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90_SB1746
220 ILCS 5/16-112
Amends the Public Utilities Act. Eliminates the use of a
neutral fact-finder process for the determination of market
value to be used in calculation of transition charges.
Provides for the Commerce Commission to perform that
function. Reduces the notice period customers must give
before entering into contracts establishing the market values
to be used in calculating the customer's transition charges.
LRB9011401JSdv
LRB9011401JSdv
1 AN ACT to amend the Public Utilities Act by changing
2 Section 16-112.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Public Utilities Act is amended by
6 changing Section 16-112 as follows:
7 (220 ILCS 5/16-112)
8 Sec. 16-112. Determination of market value.
9 (a) The market value to be used in the calculation of
10 transition charges as defined in Section 16-102 shall be
11 determined in accordance with either (i) a tariff that has
12 been filed by the electric utility with the Commission
13 pursuant to Article IX of this Act and that provides for a
14 determination of the market value for electric power and
15 energy as a function of an exchange traded or other market
16 traded index, options or futures contract or contracts
17 applicable to the market in which the utility sells, and the
18 customers in its service area buy, electric power and energy,
19 or (ii) in the event no such tariff has been placed into
20 effect for the electric utility, or in the event such tariff
21 does not establish market values for each of the years
22 specified in the neutral fact-finder process described in
23 subsections (b) through (h) of this Section, a tariff
24 incorporating the market values resulting from the neutral
25 fact-finder process set forth in subsections (b) through (h)
26 of this Section.
27 (b) (Blank). Except as provided in subsection (m) of
28 this Section, on or before April 30, 1998, on or before
29 February 28, 1999, and on or before each April 30 from 2000
30 until 2007, the Commission shall appoint a neutral
31 fact-finder to make the calculations described in subsection
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1 (c) of this Section. The neutral fact-finder shall be a
2 member of a national public accounting firm, shall not have
3 served as the neutral fact-finder in the previous year, and
4 shall be selected from a list of candidates provided by a
5 nationally recognized provider of neutral fact-finders that
6 has established rules for maintaining confidentiality. An
7 amount sufficient to pay the fees of the neutral fact-finder
8 shall be appropriated annually from the Public Utility Fund
9 in the State treasury.
10 (c) On or before June 1, 1998, on or before April 1,
11 1999, and on or before each June 1 from 2000 until 2007, or
12 until discontinued in accordance with subsection (m) of this
13 Section, each electric utility and each alternative retail
14 electric supplier shall submit to the Commission neutral
15 fact-finder a summary of (A) all contracts entered into after
16 June 1, 1997 that are for the sale of electric power and
17 energy from a generating facility or facilities located in
18 this State or located in a contiguous State and owned by an
19 electric utility as part of its interconnected operating
20 system and delivery during one or more of the 5 years
21 succeeding the date of submission, and (B) all contracts
22 entered into after June 1, 1997 for purchase and delivery of
23 electric power and energy in or into this State during one or
24 more of the 5 years succeeding the date of submission;
25 provided, however, that such contracts shall not include (i)
26 contracts between the electric utility and an affiliate and;
27 (ii) sales, purchases, or deliveries made under rates and
28 tariffs filed with the Commission, except for tariffs filed
29 pursuant to subsection (d) of Section 16-110 and except for
30 special or negotiated rate contracts between an electric
31 utility and a retail customer to the extent that such
32 contracts are for the provision of electric power and energy
33 after the date that the customer becomes eligible for
34 delivery services; and (iii) extensions or amendments to full
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1 requirements wholesale contracts existing as of the effective
2 date of this amendatory Act of 1997, provided that such
3 contracts, extensions, or amendments are cost of service
4 regulated by the Federal Energy Regulatory Commission. The
5 summaries shall, at a minimum, identify the date of the
6 contract; the year in which the electric power or energy is
7 to be sold or delivered; the point of delivery; defining
8 characteristics such as the nature of the power transaction
9 (for example, reserve responsibility (firm, non-firm)),
10 length of contract and temporal differences (for example,
11 season, on-peak or off-peak); and the applicable prices
12 stated at the point at which the electric power and energy
13 leaves the electric utility's or alternative retail electric
14 supplier's transmission system, as the case may be, in the
15 case of contracts described in item (A) and at the point at
16 which the electric power and energy enters the electric
17 utility's transmission system in the case of contracts in
18 item (B), provided, that the applicable price shall be stated
19 at the point at which the electric power and energy enters
20 the electric utility's transmission system in the case of
21 electric power and energy generated for delivery within the
22 electric utility's service area. In reporting to the
23 Commission neutral fact-finder the price of power and energy
24 sold under bundled service contracts, electric utilities and
25 alternative retail electric suppliers shall deduct from the
26 contract price the charges for delivery services, including
27 transition charges, applicable to delivery services customers
28 in a utility's service area, and charges for services, if
29 any, other than the provision of power and energy or delivery
30 services. The Commission may adopt orders setting forth
31 requirements governing the form and content of such
32 summaries.
