Public Act 097-0658
 
HB1368 EnrolledLRB097 09296 ASK 49431 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 1-75 and 1-125 as follows:
 
    (20 ILCS 3855/1-75)
    Sec. 1-75. Planning and Procurement Bureau. The Planning
and Procurement Bureau has the following duties and
responsibilities:
        (a) The Planning and Procurement Bureau shall each
    year, beginning in 2008, develop procurement plans and
    conduct competitive procurement processes in accordance
    with the requirements of Section 16-111.5 of the Public
    Utilities Act for the eligible retail customers of electric
    utilities that on December 31, 2005 provided electric
    service to at least 100,000 customers in Illinois. For the
    purposes of this Section, the term "eligible retail
    customers" has the same definition as found in Section
    16-111.5(a) of the Public Utilities Act.
            (1) The Agency shall each year, beginning in 2008,
        as needed, issue a request for qualifications for
        experts or expert consulting firms to develop the
        procurement plans in accordance with Section 16-111.5
        of the Public Utilities Act. In order to qualify an
        expert or expert consulting firm must have:
                (A) direct previous experience assembling
            large-scale power supply plans or portfolios for
            end-use customers;
                (B) an advanced degree in economics,
            mathematics, engineering, risk management, or a
            related area of study;
                (C) 10 years of experience in the electricity
            sector, including managing supply risk;
                (D) expertise in wholesale electricity market
            rules, including those established by the Federal
            Energy Regulatory Commission and regional
            transmission organizations;
                (E) expertise in credit protocols and
            familiarity with contract protocols;
                (F) adequate resources to perform and fulfill
            the required functions and responsibilities; and
                (G) the absence of a conflict of interest and
            inappropriate bias for or against potential
            bidders or the affected electric utilities.
            (2) The Agency shall each year, as needed, issue a
        request for qualifications for a procurement
        administrator to conduct the competitive procurement
        processes in accordance with Section 16-111.5 of the
        Public Utilities Act. In order to qualify an expert or
        expert consulting firm must have:
                (A) direct previous experience administering a
            large-scale competitive procurement process;
                (B) an advanced degree in economics,
            mathematics, engineering, or a related area of
            study;
                (C) 10 years of experience in the electricity
            sector, including risk management experience;
                (D) expertise in wholesale electricity market
            rules, including those established by the Federal
            Energy Regulatory Commission and regional
            transmission organizations;
                (E) expertise in credit and contract
            protocols;
                (F) adequate resources to perform and fulfill
            the required functions and responsibilities; and
                (G) the absence of a conflict of interest and
            inappropriate bias for or against potential
            bidders or the affected electric utilities.
            (3) The Agency shall provide affected utilities
        and other interested parties with the lists of
        qualified experts or expert consulting firms
        identified through the request for qualifications
        processes that are under consideration to develop the
        procurement plans and to serve as the procurement
        administrator. The Agency shall also provide each
        qualified expert's or expert consulting firm's
        response to the request for qualifications. All
        information provided under this subparagraph shall
        also be provided to the Commission. The Agency may
        provide by rule for fees associated with supplying the
        information to utilities and other interested parties.
        These parties shall, within 5 business days, notify the
        Agency in writing if they object to any experts or
        expert consulting firms on the lists. Objections shall
        be based on:
                (A) failure to satisfy qualification criteria;
                (B) identification of a conflict of interest;
            or
                (C) evidence of inappropriate bias for or
            against potential bidders or the affected
            utilities.
            The Agency shall remove experts or expert
        consulting firms from the lists within 10 days if there
        is a reasonable basis for an objection and provide the
        updated lists to the affected utilities and other
        interested parties. If the Agency fails to remove an
        expert or expert consulting firm from a list, an
        objecting party may seek review by the Commission
        within 5 days thereafter by filing a petition, and the
        Commission shall render a ruling on the petition within
        10 days. There is no right of appeal of the
        Commission's ruling.
            (4) The Agency shall issue requests for proposals
        to the qualified experts or expert consulting firms to
        develop a procurement plan for the affected utilities
        and to serve as procurement administrator.
