Executive Committee

Adopted in House Comm. on Jan 05, 2011

 

 


 

 


 
09600SB1927ham001LRB096 11262 ASK 44724 a

1
AMENDMENT TO SENATE BILL 1927

2    AMENDMENT NO. ______. Amend Senate Bill 1927 by replacing
3everything after the enacting clause with the following:
 
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

 

 

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1maintenance, insurance, and other matters in respect of the
2project.
3    "Authority" means the Illinois Finance Authority.
4    "Clean coal facility" means an electric generating
5facility that uses primarily coal as a feedstock and that
6captures and sequesters carbon dioxide emissions at the
7following levels: at least 50% of the total carbon dioxide
8emissions that the facility would otherwise emit if, at the
9time construction commences, the facility is scheduled to
10commence operation before 2016, at least 70% of the total
11carbon dioxide emissions that the facility would otherwise emit
12if, at the time construction commences, the facility is
13scheduled to commence operation during 2016 or 2017, and at
14least 90% of the total carbon dioxide emissions that the
15facility would otherwise emit if, at the time construction
16commences, the facility is scheduled to commence operation
17after 2017. The power block of the clean coal facility shall
18not exceed allowable emission rates for sulfur dioxide,
19nitrogen oxides, carbon monoxide, particulates and mercury for
20a natural gas-fired combined-cycle facility the same size as
21and in the same location as the clean coal facility at the time
22the clean coal facility obtains an approved air permit. All
23coal used by a clean coal facility shall have high volatile
24bituminous rank and greater than 1.7 pounds of sulfur per
25million btu content, unless the clean coal facility does not
26use gasification technology and was operating as a conventional

 

 

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1coal-fired electric generating facility on June 1, 2009 (the
2effective date of Public Act 95-1027).
3    "Clean coal SNG brownfield facility" means a facility that
4(1) has commenced construction by July 1, 2014 on an urban
5brownfield site in a municipality with at least 1,000,000
6residents; (2) uses a gasification process to produce
7substitute natural gas; (3) uses coal as at least 50% of the
8total feedstock over the term of any sourcing agreement with a
9utility and the remainder of the feedstock may be either
10petroleum coke or coal, with all such coal having a high
11bituminous rank and greater than 1.7 pounds of sulfur per
12million Btu content; and (4) captures and sequesters at least
1385% of the total carbon dioxide emissions that the facility
14would otherwise emit.
15    "Clean coal SNG facility" means a facility that uses a
16gasification process to produce substitute natural gas, that
17sequesters at least 90% of the total carbon dioxide emissions
18that the facility would otherwise emit and that uses petroleum
19coke or coal as a feedstock, with all such coal having a high
20bituminous rank and greater than 1.7 pounds of sulfur per
21million btu content; provided, however, a clean coal SNG
22brownfield facility shall not be a clean coal SNG facility.
23    "Commission" means the Illinois Commerce Commission.
24    "Costs incurred in connection with the development and
25construction of a facility" means:
26        (1) the cost of acquisition of all real property,

 

 

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

 

 

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

 

 

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

 

 

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1utility poles, or construction or demolition debris, other than
2untreated and unadulterated waste wood.
3    "Revenue bond" means any bond, note, or other evidence of
4indebtedness issued by the Authority, the principal and
5interest of which is payable solely from revenues or income
6derived from any project or activity of the Agency.
7    "Sequester" means permanent storage of carbon dioxide by
8injecting it into a saline aquifer, a depleted gas reservoir,
9or an oil reservoir, directly or through an enhanced oil
10recovery process that may involve intermediate storage,
11regardless of whether these activities are conducted by a clean
12coal facility, clean coal SNG facility, clean coal SNG
13brownfield facility, the clean coal SNG facility located in
14Jefferson County, or a party with which a clean coal facility,
15clean coal SNG facility, or clean coal SNG brownfield facility,
16or the clean coal SNG facility located in Jefferson County, has
17contracted for such purposes.
18    "Sourcing agreement" means (i) in the case of an electric
19utility, an agreement between the owner of a clean coal
20facility and such electric utility, which agreement shall have
21terms and conditions meeting the requirements of paragraph (3)
22of subsection (d) of Section 1-75, (ii) in the case of an
23alternative retail electric supplier, an agreement between the
24owner of a clean coal facility and such alternative retail
25electric supplier, which agreement shall have terms and
26conditions meeting the requirements of Section 16-115(d)(5) of

 

 

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

 

 

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1avoided costs of power and energy that an electric utility
2would otherwise have had to acquire, reasonable estimates shall
3be included of financial costs likely to be imposed by future
4regulations and legislation on emissions of greenhouse gases.
5(Source: P.A. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09;
695-1027, eff. 6-1-09; 96-33, eff. 7-10-09; 96-159, eff.
78-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10;
809600SB3388ham001 and ham003.)
 
9    Section 7. If and only if Senate Bill 3388 of the 96th
10General Assembly (as amended by House Amendment Nos. 1, 2, and
113) becomes law, then the Illinois Procurement Code is amended
12by changing Section 1-10 as follows:
 
13    (30 ILCS 500/1-10)
14    Sec. 1-10. Application.
15    (a) This Code applies only to procurements for which
16contractors were first solicited on or after July 1, 1998. This
17Code shall not be construed to affect or impair any contract,
18or any provision of a contract, entered into based on a
19solicitation prior to the implementation date of this Code as
20described in Article 99, including but not limited to any
21covenant entered into with respect to any revenue bonds or
22similar instruments. All procurements for which contracts are
23solicited between the effective date of Articles 50 and 99 and
24July 1, 1998 shall be substantially in accordance with this

 

 

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1Code and its intent.
2    (b) This Code shall apply regardless of the source of the
3funds with which the contracts are paid, including federal
4assistance moneys. This Code shall not apply to:
5        (1) Contracts between the State and its political
6    subdivisions or other governments, or between State
7    governmental bodies except as specifically provided in
8    this Code.
9        (2) Grants, except for the filing requirements of
10    Section 20-80.
11        (3) Purchase of care.
12        (4) Hiring of an individual as employee and not as an
13    independent contractor, whether pursuant to an employment
14    code or policy or by contract directly with that
15    individual.
16        (5) Collective bargaining contracts.
17        (6) Purchase of real estate, except that notice of this
18    type of contract with a value of more than $25,000 must be
19    published in the Procurement Bulletin within 7 days after
20    the deed is recorded in the county of jurisdiction. The
21    notice shall identify the real estate purchased, the names
22    of all parties to the contract, the value of the contract,
23    and the effective date of the contract.
24        (7) Contracts necessary to prepare for anticipated
25    litigation, enforcement actions, or investigations,
26    provided that the chief legal counsel to the Governor shall

