Public Act 094-0977
 
SB1705 Enrolled LRB094 11269 MKM 42123 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Public Utilities Act is amended by changing
Sections 16-101A, 16-102, and 16-107 as follows:
 
    (220 ILCS 5/16-101A)
    Sec. 16-101A. Legislative findings.
    (a) The citizens and businesses of the State of Illinois
have been well-served by a comprehensive electrical utility
system which has provided safe, reliable, and affordable
service. The electrical utility system in the State of Illinois
has historically been subject to State and federal regulation,
aimed at assuring the citizens and businesses of the State of
safe, reliable, and affordable service, while at the same time
assuring the utility system of a return on its investment.
    (b) Competitive forces are affecting the market for
electricity as a result of recent federal regulatory and
statutory changes and the activities of other states.
Competition in the electric services market may create
opportunities for new products and services for customers and
lower costs for users of electricity. Long-standing regulatory
relationships need to be altered to accommodate the competition
that could fundamentally alter the structure of the electric
services market.
    (c) With the advent of increasing competition in this
industry, the State has a continued interest in assuring that
the safety, reliability, and affordability of electrical power
is not sacrificed to competitive pressures, and to that end,
intends to implement safeguards to assure that the industry
continues to operate the electrical system in a manner that
will serve the public's interest. Under the existing regulatory
framework, the industry has been encouraged to undertake
certain investments in its physical plant and personnel to
enhance its efficient operation, the cost of which it has been
permitted to pass on to consumers. The State has an interest in
providing the existing utilities a reasonable opportunity to
obtain a return on certain investments on which they depended
in undertaking those commitments in the first instance while,
at the same time, not permitting new entrants into the industry
to take unreasonable advantage of the investments made by the
formerly regulated industry.
    (d) A competitive wholesale and retail market must benefit
all Illinois citizens. The Illinois Commerce Commission should
act to promote the development of an effectively competitive
electricity market that operates efficiently and is equitable
to all consumers. Consumer protections must be in place to
ensure that all customers continue to receive safe, reliable,
affordable, and environmentally safe electric service.
    (e) All consumers must benefit in an equitable and timely
fashion from the lower costs for electricity that result from
retail and wholesale competition and receive sufficient
information to make informed choices among suppliers and
services. The use of renewable resources and energy efficiency
resources should be encouraged in competitive markets.
    (f) The efficiency of electric markets depends both upon
the competitiveness of supply and upon the
price-responsiveness of the demand for service. Therefore, to
ensure the lowest total cost of service and to enhance the
reliability of service, all classes of the electricity
customers of electric utilities should have access to and be
able to voluntarily use real-time pricing and other
price-response and demand-response mechanisms.
(Source: P.A. 90-561, eff. 12-16-97.)
 
    (220 ILCS 5/16-102)
    Sec. 16-102. Definitions. For the purposes of this Article
the following terms shall be defined as set forth in this
Section.
    "Alternative retail electric supplier" means every person,
cooperative, corporation, municipal corporation, company,
association, joint stock company or association, firm,
partnership, individual, or other entity, their lessees,
trustees, or receivers appointed by any court whatsoever, that
offers electric power or energy for sale, lease or in exchange
for other value received to one or more retail customers, or
that engages in the delivery or furnishing of electric power or
energy to such retail customers, and shall include, without
limitation, resellers, aggregators and power marketers, but
shall not include (i) electric utilities (or any agent of the
electric utility to the extent the electric utility provides
tariffed services to retail customers through that agent), (ii)
any electric cooperative or municipal system as defined in
Section 17-100 to the extent that the electric cooperative or
municipal system is serving retail customers within any area in
which it is or would be entitled to provide service under the
law in effect immediately prior to the effective date of this
amendatory Act of 1997, (iii) a public utility that is owned
and operated by any public institution of higher education of
this State, or a public utility that is owned by such public
institution of higher education and operated by any of its
lessees or operating agents, within any area in which it is or
would be entitled to provide service under the law in effect
immediately prior to the effective date of this amendatory Act
of 1997, (iv) a retail customer to the extent that customer
obtains its electric power and energy from that customer's own
cogeneration or self-generation facilities, (v) an entity that
owns, operates, sells, or arranges for the installation of a
customer's own cogeneration or self-generation facilities, but
only to the extent the entity is engaged in owning, selling or
arranging for the installation of such facility, or operating
the facility on behalf of such customer, provided however that
any such third party owner or operator of a facility built
after January 1, 1999, complies with the labor provisions of
Section 16-128(a) as though such third party were an
alternative retail electric supplier, or (vi) an industrial or
manufacturing customer that owns its own distribution
facilities, to the extent that the customer provides service
from that distribution system to a third-party contractor
located on the customer's premises that is integrally and
predominantly engaged in the customer's industrial or
manufacturing process; provided, that if the industrial or
manufacturing customer has elected delivery services, the
customer shall pay transition charges applicable to the
electric power and energy consumed by the third-party
contractor unless such charges are otherwise paid by the third
party contractor, which shall be calculated based on the usage
of, and the base rates or the contract rates applicable to, the
third-party contractor in accordance with Section 16-102.
