $1,000,000, nor shall the
26 State provide such a guarantee to a residential natural
27 gas cooperative for more than 3 consecutive years;
28 5. sewage disposal companies which provide sewage
29 disposal services on a mutual basis without establishing
30 rates or charges for services, but paying the operating
31 expenses by assessment upon the members of the company
32 and no others;
33 6. (Blank);
34 7. cogeneration facilities, small power production
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1 facilities, and other qualifying facilities, as defined
2 in the Public Utility Regulatory Policies Act and
3 regulations promulgated thereunder, except to the extent
4 State regulatory jurisdiction and action is required or
5 authorized by federal law, regulations, regulatory
6 decisions or the decisions of federal or state courts of
7 competent jurisdiction; and
8 8. the ownership or operation of a facility that
9 sells compressed natural gas at retail to the public for
10 use only as a motor vehicle fuel and the selling of
11 compressed natural gas at retail to the public for use
12 only as a motor vehicle fuel; and.
13 9. the generation or production of electricity as
14 authorized under Article XVI.
15 For the purpose of the least-cost planning obligations of
16 Section 8-401 and for all of Section 8-402, the Illinois
17 Commerce Commission may, for good cause shown in individual
18 cases, exclude from the meaning of "public utility" the
19 electric operations of any public utility, as otherwise
20 defined in this Act, which serves less than 20,000 electric
21 customers within the State of Illinois, or the gas operations
22 of any public utility, as otherwise defined in this Act,
23 which serves less than 20,000 gas customers within the State
24 of Illinois.
25 (Source: P.A. 88-480; 89-42, eff. 1-1-96.)
26 (220 ILCS 5/5-105) (from Ch. 111 2/3, par. 5-105)
27 Sec. 5-105. Audits and inspections. The Commission may
28 provide for the examination and audit of all accounts, and
29 all items shall be allocated to the accounts in the manner
30 prescribed by the Commission. The officers and employees of
31 the Commission shall have authority under the direction of
32 the Commission to inspect and examine any and all books,
33 accounts, papers, records and memoranda kept by such public
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1 utilities. The officers and employees of the Commission shall
2 have the authority under the direction of the Commission to
3 inspect and examine any and all books, accounts, papers,
4 records, and memoranda kept by all affiliates of the public
5 utility for the purpose of determining whether any utility
6 resources have been used to subsidize non-utility business.
7 (Source: P.A. 84-617.)
8 (220 ILCS 5/Art. XVI heading new)
9 ARTICLE XVI. COMPETITIVE ELECTRIC GENERATION LAW
10 (220 ILCS 5/16-100 new)
11 Sec. 16-100. Short title. This Article may be cited as
12 the Competitive Electric Generation Law.
13 (220 ILCS 5/16-101 new)
14 Sec. 16-101. Legislative findings; electric services.
15 With respect to the provision and sale of electric services
16 within this State, the General Assembly finds that:
17 (1) universally available and affordable electric
18 services are essential to the health, welfare, and prosperity
19 of all Illinois citizens;
20 (2) recent federal and State regulatory activity and
21 changes in the electric industry necessitate a revision of
22 the State's electric regulatory policies and practices; and
23 (3) protection of the public interest requires the
24 continuation of certain regulation of entities providing
25 electric service in this State.
26 (220 ILCS 5/16-102 new)
27 Sec. 16-102. Policy. Consistent with its findings, the
28 General Assembly declares that it is the policy of the State
29 of Illinois that:
30 (1) A competitive wholesale and retail electricity
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1 market must benefit all Illinois citizens. Consumer
2 protections must be in place to ensure that all customers
3 continue to receive safe, reliable, and affordable electric
4 service.
5 (2) The Illinois Commerce Commission should continue its
6 oversight and regulation of electric utilities to promote the
7 development of an effectively competitive electricity market
8 that operates efficiently and is equitable to all consumers.
9 (3) The interests of all consumers must be fully
10 considered and taken into account in any Commission decision
11 regarding the restructuring of the electricity market.
12 (4) All consumers must benefit in an equitable and
13 timely fashion from the lower costs for electricity that
14 result from retail and wholesale competition.
15 (5) Conservation of finite resources and environmental
16 protection must be pursued in a competitive market through
17 the increased use of renewable resources and energy
18 efficiency programs.
19 (220 ILCS 5/16-105 new)
20 Sec. 16-105. Construction; procedure.
21 (a) If there is a conflict between the provisions of
22 this Article and any other provisions of this Act, the
23 provisions of this Article shall control.
24 (b) All Commission decisions made under this Article
25 must be made in compliance with Article X of this Act.
26 (220 ILCS 5/16-107 new)
27 Sec. 16-107. Definitions. For the purposes of this
28 Article the following terms shall be defined as set forth in
29 this Section.
30 "Commission" means the Illinois Commerce Commission.
31 "Department of Natural Resources" means the Illinois
32 Department of Natural Resources.
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1 "Electric utility" or "utility" means a public utility as
2 defined in Section 3-105 of this Act that does not own
3 generation plant and furnishes electricity to customers
4 within its service territory.
5 "Energy efficiency program" means the replacement or
6 modification of energy-using machinery, equipment, and
7 appliances that results in lower kilowatt-hour consumption
8 for the same level of use or the installation of a device or
9 modification of physical property at a residential,
10 commercial, or industrial site that results in lower
11 kilowatt-hour use by the customer.
12 "End-use customer" means a customer who purchases
13 electricity, energy efficiency, and other services for its
14 own use and not for resale.
15 "Holding company" means the company that owns the
16 electric utility and its affiliates.
