Illinois General Assembly - Full Text of SB3712
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Full Text of SB3712  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 1/21/2022, by Sen. Chapin Rose


New Act

    Creates the State Power Purchase Agreement Act. Provides that the Smart Energy Design Assistance Center (SEDAC) is designated as the lead agency for the development and promotion of a program to facilitate the deployment of renewable energy power purchase agreements with State agencies. Provides for the selection of qualified renewable energy power purchase agreement project developers. Allows State agencies to enter into renewable energy power purchase agreements with renewable energy developers for the construction and use of solar or wind energy, or both, on State property controlled by the State agency or on which daily operations of the State agency occur. Provides further requirements concerning the awarding of contracts to developers and purchase of power under power purchase agreements. Specifies the duration of power purchase agreement contracts. Provides for third-party financing of renewable energy power purchase agreement projects. Provides for the use of moneys saved by State agencies by entering into renewable energy power purchase agreements. Provides for reporting to the Illinois Commerce Commission. Defines terms. Effective immediately.

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1    AN ACT concerning finance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the State
5Power Purchase Agreement Act.
6    Section 5. Purpose. The purpose of this Act is to obtain
7long-term energy and cost-savings for State agencies by
8facilitating engagement in Power Purchase Agreements in
9connection with buildings, facilities, and lands owned,
10operated, or under the supervision and control of State
11agencies. These agreements will improve and protect the
12health, safety, security, and welfare of the people of this
13State by promoting renewable energy deployment, reducing air
14emissions, and reducing costs.
15    Section 10. Definitions. As used in this Act:
16    "Renewable energy infrastructure" means solar and wind
17energy infrastructure constructed on State property under the
18provisions of a power purchase project agreement.
19    "Renewable energy power purchase agreement" is a long-term
20contract between a party that generates renewable electricity
21(typically an independent power developer) and a State agency
22that purchases electricity.



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1    "Renewable energy power purchase agreement project
2developer" or "developer" means a person or organization with
3a record of successful deployment and operation of renewable
4energy power purchase agreement projects.
5    "Renewable energy project" means any system comprised of
6equipment, devices, or fuels that enable the use or storage of
7renewable energy sources such as wind, solar, geothermal, or
9    "State agency" has the meaning provided in Section 1-7 of
10the Illinois State Auditing Act.
11    Section 15. Smart Energy Design Assistance Center (SEDAC).
12    (a) The Smart Energy Design Assistance Center (SEDAC)
13based at the University of Illinois at Urbana-Champaign is
14hereby designated to be the lead agency for the development
15and promotion of a program to facilitate the deployment of
16renewable energy power purchase agreements with State
17agencies. SEDAC will coordinate its activities with the
18Department of Central Management Services and other relevant
19State agencies, under the direction of the Governor, and will
20have the following duties with respect to this program:
21        (1) assistance to the Department of Central Management
22    Services to assemble a list of qualified renewable energy
23    project developers and to negotiate with such qualified
24    project developers master service contracts and pricing
25    schedules;



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1        (2) development of a standardized power purchase
2    agreement contract process and standard contract
3    documents, including requests for qualifications, requests
4    for proposals, and reporting metrics and content on the
5    operations and status of the renewable energy power
6    purchase project agreement; and
7        (3) promotion of the renewable energy power purchase
8    agreements to all State agencies.
9    (b) SEDAC shall assist State agencies in identifying,
10evaluating, and implementing cost-effective renewable energy
11power purchase agreements at their facilities. The assistance
12shall include: (1) notifying State agencies of this Act; (2)
13apprising State agencies of opportunities to implement
14renewable energy power purchase agreements; (3) providing
15technical and analytical support, including assessment and
16identification of site specific renewable energy
17opportunities; (4) reviewing and verifying estimates for
18energy savings and emissions reductions; and (5) assisting in
19the structuring and arranging of renewable energy power
20purchase agreements and projects.
21    (c) SEDAC is authorized to fix, charge, and collect
22reasonable fees, not to exceed 2% of the energy cost savings of
23the renewable energy power purchase agreement for any
24administrative or technical support provided by SEDAC, or its
25designee, under this subsection (c) from the State agency that
26uses its technical support services. State agencies are



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1authorized to add the costs of these fees to the total cost of
2the renewable energy power purchase agreement.
3    (d) The Governor is encouraged to develop and submit to
4the General Assembly a regular or supplemental budget request
5for the additional funds and staffing required by the Smart
6Energy Design Assistance Center to fulfill the duties required
7under this Section.
8    Section 20. Selection of qualified renewable energy power
9purchase agreement project developers. The State process of
10implementing renewable energy power purchase agreements shall
11be as provided in this Section.
12    (a) Regarding requests for qualifications, the Department
13Central Management Services is authorized to assemble a list
14of qualified renewable energy power purchase agreements
15project developers, in accordance with the provisions of the
16Illinois Procurement Code. The Department of Central
17Management Services shall attempt to use objective criteria in
18the selection process. The criteria for evaluation shall
19include substantive factors to assess the capability of the
20qualified renewable energy power purchase agreement project
21developers in the areas of design, engineering, installation,
22maintenance, and repairs associated with renewable energy
23systems. The substantive factors shall be as follows: (1)
24experience in the design, implementation, and maintenance of
25renewable energy systems; (2) post-installation project



