STATE OF ILLINOIS ILLINOIS COMMERCE COMMISSION
DOCKET NO. 23-0214
VERIFIED PETITION OF METROPOLITAN TRANSIT DEVELOPMENT CORPORATION FOR APPROVAL OF ELECTRIFICATION INFRASTRUCTURE INTERCONNECTION AND POWER-PURCHASE ARRANGEMENT
Filed: March 1, 2023
C&H Matter No.: 1031-00002
Filed By:
Calderwood & Harkness LLP 70 West Madison Street, Suite 5000 Chicago, Illinois 60602
On Behalf of Petitioner Metropolitan Transit Development Corporation
Attorneys of Record:
Patricia Dunmore, Responsible Partner David Stanton, Lead Associate Michelle Tsao, Working Associate
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I. INTRODUCTION AND SUMMARY OF RELIEF REQUESTED
Metropolitan Transit Development Corporation ("MTDC" or "Petitioner"), an Illinois municipal corporation and public transit authority organized and existing under the Metropolitan Transit Development Act, 70 ILCS 3615/1 et seq., by and through its undersigned counsel, Calderwood & Harkness LLP, respectfully petitions the Illinois Commerce Commission ("Commission" or "ICC") for an order:
1. Approving the interconnection of new high-capacity depot charging infrastructure with a combined electrical load of approximately forty-five megawatts ("MW") to the distribution system of Prairie Shore Electric Company ("Prairie Shore") at three MTDC bus depot locations situated within the City of Chicago, Illinois, and its immediate environs, as more fully described herein;
2. Approving a proposed Infrastructure Cost-Sharing Agreement between MTDC and Prairie Shore governing the allocation of an estimated Twelve Million Three Hundred Thousand Dollars ($12,300,000) in distribution-system upgrade costs necessary to accommodate the proposed interconnection at said depot locations;
3. Approving Prairie Shore's filing of a new tariff rate schedule, designated Schedule EV-T (Electric Vehicle — Transit), establishing a time-of-use rate structure for electric service to MTDC's depot charging facilities at a proposed blended rate of Six and Two-Tenths Cents ($0.062) per kilowatt-hour ("kWh"); and
4. Granting such other and further relief as the Commission deems just and appropriate in the circumstances.
This Verified Petition arises from Phase 1 of MTDC's comprehensive fleet electrification program, which involves the procurement of two hundred twenty-five (225) battery-electric transit buses and the installation of depot charging infrastructure at three existing MTDC bus garages. The total project cost for Phase 1 is Ninety-Eight Million One Hundred Twenty-Five Thousand Dollars ($98,125,000), funded primarily by a Seventy-Eight Million Five Hundred Thousand Dollar ($78,500,000) grant from the Federal Transit Administration ("FTA") under the Low- and No-Emission Vehicle Program, as authorized by 49 U.S.C. § 5339(c), pursuant to Grant Award Number IL-2023-0067-00, with a local match of Nineteen Million Six Hundred Twenty-Five Thousand Dollars ($19,625,000) provided by MTDC from its own capital resources.
The Phase 1 electrification project represents a critical milestone in MTDC's commitment to fleet modernization and environmental sustainability. By converting approximately 12.2% of its active bus fleet from diesel and compressed natural gas ("CNG") propulsion to battery-electric operation, MTDC will substantially reduce criteria pollutant emissions and greenhouse gas emissions across its six-county service area in northeastern Illinois. The project further aligns with the State of Illinois's clean energy objectives and the federal government's commitment to transit decarbonization.
Commission approval of the relief requested in this Verified Petition is a prerequisite to the commencement of construction of the depot charging infrastructure and the execution of the interconnection and power-purchase arrangements with Prairie Shore. Accordingly, MTDC respectfully urges the Commission to consider this Petition on an expedited basis consistent with the procedural schedule proposed herein.
II. PARTIES AND INTERESTED PERSONS
A. Petitioner — Metropolitan Transit Development Corporation
The Petitioner in this proceeding is Metropolitan Transit Development Corporation, an Illinois municipal corporation and public transit authority created pursuant to the Metropolitan Transit Development Act, 70 ILCS 3615/1 et seq. MTDC's principal offices are located at 200 West Adams Street, Suite 2400, Chicago, Illinois 60606. MTDC's Employer Identification Number is 36-4178220.
MTDC is governed by a Board of Directors appointed in accordance with the provisions of the Metropolitan Transit Development Act. The current Chair of the Board is Alderman Vivian Ochoa-Brennan. The principal officers of MTDC relevant to this proceeding are as follows:
• Executive Director: Harold J. Greenway
• Chief Financial Officer: Sandra R. Pellegrino
• General Counsel: Constance M. Adler
• Director of Capital Programs: Raymond K. Mosley
MTDC provides public transit services throughout a six-county area in northeastern Illinois, encompassing Cook, DuPage, Kane, Lake, McHenry, and Will Counties. MTDC's active revenue vehicle fleet consists of approximately 1,840 buses, currently powered by diesel and compressed natural gas engines, and 312 heavy-rail cars operating on electrified rail lines. MTDC's Fiscal Year 2023 annual operating budget is approximately One Billion Four Hundred Twenty Million Dollars ($1,420,000,000), making it one of the largest public transit agencies in the State of Illinois and the Midwest region.
MTDC has the statutory authority, under 70 ILCS 3615, to acquire, construct, own, operate, and maintain transit facilities, equipment, and infrastructure, and to enter into contracts and agreements with public utilities for the provision of electric service and related infrastructure necessary to support its transit operations.
