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, | 3 | | immediately above Section 5, by inserting the following:
| 4 | | "Section 3. If and only if Senate Bill 3388 of the 96th | 5 | | General Assembly (as amended by House Amendment Nos. 1, 2, and | 6 | | 3) becomes law, then the Illinois Power Agency Act is amended | 7 | | by 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 | 12 | | which the Illinois Finance Authority agrees to loan the | 13 | | proceeds of revenue bonds issued with respect to a project to | 14 | | the Agency upon terms providing for loan repayment installments | 15 | | at least sufficient to pay when due all principal of, interest | 16 | | and premium, if any, on those revenue bonds, and providing for |
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| 1 | | maintenance, insurance, and other matters in respect of the | 2 | | project. | 3 | | "Authority" means the Illinois Finance Authority. | 4 | | "Clean coal facility" means an electric generating | 5 | | facility that uses primarily coal as a feedstock and that | 6 | | captures and sequesters carbon dioxide emissions at the | 7 | | following levels: at least 50% of the total carbon dioxide | 8 | | emissions that the facility would otherwise emit if, at the | 9 | | time construction commences, the facility is scheduled to | 10 | | commence operation before 2016, at least 70% of the total | 11 | | carbon dioxide emissions that the facility would otherwise emit | 12 | | if, at the time construction commences, the facility is | 13 | | scheduled to commence operation during 2016 or 2017, and at | 14 | | least 90% of the total carbon dioxide emissions that the | 15 | | facility would otherwise emit if, at the time construction | 16 | | commences, the facility is scheduled to commence operation | 17 | | after 2017. The power block of the clean coal facility shall | 18 | | not exceed allowable emission rates for sulfur dioxide, | 19 | | nitrogen oxides, carbon monoxide, particulates and mercury for | 20 | | a natural gas-fired combined-cycle facility the same size as | 21 | | and in the same location as the clean coal facility at the time | 22 | | the clean coal facility obtains an approved air permit. All | 23 | | coal used by a clean coal facility shall have high volatile | 24 | | bituminous rank and greater than 1.7 pounds of sulfur per | 25 | | million btu content, unless the clean coal facility does not | 26 | | use gasification technology and was operating as a conventional |
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| 1 | | coal-fired electric generating facility on June 1, 2009 (the | 2 | | effective 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 | 5 | | brownfield site in a municipality with at least 1,000,000 | 6 | | residents; (2) uses a gasification process to produce | 7 | | substitute natural gas; (3) uses coal as at least 50% of the | 8 | | total feedstock over the term of any sourcing agreement with a | 9 | | utility and the remainder of the feedstock may be either | 10 | | petroleum coke or coal, with all such coal having a high | 11 | | bituminous rank and greater than 1.7 pounds of sulfur per | 12 | | million Btu content; and (4) captures and sequesters at least | 13 | | 85% of the total carbon dioxide emissions that the facility | 14 | | would otherwise emit. | 15 | | "Clean coal SNG facility" means a facility that uses a | 16 | | gasification process to produce substitute natural gas, that | 17 | | sequesters at least 85% 90% of the total carbon dioxide | 18 | | emissions that the facility would otherwise emit and that uses | 19 | | and that uses petroleum coke or coal as a feedstock, with all | 20 | | such coal having a high bituminous rank and greater than 1.7 | 21 | | pounds of sulfur per million btu content and has commenced | 22 | | construction by July 1, 2012 in Jefferson County ; provided, | 23 | | however, a clean coal SNG brownfield facility shall not be a | 24 | | clean coal SNG facility may elect to be a clean coal SNG | 25 | | brownfield facility . | 26 | | "Commission" means the Illinois Commerce Commission. |
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| 1 | | "Costs incurred in connection with the development and | 2 | | construction 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 | 2 | | Opportunity. | 3 | | "Director" means the Director of the Illinois Power Agency. | 4 | | "Demand-response" means measures that decrease peak | 5 | | electricity demand or shift demand from peak to off-peak | 6 | | periods. | 7 | | "Energy efficiency" means measures that reduce the amount | 8 | | of electricity or natural gas required to achieve a given end | 9 | | use. | 10 | | "Electric utility" has the same definition as found in | 11 | | Section 16-102 of the Public Utilities Act. | 12 | | "Facility" means an electric generating unit or a | 13 | | co-generating unit that produces electricity along with | 14 | | related equipment necessary to connect the facility to an | 15 | | electric transmission or distribution system. | 16 | | "Governmental aggregator" means one or more units of local | 17 | | government that individually or collectively procure | 18 | | electricity to serve residential retail electrical loads | 19 | | located within its or their jurisdiction. | 20 | | "Local government" means a unit of local government as | 21 | | defined in Article VII of Section 1 of the Illinois | 22 | | Constitution. | 23 | | "Municipality" means a city, village, or incorporated | 24 | | town. | 25 | | "Person" means any natural person, firm, partnership, | 26 | | corporation, either domestic or foreign, company, association, |
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| 1 | | limited liability company, joint stock company, or association | 2 | | and includes any trustee, receiver, assignee, or personal | 3 | | representative thereof. | 4 | | "Project" means the planning, bidding, and construction of | 5 | | a facility. | 6 | | "Public utility" has the same definition as found in | 7 | | Section 3-105 of the Public Utilities Act. | 8 | | "Real property" means any interest in land together with | 9 | | all structures, fixtures, and improvements thereon, including | 10 | | lands under water and riparian rights, any easements, | 11 | | covenants, licenses, leases, rights-of-way, uses, and other | 12 | | interests, together with any liens, judgments, mortgages, or | 13 | | other claims or security interests related to real property. | 14 | | "Renewable energy credit" means a tradable credit that | 15 | | represents the environmental attributes of a certain amount of | 16 | | energy produced from a renewable energy resource. | 17 | | "Renewable energy resources" includes energy and its | 18 | | associated renewable energy credit or renewable energy credits | 19 | | from wind, solar thermal energy, photovoltaic cells and panels, | 20 | | biodiesel, crops and untreated and unadulterated organic waste | 21 | | biomass, tree waste, hydropower that does not involve new | 22 | | construction or significant expansion of hydropower dams, and | 23 | | other alternative sources of environmentally preferable | 24 | | energy. For purposes of this Act, landfill gas produced in the | 25 | | State is considered a renewable energy resource. "Renewable | 26 | | energy resources" does not include the incineration or burning |
