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Public Act 097-0841


 

Public Act 0841 97TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 097-0841
 
SB3453 EnrolledLRB097 18954 CEL 64192 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The State Finance Act is amended by adding
Sections 5.811 and 6z-93 as follows:
 
    (30 ILCS 105/5.811 new)
    Sec. 5.811. The Energy Efficiency Portfolio Standards
Fund.
 
    (30 ILCS 105/6z-93 new)
    Sec. 6z-93. Energy Efficiency Portfolio Standards Fund.
    (a) The Energy Efficiency Portfolio Standards Fund is
created as a special fund in the State treasury. All moneys
received by the Department of Commerce and Economic Opportunity
under Sections 8-103 and 8-104 of the Public Utilities Act
shall be deposited into the Energy Efficiency Portfolio
Standards Fund. Subject to appropriation, moneys in the Energy
Efficiency Portfolio Standards Fund may be used only for the
purposes authorized by Sections 8-103 and 8-104 of the Public
Utilities Act.
    (b) As soon as possible after June 1, 2012, and in no event
later than July 31, 2012, the Director of Commerce and Economic
Opportunity shall certify the balance in the DCEO Energy
Projects Fund, less any federal moneys and less any amounts
obligated, and the State Comptroller shall transfer such amount
from the DCEO Energy Projects Fund to the Energy Efficiency
Portfolio Standards Fund.
 
    Section 10. The Public Utilities Act is amended by changing
Sections 8-103 and 8-104 as follows:
 
    (220 ILCS 5/8-103)
    Sec. 8-103. Energy efficiency and demand-response
measures.
    (a) It is the policy of the State that electric utilities
are required to use cost-effective energy efficiency and
demand-response measures to reduce delivery load. Requiring
investment in cost-effective energy efficiency and
demand-response measures will reduce direct and indirect costs
to consumers by decreasing environmental impacts and by
avoiding or delaying the need for new generation, transmission,
and distribution infrastructure. It serves the public interest
to allow electric utilities to recover costs for reasonably and
prudently incurred expenses for energy efficiency and
demand-response measures. As used in this Section,
"cost-effective" means that the measures satisfy the total
resource cost test. The low-income measures described in
subsection (f)(4) of this Section shall not be required to meet
the total resource cost test. For purposes of this Section, the
terms "energy-efficiency", "demand-response", "electric
utility", and "total resource cost test" shall have the
meanings set forth in the Illinois Power Agency Act. For
purposes of this Section, the amount per kilowatthour means the
total amount paid for electric service expressed on a per
kilowatthour basis. For purposes of this Section, the total
amount paid for electric service includes without limitation
estimated amounts paid for supply, transmission, distribution,
surcharges, and add-on-taxes.
    (b) Electric utilities shall implement cost-effective
energy efficiency measures to meet the following incremental
annual energy savings goals:
        (1) 0.2% of energy delivered in the year commencing
    June 1, 2008;
        (2) 0.4% of energy delivered in the year commencing
    June 1, 2009;
        (3) 0.6% of energy delivered in the year commencing
    June 1, 2010;
        (4) 0.8% of energy delivered in the year commencing
    June 1, 2011;
        (5) 1% of energy delivered in the year commencing June
    1, 2012;
        (6) 1.4% of energy delivered in the year commencing
    June 1, 2013;
        (7) 1.8% of energy delivered in the year commencing
    June 1, 2014; and
        (8) 2% of energy delivered in the year commencing June
    1, 2015 and each year thereafter.
    (c) Electric utilities shall implement cost-effective
demand-response measures to reduce peak demand by 0.1% over the
prior year for eligible retail customers, as defined in Section
16-111.5 of this Act, and for customers that elect hourly
service from the utility pursuant to Section 16-107 of this
Act, provided those customers have not been declared
competitive. This requirement commences June 1, 2008 and
continues for 10 years.
