97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1368

 

Introduced 2/9/2011, by Rep. Thomas Holbrook

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3855/1-75
20 ILCS 3855/1-125
220 ILCS 5/16-115D

    Amends the Illinois Power Agency Act. Provides that beginning April 1, 2012, and each year thereafter, the Illinois Power Agency shall prepare a report for the General Assembly and Illinois Commerce Commission that shall include, but not be limited to, renewable portfolio standards. Provides that a required annual report shall include the quantity, price, and rate impact of all renewable resources purchased pursuant to long-term contracts under the electricity procurement plans for electric utilities. Amends the Public Utilities Act. Provides that beginning April 1, 2012 and by April 1 of each year thereafter, the Illinois Power Agency shall submit an annual report to the General Assembly, the Commission, and alternative retail electric suppliers that shall include specified information. Effective immediately.


LRB097 09296 ASK 49431 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1368LRB097 09296 ASK 49431 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Power Agency Act is amended by
5changing Sections 1-75 and 1-125 as follows:
 
6    (20 ILCS 3855/1-75)
7    Sec. 1-75. Planning and Procurement Bureau. The Planning
8and Procurement Bureau has the following duties and
9responsibilities:
10        (a) The Planning and Procurement Bureau shall each
11    year, beginning in 2008, develop procurement plans and
12    conduct competitive procurement processes in accordance
13    with the requirements of Section 16-111.5 of the Public
14    Utilities Act for the eligible retail customers of electric
15    utilities that on December 31, 2005 provided electric
16    service to at least 100,000 customers in Illinois. For the
17    purposes of this Section, the term "eligible retail
18    customers" has the same definition as found in Section
19    16-111.5(a) of the Public Utilities Act.
20            (1) The Agency shall each year, beginning in 2008,
21        as needed, issue a request for qualifications for
22        experts or expert consulting firms to develop the
23        procurement plans in accordance with Section 16-111.5

 

 

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1        of the Public Utilities Act. In order to qualify an
2        expert or expert consulting firm must have:
3                (A) direct previous experience assembling
4            large-scale power supply plans or portfolios for
5            end-use customers;
6                (B) an advanced degree in economics,
7            mathematics, engineering, risk management, or a
8            related area of study;
9                (C) 10 years of experience in the electricity
10            sector, including managing supply risk;
11                (D) expertise in wholesale electricity market
12            rules, including those established by the Federal
13            Energy Regulatory Commission and regional
14            transmission organizations;
15                (E) expertise in credit protocols and
16            familiarity with contract protocols;
17                (F) adequate resources to perform and fulfill
18            the required functions and responsibilities; and
19                (G) the absence of a conflict of interest and
20            inappropriate bias for or against potential
21            bidders or the affected electric utilities.
22            (2) The Agency shall each year, as needed, issue a
23        request for qualifications for a procurement
24        administrator to conduct the competitive procurement
25        processes in accordance with Section 16-111.5 of the
26        Public Utilities Act. In order to qualify an expert or

 

 

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1        expert consulting firm must have:
2                (A) direct previous experience administering a
3            large-scale competitive procurement process;
4                (B) an advanced degree in economics,
5            mathematics, engineering, or a related area of
6            study;
7                (C) 10 years of experience in the electricity
8            sector, including risk management experience;
9                (D) expertise in wholesale electricity market
10            rules, including those established by the Federal
11            Energy Regulatory Commission and regional
12            transmission organizations;
13                (E) expertise in credit and contract
14            protocols;
15                (F) adequate resources to perform and fulfill
16            the required functions and responsibilities; and
17                (G) the absence of a conflict of interest and
18            inappropriate bias for or against potential
19            bidders or the affected electric utilities.
20            (3) The Agency shall provide affected utilities
21        and other interested parties with the lists of
22        qualified experts or expert consulting firms
23        identified through the request for qualifications
24        processes that are under consideration to develop the
25        procurement plans and to serve as the procurement
26        administrator. The Agency shall also provide each

 

 

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1        qualified expert's or expert consulting firm's
2        response to the request for qualifications. All
3        information provided under this subparagraph shall
4        also be provided to the Commission. The Agency may
5        provide by rule for fees associated with supplying the
6        information to utilities and other interested parties.
7        These parties shall, within 5 business days, notify the
8        Agency in writing if they object to any experts or
9        expert consulting firms on the lists. Objections shall
10        be based on:
11                (A) failure to satisfy qualification criteria;
12                (B) identification of a conflict of interest;
13            or
14                (C) evidence of inappropriate bias for or
15            against potential bidders or the affected
16            utilities.
17            The Agency shall remove experts or expert
18        consulting firms from the lists within 10 days if there
19        is a reasonable basis for an objection and provide the
20        updated lists to the affected utilities and other
21        interested parties. If the Agency fails to remove an
22        expert or expert consulting firm from a list, an
23        objecting party may seek review by the Commission
24        within 5 days thereafter by filing a petition, and the
25        Commission shall render a ruling on the petition within
26        10 days. There is no right of appeal of the

 

 

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1        Commission's ruling.
2            (4) The Agency shall issue requests for proposals
3        to the qualified experts or expert consulting firms to
4        develop a procurement plan for the affected utilities
5        and to serve as procurement administrator.
6            (5) The Agency shall select an expert or expert
7        consulting firm to develop procurement plans based on
8        the proposals submitted and shall award one-year
9        contracts to those selected with an option for the
10        Agency for a one-year renewal.
11            (6) The Agency shall select an expert or expert
12        consulting firm, with approval of the Commission, to
13        serve as procurement administrator based on the
14        proposals submitted. If the Commission rejects, within
15        5 days, the Agency's selection, the Agency shall submit
16        another recommendation within 3 days based on the
17        proposals submitted. The Agency shall award a one-year
18        contract to the expert or expert consulting firm so
19        selected with Commission approval with an option for
20        the Agency for a one-year renewal.
21        (b) The experts or expert consulting firms retained by
22    the Agency shall, as appropriate, prepare procurement
23    plans, and conduct a competitive procurement process as
24    prescribed in Section 16-111.5 of the Public Utilities Act,
25    to ensure adequate, reliable, affordable, efficient, and
26    environmentally sustainable electric service at the lowest

 

 

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1    total cost over time, taking into account any benefits of
2    price stability, for eligible retail customers of electric
3    utilities that on December 31, 2005 provided electric
4    service to at least 100,000 customers in the State of
5    Illinois.
6        (c) Renewable portfolio standard.
7            (1) The procurement plans shall include
8        cost-effective renewable energy resources. A minimum
9        percentage of each utility's total supply to serve the
10        load of eligible retail customers, as defined in
11        Section 16-111.5(a) of the Public Utilities Act,
12        procured for each of the following years shall be
13        generated from cost-effective renewable energy
14        resources: at least 2% by June 1, 2008; at least 4% by
15        June 1, 2009; at least 5% by June 1, 2010; at least 6%
16        by June 1, 2011; at least 7% by June 1, 2012; at least
17        8% by June 1, 2013; at least 9% by June 1, 2014; at
18        least 10% by June 1, 2015; and increasing by at least
19        1.5% each year thereafter to at least 25% by June 1,
20        2025. To the extent that it is available, at least 75%
21        of the renewable energy resources used to meet these
22        standards shall come from wind generation and,
23        beginning on June 1, 2011, at least the following
24        percentages of the renewable energy resources used to
25        meet these standards shall come from photovoltaics on
26        the following schedule: 0.5% by June 1, 2012, 1.5% by

