Sen. Mike Jacobs

Filed: 3/8/2011

 

 


 

 


 
09700SB1533sam001LRB097 09938 ASK 51554 a

1
AMENDMENT TO SENATE BILL 1533

2    AMENDMENT NO. ______. Amend Senate Bill 1533 by deleting
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Power Agency Act is amended by
5changing Sections 1-5, 1-20, and 1-75 as follows:
 
6    (20 ILCS 3855/1-5)
7    Sec. 1-5. Legislative declarations and findings. The
8General Assembly finds and declares:
9        (1) The health, welfare, and prosperity of all Illinois
10    citizens require the provision of adequate, reliable,
11    affordable, efficient, and environmentally sustainable
12    electric service at the lowest total cost over time, taking
13    into account any benefits of price stability.
14        (2) The transition to retail competition is not
15    complete. Some customers, especially residential and small
16    commercial customers, have failed to benefit from lower

 

 

09700SB1533sam001- 2 -LRB097 09938 ASK 51554 a

1    electricity costs from retail and wholesale competition.
2        (3) Escalating prices for electricity in Illinois pose
3    a serious threat to the economic well-being, health, and
4    safety of the residents of and the commerce and industry of
5    the State.
6        (4) To protect against this threat to economic
7    well-being, health, and safety it is necessary to improve
8    the process of procuring electricity to serve Illinois
9    residents, to promote investment in energy efficiency and
10    demand-response measures, and to support development of
11    clean coal technologies and renewable resources.
12        (5) Procuring a diverse electricity supply portfolio
13    will ensure the lowest total cost over time for adequate,
14    reliable, efficient, and environmentally sustainable
15    electric service.
16        (6) Including cost-effective renewable resources in
17    that portfolio will reduce long-term direct and indirect
18    costs to consumers by decreasing environmental impacts and
19    by avoiding or delaying the need for new generation,
20    transmission, and distribution infrastructure.
21        (7) Energy efficiency, demand-response measures, and
22    renewable energy are resources currently underused in
23    Illinois.
24        (8) The State should encourage the use of advanced
25    clean coal technologies that capture and sequester carbon
26    dioxide emissions to advance environmental protection

 

 

09700SB1533sam001- 3 -LRB097 09938 ASK 51554 a

1    goals and to demonstrate the viability of coal and
2    coal-derived fuels in a carbon-constrained economy.
3    The General Assembly therefore finds that it is necessary
4to create the Illinois Power Agency and that the goals and
5objectives of that Agency are to accomplish each of the
6following:
7        (A) Develop electricity procurement plans to ensure
8    adequate, reliable, affordable, efficient, and
9    environmentally sustainable electric service at the lowest
10    total cost over time, taking into account any benefits of
11    price stability, for electric utilities that on December
12    31, 2005 provided electric service to at least 100,000
13    customers in Illinois and for small multi-jurisdictional
14    electric utilities that (i) on December 31, 2005 served
15    less than 100,000 customers in Illinois and (ii) request a
16    procurement plan for their Illinois jurisdictional load..
17    The procurement plan shall be updated on an annual basis
18    and shall include renewable energy resources sufficient to
19    achieve the standards specified in this Act.
20        (B) Conduct competitive procurement processes to
21    procure the supply resources identified in the procurement
22    plan.
23        (C) Develop electric generation and co-generation
24    facilities that use indigenous coal or renewable
25    resources, or both, financed with bonds issued by the
26    Illinois Finance Authority.

 

 

09700SB1533sam001- 4 -LRB097 09938 ASK 51554 a

1        (D) Supply electricity from the Agency's facilities at
2    cost to one or more of the following: municipal electric
3    systems, governmental aggregators, or rural electric
4    cooperatives in Illinois.
5(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09.)
 
6    (20 ILCS 3855/1-20)
7    Sec. 1-20. General powers of the Agency.
8    (a) The Agency is authorized to do each of the following:
9        (1) Develop electricity procurement plans to ensure
10    adequate, reliable, affordable, efficient, and
11    environmentally sustainable electric service at the lowest
12    total cost over time, taking into account any benefits of
13    price stability, for electric utilities that on December
14    31, 2005 provided electric service to at least 100,000
15    customers in Illinois and for small multi-jurisdictional
16    electric utilities that (A) on December 31, 2005 served
17    less than 100,000 customers in Illinois and (B) request a
18    procurement plan for their Illinois jurisdictional load.
19    The procurement plans shall be updated on an annual basis
20    and shall include electricity generated from renewable
21    resources sufficient to achieve the standards specified in
22    this Act.
23        (2) Conduct competitive procurement processes to
24    procure the supply resources identified in the procurement
25    plan, pursuant to Section 16-111.5 of the Public Utilities

 

 

09700SB1533sam001- 5 -LRB097 09938 ASK 51554 a

1    Act.
2        (3) Develop electric generation and co-generation
3    facilities that use indigenous coal or renewable
4    resources, or both, financed with bonds issued by the
5    Illinois Finance Authority.
6        (4) Supply electricity from the Agency's facilities at
7    cost to one or more of the following: municipal electric
8    systems, governmental aggregators, or rural electric
9    cooperatives in Illinois.
10    (b) Except as otherwise limited by this Act, the Agency has
11all of the powers necessary or convenient to carry out the
12purposes and provisions of this Act, including without
13limitation, each of the following:
14        (1) To have a corporate seal, and to alter that seal at
15    pleasure, and to use it by causing it or a facsimile to be
16    affixed or impressed or reproduced in any other manner.
17        (2) To use the services of the Illinois Finance
18    Authority necessary to carry out the Agency's purposes.
19        (3) To negotiate and enter into loan agreements and
20    other agreements with the Illinois Finance Authority.
21        (4) To obtain and employ personnel and hire consultants
22    that are necessary to fulfill the Agency's purposes, and to
23    make expenditures for that purpose within the
24    appropriations for that purpose.
25        (5) To purchase, receive, take by grant, gift, devise,
26    bequest, or otherwise, lease, or otherwise acquire, own,

