Full Text of SB1608 97th General Assembly
SB1608eng 97TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning utilities.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Public Utilities Act is amended by changing | 5 | | Section 16-111.5 as follows: | 6 | | (220 ILCS 5/16-111.5) | 7 | | Sec. 16-111.5. Provisions relating to procurement. | 8 | | (a) An electric utility that on December 31, 2005 served at | 9 | | least 100,000 customers in Illinois shall procure power and | 10 | | energy for its eligible retail customers in accordance with the | 11 | | applicable provisions set forth in Section 1-75 of the Illinois | 12 | | Power Agency Act and this Section. "Eligible retail customers" | 13 | | for the purposes of this Section means those retail customers | 14 | | that purchase power and energy from the electric utility under | 15 | | fixed-price bundled service tariffs, other than those retail | 16 | | customers whose service is declared or deemed competitive under | 17 | | Section 16-113 and those other customer groups specified in | 18 | | this Section, including self-generating customers, customers | 19 | | electing hourly pricing, or those customers who are otherwise | 20 | | ineligible for fixed-price bundled tariff service. Those | 21 | | customers that are excluded from the definition of "eligible | 22 | | retail customers" shall not be included in the procurement plan | 23 | | load requirements, and the utility shall procure any supply |
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| 1 | | requirements, including capacity, ancillary services, and | 2 | | hourly priced energy, in the applicable markets as needed to | 3 | | serve those customers, provided that the utility may include in | 4 | | its procurement plan load requirements for the load that is | 5 | | associated with those retail customers whose service has been | 6 | | declared or deemed competitive pursuant to Section 16-113 of | 7 | | this Act to the extent that those customers are purchasing | 8 | | power and energy during one of the transition periods | 9 | | identified in subsection (b) of Section 16-113 of this Act. | 10 | | (b) A procurement plan shall be prepared for each electric | 11 | | utility consistent with the applicable requirements of the | 12 | | Illinois Power Agency Act and this Section. For purposes of | 13 | | this Section, Illinois electric utilities that are affiliated | 14 | | by virtue of a common parent company are considered to be a | 15 | | single electric utility. Each procurement plan shall analyze | 16 | | the projected balance of supply and demand for eligible retail | 17 | | customers over a 5-year period with the first planning year | 18 | | beginning on June 1 of the year following the year in which the | 19 | | plan is filed. The plan shall specifically identify the | 20 | | wholesale products to be procured following plan approval, and | 21 | | shall follow all the requirements set forth in the Public | 22 | | Utilities Act and all applicable State and federal laws, | 23 | | statutes, rules, or regulations, as well as Commission orders. | 24 | | Nothing in this Section precludes consideration of contracts | 25 | | longer than 5 years and related forecast data. Unless specified | 26 | | otherwise in this Section, in the procurement plan or in the |
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| 1 | | implementing tariff, any procurement occurring in accordance | 2 | | with this plan shall be competitively bid through a request for | 3 | | proposals process. Approval and implementation of the | 4 | | procurement plan shall be subject to review and approval by the | 5 | | Commission according to the provisions set forth in this | 6 | | Section. A procurement plan shall include each of the following | 7 | | components: | 8 | | (1) Hourly load analysis. This analysis shall include: | 9 | | (i) multi-year historical analysis of hourly | 10 | | loads; | 11 | | (ii) switching trends and competitive retail | 12 | | market analysis; | 13 | | (iii) known or projected changes to future loads; | 14 | | and | 15 | | (iv) growth forecasts by customer class. | 16 | | (2) Analysis of the impact of any demand side and | 17 | | renewable energy initiatives. This analysis shall include: | 18 | | (i) the impact of demand response programs, both | 19 | | current and projected; | 20 | | (ii) supply side needs that are projected to be | 21 | | offset by purchases of renewable energy resources, if | 22 | | any; and | 23 | | (iii) the impact of energy efficiency programs, | 24 | | both current and projected. | 25 | | (3) A plan for meeting the expected load requirements | 26 | | that will not be met through preexisting contracts. This |
