Full Text of HB6202 96th General Assembly
HB6202sam002 96TH GENERAL ASSEMBLY
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Sen. Don Harmon
Filed: 5/5/2010
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| AMENDMENT TO HOUSE BILL 6202
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| AMENDMENT NO. ______. Amend House Bill 6202 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Illinois Power Agency Act is amended by | 5 |
| changing Sections 1-56 and 1-75 as follows: | 6 |
| (20 ILCS 3855/1-56) | 7 |
| Sec. 1-56. Illinois Power Agency Renewable Energy | 8 |
| Resources Fund. | 9 |
| (a) The Illinois Power Agency Renewable Energy Resources | 10 |
| Fund is created as a special fund in the State treasury. | 11 |
| (b) The Illinois Power Agency Renewable Energy Resources | 12 |
| Fund shall be administered by the Agency to procure renewable | 13 |
| energy resources. Prior to June 1, 2011, resources procured | 14 |
| pursuant to this Section shall be procured from facilities | 15 |
| located in Illinois, provided the resources are available from | 16 |
| those facilities. If resources are not available in Illinois, |
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| then they shall be procured in states that adjoin Illinois. If | 2 |
| resources are not available in Illinois or in states that | 3 |
| adjoin Illinois, then they may be purchased elsewhere. | 4 |
| Beginning June 1, 2011, resources procured pursuant to this | 5 |
| Section shall be procured from facilities located in Illinois | 6 |
| or states that adjoin Illinois. If resources are not available | 7 |
| in Illinois or in states that adjoin Illinois, then they may be | 8 |
| procured elsewhere. To the extent available, at least 75% of | 9 |
| these renewable energy resources shall come from wind | 10 |
| generation . Of the renewable energy resources procured | 11 |
| pursuant to this Section at least the following specified | 12 |
| percentages shall come from photovoltaics on the following | 13 |
| schedule: 0.5% by June 1, 2012; 1.5% by June 1, 2013; 3% by | 14 |
| June 1, 2014; and 6% by June 1, 2015 and thereafter and, | 15 |
| starting June 1, 2015, at least 6% of the renewable energy | 16 |
| resources used to meet these standards shall come from solar | 17 |
| photovoltaics . | 18 |
| (c) The Agency shall procure renewable energy resources at | 19 |
| least once each year in conjunction with a procurement event | 20 |
| for electric utilities required to comply with Section 1-75 of | 21 |
| the Act and shall, whenever possible, enter into long-term | 22 |
| contracts. | 23 |
| (d) The price paid to procure renewable energy credits | 24 |
| using monies from the Illinois Power Agency Renewable Energy | 25 |
| Resources Fund shall not exceed the winning bid prices paid for | 26 |
| like resources procured for electric utilities required to |
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| comply with Section 1-75 of this Act. | 2 |
| (e) All renewable energy credits procured using monies from | 3 |
| the Illinois Power Agency Renewable Energy Resources Fund shall | 4 |
| be permanently retired. | 5 |
| (f) The procurement process described in this Section is | 6 |
| exempt from the requirements of the Illinois Procurement Code, | 7 |
| pursuant to Section 20-10 of that Code. | 8 |
| (g) All disbursements from the Illinois Power Agency | 9 |
| Renewable Energy Resources Fund shall be made only upon | 10 |
| warrants of the Comptroller drawn upon the Treasurer as | 11 |
| custodian of the Fund upon vouchers signed by the Director or | 12 |
| by the person or persons designated by the Director for that | 13 |
| purpose. The Comptroller is authorized to draw the warrant upon | 14 |
| vouchers so signed. The Treasurer shall accept all warrants so | 15 |
| signed and shall be released from liability for all payments | 16 |
| made on those warrants. | 17 |
| (h) The Illinois Power Agency Renewable Energy Resources | 18 |
| Fund shall not be subject to sweeps, administrative charges, or | 19 |
| chargebacks, including, but not limited to, those authorized | 20 |
| under Section 8h of the State Finance Act, that would in any | 21 |
| way result in the transfer of any funds from this Fund to any | 22 |
| other fund of this State or in having any such funds utilized | 23 |
| for any purpose other than the express purposes set forth in | 24 |
| this Section.
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| (Source: P.A. 96-159, eff. 8-10-09.) |
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| (20 ILCS 3855/1-75) | 2 |
| Sec. 1-75. Planning and Procurement Bureau. The Planning | 3 |
| and Procurement Bureau has the following duties and | 4 |
| responsibilities: | 5 |
| (a) The Planning and Procurement Bureau shall each | 6 |
| year, beginning in 2008, develop procurement plans and | 7 |
| conduct competitive procurement processes in accordance | 8 |
| with the requirements of Section 16-111.5 of the Public | 9 |
| Utilities Act for the eligible retail customers of electric | 10 |
| utilities that on December 31, 2005 provided electric | 11 |
| service to at least 100,000 customers in Illinois. For the | 12 |
| purposes of this Section, the term "eligible retail | 13 |
| customers" has the same definition as found in Section | 14 |
| 16-111.5(a) of the Public Utilities Act. | 15 |
| (1) The Agency shall each year, beginning in 2008, | 16 |
| as needed, issue a request for qualifications for | 17 |
| experts or expert consulting firms to develop the | 18 |
| procurement plans in accordance with Section 16-111.5 | 19 |
| of the Public Utilities Act. In order to qualify an | 20 |
| expert or expert consulting firm must have: | 21 |
| (A) direct previous experience assembling | 22 |
| large-scale power supply plans or portfolios for | 23 |
| end-use customers; | 24 |
| (B) an advanced degree in economics, | 25 |
| mathematics, engineering, risk management, or a | 26 |
| related area of study; |
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| (C) 10 years of experience in the electricity | 2 |
| sector, including managing supply risk; | 3 |
| (D) expertise in wholesale electricity market | 4 |
| rules, including those established by the Federal | 5 |
| Energy Regulatory Commission and regional | 6 |
| transmission organizations; | 7 |
| (E) expertise in credit protocols and | 8 |
| familiarity with contract protocols; | 9 |