 

 

09700SB1533sam001- 6 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 7 -LRB097 09938 ASK 51554 a

1    including contracts with any person, local government,
2    State agency, or other entity; and all State agencies and
3    all local governments are authorized to enter into and do
4    all things necessary to perform any such agreement,
5    contract, or other instrument with the Agency. No such
6    agreement, contract, or other instrument shall exceed 40
7    years.
8        (10) To lend money, invest and reinvest its funds in
9    accordance with the Public Funds Investment Act, and take
10    and hold real and personal property as security for the
11    payment of funds loaned or invested.
12        (11) To borrow money at such rate or rates of interest
13    as the Agency may determine, issue its notes, bonds, or
14    other obligations to evidence that indebtedness, and
15    secure any of its obligations by mortgage or pledge of its
16    real or personal property, machinery, equipment,
17    structures, fixtures, inventories, revenues, grants, and
18    other funds as provided or any interest therein, wherever
19    situated.
20        (12) To enter into agreements with the Illinois Finance
21    Authority to issue bonds whether or not the income
22    therefrom is exempt from federal taxation.
23        (13) To procure insurance against any loss in
24    connection with its properties or operations in such amount
25    or amounts and from such insurers, including the federal
26    government, as it may deem necessary or desirable, and to

 

 

09700SB1533sam001- 8 -LRB097 09938 ASK 51554 a

1    pay any premiums therefor.
2        (14) To negotiate and enter into agreements with
3    trustees or receivers appointed by United States
4    bankruptcy courts or federal district courts or in other
5    proceedings involving adjustment of debts and authorize
6    proceedings involving adjustment of debts and authorize
7    legal counsel for the Agency to appear in any such
8    proceedings.
9        (15) To file a petition under Chapter 9 of Title 11 of
10    the United States Bankruptcy Code or take other similar
11    action for the adjustment of its debts.
12        (16) To enter into management agreements for the
13    operation of any of the property or facilities owned by the
14    Agency.
15        (17) To enter into an agreement to transfer and to
16    transfer any land, facilities, fixtures, or equipment of
17    the Agency to one or more municipal electric systems,
18    governmental aggregators, or rural electric agencies or
19    cooperatives, for such consideration and upon such terms as
20    the Agency may determine to be in the best interest of the
21    citizens of Illinois.
22        (18) To enter upon any lands and within any building
23    whenever in its judgment it may be necessary for the
24    purpose of making surveys and examinations to accomplish
25    any purpose authorized by this Act.
26        (19) To maintain an office or offices at such place or

 

 

09700SB1533sam001- 9 -LRB097 09938 ASK 51554 a

1    places in the State as it may determine.
2        (20) To request information, and to make any inquiry,
3    investigation, survey, or study that the Agency may deem
4    necessary to enable it effectively to carry out the
5    provisions of this Act.
6        (21) To accept and expend appropriations.
7        (22) To engage in any activity or operation that is
8    incidental to and in furtherance of efficient operation to
9    accomplish the Agency's purposes.
10        (23) To adopt, revise, amend, and repeal rules with
11    respect to its operations, properties, and facilities as
12    may be necessary or convenient to carry out the purposes of
13    this Act, subject to the provisions of the Illinois
14    Administrative Procedure Act and Sections 1-22 and 1-35 of
15    this Act.
16        (24) To establish and collect charges and fees as
17    described in this Act.
18        (25) To manage procurement of substitute natural gas
19    from a facility that meets the criteria specified in
20    subsection (a) of Section 1-58 of this Act, on terms and
21    conditions that may be approved by the Agency pursuant to
22    subsection (d) of Section 1-58 of this Act, to support the
23    operations of State agencies and local governments that
24    agree to such terms and conditions. This procurement
25    process is not subject to the Procurement Code.
26(Source: P.A. 95-481, eff. 8-28-07; 96-784, eff. 8-28-09;

 

 

09700SB1533sam001- 10 -LRB097 09938 ASK 51554 a

196-1000, eff. 7-2-10.)
 
2    (20 ILCS 3855/1-75)
3    Sec. 1-75. Planning and Procurement Bureau. The Planning
4and Procurement Bureau has the following duties and
5responsibilities:
6        (a) The Planning and Procurement Bureau shall each
7    year, beginning in 2008, develop procurement plans and
8    conduct competitive procurement processes in accordance
9    with the requirements of Section 16-111.5 of the Public
10    Utilities Act for the eligible retail customers of electric
11    utilities that on December 31, 2005 provided electric
12    service to at least 100,000 customers in Illinois. The
13    Planning and Procurement Bureau shall also develop
14    procurement plans and conduct competitive procurement
15    processes in accordance with the requirements of Section
16    16-111.5 of the Public Utilities Act for the eligible
17    retail customers of small multi-jurisdictional electric
18    utilities that (i) on December 31, 2005 served less than
19    100,000 customers in Illinois and (ii) request a
20    procurement plan for their Illinois jurisdictional load.
21    This Section shall not apply to a small
22    multi-jurisdictional utility until such time as a small
23    multi-jurisdictional utility requests the Agency to
24    prepare a procurement plan for their Illinois
25    jurisdictional load. For the purposes of this Section, the

 

 

09700SB1533sam001- 11 -LRB097 09938 ASK 51554 a

1    term "eligible retail customers" has the same definition as
2    found in Section 16-111.5(a) of the Public Utilities Act.
3            (1) The Agency shall each year, beginning in 2008,
4        as needed, issue a request for qualifications for
5        experts or expert consulting firms to develop the
6        procurement plans in accordance with Section 16-111.5
7        of the Public Utilities Act. In order to qualify an
8        expert or expert consulting firm must have:
9                (A) direct previous experience assembling
10            large-scale power supply plans or portfolios for
11            end-use customers;
12                (B) an advanced degree in economics,
13            mathematics, engineering, risk management, or a
14            related area of study;
15                (C) 10 years of experience in the electricity
16            sector, including managing supply risk;
17                (D) expertise in wholesale electricity market
18            rules, including those established by the Federal
19            Energy Regulatory Commission and regional
20            transmission organizations;
21                (E) expertise in credit protocols and
22            familiarity with contract protocols;
23                (F) adequate resources to perform and fulfill
24            the required functions and responsibilities; and
25                (G) the absence of a conflict of interest and
26            inappropriate bias for or against potential

