SB2485ham001 96TH GENERAL ASSEMBLY

Electric Generation & Commerce Committee

Filed: 11/29/2010

09600SB2485ham001 LRB096 14944 ASK 44172 a

AMENDMENT TO SENATE BILL 2485

AMENDMENT NO. ______. Amend Senate Bill 2485 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Power Agency Act is amended by changing Sections 1-10, 1-20, and 1-75 and by adding Sections 1-76, 1-76.5, 1-77, 1-78, and 1-79 as follows:

(20 ILCS 3855/1-10)

Sec. 1-10. Definitions.

"Agency" means the Illinois Power Agency.

"Agency loan agreement" means any agreement pursuant to which the Illinois Finance Authority agrees to loan the proceeds of revenue bonds issued with respect to a project to the Agency upon terms providing for loan repayment installments at least sufficient to pay when due all principal of, interest and premium, if any, on those revenue bonds, and providing for maintenance, insurance, and other matters in respect of the project.

"Authority" means the Illinois Finance Authority.

"Clean coal energy" means all energy produced by the initial clean coal facility.

"Clean coal facility" means an electric generating facility that uses primarily coal as a feedstock and that captures and sequesters carbon emissions at the following levels: at least 50% of the total carbon dioxide emissions that the facility would otherwise emit if, at the time construction commences, the facility is scheduled to commence operation before 2016, at least 70% of the total carbon dioxide emissions that the facility would otherwise emit if, at the time construction commences, the facility is scheduled to commence operation during 2016 or 2017, and at least 90% of the total carbon dioxide emissions that the facility would otherwise emit if, at the time construction commences, the facility is scheduled to commence operation after 2017. The power block of the clean coal facility shall not exceed allowable emission rates for sulfur dioxide, nitrogen oxides, carbon monoxide, particulates and mercury for a natural gas-fired combined-cycle facility the same size as and in the same location as the clean coal facility at the time the clean coal facility obtains an approved air permit. All coal used by a clean coal facility shall have high volatile bituminous rank and greater than 1.7 pounds of sulfur per million btu content, unless the clean coal facility does not use gasification technology and was operating as a conventional coal-fired electric generating facility on June 1, 2009 (the effective date of Public Act 95-1027).

"Clean coal SNG facility" means a facility that uses a gasification process to produce substitute natural gas, that sequesters at least 90% of the total carbon dioxide emissions that the facility would otherwise emit and that uses petroleum coke or coal as a feedstock, with all such coal having a high bituminous rank and greater than 1.7 pounds of sulfur per million btu content.

"Commission" means the Illinois Commerce Commission.

"Costs incurred in connection with the development and construction of a facility" means:

(1) the cost of acquisition of all real property and improvements in connection therewith and equipment and other property, rights, and easements acquired that are deemed necessary for the operation and maintenance of the facility;

(2) financing costs with respect to bonds, notes, and other evidences of indebtedness of the Agency;

(3) all origination, commitment, utilization, facility, placement, underwriting, syndication, credit enhancement, and rating agency fees;

(4) engineering, design, procurement, consulting, legal, accounting, title insurance, survey, appraisal, escrow, trustee, collateral agency, interest rate hedging, interest rate swap, capitalized interest and other financing costs, and other expenses for professional services; and

(5) the costs of plans, specifications, site study and investigation, installation, surveys, other Agency costs and estimates of costs, and other expenses necessary or incidental to determining the feasibility of any project, together with such other expenses as may be necessary or incidental to the financing, insuring, acquisition, and construction of a specific project and placing that project in operation.

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

"Director" means the Director of the Illinois Power Agency.

"Demand-response" means measures that decrease peak electricity demand or shift demand from peak to off-peak periods.

"Energy efficiency" means measures that reduce the amount of electricity or natural gas required to achieve a given end use.

"Electric utility" has the same definition as found in Section 16-102 of the Public Utilities Act.

"Facility" means an electric generating unit or a co-generating unit that produces electricity along with related equipment necessary to connect the facility to an electric transmission or distribution system.

"Governmental aggregator" means one or more units of local government that individually or collectively procure electricity to serve residential retail electrical loads located within its or their jurisdiction.

"Initial clean coal facility" means an electric generating facility using gasification technology that: (1) has a nameplate capacity of at least 500 MW; (2) irrevocably commits in its proposed sourcing agreement to use coal for at least 50% of the total feedstock over the term of a sourcing agreement, with all coal having high volatile bituminous rank and greater than 1.7 pounds of sulfur per million btu content; (3) is designed to capture and sequester at least 90% of the carbon dioxide emissions that the portion of the facility that produces SNG would otherwise emit and at least 50% of the total carbon dioxide emissions that the facility as a whole would otherwise emit; (4) absent an appeal of a permit or regulatory order, is reasonably capable of achieving commercial operation by no later than 5 years after the execution of the sourcing agreement; (5) has a feasible financing plan that is expected to enable such clean coal facility to borrow an amount equal to at least 55% of its capital structure at an interest rate of less than 6% per annum; (6) has completed system impact studies for the delivery of power in the applicable amounts to Commonwealth Edison Company and Ameren Illinois; and (7) has a power block designed not to exceed allowable emission rates for sulfur dioxide, nitrogen oxides, carbon monoxide, particulates, and mercury for a natural gas-fired combined-cycle facility the same size as and in the same location as the electric generating facility at the time the electric generating facility obtains an approved air permit.

"Local government" means a unit of local government as defined in Article VII of Section 1 of the Illinois Constitution.

"Municipality" means a city, village, or incorporated town.

"Person" means any natural person, firm, partnership, corporation, either domestic or foreign, company, association, limited liability company, joint stock company, or association and includes any trustee, receiver, assignee, or personal representative thereof.

"Project" means the planning, bidding, and construction of a facility.

"Public utility" has the same definition as found in Section 3-105 of the Public Utilities Act.

"Real property" means any interest in land together with all structures, fixtures, and improvements thereon, including lands under water and riparian rights, any easements, covenants, licenses, leases, rights-of-way, uses, and other interests, together with any liens, judgments, mortgages, or other claims or security interests related to real property.

"Renewable energy credit" means a tradable credit that represents the environmental attributes of a certain amount of energy produced from a renewable energy resource.

"Renewable energy resources" includes energy and its associated renewable energy credit or renewable energy credits from wind, solar thermal energy, photovoltaic cells and panels, biodiesel, crops and untreated and unadulterated organic waste biomass, tree waste, hydropower that does not involve new construction or significant expansion of hydropower dams, and other alternative sources of environmentally preferable energy. For purposes of this Act, landfill gas produced in the State is considered a renewable energy resource. "Renewable energy resources" does not include the incineration or burning of tires, garbage, general household, institutional, and commercial waste, industrial lunchroom or office waste, landscape waste other than tree waste, railroad crossties, utility poles, or construction or demolition debris, other than untreated and unadulterated waste wood.

"Revenue bond" means any bond, note, or other evidence of indebtedness issued by the Authority, the principal and interest of which is payable solely from revenues or income derived from any project or activity of the Agency.

"Sequester" means permanent storage of carbon dioxide only as approved by the Commission pursuant to Section 1-77 of this Act by injecting it into a saline aquifer, a depleted gas reservoir, or an oil reservoir, directly or through an enhanced oil recovery process that may involve intermediate storage in a salt dome, regardless of whether these activities are conducted by a clean coal facility, initial clean coal facility, clean coal SNG facility, or a party with which a clean coal facility, initial clean coal facility, or clean coal SNG facility has contracted for such purposes.

"Sourcing Servicing agreement" means (i) in the case of an electric utility, an agreement between the owner of a clean coal facility and such electric utility, which agreement shall have terms and conditions meeting the requirements of paragraph (3) of subsection (d) of Section 1-75, and (ii) in the case of an alternative retail electric supplier, an agreement between the owner of a clean coal facility and such alternative retail electric supplier, which agreement shall have terms and conditions meeting the requirements of Section 16-115(d)(5) of the Public Utilities Act.

"Substitute natural gas" or "SNG" means a gas manufactured by gasification of hydrocarbon feedstock, which is substantially interchangeable in use and distribution with conventional natural gas.

"Total resource cost test" or "TRC test" means a standard that is met if, for an investment in energy efficiency or demand-response measures, 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 program to the net present value of the total costs as calculated over the lifetime of the measures. A total resource cost test compares the sum of avoided electric 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 natural gas utility costs, to the sum of all incremental costs of end-use measures that are implemented due to the program (including both utility and participant contributions), plus costs to administer, deliver, and evaluate each demand-side program, to quantify the net savings obtained by substituting the demand-side program for supply resources. In calculating avoided costs of power and energy that an electric utility would otherwise have had to acquire, reasonable estimates shall be included of financial costs likely to be imposed by future regulations and legislation on emissions of greenhouse gases.

(Source: P.A. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09; 95-1027, eff. 6-1-09; 96-33, eff. 7-10-09; 96-159, eff. 8-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10.)

(20 ILCS 3855/1-20)

Sec. 1-20. General powers of the Agency.

(a) The Agency is authorized to do each of the following:

(1) Develop electricity procurement plans to ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time, taking into account any benefits of price stability, for electric utilities that on December 31, 2005 provided electric service to at least 100,000 customers in Illinois. The procurement plans shall be updated on an annual basis and shall include electricity generated from renewable resources sufficient to achieve the standards specified in this Act.

(2) Conduct competitive procurement processes to procure the supply resources identified in the procurement plan, pursuant to Section 16-111.5 of the Public Utilities Act.

(3) Develop electric generation and co-generation facilities that use indigenous coal or renewable resources, or both, financed with bonds issued by the Illinois Finance Authority.

(4) Supply electricity from the Agency's facilities at cost to one or more of the following: municipal electric systems, governmental aggregators, or rural electric cooperatives in Illinois.

(b) Except as otherwise limited by this Act, the Agency has all of the powers necessary or convenient to carry out the purposes and provisions of this Act, including without limitation, each of the following:

(1) To have a corporate seal, and to alter that seal at pleasure, and to use it by causing it or a facsimile to be affixed or impressed or reproduced in any other manner.

(2) To use the services of the Illinois Finance Authority necessary to carry out the Agency's purposes.

(3) To negotiate and enter into loan agreements and other agreements with the Illinois Finance Authority.

(4) To obtain and employ personnel and hire consultants that are necessary to fulfill the Agency's purposes, and to make expenditures for that purpose within the appropriations for that purpose.

(5) To purchase, receive, take by grant, gift, devise, bequest, or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use, and otherwise deal in and with, real or personal property whether tangible or intangible, or any interest therein, within the State.

(6) To acquire real or personal property, whether tangible or intangible, including without limitation property rights, interests in property, franchises, obligations, contracts, and debt and equity securities, and to do so by the exercise of the power of eminent domain in accordance with Section 1-21; except that any real property acquired by the exercise of the power of eminent domain must be located within the State.

(7) To sell, convey, lease, exchange, transfer, abandon, or otherwise dispose of, or mortgage, pledge, or create a security interest in, any of its assets, properties, or any interest therein, wherever situated.

(8) To purchase, take, receive, subscribe for, or otherwise acquire, hold, make a tender offer for, vote, employ, sell, lend, lease, exchange, transfer, or otherwise dispose of, mortgage, pledge, or grant a security interest in, use, and otherwise deal in and with, bonds and other obligations, shares, or other securities (or interests therein) issued by others, whether engaged in a similar or different business or activity.

(9) To make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of the powers and functions of the Agency under this Act, including contracts with any person, local government, State agency, or other entity; and all State agencies and all local governments are authorized to enter into and do all things necessary to perform any such agreement, contract, or other instrument with the Agency. No such agreement, contract, or other instrument shall exceed 40 years.

(10) To lend money, invest and reinvest its funds in accordance with the Public Funds Investment Act, and take and hold real and personal property as security for the payment of funds loaned or invested.

(11) To borrow money at such rate or rates of interest as the Agency may determine, issue its notes, bonds, or other obligations to evidence that indebtedness, and secure any of its obligations by mortgage or pledge of its real or personal property, machinery, equipment, structures, fixtures, inventories, revenues, grants, and other funds as provided or any interest therein, wherever situated.

(12) To enter into agreements with the Illinois Finance Authority to issue bonds whether or not the income therefrom is exempt from federal taxation.

(13) To procure insurance against any loss in connection with its properties or operations in such amount or amounts and from such insurers, including the federal government, as it may deem necessary or desirable, and to pay any premiums therefor.

(14) To negotiate and enter into agreements with trustees or receivers appointed by United States bankruptcy courts or federal district courts or in other proceedings involving adjustment of debts and authorize proceedings involving adjustment of debts and authorize legal counsel for the Agency to appear in any such proceedings.

(15) To file a petition under Chapter 9 of Title 11 of the United States Bankruptcy Code or take other similar action for the adjustment of its debts.

(16) To enter into management agreements for the operation of any of the property or facilities owned by the Agency.

(17) To enter into an agreement to transfer and to transfer any land, facilities, fixtures, or equipment of the Agency to one or more municipal electric systems, governmental aggregators, or rural electric agencies or cooperatives, for such consideration and upon such terms as the Agency may determine to be in the best interest of the citizens of Illinois.

(18) To enter upon any lands and within any building whenever in its judgment it may be necessary for the purpose of making surveys and examinations to accomplish any purpose authorized by this Act.

(19) To maintain an office or offices at such place or places in the State as it may determine.

(20) To request information, and to make any inquiry, investigation, survey, or study that the Agency may deem necessary to enable it effectively to carry out the provisions of this Act.

(21) To accept and expend appropriations.

(22) To engage in any activity or operation that is incidental to and in furtherance of efficient operation to accomplish the Agency's purposes.

(23) To adopt, revise, amend, and repeal rules with respect to its operations, properties, and facilities as may be necessary or convenient to carry out the purposes of this Act, subject to the provisions of the Illinois Administrative Procedure Act and Sections 1-22 and 1-35 of this Act.

(24) To establish and collect charges and fees as described in this Act.

(25) To conduct competitive gasification feedstock procurement processes to procure the feedstocks for the initial clean coal facility in accordance with the requirements of Section 1-78 of this Act. To manage procurement of substitute natural gas from a facility that meets the criteria specified in subsection (a) of Section 1-58 of this Act, on terms and conditions that may be approved by the Agency pursuant to subsection (d) of Section 1-58 of this Act, to support the operations of State agencies and local governments that agree to such terms and conditions. This procurement process is not subject to the Procurement Code.

(26) To review, revise, and approve sourcing agreements and mediate and resolve disputes between electric utilities or alternative retail electric suppliers and the initial clean coal facility pursuant to paragraph (4) of subsection (d) of Section 1-75 of this Act.

(Source: P.A. 95-481, eff. 8-28-07; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10.)

(20 ILCS 3855/1-75)

Sec. 1-75. Planning and Procurement Bureau. The Planning and Procurement Bureau has the following duties and responsibilities:

(a) The Planning and Procurement Bureau shall each year, beginning in 2008, develop procurement plans and conduct competitive procurement processes in accordance with the requirements of Section 16-111.5 of the Public Utilities Act for the eligible retail customers of electric utilities that on December 31, 2005 provided electric service to at least 100,000 customers in Illinois. For the purposes of this Section, the term "eligible retail customers" has the same definition as found in Section 16-111.5(a) of the Public Utilities Act.

(1) The Agency shall each year, beginning in 2008, as needed, issue a request for qualifications for experts or expert consulting firms to develop the procurement plans in accordance with Section 16-111.5 of the Public Utilities Act. In order to qualify an expert or expert consulting firm must have:

(A) direct previous experience assembling large-scale power supply plans or portfolios for end-use customers;

(B) an advanced degree in economics, mathematics, engineering, risk management, or a related area of study;

(C) ten 10 years of experience in the electricity sector, including managing supply risk;

(D) expertise in wholesale electricity market rules, including those established by the Federal Energy Regulatory Commission and regional transmission organizations;

(E) expertise in credit protocols and familiarity with contract protocols;

(F) adequate resources to perform and fulfill the required functions and responsibilities; and

(G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the affected electric utilities.

