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Full Text of SB1610  100th General Assembly

SB1610 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB1610

 

Introduced 2/9/2017, by Sen. Don Harmon

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/16-111.5

    Amends the Public Utilities Act. Provides that the Illinois Commerce Commission shall quarterly review the price of any zero emission credits procured by the Illinois Power Agency to ensure no more than the unrecovered costs of the plants based on market sales and pricing is recovered. Provides that if the plant shows a profit for more than one year, the zero emission credit program shall be rebid and the Illinois Power Agency shall have the authority to expand the definition to include additional Illinois-based zero emission generation sources as eligible for the program. Provides that the Commission shall ensure any qualifying nuclear plant is not receiving excessive earnings through its zero emission credit compensation, and if a plant is found to have received excessive earnings due to the zero emission credit pricing, that plant shall have its zero emission credit qualification revoked. Provides that nothing prevents the Commission from initiating a docketed proceeding to reconcile zero emission credit payments with allowed costs. Effective immediately or on the date certain provisions of Public Act 99-906 take effect, whichever is later.


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A BILL FOR

 

SB1610LRB100 06863 RJF 16912 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Public Utilities Act is amended by changing
5Section 16-111.5 as follows:
 
6    (220 ILCS 5/16-111.5)
7    (Text of Section before amendment by P.A. 99-906)
8    Sec. 16-111.5. Provisions relating to procurement.
9    (a) An electric utility that on December 31, 2005 served at
10least 100,000 customers in Illinois shall procure power and
11energy for its eligible retail customers in accordance with the
12applicable provisions set forth in Section 1-75 of the Illinois
13Power Agency Act and this Section. A small multi-jurisdictional
14electric utility that on December 31, 2005 served less than
15100,000 customers in Illinois may elect to procure power and
16energy for all or a portion of its eligible Illinois retail
17customers in accordance with the applicable provisions set
18forth in this Section and Section 1-75 of the Illinois Power
19Agency Act. This Section shall not apply to a small
20multi-jurisdictional utility until such time as a small
21multi-jurisdictional utility requests the Illinois Power
22Agency to prepare a procurement plan for its eligible retail
23customers. "Eligible retail customers" for the purposes of this

 

 

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1Section means those retail customers that purchase power and
2energy from the electric utility under fixed-price bundled
3service tariffs, other than those retail customers whose
4service is declared or deemed competitive under Section 16-113
5and those other customer groups specified in this Section,
6including self-generating customers, customers electing hourly
7pricing, or those customers who are otherwise ineligible for
8fixed-price bundled tariff service. Those customers that are
9excluded from the definition of "eligible retail customers"
10shall not be included in the procurement plan load
11requirements, and the utility shall procure any supply
12requirements, including capacity, ancillary services, and
13hourly priced energy, in the applicable markets as needed to
14serve those customers, provided that the utility may include in
15its procurement plan load requirements for the load that is
16associated with those retail customers whose service has been
17declared or deemed competitive pursuant to Section 16-113 of
18this Act to the extent that those customers are purchasing
19power and energy during one of the transition periods
20identified in subsection (b) of Section 16-113 of this Act.
21    (b) A procurement plan shall be prepared for each electric
22utility consistent with the applicable requirements of the
23Illinois Power Agency Act and this Section. For purposes of
24this Section, Illinois electric utilities that are affiliated
25by virtue of a common parent company are considered to be a
26single electric utility. Small multi-jurisdictional utilities

 

 

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1may request a procurement plan for a portion of or all of its
2Illinois load. Each procurement plan shall analyze the
3projected balance of supply and demand for eligible retail
4customers over a 5-year period with the first planning year
5beginning on June 1 of the year following the year in which the
6plan is filed. The plan shall specifically identify the
7wholesale products to be procured following plan approval, and
8shall follow all the requirements set forth in the Public
9Utilities Act and all applicable State and federal laws,
10statutes, rules, or regulations, as well as Commission orders.
11Nothing in this Section precludes consideration of contracts
12longer than 5 years and related forecast data. Unless specified
13otherwise in this Section, in the procurement plan or in the
14implementing tariff, any procurement occurring in accordance
15with this plan shall be competitively bid through a request for
16proposals process. Approval and implementation of the
17procurement plan shall be subject to review and approval by the
18Commission according to the provisions set forth in this
19Section. A procurement plan shall include each of the following
20components:
21        (1) Hourly load analysis. This analysis shall include:
22            (i) multi-year historical analysis of hourly
23        loads;
24            (ii) switching trends and competitive retail
25        market analysis;
26            (iii) known or projected changes to future loads;

 

 

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1        and
2            (iv) growth forecasts by customer class.
3        (2) Analysis of the impact of any demand side and
4    renewable energy initiatives. This analysis shall include:
5            (i) the impact of demand response programs and
6        energy efficiency programs, both current and
7        projected; for small multi-jurisdictional utilities,
8        the impact of demand response and energy efficiency
9        programs approved pursuant to Section 8-408 of this
10        Act, both current and projected; and
11            (ii) supply side needs that are projected to be
12        offset by purchases of renewable energy resources, if
13        any.
14        (3) A plan for meeting the expected load requirements
15    that will not be met through preexisting contracts. This
16    plan shall include:
17            (i) definitions of the different Illinois retail
18        customer classes for which supply is being purchased;
19            (ii) the proposed mix of demand-response products
20        for which contracts will be executed during the next
21        year. For small multi-jurisdictional electric
22        utilities that on December 31, 2005 served fewer than
23        100,000 customers in Illinois, these shall be defined
24        as demand-response products offered in an energy
25        efficiency plan approved pursuant to Section 8-408 of
26        this Act. The cost-effective demand-response measures

 

 

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1        shall be procured whenever the cost is lower than
2        procuring comparable capacity products, provided that
3        such products shall:
4                (A) be procured by a demand-response provider
5            from eligible retail customers;
6                (B) at least satisfy the demand-response
7            requirements of the regional transmission
8            organization market in which the utility's service
9            territory is located, including, but not limited
10            to, any applicable capacity or dispatch
11            requirements;
12                (C) provide for customers' participation in
13            the stream of benefits produced by the
14            demand-response products;
15                (D) provide for reimbursement by the
16            demand-response provider of the utility for any
17            costs incurred as a result of the failure of the
18            supplier of such products to perform its
19            obligations thereunder; and
20                (E) meet the same credit requirements as apply
21            to suppliers of capacity, in the applicable
22            regional transmission organization market;
23            (iii) monthly forecasted system supply
24        requirements, including expected minimum, maximum, and
25        average values for the planning period;
26            (iv) the proposed mix and selection of standard

 

 

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1        wholesale products for which contracts will be
2        executed during the next year, separately or in
3        combination, to meet that portion of its load
4        requirements not met through pre-existing contracts,
5        including but not limited to monthly 5 x 16 peak period
6        block energy, monthly off-peak wrap energy, monthly 7 x
7        24 energy, annual 5 x 16 energy, annual off-peak wrap
8        energy, annual 7 x 24 energy, monthly capacity, annual
9        capacity, peak load capacity obligations, capacity
10        purchase plan, and ancillary services;
11            (v) proposed term structures for each wholesale
12        product type included in the proposed procurement plan
13        portfolio of products; and
14            (vi) an assessment of the price risk, load
15        uncertainty, and other factors that are associated
16        with the proposed procurement plan; this assessment,
17        to the extent possible, shall include an analysis of
18        the following factors: contract terms, time frames for
19        securing products or services, fuel costs, weather
20        patterns, transmission costs, market conditions, and
21        the governmental regulatory environment; the proposed
22        procurement plan shall also identify alternatives for
23        those portfolio measures that are identified as having
24        significant price risk.
25        (4) Proposed procedures for balancing loads. The
26    procurement plan shall include, for load requirements

 

 

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1    included in the procurement plan, the process for (i)
2    hourly balancing of supply and demand and (ii) the criteria
3    for portfolio re-balancing in the event of significant
4    shifts in load.
5    (c) The procurement process set forth in Section 1-75 of
6the Illinois Power Agency Act and subsection (e) of this
7Section shall be administered by a procurement administrator
8and monitored by a procurement monitor.
9        (1) The procurement administrator shall:
10            (i) design the final procurement process in
11        accordance with Section 1-75 of the Illinois Power
12        Agency Act and subsection (e) of this Section following
13        Commission approval of the procurement plan;
14            (ii) develop benchmarks in accordance with
15        subsection (e)(3) to be used to evaluate bids; these
16        benchmarks shall be submitted to the Commission for
17        review and approval on a confidential basis prior to
18        the procurement event;
19            (iii) serve as the interface between the electric
20        utility and suppliers;
21            (iv) manage the bidder pre-qualification and
22        registration process;
23            (v) obtain the electric utilities' agreement to
24        the final form of all supply contracts and credit
25        collateral agreements;
26            (vi) administer the request for proposals process;