 

 

09700SB1533sam001- 12 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 13 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 14 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 15 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 16 -LRB097 09938 ASK 51554 a

1        8% by June 1, 2013; at least 9% by June 1, 2014; at
2        least 10% by June 1, 2015; and increasing by at least
3        1.5% each year thereafter to at least 25% by June 1,
4        2025. To the extent that it is available, at least 75%
5        of the renewable energy resources used to meet these
6        standards shall come from wind generation and,
7        beginning on June 1, 2011, at least the following
8        percentages of the renewable energy resources used to
9        meet these standards shall come from photovoltaics on
10        the following schedule: 0.5% by June 1, 2012, 1.5% by
11        June 1, 2013; 3% by June 1, 2014; and 6% by June 1,
12        2015 and thereafter. For purposes of this subsection
13        (c), "cost-effective" means that the costs of
14        procuring renewable energy resources do not cause the
15        limit stated in paragraph (2) of this subsection (c) to
16        be exceeded and do not exceed benchmarks based on
17        market prices for renewable energy resources in the
18        region, which shall be developed by the procurement
19        administrator, in consultation with the Commission
20        staff, Agency staff, and the procurement monitor and
21        shall be subject to Commission review and approval.
22            (2) For purposes of this subsection (c), the
23        required procurement of cost-effective renewable
24        energy resources for a particular year shall be
25        measured as a percentage of the actual amount of
26        electricity (megawatt-hours) supplied by the electric

 

 

09700SB1533sam001- 17 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 18 -LRB097 09938 ASK 51554 a

1            of the amount paid per kilowatthour by those
2            customers during the year ending May 31, 2009 or
3            1.5% of the amount paid per kilowatthour by those
4            customers during the year ending May 31, 2007;
5                (D) in 2011, the greater of an additional 0.5%
6            of the amount paid per kilowatthour by those
7            customers during the year ending May 31, 2010 or 2%
8            of the amount paid per kilowatthour by those
9            customers during the year ending May 31, 2007; and
10                (E) thereafter, the amount of renewable energy
11            resources procured pursuant to the procurement
12            plan for any single year shall be reduced by an
13            amount necessary to limit the estimated average
14            net increase due to the cost of these resources
15            included in the amounts paid by eligible retail
16            customers in connection with electric service to
17            no more than the greater of 2.015% of the amount
18            paid per kilowatthour by those customers during
19            the year ending May 31, 2007 or the incremental
20            amount per kilowatthour paid for these resources
21            in 2011.
22            No later than June 30, 2011, the Commission shall
23        review the limitation on the amount of renewable energy
24        resources procured pursuant to this subsection (c) and
25        report to the General Assembly its findings as to
26        whether that limitation unduly constrains the

 

 

09700SB1533sam001- 19 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 20 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 21 -LRB097 09938 ASK 51554 a

1    (d) Clean coal portfolio standard.
2        (1) The procurement plans shall include electricity
3    generated using clean coal. Each utility shall enter into
4    one or more sourcing agreements with the initial clean coal
5    facility, as provided in paragraph (3) of this subsection
6    (d), covering electricity generated by the initial clean
7    coal facility representing at least 5% of each utility's
8    total supply to serve the load of eligible retail customers
9    in 2015 and each year thereafter, as described in paragraph
10    (3) of this subsection (d), subject to the limits specified
11    in paragraph (2) of this subsection (d). It is the goal of
12    the State that by January 1, 2025, 25% of the electricity
13    used in the State shall be generated by cost-effective
14    clean coal facilities. For purposes of this subsection (d),
15    "cost-effective" means that the expenditures pursuant to
16    such sourcing agreements do not cause the limit stated in
17    paragraph (2) of this subsection (d) to be exceeded and do
18    not exceed cost-based benchmarks, which shall be developed
19    to assess all expenditures pursuant to such sourcing
20    agreements covering electricity generated by clean coal
21    facilities, other than the initial clean coal facility, by
22    the procurement administrator, in consultation with the
23    Commission staff, Agency staff, and the procurement
24    monitor and shall be subject to Commission review and
25    approval.
26            (A) A utility party to a sourcing agreement shall

 

 

09700SB1533sam001- 22 -LRB097 09938 ASK 51554 a

1        immediately retire any emission credits that it
2        receives in connection with the electricity covered by
3        such agreement.
4            (B) Utilities shall maintain adequate records
5        documenting the purchases under the sourcing agreement
6        to comply with this subsection (d) and shall file an
7        accounting with the load forecast that must be filed
8        with the Agency by July 15 of each year, in accordance
9        with subsection (d) of Section 16-111.5 of the Public
10        Utilities Act.
11            (C) A utility shall be deemed to have complied with
12        the clean coal portfolio standard specified in this
13        subsection (d) if the utility enters into a sourcing
14        agreement as required by this subsection (d).
15        (2) For purposes of this subsection (d), the required
16    execution of sourcing agreements with the initial clean
17    coal facility for a particular year shall be measured as a
18    percentage of the actual amount of electricity
19    (megawatt-hours) supplied by the electric utility to
20    eligible retail customers in the planning year ending
21    immediately prior to the agreement's execution. For
22    purposes of this subsection (d), the amount paid per
23    kilowatthour means the total amount paid for electric
24    service expressed on a per kilowatthour basis. For purposes
25    of this subsection (d), the total amount paid for electric
26    service includes without limitation amounts paid for

 

 