17 "Power marketer" means a for-profit, not-for-profit,
18 governmental, or other entity that is not an electric
19 utility, a public utility owned by a municipal corporation,
20 or an electric cooperative and that purchases and resells to
21 end-use customers or arranges for the sale to end-use
22 customers of energy, capacity, energy efficiency programs,
23 and other customer services. Power marketers may purchase
24 and resell or arrange for the sale of power and other
25 customer services on behalf of the aggregated load of a group
26 of end-use customers.
27 "Energy supplier" means an entity other than the electric
28 utility that sells energy, capacity, energy efficiency
29 programs and other related services to a power marketer or to
30 end-use customers located in the service territory of the
31 electric utility, and that is not a wholesale power supplier.
32 "Renewable resource" means solar, wind, geothermal,
33 organic waste biomass, dedicated energy crops, landfill gas,
34 or fuel cells.
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1 "Small commercial customer" means a customer that
2 receives service under the electric utility's tariff for
3 commercial customers and that is not being billed for demand
4 charges as of the effective date of this amendatory Act of
5 1997.
6 "Structural separation" means the transfer of a utility's
7 generation capacity into a company or companies that are
8 separate from its transmission, distribution, and other
9 operations. The separate companies may be affiliates.
10 "Wholesale power supplier" means an entity that sells
11 energy and capacity directly to an electric utility for
12 resale to the customers of that utility.
13 (220 ILCS 5/16-110 new)
14 Sec. 16-110. Separation of generating capacity.
15 (a) No later than 60 days after the effective date of
16 this amendatory Act of 1997 a utility shall submit to the
17 Commission a plan for the structural separation of its
18 generation operations. The plan shall, at a minimum, provide
19 for:
20 (1) the identification and allocation of common
21 costs among all subsidiaries of the holding company;
22 (2) the identification and offering of each
23 noncompetitive service on a cost-based, comparable, and
24 nondiscriminatory basis; and
25 (3) the prevention of the use of staff,
26 information, and other resources by affiliates in a
27 manner that will provide competitive advantages for the
28 affiliates in the market for electricity, energy
29 efficiency programs, and related customer services.
30 (b) No later than 6 months after submission of the
31 restructuring plan the Commission shall review and modify the
32 plan where necessary to comply with the requirements of
33 subsection (a).
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1 (c) The restructuring described in the plan approved by
2 the Commission shall be completed no later than 60 days after
3 Commission approval.
4 (d) No later than 6 months after the effective date of
5 this amendatory Act of 1997, the Commission shall modify
6 existing rules governing affiliate transactions as necessary
7 to prevent the use of affiliate relationships to impede
8 competition in the wholesale and retail power markets.
9 (220 ILCS 5/16-115 new)
10 Sec. 16-115. Responsibilities of electric utilities.
11 All applicable portions of the Public Utilities Act
12 notwithstanding, an electric utility shall:
13 (1) Purchase energy, capacity, energy efficiency
14 programs, and ancillary services on the competitive wholesale
15 market as provided for in this amendatory Act of 1997.
16 (2) Provide electricity to all customers within its
17 service territory at the rates approved by the Commission
18 under Section 16-135, except for electricity purchased by
19 end-use customers pursuant to Section 16-150.
20 (3) Maintain transmission and distribution facilities in
21 order to provide reliable and safe service.
22 (4) Meter and bill customers for electricity,
23 transmission, distribution, and all other services provided
24 by the utility, except where a power marketer is providing
25 those services to those customers.
26 (5) Comply with Part 280 of the Illinois Administrative
27 Code.
28 (6) Administer universal service programs established by
29 the Commission under Section 16-130. An electric utility
30 shall report annually to the Commission on the effectiveness
31 of these programs in making energy and related services more
32 affordable to low-income customers.
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1 (220 ILCS 5/16-120 new)
2 Sec. 16-120. Commission guidelines for mergers and
3 acquisitions.
4 (a) No later than 6 months after the effective date of
5 this amendatory Act of 1997, the Commission shall issue rules
6 governing mergers between companies owning electric
7 generation, transmission, or distribution facilities and any
8 other company under the Commission's jurisdiction. The rules
9 shall at a minimum stipulate that mergers shall only be
10 approved if the companies can demonstrate that:
11 (1) the merger will not reduce the level of
12 existing competition and will not deter or delay the
13 development of greater or more effective competition in
14 the Illinois electricity market; and
15 (2) the merger will provide immediate, sustainable,
16 and substantial rate reductions which could not be
17 achieved by other means.
18 (b) The Commission shall not approve a merger without
19 ruling on:
20 (1) the allocation of the savings resulting from
21 the merger; and
22 (2) whether the companies should be allowed to
23 recover any of the costs incurred in accomplishing the
24 merger and, if so, the amount of costs eligible for
25 recovery and how the costs will be allocated.
26 (220 ILCS 5/16-125 new)
27 Sec. 16-125. Provision of wholesale energy resources.
28 (a) A utility shall begin providing electricity and
29 energy efficiency programs purchased from wholesale power
30 suppliers to end-use customers no later than 18 months after
31 the effective date of this amendatory Act of 1997, according
32 to the schedule and procedures established in this Section
33 and in Section 16-160.
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1 One month after a utility has completed the restructuring
2 required under Section 16-110, the utility shall submit for
3 Commission approval a request for proposals from wholesale
4 power suppliers to provide energy, capacity, and energy
5 efficiency programs to its service territory beginning 6
6 months after the issuance of the requests.
7 (1) The requests for proposals for energy and
8 capacity must be approved or modified where necessary by
9 the Commission and issued within 30 days. The Commission
10 shall only approve a request for proposals upon a
11 determination that the requests are designed to result in
12 the provision of safe, reliable, and least-cost power
13 under a portfolio of contracts that minimizes the risk of
14 price volatility.