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| 1 | | plan shall include: | 2 | | (i) definitions of the different retail customer | 3 | | classes for which supply is being purchased; | 4 | | (ii) the proposed mix of demand-response products | 5 | | for which contracts will be executed during the next | 6 | | year. The cost-effective demand-response measures | 7 | | shall be procured whenever the cost is lower than | 8 | | procuring comparable capacity products, provided that | 9 | | such products shall: | 10 | | (A) be procured by a demand-response provider | 11 | | from eligible retail customers; | 12 | | (B) at least satisfy the demand-response | 13 | | requirements of the regional transmission | 14 | | organization market in which the utility's service | 15 | | territory is located, including, but not limited | 16 | | to, any applicable capacity or dispatch | 17 | | requirements; | 18 | | (C) provide for customers' participation in | 19 | | the stream of benefits produced by the | 20 | | demand-response products; | 21 | | (D) provide for reimbursement by the | 22 | | demand-response provider of the utility for any | 23 | | costs incurred as a result of the failure of the | 24 | | supplier of such products to perform its | 25 | | obligations thereunder; and | 26 | | (E) meet the same credit requirements as apply |
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| 1 | | to suppliers of capacity, in the applicable | 2 | | regional transmission organization market; | 3 | | (iii) monthly forecasted system supply | 4 | | requirements, including expected minimum, maximum, and | 5 | | average values for the planning period; | 6 | | (iv) the proposed mix and selection of standard | 7 | | wholesale products for which contracts will be | 8 | | executed during the next year, separately or in | 9 | | combination, to meet that portion of its load | 10 | | requirements not met through pre-existing contracts, | 11 | | including but not limited to monthly 5 x 16 peak period | 12 | | block energy, monthly off-peak wrap energy, monthly 7 x | 13 | | 24 energy, annual 5 x 16 energy, annual off-peak wrap | 14 | | energy, annual 7 x 24 energy, monthly capacity, annual | 15 | | capacity, peak load capacity obligations, capacity | 16 | | purchase plan, and ancillary services; | 17 | | (v) proposed term structures for each wholesale | 18 | | product type included in the proposed procurement plan | 19 | | portfolio of products; and | 20 | | (vi) an assessment of the price risk, load | 21 | | uncertainty, and other factors that are associated | 22 | | with the proposed procurement plan; this assessment, | 23 | | to the extent possible, shall include an analysis of | 24 | | the following factors: contract terms, time frames for | 25 | | securing products or services, fuel costs, weather | 26 | | patterns, transmission costs, market conditions, and |
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| 1 | | the governmental regulatory environment; the proposed | 2 | | procurement plan shall also identify alternatives for | 3 | | those portfolio measures that are identified as having | 4 | | significant price risk. | 5 | | (4) Proposed procedures for balancing loads. The | 6 | | procurement plan shall include, for load requirements | 7 | | included in the procurement plan, the process for (i) | 8 | | hourly balancing of supply and demand and (ii) the criteria | 9 | | for portfolio re-balancing in the event of significant | 10 | | shifts in load. | 11 | | (c) The procurement process set forth in Section 1-75 of | 12 | | the Illinois Power Agency Act and subsection (e) of this | 13 | | Section shall be administered by a procurement administrator | 14 | | and monitored by a procurement monitor. | 15 | | (1) The procurement administrator shall: | 16 | | (i) design the final procurement process in | 17 | | accordance with Section 1-75 of the Illinois Power | 18 | | Agency Act and subsection (e) of this Section following | 19 | | Commission approval of the procurement plan; | 20 | | (ii) develop benchmarks in accordance with | 21 | | subsection (e)(3) to be used to evaluate bids; these | 22 | | benchmarks shall be submitted to the Commission for | 23 | | review and approval on a confidential basis prior to | 24 | | the procurement event; | 25 | | (iii) serve as the interface between the electric | 26 | | utility and suppliers; |