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| 1 | | of tires, garbage, general household, institutional, and | 2 | | commercial waste, industrial lunchroom or office waste, | 3 | | landscape waste other than tree waste, railroad crossties, | 4 | | utility poles, or construction or demolition debris, other than | 5 | | untreated and unadulterated waste wood. | 6 | | "Revenue bond" means any bond, note, or other evidence of | 7 | | indebtedness issued by the Authority, the principal and | 8 | | interest of which is payable solely from revenues or income | 9 | | derived from any project or activity of the Agency. | 10 | | "Sequester" means permanent storage of carbon dioxide by | 11 | | injecting it into a saline aquifer, a depleted gas reservoir, | 12 | | or an oil reservoir, directly or through an enhanced oil | 13 | | recovery process that may involve intermediate storage, | 14 | | regardless of whether these activities are conducted by a clean | 15 | | coal facility, clean coal SNG facility, clean coal SNG | 16 | | brownfield facility, or a party with which a clean coal | 17 | | facility, clean coal SNG facility, or clean coal SNG brownfield | 18 | | facility has contracted for such purposes. | 19 | | "Sourcing agreement" means (i) in the case of an electric | 20 | | utility, an agreement between the owner of a clean coal | 21 | | facility and such electric utility, which agreement shall have | 22 | | terms and conditions meeting the requirements of paragraph (3) | 23 | | of subsection (d) of Section 1-75, (ii) in the case of an | 24 | | alternative retail electric supplier, an agreement between the | 25 | | owner of a clean coal facility and such alternative retail | 26 | | electric supplier, which agreement shall have terms and |
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| 1 | | conditions meeting the requirements of Section 16-115(d)(5) of | 2 | | the Public Utilities Act, and (iii) in case of a gas utility, | 3 | | an agreement between the owner of a clean coal SNG brownfield | 4 | | facility and the gas utility, which agreement shall have the | 5 | | terms 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 | 8 | | by gasification of hydrocarbon feedstock, which is | 9 | | substantially interchangeable in use and distribution with | 10 | | conventional natural gas. | 11 | | "Total resource cost test" or "TRC test" means a standard | 12 | | that is met if, for an investment in energy efficiency or | 13 | | demand-response measures, the benefit-cost ratio is greater | 14 | | than one. The benefit-cost ratio is the ratio of the net | 15 | | present value of the total benefits of the program to the net | 16 | | present value of the total costs as calculated over the | 17 | | lifetime of the measures. A total resource cost test compares | 18 | | the sum of avoided electric utility costs, representing the | 19 | | benefits that accrue to the system and the participant in the | 20 | | delivery of those efficiency measures, as well as other | 21 | | quantifiable societal benefits, including avoided natural gas | 22 | | utility costs, to the sum of all incremental costs of end-use | 23 | | measures that are implemented due to the program (including | 24 | | both utility and participant contributions), plus costs to | 25 | | administer, deliver, and evaluate each demand-side program, to | 26 | | quantify the net savings obtained by substituting the |
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| 1 | | demand-side program for supply resources. In calculating | 2 | | avoided costs of power and energy that an electric utility | 3 | | would otherwise have had to acquire, reasonable estimates shall | 4 | | be included of financial costs likely to be imposed by future | 5 | | regulations and legislation on emissions of greenhouse gases.
| 6 | | (Source: P.A. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09; | 7 | | 95-1027, eff. 6-1-09; 96-33, eff. 7-10-09; 96-159, eff. | 8 | | 8-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10; | 9 | | 09600SB3388ham001 and ham003.)
| 10 | | Section 4. If and only if Senate Bill 3388 of the 96th | 11 | | General Assembly (as amended by House Amendment Nos. 1, 2, and | 12 | | 3), then the Public Utilities Act is amended by changing | 13 | | Section 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
| 17 | | Commission may authorize the increase or decrease of rates and | 18 | | charges
based upon changes in the cost of fuel used in the | 19 | | generation or production
of electric power, changes in the cost | 20 | | of purchased power, or changes in
the cost of purchased gas | 21 | | through the application of fuel adjustment
clauses or purchased | 22 | | gas adjustment clauses. The Commission may also
authorize the | 23 | | increase or decrease of rates and charges based upon | 24 | | expenditures
or revenues resulting from the purchase or sale of |
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| 1 | | emission allowances created
under the federal Clean Air Act | 2 | | Amendments of 1990,
through such fuel adjustment clauses, as a | 3 | | cost of fuel. For the purposes of
this paragraph, cost of fuel | 4 | | used in the generation or production of electric
power shall | 5 | | include the amount of any fees paid by the utility for the
| 6 | | implementation and operation of a process for the | 7 | | desulfurization of the
flue gas when burning high sulfur coal | 8 | | at any location within the State of
Illinois irrespective of | 9 | | the attainment status designation of such
location; but shall | 10 | | not include transportation costs
of coal
(i) except to the | 11 | | extent that for contracts entered into on
and after the | 12 | | effective date of this amendatory Act of 1997,
the cost of the | 13 | | coal, including transportation costs,
constitutes the lowest | 14 | | cost for adequate and reliable fuel
supply reasonably available | 15 | | to the public utility in
comparison to the cost, including | 16 | | transportation costs, of
other adequate and reliable sources of | 17 | | fuel supply reasonably
available to the public utility, or (ii)
| 18 | | except as otherwise provided in the next 3 sentences of this | 19 | | paragraph.
Such costs of fuel
shall, when requested by a | 20 | | utility or at the conclusion of the utility's
next general | 21 | | electric rate proceeding, whichever shall first occur, include
| 22 | | transportation costs of coal purchased under existing coal | 23 | | purchase
contracts. For purposes of this paragraph "existing | 24 | | coal purchase
contracts" means contracts for the purchase of | 25 | | coal in effect on the
effective date of this amendatory Act of | 26 | | 1991, as such contracts may
thereafter be amended, but only to |
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| 1 | | the extent that any such amendment does
not increase the | 2 | | aggregate quantity of coal to be purchased under such
contract.
| 3 | | Nothing herein shall authorize an electric utility
to recover | 4 | | through its fuel adjustment clause any amounts of
| 5 | | transportation costs of coal that were included in the revenue
| 6 | | requirement used to set base rates in its most recent general
| 7 | | rate proceeding.
