Sen. Robert Peters
Filed: 1/17/2024
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1 | AMENDMENT TO SENATE BILL 1666 | ||||||
2 | AMENDMENT NO. ______. Amend Senate Bill 1666 by replacing | ||||||
3 | everything after the enacting clause with the following: | ||||||
4 | "Section 1. Short title. This Act may be referred to as the | ||||||
5 | Thermal Energy Network and Jobs Act. | ||||||
6 | Section 5. Legislative findings and intent. | ||||||
7 | (a) The General Assembly finds and declares that: | ||||||
8 | (1) This State has a strong interest in ensuring that | ||||||
9 | emissions of greenhouse gases from buildings are reduced | ||||||
10 | because buildings are one of this State's largest sources | ||||||
11 | of greenhouse gases due to the combustion of fossil fuels | ||||||
12 | for heating, domestic hot water production, cooking, and | ||||||
13 | other end uses. | ||||||
14 | (2) The decarbonization of buildings must be pursued | ||||||
15 | in a manner that is affordable and accessible, preserves | ||||||
16 | and creates living-wage jobs, and retains the knowledge |
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1 | and experience of the existing utility union workforce. | ||||||
2 | (3) Thermal energy networks have the potential to | ||||||
3 | decarbonize buildings at the community and utility scale | ||||||
4 | and help achieve the goals of Public Act 102-662 (also | ||||||
5 | known as the Climate and Equitable Jobs Act). | ||||||
6 | (4) Thermal energy networks consist of pipe loops | ||||||
7 | between multiple buildings and energy sources, which carry | ||||||
8 | water and can be connected to by building owners to | ||||||
9 | support heating and cooling and hot water services. | ||||||
10 | Building owners can connect to the loops to support water | ||||||
11 | heating and cooling and hot water services. | ||||||
12 | (5) Many utilities in this State have been seeking to | ||||||
13 | develop thermal energy networks but have encountered legal | ||||||
14 | and regulatory barriers. | ||||||
15 | (6) This State has a strong interest in ensuring an | ||||||
16 | adequate supply of reliable electrical power and, | ||||||
17 | therefore, needs to promote the development of alternative | ||||||
18 | power sources and take steps to assure reliable | ||||||
19 | deliverability. Thermal energy networks are highly | ||||||
20 | efficient because they use and exchange thermal energy | ||||||
21 | from many underground sources and buildings, including | ||||||
22 | recycled thermal energy, which minimizes impacts on the | ||||||
23 | electricity grid. | ||||||
24 | (7) Access to thermal energy networks has the | ||||||
25 | potential to reduce the upfront and operating costs of | ||||||
26 | building electrification for customers. |
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1 | (8) Thermal loop technology provides benefits to | ||||||
2 | participants and non-participants alike including societal | ||||||
3 | benefits to the environment and the market benefits | ||||||
4 | associated with the reduction of both the volume and peak | ||||||
5 | demand of electricity and natural gas. | ||||||
6 | (9) A utility's access to capital, the utility's | ||||||
7 | experience with networked infrastructure in public | ||||||
8 | rights-of-way, and the requirement that the utility serve | ||||||
9 | all customers positions the utility well to develop and | ||||||
10 | scale thermal energy networks that are accessible to all | ||||||
11 | customers and to coordinate the development of thermal | ||||||
12 | energy networks with any orderly rightsizing of the | ||||||
13 | utility gas system. | ||||||
14 | (10) This State also has an interest in the efficient | ||||||
15 | and reliable delivery of energy and the energy | ||||||
16 | infrastructure of the State, which interest is | ||||||
17 | acknowledged throughout the Public Utilities Act. Utility | ||||||
18 | corporations and other power suppliers share these | ||||||
19 | interests and, moreover, have a duty to protect | ||||||
20 | proprietary interests in the projects they fund. Such | ||||||
21 | investments of ratepayer resources can be protected by | ||||||
22 | establishing effective contractor qualification and | ||||||
23 | performance standards, including requirements for | ||||||
24 | prevailing wage rates, bona fide apprenticeship criteria, | ||||||
25 | and project labor agreements. | ||||||
26 | (11) The construction industry is highly skilled and |
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1 | labor intensive, and the installation of modern thermal | ||||||
2 | energy networks involves particularly complex work. | ||||||
3 | Therefore, effective qualification standards for craft | ||||||
4 | labor personnel employed on these projects are critically | ||||||
5 | needed to promote successful project delivery. | ||||||
6 | (12) Finally, these findings are especially vital now | ||||||
7 | because the construction industry is experiencing | ||||||