15 (2) Prior to the issuance of the requests for
16 proposals, a utility shall provide to the Commission
17 projections of energy use, peak demand by customer class,
18 and coincident peak demand for all customers for each
19 year of a time period to be determined by the Commission,
20 adjusted for reductions in peak demand and energy use
21 resulting from the provision of energy efficiency
22 programs under Section 16-160 and shall provide any other
23 information the Commission requires to evaluate the
24 requests for proposals.
25 (b) The requests for proposals issued under subsection
26 (a) shall be for no more than one-third of the load of the
27 service territory. Requests for proposals to supply the final
28 two-thirds of a utility's load shall be issued 6 months and 9
29 months after the initial request for proposals. The second
30 request for proposals may include any portion of the first
31 one-third of the load for which contracts have not been
32 signed, and the final request may include any portion of the
33 load for which contracts have not been signed.
34 (c) Wholesale power suppliers and energy efficiency
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1 suppliers shall submit bids no later than 3 months after the
2 issuance of requests for proposals under subsection (a).
3 (1) The bids must identify the variable fuel cost
4 component of the per kilowatt-hour energy cost. The
5 Commission may implement a mechanism to provide an
6 incentive for suppliers to minimize these fuel costs.
7 (2) Affiliates of the utility shall bid no more
8 than the market prices for capacity and energy, which
9 shall be calculated by the Commission according to this
10 subsection. The market price for capacity shall be equal
11 to the price per kilowatt necessary to recover the costs
12 of installed capacity for the least-cost generation
13 technology that is selling power at the time of the
14 issuance of the requests for proposals under this
15 Section. The market price for energy shall be equal to
16 the price per kilowatt-hour necessary to recover the
17 annual costs of generating electricity from the
18 least-cost generation technology that is selling power at
19 the time of the issuance of the requests for proposals
20 under this Section.
21 (d) Selection of accepted bids shall be made no later
22 than 2 months after the receipt of bids.
23 (1) If any of the bids submitted under subsection
24 (c) are from affiliates of the electric utility, the
25 Commission shall select a portfolio of bids to meet the
26 energy and capacity requirements of the service
27 territory.
28 (2) If none of the bids submitted under subsection
29 (c) are from affiliates of the electric utility, the
30 utility shall select a portfolio of bids to meet the
31 energy and capacity requirements of the service
32 territory, subject to the approval of the Commission.
33 (3) The Commission's selection or approval of the
34 utility's selection of bids shall be based upon a
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1 determination that the supply of energy and capacity
2 under the selected bids will provide safe and reliable
3 power supply at least-cost.
4 (4) The independent system operator established
5 under Section 16-145 shall approve the bids selected
6 under subsection (d)(1) or (d)(2) upon a finding that
7 there is adequate transmission capacity to deliver the
8 electricity that will be purchased by the utility in
9 accordance with the selected bids.
10 (e) The utility shall enter into contracts with
11 suppliers whose bids have been selected for the provision of
12 energy and capacity at the bid prices. Supply of power under
13 the contracts shall begin one month after acceptance of the
14 bid.
15 (f) Additional requests for proposals shall be issued,
16 subject to Commission approval under subsection (a), when
17 there is an expansion of the capacity or energy requirements
18 of the service territory or an expiration of contracts.
19 Prior to the issuance of these requests, the utility shall
20 provide to the Commission revised projections of energy use,
21 peak demand by customer class, and coincident peak demand for
22 all customers, adjusted for reductions in peak demand and
23 energy use resulting from the provision of energy efficiency
24 programs under Section 16-160, for each year of a time period
25 to be determined by the Commission and shall provide any
26 other information the Commission requires to evaluate the
27 requests for proposals.
28 (220 ILCS 5/16-130 new)
29 Sec. 16-130. Universal Service Fund.
30 (a) There shall be established in the State treasury a
31 special fund to be known as the Universal Service Fund. The
32 Fund shall derive its revenue from a charge to be levied on
33 all suppliers and power marketers for each kilowatt-hour sold
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1 to the utility under Section 16-125 or to end-use customers
2 under Section 16-150. Moneys in the Fund shall be used to:
3 (1) compensate the utility for the difference
4 between the total of the rates established under Section
5 16-135 and the affordable electric rate established under
6 subsection (b) for low-income customers;
7 (2) compensate the utility or other supplier for
8 providing energy efficiency programs at low or no cost to
9 low-income consumers;
10 (3) compensate power marketers according to the
11 procedures established in subsection (i) of Section
12 16-150; and
13 (4) fund programs that may be established by the
14 Commission to provide affordable electricity, energy
15 efficiency programs, and related services to low-income
16 customers in addition to those described in this
17 subsection.
18 (b) The Commission shall:
19 (1) determine the amount of the charge to be levied
20 on power suppliers;
21 (2) establish an affordable electric rate and a
22 low-income eligibility standard that takes into account
23 income, household size, and energy expenses; and
24 (3) inform all eligible customers of the
25 availability of and application procedures for the
26 programs established in this Section.
27 (c) Eligible low-income customers shall pay no more than
28 the affordable electric rate.
29 (220 ILCS 5/16-135 new)
30 Sec. 16-135. Setting of rates.
31 (a) The Commission shall establish rates to be charged
32 for services provided by a utility based upon the cost of
33 service of the utility. Generation rates shall be determined
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1 by the price of power supplied under contracts signed in
2 accordance with Section 16-125.
3 (b) Rates for transmission, distribution, metering,
4 billing, collection, and other services provided by an
5 electric utility shall be determined by the cost of those
6 services in accordance with applicable Sections of Article IX
7 of this Act.