 

 

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1    give his or her prior approval when the procuring agency is
2    one subject to the jurisdiction of the Governor, and
3    provided that the chief legal counsel of any other
4    procuring entity subject to this Code shall give his or her
5    prior approval when the procuring entity is not one subject
6    to the jurisdiction of the Governor.
7        (8) Contracts for services to Northern Illinois
8    University by a person, acting as an independent
9    contractor, who is qualified by education, experience, and
10    technical ability and is selected by negotiation for the
11    purpose of providing non-credit educational service
12    activities or products by means of specialized programs
13    offered by the university.
14        (9) Procurement expenditures by the Illinois
15    Conservation Foundation when only private funds are used.
16        (10) Procurement expenditures by the Illinois Health
17    Information Exchange Authority involving private funds
18    from the Health Information Exchange Fund. "Private funds"
19    means gifts, donations, and private grants.
20    (c) This Code does not apply to the electric power
21procurement process provided for under Section 1-75 of the
22Illinois Power Agency Act and Section 16-111.5 of the Public
23Utilities Act.
24    (d) Except for Section 20-160 and Article 50 of this Code,
25and as expressly required by Section 9.1 of the Illinois
26Lottery Law, the provisions of this Code do not apply to the

 

 

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1procurement process provided for under Section 9.1 of the
2Illinois Lottery Law.
3    (e) This Code does not apply to the process used by the
4Capital Development Board to retain a person or entity to
5assist the Capital Development Board with its duties related to
6the determination of costs of a clean coal SNG brownfield
7facility, as defined by Section 1-10 of the Illinois Power
8Agency Act, as required in subsection (h-3) of Section 9-220 of
9the Public Utilities Act, including calculating the range of
10capital costs, the range of operating and maintenance costs, or
11the sequestration costs or monitoring the construction of clean
12coal SNG brownfield facility for the full duration of
13construction.
14    (f) This Code does not apply to the process used by the
15Illinois Power Agency to retain a mediator to mediate sourcing
16agreement disputes between gas utilities and the clean coal SNG
17brownfield facility, as defined in Section 1-10 of the Illinois
18Power Agency Act, as required under subsection (h-1) of Section
199-220 of the Public Utilities Act.
20    (g) This Code does not apply to the process used by the
21Illinois Power Agency to retain a mediator to mediate contract
22disputes between gas utilities and the clean coal SNG facility
23located in Jefferson County as required under subsection (h) of
24Section 9-220 of the Public Utilities Act and does not apply to
25the process used by the Illinois Commerce Commission to retain
26an expert to assist in determining the actual incurred costs of

 

 

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1the clean coal SNG facility and the reasonableness of those
2costs as required under subsection (h) of Section 9-220 of the
3Public Utilities Act.
4(Source: P.A. 95-481, eff. 8-28-07; 95-615, eff. 9-11-07;
595-876, eff. 8-21-08; 96-840, eff. 12-23-09; 96-1331, eff.
67-27-10; 09600SB3388ham001 and ham003.)
 
7    Section 10. If and only if Senate Bill 3388 of the 96th
8General Assembly (as amended by House Amendment Nos. 1, 2, and
93) becomes law, then the Public Utilities Act is amended by
10changing Sections 3-123 and 9-220 and by adding Sections 3-124,
113-125, and 3-126 as follows:
 
12    (220 ILCS 5/3-123)
13    Sec. 3-123. Clean coal SNG brownfield facility; sequester;
14SNG facility; sourcing agreement; substitute natural gas or
15SNG. As used in this Act:
16    "Clean coal SNG facility" shall have the same meaning as
17provided in Section 1-10 of the Illinois Power Agency Act.
18    "Clean coal SNG brownfield facility" shall have the same
19meaning as provided in Section 1-10 of the Illinois Power
20Agency Act.
21    "Sequester" shall have the same meaning as provided in
22Section 1-10 of the Illinois Power Agency Act.
23    "SNG facility" means a facility that produces substitute
24natural gas from feedstock that includes coal through a

 

 

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

 

 

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1    (220 ILCS 5/3-125 new)
2    Sec. 3-125. Final capitalized plant cost. "Final
3capitalized plant cost" means the total capitalized asset cost
4of the plant of the clean coal SNG facility located in
5Jefferson County as reflected on the balance sheet of the
6facility at the time of the commercial production date, with
7such capitalized cost to be accrued in accordance with
8generally accepted accounting principles, and includes,
9without limitation, the following items: major equipment, the
10SNG pipeline from the plant to the receiving pipeline, water
11lines, railroad improvements, access road improvements, all
12coal transportation assets, including the slurry line, slurry
13prep plant, carbon dioxide capture metering and compression,
14licensing fees, all costs incurred in the management planning,
15oversight and execution of the construction and start-up of the
16plant, and all fees and costs payable under engineering,
17procurement, and design contracts for the construct of the
18plant accrued as of the time of the commercial production date,
19but does not include capitalized financing costs including
20capitalized interest during construction and all fees
21associated with financing, coal reserve leasing costs,
22marketing, training, any and all costs payable under the
23contract miner agreement, the cost of coal mining equipment and
24similar costs, and any other costs, including general and
25administrative costs, not reasonably incurred in connection
26with the design, construction, testing, start-up, or

 

 

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1commissioning of the plant in preparation for commercial
2production date.
 
3    (220 ILCS 5/3-126 new)
4    Sec. 3-126. Total capitalized asset cost. "Total
5capitalized asset cost" means the gross book value of the
6plant, as determined in accordance with generally accepted
7accounting principles at the commercial production date.
 