 

 

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1        June 1, 2013; 3% by June 1, 2014; and 6% by June 1,
2        2015 and thereafter. For purposes of this subsection
3        (c), "cost-effective" means that the costs of
4        procuring renewable energy resources do not cause the
5        limit stated in paragraph (2) of this subsection (c) to
6        be exceeded and do not exceed benchmarks based on
7        market prices for renewable energy resources in the
8        region, which shall be developed by the procurement
9        administrator, in consultation with the Commission
10        staff, Agency staff, and the procurement monitor and
11        shall be subject to Commission review and approval.
12            (2) For purposes of this subsection (c), the
13        required procurement of cost-effective renewable
14        energy resources for a particular year shall be
15        measured as a percentage of the actual amount of
16        electricity (megawatt-hours) supplied by the electric
17        utility to eligible retail customers in the planning
18        year ending immediately prior to the procurement. For
19        purposes of this subsection (c), the amount paid per
20        kilowatthour means the total amount paid for electric
21        service expressed on a per kilowatthour basis. For
22        purposes of this subsection (c), the total amount paid
23        for electric service includes without limitation
24        amounts paid for supply, transmission, distribution,
25        surcharges, and add-on taxes.
26            Notwithstanding the requirements of this

 

 

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1        subsection (c), the total of renewable energy
2        resources procured pursuant to the procurement plan
3        for any single year shall be reduced by an amount
4        necessary to limit the annual estimated average net
5        increase due to the costs of these resources included
6        in the amounts paid by eligible retail customers in
7        connection with electric service to:
8                (A) in 2008, no more than 0.5% of the amount
9            paid per kilowatthour by those customers during
10            the year ending May 31, 2007;
11                (B) in 2009, the greater of an additional 0.5%
12            of the amount paid per kilowatthour by those
13            customers during the year ending May 31, 2008 or 1%
14            of the amount paid per kilowatthour by those
15            customers during the year ending May 31, 2007;
16                (C) in 2010, the greater of an additional 0.5%
17            of the amount paid per kilowatthour by those
18            customers during the year ending May 31, 2009 or
19            1.5% of the amount paid per kilowatthour by those
20            customers during the year ending May 31, 2007;
21                (D) in 2011, the greater of an additional 0.5%
22            of the amount paid per kilowatthour by those
23            customers during the year ending May 31, 2010 or 2%
24            of the amount paid per kilowatthour by those
25            customers during the year ending May 31, 2007; and
26                (E) thereafter, the amount of renewable energy

 

 

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1            resources procured pursuant to the procurement
2            plan for any single year shall be reduced by an
3            amount necessary to limit the estimated average
4            net increase due to the cost of these resources
5            included in the amounts paid by eligible retail
6            customers in connection with electric service to
7            no more than the greater of 2.015% of the amount
8            paid per kilowatthour by those customers during
9            the year ending May 31, 2007 or the incremental
10            amount per kilowatthour paid for these resources
11            in 2011.
12            No later than June 30, 2011, the Commission shall
13        review the limitation on the amount of renewable energy
14        resources procured pursuant to this subsection (c) and
15        report to the General Assembly its findings as to
16        whether that limitation unduly constrains the
17        procurement of cost-effective renewable energy
18        resources.
19            (3) Through June 1, 2011, renewable energy
20        resources shall be counted for the purpose of meeting
21        the renewable energy standards set forth in paragraph
22        (1) of this subsection (c) only if they are generated
23        from facilities located in the State, provided that
24        cost-effective renewable energy resources are
25        available from those facilities. If those
26        cost-effective resources are not available in

 

 

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1        Illinois, they shall be procured in states that adjoin
2        Illinois and may be counted towards compliance. If
3        those cost-effective resources are not available in
4        Illinois or in states that adjoin Illinois, they shall
5        be purchased elsewhere and shall be counted towards
6        compliance. After June 1, 2011, cost-effective
7        renewable energy resources located in Illinois and in
8        states that adjoin Illinois may be counted towards
9        compliance with the standards set forth in paragraph
10        (1) of this subsection (c). If those cost-effective
11        resources are not available in Illinois or in states
12        that adjoin Illinois, they shall be purchased
13        elsewhere and shall be counted towards compliance.
14            (4) The electric utility shall retire all
15        renewable energy credits used to comply with the
16        standard.
17            (5) Beginning with the year commencing June 1,
18        2010, an electric utility subject to this subsection
19        (c) shall apply the lesser of the maximum alternative
20        compliance payment rate or the most recent estimated
21        alternative compliance payment rate for its service
22        territory for the corresponding compliance period,
23        established pursuant to subsection (d) of Section
24        16-115D of the Public Utilities Act to its retail
25        customers that take service pursuant to the electric
26        utility's hourly pricing tariff or tariffs. The

 

 

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1        electric utility shall retain all amounts collected as
2        a result of the application of the alternative
3        compliance payment rate or rates to such customers,
4        and, beginning in 2011, the utility shall include in
5        the information provided under item (1) of subsection
6        (d) of Section 16-111.5 of the Public Utilities Act the
7        amounts collected under the alternative compliance
8        payment rate or rates for the prior year ending May 31.
9        Notwithstanding any limitation on the procurement of
10        renewable energy resources imposed by item (2) of this
11        subsection (c), the Agency shall increase its spending
12        on the purchase of renewable energy resources to be
13        procured by the electric utility for the next plan year
14        by an amount equal to the amounts collected by the
15        utility under the alternative compliance payment rate
16        or rates in the prior year ending May 31. Beginning
17        April 1, 2012, and each year thereafter, the Agency
18        shall prepare a public report for the General Assembly
19        and Illinois Commerce Commission that shall include,
20        but not necessarily be limited to:
21                (A) a comparison of the costs associated with
22            the Agency's procurement of renewable energy
23            resources to the Agency's costs associated with
24            electricity generated by other types of generation
25            facilities; and
26                (B) an analysis of the rate impacts associated

 

 

