Illinois General Assembly - Full Text of HB6267
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Full Text of HB6267  96th General Assembly

HB6267sam003 96TH GENERAL ASSEMBLY

Sen. James F. Clayborne, Jr.

Filed: 12/1/2010

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 6267

2    AMENDMENT NO. ______. Amend House Bill 6267, AS AMENDED,
3immediately above Section 5, by inserting the following:
 
4    "Section 3. If and only if Senate Bill 3388 of the 96th
5General Assembly (as amended by House Amendment Nos. 1, 2, and
63) becomes law, then the Illinois Power Agency Act is amended
7by changing Section 1-10 as follows:
 
8    (20 ILCS 3855/1-10)
9    Sec. 1-10. Definitions.
10    "Agency" means the Illinois Power Agency.
11    "Agency loan agreement" means any agreement pursuant to
12which the Illinois Finance Authority agrees to loan the
13proceeds of revenue bonds issued with respect to a project to
14the Agency upon terms providing for loan repayment installments
15at least sufficient to pay when due all principal of, interest
16and premium, if any, on those revenue bonds, and providing for

 

 

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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

 

 

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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, 2014 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; and (4) captures and sequesters at least
1385% of the total carbon dioxide emissions that the facility
14would otherwise emit.
15    "Clean coal SNG facility" means a facility that uses a
16gasification process to produce substitute natural gas, that
17sequesters at least 85% 90% of the total carbon dioxide
18emissions that the facility would otherwise emit and that uses
19and that uses petroleum coke or coal as a feedstock, with all
20such coal having a high bituminous rank and greater than 1.7
21pounds of sulfur per million btu content and has commenced
22construction by July 1, 2012 in Jefferson County; provided,
23however, a clean coal SNG brownfield facility shall not be a
24clean coal SNG facility may elect to be a clean coal SNG
25brownfield facility.
26    "Commission" means the Illinois Commerce Commission.

 

 

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1    "Costs incurred in connection with the development and
2construction of a facility" means:
3        (1) the cost of acquisition of all real property,
4    fixtures, and improvements in connection therewith and
5    equipment, personal property, and other property, rights,
6    and easements acquired that are deemed necessary for the
7    operation and maintenance of the facility;
8        (2) financing costs with respect to bonds, notes, and
9    other evidences of indebtedness of the Agency;
10        (3) all origination, commitment, utilization,
11    facility, placement, underwriting, syndication, credit
12    enhancement, and rating agency fees;
13        (4) engineering, design, procurement, consulting,
14    legal, accounting, title insurance, survey, appraisal,
15    escrow, trustee, collateral agency, interest rate hedging,
16    interest rate swap, capitalized interest, contingency, as
17    required by lenders, and other financing costs, and other
18    expenses for professional services; and
19        (5) the costs of plans, specifications, site study and
20    investigation, installation, surveys, other Agency costs
21    and estimates of costs, and other expenses necessary or
22    incidental to determining the feasibility of any project,
23    together with such other expenses as may be necessary or
24    incidental to the financing, insuring, acquisition, and
25    construction of a specific project and starting up,
26    commissioning, and placing that project in operation.

 

 

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1    "Department" means the Department of Commerce and Economic
2Opportunity.
3    "Director" means the Director of the Illinois Power Agency.
4    "Demand-response" means measures that decrease peak
5electricity demand or shift demand from peak to off-peak
6periods.
7    "Energy efficiency" means measures that reduce the amount
8of electricity or natural gas required to achieve a given end
9use.
10    "Electric utility" has the same definition as found in
11Section 16-102 of the Public Utilities Act.
12    "Facility" means an electric generating unit or a
13co-generating unit that produces electricity along with
14related equipment necessary to connect the facility to an
15electric transmission or distribution system.
16    "Governmental aggregator" means one or more units of local
17government that individually or collectively procure
18electricity to serve residential retail electrical loads
19located within its or their jurisdiction.
20    "Local government" means a unit of local government as
21defined in Article VII of Section 1 of the Illinois
22Constitution.
23    "Municipality" means a city, village, or incorporated
24town.
25    "Person" means any natural person, firm, partnership,
26corporation, either domestic or foreign, company, association,

 

 

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1limited liability company, joint stock company, or association
2and includes any trustee, receiver, assignee, or personal
3representative thereof.
4    "Project" means the planning, bidding, and construction of
5a facility.
6    "Public utility" has the same definition as found in
7Section 3-105 of the Public Utilities Act.
8    "Real property" means any interest in land together with
9all structures, fixtures, and improvements thereon, including
10lands under water and riparian rights, any easements,
11covenants, licenses, leases, rights-of-way, uses, and other
12interests, together with any liens, judgments, mortgages, or
13other claims or security interests related to real property.
14    "Renewable energy credit" means a tradable credit that
15represents the environmental attributes of a certain amount of
16energy produced from a renewable energy resource.
17    "Renewable energy resources" includes energy and its
18associated renewable energy credit or renewable energy credits
19from wind, solar thermal energy, photovoltaic cells and panels,
20biodiesel, crops and untreated and unadulterated organic waste
21biomass, tree waste, hydropower that does not involve new
22construction or significant expansion of hydropower dams, and
23other alternative sources of environmentally preferable
24energy. For purposes of this Act, landfill gas produced in the
25State is considered a renewable energy resource. "Renewable
26energy resources" does not include the incineration or burning

 

 

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1of tires, garbage, general household, institutional, and
2commercial waste, industrial lunchroom or office waste,
3landscape waste other than tree waste, railroad crossties,
4utility poles, or construction or demolition debris, other than
5untreated and unadulterated waste wood.
6    "Revenue bond" means any bond, note, or other evidence of
7indebtedness issued by the Authority, the principal and
8interest of which is payable solely from revenues or income
9derived from any project or activity of the Agency.
10    "Sequester" means permanent storage of carbon dioxide by
11injecting it into a saline aquifer, a depleted gas reservoir,
12or an oil reservoir, directly or through an enhanced oil
13recovery process that may involve intermediate storage,
14regardless of whether these activities are conducted by a clean
15coal facility, clean coal SNG facility, clean coal SNG
16brownfield facility, or a party with which a clean coal
17facility, clean coal SNG facility, or clean coal SNG brownfield
18facility has contracted for such purposes.
19    "Sourcing agreement" means (i) in the case of an electric
20utility, an agreement between the owner of a clean coal
21facility and such electric utility, which agreement shall have
22terms and conditions meeting the requirements of paragraph (3)
23of subsection (d) of Section 1-75, (ii) in the case of an
24alternative retail electric supplier, an agreement between the
25owner of a clean coal facility and such alternative retail
26electric supplier, which agreement shall have terms and

 

 

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1conditions meeting the requirements of Section 16-115(d)(5) of
2the Public Utilities Act, and (iii) in case of a gas utility,
3an agreement between the owner of a clean coal SNG brownfield
4facility and the gas utility, which agreement shall have the
5terms and conditions meeting the requirements of subsection
6(h-1) of Section 9-220 of the Public Utilities Act.
7    "Substitute natural gas" or "SNG" means a gas manufactured
8by gasification of hydrocarbon feedstock, which is
9substantially interchangeable in use and distribution with
10conventional natural gas.
11    "Total resource cost test" or "TRC test" means a standard
12that is met if, for an investment in energy efficiency or
13demand-response measures, the benefit-cost ratio is greater
14than one. The benefit-cost ratio is the ratio of the net
15present value of the total benefits of the program to the net
16present value of the total costs as calculated over the
17lifetime of the measures. A total resource cost test compares
18the sum of avoided electric utility costs, representing the
19benefits that accrue to the system and the participant in the
20delivery of those efficiency measures, as well as other
21quantifiable societal benefits, including avoided natural gas
22utility costs, to the sum of all incremental costs of end-use
23measures that are implemented due to the program (including
24both utility and participant contributions), plus costs to
25administer, deliver, and evaluate each demand-side program, to
26quantify the net savings obtained by substituting the

 

 

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1demand-side program for supply resources. In calculating
2avoided costs of power and energy that an electric utility
3would otherwise have had to acquire, reasonable estimates shall
4be included of financial costs likely to be imposed by future
5regulations and legislation on emissions of greenhouse gases.
6(Source: P.A. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09;
795-1027, eff. 6-1-09; 96-33, eff. 7-10-09; 96-159, eff.
88-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10;
909600SB3388ham001 and ham003.)
 