(2) The Agency shall each year, as needed, issue a request for qualifications for a procurement administrator to conduct the competitive procurement processes in accordance with Section 16-111.5 of the Public Utilities Act. In order to qualify an expert or expert consulting firm must have:

(A) direct previous experience administering a large-scale competitive procurement process;

(B) an advanced degree in economics, mathematics, engineering, or a related area of study;

(C) ten 10 years of experience in the electricity sector, including risk management experience;

(D) expertise in wholesale electricity market rules, including those established by the Federal Energy Regulatory Commission and regional transmission organizations;

(E) expertise in credit and contract protocols;

(F) adequate resources to perform and fulfill the required functions and responsibilities; and

(G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the affected electric utilities.

(3) The Agency shall provide affected utilities and other interested parties with the lists of qualified experts or expert consulting firms identified through the request for qualifications processes that are under consideration to develop the procurement plans and to serve as the procurement administrator. The Agency shall also provide each qualified expert's or expert consulting firm's response to the request for qualifications. All information provided under this subparagraph shall also be provided to the Commission. The Agency may provide by rule for fees associated with supplying the information to utilities and other interested parties. These parties shall, within 5 business days, notify the Agency in writing if they object to any experts or expert consulting firms on the lists. Objections shall be based on:

(A) failure to satisfy qualification criteria;

(B) identification of a conflict of interest; or

(C) evidence of inappropriate bias for or against potential bidders or the affected utilities.

The Agency shall remove experts or expert consulting firms from the lists within 10 days if there is a reasonable basis for an objection and provide the updated lists to the affected utilities and other interested parties. If the Agency fails to remove an expert or expert consulting firm from a list, an objecting party may seek review by the Commission within 5 days thereafter by filing a petition, and the Commission shall render a ruling on the petition within 10 days. There is no right of appeal of the Commission's ruling.

(4) The Agency shall issue requests for proposals to the qualified experts or expert consulting firms to develop a procurement plan for the affected utilities and to serve as procurement administrator.

(5) The Agency shall select an expert or expert consulting firm to develop procurement plans based on the proposals submitted and shall award one-year contracts to those selected with an option for the Agency for a one-year renewal.

(6) The Agency shall select an expert or expert consulting firm, with approval of the Commission, to serve as procurement administrator based on the proposals submitted. If the Commission rejects, within 5 days, the Agency's selection, the Agency shall submit another recommendation within 3 days based on the proposals submitted. The Agency shall award a one-year contract to the expert or expert consulting firm so selected with Commission approval with an option for the Agency for a one-year renewal.

(a-1) The Planning and Procurement Bureau shall each year beginning in 2012 develop feedstock procurement plans and conduct competitive feedstock procurement processes in accordance with the requirements of Section 1-78 of this Act.

(1) The Agency shall, at least once every 5 years beginning in 2012, issue a request for qualifications for experts or expert consulting firms to develop the feedstock procurement plans in accordance with Section 1-78 of this Act. In order to qualify, an expert or, in the case of an expert consulting firm, the individual who shall be directly responsible for the work, must have:

(A) direct previous experience assembling large scale feedstock supply plans or portfolios involving coal and natural gas for industrial customers;

(B) an advanced degree in economics, mathematics, engineering, risk management, or a related area of study;

(C) ten years of experience in the energy sector, including coal and gas procurement and managing fuel supply risk;

(D) expertise in the feedstock markets, which may be particularized to the specific type of feedstock to be purchased in that procurement event;

(E) expertise in credit protocols and familiarity with contract protocols;

(F) adequate resources to perform and fulfill the required functions and responsibilities; and

(G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the initial clean coal facility.

(2) The Agency shall each year beginning in 2012, as needed, issue a request for qualifications for a feedstock procurement administrator to conduct the competitive feedstock procurement processes in accordance with Section 1-78 of this Act. In order to qualify, an expert or, in the case of an expert consulting firm, the individual who shall be directly responsible for the work, must have:

(A) direct previous experience administering a large scale competitive feedstock procurement process involving coal and natural gas;

(B) an advanced degree in economics, mathematics, engineering, or a related area of study;

(C) ten years of experience in the energy sector, including coal and gas procurement and managing fuel supply risk;

(D) expertise in feedstock market rules and practices, which may be particularized to the specific type of feedstock to be purchased in that procurement event;

(E) expertise in credit and contract protocols;

(F) adequate resources to perform and fulfill the required functions and responsibilities; and

(G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the initial clean coal facility.

(3) The Agency shall provide the initial clean coal facility and other interested parties with the lists of qualified experts or expert consulting firms identified through the request for qualifications processes that are under consideration to develop the feedstock procurement plans and to serve as the feedstock procurement administrator. The Agency shall also provide the initial clean coal facility and other interested parties with each qualified expert's or expert consulting firm's response to the request for qualifications. All information provided under this subparagraph (3) shall also be provided to the Commission. The Agency may provide by rule for fees associated with supplying the information to the initial clean coal facility and other interested parties. The initial clean coal facility and other interested parties shall, within 5 business days after receiving the lists and information, notify the Agency in writing if they object to any experts or expert consulting firms on the lists. Objections shall be based on:

(A) failure to satisfy qualification criteria;

(B) identification of a conflict of interest; or

(C) evidence of inappropriate bias for or against potential bidders or the initial clean coal facility.

The Agency shall remove experts or expert consulting firms from the lists within 10 days after receiving the objections if there is a reasonable basis for an objection and provide the updated lists to the initial clean coal facility and other interested parties. If the Agency fails to remove an expert or expert consulting firm from a list, then an objecting party may seek review by the Commission within 5 days thereafter by filing a petition, and the Commission shall render a ruling on the petition within 10 days. There is no right of appeal of the Commission's ruling.

(4) The Agency shall issue requests for proposals to the qualified experts or expert consulting firms to develop a feedstock procurement plan for the initial clean coal facility and to serve as feedstock procurement administrator.

(5) The Agency shall select an expert or expert consulting firm to develop feedstock procurement plans based on the proposals submitted and shall award at least one-year contracts to those selected with an option for the Agency for renewal for an additional length of time equal to the term of the contract.

(6) The Agency shall select, with approval of the Commission, an expert or expert consulting firm to serve as feedstock procurement administrator based on the proposals submitted. If the Commission rejects the Agency's selection within 5 days after being notified of the Agency's selection, then the Agency shall submit another recommendation within 3 days after the Commission's rejection based on the proposals submitted. The Agency shall award a 3-year contract to the expert or expert consulting firm so selected with Commission approval with an option for the Agency for a one-year renewal.

(b) The experts or expert consulting firms retained by the Agency under subsection (a) shall, as appropriate, prepare procurement plans, and conduct a competitive procurement process as prescribed in Section 16-111.5 of the Public Utilities Act, to ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time, taking into account any benefits of price stability, for eligible retail customers of electric utilities that on December 31, 2005 provided electric service to at least 100,000 customers in the State of Illinois.

(b-1) The experts or expert consulting firms retained by the Agency pursuant to subsection (a-1) shall, as appropriate, prepare feedstock procurement plans, and conduct a competitive feedstock procurement process as prescribed in Section 1-78 of this Act to ensure adequate, reliable, affordable feedstocks, taking into account any benefits of price stability, for the initial clean coal facility.

(c) Renewable portfolio standard.

(1) The procurement plans shall include cost-effective renewable energy resources. A minimum percentage of each utility's total supply to serve the load of eligible retail customers, as defined in Section 16-111.5(a) of the Public Utilities Act, procured for each of the following years shall be generated from cost-effective renewable energy resources: at least 2% by June 1, 2008; at least 4% by June 1, 2009; at least 5% by June 1, 2010; at least 6% by June 1, 2011; at least 7% by June 1, 2012; at least 8% by June 1, 2013; at least 9% by June 1, 2014; at least 10% by June 1, 2015; and increasing by at least 1.5% each year thereafter to at least 25% by June 1, 2025. To the extent that it is available, at least 75% of the renewable energy resources used to meet these standards shall come from wind generation and, beginning on June 1, 2011, at least the following percentages of the renewable energy resources used to meet these standards shall come from photovoltaics on the following schedule: 0.5% by June 1, 2012, 1.5% by June 1, 2013; 3% by June 1, 2014; and 6% by June 1, 2015 and thereafter. For purposes of this subsection (c), "cost-effective" means that the costs of procuring renewable energy resources do not cause the limit stated in paragraph (2) of this subsection (c) to be exceeded and do not exceed benchmarks based on market prices for renewable energy resources in the region, which shall be developed by the procurement administrator, in consultation with the Commission staff, Agency staff, and the procurement monitor and shall be subject to Commission review and approval.

(2) For purposes of this subsection (c), the required procurement of cost-effective renewable energy resources for a particular year shall be measured as a percentage of the actual amount of electricity (megawatt-hours) supplied by the electric utility to eligible retail customers in the planning year ending immediately prior to the procurement. For purposes of this subsection (c), the amount paid per kilowatthour means the total amount paid for electric service expressed on a per kilowatthour basis. For purposes of this subsection (c), the total amount paid for electric service includes without limitation amounts paid for supply, transmission, distribution, surcharges, and add-on taxes.

Notwithstanding the requirements of this subsection (c), the total of renewable energy resources procured pursuant to the procurement plan for any single year shall be reduced by an amount necessary to limit the annual estimated average net increase due to the costs of these resources included in the amounts paid by eligible retail customers in connection with electric service to:

(A) in 2008, no more than 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007;

(B) in 2009, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2008 or 1% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007;

(C) in 2010, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009 or 1.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007;

(D) in 2011, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2010 or 2% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007; and

(E) thereafter, the amount of renewable energy resources procured pursuant to the procurement plan for any single year shall be reduced by an amount necessary to limit the estimated average net increase due to the cost of these resources included in the amounts paid by eligible retail customers in connection with electric service to no more than the greater of 2.015% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007 or the incremental amount per kilowatthour paid for these resources in 2011.

No later than June 30, 2011, the Commission shall review the limitation on the amount of renewable energy resources procured pursuant to this subsection (c) and report to the General Assembly its findings as to whether that limitation unduly constrains the procurement of cost-effective renewable energy resources.

(3) Through June 1, 2011, renewable energy resources shall be counted for the purpose of meeting the renewable energy standards set forth in paragraph (1) of this subsection (c) only if they are generated from facilities located in the State, provided that cost-effective renewable energy resources are available from those facilities. If those cost-effective resources are not available in Illinois, they shall be procured in states that adjoin Illinois and may be counted towards compliance. If those cost-effective resources are not available in Illinois or in states that adjoin Illinois, they shall be purchased elsewhere and shall be counted towards compliance. After June 1, 2011, cost-effective renewable energy resources located in Illinois and in states that adjoin Illinois may be counted towards compliance with the standards set forth in paragraph (1) of this subsection (c). If those cost-effective resources are not available in Illinois or in states that adjoin Illinois, they shall be purchased elsewhere and shall be counted towards compliance.

(4) The electric utility shall retire all renewable energy credits used to comply with the standard.

(5) Beginning with the year commencing June 1, 2010, an electric utility subject to this subsection (c) shall apply the lesser of the maximum alternative compliance payment rate or the most recent estimated alternative compliance payment rate for its service territory for the corresponding compliance period, established pursuant to subsection (d) of Section 16-115D of the Public Utilities Act to its retail customers that take service pursuant to the electric utility's hourly pricing tariff or tariffs. The electric utility shall retain all amounts collected as a result of the application of the alternative compliance payment rate or rates to such customers, and, beginning in 2011, the utility shall include in the information provided under item (1) of subsection (d) of Section 16-111.5 of the Public Utilities Act the amounts collected under the alternative compliance payment rate or rates for the prior year ending May 31. Notwithstanding any limitation on the procurement of renewable energy resources imposed by item (2) of this subsection (c), the Agency shall increase its spending on the purchase of renewable energy resources to be procured by the electric utility for the next plan year by an amount equal to the amounts collected by the utility under the alternative compliance payment rate or rates in the prior year ending May 31.

(d) Clean coal portfolio standard.

(1) The procurement plans shall include cost-effective electricity generated using clean coal. Each electric utility shall enter into one or more sourcing agreements with the initial clean coal facility, as provided in paragraph (3) of this subsection (d), covering electricity generated by the initial clean coal facility representing (A) at least 5% of that each utility's total supply to serve the load of eligible retail electric customers in the immediately preceding year 2015 and each year thereafter, as described in paragraph (3) of this subsection (d), or (B) such lesser amount as may be available from the initial clean coal facility, reduced by subject to the limits on the amount of power to be purchased specified in paragraph (2) of this subsection (d). It is the goal of the State that by January 1, 2025, 25% of the electricity used in the State shall be generated by cost-effective clean coal facilities. Unless otherwise noted, for For purposes of this subsection (d), "cost-effective" means that the expenditures pursuant to such sourcing agreements do not cause the limit stated in paragraph (2) of this subsection (d) to be exceeded and do not exceed cost-based benchmarks, which shall be developed to assess all expenditures pursuant to such sourcing agreements covering electricity generated by clean coal facilities, other than the initial clean coal facility, by the procurement administrator, in consultation with the Commission staff, Agency staff, and the procurement monitor and shall be subject to Commission review and approval.

(A) A utility party to a sourcing agreement shall immediately retire any emission credits that it receives in connection with the electricity covered by such agreement.

(B) Utilities shall maintain adequate records documenting the purchases under the sourcing agreement to comply with this subsection (d) and shall file an accounting with the load forecast that must be filed with the Agency by July 15 of each year, in accordance with subsection (d) of Section 16-111.5 of the Public Utilities Act.

(C) A utility shall be deemed to have complied with the clean coal portfolio standard specified in this subsection (d) if the utility enters into a sourcing agreement as required by this subsection (d).

(2) For purposes of this subsection (d), the required execution of sourcing agreements with the initial clean coal facility for a particular year shall be measured as a percentage of the actual amount of electricity (megawatt-hours) supplied by the electric utility to eligible retail electric customers in the immediately preceding year planning year ending immediately prior to the agreement's execution. For purposes of this subsection (d), the amount paid per kilowatthour means the total amount paid for electric service expressed on a per kilowatthour basis. For purposes of this subsection (d), the total amount paid for electric service includes without limitation amounts paid for supply, transmission, distribution, surcharges and add-on taxes.

Notwithstanding the requirements of this subsection (d), the total amount purchased paid under sourcing agreements with the initial clean coal facility clean coal facilities pursuant to the procurement plan for any given year shall be reduced by an amount necessary to limit the annual estimated average net increase due to the costs of these resources included in the amounts paid by eligible retail customers in connection with electric service to:

(A) in 2010, no more than 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009;

(B) in 2011, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2010 or 1% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009;

(C) in 2012, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2011 or 1.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009;

(D) in 2013, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2012 or 2% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009; and

(E) thereafter, the total amount purchased paid under sourcing agreements with the initial clean coal facility facilities pursuant to the procurement plan for any single year shall be reduced by an amount necessary to limit the estimated average net increase due to the cost of these resources included in the amounts paid by eligible retail customers in connection with electric service to no more than the greater of (i) 2.015% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009 or (ii) the incremental amount per kilowatthour paid for these resources in 2013. These requirements may be altered only as provided by statute. No later than June 30, 2016 2015, the Commission shall review the limitation on the total amount purchased paid under sourcing agreements, if any, with initial clean coal facilities pursuant to this subsection (d) and report to the General Assembly its findings as to the effect of the whether that limitation on the initial clean coal facility, electric utilities, alternative retail electric suppliers, and customers of the electric utilities and the alternative retail electric suppliers unduly constrains the amount of electricity generated by cost-effective clean coal facilities that is covered by sourcing agreements.

