SB0678 EngrossedLRB097 04938 ASK 44978 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 1. Short title. This amendatory Act may be referred
5to as the Illinois Renewable Electricity Resources Act.
 
6    Section 5. The Illinois Power Agency Act is amended by
7changing Sections 1-10, 1-20, 1-56, and 1-75 and by adding
8Sections 1-76, 1-76.5, 1-77.5, 1-79, and 1-81 as follows:
 
9    (20 ILCS 3855/1-10)
10    Sec. 1-10. Definitions.
11    "Agency" means the Illinois Power Agency.
12    "Agency loan agreement" means any agreement pursuant to
13which the Illinois Finance Authority agrees to loan the
14proceeds of revenue bonds issued with respect to a project to
15the Agency upon terms providing for loan repayment installments
16at least sufficient to pay when due all principal of, interest
17and premium, if any, on those revenue bonds, and providing for
18maintenance, insurance, and other matters in respect of the
19project.
20    "Authority" means the Illinois Finance Authority.
21    "Bundled renewable energy resources" means electricity
22generated by a renewable energy resource and its associated

 

 

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1renewable energy credit.
2    "Clean coal electricity buyer" means (1) each electric
3utility and (2) each alternative electric retail supplier that
4is subject to the requirements of subsection (d) of Section
51-75 of this Act and paragraph (5) of subsection (d) of Section
616-115 of the Public Utilities Act.
7    "Clean coal energy" means all energy produced by the
8initial clean coal facility.
9    "Clean coal facility" means an electric generating
10facility that uses primarily coal as a feedstock and that
11captures and sequesters carbon dioxide emissions at the
12following levels: at least 50% of the total carbon dioxide
13emissions that the facility would otherwise emit if, at the
14time construction commences, the facility is scheduled to
15commence operation before 2016, at least 70% of the total
16carbon dioxide emissions that the facility would otherwise emit
17if, at the time construction commences, the facility is
18scheduled to commence operation during 2016 or 2017, and at
19least 90% of the total carbon dioxide emissions that the
20facility would otherwise emit if, at the time construction
21commences, the facility is scheduled to commence operation
22after 2017. The power block of the clean coal facility shall
23not exceed allowable emission rates for sulfur dioxide,
24nitrogen oxides, carbon monoxide, particulates and mercury for
25a natural gas-fired combined-cycle facility the same size as
26and in the same location as the clean coal facility at the time

 

 

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1the clean coal facility obtains an approved air permit. All
2coal used by a clean coal facility shall have high volatile
3bituminous rank and greater than 1.7 pounds of sulfur per
4million btu content, unless the clean coal facility does not
5use gasification technology and was operating as a conventional
6coal-fired electric generating facility on June 1, 2009 (the
7effective date of Public Act 95-1027).
8    "Clean coal fraction" means, with respect to a clean coal
9electricity buyer for a month, a fraction, the numerator of
10which is such clean coal electricity buyer's retail market
11sales of electricity (expressed in kilowatthours sold) in the
12State during the third month preceding the applicable month and
13the denominator of which is the total retail market sales of
14electricity (expressed in kilowatthours sold) in the State by
15all clean coal electricity buyers during such third month
16preceding the applicable month, as such fraction may be
17adjusted pursuant to subparagraph (E) of paragraph (2) of
18subsection (d) of Section 1-75 of this Act.
19    "Clean coal SNG brownfield facility" means a facility that
20(1) has commenced construction by July 1, 2015 on an urban
21brownfield site in a municipality with at least 1,000,000
22residents; (2) uses a gasification process to produce
23substitute natural gas; (3) uses coal as at least 50% of the
24total feedstock over the term of any sourcing agreement with a
25utility and the remainder of the feedstock may be either
26petroleum coke or coal, with all such coal having a high

 

 

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1bituminous rank and greater than 1.7 pounds of sulfur per
2million Btu content unless the facility reasonably determines
3that it is necessary to use additional petroleum coke to
4deliver additional consumer savings, in which case the facility
5shall use coal for at least 35% of the total feedstock over the
6term of any sourcing agreement; and (4) captures and sequesters
7at least 85% of the total carbon dioxide emissions that the
8facility would otherwise emit.
9    "Clean coal SNG facility" means a facility that uses a
10gasification process to produce substitute natural gas, that
11sequesters at least 90% of the total carbon dioxide emissions
12that the facility would otherwise emit, that uses at least 90%
13coal as a feedstock, with all such coal having a high
14bituminous rank and greater than 1.7 pounds of sulfur per
15million btu content, and that has a valid and effective permit
16to construct emission sources and air pollution control
17equipment and approval with respect to the federal regulations
18for Prevention of Significant Deterioration of Air Quality
19(PSD) for the plant pursuant to the federal Clean Air Act;
20provided, however, a clean coal SNG brownfield facility shall
21not be a clean coal SNG facility.
22    "Commission" means the Illinois Commerce Commission.
23    "Costs incurred in connection with the development and
24construction of a facility" means:
25        (1) the cost of acquisition of all real property,
26    fixtures, and improvements in connection therewith and

 

 

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1    equipment, personal property, and other property, rights,
2    and easements acquired that are deemed necessary for the
3    operation and maintenance of the facility;
4        (2) financing costs with respect to bonds, notes, and
5    other evidences of indebtedness of the Agency;
6        (3) all origination, commitment, utilization,
7    facility, placement, underwriting, syndication, credit
8    enhancement, and rating agency fees;
9        (4) engineering, design, procurement, consulting,
10    legal, accounting, title insurance, survey, appraisal,
11    escrow, trustee, collateral agency, interest rate hedging,
12    interest rate swap, capitalized interest, contingency, as
13    required by lenders, and other financing costs, and other
14    expenses for professional services; and
15        (5) the costs of plans, specifications, site study and
16    investigation, installation, surveys, other Agency costs
17    and estimates of costs, and other expenses necessary or
18    incidental to determining the feasibility of any project,
19    together with such other expenses as may be necessary or
20    incidental to the financing, insuring, acquisition, and
21    construction of a specific project and starting up,
22    commissioning, and placing that project in operation.
23    "Delivery services" has the same definition as found in
24Section 16-102 of the Public Utilities Act.
25    "Delivery services non-eligible retail customers" means
26the retail customers in an electric utility's service area for

 

 

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1which the electric utility provides delivery services, but
2which are not eligible retail customers as defined in
3subsection (a) of Section 1-75 of this Act.
4    "Department" means the Department of Commerce and Economic
5Opportunity.
6    "Director" means the Director of the Illinois Power Agency.
7    "Demand-response" means measures that decrease peak
8electricity demand or shift demand from peak to off-peak
9periods.
10    "Distributed renewable energy generation device" means a
11device that is:
12        (1) powered by wind, solar thermal energy,
13    photovoltaic cells and panels, biodiesel, crops and
14    untreated and unadulterated organic waste biomass, tree
15    waste, and hydropower that does not involve new
16    construction or significant expansion of hydropower dams;
17        (2) interconnected at the distribution system level of
18    either an electric utility as defined in this Section, an
19    alternative retail electric supplier as defined in Section
20    16-102 of the Public Utilities Act, a municipal utility as
21    defined in Section 3-105 of the Public Utilities Act, or a
22    rural electric cooperative as defined in Section 3-119 of
23    the Public Utilities Act;
24        (3) located on the customer side of the customer's
25    electric meter and is generally used to offset that
26    customer's electricity load; and

 

 

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1        (4) limited in nameplate capacity to no more than 2,000
2    kilowatts.
3    "Energy efficiency" means measures that reduce the amount
4of electricity or natural gas required to achieve a given end
5use.
6    "Electric utility" has the same definition as found in
7Section 16-102 of the Public Utilities Act.
8    "Excluded renewable energy resources contract costs" means
9the amount by which the costs of renewable energy resources,
10purchased for a particular year to meet the renewable energy
11resources standards of paragraph (1) of subsection (c) of
12Section 1-75 of this Act applicable to the load of an electric
13utility's eligible retail customers pursuant to a contract with
14a term greater than one year that the electric utility entered
15into in a previous year in accordance with a procurement
16approved by the Commission pursuant to Section 16-111.5 of the
17Public Utilities Act, exceed the limitations imposed by
18paragraph (2) of subsection (c) of Section 1-75 of this Act for
19the particular year.
20    "Facility" means an electric generating unit or a
21co-generating unit that produces electricity along with
22related equipment necessary to connect the facility to an
23electric transmission or distribution system.
24    "Governmental aggregator" means one or more units of local
25government that individually or collectively procure
26electricity to serve residential retail electrical loads

 

 

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1located within its or their jurisdiction.
2    "Initial clean coal facility" means an electric generating
3facility using gasification technology that: (1) has a
4nameplate capacity of at least 500 MW; (2) irrevocably commits
5in its proposed sourcing agreement to use coal for at least 50%
6of the total feedstock over the term of a sourcing agreement,
7with all coal having high volatile bituminous rank and greater
8than 1.7 pounds of sulfur per million btu content; (3) is
9designed to capture and sequester at least 90% of the carbon
10dioxide emissions that the portion of the facility, if any,
11that produces SNG would otherwise emit and at least 50% of the
12total carbon dioxide emissions that the facility as a whole
13would otherwise emit; (4) absent an appeal of a permit or
14regulatory order, is reasonably capable of achieving
15commercial operation by no later than 5 years after the
16execution of the sourcing agreements; (5) has a feasible
17financing plan; (6) has a reliable and cost-effective
18transmission plan to deliver energy to Commonwealth Edison
19Company and Ameren Illinois; and (7) has a power block designed
20not to exceed allowable emission rates for sulfur dioxide,
21nitrogen oxides, carbon monoxide, particulates, and mercury
22for a natural gas-fired combined-cycle facility the same size
23as and in the same location as the electric generating facility
24at the time the electric generating facility obtains an
25approved air permit.
26    "Large electric customer" means a customer that (1) obtains

 

 

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1retail electric service in the State from an electric utility
2or an alternative retail electric supplier and (2) is not a
3small electric customer.
4    "Local government" means a unit of local government as
5defined in Article VII of Section 1 of the Illinois
6Constitution.
7    "Municipality" means a city, village, or incorporated
8town.
9    "Person" means any natural person, firm, partnership,
10corporation, either domestic or foreign, company, association,
11limited liability company, joint stock company, or association
12and includes any trustee, receiver, assignee, or personal
13representative thereof.
14    "Project" means the planning, bidding, and construction of
15a facility.
16    "Public utility" has the same definition as found in
17Section 3-105 of the Public Utilities Act.
18    "Real property" means any interest in land together with
19all structures, fixtures, and improvements thereon, including
20lands under water and riparian rights, any easements,
21covenants, licenses, leases, rights-of-way, uses, and other
22interests, together with any liens, judgments, mortgages, or
23other claims or security interests related to real property.
24    "Renewable energy credit" means a tradable credit that
25represents the environmental attributes of a certain amount of
26energy produced from a renewable energy resource.

 

 

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1    "Renewable energy resources" includes energy and its
2associated renewable energy credit or renewable energy credits
3from wind, solar thermal energy, photovoltaic cells and panels,
4biodiesel, anaerobic digestion, crops and untreated and
5unadulterated organic waste biomass, tree waste, hydropower
6that does not involve new construction or significant expansion
7of hydropower dams, and other alternative sources of
8environmentally preferable energy. For purposes of this Act,
9landfill gas produced in the State is considered a renewable
10energy resource. "Renewable energy resources" does not include
11the incineration or burning of tires, garbage, general
12household, institutional, and commercial waste, industrial
13lunchroom or office waste, landscape waste other than tree
14waste, railroad crossties, utility poles, or construction or
15demolition debris, other than untreated and unadulterated
16waste wood.
17    "Revenue bond" means any bond, note, or other evidence of
18indebtedness issued by the Authority, the principal and
19interest of which is payable solely from revenues or income
20derived from any project or activity of the Agency.
21    "Sequester" means permanent storage of carbon dioxide by
22injecting it into a saline aquifer, a depleted gas reservoir,
23or an oil reservoir, directly or through an enhanced oil
24recovery process that may involve intermediate storage,
25regardless of whether these activities are conducted by a clean
26coal facility, the initial clean coal facility, a clean coal

 

 

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1SNG facility, a clean coal SNG brownfield facility, or a party
2with which a clean coal facility, initial clean coal facility,
3or clean coal SNG facility, or clean coal SNG brownfield
4facility has contracted for such purposes.
5    "Service area" has the same definition as found in Section
616-102 of the Public Utilities Act.
7    "Sourcing agreement" means (i) in the case of an electric
8utility, an agreement between the owner of a clean coal
9facility or initial clean coal facility and such electric
10utility, which agreement shall have terms and conditions
11meeting the requirements of paragraph (3) of subsection (d) of
12Section 1-75, (ii) in the case of an alternative retail
13electric supplier, an agreement between the owner of a clean
14coal facility or initial clean coal facility and such
15alternative retail electric supplier, which agreement shall
16have terms and conditions meeting the requirements of Section
1716-115(d)(5) of the Public Utilities Act, and (iii) in case of
18a gas utility, an agreement between the owner of a clean coal
19SNG brownfield facility and the gas utility, which agreement
20shall have the terms and conditions meeting the requirements of
21subsection (h-1) of Section 9-220 of the Public Utilities Act.
22    "Small electric customer" means a residential retail
23electric customer that obtains electric service in the State
24from an electric utility or an alternative retail electric
25supplier.
26    "Substitute natural gas" or "SNG" means a gas manufactured

 

 

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1by gasification of hydrocarbon feedstock, which is
2substantially interchangeable in use and distribution with
3conventional natural gas.
4    "Total resource cost test" or "TRC test" means a standard
5that is met if, for an investment in energy efficiency or
6demand-response measures, the benefit-cost ratio is greater
7than one. The benefit-cost ratio is the ratio of the net
8present value of the total benefits of the program to the net
9present value of the total costs as calculated over the
10lifetime of the measures. A total resource cost test compares
11the sum of avoided electric utility costs, representing the
12benefits that accrue to the system and the participant in the
13delivery of those efficiency measures, as well as other
14quantifiable societal benefits, including avoided natural gas
15utility costs, to the sum of all incremental costs of end-use
16measures that are implemented due to the program (including
17both utility and participant contributions), plus costs to
18administer, deliver, and evaluate each demand-side program, to
19quantify the net savings obtained by substituting the
20demand-side program for supply resources. In calculating
21avoided costs of power and energy that an electric utility
22would otherwise have had to acquire, reasonable estimates shall
23be included of financial costs likely to be imposed by future
24regulations and legislation on emissions of greenhouse gases.
25(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
2696-784, eff. 8-28-09; 96-1000, eff. 7-2-10; 97-96, eff.

 

 

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17-13-11; 97-239, eff. 8-2-11; 97-491, eff. 8-22-11; revised
29-7-11.)
 
3    (20 ILCS 3855/1-20)
4    Sec. 1-20. General powers of the Agency.
5    (a) The Agency is authorized to do each of the following:
6        (1) Develop electricity procurement plans to ensure
7    adequate, reliable, affordable, efficient, and
8    environmentally sustainable electric service at the lowest
9    total cost over time, taking into account any benefits of
10    price stability, for electric utilities that on December
11    31, 2005 provided electric service to at least 100,000
12    customers in Illinois and for small multi-jurisdictional
13    electric utilities that (A) on December 31, 2005 served
14    less than 100,000 customers in Illinois and (B) request a
15    procurement plan for their Illinois jurisdictional load.
16    The procurement plans shall be updated on an annual basis
17    and shall include electricity generated from renewable
18    resources sufficient to achieve the standards specified in
19    this Act. For periods beginning on and after June 1, 2012,
20    the procurement plans shall also include procurement of
21    renewable energy credits, in accordance with subsection
22    (c) of Section 1-75 of this Act, in amounts projected to be
23    sufficient to meet the renewable energy resources standard
24    specified in subsection (c) of Section 1-75 of this Act
25    with respect to the kilowatthour usage of delivery services

 

 

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1    non-eligible retail customers in such electric utilities'
2    service areas.
3        (2) Conduct competitive procurement processes to
4    procure the supply resources identified in the procurement
5    plan, pursuant to Section 16-111.5 of the Public Utilities
6    Act.
7        (3) Develop electric generation and co-generation
8    facilities that use indigenous coal or renewable
9    resources, or both, financed with bonds issued by the
10    Illinois Finance Authority.
11        (4) Supply electricity from the Agency's facilities at
12    cost to one or more of the following: municipal electric
13    systems, governmental aggregators, or rural electric
14    cooperatives in Illinois.
15    (b) Except as otherwise limited by this Act, the Agency has
16all of the powers necessary or convenient to carry out the
17purposes and provisions of this Act, including without
18limitation, each of the following:
19        (1) To have a corporate seal, and to alter that seal at
20    pleasure, and to use it by causing it or a facsimile to be
21    affixed or impressed or reproduced in any other manner.
22        (2) To use the services of the Illinois Finance
23    Authority necessary to carry out the Agency's purposes.
24        (3) To negotiate and enter into loan agreements and
25    other agreements with the Illinois Finance Authority.
26        (4) To obtain and employ personnel and hire consultants

 

 

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1    that are necessary to fulfill the Agency's purposes, and to
2    make expenditures for that purpose within the
3    appropriations for that purpose.
4        (5) To purchase, receive, take by grant, gift, devise,
5    bequest, or otherwise, lease, or otherwise acquire, own,
6    hold, improve, employ, use, and otherwise deal in and with,
7    real or personal property whether tangible or intangible,
8    or any interest therein, within the State.
9        (6) To acquire real or personal property, whether
10    tangible or intangible, including without limitation
11    property rights, interests in property, franchises,
12    obligations, contracts, and debt and equity securities,
13    and to do so by the exercise of the power of eminent domain
14    in accordance with Section 1-21; except that any real
15    property acquired by the exercise of the power of eminent
16    domain must be located within the State.
17        (7) To sell, convey, lease, exchange, transfer,
18    abandon, or otherwise dispose of, or mortgage, pledge, or
19    create a security interest in, any of its assets,
20    properties, or any interest therein, wherever situated.
21        (8) To purchase, take, receive, subscribe for, or
22    otherwise acquire, hold, make a tender offer for, vote,
23    employ, sell, lend, lease, exchange, transfer, or
24    otherwise dispose of, mortgage, pledge, or grant a security
25    interest in, use, and otherwise deal in and with, bonds and
26    other obligations, shares, or other securities (or

 

 

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1    interests therein) issued by others, whether engaged in a
2    similar or different business or activity.
3        (9) To make and execute agreements, contracts, and
4    other instruments necessary or convenient in the exercise
5    of the powers and functions of the Agency under this Act,
6    including contracts with any person, local government,
7    State agency, or other entity; and all State agencies and
8    all local governments are authorized to enter into and do
9    all things necessary to perform any such agreement,
10    contract, or other instrument with the Agency. No such
11    agreement, contract, or other instrument shall exceed 40
12    years.
13        (10) To lend money, invest and reinvest its funds in
14    accordance with the Public Funds Investment Act, and take
15    and hold real and personal property as security for the
16    payment of funds loaned or invested.
17        (11) To borrow money at such rate or rates of interest
18    as the Agency may determine, issue its notes, bonds, or
19    other obligations to evidence that indebtedness, and
20    secure any of its obligations by mortgage or pledge of its
21    real or personal property, machinery, equipment,
22    structures, fixtures, inventories, revenues, grants, and
23    other funds as provided or any interest therein, wherever
24    situated.
25        (12) To enter into agreements with the Illinois Finance
26    Authority to issue bonds whether or not the income

 

 

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1    therefrom is exempt from federal taxation.
2        (13) To procure insurance against any loss in
3    connection with its properties or operations in such amount
4    or amounts and from such insurers, including the federal
5    government, as it may deem necessary or desirable, and to
6    pay any premiums therefor.
7        (14) To negotiate and enter into agreements with
8    trustees or receivers appointed by United States
9    bankruptcy courts or federal district courts or in other
10    proceedings involving adjustment of debts and authorize
11    proceedings involving adjustment of debts and authorize
12    legal counsel for the Agency to appear in any such
13    proceedings.
14        (15) To file a petition under Chapter 9 of Title 11 of
15    the United States Bankruptcy Code or take other similar
16    action for the adjustment of its debts.
17        (16) To enter into management agreements for the
18    operation of any of the property or facilities owned by the
19    Agency.
20        (17) To enter into an agreement to transfer and to
21    transfer any land, facilities, fixtures, or equipment of
22    the Agency to one or more municipal electric systems,
23    governmental aggregators, or rural electric agencies or
24    cooperatives, for such consideration and upon such terms as
25    the Agency may determine to be in the best interest of the
26    citizens of Illinois.

 

 

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1        (18) To enter upon any lands and within any building
2    whenever in its judgment it may be necessary for the
3    purpose of making surveys and examinations to accomplish
4    any purpose authorized by this Act.
5        (19) To maintain an office or offices at such place or
6    places in the State as it may determine.
7        (20) To request information, and to make any inquiry,
8    investigation, survey, or study that the Agency may deem
9    necessary to enable it effectively to carry out the
10    provisions of this Act.
11        (21) To accept and expend appropriations.
12        (22) To engage in any activity or operation that is
13    incidental to and in furtherance of efficient operation to
14    accomplish the Agency's purposes.
15        (23) To adopt, revise, amend, and repeal rules with
16    respect to its operations, properties, and facilities as
17    may be necessary or convenient to carry out the purposes of
18    this Act, subject to the provisions of the Illinois
19    Administrative Procedure Act and Sections 1-22 and 1-35 of
20    this Act.
21        (24) To establish and collect charges and fees as
22    described in this Act.
23        (25) To conduct competitive gasification feedstock
24    procurement processes to procure the feedstocks for the
25    clean coal SNG brownfield facility in accordance with the
26    requirements of Section 1-78 of this Act.

 

 

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1        (26) To review, revise, and approve sourcing
2    agreements and mediate and resolve disputes between gas
3    utilities and the clean coal SNG brownfield facility
4    pursuant to subsection (h-1) of Section 9-220 of the Public
5    Utilities Act.
6        (27) To review, revise, and approve sourcing
7    agreements and mediate and resolve disputes between
8    electric utilities or alternative retail electric
9    suppliers and the initial clean coal facility pursuant to
10    paragraph (4) of subsection (d) of Section 1-75 of this
11    Act.
12        (28) To conduct competitive gasification feedstock
13    procurement processes to procure the feedstocks for the
14    initial clean coal facility in accordance with the
15    requirements of Section 1-79 of this Act.
16(Source: P.A. 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10;
1797-96, eff. 7-13-11; 97-325, eff. 8-12-11; revised 9-7-11.)
 
18    (20 ILCS 3855/1-56)
19    Sec. 1-56. Illinois Power Agency Renewable Energy
20Resources Fund.
21    (a) The Illinois Power Agency Renewable Energy Resources
22Fund is created as a special fund in the State treasury.
23    (b) The Illinois Power Agency Renewable Energy Resources
24Fund shall be administered by the Agency to procure renewable
25energy resources. Prior to June 1, 2011, resources procured

 

 

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1pursuant to this Section shall be procured from facilities
2located in Illinois, provided the resources are available from
3those facilities. If resources are not available in Illinois,
4then they shall be procured in states that adjoin Illinois. If
5resources are not available in Illinois or in states that
6adjoin Illinois, then they may be purchased elsewhere.
7Beginning June 1, 2011, resources procured pursuant to this
8Section shall be procured from facilities located in Illinois
9or states that adjoin Illinois. If resources are not available
10in Illinois or in states that adjoin Illinois, then they may be
11procured elsewhere. To the extent available, at least 75% of
12these renewable energy resources shall come from wind
13generation. Of the renewable energy resources procured
14pursuant to this Section at least the following specified
15percentages shall come from photovoltaics on the following
16schedule: 0.5% by June 1, 2012; 1.5% by June 1, 2013; 3% by
17June 1, 2014; and 6% by June 1, 2015 and thereafter. Of the
18renewable energy resources procured pursuant to this Section at
19least the following percentages shall come from distributed
20renewable energy generation devices: 0.5% by June 1, 2013,
210.75% by June 1, 2014, and 1% by June 1, 2015 and thereafter.
22To the extent available, half of the renewable energy resources
23procured from distributed renewable energy generation shall
24come from devices of less than 25 kilowatts in nameplate
25capacity. Renewable energy resources procured from distributed
26generation devices may also count towards the required

 

 

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1percentages for wind and solar photovoltaics. Procurement of
2renewable energy resources from distributed renewable energy
3generation devices shall be done on an annual basis through
4multi-year contracts of no less than 5 years, and shall consist
5solely of renewable energy credits.
6    The Agency shall create credit requirements for suppliers
7of distributed renewable energy. In order to minimize the
8administrative burden on contracting entities, the Agency
9shall solicit the use of third-party organizations to aggregate
10distributed renewable energy into groups of no less than one
11megawatt in installed capacity. These third-party
12organizations shall administer contracts with individual
13distributed renewable energy generation device owners. An
14individual distributed renewable energy generation device
15owner shall have the ability to measure the output of his or
16her distributed renewable energy generation device.
17    (c) The Agency shall procure renewable energy resources at
18least once each year in conjunction with a procurement event
19for electric utilities required to comply with Section 1-75 of
20the Act and shall, whenever possible, enter into long-term
21contracts on an annual basis for a portion of the incremental
22requirement for the given procurement year.
23    (d) The price paid to procure renewable energy credits
24using monies from the Illinois Power Agency Renewable Energy
25Resources Fund shall not exceed the winning bid prices paid for
26like resources procured for electric utilities required to

 

 

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1comply with Section 1-75 of this Act.
2    (e) All renewable energy credits procured using monies from
3the Illinois Power Agency Renewable Energy Resources Fund shall
4be permanently retired.
5    (f) The procurement process described in this Section is
6exempt from the requirements of the Illinois Procurement Code,
7pursuant to Section 20-10 of that Code.
8    (g) All disbursements from the Illinois Power Agency
9Renewable Energy Resources Fund shall be made only upon
10warrants of the Comptroller drawn upon the Treasurer as
11custodian of the Fund upon vouchers signed by the Director or
12by the person or persons designated by the Director for that
13purpose. The Comptroller is authorized to draw the warrant upon
14vouchers so signed. The Treasurer shall accept all warrants so
15signed and shall be released from liability for all payments
16made on those warrants.
17    (h) The Illinois Power Agency Renewable Energy Resources
18Fund shall not be subject to sweeps, administrative charges, or
19chargebacks, including, but not limited to, those authorized
20under Section 8h of the State Finance Act, that would in any
21way result in the transfer of any funds from this Fund to any
22other fund of this State or in having any such funds utilized
23for any purpose other than the express purposes set forth in
24this Section.
25    (i) The Illinois Power Agency Renewable Energy Resources
26Fund shall be terminated upon depletion of all funds therein

 

 

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1through the purchase of renewable energy credits.
2(Source: P.A. 96-159, eff. 8-10-09; 96-1000, eff. 7-2-10;
396-1437, eff. 8-17-10.)
 
