SB3173eng 97TH GENERAL ASSEMBLY

SB3173 Engrossed LRB097 19727 CEL 64986 b

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Power Agency Act is amended by changing Sections 1-10 and 1-20 and by adding Section 1-76 as follows:

(20 ILCS 3855/1-10)

Sec. 1-10. Definitions.

"Agency" means the Illinois Power Agency.

"Agency loan agreement" means any agreement pursuant to which the Illinois Finance Authority agrees to loan the proceeds of revenue bonds issued with respect to a project to the Agency upon terms providing for loan repayment installments at least sufficient to pay when due all principal of, interest and premium, if any, on those revenue bonds, and providing for maintenance, insurance, and other matters in respect of the project.

"Authority" means the Illinois Finance Authority.

"Clean coal facility" means an electric generating facility that uses primarily coal as a feedstock and that captures and sequesters carbon dioxide emissions at the following levels: at least 50% of the total carbon dioxide emissions that the facility would otherwise emit if, at the time construction commences, the facility is scheduled to commence operation before 2016, at least 70% of the total carbon dioxide emissions that the facility would otherwise emit if, at the time construction commences, the facility is scheduled to commence operation during 2016 or 2017, and at least 90% of the total carbon dioxide emissions that the facility would otherwise emit if, at the time construction commences, the facility is scheduled to commence operation after 2017. The power block of the clean coal facility shall not exceed allowable emission rates for sulfur dioxide, nitrogen oxides, carbon monoxide, particulates and mercury for a natural gas-fired combined-cycle facility the same size as and in the same location as the clean coal facility at the time the clean coal facility obtains an approved air permit. All coal used by a clean coal facility shall have high volatile bituminous rank and greater than 1.7 pounds of sulfur per million btu content, unless the clean coal facility does not use gasification technology and was operating as a conventional coal-fired electric generating facility on June 1, 2009 (the effective date of Public Act 95-1027).

"Clean coal SNG brownfield facility" means a facility that (1) has commenced construction by July 1, 2015 on an urban brownfield site in a municipality with at least 1,000,000 residents; (2) uses a gasification process to produce substitute natural gas; (3) uses coal as at least 50% of the total feedstock over the term of any sourcing agreement with a utility and the remainder of the feedstock may be either petroleum coke or coal, with all such coal having a high bituminous rank and greater than 1.7 pounds of sulfur per million Btu content unless the facility reasonably determines that it is necessary to use additional petroleum coke to deliver additional consumer savings, in which case the facility shall use coal for at least 35% of the total feedstock over the term of any sourcing agreement; and (4) captures and sequesters at least 85% of the total carbon dioxide emissions that the facility would otherwise emit.

"Clean coal SNG facility" means a facility that uses a gasification process to produce substitute natural gas, that sequesters at least 90% of the total carbon dioxide emissions that the facility would otherwise emit, that uses at least 90% coal as a feedstock, with all such coal having a high bituminous rank and greater than 1.7 pounds of sulfur per million btu content, and that has a valid and effective permit to construct emission sources and air pollution control equipment and approval with respect to the federal regulations for Prevention of Significant Deterioration of Air Quality (PSD) for the plant pursuant to the federal Clean Air Act; provided, however, a clean coal SNG brownfield facility shall not be a clean coal SNG facility.

"Commission" means the Illinois Commerce Commission.

"Costs incurred in connection with the development and construction of a facility" means:

(1) the cost of acquisition of all real property, fixtures, and improvements in connection therewith and equipment, personal property, and other property, rights, and easements acquired that are deemed necessary for the operation and maintenance of the facility;

(2) financing costs with respect to bonds, notes, and other evidences of indebtedness of the Agency;

(3) all origination, commitment, utilization, facility, placement, underwriting, syndication, credit enhancement, and rating agency fees;

(4) engineering, design, procurement, consulting, legal, accounting, title insurance, survey, appraisal, escrow, trustee, collateral agency, interest rate hedging, interest rate swap, capitalized interest, contingency, as required by lenders, and other financing costs, and other expenses for professional services; and

(5) the costs of plans, specifications, site study and investigation, installation, surveys, other Agency costs and estimates of costs, and other expenses necessary or incidental to determining the feasibility of any project, together with such other expenses as may be necessary or incidental to the financing, insuring, acquisition, and construction of a specific project and starting up, commissioning, and placing that project in operation.