Cost shall be based upon uniformly applied | 8 | | accounting
principles. Annually, the Commission shall initiate | 9 | | public hearings to
determine whether the clauses reflect actual | 10 | | costs of fuel, gas, power, or
coal transportation purchased to | 11 | | determine whether such purchases were
prudent, and to reconcile | 12 | | any amounts collected with the actual costs of
fuel, power, | 13 | | gas, or coal transportation prudently purchased. In each such
| 14 | | proceeding, the burden of proof shall be upon the utility to | 15 | | establish the
prudence of its cost of fuel, power, gas, or coal
| 16 | | transportation purchases
and costs.
The Commission shall
issue | 17 | | its final order in each such annual proceeding for an
electric | 18 | | utility by December 31 of the year immediately
following the | 19 | | year to which the proceeding pertains, provided,
that the | 20 | | Commission shall issue its final order with respect
to such | 21 | | annual proceeding for the years 1996 and earlier by December | 22 | | 31, 1998. | 23 | | (b) A public utility providing electric service, other than | 24 | | a public utility
described in subsections (e) or (f) of this | 25 | | Section, may at
any time during the mandatory transition period | 26 | | file with the
Commission proposed tariff sheets that eliminate |
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| 1 | | the public
utility's fuel adjustment clause and adjust the | 2 | | public
utility's base rate tariffs by the amount necessary for | 3 | | the
base fuel component of the base rates to recover the public
| 4 | | utility's average fuel and power supply costs per kilowatt-hour | 5 | | for the 2
most recent years for which the Commission
has issued | 6 | | final orders in annual proceedings pursuant to
subsection (a), | 7 | | where the average fuel and power supply costs
per kilowatt-hour | 8 | | shall be calculated as the sum of the public
utility's prudent | 9 | | and allowable fuel and power supply costs as
found by the | 10 | | Commission in the 2 proceedings divided by the
public utility's | 11 | | actual jurisdictional kilowatt-hour sales for
those 2 years. | 12 | | Notwithstanding any contrary or inconsistent
provisions in | 13 | | Section 9-201 of this Act, in subsection (a) of
this Section or | 14 | | in any rules or regulations promulgated by the
Commission | 15 | | pursuant to subsection (g) of this Section, the
Commission | 16 | | shall review and shall by order approve, or approve
as | 17 | | modified, the proposed tariff sheets within 60 days after
the | 18 | | date of the public utility's filing. The Commission may
modify | 19 | | the public utility's proposed tariff sheets only to the
extent | 20 | | the Commission finds necessary to achieve conformance
to the | 21 | | requirements of this subsection (b). During the 5
years | 22 | | following the date of the Commission's order, but in any
event | 23 | | no earlier than January 1, 2007, a public utility whose
fuel | 24 | | adjustment clause has been eliminated pursuant to this
| 25 | | subsection shall not file proposed tariff sheets seeking, or
| 26 | | otherwise petition the Commission for, reinstatement of a fuel
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| 1 | | adjustment clause. | 2 | | (c) Notwithstanding any contrary or inconsistent
| 3 | | provisions in Section 9-201 of this Act, in subsection (a) of
| 4 | | this Section or in any rules or regulations promulgated by the
| 5 | | Commission pursuant to subsection (g) of this Section, a
public | 6 | | utility providing electric service, other than a public utility
| 7 | | described
in subsection (e) or (f) of this Section, may at any | 8 | | time
during the mandatory transition period file with the
| 9 | | Commission proposed tariff sheets that establish the rate per
| 10 | | kilowatt-hour to be applied pursuant to the public utility's
| 11 | | fuel adjustment clause at the average value for such rate
| 12 | | during the preceding 24 months, provided that such average
rate | 13 | | results in a credit to customers' bills, without making
any | 14 | | revisions to the public utility's base rate tariffs. The
| 15 | | proposed tariff sheets shall establish the fuel adjustment
rate | 16 | | for a specific time period of at least 3 years but not
more | 17 | | than 5 years, provided that the terms and conditions for
any | 18 | | reinstatement earlier than 5 years shall be set forth in
the | 19 | | proposed tariff sheets and subject to modification or
approval | 20 | | by the Commission. The Commission shall review and
shall by | 21 | | order approve the proposed tariff sheets if it finds
that the | 22 | | requirements of this subsection are met. The
Commission shall | 23 | | not conduct the annual hearings specified in the
last 3 | 24 | | sentences of subsection (a) of this Section for the
utility for | 25 | | the period that the factor established pursuant to
this | 26 | | subsection is in effect. |
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| 1 | | (d) A public utility providing electric service, or a | 2 | | public utility
providing gas service
may file with the | 3 | | Commission proposed tariff sheets that
eliminate the public | 4 | | utility's fuel or purchased gas
adjustment clause and adjust | 5 | | the public utility's base rate
tariffs to provide for recovery | 6 | | of power supply costs or gas
supply costs that would have been | 7 | | recovered through such
clause; provided, that the provisions of | 8 | | this subsection (d) shall not be
available to a public utility | 9 | | described in subsections (e) or (f) of this
Section to | 10 | | eliminate its fuel adjustment clause. Notwithstanding any | 11 | | contrary
or inconsistent
provisions in Section 9-201 of this | 12 | | Act, in subsection (a) of
this Section, or in any rules or | 13 | | regulations promulgated by
the Commission pursuant to | 14 | | subsection (g) of this Section, the
Commission shall review and | 15 | | shall by order approve, or approve
as modified in the | 16 | | Commission's order, the proposed tariff
sheets within 240 days | 17 | | after the date of the public utility's
filing. The Commission's | 18 | | order shall approve rates and
charges that the Commission, | 19 | | based on information in the
public utility's filing or on the | 20 | | record if a hearing is held
by the Commission, finds will | 21 | | recover the reasonable, prudent
and necessary jurisdictional | 22 | | power supply costs or gas supply
costs incurred or to be | 23 | | incurred by the public utility during
a 12 month period found | 24 | | by the Commission to be appropriate
for these purposes, | 25 | | provided, that such period shall be either
(i) a 12 month | 26 | | historical period occurring during the 15