4    (20 ILCS 3855/1-75)
5    Sec. 1-75. Planning and Procurement Bureau. The Planning
6and Procurement Bureau has the following duties and
7responsibilities:
8        (a) The Planning and Procurement Bureau shall each
9    year, beginning in 2008, develop procurement plans and
10    conduct competitive procurement processes in accordance
11    with the requirements of Section 16-111.5 of the Public
12    Utilities Act for the eligible retail customers of electric
13    utilities that on December 31, 2005 provided electric
14    service to at least 100,000 customers in Illinois, and for
15    years beginning on and after June 1, 2012, for the
16    procurement of renewable energy credits in respect of the
17    kilowatthour usage of delivery services non-eligible
18    retail customers in such electric utilities' service
19    areas. The Planning and Procurement Bureau shall also
20    develop procurement plans and conduct competitive
21    procurement processes in accordance with the requirements
22    of Section 16-111.5 of the Public Utilities Act for the
23    eligible retail customers of small multi-jurisdictional
24    electric utilities that (i) on December 31, 2005 served
25    less than 100,000 customers in Illinois and (ii) request a

 

 

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1    procurement plan for their Illinois jurisdictional load.
2    This Section shall not apply to a small
3    multi-jurisdictional utility until such time as a small
4    multi-jurisdictional utility requests the Agency to
5    prepare a procurement plan for their Illinois
6    jurisdictional load. For the purposes of this Section, the
7    term "eligible retail customers" has the same definition as
8    found in Section 16-111.5(a) of the Public Utilities Act.
9            (1) The Agency shall each year, beginning in 2008,
10        as needed, issue a request for qualifications for
11        experts or expert consulting firms to develop the
12        procurement plans in accordance with Section 16-111.5
13        of the Public Utilities Act. In order to qualify an
14        expert or expert consulting firm must have:
15                (A) direct previous experience assembling
16            large-scale power supply plans or portfolios for
17            end-use customers;
18                (B) an advanced degree in economics,
19            mathematics, engineering, risk management, or a
20            related area of study;
21                (C) 10 years of experience in the electricity
22            sector, including managing supply risk;
23                (D) expertise in wholesale electricity market
24            rules, including those established by the Federal
25            Energy Regulatory Commission and regional
26            transmission organizations;

 

 

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

 

 

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1                (F) adequate resources to perform and fulfill
2            the required functions and responsibilities; and
3                (G) the absence of a conflict of interest and
4            inappropriate bias for or against potential
5            bidders or the affected electric utilities.
6            (3) The Agency shall provide affected utilities
7        and other interested parties with the lists of
8        qualified experts or expert consulting firms
9        identified through the request for qualifications
10        processes that are under consideration to develop the
11        procurement plans and to serve as the procurement
12        administrator. The Agency shall also provide each
13        qualified expert's or expert consulting firm's
14        response to the request for qualifications. All
15        information provided under this subparagraph shall
16        also be provided to the Commission. The Agency may
17        provide by rule for fees associated with supplying the
18        information to utilities and other interested parties.
19        These parties shall, within 5 business days, notify the
20        Agency in writing if they object to any experts or
21        expert consulting firms on the lists. Objections shall
22        be based on:
23                (A) failure to satisfy qualification criteria;
24                (B) identification of a conflict of interest;
25            or
26                (C) evidence of inappropriate bias for or

 

 

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1            against potential bidders or the affected
2            utilities.
3            The Agency shall remove experts or expert
4        consulting firms from the lists within 10 days if there
5        is a reasonable basis for an objection and provide the
6        updated lists to the affected utilities and other
7        interested parties. If the Agency fails to remove an
8        expert or expert consulting firm from a list, an
9        objecting party may seek review by the Commission
10        within 5 days thereafter by filing a petition, and the
11        Commission shall render a ruling on the petition within
12        10 days. There is no right of appeal of the
13        Commission's ruling.
14            (4) The Agency shall issue requests for proposals
15        to the qualified experts or expert consulting firms to
16        develop a procurement plan for the affected utilities
17        and to serve as procurement administrator.
18            (5) The Agency shall select an expert or expert
19        consulting firm to develop procurement plans based on
20        the proposals submitted and shall award one-year
21        contracts to those selected with an option for the
22        Agency for a one-year renewal.
23            (6) The Agency shall select an expert or expert
24        consulting firm, with approval of the Commission, to
25        serve as procurement administrator based on the
26        proposals submitted. If the Commission rejects, within

 

 

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1        5 days, the Agency's selection, the Agency shall submit
2        another recommendation within 3 days based on the
3        proposals submitted. The Agency shall award a one-year
4        contract to the expert or expert consulting firm so
5        selected with Commission approval with an option for
6        the Agency for a one-year renewal.
7    (a-5) The Planning and Procurement Bureau shall at least
8every 5 years beginning in 2012 develop feedstock procurement
9plans and conduct competitive feedstock procurement processes
10in accordance with the requirements of Section 1-79 of this
11Act.
12        (1) The Agency shall, at least once every 5 years
13    beginning in 2012, issue a request for qualifications for
14    experts or expert consulting firms to develop the feedstock
15    procurement plans in accordance with Section 1-79 of this
16    Act. In order to qualify, an expert or, in the case of an
17    expert consulting firm, the individual who shall be
18    directly responsible for the work, must have:
19            (A) direct previous experience assembling large
20        scale feedstock supply plans or portfolios involving
21        coal and natural gas for industrial customers;
22            (B) an advanced degree in economics, mathematics,
23        engineering, risk management, or a related area of
24        study;
25            (C) ten years of experience in the energy sector,
26        including coal and gas procurement and managing fuel

 

 

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1        supply risk;
2            (D) expertise in the feedstock markets, which may
3        be particularized to the specific type of feedstock to
4        be purchased in that procurement event;
5            (E) expertise in credit protocols and familiarity
6        with contract protocols;
7            (F) adequate resources to perform and fulfill the
8        required functions and responsibilities; and
9            (G) the absence of a conflict of interest and
10        inappropriate bias for or against potential bidders or
11        the initial clean coal facility.
12        (2) The Agency shall at least every 5 years beginning
13    in 2012, as needed, issue a request for qualifications for
14    a feedstock procurement administrator to conduct the
15    competitive feedstock procurement processes in accordance
16    with Section 1-79 of this Act. In order to qualify, an
17    expert or, in the case of an expert consulting firm, the
18    individual who shall be directly responsible for the work,
19    must have:
20            (A) direct previous experience administering a
21        large scale competitive feedstock procurement process
22        involving coal and natural gas;
23            (B) an advanced degree in economics, mathematics,
24        engineering, or a related area of study;
25            (C) ten years of experience in the energy sector,
26        including coal and gas procurement and managing fuel

 

 

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1        supply risk;
2            (D) expertise in feedstock market rules and
3        practices, which may be particularized to the specific
4        type of feedstock to be purchased in that procurement
5        event;
6            (E) expertise in credit and contract protocols;
7            (F) adequate resources to perform and fulfill the
8        required functions and responsibilities; and
9            (G) the absence of a conflict of interest and
10        inappropriate bias for or against potential bidders or
11        the initial clean coal facility.
12        (3) The Agency shall provide the initial clean coal
13    facility and other interested parties with the lists of
14    qualified experts or expert consulting firms identified
15    through the request for qualifications processes that are
16    under consideration to develop the feedstock procurement
17    plans and to serve as the feedstock procurement
18    administrator. The Agency shall also provide the initial
19    clean coal facility and other interested parties with each
20    qualified expert's or expert consulting firm's response to
21    the request for qualifications. All information provided
22    under this subparagraph (3) shall also be provided to the
23    Commission. The Agency may provide by rule for fees
24    associated with supplying the information to the initial
25    clean coal facility and other interested parties. The
26    initial clean coal facility and other interested parties

 

 

SB0678 Engrossed- 31 -LRB097 04938 ASK 44978 b

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

 

 

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1    based on the proposals submitted and shall award at least
2    one-year contracts to those selected with an option for the
3    Agency for renewal for an additional length of time equal
4    to the term of the contract.
5        (6) The Agency shall select, with approval of the
6    Commission, an expert or expert consulting firm to serve as
7    feedstock procurement administrator based on the proposals
8    submitted. If the Commission rejects the Agency's
9    selection within 5 days after being notified of the
10    Agency's selection, then the Agency shall submit another
11    recommendation within 3 days after the Commission's
12    rejection based on the proposals submitted. The Agency
13    shall award a 5-year contract to the expert or expert
14    consulting firm so selected with Commission approval with
15    an option for the Agency for a 5-year renewal.
16        (b) The experts or expert consulting firms retained by
17    the Agency under subsection (a) of this Section shall, as
18    appropriate, prepare procurement plans, and conduct a
19    competitive procurement process as prescribed in Section
20    16-111.5 of the Public Utilities Act, to ensure adequate,
21    reliable, affordable, efficient, and environmentally
22    sustainable electric service at the lowest total cost over
23    time, taking into account any benefits of price stability,
24    for eligible retail customers of electric utilities that on
25    December 31, 2005 provided electric service to at least
26    100,000 customers in the State of Illinois, and for

 

 

SB0678 Engrossed- 33 -LRB097 04938 ASK 44978 b

1    eligible Illinois retail customers of small
2    multi-jurisdictional electric utilities that (i) on
3    December 31, 2005 served less than 100,000 customers in
4    Illinois and (ii) request a procurement plan for their
5    Illinois jurisdictional load.
6    (b-5) The experts or expert consulting firms retained by
7the Agency pursuant to subsection (a-5) of this Section shall,
8as appropriate, prepare feedstock procurement plans and
9conduct a competitive feedstock procurement process as
10prescribed in Section 1-79 of this Act to ensure adequate,
11reliable, affordable feedstocks, taking into account any
12benefits of price stability, for the initial clean coal
13facility.
14        (c) Renewable portfolio standard.
15            (1) The procurement plans under subsection (a) of
16        this Section shall include cost-effective renewable
17        energy resources. A minimum percentage of each
18        utility's total supply to serve the load of eligible
19        retail customers, as defined in Section 16-111.5(a) of
20        the Public Utilities Act, procured for each of the
21        following years shall be generated from cost-effective
22        renewable energy resources: at least 2% by June 1,
23        2008; at least 4% by June 1, 2009; at least 5% by June
24        1, 2010; at least 6% by June 1, 2011; at least 7% by
25        June 1, 2012; at least 8% by June 1, 2013; at least 9%
26        by June 1, 2014; at least 10% by June 1, 2015; and

 

 

SB0678 Engrossed- 34 -LRB097 04938 ASK 44978 b

1        increasing by at least 1.5% each year thereafter to at
2        least 25% by June 1, 2025. For periods beginning on and
3        after June 1, 2012, the procurement plans shall include
4        the procurement of cost-effective renewable energy
5        credits equal to the projected kilowatthour usage of
6        the delivery services non-eligible retail customers
7        within the service area of the electric utility times
8        the applicable renewable energy resource percentage
9        for that year as set forth under this paragraph (1). To
10        the extent that it is available, at least 75% of the
11        renewable energy resources used to meet these
12        standards shall come from wind generation and,
13        beginning on June 1, 2011, at least the following
14        percentages of the renewable energy resources used to
15        meet these standards shall come from photovoltaics on
16        the following schedule: 0.5% by June 1, 2012, 1.5% by
17        June 1, 2013; 3% by June 1, 2014; and 6% by June 1,
18        2015 and thereafter. Of the renewable energy resources
19        procured pursuant to this Section at least the
20        following percentages shall come from distributed
21        renewable energy generation devices: 0.5% by June 1,
22        2013, 0.75% by June 1, 2014, and 1% by June 1, 2015 and
23        thereafter. To the extent available, half of the
24        renewable energy resources procured from distributed
25        renewable energy generation shall come from devices of
26        less than 25 kilowatts in nameplate capacity.

 

 

SB0678 Engrossed- 35 -LRB097 04938 ASK 44978 b

1        Renewable energy resources procured from distributed
2        generation devices may also count towards the required
3        percentages for wind and solar photovoltaics.
4        Procurement of renewable energy resources from
5        distributed renewable energy generation devices shall
6        be done on an annual basis through multi-year contracts
7        of no less than 5 years, and shall consist solely of
8        renewable energy credits.
9        The Agency shall create credit requirements for
10    suppliers of distributed renewable energy. In order to
11    minimize the administrative burden on contracting
12    entities, the Agency shall solicit the use of third-party
13    organizations to aggregate distributed renewable energy
14    into groups of no less than one megawatt in installed
15    capacity. These third-party organizations shall administer
16    contracts with individual distributed renewable energy
17    generation device owners. An individual distributed
18    renewable energy generation device owner shall have the
19    ability to measure the output of his or her distributed
20    renewable energy generation device. For purposes of this
21    subsection (c), "cost-effective" means that the costs of
22    procuring renewable energy resources to serve the load of
23    the electric utility's eligible retail customers and the
24    costs of procuring renewable energy credits with respect to
25    the kilowatthour usage of the delivery services
26    non-eligible retail customers within the electric

 

 

SB0678 Engrossed- 36 -LRB097 04938 ASK 44978 b

1    utility's service area do not cause the applicable limits
2    limit stated in paragraph (2) of this subsection (c) to be
3    exceeded and do not exceed benchmarks based on market
4    prices for renewable energy resources in the region, which
5    shall be developed by the procurement administrator, in
6    consultation with the Commission staff, Agency staff, and
7    the procurement monitor and shall be subject to Commission
8    review and approval.
9            (2) For purposes of this subsection (c), the
10        required procurement of cost-effective renewable
11        energy resources to serve the load of the electric
12        utility's eligible retail customers for a particular
13        year shall be measured as a percentage of the actual
14        amount of electricity (megawatt-hours) supplied by the
15        electric utility to eligible retail customers in the
16        planning year ending immediately prior to the
17        procurement and, for periods beginning on and after
18        June 1, 2012, the required procurement of
19        cost-effective renewable energy credits with respect
20        to the delivery services non-eligible retail customers
21        of the electric utility shall be based on the actual
22        amount of electricity (megawatt-hours) delivered by
23        the electric utility to delivery services non-eligible
24        retail customers in its service area in the planning
25        year ending immediately prior to the procurement. For
26        purposes of this subsection (c), the amount paid per

 

 

SB0678 Engrossed- 37 -LRB097 04938 ASK 44978 b

1        kilowatthour means the total amount paid for electric
2        service expressed on a per kilowatthour basis. For
3        purposes of this subsection (c), the total amount paid
4        for electric service includes without limitation
5        amounts paid for supply, transmission, distribution,
6        surcharges, and add-on taxes.
7            Notwithstanding the requirements of this
8        subsection (c), the total of renewable energy
9        resources procured pursuant to the procurement plan
10        with respect to the load of the electric utility's
11        eligible retail customers for any single year shall be
12        reduced by an amount necessary to limit the annual
13        estimated average net increase due to the costs of
14        these resources included in the amounts paid by
15        eligible retail customers in connection with electric
16        service to:
17                (A) in 2008, no more than 0.5% of the amount
18            paid per kilowatthour by those customers during
19            the year ending May 31, 2007;
20                (B) in 2009, the greater of an additional 0.5%
21            of the amount paid per kilowatthour by those
22            customers during the year ending May 31, 2008 or 1%
23            of the amount paid per kilowatthour by those
24            customers during the year ending May 31, 2007;
25                (C) in 2010, the greater of an additional 0.5%
26            of the amount paid per kilowatthour by those

 

 

SB0678 Engrossed- 38 -LRB097 04938 ASK 44978 b

1            customers during the year ending May 31, 2009 or
2            1.5% of the amount paid per kilowatthour by those
3            customers during the year ending May 31, 2007;
4                (D) in 2011, the greater of an additional 0.5%
5            of the amount paid per kilowatthour by those
6            customers during the year ending May 31, 2010 or 2%
7            of the amount paid per kilowatthour by those
8            customers during the year ending May 31, 2007; and
9                (E) thereafter, the amount of renewable energy
10            resources procured pursuant to the procurement
11            plan for any single year shall be reduced by an
12            amount necessary to limit the estimated average
13            net increase due to the cost of these resources
14            included in the amounts paid by eligible retail
15            customers in connection with electric service to
16            no more than the greater of 2.015% of the amount
17            paid per kilowatthour by those customers during
18            the year ending May 31, 2007 or the incremental
19            amount per kilowatthour paid for these resources
20            in 2011.
21            For periods beginning on and after June 1, 2012,
22        any excluded renewable energy resources contract costs
23        shall be recoverable by the electric utility through
24        its tariffed charges for delivery services pursuant to
25        Section 16-108 of the Public Utilities Act to its
26        residential class delivery services non-eligible

 

 

SB0678 Engrossed- 39 -LRB097 04938 ASK 44978 b

1        retail customers.
2            Notwithstanding the requirements of this
3        subsection (c), for years beginning on and after June
4        1, 2012, the total amount of renewable energy credits
5        procured pursuant to the procurement plan with respect
6        to the kilowatthour usage of the delivery services
7        non-eligible retail customers in the electric
8        utility's service area shall be reduced by an amount
9        necessary to limit the cost of renewable energy credits
10        and excluded renewable energy resources costs included
11        in the electric utility's charges per kilowatthour for
12        delivery services to its delivery services
13        non-eligible retail customers to an amount equal to no
14        more than 2.015% of the amount paid by the electric
15        utility's eligible retail customers per kilowatthour
16        for electric service during the year ended May 31,
17        2007.
18            No later than June 30, 2011, the Commission shall
19        review the limitation on the amount of renewable energy
20        resources procured pursuant to this subsection (c) and
21        report to the General Assembly its findings as to
22        whether that limitation unduly constrains the
23        procurement of cost-effective renewable energy
24        resources.
25            (3) (Blank). Through June 1, 2011, renewable
26        energy resources shall be counted for the purpose of

 

 

SB0678 Engrossed- 40 -LRB097 04938 ASK 44978 b

1        meeting the renewable energy standards set forth in
2        paragraph (1) of this subsection (c) only if they are
3        generated from facilities located in the State,
4        provided that cost-effective renewable energy
5        resources are available from those facilities. If
6        those cost-effective resources are not available in
7        Illinois, they shall be procured in states that adjoin
8        Illinois and may be counted towards compliance. If
9        those cost-effective resources are not available in
10        Illinois or in states that adjoin Illinois, they shall
11        be purchased elsewhere and shall be counted towards
12        compliance. After June 1, 2011, cost-effective
13        renewable energy resources located in Illinois and in
14        states that adjoin Illinois may be counted towards
15        compliance with the standards set forth in paragraph
16        (1) of this subsection (c). If those cost-effective
17        resources are not available in Illinois or in states
18        that adjoin Illinois, they shall be purchased
19        elsewhere and shall be counted towards compliance.
20            (4) The electric utility shall retire all
21        renewable energy credits used to comply with the
22        standard.
23            (5) Beginning with the year commencing June 1,
24        2010, and ending with the year commencing June 1, 2011,
25        an electric utility subject to this subsection (c)
26        shall apply the lesser of the maximum alternative

 

 

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1        compliance payment rate or the most recent estimated
2        alternative compliance payment rate for its service
3        territory for the corresponding compliance period,
4        established pursuant to subsection (d) of Section
5        16-115D of the Public Utilities Act to its retail
6        customers that take service pursuant to the electric
7        utility's hourly pricing tariff or tariffs. The
8        electric utility shall retain all amounts collected as
9        a result of the application of the alternative
10        compliance payment rate or rates to such customers,
11        and, beginning in 2011, the utility shall include in
12        the information provided under item (1) of subsection
13        (d) of Section 16-111.5 of the Public Utilities Act the
14        amounts collected under the alternative compliance
15        payment rate or rates for the prior year ending May 31.
16        Notwithstanding any limitation on the procurement of
17        renewable energy resources imposed by item (2) of this
18        subsection (c), the Agency shall increase its spending
19        on the purchase of renewable energy resources to be
20        procured by the electric utility for the next plan year
21        by an amount equal to the amounts collected by the
22        utility under the alternative compliance payment rate
23        or rates in the prior year ending May 31. For years
24        commencing on and after June 1, 2012, the kilowatthours
25        supplied by the electric utility to its retail
26        customers that take service pursuant to the electric

 

 

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1        utility's hourly pricing tariff or tariffs shall be
2        considered usage of delivery services non-eligible
3        retail customers.
4        (6) Each annual procurement plan for periods beginning
5    on and after June 1, 2012 shall include (i) the procurement
6    of electricity from cost-effective renewable energy
7    resources to meet the renewable energy resource
8    requirements specified in paragraph (2) of this subsection
9    (c) with respect to the load of the electric utility's
10    eligible retail customers and (ii) the procurement of
11    renewable energy credits to meet the renewable energy
12    resource requirements specified in paragraph (2) of this
13    subsection (c) with respect to the kilowatthour usage of
14    the electric utility's delivery services non-eligible
15    retail customers; provided that the electric utility's
16    obligation to purchase renewable energy credits with
17    respect to the kilowatthour usage of delivery services
18    non-eligible retail customers shall be reduced by the
19    amount of any purchases of renewable energy credits by the
20    Agency for the year in respect of the electric utility's
21    service area pursuant to Section 1-56 of this Act using the
22    Illinois Power Agency Renewable Energy Resources Fund. All
23    procurements of bundled renewable energy resources and
24    renewable energy credits in the procurement plans of the
25    electric utilities shall be pursuant to competitive
26    bidding processes and shall be approved by the Commission

 

 

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1    pursuant to Section 16-111.5 of the Public Utilities Act.
2    Procurements of bundled renewable energy resources shall
3    be used to secure supply from renewable energy assets that
4    can provide monthly energy quantity guarantees for peak and
5    off-peak wrap periods. Projects shall be chosen based on
6    the value of the energy procured. The value of the energy
7    shall be determined by the Agency by utilizing a "time of
8    day" methodology to evaluate the energy profile of each
9    project.
10    (d) Clean coal portfolio standard.
11        (1) The General Assembly finds that there are abundant
12    and cost-effective supplies of high volatile rank
13    bituminous coal with a sulfur content of at least 1.7
14    pounds per million btu energy content, and that it is
15    technologically feasible to produce electric energy using
16    such coal supplies reliably. The General Assembly further
17    finds that state-of-the-art gasification systems are
18    available to convert coal supplies with the foregoing
19    characteristics into gas and that it is feasible to use
20    such gas to generate electric energy without exceeding
21    allowable emission rates for sulfur dioxide, nitrogen
22    oxides, carbon monoxide, particulates, and mercury for a
23    natural gas-fired combined-cycle facility of the same size
24    as and in the same location as a clean coal facility
25    incorporating a gasification system and a combined cycle
26    power block. The General Assembly also finds that it is

 

 

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1    feasible to engineer and construct systems designed to
2    capture and sequester the percentages of the carbon dioxide
3    emissions from clean coal facilities as specified in this
4    Act. Accordingly, the General Assembly finds it necessary
5    for the health, safety, welfare, and prosperity of Illinois
6    citizens to require Illinois electric utilities and
7    alternative retail electric suppliers to contract with the
8    initial clean coal facility to meet a portion of the needs
9    of each such electric utility's and alternative retail
10    electric supplier's retail load on the terms and conditions
11    described under this Act.
12        The procurement plans under subsection (a) of this
13    Section shall include electricity generated using clean
14    coal. Each electric utility shall enter into one or more
15    sourcing agreements with the initial clean coal facility,
16    as provided in paragraph (3) of this subsection (d),
17    covering electricity generated by the initial clean coal
18    facility representing (A) at least 5% of that each
19    utility's total supply to serve the load of eligible retail
20    customers in the immediately preceding year 2015 and each
21    year thereafter, as described in paragraph (3) of this
22    subsection (d), or (B) such lesser amount as may be
23    available from the initial clean coal facility, reduced by
24    subject to the limits on the amount of power to be
25    purchased specified in paragraph (2) of this subsection
26    (d). It is the goal of the State that by January 1, 2025,

 

 

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

 

 

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

 

 

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1            the year ending May 31, 2009;
2                (B) in 2011, the greater of an additional 0.5%
3            of the amount paid per kilowatthour by those
4            customers during the year ending May 31, 2010 or 1%
5            of the amount paid per kilowatthour by those
6            customers during the year ending May 31, 2009;
7                (C) in 2012, the greater of an additional 0.5%
8            of the amount paid per kilowatthour by those
9            customers during the year ending May 31, 2011 or
10            1.5% of the amount paid per kilowatthour by those
11            customers during the year ending May 31, 2009;
12                (D) in 2013, the greater of an additional 0.5%
13            of the amount paid per kilowatthour by those
14            customers during the year ending May 31, 2012 or 2%
15            of the amount paid per kilowatthour by those
16            customers during the year ending May 31, 2009; and
17                (E) thereafter:
18                (i) A calculation shall be made for each year
19            to determine whether , the total amount paid under
20            sourcing agreements with clean coal facilities
21            pursuant to the procurement plan for any single
22            year shall be reduced by an amount necessary to
23            limit the estimated average net per kilowatthour
24            increase due to the cost of electric power
25            purchased under sourcing agreements and these
26            resources included in the amounts paid by small

 

 

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1            electric eligible retail customers in connection
2            with electric service exceeds to no more than the
3            greater of (i) 2.015% of the amount paid per
4            kilowatthour by eligible retail those customers
5            during the year ending May 31, 2009 or (ii) the
6            incremental amount per kilowatthour paid for these
7            resources in 2013. These requirements may be
8            altered only as provided by statute. For purposes
9            of such calculation, such average net per
10            kilowatthour increase in rates of small electric
11            customers that are not eligible retail customers
12            shall be deemed to be equal to such average net per
13            kilowatthour increase in rates of eligible retail
14            customers.
15                (ii) If for any year the small customer rate
16            impact would exceed the limitation described in
17            item (i) of this subparagraph (E), the clean coal
18            fraction for each clean coal electricity buyer
19            shall be adjusted for such year in a manner that
20            will result in (a) the quantity of electric power
21            projected to be purchased by each clean coal
22            electricity buyer being reduced by an amount
23            sufficient to result in such deemed rate impact on
24            all small electric customers (whether served by
25            electric utilities or alternative retail electric
26            suppliers) being equal to such limitation for such

 

 

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1            year and (b) any such reductions in amounts
2            allocated to the clean coal electricity buyers in
3            order to achieve the objective described in clause
4            (a) of this item (ii) being allocated to, and
5            purchased and paid for by, the clean coal
6            electricity buyers in proportion to their retail
7            sales to large electric customers.
8                (iii) Each year, after taking account of the
9            adjustment, if any, provided for in item (ii) of
10            this subparagraph (E), a calculation shall be made
11            to determine whether the large customer deemed
12            rate impact for such year exceeds $0.005 per
13            kilowatthour. The "large customer deemed rate
14            impact" for any year is the projected increase in
15            electric rates of large electric customers
16            (whether served by electric utilities or
17            alternative retail electric suppliers) due to the
18            cost of electric power purchased under sourcing
19            agreements to the extent it is based on each clean
20            coal electricity buyer's retail sales to large
21            electric customers, which shall be calculated in
22            substantially the same manner as the calculation
23            of rate impact on small electric customers, and
24            shall assume that such cost of purchases under
25            sourcing agreements is passed through
26            proportionally by the clean coal electricity

 

 

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1            buyers to their large electric customers. The
2            calculation of the large customer deemed rate
3            impact shall (a) assume that the total retail sales
4            (expressed in kilowatthours sold) to large
5            electric customers by all clean coal electricity
6            buyers for any year is the greater of the actual
7            amount of such sales in such year and the amount of
8            such sales in 2009 and (b) exclude from the
9            calculation any actual costs for such year
10            incurred by the initial clean coal facility to the
11            extent such costs exceed the corresponding amount
12            assumed in the "reference case" of the facility
13            cost report for the initial clean coal facility for
14            such year and are not principally within the
15            reasonable control of the initial clean coal
16            facility.
17                Any operating costs or revenues deviating from
18            the corresponding costs assumed in the "reference
19            case" of the facility cost report for the initial
20            clean coal facility as a result of changes in
21            market prices, including, but not limited to,
22            prices of coal, natural gas, electricity,
23            by-products, and emissions allowances, shall be
24            deemed to be outside of the reasonable control of
25            the initial clean coal facility and excluded from
26            the calculation.

