Public Act 095-1027
 
SB1987 Enrolled LRB095 14199 MJR 40067 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
ARTICLE 1

 
    Section 1-1. Short title. This Article may be cited as the
Clean Coal Portfolio Standard Law.
 
    Section 1-5. The Illinois Power Agency Act is amended by
changing Sections 1-5, 1-10, 1-75, and 1-80 as follows:
 
    (20 ILCS 3855/1-5)
    Sec. 1-5. Legislative declarations and findings. The
General Assembly finds and declares:
        (1) The health, welfare, and prosperity of all Illinois
    citizens require the provision of adequate, reliable,
    affordable, efficient, and environmentally sustainable
    electric service at the lowest total cost over time, taking
    into account any benefits of price stability.
        (2) The transition to retail competition is not
    complete. Some customers, especially residential and small
    commercial customers, have failed to benefit from lower
    electricity costs from retail and wholesale competition.
        (3) Escalating prices for electricity in Illinois pose
    a serious threat to the economic well-being, health, and
    safety of the residents of and the commerce and industry of
    the State.
        (4) To protect against this threat to economic
    well-being, health, and safety it is necessary to improve
    the process of procuring electricity to serve Illinois
    residents, to promote investment in energy efficiency and
    demand-response measures, and to support development of
    clean coal technologies and renewable resources.
        (5) Procuring a diverse electricity supply portfolio
    will ensure the lowest total cost over time for adequate,
    reliable, efficient, and environmentally sustainable
    electric service.
        (6) Including cost-effective renewable resources in
    that portfolio will reduce long-term direct and indirect
    costs to consumers by decreasing environmental impacts and
    by avoiding or delaying the need for new generation,
    transmission, and distribution infrastructure.
        (7) Energy efficiency, demand-response measures, and
    renewable energy are resources currently underused in
    Illinois.
        (8) The State should encourage the use of advanced
    clean coal technologies that capture and sequester carbon
    dioxide emissions to advance environmental protection
    goals and to demonstrate the viability of coal and
    coal-derived fuels in a carbon-constrained economy.
    The General Assembly therefore finds that it is necessary
to create the Illinois Power Agency and that the goals and
objectives of that Agency are to accomplish each of the
following:
        (A) Develop electricity procurement plans to ensure
    adequate, reliable, affordable, efficient, and
    environmentally sustainable electric service at the lowest
    total cost over time, taking into account any benefits of
    price stability, for electric utilities that on December
    31, 2005 provided electric service to at least 100,000
    customers in Illinois. The procurement plan shall be
    updated on an annual basis and shall include renewable
    energy resources sufficient to achieve the standards
    specified in this Act.
        (B) Conduct competitive procurement processes to
    procure the supply resources identified in the procurement
    plan.
        (C) Develop electric generation and co-generation
    facilities that use indigenous coal or renewable
    resources, or both, financed with bonds issued by the
    Illinois Finance Authority.
        (D) Supply electricity from the Agency's facilities at
    cost to one or more of the following: municipal electric
    systems, governmental aggregators, or rural electric
    cooperatives in Illinois.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    (20 ILCS 3855/1-10)
    Sec. 1-10. Definitions.
    "Agency" means the Illinois Power Agency.
    "Agency loan agreement" means any agreement pursuant to
which the Illinois Finance Authority agrees to loan the
proceeds of revenue bonds issued with respect to a project to
the Agency upon terms providing for loan repayment installments
at least sufficient to pay when due all principal of, interest
and premium, if any, on those revenue bonds, and providing for
maintenance, insurance, and other matters in respect of the
project.
    "Authority" means the Illinois Finance Authority.
    "Clean coal facility" means an electric generating
facility that uses primarily coal as a feedstock and that
captures and sequesters carbon emissions at the following
levels: at least 50% of the total carbon emissions that the
facility would otherwise emit if, at the time construction
commences, the facility is scheduled to commence operation
before 2016, at least 70% of the total carbon emissions that
the facility would otherwise emit if, at the time construction
commences, the facility is scheduled to commence operation
during 2016 or 2017, and at least 90% of the total carbon
emissions that the facility would otherwise emit if, at the
time construction commences, the facility is scheduled to
commence operation after 2017. The power block of the clean
coal facility shall not exceed allowable emission rates for
sulfur dioxide, nitrogen oxides, carbon monoxide, particulates
and mercury for a natural gas-fired combined-cycle facility the
same size as and in the same location as the clean coal
facility at the time the clean coal facility obtains an
approved air permit. All coal used by a clean coal facility
shall have high volatile bituminous rank and greater than 1.7
pounds of sulfur per million btu content, unless the clean coal
facility does not use gasification technology and was operating
as a conventional coal-fired electric generating facility on
the effective date of this amendatory Act of the 95th General
Assembly.
    "Clean coal SNG facility" means a facility that uses a
gasification process to produce substitute natural gas, that
sequesters at least 90% of the total carbon emissions that the
facility would otherwise emit and that uses coal as a
feedstock, with all such coal having a high bituminous rank and
greater than 1.7 pounds of sulfur per million btu content.
    "Commission" means the Illinois Commerce Commission.
    "Costs incurred in connection with the development and
construction of a facility" means:
        (1) the cost of acquisition of all real property and
    improvements in connection therewith and equipment and
    other property, rights, and easements acquired that are
    deemed necessary for the operation and maintenance of the
    facility;
        (2) financing costs with respect to bonds, notes, and
    other evidences of indebtedness of the Agency;
        (3) all origination, commitment, utilization,
    facility, placement, underwriting, syndication, credit
    enhancement, and rating agency fees;
        (4) engineering, design, procurement, consulting,
    legal, accounting, title insurance, survey, appraisal,
    escrow, trustee, collateral agency, interest rate hedging,
    interest rate swap, capitalized interest and other
    financing costs, and other expenses for professional
    services; and
        (5) the costs of plans, specifications, site study and
    investigation, installation, surveys, other Agency costs
    and estimates of costs, and other expenses necessary or
    incidental to determining the feasibility of any project,
    together with such other expenses as may be necessary or
    incidental to the financing, insuring, acquisition, and
    construction of a specific project and placing that project
    in operation.
    "Department" means the Department of Commerce and Economic
Opportunity.
    "Director" means the Director of the Illinois Power Agency.
    "Demand-response" means measures that decrease peak
electricity demand or shift demand from peak to off-peak
periods.
    "Energy efficiency" means measures that reduce the amount
of electricity required to achieve a given end use.
    "Electric utility" has the same definition as found in
Section 16-102 of the Public Utilities Act.
    "Facility" means an electric generating unit or a
co-generating unit that produces electricity along with
related equipment necessary to connect the facility to an
electric transmission or distribution system.
    "Governmental aggregator" means one or more units of local
government that individually or collectively procure
electricity to serve residential retail electrical loads
located within its or their jurisdiction.
    "Local government" means a unit of local government as
defined in Article VII of Section 1 of the Illinois
Constitution.
    "Municipality" means a city, village, or incorporated
town.
    "Person" means any natural person, firm, partnership,
corporation, either domestic or foreign, company, association,
limited liability company, joint stock company, or association
and includes any trustee, receiver, assignee, or personal
representative thereof.
    "Project" means the planning, bidding, and construction of
a facility.
    "Public utility" has the same definition as found in
Section 3-105 of the Public Utilities Act.
    "Real property" means any interest in land together with
all structures, fixtures, and improvements thereon, including
lands under water and riparian rights, any easements,
covenants, licenses, leases, rights-of-way, uses, and other
interests, together with any liens, judgments, mortgages, or
other claims or security interests related to real property.
    "Renewable energy credit" means a tradable credit that
represents the environmental attributes of a certain amount of
energy produced from a renewable energy resource.
    "Renewable energy resources" includes energy and its
associated renewable energy credit or renewable energy credits
from wind, solar thermal energy, photovoltaic cells and panels,
biodiesel, crops and untreated and unadulterated organic waste
biomass, trees and tree trimmings, hydropower that does not
involve new construction or significant expansion of
hydropower dams, and other alternative sources of
environmentally preferable energy. For purposes of this Act,
landfill gas produced in the State is considered a renewable
energy resource. "Renewable energy resources" does not include
the incineration, burning, or heating of tires, garbage,
general household, institutional, and commercial waste,
industrial lunchroom or office waste, landscape waste other
than trees and tree trimmings, railroad crossties, utility
poles, and construction or demolition debris, other than
untreated and unadulterated waste wood.
    "Revenue bond" means any bond, note, or other evidence of
indebtedness issued by the Authority, the principal and
interest of which is payable solely from revenues or income
derived from any project or activity of the Agency.
    "Sequester" means permanent storage of carbon dioxide by
injecting it into a saline aquifer, a depleted gas reservoir,
or an oil reservoir, directly or through an enhanced oil
recovery process that may involve intermediate storage in a
salt dome.
    "Servicing agreement" means (i) in the case of an electric
utility, an agreement between the owner of a clean coal
facility and such electric utility, which agreement shall have
terms and conditions meeting the requirements of paragraph (3)
of subsection (d) of Section 1-75, and (ii) in the case of an
alternative retail electric supplier, an agreement between the
owner of a clean coal facility and such alternative retail
electric supplier, which agreement shall have terms and
conditions meeting the requirements of Section 16-115(d)(5) of
the Public Utilities Act.
    "Substitute natural gas" or "SNG" means a gas manufactured
by gasification of hydrocarbon feedstock, which is
substantially interchangeable in use and distribution with
conventional natural gas.
    "Total resource cost test" or "TRC test" means a standard
that is met if, for an investment in energy efficiency or
demand-response measures, the benefit-cost ratio is greater
than one. The benefit-cost ratio is the ratio of the net
present value of the total benefits of the program to the net
present value of the total costs as calculated over the
lifetime of the measures. A total resource cost test compares
the sum of avoided electric utility costs, representing the
benefits that accrue to the system and the participant in the
delivery of those efficiency measures, to the sum of all
incremental costs of end-use measures that are implemented due
to the program (including both utility and participant
contributions), plus costs to administer, deliver, and
evaluate each demand-side program, to quantify the net savings
obtained by substituting the demand-side program for supply
resources. In calculating avoided costs of power and energy
that an electric utility would otherwise have had to acquire,
reasonable estimates shall be included of financial costs
likely to be imposed by future regulations and legislation on
emissions of greenhouse gases.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    (20 ILCS 3855/1-75)
    Sec. 1-75. Planning and Procurement Bureau. The Planning
and Procurement Bureau has the following duties and
responsibilities:
        (a) The Planning and Procurement Bureau shall each
    year, beginning in 2008, develop procurement plans and
    conduct competitive procurement processes in accordance
    with the requirements of Section 16-111.5 of the Public
    Utilities Act for the eligible retail customers of electric
    utilities that on December 31, 2005 provided electric
    service to at least 100,000 customers in Illinois. For the
    purposes of this Section, the term "eligible retail
    customers" has the same definition as found in Section
    16-111.5(a) of the Public Utilities Act.
            (1) The Agency shall each year, beginning in 2008,
        as needed, issue a request for qualifications for
        experts or expert consulting firms to develop the
        procurement plans in accordance with Section 16-111.5
        of the Public Utilities Act. In order to qualify an
        expert or expert consulting firm must have:
                (A) direct previous experience assembling
            large-scale power supply plans or portfolios for
            end-use customers;
                (B) an advanced degree in economics,
            mathematics, engineering, risk management, or a
            related area of study;
                (C) 10 years of experience in the electricity
            sector, including managing supply risk;
                (D) expertise in wholesale electricity market
            rules, including those established by the Federal
            Energy Regulatory Commission and regional
            transmission organizations;
                (E) expertise in credit protocols and
            familiarity with contract protocols;
                (F) adequate resources to perform and fulfill
            the required functions and responsibilities; and
                (G) the absence of a conflict of interest and
            inappropriate bias for or against potential
            bidders or the affected electric utilities.
            (2) The Agency shall each year, as needed, issue a
        request for qualifications for a procurement
        administrator to conduct the competitive procurement
        processes in accordance with Section 16-111.5 of the
        Public Utilities Act. In order to qualify an expert or
        expert consulting firm must have:
                (A) direct previous experience administering a
            large-scale competitive procurement process;
                (B) an advanced degree in economics,
            mathematics, engineering, or a related area of
            study;
                (C) 10 years of experience in the electricity
            sector, including risk management experience;
                (D) expertise in wholesale electricity market
            rules, including those established by the Federal
            Energy Regulatory Commission and regional
            transmission organizations;
                (E) expertise in credit and contract
            protocols;
                (F) adequate resources to perform and fulfill
            the required functions and responsibilities; and
                (G) the absence of a conflict of interest and
            inappropriate bias for or against potential
            bidders or the affected electric utilities.
            (3) The Agency shall provide affected utilities
        and other interested parties with the lists of
        qualified experts or expert consulting firms
        identified through the request for qualifications
        processes that are under consideration to develop the
        procurement plans and to serve as the procurement
        administrator. The Agency shall also provide each
        qualified expert's or expert consulting firm's
        response to the request for qualifications. All
        information provided under this subparagraph shall
        also be provided to the Commission. The Agency may
        provide by rule for fees associated with supplying the
        information to utilities and other interested parties.
        These parties shall, within 5 business days, notify the
        Agency in writing if they object to any experts or
        expert consulting firms on the lists. Objections shall
        be based on:
                (A) failure to satisfy qualification criteria;
                (B) identification of a conflict of interest;
            or
                (C) evidence of inappropriate bias for or
            against potential bidders or the affected
            utilities.
            The Agency shall remove experts or expert
        consulting firms from the lists within 10 days if there
        is a reasonable basis for an objection and provide the
        updated lists to the affected utilities and other
        interested parties. If the Agency fails to remove an
        expert or expert consulting firm from a list, an
        objecting party may seek review by the Commission
        within 5 days thereafter by filing a petition, and the
        Commission shall render a ruling on the petition within
        10 days. There is no right of appeal of the
        Commission's ruling.
            (4) The Agency shall issue requests for proposals
        to the qualified experts or expert consulting firms to
        develop a procurement plan for the affected utilities
        and to serve as procurement administrator.
            (5) The Agency shall select an expert or expert
        consulting firm to develop procurement plans based on
        the proposals submitted and shall award one-year
        contracts to those selected with an option for the
        Agency for a one-year renewal.
            (6) The Agency shall select an expert or expert
        consulting firm, with approval of the Commission, to
        serve as procurement administrator based on the
        proposals submitted. If the Commission rejects, within
        5 days, the Agency's selection, the Agency shall submit
        another recommendation within 3 days based on the
        proposals submitted. The Agency shall award a one-year
        contract to the expert or expert consulting firm so
        selected with Commission approval with an option for
        the Agency for a one-year renewal.
        (b) The experts or expert consulting firms retained by
    the Agency shall, as appropriate, prepare procurement
    plans, and conduct a competitive procurement process as
    prescribed in Section 16-111.5 of the Public Utilities Act,
    to ensure adequate, reliable, affordable, efficient, and
    environmentally sustainable electric service at the lowest
    total cost over time, taking into account any benefits of
    price stability, for eligible retail customers of electric
    utilities that on December 31, 2005 provided electric
    service to at least 100,000 customers in the State of
    Illinois.
        (c) Renewable portfolio standard.
            (1) The procurement plans shall include
        cost-effective renewable energy resources. A minimum
        percentage of each utility's total supply to serve the
        load of eligible retail customers, as defined in
        Section 16-111.5(a) of the Public Utilities Act,
        procured for each of the following years shall be
        generated from cost-effective renewable energy
        resources: at least 2% by June 1, 2008; at least 4% by
        June 1, 2009; at least 5% by June 1, 2010; at least 6%
        by June 1, 2011; at least 7% by June 1, 2012; at least
        8% by June 1, 2013; at least 9% by June 1, 2014; at
        least 10% by June 1, 2015; and increasing by at least
        1.5% each year thereafter to at least 25% by June 1,
        2025. To the extent that it is available, at least 75%
        of the renewable energy resources used to meet these
        standards shall come from wind generation. For
        purposes of this subsection (c) Section,
        "cost-effective" means that the costs of procuring
        renewable energy resources do not cause the limit
        stated in paragraph (2) of this subsection (c) to be
        exceeded and do not exceed benchmarks based on market
        prices for renewable energy resources in the region,
        which shall be developed by the procurement
        administrator, in consultation with the Commission
        staff, Agency staff, and the procurement monitor and
        shall be subject to Commission review and approval.
            (2) For purposes of this subsection (c), the
        required procurement of cost-effective renewable
        energy resources for a particular year shall be
        measured as a percentage of the actual amount of
        electricity (megawatt-hours) supplied by the electric
        utility to eligible retail customers in the planning
        year ending immediately prior to the procurement. For
        purposes of this subsection (c), the amount paid per
        kilowatthour means the total amount paid for electric
        service expressed on a per kilowatthour basis. For
        purposes of this subsection (c), the total amount paid
        for electric service includes without limitation
        amounts paid for supply, transmission, distribution,
        surcharges, and add-on taxes.
            Notwithstanding the requirements of this
        subsection (c), the total of renewable energy
        resources procured pursuant to the procurement plan
        for any single year shall be reduced by an amount
        necessary to limit the annual estimated average net
        increase due to the costs of these resources included
        in the amounts paid by eligible retail customers in
        connection with electric service to:
                (A) in 2008, no more than 0.5% of the amount
            paid per kilowatthour by those customers during
            the year ending May 31, 2007;
                (B) in 2009, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2008 or 1%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2007;
                (C) in 2010, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009 or
            1.5% of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2007;
                (D) in 2011, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2010 or 2%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2007; and
                (E) thereafter, the amount of renewable energy
            resources procured pursuant to the procurement
            plan for any single year shall be reduced by an
            amount necessary to limit the estimated average
            net increase due to the cost of these resources
            included in the amounts paid by eligible retail
            customers in connection with electric service to
            no more than the greater of 2.015% of the amount
            paid per kilowatthour by those customers during
            the year ending May 31, 2007 or the incremental
            amount per kilowatthour paid for these resources
            in 2011.
            No later than June 30, 2011, the Commission shall
        review the limitation on the amount of renewable energy
        resources procured pursuant to this subsection (c) and
        report to the General Assembly its findings as to
        whether that limitation unduly constrains the
        procurement of cost-effective renewable energy
        resources.
            (3) Through June 1, 2011, renewable energy
        resources shall be counted for the purpose of meeting
        the renewable energy standards set forth in paragraph
        (1) of this subsection (c) only if they are generated
        from facilities located in the State, provided that
        cost-effective renewable energy resources are
        available from those facilities. If those
        cost-effective resources are not available in
        Illinois, they shall be procured in states that adjoin
        Illinois and may be counted towards compliance. If
        those cost-effective resources are not available in
        Illinois or in states that adjoin Illinois, they shall
        be purchased elsewhere and shall be counted towards
        compliance. After June 1, 2011, cost-effective
        renewable energy resources located in Illinois and in
        states that adjoin Illinois may be counted towards
        compliance with the standards set forth in paragraph
        (1) of this subsection (c). If those cost-effective
        resources are not available in Illinois or in states
        that adjoin Illinois, they shall be purchased
        elsewhere and shall be counted towards compliance.
            (4) The electric utility shall retire all
        renewable energy credits used to comply with the
        standard.
    (d) Clean coal portfolio standard.
        (1) The procurement plans shall include electricity
    generated using clean coal. Each utility shall enter into
    one or more sourcing agreements with the initial clean coal
    facility, as provided in paragraph (3) of this subsection
    (d), covering electricity generated by the initial clean
    coal facility representing at least 5% of each utility's
    total supply to serve the load of eligible retail customers
    in 2015 and each year thereafter, as described in paragraph
    (3) of this subsection (d), subject to the limits specified
    in paragraph (2) of this subsection (d). It is the goal of
    the State that by January 1, 2025, 25% of the electricity
    used in the State shall be generated by cost-effective
    clean coal facilities. For purposes of this subsection (d),
    "cost-effective" means that the expenditures pursuant to
    such sourcing agreements do not cause the limit stated in
    paragraph (2) of this subsection (d) to be exceeded and do
    not exceed cost-based benchmarks, which shall be developed
    to assess all expenditures pursuant to such sourcing
    agreements covering electricity generated by clean coal
    facilities, other than the initial clean coal facility, by
    the procurement administrator, in consultation with the
    Commission staff, Agency staff, and the procurement
    monitor and shall be subject to Commission review and
    approval.
            (A) A utility party to a sourcing agreement shall
        immediately retire any emission credits that it
        receives in connection with the electricity covered by
        such agreement.
            (B) Utilities shall maintain adequate records
        documenting the purchases under the sourcing agreement
        to comply with this subsection (d) and shall file an
        accounting with the load forecast that must be filed
        with the Agency by July 15 of each year, in accordance
        with subsection (d) of Section 16-111.5 of the Public
        Utilities Act.
            (C) A utility shall be deemed to have complied with
        the clean coal portfolio standard specified in this
        subsection (d) if the utility enters into a sourcing
        agreement as required by this subsection (d).
        (2) For purposes of this subsection (d), the required
    execution of sourcing agreements with the initial clean
    coal facility for a particular year shall be measured as a
    percentage of the actual amount of electricity
    (megawatt-hours) supplied by the electric utility to
    eligible retail customers in the planning year ending
    immediately prior to the agreement's execution. For
    purposes of this subsection (d), the amount paid per
    kilowatthour means the total amount paid for electric
    service expressed on a per kilowatthour basis. For purposes
    of this subsection (d), the total amount paid for electric
    service includes without limitation amounts paid for
    supply, transmission, distribution, surcharges and add-on
    taxes.
        Notwithstanding the requirements of this subsection
    (d), the total amount paid under sourcing agreements with
    clean coal facilities pursuant to the procurement plan for
    any given year shall be reduced by an amount necessary to
    limit the annual estimated average net increase due to the
    costs of these resources included in the amounts paid by
    eligible retail customers in connection with electric
    service to:
                (A) in 2010, no more than 0.5% of the amount
            paid per kilowatthour by those customers during
            the year ending May 31, 2009;
                (B) in 2011, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2010 or 1%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009;
                (C) in 2012, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2011 or
            1.5% of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009;
                (D) in 2013, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2012 or 2%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009; and
                (E) thereafter, the total amount paid under
            sourcing agreements with clean coal facilities
            pursuant to the procurement plan for any single
            year shall be reduced by an amount necessary to
            limit the estimated average net increase due to the
            cost of these resources included in the amounts
            paid by eligible retail customers in connection
            with electric service to no more than the greater
            of (i) 2.015% of the amount paid per kilowatthour
            by those customers during the year ending May 31,
            2009 or (ii) the incremental amount per
            kilowatthour paid for these resources in 2013.
            These requirements may be altered only as provided
            by statute. No later than June 30, 2015, the
            Commission shall review the limitation on the
            total amount paid under sourcing agreements, if