            (5) The Agency shall select an expert or expert
        consulting firm to develop procurement plans based on
        the proposals submitted and shall award one-year
        contracts to those selected with an option for the
        Agency for a one-year renewal.
            (6) The Agency shall select an expert or expert
        consulting firm, with approval of the Commission, to
        serve as procurement administrator based on the
        proposals submitted. If the Commission rejects, within
        5 days, the Agency's selection, the Agency shall submit
        another recommendation within 3 days based on the
        proposals submitted. The Agency shall award a one-year
        contract to the expert or expert consulting firm so
        selected with Commission approval with an option for
        the Agency for a one-year renewal.
        (b) The experts or expert consulting firms retained by
    the Agency shall, as appropriate, prepare procurement
    plans, and conduct a competitive procurement process as
    prescribed in Section 16-111.5 of the Public Utilities Act,
    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 eligible retail customers of electric
    utilities that on December 31, 2005 provided electric
    service to at least 100,000 customers in the State of
    Illinois.
        (c) Renewable portfolio standard.
            (1) The procurement plans shall include
        cost-effective renewable energy resources. A minimum
        percentage of each utility's total supply to serve the
        load of eligible retail customers, as defined in
        Section 16-111.5(a) of the Public Utilities Act,
        procured for each of the following years shall be
        generated from cost-effective renewable energy
        resources: at least 2% by June 1, 2008; at least 4% by
        June 1, 2009; at least 5% by June 1, 2010; at least 6%
        by June 1, 2011; at least 7% by June 1, 2012; at least
        8% by June 1, 2013; at least 9% by June 1, 2014; at
        least 10% by June 1, 2015; and increasing by at least
        1.5% each year thereafter to at least 25% by June 1,
        2025. To the extent that it is available, at least 75%
        of the renewable energy resources used to meet these
        standards shall come from wind generation and,
        beginning on June 1, 2011, at least the following
        percentages of the renewable energy resources used to
        meet these standards shall come from photovoltaics on
        the following schedule: 0.5% by June 1, 2012, 1.5% by
        June 1, 2013; 3% by June 1, 2014; and 6% by June 1,
        2015 and thereafter. For purposes of this subsection
        (c), "cost-effective" means that the costs of
        procuring renewable energy resources do not cause the
        limit stated in paragraph (2) of this subsection (c) to
        be exceeded and do not exceed benchmarks based on
        market prices for renewable energy resources in the
        region, which shall be developed by the procurement
        administrator, in consultation with the Commission
        staff, Agency staff, and the procurement monitor and
        shall be subject to Commission review and approval.
            (2) For purposes of this subsection (c), the
        required procurement of cost-effective renewable
        energy resources for a particular year shall be
        measured as a percentage of the actual amount of
        electricity (megawatt-hours) supplied by the electric
        utility to eligible retail customers in the planning
        year ending immediately prior to the procurement. For
        purposes of this subsection (c), the amount paid per
        kilowatthour means the total amount paid for electric
        service expressed on a per kilowatthour basis. For
        purposes of this subsection (c), the total amount paid
        for electric service includes without limitation
        amounts paid for supply, transmission, distribution,
        surcharges, and add-on taxes.
            Notwithstanding the requirements of this
        subsection (c), the total of renewable energy
        resources procured pursuant to the procurement plan
        for any single year shall be reduced by an amount
        necessary to limit the annual estimated average net
        increase due to the costs of these resources included
        in the amounts paid by eligible retail customers in
        connection with electric service to:
                (A) in 2008, no more than 0.5% of the amount
            paid per kilowatthour by those customers during
            the year ending May 31, 2007;
                (B) in 2009, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2008 or 1%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2007;
                (C) in 2010, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009 or
            1.5% of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2007;
                (D) in 2011, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2010 or 2%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2007; and
                (E) thereafter, the amount of renewable energy
            resources procured pursuant to the procurement
            plan for any single year shall be reduced by an
            amount necessary to limit the estimated average
            net increase due to the cost of these resources
            included in the amounts paid by eligible retail
            customers in connection with electric service to
            no more than the greater of 2.015% of the amount
            paid per kilowatthour by those customers during
            the year ending May 31, 2007 or the incremental
            amount per kilowatthour paid for these resources
            in 2011.
