SB2489 104TH GENERAL ASSEMBLY

LRB104 08079 AAS 18125 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB2489

Introduced 2/7/2025, by Sen. Bill Cunningham

SYNOPSIS AS INTRODUCED:

220 ILCS 5/16-107.8 new

Amends the Public Utilities Act. Creates the virtual power plant program. Defines terms. Provides that, within 60 days after the effective date of the amendatory provisions, each electric utility serving more than 300,000 customers as of January 1, 2025 shall propose one or more tariffs applicable to demand response technologies. Sets forth requirements for the content of the tariffs. Provides that the Illinois Commerce Commission shall approve or approve with modifications the tariffs filed by each utility within 240 days of filing. Provides that, not more than 6 months after 2 full delivery years of operation of the tariffs, the Commission shall issue a report to the General Assembly assessing the value and efficacy of the demand response virtual power plant program, including proposals for expansions or modifications. Provides that the Commission shall implement the amendatory provisions in a complementary manner with other virtual power plant programs under the Commission's jurisdiction in order to make the programs available to utility customers compatible for the benefit of the electric grid and to enhance electric service reliability. Makes other changes.

A BILL FOR

AN ACT concerning regulation.

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

Section 5. The Public Utilities Act is amended by adding Section 16-107.8 as follows:

(220 ILCS 5/16-107.8 new)

Sec. 16-107.8. Demand response virtual power plant program.

(a) As used in this Section:

"Aggregator" means a party, other than the electric utility or its affiliate, that (i) represents and aggregates the load of participating customers who collectively have the ability to curtail 100 kilowatts or more through demand response technologies and (ii) is responsible for performance of the aggregation in the virtual power plant program.

"Demand response technologies" means applications or solutions, not including electricity generators, that can be controlled to respond to pricing or provide services, including decreasing peak electricity demand or shifting demand from peak to off-peak periods. "Demand response technologies" may include, but are not limited to, connected devices such as behind-the-meter energy storage systems, smart thermostats, air conditioning units, electric vehicle batteries, and electric vehicle supply equipment.

"Distributed energy resources management system" or "DERMS" means a platform that may be used by distribution system operators or utilities to integrate grid resources, such as distributed energy resources, into system operations.

"Energy storage system" has the meaning set forth in subsection (a) of Section 16-107.6.

"Event" means a time period defined consistent with the requirements of this Section by the applicable electric utility where deployment of demand response technologies is measured and compensated under this Section.

"Export" means the discharge of energy from an energy storage system to the distribution grid in response to pricing or to provide services, including decreasing peak electricity demand or shifting demand from peak to off-peak periods.

"Participating customer" means a retail customer, as defined in Section 16-102, with one or more demand response technologies.

(b) The General Assembly finds that when demand response technologies commit to deployment at times of stress on the grid and in wholesale energy markets, the actual deployment benefits all customers of the utility with enhanced grid reliability and protection from retail and wholesale price increases and that those socialized goods should be encouraged and compensated.

(c) Within 60 days after the effective date of this amendatory Act of the 104th General Assembly, each electric utility serving more than 300,000 customers as of January 1, 2025 shall propose one or more tariffs applicable to demand response technologies. The tariffs shall be consistent with the following:

(1) Each request by the utility for an aggregator or participating customer to deploy demand response technologies participating in the program as identified in advance by the aggregator or participating customer shall be an event. Each utility shall rely on the demand response technologies addressed within a tariff for a minimum number of events specified in the tariff.

(2) In exchange for an aggregator, or a participating customer not using an aggregator facilitating curtailment through demand response technologies, the utility shall, after demonstrated performance by the aggregator or participating customer, compensate the aggregator or participating customer in a manner to be determined by the Commission. The Commission may consider separate compensation for response to events called on less than 24 hours notice and compensation for response to events called on 24 hours or more notice. In determining the value of the performance payment, the Commission shall at minimum consider the benefits to the utility and ratepayers of peak remediation, reduced capacity and transmission allocations to the applicable regional transmission organization zone, and a reasonable estimation of the value of reduced transmission and distribution investment and other grid services. The value shall be set to encourage robust participation. At least 30 days prior to proposing any tariff relating to demand response technologies, utilities shall jointly conduct at least one meeting with interested potential aggregators and participating customers to identify types of demand response technologies and compensation suitable for inclusion in the tariff.