10    Section 4. If and only if Senate Bill 3388 of the 96th
11General Assembly (as amended by House Amendment Nos. 1, 2, and
123), then the Public Utilities Act is amended by changing
13Section 9-220 as follows:
 
14    (220 ILCS 5/9-220)  (from Ch. 111 2/3, par. 9-220)
15    Sec. 9-220. Rate changes based on changes in fuel costs.
16    (a) Notwithstanding the provisions of Section 9-201, the
17Commission may authorize the increase or decrease of rates and
18charges based upon changes in the cost of fuel used in the
19generation or production of electric power, changes in the cost
20of purchased power, or changes in the cost of purchased gas
21through the application of fuel adjustment clauses or purchased
22gas adjustment clauses. The Commission may also authorize the
23increase or decrease of rates and charges based upon
24expenditures or revenues resulting from the purchase or sale of

 

 

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1emission allowances created under the federal Clean Air Act
2Amendments of 1990, through such fuel adjustment clauses, as a
3cost of fuel. For the purposes of this paragraph, cost of fuel
4used in the generation or production of electric power shall
5include the amount of any fees paid by the utility for the
6implementation and operation of a process for the
7desulfurization of the flue gas when burning high sulfur coal
8at any location within the State of Illinois irrespective of
9the attainment status designation of such location; but shall
10not include transportation costs of coal (i) except to the
11extent that for contracts entered into on and after the
12effective date of this amendatory Act of 1997, the cost of the
13coal, including transportation costs, constitutes the lowest
14cost for adequate and reliable fuel supply reasonably available
15to the public utility in comparison to the cost, including
16transportation costs, of other adequate and reliable sources of
17fuel supply reasonably available to the public utility, or (ii)
18except as otherwise provided in the next 3 sentences of this
19paragraph. Such costs of fuel shall, when requested by a
20utility or at the conclusion of the utility's next general
21electric rate proceeding, whichever shall first occur, include
22transportation costs of coal purchased under existing coal
23purchase contracts. For purposes of this paragraph "existing
24coal purchase contracts" means contracts for the purchase of
25coal in effect on the effective date of this amendatory Act of
261991, as such contracts may thereafter be amended, but only to

 

 

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1the extent that any such amendment does not increase the
2aggregate quantity of coal to be purchased under such contract.
3Nothing herein shall authorize an electric utility to recover
4through its fuel adjustment clause any amounts of
5transportation costs of coal that were included in the revenue
6requirement used to set base rates in its most recent general
7rate proceeding. Cost shall be based upon uniformly applied
8accounting principles. Annually, the Commission shall initiate
9public hearings to determine whether the clauses reflect actual
10costs of fuel, gas, power, or coal transportation purchased to
11determine whether such purchases were prudent, and to reconcile
12any amounts collected with the actual costs of fuel, power,
13gas, or coal transportation prudently purchased. In each such
14proceeding, the burden of proof shall be upon the utility to
15establish the prudence of its cost of fuel, power, gas, or coal
16transportation purchases and costs. The Commission shall issue
17its final order in each such annual proceeding for an electric
18utility by December 31 of the year immediately following the
19year to which the proceeding pertains, provided, that the
20Commission shall issue its final order with respect to such
21annual proceeding for the years 1996 and earlier by December
2231, 1998.
23    (b) A public utility providing electric service, other than
24a public utility described in subsections (e) or (f) of this
25Section, may at any time during the mandatory transition period
26file with the Commission proposed tariff sheets that eliminate

 

 

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1the public utility's fuel adjustment clause and adjust the
2public utility's base rate tariffs by the amount necessary for
3the base fuel component of the base rates to recover the public
4utility's average fuel and power supply costs per kilowatt-hour
5for the 2 most recent years for which the Commission has issued
6final orders in annual proceedings pursuant to subsection (a),
7where the average fuel and power supply costs per kilowatt-hour
8shall be calculated as the sum of the public utility's prudent
9and allowable fuel and power supply costs as found by the
10Commission in the 2 proceedings divided by the public utility's
11actual jurisdictional kilowatt-hour sales for those 2 years.
12Notwithstanding any contrary or inconsistent provisions in
13Section 9-201 of this Act, in subsection (a) of this Section or
14in any rules or regulations promulgated by the Commission
15pursuant to subsection (g) of this Section, the Commission
16shall review and shall by order approve, or approve as
17modified, the proposed tariff sheets within 60 days after the
18date of the public utility's filing. The Commission may modify
19the public utility's proposed tariff sheets only to the extent
20the Commission finds necessary to achieve conformance to the
21requirements of this subsection (b). During the 5 years
22following the date of the Commission's order, but in any event
23no earlier than January 1, 2007, a public utility whose fuel
24adjustment clause has been eliminated pursuant to this
25subsection shall not file proposed tariff sheets seeking, or
26otherwise petition the Commission for, reinstatement of a fuel

 

 

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1adjustment clause.
2    (c) Notwithstanding any contrary or inconsistent
3provisions in Section 9-201 of this Act, in subsection (a) of
4this Section or in any rules or regulations promulgated by the
5Commission pursuant to subsection (g) of this Section, a public
6utility providing electric service, other than a public utility
7described in subsection (e) or (f) of this Section, may at any
8time during the mandatory transition period file with the
9Commission proposed tariff sheets that establish the rate per
10kilowatt-hour to be applied pursuant to the public utility's
11fuel adjustment clause at the average value for such rate
12during the preceding 24 months, provided that such average rate
13results in a credit to customers' bills, without making any
14revisions to the public utility's base rate tariffs. The
15proposed tariff sheets shall establish the fuel adjustment rate
16for a specific time period of at least 3 years but not more
17than 5 years, provided that the terms and conditions for any
18reinstatement earlier than 5 years shall be set forth in the
19proposed tariff sheets and subject to modification or approval
20by the Commission. The Commission shall review and shall by
21order approve the proposed tariff sheets if it finds that the
22requirements of this subsection are met. The Commission shall
23not conduct the annual hearings specified in the last 3
24sentences of subsection (a) of this Section for the utility for
25the period that the factor established pursuant to this
26subsection is in effect.

 

 

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1    (d) A public utility providing electric service, or a
2public utility providing gas service may file with the
3Commission proposed tariff sheets that eliminate the public
4utility's fuel or purchased gas adjustment clause and adjust
5the public utility's base rate tariffs to provide for recovery
6of power supply costs or gas supply costs that would have been
7recovered through such clause; provided, that the provisions of
8this subsection (d) shall not be available to a public utility
9described in subsections (e) or (f) of this Section to
10eliminate its fuel adjustment clause. Notwithstanding any
11contrary or inconsistent provisions in Section 9-201 of this
12Act, in subsection (a) of this Section, or in any rules or
13regulations promulgated by the Commission pursuant to
14subsection (g) of this Section, the Commission shall review and
15shall by order approve, or approve as modified in the
16Commission's order, the proposed tariff sheets within 240 days
17after the date of the public utility's filing. The Commission's
18order shall approve rates and charges that the Commission,
19based on information in the public utility's filing or on the
20record if a hearing is held by the Commission, finds will
21recover the reasonable, prudent and necessary jurisdictional
22power supply costs or gas supply costs incurred or to be
23incurred by the public utility during a 12 month period found
24by the Commission to be appropriate for these purposes,
25provided, that such period shall be either (i) a 12 month
26historical period occurring during the 15 months ending on the

 

 

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1date of the public utility's filing, or (ii) a 12 month future
2period ending no later than 15 months following the date of the
3public utility's filing. The public utility shall include with
4its tariff filing information showing both (1) its actual
5jurisdictional power supply costs or gas supply costs for a 12
6month historical period conforming to (i) above and (2) its
7projected jurisdictional power supply costs or gas supply costs
8for a future 12 month period conforming to (ii) above. If the
9Commission's order requires modifications in the tariff sheets
10filed by the public utility, the public utility shall have 7
11days following the date of the order to notify the Commission
12whether the public utility will implement the modified tariffs
13or elect to continue its fuel or purchased gas adjustment
14clause in force as though no order had been entered. The
15Commission's order shall provide for any reconciliation of
16power supply costs or gas supply costs, as the case may be, and
17associated revenues through the date that the public utility's
18fuel or purchased gas adjustment clause is eliminated. During
19the 5 years following the date of the Commission's order, a
20public utility whose fuel or purchased gas adjustment clause
21has been eliminated pursuant to this subsection shall not file
22proposed tariff sheets seeking, or otherwise petition the
23Commission for, reinstatement or adoption of a fuel or
24purchased gas adjustment clause. Nothing in this subsection (d)
25shall be construed as limiting the Commission's authority to
26eliminate a public utility's fuel adjustment clause or

 

 

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1purchased gas adjustment clause in accordance with any other
2applicable provisions of this Act.
3    (e) Notwithstanding any contrary or inconsistent
4provisions in Section 9-201 of this Act, in subsection (a) of
5this Section, or in any rules promulgated by the Commission
6pursuant to subsection (g) of this Section, a public utility
7providing electric service to more than 1,000,000 customers in
8this State may, within the first 6 months after the effective
9date of this amendatory Act of 1997, file with the Commission
10proposed tariff sheets that eliminate, effective January 1,
111997, the public utility's fuel adjustment clause without
12adjusting its base rates, and such tariff sheets shall be
13effective upon filing. To the extent the application of the
14fuel adjustment clause had resulted in net charges to customers
15after January 1, 1997, the utility shall also file a tariff
16sheet that provides for a refund stated on a per kilowatt-hour
17basis of such charges over a period not to exceed 6 months;
18provided however, that such refund shall not include the
19proportional amounts of taxes paid under the Use Tax Act,
20Service Use Tax Act, Service Occupation Tax Act, and Retailers'
21Occupation Tax Act on fuel used in generation. The Commission
22shall issue an order within 45 days after the date of the
23public utility's filing approving or approving as modified such
24tariff sheet. If the fuel adjustment clause is eliminated
25pursuant to this subsection, the Commission shall not conduct
26the annual hearings specified in the last 3 sentences of

 

 

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1subsection (a) of this Section for the utility for any period
2after December 31, 1996 and prior to any reinstatement of such
3clause. A public utility whose fuel adjustment clause has been
4eliminated pursuant to this subsection shall not file a
5proposed tariff sheet seeking, or otherwise petition the
6Commission for, reinstatement of the fuel adjustment clause
7prior to January 1, 2007.
8    (f) Notwithstanding any contrary or inconsistent
9provisions in Section 9-201 of this Act, in subsection (a) of
10this Section, or in any rules or regulations promulgated by the
11Commission pursuant to subsection (g) of this Section, a public
12utility providing electric service to more than 500,000
13customers but fewer than 1,000,000 customers in this State may,
14within the first 6 months after the effective date of this
15amendatory Act of 1997, file with the Commission proposed
16tariff sheets that eliminate, effective January 1, 1997, the
17public utility's fuel adjustment clause and adjust its base
18rates by the amount necessary for the base fuel component of
19the base rates to recover 91% of the public utility's average
20fuel and power supply costs for the 2 most recent years for
21which the Commission, as of January 1, 1997, has issued final
22orders in annual proceedings pursuant to subsection (a), where
23the average fuel and power supply costs per kilowatt-hour shall
24be calculated as the sum of the public utility's prudent and
25allowable fuel and power supply costs as found by the
26Commission in the 2 proceedings divided by the public utility's

