Public Act 90-0561 of the 90th General Assembly
Public Act 90-0561
HB0362 Enrolled LRB9002496JScc
AN ACT in relation to the competitive provision of
utility services, amending named Acts.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
ARTICLE I
Section 5. The Public Utilities Act is amended by adding
Articles XVI, XVII, and XVIII as follows:
(220 ILCS 5/Art. XVI heading new)
ARTICLE XVI. ELECTRIC SERVICE CUSTOMER CHOICE AND RATE
RELIEF LAW OF 1997
(220 ILCS 5/16-101 new)
Sec. 16-101. Short title and applicability.
(a) This Article may be cited as the Electric Service
Customer Choice and Rate Relief Law of 1997 and shall apply
to electric utilities and alternative retail electric
suppliers as defined in this Article. Except to the extent
modified or supplemented by the provisions of this Article,
or where the context clearly renders such provisions
inapplicable, the other Articles of the Public Utilities Act
pertaining to public utilities, public utility rates and
services and the regulation thereof, are fully and equally
applicable to the tariffed services electric utilities
provide.
(b) The provisions of subsections (a) through (h) of
Section 16-111 of this Act shall not be applicable to any
electric utility which elects to file biennial rate
proceedings before the Commission in the years 1998, 2000 and
2002. An electric utility electing this option shall do so
by filing a notice of such election with the Commission
within 60 days after the effective date of this amendatory
Act of 1997, or its right to make such election shall be
irrevocably waived. An electric utility electing the option
specified in this paragraph shall file its rate proceeding
with the Commission no later than August 1 of the years 1998,
2000, and 2002. The electric utility's filing shall comply
with all requirements of 83 Illinois Administrative Code
Parts 255 and 285 as though the electric utility were filing
for an increase in its rates, without regard to whether such
filing would produce an increase, a decrease or no change in
the electric utility's rates and the Commission shall review
the electric utility's filing and shall issue its order in
accordance with the provisions of Section 9-201 of this Act.
(220 ILCS 5/16-101A new)
Sec. 16-101A. Legislative findings.
(a) The citizens and businesses of the State of Illinois
have been well-served by a comprehensive electrical utility
system which has provided safe, reliable, and affordable
service. The electrical utility system in the State of
Illinois has historically been subject to State and federal
regulation, aimed at assuring the citizens and businesses of
the State of safe, reliable, and affordable service, while at
the same time assuring the utility system of a return on its
investment.
(b) Competitive forces are affecting the market for
electricity as a result of recent federal regulatory and
statutory changes and the activities of other states.
Competition in the electric services market may create
opportunities for new products and services for customers and
lower costs for users of electricity. Long-standing
regulatory relationships need to be altered to accommodate
the competition that could fundamentally alter the structure
of the electric services market.
(c) With the advent of increasing competition in this
industry, the State has a continued interest in assuring that
the safety, reliability, and affordability of electrical
power is not sacrificed to competitive pressures, and to that
end, intends to implement safeguards to assure that the
industry continues to operate the electrical system in a
manner that will serve the public's interest. Under the
existing regulatory framework, the industry has been
encouraged to undertake certain investments in its physical
plant and personnel to enhance its efficient operation, the
cost of which it has been permitted to pass on to consumers.
The State has an interest in providing the existing utilities
a reasonable opportunity to obtain a return on certain
investments on which they depended in undertaking those
commitments in the first instance while, at the same time,
not permitting new entrants into the industry to take
unreasonable advantage of the investments made by the
formerly regulated industry.
(d) A competitive wholesale and retail market must
benefit all Illinois citizens. The Illinois Commerce
Commission should act to promote the development of an
effectively competitive electricity market that operates
efficiently and is equitable to all consumers. Consumer
protections must be in place to ensure that all customers
continue to receive safe, reliable, affordable, and
environmentally safe electric service.
(e) All consumers must benefit in an equitable and
timely fashion from the lower costs for electricity that
result from retail and wholesale competition and receive
sufficient information to make informed choices among
suppliers and services. The use of renewable resources and
energy efficiency resources should be encouraged in
competitive markets.
(220 ILCS 5/16-102 new)
Sec. 16-102. Definitions. For the purposes of this
Article the following terms shall be defined as set forth in
this Section.
"Alternative retail electric supplier" means every
person, cooperative, corporation, municipal corporation,
company, association, joint stock company or association,
firm, partnership, individual, or other entity, their
lessees, trustees, or receivers appointed by any court
whatsoever, that offers electric power or energy for sale,
lease or in exchange for other value received to one or more
retail customers, or that engages in the delivery or
furnishing of electric power or energy to such retail
customers, and shall include, without limitation, resellers,
aggregators and power marketers, but shall not include (i)
electric utilities (or any agent of the electric utility to
the extent the electric utility provides tariffed services to
retail customers through that agent), (ii) any electric
cooperative or municipal system as defined in Section 17-100
to the extent that the electric cooperative or municipal
system is serving retail customers within any area in which
it is or would be entitled to provide service under the law
in effect immediately prior to the effective date of this
amendatory Act of 1997, (iii) a public utility that is owned
and operated by any public institution of higher education of
this State, or a public utility that is owned by such public
institution of higher education and operated by any of its
lessees or operating agents, within any area in which it is
or would be entitled to provide service under the law in
effect immediately prior to the effective date of this
amendatory Act of 1997, (iv) any retail customer to the
extent that customer obtains its electric power and energy
from its own cogeneration or self-generation facilities, (v)
any entity that sells or arranges for the installation of
cogeneration or self-generation facilities to be owned by a
retail customer described in subparagraph (iv), but only to
the extent the entity is engaged in selling or arranging for
such installation, or (vi) an industrial or manufacturing
customer that owns its own distribution facilities, to the
extent that the customer provides service from that
distribution system to a third-party contractor located on
the customer's premises that is integrally and predominantly
engaged in the customer's industrial or manufacturing
process; provided, that if the industrial or manufacturing
customer has elected delivery services, the customer shall
pay transition charges applicable to the electric power and
energy consumed by the third-party contractor unless such
charges are otherwise paid by the third party contractor,
which shall be calculated based on the usage of, and the base
rates or the contract rates applicable to, the third-party
contractor in accordance with Section 16-102.
"Base rates" means the rates for those tariffed services
that the electric utility is required to offer pursuant to
subsection (a) of Section 16-103 and that were identified in
a rate order for collection of the electric utility's base
rate revenue requirement, excluding (i) separate automatic
rate adjustment riders then in effect, (ii) special or
negotiated contract rates, (iii) delivery services tariffs
filed pursuant to Section 16-108, (iv) real-time pricing, or
(v) tariffs that were in effect prior to October 1, 1996 and
that based charges for services on an index or average of
other utilities' charges, but including (vi) any subsequent
redesign of such rates for tariffed services that is
authorized by the Commission after notice and hearing.
"Competitive service" includes (i) any service that has
been declared to be competitive pursuant to Section 16-113 of
this Act, (ii) contract service, and (iii) services, other
than tariffed services, that are related to, but not
necessary for, the provision of electric power and energy or
delivery services.
"Contract service" means (1) services, including the
provision of electric power and energy or other services,
that are provided by mutual agreement between an electric
utility and a retail customer that is located in the electric
utility's service area, provided that, delivery services
shall not be a contract service until such services are
declared competitive pursuant to Section 16-113; and also
means (2) the provision of electric power and energy by an
electric utility to retail customers outside the electric
utility's service area pursuant to Section 16-116. Provided,
however, contract service does not include electric utility
services provided pursuant to (i) contracts that retail
customers are required to execute as a condition of receiving
tariffed services, or (ii) special or negotiated rate
contracts for electric utility services that were entered
into between an electric utility and a retail customer prior
to the effective date of this amendatory Act of 1997 and
filed with the Commission.
"Delivery services" means those services provided by the
electric utility that are necessary in order for the
transmission and distribution systems to function so that
retail customers located in the electric utility's service
area can receive electric power and energy from suppliers
other than the electric utility, and shall include, without
limitation, standard metering and billing services.
"Electric utility" means a public utility, as defined in
Section 3-105 of this Act, that has a franchise, license,
permit or right to furnish or sell electricity to retail
customers within a service area.
"Mandatory transition period" means the period from the
effective date of this amendatory Act of 1997 through January
1, 2005.
"Municipal system" shall have the meaning set forth in
Section 17-100.
"Real-time pricing" means charges for delivered electric
power and energy that vary on an hour-to-hour basis for
nonresidential retail customers and that vary on a periodic
basis during the day for residential retail customers.
"Retail customer" means a single entity using electric
power or energy at a single premises and that (A) either (i)
is receiving or is eligible to receive tariffed services from
an electric utility, or (ii) that is served by a municipal
system or electric cooperative within any area in which the
municipal system or electric cooperative is or would be
entitled to provide service under the law in effect
immediately prior to the effective date of this amendatory
Act of 1997, or (B) an entity which on the effective date of
this Act was receiving electric service from a public utility
and (i) was engaged in the practice of resale and
redistribution of such electricity within a building prior to
January 2, 1957, or (ii) was providing lighting services to
tenants in a multi-occupancy building, but only to the extent
such resale, redistribution or lighting service is authorized
by the electric utility's tariffs that were on file with the
Commission on the effective date of this Act.
"Service area" means (i) the geographic area within which
an electric utility was lawfully entitled to provide electric
power and energy to retail customers as of the effective date
of this amendatory Act of 1997, and includes (ii) the
location of any retail customer to which the electric utility
was lawfully providing electric utility services on such
effective date.
"Small commercial retail customer" means those
nonresidential retail customers of an electric utility
consuming 15,000 kilowatt-hours or less of electricity
annually in its service area.
"Tariffed service" means services provided to retail
customers by an electric utility as defined by its rates on
file with the Commission pursuant to the provisions of
Article IX of this Act, but shall not include competitive
services.
