Rep. John E. Bradley

Filed: 5/23/2012

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 678

2    AMENDMENT NO. ______. Amend Senate Bill 678 as follows:
 
3on page 4, immediately below line 21, by inserting the
4following:
5    ""Coal gasification unit" means equipment that is designed
6to process coal and convert the energy content of coal into
7SNG."; and
 
8on page 8, by replacing lines 3 through 13 with "facility using
9gasification technology or an SNG-ready generating facility
10that: (1) has a nameplate capacity of at least 500 MW; (2)
11irrevocably commits in its proposed sourcing agreement to use
12coal for at least 50% of the total feedstock over the term of a
13sourcing agreement, with all coal having high volatile
14bituminous rank and greater than 1.7 pounds of sulfur per
15million btu content, but this clause (2) shall not apply if the
16facility is an SNG-ready generating facility; (3) is designed

 

 

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1to capture and sequester at least 90% of the carbon dioxide
2emissions that the portion of the facility, if any, that
3produces SNG would otherwise emit and at least 50% of the total
4carbon dioxide emissions that the facility as a whole would
5otherwise emit, but this clause (3) shall not apply if the
6facility is an SNG-ready generating facility; (4) absent an
7appeal of a permit or"; and
 
8on page 11, immediately below line 25, by inserting the
9following:
10    ""SNG-ready capital costs" means the portion of the capital
11costs of an SNG-ready generating facility that are necessary to
12accommodate future integrated operation of such generating
13facility with one or more coal gasification units, but only to
14the extent such capital costs would not have been part of the
15capital costs of a similar electric generating facility that is
16not designed to accommodate future integrated operation with
17one or more coal gasification units.
18    "SNG-ready capital rate component" means, for any year, the
19portion of the amounts paid under sourcing agreements with the
20initial clean coal facility that is attributable to SNG-ready
21capital costs being included in the return of capital and
22return on capital components of the formula rate.
23    "SNG-ready generating facility" means an electric
24generating facility that is capable of using SNG as a fuel and
25is designed to accommodate future integrated operation with one

 

 

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1or more coal gasification units located on or adjacent to the
2generating facility site, but with no gasification units
3constructed as part of the initial construction of such
4facility. An SNG-ready generating facility shall be designed to
5accommodate such future integrated operation if its steam
6turbine, steam piping, air cooled condenser, condensate and
7feedwater systems, and certain heat recovery steam generator
8sections (high pressure superheater, low pressure superheater
9and reheater) are designed to accommodate the steam and water
10flows expected from the coal gasification units and if the
11overall plant layout includes reservation of an adjacent plot
12space (over which such generating facility holds and shall
13maintain site control) for efficient installation of the future
14coal gasification units and related equipment, including fuel
15handling equipment."; and
 
16on page 28, lines 8 and 13, by replacing "2012" each time it
17appears with "2014"; and
 
18on page 29, line 13, by replacing "2012" with "2014"; and
 
19on page 32, immediately below line 15, by inserting the
20following:
21        "(7) If and for so long as the initial clean coal
22    facility is an SNG-ready generating facility, the expert or
23    consultant that shall develop the feedstock procurement

 

 

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1    plan and the feedstock procurement administrator, each as
2    selected pursuant to this subsection (a-5), shall not be
3    required to have experience in coal procurement."; and
 
4by replacing line 17 on page 46 through line 2 on page 53 with
5the following:
6        "Notwithstanding the requirements of this subsection
7    (d), the total amount paid under sourcing agreements with
8    clean coal facilities pursuant to the procurement plan for
9    any given year shall be reduced by an amount necessary to
10    limit the annual estimated average net increase due to the
11    costs of these resources included in the amounts paid by
12    eligible retail customers in connection with electric
13    service to:
14                (A) in 2010, no more than 0.5% of the amount
15            paid per kilowatthour by those customers during
16            the year ending May 31, 2009;
17                (B) in 2011, the greater of an additional 0.5%
18            of the amount paid per kilowatthour by those
19            customers during the year ending May 31, 2010 or 1%
20            of the amount paid per kilowatthour by those
21            customers during the year ending May 31, 2009;
22                (C) in 2012, the greater of an additional 0.5%
23            of the amount paid per kilowatthour by those
24            customers during the year ending May 31, 2011 or
25            1.5% of the amount paid per kilowatthour by those

