99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB6561

 

Introduced , by Rep. Bill Mitchell

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Power Agency Act. Requires the Planning and Procurement Bureau to include in procurement plans and competitive procurement processes the procurement of low carbon energy credits (LCE credits) for all of the utilities' retail customers. Sets forth a low carbon portfolio standard. Provides that the procurement plans shall include cost-effective low carbon energy credits from low carbon energy resources in an amount equal to 70% of each electric utility's annual retail sales of electricity to retail customers in the State during the planning year immediately prior to the development of the procurement plan. Specifies that a renewable energy credit, carbon emission credit, or LCE credit can only be used once to comply with a single portfolio standard and cannot be used to satisfy the requirements of more than one portfolio standard. Amends the Public Utilities Act. Allows the electric utility to recover through tariffed charges all of the costs associated with the purchase of low carbon energy credits from low carbon energy resources. Requires electric utilities to procure low carbon energy credits from low carbon energy resources for all retail customers in its service area in accordance with provisions concerning the low carbon energy portfolio. Requires electric utilities and alternative retail electric suppliers to provide to its customers on a quarterly basis a pie-chart that graphically depicts the quantity of low carbon energy credits from low carbon energy resources procured as a percentage of the actual load of retail customers within its service area. Effective immediately.


LRB099 21551 EGJ 47886 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB6561LRB099 21551 EGJ 47886 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Low carbon portfolio standard legislative
5findings. The General Assembly finds and declares the
6following:
7        (1) Reducing emissions of carbon dioxide and other
8    pollutants and preserving existing low-emission
9    electricity generation in Illinois and adjoining states is
10    critical to improving air quality in Illinois for Illinois
11    residents.
12        (2) The existing renewable portfolio standard has been
13    successful in promoting the growth of renewable energy
14    generation to reduce air pollution in Illinois. However, to
15    achieve its environmental goals, Illinois must expand its
16    commitment to low-emission energy generation and value the
17    environmental attributes of low-carbon generation that
18    currently falls outside the scope of the existing renewable
19    portfolio standard, including, but not limited to, nuclear
20    power.
21        (3) Preserving existing low-emission energy generation
22    and promoting new low-emission energy generation is
23    critical to placing the State on a glide path to meeting
24    anticipated regulatory requirements that have been

 

 

HB6561- 2 -LRB099 21551 EGJ 47886 b

1    proposed by the U.S. Environmental Protection Agency under
2    Section 111(d) of the federal Clean Air Act.
3        (4) The Illinois Commerce Commission, the Illinois
4    Power Agency, the Illinois Environmental Protection
5    Agency, and the Department of Commerce and Economic
6    Opportunity issued a report dated January 5, 2015 titled
7    "Potential Nuclear Power Plant Closings in Illinois" (the
8    Report), which addressed the issues identified by Illinois
9    House Resolution 1146 of the 98th General Assembly, which,
10    among other things, urged the Illinois Environmental
11    Protection Agency to prepare a report showing how the
12    premature closure of existing nuclear power plants in
13    Illinois will affect the societal cost of increased
14    greenhouse gas emissions based upon the EPA's published
15    societal cost of greenhouse gases.
16        (5) The Report also identified significant adverse
17    consequences for electric reliability in Illinois,
18    including significant voltage and thermal violations in
19    the interstate transmission network, in the event that
20    Illinois' existing nuclear facilities close prematurely.
21    The Report also found that nuclear power plants are among
22    the most reliable sources of energy, which means that
23    electricity from nuclear power plants is available on the
24    electric grid all hours of the day and when needed, thereby
25    always reducing carbon emissions.
26        (6) The Report also found that the premature closure of

 

 

HB6561- 3 -LRB099 21551 EGJ 47886 b

1    existing nuclear power plants in Illinois will negatively
2    affect the economic climate in the region.
3        (7) Illinois House Resolution 1146 further urged that
4    the Report make findings concerning potential market-based
5    solutions that will ensure that the premature closure of
6    these nuclear power plants does not occur and that the
7    associated dire consequences to the environment, electric
8    reliability, and the regional economy are averted.
9        (8) The Report identified potential market-based
10    solutions that will ensure that the premature closure of
11    these nuclear power plants does not occur and that the
12    associated dire consequences to the environment, electric
13    reliability, and the regional economy are averted.
14    The General Assembly therefore finds that it is necessary
15to establish and implement a low carbon portfolio standard,
16which will increase the State's reliance on low carbon energy
17through the procurement of low carbon energy credits from low
18carbon energy resources.
 
19    Section 5. The Illinois Power Agency Act is amended by
20changing Sections 1-5, 1-10, and 1-75 as follows:
 
21    (20 ILCS 3855/1-5)
22    Sec. 1-5. Legislative declarations and findings. The
23General Assembly finds and declares:
24        (1) The health, welfare, and prosperity of all Illinois

 

 

HB6561- 4 -LRB099 21551 EGJ 47886 b

1    citizens require the provision of adequate, reliable,
2    affordable, efficient, and environmentally sustainable
3    electric service at the lowest total cost over time, taking
4    into account any benefits of price stability.
5        (2) (Blank). The transition to retail competition is
6    not complete. Some customers, especially residential and
7    small commercial customers, have failed to benefit from
8    lower electricity costs from retail and wholesale
9    competition.
10        (3) (Blank). Escalating prices for electricity in
11    Illinois pose a serious threat to the economic well-being,
12    health, and safety of the residents of and the commerce and
13    industry of the State.
14        (4) It To protect against this threat to economic
15    well-being, health, and safety it is necessary to improve
16    the process of procuring electricity to serve Illinois
17    residents, to promote investment in energy efficiency and
18    demand-response measures, and to maintain and support
19    development of clean coal technologies, generation
20    resources that operate at all hours of the day and under
21    all weather conditions, low carbon energy resources, and
22    renewable resources.
23        (5) Procuring a diverse electricity supply portfolio
24    will ensure the lowest total cost over time for adequate,
25    reliable, efficient, and environmentally sustainable
26    electric service.

 

 

HB6561- 5 -LRB099 21551 EGJ 47886 b

1        (6) Including cost-effective renewable resources and
2    low carbon energy credits from low carbon energy resources
3    in that portfolio will reduce long-term direct and indirect
4    costs to consumers by decreasing environmental impacts and
5    by avoiding or delaying the need for new generation,
6    transmission, and distribution infrastructure.
7        (7) Energy efficiency, demand-response measures, low
8    carbon energy, and renewable energy are resources
9    currently underused in Illinois.
10        (8) The State should encourage the use of advanced
11    clean coal technologies that capture and sequester carbon
12    dioxide emissions to advance environmental protection
13    goals and to demonstrate the viability of coal and
14    coal-derived fuels in a carbon-constrained economy.
15        (9) The General Assembly enacted Public Act 96-0795 to
16    reform the State's purchasing processes, recognizing that
17    government procurement is susceptible to abuse if
18    structural and procedural safeguards are not in place to
19    ensure independence, insulation, oversight, and
20    transparency.
21        (10) The principles that underlie the procurement
22    reform legislation apply also in the context of power
23    purchasing.
24    The General Assembly therefore finds that it is necessary
25to create the Illinois Power Agency and that the goals and
26objectives of that Agency are to accomplish each of the

 

 

HB6561- 6 -LRB099 21551 EGJ 47886 b

1following:
2        (A) Develop electricity procurement plans to 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, for electric utilities that on December
7    31, 2005 provided electric service to at least 100,000
8    customers in Illinois and for small multi-jurisdictional
9    electric utilities that (i) on December 31, 2005 served
10    less than 100,000 customers in Illinois and (ii) request a
11    procurement plan for their Illinois jurisdictional load.
12    The procurement plan shall be updated on an annual basis
13    and shall include renewable energy resources and,
14    beginning with the partial planning year commencing
15    January 1, 2017, low carbon energy credits from low carbon
16    energy resources sufficient to achieve the standards
17    specified in this Act.
18        (B) Conduct competitive procurement processes to
19    procure the supply resources identified in the procurement
20    plan.
21        (C) Develop electric generation and co-generation
22    facilities that use indigenous coal or renewable
23    resources, or both, financed with bonds issued by the
24    Illinois Finance Authority.
25        (D) Supply electricity from the Agency's facilities at
26    cost to one or more of the following: municipal electric

 

 

HB6561- 7 -LRB099 21551 EGJ 47886 b

1    systems, governmental aggregators, or rural electric
2    cooperatives in Illinois.
3        (E) Ensure that the process of power procurement is
4    conducted in an ethical and transparent fashion, immune
5    from improper influence.
6        (F) Continue to review its policies and practices to
7    determine how best to meet its mission of providing the
8    lowest cost power to the greatest number of people, at any
9    given point in time, in accordance with applicable law.
10        (G) Operate in a structurally insulated, independent,
11    and transparent fashion so that nothing impedes the
12    Agency's mission to secure power at the best prices the
13    market will bear, provided that the Agency meets all
14    applicable legal requirements.
15(Source: P.A. 97-325, eff. 8-12-11; 97-618, eff. 10-26-11;
1697-813, eff. 7-13-12.)
 
17    (20 ILCS 3855/1-10)
18    Sec. 1-10. Definitions.
19    "Agency" means the Illinois Power Agency.
20    "Agency loan agreement" means any agreement pursuant to
21which the Illinois Finance Authority agrees to loan the
22proceeds of revenue bonds issued with respect to a project to
23the Agency upon terms providing for loan repayment installments
24at least sufficient to pay when due all principal of, interest
25and premium, if any, on those revenue bonds, and providing for

 

 

HB6561- 8 -LRB099 21551 EGJ 47886 b

1maintenance, insurance, and other matters in respect of the
2project.
3    "Authority" means the Illinois Finance Authority.
4    "Clean coal facility" means an electric generating
5facility that uses primarily coal as a feedstock and that
6captures and sequesters carbon dioxide emissions at the
7following levels: at least 50% of the total carbon dioxide
8emissions that the facility would otherwise emit if, at the
9time construction commences, the facility is scheduled to
10commence operation before 2016, at least 70% of the total
11carbon dioxide emissions that the facility would otherwise emit
12if, at the time construction commences, the facility is
13scheduled to commence operation during 2016 or 2017, and at
14least 90% of the total carbon dioxide emissions that the
15facility would otherwise emit if, at the time construction
16commences, the facility is scheduled to commence operation
17after 2017. The power block of the clean coal facility shall
18not exceed allowable emission rates for sulfur dioxide,
19nitrogen oxides, carbon monoxide, particulates and mercury for
20a natural gas-fired combined-cycle facility the same size as
21and in the same location as the clean coal facility at the time
22the clean coal facility obtains an approved air permit. All
23coal used by a clean coal facility shall have high volatile
24bituminous rank and greater than 1.7 pounds of sulfur per
25million btu content, unless the clean coal facility does not
26use gasification technology and was operating as a conventional