            No later than June 30, 2011, the Commission shall
        review the limitation on the amount of renewable energy
        resources procured pursuant to this subsection (c) and
        report to the General Assembly its findings as to
        whether that limitation unduly constrains the
        procurement of cost-effective renewable energy
        resources.
            (3) Through June 1, 2011, renewable energy
        resources shall be counted for the purpose of meeting
        the renewable energy standards set forth in paragraph
        (1) of this subsection (c) only if they are generated
        from facilities located in the State, provided that
        cost-effective renewable energy resources are
        available from those facilities. If those
        cost-effective resources are not available in
        Illinois, they shall be procured in states that adjoin
        Illinois and may be counted towards compliance. If
        those cost-effective resources are not available in
        Illinois or in states that adjoin Illinois, they shall
        be purchased elsewhere and shall be counted towards
        compliance. After June 1, 2011, cost-effective
        renewable energy resources located in Illinois and in
        states that adjoin Illinois may be counted towards
        compliance with the standards set forth in paragraph
        (1) of this subsection (c). If those cost-effective
        resources are not available in Illinois or in states
        that adjoin Illinois, they shall be purchased
        elsewhere and shall be counted towards compliance.
            (4) The electric utility shall retire all
        renewable energy credits used to comply with the
        standard.
            (5) Beginning with the year commencing June 1,
        2010, an electric utility subject to this subsection
        (c) shall apply the lesser of the maximum alternative
        compliance payment rate or the most recent estimated
        alternative compliance payment rate for its service
        territory for the corresponding compliance period,
        established pursuant to subsection (d) of Section
        16-115D of the Public Utilities Act to its retail
        customers that take service pursuant to the electric
        utility's hourly pricing tariff or tariffs. The
        electric utility shall retain all amounts collected as
        a result of the application of the alternative
        compliance payment rate or rates to such customers,
        and, beginning in 2011, the utility shall include in
        the information provided under item (1) of subsection
        (d) of Section 16-111.5 of the Public Utilities Act the
        amounts collected under the alternative compliance
        payment rate or rates for the prior year ending May 31.
        Notwithstanding any limitation on the procurement of
        renewable energy resources imposed by item (2) of this
        subsection (c), the Agency shall increase its spending
        on the purchase of renewable energy resources to be
        procured by the electric utility for the next plan year
        by an amount equal to the amounts collected by the
        utility under the alternative compliance payment rate
        or rates in the prior year ending May 31. Beginning
        April 1, 2012, and each year thereafter, the Agency
        shall prepare a public report for the General Assembly
        and Illinois Commerce Commission that shall include,
        but not necessarily be limited to:
                (A) a comparison of the costs associated with
            the Agency's procurement of renewable energy
            resources to (1) the Agency's costs associated
            with electricity generated by other types of
            generation facilities and (2) the benefits
            associated with the Agency's procurement of
            renewable energy resources; and
                (B) an analysis of the rate impacts associated
            with the Illinois Power Agency's procurement of
            renewable resources, including, but not limited
            to, any long-term contracts, on the eligible
            retail customers of electric utilities.
            The analysis shall include the Agency's estimate
        of the total dollar impact that the Agency's
        procurement of renewable resources has had on the
        annual electricity bills of the customer classes that
        comprise each eligible retail customer class taking
        service from an electric utility. The Agency's report
        shall also analyze how the operation of the alternative
        compliance payment mechanism, any long-term contracts,
        or other aspects of the applicable renewable portfolio
        standards impacts the rates of customers of
        alternative retail electric suppliers.
    (d) Clean coal portfolio standard.
