Illinois General Assembly - Full Text of HB5321
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Full Text of HB5321  98th General Assembly

HB5321 98TH GENERAL ASSEMBLY

  
  

 


 
98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5321

 

Introduced , by Rep. Sue Scherer

 

SYNOPSIS AS INTRODUCED:
 
220 ILCS 5/8-103

    Amends the Public Utilities Act. Provides that energy efficiency and demand-response measures do not apply to self-directed customers. Provides that a self-directed customer is a customer of an electric utility whose total highest 30 minute demand aggregated for all of that customer's facilities within a utility service area was more than 10,000 kilowatts or whose annual aggregated usage is 500,000,000 kilowatt hours or more in this State and who complies with certain provisions. Provides that the criteria for determining qualification as a self-directing customer shall be based on the most recent 12 consecutive billing periods prior to the customer's initial application for designation as a self-directing customer. Provides that the provisions regarding self-directed customers will no longer be applicable after January 1, 2021.


LRB098 18567 RPS 53705 b

 

 

A BILL FOR

 

HB5321LRB098 18567 RPS 53705 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

 

 

HB5321- 2 -LRB098 18567 RPS 53705 b

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) 1% of energy delivered in the year commencing June
22    1, 2012;
23        (6) 1.4% of energy delivered in the year commencing
24    June 1, 2013;
25        (7) 1.8% of energy delivered in the year commencing
26    June 1, 2014; and

 

 

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1        (8) 2% of energy delivered in the year commencing June
2    1, 2015 and each year thereafter.
3    Electric utilities may comply with this subsection (b) by
4meeting the annual incremental savings goal in the applicable
5year or by showing that the total cumulative annual savings
6within a 3-year planning period associated with measures
7implemented after May 31, 2014 was equal to the sum of each
8annual incremental savings requirement from May 31, 2014
9through the end of the applicable year.
10    (c) Electric utilities shall implement cost-effective
11demand-response measures to reduce peak demand by 0.1% over the
12prior year for eligible retail customers, as defined in Section
1316-111.5 of this Act, and for customers that elect hourly
14service from the utility pursuant to Section 16-107 of this
15Act, provided those customers have not been declared
16competitive. This requirement commences June 1, 2008 and
17continues for 10 years.
18    (d) Notwithstanding the requirements of subsections (b)
19and (c) of this Section, an electric utility shall reduce the
20amount of energy efficiency and demand-response measures
21implemented over a 3-year planning period by an amount
22necessary to limit the estimated average annual increase in the
23amounts paid by retail customers in connection with electric
24service due to the cost of those measures to:
25        (1) in 2008, no more than 0.5% of the amount paid per
26    kilowatthour by those customers during the year ending May

 

 

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1    31, 2007;
2        (2) in 2009, the greater of an additional 0.5% of the
3    amount paid per kilowatthour by those customers during the
4    year ending May 31, 2008 or 1% of the amount paid per
5    kilowatthour by those customers during the year ending May
6    31, 2007;
7        (3) in 2010, the greater of an additional 0.5% of the
8    amount paid per kilowatthour by those customers during the
9    year ending May 31, 2009 or 1.5% of the amount paid per
10    kilowatthour by those customers during the year ending May
11    31, 2007;
12        (4) in 2011, the greater of an additional 0.5% of the
13    amount paid per kilowatthour by those customers during the
14    year ending May 31, 2010 or 2% of the amount paid per
15    kilowatthour by those customers during the year ending May
16    31, 2007; and
17        (5) thereafter, the amount of energy efficiency and
18    demand-response measures implemented for any single year
19    shall be reduced by an amount necessary to limit the
20    estimated average net increase due to the cost of these
21    measures included in the amounts paid by eligible retail
22    customers in connection with electric service to no more
23    than the greater of 2.015% of the amount paid per
24    kilowatthour by those customers during the year ending May
25    31, 2007 or the incremental amount per kilowatthour paid
26    for these measures in 2011.

