103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3935

 

Introduced 4/29/2024, by Sen. Celina Villanueva

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Public Utilities Act. Provides that a gas utility may cease providing service if the Illinois Commerce Commission determines that adequate substitute service is available at a reasonable cost to support the existing end uses of the affected utility customers. Provides for cost-effective energy efficiency measures for natural gas utilities that supersede existing provisions concerning natural gas energy efficiency programs and take effect beginning January 1, 2025. Provides that gas main and gas service extension policies shall be based on the principle that the full incremental cost associated with new development and growth shall be borne by the customers that cause those incremental costs. Provides that, no later than 60 days after the effective date of the amendatory Act, the Commission shall initiate a docketed rulemaking reviewing each gas public utility tariff that provides for gas main and gas service extensions without additional charge to new customers in excess of the default extensions as specified in administrative rule. Adds the Clean Building Heating Law Article to the Act, with provisions concerning emissions standards for heating in buildings, as well as related and other provisions. Adds the 2050 Heat Decarbonization Standard Article to the Act, with provisions concerning options for compliance, measures for customer emission reduction, customer emission reductions, tradable clean heat credits, banking of emission reductions, equity in emission reductions, enforcement, the 2050 Heat Decarbonization Pathways Study, gas infrastructure planning, a study on gas utility financial incentive reform, and reporting requirements. Adds the Statewide Navigator Program Law Article to the Act, with provisions concerning creation of a statewide navigator program, as well as related and other provisions. Amends the Energy Transition Act to add electrification industries to clean energy jobs. Effective immediately.


LRB103 40383 LNS 72670 b

 

 

A BILL FOR

 

SB3935LRB103 40383 LNS 72670 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Energy Transition Act is amended by
5changing Section 5-25 as follows:
 
6    (20 ILCS 730/5-25)
7    (Section scheduled to be repealed on September 15, 2045)
8    Sec. 5-25. Clean Jobs Curriculum.
9    (a) As used in this Section, "clean energy jobs", subject
10to administrative rules, means jobs in the solar energy, wind
11energy, energy efficiency, energy storage, solar thermal,
12green hydrogen, geothermal, electric vehicle industries,
13electrification industries, other renewable energy industries,
14industries achieving emission reductions, and other related
15sectors including related industries that manufacture,
16develop, build, maintain, or provide ancillary services to
17renewable energy resources or energy efficiency products or
18services, including the manufacture and installation of
19healthier building materials that contain fewer hazardous
20chemicals. "Clean energy jobs" includes administrative, sales,
21other support functions within these industries and other
22related sector industries.
23    (b) The Department shall convene a comprehensive

 

 

SB3935- 2 -LRB103 40383 LNS 72670 b

1stakeholder process that includes representatives from the
2State Board of Education, the Illinois Community College
3Board, the Department of Labor, community-based organizations,
4workforce development providers, labor unions, building
5trades, educational institutions, residents of BIPOC and
6low-income communities, residents of environmental justice
7communities, clean energy businesses, nonprofit organizations,
8worker-owned cooperatives, other groups that provide clean
9energy jobs opportunities, groups that provide construction
10and building trades job opportunities, and other participants
11to identify the career pathways and training curriculum needed
12for participants to be skilled, work ready, and able to enter
13clean energy jobs. The curriculum shall:
14        (1) identify the core training curricular competency
15    areas needed to prepare workers to enter clean energy and
16    related sector jobs;
17        (2) identify a set of required core cross-training
18    competencies provided in each training area for clean
19    energy jobs with the goal of enabling any trainee to
20    receive a standard set of skills common to multiple
21    training areas that would provide a foundation for
22    pursuing a career composed of multiple clean energy job
23    types;
24        (3) include approaches to integrate broad occupational
25    training to provide career entry into the general
26    construction and building trades sector and any remedial

 

 

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1    education and work readiness support necessary to achieve
2    educational and professional eligibility thresholds; and
3        (4) identify on-the-job training formats, where
4    relevant, and identify suggested trainer certification
5    standards, where relevant.
6    (c) The Department shall publish a report that includes
7the findings, recommendations, and core curriculum identified
8by the stakeholder group and shall post a copy of the report on
9its public website. The Department shall convene the process
10described to update and modify the recommended curriculum
11every 3 years to ensure the curriculum contents are current to
12the evolving clean energy industries, practices, and
13technologies.
14    (d) Organizations that receive funding to provide training
15under the Clean Jobs Workforce Network Program, including, but
16not limited to, community-based and labor-based training
17providers, and educational institutions must use the core
18curriculum that is developed under this Section.
19(Source: P.A. 102-662, eff. 9-15-21.)
 
20    Section 10. The Public Utilities Act is amended by
21changing Sections 1-102, 8-101, 9-229, 9-241, and 16-111.10
22and by adding Sections 1-103, 3-127, 8-104B, 9-228.5, 9-235,
239-254, and 9-255, and Articles XXIII, XXIV, and XXV as
24follows:
 

 

 

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1    (220 ILCS 5/1-102)  (from Ch. 111 2/3, par. 1-102)
2    Sec. 1-102. Findings and Intent. The General Assembly
3finds that the health, welfare, and prosperity of all Illinois
4citizens require the provision of adequate, efficient,
5reliable, affordable, environmentally safe, and least-cost
6public utility services at prices which accurately reflect the
7long-term cost of such services and which are equitable to all
8citizens. It is therefore declared to be the policy of the
9State that public utilities shall continue to be regulated
10effectively and comprehensively. It is further declared that
11the goals and objectives of such regulation shall be to
12ensure:
13        (a) Efficiency: the provision of reliable and
14    affordable energy services that meet the State's climate
15    and emissions reduction targets at the lowest societal
16    least possible cost to the citizens of the State; in such
17    manner that:
18            (i) physical, human, and financial resources are
19        allocated efficiently and equitably;
20            (ii) all supply and demand options are considered
21        and evaluated using comparable terms and methods in
22        order to determine how utilities shall meet State
23        emissions reduction targets and their customers'
24        demands for public utility services at the lowest
25        societal least cost;
26            (iii) utilities are allowed a sufficient return on

 

 

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1        investment so as to enable them to attract capital in
2        financial markets at competitive rates;
3            (iv) tariff rates for the sale of various public
4        utility services are authorized such that they
5        accurately reflect the cost of delivering those
6        services and allow utilities to recover the total
7        costs prudently and reasonably incurred;
8            (v) variation in costs by customer class and time
9        of use is taken into consideration in authorizing
10        rates for each class.
11        (b) Environmental Quality: the protection of the
12    environment, people, and communities from the adverse
13    external costs of public utility services, including
14    environmental costs, so that:
15            (i) environmental costs of proposed actions having
16        a significant impact on the environment and the
17        environmental impact of the alternatives are
18        identified, documented, monetized, included in
19        assessments of cost, and considered in all aspects of
20        the regulatory process;
21            (ii) the prudently and reasonably incurred costs
22        of environmental controls are recovered.
23        (c) Reliability: the ability of utilities to provide
24    consumers with public utility services under varying
25    demand conditions in such manner that suppliers of public
26    utility services are able to provide service at varying

 

 

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1    levels of economic reliability giving appropriate
2    consideration to the costs likely to be incurred as a
3    result of service interruptions, and to the costs of
4    increasing or maintaining current levels of reliability
5    consistent with commitments to consumers.
6        (d) Equity: the fair treatment of consumers, including
7    equity investment eligible persons and equity investment
8    eligible communities, as defined in the Energy Transition
9    Act, and investors in order that
10            (i) the public health, safety, and welfare shall
11        be protected;
12            (ii) the application of rates is based on public
13        understandability and acceptance of the reasonableness
14        of the rate structure and level;
15            (iii) the cost of supplying public utility
16        services is allocated to those who cause the costs to
17        be incurred;
18            (iv) if factors other than cost of service are
19        considered in regulatory decisions, the rationale for
20        these actions is set forth;
21            (v) regulation allows for orderly transition
22        periods to accommodate changes in public utility
23        service markets;
24            (vi) regulation does not result in undue or
25        sustained adverse impact on utility earnings;
26            (vii) the impacts of regulatory actions on all

 

 

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1        sectors of the State are carefully weighed;
2            (viii) the rates for utility services are
3        affordable and, therefore, ensure and preserve the
4        availability and accessibility of such services to all
5        customers, and customers are not energy burdened or
6        severely energy burdened citizens.
7        As used in this subsection (d):
8            (I) "Energy burdened" means, with respect to a
9        customer's household, that the household pays 6% or
10        more of its income toward electricity and gas bills.
11            (II) "Severely energy burdened" means, with
12        respect to a customer's household, that the household
13        pays 10% or more of its income toward electricity and
14        gas bills.
15        (e) Affordability: the ability of utilities to ensure
16    uninterrupted access to essential utility service; to
17    minimize and reduce over time the number of households who
18    are energy burdened and severely energy burdened, as
19    defined in this Act, ideally to zero; and to minimize
20    disconnections to residential customers in a manner which
21    ensures that:
22            (i) all low-income customers, defined as those
23        whose income is less than or equal to 80% of the area
24        median income, as defined by the United States
25        Department of Housing and Urban Development, have
26        access to a discounted utility rate;

 

 

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1            (ii) low-income customers 65 years of age or older
2        are not disconnected from essential utility service
3        due to inability to afford the monthly bill;
4            (iii) low-income customers with children under the
5        age of 6 are not disconnected from essential utility
6        service due to inability to afford the monthly bill;
7            (iv) persons with medical conditions are not
8        disconnected from essential utility service if a
9        medical or qualified professional as described in
10        subsection (b) of Section 8-202.7 certifies that the
11        condition will be exacerbated by disconnection from
12        essential utility service;
13            (v) disconnection of essential utility service is
14        not accelerated based on a utility's payment risk
15        assessment of a customer; and
16            (vi) a utility assesses whether a customer may be
17        eligible for energy assistance programs under the
18        Energy Assistance Act, provides the customer with
19        specific information on where and how to obtain energy
20        assistance, and ceases disconnection activity for 60
21        days to allow the customer to apply for and establish
22        eligibility for the energy assistance.
23    It is further declared to be the policy of the State that
24this Act shall not apply in relation to motor carriers and rail
25carriers as defined in the Illinois Commercial Transportation
26Law, or to the Commission in the regulation of such carriers.

 

 

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1    Nothing in this Act shall be construed to limit, restrict,
2or mitigate in any way the power and authority of the State's
3Attorneys or the Attorney General under the Consumer Fraud and
4Deceptive Business Practices Act.
5(Source: P.A. 92-22, eff. 6-30-01.)
 
6    (220 ILCS 5/1-103 new)
7    Sec. 1-103. Commission methodologies and metrics. The
8Commission shall oversee the objectives identified in Section
91-102 by establishing and implementing methodologies for
10tracking each of the following metrics:
11        (1) Environmental costs: The Commission shall
12    establish a social cost of greenhouse gases, measured in
13    dollars per ton of carbon dioxide equivalent, that shall
14    serve as a monetary estimate of the value of not emitting a
15    ton of greenhouse gas emissions. The Commission shall
16    consider prior or existing estimates of the social cost of
17    carbon issued or adopted by the federal government,
18    appropriate international bodies, or other appropriate and
19    reputable scientific organizations. The social cost of
20    greenhouse gases shall:
21            (A) estimate the emissions for all relevant
22        greenhouse gases, including carbon, methane, nitrous
23        oxide, hydrofluorocarbons and hydrofluoroolefins,
24        perfluorocarbons, sulfur hexafluoride, and nitrogen
25        trifluoride;

 

 

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1            (B) consider the fullest geographic and temporal
2        scope of damages;
3            (C) for the purposes of this Act, the cost of
4        greenhouse gas emissions is no less than the cost per
5        metric ton of carbon dioxide equivalent emissions,
6        using the 2.5% discount rate, listed in Table ES-1 of
7        "Technical Support Document: Social Cost of Carbon,
8        Methane, and Nitrous Oxide Interim Estimates under
9        Executive Order 13990", a report prepared in support
10        of federal Executive Order 13990 and dated February
11        2021.
12        The Commission must annually adjust the costs
13    established in this Section to reflect the effect of
14    inflation and may, at its discretion, set the price at a
15    higher level than described above, but no lower.
16        (2) Impacts to public health: The Commission shall
17    develop a methodology for measuring and monetizing in cost
18    assessments the public health impacts of pollutants,
19    including impacts of both indoor and outdoor air quality,
20    including carbon monoxide and carbon dioxide, nitrogen
21    oxides, including nitrogen dioxide, particulate matter,
22    formaldehyde, sulfur dioxide, ozone, and lead. The
23    Commission shall integrate its methodology into
24    assessments of utility system planning and supply and
25    demand-side resource selection.
26    It is further declared to be the policy of the State that

 

 

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1this Section does not apply to motor carriers and rail
2carriers as defined in the Illinois Commercial Transportation
3Law or to the Commission in the regulation of such carriers.
4    Nothing in this Section shall be construed to limit,
5restrict, or mitigate in any way the power and authority of the
6State's Attorneys or the Attorney General under the Consumer
7Fraud and Deceptive Business Practices Act.
 
8    (220 ILCS 5/3-127 new)
9    Sec. 3-127. Fixed charge. "Fixed charge" means a charge
10that is assessed by a public utility as part of its rates, is
11equal across all customers or customers of a certain class,
12and is not directly proportional to a customer's usage.
 
13    (220 ILCS 5/8-101)  (from Ch. 111 2/3, par. 8-101)
14    Sec. 8-101. Duties of public utilities; nondiscrimination.
15A public utility shall furnish, provide, and maintain such
16service instrumentalities, equipment, and facilities as shall
17promote the safety, health, comfort, and convenience of its
18patrons, employees, and public and as shall be in all respects
19adequate, efficient, just, and reasonable.
20    All rules and regulations made by a public utility
21affecting or pertaining to its charges or service to the
22public shall be just and reasonable.
23    An electric A public utility shall, and a gas utility may,
24upon reasonable notice, furnish to all persons who may apply

 

 

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1therefor and be reasonably entitled thereto, suitable
2facilities and service, without discrimination and without
3delay. Notwithstanding any other provision of law, a gas
4utility may cease providing service if the Commission
5determines that adequate substitute service is available at a
6reasonable cost to support the existing end uses of the
7affected utility customers. Any applicant for gas service
8shall receive clear, timely information from the gas utility,
9written in plain language, and approved by the Commission
10after stakeholder input on incentives and opportunities for
11installing, as alternatives to gas, energy-efficient electric
12technologies and incentives and opportunities for other energy
13efficiency measures, weatherization, demand management, and
14distributed energy resource programs. The information provided
15must include, among other things, information detailing
16electrification incentives in the Inflation Reduction Act and
17describing how the applicant can elect to receive the upfront
18discounts or tax incentives applicable to the applicant's
19electric purchases.
20    Nothing in this Section shall be construed to prevent a
21public utility from accepting payment electronically or by the
22use of a customer-preferred financially accredited credit or
23debit methodology.
24(Source: P.A. 92-22, eff. 6-30-01.)
 