    (d) Notwithstanding the requirements of subsections (b)
and (c) of this Section, an electric utility shall reduce the
amount of energy efficiency and demand-response measures
implemented in any single year by an amount necessary to limit
the estimated average increase in the amounts paid by retail
customers in connection with electric service due to the cost
of those measures to:
        (1) in 2008, no more than 0.5% of the amount paid per
    kilowatthour by those customers during the year ending May
    31, 2007;
        (2) in 2009, the greater of an additional 0.5% of the
    amount paid per kilowatthour by those customers during the
    year ending May 31, 2008 or 1% of the amount paid per
    kilowatthour by those customers during the year ending May
    31, 2007;
        (3) in 2010, the greater of an additional 0.5% of the
    amount paid per kilowatthour by those customers during the
    year ending May 31, 2009 or 1.5% of the amount paid per
    kilowatthour by those customers during the year ending May
    31, 2007;
        (4) in 2011, the greater of an additional 0.5% of the
    amount paid per kilowatthour by those customers during the
    year ending May 31, 2010 or 2% of the amount paid per
    kilowatthour by those customers during the year ending May
    31, 2007; and
        (5) thereafter, the amount of energy efficiency and
    demand-response measures implemented for any single year
    shall be reduced by an amount necessary to limit the
    estimated average net increase due to the cost of these
    measures included in the amounts paid by eligible retail
    customers in connection with electric service to no more
    than the greater of 2.015% of the amount paid per
    kilowatthour by those customers during the year ending May
    31, 2007 or the incremental amount per kilowatthour paid
    for these measures in 2011.
    No later than June 30, 2011, the Commission shall review
the limitation on the amount of energy efficiency and
demand-response measures implemented pursuant to this Section
and report to the General Assembly its findings as to whether
that limitation unduly constrains the procurement of energy
efficiency and demand-response measures.
    (e) Electric utilities shall be responsible for overseeing
the design, development, and filing of energy efficiency and
demand-response plans with the Commission. Electric utilities
shall implement 100% of the demand-response measures in the
plans. Electric utilities shall implement 75% of the energy
efficiency measures approved by the Commission, and may, as
part of that implementation, outsource various aspects of
program development and implementation. The remaining 25% of
those energy efficiency measures approved by the Commission
shall be implemented by the Department of Commerce and Economic
Opportunity, and must be designed in conjunction with the
utility and the filing process. The Department may outsource
development and implementation of energy efficiency measures.
A minimum of 10% of the entire portfolio of cost-effective
energy efficiency measures shall be procured from units of
local government, municipal corporations, school districts,
and community college districts. The Department shall
coordinate the implementation of these measures.
    The apportionment of the dollars to cover the costs to
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and the contracts to the utility. The Department is authorized
to adopt any rules necessary and prescribe procedures in order
to ensure compliance by applicants in carrying out the purposes
of rebate agreements for energy efficiency measures
implemented by the Department made under this Section.
    The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency and demand-response measures that the utility
implements.
    A utility providing approved energy efficiency and
demand-response measures in the State shall be permitted to
recover costs of those measures through an automatic adjustment
clause tariff filed with and approved by the Commission. The
tariff shall be established outside the context of a general
rate case. Each year the Commission shall initiate a review to
reconcile any amounts collected with the actual costs and to
determine the required adjustment to the annual tariff factor
to match annual expenditures.
    Each utility shall include, in its recovery of costs, the
costs estimated for both the utility's and the Department's
implementation of energy efficiency and demand-response
measures. Costs collected by the utility for measures
implemented by the Department shall be submitted to the
Department pursuant to Section 605-323 of the Civil
Administrative Code of Illinois, shall be deposited into the
Energy Efficiency Portfolio Standards Fund, and shall be used
by the Department solely for the purpose of implementing these
measures. A utility shall not be required to advance any moneys
to the Department but only to forward such funds as it has
collected. The Department shall report to the Commission on an
annual basis regarding the costs actually incurred by the
Department in the implementation of the measures. Any changes
to the costs of energy efficiency measures as a result of plan
modifications shall be appropriately reflected in amounts
recovered by the utility and turned over to the Department.
    The portfolio of measures, administered by both the
utilities and the Department, shall, in combination, be
designed to achieve the annual savings targets described in
subsections (b) and (c) of this Section, as modified by
subsection (d) of this Section.
    The utility and the Department shall agree upon a
reasonable portfolio of measures and determine the measurable
corresponding percentage of the savings goals associated with
measures implemented by the utility or Department.
    No utility shall be assessed a penalty under subsection (f)
of this Section for failure to make a timely filing if that
failure is the result of a lack of agreement with the
Department with respect to the allocation of responsibilities
or related costs or target assignments. In that case, the
Department and the utility shall file their respective plans
with the Commission and the Commission shall determine an
appropriate division of measures and programs that meets the
requirements of this Section.