(3) Initial clean coal facility. In order to promote development of clean coal facilities in Illinois, each electric utility subject to this Section shall execute a sourcing agreement to source electricity from the initial clean coal facility. The Agency shall accept applications to be designated the initial clean coal facility, which shall include a proposed sourcing agreement in accordance with the requirements of this Section and information showing that the applicant meets the other criteria set out in the definition of initial clean coal facility provided in Section 1-10 of this Act, for a period of 30 days after the effective date of this amendatory Act of the 96th General Assembly. In the event that more than one proposed initial clean coal facility that meet each of the requirements shall submit a proposed sourcing agreement to the Agency within that time period, the Agency shall select as the initial clean coal facility the electric generating facility that is likely to have the lowest cost of debt comprising 55% of its capital structure. The Agency shall announce the designation of the initial clean coal facility within 45 days after the effective date of this amendatory Act of the 96th General Assembly a proposed clean coal facility in Illinois (the "initial clean coal facility") that will have a nameplate capacity of at least 500 MW when commercial operation commences, that has a final Clean Air Act permit on the effective date of this amendatory Act of the 95th General Assembly, and that will meet the definition of clean coal facility in Section 1-10 of this Act when commercial operation commences. The sourcing agreements with this initial clean coal facility shall be subject to both approval of the initial clean coal facility by the General Assembly and satisfaction of the requirements of paragraph (4) of this subsection (d) and shall be executed within 90 days after any such approval by the General Assembly. The Agency and the Commission shall have authority to inspect all books and records associated with the initial clean coal facility during the term of such a sourcing agreement. A utility's sourcing agreement for electricity produced by the initial clean coal facility shall include:

(A) The price paid for electricity generated by the initial clean coal facility, which shall be determined by the provisions set forth in Section 1-76 of this Act; a formula contractual price (the "contract price") approved pursuant to paragraph (4) of this subsection (d), which shall:

(i) be determined using a cost of service methodology employing either a level or deferred capital recovery component, based on a capital structure consisting of 45% equity and 55% debt, and a return on equity as may be approved by the Federal Energy Regulatory Commission, which in any case may not exceed the lower of 11.5% or the rate of return approved by the General Assembly pursuant to paragraph (4) of this subsection (d); and

(ii) provide that all miscellaneous net revenue, including but not limited to net revenue from the sale of emission allowances, if any, substitute natural gas, if any, grants or other support provided by the State of Illinois or the United States Government, firm transmission rights, if any, by-products produced by the facility, energy or capacity derived from the facility and not covered by a sourcing agreement pursuant to paragraph (3) of this subsection (d) or item (5) of subsection (d) of Section 16-115 of the Public Utilities Act, whether generated from the synthesis gas derived from coal, from SNG, or from natural gas, shall be credited against the revenue requirement for this initial clean coal facility;

(B) power purchase provisions, which shall:

(i) provide that the utility party to such sourcing agreement shall pay the contract price for electricity delivered under such sourcing agreement determined pursuant to subparagraph (A);

(ii) require delivery of electricity by the initial clean coal facility to the regional transmission organization market of the utility that is party to such sourcing agreement;

(iii) require the utility party to such sourcing agreement to buy from the initial clean coal facility in each hour an amount of energy equal to all clean coal energy made available from the initial clean coal facility during such hour times a fraction, the numerator of which is such utility's retail market sales of electricity (expressed in kilowatthours sold) in the utility's service area in the State during the third month preceding the current prior calendar month and the denominator of which is the total retail market sales of electricity (expressed in kilowatthours sold) in the State by utilities during such third month preceding the current prior month and the sales of electricity (expressed in kilowatthours sold) in the State by alternative retail electric suppliers during the third month preceding the current such prior month that are subject to the requirements of this subsection (d) and paragraph (5) of subsection (d) of Section 16-115 of the Public Utilities Act, provided that the amount purchased by the utility in any year will be limited by paragraph (2) of this subsection (d); and

(iv) be considered pre-existing contracts in such utility's procurement plans for eligible retail customers;

(C) contract for differences provisions, which shall:

(i) require the utility party to such sourcing agreement to contract with the initial clean coal facility in each hour with respect to an amount of energy equal to all clean coal energy made available from the initial clean coal facility during such hour times a fraction, the numerator of which is such utility's retail market sales of electricity (expressed in kilowatthours sold) in the utility's service area territory in the State during the third month preceding the current prior calendar month and the denominator of which is the total retail market sales of electricity (expressed in kilowatthours sold) in the State by utilities during the third month preceding the current such prior month and the sales of electricity (expressed in kilowatthours sold) in the State by alternative retail electric suppliers during such third month preceding the current prior month that are subject to the requirements of this subsection (d) and paragraph (5) of subsection (d) of Section 16-115 of the Public Utilities Act, provided that the amount purchased paid by the utility in any year will be limited by paragraph (2) of this subsection (d);

(ii) provide that the utility's payment obligation in respect of the quantity of electricity determined pursuant to the preceding clause (i) shall be limited to an amount equal to (1) the difference between the contract price determined pursuant to subparagraph (A) of paragraph (3) of this subsection (d) and the day-ahead price for electricity delivered to the regional transmission organization market of the electric utility that is party to such sourcing agreement (or any successor delivery point at which such utility's supply obligations are financially settled on an hourly basis) (the "reference price") on the day preceding the day on which the electricity is delivered to the initial clean coal facility busbar, multiplied by (2) the quantity of electricity determined pursuant to the preceding clause (i); and

(iii) not require the utility to take physical delivery of the electricity produced by the facility;

(D) general provisions, which shall:

(i) specify a term of no more than 30 years, commencing on the commercial operation date of the facility;

(ii) provide that electric utilities shall maintain adequate records documenting purchases under the sourcing agreements entered into to comply with this subsection (d) and shall file an accounting with the load forecast that must be filed with the Agency by July 15 of each year, in accordance with subsection (d) of Section 16-111.5 of the Public Utilities Act.

(iii) provide that all costs associated with the initial clean coal facility will be periodically reported to the Federal Energy Regulatory Commission and to purchasers in accordance with applicable laws governing cost-based wholesale power contracts;

(iv) permit the Illinois Power Agency, if it is so authorized by law, to assume ownership of the initial clean coal facility, without monetary consideration and otherwise on reasonable terms acceptable to the Agency, if the Agency so requests no less than 3 years prior to the end of the stated contract term;

(v) require the owner of the initial clean coal facility to comply with Section 1-76.5 of this Act; provide documentation to the Commission each year , starting in the facility's first year of commercial operation, accurately reporting the quantity of carbon emissions from the facility that have been captured and sequestered and report any quantities of carbon released from the site or sites at which carbon emissions were sequestered in prior years, based on continuous monitoring of such sites. If, in any year after the first year of commercial operation, the owner of the facility fails to demonstrate that the initial clean coal facility captured and sequestered at least 50% of the total carbon emissions that the facility would otherwise emit or that sequestration of emissions from prior years has failed, resulting in the release of carbon dioxide into the atmosphere, the owner of the facility must offset excess emissions. Any such carbon offsets must be permanent, additional, verifiable, real, located within the State of Illinois, and legally and practicably enforceable. The cost of such offsets for the facility that are not recoverable shall not exceed $15 million in any given year. No costs of any such purchases of carbon offsets may be recovered from a utility or its customers. All carbon offsets purchased for this purpose and any carbon emission credits associated with sequestration of carbon from the facility must be permanently retired. The initial clean coal facility shall not forfeit its designation as a clean coal facility if the facility fails to fully comply with the applicable carbon sequestration requirements in any given year, provided the requisite offsets are purchased. However, the Attorney General, on behalf of the People of the State of Illinois, may specifically enforce the facility's sequestration requirement and the other terms of this contract provision. Compliance with the sequestration requirements and offset purchase requirements specified in paragraph (3) of this subsection (d) shall be reviewed annually by an independent expert retained by the owner of the initial clean coal facility, with the advance written approval of the Attorney General. The Commission may, in the course of the review specified in item (vii), reduce the allowable return on equity for the facility if the facility wilfully fails to comply with the carbon capture and sequestration requirements set forth in this item (v);

(vi) include limits on, and accordingly provide for a reduction modification of, the amount the utility is required to source under the sourcing agreement consistent with paragraph (2) of this subsection (d);

(vii) require Commission review: (1) to determine the justness, reasonableness, and prudence of the inputs to the formula referenced in subparagraphs (A)(i) through (A)(iii) of paragraph (3) of this subsection (d), prior to an adjustment in those inputs including, without limitation, the capital structure and return on equity, fuel costs, and other operations and maintenance costs and (2) to approve the costs to be passed through to customers under the sourcing agreement by which the utility satisfies its statutory obligations. Commission review shall occur no less than every 3 years, regardless of whether any adjustments have been proposed, and shall be completed within 9 months;

(vii) (viii) limit the utility's obligation to such amount as the utility is allowed to recover through tariffs filed with the Commission, provided that neither the clean coal facility nor the utility waives any right to assert federal pre-emption or any other argument in response to a purported disallowance of recovery costs;

(viii) (ix) limit the utility's or alternative retail electric supplier's obligation to incur any liability to only those times until such time as the facility is in commercial operation and generating power and energy and such power and energy is being delivered to the facility busbar;

(ix) (x) provide that each electric utility the owner or owners of the initial clean coal facility, which is the counterparty to such sourcing agreement, shall have the right to determine from time to time to elect whether the obligations of the utility party under the sourcing agreement thereto shall be governed by the power purchase provisions or the contract for differences provisions before entering into the sourcing agreements;

(x) (xi) append documentation showing that the formula rate and contract, insofar as they relate to the power purchase provisions, have been approved by the Federal Energy Regulatory Commission pursuant to Section 205 of the Federal Power Act and the Commission;

(xi) (xii) provide that any changes to the terms of the contract, insofar as such changes relate to the power purchase provisions, are subject to review under the public interest standard applied by the Federal Energy Regulatory Commission pursuant to Sections 205 and 206 of the Federal Power Act; and

(xii) (xiii) conform with customary lender requirements in power purchase agreements used as the basis for financing non-utility generators; .

(xiii) provide for performance incentives regarding availability, efficiency and by-product quantities, with premium performance and shortfalls in performance to result in positive and negative adjustments, respectively, to the rate of return approved by the Commission, provided that such rate of return in any year shall not be decreased by more than $25,000,000 or increased by more than $12,500,000 as a result of such performance incentives. The rate of return shall only be increased as a result of such performance incentives to the extent the amount of the increase is less than the amount of benefits to the consumers resulting from the initial clean coal facility's achievement of that performance incentive;

(xiv) include forecasting and scheduling obligations that take account of the requirements of the applicable regional transmission organizations; and

(xv) include operating guidelines relating to the operating configuration and dispatch of the initial clean coal facility, which guidelines shall be subject to change from time to time with input from a committee consisting of representatives of the electric utilities and alternative retail electric suppliers that are parties to sourcing agreements with the initial clean coal facility; any actions taken or not taken by the owner of the initial clean coal facility in compliance with such operating guidelines shall be deemed to be prudent, and the prudence of the costs resulting from the action shall be evaluated in light of the fact that the initial clean coal facility is required to comply with such operating guidelines.

(4) Effective date of sourcing agreements with the initial clean coal facility. No later than 30 days after the effective date of this amendatory Act of the 96th General Assembly, the initial clean coal facility shall submit a draft sourcing agreement to the Agency and each electric utility required to enter into such agreements pursuant to paragraph (3) of this subsection, and the initial clean coal facility and each such electric utility shall promptly and diligently negotiate in good faith over the terms of the sourcing agreement. Within 30 days after receipt of the draft sourcing agreement, each such electric utility shall provide the Agency and the initial clean coal facility with its comments and recommended revisions to the draft sourcing agreement. Within 15 days after the receipt of the electric utility's comments and recommended revisions, the owner of the initial clean coal facility shall submit its responsive comments and a further revised draft of the sourcing agreement to the Agency. The Agency shall review the draft sourcing agreement and comments and retain an independent, qualified, and experienced mediator to mediate disputes over the draft sourcing agreement's terms. The mediator shall not own or control any direct or indirect interest in the initial clean coal facility and shall have no contractual relationship with the initial clean coal facility.

If the parties to the sourcing agreement do not agree on the terms in the sourcing agreement within 15 days after receiving the owner's responsive comments and further revised draft, then the mediator retained by the Agency shall mediate the dispute between the parties. If the parties are in agreement on the terms of the sourcing agreement, then the Agency shall approve the final draft sourcing agreement within 30 days after the parties reach agreement and notify the Agency of that agreement. If, within 30 days after the commencement of mediation, the parties have failed to come to agreement, then the Agency shall review and revise the draft sourcing agreement as necessary.

The Agency may approve a sourcing agreement only after it finds the sourcing agreement is consistent with the provisions of this Act and contains only terms that are balanced and equitable and fairly protect the interests of the parties to the sourcing agreement, with such approval to occur no later than 60 days after the commencement of the mediation. The Agency shall not withhold or condition its approval of the sourcing agreement based upon least cost resource principles or whether or not it would be prudent for buyers to enter into such an agreement if there were no legal requirement to do so, nor shall the resolution of open issues be based on these principles.

If the sourcing agreement is approved, then each electric utility required to enter into a sourcing agreement shall have 30 days after either the Agency's approval to enter into the sourcing agreement or the issuance of any necessary approval by the Federal Energy Regulatory Commission, whichever is later. The Agency shall submit the approved sourcing agreement to the Commission within 15 days after approval. Each electric utility and the initial clean coal facility shall pay a reasonable fee as required by the Agency for its services under this paragraph (4) and shall pay the mediator's reasonable fees, if any. The Agency shall adopt and make public a policy detailing the process for retaining a mediator under this Section. Any proposed sourcing agreement with the initial clean coal facility shall not become effective unless the following reports are prepared and submitted and authorizations and approvals obtained:

(i) Facility cost report. The owner of the initial clean coal facility shall submit to the Commission, the Agency, and the General Assembly a front-end engineering and design study, a facility cost report, method of financing (including but not limited to structure and associated costs), and an operating and maintenance cost quote for the facility (collectively "facility cost report"), which shall be prepared in accordance with the requirements of this paragraph (4) of subsection (d) of this Section, and shall provide the Commission and the Agency access to the work papers, relied upon documents, and any other backup documentation related to the facility cost report.

(ii) Commission report. Within 6 months following receipt of the facility cost report, the Commission, in consultation with the Agency, shall submit a report to the General Assembly setting forth its analysis of the facility cost report. Such report shall include, but not be limited to, a comparison of the costs associated with electricity generated by the initial clean coal facility to the costs associated with electricity generated by other types of generation facilities, an analysis of the rate impacts on residential and small business customers over the life of the sourcing agreements, and an analysis of the likelihood that the initial clean coal facility will commence commercial operation by and be delivering power to the facility's busbar by 2016. To assist in the preparation of its report, the Commission, in consultation with the Agency, may hire one or more experts or consultants, the costs of which shall be paid for by the owner of the initial clean coal facility. The Commission and Agency may begin the process of selecting such experts or consultants prior to receipt of the facility cost report.

(iii) General Assembly approval. The proposed sourcing agreements shall not take effect unless, based on the facility cost report and the Commission's report, the General Assembly enacts authorizing legislation approving (A) the projected price, stated in cents per kilowatthour, to be charged for electricity generated by the initial clean coal facility, (B) the projected impact on residential and small business customers' bills over the life of the sourcing agreements, and (C) the maximum allowable return on equity for the project; and

(iv) Commission review. If the General Assembly enacts authorizing legislation pursuant to subparagraph (iii) approving a sourcing agreement, the Commission shall, within 90 days of such enactment, complete a review of such sourcing agreement. During such time period, the Commission shall implement any directive of the General Assembly, resolve any disputes between the parties to the sourcing agreement concerning the terms of such agreement, approve the form of such agreement, and issue an order finding that the sourcing agreement is prudent and reasonable.