            any, with clean coal facilities pursuant to this
            subsection (d) and report to the General Assembly
            its findings as to whether that limitation unduly
            constrains the amount of electricity generated by
            cost-effective clean coal facilities that is
            covered by sourcing agreements.
        (3) Initial clean coal facility. In order to promote
    development of clean coal facilities in Illinois, each
    electric utility subject to this Section shall execute a
    sourcing agreement to source electricity from a proposed
    clean coal facility in Illinois (the "initial clean coal
    facility") that will have a nameplate capacity of at least
    500 MW when commercial operation commences, that has a
    final Clean Air Act permit on the effective date of this
    amendatory Act of the 95th General Assembly, and that will
    meet the definition of clean coal facility in Section 1-10
    of this Act when commercial operation commences. The
    sourcing agreements with this initial clean coal facility
    shall be subject to both approval of the initial clean coal
    facility by the General Assembly and satisfaction of the
    requirements of paragraph (4) of this subsection (d) and
    shall be executed within 90 days after any such approval by
    the General Assembly. The Agency and the Commission shall
    have authority to inspect all books and records associated
    with the initial clean coal facility during the term of
    such a sourcing agreement. A utility's sourcing agreement
    for electricity produced by the initial clean coal facility
    shall include:
            (A) a formula contractual price (the "contract
        price") approved pursuant to paragraph (4) of this
        subsection (d), which shall:
                (i) be determined using a cost of service
            methodology employing either a level or deferred
            capital recovery component, based on a capital
            structure consisting of 45% equity and 55% debt,
            and a return on equity as may be approved by the
            Federal Energy Regulatory Commission, which in any
            case may not exceed the lower of 11.5% or the rate
            of return approved by the General Assembly
            pursuant to paragraph (4) of this subsection (d);
            and
                (ii) provide that all miscellaneous net
            revenue, including but not limited to net revenue
            from the sale of emission allowances, if any,
            substitute natural gas, if any, grants or other
            support provided by the State of Illinois or the
            United States Government, firm transmission
            rights, if any, by-products produced by the
            facility, energy or capacity derived from the
            facility and not covered by a sourcing agreement
            pursuant to paragraph (3) of this subsection (d) or
            item (5) of subsection (d) of Section 16-115 of the
            Public Utilities Act, whether generated from the
            synthesis gas derived from coal, from SNG, or from
            natural gas, shall be credited against the revenue
            requirement for this initial clean coal facility;
            (B) power purchase provisions, which shall:
                (i) provide that the utility party to such
            sourcing agreement shall pay the contract price
            for electricity delivered under such sourcing
            agreement;
                (ii) require delivery of electricity to the
            regional transmission organization market of the
            utility that is party to such sourcing agreement;
                (iii) require the utility party to such
            sourcing agreement to buy from the initial clean
            coal facility in each hour an amount of energy
            equal to all clean coal energy made available from
            the initial clean coal facility during such hour
            times a fraction, the numerator of which is such
            utility's retail market sales of electricity
            (expressed in kilowatthours sold) in the State
            during the prior calendar month and the
            denominator of which is the total retail market
            sales of electricity (expressed in kilowatthours
            sold) in the State by utilities during such prior
            month and the sales of electricity (expressed in
            kilowatthours sold) in the State by alternative
            retail electric suppliers during such prior month
            that are subject to the requirements of this
            subsection (d) and paragraph (5) of subsection (d)
            of Section 16-115 of the Public Utilities Act,
            provided that the amount purchased by the utility
            in any year will be limited by paragraph (2) of
            this subsection (d); and
                (iv) be considered pre-existing contracts in
            such utility's procurement plans for eligible
            retail customers;
            (C) contract for differences provisions, which
        shall:
                (i) require the utility party to such sourcing
            agreement to contract with the initial clean coal
            facility in each hour with respect to an amount of
            energy equal to all clean coal energy made
            available from the initial clean coal facility
            during such hour times a fraction, the numerator of
            which is such utility's retail market sales of
            electricity (expressed in kilowatthours sold) in
            the utility's service territory in the State
            during the prior calendar month and the
            denominator of which is the total retail market
            sales of electricity (expressed in kilowatthours
            sold) in the State by utilities during such prior
            month and the sales of electricity (expressed in
            kilowatthours sold) in the State by alternative
            retail electric suppliers during such prior month
            that are subject to the requirements of this
            subsection (d) and paragraph (5) of subsection (d)
            of Section 16-115 of the Public Utilities Act,
            provided that the amount paid by the utility in any
            year will be limited by paragraph (2) of this
            subsection (d);
                (ii) provide that the utility's payment
            obligation in respect of the quantity of
            electricity determined pursuant to the preceding
            clause (i) shall be limited to an amount equal to
            (1) the difference between the contract price
            determined pursuant to subparagraph (A) of
            paragraph (3) of this subsection (d) and the
            day-ahead price for electricity delivered to the
            regional transmission organization market of the
            utility that is party to such sourcing agreement
            (or any successor delivery point at which such
            utility's supply obligations are financially
            settled on an hourly basis) (the "reference
            price") on the day preceding the day on which the
            electricity is delivered to the initial clean coal
            facility busbar, multiplied by (2) the quantity of
            electricity determined pursuant to the preceding
            clause (i); and
                (iii) not require the utility to take physical
            delivery of the electricity produced by the
            facility;
            (D) general provisions, which shall:
                (i) specify a term of no more than 30 years,
            commencing on the commercial operation date of the
            facility;
                (ii) provide that utilities shall maintain
            adequate records documenting purchases under the
            sourcing agreements entered into to comply with
            this subsection (d) and shall file an accounting
            with the load forecast that must be filed with the
            Agency by July 15 of each year, in accordance with
            subsection (d) of Section 16-111.5 of the Public
            Utilities Act.
                (iii) provide that all costs associated with
            the initial clean coal facility will be
            periodically reported to the Federal Energy
            Regulatory Commission and to purchasers in
            accordance with applicable laws governing
            cost-based wholesale power contracts;
                (iv) permit the Illinois Power Agency to
            assume ownership of the initial clean coal
            facility, without monetary consideration and
            otherwise on reasonable terms acceptable to the
            Agency, if the Agency so requests no less than 3
            years prior to the end of the stated contract term;
                (v) require the owner of the initial clean coal
            facility to provide documentation to the
            Commission each year, starting in the facility's
            first year of commercial operation, accurately
            reporting the quantity of carbon emissions from
            the facility that have been captured and
            sequestered and report any quantities of carbon
            released from the site or sites at which carbon
            emissions were sequestered in prior years, based
            on continuous monitoring of such sites. If, in any
            year after the first year of commercial operation,
            the owner of the facility fails to demonstrate that
            the initial clean coal facility captured and
            sequestered at least 50% of the total carbon
            emissions that the facility would otherwise emit
            or that sequestration of emissions from prior
            years has failed, resulting in the release of
            carbon dioxide into the atmosphere, the owner of
            the facility must offset excess emissions. Any
            such carbon offsets must be permanent, additional,
            verifiable, real, located within the State of
            Illinois, and legally and practicably enforceable.
            The cost of such offsets for the facility that are
            not recoverable shall not exceed $15 million in any
            given year. No costs of any such purchases of
            carbon offsets may be recovered from a utility or
            its customers. All carbon offsets purchased for
            this purpose and any carbon emission credits
            associated with sequestration of carbon from the
            facility must be permanently retired. The initial
            clean coal facility shall not forfeit its
            designation as a clean coal facility if the
            facility fails to fully comply with the applicable
            carbon sequestration requirements in any given
            year, provided the requisite offsets are
            purchased. However, the Attorney General, on
            behalf of the People of the State of Illinois, may
            specifically enforce the facility's sequestration
            requirement and the other terms of this contract
            provision. Compliance with the sequestration
            requirements and offset purchase requirements
            specified in paragraph (3) of this subsection (d)
            shall be reviewed annually by an independent
            expert retained by the owner of the initial clean
            coal facility, with the advance written approval
            of the Attorney General. The Commission may, in the
            course of the review specified in item (vii),
            reduce the allowable return on equity for the
            facility if the facility wilfully fails to comply
            with the carbon capture and sequestration
            requirements set forth in this item (v);
                (vi) include limits on, and accordingly
            provide for modification of, the amount the
            utility is required to source under the sourcing
            agreement consistent with paragraph (2) of this
            subsection (d);
                (vii) require Commission review: (1) to
            determine the justness, reasonableness, and
            prudence of the inputs to the formula referenced in
            subparagraphs (A)(i) through (A)(iii) of paragraph
            (3) of this subsection (d), prior to an adjustment
            in those inputs including, without limitation, the
            capital structure and return on equity, fuel
            costs, and other operations and maintenance costs
            and (2) to approve the costs to be passed through
            to customers under the sourcing agreement by which
            the utility satisfies its statutory obligations.
            Commission review shall occur no less than every 3
            years, regardless of whether any adjustments have
            been proposed, and shall be completed within 9
            months;
                (viii) limit the utility's obligation to such
            amount as the utility is allowed to recover through
            tariffs filed with the Commission, provided that
            neither the clean coal facility nor the utility
            waives any right to assert federal pre-emption or
            any other argument in response to a purported
            disallowance of recovery costs;
                (ix) limit the utility's or alternative retail
            electric supplier's obligation to incur any
            liability until such time as the facility is in
            commercial operation and generating power and
            energy and such power and energy is being delivered
            to the facility busbar;
                (x) provide that the owner or owners of the
            initial clean coal facility, which is the
            counterparty to such sourcing agreement, shall
            have the right from time to time to elect whether
            the obligations of the utility party thereto shall
            be governed by the power purchase provisions or the
            contract for differences provisions;
                (xi) append documentation showing that the
            formula rate and contract, insofar as they relate
            to the power purchase provisions, have been
            approved by the Federal Energy Regulatory
            Commission pursuant to Section 205 of the Federal
            Power Act;
                (xii) provide that any changes to the terms of
            the contract, insofar as such changes relate to the
            power purchase provisions, are subject to review
            under the public interest standard applied by the
            Federal Energy Regulatory Commission pursuant to
            Sections 205 and 206 of the Federal Power Act; and
                (xiii) conform with customary lender
            requirements in power purchase agreements used as
            the basis for financing non-utility generators.
        (4) Effective date of sourcing agreements with the
    initial clean coal facility. Any proposed sourcing
    agreement with the initial clean coal facility shall not
    become effective unless the following reports are prepared
    and submitted and authorizations and approvals obtained:
                (i) Facility cost report. The owner of the
            initial clean coal facility shall submit to the
            Commission, the Agency, and the General Assembly a
            front-end engineering and design study, a facility
            cost report, method of financing (including but
            not limited to structure and associated costs),
            and an operating and maintenance cost quote for the
            facility (collectively "facility cost report"),
            which shall be prepared in accordance with the
            requirements of this paragraph (4) of subsection
            (d) of this Section, and shall provide the
            Commission and the Agency access to the work
            papers, relied upon documents, and any other
            backup documentation related to the facility cost
            report.
                (ii) Commission report. Within 6 months
            following receipt of the facility cost report, the
            Commission, in consultation with the Agency, shall
            submit a report to the General Assembly setting
            forth its analysis of the facility cost report.
            Such report shall include, but not be limited to, a
            comparison of the costs associated with
            electricity generated by the initial clean coal
            facility to the costs associated with electricity
            generated by other types of generation facilities,
            an analysis of the rate impacts on residential and
            small business customers over the life of the
            sourcing agreements, and an analysis of the
            likelihood that the initial clean coal facility
            will commence commercial operation by and be
            delivering power to the facility's busbar by 2016.
            To assist in the preparation of its report, the
            Commission, in consultation with the Agency, may
            hire one or more experts or consultants, the costs
            of which shall be paid for by the owner of the
            initial clean coal facility. The Commission and
            Agency may begin the process of selecting such
            experts or consultants prior to receipt of the
            facility cost report.
                (iii) General Assembly approval. The proposed
            sourcing agreements shall not take effect unless,
            based on the facility cost report and the
            Commission's report, the General Assembly enacts
            authorizing legislation approving (A) the
            projected price, stated in cents per kilowatthour,
            to be charged for electricity generated by the
            initial clean coal facility, (B) the projected
            impact on residential and small business
            customers' bills over the life of the sourcing
            agreements, and (C) the maximum allowable return
            on equity for the project; and
                (iv) Commission review. If the General
            Assembly enacts authorizing legislation pursuant
            to subparagraph (iii) approving a sourcing
            agreement, the Commission shall, within 90 days of
            such enactment, complete a review of such sourcing
            agreement. During such time period, the Commission
            shall implement any directive of the General
            Assembly, resolve any disputes between the parties
            to the sourcing agreement concerning the terms of
            such agreement, approve the form of such
            agreement, and issue an order finding that the
            sourcing agreement is prudent and reasonable.
    The facility cost report shall be prepared as follows:
            (A) The facility cost report shall be prepared by
        duly licensed engineering and construction firms
        detailing the estimated capital costs payable to one or
        more contractors or suppliers for the engineering,
        procurement and construction of the components
        comprising the initial clean coal facility and the
        estimated costs of operation and maintenance of the
        facility. The facility cost report shall include:
                (i) an estimate of the capital cost of the core
            plant based on one or more front end engineering
            and design studies for the gasification island and
            related facilities. The core plant shall include
            all civil, structural, mechanical, electrical,
            control, and safety systems.
                (ii) an estimate of the capital cost of the
            balance of the plant, including any capital costs
            associated with sequestration of carbon dioxide
            emissions and all interconnects and interfaces
            required to operate the facility, such as
            transmission of electricity, construction or
            backfeed power supply, pipelines to transport
            substitute natural gas or carbon dioxide, potable
            water supply, natural gas supply, water supply,
            water discharge, landfill, access roads, and coal
            delivery.
            The quoted construction costs shall be expressed
        in nominal dollars as of the date that the quote is
        prepared and shall include (1) capitalized financing
        costs during construction, (2) taxes, insurance, and
        other owner's costs, and (3) an assumed escalation in
        materials and labor beyond the date as of which the
        construction cost quote is expressed.
            (B) The front end engineering and design study for
        the gasification island and the cost study for the
        balance of plant shall include sufficient design work
        to permit quantification of major categories of
        materials, commodities and labor hours, and receipt of
        quotes from vendors of major equipment required to
        construct and operate the clean coal facility.
            (C) The facility cost report shall also include an
        operating and maintenance cost quote that will provide
        the estimated cost of delivered fuel, personnel,
        maintenance contracts, chemicals, catalysts,
        consumables, spares, and other fixed and variable
        operations and maintenance costs.
                (a) The delivered fuel cost estimate will be
            provided by a recognized third party expert or
            experts in the fuel and transportation industries.
                (b) The balance of the operating and
            maintenance cost quote, excluding delivered fuel
            costs will be developed based on the inputs
            provided by duly licensed engineering and
            construction firms performing the construction
            cost quote, potential vendors under long-term
            service agreements and plant operating agreements,
            or recognized third party plant operator or
            operators.
                The operating and maintenance cost quote
            (including the cost of the front end engineering
            and design study) shall be expressed in nominal
            dollars as of the date that the quote is prepared
            and shall include (1) taxes, insurance, and other
            owner's costs, and (2) an assumed escalation in
            materials and labor beyond the date as of which the
            operating and maintenance cost quote is expressed.
            (D) The facility cost report shall also include (i)
        an analysis of the initial clean coal facility's
        ability to deliver power and energy into the applicable
        regional transmission organization markets and (ii) an
        analysis of the expected capacity factor for the
        initial clean coal facility.
            (E) Amounts paid to third parties unrelated to the
        owner or owners of the initial clean coal facility to
        prepare the core plant construction cost quote,
        including the front end engineering and design study,
        and the operating and maintenance cost quote will be
        reimbursed through Coal Development Bonds.
        (5) Re-powering and retrofitting coal-fired power
    plants previously owned by Illinois utilities to qualify as
    clean coal facilities. During the 2009 procurement
    planning process and thereafter, the Agency and the
    Commission shall consider sourcing agreements covering
    electricity generated by power plants that were previously
    owned by Illinois utilities and that have been or will be
    converted into clean coal facilities, as defined by Section
    1-10 of this Act. Pursuant to such procurement planning
    process, the owners of such facilities may propose to the
    Agency sourcing agreements with utilities and alternative
    retail electric suppliers required to comply with
    subsection (d) of this Section and item (5) of subsection
    (d) of Section 16-115 of the Public Utilities Act, covering
    electricity generated by such facilities. In the case of
    sourcing agreements that are power purchase agreements,
    the contract price for electricity sales shall be
    established on a cost of service basis. In the case of
    sourcing agreements that are contracts for differences,
    the contract price from which the reference price is
    subtracted shall be established on a cost of service basis.
    The Agency and the Commission may approve any such utility
    sourcing agreements that do not exceed cost-based
    benchmarks developed by the procurement administrator, in
    consultation with the Commission staff, Agency staff and
    the procurement monitor, subject to Commission review and
    approval. The Commission shall have authority to inspect
    all books and records associated with these clean coal
    facilities during the term of any such contract.
        (6) Costs incurred under this subsection (d) or
    pursuant to a contract entered into under this subsection
    (d) shall be deemed prudently incurred and reasonable in
    amount and the electric utility shall be entitled to full
    cost recovery pursuant to the tariffs filed with the
    Commission.
        (e) (d) The draft procurement plans are subject to
    public comment, as required by Section 16-111.5 of the
    Public Utilities Act.
        (f) (e) The Agency shall submit the final procurement
    plan to the Commission. The Agency shall revise a
    procurement plan if the Commission determines that it does
    not meet the standards set forth in Section 16-111.5 of the
    Public Utilities Act.
        (g) (f) The Agency shall assess fees to each affected
    utility to recover the costs incurred in preparation of the
    annual procurement plan for the utility.
        (h) (g) The Agency shall assess fees to each bidder to
    recover the costs incurred in connection with a competitive
    procurement process.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    (20 ILCS 3855/1-80)
    Sec. 1-80. Resource Development Bureau. The Resource
Development Bureau has the following duties and
responsibilities:
        (a) At the Agency's discretion, conduct feasibility
    studies on the construction of any facility. Funding for a
    study shall come from either:
            (i) fees assessed by the Agency on municipal
        electric systems, governmental aggregators, unit or
        units of local government, or rural electric
        cooperatives requesting the feasibility study; or
            (ii) an appropriation from the General Assembly.
        (b) If the Agency undertakes the construction of a
    facility, moneys generated from the sale of revenue bonds
    by the Authority for the facility shall be used to
    reimburse the source of the money used for the facility's
    feasibility study.
        (c) The Agency may develop, finance, construct, or
    operate electric generation and co-generation facilities
    that use indigenous coal or renewable resources, or both,
    financed with bonds issued by the Authority on behalf of
    the Agency. Any such facility that uses coal must be a
    clean coal facility and must be constructed in a location
    Preference shall be given to technologies that enable
    carbon capture and sites in locations where the geology is
    suitable for carbon sequestration. The Agency may also
    develop, finance, construct, or operate a carbon
    sequestration facility.
            (1) The Agency may enter into contractual
        arrangements with private and public entities,
        including but not limited to municipal electric
        systems, governmental aggregators, and rural electric
        cooperatives, to plan, site, construct, improve,
        rehabilitate, and operate those electric generation
        and co-generation facilities. No contract shall be
        entered into by the Agency that would jeopardize the
        tax-exempt status of any bond issued in connection with
        a project for which the Agency entered into the
        contract.
            (2) The Agency shall hold at least one public
        hearing before entering into any such contractual
        arrangements. At least 30-days' notice of the hearing
        shall be given by publication once in each week during
        that period in 6 newspapers within the State, at least
        one of which has a circulation area that includes the
        location of the proposed facility.
            (3) The first facility that the Agency develops,
        finances, or constructs shall be a facility that uses
        coal produced in Illinois. The Agency may, however,
        also develop, finance, or construct renewable energy
        facilities after work on the first facility has
        commenced.
            (4) The Agency may not develop, finance, or
        construct a nuclear power plant.
            (5) The Agency shall assess fees to applicants
        seeking to partner with the Agency on projects.
        (d) Use of electricity generated by the Agency's
    facilities. The Agency may supply electricity produced by
    the Agency's facilities to municipal electric systems,
    governmental aggregators, or rural electric cooperatives
    in Illinois. The electricity shall be supplied at cost.
            (1) Contracts to supply power and energy from the
        Agency's facilities shall provide for the effectuation
        of the policies set forth in this Act.
            (2) The contracts shall also provide that,
        notwithstanding any provision in the Public Utilities
        Act, entities supplied with power and energy from an
        Agency facility shall supply the power and energy to
        retail customers at the same price paid to purchase
        power and energy from the Agency.
    (e) Electric utilities shall not be required to purchase
electricity directly or indirectly from facilities developed
or sponsored by the Agency.
    (f) The Agency may sell excess capacity and excess energy
into the wholesale electric market at prevailing market rates;
provided, however, the Agency may not sell excess capacity or
excess energy through the procurement process described in
Section 16-111.5 of the Public Utilities Act.
    (g) The Agency shall not directly sell electric power and
energy to retail customers. Nothing in this paragraph shall be
construed to prohibit sales to municipal electric systems,
governmental aggregators, or rural electric cooperatives.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    Section 1-10. The Public Utilities Act is amended by
changing Sections 9-220, 16-101A, 16-111.5, 16-115, and 16-116
as follows:
 
