SB1927 EnrolledLRB096 11262 DRJ 21678 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. If and only if Senate Bill 3388 of the 96th
5General Assembly (as amended by House Amendment Nos. 1, 2, and
63) becomes law, then the Illinois Power Agency Act is amended
7by changing Section 1-10 as follows:
 
8    (20 ILCS 3855/1-10)
9    Sec. 1-10. Definitions.
10    "Agency" means the Illinois Power Agency.
11    "Agency loan agreement" means any agreement pursuant to
12which the Illinois Finance Authority agrees to loan the
13proceeds of revenue bonds issued with respect to a project to
14the Agency upon terms providing for loan repayment installments
15at least sufficient to pay when due all principal of, interest
16and premium, if any, on those revenue bonds, and providing for
17maintenance, insurance, and other matters in respect of the
18project.
19    "Authority" means the Illinois Finance Authority.
20    "Clean coal facility" means an electric generating
21facility that uses primarily coal as a feedstock and that
22captures and sequesters carbon dioxide emissions at the
23following levels: at least 50% of the total carbon dioxide

 

 

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1emissions that the facility would otherwise emit if, at the
2time construction commences, the facility is scheduled to
3commence operation before 2016, at least 70% of the total
4carbon dioxide emissions that the facility would otherwise emit
5if, at the time construction commences, the facility is
6scheduled to commence operation during 2016 or 2017, and at
7least 90% of the total carbon dioxide emissions that the
8facility would otherwise emit if, at the time construction
9commences, the facility is scheduled to commence operation
10after 2017. The power block of the clean coal facility shall
11not exceed allowable emission rates for sulfur dioxide,
12nitrogen oxides, carbon monoxide, particulates and mercury for
13a natural gas-fired combined-cycle facility the same size as
14and in the same location as the clean coal facility at the time
15the clean coal facility obtains an approved air permit. All
16coal used by a clean coal facility shall have high volatile
17bituminous rank and greater than 1.7 pounds of sulfur per
18million btu content, unless the clean coal facility does not
19use gasification technology and was operating as a conventional
20coal-fired electric generating facility on June 1, 2009 (the
21effective date of Public Act 95-1027).
22    "Clean coal SNG brownfield facility" means a facility that
23(1) has commenced construction by July 1, 2014 on an urban
24brownfield site in a municipality with at least 1,000,000
25residents; (2) uses a gasification process to produce
26substitute natural gas; (3) uses coal as at least 50% of the

 

 

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1total feedstock over the term of any sourcing agreement with a
2utility and the remainder of the feedstock may be either
3petroleum coke or coal, with all such coal having a high
4bituminous rank and greater than 1.7 pounds of sulfur per
5million Btu content; and (4) captures and sequesters at least
685% of the total carbon dioxide emissions that the facility
7would otherwise emit.
8    "Clean coal SNG facility" means a facility that uses a
9gasification process to produce substitute natural gas, that
10sequesters at least 90% of the total carbon dioxide emissions
11that the facility would otherwise emit and that uses petroleum
12coke or coal as a feedstock, with all such coal having a high
13bituminous rank and greater than 1.7 pounds of sulfur per
14million btu content; provided, however, a clean coal SNG
15brownfield facility shall not be a clean coal SNG facility.
16    "Commission" means the Illinois Commerce Commission.
17    "Costs incurred in connection with the development and
18construction of a facility" means:
19        (1) the cost of acquisition of all real property,
20    fixtures, and improvements in connection therewith and
21    equipment, personal property, and other property, rights,
22    and easements acquired that are deemed necessary for the
23    operation and maintenance of the facility;
24        (2) financing costs with respect to bonds, notes, and
25    other evidences of indebtedness of the Agency;
26        (3) all origination, commitment, utilization,

 

 

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1    facility, placement, underwriting, syndication, credit
2    enhancement, and rating agency fees;
3        (4) engineering, design, procurement, consulting,
4    legal, accounting, title insurance, survey, appraisal,
5    escrow, trustee, collateral agency, interest rate hedging,
6    interest rate swap, capitalized interest, contingency, as
7    required by lenders, and other financing costs, and other
8    expenses for professional services; and
9        (5) the costs of plans, specifications, site study and
10    investigation, installation, surveys, other Agency costs
11    and estimates of costs, and other expenses necessary or
12    incidental to determining the feasibility of any project,
13    together with such other expenses as may be necessary or
14    incidental to the financing, insuring, acquisition, and
15    construction of a specific project and starting up,
16    commissioning, and placing that project in operation.
17    "Department" means the Department of Commerce and Economic
18Opportunity.
19    "Director" means the Director of the Illinois Power Agency.
20    "Demand-response" means measures that decrease peak
21electricity demand or shift demand from peak to off-peak
22periods.
23    "Energy efficiency" means measures that reduce the amount
24of electricity or natural gas required to achieve a given end
25use.
26    "Electric utility" has the same definition as found in

 

 

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1Section 16-102 of the Public Utilities Act.
2    "Facility" means an electric generating unit or a
3co-generating unit that produces electricity along with
4related equipment necessary to connect the facility to an
5electric transmission or distribution system.
6    "Governmental aggregator" means one or more units of local
7government that individually or collectively procure
8electricity to serve residential retail electrical loads
9located within its or their jurisdiction.
10    "Local government" means a unit of local government as
11defined in Article VII of Section 1 of the Illinois
12Constitution.
13    "Municipality" means a city, village, or incorporated
14town.
15    "Person" means any natural person, firm, partnership,
16corporation, either domestic or foreign, company, association,
17limited liability company, joint stock company, or association
18and includes any trustee, receiver, assignee, or personal
19representative thereof.
20    "Project" means the planning, bidding, and construction of
21a facility.
22    "Public utility" has the same definition as found in
23Section 3-105 of the Public Utilities Act.
24    "Real property" means any interest in land together with
25all structures, fixtures, and improvements thereon, including
26lands under water and riparian rights, any easements,

 

 

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

 

 

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

 

 

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1substantially interchangeable in use and distribution with
2conventional natural gas.
3    "Total resource cost test" or "TRC test" means a standard
4that is met if, for an investment in energy efficiency or
5demand-response measures, the benefit-cost ratio is greater
6than one. The benefit-cost ratio is the ratio of the net
7present value of the total benefits of the program to the net
8present value of the total costs as calculated over the
9lifetime of the measures. A total resource cost test compares
10the sum of avoided electric utility costs, representing the
11benefits that accrue to the system and the participant in the
12delivery of those efficiency measures, as well as other
13quantifiable societal benefits, including avoided natural gas
14utility costs, to the sum of all incremental costs of end-use
15measures that are implemented due to the program (including
16both utility and participant contributions), plus costs to
17administer, deliver, and evaluate each demand-side program, to
18quantify the net savings obtained by substituting the
19demand-side program for supply resources. In calculating
20avoided costs of power and energy that an electric utility
21would otherwise have had to acquire, reasonable estimates shall
22be included of financial costs likely to be imposed by future
23regulations and legislation on emissions of greenhouse gases.
24(Source: P.A. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09;
2595-1027, eff. 6-1-09; 96-33, eff. 7-10-09; 96-159, eff.
268-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10;

 

 

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109600SB3388ham001 and ham003.)
 
2    Section 7. If and only if Senate Bill 3388 of the 96th
3General Assembly (as amended by House Amendment Nos. 1, 2, and
43) becomes law, then the Illinois Procurement Code is amended
5by changing Section 1-10 as follows:
 
6    (30 ILCS 500/1-10)
7    Sec. 1-10. Application.
8    (a) This Code applies only to procurements for which
9contractors were first solicited on or after July 1, 1998. This
10Code shall not be construed to affect or impair any contract,
11or any provision of a contract, entered into based on a
12solicitation prior to the implementation date of this Code as
13described in Article 99, including but not limited to any
14covenant entered into with respect to any revenue bonds or
15similar instruments. All procurements for which contracts are
16solicited between the effective date of Articles 50 and 99 and
17July 1, 1998 shall be substantially in accordance with this
18Code and its intent.
19    (b) This Code shall apply regardless of the source of the
20funds with which the contracts are paid, including federal
21assistance moneys. This Code shall not apply to:
22        (1) Contracts between the State and its political
23    subdivisions or other governments, or between State
24    governmental bodies except as specifically provided in

 

 

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1    this Code.
2        (2) Grants, except for the filing requirements of
3    Section 20-80.
4        (3) Purchase of care.
5        (4) Hiring of an individual as employee and not as an
6    independent contractor, whether pursuant to an employment
7    code or policy or by contract directly with that
8    individual.
9        (5) Collective bargaining contracts.
10        (6) Purchase of real estate, except that notice of this
11    type of contract with a value of more than $25,000 must be
12    published in the Procurement Bulletin within 7 days after
13    the deed is recorded in the county of jurisdiction. The
14    notice shall identify the real estate purchased, the names
15    of all parties to the contract, the value of the contract,
16    and the effective date of the contract.
17        (7) Contracts necessary to prepare for anticipated
18    litigation, enforcement actions, or investigations,
19    provided that the chief legal counsel to the Governor shall
20    give his or her prior approval when the procuring agency is
21    one subject to the jurisdiction of the Governor, and
22    provided that the chief legal counsel of any other
23    procuring entity subject to this Code shall give his or her
24    prior approval when the procuring entity is not one subject
25    to the jurisdiction of the Governor.
26        (8) Contracts for services to Northern Illinois

 

 

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1    University by a person, acting as an independent
2    contractor, who is qualified by education, experience, and
3    technical ability and is selected by negotiation for the
4    purpose of providing non-credit educational service
5    activities or products by means of specialized programs
6    offered by the university.
7        (9) Procurement expenditures by the Illinois
8    Conservation Foundation when only private funds are used.
9        (10) Procurement expenditures by the Illinois Health
10    Information Exchange Authority involving private funds
11    from the Health Information Exchange Fund. "Private funds"
12    means gifts, donations, and private grants.
13    (c) This Code does not apply to the electric power
14procurement process provided for under Section 1-75 of the
15Illinois Power Agency Act and Section 16-111.5 of the Public
16Utilities Act.
17    (d) Except for Section 20-160 and Article 50 of this Code,
18and as expressly required by Section 9.1 of the Illinois
19Lottery Law, the provisions of this Code do not apply to the
20procurement process provided for under Section 9.1 of the
21Illinois Lottery Law.
22    (e) This Code does not apply to the process used by the
23Capital Development Board to retain a person or entity to
24assist the Capital Development Board with its duties related to
25the determination of costs of a clean coal SNG brownfield
26facility, as defined by Section 1-10 of the Illinois Power

 

 

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1Agency Act, as required in subsection (h-3) of Section 9-220 of
2the Public Utilities Act, including calculating the range of
3capital costs, the range of operating and maintenance costs, or
4the sequestration costs or monitoring the construction of clean
5coal SNG brownfield facility for the full duration of
6construction.
7    (f) This Code does not apply to the process used by the
8Illinois Power Agency to retain a mediator to mediate sourcing
9agreement disputes between gas utilities and the clean coal SNG
10brownfield facility, as defined in Section 1-10 of the Illinois
11Power Agency Act, as required under subsection (h-1) of Section
129-220 of the Public Utilities Act.
13    (g) This Code does not apply to the processes used by the
14Illinois Power Agency to retain a mediator to mediate contract
15disputes between gas utilities and the clean coal SNG facility
16located in Jefferson County and to retain an expert to assist
17in the review of contracts under subsection (h) of Section
189-220 of the Public Utilities Act. This Code does not apply to
19the process used by the Illinois Commerce Commission to retain
20an expert to assist in determining the actual incurred costs of
21the clean coal SNG facility and the reasonableness of those
22costs as required under subsection (h) of Section 9-220 of the
23Public Utilities Act.
24(Source: P.A. 95-481, eff. 8-28-07; 95-615, eff. 9-11-07;
2595-876, eff. 8-21-08; 96-840, eff. 12-23-09; 96-1331, eff.
267-27-10; 09600SB3388ham001 and ham003.)
 