months ending on the |
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| 1 | | date of the public utility's filing, or
(ii) a 12 month future | 2 | | period ending no later than 15 months
following the date of the | 3 | | public utility's filing. The public
utility shall include with | 4 | | its tariff filing information
showing both (1) its actual | 5 | | jurisdictional power supply costs
or gas supply costs for a 12 | 6 | | month historical period
conforming to (i) above and (2) its | 7 | | projected jurisdictional
power supply costs or gas supply costs | 8 | | for a future 12 month
period conforming to (ii) above. If the | 9 | | Commission's order
requires modifications in the tariff sheets | 10 | | filed by the
public utility, the public utility shall have 7 | 11 | | days following
the date of the order to notify the Commission | 12 | | whether the
public utility will implement the modified tariffs | 13 | | or elect to
continue its fuel or purchased gas adjustment | 14 | | clause in force
as though no order had been entered. The | 15 | | Commission's order
shall provide for any reconciliation of | 16 | | power supply costs or
gas supply costs, as the case may be, and | 17 | | associated revenues
through the date that the public utility's | 18 | | fuel or purchased
gas adjustment clause is eliminated. During | 19 | | the 5 years
following the date of the Commission's order, a | 20 | | public utility
whose fuel or purchased gas adjustment clause | 21 | | has been
eliminated pursuant to this subsection shall not file | 22 | | proposed
tariff sheets seeking, or otherwise petition the | 23 | | Commission
for, reinstatement or adoption of a fuel or | 24 | | purchased gas
adjustment clause. Nothing in this subsection (d) | 25 | | shall be
construed as limiting the Commission's authority to | 26 | | eliminate
a public utility's fuel adjustment clause or |
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| 1 | | purchased gas
adjustment clause in accordance with any other | 2 | | applicable
provisions of this Act. | 3 | | (e) Notwithstanding any contrary or inconsistent | 4 | | provisions in
Section 9-201 of this Act, in subsection (a) of | 5 | | this Section, or in
any rules promulgated by the Commission | 6 | | pursuant
to subsection (g) of this Section, a public utility | 7 | | providing
electric service to more than 1,000,000 customers in | 8 | | this State may, within the
first 6 months after the
effective | 9 | | date of this amendatory Act of 1997, file with the
Commission | 10 | | proposed tariff sheets that eliminate, effective
January 1, | 11 | | 1997, the public utility's fuel adjustment clause
without | 12 | | adjusting its base rates, and such tariff sheets shall be
| 13 | | effective upon filing. To the extent the application of the | 14 | | fuel
adjustment clause had resulted in net charges to customers | 15 | | after
January 1, 1997, the utility shall also file a tariff | 16 | | sheet that
provides for a refund stated on a per kilowatt-hour | 17 | | basis of such
charges over a period not to exceed 6 months; | 18 | | provided
however, that such refund shall not include the | 19 | | proportional
amounts of taxes paid under the Use Tax Act, | 20 | | Service Use Tax Act,
Service Occupation Tax Act, and Retailers' | 21 | | Occupation Tax Act on
fuel used in generation. The Commission | 22 | | shall issue an order
within 45 days after the date of the | 23 | | public utility's filing
approving or approving as modified such | 24 | | tariff sheet. If the fuel
adjustment clause is eliminated | 25 | | pursuant to this subsection, the
Commission shall not conduct | 26 | | the annual hearings specified in the
last 3 sentences of |
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| 1 | | subsection (a) of this Section for the
utility for any period | 2 | | after December 31, 1996 and prior to any
reinstatement of such | 3 | | clause. A public utility whose fuel
adjustment clause has been | 4 | | eliminated pursuant to this subsection
shall not file a | 5 | | proposed tariff sheet seeking, or otherwise
petition the | 6 | | Commission for, reinstatement of the fuel adjustment
clause | 7 | | prior to January 1, 2007. | 8 | | (f) Notwithstanding any contrary or inconsistent | 9 | | provisions in Section
9-201 of this Act, in subsection (a) of | 10 | | this Section, or in any rules or
regulations promulgated by the | 11 | | Commission pursuant to subsection (g) of this
Section, a public | 12 | | utility providing electric service to more than 500,000
| 13 | | customers but fewer than 1,000,000 customers in this State may, | 14 | | within the
first
6 months after the effective date of this | 15 | | amendatory Act of 1997, file with the
Commission proposed | 16 | | tariff sheets that eliminate, effective January 1, 1997,
the | 17 | | public utility's fuel adjustment clause and adjust its base | 18 | | rates by the
amount necessary for the base fuel component of | 19 | | the base rates to recover
91% of the public utility's average | 20 | | fuel and power supply costs for the 2 most
recent years for | 21 | | which the Commission, as of January 1, 1997, has issued final
| 22 | | orders in annual proceedings pursuant to subsection (a), where | 23 | | the average fuel
and power supply costs per kilowatt-hour shall | 24 | | be calculated as the sum of the
public utility's prudent and | 25 | | allowable fuel and power supply costs as found by
the | 26 | | Commission in the 2 proceedings divided by the public utility's |
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| 1 | | actual
jurisdictional kilowatt-hour sales for those 2 years, | 2 | | provided, that such
tariff sheets shall be effective upon | 3 | | filing. To the extent the application of
the fuel adjustment | 4 | | clause had resulted in net charges to customers after
January | 5 | | 1, 1997, the utility shall also file a tariff sheet that | 6 | | provides for a
refund stated on a per kilowatt-hour basis of | 7 | | such charges over a period not to
exceed 6 months. Provided | 8 | | however, that such refund shall not include the
proportional | 9 | | amounts of taxes paid under the Use Tax Act, Service Use Tax | 10 | | Act,
Service Occupation Tax Act, and Retailers' Occupation Tax | 11 | | Act on fuel used in
generation. The Commission shall issue an | 12 | | order within 45 days after the date
of the public utility's | 13 | | filing approving or approving as modified such tariff
sheet. If | 14 | | the fuel adjustment clause is eliminated pursuant to this
| 15 | | subsection, the Commission shall not conduct the annual | 16 | | hearings specified in
the last 3 sentences of subsection (a) of | 17 | | this Section for the utility for any
period after December 31, | 18 | | 1996 and prior to any reinstatement of such clause.
