Illinois General Assembly - Full Text of HB3055
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Full Text of HB3055  97th General Assembly


Rep. Elaine Nekritz

Filed: 3/15/2011





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2    AMENDMENT NO. ______. Amend House Bill 3055 by replacing
3everything after the enacting clause with the following:
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
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



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1to allow electric utilities to recover costs for reasonably and
2prudently incurred expenses for energy efficiency and
3demand-response measures. As used in this Section,
4"cost-effective" means that the measures satisfy the total
5resource cost test. The low-income measures described in
6subsection (f)(4) of this Section shall not be required to meet
7the total resource cost test. For purposes of this Section, the
8terms "energy-efficiency", "demand-response", "electric
9utility", and "total resource cost test" shall have the
10meanings set forth in the Illinois Power Agency Act. For
11purposes of this Section, the amount per kilowatthour means the
12total amount paid for electric service expressed on a per
13kilowatthour basis. For purposes of this Section, the total
14amount paid for electric service includes without limitation
15estimated amounts paid for supply, transmission, distribution,
16surcharges, and add-on-taxes.
17    (b) Electric utilities shall implement cost-effective
18energy efficiency measures to meet the following incremental
19annual energy savings goals:
20        (1) 0.2% of energy delivered in the year commencing
21    June 1, 2008;
22        (2) 0.4% of energy delivered in the year commencing
23    June 1, 2009;
24        (3) 0.6% of energy delivered in the year commencing
25    June 1, 2010;
26        (4) 0.8% of energy delivered in the year commencing



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1    June 1, 2011;
2        (5) 1% of energy delivered in the year commencing June
3    1, 2012;
4        (6) 1.4% of energy delivered in the year commencing
5    June 1, 2013;
6        (7) 1.8% of energy delivered in the year commencing
7    June 1, 2014; and
8        (8) 2% of energy delivered in the year commencing June
9    1, 2015 and each year thereafter.
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 in any single year by an amount necessary to limit
22the estimated average increase in the amounts paid by retail
23customers in connection with electric service due to the cost
24of 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, unless the Commission



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1    concludes, based on evidence presented during a plan filing
2    proceeding under subsection (f) of this Section, that the
3    limitation would result in the utility foregoing
4    cost-effective opportunities for savings that would
5    otherwise create net aggregate bill reductions for its
6    customers.
7    No later than June 30, 2011, the Commission shall review
8the limitation on the amount of energy efficiency and
9demand-response measures implemented pursuant to this Section
10and report to the General Assembly its findings as to whether
11that limitation unduly constrains the procurement of energy
12efficiency and demand-response measures.
13    (e) Electric utilities shall be responsible for overseeing
14the design, development, and filing of energy efficiency and
15demand-response plans with the Commission. Electric utilities
16shall implement 100% of the demand-response measures in the
17plans. Electric utilities shall implement 75% of the energy
18efficiency measures approved by the Commission, and may, as
19part of that implementation, outsource various aspects of
20program development and implementation. The remaining 25% of
21those energy efficiency measures approved by the Commission
22shall be implemented by the Department of Commerce and Economic
23Opportunity, and must be designed in conjunction with the
24utility and the filing process. The Department may outsource
25development and implementation of energy efficiency measures.
26A minimum of 10% of the entire portfolio of cost-effective



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1energy efficiency measures shall be procured from units of
2local government, municipal corporations, school districts,
3and community college districts. The Department shall
4coordinate the implementation of these measures.
5    The apportionment of the dollars to cover the costs to
6implement the Department's share of the portfolio of energy
7efficiency measures shall be made to the Department once the
8Department has executed grants or contracts for energy
9efficiency measures and provided supporting documentation for
10those grants and the contracts to the utility.
11    The details of the measures implemented by the Department
12shall be submitted by the Department to the Commission in
13connection with the utility's filing regarding the energy
14efficiency and demand-response measures that the utility
16    A utility providing approved energy efficiency and
17demand-response measures in the State shall be permitted to
18recover costs of those measures through an automatic adjustment
19clause tariff filed with and approved by the Commission. The
20tariff shall be established outside the context of a general
21rate case. Each year the Commission shall initiate a review to
22reconcile any amounts collected with the actual costs and to
23determine the required adjustment to the annual tariff factor
24to match annual expenditures.
25    Each utility shall include, in its recovery of costs, the
26costs estimated for both the utility's and the Department's



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1implementation of energy efficiency and demand-response
2measures. Costs collected by the utility for measures
3implemented by the Department shall be submitted to the
4Department pursuant to Section 605-323 of the Civil
5Administrative Code of Illinois and shall be used by the
6Department 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



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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. Every 3 years
23thereafter, each electric utility shall file, no later than
24October 1, an energy efficiency and demand-response plan with
25the Commission. If a utility does not file such a plan by
26October 1 of an applicable year, it shall face a penalty of