 

 

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1            (vii) have the discretion to negotiate to
2        determine whether bidders are willing to lower the
3        price of bids that meet the benchmarks approved by the
4        Commission; any post-bid negotiations with bidders
5        shall be limited to price only and shall be completed
6        within 24 hours after opening the sealed bids and shall
7        be conducted in a fair and unbiased manner; in
8        conducting the negotiations, there shall be no
9        disclosure of any information derived from proposals
10        submitted by competing bidders; if information is
11        disclosed to any bidder, it shall be provided to all
12        competing bidders;
13            (viii) maintain confidentiality of supplier and
14        bidding information in a manner consistent with all
15        applicable laws, rules, regulations, and tariffs;
16            (ix) submit a confidential report to the
17        Commission recommending acceptance or rejection of
18        bids;
19            (x) notify the utility of contract counterparties
20        and contract specifics; and
21            (xi) administer related contingency procurement
22        events.
23        (2) The procurement monitor, who shall be retained by
24    the Commission, shall:
25            (i) monitor interactions among the procurement
26        administrator, suppliers, and utility;

 

 

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1            (ii) monitor and report to the Commission on the
2        progress of the procurement process;
3            (iii) provide an independent confidential report
4        to the Commission regarding the results of the
5        procurement event;
6            (iv) assess compliance with the procurement plans
7        approved by the Commission for each utility that on
8        December 31, 2005 provided electric service to a least
9        100,000 customers in Illinois and for each small
10        multi-jurisdictional utility that on December 31, 2005
11        served less than 100,000 customers in Illinois;
12            (v) preserve the confidentiality of supplier and
13        bidding information in a manner consistent with all
14        applicable laws, rules, regulations, and tariffs;
15            (vi) provide expert advice to the Commission and
16        consult with the procurement administrator regarding
17        issues related to procurement process design, rules,
18        protocols, and policy-related matters; and
19            (vii) consult with the procurement administrator
20        regarding the development and use of benchmark
21        criteria, standard form contracts, credit policies,
22        and bid documents.
23    (d) Except as provided in subsection (j), the planning
24process shall be conducted as follows:
25        (1) Beginning in 2008, each Illinois utility procuring
26    power pursuant to this Section shall annually provide a

 

 

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1    range of load forecasts to the Illinois Power Agency by
2    July 15 of each year, or such other date as may be required
3    by the Commission or Agency. The load forecasts shall cover
4    the 5-year procurement planning period for the next
5    procurement plan and shall include hourly data
6    representing a high-load, low-load and expected-load
7    scenario for the load of the eligible retail customers. The
8    utility shall provide supporting data and assumptions for
9    each of the scenarios.
10        (2) Beginning in 2008, the Illinois Power Agency shall
11    prepare a procurement plan by August 15th of each year, or
12    such other date as may be required by the Commission. The
13    procurement plan shall identify the portfolio of
14    demand-response and power and energy products to be
15    procured. Cost-effective demand-response measures shall be
16    procured as set forth in item (iii) of subsection (b) of
17    this Section. Copies of the procurement plan shall be
18    posted and made publicly available on the Agency's and
19    Commission's websites, and copies shall also be provided to
20    each affected electric utility. An affected utility shall
21    have 30 days following the date of posting to provide
22    comment to the Agency on the procurement plan. Other
23    interested entities also may comment on the procurement
24    plan. All comments submitted to the Agency shall be
25    specific, supported by data or other detailed analyses,
26    and, if objecting to all or a portion of the procurement

 

 

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1    plan, accompanied by specific alternative wording or
2    proposals. All comments shall be posted on the Agency's and
3    Commission's websites. During this 30-day comment period,
4    the Agency shall hold at least one public hearing within
5    each utility's service area for the purpose of receiving
6    public comment on the procurement plan. Within 14 days
7    following the end of the 30-day review period, the Agency
8    shall revise the procurement plan as necessary based on the
9    comments received and file the procurement plan with the
10    Commission and post the procurement plan on the websites.
11        (3) Within 5 days after the filing of the procurement
12    plan, any person objecting to the procurement plan shall
13    file an objection with the Commission. Within 10 days after
14    the filing, the Commission shall determine whether a
15    hearing is necessary. The Commission shall enter its order
16    confirming or modifying the procurement plan within 90 days
17    after the filing of the procurement plan by the Illinois
18    Power Agency.
19        (4) The Commission shall approve the procurement plan,
20    including expressly the forecast used in the procurement
21    plan, if the Commission determines that it will ensure
22    adequate, reliable, affordable, efficient, and
23    environmentally sustainable electric service at the lowest
24    total cost over time, taking into account any benefits of
25    price stability.
26    (e) The procurement process shall include each of the

 

 

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1following components:
2        (1) Solicitation, pre-qualification, and registration
3    of bidders. The procurement administrator shall
4    disseminate information to potential bidders to promote a
5    procurement event, notify potential bidders that the
6    procurement administrator may enter into a post-bid price
7    negotiation with bidders that meet the applicable
8    benchmarks, provide supply requirements, and otherwise
9    explain the competitive procurement process. In addition
10    to such other publication as the procurement administrator
11    determines is appropriate, this information shall be
12    posted on the Illinois Power Agency's and the Commission's
13    websites. The procurement administrator shall also
14    administer the prequalification process, including
15    evaluation of credit worthiness, compliance with
16    procurement rules, and agreement to the standard form
17    contract developed pursuant to paragraph (2) of this
18    subsection (e). The procurement administrator shall then
19    identify and register bidders to participate in the
20    procurement event.
21        (2) Standard contract forms and credit terms and
22    instruments. The procurement administrator, in
23    consultation with the utilities, the Commission, and other
24    interested parties and subject to Commission oversight,
25    shall develop and provide standard contract forms for the
26    supplier contracts that meet generally accepted industry

 

 

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1    practices. Standard credit terms and instruments that meet
2    generally accepted industry practices shall be similarly
3    developed. The procurement administrator shall make
4    available to the Commission all written comments it
5    receives on the contract forms, credit terms, or
6    instruments. If the procurement administrator cannot reach
7    agreement with the applicable electric utility as to the
8    contract terms and conditions, the procurement
9    administrator must notify the Commission of any disputed
10    terms and the Commission shall resolve the dispute. The
11    terms of the contracts shall not be subject to negotiation
12    by winning bidders, and the bidders must agree to the terms
13    of the contract in advance so that winning bids are
14    selected solely on the basis of price.
15        (3) Establishment of a market-based price benchmark.
16    As part of the development of the procurement process, the
17    procurement administrator, in consultation with the
18    Commission staff, Agency staff, and the procurement
19    monitor, shall establish benchmarks for evaluating the
20    final prices in the contracts for each of the products that
21    will be procured through the procurement process. The
22    benchmarks shall be based on price data for similar
23    products for the same delivery period and same delivery
24    hub, or other delivery hubs after adjusting for that
25    difference. The price benchmarks may also be adjusted to
26    take into account differences between the information

 

 

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1    reflected in the underlying data sources and the specific
2    products and procurement process being used to procure
3    power for the Illinois utilities. The benchmarks shall be
4    confidential but shall be provided to, and will be subject
5    to Commission review and approval, prior to a procurement
6    event.
7        (4) Request for proposals competitive procurement
8    process. The procurement administrator shall design and
9    issue a request for proposals to supply electricity in
10    accordance with each utility's procurement plan, as
11    approved by the Commission. The request for proposals shall
12    set forth a procedure for sealed, binding commitment
13    bidding with pay-as-bid settlement, and provision for
14    selection of bids on the basis of price.
15        (5) A plan for implementing contingencies in the event
16    of supplier default or failure of the procurement process
17    to fully meet the expected load requirement due to
18    insufficient supplier participation, Commission rejection
19    of results, or any other cause.
20            (i) Event of supplier default: In the event of
21        supplier default, the utility shall review the
22        contract of the defaulting supplier to determine if the
23        amount of supply is 200 megawatts or greater, and if
24        there are more than 60 days remaining of the contract
25        term. If both of these conditions are met, and the
26        default results in termination of the contract, the

 

 

