SB1242 103RD GENERAL ASSEMBLY

LRB103 04778 HLH 49788 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1242

Introduced 2/2/2023, by Sen. Chapin Rose

SYNOPSIS AS INTRODUCED:

New Act

Creates the State Power Purchase Agreement Act. Provides that the Smart Energy Design Assistance Center (SEDAC) is designated as the lead agency for the development and promotion of a program to facilitate the deployment of renewable energy power purchase agreements with State agencies. Provides for the selection of qualified renewable energy power purchase agreement project developers. Allows State agencies to enter into renewable energy power purchase agreements with renewable energy developers for the construction and use of solar or wind energy, or both, on State property controlled by the State agency or on which daily operations of the State agency occur. Provides further requirements concerning the awarding of contracts to developers and purchase of power under power purchase agreements. Specifies the duration of power purchase agreement contracts. Provides for third-party financing of renewable energy power purchase agreement projects. Provides for the use of moneys saved by State agencies by entering into renewable energy power purchase agreements. Provides for reporting to the Illinois Commerce Commission. Defines terms. Effective immediately.

A BILL FOR

AN ACT concerning finance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the State Power Purchase Agreement Act.

Section 5. Purpose. The purpose of this Act is to obtain long-term energy and cost-savings for State agencies by facilitating engagement in Power Purchase Agreements in connection with buildings, facilities, and lands owned, operated, or under the supervision and control of State agencies. These agreements will improve and protect the health, safety, security, and welfare of the people of this State by promoting renewable energy deployment, reducing air emissions, and reducing costs.

Section 10. Definitions. As used in this Act:

"Renewable energy infrastructure" means solar and wind energy infrastructure constructed on State property under the provisions of a power purchase project agreement.

"Renewable energy power purchase agreement" is a long-term contract between a party that generates renewable electricity (typically an independent power developer) and a State agency that purchases electricity.

"Renewable energy power purchase agreement project developer" or "developer" means a person or organization with a record of successful deployment and operation of renewable energy power purchase agreement projects.

"Renewable energy project" means any system comprised of equipment, devices, or fuels that enable the use or storage of renewable energy sources such as wind, solar, geothermal, or biofuels.

"State agency" has the meaning provided in Section 1-7 of the Illinois State Auditing Act.

Section 15. Smart Energy Design Assistance Center (SEDAC).

(a) The Smart Energy Design Assistance Center (SEDAC) based at the University of Illinois at Urbana-Champaign is hereby designated to be the lead agency for the development and promotion of a program to facilitate the deployment of renewable energy power purchase agreements with State agencies. SEDAC will coordinate its activities with the Department of Central Management Services and other relevant State agencies, under the direction of the Governor, and will have the following duties with respect to this program:

(1) assistance to the Department of Central Management Services to assemble a list of qualified renewable energy project developers and to negotiate with such qualified project developers master service contracts and pricing schedules;

(2) development of a standardized power purchase agreement contract process and standard contract documents, including requests for qualifications, requests for proposals, and reporting metrics and content on the operations and status of the renewable energy power purchase project agreement; and

(3) promotion of the renewable energy power purchase agreements to all State agencies.

(b) SEDAC shall assist State agencies in identifying, evaluating, and implementing cost-effective renewable energy power purchase agreements at their facilities. The assistance shall include:

(1) notifying State agencies of this Act;

(2) apprising State agencies of opportunities to implement renewable energy power purchase agreements;

(3) providing technical and analytical support, including assessment and identification of site specific renewable energy opportunities;

(4) reviewing and verifying estimates for energy savings and emissions reductions; and

(5) assisting in the structuring and arranging of renewable energy power purchase agreements and projects.

(c) SEDAC is authorized to fix, charge, and collect reasonable fees, not to exceed 2% of the energy cost savings of the renewable energy power purchase agreement for any administrative or technical support provided by SEDAC, or its designee, under this subsection (c) from the State agency that uses its technical support services. State agencies are authorized to add the costs of these fees to the total cost of the renewable energy power purchase agreement.

(d) The Governor is encouraged to develop and submit to the General Assembly a regular or supplemental budget request for the additional funds and staffing required by the Smart Energy Design Assistance Center to fulfill the duties required under this Section.

Section 20. Selection of qualified renewable energy power purchase agreement project developers. The State process of implementing renewable energy power purchase agreements shall be as provided in this Section.