    "Base rates" means the rates for those tariffed services
that the electric utility is required to offer pursuant to
subsection (a) of Section 16-103 and that were identified in a
rate order for collection of the electric utility's base rate
revenue requirement, excluding (i) separate automatic rate
adjustment riders then in effect, (ii) special or negotiated
contract rates, (iii) delivery services tariffs filed pursuant
to Section 16-108, (iv) real-time pricing, or (v) tariffs that
were in effect prior to October 1, 1996 and that based charges
for services on an index or average of other utilities'
charges, but including (vi) any subsequent redesign of such
rates for tariffed services that is authorized by the
Commission after notice and hearing.
    "Competitive service" includes (i) any service that has
been declared to be competitive pursuant to Section 16-113 of
this Act, (ii) contract service, and (iii) services, other than
tariffed services, that are related to, but not necessary for,
the provision of electric power and energy or delivery
services.
    "Contract service" means (1) services, including the
provision of electric power and energy or other services, that
are provided by mutual agreement between an electric utility
and a retail customer that is located in the electric utility's
service area, provided that, delivery services shall not be a
contract service until such services are declared competitive
pursuant to Section 16-113; and also means (2) the provision of
electric power and energy by an electric utility to retail
customers outside the electric utility's service area pursuant
to Section 16-116. Provided, however, contract service does not
include electric utility services provided pursuant to (i)
contracts that retail customers are required to execute as a
condition of receiving tariffed services, or (ii) special or
negotiated rate contracts for electric utility services that
were entered into between an electric utility and a retail
customer prior to the effective date of this amendatory Act of
1997 and filed with the Commission.
    "Delivery services" means those services provided by the
electric utility that are necessary in order for the
transmission and distribution systems to function so that
retail customers located in the electric utility's service area
can receive electric power and energy from suppliers other than
the electric utility, and shall include, without limitation,
standard metering and billing services.
    "Electric utility" means a public utility, as defined in
Section 3-105 of this Act, that has a franchise, license,
permit or right to furnish or sell electricity to retail
customers within a service area.
    "Mandatory transition period" means the period from the
effective date of this amendatory Act of 1997 through January
1, 2007.
    "Municipal system" shall have the meaning set forth in
Section 17-100.
    "Real-time pricing" means tariffed retail charges for
delivered electric power and energy that vary on an
hour-to-hour and are determined from wholesale market prices
using a methodology approved by the Illinois Commerce
Commission basis for nonresidential retail customers and that
vary on a periodic basis during the day for residential retail
customers.
    "Retail customer" means a single entity using electric
power or energy at a single premises and that (A) either (i) is
receiving or is eligible to receive tariffed services from an
electric utility, or (ii) that is served by a municipal system
or electric cooperative within any area in which the municipal
system or electric cooperative is or would be entitled to
provide service under the law in effect immediately prior to
the effective date of this amendatory Act of 1997, or (B) an
entity which on the effective date of this Act was receiving
electric service from a public utility and (i) was engaged in
the practice of resale and redistribution of such electricity
within a building prior to January 2, 1957, or (ii) was
providing lighting services to tenants in a multi-occupancy
building, but only to the extent such resale, redistribution or
lighting service is authorized by the electric utility's
tariffs that were on file with the Commission on the effective
date of this Act.
    "Service area" means (i) the geographic area within which
an electric utility was lawfully entitled to provide electric
power and energy to retail customers as of the effective date
of this amendatory Act of 1997, and includes (ii) the location
of any retail customer to which the electric utility was
lawfully providing electric utility services on such effective
date.