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1        utility shall immediately notify the Illinois Power
2        Agency that a request for proposals must be issued to
3        procure replacement power, and the procurement
4        administrator shall run an additional procurement
5        event. If the contracted supply of the defaulting
6        supplier is less than 200 megawatts or there are less
7        than 60 days remaining of the contract term, the
8        utility shall procure power and energy from the
9        applicable regional transmission organization market,
10        including ancillary services, capacity, and day-ahead
11        or real time energy, or both, for the duration of the
12        contract term to replace the contracted supply;
13        provided, however, that if a needed product is not
14        available through the regional transmission
15        organization market it shall be purchased from the
16        wholesale market.
17            (ii) Failure of the procurement process to fully
18        meet the expected load requirement: If the procurement
19        process fails to fully meet the expected load
20        requirement due to insufficient supplier participation
21        or due to a Commission rejection of the procurement
22        results, the procurement administrator, the
23        procurement monitor, and the Commission staff shall
24        meet within 10 days to analyze potential causes of low
25        supplier interest or causes for the Commission
26        decision. If changes are identified that would likely

 

 

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1        result in increased supplier participation, or that
2        would address concerns causing the Commission to
3        reject the results of the prior procurement event, the
4        procurement administrator may implement those changes
5        and rerun the request for proposals process according
6        to a schedule determined by those parties and
7        consistent with Section 1-75 of the Illinois Power
8        Agency Act and this subsection. In any event, a new
9        request for proposals process shall be implemented by
10        the procurement administrator within 90 days after the
11        determination that the procurement process has failed
12        to fully meet the expected load requirement.
13            (iii) In all cases where there is insufficient
14        supply provided under contracts awarded through the
15        procurement process to fully meet the electric
16        utility's load requirement, the utility shall meet the
17        load requirement by procuring power and energy from the
18        applicable regional transmission organization market,
19        including ancillary services, capacity, and day-ahead
20        or real time energy or both; provided, however, that if
21        a needed product is not available through the regional
22        transmission organization market it shall be purchased
23        from the wholesale market.
24        (6) The procurement process described in this
25    subsection is exempt from the requirements of the Illinois
26    Procurement Code, pursuant to Section 20-10 of that Code.

 

 

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1    (f) Within 2 business days after opening the sealed bids,
2the procurement administrator shall submit a confidential
3report to the Commission. The report shall contain the results
4of the bidding for each of the products along with the
5procurement administrator's recommendation for the acceptance
6and rejection of bids based on the price benchmark criteria and
7other factors observed in the process. The procurement monitor
8also shall submit a confidential report to the Commission
9within 2 business days after opening the sealed bids. The
10report shall contain the procurement monitor's assessment of
11bidder behavior in the process as well as an assessment of the
12procurement administrator's compliance with the procurement
13process and rules. The Commission shall review the confidential
14reports submitted by the procurement administrator and
15procurement monitor, and shall accept or reject the
16recommendations of the procurement administrator within 2
17business days after receipt of the reports.
18    (g) Within 3 business days after the Commission decision
19approving the results of a procurement event, the utility shall
20enter into binding contractual arrangements with the winning
21suppliers using the standard form contracts; except that the
22utility shall not be required either directly or indirectly to
23execute the contracts if a tariff that is consistent with
24subsection (l) of this Section has not been approved and placed
25into effect for that utility.
26    (h) The names of the successful bidders and the load

 

 

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1weighted average of the winning bid prices for each contract
2type and for each contract term shall be made available to the
3public at the time of Commission approval of a procurement
4event. The Commission, the procurement monitor, the
5procurement administrator, the Illinois Power Agency, and all
6participants in the procurement process shall maintain the
7confidentiality of all other supplier and bidding information
8in a manner consistent with all applicable laws, rules,
9regulations, and tariffs. Confidential information, including
10the confidential reports submitted by the procurement
11administrator and procurement monitor pursuant to subsection
12(f) of this Section, shall not be made publicly available and
13shall not be discoverable by any party in any proceeding,
14absent a compelling demonstration of need, nor shall those
15reports be admissible in any proceeding other than one for law
16enforcement purposes.
17    (i) Within 2 business days after a Commission decision
18approving the results of a procurement event or such other date
19as may be required by the Commission from time to time, the
20utility shall file for informational purposes with the
21Commission its actual or estimated retail supply charges, as
22applicable, by customer supply group reflecting the costs
23associated with the procurement and computed in accordance with
24the tariffs filed pursuant to subsection (l) of this Section
25and approved by the Commission.
26    (j) Within 60 days following the effective date of this

 

 

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1amendatory Act, each electric utility that on December 31, 2005
2provided electric service to at least 100,000 customers in
3Illinois shall prepare and file with the Commission an initial
4procurement plan, which shall conform in all material respects
5to the requirements of the procurement plan set forth in
6subsection (b); provided, however, that the Illinois Power
7Agency Act shall not apply to the initial procurement plan
8prepared pursuant to this subsection. The initial procurement
9plan shall identify the portfolio of power and energy products
10to be procured and delivered for the period June 2008 through
11May 2009, and shall identify the proposed procurement
12administrator, who shall have the same experience and expertise
13as is required of a procurement administrator hired pursuant to
14Section 1-75 of the Illinois Power Agency Act. Copies of the
15procurement plan shall be posted and made publicly available on
16the Commission's website. The initial procurement plan may
17include contracts for renewable resources that extend beyond
18May 2009.
19        (i) Within 14 days following filing of the initial
20    procurement plan, any person may file a detailed objection
21    with the Commission contesting the procurement plan
22    submitted by the electric utility. All objections to the
23    electric utility's plan shall be specific, supported by
24    data or other detailed analyses. The electric utility may
25    file a response to any objections to its procurement plan
26    within 7 days after the date objections are due to be

 

 

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1    filed. Within 7 days after the date the utility's response
2    is due, the Commission shall determine whether a hearing is
3    necessary. If it determines that a hearing is necessary, it
4    shall require the hearing to be completed and issue an
5    order on the procurement plan within 60 days after the
6    filing of the procurement plan by the electric utility.
7        (ii) The order shall approve or modify the procurement
8    plan, approve an independent procurement administrator,
9    and approve or modify the electric utility's tariffs that
10    are proposed with the initial procurement plan. The
11    Commission shall approve the procurement plan if the
12    Commission determines that it will ensure adequate,
13    reliable, affordable, efficient, and environmentally
14    sustainable electric service at the lowest total cost over
15    time, taking into account any benefits of price stability.
16    (k) In order to promote price stability for residential and
17small commercial customers during the transition to
18competition in Illinois, and notwithstanding any other
19provision of this Act, each electric utility subject to this
20Section shall enter into one or more multi-year financial swap
21contracts that become effective on the effective date of this
22amendatory Act. These contracts may be executed with generators
23and power marketers, including affiliated interests of the
24electric utility. These contracts shall be for a term of no
25more than 5 years and shall, for each respective utility or for
26any Illinois electric utilities that are affiliated by virtue

 

 

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1of a common parent company and that are thereby considered a
2single electric utility for purposes of this subsection (k),
3not exceed in the aggregate 3,000 megawatts for any hour of the
4year. The contracts shall be financial contracts and not energy
5sales contracts. The contracts shall be executed as
6transactions under a negotiated master agreement based on the
7form of master agreement for financial swap contracts sponsored
8by the International Swaps and Derivatives Association, Inc.
9and shall be considered pre-existing contracts in the
10utilities' procurement plans for residential and small
11commercial customers. Costs incurred pursuant to a contract
12authorized by this subsection (k) shall be deemed prudently
13incurred and reasonable in amount and the electric utility
14shall be entitled to full cost recovery pursuant to the tariffs
15filed with the Commission.
16    (k-5) In order to promote price stability for residential
17and small commercial customers during the infrastructure
18investment program described in subsection (b) of Section
1916-108.5 of this Act, and notwithstanding any other provision
20of this Act or the Illinois Power Agency Act, for each electric
21utility that serves more than one million retail customers in
22Illinois, the Illinois Power Agency shall conduct a procurement
23event within 120 days after October 26, 2011 (the effective
24date of Public Act 97-616) and may procure contracts for energy
25and renewable energy credits for the period June 1, 2013
26through December 31, 2017 that satisfy the requirements of this

 

 