 

 

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1    Section 10. If and only if Senate Bill 3388 of the 96th
2General Assembly (as amended by House Amendment Nos. 1, 2, and
33) becomes law, then the Public Utilities Act is amended by
4changing Sections 3-123 and 9-220 and by adding Sections 3-124,
53-125, and 3-126 as follows:
 
6    (220 ILCS 5/3-123)
7    Sec. 3-123. Clean coal SNG brownfield facility; sequester;
8SNG facility; sourcing agreement; substitute natural gas or
9SNG. As used in this Act:
10    "Clean coal SNG facility" shall have the same meaning as
11provided in Section 1-10 of the Illinois Power Agency Act.
12    "Clean coal SNG brownfield facility" shall have the same
13meaning as provided in Section 1-10 of the Illinois Power
14Agency Act.
15    "Sequester" shall have the same meaning as provided in
16Section 1-10 of the Illinois Power Agency Act.
17    "SNG facility" means a facility that produces substitute
18natural gas from feedstock that includes coal through a
19gasification process, including a clean coal facility, the
20clean coal SNG brownfield facility, and the clean coal SNG
21facility located in Jefferson County described in subsection
22(h) of Section 9-220 of this Act.
23    "Sourcing agreement" means an agreement between the owner
24of a clean coal SNG brownfield facility and the gas utility

 

 

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1that has the terms and conditions meeting the requirements of
2subsection (h-1) of Section 9-220 of this Act.
3    "Substitute natural gas" or "SNG" shall have the same
4meaning as provided in Section 1-10 of the Illinois Power
5Agency Act.
6(Source: 09600SB3388ham001.)
 
7    (220 ILCS 5/3-124 new)
8    Sec. 3-124. Adjusted final capitalized plant cost.
9"Adjusted final capitalized plant cost" means the final
10capitalized plant cost reduced by the following, without
11duplication and to the extent not already accounted for or
12reflected on the books of the facility: (i) any State of
13Illinois Financial Assistance, (ii) any U.S. Financial
14Assistance, and (iii) any quantifiable benefit from a U.S.
15Clean Coal Gasification Program received by the facility during
16a period equal to the shorter of (x) the life of such program
17or (y) the term of the agreement, such quantifiable benefit to
18be discounted at a rate of 14% per annum over such period.
 
19    (220 ILCS 5/3-125 new)
20    Sec. 3-125. Final capitalized plant cost. "Final
21capitalized plant cost" means the total capitalized asset cost
22of the plant of the clean coal SNG facility located in
23Jefferson County as reflected on the balance sheet of the
24facility at the time of the commercial production date, with

 

 

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1such capitalized cost to be accrued in accordance with
2generally accepted accounting principles, and includes,
3without limitation, the following items: major equipment, the
4SNG pipeline from the plant to the receiving pipeline, water
5lines, railroad improvements, access road improvements, all
6coal transportation assets, including the slurry line, slurry
7prep plant, carbon dioxide capture metering and compression,
8licensing fees, all costs incurred in the management planning,
9oversight and execution of the construction and start-up of the
10plant, and all fees and costs payable under engineering,
11procurement, and design contracts for the construct of the
12plant accrued as of the time of the commercial production date,
13but does not include capitalized financing costs including
14capitalized interest during construction and all fees
15associated with financing, coal reserve leasing costs,
16marketing, training, any and all costs payable under the
17contract miner agreement, the cost of coal mining equipment and
18similar costs, and any other costs, including general and
19administrative costs, not reasonably incurred in connection
20with the design, construction, testing, start-up, or
21commissioning of the plant in preparation for commercial
22production date.
 
23    (220 ILCS 5/3-126 new)
24    Sec. 3-126. Total capitalized asset cost. "Total
25capitalized asset cost" means the gross book value of the

 

 

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1plant, as determined in accordance with generally accepted
2accounting principles at the commercial production date.
 
3    (220 ILCS 5/9-220)  (from Ch. 111 2/3, par. 9-220)
4    Sec. 9-220. Rate changes based on changes in fuel costs.
5    (a) Notwithstanding the provisions of Section 9-201, the
6Commission may authorize the increase or decrease of rates and
7charges based upon changes in the cost of fuel used in the
8generation or production of electric power, changes in the cost
9of purchased power, or changes in the cost of purchased gas
10through the application of fuel adjustment clauses or purchased
11gas adjustment clauses. The Commission may also authorize the
12increase or decrease of rates and charges based upon
13expenditures or revenues resulting from the purchase or sale of
14emission allowances created under the federal Clean Air Act
15Amendments of 1990, through such fuel adjustment clauses, as a
16cost of fuel. For the purposes of this paragraph, cost of fuel
17used in the generation or production of electric power shall
18include the amount of any fees paid by the utility for the
19implementation and operation of a process for the
20desulfurization of the flue gas when burning high sulfur coal
21at any location within the State of Illinois irrespective of
22the attainment status designation of such location; but shall
23not include transportation costs of coal (i) except to the
24extent that for contracts entered into on and after the
25effective date of this amendatory Act of 1997, the cost of the

 

 

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1coal, including transportation costs, constitutes the lowest
2cost for adequate and reliable fuel supply reasonably available
3to the public utility in comparison to the cost, including
4transportation costs, of other adequate and reliable sources of
5fuel supply reasonably available to the public utility, or (ii)
6except as otherwise provided in the next 3 sentences of this
7paragraph. Such costs of fuel shall, when requested by a
8utility or at the conclusion of the utility's next general
9electric rate proceeding, whichever shall first occur, include
10transportation costs of coal purchased under existing coal
11purchase contracts. For purposes of this paragraph "existing
12coal purchase contracts" means contracts for the purchase of
13coal in effect on the effective date of this amendatory Act of
141991, as such contracts may thereafter be amended, but only to
15the extent that any such amendment does not increase the
16aggregate quantity of coal to be purchased under such contract.
17Nothing herein shall authorize an electric utility to recover
18through its fuel adjustment clause any amounts of
19transportation costs of coal that were included in the revenue
20requirement used to set base rates in its most recent general
21rate proceeding. Cost shall be based upon uniformly applied
22accounting principles. Annually, the Commission shall initiate
23public hearings to determine whether the clauses reflect actual
24costs of fuel, gas, power, or coal transportation purchased to
25determine whether such purchases were prudent, and to reconcile
26any amounts collected with the actual costs of fuel, power,

 

 

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1gas, or coal transportation prudently purchased. In each such
2proceeding, the burden of proof shall be upon the utility to
3establish the prudence of its cost of fuel, power, gas, or coal
4transportation purchases and costs. The Commission shall issue
5its final order in each such annual proceeding for an electric
6utility by December 31 of the year immediately following the
7year to which the proceeding pertains, provided, that the
8Commission shall issue its final order with respect to such
9annual proceeding for the years 1996 and earlier by December
1031, 1998.
11    (b) A public utility providing electric service, other than
12a public utility described in subsections (e) or (f) of this
13Section, may at any time during the mandatory transition period
14file with the Commission proposed tariff sheets that eliminate
15the public utility's fuel adjustment clause and adjust the
16public utility's base rate tariffs by the amount necessary for
17the base fuel component of the base rates to recover the public
18utility's average fuel and power supply costs per kilowatt-hour
19for the 2 most recent years for which the Commission has issued
20final orders in annual proceedings pursuant to subsection (a),
21where the average fuel and power supply costs per kilowatt-hour
22shall be calculated as the sum of the public utility's prudent
23and allowable fuel and power supply costs as found by the
24Commission in the 2 proceedings divided by the public utility's
25actual jurisdictional kilowatt-hour sales for those 2 years.
26Notwithstanding any contrary or inconsistent provisions in

 

 

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1Section 9-201 of this Act, in subsection (a) of this Section or
2in any rules or regulations promulgated by the Commission
3pursuant to subsection (g) of this Section, the Commission
4shall review and shall by order approve, or approve as
5modified, the proposed tariff sheets within 60 days after the
6date of the public utility's filing. The Commission may modify
7the public utility's proposed tariff sheets only to the extent
8the Commission finds necessary to achieve conformance to the
9requirements of this subsection (b). During the 5 years
10following the date of the Commission's order, but in any event
11no earlier than January 1, 2007, a public utility whose fuel
12adjustment clause has been eliminated pursuant to this
13subsection shall not file proposed tariff sheets seeking, or
14otherwise petition the Commission for, reinstatement of a fuel
15adjustment clause.
16    (c) Notwithstanding any contrary or inconsistent
17provisions in Section 9-201 of this Act, in subsection (a) of
18this Section or in any rules or regulations promulgated by the
19Commission pursuant to subsection (g) of this Section, a public
20utility providing electric service, other than a public utility
21described in subsection (e) or (f) of this Section, may at any
22time during the mandatory transition period file with the
23Commission proposed tariff sheets that establish the rate per
24kilowatt-hour to be applied pursuant to the public utility's
25fuel adjustment clause at the average value for such rate
26during the preceding 24 months, provided that such average rate

 

 

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1results in a credit to customers' bills, without making any
2revisions to the public utility's base rate tariffs. The
3proposed tariff sheets shall establish the fuel adjustment rate
4for a specific time period of at least 3 years but not more
5than 5 years, provided that the terms and conditions for any
6reinstatement earlier than 5 years shall be set forth in the
7proposed tariff sheets and subject to modification or approval
8by the Commission. The Commission shall review and shall by
9order approve the proposed tariff sheets if it finds that the
10requirements of this subsection are met. The Commission shall
11not conduct the annual hearings specified in the last 3
12sentences of subsection (a) of this Section for the utility for
13the period that the factor established pursuant to this
14subsection is in effect.
15    (d) A public utility providing electric service, or a
16public utility providing gas service may file with the
17Commission proposed tariff sheets that eliminate the public
18utility's fuel or purchased gas adjustment clause and adjust
19the public utility's base rate tariffs to provide for recovery
20of power supply costs or gas supply costs that would have been
21recovered through such clause; provided, that the provisions of
22this subsection (d) shall not be available to a public utility
23described in subsections (e) or (f) of this Section to
24eliminate its fuel adjustment clause. Notwithstanding any
25contrary or inconsistent provisions in Section 9-201 of this
26Act, in subsection (a) of this Section, or in any rules or