| (F) adequate resources to perform and fulfill | 10 |
| the required functions and responsibilities; and | 11 |
| (G) the absence of a conflict of interest and | 12 |
| inappropriate bias for or against potential | 13 |
| bidders or the affected electric utilities. | 14 |
| (2) The Agency shall each year, as needed, issue a | 15 |
| request for qualifications for a procurement | 16 |
| administrator to conduct the competitive procurement | 17 |
| processes in accordance with Section 16-111.5 of the | 18 |
| Public Utilities Act. In order to qualify an expert or | 19 |
| expert consulting firm must have: | 20 |
| (A) direct previous experience administering a | 21 |
| large-scale competitive procurement process; | 22 |
| (B) an advanced degree in economics, | 23 |
| mathematics, engineering, or a related area of | 24 |
| study; | 25 |
| (C) 10 years of experience in the electricity | 26 |
| sector, including risk management experience; |
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| (D) expertise in wholesale electricity market | 2 |
| rules, including those established by the Federal | 3 |
| Energy Regulatory Commission and regional | 4 |
| transmission organizations; | 5 |
| (E) expertise in credit and contract | 6 |
| protocols; | 7 |
| (F) adequate resources to perform and fulfill | 8 |
| the required functions and responsibilities; and | 9 |
| (G) the absence of a conflict of interest and | 10 |
| inappropriate bias for or against potential | 11 |
| bidders or the affected electric utilities. | 12 |
| (3) The Agency shall provide affected utilities | 13 |
| and other interested parties with the lists of | 14 |
| qualified experts or expert consulting firms | 15 |
| identified through the request for qualifications | 16 |
| processes that are under consideration to develop the | 17 |
| procurement plans and to serve as the procurement | 18 |
| administrator. The Agency shall also provide each | 19 |
| qualified expert's or expert consulting firm's | 20 |
| response to the request for qualifications. All | 21 |
| information provided under this subparagraph shall | 22 |
| also be provided to the Commission. The Agency may | 23 |
| provide by rule for fees associated with supplying the | 24 |
| information to utilities and other interested parties. | 25 |
| These parties shall, within 5 business days, notify the | 26 |
| Agency in writing if they object to any experts or |
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| expert consulting firms on the lists. Objections shall | 2 |
| be based on: | 3 |
| (A) failure to satisfy qualification criteria; | 4 |
| (B) identification of a conflict of interest; | 5 |
| or | 6 |
| (C) evidence of inappropriate bias for or | 7 |
| against potential bidders or the affected | 8 |
| utilities. | 9 |
| The Agency shall remove experts or expert | 10 |
| consulting firms from the lists within 10 days if there | 11 |
| is a reasonable basis for an objection and provide the | 12 |
| updated lists to the affected utilities and other | 13 |
| interested parties. If the Agency fails to remove an | 14 |
| expert or expert consulting firm from a list, an | 15 |
| objecting party may seek review by the Commission | 16 |
| within 5 days thereafter by filing a petition, and the | 17 |
| Commission shall render a ruling on the petition within | 18 |
| 10 days. There is no right of appeal of the | 19 |
| Commission's ruling. | 20 |
| (4) The Agency shall issue requests for proposals | 21 |
| to the qualified experts or expert consulting firms to | 22 |
| develop a procurement plan for the affected utilities | 23 |
| and to serve as procurement administrator. | 24 |
| (5) The Agency shall select an expert or expert | 25 |
| consulting firm to develop procurement plans based on | 26 |
| the proposals submitted and shall award one-year |
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| contracts to those selected with an option for the | 2 |
| Agency for a one-year renewal. | 3 |
| (6) The Agency shall select an expert or expert | 4 |
| consulting firm, with approval of the Commission, to | 5 |
| serve as procurement administrator based on the | 6 |
| proposals submitted. If the Commission rejects, within | 7 |
| 5 days, the Agency's selection, the Agency shall submit | 8 |
| another recommendation within 3 days based on the | 9 |
| proposals submitted. The Agency shall award a one-year | 10 |
| contract to the expert or expert consulting firm so | 11 |
| selected with Commission approval with an option for | 12 |
| the Agency for a one-year renewal. | 13 |
| (b) The experts or expert consulting firms retained by | 14 |
| the Agency shall, as appropriate, prepare procurement | 15 |
| plans, and conduct a competitive procurement process as | 16 |
| prescribed in Section 16-111.5 of the Public Utilities Act, | 17 |
| to ensure adequate, reliable, affordable, efficient, and | 18 |
| environmentally sustainable electric service at the lowest | 19 |
| total cost over time, taking into account any benefits of | 20 |
| price stability, for eligible retail customers of electric | 21 |
| utilities that on December 31, 2005 provided electric | 22 |
| service to at least 100,000 customers in the State of | 23 |
| Illinois. | 24 |
| (c) Renewable portfolio standard. | 25 |
| (1) The procurement plans shall include | 26 |
| cost-effective renewable energy resources. A minimum |
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| percentage of each utility's total supply to serve the | 2 |
| load of eligible retail customers, as defined in | 3 |
| Section 16-111.5(a) of the Public Utilities Act, | 4 |
| procured for each of the following years shall be | 5 |
| generated from cost-effective renewable energy | 6 |
| resources: at least 2% by June 1, 2008; at least 4% by | 7 |
| June 1, 2009; at least 5% by June 1, 2010; at least 6% | 8 |
| by June 1, 2011; at least 7% by June 1, 2012; at least | 9 |
| 8% by June 1, 2013; at least 9% by June 1, 2014; at | 10 |
| least 10% by June 1, 2015; and increasing by at least | 11 |
| 1.5% each year thereafter to at least 25% by June 1, | 12 |
| 2025. To the extent that it is available, at least 75% | 13 |
| of the renewable energy resources used to meet these | 14 |
| standards shall come from wind generation and, | 15 |
| beginning on June 1, 2011 2015 , at least the following | 16 |
| percentages 6% of the renewable energy resources used | 17 |
