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91_HB3027eng HB3027 Engrossed LRB9109967JSpc 1 AN ACT to amend the Public Utilities Act by changing 2 Sections 16-108 and 16-109. 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 16-108 and 16-109 as follows: 7 (220 ILCS 5/16-108) 8 Sec. 16-108. Recovery of costs associated with the 9 provision of delivery services. 10 (a) An electric utility shall file a delivery services 11 tariff with the Commission at least 210 days prior to the 12 date that it is required to begin offering such services 13 pursuant to this Act. An electric utility shall provide the 14 components of delivery services that are subject to the 15 jurisdiction of the Federal Energy Regulatory Commission at 16 the same prices, terms and conditions set forth in its 17 applicable tariff as approved or allowed into effect by that 18 Commission. The Commission shall otherwise have the authority 19 pursuant to Article IX to review, approve, and modify the 20 prices, terms and conditions of those components of delivery 21 services not subject to the jurisdiction of the Federal 22 Energy Regulatory Commission, including the authority to 23 determine the extent to which such delivery services should 24 be offered on an unbundled basis. In making any such 25 determination the Commission shall consider, at a minimum, 26 the effect of additional unbundling on (i) the objective of 27 just and reasonable rates, (ii) electric utility employees, 28 and (iii) the development of competitive markets for electric 29 energy services in Illinois. The Commission, however, may not 30 issue a final order regarding the offering of delivery 31 services on an unbundled basis before January 1, 2003. HB3027 Engrossed -2- LRB9109967JSpc 1 (b) The Commission shall enter an order approving, or 2 approving as modified, the delivery services tariff no later 3 than 30 days prior to the date on which the electric utility 4 must commence offering such services. The Commission may 5 subsequently modify such tariff pursuant to this Act. 6 (c) The electric utility's tariffs shall define the 7 classes of its customers for purposes of delivery services 8 charges. Delivery services shall be priced and made 9 available to all retail customers electing delivery services 10 in each such class on a nondiscriminatory basis regardless of 11 whether the retail customer chooses the electric utility, an 12 affiliate of the electric utility, or another entity as its 13 supplier of electric power and energy. Charges for delivery 14 services shall be cost based, and shall allow the electric 15 utility to recover the costs of providing delivery services 16 through its charges to its delivery service customers that 17 use the facilities and services associated with such costs. 18 Such costs shall include the costs of owning, operating and 19 maintaining transmission and distribution facilities. The 20 Commission shall also be authorized to consider whether, and 21 if so to what extent, the following costs are appropriately 22 included in the electric utility's delivery services rates: 23 (i) the costs of that portion of generation facilities used 24 for the production and absorption of reactive power in order 25 that retail customers located in the electric utility's 26 service area can receive electric power and energy from 27 suppliers other than the electric utility, and (ii) the costs 28 associated with the use and redispatch of generation 29 facilities to mitigate constraints on the transmission or 30 distribution system in order that retail customers located in 31 the electric utility's service area can receive electric 32 power and energy from suppliers other than the electric 33 utility. Nothing in this subsection shall be construed as 34 directing the Commission to allocate any of the costs HB3027 Engrossed -3- LRB9109967JSpc 1 described in (i) or (ii) that are found to be appropriately 2 included in the electric utility's delivery services rates to 3 any particular customer group or geographic area in setting 4 delivery services rates. 5 (d) The Commission shall establish charges, terms and 6 conditions for delivery services that are just and reasonable 7 and shall take into account customer impacts when 8 establishing such charges. In establishing charges, terms and 9 conditions for delivery services, the Commission shall take 10 into account voltage level differences. A retail customer 11 shall have the option to request to purchase electric service 12 at any delivery service voltage reasonably and technically 13 feasible from the electric facilities serving that customer's 14 premises provided that there are no significant adverse 15 impacts upon system reliability or system efficiency. A 16 retail customer shall also have the option to request to 17 purchase electric service at any point of delivery that is 18 reasonably and technically feasible provided that there are 19 no significant adverse impacts on system reliability or 20 efficiency. Such requests shall not be unreasonably denied. 