B. Affected Utility — Prairie Shore Electric Company
The affected utility in this proceeding is Prairie Shore Electric Company, an Illinois investor-owned electric utility organized and existing under the laws of the State of Illinois and publicly traded on the New York Stock Exchange. Prairie Shore's principal offices are located at 500 North Michigan Avenue, Chicago, Illinois 60611.
Prairie Shore is the incumbent electric utility serving each of the three MTDC depot locations at which the proposed charging infrastructure would be installed. Prairie Shore holds a certificate of public convenience and necessity issued by this Commission authorizing it to provide electric service within its certificated service territory, which encompasses the locations of all three MTDC bus garages identified in this Petition.
The principal officers of Prairie Shore relevant to this proceeding are as follows:
• President and Chief Executive Officer: Thomas D. Waverly
• Vice President, Regulatory Affairs: Judith A. Engstrom
Prairie Shore's outside regulatory counsel is the firm of Hargrove, Peck & Tillotson LLP, 120 South LaSalle Street, Suite 3100, Chicago, Illinois 60603, with lead attorney Andrew S. Peck serving as counsel of record in regulatory proceedings before this Commission.
It is anticipated that Prairie Shore will seek to intervene in this proceeding by filing a Petition to Intervene in accordance with the Commission's Rules of Practice, 83 Ill. Admin. Code Part 200. MTDC does not object to Prairie Shore's intervention, as Prairie Shore is a necessary and indispensable party to the interconnection and rate-setting matters at issue in this Petition.
C. Counsel for Petitioner
MTDC is represented in this proceeding by Calderwood & Harkness LLP, a law firm with offices at 70 West Madison Street, Suite 5000, Chicago, Illinois 60602. The attorneys of record for MTDC in this proceeding are:
• Patricia Dunmore, Responsible Partner
• David Stanton, Lead Associate
• Michelle Tsao, Working Associate
All pleadings, correspondence, notices, discovery requests, and other communications related to this proceeding should be directed to counsel for Petitioner at the address set forth above, or by electronic mail to the following addresses:
• Patricia Dunmore: pdunmore@calderwoodharkness.com
• David Stanton: dstanton@calderwoodharkness.com
• Michelle Tsao: mtsao@calderwoodharkness.com
Telephone: (312) 555-7800 Facsimile: (312) 555-7801
III. JURISDICTION AND AUTHORITY
The Commission has jurisdiction over this Verified Petition and the subject matter herein pursuant to the Illinois Public Utilities Act ("PUA"), 220 ILCS 5/1-101 et seq. The Commission's jurisdiction and authority to consider and act upon the relief requested in this Petition is established by multiple provisions of the PUA, as set forth below.
Jurisdiction Over Interconnection. Pursuant to Sections 8-406 and 8-406.1 of the PUA, the Commission has authority and jurisdiction over the interconnection of new electrical load to the distribution system of a regulated electric utility. The proposed interconnection of MTDC's depot charging infrastructure, with a combined new electrical load of approximately 45 MW, to Prairie Shore's distribution system at three depot locations constitutes a significant new service connection requiring Commission review and approval. The magnitude of the proposed new load—approximately 45 MW in aggregate—is substantial relative to the existing load served by the distribution feeders and substations at each of the three depot locations, and the distribution-system upgrades necessary to accommodate this load require coordinated planning and cost allocation between MTDC and Prairie Shore under Commission oversight.
Jurisdiction Over Tariff Rate Schedules. Pursuant to Sections 9-201 through 9-252 of the PUA, the Commission has exclusive jurisdiction over the establishment, modification, and approval of tariff rate schedules filed by regulated electric utilities, including Prairie Shore. The proposed Schedule EV-T (Electric Vehicle — Transit) is a new tariff rate schedule not currently on file with the Commission, and Prairie Shore's filing of this schedule requires Commission approval before it may become effective. The Commission's authority in this regard extends to review of the rate structure, the proposed blended rate of $0.062 per kWh, the demand charge components, and all other terms and conditions of service specified in the proposed schedule.
Jurisdiction Over Cost-Sharing Arrangements. The Commission has jurisdiction over the proposed Infrastructure Cost-Sharing Agreement between MTDC and Prairie Shore, as it involves the allocation of costs for distribution-system infrastructure improvements between a regulated electric utility and a customer. The Commission's oversight authority in this regard ensures that the cost allocation is just and reasonable and does not result in undue cross-subsidization or adverse rate impacts to other Prairie Shore customers.
MTDC's Authority. MTDC is a public transit authority created under the Metropolitan Transit Development Act, 70 ILCS 3615/1 et seq., with broad statutory authority to acquire, construct, and operate transit facilities and to enter into agreements with public utilities for the provision of electric service. Section 3615/25 of the Act authorizes MTDC to enter into contracts and agreements necessary to carry out its statutory purposes, including agreements for the supply of energy and the construction of infrastructure supporting its transit operations. MTDC's Board of Directors has authorized the filing of this Verified Petition by resolution adopted on February 15, 2023, a copy of which is attached hereto as Exhibit F.
Basis for Commission Approval. The proposed interconnection and power-purchase arrangement require Commission approval because they involve, individually and collectively: (a) new service connections aggregating approximately 45 MW of load on the Prairie Shore distribution system, representing a material increase in electrical demand at three distribution nodes; (b) distribution-system upgrades requiring a cost allocation between a regulated electric utility and a transit authority customer in the amount of $12,300,000; and (c) a new tariff rate schedule (Schedule EV-T) not currently on file with the Commission, establishing rates, terms, and conditions of service for a novel class of high-capacity transit electrification load.
