SB1485sam002 99TH GENERAL ASSEMBLY

Sen. David Koehler

Filed: 3/20/2015

09900SB1485sam002 LRB099 06216 MGM 33073 a

AMENDMENT TO SENATE BILL 1485

AMENDMENT NO. ______. Amend Senate Bill 1485 by replacing line 24 on page 261 through line 6 on page 267 with the following:

"(b-5) This subsection may be cited as the Carbon Dioxide Emissions Reduction Act.

(1) The General Assembly finds that it is necessary to form a group of diverse stakeholders to collect information and provide analysis regarding greenhouse gas emissions, including, specifically carbon dioxide (CO2) emissions, in Illinois, consider options for reducing CO2 emissions, and consider the impact of the State's compliance with any final effective federal rule regulating or limiting the emission of CO2 from existing generating units in the electric generating power sector.

(A) Within 60 days after the effective date of this amendatory Act of the 99th General Assembly, the Environmental Protection Agency shall establish an Illinois Green House Gas (GHG) Council ("Council"). The purpose of the Council is to develop any required State plan to reduce greenhouse gases or CO2 specifically, pursuant to the Clean Air Act. The Council shall be chaired by the Director of the Illinois Environmental Protection Agency and will include one designated representative from each of the following: the Department of Commerce and Economic Opportunity; the Illinois Commerce Commission; the Illinois Power Agency; the Illinois Finance Authority; the Department of Agriculture; and the Department of Natural Resources.

(B) A Green House Gas (GHG) Advisory Committee, consisting of 15 non-governmental entity members, shall also be appointed within 60 days after the effective date of this amendatory Act of the 99th General Assembly, to provide input and advice to the Council. The Advisory Committee shall include 2 members appointed by the Senate President, 2 members appointed by the Senate Minority Leader, 2 members appointed by the Speaker of the House, 2 members appointed by the House Minority Leader and 3 members appointed by the Governor, and together shall include, at minimum, one member from each of the following sectors: labor unions; two from the coal-fired electric generating industry; the coal mining industry; non-governmental environmental organizations; renewable energy industry; natural gas-fired electric generating industry; the nuclear electric generating industry; and the electric supply industry. Advisory Committee membership appointments shall be effective for one year and may be renewed each year the Committee is required to meet.

(C) Members of both the Council and Advisory Committee shall meet regularly, but no less than once every other month, until the purpose of this subsection is achieved. The Members shall serve without compensation and staff assistance shall be provided by Council members.

(D) The information collected and the reports prepared by or for the Council and the Advisory Committee shall be used to prepare recommendations concerning the governance structure required to comply with any final and effective federal GHG or CO2 reduction rule. In its decision making, the Council must consider the social, economic, administrative, and budgetary impacts of legislation, including rulemaking under existing legislative authorities, to regulate greenhouse gas emissions, including CO2 emissions, in Illinois. In order to achieve this objective, the Council shall:

(i) Direct the collection of the following information and data prior to developing a State plan framework:

(a) An inventory of CO2 emission sources from the power sector and from other sectors, including, but not limited to, industrial sectors, commercial establishments, residential establishments, mobile sources, agricultural, and natural sources. This inventory must demonstrate, to the extent possible, a baseline of CO2 emissions.

(b) An inventory of energy generated (MWHrs) and used in the State categorized by resource and resource type. This inventory shall include energy sold for consumption in Illinois by generators not located in Illinois and for consumption in other states by generators located in Illinois. This inventory should include, to the extent available, the number and source of renewable energy credits purchased to comply with Illinois renewable portfolio standards.

(c) To the extent available, a list from energy generators of projected retirements of generation and any planned replacement with, or new low or zero-emitting resources.

(d) To the extent available, future resource plans from energy generation units that deliver energy to load without using the transmission system or any distribution facilities (on-site generators).

(ii) Direct the completion of the following reports before developing a State plan framework:

(a) A report by the Illinois Commerce Commission regarding the State's and the grid operators' ability to build infrastructure and expand transmission to expand the use of renewable or low-emitting resources and the impact of such construction on residential, commercial, and industrial electric rates.

(b) A report by the Illinois Commerce Commission, in cooperation with the Illinois Power Agency, Department of Commerce and Economic Opportunity, and Illinois Environmental Protection Agency evaluating market conditions and the differences in capacity prices paid to owners of electric generation units located in PJM Interconnection, LLC and Midcontinent Independent Systems Operator market regions in Illinois and to evaluate the ability of those capacity markets and prices to provide adequate revenues to owners to support investments necessary for compliance with any required State plan.

(c) A report by the Department of Commerce and Economic Opportunity regarding the potential for job impacts through the year 2030, including a discussion of geographic areas in the State that would be most affected by changes in energy generation and delivery.

(d) A report by the Illinois Environmental Protection Agency that outlines the carbon dioxide reductions achievable from fossil fuel fired steam electric generating units, including those reductions from specific heat rate improvements, considering the age of the units, the remaining useful life of the existing units and prior significant capital investment and voluntary retirements.