 

 

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1    No later than June 30, 2011, the Commission shall review
2the limitation on the amount of energy efficiency and
3demand-response measures implemented pursuant to this Section
4and report to the General Assembly its findings as to whether
5that limitation unduly constrains the procurement of energy
6efficiency and demand-response measures.
7    (e) Electric utilities shall be responsible for overseeing
8the design, development, and filing of energy efficiency and
9demand-response plans with the Commission. Electric utilities
10shall implement 100% of the demand-response measures in the
11plans. Electric utilities shall implement 75% of the energy
12efficiency measures approved by the Commission, and may, as
13part of that implementation, outsource various aspects of
14program development and implementation. The remaining 25% of
15those energy efficiency measures approved by the Commission
16shall be implemented by the Department of Commerce and Economic
17Opportunity, and must be designed in conjunction with the
18utility and the filing process. The Department may outsource
19development and implementation of energy efficiency measures.
20A minimum of 10% of the entire portfolio of cost-effective
21energy efficiency measures shall be procured from units of
22local government, municipal corporations, school districts,
23and community college districts. The Department shall
24coordinate the implementation of these measures.
25    The apportionment of the dollars to cover the costs to
26implement the Department's share of the portfolio of energy

 

 

HB5321- 6 -LRB098 18567 RPS 53705 b

1efficiency measures shall be made to the Department once the
2Department has executed rebate agreements, grants, or
3contracts for energy efficiency measures and provided
4supporting documentation for those rebate agreements, grants,
5and contracts to the utility. The Department is authorized to
6adopt any rules necessary and prescribe procedures in order to
7ensure compliance by applicants in carrying out the purposes of
8rebate agreements for energy efficiency measures implemented
9by the Department made under this Section.
10    The details of the measures implemented by the Department
11shall be submitted by the Department to the Commission in
12connection with the utility's filing regarding the energy
13efficiency and demand-response measures that the utility
14implements.
15    A utility providing approved energy efficiency and
16demand-response measures in the State shall be permitted to
17recover costs of those measures through an automatic adjustment
18clause tariff filed with and approved by the Commission. The
19tariff shall be established outside the context of a general
20rate case. Each year the Commission shall initiate a review to
21reconcile any amounts collected with the actual costs and to
22determine the required adjustment to the annual tariff factor
23to match annual expenditures.
24    Each utility shall include, in its recovery of costs, the
25costs estimated for both the utility's and the Department's
26implementation of energy efficiency and demand-response

 

 

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1measures. Costs collected by the utility for measures
2implemented by the Department shall be submitted to the
3Department pursuant to Section 605-323 of the Civil
4Administrative Code of Illinois, shall be deposited into the
5Energy Efficiency Portfolio Standards Fund, and shall be used
6by the Department solely for the purpose of implementing these
7measures. A utility shall not be required to advance any moneys
8to the Department but only to forward such funds as it has
9collected. The Department shall report to the Commission on an
10annual basis regarding the costs actually incurred by the
11Department in the implementation of the measures. Any changes
12to the costs of energy efficiency measures as a result of plan
13modifications shall be appropriately reflected in amounts
14recovered by the utility and turned over to the Department.
15    The portfolio of measures, administered by both the
16utilities and the Department, shall, in combination, be
17designed to achieve the annual savings targets described in
18subsections (b) and (c) of this Section, as modified by
19subsection (d) of this Section.
20    The utility and the Department shall agree upon a
21reasonable portfolio of measures and determine the measurable
22corresponding percentage of the savings goals associated with
23measures implemented by the utility or Department.
24    No utility shall be assessed a penalty under subsection (f)
25of this Section for failure to make a timely filing if that
26failure is the result of a lack of agreement with the

 

 

HB5321- 8 -LRB098 18567 RPS 53705 b

1Department with respect to the allocation of responsibilities
2or related costs or target assignments. In that case, the
3Department and the utility shall file their respective plans
4with the Commission and the Commission shall determine an
5appropriate division of measures and programs that meets the
6requirements of this Section.
7    If the Department is unable to meet incremental annual
8performance goals for the portion of the portfolio implemented
9by the Department, then the utility and the Department shall
10jointly submit a modified filing to the Commission explaining
11the performance shortfall and recommending an appropriate
12course going forward, including any program modifications that
13may be appropriate in light of the evaluations conducted under
14item (7) of subsection (f) of this Section. In this case, the
15utility obligation to collect the Department's costs and turn
16over those funds to the Department under this subsection (e)
17shall continue only if the Commission approves the
18modifications to the plan proposed by the Department.
19    (f) No later than November 15, 2007, each electric utility
20shall file an energy efficiency and demand-response plan with
21the Commission to meet the energy efficiency and
22demand-response standards for 2008 through 2010. No later than
23October 1, 2010, each electric utility shall file an energy
24efficiency and demand-response plan with the Commission to meet
25the energy efficiency and demand-response standards for 2011
26through 2013. Every 3 years thereafter, each electric utility