09700SB1533sam001- 23 -LRB097 09938 ASK 51554 a

1    supply, transmission, distribution, surcharges and add-on
2    taxes.
3        Notwithstanding the requirements of this subsection
4    (d), the total amount paid under sourcing agreements with
5    clean coal facilities pursuant to the procurement plan for
6    any given year shall be reduced by an amount necessary to
7    limit the annual estimated average net increase due to the
8    costs of these resources included in the amounts paid by
9    eligible retail customers in connection with electric
10    service to:
11                (A) in 2010, no more than 0.5% of the amount
12            paid per kilowatthour by those customers during
13            the year ending May 31, 2009;
14                (B) in 2011, the greater of an additional 0.5%
15            of the amount paid per kilowatthour by those
16            customers during the year ending May 31, 2010 or 1%
17            of the amount paid per kilowatthour by those
18            customers during the year ending May 31, 2009;
19                (C) in 2012, the greater of an additional 0.5%
20            of the amount paid per kilowatthour by those
21            customers during the year ending May 31, 2011 or
22            1.5% of the amount paid per kilowatthour by those
23            customers during the year ending May 31, 2009;
24                (D) in 2013, the greater of an additional 0.5%
25            of the amount paid per kilowatthour by those
26            customers during the year ending May 31, 2012 or 2%

 

 

09700SB1533sam001- 24 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 25 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 26 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 27 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 28 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 29 -LRB097 09938 ASK 51554 a

1                (ii) provide that the utility's payment
2            obligation in respect of the quantity of
3            electricity determined pursuant to the preceding
4            clause (i) shall be limited to an amount equal to
5            (1) the difference between the contract price
6            determined pursuant to subparagraph (A) of
7            paragraph (3) of this subsection (d) and the
8            day-ahead price for electricity delivered to the
9            regional transmission organization market of the
10            utility that is party to such sourcing agreement
11            (or any successor delivery point at which such
12            utility's supply obligations are financially
13            settled on an hourly basis) (the "reference
14            price") on the day preceding the day on which the
15            electricity is delivered to the initial clean coal
16            facility busbar, multiplied by (2) the quantity of
17            electricity determined pursuant to the preceding
18            clause (i); and
19                (iii) not require the utility to take physical
20            delivery of the electricity produced by the
21            facility;
22            (D) general provisions, which shall:
23                (i) specify a term of no more than 30 years,
24            commencing on the commercial operation date of the
25            facility;
26                (ii) provide that utilities shall maintain

 

 

09700SB1533sam001- 30 -LRB097 09938 ASK 51554 a

1            adequate records documenting purchases under the
2            sourcing agreements entered into to comply with
3            this subsection (d) and shall file an accounting
4            with the load forecast that must be filed with the
5            Agency by July 15 of each year, in accordance with
6            subsection (d) of Section 16-111.5 of the Public
7            Utilities Act.
8                (iii) provide that all costs associated with
9            the initial clean coal facility will be
10            periodically reported to the Federal Energy
11            Regulatory Commission and to purchasers in
12            accordance with applicable laws governing
13            cost-based wholesale power contracts;
14                (iv) permit the Illinois Power Agency to
15            assume ownership of the initial clean coal
16            facility, without monetary consideration and
17            otherwise on reasonable terms acceptable to the
18            Agency, if the Agency so requests no less than 3
19            years prior to the end of the stated contract term;
20                (v) require the owner of the initial clean coal
21            facility to provide documentation to the
22            Commission each year, starting in the facility's
23            first year of commercial operation, accurately
24            reporting the quantity of carbon emissions from
25            the facility that have been captured and
26            sequestered and report any quantities of carbon

 

 

09700SB1533sam001- 31 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 32 -LRB097 09938 ASK 51554 a

1            carbon sequestration requirements in any given
2            year, provided the requisite offsets are
3            purchased. However, the Attorney General, on
4            behalf of the People of the State of Illinois, may
5            specifically enforce the facility's sequestration
6            requirement and the other terms of this contract
7            provision. Compliance with the sequestration
8            requirements and offset purchase requirements
9            specified in paragraph (3) of this subsection (d)
10            shall be reviewed annually by an independent
11            expert retained by the owner of the initial clean
12            coal facility, with the advance written approval
13            of the Attorney General. The Commission may, in the
14            course of the review specified in item (vii),
15            reduce the allowable return on equity for the
16            facility if the facility wilfully fails to comply
17            with the carbon capture and sequestration
18            requirements set forth in this item (v);
19                (vi) include limits on, and accordingly
20            provide for modification of, the amount the
21            utility is required to source under the sourcing
22            agreement consistent with paragraph (2) of this
23            subsection (d);
24                (vii) require Commission review: (1) to
25            determine the justness, reasonableness, and
26            prudence of the inputs to the formula referenced in

 

 

09700SB1533sam001- 33 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 34 -LRB097 09938 ASK 51554 a

1            initial clean coal facility, which is the
2            counterparty to such sourcing agreement, shall
3            have the right from time to time to elect whether
4            the obligations of the utility party thereto shall
5            be governed by the power purchase provisions or the
6            contract for differences provisions;
7                (xi) append documentation showing that the
8            formula rate and contract, insofar as they relate
9            to the power purchase provisions, have been
10            approved by the Federal Energy Regulatory
11            Commission pursuant to Section 205 of the Federal
12            Power Act;
13                (xii) provide that any changes to the terms of
14            the contract, insofar as such changes relate to the
15            power purchase provisions, are subject to review
16            under the public interest standard applied by the
17            Federal Energy Regulatory Commission pursuant to
18            Sections 205 and 206 of the Federal Power Act; and
19                (xiii) conform with customary lender
20            requirements in power purchase agreements used as
21            the basis for financing non-utility generators.
22        (4) Effective date of sourcing agreements with the
23    initial clean coal facility. Any proposed sourcing
24    agreement with the initial clean coal facility shall not
25    become effective unless the following reports are prepared
26    and submitted and authorizations and approvals obtained:

 

 

09700SB1533sam001- 35 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 36 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 37 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 38 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 39 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 40 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 41 -LRB097 09938 ASK 51554 a

