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Illinois Power Agency Releases Draft Default Service Procurement Plan

August 16, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Illinois Power Agency has released a draft of its 2019 electricity default service procurement plan for public comment

The draft 2019 plan 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 draft includes two block energy procurement events, one in the Spring and the second in the Fall, with similar procurement hedging levels as recent procurement plans

Under the draft, regarding the procurement of energy, at the conclusion of the Spring 2019 procurement event, the resulting cumulative hedges in each utility’s supply portfolio should be as follows:

• For the period of June through September of the prompt Delivery Year (2019‐2020), the cumulative hedges should be approximately 100% of each monthly average peak and off‐peak load, except for July and August peak, which should be 106%. For the period of October through May of the prompt Delivery Year, the cumulative hedges in the portfolio should be approximately 75% of each monthly peak and off peak average load.

• For the second Delivery Year (2020‐2021) the cumulative hedges in the portfolio should be approximately 37.5% of each monthly peak and off peak average load.

• For the third Delivery Year (2021‐2022) the targeted cumulative hedges in the portfolio should be approximately 12.5% of each monthly peak and off peak average load.

At the conclusion of the Fall 2019 procurement event, the resulting cumulative hedges in each utility’s supply portfolio should be as follows:

• For the prompt Delivery Year (2019‐2020) the cumulative hedges in the portfolio should be approximately 100% of the average monthly peak and off‐peak load, except for July and August peak, which should have been hedged at 106% in the Spring procurement.

• For the second Delivery Year (2020‐2021) the cumulative hedges in the portfolio should be approximately 50% of the average monthly peak and off‐peak load.

• For the third Delivery Year (2021‐2022) the cumulative hedges in the portfolio should be approximately 25% of the average monthly peak and off‐peak load.

The procurement would cover ComEd and Ameren, and a portion of MidAmerican Energy's requirements

Regarding capacity, for ComEd, consistent with the strategy adopted in prior plans, the IPA draft proposes that forecasted capacity requirements be secured by ComEd through the PJM Reliability Pricing Model process.

For Ameren Illinois, for the 2020‐2021 Delivery Year, the IPA draft recommends continuing the strategy of procuring 50% of Ameren's forecasted capacity requirements in bilateral transactions and the remaining balance through the MISO Planning Resource Auction (PRA). For the 2021‐2022 Delivery Year, the IPA draft recommends procuring 25% of its forecasted capacity requirements in bilateral transactions in 2019, with the balance of forecast capacity requirement to be determined in the 2020 Electricity Procurement Plan.

Consistent with the approach taken in the 2018 Plan, the IPA draft recommends that MidAmerican’s forecasted capacity deficit be secured by MidAmerican through the annual MISO PRA.

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