|
Public Act 098-0225
|
| HB1534 Enrolled | LRB098 03811 RPM 33827 b |
|
|
AN ACT concerning utilities.
|
Be it enacted by the People of the State of Illinois,
|
represented in the General Assembly:
|
Section 5. The Public Utilities Act is amended by changing |
Section 8-104 as follows:
|
(220 ILCS 5/8-104)
|
Sec. 8-104. Natural gas energy efficiency programs. |
(a) It is the policy of the State that natural gas |
utilities and the Department of Commerce and Economic |
Opportunity are required to use cost-effective energy |
efficiency to reduce direct and indirect costs to consumers. It |
serves the public interest to allow natural gas utilities to |
recover costs for reasonably and prudently incurred expenses |
for cost-effective energy efficiency measures. |
(b) For purposes of this Section, "energy efficiency" means |
measures that reduce the amount of energy required to achieve a |
given end use and "cost-effective" means that the measures |
satisfy the total resource cost test which, for purposes of |
this Section, means a standard that is met if, for an |
investment in energy efficiency, the benefit-cost ratio is |
greater than one. The benefit-cost ratio is the ratio of the |
net present value of the total benefits of the measures to the |
net present value of the total costs as calculated over the |
|
lifetime of the measures. The total resource cost test compares |
the sum of avoided natural gas utility costs, representing the |
benefits that accrue to the system and the participant in the |
delivery of those efficiency measures, as well as other |
quantifiable societal benefits, including avoided electric |
utility costs, to the sum of all incremental costs of end use |
measures (including both utility and participant |
contributions), plus costs to administer, deliver, and |
evaluate each demand-side measure, to quantify the net savings |
obtained by substituting demand-side measures for supply |
resources. In calculating avoided costs, reasonable estimates |
shall be included for financial costs likely to be imposed by |
future regulation of emissions of greenhouse gases. The |
low-income programs described in item (4) of subsection (f) of |
this Section shall not be required to meet the total resource |
cost test. |
(c) Natural gas utilities shall implement cost-effective |
energy efficiency measures to meet at least the following |
natural gas savings requirements, which shall be based upon the |
total amount of gas delivered to retail customers, other than |
the customers described in subsection (m) of this Section, |
during calendar year 2009 multiplied by the applicable |
percentage. Natural gas utilities may comply with this Section |
by meeting the annual incremental savings goal in the |
applicable year or by showing that total savings associated |
with measures implemented after May 31, 2011 were equal to the |
|
sum of each annual incremental savings requirement from May 31, |
2011 through the end of the applicable year: |
(1) 0.2% by May 31, 2012; |
(2) an additional 0.4% by May 31, 2013, increasing |
total savings to .6%; |
(3) an additional 0.6% by May 31, 2014, increasing |
total savings to 1.2%; |
(4) an additional 0.8% by May 31, 2015, increasing |
total savings to 2.0%; |
(5) an additional 1% by May 31, 2016, increasing total |
savings to 3.0%; |
(6) an additional 1.2% by May 31, 2017, increasing |
total savings to 4.2%; |
(7) an additional 1.4% by May 31, 2018, increasing |
total savings to 5.6%; |
(8) an additional 1.5% by May 31, 2019, increasing |
total savings to 7.1%; and |
(9) an additional 1.5% in each 12-month period |
thereafter. |
(d) Notwithstanding the requirements of subsection (c) of |
this Section, a natural gas utility shall limit the amount of |
energy efficiency implemented in any 3-year reporting period |
established by subsection (f) of Section 8-104 of this Act, by |
an amount necessary to limit the estimated average increase in |
the amounts paid by retail customers in connection with natural |
gas service to no more than 2% in the applicable 3-year |
|
reporting period. The energy savings requirements in |
subsection (c) of this Section may be reduced by the Commission |
for the subject plan, if the utility demonstrates by |
substantial evidence that it is highly unlikely that the |
requirements could be achieved without exceeding the |
applicable spending limits in any 3-year reporting period. No |
later than September 1, 2013, the Commission shall review the |
limitation on the amount of energy efficiency measures |
implemented pursuant to this Section and report to the General |
Assembly, in the report required by subsection (k) of this |
Section, its findings as to whether that limitation unduly |
constrains the procurement of energy efficiency measures. |
(e) Natural gas utilities shall be responsible for |
overseeing the design, development, and filing of their |
efficiency plans with the Commission. The utility shall utilize |
75% of the available funding associated with energy efficiency |
programs approved by the Commission, and may outsource various |
aspects of program development and implementation. The |
remaining 25% of available funding shall be used by the |