 

 

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1            customers during the year ending May 31, 2009;
2                (D) in 2013, the greater of an additional 0.5%
3            of the amount paid per kilowatthour by those
4            customers during the year ending May 31, 2012 or 2%
5            of the amount paid per kilowatthour by those
6            customers during the year ending May 31, 2009; and
7                (E) thereafter, the total amount paid under
8            sourcing agreements with clean coal facilities
9            pursuant to the procurement plan for any single
10            year shall be reduced by an amount necessary to
11            limit the estimated average net increase due to the
12            cost of these resources included in the amounts
13            paid by eligible retail customers in connection
14            with electric service to no more than the greater
15            of (i) 2.015% of the amount paid per kilowatthour
16            by those customers during the year ending May 31,
17            2009 or (ii) the incremental amount per
18            kilowatthour paid for these resources in 2013.
19            These requirements may be altered only as provided
20            by statute.
21                No later than June 30, 2015, the Commission
22            shall review the limitation on the total amount
23            paid under sourcing agreements, if any, with clean
24            coal facilities pursuant to this subsection (d)
25            and report to the General Assembly its findings as
26            to whether that limitation unduly constrains the

 

 

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1            amount of electricity generated by cost-effective
2            clean coal facilities that is covered by sourcing
3            agreements.
4        Notwithstanding the requirements of this subsection
5    (d), the total amount purchased under sourcing agreements
6    with the initial clean coal facility pursuant to the
7    procurement plan for any given year shall be reduced by an
8    amount necessary to limit the annual estimated average net
9    increase due to the costs of these resources included in
10    the amounts paid by eligible retail customers in connection
11    with electric service to:
12            (A) in 2010, no more than 0.5% of the amount paid
13        per kilowatthour by those customers during the year
14        ending May 31, 2009;
15            (B) in 2011, the greater of an additional 0.5% of
16        the amount paid per kilowatthour by those customers
17        during the year ending May 31, 2010 or 1% of the amount
18        paid per kilowatthour by those customers during the
19        year ending May 31, 2009;
20            (C) in 2012, the greater of an additional 0.5% of
21        the amount paid per kilowatthour by those customers
22        during the year ending May 31, 2011 or 1.5% of the
23        amount paid per kilowatthour by those customers during
24        the year ending May 31, 2009;
25            (D) in 2013, the greater of an additional 0.5% of
26        the amount paid per kilowatthour by those customers

 

 

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1        during the year ending May 31, 2012 or 2% of the amount
2        paid per kilowatthour by those customers during the
3        year ending May 31, 2009; and
4            (E) thereafter:
5                (i) A calculation shall be made for each year
6            to determine whether the estimated average net per
7            killowatthour increase due to the cost of electric
8            power purchased under sourcing agreements and
9            included in the amounts paid by small electric
10            customers in connection with electric service
11            exceeds the greater of (1) 2.015% of the amount
12            paid per kilowatthour by eligible retail customers
13            during the year ending May 31, 2009 or (2) the
14            incremental amount per kilowatthour paid for these
15            resources in 2013. If and for so long as the
16            initial clean coal facility is an SNG-ready
17            generating facility, the percentage in the
18            immediately preceding sentence shall be 0.75% and
19            not 2.015%. These requirements may be altered only
20            as provided by statute. For purposes of such
21            calculation, such average net per kilowatthour
22            increase in rates of small electric customers that
23            are not eligible retail customers shall be deemed
24            to be equal to such average net per kilowatthour
25            increase in rates of eligible retail customers.
26                (ii) If, for any year, the small customer rate