 

 

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1                Any costs exceeding the corresponding costs
2            assumed in the "reference case" of the facility
3            cost report for the initial clean coal facility as
4            a result of changes in capital costs, fixed
5            operating costs, variable operating costs,
6            operating efficiency, and availability, except in
7            each case to the extent resulting from a change in
8            market prices, as described in the immediately
9            preceding paragraph, or from a change in law, as
10            defined in subsection (b) of Section 1-76 of this
11            Act, shall be deemed to be within the reasonable
12            control of the initial clean coal facility and
13            included in the calculation.
14                (iv) If for any year the large customer deemed
15            rate impact would exceed the limitation described
16            in item (iii) of this subparagraph (E), the
17            quantity of electric power required to be
18            purchased by each clean coal electricity buyer
19            that serves large electric customers under its
20            sourcing agreement for such year shall be reduced
21            by such amount as will result in the large customer
22            deemed rate impact being equal to such limitation
23            for such year, and the clean coal fractions of each
24            clean coal electricity buyer that serves large
25            electric customers shall be adjusted for such year
26            to reflect this reduction; provided, however, that

 

 

SB0678 Engrossed- 52 -LRB097 04938 ASK 44978 b

1            the reduction under this item (iv) shall not exceed
2            in any year an amount that would result in revenues
3            under the sourcing agreements being reduced by
4            more than $50,000,000 in the aggregate for such
5            year. Any quantities of electric power not
6            required to be purchased pursuant to the operation
7            of the immediately preceding sentence may be
8            disposed of by the initial clean coal facility for
9            its own account, and the proceeds of any sales of
10            such electric power shall not be included in the
11            formula rate.
12                (v) The details of the calculations
13            contemplated by this subparagraph (E) shall be set
14            forth in the sourcing agreements.
15                (vi) No later than June 30, 2016 2015, the
16            Commission shall review the limitation on the
17            total amount purchased paid under sourcing
18            agreements, if any, with the initial clean coal
19            facility facilities pursuant to this subsection
20            (d) and report to the General Assembly its findings
21            as to the effect of the whether that limitation on
22            the initial clean coal facility, electric
23            utilities, alternative retail electric suppliers,
24            and customers of the electric utilities and the
25            alternative retail electric suppliers unduly
26            constrains the amount of electricity generated by

 

 

SB0678 Engrossed- 53 -LRB097 04938 ASK 44978 b

1            cost-effective clean coal facilities that is
2            covered by sourcing agreements.
3        (3) Initial clean coal facility. In order to promote
4    the use development of clean coal electric power facilities
5    in Illinois, each electric utility subject to this Section
6    shall execute a sourcing agreement to source electricity
7    from the initial clean coal facility. The Agency shall
8    accept applications to be designated the initial clean coal
9    facility for a period of 30 days after the effective date
10    of this amendatory Act of the 97th General Assembly. Each
11    application shall include a proposed sourcing agreement in
12    accordance with the requirements of this paragraph (3) and
13    information showing that the applicant meets the other
14    criteria set out in the definition of initial clean coal
15    facility provided in Section 1-10 of this Act. In the event
16    that only one proposed initial clean coal facility that
17    meets each of the requirements submits a proposed sourcing
18    agreement to the Agency within that time period, the Agency
19    shall select such proposed initial clean coal facility as
20    the initial clean coal facility. In the event that more
21    than one proposed initial clean coal facility that meets
22    each of the requirements submit a proposed sourcing
23    agreement to the Agency within that time period, the Agency
24    shall select as the initial clean coal facility the
25    electric generating facility that the Agency determines
26    best promotes the needs and interests of the citizens of

 

 

SB0678 Engrossed- 54 -LRB097 04938 ASK 44978 b

1    the State of Illinois. In making such determination, the
2    Agency shall take into account for each proposed initial
3    clean coal facility the technical and economic feasibility
4    of such facility, including access to capital and the
5    financeability of the facility based upon the proposed
6    sourcing agreement, the projected environmental
7    performance of such facility, the ability of such facility
8    to be dispatched to support the transmission grid's
9    capability to integrate with wind, solar, and other
10    intermittent resources, and the reliability and cost of
11    electric transmission service from the facility to the
12    electric utilities. The Agency shall announce the
13    designation of the initial clean coal facility within 45
14    days after the effective date of this amendatory Act of the
15    97th General Assembly. a proposed clean coal facility in
16    Illinois (the "initial clean coal facility") that will have
17    a nameplate capacity of at least 500 MW when commercial
18    operation commences, that has a final Clean Air Act permit
19    on the effective date of this amendatory Act of the 95th
20    General Assembly, and that will meet the definition of
21    clean coal facility in Section 1-10 of this Act when
22    commercial operation commences. The sourcing agreements
23    with this initial clean coal facility shall be subject to
24    both approval of the initial clean coal facility by the
25    General Assembly and satisfaction of the requirements of
26    paragraph (4) of this subsection (d) and shall be executed

 

 

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1    within 90 days after any such approval by the General
2    Assembly. The Agency and the Commission shall have
3    authority to inspect all books and records associated with
4    the initial clean coal facility during the term of such a
5    sourcing agreement. A utility's sourcing agreement for
6    electricity produced by the initial clean coal facility
7    shall include:
8            (A) provisions governing the price paid for
9        electricity generated by the initial clean coal
10        facility, which shall be determined according to
11        clause (iv) of subparagraph (B) of this paragraph (3);
12        a formula contractual price (the "contract price")
13        approved pursuant to paragraph (4) of this subsection
14        (d), which shall:
15                (i) be determined using a cost of service
16            methodology employing either a level or deferred
17            capital recovery component, based on a capital
18            structure consisting of 45% equity and 55% debt,
19            and a return on equity as may be approved by the
20            Federal Energy Regulatory Commission, which in any
21            case may not exceed the lower of 11.5% or the rate
22            of return approved by the General Assembly
23            pursuant to paragraph (4) of this subsection (d);
24            and
25                (ii) provide that all miscellaneous net
26            revenue, including but not limited to net revenue

 

 

SB0678 Engrossed- 56 -LRB097 04938 ASK 44978 b

1            from the sale of emission allowances, if any,
2            substitute natural gas, if any, grants or other
3            support provided by the State of Illinois or the
4            United States Government, firm transmission
5            rights, if any, by-products produced by the
6            facility, energy or capacity derived from the
7            facility and not covered by a sourcing agreement
8            pursuant to paragraph (3) of this subsection (d) or
9            item (5) of subsection (d) of Section 16-115 of the
10            Public Utilities Act, whether generated from the
11            synthesis gas derived from coal, from SNG, or from
12            natural gas, shall be credited against the revenue
13            requirement for this initial clean coal facility;
14            (B) power purchase provisions, which shall:
15                (i) provide that the utility party to the
16            sourcing agreement shall pay the contract price
17            under such sourcing agreement determined pursuant
18            to subparagraph (A);
19                (ii) require delivery of electricity by the
20            initial clean coal facility to the regional
21            transmission organization market of the utility
22            party to the sourcing agreement;
23                (iii) require the utility party to the
24            sourcing agreement to buy from the initial clean
25            coal facility in each hour an amount of energy
26            equal to all clean coal energy made available from

 

 

SB0678 Engrossed- 57 -LRB097 04938 ASK 44978 b

1            the initial clean coal facility during such hour
2            times the clean coal fraction for such utility for
3            the applicable month, provided that the amount
4            purchased by the utility in any year will be
5            limited by paragraph (2) of this subsection (d);
6                (iv) require the utility party to the sourcing
7            agreement to pay to the initial clean coal facility
8            for each month the following: the electric
9            generation variable charge multiplied by the
10            quantity of energy required to be purchased by such
11            utility in such month plus the product of the sum
12            of the fuel charge plus the fixed monthly charge,
13            based on the MW of nameplate capacity of the
14            initial clean coal facility's power block, for
15            such month, multiplied by the fraction determined
16            for the utility for such month according to clause
17            (iii) of this subparagraph (B); for purposes of
18            this clause (iv), "electric generation variable
19            charge", "fuel charge", and "fixed monthly charge"
20            shall each have the meaning ascribed to the term in
21            subsection (a) of Section 1-76 of this Act; and
22                (v) be considered pre-existing contracts in
23            the utility's procurement plans for eligible
24            retail customers; the provisions of this
25            subparagraph (B) are severable under Section 1.31
26            of the Statute on Statutes.

 

 

SB0678 Engrossed- 58 -LRB097 04938 ASK 44978 b

1            (B) power purchase provisions, which shall:
2                (i) provide that the utility party to such
3            sourcing agreement shall pay the contract price
4            for electricity delivered under such sourcing
5            agreement;
6                (ii) require delivery of electricity to the
7            regional transmission organization market of the
8            utility that is party to such sourcing agreement;
9                (iii) require the utility party to such
10            sourcing agreement to buy from the initial clean
11            coal facility in each hour an amount of energy
12            equal to all clean coal energy made available from
13            the initial clean coal facility during such hour
14            times a fraction, the numerator of which is such
15            utility's retail market sales of electricity
16            (expressed in kilowatthours sold) in the State
17            during the prior calendar month and the
18            denominator of which is the total retail market
19            sales of electricity (expressed in kilowatthours
20            sold) in the State by utilities during such prior
21            month and the sales of electricity (expressed in
22            kilowatthours sold) in the State by alternative
23            retail electric suppliers during such prior month
24            that are subject to the requirements of this
25            subsection (d) and paragraph (5) of subsection (d)
26            of Section 16-115 of the Public Utilities Act,

 

 

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1            provided that the amount purchased by the utility
2            in any year will be limited by paragraph (2) of
3            this subsection (d); and
4                (iv) be considered pre-existing contracts in
5            such utility's procurement plans for eligible
6            retail customers;
7            (C) contract for differences provisions, which
8        shall:
9                (i) require the utility party to such sourcing
10            agreement to contract with the initial clean coal
11            facility in each hour with respect to an amount of
12            energy equal to all clean coal energy made
13            available from the initial clean coal facility
14            during such hour times the clean coal a fraction
15            for such utility for applicable month, the
16            numerator of which is such utility's retail market
17            sales of electricity (expressed in kilowatthours
18            sold) in the utility's service territory in the
19            State 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 purchased paid by the
4            utility in any year will be limited by paragraph
5            (2) of this 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) for any month shall be limited to an
10            amount equal to (1) the difference of the electric
11            generation variable charge, the fuel charge, and
12            the fixed monthly charge, that would be payable by
13            the utility for such month based on such quantity
14            of electricity between the contract price
15            determined pursuant to clause (iv) of subparagraph
16            (B) (A) of this paragraph (3), minus the product of
17            (1) of this subsection (d) and the day-ahead price
18            for electricity delivered to the regional
19            transmission organization market of the electric
20            utility that is party to such sourcing agreement
21            (or any successor delivery point at which such
22            utility's supply obligations are financially
23            settled on an hourly basis) (the "reference
24            price") on the day preceding the day on which the
25            electricity is delivered to the initial clean coal
26            facility busbar, multiplied by (2) the quantity of

 

 

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

 

 

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1            initial clean coal facility, without monetary
2            consideration and otherwise on reasonable terms
3            acceptable to the Agency, if the Agency so requests
4            no less than 3 years prior to the end of the stated
5            contract term;
6                (v) require the owner of the initial clean coal
7            facility to comply with provisions reflecting
8            those set forth in Section 1-76.5 of this Act;
9            provide documentation to the Commission each year,
10            starting in the facility's first year of
11            commercial operation, accurately reporting the
12            quantity of carbon emissions from the facility
13            that have been captured and sequestered and report
14            any quantities of carbon released from the site or
15            sites at which carbon emissions were sequestered
16            in prior years, based on continuous monitoring of
17            such sites. If, in any year after the first year of
18            commercial operation, the owner of the facility
19            fails to demonstrate that the initial clean coal
20            facility captured and sequestered at least 50% of
21            the total carbon emissions that the facility would
22            otherwise emit or that sequestration of emissions
23            from prior years has failed, resulting in the
24            release of carbon dioxide into the atmosphere, the
25            owner of the facility must offset excess
26            emissions. Any such carbon offsets must be

 

 

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

 

 

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

 

 

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1                (vii) (viii) limit the utility's obligation to
2            such amount as the utility is allowed to recover
3            through tariffs filed with the Commission,
4            provided that neither the clean coal facility nor
5            the utility waives any right to assert federal
6            pre-emption or any other argument in response to a
7            purported disallowance of recovery costs;
8                (viii) (ix) limit the utility's or alternative
9            retail electric supplier's obligation to incur any
10            liability to only those times after until such time
11            as the facility is in commercial operation and
12            generating power and energy and such power and
13            energy is being delivered to the facility busbar;
14                (ix) provide that each electric utility shall
15            have the right to determine whether the
16            obligations of the utility party under the
17            sourcing agreement shall be governed by the power
18            purchase provisions or the contract for
19            differences provisions before entering into the
20            sourcing agreements; the provisions of this item
21            (ix) are severable under Section 1.31 of the
22            Statute on Statutes;
23                (x) provide that the owner or owners of the
24            initial clean coal facility, which is the
25            counterparty to such sourcing agreement, shall
26            have the right from time to time to elect whether

 

 

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1            the obligations of the utility party thereto shall
2            be governed by the power purchase provisions or the
3            contract for differences provisions;
4                (x) (xi) append documentation showing that the
5            formula rate and contract, insofar as they relate
6            to the power purchase provisions, have been
7            approved by the Federal Energy Regulatory
8            Commission pursuant to Section 205 of the Federal
9            Power Act;
10                (xi) (xii) provide that any changes to the
11            terms of the contract, insofar as such changes
12            relate to the power purchase provisions, are
13            subject to review under the public interest
14            standard applied by the Federal Energy Regulatory
15            Commission pursuant to Sections 205 and 206 of the
16            Federal Power Act; and
17                (xii) (xiii) conform with customary lender
18            requirements in power purchase agreements used as
19            the basis for financing non-utility generators; .
20                (xiii) provide for performance incentives
21            regarding availability, efficiency, and by-product
22            quantities, with premium performance and
23            shortfalls in performance to result in positive
24            and negative adjustments, respectively, to the
25            rate of return approved by the Commission,
26            provided that such rate of return in any year shall

 

 

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1            not be decreased by more than $25,000,000 or
2            increased by more than $12,500,000 as a result of
3            such performance incentives. Such performance
4            incentives shall be structured so that any
5            increases in the rate of return as a result of such
6            performance incentives are designed not to exceed
7            the projected benefits to the buyers resulting
8            from the initial clean coal facility's achievement
9            of that performance incentive;
10                (xiv) include forecasting and scheduling
11            obligations that take account of the requirements
12            of the applicable regional transmission
13            organizations;
14                (xv) include operating guidelines relating to
15            the operating configuration and dispatch of the
16            initial clean coal facility, which guidelines
17            shall be subject to change from time to time with
18            input from a committee consisting of
19            representatives of the electric utilities and
20            alternative retail electric suppliers that are
21            parties to sourcing agreements with the initial
22            clean coal facility; such operating guidelines
23            shall take account the initial clean coal
24            facility's obligations under any agreement for the
25            purchase of SNG entered into pursuant to item (xvi)
26            of this subparagraph (D) and shall be based on

 

 

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1            principles of economic dispatch and the assumption
2            that the variable cost of SNG purchased pursuant to
3            such agreement is equal to the market price of
4            natural gas delivered to the initial clean coal
5            facility; any actions taken or not taken by the
6            owner of the initial clean coal facility in
7            compliance with such operating guidelines shall be
8            deemed to be prudent, and the prudence of the costs
9            resulting from the action shall be evaluated in
10            light of the fact that the initial clean coal
11            facility is required to comply with such operating
12            guidelines; and
13                (xvi) authorize the initial clean coal
14            facility to enter into an agreement with a clean
15            coal SNG facility or a clean coal SNG brownfield
16            facility for the purchase by the initial clean coal
17            facility during all or part of the term of the
18            sourcing agreement a quantity of SNG produced by
19            such clean coal SNG facility or clean coal SNG
20            brownfield facility each year up to the lesser of
21            (x) the initial clean coal facility's requirements
22            for imported methane in such year and (y) 16% of
23            the SNG produced by such clean coal SNG facility or
24            clean coal SNG brownfield facility during such
25            year at a delivered price to be set forth in such
26            agreement; such agreement shall provide for the

 

 

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1            timing of gas deliveries in a manner that
2            reasonably accommodates the initial clean coal
3            facility's fuel requirements and generation
4            schedule; the parties to such agreement may, if
5            they mutually agree, structure such agreement as a
6            financial settlement arrangement for the
7            quantities of SNG set forth above, and such
8            arrangement shall be deemed to be an agreement
9            contemplated by this item (xvi); the form for such
10            agreement shall be subject to approval by the
11            Agency pursuant to a procedure substantially the
12            same as that provided in paragraph (4) of this
13            subsection (d) for the sourcing agreements, with
14            the clean coal SNG facility or clean coal SNG
15            brownfield facility participating in place of each
16            electric utility, and pursuant to a schedule to be
17            proposed by the initial clean coal facility and
18            approved by the Agency.
19        (4) Effective date of sourcing agreements with the
20    initial clean coal facility. No later than 30 days after
21    the effective date of this amendatory Act of the 97th
22    General Assembly, the initial clean coal facility shall
23    submit a draft sourcing agreement to the Agency and each
24    electric utility required to enter into such agreements
25    pursuant to paragraph (3) of this subsection and the
26    initial clean coal facility and each such electric utility

 

 

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1    shall promptly and diligently negotiate in good faith over
2    the terms of the sourcing agreement. Within 30 days after
3    receipt of the draft sourcing agreement, each such electric
4    utility shall provide the Agency and the owner of the
5    initial clean coal facility with its comments and
6    recommended revisions to the draft sourcing agreement.
7    Within 15 days after the receipt of the electric utility's
8    comments and recommended revisions, the owner of the
9    initial clean coal facility shall submit its responsive
10    comments and a further revised draft of the sourcing
11    agreement to the Agency. The Agency shall review the draft
12    sourcing agreement and comments and retain an independent,
13    qualified, and experienced mediator to mediate disputes
14    over the draft sourcing agreement's terms. The mediator
15    shall not own or control any direct or indirect interest in
16    the initial clean coal facility and shall have no
17    contractual relationship with the initial clean coal
18    facility. The mediator shall have knowledge of the energy
19    industry.
20        If the parties to the sourcing agreement do not agree
21    on the terms in the sourcing agreement within 15 days after
22    receiving the owner's responsive comments and further
23    revised draft, then the mediator retained by the Agency
24    shall mediate the dispute between the parties. If the
25    parties are in agreement on the terms of the sourcing
26    agreement, then the Agency shall approve the final draft

 

 

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1    sourcing agreement within 30 days after the parties reach
2    agreement and notify the Commission of that agreement. If,
3    within 30 days after the commencement of mediation, the
4    parties have failed to come to agreement, then the Agency
5    shall, with assistance, as appropriate, from the mediator
6    retained pursuant to this paragraph (4), review and revise
7    the draft sourcing agreement as necessary.
8        The Agency may approve a sourcing agreement only after
9    it finds the sourcing agreement is consistent with the
10    provisions of this Act and contains only terms that are
11    balanced and equitable and fairly protect the interests of
12    the parties to the sourcing agreement, with such approval
13    to occur no later than 60 days after the commencement of
14    the mediation. The Agency shall not withhold or condition
15    its approval of the sourcing agreement based upon least
16    cost resource principles or whether or not it would be
17    prudent for buyers to enter into such an agreement if there
18    were no legal requirement to do so, nor shall the
19    resolution of open issues be based on these principles.
20        If the sourcing agreement is approved, then each
21    electric utility required to enter into a sourcing
22    agreement shall have 30 days after either the Agency's
23    approval or the issuance of any necessary approval by the
24    Federal Energy Regulatory Commission, whichever is later,
25    to enter into the sourcing agreement. The Agency shall
26    submit the approved sourcing agreement to the Commission

 

 

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1    within 15 days after approval. Each electric utility and
2    the initial clean coal facility shall pay a reasonable fee
3    as required by the Agency for its services under this
4    paragraph (4) and shall pay the mediator's reasonable fees,
5    if any. The Agency shall adopt and make public a policy
6    detailing the process for retaining a mediator under this
7    paragraph (4).
8        (4) Effective date of sourcing agreements with the
9    initial clean coal facility. Any proposed sourcing
10    agreement with the initial clean coal facility shall not
11    become effective unless a facility cost report and
12    Commission report, as described in this paragraph (4), the
13    following reports are prepared and submitted, whether
14    prepared and submitted before or after the effective date
15    of this amendatory Act of the 97th General Assembly. and
16    authorizations and approvals obtained:
17        (i) Facility cost report. The owner of the initial
18    clean coal facility shall submit to the Commission, the
19    Agency, and the General Assembly a front-end engineering
20    and design study, a facility cost report, method of
21    financing (including but not limited to structure and
22    associated costs), and an operating and maintenance cost
23    quote for the facility (collectively "facility cost
24    report"), which shall be prepared in accordance with the
25    requirements of this paragraph (4) of subsection (d) of
26    this Section, and shall provide the Commission and the

 

 

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

 

 

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

 

 

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

 

 

SB0678 Engrossed- 76 -LRB097 04938 ASK 44978 b

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

 

 

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1            cost quote, potential vendors under long-term
2            service agreements and plant operating agreements,
3            or recognized third party plant operator or
4            operators.
5                The operating and maintenance cost quote
6            (including the cost of the front end engineering
7            and design study) shall be expressed in nominal
8            dollars as of the date that the quote is prepared
9            and shall include (1) taxes, insurance, and other
10            owner's costs, and (2) an assumed escalation in
11            materials and labor beyond the date as of which the
12            operating and maintenance cost quote is expressed.
13            (D) The facility cost report shall also include (i)
14        an analysis of the initial clean coal facility's
15        ability to deliver power and energy into the applicable
16        regional transmission organization markets and (ii) an
17        analysis of the expected capacity factor for the
18        initial clean coal facility.
19            (E) Amounts paid to third parties unrelated to the
20        owner or owners of the initial clean coal facility to
21        prepare the core plant construction cost quote,
22        including the front end engineering and design study,
23        and the operating and maintenance cost quote will be
24        reimbursed through Coal Development Bonds.
25        (5) Re-powering and retrofitting coal-fired power
26    plants previously owned by Illinois utilities to qualify as

 

 

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1    clean coal facilities. During the 2009 procurement
2    planning process and thereafter, the Agency and the
3    Commission shall consider sourcing agreements covering
4    electricity generated by power plants that were previously
5    owned by Illinois utilities and that have been or will be
6    converted into clean coal facilities, as defined by Section
7    1-10 of this Act. Pursuant to such procurement planning
8    process, the owners of such facilities may propose to the
9    Agency sourcing agreements with utilities and alternative
10    retail electric suppliers required to comply with
11    subsection (d) of this Section and item (5) of subsection
12    (d) of Section 16-115 of the Public Utilities Act, covering
13    electricity generated by such facilities. In the case of
14    sourcing agreements that are power purchase agreements,
15    the contract price for electricity sales shall be
16    established on a cost of service basis. In the case of
17    sourcing agreements that are contracts for differences,
18    the contract price from which the reference price is
19    subtracted shall be established on a cost of service basis.
20    The Agency and the Commission may approve any such utility
21    sourcing agreements that do not exceed cost-based
22    benchmarks developed by the procurement administrator, in
23    consultation with the Commission staff, Agency staff and
24    the procurement monitor, subject to Commission review and
25    approval. The Commission shall have authority to inspect
26    all books and records associated with these clean coal

 

 

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1    facilities during the term of any such contract.
2        (6) Costs incurred by a utility under this subsection
3    (d) or pursuant to a contract or sourcing agreement entered
4    into under this subsection (d) shall be deemed prudently
5    incurred and reasonable in amount and the electric utility
6    shall be entitled to full cost recovery pursuant to the
7    tariffs filed with the Commission.
8        (e) The draft procurement plans are subject to public
9    comment, as required by Section 16-111.5 of the Public
10    Utilities Act and Section 1-78 of this Act.
11        (f) The Agency shall submit the final procurement plan
12    to the Commission. The Agency shall revise a procurement
13    plan if the Commission determines that it does not meet the
14    standards set forth in Section 16-111.5 of the Public
15    Utilities Act and Section 1-78 of this Act.
16        (g) The Agency shall assess fees to each affected
17    utility to recover the costs incurred in preparation of the
18    annual procurement plan for the utility.
19        (h) The Agency shall assess fees to each bidder to
20    recover the costs incurred in connection with a competitive
21    procurement process.
22        (i) The Agency shall assess fees to the initial clean
23    coal facility to recover the costs incurred in preparation
24    of each procurement plan for the initial clean coal
25    facility.
26        (j) The General Assembly finds that enterprises owned

 

 

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1    by minorities, women, and persons with disabilities are
2    under-represented in sales of goods and services used in
3    the construction of energy projects and accordingly deems
4    it a prudent business practice that is in the interests of
5    the People of the State of Illinois to develop and promote
6    economic opportunities for enterprises owned by
7    minorities, women, and persons with disabilities in the
8    energy production industry.
9        The initial clean coal facility, any clean coal
10    facility, any clean coal SNG brownfield facility, and any
11    clean coal SNG facility shall include in any agreement to
12    sell electric power or SNG entered into pursuant to this
13    Act provisions that require the owner of the facility to
14    make a good faith effort to ensure that an amount equal to
15    not less than 15% of the value of its prime construction
16    contract for the facility shall be established as a goal to
17    be awarded to minority owned businesses, female owned
18    businesses, and businesses owned by a person with a
19    disability; provided that at least 75% of the amount of
20    such total goal shall be for minority owned businesses.
21        "Minority owned business", "female owned business",
22    and "business owned by a person with a disability" shall
23    have the meanings ascribed to them in Section 2 of the
24    Business Enterprise for Minorities, Females, and Persons
25    with Disabilities Act.
26        (k) Any clean coal SNG facility or clean coal SNG

 

 

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1    brownfield facility shall be authorized to enter into an
2    SNG purchase agreement with the initial clean coal facility
3    as described in item (xvi) of subparagraph (D) of paragraph
4    (3) of subsection (d) of this Section.
5(Source: P.A. 96-159, eff. 8-10-09; 96-1437, eff. 8-17-10;
697-325, eff. 8-12-11.)
 
7    (20 ILCS 3855/1-76 new)
8    Sec. 1-76. Costs and revenue recoverable by the initial
9clean coal facility.
10    (a) The price paid for electricity generated by the initial
11clean coal facility shall be based on a formula rate using a
12cost of service methodology applicable to wholesale electric
13power contracts employing a level or deferred capital component
14and in accordance with the Uniform System of Accounts, subject
15to and as specifically limited by the provisions set forth in
16this Section.
17    The formula rate shall determine 3 components of the price
18under the sourcing agreements: (1) a fuel charge, (2) an
19electric generation variable charge, and (3) a fixed monthly
20charge. The fuel charge for any month shall be stated in
21dollars per month and shall consist of the total actual fuel
22costs incurred, after taking account of the subtraction of
23miscellaneous net revenue as provided in subsection (d) of this
24Section. The electric generation variable charge for any period
25shall be stated in dollars per MWh and shall consist of all

 

 

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1costs incurred by the initial clean coal facility, other than
2fuel costs, associated with production of electric energy by
3the initial clean coal facility's power block, which costs vary
4directly with the level of production of electric energy. The
5fixed monthly charge shall be stated in dollars per month per
6MW of nameplate capacity of the initial clean coal facility's
7power block and shall consist of all costs incurred by the
8initial clean coal facility that are described in, and as
9limited by the provisions of, subsections (b), (c), (d), (e),
10(f), and (g) of this Section, other than the costs incorporated
11into the calculation of the fuel charge and the electric
12generation variable charge.
13    No later than 30 days after the approval of the sourcing
14agreement by the Agency pursuant to paragraph (4) of subsection
15(d) of Section 1-75 of this Act, the initial clean coal
16facility shall provide to the Commission projections of its
17costs for the term of the sourcing agreements. Within 90 days
18thereafter, the Commission shall, based upon such projections
19and the provisions of this Section, determine the projected
20components of the price for each year for the initial clean
21coal facility. No later than 6 months before the expected
22commencement of commercial operation of the initial clean coal
23facility and the commencement of each operating year
24thereafter, the initial clean coal facility shall submit to the
25Commission projections of its costs and dispatch levels for the
26upcoming year. Within 120 days after the receipt of the initial

 

 

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1clean coal facility's projections of its costs and dispatch
2levels for the upcoming year, the Commission shall calculate a
3fixed monthly charge and an electric generation variable charge
4for the upcoming year using the inputs to the formula rate
5under the provisions of this Section. If the Commission does
6not calculate such components of the price for any year as of
7the beginning of such year, then the initial clean coal
8facility shall calculate such components of the price based
9upon its projections and the provisions of this Section, with
10any subsequent cost disallowance by the Commission to be
11reflected through a true-up of costs in the next year. If at
12any time the Commission, acting in accordance with this
13Section, disallows any cost, then the amount of such
14disallowance shall be incorporated as a deduction into the
15calculation of the fixed monthly charge and the electric
16generation variable charge, as applicable, for the next year.
17    (b) Capital costs set by the Commission according to this
18subsection (b) shall be included in the formula rate. "Capital
19costs" means costs for the purchase of land, buildings,
20construction, and equipment to be used in the production of
21electricity, and other costs recorded in the Electric Plant
22Accounts and other applicable Balance Sheet Accounts of the
23Uniform System of Accounts for the initial clean coal facility.
24The Capital Development Board shall calculate a range of
25capital costs that it believes would be a reasonable cost for
26the initial clean coal facility. The Capital Development Board

 

 

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1shall commence performing its responsibilities under this
2subsection (b) within 30 days after the effective date of this
3amendatory Act of the 97th General Assembly. In determining a
4range of capital costs, the Capital Development Board shall
5base its evaluation and judgment on professional engineering
6and regulatory accounting principles and include any cost
7information and update on costs that may be provided by the
8initial clean coal facility and shall not employ least cost
9resource principles. In addition, the Capital Development
10Board may:
11        (1) include in its consideration the information in a
12    facility cost report, if any, that was prepared and
13    submitted by the initial clean coal facility to the
14    Commission in accordance with paragraph (4) of subsection
15    (d) of Section 1-75 of this Act;
16        (2) consult as much as it deems necessary with the
17    initial clean coal facility;
18        (3) conduct whatever research and investigation it
19    deems necessary; and
20        (4) retain third parties to assist in its
21    determination, provided that such third parties shall not
22    own or control any direct or indirect interest in the
23    initial clean coal facility and shall have no contractual
24    relationship with the initial clean coal facility.
25    The initial clean coal facility shall cooperate with the
26Capital Development Board in any investigation it deems

 

 

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1necessary.
2    The Capital Development Board shall make its final
3determination of the range of capital costs confidentially and
4shall submit that range to the Commission in a confidential
5filing no later than 90 days after the Capital Development
6Board is required to commence performing its responsibilities
7under this subsection (b). The initial clean coal facility
8shall submit to the Commission its estimate of the capital
9costs to be included in the formula rate. Only after the
10initial clean coal facility has submitted this estimate shall
11the Commission publicly announce the range of capital costs
12submitted by the Capital Development Board. In the event that
13the estimate submitted by the initial clean coal facility is
14within or below the range submitted by the Capital Development
15Board, the initial clean coal facility's estimate shall be
16approved by the Commission as the amount of pre-approved
17capital costs.
18    In the event that the estimate submitted by the initial
19clean coal facility is above the range submitted by the Capital
20Development Board, the amount of capital costs at the lowest
21end of the range submitted by the Capital Development Board
22shall be approved by the Commission as the amount of
23pre-approved capital costs. "Pre-approved capital costs" means
24the amount of capital costs that will be included in the
25formula rate to the extent such costs are actually incurred,
26with no further review or approval with respect to whether they

 

 

