SB1529 EngrossedLRB101 08496 JRG 53573 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Power Agency Act is amended by
5changing Section 1-75 as follows:
 
6    (20 ILCS 3855/1-75)
7    Sec. 1-75. Planning and Procurement Bureau. The Planning
8and Procurement Bureau has the following duties and
9responsibilities:
10    (a) The Planning and Procurement Bureau shall each year,
11beginning in 2008, develop procurement plans and conduct
12competitive procurement processes in accordance with the
13requirements of Section 16-111.5 of the Public Utilities Act
14for the eligible retail customers of electric utilities that on
15December 31, 2005 provided electric service to at least 100,000
16customers in Illinois. Beginning with the delivery year
17commencing on June 1, 2017, the Planning and Procurement Bureau
18shall develop plans and processes for the procurement of zero
19emission credits from zero emission facilities in accordance
20with the requirements of subsection (d-5) of this Section. The
21Planning and Procurement Bureau shall also develop procurement
22plans and conduct competitive procurement processes in
23accordance with the requirements of Section 16-111.5 of the

 

 

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1Public Utilities Act for the eligible retail customers of small
2multi-jurisdictional electric utilities that (i) on December
331, 2005 served less than 100,000 customers in Illinois and
4(ii) request a procurement plan for their Illinois
5jurisdictional load. This Section shall not apply to a small
6multi-jurisdictional utility until such time as a small
7multi-jurisdictional utility requests the Agency to prepare a
8procurement plan for their Illinois jurisdictional load. For
9the purposes of this Section, the term "eligible retail
10customers" has the same definition as found in Section
1116-111.5(a) of the Public Utilities Act.
12    Beginning with the plan or plans to be implemented in the
132017 delivery year, the Agency shall no longer include the
14procurement of renewable energy resources in the annual
15procurement plans required by this subsection (a), except as
16provided in subsection (q) of Section 16-111.5 of the Public
17Utilities Act, and shall instead develop a long-term renewable
18resources procurement plan in accordance with subsection (c) of
19this Section and Section 16-111.5 of the Public Utilities Act.
20        (1) The Agency shall each year, beginning in 2008, as
21    needed, issue a request for qualifications for experts or
22    expert consulting firms to develop the procurement plans in
23    accordance with Section 16-111.5 of the Public Utilities
24    Act. In order to qualify an expert or expert consulting
25    firm must have:
26            (A) direct previous experience assembling

 

 

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1        large-scale power supply plans or portfolios for
2        end-use customers;
3            (B) an advanced degree in economics, mathematics,
4        engineering, risk management, or a related area of
5        study;
6            (C) 10 years of experience in the electricity
7        sector, including managing supply risk;
8            (D) expertise in wholesale electricity market
9        rules, including those established by the Federal
10        Energy Regulatory Commission and regional transmission
11        organizations;
12            (E) expertise in credit protocols and familiarity
13        with contract protocols;
14            (F) adequate resources to perform and fulfill the
15        required functions and responsibilities; and
16            (G) the absence of a conflict of interest and
17        inappropriate bias for or against potential bidders or
18        the affected electric utilities.
19        (2) The Agency shall each year, as needed, issue a
20    request for qualifications for a procurement administrator
21    to conduct the competitive procurement processes in
22    accordance with Section 16-111.5 of the Public Utilities
23    Act. In order to qualify an expert or expert consulting
24    firm must have:
25            (A) direct previous experience administering a
26        large-scale competitive procurement process;

 

 

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1            (B) an advanced degree in economics, mathematics,
2        engineering, or a related area of study;
3            (C) 10 years of experience in the electricity
4        sector, including risk management experience;
5            (D) expertise in wholesale electricity market
6        rules, including those established by the Federal
7        Energy Regulatory Commission and regional transmission
8        organizations;
9            (E) expertise in credit and contract protocols;
10            (F) adequate resources to perform and fulfill the
11        required functions and responsibilities; and
12            (G) the absence of a conflict of interest and
13        inappropriate bias for or against potential bidders or
14        the affected electric utilities.
15        (3) The Agency shall provide affected utilities and
16    other interested parties with the lists of qualified
17    experts or expert consulting firms identified through the
18    request for qualifications processes that are under
19    consideration to develop the procurement plans and to serve
20    as the procurement administrator. The Agency shall also
21    provide each qualified expert's or expert consulting
22    firm's response to the request for qualifications. All
23    information provided under this subparagraph shall also be
24    provided to the Commission. The Agency may provide by rule
25    for fees associated with supplying the information to
26    utilities and other interested parties. These parties

 

 

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1    shall, within 5 business days, notify the Agency in writing
2    if they object to any experts or expert consulting firms on
3    the lists. Objections shall be based on:
4            (A) failure to satisfy qualification criteria;
5            (B) identification of a conflict of interest; or
6            (C) evidence of inappropriate bias for or against
7        potential bidders or the affected utilities.
8        The Agency shall remove experts or expert consulting
9    firms from the lists within 10 days if there is a
10    reasonable basis for an objection and provide the updated
11    lists to the affected utilities and other interested
12    parties. If the Agency fails to remove an expert or expert
13    consulting firm from a list, an objecting party may seek
14    review by the Commission within 5 days thereafter by filing
15    a petition, and the Commission shall render a ruling on the
16    petition within 10 days. There is no right of appeal of the
17    Commission's ruling.
18        (4) The Agency shall issue requests for proposals to
19    the qualified experts or expert consulting firms to develop
20    a procurement plan for the affected utilities and to serve
21    as procurement administrator.
22        (5) The Agency shall select an expert or expert
23    consulting firm to develop procurement plans based on the
24    proposals submitted and shall award contracts of up to 5
25    years to those selected.
26        (6) The Agency shall select an expert or expert

 

 

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1    consulting firm, with approval of the Commission, to serve
2    as procurement administrator based on the proposals
3    submitted. If the Commission rejects, within 5 days, the
4    Agency's selection, the Agency shall submit another
5    recommendation within 3 days based on the proposals
6    submitted. The Agency shall award a 5-year contract to the
7    expert or expert consulting firm so selected with
8    Commission approval.
9    (b) The experts or expert consulting firms retained by the
10Agency shall, as appropriate, prepare procurement plans, and
11conduct a competitive procurement process as prescribed in
12Section 16-111.5 of the Public Utilities Act, to ensure
13adequate, reliable, affordable, efficient, and environmentally
14sustainable electric service at the lowest total cost over
15time, taking into account any benefits of price stability, for
16eligible retail customers of electric utilities that on
17December 31, 2005 provided electric service to at least 100,000
18customers in the State of Illinois, and for eligible Illinois
19retail customers of small multi-jurisdictional electric
20utilities that (i) on December 31, 2005 served less than
21100,000 customers in Illinois and (ii) request a procurement
22plan for their Illinois jurisdictional load.
23    (c) Renewable portfolio standard.
24        (1)(A) The Agency shall develop a long-term renewable
25    resources procurement plan that shall include procurement
26    programs and competitive procurement events necessary to

 

 

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1    meet the goals set forth in this subsection (c). The
2    initial long-term renewable resources procurement plan
3    shall be released for comment no later than 160 days after
4    June 1, 2017 (the effective date of Public Act 99-906). The
5    Agency shall review, and may revise on an expedited basis,
6    the long-term renewable resources procurement plan at
7    least every 2 years, which shall be conducted in
8    conjunction with the procurement plan under Section
9    16-111.5 of the Public Utilities Act to the extent
10    practicable to minimize administrative expense. The
11    long-term renewable resources procurement plans shall be
12    subject to review and approval by the Commission under
13    Section 16-111.5 of the Public Utilities Act.
14        (B) Subject to subparagraph (F) of this paragraph (1),
15    the long-term renewable resources procurement plan shall
16    include the goals for procurement of renewable energy
17    credits to meet at least the following overall percentages:
18    13% by the 2017 delivery year; increasing by at least 1.5%
19    each delivery year thereafter to at least 25% by the 2025
20    delivery year; and continuing at no less than 25% for each
21    delivery year thereafter. In the event of a conflict
22    between these goals and the new wind and new photovoltaic
23    procurement requirements described in items (i) through
24    (iii) of subparagraph (C) of this paragraph (1), the
25    long-term plan shall prioritize compliance with the new
26    wind and new photovoltaic procurement requirements

 

 

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1    described in items (i) through (iii) of subparagraph (C) of
2    this paragraph (1) over the annual percentage targets
3    described in this subparagraph (B).
4        For the delivery year beginning June 1, 2017, the
5    procurement plan shall include cost-effective renewable
6    energy resources equal to at least 13% of each utility's
7    load for eligible retail customers and 13% of the
8    applicable portion of each utility's load for retail
9    customers who are not eligible retail customers, which
10    applicable portion shall equal 50% of the utility's load
11    for retail customers who are not eligible retail customers
12    on February 28, 2017.
13        For the delivery year beginning June 1, 2018, the
14    procurement plan shall include cost-effective renewable
15    energy resources equal to at least 14.5% of each utility's
16    load for eligible retail customers and 14.5% of the
17    applicable portion of each utility's load for retail
18    customers who are not eligible retail customers, which
19    applicable portion shall equal 75% of the utility's load
20    for retail customers who are not eligible retail customers
21    on February 28, 2017.
22        For the delivery year beginning June 1, 2019, and for
23    each year thereafter, the procurement plans shall include
24    cost-effective renewable energy resources equal to a
25    minimum percentage of each utility's load for all retail
26    customers as follows: 16% by June 1, 2019; increasing by

 

 

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1    1.5% each year thereafter to 25% by June 1, 2025; and 25%
2    by June 1, 2026 and each year thereafter.
3        For each delivery year, the Agency shall first
4    recognize each utility's obligations for that delivery
5    year under existing contracts. Any renewable energy
6    credits under existing contracts, including renewable
7    energy credits as part of renewable energy resources, shall
8    be used to meet the goals set forth in this subsection (c)
9    for the delivery year.
10        (C) Of the renewable energy credits procured under this
11    subsection (c), at least 75% shall come from wind and
12    photovoltaic projects. The long-term renewable resources
13    procurement plan described in subparagraph (A) of this
14    paragraph (1) shall include the procurement of renewable
15    energy credits in amounts equal to at least the following:
16            (i) By the end of the 2020 delivery year:
17                At least 2,000,000 renewable energy credits
18            for each delivery year shall come from new wind
19            projects; and
20                At least 2,000,000 renewable energy credits
21            for each delivery year shall come from new
22            photovoltaic projects; of that amount, to the
23            extent possible, the Agency shall procure: at
24            least 50% from solar photovoltaic projects using
25            the program outlined in subparagraph (K) of this
26            paragraph (1) from distributed renewable energy

 

 

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1            generation devices or community renewable
2            generation projects; at least 40% from
3            utility-scale solar projects; at least 2% from
4            brownfield site photovoltaic projects that are not
5            community renewable generation projects; and the
6            remainder shall be determined through the
7            long-term planning process described in
8            subparagraph (A) of this paragraph (1).
9            (ii) By the end of the 2025 delivery year:
10                At least 3,000,000 renewable energy credits
11            for each delivery year shall come from new wind
12            projects; and
13                At least 3,000,000 renewable energy credits
14            for each delivery year shall come from new
15            photovoltaic projects; of that amount, to the
16            extent possible, the Agency shall procure: at
17            least 50% from solar photovoltaic projects using
18            the program outlined in subparagraph (K) of this
19            paragraph (1) from distributed renewable energy
20            devices or community renewable generation
21            projects; at least 40% from utility-scale solar
22            projects; at least 2% from brownfield site
23            photovoltaic projects that are not community
24            renewable generation projects; and the remainder
25            shall be determined through the long-term planning
26            process described in subparagraph (A) of this

 

 

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1            paragraph (1).
2            (iii) By the end of the 2030 delivery year:
3                At least 4,000,000 renewable energy credits
4            for each delivery year shall come from new wind
5            projects; and
6                At least 4,000,000 renewable energy credits
7            for each delivery year shall come from new
8            photovoltaic projects; of that amount, to the
9            extent possible, the Agency shall procure: at
10            least 50% from solar photovoltaic projects using
11            the program outlined in subparagraph (K) of this
12            paragraph (1) from distributed renewable energy
13            devices or community renewable generation
14            projects; at least 40% from utility-scale solar
15            projects; at least 2% from brownfield site
16            photovoltaic projects that are not community
17            renewable generation projects; and the remainder
18            shall be determined through the long-term planning
19            process described in subparagraph (A) of this
20            paragraph (1).
21            For purposes of this Section:
22                "New wind projects" means wind renewable
23            energy facilities that are energized after June 1,
24            2017 for the delivery year commencing June 1, 2017
25            or within 3 years after the date the Commission
26            approves contracts for subsequent delivery years.