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1subsection (k-5), including the benchmarks described in this
2subsection. These contracts shall be entered into as the result
3of a competitive procurement event, and, to the extent that any
4provisions of this Section or the Illinois Power Agency Act do
5not conflict with this subsection (k-5), such provisions shall
6apply to the procurement event. The energy contracts shall be
7for 24 hour by 7 day supply over a term that runs from the first
8delivery year through December 31, 2017. For a utility that
9serves over 2 million customers, the energy contracts shall be
10multi-year with pricing escalating at 2.5% per annum. The
11energy contracts may be designed as financial swaps or may
12require physical delivery.
13    Within 30 days of October 26, 2011 (the effective date of
14Public Act 97-616), each such utility shall submit to the
15Agency updated load forecasts for the period June 1, 2013
16through December 31, 2017. The megawatt volume of the contracts
17shall be based on the updated load forecasts of the minimum
18monthly on-peak or off-peak average load requirements shown in
19the forecasts, taking into account any existing energy
20contracts in effect as well as the expected migration of the
21utility's customers to alternative retail electric suppliers.
22The renewable energy credit volume shall be based on the number
23of credits that would satisfy the requirements of subsection
24(c) of Section 1-75 of the Illinois Power Agency Act, subject
25to the rate impact caps and other provisions of subsection (c)
26of Section 1-75 of the Illinois Power Agency Act. The

 

 

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1evaluation of contract bids in the competitive procurement
2events for energy and for renewable energy credits shall
3incorporate price benchmarks set collaboratively by the
4Agency, the procurement administrator, the staff of the
5Commission, and the procurement monitor. If the contracts are
6swap contracts, then they shall be executed as transactions
7under a negotiated master agreement based on the form of master
8agreement for financial swap contracts sponsored by the
9International Swaps and Derivatives Association, Inc. Costs
10incurred pursuant to a contract authorized by this subsection
11(k-5) shall be deemed prudently incurred and reasonable in
12amount and the electric utility shall be entitled to full cost
13recovery pursuant to the tariffs filed with the Commission.
14    The cost of administering the procurement event described
15in this subsection (k-5) shall be paid by the winning supplier
16or suppliers to the procurement administrator through a
17supplier fee. In the event that there is no winning supplier
18for a particular utility, such utility will pay the procurement
19administrator for the costs associated with the procurement
20event, and those costs shall not be a recoverable expense.
21Nothing in this subsection (k-5) is intended to alter the
22recovery of costs for any other procurement event.
23    (l) An electric utility shall recover its costs incurred
24under this Section, including, but not limited to, the costs of
25procuring power and energy demand-response resources under
26this Section. The utility shall file with the initial

 

 

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1procurement plan its proposed tariffs through which its costs
2of procuring power that are incurred pursuant to a
3Commission-approved procurement plan and those other costs
4identified in this subsection (l), will be recovered. The
5tariffs shall include a formula rate or charge designed to pass
6through both the costs incurred by the utility in procuring a
7supply of electric power and energy for the applicable customer
8classes with no mark-up or return on the price paid by the
9utility for that supply, plus any just and reasonable costs
10that the utility incurs in arranging and providing for the
11supply of electric power and energy. The formula rate or charge
12shall also contain provisions that ensure that its application
13does not result in over or under recovery due to changes in
14customer usage and demand patterns, and that provide for the
15correction, on at least an annual basis, of any accounting
16errors that may occur. A utility shall recover through the
17tariff all reasonable costs incurred to implement or comply
18with any procurement plan that is developed and put into effect
19pursuant to Section 1-75 of the Illinois Power Agency Act and
20this Section, including any fees assessed by the Illinois Power
21Agency, costs associated with load balancing, and contingency
22plan costs. The electric utility shall also recover its full
23costs of procuring electric supply for which it contracted
24before the effective date of this Section in conjunction with
25the provision of full requirements service under fixed-price
26bundled service tariffs subsequent to December 31, 2006. All

 

 

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1such costs shall be deemed to have been prudently incurred. The
2pass-through tariffs that are filed and approved pursuant to
3this Section shall not be subject to review under, or in any
4way limited by, Section 16-111(i) of this Act.
5    (m) The Commission has the authority to adopt rules to
6carry out the provisions of this Section. For the public
7interest, safety, and welfare, the Commission also has
8authority to adopt rules to carry out the provisions of this
9Section on an emergency basis immediately following the
10effective date of this amendatory Act.
11    (n) Notwithstanding any other provision of this Act, any
12affiliated electric utilities that submit a single procurement
13plan covering their combined needs may procure for those
14combined needs in conjunction with that plan, and may enter
15jointly into power supply contracts, purchases, and other
16procurement arrangements, and allocate capacity and energy and
17cost responsibility therefor among themselves in proportion to
18their requirements.
19    (o) On or before June 1 of each year, the Commission shall
20hold an informal hearing for the purpose of receiving comments
21on the prior year's procurement process and any recommendations
22for change.
23    (p) An electric utility subject to this Section may propose
24to invest, lease, own, or operate an electric generation
25facility as part of its procurement plan, provided the utility
26demonstrates that such facility is the least-cost option to

 

 

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1provide electric service to eligible retail customers. If the
2facility is shown to be the least-cost option and is included
3in a procurement plan prepared in accordance with Section 1-75
4of the Illinois Power Agency Act and this Section, then the
5electric utility shall make a filing pursuant to Section 8-406
6of this Act, and may request of the Commission any statutory
7relief required thereunder. If the Commission grants all of the
8necessary approvals for the proposed facility, such supply
9shall thereafter be considered as a pre-existing contract under
10subsection (b) of this Section. The Commission shall in any
11order approving a proposal under this subsection specify how
12the utility will recover the prudently incurred costs of
13investing in, leasing, owning, or operating such generation
14facility through just and reasonable rates charged to eligible
15retail customers. Cost recovery for facilities included in the
16utility's procurement plan pursuant to this subsection shall
17not be subject to review under or in any way limited by the
18provisions of Section 16-111(i) of this Act. Nothing in this
19Section is intended to prohibit a utility from filing for a
20fuel adjustment clause as is otherwise permitted under Section
219-220 of this Act.
22(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;
2397-813, eff. 7-13-12.)
 
24    (Text of Section after amendment by P.A. 99-906)
25    Sec. 16-111.5. Provisions relating to procurement.

 

 

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1    (a) An electric utility that on December 31, 2005 served at
2least 100,000 customers in Illinois shall procure power and
3energy for its eligible retail customers in accordance with the
4applicable provisions set forth in Section 1-75 of the Illinois
5Power Agency Act and this Section. Beginning with the delivery
6year commencing on June 1, 2017, such electric utility shall
7also procure zero emission credits from zero emission
8facilities in accordance with the applicable provisions set
9forth in Section 1-75 of the Illinois Power Agency Act, and,
10for years beginning on or after June 1, 2017, the utility shall
11procure renewable energy resources in accordance with the
12applicable provisions set forth in Section 1-75 of the Illinois
13Power Agency Act and this Section. A small multi-jurisdictional
14electric utility that on December 31, 2005 served less than
15100,000 customers in Illinois may elect to procure power and
16energy for all or a portion of its eligible Illinois retail
17customers in accordance with the applicable provisions set
18forth in this Section and Section 1-75 of the Illinois Power
19Agency Act. This Section shall not apply to a small
20multi-jurisdictional utility until such time as a small
21multi-jurisdictional utility requests the Illinois Power
22Agency to prepare a procurement plan for its eligible retail
23customers. "Eligible retail customers" for the purposes of this
24Section means those retail customers that purchase power and
25energy from the electric utility under fixed-price bundled
26service tariffs, other than those retail customers whose

 

 

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1service is declared or deemed competitive under Section 16-113
2and those other customer groups specified in this Section,
3including self-generating customers, customers electing hourly
4pricing, or those customers who are otherwise ineligible for
5fixed-price bundled tariff service. For those customers that
6are excluded from the procurement plan's electric supply
7service requirements, and the utility shall procure any supply
8requirements, including capacity, ancillary services, and
9hourly priced energy, in the applicable markets as needed to
10serve those customers, provided that the utility may include in
11its procurement plan load requirements for the load that is
12associated with those retail customers whose service has been
13declared or deemed competitive pursuant to Section 16-113 of
14this Act to the extent that those customers are purchasing
15power and energy during one of the transition periods
16identified in subsection (b) of Section 16-113 of this Act.
17    (b) A procurement plan shall be prepared for each electric
18utility consistent with the applicable requirements of the
19Illinois Power Agency Act and this Section. For purposes of
20this Section, Illinois electric utilities that are affiliated
21by virtue of a common parent company are considered to be a
22single electric utility. Small multi-jurisdictional utilities
23may request a procurement plan for a portion of or all of its
24Illinois load. Each procurement plan shall analyze the
25projected balance of supply and demand for those retail
26customers to be included in the plan's electric supply service

 

 

