100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4236

 

Introduced , by Rep. Reginald Phillips

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3855/1-75

    Amends the Illinois Power Agency Act. Provides that the Illinois Power Agency and Illinois Commerce Commission shall include sourcing agreements covering power produced by clean coal and other facilities in each annual power procurement plan. Provides that utilities and alternative retail electric suppliers shall enter into sourcing agreements as part of the annual power procurement process. Provides that the Agency and Commission shall establish competitive bidding procedures for sourcing terms. Sets the requirements of the sourcing agreements. Effective June 1, 2018.


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A BILL FOR

 

HB4236LRB100 15343 RJF 30309 b

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

 

 

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

 

 

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1    customers as follows: 16% by June 1, 2019; increasing by
2    1.5% each year thereafter to 25% by June 1, 2025; and 25%
3    by June 1, 2026 and each year thereafter.
4        For each delivery year, the Agency shall first
5    recognize each utility's obligations for that delivery
6    year under existing contracts. Any renewable energy
7    credits under existing contracts, including renewable
8    energy credits as part of renewable energy resources, shall
9    be used to meet the goals set forth in this subsection (c)
10    for the delivery year.
11        (C) Of the renewable energy credits procured under this
12    subsection (c), at least 75% shall come from wind and
13    photovoltaic projects. The long-term renewable resources
14    procurement plan described in subparagraph (A) of this
15    paragraph (1) shall include the procurement of renewable
16    energy credits in amounts equal to at least the following:
17            (i) By the end of the 2020 delivery year:
18                At least 2,000,000 renewable energy credits
19            for each delivery year shall come from new wind
20            projects; and
21                At least 2,000,000 renewable energy credits
22            for each delivery year shall come from new
23            photovoltaic projects; of that amount, to the
24            extent possible, the Agency shall procure: at
25            least 50% from solar photovoltaic projects using
26            the program outlined in subparagraph (K) of this

 

 

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

 

 

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

 

 

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

 

 

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1    price benchmarks based on publicly available data on
2    regional technology costs and expected current and future
3    regional energy prices. The benchmarks in this Section
4    shall not be used to curtail or otherwise reduce
5    contractual obligations entered into by or through the
6    Agency prior to June 1, 2017 (the effective date of Public
7    Act 99-906) this amendatory Act of the 99th General
8    Assembly.
9        (E) For purposes of this subsection (c), the required
10    procurement of cost-effective renewable energy resources
11    for a particular year commencing prior to June 1, 2017
12    shall be measured as a percentage of the actual amount of
13    electricity (megawatt-hours) supplied by the electric
14    utility to eligible retail customers in the delivery year
15    ending immediately prior to the procurement, and, for
16    delivery years commencing on and after June 1, 2017, the
17    required procurement of cost-effective renewable energy
18    resources for a particular year shall be measured as a
19    percentage of the actual amount of electricity
20    (megawatt-hours) delivered by the electric utility in the
21    delivery year ending immediately prior to the procurement,
22    to all retail customers in its service territory. For
23    purposes of this subsection (c), the amount paid per
24    kilowatthour means the total amount paid for electric
25    service expressed on a per kilowatthour basis. For purposes
26    of this subsection (c), the total amount paid for electric

 

 

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1    service includes without limitation amounts paid for
2    supply, transmission, distribution, surcharges, and add-on
3    taxes.
4        Notwithstanding the requirements of this subsection
5    (c), the total of renewable energy resources procured under
6    the procurement plan for any single year shall be subject
7    to the limitations of this subparagraph (E). Such
8    procurement shall be reduced for all retail customers based
9    on the amount necessary to limit the annual estimated
10    average net increase due to the costs of these resources
11    included in the amounts paid by eligible retail customers
12    in connection with electric service to no more than the
13    greater of 2.015% of the amount paid per kilowatthour by
14    those customers during the year ending May 31, 2007 or the
15    incremental amount per kilowatthour paid for these
16    resources in 2011. To arrive at a maximum dollar amount of
17    renewable energy resources to be procured for the
18    particular delivery year, the resulting per kilowatthour
19    amount shall be applied to the actual amount of
20    kilowatthours of electricity delivered, or applicable
21    portion of such amount as specified in paragraph (1) of
22    this subsection (c), as applicable, by the electric utility
23    in the delivery year immediately prior to the procurement
24    to all retail customers in its service territory. The
25    calculations required by this subparagraph (E) shall be
26    made only once for each delivery year at the time that the

 

 

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

 

 

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1        the remaining requirements of this subsection (c).
2        (G) The following provisions shall apply to the
3    Agency's procurement of renewable energy credits under
4    this subsection (c):
5            (i) Notwithstanding whether a long-term renewable
6        resources procurement plan has been approved, the
7        Agency shall conduct an initial forward procurement
8        for renewable energy credits from new utility-scale
9        wind projects within 160 days after June 1, 2017 (the
10        effective date of Public Act 99-906) this amendatory
11        Act of the 99th General Assembly. For the purposes of
12        this initial forward procurement, the Agency shall
13        solicit 15-year contracts for delivery of 1,000,000
14        renewable energy credits delivered annually from new
15        utility-scale wind projects to begin delivery on June
16        1, 2019, if available, but not later than June 1, 2021.
17        Payments to suppliers of renewable energy credits
18        shall commence upon delivery. Renewable energy credits
19        procured under this initial procurement shall be
20        included in the Agency's long-term plan and shall apply
21        to all renewable energy goals in this subsection (c).
22            (ii) Notwithstanding whether a long-term renewable
23        resources procurement plan has been approved, the
24        Agency shall conduct an initial forward procurement
25        for renewable energy credits from new utility-scale
26        solar projects and brownfield site photovoltaic

 

 

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1        projects within one year after June 1, 2017 (the
2        effective date of Public Act 99-906) this amendatory
3        Act of the 99th General Assembly. For the purposes of
4        this initial forward procurement, the Agency shall
5        solicit 15-year contracts for delivery of 1,000,000
6        renewable energy credits delivered annually from new
7        utility-scale solar projects and brownfield site
8        photovoltaic projects to begin delivery on June 1,
9        2019, if available, but not later than June 1, 2021.
10        The Agency may structure this initial procurement in
11        one or more discrete procurement events. Payments to
12        suppliers of renewable energy credits shall commence
13        upon delivery. Renewable energy credits procured under
14        this initial procurement shall be included in the
15        Agency's long-term plan and shall apply to all
16        renewable energy goals in this subsection (c).
17            (iii) Subsequent forward procurements for
18        utility-scale wind projects shall solicit at least
19        1,000,000 renewable energy credits delivered annually
20        per procurement event and shall be planned, scheduled,
21        and designed such that the cumulative amount of
22        renewable energy credits delivered from all new wind
23        projects in each delivery year shall not exceed the
24        Agency's projection of the cumulative amount of
25        renewable energy credits that will be delivered from
26        all new photovoltaic projects, including utility-scale

 

 

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1        and distributed photovoltaic devices, in the same
2        delivery year at the time scheduled for wind contract
3        delivery.
4            (iv) If, at any time after the time set for
5        delivery of renewable energy credits pursuant to the
6        initial procurements in items (i) and (ii) of this
7        subparagraph (G), the cumulative amount of renewable
8        energy credits projected to be delivered from all new
9        wind projects in a given delivery year exceeds the
10        cumulative amount of renewable energy credits
11        projected to be delivered from all new photovoltaic
12        projects in that delivery year by 200,000 or more
13        renewable energy credits, then the Agency shall within
14        60 days adjust the procurement programs in the
15        long-term renewable resources procurement plan to
16        ensure that the projected cumulative amount of
17        renewable energy credits to be delivered from all new
18        wind projects does not exceed the projected cumulative
19        amount of renewable energy credits to be delivered from
20        all new photovoltaic projects by 200,000 or more
21        renewable energy credits, provided that nothing in
22        this Section shall preclude the projected cumulative
23        amount of renewable energy credits to be delivered from
24        all new photovoltaic projects from exceeding the
25        projected cumulative amount of renewable energy
26        credits to be delivered from all new wind projects in

 

 

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1        each delivery year and provided further that nothing in
2        this item (iv) shall require the curtailment of an
3        executed contract. The Agency shall update, on a
4        quarterly basis, its projection of the renewable
5        energy credits to be delivered from all projects in
6        each delivery year. Notwithstanding anything to the
7        contrary, the Agency may adjust the timing of
8        procurement events conducted under this subparagraph
9        (G). The long-term renewable resources procurement
10        plan shall set forth the process by which the
11        adjustments may be made.
12            (v) All procurements under this subparagraph (G)
13        shall comply with the geographic requirements in
14        subparagraph (I) of this paragraph (1) and shall follow
15        the procurement processes and procedures described in
16        this Section and Section 16-111.5 of the Public
17        Utilities Act to the extent practicable, and these
18        processes and procedures may be expedited to
19        accommodate the schedule established by this
20        subparagraph (G).
21        (H) The procurement of renewable energy resources for a
22    given delivery year shall be reduced as described in this
23    subparagraph (H) if an alternative alternate retail
24    electric supplier meets the requirements described in this
25    subparagraph (H).
26            (i) Within 45 days after June 1, 2017 (the

