HB1510ham001 95TH GENERAL ASSEMBLY

Least Cost Power Procurement Committee

Filed: 3/22/2007

09500HB1510ham001 LRB095 10692 MJR 32280 a

AMENDMENT TO HOUSE BILL 1510

AMENDMENT NO. ______. Amend House Bill 1510 by replacing everything after the enacting clause with the following:

"Section 5. The Public Utilities Act is amended by adding Section 16-103A as follows:

(220 ILCS 5/16-103A new)

Sec. 16-103A. Provision of standard electric service after the mandatory transition period.

(a) Beginning on the effective date of this amendatory Act of the 95th General Assembly, residential and small commercial customers shall be provided standard electric service. Standard electric service shall consist of an electricity supply service priced according to the policies adopted by this Act.

(b) Any residential retail customer or small commercial retail customer that is not otherwise being served by an alternative retail electric supplier shall be automatically provided with standard electric service. Any residential retail or small commercial retail customer served by an alternative retail electric supplier shall have the option to select standard electric service at any time.

(c) The terms and conditions for standard electric service shall at a minimum reflect the consumer protection programs and policies governing application for service, deposit rules, billing, credit, and collection practices in Chapter 280 of the Commission's rules.

(d) Each electric utility shall plan, procure, and provide standard electric service pursuant to a procurement plan for electric supply approved by the Commission after notice and opportunity for public hearing.

(e) The price for standard electric service shall be based on the underlying actual and incremental just and reasonable costs incurred by the electric utility to plan, procure, and provide this service. Standard electric service shall not be structured or priced to stimulate or force the development of a competitive retail market. Rather, this service shall operate as a benchmark or price to compare against which alternative retail electric suppliers may market their services.

(f) Standard electric service shall be billed and collected by the electric utility in a bill format that identifies the unbundled price for standard electric service, which format shall by approved by the Commission.

(g) Within 30 days of the effective date of this amendatory Act of the 95th General Assembly, the Commission shall require each electric utility to undertake the development of and submit a procurement plan for standard electric service within 6 months of the effective date of this amendatory Act of the 95th General Assembly. The procurement plan shall reflect a minimum 10-year planning and acquisition period. The procurement plan shall be updated annually. Any Standard Electric Service procurement plan shall comply with the following requirements:

(1) The plan shall recommend a portfolio that is most likely to provide the lowest total price with reasonable price stability over the term of the plan so as to avoid unusual, anomalous or excessive prices.

(2) The plan shall reflect a diversity of electric supply and cost-effective demand reduction contracts and services to be procured in an overlapping pattern of fixed periods at such times and in such a manner that are likely to produce just, reasonable, and reasonably stable prices over the term of the plan.

(3) The electric utility shall systematically evaluate and have the authority to propose short-term and long-term contracts for the procurement of electric supply; own and operate facilities for the generation of electric supply; make investments in demand side resources; and take such other actions as approved by the Commission to diversify the standard offer service portfolio and assure compliance with the statutory goals and objectives for this service.

(4) The recommended portfolio shall minimize the reliance on short term or spot market transactions consistent with a reasonable assessment of risk with respect to both price and generation supply availability during the term of the plan.

(5) The plan shall contain a mechanism to rely on annual price changes for standard electric service that reflects the actual changes in price of the various components of the entire portfolio and minimize, to the extent reasonable, the need for reconciliation of costs associated with price changes in the entire portfolio on an annual basis.

(h) The electric utility may recover the actual and incremental costs incurred to manage the standard electric service portfolio. The electric utility may propose an incentive mechanism that establishes a procurement benchmark or benchmarks that relies upon quantifiable objectives and standards, and that balances risks and rewards for the electric utility in meeting the portfolio management goals and objectives as set forth in the approved procurement plan.

(i) To the extent possible, the electric utility shall rely on competitive methods of acquiring the products, contracts, and resources that are identified in its procurement plan for standard electric service. The Commission shall approve any proposed method or methods of competitive acquisition as part of its review of the electric utility's proposed standard offer service procurement plan.

(j) Standard electric service shall be available to residential and small commercial customers at any time and without the imposition of an additional fee or charge for switching to the service. However, the Commission may adopt minimum terms of service (not to exceed 12 months) or additional fees for switching to alternative retail electric suppliers if the Commission finds, after notice and opportunity for public hearing and comment, that a significant number of residential or small commercial customers have switched or are likely to switch in the near future to alternative retail electric suppliers or aggregators, thus increasing the risk associated with the provision of standard electric service under stable prices for the remaining customers. Any party that proposes to impose minimum terms of service or switching fees on residential or small commercial customers shall demonstrate that switching activity by such customers has or is likely to result in an increase in total costs for standard electric service for that class of customers that exceeds 1% on an annual basis.

(k) For purposes of this Section, "small commercial customer" means a group of non-residential customers that are being served by a public utility under a commercial rate and schedule and that are not required to have a demand meter or reflect demand charges in their rate schedules.

Section 99. Effective date. This Act takes effect upon becoming law.".