 

 

HB6561- 9 -LRB099 21551 EGJ 47886 b

1coal-fired electric generating facility on June 1, 2009 (the
2effective date of Public Act 95-1027).
3    "Clean coal SNG brownfield facility" means a facility that
4(1) has commenced construction by July 1, 2015 on an urban
5brownfield site in a municipality with at least 1,000,000
6residents; (2) uses a gasification process to produce
7substitute natural gas; (3) uses coal as at least 50% of the
8total feedstock over the term of any sourcing agreement with a
9utility and the remainder of the feedstock may be either
10petroleum coke or coal, with all such coal having a high
11bituminous rank and greater than 1.7 pounds of sulfur per
12million Btu content unless the facility reasonably determines
13that it is necessary to use additional petroleum coke to
14deliver additional consumer savings, in which case the facility
15shall use coal for at least 35% of the total feedstock over the
16term of any sourcing agreement; and (4) captures and sequesters
17at least 85% of the total carbon dioxide emissions that the
18facility would otherwise emit.
19    "Clean coal SNG facility" means a facility that uses a
20gasification process to produce substitute natural gas, that
21sequesters at least 90% of the total carbon dioxide emissions
22that the facility would otherwise emit, that uses at least 90%
23coal as a feedstock, with all such coal having a high
24bituminous rank and greater than 1.7 pounds of sulfur per
25million btu content, and that has a valid and effective permit
26to construct emission sources and air pollution control

 

 

HB6561- 10 -LRB099 21551 EGJ 47886 b

1equipment and approval with respect to the federal regulations
2for Prevention of Significant Deterioration of Air Quality
3(PSD) for the plant pursuant to the federal Clean Air Act;
4provided, however, a clean coal SNG brownfield facility shall
5not be a clean coal SNG facility.
6    "Commission" means the Illinois Commerce Commission.
7    "Costs incurred in connection with the development and
8construction of a facility" means:
9        (1) the cost of acquisition of all real property,
10    fixtures, and improvements in connection therewith and
11    equipment, personal property, and other property, rights,
12    and easements acquired that are deemed necessary for the
13    operation and maintenance of the facility;
14        (2) financing costs with respect to bonds, notes, and
15    other evidences of indebtedness of the Agency;
16        (3) all origination, commitment, utilization,
17    facility, placement, underwriting, syndication, credit
18    enhancement, and rating agency fees;
19        (4) engineering, design, procurement, consulting,
20    legal, accounting, title insurance, survey, appraisal,
21    escrow, trustee, collateral agency, interest rate hedging,
22    interest rate swap, capitalized interest, contingency, as
23    required by lenders, and other financing costs, and other
24    expenses for professional services; and
25        (5) the costs of plans, specifications, site study and
26    investigation, installation, surveys, other Agency costs

 

 

HB6561- 11 -LRB099 21551 EGJ 47886 b

1    and estimates of costs, and other expenses necessary or
2    incidental to determining the feasibility of any project,
3    together with such other expenses as may be necessary or
4    incidental to the financing, insuring, acquisition, and
5    construction of a specific project and starting up,
6    commissioning, and placing that project in operation.
7    "Department" means the Department of Commerce and Economic
8Opportunity.
9    "Director" means the Director of the Illinois Power Agency.
10    "Demand-response" means measures that decrease peak
11electricity demand or shift demand from peak to off-peak
12periods.
13    "Distributed renewable energy generation device" means a
14device that is:
15        (1) powered by wind, solar thermal energy,
16    photovoltaic cells and panels, biodiesel, crops and
17    untreated and unadulterated organic waste biomass, tree
18    waste, and hydropower that does not involve new
19    construction or significant expansion of hydropower dams;
20        (2) interconnected at the distribution system level of
21    either an electric utility as defined in this Section, an
22    alternative retail electric supplier as defined in Section
23    16-102 of the Public Utilities Act, a municipal utility as
24    defined in Section 3-105 of the Public Utilities Act, or a
25    rural electric cooperative as defined in Section 3-119 of
26    the Public Utilities Act;

 

 

HB6561- 12 -LRB099 21551 EGJ 47886 b

1        (3) located on the customer side of the customer's
2    electric meter and is primarily used to offset that
3    customer's electricity load; and
4        (4) limited in nameplate capacity to no more than 2,000
5    kilowatts.
6    "Energy efficiency" means measures that reduce the amount
7of electricity or natural gas required to achieve a given end
8use. "Energy efficiency" also includes measures that reduce the
9total Btus of electricity and natural gas needed to meet the
10end use or uses.
11    "Electric utility" has the same definition as found in
12Section 16-102 of the Public Utilities Act.
13    "Facility" means an electric generating unit or a
14co-generating unit that produces electricity along with
15related equipment necessary to connect the facility to an
16electric transmission or distribution system.
17    "Governmental aggregator" means one or more units of local
18government that individually or collectively procure
19electricity to serve residential retail electrical loads
20located within its or their jurisdiction.
21    "Local government" means a unit of local government as
22defined in Section 1 of Article VII of the Illinois
23Constitution.
24    "Low carbon energy credit" or "LCE credit" means a tradable
25credit that represents the environmental attributes of one
26megawatthour of energy produced from a low carbon energy

 

 

HB6561- 13 -LRB099 21551 EGJ 47886 b

1resource.
2    "Low carbon energy resources" or "LCE resources" means
3energy and its associated low carbon energy credit or low
4carbon energy credits from a generating unit that does not emit
5any air pollution, including sulfur dioxide, nitrogen oxide, or
6carbon dioxide, as reported in the Generation Attribute
7Tracking System. "Low carbon energy resources" or "LCE
8resources" includes technology fueled by new and existing solar
9photovoltaic, solar thermal, wind, hydro, nuclear, tidal
10energy, wave energy, and clean coal. Notwithstanding the
11provisions of this definition, generating resources fueled by
12hydro or clean coal are low carbon energy resources if they
13satisfy the following criteria:
14        (1) Hydro: the hydro facility or unit must have a total
15    nameplate generating capacity that does not exceed 3
16    megawatts.
17        (2) Clean coal: the electric generating facility must
18    use primarily coal as a feedstock and capture and sequester
19    at least 70% of the total carbon dioxide emissions that the
20    facility would otherwise emit during the period June 1,
21    2017 through May 31, 2019 and at least 90% of the total
22    carbon dioxide emissions that the facility would otherwise
23    emit during the period June 1, 2019 through May 31, 2022.
24    The power block of such a facility shall not exceed the
25    allowable emission rates for sulfur dioxide, nitrogen
26    oxides, carbon monoxide, particulates, and mercury for a

 

 

HB6561- 14 -LRB099 21551 EGJ 47886 b

1    natural gas-fired combined cycle facility the same size as
2    and in the same location of such a facility at the time it
3    obtains an approved air permit.
4    "Low carbon energy resources" or "LCE resources" does not
5include (i) any generating unit whose costs were being
6recovered through State-regulated rates as of January 1, 2016
7or (ii) any generating unit for which the energy and capacity
8is subject to a power purchase agreement with a term of greater
9than 5 years.
10    "Municipality" means a city, village, or incorporated
11town.
12    "Person" means any natural person, firm, partnership,
13corporation, either domestic or foreign, company, association,
14limited liability company, joint stock company, or association
15and includes any trustee, receiver, assignee, or personal
16representative thereof.
17    "Project" means the planning, bidding, and construction of
18a facility.
19    "Public utility" has the same definition as found in
20Section 3-105 of the Public Utilities Act.
21    "Real property" means any interest in land together with
22all structures, fixtures, and improvements thereon, including
23lands under water and riparian rights, any easements,
24covenants, licenses, leases, rights-of-way, uses, and other
25interests, together with any liens, judgments, mortgages, or
26other claims or security interests related to real property.

 

 

HB6561- 15 -LRB099 21551 EGJ 47886 b

1    "Renewable energy credit" means a tradable credit that
2represents the environmental attributes of a certain amount of
3energy produced from a renewable energy resource.
4    "Renewable energy resources" includes energy and its
5associated renewable energy credit or renewable energy credits
6from wind, solar thermal energy, photovoltaic cells and panels,
7biodiesel, anaerobic digestion, crops and untreated and
8unadulterated organic waste biomass, tree waste, hydropower
9that does not involve new construction or significant expansion
10of hydropower dams, and other alternative sources of
11environmentally preferable energy. For purposes of this Act,
12landfill gas produced in the State is considered a renewable
13energy resource. "Renewable energy resources" does not include
14the incineration or burning of tires, garbage, general
15household, institutional, and commercial waste, industrial
16lunchroom or office waste, landscape waste other than tree
17waste, railroad crossties, utility poles, or construction or
18demolition debris, other than untreated and unadulterated
19waste wood.
20    "Retail customer" has the same definition as found in
21Section 16-102 of the Public Utilities Act.
22    "Revenue bond" means any bond, note, or other evidence of
23indebtedness issued by the Authority, the principal and
24interest of which is payable solely from revenues or income
25derived from any project or activity of the Agency.
26    "Sequester" means permanent storage of carbon dioxide by

 

 

HB6561- 16 -LRB099 21551 EGJ 47886 b

1injecting it into a saline aquifer, a depleted gas reservoir,
2or an oil reservoir, directly or through an enhanced oil
3recovery process that may involve intermediate storage,
4regardless of whether these activities are conducted by a clean
5coal facility, a clean coal SNG facility, a clean coal SNG
6brownfield facility, or a party with which a clean coal
7facility, clean coal SNG facility, or clean coal SNG brownfield
8facility has contracted for such purposes.
9    "Sourcing agreement" means (i) in the case of an electric
10utility, an agreement between the owner of a clean coal
11facility and such electric utility, which agreement shall have
12terms and conditions meeting the requirements of paragraph (3)
13of subsection (d) of Section 1-75, (ii) in the case of an
14alternative retail electric supplier, an agreement between the
15owner of a clean coal facility and such alternative retail
16electric supplier, which agreement shall have terms and
17conditions meeting the requirements of Section 16-115(d)(5) of
18the Public Utilities Act, and (iii) in case of a gas utility,
19an agreement between the owner of a clean coal SNG brownfield
20facility and the gas utility, which agreement shall have the
21terms and conditions meeting the requirements of subsection
22(h-1) of Section 9-220 of the Public Utilities Act.
23    "Substitute natural gas" or "SNG" means a gas manufactured
24by gasification of hydrocarbon feedstock, which is
25substantially interchangeable in use and distribution with
26conventional natural gas.