"Department" means the Department of Commerce and Economic Opportunity.

"Director" means the Director of the Illinois Power Agency.

"Demand-response" means measures that decrease peak electricity demand or shift demand from peak to off-peak periods.

"Distributed renewable energy generation device" means a device that is:

(1) powered by wind, solar thermal energy, photovoltaic cells and panels, biodiesel, crops and untreated and unadulterated organic waste biomass, tree waste, and hydropower that does not involve new construction or significant expansion of hydropower dams;

(2) interconnected at the distribution system level of either an electric utility as defined in this Section, an alternative retail electric supplier as defined in Section 16-102 of the Public Utilities Act, a municipal utility as defined in Section 3-105 of the Public Utilities Act, or a rural electric cooperative as defined in Section 3-119 of the Public Utilities Act;

(3) located on the customer side of the customer's electric meter and is primarily used to offset that customer's electricity load; and

(4) limited in nameplate capacity to no more than 2,000 kilowatts.

"Eligible retail customers" has the same definition as found in Section 16-111.5 of the Public Utilities Act.

"Energy efficiency" means measures that reduce the amount of electricity or natural gas required to achieve a given end use.

"Electric utility" has the same definition as found in Section 16-102 of the Public Utilities Act.

"Facility" means an electric generating unit or a co-generating unit that produces electricity along with related equipment necessary to connect the facility to an electric transmission or distribution system.

"Governmental aggregator" means one or more units of local government that individually or collectively procure electricity to serve residential retail electrical loads located within its or their jurisdiction.

"Local government" means a unit of local government as defined in Article VII of Section 1 of Article VII of the Illinois Constitution.

"Municipal brownfield site" means a site (1) that is owned by a municipality and conveyed or leased to a person proposing to operate a qualified solar remediation facility on such site and (2) that is the subject of a Superfund alternative approach agreement between the United States Environmental Protection Agency and potentially responsible parties in accordance with the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, requiring remedial clean up of such site.

"Municipality" means a city, village, or incorporated town.

"Person" means any natural person, firm, partnership, corporation, either domestic or foreign, company, association, limited liability company, joint stock company, or association and includes any trustee, receiver, assignee, or personal representative thereof.

"Project" means the planning, bidding, and construction of a facility.

"Public utility" has the same definition as found in Section 3-105 of the Public Utilities Act.

"Qualified solar power purchase agreement" means an agreement between the operator of a qualified solar remediation facility and an electric utility that has terms and conditions meeting the requirements of subsection (c) of Section 1-76 of this Act and is consistent with the utility's applicable tariffs.

"Qualified solar remediation facility" means an electric generating facility:

(1) that uses photovoltaic cells and panels to produce energy;

(2) that is located at a municipal brownfield site;

(3) that has a nameplate capacity of no more than 20 megawatts; and

(4) where construction of the electric generating facility structure has not commenced on or before the date the application to approve a qualified solar power purchase agreement for such facility is submitted to the Agency in accordance with Section 1-76 of this Act.

"Real property" means any interest in land together with all structures, fixtures, and improvements thereon, including lands under water and riparian rights, any easements, covenants, licenses, leases, rights-of-way, uses, and other interests, together with any liens, judgments, mortgages, or other claims or security interests related to real property.

"Renewable energy credit" means a tradable credit that represents the environmental attributes of a certain amount of energy produced from a renewable energy resource.

