Full Text of HB2875 103rd General Assembly
HB2875sam001 103RD GENERAL ASSEMBLY | Sen. Rachel Ventura Filed: 5/18/2023
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| 1 | | AMENDMENT TO HOUSE BILL 2875
| 2 | | AMENDMENT NO. ______. Amend House Bill 2875 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be referred to as
the | 5 | | Thermal Energy Network and Jobs Act.
| 6 | | Section 5. Legislative findings and intent. | 7 | | (a) The General Assembly finds and
declares that:
| 8 | | (1) This State has a strong interest in ensuring that | 9 | | emissions of greenhouse gases from buildings are reduced | 10 | | because buildings are one of this State's largest sources | 11 | | of greenhouse gases due to the combustion of
fossil fuels | 12 | | for heating, domestic hot water production, cooking, and | 13 | | other end uses.
| 14 | | (2) The decarbonization of buildings must be pursued | 15 | | in a manner that
is affordable and accessible, preserves | 16 | | and creates living-wage jobs, and
retains the knowledge |
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| 1 | | and experience of the existing utility union workforce.
| 2 | | (3) Thermal energy networks have the potential to | 3 | | decarbonize buildings
at the community and utility scale | 4 | | and help achieve the goals of Public Act 102-662 (also | 5 | | known as the Climate and Equitable Jobs Act).
| 6 | | (4) Thermal energy networks consist of pipe loops | 7 | | between multiple
buildings and energy sources, which carry | 8 | | water and can be connected to by building owners to | 9 | | support heating and cooling and hot water services. | 10 | | Building owners can connect to the loops to support water
| 11 | | heating and cooling and hot water services.
| 12 | | (5) Many utilities in this State have been seeking to | 13 | | develop thermal energy networks but have encountered legal | 14 | | and regulatory barriers.
| 15 | | (6) This State has a strong interest in ensuring an | 16 | | adequate supply
of reliable electrical power and, | 17 | | therefore, needs to promote the development of alternative | 18 | | power sources and take steps to assure reliable
| 19 | | deliverability. Thermal energy networks are highly | 20 | | efficient because
they use and exchange thermal energy | 21 | | from many underground sources
and buildings, including | 22 | | recycled thermal energy, which minimizes impacts on
the | 23 | | electricity grid.
| 24 | | (7) Access to thermal energy networks has the | 25 | | potential to reduce the
upfront and operating costs of | 26 | | building electrification for customers. |
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| 1 | | (8) Thermal loop technology provides benefits to | 2 | | participants and non-participants alike including societal | 3 | | benefits to the environment and the market benefits | 4 | | associated with the reduction of both the volume and peak | 5 | | demand of electricity and natural gas.
| 6 | | (8) A utility's access to capital, the utility's | 7 | | experience with networked
infrastructure in public | 8 | | rights-of-way, and the requirement that the utility
serve | 9 | | all customers positions the utility well to develop and | 10 | | scale thermal
energy networks that are accessible to all | 11 | | customers and to coordinate
the development of thermal | 12 | | energy networks with any orderly rightsizing of the
| 13 | | utility gas system.
| 14 | | (9) This State also has an interest in the efficient | 15 | | and
reliable delivery of energy and the energy | 16 | | infrastructure of the State,
which interest is | 17 | | acknowledged throughout the Public Utilities Act. Utility | 18 | | corporations and other power suppliers share these | 19 | | interests and, moreover, have a duty to protect | 20 | | proprietary interests in the projects they fund. Such | 21 | | investments of ratepayer resources can be protected by | 22 | | establishing effective contractor qualification and | 23 | | performance standards, including requirements for | 24 | | prevailing wage rates, bona fide apprenticeship criteria, | 25 | | and project labor agreements.
| 26 | | (10) The construction industry is highly skilled and |
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| 1 | | labor intensive,
and the installation of modern thermal | 2 | | energy networks involves particularly complex work. | 3 | | Therefore, effective qualification standards
for craft | 4 | | labor personnel employed on these projects are critically
| 5 | | needed to promote successful project delivery.