8 (c) A utility shall recover the annual amount, subject
9 to Commission approval, needed to be deposited in a trust
10 fund that will finance the costs of decommissioning nuclear
11 generation plants. This trust fund shall be made available
12 to companies owning the nuclear generation plants at the time
13 that the plants are decommissioned.
14 (d) The rate paid by end-use customers of a utility
15 shall equal the sum of the rates determined under subsections
16 (a), (b), and (c). The customer's bill shall separately
17 identify generation, transmission, distribution, metering,
18 billing, collection, other customer services, and
19 decommissioning rates.
20 (e) Rates shall become effective no later than 6 months
21 after the acceptance of bids under subsection (d) of Section
22 16-125. Customers of the utility shall receive a refund
23 equal to the difference between the rates established in this
24 Section and the rates that were in existence from the time
25 the utility began purchasing power on the wholesale market
26 under 16-125 and the date that the rates established in this
27 Section became effective. The total amount of the refund
28 shall be paid over a period of time of no more than 6 months.
29 (f) A utility may petition the Commission for a change
30 in the rates established under this Section. The Commission
31 may also initiate a proceeding to change the rates
32 established under this Section upon its own motion or in
33 response to a complaint.
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1 (220 ILCS 5/16-140 new)
2 Sec. 16-140. Recovery of uneconomic costs.
3 (a) A public utility that owned all or a portion of an
4 electric generating unit providing electricity to customers
5 within this State as of January 1, 1997 is eligible to
6 petition for consideration of recovery of uneconomic costs as
7 provided for in this Section.
8 (b) A public utility seeking cost recovery under this
9 Section shall file with the Commission a verified petition no
10 earlier than the time of selection of providers for wholesale
11 power and no later than one year after the initial receipt of
12 power from wholesale suppliers under Section 16-125. The
13 petition shall contain all of the following information as of
14 the date that customers become eligible to purchase from
15 energy suppliers under Section 16-150:
16 (1) A list of all generation plants owned by the
17 utility that provided energy to customers within this
18 State as of January 1, 1997. The list shall state the
19 installed capacity of the generation and the book value,
20 adjusted for depreciation, of each generation plant as it
21 appears on the financial accounting records of the
22 utility.
23 (2) A list of all special contracts, contracts to
24 provide capacity and energy at other than tariffed rates,
25 wholesale contracts, off-system sales contracts or
26 arrangements, and the annual peak capacity and demand
27 provided for under each contract.
28 (3) The total peak demand for the preceding 12
29 months for sales by the public utility's affiliates to
30 customers in this State.
31 (4) The balances as shown on the utility's
32 financial records for investment tax credits, deferred
33 tax assets and excess deferred federal income taxes, and
34 any other federal or State tax credit for each generating
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1 unit listed under item (1) of this subsection.
2 (5) The balance sheets, cash flow statements, and
3 financial operating statements for the electric utility,
4 its affiliates, and holding company and all other
5 financial documents necessary to support the holding
6 company's request for a finding of financial viability
7 under subsection (d).
8 (6) All supporting workpapers for the calculations
9 provided under items (1) through (5) of this subsection.
10 (c) Upon receipt of the petition, the Commission shall
11 require the public utility to provide notice of the filing as
12 provided for under Section 9-201 of this Act. The Commission
13 shall establish a schedule for discovery, intervention, and
14 evidentiary hearings. Based upon the evidence taken at
15 hearing, the Commission shall calculate the total amount of
16 the costs that the utility may seek to recover subject to
17 subsection (d) based on the formula:
18 (BVG minus VSW minus AS) minus (MVG plus TC)
19 Where each variable in the formula shall be defined as
20 follows as of the date that customers become eligible to
21 purchase from energy suppliers under Section 16-150:
22 "BVG" (book value of generation) is the value adjusted
23 for depreciation as recorded on the utility's financial
24 records of the total generation determined by the Commission
25 to be used and useful to serve customers in this State and
26 included in rate base. If any generation unit was in rate
27 base as of January 1, 1997 and has been sold since that date,
28 the Commission shall determine the market value of the unit,
29 and if the sale price was below market value, then the
30 difference between the sale price and the market value shall
31 be a credit to decrease the net book value of the remaining
32 generation for purposes of this calculation.
33 "VSW" (value of special and wholesale contracts) is the
34 value of the special contracts, contracts to provide capacity
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1 and energy at other than tariffed rates, wholesale contracts,
2 and off-system sales. The value is determined by dividing
3 the BVG by total installed generation used and useful to
4 serve customers in this State, and multiplying the resulting
5 BVG per megawatt by the annual peak demand in megawatts
6 provided for under each special contract, contract to provide
7 capacity and energy at other than tariffed rates, wholesale
8 contract, and off-system sales contract.
9 "AS" (affiliate sales)is the value of all of the public
10 utility's affiliate's electricity sales. The value is
11 determined by dividing the BVG by total installed generation
12 capacity used and useful to serve customers in this State
13 times the total peak demand for the preceding 12 months for
14 sales by the public utility's affiliates.
15 "MVG" (market value of generation) is determined by
16 multiplying the market price of capacity as determined under
17 Section 16-125(c)(2) by the public utility's total installed
18 generation used and useful to serve customers in this State
19 in megawatts minus the total peak demand for the preceding 12
20 months for special contracts, contracts for power and energy
21 provided at other than approved tariffed rates, wholesale
22 sales, off-system sales, and affiliate sales.
23 "TC" (tax credits) is the total amount in dollars of the
24 balance of the public utility's or holding company's
25 investment tax credits, deferred tax assets, excess deferred
26 federal income taxes, and any other federal or state tax
27 credit for the generating units as stated in the petition
28 filed under subsection (b).
