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Illinois Power Agency Files Default Service Procurement Plan

September 28, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Illinois Power Agency has filed with the Illinois Commerce Commission its 2017 proposed default service procurement plan for Commonwealth Edison, Ameren, and the portion of MidAmerican Energy load not served by utility-owned generation.

The IPA proposes to continue using the risk management and procurement strategy that the IPA has historically utilized: hedging load by procuring on- and off-peak blocks of forward energy in a three-year laddered approach.

The IPA’s hedging strategy for the 2017 Procurement Plan is consistent with the strategy used for the 2016 Plan. The IPA continues to recommend the procurement of standard energy in blocks of 25 MW. The risk management strategy also continues to bifurcate the first delivery year into periods with different hedging levels -- with June hedged at 100% of average load, July and August hedged to 106% of average on-peak load and 100% of average off-peak load, fall hedged to 100% of average load, and the balance of the year hedged to 75% of average load at the time of the spring procurement event.

The IPA also recommends that the Commission approve a fall energy procurement event to bring the hedging level for the balance of the first delivery year (October through May) to the fully hedged level (100% of load).

Consistent with other recent procurement plans, the IPA also recommends hedging 50% of the expected load for the second delivery year, and 25% of the expected load for the third delivery year. The IPA recommends the procurement of half of these volumes in the Spring 2017 procurement event and the balance in the Fall 2017 procurement event.

In other words, the spring 2017 procurement (combined with prior procurements) would result in all utilities having hedged via block energy purchases the following amount of their forecast load:

• June 2017: 100% peak and off peak

• July-Aug. 2017: 106% peak, 100% off-peak

• Sept. 2017: 100% peak and off peak

• Oct. 2017-May 2018: 75% peak and off-peak

• Upcoming Delivery Year+1: 37.5%

• Upcoming Delivery Year+2: 12.5%

The fall 2017 procurement (combined with prior procurements) would result in all utilities having hedged via block energy purchases the following amount of their forecast load:

• October 2017-May 2018: 100%

• Upcoming Delivery Year+1: 50%

• Upcoming Delivery Year+2: 25%

Additionally, for Ameren Illinois’ 2018-2019 planning year, the IPA recommends purchasing 75% of its forecasted capacity requirements in bilateral transactions and 25% from the MISO Planning Resource Auction (PRA). For future years’ Ameren Illinois capacity requirements, the IPA will defer a decision for the 2019-2020 planning year and beyond until next year’s plan, noting potential changes in the MISO capacity market construct.

For ComEd, consistent with the strategy adopted in prior plans, the IPA proposes that forecast capacity requirements be secured by ComEd through the PJM Reliability Pricing Model and Capacity Performance processes. For MidAmerican, consistent with the approach taken in the 2016 Plan, the IPA recommends that its forecast capacity shortfall be secured by MidAmerican through the annual MISO PRA.

Aside from the various proposals above, the IPA recommends that capacity, ancillary services, load balancing services, and transmission services be purchased by Ameren Illinois and MidAmerican from the MISO marketplace and by ComEd from the PJM market.

Docket 16-0453

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