Indexed REC-29: How are benchmarks calculated?

The Illinois Power Agency Act (“IPA Act”) requires that benchmarks are kept confidential. Benchmarks are established by the Procurement Administrator, in consultation with the IPA, the Procurement Monitor, and the ICC Staff. The benchmark is subject to review and approval by the Commission.

Section 1-75(c)(1)(D) of the Act states that, “Renewable energy credits shall be cost effective. For purposes of this subsection (c), “cost effective” means that the costs of procuring renewable energy resources do not cause the limit stated in subparagraph (E) of this paragraph (1) to be exceeded and, for renewable energy credits procured through a competitive procurement event, do not exceed benchmarks based on market prices for like products in the region. For purposes of this subsection (c), “like products” means contracts for renewable energy credits from the same or substantially similar technology, same or substantially similar vintage (new or existing), the same or substantially similar quantity, and the same or SB2408 Enrolled LRB102 11366 BMS 16699 b Public Act 102-0662 substantially similar contract length and structure. Benchmarks shall reflect development, financing, or related costs resulting from requirements imposed through other provisions of State law, including, but not limited to, requirements in subparagraphs (P) and (Q) of this paragraph (1) and the Renewable Energy Facilities Agricultural Impact Mitigation Act. Confidential benchmarks shall be developed by the procurement administrator, in consultation with the Commission staff, Agency staff, and the procurement monitor and shall be subject to Commission review and approval. If price benchmarks for like products in the region are not available, the procurement administrator shall establish price benchmarks based on publicly available data on regional technology costs and expected current and future regional energy prices. The benchmarks in this Section shall not be used to curtail or otherwise reduce contractual obligations entered into by or through the Agency prior to June 1, 2017 (the effective date of Public Act 99-906).”

In response to concerns raised seeking some transparency into benchmark development and allowing for potential bidders to provide information to the Procurement Administrator for review, Chapter 5.8 of the 2024 Long-Term Plan describes a new comment process to be held as part of the benchmark development process for each Indexed REC procurement event. The Benchmark Categories of Inputs, Assumptions and Data Sources comment process for the 2024 Summer Indexed REC RFP concluded on Wednesday, April 24, 2024. The invitation to comment can be viewed here.

No additional information is available.