Rep. Ann Williams

Filed: 5/23/2011

 

 


 

 


 
09700SB1653ham001LRB097 05721 ASK 56016 a

1
AMENDMENT TO SENATE BILL 1653

2    AMENDMENT NO. ______. Amend Senate Bill 1653 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This amendatory Act may be
5referred to as the Illinois Renewable Electricity Resources
6Act.
 
7    Section 5. The Illinois Power Agency Act is amended by
8changing Sections 1-10, 1-20, 1-56, and 1-75 and by adding
9Sections 1-76, 1-76.5, 1-77, 1-78, and 1-79 as follows:
 
10    (20 ILCS 3855/1-10)
11    Sec. 1-10. Definitions.
12    "Agency" means the Illinois Power Agency.
13    "Agency loan agreement" means any agreement pursuant to
14which the Illinois Finance Authority agrees to loan the
15proceeds of revenue bonds issued with respect to a project to

 

 

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1the Agency upon terms providing for loan repayment installments
2at least sufficient to pay when due all principal of, interest
3and premium, if any, on those revenue bonds, and providing for
4maintenance, insurance, and other matters in respect of the
5project.
6    "Authority" means the Illinois Finance Authority.
7    "Bundled renewable energy resources" means electricity
8generated by a renewable energy resource and its associated
9renewable energy credit.
10    "Clean coal electricity buyer" means (1) each electric
11utility and (2) each alternative electric retail supplier that
12is subject to the requirements of subsection (d) of Section
131-75 of this Act and paragraph (5) of subsection (d) of Section
1416-115 of the Public Utilities Act.
15    "Clean coal energy" means all energy produced by the
16initial clean coal facility.
17    "Clean coal facility" means an electric generating
18facility that uses primarily coal as a feedstock and that
19captures and sequesters carbon dioxide emissions at the
20following levels: at least 50% of the total carbon dioxide
21emissions that the facility would otherwise emit if, at the
22time construction commences, the facility is scheduled to
23commence operation before 2016, at least 70% of the total
24carbon dioxide emissions that the facility would otherwise emit
25if, at the time construction commences, the facility is
26scheduled to commence operation during 2016 or 2017, and at

 

 

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1least 90% of the total carbon dioxide emissions that the
2facility would otherwise emit if, at the time construction
3commences, the facility is scheduled to commence operation
4after 2017. The power block of the clean coal facility shall
5not exceed allowable emission rates for sulfur dioxide,
6nitrogen oxides, carbon monoxide, particulates and mercury for
7a natural gas-fired combined-cycle facility the same size as
8and in the same location as the clean coal facility at the time
9the clean coal facility obtains an approved air permit. All
10coal used by a clean coal facility shall have high volatile
11bituminous rank and greater than 1.7 pounds of sulfur per
12million btu content, unless the clean coal facility does not
13use gasification technology and was operating as a conventional
14coal-fired electric generating facility on June 1, 2009 (the
15effective date of Public Act 95-1027).
16    "Clean coal fraction" means, with respect to a clean coal
17electricity buyer for a month, a fraction, the numerator of
18which is such clean coal electricity buyer's retail market
19sales of electricity (expressed in kilowatthours sold) in the
20State during the third month preceding the applicable month and
21the denominator of which is the total retail market sales of
22electricity (expressed in kilowatthours sold) in the State by
23all clean coal electricity buyers during such third month
24preceding the applicable month, as such fraction may be
25adjusted pursuant to subparagraph (E) of paragraph (2) of
26subsection (d) of Section 1-75 of this Act.

 

 

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1    "Clean coal SNG facility" means a facility that uses a
2gasification process to produce substitute natural gas, that
3sequesters at least 90% of the total carbon dioxide emissions
4that the facility would otherwise emit and that uses petroleum
5coke or coal as a feedstock, with all such coal having a high
6bituminous rank and greater than 1.7 pounds of sulfur per
7million btu content.
8    "Commission" means the Illinois Commerce Commission.
9    "Costs incurred in connection with the development and
10construction of a facility" means:
11        (1) the cost of acquisition of all real property and
12    improvements in connection therewith and equipment and
13    other property, rights, and easements acquired that are
14    deemed necessary for the operation and maintenance of the
15    facility;
16        (2) financing costs with respect to bonds, notes, and
17    other evidences of indebtedness of the Agency;
18        (3) all origination, commitment, utilization,
19    facility, placement, underwriting, syndication, credit
20    enhancement, and rating agency fees;
21        (4) engineering, design, procurement, consulting,
22    legal, accounting, title insurance, survey, appraisal,
23    escrow, trustee, collateral agency, interest rate hedging,
24    interest rate swap, capitalized interest and other
25    financing costs, and other expenses for professional
26    services; and

 

 

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1        (5) the costs of plans, specifications, site study and
2    investigation, installation, surveys, other Agency costs
3    and estimates of costs, and other expenses necessary or
4    incidental to determining the feasibility of any project,
5    together with such other expenses as may be necessary or
6    incidental to the financing, insuring, acquisition, and
7    construction of a specific project and placing that project
8    in operation.
9    "Delivery services" has the same definition as found in
10Section 16-102 of the Public Utilities Act.
11    "Delivery services non-eligible retail customers" means
12the retail customers in an electric utility's service area for
13which the electric utility provides delivery services, but
14which are not eligible retail customers as defined in
15subsection (a) of Section 1-75 of this Act.
16    "Department" means the Department of Commerce and Economic
17Opportunity.
18    "Director" means the Director of the Illinois Power Agency.
19    "Demand-response" means measures that decrease peak
20electricity demand or shift demand from peak to off-peak
21periods.
22    "Distributed renewable energy generation device" means a
23device that is:
24        (1) powered by wind, solar thermal energy,
25    photovoltaic cells and panels, biodiesel, crops and
26    untreated and unadulterated organic waste biomass, tree

 

 

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1    waste, and hydropower that does not involve new
2    construction or significant expansion of hydropower dams;
3        (2) interconnected at the distribution system level of
4    either an electric utility as defined in this Section, an
5    alternative retail electric supplier as defined in Section
6    16-102 of the Public Utilities Act, a municipal utility as
7    defined in Section 3-105 of the Public Utilities Act, or a
8    rural electric cooperative as defined in Section 3-119 of
9    the Public Utilities Act; and
10        (3) located on the customer side of the customer's
11    electric meter and is generally used to offset that
12    customer's electricity load.
13    "Energy efficiency" means measures that reduce the amount
14of electricity or natural gas required to achieve a given end
15use.
16    "Electric utility" has the same definition as found in
17Section 16-102 of the Public Utilities Act.
18    "Excluded renewable energy resources contract costs" means
19the amount by which the costs of renewable energy resources,
20purchased for a particular year to meet the renewable energy
21resources standards of paragraph (1) of subsection (c) of
22Section 1-75 of this Act applicable to the load of an electric
23utility's eligible retail customers pursuant to a contract with
24a term greater than one year that the electric utility entered
25into in a previous year in accordance with a procurement
26approved by the Commission pursuant to Section 16-111.5 of the

 

 

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1Public Utilities Act, exceed the limitations imposed by
2paragraph (2) of subsection (c) of Section 1-75 of this Act for
3the particular year.
4    "Facility" means an electric generating unit or a
5co-generating unit that produces electricity along with
6related equipment necessary to connect the facility to an
7electric transmission or distribution system.
8    "Governmental aggregator" means one or more units of local
9government that individually or collectively procure
10electricity to serve residential retail electrical loads
11located within its or their jurisdiction.
12    "Initial clean coal facility" means an electric generating
13facility using gasification technology that: (1) has a
14nameplate capacity of at least 500 MW; (2) irrevocably commits
15in its proposed sourcing agreement to use coal for at least 50%
16of the total feedstock over the term of a sourcing agreement,
17with all coal having high volatile bituminous rank and greater
18than 1.7 pounds of sulfur per million btu content; (3) is
19designed to capture and sequester at least 90% of the carbon
20dioxide emissions that the portion of the facility, if any,
21that produces SNG would otherwise emit and at least 50% of the
22total carbon dioxide emissions that the facility as a whole
23would otherwise emit; (4) absent an appeal of a permit or
24regulatory order, is reasonably capable of achieving
25commercial operation by no later than 5 years after the
26execution of the sourcing agreements; (5) has a feasible

 

 

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1financing plan; (6) has a reliable and cost-effective
2transmission plan to deliver energy to Commonwealth Edison
3Company and Ameren Illinois; and (7) has a power block designed
4not to exceed allowable emission rates for sulfur dioxide,
5nitrogen oxides, carbon monoxide, particulates, and mercury
6for a natural gas-fired combined-cycle facility the same size
7as and in the same location as the electric generating facility
8at the time the electric generating facility obtains an
9approved air permit.
10    "Large electric customer" means a customer that (1) obtains
11retail electric service in the State from an electric utility
12or an alternative retail electric supplier and (2) is not a
13small electric customer.
14    "Local government" means a unit of local government as
15defined in Article VII of Section 1 of the Illinois
16Constitution.
17    "Municipality" means a city, village, or incorporated
18town.
19    "Person" means any natural person, firm, partnership,
20corporation, either domestic or foreign, company, association,
21limited liability company, joint stock company, or association
22and includes any trustee, receiver, assignee, or personal
23representative thereof.
24    "Project" means the planning, bidding, and construction of
25a facility.
26    "Public utility" has the same definition as found in

 

 

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

 

 

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1indebtedness issued by the Authority, the principal and
2interest of which is payable solely from revenues or income
3derived from any project or activity of the Agency.
4    "Sequester" means permanent storage of carbon dioxide by
5injecting it into a saline aquifer, a depleted gas reservoir,
6or an oil reservoir, directly or through an enhanced oil
7recovery process that may involve intermediate storage in a
8salt dome.
9    "Servicing agreement" means (i) in the case of an electric
10utility, an agreement between the owner of a clean coal
11facility and such electric utility, which agreement shall have
12terms and conditions meeting the requirements of paragraph (3)
13of subsection (d) of Section 1-75, and (ii) in the case of an
14alternative retail electric supplier, an agreement between the
15owner of a clean coal facility and such alternative retail
16electric supplier, which agreement shall have terms and
17conditions meeting the requirements of Section 16-115(d)(5) of
18the Public Utilities Act.
19    "Small electric customer" means a residential retail
20electric customer that obtains electric service in the State
21from an electric utility or an alternative retail electric
22supplier.
23    "Substitute natural gas" or "SNG" means a gas manufactured
24by gasification of hydrocarbon feedstock, which is
25substantially interchangeable in use and distribution with
26conventional natural gas.

 

 

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1    "Total resource cost test" or "TRC test" means a standard
2that is met if, for an investment in energy efficiency or
3demand-response measures, the benefit-cost ratio is greater
4than one. The benefit-cost ratio is the ratio of the net
5present value of the total benefits of the program to the net
6present value of the total costs as calculated over the
7lifetime of the measures. A total resource cost test compares
8the sum of avoided electric utility costs, representing the
9benefits that accrue to the system and the participant in the
10delivery of those efficiency measures, as well as other
11quantifiable societal benefits, including avoided natural gas
12utility costs, to the sum of all incremental costs of end-use
13measures that are implemented due to the program (including
14both utility and participant contributions), plus costs to
15administer, deliver, and evaluate each demand-side program, to
16quantify the net savings obtained by substituting the
17demand-side program for supply resources. In calculating
18avoided costs of power and energy that an electric utility
19would otherwise have had to acquire, reasonable estimates shall
20be included of financial costs likely to be imposed by future
21regulations and legislation on emissions of greenhouse gases.
22(Source: P.A. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09;
2395-1027, eff. 6-1-09; 96-33, eff. 7-10-09; 96-159, eff.
248-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10.)
 
25    (20 ILCS 3855/1-20)

 

 

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1    Sec. 1-20. General powers of the Agency.
2    (a) The Agency is authorized to do each of the following:
3        (1) Develop electricity procurement plans to ensure
4    adequate, reliable, affordable, efficient, and
5    environmentally sustainable electric service at the lowest
6    total cost over time, taking into account any benefits of
7    price stability, for electric utilities that on December
8    31, 2005 provided electric service to at least 100,000
9    customers in Illinois. The procurement plans shall be
10    updated on an annual basis and shall include electricity
11    generated from renewable resources sufficient to achieve
12    the standards specified in this Act. For periods beginning
13    on and after June 1, 2012, the procurement plans shall also
14    include procurement of renewable energy credits, in
15    accordance with subsection (c) of Section 1-75 of this Act,
16    in amounts projected to be sufficient to meet the renewable
17    energy resources standard specified in subsection (c) of
18    Section 1-75 of this Act with respect to the kilowatthour
19    usage of delivery services non-eligible retail customers
20    in such electric utilities' service areas.
21        (2) Conduct competitive procurement processes to
22    procure the supply resources identified in the procurement
23    plan, pursuant to Section 16-111.5 of the Public Utilities
24    Act.
25        (3) Develop electric generation and co-generation
26    facilities that use indigenous coal or renewable

 

 

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1    resources, or both, financed with bonds issued by the
2    Illinois Finance Authority.
3        (4) Supply electricity from the Agency's facilities at
4    cost to one or more of the following: municipal electric
5    systems, governmental aggregators, or rural electric
6    cooperatives in Illinois.
7    (b) Except as otherwise limited by this Act, the Agency has
8all of the powers necessary or convenient to carry out the
9purposes and provisions of this Act, including without
10limitation, each of the following:
11        (1) To have a corporate seal, and to alter that seal at
12    pleasure, and to use it by causing it or a facsimile to be
13    affixed or impressed or reproduced in any other manner.
14        (2) To use the services of the Illinois Finance
15    Authority necessary to carry out the Agency's purposes.
16        (3) To negotiate and enter into loan agreements and
17    other agreements with the Illinois Finance Authority.
18        (4) To obtain and employ personnel and hire consultants
19    that are necessary to fulfill the Agency's purposes, and to
20    make expenditures for that purpose within the
21    appropriations for that purpose.
22        (5) To purchase, receive, take by grant, gift, devise,
23    bequest, or otherwise, lease, or otherwise acquire, own,
24    hold, improve, employ, use, and otherwise deal in and with,
25    real or personal property whether tangible or intangible,
26    or any interest therein, within the State.

 

 

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1        (6) To acquire real or personal property, whether
2    tangible or intangible, including without limitation
3    property rights, interests in property, franchises,
4    obligations, contracts, and debt and equity securities,
5    and to do so by the exercise of the power of eminent domain
6    in accordance with Section 1-21; except that any real
7    property acquired by the exercise of the power of eminent
8    domain must be located within the State.
9        (7) To sell, convey, lease, exchange, transfer,
10    abandon, or otherwise dispose of, or mortgage, pledge, or
11    create a security interest in, any of its assets,
12    properties, or any interest therein, wherever situated.
13        (8) To purchase, take, receive, subscribe for, or
14    otherwise acquire, hold, make a tender offer for, vote,
15    employ, sell, lend, lease, exchange, transfer, or
16    otherwise dispose of, mortgage, pledge, or grant a security
17    interest in, use, and otherwise deal in and with, bonds and
18    other obligations, shares, or other securities (or
19    interests therein) issued by others, whether engaged in a
20    similar or different business or activity.
21        (9) To make and execute agreements, contracts, and
22    other instruments necessary or convenient in the exercise
23    of the powers and functions of the Agency under this Act,
24    including contracts with any person, local government,
25    State agency, or other entity; and all State agencies and
26    all local governments are authorized to enter into and do

 

 

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1    all things necessary to perform any such agreement,
2    contract, or other instrument with the Agency. No such
3    agreement, contract, or other instrument shall exceed 40
4    years.
5        (10) To lend money, invest and reinvest its funds in
6    accordance with the Public Funds Investment Act, and take
7    and hold real and personal property as security for the
8    payment of funds loaned or invested.
9        (11) To borrow money at such rate or rates of interest
10    as the Agency may determine, issue its notes, bonds, or
11    other obligations to evidence that indebtedness, and
12    secure any of its obligations by mortgage or pledge of its
13    real or personal property, machinery, equipment,
14    structures, fixtures, inventories, revenues, grants, and
15    other funds as provided or any interest therein, wherever
16    situated.
17        (12) To enter into agreements with the Illinois Finance
18    Authority to issue bonds whether or not the income
19    therefrom is exempt from federal taxation.
20        (13) To procure insurance against any loss in
21    connection with its properties or operations in such amount
22    or amounts and from such insurers, including the federal
23    government, as it may deem necessary or desirable, and to
24    pay any premiums therefor.
25        (14) To negotiate and enter into agreements with
26    trustees or receivers appointed by United States

 

 

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1    bankruptcy courts or federal district courts or in other
2    proceedings involving adjustment of debts and authorize
3    proceedings involving adjustment of debts and authorize
4    legal counsel for the Agency to appear in any such
5    proceedings.
6        (15) To file a petition under Chapter 9 of Title 11 of
7    the United States Bankruptcy Code or take other similar
8    action for the adjustment of its debts.
9        (16) To enter into management agreements for the
10    operation of any of the property or facilities owned by the
11    Agency.
12        (17) To enter into an agreement to transfer and to
13    transfer any land, facilities, fixtures, or equipment of
14    the Agency to one or more municipal electric systems,
15    governmental aggregators, or rural electric agencies or
16    cooperatives, for such consideration and upon such terms as
17    the Agency may determine to be in the best interest of the
18    citizens of Illinois.
19        (18) To enter upon any lands and within any building
20    whenever in its judgment it may be necessary for the
21    purpose of making surveys and examinations to accomplish
22    any purpose authorized by this Act.
23        (19) To maintain an office or offices at such place or
24    places in the State as it may determine.
25        (20) To request information, and to make any inquiry,
26    investigation, survey, or study that the Agency may deem

 

 

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1    necessary to enable it effectively to carry out the
2    provisions of this Act.
3        (21) To accept and expend appropriations.
4        (22) To engage in any activity or operation that is
5    incidental to and in furtherance of efficient operation to
6    accomplish the Agency's purposes.
7        (23) To adopt, revise, amend, and repeal rules with
8    respect to its operations, properties, and facilities as
9    may be necessary or convenient to carry out the purposes of
10    this Act, subject to the provisions of the Illinois
11    Administrative Procedure Act and Sections 1-22 and 1-35 of
12    this Act.
13        (24) To establish and collect charges and fees as
14    described in this Act.
15        (25) To conduct competitive gasification feedstock
16    procurement processes to procure the feedstocks for the
17    initial clean coal facility in accordance with the
18    requirements of Section 1-78 of this Act. To manage
19    procurement of substitute natural gas from a facility that
20    meets the criteria specified in subsection (a) of Section
21    1-58 of this Act, on terms and conditions that may be
22    approved by the Agency pursuant to subsection (d) of
23    Section 1-58 of this Act, to support the operations of
24    State agencies and local governments that agree to such
25    terms and conditions. This procurement process is not
26    subject to the Procurement Code.

 

 

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1        (26) To review, revise, and approve sourcing
2    agreements and mediate and resolve disputes between
3    electric utilities or alternative retail electric
4    suppliers and the initial clean coal facility pursuant to
5    paragraph (4) of subsection (d) of Section 1-75 of this
6    Act.
7(Source: P.A. 95-481, eff. 8-28-07; 96-784, eff. 8-28-09;
896-1000, eff. 7-2-10.)
 
9    (20 ILCS 3855/1-56)
10    Sec. 1-56. Illinois Power Agency Renewable Energy
11Resources Fund.
12    (a) The Illinois Power Agency Renewable Energy Resources
13Fund is created as a special fund in the State treasury.
14    (b) The Illinois Power Agency Renewable Energy Resources
15Fund shall be administered by the Agency to procure renewable
16energy resources. Prior to June 1, 2011, resources procured
17pursuant to this Section shall be procured from facilities
18located in Illinois, provided the resources are available from
19those facilities. If resources are not available in Illinois,
20then they shall be procured in states that adjoin Illinois. If
21resources are not available in Illinois or in states that
22adjoin Illinois, then they may be purchased elsewhere.
23Beginning June 1, 2011, resources procured pursuant to this
24Section shall be procured from facilities located in Illinois
25or states that adjoin Illinois. If resources are not available

 

 

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1in Illinois or in states that adjoin Illinois, then they may be
2procured elsewhere. To the extent available, at least 75% of
3these renewable energy resources shall come from wind
4generation. Of the renewable energy resources procured
5pursuant to this Section at least the following specified
6percentages shall come from photovoltaics on the following
7schedule: 0.5% by June 1, 2012; 1.5% by June 1, 2013; 3% by
8June 1, 2014; and 6% by June 1, 2015 and thereafter. Of the
9renewable energy resources procured pursuant to this Section at
10least the following percentages shall come from distributed
11renewable energy generation devices: 0.5% by June 1, 2013,
120.75% by June 1, 2014, and 1% by June 1, 2015 and thereafter.
13To the extent available, half of the renewable energy resources
14procured from distributed renewable energy generation shall
15come from devices of less than 25 kilowatts in nameplate
16capacity. Renewable energy resources procured from distributed
17generation devices may also count towards the required
18percentages for wind and solar photovoltaics. Procurement of
19renewable energy resources from distributed renewable energy
20generation devices shall be done on an annual basis through
21multi-year contracts of no less than 5 years.
22    The Agency shall create credit requirements for suppliers
23of distributed renewable energy. In order to minimize the
24administrative burden on contracting entities, the Agency
25shall solicit the use of third-party organizations to aggregate
26distributed renewable energy into groups of no less than one

 

 

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1megawatt in installed capacity. These third-party
2organizations shall administer contracts with individual
3distributed renewable energy generation device owners. An
4individual distributed renewable energy generation device
5owner shall have the ability to measure the output of his or
6her distributed renewable energy generation device.
7    (c) The Agency shall procure renewable energy resources at
8least once each year in conjunction with a procurement event
9for electric utilities required to comply with Section 1-75 of
10the Act and shall, whenever possible, enter into long-term
11contracts on an annual basis for a portion of the incremental
12requirement for the given procurement year. For periods
13beginning on and after June 1, 2012, the Agency shall use the
14Illinois Power Agency Renewable Energy Resources Fund, until
15depleted, to procure renewable energy credits for the purposes
16specified in paragraphs (2) and (6) of subsection (c) of
17Section 1-75 of this Act. For each procurement of renewable
18energy credits pursuant to this Section for periods beginning
19on and after June 1, 2012, the Agency shall designate an
20electric utility service area to which the procurement
21pertains.
22    (d) The price paid to procure renewable energy credits
23using monies from the Illinois Power Agency Renewable Energy
24Resources Fund shall not exceed the winning bid prices paid for
25like resources procured for electric utilities required to
26comply with Section 1-75 of this Act.

 

 

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1    (e) All renewable energy credits procured using monies from
2the Illinois Power Agency Renewable Energy Resources Fund shall
3be permanently retired.
4    (f) The procurement process described in this Section is
5exempt from the requirements of the Illinois Procurement Code,
6pursuant to Section 20-10 of that Code.
7    (g) All disbursements from the Illinois Power Agency
8Renewable Energy Resources Fund shall be made only upon
9warrants of the Comptroller drawn upon the Treasurer as
10custodian of the Fund upon vouchers signed by the Director or
11by the person or persons designated by the Director for that
12purpose. The Comptroller is authorized to draw the warrant upon
13vouchers so signed. The Treasurer shall accept all warrants so
14signed and shall be released from liability for all payments
15made on those warrants.
16    (h) The Illinois Power Agency Renewable Energy Resources
17Fund shall not be subject to sweeps, administrative charges, or
18chargebacks, including, but not limited to, those authorized
19under Section 8h of the State Finance Act, that would in any
20way result in the transfer of any funds from this Fund to any
21other fund of this State or in having any such funds utilized
22for any purpose other than the express purposes set forth in
23this Section.
24    (i) The Illinois Power Agency Renewable Energy Resources
25Fund shall be terminated upon depletion of all funds therein
26through the purchase of renewable energy credits.

 

 

09700SB1653ham001- 22 -LRB097 05721 ASK 56016 a

1(Source: P.A. 96-159, eff. 8-10-09; 96-1000, eff. 7-2-10;
296-1437, eff. 8-17-10.)
 
3    (20 ILCS 3855/1-75)
4    Sec. 1-75. Planning and Procurement Bureau. The Planning
5and Procurement Bureau has the following duties and
6responsibilities:
7    (a) The Planning and Procurement Bureau shall each year,
8beginning in 2008, develop procurement plans and conduct
9competitive procurement processes in accordance with the
10requirements of Section 16-111.5 of the Public Utilities Act
11for the eligible retail customers of electric utilities that on
12December 31, 2005 provided electric service to at least 100,000
13customers in Illinois, and for years beginning on and after
14June 1, 2012, for the procurement of renewable energy credits
15in respect of the kilowatthour usage of delivery services
16non-eligible retail customers in such electric utilities'
17service areas. For the purposes of this Section, the term
18"eligible retail customers" has the same definition as found in
19Section 16-111.5(a) of the Public Utilities Act.
20        (1) The Agency shall each year, beginning in 2008, as
21    needed, issue a request for qualifications for experts or
22    expert consulting firms to develop the procurement plans in
23    accordance with Section 16-111.5 of the Public Utilities
24    Act. In order to qualify an expert or expert consulting
25    firm must have:

 

 

09700SB1653ham001- 23 -LRB097 05721 ASK 56016 a

1            (A) direct previous experience assembling
2        large-scale power supply plans or portfolios for
3        end-use customers;
4            (B) an advanced degree in economics, mathematics,
5        engineering, risk management, or a related area of
6        study;
7            (C) 10 years of experience in the electricity
8        sector, including managing supply risk;
9            (D) expertise in wholesale electricity market
10        rules, including those established by the Federal
11        Energy Regulatory Commission and regional transmission
12        organizations;
13            (E) expertise in credit protocols and familiarity
14        with contract protocols;
15            (F) adequate resources to perform and fulfill the
16        required functions and responsibilities; and
17            (G) the absence of a conflict of interest and
18        inappropriate bias for or against potential bidders or
19        the affected electric utilities.
20        (2) The Agency shall each year, as needed, issue a
21    request for qualifications for a procurement administrator
22    to conduct the competitive procurement processes in
23    accordance with Section 16-111.5 of the Public Utilities
24    Act. In order to qualify an expert or expert consulting
25    firm must have:
26            (A) direct previous experience administering a

 

 

09700SB1653ham001- 24 -LRB097 05721 ASK 56016 a

1        large-scale competitive procurement process;
2            (B) an advanced degree in economics, mathematics,
3        engineering, or a related area of study;
4            (C) 10 years of experience in the electricity
5        sector, including risk management experience;
6            (D) expertise in wholesale electricity market
7        rules, including those established by the Federal
8        Energy Regulatory Commission and regional transmission
9        organizations;
10            (E) expertise in credit and contract protocols;
11            (F) adequate resources to perform and fulfill the
12        required functions and responsibilities; and
13            (G) the absence of a conflict of interest and
14        inappropriate bias for or against potential bidders or
15        the affected electric utilities.
16        (3) The Agency shall provide affected utilities and
17    other interested parties with the lists of qualified
18    experts or expert consulting firms identified through the
19    request for qualifications processes that are under
20    consideration to develop the procurement plans and to serve
21    as the procurement administrator. The Agency shall also
22    provide each qualified expert's or expert consulting
23    firm's response to the request for qualifications. All
24    information provided under this subparagraph shall also be
25    provided to the Commission. The Agency may provide by rule
26    for fees associated with supplying the information to

 

 

09700SB1653ham001- 25 -LRB097 05721 ASK 56016 a

1    utilities and other interested parties. These parties
2    shall, within 5 business days, notify the Agency in writing
3    if they object to any experts or expert consulting firms on
4    the lists. Objections shall be based on:
5            (A) failure to satisfy qualification criteria;
6            (B) identification of a conflict of interest; or
7            (C) evidence of inappropriate bias for or against
8        potential bidders or the affected utilities.
9        The Agency shall remove experts or expert consulting
10    firms from the lists within 10 days if there is a
11    reasonable basis for an objection and provide the updated
12    lists to the affected utilities and other interested
13    parties. If the Agency fails to remove an expert or expert
14    consulting firm from a list, an objecting party may seek
15    review by the Commission within 5 days thereafter by filing
16    a petition, and the Commission shall render a ruling on the
17    petition within 10 days. There is no right of appeal of the
18    Commission's ruling.
19        (4) The Agency shall issue requests for proposals to
20    the qualified experts or expert consulting firms to develop
21    a procurement plan for the affected utilities and to serve
22    as procurement administrator.
23        (5) The Agency shall select an expert or expert
24    consulting firm to develop procurement plans based on the
25    proposals submitted and shall award one-year contracts to
26    those selected with an option for the Agency for a one-year

 

 

09700SB1653ham001- 26 -LRB097 05721 ASK 56016 a

1    renewal.
2        (6) The Agency shall select an expert or expert
3    consulting firm, with approval of the Commission, to serve
4    as procurement administrator based on the proposals
5    submitted. If the Commission rejects, within 5 days, the
6    Agency's selection, the Agency shall submit another
7    recommendation within 3 days based on the proposals
8    submitted. The Agency shall award a one-year contract to
9    the expert or expert consulting firm so selected with
10    Commission approval with an option for the Agency for a
11    one-year renewal.
12    (a-5) The Planning and Procurement Bureau shall at least
13every 5 years beginning in 2012 develop feedstock procurement
14plans and conduct competitive feedstock procurement processes
15in accordance with the requirements of Section 1-78 of this
16Act.
17        (1) The Agency shall, at least once every 5 years
18    beginning in 2012, issue a request for qualifications for
19    experts or expert consulting firms to develop the feedstock
20    procurement plans in accordance with Section 1-78 of this
21    Act. In order to qualify, an expert or, in the case of an
22    expert consulting firm, the individual who shall be
23    directly responsible for the work, must have:
24            (A) direct previous experience assembling large
25        scale feedstock supply plans or portfolios involving
26        coal and natural gas for industrial customers;

