Illinois General Assembly - Full Text of SB2365
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Full Text of SB2365  98th General Assembly




State of Illinois
2013 and 2014


Introduced 2/15/2013, by Sen. Don Harmon


20 ILCS 3501/825-65
20 ILCS 3855/1-10

    Amends the Illinois Power Agency Act. Includes references to the reduction of thermal load in the definitions of "energy efficiency" and "renewable energy resources". Makes corresponding changes to the definition of "Energy Efficiency Project" in the Illinois Finance Authority Act. Effective immediately.

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SB2365LRB098 06614 MGM 36657 b

1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Finance Authority Act is amended by
5changing Section 825-65 as follows:
6    (20 ILCS 3501/825-65)
7    Sec. 825-65. Clean Coal, Coal, Energy Efficiency, and
8Renewable Energy Project Financing.
9    (a) Findings and declaration of policy.
10        (i) It is hereby found and declared that Illinois has
11    abundant coal resources and, in some areas of Illinois, the
12    demand for power exceeds the generating capacity.
13    Incentives to encourage the construction of coal-fueled
14    electric generating plants in Illinois to ensure power
15    generating capacity into the future and to advance clean
16    coal technology and the use of Illinois coal are in the
17    best interests of all of the citizens of Illinois.
18        (ii) It is further found and declared that Illinois has
19    abundant potential and resources to develop renewable
20    energy resource projects and that there are many
21    opportunities to invest in cost-effective energy
22    efficiency projects throughout the State. The development
23    of those projects will create jobs and investment as well



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1    as decrease environmental impacts and promote energy
2    independence in Illinois. Accordingly, the development of
3    those projects is in the best interests of all of the
4    citizens of Illinois.
5        (iii) The Authority is authorized to issue bonds to
6    help finance Clean Coal, Coal, Energy Efficiency, and
7    Renewable Energy projects pursuant to this Section.
8    (b) Definitions.
9        (i) "Clean Coal Project" means (A) "clean coal
10    facility", as defined in Section 1-10 of the Illinois Power
11    Agency Act; (B) "clean coal SNG facility", as defined in
12    Section 1-10 of the Illinois Power Agency Act; (C)
13    transmission lines and associated equipment that transfer
14    electricity from points of supply to points of delivery for
15    projects described in this subsection (b); (D) pipelines or
16    other methods to transfer carbon dioxide from the point of
17    production to the point of storage or sequestration for
18    projects described in this subsection (b); or (E) projects
19    to provide carbon abatement technology for existing
20    generating facilities.
21        (ii) "Coal Project" means new electric generating
22    facilities or new gasification facilities, as defined in
23    Section 605-332 of the Department of Commerce and Economic
24    Opportunity Law of the Civil Administrative Code of
25    Illinois, which may include mine-mouth power plants,
26    projects that employ the use of clean coal technology,



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1    projects to provide scrubber technology for existing
2    energy generating plants, or projects to provide electric
3    transmission facilities or new gasification facilities.
4        (iii) "Energy Efficiency Project" means measures that
5    reduce the amount of electricity, or natural gas, or
6    thermal load required to achieve a given end use,
7    consistent with Section 1-10 of the Illinois Power Agency
8    Act.
9        (iv) "Renewable Energy Project" means (A) a project
10    that uses renewable energy resources, as defined in Section
11    1-10 of the Illinois Power Agency Act; (B) a project that
12    uses environmentally preferable technologies and practices
13    that result in improvements to the production of renewable
14    fuels, including but not limited to, cellulosic
15    conversion, water and energy conservation, fractionation,
16    alternative feedstocks, or reduced green house gas
17    emissions; (C) transmission lines and associated equipment
18    that transfer electricity from points of supply to points
19    of delivery for projects described in this subsection (b);
20    or (D) projects that use technology for the storage of
21    renewable energy, including, without limitation, the use
22    of battery or electrochemical storage technology for
23    mobile or stationary applications.
24    (c) Creation of reserve funds. The Authority may establish
25and maintain one or more reserve funds to enhance bonds issued
26by the Authority for a Clean Coal Project, a Coal Project, an



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1Energy Efficiency Project, or a Renewable Energy Project. There
2may be one or more accounts in these reserve funds in which
3there may be deposited:
4        (1) any proceeds of the bonds issued by the Authority
5    required to be deposited therein by the terms of any
6    contract between the Authority and its bondholders or any
7    resolution of the Authority;
8        (2) any other moneys or funds of the Authority that it
9    may determine to deposit therein from any other source; and
10        (3) any other moneys or funds made available to the
11    Authority. Subject to the terms of any pledge to the owners
12    of any bonds, moneys in any reserve fund may be held and
13    applied to the payment of principal, premium, if any, and
14    interest of such bonds.
15    (d) Powers and duties. The Authority has the power:
16        (1) To issue bonds in one or more series pursuant to
17    one or more resolutions of the Authority for any Clean Coal
18    Project, Coal Project, Energy Efficiency Project, or
19    Renewable Energy Project authorized under this Section,
20    within the authorization set forth in subsection (e).
21        (2) To provide for the funding of any reserves or other
22    funds or accounts deemed necessary by the Authority in
23    connection with any bonds issued by the Authority.
24        (3) To pledge any funds of the Authority or funds made
25    available to the Authority that may be applied to such
26    purpose as security for any bonds or any guarantees,



