As required by recently passed legislation, Ameren and ComEd filed electric procurement plans. The plans are for the period beginning June 1, 2008, and ending May 31, 2009, the period prior to the Illinois Power Agency assuming responsibility for electric procurement activities. The procurement plans apply to service to retail customers traditionally known as bundled customers. The law requires Ameren and ComEd to utilize an independent procurement administrator to conduct an RFP process to solicit offers to provide electric resources during the subject period. Ameren and ComEd's remaining contracts secured under the former auction process will expire on their natural termination dates. Additionally, Ameren and ComEd were required by law to enter into multi-year financial contracts to promote price stability. Ameren entered into such a transaction with Ameren Energy Marketing Company, and Exelon entered into such a transaction with Exelon Generation Company. The full texts of Ameren and ComEd's Procurement Plans are available from NEM headquarters.

SB221 was passed by the Senate this week. The version of SB221 that was passed provides in relevant part for the continuation of a utility electric standard service offer. Rates in effect under the utilities' rate stabilization plans would function as a baseline to customer rates. Utilities could file an electric security plan or a market rate option, through which the standard service offer price would be determined by a competitive bidding process. However, the bill includes language permitting the Commission to "supervise and regulate competitive retail electric service provided to consumers by an electric utility" when needed to implement state policy.

The bill would require the Commission to establish energy efficiency standards applicable to electric utilities and also require utilities to provide 25% of "the total number of kilowatts of electricity supplied by the utility to any and all electric consumers whose electric load are located within the utility's certified territory" from advanced energy.

The bill would require electric utility disclosure in Commission proceedings of contract and agreement information between the utility, its affiliates and other relevant parties, subject to a Commission determination of its proprietary or confidential nature. It will also require the Commission to employ a federal energy advocate, whose responsibilities would include evaluating the state's electric utilities participation in an RTO.

The full text of SB221 Passed by the Senate is available on the NEM Website.

Allegheny Power filed a proposed Default Service Procurement Plan with the Commission to establish the terms under which it will render provider of last resort (POLR) service beginning January 1, 2011, when its generation rate caps expire. Allegheny proposes to use a competitive procurement process to satisfy its POLR obligations. Allegheny will engage in separate procurements for each of four service classes, and it will procure load under the POLR RFP eight times between June 2008 and October 2010.

Service Type 10, comprised of residential customers, is proposed to be served through a combination of one-year agreements for 50% the POLR load, two-year agreements for 35% of the POLR load and three-year agreements for 15% of the POLR load. Service Type 20, comprised of small non-residential and street lighting customers, is proposed to be served through a combination of one-year agreements for 64% of the POLR load, two-year agreements for 27% of the POLR load and the PJM day-ahead and real-time spot market purchases for 9% of the POLR load. Service Type 30, comprised of medium non-residential customers and Penn State University, is proposed to be served through a combination of one-year agreements for 88% of the POLR load and the PJM day-ahead and real-time spot market purchases for 12% of the POLR load. Service Type 40, comprised of large non-residential and alternative generation customers, is proposed to be served through purchases in the PJM day-ahead spot and real-time spot market.

Service Types 10, 20 and 30 would have fixed quarterly generation rates and Service Type 40 would have hourly-priced generation rates. Allegheny also proposes to implement an Energy Cost Adjustment (ECA) rate to permit it to reconcile over- or under-collections of costs of POLR supply. The ECA will be adjusted quarterly for Service Types 10, 20 and 30 and monthly for Service Type 40.

Allegheny proposes to eliminate its Generation Rate Adjustment tariff page and permit customers to shop for competitive supply without switching restrictions.

To address potential rate shock at the expiration of its rate cap, Allegheny proposes to implement a voluntary rate mitigation plan in the event that the January 1, 2011, increase in generation rates results in a total bill increase that exceeds 25% for Service Type 10, 20 or 30 customers. The rate mitigation would take the form of a non-bypassable credit to limit the total bill increase to 25% on a customer class basis.

The full text of Allegheny Power's Filing is available on the NEM Website.

PPL announced its intention to file an electric rate mitigation plan next month. The PPL proposal will be for a five-year phase-in plan commencing next year. PPL customers would have the option to mitigate bill increases in 2010, "by making additional payments on their electric bill beginning in mid-2008 and continuing through the end of 2009. Funds from those additional payments, plus interest, would be applied to bills in 2010, 2011 and 2012."