HB4111 95TH GENERAL ASSEMBLY

LRB095 12381 MJR 37328 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB4111

Introduced , by Rep. Julie Hamos

SYNOPSIS AS INTRODUCED:

See Index

Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code. Provides that not later than January 2, 2008, the Department of Commerce and Economic Opportunity, in cooperation with the Illinois Commerce Commission, shall establish one or more pilot programs through which certain customers of a public utility may be eligible to have cost-effective energy efficiency, renewable energy, or demand response measures that may be installed at the customer's location by a certified contractor. Provides that within 30 days after the effective date of the amendatory Act, the Department shall convene and provide staff support to an ad hoc task force comprised of specified members, which shall advise the Department on the design of an energy efficiency, renewable energy, and demand response on-bill financing system. Amends the Public Utilities Act. Provides that the Commission shall, not later than November 1, 2007, issue an order or orders relating to provisions concerning energy efficiency, renewable energy, and demand response resources. Provides that each public utility shall file and maintain an energy efficiency, renewable energy, and demand response tariff or tariffs in accordance with specified provisions and any applicable order of the Commission to allow any of its customers to pay over time on the utility bill for cost-effective energy efficiency measures, renewable energy, demand response resources as provided in specified provisions. Provides that a public utility shall be entitled to recover reasonable costs incurred in complying with specified provisions. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by adding Section 605-975 as follows:

(20 ILCS 605/605-975 new)

Sec. 605-975. On-bill financing of energy efficiency, renewable energy, and demand response resources.

(a) The Illinois General Assembly finds that Illinois homes and businesses have the potential to save 25% or more of energy now used through conservation and by implementation of cost-effective energy efficiency, renewable energy, and demand response measures. However, persistent barriers in the markets for these measures, including lack of information and lack of capital, prevent many Illinois consumers and businesses from making economical investments in them. It is the purpose of this Section to help overcome those barriers, to assist energy consumers in Illinois to make the most efficient use of energy resources, and to maximize the amount of value that is extracted from electricity and gas delivered by utilities in the State, by the creation of energy efficiency, renewable energy, and demand response resources on-bill financing programs. Programs created pursuant to this Section will allow utility customers to obtain energy efficiency products and services and renewable energy and demand response resources with no required initial payment, and to pay the cost of those products and services and resources over time on a utility bill.

(b) For purposes of this Section:

"Capital provider" means an entity that provides funds to pay the initial costs of the energy efficiency measures and demand response resources installed through the on-bill financing program created pursuant to this Section.

"Certification agent" means an entity designated by the Department to implement a system of energy efficiency and demand response on-bill financing programs.

"Certified contractor" means a person authorized by a certification agent to identify or develop, market, and install energy efficiency measures and renewable energy and demand response resources in programs established under this Section.

"Cost-effective measures" means those energy efficiency products and services, and those renewable energy and demand response resources, identified by the certification agent to have estimated electricity or gas savings, which are determined by rates in effect at the time of purchase, that are sufficient to cover the costs of implementing the measures, including financing charges and program fees, through payments of no more than three-quarters of the estimated savings and over a period no greater than three-quarters of the estimated useful life of the measure. Payment for a measure made by a customer at the time of installation may be deducted from the cost of the measure in determining whether the measure is cost-effective.

"Demand response resources" means tools and devices, including recording-demand meters, that allow a customer to better control energy use in response to price changes.

"Department" means the Department of Commerce and Economic Opportunity.

"Energy efficiency" means the reduction in energy usage by installation of energy-saving devices, materials, appliances or processes, while maintaining comparable light, power, heat, and cooling previously enjoyed.

"Energy efficiency, renewable energy, and demand response on-bill financing system" means a market-based system through which electric and gas utility customers may purchase cost-effective energy efficiency measures and demand response resources with no required upfront payment, and pay the cost of the energy efficiency measures and demand response resources over time on their electric or gas bill after independent certification that the measures and resources are appropriate and that estimated savings will exceed payments. The system assigns the obligation of repayment for permanent measures that continue to provide benefits of energy savings, and for resources, to the meter location

"Energy efficiency, renewable energy, and demand response tariff" means a tariff developed under this Section that defines the requirements for and operational arrangements between and among purchasers of energy efficiency products and services and renewable energy and demand response resources, sellers and installers of the products and services and resources, capital providers who provide financing for the initial costs of these products and services and resources, including vendors who finance the sale and installation of their products, services, and resources, public utilities, and certification agents.

"Permanent measures" means energy efficiency, renewable energy and demand response measures that, as determined by the certification agent, are likely to remain in the premises where installed.

