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90_SB1083
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.
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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. 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 (a-5) the transmission, delivery, or furnishing of
25 electricity;
26 b. the disposal of sewerage; or
27 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
19 "public utility" the electric operations of any public
20 utility, as otherwise defined in this Act, which serves less
21 than 20,000 electric customers within the State of Illinois,
22 or the gas operations of any public utility, as otherwise
23 defined in this Act, which serves less than 20,000 gas
24 customers within the State 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 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 regulatory activity and changes in
21 the electric industry necessitate a revision of the State's
22 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 market must
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1 benefit all Illinois citizens. Consumer protections must be
2 in place to ensure that all customers continue to receive
3 safe, reliable, and affordable electric service.
4 (2) The Illinois Commerce Commission should continue its
5 oversight and regulation of electric utilities to promote the
6 development of an effectively competitive electricity market
7 that operates efficiently and is equitable to all consumers.
8 (3) The interests of all consumers must be fully
9 considered and taken into account in any Commission decision
10 regarding the restructuring of the electricity market.
11 (4) All consumers must benefit in an equitable and
12 timely fashion from the lower costs for electricity that
13 result from retail and wholesale competition.
14 (5) Conservation of finite resources and environmental
15 protection must be pursued in a competitive market through
16 the increased use of renewable resources and energy
17 efficiency programs.
18 (220 ILCS 5/16-105 new)
19 Sec. 16-105. Construction; procedure.
20 (a) If there is a conflict between the provisions of
21 this Article and any other provisions of this Act, the
22 provisions of this Article shall control.
23 (b) All Commission decisions made under this Article
24 must be made in compliance with Article X of this Act.
25 (220 ILCS 5/16-107 new)
26 Sec. 16-107. Definitions. For the purposes of this
27 Article the following terms shall be defined as set forth in
28 this Section.
29 "Commission" means the Illinois Commerce Commission.
30 "Department of Natural Resources" means the Illinois
31 Department of Natural Resources.
32 "Electric utility" or "utility" means a public utility as
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1 defined in Section 3-105 of this Act that does not own
2 generation plant and furnishes electricity to customers
3 within its service territory.
4 "Energy efficiency program" means the replacement or
5 modification of energy-using machinery, equipment, and
6 appliances that results in lower kilowatt-hour consumption
7 for the same level of use or the installation of a device or
8 modification of physical property at a residential,
9 commercial, or industrial site that results in lower
10 kilowatt-hour use by the customer.
11 "End-use customer" means a customer who purchases
12 electricity, energy efficiency, and other services for its
13 own use and not for resale.
14 "Holding company" means the company that owns the
15 electric utility and its affiliates.
16 "Power marketer" means a for-profit, not-for-profit,
17 governmental, or other entity that is not an electric utility
18 and that purchases and resells to end-use customers or
19 arranges for the sale to end-use customers of energy,
20 capacity, energy efficiency programs, and other customer
21 services. Power marketers may purchase and resell or arrange
22 for the sale of power and other customer services on behalf
23 of the aggregated load of a group of end-use customers.
24 "Energy supplier" means an entity other than the electric
25 utility that sells energy, capacity, energy efficiency
26 programs and other related services to a power marketer or to
27 end-use customers located in the service territory of the
28 electric utility, and that is not a wholesale power supplier.
29 "Renewable resource" means solar, wind, geothermal,
30 organic waste biomass, dedicated energy crops, landfill gas,
31 or fuel cells.
32 "Small commercial customer" means a customer that
33 receives service under the electric utility's tariff for
34 commercial customers and that is not being billed for demand
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1 charges as of the effective date of this amendatory Act of
2 1997.
3 "Structural separation" means the transfer of a utility's
4 generation capacity into a company or companies that are
5 separate from its transmission, distribution, and other
6 operations. The separate companies may be affiliates.
7 "Wholesale power supplier" means an entity that sells
8 energy and capacity directly to an electric utility for
9 resale to the customers of that utility.
10 (220 ILCS 5/16-110 new)
11 Sec. 16-110. Separation of generating capacity.
12 (a) No later than 60 days after the effective date of
13 this amendatory Act of 1997 a utility shall submit to the
14 Commission a plan for the structural separation of its
15 generation operations. The plan shall, at a minimum, provide
16 for:
17 (1) the identification and allocation of common
18 costs among all subsidiaries of the holding company;
19 (2) the identification and offering of each
20 noncompetitive service on a cost-based, comparable, and
21 nondiscriminatory basis; and
22 (3) the prevention of the use of staff,
23 information, and other resources by affiliates in a
24 manner that will provide competitive advantages for the
25 affiliates in the market for electricity, energy
26 efficiency programs, and related customer services.
27 (b) No later than 6 months after submission of the
28 restructuring plan the Commission shall review and modify the
29 plan where necessary to comply with the requirements of
30 subsection (a).
31 (c) The restructuring described in the plan approved by
32 the Commission shall be completed no later than 60 days after
33 Commission approval.
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1 (d) No later than 6 months after the effective date of
2 this amendatory Act of 1997, the Commission shall modify
3 existing rules governing affiliate transactions as necessary
4 to prevent the use of affiliate relationships to impede
5 competition in the wholesale and retail power markets.