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| 1 | | (iv) manage the bidder pre-qualification and | 2 | | registration process; | 3 | | (v) obtain the electric utilities' agreement to | 4 | | the final form of all supply contracts and credit | 5 | | collateral agreements; | 6 | | (vi) administer the request for proposals process; | 7 | | (vii) have the discretion to negotiate to | 8 | | determine whether bidders are willing to lower the | 9 | | price of bids that meet the benchmarks approved by the | 10 | | Commission; any post-bid negotiations with bidders | 11 | | shall be limited to price only and shall be completed | 12 | | within 24 hours after opening the sealed bids and shall | 13 | | be conducted in a fair and unbiased manner; in | 14 | | conducting the negotiations, there shall be no | 15 | | disclosure of any information derived from proposals | 16 | | submitted by competing bidders; if information is | 17 | | disclosed to any bidder, it shall be provided to all | 18 | | competing bidders; | 19 | | (viii) maintain confidentiality of supplier and | 20 | | bidding information in a manner consistent with all | 21 | | applicable laws, rules, regulations, and tariffs; | 22 | | (ix) submit a confidential report to the | 23 | | Commission recommending acceptance or rejection of | 24 | | bids; | 25 | | (x) notify the utility of contract counterparties | 26 | | and contract specifics; and |
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| 1 | | (xi) administer related contingency procurement | 2 | | events. | 3 | | (2) The procurement monitor, who shall be retained by | 4 | | the Commission, shall: | 5 | | (i) monitor interactions among the procurement | 6 | | administrator, suppliers, and utility; | 7 | | (ii) monitor and report to the Commission on the | 8 | | progress of the procurement process; | 9 | | (iii) provide an independent confidential report | 10 | | to the Commission regarding the results of the | 11 | | procurement event; | 12 | | (iv) assess compliance with the procurement plans | 13 | | approved by the Commission for each utility that on | 14 | | December 31, 2005 provided electric service to a least | 15 | | 100,000 customers in Illinois; | 16 | | (v) preserve the confidentiality of supplier and | 17 | | bidding information in a manner consistent with all | 18 | | applicable laws, rules, regulations, and tariffs; | 19 | | (vi) provide expert advice to the Commission and | 20 | | consult with the procurement administrator regarding | 21 | | issues related to procurement process design, rules, | 22 | | protocols, and policy-related matters; and | 23 | | (vii) consult with the procurement administrator | 24 | | regarding the development and use of benchmark | 25 | | criteria, standard form contracts, credit policies, | 26 | | and bid documents. |
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| 1 | | (d) Except as provided in subsection (j), the planning | 2 | | process shall be conducted as follows: | 3 | | (1) Beginning in 2008, each Illinois utility procuring | 4 | | power pursuant to this Section shall annually provide a | 5 | | range of load forecasts to the Illinois Power Agency by | 6 | | July 15 of each year, or such other date as may be required | 7 | | by the Commission or Agency. The load forecasts shall cover | 8 | | the 5-year procurement planning period for the next | 9 | | procurement plan and shall include hourly data | 10 | | representing a high-load, low-load and expected-load | 11 | | scenario for the load of the eligible retail customers. The | 12 | | utility shall provide supporting data and assumptions for | 13 | | each of the scenarios.
