Full Text of SR0623 99th General Assembly
SR0623 99TH GENERAL ASSEMBLY |
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| 1 | | SENATE RESOLUTION
| 2 | | WHEREAS, Reliable, affordable, and clean electric service | 3 | | is a basic necessity of modern life and is vital to Illinois' | 4 | | economic growth, jobs, and the overall interests of its | 5 | | citizens; and
| 6 | | WHEREAS, The electric grid consists of interconnected | 7 | | transmission facilities, electric generators, and distribution | 8 | | facilities; and
| 9 | | WHEREAS, The operation of the transmission system affects | 10 | | and is affected by the operation of electrical generators; and
| 11 | | WHEREAS, The goal of restructuring the interstate electric | 12 | | industry by the Federal Energy Regulatory Commission was | 13 | | intended to provide lower prices and a better array of services | 14 | | for retail consumers by the creation of a marketplace where | 15 | | electricity prices were the result of vibrant and vigorous | 16 | | competition; and
| 17 | | WHEREAS, The Federal Power Act grants the Federal Energy | 18 | | Regulatory Commission the primary responsibility of ensuring | 19 | | that regional wholesale electricity markets served by Regional | 20 | | Transmission Organizations operate without market power; and |
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| 1 | | WHEREAS, The Federal Power Act requires just and reasonable | 2 | | rates in order to "afford consumers a complete, permanent, and | 3 | | effective bond of protection from excessive rates and charges" | 4 | | and to address the complete market breakdown that can result | 5 | | from the unfettered exercise of market power in the electric | 6 | | utility industry; and
| 7 | | WHEREAS, The Federal Power Act mandates that the Federal | 8 | | Energy Regulatory Commission deter and mitigate market power | 9 | | abuses for the benefit of consumers and authorizes the Federal | 10 | | Energy Regulatory Commission to protect consumers when a market | 11 | | produces non-competitive rates; and
| 12 | | WHEREAS, The design of wholesale markets is crucial to | 13 | | ensuring that wholesale and retail electricity prices are just | 14 | | and reasonable; and
| 15 | | WHEREAS, The Federal Energy Regulatory Commission oversees | 16 | | two Regional Transmission Organizations that operate the | 17 | | wholesale market for electricity in Illinois, PJM | 18 | | Interconnection LLC (PJM) and Midwest Independent System | 19 | | Operator, Inc. (MISO); and
| 20 | | WHEREAS, PJM and MISO offer a variety of products and | 21 | | oversee a variety of functions, including auctions for | 22 | | capacity; rates established by PJM and MISO are passed through |
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| 1 | | by buyers to retail customers and may affect rates for | 2 | | electricity sold in bilateral transactions; and | 3 | | WHEREAS, Capacity prices in Illinois increased by 100% in | 4 | | PJM and 825% in MISO over the prior capacity price, which are | 5 | | significant rate increases; and
| 6 | | WHEREAS, MISO's recent capacity auction yielded a high | 7 | | capacity price for Illinois of $150 per megawatt day, while the | 8 | | second highest capacity price in numerous other MISO states was | 9 | | $3.48 per megawatt day; and
| 10 | | WHEREAS, The average residential bill in MISO territory is | 11 | | expected to increase between $12 and $14 monthly based on the | 12 | | results of the recent capacity auction, which could result in | 13 | | rate shock for some of the State's most vulnerable residents on | 14 | | fixed incomes; and
| 15 | | WHEREAS, Illinois businesses, electric cooperatives, and | 16 | | other institutions and
agencies in MISO territory will pay | 17 | | millions of dollars more for capacity than they
anticipated | 18 | | based on the results of the recent capacity auction; and | 19 | | WHEREAS, Capacity clearing prices are currently designed | 20 | | so that the highest bid is used as the rate to compensate all | 21 | | generators who clear the auction, even if their bids were |
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| 1 | | significantly lower; and
| 2 | | WHEREAS, PJM has proposed to modify its auction process and | 3 | | utilize a capacity product called "capacity performance", | 4 | | which is expected to result in significantly higher capacity | 5 | | prices; and | 6 | | WHEREAS, Utility rate analysts have stated that by | 7 | | withholding a relatively small portion of its electric | 8 | | generation fleet, a generator can increase capacity prices and | 9 | | obtain maximum benefit; and
| 10 | | WHEREAS, Illinois Attorney General Lisa Madigan filed a | 11 | | complaint with the
Federal Energy Regulatory Commission | 12 | | (Docket EL15-71) against MISO on May
28, 2015, alleging that | 13 | | the Illinois MISO rate is unjust and unreasonable and that
the | 14 | | rate was driven up by a pivotal supplier; therefore, be it | 15 | | RESOLVED, BY THE SENATE OF THE NINETY-NINTH GENERAL | 16 | | ASSEMBLY OF THE STATE OF ILLINOIS, that we urge the Federal | 17 | | Energy Regulatory Commission, the Illinois Commerce | 18 | | Commission, and the Illinois Power Agency to independently | 19 | | review the PJM Interconnection LLC and Midwest Independent | 20 | | System Operator capacity auction rules and market design and | 21 | | determine why the rules and market design have not protected | 22 | | Illinois ratepayers from significant increases; and be it |
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| 1 | | further
| 2 | | RESOLVED, That we urge the Federal Energy Regulatory | 3 | | Commission to investigate whether all auction rules were | 4 | | followed in the most recent PJM and MISO auctions and, if so, | 5 | | to determine whether additional protections are necessary to | 6 | | ensure to protect ratepayers from excessive rates and charges; | 7 | | and be it further | 8 | | RESOLVED, That we urge the Federal Energy Regulatory | 9 | | Commission, the Illinois Commerce Commission, and the Illinois | 10 | | Power Agency to independently investigate whether market power | 11 | | was exercised by any auction participants, including the | 12 | | withholding of certain generation assets intended to drive up | 13 | | the clearing price, and whether the market design for capacity | 14 | | auctions allows for the exercise of market power; and be it | 15 | | further | 16 | | RESOLVED, That we urge the Illinois Commerce Commission and | 17 | | the Illinois
Power Agency to participate in Federal Energy | 18 | | Regulatory Commission
proceedings that will address the design | 19 | | and operation of the capacity market planning
processes and | 20 | | auction practices utilized by PJM and MISO and to promote | 21 | | policies
in those proceedings that will ensure greater | 22 | | transparency, prevent the exercise of
market power by bidders, | 23 | | and to deliver capacity resources to Illinois consumers at
the |
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| 1 | | lowest and most stable prices; and be it further | 2 | | RESOLVED, That suitable copies of this resolution be | 3 | | delivered to the members of the Illinois congressional | 4 | | delegation, the Federal Energy Regulatory Commission, the | 5 | | Illinois Commerce Commission, the Illinois Power Agency, PJM | 6 | | Interconnection LLC, and Midwest Independent System Operator, | 7 | | Inc.
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