HB0502 94TH GENERAL ASSEMBLY

LRB094 05516 MKM 35565 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB0502

Introduced 1/27/2005, by Rep. Kathleen A. Ryg

SYNOPSIS AS INTRODUCED:

220 ILCS 5/16-102
220 ILCS 5/Art. XX heading new
220 ILCS 5/20-5 new
220 ILCS 5/20-10 new
220 ILCS 5/20-15 new
220 ILCS 5/20-20 new
220 ILCS 5/20-25 new

Amends the Public Utilities Act. Provides that, for public schools, the "transition charge" is: (i) 0.5 cents per kilowatt-hour during the period October 1, 1999 through December 31, 2004, 1.25 cents per kilowatt-hour in calendar year 2005, and 1.5 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 or contract rate to the identified usage: 8% for the period October 1, 1999 through December 31, 2002, 10% in calendar years 2003 and 2004, 15% in calendar year 2005 and 25% in calendar year 2006 (now, the transition charge for public schools is calculated in the same manner as that of all nonresidential retail customers). Requires each Illinois gas corporation to file annually a set of transportation schedules or tariffs applicable to public schools authorizing a public school association to aggregate the purchase of natural gas for its members. Requires the transportation schedules or tariffs to (i) establish certain delivery charges; (ii) authorize a public school association to contract with the gas corporation at monthly market prices for interstate pipeline capacity; (iii) require the gas corporation to provide certain usage projections; and (iv) authorizes the corporation to impose a penalty under limited circumstances. Authorizes the Illinois Commerce Commission to suspend the transportation schedule or tariff for up to 3 months. Requires energy sellers to comply with applicable Commission rules. Provides that any agreement between a public school association and an energy seller is void if the energy seller does not comply with Commission rules. Requires each gas corporation to file an annual statement of its revenues and incremental charges incurred as direct result of the aggregation of natural gas for public schools. Authorizes the Commission to promulgate rules reasonable and necessary to administer the aggregation program. Effective immediately.

FISCAL NOTE ACT MAY APPLY

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 changing Section 16-102 and by adding Article XX as follows:

(220 ILCS 5/16-102)

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) a retail customer to the extent that customer obtains its electric power and energy from that customer's own cogeneration or self-generation facilities, (v) an entity that owns, operates, sells, or arranges for the installation of a customer's own cogeneration or self-generation facilities, but only to the extent the entity is engaged in owning, selling or arranging for the installation of such facility, or operating the facility on behalf of such customer, provided however that any such third party owner or operator of a facility built after January 1, 1999, complies with the labor provisions of Section 16-128(a) as though such third party were an alternative retail electric supplier, 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, 2007.

"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, except public schools, 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;

(C) for public schools, an amount equal to the greater of: (i) 0.5 cents per kilowatt-hour during the period October 1, 1999 through December 31, 2004, 1.25 cents per kilowatt-hour in calendar year 2005, and 1.5 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, 15% in calendar year 2005 and 25% 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.

(Source: P.A. 91-50, eff. 6-30-99; 92-537, eff. 6-6-02.)

(220 ILCS 5/Art. XX heading new)

ARTICLE XX. NATURAL GAS AGGREGATION FOR PUBLIC SCHOOLS

(220 ILCS 5/20-5 new)

Sec. 20-5. Definitions. As used in this Section:

"Aggregate" means to combine the total natural gas requirements of all public schools that are members of a public school association for purchase from the delivery systems of Illinois gas corporations and from interstate pipelines.

"Delivery system" means the natural gas distribution and transmission lines that are owned and operated by any Illinois gas corporation and the charges for the use of those lines, as regulated by the Commission.

"Energy seller" means the entity that uses the delivery system of a gas corporation for delivery of natural gas supply from an interstate pipeline to the gas corporation's meter for use by a public school facility.

"Interstate pipeline" means any natural gas pipeline that delivers natural gas supply from outside the State of Illinois to the delivery system of an Illinois gas corporation and that is price-regulated by the Commission.

"Intrastate pipeline" means a natural gas pipeline that delivers natural gas supply from inside this State to an Illinois gas corporation's system and is price-regulated by the Commission.

"Public school" means any elementary or secondary school operated at public expense.

"Public school association" means a not-for-profit association of public schools.

"Small volume" means natural gas supply requirements of less than 250,000 therms annually.

(220 ILCS 5/20-10 new)

Sec. 20-10. Transportation schedules and tariffs.

(a) By June 1, 2006 and June 1 of each year thereafter, each Illinois gas corporation shall file with the Commission a set of transportation schedules or tariffs applicable to public schools. The transportation schedules or tariffs filed under this Section shall:

(1) authorize a public school association to aggregate the purchase of natural gas requirements by public schools;

(2) establish natural gas delivery charges that are equal to Commission-approved gas corporation charges for utility natural gas service, less the distributor's cost of purchased natural gas supply and interstate pipeline charges, plus aggregation administration and monthly meter balancing charges for small volume meters, but not to exceed $5 per meter per month for administration and 0.004 cents per therm delivered, for balancing monthly deliveries to actual usage;

(3) offer a public school association the option of contracting with a gas corporation at monthly market prices for interstate pipeline capacity currently being used by the gas corporation to deliver public schools' aggregate monthly requirements;

(4) require the gas corporation to provide to each public school association, or its designated agent, at least 5 business days before the first day of each month, the following information, based on weather forecasts and historical monthly usage: (i) daily usage projections for scheduled deliveries to each public school facility, (ii) aggregate daily usage projections by delivery point, and (iii) daily usage projections on a day-ahead basis when necessary to reflect significant changes in weather forecasts;

(5) impose a penalty if the projected daily usage of natural gas, as forecasted by the gas corporation, is not delivered to the distributor's delivery system provided, however, that the penalty does not exceed the penalty approved by the Commission in the gas corporation's large volume customer transportation tariffs. No other penalties may be imposed under this Section.

No transportation schedule or tariff filed under this Section shall require telemetry or special metering for small volume school meters.

(b) The Commission may suspend any transportation schedule or tariff filed under this Section for up to 3 months in order to examine the assumptions and estimates used and to review compliance with the requirements of this Section.

(220 ILCS 5/20-15 new)

Sec. 20-15. Energy sellers; compliance with Commission rules. In order to supply natural gas to public schools under this Article, an energy seller must comply with all applicable Commission rules. Any agreements entered into on or after the effective date of this amendatory Act of the 94th General Assembly between a public school and an energy seller that is not in compliance with applicable Commission rules is null and void.

(220 ILCS 5/20-20 new)

Sec. 20-20. Annual statement. Before June 1, 2007 and before June 1 of each year thereafter, each gas corporation shall file with the Commission an annual statement showing: (i) its revenue attributable to the aggregation administrative charge; (ii) its revenue attributable to the small volume meter balancing charge; and (iii) the amount of any incremental costs it incurred as a direct result of implementing aggregate transportation for public schools and monthly balancing service for small volume meters. The Commission shall determine an appropriate future cost recovery method for any unrecovered costs of the gas corporation in order to maintain future earnings neutrality for the gas corporation.

(220 ILCS 5/20-25 new)

Sec. 20-25. Rules. The Commission may promulgate any rules reasonable or necessary for the administration of this Article.

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