25    (220 ILCS 5/8-104B new)

 

 

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1    Sec. 8-104B. Gas energy efficiency.
2    (a) As used in this Section:
3    "Benefit-cost ratio" means the ratio of the net present
4value of the total benefits of the measures to the net present
5value of the total costs as calculated over the lifetime of the
6measures.
7    "Cost-effective measure" means a measure that satisfies
8the total resource cost test.
9    "Energy efficiency measure" means a measure that reduces
10(i) the total Btus of electricity and natural gas and other
11utility-delivered gaseous fuels needed to meet an end use or
12end uses and (ii) the amount of natural gas and other
13utility-delivered gaseous fuels consumed on site, at the home
14or business facility, to meet an end use or end uses.
15    "Total resource cost test" means a standard that is met
16if, for an investment in an energy efficiency measure, the
17benefit-cost ratio is greater than one. The total resource
18cost test quantifies the net savings obtained through the
19substitution of demand-side measures for supply resources by
20comparing (i) the sum of avoided natural gas utility costs,
21representing the benefits that accrue to the natural gas
22system and the participant in the delivery of those energy
23efficiency measures and including avoided costs associated
24with the use of electricity or other fuels, avoided costs
25associated with reduced water consumption, and avoided
26operation and maintenance costs, as well as other quantifiable

 

 

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1societal benefits and (ii) the sum of all incremental costs of
2end-use measures, including both utility and participant
3contribution costs to administer, deliver, and evaluate each
4demand-side measure. In calculating avoided costs, reasonable
5estimates shall be included for financial costs likely to be
6imposed by future regulation of emissions of greenhouse gases.
7In discounting future societal costs and benefits for the
8purpose of calculating net present values, a societal discount
9rate based on actual, long-term U.S. Treasury bond yields
10shall be used. The income-qualified measures described in
11paragraphs (5) and (6) of subsection (d) shall not be required
12to meet the total resource cost test.
13    (b) It is the policy of the State for gas utilities to be
14required to use cost-effective energy efficiency measures to
15reduce delivery load. Requiring investment in cost-effective
16energy efficiency measures will reduce direct and indirect
17costs to consumers by decreasing environmental impacts,
18reducing the amount of natural gas and other utility-delivered
19gaseous fuels that need to be purchased, and avoiding or
20delaying the need for new transmission, distribution, storage,
21and other related infrastructure. Moreover, the public
22interest is served by allowing gas utilities to recover costs
23for reasonably and prudently incurred expenditures for energy
24efficiency measures.
25    (c) This Section applies to all gas distribution utilities
26in the State and supersedes Section 8-104 beginning January 1,

 

 

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12024.
2    (d) Natural gas utilities shall implement cost-effective
3energy efficiency measures to achieve all of the following
4requirements:
5        (1) Total incremental annual savings shall be equal to
6    at least 0.6% of annual sales to distribution customers in
7    2025, 0.8% of such sales in 2026, and at least 1% of such
8    sales in 2027 and each subsequent year. For the purpose of
9    calculating savings as a percent of sales to distribution
10    customers for a given program year, the denominator of
11    sales to distribution customers shall be annual average
12    sales over the second, third, and fourth full calendar
13    years prior to the beginning of the program year.
14        (2) The savings achieved must have an average life of
15    at least 12 years.
16        (3) Savings may not be applied toward achievement of
17    utility savings goals if the savings arise from the
18    installation of efficient new gas furnaces, gas boilers,
19    gas water heaters, or other gas-consuming equipment in a
20    residential building, such as a single-family,
21    individually metered multifamily building or a
22    master-metered multifamily building.
23        (4) At least 50% of the entire budget for efficiency
24    programs shall be spent on energy efficiency measures that
25    reduce space heating needs through improvements to the
26    efficiency of building envelopes, including, but not

 

 

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1    limited to, insulation measures and efficient windows and
2    energy efficiency measures that reduce air leakage through
3    improvements to systems for distributing heat, including,
4    but not limited to, duct leakage reduction, duct
5    insulation, or pipe insulation in buildings or through
6    improved heating systems controls, including, but not
7    limited to, advanced thermostats and demand control
8    ventilation. Spending on efficient furnaces, efficient
9    boilers, or other efficient heating systems is permitted
10    within business efficiency programs but does not count
11    toward this minimum requirement for spending on building
12    envelope, heating distribution, and control efficiencies.
13    Spending on income-qualified building envelope measures,
14    heating distribution system measures, and heating controls
15    does count toward this requirement. The portion of
16    portfolio spending on program marketing, training of
17    installers, audits of buildings, inspections of work
18    performed, and other administrative and technical expenses
19    that are clearly tied to promotion or installation of
20    building envelope or heating distribution system measures
21    shall count toward this requirement. If this minimum
22    requirement is not met, any performance incentive earned
23    under subsection (h) should be reduced by the percentage
24    point level of shortfall in meeting this requirement.
25        (5) The portion of the entire budget for efficiency
26    programs that is spent on efficiency measures for

 

 

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1    income-qualified households shall be the greater of 20% or
2    5 percentage points more than the proportion of total
3    residential and business customer gas sales going to
4    income-qualified households. For purposes of this Section,
5    households at or below 80% of area median income are
6    income-qualified. At least 80% of spending on measures in
7    programs targeted at income-qualified households shall be
8    delivered through whole building weatherization programs
9    and spent on measures that reduce space heating needs
10    through improvements to the building envelope, heating
11    distribution systems, or heating controls. The utilities
12    shall invest in health and safety measures appropriate and
13    necessary for comprehensively weatherizing the homes and
14    multifamily buildings of income-qualified households, with
15    up to 15% of income-qualified program spending made
16    available for such purposes. The ratio of spending on
17    efficiency programs targeted at multifamily buildings of
18    income-qualified households to spending on energy
19    efficiency programs targeted at single-family buildings of
20    income-qualified households shall be designed to achieve
21    levels of savings from each building type that are
22    approximately proportional to the magnitude of
23    cost-effective lifetime savings potential in each building
24    type. The gas utilities shall participate in a Low-Income
25    Energy Efficiency Accountability Committee as established
26    in Section 8-103B.

 

 

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1        Gas utilities must conduct customer outreach and
2    education efforts in equity investment eligible
3    communities in order to provide notice of and explanations
4    concerning the following types of programs:
5            (A) energy efficiency programs, the Illinois Solar
6        for All Program, and whole home retrofit programs that
7        reduce natural gas usage;
8            (B) income-qualified financial assistance
9        programs, including rebate programs from the federal
10        government; and
11            (C) general education programs designed to explain
12        utility bills and the decisions customers can make to
13        lower energy usage.
14        These outreach and education efforts must be brought
15    to communities in a diversity of ways, must be created
16    with input from members of the communities, and must be
17    provided through, among other things:
18            (i) information on customers' bills in the main
19        languages spoken in the communities;
20            (ii) a quarterly posting in local newspapers that
21        cover the service area;
22            (iii) a dedicated section on the investor-owned
23        utility's website; and
24            (iv) in-person and virtual educational sessions
25        that take place in the income-qualified and Justice40
26        community, provide food and child care for

 

 

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1        participating customers, and are codesigned with
2        interested community-based organization
3        representatives.
4        (6) Implementation of energy efficiency measures and
5    programs targeted at income-qualified households shall be
6    contracted, when practicable, to independent third parties
7    that have demonstrated the capability of serving those
8    households, with a preference for not-for-profit entities
9    and government agencies that have existing relationships
10    with, experience serving, or working directly within and
11    alongside income-qualified communities in the State. Each
12    gas utility shall develop and implement reporting
13    procedures that address and assist in determining the
14    amount of energy savings that can be applied to the
15    income-qualified procurement and expenditure requirements
16    set forth in this paragraph.
17        (7) A minimum of 10% of the utility's entire portfolio
18    funding level for a given year shall be used to procure
19    cost-effective energy efficiency measures from units of
20    local government, municipal corporations, school
21    districts, public housing, community college districts,
22    and nonprofit-owned buildings as long as a minimum
23    percentage of available funds shall be used to procure
24    energy efficiency from public housing, which percentage
25    shall be, at a minimum, equal to public housing's share of
26    public building energy consumption. Spending on public

 

 

SB3935- 20 -LRB103 40383 LNS 72670 b

1    housing may count toward minimum spending requirements on
2    efficiency improvements for income-qualified households.
3    (e) Notwithstanding any other provision of law, a utility
4providing approved energy efficiency measures in the State may
5recover all reasonable and prudently incurred costs of those
6measures from its retail customers. However, nothing in this
7subsection permits the double recovery of such costs from
8customers.
9    (f) Beginning in 2024, each gas utility shall file an
10energy efficiency plan with the Commission to meet the energy
11efficiency standards in subsection (d) for the next applicable
12multiyear period beginning January 1 of the year following the
13filing, according to the schedule set forth in paragraphs (1)
14through (4). If a utility does not file such a plan on or
15before the applicable filing deadline for the plan, the
16utility shall be liable for a civil penalty of $100,000 per day
17until the plan is filed.
18        (1) No later than 120 days after the effective date of
19    this amendatory Act of the 103rd General Assembly, each
20    gas utility shall file an energy efficiency plan to
21    supersede its previously filed energy efficiency plan for
22    calendar year 2025 that is designed to achieve through
23    implementation of energy efficiency measures the
24    incremental annual savings goals, minimum average savings
25    life, and other requirements specified in paragraphs (1)
26    through (7) of subsection (d). An energy efficiency plan

 

 

SB3935- 21 -LRB103 40383 LNS 72670 b

1    submitted by a gas utility under this paragraph supersedes
2    any energy efficiency plan previously filed by the gas
3    utility for calendar year 2025.
4        (2) No later than March 1, 2025, each gas utility
5    shall file a 4-year energy efficiency plan that takes
6    effect on January 1, 2026 and is designed to achieve,
7    through implementation of emergency efficiency measures,
8    the incremental annual savings goals, minimum average
9    savings life, and other requirements specified in
10    paragraphs (1) through (7) of subsection (d). However, the
11    incremental annual savings goals may be reduced if the
12    plan's analysis and forecasts of the utility's ability to
13    acquire energy savings demonstrate by clear and convincing
14    evidence and through independent analysis that achievement
15    of such goals is not cost-effective. In no event may
16    incremental annual savings goals for any year be reduced
17    to levels below (i) those actually achieved in calendar
18    year 2024, (ii) those forecast to be achieved in calendar
19    year 2025, or (iii) 0.75% of sales. The Commission shall
20    review any proposed goal reduction as part of its review
21    and approval of the utility's proposed plan.
22        (3) Beginning in 2029 and every 4 years thereafter,
23    each gas utility shall file by no later than March 1 of the
24    applicable year, a 4-year energy efficiency plan that
25    takes effect on the following January 1 and is designed to
26    achieve, through implementation of energy efficiency

 

 

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1    measures, the incremental annual savings goals, minimum
2    average savings life, and other requirements specified in
3    paragraphs (1) through (7) of subsection (d). However, the
4    incremental annual savings goals may be reduced if the
5    plan's analysis and forecasts of the utility's ability to
6    acquire energy savings demonstrate by clear and convincing
7    evidence and through independent analysis that achievement
8    of such goals is not cost-effective. In no event may
9    incremental annual savings goals for any year be reduced
10    to levels below (i) those actually achieved in the
11    calendar year before the plan filing, (ii) those forecast
12    to be achieved in the calendar year in which the plan
13    filing is made, or (iii) 0.75% of sales. The Commission
14    shall review any proposed goal reduction as part of its
15    review and approval of the utility's proposed plan.
16        (4) Each utility's plan shall set forth the utility's
17    proposals to meet the energy efficiency standards
18    identified in subsection (d). The Commission shall seek
19    public comment on each plan that takes effect on January
20    1, 2024 and before January 1, 2026 and shall issue an order
21    approving or disapproving the plan no later than November
22    30, 2023, or 225 days after the effective date of this
23    amendatory Act of the 103rd General Assembly, whichever is
24    later. The Commission shall seek public comment on each
25    plan that takes effect on January 1, 2026 and shall issue
26    an order approving or disapproving the plan within 6

 

 

SB3935- 23 -LRB103 40383 LNS 72670 b

1    months after its submission. If the Commission disapproves
2    a plan, the Commission shall, within 30 days, describe in
3    detail the reasons for the disapproval and describe a path
4    by which the utility may file a revised draft of the plan
5    to address the Commission's concerns satisfactorily. If
6    the utility does not refile with the Commission within 60
7    days, the utility shall be subject to civil penalties at a
8    rate of $100,000 per day until the plan is refiled. This
9    process shall continue, and penalties shall accrue, until
10    the utility has successfully filed a portfolio of energy
11    efficiency measures. Penalties shall be deposited into the
12    Energy Efficiency Trust Fund.
13    (g) In submitting proposed plans and funding levels under
14subsection (f) to meet the savings goals identified in
15subsection (d), the utility shall:
16        (1) demonstrate that its proposed energy efficiency
17    measures will achieve the requirements that are identified
18    in subsection (d);
19        (2) demonstrate consideration of program options for
20    supporting efforts to improve compliance with new building
21    codes, appliance standards, and municipal regulations as
22    potentially cost-effective means of acquiring energy
23    savings to count toward energy savings goals;
24        (3) demonstrate that its overall portfolio of measures
25    and programs, not including income-qualified programs
26    described in subsection (d), is cost-effective using the

 

 

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1    total resource cost test and represents a diverse cross
2    section of opportunities for customers of all rate classes
3    to participate in programs. Individual measures need not
4    be cost-effective;
5        (4) demonstrate that the utility's plan integrates the
6    delivery of energy efficiency programs with electric
7    efficiency programs, programs promoting demand response,
8    and other efforts to address bill payment issues,
9    including, but not limited to, the Low Income Home Energy
10    Assistance Program and the Percentage of Income Payment
11    Plans;
12        (5) include a proposed or revised cost-recovery
13    mechanism to fund the proposed energy efficiency measures
14    and ensure the recovery of the prudently and reasonably
15    incurred costs of Commission-approved programs;
16        (6) provide, using not more than 3% of portfolio
17    resources in any given year, an annual independent
18    evaluation of the performance and cost-effectiveness of
19    the utility's portfolio of measures and programs;
20        (7) demonstrate how it will ensure that program
21    implementation contractors and energy efficiency
22    installation vendors will promote workforce equity and
23    quality jobs. Utilities shall collect, and make publicly
24    available at least quarterly, data necessary to
25    demonstrate how efforts are advancing workforce equity.
26    Utilities shall work with relevant vendors providing

 

 

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1    education, training, and other resources needed to ensure
2    compliance and, where necessary, adjusting or terminating
3    work with vendors that cannot assist with compliance; and
4        (8) include any plans for research, development, or
5    pilot deployment of new measures or program approaches.
6    For utilities with unmodified savings goals, no more than
7    4% of energy efficiency portfolio spending may be
8    allocated for such purposes. For utilities with modified
9    savings goals, no more than 2% of energy efficiency
10    portfolio spending may be allocated for such purposes.
11    Utilities shall work with interested stakeholders to
12    formulate a plan for how any proposed funds should be
13    spent, incorporate statewide approaches for these
14    allocations whenever such approaches would be more
15    effective or cost-efficient, and demonstrate such
16    collaboration in the utilities' plans.
17    (h) Each gas utility shall be eligible to earn a
18shareholder incentive for effective implementation of its
19efficiency programs. The incentive shall be tied to each
20utility's annual energy efficiency spending and its savings.
21There shall be no incentive if the independent evaluator
22determines the utility either (i) failed to achieve the
23minimum average savings life specified in paragraph (2) of
24subsection (d), (ii) did not fully meet all of the
25requirements specified in paragraphs (3) through (7) of
26subsection (d), or (iii) failed to achieve incremental annual