 

 

HB6561- 17 -LRB099 21551 EGJ 47886 b

1    "Total resource cost test" or "TRC test" means a standard
2that is met if, for an investment in energy efficiency or
3demand-response measures, the benefit-cost ratio is greater
4than one. The benefit-cost ratio is the ratio of the net
5present value of the total benefits of the program to the net
6present value of the total costs as calculated over the
7lifetime of the measures. A total resource cost test compares
8the sum of avoided electric utility costs, representing the
9benefits that accrue to the system and the participant in the
10delivery of those efficiency measures, as well as other
11quantifiable societal benefits, including avoided natural gas
12utility costs, to the sum of all incremental costs of end-use
13measures that are implemented due to the program (including
14both utility and participant contributions), plus costs to
15administer, deliver, and evaluate each demand-side program, to
16quantify the net savings obtained by substituting the
17demand-side program for supply resources. In calculating
18avoided costs of power and energy that an electric utility
19would otherwise have had to acquire, reasonable estimates shall
20be included of financial costs likely to be imposed by future
21regulations and legislation on emissions of greenhouse gases.
22(Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-491,
23eff. 8-22-11; 97-616, eff. 10-26-11; 97-813, eff. 7-13-12;
2498-90, eff. 7-15-13.)
 
25    (20 ILCS 3855/1-75)

 

 

HB6561- 18 -LRB099 21551 EGJ 47886 b

1    Sec. 1-75. Planning and Procurement Bureau. The Planning
2and Procurement Bureau has the following duties and
3responsibilities:
4    (a) The Planning and Procurement Bureau shall each year,
5beginning in 2008, develop procurement plans and conduct
6competitive procurement processes in accordance with the
7requirements of Section 16-111.5 of the Public Utilities Act
8for the eligible retail customers of electric utilities that on
9December 31, 2005 provided electric service to at least 100,000
10customers in Illinois, and, beginning with the partial planning
11year commencing on January 1, 2017, the Planning and
12Procurement Bureau shall include in such plans and processes
13the procurement of low carbon energy credits pursuant to
14subsection (d-5) of this Section for all of the utilities'
15retail customers. The Planning and Procurement Bureau shall
16also develop procurement plans and conduct competitive
17procurement processes in accordance with the requirements of
18Section 16-111.5 of the Public Utilities Act for the eligible
19retail customers of small multi-jurisdictional electric
20utilities that (i) on December 31, 2005 served less than
21100,000 customers in Illinois and (ii) request a procurement
22plan for their Illinois jurisdictional load. This Section shall
23not apply to a small multi-jurisdictional utility until such
24time as a small multi-jurisdictional utility requests the
25Agency to prepare a procurement plan for their Illinois
26jurisdictional load. For the purposes of this Section, the term

 

 

HB6561- 19 -LRB099 21551 EGJ 47886 b

1"eligible retail customers" has the same definition as found in
2Section 16-111.5(a) of the Public Utilities Act.
3        (1) The Agency shall each year, beginning in 2008, as
4    needed, issue a request for qualifications for experts or
5    expert consulting firms to develop the procurement plans in
6    accordance with Section 16-111.5 of the Public Utilities
7    Act. In order to qualify an expert or expert consulting
8    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, mathematics,
13        engineering, risk management, or a related area of
14        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 transmission
20        organizations;
21            (E) expertise in credit protocols and familiarity
22        with contract protocols;
23            (F) adequate resources to perform and fulfill the
24        required functions and responsibilities; and
25            (G) the absence of a conflict of interest and
26        inappropriate bias for or against potential bidders or

 

 

HB6561- 20 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 21 -LRB099 21551 EGJ 47886 b

1    request for qualifications processes that are under
2    consideration to develop the procurement plans and to serve
3    as the procurement administrator. The Agency shall also
4    provide each qualified expert's or expert consulting
5    firm's response to the request for qualifications. All
6    information provided under this subparagraph shall also be
7    provided to the Commission. The Agency may provide by rule
8    for fees associated with supplying the information to
9    utilities and other interested parties. These parties
10    shall, within 5 business days, notify the Agency in writing
11    if they object to any experts or expert consulting firms on
12    the lists. Objections shall be based on:
13            (A) failure to satisfy qualification criteria;
14            (B) identification of a conflict of interest; or
15            (C) evidence of inappropriate bias for or against
16        potential bidders or the affected utilities.
17        The Agency shall remove experts or expert consulting
18    firms from the lists within 10 days if there is a
19    reasonable basis for an objection and provide the updated
20    lists to the affected utilities and other interested
21    parties. If the Agency fails to remove an expert or expert
22    consulting firm from a list, an objecting party may seek
23    review by the Commission within 5 days thereafter by filing
24    a petition, and the Commission shall render a ruling on the
25    petition within 10 days. There is no right of appeal of the
26    Commission's ruling.

 

 

HB6561- 22 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 23 -LRB099 21551 EGJ 47886 b

1customers in the State of Illinois, and for eligible Illinois
2retail customers of small multi-jurisdictional electric
3utilities that (i) on December 31, 2005 served less than
4100,000 customers in Illinois and (ii) request a procurement
5plan for their Illinois jurisdictional load.
6    (c) Renewable portfolio standard.
7        (1) The procurement plans shall include cost-effective
8    renewable energy resources. A minimum percentage of each
9    utility's total supply to serve the load of eligible retail
10    customers, as defined in Section 16-111.5(a) of the Public
11    Utilities Act, procured for each of the following years
12    shall be generated from cost-effective renewable energy
13    resources: at least 2% by June 1, 2008; at least 4% by June
14    1, 2009; at least 5% by June 1, 2010; at least 6% by June 1,
15    2011; at least 7% by June 1, 2012; at least 8% by June 1,
16    2013; at least 9% by June 1, 2014; at least 10% by June 1,
17    2015; and increasing by at least 1.5% each year thereafter
18    to at least 25% by June 1, 2025. To the extent that it is
19    available, at least 75% of the renewable energy resources
20    used to meet these standards shall come from wind
21    generation and, beginning on June 1, 2011, at least the
22    following percentages of the renewable energy resources
23    used to meet these standards shall come from photovoltaics
24    on the following schedule: 0.5% by June 1, 2012, 1.5% by
25    June 1, 2013; 3% by June 1, 2014; and 6% by June 1, 2015 and
26    thereafter. Of the renewable energy resources procured

 

 

HB6561- 24 -LRB099 21551 EGJ 47886 b

1    pursuant to this Section, at least the following
2    percentages shall come from distributed renewable energy
3    generation devices: 0.5% by June 1, 2013, 0.75% by June 1,
4    2014, and 1% by June 1, 2015 and thereafter. To the extent
5    available, half of the renewable energy resources procured
6    from distributed renewable energy generation shall come
7    from devices of less than 25 kilowatts in nameplate
8    capacity. Renewable energy resources procured from
9    distributed generation devices may also count towards the
10    required percentages for wind and solar photovoltaics.
11    Procurement of renewable energy resources from distributed
12    renewable energy generation devices shall be done on an
13    annual basis through multi-year contracts of no less than 5
14    years, and shall consist solely of renewable energy
15    credits.
16        The Agency shall create credit requirements for
17    suppliers of distributed renewable energy. In order to
18    minimize the administrative burden on contracting
19    entities, the Agency shall solicit the use of third-party
20    organizations to aggregate distributed renewable energy
21    into groups of no less than one megawatt in installed
22    capacity. These third-party organizations shall administer
23    contracts with individual distributed renewable energy
24    generation device owners. An individual distributed
25    renewable energy generation device owner shall have the
26    ability to measure the output of his or her distributed

 

 

HB6561- 25 -LRB099 21551 EGJ 47886 b

1    renewable energy generation device.
2        For purposes of this subsection (c), "cost-effective"
3    means that the costs of procuring renewable energy
4    resources do not cause the limit stated in paragraph (2) of
5    this subsection (c) to be exceeded and do not exceed
6    benchmarks based on market prices for renewable energy
7    resources in the region, which shall be developed by the
8    procurement administrator, in consultation with the
9    Commission staff, Agency staff, and the procurement
10    monitor and shall be subject to Commission review and
11    approval.
12        (2) For purposes of this subsection (c), the required
13    procurement of cost-effective renewable energy resources
14    for a particular year shall be measured as a percentage of
15    the actual amount of electricity (megawatt-hours) supplied
16    by the electric utility to eligible retail customers in the
17    planning year ending immediately prior to the procurement.
18    For purposes of this subsection (c), the amount paid per
19    kilowatthour means the total amount paid for electric
20    service expressed on a per kilowatthour basis. For purposes
21    of this subsection (c), the total amount paid for electric
22    service includes without limitation amounts paid for
23    supply, transmission, distribution, surcharges, and add-on
24    taxes.
25        Notwithstanding the requirements of this subsection
26    (c), the total of renewable energy resources procured

 

 

HB6561- 26 -LRB099 21551 EGJ 47886 b

1    pursuant to the procurement plan for any single year shall
2    be reduced by an amount necessary to limit the annual
3    estimated average net increase due to the costs of these
4    resources included in the amounts paid by eligible retail
5    customers in connection with electric service to:
6            (A) in 2008, no more than 0.5% of the amount paid
7        per kilowatthour by those customers during the year
8        ending May 31, 2007;
9            (B) in 2009, the greater of an additional 0.5% of
10        the amount paid per kilowatthour by those customers
11        during the year ending May 31, 2008 or 1% of the amount
12        paid per kilowatthour by those customers during the
13        year ending May 31, 2007;
14            (C) in 2010, the greater of an additional 0.5% of
15        the amount paid per kilowatthour by those customers
16        during the year ending May 31, 2009 or 1.5% of the
17        amount paid per kilowatthour by those customers during
18        the year ending May 31, 2007;
19            (D) in 2011, the greater of an additional 0.5% of
20        the amount paid per kilowatthour by those customers
21        during the year ending May 31, 2010 or 2% of the amount
22        paid per kilowatthour by those customers during the
23        year ending May 31, 2007; and
24            (E) thereafter, the amount of renewable energy
25        resources procured pursuant to the procurement plan
26        for any single year shall be reduced by an amount

 

 

HB6561- 27 -LRB099 21551 EGJ 47886 b

1        necessary to limit the estimated average net increase
2        due to the cost of these resources included in the
3        amounts paid by eligible retail customers in
4        connection with electric service to no more than the
5        greater of 2.015% of the amount paid per kilowatthour
6        by those customers during the year ending May 31, 2007
7        or the incremental amount per kilowatthour paid for
8        these resources in 2011.
9            No later than June 30, 2011, the Commission shall
10        review the limitation on the amount of renewable energy
11        resources procured pursuant to this subsection (c) and
12        report to the General Assembly its findings as to
13        whether that limitation unduly constrains the
14        procurement of cost-effective renewable energy
15        resources.
16        (3) Through June 1, 2011, renewable energy resources
17    shall be counted for the purpose of meeting the renewable
18    energy standards set forth in paragraph (1) of this
19    subsection (c) only if they are generated from facilities
20    located in the State, provided that cost-effective
21    renewable energy resources are available from those
22    facilities. If those cost-effective resources are not
23    available in Illinois, they shall be procured in states
24    that adjoin Illinois and may be counted towards compliance.
25    If those cost-effective resources are not available in
26    Illinois or in states that adjoin Illinois, they shall be