 

 

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1                "New photovoltaic projects" means photovoltaic
2            renewable energy facilities that are energized
3            after June 1, 2017. Photovoltaic projects
4            developed under Section 1-56 of this Act shall not
5            apply towards the new photovoltaic project
6            requirements in this subparagraph (C).
7        (D) Renewable energy credits shall be cost effective.
8    For purposes of this subsection (c), "cost effective" means
9    that the costs of procuring renewable energy resources do
10    not cause the limit stated in subparagraph (E) of this
11    paragraph (1) to be exceeded and, for renewable energy
12    credits procured through a competitive procurement event,
13    do not exceed benchmarks based on market prices for like
14    products in the region. For purposes of this subsection
15    (c), "like products" means contracts for renewable energy
16    credits from the same or substantially similar technology,
17    same or substantially similar vintage (new or existing),
18    the same or substantially similar quantity, and the same or
19    substantially similar contract length and structure.
20    Benchmarks shall be developed by the procurement
21    administrator, in consultation with the Commission staff,
22    Agency staff, and the procurement monitor and shall be
23    subject to Commission review and approval. If price
24    benchmarks for like products in the region are not
25    available, the procurement administrator shall establish
26    price benchmarks based on publicly available data on

 

 

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1    regional technology costs and expected current and future
2    regional energy prices. The benchmarks in this Section
3    shall not be used to curtail or otherwise reduce
4    contractual obligations entered into by or through the
5    Agency prior to June 1, 2017 (the effective date of Public
6    Act 99-906).
7        (E) For purposes of this subsection (c), the required
8    procurement of cost-effective renewable energy resources
9    for a particular year commencing prior to June 1, 2017
10    shall be measured as a percentage of the actual amount of
11    electricity (megawatt-hours) supplied by the electric
12    utility to eligible retail customers in the delivery year
13    ending immediately prior to the procurement, and, for
14    delivery years commencing on and after June 1, 2017, the
15    required procurement of cost-effective renewable energy
16    resources for a particular year shall be measured as a
17    percentage of the actual amount of electricity
18    (megawatt-hours) delivered by the electric utility in the
19    delivery year ending immediately prior to the procurement,
20    to all retail customers in its service territory. For
21    purposes of this subsection (c), the amount paid per
22    kilowatthour means the total amount paid for electric
23    service expressed on a per kilowatthour basis. For purposes
24    of this subsection (c), the total amount paid for electric
25    service includes without limitation amounts paid for
26    supply, transmission, distribution, surcharges, and add-on

 

 

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1    taxes.
2        Notwithstanding the requirements of this subsection
3    (c), the total of renewable energy resources procured under
4    the procurement plan for any single year shall be subject
5    to the limitations of this subparagraph (E). Such
6    procurement shall be reduced for all retail customers based
7    on the amount necessary to limit the annual estimated
8    average net increase due to the costs of these resources
9    included in the amounts paid by eligible retail customers
10    in connection with electric service to no more than the
11    greater of 2.015% of the amount paid per kilowatthour by
12    those customers during the year ending May 31, 2007 or the
13    incremental amount per kilowatthour paid for these
14    resources in 2011. To arrive at a maximum dollar amount of
15    renewable energy resources to be procured for the
16    particular delivery year, the resulting per kilowatthour
17    amount shall be applied to the actual amount of
18    kilowatthours of electricity delivered, or applicable
19    portion of such amount as specified in paragraph (1) of
20    this subsection (c), as applicable, by the electric utility
21    in the delivery year immediately prior to the procurement
22    to all retail customers in its service territory. The
23    calculations required by this subparagraph (E) shall be
24    made only once for each delivery year at the time that the
25    renewable energy resources are procured. Once the
26    determination as to the amount of renewable energy

 

 

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1    resources to procure is made based on the calculations set
2    forth in this subparagraph (E) and the contracts procuring
3    those amounts are executed, no subsequent rate impact
4    determinations shall be made and no adjustments to those
5    contract amounts shall be allowed. All costs incurred under
6    such contracts shall be fully recoverable by the electric
7    utility as provided in this Section.
8        (F) If the limitation on the amount of renewable energy
9    resources procured in subparagraph (E) of this paragraph
10    (1) prevents the Agency from meeting all of the goals in
11    this subsection (c), the Agency's long-term plan shall
12    prioritize compliance with the requirements of this
13    subsection (c) regarding renewable energy credits in the
14    following order:
15            (i) renewable energy credits under existing
16        contractual obligations;
17            (i-5) funding for the Illinois Solar for All
18        Program, as described in subparagraph (O) of this
19        paragraph (1);
20            (ii) renewable energy credits necessary to comply
21        with the new wind and new photovoltaic procurement
22        requirements described in items (i) through (iii) of
23        subparagraph (C) of this paragraph (1); and
24            (iii) renewable energy credits necessary to meet
25        the remaining requirements of this subsection (c).
26        (G) The following provisions shall apply to the

 

 

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1    Agency's procurement of renewable energy credits under
2    this subsection (c):
3            (i) Notwithstanding whether a long-term renewable
4        resources procurement plan has been approved, the
5        Agency shall conduct an initial forward procurement
6        for renewable energy credits from new utility-scale
7        wind projects within 160 days after June 1, 2017 (the
8        effective date of Public Act 99-906). For the purposes
9        of this initial forward procurement, the Agency shall
10        solicit 15-year contracts for delivery of 1,000,000
11        renewable energy credits delivered annually from new
12        utility-scale wind projects to begin delivery on June
13        1, 2019, if available, but not later than June 1, 2021,
14        unless the project has delays in the establishment of
15        an operating interconnection with the applicable
16        transmission or distribution system as a result of the
17        actions or inactions of the transmission or
18        distribution provider, or other causes for force
19        majeure as outlined in the procurement contract, in
20        which case, not later than June 1, 2022. Payments to
21        suppliers of renewable energy credits shall commence
22        upon delivery. Renewable energy credits procured under
23        this initial procurement shall be included in the
24        Agency's long-term plan and shall apply to all
25        renewable energy goals in this subsection (c).
26            (ii) Notwithstanding whether a long-term renewable

 

 

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1        resources procurement plan has been approved, the
2        Agency shall conduct an initial forward procurement
3        for renewable energy credits from new utility-scale
4        solar projects and brownfield site photovoltaic
5        projects within one year after June 1, 2017 (the
6        effective date of Public Act 99-906). For the purposes
7        of this initial forward procurement, the Agency shall
8        solicit 15-year contracts for delivery of 1,000,000
9        renewable energy credits delivered annually from new
10        utility-scale solar projects and brownfield site
11        photovoltaic projects to begin delivery on June 1,
12        2019, if available, but not later than June 1, 2021,
13        unless the project has delays in the establishment of
14        an operating interconnection with the applicable
15        transmission or distribution system as a result of the
16        actions or inactions of the transmission or
17        distribution provider, or other causes for force
18        majeure as outlined in the procurement contract, in
19        which case, not later than June 1, 2022. The Agency may
20        structure this initial procurement in one or more
21        discrete procurement events. Payments to suppliers of
22        renewable energy credits shall commence upon delivery.
23        Renewable energy credits procured under this initial
24        procurement shall be included in the Agency's
25        long-term plan and shall apply to all renewable energy
26        goals in this subsection (c).

 

 

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1            (iii) Subsequent forward procurements for
2        utility-scale wind projects shall solicit at least
3        1,000,000 renewable energy credits delivered annually
4        per procurement event and shall be planned, scheduled,
5        and designed such that the cumulative amount of
6        renewable energy credits delivered from all new wind
7        projects in each delivery year shall not exceed the
8        Agency's projection of the cumulative amount of
9        renewable energy credits that will be delivered from
10        all new photovoltaic projects, including utility-scale
11        and distributed photovoltaic devices, in the same
12        delivery year at the time scheduled for wind contract
13        delivery.
14            (iv) If, at any time after the time set for
15        delivery of renewable energy credits pursuant to the
16        initial procurements in items (i) and (ii) of this
17        subparagraph (G), the cumulative amount of renewable
18        energy credits projected to be delivered from all new
19        wind projects in a given delivery year exceeds the
20        cumulative amount of renewable energy credits
21        projected to be delivered from all new photovoltaic
22        projects in that delivery year by 200,000 or more
23        renewable energy credits, then the Agency shall within
24        60 days adjust the procurement programs in the
25        long-term renewable resources procurement plan to
26        ensure that the projected cumulative amount of

 

 

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1        renewable energy credits to be delivered from all new
2        wind projects does not exceed the projected cumulative
3        amount of renewable energy credits to be delivered from
4        all new photovoltaic projects by 200,000 or more
5        renewable energy credits, provided that nothing in
6        this Section shall preclude the projected cumulative
7        amount of renewable energy credits to be delivered from
8        all new photovoltaic projects from exceeding the
9        projected cumulative amount of renewable energy
10        credits to be delivered from all new wind projects in
11        each delivery year and provided further that nothing in
12        this item (iv) shall require the curtailment of an
13        executed contract. The Agency shall update, on a
14        quarterly basis, its projection of the renewable
15        energy credits to be delivered from all projects in
16        each delivery year. Notwithstanding anything to the
17        contrary, the Agency may adjust the timing of
18        procurement events conducted under this subparagraph
19        (G). The long-term renewable resources procurement
20        plan shall set forth the process by which the
21        adjustments may be made.
22            (v) All procurements under this subparagraph (G)
23        shall comply with the geographic requirements in
24        subparagraph (I) of this paragraph (1) and shall follow
25        the procurement processes and procedures described in
26        this Section and Section 16-111.5 of the Public

 

 

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1        Utilities Act to the extent practicable, and these
2        processes and procedures may be expedited to
3        accommodate the schedule established by this
4        subparagraph (G).
5        (H) The procurement of renewable energy resources for a
6    given delivery year shall be reduced as described in this
7    subparagraph (H) if an alternative retail electric
8    supplier meets the requirements described in this
9    subparagraph (H).
10            (i) Within 45 days after June 1, 2017 (the
11        effective date of Public Act 99-906), an alternative
12        retail electric supplier or its successor shall submit
13        an informational filing to the Illinois Commerce
14        Commission certifying that, as of December 31, 2015,
15        the alternative retail electric supplier owned one or
16        more electric generating facilities that generates
17        renewable energy resources as defined in Section 1-10
18        of this Act, provided that such facilities are not
19        powered by wind or photovoltaics, and the facilities
20        generate one renewable energy credit for each
21        megawatthour of energy produced from the facility.
22            The informational filing shall identify each
23        facility that was eligible to satisfy the alternative
24        retail electric supplier's obligations under Section
25        16-115D of the Public Utilities Act as described in
26        this item (i).