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1are prudently incurred. The Commission's determination of
2pre-approved capital costs shall be made within 15 days after
3the initial clean coal facility submits its capital cost
4estimate. The Commission's decision regarding pre-approved
5capital costs shall be final and shall not be subject to
6judicial or administrative review.
7    Once made, the Commission's determination of the amount of
8pre-approved capital costs may not be increased unless the
9Commission determines that the incremental costs are
10reasonable, in which case one-third of such reasonable
11incremental costs shall be included in the formula rate and
12recoverable by the initial clean coal facility and two-thirds
13of such costs shall be borne by the initial clean coal facility
14and its contractors, provided that to the extent such
15reasonable incremental costs are the result of change in law or
16non-insurable force majeure, all of such costs shall be
17included in the formula rate and recoverable by the initial
18clean coal facility.
19    "Change in law" means any change, including any enactment,
20repeal, or amendment, in a law, ordinance, rule, regulation,
21interpretation, permit, license, consent or order, including
22those relating to taxes or to environmental matters, or in the
23interpretation or application thereof by any governmental
24authority occurring after May 31, 2011.
25    "Non-insurable force majeure" means events outside of the
26reasonable control of the owner of the initial clean coal

 

 

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1facility and its contractors, subcontractors, and agents that
2are not included on a list, to be attached to the sourcing
3agreement and subject to the procedures set forth in paragraph
4(4) of subsection (d) of Section 1-75 of this Act, of events
5that are customarily covered by builder's risk insurance
6policies for the construction of electric generating plants and
7other large process plants in the United States. "Non-insurable
8force majeure" shall not include changes in prices or other
9changes in market conditions.
10    Any rebates, refunds, or other payments received by the
11owner of the initial clean coal facility from any of its
12contractors with respect to the contractor bearing risk for
13capital cost overruns shall be excluded from miscellaneous net
14revenue and shall not otherwise reduce the costs of the owner
15of the initial clean coal facility for purposes of the formula
16rate. For purposes of this subsection (b), "reasonable" means
17that the decisions, construction, and supervision of
18construction by the owner of the initial clean coal facility
19and its contractors underlying the initial capital cost and
20significant additions to the initial capital cost of the
21initial clean coal facility resulted in efficient, economical,
22and timely construction. In determining the reasonableness of
23the capital costs of the initial clean coal facility, the
24Commission shall consider the knowledge and circumstances
25prevailing at the time of each relevant decision or action of
26the owner of the initial clean coal facility and its

 

 

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1contractors.
2    The Commission may determine that the amount of
3pre-approved capital costs may be increased only after notice
4and a hearing. At that hearing, the Capital Development Board
5shall submit a report recommending whether the incremental
6costs should be approved in full or in part or rejected. The
7Commission may approve in whole or in part or reject the
8incremental capital costs based on whether they are reasonable.
9At the request of the owner of the initial clean coal facility
10made not more often than once every 12 months during the
11construction period of the initial clean coal facility, the
12Commission shall conduct interim reviews to determine whether
13capital costs specified in such request and incurred or to be
14incurred by the owner of the initial clean coal facility are
15reasonable.
16    The Capital Development Board shall monitor the
17construction of the initial clean coal facility for the full
18duration of construction. The Capital Development Board, in its
19discretion, may retain third parties to facilitate such
20monitoring, provided that such third parties shall not own or
21control any direct or indirect interest in the initial clean
22coal facility and shall have no contractual relationship with
23the initial clean coal facility. The initial clean coal
24facility shall pay a reasonable fee as required by the Capital
25Development Board for the Capital Development Board's services
26under this subsection (b), and such fee shall not be passed

 

 

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1through to a utility or its customers. If a third party is
2retained by the Capital Development Board for the determination
3of a range of capital costs or monitoring of construction, the
4initial clean coal facility must pay for the third party's
5reasonable fees, and such costs may not be passed through to a
6utility or its customers.
7    The provisions of this subsection (b) shall apply to the
8capital costs for the initial construction of the initial clean
9coal facility and not to capital costs incurred beyond the
10initial construction, including costs for replacement of
11equipment and capital improvements, which capital costs shall
12be subject to review by the Commission and included in the
13formula rate to the extent they are determined to be prudently
14incurred.
15    (c) Operations and maintenance costs set by the Commission
16according to this subsection (c) shall be included in the
17formula rate. Operations and maintenance costs mean costs
18incurred for the administration, supervision, operation,
19maintenance, preservation, and protection of the initial clean
20coal facility's physical plant and other costs recorded in the
21Operation and Maintenance Expense Accounts and other
22applicable Income Statement Accounts of the Uniform System of
23Accounts for the initial clean coal facility. The Commission
24shall assess the prudency of the operations and maintenance
25costs for the initial clean coal facility and shall allow the
26initial clean coal facility to include in the formula rate only

 

 

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1those costs the Commission deems to be prudent. The Commission
2may in its discretion retain an expert to assist in its review
3of operations and maintenance costs. The initial clean coal
4facility shall pay for the expert's fees if an expert is
5retained by the Commission, and such costs may not be passed
6through to a utility or its customers. The Commission's
7determination regarding the amount of operations and
8maintenance costs that may be included in the formula rate for
9each year shall be made in accordance with this Section.
10    (d) Actual fuel costs shall be set by the Agency through a
11SNG feedstock procurement, pursuant to Section 1-79 of this
12Act, to be performed at least every 5 years, and purchased by
13the initial clean coal facility pursuant to a reasonable fuel
14supply plan, with coal comprising at least 50% of the total
15feedstock over the term of a sourcing agreement with all coal
16having high volatile bituminous rank and greater than 1.7
17pounds of sulfur per million btu content, SNG derived from coal
18comprising at least 50% of the fuel to generate electricity,
19SNG derived from biomass comprising up to 10% of the fuel to
20generate electricity with the approval of the Commission, and
21natural gas comprising the remainder of the fuel to generate
22electricity. Actual fuel costs shall consist of all costs
23associated with the procurement of fuel, including, but not
24limited to, commodity costs, transportation costs,
25administrative costs, and costs relating to the procurement
26process. Actual fuel costs, as so determined, shall be reduced

 

 

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1by miscellaneous net revenue received by the owner of the
2initial clean coal facility, including, but not limited to, net
3revenue from the sale of emission allowances, if any,
4substitute natural gas, if any, grants or other support
5provided by the State of Illinois or the United States
6Government, firm transmission rights, if any, by-products
7produced by the facility, any capacity derived from the
8facility and bid into the capacity markets or otherwise sold
9and any energy generated as a result of such capacity being
10called, whether generated from synthesis gas derived from coal,
11from SNG, or from natural gas, less non-generation variable
12costs. "Non-generation variable costs" means all costs, other
13than fuel costs, associated with the production of SNG that is
14not consumed by the initial clean coal facility's power block,
15which costs vary directly with the level of production of SNG.
16Actual fuel costs shall be calculated pursuant to this
17subsection (d) and included in the formula rate without any
18determination by the Commission as to prudency.
19    (e) Sequestration costs set by the Commission according to
20this subsection (e) shall be included in the formula rate.
21    "Sequestration costs" means costs incurred to (1) capture
22carbon dioxide; (2) compress carbon dioxide; (3) build,
23operate, and maintain a sequestration site in which carbon
24dioxide may be injected; (4) build, operate, and maintain a
25carbon dioxide pipeline, which is owned by the initial clean
26coal facility; (5) transport the carbon dioxide to a

 

 

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1sequestration site or a pipeline; and (6) perform monitoring,
2verification and other activities associated with carbon
3capture and sequestration.
4    "Sequestration capital costs" means sequestration costs
5recorded in the Electric Plant Accounts and other applicable
6Balance Sheet Accounts of the Uniform System of Accounts for
7the initial clean coal facility.
8    "Sequestration operations and maintenance costs" means
9sequestration costs that are recorded in the Operation and
10Maintenance Expense Accounts and other applicable Income
11Statement Accounts of the Uniform System of Accounts for the
12initial clean coal facility and shall include maintenance,
13monitoring, and verification costs.
14    The Capital Development Board shall calculate an estimate
15of sequestration capital costs that it believes would be a
16reasonable cost for the initial clean coal facility's
17sequestration facilities and an estimate of average annual
18sequestration operations and maintenance costs that it
19believes would be a reasonable average annual operation and
20maintenance cost for the initial clean coal facility's carbon
21capture and sequestration activities. The Capital Development
22Board shall commence performing its responsibilities under
23this subsection (e) within 30 days after the effective date of
24this amendatory Act of the 97th General Assembly. In
25determining sequestration capital costs and sequestration
26operations and maintenance costs, the Capital Development

 

 

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1Board shall base its evaluation and judgment on professional
2engineering and regulatory accounting principles and include
3any cost information and update on costs that may be provided
4by the initial clean coal facility and shall not employ least
5cost resource principles. In addition, the Capital Development
6Board may: (A) include in its consideration cost estimate
7information in a facility cost report, if any, that was
8prepared and submitted by the initial clean coal facility to
9the Commission in accordance with paragraph (4) of subsection
10(d) of Section 1-75 of this Act; (B) consult as much as it
11deems necessary with the initial clean coal facility; (C)
12conduct whatever research and investigation it deems
13necessary; and (D) retain third parties to assist in its
14determination, provided that such third parties shall not own
15or control any direct or indirect interest in the initial clean
16coal facility and shall have no contractual relationship with
17the initial clean coal facility. The initial clean coal
18facility shall cooperate with the Capital Development Board in
19any investigation it deems necessary.
20    The Capital Development Board shall make its final
21determination of sequestration capital costs and sequestration
22operations and maintenance costs and submit such determination
23to the Commission no later than 90 days after the Capital
24Development Board is required to commence performing its
25responsibilities under this subsection (e). The Capital
26Development Board shall monitor construction of the

 

 

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1sequestration facilities in the same manner, and with the same
2rights to retain an expert and recover the costs thereof, as
3set forth in subsection (b) of this Section.
4    "Actual sequestration costs" means for any year the sum of:
5(i) the annual amortized portion of sequestration capital
6costs, based on level amortization from the later of the date
7such costs are incurred and the commercial operation date until
8the end of the term of the sourcing agreements; (ii) the rate
9of return approved by the Commission pursuant to subsection (f)
10of this Section applied to sequestration capital costs; and
11(iii) the sequestration operations and maintenance costs
12incurred in such year.
13    "Target sequestration costs" means the sum of: (i) the
14annual amortized portion of the estimated sequestration
15capital costs determined by the Capital Development Board,
16based on level amortization from the later of the date such
17costs are incurred and the commercial operation date until the
18end of the term of the sourcing agreements; (ii) the rate of
19return approved by the Commission pursuant to subsection (f) of
20this Section applied to the estimated sequestration capital
21costs determined by the Capital Development Board; (iii) the
22estimate of average annual sequestration operations and
23maintenance costs determined by the Capital Development Board,
24escalated in accordance with an escalation factor to be
25provided in the sourcing agreement from the date of the Capital
26Development Board's determination to the mid-point of the

 

 

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1applicable year; (iv) the sequestration cost underrun, if any,
2for the immediately preceding year, except to the extent
3applied to allow recovery of a sequestration cost overrun from
4a prior year; and (v) any sequestration costs that are the
5result of a change in law or non-insurable force majeure.
6    "Sequestration cost underrun" means for any year the
7excess, if any, of target sequestration costs for such year
8over actual sequestration costs for such year.
9    "Sequestration cost overrun" means for any year the excess,
10if any, of actual sequestration costs for such year over target
11sequestration costs for such year.
12    For any year in which there is a sequestration cost
13underrun, all actual sequestration costs shall be conclusively
14deemed to be prudent and shall be included in the formula rate
15with no further review or approval in respect of whether they
16are prudently incurred. The Commission shall review the costs
17to ensure they are mathematically correct.
18    For any year in which there is a sequestration cost
19overrun, the Commission shall determine whether all or a
20portion of such sequestration cost overrun was prudently
21incurred, except that the rate of return shall not be subject
22to review. If the Commission determines that the sequestration
23cost overrun was prudently incurred, one-third of such
24sequestration cost overrun shall be included in the formula
25rate and recoverable by the initial clean coal facility and
26two-thirds of such sequestration cost overrun shall be borne by

 

 

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1the initial clean coal facility and not passed through to a
2utility, an alternative retail electric supplier, or the
3customers of a utility unless and until there is a
4sequestration cost underrun for a subsequent year, in which
5event the sequestration cost overrun will be included in the
6formula rate and recoverable by the initial clean coal facility
7up to the amount of the sequestration cost underrun; provided,
8however, that if for any year two-thirds of such sequestration
9cost overrun exceeds the difference of $20,000,000 minus the
10amount of penalty, if any, payable by the initial clean coal
11facility pursuant to Section 1-76.5 with respect to that year,
12the amount of such excess shall also be included in the formula
13rate and recoverable by the initial clean coal facility. The
14detailed procedures for implementing this provision shall be
15set forth in the sourcing agreements, which procedures shall
16include a mechanism for equitably adjusting target
17sequestration costs for any year in which the quantity of
18carbon dioxide actually captured and sequestered by the initial
19clean coal facility is greater than the quantity assumed in
20calculating the estimated costs for such year.
21    "Change in law" means any change, including any enactment,
22repeal, or amendment, in a law, ordinance, rule, regulation,
23interpretation, permit, license, consent or order, including
24those relating to taxes or to environmental matters, or in the
25interpretation or application thereof by any governmental
26authority occurring after May 31, 2011.

 

 

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1    "Non-insurable force majeure" means events outside of the
2reasonable control of the owner of the initial clean coal
3facility and its contractors, subcontractors, and agents that
4are not included on a list, to be attached to the sourcing
5agreement and subject to the procedures set forth in paragraph
6(4) of subsection (d) of Section 1-75 of this Act, of events
7that are customarily covered by builder's risk insurance
8policies for the construction of electric generating plants and
9other large process plants in the United States. "Non-insurable
10force majeure" shall not include changes in prices or other
11changes in market conditions.
12    (f) The Commission shall determine within 120 days after
13the effective date of this amendatory Act of the 97th General
14Assembly or 120 days after the owner of the initial clean coal
15facility files initial direct testimony regarding rate of
16return with the Commission, whichever is later, the total rate
17of return on invested capital for the initial clean coal
18facility following notice and a public hearing. At the hearing,
19all interested parties, including utilities, alternative
20retail electric suppliers, the Attorney General, the Agency,
21and customers, shall be given an opportunity to be heard. In
22determining the rate of return, the Commission shall select a
23sufficient return on investment so as to enable the initial
24clean coal facility to attract capital in financial markets at
25competitive rates. The Commission shall consider the rates of
26return received by developers of facilities similar to the

 

 

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1initial clean coal facility inside or outside Illinois, the
2need to balance an incentive for clean-coal technology with the
3need to protect Illinois ratepayers from high electricity
4costs, and any other information the Commission deems relevant.
5    The Agency shall recommend a rate of return to the
6Commission utilizing the criteria in this subsection (f). The
7Commission shall further take into account the recommendation
8of the Agency, but shall not be bound by it. The rate of return
9shall be no lower than 75 basis points lower than the weighted
10average authorized total rates of return of the electric
11utilities in accordance with original cost rate base for their
12electric distribution assets as of January 1, 2011.
13Notwithstanding the minimum rate of return established in the
14preceding sentence, the rate of return shall be no greater than
15the total rate of return on invested capital that the initial
16clean coal facility would achieve based on an assumed 55% debt
17and 45% equity capital structure, with the cost of debt being
18the actual average cost, including all associated costs and
19fees, of the initial clean coal facility's debt and the cost of
20equity being 11.5%. The Commission's determination of the rate
21of return shall include a mechanism providing for a one-time
22adjustment at or about the commencement of commercial operation
23of the initial clean coal facility to adjust for changes in
24applicable Treasury yield rates between the date of its
25provisional determination of the rate of return and the dates
26of construction period borrowing by the initial clean coal

 

 

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1facility, which adjustment shall apply to 55% of total capital.
2    The Commission's decision shall be final and not subject to
3any rehearing or administrative or judicial review. The rate of
4return determined by the Commission pursuant to this subsection
5(f) shall apply for the term of the sourcing agreements and
6shall not be subject to change, except for the one-time
7adjustment to reflect Treasury yield rate changes as expressly
8contemplated by this subsection (f) and as otherwise expressly
9provided in subsection (b) of Section 1-76.5 of this Act.
10    (g) The following shall not be included in determining the
11formula rate: advertising expenses that do not meet the
12requirements of Sections 9-225 and 9-226 of the Public
13Utilities Act, political activity or lobbying expenses as
14defined by Section 9-224 of the Public Utilities Act, social
15club dues, or charitable contributions, to the extent, in each
16case, that a utility would not be permitted to recover such
17costs.
18    (h) Except as otherwise provided in subsections (b) and (f)
19of this Section 1-76, within 30 days after a decision of the
20Commission on recoverable costs under this Section, any
21interested party to the Commission's decision may apply for a
22rehearing with respect to the decision. The Commission shall
23receive and consider such application for rehearing and shall
24grant or deny the application in whole or in part within 20
25days from the date of the receipt thereof by the Commission. If
26no rehearing is applied for within the required 30 days or an

 

 

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1application for rehearing is denied, the Commission decision
2shall be final.
3    If an application for rehearing is granted, the Commission
4shall hold a rehearing within 30 days after granting the
5application. The decision of the Commission upon rehearing
6shall be final. Except as otherwise provided in subsections (b)
7and (f) of this Section 1-76, any person affected by a decision
8of the Commission under this Section 1-76 may have the decision
9reviewed only under and in accordance with the Administrative
10Review Law. Except as otherwise provided in subsections (b) and
11(f) of this Section 1-76, the provisions of the Administrative
12Review Law, all amendments and modifications thereof and the
13rules adopted pursuant thereto, shall apply to and govern all
14proceedings for the judicial review of final administrative
15decisions of the Commission under this subsection (h). The term
16"administrative decision" is defined as in Section 3-101 of the
17Code of Civil Procedure.
18    (i) The Capital Development Board shall adopt and make
19public a policy detailing the process for retaining third
20parties under this Section. Any third parties retained to
21assist with calculating the capital costs or sequestration
22costs shall be retained no later than 45 days after the
23effective date of this amendatory Act of the 97th General
24Assembly.
 
25    (20 ILCS 3855/1-76.5 new)

 

 

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1    Sec. 1-76.5. Capture and sequestration requirements for
2initial clean coal facility.
3    (a) The initial clean coal facility shall provide
4documentation to the Commission each year of commercial
5operation accurately reporting the quantity of carbon
6emissions from the facility that have been captured and
7sequestered and report any quantities of carbon released from
8the site or sites at which carbon emissions were sequestered in
9prior years, based on continuous monitoring of such sites. If,
10in any year, the owner of the facility fails to demonstrate
11that (1) the portion of the facility that produces SNG captured
12and sequestered at least 90% of the carbon dioxide it would
13otherwise emit and (2) the initial clean coal facility as a
14whole captured and sequestered at least 50% of the total carbon
15emissions that the facility would otherwise emit or if the
16sequestration of emissions from prior years has failed,
17resulting in the release of carbon dioxide into the atmosphere,
18or both, then the owner of the initial clean coal facility must
19pay a penalty of $20,000,000, which shall be deposited into the
20Energy Efficiency Trust Fund and distributed pursuant to
21subsection (b) of Section 6-6 of the Renewable Energy, Energy
22Efficiency, and Coal Resources Development Law of 1997.
23    If during the first 12 months of commercial operation of
24the initial clean coal facility, there are more than 4 stops
25and starts of the portion of the facility that produces SNG,
26with each stop and start of an individual unit constituting one

 

 

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1stop and start, then the calculation of the quantities
2described in this subsection (a) shall not take into account
3any carbon dioxide emissions from the portion of the facility
4that produces SNG occurring during the stop and start-up
5periods, including related periods of non-steady state
6operation, associated with such excess stops and starts. The
7penalty resulting from the failure to capture and sequester at
8least the minimum amount of carbon dioxide shall not be passed
9through to a utility, an alternative retail electric supplier,
10or the customers of a utility. The initial clean coal facility
11shall not forfeit its designation as the initial clean coal
12facility if the facility fails to fully comply with the
13applicable carbon sequestration requirements in any given
14year, provided the requisite penalties are complied with.
15    (b) In addition to any penalty for the initial clean coal
16facility's failure to capture and sequester at least its
17minimum sequestration requirement, the Attorney General, on
18behalf of the People of the State of Illinois, shall
19specifically enforce the facility's sequestration requirement
20and the other terms of this contract provision. Such action may
21be filed in any circuit court in Illinois. By entering into a
22sourcing agreement pursuant to subsection (d) of Section 1-75
23of this Act, the initial clean coal facility agrees to waive
24any objections to venue or to the jurisdiction of the court
25with regard to the Attorney General's action for specific
26performance under this Section. The Commission may reduce the

 

 

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1recoverable rate of return approved pursuant to Section 1-76 of
2this Act for the facility if the facility willfully fails to
3comply with the carbon capture and sequestration requirements
4set forth in this Section.
5    (c) Compliance with the capture and sequestration
6requirements of this Section shall be assessed annually by the
7Commission, which may in its discretion retain an expert to
8facilitate its assessment. The initial clean coal facility
9shall pay for the expert's reasonable fees if an expert is
10retained by the Commission, and such costs shall not be passed
11through to a utility, an alternative retail electric supplier,
12or the customers of a utility. The Commission shall adopt and
13make public a policy detailing the process for retaining an
14expert under this Section.
15    (d) Responsibility for compliance with the capture and
16sequestration requirements specified in this Section for the
17initial clean coal facility shall reside solely with the
18initial clean coal facility regardless of whether the facility
19has contracted with another party to capture, transport, or
20sequester carbon dioxide.
 
21    (20 ILCS 3855/1-77.5 new)
22    Sec. 1-77.5. Sequestration permitting, oversight, and
23investigations.
24    (a) No clean coal facility, initial clean coal facility,
25clean coal SNG brownfield facility, or clean coal SNG facility

 

 

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1may transport or sequester carbon dioxide unless the Commission
2approves the method of carbon dioxide transportation or
3sequestration as provided in this Section. Approval shall be
4required regardless of whether the facility has contracted with
5another party to transport or sequester the carbon dioxide.
6Nothing in this subsection (a) shall release the owner or
7operator of a carbon dioxide sequestration site or carbon
8dioxide pipeline from any other permitting requirements under
9applicable State and federal laws, statutes, rules, or
10regulations.
11    (b) No later than 3 months prior to the date upon which the
12company intends to commence construction of the facility, the
13owner of the facility shall file with the Commission a carbon
14dioxide transportation or sequestration plan. The Commission
15shall review proposed carbon dioxide transportation and
16sequestration methods and shall approve those methods it deems
17reasonable and cost-effective. For purposes of this review,
18"cost-effective" means a commercially reasonable price for
19similar carbon dioxide transportation or sequestration
20techniques. In determining whether sequestration through
21injection is reasonable and cost-effective, the Commission may
22consult with the Illinois State Geological Survey.
23    The Commission shall hold a public hearing within 30 days
24after receipt of the facility's carbon dioxide transportation
25or sequestration plan. The Commission shall post notice of the
26review on its website upon submission of a carbon dioxide

 

 

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1transportation or sequestration method and shall accept
2written public comments. The Commission shall take the comments
3into account when making its decision. However, the Commission
4shall not approve a carbon dioxide sequestration method if the
5owner or operator of the sequestration site has not received
6(1) an Underground Injection Control permit from the Illinois
7Environmental Protection Agency or the United States
8Environmental Protection Agency pursuant to the Environmental
9Protection Act, (2) an Underground Injection Control permit
10from the Illinois Department of Natural Resources pursuant to
11the Illinois Oil and Gas Act, or (3) any applicable permit from
12the state in which the sequestration site is located if the
13sequestration shall take place outside of Illinois. The
14Commission shall approve or deny the carbon dioxide
15transportation or sequestration method within 90 days after the
16receipt of all required information.
17    (c) At least annually, the Illinois Environmental
18Protection Agency shall inspect all carbon dioxide
19sequestration sites in Illinois to ensure the safety and
20feasibility of those sequestration sites. However, the
21Illinois Environmental Protection Agency may, as often as
22deemed necessary, monitor and conduct investigations of those
23sites. The owner or operator of the sequestration site must
24cooperate with the Illinois Environmental Protection Agency
25investigations of carbon dioxide sequestration sites. If the
26Illinois Environmental Protection Agency determines at any

 

 

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1time a site creates conditions that warrant the issuance of a
2seal order under Section 34 of the Environmental Protection
3Act, then the Illinois Environmental Protection Agency shall
4seal the site pursuant to the Environmental Protection Act. If
5the Illinois Environmental Protection Agency determines at any
6time a carbon dioxide sequestration site creates conditions
7that warrant the institution of a civil action for an
8injunction under Section 43 of the Environmental Protection
9Act, then the Illinois Environmental Protection Agency shall
10request the State's Attorney or the Attorney General to
11institute such action. The Illinois Environmental Protection
12Agency shall provide notice of any such actions as soon as
13possible on its website.
14    (d) At least annually, the Commission shall inspect all
15carbon dioxide pipelines in Illinois that transport carbon
16dioxide to ensure the safety and feasibility of those
17pipelines. However, the Commission may, as often as deemed
18necessary, monitor and conduct investigations of those
19pipelines. The owner or operator of the pipeline must cooperate
20with the Commission investigations of the carbon dioxide
21pipelines. If the Commission determines at any time that a
22carbon dioxide pipeline creates conditions that warrant the
23issuance of a seal order under Section 34 of the Environmental
24Protection Act, then the Commission shall notify the Illinois
25Environmental Protection Agency of such conditions. In
26circumstances in which the carbon dioxide pipeline creates a

 

 

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1substantial danger to the environment or public health or to
2the welfare of persons when the danger is to the livelihood of
3those persons, the State's Attorney or Attorney General may,
4upon the request of the Commission or on his or her own motion,
5institute a civil action for an immediate injunction to halt
6any discharge or other activity causing or contributing to the
7danger or require any other action as may be necessary. The
8Court may issue an ex parte order and shall schedule a hearing
9on the matter no later than 3 business days after the date of
10the injunction. The Commission shall provide notice of any such
11actions as soon as possible on its website.
 
12    (20 ILCS 3855/1-79 new)
13    Sec. 1-79. Feedstock procurement.
14    (a) A feedstock procurement plan shall, every 5 years, or
15more frequently with respect to feedstock that cannot
16reasonably be procured for a 5-year period on acceptable terms,
17be prepared for the initial clean coal facility based on the
18initial clean coal facility's projection of feedstock usage and
19ratios, and consistent with the applicable requirements of this
20Act. The plan shall specifically identify the feedstock
21products to be procured following plan approval and shall
22follow all the requirements set forth in this Act and all
23applicable State and federal laws, statutes, rules, or
24regulations, as well as Commission orders. Nothing in this
25Section precludes consideration of contracts longer than 5

 

 

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1years and related forecast data. Any feedstock procurement
2occurring in accordance with this plan shall be competitively
3bid through a request for proposals process. Approval and
4implementation of the feedstock procurement plan shall be
5subject to review and approval by the Commission according to
6the provisions set forth in this Section. A feedstock
7procurement plan shall include each of the following
8components:
9        (1) Daily generation analysis. This analysis shall
10    include:
11            (A) multi-year historical analysis of hourly
12        generation; and
13            (B) known or projected changes to future
14        generation.
15        (2) Determination of the fuel specifications required
16    for the initial clean coal facility, including:
17            (A) feedstock mix, as set by the initial clean coal
18        facility with coal having high volatile bituminous
19        rank and greater than 1.7 pounds of sulfur per million
20        btu content and comprising at least 50% of the total
21        feedstock over the term of the sourcing agreement;
22            (B) volume of each feedstock required;
23            (C) quality standards of each feedstock;
24            (D) transportation and delivery requirements and
25        associated costs and impacts on the performance,
26        availability, and reliability of the initial clean

 

 

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1        coal facility;
2            (E) technical specifications of the initial clean
3        coal facility for its feedstocks; and
4            (F) appropriate testing of any proposed feedstock
5        before it is incorporated into the feedstock
6        procurement plan or process to determine the effect of
7        such feedstock on the performance, availability, and
8        reliability of the initial clean coal facility.
9    (b) The feedstock procurement process shall be
10administered by a feedstock procurement administrator and
11monitored by a feedstock procurement monitor.
12        (1) The feedstock procurement administrator shall:
13            (A) design the final feedstock procurement process
14        in accordance with subsection (d) of this Section
15        following Commission approval of the feedstock
16        procurement plan;
17            (B) develop feedstock benchmarks in accordance
18        with paragraph (3) of subsection (d) of this Section to
19        be used to evaluate bids; these benchmarks shall be
20        submitted to the Commission for review and approval on
21        a confidential basis prior to the feedstock
22        procurement event;
23            (C) serve as the interface between the initial
24        clean coal facility and feedstock suppliers regarding
25        bidding and contract negotiations;
26            (D) manage the bidder pre-qualification and

 

 

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1        registration process;
2            (E) obtain the initial clean coal facility's
3        agreement to the final form of all supply contracts and
4        credit collateral agreements;
5            (F) administer the request for feedstock proposals
6        process;
7            (G) have the discretion to negotiate to determine
8        whether bidders are willing to lower the price of bids
9        that meet the benchmarks approved by the Commission;
10        any post-bid negotiations with bidders shall be
11        limited to price only and shall be completed within 24
12        hours after opening the sealed bids and shall be
13        conducted in a fair and unbiased manner; in conducting
14        the negotiations, there shall be no disclosure of any
15        information derived from proposals submitted by
16        competing bidders; if information is disclosed to any
17        bidder, it shall be provided to all competing bidders;
18            (H) maintain confidentiality of supplier and
19        bidding information in a manner consistent with all
20        applicable laws, rules, regulations, and tariffs;
21            (I) submit a confidential report to the Commission
22        recommending acceptance or rejection of bids;
23            (J) notify the facility of contract counterparties
24        and contract specifics; and
25            (K) administer related contingency feedstock
26        procurement events.