 

 

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1regulations promulgated by the Commission pursuant to
2subsection (g) of this Section, the Commission shall review and
3shall by order approve, or approve as modified in the
4Commission's order, the proposed tariff sheets within 240 days
5after the date of the public utility's filing. The Commission's
6order shall approve rates and charges that the Commission,
7based on information in the public utility's filing or on the
8record if a hearing is held by the Commission, finds will
9recover the reasonable, prudent and necessary jurisdictional
10power supply costs or gas supply costs incurred or to be
11incurred by the public utility during a 12 month period found
12by the Commission to be appropriate for these purposes,
13provided, that such period shall be either (i) a 12 month
14historical period occurring during the 15 months ending on the
15date of the public utility's filing, or (ii) a 12 month future
16period ending no later than 15 months following the date of the
17public utility's filing. The public utility shall include with
18its tariff filing information showing both (1) its actual
19jurisdictional power supply costs or gas supply costs for a 12
20month historical period conforming to (i) above and (2) its
21projected jurisdictional power supply costs or gas supply costs
22for a future 12 month period conforming to (ii) above. If the
23Commission's order requires modifications in the tariff sheets
24filed by the public utility, the public utility shall have 7
25days following the date of the order to notify the Commission
26whether the public utility will implement the modified tariffs

 

 

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1or elect to continue its fuel or purchased gas adjustment
2clause in force as though no order had been entered. The
3Commission's order shall provide for any reconciliation of
4power supply costs or gas supply costs, as the case may be, and
5associated revenues through the date that the public utility's
6fuel or purchased gas adjustment clause is eliminated. During
7the 5 years following the date of the Commission's order, a
8public utility whose fuel or purchased gas adjustment clause
9has been eliminated pursuant to this subsection shall not file
10proposed tariff sheets seeking, or otherwise petition the
11Commission for, reinstatement or adoption of a fuel or
12purchased gas adjustment clause. Nothing in this subsection (d)
13shall be construed as limiting the Commission's authority to
14eliminate a public utility's fuel adjustment clause or
15purchased gas adjustment clause in accordance with any other
16applicable provisions of this Act.
17    (e) Notwithstanding any contrary or inconsistent
18provisions in Section 9-201 of this Act, in subsection (a) of
19this Section, or in any rules promulgated by the Commission
20pursuant to subsection (g) of this Section, a public utility
21providing electric service to more than 1,000,000 customers in
22this State may, within the first 6 months after the effective
23date of this amendatory Act of 1997, file with the Commission
24proposed tariff sheets that eliminate, effective January 1,
251997, the public utility's fuel adjustment clause without
26adjusting its base rates, and such tariff sheets shall be

 

 

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1effective upon filing. To the extent the application of the
2fuel adjustment clause had resulted in net charges to customers
3after January 1, 1997, the utility shall also file a tariff
4sheet that provides for a refund stated on a per kilowatt-hour
5basis of such charges over a period not to exceed 6 months;
6provided however, that such refund shall not include the
7proportional amounts of taxes paid under the Use Tax Act,
8Service Use Tax Act, Service Occupation Tax Act, and Retailers'
9Occupation Tax Act on fuel used in generation. The Commission
10shall issue an order within 45 days after the date of the
11public utility's filing approving or approving as modified such
12tariff sheet. If the fuel adjustment clause is eliminated
13pursuant to this subsection, the Commission shall not conduct
14the annual hearings specified in the last 3 sentences of
15subsection (a) of this Section for the utility for any period
16after December 31, 1996 and prior to any reinstatement of such
17clause. A public utility whose fuel adjustment clause has been
18eliminated pursuant to this subsection shall not file a
19proposed tariff sheet seeking, or otherwise petition the
20Commission for, reinstatement of the fuel adjustment clause
21prior to January 1, 2007.
22    (f) Notwithstanding any contrary or inconsistent
23provisions in Section 9-201 of this Act, in subsection (a) of
24this Section, or in any rules or regulations promulgated by the
25Commission pursuant to subsection (g) of this Section, a public
26utility providing electric service to more than 500,000

 

 

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1customers but fewer than 1,000,000 customers in this State may,
2within the first 6 months after the effective date of this
3amendatory Act of 1997, file with the Commission proposed
4tariff sheets that eliminate, effective January 1, 1997, the
5public utility's fuel adjustment clause and adjust its base
6rates by the amount necessary for the base fuel component of
7the base rates to recover 91% of the public utility's average
8fuel and power supply costs for the 2 most recent years for
9which the Commission, as of January 1, 1997, has issued final
10orders in annual proceedings pursuant to subsection (a), where
11the average fuel and power supply costs per kilowatt-hour shall
12be calculated as the sum of the public utility's prudent and
13allowable fuel and power supply costs as found by the
14Commission in the 2 proceedings divided by the public utility's
15actual jurisdictional kilowatt-hour sales for those 2 years,
16provided, that such tariff sheets shall be effective upon
17filing. To the extent the application of the fuel adjustment
18clause had resulted in net charges to customers after January
191, 1997, the utility shall also file a tariff sheet that
20provides for a refund stated on a per kilowatt-hour basis of
21such charges over a period not to exceed 6 months. Provided
22however, that such refund shall not include the proportional
23amounts of taxes paid under the Use Tax Act, Service Use Tax
24Act, Service Occupation Tax Act, and Retailers' Occupation Tax
25Act on fuel used in generation. The Commission shall issue an
26order within 45 days after the date of the public utility's

 

 

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1filing approving or approving as modified such tariff sheet. If
2the fuel adjustment clause is eliminated pursuant to this
3subsection, the Commission shall not conduct the annual
4hearings specified in the last 3 sentences of subsection (a) of
5this Section for the utility for any period after December 31,
61996 and prior to any reinstatement of such clause. A public
7utility whose fuel adjustment clause has been eliminated
8pursuant to this subsection shall not file a proposed tariff
9sheet seeking, or otherwise petition the Commission for,
10reinstatement of the fuel adjustment clause prior to January 1,
112007.
12    (g) The Commission shall have authority to promulgate rules
13and regulations to carry out the provisions of this Section.
14    (h) Any Illinois gas utility may enter into a contract on
15or before March 31, 2011 for up to 10 years of supply with any
16company for the purchase of substitute natural gas (SNG)
17produced from coal through the gasification process if the
18company has commenced construction of a coal gasification
19facility by July 1, 2012 in Jefferson County and commencement
20of construction shall mean that material physical site work has
21occurred, such as site clearing and excavation, water runoff
22prevention, water retention reservoir preparation, or
23foundation development. The contract shall contain the
24following provisions: (i) at least 90% of feedstock the only
25coal to be used in the gasification process shall be coal with
26a has high volatile bituminous rank and greater than 1.7 pounds

 

 

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1of sulfur per million Btu content; (ii) at the time the
2contract term commences, the price per million Btu may not
3exceed $7.95 in 2008 dollars, adjusted annually based on the
4change in the Annual Consumer Price Index for All Urban
5Consumers for the Midwest Region as published in April by the
6United States Department of Labor, Bureau of Labor Statistics
7(or a suitable Consumer Price Index calculation if this
8Consumer Price Index is not available) for the previous
9calendar year; provided that the price per million Btu shall
10not exceed $9.95 at any time during the contract; (iii) the
11utility's aggregate long-term supply contracts for the
12purchase of SNG do does not exceed 25% of the annual system
13supply requirements of the utility as of 2008 and the quantity
14of SNG supplied to a utility may not exceed 16 million MMBtus;
15and (iv) the contract costs pursuant to subsection (h-10) of
16this Section shall not include any lobbying expenses,
17charitable contributions, advertising, organizational
18memberships, carbon dioxide pipeline or sequestration
19expenses, or marketing expenses per year.
20    Any gas utility that is providing service to more than
21150,000 customers on the effective date of this amendatory Act
22of the 96th General Assembly shall either elect to enter into a
23contract on or before March 31, 2011 for 10 years of SNG supply
24with the owner of a clean coal SNG facility located in
25Jefferson County or to file biennial rate proceedings before
26the Commission in the years 2011, 2013, and 2015, with such

 

 

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1filings made no later than August 1 of the years 2011, 2013 and
22015 consistent with all requirements of 83 Ill. Adm. Code 255
3and 285 as though the gas utility were filing for an increase
4in its rates, without regard to whether such filing would
5produce an increase, a decrease, or no change in the gas
6utility's rates, and the Commission shall review the gas
7utility's filing and shall issue its order in accordance with
8the provisions of Section 9-201 of this Act.
9    Within 7 days after the effective date of this amendatory
10Act of the 96th General Assembly, the owner of the clean coal
11SNG facility in Jefferson County shall submit to the Illinois
12Power Agency and each gas utility that is providing service to
13more than 150,000 customers on the effective date of this
14amendatory Act of the 96th General Assembly a copy of a draft
15contract. Within 30 days after the receipt of the draft
16contract, each such gas utility shall provide the Illinois
17Power Agency and the owner of the clean coal SNG facility
18located in Jefferson County with its comments and recommended
19revisions to the draft contract. Within 7 days after the
20receipt of the gas utility's comments and recommended
21revisions, the owner of the facility shall submit its
22responsive comments and a further revised draft of the contract
23to the Illinois Power Agency. The Illinois Power Agency shall
24review the draft contract and comments.
25    During its review of the draft contract, the Illinois Power
26Agency shall:

 

 

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1        (1) review and confirm in writing that the terms stated
2    in this subsection (h) are incorporated in the SNG
3    contract;
4        (2) review the SNG pricing formula included in the
5    contract and approve that formula if the Illinois Power
6    Agency determines that the formula, at the time the
7    contract term commences: (A) starts with a price of $6.50
8    per MMBtu adjusted by the adjusted final capitalized plant
9    cost; (B) takes into account budgeted miscellaneous net
10    revenue after cost allowance, including sale of SNG
11    produced by the clean coal SNG facility located in
12    Jefferson County above the nameplate capacity of the
13    facility and other by-products produced by the facility, as
14    approved by the Illinois Power Agency; (C) does not include
15    carbon dioxide transportation or sequestration expenses;
16    and (D) includes all provisions required under this
17    subsection (h); If the Illinois Power Agency does not
18    approve of the SNG pricing formula, then the Illinois Power
19    Agency shall modify the formula to ensure that it meets the
20    requirements of this subsection (h);
21        (3) review and approve the amount of budgeted
22    miscellaneous net revenue after cost allowance, including
23    sale of SNG produced by the clean coal SNG facility located
24    in Jefferson County above the nameplate capacity of the
25    facility and other by-products produced by the facility, to
26    be included in the pricing formula. The Illinois Power