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1    letters of credit, insurance contracts or similar credit
2    support or liquidity instruments securing the bonds.
3        (4) To enter into agreements or contracts with third
4    parties, whether public or private, including, without
5    limitation, the United States of America, the State or any
6    department or agency thereof, to obtain any
7    appropriations, grants, loans or guarantees that are
8    deemed necessary or desirable by the Authority. Any such
9    guarantee, agreement or contract may contain terms and
10    provisions necessary or desirable in connection with the
11    program, subject to the requirements established by the
12    Act.
13        (5) To exercise such other powers as are necessary or
14    incidental to the foregoing.
15    (e) Clean Coal Project, Coal Project, Energy Efficiency
16Project, and Renewable Energy Project bond authorization and
17financing limits. In addition to any other bonds authorized to
18be issued under Sections 801-40(w), 825-60, 830-25 and 845-5,
19the Authority may have outstanding, at any time, bonds for the
20purpose enumerated in this Section 825-65 in an aggregate
21principal amount that shall not exceed $3,000,000,000, subject
22to the following limitations: (i) up to $300,000,000 may be
23issued to finance projects, as described in clause (C) of
24subsection (b)(i) and clause (C) of subsection (b)(iv) of this
25Section 825-65; (ii) up to $500,000,000 may be issued to
26finance projects, as described in clauses (D) and (E) of



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1subsection (b)(i) of this Section 825-65; (iii) up to
2$2,000,000,000 may be issued to finance Clean Coal Projects, as
3described in clauses (A) and (B) of subsection (b)(i) of this
4Section 825-65 and Coal Projects, as described in subsection
5(b)(ii) of this Section 825-65; and (iv) up to $2,000,000,000
6may be issued to finance Energy Efficiency Projects, as
7described in subsection (b)(iii) of this Section 825-65 and
8Renewable Energy Projects, as described in clauses (A), (B),
9and (D) of subsection (b)(iii) of this Section 825-65. An
10application for a loan financed from bond proceeds from a
11borrower or its affiliates for a Clean Coal Project, a Coal
12Project, Energy Efficiency Project, or a Renewable Energy
13Project may not be approved by the Authority for an amount in
14excess of $450,000,000 for any borrower or its affiliates.
15These bonds shall not constitute an indebtedness or obligation
16of the State of Illinois and it shall be plainly stated on the
17face of each bond that it does not constitute an indebtedness
18or obligation of the State of Illinois, but is payable solely
19from the revenues, income or other assets of the Authority
20pledged therefor.
21    (f) The bonding authority granted under this Section is in
22addition to and not limited by the provisions of Section 845-5.
23(Source: P.A. 95-470, eff. 8-27-07; 96-103, eff. 1-1-10;
2496-817, eff. 1-1-10.)
25    Section 10. The Illinois Power Agency Act is amended by



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1changing Section 1-10 as follows:
2    (20 ILCS 3855/1-10)
3    Sec. 1-10. Definitions.
4    "Agency" means the Illinois Power Agency.
5    "Agency loan agreement" means any agreement pursuant to
6which the Illinois Finance Authority agrees to loan the
7proceeds of revenue bonds issued with respect to a project to
8the Agency upon terms providing for loan repayment installments
9at least sufficient to pay when due all principal of, interest
10and premium, if any, on those revenue bonds, and providing for
11maintenance, insurance, and other matters in respect of the
13    "Authority" means the Illinois Finance Authority.
14    "Clean coal facility" means an electric generating
15facility that uses primarily coal as a feedstock and that
16captures and sequesters carbon dioxide emissions at the
17following levels: at least 50% of the total carbon dioxide
18emissions that the facility would otherwise emit if, at the
19time construction commences, the facility is scheduled to
20commence operation before 2016, at least 70% of the total
21carbon dioxide emissions that the facility would otherwise emit
22if, at the time construction commences, the facility is
23scheduled to commence operation during 2016 or 2017, and at
24least 90% of the total carbon dioxide emissions that the
25facility would otherwise emit if, at the time construction