    If the Department is unable to meet incremental annual
performance goals for the portion of the portfolio implemented
by the Department, then the utility and the Department shall
jointly submit a modified filing to the Commission explaining
the performance shortfall and recommending an appropriate
course going forward, including any program modifications that
may be appropriate in light of the evaluations conducted under
item (7) of subsection (f) of this Section. In this case, the
utility obligation to collect the Department's costs and turn
over those funds to the Department under this subsection (e)
shall continue only if the Commission approves the
modifications to the plan proposed by the Department.
    (f) No later than November 15, 2007, each electric utility
shall file an energy efficiency and demand-response plan with
the Commission to meet the energy efficiency and
demand-response standards for 2008 through 2010. No later than
October 1, 2010, each electric utility shall file an energy
efficiency and demand-response plan with the Commission to meet
the energy efficiency and demand-response standards for 2011
through 2013. Every 3 years thereafter, each electric utility
shall file, no later than September 1, an energy efficiency and
demand-response plan with the Commission. If a utility does not
file such a plan by September 1 of an applicable year, it shall
face a penalty of $100,000 per day until the plan is filed.
Each utility's plan shall set forth the utility's proposals to
meet the utility's portion of the energy efficiency standards
identified in subsection (b) and the demand-response standards
identified in subsection (c) of this Section as modified by
subsections (d) and (e), taking into account the unique
circumstances of the utility's service territory. The
Commission shall seek public comment on the utility's plan and
shall issue an order approving or disapproving each plan within
5 months after its submission. If the Commission disapproves a
plan, the Commission shall, within 30 days, describe in detail
the reasons for the disapproval and describe a path by which
the utility may file a revised draft of the plan to address the
Commission's concerns satisfactorily. If the utility does not
refile with the Commission within 60 days, the utility shall be
subject to penalties at a rate of $100,000 per day until the
plan is filed. This process shall continue, and penalties shall
accrue, until the utility has successfully filed a portfolio of
energy efficiency and demand-response measures. Penalties
shall be deposited into the Energy Efficiency Trust Fund. In
submitting proposed energy efficiency and demand-response
plans and funding levels to meet the savings goals adopted by
this Act the utility shall:
        (1) Demonstrate that its proposed energy efficiency
    and demand-response measures will achieve the requirements
    that are identified in subsections (b) and (c) of this
    Section, as modified by subsections (d) and (e).
        (2) Present specific proposals to implement new
    building and appliance standards that have been placed into
    effect.
        (3) Present estimates of the total amount paid for
    electric service expressed on a per kilowatthour basis
    associated with the proposed portfolio of measures
    designed to meet the requirements that are identified in
    subsections (b) and (c) of this Section, as modified by
    subsections (d) and (e).
        (4) Coordinate with the Department to present a
    portfolio of energy efficiency measures proportionate to
    the share of total annual utility revenues in Illinois from
    households at or below 150% of the poverty level. The
    energy efficiency programs shall be targeted to households
    with incomes at or below 80% of area median income.
        (5) Demonstrate that its overall portfolio of energy
    efficiency and demand-response measures, not including
    programs covered by item (4) of this subsection (f), are
    cost-effective using the total resource cost test and
    represent a diverse cross-section of opportunities for
    customers of all rate classes to participate in the
    programs.
        (6) Include a proposed cost-recovery tariff mechanism
    to fund the proposed energy efficiency and demand-response
    measures and to ensure the recovery of the prudently and
    reasonably incurred costs of Commission-approved programs.
        (7) Provide for an annual independent evaluation of the
    performance of the cost-effectiveness of the utility's
    portfolio of measures and the Department's portfolio of
    measures, as well as a full review of the 3-year results of
    the broader net program impacts and, to the extent
    practical, for adjustment of the measures on a
    going-forward basis as a result of the evaluations. The
    resources dedicated to evaluation shall not exceed 3% of
    portfolio resources in any given year.
    (g) No more than 3% of energy efficiency and
demand-response program revenue may be allocated for
demonstration of breakthrough equipment and devices.
    (h) This Section does not apply to an electric utility that
on December 31, 2005 provided electric service to fewer than
100,000 customers in Illinois.