| to meet these standards shall come from photovoltaics | 18 |
| on the following schedule: 0.5% by June 1, 2012, 1.5% | 19 |
| by June 1, 2013; 3% by June 1, 2014; and 6% by June 1, | 20 |
| 2015 and thereafter . For purposes of this subsection | 21 |
| (c), "cost-effective" means that the costs of | 22 |
| procuring renewable energy resources do not cause the | 23 |
| limit stated in paragraph (2) of this subsection (c) to | 24 |
| be exceeded and do not exceed benchmarks based on | 25 |
| market prices for renewable energy resources in the | 26 |
| region, which shall be developed by the procurement |
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| administrator, in consultation with the Commission | 2 |
| staff, Agency staff, and the procurement monitor and | 3 |
| shall be subject to Commission review and approval. | 4 |
| (2) For purposes of this subsection (c), the | 5 |
| required procurement of cost-effective renewable | 6 |
| energy resources for a particular year shall be | 7 |
| measured as a percentage of the actual amount of | 8 |
| electricity (megawatt-hours) supplied by the electric | 9 |
| utility to eligible retail customers in the planning | 10 |
| year ending immediately prior to the procurement. For | 11 |
| purposes of this subsection (c), the amount paid per | 12 |
| kilowatthour means the total amount paid for electric | 13 |
| service expressed on a per kilowatthour basis. For | 14 |
| purposes of this subsection (c), the total amount paid | 15 |
| for electric service includes without limitation | 16 |
| amounts paid for supply, transmission, distribution, | 17 |
| surcharges, and add-on taxes. | 18 |
| Notwithstanding the requirements of this | 19 |
| subsection (c), the total of renewable energy | 20 |
| resources procured pursuant to the procurement plan | 21 |
| for any single year shall be reduced by an amount | 22 |
| necessary to limit the annual estimated average net | 23 |
| increase due to the costs of these resources included | 24 |
| in the amounts paid by eligible retail customers in | 25 |
| connection with electric service to: | 26 |
| (A) in 2008, no more than 0.5% of the amount |
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| paid per kilowatthour by those customers during | 2 |
| the year ending May 31, 2007; | 3 |
| (B) in 2009, the greater of an additional 0.5% | 4 |
| of the amount paid per kilowatthour by those | 5 |
| customers during the year ending May 31, 2008 or 1% | 6 |
| of the amount paid per kilowatthour by those | 7 |
| customers during the year ending May 31, 2007; | 8 |
| (C) in 2010, the greater of an additional 0.5% | 9 |
| of the amount paid per kilowatthour by those | 10 |
| customers during the year ending May 31, 2009 or | 11 |
| 1.5% of the amount paid per kilowatthour by those | 12 |
| customers during the year ending May 31, 2007; | 13 |
| (D) in 2011, the greater of an additional 0.5% | 14 |
| of the amount paid per kilowatthour by those | 15 |
| customers during the year ending May 31, 2010 or 2% | 16 |
| of the amount paid per kilowatthour by those | 17 |
| customers during the year ending May 31, 2007; and | 18 |
| (E) thereafter, the amount of renewable energy | 19 |
| resources procured pursuant to the procurement | 20 |
| plan for any single year shall be reduced by an | 21 |
| amount necessary to limit the estimated average | 22 |
| net increase due to the cost of these resources | 23 |
| included in the amounts paid by eligible retail | 24 |
| customers in connection with electric service to | 25 |
| no more than the greater of 2.015% of the amount | 26 |
| paid per kilowatthour by those customers during |
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| the year ending May 31, 2007 or the incremental | 2 |
| amount per kilowatthour paid for these resources | 3 |
| in 2011. | 4 |
| No later than June 30, 2011, the Commission shall | 5 |
| review the limitation on the amount of renewable energy | 6 |
| resources procured pursuant to this subsection (c) and | 7 |
| report to the General Assembly its findings as to | 8 |
| whether that limitation unduly constrains the | 9 |
| procurement of cost-effective renewable energy | 10 |
| resources. | 11 |
| (3) Through June 1, 2011, renewable energy | 12 |
| resources shall be counted for the purpose of meeting | 13 |
| the renewable energy standards set forth in paragraph | 14 |
| (1) of this subsection (c) only if they are generated | 15 |
| from facilities located in the State, provided that | 16 |
| cost-effective renewable energy resources are | 17 |
| available from those facilities. If those | 18 |
| cost-effective resources are not available in | 19 |
| Illinois, they shall be procured in states that adjoin | 20 |
| Illinois and may be counted towards compliance. If | 21 |
| those cost-effective resources are not available in | 22 |
| Illinois or in states that adjoin Illinois, they shall | 23 |
| be purchased elsewhere and shall be counted towards | 24 |
| compliance. After June 1, 2011, cost-effective | 25 |
| renewable energy resources located in Illinois and in | 26 |
| states that adjoin Illinois may be counted towards |
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| compliance with the standards set forth in paragraph | 2 |
| (1) of this subsection (c). If those cost-effective | 3 |
| resources are not available in Illinois or in states | 4 |
| that adjoin Illinois, they shall be purchased | 5 |
| elsewhere and shall be counted towards compliance. | 6 |
| (4) The electric utility shall retire all | 7 |
| renewable energy credits used to comply with the | 8 |
| standard. | 9 |
| (5) Beginning with the year commencing June 1, | 10 |
| 2010, an electric utility subject to this subsection | 11 |
| (c) shall apply the lesser of the maximum alternative | 12 |
| compliance payment rate or the most recent estimated | 13 |
| alternative compliance payment rate for its service | 14 |
| territory for the corresponding compliance period, | 15 |
| established pursuant to subsection (d) of Section | 16 |
| 16-115D of the Public Utilities Act to its retail | 17 |
| customers that take service pursuant to the electric | 18 |
| utility's hourly pricing tariff or tariffs. The | 19 |
| electric utility shall retain all amounts collected as | 20 |
| a result of the application of the alternative | 21 |
| compliance payment rate or rates to such customers, | 22 |