 

 

09700SB1653ham001- 27 -LRB097 05721 ASK 56016 a

1            (B) an advanced degree in economics, mathematics,
2        engineering, risk management, or a related area of
3        study;
4            (C) ten years of experience in the energy sector,
5        including coal and gas procurement and managing fuel
6        supply risk;
7            (D) expertise in the feedstock markets, which may
8        be particularized to the specific type of feedstock to
9        be purchased in that procurement event;
10            (E) expertise in credit protocols and familiarity
11        with contract protocols;
12            (F) adequate resources to perform and fulfill the
13        required functions and responsibilities; and
14            (G) the absence of a conflict of interest and
15        inappropriate bias or against potential bidders or the
16        initial clean coal facility.
17        (2) The Agency shall at least every 5 years beginning
18    in 2012, as needed, issue a request for qualifications for
19    a feedstock procurement administrator to conduct the
20    competitive feedstock procurement processes in accordance
21    with Section 1-78 of this Act. In order to qualify, an
22    expert or, in the case of an expert consulting firm, the
23    individual who shall be directly responsible for the work,
24    must have:
25            (A) direct previous experience administering a
26        large scale competitive feedstock procurement process

 

 

09700SB1653ham001- 28 -LRB097 05721 ASK 56016 a

1        involving coal and natural gas;
2            (B) an advanced degree in economics, mathematics,
3        engineering, or a related area of study;
4            (C) ten years of experience in the energy sector,
5        including coal and gas procurement and managing fuel
6        supply risk;
7            (D) expertise in feedstock market rules and
8        practices, which may be particularized to the specific
9        type of feedstock to be purchased in that procurement
10        event;
11            (E) expertise in credit and contract protocols;
12            (F) adequate resources to perform and fulfill the
13        required functions and responsibilities; and
14            (G) the absence of a conflict of interest and
15        inappropriate bias for or against potential bidders or
16        the initial clean coal facility.
17        (3) The Agency shall provide the initial clean coal
18    facility and other interested parties with the lists of
19    qualified experts or expert consulting firms identified
20    through the request for qualifications processes that are
21    under consideration to develop the feedstock procurement
22    plans and to serve as the feedstock procurement
23    administrator. The Agency shall also provide the initial
24    clean coal facility and other interested parties with each
25    qualified expert's or expert consulting firm's response to
26    the request for qualifications. All information provided

 

 

09700SB1653ham001- 29 -LRB097 05721 ASK 56016 a

1    under this subparagraph (3) shall also be provided to the
2    Commission. The Agency may provide by rule for fees
3    associated with supplying the information to the initial
4    clean coal facility and other interested parties. The
5    initial clean coal facility and other interested parties
6    shall, within 5 business days after receiving the lists and
7    information, notify the Agency in writing if they object to
8    any experts or expert consulting firms on the lists.
9    Objections shall be based on:
10            (A) failure to satisfy qualification criteria;
11            (B) identification of a conflict of interest; or
12            (C) evidence of inappropriate bias for or against
13        potential bidders or the initial clean coal facility.
14        The Agency shall remove experts or expert consulting
15    firms from the lists within 10 days after receiving the
16    objections if there is a reasonable basis for an objection
17    and provide the updated lists to the initial clean coal
18    facility and other interested parties. If the Agency fails
19    to remove an expert or expert consulting firm from a list,
20    then an objecting party may seek review by the Commission
21    within 5 days thereafter by filing a petition, and the
22    Commission shall render a ruling on the petition within 10
23    days. There is no right of appeal of the Commission's
24    ruling.
25        (4) The Agency shall issue requests for proposals to
26    the qualified experts or expert consulting firms to develop

 

 

09700SB1653ham001- 30 -LRB097 05721 ASK 56016 a

1    a feedstock procurement plan for the initial clean coal
2    facility and to serve as feedstock procurement
3    administrator.
4        (5) The Agency shall select an expert or expert
5    consulting firm to develop feedstock procurement plans
6    based on the proposals submitted and shall award at least
7    one-year contracts to those selected with an option for the
8    Agency for renewal for an additional length of time equal
9    to the term of the contract.
10        (6) The Agency shall select, with approval of the
11    Commission, an expert or expert consulting firm to serve as
12    feedstock procurement administrator based on the proposals
13    submitted. If the Commission rejects the Agency's
14    selection within 5 days after being notified of the
15    Agency's selection, then the Agency shall submit another
16    recommendation within 3 days after the Commission's
17    rejection based on the proposals submitted. The Agency
18    shall award a 5-year contract to the expert or expert
19    consulting firm so selected with Commission approval with
20    an option for the Agency for a 5-year renewal.
21    (b) The experts or expert consulting firms retained by the
22Agency under subsection (a) of this Section shall, as
23appropriate, prepare procurement plans, and conduct a
24competitive procurement process as prescribed in Section
2516-111.5 of the Public Utilities Act, to ensure adequate,
26reliable, affordable, efficient, and environmentally

 

 

09700SB1653ham001- 31 -LRB097 05721 ASK 56016 a

1sustainable electric service at the lowest total cost over
2time, taking into account any benefits of price stability, for
3eligible retail customers of electric utilities that on
4December 31, 2005 provided electric service to at least 100,000
5customers in the State of Illinois.
6    (b-5) The experts or expert consulting firms retained by
7the Agency pursuant to subsection (a-5) shall, as appropriate,
8prepare feedstock procurement plans and conduct a competitive
9feedstock procurement process as prescribed in Section 1-78 of
10this Act to ensure adequate, reliable, affordable feedstocks,
11taking into account any benefits of price stability, for the
12initial clean coal facility.
13    (c) Renewable portfolio standard.
14        (1) The procurement plans shall include cost-effective
15    renewable energy resources. A minimum percentage of each
16    utility's total supply to serve the load of eligible retail
17    customers, as defined in Section 16-111.5(a) of the Public
18    Utilities Act, procured for each of the following years
19    shall be generated from cost-effective renewable energy
20    resources: at least 2% by June 1, 2008; at least 4% by June
21    1, 2009; at least 5% by June 1, 2010; at least 6% by June 1,
22    2011; at least 7% by June 1, 2012; at least 8% by June 1,
23    2013; at least 9% by June 1, 2014; at least 10% by June 1,
24    2015; and increasing by at least 1.5% each year thereafter
25    to at least 25% by June 1, 2025. For periods beginning on
26    and after June 1, 2012, the procurement plans shall include

 

 

09700SB1653ham001- 32 -LRB097 05721 ASK 56016 a

1    the procurement of renewable energy credits equal to the
2    projected kilowatthour usage of the delivery services
3    non-eligible retail customers within the service area of
4    the electric utility times the applicable renewable energy
5    resource percentage for that year as set forth under this
6    paragraph (1). To the extent that it is available, at least
7    75% of the renewable energy resources used to meet these
8    standards shall come from wind generation and, beginning on
9    June 1, 2011, at least the following percentages of the
10    renewable energy resources used to meet these standards
11    shall come from photovoltaics on the following schedule:
12    0.5% by June 1, 2012, 1.5% by June 1, 2013; 3% by June 1,
13    2014; and 6% by June 1, 2015 and thereafter. Of the
14    renewable energy resources procured pursuant to this
15    Section at least the following percentages shall come from
16    distributed renewable energy generation devices: 0.5% by
17    June 1, 2013, 0.75% by June 1, 2014, and 1% by June 1, 2015
18    and thereafter. To the extent available, half of the
19    renewable energy resources procured from distributed
20    renewable energy generation shall come from devices of less
21    than 25 kilowatts in nameplate capacity. Renewable energy
22    resources procured from distributed generation devices may
23    also count towards the required percentages for wind and
24    solar photovoltaics. Procurement of renewable energy
25    resources from distributed renewable energy generation
26    devices shall be done on an annual basis through multi-year

 

 

09700SB1653ham001- 33 -LRB097 05721 ASK 56016 a

1    contracts of no less than 5 years.
2        The Agency shall create credit requirements for
3    suppliers of distributed renewable energy. In order to
4    minimize the administrative burden on contracting
5    entities, the Agency shall solicit the use of third-party
6    organizations to aggregate distributed renewable energy
7    into groups of no less than one megawatt in installed
8    capacity. These third-party organizations shall administer
9    contracts with individual distributed renewable energy
10    generation device owners. An individual distributed
11    renewable energy generation device owner shall have the
12    ability to measure the output of his or her distributed
13    renewable energy generation device. For purposes of this
14    subsection (c), "cost-effective" means that the costs of
15    procuring renewable energy resources to serve the load of
16    the electric utility's eligible retail customers and the
17    costs of procuring renewable energy credits with respect to
18    the kilowatthour usage of the delivery services
19    non-eligible retail customers within the electric
20    utility's service area do not cause the applicable limits
21    limit stated in paragraph (2) of this subsection (c) to be
22    exceeded and do not exceed benchmarks based on market
23    prices for renewable energy resources in the region, which
24    shall be developed by the procurement administrator, in
25    consultation with the Commission staff, Agency staff, and
26    the procurement monitor and shall be subject to Commission

 

 

09700SB1653ham001- 34 -LRB097 05721 ASK 56016 a

1    review and approval; provided that only the benchmarks, and
2    not the remainder of the definition of "cost-effective",
3    shall be applicable to the procurement of renewable energy
4    credits on and after June 1, 2012 in respect of the
5    forecasted kilowatthour usage of the delivery services
6    non-eligible retail customers in the electric utility's
7    service area.
8        (2) For purposes of this subsection (c), the required
9    procurement of cost-effective renewable energy resources
10    to serve the load of the electric utility's eligible retail
11    customers for a particular year shall be measured as a
12    percentage of the actual amount of electricity
13    (megawatt-hours) supplied by the electric utility to
14    eligible retail customers in the planning year ending
15    immediately prior to the procurement and, for periods
16    beginning on and after June 1, 2012, the required
17    procurement of cost effective renewable energy credits
18    with respect to the delivery services non-eligible retail
19    customers of the electric utility shall be based on the
20    actual amount of electricity (megawatt-hours) delivered by
21    the electric utility to delivery services non-eligible
22    retail customers in its service area in the planning year
23    ending immediately prior to the procurement. For purposes
24    of this subsection (c), the amount paid per kilowatthour
25    means the total amount paid for electric service expressed
26    on a per kilowatthour basis. For purposes of this

 

 

09700SB1653ham001- 35 -LRB097 05721 ASK 56016 a

1    subsection (c), the total amount paid for electric service
2    includes without limitation amounts paid for supply,
3    transmission, distribution, surcharges, and add-on taxes.
4        Notwithstanding the requirements of this subsection
5    (c), the total of renewable energy resources procured
6    pursuant to the procurement plan with respect to the load
7    of the electric utility's eligible retail customers for any
8    single year shall be reduced by an amount necessary to
9    limit the annual estimated average net increase due to the
10    costs of these resources included in the amounts paid by
11    eligible retail customers in connection with electric
12    service to:
13            (A) in 2008, no more than 0.5% of the amount paid
14        per kilowatthour by those customers during the year
15        ending May 31, 2007;
16            (B) in 2009, the greater of an additional 0.5% of
17        the amount paid per kilowatthour by those customers
18        during the year ending May 31, 2008 or 1% of the amount
19        paid per kilowatthour by those customers during the
20        year ending May 31, 2007;
21            (C) in 2010, the greater of an additional 0.5% of
22        the amount paid per kilowatthour by those customers
23        during the year ending May 31, 2009 or 1.5% of the
24        amount paid per kilowatthour by those customers during
25        the year ending May 31, 2007;
26            (D) in 2011, the greater of an additional 0.5% of

 

 

09700SB1653ham001- 36 -LRB097 05721 ASK 56016 a

1        the amount paid per kilowatthour by those customers
2        during the year ending May 31, 2010 or 2% of the amount
3        paid per kilowatthour by those customers during the
4        year ending May 31, 2007; and
5            (E) thereafter, the amount of renewable energy
6        resources procured pursuant to the procurement plan
7        for any single year shall be reduced by an amount
8        necessary to limit the estimated average net increase
9        due to the cost of these resources included in the
10        amounts paid by eligible retail customers in
11        connection with electric service to no more than the
12        greater of 2.015% of the amount paid per kilowatthour
13        by those customers during the year ending May 31, 2007
14        or the incremental amount per kilowatthour paid for
15        these resources in 2011.
16            The foregoing limitations shall not be applicable
17        to the purchase, for periods beginning on and after
18        June 1, 2012, of renewable energy credits in respect of
19        the projected kilowatthour usage of the electric
20        utility's delivery services non-eligible retail
21        customers. For periods beginning on and after June 1,
22        2012, any excluded renewable energy resources contract
23        costs shall be recoverable by the electric utility
24        through its tariffed charges for delivery services
25        pursuant to Section 16-108 of the Public Utilities Act
26        to its residential class delivery services

 

 

09700SB1653ham001- 37 -LRB097 05721 ASK 56016 a

1        non-eligible retail customers.
2            Notwithstanding the requirements of this
3        subsection (c), for years beginning on and after June
4        1, 2012, the total amount of renewable energy credits
5        procured pursuant to the procurement plan with respect
6        to the kilowatthour usage of the delivery services
7        non-eligible retail customers in the electric
8        utility's service area shall be reduced by an amount
9        necessary to limit the cost of renewable energy credits
10        and excluded renewable energy resources costs included
11        in the electric utility's charges per kilowatthour for
12        delivery services to its delivery services
13        non-eligible retail customers to an amount equal to no
14        more than 2.015% of the amount paid by the electric
15        utility's eligible retail customers per kilowatthour
16        for electric service during the year ended May 31,
17        2007.
18            No later than June 30, 2011, the Commission shall
19        review the limitation on the amount of renewable energy
20        resources procured pursuant to this subsection (c) and
21        report to the General Assembly its findings as to
22        whether that limitation unduly constrains the
23        procurement of cost-effective renewable energy
24        resources.
25        (3) (Blank). Through June 1, 2011, renewable energy
26    resources shall be counted for the purpose of meeting the

 

 

09700SB1653ham001- 38 -LRB097 05721 ASK 56016 a

1    renewable energy standards set forth in paragraph (1) of
2    this subsection (c) only if they are generated from
3    facilities located in the State, provided that
4    cost-effective renewable energy resources are available
5    from those facilities. If those cost-effective resources
6    are not available in Illinois, they shall be procured in
7    states that adjoin Illinois and may be counted towards
8    compliance. If those cost-effective resources are not
9    available in Illinois or in states that adjoin Illinois,
10    they shall be purchased elsewhere and shall be counted
11    towards compliance. After June 1, 2011, cost-effective
12    renewable energy resources located in Illinois and in
13    states that adjoin Illinois may be counted towards
14    compliance with the standards set forth in paragraph (1) of
15    this subsection (c). If those cost-effective resources are
16    not available in Illinois or in states that adjoin
17    Illinois, they shall be purchased elsewhere and shall be
18    counted towards compliance.
19        (4) The electric utility shall retire all renewable
20    energy credits used to comply with the standard.
21        (5) Beginning with the year commencing June 1, 2010,
22    and ending with the year commencing June 1, 2011, an
23    electric utility subject to this subsection (c) shall apply
24    the lesser of the maximum alternative compliance payment
25    rate or the most recent estimated alternative compliance
26    payment rate for its service territory for the

 

 

09700SB1653ham001- 39 -LRB097 05721 ASK 56016 a

1    corresponding compliance period, established pursuant to
2    subsection (d) of Section 16-115D of the Public Utilities
3    Act to its retail customers that take service pursuant to
4    the electric utility's hourly pricing tariff or tariffs.
5    The electric utility shall retain all amounts collected as
6    a result of the application of the alternative compliance
7    payment rate or rates to such customers, and, beginning in
8    2011, the utility shall include in the information provided
9    under item (1) of subsection (d) of Section 16-111.5 of the
10    Public Utilities Act the amounts collected under the
11    alternative compliance payment rate or rates for the prior
12    year ending May 31. Notwithstanding any limitation on the
13    procurement of renewable energy resources imposed by item
14    (2) of this subsection (c), the Agency shall increase its
15    spending on the purchase of renewable energy resources to
16    be procured by the electric utility for the next plan year
17    by an amount equal to the amounts collected by the utility
18    under the alternative compliance payment rate or rates in
19    the prior year ending May 31. For years commencing on and
20    after June 1, 2012, the kilowatthours supplied by the
21    electric utility to its retail customers that take service
22    pursuant to the electric utility's hourly pricing tariff or
23    tariffs shall be considered usage of delivery services
24    non-eligible retail customers.
25        (6) Each annual procurement plan for periods beginning
26    on and after June 1, 2012 shall include (i) the procurement

 

 

09700SB1653ham001- 40 -LRB097 05721 ASK 56016 a

1    of electricity from cost-effective renewable energy
2    resources to meet the renewable energy resource
3    requirements specified in paragraph (2) of this subsection
4    (c) with respect to the load of the electric utility's
5    eligible retail customers and (ii) the procurement of
6    renewable energy credits to meet the renewable energy
7    resource requirements specified in paragraph (2) of this
8    subsection (c) with respect to the kilowatthour usage of
9    the electric utility's delivery services non-eligible
10    retail customers; provided that the electric utility's
11    obligation to purchase renewable energy credits with
12    respect to the kilowatthour usage of delivery services
13    non-eligible retail customers shall be reduced by the
14    amount of any purchases of renewable energy credits by the
15    Agency for the year in respect of the electric utility's
16    service area pursuant to Section 1-56 of this Act using the
17    Illinois Power Agency Renewable Energy Resources Fund. All
18    procurements of bundled renewable energy resources and
19    renewable energy credits in the procurement plans of the
20    electric utilities shall be pursuant to competitive
21    bidding processes and shall be approved by the Commission
22    pursuant to Section 16-111.5 of the Public Utilities Act.
23    (d) Clean coal portfolio standard.
24        (1) The General Assembly finds that there are abundant
25    and cost-effective supplies of high volatile rank
26    bituminous coal with a sulfur content of at least 1.7

 

 

09700SB1653ham001- 41 -LRB097 05721 ASK 56016 a

1    pounds per million btu energy content, and that it is
2    technologically feasible to produce electric energy using
3    such coal supplies reliably. The General Assembly further
4    finds that state-of-the-art gasification systems are
5    available to convert coal supplies with the foregoing
6    characteristics into gas and that it is feasible to use
7    such gas to generate electric energy without exceeding
8    allowable emission rates for sulfur dioxide, nitrogen
9    oxides, carbon monoxide, particulates, and mercury for a
10    natural gas-fired combined-cycle facility of the same size
11    as and in the same location as a clean coal facility
12    incorporating a gasification system and a combined cycle
13    power block. The General Assembly also finds that it is
14    feasible to engineer and construct systems designed to
15    capture and sequester the percentages of the carbon dioxide
16    emissions from clean coal facilities as specified in this
17    Act. Accordingly, the General Assembly finds it necessary
18    for the health, safety, welfare, and prosperity of Illinois
19    citizens to require Illinois electric utilities and
20    alternative electric retail electric suppliers to contract
21    with the initial clean coal facility to meet a portion of
22    the needs of each such electric utility's and alternative
23    retail electric supplier's retail load on the terms and
24    conditions described under this Act.
25        The procurement plans under subsection (a) of this
26    Section shall include cost effective electricity generated

 

 

09700SB1653ham001- 42 -LRB097 05721 ASK 56016 a

1    using clean coal. Each electric utility shall enter into
2    one or more sourcing agreements with the initial clean coal
3    facility, as provided in paragraph (3) of this subsection
4    (d), covering electricity generated by the initial clean
5    coal facility representing (A) at least 5% of that each
6    utility's total supply to serve the load of eligible retail
7    customers in the immediately preceding year 2015 and each
8    year thereafter, as described in paragraph (3) of this
9    subsection (d), or (B) such lesser amount as may be
10    available from the initial clean coal facility, reduced by
11    subject to the limits on the amount of power to be
12    purchased specified in paragraph (2) of this subsection
13    (d). It is the goal of the State that by January 1, 2025,
14    25% of the electricity used in the State shall be generated
15    by cost-effective clean coal facilities. For purposes of
16    this subsection (d), "cost-effective" means that the
17    expenditures pursuant to such sourcing agreements do not
18    cause the limit stated in paragraph (2) of this subsection
19    (d) to be exceeded and do not exceed cost-based benchmarks,
20    which shall be developed to assess all expenditures
21    pursuant to such sourcing agreements covering electricity
22    generated by clean coal facilities, other than the initial
23    clean coal facility, by the procurement administrator, in
24    consultation with the Commission staff, Agency staff, and
25    the procurement monitor and shall be subject to Commission
26    review and approval.

 

 

09700SB1653ham001- 43 -LRB097 05721 ASK 56016 a

1        (A) A utility party to a sourcing agreement shall
2    immediately retire any emission credits that it receives in
3    connection with the electricity covered by such agreement.
4        (B) Utilities shall maintain adequate records
5    documenting the purchases under the sourcing agreement to
6    comply with this subsection (d) and shall file an
7    accounting with the load forecast that must be filed with
8    the Agency by July 15 of each year, in accordance with
9    subsection (d) of Section 16-111.5 of the Public Utilities
10    Act.
11        (C) A utility shall be deemed to have complied with the
12    clean coal portfolio standard specified in this subsection
13    (d) if the utility enters into a sourcing agreement as
14    required by this subsection (d).
15        (2) For purposes of this subsection (d), the required
16    execution of sourcing agreements with the initial clean
17    coal facility for a particular year shall be measured as a
18    percentage of the actual amount of electricity
19    (megawatt-hours) supplied by the electric utility to
20    eligible retail customers in the immediately preceding
21    year planning year ending immediately prior to the
22    agreement's execution. For purposes of this subsection
23    (d), the amount paid per kilowatthour means the total
24    amount paid for electric service expressed on a per
25    kilowatthour basis. For purposes of this subsection (d),
26    the total amount paid for electric service includes without

 

 

09700SB1653ham001- 44 -LRB097 05721 ASK 56016 a

1    limitation amounts paid for supply, transmission,
2    distribution, surcharges and add-on taxes.
3        Notwithstanding the requirements of this subsection
4    (d), the total amount purchased paid under sourcing
5    agreements with the initial clean coal facility clean coal
6    facilities pursuant to the procurement plan for any given
7    year shall be reduced by an amount necessary to limit the
8    annual estimated average net increase due to the costs of
9    these resources included in the amounts paid by eligible
10    retail customers in connection with electric service to:
11            (A) in 2010, no more than 0.5% of the amount paid
12        per kilowatthour by those customers during the year
13        ending May 31, 2009;
14            (B) in 2011, the greater of an additional 0.5% of
15        the amount paid per kilowatthour by those customers
16        during the year ending May 31, 2010 or 1% of the amount
17        paid per kilowatthour by those customers during the
18        year ending May 31, 2009;
19            (C) in 2012, the greater of an additional 0.5% of
20        the amount paid per kilowatthour by those customers
21        during the year ending May 31, 2011 or 1.5% of the
22        amount paid per kilowatthour by those customers during
23        the year ending May 31, 2009;
24            (D) in 2013, the greater of an additional 0.5% of
25        the amount paid per kilowatthour by those customers
26        during the year ending May 31, 2012 or 2% of the amount

 

 

09700SB1653ham001- 45 -LRB097 05721 ASK 56016 a

1        paid per kilowatthour by those customers during the
2        year ending May 31, 2009; and
3            (E) thereafter:
4                (i) A calculation shall be made for each year
5            to determine whether , the total amount paid under
6            sourcing agreements with clean coal facilities
7            pursuant to the procurement plan for any single
8            year shall be reduced by an amount necessary to
9            limit the estimated average net per kilowatthour
10            increase due to the cost of electric power
11            purchased under sourcing agreements and these
12            resources included in the amounts paid by small
13            electric eligible retail customers in connection
14            with electric service exceeds to no more than the
15            greater of (i) 2.015% of the amount paid per
16            kilowatthour by eligible retail those customers
17            during the year ending May 31, 2009 or (ii) the
18            incremental amount per kilowatthour paid for these
19            resources in 2013. These requirements may be
20            altered only as provided by statute. For purposes
21            of such calculation, such average net per
22            kilowatthour increase in rates of small electric
23            customers that are not eligible retail customers
24            shall be deemed to be equal to such average net per
25            kilowatthour increase in rates of eligible retail
26            customers.

 

 

09700SB1653ham001- 46 -LRB097 05721 ASK 56016 a

1                (ii) If for any year the small customer rate
2            impact would exceed the limitation described in
3            item (i) of this subparagraph (E), the clean coal
4            fraction for each clean coal electricity buyer
5            shall be adjusted for such year in a manner that
6            will result in (a) the quantity of electric power
7            projected to be purchased by each clean coal
8            electricity buyer being reduced by an amount
9            sufficient to result in such deemed rate impact on
10            all small electric customers (whether served by
11            electric utilities or alternative retail electric
12            suppliers) being equal to such limitation for such
13            year and (b) any such reductions in amounts
14            allocated to the clean coal electricity buyers in
15            order to achieve the objective described in clause
16            (a) of this item (ii) being allocated to, and
17            purchased and paid for by, the clean coal
18            electricity buyers in proportion to their retail
19            sales to large electric customers.
20                (iii) Each year, after taking account of the
21            adjustment, if any, provided for in item (ii) of
22            this subparagraph (E), a calculation shall be made
23            to determine whether the large customer deemed
24            rate impact for such year exceeds $0.005 per
25            kilowatthour. The "large customer deemed rate
26            impact" for any year is the projected increase in

 

 

09700SB1653ham001- 47 -LRB097 05721 ASK 56016 a

1            electric rates of large electric customers
2            (whether served by electric utilities or
3            alternative retail electric suppliers) due to the
4            cost of electric power purchased under sourcing
5            agreements to the extent it is based on each clean
6            coal electricity buyer's retail sales to large
7            electric customers, which shall be calculated in
8            substantially the same manner as the calculation
9            of rate impact on small electric customers, and
10            shall assume that such cost of purchases under
11            sourcing agreements is passed through
12            proportionally by the clean coal electricity
13            buyers to their large electric customers. The
14            calculation of the large customer deemed rate
15            impact shall (a) assume that the total retail sales
16            (expressed in kilowatthours sold) to large
17            electric customers by all clean coal electricity
18            buyers for any year is the greater of the actual
19            amount of such sales in such year and the amount of
20            such sales in 2009 and (b) exclude from the
21            calculation any actual costs for such year
22            incurred by the initial clean coal facility to the
23            extent such costs exceed the corresponding amount
24            assumed in the "reference case" of the facility
25            cost report for the initial clean coal facility for
26            such year and are not principally within the

 

 

09700SB1653ham001- 48 -LRB097 05721 ASK 56016 a

1            reasonable control of the initial clean coal
2            facility.
3                Any operating costs or revenues deviating from
4            the corresponding costs assumed in the "reference
5            case" of the facility cost report for the initial
6            clean coal facility as a result of changes in
7            market prices, including, but not limited to,
8            prices of coal, natural gas, electricity,
9            by-products, and emissions allowances, shall be
10            deemed to be outside of the reasonable control of
11            the initial clean coal facility and excluded from
12            the calculation.
13                Any costs exceeding the corresponding costs
14            assumed in the "reference case" of the facility
15            cost report for the initial clean coal facility as
16            a result of changes in capital costs, fixed
17            operating costs, variable operating costs,
18            operating efficiency, and availability, except in
19            each case to the extent resulting from a change in
20            market prices or from a change in law, as defined
21            in subsection (b) of Section 1-76 of this Act,
22            shall be deemed to be within the reasonable control
23            of the initial clean coal facility and included in
24            the calculation.
25                (iv) If for any year the large customer deemed
26            rate impact would exceed the limitation described

 

 

09700SB1653ham001- 49 -LRB097 05721 ASK 56016 a

1            in item (iii) of this subparagraph (E), the
2            quantity of electric power required to be
3            purchased by each clean coal electricity buyer
4            that serves large electric customers under its
5            sourcing agreement for such year shall be reduced
6            by such amount as will result in the large customer
7            deemed rate impact being equal to such limitation
8            for such year, and the clean coal fractions of each
9            clean coal electricity buyer that serves large
10            electric customers shall be adjusted for such year
11            to reflect this reduction; provided, however, that
12            the reduction under this item (iv) shall not exceed
13            in any year an amount that would result in revenues
14            under the sourcing agreements being reduced by
15            more than $50,000,000 in the aggregate for such
16            year. Any quantities of electric power not
17            required to be purchased pursuant to the operation
18            of the immediately preceding sentence may be
19            disposed of by the initial clean coal facility for
20            its own account, and the proceeds of any sales of
21            such electric power shall not be included in the
22            formula rate.
23                (v) The details of the calculations
24            contemplated by this subparagraph (E) shall be set
25            forth in the sourcing agreements.
26                (vi) No later than June 30, 2015, the

 

 

09700SB1653ham001- 50 -LRB097 05721 ASK 56016 a

1            Commission shall review the limitation on the
2            total amount paid under sourcing agreements, if
3            any, with the initial clean coal facility
4            facilities pursuant to this subsection (d) and
5            report to the General Assembly its findings as to
6            the effect of the whether that limitation on the
7            initial clean coal facility, electric utilities,
8            alternative retail electric suppliers, and
9            customers of the electric utilities and the
10            alternative retail electric suppliers unduly
11            constrains the amount of electricity generated by
12            cost-effective clean coal facilities that is
13            covered by sourcing agreements.
14        (3) Initial clean coal facility. In order to promote
15    the use development of clean coal electric power facilities
16    in Illinois, each electric utility subject to this Section
17    shall execute a sourcing agreement to source electricity
18    from the initial clean coal facility. The Agency shall
19    accept applications to be designated the initial clean coal
20    facility for a period of 30 days after the effective date
21    of this amendatory Act of the 97th General Assembly. Each
22    application shall include a proposed sourcing agreement in
23    accordance with the requirements of this paragraph (3) and
24    information showing that the applicant meets the other
25    criteria set out in the definition of initial clean coal
26    facility provided in Section 1-10 of this Act. In the event

