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Full Text of HB1943  97th General Assembly

HB1943 97TH GENERAL ASSEMBLY

  
  

 


 
97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1943

 

Introduced , by Rep. Ann Williams

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3855/1-10
20 ILCS 3855/1-56
20 ILCS 3855/1-75

    Amends the Illinois Power Agency Act. Defines "distributed renewable energy generation device". In provisions concerning the Agency's procurement of renewable energy resources and in provisions concerning renewable portfolio standards, provides that at least the following percentages shall come from distributed renewable energy generation devices: 0.5% by June 1, 2013, 0.75% by June 1, 2014, and 1% by June 1, 2015 and thereafter. Further provides that half of the renewable energy resources procured from distributed renewable energy generation shall come from devices of less than 25 kilowatts in nameplate capacity and the other half from distributed renewable energy generation devices of greater than or equal to 25 kilowatts and less than or equal to 2,000 kilowatts in nameplate capacity. Provides that renewable energy resources procured from distributed generation devices may also count towards the required percentages for wind and solar photovoltaics. Provides that procurement of renewable energy resources from distributed renewable energy generation devices shall be done on an annual basis through multi-year contracts of no less than 5 years. Provides that the Agency shall take certain actions, if in any given year, funds are insufficient to cover the costs of complying with the target procurement of renewable energy resources in the required proportionate amounts. Makes other changes.


LRB097 08923 ASK 49055 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1943LRB097 08923 ASK 49055 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Power Agency Act is amended by
5changing Sections 1-10, 1-56, and 1-75 as follows:
 
6    (20 ILCS 3855/1-10)
7    Sec. 1-10. Definitions.
8    "Agency" means the Illinois Power Agency.
9    "Agency loan agreement" means any agreement pursuant to
10which the Illinois Finance Authority agrees to loan the
11proceeds of revenue bonds issued with respect to a project to
12the Agency upon terms providing for loan repayment installments
13at least sufficient to pay when due all principal of, interest
14and premium, if any, on those revenue bonds, and providing for
15maintenance, insurance, and other matters in respect of the
16project.
17    "Authority" means the Illinois Finance Authority.
18    "Clean coal facility" means an electric generating
19facility that uses primarily coal as a feedstock and that
20captures and sequesters carbon emissions at the following
21levels: at least 50% of the total carbon emissions that the
22facility would otherwise emit if, at the time construction
23commences, the facility is scheduled to commence operation

 

 

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

 

 

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

 

 

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1    "Department" means the Department of Commerce and Economic
2Opportunity.
3    "Director" means the Director of the Illinois Power Agency.
4    "Demand-response" means measures that decrease peak
5electricity demand or shift demand from peak to off-peak
6periods.
7    "Distributed renewable energy generation device" means a
8device that is:
9        (1) powered by wind, solar thermal energy,
10    photovoltaic cells and panels, biodiesel, crops and
11    untreated and unadulterated organic waste biomass, tree
12    waste, and hydropower that does not involve new
13    construction or significant expansion of hydropower dams;
14        (2) interconnected at the distribution system level of
15    either an electric utility as defined in this Section, an
16    alternative retail electric supplier as defined in Section
17    16-102 of the Public Utilities Act, a municipal utility as
18    defined in Section 3-105 of the Public Utilities Act, or a
19    rural electric cooperative as defined in Section 3-119 of
20    the Public Utilities Act; and
21        (3) located on the customer side of the customer's
22    electric meter and is generally used to offset that
23    customer's electricity load.
24    "Energy efficiency" means measures that reduce the amount
25of electricity or natural gas required to achieve a given end
26use.

 

 

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

 

 

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

 

 

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1    "Sequester" means permanent storage of carbon dioxide by
2injecting it into a saline aquifer, a depleted gas reservoir,
3or an oil reservoir, directly or through an enhanced oil
4recovery process that may involve intermediate storage in a
5salt dome.
6    "Servicing agreement" means (i) in the case of an electric
7utility, an agreement between the owner of a clean coal
8facility and such electric utility, which agreement shall have
9terms and conditions meeting the requirements of paragraph (3)
10of subsection (d) of Section 1-75, and (ii) in the case of an
11alternative retail electric supplier, an agreement between the
12owner of a clean coal facility and such alternative retail
13electric supplier, which agreement shall have terms and
14conditions meeting the requirements of Section 16-115(d)(5) of
15the Public Utilities Act.
16    "Substitute natural gas" or "SNG" means a gas manufactured
17by gasification of hydrocarbon feedstock, which is
18substantially interchangeable in use and distribution with
19conventional natural gas.
20    "Total resource cost test" or "TRC test" means a standard
21that is met if, for an investment in energy efficiency or
22demand-response measures, the benefit-cost ratio is greater
23than one. The benefit-cost ratio is the ratio of the net
24present value of the total benefits of the program to the net
25present value of the total costs as calculated over the
26lifetime of the measures. A total resource cost test compares

 

 

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1the sum of avoided electric utility costs, representing the
2benefits that accrue to the system and the participant in the
3delivery of those efficiency measures, as well as other
4quantifiable societal benefits, including avoided natural gas
5utility costs, to the sum of all incremental costs of end-use
6measures that are implemented due to the program (including
7both utility and participant contributions), plus costs to
8administer, deliver, and evaluate each demand-side program, to
9quantify the net savings obtained by substituting the
10demand-side program for supply resources. In calculating
11avoided costs of power and energy that an electric utility
12would otherwise have had to acquire, reasonable estimates shall
13be included of financial costs likely to be imposed by future
14regulations and legislation on emissions of greenhouse gases.
15(Source: P.A. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09;
1695-1027, eff. 6-1-09; 96-33, eff. 7-10-09; 96-159, eff.
178-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10.)
 
