SB 1608 — UTILITIES-PROCUREMENT PLAN

*LRB09709304ASK49439b* SB1608 97THEngrossed GENERALLRB097 ASSEMBLY09304 StateASK of49439 Illinoisb andAN 2012ACT SB1608concerning Introducedutilities. 2/9/2011, by Sen.

Mike Jacobs SYNOPSIS AS INTRODUCED:

ILCS 5/16-111.5 Amends the Public Utilities Act.

Provides that the required procurement plan for an electric utility shall include proposed bidding rules, bid documents, standard form contracts, and credit documents and policies.

Changes provisions concerning the draft and final procurement plans by the Illinois Power Agency, including the role of the Illinois Commerce Commission.

Effective immediately.

LRB097 09304 ASK 49439 b A BILL FOR SB1608 LRB097 09304 ASK 49439 b AN ACT concerning utilities.

Those customers that are excluded from the definition of "eligible retail customers" shall not be included in the procurement plan load requirements, and the utility shall procure any supply SB1608 Engrossed - 2 - LRB097 09304 ASK 49439 b requirements, including capacity, ancillary services, and hourly priced energy, in the applicable markets as needed to serve those customers, provided that the utility may include in its procurement plan load requirements for the load that is associated with those retail customers whose service has been declared or deemed competitive pursuant to Section 16-113 of this Act to the extent that those customers are purchasing power and energy during one of the transition periods identified in subsection (b) of Section 16-113 of this Act.

Unless specified otherwise in this Section, in the procurement plan or in the SB1608 Engrossed - 3 - LRB097 09304 ASK 49439 b implementing tariff, any procurement occurring in accordance with this plan shall be competitively bid through a request for proposals process.

This SB1608 Engrossed - 4 - LRB097 09304 ASK 49439 b plan shall include:

and (E) meet the same credit requirements as apply SB1608 Engrossed - 5 - LRB097 09304 ASK 49439 b to suppliers of capacity, in the applicable regional transmission organization market;

contract terms, time frames for securing products or services, fuel costs, weather patterns, transmission costs, market conditions, and SB1608 Engrossed - 6 - LRB097 09304 ASK 49439 b the governmental regulatory environment;

(5) Proposed bidding rules, bid documents, standard form contracts, and credit documents and policies.

SB1608 - 7 - LRB097 09304 ASK 49439 b (iii) serve as the interface between the electric utility and suppliers;

SB1608 Engrossed - 7 - LRB097 09304 ASK 49439 b (iv) manage the bidder pre-qualification and registration process;

SB1608 - 8 - LRB097 09304 ASK 49439 b (x) notify the utility of contract counterparties and contract specifics;

and SB1608 Engrossed - 8 - LRB097 09304 ASK 49439 b (xi) administer related contingency procurement events.

and (vii) consult with the procurement administrator regarding the development and use of benchmark SB1608 - 9 - LRB097 09304 ASK 49439 b criteria, standard form contracts, credit policies, and bid documents.

SB1608 Engrossed - 9 - LRB097 09304 ASK 49439 b (d) Except as provided in subsection (j), the planning process shall be conducted as follows:

Copies of the draft procurement plan shall be SB1608 - 10 - LRB097 09304 ASK 49439 b posted and made publicly available on the Agency's and Commission's websites, and copies shall also be provided to eachSB1608 affectedEngrossed electric- utility10 and- eachLRB097 alternative09304 retailASK 49439 b each affected electric supplier.utility.

Other interested entities,entities including alternative retail electric suppliers, also may comment on the procurement plan within the timeframe outlined in this Section.

The Agency shall endeavor at all times to identify interested parties and proactively seek out comment from parties affected by Agency proposals.

The Agency shall identify any revisions to SB1608 - 11 - LRB097 09304 ASK 49439 b the draft procurement plan by documenting such revisions in legislative style.

Within 15 10 days after the filing, the SB1608 Engrossed - 11 - LRB097 09304 ASK 49439 b Commission shall determine whether a hearing is necessary.