 

 

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1        (2) The feedstock procurement monitor, who shall be
2    retained by the Commission, shall:
3            (A) monitor interactions among the feedstock
4        procurement administrator, suppliers, and the initial
5        clean coal facility;
6            (B) monitor and report to the Commission on the
7        progress of the feedstock procurement process;
8            (C) provide an independent confidential report to
9        the Commission regarding the results of the feedstock
10        procurement event;
11            (D) preserve the confidentiality of supplier and
12        bidding information in a manner consistent with all
13        applicable laws, rules, regulations, and tariffs;
14            (E) provide expert advice to the Commission and
15        consult with the feedstock procurement administrator
16        regarding issues related to feedstock procurement
17        process design, rules, protocols, and policy-related
18        matters;
19            (F) consult with the feedstock procurement
20        administrator regarding the development and use of
21        benchmark criteria, standard form contracts, credit
22        policies, and bid documents; and
23            (G) assess compliance with the procurement plans
24        approved by the Commission.
25    (c) The feedstock procurement process shall be conducted as
26follows:

 

 

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1        (1) Beginning in 2012, the initial clean coal facility
2    shall annually provide a range of feedstock requirement
3    forecasts to the Agency by July 15 of each year, or such
4    other date as may be required by the Commission or Agency.
5    The feedstock requirement forecasts shall cover the 5-year
6    feedstock procurement planning period for the next
7    feedstock procurement plan, or such other longer period
8    that the Agency or the Commission may require, and shall
9    include daily data representing a high generation, low
10    generation and expected generation scenario for the
11    initial clean coal facility. The initial clean coal
12    facility shall provide supporting data and assumptions for
13    each of the scenarios.
14        (2) Beginning in 2012, the Agency shall at least every
15    5 years prepare a feedstock procurement plan by August 15th
16    of the applicable year, or such other date as may be
17    required by the Commission. The feedstock procurement plan
18    shall identify the portfolio of feedstocks to be procured.
19    Copies of the feedstock procurement plan shall be posted
20    and made publicly available on the Agency's and
21    Commission's websites, and copies shall also be provided to
22    the initial clean coal facility. The initial clean coal
23    facility shall have 30 days following the date of posting
24    to provide comment to the Agency on the feedstock
25    procurement plan. Other interested entities also may
26    comment on the feedstock procurement plan. All comments

 

 

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1    submitted to the Agency shall be specific, supported by
2    data or other detailed analyses, and, if objecting to all
3    or a portion of the feedstock procurement plan, accompanied
4    by specific alternative wording or proposals. All comments
5    shall be posted on the Agency's and Commission's websites.
6    During this 30-day comment period, the Agency shall hold at
7    least one public hearing for the purpose of receiving
8    public comment on the procurement plan. Within 14 days
9    following the end of the 30-day review period, the Agency
10    shall revise the feedstock procurement plan as necessary
11    based on the comments received, file the feedstock
12    procurement plan with the Commission, and post the
13    feedstock procurement plan on the websites.
14        (3) Within 5 days after the filing of the feedstock
15    procurement plan, any person objecting to the feedstock
16    procurement plan shall file an objection with the
17    Commission. Within 10 days after the filing, the Commission
18    shall determine whether a hearing is necessary. The
19    Commission shall enter its order confirming or modifying
20    the feedstock procurement plan within 90 days after the
21    filing of the feedstock procurement plan by the Agency.
22        (4) The Commission shall approve the feedstock
23    procurement plan, including expressly the forecast used in
24    the feedstock procurement plan, if the Commission
25    determines that it shall ensure adequate, reliable,
26    affordable, and environmentally sustainable feedstocks to

 

 

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1    the initial clean coal facility at the lowest total cost
2    over time, taking into account any benefits of price
3    stability and other criteria set forth in this Section.
4    (d) The feedstock procurement process shall include each of
5the following components:
6        (1) Solicitation, pre-qualification, and registration
7    of bidders. The feedstock procurement administrator shall
8    disseminate information to potential bidders to promote a
9    feedstock procurement event, notify potential bidders that
10    the feedstock procurement administrator may enter into a
11    post-bid price negotiation with bidders that meet the
12    applicable benchmarks, provide supply requirements, and
13    otherwise explain the competitive feedstock procurement
14    process. In addition to such other publication as the
15    feedstock procurement administrator determines is
16    appropriate, this information shall be posted on the
17    Agency's and the Commission's websites. The feedstock
18    procurement administrator shall also administer the
19    prequalification process, including evaluation of
20    creditworthiness, compliance with feedstock procurement
21    rules, and agreement to the standard form contract
22    developed pursuant to paragraph (2) of this subsection (d).
23    The feedstock procurement administrator shall then
24    identify and register bidders to participate in the
25    feedstock procurement event.
26        (2) Standard contract forms and credit terms and

 

 

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1    instruments. The feedstock procurement administrator, in
2    consultation with the initial clean coal facility,
3    electric utilities, alternative retail electric suppliers,
4    the Commission, and other interested parties and subject to
5    Commission oversight, shall develop and provide standard
6    contract forms for the supplier contracts that meet
7    generally accepted industry practices. Standard credit
8    terms and instruments that meet generally accepted
9    industry practices shall be similarly developed. The
10    feedstock procurement administrator shall make available
11    to the Commission all written comments it receives on the
12    contract forms, credit terms, or instruments. If the
13    feedstock procurement administrator cannot reach agreement
14    with the initial clean coal facility as to the contract
15    terms and conditions, then the feedstock procurement
16    administrator must notify the Commission of any disputed
17    terms and the Commission shall resolve the dispute. The
18    terms of the contracts shall not be subject to negotiation
19    by winning bidders, and the bidders must agree to the terms
20    of the contract in advance so that winning bids are
21    selected solely on the basis of price.
22        (3) Establishment of a market-based price benchmark.
23    As part of the development of the feedstock procurement
24    process, the feedstock procurement administrator, in
25    consultation with the Commission staff, Agency staff, and
26    the feedstock procurement monitor, shall establish

 

 

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1    benchmarks for evaluating the final prices in the contracts
2    for each of the feedstocks that shall be procured through
3    the feedstock procurement process. The benchmarks shall be
4    based on price data for similar feedstocks for the same
5    delivery period and similar delivery points, or other
6    delivery points after adjusting for that difference. The
7    price benchmarks may also be adjusted to take into account
8    differences between the information reflected in the
9    underlying data sources and the specific feedstocks and
10    gasification feedstock procurement process being used to
11    procure for the initial clean coal facility. The benchmarks
12    shall be confidential but shall be provided to the
13    Commission, and shall be subject to Commission review and
14    approval, prior to a feedstock procurement event.
15        (4) Request for proposals. The feedstock procurement
16    administrator shall design and issue a request for
17    proposals to supply coal or natural gas in accordance with
18    the initial clean coal facility's usage plan, as approved
19    by the Commission. The request for proposals shall set
20    forth a procedure for sealed, binding commitment bidding
21    with pay-as-bid settlement, and provision for selection of
22    bids on the basis of price.
23        (5) A plan for implementing contingencies in the event
24    of supplier default or failure of the feedstock procurement
25    process to fully meet the expected generation requirement
26    due to insufficient supplier participation, Commission

 

 

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1    rejection of results, or any other cause. The plan must be
2    specific to the initial clean coal facility's feedstock
3    specifications and requirements.
4    The feedstock procurement process described in this
5subsection (d) is exempt from the requirements of the Illinois
6Procurement Code pursuant to Section 20-10 of the Illinois
7Procurement Code.
8    (e) Within 2 business days after opening the sealed bids,
9the feedstock procurement administrator shall submit a
10confidential report to the Commission. The report shall contain
11the results of the bidding for each of the feedstock types
12along with the feedstock procurement administrator's
13recommendation for the acceptance and rejection of bids based
14on the price benchmark criteria and other factors observed in
15the process. The feedstock procurement monitor also shall
16submit a confidential report to the Commission within 2
17business days after opening the sealed bids. The report shall
18contain the feedstock procurement monitor's assessment of
19bidder behavior in the process, as well as an assessment of the
20feedstock procurement administrator's compliance with the
21feedstock procurement process and rules. The Commission shall
22review the confidential reports submitted by the feedstock
23procurement administrator and feedstock procurement monitor
24and shall accept or reject the recommendations of the feedstock
25procurement administrator within 2 business days after receipt
26of the reports.

 

 

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1    (f) Within 3 business days after the Commission decision
2approving the results of a feedstock procurement event, the
3initial clean coal facility shall enter into binding
4contractual arrangements with the winning suppliers using
5standard form contracts.
6    (g) The names of the successful bidders and the amount of
7feedstock to be delivered for each contract type and for each
8contract term shall be made available to the public at the time
9of Commission approval of a feedstock procurement event. The
10Commission, the feedstock procurement monitor, the feedstock
11procurement administrator, the Agency, and all participants in
12the feedstock procurement process shall maintain the
13confidentiality of all other supplier and bidding information
14in a manner consistent with all applicable laws, rules,
15regulations, and tariffs. Confidential information, including
16the confidential reports submitted by the feedstock
17procurement administrator and feedstock procurement monitor
18pursuant to subsection (e) of this Section, shall not be made
19publicly available and shall not be discoverable by any party
20in any proceeding, absent a compelling demonstration of need,
21nor shall those reports be admissible in any proceeding other
22than one for law enforcement purposes.
23    (h) Within 2 business days after a Commission decision
24approving the results of a feedstock procurement event or such
25other date as may be required by the Commission from time to
26time, the initial clean coal facility shall file for

 

 

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1informational purposes with the Commission its actual or
2estimated feedstock costs reflecting the costs associated with
3the feedstock procurement.
4    (i) The initial clean coal facility shall pay for
5reasonable costs incurred by the Agency in administering the
6feedstock procurement events. The Agency shall determine the
7amount owed for each feedstock procurement event, and the
8initial clean coal facility shall pay that amount to the Agency
9within 30 days after being informed by the Agency of the amount
10owed. Those funds shall be deposited into the Agency Operations
11Fund, pursuant to Section 1-55 of this Act, to be used to
12reimburse expenses related to the feedstock procurement.
13    (j) The Commission has the authority to adopt rules to
14carry out the provisions of this Section. For the public
15interest, safety, and welfare, the Commission also has the
16authority to adopt rules to carry out the provisions of this
17Section on an emergency basis.
18    (k) On or before April 1 of each year, the Commission may,
19hold an informal hearing for the purpose of receiving comments
20on the prior year's feedstock procurement process and any
21recommendations for change.
22    (l) For all purposes of this Section 1-79 and subsection
23(a-5) of Section 1-75 of this Act, (i) feedstock procurement
24shall be deemed to include transportation of the feedstock
25products to the initial clean coal facility (including the
26acquisition by the initial clean coal facility, as appropriate,

 

 

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1of trucks, railcars or other transportation equipment), (ii)
2feedstock procurement shall not be deemed to include day-to-day
3performance and administration of feedstock procurement and
4transportation arrangements, including scheduling, weighing,
5quality determination, acceptance or rejection of shipments,
6price adjustments, documentation and related activities, all
7of which shall be performed by the owner of the initial clean
8coal facility, and (iii) feedstock supplier shall be deemed to
9include feedstock transporters and providers of feedstock
10transportation equipment.
11    (m) Any agreement for the purchase of SNG entered into by
12the initial clean coal facility pursuant to item (xvi) of
13subparagraph (D) of paragraph (3) of subsection (d) of Section
141-75 of this Act shall be deemed for all purposes, including,
15but not limited to, the inclusion of costs under such agreement
16being included as part of the initial clean coal facility's
17actual fuel costs pursuant to subsection (d) of Section 1-76 of
18this Act, to have been entered into pursuant to the procurement
19process set forth in this Section 1-79, even though such
20agreement shall not be subject to competitive bidding. The
21Agency, the feedstock procurement administrator, and the
22feedstock procurement monitor shall take account of the initial
23clean coal facility's obligations under any such agreement in
24determining the feedstock procurement arrangements that may be
25entered into by the initial clean coal facility pursuant to
26this Section 1-79, as well as the implementation and

 

 

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1administration of such feedstock procurement arrangements.
 
2    (20 ILCS 3855/1-81 new)
3    Sec. 1-81. Limited non-impairment.
4    (a) The State of Illinois pledges that the State shall not
5enact any law or take any action to:
6        (1) break, or repeal the authority for, sourcing
7    agreements in a form approved by the Agency and entered
8    into between electric utilities and the initial clean coal
9    facility pursuant to subsection (d) of Section 1-75 of this
10    Act;
11        (2) break, or repeal the authority for, sourcing
12    agreements in a form approved by the Agency and entered
13    into between alternative retail electric suppliers and the
14    initial clean coal facility;
15        (3) deny electric utilities full cost recovery for
16    their costs incurred under those sourcing agreements;
17        (4) deny the initial clean coal facility full cost
18    recovery under those sourcing agreements for costs that are
19    recoverable under Section 1-76 of this Act.
20        (5) repeal or remove the requirement that electric
21    utilities shall enter into sourcing agreements with the
22    initial clean coal facility under paragraph (3) of
23    subsection (d) of Section 1-75 of this Act or subsection
24    (c) of Section 16-116 of the Public Utilities Act; or
25        (6) repeal or remove the requirement that alternative

 

 

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1    retail electric suppliers shall enter into sourcing
2    agreements with the initial clean coal facility under item
3    (iv) of paragraph (5) of subsection (d) of Section 16-115
4    of the Public Utilities Act.
5    These pledges are for the benefit of the parties to those
6sourcing agreements and the issuers and holders of bonds or
7other obligations issued or incurred to finance or refinance
8the initial clean coal facility. The initial clean coal
9facility is authorized to include and refer to these pledges in
10any financing agreement into which it may enter in regard to
11those sourcing agreements.
12    (b) The State of Illinois retains and reserves all other
13rights to enact new or amendatory legislation or take any other
14action, without impairment of the right of the initial clean
15coal facility to recover prudently incurred costs resulting
16from the new or amendatory legislation or other action as
17approved by the Commission, including, but not limited to,
18legislation or other action that would: (1) directly or
19indirectly raise the costs that the initial clean coal facility
20must incur; (2) directly or indirectly place additional
21restrictions, regulations, or requirements on the initial
22clean coal facility; (3) prohibit sequestration in general or
23prohibit a specific sequestration method or project; or (4)
24increase minimum sequestration requirements for the initial
25clean coal facility to a technically feasible extent.
 

 

 

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1    Section 10. The Illinois Procurement Code is amended by
2changing Sections 1-10 and 20-10 as follows:
 
3    (30 ILCS 500/1-10)
4    Sec. 1-10. Application.
5    (a) This Code applies only to procurements for which
6contractors were first solicited on or after July 1, 1998. This
7Code shall not be construed to affect or impair any contract,
8or any provision of a contract, entered into based on a
9solicitation prior to the implementation date of this Code as
10described in Article 99, including but not limited to any
11covenant entered into with respect to any revenue bonds or
12similar instruments. All procurements for which contracts are
13solicited between the effective date of Articles 50 and 99 and
14July 1, 1998 shall be substantially in accordance with this
15Code and its intent.
16    (b) This Code shall apply regardless of the source of the
17funds with which the contracts are paid, including federal
18assistance moneys. This Code shall not apply to:
19        (1) Contracts between the State and its political
20    subdivisions or other governments, or between State
21    governmental bodies except as specifically provided in
22    this Code.
23        (2) Grants, except for the filing requirements of
24    Section 20-80.
25        (3) Purchase of care.

 

 

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1        (4) Hiring of an individual as employee and not as an
2    independent contractor, whether pursuant to an employment
3    code or policy or by contract directly with that
4    individual.
5        (5) Collective bargaining contracts.
6        (6) Purchase of real estate, except that notice of this
7    type of contract with a value of more than $25,000 must be
8    published in the Procurement Bulletin within 7 days after
9    the deed is recorded in the county of jurisdiction. The
10    notice shall identify the real estate purchased, the names
11    of all parties to the contract, the value of the contract,
12    and the effective date of the contract.
13        (7) Contracts necessary to prepare for anticipated
14    litigation, enforcement actions, or investigations,
15    provided that the chief legal counsel to the Governor shall
16    give his or her prior approval when the procuring agency is
17    one subject to the jurisdiction of the Governor, and
18    provided that the chief legal counsel of any other
19    procuring entity subject to this Code shall give his or her
20    prior approval when the procuring entity is not one subject
21    to the jurisdiction of the Governor.
22        (8) Contracts for services to Northern Illinois
23    University by a person, acting as an independent
24    contractor, who is qualified by education, experience, and
25    technical ability and is selected by negotiation for the
26    purpose of providing non-credit educational service

 

 

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1    activities or products by means of specialized programs
2    offered by the university.
3        (9) Procurement expenditures by the Illinois
4    Conservation Foundation when only private funds are used.
5        (10) Procurement expenditures by the Illinois Health
6    Information Exchange Authority involving private funds
7    from the Health Information Exchange Fund. "Private funds"
8    means gifts, donations, and private grants.
9        (11) Public-private agreements entered into according
10    to the procurement requirements of Section 20 of the
11    Public-Private Partnerships for Transportation Act and
12    design-build agreements entered into according to the
13    procurement requirements of Section 25 of the
14    Public-Private Partnerships for Transportation Act.
15    (c) This Code does not apply to the electric power
16procurement process provided for under Section 1-75 of the
17Illinois Power Agency Act and Section 16-111.5 of the Public
18Utilities Act.
19    (d) Except for Section 20-160 and Article 50 of this Code,
20and as expressly required by Section 9.1 of the Illinois
21Lottery Law, the provisions of this Code do not apply to the
22procurement process provided for under Section 9.1 of the
23Illinois Lottery Law.
24    (e) This Code does not apply to the process used by the
25Capital Development Board to retain a person or entity to
26assist the Capital Development Board with its duties related to

 

 

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1the determination of costs of a clean coal SNG brownfield
2facility, as defined by Section 1-10 of the Illinois Power
3Agency Act, as required in subsection (h-3) of Section 9-220 of
4the Public Utilities Act, including calculating the range of
5capital costs, the range of operating and maintenance costs, or
6the sequestration costs or monitoring the construction of clean
7coal SNG brownfield facility for the full duration of
8construction.
9    (f) This Code does not apply to the process used by the
10Illinois Power Agency to retain a mediator to mediate sourcing
11agreement disputes between gas utilities and the clean coal SNG
12brownfield facility, as defined in Section 1-10 of the Illinois
13Power Agency Act, as required under subsection (h-1) of Section
149-220 of the Public Utilities Act.
15    (g) (e) This Code does not apply to the processes used by
16the Illinois Power Agency to retain a mediator to mediate
17contract disputes between gas utilities and the clean coal SNG
18facility and to retain an expert to assist in the review of
19contracts under subsection (h) of Section 9-220 of the Public
20Utilities Act. This Code does not apply to the process used by
21the Illinois Commerce Commission to retain an expert to assist
22in determining the actual incurred costs of the clean coal SNG
23facility and the reasonableness of those costs as required
24under subsection (h) of Section 9-220 of the Public Utilities
25Act.
26    (h) This Code does not apply to the process used by the

 

 

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1Capital Development Board to retain a person or entity to
2assist the Capital Development Board with its duties related to
3the determination of costs of an initial clean coal facility,
4as defined under Section 1-10 of the Illinois Power Agency Act,
5as required under Section 1-76 of the Illinois Power Agency
6Act, including calculating the range of capital costs or the
7sequestration costs or monitoring the construction of initial
8clean coal facility for the full duration of construction.
9    (i) This Code does not apply to the process used by the
10Illinois Power Agency to retain a mediator to mediate sourcing
11agreement disputes between electric utilities or alternative
12retail electric suppliers and the initial clean coal facility,
13as defined under Section 1-10 of the Illinois Power Agency Act,
14as required under paragraph (4) of subsection (d) of Section
151-75 of the Illinois Power Agency Act. This Code does not apply
16to the process used by the Illinois Commerce Commission to
17retain an expert to assist the Commission with its duties
18related to the determination of the costs of an initial clean
19coal facility, as defined under Section 1-10 of the Illinois
20Power Agency Act, as required under Section 1-76 of the
21Illinois Power Agency Act, including determining the initial
22clean coal facility's operations and maintenance costs, or
23compliance with capture and sequestration requirements.
24(Source: P.A. 96-840, eff. 12-23-09; 96-1331, eff. 7-27-10;
2597-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-502, eff. 8-23-11;
26revised 9-7-11.)
 

 

 

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1    (30 ILCS 500/20-10)
2    (Text of Section from P.A. 96-159, 96-588, 97-96, and
397-198)
4    Sec. 20-10. Competitive sealed bidding; reverse auction.
5    (a) Conditions for use. All contracts shall be awarded by
6competitive sealed bidding except as otherwise provided in
7Section 20-5.
8    (b) Invitation for bids. An invitation for bids shall be
9issued and shall include a purchase description and the
10material contractual terms and conditions applicable to the
11procurement.
12    (c) Public notice. Public notice of the invitation for bids
13shall be published in the Illinois Procurement Bulletin at
14least 14 days before the date set in the invitation for the
15opening of bids.
16    (d) Bid opening. Bids shall be opened publicly in the
17presence of one or more witnesses at the time and place
18designated in the invitation for bids. The name of each bidder,
19the amount of each bid, and other relevant information as may
20be specified by rule shall be recorded. After the award of the
21contract, the winning bid and the record of each unsuccessful
22bid shall be open to public inspection.
23    (e) Bid acceptance and bid evaluation. Bids shall be
24unconditionally accepted without alteration or correction,
25except as authorized in this Code. Bids shall be evaluated

 

 

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1based on the requirements set forth in the invitation for bids,
2which may include criteria to determine acceptability such as
3inspection, testing, quality, workmanship, delivery, and
4suitability for a particular purpose. Those criteria that will
5affect the bid price and be considered in evaluation for award,
6such as discounts, transportation costs, and total or life
7cycle costs, shall be objectively measurable. The invitation
8for bids shall set forth the evaluation criteria to be used.
9    (f) Correction or withdrawal of bids. Correction or
10withdrawal of inadvertently erroneous bids before or after
11award, or cancellation of awards of contracts based on bid
12mistakes, shall be permitted in accordance with rules. After
13bid opening, no changes in bid prices or other provisions of
14bids prejudicial to the interest of the State or fair
15competition shall be permitted. All decisions to permit the
16correction or withdrawal of bids based on bid mistakes shall be
17supported by written determination made by a State purchasing
18officer.
19    (g) Award. The contract shall be awarded with reasonable
20promptness by written notice to the lowest responsible and
21responsive bidder whose bid meets the requirements and criteria
22set forth in the invitation for bids, except when a State
23purchasing officer determines it is not in the best interest of
24the State and by written explanation determines another bidder
25shall receive the award. The explanation shall appear in the
26appropriate volume of the Illinois Procurement Bulletin.

 

 

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1    (h) Multi-step sealed bidding. When it is considered
2impracticable to initially prepare a purchase description to
3support an award based on price, an invitation for bids may be
4issued requesting the submission of unpriced offers to be
5followed by an invitation for bids limited to those bidders
6whose offers have been qualified under the criteria set forth
7in the first solicitation.
8    (i) Alternative procedures. Notwithstanding any other
9provision of this Act to the contrary, the Director of the
10Illinois Power Agency may create alternative bidding
11procedures to be used in procuring professional services under
12subsections subsection (a) and (a-5) of Section 1-75 and
13subsection (d) of Section 1-78 and subsection (d) of Section
141-79 of the Illinois Power Agency Act and Section 16-111.5(c)
15of the Public Utilities Act and to procure renewable energy
16resources under Section 1-56 of the Illinois Power Agency Act.
17These alternative procedures shall be set forth together with
18the other criteria contained in the invitation for bids, and
19shall appear in the appropriate volume of the Illinois
20Procurement Bulletin.
21    (j) Reverse auction. Notwithstanding any other provision
22of this Section and in accordance with rules adopted by the
23Director of Central Management Services as chief procurement
24officer, a State purchasing officer under that chief
25procurement officer's jurisdiction may procure supplies or
26services through a competitive electronic auction bidding

 

 

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1process after the purchasing officer explains in writing to the
2chief procurement officer his or her determination that the use
3of such a process will be in the best interest of the State.
4The chief procurement officer shall publish that determination
5in his or her next volume of the Illinois Procurement Bulletin.
6    An invitation for bids shall be issued and shall include
7(i) a procurement description, (ii) all contractual terms,
8whenever practical, and (iii) conditions applicable to the
9procurement, including a notice that bids will be received in
10an electronic auction manner.
11    Public notice of the invitation for bids shall be given in
12the same manner as provided in subsection (c).
13    Bids shall be accepted electronically at the time and in
14the manner designated in the invitation for bids. During the
15auction, a bidder's price shall be disclosed to other bidders.
16Bidders shall have the opportunity to reduce their bid prices
17during the auction. At the conclusion of the auction, the
18record of the bid prices received and the name of each bidder
19shall be open to public inspection.
20    After the auction period has terminated, withdrawal of bids
21shall be permitted as provided in subsection (f).
22    The contract shall be awarded within 60 days after the
23auction by written notice to the lowest responsible bidder, or
24all bids shall be rejected except as otherwise provided in this
25Code. Extensions of the date for the award may be made by
26mutual written consent of the State purchasing officer and the

 

 

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1lowest responsible bidder.
2    This subsection does not apply to (i) procurements of
3professional and artistic services, including but not limited
4to telecommunications services, communications services,
5Internet services, and information services, and (ii)
6contracts for construction projects.
7(Source: P.A. 95-481, eff. 8-28-07; 96-159, eff. 8-10-09;
896-588, eff. 8-18-09; 97-96, eff. 7-13-11.)
 
9    (Text of Section from P.A. 96-159, 96-795, 97-96, and
1097-198)
11    Sec. 20-10. Competitive sealed bidding; reverse auction.
12    (a) Conditions for use. All contracts shall be awarded by
13competitive sealed bidding except as otherwise provided in
14Section 20-5.
15    (b) Invitation for bids. An invitation for bids shall be
16issued and shall include a purchase description and the
17material contractual terms and conditions applicable to the
18procurement.
19    (c) Public notice. Public notice of the invitation for bids
20shall be published in the Illinois Procurement Bulletin at
21least 14 days before the date set in the invitation for the
22opening of bids.
23    (d) Bid opening. Bids shall be opened publicly in the
24presence of one or more witnesses at the time and place
25designated in the invitation for bids. The name of each bidder,

 

 

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1the amount of each bid, and other relevant information as may
2be specified by rule shall be recorded. After the award of the
3contract, the winning bid and the record of each unsuccessful
4bid shall be open to public inspection.
5    (e) Bid acceptance and bid evaluation. Bids shall be
6unconditionally accepted without alteration or correction,
7except as authorized in this Code. Bids shall be evaluated
8based on the requirements set forth in the invitation for bids,
9which may include criteria to determine acceptability such as
10inspection, testing, quality, workmanship, delivery, and
11suitability for a particular purpose. Those criteria that will
12affect the bid price and be considered in evaluation for award,
13such as discounts, transportation costs, and total or life
14cycle costs, shall be objectively measurable. The invitation
15for bids shall set forth the evaluation criteria to be used.
16    (f) Correction or withdrawal of bids. Correction or
17withdrawal of inadvertently erroneous bids before or after
18award, or cancellation of awards of contracts based on bid
19mistakes, shall be permitted in accordance with rules. After
20bid opening, no changes in bid prices or other provisions of
21bids prejudicial to the interest of the State or fair
22competition shall be permitted. All decisions to permit the
23correction or withdrawal of bids based on bid mistakes shall be
24supported by written determination made by a State purchasing
25officer.
26    (g) Award. The contract shall be awarded with reasonable

 

 

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1promptness by written notice to the lowest responsible and
2responsive bidder whose bid meets the requirements and criteria
3set forth in the invitation for bids, except when a State
4purchasing officer determines it is not in the best interest of
5the State and by written explanation determines another bidder
6shall receive the award. The explanation shall appear in the
7appropriate volume of the Illinois Procurement Bulletin. The
8written explanation must include:
9        (1) a description of the agency's needs;
10        (2) a determination that the anticipated cost will be
11    fair and reasonable;
12        (3) a listing of all responsible and responsive
13    bidders; and
14        (4) the name of the bidder selected, pricing, and the
15    reasons for selecting that bidder.
16    Each chief procurement officer may adopt guidelines to
17implement the requirements of this subsection (g).
18    The written explanation shall be filed with the Legislative
19Audit Commission and the Procurement Policy Board and be made
20available for inspection by the public within 30 days after the
21agency's decision to award the contract.
22    (h) Multi-step sealed bidding. When it is considered
23impracticable to initially prepare a purchase description to
24support an award based on price, an invitation for bids may be
25issued requesting the submission of unpriced offers to be
26followed by an invitation for bids limited to those bidders

 

 

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1whose offers have been qualified under the criteria set forth
2in the first solicitation.
3    (i) Alternative procedures. Notwithstanding any other
4provision of this Act to the contrary, the Director of the
5Illinois Power Agency may create alternative bidding
6procedures to be used in procuring professional services under
7subsections subsection (a) and (a-5) of Section 1-75, and
8subsection (d) of Section 1-78, and subsection (d) of Section
91-79 of the Illinois Power Agency Act and Section 16-111.5(c)
10of the Public Utilities Act and to procure renewable energy
11resources under Section 1-56 of the Illinois Power Agency Act.
12These alternative procedures shall be set forth together with
13the other criteria contained in the invitation for bids, and
14shall appear in the appropriate volume of the Illinois
15Procurement Bulletin.
16    (j) Reverse auction. Notwithstanding any other provision
17of this Section and in accordance with rules adopted by the
18chief procurement officer, that chief procurement officer may
19procure supplies or services through a competitive electronic
20auction bidding process after the chief procurement officer
21determines that the use of such a process will be in the best
22interest of the State. The chief procurement officer shall
23publish that determination in his or her next volume of the
24Illinois Procurement Bulletin.
25    An invitation for bids shall be issued and shall include
26(i) a procurement description, (ii) all contractual terms,

 

 

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1whenever practical, and (iii) conditions applicable to the
2procurement, including a notice that bids will be received in
3an electronic auction manner.
4    Public notice of the invitation for bids shall be given in
5the same manner as provided in subsection (c).
6    Bids shall be accepted electronically at the time and in
7the manner designated in the invitation for bids. During the
8auction, a bidder's price shall be disclosed to other bidders.
9Bidders shall have the opportunity to reduce their bid prices
10during the auction. At the conclusion of the auction, the
11record of the bid prices received and the name of each bidder
12shall be open to public inspection.
13    After the auction period has terminated, withdrawal of bids
14shall be permitted as provided in subsection (f).
15    The contract shall be awarded within 60 days after the
16auction by written notice to the lowest responsible bidder, or
17all bids shall be rejected except as otherwise provided in this
18Code. Extensions of the date for the award may be made by
19mutual written consent of the State purchasing officer and the
20lowest responsible bidder.
21    This subsection does not apply to (i) procurements of
22professional and artistic services, (ii) telecommunications
23services, communication services, and information services,
24and (iii) contracts for construction projects.
25(Source: P.A. 96-159, eff. 8-10-09; 96-795, eff. 7-1-10 (see
26Section 5 of P.A. 96-793 for the effective date of changes made

 

 

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1by P.A. 96-795); 97-96, eff. 7-13-11.)
 
