Rep. Elaine Nekritz

Filed: 5/19/2011

 

 


 

 


 
09700HB3055ham002LRB097 10889 ASK 55710 a

1
AMENDMENT TO HOUSE BILL 3055

2    AMENDMENT NO. ______. Amend House Bill 3055, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Public Utilities Act is amended by changing
6Section 8-103 as follows:
 
7    (220 ILCS 5/8-103)
8    Sec. 8-103. Energy efficiency and demand-response
9measures.
10    (a) It is the policy of the State that electric utilities
11are required to use cost-effective energy efficiency and
12demand-response measures to reduce delivery load. Requiring
13investment in cost-effective energy efficiency and
14demand-response measures will reduce direct and indirect costs
15to consumers by decreasing environmental impacts and by
16avoiding or delaying the need for new generation, transmission,

 

 

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1and distribution infrastructure. It serves the public interest
2to allow electric utilities to recover costs for reasonably and
3prudently incurred expenses for energy efficiency and
4demand-response measures. As used in this Section,
5"cost-effective" means that the measures satisfy the total
6resource cost test. The low-income measures described in
7subsection (f)(4) of this Section shall not be required to meet
8the total resource cost test. For purposes of this Section, the
9terms "energy-efficiency", "demand-response", "electric
10utility", and "total resource cost test" shall have the
11meanings set forth in the Illinois Power Agency Act. For
12purposes of this Section, the amount per kilowatthour means the
13total amount paid for electric service expressed on a per
14kilowatthour basis. For purposes of this Section, the total
15amount paid for electric service includes without limitation
16estimated amounts paid for supply, transmission, distribution,
17surcharges, and add-on-taxes.
18    (b) Electric utilities shall implement cost-effective
19energy efficiency measures to meet the following incremental
20annual energy savings goals:
21        (1) 0.2% of energy delivered in the year commencing
22    June 1, 2008;
23        (2) 0.4% of energy delivered in the year commencing
24    June 1, 2009;
25        (3) 0.6% of energy delivered in the year commencing
26    June 1, 2010;

 

 

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1        (4) 0.8% of energy delivered in the year commencing
2    June 1, 2011;
3        (5) 1% of energy delivered in the year commencing June
4    1, 2012;
5        (6) 1.4% of energy delivered in the year commencing
6    June 1, 2013;
7        (7) 1.8% of energy delivered in the year commencing
8    June 1, 2014; and
9        (8) 2% of energy delivered in the year commencing June
10    1, 2015 and each year thereafter.
11    (c) Electric utilities shall implement cost-effective
12demand-response measures to reduce peak demand by 0.1% over the
13prior year for eligible retail customers, as defined in Section
1416-111.5 of this Act, and for customers that elect hourly
15service from the utility pursuant to Section 16-107 of this
16Act, provided those customers have not been declared
17competitive. This requirement commences June 1, 2008 and
18continues for 10 years.
19    (d) Notwithstanding the requirements of subsections (b)
20and (c) of this Section, an electric utility shall reduce the
21amount of energy efficiency and demand-response measures
22implemented in any single year by an amount necessary to limit
23the estimated average increase in the amounts paid by retail
24customers in connection with electric service due to the cost
25of those measures to:
26        (1) in 2008, no more than 0.5% of the amount paid per

 

 