1    sourcing agreements that are power purchase agreements,
2    the contract price for electricity sales shall be
3    established on a cost of service basis. In the case of
4    sourcing agreements that are contracts for differences,
5    the contract price from which the reference price is
6    subtracted shall be established on a cost of service basis.
7    The Agency and the Commission may approve any such utility
8    sourcing agreements that do not exceed cost-based
9    benchmarks developed by the procurement administrator, in
10    consultation with the Commission staff, Agency staff and
11    the procurement monitor, subject to Commission review and
12    approval. The Commission shall have authority to inspect
13    all books and records associated with these clean coal
14    facilities during the term of any such contract.
15        (6) Costs incurred under this subsection (d) or
16    pursuant to a contract entered into under this subsection
17    (d) shall be deemed prudently incurred and reasonable in
18    amount and the electric utility shall be entitled to full
19    cost recovery pursuant to the tariffs filed with the
20    Commission.
21        (e) The draft procurement plans are subject to public
22    comment, as required by Section 16-111.5 of the Public
23    Utilities Act.
24        (f) The Agency shall submit the final procurement plan
25    to the Commission. The Agency shall revise a procurement
26    plan if the Commission determines that it does not meet the

 

 

09700SB1533sam001- 42 -LRB097 09938 ASK 51554 a

1    standards set forth in Section 16-111.5 of the Public
2    Utilities Act.
3        (g) The Agency shall assess fees to each affected
4    utility to recover the costs incurred in preparation of the
5    annual procurement plan for the utility.
6        (h) The Agency shall assess fees to each bidder to
7    recover the costs incurred in connection with a competitive
8    procurement process.
9(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09;
1096-159, eff. 8-10-09; 96-1437, eff. 8-17-10.)
 
11    Section 10. The Public Utilities Act is amended by changing
12Section 16-111.5 as follows:
 
13    (220 ILCS 5/16-111.5)
14    Sec. 16-111.5. Provisions relating to procurement.
15    (a) An electric utility that on December 31, 2005 served at
16least 100,000 customers in Illinois shall procure power and
17energy for its eligible retail customers in accordance with the
18applicable provisions set forth in Section 1-75 of the Illinois
19Power Agency Act and this Section. A small multi-jurisdictional
20electric utility that on December 31, 2005 served less than
21100,000 customers in Illinois may elect to procure power and
22energy for all or a portion of its eligible Illinois retail
23customers in accordance with the applicable provisions set
24forth in this Section and Section 1-75 of the Illinois Power

 

 

09700SB1533sam001- 43 -LRB097 09938 ASK 51554 a

1Agency Act. This Section shall not apply to a small
2multi-jurisdictional utility until such time as a small
3multi-jurisdictional utility requests the Illinois Power
4Agency to prepare a procurement plan for its eligible retail
5customers. "Eligible retail customers" for the purposes of this
6Section means those retail customers that purchase power and
7energy from the electric utility under fixed-price bundled
8service tariffs, other than those retail customers whose
9service is declared or deemed competitive under Section 16-113
10and those other customer groups specified in this Section,
11including self-generating customers, customers electing hourly
12pricing, or those customers who are otherwise ineligible for
13fixed-price bundled tariff service. Those customers that are
14excluded from the definition of "eligible retail customers"
15shall not be included in the procurement plan load
16requirements, and the utility shall procure any supply
17requirements, including capacity, ancillary services, and
18hourly priced energy, in the applicable markets as needed to
19serve those customers, provided that the utility may include in
20its procurement plan load requirements for the load that is
21associated with those retail customers whose service has been
22declared or deemed competitive pursuant to Section 16-113 of
23this Act to the extent that those customers are purchasing
24power and energy during one of the transition periods
25identified in subsection (b) of Section 16-113 of this Act.
26    (b) A procurement plan shall be prepared for each electric

 

 

09700SB1533sam001- 44 -LRB097 09938 ASK 51554 a

1utility consistent with the applicable requirements of the
2Illinois Power Agency Act and this Section. For purposes of
3this Section, Illinois electric utilities that are affiliated
4by virtue of a common parent company are considered to be a
5single electric utility. Small multi-jurisdictional utilities
6may request a procurement plan for a portion of or all of its
7Illinois load. Each procurement plan shall analyze the
8projected balance of supply and demand for eligible retail
9customers over a 5-year period with the first planning year
10beginning on June 1 of the year following the year in which the
11plan is filed. The plan shall specifically identify the
12wholesale products to be procured following plan approval, and
13shall follow all the requirements set forth in the Public
14Utilities Act and all applicable State and federal laws,
15statutes, rules, or regulations, as well as Commission orders.
16Nothing in this Section precludes consideration of contracts
17longer than 5 years and related forecast data. Unless specified
18otherwise in this Section, in the procurement plan or in the
19implementing tariff, any procurement occurring in accordance
20with this plan shall be competitively bid through a request for
21proposals process. Approval and implementation of the
22procurement plan shall be subject to review and approval by the
23Commission according to the provisions set forth in this
24Section. A procurement plan shall include each of the following
25components:
26        (1) Hourly load analysis. This analysis shall include:

 

 

09700SB1533sam001- 45 -LRB097 09938 ASK 51554 a

1            (i) multi-year historical analysis of hourly
2        loads;
3            (ii) switching trends and competitive retail
4        market analysis;
5            (iii) known or projected changes to future loads;
6        and
7            (iv) growth forecasts by customer class.
8        (2) Analysis of the impact of any demand side and
9    renewable energy initiatives. This analysis shall include:
10            (i) the impact of demand response programs and
11        energy efficiency programs, both current and
12        projected; for small multi-jurisdictional utilities,
13        the impact of demand response and energy efficiency
14        programs approved pursuant to Section 8-408 of this
15        Act, both current and projected; and
16            (ii) supply side needs that are projected to be
17        offset by purchases of renewable energy resources, if
18        any. ; and
19            (iii) the impact of energy efficiency programs,
20        both current and projected.
21        (3) A plan for meeting the expected load requirements
22    that will not be met through preexisting contracts. This
23    plan shall include:
24            (i) definitions of the different Illinois retail
25        customer classes for which supply is being purchased;
26            (ii) the proposed mix of demand-response products

