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1 | AN ACT concerning utilities.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Power Agency Act is amended by | ||||||||||||||||||||||||
5 | changing Section 1-75 as follows: | ||||||||||||||||||||||||
6 | (20 ILCS 3855/1-75) | ||||||||||||||||||||||||
7 | Sec. 1-75. Planning and Procurement Bureau. The Planning | ||||||||||||||||||||||||
8 | and Procurement Bureau has the following duties and | ||||||||||||||||||||||||
9 | responsibilities: | ||||||||||||||||||||||||
10 | (a) The Planning and Procurement Bureau shall each | ||||||||||||||||||||||||
11 | year, beginning in 2008, develop procurement plans and | ||||||||||||||||||||||||
12 | conduct competitive procurement processes in accordance | ||||||||||||||||||||||||
13 | with the requirements of Section 16-111.5 of the Public | ||||||||||||||||||||||||
14 | Utilities Act for the eligible retail customers of electric | ||||||||||||||||||||||||
15 | utilities that on December 31, 2005 provided electric | ||||||||||||||||||||||||
16 | service to at least 100,000 customers in Illinois. For the | ||||||||||||||||||||||||
17 | purposes of this Section, the term "eligible retail | ||||||||||||||||||||||||
18 | customers" has the same definition as found in Section | ||||||||||||||||||||||||
19 | 16-111.5(a) of the Public Utilities Act. | ||||||||||||||||||||||||
20 | (1) The Agency shall each year, beginning in 2008, | ||||||||||||||||||||||||
21 | as needed, issue a request for qualifications for | ||||||||||||||||||||||||
22 | experts or expert consulting firms to develop the | ||||||||||||||||||||||||
23 | procurement plans in accordance with Section 16-111.5 |
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1 | of the Public Utilities Act. In order to qualify an | ||||||
2 | expert or expert consulting firm must have: | ||||||
3 | (A) direct previous experience assembling | ||||||
4 | large-scale power supply plans or portfolios for | ||||||
5 | end-use customers; | ||||||
6 | (B) an advanced degree in economics, | ||||||
7 | mathematics, engineering, risk management, or a | ||||||
8 | related area of study; | ||||||
9 | (C) 10 years of experience in the electricity | ||||||
10 | sector, including managing supply risk; | ||||||
11 | (D) expertise in wholesale electricity market | ||||||
12 | rules, including those established by the Federal | ||||||
13 | Energy Regulatory Commission and regional | ||||||
14 | transmission organizations; | ||||||
15 | (E) expertise in credit protocols and | ||||||
16 | familiarity with contract protocols; | ||||||
17 | (F) adequate resources to perform and fulfill | ||||||
18 | the required functions and responsibilities; and | ||||||
19 | (G) the absence of a conflict of interest and | ||||||
20 | inappropriate bias for or against potential | ||||||
21 | bidders or the affected electric utilities. | ||||||
22 | (2) The Agency shall each year, as needed, issue a | ||||||
23 | request for qualifications for a procurement | ||||||
24 | administrator to conduct the competitive procurement | ||||||
25 | processes in accordance with Section 16-111.5 of the | ||||||
26 | Public Utilities Act. In order to qualify an expert or |
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1 | expert consulting firm must have: | ||||||
2 | (A) direct previous experience administering a | ||||||
3 | large-scale competitive procurement process; | ||||||
4 | (B) an advanced degree in economics, | ||||||
5 | mathematics, engineering, or a related area of | ||||||
6 | study; | ||||||
7 | (C) 10 years of experience in the electricity | ||||||
8 | sector, including risk management experience; | ||||||
9 | (D) expertise in wholesale electricity market | ||||||
10 | rules, including those established by the Federal | ||||||
11 | Energy Regulatory Commission and regional | ||||||
12 | transmission organizations; | ||||||
13 | (E) expertise in credit and contract | ||||||
14 | protocols; | ||||||
15 | (F) adequate resources to perform and fulfill | ||||||
16 | the required functions and responsibilities; and | ||||||
17 | (G) the absence of a conflict of interest and | ||||||
18 | inappropriate bias for or against potential | ||||||
19 | bidders or the affected electric utilities. | ||||||
20 | (3) The Agency shall provide affected utilities | ||||||
21 | and other interested parties with the lists of | ||||||
22 | qualified experts or expert consulting firms | ||||||
23 | identified through the request for qualifications | ||||||
24 | processes that are under consideration to develop the | ||||||
25 | procurement plans and to serve as the procurement | ||||||
26 | administrator. The Agency shall also provide each |
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1 | qualified expert's or expert consulting firm's | ||||||
2 | response to the request for qualifications. All | ||||||
3 | information provided under this subparagraph shall | ||||||
4 | also be provided to the Commission. The Agency may | ||||||
5 | provide by rule for fees associated with supplying the | ||||||
6 | information to utilities and other interested parties. | ||||||
7 | These parties shall, within 5 business days, notify the | ||||||
8 | Agency in writing if they object to any experts or | ||||||
9 | expert consulting firms on the lists. Objections shall | ||||||
10 | be based on: | ||||||
11 | (A) failure to satisfy qualification criteria; | ||||||
12 | (B) identification of a conflict of interest; | ||||||
13 | or | ||||||
14 | (C) evidence of inappropriate bias for or | ||||||
15 | against potential bidders or the affected | ||||||
16 | utilities. | ||||||
17 | The Agency shall remove experts or expert | ||||||
18 | consulting firms from the lists within 10 days if there | ||||||
19 | is a reasonable basis for an objection and provide the | ||||||
20 | updated lists to the affected utilities and other | ||||||
21 | interested parties. If the Agency fails to remove an | ||||||
22 | expert or expert consulting firm from a list, an | ||||||
23 | objecting party may seek review by the Commission | ||||||
24 | within 5 days thereafter by filing a petition, and the | ||||||
25 | Commission shall render a ruling on the petition within | ||||||
26 | 10 days. There is no right of appeal of the |
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1 | Commission's ruling. | ||||||
2 | (4) The Agency shall issue requests for proposals | ||||||
3 | to the qualified experts or expert consulting firms to | ||||||