| and, beginning in 2011, the utility shall include in | 23 |
| the information provided under item (1) of subsection | 24 |
| (d) of Section 16-111.5 of the Public Utilities Act the | 25 |
| amounts collected under the alternative compliance | 26 |
| payment rate or rates for the prior year ending May 31. |
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| Notwithstanding any limitation on the procurement of | 2 |
| renewable energy resources imposed by item (2) of this | 3 |
| subsection (c), the Agency shall increase its spending | 4 |
| on the purchase of renewable energy resources to be | 5 |
| procured by the electric utility for the next plan year | 6 |
| by an amount equal to the amounts collected by the | 7 |
| utility under the alternative compliance payment rate | 8 |
| or rates in the prior year ending May 31. | 9 |
| (d) Clean coal portfolio standard. | 10 |
| (1) The procurement plans shall include electricity | 11 |
| generated using clean coal. Each utility shall enter into | 12 |
| one or more sourcing agreements with the initial clean coal | 13 |
| facility, as provided in paragraph (3) of this subsection | 14 |
| (d), covering electricity generated by the initial clean | 15 |
| coal facility representing at least 5% of each utility's | 16 |
| total supply to serve the load of eligible retail customers | 17 |
| in 2015 and each year thereafter, as described in paragraph | 18 |
| (3) of this subsection (d), subject to the limits specified | 19 |
| in paragraph (2) of this subsection (d). It is the goal of | 20 |
| the State that by January 1, 2025, 25% of the electricity | 21 |
| used in the State shall be generated by cost-effective | 22 |
| clean coal facilities. For purposes of this subsection (d), | 23 |
| "cost-effective" means that the expenditures pursuant to | 24 |
| such sourcing agreements do not cause the limit stated in | 25 |
| paragraph (2) of this subsection (d) to be exceeded and do | 26 |
| not exceed cost-based benchmarks, which shall be developed |
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| to assess all expenditures pursuant to such sourcing | 2 |
| agreements covering electricity generated by clean coal | 3 |
| facilities, other than the initial clean coal facility, by | 4 |
| the procurement administrator, in consultation with the | 5 |
| Commission staff, Agency staff, and the procurement | 6 |
| monitor and shall be subject to Commission review and | 7 |
| approval. | 8 |
| (A) A utility party to a sourcing agreement shall | 9 |
| immediately retire any emission credits that it | 10 |
| receives in connection with the electricity covered by | 11 |
| such agreement. | 12 |
| (B) Utilities shall maintain adequate records | 13 |
| documenting the purchases under the sourcing agreement | 14 |
| to comply with this subsection (d) and shall file an | 15 |
| accounting with the load forecast that must be filed | 16 |
| with the Agency by July 15 of each year, in accordance | 17 |
| with subsection (d) of Section 16-111.5 of the Public | 18 |
| Utilities Act. | 19 |
| (C) A utility shall be deemed to have complied with | 20 |
| the clean coal portfolio standard specified in this | 21 |
| subsection (d) if the utility enters into a sourcing | 22 |
| agreement as required by this subsection (d). | 23 |
| (2) For purposes of this subsection (d), the required | 24 |
| execution of sourcing agreements with the initial clean | 25 |
| coal facility for a particular year shall be measured as a | 26 |
| percentage of the actual amount of electricity |
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| (megawatt-hours) supplied by the electric utility to | 2 |
| eligible retail customers in the planning year ending | 3 |
| immediately prior to the agreement's execution. For | 4 |
| purposes of this subsection (d), the amount paid per | 5 |
| kilowatthour means the total amount paid for electric | 6 |
| service expressed on a per kilowatthour basis. For purposes | 7 |
| of this subsection (d), the total amount paid for electric | 8 |
| service includes without limitation amounts paid for | 9 |
| supply, transmission, distribution, surcharges and add-on | 10 |
| taxes. | 11 |
| Notwithstanding the requirements of this subsection | 12 |
| (d), the total amount paid under sourcing agreements with | 13 |
| clean coal facilities pursuant to the procurement plan for | 14 |
| any given year shall be reduced by an amount necessary to | 15 |
| limit the annual estimated average net increase due to the | 16 |
| costs of these resources included in the amounts paid by | 17 |
| eligible retail customers in connection with electric | 18 |
| service to: | 19 |
| (A) in 2010, no more than 0.5% of the amount | 20 |
| paid per kilowatthour by those customers during | 21 |
| the year ending May 31, 2009; | 22 |
| (B) in 2011, the greater of an additional 0.5% | 23 |
| of the amount paid per kilowatthour by those | 24 |
| customers during the year ending May 31, 2010 or 1% | 25 |
| of the amount paid per kilowatthour by those | 26 |
| customers during the year ending May 31, 2009; |
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| (C) in 2012, the greater of an additional 0.5% | 2 |
| of the amount paid per kilowatthour by those | 3 |
| customers during the year ending May 31, 2011 or | 4 |
| 1.5% of the amount paid per kilowatthour by those | 5 |
| customers during the year ending May 31, 2009; | 6 |
| (D) in 2013, the greater of an additional 0.5% | 7 |
| of the amount paid per kilowatthour by those | 8 |
| customers during the year ending May 31, 2012 or 2% | 9 |
| of the amount paid per kilowatthour by those | 10 |
| customers during the year ending May 31, 2009; and | 11 |
| (E) thereafter, the total amount paid under | 12 |
| sourcing agreements with clean coal facilities | 13 |
| pursuant to the procurement plan for any single | 14 |
| year shall be reduced by an amount necessary to | 15 |
| limit the estimated average net increase due to the | 16 |
| cost of these resources included in the amounts | 17 |
| paid by eligible retail customers in connection | 18 |
| with electric service to no more than the greater | 19 |
| of (i) 2.015% of the amount paid per kilowatthour | 20 |
| by those customers during the year ending May 31, | 21 |
| 2009 or (ii) the incremental amount per | 22 |
| kilowatthour paid for these resources in 2013. | 23 |
| These requirements may be altered only as provided | 24 |
| by statute.