 

 

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1            (ii) For a given delivery year, the alternative
2        retail electric supplier may elect to supply its retail
3        customers with renewable energy credits from the
4        facility or facilities described in item (i) of this
5        subparagraph (H) that continue to be owned by the
6        alternative retail electric supplier.
7            (iii) The alternative retail electric supplier
8        shall notify the Agency and the applicable utility, no
9        later than February 28 of the year preceding the
10        applicable delivery year or 15 days after June 1, 2017
11        (the effective date of Public Act 99-906), whichever is
12        later, of its election under item (ii) of this
13        subparagraph (H) to supply renewable energy credits to
14        retail customers of the utility. Such election shall
15        identify the amount of renewable energy credits to be
16        supplied by the alternative retail electric supplier
17        to the utility's retail customers and the source of the
18        renewable energy credits identified in the
19        informational filing as described in item (i) of this
20        subparagraph (H), subject to the following
21        limitations:
22                For the delivery year beginning June 1, 2018,
23            the maximum amount of renewable energy credits to
24            be supplied by an alternative retail electric
25            supplier under this subparagraph (H) shall be 68%
26            multiplied by 25% multiplied by 14.5% multiplied

 

 

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1            by the amount of metered electricity
2            (megawatt-hours) delivered by the alternative
3            retail electric supplier to Illinois retail
4            customers during the delivery year ending May 31,
5            2016.
6                For delivery years beginning June 1, 2019 and
7            each year thereafter, the maximum amount of
8            renewable energy credits to be supplied by an
9            alternative retail electric supplier under this
10            subparagraph (H) shall be 68% multiplied by 50%
11            multiplied by 16% multiplied by the amount of
12            metered electricity (megawatt-hours) delivered by
13            the alternative retail electric supplier to
14            Illinois retail customers during the delivery year
15            ending May 31, 2016, provided that the 16% value
16            shall increase by 1.5% each delivery year
17            thereafter to 25% by the delivery year beginning
18            June 1, 2025, and thereafter the 25% value shall
19            apply to each delivery year.
20            For each delivery year, the total amount of
21        renewable energy credits supplied by all alternative
22        retail electric suppliers under this subparagraph (H)
23        shall not exceed 9% of the Illinois target renewable
24        energy credit quantity. The Illinois target renewable
25        energy credit quantity for the delivery year beginning
26        June 1, 2018 is 14.5% multiplied by the total amount of

 

 

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1        metered electricity (megawatt-hours) delivered in the
2        delivery year immediately preceding that delivery
3        year, provided that the 14.5% shall increase by 1.5%
4        each delivery year thereafter to 25% by the delivery
5        year beginning June 1, 2025, and thereafter the 25%
6        value shall apply to each delivery year.
7            If the requirements set forth in items (i) through
8        (iii) of this subparagraph (H) are met, the charges
9        that would otherwise be applicable to the retail
10        customers of the alternative retail electric supplier
11        under paragraph (6) of this subsection (c) for the
12        applicable delivery year shall be reduced by the ratio
13        of the quantity of renewable energy credits supplied by
14        the alternative retail electric supplier compared to
15        that supplier's target renewable energy credit
16        quantity. The supplier's target renewable energy
17        credit quantity for the delivery year beginning June 1,
18        2018 is 14.5% multiplied by the total amount of metered
19        electricity (megawatt-hours) delivered by the
20        alternative retail supplier in that delivery year,
21        provided that the 14.5% shall increase by 1.5% each
22        delivery year thereafter to 25% by the delivery year
23        beginning June 1, 2025, and thereafter the 25% value
24        shall apply to each delivery year.
25            On or before April 1 of each year, the Agency shall
26        annually publish a report on its website that

 

 

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1        identifies the aggregate amount of renewable energy
2        credits supplied by alternative retail electric
3        suppliers under this subparagraph (H).
4        (I) The Agency shall design its long-term renewable
5    energy procurement plan to maximize the State's interest in
6    the health, safety, and welfare of its residents, including
7    but not limited to minimizing sulfur dioxide, nitrogen
8    oxide, particulate matter and other pollution that
9    adversely affects public health in this State, increasing
10    fuel and resource diversity in this State, enhancing the
11    reliability and resiliency of the electricity distribution
12    system in this State, meeting goals to limit carbon dioxide
13    emissions under federal or State law, and contributing to a
14    cleaner and healthier environment for the citizens of this
15    State. In order to further these legislative purposes,
16    renewable energy credits shall be eligible to be counted
17    toward the renewable energy requirements of this
18    subsection (c) if they are generated from facilities
19    located in this State. The Agency may qualify renewable
20    energy credits from facilities located in states adjacent
21    to Illinois if the generator demonstrates and the Agency
22    determines that the operation of such facility or
23    facilities will help promote the State's interest in the
24    health, safety, and welfare of its residents based on the
25    public interest criteria described above. To ensure that
26    the public interest criteria are applied to the procurement

 

 

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1    and given full effect, the Agency's long-term procurement
2    plan shall describe in detail how each public interest
3    factor shall be considered and weighted for facilities
4    located in states adjacent to Illinois.
5        (J) In order to promote the competitive development of
6    renewable energy resources in furtherance of the State's
7    interest in the health, safety, and welfare of its
8    residents, renewable energy credits shall not be eligible
9    to be counted toward the renewable energy requirements of
10    this subsection (c) if they are sourced from a generating
11    unit whose costs were being recovered through rates
12    regulated by this State or any other state or states on or
13    after January 1, 2017. Each contract executed to purchase
14    renewable energy credits under this subsection (c) shall
15    provide for the contract's termination if the costs of the
16    generating unit supplying the renewable energy credits
17    subsequently begin to be recovered through rates regulated
18    by this State or any other state or states; and each
19    contract shall further provide that, in that event, the
20    supplier of the credits must return 110% of all payments
21    received under the contract. Amounts returned under the
22    requirements of this subparagraph (J) shall be retained by
23    the utility and all of these amounts shall be used for the
24    procurement of additional renewable energy credits from
25    new wind or new photovoltaic resources as defined in this
26    subsection (c). The long-term plan shall provide that these

 

 

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1    renewable energy credits shall be procured in the next
2    procurement event.
3        Notwithstanding the limitations of this subparagraph
4    (J), renewable energy credits sourced from generating
5    units that are constructed, purchased, owned, or leased by
6    an electric utility as part of an approved project,
7    program, or pilot under Section 1-56 of this Act shall be
8    eligible to be counted toward the renewable energy
9    requirements of this subsection (c), regardless of how the
10    costs of these units are recovered.
11        (K) The long-term renewable resources procurement plan
12    developed by the Agency in accordance with subparagraph (A)
13    of this paragraph (1) shall include an Adjustable Block
14    program for the procurement of renewable energy credits
15    from new photovoltaic projects that are distributed
16    renewable energy generation devices or new photovoltaic
17    community renewable generation projects. The Adjustable
18    Block program shall be designed to provide a transparent
19    schedule of prices and quantities to enable the
20    photovoltaic market to scale up and for renewable energy
21    credit prices to adjust at a predictable rate over time.
22    The prices set by the Adjustable Block program can be
23    reflected as a set value or as the product of a formula.
24        The Adjustable Block program shall include for each
25    category of eligible projects: a schedule of standard block
26    purchase prices to be offered; a series of steps, with

 

 

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1    associated nameplate capacity and purchase prices that
2    adjust from step to step; and automatic opening of the next
3    step as soon as the nameplate capacity and available
4    purchase prices for an open step are fully committed or
5    reserved. Only projects energized on or after June 1, 2017
6    shall be eligible for the Adjustable Block program. For
7    each block group the Agency shall determine the number of
8    blocks, the amount of generation capacity in each block,
9    and the purchase price for each block, provided that the
10    purchase price provided and the total amount of generation
11    in all blocks for all block groups shall be sufficient to
12    meet the goals in this subsection (c). The Agency may
13    periodically review its prior decisions establishing the
14    number of blocks, the amount of generation capacity in each
15    block, and the purchase price for each block, and may
16    propose, on an expedited basis, changes to these previously
17    set values, including but not limited to redistributing
18    these amounts and the available funds as necessary and
19    appropriate, subject to Commission approval as part of the
20    periodic plan revision process described in Section
21    16-111.5 of the Public Utilities Act. The Agency may define
22    different block sizes, purchase prices, or other distinct
23    terms and conditions for projects located in different
24    utility service territories if the Agency deems it
25    necessary to meet the goals in this subsection (c).
26        The Adjustable Block program shall include at least the

 

 

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1    following block groups in at least the following amounts,
2    which may be adjusted upon review by the Agency and
3    approval by the Commission as described in this
4    subparagraph (K):
5            (i) At least 25% from distributed renewable energy
6        generation devices with a nameplate capacity of no more
7        than 10 kilowatts.
8            (ii) At least 25% from distributed renewable
9        energy generation devices with a nameplate capacity of
10        more than 10 kilowatts and no more than 2,000
11        kilowatts. The Agency may create sub-categories within
12        this category to account for the differences between
13        projects for small commercial customers, large
14        commercial customers, and public or non-profit
15        customers.
16            (iii) At least 25% from photovoltaic community
17        renewable generation projects.
18            (iv) The remaining 25% shall be allocated as
19        specified by the Agency in the long-term renewable
20        resources procurement plan.
21        The Adjustable Block program shall be designed to
22    ensure that renewable energy credits are procured from
23    photovoltaic distributed renewable energy generation
24    devices and new photovoltaic community renewable energy
25    generation projects in diverse locations and are not
26    concentrated in a few geographic areas.

