98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB2191

 

Introduced 2/15/2013, by Sen. Mike Jacobs

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3501/825-65
20 ILCS 3855/1-10

    Amends the Illinois Finance Authority Act and the Illinois Power Agency Act. Provides that under those Acts energy efficiency measures include a reduction in the amount of heat rate. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2191LRB098 09715 JLS 39864 b

1    AN ACT concerning energy.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Finance Authority Act is amended by
5changing Section 825-65 as follows:
 
6    (20 ILCS 3501/825-65)
7    Sec. 825-65. Clean Coal, Coal, Energy Efficiency, and
8Renewable Energy Project Financing.
9    (a) Findings and declaration of policy.
10        (i) It is hereby found and declared that Illinois has
11    abundant coal resources and, in some areas of Illinois, the
12    demand for power exceeds the generating capacity.
13    Incentives to encourage the construction of coal-fueled
14    electric generating plants in Illinois to ensure power
15    generating capacity into the future and to advance clean
16    coal technology and the use of Illinois coal are in the
17    best interests of all of the citizens of Illinois.
18        (ii) It is further found and declared that Illinois has
19    abundant potential and resources to develop renewable
20    energy resource projects and that there are many
21    opportunities to invest in cost-effective energy
22    efficiency projects throughout the State. The development
23    of those projects will create jobs and investment as well

 

 

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1    as decrease environmental impacts and promote energy
2    independence in Illinois. Accordingly, the development of
3    those projects is in the best interests of all of the
4    citizens of Illinois.
5        (iii) The Authority is authorized to issue bonds to
6    help finance Clean Coal, Coal, Energy Efficiency, and
7    Renewable Energy projects pursuant to this Section.
8    (b) Definitions.
9        (i) "Clean Coal Project" means (A) "clean coal
10    facility", as defined in Section 1-10 of the Illinois Power
11    Agency Act; (B) "clean coal SNG facility", as defined in
12    Section 1-10 of the Illinois Power Agency Act; (C)
13    transmission lines and associated equipment that transfer
14    electricity from points of supply to points of delivery for
15    projects described in this subsection (b); (D) pipelines or
16    other methods to transfer carbon dioxide from the point of
17    production to the point of storage or sequestration for
18    projects described in this subsection (b); or (E) projects
19    to provide carbon abatement technology for existing
20    generating facilities.
21        (ii) "Coal Project" means new electric generating
22    facilities or new gasification facilities, as defined in
23    Section 605-332 of the Department of Commerce and Economic
24    Opportunity Law of the Civil Administrative Code of
25    Illinois, which may include mine-mouth power plants,
26    projects that employ the use of clean coal technology,

 

 

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1    projects to provide scrubber technology for existing
2    energy generating plants, or projects to provide electric
3    transmission facilities or new gasification facilities.
4        (iii) "Energy Efficiency Project" means measures that
5    reduce the amount of electricity, or natural gas, or heat
6    rate required to achieve a given end use, consistent with
7    Section 1-10 of the Illinois Power Agency Act.
8        (iv) "Renewable Energy Project" means (A) a project
9    that uses renewable energy resources, as defined in Section
10    1-10 of the Illinois Power Agency Act; (B) a project that
11    uses environmentally preferable technologies and practices
12    that result in improvements to the production of renewable
13    fuels, including but not limited to, cellulosic
14    conversion, water and energy conservation, fractionation,
15    alternative feedstocks, or reduced green house gas
16    emissions; (C) transmission lines and associated equipment
17    that transfer electricity from points of supply to points
18    of delivery for projects described in this subsection (b);
19    or (D) projects that use technology for the storage of
20    renewable energy, including, without limitation, the use
21    of battery or electrochemical storage technology for
22    mobile or stationary applications.
23    (c) Creation of reserve funds. The Authority may establish
24and maintain one or more reserve funds to enhance bonds issued
25by the Authority for a Clean Coal Project, a Coal Project, an
26Energy Efficiency Project, or a Renewable Energy Project. There

 

 