 

 

SB3935- 26 -LRB103 40383 LNS 72670 b

1savings equal to at least 90% of the incremental savings goal
2specified in paragraph (1) of subsection (d). If a utility
3meets all of the requirements specified in paragraphs (2)
4through (7) of subsection (d), it can earn an incentive equal
50.5% of total annual efficiency spending in the year being
6evaluated for every one percentage point above 90% of its
7incremental annual savings goal that it achieves for that
8year, with a maximum incentive of 15% for achieving 120% of its
9incremental annual savings goal.
10    (i) The utility shall submit energy savings data to the
11independent evaluator no later than 30 days after the close of
12the plan year. The independent evaluator shall determine the
13incremental annual savings and average savings life, as well
14as an estimate of the job impacts and other macroeconomic
15impacts of the efficiency programs for that year, achieved no
16later than 120 days after the close of the plan year. The
17utility shall submit an informational filing to the Commission
18no later than 160 days after the close of the plan year that
19attaches the independent evaluator's final report identifying
20the incremental annual savings for the year, identifying
21average savings life for the year, documenting compliance with
22other requirements in subsection (d), and, as applicable, the
23magnitude of any shareholder incentive which the utility has
24earned.
25    (j) Gas utilities shall report annually to the Commission
26and General Assembly on how hiring, contracting, job training,

 

 

SB3935- 27 -LRB103 40383 LNS 72670 b

1and other practices related to its energy efficiency programs
2enhance the diversity of vendors working on such programs.
3These reports must include data on vendor and employee
4diversity.
5    (k) The independent evaluator shall follow the guidelines
6and use the savings set forth in Commission-approved energy
7efficiency policy manuals and technical reference manuals, as
8each may be updated from time to time. Until measure life
9values for energy efficiency measures implemented for
10income-qualified households are separately incorporated into
11such Commission-approved manuals, the income-qualified
12measures shall have the same measure life values that are
13established for the same measures implemented in households
14that are not income-qualified households.
 
15    (220 ILCS 5/9-228.5 new)
16    Sec. 9-228.5. Consideration of gas main and gas service
17extension costs. Gas main and gas service extension policies
18shall be based on the principle that the full incremental cost
19associated with new development and growth shall be borne by
20the customers that cause those incremental costs. Gas main and
21gas service extension policies, procedures, and conditions
22shall align with the greenhouse gas emission reduction goals
23established in Article XXIV.
 
24    (220 ILCS 5/9-229)

 

 

SB3935- 28 -LRB103 40383 LNS 72670 b

1    Sec. 9-229. Consideration of attorney and expert
2compensation as an expense and intervenor compensation fund.
3    (a) The Commission shall specifically assess the justness
4and reasonableness of any amount expended by a public utility
5to compensate attorneys or technical experts to prepare and
6litigate a general rate case filing. This issue shall be
7expressly addressed in the Commission's final order.
8    (b) The State of Illinois shall create a Consumer
9Intervenor Compensation Fund subject to the following:
10        (1) Provision of compensation for Consumer Interest
11    Representatives that intervene in Illinois Commerce
12    Commission proceedings will increase public engagement,
13    encourage additional transparency, expand the information
14    available to the Commission, and improve decision-making.
15        (2) As used in this Section, "consumer Consumer
16    interest representative" means:
17            (A) a residential utility customer or group of
18        residential utility customers represented by a
19        not-for-profit group or organization registered with
20        the Illinois Attorney General under the Solicitation
21        for of Charity Act;
22            (B) representatives of not-for-profit groups or
23        organizations whose membership is limited to
24        residential utility customers; or
25            (C) representatives of not-for-profit groups or
26        organizations whose membership includes Illinois

 

 

SB3935- 29 -LRB103 40383 LNS 72670 b

1        residents and that address the community, economic,
2        environmental, or social welfare of Illinois
3        residents, except government agencies or intervenors
4        specifically authorized by Illinois law to participate
5        in Commission proceedings on behalf of Illinois
6        consumers.
7        (3) A consumer interest representative is eligible to
8    receive compensation from the consumer intervenor
9    compensation fund if its participation included lay or
10    expert testimony or legal briefing and argument concerning
11    the expenses, investments, rate design, rate impact, or
12    other matters affecting the pricing, rates, costs or other
13    charges associated with utility service, the Commission
14    adopts a material recommendation related to a significant
15    issue in the docket, and participation caused a
16    significant financial cost hardship to the participant;
17    however, no consumer interest representative shall be
18    eligible to receive an award pursuant to this Section if
19    the consumer interest representative receives any
20    compensation, funding, or donations, directly or
21    indirectly, from parties that have a financial interest in
22    the outcome of the proceeding.
23        (4) Within 30 days after September 15, 2021 (the
24    effective date of Public Act 102-662) this amendatory Act
25    of the 102nd General Assembly, each utility that files a
26    request for an increase in rates under Article IX or

 

 

SB3935- 30 -LRB103 40383 LNS 72670 b

1    Article XVI shall deposit an amount equal to one half of
2    the rate case attorney and expert expense allowed by the
3    Commission, but not to exceed $500,000, into the fund
4    within 35 days of the date of the Commission's Final final
5    Order in the rate case or 20 days after the denial of
6    rehearing under Section 10-113 of this Act, whichever is
7    later. The Consumer Intervenor Compensation Fund shall be
8    used to provide payment to consumer interest
9    representatives as described in this Section.
10        (5) An electric public utility with 3,000,000 or more
11    retail customers shall contribute $450,000 to the Consumer
12    Intervenor Compensation Fund within 60 days after
13    September 15, 2021 (the effective date of Public Act
14    102-662) this amendatory Act of the 102nd General
15    Assembly. A combined electric and gas public utility
16    serving fewer than 3,000,000 but more than 500,000 retail
17    customers shall contribute $225,000 to the Consumer
18    Intervenor Compensation Fund within 60 days after
19    September 15, 2021 (the effective date of Public Act
20    102-662) this amendatory Act of the 102nd General
21    Assembly. A gas public utility with 1,500,000 or more
22    retail customers that is not a combined electric and gas
23    public utility shall contribute $225,000 to the Consumer
24    Intervenor Compensation Fund within 60 days after
25    September 15, 2021 (the effective date of Public Act
26    102-662) this amendatory Act of the 102nd General

 

 

SB3935- 31 -LRB103 40383 LNS 72670 b

1    Assembly. A gas public utility with fewer than 1,500,000
2    retail customers but more than 300,000 retail customers
3    that is not a combined electric and gas public utility
4    shall contribute $80,000 to the Consumer Intervenor
5    Compensation Fund within 60 days after September 15, 2021
6    (the effective date of Public Act 102-662) this amendatory
7    Act of the 102nd General Assembly. A gas public utility
8    with fewer than 300,000 retail customers that is not a
9    combined electric and gas public utility shall contribute
10    $20,000 to the Consumer Intervenor Compensation Fund
11    within 60 days after September 15, 2021 (the effective
12    date of Public Act 102-662) this amendatory Act of the
13    102nd General Assembly. A combined electric and gas public
14    utility serving fewer than 500,000 retail customers shall
15    contribute $20,000 to the Consumer Intervenor Compensation
16    Fund within 60 days after September 15, 2021 (the
17    effective date of Public Act 102-662) this amendatory Act
18    of the 102nd General Assembly. A water or sewer public
19    utility serving more than 100,000 retail customers shall
20    contribute $80,000, and a water or sewer public utility
21    serving fewer than 100,000 but more than 10,000 retail
22    customers shall contribute $20,000.
23        (6)(A) Prior to the entry of a Final Order in a
24    docketed case, the Commission Administrator shall provide
25    a payment to a consumer interest representative that
26    demonstrates through a verified application for funding

 

 

SB3935- 32 -LRB103 40383 LNS 72670 b

1    that the consumer interest representative's participation
2    or intervention without an award of fees or costs imposes
3    a significant financial hardship based on a schedule to be
4    developed by the Commission. The Administrator may require
5    verification of costs incurred, including statements of
6    hours spent, as a condition to paying the consumer
7    interest representative prior to the entry of a Final
8    Order in a docketed case.
9        (B) If the Commission adopts a material recommendation
10    related to a significant issue in the docket and
11    participation caused a significant financial cost hardship
12    to the participant, then the consumer interest
13    representative shall be allowed payment for some or all of
14    the consumer interest representative's reasonable
15    attorney's or advocate's fees, reasonable expert witness
16    fees, and other reasonable costs of preparation for and
17    participation in a hearing or proceeding. Expenses related
18    to travel or meals shall not be compensable.
19        (C) The consumer interest representative shall submit
20    an itemized request for compensation to the Consumer
21    Intervenor Compensation Fund, including the advocate's or
22    attorney's reasonable fee rate, the number of hours
23    expended, reasonable expert and expert witness fees, and
24    other reasonable costs for the preparation for and
25    participation in the hearing and briefing within 30 days
26    of the Commission's final order after denial or decision

 

 

SB3935- 33 -LRB103 40383 LNS 72670 b

1    on rehearing, if any.
2        (7) Administration of the Fund.
3        (A) The Consumer Intervenor Compensation Fund is
4    created as a special fund in the State treasury. All
5    disbursements from the Consumer Intervenor Compensation
6    Fund shall be made only upon warrants of the Comptroller
7    drawn upon the Treasurer as custodian of the Fund upon
8    vouchers signed by the Executive Director of the
9    Commission or by the person or persons designated by the
10    Director for that purpose. The Comptroller is authorized
11    to draw the warrant upon vouchers so signed. The Treasurer
12    shall accept all warrants so signed and shall be released
13    from liability for all payments made on those warrants.
14    The Consumer Intervenor Compensation Fund shall be
15    administered by an Administrator that is a person or
16    entity that is independent of the Commission. The
17    administrator will be responsible for the prudent
18    management of the Consumer Intervenor Compensation Fund
19    and for recommendations for the award of consumer
20    intervenor compensation from the Consumer Intervenor
21    Compensation Fund. The Commission shall issue a request
22    for qualifications for a third-party program administrator
23    to administer the Consumer Intervenor Compensation Fund.
24    The third-party administrator shall be chosen through a
25    competitive bid process based on selection criteria and
26    requirements developed by the Commission. The Illinois

 

 

SB3935- 34 -LRB103 40383 LNS 72670 b

1    Procurement Code does not apply to the hiring or payment
2    of the Administrator. All Administrator costs may be paid
3    for using monies from the Consumer Intervenor Compensation
4    Fund, but the Program Administrator shall strive to
5    minimize costs in the implementation of the program.
6        (B) The computation of compensation awarded from the
7    fund shall take into consideration the market rates paid
8    to persons of comparable training and experience who offer
9    similar services, but may not exceed the comparable market
10    rate for services paid by the public utility as part of its
11    rate case expense.
12        (C)(1) Recommendations on the award of compensation by
13    the administrator shall include consideration of whether
14    the participation raised Commission adopted a material
15    recommendation related to a significant issue in the
16    docket and whether participation caused a significant
17    financial cost hardship to the participant and the payment
18    of compensation is fair, just, and reasonable.
19        (2) Recommendations on the award of compensation by
20    the administrator shall be submitted to the Commission for
21    approval. Unless the Commission initiates an investigation
22    within 45 days after the notice to the Commission, the
23    award of compensation shall be allowed 45 days after
24    notice to the Commission. Such notice shall be given by
25    filing with the Commission on the Commission's e-docket
26    system, and keeping open for public inspection the award

 

 

SB3935- 35 -LRB103 40383 LNS 72670 b

1    for compensation proposed by the Administrator. The
2    Commission shall have power, and it is hereby given
3    authority, either upon complaint or upon its own
4    initiative without complaint, at once, and if it so
5    orders, without answer or other formal pleadings, but upon
6    reasonable notice, to enter upon a hearing concerning the
7    propriety of the award.
8    (c) The Commission may adopt rules to implement this
9Section.
10(Source: P.A. 102-662, eff. 9-15-21; revised 1-20-24.)
 
11    (220 ILCS 5/9-235 new)
12    Sec. 9-235. Tariffed gas main and gas service extension
13provisions. No later than 60 days after the effective date of
14this amendatory Act of the 103rd General Assembly, the
15Commission shall initiate a docketed rulemaking reviewing each
16gas public utility tariff that provides for gas main and gas
17service extensions without additional charge to new customers
18in excess of the default extensions without charge as
19specified in 83 Ill. Adm. Code 501. The focus of the rulemaking
20shall be to modify each gas utility's gas main and gas service
21extension tariff to align with the provisions set forth in
22Section 9-228.5.
 