    (220 ILCS 5/9-220)  (from Ch. 111 2/3, par. 9-220)
    Sec. 9-220. Rate changes based on changes in fuel costs.
    (a) Notwithstanding the provisions of Section 9-201, the
Commission may authorize the increase or decrease of rates and
charges based upon changes in the cost of fuel used in the
generation or production of electric power, changes in the cost
of purchased power, or changes in the cost of purchased gas
through the application of fuel adjustment clauses or purchased
gas adjustment clauses. The Commission may also authorize the
increase or decrease of rates and charges based upon
expenditures or revenues resulting from the purchase or sale of
emission allowances created under the federal Clean Air Act
Amendments of 1990, through such fuel adjustment clauses, as a
cost of fuel. For the purposes of this paragraph, cost of fuel
used in the generation or production of electric power shall
include the amount of any fees paid by the utility for the
implementation and operation of a process for the
desulfurization of the flue gas when burning high sulfur coal
at any location within the State of Illinois irrespective of
the attainment status designation of such location; but shall
not include transportation costs of coal (i) except to the
extent that for contracts entered into on and after the
effective date of this amendatory Act of 1997, the cost of the
coal, including transportation costs, constitutes the lowest
cost for adequate and reliable fuel supply reasonably available
to the public utility in comparison to the cost, including
transportation costs, of other adequate and reliable sources of
fuel supply reasonably available to the public utility, or (ii)
except as otherwise provided in the next 3 sentences of this
paragraph. Such costs of fuel shall, when requested by a
utility or at the conclusion of the utility's next general
electric rate proceeding, whichever shall first occur, include
transportation costs of coal purchased under existing coal
purchase contracts. For purposes of this paragraph "existing
coal purchase contracts" means contracts for the purchase of
coal in effect on the effective date of this amendatory Act of
1991, as such contracts may thereafter be amended, but only to
the extent that any such amendment does not increase the
aggregate quantity of coal to be purchased under such contract.
Nothing herein shall authorize an electric utility to recover
through its fuel adjustment clause any amounts of
transportation costs of coal that were included in the revenue
requirement used to set base rates in its most recent general
rate proceeding. Cost shall be based upon uniformly applied
accounting principles. Annually, the Commission shall initiate
public hearings to determine whether the clauses reflect actual
costs of fuel, gas, power, or coal transportation purchased to
determine whether such purchases were prudent, and to reconcile
any amounts collected with the actual costs of fuel, power,
gas, or coal transportation prudently purchased. In each such
proceeding, the burden of proof shall be upon the utility to
establish the prudence of its cost of fuel, power, gas, or coal
transportation purchases and costs. The Commission shall issue
its final order in each such annual proceeding for an electric
utility by December 31 of the year immediately following the
year to which the proceeding pertains, provided, that the
Commission shall issue its final order with respect to such
annual proceeding for the years 1996 and earlier by December
31, 1998.
    (b) A public utility providing electric service, other than
a public utility described in subsections (e) or (f) of this
Section, may at any time during the mandatory transition period
file with the Commission proposed tariff sheets that eliminate
the public utility's fuel adjustment clause and adjust the
public utility's base rate tariffs by the amount necessary for
the base fuel component of the base rates to recover the public
utility's average fuel and power supply costs per kilowatt-hour
for the 2 most recent years for which the Commission has issued
final orders in annual proceedings pursuant to subsection (a),
where the average fuel and power supply costs per kilowatt-hour
shall be calculated as the sum of the public utility's prudent
and allowable fuel and power supply costs as found by the
Commission in the 2 proceedings divided by the public utility's
actual jurisdictional kilowatt-hour sales for those 2 years.
Notwithstanding any contrary or inconsistent provisions in
Section 9-201 of this Act, in subsection (a) of this Section or
in any rules or regulations promulgated by the Commission
pursuant to subsection (g) of this Section, the Commission
shall review and shall by order approve, or approve as
modified, the proposed tariff sheets within 60 days after the
date of the public utility's filing. The Commission may modify
the public utility's proposed tariff sheets only to the extent
the Commission finds necessary to achieve conformance to the
requirements of this subsection (b). During the 5 years
following the date of the Commission's order, but in any event
no earlier than January 1, 2007, a public utility whose fuel
adjustment clause has been eliminated pursuant to this
subsection shall not file proposed tariff sheets seeking, or
otherwise petition the Commission for, reinstatement of a fuel
adjustment clause.
    (c) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section or in any rules or regulations promulgated by the
Commission pursuant to subsection (g) of this Section, a public
utility providing electric service, other than a public utility
described in subsection (e) or (f) of this Section, may at any
time during the mandatory transition period file with the
Commission proposed tariff sheets that establish the rate per
kilowatt-hour to be applied pursuant to the public utility's
fuel adjustment clause at the average value for such rate
during the preceding 24 months, provided that such average rate
results in a credit to customers' bills, without making any
revisions to the public utility's base rate tariffs. The
proposed tariff sheets shall establish the fuel adjustment rate
for a specific time period of at least 3 years but not more
than 5 years, provided that the terms and conditions for any
reinstatement earlier than 5 years shall be set forth in the
proposed tariff sheets and subject to modification or approval
by the Commission. The Commission shall review and shall by
order approve the proposed tariff sheets if it finds that the
requirements of this subsection are met. The Commission shall
not conduct the annual hearings specified in the last 3
sentences of subsection (a) of this Section for the utility for
the period that the factor established pursuant to this
subsection is in effect.
    (d) A public utility providing electric service, or a
public utility providing gas service may file with the
Commission proposed tariff sheets that eliminate the public
utility's fuel or purchased gas adjustment clause and adjust
the public utility's base rate tariffs to provide for recovery
of power supply costs or gas supply costs that would have been
recovered through such clause; provided, that the provisions of
this subsection (d) shall not be available to a public utility
described in subsections (e) or (f) of this Section to
eliminate its fuel adjustment clause. Notwithstanding any
contrary or inconsistent provisions in Section 9-201 of this
Act, in subsection (a) of this Section, or in any rules or
regulations promulgated by the Commission pursuant to
subsection (g) of this Section, the Commission shall review and
shall by order approve, or approve as modified in the
Commission's order, the proposed tariff sheets within 240 days
after the date of the public utility's filing. The Commission's
order shall approve rates and charges that the Commission,
based on information in the public utility's filing or on the
record if a hearing is held by the Commission, finds will
recover the reasonable, prudent and necessary jurisdictional
power supply costs or gas supply costs incurred or to be
incurred by the public utility during a 12 month period found
by the Commission to be appropriate for these purposes,
provided, that such period shall be either (i) a 12 month
historical period occurring during the 15 months ending on the
date of the public utility's filing, or (ii) a 12 month future
period ending no later than 15 months following the date of the
public utility's filing. The public utility shall include with
its tariff filing information showing both (1) its actual
jurisdictional power supply costs or gas supply costs for a 12
month historical period conforming to (i) above and (2) its
projected jurisdictional power supply costs or gas supply costs
for a future 12 month period conforming to (ii) above. If the
Commission's order requires modifications in the tariff sheets
filed by the public utility, the public utility shall have 7
days following the date of the order to notify the Commission
whether the public utility will implement the modified tariffs
or elect to continue its fuel or purchased gas adjustment
clause in force as though no order had been entered. The
Commission's order shall provide for any reconciliation of
power supply costs or gas supply costs, as the case may be, and
associated revenues through the date that the public utility's
fuel or purchased gas adjustment clause is eliminated. During
the 5 years following the date of the Commission's order, a
public utility whose fuel or purchased gas adjustment clause
has been eliminated pursuant to this subsection shall not file
proposed tariff sheets seeking, or otherwise petition the
Commission for, reinstatement or adoption of a fuel or
purchased gas adjustment clause. Nothing in this subsection (d)
shall be construed as limiting the Commission's authority to
eliminate a public utility's fuel adjustment clause or
purchased gas adjustment clause in accordance with any other
applicable provisions of this Act.
    (e) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section, or in any rules promulgated by the Commission
pursuant to subsection (g) of this Section, a public utility
providing electric service to more than 1,000,000 customers in
this State may, within the first 6 months after the effective
date of this amendatory Act of 1997, file with the Commission
proposed tariff sheets that eliminate, effective January 1,
1997, the public utility's fuel adjustment clause without
adjusting its base rates, and such tariff sheets shall be
effective upon filing. To the extent the application of the
fuel adjustment clause had resulted in net charges to customers
after January 1, 1997, the utility shall also file a tariff
sheet that provides for a refund stated on a per kilowatt-hour
basis of such charges over a period not to exceed 6 months;
provided however, that such refund shall not include the
proportional amounts of taxes paid under the Use Tax Act,
Service Use Tax Act, Service Occupation Tax Act, and Retailers'
Occupation Tax Act on fuel used in generation. The Commission
shall issue an order within 45 days after the date of the
public utility's filing approving or approving as modified such
tariff sheet. If the fuel adjustment clause is eliminated
pursuant to this subsection, the Commission shall not conduct
the annual hearings specified in the last 3 sentences of
subsection (a) of this Section for the utility for any period
after December 31, 1996 and prior to any reinstatement of such
clause. A public utility whose fuel adjustment clause has been
eliminated pursuant to this subsection shall not file a
proposed tariff sheet seeking, or otherwise petition the
Commission for, reinstatement of the fuel adjustment clause
prior to January 1, 2007.
    (f) Notwithstanding any contrary or inconsistent
provisions in Section 9-201 of this Act, in subsection (a) of
this Section, or in any rules or regulations promulgated by the
Commission pursuant to subsection (g) of this Section, a public
utility providing electric service to more than 500,000
customers but fewer than 1,000,000 customers in this State may,
within the first 6 months after the effective date of this
amendatory Act of 1997, file with the Commission proposed
tariff sheets that eliminate, effective January 1, 1997, the
public utility's fuel adjustment clause and adjust its base
rates by the amount necessary for the base fuel component of
the base rates to recover 91% of the public utility's average
fuel and power supply costs for the 2 most recent years for
which the Commission, as of January 1, 1997, has issued final
orders in annual proceedings pursuant to subsection (a), where
the average fuel and power supply costs per kilowatt-hour shall
be calculated as the sum of the public utility's prudent and
allowable fuel and power supply costs as found by the
Commission in the 2 proceedings divided by the public utility's
actual jurisdictional kilowatt-hour sales for those 2 years,
provided, that such tariff sheets shall be effective upon
filing. To the extent the application of the fuel adjustment
clause had resulted in net charges to customers after January
1, 1997, the utility shall also file a tariff sheet that
provides for a refund stated on a per kilowatt-hour basis of
such charges over a period not to exceed 6 months. Provided
however, that such refund shall not include the proportional
amounts of taxes paid under the Use Tax Act, Service Use Tax
Act, Service Occupation Tax Act, and Retailers' Occupation Tax
Act on fuel used in generation. The Commission shall issue an
order within 45 days after the date of the public utility's
filing approving or approving as modified such tariff sheet. If
the fuel adjustment clause is eliminated pursuant to this
subsection, the Commission shall not conduct the annual
hearings specified in the last 3 sentences of subsection (a) of
this Section for the utility for any period after December 31,
1996 and prior to any reinstatement of such clause. A public
utility whose fuel adjustment clause has been eliminated
pursuant to this subsection shall not file a proposed tariff
sheet seeking, or otherwise petition the Commission for,
reinstatement of the fuel adjustment clause prior to January 1,
2007.
    (g) The Commission shall have authority to promulgate rules
and regulations to carry out the provisions of this Section.
    (h) Any gas utility may enter into a contract for up to 20
years of supply with any company for the purchase of substitute
natural gas (SNG) produced from coal through the gasification
process if the company has commenced construction of a coal
gasification facility by July 1, 2010. The cost for the SNG is
reasonable and prudent and recoverable through the purchased
gas adjustment clause for years one through 10 of the contract
if: (i) the only coal used in the gasification process has high
volatile bituminous rank and greater than 1.7 pounds of sulfur
per million Btu content; (ii) at the time the contract term
commences, the price per million Btu does not exceed $7.95 in
2008 dollars, adjusted annually based on the change in the
Annual Consumer Price Index for All Urban Consumers for the
Midwest Region as published in April by the United States
Department of Labor, Bureau of Labor Statistics (or a suitable
Consumer Price Index calculation if this Consumer Price Index
is not available) for the previous calendar year; provided that
the price per million Btu shall not exceed $9.95 at any time
during the contract; (iii) the utility's aggregate long-term
supply contracts for the purchase of SNG does not exceed 25% of
the annual system supply requirements of the utility at the
time the contract is entered into and the quantity of SNG
supplied to a utility by any one producer may not exceed 20
billion cubic feet per year; and (iv) the contract is entered
into within 120 days after the effective date of this
amendatory Act of the 95th General Assembly and terminates no
more than 20 years after the commencement of the commercial
production of SNG at the facility. Contracts greater than 10
years shall provide that if, at any time during supply years 11
through 20 of the contract, the Commission determines that the
cost for the synthetic natural gas purchased under the contract
during supply years 11 through 20 is not reasonable and
prudent, then the company shall reimburse the utility for the
difference between the cost deemed reasonable and prudent by
the Commission and the cost imposed under the contract. All
such contracts, regardless of duration, shall require the owner
of any facility supplying SNG under the contract to provide
documentation to the Commission each year, starting in the
facility's first year of commercial operation, accurately
reporting the quantity of carbon dioxide emissions from the
facility that have been captured and sequestered and reporting
any quantities of carbon dioxide released from the site or
sites at which carbon dioxide emissions were sequestered in
prior years, based on continuous monitoring of those sites. If,
in any year, the owner of the facility fails to demonstrate
that the SNG facility captured and sequestered at least 90% of
the total carbon dioxide emissions that the facility would
otherwise emit or that sequestration of emissions from prior
years has failed, resulting in the release of carbon dioxide
into the atmosphere, then the owner of the facility must offset
excess emissions. Any such carbon dioxide offsets must be
permanent, additional, verifiable, real, located within the
State of Illinois, and legally and practicably enforceable. The
costs of such offsets shall not exceed $40 million in any given
year. No costs of any purchases of carbon offsets may be
recovered from a utility or its customers. All carbon offsets
purchased for this purpose must be permanently retired. In
addition, carbon dioxide emission credits equivalent to 50% of
the amount of credits associated with the required
sequestration of carbon dioxide from the facility must be
permanently retired. Compliance with the sequestration
requirements and the offset purchase requirements specified in
this subsection (h) shall be assessed annually by an
independent expert retained by the owner of the SNG facility,
with the advance written approval of the Attorney General. An
SNG facility operating pursuant to this subsection (h) shall
not forfeit its designation as a clean coal SNG facility if the
facility fails to fully comply with the applicable carbon
sequestration requirements in any given year, provided the
requisite offsets are purchased. However, the Attorney
General, on behalf of the People of the State of Illinois, may
specifically enforce the facility's sequestration
requirements. Any gas utility may enter into a 20-year supply
contract with any company for synthetic natural gas produced
from coal through the gasification process if the company has
commenced construction of a coal gasification facility by July
1, 2008. The cost for the synthetic natural gas is reasonable
and prudent and recoverable through the purchased gas
adjustment clause for years one through 10 of the contract if:
(i) the only coal used in the gasification process has high
volatile bituminous rank and greater than 1.7 pounds of sulfur
per million Btu content; (ii) at the time the contract term
commences, the price per million Btu does not exceed $5 in 2004
dollars, adjusted annually based on the change in the Annual
Consumer Price Index for All Urban Consumers for the Midwest
Region as published in April by the United States Department of
Labor, Bureau of Labor Statistics (or a suitable Consumer Price
Index calculation if this Consumer Price Index is not
available) for the previous calendar year; provided that the
price per million Btu shall not exceed $5.50 at any time during
the contract; (iii) the utility's aggregate long-term supply
contracts for the purchase of synthetic natural gas produced
from coal through the gasification process does not exceed 25%
of the annual system supply requirements of the utility at the
time the contract is entered into; and (iv) the contract is
entered into within one year after the effective date of this
amendatory Act of the 94th General Assembly and terminates 20
years after the commencement of the production of synthetic
natural gas. The contract shall provide that if, at any time
during years 11 through 20 of the contract, the Commission
determines that the cost for the synthetic natural gas under
the contract is not reasonable and prudent, then the company
shall reimburse the utility for the difference between the cost
deemed reasonable and prudent by the Commission and the cost
imposed under the contract.
    (i) If a gas utility or an affiliate of a gas utility has
an ownership interest in any entity that produces or sells
synthetic natural gas, Article VII of this Act shall apply.
(Source: P.A. 94-63, eff. 6-21-05.)
 