6 (220 ILCS 5/16-115 new)
7 Sec. 16-115. Responsibilities of electric utilities.
8 All applicable portions of the Public Utilities Act
9 notwithstanding, an electric utility shall:
10 (1) Purchase energy, capacity, energy efficiency
11 programs, and ancillary services on the competitive wholesale
12 market as provided for in this amendatory Act of 1997.
13 (2) Provide electricity to all customers within its
14 service territory at the rates approved by the Commission
15 under Section 16-135, except for electricity purchased by
16 final consumers pursuant to Section 16-150.
17 (3) Maintain transmission and distribution facilities in
18 order to provide reliable and safe service.
19 (4) Meter and bill customers for electricity,
20 transmission, distribution, and all other services provided
21 by the utility, except where a power marketer is providing
22 any of those services.
23 (5) Comply with Part 280 of the Illinois Administrative
24 Code.
25 (6) Administer universal service programs established by
26 the Commission under Section 16-130. An electric utility
27 shall report annually to the Commission on the effectiveness
28 of these programs in making energy and related services more
29 affordable to low-income customers.
30 (220 ILCS 5/16-120 new)
31 Sec. 16-120. Commission guidelines for mergers and
32 acquisitions.
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1 (a) No later than 6 months after the effective date of
2 this amendatory Act of 1997, the Commission shall issue rules
3 governing mergers between companies owning electric
4 generation, transmission, or distribution facilities and any
5 other company under the Commission's jurisdiction. The rules
6 shall at a minimum stipulate that mergers shall only be
7 approved if the companies can demonstrate that:
8 (1) the merger will not reduce the level of
9 existing competition and will not deter or delay the
10 development of greater or more effective competition in
11 the Illinois electricity market; and
12 (2) the merger will provide immediate, sustainable,
13 and substantial rate reductions which could not be
14 achieved by other means.
15 (b) The Commission shall not approve a merger without
16 ruling on:
17 (1) the allocation of the savings resulting from
18 the merger; and
19 (2) whether the companies should be allowed to
20 recover any of the costs involved in accomplishing the
21 merger and, if so, the amount of costs eligible for
22 recovery and how the costs will be allocated.
23 (220 ILCS 5/16-125 new)
24 Sec. 16-125. Provision of wholesale energy resources.
25 (a) A utility shall begin providing electricity and
26 energy efficiency programs purchased from wholesale power
27 suppliers to end-use customers no later than 18 months after
28 the effective date of this amendatory Act of 1997, according
29 to the schedule and procedures established in this Section
30 and in Section 16-160.
31 One month after a utility has completed the restructuring
32 required under Section 16-110, the utility shall submit for
33 Commission approval a request for proposals from wholesale
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1 power suppliers to provide energy, capacity, and energy
2 efficiency programs to its service territory beginning 6
3 months after the issuance of the requests.
4 (1) The requests for proposals for energy and
5 capacity must be approved by the Commission and issued
6 within 30 days upon a determination that the requests are
7 designed to result in the provision of safe, reliable,
8 and least-cost power under a portfolio of contracts that
9 minimizes the risk of price volatility.
10 (2) Prior to the issuance of the requests for
11 proposals, a utility shall provide to the Commission
12 projections of energy use, peak demand by customer class,
13 and coincident peak demand for all customers for each
14 year of a time period to be determined by the Commission,
15 adjusted for reductions in peak demand and energy use
16 resulting from the provision of energy efficiency
17 programs under Section 16-160 and shall provide any other
18 information the Commission requires to evaluate the
19 requests for proposals.
20 (b) The request for proposals issued under subsection
21 (a) shall be for no more than one-third of the load of the
22 service territory. Requests for proposals to supply the final
23 two-thirds of a utility's load shall be issued 6 months and 9
24 months after the initial request for proposals. The second
25 request for proposals may include any portion of the first
26 one-third of the load for which contracts have not been
27 signed, and the final request may include any portion of the
28 load for which contracts have not been signed.
29 (c) Wholesale power suppliers and energy efficiency
30 suppliers shall submit bids no later than 3 months after the
31 issuance of requests for proposals under subsection (a).
32 (1) The bids must identify the variable fuel cost
33 component of the per kilowatt-hour energy cost. The
34 Commission may implement a mechanism to provide an
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1 incentive for suppliers to minimize these fuel costs.
2 (2) Affiliates shall bid no more than the market
3 prices for capacity and energy, which shall be calculated
4 by the Commission according to this subsection. The
5 market price for capacity shall be equal to the price per
6 kilowatt necessary to recover the costs of installed
7 capacity for the least-cost generation technology that is
8 selling power at the time of the issuance of the requests
9 for proposals under this Section. The market price for
10 energy shall be equal to the price per kilowatt-hour
11 necessary to recover the annual costs of generating
12 electricity from the least-cost generation technology
13 that is selling power at the time of the issuance of the
14 requests for proposals under this Section.
15 (d) Selection of accepted bids shall be made no later
16 than 2 months after the receipt of bids.
