Sen. David Koehler

Filed: 3/4/2011

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1884

2    AMENDMENT NO. ______. Amend Senate Bill 1884 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Public Utilities Act is amended by changing
5Section 8-103 as follows:
 
6    (220 ILCS 5/8-103)
7    Sec. 8-103. Energy efficiency and demand-response
8measures.
9    (a) It is the policy of the State that electric utilities
10are required to use cost-effective energy efficiency and
11demand-response measures to reduce delivery load. Requiring
12investment in cost-effective energy efficiency and
13demand-response measures will reduce direct and indirect costs
14to consumers by decreasing environmental impacts and by
15avoiding or delaying the need for new generation, transmission,
16and distribution infrastructure. It serves the public interest

 

 

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1to allow electric utilities to recover costs for reasonably and
2prudently incurred expenses for energy efficiency and
3demand-response measures. As used in this Section,
4"cost-effective" means that the measures satisfy the total
5resource cost test. The low-income measures described in
6subsection (f)(4) of this Section shall not be required to meet
7the total resource cost test. For purposes of this Section, the
8terms "energy-efficiency", "demand-response", "electric
9utility", and "total resource cost test" shall have the
10meanings set forth in the Illinois Power Agency Act. For
11purposes of this Section, the amount per kilowatthour means the
12total amount paid for electric service expressed on a per
13kilowatthour basis. For purposes of this Section, the total
14amount paid for electric service includes without limitation
15estimated amounts paid for supply, transmission, distribution,
16surcharges, and add-on-taxes.
17    (b) Electric utilities shall implement cost-effective
18energy efficiency measures to meet the following incremental
19annual energy savings goals:
20        (1) 0.2% of energy delivered in the year commencing
21    June 1, 2008;
22        (2) 0.4% of energy delivered in the year commencing
23    June 1, 2009;
24        (3) 0.6% of energy delivered in the year commencing
25    June 1, 2010;
26        (4) 0.8% of energy delivered in the year commencing

 

 

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1    June 1, 2011;
2        (5) The higher of 1% of energy delivered in the year
3    commencing June 1, 2012, or the amount necessary to produce
4    net lifetime customer savings equal to the cost of any
5    incremental capital investments made during the calendar
6    year 2011 1% of energy delivered in the year commencing
7    June 1, 2012;
8        (6) The higher of 1.4% of energy delivered in the year
9    commencing June 1, 2013, or the amount necessary to produce
10    net lifetime customer savings equal to the cost of any
11    incremental capital investments made during calendar year
12    2012 1.4% of energy delivered in the year commencing June
13    1, 2013;
14        (7) The higher of 1.8% of energy delivered in the year
15    commencing June 1, 2014, or the amount necessary to produce
16    net lifetime customer savings equal to the cost of any
17    incremental capital investment made during calendar year
18    2013 1.8% of energy delivered in the year commencing June
19    1, 2014; and
20        (8) In each year hereafter, the higher of 2% of energy
21    delivered in the year commencing June 1, 2015, or the
22    amount necessary to produce net lifetime customer savings
23    equal to the cost of any incremental capital investment
24    made during the preceding calendar year 2% of energy
25    delivered in the year commencing June 1, 2015 and each year
26    thereafter.

 

 

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1    For purposes of this subsection (b), "incremental capital
2investments" means those investments that exceed the utility's
3capital spend in calendar years 2008, 2009, and 2010 as
4reported in the applicable Federal Energy Regulatory
5Commission Form 2, or if the FERC Form 2 was not filed, in the
6applicable Form 21 ILCC.
7    (c) Electric utilities shall implement cost-effective
8demand-response measures to reduce peak demand by 0.1% over the
9prior year for eligible retail customers, as defined in Section
1016-111.5 of this Act, and for customers that elect hourly
11service from the utility pursuant to Section 16-107 of this
12Act, provided those customers have not been declared
13competitive. This requirement commences June 1, 2008 and
14continues for 10 years.
15    (d) Notwithstanding the requirements of subsections (b)
16and (c) of this Section, an electric utility shall reduce the
17amount of energy efficiency and demand-response measures
18implemented in any single year by an amount necessary to limit
19the estimated average increase in the amounts paid by retail
20customers in connection with electric service due to the cost
21of those measures to:
22        (1) in 2008, no more than 0.5% of the amount paid per
23    kilowatthour by those customers during the year ending May
24    31, 2007;
25        (2) in 2009, the greater of an additional 0.5% of the
26    amount paid per kilowatthour by those customers during the

 

 

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

 

 

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1    that would otherwise create net aggregate bill reductions
2    for its customers.
3    No later than June 30, 2011, the Commission shall review
4the limitation on the amount of energy efficiency and
5demand-response measures implemented pursuant to this Section
6and report to the General Assembly its findings as to whether
7that limitation unduly constrains the procurement of energy
8efficiency and demand-response measures.
9    (e) Electric utilities shall be responsible for overseeing
10the design, development, and filing of energy efficiency and
11demand-response plans with the Commission. Electric utilities
12shall implement 100% of the demand-response measures in the
13plans. Electric utilities shall implement 75% of the energy
14efficiency measures approved by the Commission, and may, as
15part of that implementation, outsource various aspects of
16program development and implementation. The remaining 25% of
17those energy efficiency measures approved by the Commission
18shall be implemented by the Department of Commerce and Economic
19Opportunity, and must be designed in conjunction with the
20utility and the filing process. The Department may outsource
21development and implementation of energy efficiency measures.
22A minimum of 10% of the entire portfolio of cost-effective
23energy efficiency measures shall be procured from units of
24local government, municipal corporations, school districts,
25and community college districts. The Department shall
26coordinate the implementation of these measures.