2    Section 15. The Public Utilities Act is amended by changing
3Sections 16-107.5, 16-108, 16-111.5, 16-115, 16-115D, and
416-116 as follows:
 
5    (220 ILCS 5/16-107.5)
6    Sec. 16-107.5. Net electricity metering.
7    (a) The Legislature finds and declares that a program to
8provide net electricity metering, as defined in this Section,
9for eligible customers can encourage private investment in
10renewable energy resources, stimulate economic growth, enhance
11the continued diversification of Illinois' energy resource
12mix, and protect the Illinois environment.
13    (b) As used in this Section, (i) "eligible customer" means
14a retail customer that owns or operates a solar, wind, or other
15eligible renewable electrical generating facility with a rated
16capacity of not more than 2,000 kilowatts that is located on
17the customer's premises or is interconnected to the
18distribution grid of the customer's electricity provider or
19alternative retail electric supplier and is intended primarily
20to offset the customer's own electrical requirements; (ii)
21"electricity provider" means an electric utility or
22alternative retail electric supplier; (iii) "eligible
23renewable electrical generating facility" means a generator
24powered by solar electric energy, wind, dedicated crops grown

 

 

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1for electricity generation, agricultural residues, untreated
2and unadulterated wood waste, landscape trimmings, livestock
3manure, anaerobic digestion of livestock or food processing
4waste, fuel cells or microturbines powered by renewable fuels,
5or hydroelectric energy; and (iv) "net electricity metering"
6(or "net metering") means the measurement, during the billing
7period applicable to an eligible customer, of the net amount of
8electricity supplied by an electricity provider to the
9customer's premises or provided to the electricity provider by
10the customer.
11    (c) A net metering facility shall be equipped with metering
12equipment that can measure the flow of electricity in both
13directions at the same rate. For eligible residential
14customers, this shall typically be accomplished through use of
15a single, bi-directional meter. If the eligible customer's
16existing electric revenue meter does not meet this requirement,
17the electricity provider shall arrange for the local electric
18utility or a meter service provider to install and maintain a
19new revenue meter at the electricity provider's expense. For
20non-residential customers, the electricity provider may
21arrange for the local electric utility or a meter service
22provider to install and maintain metering equipment capable of
23measuring the flow of electricity both into and out of the
24customer's facility at the same rate and ratio, typically
25through the use of a dual channel meter. For generators with a
26nameplate rating of 40 kilowatts and below, the costs of

 

 

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1installing such equipment shall be paid for by the electricity
2provider. For generators with a nameplate rating over 40
3kilowatts and up to 2,000 kilowatts capacity, the costs of
4installing such equipment shall be paid for by the customer.
5Any subsequent revenue meter change necessitated by any
6eligible customer shall be paid for by the customer.
7    (d) An electricity provider shall measure and charge or
8credit for the net electricity supplied to eligible customers
9or provided by eligible customers in the following manner:
10        (1) If the amount of electricity used by the customer
11    during the billing period exceeds the amount of electricity
12    produced by the customer, the electricity provider shall
13    charge the customer for the net electricity supplied to and
14    used by the customer as provided in subsection (e) of this
15    Section.
16        (2) If the amount of electricity produced by a customer
17    during the billing period exceeds the amount of electricity
18    used by the customer during that billing period, the
19    electricity provider supplying that customer shall apply a
20    1:1 kilowatt-hour credit to a subsequent bill for service
21    to the customer for the net electricity supplied to the
22    electricity provider. The electricity provider shall
23    continue to carry over any excess kilowatt-hour credits
24    earned and apply those credits to subsequent billing
25    periods to offset any customer-generator consumption in
26    those billing periods until all credits are used or until

 

 

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1    service is terminated or until the end of the annualized
2    period.
3        (3) In At the end of the year or annualized over the
4    period that service is supplied by means of net metering,
5    or in the event that the retail customer terminates service
6    with the electricity provider prior to the end of the year
7    or the annualized period, any remaining credits in the
8    customer's account shall expire.
9    (e) An electricity provider shall provide to net metering
10customers electric service at non-discriminatory rates that
11are identical, with respect to rate structure, retail rate
12components, and any monthly charges, to the rates that the
13customer would be charged if not a net metering customer. An
14electricity provider shall not charge net metering customers
15any fee or charge or require additional equipment, insurance,
16or any other requirements not specifically authorized by
17interconnection standards authorized by the Commission, unless
18the fee, charge, or other requirement would apply to other
19similarly situated customers who are not net metering
20customers. The customer will remain responsible for all taxes,
21fees, and utility delivery charges that would otherwise be
22applicable to the net amount of electricity used by the
23customer. Subsections (c) through (e) of this Section shall not
24be construed to prevent an arms-length agreement between an
25electricity provider and an eligible customer that sets forth
26different prices, terms, and conditions for the provision of

 

 

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1net metering service, including, but not limited to, the
2provision of the appropriate metering equipment for
3non-residential customers.
4    (f) Notwithstanding the requirements of subsections (c)
5through (e) of this Section, an electricity provider must
6require dual-channel metering for non-residential customers
7operating eligible renewable electrical generating facilities
8with a nameplate rating over 40 kilowatts and up to 2,000
9kilowatts. In such cases, electricity charges and credits shall
10be determined as follows:
11        (1) The electricity provider shall assess and the
12    customer remains responsible for all taxes, fees, and
13    utility delivery charges that would otherwise be
14    applicable to the gross amount of kilowatt-hours supplied
15    to the eligible customer by the electricity provider.
16        (2) Each month that service is supplied by means of
17    dual-channel metering, the electricity provider shall
18    compensate the eligible customer for any excess
19    kilowatt-hour credits at the electricity provider's
20    avoided cost of electricity supply over the monthly period
21    or as otherwise specified by the terms of a power-purchase
22    agreement negotiated between the customer and electricity
23    provider.
24        (3) For all eligible net metering customers taking
25    service from an electricity provider under contracts or
26    tariffs employing time of use rates, any monthly

 

 

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1    consumption of electricity shall be calculated according
2    to the terms of the contract or tariff to which the same
3    customer would be assigned to or be eligible for if the
4    customer was not a net metering customer. When those same
5    customer-generators are net generators during any discrete
6    time of use period, the net kilowatt-hours produced shall
7    be valued at the same price per kilowatt-hour as the
8    electric service provider would charge for retail
9    kilowatt-hour sales during that same time of use period.
10    (g) For purposes of federal and State laws providing
11renewable energy credits or greenhouse gas credits, the
12eligible customer shall be treated as owning and having title
13to the renewable energy attributes, renewable energy credits,
14and greenhouse gas emission credits related to any electricity
15produced by the qualified generating unit. The electricity
16provider may not condition participation in a net metering
17program on the signing over of a customer's renewable energy
18credits; provided, however, this subsection (g) shall not be
19construed to prevent an arms-length agreement between an
20electricity provider and an eligible customer that sets forth
21the ownership or title of the credits.
22    (h) Within 120 days after the effective date of this
23amendatory Act of the 95th General Assembly, the Commission
24shall establish standards for net metering and, if the
25Commission has not already acted on its own initiative,
26standards for the interconnection of eligible renewable

 

 

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1generating equipment to the utility system. The
2interconnection standards shall address any procedural
3barriers, delays, and administrative costs associated with the
4interconnection of customer-generation while ensuring the
5safety and reliability of the units and the electric utility
6system. The Commission shall consider the Institute of
7Electrical and Electronics Engineers (IEEE) Standard 1547 and
8the issues of (i) reasonable and fair fees and costs, (ii)
9clear timelines for major milestones in the interconnection
10process, (iii) nondiscriminatory terms of agreement, and (iv)
11any best practices for interconnection of distributed
12generation.
13    (i) All electricity providers shall begin to offer net
14metering no later than April 1, 2008.
15    (j) An electricity provider shall provide net metering to
16eligible customers until the load of its net metering customers
17equals 5% 1% of the total peak demand supplied by that
18electricity provider during the previous year. Electricity
19providers are authorized to offer net metering beyond the 5% 1%
20level if they so choose. The number of new eligible customers
21with generators that have a nameplate rating of 40 kilowatts
22and below will be limited to 200 total new billing accounts for
23the utilities (Ameren Companies, ComEd, and MidAmerican) for
24the period of April 1, 2008 through March 31, 2009.
25    (k) Each electricity provider shall maintain records and
26report annually to the Commission the total number of net

 

 

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1metering customers served by the provider, as well as the type,
2capacity, and energy sources of the generating systems used by
3the net metering customers. Nothing in this Section shall limit
4the ability of an electricity provider to request the redaction
5of information deemed by the Commission to be confidential
6business information. Each electricity provider shall notify
7the Commission when the total generating capacity of its net
8metering customers is equal to or in excess of the 1% cap
9specified in subsection (j) of this Section.
10    (l) Notwithstanding the definition of "eligible customer"
11in item (i) of subsection (b) of this Section, each electricity
12provider shall consider whether to allow meter aggregation for
13the purposes of net metering on:
14        (1) properties owned or leased by multiple customers
15    that contribute to the operation of an eligible renewable
16    electrical generating facility, such as a community-owned
17    wind project, a community-owned biomass project, a
18    community-owned solar project, or a community methane
19    digester processing livestock waste from multiple sources;
20    and
21        (2) individual units, apartments, or properties owned
22    or leased by multiple customers and collectively served by
23    a common eligible renewable electrical generating
24    facility, such as an apartment building served by
25    photovoltaic panels on the roof; and .
26        (3) multiple meters that are located on an eligible

 

 

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1    customer's contiguous property and are used to measure only
2    electricity used for the eligible customer's requirements.
3    For the purposes of this subsection (l), "meter
4aggregation" means the combination of reading and billing on a
5pro rata basis for the types of eligible customers described in
6this Section such as to allocate benefits of participation onto
7the customers' monthly electric bills. Meter aggregation shall
8be allowed whether the eligible renewable energy generating
9device is located on the premises of the eligible customer or
10is interconnected to the distribution grid of the eligible
11customer's electricity provider or alternative retail electric
12supplier. Such meter aggregation shall be subject to the terms
13and conditions approved by the Commission in a proceeding
14establishing the rules applicable to meter aggregation under
15this subsection (l), which shall commence no less than 180 days
16after the effective date of this amendatory Act of the 97th
17General Assembly and be completed within 365 days after the
18effective date of this amendatory Act of the 97th General
19Assembly.
20    (m) Nothing in this Section shall affect the right of an
21electricity provider to continue to provide, or the right of a
22retail customer to continue to receive service pursuant to a
23contract for electric service between the electricity provider
24and the retail customer in accordance with the prices, terms,
25and conditions provided for in that contract. Either the
26electricity provider or the customer may require compliance

 

 

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1with the prices, terms, and conditions of the contract.
2(Source: P.A. 95-420, eff. 8-24-07.)
 
3    (220 ILCS 5/16-108)
4    Sec. 16-108. Recovery of costs associated with the
5provision of delivery services.
6    (a) An electric utility shall file a delivery services
7tariff with the Commission at least 210 days prior to the date
8that it is required to begin offering such services pursuant to
9this Act. An electric utility shall provide the components of
10delivery services that are subject to the jurisdiction of the
11Federal Energy Regulatory Commission at the same prices, terms
12and conditions set forth in its applicable tariff as approved
13or allowed into effect by that Commission. The Commission shall
14otherwise have the authority pursuant to Article IX to review,
15approve, and modify the prices, terms and conditions of those
16components of delivery services not subject to the jurisdiction
17of the Federal Energy Regulatory Commission, including the
18authority to determine the extent to which such delivery
19services should be offered on an unbundled basis. In making any
20such determination the Commission shall consider, at a minimum,
21the effect of additional unbundling on (i) the objective of
22just and reasonable rates, (ii) electric utility employees, and
23(iii) the development of competitive markets for electric
24energy services in Illinois.
25    (b) The Commission shall enter an order approving, or

 

 

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1approving as modified, the delivery services tariff no later
2than 30 days prior to the date on which the electric utility
3must commence offering such services. The Commission may
4subsequently modify such tariff pursuant to this Act.
5    (c) The electric utility's tariffs shall define the classes
6of its customers for purposes of delivery services charges.
7Delivery services shall be priced and made available to all
8retail customers electing delivery services in each such class
9on a nondiscriminatory basis regardless of whether the retail
10customer chooses the electric utility, an affiliate of the
11electric utility, or another entity as its supplier of electric
12power and energy. Charges for delivery services shall be cost
13based, and shall allow the electric utility to recover the
14costs of providing delivery services through its charges to its
15delivery service customers that use the facilities and services
16associated with such costs. Such costs shall include the costs
17of owning, operating and maintaining transmission and
18distribution facilities. Beginning June 1, 2012, charges for
19delivery services shall also include the recovery of the
20electric utility's costs of renewable energy credits and
21excluded renewable energy resources contract costs in
22accordance with subsection (k) of this Section. The Commission
23shall also be authorized to consider whether, and if so to what
24extent, the following costs are appropriately included in the
25electric utility's delivery services rates: (i) the costs of
26that portion of generation facilities used for the production

 

 

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1and absorption of reactive power in order that retail customers
2located in the electric utility's service area can receive
3electric power and energy from suppliers other than the
4electric utility, and (ii) the costs associated with the use
5and redispatch of generation facilities to mitigate
6constraints on the transmission or distribution system in order
7that retail customers located in the electric utility's service
8area can receive electric power and energy from suppliers other
9than the electric utility. Nothing in this subsection shall be
10construed as directing the Commission to allocate any of the
11costs described in (i) or (ii) that are found to be
12appropriately included in the electric utility's delivery
13services rates to any particular customer group or geographic
14area in setting delivery services rates.
15    (d) The Commission shall establish charges, terms and
16conditions for delivery services that are just and reasonable
17and shall take into account customer impacts when establishing
18such charges. In establishing charges, terms and conditions for
19delivery services, the Commission shall take into account
20voltage level differences. A retail customer shall have the
21option to request to purchase electric service at any delivery
22service voltage reasonably and technically feasible from the
23electric facilities serving that customer's premises provided
24that there are no significant adverse impacts upon system
25reliability or system efficiency. A retail customer shall also
26have the option to request to purchase electric service at any

 

 

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1point of delivery that is reasonably and technically feasible
2provided that there are no significant adverse impacts on
3system reliability or efficiency. Such requests shall not be
4unreasonably denied.
5    (e) Electric utilities shall recover the costs of
6installing, operating or maintaining facilities for the
7particular benefit of one or more delivery services customers,
8including without limitation any costs incurred in complying
9with a customer's request to be served at a different voltage
10level, directly from the retail customer or customers for whose
11benefit the costs were incurred, to the extent such costs are
12not recovered through the charges referred to in subsections
13(c) and (d) of this Section.
14    (f) An electric utility shall be entitled but not required
15to implement transition charges in conjunction with the
16offering of delivery services pursuant to Section 16-104. If an
17electric utility implements transition charges, it shall
18implement such charges for all delivery services customers and
19for all customers described in subsection (h), but shall not
20implement transition charges for power and energy that a retail
21customer takes from cogeneration or self-generation facilities
22located on that retail customer's premises, if such facilities
23meet the following criteria:
24        (i) the cogeneration or self-generation facilities
25    serve a single retail customer and are located on that
26    retail customer's premises (for purposes of this

 

 

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1    subparagraph and subparagraph (ii), an industrial or
2    manufacturing retail customer and a third party contractor
3    that is served by such industrial or manufacturing customer
4    through such retail customer's own electrical distribution
5    facilities under the circumstances described in subsection
6    (vi) of the definition of "alternative retail electric
7    supplier" set forth in Section 16-102, shall be considered
8    a single retail customer);
9        (ii) the cogeneration or self-generation facilities
10    either (A) are sized pursuant to generally accepted
11    engineering standards for the retail customer's electrical
12    load at that premises (taking into account standby or other
13    reliability considerations related to that retail
14    customer's operations at that site) or (B) if the facility
15    is a cogeneration facility located on the retail customer's
16    premises, the retail customer is the thermal host for that
17    facility and the facility has been designed to meet that
18    retail customer's thermal energy requirements resulting in
19    electrical output beyond that retail customer's electrical
20    demand at that premises, comply with the operating and
21    efficiency standards applicable to "qualifying facilities"
22    specified in title 18 Code of Federal Regulations Section
23    292.205 as in effect on the effective date of this
24    amendatory Act of 1999;
25        (iii) the retail customer on whose premises the
26    facilities are located either has an exclusive right to

 

 

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1    receive, and corresponding obligation to pay for, all of
2    the electrical capacity of the facility, or in the case of
3    a cogeneration facility that has been designed to meet the
4    retail customer's thermal energy requirements at that
5    premises, an identified amount of the electrical capacity
6    of the facility, over a minimum 5-year period; and
7        (iv) if the cogeneration facility is sized for the
8    retail customer's thermal load at that premises but exceeds
9    the electrical load, any sales of excess power or energy
10    are made only at wholesale, are subject to the jurisdiction
11    of the Federal Energy Regulatory Commission, and are not
12    for the purpose of circumventing the provisions of this
13    subsection (f).
14If a generation facility located at a retail customer's
15premises does not meet the above criteria, an electric utility
16implementing transition charges shall implement a transition
17charge until December 31, 2006 for any power and energy taken
18by such retail customer from such facility as if such power and
19energy had been delivered by the electric utility. Provided,
20however, that an industrial retail customer that is taking
21power from a generation facility that does not meet the above
22criteria but that is located on such customer's premises will
23not be subject to a transition charge for the power and energy
24taken by such retail customer from such generation facility if
25the facility does not serve any other retail customer and
26either was installed on behalf of the customer and for its own

 

 

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1use prior to January 1, 1997, or is both predominantly fueled
2by byproducts of such customer's manufacturing process at such
3premises and sells or offers an average of 300 megawatts or
4more of electricity produced from such generation facility into
5the wholesale market. Such charges shall be calculated as
6provided in Section 16-102, and shall be collected on each
7kilowatt-hour delivered under a delivery services tariff to a
8retail customer from the date the customer first takes delivery
9services until December 31, 2006 except as provided in
10subsection (h) of this Section. Provided, however, that an
11electric utility, other than an electric utility providing
12service to at least 1,000,000 customers in this State on
13January 1, 1999, shall be entitled to petition for entry of an
14order by the Commission authorizing the electric utility to
15implement transition charges for an additional period ending no
16later than December 31, 2008. The electric utility shall file
17its petition with supporting evidence no earlier than 16
18months, and no later than 12 months, prior to December 31,
192006. The Commission shall hold a hearing on the electric
20utility's petition and shall enter its order no later than 8
21months after the petition is filed. The Commission shall
22determine whether and to what extent the electric utility shall
23be authorized to implement transition charges for an additional
24period. The Commission may authorize the electric utility to
25implement transition charges for some or all of the additional
26period, and shall determine the mitigation factors to be used

 

 

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1in implementing such transition charges; provided, that the
2Commission shall not authorize mitigation factors less than
3110% of those in effect during the 12 months ended December 31,
42006. In making its determination, the Commission shall
5consider the following factors: the necessity to implement
6transition charges for an additional period in order to
7maintain the financial integrity of the electric utility; the
8prudence of the electric utility's actions in reducing its
9costs since the effective date of this amendatory Act of 1997;
10the ability of the electric utility to provide safe, adequate
11and reliable service to retail customers in its service area;
12and the impact on competition of allowing the electric utility
13to implement transition charges for the additional period.
14    (g) The electric utility shall file tariffs that establish
15the transition charges to be paid by each class of customers to
16the electric utility in conjunction with the provision of
17delivery services. The electric utility's tariffs shall define
18the classes of its customers for purposes of calculating
19transition charges. The electric utility's tariffs shall
20provide for the calculation of transition charges on a
21customer-specific basis for any retail customer whose average
22monthly maximum electrical demand on the electric utility's
23system during the 6 months with the customer's highest monthly
24maximum electrical demands equals or exceeds 3.0 megawatts for
25electric utilities having more than 1,000,000 customers, and
26for other electric utilities for any customer that has an

 

 

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1average monthly maximum electrical demand on the electric
2utility's system of one megawatt or more, and (A) for which
3there exists data on the customer's usage during the 3 years
4preceding the date that the customer became eligible to take
5delivery services, or (B) for which there does not exist data
6on the customer's usage during the 3 years preceding the date
7that the customer became eligible to take delivery services, if
8in the electric utility's reasonable judgment there exists
9comparable usage information or a sufficient basis to develop
10such information, and further provided that the electric
11utility can require customers for which an individual
12calculation is made to sign contracts that set forth the
13transition charges to be paid by the customer to the electric
14utility pursuant to the tariff.
15    (h) An electric utility shall also be entitled to file
16tariffs that allow it to collect transition charges from retail
17customers in the electric utility's service area that do not
18take delivery services but that take electric power or energy
19from an alternative retail electric supplier or from an
20electric utility other than the electric utility in whose
21service area the customer is located. Such charges shall be
22calculated, in accordance with the definition of transition
23charges in Section 16-102, for the period of time that the
24customer would be obligated to pay transition charges if it
25were taking delivery services, except that no deduction for
26delivery services revenues shall be made in such calculation,

 

 

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1and usage data from the customer's class shall be used where
2historical usage data is not available for the individual
3customer. The customer shall be obligated to pay such charges
4on a lump sum basis on or before the date on which the customer
5commences to take service from the alternative retail electric
6supplier or other electric utility, provided, that the electric
7utility in whose service area the customer is located shall
8offer the customer the option of signing a contract pursuant to
9which the customer pays such charges ratably over the period in
10which the charges would otherwise have applied.
11    (i) An electric utility shall be entitled to add to the
12bills of delivery services customers charges pursuant to
13Sections 9-221, 9-222 (except as provided in Section 9-222.1),
14and Section 16-114 of this Act, Section 5-5 of the Electricity
15Infrastructure Maintenance Fee Law, Section 6-5 of the
16Renewable Energy, Energy Efficiency, and Coal Resources
17Development Law of 1997, and Section 13 of the Energy
18Assistance Act.
19    (j) If a retail customer that obtains electric power and
20energy from cogeneration or self-generation facilities
21installed for its own use on or before January 1, 1997,
22subsequently takes service from an alternative retail electric
23supplier or an electric utility other than the electric utility
24in whose service area the customer is located for any portion
25of the customer's electric power and energy requirements
26formerly obtained from those facilities (including that amount

 

 

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1purchased from the utility in lieu of such generation and not
2as standby power purchases, under a cogeneration displacement
3tariff in effect as of the effective date of this amendatory
4Act of 1997), the transition charges otherwise applicable
5pursuant to subsections (f), (g), or (h) of this Section shall
6not be applicable in any year to that portion of the customer's
7electric power and energy requirements formerly obtained from
8those facilities, provided, that for purposes of this
9subsection (j), such portion shall not exceed the average
10number of kilowatt-hours per year obtained from the
11cogeneration or self-generation facilities during the 3 years
12prior to the date on which the customer became eligible for
13delivery services, except as provided in subsection (f) of
14Section 16-110.
15    (k) Beginning June 1, 2012, the electric utility shall be
16entitled to recover through its tariffed charges for delivery
17services (1) the costs of any renewable energy credits
18purchased to meet the renewable energy resource standards of
19subsection (c) of Section 1-75 of the Illinois Power Agency
20Act, pursuant to the electric utility's procurement plan as
21approved in accordance with Section 16-111.5 of this Act, and
22(2) any excluded renewable energy resources contract costs as
23defined in Section 1-10 of the Illinois Power Agency Act. The
24Commission shall determine a just and reasonable allocation of
25such costs to the various classes of customers taking delivery
26services from the electric utility, taking into account the

 

 

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1provisions of paragraphs (2) and (6) of subsection (c) of
2Section 1-75 of the Illinois Power Agency Act and, with respect
3to excluded renewable energy resources contract costs, the
4extent to which the electric utility's eligible retail
5customers have become delivery services non-eligible retail
6customers subsequent to the year that the contracts giving rise
7to the excluded renewable energy resources costs were entered
8into. Provided, that in no event shall the Commission allocate
9the costs of renewable energy credits and excluded renewable
10energy resources contract costs in a manner that causes the
11rate limitations specified in paragraph (2) of subsection (c)
12of Section 1-75 of the Illinois Power Agency Act to be exceeded
13for any class of customers.
14    For purposes of recovery through the electric utility's
15tariffed charges for delivery services, the cost of the
16renewable energy credits included in purchases of bundled
17renewable energy resources, as defined in Section 1-10 of the
18Illinois Power Agency Act, to meet the renewable energy
19resource standards applicable to the load of the electric
20utility's eligible retail customers, as defined in subsection
21(a) of Section 16-111.5 of this Act, shall be the allocated
22renewable energy credit prices approved by the Commission in
23accordance with subsection (f) of Section 16-111.5 of this Act.
24    The electric utility shall be entitled to recover the cost
25of such renewable energy credits and excluded renewable energy
26resources contract costs through an automatic adjustment

 

 

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1charge provision in the electric utility's delivery services
2tariffs that allows the electric utility to adjust its tariffed
3charges on a quarterly basis for changes in its costs incurred
4to purchase renewable energy credits and its excluded renewable
5energy resources contract costs, if any, without the need to
6file a general delivery services rate case. The electric
7utility's collections pursuant to such an automatic adjustment
8charge tariff shall be subject to annual review,
9reconciliation, and true-up against actual costs by the
10Commission pursuant to a procedure that shall be specified in
11the electric utility's tariff and approved by the Commission in
12connection with its approval of the tariff. The procedure shall
13provide that any difference between the electric utility's
14collections pursuant to the automatic adjustment charge for an
15annual period and the electric utility's actual costs of
16renewable energy credits and actual excluded renewable energy
17resources contract costs for the annual period shall be
18refunded to or collected from, as applicable, the electric
19utility's delivery services customers in subsequent periods.
20(Source: P.A. 91-50, eff. 6-30-99; 92-690, eff. 7-18-02.)
 
