SB2123sam002 101ST GENERAL ASSEMBLY

Sen. Robert Peters

Filed: 4/5/2019

10100SB2123sam002 LRB101 09746 RJF 59296 a

AMENDMENT TO SENATE BILL 2123

AMENDMENT NO. ______. Amend Senate Bill 2123 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Equitable Energy Financing Act.

Section 3. Applicability. This Act shall apply to utilities as defined in this Act.

Section 5. Findings and purpose. The General Assembly finds that Illinois homes and businesses can contribute to the creation of a clean energy economy, conservation of natural resources, and reliability of the electricity grid through the installation of cost-effective renewable energy generation, energy efficiency, and energy storage systems. The General Assembly further finds that a large portion of Illinois residents and businesses that would benefit from the installation of energy efficiency, energy storage systems, and renewable energy generation systems are unable to purchase systems due to capital or credit barriers. The purpose of this Act is to implement much needed modifications to the State's regulation of utilities that the General Assembly believes will enable many more Illinoisans to access the health, environmental, and financial benefits of new clean energy technology.

Section 10. Definitions. As used in this Act:

"Commission" means to the Illinois Commerce Commission.

"Energy project" means a renewable energy generation systems, solar projects, energy efficiency upgrades, energy storage systems, or any combination thereof.

"Program" means the Equitable Energy Financing Program established under this Act.

"Utility" means public utilities providing electric service to customers as provided under the Public Utilities Act, including Commonwealth Edison and Ameren.

Section 15. Equitable Energy Financing Program.

(a) The Illinois Commerce Commission shall establish a Program for all electric utilities in this State which permits customers to finance the construction of energy projects through an optional tariff payable directly through their utility bill, modeled after the PAYS or Pay as You Save program design. The Program model shall offer to make investments in energy projects to customer properties with low-cost capital and use an opt-in tariff to recover the costs. This Program shall be referred to as the Equitable Energy Financing Program. The Program shall be designed to provide customers with financial savings if they choose to participate. The Program will allow residential electric utility customers that own the property, or renters that have permission of the owner, for which they subscribe to utility service, to purchase an energy project. The Program will ensure the following:

(1) eligible projects do not require up-front payments;

(2) eligible projects have an estimated life cycle savings that exceeds the cost of the project, subject to PAYS Program requirements;

(3) participants will finance the projects by paying for the project through an optional tariff directly through the participant's electricity bill, allowing participants to invest in energy projects without traditional loans;

(4) accessibility by lower income residents and environmental justice community residents; and

(5) administration is in coordination with the energy efficiency on-bill financing program established in the Public Utilities Act to maximize access and financial savings by residents.

(b) The Program shall be established as follows:

(1) The Program shall begin for the first year as a pilot program. During the first year of operation, each utility is required to provide financing for energy projects at a total project cost of $20,000,000 annually.

(2) Beginning in the second year, each utility is required to provide systems for a total project cost of $40,000,000 annually.

(3) Beginning in the third year of programming, each utility shall be required to provide as many systems as customers demand, subject to available capital provided by the utility, State, or other lenders.

(4) The Commission shall establish Program guidelines with the anticipated schedule of Program availability.

(c) In the design of the Equitable Energy Financing Program, the Commission shall:

(1) Within 90 days after the effective date of this Act, convene a workshop process during which interested participants may discuss issues and submit comments related to the Program.

(2) Establish PAYS program guidelines that electric utilities will abide by when designing their plan to participate in the Program. Program guidelines established by the Commission shall include the following elements:

(A) Capital funds. The Commission shall establish conditions under which utilities secure capital to fund the energy projects. The Commission may allow utilities to raise capital independently, work with third party lenders to secure the capital for participants, or a combination thereof. Any process the Commission approves must use a market mechanism to identify the least costly sources of capital funds so as to pass on maximum savings to participants. The State of Illinois may also choose to provide capital for this Program.

(B) Customer protections. Customer protection guidelines should be designed based on the principles established in Section 20, subject to PAYS program design requirements..

(C) Energy project vendors. The Commission shall establish conditions by which utilities may connect Program participants to energy project vendors. In setting conditions for connection, the Commission may prioritize vendors that have a history of good relations with the State, including vendors which have hired participants from State-created job training programs.

(D) Financial savings guarantee. The guidelines established by the Commission shall include a reasonable guarantee of anticipated financial savings by Program participants.