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1            with the Illinois Power Agency's procurement of
2            renewable resources, including, but not limited
3            to, any long-term contracts, on the eligible
4            retail customers of electric utilities.
5            The analysis shall include the Agency's estimate
6        of the total dollar impact that the Agency's
7        procurement of renewable resources has had on the
8        annual electricity bills of the customer classes that
9        comprise each eligible retail customer class taking
10        service from an electric utility. The Agency's report
11        shall also analyze how the operation of the alternative
12        compliance payment mechanism, any long-term contracts,
13        or other aspects of the applicable renewable portfolio
14        standards impacts the rates of customers of
15        alternative retail electric suppliers.
16    (d) Clean coal portfolio standard.
17        (1) The procurement plans shall include electricity
18    generated using clean coal. Each utility shall enter into
19    one or more sourcing agreements with the initial clean coal
20    facility, as provided in paragraph (3) of this subsection
21    (d), covering electricity generated by the initial clean
22    coal facility representing at least 5% of each utility's
23    total supply to serve the load of eligible retail customers
24    in 2015 and each year thereafter, as described in paragraph
25    (3) of this subsection (d), subject to the limits specified
26    in paragraph (2) of this subsection (d). It is the goal of

 

 

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1    the State that by January 1, 2025, 25% of the electricity
2    used in the State shall be generated by cost-effective
3    clean coal facilities. For purposes of this subsection (d),
4    "cost-effective" means that the expenditures pursuant to
5    such sourcing agreements do not cause the limit stated in
6    paragraph (2) of this subsection (d) to be exceeded and do
7    not exceed cost-based benchmarks, which shall be developed
8    to assess all expenditures pursuant to such sourcing
9    agreements covering electricity generated by clean coal
10    facilities, other than the initial clean coal facility, by
11    the procurement administrator, in consultation with the
12    Commission staff, Agency staff, and the procurement
13    monitor and shall be subject to Commission review and
14    approval.
15            (A) A utility party to a sourcing agreement shall
16        immediately retire any emission credits that it
17        receives in connection with the electricity covered by
18        such agreement.
19            (B) Utilities shall maintain adequate records
20        documenting the purchases under the sourcing agreement
21        to comply with this subsection (d) and shall file an
22        accounting with the load forecast that must be filed
23        with the Agency by July 15 of each year, in accordance
24        with subsection (d) of Section 16-111.5 of the Public
25        Utilities Act.
26            (C) A utility shall be deemed to have complied with

 

 

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1        the clean coal portfolio standard specified in this
2        subsection (d) if the utility enters into a sourcing
3        agreement as required by this subsection (d).
4        (2) For purposes of this subsection (d), the required
5    execution of sourcing agreements with the initial clean
6    coal facility for a particular year shall be measured as a
7    percentage of the actual amount of electricity
8    (megawatt-hours) supplied by the electric utility to
9    eligible retail customers in the planning year ending
10    immediately prior to the agreement's execution. For
11    purposes of this subsection (d), the amount paid per
12    kilowatthour means the total amount paid for electric
13    service expressed on a per kilowatthour basis. For purposes
14    of this subsection (d), the total amount paid for electric
15    service includes without limitation amounts paid for
16    supply, transmission, distribution, surcharges and add-on
17    taxes.
18        Notwithstanding the requirements of this subsection
19    (d), the total amount paid under sourcing agreements with
20    clean coal facilities pursuant to the procurement plan for
21    any given year shall be reduced by an amount necessary to
22    limit the annual estimated average net increase due to the
23    costs of these resources included in the amounts paid by
24    eligible retail customers in connection with electric
25    service to:
26                (A) in 2010, no more than 0.5% of the amount

 

 

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1            paid per kilowatthour by those customers during
2            the year ending May 31, 2009;
3                (B) in 2011, the greater of an additional 0.5%
4            of the amount paid per kilowatthour by those
5            customers during the year ending May 31, 2010 or 1%
6            of the amount paid per kilowatthour by those
7            customers during the year ending May 31, 2009;
8                (C) in 2012, the greater of an additional 0.5%
9            of the amount paid per kilowatthour by those
10            customers during the year ending May 31, 2011 or
11            1.5% of the amount paid per kilowatthour by those
12            customers during the year ending May 31, 2009;
13                (D) in 2013, the greater of an additional 0.5%
14            of the amount paid per kilowatthour by those
15            customers during the year ending May 31, 2012 or 2%
16            of the amount paid per kilowatthour by those
17            customers during the year ending May 31, 2009; and
18                (E) thereafter, the total amount paid under
19            sourcing agreements with clean coal facilities
20            pursuant to the procurement plan for any single
21            year shall be reduced by an amount necessary to
22            limit the estimated average net increase due to the
23            cost of these resources included in the amounts
24            paid by eligible retail customers in connection
25            with electric service to no more than the greater
26            of (i) 2.015% of the amount paid per kilowatthour

 

 

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1            by those customers during the year ending May 31,
2            2009 or (ii) the incremental amount per
3            kilowatthour paid for these resources in 2013.
4            These requirements may be altered only as provided
5            by statute. No later than June 30, 2015, the
6            Commission shall review the limitation on the
7            total amount paid under sourcing agreements, if
8            any, with clean coal facilities pursuant to this
9            subsection (d) and report to the General Assembly
10            its findings as to whether that limitation unduly
11            constrains the amount of electricity generated by
12            cost-effective clean coal facilities that is
13            covered by sourcing agreements.
14        (3) Initial clean coal facility. In order to promote
15    development of clean coal facilities in Illinois, each
16    electric utility subject to this Section shall execute a
17    sourcing agreement to source electricity from a proposed
18    clean coal facility in Illinois (the "initial clean coal
19    facility") that will have a nameplate capacity of at least
20    500 MW when commercial operation commences, that has a
21    final Clean Air Act permit on the effective date of this
22    amendatory Act of the 95th General Assembly, and that will
23    meet the definition of clean coal facility in Section 1-10
24    of this Act when commercial operation commences. The
25    sourcing agreements with this initial clean coal facility
26    shall be subject to both approval of the initial clean coal

 

 

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1    facility by the General Assembly and satisfaction of the
2    requirements of paragraph (4) of this subsection (d) and
3    shall be executed within 90 days after any such approval by
4    the General Assembly. The Agency and the Commission shall
5    have authority to inspect all books and records associated
6    with the initial clean coal facility during the term of
7    such a sourcing agreement. A utility's sourcing agreement
8    for electricity produced by the initial clean coal facility
9    shall include:
10            (A) a formula contractual price (the "contract
11        price") approved pursuant to paragraph (4) of this
12        subsection (d), which shall:
13                (i) be determined using a cost of service
14            methodology employing either a level or deferred
15            capital recovery component, based on a capital
16            structure consisting of 45% equity and 55% debt,
17            and a return on equity as may be approved by the
18            Federal Energy Regulatory Commission, which in any
19            case may not exceed the lower of 11.5% or the rate
20            of return approved by the General Assembly
21            pursuant to paragraph (4) of this subsection (d);
22            and
23                (ii) provide that all miscellaneous net
24            revenue, including but not limited to net revenue
25            from the sale of emission allowances, if any,
26            substitute natural gas, if any, grants or other

 

 