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1$100,000 per day until the plan is filed. Each utility's plan
2shall set forth the utility's proposals to meet the utility's
3portion of the energy efficiency standards identified in
4subsection (b) and the demand-response standards identified in
5subsection (c) of this Section as modified by subsections (d)
6and (e), taking into account the unique circumstances of the
7utility's service territory. The Commission shall seek public
8comment on the utility's plan and shall issue an order
9approving or disapproving each plan within 3 months after its
10submission. If the Commission disapproves a plan, the
11Commission shall, within 30 days, describe in detail the
12reasons for the disapproval and describe a path by which the
13utility may file a revised draft of the plan to address the
14Commission's concerns satisfactorily. If the utility does not
15refile with the Commission within 60 days, the utility shall be
16subject to penalties at a rate of $100,000 per day until the
17plan is filed. This process shall continue, and penalties shall
18accrue, until the utility has successfully filed a portfolio of
19energy efficiency and demand-response measures. Penalties
20shall be deposited into the Energy Efficiency Trust Fund. In
21submitting proposed energy efficiency and demand-response
22plans and funding levels to meet the savings goals adopted by
23this Act the utility shall:
24        (1) Demonstrate that its proposed energy efficiency
25    and demand-response measures will achieve the requirements
26    that are identified in subsections (b) and (c) of this



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



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1    reasonably incurred costs of Commission-approved programs.
2        (7) Provide for an annual independent evaluation of the
3    performance of the cost-effectiveness of the utility's
4    portfolio of measures and the Department's portfolio of
5    measures, as well as a full review of the 3-year results of
6    the broader net program impacts and, to the extent
7    practical, for adjustment of the measures on a
8    going-forward basis as a result of the evaluations. The
9    resources dedicated to evaluation shall not exceed 3% of
10    portfolio resources in any given year.
11    (g) No more than 3% of energy efficiency and
12demand-response program revenue may be allocated for
13demonstration of breakthrough equipment and devices.
14    (h) This Section does not apply to an electric utility that
15on December 31, 2005 provided electric service to fewer than
16100,000 customers in Illinois.
17    (i) If, after 2 years, an electric utility fails to meet
18the efficiency standard specified in subsection (b) of this
19Section, as modified by subsections (d) and (e), it shall make
20a contribution to the Low-Income Home Energy Assistance
21Program. The combined total liability for failure to meet the
22goal shall be $1,000,000, which shall be assessed as follows: a
23large electric utility shall pay $665,000, and a medium
24electric utility shall pay $335,000. If, after 3 years, an
25electric utility fails to meet the efficiency standard
26specified in subsection (b) of this Section, as modified by



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1subsections (d) and (e), it shall make a contribution to the
2Low-Income Home Energy Assistance Program. The combined total
3liability for failure to meet the goal shall be $1,000,000,
4which shall be assessed as follows: a large electric utility
5shall pay $665,000, and a medium electric utility shall pay
6$335,000. In addition, the responsibility for implementing the
7energy efficiency measures of the utility making the payment
8shall be transferred to the Illinois Power Agency if, after 3
9years, or in any subsequent 3-year period, the utility fails to
10meet the efficiency standard specified in subsection (b) of
11this Section, as modified by subsections (d) and (e). The
12Agency shall implement a competitive procurement program to
13procure resources necessary to meet the standards specified in
14this Section as modified by subsections (d) and (e), with costs
15for those resources to be recovered in the same manner as
16products purchased through the procurement plan as provided in
17Section 16-111.5. The Director shall implement this
18requirement in connection with the procurement plan as provided
19in Section 16-111.5.
20    For purposes of this Section, (i) a "large electric
21utility" is an electric utility that, on December 31, 2005,
22served more than 2,000,000 electric customers in Illinois; (ii)
23a "medium electric utility" is an electric utility that, on
24December 31, 2005, served 2,000,000 or fewer but more than
25100,000 electric customers in Illinois; and (iii) Illinois
26electric utilities that are affiliated by virtue of a common



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1parent company are considered a single electric utility.
2    (j) If, after 3 years, or any subsequent 3-year period, the
3Department fails to implement the Department's share of energy
4efficiency measures required by the standards in subsection
5(b), then the Illinois Power Agency may assume responsibility
6for and control of the Department's share of the required
7energy efficiency measures. The Agency shall implement a
8competitive procurement program to procure resources necessary
9to meet the standards specified in this Section, with the costs
10of these resources to be recovered in the same manner as
11provided for the Department in this Section.
12    (k) No electric utility shall be deemed to have failed to
13meet the energy efficiency standards to the extent any such
14failure is due to a failure of the Department or the Agency.
15(Source: P.A. 95-481, eff. 8-28-07; 95-876, eff. 8-21-08;
1696-33, eff. 7-10-09; 96-159, eff. 8-10-09; 96-1000, eff.
18    Section 99. Effective date. This Act takes effect upon
19becoming law.".