| 14 | | (2) Beginning in 2011 2008 , the Illinois Power Agency | 15 | | shall prepare a draft procurement plan by August 15th of | 16 | | each year, or such other date as may be required by the | 17 | | Commission. The procurement plan shall identify the | 18 | | portfolio of demand-response and power and energy products | 19 | | to be procured. The draft procurement plan shall also | 20 | | indicate, in legislative style, the specific changes to the | 21 | | most recent Commission-approved procurement plan. | 22 | | Cost-effective demand-response measures shall be procured | 23 | | as set forth in item (iii) of subsection (b) of this | 24 | | Section. Copies of the draft procurement plan shall be | 25 | | posted and made publicly available on the Agency's and | 26 | | Commission's websites, and copies shall also be provided to |
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| 1 | | each affected electric utility. An affected utility shall | 2 | | have 30 days following the date of posting to provide | 3 | | comment to the Agency on the draft procurement plan. Other | 4 | | interested entities also may comment on the procurement | 5 | | plan within the timeframe outlined in this Section . All | 6 | | comments submitted to the Agency shall be specific, | 7 | | supported by data or other detailed analyses, and, if | 8 | | objecting to all or a portion of the draft procurement | 9 | | plan, accompanied by specific alternative wording or | 10 | | proposals. All comments shall be posted on the Agency's and | 11 | | Commission's websites. During this 30-day comment period, | 12 | | the Agency shall hold at least one public hearing within | 13 | | each utility's service area for the purpose of receiving | 14 | | public comment on the draft procurement plan. Within 14 | 15 | | days following the end of the 30-day review period, the | 16 | | Agency shall revise the draft procurement plan as necessary | 17 | | based on the comments received and file the agency's final | 18 | | version of the procurement plan with the Commission and | 19 | | post the Agency's final version of the procurement plan on | 20 | | the websites. The Agency shall identify any revisions to | 21 | | the draft procurement plan by documenting such revisions in | 22 | | legislative style. | 23 | | (3) Within 10 5 days after the filing of the Agency's | 24 | | final version of the procurement plan, any person objecting | 25 | | to the procurement plan shall file an objection with the | 26 | | Commission. Within 15 10 days after the filing, the |
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| 1 | | Commission shall determine whether a hearing is necessary. | 2 | | The Commission shall enter its order confirming or | 3 | | modifying the final procurement plan within 90 days after | 4 | | the filing of the final procurement plan , including all | 5 | | modifications and additions, by the Illinois Power Agency. | 6 | | (4) The Commission shall approve the procurement plan, | 7 | | including expressly the forecast used in the procurement | 8 | | plan, if the Commission determines that it will ensure | 9 | | adequate, reliable, affordable, efficient, and | 10 | | environmentally sustainable electric service at the lowest | 11 | | total cost over time, taking into account any benefits of | 12 | | price stability. | 13 | | (e) The procurement process shall include each of the | 14 | | following components: | 15 | | (1) Solicitation, pre-qualification, and registration | 16 | | of bidders. The procurement administrator shall | 17 | | disseminate information to potential bidders to promote a | 18 | | procurement event, notify potential bidders that the | 19 | | procurement administrator may enter into a post-bid price | 20 | | negotiation with bidders that meet the applicable | 21 | | benchmarks, provide supply requirements, and otherwise | 22 | | explain the competitive procurement process. In addition | 23 | | to such other publication as the procurement administrator | 24 | | determines is appropriate, this information shall be | 25 | | posted on the Illinois Power Agency's and the Commission's | 26 | | websites. The procurement administrator shall also |
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| 1 | | administer the prequalification process, including | 2 | | evaluation of credit worthiness, compliance with | 3 | | procurement rules, and agreement to the standard form | 4 | | contract developed pursuant to paragraph (2) of this | 5 | | subsection (e). The procurement administrator shall then | 6 | | identify and register bidders to participate in the | 7 | | procurement event. | 8 | | (2) Standard contract forms and credit terms and | 9 | | instruments. The procurement administrator, in | 10 | | consultation with the utilities, the Commission, and other | 11 | | interested parties and subject to Commission oversight, | 12 | | shall develop and provide standard contract forms for the | 13 | | supplier contracts that meet generally accepted industry | 14 | | practices. Standard