 

 

SB1529 Engrossed- 29 -LRB101 08496 JRG 53573 b

1        (L) The procurement of photovoltaic renewable energy
2    credits under items (i) through (iv) of subparagraph (K) of
3    this paragraph (1) shall be subject to the following
4    contract and payment terms:
5            (i) The Agency shall procure contracts of at least
6        15 years in length.
7            (ii) For those renewable energy credits that
8        qualify and are procured under item (i) of subparagraph
9        (K) of this paragraph (1), the renewable energy credit
10        purchase price shall be paid in full by the contracting
11        utilities at the time that the facility producing the
12        renewable energy credits is interconnected at the
13        distribution system level of the utility and
14        energized. The electric utility shall receive and
15        retire all renewable energy credits generated by the
16        project for the first 15 years of operation.
17            (iii) For those renewable energy credits that
18        qualify and are procured under item (ii) and (iii) of
19        subparagraph (K) of this paragraph (1) and any
20        additional categories of distributed generation
21        included in the long-term renewable resources
22        procurement plan and approved by the Commission, 20
23        percent of the renewable energy credit purchase price
24        shall be paid by the contracting utilities at the time
25        that the facility producing the renewable energy
26        credits is interconnected at the distribution system

 

 

SB1529 Engrossed- 30 -LRB101 08496 JRG 53573 b

1        level of the utility and energized. The remaining
2        portion shall be paid ratably over the subsequent
3        4-year period. The electric utility shall receive and
4        retire all renewable energy credits generated by the
5        project for the first 15 years of operation.
6            (iv) Each contract shall include provisions to
7        ensure the delivery of the renewable energy credits for
8        the full term of the contract.
9            (v) The utility shall be the counterparty to the
10        contracts executed under this subparagraph (L) that
11        are approved by the Commission under the process
12        described in Section 16-111.5 of the Public Utilities
13        Act. No contract shall be executed for an amount that
14        is less than one renewable energy credit per year.
15            (vi) If, at any time, approved applications for the
16        Adjustable Block program exceed funds collected by the
17        electric utility or would cause the Agency to exceed
18        the limitation described in subparagraph (E) of this
19        paragraph (1) on the amount of renewable energy
20        resources that may be procured, then the Agency shall
21        consider future uncommitted funds to be reserved for
22        these contracts on a first-come, first-served basis,
23        with the delivery of renewable energy credits required
24        beginning at the time that the reserved funds become
25        available.
26            (vii) Nothing in this Section shall require the

 

 

SB1529 Engrossed- 31 -LRB101 08496 JRG 53573 b

1        utility to advance any payment or pay any amounts that
2        exceed the actual amount of revenues collected by the
3        utility under paragraph (6) of this subsection (c) and
4        subsection (k) of Section 16-108 of the Public
5        Utilities Act, and contracts executed under this
6        Section shall expressly incorporate this limitation.
7        (M) The Agency shall be authorized to retain one or
8    more experts or expert consulting firms to develop,
9    administer, implement, operate, and evaluate the
10    Adjustable Block program described in subparagraph (K) of
11    this paragraph (1), and the Agency shall retain the
12    consultant or consultants in the same manner, to the extent
13    practicable, as the Agency retains others to administer
14    provisions of this Act, including, but not limited to, the
15    procurement administrator. The selection of experts and
16    expert consulting firms and the procurement process
17    described in this subparagraph (M) are exempt from the
18    requirements of Section 20-10 of the Illinois Procurement
19    Code, under Section 20-10 of that Code. The Agency shall
20    strive to minimize administrative expenses in the
21    implementation of the Adjustable Block program.
22        The Agency and its consultant or consultants shall
23    monitor block activity, share program activity with
24    stakeholders and conduct regularly scheduled meetings to
25    discuss program activity and market conditions. If
26    necessary, the Agency may make prospective administrative

 

 

SB1529 Engrossed- 32 -LRB101 08496 JRG 53573 b

1    adjustments to the Adjustable Block program design, such as
2    redistributing available funds or making adjustments to
3    purchase prices as necessary to achieve the goals of this
4    subsection (c). Program modifications to any price,
5    capacity block, or other program element that do not
6    deviate from the Commission's approved value by more than
7    25% shall take effect immediately and are not subject to
8    Commission review and approval. Program modifications to
9    any price, capacity block, or other program element that
10    deviate more than 25% from the Commission's approved value
11    must be approved by the Commission as a long-term plan
12    amendment under Section 16-111.5 of the Public Utilities
13    Act. The Agency shall consider stakeholder feedback when
14    making adjustments to the Adjustable Block design and shall
15    notify stakeholders in advance of any planned changes.
16        (N) The long-term renewable resources procurement plan
17    required by this subsection (c) shall include a community
18    renewable generation program. The Agency shall establish
19    the terms, conditions, and program requirements for
20    community renewable generation projects with a goal to
21    expand renewable energy generating facility access to a
22    broader group of energy consumers, to ensure robust
23    participation opportunities for residential and small
24    commercial customers and those who cannot install
25    renewable energy on their own properties. Any plan approved
26    by the Commission shall allow subscriptions to community

 

 

SB1529 Engrossed- 33 -LRB101 08496 JRG 53573 b

1    renewable generation projects to be portable and
2    transferable. For purposes of this subparagraph (N),
3    "portable" means that subscriptions may be retained by the
4    subscriber even if the subscriber relocates or changes its
5    address within the same utility service territory; and
6    "transferable" means that a subscriber may assign or sell
7    subscriptions to another person within the same utility
8    service territory.
9        Electric utilities shall provide a monetary credit to a
10    subscriber's subsequent bill for service for the
11    proportional output of a community renewable generation
12    project attributable to that subscriber as specified in
13    Section 16-107.5 of the Public Utilities Act.
14        The Agency shall purchase renewable energy credits
15    from subscribed shares of photovoltaic community renewable
16    generation projects through the Adjustable Block program
17    described in subparagraph (K) of this paragraph (1) or
18    through the Illinois Solar for All Program described in
19    Section 1-56 of this Act. The electric utility shall
20    purchase any unsubscribed energy from community renewable
21    generation projects that are Qualifying Facilities ("QF")
22    under the electric utility's tariff for purchasing the
23    output from QFs under Public Utilities Regulatory Policies
24    Act of 1978.
25        The owners of and any subscribers to a community
26    renewable generation project shall not be considered

 

 

SB1529 Engrossed- 34 -LRB101 08496 JRG 53573 b

1    public utilities or alternative retail electricity
2    suppliers under the Public Utilities Act solely as a result
3    of their interest in or subscription to a community
4    renewable generation project and shall not be required to
5    become an alternative retail electric supplier by
6    participating in a community renewable generation project
7    with a public utility.
8        (O) For the delivery year beginning June 1, 2018, the
9    long-term renewable resources procurement plan required by
10    this subsection (c) shall provide for the Agency to procure
11    contracts to continue offering the Illinois Solar for All
12    Program described in subsection (b) of Section 1-56 of this
13    Act, and the contracts approved by the Commission shall be
14    executed by the utilities that are subject to this
15    subsection (c). The long-term renewable resources
16    procurement plan shall allocate 5% of the funds available
17    under the plan for the applicable delivery year, or
18    $10,000,000 per delivery year, whichever is greater, to
19    fund the programs, and the plan shall determine the amount
20    of funding to be apportioned to the programs identified in
21    subsection (b) of Section 1-56 of this Act; provided that
22    for the delivery years beginning June 1, 2017, June 1,
23    2021, and June 1, 2025, the long-term renewable resources
24    procurement plan shall allocate 10% of the funds available
25    under the plan for the applicable delivery year, or
26    $20,000,000 per delivery year, whichever is greater, and

 

 

SB1529 Engrossed- 35 -LRB101 08496 JRG 53573 b

1    $10,000,000 of such funds in such year shall be used by an
2    electric utility that serves more than 3,000,000 retail
3    customers in the State to implement a Commission-approved
4    plan under Section 16-108.12 of the Public Utilities Act.
5    In making the determinations required under this
6    subparagraph (O), the Commission shall consider the
7    experience and performance under the programs and any
8    evaluation reports. The Commission shall also provide for
9    an independent evaluation of those programs on a periodic
10    basis that are funded under this subparagraph (O).
11        (2) (Blank).
12        (3) (Blank).
13        (4) The electric utility shall retire all renewable
14    energy credits used to comply with the standard.
15        (5) Beginning with the 2010 delivery year and ending
16    June 1, 2017, an electric utility subject to this
17    subsection (c) shall apply the lesser of the maximum
18    alternative compliance payment rate or the most recent
19    estimated alternative compliance payment rate for its
20    service territory for the corresponding compliance period,
21    established pursuant to subsection (d) of Section 16-115D
22    of the Public Utilities Act to its retail customers that
23    take service pursuant to the electric utility's hourly
24    pricing tariff or tariffs. The electric utility shall
25    retain all amounts collected as a result of the application
26    of the alternative compliance payment rate or rates to such

 

 

SB1529 Engrossed- 36 -LRB101 08496 JRG 53573 b

1    customers, and, beginning in 2011, the utility shall
2    include in the information provided under item (1) of
3    subsection (d) of Section 16-111.5 of the Public Utilities
4    Act the amounts collected under the alternative compliance
5    payment rate or rates for the prior year ending May 31.
6    Notwithstanding any limitation on the procurement of
7    renewable energy resources imposed by item (2) of this
8    subsection (c), the Agency shall increase its spending on
9    the purchase of renewable energy resources to be procured
10    by the electric utility for the next plan year by an amount
11    equal to the amounts collected by the utility under the
12    alternative compliance payment rate or rates in the prior
13    year ending May 31.
14        (6) The electric utility shall be entitled to recover
15    all of its costs associated with the procurement of
16    renewable energy credits under plans approved under this
17    Section and Section 16-111.5 of the Public Utilities Act.
18    These costs shall include associated reasonable expenses
19    for implementing the procurement programs, including, but
20    not limited to, the costs of administering and evaluating
21    the Adjustable Block program, through an automatic
22    adjustment clause tariff in accordance with subsection (k)
23    of Section 16-108 of the Public Utilities Act.
24        (7) Renewable energy credits procured from new
25    photovoltaic projects or new distributed renewable energy
26    generation devices under this Section after June 1, 2017

 

 

SB1529 Engrossed- 37 -LRB101 08496 JRG 53573 b

1    (the effective date of Public Act 99-906) must be procured
2    from devices installed by a qualified person in compliance
3    with the requirements of Section 16-128A of the Public
4    Utilities Act and any rules or regulations adopted
5    thereunder.
6        In meeting the renewable energy requirements of this
7    subsection (c), to the extent feasible and consistent with
8    State and federal law, the renewable energy credit
9    procurements, Adjustable Block solar program, and
10    community renewable generation program shall provide
11    employment opportunities for all segments of the
12    population and workforce, including minority-owned and
13    female-owned business enterprises, and shall not,
14    consistent with State and federal law, discriminate based
15    on race or socioeconomic status.
16    (d) Clean coal portfolio standard.
17        (1) The procurement plans shall include electricity
18    generated using clean coal. Each utility shall enter into
19    one or more sourcing agreements with the initial clean coal
20    facility, as provided in paragraph (3) of this subsection
21    (d), covering electricity generated by the initial clean
22    coal facility representing at least 5% of each utility's
23    total supply to serve the load of eligible retail customers
24    in 2015 and each year thereafter, as described in paragraph
25    (3) of this subsection (d), subject to the limits specified
26    in paragraph (2) of this subsection (d). It is the goal of

 

 

SB1529 Engrossed- 38 -LRB101 08496 JRG 53573 b

1    the State that by January 1, 2025, 25% of the electricity
2    used in the State shall be generated by cost-effective
3    clean coal facilities. For purposes of this subsection (d),
4    "cost-effective" means that the expenditures pursuant to
5    such sourcing agreements do not cause the limit stated in
6    paragraph (2) of this subsection (d) to be exceeded and do
7    not exceed cost-based benchmarks, which shall be developed
8    to assess all expenditures pursuant to such sourcing
9    agreements covering electricity generated by clean coal
10    facilities, other than the initial clean coal facility, by
11    the procurement administrator, in consultation with the
12    Commission staff, Agency staff, and the procurement
13    monitor and shall be subject to Commission review and
14    approval.
15        A utility party to a sourcing agreement shall
16    immediately retire any emission credits that it receives in
17    connection with the electricity covered by such agreement.
18        Utilities shall maintain adequate records documenting
19    the purchases under the sourcing agreement to comply with
20    this subsection (d) and shall file an accounting with the
21    load forecast that must be filed with the Agency by July 15
22    of each year, in accordance with subsection (d) of Section
23    16-111.5 of the Public Utilities Act.
24        A utility shall be deemed to have complied with the
25    clean coal portfolio standard specified in this subsection
26    (d) if the utility enters into a sourcing agreement as

