State of Illinois
91st General Assembly
Legislation

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[ Engrossed ][ Enrolled ][ House Amendment 001 ]
[ Conference Committee Report 001 ]

91_SB0024

 
                                               LRB9100188JSgc

 1        AN ACT to encourage the development of  cogeneration  and
 2    self-generation of electricity.

 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 Sections 16-102 and 16-115 as follows:

 7        (220 ILCS 5/16-102)
 8        Sec. 16-102.  Definitions.  As used in For  the  purposes
 9    of  this  Article the following terms shall be defined as set
10    forth in this Section.
11        "Alternative  retail  electric  supplier"   means   every
12    person,   cooperative,  corporation,  municipal  corporation,
13    company, association, joint  stock  company  or  association,
14    firm,   partnership,   individual,  or  other  entity,  their
15    lessees,  trustees,  or  receivers  appointed  by  any  court
16    whatsoever, that offers electric power or  energy  for  sale,
17    lease  or in exchange for other value received to one or more
18    retail  customers,  or  that  engages  in  the  delivery   or
19    furnishing  of  electric  power  or  energy  to  such  retail
20    customers,  and shall include, without limitation, resellers,
21    aggregators and power marketers, but shall  not  include  (i)
22    electric  utilities  (or any agent of the electric utility to
23    the extent the electric utility provides tariffed services to
24    retail customers  through  that  agent),  (ii)  any  electric
25    cooperative  or municipal system as defined in Section 17-100
26    to the extent that  the  electric  cooperative  or  municipal
27    system  is  serving retail customers within any area in which
28    it is or would be entitled to provide service under  the  law
29    in  effect  immediately  prior  to the effective date of this
30    amendatory Act of 1997, (iii) a public utility that is  owned
31    and operated by any public institution of higher education of
 
                            -2-                LRB9100188JSgc
 1    this  State, or a public utility that is owned by such public
 2    institution of higher education and operated by  any  of  its
 3    lessees  or  operating agents, within any area in which it is
 4    or would be entitled to provide  service  under  the  law  in
 5    effect  immediately  prior  to  the  effective  date  of this
 6    amendatory Act of 1997,  (iv)  any  retail  customer  to  the
 7    extent  that  customer  obtains its electric power and energy
 8    from its own cogeneration or self-generation facilities,  (v)
 9    any  entity  that  sells  or arranges for the installation of
10    cogeneration or self-generation facilities to be owned  by  a
11    retail  customer  described in subparagraph (iv), but only to
12    the extent the entity is engaged in selling or arranging  for
13    such  installation,  or  (vi)  an industrial or manufacturing
14    customer that owns its own distribution  facilities,  to  the
15    extent   that   the   customer  provides  service  from  that
16    distribution system to a third-party  contractor  located  on
17    the  customer's premises that is integrally and predominantly
18    engaged  in  the  customer's  industrial   or   manufacturing
19    process;  provided,  that  if the industrial or manufacturing
20    customer has elected delivery services,  the  customer  shall
21    pay  transition  charges applicable to the electric power and
22    energy consumed by the  third-party  contractor  unless  such
23    charges  are  otherwise  paid  by the third party contractor,
24    which shall be calculated based on the usage of, and the base
25    rates or the contract rates applicable  to,  the  third-party
26    contractor in accordance with Section 16-102.
27        "Base  rates" means the rates for those tariffed services
28    that the electric utility is required to  offer  pursuant  to
29    subsection  (a) of Section 16-103 and that were identified in
30    a rate order for collection of the  electric  utility's  base
31    rate  revenue  requirement,  excluding (i) separate automatic
32    rate adjustment  riders  then  in  effect,  (ii)  special  or
33    negotiated  contract  rates,  (iii) delivery services tariffs
34    filed pursuant to Section 16-108, (iv) real-time pricing,  or
 