18    (20 ILCS 3855/1-56)
19    Sec. 1-56. Illinois Power Agency Renewable Energy
20Resources Fund.
21    (a) The Illinois Power Agency Renewable Energy Resources
22Fund is created as a special fund in the State treasury.
23    (b) The Illinois Power Agency Renewable Energy Resources
24Fund shall be administered by the Agency to procure renewable
25energy resources. Prior to June 1, 2011, resources procured

 

 

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1pursuant to this Section shall be procured from facilities
2located in Illinois, provided the resources are available from
3those facilities. If resources are not available in Illinois,
4then they shall be procured in states that adjoin Illinois. If
5resources are not available in Illinois or in states that
6adjoin Illinois, then they may be purchased elsewhere.
7Beginning June 1, 2011, resources procured pursuant to this
8Section shall be procured from facilities located in Illinois
9or states that adjoin Illinois. If resources are not available
10in Illinois or in states that adjoin Illinois, then they may be
11procured elsewhere. To the extent available, at least 75% of
12these renewable energy resources shall come from wind
13generation. Of the renewable energy resources procured
14pursuant to this Section at least the following specified
15percentages shall come from photovoltaics on the following
16schedule: 0.5% by June 1, 2012; 1.5% by June 1, 2013; 3% by
17June 1, 2014; and 6% by June 1, 2015 and thereafter. Of the
18renewable energy resources procured pursuant to this Section at
19least the following percentages shall come from distributed
20renewable energy generation devices: 0.5% by June 1, 2013,
210.75% by June 1, 2014, and 1% by June 1, 2015 and thereafter.
22Half of the renewable energy resources procured from
23distributed renewable energy generation shall come from
24devices of less than 25 kilowatts in nameplate capacity, and
25half from distributed renewable energy generation devices of
26greater than or equal to 25 kilowatts and less than or equal to

 

 

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12,000 kilowatts in nameplate capacity. Renewable energy
2resources procured from distributed generation devices may
3also count towards the required percentages for wind and solar
4photovoltaics. Procurement of renewable energy resources from
5distributed renewable energy generation devices shall be done
6on an annual basis through multi-year contracts of no less than
75 years.
8    (c) The Agency shall procure renewable energy resources at
9least once each year in conjunction with a procurement event
10for electric utilities required to comply with Section 1-75 of
11the Act and shall, whenever possible, enter into long-term
12contracts on an annual basis for a portion of the incremental
13requirement for the given procurement year.
14    (d) The price paid to procure renewable energy credits
15using monies from the Illinois Power Agency Renewable Energy
16Resources Fund shall not exceed the winning bid prices paid for
17like resources procured for electric utilities required to
18comply with Section 1-75 of this Act.
19    (e) All renewable energy credits procured using monies from
20the Illinois Power Agency Renewable Energy Resources Fund shall
21be permanently retired.
22    (f) The procurement process described in this Section is
23exempt from the requirements of the Illinois Procurement Code,
24pursuant to Section 20-10 of that Code.
25    (g) All disbursements from the Illinois Power Agency
26Renewable Energy Resources Fund shall be made only upon

 

 

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1warrants of the Comptroller drawn upon the Treasurer as
2custodian of the Fund upon vouchers signed by the Director or
3by the person or persons designated by the Director for that
4purpose. The Comptroller is authorized to draw the warrant upon
5vouchers so signed. The Treasurer shall accept all warrants so
6signed and shall be released from liability for all payments
7made on those warrants. If in any given year, funds as defined
8in this Section are insufficient to cover the costs of
9complying with the target procurement of renewable energy
10resources in the proportionate amounts as defined in subsection
11(b) of this Section, then the Agency shall first honor the
12long-term contractual agreements for renewable energy
13resources in order of seniority and shall then procure
14additional renewable energy resources in proportion to the
15percentages listed in subsection (b) of this Section until the
16funds are exhausted. If funds are insufficient to meet all of
17the previously executed long-term contractual agreements, then
18the Agency shall honor the oldest contracts to meet percentages
19listed in subsection (b) of this Section as closely as
20possible.
21    (h) The Illinois Power Agency Renewable Energy Resources
22Fund shall not be subject to sweeps, administrative charges, or
23chargebacks, including, but not limited to, those authorized
24under Section 8h of the State Finance Act, that would in any
25way result in the transfer of any funds from this Fund to any
26other fund of this State or in having any such funds utilized

 

 

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1for any purpose other than the express purposes set forth in
2this Section.
3(Source: P.A. 96-159, eff. 8-10-09; 96-1000, eff. 7-2-10;
496-1437, eff. 8-17-10.)
 