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1            support provided by the State of Illinois or the
2            United States Government, firm transmission
3            rights, if any, by-products produced by the
4            facility, energy or capacity derived from the
5            facility and not covered by a sourcing agreement
6            pursuant to paragraph (3) of this subsection (d) or
7            item (5) of subsection (d) of Section 16-115 of the
8            Public Utilities Act, whether generated from the
9            synthesis gas derived from coal, from SNG, or from
10            natural gas, shall be credited against the revenue
11            requirement for this initial clean coal facility;
12            (B) power purchase provisions, which shall:
13                (i) provide that the utility party to such
14            sourcing agreement shall pay the contract price
15            for electricity delivered under such sourcing
16            agreement;
17                (ii) require delivery of electricity to the
18            regional transmission organization market of the
19            utility that is party to such sourcing agreement;
20                (iii) require the utility party to such
21            sourcing agreement to buy from the initial clean
22            coal facility in each hour an amount of energy
23            equal to all clean coal energy made available from
24            the initial clean coal facility during such hour
25            times a fraction, the numerator of which is such
26            utility's retail market sales of electricity

 

 

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1            (expressed in kilowatthours sold) in the State
2            during the prior calendar month and the
3            denominator of which is the total retail market
4            sales of electricity (expressed in kilowatthours
5            sold) in the State by utilities during such prior
6            month and the sales of electricity (expressed in
7            kilowatthours sold) in the State by alternative
8            retail electric suppliers during such prior month
9            that are subject to the requirements of this
10            subsection (d) and paragraph (5) of subsection (d)
11            of Section 16-115 of the Public Utilities Act,
12            provided that the amount purchased by the utility
13            in any year will be limited by paragraph (2) of
14            this subsection (d); and
15                (iv) be considered pre-existing contracts in
16            such utility's procurement plans for eligible
17            retail customers;
18            (C) contract for differences provisions, which
19        shall:
20                (i) require the utility party to such sourcing
21            agreement to contract with the initial clean coal
22            facility in each hour with respect to an amount of
23            energy equal to all clean coal energy made
24            available from the initial clean coal facility
25            during such hour times a fraction, the numerator of
26            which is such utility's retail market sales of

 

 

HB1368- 20 -LRB097 09296 ASK 49431 b

1            electricity (expressed in kilowatthours sold) in
2            the utility's service territory in the State
3            during the prior calendar month and the
4            denominator of which is the total retail market
5            sales of electricity (expressed in kilowatthours
6            sold) in the State by utilities during such prior
7            month and the sales of electricity (expressed in
8            kilowatthours sold) in the State by alternative
9            retail electric suppliers during such prior month
10            that are subject to the requirements of this
11            subsection (d) and paragraph (5) of subsection (d)
12            of Section 16-115 of the Public Utilities Act,
13            provided that the amount paid by the utility in any
14            year will be limited by paragraph (2) of this
15            subsection (d);
16                (ii) provide that the utility's payment
17            obligation in respect of the quantity of
18            electricity determined pursuant to the preceding
19            clause (i) shall be limited to an amount equal to
20            (1) the difference between the contract price
21            determined pursuant to subparagraph (A) of
22            paragraph (3) of this subsection (d) and the
23            day-ahead price for electricity delivered to the
24            regional transmission organization market of the
25            utility that is party to such sourcing agreement
26            (or any successor delivery point at which such

 

 

HB1368- 21 -LRB097 09296 ASK 49431 b

1            utility's supply obligations are financially
2            settled on an hourly basis) (the "reference
3            price") on the day preceding the day on which the
4            electricity is delivered to the initial clean coal
5            facility busbar, multiplied by (2) the quantity of
6            electricity determined pursuant to the preceding
7            clause (i); and
8                (iii) not require the utility to take physical
9            delivery of the electricity produced by the
10            facility;
11            (D) general provisions, which shall:
12                (i) specify a term of no more than 30 years,
13            commencing on the commercial operation date of the
14            facility;
15                (ii) provide that utilities shall maintain
16            adequate records documenting purchases under the
17            sourcing agreements entered into to comply with
18            this subsection (d) and shall file an accounting
19            with the load forecast that must be filed with the
20            Agency by July 15 of each year, in accordance with
21            subsection (d) of Section 16-111.5 of the Public
22            Utilities Act.
23                (iii) provide that all costs associated with
24            the initial clean coal facility will be
25            periodically reported to the Federal Energy
26            Regulatory Commission and to purchasers in

 

 

HB1368- 22 -LRB097 09296 ASK 49431 b

1            accordance with applicable laws governing
2            cost-based wholesale power contracts;
3                (iv) permit the Illinois Power Agency to
4            assume ownership of the initial clean coal
5            facility, without monetary consideration and
6            otherwise on reasonable terms acceptable to the
7            Agency, if the Agency so requests no less than 3
8            years prior to the end of the stated contract term;
9                (v) require the owner of the initial clean coal
10            facility to provide documentation to the
11            Commission each year, starting in the facility's
12            first year of commercial operation, accurately
13            reporting the quantity of carbon emissions from
14            the facility that have been captured and
15            sequestered and report any quantities of carbon
16            released from the site or sites at which carbon
17            emissions were sequestered in prior years, based
18            on continuous monitoring of such sites. If, in any
19            year after the first year of commercial operation,
20            the owner of the facility fails to demonstrate that
21            the initial clean coal facility captured and
22            sequestered at least 50% of the total carbon
23            emissions that the facility would otherwise emit
24            or that sequestration of emissions from prior
25            years has failed, resulting in the release of
26            carbon dioxide into the atmosphere, the owner of

 

 

HB1368- 23 -LRB097 09296 ASK 49431 b

1            the facility must offset excess emissions. Any
2            such carbon offsets must be permanent, additional,
3            verifiable, real, located within the State of
4            Illinois, and legally and practicably enforceable.
5            The cost of such offsets for the facility that are
6            not recoverable shall not exceed $15 million in any
7            given year. No costs of any such purchases of
8            carbon offsets may be recovered from a utility or
9            its customers. All carbon offsets purchased for
10            this purpose and any carbon emission credits
11            associated with sequestration of carbon from the
12            facility must be permanently retired. The initial
13            clean coal facility shall not forfeit its
14            designation as a clean coal facility if the
15            facility fails to fully comply with the applicable
16            carbon sequestration requirements in any given
17            year, provided the requisite offsets are
18            purchased. However, the Attorney General, on
19            behalf of the People of the State of Illinois, may
20            specifically enforce the facility's sequestration
21            requirement and the other terms of this contract
22            provision. Compliance with the sequestration
23            requirements and offset purchase requirements
24            specified in paragraph (3) of this subsection (d)
25            shall be reviewed annually by an independent
26            expert retained by the owner of the initial clean

 

 

HB1368- 24 -LRB097 09296 ASK 49431 b

1            coal facility, with the advance written approval
2            of the Attorney General. The Commission may, in the
3            course of the review specified in item (vii),
4            reduce the allowable return on equity for the
5            facility if the facility wilfully fails to comply
6            with the carbon capture and sequestration
7            requirements set forth in this item (v);
8                (vi) include limits on, and accordingly
9            provide for modification of, the amount the
10            utility is required to source under the sourcing
11            agreement consistent with paragraph (2) of this
12            subsection (d);
13                (vii) require Commission review: (1) to
14            determine the justness, reasonableness, and
15            prudence of the inputs to the formula referenced in
16            subparagraphs (A)(i) through (A)(iii) of paragraph
17            (3) of this subsection (d), prior to an adjustment
18            in those inputs including, without limitation, the
19            capital structure and return on equity, fuel
20            costs, and other operations and maintenance costs
21            and (2) to approve the costs to be passed through
22            to customers under the sourcing agreement by which
23            the utility satisfies its statutory obligations.
24            Commission review shall occur no less than every 3
25            years, regardless of whether any adjustments have
26            been proposed, and shall be completed within 9