                            -3-                LRB9100188JSgc
 1    (v)  tariffs that were in effect prior to October 1, 1996 and
 2    that based charges for services on an  index  or  average  of
 3    other  utilities'  charges, but including (vi) any subsequent
 4    redesign  of  such  rates  for  tariffed  services  that   is
 5    authorized by the Commission after notice and hearing.
 6        "Competitive  service"  includes (i) any service that has
 7    been declared to be competitive pursuant to Section 16-113 of
 8    this Act, (ii) contract service, and  (iii)  services,  other
 9    than   tariffed  services,  that  are  related  to,  but  not
10    necessary for, the provision of electric power and energy  or
11    delivery services.
12        "Contract  service"  means  (1)  services,  including the
13    provision of electric power and  energy  or  other  services,
14    that  are  provided  by  mutual agreement between an electric
15    utility and a retail customer that is located in the electric
16    utility's service  area,  provided  that,  delivery  services
17    shall  not  be  a  contract  service  until such services are
18    declared competitive pursuant to  Section  16-113;  and  also
19    means  (2)  the  provision of electric power and energy by an
20    electric utility to retail  customers  outside  the  electric
21    utility's service area pursuant to Section 16-116.  Provided,
22    however,  contract  service does not include electric utility
23    services provided  pursuant  to  (i)  contracts  that  retail
24    customers are required to execute as a condition of receiving
25    tariffed   services,  or  (ii)  special  or  negotiated  rate
26    contracts for electric utility  services  that  were  entered
27    into  between an electric utility and a retail customer prior
28    to the effective date of this  amendatory  Act  of  1997  and
29    filed with the Commission.
30        "Delivery  services" means those services provided by the
31    electric  utility  that  are  necessary  in  order  for   the
32    transmission  and  distribution  systems  to function so that
33    retail customers located in the  electric  utility's  service
34    area  can  receive  electric  power and energy from suppliers
 
                            -4-                LRB9100188JSgc
 1    other than the electric utility, and shall  include,  without
 2    limitation, standard metering and billing services.
 3        "Electric  utility" means a public utility, as defined in
 4    Section 3-105 of this Act, that  has  a  franchise,  license,
 5    permit  or  right  to  furnish  or sell electricity to retail
 6    customers within a service area.
 7        "Mandatory transition period" means the period  from  the
 8    effective date of this amendatory Act of 1997 through January
 9    1, 2005.
10        "Municipal  system"  shall  have the meaning set forth in
11    Section 17-100.
12        "Real-time pricing" means charges for delivered  electric
13    power  and  energy  that  vary  on  an hour-to-hour basis for
14    nonresidential retail customers and that vary on  a  periodic
15    basis during the day for residential retail customers.
16        "Retail  customer"  means  a single entity using electric
17    power or energy at a single premises and that (A) either  (i)
18    is receiving or is eligible to receive tariffed services from
19    an  electric  utility,  or (ii) that is served by a municipal
20    system or electric cooperative within any area in  which  the
21    municipal  system  or  electric  cooperative  is  or would be
22    entitled  to  provide  service  under  the  law   in   effect
23    immediately  prior  to  the effective date of this amendatory
24    Act of 1997, or (B) an entity which on the effective date  of
25    this Act was receiving electric service from a public utility
26    and   (i)   was  engaged  in  the   practice  of  resale  and
27    redistribution of such electricity within a building prior to
28    January 2, 1957, or (ii) was providing lighting  services  to
29    tenants in a multi-occupancy building, but only to the extent
30    such resale, redistribution or lighting service is authorized
31    by  the electric utility's tariffs that were on file with the
32    Commission on the effective date of this Act.
33        "Service area" means (i) the geographic area within which
34    an electric utility was lawfully entitled to provide electric
 