Federal Jurisdictional Considerations. The FTA Grant IL-2023-0067-00 is administered under 49 U.S.C. § 5339(c) and is subject to federal requirements governing the use of grant funds, including compliance with the National Environmental Policy Act, the Americans with Disabilities Act, and other applicable federal statutes and regulations. However, the interconnection of MTDC's charging infrastructure to Prairie Shore's distribution system and the establishment of rates for electric service are matters exclusively within the regulatory jurisdiction of this Commission under the PUA. No aspect of the relief requested in this Petition trenches upon exclusive federal jurisdiction, and the FTA grant terms expressly require MTDC to obtain all necessary state and local regulatory approvals as a condition precedent to the disbursement of grant funds for charging infrastructure construction.
IV. BACKGROUND AND PROJECT DESCRIPTION
A. MTDC's Strategic Sustainability Plan
In September 2021, the Board of Directors of MTDC formally adopted a Strategic Sustainability Plan (the "Sustainability Plan") setting forth MTDC's commitment to fleet modernization, environmental stewardship, and operational resilience. The Sustainability Plan establishes a comprehensive roadmap for the transition of MTDC's 1,840-bus fleet from conventional fossil-fuel-powered vehicles to battery-electric propulsion, with a target of converting forty percent (40%) of the bus fleet—approximately 736 vehicles—to battery-electric operation by the year 2030.
The Sustainability Plan was developed over a period of approximately eighteen months through an extensive stakeholder engagement process that included public hearings, technical workshops, and consultations with environmental organizations, community groups, transit rider advocacy groups, and local government officials across MTDC's six-county service area. The Plan reflects the consensus view that fleet electrification is the most effective strategy available to MTDC for reducing its environmental footprint, improving air quality in the communities it serves, and positioning the agency for long-term operational efficiency gains associated with lower fuel and maintenance costs for battery-electric vehicles.
Phase 1 of the fleet electrification program, which is the subject of this Verified Petition, represents the inaugural implementation phase of the Sustainability Plan. Phase 1 encompasses the procurement of 225 battery-electric transit buses and the installation of depot charging infrastructure at three existing MTDC bus garages, as described in detail below. The 225 battery-electric buses to be acquired under Phase 1 represent approximately 12.2% of MTDC's total active bus fleet of 1,840 vehicles, constituting an important initial step toward the Sustainability Plan's 2030 target.
MTDC's Sustainability Plan contemplates that subsequent phases of fleet electrification will be implemented over the period from 2025 through 2030, subject to the availability of federal and state funding, advances in battery technology, and the capacity of the electric grid to accommodate the additional charging load. The successful completion of Phase 1, including the establishment of the interconnection, cost-sharing, and rate arrangements sought in this Petition, will provide the operational framework and regulatory precedent for future phases of the electrification program.
B. The FTA Grant Award
On January 9, 2023, the Federal Transit Administration, Region V, issued a Notice of Award to MTDC under Grant Award Number IL-2023-0067-00 (the "FTA Grant"). The FTA Grant was awarded pursuant to the Low- and No-Emission Vehicle Program, authorized by 49 U.S.C. § 5339(c), which provides competitive grants to transit agencies for the purchase or lease of zero-emission and low-emission transit buses and the acquisition, construction, and leasing of required supporting facilities, including charging infrastructure.
The FTA Regional Administrator for Region V who authorized the grant is Karen L. Osterman. A copy of the FTA Notice of Award is attached to this Verified Petition as Exhibit E.
The financial terms of the FTA Grant are as follows:
• FTA Grant Amount: $78,500,000, representing eighty percent (80%) of total eligible project costs
• Total Eligible Project Cost: $98,125,000 (calculated as $78,500,000 ÷ 0.80)
• MTDC Local Match Requirement (20%): $19,625,000 ($98,125,000 − $78,500,000)
The FTA Grant provides funding for the procurement of battery-electric buses and the construction of depot charging infrastructure, including electrical equipment, charging stations, site improvements, and related engineering and design costs. The grant terms require MTDC to comply with all applicable federal, state, and local laws and regulations, including obtaining necessary state regulatory approvals for utility interconnection and rate arrangements, prior to commencing construction of the charging infrastructure.
The FTA Grant disbursement schedule is structured to provide milestone-based payments tied to the achievement of project milestones, including the execution of bus procurement contracts, the completion of charging infrastructure design, the commencement and completion of construction, and the deployment of battery-electric buses into revenue service. MTDC's ability to draw down grant funds for charging infrastructure construction is contingent upon its demonstration of compliance with all regulatory prerequisites, including the Commission approvals sought in this Petition.
C. Project Cost Breakdown
The total cost of Phase 1 of MTDC's fleet electrification program is comprised of the following components:
The bus procurement cost of $71,800,000 covers the acquisition of 225 battery-electric transit buses at an average per-unit cost of approximately $319,111. This per-unit cost is consistent with current market pricing for heavy-duty, 40-foot battery-electric transit buses equipped with high-capacity lithium-ion battery packs, regenerative braking systems, and advanced climate-control systems suitable for year-round revenue service in the Chicago metropolitan area.
The depot charging infrastructure cost of $26,325,000 encompasses all customer-side electrical and charging equipment, including high-power DC fast chargers, overnight Level 2 chargers, switchgear, panelboards, conduit runs, electrical service entrances, power management systems, and site improvements such as concrete pads, drainage modifications, and utility trenching at each of the three depot locations. This amount is calculated as the difference between the total project cost of $98,125,000 and the bus procurement cost of $71,800,000 (i.e., $98,125,000 − $71,800,000 = $26,325,000).
The distribution-system upgrade cost of $12,300,000 represents utility-side improvements to Prairie Shore's distribution infrastructure that are necessary to accommodate the combined 45 MW of new electrical load at the three depot locations. This cost estimate was developed by Creston Engineering Group, Inc. ("Creston"), MTDC's retained engineering firm, in consultation with Prairie Shore's engineering staff. Importantly, the $12,300,000 in distribution-system upgrade costs is not included within the $98,125,000 total project cost funded by the FTA Grant and local match. Rather, these utility-side costs are to be allocated between MTDC and Prairie Shore under the terms of the proposed Infrastructure Cost-Sharing Agreement, as described in Section VI of this Petition.