credit terms and instruments that meet | 15 | | generally accepted industry practices shall be similarly | 16 | | developed. The procurement administrator shall make | 17 | | available to the Commission all written comments it | 18 | | receives on the contract forms, credit terms, or | 19 | | instruments. If the procurement administrator cannot reach | 20 | | agreement with the applicable electric utility as to the | 21 | | contract terms and conditions, the procurement | 22 | | administrator must notify the Commission of any disputed | 23 | | terms and the Commission shall resolve the dispute. The | 24 | | terms of the contracts shall not be subject to negotiation | 25 | | by winning bidders, and the bidders must agree to the terms | 26 | | of the contract in advance so that winning bids are |
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| 1 | | selected solely on the basis of price. | 2 | | (3) Establishment of a market-based price benchmark. | 3 | | As part of the development of the procurement process, the | 4 | | procurement administrator, in consultation with the | 5 | | Commission staff, Agency staff, and the procurement | 6 | | monitor, shall establish benchmarks for evaluating the | 7 | | final prices in the contracts for each of the products that | 8 | | will be procured through the procurement process. The | 9 | | benchmarks shall be based on price data for similar | 10 | | products for the same delivery period and same delivery | 11 | | hub, or other delivery hubs after adjusting for that | 12 | | difference. The price benchmarks may also be adjusted to | 13 | | take into account differences between the information | 14 | | reflected in the underlying data sources and the specific | 15 | | products and procurement process being used to procure | 16 | | power for the Illinois utilities. The benchmarks shall be | 17 | | confidential but shall be provided to, and will be subject | 18 | | to Commission review and approval, prior to a procurement | 19 | | event. | 20 | | (4) Request for proposals competitive procurement | 21 | | process. The procurement administrator shall design and | 22 | | issue a request for proposals to supply electricity in | 23 | | accordance with each utility's procurement plan, as | 24 | | approved by the Commission. The request for proposals shall | 25 | | set forth a procedure for sealed, binding commitment | 26 | | bidding with pay-as-bid settlement, and provision for |
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| 1 | | selection of bids on the basis of price. | 2 | | (5) A plan for implementing contingencies in the event | 3 | | of supplier default or failure of the procurement process | 4 | | to fully meet the expected load requirement due to | 5 | | insufficient supplier participation, Commission rejection | 6 | | of results, or any other cause. | 7 | | (i) Event of supplier default: In the event of | 8 | | supplier default, the utility shall review the | 9 | | contract of the defaulting supplier to determine if the | 10 | | amount of supply is 200 megawatts or greater, and if | 11 | | there are more than 60 days remaining of the contract | 12 | | term. If both of these conditions are met, and the | 13 | | default results in termination of the contract, the | 14 | | utility shall immediately notify the Illinois Power | 15 | | Agency that a request for proposals must be issued to | 16 | | procure replacement power, and the procurement | 17 | | administrator shall run an additional procurement | 18 | | event. If the contracted supply of the defaulting | 19 | | supplier is less than 200 megawatts or there are less | 20 | | than 60 days remaining of the contract term, the | 21 | | utility shall procure power and energy from the | 22 | | applicable regional transmission organization market, | 23 | | including ancillary services, capacity, and day-ahead | 24 | | or real time energy, or both, for the duration of the | 25 | | contract term to replace the contracted supply; | 26 | | provided, however, that if a needed product is not |
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| 1 | | available through the regional transmission | 2 | | organization market it shall be purchased from the | 3 | | wholesale market. | 4 | | (ii) Failure of the procurement process to fully | 5 | | meet the expected load requirement: If the procurement | 6 | | process fails to fully meet the expected load | 7 | | requirement due to insufficient supplier participation | 8 | | or due to a Commission rejection of the procurement | 9 | | results, the procurement administrator, the | 10 | | procurement monitor, and the Commission staff shall | 11 | | meet within 10 days to analyze potential causes of low | 12 | | supplier interest or causes for the Commission | 13 | | decision. If changes are identified that would likely | 14 | | result in increased supplier participation, or that | 15 | | would address concerns causing the Commission to | 16 | | reject the results of the prior procurement event, the | 17 | | procurement administrator may implement those changes | 18 | | and rerun the request for proposals process according | 19 | | to a schedule determined by those parties and | 20 | | consistent with Section 1-75 of the Illinois Power | 21 | | Agency Act and this subsection. In any event, a new | 22 | | request for proposals process shall be implemented by | 23 | | the procurement administrator within 90 days after the | 24 | | determination that the procurement process has failed | 25 | | to fully meet the expected load requirement. | 26 | | (iii) In all cases where there is insufficient |