Department of Commerce and Economic Opportunity to implement |
energy efficiency measures that achieve no less than 20% of the |
requirements of subsection (c) of this Section. Such measures |
shall be designed in conjunction with the utility and approved |
by the Commission. The Department may outsource development and |
implementation of energy efficiency measures. A minimum of 10% |
of the entire portfolio of cost-effective energy efficiency |
|
measures shall be procured from local government, municipal |
corporations, school districts, and community college |
districts. Five percent of the entire portfolio of |
cost-effective energy efficiency measures may be granted to |
local government and municipal corporations for market |
transformation initiatives. The Department shall coordinate |
the implementation of these measures and shall integrate |
delivery of natural gas efficiency programs with electric |
efficiency programs delivered pursuant to Section 8-103 of this |
Act, unless the Department can show that integration is not |
feasible. |
The apportionment of the dollars to cover the costs to |
implement the Department's share of the portfolio of energy |
efficiency measures shall be made to the Department once the |
Department has executed rebate agreements, grants, or |
contracts for energy efficiency measures and provided |
supporting documentation for those rebate agreements, grants, |
and contracts to the utility. The Department is authorized to |
adopt any rules necessary and prescribe procedures in order to |
ensure compliance by applicants in carrying out the purposes of |
rebate agreements for energy efficiency measures implemented |
by the Department made under this Section. |
The details of the measures implemented by the Department |
shall be submitted by the Department to the Commission in |
connection with the utility's filing regarding the energy |
efficiency measures that the utility implements. |
|
A utility providing approved energy efficiency measures in |
this State shall be permitted to recover costs of those |
measures through an automatic adjustment clause tariff filed |
with and approved by the Commission. The tariff shall be |
established outside the context of a general rate case and |
shall be applicable to the utility's customers other than the |
customers described in subsection (m) of this Section. Each |
year the Commission shall initiate a review to reconcile any |
amounts collected with the actual costs and to determine the |
required adjustment to the annual tariff factor to match annual |
expenditures. |
Each utility shall include, in its recovery of costs, the |
costs estimated for both the utility's and the Department's |
implementation of energy efficiency measures. Costs collected |
by the utility for measures implemented by the Department shall |
be submitted to the Department pursuant to Section 605-323 of |
the Civil Administrative Code of Illinois, shall be deposited |
into the Energy Efficiency Portfolio Standards Fund, and shall |
be used by the Department solely for the purpose of |
implementing these measures. A utility shall not be required to |
advance any moneys to the Department but only to forward such |
funds as it has collected. The Department shall report to the |
Commission on an annual basis regarding the costs actually |
incurred by the Department in the implementation of the |
measures. Any changes to the costs of energy efficiency |
measures as a result of plan modifications shall be |
|
appropriately reflected in amounts recovered by the utility and |
turned over to the Department. |
The portfolio of measures, administered by both the |
utilities and the Department, shall, in combination, be |
designed to achieve the annual energy savings requirements set |
forth in subsection (c) of this Section, as modified by |
subsection (d) of this Section. |
The utility and the Department shall agree upon a |
reasonable portfolio of measures and determine the measurable |
corresponding percentage of the savings goals associated with |
measures implemented by the Department. |
No utility shall be assessed a penalty under subsection (f) |
of this Section for failure to make a timely filing if that |
failure is the result of a lack of agreement with the |
Department with respect to the allocation of responsibilities |
or related costs or target assignments. In that case, the |
Department and the utility shall file their respective plans |
with the Commission and the Commission shall determine an |
appropriate division of measures and programs that meets the |
requirements of this Section. |
If the Department is unable to meet performance |
requirements for the portion of the portfolio implemented by |
the Department, then the utility and the Department shall |
jointly submit a modified filing to the Commission explaining |
the performance shortfall and recommending an appropriate |
course going forward, including any program modifications that |
|
may be appropriate in light of the evaluations conducted under |
item (8) of subsection (f) of this Section. In this case, the |
utility obligation to collect the Department's costs and turn |
over those funds to the Department under this subsection (e) |
