Illinois Staff Memo Recommends Opening Rulemaking on Governmental Aggregation Issues

A preliminary memo from Illinois Commerce Commission Staff has recommended that the Commission direct Staff to prepare a Staff Report and a draft Initiating Order for a rulemaking concerning several issues related to governmental electric aggregations, with such rulemaking opened no later than August 1, 2012.

The memo is still subject to internal comment at the ICC.

The memo concerns several issues related to government aggregation that arose in review of ComEd's Rate GAP - Government Aggregation Protocols but which were not addressed by the tariff itself, including the treatment of governmental aggregation customers when the initial aggregation term expires.

Several parties in the proceeding had suggested a rulemaking, but Staff requested more time to further review the Commission's statutory authority over the issues.

After conducting its review, Staff reported that municipal aggregation is created in Section 1-92 of the Illinois Power Agency Act, a statute that establishes no direct role for the Commission in its implementation. The state entity that is charged with assisting municipalities and counties as they consider whether and how to provide for the aggregation of the electric loads of residential and small commercial customers is the Illinois Power Agency (IPA): "The Illinois Power Agency shall provide assistance to municipalities, counties, or associations working with municipalities to help complete the plan and bidding process." [20 ILCS 3855/1-92.]

Staff further said that while the IPA Act is clear in creating a role for the IPA, it is less clear in addressing several other issues. According to the ICC Office of Retail Market Development (ORMD), these include: (1) how to reconcile customer switching requirements, including those in the Consumer Fraud and Deceptive Business Practices Act ("CFA" [815 ILCS 505/2EE and 2HH]), with municipal aggregation, (2) the feasibility of requiring winning suppliers to show to the Commission how the bidding process was conducted and to provide a copy of the successful bid, given that Section 1-92(c) of the IPA Act outlines a "process for soliciting bids for electricity and other related services and awarding proposed agreements for the purchase of electricity and other related services", (3) who should track information related to municipal aggregation in a way that will be transparent and useful to local governments, market participants, and State decision makers, (4) if and how the obligations for electric utilities for opt-in aggregations differ from their obligations for opt-out aggregations, especially when it comes to releasing customer account numbers, (5) whether to establish required guidelines for the mailing of opt-out and opt-in notices and (6) how individual customer accounts will be treated when the initial municipal aggregation agreements expire, some as early as 2012, and new programs are created.

Staff observed that the "optimal" course of action would be the amendment of the IPA Act in one of two ways: the Act could directly resolve issues inherent in municipal aggregation, or it could establish clear authority in one or more State agencies to create rules construing the statute and implementing municipal aggregation in a way that promotes the public interest.

However, the ICC is not devoid of relevant authority even in the absence of such legislation, Staff said, citing several provisions of the Public Utilities Act, namely, those regarding information reporting obligations of retail suppliers, and the requirement for suppliers to comply with Section 2EE of the Consumer Fraud and Deceptive Business Practices Act.

"These provisions make clear that the Commission does in fact possess authority to make rules addressing at least some of the areas that appear to require resolution, as identified above," Staff said.

"It is therefore recommended that the Commission direct its Staff to consult with other governmental entities with authority related to municipal aggregation, including specifically the Illinois Power Agency, and prepare a Staff Report outlining in as much detail as possible the areas Staff believes the Commission should address in a rulemaking. A draft Order could then be presented to the Commission to initiate a rulemaking. The recommended time for entering such an order would be immediately after the Commission has completed the adoption of 83 Ill. Adm. Code 412 'Obligations of Retail Electric Suppliers,' which is the subject of Docket No. 09-0592, but no later than August 1, 2012," Staff recommended.