D. Depot Locations and Charging Capacity Requirements
Phase 1 of the fleet electrification program will install new high-capacity charging infrastructure at three existing MTDC bus depots located within the City of Chicago and its immediate environs. Each of these depots currently serves as an overnight parking, maintenance, and dispatch facility for a segment of MTDC's bus fleet and is situated within Prairie Shore's certificated service territory. The three depot locations, their proposed new electrical loads, and their respective bus allocations are set forth below.
1. North Garage — 4501 West Lawrence Avenue, Chicago, Illinois 60630
The North Garage is MTDC's largest bus depot, located in the Albany Park neighborhood on the northwest side of Chicago. The facility currently houses and dispatches approximately 480 buses serving routes on the north and northwest sides of the metropolitan area. Under Phase 1, the North Garage will receive depot charging infrastructure designed to support approximately 90 battery-electric buses, representing approximately 40% of the 225 buses to be procured under Phase 1. The North Garage's proportional allocation of battery-electric buses reflects its status as MTDC's highest-ridership depot and its strategic location along routes identified by MTDC's Sustainability Plan as priority corridors for electrification.
The proposed new electrical load at the North Garage is approximately 18 MW. This load is calculated based on the aggregate power demand of the charging equipment to be installed, including high-power DC fast chargers rated at 150 kW each for rapid opportunity charging and Level 2 chargers rated at 19.2 kW each for overnight depot charging, accounting for managed charging protocols and diversity factors.
2. West Garage — 1200 South Cicero Avenue, Chicago, Illinois 60804
The West Garage is located in the Cicero area on the west side of the metropolitan region. The facility currently houses and dispatches approximately 420 buses serving routes on the west and southwest sides of the metropolitan area. Under Phase 1, the West Garage will receive depot charging infrastructure designed to support approximately 75 battery-electric buses, representing approximately 33.3% of the 225 buses to be procured under Phase 1. The allocation of buses to the West Garage reflects the facility's capacity and its service territory's alignment with Phase 1 electrification priorities.
The proposed new electrical load at the West Garage is approximately 15 MW, calculated on the same basis as the North Garage load, adjusted for the smaller number of buses to be assigned to this location and the corresponding reduction in the number and capacity of charging units to be installed.
3. South Garage — 7800 South Vincennes Avenue, Chicago, Illinois 60620
The South Garage is located in the Chatham neighborhood on the south side of Chicago. The facility currently houses and dispatches approximately 310 buses serving routes on the south side and portions of the south suburbs. Under Phase 1, the South Garage will receive depot charging infrastructure designed to support approximately 60 battery-electric buses, representing approximately 26.7% of the 225 buses to be procured under Phase 1. The allocation to the South Garage is proportional to the facility's existing fleet size and operational capacity.
The proposed new electrical load at the South Garage is approximately 12 MW.
Summary of Depot Allocations and Electrical Loads:
Each depot will be equipped with a combination of high-power DC fast chargers and overnight Level 2 chargers, designed to support MTDC's daily revenue service requirements. The charging infrastructure at each depot will be managed by an intelligent power management system capable of optimizing charging schedules to minimize peak demand, maximize the utilization of off-peak electricity rates, and ensure that all buses assigned to the depot are fully charged and ready for dispatch at the start of each service day. The charging systems will also be equipped with communication interfaces to support demand response protocols and load curtailment during grid emergencies, as discussed further in Section VII of this Petition.
E. Estimated Energy Consumption and Cost
Based on the engineering analysis conducted by Creston Engineering Group, Inc., and the financial modeling performed by Dralvecen Reade & Co., the estimated annual energy consumption for the 225 battery-electric buses to be deployed under Phase 1 is approximately 39,420 megawatt-hours per year (39,420 MWh/yr), equivalent to 39,420,000 kilowatt-hours per year (39,420,000 kWh/yr).
This estimate is based on the following assumptions and parameters:
• Average daily mileage per bus: approximately 150 miles
• Average energy consumption per mile: approximately 2.1 kWh per mile
• Average annual revenue service days per bus: approximately 312 days
• Charging efficiency factor (accounting for losses in the charging system): approximately 90%
• Fleet-wide annual energy consumption: 225 buses × 150 miles/day × 312 days/year × 2.1 kWh/mile ÷ 0.90 = approximately 39,420,000 kWh/yr
At the proposed blended rate of $0.062 per kWh under proposed Schedule EV-T, the estimated annual energy cost to MTDC for depot charging of the 225 battery-electric buses is approximately Two Million Four Hundred Forty-Four Thousand Forty Dollars ($2,444,040) per year, calculated as follows:
39,420,000 kWh/yr × $0.062/kWh = $2,444,040/yr
This annual energy cost compares favorably to MTDC's current annual fuel cost for 225 diesel and CNG buses, which is estimated at approximately $4,200,000 per year based on current fuel prices and consumption rates, representing an estimated annual fuel cost savings of approximately $1,755,960, or approximately 41.8%. These cost savings, combined with the expected reduction in maintenance costs associated with battery-electric powertrains, support the economic viability and public interest benefits of the Phase 1 electrification project.