A public | 19 | | utility whose fuel adjustment clause has been eliminated | 20 | | pursuant to
this subsection shall not file a proposed tariff | 21 | | sheet seeking, or otherwise
petition the Commission for, | 22 | | reinstatement of the fuel adjustment clause prior
to January 1, | 23 | | 2007. | 24 | | (g) The Commission shall have authority to promulgate rules | 25 | | and
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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| 1 | | or before March 31, 2011 for up to 10 years of supply with any | 2 | | company for the purchase of substitute natural gas (SNG) | 3 | | produced from coal through the gasification process if the | 4 | | company has commenced construction of a coal gasification | 5 | | facility by July 1, 2012 in Jefferson County and commencement | 6 | | of construction shall mean that material physical site work has | 7 | | occurred, such as site clearing and excavation, water runoff | 8 | | prevention, water retention reservoir preparation, or | 9 | | foundation development. The contract shall contain the | 10 | | following provisions: (i) the only coal to be used in the | 11 | | gasification process has high volatile bituminous rank and | 12 | | greater than 1.7 pounds of sulfur per million Btu content; (ii) | 13 | | at the time the contract term commences, the price per million | 14 | | Btu may not exceed $7.95 in 2008 dollars, adjusted annually | 15 | | based on the change in the Annual Consumer Price Index for All | 16 | | Urban Consumers for the Midwest Region as published in April by | 17 | | the United States Department of Labor, Bureau of Labor | 18 | | Statistics (or a suitable Consumer Price Index calculation if | 19 | | this Consumer Price Index is not available) for the previous | 20 | | calendar year; provided that the price per million Btu shall | 21 | | not exceed $9.95 at any time during the contract; (iii) the | 22 | | utility's aggregate long-term supply contracts for the | 23 | | purchase of SNG does not exceed 25% of the annual system supply | 24 | | requirements of the utility as of 2008 and the quantity of SNG | 25 | | supplied 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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| 1 | | Section shall not include any lobbying expenses, charitable | 2 | | contributions, advertising, organizational memberships, or | 3 | | marketing expenses per year. | 4 | | (h-1) Any Illinois gas utility may enter into a sourcing | 5 | | agreement for up to 30 years of supply with a the clean coal | 6 | | SNG brownfield facility if the clean coal SNG brownfield | 7 | | facility has commenced construction. Any gas utility that is | 8 | | providing service to more than 150,000 customers on the | 9 | | effective date of this amendatory Act of the 96th General | 10 | | Assembly shall either elect to file biennial rate proceedings | 11 | | before the Commission in the years 2011, 2013, and 2015 or | 12 | | enter into a sourcing agreement or sourcing agreements with all | 13 | | a clean coal SNG brownfield facilities each facility for 30 | 14 | | years for either (i) 43,500,000,000 cubic feet per year times a | 15 | | percentage calculated by dividing 100 by the number of | 16 | | utilities entering into sourcing agreements with the clean coal | 17 | | SNG brownfield facility or (ii) such lesser amount as may be | 18 | | available from the clean coal SNG brownfield facility. | 19 | | Provided, however, that the Illinois Power Agency may | 20 | | allocate the purchase obligations more proportionately based | 21 | | upon total therms sold to ultimate customers, if it is | 22 | | demonstrated with certainty that such alternative allocation | 23 | | will not result in adverse consolidation, derivative, or lease | 24 | | impacts to the balance sheet or income statement of any | 25 | | purchasing utility. In any event, no utility shall be required | 26 | | to purchase more than 42% of the projected annual output of the |
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| 1 | | clean coal SNG brownfield facility, with the remainder of such | 2 | | utility's obligation to be divided proportionately between the | 3 | | other utilities. | 4 | | A gas utility electing to file biennial rate proceedings | 5 | | before the Commission must file a notice of its election with | 6 | | the Commission within 60 days after the effective date of this | 7 | | amendatory Act of the 96th General Assembly or its right to | 8 | | make the election is irrevocably waived. A gas utility electing | 9 | | to file biennial rate proceedings shall make such filings no | 10 | | later than August 1 of the years 2011, 2013, and 2015, | 11 | | consistent with all requirements of 83 Ill. Adm. Code 255 and | 12 | | 285 as though the gas utility were filing for an increase in | 13 | | its rates, without regard to whether such filing would produce | 14 | | an increase, a decrease, or no change in the gas utility's | 15 | | rates, and the Commission shall review the gas utility's filing | 16 | | and shall issue its order in accordance with the provisions of | 17 | | Section 9-201 of this Act. | 18 | | Within 15 days after the effective date of this amendatory | 19 | | Act of the 96th General Assembly, the owner of the clean coal | 20 | | SNG brownfield facility shall submit to the Illinois Power | 21 | | Agency and each gas utility that is providing service to more | 22 | | than 150,000 customers on the effective date of this amendatory | 23 | | Act of the 96th General Assembly a copy of a draft sourcing | 24 | | agreement. Within 45 days after receipt of the draft sourcing | 25 | | agreement, each such gas utility shall provide the Illinois | 26 | | Power Agency and the owner of a clean coal SNG brownfield |
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| 1 | | facility with its comments and recommended revisions to the | 2 | | draft sourcing agreement. Within 15 days after the receipt of | 3 | | the gas utility's comments and recommended revisions, the owner | 4 | | of the clean coal SNG brownfield facility shall submit its | 5 | | responsive comments and a further revised draft of the sourcing | 6 | | agreement to the Illinois Power Agency. The Illinois Power | 7 | | Agency shall review the draft sourcing agreement and comments. | 8 | | If the parties to the sourcing agreement do not agree on | 9 | | the terms therein, then the Illinois Power Agency shall retain | 10 | | an independent mediator to mediate the dispute between the | 11 | | parties. If the parties are in agreement on the terms of the | 12 | | sourcing agreement, the Illinois Power Agency shall approve the | 13 | | final draft sourcing agreement. If after mediation the parties | 14 | | have failed to come to agreement, then the Illinois Power | 15 | | Agency shall revise the draft sourcing agreement as necessary | 16 | | to confirm that the final draft sourcing agreement contains | 17 | | only terms that are reasonable and equitable. The Illinois | 18 | | Power Agency shall adopt and make public a policy detailing the | 19 | | process for retaining a mediator under this subsection (h-1). | 20 | | Any mediator retained to assist with mediating disputes between | 21 | | the parties regarding the sourcing agreement shall be retained | 22 | | no later than 60 days after the effective date of this | 23 | | amendatory Act of the 96th General Assembly. | 24 | | Upon approval of a final draft agreement, the Illinois | 25 | | Power Agency shall submit the final draft agreement to the | 26 | | Capital Development Board and the Commission no later than 90 |