5    (20 ILCS 3855/1-75)
6    Sec. 1-75. Planning and Procurement Bureau. The Planning
7and Procurement Bureau has the following duties and
8responsibilities:
9        (a) The Planning and Procurement Bureau shall each
10    year, beginning in 2008, develop procurement plans and
11    conduct competitive procurement processes in accordance
12    with the requirements of Section 16-111.5 of the Public
13    Utilities Act for the eligible retail customers of electric
14    utilities that on December 31, 2005 provided electric
15    service to at least 100,000 customers in Illinois. For the
16    purposes of this Section, the term "eligible retail
17    customers" has the same definition as found in Section
18    16-111.5(a) of the Public Utilities Act.
19            (1) The Agency shall each year, beginning in 2008,
20        as needed, issue a request for qualifications for
21        experts or expert consulting firms to develop the
22        procurement plans in accordance with Section 16-111.5
23        of the Public Utilities Act. In order to qualify an
24        expert or expert consulting firm must have:
25                (A) direct previous experience assembling

 

 

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

 

 

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1                (B) an advanced degree in economics,
2            mathematics, engineering, or a related area of
3            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
9            transmission organizations;
10                (E) expertise in credit and contract
11            protocols;
12                (F) adequate resources to perform and fulfill
13            the required functions and responsibilities; and
14                (G) the absence of a conflict of interest and
15            inappropriate bias for or against potential
16            bidders or the affected electric utilities.
17            (3) The Agency shall provide affected utilities
18        and other interested parties with the lists of
19        qualified experts or expert consulting firms
20        identified through the request for qualifications
21        processes that are under consideration to develop the
22        procurement plans and to serve as the procurement
23        administrator. The Agency shall also provide each
24        qualified expert's or expert consulting firm's
25        response to the request for qualifications. All
26        information provided under this subparagraph shall

 

 

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

 

 

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1        develop a procurement plan for the affected utilities
2        and to serve as procurement administrator.
3            (5) The Agency shall select an expert or expert
4        consulting firm to develop procurement plans based on
5        the proposals submitted and shall award one-year
6        contracts to those selected with an option for the
7        Agency for a one-year renewal.
8            (6) The Agency shall select an expert or expert
9        consulting firm, with approval of the Commission, to
10        serve as procurement administrator based on the
11        proposals submitted. If the Commission rejects, within
12        5 days, the Agency's selection, the Agency shall submit
13        another recommendation within 3 days based on the
14        proposals submitted. The Agency shall award a one-year
15        contract to the expert or expert consulting firm so
16        selected with Commission approval with an option for
17        the Agency for a one-year renewal.
18        (b) The experts or expert consulting firms retained by
19    the Agency shall, as appropriate, prepare procurement
20    plans, and conduct a competitive procurement process as
21    prescribed in Section 16-111.5 of the Public Utilities Act,
22    to ensure adequate, reliable, affordable, efficient, and
23    environmentally sustainable electric service at the lowest
24    total cost over time, taking into account any benefits of
25    price stability, for eligible retail customers of electric
26    utilities that on December 31, 2005 provided electric

 

 

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1    service to at least 100,000 customers in the State of
2    Illinois.
3        (c) Renewable portfolio standard.
4            (1) The procurement plans shall include
5        cost-effective renewable energy resources. A minimum
6        percentage of each utility's total supply to serve the
7        load of eligible retail customers, as defined in
8        Section 16-111.5(a) of the Public Utilities Act,
9        procured for each of the following years shall be
10        generated from cost-effective renewable energy
11        resources: at least 2% by June 1, 2008; at least 4% by
12        June 1, 2009; at least 5% by June 1, 2010; at least 6%
13        by June 1, 2011; at least 7% by June 1, 2012; at least
14        8% by June 1, 2013; at least 9% by June 1, 2014; at
15        least 10% by June 1, 2015; and increasing by at least
16        1.5% each year thereafter to at least 25% by June 1,
17        2025. To the extent that it is available, at least 75%
18        of the renewable energy resources used to meet these
19        standards shall come from wind generation and,
20        beginning on June 1, 2011, at least the following
21        percentages of the renewable energy resources used to
22        meet these standards shall come from photovoltaics on
23        the following schedule: 0.5% by June 1, 2012, 1.5% by
24        June 1, 2013; 3% by June 1, 2014; and 6% by June 1,
25        2015 and thereafter. Of the renewable energy resources
26        procured pursuant to this Section at least the

 

 

