§ 16-126.2

Illinois § 16-126.2

• Jurisdiction: Illinois
• Topic: REGULATION
• Ch. 220: UTILITIES
• Act 220 ILCS 5/: Public Utilities Act.
• Art.: Article XVI - Electric Service Customer Choice And Rate Relief Law Of 1997

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(This Section may contain text from a Public Act with a delayed effective date ) Sec. 16-126.2. Energy Reliability Corporation of Illinois. (a) The General Assembly finds that: (1) When Illinois restructured its electric market in 1997, Illinois' largest 2 electric utilities unexpectedly elected to join 2 different regional transmission organizations (RTO), which effectively split the State into 2 zones. (2) Illinois' bifurcated, existing RTO membership structure has created significant concerns related to delays in transmission build out, excessively long interconnection queue processes, favoring polluting generation resources over more cost-effective clean sources, inhibiting State policies, and inexplicably frustrating State efforts to address its resource adequacy needs through the development of new generation. (3) The governance structures of PJM Interconnection, LLC (PJM) and the Midcontinent Independent System Operator, Inc. (MISO) have consistently failed to represent Illinois' interests. (4) The Illinois Commerce Commission and the Illinois Power Agency have the expertise to evaluate and present findings related to the costs and benefits of Illinois pursuing any one of the following 3 options: (1) establishing a single, State-specific Independent System Operator (ISO); (2) consolidating Illinois' existing bifurcated RTO membership structure into one existing RTO; or (3) maintaining the existing bifurcated RTO structure. (b) The Commission and the Illinois Power Agency shall conduct a joint study and publish the findings of the study to evaluate whether (1) establishing a single State-operated ISO; (2) consolidating this State's bifurcated RTO membership into an existing RTO; or (3) maintaining the existing bifurcated RTO structure, would be consistent with the State's goals and would maximize benefits to State businesses and residents. As a part of this evaluation, the Commission and the Illinois Power Agency shall analyze whether it would be feasible and practical for this State to pursue any of the options described in this subsection (b). (c) The Commission and the Illinois Power Agency shall examine the costs and benefits, over a 20-year period, of this State pursuing any of the options described in subsection (b). The study shall examine the costs and benefits of such participation over 20 years. The study shall examine the costs and benefits to State ratepayers, including, but not limited to, consideration of the regulatory, reliability, operational, and competitive benefits of this State participating in one existing RTO, as compared to participating in a State-specific ISO, or continuing to participate in the current bifurcated RTO structure. The costs and benefits evaluated should include resource adequacy benefits, resilience, affordability, equity, the impact on the environment, and the general health, safety, and welfare of the People of this State. The study shall, at a minimum, include the following, and it may consider or suggest additional or alternative items: (1) the appropriate timetable to (i) establish and effectively transition to a State-specific ISO, or (ii) consolidate into an existing RTO, taking into account how that schedule could support the emission reduction timeline established in Section 9.15 of the Environmental Protection Act; and (2) the appropriate benefits and costs to consider, such as the regulatory, reliability, operational, and competitive benefits, including, but not limited to: (i) capacity market benefits and costs of separating from the PJM and MISO territories versus those of the status quo; (ii) transmission benefits and costs of separating from the PJM and MISO territories versus those of a State-specific ISO; (iii) the legal, correct, and appropriate exit fees for leaving regional transmission organizations; (iv) managing the State's energy resources to supply electricity throughout the State versus the existing bifurcated structure; (v) the potential improvements in interconnection queue speed versus the current lengthy delays in the PJM and MISO processes; (vi) the potential for a State-specific ISO to more effectively value and enable resources, such as storage of renewable resources, demand response, energy efficiency, and the adoption of new technologies and applications, versus the current PJM and MISO structures; and (vii) an evaluation of any improved ability for the State to meet its goals and objectives in a new State-specific ISO versus the existing structure. After the completion of the study, if the Commission and the Illinois Power Agency find that the results of the study were overall beneficial to the citizens of this State, then the Commission and the Illinois Power Agency may conduct and publish an additional ISO policy study that explores the steps required to establish a State-specific ISO. The Governor and members of the General Assembly may request an additional ISO policy study, or any other follow-up study, regardless of the outcome of the original study. An additional study may, for example, investigate the steps required for this State to consolidate into one existing RTO. The additional ISO policy study shall investigate a governance structure and design that would enable State policy independence and more fully support State resource adequacy and reliability while also complying with FERC Order 2000. The additional ISO study may investigate how a State-specific ISO would be able to demonstrate the following issues, including, but not limited to: (i) independence from market participants; (ii) an appropriate scope and regional configuration; (iii) possession of operational authority for all transmission facilities under the control of the State-specific ISO; (iv) exclusive authority to maintain short-term reliability of the grid; (v) tariff administration and design; (vi) congestion management; (vii) management of parallel path flows; (viii) provision of last resort for ancillary services; (ix) development of an Open Access Same-time Information System (OASIS); (x) market monitoring; and (xi) responsibility for planning and expanding facilities under its control. (d) The Commission and the Illinois Power Agency shall retain the services of technical and policy experts with relevant fields of expertise. Given the critical and rapid actions required under this Section, the Commission and the Illinois Power Agency may procure the services of any facilitator, expert, or consultant to assist with the implementation of this Section. Such procurement is exempt from the requirements of the Illinois Procurement Code under Section 20-10 of the Illinois Procurement Code. The Commission and the Illinois Power Agency may jointly determine that the cost of any contract pursuant to this Section may be borne initially by the relevant electric public utilities, but shall be recovered as an expense through normal ratemaking procedures. The Illinois Finance Authority, the Illinois Environmental Protection Agency, and the Department of Commerce and Economic Opportunity shall provide support to and consult with the Commission and the Illinois Power Agency when requested. The Commission and the Illinois Power Agency may consult with other State agencies, commissions, or task forces as needed. (e) The Commission and the Illinois Power Agency may solicit information, including confidential or proprietary information, from entities likely to be impacted by the creation of a State-specific ISO. The Commission and the Illinois Power Agency may consult with and seek assistance from (i) Independent System Operators in other states, such as Texas, California, and New York, (ii) federal agencies, such as the Federal Energy Regulatory Commission, and (iii) the regional transmission organizations PJM and MISO. Any information designated as confidential or proprietary information by the entity providing the information shall be kept confidential by the Commission, its consultants, and its contractors, and the Illinois Power Agency, its consultants, and its contractors, and is not subject to disclosure under the Freedom of Information Act. The Office of the Attorney General shall have access to, and maintain the confidentiality of, such information pursuant to Section 6.5 of the Attorney General Act. (f) The Commission and the Illinois Power Agency shall publish the joint final policy study no later than December 1, 2026 and suitable copies shall be delivered to the Governor and members of the General Assembly.

Legislative History

(Source: P.A. 104-458, eff. 6-1-26.)