 

 

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1    Agency shall approve the amount of budgeted miscellaneous
2    net revenue to be included in the pricing formula if it
3    determines the budgeted amount to be reasonable and
4    accurate; and
5        (4) allocate the nameplate capacity of the clean coal
6    SNG facility located in Jefferson County by total therms
7    sold to ultimate customers by each gas utility in 2008;
8    provided, however, no utility shall be required to purchase
9    more than 42% of the projected annual output of the
10    facility. Additionally, the Illinois Power Agency shall
11    further adjust the allocation only as required to take into
12    account (A) adverse consolidation, derivative, or lease
13    impacts to the balance sheet or income statement of any gas
14    utility or (B) the physical capacity of the gas utility to
15    accept SNG.
16    If the parties to the contract do not agree on the terms
17therein, then the Illinois Power Agency shall retain an
18independent mediator to mediate the dispute between the
19parties. If the parties are in agreement on the terms of the
20contract, then the Illinois Power Agency shall approve the
21contract. If after mediation the parties have failed to come to
22agreement, then the Illinois Power Agency shall revise the
23draft contract as necessary to confirm that the contract
24contains only terms that are reasonable and equitable. The
25Illinois Power Agency may, in its discretion, retain an
26independent, qualified, and experienced expert to assist in its

 

 

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1obligations under this subsection (h). The Illinois Power
2Agency shall adopt and make public policies detailing the
3processes for retaining a mediator and an expert under this
4subsection (h). Any mediator or expert retained under this
5subsection (h) shall be retained no later than 60 days after
6the effective date of this amendatory Act of the 96th General
7Assembly.
8    The Illinois Power Agency shall complete all of its
9responsibilities under this subsection (h) by March 15, 2011.
10The clean coal SNG facility located in Jefferson County shall
11pay a reasonable fee as required by the Illinois Power Agency
12for its services under this subsection (h) and shall pay the
13mediator's and expert's reasonable fees, if any. A gas utility
14and its customers shall have no obligation to reimburse the
15clean coal SNG facility located in Jefferson County or the
16Illinois Power Agency of any such costs.
17    Within 30 days after commercial production of SNG has
18begun, the Commission shall initiate a review to determine: (1)
19whether the final capitalized plant cost of the clean coal SNG
20facility located in Jefferson County reflects actual incurred
21costs and (2) whether such incurred costs were reasonable. In
22determining the actual incurred costs included in the final
23capitalized plant cost and the reasonableness of those costs,
24the Commission may in its discretion retain independent,
25qualified, and experienced experts to assist in its
26determination. The expert shall not own or control any direct

 

 

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1or indirect interest in the clean coal SNG facility located in
2Jefferson County and shall have no contractual relationship
3with the clean coal SNG facility located in Jefferson County.
4If an expert is retained by the Commission, then the clean coal
5SNG facility located in Jefferson County shall pay the expert's
6reasonable fees. The fees shall not be passed on to a utility
7or its customers. The Commission shall adopt and make public a
8policy detailing the process for retaining experts under this
9subsection (h).
10    Within 30 days after completion of its review, the
11Commission shall initiate a formal proceeding on the final
12capitalized plant cost of the clean coal SNG facility located
13in Jefferson County at which comments and testimony may be
14submitted by any interested parties and the public. If the
15Commission finds that the final capitalized plant cost includes
16costs that were not actually incurred or costs that were
17unreasonably incurred, then the Commission shall disallow the
18amount of non-incurred or unreasonable costs from the SNG price
19under contracts entered into under this subsection (h). If the
20Commission disallows any costs, then the Commission shall
21adjust the SNG price using the price formula in the contract
22approved by the Illinois Power Agency under this subsection (h)
23to reflect the disallowed costs and shall enter an order
24specifying the revised price. In addition, the Commission's
25order shall direct the clean coal SNG facility located in
26Jefferson County to issue refunds of such sums as shall

 

 

SB1927 Enrolled- 32 -LRB096 11262 DRJ 21678 b

1represent the difference between actual gross revenues and the
2gross revenue that would have been obtained based upon the same
3volume, from the price revised by the Commission. Any refund
4shall include interest calculated at a rate determined by the
5Commission and shall be returned according to procedures
6prescribed by the Commission.
7    Nothing in this subsection (h) shall preclude any party
8affected by a decision of the Commission under this subsection
9(h) from seeking judicial review of the Commission's decision.
10    (h-1) Any Illinois gas utility may enter into a sourcing
11agreement for up to 30 years of supply with the clean coal SNG
12brownfield facility if the clean coal SNG brownfield facility
13has commenced construction. Any gas utility that is providing
14service to more than 150,000 customers on the effective date of
15this amendatory Act of the 96th General Assembly shall either
16elect to file biennial rate proceedings before the Commission
17in the years 2011, 2013, and 2015 or enter into a sourcing
18agreement or sourcing agreements with a clean coal SNG
19brownfield facility for 30 years for either (i) 43,500,000,000
20cubic feet per year times a percentage calculated by dividing
21100 by the number of utilities entering into sourcing
22agreements with the clean coal SNG brownfield facility or (ii)
23such lesser amount as may be available from the clean coal SNG
24brownfield facility.
25    Provided, however, that the Illinois Power Agency may
26allocate the purchase obligations more proportionately based

 

 

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1upon total therms sold to ultimate customers, if it is
2demonstrated with certainty that such alternative allocation
3will not result in adverse consolidation, derivative, or lease
4impacts to the balance sheet or income statement of any
5purchasing utility. In any event, no utility shall be required
6to purchase more than 42% of the projected annual output of the
7clean coal SNG brownfield facility, with the remainder of such
8utility's obligation to be divided proportionately between the
9other utilities.
10    A gas utility electing to file biennial rate proceedings
11before the Commission must file a notice of its election with
12the Commission within 60 days after the effective date of this
13amendatory Act of the 96th General Assembly or its right to
14make the election is irrevocably waived. A gas utility electing
15to file biennial rate proceedings shall make such filings no
16later than August 1 of the years 2011, 2013, and 2015,
17consistent with all requirements of 83 Ill. Adm. Code 255 and
18285 as though the gas utility were filing for an increase in
19its rates, without regard to whether such filing would produce
20an increase, a decrease, or no change in the gas utility's
21rates, and the Commission shall review the gas utility's filing
22and shall issue its order in accordance with the provisions of
23Section 9-201 of this Act.
24    Within 15 days after the effective date of this amendatory
25Act of the 96th General Assembly, the owner of the clean coal
26SNG brownfield facility shall submit to the Illinois Power

 

 

SB1927 Enrolled- 34 -LRB096 11262 DRJ 21678 b

1Agency and each gas utility that is providing service to more
2than 150,000 customers on the effective date of this amendatory
3Act of the 96th General Assembly a copy of a draft sourcing
4agreement. Within 45 days after receipt of the draft sourcing
5agreement, each such gas utility shall provide the Illinois
6Power Agency and the owner of a clean coal SNG brownfield
7facility with its comments and recommended revisions to the
8draft sourcing agreement. Within 15 days after the receipt of
9the gas utility's comments and recommended revisions, the owner
10of the clean coal SNG brownfield facility shall submit its
11responsive comments and a further revised draft of the sourcing
12agreement to the Illinois Power Agency. The Illinois Power
13Agency shall review the draft sourcing agreement and comments.
14    If the parties to the sourcing agreement do not agree on
15the terms therein, then the Illinois Power Agency shall retain
16an independent mediator to mediate the dispute between the
17parties. If the parties are in agreement on the terms of the
18sourcing agreement, the Illinois Power Agency shall approve the
19final draft sourcing agreement. If after mediation the parties
20have failed to come to agreement, then the Illinois Power
21Agency shall revise the draft sourcing agreement as necessary
22to confirm that the final draft sourcing agreement contains
23only terms that are reasonable and equitable. The Illinois
24Power Agency shall adopt and make public a policy detailing the
25process for retaining a mediator under this subsection (h-1).
26Any mediator retained to assist with mediating disputes between

 

 

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1the parties regarding the sourcing agreement shall be retained
2no later than 60 days after the effective date of this
3amendatory Act of the 96th General Assembly.
4    Upon approval of a final draft agreement, the Illinois
5Power Agency shall submit the final draft agreement to the
6Capital Development Board and the Commission no later than 90
7days after the effective date of this amendatory Act of the
896th General Assembly. The gas utility and the clean coal SNG
9brownfield facility shall pay a reasonable fee as required by
10the Illinois Power Agency for its services under this
11subsection (h-1) and shall pay the mediator's reasonable fees,
12if any. The Illinois Power Agency shall adopt and make public a
13policy detailing the process for retaining a mediator under
14this Section.
15    The sourcing agreement between a gas utility and the clean
16coal SNG brownfield facility shall contain the following
17provisions:
18        (1) Any and all coal used in the gasification process
19    must be coal that has high volatile bituminous rank and
20    greater than 1.7 pounds of sulfur per million Btu content.
21        (2) Coal and petroleum coke are feedstocks for the
22    gasification process, with coal comprising at least 50% of
23    the total feedstock over the term of the sourcing agreement
24    and with the feedstocks to be procured in accordance with
25    requirements of Section 1-78 of the Illinois Power Agency
26    Act.