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1        following percentages shall come from distributed
2        renewable energy generation devices: 0.5% by June 1,
3        2013, 0.75% by June 1, 2014, and 1% by June 1, 2015 and
4        thereafter. Half of the renewable energy resources
5        procured from distributed renewable energy generation
6        shall come from devices of less than 25 kilowatts in
7        nameplate capacity and the other half from distributed
8        renewable energy generation devices of greater than or
9        equal to 25 kilowatts and less than or equal to 2,000
10        kilowatts in nameplate capacity. Renewable energy
11        resources procured from distributed generation devices
12        may also count towards the required percentages for
13        wind and solar photovoltaics. Procurement of renewable
14        energy resources from distributed renewable energy
15        generation devices shall be done on an annual basis
16        through multi-year contracts of no less than 5 years.
17        For purposes of this subsection (c), "cost-effective"
18        means that the costs of procuring renewable energy
19        resources do not cause the limit stated in paragraph
20        (2) of this subsection (c) to be exceeded and do not
21        exceed benchmarks based on market prices for renewable
22        energy resources in the region, which shall be
23        developed by the procurement administrator, in
24        consultation with the Commission staff, Agency staff,
25        and the procurement monitor and shall be subject to
26        Commission review and approval. If the total of

 

 

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1        renewable energy resources procured pursuant to the
2        procurement plan for any single year needs to be
3        reduced by an amount necessary to not surpass the
4        limits on annual estimated average net increase paid by
5        eligible retail customers as outlined in paragraph (2)
6        of this subsection (c), then the Agency shall first
7        honor long-term contractual agreements for renewable
8        energy resources in order of seniority and shall then
9        procure additional renewable energy resources in
10        proportion to the percentages listed in this paragraph
11        (1) until funds are exhausted. If funds are
12        insufficient to meet all of the previously executed
13        long-term contractual agreements, then the Agency
14        shall honor the oldest contracts to meet percentages
15        listed in this paragraph (1) as closely as possible.
16            (2) For purposes of this subsection (c), the
17        required procurement of cost-effective renewable
18        energy resources for a particular year shall be
19        measured as a percentage of the actual amount of
20        electricity (megawatt-hours) supplied by the electric
21        utility to eligible retail customers in the planning
22        year ending immediately prior to the procurement. For
23        purposes of this subsection (c), the amount paid per
24        kilowatthour means the total amount paid for electric
25        service expressed on a per kilowatthour basis. For
26        purposes of this subsection (c), the total amount paid

 

 

HB1943- 20 -LRB097 08923 ASK 49055 b

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

 

 

HB1943- 21 -LRB097 08923 ASK 49055 b

1            customers during the year ending May 31, 2010 or 2%
2            of the amount paid per kilowatthour by those
3            customers during the year ending May 31, 2007; and
4                (E) thereafter, the amount of renewable energy
5            resources procured pursuant to the procurement
6            plan for any single year shall be reduced by an
7            amount necessary to limit the estimated average
8            net increase due to the cost of these resources
9            included in the amounts paid by eligible retail
10            customers in connection with electric service to
11            no more than the greater of 2.015% of the amount
12            paid per kilowatthour by those customers during
13            the year ending May 31, 2007 or the incremental
14            amount per kilowatthour paid for these resources
15            in 2011.
16            No later than June 30, 2011, the Commission shall
17        review the limitation on the amount of renewable energy
18        resources procured pursuant to this subsection (c) and
19        report to the General Assembly its findings as to
20        whether that limitation unduly constrains the
21        procurement of cost-effective renewable energy
22        resources.
23            (3) Through June 1, 2011, renewable energy
24        resources shall be counted for the purpose of meeting
25        the renewable energy standards set forth in paragraph
26        (1) of this subsection (c) only if they are generated

 

 

HB1943- 22 -LRB097 08923 ASK 49055 b

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

 

 

HB1943- 23 -LRB097 08923 ASK 49055 b

1        established pursuant to subsection (d) of Section
2        16-115D of the Public Utilities Act to its retail
3        customers that take service pursuant to the electric
4        utility's hourly pricing tariff or tariffs. The
5        electric utility shall retain all amounts collected as
6        a result of the application of the alternative
7        compliance payment rate or rates to such customers,
8        and, beginning in 2011, the utility shall include in
9        the information provided under item (1) of subsection
10        (d) of Section 16-111.5 of the Public Utilities Act the
11        amounts collected under the alternative compliance
12        payment rate or rates for the prior year ending May 31.
13        Notwithstanding any limitation on the procurement of
14        renewable energy resources imposed by item (2) of this
15        subsection (c), the Agency shall increase its spending
16        on the purchase of renewable energy resources to be
17        procured by the electric utility for the next plan year
18        by an amount equal to the amounts collected by the
19        utility under the alternative compliance payment rate
20        or rates in the prior year ending May 31.
21    (d) Clean coal portfolio standard.
22        (1) The procurement plans shall include electricity
23    generated using clean coal. Each utility shall enter into
24    one or more sourcing agreements with the initial clean coal
25    facility, as provided in paragraph (3) of this subsection
26    (d), covering electricity generated by the initial clean

 

 