23    (220 ILCS 5/9-241)  (from Ch. 111 2/3, par. 9-241)
24    Sec. 9-241. No public utility shall, as to rates or other

 

 

SB3935- 36 -LRB103 40383 LNS 72670 b

1charges, services, facilities, or in other respect, make or
2grant any preference or advantage to any corporation or person
3or subject any corporation or person to any prejudice or
4disadvantage. No public utility shall establish or maintain
5any unreasonable difference as to rates or other charges,
6services, facilities, or in any other respect, either as
7between localities or as between classes of service.
8    However, nothing in this Section shall be construed as
9limiting the authority of the Commission to permit the
10establishment of economic development rates as incentives to
11economic development either in enterprise zones as designated
12by the State of Illinois or in other areas of a utility's
13service area. Such rates should be available to existing
14businesses which demonstrate an increase to existing load as
15well as new businesses which create new load for a utility so
16as to create a more balanced utilization of generating
17capacity. The Commission shall ensure that such rates are
18established at a level which provides a net benefit to
19customers within a public utility's service area.
20    On or before January 1, 2025 2023, the Commission shall
21conduct a comprehensive study to assess whether low-income
22discount rates for electric and natural gas residential
23customers are appropriate and the potential design and
24implementation of any such rates. The Commission shall include
25its findings, together with the appropriate recommendations,
26in a report to be provided to the General Assembly. Upon

 

 

SB3935- 37 -LRB103 40383 LNS 72670 b

1completion of the study, the Commission shall have the
2authority to permit or require electric and natural gas
3utilities to file a tariff establishing low-income discount
4rates.
5    Such study shall assess, at a minimum, the following:
6        (1) customer eligibility requirements, including
7    income-based eligibility and eligibility based on
8    participation in or eligibility for certain public
9    assistance programs;
10        (2) appropriate rate structures, including
11    consideration of tiered discounts for different income
12    levels;
13        (3) appropriate recovery mechanisms, including the
14    consideration of volumetric charges and customer charges;
15        (4) appropriate verification mechanisms;
16        (5) measures to ensure customer confidentiality and
17    data safeguards;
18        (6) outreach and consumer education procedures; and
19        (7) the impact that a low-income discount rate would
20    have on the affordability of delivery service to
21    low-income customers and customers overall.
22    On or before January 1, 2026, the Commission shall begin a
23docketed rulemaking process to implement low-income discount
24rates for electric and natural gas residential customers,
25incorporating the recommendations of the report required by
26this Section, released by the Commission in December 2022 and

 

 

SB3935- 38 -LRB103 40383 LNS 72670 b

1titled the "Illinois Commerce Commission Low-Income Discount
2Rate Study Report to the Illinois General Assembly".
3    The Commission shall adopt rules requiring utility
4companies to produce information, in the form of a mailing,
5and other approved methods of distribution, to its consumers,
6to inform the consumers of available rebates, discounts,
7credits, and other cost-saving mechanisms that can help them
8lower their monthly utility bills, and send out such
9information semi-annually, unless otherwise provided by this
10Article.
11    Prior to October 1, 1989, no public utility providing
12electrical or gas service shall consider the use of solar or
13other nonconventional renewable sources of energy by a
14customer as a basis for establishing higher rates or charges
15for any service or commodity sold to such customer; nor shall a
16public utility subject any customer utilizing such energy
17source or sources to any other prejudice or disadvantage on
18account of such use. No public utility shall without the
19consent of the Commission, charge or receive any greater
20compensation in the aggregate for a lesser commodity, product,
21or service than for a greater commodity, product, or service
22of like character.
23    The Commission, in order to expedite the determination of
24rate questions, or to avoid unnecessary and unreasonable
25expense, or to avoid unjust or unreasonable discrimination
26between classes of customers, or, whenever in the judgment of

 

 

SB3935- 39 -LRB103 40383 LNS 72670 b

1the Commission public interest so requires, may, for rate
2making and accounting purposes, or either of them, consider
3one or more municipalities either with or without the adjacent
4or intervening rural territory as a regional unit where the
5same public utility serves such region under substantially
6similar conditions, and may within such region prescribe
7uniform rates for consumers or patrons of the same class.
8    Any public utility, with the consent and approval of the
9Commission, may as a basis for the determination of the
10charges made by it classify its service according to the
11amount used, the time when used, the purpose for which used,
12and other relevant factors.
13(Source: P.A. 102-662, eff. 9-15-21.)
 
14    (220 ILCS 5/9-254 new)
15    Sec. 9-254. Independent gas system assessment.
16    (a) The General Assembly finds that an independent audit
17of the current state of the gas distribution system, and of the
18expenditures made since 2012, will need to be made.
19Specifically, the General Assembly finds:
20        (1) Pursuant to 2013 legislation establishing the
21    qualifying infrastructure plant charge, gas utilities in
22    this State that serve over 700,000 retail customers have
23    spent significant amounts of ratepayer dollars on system
24    investments purporting to refurbish, rebuild, modernize,
25    and expand gas system infrastructure.

 

 

SB3935- 40 -LRB103 40383 LNS 72670 b

1        (2) The qualifying infrastructure plant charge is set
2    to conclude at its statutory deadline of December 31,
3    2023, and it is in the interest of this State and in the
4    interest of gas utilities' customers to understand the
5    benefits of these investments to the gas system and to
6    customers and to evaluate the current condition of the gas
7    system.
8        (3) It is also necessary for gas utilities, the
9    Commission, and stakeholders to have an independently
10    verified set of data to draw upon for future gas rate cases
11    and any other proposed gas system spending.
12        (4) Meeting the State's climate goals will require an
13    ordered transition away from gas, and toward electric
14    heating and appliances, for all or nearly all buildings,
15    and planning this transition will require a thorough
16    understanding of the current state of the gas system.
17        (5) The Commission has authority to order and
18    implement the requirements of this Section under Section
19    8-102.
20    (b) Terms used in this Section shall have the meanings
21given to them in Section 19-105.
22    (c) Within 30 days after the effective date of this
23amendatory Act of the 103rd General Assembly, the Commission
24shall issue an order initiating an audit of each gas utility
25serving over 700,000 retail customers in the State, which
26shall examine the following:

 

 

SB3935- 41 -LRB103 40383 LNS 72670 b

1        (1) An assessment of the gas distribution system, as
2    described in paragraph (2) of subsection (a). The
3    Commission shall have the authority to require additional
4    items that it deems necessary.
5        (2) An analysis of the utility's capital projects
6    placed into service in the preceding 10 years, including,
7    but not limited to, an assessment of the value and safety
8    impact of pipe replacement, increased system pressure, and
9    pipe capacity expansion.
10        (3) An assessment of the utility's emissions
11    reductions to date and what preparations the utility has
12    made to meet the terms of the Paris Climate Agreement,
13    with which it is the policy of the State to comply.
14        (4) The creation of a visual, geographic map of the
15    gas system displaying the level of risk of various
16    pipelines and showing the areas where pipelines have
17    already been replaced.
18        (5) The identifying areas of the gas system where the
19    cost to replace pipeline is likely to be high, including,
20    but not limited to, identifying places where
21    decommissioning a portion of the gas system and planning
22    to provide for electric heating and appliance needs in
23    that area may be preferable, considering the costs and
24    benefits for affordability, health, and climate.
25    (d) It is contemplated that the auditor will use materials
26filed with the Commission by the utilities with respect to the

 

 

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1auditor's expenditures in the preceding 10 years; however, the
2auditor may also, with Commission approval, assess other
3information deemed necessary to make its report. The results
4of the audit described in this Section shall be reflected in a
5report delivered to the Commission, describing the information
6specified in this Section. The report is to be delivered no
7later than 180 days after the Commission enters its order
8under subsection (c). It is understood that any public report
9may not contain items that are confidential or proprietary.
10    (e) The costs of a gas utility's audit described in this
11Section shall not exceed $500,000 and shall be paid for by the
12electric utility that is the subject of the audit. Such costs
13shall be a recoverable expense.
14    (f) The Commission shall have the authority to retain the
15services of an auditor to assist with the distribution
16planning process, as well as in docketed proceedings. Such
17expenses for these activities shall also be borne by the
18Commission.
 
19    (220 ILCS 5/9-255 new)
20    Sec. 9-255. Phase-out of gas fixed changes. Beginning
21January 1, 2035, a public utility providing gas service may
22not assess fixed charges as part of its rates. Beginning
23January 1, 2030, a public utility providing gas service must
24limit, for each customer class, any fixed charges in its rates
25to no greater than 50% of the average of monthly fixed charges

 

 

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1for that customer class during the period January 1, 2019 to
2December 31, 2021.
 
3    (220 ILCS 5/16-111.10)
4    Sec. 16-111.10. Equitable Energy Upgrade Program.
5    (a) The General Assembly finds and declares that Illinois
6homes and businesses can contribute to the creation of a clean
7energy economy, conservation of natural resources, and
8reliability of the electricity grid through the installation
9of cost-effective renewable energy generation, energy
10efficiency and demand response equipment, and energy storage
11systems. Further, a large portion of Illinois residents and
12businesses that would benefit from the installation of energy
13efficiency, storage, and renewable energy generation systems
14are unable to purchase systems due to capital or credit
15barriers. This State should pursue options to enable many more
16Illinoisans to access the health, environmental, and financial
17benefits of new clean energy technology.
18    (b) As used in this Section:
19    "Commission" means the Illinois Commerce Commission.
20    "Energy project" means renewable energy generation
21systems, including solar projects, energy efficiency upgrades,
22decarbonization and electrification measures, energy storage
23systems, demand response equipment, or any combination
24thereof.
25    "Fund" means the Clean Energy Jobs and Justice Fund

 

 

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1established in the Clean Energy Jobs and Justice Fund Act.
2    "Program" means the Equitable Energy Upgrade Program
3established under subsection (c).
4    "Utility" means electric public utilities providing
5services to 500,000 or more customers under this Act.
6    (c) The Commission shall open an investigation into and
7direct all electric and gas public utilities in this State to
8adopt an Equitable Energy Upgrade Program that permits
9customers to finance the construction of energy projects
10through an optional tariff payable directly through their
11utility bill, modeled after the Pay As You Save system,
12developed by the Energy Efficiency Institute. The Program
13model shall enable utilities to offer to make investments in
14energy projects to customer properties with low-cost capital
15and use an opt-in tariff to recover the costs. The Program
16shall be designed to provide customers with immediate
17financial savings if they choose to participate. The Program
18shall allow residential electric and gas utility customers
19that own the property, or renters that have permission of the
20property owner, for which they subscribe to utility service to
21agree to the installation of an energy project. The Program
22shall ensure:
23        (1) eligible projects do not require upfront payments;
24    however, customers may pay down the costs for projects
25    with a payment to the installing contractor in order to
26    qualify projects that would otherwise require upfront

 

 

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1    payments;
2        (2) eligible projects have sufficient estimated
3    savings and estimated life span to produce significant,
4    immediate net savings;
5        (3) participants shall agree the utility can recover
6    its costs for the projects at their location by paying for
7    the project through an optional tariff directly through
8    the participant's utility electricity bill, allowing
9    participants to benefit from installation of energy
10    projects without traditional loans;
11        (4) accessibility by lower-income residents and
12    environmental justice community residents; and
13        (5) the utility must ensure that customers who are
14    interested in participating are notified that if they are
15    income qualified, they may also be eligible for the
16    Percentage of Income Payment Plan program and free energy
17    improvements through other programs and facilitate
18    interested customers' enrollment in those programs; and
19    provide contact information.
20        (6) coordination with existing utility, state, and
21    federal energy efficiency, solar, electrification, and
22    other energy savings funding and implementation programs.
23    (d) The Commission shall establish Program guidelines with
24the anticipated schedule of Program availability as follows:
25        (1) Year 1: Beginning in the first year of operation,
26    each utility with greater than 100,000 retail customers is

 

 

SB3935- 46 -LRB103 40383 LNS 72670 b

1    required to obtain low-cost capital of at least
2    $20,000,000 annually for investments in energy projects.
3        (2) Year 2: Beginning in the second year of operation,
4    each utility with greater than 100,000 retail customers is
5    required to obtain low-cost capital for investments in
6    energy projects of at least $40,000,000 annually.
7        (3) Year 3: Beginning in the third year of operation,
8    each utility with greater than 100,000 retail customers is
9    required to obtain low-cost capital for investments in as
10    many systems as customers demand, subject to available
11    capital provided by the utility, State, or other lenders.
12    (e) In the design of the Program, the Commission shall:
13        (1) Within 90 days after the effective date of this
14    amendatory Act of the 103rd General Assembly, begin a
15    process to update the Program guidelines for
16    implementation of the Program. Any such process shall
17    allow for participation from interested stakeholders.
18    Within 270 days after the effective date of this
19    amendatory Act of the 102nd General Assembly, convene a
20    workshop during which interested participants may discuss
21    issues and submit comments related to the Program.
22        (2) Establish Program guidelines for implementation of
23    the Program in accordance with the Pay As You Save
24    Essential Elements and Minimum Program Requirements that
25    electric and gas utilities must abide by when implementing
26    the Program. Program guidelines established by the

 

 

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1    Commission shall include the following elements:
2            (A) The Commission shall establish conditions
3        under which utilities secure capital to fund the
4        energy projects. The Commission may allow utilities to
5        raise capital independently, work with third-party
6        lenders to secure the capital for participants, or a
7        combination thereof. Any process the Commission
8        approves must use a market mechanism to identify the
9        least costly sources of capital funds so as to pass on
10        maximum savings to participants. The State or the
11        Clean Energy Jobs and Justice Fund may also provide
12        capital for the Program.
13            (B) Customer protection guidelines should be
14        designed consistent with Pay As You Save Essential
15        Elements and Minimum Program Requirements.
16            (C) The Commission shall establish conditions by
17        which utilities may connect Program participants to
18        energy project vendors. In setting conditions for
19        connection, the Commission may prioritize vendors that
20        have a history of good relations with the State,
21        including vendors that have hired participants from
22        State-created job training programs.
23            (D) Guarantee that conservative estimates of
24        financial savings will immediately and significantly
25        exceed estimated Program costs for Program
26        participants.

 

 

SB3935- 48 -LRB103 40383 LNS 72670 b

1            (E) Require any customer data sharing between
2        electric and gas utilities and third-party vendors
3        needed to evaluate the energy and demand saving and
4        energy services revenue opportunities of all customers
5        and otherwise facilitate a positive customer
6        experience. Such data sharing may include but shall
7        not be limited to historical and ongoing customer
8        usage data and billing rates. The Commission may allow
9        utilities to recover the costs associated with data
10        sharing from all customers.
11            (F) Notwithstanding the method used to estimate
12        site-specific energy savings or measure direct energy
13        savings for Program participants, the utility will
14        report aggregate savings to the Commission for
15        regulatory filings in the same or a similar manner as
16        other energy efficiency or clean energy programs.
17    (f) Within 90 120 days after the Commission releases the
18Program conditions established under this Section, each
19utility subject to the requirements of this Section shall
20submit an informational filing to the Commission that
21describes its plan for implementing the provisions of this
22Section. If the Commission finds that the submission does not
23properly comply with the statutory or regulatory requirements
24of the Program, the Commission may require that the utility
25make modifications to its filing.
26    (g) An independent process evaluation shall be conducted

 

 

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1after one year of the Program's operation. An independent
2impact evaluation shall be conducted after 3 years of
3operation, excluding one-time startup costs and results from
4the first 12 months of the Program. The Commission shall
5convene an advisory council of stakeholders, including
6representation of low-income and environmental justice
7community members to make recommendations in response to the
8findings of the independent evaluation.
9    (h) The Program shall be designed using the Pay As You Save
10system guidelines to be cost-effective for customers. Only
11projects that are deemed to be cost-effective and can be
12reasonably expected to ensure customer savings are eligible
13for funding through the Program, unless, as specified in
14paragraph (1) of subsection (c), customers able to make
15upfront copayments to installers buy down the cost of projects
16so it can be deemed cost-effective.
17    (i) Eligible customers must be:
18        (1) property renters with permission of the property
19    owner; or
20        (2) property owners.
21    (j) The calculation of project cost-effectiveness shall be
22based upon the Pay As You Save system requirements.
23        (1) The calculation of cost-effectiveness must be
24    conducted by an objective process approved by the
25    Commission and based on rates in effect at the time of
26    installation.

 

 

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1        (2) A project shall be considered cost-effective only
2    if it is estimated to produce significant immediate net
3    savings, not counting copayments voluntarily made by
4    customers. The Commission may establish guidelines by
5    which this required savings is estimated.
6        (3) Net savings shall include savings across all fuel
7    sources, not limited to electricity and natural gas.
8        (4) The calculation of project cost-effectiveness
9    shall not exclude projects that:
10            (A) would raise customer costs in a particular
11        month so long as customers see annual project savings;
12        or
13            (B) increase electric load and accompanying costs
14        when a heating electrification project results in the
15        ability to cool part or all of a home that was not
16        previously cooled. In such cases, the increased
17        electricity consumption associated with that added
18        cooling shall not be included in calculations of net
19        savings. Extreme heat poses an increasing risk to
20        Illinois communities. As such, it is in the public
21        interest to mitigate that risk through the addition of
22        building cooling systems.
23        However, any expected increase in electric load and
24    customer costs should be clearly communicated to impacted
25    customers, along with any options for mitigating that
26    increase.