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1    kilowatthour by those customers during the year ending May
2    31, 2007;
3        (2) in 2009, the greater of an additional 0.5% of the
4    amount paid per kilowatthour by those customers during the
5    year ending May 31, 2008 or 1% of the amount paid per
6    kilowatthour by those customers during the year ending May
7    31, 2007;
8        (3) in 2010, the greater of an additional 0.5% of the
9    amount paid per kilowatthour by those customers during the
10    year ending May 31, 2009 or 1.5% of the amount paid per
11    kilowatthour by those customers during the year ending May
12    31, 2007;
13        (4) in 2011, the greater of an additional 0.5% of the
14    amount paid per kilowatthour by those customers during the
15    year ending May 31, 2010 or 2% of the amount paid per
16    kilowatthour by those customers during the year ending May
17    31, 2007; and
18        (5) thereafter, the amount of energy efficiency and
19    demand-response measures implemented for any single year
20    shall be reduced by an amount necessary to limit the
21    estimated average net increase due to the cost of these
22    measures included in the amounts paid by eligible retail
23    customers in connection with electric service to no more
24    than the greater of 2.015% of the amount paid per
25    kilowatthour by those customers during the year ending May
26    31, 2007 or the incremental amount per kilowatthour paid

 

 

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1    for these measures in 2011, unless the Commission
2    concludes, based on evidence presented during a plan filing
3    proceeding under subsection (f) of this Section, that the
4    limitation would result in the utility foregoing
5    cost-effective opportunities for savings that would
6    otherwise create net aggregate bill reductions for its
7    customers; if the Commission so concludes, then it may
8    direct the utility to exceed the spending limits in this
9    subsection (d) only to the extent necessary to achieve the
10    savings targets in subsection (b) of this Section.
11    No later than June 30, 2011, the Commission shall review
12the limitation on the amount of energy efficiency and
13demand-response measures implemented pursuant to this Section
14and report to the General Assembly its findings as to whether
15that limitation unduly constrains the procurement of energy
16efficiency and demand-response measures.
17    (e) Electric utilities shall be responsible for overseeing
18the design, development, and filing of energy efficiency and
19demand-response plans with the Commission. Electric utilities
20shall implement 100% of the demand-response measures in the
21plans. Electric utilities shall implement 75% of the energy
22efficiency measures approved by the Commission, and may, as
23part of that implementation, outsource various aspects of
24program development and implementation. The remaining 25% of
25those energy efficiency measures approved by the Commission
26shall be implemented by the Department of Commerce and Economic

 

 

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1Opportunity, and must be designed in conjunction with the
2utility and the filing process. The Department may outsource
3development and implementation of energy efficiency measures.
4A minimum of 10% of the entire portfolio of cost-effective
5energy efficiency measures shall be procured from units of
6local government, municipal corporations, school districts,
7and community college districts. The Department shall
8coordinate the implementation of these measures.
9    The apportionment of the dollars to cover the costs to
10implement the Department's share of the portfolio of energy
11efficiency measures shall be made to the Department once the
12Department has executed grants or contracts for energy
13efficiency measures and provided supporting documentation for
14those grants and the contracts to the utility.
15    The details of the measures implemented by the Department
16shall be submitted by the Department to the Commission in
17connection with the utility's filing regarding the energy
18efficiency and demand-response measures that the utility
19implements.
20    A utility providing approved energy efficiency and
21demand-response measures in the State shall be permitted to
22recover costs of those measures through an automatic adjustment
23clause tariff filed with and approved by the Commission. The
24tariff shall be established outside the context of a general
25rate case. Each year the Commission shall initiate a review to
26reconcile any amounts collected with the actual costs and to

 

 

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1determine the required adjustment to the annual tariff factor
2to match annual expenditures.
3    Each utility shall include, in its recovery of costs, the
4costs estimated for both the utility's and the Department's
5implementation of energy efficiency and demand-response
6measures. Costs collected by the utility for measures
7implemented by the Department shall be submitted to the
8Department pursuant to Section 605-323 of the Civil
9Administrative Code of Illinois and shall be used by the
10Department solely for the purpose of implementing these
11measures. A utility shall not be required to advance any moneys
12to the Department but only to forward such funds as it has
13collected. The Department shall report to the Commission on an
14annual basis regarding the costs actually incurred by the
15Department in the implementation of the measures. Any changes
16to the costs of energy efficiency measures as a result of plan
17modifications shall be appropriately reflected in amounts
18recovered by the utility and turned over to the Department.
19    The portfolio of measures, administered by both the
20utilities and the Department, shall, in combination, be
21designed to achieve the annual savings targets described in
22subsections (b) and (c) of this Section, as modified by
23subsection (d) of this Section.
24    The utility and the Department shall agree upon a
25reasonable portfolio of measures and determine the measurable
26corresponding percentage of the savings goals associated with