4 | develop a procurement plan for the affected utilities | ||||||
5 | and to serve as procurement administrator. | ||||||
6 | (5) The Agency shall select an expert or expert | ||||||
7 | consulting firm to develop procurement plans based on | ||||||
8 | the proposals submitted and shall award one-year | ||||||
9 | contracts to those selected with an option for the | ||||||
10 | Agency for a one-year renewal. | ||||||
11 | (6) The Agency shall select an expert or expert | ||||||
12 | consulting firm, with approval of the Commission, to | ||||||
13 | serve as procurement administrator based on the | ||||||
14 | proposals submitted. If the Commission rejects, within | ||||||
15 | 5 days, the Agency's selection, the Agency shall submit | ||||||
16 | another recommendation within 3 days based on the | ||||||
17 | proposals submitted. The Agency shall award a one-year | ||||||
18 | contract to the expert or expert consulting firm so | ||||||
19 | selected with Commission approval with an option for | ||||||
20 | the Agency for a one-year renewal. | ||||||
21 | (b) The experts or expert consulting firms retained by | ||||||
22 | the Agency shall, as appropriate, prepare procurement | ||||||
23 | plans, and conduct a competitive procurement process as | ||||||
24 | prescribed in Section 16-111.5 of the Public Utilities Act, | ||||||
25 | to ensure adequate, reliable, affordable, efficient, and | ||||||
26 | environmentally sustainable electric service at the lowest |
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1 | total cost over time, taking into account any benefits of | ||||||
2 | price stability, for eligible retail customers of electric | ||||||
3 | utilities that on December 31, 2005 provided electric | ||||||
4 | service to at least 100,000 customers in the State of | ||||||
5 | Illinois. | ||||||
6 | (c) Renewable portfolio standard. | ||||||
7 | (1) The procurement plans shall include | ||||||
8 | cost-effective renewable energy resources. A minimum | ||||||
9 | percentage of each utility's total supply to serve the | ||||||
10 | load of eligible retail customers, as defined in | ||||||
11 | Section 16-111.5(a) of the Public Utilities Act, | ||||||
12 | procured for each of the following years shall be | ||||||
13 | generated from cost-effective renewable energy | ||||||
14 | resources: at least 2% by June 1, 2008; at least 4% by | ||||||
15 | June 1, 2009; at least 5% by June 1, 2010; at least 6% | ||||||
16 | by June 1, 2011; at least 7% by June 1, 2012; at least | ||||||
17 | 8% by June 1, 2013; at least 9% by June 1, 2014; at | ||||||
18 | least 10% by June 1, 2015; and increasing by at least | ||||||
19 | 1.5% each year thereafter to at least 25% by June 1, | ||||||
20 | 2025. To the extent that it is available, at least 75% | ||||||
21 | of the renewable energy resources used to meet these | ||||||
22 | standards shall come from wind generation and, | ||||||
23 | beginning on June 1, 2011, at least the following | ||||||
24 | percentages of the renewable energy resources used to | ||||||
25 | meet these standards shall come from photovoltaics on | ||||||
26 | the following schedule: 0.5% by June 1, 2012, 1.5% by |
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1 | June 1, 2013; 3% by June 1, 2014; and 6% by June 1, | ||||||
2 | 2015 and thereafter. For purposes of this subsection | ||||||
3 | (c), "cost-effective" means that the costs of | ||||||
4 | procuring renewable energy resources do not cause the | ||||||
5 | limit stated in paragraph (2) of this subsection (c) to | ||||||
6 | be exceeded and do not exceed benchmarks based on | ||||||
7 | market prices for renewable energy resources in the | ||||||
8 | region, which shall be developed by the procurement | ||||||
9 | administrator, in consultation with the Commission | ||||||
10 | staff, Agency staff, and the procurement monitor and | ||||||
11 | shall be subject to Commission review and approval. | ||||||
12 | (2) For purposes of this subsection (c), the | ||||||
13 | required procurement of cost-effective renewable | ||||||
14 | energy resources for a particular year shall be | ||||||
15 | measured as a percentage of the actual amount of | ||||||
16 | electricity (megawatt-hours) supplied by the electric | ||||||
17 | utility to eligible retail customers in the planning | ||||||
18 | year ending immediately prior to the procurement. For | ||||||
19 | purposes of this subsection (c), the amount paid per | ||||||
20 | kilowatthour means the total amount paid for electric | ||||||
21 | service expressed on a per kilowatthour basis. For | ||||||
22 | purposes of this subsection (c), the total amount paid | ||||||
23 | for electric service includes without limitation | ||||||
24 | amounts paid for supply, transmission, distribution, | ||||||
25 | surcharges, and add-on taxes. | ||||||
26 | Notwithstanding the requirements of this |
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1 | subsection (c), the total of renewable energy | ||||||
2 | resources procured pursuant to the procurement plan | ||||||
3 | for any single year shall be reduced by an amount | ||||||
4 | necessary to limit the annual estimated average net | ||||||
5 | increase due to the costs of these resources included | ||||||
6 | in the amounts paid by eligible retail customers in | ||||||
7 | connection with electric service to: | ||||||
8 | (A) in 2008, no more than 0.5% of the amount | ||||||
9 | paid per kilowatthour by those customers during | ||||||
10 | the year ending May 31, 2007; | ||||||
11 | (B) in 2009, the greater of an additional 0.5% | ||||||
12 | of the amount paid per kilowatthour by those | ||||||
13 | customers during the year ending May 31, 2008 or 1% | ||||||
14 | of the amount paid per kilowatthour by those | ||||||
15 | customers during the year ending May 31, 2007; | ||||||
16 | (C) in 2010, the greater of an additional 0.5% | ||||||
17 | of the amount paid per kilowatthour by those | ||||||
18 | customers during the year ending May 31, 2009 or | ||||||
19 | 1.5% of the amount paid per kilowatthour by those | ||||||
20 | customers during the year ending May 31, 2007; | ||||||
21 | (D) in 2011, the greater of an additional 0.5% | ||||||
22 | of the amount paid per kilowatthour by those | ||||||
23 | customers during the year ending May 31, 2010 or 2% | ||||||
24 | of the amount paid per kilowatthour by those | ||||||
25 | customers during the year ending May 31, 2007; and | ||||||