V. ENGINEERING AND INTERCONNECTION ANALYSIS
A. Creston Engineering Group Interconnection Study
MTDC retained the services of Creston Engineering Group, Inc. ("Creston"), an engineering consulting firm specializing in electric utility infrastructure, grid interconnection, and electric vehicle charging systems, to conduct comprehensive grid-interconnection studies and to design the depot charging infrastructure for Phase 1 of the fleet electrification program. Creston's principal offices are located at 8700 Bryn Mawr Avenue, Suite 600, Rosemont, Illinois 60018 (EIN: 36-7892104). The project was directed by Martin J. Sadowski, P.E., a licensed Professional Engineer in the State of Illinois and Creston's Senior Vice President of Infrastructure Engineering.
Creston's scope of work included the following principal tasks:
(a) Assessment of the capacity of Prairie Shore's existing distribution infrastructure at each of the three MTDC depot locations, including substations, distribution feeders, transformers, switchgear, and protective relay systems;
(b) Identification and engineering design of the distribution-system upgrades necessary to accommodate the combined 45 MW of new electrical load from the depot charging infrastructure at all three locations;
(c) Development of cost estimates for all required distribution-system upgrades;
(d) Design of the customer-side depot charging infrastructure, including charger selection and sizing, power management systems, electrical distribution within each depot, and metering configurations;
(e) Analysis of power quality impacts, including voltage regulation, harmonic distortion, and power factor considerations associated with the proposed charging load; and
(f) Assessment of the timeline for completing all required upgrades and installations in coordination with MTDC's Phase 1 deployment schedule.
Creston conducted its interconnection study over a period of approximately five months, from August 2022 through December 2022, in close coordination with Prairie Shore's engineering and planning staff. The study involved detailed field inspections of each depot location and the associated Prairie Shore distribution infrastructure, review of Prairie Shore's distribution system planning data and load forecasts, and extensive power-flow modeling and simulation using industry-standard analytical tools.
Creston's principal findings are as follows:
(i) The existing distribution feeders, substations, and transformers serving each of the three MTDC depot locations lack sufficient capacity to accommodate the proposed new electrical loads without upgrades. The existing infrastructure at these locations was designed to serve the historical load profiles of the depot facilities, which consist primarily of lighting, HVAC, maintenance shop equipment, and ancillary building loads totaling approximately 2 to 4 MW per depot. The proposed addition of 12 to 18 MW of new charging load at each location represents a substantial increase that exceeds the available capacity of the existing infrastructure.
(ii) The required distribution-system upgrades, encompassing transformer replacements, feeder reinforcements, switchgear installations, protective relay upgrades, and advanced metering equipment at each of the three depot locations, are technically feasible and can be designed and constructed within a timeline consistent with MTDC's Phase 1 deployment schedule.
(iii) The estimated total cost of the required distribution-system upgrades across all three depot locations is Twelve Million Three Hundred Thousand Dollars ($12,300,000).
(iv) The proposed charging infrastructure, when operated in conjunction with intelligent power management systems, will not cause adverse power quality impacts on Prairie Shore's distribution system, provided that the recommended upgrades are implemented as specified.
Creston's complete Interconnection Study and Charging Infrastructure Design Report is attached to this Verified Petition as Exhibit A.
B. Distribution-System Upgrade Requirements
The distribution-system upgrades required at each of the three MTDC depot locations, as identified and designed by Creston, are summarized below.
1. North Garage — 4501 West Lawrence Avenue, Chicago, Illinois 60630 (18 MW New Load)
The North Garage is currently served by a single Prairie Shore distribution feeder originating from the Montrose Substation, which is a 138 kV/12.47 kV facility located approximately 1.8 miles from the depot. To accommodate the proposed 18 MW of new charging load, the following distribution-system upgrades are required:
• Installation of a new dedicated 138 kV/12.47 kV substation transformer rated at 25 MVA, with associated high-side disconnect switches and protective relaying, to supplement the existing Montrose Substation capacity;
• Construction of a new 12.47 kV underground distribution feeder from the Montrose Substation to the North Garage, approximately 1.8 miles in length, utilizing 750 kcmil aluminum conductor in duct bank;
• Installation of a new pad-mounted 12.47 kV/480 V transformer bank at the depot site, rated at 20 MVA, with associated switchgear, bus work, and protective devices;
• Installation of revenue-grade advanced interval metering equipment capable of recording demand data in 15-minute intervals and supporting real-time communication with Prairie Shore's meter data management system;
• Upgrades to the existing feeder protective relay scheme to coordinate with the new feeder and transformer installations.
The estimated cost of the distribution-system upgrades at the North Garage is approximately $5,400,000.
2. West Garage — 1200 South Cicero Avenue, Chicago, Illinois 60804 (15 MW New Load)
The West Garage is currently served by a Prairie Shore distribution feeder originating from the Cicero Avenue Substation, a 69 kV/12.47 kV facility located approximately 0.9 miles from the depot. To accommodate the proposed 15 MW of new charging load, the following distribution-system upgrades are required:
• Upgrade of the existing Cicero Avenue Substation transformer from its current 20 MVA rating to a new 30 MVA unit, including replacement of associated high-side protective devices;
• Reinforcement of the existing 12.47 kV distribution feeder serving the West Garage with a parallel feeder circuit, approximately 0.9 miles in length, to increase the aggregate feeder capacity and improve supply reliability;
• Installation of a new pad-mounted 12.47 kV/480 V transformer bank at the depot site, rated at 17.5 MVA, with associated switchgear and protective devices;
• Installation of revenue-grade advanced interval metering equipment;
• Reconfiguration of the existing distribution switching and sectionalizing scheme to integrate the new feeder and transformer installations.
The estimated cost of the distribution-system upgrades at the West Garage is approximately $4,200,000.