 

 

HB1368- 25 -LRB097 09296 ASK 49431 b

1            months;
2                (viii) limit the utility's obligation to such
3            amount as the utility is allowed to recover through
4            tariffs filed with the Commission, provided that
5            neither the clean coal facility nor the utility
6            waives any right to assert federal pre-emption or
7            any other argument in response to a purported
8            disallowance of recovery costs;
9                (ix) limit the utility's or alternative retail
10            electric supplier's obligation to incur any
11            liability until such time as the facility is in
12            commercial operation and generating power and
13            energy and such power and energy is being delivered
14            to the facility busbar;
15                (x) provide that the owner or owners of the
16            initial clean coal facility, which is the
17            counterparty to such sourcing agreement, shall
18            have the right from time to time to elect whether
19            the obligations of the utility party thereto shall
20            be governed by the power purchase provisions or the
21            contract for differences provisions;
22                (xi) append documentation showing that the
23            formula rate and contract, insofar as they relate
24            to the power purchase provisions, have been
25            approved by the Federal Energy Regulatory
26            Commission pursuant to Section 205 of the Federal

 

 

HB1368- 26 -LRB097 09296 ASK 49431 b

1            Power Act;
2                (xii) provide that any changes to the terms of
3            the contract, insofar as such changes relate to the
4            power purchase provisions, are subject to review
5            under the public interest standard applied by the
6            Federal Energy Regulatory Commission pursuant to
7            Sections 205 and 206 of the Federal Power Act; and
8                (xiii) conform with customary lender
9            requirements in power purchase agreements used as
10            the basis for financing non-utility generators.
11        (4) Effective date of sourcing agreements with the
12    initial clean coal facility. Any proposed sourcing
13    agreement with the initial clean coal facility shall not
14    become effective unless the following reports are prepared
15    and submitted and authorizations and approvals obtained:
16                (i) Facility cost report. The owner of the
17            initial clean coal facility shall submit to the
18            Commission, the Agency, and the General Assembly a
19            front-end engineering and design study, a facility
20            cost report, method of financing (including but
21            not limited to structure and associated costs),
22            and an operating and maintenance cost quote for the
23            facility (collectively "facility cost report"),
24            which shall be prepared in accordance with the
25            requirements of this paragraph (4) of subsection
26            (d) of this Section, and shall provide the

 

 

HB1368- 27 -LRB097 09296 ASK 49431 b

1            Commission and the Agency access to the work
2            papers, relied upon documents, and any other
3            backup documentation related to the facility cost
4            report.
5                (ii) Commission report. Within 6 months
6            following receipt of the facility cost report, the
7            Commission, in consultation with the Agency, shall
8            submit a report to the General Assembly setting
9            forth its analysis of the facility cost report.
10            Such report shall include, but not be limited to, a
11            comparison of the costs associated with
12            electricity generated by the initial clean coal
13            facility to the costs associated with electricity
14            generated by other types of generation facilities,
15            an analysis of the rate impacts on residential and
16            small business customers over the life of the
17            sourcing agreements, and an analysis of the
18            likelihood that the initial clean coal facility
19            will commence commercial operation by and be
20            delivering power to the facility's busbar by 2016.
21            To assist in the preparation of its report, the
22            Commission, in consultation with the Agency, may
23            hire one or more experts or consultants, the costs
24            of which shall be paid for by the owner of the
25            initial clean coal facility. The Commission and
26            Agency may begin the process of selecting such

 

 

HB1368- 28 -LRB097 09296 ASK 49431 b

1            experts or consultants prior to receipt of the
2            facility cost report.
3                (iii) General Assembly approval. The proposed
4            sourcing agreements shall not take effect unless,
5            based on the facility cost report and the
6            Commission's report, the General Assembly enacts
7            authorizing legislation approving (A) the
8            projected price, stated in cents per kilowatthour,
9            to be charged for electricity generated by the
10            initial clean coal facility, (B) the projected
11            impact on residential and small business
12            customers' bills over the life of the sourcing
13            agreements, and (C) the maximum allowable return
14            on equity for the project; and
15                (iv) Commission review. If the General
16            Assembly enacts authorizing legislation pursuant
17            to subparagraph (iii) approving a sourcing
18            agreement, the Commission shall, within 90 days of
19            such enactment, complete a review of such sourcing
20            agreement. During such time period, the Commission
21            shall implement any directive of the General
22            Assembly, resolve any disputes between the parties
23            to the sourcing agreement concerning the terms of
24            such agreement, approve the form of such
25            agreement, and issue an order finding that the
26            sourcing agreement is prudent and reasonable.

 

 

HB1368- 29 -LRB097 09296 ASK 49431 b

1    The facility cost report shall be prepared as follows:
2            (A) The facility cost report shall be prepared by
3        duly licensed engineering and construction firms
4        detailing the estimated capital costs payable to one or
5        more contractors or suppliers for the engineering,
6        procurement and construction of the components
7        comprising the initial clean coal facility and the
8        estimated costs of operation and maintenance of the
9        facility. The facility cost report shall include:
10                (i) an estimate of the capital cost of the core
11            plant based on one or more front end engineering
12            and design studies for the gasification island and
13            related facilities. The core plant shall include
14            all civil, structural, mechanical, electrical,
15            control, and safety systems.
16                (ii) an estimate of the capital cost of the
17            balance of the plant, including any capital costs
18            associated with sequestration of carbon dioxide
19            emissions and all interconnects and interfaces
20            required to operate the facility, such as
21            transmission of electricity, construction or
22            backfeed power supply, pipelines to transport
23            substitute natural gas or carbon dioxide, potable
24            water supply, natural gas supply, water supply,
25            water discharge, landfill, access roads, and coal
26            delivery.