 

 

09700SB1653ham001- 51 -LRB097 05721 ASK 56016 a

1    that only one proposed initial clean coal facility that
2    meets each of the requirements submits a proposed sourcing
3    agreement to the Agency within that time period, the Agency
4    shall select such proposed initial clean coal facility as
5    the initial clean coal facility. In the event that more
6    than one proposed initial clean coal facility that meets
7    each of the requirements submit a proposed sourcing
8    agreement to the Agency within that time period, the Agency
9    shall select as the initial clean coal facility the
10    electric generating facility that the Agency determines
11    best promotes the needs and interests of the citizens of
12    the State of Illinois. In making such determination, the
13    Agency shall take into account for each proposed initial
14    clean coal facility the technical and economic feasibility
15    of such facility, including access to capital and the
16    financeability of the facility based upon the proposed
17    sourcing agreement, the projected environmental
18    performance of such facility, the ability of such facility
19    to be dispatched to support the transmission grid's
20    capability to integrate with wind, solar, and other
21    intermittent resources, and the reliability and cost of
22    electric transmission service from the facility to the
23    electric utilities. The Agency shall announce the
24    designation of the initial clean coal facility within 45
25    days after the effective date of this amendatory Act of the
26    97th General Assembly. a proposed clean coal facility in

 

 

09700SB1653ham001- 52 -LRB097 05721 ASK 56016 a

1    Illinois (the "initial clean coal facility") that will have
2    a nameplate capacity of at least 500 MW when commercial
3    operation commences, that has a final Clean Air Act permit
4    on the effective date of this amendatory Act of the 95th
5    General Assembly, and that will meet the definition of
6    clean coal facility in Section 1-10 of this Act when
7    commercial operation commences. The sourcing agreements
8    with this initial clean coal facility shall be subject to
9    both approval of the initial clean coal facility by the
10    General Assembly and satisfaction of the requirements of
11    paragraph (4) of this subsection (d) and shall be executed
12    within 90 days after any such approval by the General
13    Assembly. The Agency and the Commission shall have
14    authority to inspect all books and records associated with
15    the initial clean coal facility during the term of such a
16    sourcing agreement. A utility's sourcing agreement for
17    electricity produced by the initial clean coal facility
18    shall include:
19            (A) provisions governing the price paid for
20        electricity generated by the initial clean coal
21        facility, which shall be determined according to
22        clause (iv) of subparagraph (B) of this paragraph (3);
23        a formula contractual price (the "contract price")
24        approved pursuant to paragraph (4) of this subsection
25        (d), which shall:
26                (i) be determined using a cost of service

 

 

09700SB1653ham001- 53 -LRB097 05721 ASK 56016 a

1            methodology employing either a level or deferred
2            capital recovery component, based on a capital
3            structure consisting of 45% equity and 55% debt,
4            and a return on equity as may be approved by the
5            Federal Energy Regulatory Commission, which in any
6            case may not exceed the lower of 11.5% or the rate
7            of return approved by the General Assembly
8            pursuant to paragraph (4) of this subsection (d);
9            and
10                (ii) provide that all miscellaneous net
11            revenue, including but not limited to net revenue
12            from the sale of emission allowances, if any,
13            substitute natural gas, if any, grants or other
14            support provided by the State of Illinois or the
15            United States Government, firm transmission
16            rights, if any, by-products produced by the
17            facility, energy or capacity derived from the
18            facility and not covered by a sourcing agreement
19            pursuant to paragraph (3) of this subsection (d) or
20            item (5) of subsection (d) of Section 16-115 of the
21            Public Utilities Act, whether generated from the
22            synthesis gas derived from coal, from SNG, or from
23            natural gas, shall be credited against the revenue
24            requirement for this initial clean coal facility;
25            (B) power purchase provisions, which shall:
26                (i) provide that the utility party to the

 

 

09700SB1653ham001- 54 -LRB097 05721 ASK 56016 a

1            sourcing agreement shall pay the contract price
2            under such sourcing agreement determined pursuant
3            to subparagraph (A);
4                (ii) require delivery of electricity by the
5            initial clean coal facility to the regional
6            transmission organization market of the utility
7            party to the sourcing agreement;
8                (iii) require the utility party to the
9            sourcing agreement to buy from the initial clean
10            coal facility in each hour an amount of energy
11            equal to all clean coal energy made available from
12            the initial clean coal facility during such hour
13            times the clean coal fraction for such utility for
14            the applicable month, provided that the amount
15            purchased by the utility in any year will be
16            limited by paragraph (2) of this subsection (d);
17                (iv) require the utility party to the sourcing
18            agreement to pay to the initial clean coal facility
19            for each month the following: the electric
20            generation variable charge multiplied by the
21            quantity of energy required to be purchased by such
22            utility in such month plus the product of the sum
23            of the fuel charge; plus the fixed monthly charge,
24            based on the MW of nameplate capacity of the
25            initial clean coal facility's power block, for
26            such month, multiplied by the fraction determined

 

 

09700SB1653ham001- 55 -LRB097 05721 ASK 56016 a

1            for the utility for such month according to clause
2            (iii) of this subparagraph (B); for purposes of
3            this clause (iv), "electric generation variable
4            charge", "fuel charge", and "fixed monthly charge"
5            shall each have the meaning ascribed to the term in
6            subsection (a) of Section 1-76 of this Act; and
7                (v) be considered pre-existing contracts in
8            the utility's procurement plans for eligible
9            retail customers; The provisions of this
10            subparagraph (B) are severable under Section 1.31
11            of the Statute on Statutes.
12            (B) power purchase provisions, which shall:
13                (i) provide that the utility party to such
14            sourcing agreement shall pay the contract price
15            for electricity delivered under such sourcing
16            agreement;
17                (ii) require delivery of electricity to the
18            regional transmission organization market of the
19            utility that is party to such sourcing agreement;
20                (iii) require the utility party to such
21            sourcing agreement to buy from the initial clean
22            coal facility in each hour an amount of energy
23            equal to all clean coal energy made available from
24            the initial clean coal facility during such hour
25            times a fraction, the numerator of which is such
26            utility's retail market sales of electricity

 

 

09700SB1653ham001- 56 -LRB097 05721 ASK 56016 a

1            (expressed in kilowatthours sold) in the State
2            during the prior calendar month and the
3            denominator of which is the total retail market
4            sales of electricity (expressed in kilowatthours
5            sold) in the State by utilities during such prior
6            month and the sales of electricity (expressed in
7            kilowatthours sold) in the State by alternative
8            retail electric suppliers during such prior month
9            that are subject to the requirements of this
10            subsection (d) and paragraph (5) of subsection (d)
11            of Section 16-115 of the Public Utilities Act,
12            provided that the amount purchased by the utility
13            in any year will be limited by paragraph (2) of
14            this subsection (d); and
15                (iv) be considered pre-existing contracts in
16            such utility's procurement plans for eligible
17            retail customers;
18            (C) contract for differences provisions, which
19        shall:
20                (i) require the utility party to such sourcing
21            agreement to contract with the initial clean coal
22            facility in each hour with respect to an amount of
23            energy equal to all clean coal energy made
24            available from the initial clean coal facility
25            during such hour times the clean coal a fraction
26            for such utility for applicable month, the

 

 

09700SB1653ham001- 57 -LRB097 05721 ASK 56016 a

1            numerator of which is such utility's retail market
2            sales of electricity (expressed in kilowatthours
3            sold) in the utility's service territory in the
4            State during the prior calendar month and the
5            denominator of which is the total retail market
6            sales of electricity (expressed in kilowatthours
7            sold) in the State by utilities during such prior
8            month and the sales of electricity (expressed in
9            kilowatthours sold) in the State by alternative
10            retail electric suppliers during such prior month
11            that are subject to the requirements of this
12            subsection (d) and paragraph (5) of subsection (d)
13            of Section 16-115 of the Public Utilities Act,
14            provided that the amount purchased paid by the
15            utility in any year will be limited by paragraph
16            (2) of this subsection (d);
17                (ii) provide that the utility's payment
18            obligation in respect of the quantity of
19            electricity determined pursuant to the preceding
20            clause (i) for any month shall be limited to an
21            amount equal to (1) the difference of the electric
22            generation variable charge, the fuel charge, and
23            the fixed monthly charge, that would be payable by
24            the utility for such month based on such quantity
25            of electricity between the contract price
26            determined pursuant to clause (iv) of subparagraph

 

 

09700SB1653ham001- 58 -LRB097 05721 ASK 56016 a

1            (B) (A) of this paragraph (3), minus the product of
2            (1) of this subsection (d) and the day-ahead price
3            for electricity delivered to the regional
4            transmission organization market of the electric
5            utility that is party to such sourcing agreement
6            (or any successor delivery point at which such
7            utility's supply obligations are financially
8            settled on an hourly basis) (the "reference
9            price") on the day preceding the day on which the
10            electricity is delivered to the initial clean coal
11            facility busbar, multiplied by (2) the quantity of
12            electricity determined pursuant to the preceding
13            clause (i), calculated for each hour in such month;
14            and
15                (iii) not require the utility to take physical
16            delivery of the electricity produced by the
17            facility;
18            (D) general provisions, which shall:
19                (i) specify a term of no more than 30 years,
20            commencing on the commercial operation date of the
21            facility;
22                (ii) provide that electric utilities shall
23            maintain adequate records documenting purchases
24            under the sourcing agreements entered into to
25            comply with this subsection (d) and shall file an
26            accounting with the load forecast that must be

 

 

09700SB1653ham001- 59 -LRB097 05721 ASK 56016 a

1            filed with the Agency by July 15 of each year, in
2            accordance with subsection (d) of Section 16-111.5
3            of the Public Utilities Act.
4                (iii) provide that all costs associated with
5            the initial clean coal facility will be
6            periodically reported to the Federal Energy
7            Regulatory Commission and to purchasers in
8            accordance with applicable laws governing
9            cost-based wholesale power contracts;
10                (iv) permit the Illinois Power Agency, if it is
11            so authorized by law, to assume ownership of the
12            initial clean coal facility, without monetary
13            consideration and otherwise on reasonable terms
14            acceptable to the Agency, if the Agency so requests
15            no less than 3 years prior to the end of the stated
16            contract term;
17                (v) require the owner of the initial clean coal
18            facility to comply with provisions reflecting
19            those set forth in Section 1-76.5 of this Act;
20            provide documentation to the Commission each year,
21            starting in the facility's first year of
22            commercial operation, accurately reporting the
23            quantity of carbon emissions from the facility
24            that have been captured and sequestered and report
25            any quantities of carbon released from the site or
26            sites at which carbon emissions were sequestered

 

 

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1            in prior years, based on continuous monitoring of
2            such sites. If, in any year after the first year of
3            commercial operation, the owner of the facility
4            fails to demonstrate that the initial clean coal
5            facility captured and sequestered at least 50% of
6            the total carbon emissions that the facility would
7            otherwise emit or that sequestration of emissions
8            from prior years has failed, resulting in the
9            release of carbon dioxide into the atmosphere, the
10            owner of the facility must offset excess
11            emissions. Any such carbon offsets must be
12            permanent, additional, verifiable, real, located
13            within the State of Illinois, and legally and
14            practicably enforceable. The cost of such offsets
15            for the facility that are not recoverable shall not
16            exceed $15 million in any given year. No costs of
17            any such purchases of carbon offsets may be
18            recovered from a utility or its customers. All
19            carbon offsets purchased for this purpose and any
20            carbon emission credits associated with
21            sequestration of carbon from the facility must be
22            permanently retired. The initial clean coal
23            facility shall not forfeit its designation as a
24            clean coal facility if the facility fails to fully
25            comply with the applicable carbon sequestration
26            requirements in any given year, provided the

 

 

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1            requisite offsets are purchased. However, the
2            Attorney General, on behalf of the People of the
3            State of Illinois, may specifically enforce the
4            facility's sequestration requirement and the other
5            terms of this contract provision. Compliance with
6            the sequestration requirements and offset purchase
7            requirements specified in paragraph (3) of this
8            subsection (d) shall be reviewed annually by an
9            independent expert retained by the owner of the
10            initial clean coal facility, with the advance
11            written approval of the Attorney General. The
12            Commission may, in the course of the review
13            specified in item (vii), reduce the allowable
14            return on equity for the facility if the facility
15            wilfully fails to comply with the carbon capture
16            and sequestration requirements set forth in this
17            item (v);
18                (vi) include limits on, and accordingly
19            provide for a reduction modification of, the
20            amount the utility is required to source under the
21            sourcing agreement consistent with paragraph (2)
22            of this subsection (d);
23                (vii) require Commission review: (1) to
24            determine the justness, reasonableness, and
25            prudence of the inputs to the formula referenced in
26            subparagraphs (A)(i) through (A)(iii) of paragraph

 

 

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1            (3) of this subsection (d), prior to an adjustment
2            in those inputs including, without limitation, the
3            capital structure and return on equity, fuel
4            costs, and other operations and maintenance costs
5            and (2) to approve the costs to be passed through
6            to customers under the sourcing agreement by which
7            the utility satisfies its statutory obligations.
8            Commission review shall occur no less than every 3
9            years, regardless of whether any adjustments have
10            been proposed, and shall be completed within 9
11            months;
12                (vii) (viii) limit the utility's obligation to
13            such amount as the utility is allowed to recover
14            through tariffs filed with the Commission,
15            provided that neither the clean coal facility nor
16            the utility waives any right to assert federal
17            pre-emption or any other argument in response to a
18            purported disallowance of recovery costs;
19                (viii) (ix) limit the utility's or alternative
20            retail electric supplier's obligation to incur any
21            liability to only those times until such time as
22            the facility is in commercial operation and
23            generating power and energy and such power and
24            energy is being delivered to the facility busbar;
25                (ix) provide that each electric utility shall
26            have the right to determine whether the

 

 

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1            obligations of the utility party under the
2            sourcing agreement shall be governed by the power
3            purchase provisions or the contract for
4            differences provisions before entering into the
5            sourcing agreements; the provisions of this item
6            (ix) are severable under Section 1.31 of the
7            Statute on Statutes;
8                (x) provide that the owner or owners of the
9            initial clean coal facility, which is the
10            counterparty to such sourcing agreement, shall
11            have the right from time to time to elect whether
12            the obligations of the utility party thereto shall
13            be governed by the power purchase provisions or the
14            contract for differences provisions;
15                (x) (xi) append documentation showing that the
16            formula rate and contract, insofar as they relate
17            to the power purchase provisions, have been
18            approved by the Federal Energy Regulatory
19            Commission pursuant to Section 205 of the Federal
20            Power Act;
21                (xi) (xii) provide that any changes to the
22            terms of the contract, insofar as such changes
23            relate to the power purchase provisions, are
24            subject to review under the public interest
25            standard applied by the Federal Energy Regulatory
26            Commission pursuant to Sections 205 and 206 of the

 

 

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1            Federal Power Act; and
2                (xii) (xiii) conform with customary lender
3            requirements in power purchase agreements used as
4            the basis for financing non-utility generators.
5                (xiii) provide for performance incentives
6            regarding availability, efficiency, and by-product
7            quantities, with premium performance and
8            shortfalls in performance to result in positive
9            and negative adjustments, respectively, to the
10            rate of return approved by the Commission,
11            provided that such rate of return in any year shall
12            not be decreased by more than $25,000,000 or
13            increased by more than $12,500,000 as a result of
14            such performance incentives. Such performance
15            incentives shall be structured so that any
16            increases in the rate of return as a result of such
17            performance incentives are designed not to exceed
18            the projected benefits to the buyers resulting
19            from the initial clean coal facility's achievement
20            of that performance incentive;
21                (xiv) include forecasting and scheduling
22            obligations that take account of the requirements
23            of the applicable regional transmission
24            organizations; and
25                (xv) include operating guidelines relating to
26            the operating configuration and dispatch of the

 

 

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1            initial clean coal facility, which guidelines
2            shall be subject to change from time to time with
3            input from a committee consisting of
4            representatives of the electric utilities and
5            alternative retail electric suppliers that are
6            parties to sourcing agreements with the initial
7            clean coal facility; any actions taken or not taken
8            by the owner of the initial clean coal facility in
9            compliance with such operating guidelines shall be
10            deemed to be prudent, and the prudence of the costs
11            resulting from the action shall be evaluated in
12            light of the fact that the initial clean coal
13            facility is required to comply with such operating
14            guidelines.
15        (4) Effective date of sourcing agreements with the
16    initial clean coal facility. No later than 30 days after
17    the effective date of this amendatory Act of the 97th
18    General Assembly, the initial clean coal facility shall
19    submit a draft sourcing agreement to the Agency and each
20    electric utility required to enter into such agreements
21    pursuant to paragraph (3) of this subsection (d) and the
22    initial clean coal facility and each such electric utility
23    shall promptly and diligently negotiate in good faith over
24    the terms of the sourcing agreement. Within 30 days after
25    receipt of the draft sourcing agreement, each such electric
26    utility shall provide the Agency and the owner of the

 

 

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1    initial clean coal facility with its comments and
2    recommended revisions to the draft sourcing agreement.
3    Within 15 days after the receipt of the electric utility's
4    comments and recommended revisions, the owner of the
5    initial clean coal facility shall submit its responsive
6    comments and a further revised draft of the sourcing
7    agreement to the Agency. The Agency shall review the draft
8    sourcing agreement and comments and retain an independent,
9    qualified, and experienced mediator to mediate disputes
10    over the draft sourcing agreement's terms. The mediator
11    shall not own or control any direct or indirect interest in
12    the initial clean coal facility and shall have no
13    contractual relationship with the initial clean coal
14    facility. The mediator shall have knowledge of the energy
15    industry.
16        If the parties to the sourcing agreement do not agree
17    on the terms in the sourcing agreement within 15 days after
18    receiving the owner's responsive comments and further
19    revised draft, then the mediator retained by the Agency
20    shall mediate the dispute between the parties. If the
21    parties are in agreement on the terms of the sourcing
22    agreement, then the Agency shall approve the final draft
23    sourcing agreement within 30 days after the parties reach
24    agreement and notify the Commission of that agreement. If,
25    within 30 days after the commencement of mediation, the
26    parties have failed to come to agreement, then the Agency

 

 

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1    shall, with assistance, as appropriate, from the mediator
2    retained pursuant to this paragraph (4), review and revise
3    the draft sourcing agreement as necessary.
4        The Agency may approve a sourcing agreement only after
5    it finds the sourcing agreement is consistent with the
6    provisions of this Act and contains only terms that are
7    balanced and equitable and fairly protect the interests of
8    the parties to the sourcing agreement, with such approval
9    to occur no later than 60 days after the commencement of
10    the mediation. The Agency shall not withhold or condition
11    its approval of the sourcing agreement based upon least
12    cost resource principles or whether or not it would be
13    prudent for buyers to enter into such an agreement if there
14    were no legal requirement to do so, nor shall the
15    resolution of open issues be based on these principles.
16        If the sourcing agreement is approved, then each
17    electric utility required to enter into a sourcing
18    agreement shall have 30 days after either the Agency's
19    approval or the issuance of any necessary approval by the
20    Federal Energy Regulatory Commission, whichever is later,
21    to enter into the sourcing agreement. The Agency shall
22    submit the approved sourcing agreement to the Commission
23    within 15 days after approval. Each electric utility and
24    the initial clean coal facility shall pay a reasonable fee
25    as required by the Agency for its services under this
26    paragraph (4) and shall pay the mediator's reasonable fees,

 

 

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1    if any. The Agency shall adopt and make public a policy
2    detailing the process for retaining a mediator under this
3    paragraph (4).
4        Any proposed sourcing agreement with the initial clean
5    coal facility shall not become effective unless a facility
6    cost report and Commission report, as described in this
7    paragraph (4), the following reports are prepared and
8    submitted, whether prepared and submitted before or after
9    the effective date of this amendatory Act of the 97th
10    General Assembly. and authorizations and approvals
11    obtained:
12        (i) Facility cost report. The owner of the initial
13    clean coal facility shall submit to the Commission, the
14    Agency, and the General Assembly a front-end engineering
15    and design study, a facility cost report, method of
16    financing (including but not limited to structure and
17    associated costs), and an operating and maintenance cost
18    quote for the facility (collectively "facility cost
19    report"), which shall be prepared in accordance with the
20    requirements of this paragraph (4) of subsection (d) of
21    this Section, and shall provide the Commission and the
22    Agency access to the work papers, relied upon documents,
23    and any other backup documentation related to the facility
24    cost report.
25        (ii) Commission report. Within 6 months following
26    receipt of the facility cost report, the Commission, in

 

 

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1    consultation with the Agency, shall submit a Commission
2    report to the General Assembly setting forth its analysis
3    of the facility cost report. Such report shall include, but
4    not be limited to, a comparison of the costs associated
5    with electricity generated by the initial clean coal
6    facility to the costs associated with electricity
7    generated by other types of generation facilities, an
8    analysis of the rate impacts on residential and small
9    business customers over the life of the sourcing
10    agreements, and an analysis of the likelihood that the
11    initial clean coal facility will commence commercial
12    operation by and be delivering power to the facility's
13    busbar by 2016. To assist in the preparation of its report,
14    the Commission, in consultation with the Agency, may hire
15    one or more experts or consultants, the costs of which
16    shall be paid for by the owner of the initial clean coal
17    facility. The Commission and Agency may begin the process
18    of selecting such experts or consultants prior to receipt
19    of the facility cost report.
20            (iii) General Assembly approval. The proposed
21        sourcing agreements shall not take effect unless,
22        based on the facility cost report and the Commission's
23        report, the General Assembly enacts authorizing
24        legislation approving (A) the projected price, stated
25        in cents per kilowatthour, to be charged for
26        electricity generated by the initial clean coal

 

 

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1        facility, (B) the projected impact on residential and
2        small business customers' bills over the life of the
3        sourcing agreements, and (C) the maximum allowable
4        return on equity for the project; and
5            (iv) Commission review. If the General Assembly
6        enacts authorizing legislation pursuant to
7        subparagraph (iii) approving a sourcing agreement, the
8        Commission shall, within 90 days of such enactment,
9        complete a review of such sourcing agreement. During
10        such time period, the Commission shall implement any
11        directive of the General Assembly, resolve any
12        disputes between the parties to the sourcing agreement
13        concerning the terms of such agreement, approve the
14        form of such agreement, and issue an order finding that
15        the sourcing agreement is prudent and reasonable.
16        The facility cost report shall be prepared as follows:
17        (A) The facility cost report shall be prepared by duly
18    licensed engineering and construction firms detailing the
19    estimated capital costs payable to one or more contractors
20    or suppliers for the engineering, procurement and
21    construction of the components comprising the initial
22    clean coal facility and the estimated costs of operation
23    and maintenance of the facility. The facility cost report
24    shall include:
25            (i) an estimate of the capital cost of the core
26        plant based on one or more front end engineering and

 

 

09700SB1653ham001- 71 -LRB097 05721 ASK 56016 a

1        design studies for the gasification island and related
2        facilities. The core plant shall include all civil,
3        structural, mechanical, electrical, control, and
4        safety systems; and .
5            (ii) an estimate of the capital cost of the balance
6        of the plant, including any capital costs associated
7        with sequestration of carbon dioxide emissions and all
8        interconnects and interfaces required to operate the
9        facility, such as transmission of electricity,
10        construction or backfeed power supply, pipelines to
11        transport substitute natural gas or carbon dioxide,
12        potable water supply, natural gas supply, water
13        supply, water discharge, landfill, access roads, and
14        coal delivery.
15        In the facility cost report, the The quoted
16    construction costs shall be expressed in nominal dollars as
17    of the date that the quote is prepared and shall include
18    (1) capitalized financing costs during construction, (2)
19    taxes, insurance, and other owner's costs, and (3) an
20    assumed escalation in materials and labor beyond the date
21    as of which the construction cost quote is expressed.
22        In the facility cost report, the (B) The front end
23    engineering and design study for the gasification island
24    and the cost study for the balance of plant shall include
25    sufficient design work to permit quantification of major
26    categories of materials, commodities and labor hours, and

 

 

09700SB1653ham001- 72 -LRB097 05721 ASK 56016 a

1    receipt of quotes from vendors of major equipment required
2    to construct and operate the clean coal facility.
3        (C) The facility cost report shall also include an
4    operating and maintenance cost quote that will provide the
5    estimated cost of delivered fuel, personnel, maintenance
6    contracts, chemicals, catalysts, consumables, spares, and
7    other fixed and variable operations and maintenance costs.
8    (a) The delivered fuel cost estimate will be provided by a
9    recognized third party expert or experts in the fuel and
10    transportation industries. (b) The balance of the
11    operating and maintenance cost quote, excluding delivered
12    fuel costs, will be developed based on the inputs provided
13    by duly licensed engineering and construction firms
14    performing the construction cost quote, potential vendors
15    under long-term service agreements and plant operating
16    agreements, or recognized third party plant operator or
17    operators.
18        The operating and maintenance cost quote (including
19    the cost of the front end engineering and design study)
20    shall be expressed in nominal dollars as of the date that
21    the quote is prepared and shall include (1) taxes,
22    insurance, and other owner's costs, and (2) an assumed
23    escalation in materials and labor beyond the date as of
24    which the operating and maintenance cost quote is
25    expressed.
26        (D) The facility cost report shall also include (i) an

 

 

09700SB1653ham001- 73 -LRB097 05721 ASK 56016 a

1    analysis of the initial clean coal facility's ability to
2    deliver power and energy into the applicable regional
3    transmission organization markets and (ii) an analysis of
4    the expected capacity factor for the initial clean coal
5    facility.
6        (E) Amounts paid to third parties unrelated to the
7    owner or owners of the initial clean coal facility to
8    prepare the core plant construction cost quote, including
9    the front end engineering and design study, and the
10    operating and maintenance cost quote will be reimbursed
11    through Coal Development Bonds.
12        (5) Re-powering and retrofitting coal-fired power
13    plants previously owned by Illinois utilities to qualify as
14    clean coal facilities. During the 2009 procurement
15    planning process and thereafter, the Agency and the
16    Commission shall consider sourcing agreements covering
17    electricity generated by power plants that were previously
18    owned by Illinois utilities and that have been or will be
19    converted into clean coal facilities, as defined by Section
20    1-10 of this Act. Pursuant to such procurement planning
21    process, the owners of such facilities may propose to the
22    Agency sourcing agreements with utilities and alternative
23    retail electric suppliers required to comply with
24    subsection (d) of this Section and item (5) of subsection
25    (d) of Section 16-115 of the Public Utilities Act, covering
26    electricity generated by such facilities. In the case of

 

 

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1    sourcing agreements that are power purchase agreements,
2    the contract price for electricity sales shall be
3    established on a cost of service basis. In the case of
4    sourcing agreements that are contracts for differences,
5    the contract price from which the reference price is
6    subtracted shall be established on a cost of service basis.
7    The Agency and the Commission may approve any such utility
8    sourcing agreements that do not exceed cost-based
9    benchmarks developed by the procurement administrator, in
10    consultation with the Commission staff, Agency staff and
11    the procurement monitor, subject to Commission review and
12    approval. The Commission shall have authority to inspect
13    all books and records associated with these clean coal
14    facilities during the term of any such contract.
15        (6) Costs incurred by a utility under this subsection
16    (d) or pursuant to a contract or sourcing agreement entered
17    into under this subsection (d) shall be deemed prudently
18    incurred and reasonable in amount and the electric utility
19    shall be entitled to full cost recovery pursuant to the
20    tariffs filed with the Commission.
21    (e) The draft procurement plans are subject to public
22comment, as required by Section 16-111.5 of the Public
23Utilities Act and Section 1-78 of this Act.
24    (f) The Agency shall submit the final procurement plan to
25the Commission. The Agency shall revise a procurement plan if
26the Commission determines that it does not meet the standards

 

 

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1set forth in Section 16-111.5 of the Public Utilities Act and
2Section 1-78 of this Act.
3    (g) The Agency shall assess fees to each affected utility
4to recover the costs incurred in preparation of the annual
5procurement plan for the utility.
6    (h) The Agency shall assess fees to each bidder to recover
7the costs incurred in connection with a competitive procurement
8process.
9    (i) The Agency shall assess fees to the initial clean coal
10facility to recover the costs incurred in preparation of each
11procurement plan for the initial clean coal facility.
12    (j) The General Assembly deems it a prudent business
13practice to develop and promote economic opportunities for
14minorities, females, and persons with disabilities in the
15energy production industry.
16    The initial clean coal facility, any clean coal facility,
17and any clean coal SNG facility shall include in any agreement
18to sell electric power or SNG entered into pursuant to this Act
19provisions that require the owner of the facility to make a
20good faith effort to ensure that an amount equal to not less
21than 15% of the value of its prime construction contract for
22the facility shall be established as a goal to be awarded to
23minority owned businesses, female owned businesses, and
24businesses owned by a person with a disability; provided that
25at least 75% of the amount of such total goal shall be for
26minority owned businesses.

 

 

09700SB1653ham001- 76 -LRB097 05721 ASK 56016 a

1    "Minority owned business", "female owned business", and
2"business owned by a person with a disability" shall have the
3meanings ascribed to them in Section 2 of the Business
4Enterprise for Minorities, Females, and Persons with
5Disabilities Act.
6(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09;
796-159, eff. 8-10-09; 96-1437, eff. 8-17-10.)
 