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1may be one or more accounts in these reserve funds in which
2there may be deposited:
3        (1) any proceeds of the bonds issued by the Authority
4    required to be deposited therein by the terms of any
5    contract between the Authority and its bondholders or any
6    resolution of the Authority;
7        (2) any other moneys or funds of the Authority that it
8    may determine to deposit therein from any other source; and
9        (3) any other moneys or funds made available to the
10    Authority. Subject to the terms of any pledge to the owners
11    of any bonds, moneys in any reserve fund may be held and
12    applied to the payment of principal, premium, if any, and
13    interest of such bonds.
14    (d) Powers and duties. The Authority has the power:
15        (1) To issue bonds in one or more series pursuant to
16    one or more resolutions of the Authority for any Clean Coal
17    Project, Coal Project, Energy Efficiency Project, or
18    Renewable Energy Project authorized under this Section,
19    within the authorization set forth in subsection (e).
20        (2) To provide for the funding of any reserves or other
21    funds or accounts deemed necessary by the Authority in
22    connection with any bonds issued by the Authority.
23        (3) To pledge any funds of the Authority or funds made
24    available to the Authority that may be applied to such
25    purpose as security for any bonds or any guarantees,
26    letters of credit, insurance contracts or similar credit

 

 

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1    support or liquidity instruments securing the bonds.
2        (4) To enter into agreements or contracts with third
3    parties, whether public or private, including, without
4    limitation, the United States of America, the State or any
5    department or agency thereof, to obtain any
6    appropriations, grants, loans or guarantees that are
7    deemed necessary or desirable by the Authority. Any such
8    guarantee, agreement or contract may contain terms and
9    provisions necessary or desirable in connection with the
10    program, subject to the requirements established by the
11    Act.
12        (5) To exercise such other powers as are necessary or
13    incidental to the foregoing.
14    (e) Clean Coal Project, Coal Project, Energy Efficiency
15Project, and Renewable Energy Project bond authorization and
16financing limits. In addition to any other bonds authorized to
17be issued under Sections 801-40(w), 825-60, 830-25 and 845-5,
18the Authority may have outstanding, at any time, bonds for the
19purpose enumerated in this Section 825-65 in an aggregate
20principal amount that shall not exceed $3,000,000,000, subject
21to the following limitations: (i) up to $300,000,000 may be
22issued to finance projects, as described in clause (C) of
23subsection (b)(i) and clause (C) of subsection (b)(iv) of this
24Section 825-65; (ii) up to $500,000,000 may be issued to
25finance projects, as described in clauses (D) and (E) of
26subsection (b)(i) of this Section 825-65; (iii) up to

 

 

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1$2,000,000,000 may be issued to finance Clean Coal Projects, as
2described in clauses (A) and (B) of subsection (b)(i) of this
3Section 825-65 and Coal Projects, as described in subsection
4(b)(ii) of this Section 825-65; and (iv) up to $2,000,000,000
5may be issued to finance Energy Efficiency Projects, as
6described in subsection (b)(iii) of this Section 825-65 and
7Renewable Energy Projects, as described in clauses (A), (B),
8and (D) of subsection (b)(iii) of this Section 825-65. An
9application for a loan financed from bond proceeds from a
10borrower or its affiliates for a Clean Coal Project, a Coal
11Project, Energy Efficiency Project, or a Renewable Energy
12Project may not be approved by the Authority for an amount in
13excess of $450,000,000 for any borrower or its affiliates.
14These bonds shall not constitute an indebtedness or obligation
15of the State of Illinois and it shall be plainly stated on the
16face of each bond that it does not constitute an indebtedness
17or obligation of the State of Illinois, but is payable solely
18from the revenues, income or other assets of the Authority
19pledged therefor.
20    (f) The bonding authority granted under this Section is in
21addition to and not limited by the provisions of Section 845-5.
22(Source: P.A. 95-470, eff. 8-27-07; 96-103, eff. 1-1-10;
2396-817, eff. 1-1-10.)
 
24    Section 10. The Illinois Power Agency Act is amended by
25changing Section 1-10 as follows:
 

 

 

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1    (20 ILCS 3855/1-10)
2    Sec. 1-10. Definitions.
3    "Agency" means the Illinois Power Agency.
4    "Agency loan agreement" means any agreement pursuant to
5which the Illinois Finance Authority agrees to loan the
6proceeds of revenue bonds issued with respect to a project to
7the Agency upon terms providing for loan repayment installments
8at least sufficient to pay when due all principal of, interest
9and premium, if any, on those revenue bonds, and providing for
10maintenance, insurance, and other matters in respect of the
11project.
12    "Authority" means the Illinois Finance Authority.
13    "Clean coal facility" means an electric generating
14facility that uses primarily coal as a feedstock and that
15captures and sequesters carbon dioxide emissions at the
16following levels: at least 50% of the total carbon dioxide
17emissions that the facility would otherwise emit if, at the
18time construction commences, the facility is scheduled to
19commence operation before 2016, at least 70% of the total
20carbon dioxide emissions that the facility would otherwise emit
21if, at the time construction commences, the facility is
22scheduled to commence operation during 2016 or 2017, and at
23least 90% of the total carbon dioxide emissions that the
24facility would otherwise emit if, at the time construction
25commences, the facility is scheduled to commence operation