33 (d) The Commission neutral fact-finder shall calculate
34 market values for electric power and energy for each electric
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1 utility, taking into account the defining characteristics set
2 forth in subsection (c) of this Section; provided, however,
3 that the Commission neutral fact-finder may determine that a
4 particular value is appropriate for more than one electric
5 utility, or for all electric utilities in this State. The
6 Commission neutral fact-finder shall determine calculate the
7 market values for the next year and, to the extent the
8 summaries include a sufficient number of actual contracts to
9 represent a viable market for the sale and delivery of
10 electric power and energy in subsequent years, for each of
11 the 4 succeeding years.
12 (e) In calculating market values for electric power, the
13 Commission neutral fact-finder shall weight contract prices
14 (including any contract price indices) by both the amount of
15 capacity covered by the contract and the number of hours in
16 which capacity is to be provided under the contract in each
17 period of the year, shall take into account all of the
18 defining characteristics set forth in subsection (c) of this
19 Section and shall develop such values as required to
20 represent the different types of market values of electric
21 power.
22 (f) The Commission neutral fact-finder shall base
23 calculations of the market values for electric energy on the
24 energy prices stated in the contracts, and where no explicit
25 energy prices or index price basis are stated, on the actual
26 energy costs of the supplier in the corresponding period of
27 the preceding year that would have been applicable to the
28 electric energy provided under the contract. The Commission
29 neutral fact-finder shall develop market values for electric
30 energy and shall take into account the defining
31 characteristics set forth in subsection (c) of this Section,
32 as required to represent the market values of such electric
33 energy.
34 (g) If the contracts used by the Commission neutral
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1 fact-finder base prices for future years on one or more
2 indices, the Commission neutral fact-finder shall identify
3 such indices in its his or her final report, develop a
4 weighting for each index, and calculate a weighted average
5 index. The market values shall be calculated using the
6 weighted average index when the actual values of the
7 component indices are known.
8 (h) The Commission neutral fact-finder shall publish a
9 final report on or before July 30 of each year, except that
10 in 1999 the Commission neutral fact finder shall publish the
11 report on or before May 30, setting forth the calculated
12 market values and stating the basis for such calculations.
13 The final report shall not, however, disclose any proprietary
14 or confidential data.
15 (i) The market values calculated by the Commission
16 neutral fact-finder shall not be admissible in any proceeding
17 for any purpose other than the calculation of transition
18 charges or calculation of the price for the power purchase
19 options provided pursuant to subsection (b) and (c) of
20 Section 16-110.
21 (j) The Commission shall have access to all contracts
22 described in subsection (c) of this Section and shall perform
23 such audits as it deems and the neutral fact-finder deem
24 necessary to insure the accuracy of the summaries submitted
25 to the Commission neutral fact-finder. The summaries
26 described in subsection (c) of this Section and each contract
27 shall be accorded confidential and proprietary treatment and
28 their review shall be subject to the provisions of Sections
29 4-404 and 5-108 of this Act, and the contract between the
30 Commission and the neutral fact-finder shall contain
31 provisions obligating the neutral fact-finder to comply with
32 such Sections. The summaries shall not be discoverable by
33 any party in any proceeding absent a compelling demonstration
34 of need.