21 (e) Electric utilities shall recover the costs of 22 installing, operating or maintaining facilities for the 23 particular benefit of one or more delivery services 24 customers, including without limitation any costs incurred in 25 complying with a customer's request to be served at a 26 different voltage level, directly from the retail customer or 27 customers for whose benefit the costs were incurred, to the 28 extent such costs are not recovered through the charges 29 referred to in subsections (c) and (d) of this Section. 30 (f) An electric utility shall be entitled but not 31 required to implement transition charges in conjunction with 32 the offering of delivery services pursuant to Section 16-104. 33 If an electric utility implements transition charges, it 34 shall implement such charges for all delivery services HB3027 Engrossed -4- LRB9109967JSpc 1 customers and for all customers described in subsection (h), 2 but shall not implement transition charges for power and 3 energy that a retail customer takes from cogeneration or 4 self-generation facilities located on that retail customer's 5 premises, if such facilities meet the following criteria: 6 (i) the cogeneration or self-generation facilities 7 serve a single retail customer and are located on that 8 retail customer's premises (for purposes of this 9 subparagraph and subparagraph (ii), an industrial or 10 manufacturing retail customer and a third party 11 contractor that is served by such industrial or 12 manufacturing customer through such retail customer's own 13 electrical distribution facilities under the 14 circumstances described in subsection (vi) of the 15 definition of "alternative retail electric supplier" set 16 forth in Section 16-102, shall be considered a single 17 retail customer); 18 (ii) the cogeneration or self-generation facilities 19 either (A) are sized pursuant to generally accepted 20 engineering standards for the retail customer's 21 electrical load at that premises (taking into account 22 standby or other reliability considerations related to 23 that retail customer's operations at that site) or (B) if 24 the facility is a cogeneration facility located on the 25 retail customer's premises, the retail customer is the 26 thermal host for that facility and the facility has been 27 designed to meet that retail customer's thermal energy 28 requirements resulting in electrical output beyond that 29 retail customer's electrical demand at that premises, 30 comply with the operating and efficiency standards 31 applicable to "qualifying facilities" specified in title 32 18 Code of Federal Regulations Section 292.205 as in 33 effect on the effective date of this amendatory Act of 34 1999; HB3027 Engrossed -5- LRB9109967JSpc 1 (iii) the retail customer on whose premises the 2 facilities are located either has an exclusive right to 3 receive, and corresponding obligation to pay for, all of 4 the electrical capacity of the facility, or in the case 5 of a cogeneration facility that has been designed to meet 6 the retail customer's thermal energy requirements at that 7 premises, an identified amount of the electrical capacity 8 of the facility, over a minimum 5-year period; and 9 (iv) if the cogeneration facility is sized for the 10 retail customer's thermal load at that premises but 11 exceeds the electrical load, any sales of excess power or 12 energy are made only at wholesale, are subject to the 13 jurisdiction of the Federal Energy Regulatory Commission, 14 and are not for the purpose of circumventing the 15 provisions of this subsection (f). 16 If a generation facility located at a retail customer's 17 premises does not meet the above criteria, an electric 18 utility implementing transition charges shall implement a 19 transition charge until December 31, 2006 for any power and 20 energy taken by such retail customer from such facility as if 21 such power and energy had been delivered by the electric 22 utility. Provided, however, that an industrial retail 23 customer that is taking power from a generation facility that 24 does not meet the above criteria but that is located on such 25 customer's premises will not be subject to a transition 26 charge for the power and energy taken by such retail customer 27 from such generation facility if the facility does not serve 28 any other retail customer and either was installed on behalf 29 of the customer and for its own use prior to January 1, 1997, 30 or is both predominantly fueled by byproducts of such 31 customer's manufacturing process at such premises and sells 32 or offers an average