 

 

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1actual jurisdictional kilowatt-hour sales for those 2 years,
2provided, that such tariff sheets shall be effective upon
3filing. To the extent the application of the fuel adjustment
4clause had resulted in net charges to customers after January
51, 1997, the utility shall also file a tariff sheet that
6provides for a refund stated on a per kilowatt-hour basis of
7such charges over a period not to exceed 6 months. Provided
8however, that such refund shall not include the proportional
9amounts of taxes paid under the Use Tax Act, Service Use Tax
10Act, Service Occupation Tax Act, and Retailers' Occupation Tax
11Act on fuel used in generation. The Commission shall issue an
12order within 45 days after the date of the public utility's
13filing approving or approving as modified such tariff sheet. If
14the fuel adjustment clause is eliminated pursuant to this
15subsection, the Commission shall not conduct the annual
16hearings specified in the last 3 sentences of subsection (a) of
17this Section for the utility for any period after December 31,
181996 and prior to any reinstatement of such clause. A public
19utility whose fuel adjustment clause has been eliminated
20pursuant to this subsection shall not file a proposed tariff
21sheet seeking, or otherwise petition the Commission for,
22reinstatement of the fuel adjustment clause prior to January 1,
232007.
24    (g) The Commission shall have authority to promulgate rules
25and regulations to carry out the provisions of this Section.
26    (h) Any Illinois gas utility may enter into a contract on

 

 

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1or before March 31, 2011 for up to 10 years of supply with any
2company for the purchase of substitute natural gas (SNG)
3produced from coal through the gasification process if the
4company has commenced construction of a coal gasification
5facility by July 1, 2012 in Jefferson County and commencement
6of construction shall mean that material physical site work has
7occurred, such as site clearing and excavation, water runoff
8prevention, water retention reservoir preparation, or
9foundation development. The contract shall contain the
10following provisions: (i) the only coal to be used in the
11gasification process has high volatile bituminous rank and
12greater than 1.7 pounds of sulfur per million Btu content; (ii)
13at the time the contract term commences, the price per million
14Btu may not exceed $7.95 in 2008 dollars, adjusted annually
15based on the change in the Annual Consumer Price Index for All
16Urban Consumers for the Midwest Region as published in April by
17the United States Department of Labor, Bureau of Labor
18Statistics (or a suitable Consumer Price Index calculation if
19this Consumer Price Index is not available) for the previous
20calendar year; provided that the price per million Btu shall
21not exceed $9.95 at any time during the contract; (iii) the
22utility's aggregate long-term supply contracts for the
23purchase of SNG does not exceed 25% of the annual system supply
24requirements of the utility as of 2008 and the quantity of SNG
25supplied to a utility may not exceed 16 million MMBtus; and
26(iv) contract costs pursuant to subsection (h-10) of this

 

 

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1Section shall not include any lobbying expenses, charitable
2contributions, advertising, organizational memberships, or
3marketing expenses per year.
4    (h-1) Any Illinois gas utility may enter into a sourcing
5agreement for up to 30 years of supply with a the clean coal
6SNG brownfield facility if the clean coal SNG brownfield
7facility has commenced construction. Any gas utility that is
8providing service to more than 150,000 customers on the
9effective date of this amendatory Act of the 96th General
10Assembly shall either elect to file biennial rate proceedings
11before the Commission in the years 2011, 2013, and 2015 or
12enter into a sourcing agreement or sourcing agreements with all
13a clean coal SNG brownfield facilities each facility for 30
14years for either (i) 43,500,000,000 cubic feet per year times a
15percentage calculated by dividing 100 by the number of
16utilities entering into sourcing agreements with the clean coal
17SNG brownfield facility or (ii) such lesser amount as may be
18available from the clean coal SNG brownfield facility.
19    Provided, however, that the Illinois Power Agency may
20allocate the purchase obligations more proportionately based
21upon total therms sold to ultimate customers, if it is
22demonstrated with certainty that such alternative allocation
23will not result in adverse consolidation, derivative, or lease
24impacts to the balance sheet or income statement of any
25purchasing utility. In any event, no utility shall be required
26to purchase more than 42% of the projected annual output of the

 

 

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1clean coal SNG brownfield facility, with the remainder of such
2utility's obligation to be divided proportionately between the
3other utilities.
4    A gas utility electing to file biennial rate proceedings
5before the Commission must file a notice of its election with
6the Commission within 60 days after the effective date of this
7amendatory Act of the 96th General Assembly or its right to
8make the election is irrevocably waived. A gas utility electing
9to file biennial rate proceedings shall make such filings no
10later than August 1 of the years 2011, 2013, and 2015,
11consistent with all requirements of 83 Ill. Adm. Code 255 and
12285 as though the gas utility were filing for an increase in
13its rates, without regard to whether such filing would produce
14an increase, a decrease, or no change in the gas utility's
15rates, and the Commission shall review the gas utility's filing
16and shall issue its order in accordance with the provisions of
17Section 9-201 of this Act.
18    Within 15 days after the effective date of this amendatory
19Act of the 96th General Assembly, the owner of the clean coal
20SNG brownfield facility shall submit to the Illinois Power
21Agency and each gas utility that is providing service to more
22than 150,000 customers on the effective date of this amendatory
23Act of the 96th General Assembly a copy of a draft sourcing
24agreement. Within 45 days after receipt of the draft sourcing
25agreement, each such gas utility shall provide the Illinois
26Power Agency and the owner of a clean coal SNG brownfield

 

 

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1facility with its comments and recommended revisions to the
2draft sourcing agreement. Within 15 days after the receipt of
3the gas utility's comments and recommended revisions, the owner
4of the clean coal SNG brownfield facility shall submit its
5responsive comments and a further revised draft of the sourcing
6agreement to the Illinois Power Agency. The Illinois Power
7Agency shall review the draft sourcing agreement and comments.
8    If the parties to the sourcing agreement do not agree on
9the terms therein, then the Illinois Power Agency shall retain
10an independent mediator to mediate the dispute between the
11parties. If the parties are in agreement on the terms of the
12sourcing agreement, the Illinois Power Agency shall approve the
13final draft sourcing agreement. If after mediation the parties
14have failed to come to agreement, then the Illinois Power
15Agency shall revise the draft sourcing agreement as necessary
16to confirm that the final draft sourcing agreement contains
17only terms that are reasonable and equitable. The Illinois
18Power Agency shall adopt and make public a policy detailing the
19process for retaining a mediator under this subsection (h-1).
20Any mediator retained to assist with mediating disputes between
21the parties regarding the sourcing agreement shall be retained
22no later than 60 days after the effective date of this
23amendatory Act of the 96th General Assembly.
24    Upon approval of a final draft agreement, the Illinois
25Power Agency shall submit the final draft agreement to the
26Capital Development Board and the Commission no later than 90

 

 

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1days after the effective date of this amendatory Act of the
296th General Assembly. The gas utility and the clean coal SNG
3brownfield facility shall pay a reasonable fee as required by
4the Illinois Power Agency for its services under this
5subsection (h-1) and shall pay the mediator's reasonable fees,
6if any. The Illinois Power Agency shall adopt and make public a
7policy detailing the process for retaining a mediator under
8this Section.
9    The sourcing agreement between a gas utility and the clean
10coal SNG brownfield facility shall contain the following
11provisions:
12        (1) Any and all coal used in the gasification process
13    must be coal that has high volatile bituminous rank and
14    greater than 1.7 pounds of sulfur per million Btu content.
15        (2) Coal and petroleum coke are feedstocks for the
16    gasification process, with coal comprising at least 50% of
17    the total feedstock over the term of the sourcing agreement
18    and with the feedstocks to be procured in accordance with
19    requirements of Section 1-78 of the Illinois Power Agency
20    Act.
21        (3) The sourcing agreement once entered into
22    terminates no more than 30 years after the commencement of
23    the commercial production of SNG at the clean coal SNG
24    brownfield facility.
25        (4) The clean coal SNG brownfield facility guarantees a
26    minimum of $100,000,000 in consumer savings, calculated in

 

 

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1    real 2010 dollars at the conclusion of the term of the
2    sourcing agreement by comparing the delivered SNG price to
3    the Chicago City-gate price on a weighted daily basis for
4    each day over the entire term of the sourcing agreement, to
5    be provided in accordance with subsection (h-2) of this
6    Section.
7        (5) Prior to the clean coal SNG brownfield facility
8    issuing a notice to proceed to construction, the clean coal
9    SNG brownfield facility shall establish a consumer
10    protection reserve account for the benefit of the customers
11    of the utilities that have entered into sourcing agreements
12    with the clean coal SNG brownfield facility pursuant to
13    this subsection (h-1), with cash principal in the amount of
14    $150,000,000. This cash principal shall only be
15    recoverable through the consumer protection reserve
16    account and not as a cost to be recovered in the delivered
17    SNG price pursuant to subsection (h-3) of this Section. The
18    consumer protection reserve account shall be maintained
19    and administered by an independent trustee that is mutually
20    agreed upon by the clean coal SNG brownfield facility, the
21    utilities, and the Commission in an interest-bearing
22    account in accordance with subsection (h-2) of this
23    Section.
24        (6) The clean coal SNG brownfield facility shall
25    identify and sell economically viable by-products produced
26    by the facility.