        (1) The procurement plans shall include electricity
    generated using clean coal. Each utility shall enter into
    one or more sourcing agreements with the initial clean coal
    facility, as provided in paragraph (3) of this subsection
    (d), covering electricity generated by the initial clean
    coal facility representing at least 5% of each utility's
    total supply to serve the load of eligible retail customers
    in 2015 and each year thereafter, as described in paragraph
    (3) of this subsection (d), subject to the limits specified
    in paragraph (2) of this subsection (d). It is the goal of
    the State that by January 1, 2025, 25% of the electricity
    used in the State shall be generated by cost-effective
    clean coal facilities. For purposes of this subsection (d),
    "cost-effective" means that the expenditures pursuant to
    such sourcing agreements do not cause the limit stated in
    paragraph (2) of this subsection (d) to be exceeded and do
    not exceed cost-based benchmarks, which shall be developed
    to assess all expenditures pursuant to such sourcing
    agreements covering electricity generated by clean coal
    facilities, other than the initial clean coal facility, by
    the procurement administrator, in consultation with the
    Commission staff, Agency staff, and the procurement
    monitor and shall be subject to Commission review and
    approval.
            (A) A utility party to a sourcing agreement shall
        immediately retire any emission credits that it
        receives in connection with the electricity covered by
        such agreement.
            (B) Utilities shall maintain adequate records
        documenting the purchases under the sourcing agreement
        to comply with this subsection (d) and shall file an
        accounting with the load forecast that must be filed
        with the Agency by July 15 of each year, in accordance
        with subsection (d) of Section 16-111.5 of the Public
        Utilities Act.
            (C) A utility shall be deemed to have complied with
        the clean coal portfolio standard specified in this
        subsection (d) if the utility enters into a sourcing
        agreement as required by this subsection (d).
        (2) For purposes of this subsection (d), the required
    execution of sourcing agreements with the initial clean
    coal facility for a particular year shall be measured as a
    percentage of the actual amount of electricity
    (megawatt-hours) supplied by the electric utility to
    eligible retail customers in the planning year ending
    immediately prior to the agreement's execution. For
    purposes of this subsection (d), the amount paid per
    kilowatthour means the total amount paid for electric
    service expressed on a per kilowatthour basis. For purposes
    of this subsection (d), the total amount paid for electric
    service includes without limitation amounts paid for
    supply, transmission, distribution, surcharges and add-on
    taxes.
        Notwithstanding the requirements of this subsection
    (d), the total amount paid under sourcing agreements with
    clean coal facilities pursuant to the procurement plan for
    any given year shall be reduced by an amount necessary to
    limit the annual estimated average net increase due to the
    costs of these resources included in the amounts paid by
    eligible retail customers in connection with electric
    service to:
                (A) in 2010, no more than 0.5% of the amount
            paid per kilowatthour by those customers during
            the year ending May 31, 2009;
                (B) in 2011, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2010 or 1%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009;
                (C) in 2012, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2011 or
            1.5% of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009;
                (D) in 2013, the greater of an additional 0.5%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2012 or 2%
            of the amount paid per kilowatthour by those
            customers during the year ending May 31, 2009; and
                (E) thereafter, the total amount paid under
            sourcing agreements with clean coal facilities
            pursuant to the procurement plan for any single
            year shall be reduced by an amount necessary to
            limit the estimated average net increase due to the
            cost of these resources included in the amounts
            paid by eligible retail customers in connection
            with electric service to no more than the greater
            of (i) 2.015% of the amount paid per kilowatthour
            by those customers during the year ending May 31,
            2009 or (ii) the incremental amount per
            kilowatthour paid for these resources in 2013.
            These requirements may be altered only as provided
            by statute. No later than June 30, 2015, the
            Commission shall review the limitation on the
            total amount paid under sourcing agreements, if
            any, with clean coal facilities pursuant to this
            subsection (d) and report to the General Assembly
            its findings as to whether that limitation unduly
            constrains the amount of electricity generated by
            cost-effective clean coal facilities that is
            covered by sourcing agreements.
