Illinois Won't Require Retail Suppliers to be Charged for Clean Coal Plant

A written order from the Illinois Commerce Commission on the Illinois Power Agency procurement plan provides that customers on competitive supply, and not alternative retail electric suppliers themselves, will be charged a share of the costs from the procurement of supply from the FutureGen 2.0 clean coal facility

A news release issued by the ICC originally said that utilities would be, "permitted to collect costs for the [FutureGen] project on a pro rata basis from alternative retail electric suppliers."

However, the ICC's written order confirms that no charge shall be applied to alternative retail electric suppliers related to FutureGen, although customers on competitive supply will be charged for the utilities' sourcing agreement through a nonbypassable charge.

The ICC will not require alternative retail electric suppliers to enter into sourcing agreements with FutureGen.

Rather, ComEd and Ameren will enter into sourcing agreements with FutureGen covering all of their distribution customers, including competitive supply customers.

The utilities will be allowed to recover costs, "through a new or modification of an existing tariff from all of their retail customers through a competitively neutral charge." Though a specific charge has not yet been established, it is anticipated from the ICC's order that this will be a distribution charge or surcharge, and that for default service customers, the Clean Coal costs will not be included in Rider PE (purchased electricity).

While the adopted approach is stated to be competitively neutral, as a final sourcing agreement was not before the ICC in the procurement plan, certain uncertainty remains. While the draft sourcing agreement with the utilities contemplates a contract for differences approach, with no physical delivery to the utilities (and thus no products paid for by all customers would be used in the default service portfolio), whether such approach is ultimately adopted remains pending.

Although the Commission adopted the distribution-charge approach to the clean coal plant, the ICC's order notably found that the Commission has the authority to require alternative retail electric suppliers to meet clean coal portfolio standards. What was not explicit (though implied by the ICC) is that such authority extended to the FutureGen plant, and not just an "initial" clean coal facility referenced in statute (to date, no initial facility has been established by lawmakers).

As to the default service portfolio, due to the large migration of load to competitive supply and the previously procured quantities of energy, no immediate procurement of default supply energy was adopted in the procurement plan.

Additionally, the plan provides approval for curtailments of previously procured long-term renewable energy contracts due to decreases in default service load; specifics regarding such curtailments will be determined based on updated load forecasts in March 2013.