The facility cost report shall be prepared as follows:

(A) The facility cost report shall be prepared by duly licensed engineering and construction firms detailing the estimated capital costs payable to one or more contractors or suppliers for the engineering, procurement and construction of the components comprising the initial clean coal facility and the estimated costs of operation and maintenance of the facility. The facility cost report shall include:

(i) an estimate of the capital cost of the core plant based on one or more front end engineering and design studies for the gasification island and related facilities. The core plant shall include all civil, structural, mechanical, electrical, control, and safety systems.

(ii) an estimate of the capital cost of the balance of the plant, including any capital costs associated with sequestration of carbon dioxide emissions and all interconnects and interfaces required to operate the facility, such as transmission of electricity, construction or backfeed power supply, pipelines to transport substitute natural gas or carbon dioxide, potable water supply, natural gas supply, water supply, water discharge, landfill, access roads, and coal delivery.

The quoted construction costs shall be expressed in nominal dollars as of the date that the quote is prepared and shall include (1) capitalized financing costs during construction, (2) taxes, insurance, and other owner's costs, and (3) an assumed escalation in materials and labor beyond the date as of which the construction cost quote is expressed.

(B) The front end engineering and design study for the gasification island and the cost study for the balance of plant shall include sufficient design work to permit quantification of major categories of materials, commodities and labor hours, and receipt of quotes from vendors of major equipment required to construct and operate the clean coal facility.

(C) The facility cost report shall also include an operating and maintenance cost quote that will provide the estimated cost of delivered fuel, personnel, maintenance contracts, chemicals, catalysts, consumables, spares, and other fixed and variable operations and maintenance costs.

(a) The delivered fuel cost estimate will be provided by a recognized third party expert or experts in the fuel and transportation industries.

(b) The balance of the operating and maintenance cost quote, excluding delivered fuel costs will be developed based on the inputs provided by duly licensed engineering and construction firms performing the construction cost quote, potential vendors under long-term service agreements and plant operating agreements, or recognized third party plant operator or operators.

The operating and maintenance cost quote (including the cost of the front end engineering and design study) shall be expressed in nominal dollars as of the date that the quote is prepared and shall include (1) taxes, insurance, and other owner's costs, and (2) an assumed escalation in materials and labor beyond the date as of which the operating and maintenance cost quote is expressed.

(D) The facility cost report shall also include (i) an analysis of the initial clean coal facility's ability to deliver power and energy into the applicable regional transmission organization markets and (ii) an analysis of the expected capacity factor for the initial clean coal facility.

(E) Amounts paid to third parties unrelated to the owner or owners of the initial clean coal facility to prepare the core plant construction cost quote, including the front end engineering and design study, and the operating and maintenance cost quote will be reimbursed through Coal Development Bonds.

(5) Re-powering and retrofitting coal-fired power plants previously owned by Illinois utilities to qualify as clean coal facilities. During the 2009 procurement planning process and thereafter, the Agency and the Commission shall consider sourcing agreements covering electricity generated by power plants that were previously owned by Illinois utilities and that have been or will be converted into clean coal facilities, as defined by Section 1-10 of this Act. Pursuant to such procurement planning process, the owners of such facilities may propose to the Agency sourcing agreements with utilities and alternative retail electric suppliers required to comply with subsection (d) of this Section and item (5) of subsection (d) of Section 16-115 of the Public Utilities Act, covering electricity generated by such facilities. In the case of sourcing agreements that are power purchase agreements, the contract price for electricity sales shall be established on a cost of service basis. In the case of sourcing agreements that are contracts for differences, the contract price from which the reference price is subtracted shall be established on a cost of service basis. The Agency and the Commission may approve any such utility sourcing agreements that do not exceed cost-based benchmarks developed by the procurement administrator, in consultation with the Commission staff, Agency staff and the procurement monitor, subject to Commission review and approval. The Commission shall have authority to inspect all books and records associated with these clean coal facilities during the term of any such contract.

(6) Costs incurred by a utility under this subsection (d) or pursuant to a contract or sourcing agreement entered into under this subsection (d) shall be deemed prudently incurred and reasonable in amount and the electric utility shall be entitled to full cost recovery pursuant to the tariffs filed with the Commission.

(e) The draft procurement plans are subject to public comment, as required by Section 16-111.5 of the Public Utilities Act and Section 1-78 of this Act.

(f) The Agency shall submit the final procurement plan to the Commission. The Agency shall revise a procurement plan if the Commission determines that it does not meet the standards set forth in Section 16-111.5 of the Public Utilities Act or Section 1-78 of this Act.

(g) The Agency shall assess fees to each affected utility to recover the costs incurred in preparation of the annual procurement plan for the utility.

(h) The Agency shall assess fees to each bidder to recover the costs incurred in connection with a competitive procurement process.

(i) The Agency shall assess fees to the initial clean coal facility to recover the costs incurred in preparation of each procurement plan for the initial clean coal facility.

(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09; 96-159, eff. 8-10-09; 96-1437, eff. 8-17-10.)

(20 ILCS 3855/1-76 new)

Sec. 1-76. Costs and revenue recoverable by the initial clean coal facility.

(a) The price paid for electricity generated by the initial clean coal facility shall be based on a formula rate using a cost of service methodology applicable to wholesale electric power contracts employing a level or deferred capital component and in accordance with the Uniform System of Accounts, subject to and as specifically limited by the provisions set forth in Section.

No later than 30 days after the approval of the sourcing agreement by the Agency pursuant to paragraph (4) of subsection (d) of Section 1-75, the initial clean coal facility shall provide to the Commission projections of its costs and dispatch levels for the term of the sourcing agreements. Within 90 days thereafter, the Commission shall determine a projected price per MWh for each year for the initial clean coal facility, based upon such projections and the provisions of this Section. No later than 6 months before the expected commencement of commercial operation of the initial clean coal facility and the commencement of each operating year thereafter, the initial clean coal facility shall submit to the Commission projections of its costs and dispatch levels for the upcoming year. Within 120 days receipt of the initial clean coal facility's projections of its costs and dispatch levels for the upcoming year, the Commission shall approve a price per MWh for the upcoming year based upon such projections and the provisions of this Section. If the Commission does not approve a price for any year as of the beginning of such year, the initial clean coal facility shall calculate the price based upon its projections and the provisions of this Section, with any subsequent cost disallowance by the Commission to be reflected through a true-up of costs in the next year. Over the course of any year, the initial clean coal facility may generate electricity in an aggregate amount equal to the total generation incorporated in projected dispatch levels used to calculate the price per MWh for such year. To the extent that the total revenue actually collected by the initial clean coal facility in any quarterly period based upon the approved price per MWh is more or less than the actual costs incurred by the initial clean coal facility in respect of such period subject to the limits of this Section, the excess or shortfall shall be incorporated into the calculation of an adjusted price per MWh for the second subsequent quarterly period. If at any time the Commission, acting in accordance with this Section, disallows any cost incurred by the initial clean coal facility, the amount of such disallowance shall be incorporated into the calculation of the rate per MWh for the next year.

(b) Capital costs set by the Commission according to this subsection (b) shall be included in the formula rate. "Capital costs" means costs incurred on the purchase of land, buildings, construction, and equipment to be used in the production of electricity, and other costs recorded in the Electric Plant Accounts and other applicable Balance Sheet Accounts of the Uniform System of Accounts for the initial clean coal facility. The Capital Development Board shall calculate a range of capital costs that it believes would be a reasonable cost for the initial clean coal facility. The Capital Development Board shall commence performing its responsibilities under this subsection (b) within 30 days after the effective date of this amendatory Act of the 96th General Assembly. In determining a range of capital costs, the Capital Development Board shall base its evaluation and judgment on professional engineering and regulatory accounting principles and include any update on costs that may be provided by the initial clean coal facility and shall not employ least cost resource principles. In addition the Capital Development Board may:

(1) include in its consideration the information in a facility cost report, if any, that was prepared and submitted by the initial clean coal facility to the Commission in accordance with paragraph (4) of subsection (d) of Section 1-75 of this Act and any update on costs that may be provided by the initial clean coal facility;

(2) consult as much as it deems necessary with the initial clean coal facility;

(3) conduct whatever research and investigation it deems necessary; and

(4) retain third parties to assist in its determination, provided that such third parties shall not own or control any direct or indirect interest in the initial clean coal facility and shall have no contractual relationship with in the initial clean coal facility.

The initial clean coal facility shall cooperate with the Capital Development Board in any investigation it deems necessary.

The Capital Development Board shall make its final determination of the range of capital costs confidentially and shall submit that range to the Commission in a confidential filing no later than 90 days after the Capital Development Board is required to commence performing its responsibilities under this subsection (b). The initial clean coal facility shall submit to the Commission its estimate of the capital costs to be included in the formula rate. Only after the initial clean coal facility has submitted this estimate shall the Commission publicly announce the range of capital costs submitted by the Capital Development Board. In the event that the estimate submitted by the initial clean coal facility is within or below the range submitted by the Capital Development Board, the initial clean coal facility's estimate shall be approved by the Commission as the amount of pre-approved capital costs.

In the event that the estimate submitted by the initial clean coal facility is above the range submitted by the Capital Development Board, the amount of capital costs at the lowest end of the range submitted by the Capital Development Board shall be approved by the Commission as the amount of pre-approved capital costs. "Pre-approved capital costs" means the amount of capital costs that will be included in the formula rate to the extent such costs are actually incurred, with no further review or approval in respect to whether they are prudently incurred. The Commission's determination of pre-approved capital costs shall be made within 15 days after the initial clean coal facility submits its capital cost estimate. The Commission's decision regarding pre-approved capital costs shall be final and shall not be subject to judicial or administrative review.

Once made, the Commission's determination of the amount of pre-approved capital costs may not be increased unless the Commission determines that the incremental costs are reasonable, in which case one-third of such reasonable incremental costs shall be included in the formula rate and recoverable by the initial clean coal facility and two-thirds of such costs shall be borne by the initial clean coal facility and its contractors, provided that to the extent such reasonable incremental costs are the result of change in law or non-insurable force majeure, all of such costs shall be included in the formula rate and recoverable by the initial clean coal facility.

"Change in law" means any change, including any enactment, repeal, or amendment, in a law, ordinance, rule, regulation, interpretation, permit, license, consent or order, including those relating to taxes or to environmental matters, or in the interpretation or application thereof by any governmental authority occurring after January 1, 2011.

"Non-insurable force majeure" means events outside of the reasonable control of the owner of the initial clean coal facility and its contractors, subcontractors, and agents that are not included on a list, to be attached to the sourcing agreement and agreed upon by the utility entering the sourcing agreement, of events that are customarily covered by a builder's risk insurance policies for the construction of electric generating plants and other large process plants in the United States. "Non-insurable force majeure" shall not include changes in prices or other changes in market conditions.

Any rebates, refunds, or other payments received by the owner of the initial clean coal facility from any of its contractors in respect to such contractor bearing risk for capital cost overruns shall be excluded from miscellaneous net revenue and shall not otherwise reduce the costs of the owner of the initial clean coal facility for purposes of the formula rate. For purposes of this subsection (b), "reasonable" means that the decisions, construction, and supervision of construction by the owner of the initial clean coal facility and its contractors underlying the initial capital cost and significant additions to the initial capital cost of the initial clean coal facility resulted in efficient, economical, and timely construction. In determining the reasonableness of the capital costs of the initial clean coal facility, the Commission shall consider the knowledge and circumstances prevailing at the time of each relevant decision or action of the owner of the initial clean coal facility and its contractors.

The Commission may determine that the amount of pre-approved capital costs may be increased only after notice and a hearing. At that hearing, the Capital Development Board shall submit a report recommending whether the incremental costs should be approved in full or in part or rejected. The Commission may approve in whole or in part or reject the incremental capital costs based on standards in respect of prudently incurred costs that are normally applicable to electric ratemaking in Illinois. At the request of the owner of the initial clean coal facility made not more often than once every 12 months during the construction period of the initial clean coal facility, the Commission shall conduct interim reviews to determine whether capital costs specified in such request and incurred or to be incurred by the owner of the initial clean coal facility, are reasonable.

The Capital Development Board shall monitor the construction of the initial clean coal facility for the full duration of construction. The Capital Development Board, in its discretion, may retain third parties to facilitate such monitoring, provided that such third parties shall not own or control any direct or indirect interest in the initial clean coal facility and shall have no contractual relationship with in the initial clean coal facility. The initial clean coal facility shall pay a reasonable fee as required by the Capital Development Board for the Capital Development Board's services under this subsection (b), and such fee shall not be passed through to a utility or its customers. If a third party is retained by the Capital Development Board for the determination of a range of capital costs or monitoring of construction, the initial clean coal facility must pay for the third party's reasonable fees, and such costs may not be passed through to a utility or its customers.

The provisions of this subsection (b) shall apply to the capital costs for the initial construction of the initial clean coal facility and not to capital costs incurred beyond the initial construction, including costs for replacement of equipment and capital improvements, which such capital costs shall be subject to review by the Commission and included in the formula rate to the extent they are determined to be prudently incurred.

(c) Operations and maintenance costs set by the Commission according to this subsection (c) shall be included in the formula rate. Operations and maintenance costs mean costs incurred for the administration, supervision, operation, maintenance, preservation, and protection of the initial clean coal facility's physical plant and other costs recorded in the Operation and Maintenance Expense Accounts and other applicable Income Statement Accounts of the Uniform System of Accounts. The Commission shall assess the prudency of the operations and maintenance costs for the initial clean coal facility and shall allow the initial clean coal facility to include in the formula rate only those costs the Commission deems to be prudent. The Commission may in its discretion retain an expert to assist in its review of operations and maintenance costs. The initial clean coal facility shall pay for the expert's fees if an expert is retained by the Commission, and such costs may not be passed through to a utility or its customers. The Commission's determination regarding the amount of operations and maintenance costs that may be included in the formula rate for each year shall be made in accordance with this Section.

(d) Actual fuel costs shall be set by the Agency through a SNG feedstock procurement, pursuant to Section 1-78 of this Act, to be performed at least every 5 years, and purchased by the initial clean coal facility pursuant to a reasonable fuel supply plan, with coal comprising at least 50% of the total feedstock for producing SNG over the term of a sourcing agreement with all coal having high volatile bituminous rank and greater than 1.7 pounds of sulfur per million, SNG derived from coal comprising at least 50% of the fuel to generate electricity, SNG derived from biomass comprising up to 10% of the fuel to generate electricity with the approval of the Commission, and natural gas comprising the remainder of the fuel to generate electricity. Actual fuel costs, as so determined, shall be reduced by miscellaneous net revenue received by the owner of the initial clean coal facility, including, but not limited to, net revenue from the sale of emission allowances, if any, substitute natural gas, if any, grants or other support provided by the State of Illinois or the United States Government, firm transmission rights, if any, by-products produced by the facility, any capacity derived from the facility and bid into the capacity markets or otherwise sold and any energy generated as a result of such capacity being called, whether generated from synthesis gas derived from coal, from SNG, or from natural gas. All actual fuel costs incurred pursuant to such a fuel supply plan shall be included in the formula rate without any determination by the Commission or the Agency as to prudency.