 

 

SB3935- 51 -LRB103 40383 LNS 72670 b

1    (k) The Program should be modeled after the Pay As You Save
2system, by which Program participants finance energy projects
3using the savings that the energy project creates with a
4tariffed on-bill program. Eligible projects shall not create
5personal debt for the customer, result in a lien in the event
6of nonpayment, or require customers to pay monthly charges for
7any upgrade that fails and is not repaired within 21 days. The
8utility may restart charges once the upgrade is repaired and
9functioning and extend the term of payments to recover its
10costs for missed payments and deferred cost recovery,
11providing the upgrade continues to function.
12    (l) Any energy project that is defective or damaged due to
13no fault of the participant must be either replaced or
14repaired with parts that meet industry standards at the cost
15of the utility or vendor, as specified by the Commission, and
16charges shall be suspended until repairs or replacement is
17completed. The Commission may establish, increase, or replace
18the requirements imposed in this subsection. The Commission
19may determine that this responsibility is best handled by
20participating project vendors in the form of insurance,
21contractual guarantees, or other mechanisms, and issue rules
22detailing this requirement. Customers shall not be charged
23monthly payments for upgrades that are no longer functioning.
24    (m) In the event of nonpayment, the remaining balance due
25to pay off the system shall remain with the utility meter at an
26upgraded location. The Commission shall establish conditions

 

 

SB3935- 52 -LRB103 40383 LNS 72670 b

1subject to this constraint in the event of nonpayment that are
2in accordance with the Pay As You Save system.
3    (n) The utility shall make every effort to ensure that
4customers who are income-qualified for free energy upgrade
5programs take full advantage of those programs first before
6using the Equitable Energy Upgrade Program. If the demand by
7utility customers exceeds the Program capital supply in a
8given year, utilities shall ensure that 50% of participants
9are:
10        (1) customers in neighborhoods where a majority of
11    households make 150% or less of area median income; or
12        (2) residents of environmental justice communities.
13    (o) Utilities shall endeavor to inform customers about the
14availability of the Program, their potential eligibility for
15participation in the Program, and whether they are likely to
16save money on the basis of an estimate conducted using
17variables consistent with the Program that the utility has at
18its disposal. The Commission may establish guidelines by which
19utilities must abide by this directive and alternatives if the
20Commission deems utilities' efforts as inadequate.
21    (p) Subject to Commission specifications under subsection
22(c), each utility shall work with certified project vendors
23selected using a request for proposals process to establish
24the terms and processes under which a utility can install
25eligible renewable energy generation and energy storage
26systems using the capital to fit the Equitable Energy Upgrade

 

 

SB3935- 53 -LRB103 40383 LNS 72670 b

1model. The utility certified project vendor shall explain and
2offer the approved upgrades to customers and shall assist
3customers in applying for financing through the Program. As
4part of the process, utilities vendors shall also provide
5participants with information about any other relevant
6incentives that may be available and customer service
7regarding the effective use of the upgrades.
8    Nothing shall preclude gas and electric utilities that
9have overlapping service territories from jointly implementing
10and delivering the Program.
11    (q) A participating An electric utility shall recover all
12of the prudently incurred costs of offering a program approved
13by the Commission under this Section. For investor-owned
14utilities, shareholder incentives will be proportional to
15meeting Commission approved thresholds for the number of
16customers served and the amount of its investments in those
17locations.
18    (r) The Commission shall adopt all rules necessary for the
19administration of this Section.
20(Source: P.A. 102-662, eff. 9-15-21.)
 
21    (220 ILCS 5/Art. XXIII heading new)
22
ARTICLE XXIII. CLEAN BUILDING HEATING LAW

 
23    (220 ILCS 5/23-101 new)
24    Sec. 23-101. Short title. This Article may be cited as the

 

 

SB3935- 54 -LRB103 40383 LNS 72670 b

1Clean Building Heating Law. References in this Article to
2"this Act" mean this Article.
 
3    (220 ILCS 5/23-102 new)
4    Sec. 23-102. Findings. The General Assembly finds that the
5adoption and use of clean, zero-pollution space and water
6heating appliances in residential and commercial buildings
7would benefit the State by (i) protecting the air that
8Illinoisans breathe through reducing unhealthy levels of smog
9and ozone, (ii) minimizing health risks associated with air
10pollution, including respiratory ailments, cardiovascular
11illnesses, and premature death, which are linked to exposure
12to fine particulate matter and nitrogen dioxide, (iii)
13assisting the State in achieving attainment of federal
14National Ambient Air Quality Standards for ozone and meeting
15the State's obligations under the federal Regional Haze Rule,
16(iv) reducing climate pollution in service to the State's
17net-zero greenhouse gas goals, and (v) contributing to the
18State's economy through building and mobilizing a trained and
19competitive workforce to install and maintain newly purchased
20appliances.
 
21    (220 ILCS 5/23-103 new)
22    Sec. 23-103. Definitions. As used in this Article:
23    "Annual fuel utilization efficiency" or "AFUE" means the
24efficiency as defined by Section 4.2.35 of the Code of Federal

 

 

SB3935- 55 -LRB103 40383 LNS 72670 b

1Regulations, Title 10, Part 430, Subpart B, Appendix N.
2    "Boiler" or "water heater" means a product used to heat
3water or produce steam and that is not exclusively used to
4produce electricity for sale. "Boiler" does not include any
5waste heat recovery boiler that is used to recover sensible
6heat from the exhaust of a combustion turbine or any unfired
7waste heat recovery boiler that is used to recover sensible
8heat from the exhaust of any combustion equipment.
9    "Btu" means British thermal unit, which is a scientific
10unit of measurement equal to the quantity of heat required to
11raise the temperature of one pound of water by one degree
12Fahrenheit at approximately 60 degrees Fahrenheit.
13    "Director" means the Director of the Environmental
14Protection Agency or the Director's designee.
15    "Fan-type central furnace" means a self-contained space
16heater providing for circulation of heated air at pressures
17other than atmospheric through ducts more than 25 cm (10 in) in
18length.
19    "Furnace" means a product designed to be a source of
20interior space heating.
21    "Heat input" means the heat released by the combustion of
22fuels in a unit based on the higher heating value of fuel,
23excluding the enthalpy of incoming combustion air.
24    "Heat output" means the product obtained by multiplying
25the recovery efficiency, as defined by Section 6.1.3 of the
26Code of Federal Regulation, Title 10, Part 430, Subpart B,

 

 

SB3935- 56 -LRB103 40383 LNS 72670 b

1Appendix E, by the input rating of the unit.
2    "NOx" and "NOx emissions" means the sum of nitric oxide and
3nitrogen dioxide in the unit's flue gas, collectively
4expressed as nitrogen dioxide.
5    "Rated heat input capacity" means the heat input capacity
6specified on the nameplate of the combustion unit. If a unit
7has been altered or modified such that its maximum heat input
8is different from the heat input capacity specified on the
9nameplate, the new maximum heat input is the unit's rated heat
10input capacity.
11    "Useful heat delivered to the heated space" means the
12annual fuel utilization efficiency (expressed as a fraction)
13multiplied by the heat input.
 
14    (220 ILCS 5/23-104 new)
15    Sec. 23-104. Applicability. This Article applies to any
16person who sells, installs, offers for sale, leases, or offers
17for lease the following products in this State, as well as any
18manufacturer who intends to sell or distribute for sale or
19installation the following products in this State: (i) new
20water heaters and boilers with a rated heat input capacity of
212,000,000 Btus per hour or less; and (ii) new furnaces with a
22rated heat input capacity of 175,000 Btus per hour or less,
23and, in the case of combination heating and cooling units, a
24cooling rate of 65,000 Btus per hour or less.
 

 

 

SB3935- 57 -LRB103 40383 LNS 72670 b

1    (220 ILCS 5/23-105 new)
2    Sec. 23-105. Emissions standards for new building heating
3and water heating appliances.
4    (a) On and after January 1, 2025, a person shall not sell,
5install, offer for sale, lease, or offer for lease, and a
6manufacturer shall not sell or distribute for sale or
7installation, the following new products in this State:
8        (1) water heaters with a rated heat input capacity of
9    75,000 Btus per hour or less, and any water heaters with
10    power assist, that emit more than 10 nanograms of NOx per
11    joule of heat output;
12        (2) water heaters and boilers with a rated heat input
13    capacity from 75,001 to 2,000,000 Btus per hour,
14    inclusive, that emit more than 14 nanograms of NOx per
15    joule of heat output; or
16        (3) fan-type central furnaces with a rated heat input
17    capacity of 175,000 Btus per hour or less that emit more
18    than 14 nanograms of NOx per joule of heat output.
19    (b) On and after January 1, 2030, a person shall not sell,
20install, offer for sale, lease, or offer for lease, and a
21manufacturer shall not sell or distribute for sale or
22installation, the following new products in this State:
23        (1) water heaters and boilers with a rated heat input
24    capacity of 2,000,000 Btus per hour or less that emit more
25    than 0.0 nanograms of NOx per joule of heat output; or
26        (2) furnaces with a rated heat input capacity of

 

 

SB3935- 58 -LRB103 40383 LNS 72670 b

1    175,000 Btus per hour or less that emit more than 0.0
2    nanograms of NOx per joule of heat output. This includes
3    non-central installations, such as wall furnaces, as well
4    as units installed in non-residential applications.
 
5    (220 ILCS 5/23-106 new)
6    Sec. 23-106. Certification and identification of compliant
7products.
8    (a) The manufacturer shall obtain confirmation from an
9independent testing laboratory that each water heater, boiler,
10or furnace model that is subject to the requirements of this
11Article and that the manufacturer intends to sell or
12distribute for sale or installation into the State has been
13tested in accordance with the procedures in Section 23-107.
14This confirmation shall include the following statement signed
15and dated by the person responsible for the report at the
16independent testing laboratory: "Based on my inquiry of those
17individuals with primary responsibility for obtaining the
18information, I certify that the statements and information in
19this source test report are to the best of my knowledge and
20belief true, accurate, and complete. I am aware that there are
21significant civil and criminal penalties for submitting false
22statements or information or omitting required statements or
23information, including the possibility of fine or
24imprisonment."
25    (b) For each such product model, the manufacturer shall

 

 

SB3935- 59 -LRB103 40383 LNS 72670 b

1submit to the Director either of the following:
2        (1) A statement that each product model meets the
3    emission standards set forth in Section 23-105. The
4    statement must:
5            (A) provide the following general information:
6        name and address of manufacturer, brand name, trade
7        name, model number, and rated heat input capacity;
8            (B) provide a description of the model being
9        certified;
10            (C) include a complete certification source test
11        report demonstrating that the product model was tested
12        in accordance with procedures in Section 23-107 and a
13        written statement that the model complies with Section
14        23-105;
15            (D) include the following statement signed and
16        dated by a managerial level employee responsible for
17        the certification request at the manufacturer: "Based
18        on my inquiry of those individuals with primary
19        responsibility for obtaining the information, I
20        certify that the statements and information in this
21        request for certification are to the best of my
22        knowledge and belief true, accurate, and complete. I
23        am aware that there are significant civil and criminal
24        penalties for submitting false statements or
25        information or omitting required statements or
26        information, including the possibility of fine or

 

 

SB3935- 60 -LRB103 40383 LNS 72670 b

1        imprisonment.";
2            (E) be submitted to the Director no more than 90
3        days after the date of the emissions compliance test
4        conducted in accordance with Section 23-107; and
5            (F) be submitted to the Director no less than 90
6        days before the intention to sell or distribute a new
7        product model within the State or no less than 90 days
8        before the dates described in Section 23-105.
9        (2) An approved South Coast Air Quality Management
10    District (SCAQMD) certification for each product model
11    issued pursuant to SCAQMD Rules 1111, 1121, or 1146.2, to
12    demonstrate compliance with subsection (a) of Section
13    23-105.
14    (c) The manufacturer shall display the model number and
15the certification status of a product complying with this
16Article on the shipping carton and rating plate of each unit.
 
17    (220 ILCS 5/23-107 new)
18    Sec. 23-107. Determination of emissions. Emissions from
19products subject to the requirements of this Article shall be
20tested in accordance with the following provisions:
21        (1) Each product model shall receive certification
22    based on emission tests of a randomly selected unit of
23    that model.
24        (2) The measurement of NOx emissions shall be
25    conducted in accordance with EPA Reference Method 7 (40

 

 

SB3935- 61 -LRB103 40383 LNS 72670 b

1    CFR Part 60, Appendix A), Test Methods 7A-7E.
2        (3) Each tested water heater shall be operated in
3    accordance with Section 2.4 of American National Standards
4    ANSI Z21.10.1-1990 at normal test pressure, input rates,
5    and with a 5-foot exhaust stack installed during the NOx
6    emissions tests.
7        (4) Each tested furnace shall be operated in
8    accordance with the procedures specified in Section 3.1 of
9    the Code of Federal Regulations, Title 10, Part 430,
10    Subpart B, Appendix N.
11        (5) One of the 2 following formulas shall be used to
12    calculate the NOx emission rate in nanograms of NOx per
13    joule of heat output:
14        N=4.566×104PUHCE
15        or
16        N=3.655×1010P20.9-YZE
17        Where:
18        N = Calculated mass emissions of NOx per unit of useful
19    heat (nanograms per joule of useful heat delivered to the
20    heated space).
21        P = Measured concentration of NOx in flue gas (parts
22    per million by volume).
23        Y = Measured concentration of O2 in flue gas
24    (percentage by volume).
25        Z = Gross heating value of gas (joules per cubic meter
26    at 0.0 degrees Celsius, 1 atm).

 

 

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1        E = AFUE (percentage), as defined in Section 23-103.
2        U = Concentration of CO2 in water-free flue gas for
3    stoichiometric combustion (percentage by volume).
4        H = Gross heating value of the fuel (Btu per cubic
5    foot, 60 degrees Fahrenheit, 30-in Hg).
6        C = Measured concentration of CO2 in flue gas
7    (percentage by volume).
 
8    (220 ILCS 5/23-108 new)
9    Sec. 23-108. Enforcement and penalties.
10    (a) The Director may require the emission test results to
11be provided when deemed necessary to verify compliance and may
12periodically conduct on-site inspections and tests as are
13deemed necessary to ensure compliance. Such verifications
14shall be conducted at least once within 2 years of the date
15described in subsection (a) of Section 23-105 and again at
16least once every 5 years thereafter.
17    (b) If the Director determines that a manufacturer,
18distributor, retailer, installer, or other person is in
19violation of any provision of this Act, that violation is
20subject to fines and penalties according to the Director's
21authority.
22    (c) For purposes of this Section, fines or penalties may
23be levied against an installer who installs a product covered
24by this Article in violation of this Article, however they
25shall not be levied against such installer's nonmanagerial

 

 

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1employees, if any, who perform such installation.
2    (d) Fines and penalties collected under this Section may
3be used for supplemental environmental programs to offset the
4cost of furnace and water heater replacements in low-income
5and moderate-income households or households in environmental
6justice communities, according to the Director's authority to
7use fines and penalties.
8    (e) On or before the date described in subsection (a) of
9Section 23-105, the Director shall establish a process whereby
10individuals may anonymously report potential violations of
11this Act. The Director shall investigate any such reported
12potential violations.
 