 

 

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1        (7) 50% of all additional net revenue, defined as
2    miscellaneous net revenue after cost allowance for costs
3    associated with additional net revenue that are not
4    otherwise recoverable pursuant to subsection (h-3) of this
5    Section, including net revenue from sales of substitute
6    natural gas derived from the facility above the nameplate
7    capacity of the facility and other by-products produced by
8    the facility, shall be credited to the consumer protection
9    reserve account pursuant to subsection (h-2) of this
10    Section.
11        (8) The delivered SNG price per million btu to be paid
12    monthly by the utility to the clean coal SNG brownfield
13    facility, which shall be based only upon the following: (A)
14    a capital recovery charge, operations and maintenance
15    costs, and sequestration costs, only to the extent approved
16    by the Commission pursuant to paragraphs (1), (2), and (3)
17    of subsection (h-3) of this Section; (B) the actual
18    delivered and processed fuel costs pursuant to paragraph
19    (4) of subsection (h-3) of this Section; (C) actual costs
20    of SNG transportation pursuant to paragraph (6) of
21    subsection (h-3) of this Section; (D) certain taxes and
22    fees imposed by the federal government, the State, or any
23    unit of local government as provided in paragraph (6) of
24    subsection (h-3) of this Section; and (E) the credit, if
25    any, from the consumer protection reserve account pursuant
26    to subsection (h-2) of this Section. The delivered SNG

 

 

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1    price per million Btu shall proportionately reflect these
2    elements over the term of the sourcing agreement.
3        (9) A formula to translate the recoverable costs and
4    charges under subsection (h-3) of this Section into the
5    delivered SNG price per million btu.
6        (10) Title to the SNG shall pass at a
7    mutually-agreeable point in Illinois, and may provide
8    that, rather than the utility taking title to the SNG, a
9    mutually-agreed upon third-party gas marketer pursuant to
10    a contract approved by the Illinois Power Agency or its
11    designee, may take title to the SNG pursuant to an
12    agreement between the utility, the owner of the clean coal
13    SNG brownfield facility, and the third-party gas marketer.
14        (11) A utility may exit the sourcing agreement without
15    penalty if the clean coal SNG brownfield facility does not
16    commence construction by July 1, 2014.
17        (12) A utility is responsible to pay only the
18    Commission determined unit price cost of SNG that is
19    purchased by the utility. Nothing in the sourcing agreement
20    will obligate a utility to invest capital in a clean coal
21    SNG brownfield facility.
22        (13) The quality of SNG must, at a minimum, be
23    equivalent to the equality required for an interstate
24    pipeline gas before a utility is required to accept and pay
25    for SNG gas.
26        (14) Nothing in the sourcing agreement will require a

 

 

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1    utility to construct any facilities to accept delivery of
2    SNG. Provided, however, if a utility is required by law or
3    otherwise elects to connect the clean coal SNG brownfield
4    facility to an interstate pipeline, then the utility shall
5    be entitled to recover pursuant to its tariffs all just and
6    reasonable costs that are prudently incurred. Any costs
7    incurred by the utility to receive, deliver, manage, or
8    otherwise accommodate purchases under the SNG sourcing
9    agreement will be fully recoverable through a utility's
10    purchased gas adjustment clause rider mechanism.
11        (15) Remedies for the clean coal SNG brownfield
12    facility's failure to deliver a designated amount for a
13    designated period.
14    (h-2) Consumer protection reserve account. The clean coal
15SNG brownfield facility shall guarantee a minimum of
16$100,000,000 in consumer savings, calculated in real 2010
17dollars at the conclusion of the term of the sourcing agreement
18by comparing the delivered SNG price to the Chicago City-gate
19price on a weighted daily basis for each day over the entire
20term of the sourcing agreement. Prior to the clean coal SNG
21brownfield facility issuing a notice to proceed to
22construction, the clean coal SNG brownfield facility shall
23establish a consumer protection reserve account for the benefit
24of the retail customers of the utilities that have entered into
25sourcing agreements with the clean coal SNG brownfield facility
26pursuant to subsection (h-1), with cash principal in the amount

 

 

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1of $150,000,000. Such cash principal shall only be recovered
2through the consumer protection reserve account and not as a
3cost to be recovered in the delivered SNG price pursuant to
4subsection (h-3) of this Section. The consumer protection
5reserve account shall be maintained and administered by an
6independent trustee that is mutually agreed upon by the clean
7coal SNG brownfield facility, the utilities, and the Commission
8in an interest-bearing account in accordance with the
9following:
10        (1) The clean coal SNG brownfield facility monthly
11    shall calculate the difference between the monthly
12    delivered SNG price and the Chicago City-gate price, by
13    comparing the delivered SNG price, which shall include the
14    cost of transportation to the delivery point, if any, to
15    the Chicago City-gate price on a weighted daily basis for
16    each day of the prior month based upon a mutually-agreed
17    upon published index.
18        (2) During the first 2 years of operation of the
19    facility:
20            (A) to the extent the monthly delivered SNG price,
21        is greater than the Chicago City-gate price, the
22        consumer protection reserve account shall be used to
23        provide a credit to reduce the SNG price by an amount
24        equal to the difference between the monthly delivered
25        SNG price and the Chicago City-gate price; and
26            (B) to the extent the monthly delivered SNG price

 

 

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1        is less than or equal to the Chicago City-gate price,
2        the utility shall credit the difference between the
3        monthly delivered SNG price and the monthly Chicago
4        City-gate price, if any, to the consumer protection
5        reserve account. Such credit issued pursuant to this
6        paragraph (B) shall be deemed prudent and reasonable
7        and not subject to a Commission prudence review;
8        (3) After 2 years of operation of the facility, and
9    monthly, on an on-going basis, thereafter:
10            (A) to the extent that the monthly delivered SNG
11        price is less than or equal to the Chicago City-gate
12        price, calculated using the weighted average of the
13        daily Chicago City-gate price on a daily basis over the
14        entire month, the utility shall credit the difference,
15        if any, to the consumer protection reserve account.
16        Such credit issued pursuant to this subparagraph (A)
17        shall be deemed prudent and reasonable and not subject
18        to a Commission prudence review;
19            (B) any amounts in the consumer protection reserve
20        account in excess of $100,000,000 shall be distributed
21        to the clean coal SNG brownfield facility; provided,
22        however, that under no circumstances shall the total
23        cumulative amount distributed to the clean coal SNG
24        brownfield facility under this subparagraph (B) exceed
25        $150,000,000;
26            (C) to the extent the monthly delivered SNG price

 

 

09600HB6267sam003- 30 -LRB096 18955 CEL 44322 a

1        is greater than the Chicago City-gate price, after
2        distributing the amounts pursuant to subparagraph (B)
3        of this paragraph (3), if any, the consumer protection
4        reserve account shall be used to provide a credit to
5        reduce the SNG price by an amount equal to the
6        difference between the monthly delivered SNG price and
7        the Chicago City-gate price;
8            (D) if retail customers have realized net consumer
9        savings, calculated by comparing the delivered SNG
10        price to the weighted average of the daily Chicago
11        City-gate price on a daily basis over the entire term
12        of the sourcing agreement to date, then after
13        distributing the amounts pursuant to subparagraphs (B)
14        and (C) of this paragraph (3), 50% of any additional
15        amounts in the consumer protection reserve account in
16        excess of $100,000,000 shall be distributed to the
17        clean coal SNG brownfield facility, with the remaining
18        50% of any such additional amounts being credited to
19        retail customers; provided, however, that if retail
20        customers have not realized such net consumer savings,
21        no such distribution shall be made to the clean coal
22        SNG brownfield facility, and 100% of such additional
23        amounts shall be credited to the retail customers to
24        the extent the consumer protection reserve account
25        exceeds $100,000,000.
26        (4) 50% of all additional net revenue, defined as

 

 

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1    miscellaneous net revenue after cost allowance for costs
2    associated with additional net revenue that are not
3    otherwise recoverable pursuant to subsection (h-3) of this
4    Section, including net revenue from sales of substitute
5    natural gas derived from the facility above the nameplate
6    capacity of the facility and other by-products produced by
7    the facility, shall be credited to the consumer protection
8    reserve account.
9        (5) At the conclusion of the term of the sourcing
10    agreement, to the extent retail customers have not saved
11    the minimum of $100,000,000 in consumer savings as
12    guaranteed in this subsection (h-2), amounts in the
13    consumer protection reserve account shall be credited to
14    retail customers to the extent the retail customers have
15    saved the minimum of $100,000,000; 50% of any additional
16    amounts in the consumer protection reserve account shall be
17    distributed to the company, and the remaining 50% shall be
18    distributed to retail customers.
19        (6) If, at the conclusion of the term of the sourcing
20    agreement, the customers have not saved the minimum
21    $100,000,000 in savings as guaranteed in this subsection
22    (h-2) and the consumer protection reserve account has been
23    depleted, then the clean coal SNG brownfield facility shall
24    be liable for any remaining amount owed to the retail
25    customers to the extent that the customers are provided
26    with the $100,000,000 in savings as guaranteed in this

 

 

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1    subsection (h-2). The retail customers shall have first
2    priority in recovering that debt above any creditors,
3    except the original senior secured lender to the extent
4    that the original senior secured lender has any senior
5    secured debt outstanding, including any clean coal SNG
6    brownfield facility parent companies or affiliates.
7        (7) The clean coal SNG brownfield facility, the
8    utilities, and the trustee shall work together to take
9    commercially reasonable steps to minimize the tax impact of
10    these transactions, while preserving the consumer
11    benefits.
12        (8) The clean coal SNG brownfield facility shall each
13    month, starting in the facility's first year of commercial
14    operation, file with the Commission, in such form as the
15    Commission shall require, a report as to the consumer
16    protection reserve account. The monthly report must
17    contain the following information:
18            (A) the extent the monthly delivered SNG price is
19        greater than, less than, or equal to the Chicago
20        City-gate price;
21            (B) the amount credited or debited to the consumer
22        protection reserve account during the month;
23            (C) the amounts credited to consumers and
24        distributed to the clean coal SNG brownfield facility
25        during the month;
26            (D) the total amount of the consumer protection

 

 

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1        reserve account at the beginning and end of the month;
2            (E) the total amount of consumer savings to date;
3        and
4            (F) any other additional information the
5        Commission shall require.
6        When any report is erroneous or defective or appears to
7    the Commission to be erroneous or defective, the Commission
8    may notify the clean coal SNG brownfield facility to amend
9    the report within 30 days, and, before or after the
10    termination of the 30-day period, the Commission may
11    examine the trustee of the consumer protection reserve
12    account or the officers, agents, employees, books,
13    records, or accounts of the clean coal SNG brownfield
14    facility and correct such items in the report as upon such
15    examination the Commission may find defective or
16    erroneous. All reports shall be under oath.
17        All reports made to the Commission by the clean coal
18    SNG brownfield and the contents of the reports shall be
19    open to public inspection and shall be deemed a public
20    record under the Freedom of Information Act. Such reports
21    shall be preserved in the office of the Commission. The
22    Commission shall publish an annual summary of the reports
23    prior to February 1 of the following year. The annual
24    summary shall be made available to the public on the
25    Commission's website and shall be submitted to the General
26    Assembly.