8    (20 ILCS 3855/1-76 new)
9    Sec. 1-76. Costs and revenue recoverable by the initial
10clean coal facility.
11    (a) The price paid for electricity generated by the initial
12clean coal facility shall be based on a formula rate using a
13cost of service methodology applicable to wholesale electric
14power contracts employing a level or deferred capital component
15and in accordance with the Uniform System of Accounts, subject
16to and as specifically limited by the provisions set forth in
17this Section.
18    The formula rate shall determine 3 components of the price
19under the sourcing agreements: (1) a fuel charge, (2) an
20electric generation variable charge, and (3) a fixed monthly
21charge. The fuel charge for any month shall be stated in
22dollars per month and shall consist of the total actual fuel
23costs incurred, after taking account of the subtraction of
24miscellaneous net revenue as provided in subsection (d) of this
25Section. The electric generation variable charge for any period

 

 

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1shall be stated in dollars per MWh and shall consist of all
2costs incurred by the initial clean coal facility, other than
3fuel costs, associated with production of electric energy by
4the initial clean coal facility's power block, which costs vary
5directly with the level of production of electric energy. The
6fixed monthly charge shall be stated in dollars per month per
7MW of nameplate capacity of the initial clean coal facility's
8power block and shall consist of all costs incurred by the
9initial clean coal facility that are described in, and as
10limited by the provisions of, subsections (b), (c), (d), (e),
11(f), and (g) of this Section, other than the costs incorporated
12into the calculation of the fuel charge and the electric
13generation variable charge.
14    No later than 30 days after the approval of the sourcing
15agreement by the Agency pursuant to paragraph (4) of subsection
16(d) of Section 1-75 of this Act, the initial clean coal
17facility shall provide to the Commission projections of its
18costs for the term of the sourcing agreements. Within 90 days
19thereafter, the Commission shall, based upon such projections
20and the provisions of this Section, determine the projected
21components of the price for each year for the initial clean
22coal facility. No later than 6 months before the expected
23commencement of commercial operation of the initial clean coal
24facility and the commencement of each operating year
25thereafter, the initial clean coal facility shall submit to the
26Commission protections of its costs and dispatch levels for the

 

 

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1upcoming year. Within 120 days after the receipt of the initial
2clean coal facility's projections of its costs and dispatch
3levels for the upcoming year, the Commission shall calculate a
4fixed monthly charge and an electric generation variable charge
5for the upcoming year using the inputs to the formula rate
6under the provisions of this Section. If the Commission does
7not calculate such components of the price for any year as of
8the beginning of such year, then the initial clean coal
9facility shall calculate such components of the price based
10upon its projections and the provisions of this Section, with
11any subsequent cost disallowance by the Commission to be
12reflected through a true-up of costs in the next year. If at
13any time the Commission, acting in accordance with this
14Section, disallows any cost, then the amount of such
15disallowance shall be incorporated as a deduction into the
16calculation of the fixed monthly charge and the electric
17generation variable charge, as applicable, for the next year.
18    (b) Capital costs set by the Commission according to this
19subsection (b) shall be included in the formula rate. "Capital
20costs" means costs for the purchase of land, buildings,
21construction, and equipment to be used in the production of
22electricity, and other costs recorded in the Electric Plant
23Accounts and other applicable Balance Sheet Accounts of the
24Uniform System of Accounts for the initial clean coal facility.
25The Capital Development Board shall calculate a range of
26capital costs that it believes would be a reasonable cost for

 

 

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1the initial clean coal facility. The Capital Development Board
2shall commence performing its responsibilities under this
3subsection (b) within 30 days after the effective date of this
4amendatory Act of the 97th General Assembly. In determining a
5range of capital costs, the Capital Development Board shall
6base its evaluation and judgment on professional engineering
7and regulatory accounting principles and include any cost
8information and update on costs that may be provided by the
9initial clean coal facility and shall not employ least cost
10resource principles. In addition, the Capital Development
11Board may:
12        (1) include in its consideration the information in a
13    facility cost report, if any, that was prepared and
14    submitted by the initial clean coal facility to the
15    Commission in accordance with paragraph (4) of subsection
16    (d) of Section 1-75 of this Act;
17        (2) consult as much as it deems necessary with the
18    initial clean coal facility;
19        (3) conduct whatever research and investigation it
20    deems necessary; and
21        (4) retain third parties to assist in its
22    determination, provided that such third parties shall not
23    own or control any direct or indirect interest in the
24    initial clean coal facility and shall have no contractual
25    relationship with the initial clean coal facility.
26    The initial clean coal facility shall cooperate with the

 

 

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1Capital Development Board in any investigation it deems
2necessary.
3    The Capital Development Board shall make its final
4determination of the range of capital costs confidentially and
5shall submit that range to the Commission in a confidential
6filing no later than 90 days after the Capital Development
7Board is required to commence performing its responsibilities
8under this subsection (b). The initial clean coal facility
9shall submit to the Commission its estimate of the capital
10costs to be included in the formula rate. Only after the
11initial clean coal facility has submitted this estimate shall
12the Commission publicly announce the range of capital costs
13submitted by the Capital Development Board. In the event that
14the estimate submitted by the initial clean coal facility is
15within or below the range submitted by the Capital Development
16Board, the initial clean coal facility's estimate shall be
17approved by the Commission as the amount of pre-approved
18capital costs.
19    In the event that the estimate submitted by the initial
20clean coal facility is above the range submitted by the Capital
21Development Board, the amount of capital costs at the lowest
22end of the range submitted by the Capital Development Board
23shall be approved by the Commission as the amount of
24pre-approved capital costs. "Pre-approved capital costs" means
25the amount of capital costs that will be included in the
26formula rate to the extent such costs are actually incurred,

 

 

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1with no further review or approval in respect to whether they
2are prudently incurred. The Commission's determination of
3pre-approved capital costs shall be made within 15 days after
4the initial clean coal facility submits its capital cost
5estimate. The Commission's decision regarding pre-approved
6capital costs shall be final and shall not be subject to
7judicial or administrative review.
8    Once made, the Commission's determination of the amount of
9pre-approved capital costs may not be increased unless the
10Commission determines that the incremental costs are
11reasonable, in which case one-third of such reasonable
12incremental costs shall be included in the formula rate and
13recoverable by the initial clean coal facility and two-thirds
14of such costs shall be borne by the initial clean coal facility
15and its contractors, provided that to the extent such
16reasonable incremental costs are the result of change in law or
17non-insurable force majeure, all of such costs shall be
18included in the formula rate and recoverable by the initial
19clean coal facility.
20    "Change in law" means any change, including any enactment,
21repeal, or amendment, in a law, ordinance, rule, regulation,
22interpretation, permit, license, consent or order, including
23those relating to taxes or to environmental matters, or in the
24interpretation or application thereof by any governmental
25authority occurring after May 31, 2011.
26    "Non-insurable force majeure" means events outside of the

 

 

09700SB1653ham001- 82 -LRB097 05721 ASK 56016 a

1reasonable control of the owner of the initial clean coal
2facility and its contractors, subcontractors, and agents that
3are not included on a list, to be attached to the sourcing
4agreement and subject to the procedures set forth in paragraph
5(4) of subsection (d) of Section 1-75 of this Act, of events
6that are customarily covered by builder's risk insurance
7policies for the construction of electric generating plants and
8other large process plants in the United States. "Non-insurable
9force majeure" shall not include changes in prices or other
10changes in market conditions.
11    Any rebates, refunds, or other payments received by the
12owner of the initial clean coal facility from any of its
13contractors with respect to the contractor bearing risk for
14capital cost overruns shall be excluded from miscellaneous net
15revenue and shall not otherwise reduce the costs of the owner
16of the initial clean coal facility for purposes of the formula
17rate. For purposes of this subsection (b), "reasonable" means
18that the decisions, construction, and supervision of
19construction by the owner of the initial clean coal facility
20and its contractors underlying the initial capital cost and
21significant additions to the initial capital cost of the
22initial clean coal facility resulted in efficient, economical,
23and timely construction. In determining the reasonableness of
24the capital costs of the initial clean coal facility, the
25Commission shall consider the knowledge and circumstances
26prevailing at the time of each relevant decision or action of

 

 

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1the owner of the initial clean coal facility and its
2contractors.
3    The Commission may determine that the amount of
4pre-approved capital costs may be increased only after notice
5and a hearing. At that hearing, the Capital Development Board
6shall submit a report recommending whether the incremental
7costs should be approved in full or in part or rejected. The
8Commission may approve in whole or in part or reject the
9incremental capital costs based on whether they are reasonable.
10At the request of the owner of the initial clean coal facility
11made not more often than once every 12 months during the
12construction period of the initial clean coal facility, the
13Commission shall conduct interim reviews to determine whether
14capital costs specified in such request and incurred or to be
15incurred by the owner of the initial clean coal facility, are
16reasonable.
17    The Capital Development Board shall monitor the
18construction of the initial clean coal facility for the full
19duration of construction. The Capital Development Board, in its
20discretion, may retain third parties to facilitate such
21monitoring, provided that such third parties shall not own or
22control any direct or indirect interest in the initial clean
23coal facility and shall have no contractual relationship with
24the initial clean coal facility. The initial clean coal
25facility shall pay a reasonable fee as required by the Capital
26Development Board for the Capital Development Board's services

 

 

09700SB1653ham001- 84 -LRB097 05721 ASK 56016 a

1under this subsection (b), and such fee shall not be passed
2through to a utility or its customers. If a third party is
3retained by the Capital Development Board for the determination
4of a range of capital costs or monitoring of construction, the
5initial clean coal facility must pay for the third party's
6reasonable fees, and such costs may not be passed through to a
7utility or its customers.
8    The provisions of this subsection (b) shall apply to the
9capital costs for the initial construction of the initial clean
10coal facility and not to capital costs incurred beyond the
11initial construction, including costs for replacement of
12equipment and capital improvements, which capital costs shall
13be subject to review by the Commission and included in the
14formula rate to the extent they are determined to be prudently
15incurred.
16    (c) Operations and maintenance costs set by the Commission
17according to this subsection (c) shall be included in the
18formula rate. Operations and maintenance costs mean costs
19incurred for the administration, supervision, operation,
20maintenance, preservation, and protection of the initial clean
21coal facility's physical plant and other costs recorded in the
22Operation and Maintenance Expense Accounts and other
23applicable Income Statement Accounts of the Uniform System of
24Accounts for the initial clean coal facility. The Commission
25shall assess the prudency of the operations and maintenance
26costs for the initial clean coal facility and shall allow the

 

 

09700SB1653ham001- 85 -LRB097 05721 ASK 56016 a

1initial clean coal facility to include in the formula rate only
2those costs the Commission deems to be prudent. The Commission
3may in its discretion retain an expert to assist in its review
4of operations and maintenance costs. The initial clean coal
5facility shall pay for the expert's fees if an expert is
6retained by the Commission, and such costs may not be passed
7through to a utility or its customers. The Commission's
8determination regarding the amount of operations and
9maintenance costs that may be included in the formula rate for
10each year shall be made in accordance with this Section.
11    (d) Actual fuel costs shall be set by the Agency through a
12SNG feedstock procurement, pursuant to Section 1-78 of this
13Act, to be performed at least every 5 years, and purchased by
14the initial clean coal facility pursuant to a reasonable fuel
15supply plan, with coal comprising at least 50% of the total
16feedstock over the term of a sourcing agreement with all coal
17having high volatile bituminous rank and greater than 1.7
18pounds of sulfur per million btu content, SNG derived from coal
19comprising at least 50% of the fuel to generate electricity,
20SNG derived from biomass comprising up to 10% of the fuel to
21generate electricity with the approval of the Commission, and
22natural gas comprising the remainder of the fuel to generate
23electricity. Actual fuel costs shall consist of all costs
24associated with the procurement of fuel, including, but not
25limited to, commodity costs, transportation costs,
26administrative costs, and costs relating to the procurement

 

 

09700SB1653ham001- 86 -LRB097 05721 ASK 56016 a

1process. Actual fuel costs, as so determined, shall be reduced
2by miscellaneous net revenue received by the owner of the
3initial clean coal facility, including, but not limited to, net
4revenue from the sale of emission allowances, if any,
5substitute natural gas, if any, grants or other support
6provided by the State of Illinois or the United States
7Government, firm transmission rights, if any, by-products
8produced by the facility, any capacity derived from the
9facility and bid into the capacity markets or otherwise sold
10and any energy generated as a result of such capacity being
11called, whether generated from synthesis gas derived from coal,
12from SNG, or from natural gas, less non-generation variable
13costs. "Non-generation variable costs" means all costs, other
14than fuel costs, associated with the production of SNG that is
15not consumed by the initial clean coal facility's power block,
16which costs vary directly with the level of production of SNG.
17Actual fuel costs shall be calculated pursuant to this
18subsection (d) and included in the formula rate without any
19determination by the Commission as to prudency.
20    (e) Sequestration costs set by the Commission according to
21this subsection (e) shall be included in the formula rate.
22    "Sequestration costs" means costs incurred to (1) capture
23carbon dioxide; (2) compress carbon dioxide; (3) build,
24operate, and maintain a sequestration site in which carbon
25dioxide may be injected; (4) build, operate, and maintain a
26carbon dioxide pipeline, which is owned by the initial clean

 

 

09700SB1653ham001- 87 -LRB097 05721 ASK 56016 a

1coal facility; (5) transport the carbon dioxide to a
2sequestration site or a pipeline; and (6) perform monitoring,
3verification and other activities associated with carbon
4capture and sequestration.
5    "Sequestration capital costs" means sequestration costs
6recorded in the Electric Plant Accounts and other applicable
7Balance Sheet Accounts of the Uniform System of Accounts for
8the initial clean coal facility.
9    "Sequestration operations and maintenance costs" means
10sequestration costs that are recorded in the Operation and
11Maintenance Expense Accounts and other applicable Income
12Statement Accounts of the Uniform System of Accounts for the
13initial clean coal facility and shall include maintenance,
14monitoring, and verification costs.
15    The Capital Development Board shall calculate an estimate
16of sequestration capital costs that it believes would be a
17reasonable cost for the initial clean coal facility's
18sequestration facilities and an estimate of average annual
19sequestration operations and maintenance costs that it
20believes would be a reasonable average annual operation and
21maintenance cost for the initial clean coal facility's carbon
22capture and sequestration activities. The Capital Development
23Board shall commence performing its responsibilities under
24this subsection (e) within 30 days after the effective date of
25this amendatory Act of the 97th General Assembly. In
26determining sequestration capital costs and sequestration

 

 

09700SB1653ham001- 88 -LRB097 05721 ASK 56016 a

1operations and maintenance costs, the Capital Development
2Board shall base its evaluation and judgment on professional
3engineering and regulatory accounting principles and include
4any cost information and update on costs that may be provided
5by the initial clean coal facility and shall not employ least
6cost resource principles. In addition the Capital Development
7Board may: (A) include in its consideration cost estimate
8information in a facility cost report, if any, that was
9prepared and submitted by the initial clean coal facility to
10the Commission in accordance with paragraph (4) of subsection
11(d) of Section 1-75 of this Act; (B) consult as much as it
12deems necessary with the initial clean coal facility; (C)
13conduct whatever research and investigation it deems
14necessary; and (D) retain third parties to assist in its
15determination, provided that such third parties shall not own
16or control any direct or indirect interest in the initial clean
17coal facility and shall have no contractual relationship with
18the initial clean coal facility. The initial clean coal
19facility shall cooperate with the Capital Development Board in
20any investigation it deems necessary.
21    The Capital Development Board shall make its final
22determination of sequestration capital costs and sequestration
23operations and maintenance costs and submit such determination
24to the Commission no later than 90 days after the Capital
25Development Board is required to commence performing its
26responsibilities under this subsection (e). The Capital

 

 

09700SB1653ham001- 89 -LRB097 05721 ASK 56016 a

1Development Board shall monitor construction of the
2sequestration facilities in the same manner, and with the same
3rights to retain an expert and recover the costs thereof, as
4set forth in subsection (b) of this Section.
5    "Actual sequestration costs" means for any year the sum of:
6(i) the annual amortized portion of sequestration capital
7costs, based on level amortization from the later of the date
8such costs are incurred and the commercial operation date until
9the end of the term of the sourcing agreements; (ii) the rate
10of return approved by the Commission pursuant to subsection (f)
11of this Section applied to sequestration capital costs; and
12(iii) the sequestration operations and maintenance costs
13incurred in such year.
14    "Target sequestration costs" means the sum of: (i) the
15annual amortized portion of the estimated sequestration
16capital costs determined by the Capital Development Board,
17based on level amortization from the later of the date such
18costs are incurred and the commercial operation date until the
19end of the term of the sourcing agreements; (ii) the rate of
20return approved by the Commission pursuant to subsection (f) of
21this Section applied to the estimated sequestration capital
22costs determined by the Capital Development Board; (iii) the
23estimate of average annual sequestration operations and
24maintenance costs determined by the Capital Development Board,
25escalated in accordance with an escalation factor to be
26provided in the sourcing agreement from the date of the Capital

 

 

09700SB1653ham001- 90 -LRB097 05721 ASK 56016 a

1Development Board's determination to the mid-point of the
2applicable year; (iv) the sequestration cost underrun, if any,
3for the immediately preceding year, except to the extent
4applied to allow recovery of a sequestration cost overrun from
5a prior year; and (v) any sequestration costs that are the
6result of a change in law or non-insurable force majeure.
7    "Sequestration cost underrun" means for any year the
8excess, if any, of target sequestration costs for such year
9over actual sequestration costs for such year.
10    "Sequestration cost overrun" means for any year the excess,
11if any, of actual sequestration costs for such year over target
12sequestration costs for such year.
13    For any year in which there is a sequestration cost
14underrun, all actual sequestration costs shall be conclusively
15deemed to be prudent and shall be included in the formula rate
16with no further review or approval in respect of whether they
17are prudently incurred. The Commission shall review the costs
18to ensure they are mathematically correct.
19    For any year in which there is a sequestration cost
20overrun, the Commission shall determine whether all or a
21portion of such sequestration cost overrun was prudently
22incurred, except that the rate of return shall not be subject
23to review. If the Commission determines that the sequestration
24cost overrun was prudently incurred, one-third of such
25sequestration cost overrun shall be included in the formula
26rate and recoverable by the initial clean coal facility and

 

 

09700SB1653ham001- 91 -LRB097 05721 ASK 56016 a

1two-thirds of such sequestration cost overrun shall be borne by
2the initial clean coal facility and not passed through to a
3utility, an alternative retail electric supplier, or the
4customers of a utility unless and until there is a
5sequestration cost underrun for a subsequent year, in which
6event the sequestration cost overrun will be included in the
7formula rate and recoverable by the initial clean coal facility
8up to the amount of the sequestration cost underrun; provided,
9however, that if for any year two-thirds of such sequestration
10cost overrun exceeds the difference of $20,000,000 minus the
11amount of penalty, if any, payable by the initial clean coal
12facility pursuant to Section 1-76.5 with respect to that year,
13the amount of such excess shall also be included in the formula
14rate and recoverable by the initial clean coal facility. The
15detailed procedures for implementing this provision shall be
16set forth in the sourcing agreements, which procedures shall
17include a mechanism for equitably adjusting target
18sequestration costs for any year in which the quantity of
19carbon dioxide actually captured and sequestered by the initial
20clean coal facility is greater than the quantity assumed in
21calculating the estimated costs for such year.
22    "Change in law" means any change, including any enactment,
23repeal, or amendment, in a law, ordinance, rule, regulation,
24interpretation, permit, license, consent or order, including
25those relating to taxes or to environmental matters, or in the
26interpretation or application thereof by any governmental

 

 

09700SB1653ham001- 92 -LRB097 05721 ASK 56016 a

1authority occurring after January 1, 2011.
2    "Non-insurable force majeure" means events outside of the
3reasonable control of the owner of the initial clean coal
4facility and its contractors, subcontractors, and agents that
5are not included on a list, to be attached to the sourcing
6agreement and subject to the procedures set forth in paragraph
7(4) of subsection (d) of Section 1-75 of this Act, of events
8that are customarily covered by builder's risk insurance
9policies for the construction of electric generating plants and
10other large process plants in the United States. "Non-insurable
11force majeure" shall not include changes in prices or other
12changes in market conditions.
13    (f) The Commission shall determine within 120 days after
14the effective date of this amendatory Act of the 97th General
15Assembly or 120 days after the owner of the initial clean coal
16facility files initial direct testimony regarding rate of
17return with the Commission, whichever is later, the total rate
18of return on invested capital for the initial clean coal
19facility following notice and a public hearing. At the hearing,
20all interested parties, including utilities, alternative
21retail electric suppliers, the Attorney General, the Agency,
22and customers, shall be given an opportunity to be heard. In
23determining the rate of return, the Commission shall select a
24sufficient return on investment so as to enable the initial
25clean coal facility to attract capital in financial markets at
26competitive rates. The Commission shall consider the rates of

 

 

09700SB1653ham001- 93 -LRB097 05721 ASK 56016 a

1return received by developers of facilities similar to the
2initial clean coal facility inside or outside Illinois, the
3need to balance an incentive for clean-coal technology with the
4need to protect Illinois ratepayers from high electricity
5costs, and any other information the Commission deems relevant.
6    The Agency shall recommend a rate of return to the
7Commission utilizing the criteria in this subsection (f). The
8Commission shall further take into account the recommendation
9of the Agency, but shall not be bound by it. The rate of return
10shall be no lower than 75 basis points lower than the weighted
11average authorized total rates of return of the electric
12utilities in accordance with original cost rate base for their
13electric distribution assets as of January 1, 2011.
14Notwithstanding the minimum rate of return established in the
15preceding sentence, the rate of return shall be no greater than
16the total rate of return on invested capital that the initial
17clean coal facility would achieve based on an assumed 55% debt
18and 45% equity capital structure, with the cost of debt being
19the actual average cost, including all associated costs and
20fees, of the initial clean coal facility's debt and the cost of
21equity being 11.5%. The Commission's determination of the rate
22of return shall include a mechanism providing for a one-time
23adjustment at or about the commencement of commercial operation
24of the initial clean coal facility to adjust for changes in
25applicable Treasury yield rates between the date of its
26provisional determination of the rate of return and the dates

 

 

09700SB1653ham001- 94 -LRB097 05721 ASK 56016 a

1of construction period borrowing by the initial clean coal
2facility, which adjustment shall apply to 55% of total capital.
3    The Commission's decision shall be final and not subject to
4any rehearing or administrative or judicial review. The rate of
5return determined by the Commission pursuant to this subsection
6(f) shall apply for the term of the sourcing agreements and
7shall not be subject to change, except for the one-time
8adjustment to reflect Treasury yield rate changes as expressly
9contemplated by this subsection (f) and as otherwise expressly
10provided in subsection (b) of Section 1-76.5 of this Act.
11    (g) The following shall not be included in determining the
12formula rate: advertising expenses that do not meet the
13requirements of Sections 9-225 and 9-226 of the Public
14Utilities Act, political activity or lobbying expenses as
15defined by Section 9-224 of the Public Utilities Act, social
16club dues, or charitable contributions, to the extent, in each
17case, that a utility would not be permitted to recover such
18costs.
19    (h) Except as otherwise provided in subsections (b) and (f)
20of this Section 1-76, within 30 days after a decision of the
21Commission on recoverable costs under this Section, any
22interested party to the Commission's decision may apply for a
23rehearing with respect to the decision. The Commission shall
24receive and consider such application for rehearing and shall
25grant or deny the application in whole or in part within 20
26days from the date of the receipt thereof by the Commission. If

 

 

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1no rehearing is applied for within the required 30 days or an
2application for rehearing is denied, the Commission decision
3shall be final.
4    If an application for rehearing is granted, the Commission
5shall hold a rehearing within 30 days after granting the
6application. The decision of the Commission upon rehearing
7shall be final. Except as otherwise provided in subsections (b)
8and (f) of this Section 1-76, any person affected by a decision
9of the Commission under this Section 1-76 may have the decision
10reviewed only under and in accordance with the Administrative
11Review Law. Except as otherwise provided in subsections (b) and
12(f) of this Section 1-76, the provisions of the Administrative
13Review Law, all amendments modifications thereof and the rules
14adopted pursuant thereto, shall apply to and govern all
15proceedings for the judicial review of final administrative
16decisions of the Commission under this subsection (h). The term
17"administrative decision" is defined as in Section 3-101 of the
18Code of Civil Procedure.
19    (i) The Capital Development Board shall adopt and make
20public a policy detailing the process for retaining third
21parties under this Section. Any third parties retained to
22assist with calculating the capital costs or sequestration
23costs shall be retained no later than 45 days after the
24effective date of this amendatory Act of the 97th General
25Assembly.
 

 

 

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1    (20 ILCS 3855/1-76.5 new)
2    Sec. 1-76.5. Capture and sequestration requirements for
3initial clean coal facility.
4    (a) The initial clean coal facility shall provide
5documentation to the Commission each year of commercial
6operation accurately reporting the quantity of carbon
7emissions from the facility that have been captured and
8sequestered and report any quantities of carbon released from
9the site or sites at which carbon emissions were sequestered in
10prior years, based on continuous monitoring of such sites. If,
11in any year, the owner of the facility fails to demonstrate
12that (1) the portion of the facility that produces SNG captured
13and sequestered at least 90% of the carbon dioxide it would
14otherwise emit and (2) the initial clean coal facility as a
15whole captured and sequestered at least 50% of the total carbon
16emissions that the facility would otherwise emit or if the
17sequestration of emissions from prior years has failed,
18resulting in the release of carbon dioxide into the atmosphere,
19or both, then the owner of the initial clean coal facility must
20pay a penalty of $20,000,000, which shall be deposited into the
21Energy Efficiency Trust Fund and distributed pursuant to
22subsection (b) of Section 6-6 of the Renewable Energy, Energy
23Efficiency, and Coal Resources Development Law of 1997.
24    If during the first 12 months of commercial operation of
25the initial clean coal facility, there are more than 4 stops
26and starts of the portion of the facility that produces SNG,

 

 

09700SB1653ham001- 97 -LRB097 05721 ASK 56016 a

1with each stop and start of an individual unit constituting one
2stop and start, then the calculation of the quantities
3described in this subsection (a) shall not take into account
4any carbon dioxide emissions from the portion of the facility
5that produces SNG occurring during the stop and start-up
6periods, including related periods of non-steady state
7operation, associated with such excess stops and starts. The
8penalty resulting from the failure to capture and sequester at
9least the minimum amount of carbon dioxide shall not be passed
10through to a utility, an alternative retail electric suppler,
11or the customers of a utility. The initial clean coal facility
12shall not forfeit its designation as a clean coal facility if
13the facility fails to fully comply with the applicable carbon
14sequestration requirements in any given year, provided the
15requisite penalties are complied with.
16    (b) In addition to any penalty for the initial clean coal
17facility's failure to capture and sequester at least its
18minimum sequestration requirement, the Attorney General, on
19behalf of the People of the State of Illinois, shall
20specifically enforce the facility's sequestration requirement
21and the other terms of this contract provision. Such action may
22be filed in any circuit court in Illinois. By entering into a
23sourcing agreement pursuant to subsection (d) of Section 1-75
24of this Act, the initial clean coal facility agrees to waive
25any objections to venue or to the jurisdiction of the court
26with regard to the Attorney General's action for specific

 

 

09700SB1653ham001- 98 -LRB097 05721 ASK 56016 a

1performance under this Section. The Commission may reduce the
2recoverable rate of return approved pursuant to Section 1-76 of
3this Act for the facility if the facility willfully fails to
4comply with the carbon capture and sequestration requirements
5set forth in this Section.
6    (c) Compliance with the capture and sequestration
7requirements of this Section shall be assessed annually by the
8Commission, which may in its discretion retain an expert to
9facilitate its assessment. The initial clean coal facility
10shall pay for the expert's reasonable fees if an expert is
11retained by the Commission, and such costs shall not be passed
12through to a utility, an alternative retail electric supplier,
13or the customers of a utility. The Commission shall adopt and
14make public a policy detailing the process for retaining an
15expert under this Section.
16    (d) Responsibility for compliance with the capture and
17sequestration requirements specified in this Section for the
18initial clean coal facility shall reside solely with the
19initial clean coal facility regardless of whether the facility
20has contracted with another party to capture, transport, or
21sequester carbon dioxide.
 