13    (220 ILCS 5/23-109 new)
14    Sec. 23-109. Additional regulation. The Director may adopt
15rules as necessary to ensure the proper implementation and
16enforcement of this Article.
 
17    (220 ILCS 5/23-111 new)
18    Sec. 23-111. Revisions to building codes to comply with
19greenhouse gas emissions reduction requirements.
20    (a) Beginning no later than July 1, 2025, to support the
21State's achievement of its greenhouse gas emissions
22requirements and to improve public health outcomes, the State
23building code shall require that the site energy use intensity
24between minimally compliant but otherwise similar buildings of

 

 

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1differing fuel types shall not be significantly unequal in all
2new construction statewide. Beginning no later than July 1,
32025, to the fullest extent feasible, the building code shall
4require that any area or service within a project where
5infrastructure, building systems, or equipment used for the
6combustion of fossil fuels are installed must be all-electric
7ready.
8    (b) Requirements for all-electric ready new construction
9for residential buildings shall include:
10        (1) a heat pump space heater ready. Systems using gas
11    or propane furnaces to serve individual dwelling units
12    shall include the following:
13            (A) a dedicated 240 volt branch circuit wiring
14        shall be installed within 3 feet from the furnace and
15        accessible to the furnace with no obstructions. The
16        branch circuit conductors shall be rated at 30 amps
17        minimum. The blank cover shall be identified as "240V
18        ready"; and
19            (B) the main electrical service panel shall have a
20        reserved space to allow for the installation of a
21        double pole circuit breaker for a future heat pump
22        space heater installation. The reserved space shall be
23        permanently marked as "For Future 240V use";
24        (2) an electric cooktop ready. Systems using gas or
25    propane cooktops to serve individual dwelling units shall
26    include the following:

 

 

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1            (A) a dedicated 240 volt branch circuit wiring
2        shall be installed within 3 feet from the cooktop and
3        accessible to the cooktop with no obstructions. The
4        branch circuit conductors shall be rated at 50 amps
5        minimum. The blank cover shall be identified as "240V
6        ready"; and
7            (B) the main electrical service panel shall have a
8        reserved space to allow for the installation of a
9        double pole circuit breaker for a future electric
10        cooktop installation. The reserved space shall be
11        permanently marked as "For Future 240V Use";
12        (3) an electric clothes dryer ready. Clothes dryer
13    locations with gas or propane plumbing shall include the
14    following:
15            (A) systems serving individual dwelling units
16        shall include:
17                (i) a dedicated 240 volt branch circuit wiring
18            shall be installed within 3 feet from the clothes
19            dryer location and accessible to the clothes dryer
20            location with no obstructions. The branch circuit
21            conductors shall be rated at 30 amps minimum. The
22            blank cover shall be identified as "240V ready";
23            and
24                (ii) the main electrical service panel shall
25            have a reserved space to allow for the
26            installation of a double pole circuit breaker for

 

 

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1            a future electric clothes dryer installation. The
2            reserved space shall be permanently marked as "For
3            Future 240V Use"; and
4            (B) systems in common use areas shall include
5        conductors or raceway shall be installed with
6        termination points at the main electrical panel, via
7        subpanels if applicable, to a location no more than 3
8        feet from each gas outlet or a designated location of
9        future electric replacement equipment. Both ends of
10        the conductors or raceway shall be labeled "Future
11        240V Use". The conductors or raceway and any
12        intervening subpanels, panelboards, switchboards, and
13        busbars shall be sized to meet the future electric
14        power requirements, at the service voltage to the
15        point at which the conductors serving the building
16        connect to the utility distribution system. The
17        capacity requirements may be adjusted for demand
18        factors. Gas flow rates shall be determined in
19        accordance with State plumbing code. Capacity shall be
20        one of the following:
21                (i) 0.24 amps at 208/240 volts per clothes
22            dryer;
23                (ii) 2.6 kVA for each 10,000 Btu per hour of
24            rated gas input or gas pipe capacity; or
25                (iii) the electrical power required to provide
26            equivalent functionality of the gas-powered

 

 

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1            equipment as calculated and documented by the
2            responsible person associated with the project;
3            and
4        (4) a heat pump water heater ready. Systems using gas
5    or propane service water heaters to serve individual
6    dwelling units shall include the following:
7            (A) a dedicated 240 volt branch circuit wiring
8        shall be installed within 3 feet from the furnace and
9        accessible to the furnace with no obstructions. The
10        branch circuit conductors shall be rated at 30 amps
11        minimum. The blank cover shall be identified as "240V
12        ready";
13            (B) the main electrical service panel shall have a
14        reserved space to allow for the installation of a
15        double pole circuit breaker for a future heat pump
16        water heater installation. The reserved space shall be
17        permanently marked as "For Future 240V use"; and
18            (C) an indoor space that is at least 3 feet by 3
19        feet by 7 feet high shall be available surrounding or
20        within 3 feet of the installed water heater, except
21        where a tankless water heater is installed.
22    (c) Newly constructed commercial buildings shall meet the
23requirements of Appendix CH of the 2024 version of the
24International Energy Conservation Code.
25    (d) Beginning no later than January 1, 2026, the State
26building code must include a prescriptive requirement for

 

 

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1central air conditioning systems that are being removed due to
2equipment failure or as part of a larger renovation project,
3that they must be replaced with a heat pump capable of both
4heating and cooling in accordance with the following
5requirements:
6        (1) Requirements for residential buildings:
7            (A) If an existing central air conditioner is
8        removed from a natural gas, propane, or fuel oil
9        forced air system that is to remain in place, the
10        replacement heat pump must be sized to meet the
11        cooling load of the home with controls allowing the
12        heat pump to provide the primary heating and furnace
13        as "backup" heating.
14            (B) If an existing central air conditioner is
15        connected to a natural gas, propane, or fuel oil
16        forced air system that is to also be replaced, the
17        replacement heat pump must be sized to meet all loads
18        of the home. Exceptions may be given for replacement
19        systems that require the main electrical service panel
20        to be upgraded.
21            (C) If an existing central air conditioner and its
22        accompanying ductwork are replaced, the replacement
23        heat pump must be sized to meet all loads of the home.
24        (2) Requirements for commercial buildings: If an
25    existing rooftop packaged unit is removed, the replacement
26    unit must be a heat pump. This requirement only applies to

 

 

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1    existing rooftop packaged units that are 65,000 Btu/h or
2    less. Exceptions may be given for replacement systems that
3    require the main electrical service panel to be upgraded.
 
4    (220 ILCS 5/23-112 new)
5    Sec. 23-112. Revisions to gas service line extensions to
6comply with greenhouse gas emissions reduction requirements.
7    (a) To support the State's achievement of its greenhouse
8gas emissions requirements, and to improve public health
9outcomes, no gas company may furnish or supply gas service,
10instrumentalities, and facilities to any commercial or
11residential location that did not receive gas service or did
12not file applications for gas service on or before June 30,
132027.
14    (b) The following locations are exempt from the
15requirements of subsection (a):
16        (1) buildings that require gas systems for emergency
17    backup power; and
18        (2) buildings specifically designated for occupancy by
19    a commercial food establishment, laboratory, laundromat,
20    hospital, or crematorium.
 
21    (220 ILCS 5/23-301 new)
22    Sec. 23-301. Severability. If any provision of this
23Article or the application of this Article to any person or
24circumstance is held invalid, such invalidity does not affect

 

 

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1other provisions or applications of the Article that can be
2given effect without the invalid provision or application, and
3to this end the provisions of this Article are declared to be
4severable.
 
5    (220 ILCS 5/Art. XXIV heading new)
6
ARTICLE XXIV. 2050 HEAT DECARBONIZATION STANDARD

 
7    (220 ILCS 5/24-101 new)
8    Sec. 24-101. Legislative policy. To provide the highest
9quality of life for the residents of this State and to provide
10for a clean and healthy environment, it is the policy of this
11State that natural gas utilities, otherwise referred to as
12"obligated parties", shall transition to 100% zero emissions
13by 2050. Under the heat decarbonization standard, each gas
14utility has an annual obligation, beginning in 2030, to reduce
15the greenhouse gas emissions resulting from the combustion of
16the fuels it delivers to its customers. The emission reduction
17obligation for 2030 shall be 20% relative to each utility's
182020 greenhouse gas emissions levels on a weather-normalized
19basis. The emission reduction obligation shall grow by 4
20percentage points per year every year thereafter, such that
21the annual emission reduction requirement will reach 24% in
222031, 28% in 2032, 32% in 2033, 36% in 2034, 40% by 2035, 44%
23by 2036, 48% by 2037, 52% by 2038, 56% by 2039, 60% by 2040,
2464% by 2041, 68% by 2042, 72% by 2043, 76% by 2044, 80% by

 

 

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12045, 84% by 2046, 88% by 2047, 92% by 2048, 96% by 2049, and
2100% by 2050. This obligation shall be referred to as the "heat
3decarbonization standard". The heat decarbonization standard
4must be met by the lowest societal cost combination of supply
5and demand-side resources. References in this Article to "this
6Act" means this Article.
 
7    (220 ILCS 5/24-102 new)
8    Sec. 24-102. Options for compliance.
9    (a) Obligated parties must demonstrate compliance with the
10heat decarbonization standard using a combination of:
11        (1) emission reductions achieved from the obligated
12    parties' own customers; and
13        (2) clean heat credits purchased from other gas
14    utilities that are also obligated parties in this State.
15    (b) Prior to 2035, at least 70% of each obligated party's
16emission reduction obligation must be met through emission
17reductions achieved from its own customers, with no more than
1830% of the emission reduction obligation in any year met
19through the purchase of clean heat credits. From 2035 through
202040, at least 80% of each obligated party's emission
21reduction requirement must be met through emission reductions
22from its own customers, with no more than 20% met through the
23purchase of clean heat credits. After 2040, at least 90% of
24each obligated party's emission reduction requirement must be
25met through emission reductions achieved from its own

 

 

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1customers, with no more than 10% met through the purchase of
2clean heat credits.
 
3    (220 ILCS 5/24-103 new)
4    Sec. 24-103. Measures for customer emission reduction.
5Emissions must be achieved through improvements in customers'
6energy conservation practices, improvements in customers'
7end-use efficiency, full or partial electrification of any end
8use, or switching from fossil methane to lower-emitting liquid
9or gaseous fuels that are delivered by the obligated party and
10directly consumed by end-use customers at the customers' homes
11or businesses. Lower-emitting liquid or gaseous fuels may
12include biomethane, but lower-emitting liquid or gaseous fuels
13may not include hydrogen except for industrial applications.
14For emission reductions from lower-emitting liquid or gaseous
15fuels to be counted toward an obligated party's emission
16reduction obligation, the obligated party must both acquire
17the lower-emitting fuel, including its environmental
18attributes, and demonstrate a contractual pathway for the
19physical delivery of the fuel from the point of injection into
20a pipeline to the obligated party's delivery system. Gas
21utilities may not use reductions in emissions from sources
22unrelated to combustion of fossil gas at customers' homes and
23businesses in this State as emissions offsets or alternatives
24to reductions in the customers' own emissions.
25    Obligated parties must meet the heat decarbonization

 

 

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1standard with the lowest societal cost combination of
2resources, where societal cost includes infrastructure costs,
3utility return on capital, the social cost of greenhouse gas
4emissions and leakage, and the cost of health impacts
5attributable to pollution from a given measure.
 
6    (220 ILCS 5/24-104 new)
7    Sec. 24-104. Demonstrating customer emission reductions.
8    (a) Each obligated party's emissions in each year shall be
9calculated as:
10        (1) a weather-normalized estimate of emissions from
11    the actual amount of fossil methane consumed by its
12    customers in the year, plus;
13        (2) a weather-normalized estimate of emissions from
14    the leakage of methane, hydrogen, or other greenhouse
15    gases from front or behind-the-meter sources in a given
16    year, plus;
17        (3) a weather-normalized estimate of the magnitude of
18    remaining emissions resulting from switching from fossil
19    methane to lower-emitting liquid or gaseous fuels that are
20    delivered by the obligated party and directly consumed by
21    customers at the customers' homes or businesses in the
22    year. The magnitude of remaining emissions resulting from
23    switching from fossil methane to lower-emitting liquid or
24    gaseous fuels shall be calculated as (i) the magnitude of
25    emissions that would have occurred had fossil methane

 

 

SB3935- 74 -LRB103 40383 LNS 72670 b

1    continued to be consumed, multiplied by (ii) one minus the
2    percent reduction in life cycle emissions resulting from
3    the fuel substitution. Life cycle emission calculations
4    shall account for emissions associated with the entire
5    pathway of a fuel, including extraction, production,
6    transportation, distribution, and combustion of the fuel
7    by the consumer.
8    (b) Obligated parties shall calculate these figures
9annually, and electronically submit the figures in an easily
10accessible digital format, such as .PDF, .DOCX, or XLSX, to
11the Environmental Protection Agency, the Commission, the
12Governor, and the General Assembly.
13    (c) The Environmental Protection Agency shall post these
14figures for each utility on a website readily accessible to
15the public, within 30 days of obligated parties submitting the
16figures to the Agency, and shall maintain all previous years'
17records for similar public access.
18    (d) The Environmental Protection Agency shall also assess
19the emissions figures submitted by obligated parties to assess
20those parties' compliance or lack thereof with the heat
21decarbonization standard. If an obligated party does not
22comply, the obligated party shall be subject to enforcement
23mechanisms described in Section 24-108.
 
24    (220 ILCS 5/24-105 new)
25    Sec. 24-105. Tradable clean heat credits. A tradable clean

 

 

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1heat credit is a tradable, intangible commodity that
2represents an amount of greenhouse gas reduction, measured in
3tons of CO2, achieved by a gas utility from its customers in
4this State. An obligated party must achieve excess emission
5reductions, over and above its annual obligation, to sell
6tradable clean heat credits to another obligated party. The
7number of tradable clean heat credits sold by an obligated
8party in any year may not exceed the magnitude of the obligated
9party's excess emission reductions in that year.
 
10    (220 ILCS 5/24-106 new)
11    Sec. 24-106. Banking of emission reductions. An obligated
12party that achieves emission reductions in a given year that
13are in excess of its emission reduction obligation in that
14year may, in lieu of selling them to another obligated party,
15bank them. Emission reductions that are banked in a given year
16may be used to comply with emission reduction obligations in
17any of the following 3 years. Excess emission reductions may
18not be banked for more than 3 years or used as part of an
19obligated party's annual compliance more than 3 years after
20they were generated. No obligated party may achieve more than
2120% of any annual emission reduction obligation using banked
22emission reductions.
 
23    (220 ILCS 5/24-107 new)
24    Sec. 24-107. Equity in emission reductions.