                            -5-                LRB9100188JSgc
 1    power and energy to retail customers as of the effective date
 2    of this  amendatory  Act  of  1997,  and  includes  (ii)  the
 3    location of any retail customer to which the electric utility
 4    was  lawfully  providing  electric  utility  services on such
 5    effective date.
 6        "Small   commercial   retail   customer"   means    those
 7    nonresidential   retail  customers  of  an  electric  utility
 8    consuming  15,000  kilowatt-hours  or  less  of   electricity
 9    annually in its service area.
10        "Tariffed  service"  means  services  provided  to retail
11    customers by an electric utility as defined by its  rates  on
12    file  with  the  Commission  pursuant  to  the  provisions of
13    Article IX of this Act, but  shall  not  include  competitive
14    services.
15        "Transition charge" means a charge expressed in cents per
16    kilowatt-hour  that  is calculated for a customer or class of
17    customers as follows for  each  year  in  which  an  electric
18    utility is entitled to recover transition charges as provided
19    in Section 16-108:
20             (1)  the  amount of revenue that an electric utility
21        would receive from the retail customer or customers if it
22        were serving such customers' electric  power  and  energy
23        requirements  as  a  tariffed service based on (A) all of
24        the customers' actual usage during the 3 years ending  90
25        days prior to the date on which such customers were first
26        eligible   for  delivery  services  pursuant  to  Section
27        16-104, and (B) on  (i)  the  base  rates  in  effect  on
28        October  1, 1996 (adjusted for the reductions required by
29        subsection (b)  of  Section  16-111,  for  any  reduction
30        resulting  from  a rate decrease under Section 16-101(b),
31        for any restatement of base  rates  made  in  conjunction
32        with   an  elimination  of  the  fuel  adjustment  clause
33        pursuant to subsection (b), (d), or (f) of Section  9-220
34        and  for  any  removal of decommissioning costs from base
 
                            -6-                LRB9100188JSgc
 1        rates  pursuant  to  Section  16-114)  and  any  separate
 2        automatic  rate   adjustment   riders   (other   than   a
 3        decommissioning  rate as defined in Section 16-114) under
 4        which the customers were  receiving  or,  had  they  been
 5        customers,  would have received electric power and energy
 6        from the electric utility  during  the  year  immediately
 7        preceding  the  date  on  which such customers were first
 8        eligible for delivery service pursuant to Section 16-104,
 9        or (ii) to the extent  applicable,  any  contract  rates,
10        including   contracts   or   rates  for  consolidated  or
11        aggregated  billing,  under  which  such  customers  were
12        receiving electric power and  energy  from  the  electric
13        utility during such year;
14             (2)  less  the amount of revenue, other than revenue
15        from transition charges and decommissioning  rates,  that
16        the  electric  utility  would  receive  from  such retail
17        customers for delivery services provided by the  electric
18        utility,  assuming  such  customers  were taking delivery
19        services for all of their usage, based  on  the  delivery
20        services  tariffs in effect during the year for which the
21        transition charge is being calculated and  on  the  usage
22        identified in paragraph (1);
23             (3)  less  the  market  value for the electric power
24        and energy that the electric utility would have  used  to
25        supply  all  of such customers' electric power and energy
26        requirements, as a tariffed service, based on  the  usage
27        identified  in  paragraph  (1),  with  such  market value
28        determined in accordance with Section 16-112 of this Act;
29             (4)  less the following amount which represents  the
30        amount  to  be attributed to new revenue sources and cost
31        reductions by the electric utility through the end of the
32        period for which transition costs are recovered  pursuant
33        to  Section  16-108, referred to in this Article XVI as a
34        "mitigation factor":
 
                            -7-                LRB9100188JSgc
 1                  (A)  for nonresidential  retail  customers,  an
 2             amount  equal  to  the  greater of (i) 0.5 cents per
 3             kilowatt-hour during  the  period  October  1,  1999
 4             through   December   31,   2004,   0.6   cents   per
 5             kilowatt-hour  in  calendar year 2005, and 0.9 cents
 6             per kilowatt-hour in calendar year 2006,  multiplied
 7             in  each  year  by the usage identified in paragraph
 8             (1), or  (ii)  an  amount  equal  to  the  following
 9             percentages  of  the amount produced by applying the
10             applicable base  rates  (adjusted  as  described  in
11             subparagraph  (1)(B))  or contract rate to the usage
12             identified in  paragraph  (1):  8%  for  the  period
13             October  1,  1999  through December 31, 2002, 10% in
14             calendar years 2003 and 2004, 11% in  calendar  year
15             2005 and 12% in calendar year 2006; and
16                  (B)  for   residential   retail  customers,  an
17             amount equal to the  following  percentages  of  the
18             amount produced by applying the base rates in effect
19             on   October  1,  1996  (adjusted  as  described  in
20             subparagraph (1)(B))  to  the  usage  identified  in
21             paragraph  (1):  (i)  6%  from  May  1, 2002 through
22             December 31, 2002, (ii) 7% in  calendar  years  2003
23             and  2004,  (iii) 8% in calendar year 2005, and (iv)
24             10% in calendar year 2006;
25             (5)  divided  by  the  usage   of   such   customers
26        identified in paragraph (1),
27    provided  that the transition charge shall never be less than
28    zero.
29        "Unbundled service" means a component or constituent part
30    of a tariffed service which the electric utility subsequently
31    offers separately to its customers.
32    (Source: P.A. 90-561, eff. 12-16-97.)