 

 

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1            impact would exceed the limitation described in
2            item (i) of this subparagraph (E), the clean coal
3            fraction for each clean coal electricity buyer
4            shall be adjusted for such year in a manner that
5            shall result in (1) the quantity of electric power
6            projected to be purchased by each clean coal
7            electricity buyer being reduced by an amount
8            sufficient to result in such deemed rate impact on
9            all small electric customers (whether served by
10            electric utilities or alternative retail electric
11            suppliers) being equal to such limitation for such
12            year and (2) any such reductions in amounts
13            allocated to the clean coal electricity buyers in
14            order to achieve the objective described in clause
15            (1) of this item (ii) being allocated to, and
16            purchased and paid for by, the clean coal
17            electricity buyers in proportion to their retail
18            sales to large electric customers.
19                (iii) Each year, after taking account of the
20            adjustment, if any, provided for in item (ii) of
21            this subparagraph (E), a calculation shall be made
22            to determine whether the large customer deemed
23            rate impact for such year exceeds $0.005 per
24            kilowatthour. If and for so long as the initial
25            clean coal facility is an SNG-ready generating
26            facility, the amount in the immediately preceding

 

 

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1            sentence shall be $0.00085, and not $0.005. The
2            "large customer deemed rate impact" for any year is
3            the projected increase in electric rates of large
4            electric customers (whether served by electric
5            utilities or alternative retail electric
6            suppliers) due to the cost of electric power
7            purchased under sourcing agreements to the extent
8            it is based on each clean coal electricity buyer's
9            retail sales to large electric customers, which
10            shall be calculated in substantially the same
11            manner as the calculation of rate impact on small
12            electric customers, and shall assume that such
13            cost of purchases under sourcing agreements is
14            passed through proportionally by the clean coal
15            electricity buyers to their large electric
16            customers. The calculation of the large customer
17            deemed rate impact shall (1) assume that the total
18            retail sales (expressed in kilowatthours sold) to
19            large electric customers by all clean coal
20            electricity buyers for any year is the greater of
21            the actual amount of such sales in such year and
22            the amount of such sales in 2009 and (2) exclude
23            from the calculation any actual costs for such year
24            incurred by the initial clean coal facility to the
25            extent such costs exceed the corresponding amount
26            assumed in the "reference case" of the facility

 

 

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1            cost report for the initial clean coal facility for
2            such year and are not principally within the
3            reasonable control of the initial clean coal
4            facility.
5                Any operating costs or revenues deviating from
6            the corresponding costs assumed in the "reference
7            case" of the facility cost report for the initial
8            clean coal facility as a result of changes in
9            market prices, including, but not limited to,
10            prices of coal, natural gas, electricity,
11            by-products, and emissions allowances, shall be
12            deemed to be outside of the reasonable control of
13            the initial clean coal facility and excluded from
14            the calculation.
15                Any costs exceeding the corresponding costs
16            assumed in the "reference case" of the facility
17            cost report for the initial clean coal facility as
18            a result of changes in capital costs, fixed
19            operating costs, variable operating costs,
20            operating efficiency, and availability, except in
21            each case to the extent resulting from a change in
22            market prices, as described in the immediately
23            preceding paragraph, or from a change in law, as
24            defined in subsection (b) of Section 1-76 of this
25            Act, shall be deemed to be within the reasonable
26            control of the initial clean coal facility and

 

 