 

 

SB3935- 76 -LRB103 40383 LNS 72670 b

1    (a) As used in this Section:
2    "Equity investment eligible communities" has the meaning
3given to that term in the Energy Transition Act.
4    "Income-qualified households" means those households whose
5annual incomes are at or below 80% of the area median income.
6    (b) Each obligated party must achieve real emission
7reductions from income-qualified households and environmental
8justice communities that are at least 5 percentage points
9greater than a proportional percentage of the annual gas
10consumption of such customers multiplied by each obligated
11party's annual emissions reduction requirements. At least half
12of the emission reductions from equity investment eligible
13communities shall be from measures that require capital
14investments in homes, have expected lives of at least 10
15years, and are estimated to lower annual energy bills.
16Emission reductions in equity investment eligible communities
17shall include codelivery and coordinated implementation of all
18relevant programs, measures, and complementary services. This
19includes, but is not limited to, pairing high efficiency
20electrification measures and programs with energy efficiency,
21building envelope improvements, the Illinois Solar for All
22Program, energy assistance, health and safety improvements,
23and federal incentives targeted to disadvantaged communities.
24Emission reductions from income-qualified and environmental
25justice communities, including efforts to codeliver and
26coordinate other programs and services, shall be reported on

 

 

SB3935- 77 -LRB103 40383 LNS 72670 b

1at least annually to the Commission. Tradable clean heat
2credits cannot be used to fulfill this requirement.
 
3    (220 ILCS 5/24-108 new)
4    Sec. 24-108. Enforcement.
5    (a) The Commission shall order an obligated party that
6fails to achieve its emission reduction obligation in a given
7year, including required amounts from income-qualified
8customers and front-line communities, to make a noncompliance
9payment. The noncompliance payment shall be equal to 3 times
10the estimated cost per unit of emission reduction incurred by
11all obligated parties in the State for the emission reductions
12the obligated parties achieved in the prior year.
13    (b) The Commission may waive the noncompliance payment if:
14        (1) it finds that the obligated party made a good
15    faith effort to achieve the required amount of emission
16    reduction and its failure to achieve the required
17    reduction resulted from market factors beyond its control,
18    that could not have reasonably been anticipated, and for
19    which the obligated party could not have planned; and
20        (2) it directs the obligated party to add the
21    difference between its obligated level of emission
22    reduction and actual emission reduction achieved to its
23    required emission reduction amount in subsequent years,
24    with the shortfall being made up in no more than 3 years.
25    (c) Payments received pursuant to the noncompliance

 

 

SB3935- 78 -LRB103 40383 LNS 72670 b

1penalty shall be directed to the Commission.
2    (d) The Commission shall use any noncompliance payments to
3contract with an independent third party to achieve emission
4reductions in the service territory of the noncomplying
5utility. The Commission shall prioritize achieving such
6reductions from weatherization or electrification of
7income-qualified households, to the extent that such
8reductions would lower annual energy bills.
 
9    (220 ILCS 5/24-109 new)
10    Sec. 24-109. 2050 Heat Decarbonization Pathways Study.
11    (a) In order to ensure sufficient planning for achieving
12this goal, the Commission shall complete a 2050 Heat
13Decarbonization Pathways Study by June 1, 2025, to examine
14feasible and practical pathways for investor-owned natural gas
15utilities to achieve the State's decarbonization requirement
16to be net zero by 2050, and the impacts of decarbonization on
17customers and the electric and natural gas utilities that
18serve the customers.
19    (b) The Commission shall host the study in collaboration
20with a technical working group whose members are appointed by
21the Governor and a consultant selected by the technical
22working group. The Commission and technical working group
23shall host a public process for stakeholder input regarding
24(i) the proposed scope of the study, (ii) initial draft
25assumptions for the study, (iii) draft study results, and (iv)

 

 

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1the draft study report. The technical working group shall
2consist of the following members:
3        (1) one representative of natural gas utilities;
4        (2) one representative of electric utilities;
5        (3) the chair of the Commission, or the chair's
6    designee;
7        (4) one representative of the Office of
8    Decarbonization Planning within the Illinois Commerce
9    Commission;
10        (5) one representative of the Environmental Protection
11    Agency;
12        (6) one representative of an environmental advocacy
13    group;
14        (7) one representative of a labor organization;
15        (8) one representative of commercial and industrial
16    gas customers;
17        (9) one representative of an organization that
18    represents residential ratepayer advocates;
19        (10) one representative of a group that represents
20    environmental justice or front-line communities;
21        (11) one representative of a group that represents
22    low-income residents;
23        (12) one representative of an organization that
24    focuses on access to and promotion of energy efficiency;
25    and
26        (13) one climate scientist from a national laboratory

 

 

SB3935- 80 -LRB103 40383 LNS 72670 b

1    or institution of higher education in the State.
2    (c) The 2050 Heat Decarbonization Pathways Study shall
3consider:
4        (1) future clean heating strategies for residential,
5    commercial, and industrial customers, including
6    electrification, geothermal heat and thermal networks, and
7    energy efficiency that would comply with each gas
8    utility's obligation under the heat decarbonization
9    standard;
10        (2) a comparative assessment of the marginal
11    greenhouse gas abatement cost curve of resources and
12    technologies, including electrification, that are
13    available for helping the utility meet its heat
14    decarbonization standard requirements;
15        (3) how a reduction in natural gas and other
16    utility-delivered gaseous fuels throughput will impact
17    customer gas and electric rates, considering various price
18    scenarios for electricity, natural gas, and other gaseous
19    fuels and reference medium and high electrification
20    scenarios;
21        (4) strategies to ensure equitable prioritization of
22    decarbonization measures and programs in income-qualified
23    and environmental justice communities while minimizing
24    energy transition costs on ratepayers, with an emphasis on
25    an accessible and affordable transition for low-income
26    residents, fixed-income residents, and residents within

 

 

SB3935- 81 -LRB103 40383 LNS 72670 b

1    equity investment eligible communities;
2        (5) an assessment of demand-side resource potential,
3    including load management, energy efficiency,
4    conservation, demand response, and fuel switching,
5    including electrification, available federal, State,
6    county, local, and private incentives, or financing
7    options related to building electrification and
8    efficiency;
9        (6) that the federal incentives analysis must include
10    ways that investor-owned utilities can leverage rebates
11    and tax incentives in the Inflation Reduction Act and
12    Infrastructure Investment and Jobs Act; in addition, the
13    assessment must include ways for the investor-owned
14    utilities to maximize low-income qualified households'
15    participation in the electrification incentive programs;
16        (7) the impacts of building and vehicle
17    electrification on the electric grid and strategies to
18    integrate gas and electric system planning and resource
19    optimization;
20        (8) specific natural gas end uses that may be suitable
21    for the use of alternative fuels, such as biomethane and
22    green hydrogen, and an assessment of the natural gas end
23    uses' commercial availability, social cost, and life cycle
24    emissions;
25        (9) a comparative evaluation of the cost of natural
26    gas purchasing strategies, storage options, delivery

 

 

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1    resources, and improvements in demand-side resources using
2    a consistent method to calculate cost-effectiveness; and
3        (10) an evaluation of employment metrics associated
4    with each alternative, including a projection of gas
5    distribution jobs affected by a given alternative and jobs
6    made available through the alternative, a description of
7    opportunities to transition any affected gas distribution
8    jobs to the alternative, and an explanation of how
9    employment impacts associated with each alternative could
10    affect equity investment eligible communities. Given its
11    findings, the study will create a Just Transition Plan,
12    inclusive of funding needs, for the current gas workforce.
13    (d) The Chair of the Commission, or the Chair's designee,
14will also serve as the Chair of the Technical Working Group.
 
15    (220 ILCS 5/24-110 new)
16    Sec. 24-110. Gas infrastructure planning.
17    (a) This Article creates the Office of Decarbonization
18Planning within the Commission to manage an iterative
19statewide heat decarbonization plan located within the
20Commission. On a timeline concurrent with the 2050 Heat
21Decarbonization Pathways Study, the Office of Decarbonization
22Planning shall adopt rules for implementing the heat
23decarbonization plans.
24    (b) As used in this Section:
25    "Environmental justice communities" has the meaning given

 

 

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1to that term in the Illinois Power Agency Act.
2    "Lowest reasonable cost" means the least-cost, least-risk
3mix of demand-side, supply-side, and electrification resources
4determined through a detailed and consistent analysis of a
5wide range of commercially available sources. At a minimum,
6this analysis must consider resource costs, resource
7availability, market-volatility risks, the risks imposed on
8ratepayers, resource effect on system operations, public
9policies regarding resource preferences, the cost of risks
10associated with environmental effects, including emissions of
11carbon dioxide, the ability to scale to meet 2050 goals, air
12pollution and resulting public health impacts, equity impacts,
13and the need for security of supply.
14    "Planned project" means any programmatic expense or
15related group of programmatic expenses with a defined scope of
16work and associated cost estimate that exceeds $1,000,000 in
172020 dollars or $500,000 in 2020 dollars for gas utilities
18with less than 50,000 full service customers, as adjusted
19annually for inflation.
20    "Resources" means both demand-side and supply-side
21resources, including, but not limited to, natural gas,
22biomethane, green hydrogen for industrial application,
23conservation, energy efficiency, demand response, and
24electrification.
25    (c) Each natural gas utility regulated by the Commission
26has the responsibility to meet system demand and public policy

 

 

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1requirements, including the State's heat decarbonization
2standard, with the lowest reasonable cost and most feasible
3mix of resources. In furtherance of that responsibility, each
4natural gas utility must develop a gas infrastructure plan for
5meeting the utility's heat decarbonization standard, including
65-year interim milestones from 2025 until 2050. The gas
7infrastructure plan must take into account the findings of the
82050 Heat Decarbonization Pathways Study.
9    (d) Natural gas utilities shall file biennial gas
10infrastructure plans that create alignment between gas utility
11distribution system investments and the utility's heat
12decarbonization standard obligations at lowest reasonable cost
13and that consider nonpipeline infrastructure projects that
14minimize costs over the long term.
15    (e) Before the filing of each biennial gas infrastructure
16plan, the Office of Decarbonization Planning shall contract
17for gas demand forecasts for each regulated gas utility in the
18State from an independent party. Gas utilities must reasonably
19provide accurate and timely system data to the independent
20contractor selected to conduct the forecasts. For each
21regulated gas utility in the State, the third party must
22produce forecasts for each customer class that consider slow,
23medium, and rapid acceleration of residential, commercial, and
24industrial electrification of the end uses that rely upon the
25direct combustion of natural gas in buildings. The forecasts
26must include, to the extent possible, the effects of updated

 

 

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1State and local building codes, changes to the number of gas
2utility customers, consumer responses to building
3electrification programs or incentives offered within a gas
4utility's service territory, the price elasticity of gas
5demand if rates increase due to reduced gas throughput and the
6impacts of commodity prices, and any other criteria as
7stipulated by the Commission. The forecasts shall be due to
8the Commission and the gas utilities at least 8 months prior to
9the filing of a gas infrastructure plan.
10    (f) A gas infrastructure plan must:
11        (1) cover the 20 years immediately following the
12    approval of the plan with a 5-year action plan of
13    investments;
14        (2) provide the estimated total cost and annual
15    incremental revenue requirements of the proposed action
16    plan, assuming both conventional depreciation and
17    accelerated depreciation, as applicable;
18        (3) use the various gas demand forecasts provided to
19    it under this article and include a range of possible
20    future scenarios and input sensitivities for the purpose
21    of testing the robustness of the utility's portfolio of
22    planned projects under various parameters;
23        (4) take into account the findings of the 2050 Heat
24    Decarbonization Pathways Study;
25        (5) demonstrate that the utility's infrastructure
26    investment plans align with obligations under the heat

 

 

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1    decarbonization standard;
2        (6) include a list of all proposed system expenditures
3    and investments, including an analysis of infrastructure
4    needs and detailed information on all planned projects
5    within the action plan;
6        (7) include the results of nonpipeline alternative
7    analyses conducted for all planned projects not necessary
8    to mitigate a near-term safety or reliability risk subject
9    to rules by the Commission that include, but are not
10    limited to:
11            (A) a consideration of both supply and demand-side
12        alternatives to traditional capital investments,
13        including gas demand response and electrification; and
14            (B) a cost-benefit analysis of the various options
15        that consider non-energy benefits and the societal
16        value, including health benefits, of reduced carbon
17        emissions and surface-level pollutants, particularly
18        in equity investment eligible communities;
19        (8) minimize rate impacts on customers, particularly
20    low-income households and households within equity
21    investment eligible communities;
22        (9) describe the methodology, criteria, and
23    assumptions used to develop the plan;
24        (10) include one or more system maps indicating
25    locations of individual planned projects, pressure
26    districts served by the individual project, locations of

 

 

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1    equity investment eligible communities, and any other
2    information as required by the Commission;
3        (11) provide a summary of stakeholder participation
4    and input from a public stakeholder process, and an
5    explanation of how input was incorporated into the plan,
6    including for all projects located within equity
7    investment eligible communities, a description of its
8    outreach to members of that community and findings from
9    those efforts; and
10        (12) requires the utility, to the extent that the
11    utility assumes the use of alternative fuels, such as
12    biomethane or green hydrogen, to meet its obligations
13    under the heat decarbonization standard, to demonstrate a
14    plan to procure firm supply and cost-effectiveness as
15    compared to nonfuel alternatives, inclusive of the costs
16    to retrofit all public and private infrastructure to
17    accommodate the fuels; green hydrogen may only be used for
18    industrial applications; hydrogen blending with methane
19    shall not be part of decarbonization plans.
20    (g) Not later than 12 months before the due date of a plan,
21the utility must provide a work plan for the Commission to
22review. The work plan must outline the content of the resource
23plan to be developed by the utility, the method for assessing
24potential resources, and the timing and extent of public
25participation. In addition, the Commission will hear comments
26on the plan at a minimum of 3 public hearings, held at times

 

 

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1and locations accessible and convenient to most people,
2including at least one in an equity investment eligible
3community, which are scheduled after the utility submits its
4plan for Commission review.
5    (h) No later than July 1, 2025, gas utilities in this State
6must file the first gas infrastructure plan application for
7approval. The Commission may approve, deny, or require
8modifications to the plan. Once approved, the plan must be
9incorporated into the utility's next general rate case using
10the approved ratemaking treatments. Deviations based on
11unforeseen circumstances must be justified and approved by the
12Commission.
13    (i) The Commission shall adopt new rules, amend existing
14rules, as necessary, and dedicate sufficient resources to
15implement this Section.
 