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1 (k) In determining the market values to be used for the
2 various customer classes in calculating transition charges as
3 defined in Section 16-102 or for the power purchase options
4 set forth in Section 16-110, an electric utility shall apply
5 the market values that are determined as set forth in
6 subsection (a) to the electric power and energy that would
7 have been used to serve the delivery services customers'
8 electric power and energy requirements, based on the usage
9 specified in Section 16-102 and taking into account the
10 daily, monthly, annual and other relevant characteristics of
11 the customers' demands on the electric utility's system.
12 (l) In calculating a lump sum transition charge payment
13 for the purposes of subsection (h) of Section 16-108, the
14 electric utility shall use the market values that were
15 determined as provided in its tariff, or if such market
16 values have not been determined for the full period of time
17 covered by such lump sum calculation, such other basis as is
18 stated in the electric utility's tariff filed pursuant to
19 Section 16-108.
20 (m) The Commission may approve or reject, or propose
21 modifications to, any tariff providing for the determination
22 of market value that has been proposed by an electric utility
23 pursuant to subsection (a) of this Section, but shall not
24 have the power to otherwise order the electric utility to
25 implement a modified tariff or to place into effect any
26 tariff for the determination of market value other than one
27 incorporating the Commission neutral fact-finder procedure
28 for calculation of market value set forth in this Section.
29 Provided, however, that if each electric utility serving at
30 least 300,000 customers has placed into effect a tariff that
31 provides for a determination of market value as a function of
32 an exchange traded or other market traded index, options or
33 futures contract or contracts, then the Commission can
34 require any other electric utilities to file such a tariff,
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1 and can terminate the neutral fact-finder procedure described
2 in this Section for calculation of market value by the
3 Commission for the periods covered by such tariffs.
4 (n) To the extent that the summaries list a sufficient
5 number of actual contracts to represent a viable market and
6 market values can be determined for more than one year, the
7 electric utility shall offer customers that are obligated to
8 pay transition charges contracts that establish for one or
9 more years, up to a maximum of the lesser of 5 years or the
10 remaining number of years until December 31, 2008, the market
11 value or values to be used in calculating the customer's
12 transition charges in such years and for which market value
13 determinations have been made. The electric utility may
14 require any customer to give up to 6 months one year notice
15 prior to entering into a one or 2 year contract pursuant to
16 this subsection and, up to one year 2 years notice for a 3 to
17 5 year contract, and up to 3 years notice for a 4 or 5 year
18 contract. Contracts of one or 2 years duration shall
19 incorporate the market values that were determined as
20 provided in this Section in the year in which the notice is
21 required to be given. Contracts of more than 2 years
22 duration shall incorporate the market values that are
23 determined in the year prior to the first year in which the
24 electric utility will collect transition charges from the
25 customer under the contract. The electric utility shall also
26 allow customers to select, at the time that a customer gives
27 its notice, an option to revoke the notice within 30 days
28 following the determination of the market values that will
29 apply under the contract requested by the customer, and may
30 charge customers a fee for such option that is set forth in a
31 tariff filed pursuant to Article IX and that is adequate to
32 allow the electric utility to recover its transactional costs
33 and compensate it based on the cost that would be incurred to
34 purchase an option to cover the risk associated with the
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1 customer's option to revoke. The electric utility shall not
2 be required to offer customers a contract under this
3 paragraph for any year for which no determination of market
4 value has been made either by the Commission neutral
5 fact-finder or pursuant to a tariff filed by the electric
6 utility.
7 (o) An electric utility shall have no obligation to
8 provide electric power or energy as a tariffed service for
9 the electric power and energy requirements placed on delivery
10 service by any customer that has entered into a contract
11 pursuant to subsection (n) of this Section and has not
12 purchased and exercised an option to revoke, during the term
13 of the contract. A customer that has purchased and exercised
14 an option to revoke under this subsection shall remain
15 eligible to receive any tariffed service for which it would
16 otherwise be eligible.
17 (Source: P.A. 90-561, eff. 12-16-97.)