 

 

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1        effective date of Public Act 99-906) this amendatory
2        Act of the 99th General Assembly, an alternative retail
3        electric supplier or its successor shall submit an
4        informational filing to the Illinois Commerce
5        Commission certifying that, as of December 31, 2015,
6        the alternative retail electric supplier owned one or
7        more electric generating facilities that generates
8        renewable energy resources as defined in Section 1-10
9        of this Act, provided that such facilities are not
10        powered by wind or photovoltaics, and the facilities
11        generate one renewable energy credit for each
12        megawatthour of energy produced from the facility.
13            The informational filing shall identify each
14        facility that was eligible to satisfy the alternative
15        retail electric supplier's obligations under Section
16        16-115D of the Public Utilities Act as described in
17        this item (i).
18            (ii) For a given delivery year, the alternative
19        retail electric supplier may elect to supply its retail
20        customers with renewable energy credits from the
21        facility or facilities described in item (i) of this
22        subparagraph (H) that continue to be owned by the
23        alternative retail electric supplier.
24            (iii) The alternative retail electric supplier
25        shall notify the Agency and the applicable utility, no
26        later than February 28 of the year preceding the

 

 

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1        applicable delivery year or 15 days after June 1, 2017
2        (the effective date of Public Act 99-906) this
3        amendatory Act of the 99th General Assembly, whichever
4        is later, of its election under item (ii) of this
5        subparagraph (H) to supply renewable energy credits to
6        retail customers of the utility. Such election shall
7        identify the amount of renewable energy credits to be
8        supplied by the alternative retail electric supplier
9        to the utility's retail customers and the source of the
10        renewable energy credits identified in the
11        informational filing as described in item (i) of this
12        subparagraph (H), subject to the following
13        limitations:
14                For the delivery year beginning June 1, 2018,
15            the maximum amount of renewable energy credits to
16            be supplied by an alternative retail electric
17            supplier under this subparagraph (H) shall be 68%
18            multiplied by 25% multiplied by 14.5% multiplied
19            by the amount of metered electricity
20            (megawatt-hours) delivered by the alternative
21            retail electric supplier to Illinois retail
22            customers during the delivery year ending May 31,
23            2016.
24                For delivery years beginning June 1, 2019 and
25            each year thereafter, the maximum amount of
26            renewable energy credits to be supplied by an

 

 

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

 

 

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1        that would otherwise be applicable to the retail
2        customers of the alternative retail electric supplier
3        under paragraph (6) of this subsection (c) for the
4        applicable delivery year shall be reduced by the ratio
5        of the quantity of renewable energy credits supplied by
6        the alternative retail electric supplier compared to
7        that supplier's target renewable energy credit
8        quantity. The supplier's target renewable energy
9        credit quantity for the delivery year beginning June 1,
10        2018 is 14.5% multiplied by the total amount of metered
11        electricity (megawatt-hours) delivered by the
12        alternative retail supplier in that delivery year,
13        provided that the 14.5% shall increase by 1.5% each
14        delivery year thereafter to 25% by the delivery year
15        beginning June 1, 2025, and thereafter the 25% value
16        shall apply to each delivery year.
17            On or before April 1 of each year, the Agency shall
18        annually publish a report on its website that
19        identifies the aggregate amount of renewable energy
20        credits supplied by alternative retail electric
21        suppliers under this subparagraph (H).
22        (I) The Agency shall design its long-term renewable
23    energy procurement plan to maximize the State's interest in
24    the health, safety, and welfare of its residents, including
25    but not limited to minimizing sulfur dioxide, nitrogen
26    oxide, particulate matter and other pollution that

 

 

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1    adversely affects public health in this State, increasing
2    fuel and resource diversity in this State, enhancing the
3    reliability and resiliency of the electricity distribution
4    system in this State, meeting goals to limit carbon dioxide
5    emissions under federal or State law, and contributing to a
6    cleaner and healthier environment for the citizens of this
7    State. In order to further these legislative purposes,
8    renewable energy credits shall be eligible to be counted
9    toward the renewable energy requirements of this
10    subsection (c) if they are generated from facilities
11    located in this State. The Agency may qualify renewable
12    energy credits from facilities located in states adjacent
13    to Illinois if the generator demonstrates and the Agency
14    determines that the operation of such facility or
15    facilities will help promote the State's interest in the
16    health, safety, and welfare of its residents based on the
17    public interest criteria described above. To ensure that
18    the public interest criteria are applied to the procurement
19    and given full effect, the Agency's long-term procurement
20    plan shall describe in detail how each public interest
21    factor shall be considered and weighted for facilities
22    located in states adjacent to Illinois.
23        (J) In order to promote the competitive development of
24    renewable energy resources in furtherance of the State's
25    interest in the health, safety, and welfare of its
26    residents, renewable energy credits shall not be eligible

 

 

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1    to be counted toward the renewable energy requirements of
2    this subsection (c) if they are sourced from a generating
3    unit whose costs were being recovered through rates
4    regulated by this State or any other state or states on or
5    after January 1, 2017. Each contract executed to purchase
6    renewable energy credits under this subsection (c) shall
7    provide for the contract's termination if the costs of the
8    generating unit supplying the renewable energy credits
9    subsequently begin to be recovered through rates regulated
10    by this State or any other state or states; and each
11    contract shall further provide that, in that event, the
12    supplier of the credits must return 110% of all payments
13    received under the contract. Amounts returned under the
14    requirements of this subparagraph (J) shall be retained by
15    the utility and all of these amounts shall be used for the
16    procurement of additional renewable energy credits from
17    new wind or new photovoltaic resources as defined in this
18    subsection (c). The long-term plan shall provide that these
19    renewable energy credits shall be procured in the next
20    procurement event.
21        Notwithstanding the limitations of this subparagraph
22    (J), renewable energy credits sourced from generating
23    units that are constructed, purchased, owned, or leased by
24    an electric utility as part of an approved project,
25    program, or pilot under Section 1-56 of this Act shall be
26    eligible to be counted toward the renewable energy

 

 

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1    requirements of this subsection (c), regardless of how the
2    costs of these units are recovered.
3        (K) The long-term renewable resources procurement plan
4    developed by the Agency in accordance with subparagraph (A)
5    of this paragraph (1) shall include an Adjustable Block
6    program for the procurement of renewable energy credits
7    from new photovoltaic projects that are distributed
8    renewable energy generation devices or new photovoltaic
9    community renewable generation projects. The Adjustable
10    Block program shall be designed to provide a transparent
11    schedule of prices and quantities to enable the
12    photovoltaic market to scale up and for renewable energy
13    credit prices to adjust at a predictable rate over time.
14    The prices set by the Adjustable Block program can be
15    reflected as a set value or as the product of a formula.
16        The Adjustable Block program shall include for each
17    category of eligible projects: a schedule of standard block
18    purchase prices to be offered; a series of steps, with
19    associated nameplate capacity and purchase prices that
20    adjust from step to step; and automatic opening of the next
21    step as soon as the nameplate capacity and available
22    purchase prices for an open step are fully committed or
23    reserved. Only projects energized on or after June 1, 2017
24    shall be eligible for the Adjustable Block program. For
25    each block group the Agency shall determine the number of
26    blocks, the amount of generation capacity in each block,

 

 

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1    and the purchase price for each block, provided that the
2    purchase price provided and the total amount of generation
3    in all blocks for all block groups shall be sufficient to
4    meet the goals in this subsection (c). The Agency may
5    periodically review its prior decisions establishing the
6    number of blocks, the amount of generation capacity in each
7    block, and the purchase price for each block, and may
8    propose, on an expedited basis, changes to these previously
9    set values, including but not limited to redistributing
10    these amounts and the available funds as necessary and
11    appropriate, subject to Commission approval as part of the
12    periodic plan revision process described in Section
13    16-111.5 of the Public Utilities Act. The Agency may define
14    different block sizes, purchase prices, or other distinct
15    terms and conditions for projects located in different
16    utility service territories if the Agency deems it
17    necessary to meet the goals in this subsection (c).
18        The Adjustable Block program shall include at least the
19    following block groups in at least the following amounts,
20    which may be adjusted upon review by the Agency and
21    approval by the Commission as described in this
22    subparagraph (K):
23            (i) At least 25% from distributed renewable energy
24        generation devices with a nameplate capacity of no more
25        than 10 kilowatts.
26            (ii) At least 25% from distributed renewable

 

 

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

 

 

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1        (K) of this paragraph (1), the renewable energy credit
2        purchase price shall be paid in full by the contracting
3        utilities at the time that the facility producing the
4        renewable energy credits is interconnected at the
5        distribution system level of the utility and
6        energized. The electric utility shall receive and
7        retire all renewable energy credits generated by the
8        project for the first 15 years of operation.
9            (iii) For those renewable energy credits that
10        qualify and are procured under item (ii) and (iii) of
11        subparagraph (K) of this paragraph (1) and any
12        additional categories of distributed generation
13        included in the long-term renewable resources
14        procurement plan and approved by the Commission, 20
15        percent of the renewable energy credit purchase price
16        shall be paid by the contracting utilities at the time
17        that the facility producing the renewable energy
18        credits is interconnected at the distribution system
19        level of the utility and energized. The remaining
20        portion shall be paid ratably over the subsequent
21        4-year period. The electric utility shall receive and
22        retire all renewable energy credits generated by the
23        project for the first 15 years of operation.
24            (iv) Each contract shall include provisions to
25        ensure the delivery of the renewable energy credits for
26        the full term of the contract.