17 (1) If any of the bids submitted under subsection
18 (c) are from affiliates of the electric utility, the
19 Commission shall select a portfolio of bids to meet the
20 energy and capacity requirements of the service
21 territory.
22 (2) If none of the bids submitted under subsection
23 (c) are from affiliates of the electric utility, the
24 utility shall select a portfolio of bids to meet the
25 energy and capacity requirements of the service
26 territory, subject to the approval of the Commission.
27 (3) The Commission's selection or approval of the
28 utility's selection of bids shall be based upon a
29 determination that the supply of energy and capacity
30 under the selected bids will provide safe and reliable
31 power supply at least-cost.
32 (4) The independent system operator established
33 under Section 16-145 shall approve the bids selected
34 under subsection (d)(1) or (d)(2) upon a finding that
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1 there is adequate transmission capacity to deliver the
2 electricity that will be purchased by the utility in
3 accordance with the selected bids.
4 (e) The utility shall enter into contracts with
5 suppliers whose bids have been selected for the provision of
6 energy and capacity at the bid prices. Supply of power under
7 the contracts shall begin one month after acceptance of the
8 bid.
9 (f) Additional requests for proposals shall be issued
10 when there is an expansion of the capacity or energy
11 requirements of the service territory or an expiration of
12 contracts. Prior to the issuance of these requests, the
13 utility shall provide to the Commission revised projections
14 of energy use, peak demand by customer class, and coincident
15 peak demand for all customers, adjusted for reductions in
16 peak demand and energy use resulting from the provision of
17 energy efficiency programs under Section 16-160, for each
18 year of a time period to be determined by the Commission and
19 shall provide any other information the Commission requires
20 to evaluate the requests for proposals.
21 (220 ILCS 5/16-130 new)
22 Sec. 16-130. Universal Service Fund.
23 (a) There shall be established in the State treasury a
24 special fund to be known as the Universal Service Fund. The
25 Fund shall derive its revenue from a charge to be levied on
26 all suppliers and power marketers for each kilowatt-hour sold
27 to the utility under Section 16-125 or to end-use customers
28 under Section 16-150. Moneys in the Fund shall be used to:
29 (1) compensate the utility for the difference
30 between the total of the rates established under Section
31 16-135 and the affordable electric rate established under
32 subsection (b) for low-income customers;
33 (2) compensate the utility or other supplier for
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1 providing energy efficiency programs at low or no cost to
2 low-income consumers;
3 (3) compensate power marketers according to the
4 procedures established in subsection (i) of Section
5 16-150; and
6 (4) fund programs that may be established by the
7 Commission to provide affordable electricity, energy
8 efficiency programs, and related services to low-income
9 customers in addition to those described in this
10 subsection.
11 (b) The Commission shall:
12 (1) determine the amount of the charge to be levied on
13 power suppliers;
14 (2) establish an affordable electric rate and a
15 low-income eligibility standard that takes into account
16 income, household size, and energy expenses; eligible
17 low-income customers shall pay no more than the affordable
18 electric rate; and
19 (3) inform all eligible customers of the availability of
20 and application procedures for the programs established in
21 this Section.
22 (220 ILCS 5/16-135 new)
23 Sec. 16-135. Setting of rates.
24 (a) The Commission shall establish rates to be charged
25 for services provided by a utility based upon the cost of
26 service of the utility. Generation rates shall be determined
27 by the price of power supplied under contracts signed in
28 accordance with Section 16-125.
29 (b) Rates for transmission, distribution, metering,
30 billing, collection, and other services provided by an
31 electric utility shall be determined by the cost of those
32 services in accordance with applicable Sections of Article IX
33 of this Act.
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1 (c) A utility shall recover the annual amount, subject
2 to Commission approval, needed to be deposited in a trust
3 fund that will finance the costs of decommissioning nuclear
4 generation plants. This trust fund shall be made available
5 to companies owning the nuclear generation plants at the time
6 that the plants are decommissioned.
7 (d) The rate paid by end-use customers of a utility
8 shall equal the sum of the rates determined under subsections
9 (a), (b), and (c). The customer's bill shall separately
10 identify generation, transmission, distribution, metering,
11 billing, collection, other customer services, and
12 decommissioning rates.
13 (e) Rates shall become effective no later than 6 months
14 after the acceptance of bids under subsection (d) of Section
15 16-125. Customers of the utility shall receive a refund
16 equal to the difference between the rates established in this
17 Section and the rates that were in existence from the time
18 the utility began purchasing power on the wholesale market
19 under 16-125 and the date that the rates established in this
20 Section became effective. The total amount of the refund
21 shall be paid over a period of time of no more than 6 months.
22 (f) A utility may petition the Commission for a change
23 in the rates established under this Section. The Commission
24 may also initiate a proceeding to change the rates
25 established under this Section upon its own motion or in
26 response to a complaint.
27 (220 ILCS 5/16-140 new)
28 Sec. 16-140. Recovery of uneconomic costs.
29 (a) A public utility that owned all or a portion of an
30 electric generating unit providing electricity to customers
31 within this State as of January 1, 1997 is eligible to
32 petition for consideration of recovery of uneconomic costs as
33 provided for in this Section.