"Transition charge" means a charge expressed in cents per
kilowatt-hour that is calculated for a customer or class of
customers as follows for each year in which an electric
utility is entitled to recover transition charges as provided
in Section 16-108:
(1) the amount of revenue that an electric utility
would receive from the retail customer or customers if it
were serving such customers' electric power and energy
requirements as a tariffed service based on (A) all of
the customers' actual usage during the 3 years ending 90
days prior to the date on which such customers were first
eligible for delivery services pursuant to Section
16-104, and (B) on (i) the base rates in effect on
October 1, 1996 (adjusted for the reductions required by
subsection (b) of Section 16-111, for any reduction
resulting from a rate decrease under Section 16-101(b),
for any restatement of base rates made in conjunction
with an elimination of the fuel adjustment clause
pursuant to subsection (b), (d), or (f) of Section 9-220
and for any removal of decommissioning costs from base
rates pursuant to Section 16-114) and any separate
automatic rate adjustment riders (other than a
decommissioning rate as defined in Section 16-114) under
which the customers were receiving or, had they been
customers, would have received electric power and energy
from the electric utility during the year immediately
preceding the date on which such customers were first
eligible for delivery service pursuant to Section 16-104,
or (ii) to the extent applicable, any contract rates,
including contracts or rates for consolidated or
aggregated billing, under which such customers were
receiving electric power and energy from the electric
utility during such year;
(2) less the amount of revenue, other than revenue
from transition charges and decommissioning rates, that
the electric utility would receive from such retail
customers for delivery services provided by the electric
utility, assuming such customers were taking delivery
services for all of their usage, based on the delivery
services tariffs in effect during the year for which the
transition charge is being calculated and on the usage
identified in paragraph (1);
(3) less the market value for the electric power
and energy that the electric utility would have used to
supply all of such customers' electric power and energy
requirements, as a tariffed service, based on the usage
identified in paragraph (1), with such market value
determined in accordance with Section 16-112 of this Act;
(4) less the following amount which represents the
amount to be attributed to new revenue sources and cost
reductions by the electric utility through the end of the
period for which transition costs are recovered pursuant
to Section 16-108, referred to in this Article XVI as a
"mitigation factor":
(A) for nonresidential retail customers, an
amount equal to the greater of (i) 0.5 cents per
kilowatt-hour during the period October 1, 1999
through December 31, 2004, 0.6 cents per
kilowatt-hour in calendar year 2005, and 0.9 cents
per kilowatt-hour in calendar year 2006, multiplied
in each year by the usage identified in paragraph
(1), or (ii) an amount equal to the following
percentages of the amount produced by applying the
applicable base rates (adjusted as described in
subparagraph (1)(B)) or contract rate to the usage
identified in paragraph (1): 8% for the period
October 1, 1999 through December 31, 2002, 10% in
calendar years 2003 and 2004, 11% in calendar year
2005 and 12% in calendar year 2006; and
(B) for residential retail customers, an
amount equal to the following percentages of the
amount produced by applying the base rates in effect
on October 1, 1996 (adjusted as described in
subparagraph (1)(B)) to the usage identified in
paragraph (1): (i) 6% from May 1, 2002 through
December 31, 2002, (ii) 7% in calendar years 2003
and 2004, (iii) 8% in calendar year 2005, and (iv)
10% in calendar year 2006;
(5) divided by the usage of such customers
identified in paragraph (1),
provided that the transition charge shall never be less than
zero.
"Unbundled service" means a component or constituent part
of a tariffed service which the electric utility subsequently
offers separately to its customers.
(220 ILCS 5/16-103 new)
Sec. 16-103. Service obligations of electric utilities.
(a) An electric utility shall continue offering to
retail customers each tariffed service that it offered as a
distinct and identifiable service on the effective date of
this amendatory Act of 1997 until the service is (i)
declared competitive pursuant to Section 16-113, or (ii)
abandoned pursuant to Section 8-508. Nothing in this
subsection shall be construed as limiting an electric
utility's right to propose, or the Commission's power to
approve, allow or order modifications in the rates, terms and
conditions for such services pursuant to Article IX or
Section 16-111 of this Act.
(b) An electric utility shall also offer, as tariffed
services, delivery services in accordance with this Article,
the power purchase options described in Section 16-110 and
real-time pricing as provided in Section 16-107.
(c) Notwithstanding any other provision of this Article,
each electric utility shall continue offering to all
residential customers and to all small commercial retail
customers in its service area, as a tariffed service, bundled
electric power and energy delivered to the customer's
premises consistent with the bundled utility service provided
by the electric utility on the effective date of this
amendatory Act of 1997. Upon declaration of the provision of
electric power and energy as competitive, the electric
utility shall continue to offer to such customers, as a
tariffed service, bundled service options at rates which
reflect recovery of all cost components for providing the
service. For those components of the service which have been
declared competitive, cost shall be the market based prices.
Market based prices as referred to herein shall mean, for
electric power and energy, either (i) those prices for
electric power and energy determined as provided in Section
16-112, or (ii) the electric utility's cost of obtaining the
electric power and energy at wholesale through a competitive
bidding or other arms-length acquisition process.
(d) Any residential or small commercial retail customer
which elects delivery services is entitled to return to the
electric utility's bundled utility tariffed service offering
provided in accordance with subsection (c) of this Section
upon payment of a reasonable administrative fee which shall
be set forth in the tariff, provided, however, that the
electric utility shall be entitled to impose the condition
that such customer may not elect delivery services for up to
24 months thereafter.
(e) The Commission shall not require an electric utility
to offer any tariffed service other than the services
required by this Section, and shall not require an electric
utility to offer any competitive service.
(220 ILCS 5/16-104 new)
Sec. 16-104. Delivery services transition plan. An
electric utility shall provide delivery services to retail
customers in accordance with the provisions of this Section.
(a) Each electric utility shall offer delivery services
to retail customers located in its service area in accordance
with the following provisions:
(1) On or before October 1, 1999, the electric
utility shall offer delivery services (i) to any
non-residential retail customer whose average monthly
maximum electrical demand on the electric utility's
system during the 6 months with the customer's highest
monthly maximum demands in the 12 months ending June 30,
1999 equals or exceeds 4 megawatts; (ii) to any
non-governmental, non-residential, commercial retail
customers under common ownership doing business at 10 or
more separate locations within the electric utility's
service area, if the aggregate coincident average monthly
maximum electrical demand of all such locations during
the 6 months with the customer's highest monthly maximum
electrical demands during the 12 months ending June 30,
1999 equals or exceeds 9.5 megawatts, provided, however,
that an electric utility's obligation to offer delivery
services under this clause (ii) shall not exceed 3.5% of
the maximum electric demand on the electric utility's
system in the 12 months ending June 30, 1999; and (iii)
to non-residential retail customers whose annual electric
energy use comprises 33% of the kilowatt-hour sales,
excluding the kilowatt-hour sales to customers described
in clauses (i) and (ii), to each non-residential retail
customer class of the electric utility.
(2) On or before October 1, 2000, the electric
utility shall offer delivery services to the eligible
governmental customers described in subsections (a) and
(b) of Section 16-125A if the aggregate coincident
average monthly maximum electrical demand of such
customers during the 6 months with the customers' highest
monthly maximum electrical demands during the 12 months
ending June 30, 2000 equals or exceeds 9.5 megawatts.
(3) On or before December 31, 2000, the electric
utility shall offer delivery services to all remaining
nonresidential retail customers in its service area.
(4) On or before May 1, 2002, the electric utility
shall offer delivery services to all residential retail
customers in its service area.
The loads and kilowatt-hour sales used for purposes of
this subsection shall be those for the 12 months ending June
30, 1999 for nonresidential retail customers. The electric
utility shall identify those customers to be offered delivery
service pursuant to clause (1)(iii) pursuant to a lottery or
other random nondiscriminatory selection process set forth in
the electric utility's delivery services implementation plan
pursuant to Section 16-105. Provided, that non-residential
retail customers under common ownership at separate locations
within the electric utility's service area may elect, prior
to the date the electric utility conducts the lottery or
other random selection process for purposes of clause
(1)(iii), to designate themselves as a common ownership
group, to be excluded from such lottery and to instead
participate in a separate lottery for such common ownership
group pursuant to which delivery services will be offered to
non-residential retail customers comprising 33% of the total
kilowatt-hour sales to the common ownership group on or
before October 1, 1999. For purposes of this subsection (a),
an electric utility may define "common ownership" to exclude
sites which are not part of the same business, provided, that
auxiliary establishments as defined in the Standard
Industrial Classification Manual published by the United
States Office of Management and Budget shall not be excluded.
(b) The electric utility shall allow the aggregation of
loads that are eligible for delivery services so long as such
aggregation meets the criteria for delivery of electric power
and energy applicable to the electric utility established by
the regional reliability council to which the electric
utility belongs, by an independent system operating
organization to which the electric utility belongs, or by
another organization responsible for overseeing the integrity
and reliability of the transmission system, as such criteria
are in effect from time to time. The Commission may adopt
rules and regulations governing the criteria for aggregation
of the loads utilizing delivery services, but its failure to
do so shall not preclude any eligible customer from electing
delivery services. The electric utility shall allow such
aggregation for any voluntary grouping of customers,
including without limitation those having a common agent with
contractual authority to purchase electric power and energy
and delivery services on behalf of all customers in the
grouping.
(c) An electric utility shall allow a retail customer
that generates power for its own use to include the
electrical demand obtained from the customer's cogeneration
or self-generation facilities that is coincident with the
retail customer's maximum monthly electrical demand on the
electric utility's system in any determination of the
customer's maximum monthly electrical demand for purposes of
determining when such retail customer shall be offered
delivery services pursuant to clause (i) of subparagraph (1)
of subsection (a) of this Section.
(d) The Commission shall establish charges, terms and
conditions for delivery services in accordance with Section
16-108.
(e) Subject to the terms and conditions which the
electric utility is entitled to impose in accordance with
Section 16-108, a retail customer that is eligible to elect
delivery services pursuant to subsection (a) may place all or
a portion of its electric power and energy requirements on
delivery services.
