In 1997, the Electric Service Customer Choice and Rate Relief Law of 1997 (the "Customer Choice Law") was passed by the Illinois General Assembly. The Customer Choice Law initiated the opportunity for customers to purchase power from the supplier of their choice and a restructuring of the State's electric power industry. The Customer Choice Law provided for a transition period toward delivery service unbundling and greater reliance on market forces. During this transition period, rates to customers were frozen and the Illinois utilities, the Commonwealth Edison Company ("ComEd"), and the three Ameren Utilities, namely Central Illinois Light Company d/b/a AmerenCILCO, Central Illinois Public Service Company d/b/a AmerenCIPS, and Illinois Power Company d/b/a AmerenIP (collectively "Ameren"), supplied their customers on the basis of long-term power supply contracts. ComEd and Ameren no longer own generation in Illinois. The transition period ends December 31, 2006.

In preparation for the end of the transition period, from February to December 2004, stakeholders participated in the Post 2006 Initiative. The Illinois Commerce Commission ("ICC") held a series of meetings and workshops to examine the future of the electric market in Illinois, public policy issues surrounding restructuring of the electric industry, and critical questions concerning procurement of supply to serve customers in the post-2006 environment. The Initiative resulted in a Post 2006 Final Report with ICC Staff recommendations. In this report, the ICC Staff recommended that for large utilities with no generation such as ComEd and Ameren, “the Commission endorse one of the 12 procurement methods analyzed by the group: the vertical tranche auction.”

On February 25, 2005, ComEd filed a proposal with the ICC for procurement of supply for its customers in the Post 2006 period “that implement a competitive procurement process that will enable ComEd to provide reliable service to customers post 2006 at just and reasonable rates, and to accurately determine the market value of electric power and energy” (full text of filing in docket 05-159).

Ameren filed its proposal on February 28, 2005. “The revised tariff sheets define and establish the generation services that the Ameren Utilities upon the expiration of the mandatory transition period, effective January 2, 2007.” (full text of filing in dockets 05-160, 05-161, and 05-162).

These proposals were to use an auction to determine wholesale prices in different rate classes and have those rates be determined based on vertical tranche auction results. ComEd and Ameren would gain access to greater supply diversity and their customers would no longer face the financial risks associated with having utilities construct generating facilities and assume resulting stranded cost and market price risk. The competitive procurement process permits the companies to accurately set market values, puts all suppliers on an equal footing, and harnesses powerful incentives to stabilize and minimize their power supply costs.

On January 24, 2006, the ICC issued orders approving the use of an auction to be held in September 2006. This site provides information on the Illinois Auction process for the procurement of electricity at wholesale by Ameren and ComEd for delivery to Illinois retail consumers requiring supply service from their local distribution utility.