16    (220 ILCS 5/24-111 new)
17    Sec. 24-111. Study on gas utility financial incentive
18reform.
19    (a) The General Assembly finds that:
20        (1) Improving the alignment of gas utility customer
21    interests, State policy, and company interests is critical
22    to ensuring the expected decline in the use of natural gas
23    is done efficiently, safely, cost-effectively, and
24    transparently.
25        (2) There is urgency around addressing increasing

 

 

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1    threats from climate change and assisting communities that
2    have borne disproportionate impacts from climate change,
3    including air pollution, greenhouse gas emissions, and
4    energy burdens. Addressing this problem requires changes
5    to the energy used to power homes and businesses, and
6    changes to the gas utility business model under which
7    utilities in the State have traditionally functioned.
8        (3) Gas utility ratepayers may face upwardly spiraling
9    bills if steps are not taken to contain costs and
10    strategically prune parts of the gas distribution network.
11        (4) There is a need to encourage gas utilities to
12    innovate and find new lines of business to maintain
13    financial health as their main business, the provision of
14    fossil natural gas, winds down.
15        (5) The current regulatory framework has encouraged
16    infrastructure programs that have been plagued by
17    excessive cost overruns and delays.
18        (6) Discussions of performance incentive mechanisms
19    must always take into account the affordability of
20    customer rates and bills via stakeholder input.
21    The General Assembly, therefore, directs the Commission to
22reform the gas utility financial incentives structure to
23further specified goals and objectives related to the
24provision of clean, affordable heat and the advancement of an
25equitable distribution of benefits and reduction in harms in
26equity investment eligible communities and economically

 

 

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1disadvantaged communities.
2    (b) The Commission shall open an investigation to consider
3performance-based ratemaking tools and other financial
4mechanisms to advance the goals of affordability, equity,
5pollution reduction, energy system flexibility and
6electrification, reliability, safety, customer experience,
7cost-effectiveness, and the financial health of gas utilities
8as the gas utilities scale down their core business of
9delivering fuel-based energy through the distribution network.
10The investigation shall consider the following mechanisms, in
11addition to any others that the Commission or stakeholders
12deem necessary:
13        (1) accelerated and shortened depreciation schedules;
14        (2) performance metrics and benchmarking;
15        (3) revenue decoupling;
16        (4) cost-recovery options for nonpipeline
17    alternatives;
18        (5) electrification;
19        (6) networked geothermal systems;
20        (7) securitization;
21        (8) fuel-cost sharing;
22        (9) multiyear rate plans;
23        (10) performance incentive mechanisms;
24        (11) the equalization of capital and operational
25    expenditures;
26        (12) return on equity levels for different investment

 

 

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1    types;
2        (13) rate designs at the electric and gas nexus;
3        (14) low-income rates;
4        (15) luxury gas rates; and
5        (16) intersectoral cost recovery.
6    (c) The Commission must create a framework to evaluate
7each mechanism on its own and as part of a set of mechanisms to
8achieve the policy objectives determined by the General
9Assembly, stakeholders, and the general public after a minimum
10of 3 public hearings held at times and locations accessible
11and convenient to most people, including at least one in an
12equity investment eligible community.
13    (d) The investigation shall consist of a series of
14workshops facilitated by an independent consultant that
15encourages representation from diverse stakeholders, ensures
16equitable opportunities for participation, and does not
17require formal intervention or representation by an attorney.
18    (e) Any recommendations at the conclusion of the process
19must be shared with the General Assembly, and those
20recommendations already within the Commission's existing
21authorities must be adopted in the next applicable general
22rate case or relevant filing.
 
23    (220 ILCS 5/24-112 new)
24    Sec. 24-112. Reporting requirements.
25    (a) Each gas utility in the State must report data to the

 

 

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1Commission in January and July of each year that satisfy
2metrics that are set by the Commission to assess, on a system,
3segment, and neighborhood basis, the level of system safety
4and risk. The metrics must include, but are not limited to, the
5following:
6        (1) the overall average leak rate of replaced and
7    to-be-replaced mains and leak-prone pipes;
8        (2) the overall average leak rate using only
9    leak-prone pipe and current leaks;
10        (3) the neighborhood average leak rate using only
11    remaining leak-prone pipes and current leaks; and
12        (4) the neighborhood historic average leak rate using
13    leaks on leak-prone pipes for the past 2 years, on a
14    rolling basis, normalized for weather, and incorporating
15    all class 2 leaks except third-party damage.
16    (b) Gas utilities must include in the report an assessment
17of whether the actions taken in the prior 3 years produced the
18best value, in terms of risk reduction, for the amounts
19expended and a prediction of how planned projects will change
20risk levels on a neighborhood, segment, and system basis. The
21report filed by Peoples Gas Light and Coke Company must also
22include updates on steps taken to implement the
23recommendations of the Final Report on Phase One of an
24Investigation of Peoples Gas Light and Coke Company's AMRP.
25The Commission may require any other gas utility to adopt new
26and revised practices and processes by Peoples Gas Light and

 

 

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1Coke Company to ensure consistency across utilities.
2    (c) In its review of the data and metrics provided, the
3Commission may order adjustments in infrastructure replacement
4plans as it deems necessary to meet an acceptable level of risk
5at appropriate cost.
 
6    (220 ILCS 5/Art. XXV heading new)
7
ARTICLE XXV. STATE NAVIGATOR PROGRAM LAW

 
8    (220 ILCS 5/25-101 new)
9    Sec. 25-101. Short title. This Article may be cited as the
10State Navigator Program Law. References in this Article to
11"this Act" mean this Article.
 
12    (220 ILCS 5/25-102 new)
13    Sec. 25-102. Intent. The General Assembly finds that
14improving the energy efficiency of, and reducing the
15greenhouse gases from, residential buildings are critical to
16meeting the State's adopted climate goals in Public Act
17102-662.
18    The General Assembly recognizes that making information
19about energy efficiency and weatherization programs,
20electrification services, skilled contractors, and federal and
21State electrification incentives available to State residents
22will assist obligated parties to comply with the Clean Heat
23Standard set out in Article XXIII. Further, the General

 

 

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1Assembly recognizes that establishing a comprehensive
2statewide navigator program is essential to ensuring equitable
3access to electrification and energy efficient services. This
4program requires the Administrator to help State residents
5combine local, State, federal, and utility services related to
6electrification, energy efficiency, and the reduction of
7energy burdens to maximize electrification and energy
8efficiency in this State, and fill gaps as needed.
 
9    (220 ILCS 5/25-103 new)
10    Sec. 25-103. Definitions. As used in this Article:
11    "Administrator" means an entity, including, but not
12limited to, a nonprofit corporation or community-based
13organization. "Administrator" does not include an energy
14utility.
15    "Customers" means residents, businesses, and building
16owners.
17    "Department" means the Department of Commerce and Economic
18Opportunity.
19    "Electrification services" includes energy audits,
20assistance converting to on-site renewable energy, installing
21electric heat pumps and heat pump water heaters, electric
22appliance replacement, assistance with paperwork, arranging
23for financing, energy efficiency, weatherization, health and
24safety, and any related services and work.
25    "Equity investment eligible communities" has the meaning

 

 

SB3935- 95 -LRB103 40383 LNS 72670 b

1given to that term in Section 5-5 of the Energy Transition Act.
2    "Income-qualified households" means those whose annual
3incomes are at or below 80% of area median income.
4    "Navigator Working Group" means representatives appointed
5by the Department who represent members from either the
6electrician trades, construction industry, community
7organizations that work in energy burdened communities,
8community organizations who have experience with
9weatherization programs, members from equity investment
10eligible communities or the Illinois Commerce Commission or
11staff, and electric utilities and obligated parties as
12indicated in Article XXIII.
 
13    (220 ILCS 5/25-104 new)
14    Sec. 25-104. Creation of State navigator program.
15    (a) The Department may establish and oversee a statewide
16building energy upgrade navigator program. The purpose of the
17navigator program is to provide a statewide resource to assist
18building owners and building renters with accessing
19electrification services and energy efficiency services and
20programs, funding, and any other assistance that will result
21in aiding obligated parties' compliance with the Clean Heat
22Standard in Article XXIII. This includes, but is not limited
23to, utility programs, the weatherization assistance program,
24federal funding, rebates, health and safety funding, and other
25State and local funding.

 

 

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1    (b) The Department must coordinate and collaborate with
2the navigator working group on the design, administration, and
3implementation of the navigator program.
4    (c) The Department must ensure that all State residents
5have equitable access to the navigator program.
6    (d) The Department may consult with other programs,
7entities, and stakeholders as the Department determines to be
8appropriate on the design, administration, and implementation
9of the navigator program.
10    (e) Third-Party Administrator.
11        (1) The Department may contract out this program to
12    the Administrator. Subject to the following requirements:
13            (A) The Administrator must be selected through a
14        competitive process.
15            (B) The Administrator must have experience with
16        running statewide programs related to energy
17        efficiency, electrification services, or
18        weatherization programs.
19            (C) The Administrator must have experience working
20        with multifamily building owners and renters.
21            (D) The Administrator must have experience
22        assisting people with low incomes or energy burdened
23        households.
24            (E) The Administrator must have experience running
25        programs in both urban and rural parts of the State,
26        including covering a range of geographic and community

 

 

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1        diversity.
2        (2) If the Department decides to hire an
3    Administrator, they must enter into a contract within a
4    year of the effective date of this amendatory Act of the
5    103rd General Assembly.
6        (3) If the Department decides to hire an
7    Administrator, the contract expires after 4 years. After 4
8    years, the Department can renew the contract or select a
9    different Administrator. If the Administrator is not
10    meeting the requirements of the program and its
11    participants, the contract may be terminated early, and a
12    new Administrator may be hired.
13        (4) The Administrator shall have the same
14    responsibilities as the Department in creating,
15    overseeing, and implementing the programs in the navigator
16    program.
17    (f) The Department or Administrator of the naviga
tor
18program must:
19        (1) provide outreach and deliver energy services to:
20            (A) owner occupied and rental residences; and
21            (B) single-family and multifamily dwellings;
22        (2) provide coverage for all geographic regions in the
23    State;
24        (3) support energy efficient and emissions reductions
25    alternatives for all types of fuel used in buildings; the
26    Department or Administrator shall ensure funding is used

 

 

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1    for projects that include electrification and energy
2    efficiency work, and any related health and safety,
3    renewable energy, and whole building needs; funding shall
4    not be used for the installation of new natural gas or
5    other fossil fuel equipment;
6        (4) create strategies to ensure that the navigator
7    program prioritizes services in equity investment eligible
8    communities, one of which must include dedicating at least
9    40% of the total funding for the navigator program to
10    deploy electrification services, energy efficiency
11    measures, renewable energy, health and safety upgrades,
12    and related upgrades in equity investment eligible
13    communities, through;
14            (A) weatherization services, including air sealing
15        and insulation;
16            (B) health and safety improvements;
17            (C) purchase and installation of efficient
18        electric equipment;
19            (D) energy efficiency improvements, as needed;
20            (E) health and safety improvements that aid in
21        energy conservation;
22            (F) weatherization services;
23            (G) solar, storage, and renewable energy, as
24        needed; and
25            (G) workforce development programs;
26        (5) create a strategy for how the navigator program

 

 

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1    will equitably assist residents in accessing rebates and
2    incentives in the federal Inflation Reduction Act;
3        (6) create a strategy for how the navigator program
4    will assist customers in accessing State funding
5    opportunities available to access electrification
6    services;
7        (7) create a strategy to stack funding from all
8    available incentives and tax rebates together with the
9    goal of creating a 'one-stop shop' for all weatherization,
10    energy efficiency and electrification services;
11        (8) support the integrated implementation of all
12    relevant clean building programs funded in the State
13    budget, including, but not limited to:
14            (A) the Low Income Home Energy Assistance Program;
15        and
16            (B) the Illinois Home Weatherization Assistance
17        Program; and
18        (9) maintain a recommended contractor list.

 
19    (220 ILCS 5/25-105 new)
20    Sec. 25-105. Education materials and outreach. The
21Department or Administrator shall:
22        (1) create educational materials, which must include
23    information about all relevant funds and financial
24    assistance available from federal, State, local, and
25    energy utility programs, including, but not limited to,

 

 

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1    incentives, rebates, tax credits, grants, and loan
2    programs;
3        (2) contract with one or more community-based
4    organizations that demonstrate past success in working
5    with equity investment eligible communities in order to
6    create and distribute educational materials specifically
7    targeted at equity investment eligible communities;
8        (3) support and connect community-based organizations
9    in their region to training programs in areas of
10    electrification, energy efficiency, building envelope, and
11    installation technical assistance, and other relevant
12    areas; and
13        (4) ensure the education and outreach work is
14    coordinated with other State energy efficiency,
15    weatherization, electrification, and related programs and
16    providers.
 
17    (220 ILCS 5/25-106 new)
18    Sec. 25-106. Delivered services for equity investment
19eligible communities.
20    (a) The Department or Administrator must implement the
21navigator program for income-qualified households, which must
22include support navigating to existing programs or directly
23providing and filling gaps related to:
24        (1) energy audits to provide recommendations to
25    customers on a wide range of cost-effective energy and

 

 

SB3935- 101 -LRB103 40383 LNS 72670 b

1    health improvements;
2        (2) weatherization and energy efficiency services,
3    including, but not limited to,
     adding insulation, sealing
4    cracks, and making other changes that reduce heat loss,
5    save money on heating bills, and improve the health and
6    safety of buildings;
7        (3) appliance upgrades;
8        (4) electrification services, including installation
9    of air-sourced heat pumps, heat pump hot water heaters,
10    cooling, and electric panel upgrades and wiring;
11        (5) accessing qualified energy contractors; and
12        (6) securing financing.
13    (b) Nothing in this Section shall preclude the
14implementation of measures that, in addition to producing
15energy savings, increase electric load by adding building
16cooling systems where none existed before.
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    20 ILCS 730/5-25
4    220 ILCS 5/1-102from Ch. 111 2/3, par. 1-102
5    220 ILCS 5/1-103 new
6    220 ILCS 5/3-127 new
7    220 ILCS 5/8-101from Ch. 111 2/3, par. 8-101
8    220 ILCS 5/8-104B new
9    220 ILCS 5/9-228.5 new
10    220 ILCS 5/9-229
11    220 ILCS 5/9-235 new
12    220 ILCS 5/9-241from Ch. 111 2/3, par. 9-241
13    220 ILCS 5/9-254 new
14    220 ILCS 5/9-255 new
15    220 ILCS 5/16-111.10
16    220 ILCS 5/Art. XXIII
17    heading new
18    220 ILCS 5/23-101 new
19    220 ILCS 5/23-102 new
20    220 ILCS 5/23-103 new
21    220 ILCS 5/23-104 new
22    220 ILCS 5/23-105 new
23    220 ILCS 5/23-106 new
24    220 ILCS 5/23-107 new
25    220 ILCS 5/23-108 new

 

 

SB3935- 103 -LRB103 40383 LNS 72670 b

1    220 ILCS 5/23-109 new
2    220 ILCS 5/23-111 new
3    220 ILCS 5/23-112 new
4    220 ILCS 5/23-301 new
5    220 ILCS 5/Art. XXIV
6    heading new
7    220 ILCS 5/24-101 new
8    220 ILCS 5/24-102 new
9    220 ILCS 5/24-103 new
10    220 ILCS 5/24-104 new
11    220 ILCS 5/24-105 new
12    220 ILCS 5/24-106 new
13    220 ILCS 5/24-107 new
14    220 ILCS 5/24-108 new
15    220 ILCS 5/24-109 new
16    220 ILCS 5/24-110 new
17    220 ILCS 5/24-111 new
18    220 ILCS 5/24-112 new
19    220 ILCS 5/Art. XXV
20    heading new
21    220 ILCS 5/25-101 new
22    220 ILCS 5/25-102 new
23    220 ILCS 5/25-103 new
24    220 ILCS 5/25-104 new
25    220 ILCS 5/25-105 new
26    220 ILCS 5/25-106 new