    (i) If, after 2 years, an electric utility fails to meet
the efficiency standard specified in subsection (b) of this
Section, as modified by subsections (d) and (e), it shall make
a contribution to the Low-Income Home Energy Assistance
Program. The combined total liability for failure to meet the
goal shall be $1,000,000, which shall be assessed as follows: a
large electric utility shall pay $665,000, and a medium
electric utility shall pay $335,000. If, after 3 years, an
electric utility fails to meet the efficiency standard
specified in subsection (b) of this Section, as modified by
subsections (d) and (e), it shall make a contribution to the
Low-Income Home Energy Assistance Program. The combined total
liability for failure to meet the goal shall be $1,000,000,
which shall be assessed as follows: a large electric utility
shall pay $665,000, and a medium electric utility shall pay
$335,000. In addition, the responsibility for implementing the
energy efficiency measures of the utility making the payment
shall be transferred to the Illinois Power Agency if, after 3
years, or in any subsequent 3-year period, the utility fails to
meet the efficiency standard specified in subsection (b) of
this Section, as modified by subsections (d) and (e). The
Agency shall implement a competitive procurement program to
procure resources necessary to meet the standards specified in
this Section as modified by subsections (d) and (e), with costs
for those resources to be recovered in the same manner as
products purchased through the procurement plan as provided in
Section 16-111.5. The Director shall implement this
requirement in connection with the procurement plan as provided
in Section 16-111.5.
    For purposes of this Section, (i) a "large electric
utility" is an electric utility that, on December 31, 2005,
served more than 2,000,000 electric customers in Illinois; (ii)
a "medium electric utility" is an electric utility that, on
December 31, 2005, served 2,000,000 or fewer but more than
100,000 electric customers in Illinois; and (iii) Illinois
electric utilities that are affiliated by virtue of a common
parent company are considered a single electric utility.
    (j) If, after 3 years, or any subsequent 3-year period, the
Department fails to implement the Department's share of energy
efficiency measures required by the standards in subsection
(b), then the Illinois Power Agency may assume responsibility
for and control of the Department's share of the required
energy efficiency measures. The Agency shall implement a
competitive procurement program to procure resources necessary
to meet the standards specified in this Section, with the costs
of these resources to be recovered in the same manner as
provided for the Department in this Section.
    (k) No electric utility shall be deemed to have failed to
meet the energy efficiency standards to the extent any such
failure is due to a failure of the Department or the Agency.
(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
96-1000, eff. 7-2-10; 97-616, eff. 10-26-11.)
 
    (220 ILCS 5/8-104)
    Sec. 8-104. Natural gas energy efficiency programs.
    (a) It is the policy of the State that natural gas
utilities and the Department of Commerce and Economic
Opportunity are required to use cost-effective energy
efficiency to reduce direct and indirect costs to consumers. It
serves the public interest to allow natural gas utilities to
recover costs for reasonably and prudently incurred expenses
for cost-effective energy efficiency measures.
    (b) For purposes of this Section, "energy efficiency" means
measures that reduce the amount of energy required to achieve a
given end use and "cost-effective" means that the measures
satisfy the total resource cost test which, for purposes of
this Section, means a standard that is met if, for an
investment in energy efficiency, the benefit-cost ratio is
greater than one. The benefit-cost ratio is the ratio of the
net present value of the total benefits of the measures to the
net present value of the total costs as calculated over the
lifetime of the measures. The total resource cost test compares
the sum of avoided natural gas utility costs, representing the
benefits that accrue to the system and the participant in the
delivery of those efficiency measures, as well as other
quantifiable societal benefits, including avoided electric
utility costs, to the sum of all incremental costs of end use
measures (including both utility and participant
contributions), plus costs to administer, deliver, and
evaluate each demand-side measure, to quantify the net savings
obtained by substituting demand-side measures for supply
resources. In calculating avoided costs, reasonable estimates
shall be included for financial costs likely to be imposed by
future regulation of emissions of greenhouse gases. The
low-income programs described in item (4) of subsection (f) of
this Section shall not be required to meet the total resource
cost test.
    (c) Natural gas utilities shall implement cost-effective
energy efficiency measures to meet at least the following
natural gas savings requirements, which shall be based upon the
total amount of gas delivered to retail customers, other than
the customers described in subsection (m) of this Section,
during calendar year 2009 multiplied by the applicable
percentage. Natural gas utilities may comply with this Section
by meeting the annual incremental savings goal in the
applicable year or by showing that total savings associated
with measures implemented after May 31, 2011 were equal to the
sum of each annual incremental savings requirement from May 31,
2011 through the end of the applicable year:
        (1) 0.2% by May 31, 2012;
        (2) an additional 0.4% by May 31, 2013, increasing
    total savings to .6%;
        (3) an additional 0.6% by May 31, 2014, increasing
    total savings to 1.2%;
        (4) an additional 0.8% by May 31, 2015, increasing
    total savings to 2.0%;
        (5) an additional 1% by May 31, 2016, increasing total
    savings to 3.0%;
        (6) an additional 1.2% by May 31, 2017, increasing
    total savings to 4.2%;
        (7) an additional 1.4% by May 31, 2018, increasing
    total savings to 5.6%;
        (8) an additional 1.5% by May 31, 2019, increasing
    total savings to 7.1%; and
        (9) an additional 1.5% in each 12-month period
    thereafter.