Given the short timeframe in which parties have to review and comment upon the Agency's final version of the procurement plan, the Commission may, in its discretion, reject any subsequent supplements, amendments, or modifications proposed by the Agency to its final version of the procurement plan filed with the Commission.

Any such supplement, amendment, or modification may be proposed by the Agency in subsequent draft plans.

In its order disposing of the Agency's final procurement plan, the Commission may specifically require and direct the Agency to undertake additional research on specific Agency proposals contained in the Agency's final procurement plan for which the Commission finds the evidentiary record is insufficient or incomplete.

The Commission may provide the Agency with specific questions or areas of inquiry related SB1608 - 12 - LRB097 09304 ASK 49439 b to the Agency's proposal that the Commission wishes the Agency to pursue.

The Commission may require that the Agency provide a report back to the Commission on the results of the Agency's research in a format, and by a date certain, acceptable to the Commission.

The procurement administrator shall also SB1608 Engrossed - 1312 - LRB097 09304 ASK 49439 b administer the prequalification process, including evaluation of credit worthiness, compliance with procurement rules, and agreement to the standard form contract developed pursuant to paragraph (2) of this subsection (e).

The terms of the contracts shall not be subject to negotiation by winning bidders, and the bidders must agree to the terms of the contract in advance so that winning bids are SB1608 Engrossed - 1413 - LRB097 09304 ASK 49439 b selected solely on the basis of price.

The request for proposals shall set forth a procedure for sealed, binding commitment bidding with pay-as-bid settlement, and provision for SB1608 Engrossed - 1514 - LRB097 09304 ASK 49439 b selection of bids on the basis of price.

provided, however, that if a needed product is not SB1608 Engrossed - 1615 - LRB097 09304 ASK 49439 b available through the regional transmission organization market it shall be purchased from the wholesale market.

(iii) In all cases where there is insufficient SB1608 Engrossed - 1716 - LRB097 09304 ASK 49439 b supply provided under contracts awarded through the procurement process to fully meet the electric utility's load requirement, the utility shall meet the load requirement by procuring power and energy from the applicable regional transmission organization market, including ancillary services, capacity, and day-ahead or real time energy or both;

The Commission shall review the confidential SB1608 Engrossed - 1817 - LRB097 09304 ASK 49439 b reports submitted by the procurement administrator and procurement monitor, and shall accept or reject the recommendations of the procurement administrator within 2 business days after receipt of the reports.

Confidential information, including the confidential reports submitted by the procurement administrator and procurement monitor pursuant to subsection (f) of this Section, shall not be made publicly available and shall not be discoverable by any party in any proceeding, SB1608 Engrossed - 1918 - LRB097 09304 ASK 49439 b absent a compelling demonstration of need, nor shall those reports be admissible in any proceeding other than one for law enforcement purposes.

The initial procurement plan shall identify the portfolio of power and energy products to be procured and delivered for the period June 2008 through May 2009, and shall identify the proposed procurement administrator, who shall have the same experience and expertise as is required of a procurement administrator hired pursuant to SB1608 Engrossed - 2019 - LRB097 09304 ASK 49439 b Section 1-75 of the Illinois Power Agency Act.

The Commission shall approve the procurement plan if the Commission determines that it will ensure adequate, reliable, affordable, efficient, and environmentally SB1608 Engrossed - 2120 - LRB097 09304 ASK 49439 b sustainable electric service at the lowest total cost over time, taking into account any benefits of price stability.

Costs incurred pursuant to a contract authorized by this subsection (k) shall be deemed prudently incurred and reasonable in amount and the electric utility SB1608 Engrossed - 2221 - LRB097 09304 ASK 49439 b shall be entitled to full cost recovery pursuant to the tariffs filed with the Commission.

A utility shall recover through the tariff all reasonable costs incurred to implement or comply with any procurement plan that is developed and put into effect pursuant to Section 1-75 of the Illinois Power Agency Act and this Section, including any fees assessed by the Illinois Power SB1608 Engrossed - 2322 - LRB097 09304 ASK 49439 b Agency, costs associated with load balancing, and contingency plan costs.