(d) Within 120 days after the Commission releases the Program conditions established under this Section, each utility subject to the requirements of this Section shall submit an informational filing to the Commission that describes its plan for implementing the provisions of this Act. If the Commission finds that the submission does not properly comply with the statutory or regulatory requirements of the Program, the Commission may require that the utility make modifications to their filing.

(e) An independent evaluation of the Program shall be conducted after 2 years of the Program's operation. The Illinois Commerce Commission shall convene an advisory council of stakeholders, including representation of low income and environment justice Community members, to make recommendations in response to the findings of the independent evaluation.

(f) Participation in the Program by utilities shall be mandatory from Program launch through January 1, 2031. After January 1, 2031, participation in the Program by utilities is voluntary.

Section 20. Customer protections; cost-effectiveness.

(a) The Equitable Energy Financing Program shall be designed using PAYS program guidelines to be cost-effective for customers. Only projects that are deemed to be cost-effective and can be reasonably expected to ensure customer savings are eligible for funding through the Program.

(b) Eligible customers must be: (1) property renters with permission of the property owner; or (2) property owners.

(c) The calculation of cost-effectiveness must be conducted by an objective process established by the Illinois Commerce Commission. Except as otherwise provided under this subsection (c), the calculation of cost-effectiveness shall be based upon PAYS program requirements.

Calculations of cost effectiveness based upon utility provider shall be as follows:

(1) For Commonwealth Edison, the cost-effectiveness calculation is not required to include financial savings from sources other than electricity. However, if projects provide a financial benefit beyond electricity savings, such as an expected natural gas use reduction, utilities and vendors are permitted to include this in the cost-benefit calculation.

(2) For Ameren, the cost-effectiveness calculation must include financial savings from both electricity and natural gas reduction.

A project shall be considered cost-effective only if the projected customer reduces his or her payment amount by at least 5% over his or her projected costs without the energy project. The Commission may establish guidelines by which this required savings is measured.

(d) The Equitable Energy Financing Program should be modeled after the PAYS, or Pay As You Save, style system by which Program participants finance energy projects using the savings that the energy project creates with an on-bill financing program. Eligible projects shall not:

(1) create personal debt for the customer;

(2) result in a lien in the event of nonpayment by customers; or

(3) require customers to pay for defective energy projects.

(e) Any energy project that is defective or damaged due to no fault of the participant must be either replaced or repaired with parts that meet industry standards. The Commission may establish, increase, or replace the requirements imposed by this subsection (e). The Illinois Commerce Commission may determine that this responsibility is best handled by participating project vendors in the form of insurance, contractual guarantees, or other mechanisms, and issue rules detailing this requirement.

(f) In the event of nonpayment, the remaining balance due to pay off the system shall remain with the utility meter. The Commission shall otherwise establish conditions in the event of nonpayment by customers, subject to the requirements of this subsection (f).

Section 25. Utility participation in the Program.

(a) All electric utilities in this State shall be required to participate in the Program established under this Act. Utilities shall not discriminate against customers on the basis of their energy supplier.

(b) If the demand by utility customers exceeds the Program capital supply in a given year, utilities shall ensure 50% of participants are:

(1) members of households that make 150% or less of area median income; or

(2) residents of environmental justice communities.

(c) Utilities shall endeavor to inform customers about the availability of the Program, their potential eligibility for participation in the Program, as well as to whether they are likely to save money on the basis of an estimate conducted using variables consistent with the Program that the utility has at its disposal. The Commission may establish guidelines by which utilities must abide by this directive.

(d) Subject to Commission specifications established in Section 15, each utility shall work with certified project vendors selected under a request for proposal process to establish the terms and processes under which a participant can purchase eligible renewable energy generation and energy storage systems using the financing obtained from the lender through a program designed to fit the Equitable Energy Financing Program model. The certified project vendor shall explain and offer the approved financing packaging to customers and shall assist customers in applying for financing through the Equitable Energy Financing Program. As part of the process, vendors shall also provide participants with information about any other relevant incentives that may be available.

(e) An electric utility shall recover all of the prudently incurred costs of offering a program approved by the Commission under this Section.

(f) The Illinois Commerce Commission shall adopt all rules necessary for the administration of this Section.

Section 99. Effective date. This Act takes effect upon becoming law.".