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1requirements over a 5-year period, with the first planning year
2beginning on June 1 of the year following the year in which the
3plan is filed. The plan shall specifically identify the
4wholesale products to be procured following plan approval, and
5shall follow all the requirements set forth in the Public
6Utilities Act and all applicable State and federal laws,
7statutes, rules, or regulations, as well as Commission orders.
8Nothing in this Section precludes consideration of contracts
9longer than 5 years and related forecast data. Unless specified
10otherwise in this Section, in the procurement plan or in the
11implementing tariff, any procurement occurring in accordance
12with this plan shall be competitively bid through a request for
13proposals process. Approval and implementation of the
14procurement plan shall be subject to review and approval by the
15Commission according to the provisions set forth in this
16Section. A procurement plan shall include each of the following
17components:
18        (1) Hourly load analysis. This analysis shall include:
19            (i) multi-year historical analysis of hourly
20        loads;
21            (ii) switching trends and competitive retail
22        market analysis;
23            (iii) known or projected changes to future loads;
24        and
25            (iv) growth forecasts by customer class.
26        (2) Analysis of the impact of any demand side and

 

 

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1    renewable energy initiatives. This analysis shall include:
2            (i) the impact of demand response programs and
3        energy efficiency programs, both current and
4        projected; for small multi-jurisdictional utilities,
5        the impact of demand response and energy efficiency
6        programs approved pursuant to Section 8-408 of this
7        Act, both current and projected; and
8            (ii) supply side needs that are projected to be
9        offset by purchases of renewable energy resources, if
10        any.
11        (3) A plan for meeting the expected load requirements
12    that will not be met through preexisting contracts. This
13    plan shall include:
14            (i) definitions of the different Illinois retail
15        customer classes for which supply is being purchased;
16            (ii) the proposed mix of demand-response products
17        for which contracts will be executed during the next
18        year. For small multi-jurisdictional electric
19        utilities that on December 31, 2005 served fewer than
20        100,000 customers in Illinois, these shall be defined
21        as demand-response products offered in an energy
22        efficiency plan approved pursuant to Section 8-408 of
23        this Act. The cost-effective demand-response measures
24        shall be procured whenever the cost is lower than
25        procuring comparable capacity products, provided that
26        such products shall:

 

 

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1                (A) be procured by a demand-response provider
2            from those retail customers included in the plan's
3            electric supply service requirements;
4                (B) at least satisfy the demand-response
5            requirements of the regional transmission
6            organization market in which the utility's service
7            territory is located, including, but not limited
8            to, any applicable capacity or dispatch
9            requirements;
10                (C) provide for customers' participation in
11            the stream of benefits produced by the
12            demand-response products;
13                (D) provide for reimbursement by the
14            demand-response provider of the utility for any
15            costs incurred as a result of the failure of the
16            supplier of such products to perform its
17            obligations thereunder; and
18                (E) meet the same credit requirements as apply
19            to suppliers of capacity, in the applicable
20            regional transmission organization market;
21            (iii) monthly forecasted system supply
22        requirements, including expected minimum, maximum, and
23        average values for the planning period;
24            (iv) the proposed mix and selection of standard
25        wholesale products for which contracts will be
26        executed during the next year, separately or in

 

 

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1        combination, to meet that portion of its load
2        requirements not met through pre-existing contracts,
3        including but not limited to monthly 5 x 16 peak period
4        block energy, monthly off-peak wrap energy, monthly 7 x
5        24 energy, annual 5 x 16 energy, annual off-peak wrap
6        energy, annual 7 x 24 energy, monthly capacity, annual
7        capacity, peak load capacity obligations, capacity
8        purchase plan, and ancillary services;
9            (v) proposed term structures for each wholesale
10        product type included in the proposed procurement plan
11        portfolio of products; and
12            (vi) an assessment of the price risk, load
13        uncertainty, and other factors that are associated
14        with the proposed procurement plan; this assessment,
15        to the extent possible, shall include an analysis of
16        the following factors: contract terms, time frames for
17        securing products or services, fuel costs, weather
18        patterns, transmission costs, market conditions, and
19        the governmental regulatory environment; the proposed
20        procurement plan shall also identify alternatives for
21        those portfolio measures that are identified as having
22        significant price risk.
23        (4) Proposed procedures for balancing loads. The
24    procurement plan shall include, for load requirements
25    included in the procurement plan, the process for (i)
26    hourly balancing of supply and demand and (ii) the criteria

 

 

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1    for portfolio re-balancing in the event of significant
2    shifts in load.
3        (5) Long-Term Renewable Resources Procurement Plan.
4    The Agency shall prepare a long-term renewable resources
5    procurement plan for the procurement of renewable energy
6    credits under Sections 1-56 and 1-75 of the Illinois Power
7    Agency Act for delivery beginning in the 2017 delivery
8    year.
9            (i) The initial long-term renewable resources
10        procurement plan and all subsequent revisions shall be
11        subject to review and approval by the Commission. For
12        the purposes of this Section, "delivery year" has the
13        same meaning as in Section 1-10 of the Illinois Power
14        Agency Act. For purposes of this Section, "Agency"
15        shall mean the Illinois Power Agency.
16            (ii) The long-term renewable resources planning
17        process shall be conducted as follows:
18                (A) Electric utilities shall provide a range
19            of load forecasts to the Illinois Power Agency
20            within 45 days of the Agency's request for
21            forecasts, which request shall specify the length
22            and conditions for the forecasts including, but
23            not limited to, the quantity of distributed
24            generation expected to be interconnected for each
25            year.
26                (B) The Agency shall publish for comment the

 

 

SB1610- 34 -LRB100 06863 RJF 16912 b

1            initial long-term renewable resources procurement
2            plan no later than 120 days after the effective
3            date of this amendatory Act of the 99th General
4            Assembly and shall review, and may revise, the plan
5            at least every 2 years thereafter. To the extent
6            practicable, the Agency shall review and propose
7            any revisions to the long-term renewable energy
8            resources procurement plan in conjunction with the
9            Agency's other planning and approval processes
10            conducted under this Section. The initial
11            long-term renewable resources procurement plan
12            shall:
13                    (aa) Identify the procurement programs and
14                competitive procurement events consistent with
15                the applicable requirements of the Illinois
16                Power Agency Act and shall be designed to
17                achieve the goals set forth in subsection (c)
18                of Section 1-75 of that Act.
19                    (bb) Include a schedule for procurements
20                for renewable energy credits from
21                utility-scale wind projects, utility-scale
22                solar projects, and brownfield site
23                photovoltaic projects consistent with
24                subparagraph (G) of paragraph (1) of
25                subsection (c) of Section 1-75 of the Illinois
26                Power Agency Act.

 

 

SB1610- 35 -LRB100 06863 RJF 16912 b

1                    (cc) Identify the process whereby the
2                Agency will submit to the Commission for review
3                and approval the proposed contracts to
4                implement the programs required by such plan.
5                Copies of the initial long-term renewable
6            resources procurement plan and all subsequent
7            revisions shall be posted and made publicly
8            available on the Agency's and Commission's
9            websites, and copies shall also be provided to each
10            affected electric utility. An affected utility and
11            other interested parties shall have 45 days
12            following the date of posting to provide comment to
13            the Agency on the initial long-term renewable
14            resources procurement plan and all subsequent
15            revisions. All comments submitted to the Agency
16            shall be specific, supported by data or other
17            detailed analyses, and, if objecting to all or a
18            portion of the procurement plan, accompanied by
19            specific alternative wording or proposals. All
20            comments shall be posted on the Agency's and
21            Commission's websites. During this 45-day comment
22            period, the Agency shall hold at least one public
23            hearing within each utility's service area that is
24            subject to the requirements of this paragraph (5)
25            for the purpose of receiving public comment.
26            Within 21 days following the end of the 45-day

 

 

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1            review period, the Agency may revise the long-term
2            renewable resources procurement plan based on the
3            comments received and shall file the plan with the
4            Commission for review and approval.
5                (C) Within 14 days after the filing of the
6            initial long-term renewable resources procurement
7            plan or any subsequent revisions, any person
8            objecting to the plan may file an objection with
9            the Commission. Within 21 days after the filing of
10            the plan, the Commission shall determine whether a
11            hearing is necessary. The Commission shall enter
12            its order confirming or modifying the initial
13            long-term renewable resources procurement plan or
14            any subsequent revisions within 120 days after the
15            filing of the plan by the Illinois Power Agency.
16                (D) The Commission shall approve the initial
17            long-term renewable resources procurement plan and
18            any subsequent revisions, including expressly the
19            forecast used in the plan and taking into account
20            that funding will be limited to the amount of
21            revenues actually collected by the utilities, if
22            the Commission determines that the plan will
23            reasonably and prudently accomplish the
24            requirements of Section 1-56 and subsection (c) of
25            Section 1-75 of the Illinois Power Agency Act. The
26            Commission shall also approve the process for the

 

 

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1            submission, review, and approval of the proposed
2            contracts to procure renewable energy credits or
3            implement the programs authorized by the
4            Commission pursuant to a long-term renewable
5            resources procurement plan approved under this
6            Section.
7            (iii) The Agency or third parties contracted by the
8        Agency shall implement all programs authorized by the
9        Commission in an approved long-term renewable
10        resources procurement plan without further review and
11        approval by the Commission. Third parties shall not
12        begin implementing any programs or receive any payment
13        under this Section until the Commission has approved
14        the contract or contracts under the process authorized
15        by the Commission in item (D) of subparagraph (ii) of
16        paragraph (5) of this subsection (b) and the third
17        party and the Agency or utility, as applicable, have
18        executed the contract. For those renewable energy
19        credits subject to procurement through a competitive
20        bid process under the plan or under the initial forward
21        procurements for wind and solar resources described in
22        subparagraph (G) of paragraph (1) of subsection (c) of
23        Section 1-75 of the Illinois Power Agency Act, the
24        Agency shall follow the procurement process specified
25        in the provisions relating to electricity procurement
26        in subsections (e) through (i) of this Section.