 

 

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1        (3) The sourcing agreement once entered into
2    terminates no more than 30 years after the commencement of
3    the commercial production of SNG at the clean coal SNG
4    brownfield facility.
5        (4) The clean coal SNG brownfield facility guarantees a
6    minimum of $100,000,000 in consumer savings, calculated in
7    real 2010 dollars at the conclusion of the term of the
8    sourcing agreement by comparing the delivered SNG price to
9    the Chicago City-gate price on a weighted daily basis for
10    each day over the entire term of the sourcing agreement, to
11    be provided in accordance with subsection (h-2) of this
12    Section.
13        (5) Prior to the clean coal SNG brownfield facility
14    issuing a notice to proceed to construction, the clean coal
15    SNG brownfield facility shall establish a consumer
16    protection reserve account for the benefit of the customers
17    of the utilities that have entered into sourcing agreements
18    with the clean coal SNG brownfield facility pursuant to
19    this subsection (h-1), with cash principal in the amount of
20    $150,000,000. This cash principal shall only be
21    recoverable through the consumer protection reserve
22    account and not as a cost to be recovered in the delivered
23    SNG price pursuant to subsection (h-3) of this Section. The
24    consumer protection reserve account shall be maintained
25    and administered by an independent trustee that is mutually
26    agreed upon by the clean coal SNG brownfield facility, the

 

 

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

 

 

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1    subsection (h-3) of this Section; (D) certain taxes and
2    fees imposed by the federal government, the State, or any
3    unit of local government as provided in paragraph (6) of
4    subsection (h-3) of this Section; and (E) the credit, if
5    any, from the consumer protection reserve account pursuant
6    to subsection (h-2) of this Section. The delivered SNG
7    price per million Btu shall proportionately reflect these
8    elements over the term of the sourcing agreement.
9        (9) A formula to translate the recoverable costs and
10    charges under subsection (h-3) of this Section into the
11    delivered SNG price per million btu.
12        (10) Title to the SNG shall pass at a
13    mutually-agreeable point in Illinois, and may provide
14    that, rather than the utility taking title to the SNG, a
15    mutually-agreed upon third-party gas marketer pursuant to
16    a contract approved by the Illinois Power Agency or its
17    designee, may take title to the SNG pursuant to an
18    agreement between the utility, the owner of the clean coal
19    SNG brownfield facility, and the third-party gas marketer.
20        (11) A utility may exit the sourcing agreement without
21    penalty if the clean coal SNG brownfield facility does not
22    commence construction by July 1, 2014.
23        (12) A utility is responsible to pay only the
24    Commission determined unit price cost of SNG that is
25    purchased by the utility. Nothing in the sourcing agreement
26    will obligate a utility to invest capital in a clean coal

 

 

SB1927 Enrolled- 39 -LRB096 11262 DRJ 21678 b

1    SNG brownfield facility.
2        (13) The quality of SNG must, at a minimum, be
3    equivalent to the equality required for an interstate
4    pipeline gas before a utility is required to accept and pay
5    for SNG gas.
6        (14) Nothing in the sourcing agreement will require a
7    utility to construct any facilities to accept delivery of
8    SNG. Provided, however, if a utility is required by law or
9    otherwise elects to connect the clean coal SNG brownfield
10    facility to an interstate pipeline, then the utility shall
11    be entitled to recover pursuant to its tariffs all just and
12    reasonable costs that are prudently incurred. Any costs
13    incurred by the utility to receive, deliver, manage, or
14    otherwise accommodate purchases under the SNG sourcing
15    agreement will be fully recoverable through a utility's
16    purchased gas adjustment clause rider mechanism.
17        (15) Remedies for the clean coal SNG brownfield
18    facility's failure to deliver a designated amount for a
19    designated period.
20    (h-2) Consumer protection reserve account. The clean coal
21SNG brownfield facility shall guarantee a minimum of
22$100,000,000 in consumer savings, calculated in real 2010
23dollars at the conclusion of the term of the sourcing agreement
24by comparing the delivered SNG price to the Chicago City-gate
25price on a weighted daily basis for each day over the entire
26term of the sourcing agreement. Prior to the clean coal SNG

 

 

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

 

 

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1        is greater than the Chicago City-gate price, the
2        consumer protection reserve account shall be used to
3        provide a credit to reduce the SNG price by an amount
4        equal to the difference between the monthly delivered
5        SNG price and the Chicago City-gate price; and
6            (B) to the extent the monthly delivered SNG price
7        is less than or equal to the Chicago City-gate price,
8        the utility shall credit the difference between the
9        monthly delivered SNG price and the monthly Chicago
10        City-gate price, if any, to the consumer protection
11        reserve account. Such credit issued pursuant to this
12        paragraph (B) shall be deemed prudent and reasonable
13        and not subject to a Commission prudence review;
14        (3) After 2 years of operation of the facility, and
15    monthly, on an on-going basis, thereafter:
16            (A) to the extent that the monthly delivered SNG
17        price is less than or equal to the Chicago City-gate
18        price, calculated using the weighted average of the
19        daily Chicago City-gate price on a daily basis over the
20        entire month, the utility shall credit the difference,
21        if any, to the consumer protection reserve account.
22        Such credit issued pursuant to this subparagraph (A)
23        shall be deemed prudent and reasonable and not subject
24        to a Commission prudence review;
25            (B) any amounts in the consumer protection reserve
26        account in excess of $100,000,000 shall be distributed

 

 

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1        to the clean coal SNG brownfield facility; provided,
2        however, that under no circumstances shall the total
3        cumulative amount distributed to the clean coal SNG
4        brownfield facility under this subparagraph (B) exceed
5        $150,000,000;
6            (C) to the extent the monthly delivered SNG price
7        is greater than the Chicago City-gate price, after
8        distributing the amounts pursuant to subparagraph (B)
9        of this paragraph (3), if any, the consumer protection
10        reserve account shall be used to provide a credit to
11        reduce the SNG price by an amount equal to the
12        difference between the monthly delivered SNG price and
13        the Chicago City-gate price;
14            (D) if retail customers have realized net consumer
15        savings, calculated by comparing the delivered SNG
16        price to the weighted average of the daily Chicago
17        City-gate price on a daily basis over the entire term
18        of the sourcing agreement to date, then after
19        distributing the amounts pursuant to subparagraphs (B)
20        and (C) of this paragraph (3), 50% of any additional
21        amounts in the consumer protection reserve account in
22        excess of $100,000,000 shall be distributed to the
23        clean coal SNG brownfield facility, with the remaining
24        50% of any such additional amounts being credited to
25        retail customers; provided, however, that if retail
26        customers have not realized such net consumer savings,

 

 

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1        no such distribution shall be made to the clean coal
2        SNG brownfield facility, and 100% of such additional
3        amounts shall be credited to the retail customers to
4        the extent the consumer protection reserve account
5        exceeds $100,000,000.
6        (4) 50% of all additional net revenue, defined as
7    miscellaneous net revenue after cost allowance for costs
8    associated with additional net revenue that are not
9    otherwise recoverable pursuant to subsection (h-3) of this
10    Section, including net revenue from sales of substitute
11    natural gas derived from the facility above the nameplate
12    capacity of the facility and other by-products produced by
13    the facility, shall be credited to the consumer protection
14    reserve account.
15        (5) At the conclusion of the term of the sourcing
16    agreement, to the extent retail customers have not saved
17    the minimum of $100,000,000 in consumer savings as
18    guaranteed in this subsection (h-2), amounts in the
19    consumer protection reserve account shall be credited to
20    retail customers to the extent the retail customers have
21    saved the minimum of $100,000,000; 50% of any additional
22    amounts in the consumer protection reserve account shall be
23    distributed to the company, and the remaining 50% shall be
24    distributed to retail customers.
25        (6) If, at the conclusion of the term of the sourcing
26    agreement, the customers have not saved the minimum

 

 

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1    $100,000,000 in savings as guaranteed in this subsection
2    (h-2) and the consumer protection reserve account has been
3    depleted, then the clean coal SNG brownfield facility shall
4    be liable for any remaining amount owed to the retail
5    customers to the extent that the customers are provided
6    with the $100,000,000 in savings as guaranteed in this
7    subsection (h-2). The retail customers shall have first
8    priority in recovering that debt above any creditors,
9    except the original senior secured lender to the extent
10    that the original senior secured lender has any senior
11    secured debt outstanding, including any clean coal SNG
12    brownfield facility parent companies or affiliates.
13        (7) The clean coal SNG brownfield facility, the
14    utilities, and the trustee shall work together to take
15    commercially reasonable steps to minimize the tax impact of
16    these transactions, while preserving the consumer
17    benefits.
18        (8) The clean coal SNG brownfield facility shall each
19    month, starting in the facility's first year of commercial
20    operation, file with the Commission, in such form as the
21    Commission shall require, a report as to the consumer
22    protection reserve account. The monthly report must
23    contain the following information:
24            (A) the extent the monthly delivered SNG price is
25        greater than, less than, or equal to the Chicago
26        City-gate price;

 

 

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

 

 

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1    shall be preserved in the office of the Commission. The
2    Commission shall publish an annual summary of the reports
3    prior to February 1 of the following year. The annual
4    summary shall be made available to the public on the
5    Commission's website and shall be submitted to the General
6    Assembly.
7        Any facility that fails to file a report required under
8    this paragraph (8) to the Commission within the time
9    specified or to make specific answer to any question
10    propounded by the Commission within 30 days from the time
11    it is lawfully required to do so, or within such further
12    time not to exceed 90 days as may in its discretion be
13    allowed by the Commission, shall pay a penalty of $500 to
14    the Commission for each day it is in default.
15        Any person who willfully makes any false report to the
16    Commission or to any member, officer, or employee thereof,
17    any person who willfully in a report withholds or fails to
18    provide material information to which the Commission is
19    entitled under this paragraph (8) and which information is
20    either required to be filed by statute, rule, regulation,
21    order, or decision of the Commission or has been requested
22    by the Commission, and any person who willfully aids or
23    abets such person shall be guilty of a Class A misdemeanor.
24    (h-3) Recoverable costs and revenue by the clean coal SNG
25brownfield facility.
26        (1) A capital recovery charge approved by the

 

 

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1    Commission shall be recoverable by the clean coal SNG
2    brownfield facility under a sourcing agreement. The
3    capital recovery charge shall be comprised of capital costs
4    and a reasonable rate of return. "Capital costs" means
5    costs to be incurred in connection with the construction
6    and development of a facility, as defined Section 1-10 of
7    the Illinois Power Agency Act, and such other costs as the
8    Capital Development Board deems appropriate to be
9    recovered in the capital recovery charge.
10            (A) Capital costs. The Capital Development Board
11        shall calculate a range of capital costs that it
12        believes would be reasonable for the clean coal SNG
13        brownfield facility to recover under the sourcing
14        agreement. In making this determination, the Capital
15        Development Board shall review the final draft of the
16        sourcing agreement and the rate of return approved by
17        the Commission. In addition, the Capital development
18        Board may: (i) review the facility cost report, if any,
19        of the clean coal SNG brownfield facility; (ii) consult
20        as much as it deems necessary with the clean coal SNG
21        brownfield facility; and (iii) conduct whatever
22        research and investigation it deems necessary.
23            The Capital Development Board shall retain an
24        engineering expert to assist in determining both the
25        range of capital costs and the range of operations and
26        maintenance costs that it believes would be reasonable

 

 

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1        for the clean coal SNG brownfield facility to recover
2        under the sourcing agreement. Provided, however, that
3        such expert shall: (i) not have been involved in the
4        clean coal SNG brownfield facility's facility cost
5        report, if any, (ii) not own or control any direct or
6        indirect interest in the initial clean coal facility;
7        and (iii) have no contractual relationship with the
8        clean coal SNG brownfield facility. In order to qualify
9        as an independent expert, a person or company must
10        have:
11                (i) direct previous experience conducting
12            front-end engineering and design studies for
13            large-scale energy facilities and administering
14            large-scale energy operations and maintenance
15            contracts, which may be particularized to the
16            specific type of financing associated with the
17            clean coal SNG brownfield facility;
18                (ii) an advanced degree in economics,
19            mathematics, engineering, or a related area of
20            study;
21                (iii) ten years of experience in the energy
22            sector, including construction and risk management
23            experience;
24                (iv) expertise in assisting companies with
25            obtaining financing for large-scale energy
26            projects, which may be particularized to the