| 6 | | (11) Finally, these findings are especially vital now | 7 | | because the construction industry is experiencing | 8 | | widespread skill shortages across the country, which are | 9 | | crippling existing capital projects and threatening | 10 | | projects planned for the future. The construction of | 11 | | thermal energy networks will utilize many of the same | 12 | | skills that the current utility and building trades | 13 | | workforces already possess.
| 14 | | (b) It is the intent of the General Assembly that passage | 15 | | of this Act is for the following purposes: | 16 | | (1) to remove the legal barriers to utility | 17 | | development of thermal
energy networks and require the | 18 | | Illinois Commerce Commission, within 18 months after the | 19 | | effective date of this amendatory Act of the 103rd General | 20 | | Assembly, to begin to authorize and direct utilities to | 21 | | immediately commence piloting thermal energy networks in | 22 | | each and every utility territory to the extent | 23 | | practicable;
| 24 | | (2) to direct and authorize the Illinois Commerce | 25 | | Commission to develop a regulatory structure for utility | 26 | | thermal energy networks that scales affordable and |
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| 1 | | accessible building electrification, protects customers, | 2 | | and balances the role of incumbent monopoly utilities with | 3 | | other market and public actors;
| 4 | | (3) to promote the successful planning and delivery of | 5 | | thermal energy
networks and protect critical investments | 6 | | in such projects by requiring the use of appropriate | 7 | | quality craft labor policies that ensure the development | 8 | | of and access to an adequate supply of well trained, | 9 | | highly skilled craft persons needed to support timely, | 10 | | reliable, high-quality projects;
| 11 | | (4) to promote strong economic development and good | 12 | | jobs for local
residents in the expanding decarbonized | 13 | | sector by requiring application of progressive State labor | 14 | | and employment policies that ensure public utility | 15 | | investments and related State subsidies create | 16 | | unparalleled skill training and employment opportunities | 17 | | for residents in project areas through the use of local | 18 | | prevailing wage standards and successful, bona fide | 19 | | apprenticeship programs or project labor agreements that | 20 | | incorporate prevailing wage and training standards and | 21 | | provide additional benefits for project owners and | 22 | | workers; and
| 23 | | (5) to promote the use of preapprenticeship programs | 24 | | that will fortify and expand existing apprenticeship | 25 | | programs through systematic outreach efforts to recruit | 26 | | and assist persons from underrepresented and low income |
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| 1 | | communities by providing such persons with remedial | 2 | | education, social services, and unique opportunities for | 3 | | direct access into high-quality apprenticeship programs | 4 | | and gainful employment in the growing building | 5 | | decarbonization workforce.
| 6 | | Section 900. The Public Utilities Act is amended by | 7 | | changing Sections 3-101 and by adding Sections 3-127, 3-128, | 8 | | and 8-513 as follows:
| 9 | | (220 ILCS 5/3-101) (from Ch. 111 2/3, par. 3-101)
| 10 | | Sec. 3-101. Definitions. Unless otherwise specified, the | 11 | | terms set forth
in Sections 3-102 through 3-128 3-126 are used | 12 | | in this Act as therein defined.
| 13 | | (Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; | 14 | | 97-813, eff. 7-13-12.)
