220 ILCS 5/16-112
2021 Illinois Compiled Statutes|Chapter 220 - UTILITIES|220 ILCS 5/ - Public Utilities Act.|Article XVI - Electric Service Customer Choice And Rate Relief Law Of 1997

Sec. 16-112.     Determination of market value.(a) The market value to be used in the calculation of  transition charges as defined in Section 16-102 shall be  determined in accordance with either (i) a tariff that has  been filed by the electric utility with the Commission  pursuant to Article IX of this Act and that provides for a  determination of the market value for electric power and  energy as a function of an exchange traded or other market  traded index, options or futures contract or contracts  applicable to the market in which the utility sells, and the  customers in its service area buy, electric power and energy,  or (ii) in the event no such tariff has been placed into  effect for the electric utility, or in the event such tariff  does not establish market values for each of the years  specified in the neutral fact-finder process described in  subsections (b) through (h) of this Section, a tariff  incorporating the market values resulting from the neutral  fact-finder process set forth in subsections (b) through (h)  of this Section.(b) Except as provided in subsection (m) of this  Section, on or before April 30, 1998, on or before February 28, 1999, and on or  before each April 30  from 2000 until 2007, the Commission shall appoint a neutral  fact-finder to make the calculations  described in subsection  (c) of this Section.  The neutral fact-finder shall be a  member of a national public accounting firm, shall not have  served as the neutral fact-finder in the previous year, and  shall be selected from a list of candidates provided by  a nationally  recognized provider of neutral fact-finders that has  established rules for maintaining confidentiality.  An amount  sufficient to pay the fees of the neutral fact-finder shall be  appropriated annually from the Public Utility Fund in the  State treasury.(c) On or before June 1, 1998, on or before April 1, 1999, and on or before  each June 1  from 2000 until 2007, or until discontinued in accordance with  subsection (m) of this Section, each electric utility and each  alternative retail electric supplier shall submit to the neutral  fact-finder a summary of (A) all contracts entered into after  June 1, 1997 that are for the sale of electric power and  energy from a generating facility or facilities located in  this State or located in a contiguous State and owned by an  electric utility as part of its interconnected operating  system and delivery during one or more of the 5 years  succeeding the date of submission, and (B) all contracts  entered into after June 1, 1997 for purchase and delivery of  electric power and energy in or into this State during one or  more of the 5 years succeeding the date of submission;  provided, however, that such contracts shall not include (i)  contracts between the electric utility and an affiliate; (ii)  sales, purchases, or deliveries made under rates and tariffs  filed with the Commission, except for tariffs filed pursuant  to subsection (d) of Section 16-110 and except for special or  negotiated rate contracts between an electric utility and a  retail customer to the extent that such contracts are for the  provision of electric power and energy after the date that  the customer becomes eligible for delivery services; and (iii)  extensions or amendments to full requirements wholesale  contracts existing as of the effective date of this amendatory  Act of 1997, provided that such contracts, extensions, or  amendments are cost of service regulated by the Federal Energy  Regulatory Commission.  The summaries shall, at a minimum,  identify the date of the contract; the year in which the  electric power or energy is to be sold or delivered; the point  of delivery; defining characteristics such as the  nature of the power transaction (for example, reserve  responsibility (firm, non-firm)), length of contract and  temporal differences (for example, season, on-peak or off-peak); and the  applicable prices stated at the point at which  the electric power and energy leaves the electric utility's or  alternative retail electric supplier's transmission system, as the  case may be, in the case of contracts described in item (A)  and at the point at which the electric power and energy enters  the electric utility's transmission system in the case of  contracts in item (B), provided, that the applicable price  shall be stated at the point at which the electric power and  energy enters the electric utility's transmission system in  the case of electric power and energy generated for delivery  within the electric utility's service area.  In reporting to  the neutral fact-finder the price of power and energy sold  under bundled service contracts, electric utilities and alternative retail  electric  suppliers shall deduct from the contract  price the charges for delivery services, including transition  charges, applicable to delivery services customers in a  utility's service area, and charges for services, if any,  other than the provision of power and energy or delivery  services. The Commission may adopt orders setting forth  requirements governing the form and content of such summaries.(d) The neutral fact-finder shall calculate market  values for electric power and energy for each electric  utility, taking into account the defining characteristics set  forth in subsection (c) of this Section; provided, however,  that the neutral fact-finder may determine that a particular  value is appropriate for more than one electric utility, or  for all electric utilities in this State.  The neutral fact-finder shall  calculate the market values for the next year  and, to the extent the summaries include a sufficient number  of actual contracts to represent a viable market for the sale  and delivery of electric power and energy in subsequent years,  for each of the 4 succeeding years.(e) In calculating market values for electric power, the  neutral fact-finder shall weight contract prices (including  any contract price indices) by both the amount of capacity  covered by the contract and the number of hours in which  capacity is to be provided under the contract in each period  of the year, shall take into account all of the defining  characteristics set forth in subsection (c) of this Section  and shall develop such values as required to represent the  different types of market values of electric power.(f) The neutral fact-finder shall base calculations of  the market values for electric energy on the energy prices  stated in the contracts, and where no explicit energy prices  or index price basis are stated, on the actual energy costs of  the supplier in the corresponding period of the preceding year  that would have been applicable to the electric energy  provided under the contract.  