 

 

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1            (iv) An electric utility shall recover its costs
2        associated with the procurement of renewable energy
3        credits under this Section through an automatic
4        adjustment clause tariff under subsection (k) of
5        Section 16-108 of this Act. A utility shall not be
6        required to advance any payment or pay any amounts
7        under this Section that exceed the actual amount of
8        revenues collected by the utility under paragraph (6)
9        of subsection (c) of Section 1-75 of the Illinois Power
10        Agency Act and subsection (k) of Section 16-108 of this
11        Act, and contracts executed under this Section shall
12        expressly incorporate this limitation.
13            (v) For the public interest, safety, and welfare,
14        the Agency and the Commission may adopt rules to carry
15        out the provisions of this Section on an emergency
16        basis immediately following the effective date of this
17        amendatory Act of the 99th General Assembly.
18            (vi) On or before July 1 of each year, the
19        Commission shall hold an informal hearing for the
20        purpose of receiving comments on the prior year's
21        procurement process and any recommendations for
22        change.
23    (c) The procurement process set forth in Section 1-75 of
24the Illinois Power Agency Act and subsection (e) of this
25Section shall be administered by a procurement administrator
26and monitored by a procurement monitor.

 

 

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1        (1) The procurement administrator shall:
2            (i) design the final procurement process in
3        accordance with Section 1-75 of the Illinois Power
4        Agency Act and subsection (e) of this Section following
5        Commission approval of the procurement plan;
6            (ii) develop benchmarks in accordance with
7        subsection (e)(3) to be used to evaluate bids; these
8        benchmarks shall be submitted to the Commission for
9        review and approval on a confidential basis prior to
10        the procurement event;
11            (iii) serve as the interface between the electric
12        utility and suppliers;
13            (iv) manage the bidder pre-qualification and
14        registration process;
15            (v) obtain the electric utilities' agreement to
16        the final form of all supply contracts and credit
17        collateral agreements;
18            (vi) administer the request for proposals process;
19            (vii) have the discretion to negotiate to
20        determine whether bidders are willing to lower the
21        price of bids that meet the benchmarks approved by the
22        Commission; any post-bid negotiations with bidders
23        shall be limited to price only and shall be completed
24        within 24 hours after opening the sealed bids and shall
25        be conducted in a fair and unbiased manner; in
26        conducting the negotiations, there shall be no

 

 

SB1610- 40 -LRB100 06863 RJF 16912 b

1        disclosure of any information derived from proposals
2        submitted by competing bidders; if information is
3        disclosed to any bidder, it shall be provided to all
4        competing bidders;
5            (viii) maintain confidentiality of supplier and
6        bidding information in a manner consistent with all
7        applicable laws, rules, regulations, and tariffs;
8            (ix) submit a confidential report to the
9        Commission recommending acceptance or rejection of
10        bids;
11            (x) notify the utility of contract counterparties
12        and contract specifics; and
13            (xi) administer related contingency procurement
14        events.
15        (2) The procurement monitor, who shall be retained by
16    the Commission, shall:
17            (i) monitor interactions among the procurement
18        administrator, suppliers, and utility;
19            (ii) monitor and report to the Commission on the
20        progress of the procurement process;
21            (iii) provide an independent confidential report
22        to the Commission regarding the results of the
23        procurement event;
24            (iv) assess compliance with the procurement plans
25        approved by the Commission for each utility that on
26        December 31, 2005 provided electric service to at least

 

 

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1        100,000 customers in Illinois and for each small
2        multi-jurisdictional utility that on December 31, 2005
3        served less than 100,000 customers in Illinois;
4            (v) preserve the confidentiality of supplier and
5        bidding information in a manner consistent with all
6        applicable laws, rules, regulations, and tariffs;
7            (vi) provide expert advice to the Commission and
8        consult with the procurement administrator regarding
9        issues related to procurement process design, rules,
10        protocols, and policy-related matters; and
11            (vii) consult with the procurement administrator
12        regarding the development and use of benchmark
13        criteria, standard form contracts, credit policies,
14        and bid documents.
15    (d) Except as provided in subsection (j), the planning
16process shall be conducted as follows:
17        (1) Beginning in 2008, each Illinois utility procuring
18    power pursuant to this Section shall annually provide a
19    range of load forecasts to the Illinois Power Agency by
20    July 15 of each year, or such other date as may be required
21    by the Commission or Agency. The load forecasts shall cover
22    the 5-year procurement planning period for the next
23    procurement plan and shall include hourly data
24    representing a high-load, low-load, and expected-load
25    scenario for the load of those retail customers included in
26    the plan's electric supply service requirements. The

 

 

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1    utility shall provide supporting data and assumptions for
2    each of the scenarios.
3        (2) Beginning in 2008, the Illinois Power Agency shall
4    prepare a procurement plan by August 15th of each year, or
5    such other date as may be required by the Commission. The
6    procurement plan shall identify the portfolio of
7    demand-response and power and energy products to be
8    procured. Cost-effective demand-response measures shall be
9    procured as set forth in item (iii) of subsection (b) of
10    this Section. Copies of the procurement plan shall be
11    posted and made publicly available on the Agency's and
12    Commission's websites, and copies shall also be provided to
13    each affected electric utility. An affected utility shall
14    have 30 days following the date of posting to provide
15    comment to the Agency on the procurement plan. Other
16    interested entities also may comment on the procurement
17    plan. All comments submitted to the Agency shall be
18    specific, supported by data or other detailed analyses,
19    and, if objecting to all or a portion of the procurement
20    plan, accompanied by specific alternative wording or
21    proposals. All comments shall be posted on the Agency's and
22    Commission's websites. During this 30-day comment period,
23    the Agency shall hold at least one public hearing within
24    each utility's service area for the purpose of receiving
25    public comment on the procurement plan. Within 14 days
26    following the end of the 30-day review period, the Agency

 

 

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1    shall revise the procurement plan as necessary based on the
2    comments received and file the procurement plan with the
3    Commission and post the procurement plan on the websites.
4        (3) Within 5 days after the filing of the procurement
5    plan, any person objecting to the procurement plan shall
6    file an objection with the Commission. Within 10 days after
7    the filing, the Commission shall determine whether a
8    hearing is necessary. The Commission shall enter its order
9    confirming or modifying the procurement plan within 90 days
10    after the filing of the procurement plan by the Illinois
11    Power Agency.
12        (4) The Commission shall approve the procurement plan,
13    including expressly the forecast used in the procurement
14    plan, if the Commission determines that it will ensure
15    adequate, reliable, affordable, efficient, and
16    environmentally sustainable electric service at the lowest
17    total cost over time, taking into account any benefits of
18    price stability.
19    (e) The procurement process shall include each of the
20following components:
21        (1) Solicitation, pre-qualification, and registration
22    of bidders. The procurement administrator shall
23    disseminate information to potential bidders to promote a
24    procurement event, notify potential bidders that the
25    procurement administrator may enter into a post-bid price
26    negotiation with bidders that meet the applicable

 

 