8 | widespread skill shortages across the country, which are | ||||||
9 | crippling existing capital projects and threatening | ||||||
10 | projects planned for the future. The construction of | ||||||
11 | thermal energy networks will utilize many of the same | ||||||
12 | skills that the current utility and building trades | ||||||
13 | workforces already possess. | ||||||
14 | (b) It is the intent of the General Assembly that passage | ||||||
15 | of this Act is for the following purposes: | ||||||
16 | (1) to remove the legal barriers to utility | ||||||
17 | development of thermal energy networks and require the | ||||||
18 | Illinois Commerce Commission, within 90 days after the | ||||||
19 | effective date of this amendatory Act of the 103rd General | ||||||
20 | Assembly, to begin to authorize and direct utilities to | ||||||
21 | immediately commence piloting thermal energy networks in | ||||||
22 | each and every utility territory; | ||||||
23 | (2) to direct and authorize the Illinois Commerce | ||||||
24 | Commission to develop a regulatory structure for utility | ||||||
25 | thermal energy networks that scales affordable and | ||||||
26 | accessible building electrification, protects customers, |
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1 | and balances the role of incumbent monopoly utilities with | ||||||
2 | other market and public actors; | ||||||
3 | (3) to promote the successful planning and delivery of | ||||||
4 | thermal energy networks and protect critical investments | ||||||
5 | in such projects by requiring the use of appropriate | ||||||
6 | quality craft labor policies that ensure the development | ||||||
7 | of and access to an adequate supply of well trained, | ||||||
8 | highly skilled craft persons needed to support timely, | ||||||
9 | reliable, high-quality projects; | ||||||
10 | (4) to promote strong economic development and good | ||||||
11 | jobs for local residents in the expanding decarbonized | ||||||
12 | sector by requiring application of progressive State labor | ||||||
13 | and employment policies that ensure public utility | ||||||
14 | investments and related State subsidies create | ||||||
15 | unparalleled skill training and employment opportunities | ||||||
16 | for residents in project areas through the use of local | ||||||
17 | prevailing wage standards and successful, bona fide | ||||||
18 | apprenticeship programs or project labor agreements that | ||||||
19 | incorporate prevailing wage and training standards and | ||||||
20 | provide additional benefits for project owners and | ||||||
21 | workers; and | ||||||
22 | (5) to promote the use of preapprenticeship programs | ||||||
23 | that will fortify and expand existing apprenticeship | ||||||
24 | programs through systematic outreach efforts to recruit | ||||||
25 | and assist persons from underrepresented and low income | ||||||
26 | communities by providing such persons with remedial |
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1 | education, social services, and unique opportunities for | ||||||
2 | direct access into high-quality apprenticeship programs | ||||||
3 | and gainful employment in the growing building | ||||||
4 | decarbonization workforce. | ||||||
5 | Section 10. The Public Utilities Act is amended by | ||||||
6 | changing Section 3-101 and by adding Sections 3-127, 3-128, | ||||||
7 | and 8-513 as follows: | ||||||
8 | (220 ILCS 5/3-101) (from Ch. 111 2/3, par. 3-101) | ||||||
9 | Sec. 3-101. Definitions. Unless otherwise specified, the | ||||||
10 | terms set forth in Sections 3-102 through 3-128 3-126 are used | ||||||
11 | in this Act as therein defined. | ||||||
12 | (Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; | ||||||
13 | 97-813, eff. 7-13-12.) | ||||||
14 | (220 ILCS 5/3-127 new) | ||||||
15 | Sec. 3-127. Thermal energy. "Thermal energy" means piped | ||||||
16 | noncombustible fluids used for transferring heat into and out | ||||||
17 | of buildings for the purpose of reducing any resultant onsite | ||||||
18 | greenhouse gas emissions of all types of heating and cooling | ||||||
19 | processes, including, but not limited to, comfort heating and | ||||||
20 | cooling, domestic hot water, and refrigeration. | ||||||
21 | (220 ILCS 5/3-128 new) | ||||||
22 | Sec. 3-128. Thermal energy network. "Thermal energy |
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1 | network" means all real estate, fixtures, and personal | ||||||
2 | property operated, owned, used, or to be used for, in | ||||||
3 | connection with, or to facilitate a utility-scale distribution | ||||||
4 | infrastructure project that supplies thermal energy. | ||||||
5 | (220 ILCS 5/8-513 new) | ||||||
6 | Sec. 8-513. Pilot thermal energy network development. | ||||||
7 | (a) The Illinois Commerce Commission shall initiate a | ||||||
8 | proceeding within 6 months after the effective date of this | ||||||
9 | amendatory Act of the 103rd General Assembly to support the | ||||||