No later than June 30, 2015, the | 25 |
| Commission shall review the limitation on the | 26 |
| total amount paid under sourcing agreements, if |
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| any, with clean coal facilities pursuant to this | 2 |
| subsection (d) and report to the General Assembly | 3 |
| its findings as to whether that limitation unduly | 4 |
| constrains the amount of electricity generated by | 5 |
| cost-effective clean coal facilities that is | 6 |
| covered by sourcing agreements. | 7 |
| (3) Initial clean coal facility. In order to promote | 8 |
| development of clean coal facilities in Illinois, each | 9 |
| electric utility subject to this Section shall execute a | 10 |
| sourcing agreement to source electricity from a proposed | 11 |
| clean coal facility in Illinois (the "initial clean coal | 12 |
| facility") that will have a nameplate capacity of at least | 13 |
| 500 MW when commercial operation commences, that has a | 14 |
| final Clean Air Act permit on the effective date of this | 15 |
| amendatory Act of the 95th General Assembly, and that will | 16 |
| meet the definition of clean coal facility in Section 1-10 | 17 |
| of this Act when commercial operation commences. The | 18 |
| sourcing agreements with this initial clean coal facility | 19 |
| shall be subject to both approval of the initial clean coal | 20 |
| facility by the General Assembly and satisfaction of the | 21 |
| requirements of paragraph (4) of this subsection (d) and | 22 |
| shall be executed within 90 days after any such approval by | 23 |
| the General Assembly. The Agency and the Commission shall | 24 |
| have authority to inspect all books and records associated | 25 |
| with the initial clean coal facility during the term of | 26 |
| such a sourcing agreement. A utility's sourcing agreement |
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| for electricity produced by the initial clean coal facility | 2 |
| shall include: | 3 |
| (A) a formula contractual price (the "contract | 4 |
| price") approved pursuant to paragraph (4) of this | 5 |
| subsection (d), which shall: | 6 |
| (i) be determined using a cost of service | 7 |
| methodology employing either a level or deferred | 8 |
| capital recovery component, based on a capital | 9 |
| structure consisting of 45% equity and 55% debt, | 10 |
| and a return on equity as may be approved by the | 11 |
| Federal Energy Regulatory Commission, which in any | 12 |
| case may not exceed the lower of 11.5% or the rate | 13 |
| of return approved by the General Assembly | 14 |
| pursuant to paragraph (4) of this subsection (d); | 15 |
| and | 16 |
| (ii) provide that all miscellaneous net | 17 |
| revenue, including but not limited to net revenue | 18 |
| from the sale of emission allowances, if any, | 19 |
| substitute natural gas, if any, grants or other | 20 |
| support provided by the State of Illinois or the | 21 |
| United States Government, firm transmission | 22 |
| rights, if any, by-products produced by the | 23 |
| facility, energy or capacity derived from the | 24 |
| facility and not covered by a sourcing agreement | 25 |
| pursuant to paragraph (3) of this subsection (d) or | 26 |
| item (5) of subsection (d) of Section 16-115 of the |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| Public Utilities Act, whether generated from the | 2 |
| synthesis gas derived from coal, from SNG, or from | 3 |
| natural gas, shall be credited against the revenue | 4 |
| requirement for this initial clean coal facility; | 5 |
| (B) power purchase provisions, which shall: | 6 |
| (i) provide that the utility party to such | 7 |
| sourcing agreement shall pay the contract price | 8 |
| for electricity delivered under such sourcing | 9 |
| agreement; | 10 |
| (ii) require delivery of electricity to the | 11 |
| regional transmission organization market of the | 12 |
| utility that is party to such sourcing agreement; | 13 |
| (iii) require the utility party to such | 14 |
| sourcing agreement to buy from the initial clean | 15 |
| coal facility in each hour an amount of energy | 16 |
| equal to all clean coal energy made available from | 17 |
| the initial clean coal facility during such hour | 18 |
| times a fraction, the numerator of which is such | 19 |
| utility's retail market sales of electricity | 20 |
| (expressed in kilowatthours sold) in the State | 21 |
| during the prior calendar month and the | 22 |
| denominator of which is the total retail market | 23 |
| sales of electricity (expressed in kilowatthours | 24 |
| sold) in the State by utilities during such prior | 25 |
| month and the sales of electricity (expressed in | 26 |
| kilowatthours sold) in the State by alternative |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| retail electric suppliers during such prior month | 2 |
| that are subject to the requirements of this | 3 |
| subsection (d) and paragraph (5) of subsection (d) | 4 |
| of Section 16-115 of the Public Utilities Act, | 5 |
| provided that the amount purchased by the utility | 6 |
| in any year will be limited by paragraph (2) of | 7 |
| this subsection (d); and | 8 |
| (iv) be considered pre-existing contracts in | 9 |
| such utility's procurement plans for eligible | 10 |
| retail customers; | 11 |
| (C) contract for differences provisions, which | 12 |
| shall: | 13 |
| (i) require the utility party to such sourcing | 14 |
| agreement to contract with the initial clean coal | 15 |
| facility in each hour with respect to an amount of | 16 |
| energy equal to all clean coal energy made | 17 |
| available from the initial clean coal facility | 18 |
| during such hour times a fraction, the numerator of | 19 |
| which is such utility's retail market sales of | 20 |
| electricity (expressed in kilowatthours sold) in | 21 |
| the utility's service territory in the State | 22 |
| during the prior calendar month and the | 23 |
| denominator of which is the total retail market | 24 |
| sales of electricity (expressed in kilowatthours | 25 |
| sold) in the State by utilities during such prior | 26 |
| month and the sales of electricity (expressed in |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| kilowatthours sold) in the State by alternative | 2 |
| retail electric suppliers during such prior month | 3 |
| that are subject to the requirements of this | 4 |
| subsection (d) and paragraph (5) of subsection (d) | 5 |
| of Section 16-115 of the Public Utilities Act, | 6 |
| provided that the amount paid by the utility in any | 7 |
| year will be limited by paragraph (2) of this | 8 |
| subsection (d); | 9 |
| (ii) provide that the utility's payment | 10 |