26 | (E) thereafter, the amount of renewable energy |
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1 | resources procured pursuant to the procurement | ||||||
2 | plan for any single year shall be reduced by an | ||||||
3 | amount necessary to limit the estimated average | ||||||
4 | net increase due to the cost of these resources | ||||||
5 | included in the amounts paid by eligible retail | ||||||
6 | customers in connection with electric service to | ||||||
7 | no more than the greater of 2.015% of the amount | ||||||
8 | paid per kilowatthour by those customers during | ||||||
9 | the year ending May 31, 2007 or the incremental | ||||||
10 | amount per kilowatthour paid for these resources | ||||||
11 | in 2011. | ||||||
12 | No later than June 30, 2011, the Commission shall | ||||||
13 | review the limitation on the amount of renewable energy | ||||||
14 | resources procured pursuant to this subsection (c) and | ||||||
15 | report to the General Assembly its findings as to | ||||||
16 | whether that limitation unduly constrains the | ||||||
17 | procurement of cost-effective renewable energy | ||||||
18 | resources. | ||||||
19 | (3) Through June 1, 2016 2011 , renewable energy | ||||||
20 | resources shall be counted for the purpose of meeting | ||||||
21 | the renewable energy standards set forth in paragraph | ||||||
22 | (1) of this subsection (c) only if they are generated | ||||||
23 | from facilities located in the State, provided that | ||||||
24 | cost-effective renewable energy resources are | ||||||
25 | available from those facilities. If those | ||||||
26 | cost-effective resources are not available in |
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1 | Illinois, they shall be procured in states that adjoin | ||||||
2 | Illinois and may be counted towards compliance. If | ||||||
3 | those cost-effective resources are not available in | ||||||
4 | Illinois or in states that adjoin Illinois, they shall | ||||||
5 | be purchased elsewhere and shall be counted towards | ||||||
6 | compliance. After June 1, 2016 2011 , cost-effective | ||||||
7 | renewable energy resources located in Illinois and in | ||||||
8 | states that adjoin Illinois may be counted towards | ||||||
9 | compliance with the standards set forth in paragraph | ||||||
10 | (1) of this subsection (c). If those cost-effective | ||||||
11 | resources are not available in Illinois or in states | ||||||
12 | that adjoin Illinois, they shall be purchased | ||||||
13 | elsewhere and shall be counted towards compliance. | ||||||
14 | (4) The electric utility shall retire all | ||||||
15 | renewable energy credits used to comply with the | ||||||
16 | standard. | ||||||
17 | (5) Beginning with the year commencing June 1, | ||||||
18 | 2010, an electric utility subject to this subsection | ||||||
19 | (c) shall apply the lesser of the maximum alternative | ||||||
20 | compliance payment rate or the most recent estimated | ||||||
21 | alternative compliance payment rate for its service | ||||||
22 | territory for the corresponding compliance period, | ||||||
23 | established pursuant to subsection (d) of Section | ||||||
24 | 16-115D of the Public Utilities Act to its retail | ||||||
25 | customers that take service pursuant to the electric | ||||||
26 | utility's hourly pricing tariff or tariffs. The |
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1 | electric utility shall retain all amounts collected as | ||||||
2 | a result of the application of the alternative | ||||||
3 | compliance payment rate or rates to such customers, | ||||||
4 | and, beginning in 2011, the utility shall include in | ||||||
5 | the information provided under item (1) of subsection | ||||||
6 | (d) of Section 16-111.5 of the Public Utilities Act the | ||||||
7 | amounts collected under the alternative compliance | ||||||
8 | payment rate or rates for the prior year ending May 31. | ||||||
9 | Notwithstanding any limitation on the procurement of | ||||||
10 | renewable energy resources imposed by item (2) of this | ||||||
11 | subsection (c), the Agency shall increase its spending | ||||||
12 | on the purchase of renewable energy resources to be | ||||||
13 | procured by the electric utility for the next plan year | ||||||
14 | by an amount equal to the amounts collected by the | ||||||
15 | utility under the alternative compliance payment rate | ||||||
16 | or rates in the prior year ending May 31. | ||||||
17 | (d) Clean coal portfolio standard. | ||||||
18 | (1) The procurement plans shall include electricity | ||||||
19 | generated using clean coal. Each utility shall enter into | ||||||
20 | one or more sourcing agreements with the initial clean coal | ||||||
21 | facility, as provided in paragraph (3) of this subsection | ||||||
22 | (d), covering electricity generated by the initial clean | ||||||
23 | coal facility representing at least 5% of each utility's | ||||||
24 | total supply to serve the load of eligible retail customers | ||||||
25 | in 2015 and each year thereafter, as described in paragraph | ||||||
26 | (3) of this subsection (d), subject to the limits specified |
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1 | in paragraph (2) of this subsection (d). It is the goal of | ||||||
2 | the State that by January 1, 2025, 25% of the electricity | ||||||
3 | used in the State shall be generated by cost-effective | ||||||
4 | clean coal facilities. For purposes of this subsection (d), | ||||||
5 | "cost-effective" means that the expenditures pursuant to | ||||||
6 | such sourcing agreements do not cause the limit stated in | ||||||
7 | paragraph (2) of this subsection (d) to be exceeded and do | ||||||
8 | not exceed cost-based benchmarks, which shall be developed | ||||||
9 | to assess all expenditures pursuant to such sourcing | ||||||
10 | agreements covering electricity generated by clean coal | ||||||
11 | facilities, other than the initial clean coal facility, by | ||||||
12 | the procurement administrator, in consultation with the | ||||||
13 | Commission staff, Agency staff, and the procurement | ||||||
14 | monitor and shall be subject to Commission review and | ||||||
15 | approval. | ||||||
16 | (A) A utility party to a sourcing agreement shall | ||||||
17 | immediately retire any emission credits that it | ||||||
18 | receives in connection with the electricity covered by | ||||||
19 | such agreement. | ||||||
20 | (B) Utilities shall maintain adequate records | ||||||
21 | documenting the purchases under the sourcing agreement | ||||||