 

 

HB1368- 30 -LRB097 09296 ASK 49431 b

1            The quoted construction costs shall be expressed
2        in nominal dollars as of the date that the quote is
3        prepared and shall include (1) capitalized financing
4        costs during construction, (2) taxes, insurance, and
5        other owner's costs, and (3) an assumed escalation in
6        materials and labor beyond the date as of which the
7        construction cost quote is expressed.
8            (B) The front end engineering and design study for
9        the gasification island and the cost study for the
10        balance of plant shall include sufficient design work
11        to permit quantification of major categories of
12        materials, commodities and labor hours, and receipt of
13        quotes from vendors of major equipment required to
14        construct and operate the clean coal facility.
15            (C) The facility cost report shall also include an
16        operating and maintenance cost quote that will provide
17        the estimated cost of delivered fuel, personnel,
18        maintenance contracts, chemicals, catalysts,
19        consumables, spares, and other fixed and variable
20        operations and maintenance costs.
21                (a) The delivered fuel cost estimate will be
22            provided by a recognized third party expert or
23            experts in the fuel and transportation industries.
24                (b) The balance of the operating and
25            maintenance cost quote, excluding delivered fuel
26            costs will be developed based on the inputs

 

 

HB1368- 31 -LRB097 09296 ASK 49431 b

1            provided by duly licensed engineering and
2            construction firms performing the construction
3            cost quote, potential vendors under long-term
4            service agreements and plant operating agreements,
5            or recognized third party plant operator or
6            operators.
7                The operating and maintenance cost quote
8            (including the cost of the front end engineering
9            and design study) shall be expressed in nominal
10            dollars as of the date that the quote is prepared
11            and shall include (1) taxes, insurance, and other
12            owner's costs, and (2) an assumed escalation in
13            materials and labor beyond the date as of which the
14            operating and maintenance cost quote is expressed.
15            (D) The facility cost report shall also include (i)
16        an analysis of the initial clean coal facility's
17        ability to deliver power and energy into the applicable
18        regional transmission organization markets and (ii) an
19        analysis of the expected capacity factor for the
20        initial clean coal facility.
21            (E) Amounts paid to third parties unrelated to the
22        owner or owners of the initial clean coal facility to
23        prepare the core plant construction cost quote,
24        including the front end engineering and design study,
25        and the operating and maintenance cost quote will be
26        reimbursed through Coal Development Bonds.

 

 

HB1368- 32 -LRB097 09296 ASK 49431 b

1        (5) Re-powering and retrofitting coal-fired power
2    plants previously owned by Illinois utilities to qualify as
3    clean coal facilities. During the 2009 procurement
4    planning process and thereafter, the Agency and the
5    Commission shall consider sourcing agreements covering
6    electricity generated by power plants that were previously
7    owned by Illinois utilities and that have been or will be
8    converted into clean coal facilities, as defined by Section
9    1-10 of this Act. Pursuant to such procurement planning
10    process, the owners of such facilities may propose to the
11    Agency sourcing agreements with utilities and alternative
12    retail electric suppliers required to comply with
13    subsection (d) of this Section and item (5) of subsection
14    (d) of Section 16-115 of the Public Utilities Act, covering
15    electricity generated by such facilities. In the case of
16    sourcing agreements that are power purchase agreements,
17    the contract price for electricity sales shall be
18    established on a cost of service basis. In the case of
19    sourcing agreements that are contracts for differences,
20    the contract price from which the reference price is
21    subtracted shall be established on a cost of service basis.
22    The Agency and the Commission may approve any such utility
23    sourcing agreements that do not exceed cost-based
24    benchmarks developed by the procurement administrator, in
25    consultation with the Commission staff, Agency staff and
26    the procurement monitor, subject to Commission review and

 

 

HB1368- 33 -LRB097 09296 ASK 49431 b

1    approval. The Commission shall have authority to inspect
2    all books and records associated with these clean coal
3    facilities during the term of any such contract.
4        (6) Costs incurred under this subsection (d) or
5    pursuant to a contract entered into under this subsection
6    (d) shall be deemed prudently incurred and reasonable in
7    amount and the electric utility shall be entitled to full
8    cost recovery pursuant to the tariffs filed with the
9    Commission.
10        (e) The draft procurement plans are subject to public
11    comment, as required by Section 16-111.5 of the Public
12    Utilities Act.
13        (f) The Agency shall submit the final procurement plan
14    to the Commission. The Agency shall revise a procurement
15    plan if the Commission determines that it does not meet the
16    standards set forth in Section 16-111.5 of the Public
17    Utilities Act.
18        (g) The Agency shall assess fees to each affected
19    utility to recover the costs incurred in preparation of the
20    annual procurement plan for the utility.
21        (h) The Agency shall assess fees to each bidder to
22    recover the costs incurred in connection with a competitive
23    procurement process.
24(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09;
2596-159, eff. 8-10-09; 96-1437, eff. 8-17-10.)
 

 

 

HB1368- 34 -LRB097 09296 ASK 49431 b

1    (20 ILCS 3855/1-125)
2    Sec. 1-125. Agency annual reports. By December 1, 2011 and
3each December 1 thereafter, the The Agency shall report
4annually to the Governor and the General Assembly on the
5operations and transactions of the Agency. The annual report
6shall include, but not be limited to, each of the following:
7        (1) The quantity, price, and term of all contracts for
8    electricity procured under the procurement plans for
9    electric utilities.
10        (2) The quantity, price, and rate impact of all
11    renewable resources purchased under the electricity
12    procurement plans for electric utilities.
13        (3) The quantity, price, and rate impact of all energy
14    efficiency and demand response measures purchased for
15    electric utilities.
16        (4) The amount of power and energy produced by each
17    Agency facility.
18        (5) The quantity of electricity supplied by each Agency
19    facility to municipal electric systems, governmental
20    aggregators, or rural electric cooperatives in Illinois.
21        (6) The revenues as allocated by the Agency to each
22    facility.
23        (7) The costs as allocated by the Agency to each
24    facility.
25        (8) The accumulated depreciation for each facility.
26        (9) The status of any projects under development.

 

 

HB1368- 35 -LRB097 09296 ASK 49431 b

1        (10) Basic financial and operating information
2    specifically detailed for the reporting year and
3    including, but not limited to, income and expense
4    statements, balance sheets, and changes in financial
5    position, all in accordance with generally accepted
6    accounting principles, debt structure, and a summary of
7    funds on a cash basis.
8        (11) The quantity, price, and rate impact of all
9    renewable resources purchased pursuant to long-term
10    contracts under the electricity procurement plans for
11    electric utilities.
12(Source: P.A. 95-481, eff. 8-28-07.)
 
13    Section 10. The Public Utilities Act is amended by changing
14Section 16-115D as follows:
 
15    (220 ILCS 5/16-115D)
16    Sec. 16-115D. Renewable portfolio standard for alternative
17retail electric suppliers and electric utilities operating
18outside their service territories.
19    (a) An alternative retail electric supplier shall be
20responsible for procuring cost-effective renewable energy
21resources as required under item (5) of subsection (d) of
22Section 16-115 of this Act as outlined herein:
23        (1) The definition of renewable energy resources
24    contained in Section 1-10 of the Illinois Power Agency Act

 

 