22    (20 ILCS 3855/1-77 new)
23    Sec. 1-77. Sequestration permitting, oversight, and
24investigations.
25    (a) No clean coal facility, initial clean coal facility, or

 

 

09700SB1653ham001- 99 -LRB097 05721 ASK 56016 a

1clean coal SNG facility may transport or sequester carbon
2dioxide unless the Commission approves the method of carbon
3dioxide transportation or sequestration as provided in this
4Section. Approval shall be required regardless of whether the
5facility has contracted with another party to transport or
6sequester the carbon dioxide. Nothing in this subsection (a)
7shall release the owner or operator of a carbon dioxide
8sequestration site or carbon dioxide pipeline from any other
9permitting requirements under applicable State and federal
10laws, statutes, rules, or regulations.
11    (b) No later than 3 months prior to the date upon which the
12company intends to commence construction of the facility, the
13owner of the facility shall file with the Commission a carbon
14dioxide transportation or sequestration plan. The Commission
15shall review proposed carbon dioxide transportation and
16sequestration methods and shall approve those methods it deems
17reasonable and cost-effective. For purposes of this review,
18"cost-effective" means a commercially reasonable price for
19similar carbon dioxide transportation or sequestration
20techniques. In determining whether sequestration through
21injection is reasonable and cost-effective, the Commission may
22consult with the Illinois State Geological Survey.
23    The Commission shall hold a public hearing within 30 days
24after receipt of the facility's carbon dioxide transportation
25or sequestration plan. The Commission shall post notice of the
26review on its website upon submission of a carbon dioxide

 

 

09700SB1653ham001- 100 -LRB097 05721 ASK 56016 a

1transportation or sequestration method and shall accept
2written public comments. The Commission shall take the comments
3into account when making its decision. However, the Commission
4shall not approve a carbon dioxide sequestration method if the
5owner or operator of the sequestration site has not received
6(1) an Underground Injection Control permit from the Illinois
7Environmental Protection Agency or the United States
8Environmental Protection Agency pursuant to the Environmental
9Protection Act, (2) an Underground Injection Control permit
10from the Illinois Department of Natural Resources pursuant to
11the Illinois Oil and Gas Act, or (3) any applicable permit from
12the state in which the sequestration site is located if the
13sequestration shall take place outside of Illinois. The
14Commission shall approve or deny the carbon dioxide
15transportation or sequestration method within 90 days after the
16receipt of all required information.
17    (c) At least annually, the Illinois Environmental
18Protection Agency shall inspect all carbon dioxide
19sequestration sites in Illinois to ensure the safety and
20feasibility of those sequestration sites. However, the
21Illinois Environmental Protection Agency may, as often as
22deemed necessary, monitor and conduct investigations of those
23sites. The owner or operator of the sequestration site must
24cooperate with the Illinois Environmental Protection Agency
25investigations of carbon dioxide sequestration sites. If the
26Illinois Environmental Protection Agency determines at any

 

 

09700SB1653ham001- 101 -LRB097 05721 ASK 56016 a

1time a site creates conditions that warrant the issuance of a
2seal order under Section 34 of the Environmental Protection
3Act, then the Illinois Environmental Protection Agency shall
4seal the site pursuant to the Environmental Protection Act. If
5the Illinois Environmental Protection Agency determines at any
6time a carbon dioxide sequestration site creates conditions
7that warrant the institution of a civil action for an
8injunction under Section 43 of the Environmental Protection
9Act, then the Illinois Environmental Protection Agency shall
10request the State's Attorney or the Attorney General institute
11such action. The Illinois Environmental Protection Agency
12shall provide notice of any such actions as soon as possible on
13its website.
14    (d) At least annually, the Commission shall inspect all
15carbon dioxide pipelines in Illinois that transport carbon
16dioxide to ensure the safety and feasibility of those
17pipelines. However, the Commission may, as often as deemed
18necessary, monitor and conduct investigations of those
19pipelines. The owner or operator of the pipeline must cooperate
20with the Commission investigations of the carbon dioxide
21pipelines. If the Commission determines at any time that a
22carbon dioxide pipeline creates conditions that warrant the
23issuance of a seal order under Section 34 of the Environmental
24Protection Act, then the Commission shall notify the Illinois
25Environmental Protection Agency of such conditions. In
26circumstances in which the carbon dioxide pipeline creates a

 

 

09700SB1653ham001- 102 -LRB097 05721 ASK 56016 a

1substantial danger to the environment or public health or to
2the welfare of persons when the danger is to the livelihood of
3those persons, the State's Attorney or Attorney General may,
4upon the request of the Commission or on his or her own motion,
5institute a civil action for an immediate injunction to halt
6any discharge or other activity causing or contributing to the
7danger or require any other action as may be necessary. The
8Court may issue an ex parte order and shall schedule a hearing
9on the matter no later than 3 business days after the date of
10the injunction. The Commission shall provide notice of any such
11actions as soon as possible on its website.
 
12    (20 ILCS 3855/1-78 new)
13    Sec. 1-78. Feedstock procurement.
14    (a) A feedstock procurement plan shall, every 5 years, or
15more frequently with respect to feedstock that cannot
16reasonably be procured for a 5-year period on acceptable terms,
17be prepared for the initial clean coal facility based on the
18initial clean coal facility's projection of feedstock usage and
19ratios, and consistent with the applicable requirements of this
20Act. The plan shall specifically identify the feedstock
21products to be procured following plan approval and shall
22follow all the requirements set forth in this Act and all
23applicable State and federal laws, statutes, rules, or
24regulations, as well as Commission orders. Nothing in this
25Section precludes consideration of contracts longer than 5

 

 

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1years and related forecast data. Any feedstock procurement
2occurring in accordance with this plan shall be competitively
3bid through a request for proposals process. Approval and
4implementation of the feedstock procurement plan shall be
5subject to review and approval by the Commission according to
6the provisions set forth in this Section. A feedstock
7procurement plan shall include each of the following
8components:
9        (1) Daily load analysis. This analysis shall include:
10            (A) multi-year historical analysis of hourly
11        loads; and
12            (B) known or projected changes to future loads.
13        (2) Determination of the fuel specifications required
14    for the initial clean coal facility, including:
15            (A) feedstock mix, as set by the initial clean coal
16        facility with coal having high volatile bituminous
17        rank and greater than 1.7 pounds of sulfur per million
18        btu content and comprising at least 50% of the total
19        feedstock over the term of the sourcing agreement;
20            (B) volume of each feedstock required;
21            (C) quality standards of each feedstock;
22            (D) transportation and delivery requirements and
23        associated costs and impacts on the performance,
24        availability, and reliability of the initial clean
25        coal facility;
26            (E) technical specifications of the initial clean

 

 

09700SB1653ham001- 104 -LRB097 05721 ASK 56016 a

1        coal facility for its feedstocks; and
2            (F) appropriate testing of any proposed feedstock
3        before it is incorporated into the feedstock
4        procurement plan or process to determine the effect of
5        such feedstock on the performance, availability, and
6        reliability of the initial clean coal facility.
7    (b) The feedstock procurement process shall be
8administered by a feedstock procurement administrator and
9monitored by a feedstock procurement monitor.
10        (1) The feedstock procurement administrator shall:
11            (A) design the final feedstock procurement process
12        in accordance with subsection (d) of this Section
13        following Commission approval of the feedstock
14        procurement plan;
15            (B) develop feedstock benchmarks in accordance
16        with paragraph (3) of subsection (d) of this Section to
17        be used to evaluate bids; these benchmarks shall be
18        submitted to the Commission for review and approval on
19        a confidential basis prior to the feedstock
20        procurement event;
21            (C) serve as the interface between the initial
22        clean coal facility and feedstock suppliers regarding
23        bidding and contract negotiations;
24            (D) manage the bidder pre-qualification and
25        registration process;
26            (E) obtain the initial clean coal facility's

 

 

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1        agreement to the final form of all supply contracts and
2        credit collateral agreements;
3            (F) administer the request for feedstock proposals
4        process;
5            (G) have the discretion to negotiate to determine
6        whether bidders are willing to lower the price of bids
7        that meet the benchmarks approved by the Commission;
8        any post-bid negotiations with bidders shall be
9        limited to price only and shall be completed within 24
10        hours after opening the sealed bids and shall be
11        conducted in a fair and unbiased manner; in conducting
12        the negotiations, there shall be no disclosure of any
13        information derived from proposals submitted by
14        competing bidders; if information is disclosed to any
15        bidder, it shall be provided to all competing bidders;
16            (H) maintain confidentiality of supplier and
17        bidding information in a manner consistent with all
18        applicable laws, rules, regulations, and tariffs;
19            (I) submit a confidential report to the Commission
20        recommending acceptance or rejection of bids;
21            (J) notify the facility of contract counterparties
22        and contract specifics; and
23            (K) administer related contingency feedstock
24        procurement events.
25        (2) The feedstock procurement monitor, who shall be
26    retained by the Commission, shall:

 

 

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1            (A) monitor interactions among the feedstock
2        procurement administrator, suppliers, and the initial
3        clean coal facility;
4            (B) monitor and report to the Commission on the
5        progress of the feedstock procurement process;
6            (C) provide an independent confidential report to
7        the Commission regarding the results of the feedstock
8        procurement event;
9            (D) preserve the confidentiality of supplier and
10        bidding information in a manner consistent with all
11        applicable laws, rules, regulations, and tariffs;
12            (E) provide expert advice to the Commission and
13        consult with the feedstock procurement administrator
14        regarding issues related to feedstock procurement
15        process design, rules, protocols, and policy-related
16        matters;
17            (F) consult with the feedstock procurement
18        administrator regarding the development and use of
19        benchmark criteria, standard form contracts, credit
20        policies, and bid documents; and
21            (G) assess compliance with the procurement plans
22        approved by the Commission.
23    (c) The feedstock procurement process shall be conducted as
24follows:
25        (1) Beginning in 2012, the initial clean coal facility
26    shall annually provide a range of feedstock requirement

 

 

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1    forecasts to the Agency by July 15 of each year, or such
2    other date as may be required by the Commission or Agency.
3    The feedstock requirement forecasts shall cover the 5-year
4    feedstock procurement planning period for the next
5    feedstock procurement plan, or such other longer period
6    that the Agency or the Commission may require, and shall
7    include daily data representing a high generation, low
8    generation and expected generation scenario for the
9    initial clean coal facility. The initial clean coal
10    facility shall provide supporting data and assumptions for
11    each of the scenarios.
12        (2) Beginning in 2012, the Agency shall at least every
13    5 years prepare a feedstock procurement plan by August 15th
14    of the applicable year, or such other date as may be
15    required by the Commission. The feedstock procurement plan
16    shall identify the portfolio of feedstocks to be procured.
17    Copies of the feedstock procurement plan shall be posted
18    and made publicly available on the Agency's and
19    Commission's websites, and copies shall also be provided to
20    the initial clean coal facility. The initial clean coal
21    facility shall have 30 days following the date of posting
22    to provide comment to the Agency on the feedstock
23    procurement plan. Other interested entities also may
24    comment on the feedstock procurement plan. All comments
25    submitted to the Agency shall be specific, supported by
26    data or other detailed analyses, and, if objecting to all

 

 

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1    or a portion of the feedstock procurement plan, accompanied
2    by specific alternative wording or proposals. All comments
3    shall be posted on the Agency's and Commission's websites.
4    During this 30-day comment period, the Agency shall hold at
5    least one public hearing for the purpose of receiving
6    public comment on the procurement plan. Within 14 days
7    following the end of the 30-day review period, the Agency
8    shall revise the feedstock procurement plan as necessary
9    based on the comments received, file the feedstock
10    procurement plan with the Commission, and post the
11    feedstock procurement plan on the websites.
12        (3) Within 5 days after the filing of the feedstock
13    procurement plan, any person objecting to the feedstock
14    procurement plan shall file an objection with the
15    Commission. Within 10 days after the filing, the Commission
16    shall determine whether a hearing is necessary. The
17    Commission shall enter its order confirming or modifying
18    the feedstock procurement plan within 90 days after the
19    filing of the feedstock procurement plan by the Agency.
20        (4) The Commission shall approve the feedstock
21    procurement plan, including expressly the forecast used in
22    the feedstock procurement plan, if the Commission
23    determines that it shall ensure adequate, reliable,
24    affordable, and environmentally sustainable feedstocks to
25    the clean coal facility at the lowest total cost over time,
26    taking into account any benefits of price stability and

 

 

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1    other criteria set forth in this Section.
2    (d) The feedstock procurement process shall include each of
3the following components:
4        (1) Solicitation, pre-qualification, and registration
5    of bidders. The feedstock procurement administrator shall
6    disseminate information to potential bidders to promote a
7    feedstock procurement event, notify potential bidders that
8    the feedstock procurement administrator may enter into a
9    post-bid price negotiation with bidders that meet the
10    applicable benchmarks, provide supply requirements, and
11    otherwise explain the competitive feedstock procurement
12    process. In addition to such other publication as the
13    feedstock procurement administrator determines is
14    appropriate, this information shall be posted on the
15    Agency's and the Commission's websites. The feedstock
16    procurement administrator shall also administer the
17    prequalification process, including evaluation of
18    creditworthiness, compliance with feedstock procurement
19    rules, and agreement to the standard form contract
20    developed pursuant to paragraph (2) of this subsection (d).
21    The feedstock procurement administrator shall then
22    identify and register bidders to participate in the
23    feedstock procurement event.
24        (2) Standard contract forms and credit terms and
25    instruments. The feedstock procurement administrator, in
26    consultation with the initial clean coal facility,

 

 

09700SB1653ham001- 110 -LRB097 05721 ASK 56016 a

1    electric utilities, alternative retail electric suppliers,
2    the Commission, and other interested parties and subject to
3    Commission oversight, shall develop and provide standard
4    contract forms for the supplier contracts that meet
5    generally accepted industry practices. Standard credit
6    terms and instruments that meet generally accepted
7    industry practices shall be similarly developed. The
8    feedstock procurement administrator shall make available
9    to the Commission all written comments it receives on the
10    contract forms, credit terms, or instruments. If the
11    feedstock procurement administrator cannot reach agreement
12    with the initial clean coal facility as to the contract
13    terms and conditions, then the feedstock procurement
14    administrator must notify the Commission of any disputed
15    terms and the Commission shall resolve the dispute. The
16    terms of the contracts shall not be subject to negotiation
17    by winning bidders, and the bidders must agree to the terms
18    of the contract in advance so that winning bids are
19    selected solely on the basis of price.
20        (3) Establishment of a market-based price benchmark.
21    As part of the development of the feedstock procurement
22    process, the feedstock procurement administrator, in
23    consultation with the Commission staff, Agency staff, and
24    the feedstock procurement monitor, shall establish
25    benchmarks for evaluating the final prices in the contracts
26    for each of the feedstocks that shall be procured through

 

 

09700SB1653ham001- 111 -LRB097 05721 ASK 56016 a

1    the feedstock procurement process. The benchmarks shall be
2    based on price data for similar feedstocks for the same
3    delivery period and similar delivery points, or other
4    delivery points after adjusting for that difference. The
5    price benchmarks may also be adjusted to take into account
6    differences between the information reflected in the
7    underlying data sources and the specific feedstocks and
8    gasification feedstock procurement process being used to
9    procure for the initial clean coal facility. The benchmarks
10    shall be confidential but shall be provided to the
11    Commission, and shall be subject to Commission review and
12    approval, prior to a feedstock procurement event.
13        (4) Request for proposals. The feedstock procurement
14    administrator shall design and issue a request for
15    proposals to supply coal or natural gas in accordance with
16    the initial clean coal facility's usage plan, as approved
17    by the Commission. The request for proposals shall set
18    forth a procedure for sealed, binding commitment bidding
19    with pay-as-bid settlement, and provision for selection of
20    bids on the basis of price.
21        (5) A plan for implementing contingencies in the event
22    of supplier default or failure of the feedstock procurement
23    process to fully meet the expected load requirement due to
24    insufficient supplier participation, Commission rejection
25    of results, or any other cause. The plan must be specific
26    to the initial clean coal facility's feedstock

 

 

09700SB1653ham001- 112 -LRB097 05721 ASK 56016 a

1    specifications and requirements.
2    The feedstock procurement process described in this
3subsection (d) is exempt from the requirements of the Illinois
4Procurement Code pursuant to Section 20-10 of the Illinois
5Procurement Code.
6    (e) Within 2 business days after opening the sealed bids,
7the feedstock procurement administrator shall submit a
8confidential report to the Commission. The report shall contain
9the results of the bidding for each of the feedstock types
10along with the feedstock procurement administrator's
11recommendation for the acceptance and rejection of bids based
12on the price benchmark criteria and other factors observed in
13the process. The feedstock procurement monitor also shall
14submit a confidential report to the Commission within 2
15business days after opening the sealed bids. The report shall
16contain the feedstock procurement monitor's assessment of
17bidder behavior in the process, as well as an assessment of the
18feedstock procurement administrator's compliance with the
19feedstock procurement process and rules. The Commission shall
20review the confidential reports submitted by the feedstock
21procurement administrator and feedstock procurement monitor
22and shall accept or reject the recommendations of the feedstock
23procurement administrator within 2 business days after receipt
24of the reports.
25    (f) Within 3 business days after the Commission decision
26approving the results of a feedstock procurement event, the

 

 

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1initial clean coal facility shall enter into binding
2contractual arrangements with the winning suppliers using
3standard form contracts.
4    (g) The names of the successful bidders and the amount of
5feedstock to be delivered for each contract type and for each
6contract term shall be made available to the public at the time
7of Commission approval of a feedstock procurement event. The
8Commission, the procurement monitor, the feedstock procurement
9administrator, the Agency, and all participants in the
10feedstock procurement process shall maintain the
11confidentiality of all other supplier and bidding information
12in a manner consistent with all applicable laws, rules,
13regulations, and tariffs. Confidential information, including
14the confidential reports submitted by the feedstock
15procurement administrator and feedstock procurement monitor
16pursuant to subsection (e) of this Section, shall not be made
17publicly available and shall not be discoverable by any party
18in any proceeding, absent a compelling demonstration of need,
19nor shall those reports be admissible in any proceeding other
20than one for law enforcement purposes.
21    (h) Within 2 business days after a Commission decision
22approving the results of a feedstock procurement event or such
23other date as may be required by the Commission from time to
24time, the initial clean coal facility shall file for
25informational purposes with the Commission its actual or
26estimated feedstock costs reflecting the costs associated with

 

 

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1the feedstock procurement.
2    (i) The initial clean coal facility shall pay for
3reasonable costs incurred by the Agency in administering the
4feedstock procurement events. The Agency shall determine the
5amount owed for each feedstock procurement event, and the
6initial clean coal facility shall pay that amount to the Agency
7within 30 days after being informed by the Agency of the amount
8owed. Those funds shall be deposited into the Agency Operations
9Fund, pursuant to Section 1-55 of this Act, to be used to
10reimburse expenses related to the feedstock procurement.
11    (j) The Commission has the authority to adopt rules to
12carry out the provisions of this Section. For the public
13interest, safety, and welfare, the Commission also has the
14authority to adopt rules to carry out the provisions of this
15Section on an emergency basis.
16    (k) On or before April 1 of each year, the Commission may,
17hold an informal hearing for the purpose of receiving comments
18on the prior year's feedstock procurement process and any
19recommendations for change.
20    (l) For all purposes of this Section 1-78 and subsection
21(a-1) of Section 1-75 of this Act, (i) feedstock procurement
22shall be deemed to include transportation of the feedstock
23products to the initial clean coal facility (including the
24acquisition by the initial clean coal facility, as appropriate,
25of trucks, railcars or other transportation equipment), (ii)
26feedstock procurement shall not be deemed to include day-to-day

 

 

09700SB1653ham001- 115 -LRB097 05721 ASK 56016 a

1performance and administration of feedstock procurement and
2transportation arrangements, including scheduling, weighing,
3quality determination, acceptance or rejection of shipments,
4price adjustments, documentation and related activities, all
5of which shall be performed by the owner of the initial clean
6coal facility, and (iii) feedstock supplier shall be deemed to
7include feedstock transporters and providers of feedstock
8transportation equipment.
 
9    (20 ILCS 3855/1-79 new)
10    Sec. 1-79. Limited non-impairment.
11    (a) The State of Illinois pledges that the State shall not
12enact any law or take any action to:
13        (1) break, or repeal the authority for, sourcing
14    agreements in a form approved by the Agency and entered
15    into between electric utilities and the initial clean coal
16    facility pursuant to subsection (d) of Section 1-75 of this
17    Act;
18        (2) break, or repeal the authority for, sourcing
19    agreements in a form approved by the Agency and entered
20    into between alternative retail electric suppliers and the
21    initial clean coal facility;
22        (3) deny public utilities full cost recovery for their
23    costs incurred under those sourcing agreements;
24        (4) deny the initial clean coal facility full cost
25    recovery under those sourcing agreements for costs that are

 

 

09700SB1653ham001- 116 -LRB097 05721 ASK 56016 a

1    recoverable under Section 1-76 of this Act.
2        (5) repeal or remove the requirement that electric
3    utilities shall enter into sourcing agreements with the
4    initial clean coal facility under paragraph (3) of
5    subsection (d) of Section 1-75 of this Act or subsection
6    (c) of Section 16-116 of the Public Utilities Act; or
7        (6) repeal or remove the requirement that alternative
8    retail electric suppliers shall enter into sourcing
9    agreements with the initial clean coal facility under item
10    (iv) of paragraph (5) of subsection (d) of Section 16-115
11    of the Public Utilities Act.
12    These pledges are for the benefit of the parties to those
13sourcing agreements and the issuers and holders of bonds or
14other obligations issued or incurred to finance or refinance
15the initial clean coal facility. The initial clean coal
16facility is authorized to include and refer to these pledges in
17any financing agreement into which it may enter in regard to
18those sourcing agreements.
19    (b) The State of Illinois retains and reserves all other
20rights to enact new or amendatory legislation or take any other
21action, without impairment of the right of the initial clean
22coal facility to recover prudently incurred costs resulting
23from the new or amendatory legislation or other action as
24approved by the Commission, including, but not limited to,
25legislation or other action that would: (1) directly or
26indirectly raise the costs that clean coal facilities must

 

 

09700SB1653ham001- 117 -LRB097 05721 ASK 56016 a

1incur; (2) directly or indirectly place additional
2restrictions, regulations, or requirements on the initial
3clean coal facility; (3) prohibit sequestration in general or
4prohibit a specific sequestration method or project; or (4)
5increase minimum sequestration requirements for the initial
6clean coal facility to a technically feasible extent.
 
7    Section 10. The Illinois Procurement Code is amended by
8changing Sections 1-10 and 20-10 as follows:
 
9    (30 ILCS 500/1-10)
10    Sec. 1-10. Application.
11    (a) This Code applies only to procurements for which
12contractors were first solicited on or after July 1, 1998. This
13Code shall not be construed to affect or impair any contract,
14or any provision of a contract, entered into based on a
15solicitation prior to the implementation date of this Code as
16described in Article 99, including but not limited to any
17covenant entered into with respect to any revenue bonds or
18similar instruments. All procurements for which contracts are
19solicited between the effective date of Articles 50 and 99 and
20July 1, 1998 shall be substantially in accordance with this
21Code and its intent.
22    (b) This Code shall apply regardless of the source of the
23funds with which the contracts are paid, including federal
24assistance moneys. This Code shall not apply to:

 

 

09700SB1653ham001- 118 -LRB097 05721 ASK 56016 a

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

 

 

09700SB1653ham001- 119 -LRB097 05721 ASK 56016 a

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

 

 

09700SB1653ham001- 120 -LRB097 05721 ASK 56016 a

1assist the Capital Development Board with its duties related to
2the determination of costs of an initial clean coal facility,
3as defined under Section 1-10 of the Illinois Power Agency Act,
4as required under Section 1-76 of the Illinois Power Agency
5Act, including calculating the range of capital costs or the
6sequestration costs or monitoring the construction of initial
7clean coal facility for the full duration of construction.
8    (f) This Code does not apply to the process used by the
9Illinois Power Agency to retain a mediator to mediate sourcing
10agreement disputes between electric utilities or alternative
11retail electric suppliers and the initial clean coal facility,
12as defined under Section 1-10 of the Illinois Power Agency Act,
13as required under paragraph (4) of subsection (d) of Section
141-75 of the Illinois Power Agency Act. This Code does not apply
15to the process used by the Illinois Commerce Commission to
16retain an expert to assist the Commission with its duties
17related to the determination of the costs of an initial clean
18coal facility, as defined under Section 1-10 of the Illinois
19Power Agency Act, as required under Section 1-76 of the
20Illinois Power Agency Act, including determining the initial
21clean coal facility's operations and maintenance costs, or
22compliance with capture and sequestration requirements.
23(Source: P.A. 95-481, eff. 8-28-07; 95-615, eff. 9-11-07;
2495-876, eff. 8-21-08; 96-840, eff. 12-23-09; 96-1331, eff.
257-27-10.)
 

 

 

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1    (30 ILCS 500/20-10)
2    (Text of Section from P.A. 96-159 and 96-588)
3    Sec. 20-10. Competitive sealed bidding; reverse auction.
4    (a) Conditions for use. All contracts shall be awarded by
5competitive sealed bidding except as otherwise provided in
6Section 20-5.
7    (b) Invitation for bids. An invitation for bids shall be
8issued and shall include a purchase description and the
9material contractual terms and conditions applicable to the
10procurement.
11    (c) Public notice. Public notice of the invitation for bids
12shall be published in the Illinois Procurement Bulletin at
13least 14 days before the date set in the invitation for the
14opening of bids.
15    (d) Bid opening. Bids shall be opened publicly in the
16presence of one or more witnesses at the time and place
17designated in the invitation for bids. The name of each bidder,
18the amount of each bid, and other relevant information as may
19be specified by rule shall be recorded. After the award of the
20contract, the winning bid and the record of each unsuccessful
21bid shall be open to public inspection.
22    (e) Bid acceptance and bid evaluation. Bids shall be
23unconditionally accepted without alteration or correction,
24except as authorized in this Code. Bids shall be evaluated
25based on the requirements set forth in the invitation for bids,
26which may include criteria to determine acceptability such as

 

 

09700SB1653ham001- 122 -LRB097 05721 ASK 56016 a

1inspection, testing, quality, workmanship, delivery, and
2suitability for a particular purpose. Those criteria that will
3affect the bid price and be considered in evaluation for award,
4such as discounts, transportation costs, and total or life
5cycle costs, shall be objectively measurable. The invitation
6for bids shall set forth the evaluation criteria to be used.
7    (f) Correction or withdrawal of bids. Correction or
8withdrawal of inadvertently erroneous bids before or after
9award, or cancellation of awards of contracts based on bid
10mistakes, shall be permitted in accordance with rules. After
11bid opening, no changes in bid prices or other provisions of
12bids prejudicial to the interest of the State or fair
13competition shall be permitted. All decisions to permit the
14correction or withdrawal of bids based on bid mistakes shall be
15supported by written determination made by a State purchasing
16officer.
17    (g) Award. The contract shall be awarded with reasonable
18promptness by written notice to the lowest responsible and
19responsive bidder whose bid meets the requirements and criteria
20set forth in the invitation for bids, except when a State
21purchasing officer determines it is not in the best interest of
22the State and by written explanation determines another bidder
23shall receive the award. The explanation shall appear in the
24appropriate volume of the Illinois Procurement Bulletin.
25    (h) Multi-step sealed bidding. When it is considered
26impracticable to initially prepare a purchase description to

 

 

09700SB1653ham001- 123 -LRB097 05721 ASK 56016 a

1support an award based on price, an invitation for bids may be
2issued requesting the submission of unpriced offers to be
3followed by an invitation for bids limited to those bidders
4whose offers have been qualified under the criteria set forth
5in the first solicitation.
6    (i) Alternative procedures. Notwithstanding any other
7provision of this Act to the contrary, the Director of the
8Illinois Power Agency may create alternative bidding
9procedures to be used in procuring professional services under
10subsection (a) of Section 1-75 and subsection (d) of Section
111-78 1-75(a) of the Illinois Power Agency Act and Section
1216-111.5(c) of the Public Utilities Act and to procure
13renewable energy resources under Section 1-56 of the Illinois
14Power Agency Act. These alternative procedures shall be set
15forth together with the other criteria contained in the
16invitation for bids, and shall appear in the appropriate volume
17of the Illinois Procurement Bulletin.
18    (j) Reverse auction. Notwithstanding any other provision
19of this Section and in accordance with rules adopted by the
20Director of Central Management Services as chief procurement
21officer, a State purchasing officer under that chief
22procurement officer's jurisdiction may procure supplies or
23services through a competitive electronic auction bidding
24process after the purchasing officer explains in writing to the
25chief procurement officer his or her determination that the use
26of such a process will be in the best interest of the State.

 

 

09700SB1653ham001- 124 -LRB097 05721 ASK 56016 a

1The chief procurement officer shall publish that determination
2in his or her next volume of the Illinois Procurement Bulletin.
3    An invitation for bids shall be issued and shall include
4(i) a procurement description, (ii) all contractual terms,
5whenever practical, and (iii) conditions applicable to the
6procurement, including a notice that bids will be received in
7an electronic auction manner.
8    Public notice of the invitation for bids shall be given in
9the same manner as provided in subsection (c).
10    Bids shall be accepted electronically at the time and in
11the manner designated in the invitation for bids. During the
12auction, a bidder's price shall be disclosed to other bidders.
13Bidders shall have the opportunity to reduce their bid prices
14during the auction. At the conclusion of the auction, the
15record of the bid prices received and the name of each bidder
16shall be open to public inspection.
17    After the auction period has terminated, withdrawal of bids
18shall be permitted as provided in subsection (f).
19    The contract shall be awarded within 60 days after the
20auction by written notice to the lowest responsible bidder, or
21all bids shall be rejected except as otherwise provided in this
22Code. Extensions of the date for the award may be made by
23mutual written consent of the State purchasing officer and the
24lowest responsible bidder.
25    This subsection does not apply to (i) procurements of
26professional and artistic services, including but not limited

 

 

09700SB1653ham001- 125 -LRB097 05721 ASK 56016 a

1to telecommunications services, communications services,
2Internet services, and information services, and (ii)
3contracts for construction projects.
4(Source: P.A. 95-481, eff. 8-28-07; 96-159, eff. 8-10-09;
596-588, eff. 8-18-09; revised 10-5-10.)
 
6    (Text of Section from P.A. 96-159 and 96-795)
7    Sec. 20-10. Competitive sealed bidding; reverse auction.
8    (a) Conditions for use. All contracts shall be awarded by
9competitive sealed bidding except as otherwise provided in
10Section 20-5.
11    (b) Invitation for bids. An invitation for bids shall be
12issued and shall include a purchase description and the
13material contractual terms and conditions applicable to the
14procurement.
15    (c) Public notice. Public notice of the invitation for bids
16shall be published in the Illinois Procurement Bulletin at
17least 14 days before the date set in the invitation for the
18opening of bids.
19    (d) Bid opening. Bids shall be opened publicly in the
20presence of one or more witnesses at the time and place
21designated in the invitation for bids. The name of each bidder,
22the amount of each bid, and other relevant information as may
23be specified by rule shall be recorded. After the award of the
24contract, the winning bid and the record of each unsuccessful
25bid shall be open to public inspection.