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| 1 | | supply provided under contracts awarded through the | 2 | | procurement process to fully meet the electric | 3 | | utility's load requirement, the utility shall meet the | 4 | | load requirement by procuring power and energy from the | 5 | | applicable regional transmission organization market, | 6 | | including ancillary services, capacity, and day-ahead | 7 | | or real time energy or both; provided, however, that if | 8 | | a needed product is not available through the regional | 9 | | transmission organization market it shall be purchased | 10 | | from the wholesale market. | 11 | | (6) The procurement process described in this | 12 | | subsection is exempt from the requirements of the Illinois | 13 | | Procurement Code, pursuant to Section 20-10 of that Code. | 14 | | (f) Within 2 business days after opening the sealed bids, | 15 | | the procurement administrator shall submit a confidential | 16 | | report to the Commission. The report shall contain the results | 17 | | of the bidding for each of the products along with the | 18 | | procurement administrator's recommendation for the acceptance | 19 | | and rejection of bids based on the price benchmark criteria and | 20 | | other factors observed in the process. The procurement monitor | 21 | | also shall submit a confidential report to the Commission | 22 | | within 2 business days after opening the sealed bids. The | 23 | | report shall contain the procurement monitor's assessment of | 24 | | bidder behavior in the process as well as an assessment of the | 25 | | procurement administrator's compliance with the procurement | 26 | | process and rules. The Commission shall review the confidential |
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| 1 | | reports submitted by the procurement administrator and | 2 | | procurement monitor, and shall accept or reject the | 3 | | recommendations of the procurement administrator within 2 | 4 | | business days after receipt of the reports. | 5 | | (g) Within 3 business days after the Commission decision | 6 | | approving the results of a procurement event, the utility shall | 7 | | enter into binding contractual arrangements with the winning | 8 | | suppliers using the standard form contracts; except that the | 9 | | utility shall not be required either directly or indirectly to | 10 | | execute the contracts if a tariff that is consistent with | 11 | | subsection (l) of this Section has not been approved and placed | 12 | | into effect for that utility. | 13 | | (h) The names of the successful bidders and the load | 14 | | weighted average of the winning bid prices for each contract | 15 | | type and for each contract term shall be made available to the | 16 | | public at the time of Commission approval of a procurement | 17 | | event. The Commission, the procurement monitor, the | 18 | | procurement administrator, the Illinois Power Agency, and all | 19 | | participants in the procurement process shall maintain the | 20 | | confidentiality of all other supplier and bidding information | 21 | | in a manner consistent with all applicable laws, rules, | 22 | | regulations, and tariffs. Confidential information, including | 23 | | the confidential reports submitted by the procurement | 24 | | administrator and procurement monitor pursuant to subsection | 25 | | (f) of this Section, shall not be made publicly available and | 26 | | shall not be discoverable by any party in any proceeding, |
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| 1 | | absent a compelling demonstration of need, nor shall those | 2 | | reports be admissible in any proceeding other than one for law | 3 | | enforcement purposes. | 4 | | (i) Within 2 business days after a Commission decision | 5 | | approving the results of a procurement event or such other date | 6 | | as may be required by the Commission from time to time, the | 7 | | utility shall file for informational purposes with the | 8 | | Commission its actual or estimated retail supply charges, as | 9 | | applicable, by customer supply group reflecting the costs | 10 | | associated with the procurement and computed in accordance with | 11 | | the tariffs filed pursuant to subsection (l) of this Section | 12 | | and approved by the Commission. | 13 | | (j) Within 60 days following the effective date of this | 14 | | amendatory Act, each electric utility that on December 