    (d) Notwithstanding the requirements of subsection (c) of
this Section, a natural gas utility shall limit the amount of
energy efficiency implemented in any 3-year reporting period
established by subsection (f) of Section 8-104 of this Act, by
an amount necessary to limit the estimated average increase in
the amounts paid by retail customers in connection with natural
gas service to no more than 2% in the applicable 3-year
reporting period. The energy savings requirements in
subsection (c) of this Section may be reduced by the Commission
for the subject plan, if the utility demonstrates by
substantial evidence that it is highly unlikely that the
requirements could be achieved without exceeding the
applicable spending limits in any 3-year reporting period. No
later than September 1, 2013, the Commission shall review the
limitation on the amount of energy efficiency measures
implemented pursuant to this Section and report to the General
Assembly, in the report required by subsection (k) of this
Section, its findings as to whether that limitation unduly
constrains the procurement of energy efficiency measures.
    (e) Natural gas utilities shall be responsible for
overseeing the design, development, and filing of their
efficiency plans with the Commission. The utility shall utilize
75% of the available funding associated with energy efficiency
programs approved by the Commission, and may outsource various
aspects of program development and implementation. The
remaining 25% of available funding shall be used by the
Department of Commerce and Economic Opportunity to implement
energy efficiency measures that achieve no less than 20% of the
requirements of subsection (c) of this Section. Such measures
shall be designed in conjunction with the utility and approved
by the Commission. The Department may outsource development and
implementation of energy efficiency measures. A minimum of 10%
of the entire portfolio of cost-effective energy efficiency
measures shall be procured from local government, municipal
corporations, school districts, and community college
districts. Five percent of the entire portfolio of
cost-effective energy efficiency measures may be granted to
local government and municipal corporations for market
transformation initiatives. The Department shall coordinate
the implementation of these measures and shall integrate
delivery of natural gas efficiency programs with electric
efficiency programs delivered pursuant to Section 8-103 of this
Act, unless the Department can show that integration is not
feasible.
    The apportionment of the dollars to cover the costs to
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and the contracts to the utility. The Department is authorized
to adopt any rules necessary and prescribe procedures in order
to ensure compliance by applicants in carrying out the purposes
of rebate agreements for energy efficiency measures
implemented by the Department made under this Section.
    The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency measures that the utility implements.
    A utility providing approved energy efficiency measures in
this State shall be permitted to recover costs of those
measures through an automatic adjustment clause tariff filed
with and approved by the Commission. The tariff shall be
established outside the context of a general rate case and
shall be applicable to the utility's customers other than the
customers described in subsection (m) of this Section. Each
year the Commission shall initiate a review to reconcile any
amounts collected with the actual costs and to determine the
required adjustment to the annual tariff factor to match annual
expenditures.
    Each utility shall include, in its recovery of costs, the
costs estimated for both the utility's and the Department's
implementation of energy efficiency measures. Costs collected
by the utility for measures implemented by the Department shall
be submitted to the Department pursuant to Section 605-323 of
the Civil Administrative Code of Illinois, shall be deposited
into the Energy Efficiency Portfolio Standards Fund, and shall
be used by the Department solely for the purpose of
implementing these measures. A utility shall not be required to
advance any moneys to the Department but only to forward such
funds as it has collected. The Department shall report to the
Commission on an annual basis regarding the costs actually
incurred by the Department in the implementation of the
measures. Any changes to the costs of energy efficiency
measures as a result of plan modifications shall be
appropriately reflected in amounts recovered by the utility and
turned over to the Department.
    The portfolio of measures, administered by both the
utilities and the Department, shall, in combination, be
designed to achieve the annual energy savings requirements set
forth in subsection (c) of this Section, as modified by
subsection (d) of this Section.