of 300 megawatts or more of electricity 33 produced from such generation facility into the wholesale 34 market. Such charges shall be calculated as provided in HB3027 Engrossed -6- LRB9109967JSpc 1 Section 16-102, and shall be collected on each kilowatt-hour 2 delivered under a delivery services tariff to a retail 3 customer from the date the customer first takes delivery 4 services until December 31, 2006 except as provided in 5 subsection (h) of this Section. Provided, however, that an 6 electric utility, other than an electric utility providing 7 service to at least 1,000,000 customers in this State on 8 January 1, 1999, shall be entitled to petition for entry of 9 an order by the Commission authorizing the electric utility 10 to implement transition charges for an additional period 11 ending no later than December 31, 2008. The electric utility 12 shall file its petition with supporting evidence no earlier 13 than 16 months, and no later than 12 months, prior to 14 December 31, 2006. The Commission shall hold a hearing on 15 the electric utility's petition and shall enter its order no 16 later than 8 months after the petition is filed. The 17 Commission shall determine whether and to what extent the 18 electric utility shall be authorized to implement transition 19 charges for an additional period. The Commission may 20 authorize the electric utility to implement transition 21 charges for some or all of the additional period, and shall 22 determine the mitigation factors to be used in implementing 23 such transition charges; provided, that the Commission shall 24 not authorize mitigation factors less than 110% of those in 25 effect during the 12 months ended December 31, 2006. In 26 making its determination, the Commission shall consider the 27 following factors: the necessity to implement transition 28 charges for an additional period in order to maintain the 29 financial integrity of the electric utility; the prudence of 30 the electric utility's actions in reducing its costs since 31 the effective date of this amendatory Act of 1997; the 32 ability of the electric utility to provide safe, adequate and 33 reliable service to retail customers in its service area; and 34 the impact on competition of allowing the electric utility to HB3027 Engrossed -7- LRB9109967JSpc 1 implement transition charges for the additional period. 2 (g) The electric utility shall file tariffs that 3 establish the transition charges to be paid by each class of 4 customers to the electric utility in conjunction with the 5 provision of delivery services. The electric utility's 6 tariffs shall define the classes of its customers for 7 purposes of calculating transition charges. The electric 8 utility's tariffs shall provide for the calculation of 9 transition charges on a customer-specific basis for any 10 retail customer whose average monthly maximum electrical 11 demand on the electric utility's system during the 6 months 12 with the customer's highest monthly maximum electrical 13 demands equals or exceeds 3.0 megawatts for electric 14 utilities having more than 1,000,000 customers, and for other 15 electric utilities for any customer that has an average 16 monthly maximum electrical demand on the electric utility's 17 system of one megawatt or more, and (A) for which there 18 exists data on the customer's usage during the 3 years 19 preceding the date that the customer became eligible to take 20 delivery services, or (B) for which there does not exist data 21 on the customer's usage during the 3 years preceding the date 22 that the customer became eligible to take delivery services, 23 if in the electric utility's reasonable judgment there exists 24 comparable usage information or a sufficient basis to develop 25 such information, and further provided that the electric 26 utility can require customers for which an individual 27 calculation is made to sign contracts that set forth the 28 transition charges to be paid by the customer to the electric 29 utility pursuant to the tariff. 30 (h) An electric utility shall also be entitled to file 31 tariffs that allow it to collect transition charges from 32 retail customers in the electric utility's service area that 33 do not take delivery services but that take electric power or 34 energy from an alternative retail electric supplier or from HB3027 Engrossed -8- LRB9109967JSpc 1 an electric utility other than the electric utility in whose 2 service area the customer is located. Such charges shall be 3 calculated, in accordance with the definition of transition 4 charges in Section 16-102, for the period of time that the 5 customer would be obligated to pay transition charges if it 6 were taking delivery services, except that no deduction for 7 delivery services revenues shall be made in such calculation, 8 and usage data from the customer's class shall be used where 9 historical usage data is not available for the individual 10 customer. The customer shall be obligated to pay such 11 charges on a lump sum basis on or before the date on which 12 the customer commences to take service from the alternative 13 retail electric supplier or other electric utility, provided, 14 that the electric utility in whose service area the customer 15 is located shall offer the customer the option of signing a 16 contract pursuant to which the customer pays such charges 17 ratably over the period in which the charges would otherwise 18 have applied. 