shall continue only if the Commission approves the |
modifications to the plan proposed by the Department. |
(f) No later than October 1, 2010, each gas utility shall |
file an energy efficiency plan with the Commission to meet the |
energy efficiency standards through May 31, 2014. Every 3 years |
thereafter, each utility shall file, no later than October 1, |
an energy efficiency plan with the Commission. If a utility |
does not file such a plan by October 1 of the applicable year, |
then it shall face a penalty of $100,000 per day until the plan |
is filed. Each utility's plan shall set forth the utility's |
proposals to meet the utility's portion of the energy |
efficiency standards identified in subsection (c) of this |
Section, as modified by subsection (d) of this Section, taking |
into account the unique circumstances of the utility's service |
territory. The Commission shall seek public comment on the |
utility's plan and shall issue an order approving or |
disapproving each plan. If the Commission disapproves a plan, |
the Commission shall, within 30 days, describe in detail the |
reasons for the disapproval and describe a path by which the |
utility may file a revised draft of the plan to address the |
Commission's concerns satisfactorily. If the utility does not |
refile with the Commission within 60 days after the |
|
disapproval, the utility shall be subject to penalties at a |
rate of $100,000 per day until the plan is filed. This process |
shall continue, and penalties shall accrue, until the utility |
has successfully filed a portfolio of energy efficiency |
measures. Penalties shall be deposited into the Energy |
Efficiency Trust Fund and the cost of any such penalties may |
not be recovered from ratepayers. In submitting proposed energy |
efficiency plans and funding levels to meet the savings goals |
adopted by this Act the utility shall: |
(1) Demonstrate that its proposed energy efficiency |
measures will achieve the requirements that are identified |
in subsection (c) of this Section, as modified by |
subsection (d) of this Section. |
(2) Present specific proposals to implement new |
building and appliance standards that have been placed into |
effect. |
(3) Present estimates of the total amount paid for gas |
service expressed on a per therm basis associated with the |
proposed portfolio of measures designed to meet the |
requirements that are identified in subsection (c) of this |
Section, as modified by subsection (d) of this Section. |
(4) Coordinate with the Department to present a |
portfolio of energy efficiency measures proportionate to |
the share of total annual utility revenues in Illinois from |
households at or below 150% of the poverty level. Such |
programs shall be targeted to households with incomes at or |
|
below 80% of area median income. |
(5) Demonstrate that its overall portfolio of energy |
efficiency measures, not including programs covered by |
item (4) of this subsection (f), are cost-effective using |
the total resource cost test and represent a diverse cross |
section of opportunities for customers of all rate classes |
to participate in the programs. |
(6) Demonstrate that a gas utility affiliated with an |
electric utility that is required to comply with Section |
8-103 of this Act has integrated gas and electric |
efficiency measures into a single program that reduces |
program or participant costs and appropriately allocates |
costs to gas and electric ratepayers. The Department shall |
integrate all gas and electric programs it delivers in any |
such utilities' service territories, unless the Department |
can show that integration is not feasible or appropriate. |
(7) Include a proposed cost recovery tariff mechanism |
to fund the proposed energy efficiency measures and to |
ensure the recovery of the prudently and reasonably |
incurred costs of Commission-approved programs. |
(8) Provide for quarterly status reports tracking |
implementation of and expenditures for the utility's |
portfolio of measures and the Department's portfolio of |
measures, an annual independent review, and a full |
independent evaluation of the 3-year results of the |
performance and the cost-effectiveness of the utility's |
|
and Department's portfolios of measures and broader net |
program impacts and, to the extent practical, for |
adjustment of the measures on a going forward basis as a |
result of the evaluations. The resources dedicated to |
evaluation shall not exceed 3% of portfolio resources in |
any given 3-year period. |
(g) No more than 3% of expenditures on energy efficiency |
measures may be allocated for demonstration of breakthrough |
equipment and devices. |
(h) Illinois natural gas utilities that are affiliated by |
virtue of a common parent company may, at the utilities' |
request, be considered a single natural gas utility for |
purposes of complying with this Section. |
(i) If, after 3 years, a gas utility fails to meet the |
efficiency standard specified in subsection (c) of this Section |
as modified by subsection (d), then it shall make a |
contribution to the Low-Income Home Energy Assistance Program. |
The total liability for failure to meet the goal shall be |