 

 

09700SB1533sam001- 46 -LRB097 09938 ASK 51554 a

1        for which contracts will be executed during the next
2        year. For small multi-jurisdictional electric
3        utilities that on December 31, 2005 served fewer than
4        100,000 customers in Illinois, these shall be defined
5        as demand-response products offered in an energy
6        efficiency plan approved pursuant to Section 8-408 of
7        this Act. The cost-effective demand-response measures
8        shall be procured whenever the cost is lower than
9        procuring comparable capacity products, provided that
10        such products shall:
11                (A) be procured by a demand-response provider
12            from eligible retail customers;
13                (B) at least satisfy the demand-response
14            requirements of the regional transmission
15            organization market in which the utility's service
16            territory is located, including, but not limited
17            to, any applicable capacity or dispatch
18            requirements;
19                (C) provide for customers' participation in
20            the stream of benefits produced by the
21            demand-response products;
22                (D) provide for reimbursement by the
23            demand-response provider of the utility for any
24            costs incurred as a result of the failure of the
25            supplier of such products to perform its
26            obligations thereunder; and

 

 

09700SB1533sam001- 47 -LRB097 09938 ASK 51554 a

1                (E) meet the same credit requirements as apply
2            to suppliers of capacity, in the applicable
3            regional transmission organization market;
4            (iii) monthly forecasted system supply
5        requirements, including expected minimum, maximum, and
6        average values for the planning period;
7            (iv) the proposed mix and selection of standard
8        wholesale products for which contracts will be
9        executed during the next year, separately or in
10        combination, to meet that portion of its load
11        requirements not met through pre-existing contracts,
12        including but not limited to monthly 5 x 16 peak period
13        block energy, monthly off-peak wrap energy, monthly 7 x
14        24 energy, annual 5 x 16 energy, annual off-peak wrap
15        energy, annual 7 x 24 energy, monthly capacity, annual
16        capacity, peak load capacity obligations, capacity
17        purchase plan, and ancillary services;
18            (v) proposed term structures for each wholesale
19        product type included in the proposed procurement plan
20        portfolio of products; and
21            (vi) an assessment of the price risk, load
22        uncertainty, and other factors that are associated
23        with the proposed procurement plan; this assessment,
24        to the extent possible, shall include an analysis of
25        the following factors: contract terms, time frames for
26        securing products or services, fuel costs, weather

 

 

09700SB1533sam001- 48 -LRB097 09938 ASK 51554 a

1        patterns, transmission costs, market conditions, and
2        the governmental regulatory environment; the proposed
3        procurement plan shall also identify alternatives for
4        those portfolio measures that are identified as having
5        significant price risk.
6        (4) Proposed procedures for balancing loads. The
7    procurement plan shall include, for load requirements
8    included in the procurement plan, the process for (i)
9    hourly balancing of supply and demand and (ii) the criteria
10    for portfolio re-balancing in the event of significant
11    shifts in load.
12    (c) The procurement process set forth in Section 1-75 of
13the Illinois Power Agency Act and subsection (e) of this
14Section shall be administered by a procurement administrator
15and monitored by a procurement monitor.
16        (1) The procurement administrator shall:
17            (i) design the final procurement process in
18        accordance with Section 1-75 of the Illinois Power
19        Agency Act and subsection (e) of this Section following
20        Commission approval of the procurement plan;
21            (ii) develop benchmarks in accordance with
22        subsection (e)(3) to be used to evaluate bids; these
23        benchmarks shall be submitted to the Commission for
24        review and approval on a confidential basis prior to
25        the procurement event;
26            (iii) serve as the interface between the electric

 

 

09700SB1533sam001- 49 -LRB097 09938 ASK 51554 a

1        utility and suppliers;
2            (iv) manage the bidder pre-qualification and
3        registration process;
4            (v) obtain the electric utilities' agreement to
5        the final form of all supply contracts and credit
6        collateral agreements;
7            (vi) administer the request for proposals process;
8            (vii) have the discretion to negotiate to
9        determine whether bidders are willing to lower the
10        price of bids that meet the benchmarks approved by the
11        Commission; any post-bid negotiations with bidders
12        shall be limited to price only and shall be completed
13        within 24 hours after opening the sealed bids and shall
14        be conducted in a fair and unbiased manner; in
15        conducting the negotiations, there shall be no
16        disclosure of any information derived from proposals
17        submitted by competing bidders; if information is
18        disclosed to any bidder, it shall be provided to all
19        competing bidders;
20            (viii) maintain confidentiality of supplier and
21        bidding information in a manner consistent with all
22        applicable laws, rules, regulations, and tariffs;
23            (ix) submit a confidential report to the
24        Commission recommending acceptance or rejection of
25        bids;
26            (x) notify the utility of contract counterparties

 

 

09700SB1533sam001- 50 -LRB097 09938 ASK 51554 a

1        and contract specifics; and
2            (xi) administer related contingency procurement
3        events.
4        (2) The procurement monitor, who shall be retained by
5    the Commission, shall:
6            (i) monitor interactions among the procurement
7        administrator, suppliers, and utility;
8            (ii) monitor and report to the Commission on the
9        progress of the procurement process;
10            (iii) provide an independent confidential report
11        to the Commission regarding the results of the
12        procurement event;
13            (iv) assess compliance with the procurement plans
14        approved by the Commission for each utility that on
15        December 31, 2005 provided electric service to a least
16        100,000 customers in Illinois and for each small
17        multi-jurisdictional utility that on December 31, 2005
18        served less than 100,000 customers in Illinois;
19            (v) preserve the confidentiality of supplier and
20        bidding information in a manner consistent with all
21        applicable laws, rules, regulations, and tariffs;
22            (vi) provide expert advice to the Commission and
23        consult with the procurement administrator regarding
24        issues related to procurement process design, rules,
25        protocols, and policy-related matters; and
26            (vii) consult with the procurement administrator

 