    "Small commercial retail customer" means those
nonresidential retail customers of an electric utility
consuming 15,000 kilowatt-hours or less of electricity
annually in its service area.
    "Tariffed service" means services provided to retail
customers by an electric utility as defined by its rates on
file with the Commission pursuant to the provisions of Article
IX of this Act, but shall not include competitive services.
    "Transition charge" means a charge expressed in cents per
kilowatt-hour that is calculated for a customer or class of
customers as follows for each year in which an electric utility
is entitled to recover transition charges as provided in
Section 16-108:
        (1) the amount of revenue that an electric utility
    would receive from the retail customer or customers if it
    were serving such customers' electric power and energy
    requirements as a tariffed service based on (A) all of the
    customers' actual usage during the 3 years ending 90 days
    prior to the date on which such customers were first
    eligible for delivery services pursuant to Section 16-104,
    and (B) on (i) the base rates in effect on October 1, 1996
    (adjusted for the reductions required by subsection (b) of
    Section 16-111, for any reduction resulting from a rate
    decrease under Section 16-101(b), for any restatement of
    base rates made in conjunction with an elimination of the
    fuel adjustment clause pursuant to subsection (b), (d), or
    (f) of Section 9-220 and for any removal of decommissioning
    costs from base rates pursuant to Section 16-114) and any
    separate automatic rate adjustment riders (other than a
    decommissioning rate as defined in Section 16-114) under
    which the customers were receiving or, had they been
    customers, would have received electric power and energy
    from the electric utility during the year immediately
    preceding the date on which such customers were first
    eligible for delivery service pursuant to Section 16-104,
    or (ii) to the extent applicable, any contract rates,
    including contracts or rates for consolidated or
    aggregated billing, under which such customers were
    receiving electric power and energy from the electric
    utility during such year;
        (2) less the amount of revenue, other than revenue from
    transition charges and decommissioning rates, that the
    electric utility would receive from such retail customers
    for delivery services provided by the electric utility,
    assuming such customers were taking delivery services for
    all of their usage, based on the delivery services tariffs
    in effect during the year for which the transition charge
    is being calculated and on the usage identified in
    paragraph (1);
        (3) less the market value for the electric power and
    energy that the electric utility would have used to supply
    all of such customers' electric power and energy
    requirements, as a tariffed service, based on the usage
    identified in paragraph (1), with such market value
    determined in accordance with Section 16-112 of this Act;
        (4) less the following amount which represents the
    amount to be attributed to new revenue sources and cost
    reductions by the electric utility through the end of the
    period for which transition costs are recovered pursuant to
    Section 16-108, referred to in this Article XVI as a
    "mitigation factor":
            (A) for nonresidential retail customers, an amount
        equal to the greater of (i) 0.5 cents per kilowatt-hour
        during the period October 1, 1999 through December 31,
        2004, 0.6 cents per kilowatt-hour in calendar year
        2005, and 0.9 cents per kilowatt-hour in calendar year
        2006, multiplied in each year by the usage identified
        in paragraph (1), or (ii) an amount equal to the
        following percentages of the amount produced by
        applying the applicable base rates (adjusted as
        described in subparagraph (1)(B)) or contract rate to
        the usage identified in paragraph (1): 8% for the
        period October 1, 1999 through December 31, 2002, 10%
        in calendar years 2003 and 2004, 11% in calendar year
        2005 and 12% in calendar year 2006; and
            (B) for residential retail customers, an amount
        equal to the following percentages of the amount
        produced by applying the base rates in effect on
        October 1, 1996 (adjusted as described in subparagraph
        (1)(B)) to the usage identified in paragraph (1): (i)
        6% from May 1, 2002 through December 31, 2002, (ii) 7%
        in calendar years 2003 and 2004, (iii) 8% in calendar
        year 2005, and (iv) 10% in calendar year 2006;
        (5) divided by the usage of such customers identified
    in paragraph (1),
provided that the transition charge shall never be less than
zero.
    "Unbundled service" means a component or constituent part
of a tariffed service which the electric utility subsequently
offers separately to its customers.
(Source: P.A. 91-50, eff. 6-30-99; 92-537, eff. 6-6-02.)