The neutral fact-finder shall  develop market values for electric energy and shall take into  account the defining characteristics set forth in subsection  (c) of this Section, as required to represent the market  values of such electric energy.(g) If the contracts used by the neutral fact-finder  base prices for future years on one or more indices, the  neutral fact-finder shall identify such indices in his or her  final report, develop a weighting for each index, and  calculate a weighted average index.  The market values shall  be calculated using the weighted average index when the actual  values of the component indices are known.(h) The neutral fact-finder shall publish a final report  on or before July 30 of each year, except that in 1999 the neutral fact finder  shall publish the report on or before May 30, setting forth the  calculated market values and stating the basis for such  calculations.  The final report shall not, however, disclose any proprietary or  confidential data.(i) The market values calculated by the neutral fact-finder shall not be  admissible in any proceeding for any  purpose other than the calculation of transition charges or  calculation of the price for the power purchase options  provided pursuant to subsection (b) and (c) of Section 16-110.(j) The Commission shall have access to all contracts  described in subsection (c) of this Section and shall perform  such audits as it and the neutral fact-finder deem necessary  to insure the accuracy of the summaries submitted to the  neutral fact-finder.  The summaries described in subsection  (c) of this Section and each contract shall be accorded  confidential and proprietary treatment and their review shall  be subject to the provisions of Sections 4-404 and 5-108 of  this Act, and the contract between the Commission and the  neutral fact-finder shall contain provisions obligating the  neutral fact-finder to comply with such Sections.  The  summaries shall not be discoverable by any party in any  proceeding absent a compelling demonstration of need.(k) In determining the market values to be used for the various customer  classes in  calculating transition charges as defined in Section 16-102 or for the power  purchase options set forth in Section 16-110,  an electric utility shall  apply the market values that are determined as set forth in  subsection (a) to the electric power and energy that would have  been used to serve the delivery services customers' electric  power and energy requirements, based on the usage specified in  Section 16-102 and taking into account the daily, monthly,  annual and other relevant characteristics of the customers'  demands on the electric utility's system.(l) In calculating a lump sum transition charge payment  for the purposes of subsection (h) of Section 16-108, the  electric utility shall use the market values that were  determined as provided in its tariff, or if such market values  have not been determined for the full period of time covered  by such lump sum calculation, such other basis as is stated in  the electric utility's tariff filed pursuant to Section 16-108.(m) The Commission may approve or reject, or propose  modifications to, any tariff providing for the determination  of market value that has been proposed by an electric utility  pursuant to subsection (a) of this Section, but shall not have  the power to otherwise order the electric utility to implement  a modified tariff or to place into effect any tariff for the  determination of market value other than one incorporating the  neutral fact-finder procedure set forth in this Section.  Provided, however, that if each electric utility serving at  least 300,000 customers has placed into effect a tariff that  provides for a determination of market value as a function of  an exchange traded or other market traded index, options or  futures contract or contracts, then the Commission can require  any other electric utilities to file such a tariff, and can  terminate the neutral fact-finder procedure for the periods  covered by such tariffs.(n) To the extent that the summaries list a sufficient  number of actual contracts to represent a viable market and  market values can be determined for more than one year, the  electric utility shall offer customers that are obligated to  pay transition charges contracts that establish for one or  more years, up to a maximum of the lesser of 5 years or the remaining number of  years until December 31, 2008, the market value or  values to be used in calculating the customer's transition  charges in such years  and for which market value  determinations have been made.  The electric utility may  require any customer to give up to one year notice prior to  entering into a one or 2 year contract pursuant to this  subsection, up to 2 years notice for a 3 year contract, and up  to 3 years notice for a 4 or 5 year contract.  Contracts of  one or 2 years duration shall incorporate the market values  that were determined as provided in this Section in the year  in which the notice is required to be given.  Contracts of  more than 2 years duration shall incorporate the market values  that are determined in the year prior to the first year in  which the electric utility will collect transition charges  from the customer under the contract.  The electric utility  shall also allow customers to select, at the time that a  customer gives its notice, an option to revoke the notice  within 30 days following the determination of the market  values that will apply under the contract requested by the  customer, and may charge customers a fee for such option that  is set forth in a tariff filed pursuant to Article IX and that  is adequate to allow the electric utility to recover its  transactional costs and compensate it based on the cost that  would be incurred to purchase an option to cover the risk  associated with the customer's option to revoke.  The electric   utility shall not be required to offer customers a contract  under this paragraph for any year for which no determination  of market value has been made either by the neutral fact-finder or pursuant to  a tariff filed by the electric utility.(o) An electric utility shall have no obligation to  provide electric power or energy as a tariffed service for the  electric power and energy requirements placed on delivery  service by any customer that has entered into a contract  pursuant to subsection (n) of this Section and has not  purchased and exercised an option to revoke, during the term  of the contract.  A customer that has purchased and exercised  an option to revoke under this subsection shall remain  eligible to receive any tariffed service for which it would  otherwise be eligible.    (Source: P.A. 90-561, eff. 12-16-97.)