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1            included in the calculation.
2                If and for so long as the initial clean coal
3            facility is an SNG-ready generating facility,
4            clause (2) of the fourth sentence and all of the
5            second and third paragraphs of this item (iii)
6            shall not apply.
7                (iv) If, for any year, the large customer
8            deemed rate impact would exceed the limitation
9            described in item (iii) of this subparagraph (E),
10            the quantity of electric power required to be
11            purchased by each clean coal electricity buyer
12            that serves large electric customers under its
13            sourcing agreement for such year shall be reduced
14            by such amount as will result in the large customer
15            deemed rate impact being equal to such limitation
16            for such year, and the clean coal fractions of each
17            clean coal electricity buyer that serves large
18            electric customers shall be adjusted for such year
19            to reflect this reduction; provided, however, that
20            the reduction under this item (iv) shall not exceed
21            in any year an amount that would result in revenues
22            under the sourcing agreements being reduced by
23            more than $50,000,000 in the aggregate for such
24            year, but this provision shall not apply if and for
25            so long as the initial clean coal facility is an
26            SNG-ready generating facility. Any quantities of

 

 

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1            electric power not required to be purchased
2            pursuant to the operation of the immediately
3            preceding sentence may be disposed of by the
4            initial clean coal facility for its own account,
5            and the proceeds of any sales of such electric
6            power shall not be included in the formula rate.
7                (v) The details of the calculations
8            contemplated by this subparagraph (E) shall be set
9            forth in the sourcing agreements.
10                (vi) No later than June 30, 2016, the
11            Commission shall review the limitation on the
12            total amount paid under sourcing agreements, if
13            any, with the initial clean coal facility pursuant
14            to this subsection (d) and report to the General
15            Assembly its findings as to the effect of the
16            limitation on the initial clean coal facility,
17            electric utilities, alternative retail electric
18            suppliers, and customers of the electric utilities
19            and the alternative retail electric suppliers.";
20            and
 
21on page 54, line 4, immediately after "facility" by inserting
22"as established by engineering and design studies"; and
 
23on page 54, by replacing line 10 with "intermittent resources,
24the reliability and cost of"; and
 

 

 

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1on page 54, line 12, immediately after "utilities" by inserting
2", the amount of engineering and design work that has been done
3for the facility, including, in the case of an SNG-ready
4generating facility, the engineering and design work relating
5to features that would accommodate future integrated operation
6with one or more coal gasification units, the facility's water
7use and overall environmental attributes, and the schedule for
8commencement of construction and operation of the facility";
9and
 
10on page 54, by replacing line 15 with the following:
11    "97th General Assembly. The facility designated as the
12    initial clean coal facility under this Section shall
13    operate as an SNG-ready generating facility unless and
14    until it becomes an electric generating facility using
15    gasification technology by adding one or more coal
16    gasification units. The initial clean coal facility may add
17    one or more coal gasification units only after:
18            (A) the General Assembly, by enactment of a law,
19        authorizes the addition; provided that, within 2 years
20        preceding the effective date of such enactment, the
21        initial clean coal facility shall have submitted a
22        facility cost report for the coal gasification unit or
23        units otherwise meeting the requirements of paragraph
24        (4) of subsection (d) of this Section;

 

 

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1            (B) a determination is made by the Commission
2        either that a carbon dioxide pipeline capable of
3        transporting the carbon dioxide captured from such
4        gasification unit or units may be constructed, which
5        shall be deemed to have been made if the Commission
6        issued a certificate of authority of the construction
7        of such a carbon dioxide pipeline, or that the initial
8        clean coal facility has obtained a Class VI injection
9        permit from the United States Environmental Protection
10        Agency or the Illinois Environmental Protection Agency
11        and has completed the other material elements
12        necessary for it to sequester carbon dioxide captured
13        from such gasification unit or units;
14            (C) a determination of capital costs associated
15        with the addition is made by the Capital Development
16        Board and the Commission according to the process in
17        subsection (b) of Section 1-76 of this Act; and
18            (D) a determination of sequestration capital costs
19        and sequestration operation and maintenance costs
20        associated with the addition is made by the Capital
21        Development Board according to the process in
22        subsection (e) of Section 1-76 of this Act.
23        The initial clean coal facility may accomplish the
24    addition of the coal gasification unit or units either (i)
25    by having the coal gasification unit or units owned by the
26    same entity that owns the SNG-ready generating facility and