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| 1 | | days after the effective date of this amendatory Act of the | 2 | | 96th General Assembly. The gas utility and the clean coal SNG | 3 | | brownfield facility shall pay a reasonable fee as required by | 4 | | the Illinois Power Agency for its services under this | 5 | | subsection (h-1) and shall pay the mediator's reasonable fees, | 6 | | if any. The Illinois Power Agency shall adopt and make public a | 7 | | policy detailing the process for retaining a mediator under | 8 | | this Section. | 9 | | The sourcing agreement between a gas utility and the clean | 10 | | coal SNG brownfield facility shall contain the following | 11 | | provisions: | 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 | 15 | | SNG brownfield facility shall guarantee a minimum of | 16 | | $100,000,000 in consumer savings, calculated in real 2010 | 17 | | dollars at the conclusion of the term of the sourcing agreement | 18 | | by comparing the delivered SNG price to the Chicago City-gate | 19 | | price on a weighted daily basis for each day over the entire | 20 | | term of the sourcing agreement. Prior to the clean coal SNG | 21 | | brownfield facility issuing a notice to proceed to | 22 | | construction, the clean coal SNG brownfield facility shall | 23 | | establish a consumer protection reserve account for the benefit | 24 | | of the retail customers of the utilities that have entered into | 25 | | sourcing agreements with the clean coal SNG brownfield facility | 26 | | pursuant to subsection (h-1), with cash principal in the amount |
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| 1 | | of $150,000,000. Such cash principal shall only be recovered | 2 | | through the consumer protection reserve account and not as a | 3 | | cost to be recovered in the delivered SNG price pursuant to | 4 | | subsection (h-3) of this Section. The consumer protection | 5 | | reserve account shall be maintained and administered by an | 6 | | independent trustee that is mutually agreed upon by the clean | 7 | | coal SNG brownfield facility, the utilities, and the Commission | 8 | | in an interest-bearing account in accordance with the | 9 | | following: | 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 |
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| 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. |
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| 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 | 19 | | brownfield 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; |
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| 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; |
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| 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 |
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| 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 |
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| 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 | 15 | | submits the final draft sourcing agreement pursuant to | 16 | | subsection (h-1), the Commission shall approve a sourcing | 17 | | agreement containing the capital costs, rate of return, and | 18 | | operations and maintenance costs. Once the sourcing agreement | 19 | | is approved, then the gas utility subject to that sourcing | 20 | | agreement shall have 45 days after the date of the Commission's | 21 | | approval to enter into the sourcing agreement. | 22 | | (h-5) The Attorney General, on behalf of the people of the | 23 | | State of Illinois, may specifically enforce the requirements of | 24 | | this subsection (h-5). All contracts under subsection (h) of | 25 | | this Act and all sourcing agreements under subsection (h-1) of | 26 | | this Act, regardless of duration, shall require the owner of |
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| 1 | | any facility supplying SNG under the contract or sourcing | 2 | | agreement to provide documentation to the Commission each year, | 3 | | starting in the facility's first year of commercial operation, | 4 | | accurately reporting the quantity of carbon dioxide emissions | 5 | | from the facility that have been captured and sequestered and | 6 | | reporting any quantities of carbon dioxide released from the | 7 | | site or sites at which carbon dioxide emissions were | 8 | | sequestered in prior years, based on continuous monitoring of | 9 | | those sites. If, in any year, the owner of the facility | 10 | | described in subsection (h) of this Act fails to demonstrate | 11 | | that the facility captured and sequestered at least 90% of the | 12 | | total carbon dioxide emissions that the facility would | 13 | | otherwise emit or that sequestration of emissions from prior | 14 | | years has failed, resulting in the release of carbon dioxide | 15 | | into the atmosphere, then the owner of the facility must offset | 16 | | excess emissions. Any such carbon dioxide offsets must be | 17 | | permanent, additional, verifiable, real, located within the | 18 | | State of Illinois, and legally and practicably enforceable; | 19 | | provided that the owner of the facility described in subsection | 20 | | (h) of this Act shall not be obligated to acquire carbon | 21 | | dioxide emission offsets to the extent that the cost of | 22 | | acquiring such offsets would exceed $40 million in any given | 23 | | year. No costs of any purchases of carbon offsets may be | 24 | | recovered from a utility or its customers. All carbon offsets | 25 | | purchased for this purpose must be permanently retired. | 26 | | If, in any year, the owner of a clean coal SNG brownfield |
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| 1 | | facility fails to demonstrate that the clean coal SNG | 2 | | brownfield facility captured and sequestered at least 85% of | 3 | | the total carbon dioxide emissions that the facility would | 4 | | otherwise emit, then the owner of the clean coal SNG brownfield | 5 | | facility must pay a penalty of $20 per ton of excess carbon | 6 | | emissions up to $20,000,000, which shall be deposited into the | 7 | | Energy Efficiency Trust Fund and distributed pursuant to | 8 | | subsection (b) of Section 6-6 of the Renewable Energy, Energy | 9 | | Efficiency, and Coal Resources Development Law of 1997. | 10 | | Provided, however, to the extent that the owner of the clean | 11 | | coal SNG brownfield facility can demonstrate that the failure | 12 | | was as a result of acts of God (including fire, flood, | 13 | | earthquake, tornado, lightning, hurricane, or other natural | 14 | | disaster); any amendment, modification, or abrogation of any | 15 | | applicable law or regulation that would prevent performance; | 16 | | war; invasion; act of foreign enemies; hostilities (regardless | 17 | | of whether war is declared); civil war; rebellion; revolution; | 18 | | insurrection; military or usurped power or confiscation; | 19 | | terrorist activities; civil disturbances; riots; | 20 | | nationalization; sabotage; blockage; or embargo, the owner of | 21 | | the clean coal SNG brownfield facility shall not be subject to | 22 | | a penalty if and only if (i) it promptly provides notice of its | 23 | | failure to the Commission; (ii) as soon as practicable and | 24 | | consistent with any order or direction from the Commission, it | 25 | | submits to the Commission proposed modifications to its carbon | 26 | | capture and sequestration plan; and (iii) it carries out its |