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1 (b) A public utility seeking cost recovery under this
2 Section shall file with the Commission a verified petition no
3 earlier than the time of selection of providers for wholesale
4 power and no later than one year after the initial receipt of
5 power from wholesale suppliers under Section 16-125. The
6 petition shall contain all of the following information as of
7 the date that customers become eligible to purchase from
8 energy suppliers under Section 16-150:
9 (1) A list of all generation plants owned by the
10 utility that provided energy to customers within this
11 State as of January 1, 1997. The list shall state the
12 installed capacity of the generation and the book value,
13 adjusted for depreciation, of each generation plant as it
14 appears on the financial accounting records of the
15 utility.
16 (2) A list of all special contracts, contracts to
17 provide capacity and energy at other than tariffed rates,
18 wholesale contracts, off-system sales contracts or
19 arrangements, and the annual peak capacity and demand
20 provided for under each contract.
21 (3) The total peak demand for the preceding 12
22 months for sales by the public utility's affiliates to
23 customers in this State.
24 (4) The balances as shown on the utility's
25 financial records for investment tax credits, deferred
26 tax assets and excess deferred federal income taxes, and
27 any other federal or State tax credit for each generating
28 unit listed under item (1) of this subsection.
29 (5) The balance sheets, cash flow statements, and
30 financial operating statements for the electric utility,
31 its affiliates, and holding company and all other
32 financial documents necessary to support the holding
33 company's request for a finding of financial viability
34 under subsection (d).
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1 (6) All supporting workpapers for the calculations
2 provided under items (1) through (5) of this subsection.
3 (c) Upon receipt of the petition, the Commission shall
4 require the public utility to provide notice of the filing as
5 provided for under Section 9-201 of this Act. The Commission
6 shall establish a schedule for discovery, intervention, and
7 evidentiary hearings. Based upon the evidence taken at
8 hearing, the Commission shall calculate the total amount of
9 the costs that the utility may seek to recover subject to
10 subsection (d) based on the formula:
11 (BVG minus VSW minus AS) minus (MVG plus TC)
12 Where each variable in the formula shall be defined as
13 follows as of the date that customers become eligible to
14 purchase from energy suppliers under Section 16-150:
15 "BVG" (book value of generation) is the value adjusted
16 for depreciation as reflected on the utility's financial
17 records of the total generation determined by the Commission
18 to be used and useful to serve customers in this State and
19 included in rate base. If any generation unit was in rate
20 base as of January 1, 1997 and has been sold since that date,
21 the Commission shall determine the market value of the unit,
22 and if the sale price was below market value, then the
23 difference between the sale price and the market value shall
24 be a credit to decrease the net book value of the remaining
25 generation for purposes of this calculation.
26 "VSW" (value of special and wholesale contracts) is the
27 value of the special contracts, contracts to provide capacity
28 and energy at other than tariffed rates, wholesale contracts,
29 and off-system sales. The value is determined by dividing
30 the BVG by total installed generation used and useful to
31 serve customers in this State, and multiplying the resulting
32 BVG per megawatt by the annual peak demand in megawatts
33 provided for under each special contract, contract to provide
34 capacity and energy at other than tariffed rates, wholesale
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1 contract, and off-system sales contract.
2 "AS" (affiliate sales)is the value of all of the public
3 utility's affiliate's electricity sales. The value is
4 determined by dividing the BVG by total installed generation
5 capacity used and useful to serve customers in this State
6 times the total peak demand for the preceding 12 months for
7 sales by the public utility's affiliates.
8 "MVG" (market value of generation) is determined by
9 multiplying the market price of capacity as determined under
10 Section 16-125(c)(2) by the public utility's total installed
11 generation used and useful to serve customers in this State
12 in megawatts minus the total peak demand for the preceding 12
13 months for special contracts, contracts for power and energy
14 provided at other than approved tariffed rates, wholesale
15 sales, off-system sales, and affiliate sales.
16 "TC" (tax credits) is the total amount in dollars of the
17 balance of the public utility's or holding company's
18 investment tax credits, deferred tax assets, excess deferred
19 federal income taxes, and any other federal or state tax
20 credit for the generating units as stated in the petition
21 filed under subsection (b).
22 (d) The Commission shall determine in the evidentiary
23 hearing the amount, if any, of the costs that are eligible
24 for recovery. The maximum allowable cost recovery shall be
25 the amount necessary to maintain the minimal financial
26 viability of the holding company of the public utility.
27 Financial viability shall be determined at the holding
28 company level and shall include all earnings from all holding
29 company subsidiaries, excluding losses by subsidiaries
30 engaged in businesses unrelated to the furnishing,
31 transmission, distribution, or sale of power or related
32 customer services.
33 (e) The amount of cost recovery determined under
34 subsection (d) shall be collected by the public utility for a
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1 period of 5 years. The recovery shall be made by applying a
2 charge per kilowatt-hour to all end-use customers of the
3 transmission and distribution system of the utility during
4 the 5 year recovery period and customers described in
5 subsection (f). The Commission shall determine the per
6 kilowatt-hour charge by dividing the allowed recovery amount
7 by the projected sales in the utility's service territory for
8 the 5 year period in which the recovery will be allowed, plus
9 the total number of kilowatt-hours determined under
10 subsection (f).