 

 

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1shall file, no later than September 1, an energy efficiency and
2demand-response plan with the Commission. If a utility does not
3file such a plan by September 1 of an applicable year, it shall
4face a penalty of $100,000 per day until the plan is filed.
5Each utility's plan shall set forth the utility's proposals to
6meet the utility's portion of the energy efficiency standards
7identified in subsection (b) and the demand-response standards
8identified in subsection (c) of this Section as modified by
9subsections (d) and (e), taking into account the unique
10circumstances of the utility's service territory. The
11Commission shall seek public comment on the utility's plan and
12shall issue an order approving or disapproving each plan within
135 months after its submission. If the Commission disapproves a
14plan, the Commission shall, within 30 days, describe in detail
15the reasons for the disapproval and describe a path by which
16the utility may file a revised draft of the plan to address the
17Commission's concerns satisfactorily. If the utility does not
18refile with the Commission within 60 days, the utility shall be
19subject to penalties at a rate of $100,000 per day until the
20plan is filed. This process shall continue, and penalties shall
21accrue, until the utility has successfully filed a portfolio of
22energy efficiency and demand-response measures. Penalties
23shall be deposited into the Energy Efficiency Trust Fund. In
24submitting proposed energy efficiency and demand-response
25plans and funding levels to meet the savings goals adopted by
26this Act the utility shall:

 

 

HB5321- 10 -LRB098 18567 RPS 53705 b

1        (1) Demonstrate that its proposed energy efficiency
2    and demand-response measures will achieve the requirements
3    that are identified in subsections (b) and (c) of this
4    Section, as modified by subsections (d) and (e).
5        (2) Present specific proposals to implement new
6    building and appliance standards that have been placed into
7    effect.
8        (3) Present estimates of the total amount paid for
9    electric service expressed on a per kilowatthour basis
10    associated with the proposed portfolio of measures
11    designed to meet the requirements that are identified in
12    subsections (b) and (c) of this Section, as modified by
13    subsections (d) and (e).
14        (4) Coordinate with the Department to present a
15    portfolio of energy efficiency measures proportionate to
16    the share of total annual utility revenues in Illinois from
17    households at or below 150% of the poverty level. The
18    energy efficiency programs shall be targeted to households
19    with incomes at or below 80% of area median income.
20        (5) Demonstrate that its overall portfolio of energy
21    efficiency and demand-response measures, not including
22    programs covered by item (4) of this subsection (f), are
23    cost-effective using the total resource cost test and
24    represent a diverse cross-section of opportunities for
25    customers of all rate classes to participate in the
26    programs.

 

 

HB5321- 11 -LRB098 18567 RPS 53705 b

1        (6) Include a proposed cost-recovery tariff mechanism
2    to fund the proposed energy efficiency and demand-response
3    measures and to ensure the recovery of the prudently and
4    reasonably incurred costs of Commission-approved programs.
5        (7) Provide for an annual independent evaluation of the
6    performance of the cost-effectiveness of the utility's
7    portfolio of measures and the Department's portfolio of
8    measures, as well as a full review of the 3-year results of
9    the broader net program impacts and, to the extent
10    practical, for adjustment of the measures on a
11    going-forward basis as a result of the evaluations. The
12    resources dedicated to evaluation shall not exceed 3% of
13    portfolio resources in any given year.
14    (g) No more than 3% of energy efficiency and
15demand-response program revenue may be allocated for
16demonstration of breakthrough equipment and devices.
17    (h) This Section does not apply to an electric utility that
18on December 31, 2005 provided electric service to fewer than
19100,000 customers in Illinois.
20    (i) If, after 2 years, an electric utility fails to meet
21the efficiency standard specified in subsection (b) of this
22Section, as modified by subsections (d) and (e), it shall make
23a contribution to the Low-Income Home Energy Assistance
24Program. The combined total liability for failure to meet the
25goal shall be $1,000,000, which shall be assessed as follows: a
26large electric utility shall pay $665,000, and a medium

 

 