 

 

SB1927 Enrolled- 49 -LRB096 11262 DRJ 21678 b

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

 

 

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

 

 

SB1927 Enrolled- 51 -LRB096 11262 DRJ 21678 b

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

 

 

SB1927 Enrolled- 52 -LRB096 11262 DRJ 21678 b

1        Power Agency, an opportunity to be heard.
2            In determining the return on equity, the
3        Commission shall select a commercially reasonable
4        return on equity taking into account the return on
5        equity being received by developers of similar
6        facilities in or outside of Illinois, the need to
7        balance an incentive for clean-coal technology with
8        the need to protect ratepayers from high gas prices,
9        the risks being borne by the clean coal SNG brownfield
10        facility in the final draft sourcing agreement, and any
11        other information that the Commission may deem
12        relevant. The Commission may establish a return on
13        equity that varies with the amount of savings, if any,
14        to customers during the term of the sourcing agreement,
15        comparing the delivered SNG price to a daily weighted
16        average price of natural gas, based upon an index. The
17        Illinois Power Agency shall recommend a return on
18        equity to the Commission using the same criteria.
19        Within 60 days after receiving the final draft sourcing
20        agreement from the Illinois Power Agency, the
21        Commission shall approve the rate of return for the
22        clean coal brownfield facility. Within 30 days after
23        obtaining debt financing for the clean coal SNG
24        brownfield facility, the clean coal SNG brownfield
25        facility shall file a notice with the Commission
26        identifying the actual cost of debt.

 

 

SB1927 Enrolled- 53 -LRB096 11262 DRJ 21678 b

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

 

 

SB1927 Enrolled- 54 -LRB096 11262 DRJ 21678 b

1    Agency shall cooperate with the Capital Development Board
2    in any investigation it deems necessary. The Capital
3    Development Board shall make its final determination of the
4    range of operations and maintenance costs confidentially
5    and shall submit that range to the Commission in a
6    confidential filing within 120 days after the effective
7    date of this amendatory Act of the 96th General Assembly.
8        The clean coal SNG brownfield facility shall submit to
9    the Commission its estimate of the operations and
10    maintenance costs to be recovered under the sourcing
11    agreement. Only after the clean coal SNG brownfield
12    facility has submitted this estimate shall the Commission
13    publicly announce the range of operations and maintenance
14    costs submitted by the Capital Development Board. In the
15    event that the estimate submitted by the clean coal SNG
16    brownfield facility is within or below the range submitted
17    by the Capital Development Board, the clean coal SNG
18    brownfield facility's estimate shall be approved by the
19    Commission as the amount of operations and maintenance
20    costs to be recovered under the sourcing agreement. In the
21    event that the estimate submitted by the clean coal SNG
22    brownfield facility is above the range submitted by the
23    Capital Development Board, the amount of operations and
24    maintenance costs at the lowest end of the range submitted
25    by the Capital Development Board shall be approved by the
26    Commission as the amount of operations and maintenance

 

 

SB1927 Enrolled- 55 -LRB096 11262 DRJ 21678 b

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

 

 

SB1927 Enrolled- 56 -LRB096 11262 DRJ 21678 b

1            (D) transport the carbon dioxide to the
2        sequestration site or a pipeline.
3        The Commission shall assess the prudency of the
4    sequestration costs for the clean coal SNG brownfield
5    facility before construction commences at the
6    sequestration site or pipeline. Any revenues the clean coal
7    SNG brownfield facility receives as a result of the
8    capture, transportation, or sequestration of carbon
9    dioxide shall be first credited against all sequestration
10    costs, with the positive balance, if any, treated as
11    additional net revenue.
12        The Commission may, in its discretion, retain an expert
13    to assist in its review of sequestration costs. The clean
14    coal SNG brownfield facility shall pay for the expert's
15    reasonable fees if an expert is retained by the Commission,
16    and such costs shall not be passed through to a utility or
17    its customers. Once made, the Commission's determination
18    of the amount of recoverable sequestration costs shall not
19    be increased unless the clean coal SNG brownfield facility
20    can show by clear and convincing evidence that (i) the
21    costs were not reasonably foreseeable; (ii) the costs were
22    due to circumstances beyond the clean coal SNG brownfield
23    facility's control; and (iii) the clean coal SNG brownfield
24    facility took all reasonable steps to mitigate the costs.
25    If the Commission determines that sequestration costs may
26    be increased, the Commission shall provide for notice and a

 

 

SB1927 Enrolled- 57 -LRB096 11262 DRJ 21678 b

1    public hearing for approval of the increased sequestration
2    costs.
3        (4) Actual delivered and processed fuel costs shall be
4    set by the Illinois Power Agency through a SNG feedstock
5    procurement, pursuant to Sections 1-20, 1-77, and 1-78 of
6    the Illinois Power Agency Act, to be performed at least
7    every 5 years and purchased by the clean coal SNG
8    brownfield facility pursuant to feedstock procurement
9    contracts developed by the Illinois Power Agency, with coal
10    comprising at least 50% of the total feedstock over the
11    term of the sourcing agreement and petroleum coke
12    comprising the remainder of the SNG feedstock. If the
13    Commission fails to approve a feedstock procurement plan or
14    fails to approve the results of a feedstock procurement
15    event, then the fuel shall be purchased by the company
16    month-by-month on the spot market and those actual
17    delivered and processed fuel costs shall be recoverable
18    under the sourcing agreement. If a supplier defaults under
19    the terms of a procurement contract, then the Illinois
20    Power Agency shall immediately initiate a feedstock
21    procurement process to obtain a replacement supply, and,
22    prior to the conclusion of that process, fuel shall be
23    purchased by the company month-by-month on the spot market
24    and those actual delivered and processed fuel costs shall
25    be recoverable under the sourcing agreement.
26        (5) Taxes and fees imposed by the federal government,

 

 

SB1927 Enrolled- 58 -LRB096 11262 DRJ 21678 b

1    the State, or any unit of local government applicable to
2    the clean coal SNG brownfield facility, excluding income
3    tax, shall be recoverable by the clean coal SNG brownfield
4    facility under the sourcing agreement to the extent such
5    taxes and fees were not applicable to the facility on the
6    date of this amendatory Act of the 96th General Assembly.
7        (6) The actual transportation costs, in accordance
8    with the applicable utility's tariffs, and third-party
9    marketer costs incurred by the company, if any, associated
10    with transporting the SNG from the clean coal SNG
11    brownfield facility to the Chicago City-gate to sell such
12    SNG into the natural gas markets shall be recoverable under
13    the sourcing agreement.
14        (7) Unless otherwise provided, within 30 days after a
15    decision of the Commission on recoverable costs under this
16    Section, any interested party to the Commission's decision
17    may apply for a rehearing with respect to the decision. The
18    Commission shall receive and consider the application for
19    rehearing and shall grant or deny the application in whole
20    or in part within 20 days after the date of the receipt of
21    the application by the Commission. If no rehearing is
22    applied for within the required 30 days or an application
23    for rehearing is denied, then the Commission decision shall
24    be final. If an application for rehearing is granted, then
25    the Commission shall hold a rehearing within 30 days after
26    granting the application. The decision of the Commission

 

 

SB1927 Enrolled- 59 -LRB096 11262 DRJ 21678 b

1    upon rehearing shall be final.
2        Any person affected by a decision of the Commission
3    under this subsection (h-3) may have the decision reviewed
4    only under and in accordance with the Administrative Review
5    Law. Unless otherwise provided, the provisions of the
6    Administrative Review Law, all amendments and
7    modifications to that Law, and the rules adopted pursuant
8    to that Law shall apply to and govern all proceedings for
9    the judicial review of final administrative decisions of
10    the Commission under this subsection (h-3). The term
11    "administrative decision" is defined as in Section 3-101 of
12    the Code of Civil Procedure.
13        (8) The Capital Development Board shall adopt and make
14    public a policy detailing the process for retaining experts
15    under this Section. Any experts retained to assist with
16    calculating the range of capital costs or operations and
17    maintenance costs shall be retained no later than 45 days
18    after the effective date of this amendatory Act of the 96th
19    General Assembly.
20    (h-4) No later than 60 days after the Illinois Power Agency
21submits the final draft sourcing agreement pursuant to
22subsection (h-1), the Commission shall approve a sourcing
23agreement containing the capital costs, rate of return, and
24operations and maintenance costs. Once the sourcing agreement
25is approved, then the gas utility subject to that sourcing
26agreement shall have 45 days after the date of the Commission's

 

 

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1approval to enter into the sourcing agreement.
2    (h-5) The Attorney General, on behalf of the people of the
3State of Illinois, may specifically enforce the requirements of
4this subsection (h-5). Sourcing All contracts under subsection
5(h) of this Act and all sourcing agreements under subsection
6(h-1) of this Act, regardless of duration, shall require the
7owner of any facility supplying SNG under the contract or
8sourcing agreement to provide documentation to the Commission
9each year, starting in the facility's first year of commercial
10operation, accurately reporting the quantity of carbon dioxide
11emissions from the facility that have been captured and
12sequestered and reporting any quantities of carbon dioxide
13released from the site or sites at which carbon dioxide
14emissions were sequestered in prior years, based on continuous
15monitoring of those sites. If, in any year, the owner of the
16facility described in subsection (h) of this Act fails to
17demonstrate that the facility captured and sequestered at least
1890% of the total carbon dioxide emissions that the facility
19would otherwise emit or that sequestration of emissions from
20prior years has failed, resulting in the release of carbon
21dioxide into the atmosphere, then the owner of the facility
22must offset excess emissions. Any such carbon dioxide offsets
23must be permanent, additional, verifiable, real, located
24within the State of Illinois, and legally and practicably
25enforceable; provided that the owner of the facility described
26in subsection (h) of this Act shall not be obligated to acquire

 

 

