Final Illinois Order Allows Forward Procurement of Capacity at Ameren

A final Illinois order allows 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).

With respect to retail market issues, the final order adopts the recommendations of a proposed order without modification.

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 adopted approach, the IPA will have authority to purchase, in 2012, capacity for the 2013-2014 and 2014-2015 delivery years if bids for such delivery years are within benchmarks established by the IPA.

The final 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 ICC said that the proceeding did not provide any basis to deviate from the current approach. Additionally, the ICC declined to order workshops on the issue.

"If 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 Commission said.

The final order also refrained from establishing 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 ICC did, "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 ICC rejected the use of load following, full requirements contracts, finding that their use has not been shown to be superior to the current block purchases. Having reached this conclusion, the ICC said that it was not necessary to rule on the question of whether statute allows the use of full requirements contracts for default service.

The final order adopted 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.

As indicated by the Commission when discussing the order prior to a vote, the final order relies on one-year procurements for RECs, and does not include a carve-out for the procurement of distributed solar resources. Additionally, the final order does not require the procurement of power sources from a clean coal facility.