 

 

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1    the costs associated with the coal gasification unit or
2    units included in the formula rate under sourcing
3    agreements between the clean coal electricity buyers and
4    the initial clean coal facility or (ii) by having the coal
5    gasification unit or units be owned by a different entity
6    that would sell the SNG produced by such gasification unit
7    or units to the SNG-ready generating facility under a
8    separate formula rate with the SNG-ready generating
9    facility incorporating the costs of the SNG into the
10    formula rate under its sourcing agreement with the clean
11    coal electricity buyers. a proposed clean coal facility
12    in"; and
 
13on page 68, line 12, by deleting "and"; and
 
14on page 69, by replacing line 18 with "approved by the Agency;
15and"; and
 
16on page 69, immediately below line 18, by inserting:
17            "(xvii) if the initial clean coal facility is an
18        SNG-ready generating facility, set out a mechanism for
19        adjusting the quantity of electric power purchased by
20        each clean coal electricity buyer so that the small
21        customer rate impact would not exceed 0.375% of the
22        amount paid per kilowatthour by eligible retail
23        customers during the year ending May 31, 2009 and the

 

 

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1        large customer deemed rate impact would not exceed
2        $0.000425 per kilowatthour, in each case due to the
3        SNG-ready capital rate component; such mechanism shall
4        include a carryforward to subsequent years for any
5        reduced revenues suffered by the initial clean coal
6        facility as a result of such adjustments, but subject
7        to the application of these limitations in subsequent
8        years; such mechanism shall be effective for so long as
9        the initial clean coal facility is an SNG-ready
10        generating facility and shall be compatible with the
11        provisions of subparagraph (E) of paragraph (2) of this
12        subsection." and
 
13on page 81, immediately below line 4, by inserting the
14following:
15        "(l) If the initial clean coal facility is an SNG-ready
16    generating facility, then the initial clean coal facility
17    shall continue with its efforts to obtain permits for
18    carbon capture and sequestration facilities that could be
19    used in connection with the portion of the facility that
20    produces SNG if such portion of the facility were to be
21    constructed."; and
 
22on page 83, line 26, after "facility.", by inserting "If the
23initial clean coal facility is an SNG-ready generating
24facility, the capital costs of the SNG-ready generating

 

 

09700SB0678ham002- 17 -LRB097 04938 CEL 69975 a

1facility shall include reasonable development costs relating
2to the initial clean coal facility without regard to whether
3such costs relate to the power block or the proposed portion of
4the facility that produces SNG and without regard to whether
5the proposed portion of the facility that produces SNG is to be
6constructed. If the initial clean coal facility is an SNG-ready
7generating facility, the Capital Development Board shall
8include in its calculation of capital costs an identification
9of which capital costs constitute SNG-ready capital costs and
10shall not include in the range of capital costs any SNG-ready
11capital costs that exceed 10% of the total of all capital
12costs."; and
 
13on page 86, line 18, after "facility.", by inserting "If the
14initial clean coal facility is an SNG-ready generating
15facility, any capital costs of the SNG-ready generating
16facility that exceed the pre-approved capital costs and any
17SNG-ready capital costs that exceed 10% of the pre-approved
18capital costs shall not be included in the formula rate and
19shall be borne by the initial clean coal facility and its
20contractors, provided that, to the extent any of such
21incremental costs are the result of change in law or
22non-insurable force majeure, all of such costs shall be
23included in the formula rate and recoverable by the initial
24clean coal facility."; and
 

 

 

09700SB0678ham002- 18 -LRB097 04938 CEL 69975 a

1on page 86, by replacing line 24 with "authority occurring
2after the Commission determines the amount of pre-approved
3capital costs."; and
 