HB5321- 12 -LRB098 18567 RPS 53705 b

1electric utility shall pay $335,000. If, after 3 years, an
2electric utility fails to meet the efficiency standard
3specified in subsection (b) of this Section, as modified by
4subsections (d) and (e), it shall make a contribution to the
5Low-Income Home Energy Assistance Program. The combined total
6liability for failure to meet the goal shall be $1,000,000,
7which shall be assessed as follows: a large electric utility
8shall pay $665,000, and a medium electric utility shall pay
9$335,000. In addition, the responsibility for implementing the
10energy efficiency measures of the utility making the payment
11shall be transferred to the Illinois Power Agency if, after 3
12years, or in any subsequent 3-year period, the utility fails to
13meet the efficiency standard specified in subsection (b) of
14this Section, as modified by subsections (d) and (e). The
15Agency shall implement a competitive procurement program to
16procure resources necessary to meet the standards specified in
17this Section as modified by subsections (d) and (e), with costs
18for those resources to be recovered in the same manner as
19products purchased through the procurement plan as provided in
20Section 16-111.5. The Director shall implement this
21requirement in connection with the procurement plan as provided
22in Section 16-111.5.
23    For purposes of this Section, (i) a "large electric
24utility" is an electric utility that, on December 31, 2005,
25served more than 2,000,000 electric customers in Illinois; (ii)
26a "medium electric utility" is an electric utility that, on

 

 

HB5321- 13 -LRB098 18567 RPS 53705 b

1December 31, 2005, served 2,000,000 or fewer but more than
2100,000 electric customers in Illinois; and (iii) Illinois
3electric utilities that are affiliated by virtue of a common
4parent company are considered a single electric utility.
5    (j) If, after 3 years, or any subsequent 3-year period, the
6Department fails to implement the Department's share of energy
7efficiency measures required by the standards in subsection
8(b), then the Illinois Power Agency may assume responsibility
9for and control of the Department's share of the required
10energy efficiency measures. The Agency shall implement a
11competitive procurement program to procure resources necessary
12to meet the standards specified in this Section, with the costs
13of these resources to be recovered in the same manner as
14provided for the Department in this Section.
15    (k) No electric utility shall be deemed to have failed to
16meet the energy efficiency standards to the extent any such
17failure is due to a failure of the Department or the Agency.
18    (l) Subsections (a) through (k) of this Section do not
19apply to any customer of an electric utility whose total
20highest 30 minute demand aggregated for all of such customer's
21facilities within a utility service area was more than 10,000
22kilowatts or whose annual aggregated usage is 500,000,000
23kilowatt hours or more in this State and that complies with the
24provisions of paragraph (1) of this subsection (l). These
25criteria for determining qualification as a self-directing
26customer ("SDC") shall be based on the most recent 12

 

 

HB5321- 14 -LRB098 18567 RPS 53705 b

1consecutive billing periods prior to the customer's initial
2application for designation as a SDC.
3        (1) Customers described in this subsection (l) shall
4    apply to the Department, on a form approved by the
5    Department on or before October 1, 2014, to be designated
6    as a SDC on or before February 1, 2015. Thereafter, an
7    application may be made not less than 6 months before the
8    filing date of the electric utility energy efficiency and
9    demand-response plan described in subsection (f) of this
10    Section; however, a new customer that commences taking
11    service from an electric utility after February 1, 2015 may
12    apply to become a SDC up to 30 days after beginning
13    service. The application shall contain the following:
14            (A) the customer's certification that, at the time
15        of its application, it qualifies to be a SDC described
16        in this subsection (l);
17            (B) the customer's certification that it has
18        established or shall establish, by the beginning of the
19        utility's 3-year planning period commencing subsequent
20        to the application, and shall maintain for accounting
21        purposes an energy efficiency reserve account and that
22        the customer shall accrue funds in the account to be
23        held for the purpose of funding, in whole or in part,
24        energy efficiency measures of the customer's choosing,
25        which may include, but are not limited to, projects
26        involving combined heat and power systems that use the

 

 