(e) A report by the Illinois Environmental Protection Agency discussing the quantity of CO2 reductions and measures to demonstrate to the United States Environmental Protection Agency the CO2 reductions that have occurred between 2005 and 2020 due to circumstances such as plant retirements, conversions, and renewable energy growth and recommending how to carry forward credit for such actions.

(iii) Identify whether additional legislation is needed to address the following issues:

(a) Credit for the remaining useful life of affected electric generating units.

(b) Enforcing unit-specific emission reduction requirements or authorizing emission trading programs for any affected electric generating unit or other affected entity in the State plan.

(c) Establishing an offset program, including methods for monitoring, verification, and acceptance to comply with the federal rule.

(d) Changing existing Illinois law regarding generation resource planning, adequacy, and reliability, including provisions to address energy delivery emergencies created by resource scarcity (including reliability issues), extreme weather events, natural disasters, or similar issues.

(e) Changing existing Illinois renewable portfolio standards and energy efficiency programs.

(f) Establishing ratepayer protection measures.

(g) Participating in a state-wide, regional, or national emissions trading program.

(h) Amending or establishing tax policies or incentives to support clean coal technologies.

(i) Authorizing one or more State agencies not subject to the authority of the Illinois Environmental Protection Act or the Agency to develop and implement elements of the plan.

(j) Authorizing the construction of infrastructure necessary to meet plan goals, including expedited permitting or planning.

(k) Authorizing cost recovery mechanisms for capacity and transmission construction necessary to implement federal requirements.

(l) Authorizing the State to accept direct legal responsibility for compliance with any federal rule.

(iv) Develop a State plan framework considering all, but not limited to, the following:

(a) The data and inventories collected pursuant to item (i) of subparagraph (D) of paragraph (1) of subsection (b-5).

(b) The reports of State agencies specified in item (ii) of subparagraph (D) of paragraph (1) of subsection (b-5).

(c) Additional legislation that is necessary to implement a State plan as identified pursuant to item (iii) of subparagraph (D) of paragraph (1) of subsection (b-5), and a schedule for development and enactment.

(d) Existing carbon dioxide emission and sources of emissions in Illinois.

(e) Options for reducing CO2 emissions to a level that complies with federal requirements.

(f) Electricity rates paid by Illinois consumers.

(g) Ability to achieve Illinois renewable portfolio standards.

(h) Impact on Illinois coal mining industry.

(i) Impact to ethanol production in Illinois.

(j) Impact to natural gas distribution in Illinois.

(k) Impact to coal fired generation in Illinois.

(l) Impact to nuclear generation in Illinois.

(m) The ability to implement cost-effective additional demand response programs.

(n) The ability to implement cost-effective additional energy efficiency programs.

(o) The ability of sources to implement cost-effective carbon reduction measures.

(p) The remaining useful life of affected electric generating units.

(q) An offset program, including consideration of programs in and out-of-state including, but not limited to:

(i) transportation system modifications;

(ii) rebates;

(iii) electric vehicle charging stations;

(iv) agriculture programs, such as manure and other organic material use for electricity generation or soil carbon sequestration;

(v) return of developed land to natural carbon sinks;

(vi) green infrastructure;

(vii) stormwater management projects; and

(viii) forestation programs.

(r) Impact of the plan on disadvantaged communities and rural communities.

(s) State-based financial incentives to encourage the repowering of fossil fuel fired electricity generating units to less CO2-intensive power sources.

(t) Legal, tax, permitting, or similar barriers to the development of low or zero-carbon emitting generation resources.

(u) The advantages and disadvantages of a rate-based compliance plan.

(v) The advantages and disadvantages of a mass-based compliance plan.

(w) The advantages and disadvantages of linking to other state plans.

(x) Compliance with House Resolution 782 from the 98th General Assembly, providing preference to and support to the owners of existing coal-fired steam electric power plants with remaining useful lives.

(y) Any other consideration required by any federal program regulating or limiting carbon dioxide emissions under the Clean Air Act, or other information deemed relevant by the Council or Advisory Committee.

(E) The Council and Advisory Committee shall present a plan framework and proposed rulemaking language in written report form to the Director by no later than 10 months before the federally required date for any State plan. If the Council and Advisory Committee identify additional legislation needed to implement the plan, the Council and Advisory Committee must also present a written summary description of such legislation to the Director by the same date.

(F) Relying on the State plan framework developed by the Council and Advisory Committee, the Director shall recommend actions to be taken with a final effective federal rule. The Director's recommendations, including all supporting documents and reports, will be published on the Agency's website. Notwithstanding any other law to the contrary, no State agency or department shall propose for adoption of a State plan regulating or limiting CO2 emissions or greenhouse gases unless and until: (1) there is a final and effective federal rule requiring such a State plan; and (2) any required legislative authorizations are enacted.".