 

 

HB6561- 28 -LRB099 21551 EGJ 47886 b

1    purchased elsewhere and shall be counted towards
2    compliance. After June 1, 2011, cost-effective renewable
3    energy resources located in Illinois and in states that
4    adjoin Illinois may be counted towards compliance with the
5    standards set forth in paragraph (1) of this subsection
6    (c). If those cost-effective resources are not available in
7    Illinois or in states that adjoin Illinois, they shall be
8    purchased elsewhere and shall be counted towards
9    compliance.
10        (4) The electric utility shall retire all renewable
11    energy credits used to comply with the standard.
12        (5) Beginning with the year commencing June 1, 2010, an
13    electric utility subject to this subsection (c) shall apply
14    the lesser of the maximum alternative compliance payment
15    rate or the most recent estimated alternative compliance
16    payment rate for its service territory for the
17    corresponding compliance period, established pursuant to
18    subsection (d) of Section 16-115D of the Public Utilities
19    Act to its retail customers that take service pursuant to
20    the electric utility's hourly pricing tariff or tariffs.
21    The electric utility shall retain all amounts collected as
22    a result of the application of the alternative compliance
23    payment rate or rates to such customers, and, beginning in
24    2011, the utility shall include in the information provided
25    under item (1) of subsection (d) of Section 16-111.5 of the
26    Public Utilities Act the amounts collected under the

 

 

HB6561- 29 -LRB099 21551 EGJ 47886 b

1    alternative compliance payment rate or rates for the prior
2    year ending May 31. Notwithstanding any limitation on the
3    procurement of renewable energy resources imposed by item
4    (2) of this subsection (c), the Agency shall increase its
5    spending on the purchase of renewable energy resources to
6    be procured by the electric utility for the next plan year
7    by an amount equal to the amounts collected by the utility
8    under the alternative compliance payment rate or rates in
9    the prior year ending May 31. Beginning April 1, 2012, and
10    each year thereafter, the Agency shall prepare a public
11    report for the General Assembly and Illinois Commerce
12    Commission that shall include, but not necessarily be
13    limited to:
14            (A) a comparison of the costs associated with the
15        Agency's procurement of renewable energy resources to
16        (1) the Agency's costs associated with electricity
17        generated by other types of generation facilities and
18        (2) the benefits associated with the Agency's
19        procurement of renewable energy resources; and
20            (B) an analysis of the rate impacts associated with
21        the Illinois Power Agency's procurement of renewable
22        resources, including, but not limited to, any
23        long-term contracts, on the eligible retail customers
24        of electric utilities.
25        The analysis shall include the Agency's estimate of the
26    total dollar impact that the Agency's procurement of

 

 

HB6561- 30 -LRB099 21551 EGJ 47886 b

1    renewable resources has had on the annual electricity bills
2    of the customer classes that comprise each eligible retail
3    customer class taking service from an electric utility. The
4    Agency's report shall also analyze how the operation of the
5    alternative compliance payment mechanism, any long-term
6    contracts, or other aspects of the applicable renewable
7    portfolio standards impacts the rates of customers of
8    alternative retail electric suppliers.
9    (d) Clean coal portfolio standard.
10        (1) The procurement plans shall include electricity
11    generated using clean coal. Each utility shall enter into
12    one or more sourcing agreements with the initial clean coal
13    facility, as provided in paragraph (3) of this subsection
14    (d), covering electricity generated by the initial clean
15    coal facility representing at least 5% of each utility's
16    total supply to serve the load of eligible retail customers
17    in 2015 and each year thereafter, as described in paragraph
18    (3) of this subsection (d), subject to the limits specified
19    in paragraph (2) of this subsection (d). It is the goal of
20    the State that by January 1, 2025, 25% of the electricity
21    used in the State shall be generated by cost-effective
22    clean coal facilities. For purposes of this subsection (d),
23    "cost-effective" means that the expenditures pursuant to
24    such sourcing agreements do not cause the limit stated in
25    paragraph (2) of this subsection (d) to be exceeded and do
26    not exceed cost-based benchmarks, which shall be developed

 

 

HB6561- 31 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 32 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 33 -LRB099 21551 EGJ 47886 b

1        during the year ending May 31, 2011 or 1.5% of the
2        amount paid per kilowatthour by those customers during
3        the year ending May 31, 2009;
4            (D) in 2013, the greater of an additional 0.5% of
5        the amount paid per kilowatthour by those customers
6        during the year ending May 31, 2012 or 2% of the amount
7        paid per kilowatthour by those customers during the
8        year ending May 31, 2009; and
9            (E) thereafter, the total amount paid under
10        sourcing agreements with clean coal facilities
11        pursuant to the procurement plan for any single year
12        shall be reduced by an amount necessary to limit the
13        estimated average net increase due to the cost of these
14        resources included in the amounts paid by eligible
15        retail customers in connection with electric service
16        to no more than the greater of (i) 2.015% of the amount
17        paid per kilowatthour by those customers during the
18        year ending May 31, 2009 or (ii) the incremental amount
19        per kilowatthour paid for these resources in 2013.
20        These requirements may be altered only as provided by
21        statute.
22        No later than June 30, 2015, the Commission shall
23    review the limitation on the total amount paid under
24    sourcing agreements, if any, with clean coal facilities
25    pursuant to this subsection (d) and report to the General
26    Assembly its findings as to whether that limitation unduly

 

 

HB6561- 34 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 35 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 36 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 37 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 38 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 39 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 40 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 41 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 42 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 43 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 44 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 45 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 46 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 47 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 48 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 49 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 50 -LRB099 21551 EGJ 47886 b

1    established on a cost of service basis. In the case of
2    sourcing agreements that are contracts for differences,
3    the contract price from which the reference price is
4    subtracted shall be established on a cost of service basis.
5    The Agency and the Commission may approve any such utility
6    sourcing agreements that do not exceed cost-based
7    benchmarks developed by the procurement administrator, in
8    consultation with the Commission staff, Agency staff and
9    the procurement monitor, subject to Commission review and
10    approval. The Commission shall have authority to inspect
11    all books and records associated with these clean coal
12    facilities during the term of any such contract.
13        (6) Costs incurred under this subsection (d) or
14    pursuant to a contract entered into under this subsection
15    (d) shall be deemed prudently incurred and reasonable in
16    amount and the electric utility shall be entitled to full
17    cost recovery pursuant to the tariffs filed with the
18    Commission.
19    (d-5) Low carbon portfolio standard.
20        (1) Beginning with the partial planning year
21    commencing on January 1, 2017, the procurement plans shall
22    include cost-effective low carbon energy credits from low
23    carbon energy resources in an amount equal to 70% of each
24    electric utility's annual retail sales of electricity to
25    retail customers in the State during the planning year
26    immediately prior to the development of the procurement

 

 

HB6561- 51 -LRB099 21551 EGJ 47886 b

1    plan. Provided, however, that the LCE credits must be
2    procured from generating units consistent with the Minimum
3    Internal Resource Requirements for capacity established by
4    the applicable regional transmission organization.
5        The initial procurement described in this paragraph
6    (1) shall procure the LCE credits needed during the time
7    period January 1, 2017 through May 31, 2022 by entering
8    into contracts between one and 5 years in length.
9    Notwithstanding whether a procurement event is conducted
10    pursuant to Section 16-111.5 of the Public Utilities Act,
11    the Agency and Commission shall immediately initiate an
12    initial procurement process upon the effective date of this
13    amendatory Act of the 99th General Assembly, which shall
14    procure cost-effective LCE credits from LCE resources for
15    the period January 1, 2017 through May 31, 2022, in an
16    amount equal to, for each planning year, 70% of each
17    electric utility's annual retail sales of electricity to
18    retail customers in the State during those same months in
19    the planning year immediately prior to the procurement.
20    Provided, however, that for the partial planning year
21    commencing January 1, 2017, the procurement process shall
22    procure cost-effective LCE credits from LCE resources for
23    the period January 1, 2017 through May 31, 2017, in an
24    amount equal to 70% of each electric utility's annual
25    retail sales of electricity to retail customers in the
26    State during those same months in the planning year

 

 

HB6561- 52 -LRB099 21551 EGJ 47886 b

1    immediately prior to the procurement. No later than October
2    1, 2016, the Agency shall submit to the Commission a
3    proposed initial procurement plan for the period January 1,
4    2017 through May 31, 2022 consistent with the provisions of
5    this paragraph (1). The Commission shall, after notice and
6    hearing, but no later than November 1, 2016, approve the
7    plan or approve with modification. The Agency shall conduct
8    the request for proposals process no later than December 1,
9    2016, and each utility shall enter into binding contractual
10    arrangements with the winning suppliers. The procurement
11    shall be completed no later than January 1, 2017.
12        Following the initial procurement event described in
13    this paragraph (1), the Agency and Commission shall
14    initiate additional procurement processes, as necessary,
15    to replace any LCE credits that were not delivered due to a
16    supplier default or in the event that additional LCE
17    credits must be procured for a time period commencing after
18    May 31, 2022. In the event that LCE credits must be
19    procured for a period after May 31, 2022, such credits
20    shall be procured in planning year increments. Any such
21    processes shall be conducted regardless of whether a
22    procurement event is conducted pursuant to Section
23    16-111.5 of the Public Utilities Act. Each utility shall
24    enter into binding contractual arrangements with the
25    winning suppliers.
26        For the purposes of this subsection (d-5),

 

 

HB6561- 53 -LRB099 21551 EGJ 47886 b

1    "cost-effective" means that the costs of procuring LCE
2    credits do not cause the limit stated in paragraph (2) of
3    this subsection (d-5) to be exceeded and do not exceed
4    benchmarks based on market prices for renewable energy
5    resources in the region, which shall be developed by the
6    procurement administrator, in consultation with the
7    Commission staff, the Agency, and the procurement monitor
8    and shall be subject to Commission review and approval.
9        To further ensure that customers benefit from the
10    procurement of LCE credits, winning suppliers must commit
11    to reimburse the cost of LCE credits for each planning year
12    that the forecasted average revenue for the LCE resource or
13    resources that produced such credits exceeds a set a price
14    per megawatthour. For the purposes of this paragraph (1),
15    revenue shall be based on actual forward market prices. If
16    a winning supplier's LCE credits are produced from more
17    than one LCE resource, the computation required by this
18    paragraph shall be performed by aggregating all of the LCE
19    resources that produced the winning supplier's LCE credits
20    and calculating a single value. The electric utilities
21    shall credit such amounts to customers through the
22    automatic adjustment clause authorized by subsection (k)
23    of Section 16-108 of the Public Utilities Act. Such credits
24    shall appear as a separate line item on customers' bills.
25        (2) For the purposes of this subsection (d-5), the
26    required procurement of cost-effective LCE credits for a