    The utility and the Department shall agree upon a
reasonable portfolio of measures and determine the measurable
corresponding percentage of the savings goals associated with
measures implemented by the Department.
    No utility shall be assessed a penalty under subsection (f)
of this Section for failure to make a timely filing if that
failure is the result of a lack of agreement with the
Department with respect to the allocation of responsibilities
or related costs or target assignments. In that case, the
Department and the utility shall file their respective plans
with the Commission and the Commission shall determine an
appropriate division of measures and programs that meets the
requirements of this Section.
    If the Department is unable to meet performance
requirements for the portion of the portfolio implemented by
the Department, then the utility and the Department shall
jointly submit a modified filing to the Commission explaining
the performance shortfall and recommending an appropriate
course going forward, including any program modifications that
may be appropriate in light of the evaluations conducted under
item (8) of subsection (f) of this Section. In this case, the
utility obligation to collect the Department's costs and turn
over those funds to the Department under this subsection (e)
shall continue only if the Commission approves the
modifications to the plan proposed by the Department.
    (f) No later than October 1, 2010, each gas utility shall
file an energy efficiency plan with the Commission to meet the
energy efficiency standards through May 31, 2014. Every 3 years
thereafter, each utility shall file, no later than October 1,
an energy efficiency plan with the Commission. If a utility
does not file such a plan by October 1 of the applicable year,
then it shall face a penalty of $100,000 per day until the plan
is filed. Each utility's plan shall set forth the utility's
proposals to meet the utility's portion of the energy
efficiency standards identified in subsection (c) of this
Section, as modified by subsection (d) of this Section, taking
into account the unique circumstances of the utility's service
territory. The Commission shall seek public comment on the
utility's plan and shall issue an order approving or
disapproving each plan. If the Commission disapproves a plan,
the Commission shall, within 30 days, describe in detail the
reasons for the disapproval and describe a path by which the
utility may file a revised draft of the plan to address the
Commission's concerns satisfactorily. If the utility does not
refile with the Commission within 60 days after the
disapproval, the utility shall be subject to penalties at a
rate of $100,000 per day until the plan is filed. This process
shall continue, and penalties shall accrue, until the utility
has successfully filed a portfolio of energy efficiency
measures. Penalties shall be deposited into the Energy
Efficiency Trust Fund and the cost of any such penalties may
not be recovered from ratepayers. In submitting proposed energy
efficiency plans and funding levels to meet the savings goals
adopted by this Act the utility shall:
        (1) Demonstrate that its proposed energy efficiency
    measures will achieve the requirements that are identified
    in subsection (c) of this Section, as modified by
    subsection (d) of this Section.
        (2) Present specific proposals to implement new
    building and appliance standards that have been placed into
    effect.
        (3) Present estimates of the total amount paid for gas
    service expressed on a per therm basis associated with the
    proposed portfolio of measures designed to meet the
    requirements that are identified in subsection (c) of this
    Section, as modified by subsection (d) of this Section.
        (4) Coordinate with the Department to present a
    portfolio of energy efficiency measures proportionate to
    the share of total annual utility revenues in Illinois from
    households at or below 150% of the poverty level. Such
    programs shall be targeted to households with incomes at or
    below 80% of area median income.
        (5) Demonstrate that its overall portfolio of energy
    efficiency measures, not including programs covered by
    item (4) of this subsection (f), are cost-effective using
    the total resource cost test and represent a diverse cross
    section of opportunities for customers of all rate classes
    to participate in the programs.
        (6) Demonstrate that a gas utility affiliated with an
    electric utility that is required to comply with Section
    8-103 of this Act has integrated gas and electric
    efficiency measures into a single program that reduces
    program or participant costs and appropriately allocates
    costs to gas and electric ratepayers. The Department shall
    integrate all gas and electric programs it delivers in any
    such utilities' service territories, unless the Department
    can show that integration is not feasible or appropriate.
        (7) Include a proposed cost recovery tariff mechanism
    to fund the proposed energy efficiency measures and to
    ensure the recovery of the prudently and reasonably
    incurred costs of Commission-approved programs.
        (8) Provide for quarterly status reports tracking
    implementation of and expenditures for the utility's
    portfolio of measures and the Department's portfolio of
    measures, an annual independent review, and a full
    independent evaluation of the 3-year results of the
    performance and the cost-effectiveness of the utility's
    and Department's portfolios of measures and broader net
    program impacts and, to the extent practical, for
    adjustment of the measures on a going forward basis as a
    result of the evaluations. The resources dedicated to
    evaluation shall not exceed 3% of portfolio resources in
    any given 3-year period.