8    (220 ILCS 5/9-220)  (from Ch. 111 2/3, par. 9-220)
9    Sec. 9-220. Rate changes based on changes in fuel costs.
10    (a) Notwithstanding the provisions of Section 9-201, the
11Commission may authorize the increase or decrease of rates and
12charges based upon changes in the cost of fuel used in the
13generation or production of electric power, changes in the cost
14of purchased power, or changes in the cost of purchased gas
15through the application of fuel adjustment clauses or purchased
16gas adjustment clauses. The Commission may also authorize the
17increase or decrease of rates and charges based upon
18expenditures or revenues resulting from the purchase or sale of
19emission allowances created under the federal Clean Air Act
20Amendments of 1990, through such fuel adjustment clauses, as a
21cost of fuel. For the purposes of this paragraph, cost of fuel
22used in the generation or production of electric power shall
23include the amount of any fees paid by the utility for the
24implementation and operation of a process for the

 

 

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1desulfurization of the flue gas when burning high sulfur coal
2at any location within the State of Illinois irrespective of
3the attainment status designation of such location; but shall
4not include transportation costs of coal (i) except to the
5extent that for contracts entered into on and after the
6effective date of this amendatory Act of 1997, the cost of the
7coal, including transportation costs, constitutes the lowest
8cost for adequate and reliable fuel supply reasonably available
9to the public utility in comparison to the cost, including
10transportation costs, of other adequate and reliable sources of
11fuel supply reasonably available to the public utility, or (ii)
12except as otherwise provided in the next 3 sentences of this
13paragraph. Such costs of fuel shall, when requested by a
14utility or at the conclusion of the utility's next general
15electric rate proceeding, whichever shall first occur, include
16transportation costs of coal purchased under existing coal
17purchase contracts. For purposes of this paragraph "existing
18coal purchase contracts" means contracts for the purchase of
19coal in effect on the effective date of this amendatory Act of
201991, as such contracts may thereafter be amended, but only to
21the extent that any such amendment does not increase the
22aggregate quantity of coal to be purchased under such contract.
23Nothing herein shall authorize an electric utility to recover
24through its fuel adjustment clause any amounts of
25transportation costs of coal that were included in the revenue
26requirement used to set base rates in its most recent general

 

 

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1rate proceeding. Cost shall be based upon uniformly applied
2accounting principles. Annually, the Commission shall initiate
3public hearings to determine whether the clauses reflect actual
4costs of fuel, gas, power, or coal transportation purchased to
5determine whether such purchases were prudent, and to reconcile
6any amounts collected with the actual costs of fuel, power,
7gas, or coal transportation prudently purchased. In each such
8proceeding, the burden of proof shall be upon the utility to
9establish the prudence of its cost of fuel, power, gas, or coal
10transportation purchases and costs. The Commission shall issue
11its final order in each such annual proceeding for an electric
12utility by December 31 of the year immediately following the
13year to which the proceeding pertains, provided, that the
14Commission shall issue its final order with respect to such
15annual proceeding for the years 1996 and earlier by December
1631, 1998.
17    (b) A public utility providing electric service, other than
18a public utility described in subsections (e) or (f) of this
19Section, may at any time during the mandatory transition period
20file with the Commission proposed tariff sheets that eliminate
21the public utility's fuel adjustment clause and adjust the
22public utility's base rate tariffs by the amount necessary for
23the base fuel component of the base rates to recover the public
24utility's average fuel and power supply costs per kilowatt-hour
25for the 2 most recent years for which the Commission has issued
26final orders in annual proceedings pursuant to subsection (a),

 

 

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

 

 

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

 

 

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1recovered through such clause; provided, that the provisions of
2this subsection (d) shall not be available to a public utility
3described in subsections (e) or (f) of this Section to
4eliminate its fuel adjustment clause. Notwithstanding any
5contrary or inconsistent provisions in Section 9-201 of this
6Act, in subsection (a) of this Section, or in any rules or
7regulations promulgated by the Commission pursuant to
8subsection (g) of this Section, the Commission shall review and
9shall by order approve, or approve as modified in the
10Commission's order, the proposed tariff sheets within 240 days
11after the date of the public utility's filing. The Commission's
12order shall approve rates and charges that the Commission,
13based on information in the public utility's filing or on the
14record if a hearing is held by the Commission, finds will
15recover the reasonable, prudent and necessary jurisdictional
16power supply costs or gas supply costs incurred or to be
17incurred by the public utility during a 12 month period found
18by the Commission to be appropriate for these purposes,
19provided, that such period shall be either (i) a 12 month
20historical period occurring during the 15 months ending on the
21date of the public utility's filing, or (ii) a 12 month future
22period ending no later than 15 months following the date of the
23public utility's filing. The public utility shall include with
24its tariff filing information showing both (1) its actual
25jurisdictional power supply costs or gas supply costs for a 12
26month historical period conforming to (i) above and (2) its

 

 

09600SB1927ham001- 22 -LRB096 11262 ASK 44724 a

1projected jurisdictional power supply costs or gas supply costs
2for a future 12 month period conforming to (ii) above. If the
3Commission's order requires modifications in the tariff sheets
4filed by the public utility, the public utility shall have 7
5days following the date of the order to notify the Commission
6whether the public utility will implement the modified tariffs
7or elect to continue its fuel or purchased gas adjustment
8clause in force as though no order had been entered. The
9Commission's order shall provide for any reconciliation of
10power supply costs or gas supply costs, as the case may be, and
11associated revenues through the date that the public utility's
12fuel or purchased gas adjustment clause is eliminated. During
13the 5 years following the date of the Commission's order, a
14public utility whose fuel or purchased gas adjustment clause
15has been eliminated pursuant to this subsection shall not file
16proposed tariff sheets seeking, or otherwise petition the
17Commission for, reinstatement or adoption of a fuel or
18purchased gas adjustment clause. Nothing in this subsection (d)
19shall be construed as limiting the Commission's authority to
20eliminate a public utility's fuel adjustment clause or
21purchased gas adjustment clause in accordance with any other
22applicable provisions of this Act.
23    (e) Notwithstanding any contrary or inconsistent
24provisions in Section 9-201 of this Act, in subsection (a) of
25this Section, or in any rules promulgated by the Commission
26pursuant to subsection (g) of this Section, a public utility

 

 

09600SB1927ham001- 23 -LRB096 11262 ASK 44724 a

1providing electric service to more than 1,000,000 customers in
2this State may, within the first 6 months after the effective
3date of this amendatory Act of 1997, file with the Commission
4proposed tariff sheets that eliminate, effective January 1,
51997, the public utility's fuel adjustment clause without
6adjusting its base rates, and such tariff sheets shall be
7effective upon filing. To the extent the application of the
8fuel adjustment clause had resulted in net charges to customers
9after January 1, 1997, the utility shall also file a tariff
10sheet that provides for a refund stated on a per kilowatt-hour
11basis of such charges over a period not to exceed 6 months;
12provided however, that such refund shall not include the
13proportional amounts of taxes paid under the Use Tax Act,
14Service Use Tax Act, Service Occupation Tax Act, and Retailers'
15Occupation Tax Act on fuel used in generation. The Commission
16shall issue an order within 45 days after the date of the
17public utility's filing approving or approving as modified such
18tariff sheet. If the fuel adjustment clause is eliminated
19pursuant to this subsection, the Commission shall not conduct
20the annual hearings specified in the last 3 sentences of
21subsection (a) of this Section for the utility for any period
22after December 31, 1996 and prior to any reinstatement of such
23clause. A public utility whose fuel adjustment clause has been
24eliminated pursuant to this subsection shall not file a
25proposed tariff sheet seeking, or otherwise petition the
26Commission for, reinstatement of the fuel adjustment clause