31, 2005 | 15 | | provided electric service to at least 100,000 customers in | 16 | | Illinois shall prepare and file with the Commission an initial | 17 | | procurement plan, which shall conform in all material respects | 18 | | to the requirements of the procurement plan set forth in | 19 | | subsection (b); provided, however, that the Illinois Power | 20 | | Agency Act shall not apply to the initial procurement plan | 21 | | prepared pursuant to this subsection. The initial procurement | 22 | | plan shall identify the portfolio of power and energy products | 23 | | to be procured and delivered for the period June 2008 through | 24 | | May 2009, and shall identify the proposed procurement | 25 | | administrator, who shall have the same experience and expertise | 26 | | as is required of a procurement administrator hired pursuant to |
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| 1 | | Section 1-75 of the Illinois Power Agency Act. Copies of the | 2 | | procurement plan shall be posted and made publicly available on | 3 | | the Commission's website. The initial procurement plan may | 4 | | include contracts for renewable resources that extend beyond | 5 | | May 2009. | 6 | | (i) Within 14 days following filing of the initial | 7 | | procurement plan, any person may file a detailed objection | 8 | | with the Commission contesting the procurement plan | 9 | | submitted by the electric utility. All objections to the | 10 | | electric utility's plan shall be specific, supported by | 11 | | data or other detailed analyses. The electric utility may | 12 | | file a response to any objections to its procurement plan | 13 | | within 7 days after the date objections are due to be | 14 | | filed. Within 7 days after the date the utility's response | 15 | | is due, the Commission shall determine whether a hearing is | 16 | | necessary. If it determines that a hearing is necessary, it | 17 | | shall require the hearing to be completed and issue an | 18 | | order on the procurement plan within 60 days after the | 19 | | filing of the procurement plan by the electric utility. | 20 | | (ii) The order shall approve or modify the procurement | 21 | | plan, approve an independent procurement administrator, | 22 | | and approve or modify the electric utility's tariffs that | 23 | | are proposed with the initial procurement plan. The | 24 | | Commission shall approve the procurement plan if the | 25 | | Commission determines that it will ensure adequate, | 26 | | reliable, affordable, efficient, and environmentally |
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| 1 | | sustainable electric service at the lowest total cost over | 2 | | time, taking into account any benefits of price stability. | 3 | | (k) In order to promote price stability for residential and | 4 | | small commercial customers during the transition to | 5 | | competition in Illinois, and notwithstanding any other | 6 | | provision of this Act, each electric utility subject to this | 7 | | Section shall enter into one or more multi-year financial swap | 8 | | contracts that become effective on the effective date of this | 9 | | amendatory Act. These contracts may be executed with generators | 10 | | and power marketers, including affiliated interests of the | 11 | | electric utility. These contracts shall be for a term of no | 12 | | more than 5 years and shall, for each respective utility or for | 13 | | any Illinois electric utilities that are affiliated by virtue | 14 | | of a common parent company and that are thereby considered a | 15 | | single electric utility for purposes of this subsection (k), | 16 | | not exceed in the aggregate 3,000 megawatts for any hour of the | 17 | | year. The contracts shall be financial contracts and not energy | 18 | | sales contracts. The contracts shall be executed as | 19 | | transactions under a negotiated master agreement based on the | 20 | | form of master agreement for financial swap contracts sponsored | 21 | | by the International Swaps and Derivatives Association, Inc. | 22 | | and shall be considered pre-existing contracts in the | 23 | | utilities' procurement plans for residential and small | 24 | | commercial customers. Costs incurred pursuant to a contract | 25 | | authorized by this subsection (k) shall be deemed prudently | 26 | | incurred and reasonable in amount and the electric utility |