22 | to comply with this subsection (d) and shall file an | ||||||
23 | accounting with the load forecast that must be filed | ||||||
24 | with the Agency by July 15 of each year, in accordance | ||||||
25 | with subsection (d) of Section 16-111.5 of the Public | ||||||
26 | Utilities Act. |
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1 | (C) A utility shall be deemed to have complied with | ||||||
2 | the clean coal portfolio standard specified in this | ||||||
3 | subsection (d) if the utility enters into a sourcing | ||||||
4 | agreement as required by this subsection (d). | ||||||
5 | (2) For purposes of this subsection (d), the required | ||||||
6 | execution of sourcing agreements with the initial clean | ||||||
7 | coal facility for a particular year shall be measured as a | ||||||
8 | percentage of the actual amount of electricity | ||||||
9 | (megawatt-hours) supplied by the electric utility to | ||||||
10 | eligible retail customers in the planning year ending | ||||||
11 | immediately prior to the agreement's execution. For | ||||||
12 | purposes of this subsection (d), the amount paid per | ||||||
13 | kilowatthour means the total amount paid for electric | ||||||
14 | service expressed on a per kilowatthour basis. For purposes | ||||||
15 | of this subsection (d), the total amount paid for electric | ||||||
16 | service includes without limitation amounts paid for | ||||||
17 | supply, transmission, distribution, surcharges and add-on | ||||||
18 | taxes. | ||||||
19 | Notwithstanding the requirements of this subsection | ||||||
20 | (d), the total amount paid under sourcing agreements with | ||||||
21 | clean coal facilities pursuant to the procurement plan for | ||||||
22 | any given year shall be reduced by an amount necessary to | ||||||
23 | limit the annual estimated average net increase due to the | ||||||
24 | costs of these resources included in the amounts paid by | ||||||
25 | eligible retail customers in connection with electric | ||||||
26 | service to: |
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1 | (A) in 2010, no more than 0.5% of the amount | ||||||
2 | paid per kilowatthour by those customers during | ||||||
3 | the year ending May 31, 2009; | ||||||
4 | (B) in 2011, the greater of an additional 0.5% | ||||||
5 | of the amount paid per kilowatthour by those | ||||||
6 | customers during the year ending May 31, 2010 or 1% | ||||||
7 | of the amount paid per kilowatthour by those | ||||||
8 | customers during the year ending May 31, 2009; | ||||||
9 | (C) in 2012, the greater of an additional 0.5% | ||||||
10 | of the amount paid per kilowatthour by those | ||||||
11 | customers during the year ending May 31, 2011 or | ||||||
12 | 1.5% of the amount paid per kilowatthour by those | ||||||
13 | customers during the year ending May 31, 2009; | ||||||
14 | (D) in 2013, the greater of an additional 0.5% | ||||||
15 | of the amount paid per kilowatthour by those | ||||||
16 | customers during the year ending May 31, 2012 or 2% | ||||||
17 | of the amount paid per kilowatthour by those | ||||||
18 | customers during the year ending May 31, 2009; and | ||||||
19 | (E) thereafter, the total amount paid under | ||||||
20 | sourcing agreements with clean coal facilities | ||||||
21 | pursuant to the procurement plan for any single | ||||||
22 | year shall be reduced by an amount necessary to | ||||||
23 | limit the estimated average net increase due to the | ||||||
24 | cost of these resources included in the amounts | ||||||
25 | paid by eligible retail customers in connection | ||||||
26 | with electric service to no more than the greater |
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1 | of (i) 2.015% of the amount paid per kilowatthour | ||||||
2 | by those customers during the year ending May 31, | ||||||
3 | 2009 or (ii) the incremental amount per | ||||||
4 | kilowatthour paid for these resources in 2013. | ||||||
5 | These requirements may be altered only as provided | ||||||
6 | by statute.
No later than June 30, 2015, the | ||||||
7 | Commission shall review the limitation on the | ||||||
8 | total amount paid under sourcing agreements, if | ||||||
9 | any, with clean coal facilities pursuant to this | ||||||
10 | subsection (d) and report to the General Assembly | ||||||
11 | its findings as to whether that limitation unduly | ||||||
12 | constrains the amount of electricity generated by | ||||||
13 | cost-effective clean coal facilities that is | ||||||
14 | covered by sourcing agreements. | ||||||
15 | (3) Initial clean coal facility. In order to promote | ||||||
16 | development of clean coal facilities in Illinois, each | ||||||
17 | electric utility subject to this Section shall execute a | ||||||
18 | sourcing agreement to source electricity from a proposed | ||||||
19 | clean coal facility in Illinois (the "initial clean coal | ||||||
20 | facility") that will have a nameplate capacity of at least | ||||||
21 | 500 MW when commercial operation commences, that has a | ||||||
22 | final Clean Air Act permit on the effective date of this | ||||||
23 | amendatory Act of the 95th General Assembly, and that will | ||||||
24 | meet the definition of clean coal facility in Section 1-10 | ||||||
25 | of this Act when commercial operation commences. The | ||||||
26 | sourcing agreements with this initial clean coal facility |
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1 | shall be subject to both approval of the initial clean coal | ||||||
2 | facility by the General Assembly and satisfaction of the | ||||||
3 | requirements of paragraph (4) of this subsection (d) and | ||||||
4 | shall be executed within 90 days after any such approval by | ||||||
5 | the General Assembly. The Agency and the Commission shall | ||||||
6 | have authority to inspect all books and records associated | ||||||
7 | with the initial clean coal facility during the term of | ||||||
8 | such a sourcing agreement. A utility's sourcing agreement | ||||||
9 | for electricity produced by the initial clean coal facility | ||||||
10 | shall include: | ||||||
11 | (A) a formula contractual price (the "contract | ||||||
12 | price") approved pursuant to paragraph (4) of this | ||||||
13 | subsection (d), which shall: | ||||||
14 | (i) be determined using a cost of service | ||||||
15 | methodology employing either a level or deferred | ||||||
16 | capital recovery component, based on a capital | ||||||
17 | structure consisting of 45% equity and 55% debt, | ||||||