(e) Sequestration costs set by the Commission according to this subsection (e) shall be included in the formula rate. "Sequestration costs" means costs incurred to (i) capture carbon dioxide; (ii) compress carbon dioxide; (iii) build, operate, and maintain a sequestration site in which carbon dioxide may be injected; (iv) build, operate, and maintain a carbon dioxide pipeline, which is owned by the initial clean coal facility; (v) transport the carbon dioxide to a sequestration site or a pipeline; and (vi) perform monitoring, verification, and other activities associated with carbon capture and sequestration. "Sequestration capital costs" means sequestration costs recorded in the Electric Plant Accounts and other applicable Balance Sheet Accounts of the Uniform System of Accounts. "Sequestration operations and maintenance costs" means sequestration costs that are recorded in the Operation and Maintenance Expense Accounts and other applicable Income Statement Accounts of the Uniform System of Accounts, and shall include maintenance, monitoring, and verification costs.

The Capital Development Board shall calculate an estimate of sequestration capital costs that it believes would be a reasonable cost for the initial clean coal facility's sequestration facilities and an estimate of average annual sequestration operations and maintenance costs that it believes would be a reasonable average annual operation and maintenance cost for the initial clean coal facility's carbon capture and sequestration activities. The Capital Development Board shall commence performing its responsibilities under this subsection (e) within 30 days after the effective date of this amendatory Act of the 96th General Assembly. In determining a range of capital costs, the Capital Development Board shall base its evaluation and judgment on professional engineering and regulatory accounting principles and include any update on costs that may be provided by the initial clean coal facility and shall not least cost resource principles. In addition the Capital Development Board may: (i) include in its consideration cost estimate information in a facility cost report, if any, that was prepared and submitted by the initial clean coal facility to the Commission in accordance with paragraph (4) of subsection (d) of Section 1-75 of this Act and any update on costs that may be provided by the initial clean coal facility; (ii) consult as much as it deems necessary with the initial clean coal facility; (iii) conduct whatever research and investigation it deems necessary; and (iv) retain third parties to assist in its determination, provided that such third parties shall not own or control any direct or indirect interest in the initial clean coal facility and shall have no contractual relationship with the initial clean coal facility. The initial clean coal facility shall cooperate with the Capital Development Board in any investigation it deems necessary.

The Capital Development Board shall make its final determination of sequestration capital costs and sequestration operations and maintenance costs and submit such determination to the Commission no later than 90 days after the Capital Development Board is required to commence performing its responsibilities under this subsection (e). The Capital Development Board shall monitor construction of the sequestration facilities in the same manner, and with the same rights to retain an expert and recover the costs thereof, as set forth in subsection (b) of this Section.

"Actual sequestration costs" means for any year the sum of: (i) the annual amortized portion of sequestration capital costs, based on level amortization from the later of the date such costs are incurred and the commercial operation date until the end of the term of the sourcing agreements; (ii) the rate of return approved by the Commission pursuant to subsection (e) of this Section applied to sequestration capital costs; and (iii) the sequestration operations and maintenance costs incurred in such year.

"Target sequestration costs" means the sum of: (i) the annual amortized portion of the estimated sequestration capital costs determined by the Capital Development Board, based on level amortization from the later of the date such costs are incurred and the commercial operation date until the end of the term of the sourcing agreements; (ii) the rate of return approved by the Commission pursuant to subsection (f) of this Section applied to the estimated sequestration capital costs determined by the Capital Development Board; (iii) the estimate of average annual sequestration operations and maintenance costs determined by the Capital Development Board, escalated in accordance with an escalation factor to be provided in the sourcing agreement from the date of the Capital Development Board's determination to the mid-point of the applicable year; (iv) the sequestration cost underrun, if any, for the immediately preceding year, except to the extent applied to allow recovery of a sequestration cost overrun from a prior year; and (v) any sequestration costs that are the result of a change in law or non-insurable force majeure.

"Sequestration cost underrun" means for any year the excess, if any, of target sequestration costs for such year over actual sequestration costs for such year.

"Sequestration cost overrun" means for any year the excess, if any, of actual sequestration costs for such year over target sequestration costs for such year.

For any year in which there is a sequestration cost underrun, all actual sequestration costs shall be conclusively deemed to be prudent and shall be included in the formula rate with no further review or approval in respect of whether they are prudently incurred.

For any year in which there is a sequestration cost overrun, the Commission shall determine whether all or a portion of such sequestration cost overrun was prudently incurred, except that the rate of return shall not be subject to review. If the Commission determines that the sequestration cost overrun was prudently incurred, one-third of such sequestration cost overrun shall be included in the formula rate and recoverable by the initial clean coal facility and two-thirds of such sequestration cost overrun shall be borne by the initial clean coal facility and not passed through to a utility, an alternative retail electric supplier, or the customers of a utility or an alternative retail electric supplier unless and until there is a sequestration cost underrun for a subsequent year, in which event the sequestration cost overrun will be included in the formula rate and recoverable by the initial clean coal facility up to the amount of the sequestration cost underrun; provided, however, that if for any year two-thirds of such sequestration cost overrun exceeds the difference of $20,000,000 minus the amount of penalty, if any, payable by the initial clean coal facility pursuant to Section 1-76.5 in respect to that year, the amount of such excess shall also be included in the formula rate and recoverable by the initial clean coal facility. The detailed procedures for implementing this provision shall be set forth in the sourcing agreements.

"Change in law" means any change, including any enactment, repeal and amendment, in a law, ordinance, rule, regulation, interpretation, permit, license, consent or order, including those relating to taxes or to environmental matters, or in the interpretation or application thereof by any governmental authority occurring after January 1, 2011.

"Non-insurable force majeure" means events outside of the reasonable control of the owner of the initial clean coal facility and its contractors, subcontractors, and agents that are not included on a list, to be attached to the sourcing agreement and agreed upon by the utility entering the sourcing agreement, of events that are customarily covered by a builder's risk insurance policies for the construction of electric generating plants and other large process plants in the United States "Non-insurable force majeure" shall not include changes in prices or other changes in market conditions.

(f) The Commission shall, by the later of 90 days after the effective date of this amendatory Act of the 96th General Assembly and 90 days after the owner of the initial clean coal facility files initial direct testimony regarding rate of return with the Commission, determine the total rate of return on invested capital for the initial clean coal facility following notice and a public hearing. At the hearing, all interested parties, including utilities, alternative retail electric suppliers, the Attorney General, the Agency, and customers, shall be given an opportunity to be heard. In determining the rate of return, the Commission shall select a commercially reasonable rate that takes into account the rates of return received by developers of facilities similar to the initial clean coal facility inside or outside Illinois, the need to balance an incentive for clean-coal technology with the need to protect Illinois ratepayers from high electricity costs, and any other information the Commission deems relevant.

The rate of return shall be no lower than 75 basis points lower than the weighted average authorized total rates of return of the utilities for their electric distribution assets as of January 1, 2011. Notwithstanding the minimum rate of return established in the preceding sentence, the rate of return shall be no greater than the total rate of return on invested capital that the initial clean coal facility would achieve based on an assumed 55% debt and 45% equity capital structure, with the cost of debt being the actual average cost, including all associated costs and fees, of the initial clean coal facility's U.S. Government guaranteed debt and the cost of equity being 11.5%. The Commission's determination of the rate of return shall include a mechanism providing for a one-time adjustment at or about the commencement of commercial operation of the initial clean coal facility to take account of changes in applicable Treasury yield rates between the date of its provisional determination of the rate of return and the dates of construction period borrowing by the initial clean coal facility, which adjustment shall apply to 55% of total capital.

The Agency shall recommend a rate of return to the Commission utilizing the criteria in this subsection (f). The Commission shall further take into account the recommendation of the Agency but shall not be bound by it. The Commission's decision shall be final and not subject to any rehearing or administrative or judicial review. The rate of return determined by the Commission pursuant to this subsection (f) shall apply for the term of the sourcing agreements and shall not be subject to change, except for the one-time adjustment to reflect Treasury yield rate changes as expressly contemplated by this subsection (f) and as otherwise provided in this Act.

(g) The following shall not be included in determining the contract price: advertising expenses that do not meet the requirements of Sections 9-225 and 9-226 of the Public Utilities Act, political activity or lobbying expenses as defined by Section 9-224 of the Public Utilities Act, social club due, or charitable contributions, to the extent, in each case, that a utility would not be permitted to recover such costs.

(h) Unless otherwise provided, within 30 days after a decision of the Commission on recoverable costs under this Section, any interested party to the Commission's decision may apply for a rehearing with respect to the decision. The Commission shall receive and consider such application for rehearing and shall grant or deny the application in whole or in part within 20 days from the date of the receipt thereof by the Commission. If no rehearing is applied for within the required 30 days or an application for rehearing is denied, the Commission decision shall be final.

If an application for rehearing is granted, the Commission shall hold a rehearing within 30 days after granting the application. The decision of the Commission upon rehearing shall be final. Any person affected by a decision of the Commission under this Section 1-76 may have the decision reviewed only under and in accordance with the Administrative Review Law. Unless otherwise provided, the provisions of the Administrative Review Law, all amendments modifications thereof and the rules adopted pursuant thereto, shall apply to and govern all proceedings for the judicial review of final administrative decisions of the Commission under this subsection (h). The term "administrative decision" is defined as in Section 3-101 of the Code of Civil Procedure.

(h) The Capital Development Board shall adopt and make public a policy detailing the process for retaining third parties under this Section. Any third parties retained to assist with calculating the range of capital costs or operations and maintenance costs shall be retained no later than 45 days after the effective date of this amendatory Act of the 96th General Assembly.

(20 ILCS 3855/1-76.5 new)

Sec. 1-76.5. Capture and sequestration requirements for initial clean coal facility.

(a) The initial clean coal facility shall provide documentation to the Commission each year of commercial operation accurately reporting the quantity of carbon emissions from the facility that have been captured and sequestered and report any quantities of carbon released from the site or sites at which carbon emissions were sequestered in prior years, based on continuous monitoring of such sites. If, in any year, the owner of the facility fails to demonstrate that (i) the portion of the facility that produces SNG captured and sequestered at least 90% of the carbon dioxide it would otherwise emit and (ii) the initial clean coal facility as a whole captured and sequestered at least 50% of the total carbon emissions that the facility would otherwise emit or if the capture and sequestration of emissions from prior years has failed, resulting in the release of carbon dioxide into the atmosphere, or both, then the owner of the initial clean coal facility must pay a penalty of $20,000,000, which shall be deposited into the Energy Efficiency Trust Fund and distributed pursuant to subsection (b) of Section 6-6 of the Renewable Energy, Energy Efficiency, and Coal Resources Development Law of 1997.

If during the first 12 months of commercial operation of the initial clean coal facility, there are more than 4 stops and starts of the portion of the facility that produces SNG, with each stop and start of an individual unit constituting one stop and start, then the calculation of the quantities described in this subsection (a) shall not take into account any carbon dioxide emissions from the portion of the facility that produces SNG occurring during the stop and start-up periods, including related periods of non-steady state operation, associated with such excess stops and starts. The penalty resulting from the failure to capture and sequester at least the minimum amount of carbon dioxide shall not be passed through to a utility, an alternative retail electric supplier, or the customers of a utility or an alternative retail electric supplier. The initial clean coal facility shall not forfeit its designation as a clean coal facility if the facility fails to fully comply with the applicable carbon sequestration requirements in any given year, provided the requisite penalties are complied with.

(b) In addition to any penalty for the initial clean coal facility's failure to capture and sequester at least its minimum sequestration requirement, the Attorney General, on behalf of the People of the State of Illinois, shall specifically enforce the facility's sequestration requirement and the other terms of this contract provision. Such action may be filed in any circuit court in Illinois. By entering into a sourcing agreement pursuant to subsection (d) of Section 1-75 of this Act, the initial clean coal facility agrees to waive any objections to venue or to the jurisdiction of the court with regard to the Attorney General's action for specific performance under this Section. The Commission may reduce the recoverable rate of return approved pursuant to Section 1-76 of this Act for the facility if the facility willfully fails to comply with the carbon capture and sequestration requirements set forth in this Section.

(c) Compliance with the capture and sequestration requirements of this Section shall be assessed annually by the Commission, which may in its discretion retain an expert to facilitate its assessment. The initial clean coal facility shall pay for the expert's reasonable fees if an expert is retained by the Commission, and such costs shall not be passed through to a utility, an alternative retail electric supplier, or the customers of a utility or an alternative retail electric supplier. The Commission shall adopt and make public a policy detailing the process for retaining or an expert under this Section.

(d) Responsibility for compliance with the capture and sequestration requirements specified in this Section for the initial clean coal facility shall reside solely with the initial clean coal facility regardless of whether the facility has contracted with another party to capture, transport, or sequester carbon dioxide.

(20 ILCS 3855/1-77 new)

Sec. 1-77. Sequestration permitting, oversight, and investigations.

(a) No clean coal facility, initial clean coal facility, or clean coal SNG facility may transport or sequester carbon dioxide unless the Commission approves the method of carbon dioxide transportation or sequestration as provided in this Section. Approval shall be required regardless of whether the SNG facility has contracted with another to transport or sequester the carbon dioxide. Nothing in this subsection (a) shall release the owner or operator of a carbon dioxide sequestration site or carbon dioxide pipeline from any other permitting requirements under applicable State and federal laws, statutes, rules, or regulations.

(b) No later than 3 months prior to the date upon which the company intends to commence construction of the facility, the owner of the facility shall file with the Commission a carbon dioxide transportation or sequestration plan. The Commission shall review proposed carbon dioxide transportation and sequestration methods and shall approve those methods it deems reasonable and cost-effective. For purposes of this review, "cost-effective" means a commercially reasonable price for similar carbon dioxide transportation or sequestration techniques. In determining whether sequestration through injection is reasonable and cost-effective, the Commission may consult with the Illinois State Geological Survey.

The Commission shall hold a public hearing within 30 days after receipt of the facility's carbon dioxide transportation or sequestration plan. The Commission shall post notice of the review on its website upon submission of a carbon dioxide transportation or sequestration method and shall accept written public comments. The Commission shall take the comments into account when making its decision. However, the Commission shall not approve a carbon dioxide sequestration method if the owner or operator of the sequestration site has not received: (i) an Underground Injection Control permit from the Illinois Environmental Protection Agency pursuant to the Environmental Protection Act, (ii) an Underground Injection Control permit from the Illinois Department of Natural Resources pursuant to the Illinois Oil and Gas Act, or (iii) a permit similar to items (i) or (ii) from the state in which the sequestration site is located if the sequestration shall take place outside of Illinois. The Commission shall approve or deny the carbon dioxide transportation or sequestration method within 90 days after the receipt of all required information.

(c) At least annually, the Illinois Environmental Protection Agency shall inspect all carbon dioxide sequestration sites in Illinois to ensure the safety and feasibility of those sequestration sites. However, the Illinois Environmental Protection Agency may, as often as deemed necessary, monitor and conduct investigations of those sites. The owner or operator of the sequestration site must cooperate with the Illinois Environmental Protection Agency investigations of carbon dioxide sequestration sites. If the Illinois Environmental Protection Agency determines at any time a site creates conditions that warrant the issuance of a seal order under Section 34 of the Environmental Protection Act, then the Illinois Environmental Protection Agency shall seal the site pursuant to the Environmental Protection Act. If the Illinois Environmental Protection Agency determines at any time a carbon dioxide sequestration site creates conditions that warrant the institution of a civil action for an injunction under Section 43 of the Environmental Protection Act, then the Illinois Environmental Protection Agency shall request the State's Attorney or the Attorney General institute such action. The Illinois Environmental Protection Agency shall provide notice of any such actions as soon as possible on its website.

(d) At least annually, the Commission shall inspect all carbon dioxide pipelines in Illinois that transport carbon dioxide to ensure the safety and feasibility of those pipelines. However, the Commission may, as often as deemed necessary, monitor and conduct investigations of those pipelines. The owner or operator of the pipeline must cooperate with the Commission investigations of the carbon dioxide pipelines. If the Commission determines at any time that a carbon dioxide pipeline creates conditions that warrant the issuance of a seal order under Section 34 of the Environmental Protection Act, then the Commission shall notify the Illinois Environmental Protection Agency of such conditions. If the Commission determines at any time a carbon dioxide pipeline creates conditions that warrant the institution of a civil action for an injunction under Section 43 of the Environmental Protection Act, then the Illinois Environmental Protection Agency shall request the State's Attorney or the Attorney General institute such action. The Commission shall provide notice of any such actions as soon as possible on its website.