    (220 ILCS 5/16-101A)
    Sec. 16-101A. Legislative findings.
    (a) The citizens and businesses of the State of Illinois
have been well-served by a comprehensive electrical utility
system which has provided safe, reliable, and affordable
service. The electrical utility system in the State of Illinois
has historically been subject to State and federal regulation,
aimed at assuring the citizens and businesses of the State of
safe, reliable, and affordable service, while at the same time
assuring the utility system of a return on its investment.
    (b) Competitive forces are affecting the market for
electricity as a result of recent federal regulatory and
statutory changes and the activities of other states.
Competition in the electric services market may create
opportunities for new products and services for customers and
lower costs for users of electricity. Long-standing regulatory
relationships need to be altered to accommodate the competition
that could fundamentally alter the structure of the electric
services market.
    (c) With the advent of increasing competition in this
industry, the State has a continued interest in assuring that
the safety, reliability, and affordability of electrical power
is not sacrificed to competitive pressures, and to that end,
intends to implement safeguards to assure that the industry
continues to operate the electrical system in a manner that
will serve the public's interest. Under the existing regulatory
framework, the industry has been encouraged to undertake
certain investments in its physical plant and personnel to
enhance its efficient operation, the cost of which it has been
permitted to pass on to consumers. The State has an interest in
providing the existing utilities a reasonable opportunity to
obtain a return on certain investments on which they depended
in undertaking those commitments in the first instance while,
at the same time, not permitting new entrants into the industry
to take unreasonable advantage of the investments made by the
formerly regulated industry.
    (d) A competitive wholesale and retail market must benefit
all Illinois citizens. The Illinois Commerce Commission should
act to promote the development of an effectively competitive
electricity market that operates efficiently and is equitable
to all consumers. Consumer protections must be in place to
ensure that all customers continue to receive safe, reliable,
affordable, and environmentally safe electric service.
    (e) All consumers must benefit in an equitable and timely
fashion from the lower costs for electricity that result from
retail and wholesale competition and receive sufficient
information to make informed choices among suppliers and
services. The use of renewable resources and energy efficiency
resources should be encouraged in competitive markets.
    (f) The efficiency of electric markets depends both upon
the competitiveness of supply and upon the
price-responsiveness of the demand for service. Therefore, to
ensure the lowest total cost of service and to enhance the
reliability of service, all classes of the electricity
customers of electric utilities should have access to and be
able to voluntarily use real-time pricing and other
price-response and demand-response mechanisms.
    (g) Including cost-effective renewable resources and
demand-response resources in a diverse electricity supply
portfolio will reduce long-term direct and indirect costs to
consumers by decreasing environmental impacts and by avoiding
or delaying the need for new generation, transmission, and
distribution infrastructure. It serves the public interest to
allow electric utilities to recover costs for reasonably and
prudently incurred expenses for electricity generated by
renewable resources and demand-response resources.
    (h) Including electricity generated by clean coal
facilities, as defined under Section 1-10 of the Illinois Power
Agency Act, in a diverse electricity procurement portfolio will
reduce the need to purchase, directly or indirectly, carbon
dioxide emission credits and will decrease environmental
impacts. It serves the public interest to allow electric
utilities to recover costs for reasonably and prudently
incurred expenses for sourcing electricity generated by clean
coal facilities.
(Source: P.A. 94-977, eff. 6-30-06; 95-481, eff. 8-28-07.)
 