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| 1 | | proposed modifications in the manner and time directed by the | 2 | | Commission. If the Commission finds that the facility has not | 3 | | satisfied each of these requirements, then the facility shall | 4 | | be subject to the penalty. If the owner of a clean coal SNG | 5 | | brownfield facility demonstrates that the clean coal SNG | 6 | | brownfield facility captured and sequestered more than 85% of | 7 | | the total carbon emissions that the facility would otherwise | 8 | | emit, the owner of the clean coal SNG brownfield facility may | 9 | | credit such additional amounts to reduce the amount of any | 10 | | future penalty to be paid. The penalty resulting from the | 11 | | failure to capture and sequester at least the minimum amount of | 12 | | carbon dioxide shall not be passed on to a utility or its | 13 | | customers. | 14 | | In addition to any penalty for the clean coal SNG | 15 | | brownfield facility's failure to capture and sequester at least | 16 | | its minimum sequestration requirement, the Attorney General, | 17 | | on behalf of the People of the State of Illinois, shall bring | 18 | | an action for specific performance of this subsection (h-5). | 19 | | Such action may be filed in any circuit court in Illinois. By | 20 | | entering into a sourcing agreement pursuant to subsection (h-1) | 21 | | of this Section, the clean coal SNG brownfield facility agrees | 22 | | to waive any objections to venue or to the jurisdiction of the | 23 | | court with regard to the Attorney General's action for specific | 24 | | performance under this subsection (h-5). | 25 | | In addition, carbon dioxide emission credits equivalent to | 26 | | 50% of the amount of credits associated with the required |
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| 1 | | sequestration of carbon dioxide from the facility must be | 2 | | permanently retired. Compliance with the sequestration | 3 | | requirements and the offset purchase requirements specified in | 4 | | this subsection (h-5) for the facility described in subsection | 5 | | (h) of this Act shall be assessed annually by an independent | 6 | | expert retained by the owner of the facility described in | 7 | | subsection (h) of this Act, with the advance written approval | 8 | | of the Attorney General. Compliance with the sequestration | 9 | | requirements and penalty requirements specified in this | 10 | | subsection (h-5) for the clean coal SNG brownfield facility | 11 | | shall be assessed annually by the Commission, which may in its | 12 | | discretion retain an expert to facilitate its assessment. If an | 13 | | expert is retained by the Commission, then the clean coal SNG | 14 | | brownfield facility shall pay for the expert's reasonable fees, | 15 | | and such costs shall not be passed through to a utility or its | 16 | | customers. A SNG facility operating pursuant to this subsection | 17 | | (h-5) shall not forfeit its designation as a clean coal SNG | 18 | | facility or a clean coal SNG brownfield facility if the | 19 | | facility fails to fully comply with the applicable carbon | 20 | | sequestration requirements in any given year, provided the | 21 | | requisite offsets are purchased or requisite penalties are | 22 | | paid. | 23 | | Responsibility for compliance with the sequestration | 24 | | requirements specified in this subsection (h-5) for the clean | 25 | | coal SNG brownfield facility shall reside solely with the clean | 26 | | coal SNG brownfield facility regardless of whether the facility |
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| 1 | | has contracted with another party to capture, transport, or | 2 | | sequester carbon dioxide. | 3 | | (h-7) Sequestration permitting, oversight, and | 4 | | investigations. | 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 |
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| 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 |
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| 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 |
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| 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 | 12 | | right to recover prudently incurred increased costs or reduced | 13 | | revenue resulting from any new or amendatory legislation or | 14 | | other action. The State of Illinois pledges that the State will | 15 | | not 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 |
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| 1 | | sourcing agreements and the issuers and holders of bonds or | 2 | | other obligations issued or incurred to finance or refinance | 3 | | the clean coal SNG brownfield facility. The clean coal SNG | 4 | | brownfield facility is authorized to include and refer to these | 5 | | pledges in any financing agreement into which it may enter in | 6 | | regard to those sourcing agreements. | 7 | | The State of Illinois retains and reserves all other rights | 8 | | to enact new or amendatory legislation or take any other | 9 | | action, without impairment of the right of the clean coal SNG | 10 | | brownfield facility to recover prudently incurred increased | 11 | | costs or reduced revenue resulting from the new or amendatory | 12 | | legislation or other action, including, but not limited to, | 13 | | such legislation or other action that would (i) directly or | 14 | | indirectly raise the costs the clean coal SNG brownfield | 15 | | facility must incur; (ii) directly or indirectly place | 16 | | additional restrictions, regulations, or requirements on the | 17 | | clean coal SNG brownfield facility; (iii) prohibit | 18 | | sequestration in general or prohibit a specific sequestration | 19 | | method or project; or (iv) increase minimum sequestration | 20 | | requirements for the clean coal SNG brownfield facility to the | 21 | | extent technically feasible. The clean coal SNG brownfield | 22 | | facility shall have the right to recover prudently incurred | 23 | | increased costs or reduced revenue resulting from the new or | 24 | | amendatory legislation or other action as described in this | 25 | | subsection (h-9). | 26 | | (h-10) Contract costs for SNG incurred by an Illinois gas |
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| 1 | | utility are reasonable and prudent and recoverable through the | 2 | | purchased gas adjustment clause and are not subject to review | 3 | | or disallowance by the Commission. Contract costs are costs | 4 | | incurred by the utility under the terms of a contract that | 5 | | incorporates the terms stated in subsection (h) of this Section | 6 | | as confirmed in writing by the Illinois Power Agency as set | 7 | | forth in subsection (h-20) of this Section, which confirmation | 8 | | shall be deemed conclusive, or as a consequence of or condition | 9 | | to its performance under the contract, including (i) amounts | 10 | | paid for SNG under the SNG contract and (ii) costs of | 11 | | transportation and storage services of SNG purchased from | 12 | | interstate pipelines under federally approved tariffs. Any | 13 | | contract, the terms of which have been confirmed in writing by | 14 | | the Illinois Power Agency as set forth in subsection (h-20) of | 15 | | this Section and the performance of the parties under such | 16 | | contract cannot be grounds for challenging prudence or cost | 17 | | recovery by the utility through the purchased gas adjustment | 18 | | clause, and in such cases, the Commission is directed not to | 19 | | consider, and has no authority to consider, any attempted | 20 | | challenges. | 21 | | The contracts entered into by Illinois gas utilities | 22 | | pursuant to subsection (h) of this Section shall provide that | 23 | | the utility retains the right to terminate the contract without | 24 | | further obligation or liability to any party if the contract | 25 | | has been impaired as a result of any legislative, | 26 | | administrative, judicial, or other governmental action that is |