 

 

SB1529 Engrossed- 39 -LRB101 08496 JRG 53573 b

1    required by this subsection (d).
2        (2) For purposes of this subsection (d), the required
3    execution of sourcing agreements with the initial clean
4    coal facility for a particular year shall be measured as a
5    percentage of the actual amount of electricity
6    (megawatt-hours) supplied by the electric utility to
7    eligible retail customers in the planning year ending
8    immediately prior to the agreement's execution. For
9    purposes of this subsection (d), the amount paid per
10    kilowatthour means the total amount paid for electric
11    service expressed on a per kilowatthour basis. For purposes
12    of this subsection (d), the total amount paid for electric
13    service includes without limitation amounts paid for
14    supply, transmission, distribution, surcharges and add-on
15    taxes.
16        Notwithstanding the requirements of this subsection
17    (d), the total amount paid under sourcing agreements with
18    clean coal facilities pursuant to the procurement plan for
19    any given year shall be reduced by an amount necessary to
20    limit the annual estimated average net increase due to the
21    costs of these resources included in the amounts paid by
22    eligible retail customers in connection with electric
23    service to:
24            (A) in 2010, no more than 0.5% of the amount paid
25        per kilowatthour by those customers during the year
26        ending May 31, 2009;

 

 

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1            (B) in 2011, the greater of an additional 0.5% of
2        the amount paid per kilowatthour by those customers
3        during the year ending May 31, 2010 or 1% of the amount
4        paid per kilowatthour by those customers during the
5        year ending May 31, 2009;
6            (C) in 2012, the greater of an additional 0.5% of
7        the amount paid per kilowatthour by those customers
8        during the year ending May 31, 2011 or 1.5% of the
9        amount paid per kilowatthour by those customers during
10        the year ending May 31, 2009;
11            (D) in 2013, the greater of an additional 0.5% of
12        the amount paid per kilowatthour by those customers
13        during the year ending May 31, 2012 or 2% of the amount
14        paid per kilowatthour by those customers during the
15        year ending May 31, 2009; and
16            (E) thereafter, the total amount paid under
17        sourcing agreements with clean coal facilities
18        pursuant to the procurement plan for any single year
19        shall be reduced by an amount necessary to limit the
20        estimated average net increase due to the cost of these
21        resources included in the amounts paid by eligible
22        retail customers in connection with electric service
23        to no more than the greater of (i) 2.015% of the amount
24        paid per kilowatthour by those customers during the
25        year ending May 31, 2009 or (ii) the incremental amount
26        per kilowatthour paid for these resources in 2013.

 

 

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1        These requirements may be altered only as provided by
2        statute.
3        No later than June 30, 2015, the Commission shall
4    review the limitation on the total amount paid under
5    sourcing agreements, if any, with clean coal facilities
6    pursuant to this subsection (d) and report to the General
7    Assembly its findings as to whether that limitation unduly
8    constrains the amount of electricity generated by
9    cost-effective clean coal facilities that is covered by
10    sourcing agreements.
11        (3) Initial clean coal facility. In order to promote
12    development of clean coal facilities in Illinois, each
13    electric utility subject to this Section shall execute a
14    sourcing agreement to source electricity from a proposed
15    clean coal facility in Illinois (the "initial clean coal
16    facility") that will have a nameplate capacity of at least
17    500 MW when commercial operation commences, that has a
18    final Clean Air Act permit on June 1, 2009 (the effective
19    date of Public Act 95-1027), and that will meet the
20    definition of clean coal facility in Section 1-10 of this
21    Act when commercial operation commences. The sourcing
22    agreements with this initial clean coal facility shall be
23    subject to both approval of the initial clean coal facility
24    by the General Assembly and satisfaction of the
25    requirements of paragraph (4) of this subsection (d) and
26    shall be executed within 90 days after any such approval by

 

 

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1    the General Assembly. The Agency and the Commission shall
2    have authority to inspect all books and records associated
3    with the initial clean coal facility during the term of
4    such a sourcing agreement. A utility's sourcing agreement
5    for electricity produced by the initial clean coal facility
6    shall include:
7            (A) a formula contractual price (the "contract
8        price") approved pursuant to paragraph (4) of this
9        subsection (d), which shall:
10                (i) be determined using a cost of service
11            methodology employing either a level or deferred
12            capital recovery component, based on a capital
13            structure consisting of 45% equity and 55% debt,
14            and a return on equity as may be approved by the
15            Federal Energy Regulatory Commission, which in any
16            case may not exceed the lower of 11.5% or the rate
17            of return approved by the General Assembly
18            pursuant to paragraph (4) of this subsection (d);
19            and
20                (ii) provide that all miscellaneous net
21            revenue, including but not limited to net revenue
22            from the sale of emission allowances, if any,
23            substitute natural gas, if any, grants or other
24            support provided by the State of Illinois or the
25            United States Government, firm transmission
26            rights, if any, by-products produced by the

 

 

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1            facility, energy or capacity derived from the
2            facility and not covered by a sourcing agreement
3            pursuant to paragraph (3) of this subsection (d) or
4            item (5) of subsection (d) of Section 16-115 of the
5            Public Utilities Act, whether generated from the
6            synthesis gas derived from coal, from SNG, or from
7            natural gas, shall be credited against the revenue
8            requirement for this initial clean coal facility;
9            (B) power purchase provisions, which shall:
10                (i) provide that the utility party to such
11            sourcing agreement shall pay the contract price
12            for electricity delivered under such sourcing
13            agreement;
14                (ii) require delivery of electricity to the
15            regional transmission organization market of the
16            utility that is party to such sourcing agreement;
17                (iii) require the utility party to such
18            sourcing agreement to buy from the initial clean
19            coal facility in each hour an amount of energy
20            equal to all clean coal energy made available from
21            the initial clean coal facility during such hour
22            times a fraction, the numerator of which is such
23            utility's retail market sales of electricity
24            (expressed in kilowatthours sold) in the State
25            during the prior calendar month and the
26            denominator of which is the total retail market

 

 

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1            sales of electricity (expressed in kilowatthours
2            sold) in the State by utilities during such prior
3            month and the sales of electricity (expressed in
4            kilowatthours sold) in the State by alternative
5            retail electric suppliers during such prior month
6            that are subject to the requirements of this
7            subsection (d) and paragraph (5) of subsection (d)
8            of Section 16-115 of the Public Utilities Act,
9            provided that the amount purchased by the utility
10            in any year will be limited by paragraph (2) of
11            this subsection (d); and
12                (iv) be considered pre-existing contracts in
13            such utility's procurement plans for eligible
14            retail customers;
15            (C) contract for differences provisions, which
16        shall:
17                (i) require the utility party to such sourcing
18            agreement to contract with the initial clean coal
19            facility in each hour with respect to an amount of
20            energy equal to all clean coal energy made
21            available from the initial clean coal facility
22            during such hour times a fraction, the numerator of
23            which is such utility's retail market sales of
24            electricity (expressed in kilowatthours sold) in
25            the utility's service territory in the State
26            during the prior calendar month and the

 

 

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1            denominator of which is the total retail market
2            sales of electricity (expressed in kilowatthours
3            sold) in the State by utilities during such prior
4            month and the sales of electricity (expressed in
5            kilowatthours sold) in the State by alternative
6            retail electric suppliers during such prior month
7            that are subject to the requirements of this
8            subsection (d) and paragraph (5) of subsection (d)
9            of Section 16-115 of the Public Utilities Act,
10            provided that the amount paid by the utility in any
11            year will be limited by paragraph (2) of this
12            subsection (d);
13                (ii) provide that the utility's payment
14            obligation in respect of the quantity of
15            electricity determined pursuant to the preceding
16            clause (i) shall be limited to an amount equal to
17            (1) the difference between the contract price
18            determined pursuant to subparagraph (A) of
19            paragraph (3) of this subsection (d) and the
20            day-ahead price for electricity delivered to the
21            regional transmission organization market of the
22            utility that is party to such sourcing agreement
23            (or any successor delivery point at which such
24            utility's supply obligations are financially
25            settled on an hourly basis) (the "reference
26            price") on the day preceding the day on which the

 

 

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1            electricity is delivered to the initial clean coal
2            facility busbar, multiplied by (2) the quantity of
3            electricity determined pursuant to the preceding
4            clause (i); and
5                (iii) not require the utility to take physical
6            delivery of the electricity produced by the
7            facility;
8            (D) general provisions, which shall:
9                (i) specify a term of no more than 30 years,
10            commencing on the commercial operation date of the
11            facility;
12                (ii) provide that utilities shall maintain
13            adequate records documenting purchases under the
14            sourcing agreements entered into to comply with
15            this subsection (d) and shall file an accounting
16            with the load forecast that must be filed with the
17            Agency by July 15 of each year, in accordance with
18            subsection (d) of Section 16-111.5 of the Public
19            Utilities Act;
20                (iii) provide that all costs associated with
21            the initial clean coal facility will be
22            periodically reported to the Federal Energy
23            Regulatory Commission and to purchasers in
24            accordance with applicable laws governing
25            cost-based wholesale power contracts;
26                (iv) permit the Illinois Power Agency to

 

 

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1            assume ownership of the initial clean coal
2            facility, without monetary consideration and
3            otherwise on reasonable terms acceptable to the
4            Agency, if the Agency so requests no less than 3
5            years prior to the end of the stated contract term;
6                (v) require the owner of the initial clean coal
7            facility to provide documentation to the
8            Commission each year, starting in the facility's
9            first year of commercial operation, accurately
10            reporting the quantity of carbon emissions from
11            the facility that have been captured and
12            sequestered and report any quantities of carbon
13            released from the site or sites at which carbon
14            emissions were sequestered in prior years, based
15            on continuous monitoring of such sites. If, in any
16            year after the first year of commercial operation,
17            the owner of the facility fails to demonstrate that
18            the initial clean coal facility captured and
19            sequestered at least 50% of the total carbon
20            emissions that the facility would otherwise emit
21            or that sequestration of emissions from prior
22            years has failed, resulting in the release of
23            carbon dioxide into the atmosphere, the owner of
24            the facility must offset excess emissions. Any
25            such carbon offsets must be permanent, additional,
26            verifiable, real, located within the State of

 

 

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1            Illinois, and legally and practicably enforceable.
2            The cost of such offsets for the facility that are
3            not recoverable shall not exceed $15 million in any
4            given year. No costs of any such purchases of
5            carbon offsets may be recovered from a utility or
6            its customers. All carbon offsets purchased for
7            this purpose and any carbon emission credits
8            associated with sequestration of carbon from the
9            facility must be permanently retired. The initial
10            clean coal facility shall not forfeit its
11            designation as a clean coal facility if the
12            facility fails to fully comply with the applicable
13            carbon sequestration requirements in any given
14            year, provided the requisite offsets are
15            purchased. However, the Attorney General, on
16            behalf of the People of the State of Illinois, may
17            specifically enforce the facility's sequestration
18            requirement and the other terms of this contract
19            provision. Compliance with the sequestration
20            requirements and offset purchase requirements
21            specified in paragraph (3) of this subsection (d)
22            shall be reviewed annually by an independent
23            expert retained by the owner of the initial clean
24            coal facility, with the advance written approval
25            of the Attorney General. The Commission may, in the
26            course of the review specified in item (vii),