(f) An electric utility may require a retail customer
who elects to (i) use an alternative retail electric supplier
or another electric utility for some but not all of its
electric power or energy requirements, and (ii) use the
electric utility for any portion of its remaining electric
power and energy requirements, to place the portion of the
customer's electric power or energy requirement that is to be
served by the electric utility on a tariff containing charges
that are set to recover the lowest reasonably available cost
to the electric utility of acquiring electric power and
energy on the wholesale electric market to serve such
remaining portion of the customer's electric power and energy
requirement, reasonable compensation for arranging for and
providing such electric power or energy, and the electric
utility's other costs of providing service to such remaining
electric power and energy requirement.
(220 ILCS 5/16-105 new)
Sec. 16-105. Delivery services implementation plan. To
ensure the safe and orderly implementation of delivery
services, each electric utility shall submit to the
Commission no later than March 1, 1999, a delivery services
implementation plan for non-residential customers and no
later than August 1, 2001, a delivery services implementation
plan for residential customers. The delivery services
implementation plan shall detail the process and procedures
by which each electric utility will offer delivery services
to each customer class and shall be designed to insure an
orderly transition and the maintenance of reliable service.
The Commission shall enter an order approving, or approving
as modified, the delivery services implementation plan of
each electric utility no later than 60 days prior to the date
on which the electric utility must commence offering such
services.
(220 ILCS 5/16-106 new)
Sec. 16-106. Billing experiments. During the mandatory
transition period, an electric utility may at its discretion
conduct one or more experiments for the provision or billing
of services on a consolidated or aggregated basis, for the
provision of real-time pricing, or other billing or pricing
experiments, and may include experimental programs offered to
groups of retail customers possessing common attributes as
defined by the electric utility, such as the members of an
organization that was established to serve a well-defined
industry group, companies having multiple sites, or closely
located or affiliated buildings, provided that such groups
exist for a purpose other than obtaining energy services and
have been in existence for at least 10 years. The offering
of such a program by an electric utility to retail customers
participating in the program, and the participation by those
customers in the program, shall not create any right in any
other retail customer or group of customers to participate in
the same or a similar program. The Commission shall allow
such experiments to go into effect upon the filing by the
electric utility of a statement describing the program.
Nothing contained in this Section shall be deemed to prohibit
the electric utility from offering, or the Commission from
approving, experimental rates, tariffs and services in
addition to those allowed under this Section. The Commission
shall review and report annually the progress, participation
and effects of such experiments to the General Assembly.
Based upon its review, recommendations for modification of
such experiments may be made by the Commission to the
Illinois General Assembly.
(220 ILCS 5/16-107 new)
Sec. 16-107. Real-time pricing.
(a) Each electric utility shall file, on or before May
1, 1998, a tariff or tariffs which allow nonresidential
retail customers in the electric utility's service area to
elect real-time pricing beginning October 1, 1998.
(b) Each electric utility shall file, on or before May
1, 2000, a tariff or tariffs which allow residential retail
customers in the electric utility's service area to elect
real-time pricing beginning October 1, 2000.
(c) The electric utility's tariff or tariffs filed
pursuant to this Section shall be subject to Article IX.
(220 ILCS 5/16-108 new)
Sec. 16-108. Recovery of costs associated with the
provision of delivery services.
(a) An electric utility shall file a delivery services
tariff with the Commission at least 210 days prior to the
date that it is required to begin offering such services
pursuant to this Act. An electric utility shall provide the
components of delivery services that are subject to the
jurisdiction of the Federal Energy Regulatory Commission at
the same prices, terms and conditions set forth in its
applicable tariff as approved or allowed into effect by that
Commission. The Commission shall otherwise have the authority
pursuant to Article IX to review, approve, and modify the
prices, terms and conditions of those components of delivery
services not subject to the jurisdiction of the Federal
Energy Regulatory Commission, including the authority to
determine the extent to which such delivery services should
be offered on an unbundled basis. In making any such
determination the Commission shall consider, at a minimum,
the effect of additional unbundling on (i) the objective of
just and reasonable rates, (ii) electric utility employees,
and (iii) the development of competitive markets for electric
energy services in Illinois.
(b) The Commission shall enter an order approving, or
approving as modified, the delivery services tariff no later
than 30 days prior to the date on which the electric utility
must commence offering such services. The Commission may
subsequently modify such tariff pursuant to this Act.
(c) The electric utility's tariffs shall define the
classes of its customers for purposes of delivery services
charges. Delivery services shall be priced and made
available to all retail customers electing delivery services
in each such class on a nondiscriminatory basis regardless of
whether the retail customer chooses the electric utility, an
affiliate of the electric utility, or another entity as its
supplier of electric power and energy. Charges for delivery
services shall be cost based, and shall allow the electric
utility to recover the costs of providing delivery services
through its charges to its delivery service customers that
use the facilities and services associated with such costs.
Such costs shall include the costs of owning, operating and
maintaining transmission and distribution facilities. The
Commission shall also be authorized to consider whether, and
if so to what extent, the following costs are appropriately
included in the electric utility's delivery services rates:
(i) the costs of that portion of generation facilities used
for the production and absorption of reactive power in order
that retail customers located in the electric utility's
service area can receive electric power and energy from
suppliers other than the electric utility, and (ii) the costs
associated with the use and redispatch of generation
facilities to mitigate constraints on the transmission or
distribution system in order that retail customers located in
the electric utility's service area can receive electric
power and energy from suppliers other than the electric
utility. Nothing in this subsection shall be construed as
directing the Commission to allocate any of the costs
described in (i) or (ii) that are found to be appropriately
included in the electric utility's delivery services rates to
any particular customer group or geographic area in setting
delivery services rates.
(d) The Commission shall establish charges, terms and
conditions for delivery services that are just and reasonable
and shall take into account customer impacts when
establishing such charges. In establishing charges, terms and
conditions for delivery services, the Commission shall take
into account voltage level differences. A retail customer
shall have the option to request to purchase electric service
at any delivery service voltage reasonably and technically
feasible from the electric facilities serving that customer's
premises provided that there are no significant adverse
impacts upon system reliability or system efficiency. A
retail customer shall also have the option to request to
purchase electric service at any point of delivery that is
reasonably and technically feasible provided that there are
no significant adverse impacts on system reliability or
efficiency. Such requests shall not be unreasonably denied.
(e) Electric utilities shall recover the costs of
installing, operating or maintaining facilities for the
particular benefit of one or more delivery services
customers, including without limitation any costs incurred in
complying with a customer's request to be served at a
different voltage level, directly from the retail customer or
customers for whose benefit the costs were incurred, to the
extent such costs are not recovered through the charges
referred to in subsections (c) and (d) of this Section.
(f) An electric utility shall be entitled but not
required to implement transition charges in conjunction with
the offering of delivery services pursuant to Section 16-104.
If an electric utility implements transition charges, it
shall implement such charges for all delivery services
customers and for all customers described in subsection (h).
Such charges shall be calculated as provided in Section
16-102, and shall be collected on each kilowatt-hour
delivered under a delivery services tariff to a retail
customer from the date the customer first takes delivery
services until December 31, 2006 except as provided in
subsection (h) of this Section. Provided, however, that an
electric utility shall be entitled to petition for entry of
an order by the Commission authorizing the electric utility
to implement transition charges for an additional period
ending no later than December 31, 2008. The electric utility
shall file its petition with supporting evidence no earlier
than 16 months, and no later than 12 months, prior to
December 31, 2006. The Commission shall hold a hearing on
the electric utility's petition and shall enter its order no
later than 8 months after the petition is filed. The
Commission shall determine whether and to what extent the
electric utility shall be authorized to implement transition
charges for an additional period. The Commission may
authorize the electric utility to implement transition
charges for some or all of the additional period, and shall
determine the mitigation factors to be used in implementing
such transition charges; provided, that the Commission shall
not authorize mitigation factors less than 110% of those in
effect during the 12 months ended December 31, 2006. In
making its determination, the Commission shall consider the
following factors: the necessity to implement transition
charges for an additional period in order to maintain the
financial integrity of the electric utility; the prudence of
the electric utility's actions in reducing its costs since
the effective date of this amendatory Act of 1997; the
ability of the electric utility to provide safe, adequate and
reliable service to retail customers in its service area; and
the impact on competition of allowing the electric utility to
implement transition charges for the additional period.
(g) The electric utility shall file tariffs that
establish the transition charges to be paid by each class of
customers to the electric utility in conjunction with the
provision of delivery services. The electric utility's
tariffs shall define the classes of its customers for
purposes of calculating transition charges. The electric
utility's tariffs shall provide for the calculation of
transition charges on a customer-specific basis for any
retail customer whose average monthly maximum electrical
demand on the electric utility's system during the 6 months
with the customer's highest monthly maximum electrical
demands equals or exceeds 3.0 megawatts for electric
utilities having more than 1,000,000 customers, and for other
electric utilities for any customer that has an average
monthly maximum electrical demand on the electric utility's
system of one megawatt or more, and (A) for which there
exists data on the customer's usage during the 3 years
preceding the date that the customer became eligible to take
delivery services, or (B) for which there does not exist data
on the customer's usage during the 3 years preceding the date
that the customer became eligible to take delivery services,
if in the electric utility's reasonable judgment there exists
comparable usage information or a sufficient basis to develop
such information, and further provided that the electric
utility can require customers for which an individual
calculation is made to sign contracts that set forth the
transition charges to be paid by the customer to the electric
utility pursuant to the tariff.
(h) An electric utility shall also be entitled to file
tariffs that allow it to collect transition charges from
retail customers in the electric utility's service area that
do not take delivery services but that take electric power or
energy from an alternative retail electric supplier or from
an electric utility other than the electric utility in whose
service area the customer is located. Such charges shall be
calculated, in accordance with the definition of transition
charges in Section 16-102, for the period of time that the
customer would be obligated to pay transition charges if it
were taking delivery services, except that no deduction for
delivery services revenues shall be made in such calculation,
and usage data from the customer's class shall be used where
historical usage data is not available for the individual
customer. The customer shall be obligated to pay such
charges on a lump sum basis on or before the date on which
the customer commences to take service from the alternative
retail electric supplier or other electric utility, provided,
that the electric utility in whose service area the customer
is located shall offer the customer the option of signing a
contract pursuant to which the customer pays such charges
ratably over the period in which the charges would otherwise
have applied.