 

09700SB1533sam001- 51 -LRB097 09938 ASK 51554 a

1        regarding the development and use of benchmark
2        criteria, standard form contracts, credit policies,
3        and bid documents.
4    (d) Except as provided in subsection (j), the planning
5process shall be conducted as follows:
6        (1) Beginning in 2008, each Illinois utility procuring
7    power pursuant to this Section shall annually provide a
8    range of load forecasts to the Illinois Power Agency by
9    July 15 of each year, or such other date as may be required
10    by the Commission or Agency. The load forecasts shall cover
11    the 5-year procurement planning period for the next
12    procurement plan and shall include hourly data
13    representing a high-load, low-load and expected-load
14    scenario for the load of the eligible retail customers. The
15    utility shall provide supporting data and assumptions for
16    each of the scenarios.
17        (2) Beginning in 2008, the Illinois Power Agency shall
18    prepare a procurement plan by August 15th of each year, or
19    such other date as may be required by the Commission. The
20    procurement plan shall identify the portfolio of
21    demand-response and power and energy products to be
22    procured. Cost-effective demand-response measures shall be
23    procured as set forth in item (iii) of subsection (b) of
24    this Section. Copies of the procurement plan shall be
25    posted and made publicly available on the Agency's and
26    Commission's websites, and copies shall also be provided to

 

 

09700SB1533sam001- 52 -LRB097 09938 ASK 51554 a

1    each affected electric utility. An affected utility shall
2    have 30 days following the date of posting to provide
3    comment to the Agency on the procurement plan. Other
4    interested entities also may comment on the procurement
5    plan. All comments submitted to the Agency shall be
6    specific, supported by data or other detailed analyses,
7    and, if objecting to all or a portion of the procurement
8    plan, accompanied by specific alternative wording or
9    proposals. All comments shall be posted on the Agency's and
10    Commission's websites. During this 30-day comment period,
11    the Agency shall hold at least one public hearing within
12    each utility's service area for the purpose of receiving
13    public comment on the procurement plan. Within 14 days
14    following the end of the 30-day review period, the Agency
15    shall revise the procurement plan as necessary based on the
16    comments received and file the procurement plan with the
17    Commission and post the procurement plan on the websites.
18        (3) Within 5 days after the filing of the procurement
19    plan, any person objecting to the procurement plan shall
20    file an objection with the Commission. Within 10 days after
21    the filing, the Commission shall determine whether a
22    hearing is necessary. The Commission shall enter its order
23    confirming or modifying the procurement plan within 90 days
24    after the filing of the procurement plan by the Illinois
25    Power Agency.
26        (4) The Commission shall approve the procurement plan,

 

 

09700SB1533sam001- 53 -LRB097 09938 ASK 51554 a

1    including expressly the forecast used in the procurement
2    plan, if the Commission determines that it will ensure
3    adequate, reliable, affordable, efficient, and
4    environmentally sustainable electric service at the lowest
5    total cost over time, taking into account any benefits of
6    price stability.
7    (e) The procurement process shall include each of the
8following components:
9        (1) Solicitation, pre-qualification, and registration
10    of bidders. The procurement administrator shall
11    disseminate information to potential bidders to promote a
12    procurement event, notify potential bidders that the
13    procurement administrator may enter into a post-bid price
14    negotiation with bidders that meet the applicable
15    benchmarks, provide supply requirements, and otherwise
16    explain the competitive procurement process. In addition
17    to such other publication as the procurement administrator
18    determines is appropriate, this information shall be
19    posted on the Illinois Power Agency's and the Commission's
20    websites. The procurement administrator shall also
21    administer the prequalification process, including
22    evaluation of credit worthiness, compliance with
23    procurement rules, and agreement to the standard form
24    contract developed pursuant to paragraph (2) of this
25    subsection (e). The procurement administrator shall then
26    identify and register bidders to participate in the

 

 

09700SB1533sam001- 54 -LRB097 09938 ASK 51554 a

1    procurement event.
2        (2) Standard contract forms and credit terms and
3    instruments. The procurement administrator, in
4    consultation with the utilities, the Commission, and other
5    interested parties and subject to Commission oversight,
6    shall develop and provide standard contract forms for the
7    supplier contracts that meet generally accepted industry
8    practices. Standard credit terms and instruments that meet
9    generally accepted industry practices shall be similarly
10    developed. The procurement administrator shall make
11    available to the Commission all written comments it
12    receives on the contract forms, credit terms, or
13    instruments. If the procurement administrator cannot reach
14    agreement with the applicable electric utility as to the
15    contract terms and conditions, the 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 procurement process, the
24    procurement administrator, in consultation with the
25    Commission staff, Agency staff, and the procurement
26    monitor, shall establish benchmarks for evaluating the

 

 

09700SB1533sam001- 55 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 56 -LRB097 09938 ASK 51554 a

1            (i) Event of supplier default: In the event of
2        supplier default, the utility shall review the
3        contract of the defaulting supplier to determine if the
4        amount of supply is 200 megawatts or greater, and if
5        there are more than 60 days remaining of the contract
6        term. If both of these conditions are met, and the
7        default results in termination of the contract, the
8        utility shall immediately notify the Illinois Power
9        Agency that a request for proposals must be issued to
10        procure replacement power, and the procurement
11        administrator shall run an additional procurement
12        event. If the contracted supply of the defaulting
13        supplier is less than 200 megawatts or there are less
14        than 60 days remaining of the contract term, the
15        utility shall procure power and energy from the
16        applicable regional transmission organization market,
17        including ancillary services, capacity, and day-ahead
18        or real time energy, or both, for the duration of the
19        contract term to replace the contracted supply;
20        provided, however, that if a needed product is not
21        available through the regional transmission
22        organization market it shall be purchased from the
23        wholesale market.
24            (ii) Failure of the procurement process to fully
25        meet the expected load requirement: If the procurement
26        process fails to fully meet the expected load

 

 