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1    benchmarks, provide supply requirements, and otherwise
2    explain the competitive procurement process. In addition
3    to such other publication as the procurement administrator
4    determines is appropriate, this information shall be
5    posted on the Illinois Power Agency's and the Commission's
6    websites. The procurement administrator shall also
7    administer the prequalification process, including
8    evaluation of credit worthiness, compliance with
9    procurement rules, and agreement to the standard form
10    contract developed pursuant to paragraph (2) of this
11    subsection (e). The procurement administrator shall then
12    identify and register bidders to participate in the
13    procurement event.
14        (2) Standard contract forms and credit terms and
15    instruments. The procurement administrator, in
16    consultation with the utilities, the Commission, and other
17    interested parties and subject to Commission oversight,
18    shall develop and provide standard contract forms for the
19    supplier contracts that meet generally accepted industry
20    practices. Standard credit terms and instruments that meet
21    generally accepted industry practices shall be similarly
22    developed. The procurement administrator shall make
23    available to the Commission all written comments it
24    receives on the contract forms, credit terms, or
25    instruments. If the procurement administrator cannot reach
26    agreement with the applicable electric utility as to the

 

 

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1    contract terms and conditions, the procurement
2    administrator must notify the Commission of any disputed
3    terms and the Commission shall resolve the dispute. The
4    terms of the contracts shall not be subject to negotiation
5    by winning bidders, and the bidders must agree to the terms
6    of the contract in advance so that winning bids are
7    selected solely on the basis of price.
8        (3) Establishment of a market-based price benchmark.
9    As part of the development of the procurement process, the
10    procurement administrator, in consultation with the
11    Commission staff, Agency staff, and the procurement
12    monitor, shall establish benchmarks for evaluating the
13    final prices in the contracts for each of the products that
14    will be procured through the procurement process. The
15    benchmarks shall be based on price data for similar
16    products for the same delivery period and same delivery
17    hub, or other delivery hubs after adjusting for that
18    difference. The price benchmarks may also be adjusted to
19    take into account differences between the information
20    reflected in the underlying data sources and the specific
21    products and procurement process being used to procure
22    power for the Illinois utilities. The benchmarks shall be
23    confidential but shall be provided to, and will be subject
24    to Commission review and approval, prior to a procurement
25    event.
26        (4) Request for proposals competitive procurement

 

 

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1    process. The procurement administrator shall design and
2    issue a request for proposals to supply electricity in
3    accordance with each utility's procurement plan, as
4    approved by the Commission. The request for proposals shall
5    set forth a procedure for sealed, binding commitment
6    bidding with pay-as-bid settlement, and provision for
7    selection of bids on the basis of price.
8        (5) A plan for implementing contingencies in the event
9    of supplier default or failure of the procurement process
10    to fully meet the expected load requirement due to
11    insufficient supplier participation, Commission rejection
12    of results, or any other cause.
13            (i) Event of supplier default: In the event of
14        supplier default, the utility shall review the
15        contract of the defaulting supplier to determine if the
16        amount of supply is 200 megawatts or greater, and if
17        there are more than 60 days remaining of the contract
18        term. If both of these conditions are met, and the
19        default results in termination of the contract, the
20        utility shall immediately notify the Illinois Power
21        Agency that a request for proposals must be issued to
22        procure replacement power, and the procurement
23        administrator shall run an additional procurement
24        event. If the contracted supply of the defaulting
25        supplier is less than 200 megawatts or there are less
26        than 60 days remaining of the contract term, the

 

 

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1        utility shall procure power and energy from the
2        applicable regional transmission organization market,
3        including ancillary services, capacity, and day-ahead
4        or real time energy, or both, for the duration of the
5        contract term to replace the contracted supply;
6        provided, however, that if a needed product is not
7        available through the regional transmission
8        organization market it shall be purchased from the
9        wholesale market.
10            (ii) Failure of the procurement process to fully
11        meet the expected load requirement: If the procurement
12        process fails to fully meet the expected load
13        requirement due to insufficient supplier participation
14        or due to a Commission rejection of the procurement
15        results, the procurement administrator, the
16        procurement monitor, and the Commission staff shall
17        meet within 10 days to analyze potential causes of low
18        supplier interest or causes for the Commission
19        decision. If changes are identified that would likely
20        result in increased supplier participation, or that
21        would address concerns causing the Commission to
22        reject the results of the prior procurement event, the
23        procurement administrator may implement those changes
24        and rerun the request for proposals process according
25        to a schedule determined by those parties and
26        consistent with Section 1-75 of the Illinois Power

 

 

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1        Agency Act and this subsection. In any event, a new
2        request for proposals process shall be implemented by
3        the procurement administrator within 90 days after the
4        determination that the procurement process has failed
5        to fully meet the expected load requirement.
6            (iii) In all cases where there is insufficient
7        supply provided under contracts awarded through the
8        procurement process to fully meet the electric
9        utility's load requirement, the utility shall meet the
10        load requirement by procuring power and energy from the
11        applicable regional transmission organization market,
12        including ancillary services, capacity, and day-ahead
13        or real time energy, or both; provided, however, that
14        if a needed product is not available through the
15        regional transmission organization market it shall be
16        purchased from the wholesale market.
17        (6) The procurement process described in this
18    subsection is exempt from the requirements of the Illinois
19    Procurement Code, pursuant to Section 20-10 of that Code.
20    (f) Within 2 business days after opening the sealed bids,
21the procurement administrator shall submit a confidential
22report to the Commission. The report shall contain the results
23of the bidding for each of the products along with the
24procurement administrator's recommendation for the acceptance
25and rejection of bids based on the price benchmark criteria and
26other factors observed in the process. The procurement monitor

 

 

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1also shall submit a confidential report to the Commission
2within 2 business days after opening the sealed bids. The
3report shall contain the procurement monitor's assessment of
4bidder behavior in the process as well as an assessment of the
5procurement administrator's compliance with the procurement
6process and rules. The Commission shall review the confidential
7reports submitted by the procurement administrator and
8procurement monitor, and shall accept or reject the
9recommendations of the procurement administrator within 2
10business days after receipt of the reports.
11    (g) Within 3 business days after the Commission decision
12approving the results of a procurement event, the utility shall
13enter into binding contractual arrangements with the winning
14suppliers using the standard form contracts; except that the
15utility shall not be required either directly or indirectly to
16execute the contracts if a tariff that is consistent with
17subsection (l) of this Section has not been approved and placed
18into effect for that utility.
19    (h) The names of the successful bidders and the load
20weighted average of the winning bid prices for each contract
21type and for each contract term shall be made available to the
22public at the time of Commission approval of a procurement
23event. The Commission, the procurement monitor, the
24procurement administrator, the Illinois Power Agency, and all
25participants in the procurement process shall maintain the
26confidentiality of all other supplier and bidding information

 

 

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1in a manner consistent with all applicable laws, rules,
2regulations, and tariffs. Confidential information, including
3the confidential reports submitted by the procurement
4administrator and procurement monitor pursuant to subsection
5(f) of this Section, shall not be made publicly available and
6shall not be discoverable by any party in any proceeding,
7absent a compelling demonstration of need, nor shall those
8reports be admissible in any proceeding other than one for law
9enforcement purposes.
10    (i) Within 2 business days after a Commission decision
11approving the results of a procurement event or such other date
12as may be required by the Commission from time to time, the
13utility shall file for informational purposes with the
14Commission its actual or estimated retail supply charges, as
15applicable, by customer supply group reflecting the costs
16associated with the procurement and computed in accordance with
17the tariffs filed pursuant to subsection (l) of this Section
18and approved by the Commission.
19    (j) Within 60 days following August 28, 2007 (the effective
20date of Public Act 95-481), each electric utility that on
21December 31, 2005 provided electric service to at least 100,000
22customers in Illinois shall prepare and file with the
23Commission an initial procurement plan, which shall conform in
24all material respects to the requirements of the procurement
25plan set forth in subsection (b); provided, however, that the
26Illinois Power Agency Act shall not apply to the initial

 

 

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1procurement plan prepared pursuant to this subsection. The
2initial procurement plan shall identify the portfolio of power
3and energy products to be procured and delivered for the period
4June 2008 through May 2009, and shall identify the proposed
5procurement administrator, who shall have the same experience
6and expertise as is required of a procurement administrator
7hired pursuant to Section 1-75 of the Illinois Power Agency
8Act. Copies of the procurement plan shall be posted and made
9publicly available on the Commission's website. The initial
10procurement plan may include contracts for renewable resources
11that extend beyond May 2009.
12        (i) Within 14 days following filing of the initial
13    procurement plan, any person may file a detailed objection
14    with the Commission contesting the procurement plan
15    submitted by the electric utility. All objections to the
16    electric utility's plan shall be specific, supported by
17    data or other detailed analyses. The electric utility may
18    file a response to any objections to its procurement plan
19    within 7 days after the date objections are due to be
20    filed. Within 7 days after the date the utility's response
21    is due, the Commission shall determine whether a hearing is
22    necessary. If it determines that a hearing is necessary, it
23    shall require the hearing to be completed and issue an
24    order on the procurement plan within 60 days after the
25    filing of the procurement plan by the electric utility.
26        (ii) The order shall approve or modify the procurement

