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On October 14, a Hearing Examiner at the Illinois Commerce Commission (ICC) issued a  Proposed Order in ComEd’s petition for approval of a Multi-Year Integrated Grid Plan under Section 16-105.17 of the Public Utilities Act for the years 2028 through 2031.

Highlights from the proposed order follow.

Cost Effectiveness – Commission Analysis and Conclusion

“The Commission agrees with Staff and finds that ComEd has complied with the Order on Refiling and the Act’s cost-effective requirements. Much of the parties’ arguments are centered on compliance with the Commission’s directive that it “emphasizes the importance of a complete cost effectiveness analysis. In future grid plans, the Commission does not expect 72% of the Company’s planned investments to be categorically exempt from the appropriate BCA.” Order on Refiling at 34. This language is rooted in the requirements of P.A. 102-0662, which requires ComEd’s Grid Plan to assess and satisfy a cost-effectiveness analysis of proposed system investments, ensure utility expenditures are cost-effective, and demonstrate how its plan will minimize total system costs while maximizing benefits. See 220 ILCS 5/16-105.17(d)(1) (maximize benefits while remaining cost effective); (d)(2) (Grid Plan must be designed to optimize utilization of energy and resources and to minimize costs); and (d)(7) (Grid Plan must provide a cost-effectiveness analysis of proposed investments).”

Discount Rate – Commission Analysis and Conclusion

“The Commission agrees with Staff and directs ComEd to utilize a discount rate of 6.705%, the Commission-approved WACC for the year ending December 31, 2027, from the Company’s 2024 Grid Plan proceeding, for the BCA ComEd uses to determine the cost-effectiveness of proposed system investments for the Company’s 2028 MYIGP. The Commission declines to adopt Staff’s recommendation for ComEd to utilize a discount rate equal to its Commission-authorized WACC for 2031 for the BCA ComEd uses to determine the cost-effectiveness of proposed system investments in its 2032-2035 MYIGP proceeding because the appropriate discount rate in that proceeding should be determined at that time based on the evidence before the Commission. The Commission also declines to adopt JNGO’s recommendation. Although the IPA Act uses a 3% discount rate for the social cost of carbon, there is no requirement that it be applied here.”

Third Party Costs of Environmental Benefits – Commission Analysis and Conclusion

“As agreed to by ComEd and supported by JNGO, the AG, and Staff, the Commission directs ComEd to include the “direct” costs and associated offsetting benefits to customers of enabled EVs and DER in its cost-effectiveness evaluation for the current Grid Plan as well as future grid plans. The Commission further directs ComEd to incorporate the results of this approach in its compliance filing for the current Grid Plan and clearly delineate the direct emissions reductions from ComEd facilities and enabled emissions reductions by third party facilities in its compliance filing for the current Grid Plan. In addition, the Commission directs ComEd to provide baseline, timing, and adoption profiles for EVs and DERs. Finally, the Commission directs ComEd to work with Ameren and stakeholders on a consistent statewide methodology for enabled emissions.”

National Standard Practice Manual for DERs – Commission Analysis and Conclusion

“[T]he Commission agrees with Staff and finds that ComEd has complied with the Order on Refiling and the Act’s cost-effective requirements. The Commission declines to adopt JNGO’s proposal to adopt a statewide cost-effectiveness test similar to that contained in the NSPM. ComEd’s compliance with the current cost-effectiveness framework is discussed above.”

Grid Plan Affordability – Commission Analysis and Conclusion

“The Commission finds that ComEd’s Grid Plan complies with Section 16- 105.17(d)(11) of the Act but agrees with the AG, Staff, JNGO, and IIEC-CUB that while the Order on Refiling approved ComEd’s affordability framework, the Order on Refiling encouraged continued refinement of the affordability analysis methodology. See Order on Refiling at 72-73. ComEd states that its affordability seeks to: (1) maintain rates within affordability thresholds; (2) provide programs that can reduce energy usage and customer bills; and (3) offer tools and assistance to help customers better manage their energy use. The Commission finds that the record demonstrates that ComEd considers a number of factors, including historical volumes, capacity forecasting, inspection results, regulatory and statutory compliance, risk scoring, equipment asset health, and benchmarking when identifying and rightsizing grid investments. Further, ComEd measures affordability utilizing the energy burden framework, and the Commission agrees this is consistent with its previous directives. See Docket No. 23-0066, Order at 202; Docket Nos. 23-0068/23- 0069 (Consol.), Order at 266. The energy burden approach provides that a residential customer’s total energy costs do not exceed 3% (for non-electric space heat customers) or 6% (for electric space heat customers) of the average residential customer’s income. ComEd uses a comparative analysis for C&I customers that examines other metropolitan areas. The Commission finds these methodologies acceptable.”

