Market Structure In Illinois
Illinois' 10 year freeze on electric rates expired at the end of 2006. rates On January 2, 2007, rates skyrocketed on bundled default service provided by the legacy utilities, ComEd and Ameren, for small-medium and large commercial customers, as well as residential customers who had not chosen a competitive retail supplier. New legislation, entitled "The Power Agency Act," represents the state government's reaction to the highly vocal public concerns over these rate increases.
The Power Agency Act was signed into law on August 28, 2007, and provides approximately $1 billion in rate relief over four years for residential and certain qualifying non-residential Illinois electric customers via rebates on the delivery component of the electricity bill. More importantly, however, the legislation marks the next steps in the continuing electric restructuring process that started in Illinois in 1997.
Although rate relief is getting all the press, the Power Agency Act and other recently-enacted legislation contain other important components including: ~ Establishment of the Illinois Power Agency - a new state agency to conduct and supervise a new competitive power procurement process to replace the reverse auctions used in late 2006 ~ New "renewable portfolio" standards ~ New energy efficiency and demand response requirements on electric utilities ~ Legislative declaration that markets for large commercial and industrial electric users are now competitive, marking virtually open competitive markets for larger commercial users and paving the way for expanded efforts to bring the benefits of retail choice to the small commercial and residential markets ~ Funding of the Office of Retail Market Development which is charged with "actively seeking out ways to promote retail competition in Illinois." ~ End of the Reciprocity Requirement for Alternative Retail Electric Suppliers effective January 2008, making it easier for new competitive retailers to become certified and licensed to sell power in the state.
These new legislative and restructuring developments, the establishment of new Power Procurement and Retail Market Development agencies working in tandem with the Illinois Commerce Commission and the anticipated increase in competitive retailers will make for a continuing complex electricity market, but one that brings more choice and lower prices to all classes of electricity customers.
The Illinois electricity market is under the jurisdiction of the two regional transmission organizations. Commonwealth Edison is a member of the PJM Interconnection, and Ameren is part of the Midwest Independent Transmission System Operator (MISO). PJM operates the world's largest competitive wholesale electricity market and ensures the reliability of the largest centrally dispatched grid in the world. The Midwest Independent Transmission System Operator, Inc. manages one of the world's largest energy markets using security constrained economic dispatch of electricity. PJM Interconnection and the Midwest Independent Transmission System Operator are moving toward implementation of a joint and common wholesale energy market covering their regions.