10 | development of pilot thermal energy networks. The Commission | ||||||
11 | shall consider matters in the proceeding, including, but not | ||||||
12 | limited to, the appropriate ownership, market, and rate | ||||||
13 | structures for pilot thermal energy networks and whether the | ||||||
14 | provision of thermal energy services by thermal network energy | ||||||
15 | providers is in the public interest. | ||||||
16 | (b) Within 10 months after the effective date of this | ||||||
17 | amendatory Act of the 103rd General Assembly, every gas public | ||||||
18 | utility, electric public utility, or combination public | ||||||
19 | utility serving over 100,000 customers shall file with the | ||||||
20 | Commission a petition seeking Commission approval of at least | ||||||
21 | one and no more than 3 proposed pilot thermal energy network | ||||||
22 | projects. Designs for the projects should coordinate and | ||||||
23 | maximize the value of existing State energy efficiency and | ||||||
24 | weatherization programs and take advantage of federal funding | ||||||
25 | opportunities to the extent practicable. No later than 18 |
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1 | months after the effective date of this amendatory Act of the | ||||||
2 | 103rd General Assembly, the Commission shall enter an order | ||||||
3 | approving, approving with modification, or rejecting each | ||||||
4 | proposed pilot thermal energy network project and shall direct | ||||||
5 | the public utility to implement the pilot thermal energy | ||||||
6 | network projects as approved or approved as modified. In | ||||||
7 | considering whether to approve or approve as modified each | ||||||
8 | pilot thermal energy network project, the Commission shall | ||||||
9 | consider whether the pilot thermal energy network project is | ||||||
10 | in the public interest, whether the pilot thermal energy | ||||||
11 | network project will develop information useful for the | ||||||
12 | Commission in adopting rules governing thermal energy | ||||||
13 | networks, whether the pilot thermal energy network project | ||||||
14 | furthers climate justice and emissions reduction, whether the | ||||||
15 | pilot thermal energy network project advances financial and | ||||||
16 | technical approaches to equitable and affordable building | ||||||
17 | electrification, and whether the pilot thermal energy network | ||||||
18 | project creates benefits to customers and society at large, | ||||||
19 | including, but not limited to, public health benefits in areas | ||||||
20 | with disproportionate environmental or public health burdens, | ||||||
21 | job retention and creation, reliability, and increased | ||||||
22 | affordability of renewable thermal energy options. After the | ||||||
23 | filing of a petition, a utility may request the Commission to | ||||||
24 | grant additional time for pilot development approval, which | ||||||
25 | shall be approved for at least 6 months upon request or up to | ||||||
26 | 12 months upon a showing that additional time would benefit |
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1 | pilot development. | ||||||
2 | (c) If a utility proposes 3 pilot thermal energy network | ||||||
3 | projects, at least one project shall be proposed in | ||||||
4 | economically disadvantaged communities as defined in Section | ||||||
5 | 5-35 of the Energy Transition Act and at least one shall be | ||||||
6 | focused on existing electric heat customers. Each public | ||||||
7 | utility shall coordinate with other public utilities and | ||||||
8 | consultants with expertise on successful pilot projects to | ||||||
9 | ensure that the pilot projects are diverse and designed to | ||||||
10 | inform the Commission's decisions in the proceeding on the | ||||||
11 | various ownership, market, and rate structures for thermal | ||||||
12 | energy networks. The pilot project proposals shall be made | ||||||
13 | publicly available on the Commission's website. Utilities are | ||||||
14 | encouraged to develop plans that enable and facilitate access | ||||||
15 | to thermal loop technology benefits, including access by low | ||||||
16 | and moderate income households. As part of any pilot project | ||||||
17 | proposed pursuant to this Section, a public utility subject to | ||||||
18 | this Section may propose to include customer rebates and | ||||||
19 | incentives, and associated tariffs and proposed regulatory | ||||||
20 | treatment, in a manner similar to what is included in | ||||||
21 | Commission-approved electric energy efficiency plans pursuant | ||||||
22 | to Section 8-103B of this Act. | ||||||
23 | (d) Any gas public utility, electric public utility, or | ||||||
24 | combination public utility constructing or operating a | ||||||
25 | Commission-approved pilot thermal energy network project shall | ||||||
26 | report to the Commission, on a quarterly basis and until |