 

 

09600SB1927ham001- 24 -LRB096 11262 ASK 44724 a

1prior to January 1, 2007.
2    (f) Notwithstanding any contrary or inconsistent
3provisions in Section 9-201 of this Act, in subsection (a) of
4this Section, or in any rules or regulations promulgated by the
5Commission pursuant to subsection (g) of this Section, a public
6utility providing electric service to more than 500,000
7customers but fewer than 1,000,000 customers in this State may,
8within the first 6 months after the effective date of this
9amendatory Act of 1997, file with the Commission proposed
10tariff sheets that eliminate, effective January 1, 1997, the
11public utility's fuel adjustment clause and adjust its base
12rates by the amount necessary for the base fuel component of
13the base rates to recover 91% of the public utility's average
14fuel and power supply costs for the 2 most recent years for
15which the Commission, as of January 1, 1997, has issued final
16orders in annual proceedings pursuant to subsection (a), where
17the average fuel and power supply costs per kilowatt-hour shall
18be calculated as the sum of the public utility's prudent and
19allowable fuel and power supply costs as found by the
20Commission in the 2 proceedings divided by the public utility's
21actual jurisdictional kilowatt-hour sales for those 2 years,
22provided, that such tariff sheets shall be effective upon
23filing. To the extent the application of the fuel adjustment
24clause had resulted in net charges to customers after January
251, 1997, the utility shall also file a tariff sheet that
26provides for a refund stated on a per kilowatt-hour basis of

 

 

09600SB1927ham001- 25 -LRB096 11262 ASK 44724 a

1such charges over a period not to exceed 6 months. Provided
2however, that such refund shall not include the proportional
3amounts of taxes paid under the Use Tax Act, Service Use Tax
4Act, Service Occupation Tax Act, and Retailers' Occupation Tax
5Act on fuel used in generation. The Commission shall issue an
6order within 45 days after the date of the public utility's
7filing approving or approving as modified such tariff sheet. If
8the fuel adjustment clause is eliminated pursuant to this
9subsection, the Commission shall not conduct the annual
10hearings specified in the last 3 sentences of subsection (a) of
11this Section for the utility for any period after December 31,
121996 and prior to any reinstatement of such clause. A public
13utility whose fuel adjustment clause has been eliminated
14pursuant to this subsection shall not file a proposed tariff
15sheet seeking, or otherwise petition the Commission for,
16reinstatement of the fuel adjustment clause prior to January 1,
172007.
18    (g) The Commission shall have authority to promulgate rules
19and regulations to carry out the provisions of this Section.
20    (h) Any Illinois gas utility may enter into a contract on
21or before March 31, 2011 for up to 10 years of supply with any
22company for the purchase of substitute natural gas (SNG)
23produced from coal through the gasification process if the
24company has commenced construction of a coal gasification
25facility by July 1, 2012 in Jefferson County and commencement
26of construction shall mean that material physical site work has

 

 

09600SB1927ham001- 26 -LRB096 11262 ASK 44724 a

1occurred, such as site clearing and excavation, water runoff
2prevention, water retention reservoir preparation, or
3foundation development. The contract shall contain the
4following provisions: (i) at least 90% of feedstock the only
5coal to be used in the gasification process shall be coal with
6a has high volatile bituminous rank and greater than 1.7 pounds
7of sulfur per million Btu content; (ii) at the time the
8contract term commences, the price per million Btu may not
9exceed $7.95 in 2008 dollars, adjusted annually based on the
10change in the Annual Consumer Price Index for All Urban
11Consumers for the Midwest Region as published in April by the
12United States Department of Labor, Bureau of Labor Statistics
13(or a suitable Consumer Price Index calculation if this
14Consumer Price Index is not available) for the previous
15calendar year; provided that the price per million Btu shall
16not exceed $9.95 at any time during the contract; (iii) the
17utility's aggregate long-term supply contracts for the
18purchase of SNG do does not exceed 25% of the annual system
19supply requirements of the utility as of 2008 and the quantity
20of SNG supplied to a utility may not exceed 16 million MMBtus
21per year; and (iv) the contract costs pursuant to subsection
22(h-10) of this Section shall not include any lobbying expenses,
23charitable contributions, advertising, organizational
24memberships, carbon dioxide pipeline or sequestration
25expenses, or marketing expenses per year.
26    Any gas utility that is providing service to more than

 

 

09600SB1927ham001- 27 -LRB096 11262 ASK 44724 a

1150,000 customers on the effective date of this amendatory Act
2of the 96th General Assembly shall either elect to enter into a
3contract on or before March 31, 2011 for 10 years of SNG supply
4with the owner of a clean coal SNG gasification facility
5located in Jefferson County or to file biennial rate
6proceedings before the Commission in the years 2011, 2013, and
72015, with such filings made no later than August 1 of the
8years 2011, 2013 and 2015 consistent with all requirements of
983 Ill. Adm. Code 255 and 285 as though the gas utility were
10filing for an increase in its rates, without regard to whether
11such filing would produce an increase, a decrease, or no change
12in the gas utility's rates, and the Commission shall review the
13gas utility's filing and shall issue its order in accordance
14with the provisions of Section 9-201 of this Act.
15    Within 7 days after the effective date of this amendatory
16Act of the 96th General Assembly, the owner of the clean coal
17SNG facility in Jefferson County shall submit to the Illinois
18Power Agency and each gas utility that is providing service to
19more than 150,000 customers on the effective date of this
20amendatory Act of the 96th General Assembly a copy of a draft
21contract. Within 30 days after the receipt of the draft
22contract, each such gas utility shall provide the Illinois
23Power Agency and the owner of the clean coal SNG facility
24located in Jefferson County with its comments and recommended
25revisions to the draft contract. Within 7 days after the
26receipt of the gas utility's comments and recommended

 

 

09600SB1927ham001- 28 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 29 -LRB096 11262 ASK 44724 a

1    facility and other by-products produced by the facility, to
2    be included in the pricing formula. The Illinois Power
3    Agency shall approve the amount of budgeted miscellaneous
4    net revenue to be included in the pricing formula if it
5    determines the budgeted amount to be reasonable and
6    accurate; and
7        (4) allocate the nameplate capacity of the clean coal
8    SNG facility located in Jefferson County by total therms
9    sold to ultimate customers by each gas utility in 2008 and
10    adjusted only as required to take into account adverse
11    consolidation, derivative, or lease impacts to the balance
12    sheet or income statement of any purchasing utility, while
13    requiring that no utility shall be required to purchase
14    more than 42% of the projected annual output of the
15    facility.
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 shall adopt and make public a policy
26detailing the process for retaining a mediator under this