(i) An electric utility shall be entitled to add to the
bills of delivery services customers charges pursuant to
Sections 9-221, 9-222 (except as provided in Section
9-222.1), and Section 16-114 of this Act, Section 5-5 of the
Electricity Infrastructure Maintenance Fee Law, Section 6-5
of the Renewable Energy, Energy Efficiency, and Coal
Resources Development Law of 1997, and Section 13 of the
Energy Assistance Act of 1989.
(j) If a retail customer that obtains electric power and
energy from cogeneration or self-generation facilities
installed for its own use on or before January 1, 1997,
subsequently takes service from an alternative retail
electric supplier or an electric utility other than the
electric utility in whose service area the customer is
located for any portion of the customer's electric power and
energy requirements formerly obtained from those facilities
(including that amount purchased from the utility in lieu of
such generation and not as standby power purchases, under a
cogeneration displacement tariff in effect as of the
effective date of this amendatory Act of 1997), the
transition charges otherwise applicable pursuant to
subsections (f), (g), or (h) of this Section shall not be
applicable in any year to that portion of the customer's
electric power and energy requirements formerly obtained from
those facilities, provided, that for purposes of this
subsection (j), such portion shall not exceed the average
number of kilowatt-hours per year obtained from the
cogeneration or self-generation facilities during the 3 years
prior to the date on which the customer became eligible for
delivery services, except as provided in subsection (f) of
Section 16-110.
(220 ILCS 5/16-109 new)
Sec. 16-109. Unbundling of delivery services; Commission
review. The General Assembly finds that the offering of
delivery services will, and is intended to, facilitate the
development of competition for generation services, and that
competition may develop for other services currently offered
on a tariffed basis by the electric utility. The Commission
shall open a proceeding to investigate the need for and
desirability of different or additional unbundling of
delivery services for some or all electric utilities 3 years
from the date that a tariff for delivery services is first
approved or allowed into effect pursuant to this Section.
The Commission shall open an additional proceeding to again
investigate the need for and desirability of different or
additional unbundling of delivery services for some or all
electric utilities, 3 years after the entry of its final
order in the first investigation proceeding. The Commission
shall issue its final order in each investigation proceeding
no later than 6 months after the proceeding is initiated. In
each such proceeding the Commission shall consider, at a
minimum, the effect of additional unbundling on (i) the
objective of just and reasonable rates, (ii) electric utility
employees, and (iii) the development of competitive markets
for electric energy services in Illinois. Specific changes
to the delivery services tariffs of individual electric
utilities to implement findings and directives stated in an
order in an investigation proceeding initiated under this
Section shall be addressed through individual electric
utility tariff filings. The Commission may also, in
accordance with Section 16-108, upon complaint or upon its
own initiative without complaint, upon reasonable notice,
enter upon a hearing concerning the need and desirability of
requiring additional or other unbundling of delivery services
offered by electric utilities.
(220 ILCS 5/16-109A new)
Sec. 16-109A. Unbundling of prices for tariffed
services; Commission investigation. In addition to the
unbundling authorized under Sections 16-108 and 16-109, the
Commission shall have the authority to investigate the need
for, and to require, the restructuring or unbundling of
prices for tariffed services, other than delivery services,
offered by an electric utility; provided, however, that the
Commission shall not enter an order requiring the
restructuring or unbundling of prices for any such tariffed
services for a customer class of an electric utility prior to
the date that the class first becomes eligible for delivery
services pursuant to Section 16-104.
(220 ILCS 5/16-110 new)
Sec. 16-110. Delivery services customer power purchase
options.
(a) Each electric utility shall offer a tariffed service
or services in accordance with the terms and conditions set
forth in this Section pursuant to which its non-residential
delivery services customers may purchase from the electric
utility an amount of electric power and energy that is equal
to or less than the amounts that are delivered by such
electric utility.
(b) Except as provided in subsection (o) of Section
16-112, a non-residential delivery services customer that is
paying transition charges to the electric utility shall be
permitted to purchase electric power and energy from the
electric utility at a price or prices equal to the sum of (i)
the market values that are determined for the electric
utility in accordance with Section 16-112 and used by the
electric utility to calculate the customer's transition
charges and (ii) a fee that compensates the electric utility
for any administrative costs it incurs in arranging to supply
such electric power and energy. The electric utility may
require that the customer purchase such electric power and
energy for periods of not less than one year and may also
require that the customer give up to 30 days notice for a
purchase of one year's duration, and 90 days notice for a
purchase of more than one year's duration. A non-residential
delivery service customer exercising the option described in
this subsection may sell or assign its interests in the
electric power or energy that the customer has purchased. At
least twice per year, each electric utility shall notify its
small commercial retail customers, through bill inserts and
other similar means, of their option to obtain electric power
and energy through purchases at market value pursuant to this
subsection.
(c) After the transition charge period applicable to a
non-residential delivery services customer, and until the
provision of electric power and energy is declared
competitive for the customer group to which the customer
belongs, a non-residential delivery services customer that
paid any transition charges it was legally obligated to pay
to an electric utility shall be permitted to purchase
electric power and energy from the electric utility for
contract periods of one year at a price or prices equal to
the sum of (i) the market value determined for that
customer's class pursuant to Section 16-112 and (ii) to the
extent it is not included in such market value, a fee to
compensate the electric utility for the service of arranging
the supply or purchase of such electric power and energy.
The electric utility may require that a delivery services
customer give the following notice for such a purchase: (i)
for a small commercial retail customer, not more than 30
days; (ii) for a nonresidential customer which is not a small
commercial retail customer but which has maximum electrical
demand of less than 500 kilowatts, not more than 6 months;
(iii) for a nonresidential customer with maximum electrical
demand of 500 kilowatts or more but less than one megawatt,
not more than 9 months; and (iv) for a nonresidential
customer with maximum electrical demand of one megawatt or
more, not more than one year. At least twice per year, each
electric utility shall notify its small commercial retail
customers, through bill inserts or other similar means, of
their option to obtain electric power and energy through
purchases at market value pursuant to this subsection.
(d) After the transition charge period applicable to a
non-residential delivery services customer, and until the
provision of electric power and energy is declared
competitive for the customer group to which the customer
belongs, a non-residential delivery services customer, other
than a small commercial retail customer, that paid any
transition charges it was legally obligated to pay to an
electric utility shall be permitted to purchase electric
power and energy from the electric utility for contract
periods of one year at a price or prices equal to (A) the sum
of (i) the electric utility's actual cost of procuring such
electric power and energy and (ii) a broker's fee to
compensate the electric utility for arranging the supply, or,
if the utility so elects, (B) the market value of electric
power or energy provided by the electric utility determined
as set forth in the electric utility's tariff for that
customer's class. The electric utility may require that the
delivery services customer give up to 30 days notice for such
a purchase.
(e) Each delivery services customer purchasing electric
power and energy from the electric utility pursuant to a
tariff filed in accordance with this Section shall also pay
all of the applicable charges set forth in the electric
utility's delivery services tariffs and any other tariffs
applicable to the services provided to that customer by the
electric utility.
(f) An electric utility can require a retail customer
taking delivery services that formerly generated electric
power and energy for its own use and that would not otherwise
pay transition charges on a portion of its electric power and
energy requirements served on delivery services to pay
transition charges on that portion of the customer's electric
power and energy requirements as a condition of exercising
the delivery services customer power purchase options set
forth in this Section.
(220 ILCS 5/16-111 new)
Sec. 16-111. Rates and restructuring transactions during
mandatory transition period.
(a) During the mandatory transition period,
notwithstanding any provision of Article IX of this Act, and
except as provided in subsections (b), (d), (e), and (f) of
this Section, the Commission shall not (i) initiate,
authorize or order any change by way of increase (other than
in connection with a request for rate increase which was
filed after September 1, 1997 but prior to October 15, 1997,
by an electric utility serving less than 12,500 customers in
this state), (ii) initiate or, unless requested by the
electric utility, authorize or order any change by way of
decrease, restructuring or unbundling (except as provided in
Section 16-109A), in the rates of any electric utility that
were in effect on October 1, 1996, or (iii) in any order
approving any application for a merger pursuant to Section
7-204 that was pending as of May 16, 1997, impose any
condition requiring any filing for an increase, decrease, or
change in, or other review of, an electric utility's rates or
enforce any such condition of any such order; provided,
however, that this subsection shall not prohibit the
Commission from:
(1) approving the application of an electric
utility to implement an alternative to rate of return
regulation or a regulatory mechanism that rewards or
penalizes the electric utility through adjustment of
rates based on utility performance, pursuant to Section
9-244;
(2) authorizing an electric utility to eliminate
its fuel adjustment clause and adjust its base rate
tariffs in accordance with subsection (b), (d), or (f) of
Section 9-220 of this Act, to fix its fuel adjustment
factor in accordance with subsection (c) of Section 9-220
of this Act, or to eliminate its fuel adjustment clause
in accordance with subsection (e) of Section 9-220 of
this Act;
(3) ordering into effect tariffs for delivery
services and transition charges in accordance with
Sections 16-104 and 16-108, for real-time pricing in
accordance with Section 16-107, or the options required
by Section 16-110 and subsection (n) of 16-112, allowing
a billing experiment in accordance with Section 16-106,
or modifying delivery services tariffs in accordance with
Section 16-109; or
(4) ordering or allowing into effect any tariff to
recover charges pursuant to Sections 9-201.5, 9-220.1,
9-221, 9-222 (except as provided in Section 9-222.1),
16-108, and 16-114 of this Act, Section 5-5 of the
Electricity Infrastructure Maintenance Fee Law, Section
6-5 of the Renewable Energy, Energy Efficiency, and Coal
Resources Development Law of 1997, and Section 13 of the
Energy Assistance Act of 1989.