18 | and a return on equity as may be approved by the | ||||||
19 | Federal Energy Regulatory Commission, which in any | ||||||
20 | case may not exceed the lower of 11.5% or the rate | ||||||
21 | of return approved by the General Assembly | ||||||
22 | pursuant to paragraph (4) of this subsection (d); | ||||||
23 | and | ||||||
24 | (ii) provide that all miscellaneous net | ||||||
25 | revenue, including but not limited to net revenue | ||||||
26 | from the sale of emission allowances, if any, |
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1 | substitute natural gas, if any, grants or other | ||||||
2 | support provided by the State of Illinois or the | ||||||
3 | United States Government, firm transmission | ||||||
4 | rights, if any, by-products produced by the | ||||||
5 | facility, energy or capacity derived from the | ||||||
6 | facility and not covered by a sourcing agreement | ||||||
7 | pursuant to paragraph (3) of this subsection (d) or | ||||||
8 | item (5) of subsection (d) of Section 16-115 of the | ||||||
9 | Public Utilities Act, whether generated from the | ||||||
10 | synthesis gas derived from coal, from SNG, or from | ||||||
11 | natural gas, shall be credited against the revenue | ||||||
12 | requirement for this initial clean coal facility; | ||||||
13 | (B) power purchase provisions, which shall: | ||||||
14 | (i) provide that the utility party to such | ||||||
15 | sourcing agreement shall pay the contract price | ||||||
16 | for electricity delivered under such sourcing | ||||||
17 | agreement; | ||||||
18 | (ii) require delivery of electricity to the | ||||||
19 | regional transmission organization market of the | ||||||
20 | utility that is party to such sourcing agreement; | ||||||
21 | (iii) require the utility party to such | ||||||
22 | sourcing agreement to buy from the initial clean | ||||||
23 | coal facility in each hour an amount of energy | ||||||
24 | equal to all clean coal energy made available from | ||||||
25 | the initial clean coal facility during such hour | ||||||
26 | times a fraction, the numerator of which is such |
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| |||||||
1 | utility's retail market sales of electricity | ||||||
2 | (expressed in kilowatthours sold) in the State | ||||||
3 | during the prior calendar month and the | ||||||
4 | denominator of which is the total retail market | ||||||
5 | sales of electricity (expressed in kilowatthours | ||||||
6 | sold) in the State by utilities during such prior | ||||||
7 | month and the sales of electricity (expressed in | ||||||
8 | kilowatthours sold) in the State by alternative | ||||||
9 | retail electric suppliers during such prior month | ||||||
10 | that are subject to the requirements of this | ||||||
11 | subsection (d) and paragraph (5) of subsection (d) | ||||||
12 | of Section 16-115 of the Public Utilities Act, | ||||||
13 | provided that the amount purchased by the utility | ||||||
14 | in any year will be limited by paragraph (2) of | ||||||
15 | this subsection (d); and | ||||||
16 | (iv) be considered pre-existing contracts in | ||||||
17 | such utility's procurement plans for eligible | ||||||
18 | retail customers; | ||||||
19 | (C) contract for differences provisions, which | ||||||
20 | shall: | ||||||
21 | (i) require the utility party to such sourcing | ||||||
22 | agreement to contract with the initial clean coal | ||||||
23 | facility in each hour with respect to an amount of | ||||||
24 | energy equal to all clean coal energy made | ||||||
25 | available from the initial clean coal facility | ||||||
26 | during such hour times a fraction, the numerator of |
| |||||||
| |||||||
1 | which is such utility's retail market sales of | ||||||
2 | electricity (expressed in kilowatthours sold) in | ||||||
3 | the utility's service territory in the State | ||||||
4 | during the prior calendar month and the | ||||||
5 | denominator of which is the total retail market | ||||||
6 | sales of electricity (expressed in kilowatthours | ||||||
7 | sold) in the State by utilities during such prior | ||||||
8 | month and the sales of electricity (expressed in | ||||||
9 | kilowatthours sold) in the State by alternative | ||||||
10 | retail electric suppliers during such prior month | ||||||
11 | that are subject to the requirements of this | ||||||
12 | subsection (d) and paragraph (5) of subsection (d) | ||||||
13 | of Section 16-115 of the Public Utilities Act, | ||||||
14 | provided that the amount paid by the utility in any | ||||||
15 | year will be limited by paragraph (2) of this | ||||||
16 | subsection (d); | ||||||
17 | (ii) provide that the utility's payment | ||||||
18 | obligation in respect of the quantity of | ||||||
19 | electricity determined pursuant to the preceding | ||||||
20 | clause (i) shall be limited to an amount equal to | ||||||
21 | (1) the difference between the contract price | ||||||
22 | determined pursuant to subparagraph (A) of | ||||||
23 | paragraph (3) of this subsection (d) and the | ||||||
24 | day-ahead price for electricity delivered to the | ||||||
25 | regional transmission organization market of the | ||||||
26 | utility that is party to such sourcing agreement |
| |||||||
| |||||||
1 | (or any successor delivery point at which such | ||||||
2 | utility's supply obligations are financially | ||||||
3 | settled on an hourly basis) (the "reference | ||||||
4 | price") on the day preceding the day on which the | ||||||
5 | electricity is delivered to the initial clean coal | ||||||
6 | facility busbar, multiplied by (2) the quantity of | ||||||
7 | electricity determined pursuant to the preceding | ||||||
8 | clause (i); and | ||||||
9 | (iii) not require the utility to take physical | ||||||
10 | delivery of the electricity produced by the | ||||||
11 | facility; | ||||||
12 | (D) general provisions, which shall: | ||||||
13 | (i) specify a term of no more than 30 years, | ||||||
14 | commencing on the commercial operation date of the | ||||||
15 | facility; | ||||||
16 | (ii) provide that utilities shall maintain | ||||||
17 | adequate records documenting purchases under the | ||||||
18 | sourcing agreements entered into to comply with | ||||||
19 | this subsection (d) and shall file an accounting | ||||||
20 | with the load forecast that must be filed with the | ||||||
21 | Agency by July 15 of each year, in accordance with | ||||||
22 | subsection (d) of Section 16-111.5 of the Public | ||||||