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1 | completion of the pilot thermal energy network project, as | ||||||
2 | determined by the Commission, the status of each pilot thermal | ||||||
3 | energy network project. The Commission shall post and make | ||||||
4 | publicly available the reports on its website. The report | ||||||
5 | shall include, but not be limited to: | ||||||
6 | (1) the stage of development of each pilot project; | ||||||
7 | (2) the barriers to development; | ||||||
8 | (3) the number of customers served; | ||||||
9 | (4) the costs of the pilot project; | ||||||
10 | (5) the number of jobs retained or created by the | ||||||
11 | pilot project; and | ||||||
12 | (6) other information the Commission deems to be in | ||||||
13 | the public interest or considers likely to prove useful or | ||||||
14 | relevant to the rulemaking described in subsection (h). | ||||||
15 | (e) Any gas public utility, electric public utility, or | ||||||
16 | combination public utility constructing or operating a | ||||||
17 | Commission-approved pilot thermal energy network project shall | ||||||
18 | demonstrate that it has entered into a labor peace agreement | ||||||
19 | with a bona fide labor organization that is actively engaged | ||||||
20 | in representing its employees. The labor peace agreement shall | ||||||
21 | apply to the employees necessary for the ongoing maintenance | ||||||
22 | and operation of the thermal energy network. The labor peace | ||||||
23 | agreement shall be an ongoing material condition of | ||||||
24 | authorization to maintain and operate the thermal energy | ||||||
25 | networks. | ||||||
26 | (f) Any contractor or subcontractor that performs work on |
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1 | a pilot thermal energy network under this Section shall be a | ||||||
2 | responsible bidder as described in Section 30-22 of the | ||||||
3 | Illinois Procurement Code and shall certify that not less than | ||||||
4 | prevailing wage, as determined under the Prevailing Wage Act, | ||||||
5 | was or will be paid to employees who are engaged in | ||||||
6 | construction activities associated with the pilot thermal | ||||||
7 | energy network project. The contractor or subcontractor shall | ||||||
8 | submit evidence to the Commission that it complied with the | ||||||
9 | requirements of this subsection. | ||||||
10 | (g) For any pending application for a thermal energy | ||||||
11 | network, the contractor or subcontractor shall submit evidence | ||||||
12 | that the contractor or subcontractor has entered into a fully | ||||||
13 | executed project labor agreement with the applicable local | ||||||
14 | building trades council. The Commission shall not approve any | ||||||
15 | pending applications until the contractor or subcontractor has | ||||||
16 | submitted the information required under this subsection. | ||||||
17 | (h) Within 4 years after the completion of the | ||||||
18 | construction of all thermal energy network projects under this | ||||||
19 | Section, the Commission shall adopt rules to, at a minimum: | ||||||
20 | (1) create fair market access rules for thermal energy | ||||||
21 | networks to accept thermal energy and that do not increase | ||||||
22 | greenhouse gas emissions or copollutants; | ||||||
23 | (2) to the extent it is in the public interest to do | ||||||
24 | so, exempt small-scale thermal energy networks from active | ||||||
25 | regulation by the Commission; | ||||||
26 | (3) promote the training and transition of utility |
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1 | workers impacted by this amendatory Act of the 103rd | ||||||
2 | General Assembly; and | ||||||
3 | (4) encourage third-party participation and | ||||||
4 | competition where it will maximize benefits to customers. | ||||||
5 | (i) A gas public utility, electric public utility, or | ||||||
6 | combination public utility required to develop any pilot | ||||||
7 | thermal energy network project under this Section shall be | ||||||
8 | permitted to recover all reasonable and prudently incurred | ||||||
9 | costs associated with the development, construction, and | ||||||
10 | operation of one or more pilot thermal energy network projects | ||||||
11 | through general rates set pursuant to Section 9-201 or through | ||||||
12 | rates set in a Multi-Year Rate Plan pursuant to Section | ||||||
13 | 16-108.18. The Commission shall have broad discretion in | ||||||
14 | approving proposed pilot projects that are consistent with the | ||||||
15 | public interest consistent with this Section and in approving | ||||||
16 | all tariffs and issue other regulatory approvals as necessary | ||||||
17 | to permit a pilot program that facilitates a full review of | ||||||
18 | technologies, and associated policies, with respect to thermal | ||||||
19 | network technology in this State. | ||||||
20 | Section 99. Effective date. This Act takes effect upon | ||||||
21 | becoming law.". |