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1        same energy source both for the generation of
2        electrical or mechanical power and the production of
3        steam or another form of useful thermal energy or the
4        use of combustible gas produced from biomass or both;
5            (C) the customer's certification that annual
6        funding levels for the energy efficiency reserve
7        account shall be equal to 2% of the customer's cost of
8        electricity, composed of the customer's commodity cost
9        and the delivery service charges paid to the electric
10        utility;
11            (D) in the case of customers who use one or more
12        electric arc furnaces with an annual usage of greater
13        than 50% of the customer's total annual electricity
14        usage, the required annual funding levels described in
15        subparagraph (C) of paragraph (1) of this subsection
16        (l) shall be based on the electricity usage not
17        directly used by the electric arc furnaces;
18            (E) the customer's certification that the required
19        reserve account balance shall be capped at 3 years'
20        worth of accruals and that the customer may, at its
21        option, make further deposits to the account to the
22        extent such a deposit would increase the reserve
23        account balance above the designated cap level;
24            (F) the customer's certification that by October 1
25        of each year, beginning no sooner than October 1, 2016,
26        the customer shall report to the Department, for the

 

 

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1        12-month period ending May 31 of the same year,
2        information on all deposits and reductions, if any, to
3        the reserve account during the reporting year; reserve
4        account balances by month; a description of energy
5        efficiency measures undertaken by the customer and
6        paid for in whole or in part with funds from the
7        reserve account; and an estimate of the energy saved or
8        to be saved by the measure and that the report shall
9        include a verification, by an officer or plant manager
10        of the customer or by a registered professional
11        engineer or certified, energy-efficiency trade
12        professional, that the funds withdrawn from the
13        reserve account were used for the energy efficiency
14        measures;
15            (G) in the case of a customer with one or more
16        electric arc furnaces that meet the criteria described
17        in subparagraph (D) of paragraph (1) of this subsection
18        (l), the customer's certification of the level of
19        electricity usage for powering its electric arc
20        furnaces in a typical year and that it shall provide
21        information establishing this level, upon request of
22        the Department;
23            (H) the customer's certification that it has
24        provided the electric utility or utilities serving the
25        customer with a copy of the application as filed with
26        the Department;

 

 

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1            (I) the customer's certification of the electric
2        utility or utilities serving the customer in this
3        State, including the electric utility accounts that
4        are the subject of the application; and
5            (J) the customer's verification, signed by a plant
6        manager or an authorized corporate officer, attesting
7        to the truthfulness and accuracy of the information
8        contained in the application.
9        (2) The Department shall review the application to
10    determine that it contains the information described in
11    subparagraphs (A) through (J) of paragraph (1) of this
12    subsection (l), as applicable. The review shall be
13    completed within 30 days after the date the application is
14    filed with the Department. Absent a determination by the
15    Department within the 30-day period, the applicant shall be
16    considered to be a customer for all subsequent 3-year
17    planning periods, as of the date of filing the application
18    described in this subsection (l). If the Department
19    determines that the application does not contain the
20    applicable information described in subparagraphs (A)
21    through (J) of paragraph (1) of this subsection (l), it
22    shall notify the customer, in writing, of its determination
23    that the application does not contain the required
24    information and identify the information that is missing,
25    and the customer shall provide the missing information
26    within 15 working days after the date of receipt of the

 

 

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1    Department's notification.
2        (3) The Department shall have the right to audit the
3    information provided in the customer's application and its
4    annual reports to ensure continued compliance with the
5    requirements of this subsection (l). Based on the audit, if
6    the Department determines the customer is no longer in
7    compliance with the requirements of subparagraphs (A)
8    through (J) of paragraph (1) of this subsection (l), as
9    applicable, the Department shall notify the customer in
10    writing of the noncompliance. The customer shall have 30
11    days to establish its compliance and, failing to do so, may
12    have its status as a SDC or exempt customer revoked by the
13    Department. The Department shall treat all information
14    provided by any customer seeking SDC status or exemption
15    from the provisions of this Section as strictly
16    confidential.
17        (4) Upon request or on its own motion, the Commission
18    may open an investigation, no more than once every 3 years
19    and not before October 1, 2017, to evaluate the
20    effectiveness of the self-directing program described in
21    this subsection (l).
22    (m) The applicability of this Section to customers
23described in subsection (l) of this Section is conditioned on
24the existence of the SDC program. In no event shall any
25provision of this Section apply to such customers after January
261, 2021.

 

 

HB5321- 19 -LRB098 18567 RPS 53705 b

1(Source: P.A. 97-616, eff. 10-26-11; 97-841, eff. 7-20-12;
298-90, eff. 7-15-13.)