29 (d) The Commission shall determine in the evidentiary
30 hearing the amount, if any, of the costs contained in the
31 petition that are eligible for recovery. The maximum
32 allowable cost recovery shall be the amount necessary to
33 maintain the minimal financial viability of the holding
34 company of the public utility as long as that amount is no
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1 more than the formula in subsection (c). Financial viability
2 shall be determined at the holding company level and shall
3 include all earnings from all holding company subsidiaries,
4 excluding losses by subsidiaries engaged in businesses
5 unrelated to the furnishing, transmission, distribution, or
6 sale of power or related customer services.
7 (e) The amount of cost recovery determined under
8 subsection (d) shall be collected by the public utility for a
9 period of 5 years. The recovery shall be made by applying a
10 charge per kilowatt-hour to all end-use customers of the
11 transmission and distribution system of the utility during
12 the 5 year recovery period and customers described in
13 subsection (f). The Commission shall determine the per
14 kilowatt-hour charge by dividing the allowed recovery amount
15 by the projected sales in the utility's service territory for
16 the 5 year period in which the recovery will be allowed, plus
17 the total number of kilowatt-hours determined under
18 subsection (f).
19 (f) Any customer who obtains capacity and energy from
20 cogeneration or self-generation facilities and was a customer
21 of the utility as of January 1, 1997, shall be assessed the
22 cost recovery charge determined under subsection (e) based
23 upon the number of kilowatt-hours delivered to that customer
24 by the transmission and distribution system of the utility
25 during calendar year 1996.
26 (220 ILCS 5/16-141 new)
27 Sec. 16-141. Ratepayer Equity Plans. A utility that is
28 allowed to recover uneconomic costs pursuant to Section
29 16-140 shall establish a Ratepayer Equity Plan before
30 implementing any charge under subsection (e) or (f) of
31 Section 16-140. The purpose of the plan shall be to
32 compensate ratepayers with shares of common stock equal in
33 value to the amount of cost recovery charges collected under
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1 Section 16-140. The Plan shall be filed with the Commission,
2 which shall approve or modify the Plan so that the Plan shall
3 require the utility to do all the following:
4 (1) Calculate the total amount of costs recovered by the
5 utility under subsections (e) and (f) of Section 16-140 for
6 each fiscal quarter of the 5 year recovery period.
7 (2) Determine the market value of the stock of the
8 utility as indicated by the last trading price on a public
9 exchange market as of the last date of each fiscal quarter.
10 If the stock is held by a holding company, the holding
11 company's stock shall be used to determine market value.
12 (3) Deposit with the State Treasurer stock certificates
13 for the utility or holding company's stock for which the
14 total market value determined under item (2) is equal to the
15 cost recovery calculated under item (1) within 15 days of the
16 end of the fiscal quarter.
17 (4) Distribute all proceeds from the sale of the stock
18 by the State Treasurer to all customers who have paid the
19 cost recovery charge through a reduction in or elimination of
20 the monthly customer charge. Customers who have not paid
21 the cost recovery charge shall not receive any of the
22 proceeds.
23 (220 ILCS 5/16-145 new)
24 Sec. 16-145. Independent system operator.
25 (a) If an independent system operator has not been
26 approved by the Federal Energy Regulatory Commission for an
27 area that includes Illinois, no later than one year after the
28 effective date of this amendatory Act of 1997 the Commission
29 shall select an independent system operator for Illinois.
30 (b) The independent system operator shall be responsible
31 for providing nondiscriminatory access to the transmission
32 system, ensuring transmission system reliability, providing
33 ancillary and other services as are required for the safe and
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1 efficient operation of the transmission system, and
2 recommending to the Commission the least-cost means of
3 alleviating transmission system congestion where it occurs.
4 (c) The independent system operator shall be established
5 and shall operate in accordance with independent system
6 operator principles stated by the Federal Energy Regulatory
7 Commission.
8 (d) The selection, financing, and activities of the
9 independent system operator shall be subject to the approval
10 of a governing board representative of wholesale market
11 participants, all customer classes, and environmental
12 interests. More than 50% of the voting members shall
13 represent entities that do not own transmission or generation
14 facilities.
15 (e) The Commission shall only approve the construction
16 of new transmission capacity if that new capacity is the
17 least-cost means to alleviating transmission system
18 congestion. The Commission shall conduct a proceeding to
19 determine how the costs for such construction are to be
20 recovered.
21 (f) Intermittent and distributed generation resources
22 shall not be unduly discriminated against in requirements for
23 ancillary services and charges for the use of the
24 transmission system.
25 (220 ILCS 5/16-150 new)
26 Sec. 16-150. Retail wheeling. No later than 15 months
27 after the initial supply of power under Section 16-125,
28 customers of public utilities shall be allowed to purchase
29 electricity and other services from energy suppliers or power
30 marketers, provided that:
31 (a) All customer classes have an equal opportunity to
32 purchase from energy suppliers or power marketers.
33 (b) The Commission may choose to phase-in the
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1 eligibility for purchasing from energy suppliers or power
2 marketers provided that all customers become eligible within
3 a 3 year period beginning 15 months after the initial supply
4 of power under Section 16-125 and that an equal percentage of
5 each class of customers shall become eligible at the same
6 time.
7 (c) A customer purchasing from energy suppliers shall
8 continue to pay the electric utility's rates as determined in
9 Section 16-135 for transmission, distribution, other services
10 used by the customer, and decommissioning.
11 (d) Residential and small commercial customers shall not
12 be required to purchase new meters.
13 (220 ILCS 5/16-151)
14 Sec. 16-151. Commission regulation of power marketers,
15 energy suppliers, and electric utilities; consumer protection
16 requirements for retail electric competition.