"Renewable energy resources" includes energy and its associated renewable energy credit or renewable energy credits from wind, solar thermal energy, photovoltaic cells and panels, biodiesel, anaerobic digestion, crops and untreated and unadulterated organic waste biomass, tree waste, hydropower that does not involve new construction or significant expansion of hydropower dams, and other alternative sources of environmentally preferable energy. For purposes of this Act, landfill gas produced in the State is considered a renewable energy resource. "Renewable energy resources" does not include the incineration or burning of tires, garbage, general household, institutional, and commercial waste, industrial lunchroom or office waste, landscape waste other than tree waste, railroad crossties, utility poles, or construction or demolition debris, other than untreated and unadulterated waste wood.

"Revenue bond" means any bond, note, or other evidence of indebtedness issued by the Authority, the principal and interest of which is payable solely from revenues or income derived from any project or activity of the Agency.

"Sequester" means permanent storage of carbon dioxide by injecting it into a saline aquifer, a depleted gas reservoir, or an oil reservoir, directly or through an enhanced oil recovery process that may involve intermediate storage, regardless of whether these activities are conducted by a clean coal facility, a clean coal SNG facility, a clean coal SNG brownfield facility, or a party with which a clean coal facility, or clean coal SNG facility, or clean coal SNG brownfield facility has contracted for such purposes.

"Sourcing agreement" means (i) in the case of an electric utility, an agreement between the owner of a clean coal facility and such electric utility, which agreement shall have terms and conditions meeting the requirements of paragraph (3) of subsection (d) of Section 1-75, (ii) in the case of an alternative retail electric supplier, an agreement between the owner of a clean coal facility and such alternative retail electric supplier, which agreement shall have terms and conditions meeting the requirements of Section 16-115(d)(5) of the Public Utilities Act, and (iii) in case of a gas utility, an agreement between the owner of a clean coal SNG brownfield facility and the gas utility, which agreement shall have the terms and conditions meeting the requirements of subsection (h-1) of Section 9-220 of the Public Utilities Act.

"Substitute natural gas" or "SNG" means a gas manufactured by gasification of hydrocarbon feedstock, which is substantially interchangeable in use and distribution with conventional natural gas.

"Total resource cost test" or "TRC test" means a standard that is met if, for an investment in energy efficiency or demand-response measures, the benefit-cost ratio is greater than one. The benefit-cost ratio is the ratio of the net present value of the total benefits of the program to the net present value of the total costs as calculated over the lifetime of the measures. A total resource cost test compares the sum of avoided electric utility costs, representing the benefits that accrue to the system and the participant in the delivery of those efficiency measures, as well as other quantifiable societal benefits, including avoided natural gas utility costs, to the sum of all incremental costs of end-use measures that are implemented due to the program (including both utility and participant contributions), plus costs to administer, deliver, and evaluate each demand-side program, to quantify the net savings obtained by substituting the demand-side program for supply resources. In calculating avoided costs of power and energy that an electric utility would otherwise have had to acquire, reasonable estimates shall be included of financial costs likely to be imposed by future regulations and legislation on emissions of greenhouse gases.

(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09; 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10; 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-491, eff. 8-22-11; 97-616, eff. 10-26-11; revised 11-10-11.)

(20 ILCS 3855/1-20)

Sec. 1-20. General powers of the Agency.

(a) The Agency is authorized to do each of the following:

(1) Develop electricity procurement plans to ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time, taking into account any benefits of price stability, for electric utilities that on December 31, 2005 provided electric service to at least 100,000 customers in Illinois and for small multi-jurisdictional electric utilities that (A) on December 31, 2005 served less than 100,000 customers in Illinois and (B) request a procurement plan for their Illinois jurisdictional load. The procurement plans shall be updated on an annual basis and shall include electricity generated from renewable resources sufficient to achieve the standards specified in this Act.

(2) Conduct competitive procurement processes to procure the supply resources identified in the procurement plan, pursuant to Section 16-111.5 of the Public Utilities Act.