| 15 | | (220 ILCS 5/3-127 new) | 16 | | Sec. 3-127. Thermal energy. "Thermal energy" means piped
| 17 | | noncombustible fluids used for transferring heat into and out | 18 | | of buildings for the purpose of reducing any resultant
onsite | 19 | | greenhouse gas emissions of all types of heating and cooling | 20 | | processes, including, but not limited to, comfort heating and | 21 | | cooling, domestic hot water, and refrigeration. | 22 | | (220 ILCS 5/3-128 new) |
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| 1 | | Sec. 3-128. Thermal energy network. "Thermal energy
| 2 | | network" means all real estate, fixtures, and personal | 3 | | property operated, owned, used, or to be used for, in | 4 | | connection with, or to facilitate a utility-scale distribution | 5 | | infrastructure project that supplies thermal energy. | 6 | | (220 ILCS 5/8-513 new) | 7 | | Sec. 8-513. Pilot thermal energy network development. | 8 | | (a) The Illinois Commerce Commission shall initiate a | 9 | | proceeding within 6 months after the effective date of this | 10 | | amendatory Act of the 103rd General Assembly to support the | 11 | | development of pilot thermal energy networks. The Commission | 12 | | shall consider matters in the proceeding, including, but not | 13 | | limited to, the appropriate ownership, market, and rate | 14 | | structures for pilot thermal energy networks and whether the | 15 | | provision of thermal energy services by thermal network energy | 16 | | providers is in the public interest. | 17 | | (b) Within 10 months after the effective date of this | 18 | | amendatory Act of the 103rd General Assembly, any gas public | 19 | | utility, electric public utility, or combination public | 20 | | utility serving over 100,000 customers shall file with the | 21 | | Commission a petition seeking Commission approval of at least | 22 | | one and no more than 3 proposed pilot thermal energy network | 23 | | projects. Designs for the projects should coordinate and | 24 | | maximize the value of existing State energy efficiency and | 25 | | weatherization programs and take advantage of federal funding |
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| 1 | | opportunities to the extent practicable. No later than 20 | 2 | | months after the effective date of this amendatory Act of the | 3 | | 103rd General Assembly, the Commission shall enter an order | 4 | | approving, approving with modification, or rejecting each | 5 | | proposed pilot thermal energy network project and shall direct | 6 | | the public utility to implement the pilot thermal energy | 7 | | network projects as approved or approved as modified. In | 8 | | considering whether to approve or approve as modified each | 9 | | pilot thermal energy network project, the Commission shall | 10 | | consider whether the pilot thermal energy network project is | 11 | | in the public interest, whether the pilot thermal energy | 12 | | network project will develop information useful for the | 13 | | Commission in adopting rules governing thermal energy
| 14 | | networks, whether the pilot thermal energy network project | 15 | | furthers climate justice and emissions reduction, whether the | 16 | | pilot thermal energy network project advances financial and | 17 | | technical approaches to equitable and
affordable building | 18 | | electrification, and whether the pilot thermal energy network | 19 | | project creates benefits to customers and society at large, | 20 | | including, but not limited to, public health benefits in areas | 21 | | with disproportionate environmental or public health burdens, | 22 | | job retention and creation, reliability, and increased
| 23 | | affordability of renewable thermal energy options. After the | 24 | | filing of a petition, a
utility may request the Commission to | 25 | | grant additional time for
approval of the pilot thermal energy | 26 | | network project, which shall be approved for at least 6 months |
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| 1 | | upon request or up to 12 months upon a showing that
additional | 2 | | time would benefit the development of the pilot thermal energy | 3 | | network project. | 4 | | (c) If a utility proposes 3 pilot thermal energy network | 5 | | projects, at least one project shall be proposed in | 6 | | economically disadvantaged communities as defined in Section | 7 | | 5-35 of the Energy Transition Act and at least one shall be | 8 | | focused on existing electric heat customers. Each public | 9 | | utility shall coordinate with other public utilities and | 10 | | consultants with expertise on successful pilot projects to | 11 | | ensure that the pilot projects are diverse and designed to | 12 | | inform the Commission's decisions in the proceeding on the | 13 | | various ownership, market, and rate structures for thermal | 14 | | energy networks. The pilot project proposals shall be made | 15 | | publicly available on the Commission's website. Utilities are
| 16 | | encouraged to develop plans that enable and facilitate access | 17 | | to
thermal loop technology benefits, including access by to | 18 | | low and moderate income households. As part of any pilot | 19 | | project proposed