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1commences, the facility is scheduled to commence operation
2after 2017. The power block of the clean coal facility shall
3not exceed allowable emission rates for sulfur dioxide,
4nitrogen oxides, carbon monoxide, particulates and mercury for
5a natural gas-fired combined-cycle facility the same size as
6and in the same location as the clean coal facility at the time
7the clean coal facility obtains an approved air permit. All
8coal used by a clean coal facility shall have high volatile
9bituminous rank and greater than 1.7 pounds of sulfur per
10million btu content, unless the clean coal facility does not
11use gasification technology and was operating as a conventional
12coal-fired electric generating facility on June 1, 2009 (the
13effective date of Public Act 95-1027).
14    "Clean coal SNG brownfield facility" means a facility that
15(1) has commenced construction by July 1, 2015 on an urban
16brownfield site in a municipality with at least 1,000,000
17residents; (2) uses a gasification process to produce
18substitute natural gas; (3) uses coal as at least 50% of the
19total feedstock over the term of any sourcing agreement with a
20utility and the remainder of the feedstock may be either
21petroleum coke or coal, with all such coal having a high
22bituminous rank and greater than 1.7 pounds of sulfur per
23million Btu content unless the facility reasonably determines
24that it is necessary to use additional petroleum coke to
25deliver additional consumer savings, in which case the facility
26shall use coal for at least 35% of the total feedstock over the



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1term of any sourcing agreement; and (4) captures and sequesters
2at least 85% of the total carbon dioxide emissions that the
3facility would otherwise emit.
4    "Clean coal SNG facility" means a facility that uses a
5gasification process to produce substitute natural gas, that
6sequesters at least 90% of the total carbon dioxide emissions
7that the facility would otherwise emit, that uses at least 90%
8coal as a feedstock, with all such coal having a high
9bituminous rank and greater than 1.7 pounds of sulfur per
10million btu content, and that has a valid and effective permit
11to construct emission sources and air pollution control
12equipment and approval with respect to the federal regulations
13for Prevention of Significant Deterioration of Air Quality
14(PSD) for the plant pursuant to the federal Clean Air Act;
15provided, however, a clean coal SNG brownfield facility shall
16not be a clean coal SNG facility.
17    "Commission" means the Illinois Commerce Commission.
18    "Costs incurred in connection with the development and
19construction of a facility" means:
20        (1) the cost of acquisition of all real property,
21    fixtures, and improvements in connection therewith and
22    equipment, personal property, and other property, rights,
23    and easements acquired that are deemed necessary for the
24    operation and maintenance of the facility;
25        (2) financing costs with respect to bonds, notes, and
26    other evidences of indebtedness of the Agency;



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1        (3) all origination, commitment, utilization,
2    facility, placement, underwriting, syndication, credit
3    enhancement, and rating agency fees;
4        (4) engineering, design, procurement, consulting,
5    legal, accounting, title insurance, survey, appraisal,
6    escrow, trustee, collateral agency, interest rate hedging,
7    interest rate swap, capitalized interest, contingency, as
8    required by lenders, and other financing costs, and other
9    expenses for professional services; and
10        (5) the costs of plans, specifications, site study and
11    investigation, installation, surveys, other Agency costs
12    and estimates of costs, and other expenses necessary or
13    incidental to determining the feasibility of any project,
14    together with such other expenses as may be necessary or
15    incidental to the financing, insuring, acquisition, and
16    construction of a specific project and starting up,
17    commissioning, and placing that project in operation.
18    "Department" means the Department of Commerce and Economic
20    "Director" means the Director of the Illinois Power Agency.
21    "Demand-response" means measures that decrease peak
22electricity demand or shift demand from peak to off-peak
24    "Distributed renewable energy generation device" means a
25device that is:
26        (1) powered by wind, solar thermal energy,



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1    photovoltaic cells and panels, biodiesel, crops and
2    untreated and unadulterated organic waste biomass, tree
3    waste, and hydropower that does not involve new
4    construction or significant expansion of hydropower dams;
5        (2) interconnected at the distribution system level of
6    either an electric utility as defined in this Section, an
7    alternative retail electric supplier as defined in Section
8    16-102 of the Public Utilities Act, a municipal utility as
9    defined in Section 3-105 of the Public Utilities Act, or a
10    rural electric cooperative as defined in Section 3-119 of
11    the Public Utilities Act;
12        (3) located on the customer side of the customer's
13    electric meter and is primarily used to offset that
14    customer's electricity load; and
15        (4) limited in nameplate capacity to no more than 2,000
16    kilowatts.
17    "Energy efficiency" means measures that reduce the amount
18of electricity, or natural gas, or thermal load required to
19achieve a given end use.
20    "Electric utility" has the same definition as found in
21Section 16-102 of the Public Utilities Act.
22    "Facility" means an electric generating unit or a
23co-generating unit that produces electricity along with
24related equipment necessary to connect the facility to an
25electric transmission or distribution system.
26    "Governmental aggregator" means one or more units of local