17 (a) The legislature declares that the goal of increasing
18 retail competition in the sale of electricity must be
19 accomplished with consumer protections to enhance customer
20 understanding, prevent unfair trade practices, and establish
21 minimum criteria to govern the sale of electricity and
22 related services to consumers from retail energy suppliers
23 and electric utilities.
24 (b) Prior to the date that customers become eligible to
25 purchase from energy suppliers, the Commission shall do all
26 of the following:
27 (1) Disseminate to all customers information
28 containing a clear explanation of the basic concepts of
29 competition in the electric industry, customer risks and
30 responsibilities, current consumer protections, how to
31 use the household's energy use patterns to make decisions
32 about purchases of electricity and other related
33 services, and available dispute resolution mechanisms.
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1 Such dissemination shall be designed to reach to broadest
2 spectrum of customers through such means as brochures and
3 other written materials, a variety of mass media, and
4 interactive approaches, including targeted efforts to
5 reach rural, low-income, elderly, non-english speaking,
6 disabled, minorities, and other traditionally
7 under-served populations.
8 (2) Pre-establish outcome measures of customer
9 awareness, understanding, and ability to act, in order to
10 periodically evaluate the success of the Commission's
11 education and outreach efforts.
12 (3) Make available by request, at no cost to the
13 customer, a listing of certified power marketers and
14 price comparisons for the various products and services
15 offered by power marketers. This list will be revised
16 every 3 months.
17 (4) Identify barriers to participation in the
18 competitive retail market for electricity and related
19 services by residential and small commercial customers
20 and implement mechanisms to eliminate those barriers. The
21 Commission shall conduct a proceeding every 2 years to
22 review and revise these mechanisms as necessary to
23 facilitate participation by residential and small
24 commercial customers.
25 (5) Determine a per kilowatt-hour charge to be
26 assessed upon all customers purchasing energy from energy
27 suppliers that will be used to fund the education
28 programs and mechanisms implemented under this
29 subsection.
30 (c) All power marketers must be certified by the
31 Commission prior to serving customers in Illinois. The
32 Commission shall approve certification upon a finding that
33 the power marketer possesses sufficient technical, financial,
34 and managerial resources and abilities to provide reliable
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1 service to customers.
2 (d) The Commission shall adopt a code of conduct,
3 effective as of the date that customers become eligible to
4 purchase power on the retail market, that will be applicable
5 to all power marketers certified under subsection (c) to
6 serve customers in Illinois. The Commission shall assess a
7 penalty against any power marketer that fails to comply with
8 the code of conduct and may remove a power marketer's
9 certification to provide service to customers in Illinois if
10 upon its own motion or in response to a complaint or
11 complaints the Commission finds that the power marketer no
12 longer meets the standards for certification or has been in
13 significant and continued violation of the code of conduct.
14 The Commission shall conduct a proceeding every 2 years to
15 review and revise the code of conduct when necessary. At a
16 minimum, the code shall require power marketers to do all of
17 the following:
18 (1) Offer a standard package of basic services at a
19 nondiscriminatory price to all residential customers
20 residing in a service territory.
21 (2) Include information with billing statements and
22 marketing materials that fully disclose the prices,
23 terms, and conditions of services and products sold to
24 and available to customers and the technologies and fuel
25 types used to generate the electricity sold to the
26 customer.
27 (3) Provide documentation to the Commission and to
28 the customer that verifies claims regarding the sale of
29 power generated by renewable resources.
30 (4) Obtain written authorization from a customer
31 prior to switching the power marketer who serves that
32 customer.
33 (e) The electric utility shall provide billing and
34 collection services when requested by power marketers in
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1 exchange for the payment of a cost-based fee established by
2 tariff.
3 (f) Power marketers and electric utilities shall be
4 subject to Part 280 of the current Illinois Administrative
5 Code, which the Commission shall revise in order to meet the
6 consumer protection needs in a restructured market. The
7 revised rules shall contain minimum credit and collection
8 procedures and practices applicable to retail electric
9 competition including, but not limited to, all of the
10 following:
11 (1) Application for service.
12 (2) Credit evaluation and deposits.
13 (3) When disconnection of service can be used as a
14 method of collection, the timing and notices of
15 disconnection and required disclosures, disconnection
16 procedures, and a customer's right to a payment
17 arrangement to prevent disconnection.
18 (4) A customer's right to retain service during a
19 temporary medical emergency.
20 (5) A tenant's right to avoid disconnection of
21 service when a landlord fails to pay an overdue bill and
22 the tenant's right to obtain service in his or her own
23 name.
24 (6) Limitations on the transfer of previously
25 unpaid debt from one customer's account to that of
26 another and from a customer's account at one location to
27 an account at another location.
28 (7) Limitations on the billing of previously
29 unbilled amounts.
30 (8) When late fees may be assessed and limitations
31 on their amount and method of application to an overdue
32 amount.
33 (9) Reconnection rights and limits on reconnection
34 fees.
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1 (10) Rules concerning partial payment and the
2 allocation of payments and credits to regulated and
3 unregulated portions of the total electric bill.
4 (g) An affiliate or subsidiary company of a utility may
5 not compete for retail sales to customers within the service
6 territory of the utility unless the Commission finds that all
7 of the following conditions are met:
8 (1) Effective competition would not exist in the
9 service territory without the participation of the
10 affiliate.
11 (2) Adequate protections are in place to prevent
12 cross-subsidy of the affiliate by customers of the
13 utility.
14 (3) The operation of the affiliate in the service
15 territory is necessary for the preservation of the
16 financial viability of the holding company.
