Public Act 096-0784
 
SB0658 Enrolled LRB096 06724 MJR 16808 b

    AN ACT concerning regulation.
 
    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 1-56 as
follows:
 
    (20 ILCS 3855/1-10)
    (Text of Section before amendment by P.A. 95-1027)
    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 SNG facility" means a facility that uses a
gasification process to produce substitute natural gas, that
sequesters at least 90% of the total carbon emissions that the
facility would otherwise emit and that uses petroleum coke or
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.
    "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 and
    improvements in connection therewith and equipment 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 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 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.
    "Energy efficiency" means measures that reduce the amount
of electricity 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 the Illinois
Constitution.
    "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.
    "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, crops and untreated and unadulterated organic waste
biomass, trees and tree trimmings, 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 trees and
tree trimmings, 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.
    "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, 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. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09.)
 
    (Text of Section after amendment by P.A. 95-1027)
    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 emissions at the following
levels: at least 50% of the total carbon 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 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
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) this
amendatory Act of the 95th General Assembly.
    "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 emissions that the
facility would otherwise emit and that uses petroleum coke or
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.
    "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 and
    improvements in connection therewith and equipment 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 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 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.
    "Energy efficiency" means measures that reduce the amount
of electricity 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 the Illinois
Constitution.
    "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.
    "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, crops and untreated and unadulterated organic waste
biomass, trees and tree trimmings, 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 trees and
tree trimmings, 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 in a
salt dome.
    "Servicing 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, and (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.
    "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, 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. 95-481, eff. 8-28-07; 95-913, eff. 1-1-09;
95-1027, eff. 6-1-09; revised 1-14-09.)
 
    (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. 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, 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.
        (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 manage procurement of substitute natural gas
    from a facility that meets the criteria specified in
    subsection (a) of Section 1-56 of this Act, on terms and
    conditions that may be approved by the Agency pursuant to
    subsection (d) of Section 1-56 of this Act, to support the
    operations of State agencies and local governments that
    agree to such terms and conditions. This procurement
    process is not subject to the Procurement Code.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    (20 ILCS 3855/1-56 new)
    Sec. 1-56. Clean coal SNG facility construction.
    (a) It is the intention of the General Assembly to provide
additional long-term natural gas price stability to the State
and consumers by promoting the development of a clean coal SNG
facility that would produce a minimum annual output of 30 Bcf
of SNG and commence construction no later than June 1, 2013 on
a brownfield site in a municipality with at least one million
residents. The costs associated with preparing a facility cost
report for such a facility, which contains all of the
information required by subsection (b) of this Section, may be
paid or reimbursed pursuant to subsection (c) of this Section.
    (b) The facility cost report for a facility that meets the
criteria set forth in subsection (a) of this Section shall be
prepared by a duly licensed engineering firm that details the
estimated capital costs payable to one or more contractors or
suppliers for the engineering, procurement, and construction
of the components comprising the facility and the estimated
costs of operation and maintenance of the facility. The report
must be provided to the General Assembly and the Agency on or
before April 30, 2010. The facility cost report shall include
all of the following:
        (1) An estimate of the capital cost of the core plant
    based on a front-end engineering and design study. The core
    plant shall include all civil, structural, mechanical,
    electrical, control, and safety systems. The quoted
    construction costs shall be expressed in nominal dollars as
    of the date that the quote is prepared and shall include:
            (A) capitalized financing costs during
        construction;
            (B) taxes, insurance, and other owner's costs; and
            (C) any assumed escalation in materials and labor
        beyond the date as of which the construction cost quote
        is expressed;
        (2) An estimate of the capital cost of the balance of
    the plant, including any capital costs associated with site
    preparation and remediation, sequestration of carbon
    dioxide emissions, and all interconnects and interfaces
    required to operate the facility, such as construction or
    backfeed power supply, pipelines to transport substitute
    natural gas or carbon dioxide, potable water supply,
    natural gas supply, water supply, water discharge,
    landfill, access roads, and coal delivery. The front-end
    engineering and design study and the cost study for the
    balance of the plant shall include sufficient design work
    to permit quantification of major categories of materials,
    commodities and labor hours, and receipt of quotes from
    vendors of major equipment required to construct and
    operate the facility.
        (3) An operating and maintenance cost quote that will
    provide the estimated cost of delivered fuel, personnel,
    maintenance contracts, chemicals, catalysts, consumables,
    spares, and other fixed and variable operating and
    maintenance costs. This quote is subject to the following
    requirements:
            (A) The delivered fuel cost estimate shall be
        provided by a recognized third party expert or experts
        in the fuel and transportation industries.
            (B) The balance of the operating and maintenance
        cost quote, excluding delivered fuel costs shall be
        developed based on the inputs provided by a duly
        licensed engineering firm performing the construction
        cost quote, potential vendors under long-term service
        agreements and plant operating agreements, or
        recognized third-party plant operator or operators.
        The operating and maintenance cost quote shall be
    expressed in nominal dollars as of the date that the quote
    is prepared and shall include (i) taxes, insurance, and
    other owner's costs and (ii) any assumed escalation in
    materials and labor beyond the date as of which the
    operating and maintenance cost quote is expressed.
    (c) Reasonable amounts paid or due to be paid by the owner
or owners of the clean coal SNG facility to third parties
unrelated to the owner or owners to prepare the facility cost
report may be reimbursed or paid up to $10 million, through
funding authorized pursuant to 20 ILCS 3501/825-65.
    (d) The Agency shall review the facility report and based
on that report, consider whether to enter into long-term
contracts to purchase SNG from the facility pursuant to Section
1-20 of this Act. To assist with its evaluation of the report,
the Agency may hire one or more experts or consultants, the
reasonable costs of which, not to exceed $250,000, shall be
paid for by the owner or owners of the clean coal SNG facility
submitting the facility cost report. The Agency may begin the
process of selecting such experts or consultants prior to
receipt of the facility cost report.
 
    Section 95. No acceleration or delay. Where this Act makes
changes in a statute that is represented in this Act by text
that is not yet or no longer in effect (for example, a Section
represented by multiple versions), the use of that text does
not accelerate or delay the taking effect of (i) the changes
made by this Act or (ii) provisions derived from any other
Public Act.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.