23 | Utilities Act. | ||||||
24 | (iii) provide that all costs associated with | ||||||
25 | the initial clean coal facility will be | ||||||
26 | periodically reported to the Federal Energy |
| |||||||
| |||||||
1 | Regulatory Commission and to purchasers in | ||||||
2 | accordance with applicable laws governing | ||||||
3 | cost-based wholesale power contracts; | ||||||
4 | (iv) permit the Illinois Power Agency to | ||||||
5 | assume ownership of the initial clean coal | ||||||
6 | facility, without monetary consideration and | ||||||
7 | otherwise on reasonable terms acceptable to the | ||||||
8 | Agency, if the Agency so requests no less than 3 | ||||||
9 | years prior to the end of the stated contract term; | ||||||
10 | (v) require the owner of the initial clean coal | ||||||
11 | facility to provide documentation to the | ||||||
12 | Commission each year, starting in the facility's | ||||||
13 | first year of commercial operation, accurately | ||||||
14 | reporting the quantity of carbon emissions from | ||||||
15 | the facility that have been captured and | ||||||
16 | sequestered and report any quantities of carbon | ||||||
17 | released from the site or sites at which carbon | ||||||
18 | emissions were sequestered in prior years, based | ||||||
19 | on continuous monitoring of such sites. If, in any | ||||||
20 | year after the first year of commercial operation, | ||||||
21 | the owner of the facility fails to demonstrate that | ||||||
22 | the initial clean coal facility captured and | ||||||
23 | sequestered at least 50% of the total carbon | ||||||
24 | emissions that the facility would otherwise emit | ||||||
25 | or that sequestration of emissions from prior | ||||||
26 | years has failed, resulting in the release of |
| |||||||
| |||||||
1 | carbon dioxide into the atmosphere, the owner of | ||||||
2 | the facility must offset excess emissions. Any | ||||||
3 | such carbon offsets must be permanent, additional, | ||||||
4 | verifiable, real, located within the State of | ||||||
5 | Illinois, and legally and practicably enforceable. | ||||||
6 | The cost of such offsets for the facility that are | ||||||
7 | not recoverable shall not exceed $15 million in any | ||||||
8 | given year. No costs of any such purchases of | ||||||
9 | carbon offsets may be recovered from a utility or | ||||||
10 | its customers. All carbon offsets purchased for | ||||||
11 | this purpose and any carbon emission credits | ||||||
12 | associated with sequestration of carbon from the | ||||||
13 | facility must be permanently retired. The initial | ||||||
14 | clean coal facility shall not forfeit its | ||||||
15 | designation as a clean coal facility if the | ||||||
16 | facility fails to fully comply with the applicable | ||||||
17 | carbon sequestration requirements in any given | ||||||
18 | year, provided the requisite offsets are | ||||||
19 | purchased. However, the Attorney General, on | ||||||
20 | behalf of the People of the State of Illinois, may | ||||||
21 | specifically enforce the facility's sequestration | ||||||
22 | requirement and the other terms of this contract | ||||||
23 | provision. Compliance with the sequestration | ||||||
24 | requirements and offset purchase requirements | ||||||
25 | specified in paragraph (3) of this subsection (d) | ||||||
26 | shall be reviewed annually by an independent |
| |||||||
| |||||||
1 | expert retained by the owner of the initial clean | ||||||
2 | coal facility, with the advance written approval | ||||||
3 | of the Attorney General. The Commission may, in the | ||||||
4 | course of the review specified in item (vii), | ||||||
5 | reduce the allowable return on equity for the | ||||||
6 | facility if the facility wilfully fails to comply | ||||||
7 | with the carbon capture and sequestration | ||||||
8 | requirements set forth in this item (v); | ||||||
9 | (vi) include limits on, and accordingly | ||||||
10 | provide for modification of, the amount the | ||||||
11 | utility is required to source under the sourcing | ||||||
12 | agreement consistent with paragraph (2) of this | ||||||
13 | subsection (d); | ||||||
14 | (vii) require Commission review: (1) to | ||||||
15 | determine the justness, reasonableness, and | ||||||
16 | prudence of the inputs to the formula referenced in | ||||||
17 | subparagraphs (A)(i) through (A)(iii) of paragraph | ||||||
18 | (3) of this subsection (d), prior to an adjustment | ||||||
19 | in those inputs including, without limitation, the | ||||||
20 | capital structure and return on equity, fuel | ||||||
21 | costs, and other operations and maintenance costs | ||||||
22 | and (2) to approve the costs to be passed through | ||||||
23 | to customers under the sourcing agreement by which | ||||||
24 | the utility satisfies its statutory obligations. | ||||||
25 | Commission review shall occur no less than every 3 | ||||||
26 | years, regardless of whether any adjustments have |
| |||||||
| |||||||
1 | been proposed, and shall be completed within 9 | ||||||
2 | months; | ||||||
3 | (viii) limit the utility's obligation to such | ||||||
4 | amount as the utility is allowed to recover through | ||||||
5 | tariffs filed with the Commission, provided that | ||||||
6 | neither the clean coal facility nor the utility | ||||||
7 | waives any right to assert federal pre-emption or | ||||||
8 | any other argument in response to a purported | ||||||
9 | disallowance of recovery costs; | ||||||
10 | (ix) limit the utility's or alternative retail | ||||||
11 | electric supplier's obligation to incur any | ||||||
12 | liability until such time as the facility is in | ||||||
13 | commercial operation and generating power and | ||||||
14 | energy and such power and energy is being delivered | ||||||
15 | to the facility busbar; | ||||||
16 | (x) provide that the owner or owners of the | ||||||
17 | initial clean coal facility, which is the | ||||||
18 | counterparty to such sourcing agreement, shall | ||||||
19 | have the right from time to time to elect whether | ||||||
20 | the obligations of the utility party thereto shall | ||||||
21 | be governed by the power purchase provisions or the | ||||||
22 | contract for differences provisions; | ||||||
23 | (xi) append documentation showing that the | ||||||
24 | formula rate and contract, insofar as they relate | ||||||
25 | to the power purchase provisions, have been | ||||||
26 | approved by the Federal Energy Regulatory |
| |||||||
| |||||||
1 | Commission pursuant to Section 205 of the Federal | ||||||