 

 

09600HB6267sam003- 34 -LRB096 18955 CEL 44322 a

1        Any facility that fails to file a report required under
2    this paragraph (8) to the Commission within the time
3    specified or to make specific answer to any question
4    propounded by the Commission within 30 days from the time
5    it is lawfully required to do so, or within such further
6    time not to exceed 90 days as may in its discretion be
7    allowed by the Commission, shall pay a penalty of $500 to
8    the Commission for each day it is in default.
9        Any person who willfully makes any false report to the
10    Commission or to any member, officer, or employee thereof,
11    any person who willfully in a report withholds or fails to
12    provide material information to which the Commission is
13    entitled under this paragraph (8) and which information is
14    either required to be filed by statute, rule, regulation,
15    order, or decision of the Commission or has been requested
16    by the Commission, and any person who willfully aids or
17    abets such person shall be guilty of a Class A misdemeanor.
18    (h-3) Recoverable costs and revenue by the clean coal SNG
19brownfield facility.
20        (1) A capital recovery charge approved by the
21    Commission shall be recoverable by the clean coal SNG
22    brownfield facility under a sourcing agreement. The
23    capital recovery charge shall be comprised of capital costs
24    and a reasonable rate of return. "Capital costs" means
25    costs to be incurred in connection with the construction
26    and development of a facility, as defined Section 1-10 of

 

 

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1    the Illinois Power Agency Act, and such other costs as the
2    Capital Development Board deems appropriate to be
3    recovered in the capital recovery charge.
4            (A) Capital costs. The Capital Development Board
5        shall calculate a range of capital costs that it
6        believes would be reasonable for the clean coal SNG
7        brownfield facility to recover under the sourcing
8        agreement. In making this determination, the Capital
9        Development Board shall review the final draft of the
10        sourcing agreement and the rate of return approved by
11        the Commission. In addition, the Capital development
12        Board may: (i) review the facility cost report, if any,
13        of the clean coal SNG brownfield facility; (ii) consult
14        as much as it deems necessary with the clean coal SNG
15        brownfield facility; and (iii) conduct whatever
16        research and investigation it deems necessary.
17    The Capital Development Board shall retain an engineering
18        expert to assist in determining both the range of
19        capital costs and the range of operations and
20        maintenance costs that it believes would be reasonable
21        for the clean coal SNG brownfield facility to recover
22        under the sourcing agreement. Provided, however, that
23        such expert shall: (i) not have been involved in the
24        clean coal SNG brownfield facility's facility cost
25        report, if any, (ii) not own or control any direct or
26        indirect interest in the initial clean coal facility;

 

 

09600HB6267sam003- 36 -LRB096 18955 CEL 44322 a

1        and (iii) have no contractual relationship with the
2        clean coal SNG brownfield facility. In order to qualify
3        as an independent expert, a person or company must
4        have:
5                (i) direct previous experience conducting
6            front-end engineering and design studies for
7            large-scale energy facilities and administering
8            large-scale energy operations and maintenance
9            contracts, which may be particularized to the
10            specific type of financing associated with the
11            clean coal SNG brownfield facility;
12                (ii) an advanced degree in economics,
13            mathematics, engineering, or a related area of
14            study;
15                (iii) ten years of experience in the energy
16            sector, including construction and risk management
17            experience;
18                (iv) expertise in assisting companies with
19            obtaining financing for large-scale energy
20            projects, which may be particularized to the
21            specific type of financing associated with the
22            clean coal SNG brownfield facility;
23                (v) expertise in operations and maintenance
24            which may be particularized to the specific type of
25            operations and maintenance associated with the
26            clean coal SNG brownfield facility;

 

 

09600HB6267sam003- 37 -LRB096 18955 CEL 44322 a

1                (vi) expertise in credit and contract
2            protocols;
3                (vii) adequate resources to perform and
4            fulfill the required functions and
5            responsibilities; and
6                (viii) the absence of a conflict of interest
7            and inappropriate bias for or against an affected
8            gas utility or the clean coal SNG brownfield
9            facility.
10            The clean coal SNG brownfield facility and the
11        Illinois Power Agency shall cooperate with the Capital
12        Development Board in any investigation it deems
13        necessary. The Capital Development Board shall make
14        its final determination of the range of capital costs
15        confidentially and shall submit that range to the
16        Commission in a confidential filing within 120 days
17        after the effective date of this amendatory Act of the
18        96th General Assembly. The clean coal SNG brownfield
19        facility shall submit to the Commission its estimate of
20        the capital costs to be recovered under the sourcing
21        agreement. Only after the clean coal SNG brownfield
22        facility has submitted this estimate shall the
23        Commission publicly announce the range of capital
24        costs submitted by the Capital Development Board.
25            In the event that the estimate submitted by the
26        clean coal SNG brownfield facility is within or below

 

 

09600HB6267sam003- 38 -LRB096 18955 CEL 44322 a

1        the range submitted by the Capital Development Board,
2        the clean coal SNG brownfield facility's estimate
3        shall be approved by the Commission as the amount of
4        capital costs to be recovered under the sourcing
5        agreement. In the event that the estimate submitted by
6        the clean coal SNG brownfield facility is above the
7        range submitted by the Capital Development Board, the
8        amount of capital costs at the lowest end of the range
9        submitted by the Capital Development Board shall be
10        approved by the Commission as the amount of capital
11        costs to be recovered under the sourcing agreement.
12        Within 15 days after the Capital Development Board has
13        submitted its range and the clean coal SNG brownfield
14        facility has submitted its estimate, the Commission
15        shall approve the capital costs for the clean coal SNG
16        brownfield facility.
17            The Capital Development Board shall monitor the
18        construction of the clean coal SNG brownfield facility
19        for the full duration of construction to assess
20        potential cost overruns. The Capital Development
21        Board, in its discretion, may retain an expert to
22        facilitate such monitoring. The clean coal SNG
23        brownfield facility shall pay a reasonable fee as
24        required by the Capital Development Board for the
25        Capital Development Board's services under this
26        subsection (h-3) to be deposited into the Capital

 

 

09600HB6267sam003- 39 -LRB096 18955 CEL 44322 a

1        Development Board Revolving Fund, and such fee shall
2        not be passed through to a utility or its customers. If
3        an expert is retained by the Capital Development Board
4        for monitoring of construction, then the clean coal SNG
5        brownfield facility must pay for the expert's
6        reasonable fees and such costs shall not be passed
7        through to a utility or its customers.
8            (B) Rate of Return. No later than 30 days after the
9        date on which the Illinois Power Agency submits a final
10        draft sourcing agreement, the Commission shall hold a
11        public hearing to determine the rate of return to be
12        recovered under the sourcing agreement. Rate of return
13        shall be comprised of the clean coal SNG brownfield
14        facility's actual cost of debt, including
15        mortgage-style amortization, and a reasonable return
16        on equity. The Commission shall post notice of the
17        hearing on its website no later than 10 days prior to
18        the date of the hearing. The Commission shall provide
19        the public and all interested parties, including the
20        gas utilities, the Attorney General, and the Illinois
21        Power Agency, an opportunity to be heard.
22            In determining the return on equity, the
23        Commission shall select a commercially reasonable
24        return on equity taking into account the return on
25        equity being received by developers of similar
26        facilities in or outside of Illinois, the need to

 

 

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1        balance an incentive for clean-coal technology with
2        the need to protect ratepayers from high gas prices,
3        the risks being borne by the clean coal SNG brownfield
4        facility in the final draft sourcing agreement, and any
5        other information that the Commission may deem
6        relevant. The Commission may establish a return on
7        equity that varies with the amount of savings, if any,
8        to customers during the term of the sourcing agreement,
9        comparing the delivered SNG price to a daily weighted
10        average price of natural gas, based upon an index. The
11        Illinois Power Agency shall recommend a return on
12        equity to the Commission using the same criteria.
13        Within 60 days after receiving the final draft sourcing
14        agreement from the Illinois Power Agency, the
15        Commission shall approve the rate of return for the
16        clean coal brownfield facility. Within 30 days after
17        obtaining debt financing for the clean coal SNG
18        brownfield facility, the clean coal SNG brownfield
19        facility shall file a notice with the Commission
20        identifying the actual cost of debt.
21        (2) Operations and maintenance costs approved by the
22    Commission shall be recoverable by the clean coal SNG
23    brownfield facility under the sourcing agreement. The
24    operations and maintenance costs mean costs that have been
25    incurred for the administration, supervision, operation,
26    maintenance, preservation, and protection of the clean