17 (h) All power marketers, utilities, and other entities
18 selling power directly to end-use customers in Illinois shall
19 provide a percentage of the energy sold to end-use consumers
20 from renewable resources in accordance with the standards
21 determined in Section 16-155.
22 (i) The electric utility shall issue a request for
23 proposals to serve customers meeting the low-income
24 eligibility standard determined under Section 16-130. Power
25 marketers that have been certified to serve customers in
26 Illinois may bid for an amount that they require per customer
27 in order to provide electricity at the affordable rate to
28 low-income customers, as determined under Section 16-130. The
29 electric utility shall select the power marketer bidding the
30 lowest amount to provide electricity to eligible customers at
31 the affordable rate. The selected power marketer shall
32 receive the amount bid from the Universal Service Fund for
33 each low-income customer served.
34 (j) Power marketers and utilities shall protect a
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1 customer's usage, billing and payment history from disclosure
2 unless the disclosure has been authorized by law, or has been
3 approved by the customer in writing. This provision shall
4 not prohibit the Commission from ordering an electric utility
5 or power marketer to release generic information concerning
6 the usage, load shape curve, or other general characteristics
7 of customers as a group or rate classification. An electric
8 utility is authorized to release a list of its customers and
9 their addresses to retail electric suppliers under such
10 conditions as specified by the Commission by rule. The
11 Commission may authorize the release of customer-specific
12 information by an electric utility, energy supplier, or power
13 marketer if it determines that the access to the identified
14 information would not be harmful to individual customers and
15 the benefits to the customers whose information would be
16 released will outweigh any detriments.
17 (k) Customers may change their energy supplier or power
18 marketer at any time, but may remain responsible for any
19 unpaid charges owed to a supplier or marketer if the customer
20 fails to give proper notice of change. An energy supplier or
21 power marketer shall not require any notice that exceeds 5
22 business days. Any fee or penalty charged by the supplier or
23 marketer associated with early termination of a contract
24 shall be conspicuously disclosed in the contract between the
25 supplier or marketer and the customer. The Commission shall
26 adopt rules that specify the type and manner of
27 communications between the customer and the supplier or
28 marketer and between the supplier or marketer and the
29 electric utility to effectuate a customer's change in
30 supplier.
31 (220 ILCS 5/16-155 new)
32 Sec. 16-155. Renewable resource standards.
33 (a) No later than 6 months after the effective date of
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1 this amendatory Act of 1997, the Department of Natural
2 Resources shall mandate renewable resource standards that
3 specify:
4 (1) the minimum percentage of the energy
5 requirements of the service territory to be met by power
6 generated by renewable resources; and
7 (2) a subset of the percentage in item (1) that
8 must be met by renewable resources located within the
9 State of Illinois.
10 (b) The renewable resource standards shall meet the
11 goals of providing environmental benefits and promoting the
12 development of the renewable resource industry in Illinois,
13 taking into account the projected costs and availability of
14 fossil fuels used to generate electricity and the projected
15 costs and availability of renewable sources of power. The
16 Department of Natural Resources shall issue a report
17 demonstrating how the renewable resource standards were
18 determined in accordance with this subsection.
19 (1) At the end of the calendar year the Department
20 of Natural Resources shall issue to each seller of energy
21 to end-use customers an Illinois Renewable Energy Credit
22 for each kilowatt-hour of energy provided from a
23 renewable resource located in Illinois and a Renewable
24 Energy Credit for each kilowatt-hour of energy provided
25 from a renewable resource without regard to location. In
26 order to receive the credits, sellers of energy must
27 provide documentation verifying the sale of electricity
28 generated by renewable resources. Credits shall be
29 tradable and transferable.
30 (2) Three months after the beginning of each calendar
31 year, the Department of Natural Resources shall collect the
32 credits from each seller of power. Sellers of power will be
33 assessed a penalty, to be determined by the Department of
34 Natural Resources, for each kilowatt-hour required from
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1 renewable resources in Illinois that is above the number of
2 Illinois Renewable Energy Credits and for each of the total
3 number of kilowatt-hours required from renewable resources
4 that is above the total of the Renewable Energy Credits plus
5 Illinois Renewable Energy Credits.
6 (d) The Department of Natural Resources shall conduct a
7 proceeding every 3 years to review, and if necessary, revise
8 the renewable resource standards.
9 (220 ILCS 5/16-160 new)
10 Sec. 16-160. Energy efficiency programs.
11 (a) No later than 6 months after the effective date of
12 this amendatory Act of 1997, the Department of Natural
13 Resources shall mandate an energy efficiency standard for
14 each utility's service territory. This energy efficiency
15 standard shall specify an annual expenditure equal to or
16 greater than 3% of the utility's operating revenues for the
17 provision of cost-effective energy efficiency programs for
18 each class of customers. "Cost-effective" means that the
19 present value of the costs of the program over its lifetime
20 is less than the present value of the costs of generating and
21 delivering the energy and providing the generation capacity
22 that is no longer required as the result of the program. The
23 costs of the energy and capacity shall account for
24 environmental externalities.
25 (b) The energy efficiency standard shall meet the goals
26 of maintaining current reliability of service, reducing
27 environmental pollution, and avoiding the construction of
28 generation, transmission, and distribution facilities, while
29 taking into account the projected costs and availability of
30 fossil fuels used to generate electricity and the projected
31 costs and effectiveness of energy efficiency programs.
32 (c) The Department of Natural Resources shall issue a
33 report demonstrating how the energy efficiency standard was
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1 determined in accordance with this subsection.
2 (d) An electric utility shall issue requests for
3 proposals to provide energy efficiency programs. Bids
4 submitted by suppliers of energy efficiency programs must
5 provide an estimate of annual reductions in kilowatt-hours
6 and kilowatts that will result over the life of the program.