(c) Not later than January 2, 2008, the Department, in cooperation with the Illinois Commerce Commission, shall establish one or more pilot programs through which certain customers of a public utility may be eligible to have cost-effective energy efficiency, renewable energy, or demand response measures that may be installed at the customer's location by a certified contractor. Those customers shall not be required to make any up-front payment for the installation, and may pay the cost of the energy efficiency, renewable energy, or demand response measures over time on a utility bill.

No later than January 2, 2011, the Department shall make an energy efficiency, renewable energy, and demand response on-bill financing system available to all public utility customers in the State. The Department shall monitor and evaluate the effects of the energy efficiency, renewable energy, and demand response measures installed pursuant to the programs established under this Section, and shall issue a report to the Governor and General Assembly on its findings every 2 years beginning in January 2010. This report shall describe, at a minimum, the nature of the measures installed, estimated energy and costs savings from the measures, the effects of reduced energy use on utility costs, and the effects of reduced energy use on the environment.

(d) Within 30 days after the effective date of this amendatory Act of the 95th General Assembly, the Department shall convene and provide staff support to an ad hoc task force comprised of the Illinois Commerce Commission, governments from municipalities with more than 1,000,000 residents, governments from municipalities with less than 1,000,000 residents, representatives of consumer, utility, energy efficiency, renewable energy, and demand response resource vendors, financial institutions, and other relevant interests, which shall advise the Department on the design of an energy efficiency, renewable energy, and demand response on-bill financing system including, but not limited to, the following considerations:

(1) criteria for selection of certification agents to be appointed by the Department;

(2) guidelines for financing of measures and resources installed under an energy efficiency, renewable energy, and demand response resources tariff;

(3) criteria and standards for qualified cost-effective energy efficiency, renewable energy and demand response resources;

(4) qualifications of vendors that will market and install efficiency products and services and renewable energy and demand response resources;

(5) rules for recovering costs for cost-effective energy efficiency measures, renewable energy, and demand response resources when the property where the measures or resources have been implemented transfers ownership;

(6) terms for the establishment of energy efficiency, renewable energy, and demand response resources tariffs in markets throughout the State;

(7) sample contracts and agreements necessary to implement energy efficiency, renewable energy, and demand response resources tariffs throughout the State;

(8) a recommended budget and funding sources to cover the costs to establish and operate an energy efficiency, renewable energy, and demand response resources on-bill financing system throughout the State; and

(9) cost estimates and plans to modify utility billing systems to include billing and collection capabilities for measures and resources installed under an energy efficiency, renewable energy, and demand response tariff.

(e) The Department shall designate, and subject to appropriations for this purpose shall contract with, certification agents to implement energy efficiency, renewable energy, and demand response on-bill financing systems. A certification agent designated by the Department under this Section:

(1) may be for a specified geographic areas of the State, or for specific classes of customers, or both;

(2) shall be qualified by relevant experience and expertise; and

(3) shall have general responsibility for the implementation and operation of an energy efficiency, renewable energy, and demand response resources on-bill financing system, including such duties as the Department assigns it through contract.

Section 10. The Public Utilities Act is amended by adding Section 4-204.5 as follows:

(220 ILCS 5/4-204.5 new)

Sec. 4-204.5. Energy efficiency, renewable energy, and demand response on-bill financing programs.

(a) The Commission shall, not later than November 1, 2007, issue an order or orders that: (i) will allow certain customers of a public utility in Illinois to purchase cost-effective energy efficiency measures, renewable energy, and demand response resources under an energy efficiency and demand response resources tariff as part of a pilot program established under Section 605-975 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois; and (ii) require each public utility to file and maintain an energy efficiency, renewable energy, and demand response tariff or tariffs in accordance with this Section no later than January 2, 2009.

(b) Each public utility shall file and maintain an energy efficiency, renewable energy, and demand response tariff or tariffs in accordance with this Section and any applicable order of the Commission to allow any of its customers to pay over time on the utility bill for cost-effective energy efficiency measures, renewable energy, demand response resources as provided in Section 605-975 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. An electric utility may include gas saving measures under its energy efficiency, renewable energy, and demand response resources tariff, and a gas distribution utility may include electricity saving measures under its energy efficiency, renewable energy, and demand response resources tariff. Disconnection for non-payment and treatment of bad debt under such a tariff will be subject to the same rules and regulations as other tariffs offered by the utility. To reduce bad debt, the Commission may direct public utilities to extend the payment term as necessary to recover any missed payments or costs needed to repair measures providing the payment term never exceeds the useful life of the measure.

(c) A public utility shall be entitled to recover reasonable costs incurred in complying with this Section and Section 605-975 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois.

Section 99. Effective date. This Act takes effect upon becoming law.