Equity – Commission Analysis and Conclusion

“The Grid Plan satisfies P.A. 102-0662’s equity requirements. Section 16- 105.17(d)(3) requires utilities to direct at least 40% of the benefits of grid modernization and clean energy investments to EIECs, and ComEd’s benefits analysis shows that approximately 41.8% to 43.8% of quantifiable Grid Plan benefits will flow to EIECs, exceeding the statutory threshold. ComEd notes that it has incorporated equity throughout its Grid Plan through targeted investments, reliability initiatives, affordability programs, workforce development efforts, stakeholder engagement, and updated EIEC designations that reflect current EJ and R3 community boundaries.”

Capacity Planning and Management – Contested – Five New Substations – Commission Analysis and Conclusion

“[T]he Commission notes that the primary questions raised here are whether the data centers that are included in the Company’s load projections will actually be built and, based on ComEd’s load projections, are the proposed substations necessary. The Commission has previously found in the Order on Refiling that large new business funding is speculative. Order on Refiling at 149. The record here does not show otherwise. For that reason, Staff’s recommendation to require ComEd to study alternatives or contingency plans for if a data center is canceled is a reasonable, proactive proposal. ComEd, on the other hand, asserts that its normal planning processes are sufficient. The Commission disagrees and finds that normal planning processes, which reflect normal circumstances, are not sufficient for the Commission’s review of the substations being proposed in response to data centers. The Commission finds Staff’s proposal appropriate, and it is adopted.”

DER Integration Investment – Commission Analysis and Conclusion

“The Commission agrees with Staff and finds that ComEd’s DER Integration investment adheres to the December 2023 Order by enhancing the DER hosting capacity that ComEd identified to be lacking in its operating regions. The Commission therefore approves the investment. Nonetheless, the Commission notes CUB’s concerns that this investment is not cost effective and that JSP urge the Commission to adopt a Massachusetts-style cost allocation approach to ensure that the specific DER that benefit from hosting capacity upgrades such as the DER Integration program pay a pro rata share of costs based on hosting capacity benefits for their interconnection.”

Contested – Large Load Interconnection Processes – Commission Analysis and Conclusion

“The Commission finds that proposals regarding transparency and processes made by JNGO, CUB, the City, and Constellation are best contemplated in Docket No. 26-0364 where a more holistic discussion of ratepayer protections and cost recovery mechanisms is taking place. In addition, the Commission notes that IIEC-CUB raised the issue of an EFSA. The record is not fully developed around this proposal here and it could have also been raised in Docket No. 26-0364 where IIEC is also a party.

Furthermore, the Commission agrees with Staff that there may ultimately prove to be reasons for treating data centers and other large customers differently, but that determination should result from a common proceeding that can fully explore those differences. Therefore, the Commission declines to formally adopt CUB’s change from 50 MW to 20 MW to classify large load customers.

In the meantime, the Commission finds that it is prudent to remove the speculative costs of data centers from this proceeding and therefore directs their removal. This directive is consistent with the Commission’s Order in the RGP which notes “particularly given the speculative nature of spending related to data centers and other large customer additions,” these costs are similarly excluded. Order on Refiling at 149. ComEd is not precluded from later seeking to recover these costs as they would qualify as new business and not subject to the 105% cap. The Commission makes clear that no prejudgment has been made but rather would like to fully assess the costs that are certain, not speculative. Accordingly, the Commission adopts Staff’s proposal to adjust the Unique C&I New Business program funding using the 50% factor described above for a total adjustment of $580,154,268, apportioned by year.”

Unique C&I Program – Commission Analysis and Conclusion

“The Commission notes that ITN 366057 was removed from this Grid Plan pursuant to the Commission’s decision above in Section IV.G.2.a.9. As for ITN 5741, the Commission rejects IIEC-CUB’s proposal to reduce the investment level by $15.5 million as this ITN includes projects beyond data centers and funds the difference btween the sum of costs for specifically identified projects and the three-year historical average, as calculated by the three most recently completed actual spend years. The Commission therefore approves the funding for ITN 5741.”

Large Customer Engagement – Commission Analysis and Conclusion

“The issues the City raises are troubling due to the regulatory and operational risks facing CDA. Nonetheless, it is unclear that a dedicated customer group would be better equipped to effectively serve the unique needs of CDA. Rather than creating a new group, the Commission directs ComEd to make a compliance filing in this proceeding by July 1, 2027 detailing whether the residual issues regarding meter data and billing issues from the Business Energy Analyzer and issues regarding data access with the Green Button Connect program have been resolved.”