 

 

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1measures implemented by the utility or Department.
2    No utility shall be assessed a penalty under subsection (f)
3of this Section for failure to make a timely filing if that
4failure is the result of a lack of agreement with the
5Department with respect to the allocation of responsibilities
6or related costs or target assignments. In that case, the
7Department and the utility shall file their respective plans
8with the Commission and the Commission shall determine an
9appropriate division of measures and programs that meets the
10requirements of this Section.
11    If the Department is unable to meet incremental annual
12performance goals for the portion of the portfolio implemented
13by the Department, then the utility and the Department shall
14jointly submit a modified filing to the Commission explaining
15the performance shortfall and recommending an appropriate
16course going forward, including any program modifications that
17may be appropriate in light of the evaluations conducted under
18item (7) of subsection (f) of this Section. In this case, the
19utility obligation to collect the Department's costs and turn
20over those funds to the Department under this subsection (e)
21shall continue only if the Commission approves the
22modifications to the plan proposed by the Department.
23    (f) No later than November 15, 2007, each electric utility
24shall file an energy efficiency and demand-response plan with
25the Commission to meet the energy efficiency and
26demand-response standards for 2008 through 2010. Every 3 years

 

 

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1thereafter, each electric utility shall file, no later than
2October 1, an energy efficiency and demand-response plan with
3the Commission. If a utility does not file such a plan by
4October 1 of an applicable year, it shall face a penalty of
5$100,000 per day until the plan is filed. Each utility's plan
6shall set forth the utility's proposals to meet the utility's
7portion of the energy efficiency standards identified in
8subsection (b) and the demand-response standards identified in
9subsection (c) of this Section as modified by subsections (d)
10and (e), taking into account the unique circumstances of the
11utility's service territory. The Commission shall seek public
12comment on the utility's plan and shall issue an order
13approving or disapproving each plan within 3 months after its
14submission. If the Commission disapproves a plan, the
15Commission shall, within 30 days, describe in detail the
16reasons for the disapproval and describe a path by which the
17utility may file a revised draft of the plan to address the
18Commission's concerns satisfactorily. If the utility does not
19refile with the Commission within 60 days, the utility shall be
20subject to penalties at a rate of $100,000 per day until the
21plan is filed. This process shall continue, and penalties shall
22accrue, until the utility has successfully filed a portfolio of
23energy efficiency and demand-response measures. Penalties
24shall be deposited into the Energy Efficiency Trust Fund. In
25submitting proposed energy efficiency and demand-response
26plans and funding levels to meet the savings goals adopted by

 

 

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1this Act the utility shall:
2        (1) Demonstrate that its proposed energy efficiency
3    and demand-response measures will achieve the requirements
4    that are identified in subsections (b) and (c) of this
5    Section, as modified by subsections (d) and (e).
6        (2) Present specific proposals to implement new
7    building and appliance standards that have been placed into
8    effect.
9        (3) Present estimates of the total amount paid for
10    electric service expressed on a per kilowatthour basis
11    associated with the proposed portfolio of measures
12    designed to meet the requirements that are identified in
13    subsections (b) and (c) of this Section, as modified by
14    subsections (d) and (e).
15        (4) Coordinate with the Department to present a
16    portfolio of energy efficiency measures proportionate to
17    the share of total annual utility revenues in Illinois from
18    households at or below 150% of the poverty level. The
19    energy efficiency programs shall be targeted to households
20    with incomes at or below 80% of area median income.
21        (5) Demonstrate that its overall portfolio of energy
22    efficiency and demand-response measures, not including
23    programs covered by item (4) of this subsection (f), are
24    cost-effective using the total resource cost test and
25    represent a diverse cross-section of opportunities for
26    customers of all rate classes to participate in the