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| 1 | | shall be entitled to full cost recovery pursuant to the tariffs | 2 | | filed with the Commission. | 3 | | (l) An electric utility shall recover its costs incurred | 4 | | under this Section, including, but not limited to, the costs of | 5 | | procuring power and energy demand-response resources under | 6 | | this Section. The utility shall file with the initial | 7 | | procurement plan its proposed tariffs through which its costs | 8 | | of procuring power that are incurred pursuant to a | 9 | | Commission-approved procurement plan and those other costs | 10 | | identified in this subsection (l), will be recovered. The | 11 | | tariffs shall include a formula rate or charge designed to pass | 12 | | through both the costs incurred by the utility in procuring a | 13 | | supply of electric power and energy for the applicable customer | 14 | | classes with no mark-up or return on the price paid by the | 15 | | utility for that supply, plus any just and reasonable costs | 16 | | that the utility incurs in arranging and providing for the | 17 | | supply of electric power and energy. The formula rate or charge | 18 | | shall also contain provisions that ensure that its application | 19 | | does not result in over or under recovery due to changes in | 20 | | customer usage and demand patterns, and that provide for the | 21 | | correction, on at least an annual basis, of any accounting | 22 | | errors that may occur. A utility shall recover through the | 23 | | tariff all reasonable costs incurred to implement or comply | 24 | | with any procurement plan that is developed and put into effect | 25 | | pursuant to Section 1-75 of the Illinois Power Agency Act and | 26 | | this Section, including any fees assessed by the Illinois Power |
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| 1 | | Agency, costs associated with load balancing, and contingency | 2 | | plan costs. The electric utility shall also recover its full | 3 | | costs of procuring electric supply for which it contracted | 4 | | before the effective date of this Section in conjunction with | 5 | | the provision of full requirements service under fixed-price | 6 | | bundled service tariffs subsequent to December 31, 2006. All | 7 | | such costs shall be deemed to have been prudently incurred. The | 8 | | pass-through tariffs that are filed and approved pursuant to | 9 | | this Section shall not be subject to review under, or in any | 10 | | way limited by, Section 16-111(i) of this Act. | 11 | | (m) The Commission has the authority to adopt rules to | 12 | | carry out the provisions of this Section. For the public | 13 | | interest, safety, and welfare, the Commission also has | 14 | | authority to adopt rules to carry out the provisions of this | 15 | | Section on an emergency basis immediately following the | 16 | | effective date of this amendatory Act. | 17 | | (n) Notwithstanding any other provision of this Act, any | 18 | | affiliated electric utilities that submit a single procurement | 19 | | plan covering their combined needs may procure for those | 20 | | combined needs in conjunction with that plan, and may enter | 21 | | jointly into power supply contracts, purchases, and other | 22 | | procurement arrangements, and allocate capacity and energy and | 23 | | cost responsibility therefor among themselves in proportion to | 24 | | their requirements. | 25 | | (o) On or before June 1 of each year, the Commission shall | 26 | | hold an informal hearing for the purpose of receiving comments |
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| 1 | | on the prior year's procurement process and any recommendations | 2 | | for change.
| 3 | | (p) An electric utility subject to this Section may propose | 4 | | to invest, lease, own, or operate an electric generation | 5 | | facility as part of its procurement plan, provided the utility | 6 | | demonstrates that such facility is the least-cost option to | 7 | | provide electric service to eligible retail customers. If the | 8 | | facility is shown to be the least-cost option and is included | 9 | | in a procurement plan prepared in accordance with Section 1-75 | 10 | | of the Illinois Power Agency Act and this Section, then the | 11 | | electric utility shall make a filing pursuant to Section 8-406 | 12 | | of the Act, and may request of the Commission any statutory | 13 | | relief required thereunder. If the Commission grants all of the | 14 | | necessary approvals for the proposed facility, such supply | 15 | | shall thereafter be considered as a pre-existing contract under | 16 | | subsection (b) of this Section. The Commission shall in any | 17 | | order approving a proposal under this subsection specify how | 18 | | the utility will recover the prudently incurred costs of | 19 | | investing in, leasing, owning, or operating such generation | 20 | | facility through just and reasonable rates charged to eligible | 21 | | retail customers. Cost recovery for facilities included in the | 22 | | utility's procurement plan pursuant to this subsection shall | 23 | | not be subject to review under or in any way limited by the | 24 | | provisions of Section 16-111(i) of this Act. Nothing in this | 25 | | Section is intended to prohibit a utility from filing for a | 26 | | fuel adjustment clause as is otherwise permitted under Section |
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| 1 | | 9-220 of this Act.
| 2 | | (Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09 .)
| 3 | | Section 99. Effective date. This Act takes effect upon | 4 | | becoming law.
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