 

 

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1    coal SNG brownfield facility's physical plant.
2        The Capital Development Board shall calculate a range
3    of operations and maintenance costs that it believes would
4    be reasonable for the clean coal SNG brownfield facility to
5    recover under the sourcing agreement. In making this
6    determination, the Capital Development Board shall review
7    the final draft of the sourcing agreement and the rate of
8    return approved by the Commission. In addition, the Capital
9    Development Board may: (i) review the facility cost report,
10    if any, of the clean coal SNG brownfield facility; (ii)
11    consult as much as it deems necessary with the clean coal
12    SNG brownfield facility; and (iii) conduct whatever
13    research and investigation it deems necessary. As set forth
14    in subparagraph (A) of paragraph (1) of this subsection
15    (h-3), the Capital Development Board shall retain an
16    independent engineering expert to assist in determining
17    both the range of operations and maintenance costs that it
18    believes would be reasonable for the clean coal SNG
19    brownfield to recover under the sourcing agreement. The
20    clean coal SNG brownfield facility and the Illinois Power
21    Agency shall cooperate with the Capital Development Board
22    in any investigation it deems necessary. The Capital
23    Development Board shall make its final determination of the
24    range of operations and maintenance costs confidentially
25    and shall submit that range to the Commission in a
26    confidential filing within 120 days after the effective

 

 

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1    date of this amendatory Act of the 96th General Assembly.
2        The clean coal SNG brownfield facility shall submit to
3    the Commission its estimate of the operations and
4    maintenance costs to be recovered under the sourcing
5    agreement. Only after the clean coal SNG brownfield
6    facility has submitted this estimate shall the Commission
7    publicly announce the range of operations and maintenance
8    costs submitted by the Capital Development Board. In the
9    event that the estimate submitted by the clean coal SNG
10    brownfield facility is within or below the range submitted
11    by the Capital Development Board, the clean coal SNG
12    brownfield facility's estimate shall be approved by the
13    Commission as the amount of operations and maintenance
14    costs to be recovered under the sourcing agreement. In the
15    event that the estimate submitted by the clean coal SNG
16    brownfield facility is above the range submitted by the
17    Capital Development Board, the amount of operations and
18    maintenance costs at the lowest end of the range submitted
19    by the Capital Development Board shall be approved by the
20    Commission as the amount of operations and maintenance
21    costs to be recovered under the sourcing agreement. Within
22    15 days after the Capital Development Board has submitted
23    its range and the clean coal SNG brownfield facility has
24    submitted its estimate, the Commission shall approve the
25    operations and maintenance costs for the clean coal SNG
26    brownfield facility.

 

 

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1        The clean coal SNG brownfield facility shall pay for
2    the independent engineering expert's reasonable fees and
3    such costs shall not be passed through to a utility or its
4    customers. The clean coal SNG brownfield facility shall pay
5    a reasonable fee as required by the Capital Development
6    Board for the Capital Development Board's services under
7    this subsection (h-3) to be deposited into the Capital
8    Development Board Revolving Fund, and such fee shall not be
9    passed through to a utility or its customers.
10        (3) Sequestration costs approved by the Commission
11    shall be recoverable by the clean coal SNG brownfield
12    facility. "Sequestration costs" means costs to be incurred
13    by the clean coal SNG brownfield facility in accordance
14    with its Commission-approved carbon capture and
15    sequestration plan to:
16            (A) capture carbon dioxide;
17            (B) build, operate, and maintain a sequestration
18        site in which carbon dioxide may be injected;
19            (C) build, operate, and maintain a carbon dioxide
20        pipeline; and
21            (D) transport the carbon dioxide to the
22        sequestration site or a pipeline.
23        The Commission shall assess the prudency of the
24    sequestration costs for the clean coal SNG brownfield
25    facility before construction commences at the
26    sequestration site or pipeline. Any revenues the clean coal

 

 

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1    SNG brownfield facility receives as a result of the
2    capture, transportation, or sequestration of carbon
3    dioxide shall be first credited against all sequestration
4    costs, with the positive balance, if any, treated as
5    additional net revenue.
6        The Commission may, in its discretion, retain an expert
7    to assist in its review of sequestration costs. The clean
8    coal SNG brownfield facility shall pay for the expert's
9    reasonable fees if an expert is retained by the Commission,
10    and such costs shall not be passed through to a utility or
11    its customers. Once made, the Commission's determination
12    of the amount of recoverable sequestration costs shall not
13    be increased unless the clean coal SNG brownfield facility
14    can show by clear and convincing evidence that (i) the
15    costs were not reasonably foreseeable; (ii) the costs were
16    due to circumstances beyond the clean coal SNG brownfield
17    facility's control; and (iii) the clean coal SNG brownfield
18    facility took all reasonable steps to mitigate the costs.
19    If the Commission determines that sequestration costs may
20    be increased, the Commission shall provide for notice and a
21    public hearing for approval of the increased sequestration
22    costs.
23        (4) Actual delivered and processed fuel costs shall be
24    set by the Illinois Power Agency through a SNG feedstock
25    procurement, pursuant to Sections 1-20, 1-77, and 1-78 of
26    the Illinois Power Agency Act, to be performed at least

 

 

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1    every 5 years and purchased by the clean coal SNG
2    brownfield facility pursuant to feedstock procurement
3    contracts developed by the Illinois Power Agency, with coal
4    comprising at least 50% of the total feedstock over the
5    term of the sourcing agreement and petroleum coke
6    comprising the remainder of the SNG feedstock. If the
7    Commission fails to approve a feedstock procurement plan or
8    fails to approve the results of a feedstock procurement
9    event, then the fuel shall be purchased by the company
10    month-by-month on the spot market and those actual
11    delivered and processed fuel costs shall be recoverable
12    under the sourcing agreement. If a supplier defaults under
13    the terms of a procurement contract, then the Illinois
14    Power Agency shall immediately initiate a feedstock
15    procurement process to obtain a replacement supply, and,
16    prior to the conclusion of that process, fuel shall be
17    purchased by the company month-by-month on the spot market
18    and those actual delivered and processed fuel costs shall
19    be recoverable under the sourcing agreement.
20        (5) Taxes and fees imposed by the federal government,
21    the State, or any unit of local government applicable to
22    the clean coal SNG brownfield facility, excluding income
23    tax, shall be recoverable by the clean coal SNG brownfield
24    facility under the sourcing agreement to the extent such
25    taxes and fees were not applicable to the facility on the
26    date of this amendatory Act of the 96th General Assembly.

 

 

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1        (6) The actual transportation costs, in accordance
2    with the applicable utility's tariffs, and third-party
3    marketer costs incurred by the company, if any, associated
4    with transporting the SNG from the clean coal SNG
5    brownfield facility to the Chicago City-gate to sell such
6    SNG into the natural gas markets shall be recoverable under
7    the sourcing agreement.
8        (7) Unless otherwise provided, within 30 days after a
9    decision of the Commission on recoverable costs under this
10    Section, any interested party to the Commission's decision
11    may apply for a rehearing with respect to the decision. The
12    Commission shall receive and consider the application for
13    rehearing and shall grant or deny the application in whole
14    or in part within 20 days after the date of the receipt of
15    the application by the Commission. If no rehearing is
16    applied for within the required 30 days or an application
17    for rehearing is denied, then the Commission decision shall
18    be final. If an application for rehearing is granted, then
19    the Commission shall hold a rehearing within 30 days after
20    granting the application. The decision of the Commission
21    upon rehearing shall be final.
22        Any person affected by a decision of the Commission
23    under this subsection (h-3) may have the decision reviewed
24    only under and in accordance with the Administrative Review
25    Law. Unless otherwise provided, the provisions of the
26    Administrative Review Law, all amendments and

 

 

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1    modifications to that Law, and the rules adopted pursuant
2    to that Law shall apply to and govern all proceedings for
3    the judicial review of final administrative decisions of
4    the Commission under this subsection (h-3). The term
5    "administrative decision" is defined as in Section 3-101 of
6    the Code of Civil Procedure.
7        (8) The Capital Development Board shall adopt and make
8    public a policy detailing the process for retaining experts
9    under this Section. Any experts retained to assist with
10    calculating the range of capital costs or operations and
11    maintenance costs shall be retained no later than 45 days
12    after the effective date of this amendatory Act of the 96th
13    General Assembly.
14    (h-4) No later than 60 days after the Illinois Power Agency
15submits the final draft sourcing agreement pursuant to
16subsection (h-1), the Commission shall approve a sourcing
17agreement containing the capital costs, rate of return, and
18operations and maintenance costs. Once the sourcing agreement
19is approved, then the gas utility subject to that sourcing
20agreement shall have 45 days after the date of the Commission's
21approval to enter into the sourcing agreement.
22    (h-5) The Attorney General, on behalf of the people of the
23State of Illinois, may specifically enforce the requirements of
24this subsection (h-5). All contracts under subsection (h) of
25this Act and all sourcing agreements under subsection (h-1) of
26this Act, regardless of duration, shall require the owner of

 

 