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| 1 | | taken that eliminates all or part of the prudence protection of | 2 | | this subsection (h-10) or denies the recoverability of all or | 3 | | part of the contract costs through the purchased gas adjustment | 4 | | clause. Should any Illinois gas utility exercise its right | 5 | | under this subsection (h-10) to terminate the contract, all | 6 | | contract costs incurred prior to termination are and will be | 7 | | deemed reasonable, prudent, and recoverable as and when | 8 | | incurred and not subject to review or disallowance by the | 9 | | Commission. Any order, issued by the State requiring or | 10 | | authorizing the discontinuation of the merchant function, | 11 | | defined as the purchase and sale of natural gas by an Illinois | 12 | | gas utility for the ultimate consumer in its service territory | 13 | | shall include provisions necessary to prevent the impairment of | 14 | | the value of any contract hereunder over its full term. | 15 | | (h-11) All costs incurred by an Illinois gas utility in | 16 | | procuring SNG, including procuring SNG from a clean coal SNG | 17 | | brownfield facility or a third-party marketer pursuant to | 18 | | subsection (h-1), are reasonable and prudent and recoverable | 19 | | through the purchased gas adjustment clause and are not subject | 20 | | to review or disallowance by the Commission. Sourcing agreement | 21 | | costs are costs incurred by the utility under the terms of a | 22 | | sourcing agreement that incorporates the terms stated in | 23 | | subsection (h-1) of this Section as approved by the Commission | 24 | | as set forth in subsection (h-4) of this Section, which | 25 | | approval shall be deemed conclusive, or as a consequence of or | 26 | | condition to its performance under the contract, including (i) |
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| 1 | | amounts paid for SNG under the SNG contract and (ii) costs of | 2 | | transportation and storage services of SNG purchased from | 3 | | interstate pipelines under federally approved tariffs. Any | 4 | | sourcing agreement, the terms of which have been approved by | 5 | | the Commission as set forth in subsection (h-4) of this | 6 | | Section, and the performance of the parties under the sourcing | 7 | | agreement cannot be grounds for challenging prudence or cost | 8 | | recovery by the utility through the purchased gas adjustment | 9 | | clause, and in these cases, the Commission is directed not to | 10 | | consider, and has no authority to consider, any attempted | 11 | | challenges. | 12 | | (h-15) With respect to each contract entered into by the | 13 | | company with an Illinois utility in accordance with the terms | 14 | | stated in subsection (h) of this Section, within 60 days | 15 | | following the completion of purchases of SNG, the Illinois | 16 | | Power Agency shall conduct an analysis to determine (i) the | 17 | | average contract SNG cost, which shall be calculated as the | 18 | | total amount paid to a company for SNG over the contract term, | 19 | | plus the cost to the utility of the required transportation and | 20 | | storage services of SNG, divided by the total number of MMBtus | 21 | | of SNG actually purchased under the utility contract; (ii) the | 22 | | average natural gas purchase cost, which shall be calculated as | 23 | | the total annual supply costs paid for natural gas (excluding | 24 | | SNG) purchased by such utility over the contract term, plus the | 25 | | costs of transportation and storage services of such natural | 26 | | gas (excluding such costs for SNG), divided by the total number |
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| 1 | | of MMBtus of natural gas (excluding SNG) actually purchased by | 2 | | the utility during the contract term; (iii) the cost | 3 | | differential, which shall be the difference between the average | 4 | | contract SNG cost and the average natural gas purchase cost; | 5 | | and (iv) the revenue share target, which shall be the cost | 6 | | differential multiplied by the total amount of SNG purchased | 7 | | under such utility contract. If the average contract SNG cost | 8 | | is equal to or less than the average natural gas purchase cost, | 9 | | then the company shall have no further obligation to the | 10 | | utility. If the average contract SNG cost for such SNG contract | 11 | | is greater than the average natural gas purchase cost for such | 12 | | utility, then the company shall market the daily production of | 13 | | SNG and distribute on a monthly basis 5% of amounts collected | 14 | | with respect to such future sales to the utilities in | 15 | | proportion to each utility's SNG purchases from the company | 16 | | during the term of the SNG contract to be used to reduce the | 17 | | utility's natural gas costs through the purchased gas | 18 | | adjustment clause; such payments to the utility shall continue | 19 | | until such time as the sum of such payments equals the revenue | 20 | | share target of that utility. The company or utilities shall | 21 | | have no obligation to repay the revenue share target except as | 22 | | provided for in this subsection (h-15). | 23 | | (h-20) The General Assembly authorizes the Illinois | 24 | | Finance Authority to issue bonds to the maximum extent | 25 | | permitted to finance coal gasification facilities described in | 26 | | this Section, which constitute both "industrial projects" |
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| 1 | | under Article 801 of the Illinois Finance Authority Act and | 2 | | "clean coal and energy projects" under Sections 825-65 through | 3 | | 825-75 of the Illinois Finance Authority Act. The General | 4 | | Assembly further authorizes the Illinois Power Agency to become | 5 | | party to agreements and take such actions as necessary to | 6 | | enable the Illinois Power Agency or its designate to (i) review | 7 | | and confirm in writing that the terms stated in subsection (h) | 8 | | of this Section are incorporated in the SNG contract, and (ii) | 9 | | conduct an analysis pursuant to subsection (h-15) of this | 10 | | Section. Administrative costs incurred by the Illinois Finance | 11 | | Authority and Illinois Power Agency in performance of this | 12 | | subsection (h-20) shall be subject to reimbursement by the | 13 | | company on terms as the Illinois Finance Authority, the | 14 | | Illinois Power Agency, and the company may agree. The utility | 15 | | and its customers shall have no obligation to reimburse the | 16 | | company, the Illinois Finance Authority, or the Illinois Power | 17 | | Agency for any such costs. | 18 | | (i) If a gas utility or an affiliate of a gas utility has | 19 | | an ownership interest in any entity that produces or sells | 20 | | synthetic 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; | 22 | | 09600SB3388ham001, ham002, and ham003.)"; and | 23 | | by replacing Section 99 with the following:
| 24 | | "Section 99. Effective date. This Act takes effect June 1, |
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| 1 | | 2011.".
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