3. South Garage — 7800 South Vincennes Avenue, Chicago, Illinois 60620 (12 MW New Load)
The South Garage is currently served by a Prairie Shore distribution feeder originating from the Vincennes Substation, a 69 kV/12.47 kV facility located approximately 1.2 miles from the depot. To accommodate the proposed 12 MW of new charging load, the following distribution-system upgrades are required:
• Installation of a second 69 kV/12.47 kV transformer at the Vincennes Substation, rated at 15 MVA, to supplement the existing substation capacity and provide redundancy;
• Reinforcement of the existing distribution feeder serving the South Garage with upgraded conductor and additional switching equipment;
• Installation of a new pad-mounted 12.47 kV/480 V transformer bank at the depot site, rated at 15 MVA, with associated switchgear and protective devices;
• Installation of revenue-grade advanced interval metering equipment;
• Installation of power factor correction capacitor banks at the depot service entrance to maintain compliance with Prairie Shore's power factor requirements.
The estimated cost of the distribution-system upgrades at the South Garage is approximately $2,700,000.
Summary of Distribution-System Upgrade Costs:
Creston's study confirms that all distribution-system upgrades can be designed, permitted, and constructed within a timeline of approximately twelve to fifteen months from the date of Commission approval, which is consistent with MTDC's Phase 1 deployment schedule and the FTA Grant milestone requirements.
VI. PROPOSED INFRASTRUCTURE COST-SHARING AGREEMENT
MTDC and Prairie Shore have engaged in extensive negotiations over a period of approximately four months, from October 2022 through January 2023, and have reached agreement in principle on the terms of a proposed Infrastructure Cost-Sharing Agreement (the "Cost-Sharing Agreement") to govern the allocation of the $12,300,000 in distribution-system upgrade costs identified in Creston's Interconnection Study. A draft of the Cost-Sharing Agreement is attached to this Verified Petition as Exhibit B.
Proposed Cost Allocation. The parties have agreed to the following allocation of the $12,300,000 in distribution-system upgrade costs:
Rationale for the 60/40 Split. The proposed 60/40 cost allocation reflects the relative benefits that each party will derive from the distribution-system upgrades. MTDC, as the customer requesting the new service connections, is the primary and immediate beneficiary of the new load capacity created by the upgrades, without which MTDC would be unable to interconnect its depot charging infrastructure and operate its battery-electric bus fleet. Accordingly, it is appropriate for MTDC to bear the majority share of the upgrade costs.
At the same time, Prairie Shore will derive significant benefits from the distribution-system improvements beyond the service of MTDC's charging load. The upgraded substations, feeders, and transformers will enhance the overall reliability and capacity of Prairie Shore's distribution system in the areas surrounding the three depot locations, providing headroom for future load growth from other customers—including residential, commercial, and industrial customers—as well as improved system performance during peak demand periods. These system-wide benefits justify Prairie Shore's assumption of a meaningful share of the upgrade costs. The 60/40 allocation is consistent with cost-sharing arrangements approved by this Commission in analogous proceedings involving large new service connections and distribution-system upgrades, including, by way of example, the cost-sharing framework approved in Docket No. 19-0847 (ComEd/Illinois Department of Transportation interconnection proceeding) and the principles articulated in the Commission's Policy Statement on Electric Vehicle Charging Infrastructure Costs, issued October 15, 2021.
Key Terms of the Proposed Cost-Sharing Agreement. The principal terms and conditions of the draft Cost-Sharing Agreement, as set forth in Exhibit B, include the following:
(a) Scope of Upgrades. The Cost-Sharing Agreement identifies the specific distribution-system upgrades to be performed at each of the three depot locations, as described in Section V.B of this Petition and as detailed in Creston's Interconnection Study (Exhibit A). The scope of work is defined by reference to Creston's engineering specifications and design documents, which are incorporated by reference into the Cost-Sharing Agreement.
(b) Construction Responsibilities. Prairie Shore will be responsible for the design, procurement, and construction of all distribution-system upgrades on the utility side of the service delivery point at each depot location. MTDC will provide coordination, site access, and reasonable cooperation to facilitate Prairie Shore's construction activities. MTDC will be responsible for the design, procurement, and construction of all customer-side charging infrastructure on the customer side of the service delivery point at each depot.
(c) Payment Schedule. MTDC's $7,380,000 share of the distribution-system upgrade costs will be paid to Prairie Shore in installments tied to the achievement of construction milestones, as follows: (i) 25% ($1,845,000) upon execution of the Cost-Sharing Agreement and issuance of Commission approval; (ii) 25% ($1,845,000) upon completion of engineering design and procurement of major equipment; (iii) 25% ($1,845,000) upon completion of 50% of construction at each depot location; and (iv) 25% ($1,845,000) upon completion of construction and commissioning of all upgrades.
(d) Conditions Precedent. The obligations of both parties under the Cost-Sharing Agreement are subject to the following conditions precedent: (i) issuance of a final order by the Illinois Commerce Commission in this Docket (No. 23-0214) approving the Cost-Sharing Agreement; and (ii) continued availability of FTA Grant IL-2023-0067-00, including the absence of any revocation, suspension, or material reduction of grant funds by the FTA.
(e) Representations and Warranties. Each party makes customary representations and warranties regarding its corporate authority to enter into the Agreement, the absence of conflicts with existing obligations, and compliance with applicable laws and regulations.
(f) Indemnification. Each party agrees to indemnify, defend, and hold harmless the other party from and against claims, losses, damages, and expenses arising from the indemnifying party's negligent acts or omissions in connection with the construction and installation of the distribution-system upgrades, subject to customary limitations and exclusions.
(g) Termination Provisions. The Cost-Sharing Agreement includes termination provisions that address, among other things, termination for loss of federal funding (i.e., in the event that FTA Grant IL-2023-0067-00 is revoked, suspended, or materially reduced), termination for material breach by either party, and termination for force majeure events. In the event of termination prior to completion of construction, the Agreement specifies the allocation of costs incurred through the date of termination and the disposition of partially completed infrastructure.