 

 

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1    (e) Bid acceptance and bid evaluation. Bids shall be
2unconditionally accepted without alteration or correction,
3except as authorized in this Code. Bids shall be evaluated
4based on the requirements set forth in the invitation for bids,
5which may include criteria to determine acceptability such as
6inspection, testing, quality, workmanship, delivery, and
7suitability for a particular purpose. Those criteria that will
8affect the bid price and be considered in evaluation for award,
9such as discounts, transportation costs, and total or life
10cycle costs, shall be objectively measurable. The invitation
11for bids shall set forth the evaluation criteria to be used.
12    (f) Correction or withdrawal of bids. Correction or
13withdrawal of inadvertently erroneous bids before or after
14award, or cancellation of awards of contracts based on bid
15mistakes, shall be permitted in accordance with rules. After
16bid opening, no changes in bid prices or other provisions of
17bids prejudicial to the interest of the State or fair
18competition shall be permitted. All decisions to permit the
19correction or withdrawal of bids based on bid mistakes shall be
20supported by written determination made by a State purchasing
21officer.
22    (g) Award. The contract shall be awarded with reasonable
23promptness by written notice to the lowest responsible and
24responsive bidder whose bid meets the requirements and criteria
25set forth in the invitation for bids, except when a State
26purchasing officer determines it is not in the best interest of

 

 

09700SB1653ham001- 127 -LRB097 05721 ASK 56016 a

1the State and by written explanation determines another bidder
2shall receive the award. The explanation shall appear in the
3appropriate volume of the Illinois Procurement Bulletin. The
4written explanation must include:
5        (1) a description of the agency's needs;
6        (2) a determination that the anticipated cost will be
7    fair and reasonable;
8        (3) a listing of all responsible and responsive
9    bidders; and
10        (4) the name of the bidder selected, pricing, and the
11    reasons for selecting that bidder.
12    Each chief procurement officer may adopt guidelines to
13implement the requirements of this subsection (g).
14    The written explanation shall be filed with the Legislative
15Audit Commission and the Procurement Policy Board and be made
16available for inspection by the public within 30 days after the
17agency's decision to award the contract.
18    (h) Multi-step sealed bidding. When it is considered
19impracticable to initially prepare a purchase description to
20support an award based on price, an invitation for bids may be
21issued requesting the submission of unpriced offers to be
22followed by an invitation for bids limited to those bidders
23whose offers have been qualified under the criteria set forth
24in the first solicitation.
25    (i) Alternative procedures. Notwithstanding any other
26provision of this Act to the contrary, the Director of the

 

 

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1Illinois Power Agency may create alternative bidding
2procedures to be used in procuring professional services under
3subsection (a) of Section 1-75 and subsection (d) of Section
41-78 1-75(a) of the Illinois Power Agency Act and Section
516-111.5(c) of the Public Utilities Act and to procure
6renewable energy resources under Section 1-56 of the Illinois
7Power Agency Act. These alternative procedures shall be set
8forth together with the other criteria contained in the
9invitation for bids, and shall appear in the appropriate volume
10of the Illinois Procurement Bulletin.
11    (j) Reverse auction. Notwithstanding any other provision
12of this Section and in accordance with rules adopted by the
13chief procurement officer, that chief procurement officer may
14procure supplies or services through a competitive electronic
15auction bidding process after the chief procurement officer
16determines that the use of such a process will be in the best
17interest of the State. The chief procurement officer shall
18publish that determination in his or her next volume of the
19Illinois Procurement Bulletin.
20    An invitation for bids shall be issued and shall include
21(i) a procurement description, (ii) all contractual terms,
22whenever practical, and (iii) conditions applicable to the
23procurement, including a notice that bids will be received in
24an electronic auction manner.
25    Public notice of the invitation for bids shall be given in
26the same manner as provided in subsection (c).

 

 

09700SB1653ham001- 129 -LRB097 05721 ASK 56016 a

1    Bids shall be accepted electronically at the time and in
2the manner designated in the invitation for bids. During the
3auction, a bidder's price shall be disclosed to other bidders.
4Bidders shall have the opportunity to reduce their bid prices
5during the auction. At the conclusion of the auction, the
6record of the bid prices received and the name of each bidder
7shall be open to public inspection.
8    After the auction period has terminated, withdrawal of bids
9shall be permitted as provided in subsection (f).
10    The contract shall be awarded within 60 days after the
11auction by written notice to the lowest responsible bidder, or
12all bids shall be rejected except as otherwise provided in this
13Code. Extensions of the date for the award may be made by
14mutual written consent of the State purchasing officer and the
15lowest responsible bidder.
16    This subsection does not apply to (i) procurements of
17professional and artistic services, (ii) telecommunications
18services, communication services, and information services,
19and (iii) contracts for construction projects.
20(Source: P.A. 95-481, eff. 8-28-07; 96-159, eff. 8-10-09;
2196-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the
22effective date of changes made by P.A. 96-795); revised
2310-5-10.)
 
24    Section 15. The Public Utilities Act is amended by changing
25Sections 16-107.5, 16-108, 16-111.5, 16-115, 16-115D, and

 

 

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116-116 as follows:
 
2    (220 ILCS 5/16-107.5)
3    Sec. 16-107.5. Net electricity metering.
4    (a) The Legislature finds and declares that a program to
5provide net electricity metering, as defined in this Section,
6for eligible customers can encourage private investment in
7renewable energy resources, stimulate economic growth, enhance
8the continued diversification of Illinois' energy resource
9mix, and protect the Illinois environment.
10    (b) As used in this Section, (i) "eligible customer" means
11a retail customer that owns or operates a solar, wind, or other
12eligible renewable electrical generating facility with a rated
13capacity of not more than 2,000 kilowatts that is located on
14the customer's premises or is interconnected to the
15distribution grid of the customer's electricity provider or
16alternative retail electric supplier and is intended primarily
17to offset the customer's own electrical requirements; (ii)
18"electricity provider" means an electric utility or
19alternative retail electric supplier; (iii) "eligible
20renewable electrical generating facility" means a generator
21powered by solar electric energy, wind, dedicated crops grown
22for electricity generation, agricultural residues, untreated
23and unadulterated wood waste, landscape trimmings, livestock
24manure, anaerobic digestion of livestock or food processing
25waste, fuel cells or microturbines powered by renewable fuels,

 

 

09700SB1653ham001- 131 -LRB097 05721 ASK 56016 a

1or hydroelectric energy; and (iv) "net electricity metering"
2(or "net metering") means the measurement, during the billing
3period applicable to an eligible customer, of the net amount of
4electricity supplied by an electricity provider to the
5customer's premises or provided to the electricity provider by
6the customer.
7    (c) A net metering facility shall be equipped with metering
8equipment that can measure the flow of electricity in both
9directions at the same rate. For eligible residential
10customers, this shall typically be accomplished through use of
11a single, bi-directional meter. If the eligible customer's
12existing electric revenue meter does not meet this requirement,
13the electricity provider shall arrange for the local electric
14utility or a meter service provider to install and maintain a
15new revenue meter at the electricity provider's expense. For
16non-residential customers, the electricity provider may
17arrange for the local electric utility or a meter service
18provider to install and maintain metering equipment capable of
19measuring the flow of electricity both into and out of the
20customer's facility at the same rate and ratio, typically
21through the use of a dual channel meter. For generators with a
22nameplate rating of 40 kilowatts and below, the costs of
23installing such equipment shall be paid for by the electricity
24provider. For generators with a nameplate rating over 40
25kilowatts and up to 2,000 kilowatts capacity, the costs of
26installing such equipment shall be paid for by the customer.

 

 

09700SB1653ham001- 132 -LRB097 05721 ASK 56016 a

1Any subsequent revenue meter change necessitated by any
2eligible customer shall be paid for by the customer.
3    (d) An electricity provider shall measure and charge or
4credit for the net electricity supplied to eligible customers
5or provided by eligible customers in the following manner:
6        (1) If the amount of electricity used by the customer
7    during the billing period exceeds the amount of electricity
8    produced by the customer, the electricity provider shall
9    charge the customer for the net electricity supplied to and
10    used by the customer as provided in subsection (e) of this
11    Section.
12        (2) If the amount of electricity produced by a customer
13    during the billing period exceeds the amount of electricity
14    used by the customer during that billing period, the
15    electricity provider supplying that customer shall apply a
16    1:1 kilowatt-hour credit to a subsequent bill for service
17    to the customer for the net electricity supplied to the
18    electricity provider. The electricity provider shall
19    continue to carry over any excess kilowatt-hour credits
20    earned and apply those credits to subsequent billing
21    periods to offset any customer-generator consumption in
22    those billing periods until all credits are used or until
23    service is terminated or until the end of the annualized
24    period.
25        (3) In At the end of the year or annualized over the
26    period that service is supplied by means of net metering,

 

 

09700SB1653ham001- 133 -LRB097 05721 ASK 56016 a

1    or in the event that the retail customer terminates service
2    with the electricity provider prior to the end of the year
3    or the annualized period, any remaining credits in the
4    customer's account shall expire.
5    (e) An electricity provider shall provide to net metering
6customers electric service at non-discriminatory rates that
7are identical, with respect to rate structure, retail rate
8components, and any monthly charges, to the rates that the
9customer would be charged if not a net metering customer. An
10electricity provider shall not charge net metering customers
11any fee or charge or require additional equipment, insurance,
12or any other requirements not specifically authorized by
13interconnection standards authorized by the Commission, unless
14the fee, charge, or other requirement would apply to other
15similarly situated customers who are not net metering
16customers. The customer will remain responsible for all taxes,
17fees, and utility delivery charges that would otherwise be
18applicable to the net amount of electricity used by the
19customer. Subsections (c) through (e) of this Section shall not
20be construed to prevent an arms-length agreement between an
21electricity provider and an eligible customer that sets forth
22different prices, terms, and conditions for the provision of
23net metering service, including, but not limited to, the
24provision of the appropriate metering equipment for
25non-residential customers.
26    (f) Notwithstanding the requirements of subsections (c)

 

 

09700SB1653ham001- 134 -LRB097 05721 ASK 56016 a

1through (e) of this Section, an electricity provider must
2require dual-channel metering for non-residential customers
3operating eligible renewable electrical generating facilities
4with a nameplate rating over 40 kilowatts and up to 2,000
5kilowatts. In such cases, electricity charges and credits shall
6be determined as follows:
7        (1) The electricity provider shall assess and the
8    customer remains responsible for all taxes, fees, and
9    utility delivery charges that would otherwise be
10    applicable to the gross amount of kilowatt-hours supplied
11    to the eligible customer by the electricity provider.
12        (2) Each month that service is supplied by means of
13    dual-channel metering, the electricity provider shall
14    compensate the eligible customer for any excess
15    kilowatt-hour credits at the electricity provider's
16    avoided cost of electricity supply over the monthly period
17    or as otherwise specified by the terms of a power-purchase
18    agreement negotiated between the customer and electricity
19    provider.
20        (3) For all eligible net metering customers taking
21    service from an electricity provider under contracts or
22    tariffs employing time of use rates, any monthly
23    consumption of electricity shall be calculated according
24    to the terms of the contract or tariff to which the same
25    customer would be assigned to or be eligible for if the
26    customer was not a net metering customer. When those same

 

 

09700SB1653ham001- 135 -LRB097 05721 ASK 56016 a

1    customer-generators are net generators during any discrete
2    time of use period, the net kilowatt-hours produced shall
3    be valued at the same price per kilowatt-hour as the
4    electric service provider would charge for retail
5    kilowatt-hour sales during that same time of use period.
6    (g) For purposes of federal and State laws providing
7renewable energy credits or greenhouse gas credits, the
8eligible customer shall be treated as owning and having title
9to the renewable energy attributes, renewable energy credits,
10and greenhouse gas emission credits related to any electricity
11produced by the qualified generating unit. The electricity
12provider may not condition participation in a net metering
13program on the signing over of a customer's renewable energy
14credits; provided, however, this subsection (g) shall not be
15construed to prevent an arms-length agreement between an
16electricity provider and an eligible customer that sets forth
17the ownership or title of the credits.
18    (h) Within 120 days after the effective date of this
19amendatory Act of the 95th General Assembly, the Commission
20shall establish standards for net metering and, if the
21Commission has not already acted on its own initiative,
22standards for the interconnection of eligible renewable
23generating equipment to the utility system. The
24interconnection standards shall address any procedural
25barriers, delays, and administrative costs associated with the
26interconnection of customer-generation while ensuring the

 

 

09700SB1653ham001- 136 -LRB097 05721 ASK 56016 a

1safety and reliability of the units and the electric utility
2system. The Commission shall consider the Institute of
3Electrical and Electronics Engineers (IEEE) Standard 1547 and
4the issues of (i) reasonable and fair fees and costs, (ii)
5clear timelines for major milestones in the interconnection
6process, (iii) nondiscriminatory terms of agreement, and (iv)
7any best practices for interconnection of distributed
8generation.
9    (i) All electricity providers shall begin to offer net
10metering no later than April 1, 2008.
11    (j) An electricity provider shall provide net metering to
12eligible customers until the load of its net metering customers
13equals 5% 1% of the total peak demand supplied by that
14electricity provider during the previous year. Electricity
15providers are authorized to offer net metering beyond the 5% 1%
16level if they so choose. The number of new eligible customers
17with generators that have a nameplate rating of 40 kilowatts
18and below will be limited to 200 total new billing accounts for
19the utilities (Ameren Companies, ComEd, and MidAmerican) for
20the period of April 1, 2008 through March 31, 2009.
21    (k) Each electricity provider shall maintain records and
22report annually to the Commission the total number of net
23metering customers served by the provider, as well as the type,
24capacity, and energy sources of the generating systems used by
25the net metering customers. Nothing in this Section shall limit
26the ability of an electricity provider to request the redaction

 

 

09700SB1653ham001- 137 -LRB097 05721 ASK 56016 a

1of information deemed by the Commission to be confidential
2business information. Each electricity provider shall notify
3the Commission when the total generating capacity of its net
4metering customers is equal to or in excess of the 1% cap
5specified in subsection (j) of this Section.
6    (l) Notwithstanding the definition of "eligible customer"
7in item (i) of subsection (b) of this Section, each electricity
8provider shall consider whether to allow meter aggregation for
9the purposes of net metering on:
10        (1) properties owned or leased by multiple customers
11    that contribute to the operation of an eligible renewable
12    electrical generating facility, such as a community-owned
13    wind project, a community-owned biomass project, a
14    community-owned solar project, or a community methane
15    digester processing livestock waste from multiple sources;
16    and
17        (2) individual units, apartments, or properties owned
18    or leased by multiple customers and collectively served by
19    a common eligible renewable electrical generating
20    facility, such as an apartment building served by
21    photovoltaic panels on the roof; and .
22        (3) multiple meters that are located on an eligible
23    customer's contiguous property and are used to measure only
24    electricity used for the eligible customer's requirements.
25    For the purposes of this subsection (l), "meter
26aggregation" means the combination of reading and billing on a

 

 

09700SB1653ham001- 138 -LRB097 05721 ASK 56016 a

1pro rata basis for the types of eligible customers described in
2this Section such as to allocate benefits of participation onto
3the customers' monthly electric bills. Meter aggregation shall
4be allowed whether the eligible renewable energy generating
5device is located on the premises of the eligible customer or
6is interconnected to the distribution grid of the eligible
7customer's electricity provider or alternative retail electric
8supplier. Such meter aggregation shall be subject to the terms
9and conditions approved by the Commission in a proceeding
10establishing the rules applicable to meter aggregation under
11this subsection (l), which shall commence no less than 180 days
12after the effective date of this amendatory Act of the 97th
13General Assembly and be completed within 365 days after the
14effective date of this amendatory Act of the 97th General
15Assembly.
16    (m) Nothing in this Section shall affect the right of an
17electricity provider to continue to provide, or the right of a
18retail customer to continue to receive service pursuant to a
19contract for electric service between the electricity provider
20and the retail customer in accordance with the prices, terms,
21and conditions provided for in that contract. Either the
22electricity provider or the customer may require compliance
23with the prices, terms, and conditions of the contract.
24(Source: P.A. 95-420, eff. 8-24-07.)
 
25    (220 ILCS 5/16-108)

 

 

09700SB1653ham001- 139 -LRB097 05721 ASK 56016 a

1    Sec. 16-108. Recovery of costs associated with the
2provision of delivery services.
3    (a) An electric utility shall file a delivery services
4tariff with the Commission at least 210 days prior to the date
5that it is required to begin offering such services pursuant to
6this Act. An electric utility shall provide the components of
7delivery services that are subject to the jurisdiction of the
8Federal Energy Regulatory Commission at the same prices, terms
9and conditions set forth in its applicable tariff as approved
10or allowed into effect by that Commission. The Commission shall
11otherwise have the authority pursuant to Article IX to review,
12approve, and modify the prices, terms and conditions of those
13components of delivery services not subject to the jurisdiction
14of the Federal Energy Regulatory Commission, including the
15authority to determine the extent to which such delivery
16services should be offered on an unbundled basis. In making any
17such determination the Commission shall consider, at a minimum,
18the effect of additional unbundling on (i) the objective of
19just and reasonable rates, (ii) electric utility employees, and
20(iii) the development of competitive markets for electric
21energy services in Illinois.
22    (b) The Commission shall enter an order approving, or
23approving as modified, the delivery services tariff no later
24than 30 days prior to the date on which the electric utility
25must commence offering such services. The Commission may
26subsequently modify such tariff pursuant to this Act.

 

 

09700SB1653ham001- 140 -LRB097 05721 ASK 56016 a

1    (c) The electric utility's tariffs shall define the classes
2of its customers for purposes of delivery services charges.
3Delivery services shall be priced and made available to all
4retail customers electing delivery services in each such class
5on a nondiscriminatory basis regardless of whether the retail
6customer chooses the electric utility, an affiliate of the
7electric utility, or another entity as its supplier of electric
8power and energy. Charges for delivery services shall be cost
9based, and shall allow the electric utility to recover the
10costs of providing delivery services through its charges to its
11delivery service customers that use the facilities and services
12associated with such costs. Such costs shall include the costs
13of owning, operating and maintaining transmission and
14distribution facilities. The Commission shall also be
15authorized to consider whether, and if so to what extent, the
16following costs are appropriately included in the electric
17utility's delivery services rates: (i) the costs of that
18portion of generation facilities used for the production and
19absorption of reactive power in order that retail customers
20located in the electric utility's service area can receive
21electric power and energy from suppliers other than the
22electric utility, and (ii) the costs associated with the use
23and redispatch of generation facilities to mitigate
24constraints on the transmission or distribution system in order
25that retail customers located in the electric utility's service
26area can receive electric power and energy from suppliers other

 

 

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1than the electric utility. Nothing in this subsection shall be
2construed as directing the Commission to allocate any of the
3costs described in (i) or (ii) that are found to be
4appropriately included in the electric utility's delivery
5services rates to any particular customer group or geographic
6area in setting delivery services rates.
7    (d) The Commission shall establish charges, terms and
8conditions for delivery services that are just and reasonable
9and shall take into account customer impacts when establishing
10such charges. In establishing charges, terms and conditions for
11delivery services, the Commission shall take into account
12voltage level differences. A retail customer shall have the
13option to request to purchase electric service at any delivery
14service voltage reasonably and technically feasible from the
15electric facilities serving that customer's premises provided
16that there are no significant adverse impacts upon system
17reliability or system efficiency. A retail customer shall also
18have the option to request to purchase electric service at any
19point of delivery that is reasonably and technically feasible
20provided that there are no significant adverse impacts on
21system reliability or efficiency. Such requests shall not be
22unreasonably denied.
23    (e) Electric utilities shall recover the costs of
24installing, operating or maintaining facilities for the
25particular benefit of one or more delivery services customers,
26including without limitation any costs incurred in complying

 

 

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1with a customer's request to be served at a different voltage
2level, directly from the retail customer or customers for whose
3benefit the costs were incurred, to the extent such costs are
4not recovered through the charges referred to in subsections
5(c) and (d) of this Section.
6    (f) An electric utility shall be entitled but not required
7to implement transition charges in conjunction with the
8offering of delivery services pursuant to Section 16-104. If an
9electric utility implements transition charges, it shall
10implement such charges for all delivery services customers and
11for all customers described in subsection (h), but shall not
12implement transition charges for power and energy that a retail
13customer takes from cogeneration or self-generation facilities
14located on that retail customer's premises, if such facilities
15meet the following criteria:
16        (i) the cogeneration or self-generation facilities
17    serve a single retail customer and are located on that
18    retail customer's premises (for purposes of this
19    subparagraph and subparagraph (ii), an industrial or
20    manufacturing retail customer and a third party contractor
21    that is served by such industrial or manufacturing customer
22    through such retail customer's own electrical distribution
23    facilities under the circumstances described in subsection
24    (vi) of the definition of "alternative retail electric
25    supplier" set forth in Section 16-102, shall be considered
26    a single retail customer);

 

 

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1        (ii) the cogeneration or self-generation facilities
2    either (A) are sized pursuant to generally accepted
3    engineering standards for the retail customer's electrical
4    load at that premises (taking into account standby or other
5    reliability considerations related to that retail
6    customer's operations at that site) or (B) if the facility
7    is a cogeneration facility located on the retail customer's
8    premises, the retail customer is the thermal host for that
9    facility and the facility has been designed to meet that
10    retail customer's thermal energy requirements resulting in
11    electrical output beyond that retail customer's electrical
12    demand at that premises, comply with the operating and
13    efficiency standards applicable to "qualifying facilities"
14    specified in title 18 Code of Federal Regulations Section
15    292.205 as in effect on the effective date of this
16    amendatory Act of 1999;
17        (iii) the retail customer on whose premises the
18    facilities are located either has an exclusive right to
19    receive, and corresponding obligation to pay for, all of
20    the electrical capacity of the facility, or in the case of
21    a cogeneration facility that has been designed to meet the
22    retail customer's thermal energy requirements at that
23    premises, an identified amount of the electrical capacity
24    of the facility, over a minimum 5-year period; and
25        (iv) if the cogeneration facility is sized for the
26    retail customer's thermal load at that premises but exceeds

 

 

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1    the electrical load, any sales of excess power or energy
2    are made only at wholesale, are subject to the jurisdiction
3    of the Federal Energy Regulatory Commission, and are not
4    for the purpose of circumventing the provisions of this
5    subsection (f).
6If a generation facility located at a retail customer's
7premises does not meet the above criteria, an electric utility
8implementing transition charges shall implement a transition
9charge until December 31, 2006 for any power and energy taken
10by such retail customer from such facility as if such power and
11energy had been delivered by the electric utility. Provided,
12however, that an industrial retail customer that is taking
13power from a generation facility that does not meet the above
14criteria but that is located on such customer's premises will
15not be subject to a transition charge for the power and energy
16taken by such retail customer from such generation facility if
17the facility does not serve any other retail customer and
18either was installed on behalf of the customer and for its own
19use prior to January 1, 1997, or is both predominantly fueled
20by byproducts of such customer's manufacturing process at such
21premises and sells or offers an average of 300 megawatts or
22more of electricity produced from such generation facility into
23the wholesale market. Such charges shall be calculated as
24provided in Section 16-102, and shall be collected on each
25kilowatt-hour delivered under a delivery services tariff to a
26retail customer from the date the customer first takes delivery

 

 

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1services until December 31, 2006 except as provided in
2subsection (h) of this Section. Provided, however, that an
3electric utility, other than an electric utility providing
4service to at least 1,000,000 customers in this State on
5January 1, 1999, shall be entitled to petition for entry of an
6order by the Commission authorizing the electric utility to
7implement transition charges for an additional period ending no
8later than December 31, 2008. The electric utility shall file
9its petition with supporting evidence no earlier than 16
10months, and no later than 12 months, prior to December 31,
112006. The Commission shall hold a hearing on the electric
12utility's petition and shall enter its order no later than 8
13months after the petition is filed. The Commission shall
14determine whether and to what extent the electric utility shall
15be authorized to implement transition charges for an additional
16period. The Commission may authorize the electric utility to
17implement transition charges for some or all of the additional
18period, and shall determine the mitigation factors to be used
19in implementing such transition charges; provided, that the
20Commission shall not authorize mitigation factors less than
21110% of those in effect during the 12 months ended December 31,
222006. In making its determination, the Commission shall
23consider the following factors: the necessity to implement
24transition charges for an additional period in order to
25maintain the financial integrity of the electric utility; the
26prudence of the electric utility's actions in reducing its

 

 

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1costs since the effective date of this amendatory Act of 1997;
2the ability of the electric utility to provide safe, adequate
3and reliable service to retail customers in its service area;
4and the impact on competition of allowing the electric utility
5to implement transition charges for the additional period.
6    (g) The electric utility shall file tariffs that establish
7the transition charges to be paid by each class of customers to
8the electric utility in conjunction with the provision of
9delivery services. The electric utility's tariffs shall define
10the classes of its customers for purposes of calculating
11transition charges. The electric utility's tariffs shall
12provide for the calculation of transition charges on a
13customer-specific basis for any retail customer whose average
14monthly maximum electrical demand on the electric utility's
15system during the 6 months with the customer's highest monthly
16maximum electrical demands equals or exceeds 3.0 megawatts for
17electric utilities having more than 1,000,000 customers, and
18for other electric utilities for any customer that has an
19average monthly maximum electrical demand on the electric
20utility's system of one megawatt or more, and (A) for which
21there exists data on the customer's usage during the 3 years
22preceding the date that the customer became eligible to take
23delivery services, or (B) for which there does not exist data
24on the customer's usage during the 3 years preceding the date
25that the customer became eligible to take delivery services, if
26in the electric utility's reasonable judgment there exists

 

 

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1comparable usage information or a sufficient basis to develop
2such information, and further provided that the electric
3utility can require customers for which an individual
4calculation is made to sign contracts that set forth the
5transition charges to be paid by the customer to the electric
6utility pursuant to the tariff.
7    (h) An electric utility shall also be entitled to file
8tariffs that allow it to collect transition charges from retail
9customers in the electric utility's service area that do not
10take delivery services but that take electric power or energy
11from an alternative retail electric supplier or from an
12electric utility other than the electric utility in whose
13service area the customer is located. Such charges shall be
14calculated, in accordance with the definition of transition
15charges in Section 16-102, for the period of time that the
16customer would be obligated to pay transition charges if it
17were taking delivery services, except that no deduction for
18delivery services revenues shall be made in such calculation,
19and usage data from the customer's class shall be used where
20historical usage data is not available for the individual
21customer. The customer shall be obligated to pay such charges
22on a lump sum basis on or before the date on which the customer
23commences to take service from the alternative retail electric
24supplier or other electric utility, provided, that the electric
25utility in whose service area the customer is located shall
26offer the customer the option of signing a contract pursuant to

 

 

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1which the customer pays such charges ratably over the period in
2which the charges would otherwise have applied.
3    (i) An electric utility shall be entitled to add to the
4bills of delivery services customers charges pursuant to
5Sections 9-221, 9-222 (except as provided in Section 9-222.1),
6and Section 16-114 of this Act, Section 5-5 of the Electricity
7Infrastructure Maintenance Fee Law, Section 6-5 of the
8Renewable Energy, Energy Efficiency, and Coal Resources
9Development Law of 1997, and Section 13 of the Energy
10Assistance Act.
11    (j) If a retail customer that obtains electric power and
12energy from cogeneration or self-generation facilities
13installed for its own use on or before January 1, 1997,
14subsequently takes service from an alternative retail electric
15supplier or an electric utility other than the electric utility
16in whose service area the customer is located for any portion
17of the customer's electric power and energy requirements
18formerly obtained from those facilities (including that amount
19purchased from the utility in lieu of such generation and not
20as standby power purchases, under a cogeneration displacement
21tariff in effect as of the effective date of this amendatory
22Act of 1997), the transition charges otherwise applicable
23pursuant to subsections (f), (g), or (h) of this Section shall
24not be applicable in any year to that portion of the customer's
25electric power and energy requirements formerly obtained from
26those facilities, provided, that for purposes of this

 

 

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1subsection (j), such portion shall not exceed the average
2number of kilowatt-hours per year obtained from the
3cogeneration or self-generation facilities during the 3 years
4prior to the date on which the customer became eligible for
5delivery services, except as provided in subsection (f) of
6Section 16-110.
7    (k) Beginning June 1, 2012, the electric utility shall be
8entitled to recover through its tariffed charges for delivery
9services (1) the costs of any renewable energy credits
10purchased to meet the renewable energy resource standards of
11subsection (c) of Section 1-75 of the Illinois Power Agency
12Act, pursuant to the electric utility's procurement plan as
13approved in accordance with Section 16-111.5 of this Act, and
14(2) any excluded renewable energy resources contract costs as
15defined in Section 1-10 of the Illinois Power Agency Act. The
16Commission shall determine a just and reasonable allocation of
17such costs to the various classes of customers taking delivery
18services from the electric utility, taking into account the
19provisions of paragraphs (2) and (6) of subsection (c) of
20Section 1-75 of the Illinois Power Agency Act and, with respect
21to excluded renewable energy resources contract costs, the
22extent to which the electric utility's eligible retail
23customers have become delivery services non-eligible retail
24customers subsequent to the year that the contracts giving rise
25to the excluded renewable energy resources costs were entered
26into. Provided, that in no event shall the Commission allocate

 

 

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1the costs of renewable energy credits and excluded renewable
2energy resources contract costs in a manner that causes the
3rate limitations specified in paragraph (2) of subsection (c)
4of Section 1-75 of the Illinois Power Agency Act to be exceeded
5for any class of customers.
6    For purposes of recovery through the electric utility's
7tariffed charges for delivery services, the cost of the
8renewable energy credits included in purchases of bundled
9renewable energy resources, as defined in Section 1-10 of the
10Illinois Power Agency Act, to meet the renewable energy
11resource standards applicable to the load of the electric
12utility's eligible retail customers, as defined in subsection
13(a) of Section 16-111.5 of this Act, shall be the allocated
14renewable energy credit prices approved by the Commission in
15accordance with subsection (f) of Section 16-111.5 of this Act.
16    The electric utility shall be entitled to recover the cost
17of such renewable energy credits and excluded renewable energy
18resources contract costs through an automatic adjustment
19charge provision in the electric utility's delivery services
20tariffs that allows the electric utility to adjust its tariffed
21charges on an quarterly basis for changes in its costs incurred
22to purchase renewable energy credits and its excluded renewable
23energy resources contract costs, if any, without the need to
24file a general delivery services rate case. The electric
25utility's collections pursuant to such an automatic adjustment
26charge tariff shall be subject to annual review,

 

 

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1reconciliation, and true-up against actual costs by the
2Commission pursuant to a procedure that shall be specified in
3the electric utility's tariff. The procedure shall provide that
4any difference between the electric utility's collections
5pursuant to the automatic adjustment charge for an annual
6period and the electric utility's actual costs of renewable
7energy credits and actual excluded renewable energy resources
8contract costs for the annual period shall be refunded to or
9collected from, as applicable, the electric utility's delivery
10services customers in subsequent periods.
11(Source: P.A. 91-50, eff. 6-30-99; 92-690, eff. 7-18-02.)
 