    (220 ILCS 5/16-111.5)
    Sec. 16-111.5. Provisions relating to procurement.
    (a) An electric utility that on December 31, 2005 served at
least 100,000 customers in Illinois shall procure power and
energy for its eligible retail customers in accordance with the
applicable provisions set forth in Section 1-75 of the Illinois
Power Agency Act and this Section. "Eligible retail customers"
for the purposes of this Section means those retail customers
that purchase power and energy from the electric utility under
fixed-price bundled service tariffs, other than those retail
customers whose service is declared or deemed competitive under
Section 16-113 and those other customer groups specified in
this Section, including self-generating customers, customers
electing hourly pricing, or those customers who are otherwise
ineligible for fixed-price bundled tariff service. Those
customers that are excluded from the definition of "eligible
retail customers" shall not be included in the procurement plan
load requirements, and the utility shall procure any supply
requirements, including capacity, ancillary services, and
hourly priced energy, in the applicable markets as needed to
serve those customers, provided that the utility may include in
its procurement plan load requirements for the load that is
associated with those retail customers whose service has been
declared or deemed competitive pursuant to Section 16-113 of
this Act to the extent that those customers are purchasing
power and energy during one of the transition periods
identified in subsection (b) of Section 16-113 of this Act.
    (b) A procurement plan shall be prepared for each electric
utility consistent with the applicable requirements of the
Illinois Power Agency Act and this Section. For purposes of
this Section, Illinois electric utilities that are affiliated
by virtue of a common parent company are considered to be a
single electric utility. Each procurement plan shall analyze
the projected balance of supply and demand for eligible retail
customers over a 5-year period with the first planning year
beginning on June 1 of the year following the year in which the
plan is filed. The plan shall specifically identify the
wholesale products to be procured following plan approval, and
shall follow all the requirements set forth in the Public
Utilities Act and all applicable State and federal laws,
statutes, rules, or regulations, as well as Commission orders.
Nothing in this Section precludes consideration of contracts
longer than 5 years and related forecast data. Unless specified
otherwise in this Section, in the procurement plan or in the
implementing tariff, any procurement occurring in accordance
with this plan shall be competitively bid through a request for
proposals process. Approval and implementation of the
procurement plan shall be subject to review and approval by the
Commission according to the provisions set forth in this
Section. A procurement plan shall include each of the following
components:
        (1) Hourly load analysis. This analysis shall include:
            (i) multi-year historical analysis of hourly
        loads;
            (ii) switching trends and competitive retail
        market analysis;
            (iii) known or projected changes to future loads;
        and
            (iv) growth forecasts by customer class.
        (2) Analysis of the impact of any demand side and
    renewable energy initiatives. This analysis shall include:
            (i) the impact of demand response programs, both
        current and projected;
            (ii) supply side needs that are projected to be
        offset by purchases of renewable energy resources, if
        any; and
            (iii) the impact of energy efficiency programs,
        both current and projected.
        (3) A plan for meeting the expected load requirements
    that will not be met through preexisting contracts. This
    plan shall include:
            (i) definitions of the different retail customer
        classes for which supply is being purchased;
            (ii) the proposed mix of demand-response products
        for which contracts will be executed during the next
        year. The cost-effective demand-response measures
        shall be procured whenever the cost is lower than
        procuring comparable capacity products, provided that
        such products shall:
                (A) be procured by a demand-response provider
            from eligible retail customers;
                (B) at least satisfy the demand-response
            requirements of the regional transmission
            organization market in which the utility's service
            territory is located, including, but not limited
            to, any applicable capacity or dispatch
            requirements;
                (C) provide for customers' participation in
            the stream of benefits produced by the
            demand-response products;
                (D) provide for reimbursement by the
            demand-response provider of the utility for any
            costs incurred as a result of the failure of the
            supplier of such products to perform its
            obligations thereunder; and
                (E) meet the same credit requirements as apply
            to suppliers of capacity, in the applicable
            regional transmission organization market;
            (iii) (ii) monthly forecasted system supply
        requirements, including expected minimum, maximum, and
        average values for the planning period;
            (iv) (iii) the proposed mix and selection of
        standard wholesale products for which contracts will
        be executed during the next year, separately or in
        combination, to meet that portion of its load
        requirements not met through pre-existing contracts,
        including but not limited to monthly 5 x 16 peak period
        block energy, monthly off-peak wrap energy, monthly 7 x
        24 energy, annual 5 x 16 energy, annual off-peak wrap
        energy, annual 7 x 24 energy, monthly capacity, annual
        capacity, peak load capacity obligations, capacity
        purchase plan, and ancillary services;
            (v) (iv) proposed term structures for each
        wholesale product type included in the proposed
        procurement plan portfolio of products; and
            (vi) (v) an assessment of the price risk, load
        uncertainty, and other factors that are associated
        with the proposed procurement plan; this assessment,
        to the extent possible, shall include an analysis of
        the following factors: contract terms, time frames for
        securing products or services, fuel costs, weather
        patterns, transmission costs, market conditions, and
        the governmental regulatory environment; the proposed
        procurement plan shall also identify alternatives for
        those portfolio measures that are identified as having
        significant price risk.
        (4) Proposed procedures for balancing loads. The
    procurement plan shall include, for load requirements
    included in the procurement plan, the process for (i)
    hourly balancing of supply and demand and (ii) the criteria
    for portfolio re-balancing in the event of significant
    shifts in load.
    (c) The procurement process set forth in Section 1-75 of
the Illinois Power Agency Act and subsection (e) of this
Section shall be administered by a procurement administrator
and monitored by a procurement monitor.
        (1) The procurement administrator shall:
            (i) design the final procurement process in
        accordance with Section 1-75 of the Illinois Power
        Agency Act and subsection (e) of this Section following
        Commission approval of the procurement plan;
            (ii) develop benchmarks in accordance with
        subsection (e)(3) to be used to evaluate bids; these
        benchmarks shall be submitted to the Commission for
        review and approval on a confidential basis prior to
        the procurement event;
            (iii) serve as the interface between the electric
        utility and suppliers;
            (iv) manage the bidder pre-qualification and
        registration process;
            (v) obtain the electric utilities' agreement to
        the final form of all supply contracts and credit
        collateral agreements;
            (vi) administer the request for proposals process;
            (vii) have the discretion to negotiate to
        determine whether bidders are willing to lower the
        price of bids that meet the benchmarks approved by the
        Commission; any post-bid negotiations with bidders
        shall be limited to price only and shall be completed
        within 24 hours after opening the sealed bids and shall
        be conducted in a fair and unbiased manner; in
        conducting the negotiations, there shall be no
        disclosure of any information derived from proposals
        submitted by competing bidders; if information is
        disclosed to any bidder, it shall be provided to all
        competing bidders;
            (viii) maintain confidentiality of supplier and
        bidding information in a manner consistent with all
        applicable laws, rules, regulations, and tariffs;
            (ix) submit a confidential report to the
        Commission recommending acceptance or rejection of
        bids;
            (x) notify the utility of contract counterparties
        and contract specifics; and
            (xi) administer related contingency procurement
        events.
        (2) The procurement monitor, who shall be retained by
    the Commission, shall:
            (i) monitor interactions among the procurement
        administrator, suppliers, and utility;
            (ii) monitor and report to the Commission on the
        progress of the procurement process;
            (iii) provide an independent confidential report
        to the Commission regarding the results of the
        procurement event;
            (iv) assess compliance with the procurement plans
        approved by the Commission for each utility that on
        December 31, 2005 provided electric service to a least
        100,000 customers in Illinois;
            (v) preserve the confidentiality of supplier and
        bidding information in a manner consistent with all
        applicable laws, rules, regulations, and tariffs;
            (vi) provide expert advice to the Commission and
        consult with the procurement administrator regarding
        issues related to procurement process design, rules,
        protocols, and policy-related matters; and
            (vii) consult with the procurement administrator
        regarding the development and use of benchmark
        criteria, standard form contracts, credit policies,
        and bid documents.
    (d) Except as provided in subsection (j), the planning
process shall be conducted as follows:
        (1) Beginning in 2008, each Illinois utility procuring
    power pursuant to this Section shall annually provide a
    range of load forecasts to the Illinois Power Agency by
    July 15 of each year, or such other date as may be required
    by the Commission or Agency. The load forecasts shall cover
    the 5-year procurement planning period for the next
    procurement plan and shall include hourly data
    representing a high-load, low-load and expected-load
    scenario for the load of the eligible retail customers. The
    utility shall provide supporting data and assumptions for
    each of the scenarios.
        (2) Beginning in 2008, the Illinois Power Agency shall
    prepare a procurement plan by August 15th of each year, or
    such other date as may be required by the Commission. The
    procurement plan shall identify the portfolio of
    demand-response and power and energy products to be
    procured. Cost-effective demand-response measures shall be
    procured as set forth in item (iii) of subsection (b) of
    this Section. Copies of the procurement plan shall be
    posted and made publicly available on the Agency's and
    Commission's websites, and copies shall also be provided to
    each affected electric utility. An affected utility shall
    have 30 days following the date of posting to provide
    comment to the Agency on the procurement plan. Other
    interested entities also may comment on the procurement
    plan. All comments submitted to the Agency shall be
    specific, supported by data or other detailed analyses,
    and, if objecting to all or a portion of the procurement
    plan, accompanied by specific alternative wording or
    proposals. All comments shall be posted on the Agency's and
    Commission's websites. During this 30-day comment period,
    the Agency shall hold at least one public hearing within
    each utility's service area for the purpose of receiving
    public comment on the procurement plan. Within 14 days
    following the end of the 30-day review period, the Agency
    shall revise the procurement plan as necessary based on the
    comments received and file the procurement plan with the
    Commission and post the procurement plan on the websites.
        (3) Within 5 days after the filing of the procurement
    plan, any person objecting to the procurement plan shall
    file an objection with the Commission. Within 10 days after
    the filing, the Commission shall determine whether a
    hearing is necessary. The Commission shall enter its order
    confirming or modifying the procurement plan within 90 days
    after the filing of the procurement plan by the Illinois
    Power Agency.
        (4) The Commission shall approve the procurement plan,
    including expressly the forecast used in the procurement
    plan, if the Commission determines that it will ensure
    adequate, reliable, affordable, efficient, and
    environmentally sustainable electric service at the lowest
    total cost over time, taking into account any benefits of
    price stability.
    (e) The procurement process shall include each of the
following components:
        (1) Solicitation, pre-qualification, and registration
    of bidders. The procurement administrator shall
    disseminate information to potential bidders to promote a
    procurement event, notify potential bidders that the
    procurement administrator may enter into a post-bid price
    negotiation with bidders that meet the applicable
    benchmarks, provide supply requirements, and otherwise
    explain the competitive procurement process. In addition
    to such other publication as the procurement administrator
    determines is appropriate, this information shall be
    posted on the Illinois Power Agency's and the Commission's
    websites. The procurement administrator shall also
    administer the prequalification process, including
    evaluation of credit worthiness, compliance with
    procurement rules, and agreement to the standard form
    contract developed pursuant to paragraph (2) of this
    subsection (e). The procurement administrator shall then
    identify and register bidders to participate in the
    procurement event.
        (2) Standard contract forms and credit terms and
    instruments. The procurement administrator, in
    consultation with the utilities, the Commission, and other
    interested parties and subject to Commission oversight,
    shall develop and provide standard contract forms for the
    supplier contracts that meet generally accepted industry
    practices. Standard credit terms and instruments that meet
    generally accepted industry practices shall be similarly
    developed. The procurement administrator shall make
    available to the Commission all written comments it
    receives on the contract forms, credit terms, or
    instruments. If the procurement administrator cannot reach
    agreement with the applicable electric utility as to the
    contract terms and conditions, the procurement
    administrator must notify the Commission of any disputed
    terms and the Commission shall resolve the dispute. The
    terms of the contracts shall not be subject to negotiation
    by winning bidders, and the bidders must agree to the terms
    of the contract in advance so that winning bids are
    selected solely on the basis of price.
        (3) Establishment of a market-based price benchmark.
    As part of the development of the procurement process, the
    procurement administrator, in consultation with the
    Commission staff, Agency staff, and the procurement
    monitor, shall establish benchmarks for evaluating the
    final prices in the contracts for each of the products that
    will be procured through the procurement process. The
    benchmarks shall be based on price data for similar
    products for the same delivery period and same delivery
    hub, or other delivery hubs after adjusting for that
    difference. The price benchmarks may also be adjusted to
    take into account differences between the information
    reflected in the underlying data sources and the specific
    products and procurement process being used to procure
    power for the Illinois utilities. The benchmarks shall be
    confidential but shall be provided to, and will be subject
    to Commission review and approval, prior to a procurement
    event.
        (4) Request for proposals competitive procurement
    process. The procurement administrator shall design and
    issue a request for proposals to supply electricity in
    accordance with each utility's procurement plan, as
    approved by the Commission. The request for proposals shall
    set forth a procedure for sealed, binding commitment
    bidding with pay-as-bid settlement, and provision for
    selection of bids on the basis of price.
        (5) A plan for implementing contingencies in the event
    of supplier default or failure of the procurement process
    to fully meet the expected load requirement due to
    insufficient supplier participation, Commission rejection
    of results, or any other cause.
            (i) Event of supplier default: In the event of
        supplier default, the utility shall review the
        contract of the defaulting supplier to determine if the
        amount of supply is 200 megawatts or greater, and if
        there are more than 60 days remaining of the contract
        term. If both of these conditions are met, and the
        default results in termination of the contract, the
        utility shall immediately notify the Illinois Power
        Agency that a request for proposals must be issued to
        procure replacement power, and the procurement
        administrator shall run an additional procurement
        event. If the contracted supply of the defaulting
        supplier is less than 200 megawatts or there are less
        than 60 days remaining of the contract term, the
        utility shall procure power and energy from the
        applicable regional transmission organization market,
        including ancillary services, capacity, and day-ahead
        or real time energy, or both, for the duration of the
        contract term to replace the contracted supply;
        provided, however, that if a needed product is not
        available through the regional transmission
        organization market it shall be purchased from the
        wholesale market.
            (ii) Failure of the procurement process to fully
        meet the expected load requirement: If the procurement
        process fails to fully meet the expected load
        requirement due to insufficient supplier participation
        or due to a Commission rejection of the procurement
        results, the procurement administrator, the
        procurement monitor, and the Commission staff shall
        meet within 10 days to analyze potential causes of low
        supplier interest or causes for the Commission
        decision. If changes are identified that would likely
        result in increased supplier participation, or that
        would address concerns causing the Commission to
        reject the results of the prior procurement event, the
        procurement administrator may implement those changes
        and rerun the request for proposals process according
        to a schedule determined by those parties and
        consistent with Section 1-75 of the Illinois Power
        Agency Act and this subsection. In any event, a new
        request for proposals process shall be implemented by
        the procurement administrator within 90 days after the
        determination that the procurement process has failed
        to fully meet the expected load requirement.
            (iii) In all cases where there is insufficient
        supply provided under contracts awarded through the
        procurement process to fully meet the electric
        utility's load requirement, the utility shall meet the
        load requirement by procuring power and energy from the
        applicable regional transmission organization market,
        including ancillary services, capacity, and day-ahead
        or real time energy or both; provided, however, that if
        a needed product is not available through the regional
        transmission organization market it shall be purchased
        from the wholesale market.
        (6) The procurement process described in this
    subsection is exempt from the requirements of the Illinois
    Procurement Code, pursuant to Section 20-10 of that Code.
    (f) Within 2 business days after opening the sealed bids,
the procurement administrator shall submit a confidential
report to the Commission. The report shall contain the results
of the bidding for each of the products along with the
procurement administrator's recommendation for the acceptance
and rejection of bids based on the price benchmark criteria and
other factors observed in the process. The procurement monitor
also shall submit a confidential report to the Commission
within 2 business days after opening the sealed bids. The
report shall contain the procurement monitor's assessment of
bidder behavior in the process as well as an assessment of the
procurement administrator's compliance with the procurement
process and rules. The Commission shall review the confidential
reports submitted by the procurement administrator and
procurement monitor, and shall accept or reject the
recommendations of the procurement administrator within 2
business days after receipt of the reports.
    (g) Within 3 business days after the Commission decision
approving the results of a procurement event, the utility shall
enter into binding contractual arrangements with the winning
suppliers using the standard form contracts; except that the
utility shall not be required either directly or indirectly to
execute the contracts if a tariff that is consistent with
subsection (l) of this Section has not been approved and placed
into effect for that utility.
    (h) The names of the successful bidders and the load
weighted average of the winning bid prices for each contract
type and for each contract term shall be made available to the
public at the time of Commission approval of a procurement
event. The Commission, the procurement monitor, the
procurement administrator, the Illinois Power Agency, and all
participants in the procurement process shall maintain the
confidentiality of all other supplier and bidding information
in a manner consistent with all applicable laws, rules,
regulations, and tariffs. Confidential information, including
the confidential reports submitted by the procurement
administrator and procurement monitor pursuant to subsection
(f) of this Section, shall not be made publicly available and
shall not be discoverable by any party in any proceeding,
absent a compelling demonstration of need, nor shall those
reports be admissible in any proceeding other than one for law
enforcement purposes.
    (i) Within 2 business days after a Commission decision
approving the results of a procurement event or such other date
as may be required by the Commission from time to time, the
utility shall file for informational purposes with the
Commission its actual or estimated retail supply charges, as
applicable, by customer supply group reflecting the costs
associated with the procurement and computed in accordance with
the tariffs filed pursuant to subsection (l) of this Section
and approved by the Commission.
    (j) Within 60 days following the effective date of this
amendatory Act, each electric utility that on December 31, 2005
provided electric service to at least 100,000 customers in
Illinois shall prepare and file with the Commission an initial
procurement plan, which shall conform in all material respects
to the requirements of the procurement plan set forth in
subsection (b); provided, however, that the Illinois Power
Agency Act shall not apply to the initial procurement plan
prepared pursuant to this subsection. The initial procurement
plan shall identify the portfolio of power and energy products
to be procured and delivered for the period June 2008 through
May 2009, and shall identify the proposed procurement
administrator, who shall have the same experience and expertise
as is required of a procurement administrator hired pursuant to
Section 1-75 of the Illinois Power Agency Act. Copies of the
procurement plan shall be posted and made publicly available on
the Commission's website. The initial procurement plan may
include contracts for renewable resources that extend beyond
May 2009.
        (i) Within 14 days following filing of the initial
    procurement plan, any person may file a detailed objection
    with the Commission contesting the procurement plan
    submitted by the electric utility. All objections to the
    electric utility's plan shall be specific, supported by
    data or other detailed analyses. The electric utility may
    file a response to any objections to its procurement plan
    within 7 days after the date objections are due to be
    filed. Within 7 days after the date the utility's response
    is due, the Commission shall determine whether a hearing is
    necessary. If it determines that a hearing is necessary, it
    shall require the hearing to be completed and issue an
    order on the procurement plan within 60 days after the
    filing of the procurement plan by the electric utility.
        (ii) The order shall approve or modify the procurement
    plan, approve an independent procurement administrator,
    and approve or modify the electric utility's tariffs that
    are proposed with the initial procurement plan. The
    Commission shall approve the procurement plan if the
    Commission determines that it will ensure adequate,
    reliable, affordable, efficient, and environmentally
    sustainable electric service at the lowest total cost over
    time, taking into account any benefits of price stability.
    (k) In order to promote price stability for residential and
small commercial customers during the transition to
competition in Illinois, and notwithstanding any other
provision of this Act, each electric utility subject to this
Section shall enter into one or more multi-year financial swap
contracts that become effective on the effective date of this
amendatory Act. These contracts may be executed with generators
and power marketers, including affiliated interests of the
electric utility. These contracts shall be for a term of no
more than 5 years and shall, for each respective utility or for
any Illinois electric utilities that are affiliated by virtue
of a common parent company and that are thereby considered a
single electric utility for purposes of this subsection (k),
not exceed in the aggregate 3,000 megawatts for any hour of the
year. The contracts shall be financial contracts and not energy
sales contracts. The contracts shall be executed as
transactions under a negotiated master agreement based on the
form of master agreement for financial swap contracts sponsored
by the International Swaps and Derivatives Association, Inc.
and shall be considered pre-existing contracts in the
utilities' procurement plans for residential and small
commercial customers. Costs incurred pursuant to a contract
authorized by this subsection (k) shall be deemed prudently
incurred and reasonable in amount and the electric utility
shall be entitled to full cost recovery pursuant to the tariffs
filed with the Commission.
    (l) An electric utility shall recover its costs incurred
under this Section, including, but not limited to, the costs of
procuring power and energy demand-response resources under
this Section. The utility shall file with the initial
procurement plan its proposed tariffs through which its costs
of procuring power that are incurred pursuant to a
Commission-approved procurement plan and those other costs
identified in this subsection (l), will be recovered. The
tariffs shall include a formula rate or charge designed to pass
through both the costs incurred by the utility in procuring a
supply of electric power and energy for the applicable customer
classes with no mark-up or return on the price paid by the
utility for that supply, plus any just and reasonable costs
that the utility incurs in arranging and providing for the
supply of electric power and energy. The formula rate or charge
shall also contain provisions that ensure that its application
does not result in over or under recovery due to changes in
customer usage and demand patterns, and that provide for the
correction, on at least an annual basis, of any accounting
errors that may occur. A utility shall recover through the
tariff all reasonable costs incurred to implement or comply
with any procurement plan that is developed and put into effect
pursuant to Section 1-75 of the Illinois Power Agency Act and
this Section, including any fees assessed by the Illinois Power
Agency, costs associated with load balancing, and contingency
plan costs. The electric utility shall also recover its full
costs of procuring electric supply for which it contracted
before the effective date of this Section in conjunction with
the provision of full requirements service under fixed-price
bundled service tariffs subsequent to December 31, 2006. All
such costs shall be deemed to have been prudently incurred. The
pass-through tariffs that are filed and approved pursuant to
this Section shall not be subject to review under, or in any
way limited by, Section 16-111(i) of this Act.
    (m) The Commission has the authority to adopt rules to
carry out the provisions of this Section. For the public
interest, safety, and welfare, the Commission also has
authority to adopt rules to carry out the provisions of this
Section on an emergency basis immediately following the
effective date of this amendatory Act.
    (n) Notwithstanding any other provision of this Act, any
affiliated electric utilities that submit a single procurement
plan covering their combined needs may procure for those
combined needs in conjunction with that plan, and may enter
jointly into power supply contracts, purchases, and other
procurement arrangements, and allocate capacity and energy and
cost responsibility therefor among themselves in proportion to
their requirements.
    (o) On or before June 1 of each year, the Commission shall
hold an informal hearing for the purpose of receiving comments
on the prior year's procurement process and any recommendations
for change.
    (p) An electric utility subject to this Section may propose
to invest, lease, own, or operate an electric generation
facility as part of its procurement plan, provided the utility
demonstrates that such facility is the least-cost option to
provide electric service to eligible retail customers. If the
facility is shown to be the least-cost option and is included
in a procurement plan prepared in accordance with Section 1-75
of the Illinois Power Agency Act and this Section, then the
electric utility shall make a filing pursuant to Section 8-406
of the Act, and may request of the Commission any statutory
relief required thereunder. If the Commission grants all of the
necessary approvals for the proposed facility, such supply
shall thereafter be considered as a pre-existing contract under
subsection (b) of this Section. The Commission shall in any
order approving a proposal under this subsection specify how
the utility will recover the prudently incurred costs of
investing in, leasing, owning, or operating such generation
facility through just and reasonable rates charged to eligible
retail customers. Cost recovery for facilities included in the
utility's procurement plan pursuant to this subsection shall
not be subject to review under or in any way limited by the
provisions of Section 16-111(i) of this Act. Nothing in this
Section is intended to prohibit a utility from filing for a
fuel adjustment clause as is otherwise permitted under Section
9-220 of this Act.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    (220 ILCS 5/16-115)
    Sec. 16-115. Certification of alternative retail electric
suppliers.
    (a) Any alternative retail electric supplier must obtain a
certificate of service authority from the Commission in
accordance with this Section before serving any retail customer
or other user located in this State. An alternative retail
electric supplier may request, and the Commission may grant, a
certificate of service authority for the entire State or for a
specified geographic area of the State.
    (b) An alternative retail electric supplier seeking a
certificate of service authority shall file with the Commission
a verified application containing information showing that the
applicant meets the requirements of this Section. The
alternative retail electric supplier shall publish notice of
its application in the official State newspaper within 10 days
following the date of its filing. No later than 45 days after
the application is properly filed with the Commission, and such
notice is published, the Commission shall issue its order
granting or denying the application.
    (c) An application for a certificate of service authority
shall identify the area or areas in which the applicant intends
to offer service and the types of services it intends to offer.
Applicants that seek to serve residential or small commercial
retail customers within a geographic area that is smaller than
an electric utility's service area shall submit evidence
demonstrating that the designation of this smaller area does
not violate Section 16-115A. An applicant that seeks to serve
residential or small commercial retail customers may state in
its application for certification any limitations that will be
imposed on the number of customers or maximum load to be
served.
    (d) The Commission shall grant the application for a
certificate of service authority if it makes the findings set
forth in this subsection based on the verified application and
such other information as the applicant may submit:
        (1) That the applicant possesses sufficient technical,
    financial and managerial resources and abilities to
    provide the service for which it seeks a certificate of
    service authority. In determining the level of technical,
    financial and managerial resources and abilities which the
    applicant must demonstrate, the Commission shall consider
    (i) the characteristics, including the size and financial
    sophistication, of the customers that the applicant seeks
    to serve, and (ii) whether the applicant seeks to provide
    electric power and energy using property, plant and
    equipment which it owns, controls or operates;
        (2) That the applicant will comply with all applicable
    federal, State, regional and industry rules, policies,
    practices and procedures for the use, operation, and
    maintenance of the safety, integrity and reliability, of
    the interconnected electric transmission system;
        (3) That the applicant will only provide service to
    retail customers in an electric utility's service area that
    are eligible to take delivery services under this Act;
        (4) That the applicant will comply with such
    informational or reporting requirements as the Commission
    may by rule establish and provide the information required
    by Section 16-112. Any data related to contracts for the
    purchase and sale of electric power and energy shall be
    made available for review by the Staff of the Commission on
    a confidential and proprietary basis and only to the extent
    and for the purposes which the Commission determines are
    reasonably necessary in order to carry out the purposes of
    this Act;
        (5) That the applicant will procure renewable energy
    resources and will source electricity from clean coal
    facilities, as defined in Section 1-10 of the Illinois
    Power Agency Act, in amounts at least equal to the
    percentages set forth in subsections (c) and (d) of Section
    1-75 of the Illinois Power Agency Act. For purposes of this
    Section:
            (i) the required procurement of renewable energy
        resources shall be measured as a percentage of the
        actual amount of electricity (megawatt-hours) supplied
        by the alternative retail electric supplier in the
        prior calendar year, as reported for that year to the
        Commission. This obligation applies to all electricity
        supplied pursuant to retail contracts executed,
        extended, or otherwise revised after the effective
        date of this amendatory Act, provided the alternative
        retail electric supplier submits all documentation
        needed by the Commission to determine the actual amount
        of electricity supplied under contracts that may be
        excluded under this limitation;
            (ii) an alternative retail electric supplier need
        not actually deliver electricity to its customers to
        comply with this Section, provided that if the
        alternative retail electric supplier claims credit for
        such purpose, subsequent purchasers shall not receive
        any emission credits or renewable energy credits in
        connection with the purchase of such electricity.
        Alternative retail electric suppliers shall maintain
        adequate records documenting the contractual
        disposition of all electricity procured to comply with
        this Section and shall file an accounting in the report
        which must be filed with the Commission on April 1 of
        each year, starting in 2010, in accordance with
        subsection (d-5) of this Section;
            (iii) the required procurement of renewable energy
        resources and sourcing of electricity generated by
        clean coal facilities, other than the initial clean
        coal facility, shall be limited to the amount of
        electricity that can be procured or sourced at a price
        at or below the benchmarks approved by the Commission
        each year in accordance with item (1) of subsection (c)
        and items (1) and (5) of subsection (d) of Section 1-75
        of the Illinois Power Agency Act;
            (iv) all alternative retail electric suppliers
        shall execute a sourcing agreement to source
        electricity from the initial clean coal facility, on
        the terms set forth in paragraphs (3) and (4) of
        subsection (d) of Section 1-75 of the Illinois Power
        Agency Act, except that in lieu of the requirements in
        subparagraphs (A)(v), (B)(i), (C)(v), and (C)(vi) of
        paragraph (3) of that subsection (d), the applicant
        shall execute one or more of the following:
                (1) if the sourcing agreement is a power
            purchase agreement, a contract with the initial
            clean coal facility to purchase in each hour an
            amount of electricity equal to all clean coal
            energy made available from the initial clean coal
            facility during such hour, which the utilities are
            not required to procure under the terms of
            subsection (d) of Section 1-75 of the Illinois
            Power Agency Act, multiplied by a fraction, the
            numerator of which is the alternative retail
            electric supplier's retail market sales of
            electricity (expressed in kilowatthours sold) in
            the State during the prior calendar month and the
            denominator of which is the total sales of
            electricity (expressed in kilowatthours sold) in
            the State by alternative retail electric suppliers
            during such prior month that are subject to the
            requirements of this paragraph (5) of subsection
            (d) of this Section and subsection (d) of Section
            1-75 of the Illinois Power Agency Act plus the
            total sales of electricity (expressed in
            kilowatthours sold) by utilities outside of their
            service areas during such prior month, pursuant to
            subsection (c) of Section 16-116 of this Act; or
                (2) if the sourcing agreement is a contract for
            differences, a contract with the initial clean
            coal facility in each hour with respect to an
            amount of electricity equal to all clean coal
            energy made available from the initial clean coal
            facility during such hour, which the utilities are
            not required to procure under the terms of
            subsection (d) of Section 1-75 of the Illinois
            Power Agency Act, multiplied by a fraction, the
            numerator of which is the alternative retail
            electric supplier's retail market sales of
            electricity (expressed in kilowatthours sold) in
            the State during the prior calendar month and the
            denominator of which is the total sales of
            electricity (expressed in kilowatthours sold) in
            the State by alternative retail electric suppliers
            during such prior month that are subject to the
            requirements of this paragraph (5) of subsection
            (d) of this Section and subsection (d) of Section
            1-75 of the Illinois Power Agency Act plus the
            total sales of electricity (expressed in
            kilowatthours sold) by utilities outside of their
            service areas during such prior month, pursuant to
            subsection (c) of Section 16-116 of this Act;
            (v) if, in any year after the first year of
        commercial operation, the owner of the clean coal
        facility fails to demonstrate to the Commission that
        the initial clean coal facility captured and
        sequestered at least 50% of the total carbon emissions
        that the facility would otherwise emit or that
        sequestration of emissions from prior years has
        failed, resulting in the release of carbon into the
        atmosphere, the owner of the facility must offset
        excess emissions. Any such carbon offsets must be
        permanent, additional, verifiable, real, located
        within the State of Illinois, and legally and
        practicably enforceable. The costs of any such offsets
        that are not recoverable shall not exceed $15 million
        in any given year. No costs of any such purchases of
        carbon offsets may be recovered from an alternative
        retail electric supplier or its customers. All carbon
        offsets purchased for this purpose and any carbon
        emission credits associated with sequestration of
        carbon from the facility must be permanently retired.
        The initial clean coal facility shall not forfeit its
        designation as a clean coal facility if the facility
        fails to fully comply with the applicable carbon
        sequestration requirements in any given year, provided
        the requisite offsets are purchased. However, the
        Attorney General, on behalf of the People of the State
        of Illinois, may specifically enforce the facility's
        sequestration requirement and the other terms of this
        contract provision. Compliance with the sequestration
        requirements and offset purchase requirements that
        apply to the initial clean coal facility shall be
        reviewed annually by an independent expert retained by
        the owner of the initial clean coal facility, with the
        advance written approval of the Attorney General
        (Blank);
        (6) With respect to an applicant that seeks to serve
    residential or small commercial retail customers, that the
    area to be served by the applicant and any limitations it
    proposes on the number of customers or maximum amount of
    load to be served meet the provisions of Section 16-115A,
    provided, that the Commission can extend the time for
    considering such a certificate request by up to 90 days,
    and can schedule hearings on such a request;
        (7) That the applicant meets the requirements of
    subsection (a) of Section 16-128; and
        (8) That the applicant will comply with all other
    applicable laws and regulations.
    (d-5) The Commission shall, after notice and hearing,
revoke the certification of any alternative retail electric
supplier that fails to execute a sourcing agreement with the
initial clean coal facility, as required by item (5) of
subsection (d) of this Section. The sourcing agreements with
this initial clean coal facility shall be subject to both
approval of the initial clean coal facility by the General
Assembly and satisfaction of the requirements of paragraph (4)
of subsection (d) of Section 1-75 of the Illinois Power Agency
Act, and shall be executed within 90 days after any such
approval by the General Assembly. The Commission shall also
revoke the certification of any alternative retail electric
supplier that, on April 1, 2010 or on April 1 of any year
thereafter, fails to demonstrate that the electricity provided
to the alternative retail electricity supplier's Illinois
customers during the previous year was generated by renewable
energy resources and clean coal facilities in amounts at least
equal to the percentages set forth in subsections (c) and (d)
of Section 1-75 of the Illinois Power Agency Act, as limited by
subsection (d)(5)(iii) of this Section. The Commission shall
not accept an application for certification from an alternative
retail electric supplier that has lost certification under this
subsection (d-5), or any corporate affiliate thereof, for at
least one year from the date of revocation.
    (e) A retail customer that owns a cogeneration or
self-generation facility and that seeks certification only to
provide electric power and energy from such facility to retail
customers at separate locations which customers are both (i)
owned by, or a subsidiary or other corporate affiliate of, such
applicant and (ii) eligible for delivery services, shall be
granted a certificate of service authority upon filing an
application and notifying the Commission that it has entered
into an agreement with the relevant electric utilities pursuant
to Section 16-118. Provided, however, that if the retail
customer owning such cogeneration or self-generation facility
would not be charged a transition charge due to the exemption
provided under subsection (f) of Section 16-108 prior to the
certification, and the retail customers at separate locations
are taking delivery services in conjunction with purchasing
power and energy from the facility, the retail customer on
whose premises the facility is located shall not thereafter be
required to pay transition charges on the power and energy that
such retail customer takes from the facility.
    (f) The Commission shall have the authority to promulgate
rules and regulations to carry out the provisions of this
Section. On or before May 1, 1999, the Commission shall adopt a
rule or rules applicable to the certification of those
alternative retail electric suppliers that seek to serve only
nonresidential retail customers with maximum electrical
demands of one megawatt or more which shall provide for (i)
expedited and streamlined procedures for certification of such
alternative retail electric suppliers and (ii) specific
criteria which, if met by any such alternative retail electric
supplier, shall constitute the demonstration of technical,
financial and managerial resources and abilities to provide
service required by subsection (d) (1) of this Section, such as
a requirement to post a bond or letter of credit, from a
responsible surety or financial institution, of sufficient
size for the nature and scope of the services to be provided;
demonstration of adequate insurance for the scope and nature of
the services to be provided; and experience in providing
similar services in other jurisdictions.
(Source: P.A. 95-130, eff. 1-1-08.)
 