    (g) No more than 3% of expenditures on energy efficiency
measures may be allocated for demonstration of breakthrough
equipment and devices.
    (h) Illinois natural gas utilities that are affiliated by
virtue of a common parent company may, at the utilities'
request, be considered a single natural gas utility for
purposes of complying with this Section.
    (i) If, after 3 years, a gas utility fails to meet the
efficiency standard specified in subsection (c) of this Section
as modified by subsection (d), then it shall make a
contribution to the Low-Income Home Energy Assistance Program.
The total liability for failure to meet the goal shall be
assessed as follows:
        (1) a large gas utility shall pay $600,000;
        (2) a medium gas utility shall pay $400,000; and
        (3) a small gas utility shall pay $200,000.
    For purposes of this Section, (i) a "large gas utility" is
a gas utility that on December 31, 2008, served more than
1,500,000 gas customers in Illinois; (ii) a "medium gas
utility" is a gas utility that on December 31, 2008, served
fewer than 1,500,000, but more than 500,000 gas customers in
Illinois; and (iii) a "small gas utility" is a gas utility that
on December 31, 2008, served fewer than 500,000 and more than
100,000 gas customers in Illinois. The costs of this
contribution may not be recovered from ratepayers.
    If a gas utility fails to meet the efficiency standard
specified in subsection (c) of this Section, as modified by
subsection (d) of this Section, in any 2 consecutive 3-year
planning periods, then the responsibility for implementing the
utility's energy efficiency measures shall be transferred to an
independent program administrator selected by the Commission.
Reasonable and prudent costs incurred by the independent
program administrator to meet the efficiency standard
specified in subsection (c) of this Section, as modified by
subsection (d) of this Section, may be recovered from the
customers of the affected gas utilities, other than customers
described in subsection (m) of this Section. The utility shall
provide the independent program administrator with all
information and assistance necessary to perform the program
administrator's duties including but not limited to customer,
account, and energy usage data, and shall allow the program
administrator to include inserts in customer bills. The utility
may recover reasonable costs associated with any such
assistance.
    (j) No utility shall be deemed to have failed to meet the
energy efficiency standards to the extent any such failure is
due to a failure of the Department.
    (k) Not later than January 1, 2012, the Commission shall
develop and solicit public comment on a plan to foster
statewide coordination and consistency between statutorily
mandated natural gas and electric energy efficiency programs to
reduce program or participant costs or to improve program
performance. Not later than September 1, 2013, the Commission
shall issue a report to the General Assembly containing its
findings and recommendations.
    (l) This Section does not apply to a gas utility that on
January 1, 2009, provided gas service to fewer than 100,000
customers in Illinois.
    (m) Subsections (a) through (k) of this Section do not
apply to customers of a natural gas utility that have a North
American Industry Classification System code number that is
22111 or any such code number beginning with the digits 31, 32,
or 33 and (i) annual usage in the aggregate of 4 million therms
or more within the service territory of the affected gas
utility or with aggregate usage of 8 million therms or more in
this State and complying with the provisions of item (l) of
this subsection (m); or (ii) using natural gas as feedstock and
meeting the usage requirements described in item (i) of this
subsection (m), to the extent such annual feedstock usage is
greater than that 60% of the customer's total annual usage of
natural gas.
