State of Illinois
91st General Assembly

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[ Introduced ][ House Amendment 001 ][ House Amendment 002 ]


HB3027 Engrossed                               LRB9109967JSpc

 1        AN ACT to amend the  Public  Utilities  Act  by  changing
 2    Sections 16-108 and 16-109.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 5.   The  Public  Utilities  Act  is  amended  by
 6    changing Sections 16-108 and 16-109 as follows:

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

17        (220 ILCS 5/16-109)
18        Sec. 16-109. Unbundling of delivery services;  Commission
19    review.  The  General  Assembly  finds  that  the offering of
20    delivery services will, and is intended  to,  facilitate  the
21    development  of competition for generation services, and that
22    competition may develop for other services currently  offered
23    on  a tariffed basis by the electric utility.  The Commission
24    shall open a proceeding  to  investigate  the  need  for  and
25    desirability   of   different  or  additional  unbundling  of
26    delivery services for some or all electric utilities 3  years
27    from  the  date  that a tariff for delivery services is first
28    approved or allowed into effect  pursuant  to  this  Section,
29    however,  the  Commission  may  not issue a final order in an
30    investigation  proceeding  before  January  1,   2003.    The
31    Commission  shall  open  an  additional  proceeding  to again
32    investigate the need for and  desirability  of  different  or
33    additional  unbundling  of  delivery services for some or all
HB3027 Engrossed            -10-               LRB9109967JSpc
 1    electric utilities, 3 years after  the  entry  of  its  final
 2    order   in   the  first  investigation  proceeding.   In  any
 3    additional investigation  proceeding,  the  Commission  shall
 4    issue  its  final  order  in each investigation proceeding no
 5    later than 6 months after the proceeding  is  initiated.   In
 6    each  such  proceeding  the  Commission  shall consider, at a
 7    minimum, the effect  of  additional  unbundling  on  (i)  the
 8    objective of just and reasonable rates, (ii) electric utility
 9    employees,  and  (iii) the development of competitive markets
10    for electric energy services in Illinois.   Specific  changes
11    to  the  delivery  services  tariffs  of  individual electric
12    utilities to implement findings and directives stated  in  an
13    order  in  an  investigation  proceeding initiated under this
14    Section  shall  be  addressed  through  individual   electric
15    utility   tariff   filings.   The  Commission  may  also,  in
16    accordance with Section 16-108, upon complaint  or  upon  its
17    own  initiative  without  complaint,  upon reasonable notice,
18    enter upon a hearing concerning the need and desirability  of
19    requiring additional or other unbundling of delivery services
20    offered by electric utilities.
21    (Source: P.A. 90-561, eff. 12-16-97.)

22        Section  99.  Effective date.  This Act takes effect upon
23    becoming law.

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