under this Section, a public utility may | 20 | | propose to include customer rebates, incentives, associated | 21 | | tariffs, and proposed regulatory treatment, in a manner | 22 | | similar to Commission approved electric energy
efficiency | 23 | | plans described in Section 8-103B. | 24 | | (d) Any gas public utility, electric public utility, or | 25 | | combination public utility constructing or operating a | 26 | | Commission-approved pilot thermal energy network project shall |
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| 1 | | report to the Commission, on a quarterly basis and until | 2 | | completion of the pilot thermal energy network project, as | 3 | | determined by the Commission, the status of each pilot thermal | 4 | | energy network project. The Commission shall post and make | 5 | | publicly available the reports on its website. The report | 6 | | shall include, but not be limited to: | 7 | | (1) the stage of development of each pilot project; | 8 | | (2) the barriers to development; | 9 | | (3) the number of customers served; | 10 | | (4) the costs of the pilot project; | 11 | | (5) the number of jobs retained or created by the | 12 | | pilot project; and | 13 | | (6) any other information the Commission deems to
be | 14 | | in the public interest or considers likely to prove useful | 15 | | or relevant to the rulemaking described in subsection (h). | 16 | | (e) Any gas public utility, electric public utility, or | 17 | | combination public utility constructing or operating a | 18 | | Commission-approved pilot thermal energy network project shall | 19 | | demonstrate that it has entered into a labor peace agreement | 20 | | with a bona fide labor organization that is actively engaged | 21 | | in representing its employees. The labor peace agreement shall | 22 | | apply to the employees necessary for the ongoing maintenance | 23 | | and operation of the thermal energy network. The labor peace | 24 | | agreement shall be an ongoing material condition of | 25 | | authorization to maintain and operate the thermal energy | 26 | | networks. |
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| 1 | | (f) Any contractor or subcontractor that performs work on
| 2 | | a pilot thermal energy network under this Section shall be a
| 3 | | responsible bidder as described in Section 30-22 of the
| 4 | | Illinois Procurement Code and shall certify that not less than | 5 | | prevailing wage, as determined under the Prevailing Wage Act, | 6 | | was or will be paid to employees who are engaged in | 7 | | construction activities associated with the pilot thermal | 8 | | energy network project. The contractor or subcontractor
shall | 9 | | submit evidence to the Commission that it complied with the | 10 | | requirements of this subsection. | 11 | | (g) For any pending application for a thermal energy | 12 | | network, the contractor or subcontractor shall submit evidence | 13 | | that the contractor or subcontractor has entered into a fully | 14 | | executed project labor agreement with the applicable local | 15 | | building trades council. The Commission shall not approve any | 16 | | pending applications until the contractor or subcontractor has | 17 | | submitted the information required under this subsection. | 18 | | (h) Within 4 years after the completion of the | 19 | | construction of all thermal energy network projects under this | 20 | | Section, the Commission shall adopt rules to, at a minimum: | 21 | | (1) create fair market access rules for
thermal energy | 22 | | networks to accept thermal energy and that do
not increase | 23 | | greenhouse gas emissions or copollutants; | 24 | | (2) to the extent it is in the public interest to do | 25 | | so, exempt small-scale thermal energy networks from active | 26 | | regulation by the Commission; |
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| 1 | | (3) promote the training and transition of utility
| 2 | | workers impacted by this amendatory Act of the 103rd
| 3 | | General Assembly; and | 4 | | (4) encourage third-party participation and
| 5 | | competition where it will maximize benefits to customers. | 6 | | (i) A gas public utility, electric public utility, or | 7 | | combination public utility required to develop any pilot | 8 | | thermal energy network project under this Section shall be | 9 | | permitted to recover all reasonable and prudently incurred | 10 | | costs associated with the development, construction, and | 11 | | operation of one or more pilot thermal energy network projects | 12 | | through general rates set pursuant to Section 9-201 or through | 13 | | rates set in a Multi-Year Rate Plan pursuant to Section | 14 | | 16-108.18. The Commission shall have broad discretion in | 15 | | approving proposed pilot projects that are consistent with the | 16 | | public interest and shall have the discretion to approve all | 17 | | tariffs and issue other regulatory approvals as necessary to | 18 | | permit a pilot program that facilitates a
full review of | 19 | | technologies and associated policies with respect
to thermal | 20 | | network technology in Illinois.
| 21 | | Section 999. Effective date. This Act takes effect upon | 22 | | becoming law.".
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