assessed as follows: |
(1) a large gas utility shall pay $600,000; |
(2) a medium gas utility shall pay $400,000; and |
(3) a small gas utility shall pay $200,000. |
For purposes of this Section, (i) a "large gas utility" is |
a gas utility that on December 31, 2008, served more than |
1,500,000 gas customers in Illinois; (ii) a "medium gas |
utility" is a gas utility that on December 31, 2008, served |
|
fewer than 1,500,000, but more than 500,000 gas customers in |
Illinois; and (iii) a "small gas utility" is a gas utility that |
on December 31, 2008, served fewer than 500,000 and more than |
100,000 gas customers in Illinois. The costs of this |
contribution may not be recovered from ratepayers. |
If a gas utility fails to meet the efficiency standard |
specified in subsection (c) of this Section, as modified by |
subsection (d) of this Section, in any 2 consecutive 3-year |
planning periods, then the responsibility for implementing the |
utility's energy efficiency measures shall be transferred to an |
independent program administrator selected by the Commission. |
Reasonable and prudent costs incurred by the independent |
program administrator to meet the efficiency standard |
specified in subsection (c) of this Section, as modified by |
subsection (d) of this Section, may be recovered from the |
customers of the affected gas utilities, other than customers |
described in subsection (m) of this Section. The utility shall |
provide the independent program administrator with all |
information and assistance necessary to perform the program |
administrator's duties including but not limited to customer, |
account, and energy usage data, and shall allow the program |
administrator to include inserts in customer bills. The utility |
may recover reasonable costs associated with any such |
assistance. |
(j) No utility shall be deemed to have failed to meet the |
energy efficiency standards to the extent any such failure is |
|
due to a failure of the Department. |
(k) Not later than January 1, 2012, the Commission shall |
develop and solicit public comment on a plan to foster |
statewide coordination and consistency between statutorily |
mandated natural gas and electric energy efficiency programs to |
reduce program or participant costs or to improve program |
performance. Not later than September 1, 2013, the Commission |
shall issue a report to the General Assembly containing its |
findings and recommendations. |
(l) This Section does not apply to a gas utility that on |
January 1, 2009, provided gas service to fewer than 100,000 |
customers in Illinois. |
(m) Subsections (a) through (k) of this Section do not |
apply to customers of a natural gas utility that have a North |
American Industry Classification System code number that is |
22111 or any such code number beginning with the digits 31, 32, |
or 33 and (i) annual usage in the aggregate of 4 million therms |
or more within the service territory of the affected gas |
utility or with aggregate usage of 8 million therms or more in |
this State and complying with the provisions of item (l) of |
this subsection (m); or (ii) using natural gas as feedstock and |
meeting the usage requirements described in item (i) of this |
subsection (m), to the extent such annual feedstock usage is |
greater than 60% of the customer's total annual usage of |
natural gas. |
(1) Customers described in this subsection (m) of this |
|
Section shall apply, on a form approved on or before |
October 1, 2009 by the Department, to the Department to be |
designated as a self-directing customer ("SDC") or as an |
exempt customer using natural gas as a feedstock from which |
other products are made, including, but not limited to, |
feedstock for a hydrogen plant, on or before the 1st day of |
February, 2010. Thereafter, application may be made not |
less than 6 months before the filing date of the gas |
utility energy efficiency plan described in subsection (f) |
of this Section; however, a new customer that commences |
taking service from a natural gas utility after February 1, |
2010 may apply to become a SDC or exempt customer up to 30 |
days after beginning service. Customers described in this |
subsection (m) that have not already been approved by the |
Department may apply to be designated a self-directing |
customer or exempt customer, on a form approved by the |
Department, between September 1, 2013 and September 30, |
2013. Customer applications that are approved by the |
Department under this amendatory Act of the 98th General |
Assembly shall be considered to be a self-directing |
customer or exempt customer, as applicable, for the current |
3-year planning period effective December 1, 2013. Such |
application shall contain the following: |
(A) the customer's certification that, at the time |
of its application, it qualifies to be a SDC or exempt |
customer described in this subsection (m) of this |
|
Section; |
(B) in the case of a SDC, the customer's |
certification that it has established or will |
establish by the beginning of the utility's 3-year |
planning period commencing subsequent to the |
application, and will maintain for accounting |
purposes, an energy efficiency reserve account and |