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1monitoring, data collection, and reporting of savings; (3)
2overall project experience and qualifications; (4) management
3capability; (4) ability to access long-term financing; (5)
4experience with projects of similar size and scope; and (6)
5other factors determined by the State agency to be relevant
6and appropriate and relate to the ability to perform the
8    (b) Regarding requests for proposals, before entering into
9a renewable energy power purchase agreement under this
10Section, a State agency shall issue a request for proposals
11from up to 3 qualified renewable energy power purchase
12agreement project developers. A State agency may thereafter
13award the performance contract to the qualified purchase
14agreement project developer that best meets the needs of the
15State agency, which need not be the lowest cost provided. A
16cost-effective feasibility analysis shall be prepared in
17response to the request for proposals. The feasibility
18analysis included in the response to the request for proposals
19shall serve as the selection document for purposes of
20selecting a renewable energy powers purchase agreement project
21developer to engage in final contract negotiations. Factors to
22be included in selecting among the renewable energy power
23purchase agreement project developers include contract terms,
24comprehensiveness of the proposal, technical feasibility,
25experience, and overall benefits to the State agency.



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1    Section 25. Renewable energy power purchase agreement
3    (a) Subject to the provisions of Section 20, a State
4agency may enter into a renewable energy power purchase
5agreement with renewable energy developers for the
6construction and use of solar or wind energy, or both, on State
7property controlled by the State agency or on which daily
8operations of the State agency occur.
9    (b) State agencies choosing to enter into a renewable
10energy power purchase agreement under subsection (a) shall
11enter into such agreement with a developer chosen through a
12process in accordance with Section 20 and otherwise meeting
13the requirements of the Illinois Procurement Code regarding
14requests for proposals. A developer bidding for a contract
15under this Section shall include a list of potential
16third-party investors that would be ready and willing to
17invest in the project upon awarding of the contract. A bid made
18without a list of potential investors shall not be accepted
19and no contract shall be awarded.
20    (c) The developer awarded a contract under subsection (b)
21shall be provided land and facility access to the property
22used by the State agency for the purpose of constructing and
23managing a renewable energy infrastructure. The State agency,
24based upon the renewable energy power purchase agreement,
25shall then be able to purchase the power produced by the
26renewable energy infrastructure from the developer at a lower



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1rate than it would otherwise pay for power. The developer
2shall be responsible for the construction and management of
3the renewable energy infrastructure on property used by the
4State agency.
5    (d) Upon the awarding of a contract under subsection (b),
6and in addition to the provisions of subsection (c), the
7potential investors listed in the developer's bid shall be
8contacted for the purposes of investing capital toward the
9construction and operation of a renewable energy
10infrastructure on property used by the State agency as
11provided under the renewable energy power purchase agreement.
12The investor shall be compensated through a subsequent
13contract entered into between the investor and the State
14agency. Failure of the developer to secure an investor
15provided for in its bid may, at the discretion of the State
16agency, render the contract between the developer and the
17State agency void.
18    (e) No State agency that has entered into a renewable
19energy power purchase agreement under this Section shall
20purchase more power than is that State agency's normal
21consumption for a given yearly period, nor shall that State
22agency contract for the construction of renewable energy
23infrastructure estimated to produce more power than is that
24State agency's normal consumption for a given yearly period.
25    (f) Each State agency that has entered into a renewable
26energy power purchase agreement under this Section shall,



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1within 2 years after entering into the agreement, issue a
2report to the General Assembly on the operations and status of
3the renewable energy power purchase agreement.
4    Section 30. Duration of contracts; financing. A renewable
5energy power purchase agreement, and payments provided
6thereunder, shall extend for periods of between 5 and 25
7years. The allowable length of the contract may also reflect
8the useful life of renewable energy equipment and facilities.
9A renewable energy power purchase agreement may provide for
10financing, including tax incentives by a third party. The
11contract for third-party financing may be separate from the
12renewable energy power purchase agreement. A separate contract
13for third-party financing must include a provision that the
14third-party financier must not be granted rights or privileges
15that exceed the rights and privileges available to the
16renewable energy power purchase agreement project developer.
17    Section 35. Use of moneys. The State agency engaging in
18the renewable energy power purchase agreement shall retain the
19savings achieved by entering into the renewable energy power
20purchase agreement contract. State agencies are encouraged to
21reinvest savings wherever practical into additional cost
22savings measures. Unless otherwise provided by law, a State
23agency shall use funds designated for operating and capital
24expenditures or utilities for any renewable energy power



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1purchase agreement.
2    Section 40. Reports. For all projects carried out under
3this Act, the State agency shall report the name of the
4project, the project host, the investment on the project, the
5energy savings, the energy cost savings, and the greenhouse
6gas emission reductions to the Illinois Commerce Commission.
7The Illinois Commerce Commission may report energy savings and
8greenhouse gas emission reductions to the federal Energy
9Information Administration under the Energy Policy Act of 1992
10reporting standards.
11    Section 99. Effective date. This Act takes effect upon
12becoming law.