 

 

HB6561- 54 -LRB099 21551 EGJ 47886 b

1    particular period shall be measured as a percentage of the
2    actual amount of electricity (megawatthours) delivered by
3    the electric utility to all retail customers in the
4    planning year ending immediately prior to the procurement,
5    as incorporated in the procurement plan approved by the
6    Commission. For the purposes of this subsection (d-5), the
7    amount paid per kilowatthour means the total amount paid
8    for electric service expressed on a per kilowatthour basis.
9    For the purposes of this subsection (d-5), the total amount
10    paid for electric service includes without limitation
11    amounts paid for supply, transmission, distribution,
12    surcharges, and add-on taxes.
13        Notwithstanding the requirements of this subsection
14    (d-5), the total of LCE credits procured pursuant to the
15    procurement plan for any single year shall be subject to
16    the limitations of this paragraph (2). Such procurement
17    shall be reduced for all retail customers based on the
18    amount necessary to limit the annual estimated average net
19    increase due to the costs of these credits included in the
20    amounts paid by eligible retail customers in connection
21    with electric service to no more than 2.015% of the amount
22    paid per kilowatthour by eligible retail customers during
23    the year ending May 31, 2009. The result of this
24    computation shall apply to and reduce the procurement for
25    all retail customers, and all such customers shall pay the
26    same single, uniform cents per kilowatthour charge

 

 

HB6561- 55 -LRB099 21551 EGJ 47886 b

1    pursuant to subsection (k) of Section 16-108 of the Public
2    Utilities Act.
3        The calculations required by this paragraph (2) shall
4    be made only once for each procurement plan year at the
5    time that the LCE credits are procured. Once the
6    determination as to the amount of LCE credits to procure is
7    made based on the calculations set forth in this paragraph
8    (2) and the utility executes contracts procuring those
9    amounts, no subsequent rate impact determinations shall be
10    made and no adjustments to those contract amounts shall be
11    allowed. All costs incurred under such contracts and in
12    implementing this subsection (d-5) shall be recovered by
13    the electric utility as provided in this Section.
14        No later than June 30, 2019, the Commission shall
15    review the limitation on the amount of LCE credits procured
16    pursuant to this subsection (d-5) and report to the General
17    Assembly its findings as to whether that limitation unduly
18    constrains the procurement of cost-effective LCE credits.
19        (3) Cost-effective LCE credits procured from LCE
20    resources located in Illinois and in states that adjoin
21    Illinois may be counted towards compliance with the
22    standards set forth in paragraph (1) of this subsection
23    (d-5). If those cost-effective resources are not available
24    in Illinois or in states that adjoin Illinois, they shall
25    be purchased elsewhere and shall be counted towards
26    compliance. Notwithstanding the location from which

 

 

HB6561- 56 -LRB099 21551 EGJ 47886 b

1    cost-effective LCE credits are purchased or procured, such
2    credits shall satisfy the applicable definitions set forth
3    in Section 1-10 of this Act.
4        (4) The electric utility shall retire all LCE credits
5    used to comply with the requirements of this subsection
6    (d-5).
7        (5) Beginning April 1, 2019, and each year thereafter,
8    the Agency shall prepare a public report for the General
9    Assembly and Illinois Commerce Commission that shall
10    include, but not necessarily be limited to:
11            (A) a comparison of the costs associated with the
12        Agency's procurement of LCE credits to (1) the Agency's
13        costs associated with electricity generated by other
14        types of generation facilities and (2) the benefits
15        associated with the Agency's procurement of LCE
16        credits; and
17            (B) an analysis of the rate impacts associated with
18        the Illinois Power Agency's procurement of LCE
19        credits, including, but not limited to, any long-term
20        contracts, on the retail customers of electric
21        utilities.
22        (6) Electric utilities shall be entitled to recover all
23    of the costs associated with the procurement of LCE credits
24    through an automatic adjustment clause tariff in
25    accordance with subsection (k) of Section 16-108 of the
26    Public Utilities Act.

 

 

HB6561- 57 -LRB099 21551 EGJ 47886 b

1        (7) This subsection (d-5) is inoperative after
2    December 31, 2022 so long as the State has adopted and
3    implemented a plan pursuant to the provisions of Section
4    111(d) of the federal Clean Air Act, 42 U.S.C. 7411(d), as
5    amended. If such a plan has not been adopted and
6    implemented by December 31, 2022, this Section is
7    inoperative after December 31 of the year in which the
8    State adopts and implements such a plan.
9    (e) The draft procurement plans are subject to public
10comment, as required by Section 16-111.5 of the Public
11Utilities Act.
12    (f) The Agency shall submit the final procurement plan to
13the Commission. The Agency shall revise a procurement plan if
14the Commission determines that it does not meet the standards
15set forth in Section 16-111.5 of the Public Utilities Act.
16    (g) The Agency shall assess fees to each affected utility
17to recover the costs incurred in preparation of the annual
18procurement plan for the utility.
19    (h) The Agency shall assess fees to each bidder to recover
20the costs incurred in connection with a competitive procurement
21process.
22    (i) A renewable energy credit, carbon emission credit, or
23LCE credit can only be used once to comply with a single
24portfolio standard as set forth in subsection (c), subsection
25(d), or subsection (d-5) of this Section, respectively. A
26renewable energy credit, carbon emission credit, or LCE credit

 

 

HB6561- 58 -LRB099 21551 EGJ 47886 b

1cannot be used to satisfy the requirements of more than one
2portfolio standard. In the event more than one type of credit
3is issued for the same megawatthour of energy, only one credit
4can be used to satisfy the requirements of a single portfolio
5standard. After such use, the credit must be retired together
6with any other credits issued for the same megawatthour of
7energy.
8(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;
997-618, eff. 10-26-11; 97-658, eff. 1-13-12; 97-813, eff.
107-13-12; 98-463, eff. 8-16-13.)
 
11    Section 10. The Public Utilities Act is amended by changing
12Sections 16-108, 16-111.5, and 16-127 as follows:
 
13    (220 ILCS 5/16-108)
14    Sec. 16-108. Recovery of costs associated with the
15provision of delivery and other services.
16    (a) An electric utility shall file a delivery services
17tariff with the Commission at least 210 days prior to the date
18that it is required to begin offering such services pursuant to
19this Act. An electric utility shall provide the components of
20delivery services that are subject to the jurisdiction of the
21Federal Energy Regulatory Commission at the same prices, terms
22and conditions set forth in its applicable tariff as approved
23or allowed into effect by that Commission. The Commission shall
24otherwise have the authority pursuant to Article IX to review,

 

 

HB6561- 59 -LRB099 21551 EGJ 47886 b

1approve, and modify the prices, terms and conditions of those
2components of delivery services not subject to the jurisdiction
3of the Federal Energy Regulatory Commission, including the
4authority to determine the extent to which such delivery
5services should be offered on an unbundled basis. In making any
6such determination the Commission shall consider, at a minimum,
7the effect of additional unbundling on (i) the objective of
8just and reasonable rates, (ii) electric utility employees, and
9(iii) the development of competitive markets for electric
10energy services in Illinois.
11    (b) The Commission shall enter an order approving, or
12approving as modified, the delivery services tariff no later
13than 30 days prior to the date on which the electric utility
14must commence offering such services. The Commission may
15subsequently modify such tariff pursuant to this Act.
16    (c) The electric utility's tariffs shall define the classes
17of its customers for purposes of delivery services charges.
18Delivery services shall be priced and made available to all
19retail customers electing delivery services in each such class
20on a nondiscriminatory basis regardless of whether the retail
21customer chooses the electric utility, an affiliate of the
22electric utility, or another entity as its supplier of electric
23power and energy. Charges for delivery services shall be cost
24based, and shall allow the electric utility to recover the
25costs of providing delivery services through its charges to its
26delivery service customers that use the facilities and services

 

 

HB6561- 60 -LRB099 21551 EGJ 47886 b

1associated with such costs. Such costs shall include the costs
2of owning, operating and maintaining transmission and
3distribution facilities. The Commission shall also be
4authorized to consider whether, and if so to what extent, the
5following costs are appropriately included in the electric
6utility's delivery services rates: (i) the costs of that
7portion of generation facilities used for the production and
8absorption of reactive power in order that retail customers
9located in the electric utility's service area can receive
10electric power and energy from suppliers other than the
11electric utility, and (ii) the costs associated with the use
12and redispatch of generation facilities to mitigate
13constraints on the transmission or distribution system in order
14that retail customers located in the electric utility's service
15area can receive electric power and energy from suppliers other
16than the electric utility. Nothing in this subsection shall be
17construed as directing the Commission to allocate any of the
18costs described in (i) or (ii) that are found to be
19appropriately included in the electric utility's delivery
20services rates to any particular customer group or geographic
21area in setting delivery services rates.
22    (d) The Commission shall establish charges, terms and
23conditions for delivery services that are just and reasonable
24and shall take into account customer impacts when establishing
25such charges. In establishing charges, terms and conditions for
26delivery services, the Commission shall take into account

 

 

HB6561- 61 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 62 -LRB099 21551 EGJ 47886 b

1implement transition charges for power and energy that a retail
2customer takes from cogeneration or self-generation facilities
3located on that retail customer's premises, if such facilities
4meet the following criteria:
5        (i) the cogeneration or self-generation facilities
6    serve a single retail customer and are located on that
7    retail customer's premises (for purposes of this
8    subparagraph and subparagraph (ii), an industrial or
9    manufacturing retail customer and a third party contractor
10    that is served by such industrial or manufacturing customer
11    through such retail customer's own electrical distribution
12    facilities under the circumstances described in subsection
13    (vi) of the definition of "alternative retail electric
14    supplier" set forth in Section 16-102, shall be considered
15    a single retail customer);
16        (ii) the cogeneration or self-generation facilities
17    either (A) are sized pursuant to generally accepted
18    engineering standards for the retail customer's electrical
19    load at that premises (taking into account standby or other
20    reliability considerations related to that retail
21    customer's operations at that site) or (B) if the facility
22    is a cogeneration facility located on the retail customer's
23    premises, the retail customer is the thermal host for that
24    facility and the facility has been designed to meet that
25    retail customer's thermal energy requirements resulting in
26    electrical output beyond that retail customer's electrical

 

 