12    (220 ILCS 5/16-111.5)
13    Sec. 16-111.5. Provisions relating to procurement.
14    (a) An electric utility that on December 31, 2005 served at
15least 100,000 customers in Illinois shall procure power, energy
16efficiency products, and energy for its eligible retail
17customers in accordance with the applicable provisions set
18forth in Section 1-75 of the Illinois Power Agency Act and this
19Section and, for years beginning on and after June 1, 2012,
20shall procure renewable energy credits with respect to the
21kilowatthour usage of delivery services non-eligible retail
22customers in the electric utility's service area in accordance
23with the applicable provisions set forth in Section 1-75 of the
24Illinois Power Agency Act and this Section. "Eligible retail
25customers" for the purposes of this Section means those retail

 

 

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1customers that purchase power and energy from the electric
2utility under fixed-price bundled service tariffs, other than
3those retail customers whose service is declared or deemed
4competitive under Section 16-113 and those other customer
5groups specified in this Section, including self-generating
6customers, customers electing hourly pricing, or those
7customers who are otherwise ineligible for fixed-price bundled
8tariff service. "Delivery services non-eligible retail
9customers" for the purposes of this Section has the meaning set
10forth in Section 1-10 of the Illinois Power Agency Act. Those
11customers that are excluded from the definition of "eligible
12retail customers" shall not be included in the procurement plan
13electric supply service load requirements, and the utility
14shall procure any supply requirements, including capacity,
15ancillary services, energy efficiency products, and hourly
16priced energy, in the applicable markets as needed to serve
17those customers, provided that the utility may include in its
18procurement plan load requirements for the load that is
19associated with those retail customers whose service has been
20declared or deemed competitive pursuant to Section 16-113 of
21this Act to the extent that those customers are purchasing
22power and energy during one of the transition periods
23identified in subsection (b) of Section 16-113 of this Act.
24    (b) A procurement plan shall be prepared for each electric
25utility consistent with the applicable requirements of the
26Illinois Power Agency Act and this Section. For purposes of

 

 

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1this Section, Illinois electric utilities that are affiliated
2by virtue of a common parent company are considered to be a
3single electric utility. Each procurement plan shall analyze
4the projected balance of supply and demand for eligible retail
5customers over a 5-year period with the first planning year
6beginning on June 1 of the year following the year in which the
7plan is filed. The plan shall specifically identify the
8wholesale products to be procured following plan approval, and
9shall follow all the requirements set forth in the Public
10Utilities Act and all applicable State and federal laws,
11statutes, rules, or regulations, as well as Commission orders.
12Nothing in this Section precludes consideration of contracts
13longer than 5 years and related forecast data. Unless specified
14otherwise in this Section, in the procurement plan or in the
15implementing tariff, any procurement occurring in accordance
16with this plan shall be competitively bid through a request for
17proposals process. Approval and implementation of the
18procurement plan shall be subject to review and approval by the
19Commission according to the provisions set forth in this
20Section. A procurement plan shall include each of the following
21components:
22        (1) Hourly load analysis. This analysis shall include:
23            (i) multi-year historical analysis of hourly
24        loads;
25            (ii) switching trends and competitive retail
26        market analysis;

 

 

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1            (iii) known or projected changes to future loads;
2        and
3            (iv) growth forecasts by customer class.
4        (2) Analysis of the impact of any demand side and
5    renewable energy initiatives. This analysis shall include:
6            (i) the impact of demand response programs, both
7        current and projected;
8            (ii) supply side needs that are projected to be
9        offset by purchases of renewable energy resources, if
10        any; and
11            (iii) the impact of energy efficiency programs,
12        both current and projected.
13        (3) A plan for meeting the expected load requirements
14    that will not be met through preexisting contracts. This
15    plan shall include:
16            (i) definitions of the different retail customer
17        classes for which supply is being purchased;
18            (ii) the proposed mix of demand-response products
19        for which contracts will be executed during the next
20        year. The cost-effective demand-response measures
21        shall be procured whenever the cost is lower than
22        procuring comparable capacity products, provided that
23        such products shall:
24                (A) be procured by a demand-response provider
25            from eligible retail customers;
26                (B) at least satisfy the demand-response

 

 

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1            requirements of the regional transmission
2            organization market in which the utility's service
3            territory is located, including, but not limited
4            to, any applicable capacity or dispatch
5            requirements;
6                (C) provide for customers' participation in
7            the stream of benefits produced by the
8            demand-response products;
9                (D) provide for reimbursement by the
10            demand-response provider of the utility for any
11            costs incurred as a result of the failure of the
12            supplier of such products to perform its
13            obligations thereunder; and
14                (E) meet the same credit requirements as apply
15            to suppliers of capacity, in the applicable
16            regional transmission organization market;
17            (iii) the proposed energy efficiency products for
18        which contracts will be executed during the next year.
19        The cost effective energy efficiency measures shall be
20        procured whenever the cost is lower than the combined
21        avoided costs of energy, capacity, transmission, and
22        the renewable portfolio standard for a comparable
23        volume of energy provided that the energy efficiency
24        products shall:
25                (A) be procured by a energy efficiency
26            provider from eligible retail customers;

 

 

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1                (B) at least satisfy evaluation, measurement,
2            and verification standards established pursuant to
3            Section 8-103 of this Act;
4                (C) provide for reimbursement by the energy
5            efficiency provider of the utility for any costs
6            incurred as a result of the failure of the supplier
7            of such products to perform its obligations
8            thereunder; and
9                (D) meet the same credit requirements as apply
10            to suppliers of capacity, in the applicable
11            regional transmission organization market;
12            (iv) (iii) monthly forecasted system supply
13        requirements, including expected minimum, maximum, and
14        average values for the planning period;
15            (v) (iv) the proposed mix and selection of standard
16        wholesale products for which contracts will be
17        executed during the next year, separately or in
18        combination, to meet that portion of its load
19        requirements not met through pre-existing contracts,
20        including but not limited to monthly 5 x 16 peak period
21        block energy, monthly off-peak wrap energy, monthly 7 x
22        24 energy, annual 5 x 16 energy, annual off-peak wrap
23        energy, annual 7 x 24 energy, monthly capacity, annual
24        capacity, peak load capacity obligations, capacity
25        purchase plan, and ancillary services;
26            (vi) (v) proposed term structures for each

 

 

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1        wholesale product type included in the proposed
2        procurement plan portfolio of products; and
3            (vii) (vi) an assessment of the price risk, load
4        uncertainty, and other factors that are associated
5        with the proposed procurement plan; this assessment,
6        to the extent possible, shall include an analysis of
7        the following factors: contract terms, time frames for
8        securing products or services, fuel costs, weather
9        patterns, transmission costs, market conditions, and
10        the governmental regulatory environment; the proposed
11        procurement plan shall also identify alternatives for
12        those portfolio measures that are identified as having
13        significant price risk.
14        (4) Proposed procedures for balancing loads. The
15    procurement plan shall include, for load requirements
16    included in the procurement plan, the process for (i)
17    hourly balancing of supply and demand and (ii) the criteria
18    for portfolio re-balancing in the event of significant
19    shifts in load.
20    (c) The procurement process set forth in Section 1-75 of
21the Illinois Power Agency Act and subsection (e) of this
22Section shall be administered by a procurement administrator
23and monitored by a procurement monitor.
24        (1) The procurement administrator shall:
25            (i) design the final procurement process in
26        accordance with Section 1-75 of the Illinois Power

 

 

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1        Agency Act and subsection (e) of this Section following
2        Commission approval of the procurement plan;
3            (ii) develop benchmarks in accordance with
4        subsection (e)(3) to be used to evaluate bids; these
5        benchmarks shall be submitted to the Commission for
6        review and approval on a confidential basis prior to
7        the procurement event;
8            (iii) serve as the interface between the electric
9        utility and suppliers;
10            (iv) manage the bidder pre-qualification and
11        registration process;
12            (v) obtain the electric utilities' agreement to
13        the final form of all supply contracts and credit
14        collateral agreements;
15            (vi) administer the request for proposals process;
16            (vii) have the discretion to negotiate to
17        determine whether bidders are willing to lower the
18        price of bids that meet the benchmarks approved by the
19        Commission; any post-bid negotiations with bidders
20        shall be limited to price only and shall be completed
21        within 24 hours after opening the sealed bids and shall
22        be conducted in a fair and unbiased manner; in
23        conducting the negotiations, there shall be no
24        disclosure of any information derived from proposals
25        submitted by competing bidders; if information is
26        disclosed to any bidder, it shall be provided to all

 

 

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1        competing bidders;
2            (viii) maintain confidentiality of supplier and
3        bidding information in a manner consistent with all
4        applicable laws, rules, regulations, and tariffs;
5            (ix) submit a confidential report to the
6        Commission recommending acceptance or rejection of
7        bids;
8            (x) notify the utility of contract counterparties
9        and contract specifics; and
10            (xi) administer related contingency procurement
11        events.
12        (2) The procurement monitor, who shall be retained by
13    the Commission, shall:
14            (i) monitor interactions among the procurement
15        administrator, suppliers, and utility;
16            (ii) monitor and report to the Commission on the
17        progress of the procurement process;
18            (iii) provide an independent confidential report
19        to the Commission regarding the results of the
20        procurement event;
21            (iv) assess compliance with the procurement plans
22        approved by the Commission for each utility that on
23        December 31, 2005 provided electric service to a least
24        100,000 customers in Illinois;
25            (v) preserve the confidentiality of supplier and
26        bidding information in a manner consistent with all

 

 

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1        applicable laws, rules, regulations, and tariffs;
2            (vi) provide expert advice to the Commission and
3        consult with the procurement administrator regarding
4        issues related to procurement process design, rules,
5        protocols, and policy-related matters; and
6            (vii) consult with the procurement administrator
7        regarding the development and use of benchmark
8        criteria, standard form contracts, credit policies,
9        and bid documents.
10    (d) Except as provided in subsection (j), the planning
11process shall be conducted as follows:
12        (1) Beginning in 2008, each Illinois utility procuring
13    power pursuant to this Section shall annually provide a
14    range of load forecasts to the Illinois Power Agency by
15    July 15 of each year, or such other date as may be required
16    by the Commission or Agency. The load forecasts shall cover
17    the 5-year procurement planning period for the next
18    procurement plan and shall include hourly data
19    representing a high-load, low-load and expected-load
20    scenario for the load of the eligible retail customers. For
21    procurement planning periods beginning on and after June 1,
22    2012, the electric utility shall provide a range of annual
23    forecasts for the 5-year procurement planning period of the
24    total kilowatthour usage of eligible retail customers and
25    the total annual kilowatthour usage of delivery services
26    non-eligible retail customers in its service area. The

 

 

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1    utility shall provide supporting data and assumptions for
2    each of the scenarios.
3        (2) Beginning in 2008, the Illinois Power Agency shall
4    prepare a procurement plan by August 15th of each year, or
5    such other date as may be required by the Commission. The
6    procurement plan shall identify the portfolio of
7    demand-response, energy efficiency products, and power and
8    energy products to be procured. Cost-effective
9    demand-response measures and cost-effective energy
10    measures shall be procured as set forth in items item (iii)
11    and (iv) of subsection (b) of this Section. Copies of the
12    procurement plan shall be posted and made publicly
13    available on the Agency's and Commission's websites, and
14    copies shall also be provided to each affected electric
15    utility. An affected utility shall have 30 days following
16    the date of posting to provide comment to the Agency on the
17    procurement plan. Other interested entities also may
18    comment on the procurement plan. All comments submitted to
19    the Agency shall be specific, supported by data or other
20    detailed analyses, and, if objecting to all or a portion of
21    the procurement plan, accompanied by specific alternative
22    wording or proposals. All comments shall be posted on the
23    Agency's and Commission's websites. During this 30-day
24    comment period, the Agency shall hold at least one public
25    hearing within each utility's service area for the purpose
26    of receiving public comment on the procurement plan. Within

 

 

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1    14 days following the end of the 30-day review period, the
2    Agency shall revise the procurement plan as necessary based
3    on the comments received and file the procurement plan with
4    the Commission and post the procurement plan on the
5    websites.
6        (3) Within 5 days after the filing of the procurement
7    plan, any person objecting to the procurement plan shall
8    file an objection with the Commission. Within 10 days after
9    the filing, the Commission shall determine whether a
10    hearing is necessary. The Commission shall enter its order
11    confirming or modifying the procurement plan within 90 days
12    after the filing of the procurement plan by the Illinois
13    Power Agency.
14        (4) The Commission shall approve the procurement plan,
15    including expressly the forecast used in the procurement
16    plan, if the Commission determines that it will ensure
17    adequate, reliable, affordable, efficient, and
18    environmentally sustainable electric service at the lowest
19    total cost over time, taking into account any benefits of
20    price stability.
21    (e) The procurement process shall include each of the
22following components:
23        (1) Solicitation, pre-qualification, and registration
24    of bidders. The procurement administrator shall
25    disseminate information to potential bidders to promote a
26    procurement event, notify potential bidders that the

 

 

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1    procurement administrator may enter into a post-bid price
2    negotiation with bidders that meet the applicable
3    benchmarks, provide supply requirements, and otherwise
4    explain the competitive procurement process. In addition
5    to such other publication as the procurement administrator
6    determines is appropriate, this information shall be
7    posted on the Illinois Power Agency's and the Commission's
8    websites. The procurement administrator shall also
9    administer the prequalification process, including
10    evaluation of credit worthiness, compliance with
11    procurement rules, and agreement to the standard form
12    contract developed pursuant to paragraph (2) of this
13    subsection (e). The procurement administrator shall then
14    identify and register bidders to participate in the
15    procurement event.
16        (2) Standard contract forms and credit terms and
17    instruments. The procurement administrator, in
18    consultation with the utilities, the Commission, and other
19    interested parties and subject to Commission oversight,
20    shall develop and provide standard contract forms for the
21    supplier contracts that meet generally accepted industry
22    practices. Standard credit terms and instruments that meet
23    generally accepted industry practices shall be similarly
24    developed. The procurement administrator shall make
25    available to the Commission all written comments it
26    receives on the contract forms, credit terms, or

 

 

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1    instruments. If the procurement administrator cannot reach
2    agreement with the applicable electric utility as to the
3    contract terms and conditions, the procurement
4    administrator must notify the Commission of any disputed
5    terms and the Commission shall resolve the dispute. The
6    terms of the contracts shall not be subject to negotiation
7    by winning bidders, and the bidders must agree to the terms
8    of the contract in advance so that winning bids are
9    selected solely on the basis of price.
10        (3) Establishment of a market-based price benchmark.
11    As part of the development of the procurement process, the
12    procurement administrator, in consultation with the
13    Commission staff, Agency staff, and the procurement
14    monitor, shall establish benchmarks for evaluating the
15    final prices in the contracts for each of the products that
16    will be procured through the procurement process. The
17    benchmarks shall be based on price data for similar
18    products for the same delivery period and same delivery
19    hub, or other delivery hubs after adjusting for that
20    difference. The price benchmarks may also be adjusted to
21    take into account differences between the information
22    reflected in the underlying data sources and the specific
23    products and procurement process being used to procure
24    power for the Illinois utilities. The benchmarks shall be
25    confidential but shall be provided to, and will be subject
26    to Commission review and approval, prior to a procurement

 

 

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1    event.
2        (4) Request for proposals competitive procurement
3    process. The procurement administrator shall design and
4    issue a request for proposals to supply electricity in
5    accordance with each utility's procurement plan, as
6    approved by the Commission. The request for proposals shall
7    set forth a procedure for sealed, binding commitment
8    bidding with pay-as-bid settlement, and provision for
9    selection of bids on the basis of price.
10        (5) A plan for implementing contingencies in the event
11    of supplier default or failure of the procurement process
12    to fully meet the expected load requirement due to
13    insufficient supplier participation, Commission rejection
14    of results, or any other cause.
15            (i) Event of supplier default: In the event of
16        supplier default, the utility shall review the
17        contract of the defaulting supplier to determine if the
18        amount of supply is 200 megawatts or greater, and if
19        there are more than 60 days remaining of the contract
20        term. If both of these conditions are met, and the
21        default results in termination of the contract, then
22        the utility shall immediately notify the Illinois
23        Power Agency that a request for proposals must be
24        issued to procure replacement power or energy
25        efficiency products, and the procurement administrator
26        shall run an additional procurement event. If the

 

 

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1        contracted supply of the defaulting supplier is less
2        than 200 megawatts or there are less than 60 days
3        remaining of the contract term, then the utility shall
4        procure energy efficiency products or power and energy
5        from the applicable regional transmission organization
6        market, including ancillary services, capacity, energy
7        efficiency products, and day-ahead or real time
8        energy, or both, for the duration of the contract term
9        to replace the contracted supply; provided, however,
10        that if a needed product is not available through the
11        regional transmission organization market it shall be
12        purchased from the wholesale market.
13            (ii) Failure of the procurement process to fully
14        meet the expected load requirement: If the procurement
15        process fails to fully meet the expected load
16        requirement due to insufficient supplier participation
17        or due to a Commission rejection of the procurement
18        results, the procurement administrator, the
19        procurement monitor, and the Commission staff shall
20        meet within 10 days to analyze potential causes of low
21        supplier interest or causes for the Commission
22        decision. If changes are identified that would likely
23        result in increased supplier participation, or that
24        would address concerns causing the Commission to
25        reject the results of the prior procurement event, the
26        procurement administrator may implement those changes

 

 

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1        and rerun the request for proposals process according
2        to a schedule determined by those parties and
3        consistent with Section 1-75 of the Illinois Power
4        Agency Act and this subsection. In any event, a new
5        request for proposals process shall be implemented by
6        the procurement administrator within 90 days after the
7        determination that the procurement process has failed
8        to fully meet the expected load requirement.
9            (iii) In all cases where there is insufficient
10        supply provided under contracts awarded through the
11        procurement process to fully meet the electric
12        utility's load requirement, the utility shall meet the
13        load requirement by procuring power and energy from the
14        applicable regional transmission organization market,
15        including ancillary services, capacity, and day-ahead
16        or real time energy or both; provided, however, that if
17        a needed product is not available through the regional
18        transmission organization market it shall be purchased
19        from the wholesale market.
20        (6) The procurement process described in this
21    subsection is exempt from the requirements of the Illinois
22    Procurement Code, pursuant to Section 20-10 of that Code.
23    (f) Within 2 business days after opening the sealed bids,
24the procurement administrator shall submit a confidential
25report to the Commission. The report shall contain the results
26of the bidding for each of the products along with the

 

 

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1procurement administrator's recommendation for the acceptance
2and rejection of bids based on the price benchmark criteria and
3other factors observed in the process. For procurements
4applicable to periods beginning on and after June 1, 2012, the
5report shall also include, with respect to each recommended
6purchase of bundled renewable energy resources as defined in
7Section 1-10 of the Illinois Power Agency Act, an allocation of
8the price between the price of the electricity generated by
9renewable energy resources and the price of the associated
10renewable energy credits. The procurement monitor also shall
11submit a confidential report to the Commission within 2
12business days after opening the sealed bids. The report shall
13contain the procurement monitor's assessment of bidder
14behavior in the process as well as an assessment of the
15procurement administrator's compliance with the procurement
16process and rules. The Commission shall review the confidential
17reports submitted by the procurement administrator and
18procurement monitor, and shall accept or reject the
19recommendations of the procurement administrator, including
20the recommended allocation of the price of each purchase of
21bundled renewable energy resources between the price of the
22electricity and the price of the associated renewable energy
23credits, within 2 business days after receipt of the reports.
24    (g) Within 3 business days after the Commission decision
25approving the results of a procurement event, the utility shall
26enter into binding contractual arrangements with the winning

 

 

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1suppliers using the standard form contracts; except that the
2utility shall not be required either directly or indirectly to
3execute the contracts if a tariff that is consistent with
4subsection (l) of this Section has not been approved and placed
5into effect for that utility.
6    (h) The names of the successful bidders and the load
7weighted average of the winning bid prices for each contract
8type and for each contract term shall be made available to the
9public at the time of Commission approval of a procurement
10event. The Commission, the procurement monitor, the
11procurement administrator, the Illinois Power Agency, and all
12participants in the procurement process shall maintain the
13confidentiality of all other supplier and bidding information
14in a manner consistent with all applicable laws, rules,
15regulations, and tariffs. Confidential information, including
16the confidential reports submitted by the procurement
17administrator and procurement monitor pursuant to subsection
18(f) of this Section, shall not be made publicly available and
19shall not be discoverable by any party in any proceeding,
20absent a compelling demonstration of need, nor shall those
21reports be admissible in any proceeding other than one for law
22enforcement purposes.
23    (i) Within 2 business days after a Commission decision
24approving the results of a procurement event or such other date
25as may be required by the Commission from time to time, the
26utility shall file for informational purposes with the

 

 

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1Commission its actual or estimated retail supply charges, as
2applicable, by customer supply group reflecting the costs
3associated with the procurement and computed in accordance with
4the tariffs filed pursuant to subsection (l) of this Section
5and approved by the Commission.
6    (j) Within 60 days following the effective date of this
7amendatory Act, each electric utility that on December 31, 2005
8provided electric service to at least 100,000 customers in
9Illinois shall prepare and file with the Commission an initial
10procurement plan, which shall conform in all material respects
11to the requirements of the procurement plan set forth in
12subsection (b); provided, however, that the Illinois Power
13Agency Act shall not apply to the initial procurement plan
14prepared pursuant to this subsection. The initial procurement
15plan shall identify the portfolio of power and energy products
16to be procured and delivered for the period June 2008 through
17May 2009, and shall identify the proposed procurement
18administrator, who shall have the same experience and expertise
19as is required of a procurement administrator hired pursuant to
20Section 1-75 of the Illinois Power Agency Act. Copies of the
21procurement plan shall be posted and made publicly available on
22the Commission's website. The initial procurement plan may
23include contracts for renewable resources that extend beyond
24May 2009.
25        (i) Within 14 days following filing of the initial
26    procurement plan, any person may file a detailed objection

 

 

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1    with the Commission contesting the procurement plan
2    submitted by the electric utility. All objections to the
3    electric utility's plan shall be specific, supported by
4    data or other detailed analyses. The electric utility may
5    file a response to any objections to its procurement plan
6    within 7 days after the date objections are due to be
7    filed. Within 7 days after the date the utility's response
8    is due, the Commission shall determine whether a hearing is
9    necessary. If it determines that a hearing is necessary, it
10    shall require the hearing to be completed and issue an
11    order on the procurement plan within 60 days after the
12    filing of the procurement plan by the electric utility.
13        (ii) The order shall approve or modify the procurement
14    plan, approve an independent procurement administrator,
15    and approve or modify the electric utility's tariffs that
16    are proposed with the initial procurement plan. The
17    Commission shall approve the procurement plan if the
18    Commission determines that it will ensure adequate,
19    reliable, affordable, efficient, and environmentally
20    sustainable electric service at the lowest total cost over
21    time, taking into account any benefits of price stability.
22    (k) In order to promote price stability for residential and
23small commercial customers during the transition to
24competition in Illinois, and notwithstanding any other
25provision of this Act, each electric utility subject to this
26Section shall enter into one or more multi-year financial swap

 

 

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1contracts that become effective on the effective date of this
2amendatory Act. These contracts may be executed with generators
3and power marketers, including affiliated interests of the
4electric utility. These contracts shall be for a term of no
5more than 5 years and shall, for each respective utility or for
6any Illinois electric utilities that are affiliated by virtue
7of a common parent company and that are thereby considered a
8single electric utility for purposes of this subsection (k),
9not exceed in the aggregate 3,000 megawatts for any hour of the
10year. The contracts shall be financial contracts and not energy
11sales contracts. The contracts shall be executed as
12transactions under a negotiated master agreement based on the
13form of master agreement for financial swap contracts sponsored
14by the International Swaps and Derivatives Association, Inc.
15and shall be considered pre-existing contracts in the
16utilities' procurement plans for residential and small
17commercial customers. Costs incurred pursuant to a contract
18authorized by this subsection (k) shall be deemed prudently
19incurred and reasonable in amount and the electric utility
20shall be entitled to full cost recovery pursuant to the tariffs
21filed with the Commission.
22    (l) An electric utility shall recover its costs incurred
23under this Section, including, but not limited to, the costs of
24procuring power, energy efficiency products, and energy
25demand-response resources under this Section. The utility
26shall file with the initial procurement plan its proposed

 

 

09700SB1653ham001- 173 -LRB097 05721 ASK 56016 a

1tariffs through which its costs of procuring power that are
2incurred pursuant to a Commission-approved procurement plan
3and those other costs identified in this subsection (l), will
4be recovered. The tariffs shall include a formula rate or
5charge designed to pass through both the costs incurred by the
6utility in procuring a supply of electric power and energy for
7the applicable customer classes with no mark-up or return on
8the price paid by the utility for that supply, plus any just
9and reasonable costs that the utility incurs in arranging and
10providing for the supply of electric power and energy. The
11formula rate or charge shall also contain provisions that
12ensure that its application does not result in over or under
13recovery due to changes in customer usage and demand patterns,
14and that provide for the correction, on at least an annual
15basis, of any accounting errors that may occur. A utility shall
16recover through the tariff all reasonable costs incurred to
17implement or comply with any procurement plan that is developed
18and put into effect pursuant to Section 1-75 of the Illinois
19Power Agency Act and this Section, including any fees assessed
20by the Illinois Power Agency, costs associated with load
21balancing, and contingency plan costs. The electric utility
22shall also recover its full costs of procuring electric supply
23for which it contracted before the effective date of this
24Section in conjunction with the provision of full requirements
25service under fixed-price bundled service tariffs subsequent
26to December 31, 2006. All such costs shall be deemed to have

 

 

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1been prudently incurred. The pass-through tariffs that are
2filed and approved pursuant to this Section shall not be
3subject to review under, or in any way limited by, Section
416-111(i) of this Act. Beginning June 1, 2012, the costs
5incurred by the electric utility to purchase renewable energy
6credits in accordance with subsection (c) of Section 1-75 of
7the Illinois Power Agency Act shall be recovered through the
8electric utility's tariffed charges for delivery services
9pursuant to Section 16-108 of this Act and shall not be
10recovered through the electric utility's tariffed charges for
11electric power and energy supply to its eligible retail
12customers.
13    (m) The Commission has the authority to adopt rules to
14carry out the provisions of this Section. For the public
15interest, safety, and welfare, the Commission also has
16authority to adopt rules to carry out the provisions of this
17Section on an emergency basis immediately following the
18effective date of this amendatory Act.
19    (n) Notwithstanding any other provision of this Act, any
20affiliated electric utilities that submit a single procurement
21plan covering their combined needs may procure for those
22combined needs in conjunction with that plan, and may enter
23jointly into power supply contracts, purchases, and other
24procurement arrangements, and allocate capacity, energy
25efficiency products, and energy and cost responsibility
26therefor among themselves in proportion to their requirements.

 

 

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1    (o) On or before June 1 of each year, the Commission shall
2hold an informal hearing for the purpose of receiving comments
3on the prior year's procurement process and any recommendations
4for change.
5    (p) An electric utility subject to this Section may propose
6to invest, lease, own, or operate an electric generation
7facility as part of its procurement plan, provided the utility
8demonstrates that such facility is the least-cost option to
9provide electric service to eligible retail customers. If the
10facility is shown to be the least-cost option and is included
11in a procurement plan prepared in accordance with Section 1-75
12of the Illinois Power Agency Act and this Section, then the
13electric utility shall make a filing pursuant to Section 8-406
14of the Act, and may request of the Commission any statutory
15relief required thereunder. If the Commission grants all of the
16necessary approvals for the proposed facility, such supply
17shall thereafter be considered as a pre-existing contract under
18subsection (b) of this Section. The Commission shall in any
19order approving a proposal under this subsection specify how
20the utility will recover the prudently incurred costs of
21investing in, leasing, owning, or operating such generation
22facility through just and reasonable rates charged to eligible
23retail customers. Cost recovery for facilities included in the
24utility's procurement plan pursuant to this subsection shall
25not be subject to review under or in any way limited by the
26provisions of Section 16-111(i) of this Act. Nothing in this

 

 

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1Section is intended to prohibit a utility from filing for a
2fuel adjustment clause as is otherwise permitted under Section
39-220 of this Act.
4(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09.)
 