 

 

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1            (v) The utility shall be the counterparty to the
2        contracts executed under this subparagraph (L) that
3        are approved by the Commission under the process
4        described in Section 16-111.5 of the Public Utilities
5        Act. No contract shall be executed for an amount that
6        is less than one renewable energy credit per year.
7            (vi) If, at any time, approved applications for the
8        Adjustable Block program exceed funds collected by the
9        electric utility or would cause the Agency to exceed
10        the limitation described in subparagraph (E) of this
11        paragraph (1) on the amount of renewable energy
12        resources that may be procured, then the Agency shall
13        consider future uncommitted funds to be reserved for
14        these contracts on a first-come, first-served basis,
15        with the delivery of renewable energy credits required
16        beginning at the time that the reserved funds become
17        available.
18            (vii) Nothing in this Section shall require the
19        utility to advance any payment or pay any amounts that
20        exceed the actual amount of revenues collected by the
21        utility under paragraph (6) of this subsection (c) and
22        subsection (k) of Section 16-108 of the Public
23        Utilities Act, and contracts executed under this
24        Section shall expressly incorporate this limitation.
25        (M) The Agency shall be authorized to retain one or
26    more experts or expert consulting firms to develop,

 

 

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1    administer, implement, operate, and evaluate the
2    Adjustable Block program described in subparagraph (K) of
3    this paragraph (1), and the Agency shall retain the
4    consultant or consultants in the same manner, to the extent
5    practicable, as the Agency retains others to administer
6    provisions of this Act, including, but not limited to, the
7    procurement administrator. The selection of experts and
8    expert consulting firms and the procurement process
9    described in this subparagraph (M) are exempt from the
10    requirements of Section 20-10 of the Illinois Procurement
11    Code, under Section 20-10 of that Code. The Agency shall
12    strive to minimize administrative expenses in the
13    implementation of the Adjustable Block program.
14        The Agency and its consultant or consultants shall
15    monitor block activity, share program activity with
16    stakeholders and conduct regularly scheduled meetings to
17    discuss program activity and market conditions. If
18    necessary, the Agency may make prospective administrative
19    adjustments to the Adjustable Block program design, such as
20    redistributing available funds or making adjustments to
21    purchase prices as necessary to achieve the goals of this
22    subsection (c). Program modifications to any price,
23    capacity block, or other program element that do not
24    deviate from the Commission's approved value by more than
25    25% shall take effect immediately and are not subject to
26    Commission review and approval. Program modifications to

 

 

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1    any price, capacity block, or other program element that
2    deviate more than 25% from the Commission's approved value
3    must be approved by the Commission as a long-term plan
4    amendment under Section 16-111.5 of the Public Utilities
5    Act. The Agency shall consider stakeholder feedback when
6    making adjustments to the Adjustable Block design and shall
7    notify stakeholders in advance of any planned changes.
8        (N) The long-term renewable resources procurement plan
9    required by this subsection (c) shall include a community
10    renewable generation program. The Agency shall establish
11    the terms, conditions, and program requirements for
12    community renewable generation projects with a goal to
13    expand renewable energy generating facility access to a
14    broader group of energy consumers, to ensure robust
15    participation opportunities for residential and small
16    commercial customers and those who cannot install
17    renewable energy on their own properties. Any plan approved
18    by the Commission shall allow subscriptions to community
19    renewable generation projects to be portable and
20    transferable. For purposes of this subparagraph (N),
21    "portable" means that subscriptions may be retained by the
22    subscriber even if the subscriber relocates or changes its
23    address within the same utility service territory; and
24    "transferable" means that a subscriber may assign or sell
25    subscriptions to another person within the same utility
26    service territory.

 

 

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1        Electric utilities shall provide a monetary credit to a
2    subscriber's subsequent bill for service for the
3    proportional output of a community renewable generation
4    project attributable to that subscriber as specified in
5    Section 16-107.5 of the Public Utilities Act.
6        The Agency shall purchase renewable energy credits
7    from subscribed shares of photovoltaic community renewable
8    generation projects through the Adjustable Block program
9    described in subparagraph (K) of this paragraph (1) or
10    through the Illinois Solar for All Program described in
11    Section 1-56 of this Act. The electric utility shall
12    purchase any unsubscribed energy from community renewable
13    generation projects that are Qualifying Facilities ("QF")
14    under the electric utility's tariff for purchasing the
15    output from QFs under Public Utilities Regulatory Policies
16    Act of 1978.
17        The owners of and any subscribers to a community
18    renewable generation project shall not be considered
19    public utilities or alternative retail electricity
20    suppliers under the Public Utilities Act solely as a result
21    of their interest in or subscription to a community
22    renewable generation project and shall not be required to
23    become an alternative retail electric supplier by
24    participating in a community renewable generation project
25    with a public utility.
26        (O) For the delivery year beginning June 1, 2018, the

 

 

HB4236- 34 -LRB100 15343 RJF 30309 b

1    long-term renewable resources procurement plan required by
2    this subsection (c) shall provide for the Agency to procure
3    contracts to continue offering the Illinois Solar for All
4    Program described in subsection (b) of Section 1-56 of this
5    Act, and the contracts approved by the Commission shall be
6    executed by the utilities that are subject to this
7    subsection (c). The long-term renewable resources
8    procurement plan shall allocate 5% of the funds available
9    under the plan for the applicable delivery year, or
10    $10,000,000 per delivery year, whichever is greater, to
11    fund the programs, and the plan shall determine the amount
12    of funding to be apportioned to the programs identified in
13    subsection (b) of Section 1-56 of this Act; provided that
14    for the delivery years beginning June 1, 2017, June 1,
15    2021, and June 1, 2025, the long-term renewable resources
16    procurement plan shall allocate 10% of the funds available
17    under the plan for the applicable delivery year, or
18    $20,000,000 per delivery year, whichever is greater, and
19    $10,000,000 of such funds in such year shall be used by an
20    electric utility that serves more than 3,000,000 retail
21    customers in the State to implement a Commission-approved
22    plan under Section 16-108.12 of the Public Utilities Act.
23    In making the determinations required under this
24    subparagraph (O), the Commission shall consider the
25    experience and performance under the programs and any
26    evaluation reports. The Commission shall also provide for

 

 

HB4236- 35 -LRB100 15343 RJF 30309 b

1    an independent evaluation of those programs on a periodic
2    basis that are funded under this subparagraph (O).
3        (2) (Blank).
4        (3) (Blank).
5        (4) The electric utility shall retire all renewable
6    energy credits used to comply with the standard.
7        (5) Beginning with the 2010 delivery year and ending
8    June 1, 2017, an electric utility subject to this
9    subsection (c) shall apply the lesser of the maximum
10    alternative compliance payment rate or the most recent
11    estimated alternative compliance payment rate for its
12    service territory for the corresponding compliance period,
13    established pursuant to subsection (d) of Section 16-115D
14    of the Public Utilities Act to its retail customers that
15    take service pursuant to the electric utility's hourly
16    pricing tariff or tariffs. The electric utility shall
17    retain all amounts collected as a result of the application
18    of the alternative compliance payment rate or rates to such
19    customers, and, beginning in 2011, the utility shall
20    include in the information provided under item (1) of
21    subsection (d) of Section 16-111.5 of the Public Utilities
22    Act the amounts collected under the alternative compliance
23    payment rate or rates for the prior year ending May 31.
24    Notwithstanding any limitation on the procurement of
25    renewable energy resources imposed by item (2) of this
26    subsection (c), the Agency shall increase its spending on

 

 

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1    the purchase of renewable energy resources to be procured
2    by the electric utility for the next plan year by an amount
3    equal to the amounts collected by the utility under the
4    alternative compliance payment rate or rates in the prior
5    year ending May 31.
6        (6) The electric utility shall be entitled to recover
7    all of its costs associated with the procurement of
8    renewable energy credits under plans approved under this
9    Section and Section 16-111.5 of the Public Utilities Act.
10    These costs shall include associated reasonable expenses
11    for implementing the procurement programs, including, but
12    not limited to, the costs of administering and evaluating
13    the Adjustable Block program, through an automatic
14    adjustment clause tariff in accordance with subsection (k)
15    of Section 16-108 of the Public Utilities Act.
16        (7) Renewable energy credits procured from new
17    photovoltaic projects or new distributed renewable energy
18    generation devices under this Section after June 1, 2017
19    (the effective date of Public Act 99-906) this amendatory
20    Act of the 99th General Assembly must be procured from
21    devices installed by a qualified person in compliance with
22    the requirements of Section 16-128A of the Public Utilities
23    Act and any rules or regulations adopted thereunder.
24        In meeting the renewable energy requirements of this
25    subsection (c), to the extent feasible and consistent with
26    State and federal law, the renewable energy credit

 

 