19 (i) An electric utility shall be entitled to add to the 20 bills of delivery services customers charges pursuant to 21 Sections 9-221, 9-222 (except as provided in Section 22 9-222.1), and Section 16-114 of this Act, Section 5-5 of the 23 Electricity Infrastructure Maintenance Fee Law, Section 6-5 24 of the Renewable Energy, Energy Efficiency, and Coal 25 Resources Development Law of 1997, and Section 13 of the 26 Energy Assistance Act of 1989. 27 (j) If a retail customer that obtains electric power and 28 energy from cogeneration or self-generation facilities 29 installed for its own use on or before January 1, 1997, 30 subsequently takes service from an alternative retail 31 electric supplier or an electric utility other than the 32 electric utility in whose service area the customer is 33 located for any portion of the customer's electric power and 34 energy requirements formerly obtained from those facilities HB3027 Engrossed -9- LRB9109967JSpc 1 (including that amount purchased from the utility in lieu of 2 such generation and not as standby power purchases, under a 3 cogeneration displacement tariff in effect as of the 4 effective date of this amendatory Act of 1997), the 5 transition charges otherwise applicable pursuant to 6 subsections (f), (g), or (h) of this Section shall not be 7 applicable in any year to that portion of the customer's 8 electric power and energy requirements formerly obtained from 9 those facilities, provided, that for purposes of this 10 subsection (j), such portion shall not exceed the average 11 number of kilowatt-hours per year obtained from the 12 cogeneration or self-generation facilities during the 3 years 13 prior to the date on which the customer became eligible for 14 delivery services, except as provided in subsection (f) of 15 Section 16-110. 16 (Source: P.A. 90-561, eff. 12-16-97; 91-50, eff. 6-30-99.) 17 (220 ILCS 5/16-109) 18 Sec. 16-109. Unbundling of delivery services; Commission 19 review. The General Assembly finds that the offering of 20 delivery services will, and is intended to, facilitate the 21 development of competition for generation services, and that 22 competition may develop for other services currently offered 23 on a tariffed basis by the electric utility. The Commission 24 shall open a proceeding to investigate the need for and 25 desirability of different or additional unbundling of 26 delivery services for some or all electric utilities 3 years 27 from the date that a tariff for delivery services is first 28 approved or allowed into effect pursuant to this Section, 29 however, the Commission may not issue a final order in an 30 investigation proceeding before January 1, 2003. The 31 Commission shall open an additional proceeding to again 32 investigate the need for and desirability of different or 33 additional unbundling of delivery services for some or all HB3027 Engrossed -10- LRB9109967JSpc 1 electric utilities, 3 years after the entry of its final 2 order in the first investigation proceeding. In any 3 additional investigation proceeding, the Commission shall 4 issue its final orderin each investigation proceedingno 5 later than 6 months after the proceeding is initiated. In 6 each such proceeding the Commission shall consider, at a 7 minimum, the effect of additional unbundling on (i) the 8 objective of just and reasonable rates, (ii) electric utility 9 employees, and (iii) the development of competitive markets 10 for electric energy services in Illinois. Specific changes 11 to the delivery services tariffs of individual electric 12 utilities to implement findings and directives stated in an 13 order in an investigation proceeding initiated under this 14 Section shall be addressed through individual electric 15 utility tariff filings. The Commission may also, in 16 accordance with Section 16-108, upon complaint or upon its 17 own initiative without complaint, upon reasonable notice, 18 enter upon a hearing concerning the need and desirability of 19 requiring additional or other unbundling of delivery services 20 offered by electric utilities. 21 (Source: P.A. 90-561, eff. 12-16-97.) 22 Section 99. Effective date. This Act takes effect upon 23 becoming law.