(a) Regarding requests for qualifications, the Department of Central Management Services is authorized to assemble a list of qualified renewable energy power purchase agreements project developers, in accordance with the provisions of the Illinois Procurement Code. The Department of Central Management Services shall attempt to use objective criteria in the selection process. The criteria for evaluation shall include substantive factors to assess the capability of the qualified renewable energy power purchase agreement project developers in the areas of design, engineering, installation, maintenance, and repairs associated with renewable energy systems. The substantive factors shall be as follows:

(1) experience in the design, implementation, and maintenance of renewable energy systems;

(2) post-installation project monitoring, data collection, and reporting of savings;

(3) overall project experience and qualifications;

(4) management capability;

(5) ability to access long-term financing;

(6) experience with projects of similar size and scope; and

(7) other factors determined by the State agency to be relevant and appropriate and relate to the ability to perform the project.

(b) Regarding requests for proposals, before entering into a renewable energy power purchase agreement under this Section, a State agency shall issue a request for proposals from up to 3 qualified renewable energy power purchase agreement project developers. A State agency may thereafter award the performance contract to the qualified purchase agreement project developer that best meets the needs of the State agency, which need not be the lowest cost provided. A cost-effective feasibility analysis shall be prepared in response to the request for proposals. The feasibility analysis included in the response to the request for proposals shall serve as the selection document for purposes of selecting a renewable energy power purchase agreement project developer to engage in final contract negotiations. Factors to be included in selecting among the renewable energy power purchase agreement project developers include contract terms, comprehensiveness of the proposal, technical feasibility, experience, and overall benefits to the State agency.

Section 25. Renewable energy power purchase agreement projects.

(a) Subject to the provisions of Section 20, a State agency may enter into a renewable energy power purchase agreement with renewable energy developers for the construction and use of solar or wind energy, or both, on State property controlled by the State agency or on which daily operations of the State agency occur.

(b) State agencies choosing to enter into a renewable energy power purchase agreement under subsection (a) shall enter into such agreement with a developer chosen through a process in accordance with Section 20 and otherwise meeting the requirements of the Illinois Procurement Code regarding requests for proposals. A developer bidding for a contract under this Section shall include a list of potential third-party investors that would be ready and willing to invest in the project upon awarding of the contract. A bid made without a list of potential investors shall not be accepted and no contract shall be awarded.

(c) The developer awarded a contract under subsection (b) shall be provided land and facility access to the property used by the State agency for the purpose of constructing and managing a renewable energy infrastructure. The State agency, based upon the renewable energy power purchase agreement, shall then be able to purchase the power produced by the renewable energy infrastructure from the developer at a lower rate than it would otherwise pay for power. The developer shall be responsible for the construction and management of the renewable energy infrastructure on property used by the State agency.

(d) Upon the awarding of a contract under subsection (b), and in addition to the provisions of subsection (c), the potential investors listed in the developer's bid shall be contacted for the purposes of investing capital toward the construction and operation of a renewable energy infrastructure on property used by the State agency as provided under the renewable energy power purchase agreement. The investor shall be compensated through a subsequent contract entered into between the investor and the State agency. Failure of the developer to secure an investor provided for in its bid may, at the discretion of the State agency, render the contract between the developer and the State agency void.

(e) No State agency that has entered into a renewable energy power purchase agreement under this Section shall purchase more power than is that State agency's normal consumption for a given yearly period, nor shall that State agency contract for the construction of renewable energy infrastructure estimated to produce more power than is that State agency's normal consumption for a given yearly period.

(f) Each State agency that has entered into a renewable energy power purchase agreement under this Section shall, within 2 years after entering into the agreement, issue a report to the General Assembly on the operations and status of the renewable energy power purchase agreement.

Section 30. Duration of contracts; financing. A renewable energy power purchase agreement, and payments provided thereunder, shall extend for periods of between 5 and 25 years. The allowable length of the contract may also reflect the useful life of renewable energy equipment and facilities. A renewable energy power purchase agreement may provide for financing, including tax incentives by a third party. The contract for third-party financing may be separate from the renewable energy power purchase agreement. A separate contract for third-party financing must include a provision that the third-party financier must not be granted rights or privileges that exceed the rights and privileges available to the renewable energy power purchase agreement project developer.

Section 35. Use of moneys. The State agency engaging in the renewable energy power purchase agreement shall retain the savings achieved by entering into the renewable energy power purchase agreement contract. State agencies are encouraged to reinvest savings wherever practical into additional cost savings measures. Unless otherwise provided by law, a State agency shall use funds designated for operating and capital expenditures or utilities for any renewable energy power purchase agreement.

Section 40. Reports. For all projects carried out under this Act, the State agency shall report the name of the project, the project host, the investment on the project, the energy savings, the energy cost savings, and the greenhouse gas emission reductions to the Illinois Commerce Commission. The Illinois Commerce Commission may report energy savings and greenhouse gas emission reductions to the federal Energy Information Administration under the Energy Policy Act of 1992 reporting standards.

Section 99. Effective date. This Act takes effect upon becoming law.