 

 

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1            reduce the allowable return on equity for the
2            facility if the facility willfully fails to comply
3            with the carbon capture and sequestration
4            requirements set forth in this item (v);
5                (vi) include limits on, and accordingly
6            provide for modification of, the amount the
7            utility is required to source under the sourcing
8            agreement consistent with paragraph (2) of this
9            subsection (d);
10                (vii) require Commission review: (1) to
11            determine the justness, reasonableness, and
12            prudence of the inputs to the formula referenced in
13            subparagraphs (A)(i) through (A)(iii) of paragraph
14            (3) of this subsection (d), prior to an adjustment
15            in those inputs including, without limitation, the
16            capital structure and return on equity, fuel
17            costs, and other operations and maintenance costs
18            and (2) to approve the costs to be passed through
19            to customers under the sourcing agreement by which
20            the utility satisfies its statutory obligations.
21            Commission review shall occur no less than every 3
22            years, regardless of whether any adjustments have
23            been proposed, and shall be completed within 9
24            months;
25                (viii) limit the utility's obligation to such
26            amount as the utility is allowed to recover through

 

 

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1            tariffs filed with the Commission, provided that
2            neither the clean coal facility nor the utility
3            waives any right to assert federal pre-emption or
4            any other argument in response to a purported
5            disallowance of recovery costs;
6                (ix) limit the utility's or alternative retail
7            electric supplier's obligation to incur any
8            liability until such time as the facility is in
9            commercial operation and generating power and
10            energy and such power and energy is being delivered
11            to the facility busbar;
12                (x) provide that the owner or owners of the
13            initial clean coal facility, which is the
14            counterparty to such sourcing agreement, shall
15            have the right from time to time to elect whether
16            the obligations of the utility party thereto shall
17            be governed by the power purchase provisions or the
18            contract for differences provisions;
19                (xi) append documentation showing that the
20            formula rate and contract, insofar as they relate
21            to the power purchase provisions, have been
22            approved by the Federal Energy Regulatory
23            Commission pursuant to Section 205 of the Federal
24            Power Act;
25                (xii) provide that any changes to the terms of
26            the contract, insofar as such changes relate to the

 

 

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1            power purchase provisions, are subject to review
2            under the public interest standard applied by the
3            Federal Energy Regulatory Commission pursuant to
4            Sections 205 and 206 of the Federal Power Act; and
5                (xiii) conform with customary lender
6            requirements in power purchase agreements used as
7            the basis for financing non-utility generators.
8        (4) Effective date of sourcing agreements with the
9    initial clean coal facility. Any proposed sourcing
10    agreement with the initial clean coal facility shall not
11    become effective unless the following reports are prepared
12    and submitted and authorizations and approvals obtained:
13            (i) Facility cost report. The owner of the initial
14        clean coal facility shall submit to the Commission, the
15        Agency, and the General Assembly a front-end
16        engineering and design study, a facility cost report,
17        method of financing (including but not limited to
18        structure and associated costs), and an operating and
19        maintenance cost quote for the facility (collectively
20        "facility cost report"), which shall be prepared in
21        accordance with the requirements of this paragraph (4)
22        of subsection (d) of this Section, and shall provide
23        the Commission and the Agency access to the work
24        papers, relied upon documents, and any other backup
25        documentation related to the facility cost report.
26            (ii) Commission report. Within 6 months following

 

 

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1        receipt of the facility cost report, the Commission, in
2        consultation with the Agency, shall submit a report to
3        the General Assembly setting forth its analysis of the
4        facility cost report. Such report shall include, but
5        not be limited to, a comparison of the costs associated
6        with electricity generated by the initial clean coal
7        facility to the costs associated with electricity
8        generated by other types of generation facilities, an
9        analysis of the rate impacts on residential and small
10        business customers over the life of the sourcing
11        agreements, and an analysis of the likelihood that the
12        initial clean coal facility will commence commercial
13        operation by and be delivering power to the facility's
14        busbar by 2016. To assist in the preparation of its
15        report, the Commission, in consultation with the
16        Agency, may hire one or more experts or consultants,
17        the costs of which shall be paid for by the owner of
18        the initial clean coal facility. The Commission and
19        Agency may begin the process of selecting such experts
20        or consultants prior to receipt of the facility cost
21        report.
22            (iii) General Assembly approval. The proposed
23        sourcing agreements shall not take effect unless,
24        based on the facility cost report and the Commission's
25        report, the General Assembly enacts authorizing
26        legislation approving (A) the projected price, stated

 

 

SB1529 Engrossed- 53 -LRB101 08496 JRG 53573 b

1        in cents per kilowatthour, to be charged for
2        electricity generated by the initial clean coal
3        facility, (B) the projected impact on residential and
4        small business customers' bills over the life of the
5        sourcing agreements, and (C) the maximum allowable
6        return on equity for the project; and
7            (iv) Commission review. If the General Assembly
8        enacts authorizing legislation pursuant to
9        subparagraph (iii) approving a sourcing agreement, the
10        Commission shall, within 90 days of such enactment,
11        complete a review of such sourcing agreement. During
12        such time period, the Commission shall implement any
13        directive of the General Assembly, resolve any
14        disputes between the parties to the sourcing agreement
15        concerning the terms of such agreement, approve the
16        form of such agreement, and issue an order finding that
17        the sourcing agreement is prudent and reasonable.
18        The facility cost report shall be prepared as follows:
19            (A) The facility cost report shall be prepared by
20        duly licensed engineering and construction firms
21        detailing the estimated capital costs payable to one or
22        more contractors or suppliers for the engineering,
23        procurement and construction of the components
24        comprising the initial clean coal facility and the
25        estimated costs of operation and maintenance of the
26        facility. The facility cost report shall include:

 

 

SB1529 Engrossed- 54 -LRB101 08496 JRG 53573 b

1                (i) an estimate of the capital cost of the core
2            plant based on one or more front end engineering
3            and design studies for the gasification island and
4            related facilities. The core plant shall include
5            all civil, structural, mechanical, electrical,
6            control, and safety systems.
7                (ii) an estimate of the capital cost of the
8            balance of the plant, including any capital costs
9            associated with sequestration of carbon dioxide
10            emissions and all interconnects and interfaces
11            required to operate the facility, such as
12            transmission of electricity, construction or
13            backfeed power supply, pipelines to transport
14            substitute natural gas or carbon dioxide, potable
15            water supply, natural gas supply, water supply,
16            water discharge, landfill, access roads, and coal
17            delivery.
18            The quoted construction costs shall be expressed
19        in nominal dollars as of the date that the quote is
20        prepared and shall include capitalized financing costs
21        during construction, taxes, insurance, and other
22        owner's costs, and an assumed escalation in materials
23        and labor beyond the date as of which the construction
24        cost quote is expressed.
25            (B) The front end engineering and design study for
26        the gasification island and the cost study for the

 

 

SB1529 Engrossed- 55 -LRB101 08496 JRG 53573 b

1        balance of plant shall include sufficient design work
2        to permit quantification of major categories of
3        materials, commodities and labor hours, and receipt of
4        quotes from vendors of major equipment required to
5        construct and operate the clean coal facility.
6            (C) The facility cost report shall also include an
7        operating and maintenance cost quote that will provide
8        the estimated cost of delivered fuel, personnel,
9        maintenance contracts, chemicals, catalysts,
10        consumables, spares, and other fixed and variable
11        operations and maintenance costs. The delivered fuel
12        cost estimate will be provided by a recognized third
13        party expert or experts in the fuel and transportation
14        industries. The balance of the operating and
15        maintenance cost quote, excluding delivered fuel
16        costs, will be developed based on the inputs provided
17        by duly licensed engineering and construction firms
18        performing the construction cost quote, potential
19        vendors under long-term service agreements and plant
20        operating agreements, or recognized third party plant
21        operator or operators.
22            The operating and maintenance cost quote
23        (including the cost of the front end engineering and
24        design study) shall be expressed in nominal dollars as
25        of the date that the quote is prepared and shall
26        include taxes, insurance, and other owner's costs, and

 

 

SB1529 Engrossed- 56 -LRB101 08496 JRG 53573 b

1        an assumed escalation in materials and labor beyond the
2        date as of which the operating and maintenance cost
3        quote is expressed.
4            (D) The facility cost report shall also include an
5        analysis of the initial clean coal facility's ability
6        to deliver power and energy into the applicable
7        regional transmission organization markets and an
8        analysis of the expected capacity factor for the
9        initial clean coal facility.
10            (E) Amounts paid to third parties unrelated to the
11        owner or owners of the initial clean coal facility to
12        prepare the core plant construction cost quote,
13        including the front end engineering and design study,
14        and the operating and maintenance cost quote will be
15        reimbursed through Coal Development Bonds.
16        (5) Re-powering and retrofitting coal-fired power
17    plants previously owned by Illinois utilities to qualify as
18    clean coal facilities. During the 2009 procurement
19    planning process and thereafter, the Agency and the
20    Commission shall consider sourcing agreements covering
21    electricity generated by power plants that were previously
22    owned by Illinois utilities and that have been or will be
23    converted into clean coal facilities, as defined by Section
24    1-10 of this Act. Pursuant to such procurement planning
25    process, the owners of such facilities may propose to the
26    Agency sourcing agreements with utilities and alternative

 

 

SB1529 Engrossed- 57 -LRB101 08496 JRG 53573 b

1    retail electric suppliers required to comply with
2    subsection (d) of this Section and item (5) of subsection
3    (d) of Section 16-115 of the Public Utilities Act, covering
4    electricity generated by such facilities. In the case of
5    sourcing agreements that are power purchase agreements,
6    the contract price for electricity sales shall be
7    established on a cost of service basis. In the case of
8    sourcing agreements that are contracts for differences,
9    the contract price from which the reference price is
10    subtracted shall be established on a cost of service basis.
11    The Agency and the Commission may approve any such utility
12    sourcing agreements that do not exceed cost-based
13    benchmarks developed by the procurement administrator, in
14    consultation with the Commission staff, Agency staff and
15    the procurement monitor, subject to Commission review and
16    approval. The Commission shall have authority to inspect
17    all books and records associated with these clean coal
18    facilities during the term of any such contract.
19        (6) Costs incurred under this subsection (d) or
20    pursuant to a contract entered into under this subsection
21    (d) shall be deemed prudently incurred and reasonable in
22    amount and the electric utility shall be entitled to full
23    cost recovery pursuant to the tariffs filed with the
24    Commission.
25    (d-5) Zero emission standard.
26        (1) Beginning with the delivery year commencing on June

 

 