2 | Power Act; | ||||||
3 | (xii) provide that any changes to the terms of | ||||||
4 | the contract, insofar as such changes relate to the | ||||||
5 | power purchase provisions, are subject to review | ||||||
6 | under the public interest standard applied by the | ||||||
7 | Federal Energy Regulatory Commission pursuant to | ||||||
8 | Sections 205 and 206 of the Federal Power Act; and | ||||||
9 | (xiii) conform with customary lender | ||||||
10 | requirements in power purchase agreements used as | ||||||
11 | the basis for financing non-utility generators. | ||||||
12 | (4) Effective date of sourcing agreements with the | ||||||
13 | initial clean coal facility. Any proposed sourcing | ||||||
14 | agreement with the initial clean coal facility shall not | ||||||
15 | become effective unless the following reports are prepared | ||||||
16 | and submitted and authorizations and approvals obtained: | ||||||
17 | (i) Facility cost report. The owner of the | ||||||
18 | initial clean coal facility shall submit to the | ||||||
19 | Commission, the Agency, and the General Assembly a | ||||||
20 | front-end engineering and design study, a facility | ||||||
21 | cost report, method of financing (including but | ||||||
22 | not limited to structure and associated costs), | ||||||
23 | and an operating and maintenance cost quote for the | ||||||
24 | facility (collectively "facility cost report"), | ||||||
25 | which shall be prepared in accordance with the | ||||||
26 | requirements of this paragraph (4) of subsection |
| |||||||
| |||||||
1 | (d) of this Section, and shall provide the | ||||||
2 | Commission and the Agency access to the work | ||||||
3 | papers, relied upon documents, and any other | ||||||
4 | backup documentation related to the facility cost | ||||||
5 | report. | ||||||
6 | (ii) Commission report. Within 6 months | ||||||
7 | following receipt of the facility cost report, the | ||||||
8 | Commission, in consultation with the Agency, shall | ||||||
9 | submit a report to the General Assembly setting | ||||||
10 | forth its analysis of the facility cost report. | ||||||
11 | Such report shall include, but not be limited to, a | ||||||
12 | comparison of the costs associated with | ||||||
13 | electricity generated by the initial clean coal | ||||||
14 | facility to the costs associated with electricity | ||||||
15 | generated by other types of generation facilities, | ||||||
16 | an analysis of the rate impacts on residential and | ||||||
17 | small business customers over the life of the | ||||||
18 | sourcing agreements, and an analysis of the | ||||||
19 | likelihood that the initial clean coal facility | ||||||
20 | will commence commercial operation by and be | ||||||
21 | delivering power to the facility's busbar by 2016. | ||||||
22 | To assist in the preparation of its report, the | ||||||
23 | Commission, in consultation with the Agency, may | ||||||
24 | hire one or more experts or consultants, the costs | ||||||
25 | of which shall be paid for by the owner of the | ||||||
26 | initial clean coal facility. The Commission and |
| |||||||
| |||||||
1 | Agency may begin the process of selecting such | ||||||
2 | experts or consultants prior to receipt of the | ||||||
3 | facility cost report. | ||||||
4 | (iii) General Assembly approval. The proposed | ||||||
5 | sourcing agreements shall not take effect unless, | ||||||
6 | based on the facility cost report and the | ||||||
7 | Commission's report, the General Assembly enacts | ||||||
8 | authorizing legislation approving (A) the | ||||||
9 | projected price, stated in cents per kilowatthour, | ||||||
10 | to be charged for electricity generated by the | ||||||
11 | initial clean coal facility, (B) the projected | ||||||
12 | impact on residential and small business | ||||||
13 | customers' bills over the life of the sourcing | ||||||
14 | agreements, and (C) the maximum allowable return | ||||||
15 | on equity for the project; and | ||||||
16 | (iv) Commission review. If the General | ||||||
17 | Assembly enacts authorizing legislation pursuant | ||||||
18 | to subparagraph (iii) approving a sourcing | ||||||
19 | agreement, the Commission shall, within 90 days of | ||||||
20 | such enactment, complete a review of such sourcing | ||||||
21 | agreement. During such time period, the Commission | ||||||
22 | shall implement any directive of the General | ||||||
23 | Assembly, resolve any disputes between the parties | ||||||
24 | to the sourcing agreement concerning the terms of | ||||||
25 | such agreement, approve the form of such | ||||||
26 | agreement, and issue an order finding that the |
| |||||||
| |||||||
1 | sourcing agreement is prudent and reasonable. | ||||||
2 | The facility cost report shall be prepared as follows: | ||||||
3 | (A) The facility cost report shall be prepared by | ||||||
4 | duly licensed engineering and construction firms | ||||||
5 | detailing the estimated capital costs payable to one or | ||||||
6 | more contractors or suppliers for the engineering, | ||||||
7 | procurement and construction of the components | ||||||
8 | comprising the initial clean coal facility and the | ||||||
9 | estimated costs of operation and maintenance of the | ||||||
10 | facility. The facility cost report shall include: | ||||||
11 | (i) an estimate of the capital cost of the core | ||||||
12 | plant based on one or more front end engineering | ||||||
13 | and design studies for the gasification island and | ||||||
14 | related facilities. The core plant shall include | ||||||
15 | all civil, structural, mechanical, electrical, | ||||||
16 | control, and safety systems. | ||||||
17 | (ii) an estimate of the capital cost of the | ||||||
18 | balance of the plant, including any capital costs | ||||||
19 | associated with sequestration of carbon dioxide | ||||||
20 | emissions and all interconnects and interfaces | ||||||
21 | required to operate the facility, such as | ||||||
22 | transmission of electricity, construction or | ||||||
23 | backfeed power supply, pipelines to transport | ||||||
24 | substitute natural gas or carbon dioxide, potable | ||||||
25 | water supply, natural gas supply, water supply, | ||||||
26 | water discharge, landfill, access roads, and coal |
| |||||||
| |||||||
1 | delivery. | ||||||
2 | The quoted construction costs shall be expressed | ||||||
3 | in nominal dollars as of the date that the quote is | ||||||
4 | prepared and shall include (1) capitalized financing | ||||||