(b) Notwithstanding the provisions of subsection (a),
each Illinois electric utility serving more than 12,500
customers in Illinois shall file tariffs (i) reducing,
effective August 1, 1998, each component of its base rates to
residential retail customers by 15% from the base rates in
effect immediately prior to January 1, 1998 and (ii) if the
public utility provides electric service to more than 500,000
customers in this State on the effective date of this
amendatory Act of 1997, reducing, effective May 1, 2002, each
component of its base rates to residential retail customers
by an additional 5% from the base rates in effect immediately
prior to January 1, 1998. Provided, however, that if an
electric utility's average residential retail rate is less
than or equal to the average residential retail rate for a
group of Midwest Utilities (consisting of all investor-owned
electric utilities with annual system peaks in excess of 1000
megawatts in the States of Illinois, Indiana, Iowa, Kentucky,
Michigan, Missouri, Ohio, and Wisconsin), based on data
reported on Form 1 to the Federal Energy Regulatory
Commission for calendar year 1995, then it shall only be
required to file tariffs (i) reducing, effective August 1,
1998, each component of its base rates to residential retail
customers by 5% from the base rates in effect immediately
prior to January 1, 1998, (ii) reducing, effective October 1,
2000, its base rates to residential retail customers by the
lesser of 5% of the base rates in effect immediately prior to
January 1, 1998 or the percentage by which the electric
utility's average residential retail rate exceeds the average
residential retail rate of the Midwest Utilities, based on
data reported on Form 1 to the Federal Energy Regulatory
Commission for calendar year 1999, and (iii) reducing,
effective October 1, 2002, each component of its base rates
to residential retail customers by an additional amount equal
to the lesser of 5% of the base rates in effect immediately
prior to January 1, 1998 or the percentage by which the
electric utility's average residential retail rate exceeds
the average residential retail rate of the Midwest Utilities,
based on data reported on Form 1 to the Federal Energy
Regulatory Commission for calendar year 2001. Provided,
further, that any electric utility for which a decrease in
base rates has been or is placed into effect between October
1, 1996 and the dates specified in the preceding sentences of
this subsection, other than pursuant to the requirements of
this subsection, shall be entitled to reduce the amount of
any reduction or reductions in its base rates required by
this subsection by the amount of such other decrease. The
tariffs required under this subsection shall be filed 45 days
in advance of the effective date. Notwithstanding anything to
the contrary in Section 9-220 of this Act, no restatement of
base rates in conjunction with the elimination of a fuel
adjustment clause under that Section shall result in a lesser
decrease in base rates than customers would otherwise receive
under this subsection had the electric utility's fuel
adjustment clause not been eliminated.
(c) Any utility reducing its base rates by 15% on August
1, 1998 pursuant to subsection (b) shall include the
following statement on its bills for residential customers
from August 1 through December 31, 1998: "Effective August 1,
1998, your rates have been reduced by 15% by the Electric
Service Customer Choice and Rate Relief Law of 1997 passed by
the Illinois General Assembly.". Any utility reducing its
base rates by 5% on August 1, 1998, pursuant to subsection
(b) shall include the following statement on its bills for
residential customers from August 1 through December 31,
1998: "Effective August 1, 1998, your rates have been
reduced by 5% by the Electric Service Customer Choice and
Rate Relief Law of 1997 passed by the Illinois General
Assembly.".
(d) During the mandatory transition period, but not
before January 1, 2000, and notwithstanding the provisions
of subsection (a), an electric utility may request an
increase in its base rates if the electric utility
demonstrates that the 2-year average of its earned rate of
return on common equity, calculated as its net income
applicable to common stock divided by the average of its
beginning and ending balances of common equity using data
reported in the electric utility's Form 1 report to the
Federal Energy Regulatory Commission but adjusted to remove
the effects of accelerated depreciation or amortization or
other transition or mitigation measures implemented by the
electric utility pursuant to subsection (g) of this Section
and the effect of any refund paid pursuant to subsection (e)
of this Section, is below the 2-year average for the same 2
years of the monthly average yields of 30-year U.S. Treasury
bonds published by the Board of Governors of the Federal
Reserve System in its weekly H.15 Statistical Release or
successor publication. The Commission shall review the
electric utility's request, and may review the justness and
reasonableness of all rates for tariffed services, in
accordance with the provisions of Article IX of this Act,
provided that the Commission shall consider any special or
negotiated adjustments to the revenue requirement agreed to
between the electric utility and the other parties to the
proceeding. In setting rates under this Section, the
Commission shall exclude the costs and revenues that are
associated with competitive services and any billing or
pricing experiments conducted under Section 16-106.
(e) For the purposes of this subsection (e) all
calculations and comparisons shall be performed for the
Illinois operations of multijurisdictional utilities. During
the mandatory transition period, notwithstanding the
provisions of subsection (a), if the 2-year average of an
electric utility's earned rate of return on common equity,
calculated as its net income applicable to common stock
divided by the average of its beginning and ending balances
of common equity using data reported in the electric
utility's Form 1 report to the Federal Energy Regulatory
Commission but adjusted to remove the effect of any refund
paid under this subsection (e), and further adjusted to
include the annual amortization of any difference between the
consideration received by an affiliated interest of the
electric utility in the sale of an asset which had been sold
or transferred by the electric utility to the affiliated
interest subsequent to the effective date of this amendatory
Act of 1997 and the consideration for which such asset had
been sold or transferred to the affiliated interest, with
such difference to be amortized ratably from the date of the
sale by the affiliated interest to December 31, 2006, exceeds
the 2-year average of the Index for the same 2 years by 1.5
or more percentage points, the electric utility shall make
refunds to customers beginning the first billing day of April
in the following year in the manner described in paragraph
(3) of this subsection. For purposes of this subsection (e),
the "Index" shall be the sum of (A) the average for the 12
months ended September 30 of the monthly average yields of
30-year U.S. Treasury bonds published by the Board of
Governors of the Federal Reserve System in its weekly H.15
Statistical Release or successor publication for each year
1998 through 2004, and (B) (i) 4.00 percentage points for
each of the 12-month periods ending September 30, 1998
through September 30, 1999 or (ii) 5.00 percentage points for
each of the 12-month periods ending September 30, 2000
through September 30, 2004.
(1) For purposes of this subsection (e), "excess
earnings" means the difference between (A) the 2-year
average of the electric utility's earned rate of return
on common equity, less (B) the 2-year average of the sum
of (i) the Index applicable to each of the 2 years and
(ii) 1.5 percentage points; provided, that "excess
earnings" shall never be less than zero.
(2) On or before March 31 of each year 2000 through
2005 each electric utility shall file a report with the
Commission showing its earned rate of return on common
equity, calculated in accordance with this subsection,
for the preceding calendar year and the average for the
preceding 2 calendar years.
(3) If an electric utility has excess earnings,
determined in accordance with paragraphs (1) and (2) of
this subsection, the refunds which the electric utility
shall pay to its customers beginning the first billing
day of April in the following year shall be calculated
and applied as follows:
(i) The electric utility's excess earnings
shall be multiplied by the average of the beginning
and ending balances of the electric utility's common
equity for the 2-year period in which excess
earnings occurred.
(ii) The result of the calculation in (i)
shall be multiplied by 0.50 and then divided by a
number equal to 1 minus the electric utility's
composite federal and State income tax rate.
(iii) The result of the calculation in (ii)
shall be divided by the sum of the electric
utility's projected total kilowatt-hour sales to
retail customers plus projected kilowatt-hours to be
delivered to delivery services customers over a one
year period beginning with the first billing date in
April in the succeeding year to determine a cents
per kilowatt-hour refund factor.
(iv) The cents per kilowatt-hour refund factor
calculated in (iii) shall be credited to the
electric utility's customers by applying the factor
on the customer's monthly bills to each
kilowatt-hour sold or delivered until the total
amount calculated in (ii) has been paid to
customers.
(f) During the mandatory transition period, an electric
utility may file revised tariffs reducing the price of any
tariffed service offered by the electric utility for all
customers taking that tariffed service, which shall be
effective 7 days after filing.
(g) During the mandatory transition period, an electric
utility may, without obtaining any approval of the Commission
other than that provided for in this subsection and
notwithstanding any other provision of this Act or any rule
or regulation of the Commission that would require such
approval:
(1) implement a reorganization, other than a merger
of 2 or more public utilities as defined in Section 3-105
or their holding companies;
(2) retire generating plants from service;
(3) sell, assign, lease or otherwise transfer
assets to an affiliated or unaffiliated entity and as
part of such transaction enter into service agreements,
power purchase agreements, or other agreements with the
transferee; provided, however, that the prices, terms and
conditions of any power purchase agreement must be
approved or allowed into effect by the Federal Energy
Regulatory Commission; or
(4) use any accelerated cost recovery method
including accelerated depreciation, accelerated
amortization or other capital recovery methods, or record
reductions to the original cost of its assets.
In order to implement a reorganization, retire generating
plants from service, or sell, assign, lease or otherwise
transfer assets pursuant to this Section, the electric
utility shall comply with subsections (c) and (d) of Section
16-128, if applicable, and provide the Commission with at
least 30 days notice of the proposed reorganization or
transaction, which notice shall include the following
information:
(i) a complete statement of the entries that
the electric utility will make on its books and
records of account to implement the proposed
reorganization or transaction together with a
certification from an independent certified public
accountant that such entries are in accord with
generally accepted accounting principles and, if the
Commission has previously approved guidelines for
cost allocations between the utility and its
affiliates, a certification from the chief
accounting officer of the utility that such entries
are in accord with those cost allocation guidelines;
(ii) a description of how the electric utility
will use proceeds of any sale, assignment, lease or
transfer to retire debt or otherwise reduce or
recover the costs of services provided by such
electric utility;
(iii) a list of all federal approvals or
approvals required from departments and agencies of
this State, other than the Commission, that the
electric utility has or will obtain before
implementing the reorganization or transaction;
(iv) an irrevocable commitment by the electric
utility that it will not, as a result of the
transaction, impose any stranded cost charges that
it might otherwise be allowed to charge retail
customers under federal law or increase the
transition charges that it is otherwise entitled to
collect under this Article XVI; and
(v) if the electric utility proposes to sell,
assign, lease or otherwise transfer a generating
plant that brings the amount of net dependable
generating capacity transferred pursuant to this
subsection to an amount equal to or greater than 15%
of the electric utility's net dependable capacity as
of the effective date of this amendatory Act of
1997, and enters into a power purchase agreement
with the entity to which such generating plant is
sold, assigned, leased, or otherwise transferred,
the electric utility also agrees, if its fuel
adjustment clause has not already been eliminated,
to eliminate its fuel adjustment clause in
accordance with subsection (b) of Section 9-220 for
a period of time equal to the length of any such
power purchase agreement or successor agreement, or
until January 1, 2005, whichever is longer; if the
capacity of the generating plant so transferred and
related power purchase agreement does not result in
the elimination of the fuel adjustment clause under
this subsection, and the fuel adjustment clause has
not already been eliminated, the electric utility
shall agree that the costs associated with the
transferred plant that are included in the
calculation of the rate per kilowatt-hour to be
applied pursuant to the electric utility's fuel
adjustment clause during such period shall not
exceed the per kilowatt-hour cost associated with
such generating plant included in the electric
utility's fuel adjustment clause during the full
calendar year preceding the transfer, with such
limit to be adjusted each year thereafter by the
Gross Domestic Product Implicit Price Deflator.