The Cost-Sharing Agreement requires Commission approval as it involves cost allocation between a regulated electric utility and a customer for utility infrastructure improvements that will become part of Prairie Shore's distribution system. MTDC respectfully submits that the proposed allocation is fair, reasonable, and in the public interest, and requests that the Commission approve the Cost-Sharing Agreement as submitted.
VII. PROPOSED SCHEDULE EV-T — POWER-PURCHASE RATE ARRANGEMENT
A. Need for a New Tariff Rate Schedule
Prairie Shore does not currently offer a tariff rate schedule designed for high-capacity transit electrification loads of the type and magnitude proposed by MTDC. Prairie Shore's existing commercial and industrial rate schedules, including its General Service — Large Load (Schedule GL) and its High-Voltage Service (Schedule HV), were designed to serve the load profiles of conventional commercial and industrial customers and do not adequately address the unique characteristics of depot bus charging operations.
The load profile of depot bus charging differs materially from typical commercial and industrial loads in several respects. First, depot charging is characterized by a significant overnight baseload component, as the majority of bus charging occurs during the late evening and overnight hours when buses return from revenue service and must be fully charged by the start of the next morning's service dispatch. Second, depot charging involves substantial demand management opportunities, as the charging schedule for a large fleet of battery-electric buses can be managed through intelligent power management systems to shift load from on-peak to off-peak periods and to respond to grid conditions. Third, the aggregate magnitude of the proposed load—45 MW across three locations—is comparable to the load of a large industrial facility and warrants a rate structure that recognizes the economic and operational characteristics unique to this application.
The existing commercial and industrial rate schedules, with their standard demand charge structures and uniform energy rates, would result in significantly higher energy costs for MTDC than are warranted by the actual cost of serving the proposed load profile, and would fail to capture the mutual benefits that can be achieved through time-of-use pricing that incentivizes off-peak charging. Accordingly, MTDC and Prairie Shore have collaboratively developed proposed Schedule EV-T (Electric Vehicle — Transit), a new time-of-use rate schedule tailored to the specific requirements of transit depot charging, for submission by Prairie Shore to the Commission for approval.
B. Key Terms of Proposed Schedule EV-T
The principal terms and conditions of proposed Schedule EV-T, as set forth in the Draft Term Sheet attached as Exhibit D, are summarized below:
Applicability. Schedule EV-T will apply exclusively to electric service provided by Prairie Shore to MTDC depot charging facilities at the three locations identified in this Petition: North Garage (4501 West Lawrence Avenue, Chicago, IL 60630), West Garage (1200 South Cicero Avenue, Chicago, IL 60804), and South Garage (7800 South Vincennes Avenue, Chicago, IL 60620). The schedule may be extended to additional MTDC depot locations in subsequent phases of the electrification program, subject to Commission approval.
Proposed Blended Rate. The proposed blended rate under Schedule EV-T is $0.062 per kWh. This blended rate is the weighted average of the on-peak and off-peak energy charges, taking into account the expected proportion of on-peak and off-peak energy consumption based on MTDC's anticipated charging schedule and the demand charge component amortized across total consumption.
Rate Structure. Schedule EV-T employs a time-of-use rate structure with the following components:
(i) Off-Peak Energy Charge: A per-kWh energy charge applicable to electricity consumed during off-peak hours, defined as 10:00 PM through 6:00 AM, Monday through Friday, and all hours on weekends and Commission-designated holidays. The off-peak energy charge is set at a level below the blended rate to incentivize overnight depot charging.
(ii) On-Peak Energy Charge: A per-kWh energy charge applicable to electricity consumed during on-peak hours, defined as 6:00 AM through 10:00 PM, Monday through Friday, excluding Commission-designated holidays. The on-peak energy charge is set at a level above the blended rate to reflect the higher cost of peak-period generation and delivery.
(iii) Demand Charge: A per-kW demand charge applied to the customer's highest measured demand during on-peak hours in each billing period. The demand charge is designed to recover the fixed costs of distribution infrastructure allocated to serve the customer's peak demand. The demand charge structure under Schedule EV-T reflects the economies of scale associated with the large aggregate load and the managed charging protocols that will limit MTDC's peak demand exposure.
Minimum Contract Term. The minimum contract term under Schedule EV-T will be fifteen (15) years, consistent with the expected useful life of the depot charging infrastructure and the performance period of the FTA Grant. The long-term commitment provides rate stability and revenue certainty for both MTDC and Prairie Shore, supports Prairie Shore's recovery of its share of the distribution-system upgrade costs, and aligns with the terms and conditions of the FTA Grant.
Metering Requirements. Each depot location will be equipped with revenue-grade advanced interval metering capable of recording energy consumption and demand data in 15-minute intervals. Meter data will be communicated in real time to Prairie Shore's meter data management system and will be accessible to MTDC through a secure web-based portal for purposes of load monitoring, billing verification, and charging optimization.
Load Management Provisions. Schedule EV-T includes provisions for demand response and load curtailment during grid emergencies. MTDC agrees to participate in Prairie Shore's demand response programs to the extent feasible, consistent with MTDC's obligation to maintain its transit service schedules. Specifically, MTDC's intelligent power management systems will be capable of reducing charging load at each depot by up to twenty percent (20%) within fifteen (15) minutes of receipt of a demand response signal from Prairie Shore, provided that such curtailment does not jeopardize the availability of fully charged buses for the next scheduled revenue service dispatch.