 

 

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1    The apportionment of the dollars to cover the costs to
2implement the Department's share of the portfolio of energy
3efficiency measures shall be made to the Department once the
4Department has executed grants or contracts for energy
5efficiency measures and provided supporting documentation for
6those grants and the contracts to the utility.
7    The details of the measures implemented by the Department
8shall be submitted by the Department to the Commission in
9connection with the utility's filing regarding the energy
10efficiency and demand-response measures that the utility
11implements.
12    A utility providing approved energy efficiency and
13demand-response measures in the State shall be permitted to
14recover costs of those measures through an automatic adjustment
15clause tariff filed with and approved by the Commission. The
16tariff shall be established outside the context of a general
17rate case. Each year the Commission shall initiate a review to
18reconcile any amounts collected with the actual costs and to
19determine the required adjustment to the annual tariff factor
20to match annual expenditures.
21    Each utility shall include, in its recovery of costs, the
22costs estimated for both the utility's and the Department's
23implementation of energy efficiency and demand-response
24measures. Costs collected by the utility for measures
25implemented by the Department shall be submitted to the
26Department pursuant to Section 605-323 of the Civil

 

 

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1Administrative Code of Illinois and shall be used by the
2Department solely for the purpose of implementing these
3measures. A utility shall not be required to advance any moneys
4to the Department but only to forward such funds as it has
5collected. The Department shall report to the Commission on an
6annual basis regarding the costs actually incurred by the
7Department in the implementation of the measures. Any changes
8to the costs of energy efficiency measures as a result of plan
9modifications shall be appropriately reflected in amounts
10recovered by the utility and turned over to the Department.
11    The portfolio of measures, administered by both the
12utilities and the Department, shall, in combination, be
13designed to achieve the annual savings targets described in
14subsections (b) and (c) of this Section, as modified by
15subsection (d) of this Section.
16    The utility and the Department shall agree upon a
17reasonable portfolio of measures and determine the measurable
18corresponding percentage of the savings goals associated with
19measures implemented by the utility or Department.
20    No utility shall be assessed a penalty under subsection (f)
21of this Section for failure to make a timely filing if that
22failure is the result of a lack of agreement with the
23Department with respect to the allocation of responsibilities
24or related costs or target assignments. In that case, the
25Department and the utility shall file their respective plans
26with the Commission and the Commission shall determine an

 

 

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1appropriate division of measures and programs that meets the
2requirements of this Section.
3    If the Department is unable to meet incremental annual
4performance goals for the portion of the portfolio implemented
5by the Department, then the utility and the Department shall
6jointly submit a modified filing to the Commission explaining
7the performance shortfall and recommending an appropriate
8course going forward, including any program modifications that
9may be appropriate in light of the evaluations conducted under
10item (7) of subsection (f) of this Section. In this case, the
11utility obligation to collect the Department's costs and turn
12over those funds to the Department under this subsection (e)
13shall continue only if the Commission approves the
14modifications to the plan proposed by the Department.
15    (f) No later than November 15, 2007, each electric utility
16shall file an energy efficiency and demand-response plan with
17the Commission to meet the energy efficiency and
18demand-response standards for 2008 through 2010. Every 3 years
19thereafter, each electric utility shall file, no later than
20October 1, an energy efficiency and demand-response plan with
21the Commission. If a utility does not file such a plan by
22October 1 of an applicable year, it shall face a penalty of
23$100,000 per day until the plan is filed. Each utility's plan
24shall set forth the utility's proposals to meet the utility's
25portion of the energy efficiency standards identified in
26subsection (b) and the demand-response standards identified in

 

 

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1subsection (c) of this Section as modified by subsections (d)
2and (e), taking into account the unique circumstances of the
3utility's service territory. The Commission shall seek public
4comment on the utility's plan and shall issue an order
5approving or disapproving each plan within 3 months after its
6submission. If the Commission disapproves a plan, the
7Commission shall, within 30 days, describe in detail the
8reasons for the disapproval and describe a path by which the
9utility may file a revised draft of the plan to address the
10Commission's concerns satisfactorily. If the utility does not
11refile with the Commission within 60 days, the utility shall be
12subject to penalties at a rate of $100,000 per day until the
13plan is filed. This process shall continue, and penalties shall
14accrue, until the utility has successfully filed a portfolio of
15energy efficiency and demand-response measures. Penalties
16shall be deposited into the Energy Efficiency Trust Fund. In
17submitting proposed energy efficiency and demand-response
18plans and funding levels to meet the savings goals adopted by
19this Act the utility shall:
20        (1) Demonstrate that its proposed energy efficiency
21    and demand-response measures will achieve the requirements
22    that are identified in subsections (b) and (c) of this
23    Section, as modified by subsections (d) and (e).
24        (2) Present specific proposals to implement new
25    building and appliance standards that have been placed into
26    effect.