SB1529 Engrossed- 58 -LRB101 08496 JRG 53573 b

1    1, 2017, the Agency shall, for electric utilities that
2    serve at least 100,000 retail customers in this State,
3    procure contracts with zero emission facilities that are
4    reasonably capable of generating cost-effective zero
5    emission credits in an amount approximately equal to 16% of
6    the actual amount of electricity delivered by each electric
7    utility to retail customers in the State during calendar
8    year 2014. For an electric utility serving fewer than
9    100,000 retail customers in this State that requested,
10    under Section 16-111.5 of the Public Utilities Act, that
11    the Agency procure power and energy for all or a portion of
12    the utility's Illinois load for the delivery year
13    commencing June 1, 2016, the Agency shall procure contracts
14    with zero emission facilities that are reasonably capable
15    of generating cost-effective zero emission credits in an
16    amount approximately equal to 16% of the portion of power
17    and energy to be procured by the Agency for the utility.
18    The duration of the contracts procured under this
19    subsection (d-5) shall be for a term of 10 years ending May
20    31, 2027. The quantity of zero emission credits to be
21    procured under the contracts shall be all of the zero
22    emission credits generated by the zero emission facility in
23    each delivery year; however, if the zero emission facility
24    is owned by more than one entity, then the quantity of zero
25    emission credits to be procured under the contracts shall
26    be the amount of zero emission credits that are generated

 

 

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1    from the portion of the zero emission facility that is
2    owned by the winning supplier.
3        The 16% value identified in this paragraph (1) is the
4    average of the percentage targets in subparagraph (B) of
5    paragraph (1) of subsection (c) of this Section 1-75 of
6    this Act for the 5 delivery years beginning June 1, 2017.
7        The procurement process shall be subject to the
8    following provisions:
9            (A) Those zero emission facilities that intend to
10        participate in the procurement shall submit to the
11        Agency the following eligibility information for each
12        zero emission facility on or before the date
13        established by the Agency:
14                (i) the in-service date and remaining useful
15            life of the zero emission facility;
16                (ii) the amount of power generated annually
17            for each of the years 2005 through 2015, and the
18            projected zero emission credits to be generated
19            over the remaining useful life of the zero emission
20            facility, which shall be used to determine the
21            capability of each facility;
22                (iii) the annual zero emission facility cost
23            projections, expressed on a per megawatthour
24            basis, over the next 6 delivery years, which shall
25            include the following: operation and maintenance
26            expenses; fully allocated overhead costs, which

 

 

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1            shall be allocated using the methodology developed
2            by the Institute for Nuclear Power Operations;
3            fuel expenditures; non-fuel capital expenditures;
4            spent fuel expenditures; a return on working
5            capital; the cost of operational and market risks
6            that could be avoided by ceasing operation; and any
7            other costs necessary for continued operations,
8            provided that "necessary" means, for purposes of
9            this item (iii), that the costs could reasonably be
10            avoided only by ceasing operations of the zero
11            emission facility; and
12                (iv) a commitment to continue operating, for
13            the duration of the contract or contracts executed
14            under the procurement held under this subsection
15            (d-5), the zero emission facility that produces
16            the zero emission credits to be procured in the
17            procurement.
18            The information described in item (iii) of this
19        subparagraph (A) may be submitted on a confidential
20        basis and shall be treated and maintained by the
21        Agency, the procurement administrator, and the
22        Commission as confidential and proprietary and exempt
23        from disclosure under subparagraphs (a) and (g) of
24        paragraph (1) of Section 7 of the Freedom of
25        Information Act. The Office of Attorney General shall
26        have access to, and maintain the confidentiality of,

 

 

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1        such information pursuant to Section 6.5 of the
2        Attorney General Act.
3            (B) The price for each zero emission credit
4        procured under this subsection (d-5) for each delivery
5        year shall be in an amount that equals the Social Cost
6        of Carbon, expressed on a price per megawatthour basis.
7        However, to ensure that the procurement remains
8        affordable to retail customers in this State if
9        electricity prices increase, the price in an
10        applicable delivery year shall be reduced below the
11        Social Cost of Carbon by the amount ("Price
12        Adjustment") by which the market price index for the
13        applicable delivery year exceeds the baseline market
14        price index for the consecutive 12-month period ending
15        May 31, 2016. If the Price Adjustment is greater than
16        or equal to the Social Cost of Carbon in an applicable
17        delivery year, then no payments shall be due in that
18        delivery year. The components of this calculation are
19        defined as follows:
20                (i) Social Cost of Carbon: The Social Cost of
21            Carbon is $16.50 per megawatthour, which is based
22            on the U.S. Interagency Working Group on Social
23            Cost of Carbon's price in the August 2016 Technical
24            Update using a 3% discount rate, adjusted for
25            inflation for each year of the program. Beginning
26            with the delivery year commencing June 1, 2023, the

 

 

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1            price per megawatthour shall increase by $1 per
2            megawatthour, and continue to increase by an
3            additional $1 per megawatthour each delivery year
4            thereafter.
5                (ii) Baseline market price index: The baseline
6            market price index for the consecutive 12-month
7            period ending May 31, 2016 is $31.40 per
8            megawatthour, which is based on the sum of (aa) the
9            average day-ahead energy price across all hours of
10            such 12-month period at the PJM Interconnection
11            LLC Northern Illinois Hub, (bb) 50% multiplied by
12            the Base Residual Auction, or its successor,
13            capacity price for the rest of the RTO zone group
14            determined by PJM Interconnection LLC, divided by
15            24 hours per day, and (cc) 50% multiplied by the
16            Planning Resource Auction, or its successor,
17            capacity price for Zone 4 determined by the
18            Midcontinent Independent System Operator, Inc.,
19            divided by 24 hours per day.
20                (iii) Market price index: The market price
21            index for a delivery year shall be the sum of
22            projected energy prices and projected capacity
23            prices determined as follows:
24                    (aa) Projected energy prices: the
25                projected energy prices for the applicable
26                delivery year shall be calculated once for the

 

 

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1                year using the forward market price for the PJM
2                Interconnection, LLC Northern Illinois Hub.
3                The forward market price shall be calculated as
4                follows: the energy forward prices for each
5                month of the applicable delivery year averaged
6                for each trade date during the calendar year
7                immediately preceding that delivery year to
8                produce a single energy forward price for the
9                delivery year. The forward market price
10                calculation shall use data published by the
11                Intercontinental Exchange, or its successor.
12                    (bb) Projected capacity prices:
13                        (I) For the delivery years commencing
14                    June 1, 2017, June 1, 2018, and June 1,
15                    2019, the projected capacity price shall
16                    be equal to the sum of (1) 50% multiplied
17                    by the Base Residual Auction, or its
18                    successor, price for the rest of the RTO
19                    zone group as determined by PJM
20                    Interconnection LLC, divided by 24 hours
21                    per day and, (2) 50% multiplied by the
22                    resource auction price determined in the
23                    resource auction administered by the
24                    Midcontinent Independent System Operator,
25                    Inc., in which the largest percentage of
26                    load cleared for Local Resource Zone 4,

 

 

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1                    divided by 24 hours per day, and where such
2                    price is determined by the Midcontinent
3                    Independent System Operator, Inc.
4                        (II) For the delivery year commencing
5                    June 1, 2020, and each year thereafter, the
6                    projected capacity price shall be equal to
7                    the sum of (1) 50% multiplied by the Base
8                    Residual Auction, or its successor, price
9                    for the ComEd zone as determined by PJM
10                    Interconnection LLC, divided by 24 hours
11                    per day, and (2) 50% multiplied by the
12                    resource auction price determined in the
13                    resource auction administered by the
14                    Midcontinent Independent System Operator,
15                    Inc., in which the largest percentage of
16                    load cleared for Local Resource Zone 4,
17                    divided by 24 hours per day, and where such
18                    price is determined by the Midcontinent
19                    Independent System Operator, Inc.
20            For purposes of this subsection (d-5):
21                "Rest of the RTO" and "ComEd Zone" shall have
22            the meaning ascribed to them by PJM
23            Interconnection, LLC.
24                "RTO" means regional transmission
25            organization.
26            (C) No later than 45 days after June 1, 2017 (the

 

 

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1        effective date of Public Act 99-906), the Agency shall
2        publish its proposed zero emission standard
3        procurement plan. The plan shall be consistent with the
4        provisions of this paragraph (1) and shall provide that
5        winning bids shall be selected based on public interest
6        criteria that include, but are not limited to,
7        minimizing carbon dioxide emissions that result from
8        electricity consumed in Illinois and minimizing sulfur
9        dioxide, nitrogen oxide, and particulate matter
10        emissions that adversely affect the citizens of this
11        State. In particular, the selection of winning bids
12        shall take into account the incremental environmental
13        benefits resulting from the procurement, such as any
14        existing environmental benefits that are preserved by
15        the procurements held under Public Act 99-906 and would
16        cease to exist if the procurements were not held,
17        including the preservation of zero emission
18        facilities. The plan shall also describe in detail how
19        each public interest factor shall be considered and
20        weighted in the bid selection process to ensure that
21        the public interest criteria are applied to the
22        procurement and given full effect.
23            For purposes of developing the plan, the Agency
24        shall consider any reports issued by a State agency,
25        board, or commission under House Resolution 1146 of the
26        98th General Assembly and paragraph (4) of subsection

 

 

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1        (d) of this Section 1-75 of this Act, as well as
2        publicly available analyses and studies performed by
3        or for regional transmission organizations that serve
4        the State and their independent market monitors.
5            Upon publishing of the zero emission standard
6        procurement plan, copies of the plan shall be posted
7        and made publicly available on the Agency's website.
8        All interested parties shall have 10 days following the
9        date of posting to provide comment to the Agency on the
10        plan. All comments shall be posted to the Agency's
11        website. Following the end of the comment period, but
12        no more than 60 days later than June 1, 2017 (the
13        effective date of Public Act 99-906), the Agency shall
14        revise the plan as necessary based on the comments
15        received and file its zero emission standard
16        procurement plan with the Commission.
17            If the Commission determines that the plan will
18        result in the procurement of cost-effective zero
19        emission credits, then the Commission shall, after
20        notice and hearing, but no later than 45 days after the
21        Agency filed the plan, approve the plan or approve with
22        modification. For purposes of this subsection (d-5),
23        "cost effective" means the projected costs of
24        procuring zero emission credits from zero emission
25        facilities do not cause the limit stated in paragraph
26        (2) of this subsection to be exceeded.