| obligation in respect of the quantity of | 11 |
| electricity determined pursuant to the preceding | 12 |
| clause (i) shall be limited to an amount equal to | 13 |
| (1) the difference between the contract price | 14 |
| determined pursuant to subparagraph (A) of | 15 |
| paragraph (3) of this subsection (d) and the | 16 |
| day-ahead price for electricity delivered to the | 17 |
| regional transmission organization market of the | 18 |
| utility that is party to such sourcing agreement | 19 |
| (or any successor delivery point at which such | 20 |
| utility's supply obligations are financially | 21 |
| settled on an hourly basis) (the "reference | 22 |
| price") on the day preceding the day on which the | 23 |
| electricity is delivered to the initial clean coal | 24 |
| facility busbar, multiplied by (2) the quantity of | 25 |
| electricity determined pursuant to the preceding | 26 |
| clause (i); and |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| (iii) not require the utility to take physical | 2 |
| delivery of the electricity produced by the | 3 |
| facility; | 4 |
| (D) general provisions, which shall: | 5 |
| (i) specify a term of no more than 30 years, | 6 |
| commencing on the commercial operation date of the | 7 |
| facility; | 8 |
| (ii) provide that utilities shall maintain | 9 |
| adequate records documenting purchases under the | 10 |
| sourcing agreements entered into to comply with | 11 |
| this subsection (d) and shall file an accounting | 12 |
| with the load forecast that must be filed with the | 13 |
| Agency by July 15 of each year, in accordance with | 14 |
| subsection (d) of Section 16-111.5 of the Public | 15 |
| Utilities Act. | 16 |
| (iii) provide that all costs associated with | 17 |
| the initial clean coal facility will be | 18 |
| periodically reported to the Federal Energy | 19 |
| Regulatory Commission and to purchasers in | 20 |
| accordance with applicable laws governing | 21 |
| cost-based wholesale power contracts; | 22 |
| (iv) permit the Illinois Power Agency to | 23 |
| assume ownership of the initial clean coal | 24 |
| facility, without monetary consideration and | 25 |
| otherwise on reasonable terms acceptable to the | 26 |
| Agency, if the Agency so requests no less than 3 |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| years prior to the end of the stated contract term; | 2 |
| (v) require the owner of the initial clean coal | 3 |
| facility to provide documentation to the | 4 |
| Commission each year, starting in the facility's | 5 |
| first year of commercial operation, accurately | 6 |
| reporting the quantity of carbon emissions from | 7 |
| the facility that have been captured and | 8 |
| sequestered and report any quantities of carbon | 9 |
| released from the site or sites at which carbon | 10 |
| emissions were sequestered in prior years, based | 11 |
| on continuous monitoring of such sites. If, in any | 12 |
| year after the first year of commercial operation, | 13 |
| the owner of the facility fails to demonstrate that | 14 |
| the initial clean coal facility captured and | 15 |
| sequestered at least 50% of the total carbon | 16 |
| emissions that the facility would otherwise emit | 17 |
| or that sequestration of emissions from prior | 18 |
| years has failed, resulting in the release of | 19 |
| carbon dioxide into the atmosphere, the owner of | 20 |
| the facility must offset excess emissions. Any | 21 |
| such carbon offsets must be permanent, additional, | 22 |
| verifiable, real, located within the State of | 23 |
| Illinois, and legally and practicably enforceable. | 24 |
| The cost of such offsets for the facility that are | 25 |
| not recoverable shall not exceed $15 million in any | 26 |
| given year. No costs of any such purchases of |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| carbon offsets may be recovered from a utility or | 2 |
| its customers. All carbon offsets purchased for | 3 |
| this purpose and any carbon emission credits | 4 |
| associated with sequestration of carbon from the | 5 |
| facility must be permanently retired. The initial | 6 |
| clean coal facility shall not forfeit its | 7 |
| designation as a clean coal facility if the | 8 |
| facility fails to fully comply with the applicable | 9 |
| carbon sequestration requirements in any given | 10 |
| year, provided the requisite offsets are | 11 |
| purchased. However, the Attorney General, on | 12 |
| behalf of the People of the State of Illinois, may | 13 |
| specifically enforce the facility's sequestration | 14 |
| requirement and the other terms of this contract | 15 |
| provision. Compliance with the sequestration | 16 |
| requirements and offset purchase requirements | 17 |
| specified in paragraph (3) of this subsection (d) | 18 |
| shall be reviewed annually by an independent | 19 |
| expert retained by the owner of the initial clean | 20 |
| coal facility, with the advance written approval | 21 |
| of the Attorney General. The Commission may, in the | 22 |
| course of the review specified in item (vii), | 23 |
| reduce the allowable return on equity for the | 24 |
| facility if the facility wilfully fails to comply | 25 |
| with the carbon capture and sequestration | 26 |
| requirements set forth in this item (v); |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| (vi) include limits on, and accordingly | 2 |
| provide for modification of, the amount the | 3 |
| utility is required to source under the sourcing | 4 |
| agreement consistent with paragraph (2) of this | 5 |
| subsection (d); | 6 |
| (vii) require Commission review: (1) to | 7 |
| determine the justness, reasonableness, and | 8 |
| prudence of the inputs to the formula referenced in | 9 |
| subparagraphs (A)(i) through (A)(iii) of paragraph | 10 |
| (3) of this subsection (d), prior to an adjustment | 11 |
| in those inputs including, without limitation, the | 12 |
| capital structure and return on equity, fuel | 13 |
| costs, and other operations and maintenance costs | 14 |
| and (2) to approve the costs to be passed through | 15 |
| to customers under the sourcing agreement by which | 16 |
| the utility satisfies its statutory obligations. | 17 |
| Commission review shall occur no less than every 3 | 18 |
| years, regardless of whether any adjustments have | 19 |
| been proposed, and shall be completed within 9 | 20 |
| months; | 21 |
| (viii) limit the utility's obligation to such | 22 |
| amount as the utility is allowed to recover through | 23 |
| tariffs filed with the Commission, provided that | 24 |
| neither the clean coal facility nor the utility | 25 |
| waives any right to assert federal pre-emption or | 26 |