(20 ILCS 3855/1-78 new)

Sec. 1-78. Feedstock procurement.

(a) A feedstock procurement plan shall, at least every 5 years, be prepared for the initial clean coal facility based on the initial clean coal facility's projection of feedstock usage and ratios, and consistent with the applicable requirements of the Illinois Power Agency Act and this Section. The plan shall specifically identify the feedstock products to be procured following plan approval and shall follow all the requirements set forth in this Act and all applicable State and federal laws, statutes, rules, or regulations, as well as Commission orders. Nothing in this Section precludes consideration of contracts longer than 5 years and related forecast data. Any feedstock procurement occurring in accordance with this plan shall be competitively bid through a request for proposals process. Approval and implementation of the feedstock procurement plan shall be subject to review and approval by the Commission according to the provisions set forth in this Section. A feedstock procurement plan shall include each of the following components:

(1) Daily load analysis. This analysis shall include:

(A) multi-year historical analysis of hourly loads; and

(B) known or projected changes to future loads.

(2) Determination of the fuel specifications required for the initial clean coal facility, including:

(A) feedstock mix, as set by the initial clean coal facility with coal having high volatile bituminous rank and greater than 1.7 pounds of sulfur per million btu content and comprising at least 50% of the total annual feedstock;

(B) volume of each feedstock required;

(C) quality standards of each feedstock;

(D) transportation and delivery requirements and associated costs and impacts on the performance, availability, and reliability of the initial clean coal facility;

(E) technical specifications of the initial clean coal facility for its feedstocks; and

(F) appropriate testing of any proposed feedstock before it is incorporated into the feedstock procurement plan or process to determine the effect of such feedstock on the performance, availability, and reliability of the initial clean coal facility.

(b) The feedstock procurement process shall be administered by a feedstock procurement administrator and monitored by a feedstock procurement monitor.

(1) The feedstock procurement administrator shall:

(A) design the final feedstock procurement process in accordance with subsection (d) of this Section following Commission approval of the feedstock procurement plan;

(B) develop feedstock benchmarks in accordance with subsection (d)(3) to be used to evaluate bids; these benchmarks shall be submitted to the Commission for review and approval on a confidential basis prior to the feedstock procurement event;

(C) serve as the interface between the initial clean coal facility and feedstock suppliers regarding bidding and contract negotiations;

(D) manage the bidder pre-qualification and registration process;

(E) obtain the initial clean coal facility's agreement to the final form of all supply contracts and credit collateral agreements;

(F) administer the request for feedstock proposals process;

(G) have the discretion to negotiate to determine whether bidders are willing to lower the price of bids that meet the benchmarks approved by the Commission; any post-bid negotiations with bidders shall be limited to price only and shall be completed within 24 hours after opening the sealed bids and shall be conducted in a fair and unbiased manner; in conducting the negotiations, there shall be no disclosure of any information derived from proposals submitted by competing bidders; if information is disclosed to any bidder, it shall be provided to all competing bidders;

(H) maintain confidentiality of supplier and bidding information in a manner consistent with all applicable laws, rules, regulations, and tariffs;

(I) submit a confidential report to the Commission recommending acceptance or rejection of bids;

(J) notify the facility of contract counterparties and contract specifics; and

(K) administer related contingency feedstock procurement events.

(2) The feedstock procurement monitor, who shall be retained by the Commission, shall:

(A) monitor interactions among the feedstock procurement administrator, suppliers, and the initial clean coal facility;

(B) monitor and report to the Commission on the progress of the feedstock procurement process;

(C) provide an independent confidential report to the Commission regarding the results of the feedstock procurement event;

(D) preserve the confidentiality of supplier and bidding information in a manner consistent with all applicable laws, rules, regulations, and tariffs;

(E) provide expert advice to the Commission and consult with the feedstock procurement administrator regarding issues related to feedstock procurement process design, rules, protocols, and policy-related matters;

(F) consult with the feedstock procurement administrator regarding the development and use of benchmark criteria, standard form contracts, credit policies, and bid documents; and

(G) assess compliance with the procurement plans approved by the Commission.

(c) The feedstock planning process shall be conducted as follows:

(1) Beginning in 2012, the initial clean coal facility shall annually provide a range of feedstock requirement forecasts to the Agency by July 15 of each year, or such other date as may be required by the Commission or Agency. The feedstock requirement forecasts shall cover the 5-year feedstock procurement planning period for the next feedstock procurement plan, or such other longer period that the Agency or the Commission may require, and shall include daily data representing a high-load, low-load, and expected-load scenario for the load of the utilities and alternative retail suppliers required to enter into sourcing agreements with the initial clean coal facility. The utilities and alternative retail suppliers shall provide supporting data and assumptions for each of the scenarios.

(2) Beginning in 2012, the Agency shall, as necessary, prepare a feedstock procurement plan by August 15th of each year, or such other date as may be required by the Commission. The feedstock procurement plan shall identify the portfolio of feedstocks to be procured. Copies of the feedstock procurement plan shall be posted and made publicly available on the Agency's and Commission's websites, and copies shall also be provided to the initial clean coal facility. The initial clean coal facility shall have 30 days following the date of posting to provide comment to the Agency on the feedstock procurement plan. Other interested entities also may comment on the feedstock procurement plan. All comments submitted to the Agency shall be specific, supported by data or other detailed analyses, and, if objecting to all or a portion of the feedstock procurement plan, accompanied by specific alternative wording or proposals. All comments shall be posted on the Agency's and Commission's websites. During this 30-day comment period, the Agency shall hold at least one public hearing for the purpose of receiving public comment on the procurement plan. Within 14 days following the end of the 30-day review period, the Agency shall revise the feedstock procurement plan as necessary based on the comments received, file the feedstock procurement plan with the Commission, and post the feedstock procurement plan on the websites.

(3) Within 5 days after the filing of the feedstock procurement plan, any person objecting to the feedstock procurement plan shall file an objection with the Commission. Within 10 days after the filing, the Commission shall determine whether a hearing is necessary. The Commission shall enter its order confirming or modifying the feedstock procurement plan within 90 days after the filing of the feedstock procurement plan by the Agency.

(4) The Commission shall approve the feedstock procurement plan, including expressly the forecast used in the feedstock procurement plan, if the Commission determines that it shall ensure adequate, reliable, affordable, and environmentally sustainable feedstocks to the clean coal facility at the lowest total cost over time, taking into account any benefits of price stability and other criteria set forth in this Section.

(d) The feedstock procurement process shall include each of the following components:

(1) Solicitation, pre-qualification, and registration of bidders. The feedstock procurement administrator shall disseminate information to potential bidders to promote a feedstock procurement event, notify potential bidders that the feedstock procurement administrator may enter into a post-bid price negotiation with bidders that meet the applicable benchmarks, provide supply requirements, and otherwise explain the competitive feedstock procurement process. In addition to such other publication as the feedstock procurement administrator determines is appropriate, this information shall be posted on the Agency's and the Commission's websites. The feedstock procurement administrator shall also administer the prequalification process, including evaluation of credit worthiness, compliance with feedstock procurement rules, and agreement to the standard form contract developed pursuant to paragraph (2) of this subsection (d). The feedstock procurement administrator shall then identify and register bidders to participate in the feedstock procurement event.

(2) Standard contract forms and credit terms and instruments. The feedstock procurement administrator, in consultation with the initial clean coal facility, electric utilities, alternative retail electric suppliers, the Commission, and other interested parties and subject to Commission oversight, shall develop and provide standard contract forms for the supplier contracts that meet generally accepted industry practices. Standard credit terms and instruments that meet generally accepted industry practices shall be similarly developed. The feedstock procurement administrator shall make available to the Commission all written comments it receives on the contract forms, credit terms, or instruments. If the feedstock procurement administrator cannot reach agreement with the initial clean coal facility as to the contract terms and conditions, then the feedstock procurement administrator must notify the Commission of any disputed terms and the Commission shall resolve the dispute. The terms of the contracts shall not be subject to negotiation by winning bidders, and the bidders must agree to the terms of the contract in advance so that winning bids are selected solely on the basis of price.

(3) Establishment of a market-based price benchmark. As part of the development of the feedstock procurement process, the feedstock procurement administrator, in consultation with the Commission staff, Agency staff, and the feedstock procurement monitor, shall establish benchmarks for evaluating the final prices in the contracts for each of the feedstocks that shall be procured through the feedstock procurement process. The benchmarks shall be based on price data for similar feedstocks for the same delivery period and similar delivery points, or other delivery points after adjusting for that difference. The price benchmarks may also be adjusted to take into account differences between the information reflected in the underlying data sources and the specific feedstocks and gasification feedstock procurement process being used to procure for the initial clean coal facility. The benchmarks shall be confidential but shall be provided to, and shall be subject to Commission review and approval, prior to a feedstock procurement event.

(4) Request for proposals. The feedstock procurement administrator shall design and issue a request for proposals to supply coal or natural gas in accordance with the initial clean coal facility's usage plan, as approved by the Commission. The request for proposals shall set forth a procedure for sealed, binding commitment bidding with pay-as-bid settlement, and provision for selection of bids on the basis of price.

(5) A plan for implementing contingencies in the event of supplier default or failure of the feedstock procurement process to fully meet the expected load requirement due to insufficient supplier participation, Commission rejection of results, or any other cause. The plan must be specific to the initial clean coal facility's feedstock specifications and requirements.

The feedstock procurement process described in this subsection (d) is exempt from the requirements of the Illinois Procurement Code, pursuant to Section 20-10 of that Code.

(e) Within 2 business days after opening the sealed bids, the feedstock procurement administrator shall submit a confidential report to the Commission. The report shall contain the results of the bidding for each of the feedstock types along with the feedstock procurement administrator's recommendation for the acceptance and rejection of bids based on the price benchmark criteria and other factors observed in the process. The feedstock procurement monitor also shall submit a confidential report to the Commission within 2 business days after opening the sealed bids. The report shall contain the feedstock procurement monitor's assessment of bidder behavior in the process, as well as an assessment of the feedstock procurement administrator's compliance with the feedstock procurement process and rules. The Commission shall review the confidential reports submitted by the feedstock procurement administrator and feedstock procurement monitor and shall accept or reject the recommendations of the feedstock procurement administrator within 2 business days after receipt of the reports.

(f) Within 3 business days after the Commission decision approving the results of a feedstock procurement event, the initial clean coal facility shall enter into binding contractual arrangements with the winning suppliers using standard form contracts.

(g) The names of the successful bidders and the amount of feedstock to be delivered for each contract type and for each contract term shall be made available to the public at the time of Commission approval of a feedstock procurement event. The Commission, the procurement monitor, the feedstock procurement administrator, the Agency, and all participants in the feedstock procurement process shall maintain the confidentiality of all other supplier and bidding information in a manner consistent with all applicable laws, rules, regulations, and tariffs. Confidential information, including the confidential reports submitted by the feedstock procurement administrator and feedstock procurement monitor pursuant to subsection (e) of this Section, shall not be made publicly available and shall not be discoverable by any party in any proceeding, absent a compelling demonstration of need, nor shall those reports be admissible in any proceeding other than one for law enforcement purposes.

(h) Within 2 business days after a Commission decision approving the results of a feedstock procurement event or such other date as may be required by the Commission from time to time, the initial clean coal facility shall file for informational purposes with the Commission its actual or estimated feedstock costs reflecting the costs associated with the feedstock procurement.

(i) The initial clean coal facility shall pay for reasonable costs incurred by the Agency in administering the feedstock procurement events. The Agency shall determine the amount owed for each feedstock procurement event, and the initial clean coal facility shall pay that amount to the Agency within 30 days after being informed by the Agency of the amount owed. Those funds shall be deposited into the Agency Operations Fund, pursuant to Section 1-55 of this Act, to be used to reimburse expenses related to the feedstock procurement.

(j) The Commission has the authority to adopt rules to carry out the provisions of this Section. For the public interest, safety, and welfare, the Commission also has the authority to adopt rules to carry out the provisions of this Section on an emergency basis.

(k) On or before April 1 of each year, the Commission may hold an informal hearing for the purpose of receiving comments on the prior year's feedstock procurement process and any recommendations for change.

(l) For all purposes of this Section 1-78 and subsection (a-1) of Section 1-75 of this Act, (i) feedstock procurement shall be deemed to include transportation of the feedstock products to the initial clean coal facility (including the acquisition by the initial clean coal facility, as appropriate, of trucks, railcars or other transportation equipment), (ii) feedstock procurement shall not be deemed to include day-to-day performance and administration of feedstock procurement and transportation arrangements, including scheduling, weighing, quality determination, acceptance or rejection of shipments, price adjustments, documentation and related activities, all of which shall be performed by the owner of the initial clean coal facility, and (iii) feedstock supplier shall be deemed to include feedstock transporters and providers of feedstock transportation equipment.

(20 ILCS 3855/1-79 new)

Sec. 1-79. Limited non-impairment.

(a) The State of Illinois pledges that the State shall not enact any law or take any action to:

(1) break, or repeal the authority for, sourcing agreements in a form approved by the Agency and entered into between electric utilities and the initial clean coal facility pursuant to subsection (d) of Section 1-75 of this Act;

(2) break, or repeal the authority for, sourcing agreements in a form approved by the Agency and entered into between alternative retail electric suppliers and the initial clean coal facility;

(3) deny public utilities full cost recovery for their costs incurred under those sourcing agreements;

(4) deny the initial clean coal facility full cost recovery under those sourcing agreements for costs that are recoverable under Section 1-76 of this Act.

(5) repeal or remove the requirement that public utilizes shall enter into sourcing agreements with the initial clean coal facility under paragraph (1) of subsection (d) of Section 1-75 of this Act or subsection (c) of Section 16-116 of the Public Utilities Act; or

(6) repeal or remove the requirement that alternative retail electric suppliers shall enter into sourcing agreements with the initial clean coal facility under item (iv) of paragraph (5) of subsection (d) of Section 16-115 of the Public Utilities Act.

These pledges are for the benefit of the parties to those sourcing agreements and the issuers and holders of bonds or other obligations issued or incurred to finance or refinance the initial clean coal facility. The initial clean coal facility is authorized to include and refer to these pledges in any financing agreement into which it may enter in regard to those sourcing agreements.

(b) The State of Illinois retains and reserves all other rights to enact new or amendatory legislation or take any other action, without impairment of the right of the initial clean coal facility to recover prudently incurred costs resulting from the new or amendatory legislation or other action as approved by the Commission, including, but not limited to, legislation or other action that would:

(1) directly or indirectly raise the costs that clean coal facilities must incur;

(2) directly or indirectly place additional restrictions, regulations, or requirements on the initial clean coal facility;

(3) prohibit sequestration in general or prohibit a specific sequestration method or project; or

(4) increase minimum sequestration requirements for the initial clean coal facility to a technically feasible extent.

Section 10. The Illinois Procurement Code is amended by changing Sections 1-10 and 20-10 as follows:

(30 ILCS 500/1-10)

Sec. 1-10. Application.

(a) This Code applies only to procurements for which contractors were first solicited on or after July 1, 1998. This Code shall not be construed to affect or impair any contract, or any provision of a contract, entered into based on a solicitation prior to the implementation date of this Code as described in Article 99, including but not limited to any covenant entered into with respect to any revenue bonds or similar instruments. All procurements for which contracts are solicited between the effective date of Articles 50 and 99 and July 1, 1998 shall be substantially in accordance with this Code and its intent.