33        (220 ILCS 5/16-115)
 
                            -8-                LRB9100188JSgc
 1        Sec. 16-115. Certification of alternative retail electric
 2    suppliers.
 3        (a)  An Any alternative  retail  electric  supplier  must
 4    obtain a certificate of service authority from the Commission
 5    in  accordance  with  this  Section before serving any retail
 6    customer or other user located in this State.  An alternative
 7    retail electric supplier may request, and the Commission  may
 8    grant,  a  certificate  of  service  authority for the entire
 9    State or for a specified geographic area of the State.
10        (b)  An alternative retail electric  supplier  seeking  a
11    certificate   of   service  authority  shall  file  with  the
12    Commission  a  verified  application  containing  information
13    showing that the applicant meets  the  requirements  of  this
14    Section.   The  alternative  retail  electric  supplier shall
15    publish notice of  its  application  in  the  official  State
16    newspaper  within  10  days following the date of its filing.
17    No later than 45 days after the application is properly filed
18    with the  Commission,  and  such  notice  is  published,  the
19    Commission  shall  issue  its  order  granting or denying the
20    application.
21        (c)  An  application  for  a   certificate   of   service
22    authority  shall  identify  the  area  or  areas in which the
23    applicant intends to offer service and the types of  services
24    it   intends   to  offer.   Applicants  that  seek  to  serve
25    residential or small commercial  retail  customers  within  a
26    geographic  area  that  is smaller than an electric utility's
27    service area shall submit  evidence  demonstrating  that  the
28    designation  of  this  smaller  area does not violate Section
29    16-115A. An applicant that  seeks  to  serve  residential  or
30    small   commercial   retail   customers   may  state  in  its
31    application for certification any limitations  that  will  be
32    imposed  on  the  number  of  customers or maximum load to be
33    served.
34        (d)  The Commission shall grant  the  application  for  a
 
                            -9-                LRB9100188JSgc
 1    certificate of service authority if it makes the findings set
 2    forth  in  this  subsection based on the verified application
 3    and such other information as the applicant may submit:
 4             (1)  That   the   applicant   possesses   sufficient
 5        technical,  financial  and   managerial   resources   and
 6        abilities  to  provide  the  service for which it seeks a
 7        certificate of service  authority.   In  determining  the
 8        level  of  technical,  financial and managerial resources
 9        and abilities which the applicant must  demonstrate,  the
10        Commission   shall   consider  (i)  the  characteristics,
11        including the size and financial sophistication,  of  the
12        customers  that  the  applicant  seeks to serve, and (ii)
13        whether the applicant seeks to provide electric power and
14        energy using property, plant and equipment which it owns,
15        controls or operates;
16             (2)  That  the  applicant  will  comply   with   all
17        applicable  federal,  State, regional and industry rules,
18        policies,  practices  and   procedures   for   the   use,
19        operation,  and  maintenance of the safety, integrity and
20        reliability, of the interconnected electric  transmission
21        system;
22             (3)  That the applicant will only provide service to
23        retail  customers  in  an electric utility's service area
24        that are eligible to take delivery  services  under  this
25        Act;
26             (4)  That   the  applicant  will  comply  with  such
27        informational or reporting requirements as the Commission
28        may  by  rule  establish  and  provide  the   information
29        required   by  Section  16-112.    Any  data  related  to
30        contracts for the purchase and sale of electric power and
31        energy shall be made available for review by the Staff of
32        the Commission on a confidential  and  proprietary  basis
33        and  only  to  the  extent and for the purposes which the
34        Commission determines are reasonably necessary  in  order
 