21    (220 ILCS 5/16-111.5)
22    Sec. 16-111.5. Provisions relating to procurement.
23    (a) An electric utility that on December 31, 2005 served at
24least 100,000 customers in Illinois shall procure power, energy
25efficiency products, and energy for its eligible retail

 

 

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1customers in accordance with the applicable provisions set
2forth in Section 1-75 of the Illinois Power Agency Act and this
3Section and, for years beginning on and after June 1, 2012,
4shall procure renewable energy credits with respect to the
5kilowatthour usage of delivery services non-eligible retail
6customers in the electric utility's service area in accordance
7with the applicable provisions set forth in Section 1-75 of the
8Illinois Power Agency Act and this Section. A small
9multi-jurisdictional electric utility that on December 31,
102005 served less than 100,000 customers in Illinois may elect
11to procure power and energy for all or a portion of its
12eligible Illinois retail customers in accordance with the
13applicable provisions set forth in this Section and Section
141-75 of the Illinois Power Agency Act. This Section shall not
15apply to a small multi-jurisdictional utility until such time
16as a small multi-jurisdictional utility requests the Illinois
17Power Agency to prepare a procurement plan for its eligible
18retail customers. "Eligible retail customers" for the purposes
19of this Section means those retail customers that purchase
20power and energy from the electric utility under fixed-price
21bundled service tariffs, other than those retail customers
22whose service is declared or deemed competitive under Section
2316-113 and those other customer groups specified in this
24Section, including self-generating customers, customers
25electing hourly pricing, or those customers who are otherwise
26ineligible for fixed-price bundled tariff service. "Delivery

 

 

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1services non-eligible retail customers" for the purposes of
2this Section has the meaning set forth in Section 1-10 of the
3Illinois Power Agency Act. Those customers that are excluded
4from the definition of "eligible retail customers" shall not be
5included in the procurement plan electric supply service load
6requirements, and the utility shall procure any supply
7requirements, including capacity, ancillary services, energy
8efficiency products, and hourly priced energy, in the
9applicable markets as needed to serve those customers, provided
10that the utility may include in its procurement plan load
11requirements for the load that is associated with those retail
12customers whose service has been declared or deemed competitive
13pursuant to Section 16-113 of this Act to the extent that those
14customers are purchasing power and energy during one of the
15transition periods identified in subsection (b) of Section
1616-113 of this Act.
17    (b) A procurement plan shall be prepared for each electric
18utility consistent with the applicable requirements of the
19Illinois Power Agency Act and this Section. For purposes of
20this Section, Illinois electric utilities that are affiliated
21by virtue of a common parent company are considered to be a
22single electric utility. Small multi-jurisdictional utilities
23may request a procurement plan for a portion of or all of its
24Illinois load. Each procurement plan shall analyze the
25projected balance of supply and demand for eligible retail
26customers over a 5-year period with the first planning year

 

 

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1beginning on June 1 of the year following the year in which the
2plan is filed. The plan shall specifically identify the
3wholesale products to be procured following plan approval, and
4shall follow all the requirements set forth in the Public
5Utilities Act and all applicable State and federal laws,
6statutes, rules, or regulations, as well as Commission orders.
7Nothing in this Section precludes consideration of contracts
8longer than 5 years and related forecast data. Unless specified
9otherwise in this Section, in the procurement plan or in the
10implementing tariff, any procurement occurring in accordance
11with this plan shall be competitively bid through a request for
12proposals process. Approval and implementation of the
13procurement plan shall be subject to review and approval by the
14Commission according to the provisions set forth in this
15Section. A procurement plan shall include each of the following
16components:
17        (1) Hourly load analysis. This analysis shall include:
18            (i) multi-year historical analysis of hourly
19        loads;
20            (ii) switching trends and competitive retail
21        market analysis;
22            (iii) known or projected changes to future loads;
23        and
24            (iv) growth forecasts by customer class.
25        (2) Analysis of the impact of any demand side and
26    renewable energy initiatives. This analysis shall include:

 

 

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1            (i) the impact of demand response programs and
2        energy efficiency programs, both current and
3        projected; for small multi-jurisdictional utilities,
4        the impact of demand response and energy efficiency
5        programs approved pursuant to Section 8-408 of this
6        Act, both current and projected; and
7            (ii) supply side needs that are projected to be
8        offset by purchases of renewable energy resources, if
9        any.
10        (3) A plan for meeting the expected load requirements
11    that will not be met through preexisting contracts. This
12    plan shall include:
13            (i) definitions of the different Illinois retail
14        customer classes for which supply is being purchased;
15            (ii) the proposed mix of demand-response products
16        for which contracts will be executed during the next
17        year. For small multi-jurisdictional electric
18        utilities that on December 31, 2005 served fewer than
19        100,000 customers in Illinois, these shall be defined
20        as demand-response products offered in an energy
21        efficiency plan approved pursuant to Section 8-408 of
22        this Act. The cost-effective demand-response measures
23        shall be procured whenever the cost is lower than
24        procuring comparable capacity products, provided that
25        such products shall:
26                (A) be procured by a demand-response provider

 

 

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1            from eligible retail customers;
2                (B) at least satisfy the demand-response
3            requirements of the regional transmission
4            organization market in which the utility's service
5            territory is located, including, but not limited
6            to, any applicable capacity or dispatch
7            requirements;
8                (C) provide for customers' participation in
9            the stream of benefits produced by the
10            demand-response products;
11                (D) provide for reimbursement by the
12            demand-response provider of the utility for any
13            costs incurred as a result of the failure of the
14            supplier of such products to perform its
15            obligations thereunder; and
16                (E) meet the same credit requirements as apply
17            to suppliers of capacity, in the applicable
18            regional transmission organization market;
19            (iii) the proposed energy efficiency products for
20        which contracts will be executed during the next year.
21        The cost-effective energy efficiency measures shall be
22        procured whenever the cost is lower than the combined
23        avoided costs of energy, capacity, transmission, and
24        the renewable portfolio standard for a comparable
25        volume of energy provided that the energy efficiency
26        products shall:

 

 

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1                (A) be procured by an energy efficiency
2            provider from eligible retail customers;
3                (B) at least satisfy evaluation, measurement,
4            and verification standards established pursuant to
5            Section 8-103 of this Act;
6                (C) provide for reimbursement by the energy
7            efficiency provider of the utility for any costs
8            incurred as a result of the failure of the supplier
9            of such products to perform its obligations
10            thereunder; and
11                (D) meet the same credit requirements as apply
12            to suppliers of capacity, in the applicable
13            regional transmission organization market;
14            (iv) (iii) monthly forecasted system supply
15        requirements, including expected minimum, maximum, and
16        average values for the planning period;
17            (v) (iv) the proposed mix and selection of standard
18        wholesale products for which contracts will be
19        executed during the next year, separately or in
20        combination, to meet that portion of its load
21        requirements not met through pre-existing contracts,
22        including but not limited to monthly 5 x 16 peak period
23        block energy, monthly off-peak wrap energy, monthly 7 x
24        24 energy, annual 5 x 16 energy, annual off-peak wrap
25        energy, annual 7 x 24 energy, monthly capacity, annual
26        capacity, peak load capacity obligations, capacity

 

 

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1        purchase plan, and ancillary services;
2            (vi) (v) proposed term structures for each
3        wholesale product type included in the proposed
4        procurement plan portfolio of products; and
5            (vii) (vi) an assessment of the price risk, load
6        uncertainty, and other factors that are associated
7        with the proposed procurement plan; this assessment,
8        to the extent possible, shall include an analysis of
9        the following factors: contract terms, time frames for
10        securing products or services, fuel costs, weather
11        patterns, transmission costs, market conditions, and
12        the governmental regulatory environment; the proposed
13        procurement plan shall also identify alternatives for
14        those portfolio measures that are identified as having
15        significant price risk.
16        (4) Proposed procedures for balancing loads. The
17    procurement plan shall include, for load requirements
18    included in the procurement plan, the process for (i)
19    hourly balancing of supply and demand and (ii) the criteria
20    for portfolio re-balancing in the event of significant
21    shifts in load.
22    (c) The procurement process set forth in Section 1-75 of
23the Illinois Power Agency Act and subsection (e) of this
24Section shall be administered by a procurement administrator
25and monitored by a procurement monitor.
26        (1) The procurement administrator shall:

 

 

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1            (i) design the final procurement process in
2        accordance with Section 1-75 of the Illinois Power
3        Agency Act and subsection (e) of this Section following
4        Commission approval of the procurement plan;
5            (ii) develop benchmarks in accordance with
6        subsection (e)(3) to be used to evaluate bids; these
7        benchmarks shall be submitted to the Commission for
8        review and approval on a confidential basis prior to
9        the procurement event;
10            (iii) serve as the interface between the electric
11        utility and suppliers;
12            (iv) manage the bidder pre-qualification and
13        registration process;
14            (v) obtain the electric utilities' agreement to
15        the final form of all supply contracts and credit
16        collateral agreements;
17            (vi) administer the request for proposals process;
18            (vii) have the discretion to negotiate to
19        determine whether bidders are willing to lower the
20        price of bids that meet the benchmarks approved by the
21        Commission; any post-bid negotiations with bidders
22        shall be limited to price only and shall be completed
23        within 24 hours after opening the sealed bids and shall
24        be conducted in a fair and unbiased manner; in
25        conducting the negotiations, there shall be no
26        disclosure of any information derived from proposals

 

 

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1        submitted by competing bidders; if information is
2        disclosed to any bidder, it shall be provided to all
3        competing bidders;
4            (viii) maintain confidentiality of supplier and
5        bidding information in a manner consistent with all
6        applicable laws, rules, regulations, and tariffs;
7            (ix) submit a confidential report to the
8        Commission recommending acceptance or rejection of
9        bids;
10            (x) notify the utility of contract counterparties
11        and contract specifics; and
12            (xi) administer related contingency procurement
13        events.
14        (2) The procurement monitor, who shall be retained by
15    the Commission, shall:
16            (i) monitor interactions among the procurement
17        administrator, suppliers, and utility;
18            (ii) monitor and report to the Commission on the
19        progress of the procurement process;
20            (iii) provide an independent confidential report
21        to the Commission regarding the results of the
22        procurement event;
23            (iv) assess compliance with the procurement plans
24        approved by the Commission for each utility that on
25        December 31, 2005 provided electric service to a least
26        100,000 customers in Illinois and for each small

 

 

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1        multi-jurisdictional utility that on December 31, 2005
2        served less than 100,000 customers in Illinois;
3            (v) preserve the confidentiality of supplier and
4        bidding information in a manner consistent with all
5        applicable laws, rules, regulations, and tariffs;
6            (vi) provide expert advice to the Commission and
7        consult with the procurement administrator regarding
8        issues related to procurement process design, rules,
9        protocols, and policy-related matters; and
10            (vii) consult with the procurement administrator
11        regarding the development and use of benchmark
12        criteria, standard form contracts, credit policies,
13        and bid documents.
14    (d) Except as provided in subsection (j), the planning
15process shall be conducted as follows:
16        (1) Beginning in 2008, each Illinois utility procuring
17    power pursuant to this Section shall annually provide a
18    range of load forecasts to the Illinois Power Agency by
19    July 15 of each year, or such other date as may be required
20    by the Commission or Agency. The load forecasts shall cover
21    the 5-year procurement planning period for the next
22    procurement plan and shall include hourly data
23    representing a high-load, low-load and expected-load
24    scenario for the load of the eligible retail customers. For
25    procurement planning periods beginning on and after June 1,
26    2012, the electric utility shall provide a range of annual

 

 

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1    forecasts for the 5-year procurement planning period of the
2    total kilowatthour usage of eligible retail customers and
3    the total annual kilowatthour usage of delivery services
4    non-eligible retail customers in its service area. The
5    utility shall provide supporting data and assumptions for
6    each of the scenarios.
7        (2) Beginning in 2008, the Illinois Power Agency shall
8    prepare a procurement plan by August 15th of each year, or
9    such other date as may be required by the Commission. The
10    procurement plan shall identify the portfolio of
11    demand-response, energy efficiency products, and power and
12    energy products to be procured. Cost-effective
13    demand-response measures and cost-effective energy
14    measures shall be procured as set forth in items item (iii)
15    and (iv) of subsection (b) of this Section. Copies of the
16    procurement plan shall be posted and made publicly
17    available on the Agency's and Commission's websites, and
18    copies shall also be provided to each affected electric
19    utility. An affected utility shall have 30 days following
20    the date of posting to provide comment to the Agency on the
21    procurement plan. Other interested entities also may
22    comment on the procurement plan. All comments submitted to
23    the Agency shall be specific, supported by data or other
24    detailed analyses, and, if objecting to all or a portion of
25    the procurement plan, accompanied by specific alternative
26    wording or proposals. All comments shall be posted on the

 

 

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1    Agency's and Commission's websites. During this 30-day
2    comment period, the Agency shall hold at least one public
3    hearing within each utility's service area for the purpose
4    of receiving public comment on the procurement plan. Within
5    14 days following the end of the 30-day review period, the
6    Agency shall revise the procurement plan as necessary based
7    on the comments received and file the procurement plan with
8    the Commission and post the procurement plan on the
9    websites.
10        (3) Within 5 days after the filing of the procurement
11    plan, any person objecting to the procurement plan shall
12    file an objection with the Commission. Within 10 days after
13    the filing, the Commission shall determine whether a
14    hearing is necessary. The Commission shall enter its order
15    confirming or modifying the procurement plan within 90 days
16    after the filing of the procurement plan by the Illinois
17    Power Agency.
18        (4) The Commission shall approve the procurement plan,
19    including expressly the forecast used in the procurement
20    plan, if the Commission determines that it will ensure
21    adequate, reliable, affordable, efficient, and
22    environmentally sustainable electric service at the lowest
23    total cost over time, taking into account any benefits of
24    price stability.
25    (e) The procurement process shall include each of the
26following components:

 

 

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1        (1) Solicitation, pre-qualification, and registration
2    of bidders. The procurement administrator shall
3    disseminate information to potential bidders to promote a
4    procurement event, notify potential bidders that the
5    procurement administrator may enter into a post-bid price
6    negotiation with bidders that meet the applicable
7    benchmarks, provide supply requirements, and otherwise
8    explain the competitive procurement process. In addition
9    to such other publication as the procurement administrator
10    determines is appropriate, this information shall be
11    posted on the Illinois Power Agency's and the Commission's
12    websites. The procurement administrator shall also
13    administer the prequalification process, including
14    evaluation of credit worthiness, compliance with
15    procurement rules, and agreement to the standard form
16    contract developed pursuant to paragraph (2) of this
17    subsection (e). The procurement administrator shall then
18    identify and register bidders to participate in the
19    procurement event.
20        (2) Standard contract forms and credit terms and
21    instruments. The procurement administrator, in
22    consultation with the utilities, the Commission, and other
23    interested parties and subject to Commission oversight,
24    shall develop and provide standard contract forms for the
25    supplier contracts that meet generally accepted industry
26    practices. Standard credit terms and instruments that meet

 

 

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1    generally accepted industry practices shall be similarly
2    developed. The procurement administrator shall make
3    available to the Commission all written comments it
4    receives on the contract forms, credit terms, or
5    instruments. If the procurement administrator cannot reach
6    agreement with the applicable electric utility as to the
7    contract terms and conditions, the procurement
8    administrator must notify the Commission of any disputed
9    terms and the Commission shall resolve the dispute. The
10    terms of the contracts shall not be subject to negotiation
11    by winning bidders, and the bidders must agree to the terms
12    of the contract in advance so that winning bids are
13    selected solely on the basis of price.
14        (3) Establishment of a market-based price benchmark.
15    As part of the development of the procurement process, the
16    procurement administrator, in consultation with the
17    Commission staff, Agency staff, and the procurement
18    monitor, shall establish benchmarks for evaluating the
19    final prices in the contracts for each of the products that
20    will be procured through the procurement process. The
21    benchmarks shall be based on price data for similar
22    products for the same delivery period and same delivery
23    hub, or other delivery hubs after adjusting for that
24    difference. The price benchmarks may also be adjusted to
25    take into account differences between the information
26    reflected in the underlying data sources and the specific

 

 

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1    products and procurement process being used to procure
2    power for the Illinois utilities. The benchmarks shall be
3    confidential but shall be provided to, and will be subject
4    to Commission review and approval, prior to a procurement
5    event.
6        (4) Request for proposals competitive procurement
7    process. The procurement administrator shall design and
8    issue a request for proposals to supply electricity in
9    accordance with each utility's procurement plan, as
10    approved by the Commission. The request for proposals shall
11    set forth a procedure for sealed, binding commitment
12    bidding with pay-as-bid settlement, and provision for
13    selection of bids on the basis of price.
14        (5) A plan for implementing contingencies in the event
15    of supplier default or failure of the procurement process
16    to fully meet the expected load requirement due to
17    insufficient supplier participation, Commission rejection
18    of results, or any other cause.
19            (i) Event of supplier default: In the event of
20        supplier default, the utility shall review the
21        contract of the defaulting supplier to determine if the
22        amount of supply is 200 megawatts or greater, and if
23        there are more than 60 days remaining of the contract
24        term. If both of these conditions are met, and the
25        default results in termination of the contract, then
26        the utility shall immediately notify the Illinois

 

 

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1        Power Agency that a request for proposals must be
2        issued to procure replacement power or energy
3        efficiency products, and the procurement administrator
4        shall run an additional procurement event. If the
5        contracted supply of the defaulting supplier is less
6        than 200 megawatts or there are less than 60 days
7        remaining of the contract term, the utility shall
8        procure energy efficiency products or power and energy
9        from the applicable regional transmission organization
10        market, including ancillary services, capacity, energy
11        efficiency products, and day-ahead or real time
12        energy, or both, for the duration of the contract term
13        to replace the contracted supply; provided, however,
14        that if a needed product is not available through the
15        regional transmission organization market it shall be
16        purchased from the wholesale market.
17            (ii) Failure of the procurement process to fully
18        meet the expected load requirement: If the procurement
19        process fails to fully meet the expected load
20        requirement due to insufficient supplier participation
21        or due to a Commission rejection of the procurement
22        results, the procurement administrator, the
23        procurement monitor, and the Commission staff shall
24        meet within 10 days to analyze potential causes of low
25        supplier interest or causes for the Commission
26        decision. If changes are identified that would likely

 

 

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1        result in increased supplier participation, or that
2        would address concerns causing the Commission to
3        reject the results of the prior procurement event, the
4        procurement administrator may implement those changes
5        and rerun the request for proposals process according
6        to a schedule determined by those parties and
7        consistent with Section 1-75 of the Illinois Power
8        Agency Act and this subsection. In any event, a new
9        request for proposals process shall be implemented by
10        the procurement administrator within 90 days after the
11        determination that the procurement process has failed
12        to fully meet the expected load requirement.
13            (iii) In all cases where there is insufficient
14        supply provided under contracts awarded through the
15        procurement process to fully meet the electric
16        utility's load requirement, the utility shall meet the
17        load requirement by procuring power and energy from the
18        applicable regional transmission organization market,
19        including ancillary services, capacity, and day-ahead
20        or real time energy or both; provided, however, that if
21        a needed product is not available through the regional
22        transmission organization market it shall be purchased
23        from the wholesale market.
24        (6) The procurement process described in this
25    subsection is exempt from the requirements of the Illinois
26    Procurement Code, pursuant to Section 20-10 of that Code.

 

 

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1    (f) Within 2 business days after opening the sealed bids,
2the procurement administrator shall submit a confidential
3report to the Commission. The report shall contain the results
4of the bidding for each of the products along with the
5procurement administrator's recommendation for the acceptance
6and rejection of bids based on the price benchmark criteria and
7other factors observed in the process. For procurements
8applicable to periods beginning on and after June 1, 2012, the
9report shall also include, with respect to each recommended
10purchase of bundled renewable energy resources as defined in
11Section 1-10 of the Illinois Power Agency Act, an allocation of
12the price between the price of the electricity generated by
13renewable energy resources and the price of the associated
14renewable energy credits. The procurement monitor also shall
15submit a confidential report to the Commission within 2
16business days after opening the sealed bids. The report shall
17contain the procurement monitor's assessment of bidder
18behavior in the process as well as an assessment of the
19procurement administrator's compliance with the procurement
20process and rules. The Commission shall review the confidential
21reports submitted by the procurement administrator and
22procurement monitor, and shall accept or reject the
23recommendations of the procurement administrator, including
24the recommended allocation of the price of each purchase of
25bundled renewable energy resources between the price of the
26electricity and the price of the associated renewable energy

 

 

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1credits, within 2 business days after receipt of the reports.
2    (g) Within 3 business days after the Commission decision
3approving the results of a procurement event, the utility shall
4enter into binding contractual arrangements with the winning
5suppliers using the standard form contracts; except that the
6utility shall not be required either directly or indirectly to
7execute the contracts if a tariff that is consistent with
8subsection (l) of this Section has not been approved and placed
9into effect for that utility.
10    (h) The names of the successful bidders and the load
11weighted average of the winning bid prices for each contract
12type and for each contract term shall be made available to the
13public at the time of Commission approval of a procurement
14event. The Commission, the procurement monitor, the
15procurement administrator, the Illinois Power Agency, and all
16participants in the procurement process shall maintain the
17confidentiality of all other supplier and bidding information
18in a manner consistent with all applicable laws, rules,
19regulations, and tariffs. Confidential information, including
20the confidential reports submitted by the procurement
21administrator and procurement monitor pursuant to subsection
22(f) of this Section, shall not be made publicly available and
23shall not be discoverable by any party in any proceeding,
24absent a compelling demonstration of need, nor shall those
25reports be admissible in any proceeding other than one for law
26enforcement purposes.

 

 

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1    (i) Within 2 business days after a Commission decision
2approving the results of a procurement event or such other date
3as may be required by the Commission from time to time, the
4utility shall file for informational purposes with the
5Commission its actual or estimated retail supply charges, as
6applicable, by customer supply group reflecting the costs
7associated with the procurement and computed in accordance with
8the tariffs filed pursuant to subsection (l) of this Section
9and approved by the Commission.
10    (j) Within 60 days following the effective date of this
11amendatory Act, each electric utility that on December 31, 2005
12provided electric service to at least 100,000 customers in
13Illinois shall prepare and file with the Commission an initial
14procurement plan, which shall conform in all material respects
15to the requirements of the procurement plan set forth in
16subsection (b); provided, however, that the Illinois Power
17Agency Act shall not apply to the initial procurement plan
18prepared pursuant to this subsection. The initial procurement
19plan shall identify the portfolio of power and energy products
20to be procured and delivered for the period June 2008 through
21May 2009, and shall identify the proposed procurement
22administrator, who shall have the same experience and expertise
23as is required of a procurement administrator hired pursuant to
24Section 1-75 of the Illinois Power Agency Act. Copies of the
25procurement plan shall be posted and made publicly available on
26the Commission's website. The initial procurement plan may

 

 

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1include contracts for renewable resources that extend beyond
2May 2009.
3        (i) Within 14 days following filing of the initial
4    procurement plan, any person may file a detailed objection
5    with the Commission contesting the procurement plan
6    submitted by the electric utility. All objections to the
7    electric utility's plan shall be specific, supported by
8    data or other detailed analyses. The electric utility may
9    file a response to any objections to its procurement plan
10    within 7 days after the date objections are due to be
11    filed. Within 7 days after the date the utility's response
12    is due, the Commission shall determine whether a hearing is
13    necessary. If it determines that a hearing is necessary, it
14    shall require the hearing to be completed and issue an
15    order on the procurement plan within 60 days after the
16    filing of the procurement plan by the electric utility.
17        (ii) The order shall approve or modify the procurement
18    plan, approve an independent procurement administrator,
19    and approve or modify the electric utility's tariffs that
20    are proposed with the initial procurement plan. The
21    Commission shall approve the procurement plan if the
22    Commission determines that it will ensure adequate,
23    reliable, affordable, efficient, and environmentally
24    sustainable electric service at the lowest total cost over
25    time, taking into account any benefits of price stability.
26    (k) In order to promote price stability for residential and

 

 

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1small commercial customers during the transition to
2competition in Illinois, and notwithstanding any other
3provision of this Act, each electric utility subject to this
4Section shall enter into one or more multi-year financial swap
5contracts that become effective on the effective date of this
6amendatory Act. These contracts may be executed with generators
7and power marketers, including affiliated interests of the
8electric utility. These contracts shall be for a term of no
9more than 5 years and shall, for each respective utility or for
10any Illinois electric utilities that are affiliated by virtue
11of a common parent company and that are thereby considered a
12single electric utility for purposes of this subsection (k),
13not exceed in the aggregate 3,000 megawatts for any hour of the
14year. The contracts shall be financial contracts and not energy
15sales contracts. The contracts shall be executed as
16transactions under a negotiated master agreement based on the
17form of master agreement for financial swap contracts sponsored
18by the International Swaps and Derivatives Association, Inc.
19and shall be considered pre-existing contracts in the
20utilities' procurement plans for residential and small
21commercial customers. Costs incurred pursuant to a contract
22authorized by this subsection (k) shall be deemed prudently
23incurred and reasonable in amount and the electric utility
24shall be entitled to full cost recovery pursuant to the tariffs
25filed with the Commission.
26    (l) An electric utility shall recover its costs incurred

 

 

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1under this Section, including, but not limited to, the costs of
2procuring power, energy efficiency products, and energy
3demand-response resources under this Section. The utility
4shall file with the initial procurement plan its proposed
5tariffs through which its costs of procuring power that are
6incurred pursuant to a Commission-approved procurement plan
7and those other costs identified in this subsection (l), will
8be recovered. The tariffs shall include a formula rate or
9charge designed to pass through both the costs incurred by the
10utility in procuring a supply of electric power and energy for
11the applicable customer classes with no mark-up or return on
12the price paid by the utility for that supply, plus any just
13and reasonable costs that the utility incurs in arranging and
14providing for the supply of electric power and energy. The
15formula rate or charge shall also contain provisions that
16ensure that its application does not result in over or under
17recovery due to changes in customer usage and demand patterns,
18and that provide for the correction, on at least an annual
19basis, of any accounting errors that may occur. A utility shall
20recover through the tariff all reasonable costs incurred to
21implement or comply with any procurement plan that is developed
22and put into effect pursuant to Section 1-75 of the Illinois
23Power Agency Act and this Section, including any fees assessed
24by the Illinois Power Agency, costs associated with load
25balancing, and contingency plan costs. The electric utility
26shall also recover its full costs of procuring electric supply

 

 

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1for which it contracted before the effective date of this
2Section in conjunction with the provision of full requirements
3service under fixed-price bundled service tariffs subsequent
4to December 31, 2006. All such costs shall be deemed to have
5been prudently incurred. The pass-through tariffs that are
6filed and approved pursuant to this Section shall not be
7subject to review under, or in any way limited by, Section
816-111(i) of this Act. Beginning June 1, 2012, the costs
9incurred by the electric utility to purchase renewable energy
10credits in accordance with subsection (c) of Section 1-75 of
11the Illinois Power Agency Act, and any excluded renewable
12energy resources contract costs as defined in Section 1-10 of
13the Illinois Power Agency Act, shall be recovered through the
14electric utility's tariffed charges for delivery services
15pursuant to Section 16-108 of this Act and shall not be
16recovered through the electric utility's tariffed charges for
17electric power and energy supply to its eligible retail
18customers.
19    (m) The Commission has the authority to adopt rules to
20carry out the provisions of this Section. For the public
21interest, safety, and welfare, the Commission also has
22authority to adopt rules to carry out the provisions of this
23Section on an emergency basis immediately following the
24effective date of this amendatory Act.
25    (n) Notwithstanding any other provision of this Act, any
26affiliated electric utilities that submit a single procurement

 

 

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1plan covering their combined needs may procure for those
2combined needs in conjunction with that plan, and may enter
3jointly into power supply contracts, purchases, and other
4procurement arrangements, and allocate capacity, energy
5efficiency products, and energy and cost responsibility
6therefor among themselves in proportion to their requirements.
7    (o) On or before June 1 of each year, the Commission shall
8hold an informal hearing for the purpose of receiving comments
9on the prior year's procurement process and any recommendations
10for change.
11    (p) An electric utility subject to this Section may propose
12to invest, lease, own, or operate an electric generation
13facility as part of its procurement plan, provided the utility
14demonstrates that such facility is the least-cost option to
15provide electric service to eligible retail customers. If the
16facility is shown to be the least-cost option and is included
17in a procurement plan prepared in accordance with Section 1-75
18of the Illinois Power Agency Act and this Section, then the
19electric utility shall make a filing pursuant to Section 8-406
20of the Act, and may request of the Commission any statutory
21relief required thereunder. If the Commission grants all of the
22necessary approvals for the proposed facility, such supply
23shall thereafter be considered as a pre-existing contract under
24subsection (b) of this Section. The Commission shall in any
25order approving a proposal under this subsection specify how
26the utility will recover the prudently incurred costs of

 

 

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1investing in, leasing, owning, or operating such generation
2facility through just and reasonable rates charged to eligible
3retail customers. Cost recovery for facilities included in the
4utility's procurement plan pursuant to this subsection shall
5not be subject to review under or in any way limited by the
6provisions of Section 16-111(i) of this Act. Nothing in this
7Section is intended to prohibit a utility from filing for a
8fuel adjustment clause as is otherwise permitted under Section
99-220 of this Act.
10(Source: P.A. 97-325, eff. 8-12-11.)
 