(b) This Code shall apply regardless of the source of the funds with which the contracts are paid, including federal assistance moneys. This Code shall not apply to:

(1) Contracts between the State and its political subdivisions or other governments, or between State governmental bodies except as specifically provided in this Code.

(2) Grants, except for the filing requirements of Section 20-80.

(3) Purchase of care.

(4) Hiring of an individual as employee and not as an independent contractor, whether pursuant to an employment code or policy or by contract directly with that individual.

(5) Collective bargaining contracts.

(6) Purchase of real estate, except that notice of this type of contract with a value of more than $25,000 must be published in the Procurement Bulletin within 7 days after the deed is recorded in the county of jurisdiction. The notice shall identify the real estate purchased, the names of all parties to the contract, the value of the contract, and the effective date of the contract.

(7) Contracts necessary to prepare for anticipated litigation, enforcement actions, or investigations, provided that the chief legal counsel to the Governor shall give his or her prior approval when the procuring agency is one subject to the jurisdiction of the Governor, and provided that the chief legal counsel of any other procuring entity subject to this Code shall give his or her prior approval when the procuring entity is not one subject to the jurisdiction of the Governor.

(8) Contracts for services to Northern Illinois University by a person, acting as an independent contractor, who is qualified by education, experience, and technical ability and is selected by negotiation for the purpose of providing non-credit educational service activities or products by means of specialized programs offered by the university.

(9) Procurement expenditures by the Illinois Conservation Foundation when only private funds are used.

(10) Procurement expenditures by the Illinois Health Information Exchange Authority involving private funds from the Health Information Exchange Fund. "Private funds" means gifts, donations, and private grants.

(c) This Code does not apply to the electric power procurement process provided for under Section 1-75 of the Illinois Power Agency Act and Section 16-111.5 of the Public Utilities Act.

(d) Except for Section 20-160 and Article 50 of this Code, and as expressly required by Section 9.1 of the Illinois Lottery Law, the provisions of this Code do not apply to the procurement process provided for under Section 9.1 of the Illinois Lottery Law.

(e) This Code does not apply to the process used by the Capital Development Board to retain a person or entity to assist the Capital Development Board with its duties related to the determination of costs of an initial clean coal facility, as defined under Section 1-10 of the Illinois Power Agency Act, as required under Section 1-76 of the Illinois Power Agency Act, including calculating the range of capital costs, the range of operating and maintenance costs, or the sequestration costs or monitoring the construction of initial clean coal facility for the full duration of construction.

(f) This Code does not apply to the process used by the Illinois Power Agency to retain a mediator to mediate sourcing agreement disputes between electric utilities or alternative retail electric suppliers and the initial clean coal facility, as defined under Section 1-10 of the Illinois Power Agency Act, as required under paragraph (4) of subsection (d) of Section 1-75 of the Illinois Power Agency Act.

(Source: P.A. 95-481, eff. 8-28-07; 95-615, eff. 9-11-07; 95-876, eff. 8-21-08; 96-840, eff. 12-23-09; 96-1331, eff. 7-27-10.)

(30 ILCS 500/20-10)

(Text of Section from P.A. 96-159 and 96-588)

Sec. 20-10. Competitive sealed bidding; reverse auction.

(a) Conditions for use. All contracts shall be awarded by competitive sealed bidding except as otherwise provided in Section 20-5.

(b) Invitation for bids. An invitation for bids shall be issued and shall include a purchase description and the material contractual terms and conditions applicable to the procurement.

(c) Public notice. Public notice of the invitation for bids shall be published in the Illinois Procurement Bulletin at least 14 days before the date set in the invitation for the opening of bids.

(d) Bid opening. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids. The name of each bidder, the amount of each bid, and other relevant information as may be specified by rule shall be recorded. After the award of the contract, the winning bid and the record of each unsuccessful bid shall be open to public inspection.

(e) Bid acceptance and bid evaluation. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this Code. Bids shall be evaluated based on the requirements set forth in the invitation for bids, which may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award, such as discounts, transportation costs, and total or life cycle costs, shall be objectively measurable. The invitation for bids shall set forth the evaluation criteria to be used.

(f) Correction or withdrawal of bids. Correction or withdrawal of inadvertently erroneous bids before or after award, or cancellation of awards of contracts based on bid mistakes, shall be permitted in accordance with rules. After bid opening, no changes in bid prices or other provisions of bids prejudicial to the interest of the State or fair competition shall be permitted. All decisions to permit the correction or withdrawal of bids based on bid mistakes shall be supported by written determination made by a State purchasing officer.

(g) Award. The contract shall be awarded with reasonable promptness by written notice to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation for bids, except when a State purchasing officer determines it is not in the best interest of the State and by written explanation determines another bidder shall receive the award. The explanation shall appear in the appropriate volume of the Illinois Procurement Bulletin.

(h) Multi-step sealed bidding. When it is considered impracticable to initially prepare a purchase description to support an award based on price, an invitation for bids may be issued requesting the submission of unpriced offers to be followed by an invitation for bids limited to those bidders whose offers have been qualified under the criteria set forth in the first solicitation.

(i) Alternative procedures. Notwithstanding any other provision of this Act to the contrary, the Director of the Illinois Power Agency may create alternative bidding procedures to be used in procuring professional services under subsection (a) of Section 1-75 and subsection (d) of Section 1-78 1-75(a) of the Illinois Power Agency Act and Section 16-111.5(c) of the Public Utilities Act and to procure renewable energy resources under Section 1-56 of the Illinois Power Agency Act. These alternative procedures shall be set forth together with the other criteria contained in the invitation for bids, and shall appear in the appropriate volume of the Illinois Procurement Bulletin.

(j) Reverse auction. Notwithstanding any other provision of this Section and in accordance with rules adopted by the Director of Central Management Services as chief procurement officer, a State purchasing officer under that chief procurement officer's jurisdiction may procure supplies or services through a competitive electronic auction bidding process after the purchasing officer explains in writing to the chief procurement officer his or her determination that the use of such a process will be in the best interest of the State. The chief procurement officer shall publish that determination in his or her next volume of the Illinois Procurement Bulletin.

An invitation for bids shall be issued and shall include (i) a procurement description, (ii) all contractual terms, whenever practical, and (iii) conditions applicable to the procurement, including a notice that bids will be received in an electronic auction manner.

Public notice of the invitation for bids shall be given in the same manner as provided in subsection (c).

Bids shall be accepted electronically at the time and in the manner designated in the invitation for bids. During the auction, a bidder's price shall be disclosed to other bidders. Bidders shall have the opportunity to reduce their bid prices during the auction. At the conclusion of the auction, the record of the bid prices received and the name of each bidder shall be open to public inspection.

After the auction period has terminated, withdrawal of bids shall be permitted as provided in subsection (f).

The contract shall be awarded within 60 days after the auction by written notice to the lowest responsible bidder, or all bids shall be rejected except as otherwise provided in this Code. Extensions of the date for the award may be made by mutual written consent of the State purchasing officer and the lowest responsible bidder.

This subsection does not apply to (i) procurements of professional and artistic services, including but not limited to telecommunications services, communications services, Internet services, and information services, and (ii) contracts for construction projects.

(Source: P.A. 95-481, eff. 8-28-07; 96-159, eff. 8-10-09; 96-588, eff. 8-18-09; revised 10-5-10.)

(Text of Section from P.A. 96-159 and 96-795)

Sec. 20-10. Competitive sealed bidding; reverse auction.

(a) Conditions for use. All contracts shall be awarded by competitive sealed bidding except as otherwise provided in Section 20-5.

(b) Invitation for bids. An invitation for bids shall be issued and shall include a purchase description and the material contractual terms and conditions applicable to the procurement.

(c) Public notice. Public notice of the invitation for bids shall be published in the Illinois Procurement Bulletin at least 14 days before the date set in the invitation for the opening of bids.

(d) Bid opening. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids. The name of each bidder, the amount of each bid, and other relevant information as may be specified by rule shall be recorded. After the award of the contract, the winning bid and the record of each unsuccessful bid shall be open to public inspection.

(e) Bid acceptance and bid evaluation. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this Code. Bids shall be evaluated based on the requirements set forth in the invitation for bids, which may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award, such as discounts, transportation costs, and total or life cycle costs, shall be objectively measurable. The invitation for bids shall set forth the evaluation criteria to be used.

(f) Correction or withdrawal of bids. Correction or withdrawal of inadvertently erroneous bids before or after award, or cancellation of awards of contracts based on bid mistakes, shall be permitted in accordance with rules. After bid opening, no changes in bid prices or other provisions of bids prejudicial to the interest of the State or fair competition shall be permitted. All decisions to permit the correction or withdrawal of bids based on bid mistakes shall be supported by written determination made by a State purchasing officer.

(g) Award. The contract shall be awarded with reasonable promptness by written notice to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation for bids, except when a State purchasing officer determines it is not in the best interest of the State and by written explanation determines another bidder shall receive the award. The explanation shall appear in the appropriate volume of the Illinois Procurement Bulletin. The written explanation must include:

(1) a description of the agency's needs;

(2) a determination that the anticipated cost will be fair and reasonable;

(3) a listing of all responsible and responsive bidders; and

(4) the name of the bidder selected, pricing, and the reasons for selecting that bidder.

Each chief procurement officer may adopt guidelines to implement the requirements of this subsection (g).

The written explanation shall be filed with the Legislative Audit Commission and the Procurement Policy Board and be made available for inspection by the public within 30 days after the agency's decision to award the contract.

(h) Multi-step sealed bidding. When it is considered impracticable to initially prepare a purchase description to support an award based on price, an invitation for bids may be issued requesting the submission of unpriced offers to be followed by an invitation for bids limited to those bidders whose offers have been qualified under the criteria set forth in the first solicitation.

(i) Alternative procedures. Notwithstanding any other provision of this Act to the contrary, the Director of the Illinois Power Agency may create alternative bidding procedures to be used in procuring professional services under subsection (a) of Section 1-75 and subsection (d) of Section 1-78 1-75(a) of the Illinois Power Agency Act and Section 16-111.5(c) of the Public Utilities Act and to procure renewable energy resources under Section 1-56 of the Illinois Power Agency Act. These alternative procedures shall be set forth together with the other criteria contained in the invitation for bids, and shall appear in the appropriate volume of the Illinois Procurement Bulletin.

(j) Reverse auction. Notwithstanding any other provision of this Section and in accordance with rules adopted by the chief procurement officer, that chief procurement officer may procure supplies or services through a competitive electronic auction bidding process after the chief procurement officer determines that the use of such a process will be in the best interest of the State. The chief procurement officer shall publish that determination in his or her next volume of the Illinois Procurement Bulletin.

An invitation for bids shall be issued and shall include (i) a procurement description, (ii) all contractual terms, whenever practical, and (iii) conditions applicable to the procurement, including a notice that bids will be received in an electronic auction manner.

Public notice of the invitation for bids shall be given in the same manner as provided in subsection (c).

Bids shall be accepted electronically at the time and in the manner designated in the invitation for bids. During the auction, a bidder's price shall be disclosed to other bidders. Bidders shall have the opportunity to reduce their bid prices during the auction. At the conclusion of the auction, the record of the bid prices received and the name of each bidder shall be open to public inspection.

After the auction period has terminated, withdrawal of bids shall be permitted as provided in subsection (f).

The contract shall be awarded within 60 days after the auction by written notice to the lowest responsible bidder, or all bids shall be rejected except as otherwise provided in this Code. Extensions of the date for the award may be made by mutual written consent of the State purchasing officer and the lowest responsible bidder.

This subsection does not apply to (i) procurements of professional and artistic services, (ii) telecommunications services, communication services, and information services, and (iii) contracts for construction projects.

(Source: P.A. 95-481, eff. 8-28-07; 96-159, eff. 8-10-09; 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the effective date of changes made by P.A. 96-795); revised 10-5-10.)

Section 15. The Public Utilities Act is amended by changing Sections 3-101, 16-115, and 16-116 and by adding Section 3-123 as follows:

(220 ILCS 5/3-101) (from Ch. 111 2/3, par. 3-101)

Sec. 3-101. Definitions. Unless otherwise specified, the terms set forth in Sections 3-102 through 3-123 3-121 are used in this Act as therein defined.

(Source: P.A. 84-617; 84-1118.)

(220 ILCS 5/3-123 new)

Sec. 3-123. Initial clean coal facility; sequester; sourcing agreement; substitute natural gas or SNG. As used in this Act:

"Initial clean coal facility" shall have the same meaning as provided in Section 1-10 of the Illinois Power Agency Act.

"Sequester" shall have the same meaning as provided in Section 1-10 of the Illinois Power Agency Act.

"Sourcing agreement" means an agreement between the owner of the initial clean coal facility and an alternative retail electric supplier that has the terms and conditions meeting the requirements of paragraph (5) of subsection (d) of Section 16-115 of this Act.

"Substitute natural gas" or "SNG" shall have the same meaning as provided in Section 1-10 of the Illinois Power Agency Act.

(220 ILCS 5/16-115)

Sec. 16-115. Certification of alternative retail electric suppliers.

(a) Any alternative retail electric supplier must obtain a certificate of service authority from the Commission in accordance with this Section before serving any retail customer or other user located in this State. An alternative retail electric supplier may request, and the Commission may grant, a certificate of service authority for the entire State or for a specified geographic area of the State.

(b) An alternative retail electric supplier seeking a certificate of service authority shall file with the Commission a verified application containing information showing that the applicant meets the requirements of this Section. The alternative retail electric supplier shall publish notice of its application in the official State newspaper within 10 days following the date of its filing. No later than 45 days after the application is properly filed with the Commission, and such notice is published, the Commission shall issue its order granting or denying the application.

(c) An application for a certificate of service authority shall identify the area or areas in which the applicant intends to offer service and the types of services it intends to offer. Applicants that seek to serve residential or small commercial retail customers within a geographic area that is smaller than an electric utility's service area shall submit evidence demonstrating that the designation of this smaller area does not violate Section 16-115A. An applicant that seeks to serve residential or small commercial retail customers may state in its application for certification any limitations that will be imposed on the number of customers or maximum load to be served.