                            -10-               LRB9100188JSgc
 1        to carry out the purposes of this Act;
 2             (5)  That if the applicant, its corporate affiliates
 3        or  the  applicant's  principal source of electricity (to
 4        the extent such source  is  known  at  the  time  of  the
 5        application) owns or controls facilities, for public use,
 6        for  the  transmission  or distribution of electricity to
 7        end-users within  a  defined  geographic  area  to  which
 8        electric   power   and   energy  can  be  physically  and
 9        economically  delivered  by  the  electric   utility   or
10        utilities  in  whose  service  area or areas the proposed
11        service will be offered,  the  applicant,  its  corporate
12        affiliates  or  principal  source  of electricity, as the
13        case may be, provides delivery services to  the  electric
14        utility  or  utilities in whose service area or areas the
15        proposed service will  be  offered  that  are  reasonably
16        comparable  to those offered by the electric utility, and
17        provided further, that the applicant  agrees  to  certify
18        annually  to  the  Commission  that  it  is continuing to
19        provide such  delivery  services  and  that  it  has  not
20        knowingly  assisted  any  person  or  entity to avoid the
21        requirements of  this  Section.   For  purposes  of  this
22        subparagraph,  "principal  source  of  electricity" shall
23        mean a single source that supplies at least  65%  of  the
24        applicant's  electric  power and energy, and the purchase
25        of transmission and distribution services pursuant  to  a
26        filed tariff under the jurisdiction of the Federal Energy
27        Regulatory   Commission   or   a   state  public  utility
28        commission shall not constitute control of access to  the
29        provider's transmission and distribution facilities;
30             (6)  With  respect  to  an  applicant  that seeks to
31        serve residential or small commercial  retail  customers,
32        that  the  area  to  be  served  by the applicant and any
33        limitations it proposes on the  number  of  customers  or
34        maximum  amount  of load to be served meet the provisions
 
                            -11-               LRB9100188JSgc
 1        of Section 16-115A, provided,  that  the  Commission  can
 2        extend  the  time  for  considering  such  a  certificate
 3        request  by  up  to 90 days, and can schedule hearings on
 4        such a request;
 5             (7)  That the applicant meets  the  requirements  of
 6        subsection (a) of Section 16-128; and
 7             (8)  That  the  applicant will comply with all other
 8        applicable laws and regulations.
 9        (e)  A  retail  customer  that  owns  a  cogeneration  or
10    self-generation facility and that seeks certification only to
11    provide electric power  and  energy  from  such  facility  to
12    retail  customers  at  separate locations which customers are
13    both (i)  owned  by,  or  a  subsidiary  or  other  corporate
14    affiliate  of,  such applicant and (ii) eligible for delivery
15    services, shall be granted a certificate of service authority
16    upon filing an application and notifying the Commission  that
17    it  has  entered into an agreement with the relevant electric
18    utilities pursuant to Section 16-118.
19        (f)  The  Commission  shall   have   the   authority   to
20    promulgate  rules and regulations to carry out the provisions
21    of this Section.  On or before May 1,  1999,  the  Commission
22    shall  adopt  a rule or rules applicable to the certification
23    of those alternative retail electric suppliers that  seek  to
24    serve  only  nonresidential  retail  customers  with  maximum
25    electrical  demands  of  one  megawatt  or  more  which shall
26    provide for (i)  expedited  and  streamlined  procedures  for
27    certification  of  such alternative retail electric suppliers
28    and  (ii)  specific  criteria  which,  if  met  by  any  such
29    alternative retail electric supplier,  shall  constitute  the
30    demonstration   of   technical,   financial   and  managerial
31    resources  and  abilities  to  provide  service  required  by
32    subsection (d) (1) of this Section, such as a requirement  to
33    post a bond or letter of credit, from a responsible surety or
34    financial  institution, of sufficient size for the nature and
 
                            -12-               LRB9100188JSgc
 1    scope of  the  services  to  be  provided;  demonstration  of
 2    adequate  insurance  for the scope and nature of the services
 3    to be provided; and experience in providing similar  services
 4    in other jurisdictions.
 5    (Source: P.A. 90-561, eff. 12-16-97.)

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