HB1943- 24 -LRB097 08923 ASK 49055 b

1    coal facility representing at least 5% of each utility's
2    total supply to serve the load of eligible retail customers
3    in 2015 and each year thereafter, as described in paragraph
4    (3) of this subsection (d), subject to the limits specified
5    in paragraph (2) of this subsection (d). It is the goal of
6    the State that by January 1, 2025, 25% of the electricity
7    used in the State shall be generated by cost-effective
8    clean coal facilities. For purposes of this subsection (d),
9    "cost-effective" means that the expenditures pursuant to
10    such sourcing agreements do not cause the limit stated in
11    paragraph (2) of this subsection (d) to be exceeded and do
12    not exceed cost-based benchmarks, which shall be developed
13    to assess all expenditures pursuant to such sourcing
14    agreements covering electricity generated by clean coal
15    facilities, other than the initial clean coal facility, by
16    the procurement administrator, in consultation with the
17    Commission staff, Agency staff, and the procurement
18    monitor and shall be subject to Commission review and
19    approval.
20            (A) A utility party to a sourcing agreement shall
21        immediately retire any emission credits that it
22        receives in connection with the electricity covered by
23        such agreement.
24            (B) Utilities shall maintain adequate records
25        documenting the purchases under the sourcing agreement
26        to comply with this subsection (d) and shall file an

 

 

HB1943- 25 -LRB097 08923 ASK 49055 b

1        accounting with the load forecast that must be filed
2        with the Agency by July 15 of each year, in accordance
3        with subsection (d) of Section 16-111.5 of the Public
4        Utilities Act.
5            (C) A utility shall be deemed to have complied with
6        the clean coal portfolio standard specified in this
7        subsection (d) if the utility enters into a sourcing
8        agreement as required by this subsection (d).
9        (2) For purposes of this subsection (d), the required
10    execution of sourcing agreements with the initial clean
11    coal facility 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 agreement's execution. For
16    purposes of this subsection (d), the amount paid per
17    kilowatthour means the total amount paid for electric
18    service expressed on a per kilowatthour basis. For purposes
19    of this subsection (d), the total amount paid for electric
20    service includes without limitation amounts paid for
21    supply, transmission, distribution, surcharges and add-on
22    taxes.
23        Notwithstanding the requirements of this subsection
24    (d), the total amount paid under sourcing agreements with
25    clean coal facilities pursuant to the procurement plan for
26    any given year shall be reduced by an amount necessary to

 

 

HB1943- 26 -LRB097 08923 ASK 49055 b

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

 

 

HB1943- 27 -LRB097 08923 ASK 49055 b

1            limit the estimated average net increase due to the
2            cost of these resources included in the amounts
3            paid by eligible retail customers in connection
4            with electric service to no more than the greater
5            of (i) 2.015% of the amount paid per kilowatthour
6            by those customers during the year ending May 31,
7            2009 or (ii) the incremental amount per
8            kilowatthour paid for these resources in 2013.
9            These requirements may be altered only as provided
10            by statute. No later than June 30, 2015, the
11            Commission shall review the limitation on the
12            total amount paid under sourcing agreements, if
13            any, with clean coal facilities pursuant to this
14            subsection (d) and report to the General Assembly
15            its findings as to whether that limitation unduly
16            constrains the amount of electricity generated by
17            cost-effective clean coal facilities that is
18            covered by sourcing agreements.
19        (3) Initial clean coal facility. In order to promote
20    development of clean coal facilities in Illinois, each
21    electric utility subject to this Section shall execute a
22    sourcing agreement to source electricity from a proposed
23    clean coal facility in Illinois (the "initial clean coal
24    facility") that will have a nameplate capacity of at least
25    500 MW when commercial operation commences, that has a
26    final Clean Air Act permit on the effective date of this

 

 

HB1943- 28 -LRB097 08923 ASK 49055 b

1    amendatory Act of the 95th General Assembly, and that will
2    meet the definition of clean coal facility in Section 1-10
3    of this Act when commercial operation commences. The
4    sourcing agreements with this initial clean coal facility
5    shall be subject to both approval of the initial clean coal
6    facility by the General Assembly and satisfaction of the
7    requirements of paragraph (4) of this subsection (d) and
8    shall be executed within 90 days after any such approval by
9    the General Assembly. The Agency and the Commission shall
10    have authority to inspect all books and records associated
11    with the initial clean coal facility during the term of
12    such a sourcing agreement. A utility's sourcing agreement
13    for electricity produced by the initial clean coal facility
14    shall include:
15            (A) a formula contractual price (the "contract
16        price") approved pursuant to paragraph (4) of this
17        subsection (d), which shall:
18                (i) be determined using a cost of service
19            methodology employing either a level or deferred
20            capital recovery component, based on a capital
21            structure consisting of 45% equity and 55% debt,
22            and a return on equity as may be approved by the
23            Federal Energy Regulatory Commission, which in any
24            case may not exceed the lower of 11.5% or the rate
25            of return approved by the General Assembly
26            pursuant to paragraph (4) of this subsection (d);

 

 