(d) The Commission shall grant the application for a certificate of service authority if it makes the findings set forth in this subsection based on the verified application and such other information as the applicant may submit:

(1) That the applicant possesses sufficient technical, financial and managerial resources and abilities to provide the service for which it seeks a certificate of service authority. In determining the level of technical, financial and managerial resources and abilities which the applicant must demonstrate, the Commission shall consider (i) the characteristics, including the size and financial sophistication, of the customers that the applicant seeks to serve, and (ii) whether the applicant seeks to provide electric power and energy using property, plant and equipment which it owns, controls or operates;

(2) That the applicant will comply with all applicable federal, State, regional and industry rules, policies, practices and procedures for the use, operation, and maintenance of the safety, integrity and reliability, of the interconnected electric transmission system;

(3) That the applicant will only provide service to retail customers in an electric utility's service area that are eligible to take delivery services under this Act;

(4) That the applicant will comply with such informational or reporting requirements as the Commission may by rule establish and provide the information required by Section 16-112. Any data related to contracts for the purchase and sale of electric power and energy shall be made available for review by the Staff of the Commission on a confidential and proprietary basis and only to the extent and for the purposes which the Commission determines are reasonably necessary in order to carry out the purposes of this Act;

(5) That the applicant will procure renewable energy resources in accordance with Section 16-115D of this Act, and will source electricity from clean coal facilities, as defined in Section 1-10 of the Illinois Power Agency Act, in amounts at least equal to the amounts percentages set forth in subsections (c) and (d) of Section 1-75 of the Illinois Power Agency Act. For purposes of this Section:

(i) (blank) (Blank);

(ii) (blank) (Blank);

(iii) (blank); the required sourcing of electricity generated by clean coal facilities, other than the initial clean coal facility, shall be limited to the amount of electricity that can be procured or sourced at a price at or below the benchmarks approved by the Commission each year in accordance with item (1) of subsection (c) and items (1) and (5) of subsection (d) of Section 1-75 of the Illinois Power Agency Act;

(iv) all alternative retail electric suppliers, whether certified before or after the effective date of this amendatory Act of the 96th General Assembly, shall execute a sourcing agreement to source electricity from the initial clean coal facility, on the terms set forth in paragraphs (3) and (4) of subsection (d) of Section 1-75 of the Illinois Power Agency Act, except that in lieu of the requirements in subparagraph subparagraphs (A)(v), (B)(i), (C)(v), and (C)(vi) of paragraph (3) of that subsection (d), the sourcing agreement applicant shall contain execute one or more of the following:

(1) provisions requiring the alternative retail electric supplier if the sourcing agreement is a power purchase agreement, a contract with the initial clean coal facility to purchase in each hour an amount of electricity equal to all clean coal energy made available from the initial clean coal facility during such hour, which the utilities are not required to procure under the terms of subsection (d) of Section 1-75 of the Illinois Power Agency Act, multiplied by a fraction, the numerator of which is the alternative retail electric supplier's retail market sales of electricity (expressed in kilowatthours sold) in the State during the third month preceding the current prior calendar month and the denominator of which is the total sales of electricity (expressed in kilowatthours sold) in the State by alternative retail electric suppliers during such third month preceding the current prior month that are subject to the requirements of this paragraph (5) of subsection (d) of this Section and subsection (d) of Section 1-75 of the Illinois Power Agency Act plus the total sales of electricity (expressed in kilowatthours sold) by utilities in the State outside of their service areas during such third month preceding the current prior month, pursuant to subsection (c) of Section 16-116 of this Act; or

(2) provisions requiring the alternative retail supplier to pay or receive for if the sourcing agreement is a contract for differences, a contract with the initial clean coal facility in each hour with respect to an amount of electricity equal to all clean coal energy made available from the initial clean coal facility during such hour, which the utilities are not required to procure under the terms of subsection (d) of Section 1-75 of the Illinois Power Agency Act, multiplied by a fraction, the numerator of which is the alternative retail electric supplier's retail market sales of electricity (expressed in kilowatthours sold) in the State during the third month preceding the current prior calendar month and the denominator of which is the total sales of electricity (expressed in kilowatthours sold) in the State by alternative retail electric suppliers during such prior month that are subject to the requirements of this paragraph (5) of subsection (d) of this Section and subsection (d) of Section 1-75 of the Illinois Power Agency Act plus the total sales of electricity (expressed in kilowatthours sold) by utilities outside of their service areas during such prior month, pursuant to subsection (c) of Section 16-116 of this Act;

(v) the initial clean coal facility shall comply with Section 1-76.5 of the Illinois Power Agency Act; if, in any year after the first year of commercial operation, the owner of the clean coal facility fails to demonstrate to the Commission that the initial clean coal facility captured and sequestered at least 50% of the total carbon emissions that the facility would otherwise emit or that sequestration of emissions from prior years has failed, resulting in the release of carbon into the atmosphere, the owner of the facility must offset excess emissions. Any such carbon offsets must be permanent, additional, verifiable, real, located within the State of Illinois, and legally and practicably enforceable. The costs of any such offsets that are not recoverable shall not exceed $15 million in any given year. No costs of any such purchases of carbon offsets may be recovered from an alternative retail electric supplier or its customers. All carbon offsets purchased for this purpose and any carbon emission credits associated with sequestration of carbon from the facility must be permanently retired. The initial clean coal facility shall not forfeit its designation as a clean coal facility if the facility fails to fully comply with the applicable carbon sequestration requirements in any given year, provided the requisite offsets are purchased. However, the Attorney General, on behalf of the People of the State of Illinois, may specifically enforce the facility's sequestration requirement and the other terms of this contract provision. Compliance with the sequestration requirements and offset purchase requirements that apply to the initial clean coal facility shall be reviewed annually by an independent expert retained by the owner of the initial clean coal facility, with the advance written approval of the Attorney General;

(vi) the The Commission shall, after notice and hearing, revoke the certification of any alternative retail electric supplier that fails to execute a sourcing agreement with the initial clean coal facility as required by item (5) of subsection (d) of this Section. The sourcing agreements with the this initial clean coal facility shall be subject to approval both approval of the initial clean coal facility by the Illinois Power Agency pursuant to paragraph (4) of subsection (d) of Section 1-75 of the Illinois Power Agency Act General Assembly and satisfaction of the requirements of item (4) of subsection (d) of Section 1-75 of the Illinois Power Agency Act, and shall be executed within 30 90 days after either the any such approval by the Illinois Power Agency or the issuance of any necessary approval by the Federal Energy Regulatory Commission, whichever is later;

(vii) The Commission shall have jurisdiction over disciplinary proceedings and complaints for violations of this Section. If, upon complaint, the Commission determines an alternative retail electric supplier has failed to execute a sourcing agreement with the initial clean coal facility, then the Commission shall issue notice of the finding to the alternative retail electric supplier. The alternative retail electric supplier shall have 30 days after the receipt of notice to enter into a sourcing agreement. If, after the notice period, the Commission finds an alternative retail electric supplier has failed to comply, then the Commission shall revoke the alternative retail electric supplier's certificate for 6 months General Assembly. The Commission shall not accept an application for certification from an alternative retail electric supplier that has lost certification under this subsection (d), or any corporate affiliate thereof, for at least one year from the date of revocation;

(6) With respect to an applicant that seeks to serve residential or small commercial retail customers, that the area to be served by the applicant and any limitations it proposes on the number of customers or maximum amount of load to be served meet the provisions of Section 16-115A, provided, that the Commission can extend the time for considering such a certificate request by up to 90 days, and can schedule hearings on such a request;

(7) That the applicant meets the requirements of subsection (a) of Section 16-128; and

(8) That the applicant will comply with all other applicable laws and regulations.

(d-5) (Blank).

(e) A retail customer that owns a cogeneration or self-generation facility and that seeks certification only to provide electric power and energy from such facility to retail customers at separate locations which customers are both (i) owned by, or a subsidiary or other corporate affiliate of, such applicant and (ii) eligible for delivery services, shall be granted a certificate of service authority upon filing an application and notifying the Commission that it has entered into an agreement with the relevant electric utilities pursuant to Section 16-118. Provided, however, that if the retail customer owning such cogeneration or self-generation facility would not be charged a transition charge due to the exemption provided under subsection (f) of Section 16-108 prior to the certification, and the retail customers at separate locations are taking delivery services in conjunction with purchasing power and energy from the facility, the retail customer on whose premises the facility is located shall not thereafter be required to pay transition charges on the power and energy that such retail customer takes from the facility.

(f) The Commission shall have the authority to promulgate rules and regulations to carry out the provisions of this Section. On or before May 1, 1999, the Commission shall adopt a rule or rules applicable to the certification of those alternative retail electric suppliers that seek to serve only nonresidential retail customers with maximum electrical demands of one megawatt or more which shall provide for (i) expedited and streamlined procedures for certification of such alternative retail electric suppliers and (ii) specific criteria which, if met by any such alternative retail electric supplier, shall constitute the demonstration of technical, financial and managerial resources and abilities to provide service required by subsection (d) (1) of this Section, such as a requirement to post a bond or letter of credit, from a responsible surety or financial institution, of sufficient size for the nature and scope of the services to be provided; demonstration of adequate insurance for the scope and nature of the services to be provided; and experience in providing similar services in other jurisdictions.

(Source: P.A. 95-130, eff. 1-1-08; 95-1027, eff. 6-1-09; 96-159, eff. 8-10-09.)

(220 ILCS 5/16-116)

Sec. 16-116. Commission oversight of electric utilities serving retail customers outside their service areas or providing competitive, non-tariffed services.

(a) An electric utility that has a tariff on file for delivery services may, without regard to any otherwise applicable tariffs on file, provide electric power and energy to one or more retail customers located outside its service area, but only to the extent (i) such retail customer (A) is eligible for delivery services under any delivery services tariff filed with the Commission by the electric utility in whose service area the retail customer is located and (B) has either elected to take such delivery services or has paid or contracted to pay the charges specified in Sections 16-108 and 16-114, or (ii) if such retail customer is served by a municipal system or electric cooperative, the customer is eligible for delivery services under the terms and conditions for such service established by the municipal system or electric cooperative serving that customer.

(b) An electric utility may offer any competitive service to any customer or group of customers without filing contracts with or seeking approval of the Commission, notwithstanding any rule or regulation that would require such approval. The Commission shall not increase or decrease the prices, and may not alter or add to the terms and conditions for the utility's competitive services, from those agreed to by the electric utility and the customer or customers. Non-tariffed, competitive services shall not be subject to the provisions of the Electric Supplier Act or to Articles V, VII, VIII or IX of the Act, except to the extent that any provisions of such Articles are made applicable to alternative retail electric suppliers pursuant to Sections 16-115 and 16-115A, but shall be subject to the provisions of subsections (b) through (g) of Section 16-115A, and Section 16-115B to the same extent such provisions are applicable to the services provided by alternative retail electric suppliers.

(c) Electric utilities serving retail customers outside their service areas shall be subject to the requirements of paragraph (5) of subsection (d) of Section 16-115 of the Public Utilities Act, except that the numerators referred to in that subsection (d) shall be the utility's retail market sales of electricity (expressed in kilowatthours sold) in the State outside of the utility's service territory in the third month preceding the current prior month.

(Source: P.A. 95-1027, eff. 6-1-09.)

Section 20. The Illinois Gas Pipeline Safety Act is amended by changing Sections 2.02, 2.03, 2.04, and 3 as follows:

(220 ILCS 20/2.02) (from Ch. 111 2/3, par. 552.2)

Sec. 2.02. "Gas" means natural gas, flammable gas or gas which is toxic or corrosive. "Gas" also means carbon dioxide in any physical form, whenever transported by pipeline for the purpose of sequestration.

(Source: P.A. 76-1588.)

(220 ILCS 20/2.03) (from Ch. 111 2/3, par. 552.3)

Sec. 2.03. "Transportation of gas" means the gathering, transmission, or distribution of gas by pipeline or its storage, within this State and not subject to the jurisdiction of the Federal Energy Regulatory Commission under the Natural Gas Act, except that it includes the transmission of gas through pipeline facilities within this State that transport gas from an interstate gas pipeline to a direct sales customer within this State purchasing gas for its own consumption. "Transportation of gas" also includes the conveyance of gas from a gas main through the primary fuel line to the outside wall of residential premises. If the gas meter is placed within 3 feet of the structure, the utility's responsibility shall end at the outlet side of the meter. "Transportation of gas" also includes the conveyance of carbon dioxide in any physical form for the purpose of sequestration.

(Source: P.A. 87-1092; 88-314.)

(220 ILCS 20/2.04) (from Ch. 111 2/3, par. 552.4)

Sec. 2.04. "Pipeline facilities" includes new and existing pipe rights-of-way and any equipment, facility, or building used in the transportation of gas or the treatment of gas during the course of transportation and includes facilities within this State that transport gas from an interstate gas pipeline to a direct sales customer within this State purchasing gas for its own consumption, but "rights-of-way" as used in this Act does not authorize the Commission to prescribe, under this Act, the location or routing of any pipeline facility. "Pipeline facilities" also includes new and existing pipes and lines and any other equipment, facility, or structure, except customer-owned branch lines connected to the primary fuel lines, used to convey gas from a gas main to the outside wall of residential premises, and any person who provides gas service directly to its residential customer through these facilities shall be deemed to operate such pipeline facilities for purposes of this Act irrespective of the ownership of the facilities or the location of the facilities with respect to the meter, except that a person who provides gas service to a "master meter system", as that term is defined at 49 C.F.R. Section 191.3, shall not be deemed to operate any facilities downstream of the master meter. "Pipeline facilities" also includes new and existing pipe rights-of-way and any equipment, facility, or building used in the transportation of carbon dioxide in any physical form for the purpose of sequestration.

(Source: P.A. 87-1092; 88-314.)

(220 ILCS 20/3) (from Ch. 111 2/3, par. 553)

Sec. 3. (a) As soon as practicable, but not later than 3 months after the effective date of this Act, the Commission shall adopt rules establishing minimum safety standards for the transportation of gas and for pipeline facilities. Such rules shall be at least as inclusive, as stringent, and compatible with, the minimum safety standards adopted by the Secretary of Transportation under the Federal Act. Thereafter, the Commission shall maintain such rules so that the rules are at least as inclusive, as stringent, and compatible with, the minimum standards from time to time in effect under the Federal Act. The Commission shall also adopt rules establishing minimum safety standards for the transportation of carbon dioxide in any physical form for the purpose of sequestration and for pipeline facilities used for that function.

(b) Standards established under this Act may apply to the design, installation, inspection, testing, construction, extension, operation, replacement, and maintenance of pipeline facilities. Standards affecting the design, installation, construction, initial inspection and initial testing are not applicable to pipeline facilities in existence on the date such standards are adopted. Whenever the Commission finds a particular facility to be hazardous to life or property, it may require the person operating such facility to take the steps necessary to remove the hazard.

(c) Standards established by the Commission under this Act shall, subject to paragraphs (a) and (b) of this Section 3, be practicable and designed to meet the need for pipeline safety. In prescribing such standards, the Commission shall consider: similar standards established in other states; relevant available pipeline safety data; whether such standards are appropriate for the particular type of pipeline transportation; the reasonableness of any proposed standards; and the extent to which such standards will contribute to public safety.

Rules adopted under this Act are subject to "The Illinois Administrative Procedure Act", approved September 22, 1975, as amended.

(Source: P.A. 83-333.)

Section 25. The Environmental Protection Act is amended by adding Section 13.7 as follows:

(415 ILCS 5/13.7 new)

Sec. 13.7. Carbon dioxide sequestration sites.

(a) For purposes of this Section, the term "carbon dioxide sequestration site" means a site or facility for which the Agency has issued a permit for the underground injection of carbon dioxide.

(b) The Agency shall inspect carbon dioxide sequestration sites for compliance with this Act, rules adopted under this Act, and permits issued by the Agency.

(c) If the Agency issues a seal order under Section 34 of this Act in relation to a carbon dioxide sequestration site, or if a civil action for an injunction to halt activity at a carbon dioxide sequestration site is initiated under Section 43 of this Act at the request of the Agency, then the Agency shall post notice of the action on its website.

(d) Persons seeking a permit or permit modification for the underground injection of carbon dioxide shall be liable to the Agency for all reasonable and documented costs incurred by the Agency that are associated with review and issuance of the permit, including, but not limited to, costs associated with public hearings and the review of permit applications. Once a permit is issued, the permittee shall be liable to the Agency for all reasonable and documented costs incurred by the Agency that are associated with inspections and other oversight of the carbon dioxide sequestration site. Persons liable for costs under this subsection (d) must pay the costs upon invoicing, or other request or demand for payment, by the Agency.

Moneys collected under this subsection (d) shall be deposited into the Environmental Protection Permit and Inspection Fund established under Section 22.8 of this Act. The Agency may adopt rules relating to the collection of costs due under this subsection (d).

(e) The Agency shall not issue a permit or permit modification for the underground injection of carbon dioxide unless all costs for which the permitee is liable under subsection (d) of this Section have been paid.

(f) No person shall fail or refuse to pay costs for which the person is liable under subsection (d) of this Section.

Section 85. Rulemaking. The Illinois Environmental Protection Agency, the Illinois Commerce Commission, the Capital Development Board, and the Illinois Department of Natural Resources shall have rulemaking authority to implement the provisions of this amendatory Act of the 96th General Assembly.

Section 90. Inseverability. The provisions of this Act are mutually dependent and inseverable. If any provision is held invalid, then this entire Act, including all new and amendatory provisions, is invalid.

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