Proposed Order Addresses Use of Full Requirements Contracts for Illinois Default Service

A proposed order from an Illinois ALJ would adopt a procurement plan for the Illinois Power Agency to supply the requirements of default service customers.

Notably, the proposed order would reject calls from competitive suppliers for use of full requirements contracts, and would approve the IPA's continued use of block energy purchases.

"The Commission believes that moving toward the procurement of full requirements products would be a significant change with potential adverse impacts on eligible retail customers, which have not been adequately examined at this time," the draft order states.

The proposed order would continue to rely on block purchases of energy, under the schedule proposed by the IPA.

Specifically, because of the large potential swings in the amount of default service load from the potential return of government aggregations to default supply as default service pricing becomes more competitive, the draft would adopt two potential procurement events for the June 2014 to May 2015 delivery year, one in April 2014 and, if needed, one in September 2014 (a departure from the prior annual procurements).

The April 2014 procurement would be used to procure energy blocks such that, combined with the existing portfolio, 106% of the June 2014 to October 2014 default load would be hedged, and 75% of the November 2014 to May 2015 default load would be hedged. The September 2014 procurement would be used to procure additional energy blocks, if needed, to bring the November 2014 to May 2015 hedging to 100%, if the default load forecast for that period has increased due to the return of customers to default service.

The April 2014 procurement would also be used to procure energy blocks such that, combined with the existing portfolio, 50% of the June 2015 to May 2016 default load would be hedged, and 25% of the June 2016 to May 2017 default load would be hedged.

Docket 13-0546