HB1368- 36 -LRB097 09296 ASK 49431 b

1    applies to all renewable energy resources required to be
2    procured by alternative retail electric suppliers.
3        (2) The quantity of renewable energy resources shall be
4    measured as a percentage of the actual amount of metered
5    electricity (megawatt-hours) delivered by the alternative
6    retail electric supplier to Illinois retail customers
7    during the 12-month period June 1 through May 31,
8    commencing June 1, 2009, and the comparable 12-month period
9    in each year thereafter except as provided in item (6) of
10    this subsection (a).
11        (3) The quantity of renewable energy resources shall be
12    in amounts at least equal to the annual percentages set
13    forth in item (1) of subsection (c) of Section 1-75 of the
14    Illinois Power Agency Act. At least 60% of the renewable
15    energy resources procured pursuant to items (1) through (3)
16    of subsection (b) of this Section shall come from wind
17    generation and, starting June 1, 2015, at least 6% of the
18    renewable energy resources procured pursuant to items (1)
19    through (3) of subsection (b) of this Section shall come
20    from solar photovoltaics. If, in any given year, an
21    alternative retail electric supplier does not purchase at
22    least these levels of renewable energy resources, then the
23    alternative retail electric supplier shall make
24    alternative compliance payments, as described in
25    subsection (d) of this Section.
26        (4) The quantity and source of renewable energy

 

 

HB1368- 37 -LRB097 09296 ASK 49431 b

1    resources shall be independently verified through the PJM
2    Environmental Information System Generation Attribute
3    Tracking System (PJM-GATS) or the Midwest Renewable Energy
4    Tracking System (M-RETS), which shall document the
5    location of generation, resource type, month, and year of
6    generation for all qualifying renewable energy resources
7    that an alternative retail electric supplier uses to comply
8    with this Section. No later than June 1, 2009, the Illinois
9    Power Agency shall provide PJM-GATS, M-RETS, and
10    alternative retail electric suppliers with all information
11    necessary to identify resources located in Illinois,
12    within states that adjoin Illinois or within portions of
13    the PJM and MISO footprint in the United States that
14    qualify under the definition of renewable energy resources
15    in Section 1-10 of the Illinois Power Agency Act for
16    compliance with this Section 16-115D. Alternative retail
17    electric suppliers shall not be subject to the requirements
18    in item (3) of subsection (c) of Section 1-75 of the
19    Illinois Power Agency Act.
20        (5) All renewable energy credits used to comply with
21    this Section shall be permanently retired.
22        (6) The required procurement of renewable energy
23    resources by an alternative retail electric supplier shall
24    apply to all metered electricity delivered to Illinois
25    retail customers by the alternative retail electric
26    supplier pursuant to contracts executed or extended after

 

 

HB1368- 38 -LRB097 09296 ASK 49431 b

1    March 15, 2009.
2    (b) An alternative retail electric supplier shall comply
3with the renewable energy portfolio standards by making an
4alternative compliance payment, as described in subsection (d)
5of this Section, to cover at least one-half of the alternative
6retail electric supplier's compliance obligation and any one or
7combination of the following means to cover the remainder of
8the alternative retail electric supplier's compliance
9obligation:
10        (1) Generating electricity using renewable energy
11    resources identified pursuant to item (4) of subsection (a)
12    of this Section.
13        (2) Purchasing electricity generated using renewable
14    energy resources identified pursuant to item (4) of
15    subsection (a) of this Section through an energy contract.
16        (3) Purchasing renewable energy credits from renewable
17    energy resources identified pursuant to item (4) of
18    subsection (a) of this Section.
19        (4) Making an alternative compliance payment as
20    described in subsection (d) of this Section.
21    (c) Use of renewable energy credits.
22        (1) Renewable energy credits that are not used by an
23    alternative retail electric supplier to comply with a
24    renewable portfolio standard in a compliance year may be
25    banked and carried forward up to 2 12-month compliance
26    periods after the compliance period in which the credit was

 

 

HB1368- 39 -LRB097 09296 ASK 49431 b

1    generated for the purpose of complying with a renewable
2    portfolio standard in those 2 subsequent compliance
3    periods. For the 2009-2010 and 2010-2011 compliance
4    periods, an alternative retail electric supplier may use
5    renewable credits generated after December 31, 2008 and
6    before June 1, 2009 to comply with this Section.
7        (2) An alternative retail electric supplier is
8    responsible for demonstrating that a renewable energy
9    credit used to comply with a renewable portfolio standard
10    is derived from a renewable energy resource and that the
11    alternative retail electric supplier has not used, traded,
12    sold, or otherwise transferred the credit.
13        (3) The same renewable energy credit may be used by an
14    alternative retail electric supplier to comply with a
15    federal renewable portfolio standard and a renewable
16    portfolio standard established under this Act. An
17    alternative retail electric supplier that uses a renewable
18    energy credit to comply with a renewable portfolio standard
19    imposed by any other state may not use the same credit to
20    comply with a renewable portfolio standard established
21    under this Act.
22    (d) Alternative compliance payments.
23        (1) The Commission shall establish and post on its
24    website, within 5 business days after entering an order
25    approving a procurement plan pursuant to Section 1-75 of
26    the Illinois Power Agency Act, maximum alternative

 

 

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1    compliance payment rates, expressed on a per kilowatt-hour
2    basis, that will be applicable in the first compliance
3    period following the plan approval. A separate maximum
4    alternative compliance payment rate shall be established
5    for the service territory of each electric utility that is
6    subject to subsection (c) of Section 1-75 of the Illinois
7    Power Agency Act. Each maximum alternative compliance
8    payment rate shall be equal to the maximum allowable annual
9    estimated average net increase due to the costs of the
10    utility's purchase of renewable energy resources included
11    in the amounts paid by eligible retail customers in
12    connection with electric service, as described in item (2)
13    of subsection (c) of Section 1-75 of the Illinois Power
14    Agency Act for the compliance period, and as established in
15    the approved procurement plan. Following each procurement
16    event through which renewable energy resources are
17    purchased for one or more of these utilities for the
18    compliance period, the Commission shall establish and post
19    on its website estimates of the alternative compliance
20    payment rates, expressed on a per kilowatt-hour basis, that
21    shall apply for that compliance period. Posting of the
22    estimates shall occur no later than 10 business days
23    following the procurement event, however, the Commission
24    shall not be required to establish and post such estimates
25    more often than once per calendar month. By July 1 of each
26    year, the Commission shall establish and post on its

 

 

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1    website the actual alternative compliance payment rates
2    for the preceding compliance year. For compliance years
3    beginning prior to June 1, 2014, each alternative
4    compliance payment rate shall be equal to the total amount
5    of dollars that the utility contracted to spend on
6    renewable resources, excepting the additional incremental
7    cost attributable to solar resources, for the compliance
8    period divided by the forecasted load of eligible retail
9    customers, at the customers' meters, as previously
10    established in the Commission-approved procurement plan
11    for that compliance year. For compliance years commencing
12    on or after June 1, 2014, each alternative compliance
13    payment rate shall be equal to the total amount of dollars
14    that the utility contracted to spend on all renewable
15    resources for the compliance period divided by the
16    forecasted load of eligible retail customers, at the
17    customers' meters, as previously established in the
18    Commission-approved procurement plan for that compliance
19    year. The actual alternative compliance payment rates may
20    not exceed the maximum alternative compliance payment
21    rates established for the compliance period. For purposes
22    of this subsection (d), the term "eligible retail
23    customers" has the same meaning as found in Section
24    16-111.5 of this Act.
25        (2) In any given compliance year, an alternative retail
26    electric supplier may elect to use alternative compliance