(3) An aggregator or participating customer applying individually shall represent that it has identified for participation demand response technologies with an aggregate curtailment capacity of at least 100 kilowatts or any amount greater than that amount. Nothing in the tariffs shall require a particular participating customer, whether using an aggregator or not, to deploy at any particular time.

(4) The utility shall not send or receive signals directly to or from any participating customer represented by an aggregator for an event under the demand response virtual power plant program.

(5) The aggregator may have capabilities to receive dispatch signals from utilities or utility-contracted DERMS providers through communication protocols, such as IEEE 2030.5 or OpenADR, or through such other protocol as the Commission may approve. To facilitate adoption and participation, the utility shall also allow and enable participating customers to expeditiously share customer information with aggregators and provide dispatch signals in the form of an email or mutually agreeable implementation.

(6) A participating customer with multiple demand response technologies may enroll the technologies either directly without an aggregator or through one or more aggregators in applicable programs under the tariffs approved under this Section, so long as no particular technology is accounted for more than once. An aggregator, or a participating customer not using an aggregator, may collect and rely on data created by the demand response technologies for the purpose of demonstrating performance in response to an event.

(7) A participating customer may enroll in the demand response virtual power plant program directly if eligible or through an aggregator for one or more years and the electric utility shall not set a minimum or maximum length of participation for demand response technologies. The utility shall not limit the number of participating customers, nor shall any customer be prohibited from participating due to its rate class.

(8) The electric utility may include reasonable requirements for participation consistent with this subsection (c) except that the utility may not require collateral from a participating customer or an aggregator and neither the utility nor entities with which the utility shares a common parent may be an aggregator. The electric utility shall not penalize a participating customer or aggregator for a participating customer exporting during an event and the electric utility shall not require preapproval for customer export during an event.

(9) The utility shall recover the costs of the demand response virtual power plant program through delivery rates, including delivery rates authorized by the multi-year rate plan.

(d) The Commission shall approve or approve with modifications the tariffs filed by each utility pursuant to subsection (c) within 240 days of filing. At any time, the utility may propose revisions to the tariff required under this Section and the Commission may approve such revisions if, in addition to requirements under Article IX of this Act, such revisions are consistent with the requirements of this Section.

(e) Not more than 6 months after 2 full delivery years of operation of the tariffs authorized under this Section, the Commission shall issue a report to the General Assembly assessing the value and efficacy of the demand response virtual power plant program, including proposals for expansions or modifications.

(f) Nothing in the demand response virtual power plant program shall either prevent the participating customer from participating, directly or through a third-party aggregator, in any other program, including any program required or authorized by Section 16-107.6 of this Act.

(g) The Commission may consider approving additional compensation to aggregators to the extent that the aggregators' participating customers or participating customers are located in equity investment eligible communities, as defined in Section 1-10 of the Illinois Power Agency Act.

(h) The tariffs approved by the Commission shall not reflect any additional charges, fees, or insurance requirements imposed on persons owning or operating demand response technologies beyond those imposed on similarly situated customers that do not own or operate such.

(i) If a utility issuing tariffs under this Section conducts measurement and verification prescribed by the Commission, notwithstanding anything to the contrary, all curtailment associated with demand response technologies taking service under such tariffs shall be counted towards such utility's peak load reduction performance metric authorized by item (ii) of subparagraph (A) of paragraph (2) of subsection (e) of Section 16-108.18 of this Act and such utility's demand response obligations under Section 8-103B of this Act. The Commission shall not require demand response technologies to participate in any capacity or demand response markets or programs as a condition of the load attributable to participating systems to count toward the utility's peak load reduction performance metric or demand response obligations.

(j) The Commission shall implement this Section in a complementary manner with other virtual power plant programs under the Commission's jurisdiction in order to make the programs available to utility customers compatible for the benefit of the electric grid and to enhance electric service reliability.