(vi) In addition, if the electric utility
proposes to sell, assign, or lease, (A) either (1)
an amount of generating plant that brings the amount
of net dependable generating capacity transferred
pursuant to this subsection to an amount equal to or
greater than 15% of its net dependable capacity on
the effective date of this amendatory Act of 1997,
or (2) one or more generating plants with a total
net dependable capacity of 1100 megawatts, or (B)
transmission and distribution facilities that either
(1) bring the amount of transmission and
distribution facilities transferred pursuant to this
subsection to an amount equal to or greater than 15%
of the electric utility's total depreciated original
cost investment in such facilities, or (2) represent
an investment of $25,000,000 in terms of total
depreciated original cost, the electric utility
shall provide, in addition to the information listed
in subparagraphs (i) through (v), the following
information: a description of how the electric
utility will meet its service obligations under this
Act in a safe and reliable manner. If the Commission
has not issued an order initiating a hearing on the
proposed transaction within 30 days after the date
the electric utility's notice is filed, the
transaction shall be deemed approved. The
Commission may, after notice and hearing, prohibit
the proposed transaction if it makes either or both
of the following findings: (1) that the proposed
transaction will render the electric utility unable
to provide its tariffed services in a safe and
reliable manner, or (2) that there is a strong
likelihood that consummation of the proposed
transaction will result in the electric utility
being entitled to request an increase in its base
rates during the mandatory transition period
pursuant to subsection (d) of this Section. Any
hearing initiated by the Commission into the
proposed transaction shall be completed, and the
Commission's final order approving or prohibiting
the proposed transaction shall be entered, within 90
days after the date the electric utility's notice
was filed. Provided, however, that a sale,
assignment, or lease of transmission facilities to
an independent system operator that meets the
requirements of Section 16-126 shall not be subject
to Commission approval under this Section.
In any proceeding conducted by the Commission
pursuant to this subparagraph (vi), intervention
shall be limited to parties with a direct interest
in the transaction which is the subject of the
hearing and any statutory consumer protection agency
as defined in subsection (d) of Section 9-102.1.
Notwithstanding the provisions of Section 10-113 of
this Act, any application seeking rehearing of an
order issued under this subparagraph (vi), whether
filed by the electric utility or by an intervening
party, shall be filed within 10 days after service
of the order.
The Commission shall not in any subsequent proceeding or
otherwise, review such a reorganization or other transaction
authorized by this Section, but shall retain the authority to
allocate costs as stated in Section 16-111(i). An entity to
which an electric utility sells, assigns, leases or transfers
assets pursuant to this subsection (g) shall not, as a result
of the transactions specified in this subsection (g), be
deemed a public utility as defined in Section 3-105. Nothing
in this subsection (g) shall change any requirement under the
jurisdiction of the Illinois Department of Nuclear Safety
including, but not limited to, the payment of fees. Nothing
in this subsection (g) shall exempt a utility from obtaining
a certificate pursuant to Section 8-406 of this Act for the
construction of a new electric generating facility. Nothing
in this subsection (g) is intended to exempt the transactions
hereunder from the operation of the federal or State
antitrust laws. Nothing in this subsection (g) shall require
an electric utility to use the procedures specified in this
subsection for any of the transactions specified herein. Any
other procedure available under this Act may, at the electric
utility's election, be used for any such transaction.
(h) During the mandatory transition period, the
Commission shall not establish or use any rates of
depreciation, which for purposes of this subsection shall
include amortization, for any electric utility other than
those established pursuant to subsection (c) of Section 5-104
of this Act or utilized pursuant to subsection (g) of this
Section. Provided, however, that in any proceeding to review
an electric utility's rates for tariffed services pursuant to
Section 9-201, 9-202, 9-250 or 16-111(d) of this Act, the
Commission may establish new rates of depreciation for the
electric utility in the same manner provided in subsection
(d) of Section 5-104 of this Act. An electric utility
implementing an accelerated cost recovery method including
accelerated depreciation, accelerated amortization or other
capital recovery methods, or recording reductions to the
original cost of its assets, pursuant to subsection (g) of
this Section, shall file a statement with the Commission
describing the accelerated cost recovery method to be
implemented or the reduction in the original cost of its
assets to be recorded. Upon the filing of such statement,
the accelerated cost recovery method or the reduction in the
original cost of assets shall be deemed to be approved by the
Commission as though an order had been entered by the
Commission.
(i) Subsequent to the mandatory transition period, the
Commission, in any proceeding to establish rates and charges
for tariffed services offered by an electric utility, shall
consider only (1) the then current or projected revenues,
costs, investments and cost of capital directly or indirectly
associated with the provision of such tariffed services; (2)
collection of transition charges in accordance with Sections
16-102 and 16-108 of this Act; (3) recovery of any employee
transition costs as described in Section 16-128 which the
electric utility is continuing to incur, including recovery
of any unamortized portion of such costs previously incurred
or committed, with such costs to be equitably allocated among
bundled services, delivery services, and contracts with
alternative retail electric suppliers; and (4) recovery of
the costs associated with the electric utility's compliance
with decommissioning funding requirements; and shall not
consider any other revenues, costs, investments or cost of
capital of either the electric utility or of any affiliate of
the electric utility that are not associated with the
provision of tariffed services. In setting rates for
tariffed services, the Commission shall equitably allocate
joint and common costs and investments between the electric
utility's competitive and tariffed services. In determining
the justness and reasonableness of the electric power and
energy component of an electric utility's rates for tariffed
services subsequent to the mandatory transition period and
prior to the time that the provision of such electric power
and energy is declared competitive, the Commission shall
consider the extent to which the electric utility's tariffed
rates for such component for each customer class exceed the
market value determined pursuant to Section 16-112, and, if
the electric power and energy component of such tariffed rate
exceeds the market value by more than 10% for any customer
class, may establish such electric power and energy component
at a rate equal to the market value plus 10%. In any such
case, the Commission may also elect to extend the provisions
of Section 16-111(e) for any period in which the electric
utility is collecting transition charges, using information
applicable to such period.
(j) During the mandatory transition period, an electric
utility may elect to transfer to a non-operating income
account under the Commission's Uniform System of Accounts
either or both of (i) an amount of unamortized investment tax
credit that is in addition to the ratable amount which is
credited to the electric utility's operating income account
for the year in accordance with Section 46(f)(2) of the
federal Internal Revenue Code of 1986, as in effect prior to
P.L. 101-508, or (ii) "excess tax reserves", as that term is
defined in Section 203(e)(2)(A) of the federal Tax Reform Act
of 1986, provided that (A) the amount transferred may not
exceed the amount of the electric utility's assets that were
created pursuant to Statement of Financial Accounting
Standards No. 71 which the electric utility has written off
during the mandatory transition period, and (B) the transfer
shall not be effective until approved by the Internal Revenue
Service. An electric utility electing to make such a
transfer shall file a statement with the Commission stating
the amount and timing of the transfer for which it intends to
request approval of the Internal Revenue Service, along with
a copy of its proposed request to the Internal Revenue
Service for a ruling. The Commission shall issue an order
within 14 days after the electric utility's filing approving,
subject to receipt of approval from the Internal Revenue
Service, the proposed transfer.
(220 ILCS 5/16-112 new)
Sec. 16-112. Determination of market value.
(a) The market value to be used in the calculation of
transition charges as defined in Section 16-102 shall be
determined in accordance with either (i) a tariff that has
been filed by the electric utility with the Commission
pursuant to Article IX of this Act and that provides for a
determination of the market value for electric power and
energy as a function of an exchange traded or other market
traded index, options or futures contract or contracts
applicable to the market in which the utility sells, and the
customers in its service area buy, electric power and energy,
or (ii) in the event no such tariff has been placed into
effect for the electric utility, or in the event such tariff
does not establish market values for each of the years
specified in the neutral fact-finder process described in
subsections (b) through (h) of this Section, a tariff
incorporating the market values resulting from the neutral
fact-finder process set forth in subsections (b) through (h)
of this Section.
(b) Except as provided in subsection (m) of this
Section, on or before April 30, 1998, on or before February
28, 1999, and on or before each April 30 from 2000 until
2007, the Commission shall appoint a neutral fact-finder to
make the calculations described in subsection (c) of this
Section. The neutral fact-finder shall be a member of a
national public accounting firm, shall not have served as the
neutral fact-finder in the previous year, and shall be
selected from a list of candidates provided by a nationally
recognized provider of neutral fact-finders that has
established rules for maintaining confidentiality. An amount
sufficient to pay the fees of the neutral fact-finder shall
be appropriated annually from the Public Utility Fund in the
State treasury.