 

 

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1    plan, approve an independent procurement administrator,
2    and approve or modify the electric utility's tariffs that
3    are proposed with the initial procurement plan. The
4    Commission shall approve the procurement plan if the
5    Commission determines that it will ensure adequate,
6    reliable, affordable, efficient, and environmentally
7    sustainable electric service at the lowest total cost over
8    time, taking into account any benefits of price stability.
9    (k) (Blank).
10    (k-5) (Blank).
11    (l) An electric utility shall recover its costs incurred
12under this Section, including, but not limited to, the costs of
13procuring power and energy demand-response resources under
14this Section. The utility shall file with the initial
15procurement plan its proposed tariffs through which its costs
16of procuring power that are incurred pursuant to a
17Commission-approved procurement plan and those other costs
18identified in this subsection (l), will be recovered. The
19tariffs shall include a formula rate or charge designed to pass
20through both the costs incurred by the utility in procuring a
21supply of electric power and energy for the applicable customer
22classes with no mark-up or return on the price paid by the
23utility for that supply, plus any just and reasonable costs
24that the utility incurs in arranging and providing for the
25supply of electric power and energy. The formula rate or charge
26shall also contain provisions that ensure that its application

 

 

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1does not result in over or under recovery due to changes in
2customer usage and demand patterns, and that provide for the
3correction, on at least an annual basis, of any accounting
4errors that may occur. A utility shall recover through the
5tariff all reasonable costs incurred to implement or comply
6with any procurement plan that is developed and put into effect
7pursuant to Section 1-75 of the Illinois Power Agency Act and
8this Section, including any fees assessed by the Illinois Power
9Agency, costs associated with load balancing, and contingency
10plan costs. The electric utility shall also recover its full
11costs of procuring electric supply for which it contracted
12before the effective date of this Section in conjunction with
13the provision of full requirements service under fixed-price
14bundled service tariffs subsequent to December 31, 2006. All
15such costs shall be deemed to have been prudently incurred. The
16pass-through tariffs that are filed and approved pursuant to
17this Section shall not be subject to review under, or in any
18way limited by, Section 16-111(i) of this Act. All of the costs
19incurred by the electric utility associated with the purchase
20of zero emission credits in accordance with subsection (d-5) of
21Section 1-75 of the Illinois Power Agency Act and, beginning
22June 1, 2017, all of the costs incurred by the electric utility
23associated with the purchase of renewable energy resources in
24accordance with Sections 1-56 and 1-75 of the Illinois Power
25Agency Act, shall be recovered through the electric utility's
26tariffed charges applicable to all of its retail customers, as

 

 

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1specified in subsection (k) of Section 16-108 of this Act, and
2shall not be recovered through the electric utility's tariffed
3charges for electric power and energy supply to its eligible
4retail customers.
5    (m) The Commission has the authority to adopt rules to
6carry out the provisions of this Section. For the public
7interest, safety, and welfare, the Commission also has
8authority to adopt rules to carry out the provisions of this
9Section on an emergency basis immediately following August 28,
102007 (the effective date of Public Act 95-481).
11    (n) Notwithstanding any other provision of this Act, any
12affiliated electric utilities that submit a single procurement
13plan covering their combined needs may procure for those
14combined needs in conjunction with that plan, and may enter
15jointly into power supply contracts, purchases, and other
16procurement arrangements, and allocate capacity and energy and
17cost responsibility therefor among themselves in proportion to
18their requirements.
19    (o) On or before June 1 of each year, the Commission shall
20hold an informal hearing for the purpose of receiving comments
21on the prior year's procurement process and any recommendations
22for change.
23    (p) An electric utility subject to this Section may propose
24to invest, lease, own, or operate an electric generation
25facility as part of its procurement plan, provided the utility
26demonstrates that such facility is the least-cost option to

 

 

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1provide electric service to those retail customers included in
2the plan's electric supply service requirements. If the
3facility is shown to be the least-cost option and is included
4in a procurement plan prepared in accordance with Section 1-75
5of the Illinois Power Agency Act and this Section, then the
6electric utility shall make a filing pursuant to Section 8-406
7of this Act, and may request of the Commission any statutory
8relief required thereunder. If the Commission grants all of the
9necessary approvals for the proposed facility, such supply
10shall thereafter be considered as a pre-existing contract under
11subsection (b) of this Section. The Commission shall in any
12order approving a proposal under this subsection specify how
13the utility will recover the prudently incurred costs of
14investing in, leasing, owning, or operating such generation
15facility through just and reasonable rates charged to those
16retail customers included in the plan's electric supply service
17requirements. Cost recovery for facilities included in the
18utility's procurement plan pursuant to this subsection shall
19not be subject to review under or in any way limited by the
20provisions of Section 16-111(i) of this Act. Nothing in this
21Section is intended to prohibit a utility from filing for a
22fuel adjustment clause as is otherwise permitted under Section
239-220 of this Act.
24    (q) If the Illinois Power Agency filed with the Commission,
25under Section 16-111.5 of this Act, its proposed procurement
26plan for the period commencing June 1, 2017, and the Commission

 

 

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1has not yet entered its final order approving the plan on or
2before the effective date of this amendatory Act of the 99th
3General Assembly, then the Illinois Power Agency shall file a
4notice of withdrawal with the Commission, after the effective
5date of this amendatory Act of the 99th General Assembly, to
6withdraw the proposed procurement of renewable energy
7resources to be approved under the plan, other than the
8procurement of renewable energy credits from distributed
9renewable energy generation devices using funds previously
10collected from electric utilities' retail customers that take
11service pursuant to electric utilities' hourly pricing tariff
12or tariffs and, for an electric utility that serves less than
13100,000 retail customers in the State, other than the
14procurement of renewable energy credits from distributed
15renewable energy generation devices. Upon receipt of the
16notice, the Commission shall enter an order that approves the
17withdrawal of the proposed procurement of renewable energy
18resources from the plan. The initially proposed procurement of
19renewable energy resources shall not be approved or be the
20subject of any further hearing, investigation, proceeding, or
21order of any kind.
22    This amendatory Act of the 99th General Assembly preempts
23and supersedes any order entered by the Commission that
24approved the Illinois Power Agency's procurement plan for the
25period commencing June 1, 2017, to the extent it is
26inconsistent with the provisions of this amendatory Act of the

 

 

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199th General Assembly. To the extent any previously entered
2order approved the procurement of renewable energy resources,
3the portion of that order approving the procurement shall be
4void, other than the procurement of renewable energy credits
5from distributed renewable energy generation devices using
6funds previously collected from electric utilities' retail
7customers that take service under electric utilities' hourly
8pricing tariff or tariffs and, for an electric utility that
9serves less than 100,000 retail customers in the State, other
10than the procurement of renewable energy credits for
11distributed renewable energy generation devices.
12    (r) The Commission shall quarterly review the price of any
13zero emission credits procured by the Illinois Power Agency
14under subsection (d-5) of Section 1-75 of the Illinois Power
15Agency Act to ensure no more than the unrecovered costs of the
16plants based on market sales and pricing is recovered. If the
17plant shows a profit for more than one year, the zero emission
18credit program shall be rebid and the Illinois Power Agency
19shall have the authority to expand the definition to include
20additional Illinois-based zero emission generation sources as
21eligible for the program, including an annual procurement
22process. Additionally, the Commission, in its review, shall
23ensure any qualifying nuclear plant is not receiving excessive
24earnings through its zero emission compensation under this
25Section, and if a plant is found to have received excessive
26earnings due to the zero emission credit pricing, that plant

 

 

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1shall have its zero emission credit qualification revoked.
2Nothing prevents the Commission from initiating a docketed
3proceeding to reconcile zero emission credit payments with
4allowed costs identified under this Section.
5(Source: P.A. 99-906, eff. 6-1-17.)
 
6    Section 95. No acceleration or delay. Where this Act makes
7changes in a statute that is represented in this Act by text
8that is not yet or no longer in effect (for example, a Section
9represented by multiple versions), the use of that text does
10not accelerate or delay the taking effect of (i) the changes
11made by this Act or (ii) provisions derived from any other
12Public Act.
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law or on the date the provisions of Public Act 99-906
15that amend Section 16-111.5 of the Public Utilities Act take
16effect, whichever is later.