5 | costs during construction,
(2) taxes, insurance, and | ||||||
6 | other owner's costs, and (3) an assumed escalation in | ||||||
7 | materials and labor beyond the date as of which the | ||||||
8 | construction cost quote is expressed. | ||||||
9 | (B) The front end engineering and design study for | ||||||
10 | the gasification island and the cost study for the | ||||||
11 | balance of plant shall include sufficient design work | ||||||
12 | to permit quantification of major categories of | ||||||
13 | materials, commodities and labor hours, and receipt of | ||||||
14 | quotes from vendors of major equipment required to | ||||||
15 | construct and operate the clean coal facility. | ||||||
16 | (C) The facility cost report shall also include an | ||||||
17 | operating and maintenance cost quote that will provide | ||||||
18 | the estimated cost of delivered fuel, personnel, | ||||||
19 | maintenance contracts, chemicals, catalysts, | ||||||
20 | consumables, spares, and other fixed and variable | ||||||
21 | operations and maintenance costs. | ||||||
22 | (a) The delivered fuel cost estimate will be | ||||||
23 | provided by a recognized third party expert or | ||||||
24 | experts in the fuel and transportation industries. | ||||||
25 | (b) The balance of the operating and | ||||||
26 | maintenance cost quote, excluding delivered fuel |
| |||||||
| |||||||
1 | costs will be developed based on the inputs | ||||||
2 | provided by duly licensed engineering and | ||||||
3 | construction firms performing the construction | ||||||
4 | cost quote, potential vendors under long-term | ||||||
5 | service agreements and plant operating agreements, | ||||||
6 | or recognized third party plant operator or | ||||||
7 | operators. | ||||||
8 | The operating and maintenance cost quote | ||||||
9 | (including the cost of the front end engineering | ||||||
10 | and design study) shall be expressed in nominal | ||||||
11 | dollars as of the date that the quote is prepared | ||||||
12 | and shall include (1) taxes, insurance, and other | ||||||
13 | owner's costs, and (2) an assumed escalation in | ||||||
14 | materials and labor beyond the date as of which the | ||||||
15 | operating and maintenance cost quote is expressed. | ||||||
16 | (D) The facility cost report shall also include (i) | ||||||
17 | an analysis of the initial clean coal facility's | ||||||
18 | ability to deliver power and energy into the applicable | ||||||
19 | regional transmission organization markets and (ii) an | ||||||
20 | analysis of the expected capacity factor for the | ||||||
21 | initial clean coal facility. | ||||||
22 | (E) Amounts paid to third parties unrelated to the | ||||||
23 | owner or owners of the initial clean coal facility to | ||||||
24 | prepare the core plant construction cost quote, | ||||||
25 | including the front end engineering and design study, | ||||||
26 | and the operating and maintenance cost quote will be |
| |||||||
| |||||||
1 | reimbursed through Coal Development Bonds. | ||||||
2 | (5) Re-powering and retrofitting coal-fired power | ||||||
3 | plants previously owned by Illinois utilities to qualify as | ||||||
4 | clean coal facilities. During the 2009 procurement | ||||||
5 | planning process and thereafter, the Agency and the | ||||||
6 | Commission shall consider sourcing agreements covering | ||||||
7 | electricity generated by power plants that were previously | ||||||
8 | owned by Illinois utilities and that have been or will be | ||||||
9 | converted into clean coal facilities, as defined by Section | ||||||
10 | 1-10 of this Act. Pursuant to such procurement planning | ||||||
11 | process, the owners of such facilities may propose to the | ||||||
12 | Agency sourcing agreements with utilities and alternative | ||||||
13 | retail electric suppliers required to comply with | ||||||
14 | subsection (d) of this Section and item (5) of subsection | ||||||
15 | (d) of Section 16-115 of the Public Utilities Act, covering | ||||||
16 | electricity generated by such facilities. In the case of | ||||||
17 | sourcing agreements that are power purchase agreements, | ||||||
18 | the contract price for electricity sales shall be | ||||||
19 | established on a cost of service basis. In the case of | ||||||
20 | sourcing agreements that are contracts for differences, | ||||||
21 | the contract price from which the reference price is | ||||||
22 | subtracted shall be established on a cost of service basis. | ||||||
23 | The Agency and the Commission may approve any such utility | ||||||
24 | sourcing agreements that do not exceed cost-based | ||||||
25 | benchmarks developed by the procurement administrator, in | ||||||
26 | consultation with the Commission staff, Agency staff and |
| |||||||
| |||||||
1 | the procurement monitor, subject to Commission review and | ||||||
2 | approval. The Commission shall have authority to inspect | ||||||
3 | all books and records associated with these clean coal | ||||||
4 | facilities during the term of any such contract. | ||||||
5 | (6) Costs incurred under this subsection (d) or | ||||||
6 | pursuant to a contract entered into under this subsection | ||||||
7 | (d) shall be deemed prudently incurred and reasonable in | ||||||
8 | amount and the electric utility shall be entitled to full | ||||||
9 | cost recovery pursuant to the tariffs filed with the | ||||||
10 | Commission. | ||||||
11 | (e) The draft procurement plans are subject to public | ||||||
12 | comment, as required by Section 16-111.5 of the Public | ||||||
13 | Utilities Act. | ||||||
14 | (f) The Agency shall submit the final procurement plan | ||||||
15 | to the Commission. The Agency shall revise a procurement | ||||||
16 | plan if the Commission determines that it does not meet the | ||||||
17 | standards set forth in Section 16-111.5 of the Public | ||||||
18 | Utilities Act. | ||||||
19 | (g) The Agency shall assess fees to each affected | ||||||
20 | utility to recover the costs incurred in preparation of the | ||||||
21 | annual procurement plan for the utility. | ||||||
22 | (h) The Agency shall assess fees to each bidder to | ||||||
23 | recover the costs incurred in connection with a competitive | ||||||
24 | procurement process.
| ||||||
25 | (Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09; | ||||||
26 | 96-159, eff. 8-10-09; 96-1437, eff. 8-17-10.)
|
| |||||||
| |||||||
1 | Section 99. Effective date. This Act takes effect upon | ||||||
2 | becoming law.
|