(c) On or before June 1, 1998, on or before April 1,
1999, and on or before each June 1 from 2000 until 2007, or
until discontinued in accordance with subsection (m) of this
Section, each electric utility and each alternative retail
electric supplier shall submit to the neutral fact-finder a
summary of (A) all contracts entered into after June 1, 1997
that are for the sale of electric power and energy from a
generating facility or facilities located in this State or
located in a contiguous State and owned by an electric
utility as part of its interconnected operating system and
delivery during one or more of the 5 years succeeding the
date of submission, and (B) all contracts entered into after
June 1, 1997 for purchase and delivery of electric power and
energy in or into this State during one or more of the 5
years succeeding the date of submission; provided, however,
that such contracts shall not include (i) contracts between
the electric utility and an affiliate; (ii) sales, purchases,
or deliveries made under rates and tariffs filed with the
Commission, except for tariffs filed pursuant to subsection
(d) of Section 16-110 and except for special or negotiated
rate contracts between an electric utility and a retail
customer to the extent that such contracts are for the
provision of electric power and energy after the date that
the customer becomes eligible for delivery services; and
(iii) extensions or amendments to full requirements wholesale
contracts existing as of the effective date of this
amendatory Act of 1997, provided that such contracts,
extensions, or amendments are cost of service regulated by
the Federal Energy Regulatory Commission. The summaries
shall, at a minimum, identify the date of the contract; the
year in which the electric power or energy is to be sold or
delivered; the point of delivery; defining characteristics
such as the nature of the power transaction (for example,
reserve responsibility (firm, non-firm)), length of contract
and temporal differences (for example, season, on-peak or
off-peak); and the applicable prices stated at the point at
which the electric power and energy leaves the electric
utility's or alternative retail electric supplier's
transmission system, as the case may be, in the case of
contracts described in item (A) and at the point at which the
electric power and energy enters the electric utility's
transmission system in the case of contracts in item (B),
provided, that the applicable price shall be stated at the
point at which the electric power and energy enters the
electric utility's transmission system in the case of
electric power and energy generated for delivery within the
electric utility's service area. In reporting to the neutral
fact-finder the price of power and energy sold under bundled
service contracts, electric utilities and alternative retail
electric suppliers shall deduct from the contract price the
charges for delivery services, including transition charges,
applicable to delivery services customers in a utility's
service area, and charges for services, if any, other than
the provision of power and energy or delivery services. The
Commission may adopt orders setting forth requirements
governing the form and content of such summaries.
(d) The neutral fact-finder shall calculate market
values for electric power and energy for each electric
utility, taking into account the defining characteristics set
forth in subsection (c) of this Section; provided, however,
that the neutral fact-finder may determine that a particular
value is appropriate for more than one electric utility, or
for all electric utilities in this State. The neutral
fact-finder shall calculate the market values for the next
year and, to the extent the summaries include a sufficient
number of actual contracts to represent a viable market for
the sale and delivery of electric power and energy in
subsequent years, for each of the 4 succeeding years.
(e) In calculating market values for electric power, the
neutral fact-finder shall weight contract prices (including
any contract price indices) by both the amount of capacity
covered by the contract and the number of hours in which
capacity is to be provided under the contract in each period
of the year, shall take into account all of the defining
characteristics set forth in subsection (c) of this Section
and shall develop such values as required to represent the
different types of market values of electric power.
(f) The neutral fact-finder shall base calculations of
the market values for electric energy on the energy prices
stated in the contracts, and where no explicit energy prices
or index price basis are stated, on the actual energy costs
of the supplier in the corresponding period of the preceding
year that would have been applicable to the electric energy
provided under the contract. The neutral fact-finder shall
develop market values for electric energy and shall take into
account the defining characteristics set forth in subsection
(c) of this Section, as required to represent the market
values of such electric energy.
(g) If the contracts used by the neutral fact-finder
base prices for future years on one or more indices, the
neutral fact-finder shall identify such indices in his or her
final report, develop a weighting for each index, and
calculate a weighted average index. The market values shall
be calculated using the weighted average index when the
actual values of the component indices are known.
(h) The neutral fact-finder shall publish a final report
on or before July 30 of each year, except that in 1999 the
neutral fact finder shall publish the report on or before May
30, setting forth the calculated market values and stating
the basis for such calculations. The final report shall not,
however, disclose any proprietary or confidential data.
(i) The market values calculated by the neutral
fact-finder shall not be admissible in any proceeding for any
purpose other than the calculation of transition charges or
calculation of the price for the power purchase options
provided pursuant to subsection (b) and (c) of Section
16-110.
(j) The Commission shall have access to all contracts
described in subsection (c) of this Section and shall perform
such audits as it and the neutral fact-finder deem necessary
to insure the accuracy of the summaries submitted to the
neutral fact-finder. The summaries described in subsection
(c) of this Section and each contract shall be accorded
confidential and proprietary treatment and their review shall
be subject to the provisions of Sections 4-404 and 5-108 of
this Act, and the contract between the Commission and the
neutral fact-finder shall contain provisions obligating the
neutral fact-finder to comply with such Sections. The
summaries shall not be discoverable by any party in any
proceeding absent a compelling demonstration of need.
(k) In determining the market values to be used for the
various customer classes in calculating transition charges as
defined in Section 16-102 or for the power purchase options
set forth in Section 16-110, an electric utility shall apply
the market values that are determined as set forth in
subsection (a) to the electric power and energy that would
have been used to serve the delivery services customers'
electric power and energy requirements, based on the usage
specified in Section 16-102 and taking into account the
daily, monthly, annual and other relevant characteristics of
the customers' demands on the electric utility's system.
(l) In calculating a lump sum transition charge payment
for the purposes of subsection (h) of Section 16-108, the
electric utility shall use the market values that were
determined as provided in its tariff, or if such market
values have not been determined for the full period of time
covered by such lump sum calculation, such other basis as is
stated in the electric utility's tariff filed pursuant to
Section 16-108.
(m) The Commission may approve or reject, or propose
modifications to, any tariff providing for the determination
of market value that has been proposed by an electric utility
pursuant to subsection (a) of this Section, but shall not
have the power to otherwise order the electric utility to
implement a modified tariff or to place into effect any
tariff for the determination of market value other than one
incorporating the neutral fact-finder procedure set forth in
this Section. Provided, however, that if each electric
utility serving at least 300,000 customers has placed into
effect a tariff that provides for a determination of market
value as a function of an exchange traded or other market
traded index, options or futures contract or contracts, then
the Commission can require any other electric utilities to
file such a tariff, and can terminate the neutral fact-finder
procedure for the periods covered by such tariffs.
(n) To the extent that the summaries list a sufficient
number of actual contracts to represent a viable market and
market values can be determined for more than one year, the
electric utility shall offer customers that are obligated to
pay transition charges contracts that establish for one or
more years, up to a maximum of the lesser of 5 years or the
remaining number of years until December 31, 2008, the market
value or values to be used in calculating the customer's
transition charges in such years and for which market value
determinations have been made. The electric utility may
require any customer to give up to one year notice prior to
entering into a one or 2 year contract pursuant to this
subsection, up to 2 years notice for a 3 year contract, and
up to 3 years notice for a 4 or 5 year contract. Contracts
of one or 2 years duration shall incorporate the market
values that were determined as provided in this Section in
the year in which the notice is required to be given.
Contracts of more than 2 years duration shall incorporate the
market values that are determined in the year prior to the
first year in which the electric utility will collect
transition charges from the customer under the contract. The
electric utility shall also allow customers to select, at the
time that a customer gives its notice, an option to revoke
the notice within 30 days following the determination of the
market values that will apply under the contract requested by
the customer, and may charge customers a fee for such option
that is set forth in a tariff filed pursuant to Article IX
and that is adequate to allow the electric utility to recover
its transactional costs and compensate it based on the cost
that would be incurred to purchase an option to cover the
risk associated with the customer's option to revoke. The
electric utility shall not be required to offer customers a
contract under this paragraph for any year for which no
determination of market value has been made either by the
neutral fact-finder or pursuant to a tariff filed by the
electric utility.
(o) An electric utility shall have no obligation to
provide electric power or energy as a tariffed service for
the electric power and energy requirements placed on delivery
service by any customer that has entered into a contract
pursuant to subsection (n) of this Section and has not
purchased and exercised an option to revoke, during the term
of the contract. A customer that has purchased and exercised
an option to revoke under this subsection shall remain
eligible to receive any tariffed service for which it would
otherwise be eligible.
(220 ILCS 5/16-113 new)
Sec. 16-113. Declaration of service as a competitive
service.
(a) An electric utility may, by petition, request the
Commission to declare a tariffed service provided by the
electric utility to be a competitive service. The electric
utility shall give notice of its petition to the public in
the same manner that public notice is provided for proposed
general increases in rates for tariffed services, in
accordance with rules and regulations prescribed by the
Commission. The Commission shall hold a hearing on the
petition if a hearing is deemed necessary by the Commission.
The Commission shall declare the service to be a competitive
service for some identifiable customer segment or group of
customers, or some clearly defined geographical area within
the electric utility's service area, if the service or a
reasonably equivalent substitute service is reasonably
available to the customer segment or group or in the defined
geographical area at a comparable price from one or more
providers other than the electric utility or an affiliate of
the electric utility, and the electric utility has lost or
there is a reasonable likelihood that the electric utility
will lose business for the service to the other provider or
providers; provided, that the Commission may not declare the
provision of electric power and energy to be competitive
pursuant to this subsection with respect to (i) any retail
customer or group of retail customers that is not eligible
pursuant to Section 16-104 to take delivery services provided
by the electric utility and (ii) any residential and small
commercial retail customers prior to the last date on which
such customers are required to pay transition charges. In
determining whether to grant or deny a petition to declare
the provision of electric power and energy competitive, the
Commission shall consider, in applying the above criteria,
whether there is adequate transmission capacity into the
service area of the petitioning electric utility to make
electric power and energy reasonably available to the
customer segment or group or in the defined geographical area
from one or more providers other than the electric utility or
an affiliate of the electric utility, in accordance with this
subsection. The Commission shall make its determination and
issue its final order declaring or refusing to declare the
service to be a competitive service within 120 days following
the date that the petition is filed, or otherwise the
petition shall be deemed to be granted; provided, that if the
petition is deemed to be granted by operation of law, the
Commission shall not thereby be precluded from finding and
ordering, in a subsequent proceeding initiated by the
Commission, and after notice and hearing, that the service is
not competitive based on the criteria set forth in this
subsection.
