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91_SB0024eng SB24 Engrossed 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 inFor the purposes9ofthis 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 SB24 Engrossed -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 SB24 Engrossed -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 SB24 Engrossed -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 SB24 Engrossed -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 SB24 Engrossed -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": SB24 Engrossed -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) SB24 Engrossed -8- LRB9100188JSgc 1 Sec. 16-115. Certification of alternative retail electric 2 suppliers. 3 (a) AnAnyalternative 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 SB24 Engrossed -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 SB24 Engrossed -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 SB24 Engrossed -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 SB24 Engrossed -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.)