 
    (220 ILCS 5/16-107)
    Sec. 16-107. Real-time pricing.
    (a) Each electric utility shall file, on or before May 1,
1998, a tariff or tariffs which allow nonresidential retail
customers in the electric utility's service area to elect
real-time pricing beginning October 1, 1998.
    (b) Each electric utility shall file, on or before May 1,
2000, a tariff or tariffs which allow residential retail
customers in the electric utility's service area to elect
real-time pricing beginning October 1, 2000.
    (b-5) Each electric utility shall file a tariff or tariffs
allowing residential retail customers in the electric
utility's service area to elect real-time pricing beginning
January 2, 2007. A customer who elects real-time pricing shall
remain on such rate for a minimum of 12 months. The Commission
may, after notice and hearing, approve the tariff or tariffs,
provided that the Commission finds that the potential for
demand reductions will result in net economic benefits to all
residential customers of the electric utility. In examining
economic benefits from demand reductions, the Commission
shall, at a minimum, consider the following: improvements to
system reliability and power quality, reduction in wholesale
market prices and price volatility, electric utility cost
avoidance and reductions, market power mitigation, and other
benefits of demand reductions, but only to the extent that the
effects of reduced demand can be demonstrated to lower the cost
of electricity delivered to residential customers. A tariff or
tariffs approved pursuant to this subsection (b-5) shall, at a
minimum, describe (i) the methodology for determining the
market price of energy to be reflected in the real-time rate
and (ii) the manner in which customers who elect real-time
pricing will be provided with ready access to hourly market
prices, including, but not limited to, day-ahead hourly energy
prices.
    A proceeding under this subsection (b-5) may not exceed 120
days in length.
    (b-10) Each electric utility providing real-time pricing
pursuant to subsection (b-5) shall install a meter capable of
recording hourly interval energy use at the service location of
each customer that elects real-time pricing pursuant to this
subsection.
    (b-15) If the Commission issues an order pursuant to
subsection (b-5), the affected electric utility shall contract
with an entity not affiliated with the electric utility to
serve as a program administrator to develop and implement a
program to provide consumer outreach, enrollment, and
education concerning real-time pricing and to establish and
administer an information system and technical and other
customer assistance that is necessary to enable customers to
manage electricity use. The program administrator: (i) shall be
selected and compensated by the electric utility, subject to
Commission approval; (ii) shall have demonstrated technical
and managerial competence in the development and
administration of demand management programs; and (iii) may
develop and implement risk management, energy efficiency, and
other services related to energy use management for which the
program administrator shall be compensated by participants in
the program receiving such services. The electric utility shall
provide the program administrator with all information and
assistance necessary to perform the program administrator's
duties, including, but not limited to, customer, account, and
energy use data. The electric utility shall permit the program
administrator to include inserts in residential customer bills
2 times per year to assist with customer outreach and
enrollment.
    The program administrator shall submit an annual report to
the electric utility no later than April 1 of each year
describing the operation and results of the program, including
information concerning the number and types of customers using
real-time pricing, changes in customers' energy use patterns,
an assessment of the value of the program to both participants
and non-participants, and recommendations concerning
modification of the program and the tariff or tariffs filed
under subsection (b-5). This report shall be filed by the
electric utility with the Commission within 30 days of receipt
and shall be available to the public on the Commission's web
site.
    (b-20) The Commission shall monitor the performance of
programs established pursuant to subsection (b-15) and shall
order the termination or modification of a program if it
determines that the program is not, after a reasonable period
of time for development not to exceed 4 years, resulting in net
benefits to the residential customers of the electric utility.
    (b-25) An electric utility shall be entitled to recover
reasonable costs incurred in complying with this Section,
provided that recovery of the costs is fairly apportioned among
its residential customers as provided in this subsection
(b-25). The electric utility may apportion greater costs on the
residential customers who elect real-time pricing, but may also
impose some of the costs of real-time pricing on customers who
do not elect real-time pricing, provided that the Commission
determines that the cost savings resulting from real-time
pricing will exceed the costs imposed on customers for
maintaining the program.
    (c) The electric utility's tariff or tariffs filed pursuant
to this Section shall be subject to Article IX.
    (d) This Section does not apply to any electric utility
providing service to 100,000 or fewer customers.
(Source: P.A. 90-561, eff. 12-16-97.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.