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1carbon dioxide emission offsets to the extent that the cost of
2acquiring such offsets would exceed $40 million in any given
3year. No costs of any purchases of carbon offsets may be
4recovered from a utility or its customers. All carbon offsets
5purchased for this purpose must be permanently retired.
6    If, in any year, the owner of a clean coal SNG brownfield
7facility fails to demonstrate that the clean coal SNG
8brownfield facility captured and sequestered at least 85% of
9the total carbon dioxide emissions that the facility would
10otherwise emit, then the owner of the clean coal SNG brownfield
11facility must pay a penalty of $20 per ton of excess carbon
12emissions up to $20,000,000, which shall be deposited into the
13Energy Efficiency Trust Fund and distributed pursuant to
14subsection (b) of Section 6-6 of the Renewable Energy, Energy
15Efficiency, and Coal Resources Development Law of 1997.
16Provided, however, to the extent that the owner of the clean
17coal SNG brownfield facility can demonstrate that the failure
18was as a result of acts of God (including fire, flood,
19earthquake, tornado, lightning, hurricane, or other natural
20disaster); any amendment, modification, or abrogation of any
21applicable law or regulation that would prevent performance;
22war; invasion; act of foreign enemies; hostilities (regardless
23of whether war is declared); civil war; rebellion; revolution;
24insurrection; military or usurped power or confiscation;
25terrorist activities; civil disturbances; riots;
26nationalization; sabotage; blockage; or embargo, the owner of

 

 

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1the clean coal SNG brownfield facility shall not be subject to
2a penalty if and only if (i) it promptly provides notice of its
3failure to the Commission; (ii) as soon as practicable and
4consistent with any order or direction from the Commission, it
5submits to the Commission proposed modifications to its carbon
6capture and sequestration plan; and (iii) it carries out its
7proposed modifications in the manner and time directed by the
8Commission. If the Commission finds that the facility has not
9satisfied each of these requirements, then the facility shall
10be subject to the penalty. If the owner of a clean coal SNG
11brownfield facility demonstrates that the clean coal SNG
12brownfield facility captured and sequestered more than 85% of
13the total carbon emissions that the facility would otherwise
14emit, the owner of the clean coal SNG brownfield facility may
15credit such additional amounts to reduce the amount of any
16future penalty to be paid. The penalty resulting from the
17failure to capture and sequester at least the minimum amount of
18carbon dioxide shall not be passed on to a utility or its
19customers.
20    In addition to any penalty for the clean coal SNG
21brownfield facility's failure to capture and sequester at least
22its minimum sequestration requirement, the Attorney General,
23on behalf of the People of the State of Illinois, shall bring
24an action for specific performance of this subsection (h-5).
25Such action may be filed in any circuit court in Illinois. By
26entering into a sourcing agreement pursuant to subsection (h-1)

 

 

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1of this Section, the clean coal SNG brownfield facility agrees
2to waive any objections to venue or to the jurisdiction of the
3court with regard to the Attorney General's action for specific
4performance under this subsection (h-5).
5    In addition, carbon dioxide emission credits equivalent to
650% of the amount of credits associated with the required
7sequestration of carbon dioxide from the facility must be
8permanently retired. Compliance with the sequestration
9requirements and the offset purchase requirements specified in
10this subsection (h-5) for the facility described in subsection
11(h) of this Act shall be assessed annually by an independent
12expert retained by the owner of the facility described in
13subsection (h) of this Act, with the advance written approval
14of the Attorney General. Compliance with the sequestration
15requirements and penalty requirements specified in this
16subsection (h-5) for the clean coal SNG brownfield facility
17shall be assessed annually by the Commission, which may in its
18discretion retain an expert to facilitate its assessment. If an
19expert is retained by the Commission, then the clean coal SNG
20brownfield facility shall pay for the expert's reasonable fees,
21and such costs shall not be passed through to a utility or its
22customers. A SNG facility operating pursuant to this subsection
23(h-5) shall not forfeit its designation as a clean coal SNG
24facility or a clean coal SNG brownfield facility if the
25facility fails to fully comply with the applicable carbon
26sequestration requirements in any given year, provided the

 

 

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1requisite offsets are purchased or requisite penalties are
2paid.
3    Responsibility for compliance with the sequestration
4requirements specified in this subsection (h-5) for the clean
5coal SNG brownfield facility shall reside solely with the clean
6coal SNG brownfield facility regardless of whether the facility
7has contracted with another party to capture, transport, or
8sequester carbon dioxide.
9    (h-6) The Attorney General, on behalf of the people of the
10State of Illinois, may specifically enforce the requirements of
11this subsection (h-6). All contracts entered into under
12subsection (h) of this Section, regardless of duration, shall
13require the owner of any facility supplying SNG under the
14contract to provide documentation to the Commission each year,
15starting in the facility's first year of commercial operation,
16accurately reporting the quantity of carbon dioxide emissions
17from the facility that have been captured and sequestered and
18reporting any quantities of carbon dioxide released from the
19site or sites at which carbon dioxide emissions were
20sequestered in prior years, based on continuous monitoring of
21those sites.
22    If, in any year, the owner of the clean coal SNG facility
23located in Jefferson County fails to demonstrate that the SNG
24facility captured and sequestered at least 90% of the total
25carbon dioxide emissions that the facility would otherwise emit
26or that sequestration of emissions from prior years has failed,

 

 

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

 

 

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1    If the Commission finds that the facility has not satisfied
2each of these requirements, then the facility shall be subject
3to the penalty. If the owner of the clean coal SNG facility
4located in Jefferson County captured and sequestered more than
590% of the total carbon emissions that the facility would
6otherwise emit, then the owner of the facility may credit such
7additional amounts to reduce the amount of any future penalty
8to be paid. The penalty resulting from the failure to capture
9and sequester at least the minimum amount of carbon dioxide
10shall not be passed on to a utility or its customers.
11    In addition to any penalty for the clean coal facility
12located in Jefferson County failing to capture and sequester at
13least its minimum sequestration requirement, the Attorney
14General, on behalf of the People of the State of Illinois,
15shall bring an action for specific performance of this
16subsection (h-6). Such action may be filed in any circuit court
17in Illinois. By entering into a contract pursuant to subsection
18(h) of this Section, the clean coal SNG facility located in
19Jefferson County agrees to waive any objections to venue or to
20the jurisdiction of the court with regard to the Attorney
21General's action for specific performance under this
22subsection (h-6).
23    Compliance with the sequestration requirements and any
24penalty requirements specified in this subsection (h-6) for the
25clean coal SNG facility located in Jefferson County shall be
26assessed annually by the Commission, which may in its

 

 

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1discretion retain an expert to facilitate its assessment. If
2any expert is retained by the Commission, then the clean coal
3SNG facility located in Jefferson County shall pay for the
4expert's reasonable fees, and such costs shall not be passed
5through to the utility or its customers.
6    In addition, carbon dioxide emission credits received by
7the clean coal SNG facility located in Jefferson County in
8connection with sequestration of carbon dioxide from the
9facility must be sold in a timely fashion with any revenue,
10less applicable fees and expenses and any expenses required to
11be paid by facility for carbon dioxide transportation or
12sequestration, deposited into the reconciliation account
13within 30 days after receipt of such funds by the owner of the
14clean coal SNG facility located in Jefferson County.
15    The clean coal SNG facility located in Jefferson County is
16prohibited from transporting or sequestering carbon dioxide
17unless the owner of the carbon dioxide pipeline that transfers
18the carbon dioxide from the facility and the owner of the
19sequestration site where the carbon dioxide captured by the
20facility is stored has acquired all applicable permits under
21applicable State and federal laws, statutes, rules, or
22regulations prior to the transfer or sequestration of carbon
23dioxide. The responsibility for compliance with the
24sequestration requirements specified in this subsection (h-6)
25for the clean coal SNG facility located in Jefferson County
26shall reside solely with the clean coal SNG facility located in

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

SB1927 Enrolled- 73 -LRB096 11262 DRJ 21678 b

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

 

 

SB1927 Enrolled- 74 -LRB096 11262 DRJ 21678 b

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

 

 

SB1927 Enrolled- 75 -LRB096 11262 DRJ 21678 b

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

 

 

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1condition to its performance under the contract, including (i)
2amounts paid for SNG under the SNG contract and (ii) costs of
3transportation and storage services of SNG purchased from
4interstate pipelines under federally approved tariffs. Any
5sourcing agreement, the terms of which have been approved by
6the Commission as set forth in subsection (h-4) of this
7Section, and the performance of the parties under the sourcing
8agreement cannot be grounds for challenging prudence or cost
9recovery by the utility through the purchased gas adjustment
10clause, and in these cases, the Commission is directed not to
11consider, and has no authority to consider, any attempted
12challenges.
13    (h-15) Reconciliation account. The clean coal SNG facility
14located in Jefferson County shall establish a reconciliation
15account for the benefit of the retail customers of the
16utilities that have entered into contracts with the clean coal
17SNG facility located in Jefferson County pursuant to subsection
18(h). The reconciliation account shall be maintained and
19administered by an independent trustee that is mutually agreed
20upon by the owners of the clean coal SNG facility located in
21Jefferson County, the utilities, and the Commission in an
22interest-bearing account in accordance with the following:
23        (1) The clean coal SNG facility located in Jefferson
24    County shall conduct an analysis annually within 60 days
25    after receiving the necessary cost information, which
26    shall be provided by the gas utility within 6 months after

 

 

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1    the end of the preceding calendar year, to determine (i)
2    the average annual contract SNG cost, which shall be
3    calculated as the total amount paid for SNG purchased from
4    the clean coal SNG facility located in Jefferson County
5    over the preceding 12 months, plus the cost to the utility
6    of the required transportation and storage services of SNG,
7    divided by the total number of MMBtus of SNG actually
8    purchased from the clean coal SNG facility located in
9    Jefferson County in the preceding 12 months under the
10    utility contract; (ii) the average annual natural gas
11    purchase cost, which shall be calculated as the total
12    annual supply costs paid for natural gas (excluding any
13    SNG) purchased by such utility over the preceding 12 months
14    plus the costs of transportation and storage services of
15    such natural gas (excluding such costs for SNG), divided by
16    the total number of MMbtus of natural gas (excluding SNG)
17    actually purchased by the utility during the year; (iii)
18    the cost differential, which shall be the difference
19    between the average annual contract SNG cost and the
20    average annual natural gas purchase cost; and (iv) the
21    revenue share target which shall be the cost differential
22    multiplied by the total amount of SNG purchased over the
23    preceding 12 months under such utility contract.
24            (A) To the extent the annual average contract SNG
25        cost is less than the annual average natural gas
26        purchase cost the utility shall credit an amount equal

 

 

SB1927 Enrolled- 78 -LRB096 11262 DRJ 21678 b

1        to the revenue share target to the reconciliation
2        account. Such credit payment shall be made within 30
3        days after the completed analysis in this subsection
4        (h-15) and pursuant to this subparagraph (A) shall be
5        deemed prudent and reasonable and not subject to
6        Commission prudence review.
7            (B) To the extent the annual average contract SNG
8        cost is greater than the annual average natural gas
9        purchase cost the reconciliation account shall be used
10        to provide a credit equal to the revenue share target
11        to the utilities to be used to reduce the utility's
12        natural gas costs through the purchased gas adjustment
13        clause. Such payment shall be made within 30 days after
14        the completed analysis pursuant to this subsection
15        (h-15).
16        (2) At the conclusion of the term of the SNG contracts
17    pursuant to subsection (h) and the completion of the final
18    annual analysis pursuant to this subsection (h-15), to the
19    extent the facility owes any amount to retail customers,
20    amounts in the account shall be credited to retail
21    customers to the extent the owed amount is repaid; 50% of
22    any additional amount in the reconciliation account shall
23    be distributed to the utilities to be used to reduce the
24    utilities' natural gas costs through the purchase gas
25    adjustment clause with the remaining amount distributed to
26    the clean coal SNG facility located in Jefferson County.