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1    procurements, Adjustable Block solar program, and
2    community renewable generation program shall provide
3    employment opportunities for all segments of the
4    population and workforce, including minority-owned and
5    female-owned business enterprises, and shall not,
6    consistent with State and federal law, discriminate based
7    on race or socioeconomic status.
8    (d) Clean coal portfolio standard.
9        (1) The procurement plans shall include electricity
10    generated using clean coal. Each utility shall enter into
11    one or more sourcing agreements with the initial clean coal
12    facility, as provided in paragraph (3) of this subsection
13    (d), covering electricity generated by the initial clean
14    coal facility representing at least 5% of each utility's
15    total supply to serve the load of eligible retail customers
16    in 2015 and each year thereafter, as described in paragraph
17    (3) of this subsection (d), subject to the limits specified
18    in paragraph (2) of this subsection (d). It is the goal of
19    the State that by January 1, 2025, 25% of the electricity
20    used in the State shall be generated by cost-effective
21    clean coal facilities. For purposes of this subsection (d),
22    "cost-effective" means that the expenditures pursuant to
23    such sourcing agreements do not cause the limit stated in
24    paragraph (2) of this subsection (d) to be exceeded and do
25    not exceed cost-based benchmarks, which shall be developed
26    to assess all expenditures pursuant to such sourcing

 

 

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1    agreements covering electricity generated by clean coal
2    facilities, other than the initial clean coal facility, by
3    the procurement administrator, in consultation with the
4    Commission staff, Agency staff, and the procurement
5    monitor and shall be subject to Commission review and
6    approval.
7        A utility party to a sourcing agreement shall
8    immediately retire any emission credits that it receives in
9    connection with the electricity covered by such agreement.
10        Utilities shall maintain adequate records documenting
11    the purchases under the sourcing agreement to comply with
12    this subsection (d) and shall file an accounting with the
13    load forecast that must be filed with the Agency by July 15
14    of each year, in accordance with subsection (d) of Section
15    16-111.5 of the Public Utilities Act.
16        A utility shall be deemed to have complied with the
17    clean coal portfolio standard specified in this subsection
18    (d) if the utility enters into a sourcing agreement as
19    required by this subsection (d).
20        (2) For purposes of this subsection (d), the required
21    execution of sourcing agreements with the initial clean
22    coal facility for a particular year shall be measured as a
23    percentage of the actual amount of electricity
24    (megawatt-hours) supplied by the electric utility to
25    eligible retail customers in the planning year ending
26    immediately prior to the agreement's execution. For

 

 

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1    purposes of this subsection (d), the amount paid per
2    kilowatthour means the total amount paid for electric
3    service expressed on a per kilowatthour basis. For purposes
4    of this subsection (d), the total amount paid for electric
5    service includes without limitation amounts paid for
6    supply, transmission, distribution, surcharges and add-on
7    taxes.
8        Notwithstanding the requirements of this subsection
9    (d), the total amount paid under sourcing agreements with
10    clean coal facilities pursuant to the procurement plan for
11    any given year shall be reduced by an amount necessary to
12    limit the annual estimated average net increase due to the
13    costs of these resources included in the amounts paid by
14    eligible retail customers in connection with electric
15    service to:
16            (A) in 2010, no more than 0.5% of the amount paid
17        per kilowatthour by those customers during the year
18        ending May 31, 2009;
19            (B) in 2011, the greater of an additional 0.5% of
20        the amount paid per kilowatthour by those customers
21        during the year ending May 31, 2010 or 1% of the amount
22        paid per kilowatthour by those customers during the
23        year ending May 31, 2009;
24            (C) in 2012, the greater of an additional 0.5% of
25        the amount paid per kilowatthour by those customers
26        during the year ending May 31, 2011 or 1.5% of the

 

 

HB4236- 40 -LRB100 15343 RJF 30309 b

1        amount paid per kilowatthour by those customers during
2        the year ending May 31, 2009;
3            (D) in 2013, the greater of an additional 0.5% of
4        the amount paid per kilowatthour by those customers
5        during the year ending May 31, 2012 or 2% of the amount
6        paid per kilowatthour by those customers during the
7        year ending May 31, 2009; and
8            (E) thereafter, the total amount paid under
9        sourcing agreements with clean coal facilities
10        pursuant to the procurement plan for any single year
11        shall be reduced by an amount necessary to limit the
12        estimated average net increase due to the cost of these
13        resources included in the amounts paid by eligible
14        retail customers in connection with electric service
15        to no more than the greater of (i) 2.015% of the amount
16        paid per kilowatthour by those customers during the
17        year ending May 31, 2009 or (ii) the incremental amount
18        per kilowatthour paid for these resources in 2013.
19        These requirements may be altered only as provided by
20        statute.
21        No later than June 30, 2015, the Commission shall
22    review the limitation on the total amount paid under
23    sourcing agreements, if any, with clean coal facilities
24    pursuant to this subsection (d) and report to the General
25    Assembly its findings as to whether that limitation unduly
26    constrains the amount of electricity generated by

 

 

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1    cost-effective clean coal facilities that is covered by
2    sourcing agreements.
3        (3) Initial clean coal facility. In order to promote
4    development of clean coal facilities in Illinois, each
5    electric utility subject to this Section shall execute a
6    sourcing agreement to source electricity from a proposed
7    clean coal facility in Illinois (the "initial clean coal
8    facility") that will have a nameplate capacity of at least
9    500 MW when commercial operation commences, that has a
10    final Clean Air Act permit on June 1, 2009 (the effective
11    date of Public Act 95-1027) this amendatory Act of the 95th
12    General Assembly, and that will meet the definition of
13    clean coal facility in Section 1-10 of this Act when
14    commercial operation commences. The sourcing agreements
15    with this initial clean coal facility shall be subject to
16    both approval of the initial clean coal facility by the
17    General Assembly and satisfaction of the requirements of
18    paragraph (4) of this subsection (d) and shall be executed
19    within 90 days after any such approval by the General
20    Assembly. The Agency and the Commission shall have
21    authority to inspect all books and records associated with
22    the initial clean coal facility during the term of such a
23    sourcing agreement. A utility's sourcing agreement for
24    electricity produced by the initial clean coal facility
25    shall include:
26            (A) a formula contractual price (the "contract

 

 

HB4236- 42 -LRB100 15343 RJF 30309 b

1        price") approved pursuant to paragraph (4) of this
2        subsection (d), which shall:
3                (i) be determined using a cost of service
4            methodology employing either a level or deferred
5            capital recovery component, based on a capital
6            structure consisting of 45% equity and 55% debt,
7            and a return on equity as may be approved by the
8            Federal Energy Regulatory Commission, which in any
9            case may not exceed the lower of 11.5% or the rate
10            of return approved by the General Assembly
11            pursuant to paragraph (4) of this subsection (d);
12            and
13                (ii) provide that all miscellaneous net
14            revenue, including but not limited to net revenue
15            from the sale of emission allowances, if any,
16            substitute natural gas, if any, grants or other
17            support provided by the State of Illinois or the
18            United States Government, firm transmission
19            rights, if any, by-products produced by the
20            facility, energy or capacity derived from the
21            facility and not covered by a sourcing agreement
22            pursuant to paragraph (3) of this subsection (d) or
23            item (5) of subsection (d) of Section 16-115 of the
24            Public Utilities Act, whether generated from the
25            synthesis gas derived from coal, from SNG, or from
26            natural gas, shall be credited against the revenue

 

 

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1            requirement for this initial clean coal facility;
2            (B) power purchase provisions, which shall:
3                (i) provide that the utility party to such
4            sourcing agreement shall pay the contract price
5            for electricity delivered under such sourcing
6            agreement;
7                (ii) require delivery of electricity to the
8            regional transmission organization market of the
9            utility that is party to such sourcing agreement;
10                (iii) require the utility party to such
11            sourcing agreement to buy from the initial clean
12            coal facility in each hour an amount of energy
13            equal to all clean coal energy made available from
14            the initial clean coal facility during such hour
15            times a fraction, the numerator of which is such
16            utility's retail market sales of electricity
17            (expressed in kilowatthours sold) in the State
18            during the prior calendar month and the
19            denominator of which is the total retail market
20            sales of electricity (expressed in kilowatthours
21            sold) in the State by utilities during such prior
22            month and the sales of electricity (expressed in
23            kilowatthours sold) in the State by alternative
24            retail electric suppliers during such prior month
25            that are subject to the requirements of this
26            subsection (d) and paragraph (5) of subsection (d)

 

 

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

 

 

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1            subsection (d) and paragraph (5) of subsection (d)
2            of Section 16-115 of the Public Utilities Act,
3            provided that the amount paid by the utility in any
4            year will be limited by paragraph (2) of this
5            subsection (d);
6                (ii) provide that the utility's payment
7            obligation in respect of the quantity of
8            electricity determined pursuant to the preceding
9            clause (i) shall be limited to an amount equal to
10            (1) the difference between the contract price
11            determined pursuant to subparagraph (A) of
12            paragraph (3) of this subsection (d) and the
13            day-ahead price for electricity delivered to the
14            regional transmission organization market of the
15            utility that is party to such sourcing agreement
16            (or any successor delivery point at which such
17            utility's supply obligations are financially
18            settled on an hourly basis) (the "reference
19            price") on the day preceding the day on which the
20            electricity is delivered to the initial clean coal
21            facility busbar, multiplied by (2) the quantity of
22            electricity determined pursuant to the preceding
23            clause (i); and
24                (iii) not require the utility to take physical
25            delivery of the electricity produced by the
26            facility;