    (220 ILCS 5/16-116)
    Sec. 16-116. Commission oversight of electric utilities
serving retail customers outside their service areas or
providing competitive, non-tariffed services.
    (a) An electric utility that has a tariff on file for
delivery services may, without regard to any otherwise
applicable tariffs on file, provide electric power and energy
to one or more retail customers located outside its service
area, but only to the extent (i) such retail customer (A) is
eligible for delivery services under any delivery services
tariff filed with the Commission by the electric utility in
whose service area the retail customer is located and (B) has
either elected to take such delivery services or has paid or
contracted to pay the charges specified in Sections 16-108 and
16-114, or (ii) if such retail customer is served by a
municipal system or electric cooperative, the customer is
eligible for delivery services under the terms and conditions
for such service established by the municipal system or
electric cooperative serving that customer.
    (b) An electric utility may offer any competitive service
to any customer or group of customers without filing contracts
with or seeking approval of the Commission, notwithstanding any
rule or regulation that would require such approval. The
Commission shall not increase or decrease the prices, and may
not alter or add to the terms and conditions for the utility's
competitive services, from those agreed to by the electric
utility and the customer or customers. Non-tariffed,
competitive services shall not be subject to the provisions of
the Electric Supplier Act or to Articles V, VII, VIII or IX of
the Act, except to the extent that any provisions of such
Articles are made applicable to alternative retail electric
suppliers pursuant to Sections 16-115 and 16-115A, but shall be
subject to the provisions of subsections (b) through (g) of
Section 16-115A, and Section 16-115B to the same extent such
provisions are applicable to the services provided by
alternative retail electric suppliers.
    (c) Electric utilities serving retail customers outside
their service areas shall be subject to the requirements of
paragraph (5) of subsection (d) of Section 16-115 of the Public
Utilities Act, except that the numerators referred to in that
subsection (d) shall be the utility's retail market sales of
electricity (expressed in kilowatthours sold) in the State
outside of the utility's service territory in the prior month.
(Source: P.A. 90-561, eff. 12-16-97.)
 