(3) Develop electric generation and co-generation facilities that use indigenous coal or renewable resources, or both, financed with bonds issued by the Illinois Finance Authority.

(4) Supply electricity from the Agency's facilities at cost to one or more of the following: municipal electric systems, governmental aggregators, or rural electric cooperatives in Illinois.

(b) Except as otherwise limited by this Act, the Agency has all of the powers necessary or convenient to carry out the purposes and provisions of this Act, including without limitation, each of the following:

(1) To have a corporate seal, and to alter that seal at pleasure, and to use it by causing it or a facsimile to be affixed or impressed or reproduced in any other manner.

(2) To use the services of the Illinois Finance Authority necessary to carry out the Agency's purposes.

(3) To negotiate and enter into loan agreements and other agreements with the Illinois Finance Authority.

(4) To obtain and employ personnel and hire consultants that are necessary to fulfill the Agency's purposes, and to make expenditures for that purpose within the appropriations for that purpose.

(5) To purchase, receive, take by grant, gift, devise, bequest, or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use, and otherwise deal in and with, real or personal property whether tangible or intangible, or any interest therein, within the State.

(6) To acquire real or personal property, whether tangible or intangible, including without limitation property rights, interests in property, franchises, obligations, contracts, and debt and equity securities, and to do so by the exercise of the power of eminent domain in accordance with Section 1-21; except that any real property acquired by the exercise of the power of eminent domain must be located within the State.

(7) To sell, convey, lease, exchange, transfer, abandon, or otherwise dispose of, or mortgage, pledge, or create a security interest in, any of its assets, properties, or any interest therein, wherever situated.

(8) To purchase, take, receive, subscribe for, or otherwise acquire, hold, make a tender offer for, vote, employ, sell, lend, lease, exchange, transfer, or otherwise dispose of, mortgage, pledge, or grant a security interest in, use, and otherwise deal in and with, bonds and other obligations, shares, or other securities (or interests therein) issued by others, whether engaged in a similar or different business or activity.

(9) To make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of the powers and functions of the Agency under this Act, including contracts with any person, including personal service contracts, or with any local government, State agency, or other entity; and all State agencies and all local governments are authorized to enter into and do all things necessary to perform any such agreement, contract, or other instrument with the Agency. No such agreement, contract, or other instrument shall exceed 40 years.

(10) To lend money, invest and reinvest its funds in accordance with the Public Funds Investment Act, and take and hold real and personal property as security for the payment of funds loaned or invested.

(11) To borrow money at such rate or rates of interest as the Agency may determine, issue its notes, bonds, or other obligations to evidence that indebtedness, and secure any of its obligations by mortgage or pledge of its real or personal property, machinery, equipment, structures, fixtures, inventories, revenues, grants, and other funds as provided or any interest therein, wherever situated.

(12) To enter into agreements with the Illinois Finance Authority to issue bonds whether or not the income therefrom is exempt from federal taxation.

(13) To procure insurance against any loss in connection with its properties or operations in such amount or amounts and from such insurers, including the federal government, as it may deem necessary or desirable, and to pay any premiums therefor.

(14) To negotiate and enter into agreements with trustees or receivers appointed by United States bankruptcy courts or federal district courts or in other proceedings involving adjustment of debts and authorize proceedings involving adjustment of debts and authorize legal counsel for the Agency to appear in any such proceedings.

(15) To file a petition under Chapter 9 of Title 11 of the United States Bankruptcy Code or take other similar action for the adjustment of its debts.

(16) To enter into management agreements for the operation of any of the property or facilities owned by the Agency.

(17) To enter into an agreement to transfer and to transfer any land, facilities, fixtures, or equipment of the Agency to one or more municipal electric systems, governmental aggregators, or rural electric agencies or cooperatives, for such consideration and upon such terms as the Agency may determine to be in the best interest of the citizens of Illinois.

(18) To enter upon any lands and within any building whenever in its judgment it may be necessary for the purpose of making surveys and examinations to accomplish any purpose authorized by this Act.