        (1) Customers described in this subsection (m) of this
    Section shall apply, on a form approved on or before
    October 1, 2009 by the Department, to the Department to be
    designated as a self-directing customer ("SDC") or as an
    exempt customer using natural gas as a feedstock from which
    other products are made, including, but not limited to,
    feedstock for a hydrogen plant, on or before the 1st day of
    February, 2010. Thereafter, application may be made not
    less than 6 months before the filing date of the gas
    utility energy efficiency plan described in subsection (f)
    of this Section; however, a new customer that commences
    taking service from a natural gas utility after February 1,
    2010 may apply to become a SDC or exempt customer up to 30
    days after beginning service. Such application shall
    contain the following:
            (A) the customer's certification that, at the time
        of its application, it qualifies to be a SDC or exempt
        customer described in this subsection (m) of this
        Section;
            (B) in the case of a SDC, the customer's
        certification that it has established or will
        establish by the beginning of the utility's 3-year
        planning period commencing subsequent to the
        application, and will maintain for accounting
        purposes, an energy efficiency reserve account and
        that the customer will accrue funds in said account to
        be held for the purpose of funding, in whole or in
        part, energy efficiency measures of the customer's
        choosing, which may include, but are not limited to,
        projects involving combined heat and power systems
        that use the same energy source both for the generation
        of electrical or mechanical power and the production of
        steam or another form of useful thermal energy or the
        use of combustible gas produced from biomass, or both;
            (C) in the case of a SDC, the customer's
        certification that annual funding levels for the
        energy efficiency reserve account will be equal to 2%
        of the customer's cost of natural gas, composed of the
        customer's commodity cost and the delivery service
        charges paid to the gas utility, or $150,000, whichever
        is less;
            (D) in the case of a SDC, the customer's
        certification that the required reserve account
        balance will be capped at 3 years' worth of accruals
        and that the customer may, at its option, make further
        deposits to the account to the extent such deposit
        would increase the reserve account balance above the
        designated cap level;
            (E) in the case of a SDC, the customer's
        certification that by October 1 of each year, beginning
        no sooner than October 1, 2012, the customer will
        report to the Department information, for the 12-month
        period ending May 31 of the same year, on all deposits
        and reductions, if any, to the reserve account during
        the reporting year, and to the extent deposits to the
        reserve account in any year are in an amount less than
        $150,000, the basis for such reduced deposits; reserve
        account balances by month; a description of energy
        efficiency measures undertaken by the customer and
        paid for in whole or in part with funds from the
        reserve account; an estimate of the energy saved, or to
        be saved, by the measure; and that the report shall
        include a verification by an officer or plant manager
        of the customer or by a registered professional
        engineer or certified energy efficiency trade
        professional that the funds withdrawn from the reserve
        account were used for the energy efficiency measures;
            (F) in the case of an exempt customer, the
        customer's certification of the level of gas usage as
        feedstock in the customer's operation in a typical year
        and that it will provide information establishing this
        level, upon request of the Department;
            (G) in the case of either an exempt customer or a
        SDC, the customer's certification that it has provided
        the gas utility or utilities serving the customer with
        a copy of the application as filed with the Department;
            (H) in the case of either an exempt customer or a
        SDC, certification of the natural gas utility or
        utilities serving the customer in Illinois including
        the natural gas utility accounts that are the subject
        of the application; and
            (I) in the case of either an exempt customer or a
        SDC, a verification signed by a plant manager or an
        authorized corporate officer attesting to the
        truthfulness and accuracy of the information contained
        in the application.
        (2) The Department shall review the application to
    determine that it contains the information described in
    provisions (A) through (I) of item (1) of this subsection
    (m), as applicable. The review shall be completed within 30
    days after the date the application is filed with the
    Department. Absent a determination by the Department
    within the 30-day period, the applicant shall be considered
    to be a SDC or exempt customer, as applicable, for all
    subsequent 3-year planning periods, as of the date of
    filing the application described in this subsection (m). If
    the Department determines that the application does not
    contain the applicable information described in provisions
    (A) through (I) of item (1) of this subsection (m), it
    shall notify the customer, in writing, of its determination
    that the application does not contain the required
    information and identify the information that is missing,
    and the customer shall provide the missing information
    within 15 working days after the date of receipt of the
    Department's notification.
        (3) The Department shall have the right to audit the
    information provided in the customer's application and
    annual reports to ensure continued compliance with the
    requirements of this subsection. Based on the audit, if the
    Department determines the customer is no longer in
    compliance with the requirements of items (A) through (I)
    of item (1) of this subsection (m), as applicable, the
    Department shall notify the customer in writing of the
    noncompliance. The customer shall have 30 days to establish
    its compliance, and failing to do so, may have its status
    as a SDC or exempt customer revoked by the Department. The
    Department shall treat all information provided by any
    customer seeking SDC status or exemption from the
    provisions of this Section as strictly confidential.
        (4) Upon request, or on its own motion, the Commission
    may open an investigation, no more than once every 3 years
    and not before October 1, 2014, to evaluate the
    effectiveness of the self-directing program described in
    this subsection (m).
    (n) The applicability of this Section to customers
described in subsection (m) of this Section is conditioned on
the existence of the SDC program. In no event will any
provision of this Section apply to such customers after January
1, 2020.
(Source: P.A. 96-33, eff. 7-10-09; revised 11-18-11.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 7/20/2012