 

 

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1            (D) general provisions, which shall:
2                (i) specify a term of no more than 30 years,
3            commencing on the commercial operation date of the
4            facility;
5                (ii) provide that utilities shall maintain
6            adequate records documenting purchases under the
7            sourcing agreements entered into to comply with
8            this subsection (d) and shall file an accounting
9            with the load forecast that must be filed with the
10            Agency by July 15 of each year, in accordance with
11            subsection (d) of Section 16-111.5 of the Public
12            Utilities Act;
13                (iii) provide that all costs associated with
14            the initial clean coal facility will be
15            periodically reported to the Federal Energy
16            Regulatory Commission and to purchasers in
17            accordance with applicable laws governing
18            cost-based wholesale power contracts;
19                (iv) permit the Illinois Power Agency to
20            assume ownership of the initial clean coal
21            facility, without monetary consideration and
22            otherwise on reasonable terms acceptable to the
23            Agency, if the Agency so requests no less than 3
24            years prior to the end of the stated contract term;
25                (v) require the owner of the initial clean coal
26            facility to provide documentation to the

 

 

HB4236- 47 -LRB100 15343 RJF 30309 b

1            Commission each year, starting in the facility's
2            first year of commercial operation, accurately
3            reporting the quantity of carbon emissions from
4            the facility that have been captured and
5            sequestered and report any quantities of carbon
6            released from the site or sites at which carbon
7            emissions were sequestered in prior years, based
8            on continuous monitoring of such sites. If, in any
9            year after the first year of commercial operation,
10            the owner of the facility fails to demonstrate that
11            the initial clean coal facility captured and
12            sequestered at least 50% of the total carbon
13            emissions that the facility would otherwise emit
14            or that sequestration of emissions from prior
15            years has failed, resulting in the release of
16            carbon dioxide into the atmosphere, the owner of
17            the facility must offset excess emissions. Any
18            such carbon offsets must be permanent, additional,
19            verifiable, real, located within the State of
20            Illinois, and legally and practicably enforceable.
21            The cost of such offsets for the facility that are
22            not recoverable shall not exceed $15 million in any
23            given year. No costs of any such purchases of
24            carbon offsets may be recovered from a utility or
25            its customers. All carbon offsets purchased for
26            this purpose and any carbon emission credits

 

 

HB4236- 48 -LRB100 15343 RJF 30309 b

1            associated with sequestration of carbon from the
2            facility must be permanently retired. The initial
3            clean coal facility shall not forfeit its
4            designation as a clean coal facility if the
5            facility fails to fully comply with the applicable
6            carbon sequestration requirements in any given
7            year, provided the requisite offsets are
8            purchased. However, the Attorney General, on
9            behalf of the People of the State of Illinois, may
10            specifically enforce the facility's sequestration
11            requirement and the other terms of this contract
12            provision. Compliance with the sequestration
13            requirements and offset purchase requirements
14            specified in paragraph (3) of this subsection (d)
15            shall be reviewed annually by an independent
16            expert retained by the owner of the initial clean
17            coal facility, with the advance written approval
18            of the Attorney General. The Commission may, in the
19            course of the review specified in item (vii),
20            reduce the allowable return on equity for the
21            facility if the facility wilfully fails to comply
22            with the carbon capture and sequestration
23            requirements set forth in this item (v);
24                (vi) include limits on, and accordingly
25            provide for modification of, the amount the
26            utility is required to source under the sourcing

 

 

HB4236- 49 -LRB100 15343 RJF 30309 b

1            agreement consistent with paragraph (2) of this
2            subsection (d);
3                (vii) require Commission review: (1) to
4            determine the justness, reasonableness, and
5            prudence of the inputs to the formula referenced in
6            subparagraphs (A)(i) through (A)(iii) of paragraph
7            (3) of this subsection (d), prior to an adjustment
8            in those inputs including, without limitation, the
9            capital structure and return on equity, fuel
10            costs, and other operations and maintenance costs
11            and (2) to approve the costs to be passed through
12            to customers under the sourcing agreement by which
13            the utility satisfies its statutory obligations.
14            Commission review shall occur no less than every 3
15            years, regardless of whether any adjustments have
16            been proposed, and shall be completed within 9
17            months;
18                (viii) limit the utility's obligation to such
19            amount as the utility is allowed to recover through
20            tariffs filed with the Commission, provided that
21            neither the clean coal facility nor the utility
22            waives any right to assert federal pre-emption or
23            any other argument in response to a purported
24            disallowance of recovery costs;
25                (ix) limit the utility's or alternative retail
26            electric supplier's obligation to incur any

 

 

HB4236- 50 -LRB100 15343 RJF 30309 b

1            liability until such time as the facility is in
2            commercial operation and generating power and
3            energy and such power and energy is being delivered
4            to the facility busbar;
5                (x) provide that the owner or owners of the
6            initial clean coal facility, which is the
7            counterparty to such sourcing agreement, shall
8            have the right from time to time to elect whether
9            the obligations of the utility party thereto shall
10            be governed by the power purchase provisions or the
11            contract for differences provisions;
12                (xi) append documentation showing that the
13            formula rate and contract, insofar as they relate
14            to the power purchase provisions, have been
15            approved by the Federal Energy Regulatory
16            Commission pursuant to Section 205 of the Federal
17            Power Act;
18                (xii) provide that any changes to the terms of
19            the contract, insofar as such changes relate to the
20            power purchase provisions, are subject to review
21            under the public interest standard applied by the
22            Federal Energy Regulatory Commission pursuant to
23            Sections 205 and 206 of the Federal Power Act; and
24                (xiii) conform with customary lender
25            requirements in power purchase agreements used as
26            the basis for financing non-utility generators.

 

 

HB4236- 51 -LRB100 15343 RJF 30309 b

1        (4) Effective date of sourcing agreements with the
2    initial clean coal facility.
3        Any proposed sourcing agreement with the initial clean
4    coal facility shall not become effective unless the
5    following reports are prepared and submitted and
6    authorizations and approvals obtained:
7            (i) Facility cost report. The owner of the initial
8        clean coal facility shall submit to the Commission, the
9        Agency, and the General Assembly a front-end
10        engineering and design study, a facility cost report,
11        method of financing (including but not limited to
12        structure and associated costs), and an operating and
13        maintenance cost quote for the facility (collectively
14        "facility cost report"), which shall be prepared in
15        accordance with the requirements of this paragraph (4)
16        of subsection (d) of this Section, and shall provide
17        the Commission and the Agency access to the work
18        papers, relied upon documents, and any other backup
19        documentation related to the facility cost report.
20            (ii) Commission report. Within 6 months following
21        receipt of the facility cost report, the Commission, in
22        consultation with the Agency, shall submit a report to
23        the General Assembly setting forth its analysis of the
24        facility cost report. Such report shall include, but
25        not be limited to, a comparison of the costs associated
26        with electricity generated by the initial clean coal

 

 

HB4236- 52 -LRB100 15343 RJF 30309 b

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

 

 

HB4236- 53 -LRB100 15343 RJF 30309 b

1            (iv) Commission review. If the General Assembly
2        enacts authorizing legislation pursuant to
3        subparagraph (iii) approving a sourcing agreement, the
4        Commission shall, within 90 days of such enactment,
5        complete a review of such sourcing agreement. During
6        such time period, the Commission shall implement any
7        directive of the General Assembly, resolve any
8        disputes between the parties to the sourcing agreement
9        concerning the terms of such agreement, approve the
10        form of such agreement, and issue an order finding that
11        the sourcing agreement is prudent and reasonable.
12        The facility cost report shall be prepared as follows:
13            (A) The facility cost report shall be prepared by
14        duly licensed engineering and construction firms
15        detailing the estimated capital costs payable to one or
16        more contractors or suppliers for the engineering,
17        procurement and construction of the components
18        comprising the initial clean coal facility and the
19        estimated costs of operation and maintenance of the
20        facility. The facility cost report shall include:
21                (i) an estimate of the capital cost of the core
22            plant based on one or more front end engineering
23            and design studies for the gasification island and
24            related facilities. The core plant shall include
25            all civil, structural, mechanical, electrical,
26            control, and safety systems.