 

 

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1    payments to comply with all or a part of the applicable
2    renewable portfolio standard. In the event that an
3    alternative retail electric supplier elects to make
4    alternative compliance payments to comply with all or a
5    part of the applicable renewable portfolio standard, such
6    payments shall be made by September 1, 2010 for the period
7    of June 1, 2009 to May 1, 2010 and by September 1 of each
8    year thereafter for the subsequent compliance period, in
9    the manner and form as determined by the Commission. Any
10    election by an alternative retail electric supplier to use
11    alternative compliance payments is subject to review by the
12    Commission under subsection (e) of this Section.
13        (3) An alternative retail electric supplier's
14    alternative compliance payments shall be computed
15    separately for each electric utility's service territory
16    within which the alternative retail electric supplier
17    provided retail service during the compliance period,
18    provided that the electric utility was subject to
19    subsection (c) of Section 1-75 of the Illinois Power Agency
20    Act. For each service territory, the alternative retail
21    electric supplier's alternative compliance payment shall
22    be equal to (i) the actual alternative compliance payment
23    rate established in item (1) of this subsection (d),
24    multiplied by (ii) the actual amount of metered electricity
25    delivered by the alternative retail electric supplier to
26    retail customers within the service territory during the

 

 

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1    compliance period, multiplied by (iii) the result of one
2    minus the ratios of the quantity of renewable energy
3    resources used by the alternative retail electric supplier
4    to comply with the requirements of this Section within the
5    service territory to the product of the percentage of
6    renewable energy resources required under item (3) of
7    subsection (a) of this Section and the actual amount of
8    metered electricity delivered by the alternative retail
9    electric supplier to retail customers within the service
10    territory during the compliance period.
11        (4) All alternative compliance payments by alternative
12    retail electric suppliers shall be deposited in the
13    Illinois Power Agency Renewable Energy Resources Fund and
14    used to purchase renewable energy credits, in accordance
15    with Section 1-56 of the Illinois Power Agency Act.
16    Beginning April 1, 2012 and by April 1 of each year
17    thereafter, the Illinois Power Agency shall submit an
18    annual report to the General Assembly, the Commission, and
19    alternative retail electric suppliers that shall include,
20    but not be limited to:
21            (A) the total amount of alternative compliance
22        payments received in aggregate from alternative retail
23        electric suppliers by planning year for all previous
24        planning years in which the alternative compliance
25        payment was in effect;
26            (B) the amount of those payments utilized to

 

 

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1        purchased renewable energy credits itemized by the
2        date of each procurement in which the payments were
3        utilized; and
4            (C) the unused and remaining balance in the Agency
5        Renewable Energy Resources Fund attributable to those
6        payments.
7        (5) The Commission, in consultation with the Illinois
8    Power Agency, shall establish a process or proceeding to
9    consider the impact of a federal renewable portfolio
10    standard, if enacted, on the operation of the alternative
11    compliance mechanism, which shall include, but not be
12    limited to, developing, to the extent permitted by the
13    applicable federal statute, an appropriate methodology to
14    apportion renewable energy credits retired as a result of
15    alternative compliance payments made in accordance with
16    this Section. The Commission shall commence any such
17    process or proceeding within 35 days after enactment of a
18    federal renewable portfolio standard.
19    (e) Each alternative retail electric supplier shall, by
20September 1, 2010 and by September 1 of each year thereafter,
21prepare and submit to the Commission a report, in a format to
22be specified by the Commission on or before December 31, 2009,
23that provides information certifying compliance by the
24alternative retail electric supplier with this Section,
25including copies of all PJM-GATS and M-RETS reports, and
26documentation relating to banking, retiring renewable energy

 

 

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1credits, and any other information that the Commission
2determines necessary to ensure compliance with this Section. An
3alternative retail electric supplier may file commercially or
4financially sensitive information or trade secrets with the
5Commission as provided under the rules of the Commission. To be
6filed confidentially, the information shall be accompanied by
7an affidavit that sets forth both the reasons for the
8confidentiality and a public synopsis of the information.
9    (f) The Commission may initiate a contested case to review
10allegations that the alternative retail electric supplier has
11violated this Section, including an order issued or rule
12promulgated under this Section. In any such proceeding, the
13alternative retail electric supplier shall have the burden of
14proof. If the Commission finds, after notice and hearing, that
15an alternative retail electric supplier has violated this
16Section, then the Commission shall issue an order requiring the
17alternative retail electric supplier to:
18        (1) immediately comply with this Section; and
19        (2) if the violation involves a failure to procure the
20    requisite quantity of renewable energy resources or pay the
21    applicable alternative compliance payment by the annual
22    deadline, the Commission shall require the alternative
23    retail electric supplier to double the applicable
24    alternative compliance payment that would otherwise be
25    required to bring the alternative retail electric supplier
26    into compliance with this Section.

 

 

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1    If an alternative retail electric supplier fails to comply
2with the renewable energy resource portfolio requirement in
3this Section more than once in a 5-year period, then the
4Commission shall revoke the alternative electric supplier's
5certificate of service authority. The Commission shall not
6accept an application for a certificate of service authority
7from an alternative retail electric supplier that has lost
8certification under this subsection (f), or any corporate
9affiliate thereof, for at least one year after the date of
10revocation.
11    (g) All of the provisions of this Section apply to electric
12utilities operating outside their service area except under
13item (2) of subsection (a) of this Section the quantity of
14renewable energy resources shall be measured as a percentage of
15the actual amount of electricity (megawatt-hours) supplied in
16the State outside of the utility's service territory during the
1712-month period June 1 through May 31, commencing June 1, 2009,
18and the comparable 12-month period in each year thereafter
19except as provided in item (6) of subsection (a) of this
20Section.
21    If any such utility fails to procure the requisite quantity
22of renewable energy resources by the annual deadline, then the
23Commission shall require the utility to double the alternative
24compliance payment that would otherwise be required to bring
25the utility into compliance with this Section.
26    If any such utility fails to comply with the renewable

 

 

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1energy resource portfolio requirement in this Section more than
2once in a 5-year period, then the Commission shall order the
3utility to cease all sales outside of the utility's service
4territory for a period of at least one year.
5    (h) The provisions of this Section and the provisions of
6subsection (d) of Section 16-115 of this Act relating to
7procurement of renewable energy resources shall not apply to an
8alternative retail electric supplier that operates a combined
9heat and power system in this State or that has a corporate
10affiliate that operates such a combined heat and power system
11in this State that supplies electricity primarily to or for the
12benefit of: (i) facilities owned by the supplier, its
13subsidiary, or other corporate affiliate; (ii) facilities
14electrically integrated with the electrical system of
15facilities owned by the supplier, its subsidiary, or other
16corporate affiliate; or (iii) facilities that are adjacent to
17the site on which the combined heat and power system is
18located.
19(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
2096-1437, eff. 8-17-10.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.