11    (220 ILCS 5/16-115)
12    Sec. 16-115. Certification of alternative retail electric
13suppliers.
14    (a) Any alternative retail electric supplier must obtain a
15certificate of service authority from the Commission in
16accordance with this Section before serving any retail customer
17or other user located in this State. An alternative retail
18electric supplier may request, and the Commission may grant, a
19certificate of service authority for the entire State or for a
20specified geographic area of the State.
21    (b) An alternative retail electric supplier seeking a
22certificate of service authority shall file with the Commission
23a verified application containing information showing that the
24applicant meets the requirements of this Section. The
25alternative retail electric supplier shall publish notice of

 

 

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1its application in the official State newspaper within 10 days
2following the date of its filing. No later than 45 days after
3the application is properly filed with the Commission, and such
4notice is published, the Commission shall issue its order
5granting or denying the application.
6    (c) An application for a certificate of service authority
7shall identify the area or areas in which the applicant intends
8to offer service and the types of services it intends to offer.
9Applicants that seek to serve residential or small commercial
10retail customers within a geographic area that is smaller than
11an electric utility's service area shall submit evidence
12demonstrating that the designation of this smaller area does
13not violate Section 16-115A. An applicant that seeks to serve
14residential or small commercial retail customers may state in
15its application for certification any limitations that will be
16imposed on the number of customers or maximum load to be
17served.
18    (d) The Commission shall grant the application for a
19certificate of service authority if it makes the findings set
20forth in this subsection based on the verified application and
21such other information as the applicant may submit:
22        (1) That the applicant possesses sufficient technical,
23    financial and managerial resources and abilities to
24    provide the service for which it seeks a certificate of
25    service authority. In determining the level of technical,
26    financial and managerial resources and abilities which the

 

 

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1    applicant must demonstrate, the Commission shall consider
2    (i) the characteristics, including the size and financial
3    sophistication, of the customers that the applicant seeks
4    to serve, and (ii) whether the applicant seeks to provide
5    electric power and energy using property, plant and
6    equipment which it owns, controls or operates;
7        (2) That the applicant will comply with all applicable
8    federal, State, regional and industry rules, policies,
9    practices and procedures for the use, operation, and
10    maintenance of the safety, integrity and reliability, of
11    the interconnected electric transmission system;
12        (3) That the applicant will only provide service to
13    retail customers in an electric utility's service area that
14    are eligible to take delivery services under this Act;
15        (4) That the applicant will comply with such
16    informational or reporting requirements as the Commission
17    may by rule establish and provide the information required
18    by Section 16-112. Any data related to contracts for the
19    purchase and sale of electric power and energy shall be
20    made available for review by the Staff of the Commission on
21    a confidential and proprietary basis and only to the extent
22    and for the purposes which the Commission determines are
23    reasonably necessary in order to carry out the purposes of
24    this Act;
25        (5) That the applicant will procure renewable energy
26    resources in accordance with Section 16-115D of this Act,

 

 

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1    and will source electricity from clean coal facilities, as
2    defined in Section 1-10 of the Illinois Power Agency Act,
3    in amounts at least equal to the amounts percentages set
4    forth in subsections (c) and (d) of Section 1-75 of the
5    Illinois Power Agency Act. For purposes of this Section:
6            (i) (blank) (Blank);
7            (ii) (blank) (Blank);
8            (iii) (blank); the required sourcing of
9        electricity generated by clean coal facilities, other
10        than the initial clean coal facility, shall be limited
11        to the amount of electricity that can be procured or
12        sourced at a price at or below the benchmarks approved
13        by the Commission each year in accordance with item (1)
14        of subsection (c) and items (1) and (5) of subsection
15        (d) of Section 1-75 of the Illinois Power Agency Act;
16            (iv) all alternative retail electric suppliers,
17        whether certified before or after the effective date of
18        this amendatory Act of the 97th General Assembly, shall
19        execute a sourcing agreement to source electricity
20        from the initial clean coal facility, on the terms set
21        forth in paragraphs (3) and (4) of subsection (d) of
22        Section 1-75 of the Illinois Power Agency Act, with
23        each reference therein to "utility" being deemed to be
24        a reference to an alternative retail electric
25        supplier, except that in lieu of the requirements in
26        subparagraphs (B)(v), (D)(ii), and (D)(vii) (A)(v),

 

 

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1        (B)(i), (C)(v), and (C)(vi) of paragraph (3) of that
2        subsection (d), shall not apply; the applicant shall
3        execute one or more of the following:
4                (1) if the sourcing agreement is a power
5            purchase agreement, a contract with the initial
6            clean coal facility to purchase in each hour an
7            amount of electricity equal to all clean coal
8            energy made available from the initial clean coal
9            facility during such hour, which the utilities are
10            not required to procure under the terms of
11            subsection (d) of Section 1-75 of the Illinois
12            Power Agency Act, multiplied by a fraction, the
13            numerator of which is the alternative retail
14            electric supplier's retail market sales of
15            electricity (expressed in kilowatthours sold) in
16            the State during the prior calendar month and the
17            denominator of which is the total sales of
18            electricity (expressed in kilowatthours sold) in
19            the State by alternative retail electric suppliers
20            during such prior month that are subject to the
21            requirements of this paragraph (5) of subsection
22            (d) of this Section and subsection (d) of Section
23            1-75 of the Illinois Power Agency Act plus the
24            total sales of electricity (expressed in
25            kilowatthours sold) by utilities outside of their
26            service areas during such prior month, pursuant to

 

 

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1            subsection (c) of Section 16-116 of this Act; or
2                (2) if the sourcing agreement is a contract for
3            differences, a contract with the initial clean
4            coal facility in each hour with respect to an
5            amount of electricity equal to all clean coal
6            energy made available from the initial clean coal
7            facility during such hour, which the utilities are
8            not required to procure under the terms of
9            subsection (d) of Section 1-75 of the Illinois
10            Power Agency Act, multiplied by a fraction, the
11            numerator of which is the alternative retail
12            electric supplier's retail market sales of
13            electricity (expressed in kilowatthours sold) in
14            the State during the prior calendar month and the
15            denominator of which is the total sales of
16            electricity (expressed in kilowatthours sold) in
17            the State by alternative retail electric suppliers
18            during such prior month that are subject to the
19            requirements of this paragraph (5) of subsection
20            (d) of this Section and subsection (d) of Section
21            1-75 of the Illinois Power Agency Act plus the
22            total sales of electricity (expressed in
23            kilowatthours sold) by utilities outside of their
24            service areas during such prior month, pursuant to
25            subsection (c) of Section 16-116 of this Act;
26            (v) (blank); if, in any year after the first year

 

 

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1        of commercial operation, the owner of the clean coal
2        facility fails to demonstrate to the Commission that
3        the initial clean coal facility captured and
4        sequestered at least 50% of the total carbon emissions
5        that the facility would otherwise emit or that
6        sequestration of emissions from prior years has
7        failed, resulting in the release of carbon into the
8        atmosphere, the owner of the facility must offset
9        excess emissions. Any such carbon offsets must be
10        permanent, additional, verifiable, real, located
11        within the State of Illinois, and legally and
12        practicably enforceable. The costs of any such offsets
13        that are not recoverable shall not exceed $15 million
14        in any given year. No costs of any such purchases of
15        carbon offsets may be recovered from an alternative
16        retail electric supplier or its customers. All carbon
17        offsets purchased for this purpose and any carbon
18        emission credits associated with sequestration of
19        carbon from the facility must be permanently retired.
20        The initial clean coal facility shall not forfeit its
21        designation as a clean coal facility if the facility
22        fails to fully comply with the applicable carbon
23        sequestration requirements in any given year, provided
24        the requisite offsets are purchased. However, the
25        Attorney General, on behalf of the People of the State
26        of Illinois, may specifically enforce the facility's

 

 

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1        sequestration requirement and the other terms of this
2        contract provision. Compliance with the sequestration
3        requirements and offset purchase requirements that
4        apply to the initial clean coal facility shall be
5        reviewed annually by an independent expert retained by
6        the owner of the initial clean coal facility, with the
7        advance written approval of the Attorney General;
8            (vi) the The Commission shall, after notice and
9        hearing, revoke the certification of any alternative
10        retail electric supplier that fails to execute a
11        sourcing agreement with the initial clean coal
12        facility as required by item (5) of subsection (d) of
13        this Section. The sourcing agreements with the this
14        initial clean coal facility shall be subject to
15        approval both approval of the initial clean coal
16        facility by the Illinois Power Agency pursuant to
17        paragraph (4) of subsection (d) of Section 1-75 of the
18        Illinois Power Agency Act General Assembly and
19        satisfaction of the requirements of item (4) of
20        subsection (d) of Section 1-75 of the Illinois Power
21        Agency Act, and shall be executed within 30 90 days
22        after any such approval by the Illinois Power Agency or
23        the issuance of any necessary approval by the Federal
24        Energy Regulatory Commission, whichever is later;
25            (vii) The Commission shall have jurisdiction over
26        disciplinary proceedings and complaints for violations

 

 

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1        of this Section. If, upon complaint, the Commission
2        determines an alternative retail electric supplier has
3        failed to execute a sourcing agreement with the initial
4        clean coal facility, then the Commission shall issue
5        notice of the finding to the alternative retail
6        electric supplier. The alternative retail electric
7        supplier shall have 30 days after the receipt of notice
8        to enter into a sourcing agreement. If, after the
9        notice period, the Commission finds an alternative
10        retail electric supplier has failed to comply, then the
11        Commission shall revoke the alternative retail
12        electric supplier's certificate for 6 months General
13        Assembly. The Commission shall not accept an
14        application for certification from an alternative
15        retail electric supplier that has lost certification
16        under this subsection (d), or any corporate affiliate
17        thereof, for at least one year from the date of
18        revocation;
19        (6) With respect to an applicant that seeks to serve
20    residential or small commercial retail customers, that the
21    area to be served by the applicant and any limitations it
22    proposes on the number of customers or maximum amount of
23    load to be served meet the provisions of Section 16-115A,
24    provided, that the Commission can extend the time for
25    considering such a certificate request by up to 90 days,
26    and can schedule hearings on such a request;

 

 

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1        (7) That the applicant meets the requirements of
2    subsection (a) of Section 16-128; and
3        (8) That the applicant will comply with all other
4    applicable laws and regulations.
5    (d-5) (Blank).
6    (e) A retail customer that owns a cogeneration or
7self-generation facility and that seeks certification only to
8provide electric power and energy from such facility to retail
9customers at separate locations which customers are both (i)
10owned by, or a subsidiary or other corporate affiliate of, such
11applicant and (ii) eligible for delivery services, shall be
12granted a certificate of service authority upon filing an
13application and notifying the Commission that it has entered
14into an agreement with the relevant electric utilities pursuant
15to Section 16-118. Provided, however, that if the retail
16customer owning such cogeneration or self-generation facility
17would not be charged a transition charge due to the exemption
18provided under subsection (f) of Section 16-108 prior to the
19certification, and the retail customers at separate locations
20are taking delivery services in conjunction with purchasing
21power and energy from the facility, the retail customer on
22whose premises the facility is located shall not thereafter be
23required to pay transition charges on the power and energy that
24such retail customer takes from the facility.
25    (f) The Commission shall have the authority to promulgate
26rules and regulations to carry out the provisions of this

 

 

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1Section. On or before May 1, 1999, the Commission shall adopt a
2rule or rules applicable to the certification of those
3alternative retail electric suppliers that seek to serve only
4nonresidential retail customers with maximum electrical
5demands of one megawatt or more which shall provide for (i)
6expedited and streamlined procedures for certification of such
7alternative retail electric suppliers and (ii) specific
8criteria which, if met by any such alternative retail electric
9supplier, shall constitute the demonstration of technical,
10financial and managerial resources and abilities to provide
11service required by subsection (d) (1) of this Section, such as
12a requirement to post a bond or letter of credit, from a
13responsible surety or financial institution, of sufficient
14size for the nature and scope of the services to be provided;
15demonstration of adequate insurance for the scope and nature of
16the services to be provided; and experience in providing
17similar services in other jurisdictions.
18    (g) In any proceeding initiated by a public utility
19pursuant to Section 8-406 or Section 8-406.1 of this Act for a
20certificate of public convenience and necessity to construct
21and operate any utility plant, equipment, or facility required
22to provide service to the initial clean coal facility, it shall
23be conclusively presumed that the public convenience and
24necessity require the construction of such utility plant,
25equipment, or facility. In any proceeding initiated by a public
26utility pursuant to Section 8-503 of this Act for an order

 

 

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1directing the addition, extension, or improvement of any
2utility plant, equipment, facilities, or other property or the
3erection of any new utility plant, equipment, or facilities to
4provide service to the initial clean coal facility, it shall be
5conclusively presumed that such additional, extended, improved
6or new utility plant, equipment, facility, or other property is
7necessary and should be added, extended, or erected.
8(Source: P.A. 95-130, eff. 1-1-08; 95-1027, eff. 6-1-09;
996-159, eff. 8-10-09.)
 
10    (220 ILCS 5/16-115D)
11    Sec. 16-115D. Renewable portfolio standard for alternative
12retail electric suppliers and electric utilities operating
13outside their service territories.
14    (a) Until May 31, 2012, an An alternative retail electric
15supplier shall be responsible for procuring cost-effective
16renewable energy resources as required under item (5) of
17subsection (d) of Section 16-115 of this Act as outlined
18herein:
19        (1) The definition of renewable energy resources
20    contained in Section 1-10 of the Illinois Power Agency Act
21    applies to all renewable energy resources required to be
22    procured by alternative retail electric suppliers.
23        (2) The quantity of renewable energy resources shall be
24    measured as a percentage of the actual amount of metered
25    electricity (megawatt-hours) delivered by the alternative

 

 

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1    retail electric supplier to Illinois retail customers
2    during the 12-month period June 1 through May 31,
3    commencing June 1, 2009, and the comparable 12-month period
4    in each year thereafter except as provided in item (6) of
5    this subsection (a).
6        (3) The quantity of renewable energy resources shall be
7    in amounts at least equal to the annual percentages set
8    forth in item (1) of subsection (c) of Section 1-75 of the
9    Illinois Power Agency Act. At least 60% of the renewable
10    energy resources procured pursuant to items (1) through (3)
11    of subsection (b) of this Section shall come from wind
12    generation and, starting June 1, 2015, at least 6% of the
13    renewable energy resources procured pursuant to items (1)
14    through (3) of subsection (b) of this Section shall come
15    from solar photovoltaics. If, in any given year, an
16    alternative retail electric supplier does not purchase at
17    least these levels of renewable energy resources, then the
18    alternative retail electric supplier shall make
19    alternative compliance payments, as described in
20    subsection (d) of this Section.
21        (4) The quantity and source of renewable energy
22    resources shall be independently verified through the PJM
23    Environmental Information System Generation Attribute
24    Tracking System (PJM-GATS) or the Midwest Renewable Energy
25    Tracking System (M-RETS), which shall document the
26    location of generation, resource type, month, and year of

 

 

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1    generation for all qualifying renewable energy resources
2    that an alternative retail electric supplier uses to comply
3    with this Section. No later than June 1, 2009, the Illinois
4    Power Agency shall provide PJM-GATS, M-RETS, and
5    alternative retail electric suppliers with all information
6    necessary to identify resources located in Illinois,
7    within states that adjoin Illinois or within portions of
8    the PJM and MISO footprint in the United States that
9    qualify under the definition of renewable energy resources
10    in Section 1-10 of the Illinois Power Agency Act for
11    compliance with this Section 16-115D. Alternative retail
12    electric suppliers shall not be subject to the requirements
13    in item (3) of subsection (c) of Section 1-75 of the
14    Illinois Power Agency Act.
15        (5) All renewable energy credits used to comply with
16    this Section shall be permanently retired.
17        (6) The required procurement of renewable energy
18    resources by an alternative retail electric supplier shall
19    apply to all metered electricity delivered to Illinois
20    retail customers by the alternative retail electric
21    supplier pursuant to contracts executed or extended after
22    March 15, 2009.
23    (b) Until May 31, 2012, an An alternative retail electric
24supplier shall comply with the renewable energy portfolio
25standards by making an alternative compliance payment, as
26described in subsection (d) of this Section, to cover at least

 

 

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1one-half of the alternative retail electric supplier's
2compliance obligation and any one or combination of the
3following means to cover the remainder of the alternative
4retail electric supplier's compliance obligation:
5        (1) Generating electricity using renewable energy
6    resources identified pursuant to item (4) of subsection (a)
7    of this Section.
8        (2) Purchasing electricity generated using renewable
9    energy resources identified pursuant to item (4) of
10    subsection (a) of this Section through an energy contract.
11        (3) Purchasing renewable energy credits from renewable
12    energy resources identified pursuant to item (4) of
13    subsection (a) of this Section.
14        (4) Making an alternative compliance payment as
15    described in subsection (d) of this Section.
16    (c) Use of renewable energy credits.
17        (1) Renewable energy credits that are not used by an
18    alternative retail electric supplier to comply with a
19    renewable portfolio standard in a compliance year may be
20    banked and carried forward up to 2 12-month compliance
21    periods after the compliance period in which the credit was
22    generated for the purpose of complying with a renewable
23    portfolio standard in those 2 subsequent compliance
24    periods. For the 2009-2010 and 2010-2011 compliance
25    periods, an alternative retail electric supplier may use
26    renewable credits generated after December 31, 2008 and

 

 

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1    before June 1, 2009 to comply with this Section.
2        (2) An alternative retail electric supplier is
3    responsible for demonstrating that a renewable energy
4    credit used to comply with a renewable portfolio standard
5    is derived from a renewable energy resource and that the
6    alternative retail electric supplier has not used, traded,
7    sold, or otherwise transferred the credit.
8        (3) The same renewable energy credit may be used by an
9    alternative retail electric supplier to comply with a
10    federal renewable portfolio standard and a renewable
11    portfolio standard established under this Act. An
12    alternative retail electric supplier that uses a renewable
13    energy credit to comply with a renewable portfolio standard
14    imposed by any other state may not use the same credit to
15    comply with a renewable portfolio standard established
16    under this Act.
17    (d) Alternative compliance payments.
18        (1) The Commission shall establish and post on its
19    website, within 5 business days after entering an order
20    approving a procurement plan pursuant to Section 1-75 of
21    the Illinois Power Agency Act, maximum alternative
22    compliance payment rates, expressed on a per kilowatt-hour
23    basis, that will be applicable in the first compliance
24    period following the plan approval. A separate maximum
25    alternative compliance payment rate shall be established
26    for the service territory of each electric utility that is

 

 

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1    subject to subsection (c) of Section 1-75 of the Illinois
2    Power Agency Act. Each maximum alternative compliance
3    payment rate shall be equal to the maximum allowable annual
4    estimated average net increase due to the costs of the
5    utility's purchase of renewable energy resources included
6    in the amounts paid by eligible retail customers in
7    connection with electric service, as described in item (2)
8    of subsection (c) of Section 1-75 of the Illinois Power
9    Agency Act for the compliance period, and as established in
10    the approved procurement plan. Following each procurement
11    event through which renewable energy resources are
12    purchased for one or more of these utilities for the
13    compliance period, the Commission shall establish and post
14    on its website estimates of the alternative compliance
15    payment rates, expressed on a per kilowatt-hour basis, that
16    shall apply for that compliance period. Posting of the
17    estimates shall occur no later than 10 business days
18    following the procurement event, however, the Commission
19    shall not be required to establish and post such estimates
20    more often than once per calendar month. By July 1 of each
21    year, the Commission shall establish and post on its
22    website the actual alternative compliance payment rates
23    for the preceding compliance year. For compliance years
24    beginning prior to June 1, 2014, each alternative
25    compliance payment rate shall be equal to the total amount
26    of dollars that the utility contracted to spend on

 

 

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1    renewable resources, excepting the additional incremental
2    cost attributable to solar resources, for the compliance
3    period divided by the forecasted load of eligible retail
4    customers, at the customers' meters, as previously
5    established in the Commission-approved procurement plan
6    for that compliance year. For compliance years commencing
7    on or after June 1, 2014, each alternative compliance
8    payment rate shall be equal to the total amount of dollars
9    that the utility contracted to spend on all renewable
10    resources for the compliance period divided by the
11    forecasted load of eligible retail customers, at the
12    customers' meters, as previously established in the
13    Commission-approved procurement plan for that compliance
14    year. The actual alternative compliance payment rates may
15    not exceed the maximum alternative compliance payment
16    rates established for the compliance period. For purposes
17    of this subsection (d), the term "eligible retail
18    customers" has the same meaning as found in Section
19    16-111.5 of this Act.
20        (2) In any given compliance year, an alternative retail
21    electric supplier may elect to use alternative compliance
22    payments to comply with all or a part of the applicable
23    renewable portfolio standard. In the event that an
24    alternative retail electric supplier elects to make
25    alternative compliance payments to comply with all or a
26    part of the applicable renewable portfolio standard, such

 

 

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1    payments shall be made by September 1, 2010 for the period
2    of June 1, 2009 to May 1, 2010 and by September 1 of each
3    year thereafter for the subsequent compliance period, in
4    the manner and form as determined by the Commission. Any
5    election by an alternative retail electric supplier to use
6    alternative compliance payments is subject to review by the
7    Commission under subsection (e) of this Section.
8        (3) An alternative retail electric supplier's
9    alternative compliance payments shall be computed
10    separately for each electric utility's service territory
11    within which the alternative retail electric supplier
12    provided retail service during the compliance period,
13    provided that the electric utility was subject to
14    subsection (c) of Section 1-75 of the Illinois Power Agency
15    Act. For each service territory, the alternative retail
16    electric supplier's alternative compliance payment shall
17    be equal to (i) the actual alternative compliance payment
18    rate established in item (1) of this subsection (d),
19    multiplied by (ii) the actual amount of metered electricity
20    delivered by the alternative retail electric supplier to
21    retail customers within the service territory during the
22    compliance period, multiplied by (iii) the result of one
23    minus the ratios of the quantity of renewable energy
24    resources used by the alternative retail electric supplier
25    to comply with the requirements of this Section within the
26    service territory to the product of the percentage of

 

 

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1    renewable energy resources required under item (3) of
2    subsection (a) of this Section and the actual amount of
3    metered electricity delivered by the alternative retail
4    electric supplier to retail customers within the service
5    territory during the compliance period.
6        (4) All alternative compliance payments by alternative
7    retail electric suppliers shall be deposited in the
8    Illinois Power Agency Renewable Energy Resources Fund and
9    used to purchase renewable energy credits, in accordance
10    with Section 1-56 of the Illinois Power Agency Act.
11        (5) The Commission, in consultation with the Illinois
12    Power Agency, shall establish a process or proceeding to
13    consider the impact of a federal renewable portfolio
14    standard, if enacted, on the operation of the alternative
15    compliance mechanism, which shall include, but not be
16    limited to, developing, to the extent permitted by the
17    applicable federal statute, an appropriate methodology to
18    apportion renewable energy credits retired as a result of
19    alternative compliance payments made in accordance with
20    this Section. The Commission shall commence any such
21    process or proceeding within 35 days after enactment of a
22    federal renewable portfolio standard.
23    (e) Each alternative retail electric supplier shall, by
24September 1, 2010 and by September 1 of each year thereafter,
25prepare and submit to the Commission a report, in a format to
26be specified by the Commission on or before December 31, 2009,

 

 

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1that provides information certifying compliance by the
2alternative retail electric supplier with this Section,
3including copies of all PJM-GATS and M-RETS reports, and
4documentation relating to banking, retiring renewable energy
5credits, and any other information that the Commission
6determines necessary to ensure compliance with this Section. An
7alternative retail electric supplier may file commercially or
8financially sensitive information or trade secrets with the
9Commission as provided under the rules of the Commission. To be
10filed confidentially, the information shall be accompanied by
11an affidavit that sets forth both the reasons for the
12confidentiality and a public synopsis of the information.
13    (f) The Commission may initiate a contested case to review
14allegations that the alternative retail electric supplier has
15violated this Section, including an order issued or rule
16promulgated under this Section. In any such proceeding, the
17alternative retail electric supplier shall have the burden of
18proof. If the Commission finds, after notice and hearing, that
19an alternative retail electric supplier has violated this
20Section, then the Commission shall issue an order requiring the
21alternative retail electric supplier to:
22        (1) immediately comply with this Section; and
23        (2) if the violation involves a failure to procure the
24    requisite quantity of renewable energy resources or pay the
25    applicable alternative compliance payment by the annual
26    deadline, the Commission shall require the alternative

 

 

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1    retail electric supplier to double the applicable
2    alternative compliance payment that would otherwise be
3    required to bring the alternative retail electric supplier
4    into compliance with this Section.
5    If an alternative retail electric supplier fails to comply
6with the renewable energy resource portfolio requirement in
7this Section more than once in a 5-year period, then the
8Commission shall revoke the alternative electric supplier's
9certificate of service authority. The Commission shall not
10accept an application for a certificate of service authority
11from an alternative retail electric supplier that has lost
12certification under this subsection (f), or any corporate
13affiliate thereof, for at least one year after the date of
14revocation.
15    (g) All of the provisions of this Section apply to electric
16utilities operating outside their service area except under
17item (2) of subsection (a) of this Section the quantity of
18renewable energy resources shall be measured as a percentage of
19the actual amount of electricity (megawatt-hours) supplied in
20the State outside of the utility's service territory during the
2112-month period June 1 through May 31, commencing June 1, 2009,
22and the comparable 12-month period in each year thereafter
23except as provided in item (6) of subsection (a) of this
24Section.
25    If any such utility fails to procure the requisite quantity
26of renewable energy resources by the annual deadline, then the

 

 

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1Commission shall require the utility to double the alternative
2compliance payment that would otherwise be required to bring
3the utility into compliance with this Section.
4    If any such utility fails to comply with the renewable
5energy resource portfolio requirement in this Section more than
6once in a 5-year period, then the Commission shall order the
7utility to cease all sales outside of the utility's service
8territory for a period of at least one year.
9    (h) The provisions of this Section and the provisions of
10subsection (d) of Section 16-115 of this Act relating to
11procurement of renewable energy resources shall not apply to an
12alternative retail electric supplier that operates a combined
13heat and power system in this State or that has a corporate
14affiliate that operates such a combined heat and power system
15in this State that supplies electricity primarily to or for the
16benefit of: (i) facilities owned by the supplier, its
17subsidiary, or other corporate affiliate; (ii) facilities
18electrically integrated with the electrical system of
19facilities owned by the supplier, its subsidiary, or other
20corporate affiliate; or (iii) facilities that are adjacent to
21the site on which the combined heat and power system is
22located.
23    (i) The obligations specified in this Section of
24alternative retail electric suppliers and electric utilities
25operating outside their service territories to procure
26renewable energy resources, make alternative compliance

 

 

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1payments, and file annual reports, and the obligations of the
2Commission to determine and post alternative compliance
3payment rates, shall terminate effective May 31, 2012, provided
4that alternative retail electric suppliers and electric
5utilities operating outside their service territories shall be
6obligated to make all alternative compliance payments that they
7were obligated to pay for periods through and including May 31,
82012, but were not paid as of that date and to file all
9required reports for periods prior to June 1, 2012. The
10Commission shall continue to enforce the payment of unpaid
11alternative compliance payments after May 31, 2012 in
12accordance with subsections (f) and (g) of this Section. All
13alternative compliance payments made after May 31, 2012 shall
14be deposited in the Illinois Power Agency Renewable Energy
15Resources Fund and used to purchase renewable energy credits,
16in accordance with Section 1-56 of the Illinois Power Agency
17Act.
18(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
1996-1437, eff. 8-17-10.)
 
20    (220 ILCS 5/16-116)
21    Sec. 16-116. Commission oversight of electric utilities
22serving retail customers outside their service areas or
23providing competitive, non-tariffed services.
24    (a) An electric utility that has a tariff on file for
25delivery services may, without regard to any otherwise

 

 

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1applicable tariffs on file, provide electric power and energy
2to one or more retail customers located outside its service
3area, but only to the extent (i) such retail customer (A) is
4eligible for delivery services under any delivery services
5tariff filed with the Commission by the electric utility in
6whose service area the retail customer is located and (B) has
7either elected to take such delivery services or has paid or
8contracted to pay the charges specified in Sections 16-108 and
916-114, or (ii) if such retail customer is served by a
10municipal system or electric cooperative, the customer is
11eligible for delivery services under the terms and conditions
12for such service established by the municipal system or
13electric cooperative serving that customer.
14    (b) An electric utility may offer any competitive service
15to any customer or group of customers without filing contracts
16with or seeking approval of the Commission, notwithstanding any
17rule or regulation that would require such approval. The
18Commission shall not increase or decrease the prices, and may
19not alter or add to the terms and conditions for the utility's
20competitive services, from those agreed to by the electric
21utility and the customer or customers. Non-tariffed,
22competitive services shall not be subject to the provisions of
23the Electric Supplier Act or to Articles V, VII, VIII or IX of
24the Act, except to the extent that any provisions of such
25Articles are made applicable to alternative retail electric
26suppliers pursuant to Sections 16-115 and 16-115A, but shall be

 

 

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1subject to the provisions of subsections (b) through (g) of
2Section 16-115A, and Section 16-115B to the same extent such
3provisions are applicable to the services provided by
4alternative retail electric suppliers.
5    (c) Electric utilities serving retail customers outside
6their service areas shall be subject to the requirements of
7paragraph (5) of subsection (d) of Section 16-115 of the Public
8Utilities Act, except that the numerators referred to in that
9subsection (d) shall be the utility's retail market sales of
10electricity (expressed in kilowatthours sold) in the State
11outside of the utility's service territory in the prior month.
12(Source: P.A. 95-1027, eff. 6-1-09.)
 
13    Section 900. Severability. The provisions of this Act are
14severable under Section 1.31 of the Statute on Statutes.