11 (f) Any customer who obtains capacity and energy from
12 cogeneration or self-generation facilities and was a customer
13 of the utility as of January 1, 1997, shall be assessed the
14 cost recovery charge determined under subsection (e) based
15 upon the number of kilowatt-hours delivered to that customer
16 by the transmission and distribution system of the utility
17 during calendar year 1996.
18 (220 ILCS 5/16-141 new)
19 Sec. 16-141. Ratepayer Equity Plans. A utility that is
20 allowed to recover uneconomic costs pursuant to Section
21 16-140 shall establish a Ratepayer Equity Plan before
22 implementing any charge under subsection (e) or (f) of
23 Section 16-140. The purpose of the plan shall be to
24 compensate ratepayers with shares of common stock equal in
25 value to the amount of cost recovery charges collected under
26 Section 16-140. The Plan shall be filed with the Commission,
27 which shall approve or modify the Plan so that the Plan shall
28 require the utility to do all the following:
29 (1) Calculate the total amount of costs recovered by the
30 utility under subsections (e) and (f) of Section 16-140 for
31 each fiscal quarter of the 5 year recovery period.
32 (2) Determine the market value of the stock of the
33 utility as indicated by the last trading price on a public
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1 exchange market as of the last date of each fiscal quarter.
2 If the stock is held by a holding company, the holding
3 company's stock shall be used to determine market value.
4 (3) Deposit with the State Treasurer stock certificates
5 for the utility or holding company's stock for which the
6 total market value determined under item (2) is equal to the
7 cost recovery calculated under item (1) within 15 days of the
8 end of the fiscal quarter.
9 (4) Distribute all proceeds from the sale of the stock
10 by the State Treasurer to all customers who have paid the
11 cost recovery charge through a reduction in or elimination of
12 the monthly customer charge. Customers who have not paid
13 the cost recovery charge shall not receive any of the
14 proceeds.
15 (220 ILCS 5/16-145 new)
16 Sec. 16-145. Independent system operator.
17 (a) If an independent system operator has not been
18 approved by the Federal Energy Regulatory Commission for an
19 area that includes Illinois, no later than one year after the
20 effective date of this amendatory Act of 1997 the Commission
21 shall select an independent system operator for Illinois.
22 (b) The independent system operator shall be responsible
23 for providing nondiscriminatory access to the transmission
24 system, ensuring transmission system reliability, providing
25 ancillary and other services as are required for the safe and
26 efficient operation of the transmission system, and
27 recommending to the Commission the least-cost means of
28 alleviating transmission system congestion where it occurs.
29 (c) The independent system operator shall be established
30 and shall operate in accordance with independent system
31 operator principles stated by the Federal Energy Regulatory
32 Commission.
33 (d) The selection, financing, and activities of the
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1 independent system operator shall be subject to the approval
2 of a governing board representative of wholesale market
3 participants, all customer classes, and environmental
4 interests. More than 50% of the voting members shall
5 represent entities that do not own transmission or generation
6 facilities.
7 (e) The Commission shall only approve the construction
8 of new transmission capacity if that new capacity is the
9 least-cost means to alleviating transmission system
10 congestion. The Commission shall conduct a proceeding to
11 determine how the costs for such construction are to be
12 recovered.
13 (f) Intermittent and distributed generation resources
14 shall not be unduly discriminated against in requirements for
15 ancillary services and charges for the use of the
16 transmission system.
17 (220 ILCS 5/16-150 new)
18 Sec. 16-150. Retail wheeling. No later than 15 months
19 after the initial supply of power under Section 16-125,
20 customers shall be allowed to purchase electricity and other
21 services from energy suppliers or power marketers, provided
22 that:
23 (a) All customer classes have an equal opportunity to
24 purchase from energy suppliers or power marketers.
25 (b) The Commission may choose to phase-in the
26 eligibility for purchasing from energy suppliers or power
27 marketers provided that all customers become eligible within
28 a 3 year period beginning 15 months after the initial supply
29 of power under Section 16-125 and that an equal percentage of
30 each class of customers shall become eligible at the same
31 time.
32 (c) A customer purchasing from energy suppliers shall
33 continue to pay the electric utility's rates as determined in
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1 Section 16-135 for transmission, distribution, other services
2 used by the customer, and decommissioning.
3 (d) Residential and small commercial customers shall not
4 be required to purchase new meters.
5 (220 ILCS 5/16-151)
6 Sec. 16-151. Commission regulation of power marketers,
7 energy suppliers, and electric utilities; consumer protection
8 requirements for retail electric competition.
9 (a) The legislature declares that the goal of increasing
10 retail competition in the sale of electricity must be
11 accomplished with consumer protections to enhance customer
12 understanding, prevent unfair trade practices, and establish
13 minimum criteria to govern the sale of electricity and
14 related services to consumers from retail energy suppliers
15 and electric utilities.