HB1943- 29 -LRB097 08923 ASK 49055 b

1            and
2                (ii) provide that all miscellaneous net
3            revenue, including but not limited to net revenue
4            from the sale of emission allowances, if any,
5            substitute natural gas, if any, grants or other
6            support provided by the State of Illinois or the
7            United States Government, firm transmission
8            rights, if any, by-products produced by the
9            facility, energy or capacity derived from the
10            facility and not covered by a sourcing agreement
11            pursuant to paragraph (3) of this subsection (d) or
12            item (5) of subsection (d) of Section 16-115 of the
13            Public Utilities Act, whether generated from the
14            synthesis gas derived from coal, from SNG, or from
15            natural gas, shall be credited against the revenue
16            requirement for this initial clean coal facility;
17            (B) power purchase provisions, which shall:
18                (i) provide that the utility party to such
19            sourcing agreement shall pay the contract price
20            for electricity delivered under such sourcing
21            agreement;
22                (ii) require delivery of electricity to the
23            regional transmission organization market of the
24            utility that is party to such sourcing agreement;
25                (iii) require the utility party to such
26            sourcing agreement to buy from the initial clean

 

 

HB1943- 30 -LRB097 08923 ASK 49055 b

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

 

 

HB1943- 31 -LRB097 08923 ASK 49055 b

1            facility in each hour with respect to an amount of
2            energy equal to all clean coal energy made
3            available from the initial clean coal facility
4            during such hour times a fraction, the numerator of
5            which is such utility's retail market sales of
6            electricity (expressed in kilowatthours sold) in
7            the utility's service territory in the State
8            during the prior calendar month and the
9            denominator of which is the total retail market
10            sales of electricity (expressed in kilowatthours
11            sold) in the State by utilities during such prior
12            month and the sales of electricity (expressed in
13            kilowatthours sold) in the State by alternative
14            retail electric suppliers during such prior month
15            that are subject to the requirements of this
16            subsection (d) and paragraph (5) of subsection (d)
17            of Section 16-115 of the Public Utilities Act,
18            provided that the amount paid by the utility in any
19            year will be limited by paragraph (2) of this
20            subsection (d);
21                (ii) provide that the utility's payment
22            obligation in respect of the quantity of
23            electricity determined pursuant to the preceding
24            clause (i) shall be limited to an amount equal to
25            (1) the difference between the contract price
26            determined pursuant to subparagraph (A) of

 

 

HB1943- 32 -LRB097 08923 ASK 49055 b

1            paragraph (3) of this subsection (d) and the
2            day-ahead price for electricity delivered to the
3            regional transmission organization market of the
4            utility that is party to such sourcing agreement
5            (or any successor delivery point at which such
6            utility's supply obligations are financially
7            settled on an hourly basis) (the "reference
8            price") on the day preceding the day on which the
9            electricity is delivered to the initial clean coal
10            facility busbar, multiplied by (2) the quantity of
11            electricity determined pursuant to the preceding
12            clause (i); and
13                (iii) not require the utility to take physical
14            delivery of the electricity produced by the
15            facility;
16            (D) general provisions, which shall:
17                (i) specify a term of no more than 30 years,
18            commencing on the commercial operation date of the
19            facility;
20                (ii) provide that utilities shall maintain
21            adequate records documenting purchases under the
22            sourcing agreements entered into to comply with
23            this subsection (d) and shall file an accounting
24            with the load forecast that must be filed with the
25            Agency by July 15 of each year, in accordance with
26            subsection (d) of Section 16-111.5 of the Public

 

 

HB1943- 33 -LRB097 08923 ASK 49055 b

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

 

 

HB1943- 34 -LRB097 08923 ASK 49055 b

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

 

 

HB1943- 35 -LRB097 08923 ASK 49055 b

1            provision. Compliance with the sequestration
2            requirements and offset purchase requirements
3            specified in paragraph (3) of this subsection (d)
4            shall be reviewed annually by an independent
5            expert retained by the owner of the initial clean
6            coal facility, with the advance written approval
7            of the Attorney General. The Commission may, in the
8            course of the review specified in item (vii),
9            reduce the allowable return on equity for the
10            facility if the facility wilfully fails to comply
11            with the carbon capture and sequestration
12            requirements set forth in this item (v);
13                (vi) include limits on, and accordingly
14            provide for modification of, the amount the
15            utility is required to source under the sourcing
16            agreement consistent with paragraph (2) of this
17            subsection (d);
18                (vii) require Commission review: (1) to
19            determine the justness, reasonableness, and
20            prudence of the inputs to the formula referenced in
21            subparagraphs (A)(i) through (A)(iii) of paragraph
22            (3) of this subsection (d), prior to an adjustment
23            in those inputs including, without limitation, the
24            capital structure and return on equity, fuel
25            costs, and other operations and maintenance costs
26            and (2) to approve the costs to be passed through

 

 

HB1943- 36 -LRB097 08923 ASK 49055 b

1            to customers under the sourcing agreement by which
2            the utility satisfies its statutory obligations.
3            Commission review shall occur no less than every 3
4            years, regardless of whether any adjustments have
5            been proposed, and shall be completed within 9
6            months;
7                (viii) limit the utility's obligation to such
8            amount as the utility is allowed to recover through
9            tariffs filed with the Commission, provided that
10            neither the clean coal facility nor the utility
11            waives any right to assert federal pre-emption or
12            any other argument in response to a purported
13            disallowance of recovery costs;
14                (ix) limit the utility's or alternative retail
15            electric supplier's obligation to incur any
16            liability until such time as the facility is in
17            commercial operation and generating power and
18            energy and such power and energy is being delivered
19            to the facility busbar;
20                (x) provide that the owner or owners of the
21            initial clean coal facility, which is the
22            counterparty to such sourcing agreement, shall
23            have the right from time to time to elect whether
24            the obligations of the utility party thereto shall
25            be governed by the power purchase provisions or the
26            contract for differences provisions;

