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Full Text of HB3055  97th General Assembly

HB3055 97TH GENERAL ASSEMBLY

  
  

 


 
97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3055

 

Introduced 2/23/2011, by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/8-103

    Amends the Public Utilities Act. Makes certain changes to the incremental annual energy savings goals that electric utilities must meet by implementing cost-effective energy efficiency measures. Provides that the amount of energy efficiency and demand-response measures implemented for any single year shall be reduced by an amount necessary to limit the estimated average net increase due to the cost of these measures included in the amounts paid by eligible retail customers in connection with electric service to no more than the greater of 2.015% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007 or the incremental amount per kilowatthour paid for these measures in 2011, unless the Commission concludes during a plan filing proceeding that the limitation would result in the utility foregoing cost-effective opportunities for savings that would otherwise create net aggregate bill reductions for its customers. Makes other changes. Effective immediately.


LRB097 10889 ASK 51418 b

 

 

A BILL FOR

 

HB3055LRB097 10889 ASK 51418 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Public Utilities Act is amended by changing
5Section 8-103 as follows:
 
6    (220 ILCS 5/8-103)
7    Sec. 8-103. Energy efficiency and demand-response
8measures.
9    (a) It is the policy of the State that electric utilities
10are required to use cost-effective energy efficiency and
11demand-response measures to reduce delivery load. Requiring
12investment in cost-effective energy efficiency and
13demand-response measures will reduce direct and indirect costs
14to consumers by decreasing environmental impacts and by
15avoiding or delaying the need for new generation, transmission,
16and distribution infrastructure. It serves the public interest
17to allow electric utilities to recover costs for reasonably and
18prudently incurred expenses for energy efficiency and
19demand-response measures. As used in this Section,
20"cost-effective" means that the measures satisfy the total
21resource cost test. The low-income measures described in
22subsection (f)(4) of this Section shall not be required to meet
23the total resource cost test. For purposes of this Section, the

 

 

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1terms "energy-efficiency", "demand-response", "electric
2utility", and "total resource cost test" shall have the
3meanings set forth in the Illinois Power Agency Act. For
4purposes of this Section, the amount per kilowatthour means the
5total amount paid for electric service expressed on a per
6kilowatthour basis. For purposes of this Section, the total
7amount paid for electric service includes without limitation
8estimated amounts paid for supply, transmission, distribution,
9surcharges, and add-on-taxes.
10    (b) Electric utilities shall implement cost-effective
11energy efficiency measures to meet the following incremental
12annual energy savings goals:
13        (1) 0.2% of energy delivered in the year commencing
14    June 1, 2008;
15        (2) 0.4% of energy delivered in the year commencing
16    June 1, 2009;
17        (3) 0.6% of energy delivered in the year commencing
18    June 1, 2010;
19        (4) 0.8% of energy delivered in the year commencing
20    June 1, 2011;
21        (5) The higher of 1% of energy delivered in the year
22    commencing June 1, 2012, or the amount necessary to produce
23    net lifetime customer savings equal to the cost of any
24    incremental capital investments made during the calendar
25    year 2011 1% of energy delivered in the year commencing
26    June 1, 2012;

 

 

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1        (6) The higher of 1.4% of energy delivered in the year
2    commencing June 1, 2013, or the amount necessary to produce
3    net lifetime customer savings equal to the cost of any
4    incremental capital investments made during calendar year
5    2012 1.4% of energy delivered in the year commencing June
6    1, 2013;
7        (7) The higher of 1.8% of energy delivered in the year
8    commencing June 1, 2014, or the amount necessary to produce
9    net lifetime customer savings equal to the cost of any
10    incremental capital investment made during calendar year
11    2013 1.8% of energy delivered in the year commencing June
12    1, 2014; and
13        (8) In each year hereafter, the higher of 2% of energy
14    delivered in the year commencing June 1, 2015, or the
15    amount necessary to produce net lifetime customer savings
16    equal to the cost of any incremental capital investment
17    made during the preceding calendar year 2% of energy
18    delivered in the year commencing June 1, 2015 and each year
19    thereafter.
20    For purposes of this subsection (b), "incremental capital
21investments" means those investments that exceed the utility's
22capital spend in calendar years 2008, 2009, and 2010 as
23reported in the applicable Federal Energy Regulatory
24Commission Form 2, or if the FERC Form 2 was not filed, in the
25applicable Form 21 ILCC.
26    (c) Electric utilities shall implement cost-effective

