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Illinois Passes Bill To Require Long-Term Resource Adequacy Contract Procurement For All Retail Customers
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Both Illinois houses recently passed and enrolled SB 25 which, among other things, requires the Illinois Power Agency to include in its procurement plan, "the
procurement of energy, capacity, environmental attributes,
resource adequacy attributes, or some combination thereof
intended to serve all retail customers."
SB 25 awaits action by the governor
Specifically, the plan shall feature long-term
contracts and, "shall be structured to facilitate new and additive
supply resources[.]"
The procurement, "shall be sized to ensure that the
substantial majority of any load-serving entity's supply
portfolio is not composed of contracts awarded," under the resource adequacy procurement
Contracts may take the form of a sourcing
agreement, power purchase agreement, or other instrument
as determined by the ICC in approving the plan, and
may feature fixed or variable pricing structures,
including utilization of a contract for differences in
pricing structure, SB 25 states
"Contracts may feature both electric
utilities and alternative retail electric suppliers as
counterparties," SB 25 states
In the approval of any such resource adequacy contract, SB 25 provides that the ICC, "shall prioritize
structures that ensure stable, reliable, and competitively
neutral allocations of costs and responsibilities."
"Purchases made under [such] contracts ... shall be funded in a competitively
neutral manner as determined by the Commission in
approving the plan," SB 25 further states
"To meet contract obligations, the
Commission may order collections from all retail customers
or from all load-serving entities, including alternative
retail electric suppliers as defined in Section 16-102 of
this Act, as a means of ensuring a fair and competitively
neutral allocation of contract costs," the bill states
"In establishing
collections, the Agency may propose and the Commission may
approve adjustments for load-serving entities that have
contracts entered into before the effective date of this
amendatory Act of the 104th General Assembly for energy,
capacity, or environmental attributes to ensure customers
are not double-billed for the same service," SB 25 states
While SB 25 specifically cites the allocation of costs in a competitively neutral manner, the bill is not as explicit as to the disposition of any resource adequacy products procured under the plan, especially those products for which a nonbypassable charge is imposed
The use of the Illinois Power Agency procurement plan to address policy goals in a competitively neutral manner has been undertaken previously, in removing renewable portfolio obligations from the competitive side of the bill, and undertaking the renewable procurements on behalf of all delivery customers
SB 25 also directs the ICC to develop an integrated resource
plan
Retail electric suppliers will be obligated to provide information to the ICC to inform the development of such plan
Specifically, an alternative retail electric supplier shall provide information related to the resource needs of its customers located in an electric utility's service territory
SB 25 also requires a study of whether Illinois should develop a state-specific ISO, or should consolidate all of its utilities into a single RTO, either PJM or MISO, or should maintain the current structure
Among other things, such RTO study shall consider the capacity market benefits and costs of
separating from the PJM and MISO territories versus
those of the status quo
The ICC and the Illinois Power Agency shall
publish the joint final RTO policy study no later than December 1,
2026
SB 25 also requires that an energy storage system or vehicle storage system
eligible for net metering under the bill must be served under, as more specifically described below, an hourly or TOU supply rate structure, including when served by a retail electric supplier, if such storage system elects net metering
The bill provides that:
An energy storage system or vehicle storage system
eligible for net metering under this subsection may be
interconnected behind the meter of a retail customer or at the
distribution system level of an electric utility as follows:
(A) if the energy storage system or vehicle storage
system is interconnected behind the meter of a retail
customer, in order to receive net metering under this
subsection, the eligible customer behind whose meter the
energy storage system is interconnected must receive
service from an electricity provider under an hourly
supply tariff, a time-of-use supply tariff, or a
time-of-use contract with an alternative retail electric
supplier; or
(B) if the energy storage system or vehicle storage
system is interconnected at the distribution system level
of an electric utility and not behind the meter of a retail
customer, the energy storage system or vehicle storage
system must receive service from an electricity provider
as a retail customer under an hourly supply tariff
authorized by Section 16-107, a supply tariff or contract
on substantially similar terms and conditions with an
alternative retail electric supplier, a time-of-use supply
tariff, or a time-of-use supply contract with an
alternative retail electric supplier.
Concerning the development of an integrated resource plan noted above, the IRP shall include, among other things, an evaluation of the future electric resource
needs in each electric utility's service area for periods
of at least 5, 10, 15, and 20 years
The IRP shall also include an analysis of all generation and energy resource
options available to meet the plan's range of load forecasts with
a focus on the first period of at least 5 years covered by
the plan, including an analysis of existing supply found
within each electric utility's service area and new supply
expected to come online across that period of at least 5
years
The IRP shall include recommendations for how State policy
should serve to facilitate the development of new
resources
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Mandates Retail Suppliers Use TOU Rates If Serving Certain Customers
November 4, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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