 

 

HB1943- 37 -LRB097 08923 ASK 49055 b

1                (xi) append documentation showing that the
2            formula rate and contract, insofar as they relate
3            to the power purchase provisions, have been
4            approved by the Federal Energy Regulatory
5            Commission pursuant to Section 205 of the Federal
6            Power Act;
7                (xii) provide that any changes to the terms of
8            the contract, insofar as such changes relate to the
9            power purchase provisions, are subject to review
10            under the public interest standard applied by the
11            Federal Energy Regulatory Commission pursuant to
12            Sections 205 and 206 of the Federal Power Act; and
13                (xiii) conform with customary lender
14            requirements in power purchase agreements used as
15            the basis for financing non-utility generators.
16        (4) Effective date of sourcing agreements with the
17    initial clean coal facility. Any proposed sourcing
18    agreement with the initial clean coal facility shall not
19    become effective unless the following reports are prepared
20    and submitted and authorizations and approvals obtained:
21                (i) Facility cost report. The owner of the
22            initial clean coal facility shall submit to the
23            Commission, the Agency, and the General Assembly a
24            front-end engineering and design study, a facility
25            cost report, method of financing (including but
26            not limited to structure and associated costs),

 

 

HB1943- 38 -LRB097 08923 ASK 49055 b

1            and an operating and maintenance cost quote for the
2            facility (collectively "facility cost report"),
3            which shall be prepared in accordance with the
4            requirements of this paragraph (4) of subsection
5            (d) of this Section, and shall provide the
6            Commission and the Agency access to the work
7            papers, relied upon documents, and any other
8            backup documentation related to the facility cost
9            report.
10                (ii) Commission report. Within 6 months
11            following receipt of the facility cost report, the
12            Commission, in consultation with the Agency, shall
13            submit a report to the General Assembly setting
14            forth its analysis of the facility cost report.
15            Such report shall include, but not be limited to, a
16            comparison of the costs associated with
17            electricity generated by the initial clean coal
18            facility to the costs associated with electricity
19            generated by other types of generation facilities,
20            an analysis of the rate impacts on residential and
21            small business customers over the life of the
22            sourcing agreements, and an analysis of the
23            likelihood that the initial clean coal facility
24            will commence commercial operation by and be
25            delivering power to the facility's busbar by 2016.
26            To assist in the preparation of its report, the

 

 

HB1943- 39 -LRB097 08923 ASK 49055 b

1            Commission, in consultation with the Agency, may
2            hire one or more experts or consultants, the costs
3            of which shall be paid for by the owner of the
4            initial clean coal facility. The Commission and
5            Agency may begin the process of selecting such
6            experts or consultants prior to receipt of the
7            facility cost report.
8                (iii) General Assembly approval. The proposed
9            sourcing agreements shall not take effect unless,
10            based on the facility cost report and the
11            Commission's report, the General Assembly enacts
12            authorizing legislation approving (A) the
13            projected price, stated in cents per kilowatthour,
14            to be charged for electricity generated by the
15            initial clean coal facility, (B) the projected
16            impact on residential and small business
17            customers' bills over the life of the sourcing
18            agreements, and (C) the maximum allowable return
19            on equity for the project; and
20                (iv) Commission review. If the General
21            Assembly enacts authorizing legislation pursuant
22            to subparagraph (iii) approving a sourcing
23            agreement, the Commission shall, within 90 days of
24            such enactment, complete a review of such sourcing
25            agreement. During such time period, the Commission
26            shall implement any directive of the General

 

 

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1            Assembly, resolve any disputes between the parties
2            to the sourcing agreement concerning the terms of
3            such agreement, approve the form of such
4            agreement, and issue an order finding that the
5            sourcing agreement is prudent and reasonable.
6    The facility cost report shall be prepared as follows:
7            (A) The facility cost report shall be prepared by
8        duly licensed engineering and construction firms
9        detailing the estimated capital costs payable to one or
10        more contractors or suppliers for the engineering,
11        procurement and construction of the components
12        comprising the initial clean coal facility and the
13        estimated costs of operation and maintenance of the
14        facility. The facility cost report shall include:
15                (i) an estimate of the capital cost of the core
16            plant based on one or more front end engineering
17            and design studies for the gasification island and
18            related facilities. The core plant shall include
19            all civil, structural, mechanical, electrical,
20            control, and safety systems.
21                (ii) an estimate of the capital cost of the
22            balance of the plant, including any capital costs
23            associated with sequestration of carbon dioxide
24            emissions and all interconnects and interfaces
25            required to operate the facility, such as
26            transmission of electricity, construction or

 

 