7 The Department of Natural Resources shall select suppliers of
8 energy efficiency programs upon a determination that the
9 programs will provide the greatest reduction in energy and
10 capacity given the annual expenditure level or will be a
11 cost-effective means of alleviating transmission and
12 distribution system congestion. The utility shall sign
13 contracts with energy efficiency suppliers under Section
14 16-125.
15 (e) The annual expenditure by the utility determined
16 under subsection (a) shall be allocated to the provision of
17 low-cost financing, subsidies, education, and technical
18 assistance to customers receiving the energy-efficiency
19 programs, as determined by the Department of Natural
20 Resources.
21 (f) Except where funded by the Universal Service Fund
22 under Section 16-130, the utility shall recover the annual
23 expenditure from a per kilowatt-hour charge assessed on all
24 end-users of the transmission and distribution system of the
25 electric utility.
26 (g) The Department of Natural Resources shall conduct
27 audits of each energy efficiency program to determine if the
28 programs are resulting in the reduction in kilowatt-hour
29 consumption and peak demand projected by the supplier under
30 subsection (d). If the Department of Natural Resources
31 finds that the programs are not reducing energy use and peak
32 demand or are producing reductions significantly below those
33 projected by suppliers, the utility shall provide a refund to
34 all customers equal to the annual expenditure for that
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1 program that has been recovered in rates and shall no longer
2 be allowed to recover future expenditures for that program.
3 (h) The Department of Natural Resources shall conduct a
4 proceeding every 3 years to review, and if necessary, revise
5 the energy efficiency standards.
6 (220 ILCS 5/16-165 new)
7 Sec. 16-165. Market power study. No later than 12
8 months after the effective date of this amendatory Act of
9 1997, the Commission shall conduct a study and issue a report
10 to the legislature on:
11 (1) The potential for any of the wholesale and
12 energy suppliers that will be selling power to electric
13 utilities or final customers in Illinois to exercise
14 undue market power over prices.
15 (2) Barriers to entry that may exist for the
16 wholesale and retail power markets in Illinois.
17 (3) Impediments to the establishment of a fully
18 competitive power market in Illinois other than those
19 identified under (1) and (2).
20 (4) Recommendations to mitigate the undue exercise
21 of market power, barriers to entry and any other
22 impediments to a competitive power market that were
23 identified in item (3).
24 (220 ILCS 5/16-170 new)
25 Sec. 16-170. Reporting requirements. Beginning one year
26 from the initial supply of power under Section 16-125, the
27 Commission shall issue an annual report to the legislature on
28 the extent of competition within the State, the effect of
29 competition on rates, the level of participation of
30 residential and small commercial customers, the effect of
31 competition on service quality, the extent of predatory
32 practices by competitors, and any other matter the Commission
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1 deems appropriate.
2 (220 ILCS 5/16-175 new)
3 Sec. 16-175. State revenue task force. The legislature
4 shall appoint a task force that will make recommendations for
5 competitively neutral mechanisms to maintain State and local
6 tax revenues in a competitive electricity market provided for
7 in this Act. The task force shall issue a report containing
8 such recommendations no later than 6 months after the
9 effective date of this amendatory Act of 1997.
10 Section 10. The State Finance Act is amended by adding
11 Section 6z-42 as follows:
12 (30 ILCS 105/6z-42 new)
13 Sec. 6z-42. Ratepayer Equity Funds.
14 (a) The State Treasurer shall create tax-exempt,
15 non-profit trust funds for the customers of each utility that
16 has filed a Ratepayer Equity Plan under Section 16-141 of the
17 Public Utilities Act. These Funds shall be known as
18 Ratepayer Equity Funds.
19 (b) All stocks, dividends, and cash received by the
20 State Treasury under Section 16-141 shall be deposited in the
21 Ratepayer Equity Fund.
22 (c) The State Treasurer shall:
23 (1) Manage the Ratepayer Equity Fund in a manner
24 that maximizes returns to the fund and benefits to
25 ratepayers.
26 (2) Hold the certificates in the Ratepayer Equity
27 Fund and receive all dividends from the stocks until such
28 time that the State Treasurer determines that it will
29 maximize benefits for ratepayers to sell all or a
30 portion of the stocks so held.
31 (3) Promulgate rules necessary for the efficient
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1 administration of the Ratepayer Equity Funds.
2 Section 99. Effective date. This Act takes effect June
3 1, 1997.
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1 INDEX
2 Statutes amended in order of appearance
3 220 ILCS 5/3-105 from Ch. 111 2/3, par. 3-105
4 220 ILCS 5/5-105 from Ch. 111 2/3, par. 5-105
5 220 ILCS 5/Art. XVI heading new
6 220 ILCS 5/16-100 new
7 220 ILCS 5/16-101 new
8 220 ILCS 5/16-102 new
9 220 ILCS 5/16-105 new
10 220 ILCS 5/16-107 new
11 220 ILCS 5/16-110 new
12 220 ILCS 5/16-115 new
13 220 ILCS 5/16-120 new
14 220 ILCS 5/16-125 new
15 220 ILCS 5/16-130 new
16 220 ILCS 5/16-135 new
17 220 ILCS 5/16-140 new
18 220 ILCS 5/16-141 new
19 220 ILCS 5/16-145 new
20 220 ILCS 5/16-150 new
21 220 ILCS 5/16-151
22 220 ILCS 5/16-155 new
23 220 ILCS 5/16-160 new
24 220 ILCS 5/16-165 new
25 220 ILCS 5/16-170 new
26 220 ILCS 5/16-175 new
27 30 ILCS 105/6z-42 new