 

 

09600SB1927ham001- 30 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 31 -LRB096 11262 ASK 44724 a

1with the clean coal SNG facility located in Jefferson County.
2If an expert is retained by the Commission, then the clean coal
3SNG facility located in Jefferson County shall pay the expert's
4reasonable fees. The fees shall not be passed on to a utility
5or its customers. The Commission shall adopt and make public a
6policy detailing the process for retaining experts under this
7subsection (h).
8    Within 30 days after completion of its review, the
9Commission shall initiate a formal proceeding on the final
10capitalized plant cost of the clean coal SNG facility located
11in Jefferson County at which comments and testimony may be
12submitted by any interested parties and the public. If the
13Commission finds that the final capitalized plant cost includes
14costs that were not actually incurred or costs that were
15unreasonably incurred, then the Commission shall disallow the
16amount of non-incurred or unreasonable costs from the SNG price
17under contracts entered into under this subsection (h). If the
18Commission disallows any costs, then the Commission shall
19adjust the SNG price using the price formula in the contract
20approved by the Illinois Power Agency under this subsection (h)
21to reflect the disallowed costs and shall enter an order
22specifying the revised price. In addition, the Commission's
23order shall direct the clean coal SNG facility located in
24Jefferson County to issue refunds of such sums as shall
25represent the difference between actual gross revenues and the
26gross revenue that would have been obtained based upon the same

 

 

09600SB1927ham001- 32 -LRB096 11262 ASK 44724 a

1volume, from the price revised by the Commission. Any refund
2shall include interest calculated at a rate determined by the
3Commission and shall be returned according to procedures
4prescribed by the Commission.
5    Nothing in this subsection (h) shall preclude any party
6affected by a decision of the Commission under this subsection
7(h) from seeking judicial review of the Commission's decision.
8    (h-1) Any Illinois gas utility may enter into a sourcing
9agreement for up to 30 years of supply with the clean coal SNG
10brownfield facility if the clean coal SNG brownfield facility
11has commenced construction. Any gas utility that is providing
12service to more than 150,000 customers on the effective date of
13this amendatory Act of the 96th General Assembly shall either
14elect to file biennial rate proceedings before the Commission
15in the years 2011, 2013, and 2015 or enter into a sourcing
16agreement or sourcing agreements with a clean coal SNG
17brownfield facility for 30 years for either (i) 43,500,000,000
18cubic feet per year times a percentage calculated by dividing
19100 by the number of utilities entering into sourcing
20agreements with the clean coal SNG brownfield facility or (ii)
21such lesser amount as may be available from the clean coal SNG
22brownfield facility.
23    Provided, however, that the Illinois Power Agency may
24allocate the purchase obligations more proportionately based
25upon total therms sold to ultimate customers, if it is
26demonstrated with certainty that such alternative allocation

 

 

09600SB1927ham001- 33 -LRB096 11262 ASK 44724 a

1will not result in adverse consolidation, derivative, or lease
2impacts to the balance sheet or income statement of any
3purchasing utility. In any event, no utility shall be required
4to purchase more than 42% of the projected annual output of the
5clean coal SNG brownfield facility, with the remainder of such
6utility's obligation to be divided proportionately between the
7other utilities.
8    A gas utility electing to file biennial rate proceedings
9before the Commission must file a notice of its election with
10the Commission within 60 days after the effective date of this
11amendatory Act of the 96th General Assembly or its right to
12make the election is irrevocably waived. A gas utility electing
13to file biennial rate proceedings shall make such filings no
14later than August 1 of the years 2011, 2013, and 2015,
15consistent with all requirements of 83 Ill. Adm. Code 255 and
16285 as though the gas utility were filing for an increase in
17its rates, without regard to whether such filing would produce
18an increase, a decrease, or no change in the gas utility's
19rates, and the Commission shall review the gas utility's filing
20and shall issue its order in accordance with the provisions of
21Section 9-201 of this Act.
22    Within 15 days after the effective date of this amendatory
23Act of the 96th General Assembly, the owner of the clean coal
24SNG brownfield facility shall submit to the Illinois Power
25Agency and each gas utility that is providing service to more
26than 150,000 customers on the effective date of this amendatory

 

 

09600SB1927ham001- 34 -LRB096 11262 ASK 44724 a

1Act of the 96th General Assembly a copy of a draft sourcing
2agreement. Within 45 days after receipt of the draft sourcing
3agreement, each such gas utility shall provide the Illinois
4Power Agency and the owner of a clean coal SNG brownfield
5facility with its comments and recommended revisions to the
6draft sourcing agreement. Within 15 days after the receipt of
7the gas utility's comments and recommended revisions, the owner
8of the clean coal SNG brownfield facility shall submit its
9responsive comments and a further revised draft of the sourcing
10agreement to the Illinois Power Agency. The Illinois Power
11Agency shall review the draft sourcing agreement and comments.
12    If the parties to the sourcing agreement do not agree on
13the terms therein, then the Illinois Power Agency shall retain
14an independent mediator to mediate the dispute between the
15parties. If the parties are in agreement on the terms of the
16sourcing agreement, the Illinois Power Agency shall approve the
17final draft sourcing agreement. If after mediation the parties
18have failed to come to agreement, then the Illinois Power
19Agency shall revise the draft sourcing agreement as necessary
20to confirm that the final draft sourcing agreement contains
21only terms that are reasonable and equitable. The Illinois
22Power Agency shall adopt and make public a policy detailing the
23process for retaining a mediator under this subsection (h-1).
24Any mediator retained to assist with mediating disputes between
25the parties regarding the sourcing agreement shall be retained
26no later than 60 days after the effective date of this

 

 

09600SB1927ham001- 35 -LRB096 11262 ASK 44724 a

1amendatory Act of the 96th General Assembly.
2    Upon approval of a final draft agreement, the Illinois
3Power Agency shall submit the final draft agreement to the
4Capital Development Board and the Commission no later than 90
5days after the effective date of this amendatory Act of the
696th General Assembly. The gas utility and the clean coal SNG
7brownfield facility shall pay a reasonable fee as required by
8the Illinois Power Agency for its services under this
9subsection (h-1) and shall pay the mediator's reasonable fees,
10if any. The Illinois Power Agency shall adopt and make public a
11policy detailing the process for retaining a mediator under
12this Section.
13    The sourcing agreement between a gas utility and the clean
14coal SNG brownfield facility shall contain the following
15provisions:
16        (1) Any and all coal used in the gasification process
17    must be coal that has high volatile bituminous rank and
18    greater than 1.7 pounds of sulfur per million Btu content.
19        (2) Coal and petroleum coke are feedstocks for the
20    gasification process, with coal comprising at least 50% of
21    the total feedstock over the term of the sourcing agreement
22    and with the feedstocks to be procured in accordance with
23    requirements of Section 1-78 of the Illinois Power Agency
24    Act.
25        (3) The sourcing agreement once entered into
26    terminates no more than 30 years after the commencement of