| any other argument in response to a purported |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| disallowance of recovery costs; | 2 |
| (ix) limit the utility's or alternative retail | 3 |
| electric supplier's obligation to incur any | 4 |
| liability until such time as the facility is in | 5 |
| commercial operation and generating power and | 6 |
| energy and such power and energy is being delivered | 7 |
| to the facility busbar; | 8 |
| (x) provide that the owner or owners of the | 9 |
| initial clean coal facility, which is the | 10 |
| counterparty to such sourcing agreement, shall | 11 |
| have the right from time to time to elect whether | 12 |
| the obligations of the utility party thereto shall | 13 |
| be governed by the power purchase provisions or the | 14 |
| contract for differences provisions; | 15 |
| (xi) append documentation showing that the | 16 |
| formula rate and contract, insofar as they relate | 17 |
| to the power purchase provisions, have been | 18 |
| approved by the Federal Energy Regulatory | 19 |
| Commission pursuant to Section 205 of the Federal | 20 |
| Power Act; | 21 |
| (xii) provide that any changes to the terms of | 22 |
| the contract, insofar as such changes relate to the | 23 |
| power purchase provisions, are subject to review | 24 |
| under the public interest standard applied by the | 25 |
| Federal Energy Regulatory Commission pursuant to | 26 |
| Sections 205 and 206 of the Federal Power Act; and |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| (xiii) conform with customary lender | 2 |
| requirements in power purchase agreements used as | 3 |
| the basis for financing non-utility generators. | 4 |
| (4) Effective date of sourcing agreements with the | 5 |
| initial clean coal facility. Any proposed sourcing | 6 |
| agreement with the initial clean coal facility shall not | 7 |
| become effective unless the following reports are prepared | 8 |
| and submitted and authorizations and approvals obtained: | 9 |
| (i) Facility cost report. The owner of the | 10 |
| initial clean coal facility shall submit to the | 11 |
| Commission, the Agency, and the General Assembly a | 12 |
| front-end engineering and design study, a facility | 13 |
| cost report, method of financing (including but | 14 |
| not limited to structure and associated costs), | 15 |
| and an operating and maintenance cost quote for the | 16 |
| facility (collectively "facility cost report"), | 17 |
| which shall be prepared in accordance with the | 18 |
| requirements of this paragraph (4) of subsection | 19 |
| (d) of this Section, and shall provide the | 20 |
| Commission and the Agency access to the work | 21 |
| papers, relied upon documents, and any other | 22 |
| backup documentation related to the facility cost | 23 |
| report. | 24 |
| (ii) Commission report. Within 6 months | 25 |
| following receipt of the facility cost report, the | 26 |
| Commission, in consultation with the Agency, shall |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| submit a report to the General Assembly setting | 2 |
| forth its analysis of the facility cost report. | 3 |
| Such report shall include, but not be limited to, a | 4 |
| comparison of the costs associated with | 5 |
| electricity generated by the initial clean coal | 6 |
| facility to the costs associated with electricity | 7 |
| generated by other types of generation facilities, | 8 |
| an analysis of the rate impacts on residential and | 9 |
| small business customers over the life of the | 10 |
| sourcing agreements, and an analysis of the | 11 |
| likelihood that the initial clean coal facility | 12 |
| will commence commercial operation by and be | 13 |
| delivering power to the facility's busbar by 2016. | 14 |
| To assist in the preparation of its report, the | 15 |
| Commission, in consultation with the Agency, may | 16 |
| hire one or more experts or consultants, the costs | 17 |
| of which shall be paid for by the owner of the | 18 |
| initial clean coal facility. The Commission and | 19 |
| Agency may begin the process of selecting such | 20 |
| experts or consultants prior to receipt of the | 21 |
| facility cost report. | 22 |
| (iii) General Assembly approval. The proposed | 23 |
| sourcing agreements shall not take effect unless, | 24 |
| based on the facility cost report and the | 25 |
| Commission's report, the General Assembly enacts | 26 |
| authorizing legislation approving (A) the |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| projected price, stated in cents per kilowatthour, | 2 |
| to be charged for electricity generated by the | 3 |
| initial clean coal facility, (B) the projected | 4 |
| impact on residential and small business | 5 |
| customers' bills over the life of the sourcing | 6 |
| agreements, and (C) the maximum allowable return | 7 |
| on equity for the project; and | 8 |
| (iv) Commission review. If the General | 9 |
| Assembly enacts authorizing legislation pursuant | 10 |
| to subparagraph (iii) approving a sourcing | 11 |
| agreement, the Commission shall, within 90 days of | 12 |
| such enactment, complete a review of such sourcing | 13 |
| agreement. During such time period, the Commission | 14 |
| shall implement any directive of the General | 15 |
| Assembly, resolve any disputes between the parties | 16 |
| to the sourcing agreement concerning the terms of | 17 |
| such agreement, approve the form of such | 18 |
| agreement, and issue an order finding that the | 19 |
| sourcing agreement is prudent and reasonable. | 20 |
| The facility cost report shall be prepared as follows: | 21 |
| (A) The facility cost report shall be prepared by | 22 |
| duly licensed engineering and construction firms | 23 |
| detailing the estimated capital costs payable to one or | 24 |
| more contractors or suppliers for the engineering, | 25 |
| procurement and construction of the components | 26 |
| comprising the initial clean coal facility and the |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| estimated costs of operation and maintenance of the | 2 |
| facility. The facility cost report shall include: | 3 |
| (i) an estimate of the capital cost of the core | 4 |
| plant based on one or more front end engineering | 5 |
| and design studies for the gasification island and | 6 |
| related facilities. The core plant shall include | 7 |
| all civil, structural, mechanical, electrical, | 8 |
| control, and safety systems. | 9 |
| (ii) an estimate of the capital cost of the | 10 |
| balance of the plant, including any capital costs | 11 |
| associated with sequestration of carbon dioxide | 12 |
| emissions and all interconnects and interfaces | 13 |