4on page 89, line 9, immediately after "facility", by inserting
5"and, if the initial clean coal facility is an SNG-ready
6generating facility, for the initial construction of any coal
7gasification unit or units that may be added following
8authorization thereof pursuant to subparagraph (A) of
9paragraph (3) of subsection (d) of Section 1-75 of this Act,";
10and
 
11on page 90, line 22, immediately after "electricity" by
12inserting ", provided that, if and for so long as the initial
13clean coal facility is an SNG-ready generating facility, the
14minimum feedstock procurement requirements in this sentence
15shall be inapplicable and the reference in this sentence to the
16term of a sourcing agreement shall be deemed to refer only to
17the portion, if any, of such term occurring after such
18SNG-ready generating facility adds one or more coal
19gasification units following authorization thereof pursuant to
20subparagraph (A) of paragraph (3) of subsection (d) of Section
211-75 of this Act"; and
 
22on page 91, line 20, after "rate.", by inserting "If and for so
23long as the initial clean coal facility is an SNG-ready

 

 

09700SB0678ham002- 19 -LRB097 04938 CEL 69975 a

1generating facility, the provisions of this subsection (e)
2shall be inapplicable."; and
 
3on page 96, by replacing line 26 with "authority occurring
4after the Capital Development Board makes its final
5determination of sequestration capital costs and sequestration
6operation and maintenance costs."; and
 
7on page 98, by replacing line 9 with "shall be no lower than
8the weighted"; and
 
9on page 98, line 12, by replacing "January 1, 2011" with "the
10effective date of this amendatory Act of the 97th General
11Assembly"; and
 
12on page 103, immediately below line 20, by inserting the
13following:
14    "(e) If and for so long as the initial clean coal facility
15is an SNG-ready generating facility, all requirements of this
16Section relating to carbon capture and sequestration shall be
17deemed to be satisfied if the carbon dioxide emissions from the
18SNG-ready generating facility are less than 1,000 pounds per
19megawatt-hour of electricity generated by the SNG-ready
20generating facility on an average annual basis; the initial
21clean coal facility shall submit to the Commission on an annual
22basis information demonstrating compliance with such emissions

 

 

09700SB0678ham002- 20 -LRB097 04938 CEL 69975 a

1limit."; and
 
2on page 103, by replacing lines 22 through 25 with the
3following:
4    "Sec. 1-77.5. Sequestration permitting.
5    (a) No initial clean coal facility"; and
 
6on page 104, by replacing lines 11 through 13 with the
7following:
8    "(b) No later than 6 months prior to the date upon which
9the owner of the initial clean coal facility intends to
10commence construction of any coal gasification unit or units,
11the owner of such facility shall file with the Commission a
12carbon"; and
 
13by deleting line 17 on page 105 through line 11 on page 107;
14and
 
15on page 112, lines 1 and 14, by replacing "2012" each time it
16appears with "2014"; and
 
17on page 121, immediately below line 1, by inserting the
18following:
19    "(n) If and for so long as the initial clean coal facility
20is an SNG-ready generating facility, the provisions of this
21Section relating to the procurement of coal or other feedstock

 

 

09700SB0678ham002- 21 -LRB097 04938 CEL 69975 a

1that would be used by coal gasification units or relating to
2any minimum feedstock procurement or minimum feedstock usage
3shall not be applicable."; and
 
4on page 187, by replacing lines 8 through 15 with the
5following:
6            "(iii) the required sourcing of electricity
7        generated by clean coal facilities, other than the
8        initial clean coal facility, shall be limited to the
9        amount of electricity that can be procured or sourced
10        at a price at or below the benchmarks approved by the
11        Commission each year in accordance with item (1) of
12        subsection (c) and items (1) and (5) of subsection (d)
13        of Section 1-75 of the Illinois Power Agency Act;"; and
 
14on page 209, immediately below line 14, by inserting the
15following:
 
16    "Section 999. Effective date. This Act takes effect upon
17becoming law.".