(b) Any customer except a customer identified in
subsection (c) of Section 16-103 who is taking a tariffed
service that is declared to be a competitive service pursuant
to subsection (a) of this Section shall be entitled to
continue to take the service from the electric utility on a
tariffed basis for a period of 3 years following the date
that the service is declared competitive, or such other
period as is stated in the electric utility's tariff pursuant
to Section 16-110. This subsection shall not require the
electric utility to offer or provide on a tariffed basis any
service to any customer (except those customers identified in
subsection (c) of Section 16-103) that was not taking such
service on a tariffed basis on the date the service was
declared to be competitive.
(c) If the Commission denies a petition to declare a
service to be a competitive service, or determines in a
separate proceeding that a service is not competitive based
on the criteria set forth in subsection (a), the electric
utility may file a new petition no earlier than 6 months
following the date of the Commission's order, requesting, on
the basis of additional or different facts and circumstances,
that the service be declared to be a competitive service.
(d) The Commission shall not deny a petition to declare
a service to be a competitive service, and shall not find
that a service is not a competitive service, on the grounds
that it has previously denied the petition of another
electric utility to declare the same or a similar service to
be a competitive service or has previously determined that
the same or a similar service provided by another electric
utility is not a competitive service.
(e) An electric utility may declare a service, other
than delivery services or the provision of electric power or
energy, to be competitive by filing with the Commission at
least 14 days prior to the date on which the service is to
become competitive a notice describing the service that is
being declared competitive and the date on which it will
become competitive; provided, that any customer who is taking
a tariffed service that is declared to be a competitive
service pursuant to this subsection (e) shall be entitled to
continue to take the service from the electric utility on a
tariffed basis until the electric utility files, and the
Commission grants, a petition to declare the service
competitive in accordance with subsection (a) of this
Section. The Commission shall be authorized to find and
order, after notice and hearing in a subsequent proceeding
initiated by the Commission, that any service declared to be
competitive pursuant to this subsection (e) is not
competitive in accordance with the criteria set forth in
subsection (a) of this Section.
(220 ILCS 5/16-114 new)
Sec. 16-114. Recovery of decommissioning charges. On or
before April 1, 1999, each electric utility owning an
interest in, or having responsibility as a matter of contract
or statute for decommissioning costs as defined in Section
8-508.1 of, one or more nuclear power plants shall file with
the Commission a tariff or tariffs conforming to the
provisions of Section 9-201.5 of this Act, to be applicable
to each and every kilowatt-hour of electricity delivered or
sold at retail in the electric utility's service area,
including, but not limited to, sales by the electric utility
to tariffed services retail customers, sales by the electric
utility to retail customers pursuant to special contracts or
other negotiated arrangements, sales by alternative retail
electric suppliers, and sales by an electric utility other
than the electric utility in whose service area the retail
customer is located; provided, however, that for a user that
obtained electric power and energy from its own cogeneration
or self-generation facilities on or before January 1, 1997,
and subsequently takes services from an alternative retail
electric supplier or an electric utility other than the
electric utility in whose service area the user is located
for any portion of its electric power and energy requirements
formerly obtained from those facilities, the tariff required
by this Section shall not be applicable in any year to that
portion of the user's electric power and energy requirements
formerly obtained from those facilities, provided that for
the purposes of this Section, such portion shall not exceed
the average number of kilowatt-hours per year obtained from
the cogeneration or self-generation facilities during the 3
years prior to the date on which the user became eligible for
delivery services.
The Commission shall determine whether the tariff meets
the requirements of Sections 9-201 and 9-201.5 and of this
Section, and shall permit the electric utility's tariff
together with any modifications made after hearing to become
effective no later than October 1, 1999. In making its
determination, the Commission shall retain the authority it
possessed prior to the effective date of this amendatory Act
of 1997 to make jurisdictional allocations of decommissioning
expense recovery. The tariff filed pursuant to this Section
shall be applicable to any user taking some or all of its
electric power and energy requirements from an alternative
retail electric supplier or from an electric utility other
than the electric utility in whose service area the user is
located on and after the date that the user becomes eligible
for delivery services in accordance with Section 16-104. If
the electric utility has in effect as of the effective date
of this amendatory Act of 1997 a decommissioning rate as
defined in Section 9-201.5 conforming to the requirements of
that Section, the tariff or tariffs required by this Section
shall if the electric utility requests be consistent with its
decommissioning rate that is already in effect; provided,
that the tariff or tariffs filed pursuant to this Section
shall provide for the removal from base rates of any
decommissioning costs that are included in the electric
utility's base rates and their inclusion in the tariff or
tariffs required by this Section. The tariff required by this
Section shall be included by the Commission in the reviews
required by subsection (d) of Section 9-201.5.
(220 ILCS 5/16-115 new)
Sec. 16-115. Certification of alternative retail electric
suppliers.
(a) Any alternative retail electric supplier must obtain
a certificate of service authority from the Commission in
accordance with this Section before serving any retail
customer or other user located in this State. An alternative
retail electric supplier may request, and the Commission may
grant, a certificate of service authority for the entire
State or for a specified geographic area of the State.
(b) An alternative retail electric supplier seeking a
certificate of service authority shall file with the
Commission a verified application containing information
showing that the applicant meets the requirements of this
Section. The alternative retail electric supplier shall
publish notice of its application in the official State
newspaper within 10 days following the date of its filing.
No later than 45 days after the application is properly filed
with the Commission, and such notice is published, the
Commission shall issue its order granting or denying the
application.
(c) An application for a certificate of service
authority shall identify the area or areas in which the
applicant intends to offer service and the types of services
it intends to offer. Applicants that seek to serve
residential or small commercial retail customers within a
geographic area that is smaller than an electric utility's
service area shall submit evidence demonstrating that the
designation of this smaller area does not violate Section
16-115A. An applicant that seeks to serve residential or
small commercial retail customers may state in its
application for certification any limitations that will be
imposed on the number of customers or maximum load to be
served.
(d) The Commission shall grant the application for a
certificate of service authority if it makes the findings set
forth in this subsection based on the verified application
and such other information as the applicant may submit:
(1) That the applicant possesses sufficient
technical, financial and managerial resources and
abilities to provide the service for which it seeks a
certificate of service authority. In determining the
level of technical, financial and managerial resources
and abilities which the applicant must demonstrate, the
Commission shall consider (i) the characteristics,
including the size and financial sophistication, of the
customers that the applicant seeks to serve, and (ii)
whether the applicant seeks to provide electric power and
energy using property, plant and equipment which it owns,
controls or operates;
(2) That the applicant will comply with all
applicable federal, State, regional and industry rules,
policies, practices and procedures for the use,
operation, and maintenance of the safety, integrity and
reliability, of the interconnected electric transmission
system;
(3) That the applicant will only provide service to
retail customers in an electric utility's service area
that are eligible to take delivery services under this
Act;
(4) That the applicant will comply with such
informational or reporting requirements as the Commission
may by rule establish and provide the information
required by Section 16-112. Any data related to
contracts for the purchase and sale of electric power and
energy shall be made available for review by the Staff of
the Commission on a confidential and proprietary basis
and only to the extent and for the purposes which the
Commission determines are reasonably necessary in order
to carry out the purposes of this Act;
(5) That if the applicant, its corporate affiliates
or the applicant's principal source of electricity (to
the extent such source is known at the time of the
application) owns or controls facilities, for public use,
for the transmission or distribution of electricity to
end-users within a defined geographic area to which
electric power and energy can be physically and
economically delivered by the electric utility or
utilities in whose service area or areas the proposed
service will be offered, the applicant, its corporate
affiliates or principal source of electricity, as the
case may be, provides delivery services to the electric
utility or utilities in whose service area or areas the
proposed service will be offered that are reasonably
comparable to those offered by the electric utility, and
provided further, that the applicant agrees to certify
annually to the Commission that it is continuing to
provide such delivery services and that it has not
knowingly assisted any person or entity to avoid the
requirements of this Section. For purposes of this
subparagraph, "principal source of electricity" shall
mean a single source that supplies at least 65% of the
applicant's electric power and energy, and the purchase
of transmission and distribution services pursuant to a
filed tariff under the jurisdiction of the Federal Energy
Regulatory Commission or a state public utility
commission shall not constitute control of access to the
provider's transmission and distribution facilities;
(6) With respect to an applicant that seeks to
serve residential or small commercial retail customers,
that the area to be served by the applicant and any
limitations it proposes on the number of customers or
maximum amount of load to be served meet the provisions
of Section 16-115A, provided, that the Commission can
extend the time for considering such a certificate
request by up to 90 days, and can schedule hearings on
such a request;
(7) That the applicant meets the requirements of
subsection (a) of Section 16-128; and
(8) That the applicant will comply with all other
applicable laws and regulations.
(e) A retail customer that owns a cogeneration or
self-generation facility and that seeks certification only to
provide electric power and energy from such facility to
retail customers at separate locations which customers are
both (i) owned by, or a subsidiary or other corporate
affiliate of, such applicant and (ii) eligible for delivery
services, shall be granted a certificate of service authority
upon filing an application and notifying the Commission that
it has entered into an agreement with the relevant electric
utilities pursuant to Section 16-118.
(f) The Commission shall have the authority to
promulgate rules and regulations to carry out the provisions
of this Section. On or before May 1, 1999, the Commission
shall adopt a rule or rules applicable to the certification
of those alternative retail electric suppliers that seek to
serve only nonresidential retail customers with maximum
electrical demands of one megawatt or more which shall
provide for (i) expedited and streamlined procedures for
certification of such alternative retail electric suppliers
and (ii) specific criteria which, if met by any such
alternative retail electric supplier, shall constitute the
demonstration of technical, financial and managerial
resources and abilities to provide service required by
subsection (d) (1) of this Section, such as a requirement to
post a bond or letter of credit, from a responsible surety or
financial institution, of sufficient size for the nature and
scope of the ser