(19) To maintain an office or offices at such place or places in the State as it may determine.

(20) To request information, and to make any inquiry, investigation, survey, or study that the Agency may deem necessary to enable it effectively to carry out the provisions of this Act.

(21) To accept and expend appropriations.

(22) To engage in any activity or operation that is incidental to and in furtherance of efficient operation to accomplish the Agency's purposes, including hiring employees that the Director deems essential for the operations of the Agency.

(23) To adopt, revise, amend, and repeal rules with respect to its operations, properties, and facilities as may be necessary or convenient to carry out the purposes of this Act, subject to the provisions of the Illinois Administrative Procedure Act and Sections 1-22 and 1-35 of this Act.

(24) To establish and collect charges and fees as described in this Act.

(25) To conduct competitive gasification feedstock procurement processes to procure the feedstocks for the clean coal SNG brownfield facility in accordance with the requirements of Section 1-78 of this Act.

(26) To review, revise, and approve sourcing agreements and mediate and resolve disputes between gas utilities and the clean coal SNG brownfield facility pursuant to subsection (h-1) of Section 9-220 of the Public Utilities Act.

(27) To review and approve qualified solar power purchase agreements pursuant to Section 1-76 of this Act.

(Source: P.A. 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10; 97-96, eff. 7-13-11; 97-325, eff. 8-12-11; 97-618, eff. 10-26-11; revised 11-10-11.)

(20 ILCS 3855/1-76 new)

Sec. 1-76. Qualified solar power purchase agreements.

(a) The General Assembly finds that encouraging the development and use of solar energy is in the public interest and consistent with the renewable energy goals of the State. The General Assembly further finds that repurposing and redeveloping brownfield sites owned by municipalities, including in particular those sites that are in need of remedial clean up due to prior contamination, to host solar energy producing facilities is in the economic and environmental interests of the State, those municipalities, and the public.

(b) For a period of one year after the effective date of this amendatory Act of the 97th General Assembly, the Agency shall accept applications from proposed operators of proposed qualified solar remediation facilities to approve a qualified solar power purchase agreement. The Agency shall accept only one application that meets the criteria set forth in this Section. The Agency shall not accept an application that does not meet the criteria set forth in this Section. The application shall include a proposed qualified solar power purchase agreement between the applicant and an electric utility.

(c) Each qualified solar power purchase agreement shall:

(1) include provisions governing the prices paid for electricity generated by the qualified solar remediation facility and for renewable energy credits purchased in connection with the electricity, which prices in aggregate (for both electricity and renewable energy credits) shall not:

(A) exceed 23 cents per kilowatt hour in the first year of the sale thereof pursuant to such qualified solar power purchase agreement; and

(B) increase during the term of the qualified solar power purchase agreement by more than 1.5% per year;

(2) specify a term of no more than 20 years, commencing on the commercial operation date of the facility;

(3) require the facility to be constructed on the specified municipal brownfield site and to achieve the commercial operation date within 5 years after the approval of the qualified solar power purchase agreement by the Agency;

(4) include a representation by the applicant that, from and after the execution of the qualified solar power purchase agreement, any costs incurred in the environmental remediation of the municipal brownfield site, other than for the construction of the qualified solar remediation facility, shall not cause an increase in the prices paid for electricity generated by the qualified solar remediation facility in excess of the prices stated in the proposed qualified solar power purchase agreement;

(5) provide for purchase and sale of the full output of a qualified solar remediation facility consistent with the electric utility's tariffs and practice, but not to exceed a nameplate capacity of 20 megawatts;

(6) require the qualified solar remediation facility to provide to the electric utility, on a day-prior basis, an estimate of the integrated hourly output from the facility and, on a monthly basis, the actual integrated hourly output from the facility; and

(7) provide that the effectiveness of such agreement is contingent upon (i) approval by the Agency pursuant to this Section and (ii) inclusion in a procurement plan that is submitted by the Agency and approved by the Commission.

