Illinois Committee Sends Tenaska Sourcing Agreement Bill to House Floor

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November 30, 2010

The Illinois House Electric Generation & Commerce Committee reported out with a favorable recommendation SB2485, the Tenaska Taylorville Energy Center sourcing agreement bill, by a vote of 7-4.  

Rep. Frank Mautino, the bill's House sponsor, said Monday that he is about 18 votes shy of the 60 needed to move the bill out of the House.  A vote could come as early as Wednesday.  The current veto session runs through January.

The bill would compel alternative retail electric suppliers and utilities to execute power purchase agreements or similar agreements for the output of the Tenaska plant.  The bill has been significantly amended since first introduced last year, most notably to expand the cost caps to include all eligible retail customers (including small commercial customers) of the utilities, rather than just residential customers.  

None of the amendments address the disparate treatment of alternative retail electric suppliers whose customers would not be protected by any cost cap, and would still bear any unrecovered costs due to the application of cost caps to utility customers.  

Among other major changes to the bill is reduced authority for the Illinois Commerce Commission in determining the prudency of costs, as the ICC would now share such authority with the Capital Development Board.  Notably, the Capital Development Board would be charged with determining a range of "reasonable" capital costs for the facility, and the ICC would simply review whether costs fall within this range.

The amended bill also provides that Tenaska shall bear two-thirds of "reasonable" costs above any pre-approved capital costs; however, opponents such as the STOP Coalition noted that such a measure provides little protection since costs could be classified as non-capital costs to avoid the provision.

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