Illinois Opens Rulemaking on Municipal Aggregation

The Illinois Commerce Commission opened Docket 12-0456 for development and adoption of rules concerning municipal electric aggregation.

The anticipated rulemaking had been first reported by Matters in June.

In an initiating order, the ICC said that the rulemaking would address a non-exclusive listing of six specific issues contained in a Staff report. As contained in the Staff report, these issues are:

1. Applicability of Section 11-115(A) of the Public Utilities Act (PUA or 'Act') and Section 2EE of the Consumer Fraud and Deceptive Business Practices Act to the switching of municipal aggregation customers

"The rulemaking should address how the ARES requirements in Section 16- 115(A) of the Act and Section 2EE of the Consumer Fraud and Deceptive Business Practices Act apply to situations where customers are switching suppliers pursuant to municipal aggregation. For example, Section 16-115(A) of the PUA requires that 'before any customer is switched from another supplier, the alternative retail electric supplier shall give the customer written information that adequately discloses, in plain language, the prices, terms and conditions of the products and services being offered and sold to the customer.' Section 1-92 of the IPA Act requires an aggregated entity performing an opt-out aggregation to inform 'customers in advance that they have the right to opt out of the aggregation program' and that such 'disclosure shall prominently state all charges to be made.' An administrative rule would be able to clarify the disclosure requirements applicable to suppliers winning a municipal aggregation contract," Staff said.

2. Competitive bids

"Section 1-92(c) of the IPA Act describes a 'process for soliciting bids for electricity and other related services and awarding proposed agreements for the purchase of electricity and other related services.' The rulemaking could address 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," Staff said.

3. Identifying existing municipal aggregation customers when a municipality wants to pursue a new round of opt-out aggregation

"Between September 2013 and December 2013, several opt-out aggregation contracts resulting from the April 2011 voter referendums are due to expire. If those communities want to pursue a new round of opt-out aggregation and solicit new bids from interested suppliers, the government authorities must receive current information about eligible customers, such as names and addresses, as well as utility account numbers. In order to treat existing ARES customers and existing real-time pricing customers differently from customers that are either on the utility’s fixed-price bundled service or the existing aggregation program, the government authorities need to receive information that identifies such different groups of customers.

However, neither ComEd nor Ameren Illinois currently track the customers of municipal aggregation differently from the customers that individually switch to an ARES. As a result, the supplier of the initial municipal aggregation program must provide the information that allows the government authority to distinguish between an existing aggregation customer and an existing ARES customer who switched outside of an aggregation program. The rulemaking should address the exact process for this type of information transfer and the role of the utility in such a process, given that the law only references the utility when it comes to providing customer information to the requesting government authority.

A related issue that should be addressed is whether customers who have opted-out in the first round of aggregation, and are currently on the utility’s fixed-price bundled service, will have to opt-out again during subsequent aggregations," Staff said.

4. Obligations for electric utilities under opt-in aggregations

"The law states that the electric utility must provide the customer names, addresses, and account numbers to the requesting government authority. The law does not make a distinction between opt-in and opt-out aggregations when it comes to this particular requirement. During informal discussions with interested parties, it became clear that there was a difference of opinion regarding the release of account numbers for purposes of opt-in aggregations pursuant to Section 1-92 of the IPA Act. Some parties argued that the electric utility must provide the account numbers for customers who expressed a desire to be part of an opt-in aggregation, while others argued that the electric utility should not be required to provide account numbers in such situations. A rulemaking could explore this issue further and ultimately allow the Commission to decide any contested issues associated with opt-in aggregation situations," Staff said.

5. Required guidelines for the mailing of opt-out and opt-in notices

"Currently, the only guidance in the law regarding notice requirements for opt-out aggregations is that 'it shall be the duty of the aggregated entity to fully inform residential and small commercial retail customers in advance that they have the right to opt out of the aggregation program.' It further states that 'the disclosure shall prominently state all charges to be made and shall include full disclosure of the cost to obtain service pursuant to Section 16-103 of the Public Utilities Act, how to access it, and the fact that it is available to them without penalty, if they are currently receiving service under that Section.'

It is Staff’s understanding that mailing of the opt-out notices is usually performed by the chosen aggregation supplier. As a result, several parties have expressed a desire that the mailing show the name and/or seal of the government authority on the outer envelope to decrease the possibility that customers perceive the notice as simply marketing material by one of the many suppliers offering residential service. In addition, a rule could specify any minimum opt-out period that should be afforded to the applicable residents as well as possibly further detail as to how the aggregation offer, terms, and conditions are described in the notice. Similar operational details could be specified for the mailing of notices in opt-in aggregation programs.

Additionally, the rulemaking proceeding should allow parties to discuss what the rule should specify, if anything, when it comes to the procedures of enrolling customers that move into the aggregation community after the initial opt-out or opt-in notices have been sent," Staff said.

6. Notification requirements to the Commission

"The rulemaking should discuss whether aggregation suppliers should be required to provide information to the Commission regarding terms and conditions of the aggregation programs that they are operating. For example, it would be helpful if all suppliers knew the aggregation rate as well as the end date of the aggregation contract, as well as any early termination fees that might apply to customers. This would be valuable information for suppliers that have not been chosen as an aggregation supplier and it would generally aid in reducing confusion among customers as well.

Related to this issue, the rulemaking proceeding could discuss any potential guidelines for suppliers marketing to customers in communities with opt-out aggregation programs," Staff said.