16 (b) Prior to the date that customers become eligible to
17 purchase from energy suppliers, the Commission shall do all
18 of the following:
19 (1) Disseminate to all customers information
20 containing a clear explanation of the basic concepts of
21 competition in the electric industry, customer risks and
22 responsibilities, current consumer protections, how to
23 use the household's energy use patterns to make decisions
24 about purchases of electricity and other related
25 services, and available dispute resolution mechanisms.
26 Such dissemination shall be designed to reach to broadest
27 spectrum of customers through such means as brochures and
28 other written materials, a variety of mass media, and
29 interactive approaches, including targeted efforts to
30 reach rural, low-income, elderly, non-english speaking,
31 disabled, minorities, and other traditionally
32 under-served populations.
33 (2) Pre-establish outcome measures of customer
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1 awareness, understanding, and ability to act, in order to
2 periodically evaluate the success of the Commission's
3 education and outreach efforts.
4 (3) Make available by request, at no cost to the
5 customer, a listing of certified power marketers and
6 price comparisons for the various products and services
7 offered by power marketers. This list will be revised
8 every 3 months.
9 (4) Identify barriers to participation in the
10 competitive retail market for electricity and related
11 services by residential and small commercial customers
12 and implement mechanisms to eliminate those barriers. The
13 Commission shall conduct a proceeding every 2 years to
14 review and revise these mechanisms as necessary to
15 facilitate participation by residential and small
16 commercial customers.
17 (5) Determine a per kilowatt-hour charge to be
18 assessed upon all customers purchasing energy from energy
19 suppliers that will be used to fund the education
20 programs and mechanisms implemented under this
21 subsection.
22 (c) All power marketers must be certified by the
23 Commission prior to serving customers in Illinois. The
24 Commission shall approve certification upon a finding that
25 the power marketer possesses sufficient technical, financial,
26 and managerial resources and abilities to provide reliable
27 service to customers.
28 (d) The Commission shall adopt a code of conduct,
29 effective as of the date that customers become eligible to
30 purchase power on the retail market, that will be applicable
31 to all power marketers certified under subsection (c) to
32 serve customers in Illinois. The Commission shall assess a
33 penalty against any power marketer that fails to comply with
34 the code of conduct and may remove a power marketer's
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1 certification to provide service to customers in Illinois if
2 upon its own motion or in response to a complaint or
3 complaints the Commission finds that the power marketer no
4 longer meets the standards for certification or has been in
5 significant and continued violation of the code of conduct.
6 The Commission shall conduct a proceeding every 2 years to
7 review and revise the code of conduct when necessary. At a
8 minimum, the code shall require power marketers to do all of
9 the following:
10 (1) Offer a standard package of basic services at a
11 nondiscriminatory price to all residential customers
12 residing in a service territory.
13 (2) Include information with billing statements and
14 marketing materials that fully disclose the prices,
15 terms, and conditions of services and products sold to
16 and available to customers and the technologies and fuel
17 types used to generate the electricity sold to the
18 customer.
19 (3) Provide documentation to the Commission and to
20 the customer that verifies claims regarding the sale of
21 power generated by renewable resources.
22 (4) Obtain written authorization from a customer
23 prior to switching the power marketer who serves that
24 customer.
25 (e) The electric utility shall provide billing and
26 collection services when requested by power marketers in
27 exchange for the payment of a cost-based fee established by
28 tariff.
29 (f) Power marketers and electric utilities shall be
30 subject to Part 280 of the current Illinois Administrative
31 Code, which the Commission shall revise in order to meet the
32 consumer protection needs in a restructured market. The
33 revised rules shall contain minimum credit and collection
34 procedures and practices applicable to retail electric
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1 competition including, but not limited to, all of the
2 following:
3 (1) Application for service.
4 (2) Credit evaluation and deposits.
5 (3) When disconnection of service can be used as a
6 method of collection, the timing and notices of
7 disconnection and required disclosures, disconnection
8 procedures, and a customer's right to a payment
9 arrangement to prevent disconnection.
10 (4) A customer's right to retain service during a
11 temporary medical emergency.
12 (5) A tenant's right to avoid disconnection of
13 service when a landlord fails to pay an overdue bill and
14 the tenant's right to obtain service in his or her own
15 name.
16 (6) Limitations on the transfer of previously
17 unpaid debt from one customer's account to that of
18 another and from a customer's account at one location to
19 an account at another location.
20 (7) Limitations on the billing of previously
21 unbilled amounts.
22 (8) When late fees may be assessed and limitations
23 on their amount and method of application to an overdue
24 amount.
25 (9) Reconnection rights and limits on reconnection
26 fees.
27 (10) Rules concerning partial payment and the
28 allocation of payments and credits to regulated and
29 unregulated portions of the total electric bill.
30 (g) An affiliate or subsidiary company of a regulated
31 utility may not compete for retail sales to customers within
32 the service territory of the utility unless the Commission
33 finds that all of the following conditions are met:
34 (1) Effective competition would not exist in the
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1 service territory without the participation of the
2 affiliate.
3 (2) Adequate protections are in place to prevent
4 cross-subsidy of the affiliate by customers of the
5 utility.