Conditions. Schedule EV-T requires Commission approval as a new tariff filing by Prairie Shore. The schedule will become effective upon the date specified in the Commission's order approving Prairie Shore's tariff filing, or thirty (30) days after filing if the Commission does not suspend or reject the filing within that period, in accordance with Section 9-201 of the PUA.
C. Rate-Impact Analysis
MTDC retained the services of Dralvecen Reade & Co. ("Dralvecen Reade"), a financial advisory firm specializing in energy and infrastructure finance, to perform a comprehensive rate-impact analysis and grant compliance modeling for the proposed Schedule EV-T rate arrangement. Dralvecen Reade's offices are located at 311 South Wacker Drive, Suite 4500, Chicago, Illinois 60606 (EIN: 36-6543298). The engagement partner for this assignment is Lisa M. Quayle, CFA, a Chartered Financial Analyst with over twenty years of experience in utility rate analysis and public finance.
Dralvecen Reade's analysis encompassed the following principal components:
(a) A cost-of-service analysis evaluating whether the proposed $0.062 per kWh blended rate under Schedule EV-T is consistent with Prairie Shore's cost of providing electric service to the proposed MTDC depot charging load, taking into account the incremental generation, transmission, and distribution costs associated with the load profile, as well as the distribution-system upgrade costs allocated to Prairie Shore under the proposed Cost-Sharing Agreement;
(b) A rate-impact analysis assessing the effect of the proposed Schedule EV-T on Prairie Shore's other customers, to ensure that the proposed rate does not result in undue cross-subsidization or shifting of costs to residential, commercial, or industrial ratepayers;
(c) A grant compliance analysis confirming that the proposed rate arrangement is consistent with the terms and conditions of FTA Grant IL-2023-0067-00, including the FTA's requirements regarding the use of grant funds and the reasonableness of operating costs charged to the grant; and
(d) A lifecycle cost-benefit analysis comparing the total cost of ownership of battery-electric buses under the proposed rate arrangement to the total cost of ownership of diesel and CNG buses, including fuel, maintenance, and capital costs over a fifteen-year horizon.
Dralvecen Reade's principal findings are as follows:
(i) The proposed $0.062 per kWh blended rate under Schedule EV-T is consistent with Prairie Shore's marginal cost of service for the proposed MTDC depot charging load profile, taking into account the time-of-use distribution of energy consumption, the managed charging protocols that will limit peak demand exposure, and the distribution-system upgrade costs allocated to Prairie Shore under the Cost-Sharing Agreement. The proposed rate provides Prairie Shore with a reasonable contribution to its fixed costs and a fair return on the distribution infrastructure investment.
(ii) The proposed rate arrangement does not result in undue cross-subsidization of MTDC's electric service by other Prairie Shore ratepayers. The MTDC charging load will generate incremental revenue to Prairie Shore in excess of the incremental costs of serving the load, resulting in a net positive contribution to Prairie Shore's system-wide cost recovery.
(iii) The proposed rate arrangement is consistent with the terms and conditions of FTA Grant IL-2023-0067-00, including the FTA's requirements for cost reasonableness and compliance with applicable state regulatory requirements.
(iv) The annual estimated energy cost to MTDC under the proposed rate arrangement is approximately $2,444,040 per year, based on estimated annual energy consumption of 39,420,000 kWh at the blended rate of $0.062 per kWh.
Dralvecen Reade's complete Rate-Impact Analysis and Grant Compliance Modeling Report is attached to this Verified Petition as Exhibit C. The Draft Term Sheet for proposed Schedule EV-T is attached as Exhibit D.
VIII. FINANCIAL CAPACITY AND GRANT COMPLIANCE
A. MTDC's Financial Capacity
MTDC possesses the financial capacity to fund its obligations under the Phase 1 electrification project, including both its $19,625,000 local match for the FTA Grant and its $7,380,000 share of the distribution-system upgrade costs under the proposed Cost-Sharing Agreement, for a combined MTDC financial commitment of $27,005,000.
MTDC's Fiscal Year 2023 annual operating budget is approximately $1,420,000,000, and its capital budget includes dedicated appropriations for fleet modernization and sustainability initiatives. MTDC's combined MTDC financial commitment of $27,005,000 for Phase 1 represents approximately 1.9% of MTDC's annual operating budget and is well within the range of capital project expenditures routinely undertaken by MTDC in the ordinary course of its transit operations.
MTDC's audited financial statements for Fiscal Years 2020, 2021, and 2022, prepared by the independent certified public accounting firm of Fielding & Calloway CPAs, LLC (155 North Wacker Drive, Suite 1800, Chicago, Illinois 60606; engagement partner Douglas H. Fielding, CPA), demonstrate MTDC's strong financial position, including adequate reserves, manageable debt levels, and a consistent track record of sound fiscal management. MTDC's most recent audited financial statements are available for review by the Commission and Commission Staff upon request.
MTDC has identified the following funding sources for its combined $27,005,000 Phase 1 financial commitment:
(a) Capital Budget Allocations. MTDC's Board of Directors has approved capital budget allocations for fleet electrification and sustainability initiatives totaling $15,000,000 over the Fiscal Year 2023 and 2024 budget cycles.
(b) Existing Reserves. MTDC maintains capital reserves that may be applied to the local match and cost-sharing obligations, subject to Board approval.
(c) Municipal Revenue Bonds. MTDC has the statutory authority under the Metropolitan Transit Development Act to issue revenue bonds to finance capital improvements. MTDC may issue revenue bonds to fund a portion of its Phase 1 financial commitment, subject to market conditions and Board authorization.
MTDC's Chief Financial Officer, Sandra R. Pellegrino, will be available to provide testimony and documentation regarding MTDC's financial capacity in connection with this proceeding, if requested by the Commission or Commission Staff.
B. FTA Grant Compliance