 

 

HB4236- 54 -LRB100 15343 RJF 30309 b

1                (ii) an estimate of the capital cost of the
2            balance of the plant, including any capital costs
3            associated with sequestration of carbon dioxide
4            emissions and all interconnects and interfaces
5            required to operate the facility, such as
6            transmission of electricity, construction or
7            backfeed power supply, pipelines to transport
8            substitute natural gas or carbon dioxide, potable
9            water supply, natural gas supply, water supply,
10            water discharge, landfill, access roads, and coal
11            delivery.
12            The quoted construction costs shall be expressed
13        in nominal dollars as of the date that the quote is
14        prepared and shall include capitalized financing costs
15        during construction, taxes, insurance, and other
16        owner's costs, and an assumed escalation in materials
17        and labor beyond the date as of which the construction
18        cost quote is expressed.
19            (B) The front end engineering and design study for
20        the gasification island and the cost study for the
21        balance of plant shall include sufficient design work
22        to permit quantification of major categories of
23        materials, commodities and labor hours, and receipt of
24        quotes from vendors of major equipment required to
25        construct and operate the clean coal facility.
26            (C) The facility cost report shall also include an

 

 

HB4236- 55 -LRB100 15343 RJF 30309 b

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

 

 

HB4236- 56 -LRB100 15343 RJF 30309 b

1        regional transmission organization markets and an
2        analysis of the expected capacity factor for the
3        initial clean coal facility.
4            (E) Amounts paid to third parties unrelated to the
5        owner or owners of the initial clean coal facility to
6        prepare the core plant construction cost quote,
7        including the front end engineering and design study,
8        and the operating and maintenance cost quote will be
9        reimbursed through Coal Development Bonds.
10        (5) Re-powering and retrofitting coal-fired power
11    plants previously owned by Illinois utilities to qualify as
12    clean coal facilities. During the 2009 procurement
13    planning process and thereafter, the Agency and the
14    Commission shall consider sourcing agreements covering
15    electricity generated by power plants that were previously
16    owned by Illinois utilities and that have been or will be
17    converted into clean coal facilities, as defined by Section
18    1-10 of this Act. Pursuant to such procurement planning
19    process, the owners of such facilities may propose to the
20    Agency sourcing agreements with utilities and alternative
21    retail electric suppliers required to comply with
22    subsection (d) of this Section and item (5) of subsection
23    (d) of Section 16-115 of the Public Utilities Act, covering
24    electricity generated by such facilities. In the case of
25    sourcing agreements that are power purchase agreements,
26    the contract price for electricity sales shall be

 

 

HB4236- 57 -LRB100 15343 RJF 30309 b

1    established on a cost of service basis. In the case of
2    sourcing agreements that are contracts for differences,
3    the contract price from which the reference price is
4    subtracted shall be established on a cost of service basis.
5    The Agency and the Commission may approve any such utility
6    sourcing agreements that do not exceed cost-based
7    benchmarks developed by the procurement administrator, in
8    consultation with the Commission staff, Agency staff and
9    the procurement monitor, subject to Commission review and
10    approval. The Commission shall have authority to inspect
11    all books and records associated with these clean coal
12    facilities during the term of any such contract.
13        (5.5) In order to promote the development of clean coal
14    power generation, and in furtherance of the State's goal of
15    having at least 25% of the State's electricity generated by
16    cost-effective clean coal facilities by January 1, 2025 as
17    provided in paragraph (1) of this subsection (d), the
18    Agency and Commission shall include sourcing agreements
19    covering power produced by (i) clean coal facilities, as
20    defined in Section 1-10 of this Act; and (ii) facilities
21    specified in paragraphs (3) and (5) of this subsection (d),
22    in each annual power procurement plan.
23        The Agency and Commission shall require utilities and
24    alternative retail electric suppliers to enter into such
25    sourcing agreements as part of the annual power procurement
26    process.

 

 

HB4236- 58 -LRB100 15343 RJF 30309 b

1        The Agency and Commission shall establish a
2    competitive procedure to solicit and receive proposed
3    sourcing terms from producers of clean coal power
4    interested in selection for sourcing agreements. The
5    competitive procedure shall include a method of selection
6    for inclusion in those agreements.
7        These sourcing agreements shall be subject to the
8    limits contained in items (A) through (E) of paragraph (2)
9    of this subsection (d), the benchmarks as set forth by
10    paragraph (1) of this subsection (d), and the requirements
11    for sourcing agreements contained in paragraph (3) of this
12    subsection (d). As part of the annual procurement planning
13    process, the owners of clean coal facilities may offer
14    proposals to the Agency sourcing agreements with utilities
15    and alternate retail electric suppliers required to comply
16    with this subsection (d), as well as item (5) of subsection
17    (d) of Section 16-115 of the Public Utilities Act, covering
18    electricity generated by such facilities. In the case of
19    sourcing agreements that are power purchase agreements,
20    the contract price for electricity sales shall be
21    established on a cost-of-service basis. In the case of
22    sourcing agreements that are contracts for differences,
23    the contract price from which the reference price is
24    subtracted shall be established on a cost-of-service
25    basis. The sourcing agreements shall be included under and
26    governed by provisions of the Public Utilities Act.

 

 

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1        (6) Costs incurred under this subsection (d) or
2    pursuant to a contract entered into under this subsection
3    (d) shall be deemed prudently incurred and reasonable in
4    amount and the electric utility shall be entitled to full
5    cost recovery pursuant to the tariffs filed with the
6    Commission.
7    (d-5) Zero emission standard.
8        (1) Beginning with the delivery year commencing on June
9    1, 2017, the Agency shall, for electric utilities that
10    serve at least 100,000 retail customers in this State,
11    procure contracts with zero emission facilities that are
12    reasonably capable of generating cost-effective zero
13    emission credits in an amount approximately equal to 16% of
14    the actual amount of electricity delivered by each electric
15    utility to retail customers in the State during calendar
16    year 2014. For an electric utility serving fewer than
17    100,000 retail customers in this State that requested,
18    under Section 16-111.5 of the Public Utilities Act, that
19    the Agency procure power and energy for all or a portion of
20    the utility's Illinois load for the delivery year
21    commencing June 1, 2016, the Agency shall procure contracts
22    with zero emission facilities that are reasonably capable
23    of generating cost-effective zero emission credits in an
24    amount approximately equal to 16% of the portion of power
25    and energy to be procured by the Agency for the utility.
26    The duration of the contracts procured under this

 

 

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1    subsection (d-5) shall be for a term of 10 years ending May
2    31, 2027. The quantity of zero emission credits to be
3    procured under the contracts shall be all of the zero
4    emission credits generated by the zero emission facility in
5    each delivery year; however, if the zero emission facility
6    is owned by more than one entity, then the quantity of zero
7    emission credits to be procured under the contracts shall
8    be the amount of zero emission credits that are generated
9    from the portion of the zero emission facility that is
10    owned by the winning supplier.
11        The 16% value identified in this paragraph (1) is the
12    average of the percentage targets in subparagraph (B) of
13    paragraph (1) of subsection (c) of Section 1-75 of this Act
14    for the 5 delivery years beginning June 1, 2017.
15        The procurement process shall be subject to the
16    following provisions:
17            (A) Those zero emission facilities that intend to
18        participate in the procurement shall submit to the
19        Agency the following eligibility information for each
20        zero emission facility on or before the date
21        established by the Agency:
22                (i) the in-service date and remaining useful
23            life of the zero emission facility;
24                (ii) the amount of power generated annually
25            for each of the years 2005 through 2015, and the
26            projected zero emission credits to be generated

 

 

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1            over the remaining useful life of the zero emission
2            facility, which shall be used to determine the
3            capability of each facility;
4                (iii) the annual zero emission facility cost
5            projections, expressed on a per megawatthour
6            basis, over the next 6 delivery years, which shall
7            include the following: operation and maintenance
8            expenses; fully allocated overhead costs, which
9            shall be allocated using the methodology developed
10            by the Institute for Nuclear Power Operations;
11            fuel expenditures; non-fuel capital expenditures;
12            spent fuel expenditures; a return on working
13            capital; the cost of operational and market risks
14            that could be avoided by ceasing operation; and any
15            other costs necessary for continued operations,
16            provided that "necessary" means, for purposes of
17            this item (iii), that the costs could reasonably be
18            avoided only by ceasing operations of the zero
19            emission facility; and
20                (iv) a commitment to continue operating, for
21            the duration of the contract or contracts executed
22            under the procurement held under this subsection
23            (d-5), the zero emission facility that produces
24            the zero emission credits to be procured in the
25            procurement.
26        The information described in item (iii) of this

 

 

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1    subparagraph (A) may be submitted on a confidential basis
2    and shall be treated and maintained by the Agency, the
3    procurement administrator, and the Commission as
4    confidential and proprietary and exempt from disclosure
5    under subparagraphs (a) and (g) of paragraph (1) of Section
6    7 of the Freedom of Information Act. The Office of Attorney
7    General shall have access to, and maintain the
8    confidentiality of, such information pursuant to Section
9    6.5 of the Attorney General Act.
10            (B) The price for each zero emission credit
11        procured under this subsection (d-5) for each delivery
12        year shall be in an amount that equals the Social Cost
13        of Carbon, expressed on a price per megawatthour basis.
14        However, to ensure that the procurement remains
15        affordable to retail customers in this State if
16        electricity prices increase, the price in an
17        applicable delivery year shall be reduced below the
18        Social Cost of Carbon by the amount ("Price
19        Adjustment") by which the market price index for the
20        applicable delivery year exceeds the baseline market
21        price index for the consecutive 12-month period ending
22        May 31, 2016. If the Price Adjustment is greater than
23        or equal to the Social Cost of Carbon in an applicable
24        delivery year, then no payments shall be due in that
25        delivery year. The components of this calculation are
26        defined as follows:

 

 

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1                (i) Social Cost of Carbon: The Social Cost of
2            Carbon is $16.50 per megawatthour, which is based
3            on the U.S. Interagency Working Group on Social
4            Cost of Carbon's price in the August 2016 Technical
5            Update using a 3% discount rate, adjusted for
6            inflation for each year of the program. Beginning
7            with the delivery year commencing June 1, 2023, the
8            price per megawatthour shall increase by $1 per
9            megawatthour, and continue to increase by an
10            additional $1 per megawatthour each delivery year
11            thereafter.
12                (ii) Baseline market price index: The baseline
13            market price index for the consecutive 12-month
14            period ending May 31, 2016 is $31.40 per
15            megawatthour, which is based on the sum of (aa) the
16            average day-ahead energy price across all hours of
17            such 12-month period at the PJM Interconnection
18            LLC Northern Illinois Hub, (bb) 50% multiplied by
19            the Base Residual Auction, or its successor,
20            capacity price for the rest of the RTO zone group
21            determined by PJM Interconnection LLC, divided by
22            24 hours per day, and (cc) 50% multiplied by the
23            Planning Resource Auction, or its successor,
24            capacity price for Zone 4 determined by the
25            Midcontinent Independent System Operator, Inc.,
26            divided by 24 hours per day.