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1any facility supplying SNG under the contract or sourcing
2agreement to provide documentation to the Commission each year,
3starting in the facility's first year of commercial operation,
4accurately reporting the quantity of carbon dioxide emissions
5from the facility that have been captured and sequestered and
6reporting any quantities of carbon dioxide released from the
7site or sites at which carbon dioxide emissions were
8sequestered in prior years, based on continuous monitoring of
9those sites. If, in any year, the owner of the facility
10described in subsection (h) of this Act fails to demonstrate
11that the facility captured and sequestered at least 90% of the
12total carbon dioxide emissions that the facility would
13otherwise emit or that sequestration of emissions from prior
14years has failed, resulting in the release of carbon dioxide
15into the atmosphere, then the owner of the facility must offset
16excess emissions. Any such carbon dioxide offsets must be
17permanent, additional, verifiable, real, located within the
18State of Illinois, and legally and practicably enforceable;
19provided that the owner of the facility described in subsection
20(h) of this Act shall not be obligated to acquire carbon
21dioxide emission offsets to the extent that the cost of
22acquiring such offsets would exceed $40 million in any given
23year. No costs of any purchases of carbon offsets may be
24recovered from a utility or its customers. All carbon offsets
25purchased for this purpose must be permanently retired.
26    If, in any year, the owner of a clean coal SNG brownfield

 

 

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1facility fails to demonstrate that the clean coal SNG
2brownfield facility captured and sequestered at least 85% of
3the total carbon dioxide emissions that the facility would
4otherwise emit, then the owner of the clean coal SNG brownfield
5facility must pay a penalty of $20 per ton of excess carbon
6emissions up to $20,000,000, which shall be deposited into the
7Energy Efficiency Trust Fund and distributed pursuant to
8subsection (b) of Section 6-6 of the Renewable Energy, Energy
9Efficiency, and Coal Resources Development Law of 1997.
10Provided, however, to the extent that the owner of the clean
11coal SNG brownfield facility can demonstrate that the failure
12was as a result of acts of God (including fire, flood,
13earthquake, tornado, lightning, hurricane, or other natural
14disaster); any amendment, modification, or abrogation of any
15applicable law or regulation that would prevent performance;
16war; invasion; act of foreign enemies; hostilities (regardless
17of whether war is declared); civil war; rebellion; revolution;
18insurrection; military or usurped power or confiscation;
19terrorist activities; civil disturbances; riots;
20nationalization; sabotage; blockage; or embargo, the owner of
21the clean coal SNG brownfield facility shall not be subject to
22a penalty if and only if (i) it promptly provides notice of its
23failure to the Commission; (ii) as soon as practicable and
24consistent with any order or direction from the Commission, it
25submits to the Commission proposed modifications to its carbon
26capture and sequestration plan; and (iii) it carries out its

 

 

09600HB6267sam003- 50 -LRB096 18955 CEL 44322 a

1proposed modifications in the manner and time directed by the
2Commission. If the Commission finds that the facility has not
3satisfied each of these requirements, then the facility shall
4be subject to the penalty. If the owner of a clean coal SNG
5brownfield facility demonstrates that the clean coal SNG
6brownfield facility captured and sequestered more than 85% of
7the total carbon emissions that the facility would otherwise
8emit, the owner of the clean coal SNG brownfield facility may
9credit such additional amounts to reduce the amount of any
10future penalty to be paid. The penalty resulting from the
11failure to capture and sequester at least the minimum amount of
12carbon dioxide shall not be passed on to a utility or its
13customers.
14    In addition to any penalty for the clean coal SNG
15brownfield facility's failure to capture and sequester at least
16its minimum sequestration requirement, the Attorney General,
17on behalf of the People of the State of Illinois, shall bring
18an action for specific performance of this subsection (h-5).
19Such action may be filed in any circuit court in Illinois. By
20entering into a sourcing agreement pursuant to subsection (h-1)
21of this Section, the clean coal SNG brownfield facility agrees
22to waive any objections to venue or to the jurisdiction of the
23court with regard to the Attorney General's action for specific
24performance under this subsection (h-5).
25     In addition, carbon dioxide emission credits equivalent to
2650% of the amount of credits associated with the required

 

 

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1sequestration of carbon dioxide from the facility must be
2permanently retired. Compliance with the sequestration
3requirements and the offset purchase requirements specified in
4this subsection (h-5) for the facility described in subsection
5(h) of this Act shall be assessed annually by an independent
6expert retained by the owner of the facility described in
7subsection (h) of this Act, with the advance written approval
8of the Attorney General. Compliance with the sequestration
9requirements and penalty requirements specified in this
10subsection (h-5) for the clean coal SNG brownfield facility
11shall be assessed annually by the Commission, which may in its
12discretion retain an expert to facilitate its assessment. If an
13expert is retained by the Commission, then the clean coal SNG
14brownfield facility shall pay for the expert's reasonable fees,
15and such costs shall not be passed through to a utility or its
16customers. A SNG facility operating pursuant to this subsection
17(h-5) shall not forfeit its designation as a clean coal SNG
18facility or a clean coal SNG brownfield facility if the
19facility fails to fully comply with the applicable carbon
20sequestration requirements in any given year, provided the
21requisite offsets are purchased or requisite penalties are
22paid.
23    Responsibility for compliance with the sequestration
24requirements specified in this subsection (h-5) for the clean
25coal SNG brownfield facility shall reside solely with the clean
26coal SNG brownfield facility regardless of whether the facility

 

 

09600HB6267sam003- 52 -LRB096 18955 CEL 44322 a

1has contracted with another party to capture, transport, or
2sequester carbon dioxide.
3    (h-7) Sequestration permitting, oversight, and
4investigations.
5        (1) No clean coal facility or clean coal SNG brownfield
6    facility may transport or sequester carbon dioxide unless
7    the Commission approves the method of carbon dioxide
8    transportation or sequestration. Such approval shall be
9    required regardless of whether the facility has contracted
10    with another to transport or sequester the carbon dioxide.
11    Nothing in this subsection (h-7) shall release the owner or
12    operator of a carbon dioxide sequestration site or carbon
13    dioxide pipeline from any other permitting requirements
14    under applicable State and federal laws, statutes, rules,
15    or regulations.
16        (2) The Commission shall review carbon dioxide
17    transportation and sequestration methods proposed by a
18    clean coal facility or a clean coal SNG brownfield facility
19    and shall approve those methods it deems reasonable and
20    cost-effective. For purposes of this review,
21    "cost-effective" means a commercially reasonable price for
22    similar carbon dioxide transportation or sequestration
23    techniques. In determining whether sequestration is
24    reasonable and cost-effective, the Commission may consult
25    with the Illinois State Geological Survey and retain third
26    parties to assist in its determination, provided that such

 

 

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1    third parties shall not own or control any direct or
2    indirect interest in the facility that is proposing the
3    carbon dioxide transportation or the carbon dioxide
4    sequestration method and shall have no contractual
5    relationship with that facility. If a third party is
6    retained by the Commission, then the facility proposing the
7    carbon dioxide transportation or sequestration method
8    shall pay for the expert's reasonable fees, and these costs
9    shall not be passed through to a utility or its customers.
10        No later than 6 months prior to the date upon which the
11    owner intends to commence construction of a clean coal
12    facility or the clean coal SNG brownfield facility, the
13    owner of the facility shall file with the Commission a
14    carbon dioxide transportation or sequestration plan. The
15    Commission shall hold a public hearing within 30 days after
16    receipt of the facility's carbon dioxide transportation or
17    sequestration plan. The Commission shall post notice of the
18    review on its website upon submission of a carbon dioxide
19    transportation or sequestration method and shall accept
20    written public comments. The Commission shall take the
21    comments into account when making its decision.
22        The Commission may not approve a carbon dioxide
23    sequestration method if the owner or operator of the
24    sequestration site has not received (i) an Underground
25    Injection Control permit from the Illinois Environmental
26    Protection Agency pursuant to the Environmental Protection

 

 

09600HB6267sam003- 54 -LRB096 18955 CEL 44322 a

1    Act; (ii) an Underground Injection Control permit from the
2    Illinois Department of Natural Resources pursuant to the
3    Illinois Oil and Gas Act; or (iii) a permit similar to
4    items (i) or (ii) from the state in which the sequestration
5    site is located if the sequestration will take place
6    outside of Illinois. The Commission shall approve or deny
7    the carbon dioxide transportation or sequestration method
8    within 90 days after the receipt of all required
9    information.
10        (3) At least annually, the Illinois Environmental
11    Protection Agency shall inspect all carbon dioxide
12    sequestration sites in Illinois. The Illinois
13    Environmental Protection Agency may, as often as deemed
14    necessary, monitor and conduct investigations of those
15    sites. The owner or operator of the sequestration site must
16    cooperate with the Illinois Environmental Protection
17    Agency investigations of carbon dioxide sequestration
18    sites.
19        If the Illinois Environmental Protection Agency
20    determines at any time a site creates conditions that
21    warrant the issuance of a seal order under Section 34 of
22    the Environmental Protection Act, then the Illinois
23    Environmental Protection Agency shall seal the site
24    pursuant to the Environmental Protection Act. If the
25    Illinois Environmental Protection Agency determines at any
26    time a carbon dioxide sequestration site creates

 

 

09600HB6267sam003- 55 -LRB096 18955 CEL 44322 a

1    conditions that warrant the institution of a civil action
2    for an injunction under Section 43 of the Environmental
3    Protection Act, then the Illinois Environmental Protection
4    Agency shall request the State's Attorney or the Attorney
5    General institute such action. The Illinois Environmental
6    Protection Agency shall provide notice of any such actions
7    as soon as possible on its website. The SNG facility shall
8    incur all reasonable costs associated with any such
9    inspection or monitoring of the sequestration sites, and
10    these costs shall not be recoverable from utilities or
11    their customers.
12        (4) At least annually, the Commission shall inspect all
13    carbon dioxide pipelines in Illinois that transport carbon
14    dioxide to ensure the safety and feasibility of those
15    pipelines. The Commission may, as often as deemed
16    necessary, monitor and conduct investigations of those
17    pipelines. The owner or operator of the pipeline must
18    cooperate with the Commission investigations of the carbon
19    dioxide pipelines.
20        In circumstances whereby a carbon dioxide pipeline
21    creates a substantial danger to the environment or to the
22    public health of persons or to the welfare of persons where
23    such danger is to the livelihood of such persons, the
24    State's Attorney or Attorney General, upon the request of
25    the Commission or on his or her own motion, may institute a
26    civil action for an immediate injunction to halt any

