Attorney General Lisa Madigan’s office filed a complaint on Thursday with the Federal Energy Regulatory Commission saying electricity capacity prices for downstate Illinois residents are not just and reasonable.
In April, an electricty capacity auction held by the Midcontinent Independent System Operator, which operates the electricity grid in all or parts of 15 states, led to $150 per megawatt-day for Ameren’s southern and central Illinois customers.
Madigan’s office alleges the MISO auction failed to produce “just and reasonable” rates pursuant to the Federal Power Act.
Madigan’s office asked the regulatory commission to investigate the situation, suspend the auction results, and set new capacity rates for downstate Illinois electricity customers.
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The rest of MISO’s zones had prices of $3.50 per megawatt-day.
“These shockingly steeper prices will place a substantial burden on Illinois electricity customers,” Cara Hendrickson, chief of the Public Interest Division for the Attorney General’s Office, wrote.
In a statement emailed to the BND, MISO spokesman Andy Schonert said the grid operator has received a copy of the filing.
“MISO is reviewing the complaint and will respond in the FERC proceeding," Schonert said.
Madigan’s office also pointed out Texas-based Dynegy, which also has acquired Homefield Energy, has more than half of the electricity generating capacity of MISO’s Illinois territory.
Hendrickson asked the commission to investigate whether Dynegy attempted to increase the price in the capacity auction, and if so whether such conduct is legal.
Micah Hirschfield, managing director of Communications for Dynegy, said the company followed the rules of the markets in which it operates.
“Dynegy offered all of its megawatts into the MISO auction with no physical or economic withholding in accordance with MISO tariffs and as approved by the Independent Market Monitor,” Hirschfield said in a statement. “MISO’s Independent Market Monitor has publicly stated that ‘the auction results are reliable and participants’ behavior was in line with all tariff rules and procedures.’”
Ameren Illinois charges an electricity supply price to customers without any markup.
Because of the auction results, electricity bills starting on June 1 are expected to increase by more than $11 a month for electricity supply for a residential customer who uses 10,000 kwh of energy a year.
Communities with municipal aggregation contracts are not affected by the capacity auction results.
Dynegy itself has nearly 50 metro-east communities, including Washington Park, Shiloh, Swansea, Edwardsville, Cahokia, East St. Louis, O’Fallon and Belleville, with contracts that expire between 2016 and 2018.
Depending on when a contract was signed, a metro-east customer under an aggregation deal would save between 5 and 20 percent on the supply side of their energy bill.