HB6561- 63 -LRB099 21551 EGJ 47886 b

1    demand at that premises, comply with the operating and
2    efficiency standards applicable to "qualifying facilities"
3    specified in title 18 Code of Federal Regulations Section
4    292.205 as in effect on the effective date of this
5    amendatory Act of 1999;
6        (iii) the retail customer on whose premises the
7    facilities are located either has an exclusive right to
8    receive, and corresponding obligation to pay for, all of
9    the electrical capacity of the facility, or in the case of
10    a cogeneration facility that has been designed to meet the
11    retail customer's thermal energy requirements at that
12    premises, an identified amount of the electrical capacity
13    of the facility, over a minimum 5-year period; and
14        (iv) if the cogeneration facility is sized for the
15    retail customer's thermal load at that premises but exceeds
16    the electrical load, any sales of excess power or energy
17    are made only at wholesale, are subject to the jurisdiction
18    of the Federal Energy Regulatory Commission, and are not
19    for the purpose of circumventing the provisions of this
20    subsection (f).
21If a generation facility located at a retail customer's
22premises does not meet the above criteria, an electric utility
23implementing transition charges shall implement a transition
24charge until December 31, 2006 for any power and energy taken
25by such retail customer from such facility as if such power and
26energy had been delivered by the electric utility. Provided,

 

 

HB6561- 64 -LRB099 21551 EGJ 47886 b

1however, that an industrial retail customer that is taking
2power from a generation facility that does not meet the above
3criteria but that is located on such customer's premises will
4not be subject to a transition charge for the power and energy
5taken by such retail customer from such generation facility if
6the facility does not serve any other retail customer and
7either was installed on behalf of the customer and for its own
8use prior to January 1, 1997, or is both predominantly fueled
9by byproducts of such customer's manufacturing process at such
10premises and sells or offers an average of 300 megawatts or
11more of electricity produced from such generation facility into
12the wholesale market. Such charges shall be calculated as
13provided in Section 16-102, and shall be collected on each
14kilowatt-hour delivered under a delivery services tariff to a
15retail customer from the date the customer first takes delivery
16services until December 31, 2006 except as provided in
17subsection (h) of this Section. Provided, however, that an
18electric utility, other than an electric utility providing
19service to at least 1,000,000 customers in this State on
20January 1, 1999, shall be entitled to petition for entry of an
21order by the Commission authorizing the electric utility to
22implement transition charges for an additional period ending no
23later than December 31, 2008. The electric utility shall file
24its petition with supporting evidence no earlier than 16
25months, and no later than 12 months, prior to December 31,
262006. The Commission shall hold a hearing on the electric

 

 

HB6561- 65 -LRB099 21551 EGJ 47886 b

1utility's petition and shall enter its order no later than 8
2months after the petition is filed. The Commission shall
3determine whether and to what extent the electric utility shall
4be authorized to implement transition charges for an additional
5period. The Commission may authorize the electric utility to
6implement transition charges for some or all of the additional
7period, and shall determine the mitigation factors to be used
8in implementing such transition charges; provided, that the
9Commission shall not authorize mitigation factors less than
10110% of those in effect during the 12 months ended December 31,
112006. In making its determination, the Commission shall
12consider the following factors: the necessity to implement
13transition charges for an additional period in order to
14maintain the financial integrity of the electric utility; the
15prudence of the electric utility's actions in reducing its
16costs since the effective date of this amendatory Act of 1997;
17the ability of the electric utility to provide safe, adequate
18and reliable service to retail customers in its service area;
19and the impact on competition of allowing the electric utility
20to implement transition charges for the additional period.
21    (g) The electric utility shall file tariffs that establish
22the transition charges to be paid by each class of customers to
23the electric utility in conjunction with the provision of
24delivery services. The electric utility's tariffs shall define
25the classes of its customers for purposes of calculating
26transition charges. The electric utility's tariffs shall

 

 

HB6561- 66 -LRB099 21551 EGJ 47886 b

1provide for the calculation of transition charges on a
2customer-specific basis for any retail customer whose average
3monthly maximum electrical demand on the electric utility's
4system during the 6 months with the customer's highest monthly
5maximum electrical demands equals or exceeds 3.0 megawatts for
6electric utilities having more than 1,000,000 customers, and
7for other electric utilities for any customer that has an
8average monthly maximum electrical demand on the electric
9utility's system of one megawatt or more, and (A) for which
10there exists data on the customer's usage during the 3 years
11preceding the date that the customer became eligible to take
12delivery services, or (B) for which there does not exist data
13on the customer's usage during the 3 years preceding the date
14that the customer became eligible to take delivery services, if
15in the electric utility's reasonable judgment there exists
16comparable usage information or a sufficient basis to develop
17such information, and further provided that the electric
18utility can require customers for which an individual
19calculation is made to sign contracts that set forth the
20transition charges to be paid by the customer to the electric
21utility pursuant to the tariff.
22    (h) An electric utility shall also be entitled to file
23tariffs that allow it to collect transition charges from retail
24customers in the electric utility's service area that do not
25take delivery services but that take electric power or energy
26from an alternative retail electric supplier or from an

 

 

HB6561- 67 -LRB099 21551 EGJ 47886 b

1electric utility other than the electric utility in whose
2service area the customer is located. Such charges shall be
3calculated, in accordance with the definition of transition
4charges in Section 16-102, for the period of time that the
5customer would be obligated to pay transition charges if it
6were taking delivery services, except that no deduction for
7delivery services revenues shall be made in such calculation,
8and usage data from the customer's class shall be used where
9historical usage data is not available for the individual
10customer. The customer shall be obligated to pay such charges
11on a lump sum basis on or before the date on which the customer
12commences to take service from the alternative retail electric
13supplier or other electric utility, provided, that the electric
14utility in whose service area the customer is located shall
15offer the customer the option of signing a contract pursuant to
16which the customer pays such charges ratably over the period in
17which the charges would otherwise have applied.
18    (i) An electric utility shall be entitled to add to the
19bills of delivery services customers charges pursuant to
20Sections 9-221, 9-222 (except as provided in Section 9-222.1),
21and Section 16-114 of this Act, Section 5-5 of the Electricity
22Infrastructure Maintenance Fee Law, Section 6-5 of the
23Renewable Energy, Energy Efficiency, and Coal Resources
24Development Law of 1997, and Section 13 of the Energy
25Assistance Act.
26    (j) If a retail customer that obtains electric power and

 

 

HB6561- 68 -LRB099 21551 EGJ 47886 b

1energy from cogeneration or self-generation facilities
2installed for its own use on or before January 1, 1997,
3subsequently takes service from an alternative retail electric
4supplier or an electric utility other than the electric utility
5in whose service area the customer is located for any portion
6of the customer's electric power and energy requirements
7formerly obtained from those facilities (including that amount
8purchased from the utility in lieu of such generation and not
9as standby power purchases, under a cogeneration displacement
10tariff in effect as of the effective date of this amendatory
11Act of 1997), the transition charges otherwise applicable
12pursuant to subsections (f), (g), or (h) of this Section shall
13not be applicable in any year to that portion of the customer's
14electric power and energy requirements formerly obtained from
15those facilities, provided, that for purposes of this
16subsection (j), such portion shall not exceed the average
17number of kilowatt-hours per year obtained from the
18cogeneration or self-generation facilities during the 3 years
19prior to the date on which the customer became eligible for
20delivery services, except as provided in subsection (f) of
21Section 16-110.
22    (k) The electric utility shall be entitled to recover
23through tariffed charges all of the costs associated with the
24purchase of low carbon energy credits from low carbon energy
25resources to meet the requirements of subsection (d-5) of
26Section 1-75 of the Illinois Power Agency Act. Such costs shall

 

 

HB6561- 69 -LRB099 21551 EGJ 47886 b

1be allocated across all retail customers through a single,
2uniform cents per kilowatt-hour charge applicable to all retail
3customers, which shall appear as a separate line item on each
4customer's bill.
5    The electric utility shall be entitled to recover all costs
6associated with the purchase of low carbon energy credits from
7low carbon energy resources through an automatic adjustment
8clause tariff applicable to all of the utility's retail
9customers that allows the electric utility to adjust its
10tariffed charges on a quarterly basis for changes in its costs
11incurred to purchase such resources and credits, if any,
12without the need to file a general delivery services rate case.
13The electric utility's collections pursuant to such an
14automatic adjustment clause tariff shall be subject to annual
15review, reconciliation, and true-up against actual costs by the
16Commission pursuant to a procedure that shall be specified in
17the electric utility's automatic adjustment clause tariff and
18that shall be approved by the Commission in connection with its
19approval of such tariff. The procedure shall provide that any
20difference between the electric utility's collection pursuant
21to the automatic adjustment charge for an annual period and the
22electric utility's actual costs of renewable energy resources
23and low carbon energy credits from low carbon energy resources
24for that same annual period shall be refunded to or collected
25from, as applicable, the electric utility's delivery services
26customers in subsequent periods.

 

 

HB6561- 70 -LRB099 21551 EGJ 47886 b

1(Source: P.A. 91-50, eff. 6-30-99; 92-690, eff. 7-18-02.)
 
2    (220 ILCS 5/16-111.5)
3    Sec. 16-111.5. Provisions relating to procurement.
4    (a) An electric utility that on December 31, 2005 served at
5least 100,000 customers in Illinois shall procure power and
6energy for its eligible retail customers in accordance with the
7applicable provisions set forth in Section 1-75 of the Illinois
8Power Agency Act and this Section and, beginning with the
9partial planning year commencing on January 1, 2017, shall
10procure low carbon energy credits from low carbon energy
11resources for all retail customers in its service area in
12accordance with the applicable provisions set forth in Section
131-75 of the Illinois Power Agency Act and this Section. A small
14multi-jurisdictional electric utility that on December 31,
152005 served less than 100,000 customers in Illinois may elect
16to procure power and energy for all or a portion of its
17eligible Illinois retail customers in accordance with the
18applicable provisions set forth in this Section and Section
191-75 of the Illinois Power Agency Act. This Section shall not
20apply to a small multi-jurisdictional utility until such time
21as a small multi-jurisdictional utility requests the Illinois
22Power Agency to prepare a procurement plan for its eligible
23retail customers. "Eligible retail customers" for the purposes
24of this Section means those retail customers that purchase
25power and energy from the electric utility under fixed-price

 

 

HB6561- 71 -LRB099 21551 EGJ 47886 b

1bundled service tariffs, other than those retail customers
2whose service is declared or deemed competitive under Section
316-113 and those other customer groups specified in this
4Section, including self-generating customers, customers
5electing hourly pricing, or those customers who are otherwise
6ineligible for fixed-price bundled tariff service. Those
7customers that are excluded from the definition of "eligible
8retail customers" shall not be included in the procurement
9plan's electric supply service plan load requirements, and the
10utility shall procure any supply requirements, including
11capacity, ancillary services, and hourly priced energy, in the
12applicable markets as needed to serve those customers, provided
13that the utility may include in its procurement plan load
14requirements for the load that is associated with those retail
15customers whose service has been declared or deemed competitive
16pursuant to Section 16-113 of this Act to the extent that those
17customers are purchasing power and energy during one of the
18transition periods identified in subsection (b) of Section
1916-113 of this Act.
20    (b) A procurement plan shall be prepared for each electric
21utility consistent with the applicable requirements of the
22Illinois Power Agency Act and this Section. For purposes of
23this Section, Illinois electric utilities that are affiliated
24by virtue of a common parent company are considered to be a
25single electric utility. Small multi-jurisdictional utilities
26may request a procurement plan for a portion of or all of its

