Publications

16 Aug 2010

Legislative update: Illinois amends the law regulating the ABCs

Illinois Energy Alert

Christopher J. Townsend
Christopher N. Skey

The laws governing the Illinois retail electric market continue to evolve, with some important changes coming soon to the way in which one element of the market operates.  Illinois Governor Pat Quinn recently signed legislation modifying the Broker Licensing Act, a law passed in 2007 to regulate the activities of electricity agents, brokers and consultants (ABCs). 

As explained in our November 2007 Alert, “Illinois to Start Regulating the ABCs,”  the Broker Licensing Act (Public Act 095-0679) created licensing and disclosure requirements on a variety of participants in the restructured Illinois electricity market.  As a result, with some limited exceptions, any person who provides guidance to residential and small commercial customers (those with aggregate billing demand of less than 1,500 kW) regarding their electricity purchases must obtain a license from the Illinois Commerce Commission (ICC).  The new law (Public Act 96-1385 – the Amended Act), adds some additional disclosure requirements for covered parties, while clarifying and modifying other requirements imposed upon ABCs. 

New Disclosure Requirements for ABCs

The Amended Act’s new disclosure requirements include the following:

• All third-party sales representatives in the retail electricity market must, during the sales pitch or negotiations, disclose that they are not employed by the utility.  220 ILCS 5/16-115C(a-5)
• Until July 1, 2011, an ABC must continue to provide written disclosure of “the total anticipated remuneration” it will receive from third parties during the life of the contract.  220 ILCS 5/16-115C(e)(1).  That requirement ends on June 30, 2011, at which point the ABC must disclose to customers that they receive compensation from suppliers (to the extent that they do receive compensation).  220 ILCS 5/16-115C(e)(2), and
• Beginning on July 1, 2011, ABCs must also disclose in writing to solicitees: “the total price per kilowatt-hour, and the total anticipated cost, inclusive of all fees or commissions received by the [ABC], to be paid by the customer over the period of the proposed underlying contract.”  220 ILCS 5/16-115C(e)(1)

Modified Definition of ABC

Beyond the disclosure requirements, the Amended Act changes the definition of ABCs.  Now, the definition of ABCs:

• Explicitly excludes the Illinois Power Agency, and
• Explicitly excludes any person acting exclusively on behalf of a supplier, as long as the person discloses the exclusivity.

220 ILCS 5/16-115C(b).  The rest of the definition remains intact.

Discipline No Longer Mandatory

The Amended Act  removes the requirement that appeared to mandate that the Illinois Commerce Commission (ICC) suspend the license of an ABC for its first violation of the ABC rules.  The Amended Act states that the ICC “may, in its discretion,” suspend an ABC’s license for rules violations for one month or more.  220 ILCS 5/16-116C(g).  The minimum suspensions for second and third violations by ABCs remain mandatory. Id.

Reporting Requirements Automatically Protect Competitively Sensitive Information

The Amended Act specifically permits an ABC to file both a proprietary and public redacted version of its annual report with the ICC, and specifically permits the public redacted version to omit identification of electric suppliers in order to protect against disclosure of “competitively sensitive market share information.”  The proprietary versions of annual reports are afforded confidential treatment for two years from the date of filing.

For more information, please contact:

Christopher Townsend

Christopher Skey