ARTICLE 5

 
    Section 5-5. The Public Utilities Act is amended by
changing Section 2-203 as follows:
 
    (220 ILCS 5/2-203)
    (Section scheduled to be repealed on January 1, 2009)
    Sec. 2-203. Public Utility Fund base maintenance
contribution. Each For each of the years 2003 through 2008,
each electric utility as defined in Section 16-102 of this Act
providing service to more than 12,500 customers in this State
on January 1, 1995 shall contribute annually a pro rata share
of a total amount of $5,500,000 based upon the number of
kilowatt-hours delivered to retail customers within this State
by each such electric utility in the 12 months preceding the
year of contribution. On or before May 1 of each year, the
Illinois Commerce Commission shall determine and notify the
Illinois Department of Revenue of the pro rata share owed by
each electric utility based upon information supplied annually
to the Commission. On or before June 1 of each year, the
Department of Revenue shall send written notification to each
electric utility of the amount of pro rata share they owe.
These contributions shall be remitted to the Department of
Revenue no earlier that July 1 and no later than July 31 of
each year the contribution is due on a return prescribed and
furnished by the Department of Revenue showing such information
as the Department of Revenue may reasonably require. The
Department of Revenue shall place the funds remitted under this
Section in the Public Utility Fund in the State treasury. The
funds received pursuant to this Section shall be subject to
appropriation by the General Assembly. If an electric utility
does not remit its pro rata share to the Department of Revenue,
the Department of Revenue must inform the Illinois Commerce
Commission of such failure. The Illinois Commerce Commission
may then revoke the certification of that electric utility.
This Section is repealed on January 1, 2014 2009.
(Source: P.A. 92-600, eff. 6-28-02.)
 
ARTICLE 10.

 
    Section 10-5. The Public Utilities Act is amended by
changing Section 16-125 as follows:
 