 

 

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1            (C-5) As part of the Commission's review and
2        acceptance or rejection of the procurement results,
3        the Commission shall, in its public notice of
4        successful bidders:
5                (i) identify how the winning bids satisfy the
6            public interest criteria described in subparagraph
7            (C) of this paragraph (1) of minimizing carbon
8            dioxide emissions that result from electricity
9            consumed in Illinois and minimizing sulfur
10            dioxide, nitrogen oxide, and particulate matter
11            emissions that adversely affect the citizens of
12            this State;
13                (ii) specifically address how the selection of
14            winning bids takes into account the incremental
15            environmental benefits resulting from the
16            procurement, including any existing environmental
17            benefits that are preserved by the procurements
18            held under Public Act 99-906 and would have ceased
19            to exist if the procurements had not been held,
20            such as the preservation of zero emission
21            facilities;
22                (iii) quantify the environmental benefit of
23            preserving the resources identified in item (ii)
24            of this subparagraph (C-5), including the
25            following:
26                    (aa) the value of avoided greenhouse gas

 

 

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1                emissions measured as the product of the zero
2                emission facilities' output over the contract
3                term multiplied by the U.S. Environmental
4                Protection Agency eGrid subregion carbon
5                dioxide emission rate and the U.S. Interagency
6                Working Group on Social Cost of Carbon's price
7                in the August 2016 Technical Update using a 3%
8                discount rate, adjusted for inflation for each
9                delivery year; and
10                    (bb) the costs of replacement with other
11                zero carbon dioxide resources, including wind
12                and photovoltaic, based upon the simple
13                average of the following:
14                        (I) the price, or if there is more than
15                    one price, the average of the prices, paid
16                    for renewable energy credits from new
17                    utility-scale wind projects in the
18                    procurement events specified in item (i)
19                    of subparagraph (G) of paragraph (1) of
20                    subsection (c) of this Section 1-75 of this
21                    Act; and
22                        (II) the price, or if there is more
23                    than one price, the average of the prices,
24                    paid for renewable energy credits from new
25                    utility-scale solar projects and
26                    brownfield site photovoltaic projects in

 

 

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1                    the procurement events specified in item
2                    (ii) of subparagraph (G) of paragraph (1)
3                    of subsection (c) of this Section 1-75 of
4                    this Act and, after January 1, 2015,
5                    renewable energy credits from photovoltaic
6                    distributed generation projects in
7                    procurement events held under subsection
8                    (c) of this Section 1-75 of this Act.
9            Each utility shall enter into binding contractual
10        arrangements with the winning suppliers.
11            The procurement described in this subsection
12        (d-5), including, but not limited to, the execution of
13        all contracts procured, shall be completed no later
14        than May 10, 2017. Based on the effective date of
15        Public Act 99-906, the Agency and Commission may, as
16        appropriate, modify the various dates and timelines
17        under this subparagraph and subparagraphs (C) and (D)
18        of this paragraph (1). The procurement and plan
19        approval processes required by this subsection (d-5)
20        shall be conducted in conjunction with the procurement
21        and plan approval processes required by subsection (c)
22        of this Section and Section 16-111.5 of the Public
23        Utilities Act, to the extent practicable.
24        Notwithstanding whether a procurement event is
25        conducted under Section 16-111.5 of the Public
26        Utilities Act, the Agency shall immediately initiate a

 

 

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1        procurement process on June 1, 2017 (the effective date
2        of Public Act 99-906).
3            (D) Following the procurement event described in
4        this paragraph (1) and consistent with subparagraph
5        (B) of this paragraph (1), the Agency shall calculate
6        the payments to be made under each contract for the
7        next delivery year based on the market price index for
8        that delivery year. The Agency shall publish the
9        payment calculations no later than May 25, 2017 and
10        every May 25 thereafter.
11            (E) Notwithstanding the requirements of this
12        subsection (d-5), the contracts executed under this
13        subsection (d-5) shall provide that the zero emission
14        facility may, as applicable, suspend or terminate
15        performance under the contracts in the following
16        instances:
17                (i) A zero emission facility shall be excused
18            from its performance under the contract for any
19            cause beyond the control of the resource,
20            including, but not restricted to, acts of God,
21            flood, drought, earthquake, storm, fire,
22            lightning, epidemic, war, riot, civil disturbance
23            or disobedience, labor dispute, labor or material
24            shortage, sabotage, acts of public enemy,
25            explosions, orders, regulations or restrictions
26            imposed by governmental, military, or lawfully

 

 

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1            established civilian authorities, which, in any of
2            the foregoing cases, by exercise of commercially
3            reasonable efforts the zero emission facility
4            could not reasonably have been expected to avoid,
5            and which, by the exercise of commercially
6            reasonable efforts, it has been unable to
7            overcome. In such event, the zero emission
8            facility shall be excused from performance for the
9            duration of the event, including, but not limited
10            to, delivery of zero emission credits, and no
11            payment shall be due to the zero emission facility
12            during the duration of the event.
13                (ii) A zero emission facility shall be
14            permitted to terminate the contract if legislation
15            is enacted into law by the General Assembly that
16            imposes or authorizes a new tax, special
17            assessment, or fee on the generation of
18            electricity, the ownership or leasehold of a
19            generating unit, or the privilege or occupation of
20            such generation, ownership, or leasehold of
21            generation units by a zero emission facility.
22            However, the provisions of this item (ii) do not
23            apply to any generally applicable tax, special
24            assessment or fee, or requirements imposed by
25            federal law.
26                (iii) A zero emission facility shall be

 

 

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1            permitted to terminate the contract in the event
2            that the resource requires capital expenditures in
3            excess of $40,000,000 that were neither known nor
4            reasonably foreseeable at the time it executed the
5            contract and that a prudent owner or operator of
6            such resource would not undertake.
7                (iv) A zero emission facility shall be
8            permitted to terminate the contract in the event
9            the Nuclear Regulatory Commission terminates the
10            resource's license.
11            (F) If the zero emission facility elects to
12        terminate a contract under this subparagraph (E) , of
13        this paragraph (1), then the Commission shall reopen
14        the docket in which the Commission approved the zero
15        emission standard procurement plan under subparagraph
16        (C) of this paragraph (1) and, after notice and
17        hearing, enter an order acknowledging the contract
18        termination election if such termination is consistent
19        with the provisions of this subsection (d-5).
20        (2) For purposes of this subsection (d-5), the amount
21    paid per kilowatthour means the total amount paid for
22    electric service expressed on a per kilowatthour basis. For
23    purposes of this subsection (d-5), the total amount paid
24    for electric service includes, without limitation, amounts
25    paid for supply, transmission, distribution, surcharges,
26    and add-on taxes.

 

 

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1        Notwithstanding the requirements of this subsection
2    (d-5), the contracts executed under this subsection (d-5)
3    shall provide that the total of zero emission credits
4    procured under a procurement plan shall be subject to the
5    limitations of this paragraph (2). For each delivery year,
6    the contractual volume receiving payments in such year
7    shall be reduced for all retail customers based on the
8    amount necessary to limit the net increase that delivery
9    year to the costs of those credits included in the amounts
10    paid by eligible retail customers in connection with
11    electric service to no more than 1.65% of the amount paid
12    per kilowatthour by eligible retail customers during the
13    year ending May 31, 2009. The result of this computation
14    shall apply to and reduce the procurement for all retail
15    customers, and all those customers shall pay the same
16    single, uniform cents per kilowatthour charge under
17    subsection (k) of Section 16-108 of the Public Utilities
18    Act. To arrive at a maximum dollar amount of zero emission
19    credits to be paid for the particular delivery year, the
20    resulting per kilowatthour amount shall be applied to the
21    actual amount of kilowatthours of electricity delivered by
22    the electric utility in the delivery year immediately prior
23    to the procurement, to all retail customers in its service
24    territory. Unpaid contractual volume for any delivery year
25    shall be paid in any subsequent delivery year in which such
26    payments can be made without exceeding the amount specified

 

 

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1    in this paragraph (2). The calculations required by this
2    paragraph (2) shall be made only once for each procurement
3    plan year. Once the determination as to the amount of zero
4    emission credits to be paid is made based on the
5    calculations set forth in this paragraph (2), no subsequent
6    rate impact determinations shall be made and no adjustments
7    to those contract amounts shall be allowed. All costs
8    incurred under those contracts and in implementing this
9    subsection (d-5) shall be recovered by the electric utility
10    as provided in this Section.
11        No later than June 30, 2019, the Commission shall
12    review the limitation on the amount of zero emission
13    credits procured under this subsection (d-5) and report to
14    the General Assembly its findings as to whether that
15    limitation unduly constrains the procurement of
16    cost-effective zero emission credits.
17        (3) Six years after the execution of a contract under
18    this subsection (d-5), the Agency shall determine whether
19    the actual zero emission credit payments received by the
20    supplier over the 6-year period exceed the Average ZEC
21    Payment. In addition, at the end of the term of a contract
22    executed under this subsection (d-5), or at the time, if
23    any, a zero emission facility's contract is terminated
24    under subparagraph (E) of paragraph (1) of this subsection
25    (d-5), then the Agency shall determine whether the actual
26    zero emission credit payments received by the supplier over

 

 

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1    the term of the contract exceed the Average ZEC Payment,
2    after taking into account any amounts previously credited
3    back to the utility under this paragraph (3). If the Agency
4    determines that the actual zero emission credit payments
5    received by the supplier over the relevant period exceed
6    the Average ZEC Payment, then the supplier shall credit the
7    difference back to the utility. The amount of the credit
8    shall be remitted to the applicable electric utility no
9    later than 120 days after the Agency's determination, which
10    the utility shall reflect as a credit on its retail
11    customer bills as soon as practicable; however, the credit
12    remitted to the utility shall not exceed the total amount
13    of payments received by the facility under its contract.
14        For purposes of this Section, the Average ZEC Payment
15    shall be calculated by multiplying the quantity of zero
16    emission credits delivered under the contract times the
17    average contract price. The average contract price shall be
18    determined by subtracting the amount calculated under
19    subparagraph (B) of this paragraph (3) from the amount
20    calculated under subparagraph (A) of this paragraph (3), as
21    follows:
22            (A) The average of the Social Cost of Carbon, as
23        defined in subparagraph (B) of paragraph (1) of this
24        subsection (d-5), during the term of the contract.
25            (B) The average of the market price indices, as
26        defined in subparagraph (B) of paragraph (1) of this

 

 

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1        subsection (d-5), during the term of the contract,
2        minus the baseline market price index, as defined in
3        subparagraph (B) of paragraph (1) of this subsection
4        (d-5).
5        If the subtraction yields a negative number, then the
6    Average ZEC Payment shall be zero.
7        (4) Cost-effective zero emission credits procured from
8    zero emission facilities shall satisfy the applicable
9    definitions set forth in Section 1-10 of this Act.
10        (5) The electric utility shall retire all zero emission
11    credits used to comply with the requirements of this
12    subsection (d-5).
13        (6) Electric utilities shall be entitled to recover all
14    of the costs associated with the procurement of zero
15    emission credits through an automatic adjustment clause
16    tariff in accordance with subsection (k) and (m) of Section
17    16-108 of the Public Utilities Act, and the contracts
18    executed under this subsection (d-5) shall provide that the
19    utilities' payment obligations under such contracts shall
20    be reduced if an adjustment is required under subsection
21    (m) of Section 16-108 of the Public Utilities Act.
22        (7) This subsection (d-5) shall become inoperative on
23    January 1, 2028.
24    (e) The draft procurement plans are subject to public
25comment, as required by Section 16-111.5 of the Public
26Utilities Act.

 

 

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1    (f) The Agency shall submit the final procurement plan to
2the Commission. The Agency shall revise a procurement plan if
3the Commission determines that it does not meet the standards
4set forth in Section 16-111.5 of the Public Utilities Act.
5    (g) The Agency shall assess fees to each affected utility
6to recover the costs incurred in preparation of the annual
7procurement plan for the utility.
8    (h) The Agency shall assess fees to each bidder to recover
9the costs incurred in connection with a competitive procurement
10process.
11    (i) A renewable energy credit, carbon emission credit, or
12zero emission credit can only be used once to comply with a
13single portfolio or other standard as set forth in subsection
14(c), subsection (d), or subsection (d-5) of this Section,
15respectively. A renewable energy credit, carbon emission
16credit, or zero emission credit cannot be used to satisfy the
17requirements of more than one standard. If more than one type
18of credit is issued for the same megawatt hour of energy, only
19one credit can be used to satisfy the requirements of a single
20standard. After such use, the credit must be retired together
21with any other credits issued for the same megawatt hour of
22energy.
23(Source: P.A. 99-536, eff. 7-8-16; 99-906, eff. 6-1-17;
24100-863, eff. 8-14-18; revised 10-18-18.)