that the customer will accrue funds in said account to |
be held for the purpose of funding, in whole or in |
part, energy efficiency measures of the customer's |
choosing, which may include, but are not limited to, |
projects involving combined heat and power systems |
that use the same energy source both for the generation |
of electrical or mechanical power and the production of |
steam or another form of useful thermal energy or the |
use of combustible gas produced from biomass, or both; |
(C) in the case of a SDC, the customer's |
certification that annual funding levels for the |
energy efficiency reserve account will be equal to 2% |
of the customer's cost of natural gas, composed of the |
customer's commodity cost and the delivery service |
charges paid to the gas utility, or $150,000, whichever |
is less; |
(D) in the case of a SDC, the customer's |
certification that the required reserve account |
balance will be capped at 3 years' worth of accruals |
|
and that the customer may, at its option, make further |
deposits to the account to the extent such deposit |
would increase the reserve account balance above the |
designated cap level; |
(E) in the case of a SDC, the customer's |
certification that by October 1 of each year, beginning |
no sooner than October 1, 2012, the customer will |
report to the Department information, for the 12-month |
period ending May 31 of the same year, on all deposits |
and reductions, if any, to the reserve account during |
the reporting year, and to the extent deposits to the |
reserve account in any year are in an amount less than |
$150,000, the basis for such reduced deposits; reserve |
account balances by month; a description of energy |
efficiency measures undertaken by the customer and |
paid for in whole or in part with funds from the |
reserve account; an estimate of the energy saved, or to |
be saved, by the measure; and that the report shall |
include a verification by an officer or plant manager |
of the customer or by a registered professional |
engineer or certified energy efficiency trade |
professional that the funds withdrawn from the reserve |
account were used for the energy efficiency measures; |
(F) in the case of an exempt customer, the |
customer's certification of the level of gas usage as |
feedstock in the customer's operation in a typical year |
|
and that it will provide information establishing this |
level, upon request of the Department; |
(G) in the case of either an exempt customer or a |
SDC, the customer's certification that it has provided |
the gas utility or utilities serving the customer with |
a copy of the application as filed with the Department; |
(H) in the case of either an exempt customer or a |
SDC, certification of the natural gas utility or |
utilities serving the customer in Illinois including |
the natural gas utility accounts that are the subject |
of the application; and |
(I) in the case of either an exempt customer or a |
SDC, a verification signed by a plant manager or an |
authorized corporate officer attesting to the |
truthfulness and accuracy of the information contained |
in the application. |
(2) The Department shall review the application to |
determine that it contains the information described in |
provisions (A) through (I) of item (1) of this subsection |
(m), as applicable. The review shall be completed within 30 |
days after the date the application is filed with the |
Department. Absent a determination by the Department |
within the 30-day period, the applicant shall be considered |
to be a SDC or exempt customer, as applicable, for all |
subsequent 3-year planning periods, as of the date of |
filing the application described in this subsection (m). If |
|
the Department determines that the application does not |
contain the applicable information described in provisions |
(A) through (I) of item (1) of this subsection (m), it |
shall notify the customer, in writing, of its determination |
that the application does not contain the required |
information and identify the information that is missing, |
and the customer shall provide the missing information |
within 15 working days after the date of receipt of the |
Department's notification. |
(3) The Department shall have the right to audit the |
information provided in the customer's application and |
annual reports to ensure continued compliance with the |
requirements of this subsection. Based on the audit, if the |
Department determines the customer is no longer in |
compliance with the requirements of items (A) through (I) |
of item (1) of this subsection (m), as applicable, the |
Department shall notify the customer in writing of the |
noncompliance. The customer shall have 30 days to establish |
its compliance, and failing to do so, may have its status |
as a SDC or exempt customer revoked by the Department. The |
Department shall treat all information provided by any |
customer seeking SDC status or exemption from the |
provisions of this Section as strictly confidential. |
(4) Upon request, or on its own motion, the Commission |
may open an investigation, no more than once every 3 years |
and not before October 1, 2014, to evaluate the |