 

 

09600HB6267sam003- 56 -LRB096 18955 CEL 44322 a

1    discharge or other activity causing or contributing to the
2    danger or to require such other action as may be necessary.
3    The court may issue an ex parte order and shall schedule a
4    hearing on the matter not later than 3 working days after
5    the date of injunction. The Commission shall provide notice
6    of any such actions as soon as possible on its website. The
7    SNG facility shall incur all reasonable costs associated
8    with any such inspection or monitoring of the sequestration
9    sites, and these costs shall not be recoverable from a
10    utility or its customers.
11    (h-9) The clean coal SNG brownfield facility shall have the
12right to recover prudently incurred increased costs or reduced
13revenue resulting from any new or amendatory legislation or
14other action. The State of Illinois pledges that the State will
15not enact any law or take any action to:
16        (1) break, or repeal the authority for, sourcing
17    agreements approved by the Commission and entered into
18    between public utilities and the clean coal SNG brownfield
19    facility;
20        (2) deny public utilities full cost recovery for their
21    costs incurred under those sourcing agreements; or
22        (3) deny the clean coal SNG brownfield facility full
23    cost and revenue recovery as provided under those sourcing
24    agreements that are recoverable pursuant to subsection
25    (h-3) of this Section.
26    These pledges are for the benefit of the parties to those

 

 

09600HB6267sam003- 57 -LRB096 18955 CEL 44322 a

1sourcing agreements and the issuers and holders of bonds or
2other obligations issued or incurred to finance or refinance
3the clean coal SNG brownfield facility. The clean coal SNG
4brownfield facility is authorized to include and refer to these
5pledges in any financing agreement into which it may enter in
6regard to those sourcing agreements.
7    The State of Illinois retains and reserves all other rights
8to enact new or amendatory legislation or take any other
9action, without impairment of the right of the clean coal SNG
10brownfield facility to recover prudently incurred increased
11costs or reduced revenue resulting from the new or amendatory
12legislation or other action, including, but not limited to,
13such legislation or other action that would (i) directly or
14indirectly raise the costs the clean coal SNG brownfield
15facility must incur; (ii) directly or indirectly place
16additional restrictions, regulations, or requirements on the
17clean coal SNG brownfield facility; (iii) prohibit
18sequestration in general or prohibit a specific sequestration
19method or project; or (iv) increase minimum sequestration
20requirements for the clean coal SNG brownfield facility to the
21extent technically feasible. The clean coal SNG brownfield
22facility shall have the right to recover prudently incurred
23increased costs or reduced revenue resulting from the new or
24amendatory legislation or other action as described in this
25subsection (h-9).
26    (h-10) Contract costs for SNG incurred by an Illinois gas

 

 

09600HB6267sam003- 58 -LRB096 18955 CEL 44322 a

1utility are reasonable and prudent and recoverable through the
2purchased gas adjustment clause and are not subject to review
3or disallowance by the Commission. Contract costs are costs
4incurred by the utility under the terms of a contract that
5incorporates the terms stated in subsection (h) of this Section
6as confirmed in writing by the Illinois Power Agency as set
7forth in subsection (h-20) of this Section, which confirmation
8shall be deemed conclusive, or as a consequence of or condition
9to its performance under the contract, including (i) amounts
10paid for SNG under the SNG contract and (ii) costs of
11transportation and storage services of SNG purchased from
12interstate pipelines under federally approved tariffs. Any
13contract, the terms of which have been confirmed in writing by
14the Illinois Power Agency as set forth in subsection (h-20) of
15this Section and the performance of the parties under such
16contract cannot be grounds for challenging prudence or cost
17recovery by the utility through the purchased gas adjustment
18clause, and in such cases, the Commission is directed not to
19consider, and has no authority to consider, any attempted
20challenges.
21    The contracts entered into by Illinois gas utilities
22pursuant to subsection (h) of this Section shall provide that
23the utility retains the right to terminate the contract without
24further obligation or liability to any party if the contract
25has been impaired as a result of any legislative,
26administrative, judicial, or other governmental action that is

 

 

09600HB6267sam003- 59 -LRB096 18955 CEL 44322 a

1taken that eliminates all or part of the prudence protection of
2this subsection (h-10) or denies the recoverability of all or
3part of the contract costs through the purchased gas adjustment
4clause. Should any Illinois gas utility exercise its right
5under this subsection (h-10) to terminate the contract, all
6contract costs incurred prior to termination are and will be
7deemed reasonable, prudent, and recoverable as and when
8incurred and not subject to review or disallowance by the
9Commission. Any order, issued by the State requiring or
10authorizing the discontinuation of the merchant function,
11defined as the purchase and sale of natural gas by an Illinois
12gas utility for the ultimate consumer in its service territory
13shall include provisions necessary to prevent the impairment of
14the value of any contract hereunder over its full term.
15    (h-11) All costs incurred by an Illinois gas utility in
16procuring SNG, including procuring SNG from a clean coal SNG
17brownfield facility or a third-party marketer pursuant to
18subsection (h-1), are reasonable and prudent and recoverable
19through the purchased gas adjustment clause and are not subject
20to review or disallowance by the Commission. Sourcing agreement
21costs are costs incurred by the utility under the terms of a
22sourcing agreement that incorporates the terms stated in
23subsection (h-1) of this Section as approved by the Commission
24as set forth in subsection (h-4) of this Section, which
25approval shall be deemed conclusive, or as a consequence of or
26condition to its performance under the contract, including (i)

 

 

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1amounts paid for SNG under the SNG contract and (ii) costs of
2transportation and storage services of SNG purchased from
3interstate pipelines under federally approved tariffs. Any
4sourcing agreement, the terms of which have been approved by
5the Commission as set forth in subsection (h-4) of this
6Section, and the performance of the parties under the sourcing
7agreement cannot be grounds for challenging prudence or cost
8recovery by the utility through the purchased gas adjustment
9clause, and in these cases, the Commission is directed not to
10consider, and has no authority to consider, any attempted
11challenges.
12    (h-15) With respect to each contract entered into by the
13company with an Illinois utility in accordance with the terms
14stated in subsection (h) of this Section, within 60 days
15following the completion of purchases of SNG, the Illinois
16Power Agency shall conduct an analysis to determine (i) the
17average contract SNG cost, which shall be calculated as the
18total amount paid to a company for SNG over the contract term,
19plus the cost to the utility of the required transportation and
20storage services of SNG, divided by the total number of MMBtus
21of SNG actually purchased under the utility contract; (ii) the
22average natural gas purchase cost, which shall be calculated as
23the total annual supply costs paid for natural gas (excluding
24SNG) purchased by such utility over the contract term, plus the
25costs of transportation and storage services of such natural
26gas (excluding such costs for SNG), divided by the total number

 

 

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1of MMBtus of natural gas (excluding SNG) actually purchased by
2the utility during the contract term; (iii) the cost
3differential, which shall be the difference between the average
4contract SNG cost and the average natural gas purchase cost;
5and (iv) the revenue share target, which shall be the cost
6differential multiplied by the total amount of SNG purchased
7under such utility contract. If the average contract SNG cost
8is equal to or less than the average natural gas purchase cost,
9then the company shall have no further obligation to the
10utility. If the average contract SNG cost for such SNG contract
11is greater than the average natural gas purchase cost for such
12utility, then the company shall market the daily production of
13SNG and distribute on a monthly basis 5% of amounts collected
14with respect to such future sales to the utilities in
15proportion to each utility's SNG purchases from the company
16during the term of the SNG contract to be used to reduce the
17utility's natural gas costs through the purchased gas
18adjustment clause; such payments to the utility shall continue
19until such time as the sum of such payments equals the revenue
20share target of that utility. The company or utilities shall
21have no obligation to repay the revenue share target except as
22provided for in this subsection (h-15).
23    (h-20) The General Assembly authorizes the Illinois
24Finance Authority to issue bonds to the maximum extent
25permitted to finance coal gasification facilities described in
26this Section, which constitute both "industrial projects"

 

 

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1under Article 801 of the Illinois Finance Authority Act and
2"clean coal and energy projects" under Sections 825-65 through
3825-75 of the Illinois Finance Authority Act. The General
4Assembly further authorizes the Illinois Power Agency to become
5party to agreements and take such actions as necessary to
6enable the Illinois Power Agency or its designate to (i) review
7and confirm in writing that the terms stated in subsection (h)
8of this Section are incorporated in the SNG contract, and (ii)
9conduct an analysis pursuant to subsection (h-15) of this
10Section. Administrative costs incurred by the Illinois Finance
11Authority and Illinois Power Agency in performance of this
12subsection (h-20) shall be subject to reimbursement by the
13company on terms as the Illinois Finance Authority, the
14Illinois Power Agency, and the company may agree. The utility
15and its customers shall have no obligation to reimburse the
16company, the Illinois Finance Authority, or the Illinois Power
17Agency for any such costs.
18    (i) If a gas utility or an affiliate of a gas utility has
19an ownership interest in any entity that produces or sells
20synthetic natural gas, Article VII of this Act shall apply.
21(Source: P.A. 95-1027, eff. 6-1-09; 96-1364, eff. 7-28-10;
2209600SB3388ham001, ham002, and ham003.)"; and
 
23by replacing Section 99 with the following:
 
24    "Section 99. Effective date. This Act takes effect June 1,

 

 

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12011.".