 

 

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1after 2017. The power block of the clean coal facility shall
2not exceed allowable emission rates for sulfur dioxide,
3nitrogen oxides, carbon monoxide, particulates and mercury for
4a natural gas-fired combined-cycle facility the same size as
5and in the same location as the clean coal facility at the time
6the clean coal facility obtains an approved air permit. All
7coal used by a clean coal facility shall have high volatile
8bituminous rank and greater than 1.7 pounds of sulfur per
9million btu content, unless the clean coal facility does not
10use gasification technology and was operating as a conventional
11coal-fired electric generating facility on June 1, 2009 (the
12effective date of Public Act 95-1027).
13    "Clean coal SNG brownfield facility" means a facility that
14(1) has commenced construction by July 1, 2015 on an urban
15brownfield site in a municipality with at least 1,000,000
16residents; (2) uses a gasification process to produce
17substitute natural gas; (3) uses coal as at least 50% of the
18total feedstock over the term of any sourcing agreement with a
19utility and the remainder of the feedstock may be either
20petroleum coke or coal, with all such coal having a high
21bituminous rank and greater than 1.7 pounds of sulfur per
22million Btu content unless the facility reasonably determines
23that it is necessary to use additional petroleum coke to
24deliver additional consumer savings, in which case the facility
25shall use coal for at least 35% of the total feedstock over the
26term of any sourcing agreement; and (4) captures and sequesters

 

 

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1at least 85% of the total carbon dioxide emissions that the
2facility would otherwise emit.
3    "Clean coal SNG facility" means a facility that uses a
4gasification process to produce substitute natural gas, that
5sequesters at least 90% of the total carbon dioxide emissions
6that the facility would otherwise emit, that uses at least 90%
7coal as a feedstock, with all such coal having a high
8bituminous rank and greater than 1.7 pounds of sulfur per
9million btu content, and that has a valid and effective permit
10to construct emission sources and air pollution control
11equipment and approval with respect to the federal regulations
12for Prevention of Significant Deterioration of Air Quality
13(PSD) for the plant pursuant to the federal Clean Air Act;
14provided, however, a clean coal SNG brownfield facility shall
15not be a clean coal SNG facility.
16    "Commission" means the Illinois Commerce Commission.
17    "Costs incurred in connection with the development and
18construction of a facility" means:
19        (1) the cost of acquisition of all real property,
20    fixtures, and improvements in connection therewith and
21    equipment, personal property, and other property, rights,
22    and easements acquired that are deemed necessary for the
23    operation and maintenance of the facility;
24        (2) financing costs with respect to bonds, notes, and
25    other evidences of indebtedness of the Agency;
26        (3) all origination, commitment, utilization,

 

 

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1    facility, placement, underwriting, syndication, credit
2    enhancement, and rating agency fees;
3        (4) engineering, design, procurement, consulting,
4    legal, accounting, title insurance, survey, appraisal,
5    escrow, trustee, collateral agency, interest rate hedging,
6    interest rate swap, capitalized interest, contingency, as
7    required by lenders, and other financing costs, and other
8    expenses for professional services; and
9        (5) the costs of plans, specifications, site study and
10    investigation, installation, surveys, other Agency costs
11    and estimates of costs, and other expenses necessary or
12    incidental to determining the feasibility of any project,
13    together with such other expenses as may be necessary or
14    incidental to the financing, insuring, acquisition, and
15    construction of a specific project and starting up,
16    commissioning, and placing that project in operation.
17    "Department" means the Department of Commerce and Economic
18Opportunity.
19    "Director" means the Director of the Illinois Power Agency.
20    "Demand-response" means measures that decrease peak
21electricity demand or shift demand from peak to off-peak
22periods.
23    "Distributed renewable energy generation device" means a
24device that is:
25        (1) powered by wind, solar thermal energy,
26    photovoltaic cells and panels, biodiesel, crops and

 

 