 

 

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

 

 

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1                    Interconnection LLC, divided by 24 hours
2                    per day and, (2) 50% multiplied by the
3                    resource auction price determined in the
4                    resource auction administered by the
5                    Midcontinent Independent System Operator,
6                    Inc., in which the largest percentage of
7                    load cleared for Local Resource Zone 4,
8                    divided by 24 hours per day, and where such
9                    price is determined by the Midcontinent
10                    Independent System Operator, Inc.
11                        (II) For the delivery year commencing
12                    June 1, 2020, and each year thereafter, the
13                    projected capacity price shall be equal to
14                    the sum of (1) 50% multiplied by the Base
15                    Residual Auction, or its successor, price
16                    for the ComEd zone as determined by PJM
17                    Interconnection LLC, divided by 24 hours
18                    per day, and (2) 50% multiplied by the
19                    resource auction price determined in the
20                    resource auction administered by the
21                    Midcontinent Independent System Operator,
22                    Inc., in which the largest percentage of
23                    load cleared for Local Resource Zone 4,
24                    divided by 24 hours per day, and where such
25                    price is determined by the Midcontinent
26                    Independent System Operator, Inc.

 

 

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1            For purposes of this subsection (d-5):
2                "Rest of the RTO" and "ComEd Zone" shall have
3            the meaning ascribed to them by PJM
4            Interconnection, LLC.
5                "RTO" means regional transmission
6            organization.
7            (C) No later than 45 days after June 1, 2017 (the
8        effective date of Public Act 99-906) this amendatory
9        Act of the 99th General Assembly, the Agency shall
10        publish its proposed zero emission standard
11        procurement plan. The plan shall be consistent with the
12        provisions of this paragraph (1) and shall provide that
13        winning bids shall be selected based on public interest
14        criteria that include, but are not limited to,
15        minimizing carbon dioxide emissions that result from
16        electricity consumed in Illinois and minimizing sulfur
17        dioxide, nitrogen oxide, and particulate matter
18        emissions that adversely affect the citizens of this
19        State. In particular, the selection of winning bids
20        shall take into account the incremental environmental
21        benefits resulting from the procurement, such as any
22        existing environmental benefits that are preserved by
23        the procurements held under Public Act 99-906 this
24        amendatory Act of the 99th General Assembly and would
25        cease to exist if the procurements were not held,
26        including the preservation of zero emission

 

 

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1        facilities. The plan shall also describe in detail how
2        each public interest factor shall be considered and
3        weighted in the bid selection process to ensure that
4        the public interest criteria are applied to the
5        procurement and given full effect.
6            For purposes of developing the plan, the Agency
7        shall consider any reports issued by a State agency,
8        board, or commission under House Resolution 1146 of the
9        98th General Assembly and paragraph (4) of subsection
10        (d) of Section 1-75 of this Act, as well as publicly
11        available analyses and studies performed by or for
12        regional transmission organizations that serve the
13        State and their independent market monitors.
14            Upon publishing of the zero emission standard
15        procurement plan, copies of the plan shall be posted
16        and made publicly available on the Agency's website.
17        All interested parties shall have 10 days following the
18        date of posting to provide comment to the Agency on the
19        plan. All comments shall be posted to the Agency's
20        website. Following the end of the comment period, but
21        no more than 60 days later than June 1, 2017 (the
22        effective date of Public Act 99-906) this amendatory
23        Act of the 99th General Assembly, the Agency shall
24        revise the plan as necessary based on the comments
25        received and file its zero emission standard
26        procurement plan with the Commission.

 

 

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1            If the Commission determines that the plan will
2        result in the procurement of cost-effective zero
3        emission credits, then the Commission shall, after
4        notice and hearing, but no later than 45 days after the
5        Agency filed the plan, approve the plan or approve with
6        modification. For purposes of this subsection (d-5),
7        "cost effective" means the projected costs of
8        procuring zero emission credits from zero emission
9        facilities do not cause the limit stated in paragraph
10        (2) of this subsection to be exceeded.
11            (C-5) As part of the Commission's review and
12        acceptance or rejection of the procurement results,
13        the Commission shall, in its public notice of
14        successful bidders:
15                (i) identify how the winning bids satisfy the
16            public interest criteria described in subparagraph
17            (C) of this paragraph (1) of minimizing carbon
18            dioxide emissions that result from electricity
19            consumed in Illinois and minimizing sulfur
20            dioxide, nitrogen oxide, and particulate matter
21            emissions that adversely affect the citizens of
22            this State;
23                (ii) specifically address how the selection of
24            winning bids takes into account the incremental
25            environmental benefits resulting from the
26            procurement, including any existing environmental

 

 

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1            benefits that are preserved by the procurements
2            held under Public Act 99-906 this amendatory Act of
3            the 99th General Assembly and would have ceased to
4            exist if the procurements had not been held, such
5            as the preservation of zero emission facilities;
6                (iii) quantify the environmental benefit of
7            preserving the resources identified in item (ii)
8            of this subparagraph (C-5), including the
9            following:
10                    (aa) the value of avoided greenhouse gas
11                emissions measured as the product of the zero
12                emission facilities' output over the contract
13                term multiplied by the U.S. Environmental
14                Protection Agency eGrid subregion carbon
15                dioxide emission rate and the U.S. Interagency
16                Working Group on Social Cost of Carbon's price
17                in the August 2016 Technical Update using a 3%
18                discount rate, adjusted for inflation for each
19                delivery year; and
20                    (bb) the costs of replacement with other
21                zero carbon dioxide resources, including wind
22                and photovoltaic, based upon the simple
23                average of the following:
24                        (I) the price, or if there is more than
25                    one price, the average of the prices, paid
26                    for renewable energy credits from new

 

 

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1                    utility-scale wind projects in the
2                    procurement events specified in item (i)
3                    of subparagraph (G) of paragraph (1) of
4                    subsection (c) of Section 1-75 of this Act;
5                    and
6                        (II) the price, or if there is more
7                    than one price, the average of the prices,
8                    paid for renewable energy credits from new
9                    utility-scale solar projects and
10                    brownfield site photovoltaic projects in
11                    the procurement events specified in item
12                    (ii) of subparagraph (G) of paragraph (1)
13                    of subsection (c) of Section 1-75 of this
14                    Act and, after January 1, 2015, renewable
15                    energy credits from photovoltaic
16                    distributed generation projects in
17                    procurement events held under subsection
18                    (c) of Section 1-75 of this Act.
19            Each utility shall enter into binding contractual
20        arrangements with the winning suppliers.
21            The procurement described in this subsection
22        (d-5), including, but not limited to, the execution of
23        all contracts procured, shall be completed no later
24        than May 10, 2017. Based on the effective date of
25        Public Act 99-906 this amendatory Act of the 99th
26        General Assembly, the Agency and Commission may, as

 

 

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1        appropriate, modify the various dates and timelines
2        under this subparagraph and subparagraphs (C) and (D)
3        of this paragraph (1). The procurement and plan
4        approval processes required by this subsection (d-5)
5        shall be conducted in conjunction with the procurement
6        and plan approval processes required by subsection (c)
7        of this Section and Section 16-111.5 of the Public
8        Utilities Act, to the extent practicable.
9        Notwithstanding whether a procurement event is
10        conducted under Section 16-111.5 of the Public
11        Utilities Act, the Agency shall immediately initiate a
12        procurement process on June 1, 2017 (the effective date
13        of Public Act 99-906) this amendatory Act of the 99th
14        General Assembly.
15            (D) Following the procurement event described in
16        this paragraph (1) and consistent with subparagraph
17        (B) of this paragraph (1), the Agency shall calculate
18        the payments to be made under each contract for the
19        next delivery year based on the market price index for
20        that delivery year. The Agency shall publish the
21        payment calculations no later than May 25, 2017 and
22        every May 25 thereafter.
23            (E) Notwithstanding the requirements of this
24        subsection (d-5), the contracts executed under this
25        subsection (d-5) shall provide that the zero emission
26        facility may, as applicable, suspend or terminate