 

 

HB6561- 72 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 73 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 74 -LRB099 21551 EGJ 47886 b

1        procuring comparable capacity products, provided that
2        such products shall:
3                (A) be procured by a demand-response provider
4            from eligible retail customers;
5                (B) at least satisfy the demand-response
6            requirements of the regional transmission
7            organization market in which the utility's service
8            territory is located, including, but not limited
9            to, any applicable capacity or dispatch
10            requirements;
11                (C) provide for customers' participation in
12            the stream of benefits produced by the
13            demand-response products;
14                (D) provide for reimbursement by the
15            demand-response provider of the utility for any
16            costs incurred as a result of the failure of the
17            supplier of such products to perform its
18            obligations thereunder; and
19                (E) meet the same credit requirements as apply
20            to suppliers of capacity, in the applicable
21            regional transmission organization market;
22            (iii) monthly forecasted system supply
23        requirements, including expected minimum, maximum, and
24        average values for the planning period;
25            (iv) the proposed mix and selection of standard
26        wholesale products for which contracts will be

 

 

HB6561- 75 -LRB099 21551 EGJ 47886 b

1        executed during the next year, separately or in
2        combination, to meet that portion of its load
3        requirements not met through pre-existing contracts,
4        including but not limited to monthly 5 x 16 peak period
5        block energy, monthly off-peak wrap energy, monthly 7 x
6        24 energy, annual 5 x 16 energy, annual off-peak wrap
7        energy, annual 7 x 24 energy, monthly capacity, annual
8        capacity, peak load capacity obligations, capacity
9        purchase plan, and ancillary services;
10            (v) proposed term structures for each wholesale
11        product type included in the proposed procurement plan
12        portfolio of products; and
13            (vi) an assessment of the price risk, load
14        uncertainty, and other factors that are associated
15        with the proposed procurement plan; this assessment,
16        to the extent possible, shall include an analysis of
17        the following factors: contract terms, time frames for
18        securing products or services, fuel costs, weather
19        patterns, transmission costs, market conditions, and
20        the governmental regulatory environment; the proposed
21        procurement plan shall also identify alternatives for
22        those portfolio measures that are identified as having
23        significant price risk.
24        (4) Proposed procedures for balancing loads. The
25    procurement plan shall include, for load requirements
26    included in the procurement plan, the process for (i)

 

 

HB6561- 76 -LRB099 21551 EGJ 47886 b

1    hourly balancing of supply and demand and (ii) the criteria
2    for portfolio re-balancing in the event of significant
3    shifts in load.
4    (c) The procurement process set forth in Section 1-75 of
5the Illinois Power Agency Act and subsection (e) of this
6Section shall be administered by a procurement administrator
7and monitored by a procurement monitor.
8        (1) The procurement administrator shall:
9            (i) design the final procurement process in
10        accordance with Section 1-75 of the Illinois Power
11        Agency Act and subsection (e) of this Section following
12        Commission approval of the procurement plan;
13            (ii) develop benchmarks in accordance with
14        subsection (e)(3) to be used to evaluate bids; these
15        benchmarks shall be submitted to the Commission for
16        review and approval on a confidential basis prior to
17        the procurement event;
18            (iii) serve as the interface between the electric
19        utility and suppliers;
20            (iv) manage the bidder pre-qualification and
21        registration process;
22            (v) obtain the electric utilities' agreement to
23        the final form of all supply contracts and credit
24        collateral agreements;
25            (vi) administer the request for proposals process;
26            (vii) have the discretion to negotiate to

 

 

HB6561- 77 -LRB099 21551 EGJ 47886 b

1        determine whether bidders are willing to lower the
2        price of bids that meet the benchmarks approved by the
3        Commission; any post-bid negotiations with bidders
4        shall be limited to price only and shall be completed
5        within 24 hours after opening the sealed bids and shall
6        be conducted in a fair and unbiased manner; in
7        conducting the negotiations, there shall be no
8        disclosure of any information derived from proposals
9        submitted by competing bidders; if information is
10        disclosed to any bidder, it shall be provided to all
11        competing bidders;
12            (viii) maintain confidentiality of supplier and
13        bidding information in a manner consistent with all
14        applicable laws, rules, regulations, and tariffs;
15            (ix) submit a confidential report to the
16        Commission recommending acceptance or rejection of
17        bids;
18            (x) notify the utility of contract counterparties
19        and contract specifics; and
20            (xi) administer related contingency procurement
21        events.
22        (2) The procurement monitor, who shall be retained by
23    the Commission, shall:
24            (i) monitor interactions among the procurement
25        administrator, suppliers, and utility;
26            (ii) monitor and report to the Commission on the

 

 

HB6561- 78 -LRB099 21551 EGJ 47886 b

1        progress of the procurement process;
2            (iii) provide an independent confidential report
3        to the Commission regarding the results of the
4        procurement event;
5            (iv) assess compliance with the procurement plans
6        approved by the Commission for each utility that on
7        December 31, 2005 provided electric service to a least
8        100,000 customers in Illinois and for each small
9        multi-jurisdictional utility that on December 31, 2005
10        served less than 100,000 customers in Illinois;
11            (v) preserve the confidentiality of supplier and
12        bidding information in a manner consistent with all
13        applicable laws, rules, regulations, and tariffs;
14            (vi) provide expert advice to the Commission and
15        consult with the procurement administrator regarding
16        issues related to procurement process design, rules,
17        protocols, and policy-related matters; and
18            (vii) consult with the procurement administrator
19        regarding the development and use of benchmark
20        criteria, standard form contracts, credit policies,
21        and bid documents.
22    (d) Except as provided in subsection (j), the planning
23process shall be conducted as follows:
24        (1) Beginning in 2008, each Illinois utility procuring
25    power pursuant to this Section shall annually provide a
26    range of load forecasts to the Illinois Power Agency by

 

 

HB6561- 79 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 80 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 81 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 82 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 83 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 84 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 85 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 86 -LRB099 21551 EGJ 47886 b

1the procurement administrator shall submit a confidential
2report to the Commission. The report shall contain the results
3of the bidding for each of the products along with the
4procurement administrator's recommendation for the acceptance
5and rejection of bids based on the price benchmark criteria and
6other factors observed in the process. The procurement monitor
7also shall submit a confidential report to the Commission
8within 2 business days after opening the sealed bids. The
9report shall contain the procurement monitor's assessment of
10bidder behavior in the process as well as an assessment of the
11procurement administrator's compliance with the procurement
12process and rules. The Commission shall review the confidential
13reports submitted by the procurement administrator and
14procurement monitor, and shall accept or reject the
15recommendations of the procurement administrator within 2
16business days after receipt of the reports.
17    (g) Within 3 business days after the Commission decision
18approving the results of a procurement event, the utility shall
19enter into binding contractual arrangements with the winning
20suppliers using the standard form contracts; except that the
21utility shall not be required either directly or indirectly to
22execute the contracts if a tariff that is consistent with
23subsection (l) of this Section has not been approved and placed
24into effect for that utility.
25    (h) The names of the successful bidders and the load
26weighted average of the winning bid prices for each contract

 

 

HB6561- 87 -LRB099 21551 EGJ 47886 b

1type and for each contract term shall be made available to the
2public at the time of Commission approval of a procurement
3event. The Commission, the procurement monitor, the
4procurement administrator, the Illinois Power Agency, and all
5participants in the procurement process shall maintain the
6confidentiality of all other supplier and bidding information
7in a manner consistent with all applicable laws, rules,
8regulations, and tariffs. Confidential information, including
9the confidential reports submitted by the procurement
10administrator and procurement monitor pursuant to subsection
11(f) of this Section, shall not be made publicly available and
12shall not be discoverable by any party in any proceeding,
13absent a compelling demonstration of need, nor shall those
14reports be admissible in any proceeding other than one for law
15enforcement purposes.
16    (i) Within 2 business days after a Commission decision
17approving the results of a procurement event or such other date
18as may be required by the Commission from time to time, the
19utility shall file for informational purposes with the
20Commission its actual or estimated retail supply charges, as
21applicable, by customer supply group reflecting the costs
22associated with the procurement and computed in accordance with
23the tariffs filed pursuant to subsection (l) of this Section
24and approved by the Commission.
25    (j) Within 60 days following the effective date of this
26amendatory Act, each electric utility that on December 31, 2005

 

 

HB6561- 88 -LRB099 21551 EGJ 47886 b

1provided electric service to at least 100,000 customers in
2Illinois shall prepare and file with the Commission an initial
3procurement plan, which shall conform in all material respects
4to the requirements of the procurement plan set forth in
5subsection (b); provided, however, that the Illinois Power
6Agency Act shall not apply to the initial procurement plan
7prepared pursuant to this subsection. The initial procurement
8plan shall identify the portfolio of power and energy products
9to be procured and delivered for the period June 2008 through
10May 2009, and shall identify the proposed procurement
11administrator, who shall have the same experience and expertise
12as is required of a procurement administrator hired pursuant to
13Section 1-75 of the Illinois Power Agency Act. Copies of the
14procurement plan shall be posted and made publicly available on
15the Commission's website. The initial procurement plan may
16include contracts for renewable resources that extend beyond
17May 2009.
18        (i) Within 14 days following filing of the initial
19    procurement plan, any person may file a detailed objection
20    with the Commission contesting the procurement plan
21    submitted by the electric utility. All objections to the
22    electric utility's plan shall be specific, supported by
23    data or other detailed analyses. The electric utility may
24    file a response to any objections to its procurement plan
25    within 7 days after the date objections are due to be
26    filed. Within 7 days after the date the utility's response

 

 