 

 

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1    programs.
2        (6) Include a proposed cost-recovery tariff mechanism
3    to fund the proposed energy efficiency and demand-response
4    measures and to ensure the recovery of the prudently and
5    reasonably incurred costs of Commission-approved programs.
6        (7) Provide for an annual independent evaluation of the
7    performance of the cost-effectiveness of the utility's
8    portfolio of measures and the Department's portfolio of
9    measures, as well as a full review of the 3-year results of
10    the broader net program impacts and, to the extent
11    practical, for adjustment of the measures on a
12    going-forward basis as a result of the evaluations. The
13    resources dedicated to evaluation shall not exceed 3% of
14    portfolio resources in any given year.
15    (g) No more than 3% of energy efficiency and
16demand-response program revenue may be allocated for
17demonstration of breakthrough equipment and devices.
18    (h) This Section does not apply to an electric utility that
19on December 31, 2005 provided electric service to fewer than
20100,000 customers in Illinois.
21    (i) If, after 2 years, an electric utility fails to meet
22the efficiency standard specified in subsection (b) of this
23Section, as modified by subsections (d) and (e), it shall make
24a contribution to the Low-Income Home Energy Assistance
25Program. The combined total liability for failure to meet the
26goal shall be $1,000,000, which shall be assessed as follows: a

 

 

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1large electric utility shall pay $665,000, and a medium
2electric utility shall pay $335,000. If, after 3 years, an
3electric utility fails to meet the efficiency standard
4specified in subsection (b) of this Section, as modified by
5subsections (d) and (e), it shall make a contribution to the
6Low-Income Home Energy Assistance Program. The combined total
7liability for failure to meet the goal shall be $1,000,000,
8which shall be assessed as follows: a large electric utility
9shall pay $665,000, and a medium electric utility shall pay
10$335,000. In addition, the responsibility for implementing the
11energy efficiency measures of the utility making the payment
12shall be transferred to the Illinois Power Agency if, after 3
13years, or in any subsequent 3-year period, the utility fails to
14meet the efficiency standard specified in subsection (b) of
15this Section, as modified by subsections (d) and (e). The
16Agency shall implement a competitive procurement program to
17procure resources necessary to meet the standards specified in
18this Section as modified by subsections (d) and (e), with costs
19for those resources to be recovered in the same manner as
20products purchased through the procurement plan as provided in
21Section 16-111.5. The Director shall implement this
22requirement in connection with the procurement plan as provided
23in Section 16-111.5.
24    For purposes of this Section, (i) a "large electric
25utility" is an electric utility that, on December 31, 2005,
26served more than 2,000,000 electric customers in Illinois; (ii)

 

 

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1a "medium electric utility" is an electric utility that, on
2December 31, 2005, served 2,000,000 or fewer but more than
3100,000 electric customers in Illinois; and (iii) Illinois
4electric utilities that are affiliated by virtue of a common
5parent company are considered a single electric utility.
6    (j) If, after 3 years, or any subsequent 3-year period, the
7Department fails to implement the Department's share of energy
8efficiency measures required by the standards in subsection
9(b), then the Illinois Power Agency may assume responsibility
10for and control of the Department's share of the required
11energy efficiency measures. The Agency shall implement a
12competitive procurement program to procure resources necessary
13to meet the standards specified in this Section, with the costs
14of these resources to be recovered in the same manner as
15provided for the Department in this Section.
16    (k) No electric utility shall be deemed to have failed to
17meet the energy efficiency standards to the extent any such
18failure is due to a failure of the Department or the Agency.
19(Source: P.A. 95-481, eff. 8-28-07; 95-876, eff. 8-21-08;
2096-33, eff. 7-10-09; 96-159, eff. 8-10-09; 96-1000, eff.
217-2-10.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.".