 

 

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1    Such payment shall be made within 30 days after the last
2    completed analysis pursuant to this subsection (h-15). If
3    the facility has repaid all owed amounts, if any, to retail
4    customers and has distributed 50% of any additional amount
5    in the account to the utilities, then the owners of the
6    clean coal SNG facility located in Jefferson County shall
7    have no further obligation to the utility or the retail
8    customers.
9        If, at the conclusion of the term of the contracts
10    pursuant to subsection (h) and the completion of the final
11    annual analysis pursuant to this subsection (h-15), the
12    facility owes any amount to retail customers and the
13    account has been depleted, then the clean coal SNG facility
14    located in Jefferson County shall be liable for any
15    remaining amount owed to the retail customers. The clean
16    coal SNG facility located in Jefferson County shall market
17    the daily production of SNG and distribute on a monthly
18    basis 5% of the amounts collected with respect to such
19    future sales to the utilities in proportion to each
20    utility's SNG contract to be used to reduce the utility's
21    natural gas costs through the purchase gas adjustment
22    clause; such payments to the utility shall continue until
23    either 15 years after the conclusion of the contract or
24    such time as the sum of such payments equals the remaining
25    amount owed to the retail customers at the end of the
26    contract, whichever is earlier. If the debt to the retail

 

 

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1    customers is not repaid within 15 years after the
2    conclusion of the contract, then the owner of the clean
3    coal SNG facility located in Jefferson County must sell the
4    facility, and all proceeds from that sale must be used to
5    repay any amount owed to the retail customers under this
6    subsection (h-15).
7        The retail customers shall have first priority in
8    recovering that debt above any creditors, except the
9    secured lenders to the extent that the secured lenders have
10    any secured debt outstanding, including any parent
11    companies or affiliates of the clean coal SNG facility
12    located in Jefferson County.
13        (3) 50% of all additional net revenue, defined as
14    miscellaneous net revenue after cost allowance and above
15    the budgeted estimate established for revenue pursuant to
16    subsection (h), including sale of substitute natural gas
17    derived from the clean coal SNG facility located in
18    Jefferson County above the nameplate capacity of the
19    facility and other by-products produced by the facility,
20    shall be credited to the reconciliation account on an
21    annual basis with such payment made within 30 days after
22    the end of each calendar year during the term of the
23    contract.
24        (4) The clean coal SNG facility located in Jefferson
25    County shall each year, starting in the facility's first
26    year of commercial operation, file with the Commission, in

 

 

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1    such form as the Commission shall require, a report as to
2    the reconciliation account. The annual report must contain
3    the following information:
4            (A) the revenue share target amount;
5            (B) the amount credited or debited to the
6        reconciliation account during the year;
7            (C) the amount credited to the utilities to be used
8        to reduce the utilities natural gas costs though the
9        purchase gas adjustment clause;
10            (D) the total amount of reconciliation account at
11        the beginning and end of the year;
12            (E) the total amount of consumer saving to date;
13        and
14            (F) any additional information the Commission may
15        require.
16    When any report is erroneous or defective or appears to the
17Commission to be erroneous or defective, the Commission may
18notify the clean coal SNG facility located in Jefferson County
19to amend the report within 30 days; before or after the
20termination of the 30-day period, the Commission may examine
21the trustee of the reconciliation account or the officers,
22agents, employees, books records, or accounts of the clean coal
23SNG facility located in Jefferson County and correct such items
24in the report as upon such examination the Commission may find
25defective or erroneous. All reports shall be under oath.
26    All reports made to the Commission by the clean coal SNG

 

 

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1facility located in Jefferson County and the contents of the
2reports shall be open to public inspection and shall be deemed
3a public record under the Freedom of Information Act. Such
4reports shall be preserved in the office of the Commission. The
5Commission shall publish an annual summary of the reports prior
6to February 1 of the following year. The annual summary shall
7be made available to the public on the Commission's website and
8shall be submitted to the General Assembly.
9    Any facility that fails to file the report required under
10this paragraph (4) to the Commission within the time specified
11or to make specific answer to any question propounded by the
12Commission within 30 days after the time it is lawfully
13required to do so, or within such further time not to exceed 90
14days as may be allowed by the Commission in its discretion,
15shall pay a penalty of $500 to the Commission for each day it
16is in default.
17    Any person who willfully makes any false report to the
18Commission or to any member, officer, or employee thereof, any
19person who willfully in a report withholds or fails to provide
20material information to which the Commission is entitled under
21this paragraph (4) and which information is either required to
22be filed by statute, rule, regulation, order, or decision of
23the Commission or has been requested by the Commission, and any
24person who willfully aids or abets such person shall be guilty
25of a Class A misdemeanor. With respect to each contract entered
26into by the company with an Illinois utility in accordance with

 

 

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1the terms stated in subsection (h) of this Section, within 60
2days following the completion of purchases of SNG, the Illinois
3Power Agency shall conduct an analysis to determine (i) the
4average contract SNG cost, which shall be calculated as the
5total amount paid to a company for SNG over the contract term,
6plus the cost to the utility of the required transportation and
7storage services of SNG, divided by the total number of MMBtus
8of SNG actually purchased under the utility contract; (ii) the
9average natural gas purchase cost, which shall be calculated as
10the total annual supply costs paid for natural gas (excluding
11SNG) purchased by such utility over the contract term, plus the
12costs of transportation and storage services of such natural
13gas (excluding such costs for SNG), divided by the total number
14of MMBtus of natural gas (excluding SNG) actually purchased by
15the utility during the contract term; (iii) the cost
16differential, which shall be the difference between the average
17contract SNG cost and the average natural gas purchase cost;
18and (iv) the revenue share target, which shall be the cost
19differential multiplied by the total amount of SNG purchased
20under such utility contract. If the average contract SNG cost
21is equal to or less than the average natural gas purchase cost,
22then the company shall have no further obligation to the
23utility. If the average contract SNG cost for such SNG contract
24is greater than the average natural gas purchase cost for such
25utility, then the company shall market the daily production of
26SNG and distribute on a monthly basis 5% of amounts collected

 

 

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1with respect to such future sales to the utilities in
2proportion to each utility's SNG purchases from the company
3during the term of the SNG contract to be used to reduce the
4utility's natural gas costs through the purchased gas
5adjustment clause; such payments to the utility shall continue
6until such time as the sum of such payments equals the revenue
7share target of that utility. The company or utilities shall
8have no obligation to repay the revenue share target except as
9provided for in this subsection (h-15).
10    (h-20) The General Assembly authorizes the Illinois
11Finance Authority to issue bonds to the maximum extent
12permitted to finance coal gasification facilities described in
13this Section, which constitute both "industrial projects"
14under Article 801 of the Illinois Finance Authority Act and
15"clean coal and energy projects" under Sections 825-65 through
16825-75 of the Illinois Finance Authority Act.
17    Administrative costs incurred by the Illinois Finance
18Authority in performance of this subsection (h-20) shall be
19subject to reimbursement by the clean coal SNG facility located
20in Jefferson County on terms as the Illinois Finance Authority
21and the clean coal SNG facility located in Jefferson County may
22agree. The utility and its customers shall have no obligation
23to reimburse the clean coal SNG facility located in Jefferson
24County or the Illinois Finance Authority of any such costs. The
25General Assembly authorizes the Illinois Finance Authority to
26issue bonds to the maximum extent permitted to finance coal

 

 

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1gasification facilities described in this Section, which
2constitute both "industrial projects" under Article 801 of the
3Illinois Finance Authority Act and "clean coal and energy
4projects" under Sections 825-65 through 825-75 of the Illinois
5Finance Authority Act. The General Assembly further authorizes
6the Illinois Power Agency to become party to agreements and
7take such actions as necessary to enable the Illinois Power
8Agency or its designate to (i) review and confirm in writing
9that the terms stated in subsection (h) of this Section are
10incorporated in the SNG contract, and (ii) conduct an analysis
11pursuant to subsection (h-15) of this Section. Administrative
12costs incurred by the Illinois Finance Authority and Illinois
13Power Agency in performance of this subsection (h-20) shall be
14subject to reimbursement by the company on terms as the
15Illinois Finance Authority, the Illinois Power Agency, and the
16company may agree. The utility and its customers shall have no
17obligation to reimburse the company, the Illinois Finance
18Authority, or the Illinois Power Agency for any such costs.
19    (h-25) The State of Illinois pledges that the State may not
20enact any law or take any action to (1) break or repeal the
21authority for SNG purchase contracts entered into between
22public gas utilities and the clean coal SNG facility located in
23Jefferson County pursuant to subsection (h) of this Section or
24(2) deny public gas utilities their full cost recovery for
25contract costs, as defined in subsection (h-10), that are
26incurred under such SNG purchase contracts. These pledges are

 

 

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1for the benefit of the parties to such SNG purchase contracts
2and the issuers and holders of bonds or other obligations
3issued or incurred to finance or refinance the clean coal SNG
4facility located in Jefferson County. The beneficiaries are
5authorized to include and refer to these pledges in any finance
6agreement into which they may enter in regard to such
7contracts.
8    (h-30) The State of Illinois retains and reserves all other
9rights to enact new or amendatory legislation or take any other
10action, including, but not limited to, such legislation or
11other action that would (1) directly or indirectly raise the
12costs that the clean coal SNG facility must incur; (2) directly
13or indirectly place additional restrictions, regulations, or
14requirements on the clean coal SNG facility; (3) prohibit
15sequestration in general or prohibit a specific sequestration
16method or project; or (4) increase minimum sequestration
17requirements.
18    (i) If a gas utility or an affiliate of a gas utility has
19an ownership interest in any entity that produces or sells
20synthetic natural gas, Article VII of this Act shall apply.
21(Source: P.A. 95-1027, eff. 6-1-09; 96-1364, eff. 7-28-10;
2209600SB3388ham001, ham002, and ham003.)
 
23    Section 95. Rulemaking. The Illinois Power Agency and the
24Illinois Commerce Commission shall have rulemaking authority
25to implement the provisions of this amendatory Act of the 96th

 

 

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1General Assembly.
 
2    Section 97. Inseverability. The provisions of this Act are
3mutually dependent and inseverable. If any provision is held
4invalid, then this entire Act, including all new and amendatory
5provisions, is invalid.
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law or on the effective date of Senate Bill 3388 of
8the 96th General Assembly, whichever is later.