6 (3) The operation of the affiliate in the service
7 territory is necessary for the preservation of the
8 financial viability of the holding company.
9 (h) All power marketers, utilities, and other entities
10 selling power directly to end-use customers in Illinois shall
11 provide a percentage of the energy sold to end-use consumers
12 from renewable resources in accordance with the standards
13 determined in Section 16-155.
14 (i) The electric utility shall issue a request for
15 proposals to serve customers meeting the low-income
16 eligibility standard determined under Section 16-130. Power
17 marketers that have been certified to serve customers in
18 Illinois may bid for an amount that they require per customer
19 in order to provide electricity at the affordable rate to
20 low-income customers, as determined under Section 16-130. The
21 electric utility shall select the power marketer bidding the
22 lowest amount to provide electricity to eligible customers at
23 the affordable rate. The selected power marketer shall
24 receive the amount bid from the Universal Service Fund.
25 (j) Power marketers and utilities shall protect a
26 customer's usage, billing and payment history from disclosure
27 unless the disclosure has been authorized by law, or has been
28 approved by the customer in writing. This provision shall
29 not prohibit the Commission from ordering an electric utility
30 or power marketer to release generic information concerning
31 the usage, load shape curve, or other general characteristics
32 of customers as a group or rate classification. An electric
33 utility is authorized to release a list of its customers and
34 their addresses to retail electric suppliers under such
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1 conditions as specified by the Commission by rule. The
2 Commission may authorize the release of customer-specific
3 information by an electric utility, energy supplier, or power
4 marketer if it determines that the access to the identified
5 information would not be harmful to individual customers and
6 the benefits to the customers whose information would be
7 released will outweigh any detriments.
8 (k) Customers may change their energy supplier or power
9 marketer at any time, but may remain responsible for any
10 unpaid charges owed to a supplier or marketer if the customer
11 fails to give proper notice of change. An energy supplier
12 shall not require any notice that exceeds 5 business days.
13 Any fee or penalty charged by the supplier or marketer
14 associated with early termination of a contract shall be
15 conspicuously disclosed in the contract between the supplier
16 or marketer and the customer. The Commission shall adopt
17 rules that specify the type and manner of communications
18 between the customer and the supplier or marketer and
19 between the supplier or marketer and the electric utility to
20 effectuate a customer's change in supplier.
21 (220 ILCS 5/16-155 new)
22 Sec. 16-155. Renewable resource standards.
23 (a) No later than 6 months after the effective date of
24 this amendatory Act of 1997, the Department of Natural
25 Resources shall mandate renewable resource standards that
26 specify:
27 (1) the minimum percentage of the energy
28 requirements of the service territory to be met by power
29 generated by renewable resources; and
30 (2) a subset of the percentage in item (1) that
31 must be met by renewable resources located within the
32 State of Illinois.
33 (b) The renewable resource standards shall meet the
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1 goals of providing environmental benefits and promoting the
2 development of the renewable resource industry in Illinois,
3 taking into account the projected costs and availability of
4 fossil fuels used to generate electricity and the projected
5 costs and availability of renewable sources of power. The
6 Department of Natural Resources shall issue a report
7 demonstrating how the renewable resource standards were
8 determined in accordance with this subsection.
9 (1) At the end of the calendar year the Department
10 of Natural Resources shall issue to each seller of energy
11 to end-use consumers an Illinois Renewable Energy Credit
12 for each kilowatt-hour of energy provided from a
13 renewable resource located in Illinois and a Renewable
14 Energy Credit for each kilowatt-hour of energy provided
15 from a renewable resource without regard to location. In
16 order to receive the credits, sellers of energy must
17 provide documentation verifying the purchase of
18 electricity generated by renewable resources. Credits
19 shall be tradable and transferable.
20 (2) Three months after the beginning of each calendar
21 year, the Department of Natural Resources shall collect the
22 credits from each seller of power. Sellers of power will be
23 assessed a penalty, to be determined by the Department of
24 Natural Resources, for each kilowatt-hour required from
25 renewable resources in Illinois that is above the number of
26 Illinois Renewable Energy Credits and for each of the total
27 number of kilowatt-hours required from renewable resources
28 that is above the total of the Renewable Energy Credits plus
29 Illinois Renewable Energy Credits.
30 (d) The Department of Natural Resources shall conduct a
31 proceeding every 3 years to review, and if necessary, revise
32 the renewable resource standards.
33 (220 ILCS 5/16-160 new)
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1 Sec. 16-160. Energy efficiency programs.
2 (a) No later than 6 months after the effective date of
3 this amendatory Act of 1997, the Department of Natural
4 Resources shall mandate an energy efficiency standard for
5 each utility's service territory. This energy efficiency
6 standard shall specify an annual expenditure equal to or
7 greater than 3% of the utility's operating revenues for the
8 provision of cost-effective energy efficiency programs for
9 each class of customers. "Cost-effective" means that the
10 present value of the costs of the program over its lifetime
11 is less than the present value of the costs of generating and
12 delivering the energy and providing the generation capacity
13 that is no longer required as the result of the program. The
14 costs of the energy and capacity shall account for
15 environmental externalities.