 

 

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1demand-response measures to reduce peak demand by 0.1% over the
2prior year for eligible retail customers, as defined in Section
316-111.5 of this Act, and for customers that elect hourly
4service from the utility pursuant to Section 16-107 of this
5Act, provided those customers have not been declared
6competitive. This requirement commences June 1, 2008 and
7continues for 10 years.
8    (d) Notwithstanding the requirements of subsections (b)
9and (c) of this Section, an electric utility shall reduce the
10amount of energy efficiency and demand-response measures
11implemented in any single year by an amount necessary to limit
12the estimated average increase in the amounts paid by retail
13customers in connection with electric service due to the cost
14of those measures to:
15        (1) in 2008, no more than 0.5% of the amount paid per
16    kilowatthour by those customers during the year ending May
17    31, 2007;
18        (2) in 2009, the greater of an additional 0.5% of the
19    amount paid per kilowatthour by those customers during the
20    year ending May 31, 2008 or 1% of the amount paid per
21    kilowatthour by those customers during the year ending May
22    31, 2007;
23        (3) in 2010, the greater of an additional 0.5% of the
24    amount paid per kilowatthour by those customers during the
25    year ending May 31, 2009 or 1.5% of the amount paid per
26    kilowatthour by those customers during the year ending May

 

 

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1    31, 2007;
2        (4) in 2011, the greater of an additional 0.5% of the
3    amount paid per kilowatthour by those customers during the
4    year ending May 31, 2010 or 2% of the amount paid per
5    kilowatthour by those customers during the year ending May
6    31, 2007; and
7        (5) thereafter, the amount of energy efficiency and
8    demand-response measures implemented for any single year
9    shall be reduced by an amount necessary to limit the
10    estimated average net increase due to the cost of these
11    measures included in the amounts paid by eligible retail
12    customers in connection with electric service to no more
13    than the greater of 2.015% of the amount paid per
14    kilowatthour by those customers during the year ending May
15    31, 2007 or the incremental amount per kilowatthour paid
16    for these measures in 2011, unless the Commission concludes
17    during a plan filing proceeding under subsection (f) of
18    this Section that the limitation would result in the
19    utility foregoing cost-effective opportunities for savings
20    that would otherwise create net aggregate bill reductions
21    for its customers.
22    No later than June 30, 2011, the Commission shall review
23the limitation on the amount of energy efficiency and
24demand-response measures implemented pursuant to this Section
25and report to the General Assembly its findings as to whether
26that limitation unduly constrains the procurement of energy

 

 

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1efficiency and demand-response measures.
2    (e) Electric utilities shall be responsible for overseeing
3the design, development, and filing of energy efficiency and
4demand-response plans with the Commission. Electric utilities
5shall implement 100% of the demand-response measures in the
6plans. Electric utilities shall implement 75% of the energy
7efficiency measures approved by the Commission, and may, as
8part of that implementation, outsource various aspects of
9program development and implementation. The remaining 25% of
10those energy efficiency measures approved by the Commission
11shall be implemented by the Department of Commerce and Economic
12Opportunity, and must be designed in conjunction with the
13utility and the filing process. The Department may outsource
14development and implementation of energy efficiency measures.
15A minimum of 10% of the entire portfolio of cost-effective
16energy efficiency measures shall be procured from units of
17local government, municipal corporations, school districts,
18and community college districts. The Department shall
19coordinate the implementation of these measures.
20    The apportionment of the dollars to cover the costs to
21implement the Department's share of the portfolio of energy
22efficiency measures shall be made to the Department once the
23Department has executed grants or contracts for energy
24efficiency measures and provided supporting documentation for
25those grants and the contracts to the utility.
26    The details of the measures implemented by the Department

 

 