5    (220 ILCS 5/16-115)
6    Sec. 16-115. Certification of alternative retail electric
7suppliers.
8    (a) Any alternative retail electric supplier must obtain a
9certificate of service authority from the Commission in
10accordance with this Section before serving any retail customer
11or other user located in this State. An alternative retail
12electric supplier may request, and the Commission may grant, a
13certificate of service authority for the entire State or for a
14specified geographic area of the State.
15    (b) An alternative retail electric supplier seeking a
16certificate of service authority shall file with the Commission
17a verified application containing information showing that the
18applicant meets the requirements of this Section. The
19alternative retail electric supplier shall publish notice of
20its application in the official State newspaper within 10 days
21following the date of its filing. No later than 45 days after
22the application is properly filed with the Commission, and such
23notice is published, the Commission shall issue its order
24granting or denying the application.
25    (c) An application for a certificate of service authority

 

 

09700SB1653ham001- 177 -LRB097 05721 ASK 56016 a

1shall identify the area or areas in which the applicant intends
2to offer service and the types of services it intends to offer.
3Applicants that seek to serve residential or small commercial
4retail customers within a geographic area that is smaller than
5an electric utility's service area shall submit evidence
6demonstrating that the designation of this smaller area does
7not violate Section 16-115A. An applicant that seeks to serve
8residential or small commercial retail customers may state in
9its application for certification any limitations that will be
10imposed on the number of customers or maximum load to be
11served.
12    (d) The Commission shall grant the application for a
13certificate of service authority if it makes the findings set
14forth in this subsection based on the verified application and
15such other information as the applicant may submit:
16        (1) That the applicant possesses sufficient technical,
17    financial and managerial resources and abilities to
18    provide the service for which it seeks a certificate of
19    service authority. In determining the level of technical,
20    financial and managerial resources and abilities which the
21    applicant must demonstrate, the Commission shall consider
22    (i) the characteristics, including the size and financial
23    sophistication, of the customers that the applicant seeks
24    to serve, and (ii) whether the applicant seeks to provide
25    electric power and energy using property, plant and
26    equipment which it owns, controls or operates;

 

 

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1        (2) That the applicant will comply with all applicable
2    federal, State, regional and industry rules, policies,
3    practices and procedures for the use, operation, and
4    maintenance of the safety, integrity and reliability, of
5    the interconnected electric transmission system;
6        (3) That the applicant will only provide service to
7    retail customers in an electric utility's service area that
8    are eligible to take delivery services under this Act;
9        (4) That the applicant will comply with such
10    informational or reporting requirements as the Commission
11    may by rule establish and provide the information required
12    by Section 16-112. Any data related to contracts for the
13    purchase and sale of electric power and energy shall be
14    made available for review by the Staff of the Commission on
15    a confidential and proprietary basis and only to the extent
16    and for the purposes which the Commission determines are
17    reasonably necessary in order to carry out the purposes of
18    this Act;
19        (5) That the applicant will procure renewable energy
20    resources in accordance with Section 16-115D of this Act,
21    and will source electricity from clean coal facilities, as
22    defined in Section 1-10 of the Illinois Power Agency Act,
23    in amounts at least equal to the percentages set forth in
24    subsections (c) and (d) of Section 1-75 of the Illinois
25    Power Agency Act. For purposes of this Section:
26            (i) (blank) (Blank);

 

 

09700SB1653ham001- 179 -LRB097 05721 ASK 56016 a

1            (ii) (blank) (Blank);
2            (iii) (blank); the required sourcing of
3        electricity generated by clean coal facilities, other
4        than the initial clean coal facility, shall be limited
5        to the amount of electricity that can be procured or
6        sourced at a price at or below the benchmarks approved
7        by the Commission each year in accordance with item (1)
8        of subsection (c) and items (1) and (5) of subsection
9        (d) of Section 1-75 of the Illinois Power Agency Act;
10            (iv) all alternative retail electric suppliers,
11        whether certified before or after the effective date of
12        this amendatory Act of the 97th General Assembly, shall
13        execute a sourcing agreement to source electricity
14        from the initial clean coal facility, on the terms set
15        forth in paragraphs (3) and (4) of subsection (d) of
16        Section 1-75 of the Illinois Power Agency Act, with
17        each reference therein to "utility" being deemed to be
18        a reference to an alternative retail electric
19        supplier, except that in lieu of the requirements in
20        subparagraphs (B)(v), (D)(ii), and (D)(vii) (A)(v),
21        (B)(i), (C)(v), and (C)(vi) of paragraph (3) of that
22        subsection (d), shall not apply; the applicant shall
23        execute one or more of the following:
24                (1) if the sourcing agreement is a power
25            purchase agreement, a contract with the initial
26            clean coal facility to purchase in each hour an

 

 

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1            amount of electricity equal to all clean coal
2            energy made available from the initial clean coal
3            facility during such hour, which the utilities are
4            not required to procure under the terms of
5            subsection (d) of Section 1-75 of the Illinois
6            Power Agency Act, multiplied by a fraction, the
7            numerator of which is the alternative retail
8            electric supplier's retail market sales of
9            electricity (expressed in kilowatthours sold) in
10            the State during the prior calendar month and the
11            denominator of which is the total sales of
12            electricity (expressed in kilowatthours sold) in
13            the State by alternative retail electric suppliers
14            during such prior month that are subject to the
15            requirements of this paragraph (5) of subsection
16            (d) of this Section and subsection (d) of Section
17            1-75 of the Illinois Power Agency Act plus the
18            total sales of electricity (expressed in
19            kilowatthours sold) by utilities outside of their
20            service areas during such prior month, pursuant to
21            subsection (c) of Section 16-116 of this Act; or
22                (2) if the sourcing agreement is a contract for
23            differences, a contract with the initial clean
24            coal facility in each hour with respect to an
25            amount of electricity equal to all clean coal
26            energy made available from the initial clean coal

 

 

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1            facility during such hour, which the utilities are
2            not required to procure under the terms of
3            subsection (d) of Section 1-75 of the Illinois
4            Power Agency Act, multiplied by a fraction, the
5            numerator of which is the alternative retail
6            electric supplier's retail market sales of
7            electricity (expressed in kilowatthours sold) in
8            the State during the prior calendar month and the
9            denominator of which is the total sales of
10            electricity (expressed in kilowatthours sold) in
11            the State by alternative retail electric suppliers
12            during such prior month that are subject to the
13            requirements of this paragraph (5) of subsection
14            (d) of this Section and subsection (d) of Section
15            1-75 of the Illinois Power Agency Act plus the
16            total sales of electricity (expressed in
17            kilowatthours sold) by utilities outside of their
18            service areas during such prior month, pursuant to
19            subsection (c) of Section 16-116 of this Act;
20            (v) (blank); if, in any year after the first year
21        of commercial operation, the owner of the clean coal
22        facility fails to demonstrate to the Commission that
23        the initial clean coal facility captured and
24        sequestered at least 50% of the total carbon emissions
25        that the facility would otherwise emit or that
26        sequestration of emissions from prior years has

 

 

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1        failed, resulting in the release of carbon into the
2        atmosphere, the owner of the facility must offset
3        excess emissions. Any such carbon offsets must be
4        permanent, additional, verifiable, real, located
5        within the State of Illinois, and legally and
6        practicably enforceable. The costs of any such offsets
7        that are not recoverable shall not exceed $15 million
8        in any given year. No costs of any such purchases of
9        carbon offsets may be recovered from an alternative
10        retail electric supplier or its customers. All carbon
11        offsets purchased for this purpose and any carbon
12        emission credits associated with sequestration of
13        carbon from the facility must be permanently retired.
14        The initial clean coal facility shall not forfeit its
15        designation as a clean coal facility if the facility
16        fails to fully comply with the applicable carbon
17        sequestration requirements in any given year, provided
18        the requisite offsets are purchased. However, the
19        Attorney General, on behalf of the People of the State
20        of Illinois, may specifically enforce the facility's
21        sequestration requirement and the other terms of this
22        contract provision. Compliance with the sequestration
23        requirements and offset purchase requirements that
24        apply to the initial clean coal facility shall be
25        reviewed annually by an independent expert retained by
26        the owner of the initial clean coal facility, with the

 

 

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1        advance written approval of the Attorney General;
2            (vi) the The Commission shall, after notice and
3        hearing, revoke the certification of any alternative
4        retail electric supplier that fails to execute a
5        sourcing agreement with the initial clean coal
6        facility as required by item (5) of subsection (d) of
7        this Section. The sourcing agreements with the this
8        initial clean coal facility shall be subject to
9        approval both approval of the initial clean coal
10        facility by the Illinois Power Agency pursuant to
11        paragraph (4) of subsection (d) of Section 1-75 of the
12        Illinois Power Agency Act General Assembly and
13        satisfaction of the requirements of item (4) of
14        subsection (d) of Section 1-75 of the Illinois Power
15        Agency Act, and shall be executed within 90 days after
16        any such approval by the Illinois Power Agency or the
17        issuance of any necessary approval by the Federal
18        Energy Regulatory Commission, whichever is later;
19            (vii) The Commission shall have jurisdiction over
20        disciplinary proceedings and complaints for violations
21        of this Section. If, upon complaint, the Commission
22        determines an alternative retail electric supplier has
23        failed to execute a sourcing agreement with the initial
24        clean coal facility, then the Commission shall issue
25        notice of the finding to the alternative retail
26        electric supplier. The alternative retail electric

 

 

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1        supplier shall have 30 days after the receipt of notice
2        to enter into a sourcing agreement. If, after the
3        notice period, the Commission finds an alternative
4        retail electric supplier has failed to comply, then the
5        Commission shall revoke the alternative retail
6        electric supplier's certificate for 6 months General
7        Assembly. The Commission shall not accept an
8        application for certification from an alternative
9        retail electric supplier that has lost certification
10        under this subsection (d), or any corporate affiliate
11        thereof, for at least one year from the date of
12        revocation;
13        (6) With respect to an applicant that seeks to serve
14    residential or small commercial retail customers, that the
15    area to be served by the applicant and any limitations it
16    proposes on the number of customers or maximum amount of
17    load to be served meet the provisions of Section 16-115A,
18    provided, that the Commission can extend the time for
19    considering such a certificate request by up to 90 days,
20    and can schedule hearings on such a request;
21        (7) That the applicant meets the requirements of
22    subsection (a) of Section 16-128; and
23        (8) That the applicant will comply with all other
24    applicable laws and regulations.
25    (d-5) (Blank).
26    (e) A retail customer that owns a cogeneration or

 

 

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1self-generation facility and that seeks certification only to
2provide electric power and energy from such facility to retail
3customers at separate locations which customers are both (i)
4owned by, or a subsidiary or other corporate affiliate of, such
5applicant and (ii) eligible for delivery services, shall be
6granted a certificate of service authority upon filing an
7application and notifying the Commission that it has entered
8into an agreement with the relevant electric utilities pursuant
9to Section 16-118. Provided, however, that if the retail
10customer owning such cogeneration or self-generation facility
11would not be charged a transition charge due to the exemption
12provided under subsection (f) of Section 16-108 prior to the
13certification, and the retail customers at separate locations
14are taking delivery services in conjunction with purchasing
15power and energy from the facility, the retail customer on
16whose premises the facility is located shall not thereafter be
17required to pay transition charges on the power and energy that
18such retail customer takes from the facility.
19    (f) The Commission shall have the authority to promulgate
20rules and regulations to carry out the provisions of this
21Section. On or before May 1, 1999, the Commission shall adopt a
22rule or rules applicable to the certification of those
23alternative retail electric suppliers that seek to serve only
24nonresidential retail customers with maximum electrical
25demands of one megawatt or more which shall provide for (i)
26expedited and streamlined procedures for certification of such

 

 

09700SB1653ham001- 186 -LRB097 05721 ASK 56016 a

1alternative retail electric suppliers and (ii) specific
2criteria which, if met by any such alternative retail electric
3supplier, shall constitute the demonstration of technical,
4financial and managerial resources and abilities to provide
5service required by subsection (d) (1) of this Section, such as
6a requirement to post a bond or letter of credit, from a
7responsible surety or financial institution, of sufficient
8size for the nature and scope of the services to be provided;
9demonstration of adequate insurance for the scope and nature of
10the services to be provided; and experience in providing
11similar services in other jurisdictions.
12    (g) In any proceeding initiated by a public utility
13pursuant to Section 8-406 or Section 8-406.1 of the this Act
14for a certificate of public convenience and necessity to
15construct and operate any utility plant, equipment, or facility
16required to provide service to the initial clean coal facility,
17it shall be conclusively presumed that the public convenience
18and necessary require the construction of such utility plant,
19equipment, or facility. In any proceeding initiated by a public
20utility pursuant to Section 8-503 of this Act for an order
21directing the addition, extension, or improvement of any
22utility plant, equipment, facilities, or other property or the
23erection of any new utility plant, or equipment or facilities
24to provide service to the initial clean coal facility, it shall
25be conclusively presumed that such additional, extended,
26improved or new utility plant, equipment, facility, or other

 

 

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1property is necessary and should be added, extended, or
2erected.
3(Source: P.A. 95-130, eff. 1-1-08; 95-1027, eff. 6-1-09;
496-159, eff. 8-10-09.)
 
5    (220 ILCS 5/16-115D)
6    Sec. 16-115D. Renewable portfolio standard for alternative
7retail electric suppliers and electric utilities operating
8outside their service territories.
9    (a) Until May 31, 2012, an An alternative retail electric
10supplier shall be responsible for procuring cost-effective
11renewable energy resources as required under item (5) of
12subsection (d) of Section 16-115 of this Act as outlined
13herein:
14        (1) The definition of renewable energy resources
15    contained in Section 1-10 of the Illinois Power Agency Act
16    applies to all renewable energy resources required to be
17    procured by alternative retail electric suppliers.
18        (2) The quantity of renewable energy resources shall be
19    measured as a percentage of the actual amount of metered
20    electricity (megawatt-hours) delivered by the alternative
21    retail electric supplier to Illinois retail customers
22    during the 12-month period June 1 through May 31,
23    commencing June 1, 2009, and the comparable 12-month period
24    in each year thereafter except as provided in item (6) of
25    this subsection (a).

 

 

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1        (3) The quantity of renewable energy resources shall be
2    in amounts at least equal to the annual percentages set
3    forth in item (1) of subsection (c) of Section 1-75 of the
4    Illinois Power Agency Act. At least 60% of the renewable
5    energy resources procured pursuant to items (1) through (3)
6    of subsection (b) of this Section shall come from wind
7    generation and, starting June 1, 2015, at least 6% of the
8    renewable energy resources procured pursuant to items (1)
9    through (3) of subsection (b) of this Section shall come
10    from solar photovoltaics. If, in any given year, an
11    alternative retail electric supplier does not purchase at
12    least these levels of renewable energy resources, then the
13    alternative retail electric supplier shall make
14    alternative compliance payments, as described in
15    subsection (d) of this Section.
16        (4) The quantity and source of renewable energy
17    resources shall be independently verified through the PJM
18    Environmental Information System Generation Attribute
19    Tracking System (PJM-GATS) or the Midwest Renewable Energy
20    Tracking System (M-RETS), which shall document the
21    location of generation, resource type, month, and year of
22    generation for all qualifying renewable energy resources
23    that an alternative retail electric supplier uses to comply
24    with this Section. No later than June 1, 2009, the Illinois
25    Power Agency shall provide PJM-GATS, M-RETS, and
26    alternative retail electric suppliers with all information

 

 

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1    necessary to identify resources located in Illinois,
2    within states that adjoin Illinois or within portions of
3    the PJM and MISO footprint in the United States that
4    qualify under the definition of renewable energy resources
5    in Section 1-10 of the Illinois Power Agency Act for
6    compliance with this Section 16-115D. Alternative retail
7    electric suppliers shall not be subject to the requirements
8    in item (3) of subsection (c) of Section 1-75 of the
9    Illinois Power Agency Act.
10        (5) All renewable energy credits used to comply with
11    this Section shall be permanently retired.
12        (6) The required procurement of renewable energy
13    resources by an alternative retail electric supplier shall
14    apply to all metered electricity delivered to Illinois
15    retail customers by the alternative retail electric
16    supplier pursuant to contracts executed or extended after
17    March 15, 2009.
18    (b) Until May 31, 2012, an An alternative retail electric
19supplier shall comply with the renewable energy portfolio
20standards by making an alternative compliance payment, as
21described in subsection (d) of this Section, to cover at least
22one-half of the alternative retail electric supplier's
23compliance obligation and any one or combination of the
24following means to cover the remainder of the alternative
25retail electric supplier's compliance obligation:
26        (1) Generating electricity using renewable energy

 

 

09700SB1653ham001- 190 -LRB097 05721 ASK 56016 a

1    resources identified pursuant to item (4) of subsection (a)
2    of this Section.
3        (2) Purchasing electricity generated using renewable
4    energy resources identified pursuant to item (4) of
5    subsection (a) of this Section through an energy contract.
6        (3) Purchasing renewable energy credits from renewable
7    energy resources identified pursuant to item (4) of
8    subsection (a) of this Section.
9        (4) Making an alternative compliance payment as
10    described in subsection (d) of this Section.
11    (c) Use of renewable energy credits.
12        (1) Renewable energy credits that are not used by an
13    alternative retail electric supplier to comply with a
14    renewable portfolio standard in a compliance year may be
15    banked and carried forward up to 2 12-month compliance
16    periods after the compliance period in which the credit was
17    generated for the purpose of complying with a renewable
18    portfolio standard in those 2 subsequent compliance
19    periods. For the 2009-2010 and 2010-2011 compliance
20    periods, an alternative retail electric supplier may use
21    renewable credits generated after December 31, 2008 and
22    before June 1, 2009 to comply with this Section.
23        (2) An alternative retail electric supplier is
24    responsible for demonstrating that a renewable energy
25    credit used to comply with a renewable portfolio standard
26    is derived from a renewable energy resource and that the

 

 

09700SB1653ham001- 191 -LRB097 05721 ASK 56016 a

1    alternative retail electric supplier has not used, traded,
2    sold, or otherwise transferred the credit.
3        (3) The same renewable energy credit may be used by an
4    alternative retail electric supplier to comply with a
5    federal renewable portfolio standard and a renewable
6    portfolio standard established under this Act. An
7    alternative retail electric supplier that uses a renewable
8    energy credit to comply with a renewable portfolio standard
9    imposed by any other state may not use the same credit to
10    comply with a renewable portfolio standard established
11    under this Act.
12    (d) Alternative compliance payments.
13        (1) The Commission shall establish and post on its
14    website, within 5 business days after entering an order
15    approving a procurement plan pursuant to Section 1-75 of
16    the Illinois Power Agency Act, maximum alternative
17    compliance payment rates, expressed on a per kilowatt-hour
18    basis, that will be applicable in the first compliance
19    period following the plan approval. A separate maximum
20    alternative compliance payment rate shall be established
21    for the service territory of each electric utility that is
22    subject to subsection (c) of Section 1-75 of the Illinois
23    Power Agency Act. Each maximum alternative compliance
24    payment rate shall be equal to the maximum allowable annual
25    estimated average net increase due to the costs of the
26    utility's purchase of renewable energy resources included

 

 

09700SB1653ham001- 192 -LRB097 05721 ASK 56016 a

1    in the amounts paid by eligible retail customers in
2    connection with electric service, as described in item (2)
3    of subsection (c) of Section 1-75 of the Illinois Power
4    Agency Act for the compliance period, and as established in
5    the approved procurement plan. Following each procurement
6    event through which renewable energy resources are
7    purchased for one or more of these utilities for the
8    compliance period, the Commission shall establish and post
9    on its website estimates of the alternative compliance
10    payment rates, expressed on a per kilowatt-hour basis, that
11    shall apply for that compliance period. Posting of the
12    estimates shall occur no later than 10 business days
13    following the procurement event, however, the Commission
14    shall not be required to establish and post such estimates
15    more often than once per calendar month. By July 1 of each
16    year, the Commission shall establish and post on its
17    website the actual alternative compliance payment rates
18    for the preceding compliance year. For compliance years
19    beginning prior to June 1, 2014, each alternative
20    compliance payment rate shall be equal to the total amount
21    of dollars that the utility contracted to spend on
22    renewable resources, excepting the additional incremental
23    cost attributable to solar resources, for the compliance
24    period divided by the forecasted load of eligible retail
25    customers, at the customers' meters, as previously
26    established in the Commission-approved procurement plan

 

 

09700SB1653ham001- 193 -LRB097 05721 ASK 56016 a

1    for that compliance year. For compliance years commencing
2    on or after June 1, 2014, each alternative compliance
3    payment rate shall be equal to the total amount of dollars
4    that the utility contracted to spend on all renewable
5    resources for the compliance period divided by the
6    forecasted load of eligible retail customers, at the
7    customers' meters, as previously established in the
8    Commission-approved procurement plan for that compliance
9    year. The actual alternative compliance payment rates may
10    not exceed the maximum alternative compliance payment
11    rates established for the compliance period. For purposes
12    of this subsection (d), the term "eligible retail
13    customers" has the same meaning as found in Section
14    16-111.5 of this Act.
15        (2) In any given compliance year, an alternative retail
16    electric supplier may elect to use alternative compliance
17    payments to comply with all or a part of the applicable
18    renewable portfolio standard. In the event that an
19    alternative retail electric supplier elects to make
20    alternative compliance payments to comply with all or a
21    part of the applicable renewable portfolio standard, such
22    payments shall be made by September 1, 2010 for the period
23    of June 1, 2009 to May 1, 2010 and by September 1 of each
24    year thereafter for the subsequent compliance period, in
25    the manner and form as determined by the Commission. Any
26    election by an alternative retail electric supplier to use

 

 

09700SB1653ham001- 194 -LRB097 05721 ASK 56016 a

1    alternative compliance payments is subject to review by the
2    Commission under subsection (e) of this Section.
3        (3) An alternative retail electric supplier's
4    alternative compliance payments shall be computed
5    separately for each electric utility's service territory
6    within which the alternative retail electric supplier
7    provided retail service during the compliance period,
8    provided that the electric utility was subject to
9    subsection (c) of Section 1-75 of the Illinois Power Agency
10    Act. For each service territory, the alternative retail
11    electric supplier's alternative compliance payment shall
12    be equal to (i) the actual alternative compliance payment
13    rate established in item (1) of this subsection (d),
14    multiplied by (ii) the actual amount of metered electricity
15    delivered by the alternative retail electric supplier to
16    retail customers within the service territory during the
17    compliance period, multiplied by (iii) the result of one
18    minus the ratios of the quantity of renewable energy
19    resources used by the alternative retail electric supplier
20    to comply with the requirements of this Section within the
21    service territory to the product of the percentage of
22    renewable energy resources required under item (3) of
23    subsection (a) of this Section and the actual amount of
24    metered electricity delivered by the alternative retail
25    electric supplier to retail customers within the service
26    territory during the compliance period.

 

 

09700SB1653ham001- 195 -LRB097 05721 ASK 56016 a

1        (4) All alternative compliance payments by alternative
2    retail electric suppliers shall be deposited in the
3    Illinois Power Agency Renewable Energy Resources Fund and
4    used to purchase renewable energy credits, in accordance
5    with Section 1-56 of the Illinois Power Agency Act.
6        (5) The Commission, in consultation with the Illinois
7    Power Agency, shall establish a process or proceeding to
8    consider the impact of a federal renewable portfolio
9    standard, if enacted, on the operation of the alternative
10    compliance mechanism, which shall include, but not be
11    limited to, developing, to the extent permitted by the
12    applicable federal statute, an appropriate methodology to
13    apportion renewable energy credits retired as a result of
14    alternative compliance payments made in accordance with
15    this Section. The Commission shall commence any such
16    process or proceeding within 35 days after enactment of a
17    federal renewable portfolio standard.
18    (e) Each alternative retail electric supplier shall, by
19September 1, 2010 and by September 1 of each year thereafter,
20prepare and submit to the Commission a report, in a format to
21be specified by the Commission on or before December 31, 2009,
22that provides information certifying compliance by the
23alternative retail electric supplier with this Section,
24including copies of all PJM-GATS and M-RETS reports, and
25documentation relating to banking, retiring renewable energy
26credits, and any other information that the Commission

 

 

09700SB1653ham001- 196 -LRB097 05721 ASK 56016 a

1determines necessary to ensure compliance with this Section. An
2alternative retail electric supplier may file commercially or
3financially sensitive information or trade secrets with the
4Commission as provided under the rules of the Commission. To be
5filed confidentially, the information shall be accompanied by
6an affidavit that sets forth both the reasons for the
7confidentiality and a public synopsis of the information.
8    (f) The Commission may initiate a contested case to review
9allegations that the alternative retail electric supplier has
10violated this Section, including an order issued or rule
11promulgated under this Section. In any such proceeding, the
12alternative retail electric supplier shall have the burden of
13proof. If the Commission finds, after notice and hearing, that
14an alternative retail electric supplier has violated this
15Section, then the Commission shall issue an order requiring the
16alternative retail electric supplier to:
17        (1) immediately comply with this Section; and
18        (2) if the violation involves a failure to procure the
19    requisite quantity of renewable energy resources or pay the
20    applicable alternative compliance payment by the annual
21    deadline, the Commission shall require the alternative
22    retail electric supplier to double the applicable
23    alternative compliance payment that would otherwise be
24    required to bring the alternative retail electric supplier
25    into compliance with this Section.
26    If an alternative retail electric supplier fails to comply

 

 

09700SB1653ham001- 197 -LRB097 05721 ASK 56016 a

1with the renewable energy resource portfolio requirement in
2this Section more than once in a 5-year period, then the
3Commission shall revoke the alternative electric supplier's
4certificate of service authority. The Commission shall not
5accept an application for a certificate of service authority
6from an alternative retail electric supplier that has lost
7certification under this subsection (f), or any corporate
8affiliate thereof, for at least one year after the date of
9revocation.
10    (g) All of the provisions of this Section apply to electric
11utilities operating outside their service area except under
12item (2) of subsection (a) of this Section the quantity of
13renewable energy resources shall be measured as a percentage of
14the actual amount of electricity (megawatt-hours) supplied in
15the State outside of the utility's service territory during the
1612-month period June 1 through May 31, commencing June 1, 2009,
17and the comparable 12-month period in each year thereafter
18except as provided in item (6) of subsection (a) of this
19Section.
20    If any such utility fails to procure the requisite quantity
21of renewable energy resources by the annual deadline, then the
22Commission shall require the utility to double the alternative
23compliance payment that would otherwise be required to bring
24the utility into compliance with this Section.
25    If any such utility fails to comply with the renewable
26energy resource portfolio requirement in this Section more than

 

 

09700SB1653ham001- 198 -LRB097 05721 ASK 56016 a

1once in a 5-year period, then the Commission shall order the
2utility to cease all sales outside of the utility's service
3territory for a period of at least one year.
4    (h) The provisions of this Section and the provisions of
5subsection (d) of Section 16-115 of this Act relating to
6procurement of renewable energy resources shall not apply to an
7alternative retail electric supplier that operates a combined
8heat and power system in this State or that has a corporate
9affiliate that operates such a combined heat and power system
10in this State that supplies electricity primarily to or for the
11benefit of: (i) facilities owned by the supplier, its
12subsidiary, or other corporate affiliate; (ii) facilities
13electrically integrated with the electrical system of
14facilities owned by the supplier, its subsidiary, or other
15corporate affiliate; or (iii) facilities that are adjacent to
16the site on which the combined heat and power system is
17located.
18    (i) The obligations specified in this Section of
19alternative electric suppliers and electric utilities
20operating outside their service territories to procure
21renewable energy resources, make alternative compliance
22payments, and file annual reports, and the obligations of the
23Commission to determine and post alternative compliance
24payment rates, shall terminate effective May 31, 2012, provided
25that alternative electric suppliers and electric utilities
26operating outside their service territories shall be obligated

 

 

09700SB1653ham001- 199 -LRB097 05721 ASK 56016 a

1to make all alternative compliance payments that they were
2obligated to pay for periods through and including May 31,
32012, but were not paid as of that date and to file all
4required reports for periods prior to June 1, 2012. The
5Commission shall continue to enforce the payment of unpaid
6alternative compliance payments after May 31, 2012 in
7accordance with subsections (f) and (g) of this Section. All
8alternative compliance payments made after May 31, 2012 shall
9be deposited in the Illinois Power Agency Renewable Energy
10Resources Fund and used to purchase renewable energy credits,
11in accordance with Section 1-56 of the Illinois Power Agency
12Act.
13(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
1496-1437, eff. 8-17-10.)
 
15    (220 ILCS 5/16-116)
16    Sec. 16-116. Commission oversight of electric utilities
17serving retail customers outside their service areas or
18providing competitive, non-tariffed services.
19    (a) An electric utility that has a tariff on file for
20delivery services may, without regard to any otherwise
21applicable tariffs on file, provide electric power and energy
22to one or more retail customers located outside its service
23area, but only to the extent (i) such retail customer (A) is
24eligible for delivery services under any delivery services
25tariff filed with the Commission by the electric utility in

 

 

09700SB1653ham001- 200 -LRB097 05721 ASK 56016 a

1whose service area the retail customer is located and (B) has
2either elected to take such delivery services or has paid or
3contracted to pay the charges specified in Sections 16-108 and
416-114, or (ii) if such retail customer is served by a
5municipal system or electric cooperative, the customer is
6eligible for delivery services under the terms and conditions
7for such service established by the municipal system or
8electric cooperative serving that customer.
9    (b) An electric utility may offer any competitive service
10to any customer or group of customers without filing contracts
11with or seeking approval of the Commission, notwithstanding any
12rule or regulation that would require such approval. The
13Commission shall not increase or decrease the prices, and may
14not alter or add to the terms and conditions for the utility's
15competitive services, from those agreed to by the electric
16utility and the customer or customers. Non-tariffed,
17competitive services shall not be subject to the provisions of
18the Electric Supplier Act or to Articles V, VII, VIII or IX of
19the Act, except to the extent that any provisions of such
20Articles are made applicable to alternative retail electric
21suppliers pursuant to Sections 16-115 and 16-115A, but shall be
22subject to the provisions of subsections (b) through (g) of
23Section 16-115A, and Section 16-115B to the same extent such
24provisions are applicable to the services provided by
25alternative retail electric suppliers.
26    (c) Electric utilities serving retail customers outside

 

 

09700SB1653ham001- 201 -LRB097 05721 ASK 56016 a

1their service areas shall be subject to the requirements of
2paragraph (5) of subsection (d) of Section 16-115 of the Public
3Utilities Act, except that the numerators referred to in that
4subsection (d) shall be the utility's retail market sales of
5electricity (expressed in kilowatthours sold) in the State
6outside of the utility's service territory in the prior month.
7(Source: P.A. 95-1027, eff. 6-1-09.)
 
8    Section 900. Severability. The provisions of this Act are
9severable under Section 1.31 of the Statute on Statutes.
 
10    Section 999. Effective date. This Act takes effect upon
11becoming law.".