Proposed Illinois Order Would Allow Three-Year Forward Procurement of Capacity for Ameren Default Service

A proposed Illinois order would allow the Illinois Power Agency (IPA) to procure, for default service customers at Ameren Illinois, capacity for the periods 2013-2014 and 2014-2015 during the solicitation held in early 2012 (11-0660).

The Illinois Commerce Commission rejected oral arguments on the IPA procurement plan yesterday, and indicated that the proposed order would be addressed at its December 21 bench session.

Illinois Commerce Commission Staff had originally objected to a three-year forward purchase of capacity at Ameren, citing uncertainties in the Midwest ISO capacity market structure going forward (see 10/19).

Under the approach recommended by the ALJ, the IPA would be granted authority to purchase, in 2012, capacity for the 2013-2014 and 2014-2015 delivery years if bids for such delivery years were within benchmarks established by the IPA.

There did not appear to be any exceptions regarding this approach as recommended in the proposed order.

The proposed order also rejects several changes to the procurement plan sought by retail suppliers, including the shortening of the three-year laddering for energy supply, and the use of full requirements contracts.

Regarding the current three-year laddering, the ALJ found that, "no party seems to go as [far as] to propose an alternative in this proceeding," in recommending continuation of the current laddering. The ALJ would also not direct workshops on this subject, stating that, "[i]f RESA wishes to present a quantitative analysis supporting its position that an alternative to the three-year laddered approach is superior, the Commission might be willing to reconsider the issue in a future proceeding."

The ALJ also declined to establish a specific procurement schedule for the IPA that would allow ample time for retail generation rates to be filed prior to their effective date. Retail suppliers had noted that, for the 2011-12 delivery year, new retail rates at ComEd were published only one day before they took effect.

While declining to adopt a specific deadline for procurements and the filing of retail rates in the plan, the proposed order would, "caution[] the IPA that in the future, if it is not willing or able to carry out its obligations in a timely manner, the Commission will, reluctantly, take steps to intervene; even if it requires setting deadlines which the IPA may view as micromanaging the process."

The ALJ also concluded that proposals for full requirements contracts were not shown to be superior to the current use of block products for energy. The proposed order would conclude that it is not necessary, at this time, to address ComEd's legal theory that full requirements products are inconsistent with the Public Utilities Act.

The ALJ would adopt Staff language, as modified by Ameren, granting the IPA the ability to address significant load shifts, whether due to municipal aggregation, individual customer choice, or macro-economic shifts and significant energy price changes, if a consensus is reached among the IPA, Staff, the procurement administrator, the procurement monitor, and the utilities on any portfolio rebalancing.

Consistent with the IPA's revised plan, the ALJ would reject the procurement of long-term RECs, a solar carve-out, and energy from clean coal facilities under the procurement plan.