 

 

09600SB1927ham001- 36 -LRB096 11262 ASK 44724 a

1    the commercial production of SNG at the clean coal SNG
2    brownfield facility.
3        (4) The clean coal SNG brownfield facility guarantees a
4    minimum of $100,000,000 in consumer savings, calculated in
5    real 2010 dollars at the conclusion of the term of the
6    sourcing agreement by comparing the delivered SNG price to
7    the Chicago City-gate price on a weighted daily basis for
8    each day over the entire term of the sourcing agreement, to
9    be provided in accordance with subsection (h-2) of this
10    Section.
11        (5) Prior to the clean coal SNG brownfield facility
12    issuing a notice to proceed to construction, the clean coal
13    SNG brownfield facility shall establish a consumer
14    protection reserve account for the benefit of the customers
15    of the utilities that have entered into sourcing agreements
16    with the clean coal SNG brownfield facility pursuant to
17    this subsection (h-1), with cash principal in the amount of
18    $150,000,000. This cash principal shall only be
19    recoverable through the consumer protection reserve
20    account and not as a cost to be recovered in the delivered
21    SNG price pursuant to subsection (h-3) of this Section. The
22    consumer protection reserve account shall be maintained
23    and administered by an independent trustee that is mutually
24    agreed upon by the clean coal SNG brownfield facility, the
25    utilities, and the Commission in an interest-bearing
26    account in accordance with subsection (h-2) of this

 

 

09600SB1927ham001- 37 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 38 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 39 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 40 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 41 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 42 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 43 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 44 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 45 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 46 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 47 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 48 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 49 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 50 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 51 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 52 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 53 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 54 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 55 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 56 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 57 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 58 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 59 -LRB096 11262 ASK 44724 a

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

 

 

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1State of Illinois, may specifically enforce the requirements of
2this subsection (h-5). Sourcing All contracts under subsection
3(h) of this Act and all sourcing agreements under subsection
4(h-1) of this Act, regardless of duration, shall require the
5owner of any facility supplying SNG under the contract or
6sourcing agreement to provide documentation to the Commission
7each year, starting in the facility's first year of commercial
8operation, accurately reporting the quantity of carbon dioxide
9emissions from the facility that have been captured and
10sequestered and reporting any quantities of carbon dioxide
11released from the site or sites at which carbon dioxide
12emissions were sequestered in prior years, based on continuous
13monitoring of those sites. If, in any year, the owner of the
14facility described in subsection (h) of this Act fails to
15demonstrate that the facility captured and sequestered at least
1690% of the total carbon dioxide emissions that the facility
17would otherwise emit or that sequestration of emissions from
18prior years has failed, resulting in the release of carbon
19dioxide into the atmosphere, then the owner of the facility
20must offset excess emissions. Any such carbon dioxide offsets
21must be permanent, additional, verifiable, real, located
22within the State of Illinois, and legally and practicably
23enforceable; provided that the owner of the facility described
24in subsection (h) of this Act shall not be obligated to acquire
25carbon dioxide emission offsets to the extent that the cost of
26acquiring such offsets would exceed $40 million in any given

 

 

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1year. No costs of any purchases of carbon offsets may be
2recovered from a utility or its customers. All carbon offsets
3purchased for this purpose must be permanently retired.
4    If, in any year, the owner of a clean coal SNG brownfield
5facility fails to demonstrate that the clean coal SNG
6brownfield facility captured and sequestered at least 85% of
7the total carbon dioxide emissions that the facility would
8otherwise emit, then the owner of the clean coal SNG brownfield
9facility must pay a penalty of $20 per ton of excess carbon
10emissions up to $20,000,000, which shall be deposited into the
11Energy Efficiency Trust Fund and distributed pursuant to
12subsection (b) of Section 6-6 of the Renewable Energy, Energy
13Efficiency, and Coal Resources Development Law of 1997.
14Provided, however, to the extent that the owner of the clean
15coal SNG brownfield facility can demonstrate that the failure
16was as a result of acts of God (including fire, flood,
17earthquake, tornado, lightning, hurricane, or other natural
18disaster); any amendment, modification, or abrogation of any
19applicable law or regulation that would prevent performance;
20war; invasion; act of foreign enemies; hostilities (regardless
21of whether war is declared); civil war; rebellion; revolution;
22insurrection; military or usurped power or confiscation;
23terrorist activities; civil disturbances; riots;
24nationalization; sabotage; blockage; or embargo, the owner of
25the clean coal SNG brownfield facility shall not be subject to
26a penalty if and only if (i) it promptly provides notice of its

 

 

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

 

 

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1court with regard to the Attorney General's action for specific
2performance under this subsection (h-5).
3    In addition, carbon dioxide emission credits equivalent to
450% of the amount of credits associated with the required
5sequestration of carbon dioxide from the facility must be
6permanently retired. Compliance with the sequestration
7requirements and the offset purchase requirements specified in
8this subsection (h-5) for the facility described in subsection
9(h) of this Act shall be assessed annually by an independent
10expert retained by the owner of the facility described in
11subsection (h) of this Act, with the advance written approval
12of the Attorney General. Compliance with the sequestration
13requirements and penalty requirements specified in this
14subsection (h-5) for the clean coal SNG brownfield facility
15shall be assessed annually by the Commission, which may in its
16discretion retain an expert to facilitate its assessment. If an
17expert is retained by the Commission, then the clean coal SNG
18brownfield facility shall pay for the expert's reasonable fees,
19and such costs shall not be passed through to a utility or its
20customers. A SNG facility operating pursuant to this subsection
21(h-5) shall not forfeit its designation as a clean coal SNG
22facility or a clean coal SNG brownfield facility if the
23facility fails to fully comply with the applicable carbon
24sequestration requirements in any given year, provided the
25requisite offsets are purchased or requisite penalties are
26paid.

