Illinois Commission Orders Cost-Benefit Study of Ameren Joining PJM

The Illinois Commerce Commission on July 22 directed Ameren to carry out a cost-benefit analysis of the company’s continued membership in the  Midcontinent Independent System Operator (MISO) versus joining the  PJM Interconnection. MISO’s failure to fulfil resource demand in a capacity auction for the period June 2022-May 2023 triggered rising wholesale prices and utility bills for central and southern Illinois customers. This prompted  the commission to explore whether remaining in MISO  offers maximum benefits to the company’s customers in electric energy. Further, the commision is no longer required by statute to prohibit an electric utility from taking membership in a regional transmission organization of its choice after the applicable section of the Public Utilities Act ceased to be effective on July 1.

The order is based on recommendations in a report by the commission staff. As per the order, the cost-benefit analysis should consider a period of 5-10 years. The staff recommends that the study consider the costs and benefits to ratepayers including:

• Reliability, resource adequacy, resiliency, affordability, and environmental impacts
• Health and safety assessment, and welfare of the people in the State

In Illinois, the General Assembly passed the Electric Service Customer Choice and Rate Relief Act in December 1997. This enabled the commission to open the electricity market to different electricity suppliers. The law required most Illinois electric utilities to provide their customers with the ability to purchase electricity from other suppliers, including investor-owned utilities.

As per the act, the commission remains the state’s electricity regulatory body that governs utility operations in the state. The competitive wholesale electricity market in the state is managed by two regional grid  operators. They are PJM Interconnection, which manages the northern portion of the state, and MISO, which manages the southern portion of the state. Electricity consumers, including domestic, and commercial, may choose their electric energy suppliers from a list of state-certified alternative retail electric suppliers or from the utility working in their local areas. The investor-owned utilities  are the default electricity providers in the state.

MISO operates in 15 states, and Illinois is the only fully competitive state in its electricity transmission system. Utilities of other states in MISO’s footprint are vertically integrated, having a complete electric energy value chain including generation, transmission, and distribution.

As per the order, Ameren has full independence to conduct the cost benefit analysis. The company is required to complete the study within one year and submit the results to the commission. Stakeholders can comment on the study within 30 days of the submission of the report.