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1shall be submitted by the Department to the Commission in
2connection with the utility's filing regarding the energy
3efficiency and demand-response measures that the utility
4implements.
5    A utility providing approved energy efficiency and
6demand-response measures in the State shall be permitted to
7recover costs of those measures through an automatic adjustment
8clause tariff filed with and approved by the Commission. The
9tariff shall be established outside the context of a general
10rate case. Each year the Commission shall initiate a review to
11reconcile any amounts collected with the actual costs and to
12determine the required adjustment to the annual tariff factor
13to match annual expenditures.
14    Each utility shall include, in its recovery of costs, the
15costs estimated for both the utility's and the Department's
16implementation of energy efficiency and demand-response
17measures. Costs collected by the utility for measures
18implemented by the Department shall be submitted to the
19Department pursuant to Section 605-323 of the Civil
20Administrative Code of Illinois and shall be used by the
21Department solely for the purpose of implementing these
22measures. A utility shall not be required to advance any moneys
23to the Department but only to forward such funds as it has
24collected. The Department shall report to the Commission on an
25annual basis regarding the costs actually incurred by the
26Department in the implementation of the measures. Any changes

 

 

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1to the costs of energy efficiency measures as a result of plan
2modifications shall be appropriately reflected in amounts
3recovered by the utility and turned over to the Department.
4    The portfolio of measures, administered by both the
5utilities and the Department, shall, in combination, be
6designed to achieve the annual savings targets described in
7subsections (b) and (c) of this Section, as modified by
8subsection (d) of this Section.
9    The utility and the Department shall agree upon a
10reasonable portfolio of measures and determine the measurable
11corresponding percentage of the savings goals associated with
12measures implemented by the utility or Department.
13    No utility shall be assessed a penalty under subsection (f)
14of this Section for failure to make a timely filing if that
15failure is the result of a lack of agreement with the
16Department with respect to the allocation of responsibilities
17or related costs or target assignments. In that case, the
18Department and the utility shall file their respective plans
19with the Commission and the Commission shall determine an
20appropriate division of measures and programs that meets the
21requirements of this Section.
22    If the Department is unable to meet incremental annual
23performance goals for the portion of the portfolio implemented
24by the Department, then the utility and the Department shall
25jointly submit a modified filing to the Commission explaining
26the performance shortfall and recommending an appropriate

 

 

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1course going forward, including any program modifications that
2may be appropriate in light of the evaluations conducted under
3item (7) of subsection (f) of this Section. In this case, the
4utility obligation to collect the Department's costs and turn
5over those funds to the Department under this subsection (e)
6shall continue only if the Commission approves the
7modifications to the plan proposed by the Department.
8    (f) No later than November 15, 2007, each electric utility
9shall file an energy efficiency and demand-response plan with
10the Commission to meet the energy efficiency and
11demand-response standards for 2008 through 2010. Every 3 years
12thereafter, each electric utility shall file, no later than
13October 1, an energy efficiency and demand-response plan with
14the Commission. If a utility does not file such a plan by
15October 1 of an applicable year, it shall face a penalty of
16$100,000 per day until the plan is filed. Each utility's plan
17shall set forth the utility's proposals to meet the utility's
18portion of the energy efficiency standards identified in
19subsection (b) and the demand-response standards identified in
20subsection (c) of this Section as modified by subsections (d)
21and (e), taking into account the unique circumstances of the
22utility's service territory. The Commission shall seek public
23comment on the utility's plan and shall issue an order
24approving or disapproving each plan within 3 months after its
25submission. If the Commission disapproves a plan, the
26Commission shall, within 30 days, describe in detail the

 

 

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1reasons for the disapproval and describe a path by which the
2utility may file a revised draft of the plan to address the
3Commission's concerns satisfactorily. If the utility does not
4refile with the Commission within 60 days, the utility shall be
5subject to penalties at a rate of $100,000 per day until the
6plan is filed. This process shall continue, and penalties shall
7accrue, until the utility has successfully filed a portfolio of
8energy efficiency and demand-response measures. Penalties
9shall be deposited into the Energy Efficiency Trust Fund. In
10submitting proposed energy efficiency and demand-response
11plans and funding levels to meet the savings goals adopted by
12this Act the utility shall:
13        (1) Demonstrate that its proposed energy efficiency
14    and demand-response measures will achieve the requirements
15    that are identified in subsections (b) and (c) of this
16    Section, as modified by subsections (d) and (e).
17        (2) Present specific proposals to implement new
18    building and appliance standards that have been placed into
19    effect.
20        (3) Present estimates of the total amount paid for
21    electric service expressed on a per kilowatthour basis
22    associated with the proposed portfolio of measures
23    designed to meet the requirements that are identified in
24    subsections (b) and (c) of this Section, as modified by
25    subsections (d) and (e).
26        (4) Coordinate with the Department to present a