09700SB1533sam001- 57 -LRB097 09938 ASK 51554 a

1        requirement due to insufficient supplier participation
2        or due to a Commission rejection of the procurement
3        results, the procurement administrator, the
4        procurement monitor, and the Commission staff shall
5        meet within 10 days to analyze potential causes of low
6        supplier interest or causes for the Commission
7        decision. If changes are identified that would likely
8        result in increased supplier participation, or that
9        would address concerns causing the Commission to
10        reject the results of the prior procurement event, the
11        procurement administrator may implement those changes
12        and rerun the request for proposals process according
13        to a schedule determined by those parties and
14        consistent with Section 1-75 of the Illinois Power
15        Agency Act and this subsection. In any event, a new
16        request for proposals process shall be implemented by
17        the procurement administrator within 90 days after the
18        determination that the procurement process has failed
19        to fully meet the expected load requirement.
20            (iii) In all cases where there is insufficient
21        supply provided under contracts awarded through the
22        procurement process to fully meet the electric
23        utility's load requirement, the utility shall meet the
24        load requirement by procuring power and energy from the
25        applicable regional transmission organization market,
26        including ancillary services, capacity, and day-ahead

 

 

09700SB1533sam001- 58 -LRB097 09938 ASK 51554 a

1        or real time energy or both; provided, however, that if
2        a needed product is not available through the regional
3        transmission organization market it shall be purchased
4        from the wholesale market.
5        (6) The procurement process described in this
6    subsection is exempt from the requirements of the Illinois
7    Procurement Code, pursuant to Section 20-10 of that Code.
8    (f) Within 2 business days after opening the sealed bids,
9the procurement administrator shall submit a confidential
10report to the Commission. The report shall contain the results
11of the bidding for each of the products along with the
12procurement administrator's recommendation for the acceptance
13and rejection of bids based on the price benchmark criteria and
14other factors observed in the process. The procurement monitor
15also shall submit a confidential report to the Commission
16within 2 business days after opening the sealed bids. The
17report shall contain the procurement monitor's assessment of
18bidder behavior 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 within 2
24business days after receipt of the reports.
25    (g) Within 3 business days after the Commission decision
26approving the results of a procurement event, the utility shall

 

 

09700SB1533sam001- 59 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 60 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 61 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 62 -LRB097 09938 ASK 51554 a

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

 

 

09700SB1533sam001- 63 -LRB097 09938 ASK 51554 a

1procurement plan its proposed tariffs through which its costs
2of procuring power that are incurred pursuant to a
3Commission-approved procurement plan and those other costs
4identified in this subsection (l), will be recovered. The
5tariffs shall include a formula rate or charge designed to pass
6through both the costs incurred by the utility in procuring a
7supply of electric power and energy for the applicable customer
8classes with no mark-up or return on the price paid by the
9utility for that supply, plus any just and reasonable costs
10that the utility incurs in arranging and providing for the
11supply of electric power and energy. The formula rate or charge
12shall also contain provisions that ensure that its application
13does not result in over or under recovery due to changes in
14customer usage and demand patterns, and that provide for the
15correction, on at least an annual basis, of any accounting
16errors that may occur. A utility shall recover through the
17tariff all reasonable costs incurred to implement or comply
18with any procurement plan that is developed and put into effect
19pursuant to Section 1-75 of the Illinois Power Agency Act and
20this Section, including any fees assessed by the Illinois Power
21Agency, costs associated with load balancing, and contingency
22plan costs. The electric utility shall also recover its full
23costs of procuring electric supply for which it contracted
24before the effective date of this Section in conjunction with
25the provision of full requirements service under fixed-price
26bundled service tariffs subsequent to December 31, 2006. All

 

 

09700SB1533sam001- 64 -LRB097 09938 ASK 51554 a

1such costs shall be deemed to have been prudently incurred. The
2pass-through tariffs that are filed and approved pursuant to
3this Section shall not be subject to review under, or in any
4way limited by, Section 16-111(i) of this Act.
5    (m) The Commission has the authority to adopt rules to
6carry out the provisions of this Section. For the public
7interest, safety, and welfare, the Commission also has
8authority to adopt rules to carry out the provisions of this
9Section on an emergency basis immediately following the
10effective date of this amendatory Act.
11    (n) Notwithstanding any other provision of this Act, any
12affiliated electric utilities that submit a single procurement
13plan covering their combined needs may procure for those
14combined needs in conjunction with that plan, and may enter
15jointly into power supply contracts, purchases, and other
16procurement arrangements, and allocate capacity and energy and
17cost responsibility therefor among themselves in proportion to
18their requirements.
19    (o) On or before June 1 of each year, the Commission shall
20hold an informal hearing for the purpose of receiving comments
21on the prior year's procurement process and any recommendations
22for change.
23    (p) An electric utility subject to this Section may propose
24to invest, lease, own, or operate an electric generation
25facility as part of its procurement plan, provided the utility
26demonstrates that such facility is the least-cost option to

 

 

09700SB1533sam001- 65 -LRB097 09938 ASK 51554 a

1provide electric service to eligible retail customers. If the
2facility is shown to be the least-cost option and is included
3in a procurement plan prepared in accordance with Section 1-75
4of the Illinois Power Agency Act and this Section, then the
5electric utility shall make a filing pursuant to Section 8-406
6of the Act, and may request of the Commission any statutory
7relief required thereunder. If the Commission grants all of the
8necessary approvals for the proposed facility, such supply
9shall thereafter be considered as a pre-existing contract under
10subsection (b) of this Section. The Commission shall in any
11order approving a proposal under this subsection specify how
12the utility will recover the prudently incurred costs of
13investing in, leasing, owning, or operating such generation
14facility through just and reasonable rates charged to eligible
15retail customers. Cost recovery for facilities included in the
16utility's procurement plan pursuant to this subsection shall
17not be subject to review under or in any way limited by the
18provisions of Section 16-111(i) of this Act. Nothing in this
19Section is intended to prohibit a utility from filing for a
20fuel adjustment clause as is otherwise permitted under Section
219-220 of this Act.
22(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.".