HB6561- 89 -LRB099 21551 EGJ 47886 b

1    is due, the Commission shall determine whether a hearing is
2    necessary. If it determines that a hearing is necessary, it
3    shall require the hearing to be completed and issue an
4    order on the procurement plan within 60 days after the
5    filing of the procurement plan by the electric utility.
6        (ii) The order shall approve or modify the procurement
7    plan, approve an independent procurement administrator,
8    and approve or modify the electric utility's tariffs that
9    are proposed with the initial procurement plan. The
10    Commission shall approve the procurement plan if the
11    Commission determines that it will ensure adequate,
12    reliable, affordable, efficient, and environmentally
13    sustainable electric service at the lowest total cost over
14    time, taking into account any benefits of price stability.
15    (k) In order to promote price stability for residential and
16small commercial customers during the transition to
17competition in Illinois, and notwithstanding any other
18provision of this Act, each electric utility subject to this
19Section shall enter into one or more multi-year financial swap
20contracts that become effective on the effective date of this
21amendatory Act. These contracts may be executed with generators
22and power marketers, including affiliated interests of the
23electric utility. These contracts shall be for a term of no
24more than 5 years and shall, for each respective utility or for
25any Illinois electric utilities that are affiliated by virtue
26of a common parent company and that are thereby considered a

 

 

HB6561- 90 -LRB099 21551 EGJ 47886 b

1single electric utility for purposes of this subsection (k),
2not exceed in the aggregate 3,000 megawatts for any hour of the
3year. The contracts shall be financial contracts and not energy
4sales contracts. The contracts shall be executed as
5transactions under a negotiated master agreement based on the
6form of master agreement for financial swap contracts sponsored
7by the International Swaps and Derivatives Association, Inc.
8and shall be considered pre-existing contracts in the
9utilities' procurement plans for residential and small
10commercial customers. Costs incurred pursuant to a contract
11authorized by this subsection (k) shall be deemed prudently
12incurred and reasonable in amount and the electric utility
13shall be entitled to full cost recovery pursuant to the tariffs
14filed with the Commission.
15    (k-5) In order to promote price stability for residential
16and small commercial customers during the infrastructure
17investment program described in subsection (b) of Section
1816-108.5 of this Act, and notwithstanding any other provision
19of this Act or the Illinois Power Agency Act, for each electric
20utility that serves more than one million retail customers in
21Illinois, the Illinois Power Agency shall conduct a procurement
22event within 120 days after October 26, 2011 (the effective
23date of Public Act 97-616) and may procure contracts for energy
24and renewable energy credits for the period June 1, 2013
25through December 31, 2017 that satisfy the requirements of this
26subsection (k-5), including the benchmarks described in this

 

 

HB6561- 91 -LRB099 21551 EGJ 47886 b

1subsection. These contracts shall be entered into as the result
2of a competitive procurement event, and, to the extent that any
3provisions of this Section or the Illinois Power Agency Act do
4not conflict with this subsection (k-5), such provisions shall
5apply to the procurement event. The energy contracts shall be
6for 24 hour by 7 day supply over a term that runs from the first
7delivery year through December 31, 2017. For a utility that
8serves over 2 million customers, the energy contracts shall be
9multi-year with pricing escalating at 2.5% per annum. The
10energy contracts may be designed as financial swaps or may
11require physical delivery.
12    Within 30 days of October 26, 2011 (the effective date of
13Public Act 97-616), each such utility shall submit to the
14Agency updated load forecasts for the period June 1, 2013
15through December 31, 2017. The megawatt volume of the contracts
16shall be based on the updated load forecasts of the minimum
17monthly on-peak or off-peak average load requirements shown in
18the forecasts, taking into account any existing energy
19contracts in effect as well as the expected migration of the
20utility's customers to alternative retail electric suppliers.
21The renewable energy credit volume shall be based on the number
22of credits that would satisfy the requirements of subsection
23(c) of Section 1-75 of the Illinois Power Agency Act, subject
24to the rate impact caps and other provisions of subsection (c)
25of Section 1-75 of the Illinois Power Agency Act. The
26evaluation of contract bids in the competitive procurement

 

 

HB6561- 92 -LRB099 21551 EGJ 47886 b

1events for energy and for renewable energy credits shall
2incorporate price benchmarks set collaboratively by the
3Agency, the procurement administrator, the staff of the
4Commission, and the procurement monitor. If the contracts are
5swap contracts, then they shall be executed as transactions
6under a negotiated master agreement based on the form of master
7agreement for financial swap contracts sponsored by the
8International Swaps and Derivatives Association, Inc. Costs
9incurred pursuant to a contract authorized by this subsection
10(k-5) shall be deemed prudently incurred and reasonable in
11amount and the electric utility shall be entitled to full cost
12recovery pursuant to the tariffs filed with the Commission.
13    The cost of administering the procurement event described
14in this subsection (k-5) shall be paid by the winning supplier
15or suppliers to the procurement administrator through a
16supplier fee. In the event that there is no winning supplier
17for a particular utility, such utility will pay the procurement
18administrator for the costs associated with the procurement
19event, and those costs shall not be a recoverable expense.
20Nothing in this subsection (k-5) is intended to alter the
21recovery of costs for any other procurement event.
22    (l) An electric utility shall recover its costs incurred
23under this Section, including, but not limited to, the costs of
24procuring power and energy demand-response resources under
25this Section. The utility shall file with the initial
26procurement plan its proposed tariffs through which its costs

 

 

HB6561- 93 -LRB099 21551 EGJ 47886 b

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

 

 

HB6561- 94 -LRB099 21551 EGJ 47886 b

1pass-through tariffs that are filed and approved pursuant to
2this Section shall not be subject to review under, or in any
3way limited by, Section 16-111(i) of this Act. All of the costs
4incurred by the electric utility associated with the purchase
5of low carbon energy credits in accordance with subsection
6(d-5) of Section 1-75 of the Illinois Power Agency Act shall be
7recovered through a tariff or tariffs applicable to all of the
8retail customers in the utility's service area pursuant to
9subsection (k) of Section 16-108 of this Act and shall not be
10recovered through the electric utility's tariffed charges for
11electric power and energy supply to its eligible retail
12customers.
13    (m) The Commission has the authority to adopt rules to
14carry out the provisions of this Section. For the public
15interest, safety, and welfare, the Commission also has
16authority to adopt rules to carry out the provisions of this
17Section on an emergency basis immediately following the
18effective date of this amendatory Act.
19    (n) Notwithstanding any other provision of this Act, any
20affiliated electric utilities that submit a single procurement
21plan covering their combined needs may procure for those
22combined needs in conjunction with that plan, and may enter
23jointly into power supply contracts, purchases, and other
24procurement arrangements, and allocate capacity and energy and
25cost responsibility therefor among themselves in proportion to
26their requirements.

 

 

HB6561- 95 -LRB099 21551 EGJ 47886 b

1    (o) On or before June 1 of each year, the Commission shall
2hold an informal hearing for the purpose of receiving comments
3on the prior year's procurement process and any recommendations
4for change.
5    (p) An electric utility subject to this Section may propose
6to invest, lease, own, or operate an electric generation
7facility as part of its procurement plan, provided the utility
8demonstrates that such facility is the least-cost option to
9provide electric service to eligible retail customers. If the
10facility is shown to be the least-cost option and is included
11in a procurement plan prepared in accordance with Section 1-75
12of the Illinois Power Agency Act and this Section, then the
13electric utility shall make a filing pursuant to Section 8-406
14of this Act, and may request of the Commission any statutory
15relief required thereunder. If the Commission grants all of the
16necessary approvals for the proposed facility, such supply
17shall thereafter be considered as a pre-existing contract under
18subsection (b) of this Section. The Commission shall in any
19order approving a proposal under this subsection specify how
20the utility will recover the prudently incurred costs of
21investing in, leasing, owning, or operating such generation
22facility through just and reasonable rates charged to eligible
23retail customers. Cost recovery for facilities included in the
24utility's procurement plan pursuant to this subsection shall
25not be subject to review under or in any way limited by the
26provisions of Section 16-111(i) of this Act. Nothing in this

 

 

HB6561- 96 -LRB099 21551 EGJ 47886 b

1Section is intended to prohibit a utility from filing for a
2fuel adjustment clause as is otherwise permitted under Section
39-220 of this Act.
4(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;
597-813, eff. 7-13-12.)
 
6    (220 ILCS 5/16-127)
7    Sec. 16-127. Environmental disclosure.
8    (a) Effective January 1, 2013, every electric utility and
9alternative retail electric supplier shall provide the
10following information, to the maximum extent practicable, to
11its customers on a quarterly basis:
12        (i) the known sources of electricity supplied,
13    broken-out by percentages, of biomass power, coal-fired
14    power, hydro power, natural gas-fired power, nuclear
15    power, oil-fired power, solar power, wind power and other
16    resources, respectively;
17        (ii) a pie-chart that graphically depicts the
18    percentages of the sources of the electricity supplied as
19    set forth in subparagraph (i) of this subsection; and
20        (iii) a pie-chart that graphically depicts the
21    quantity of renewable energy resources procured pursuant
22    to Section 1-75 of the Illinois Power Agency Act as a
23    percentage of electricity supplied to serve eligible
24    retail customers as defined in Section 16-111.5(a) of this
25    Act; and .

 

 

HB6561- 97 -LRB099 21551 EGJ 47886 b

1        (iv) after May 31, 2017, a pie-chart that graphically
2    depicts the quantity of low carbon energy credits from low
3    carbon energy resources procured pursuant to Section 1-75
4    of the Illinois Power Agency Act as a percentage of the
5    actual load of retail customers within its service area.
6    (b) In addition, every electric utility and alternative
7retail electric supplier shall provide, to the maximum extent
8practicable, to its customers on a quarterly basis, a
9standardized chart in a format to be determined by the
10Commission in a rule following notice and hearings which
11provides the amounts of carbon dioxide, nitrogen oxides and
12sulfur dioxide emissions and nuclear waste attributable to the
13known sources of electricity supplied as set forth in
14subparagraph (i) of subsection (a) of this Section.
15    (c) The electric utilities and alternative retail electric
16suppliers may provide their customers with such other
17information as they believe relevant to the information
18required in subsections (a) and (b) of this Section. All of the
19information required in subsections (a) and (b) of this Section
20shall be made available by the electric utilities or
21alternative retail electric suppliers either in an electronic
22medium, such as on a website or by electronic mail, or through
23the U.S. Postal Service.
24    (d) For the purposes of subsection (a) of this Section,
25"biomass" means dedicated crops grown for energy production and
26organic wastes.

 

 

HB6561- 98 -LRB099 21551 EGJ 47886 b

1    (e) All of the information provided in subsections (a) and
2(b) of this Section shall be presented to the Commission for
3inclusion in its World Wide Web Site.
4(Source: P.A. 97-1092, eff. 1-1-13.)
 
5    Section 97. Severability. The provisions of this Act are
6severable under Section 1.31 of the Statute on Statutes.
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.

 

 

HB6561- 99 -LRB099 21551 EGJ 47886 b

1 INDEX
2 Statutes amended in order of appearance
3    20 ILCS 3855/1-5
4    20 ILCS 3855/1-10
5    20 ILCS 3855/1-75
6    220 ILCS 5/16-108
7    220 ILCS 5/16-111.5
8    220 ILCS 5/16-127