16 (b) The energy efficiency standard shall meet the goals
17 of maintaining current reliability of service, reducing
18 environmental pollution, and avoiding the construction of
19 generation, transmission, and distribution facilities, while
20 taking into account the projected costs and availability of
21 fossil fuels used to generate electricity and the projected
22 costs and effectiveness of energy efficiency programs.
23 (c) The Department of Natural Resources shall issue a
24 report demonstrating how the energy efficiency standard was
25 determined in accordance with this subsection.
26 (d) An electric utility shall issue requests for
27 proposals to provide energy efficiency programs. Bids
28 submitted by suppliers of energy efficiency programs must
29 provide an estimate of annual reductions in kilowatt-hours
30 and kilowatts that will result over the life of the program.
31 The Department of Natural Resources shall select suppliers of
32 energy efficiency programs upon a determination that the
33 programs will provide the greatest reduction in energy and
34 capacity given the annual expenditure level or will be a
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1 cost-effective means of alleviating transmission and
2 distribution system congestion. The utility shall sign
3 contracts with energy efficiency suppliers under Section
4 16-125.
5 (e) The annual expenditure by the utility determined
6 under subsection (a) shall be allocated to the provision of
7 low-cost financing, subsidies, education, and technical
8 assistance to customers receiving the energy-efficiency
9 programs, as determined by the Department of Natural
10 Resources.
11 (f) Except where funded by the Universal Service Fund
12 under Section 16-130, the utility shall recover the annual
13 expenditure from a per kilowatt-hour charge assessed on all
14 end-users of the transmission and distribution system of the
15 electric utility.
16 (g) The Department of Natural Resources shall conduct
17 audits of each energy efficiency program to determine if the
18 programs are resulting in the reduction in kilowatt-hour
19 consumption and peak demand projected by the supplier under
20 subsection (d). If the Department of Natural Resources
21 finds that the programs are not reducing energy use and peak
22 demand or are producing reductions significantly below those
23 projected by suppliers, the utility shall provide a refund to
24 all customers equal to the annual expenditure for that
25 program that has been recovered in rates and shall no longer
26 be allowed to recover future expenditures for that program.
27 (h) The Department of Natural Resources shall conduct a
28 proceeding every 3 years to review, and if necessary, revise
29 the energy efficiency standards.
30 (220 ILCS 5/16-165 new)
31 Sec. 16-165. Market power study. No later than 12
32 months after the effective date of this amendatory Act of
33 1997, the Commission shall conduct a study and issue a report
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1 to the legislature on:
2 (1) The potential for any of the wholesale and
3 energy suppliers that will be selling power to electric
4 utilities or final customers in Illinois to exercise
5 undue market power over prices.
6 (2) Barriers to entry that may exist for the
7 wholesale and retail power markets in Illinois.
8 (3) Impediments to the establishment of a fully
9 competitive power market in Illinois other than those
10 identified under (1) and (2).
11 (4) Recommendations to mitigate the undue exercise
12 of market power, barriers to entry and any other
13 impediments to a competitive power market that were
14 identified in item (3).
15 (220 ILCS 5/16-170 new)
16 Sec. 16-170. Reporting requirements. Beginning one year
17 from the initial supply of power under Section 16-125, the
18 Commission shall issue an annual report to the legislature on
19 the extent of competition within the State, the effect of
20 competition on rates, the level of participation of
21 residential and small commercial customers, the effect of
22 competition on service quality, the extent of predatory
23 practices by competitors, and any other matter the Commission
24 deems appropriate.
25 (220 ILCS 5/16-175 new)
26 Sec. 16-175. State revenue task force. The legislature
27 shall appoint a task force that will make recommendations for
28 competitively neutral mechanisms to maintain State and local
29 tax revenues in a competitive electricity market provided for
30 in this Act. The task force shall issue a report containing
31 such recommendations no later than 6 months after the
32 effective date of this amendatory Act of 1997.
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1 Section 10. The State Finance Act is amended by adding
2 Section 6z-42 as follows:
3 (30 ILCS 105/6z-42 new)
4 Sec. 6z-42. Ratepayer Equity Funds.
5 (a) The State Treasurer shall create tax-exempt,
6 non-profit trust funds for the customers of each utility that
7 has filed a Ratepayer Equity Plan under Section 16-141 of the
8 Public Utilities Act. These Funds shall be known as
9 Ratepayer Equity Funds.
10 (b) All stocks, dividends, and cash received by the
11 State Treasury under Section 16-141 shall be deposited in the
12 Ratepayer Equity Fund.
13 (c) The State Treasurer shall:
14 (1) Manage the Ratepayer Equity Fund in a manner
15 that maximizes returns to the fund and benefits to
16 ratepayers.
17 (2) Hold the certificates in the Ratepayer Equity
18 Fund and receive all dividends from the stocks until such
19 time that the State Treasurer determines that it is in
20 the best interests of and will maximize benefits for
21 ratepayers to sell all or a portion of the stocks so
22 held.
23 (3) Promulgate rules necessary for the efficient
24 administration of the Ratepayer Equity Funds.
25 Section 99. Effective date. This Act takes effect June
26 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