 

 

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1        (3) Present estimates of the total amount paid for
2    electric service expressed on a per kilowatthour basis
3    associated with the proposed portfolio of measures
4    designed to meet the requirements that are identified in
5    subsections (b) and (c) of this Section, as modified by
6    subsections (d) and (e).
7        (4) Coordinate with the Department to present a
8    portfolio of energy efficiency measures proportionate to
9    the share of total annual utility revenues in Illinois from
10    households at or below 150% of the poverty level. The
11    energy efficiency programs shall be targeted to households
12    with incomes at or below 80% of area median income.
13        (5) Demonstrate that its overall portfolio of energy
14    efficiency and demand-response measures, not including
15    programs covered by item (4) of this subsection (f), are
16    cost-effective using the total resource cost test and
17    represent a diverse cross-section of opportunities for
18    customers of all rate classes to participate in the
19    programs.
20        (6) Include a proposed cost-recovery tariff mechanism
21    to fund the proposed energy efficiency and demand-response
22    measures and to ensure the recovery of the prudently and
23    reasonably incurred costs of Commission-approved programs.
24        (7) Provide for an annual independent evaluation of the
25    performance of the cost-effectiveness of the utility's
26    portfolio of measures and the Department's portfolio of

 

 

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1    measures, as well as a full review of the 3-year results of
2    the broader net program impacts and, to the extent
3    practical, for adjustment of the measures on a
4    going-forward basis as a result of the evaluations. The
5    resources dedicated to evaluation shall not exceed 3% of
6    portfolio resources in any given year.
7    (g) No more than 3% of energy efficiency and
8demand-response program revenue may be allocated for
9demonstration of breakthrough equipment and devices.
10    (h) This Section does not apply to an electric utility that
11on December 31, 2005 provided electric service to fewer than
12100,000 customers in Illinois.
13    (i) If, after 2 years, an electric utility fails to meet
14the efficiency standard specified in subsection (b) of this
15Section, as modified by subsections (d) and (e), it shall make
16a contribution to the Low-Income Home Energy Assistance
17Program. The combined total liability for failure to meet the
18goal shall be $1,000,000, which shall be assessed as follows: a
19large electric utility shall pay $665,000, and a medium
20electric utility shall pay $335,000. If, after 3 years, an
21electric utility fails to meet the efficiency standard
22specified in subsection (b) of this Section, as modified by
23subsections (d) and (e), it shall make a contribution to the
24Low-Income Home Energy Assistance Program. The combined total
25liability for failure to meet the goal shall be $1,000,000,
26which shall be assessed as follows: a large electric utility

 

 

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1shall pay $665,000, and a medium electric utility shall pay
2$335,000. In addition, the responsibility for implementing the
3energy efficiency measures of the utility making the payment
4shall be transferred to the Illinois Power Agency if, after 3
5years, or in any subsequent 3-year period, the utility fails to
6meet the efficiency standard specified in subsection (b) of
7this Section, as modified by subsections (d) and (e). The
8Agency shall implement a competitive procurement program to
9procure resources necessary to meet the standards specified in
10this Section as modified by subsections (d) and (e), with costs
11for those resources to be recovered in the same manner as
12products purchased through the procurement plan as provided in
13Section 16-111.5. The Director shall implement this
14requirement in connection with the procurement plan as provided
15in Section 16-111.5.
16    For purposes of this Section, (i) a "large electric
17utility" is an electric utility that, on December 31, 2005,
18served more than 2,000,000 electric customers in Illinois; (ii)
19a "medium electric utility" is an electric utility that, on
20December 31, 2005, served 2,000,000 or fewer but more than
21100,000 electric customers in Illinois; and (iii) Illinois
22electric utilities that are affiliated by virtue of a common
23parent company are considered a single electric utility.
24    (j) If, after 3 years, or any subsequent 3-year period, the
25Department fails to implement the Department's share of energy
26efficiency measures required by the standards in subsection

 

 

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1(b), then the Illinois Power Agency may assume responsibility
2for and control of the Department's share of the required
3energy efficiency measures. The Agency shall implement a
4competitive procurement program to procure resources necessary
5to meet the standards specified in this Section, with the costs
6of these resources to be recovered in the same manner as
7provided for the Department in this Section.
8    (k) No electric utility shall be deemed to have failed to
9meet the energy efficiency standards to the extent any such
10failure is due to a failure of the Department or the Agency.
11(Source: P.A. 95-481, eff. 8-28-07; 95-876, eff. 8-21-08;
1296-33, eff. 7-10-09; 96-159, eff. 8-10-09; 96-1000, eff.
137-2-10.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.".