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1            backfeed power supply, pipelines to transport
2            substitute natural gas or carbon dioxide, potable
3            water supply, natural gas supply, water supply,
4            water discharge, landfill, access roads, and coal
5            delivery.
6            The quoted construction costs shall be expressed
7        in nominal dollars as of the date that the quote is
8        prepared and shall include (1) capitalized financing
9        costs during construction, (2) taxes, insurance, and
10        other owner's costs, and (3) an assumed escalation in
11        materials and labor beyond the date as of which the
12        construction cost quote is expressed.
13            (B) The front end engineering and design study for
14        the gasification island and the cost study for the
15        balance of plant shall include sufficient design work
16        to permit quantification of major categories of
17        materials, commodities and labor hours, and receipt of
18        quotes from vendors of major equipment required to
19        construct and operate the clean coal facility.
20            (C) The facility cost report shall also include an
21        operating and maintenance cost quote that will provide
22        the estimated cost of delivered fuel, personnel,
23        maintenance contracts, chemicals, catalysts,
24        consumables, spares, and other fixed and variable
25        operations and maintenance costs.
26                (a) The delivered fuel cost estimate will be

 

 

HB1943- 42 -LRB097 08923 ASK 49055 b

1            provided by a recognized third party expert or
2            experts in the fuel and transportation industries.
3                (b) The balance of the operating and
4            maintenance cost quote, excluding delivered fuel
5            costs will be developed based on the inputs
6            provided by duly licensed engineering and
7            construction firms performing the construction
8            cost quote, potential vendors under long-term
9            service agreements and plant operating agreements,
10            or recognized third party plant operator or
11            operators.
12                The operating and maintenance cost quote
13            (including the cost of the front end engineering
14            and design study) shall be expressed in nominal
15            dollars as of the date that the quote is prepared
16            and shall include (1) taxes, insurance, and other
17            owner's costs, and (2) an assumed escalation in
18            materials and labor beyond the date as of which the
19            operating and maintenance cost quote is expressed.
20            (D) The facility cost report shall also include (i)
21        an analysis of the initial clean coal facility's
22        ability to deliver power and energy into the applicable
23        regional transmission organization markets and (ii) an
24        analysis of the expected capacity factor for the
25        initial clean coal facility.
26            (E) Amounts paid to third parties unrelated to the

 

 

HB1943- 43 -LRB097 08923 ASK 49055 b

1        owner or owners of the initial clean coal facility to
2        prepare the core plant construction cost quote,
3        including the front end engineering and design study,
4        and the operating and maintenance cost quote will be
5        reimbursed through Coal Development Bonds.
6        (5) Re-powering and retrofitting coal-fired power
7    plants previously owned by Illinois utilities to qualify as
8    clean coal facilities. During the 2009 procurement
9    planning process and thereafter, the Agency and the
10    Commission shall consider sourcing agreements covering
11    electricity generated by power plants that were previously
12    owned by Illinois utilities and that have been or will be
13    converted into clean coal facilities, as defined by Section
14    1-10 of this Act. Pursuant to such procurement planning
15    process, the owners of such facilities may propose to the
16    Agency sourcing agreements with utilities and alternative
17    retail electric suppliers required to comply with
18    subsection (d) of this Section and item (5) of subsection
19    (d) of Section 16-115 of the Public Utilities Act, covering
20    electricity generated by such facilities. In the case of
21    sourcing agreements that are power purchase agreements,
22    the contract price for electricity sales shall be
23    established on a cost of service basis. In the case of
24    sourcing agreements that are contracts for differences,
25    the contract price from which the reference price is
26    subtracted shall be established on a cost of service basis.

 

 

HB1943- 44 -LRB097 08923 ASK 49055 b

1    The Agency and the Commission may approve any such utility
2    sourcing agreements that do not exceed cost-based
3    benchmarks developed by the procurement administrator, in
4    consultation with the Commission staff, Agency staff and
5    the procurement monitor, subject to Commission review and
6    approval. The Commission shall have authority to inspect
7    all books and records associated with these clean coal
8    facilities during the term of any such contract.
9        (6) Costs incurred under this subsection (d) or
10    pursuant to a contract entered into under this subsection
11    (d) shall be deemed prudently incurred and reasonable in
12    amount and the electric utility shall be entitled to full
13    cost recovery pursuant to the tariffs filed with the
14    Commission.
15        (e) The draft procurement plans are subject to public
16    comment, as required by Section 16-111.5 of the Public
17    Utilities Act.
18        (f) The Agency shall submit the final procurement plan
19    to the Commission. The Agency shall revise a procurement
20    plan if the Commission determines that it does not meet the
21    standards set forth in Section 16-111.5 of the Public
22    Utilities Act.
23        (g) The Agency shall assess fees to each affected
24    utility to recover the costs incurred in preparation of the
25    annual procurement plan for the utility.
26        (h) The Agency shall assess fees to each bidder to

 

 

HB1943- 45 -LRB097 08923 ASK 49055 b

1    recover the costs incurred in connection with a competitive
2    procurement process.
3(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09;
496-159, eff. 8-10-09; 96-1437, eff. 8-17-10.)