 

 

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

 

 

09600SB1927ham001- 65 -LRB096 11262 ASK 44724 a

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

 

 

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1located in Jefferson County captured and sequestered more than
290% of the total carbon emissions that the facility would
3otherwise emit, then the owner of the facility may credit such
4additional amounts to reduce the amount of any future penalty
5to be paid. The penalty resulting from the failure to capture
6and sequester at least the minimum amount of carbon dioxide
7shall not be passed on to a utility or its customers.
8    In addition to any penalty for the clean coal facility
9located in Jefferson County failing to capture and sequester at
10least its minimum sequestration requirement, the Attorney
11General, on behalf of the People of the State of Illinois,
12shall bring an action for specific performance of this
13subsection (h-6). Such action may be filed in any circuit court
14in Illinois. By entering into a contract pursuant to subsection
15(h) of this Section, the clean coal SNG facility located in
16Jefferson County agrees to waive any objections to venue or to
17the jurisdiction of the court with regard to the Attorney
18General's action for specific performance under this
19subsection (h-6).
20    Compliance with the sequestration requirements and any
21penalty requirements specified in this subsection (h-6) for the
22clean coal SNG facility located in Jefferson County shall be
23assessed annually by the Commission, which may in its
24discretion retain an expert to facilitate its assessment. If
25any expert is retained by the Commission, then the clean coal
26SNG facility located in Jefferson County shall pay for the

 

 

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

 

 

09600SB1927ham001- 68 -LRB096 11262 ASK 44724 a

1    (h-7) Sequestration permitting, oversight, and
2investigations.
3        (1) No clean coal facility or clean coal SNG brownfield
4    facility may transport or sequester carbon dioxide unless
5    the Commission approves the method of carbon dioxide
6    transportation or sequestration. Such approval shall be
7    required regardless of whether the facility has contracted
8    with another to transport or sequester the carbon dioxide.
9    Nothing in this subsection (h-7) shall release the owner or
10    operator of a carbon dioxide sequestration site or carbon
11    dioxide pipeline from any other permitting requirements
12    under applicable State and federal laws, statutes, rules,
13    or regulations.
14        (2) The Commission shall review carbon dioxide
15    transportation and sequestration methods proposed by a
16    clean coal facility or a clean coal SNG brownfield facility
17    and shall approve those methods it deems reasonable and
18    cost-effective. For purposes of this review,
19    "cost-effective" means a commercially reasonable price for
20    similar carbon dioxide transportation or sequestration
21    techniques. In determining whether sequestration is
22    reasonable and cost-effective, the Commission may consult
23    with the Illinois State Geological Survey and retain third
24    parties to assist in its determination, provided that such
25    third parties shall not own or control any direct or
26    indirect interest in the facility that is proposing the

 

 

09600SB1927ham001- 69 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 70 -LRB096 11262 ASK 44724 a

1    Illinois Oil and Gas Act; or (iii) a permit similar to
2    items (i) or (ii) from the state in which the sequestration
3    site is located if the sequestration will take place
4    outside of Illinois. The Commission shall approve or deny
5    the carbon dioxide transportation or sequestration method
6    within 90 days after the receipt of all required
7    information.
8        (3) At least annually, the Illinois Environmental
9    Protection Agency shall inspect all carbon dioxide
10    sequestration sites in Illinois. The Illinois
11    Environmental Protection Agency may, as often as deemed
12    necessary, monitor and conduct investigations of those
13    sites. The owner or operator of the sequestration site must
14    cooperate with the Illinois Environmental Protection
15    Agency investigations of carbon dioxide sequestration
16    sites.
17        If the Illinois Environmental Protection Agency
18    determines at any time a site creates conditions that
19    warrant the issuance of a seal order under Section 34 of
20    the Environmental Protection Act, then the Illinois
21    Environmental Protection Agency shall seal the site
22    pursuant to the Environmental Protection Act. If the
23    Illinois Environmental Protection Agency determines at any
24    time a carbon dioxide sequestration site creates
25    conditions that warrant the institution of a civil action
26    for an injunction under Section 43 of the Environmental

 

 

09600SB1927ham001- 71 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 72 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 73 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 74 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 75 -LRB096 11262 ASK 44724 a

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

 

 

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

 

 

09600SB1927ham001- 77 -LRB096 11262 ASK 44724 a

1    the clean coal SNG facility located in Jefferson County
2    over the preceding 12 months, plus the cost to the utility
3    of the required transportation and storage services of SNG,
4    divided by the total number of MMBtus of SNG actually
5    purchased from the clean coal SNG facility located in
6    Jefferson County in the preceding 12 months under the
7    utility contract; (ii) the average annual natural gas
8    purchase cost, which shall be calculated as the total
9    annual supply costs paid for natural gas (excluding any
10    SNG) purchased by such utility over the preceding 12 months
11    plus the costs of transportation and storage services of
12    such natural gas (excluding such costs for SNG), divided by
13    the total number of MMbtus of natural gas (excluding SNG)
14    actually purchased by the utility during the year; (iii)
15    the cost differential, which shall be the difference
16    between the average annual contract SNG cost and the
17    average annual natural gas purchase cost; and (iv) the
18    revenue share target which shall be the cost differential
19    multiplied by the total amount of SNG purchased over the
20    preceding 12 months under such utility contract.
21            (A) To the extent the annual average contract SNG
22        cost is less than the annual average natural gas
23        purchase cost the utility shall credit an amount equal
24        to the revenue share target to the reconciliation
25        account. Such credit payment shall be made within 30
26        days after the completed analysis in this subsection

 

 

09600SB1927ham001- 78 -LRB096 11262 ASK 44724 a

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

 

 

09600SB1927ham001- 79 -LRB096 11262 ASK 44724 a

1    customers and has distributed 50% of any additional amount
2    in the account to the utilities, then the owners of the
3    clean coal SNG facility located in Jefferson County shall
4    have no further obligation to the utility or the retail
5    customers.
6        If, at the conclusion of the term of the contracts
7    pursuant to subsection (h) and the completion of the final
8    annual analysis pursuant to this subsection (h-15), the
9    facility owes any amount to retail customers and the
10    account has been depleted, then the clean coal SNG facility
11    located in Jefferson County shall be liable for any
12    remaining amount owed to the retail customers. The clean
13    coal SNG facility located in Jefferson County shall market
14    the daily production of SNG and distribute on a monthly
15    basis 5% of the amounts collected with respect to such
16    future sales to the utilities in proportion to each
17    utility's SNG contract to be used to reduce the utility's
18    natural gas costs through the purchase gas adjustment
19    clause; such payments to the utility shall continue until
20    either 15 years after the conclusion of the contract or
21    such time as the sum of such payments equals the remaining
22    amount owed to the retail customers at the end of the
23    contract, whichever is earlier. If the debt to the retail
24    customers is not repaid within 15 years after the
25    conclusion of the contract, then the owner of the clean
26    coal SNG facility located in Jefferson County must sell the