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1government that individually or collectively procure
2electricity to serve residential retail electrical loads
3located within its or their jurisdiction.
4    "Local government" means a unit of local government as
5defined in Section 1 of Article VII of the Illinois
7    "Municipality" means a city, village, or incorporated
9    "Person" means any natural person, firm, partnership,
10corporation, either domestic or foreign, company, association,
11limited liability company, joint stock company, or association
12and includes any trustee, receiver, assignee, or personal
13representative thereof.
14    "Project" means the planning, bidding, and construction of
15a facility.
16    "Public utility" has the same definition as found in
17Section 3-105 of the Public Utilities Act.
18    "Real property" means any interest in land together with
19all structures, fixtures, and improvements thereon, including
20lands under water and riparian rights, any easements,
21covenants, licenses, leases, rights-of-way, uses, and other
22interests, together with any liens, judgments, mortgages, or
23other claims or security interests related to real property.
24    "Renewable energy credit" means a tradable credit that
25represents the environmental attributes of a certain amount of
26energy produced from a renewable energy resource.



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1    "Renewable energy resources" includes energy and its
2associated renewable energy credit or renewable energy credits
3from wind, solar thermal energy, photovoltaic cells and panels,
4biodiesel, anaerobic digestion, crops and untreated and
5unadulterated organic waste biomass, tree waste, hydropower
6that does not involve new construction or significant expansion
7of hydropower dams, and other alternative sources of
8environmentally preferable energy, including the thermal load
9avoided by geothermal heat pumps. For purposes of this Act,
10landfill gas produced in the State is considered a renewable
11energy resource. "Renewable energy resources" does not include
12the incineration or burning of tires, garbage, general
13household, institutional, and commercial waste, industrial
14lunchroom or office waste, landscape waste other than tree
15waste, railroad crossties, utility poles, or construction or
16demolition debris, other than untreated and unadulterated
17waste wood.
18    "Revenue bond" means any bond, note, or other evidence of
19indebtedness issued by the Authority, the principal and
20interest of which is payable solely from revenues or income
21derived from any project or activity of the Agency.
22    "Sequester" means permanent storage of carbon dioxide by
23injecting it into a saline aquifer, a depleted gas reservoir,
24or an oil reservoir, directly or through an enhanced oil
25recovery process that may involve intermediate storage,
26regardless of whether these activities are conducted by a clean



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1coal facility, a clean coal SNG facility, a clean coal SNG
2brownfield facility, or a party with which a clean coal
3facility, clean coal SNG facility, or clean coal SNG brownfield
4facility has contracted for such purposes.
5    "Sourcing agreement" means (i) in the case of an electric
6utility, an agreement between the owner of a clean coal
7facility and such electric utility, which agreement shall have
8terms and conditions meeting the requirements of paragraph (3)
9of subsection (d) of Section 1-75, (ii) in the case of an
10alternative retail electric supplier, an agreement between the
11owner of a clean coal facility and such alternative retail
12electric supplier, which agreement shall have terms and
13conditions meeting the requirements of Section 16-115(d)(5) of
14the Public Utilities Act, and (iii) in case of a gas utility,
15an agreement between the owner of a clean coal SNG brownfield
16facility and the gas utility, which agreement shall have the
17terms and conditions meeting the requirements of subsection
18(h-1) of Section 9-220 of the Public Utilities Act.
19    "Substitute natural gas" or "SNG" means a gas manufactured
20by gasification of hydrocarbon feedstock, which is
21substantially interchangeable in use and distribution with
22conventional natural gas.
23    "Total resource cost test" or "TRC test" means a standard
24that is met if, for an investment in energy efficiency or
25demand-response measures, the benefit-cost ratio is greater
26than one. The benefit-cost ratio is the ratio of the net



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1present value of the total benefits of the program to the net
2present value of the total costs as calculated over the
3lifetime of the measures. A total resource cost test compares
4the sum of avoided electric utility costs, representing the
5benefits that accrue to the system and the participant in the
6delivery of those efficiency measures, as well as other
7quantifiable societal benefits, including avoided natural gas
8utility costs, to the sum of all incremental costs of end-use
9measures that are implemented due to the program (including
10both utility and participant contributions), plus costs to
11administer, deliver, and evaluate each demand-side program, to
12quantify the net savings obtained by substituting the
13demand-side program for supply resources. In calculating
14avoided costs of power and energy that an electric utility
15would otherwise have had to acquire, reasonable estimates shall
16be included of financial costs likely to be imposed by future
17regulations and legislation on emissions of greenhouse gases.
18(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
1996-784, eff. 8-28-09; 96-1000, eff. 7-2-10; 97-96, eff.
207-13-11; 97-239, eff. 8-2-11; 97-491, eff. 8-22-11; 97-616,
21eff. 10-26-11; 97-813, eff. 7-13-12.)
22    Section 99. Effective date. This Act takes effect upon
23becoming law.