(d) The Agency shall promptly review an application submitted pursuant to this Section. The Agency shall approve a qualified solar power purchase agreement within 90 days after the Agency has received such an application or before the next submission of the Agency's procurement plan to the Commission, whichever is earlier, unless the Agency finds that the agreement does not conform to the requirements of subsection (c) of this Section. Immediately following the approval of the qualified solar power purchase agreement by the Agency, the Agency shall include and incorporate the qualified solar power purchase agreement and the proposed output in the Agency's procurement plan.

(e) The Commission shall approve the inclusion of the qualified solar power purchase agreement in the Agency's procurement plan, unless the Commission finds that any projected rate increases to eligible retail electric customers attributable solely to costs incurred by an electric utility pursuant to the qualified solar power purchase agreement violate the requirements of paragraph (2) of subsection (c) of Section 1-75 of this Act. Upon approval of a qualified solar power purchase agreement by the Commission, such qualified solar power purchase agreement shall be executed by the parties and become effective subject to the electric utility's applicable tariffs.

(f) The Agency may assess a fee to the applicant to recover the costs incurred in reviewing the application pursuant to this Section.

(g) All costs incurred by an electric utility pursuant to a qualified solar power purchase agreement approved by the Agency pursuant to this Section, including costs for renewable energy credits purchased in connection with electricity generated by that qualified solar remediation facility and costs incurred in negotiating the agreement and seeking approval by the Agency in accordance with this Section, shall be deemed prudently incurred and reasonable in amount, and the electric utility shall be entitled to full cost recovery pursuant to the tariffs filed with the Commission.

(h) Any renewable energy credits purchased by an electric utility pursuant to a qualified solar power purchase agreement approved by the Agency pursuant to this Section shall count towards the required percentages for solar photovoltaic energy for the purposes of subsection (c) of Section 1-75 of this Act.

(i) The electric utility shall include purchases under the qualified solar power purchase agreement in its portfolio of purchases associated with eligible retail customers, at a value equal to the total of the per-kilowatt-hour cost of on-peak energy, capacity, and solar renewable energy credits associated with renewable energy procured in the most recent power procurement event conducted under Section 1-75 of this Act that included executed contracts for solar renewable energy credits. The value of purchases under the qualified solar power purchase agreement shall be recovered under tariffs approved by the Commission pursuant to subsection (l) of Section 16-111.5 of the Public Utilities Act.

The electric utility shall estimate the kilowatt-hour quantity of qualified solar power purchase agreement energy expected to be acquired in a procurement plan year. The over or under cost recovery mechanism contained in the tariff approved by the Commission pursuant to subsection (l) of Section 16-111.5 of the Public Utilities Act shall reconcile the estimated costs with the actual costs allocated to eligible retail customers by multiplying the per-kilowatt-hour cost established in this Section by the difference between the estimated kilowatt-hour quantity and the actual kilowatt-hour quantity generated by the qualified solar remediation facility.

(j) If the price established by the qualified solar power purchase agreement in conformance with subsection (c) of this Section is different than the value of the purchases under the qualified solar power purchase agreement as determined by subsection (i) of this Section, the difference shall be collected equally from, or credited equally to, all of the electric utility's delivery service customers through a cents per-kilowatt-hour tariff mechanism approved by the Commission. Such tariff mechanism shall be established outside the context of a general rate case or formula rate proceeding. The tariff mechanism each year shall establish an estimated amount to collect or credit and shall contain provisions that ensure that its application does not result in over or under recovery, including, but not limited to, changes in qualified solar remediation facility production or customer usage or demand patterns.

The application of subsections (i) and (j) of this Section together shall be construed to permit the electric utility to recover all of its costs incurred to comply with this Section.

(k) Nothing in this Section shall be construed to prohibit the electric utility from recovering prudently incurred costs under this Section from its delivery service customers or bundled service customers.

Section 99. Effective date. This Act takes effect upon becoming law.