 

 

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1    facility, and all proceeds from that sale must be used to
2    repay any amount owed to the retail customers under this
3    subsection (h-15).
4        The retail customers shall have first priority in
5    recovering that debt above any creditors, except the
6    secured lenders to the extent that the secured lenders have
7    any secured debt outstanding, including any parent
8    companies or affiliates of the clean coal SNG facility
9    located in Jefferson County.
10        (3) 50% of all additional net revenue, defined as
11    miscellaneous net revenue after cost allowance and above
12    the budgeted estimate established for revenue pursuant to
13    subsection (h), including sale of substitute natural gas
14    derived from the clean coal SNG facility located in
15    Jefferson County above the nameplate capacity of the
16    facility and other by-products produced by the facility,
17    shall be credited to the reconciliation account on an
18    annual basis with such payment made within 30 days after
19    the end of each calendar year during the term of the
20    contract.
21        (4) The clean coal SNG facility located in Jefferson
22    County shall each year, starting in the facility's first
23    year of commercial operation, file with the Commission, in
24    such form as the Commission shall require, a report as to
25    the reconciliation account. The annual report must contain
26    the following information:

 

 

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

 

 

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1reports shall be preserved in the office of the Commission. The
2Commission shall publish an annual summary of the reports prior
3to February 1 of the following year. The annual summary shall
4be made available to the public on the Commission's website and
5shall be submitted to the General Assembly.
6    Any facility that fails to file the report required under
7this paragraph (4) to the Commission within the time specified
8or to make specific answer to any question propounded by the
9Commission within 30 days after the time it is lawfully
10required to do so, or within such further time not to exceed 90
11days as may be allowed by the Commission in its discretion,
12shall pay a penalty of $500 to the Commission for each day it
13is in default.
14    Any person who willfully makes any false report to the
15Commission or to any member, officer, or employee thereof, any
16person who willfully in a report withholds or fails to provide
17material information to which the Commission is entitled under
18this paragraph (4) and which information is either required to
19be filed by statute, rule, regulation, order, or decision of
20the Commission or has been requested by the Commission, and any
21person who willfully aids or abets such person shall be guilty
22of a Class A misdemeanor. With respect to each contract entered
23into by the company with an Illinois utility in accordance with
24the terms stated in subsection (h) of this Section, within 60
25days following the completion of purchases of SNG, the Illinois
26Power Agency shall conduct an analysis to determine (i) the

 

 

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1average contract SNG cost, which shall be calculated as the
2total amount paid to a company for SNG over the contract term,
3plus the cost to the utility of the required transportation and
4storage services of SNG, divided by the total number of MMBtus
5of SNG actually purchased under the utility contract; (ii) the
6average natural gas purchase cost, which shall be calculated as
7the total annual supply costs paid for natural gas (excluding
8SNG) purchased by such utility over the contract term, plus the
9costs of transportation and storage services of such natural
10gas (excluding such costs for SNG), divided by the total number
11of MMBtus of natural gas (excluding SNG) actually purchased by
12the utility during the contract term; (iii) the cost
13differential, which shall be the difference between the average
14contract SNG cost and the average natural gas purchase cost;
15and (iv) the revenue share target, which shall be the cost
16differential multiplied by the total amount of SNG purchased
17under such utility contract. If the average contract SNG cost
18is equal to or less than the average natural gas purchase cost,
19then the company shall have no further obligation to the
20utility. If the average contract SNG cost for such SNG contract
21is greater than the average natural gas purchase cost for such
22utility, then the company shall market the daily production of
23SNG and distribute on a monthly basis 5% of amounts collected
24with respect to such future sales to the utilities in
25proportion to each utility's SNG purchases from the company
26during the term of the SNG contract to be used to reduce the

 

 

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1utility's natural gas costs through the purchased gas
2adjustment clause; such payments to the utility shall continue
3until such time as the sum of such payments equals the revenue
4share target of that utility. The company or utilities shall
5have no obligation to repay the revenue share target except as
6provided for in this subsection (h-15).
7    (h-20) The General Assembly authorizes the Illinois
8Finance Authority to issue bonds to the maximum extent
9permitted to finance coal gasification facilities described in
10this Section, which constitute both "industrial projects"
11under Article 801 of the Illinois Finance Authority Act and
12"clean coal and energy projects" under Sections 825-65 through
13825-75 of the Illinois Finance Authority Act.
14    Administrative costs incurred by the Illinois Finance
15Authority in performance of this subsection (h-20) shall be
16subject to reimbursement by the clean coal SNG facility located
17in Jefferson County on terms as the Illinois Finance Authority
18and the clean coal SNG facility located in Jefferson County may
19agree. The utility and its customers shall have no obligation
20to reimburse the clean coal SNG facility located in Jefferson
21County or the Illinois Finance Authority of any such costs. The
22General Assembly authorizes the Illinois Finance Authority to
23issue bonds to the maximum extent permitted to finance coal
24gasification facilities described in this Section, which
25constitute both "industrial projects" under Article 801 of the
26Illinois Finance Authority Act and "clean coal and energy

 

 

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

 

 

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1facility located in Jefferson County. The beneficiaries are
2authorized to include and refer to these pledges in any finance
3agreement into which they may enter in regard to such
4contracts.
5    (h-30) The State of Illinois retains and reserves all other
6rights to enact new or amendatory legislation or take any other
7action, including, but not limited to, such legislation or
8other action that would (1) directly or indirectly raise the
9costs that the clean coal SNG facility must incur; (2) directly
10or indirectly place additional restrictions, regulations, or
11requirements on the clean coal SNG facility; (3) prohibit
12sequestration in general or prohibit a specific sequestration
13method or project; or (4) increase minimum sequestration
14requirements.
15    (i) If a gas utility or an affiliate of a gas utility has
16an ownership interest in any entity that produces or sells
17synthetic natural gas, Article VII of this Act shall apply.
18(Source: P.A. 95-1027, eff. 6-1-09; 96-1364, eff. 7-28-10;
1909600SB3388ham001, ham002, and ham003.)
 
20    Section 95.Rulemaking. The Illinois Power Agency and the
21Commission shall have rulemaking authority to implement the
22provisions of this amendatory Act of the 96th General Assembly.
 
23    Section 97. Inseverability. The provisions of this Act are
24mutually dependent and inseverable. If any provision is held

 

 

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1invalid, then this entire Act, including all new and amendatory
2provisions, is invalid.
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law or on the effective date of Senate Bill 3388 of
5the 96th General Assembly, whichever is later.".