As if seeking subsidies for its Illinois merchant nuclear plants wasn't enough of an affront to retail choice, Exelon has added insult to injury by usurping a bill originally written to promote retail natural gas choice as the latest vehicle for its sought nuclear subsidies

SB2814, which was passed by the Senate, would have provided that the ICC's Office of Retail Market Development, "shall also have the function and duties of promoting competition in the natural gas market for all classes of customers."

As engrossed, SB2814 would have required that, "The Office shall work with all segments of the natural gas market to identify barriers to competition and recommend to the Commission, to the Governor's Office, and to the General Assembly programs or legislation needed to eliminate such barriers."

However, a House amendment to SB2814 has eliminated entirely the prior language to promote retail gas choice, replacing it with subsidies for various Exelon and other merchant power plants through, among other things, mandatory capacity payments from retail suppliers for downstate plants

Specifically, at Ameren, the utility would become responsible for procuring all capacity under a Fixed Resource Adequacy Plan. However, while the utility would procure all capacity, it would not be responsible for billing such charges to all customers; instead, retail suppliers would be apportioned a share of capacity costs that they would be billed by an administrator and provided to the utility, except for any pre-existing capacity held by the retail supplier that is not covered by the Fixed Resource Adequacy Plan

"Notwithstanding any other provision of this Act or the Illinois Power Agency Act, each electric utility that serves less than 3,000,000 retail customers but more than 500,000 retail customers in this State shall, beginning with the delivery year commencing June 1, 2018, procure capacity for all of its retail customers located in the Applicable Local Resource Zone of the Midcontinent Independent System Operator, Inc., or its successor," the House amendment provides

The House amendment calls for an administrator (MISO or another party) to allocate procured capacity to retail suppliers

"The administrator for billing and settlement purposes shall apportion the total procured capacity among each of the Load Serving Entities in accordance with the sum of their respective loads as measured by the individual peak load contributions of the retail customers they serve in the Applicable Local Resource Zone, taking into account the portion of each Load Serving Entity's capacity requirements for the load of retail customers it serves in the Applicable Local Resource Zone that will be met by Qualifying Preexisting Capacity and reducing the amount otherwise to be apportioned to the Load Serving Entity by that portion. The administrator for billing and settlement purposes shall bill each Load Serving Entity daily for its apportioned share of the purchased capacity, using the weighted average of the capacity prices specified in the capacity contracts. The procurement plan shall provide for the transfer of revenues collected from each Load Serving Entity to the electric utility that is the counterparty to the capacity contracts entered into as a result of the procurement. Nothing in this subsection (k) shall impair the ability of the Load Serving Entity to allocate, bill, and collect the capacity costs billed to it under this subparagraph (D) in the manner of its own choosing from the retail customers it serves," the House amendment provides

As noted, the House amendment allows retail suppliers with "preexisting" capacity to reduce their exposure to the utility-billed capacity payments, further creating the potential for the owners of formerly incumbent capacity to have a competitive advantage in pricing capacity and serving customers.

The House amendment would also compel retail suppliers to share their projected load and forecasts with the utility or administrator

"Each Load Serving Entity shall provide to the electric utility or the administrator for billing and settlement purposes, as applicable, information needed by the electric utility or administrator to perform its responsibilities under this paragraph (9), including information on (i) the Load Serving Entity's Qualifying Preexisting Capacity, if any; and (ii) the Load Serving Entity's projected load of retail customers in the Applicable Local Resource Zone for the period or periods to be covered by the procurement. This information shall be provided, and shall be maintained by the electric utility or the administrator, as applicable, on a confidential basis, including maintaining the information so that it cannot be accessed by personnel of the electric utility or administrator responsible for wholesale or retail power marketing or sales," the House amendment provides

The House amendment would also explicitly allow utilities to offer Time of Use generation rates (distinct from the real-time pricing programs with a discrete number of TOU periods) and would allow utilities to develop microgrid under a "pilot"

Text of house amendment

Tags:
Illinois   Subsidies   Nuclear   Capacity Market   Capacity  

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