 

 

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1    portfolio of energy efficiency measures proportionate to
2    the share of total annual utility revenues in Illinois from
3    households at or below 150% of the poverty level. The
4    energy efficiency programs shall be targeted to households
5    with incomes at or below 80% of area median income.
6        (5) Demonstrate that its overall portfolio of energy
7    efficiency and demand-response measures, not including
8    programs covered by item (4) of this subsection (f), are
9    cost-effective using the total resource cost test and
10    represent a diverse cross-section of opportunities for
11    customers of all rate classes to participate in the
12    programs.
13        (6) Include a proposed cost-recovery tariff mechanism
14    to fund the proposed energy efficiency and demand-response
15    measures and to ensure the recovery of the prudently and
16    reasonably incurred costs of Commission-approved programs.
17        (7) Provide for an annual independent evaluation of the
18    performance of the cost-effectiveness of the utility's
19    portfolio of measures and the Department's portfolio of
20    measures, as well as a full review of the 3-year results of
21    the broader net program impacts and, to the extent
22    practical, for adjustment of the measures on a
23    going-forward basis as a result of the evaluations. The
24    resources dedicated to evaluation shall not exceed 3% of
25    portfolio resources in any given year.
26    (g) No more than 3% of energy efficiency and

 

 

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1demand-response program revenue may be allocated for
2demonstration of breakthrough equipment and devices.
3    (h) This Section does not apply to an electric utility that
4on December 31, 2005 provided electric service to fewer than
5100,000 customers in Illinois.
6    (i) If, after 2 years, an electric utility fails to meet
7the efficiency standard specified in subsection (b) of this
8Section, as modified by subsections (d) and (e), it shall make
9a contribution to the Low-Income Home Energy Assistance
10Program. The combined total liability for failure to meet the
11goal shall be $1,000,000, which shall be assessed as follows: a
12large electric utility shall pay $665,000, and a medium
13electric utility shall pay $335,000. If, after 3 years, an
14electric utility fails to meet the efficiency standard
15specified in subsection (b) of this Section, as modified by
16subsections (d) and (e), it shall make a contribution to the
17Low-Income Home Energy Assistance Program. The combined total
18liability for failure to meet the goal shall be $1,000,000,
19which shall be assessed as follows: a large electric utility
20shall pay $665,000, and a medium electric utility shall pay
21$335,000. In addition, the responsibility for implementing the
22energy efficiency measures of the utility making the payment
23shall be transferred to the Illinois Power Agency if, after 3
24years, or in any subsequent 3-year period, the utility fails to
25meet the efficiency standard specified in subsection (b) of
26this Section, as modified by subsections (d) and (e). The

 

 

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1Agency shall implement a competitive procurement program to
2procure resources necessary to meet the standards specified in
3this Section as modified by subsections (d) and (e), with costs
4for those resources to be recovered in the same manner as
5products purchased through the procurement plan as provided in
6Section 16-111.5. The Director shall implement this
7requirement in connection with the procurement plan as provided
8in Section 16-111.5.
9    For purposes of this Section, (i) a "large electric
10utility" is an electric utility that, on December 31, 2005,
11served more than 2,000,000 electric customers in Illinois; (ii)
12a "medium electric utility" is an electric utility that, on
13December 31, 2005, served 2,000,000 or fewer but more than
14100,000 electric customers in Illinois; and (iii) Illinois
15electric utilities that are affiliated by virtue of a common
16parent company are considered a single electric utility.
17    (j) If, after 3 years, or any subsequent 3-year period, the
18Department fails to implement the Department's share of energy
19efficiency measures required by the standards in subsection
20(b), then the Illinois Power Agency may assume responsibility
21for and control of the Department's share of the required
22energy efficiency measures. The Agency shall implement a
23competitive procurement program to procure resources necessary
24to meet the standards specified in this Section, with the costs
25of these resources to be recovered in the same manner as
26provided for the Department in this Section.

 

 

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1    (k) No electric utility shall be deemed to have failed to
2meet the energy efficiency standards to the extent any such
3failure is due to a failure of the Department or the Agency.
4(Source: P.A. 95-481, eff. 8-28-07; 95-876, eff. 8-21-08;
596-33, eff. 7-10-09; 96-159, eff. 8-10-09; 96-1000, eff.
67-2-10.)
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.