| required to operate the facility, such as | 14 |
| transmission of electricity, construction or | 15 |
| backfeed power supply, pipelines to transport | 16 |
| substitute natural gas or carbon dioxide, potable | 17 |
| water supply, natural gas supply, water supply, | 18 |
| water discharge, landfill, access roads, and coal | 19 |
| delivery. | 20 |
| The quoted construction costs shall be expressed | 21 |
| in nominal dollars as of the date that the quote is | 22 |
| prepared and shall include (1) capitalized financing | 23 |
| costs during construction,
(2) taxes, insurance, and | 24 |
| other owner's costs, and (3) an assumed escalation in | 25 |
| materials and labor beyond the date as of which the | 26 |
| construction cost quote is expressed. |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| (B) The front end engineering and design study for | 2 |
| the gasification island and the cost study for the | 3 |
| balance of plant shall include sufficient design work | 4 |
| to permit quantification of major categories of | 5 |
| materials, commodities and labor hours, and receipt of | 6 |
| quotes from vendors of major equipment required to | 7 |
| construct and operate the clean coal facility. | 8 |
| (C) The facility cost report shall also include an | 9 |
| operating and maintenance cost quote that will provide | 10 |
| the estimated cost of delivered fuel, personnel, | 11 |
| maintenance contracts, chemicals, catalysts, | 12 |
| consumables, spares, and other fixed and variable | 13 |
| operations and maintenance costs. | 14 |
| (a) The delivered fuel cost estimate will be | 15 |
| provided by a recognized third party expert or | 16 |
| experts in the fuel and transportation industries. | 17 |
| (b) The balance of the operating and | 18 |
| maintenance cost quote, excluding delivered fuel | 19 |
| costs will be developed based on the inputs | 20 |
| provided by duly licensed engineering and | 21 |
| construction firms performing the construction | 22 |
| cost quote, potential vendors under long-term | 23 |
| service agreements and plant operating agreements, | 24 |
| or recognized third party plant operator or | 25 |
| operators. | 26 |
| The operating and maintenance cost quote |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| (including the cost of the front end engineering | 2 |
| and design study) shall be expressed in nominal | 3 |
| dollars as of the date that the quote is prepared | 4 |
| and shall include (1) taxes, insurance, and other | 5 |
| owner's costs, and (2) an assumed escalation in | 6 |
| materials and labor beyond the date as of which the | 7 |
| operating and maintenance cost quote is expressed. | 8 |
| (D) The facility cost report shall also include (i) | 9 |
| an analysis of the initial clean coal facility's | 10 |
| ability to deliver power and energy into the applicable | 11 |
| regional transmission organization markets and (ii) an | 12 |
| analysis of the expected capacity factor for the | 13 |
| initial clean coal facility. | 14 |
| (E) Amounts paid to third parties unrelated to the | 15 |
| owner or owners of the initial clean coal facility to | 16 |
| prepare the core plant construction cost quote, | 17 |
| including the front end engineering and design study, | 18 |
| and the operating and maintenance cost quote will be | 19 |
| reimbursed through Coal Development Bonds. | 20 |
| (5) Re-powering and retrofitting coal-fired power | 21 |
| plants previously owned by Illinois utilities to qualify as | 22 |
| clean coal facilities. During the 2009 procurement | 23 |
| planning process and thereafter, the Agency and the | 24 |
| Commission shall consider sourcing agreements covering | 25 |
| electricity generated by power plants that were previously | 26 |
| owned by Illinois utilities and that have been or will be |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| converted into clean coal facilities, as defined by Section | 2 |
| 1-10 of this Act. Pursuant to such procurement planning | 3 |
| process, the owners of such facilities may propose to the | 4 |
| Agency sourcing agreements with utilities and alternative | 5 |
| retail electric suppliers required to comply with | 6 |
| subsection (d) of this Section and item (5) of subsection | 7 |
| (d) of Section 16-115 of the Public Utilities Act, covering | 8 |
| electricity generated by such facilities. In the case of | 9 |
| sourcing agreements that are power purchase agreements, | 10 |
| the contract price for electricity sales shall be | 11 |
| established on a cost of service basis. In the case of | 12 |
| sourcing agreements that are contracts for differences, | 13 |
| the contract price from which the reference price is | 14 |
| subtracted shall be established on a cost of service basis. | 15 |
| The Agency and the Commission may approve any such utility | 16 |
| sourcing agreements that do not exceed cost-based | 17 |
| benchmarks developed by the procurement administrator, in | 18 |
| consultation with the Commission staff, Agency staff and | 19 |
| the procurement monitor, subject to Commission review and | 20 |
| approval. The Commission shall have authority to inspect | 21 |
| all books and records associated with these clean coal | 22 |
| facilities during the term of any such contract. | 23 |
| (6) Costs incurred under this subsection (d) or | 24 |
| pursuant to a contract entered into under this subsection | 25 |
| (d) shall be deemed prudently incurred and reasonable in | 26 |
| amount and the electric utility shall be entitled to full |
|
|
|
09600HB6202sam002 |
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LRB096 18131 JDS 41272 a |
|
| 1 |
| cost recovery pursuant to the tariffs filed with the | 2 |
| Commission. | 3 |
| (e) The draft procurement plans are subject to public | 4 |
| comment, as required by Section 16-111.5 of the Public | 5 |
| Utilities Act. | 6 |
| (f) The Agency shall submit the final procurement plan | 7 |
| to the Commission. The Agency shall revise a procurement | 8 |
| plan if the Commission determines that it does not meet the | 9 |
| standards set forth in Section 16-111.5 of the Public | 10 |
| Utilities Act. | 11 |
| (g) The Agency shall assess fees to each affected | 12 |
| utility to recover the costs incurred in preparation of the | 13 |
| annual procurement plan for the utility. | 14 |
| (h) The Agency shall assess fees to each bidder to | 15 |
| recover the costs incurred in connection with a competitive | 16 |
| procurement process.
| 17 |
| (Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09; | 18 |
| 96-159, eff. 8-10-09.)
| 19 |
| Section 99. Effective date. This Act takes effect upon | 20 |
| becoming law.".
|
|