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1    untreated and unadulterated organic waste biomass, tree
2    waste, and hydropower that does not involve new
3    construction or significant expansion of hydropower dams;
4        (2) interconnected at the distribution system level of
5    either an electric utility as defined in this Section, an
6    alternative retail electric supplier as defined in Section
7    16-102 of the Public Utilities Act, a municipal utility as
8    defined in Section 3-105 of the Public Utilities Act, or a
9    rural electric cooperative as defined in Section 3-119 of
10    the Public Utilities Act;
11        (3) located on the customer side of the customer's
12    electric meter and is primarily used to offset that
13    customer's electricity load; and
14        (4) limited in nameplate capacity to no more than 2,000
15    kilowatts.
16    "Energy efficiency" means measures that reduce the amount
17of electricity, or natural gas, or heat rate required to
18achieve a given end use.
19    "Electric utility" has the same definition as found in
20Section 16-102 of the Public Utilities Act.
21    "Facility" means an electric generating unit or a
22co-generating unit that produces electricity along with
23related equipment necessary to connect the facility to an
24electric transmission or distribution system.
25    "Governmental aggregator" means one or more units of local
26government that individually or collectively procure

 

 

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1electricity to serve residential retail electrical loads
2located within its or their jurisdiction.
3    "Local government" means a unit of local government as
4defined in Section 1 of Article VII of the Illinois
5Constitution.
6    "Municipality" means a city, village, or incorporated
7town.
8    "Person" means any natural person, firm, partnership,
9corporation, either domestic or foreign, company, association,
10limited liability company, joint stock company, or association
11and includes any trustee, receiver, assignee, or personal
12representative thereof.
13    "Project" means the planning, bidding, and construction of
14a facility.
15    "Public utility" has the same definition as found in
16Section 3-105 of the Public Utilities Act.
17    "Real property" means any interest in land together with
18all structures, fixtures, and improvements thereon, including
19lands under water and riparian rights, any easements,
20covenants, licenses, leases, rights-of-way, uses, and other
21interests, together with any liens, judgments, mortgages, or
22other claims or security interests related to real property.
23    "Renewable energy credit" means a tradable credit that
24represents the environmental attributes of a certain amount of
25energy produced from a renewable energy resource.
26    "Renewable energy resources" includes energy and its

 

 

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

 

 

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1facility, clean coal SNG facility, or clean coal SNG brownfield
2facility has contracted for such purposes.
3    "Sourcing agreement" means (i) in the case of an electric
4utility, an agreement between the owner of a clean coal
5facility and such electric utility, which agreement shall have
6terms and conditions meeting the requirements of paragraph (3)
7of subsection (d) of Section 1-75, (ii) in the case of an
8alternative retail electric supplier, an agreement between the
9owner of a clean coal facility and such alternative retail
10electric supplier, which agreement shall have terms and
11conditions meeting the requirements of Section 16-115(d)(5) of
12the Public Utilities Act, and (iii) in case of a gas utility,
13an agreement between the owner of a clean coal SNG brownfield
14facility and the gas utility, which agreement shall have the
15terms and conditions meeting the requirements of subsection
16(h-1) of Section 9-220 of the Public Utilities Act.
17    "Substitute natural gas" or "SNG" means a gas manufactured
18by gasification of hydrocarbon feedstock, which is
19substantially interchangeable in use and distribution with
20conventional natural gas.
21    "Total resource cost test" or "TRC test" means a standard
22that is met if, for an investment in energy efficiency or
23demand-response measures, the benefit-cost ratio is greater
24than one. The benefit-cost ratio is the ratio of the net
25present value of the total benefits of the program to the net
26present value of the total costs as calculated over the

 

 

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1lifetime of the measures. A total resource cost test compares
2the sum of avoided electric utility costs, representing the
3benefits that accrue to the system and the participant in the
4delivery of those efficiency measures, as well as other
5quantifiable societal benefits, including avoided natural gas
6utility costs, to the sum of all incremental costs of end-use
7measures that are implemented due to the program (including
8both utility and participant contributions), plus costs to
9administer, deliver, and evaluate each demand-side program, to
10quantify the net savings obtained by substituting the
11demand-side program for supply resources. In calculating
12avoided costs of power and energy that an electric utility
13would otherwise have had to acquire, reasonable estimates shall
14be included of financial costs likely to be imposed by future
15regulations and legislation on emissions of greenhouse gases.
16(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
1796-784, eff. 8-28-09; 96-1000, eff. 7-2-10; 97-96, eff.
187-13-11; 97-239, eff. 8-2-11; 97-491, eff. 8-22-11; 97-616,
19eff. 10-26-11; 97-813, eff. 7-13-12.)
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.