    (220 ILCS 5/16-125)
    Sec. 16-125. Transmission and distribution reliability
requirements.
    (a) To assure the reliable delivery of electricity to all
customers in this State and the effective implementation of the
provisions of this Article, the Commission shall, within 180
days of the effective date of this Article, adopt rules and
regulations for assessing and assuring the reliability of the
transmission and distribution systems and facilities that are
under the Commission's jurisdiction.
    (b) These rules and regulations shall require each electric
utility or alternative retail electric supplier owning,
controlling, or operating transmission and distribution
facilities and equipment subject to the Commission's
jurisdiction, referred to in this Section as "jurisdictional
entities", to adopt and implement procedures for restoring
transmission and distribution services to customers after
transmission or distribution outages on a nondiscriminatory
basis without regard to whether a customer has chosen the
electric utility, an affiliate of the electric utility, or
another entity as its provider of electric power and energy.
These rules and regulations shall also, at a minimum,
specifically require each jurisdictional entity to submit
annually to the Commission.
        (1) the number and duration of planned and unplanned
    outages during the prior year and their impacts on
    customers;
        (2) outages that were controllable and outages that
    were exacerbated in scope or duration by the condition of
    facilities, equipment or premises or by the actions or
    inactions of operating personnel or agents;
        (3) customer service interruptions that were due
    solely to the actions or inactions of an alternative retail
    electric supplier or a public utility in supplying power or
    energy;
        (4) a detailed report of the age, current condition,
    reliability and performance of the jurisdictional entity's
    existing transmission and distribution facilities, which
    shall include, without limitation, the following data:
            (i) a summary of the jurisdictional entity's
        outages and voltage variances reportable under the
        Commission's rules;
            (ii) the jurisdictional entity's expenditures for
        transmission construction and maintenance, the ratio
        of those expenditures to the jurisdictional entity's
        transmission investment, and the average remaining
        depreciation lives of the entity's transmission
        facilities, expressed as a percentage of total
        depreciation lives;
            (iii) the jurisdictional entity's expenditures for
        distribution construction and maintenance, the ratio
        of those expenditures to the jurisdictional entity's
        distribution investment, and the average remaining
        depreciation lives of the entity's distribution
        facilities, expressed as a percentage of total
        depreciation lives;
            (iv) a customer satisfaction survey covering,
        among other areas identified in Commission rules,
        reliability, customer service, and understandability
        of the jurisdictional entity's services and prices;
        and
            (v) the corresponding information, in the same
        format, for the previous 3 years, if available;
        (5) a plan for future investment and reliability
    improvements for the jurisdictional entity's transmission
    and distribution facilities that will ensure continued
    reliable delivery of energy to customers and provide the
    delivery reliability needed for fair and open competition;
    and
        (6) a report of the jurisdictional entity's
    implementation of its plan filed pursuant to subparagraph
    (5) for the previous reporting period.
    (c) The Commission rules shall set forth the criteria that
will be used to assess each jurisdictional entity's annual
report and evaluate its reliability performance. Such criteria
must take into account, at a minimum: the items required to be
reported in subsection (b); the relevant characteristics of the
area served; the age and condition of the system's equipment
and facilities; good engineering practices; the costs of
potential actions; and the benefits of avoiding the risks of
service disruption.
    (d) At least every 3 years, beginning in the year the
Commission issues the rules required by subsection (a) or the
following year if the rules are issued after June 1, the
Commission shall assess the annual report of each
jurisdictional entity and evaluate its reliability
performance. The Commission's evaluation shall include
specific identification of, and recommendations concerning,
any potential reliability problems that it has identified as a
result of its evaluation.
    (e) In the event that more than either (i) 30,000 (or some
other number, but only as provided by statute) of the total
customers or (ii) 0.8% (or some other percentage, but only as
provided by statute) of the total customers, whichever is less,
of an electric utility are subjected to a continuous power
interruption of 4 hours or more that results in the
transmission of power at less than 50% of the standard voltage,
or that results in the total loss of power transmission, the
utility shall be responsible for compensating customers
affected by that interruption for 4 hours or more for all
actual damages, which shall not include consequential damages,
suffered as a result of the power interruption. The utility
shall also reimburse the affected municipality, county, or
other unit of local government in which the power interruption
has taken place for all emergency and contingency expenses
incurred by the unit of local government as a result of the
interruption. A waiver of the requirements of this subsection
may be granted by the Commission in instances in which the
utility can show that the power interruption was a result of
any one or more of the following causes:
        (1) Unpreventable damage due to weather events or
    conditions.
        (2) Customer tampering.
        (3) Unpreventable damage due to civil or international
    unrest or animals.
        (4) Damage to utility equipment or other actions by a
    party other than the utility, its employees, agents, or
    contractors.
Loss of revenue and expenses incurred in complying with this
subsection may not be recovered from ratepayers.
    (f) In the event of a power surge or other fluctuation that
causes damage and affects more than either (i) 30,000 (or some
other number, but only as provided by statute) of the total
customers or (ii) 0.8% (or some other percentage, but only as
provided by statute) of the total customers, whichever is less,
the electric utility shall pay to affected customers the
replacement value of all goods damaged as a result of the power
surge or other fluctuation unless the utility can show that the
power surge or other fluctuation was due to one or more of the
following causes:
        (1) Unpreventable damage due to weather events or
    conditions.
        (2) Customer tampering.
        (3) Unpreventable damage due to civil or international
    unrest or animals.
        (4) Damage to utility equipment or other actions by a
    party other than the utility, its employees, agents, or
    contractors.
Loss of revenue and expenses incurred in complying with this
subsection may not be recovered from ratepayers. Customers with
respect to whom a waiver has been granted by the Commission
pursuant to subparagraphs (1)-(4) of subsections (e) and (f)
shall not count toward the either (i) 30,000 (or some other
number, but only as provided by statute) of the total customers
or (ii) 0.8% (or some other percentage, but only as provided by
statute) of the total customers required therein.
    (g) Whenever an electric utility must perform planned or
routine maintenance or repairs on its equipment that will
result in transmission of power at less than 50% of the
standard voltage, loss of power, or power fluctuation (as
defined in subsection (f)), the utility shall make reasonable
efforts to notify potentially affected customers no less than
24 hours in advance of performance of the repairs or
maintenance.
    (h) Remedies provided for under this Section may be sought
exclusively through the Illinois Commerce Commission as
provided under Section 10-109 of this Act. Damages awarded
under this Section for a power interruption shall be limited to
actual damages, which shall not include consequential damages,
and litigation costs. A utility's request for a waiver of this
Section shall be timely if filed no later than 30 days after
the date on which a claim is filed with the Commission seeking
damages or expense reimbursement under this Section. No utility
shall be liable under this Section while a request for waiver
is pending. Damage awards may not be paid out of utility rate
funds.
    (i) The provisions of this Section shall not in any way
diminish or replace other civil or administrative remedies
available to a customer or a class of customers.
    (j) The Commission shall by rule require an electric
utility to maintain service records detailing information on
each instance of transmission of power at less than 50% of the
standard voltage, loss of power, or power fluctuation (as
defined in subsection (f)), that affects 10 or more customers.
Occurrences that are momentary shall not be required to be
recorded or reported. The service record shall include, for
each occurrence, the following information:
        (1) The date.
        (2) The time of occurrence.
        (3) The duration of the incident.
        (4) The number of customers affected.
        (5) A description of the cause.
        (6) The geographic area affected.
        (7) The specific equipment involved in the fluctuation
    or interruption.
        (8) A description of measures taken to restore service.
        (9) A description of measures taken to remedy the cause
    of the power interruption or fluctuation.
        (10) A description of measures taken to prevent future
    occurrence.
        (11) The amount of remuneration, if any, paid to
    affected customers.
        (12) A statement of whether the fixed charge was waived
    for affected customers.
    Copies of the records containing this information shall be
available for public inspection at the utility's offices, and
copies thereof may be obtained upon payment of a fee not
exceeding the reasonable cost of reproduction. A copy of each
record shall be filed with the Commission and shall be
available for public inspection. Copies of the records may be
obtained upon payment of a fee not exceeding the reasonable
cost of reproduction.
    (k) The requirements of subsections (e) through (j) of this
Section shall apply only to an electric public utility having
100,000 1,000,000 or more customers.
(Source: P.A. 90-561, eff. 12-16-97.)
 
ARTICLE 15

 
    Section 15-5. The Public Utilities Act is amended by
changing Section 2-202 as follows:
 
    (220 ILCS 5/2-202)  (from Ch. 111 2/3, par. 2-202)
    Sec. 2-202. Policy; Public Utility Fund; tax.
    (a) It is declared to be the public policy of this State
that in order to maintain and foster the effective regulation
of public utilities under this Act in the interests of the
People of the State of Illinois and the public utilities as
well, the public utilities subject to regulation under this Act
and which enjoy the privilege of operating as public utilities
in this State, shall bear the expense of administering this Act
by means of a tax on such privilege measured by the annual
gross revenue of such public utilities in the manner provided
in this Section. For purposes of this Section, "expense of
administering this Act" includes any costs incident to studies,
whether made by the Commission or under contract entered into
by the Commission, concerning environmental pollution problems
caused or contributed to by public utilities and the means for
eliminating or abating those problems. Such proceeds shall be
deposited in the Public Utility Fund in the State treasury.
    (b) All of the ordinary and contingent expenses of the
Commission incident to the administration of this Act shall be
paid out of the Public Utility Fund except the compensation of
the members of the Commission which shall be paid from the
General Revenue Fund. Notwithstanding other provisions of this
Act to the contrary, the ordinary and contingent expenses of
the Commission incident to the administration of the Illinois
Commercial Transportation Law may be paid from appropriations
from the Public Utility Fund through the end of fiscal year
1986.
    (c) A tax is imposed upon each public utility subject to
the provisions of this Act equal to .08% of its gross revenue
for each calendar year commencing with the calendar year
beginning January 1, 1982, except that the Commission may, by
rule, establish a different rate no greater than 0.1%. For
purposes of this Section, "gross revenue" shall not include
revenue from the production, transmission, distribution, sale,
delivery, or furnishing of electricity. "Gross revenue" shall
not include amounts paid by telecommunications retailers under
the Telecommunications Infrastructure Maintenance Fee Act.
    (d) Annual gross revenue returns shall be filed in
accordance with paragraph (1) or (2) of this subsection (d).
        (1) Except as provided in paragraph (2) of this
    subsection (d), on or before January 10 of each year each
    public utility subject to the provisions of this Act shall
    file with the Commission an estimated annual gross revenue
    return containing an estimate of the amount of its gross
    revenue for the calendar year commencing January 1 of said
    year and a statement of the amount of tax due for said
    calendar year on the basis of that estimate. Public
    utilities may also file revised returns containing updated
    estimates and updated amounts of tax due during the
    calendar year. These revised returns, if filed, shall form
    the basis for quarterly payments due during the remainder
    of the calendar year. In addition, on or before March 31 of
    each year, each public utility shall file an amended return
    showing the actual amount of gross revenues shown by the
    company's books and records as of December 31 of the
    previous year. Forms and instructions for such estimated,
    revised, and amended returns shall be devised and supplied
    by the Commission.
        (2) Beginning with returns due after January 1, 2002,
    the requirements of paragraph (1) of this subsection (d)
    shall not apply to any public utility in any calendar year
    for which the total tax the public utility owes under this
    Section is less than $10,000. For such public utilities
    with respect to such years, the public utility shall file
    with the Commission, on or before March 31 of the following
    year, an annual gross revenue return for the year and a
    statement of the amount of tax due for that year on the
    basis of such a return. Forms and instructions for such
    returns and corrected returns shall be devised and supplied
    by the Commission.
    (e) All returns submitted to the Commission by a public
utility as provided in this subsection (e) or subsection (d) of
this Section shall contain or be verified by a written
declaration by an appropriate officer of the public utility
that the return is made under the penalties of perjury. The
Commission may audit each such return submitted and may, under
the provisions of Section 5-101 of this Act, take such measures
as are necessary to ascertain the correctness of the returns
submitted. The Commission has the power to direct the filing of
a corrected return by any utility which has filed an incorrect
return and to direct the filing of a return by any utility
which has failed to submit a return. A taxpayer's signing a
fraudulent return under this Section is perjury, as defined in
Section 32-2 of the Criminal Code of 1961.
    (f) (1) For all public utilities subject to paragraph (1)
of subsection (d), at least one quarter of the annual amount of
tax due under subsection (c) shall be paid to the Commission on
or before the tenth day of January, April, July, and October of
the calendar year subject to tax. In the event that an
adjustment in the amount of tax due should be necessary as a
result of the filing of an amended or corrected return under
subsection (d) or subsection (e) of this Section, the amount of
any deficiency shall be paid by the public utility together
with the amended or corrected return and the amount of any
excess shall, after the filing of a claim for credit by the
public utility, be returned to the public utility in the form
of a credit memorandum in the amount of such excess or be
refunded to the public utility in accordance with the
provisions of subsection (k) of this Section. However, if such
deficiency or excess is less than $1, then the public utility
need not pay the deficiency and may not claim a credit.
    (2) Any public utility subject to paragraph (2) of
subsection (d) shall pay the amount of tax due under subsection
(c) on or before March 31 next following the end of the
calendar year subject to tax. In the event that an adjustment
in the amount of tax due should be necessary as a result of the
filing of a corrected return under subsection (e), the amount
of any deficiency shall be paid by the public utility at the
time the corrected return is filed. Any excess tax payment by
the public utility shall be returned to it after the filing of
a claim for credit, in the form of a credit memorandum in the
amount of the excess. However, if such deficiency or excess is
less than $1, the public utility need not pay the deficiency
and may not claim a credit.
    (g) Each installment or required payment of the tax imposed
by subsection (c) becomes delinquent at midnight of the date
that it is due. Failure to make a payment as required by this
Section shall result in the imposition of a late payment
penalty, an underestimation penalty, or both, as provided by
this subsection. The late payment penalty shall be the greater
of:
        (1) $25 for each month or portion of a month that the
    installment or required payment is unpaid or
        (2) an amount equal to the difference between what
    should have been paid on the due date, based upon the most
    recently filed estimated, annual, or amended return, and
    what was actually paid, times 1%, for each month or portion
    of a month that the installment or required payment goes
    unpaid. This penalty may be assessed as soon as the
    installment or required payment becomes delinquent.
    The underestimation penalty shall apply to those public
utilities subject to paragraph (1) of subsection (d) and shall
be calculated after the filing of the amended return. It shall
be imposed if the amount actually paid on any of the dates
specified in subsection (f) is not equal to at least one-fourth
of the amount actually due for the year, and shall equal the
greater of:
        (1) $25 for each month or portion of a month that the
    amount due is unpaid or
        (2) an amount equal to the difference between what
    should have been paid, based on the amended return, and
    what was actually paid as of the date specified in
    subsection (f), times a percentage equal to 1/12 of the sum
    of 10% and the percentage most recently established by the
    Commission for interest to be paid on customer deposits
    under 83 Ill. Adm. Code 280.70(e)(1), for each month or
    portion of a month that the amount due goes unpaid, except
    that no underestimation penalty shall be assessed if the
    amount actually paid on or before each of the dates
    specified in subsection (f) was based on an estimate of
    gross revenues at least equal to the actual gross revenues
    for the previous year. The Commission may enforce the
    collection of any delinquent installment or payment, or
    portion thereof by legal action or in any other manner by
    which the collection of debts due the State of Illinois may
    be enforced under the laws of this State. The executive
    director or his designee may excuse the payment of an
    assessed penalty or a portion of an assessed penalty if he
    determines that enforced collection of the penalty as
    assessed would be unjust.
    (h) All sums collected by the Commission under the
provisions of this Section shall be paid promptly after the
receipt of the same, accompanied by a detailed statement
thereof, into the Public Utility Fund in the State treasury.
    (i) During the month of October of each odd-numbered year
the Commission shall:
        (1) determine the amount of all moneys deposited in the
    Public Utility Fund during the preceding fiscal biennium
    plus the balance, if any, in that fund at the beginning of
    that biennium;
        (2) determine the sum total of the following items: (A)
    all moneys expended or obligated against appropriations
    made from the Public Utility Fund during the preceding
    fiscal biennium, plus (B) the sum of the credit memoranda
    then outstanding against the Public Utility Fund, if any;
    and
        (3) determine the amount, if any, by which the sum
    determined as provided in item (1) exceeds the amount
    determined as provided in item (2).
    If the amount determined as provided in item (3) of this
subsection exceeds 50% of the previous fiscal year's
appropriation level $5,000,000, the Commission shall then
compute the proportionate amount, if any, which (x) the tax
paid hereunder by each utility during the preceding biennium,
and (y) the amount paid into the Public Utility Fund during the
preceding biennium by the Department of Revenue pursuant to
Sections 2-9 and 2-11 of the Electricity Excise Tax Law, bears
to the difference between the amount determined as provided in
item (3) of this subsection (i) and 50% of the previous fiscal
year's appropriation level $5,000,000. The Commission shall
cause the proportionate amount determined with respect to
payments made under the Electricity Excise Tax Law to be
transferred into the General Revenue Fund in the State
Treasury, and notify each public utility that it may file
during the 3 month period after the date of notification a
claim for credit for the proportionate amount determined with
respect to payments made hereunder by the public utility. If
the proportionate amount is less than $10, no notification will
be sent by the Commission, and no right to a claim exists as to
that amount. Upon the filing of a claim for credit within the
period provided, the Commission shall issue a credit memorandum
in such amount to such public utility. Any claim for credit
filed after the period provided for in this Section is void.
    (j) Credit memoranda issued pursuant to subsection (f) and
credit memoranda issued after notification and filing pursuant
to subsection (i) may be applied for the 2 year period from the
date of issuance, against the payment of any amount due during
that period under the tax imposed by subsection (c), or,
subject to reasonable rule of the Commission including
requirement of notification, may be assigned to any other
public utility subject to regulation under this Act. Any
application of credit memoranda after the period provided for
in this Section is void.
    (k) The chairman or executive director may make refund of
fees, taxes or other charges whenever he shall determine that
the person or public utility will not be liable for payment of
such fees, taxes or charges during the next 24 months and he
determines that the issuance of a credit memorandum would be
unjust.
(Source: P.A. 92-11, eff. 6-11-01; 92-22, eff. 6-30-01; 92-526,
eff. 1-1-03.)
 
    Section 15-10. The Illinois Vehicle Code is amended by
changing Section 18c-1503 as follows:
 
    (625 ILCS 5/18c-1503)  (from Ch. 95 1/2, par. 18c-1503)
    Sec. 18c-1503. Legislative Intent. It is the intent of the
Legislature that the exercise of powers under Sections 18c-1501
and 18c-1502 of this Chapter shall not diminish revenues to the
Commission, and that any surplus or deficit of revenues in the
Transportation Regulatory Fund, together with any projected
changes in the cost of administering and enforcing this
Chapter, should be considered in establishing or adjusting fees
and taxes in succeeding years. The Commission shall administer
fees and taxes under this Chapter in such a manner as to insure
that any surplus generated or accumulated in the Transportation
Regulatory Fund does not exceed 50% of the previous fiscal
year's appropriation the surplus accumulated in the Motor
Vehicle Fund during fiscal year 1984, and shall adjust the
level of such fees and taxes to insure compliance with this
provision.
(Source: P.A. 84-796.)
 
ARTICLE 99

 
    Section 99-97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.