 

 

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1        performance under the contracts in the following
2        instances:
3                (i) A zero emission facility shall be excused
4            from its performance under the contract for any
5            cause beyond the control of the resource,
6            including, but not restricted to, acts of God,
7            flood, drought, earthquake, storm, fire,
8            lightning, epidemic, war, riot, civil disturbance
9            or disobedience, labor dispute, labor or material
10            shortage, sabotage, acts of public enemy,
11            explosions, orders, regulations or restrictions
12            imposed by governmental, military, or lawfully
13            established civilian authorities, which, in any of
14            the foregoing cases, by exercise of commercially
15            reasonable efforts the zero emission facility
16            could not reasonably have been expected to avoid,
17            and which, by the exercise of commercially
18            reasonable efforts, it has been unable to
19            overcome. In such event, the zero emission
20            facility shall be excused from performance for the
21            duration of the event, including, but not limited
22            to, delivery of zero emission credits, and no
23            payment shall be due to the zero emission facility
24            during the duration of the event.
25                (ii) A zero emission facility shall be
26            permitted to terminate the contract if legislation

 

 

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1            is enacted into law by the General Assembly that
2            imposes or authorizes a new tax, special
3            assessment, or fee on the generation of
4            electricity, the ownership or leasehold of a
5            generating unit, or the privilege or occupation of
6            such generation, ownership, or leasehold of
7            generation units by a zero emission facility.
8            However, the provisions of this item (ii) do not
9            apply to any generally applicable tax, special
10            assessment or fee, or requirements imposed by
11            federal law.
12                (iii) A zero emission facility shall be
13            permitted to terminate the contract in the event
14            that the resource requires capital expenditures in
15            excess of $40,000,000 that were neither known nor
16            reasonably foreseeable at the time it executed the
17            contract and that a prudent owner or operator of
18            such resource would not undertake.
19                (iv) A zero emission facility shall be
20            permitted to terminate the contract in the event
21            the Nuclear Regulatory Commission terminates the
22            resource's license.
23            (F) If the zero emission facility elects to
24        terminate a contract under this subparagraph (E, of
25        this paragraph (1), then the Commission shall reopen
26        the docket in which the Commission approved the zero

 

 

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1        emission standard procurement plan under subparagraph
2        (C) of this paragraph (1) and, after notice and
3        hearing, enter an order acknowledging the contract
4        termination election if such termination is consistent
5        with the provisions of this subsection (d-5).
6        (2) For purposes of this subsection (d-5), the amount
7    paid per kilowatthour means the total amount paid for
8    electric service expressed on a per kilowatthour basis. For
9    purposes of this subsection (d-5), the total amount paid
10    for electric service includes, without limitation, amounts
11    paid for supply, transmission, distribution, surcharges,
12    and add-on taxes.
13        Notwithstanding the requirements of this subsection
14    (d-5), the contracts executed under this subsection (d-5)
15    shall provide that the total of zero emission credits
16    procured under a procurement plan shall be subject to the
17    limitations of this paragraph (2). For each delivery year,
18    the contractual volume receiving payments in such year
19    shall be reduced for all retail customers based on the
20    amount necessary to limit the net increase that delivery
21    year to the costs of those credits included in the amounts
22    paid by eligible retail customers in connection with
23    electric service to no more than 1.65% of the amount paid
24    per kilowatthour by eligible retail customers during the
25    year ending May 31, 2009. The result of this computation
26    shall apply to and reduce the procurement for all retail

 

 

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1    customers, and all those customers shall pay the same
2    single, uniform cents per kilowatthour charge under
3    subsection (k) of Section 16-108 of the Public Utilities
4    Act. To arrive at a maximum dollar amount of zero emission
5    credits to be paid for the particular delivery year, the
6    resulting per kilowatthour amount shall be applied to the
7    actual amount of kilowatthours of electricity delivered by
8    the electric utility in the delivery year immediately prior
9    to the procurement, to all retail customers in its service
10    territory. Unpaid contractual volume for any delivery year
11    shall be paid in any subsequent delivery year in which such
12    payments can be made without exceeding the amount specified
13    in this paragraph (2). The calculations required by this
14    paragraph (2) shall be made only once for each procurement
15    plan year. Once the determination as to the amount of zero
16    emission credits to be paid is made based on the
17    calculations set forth in this paragraph (2), no subsequent
18    rate impact determinations shall be made and no adjustments
19    to those contract amounts shall be allowed. All costs
20    incurred under those contracts and in implementing this
21    subsection (d-5) shall be recovered by the electric utility
22    as provided in this Section.
23        No later than June 30, 2019, the Commission shall
24    review the limitation on the amount of zero emission
25    credits procured under this subsection (d-5) and report to
26    the General Assembly its findings as to whether that

 

 

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1    limitation unduly constrains the procurement of
2    cost-effective zero emission credits.
3        (3) Six years after the execution of a contract under
4    this subsection (d-5), the Agency shall determine whether
5    the actual zero emission credit payments received by the
6    supplier over the 6-year period exceed the Average ZEC
7    Payment. In addition, at the end of the term of a contract
8    executed under this subsection (d-5), or at the time, if
9    any, a zero emission facility's contract is terminated
10    under subparagraph (E) of paragraph (1) of this subsection
11    (d-5), then the Agency shall determine whether the actual
12    zero emission credit payments received by the supplier over
13    the term of the contract exceed the Average ZEC Payment,
14    after taking into account any amounts previously credited
15    back to the utility under this paragraph (3). If the Agency
16    determines that the actual zero emission credit payments
17    received by the supplier over the relevant period exceed
18    the Average ZEC Payment, then the supplier shall credit the
19    difference back to the utility. The amount of the credit
20    shall be remitted to the applicable electric utility no
21    later than 120 days after the Agency's determination, which
22    the utility shall reflect as a credit on its retail
23    customer bills as soon as practicable; however, the credit
24    remitted to the utility shall not exceed the total amount
25    of payments received by the facility under its contract.
26        For purposes of this Section, the Average ZEC Payment

 

 

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1    shall be calculated by multiplying the quantity of zero
2    emission credits delivered under the contract times the
3    average contract price. The average contract price shall be
4    determined by subtracting the amount calculated under
5    subparagraph (B) of this paragraph (3) from the amount
6    calculated under subparagraph (A) of this paragraph (3), as
7    follows:
8            (A) The average of the Social Cost of Carbon, as
9        defined in subparagraph (B) of paragraph (1) of this
10        subsection (d-5), during the term of the contract.
11            (B) The average of the market price indices, as
12        defined in subparagraph (B) of paragraph (1) of this
13        subsection (d-5), during the term of the contract,
14        minus the baseline market price index, as defined in
15        subparagraph (B) of paragraph (1) of this subsection
16        (d-5).
17    If the subtraction yields a negative number, then the
18Average ZEC Payment shall be zero.
19        (4) Cost-effective zero emission credits procured from
20    zero emission facilities shall satisfy the applicable
21    definitions set forth in Section 1-10 of this Act.
22        (5) The electric utility shall retire all zero emission
23    credits used to comply with the requirements of this
24    subsection (d-5).
25        (6) Electric utilities shall be entitled to recover all
26    of the costs associated with the procurement of zero

 

 

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1    emission credits through an automatic adjustment clause
2    tariff in accordance with subsection (k) and (m) of Section
3    16-108 of the Public Utilities Act, and the contracts
4    executed under this subsection (d-5) shall provide that the
5    utilities' payment obligations under such contracts shall
6    be reduced if an adjustment is required under subsection
7    (m) of Section 16-108 of the Public Utilities Act.
8        (7) This subsection (d-5) shall become inoperative on
9    January 1, 2028.
10    (e) The draft procurement plans are subject to public
11comment, as required by Section 16-111.5 of the Public
12Utilities Act.
13    (f) The Agency shall submit the final procurement plan to
14the Commission. The Agency shall revise a procurement plan if
15the Commission determines that it does not meet the standards
16set forth in Section 16-111.5 of the Public Utilities Act.
17    (g) The Agency shall assess fees to each affected utility
18to recover the costs incurred in preparation of the annual
19procurement plan for the utility.
20    (h) The Agency shall assess fees to each bidder to recover
21the costs incurred in connection with a competitive procurement
22process.
23    (i) A renewable energy credit, carbon emission credit, or
24zero emission credit can only be used once to comply with a
25single portfolio or other standard as set forth in subsection
26(c), subsection (d), or subsection (d-5) of this Section,

 

 

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1respectively. A renewable energy credit, carbon emission
2credit, or zero emission credit cannot be used to satisfy the
3requirements of more than one standard. If more than one type
4of credit is issued for the same megawatt hour of energy, only
5one credit can be used to satisfy the requirements of a single
6standard. After such use, the credit must be retired together
7with any other credits issued for the same megawatt hour of
8energy.
9(Source: P.A. 98-463, eff. 8-16-13; 99-536, eff. 7-8-16;
1099-906, eff. 6-1-17; revised 9-25-17.)
 
11    Section 99. Effective date. This Act takes effect June 1,
122018.