        (3) Initial clean coal facility. In order to promote
    development of clean coal facilities in Illinois, each
    electric utility subject to this Section shall execute a
    sourcing agreement to source electricity from a proposed
    clean coal facility in Illinois (the "initial clean coal
    facility") that will have a nameplate capacity of at least
    500 MW when commercial operation commences, that has a
    final Clean Air Act permit on the effective date of this
    amendatory Act of the 95th General Assembly, and that will
    meet the definition of clean coal facility in Section 1-10
    of this Act when commercial operation commences. The
    sourcing agreements with this initial clean coal facility
    shall be subject to both approval of the initial clean coal
    facility by the General Assembly and satisfaction of the
    requirements of paragraph (4) of this subsection (d) and
    shall be executed within 90 days after any such approval by
    the General Assembly. The Agency and the Commission shall
    have authority to inspect all books and records associated
    with the initial clean coal facility during the term of
    such a sourcing agreement. A utility's sourcing agreement
    for electricity produced by the initial clean coal facility
    shall include:
            (A) a formula contractual price (the "contract
        price") approved pursuant to paragraph (4) of this
        subsection (d), which shall:
                (i) be determined using a cost of service
            methodology employing either a level or deferred
            capital recovery component, based on a capital
            structure consisting of 45% equity and 55% debt,
            and a return on equity as may be approved by the
            Federal Energy Regulatory Commission, which in any
            case may not exceed the lower of 11.5% or the rate
            of return approved by the General Assembly
            pursuant to paragraph (4) of this subsection (d);
            and
                (ii) provide that all miscellaneous net
            revenue, including but not limited to net revenue
            from the sale of emission allowances, if any,
            substitute natural gas, if any, grants or other
            support provided by the State of Illinois or the
            United States Government, firm transmission
            rights, if any, by-products produced by the
            facility, energy or capacity derived from the
            facility and not covered by a sourcing agreement
            pursuant to paragraph (3) of this subsection (d) or
            item (5) of subsection (d) of Section 16-115 of the
            Public Utilities Act, whether generated from the
            synthesis gas derived from coal, from SNG, or from
            natural gas, shall be credited against the revenue
            requirement for this initial clean coal facility;
            (B) power purchase provisions, which shall:
                (i) provide that the utility party to such
            sourcing agreement shall pay the contract price
            for electricity delivered under such sourcing
            agreement;
                (ii) require delivery of electricity to the
            regional transmission organization market of the
            utility that is party to such sourcing agreement;
                (iii) require the utility party to such
            sourcing agreement to buy from the initial clean
            coal facility in each hour an amount of energy
            equal to all clean coal energy made available from
            the initial clean coal facility during such hour
            times a fraction, the numerator of which is such
            utility's retail market sales of electricity
            (expressed in kilowatthours sold) in the State
            during the prior calendar month and the
            denominator of which is the total retail market
            sales of electricity (expressed in kilowatthours
            sold) in the State by utilities during such prior
            month and the sales of electricity (expressed in
            kilowatthours sold) in the State by alternative
            retail electric suppliers during such prior month
            that are subject to the requirements of this
            subsection (d) and paragraph (5) of subsection (d)
            of Section 16-115 of the Public Utilities Act,
            provided that the amount purchased by the utility
            in any year will be limited by paragraph (2) of
            this subsection (d); and
                (iv) be considered pre-existing contracts in
            such utility's procurement plans for eligible
            retail customers;
            (C) contract for differences provisions, which
        shall:
                (i) require the utility party to such sourcing
            agreement to contract with the initial clean coal
            facility in each hour with respect to an amount of
            energy equal to all clean coal energy made
            available from the initial clean coal facility
            during such hour times a fraction, the numerator of
            which is such utility's retail market sales of
            electricity (expressed in kilowatthours sold) in
            the utility's service territory in the State
            during the prior calendar month and the
            denominator of which is the total retail market
            sales of electricity (expressed in kilowatthours
            sold) in the State by utilities during such prior
            month and the sales of electricity (expressed in
            kilowatthours sold) in the State by alternative
            retail electric suppliers during such prior month
            that are subject to the requirements of this
            subsection (d) and paragraph (5) of subsection (d)
            of Section 16-115 of the Public Utilities Act,
            provided that the amount paid by the utility in any
            year will be limited by paragraph (2) of this
            subsection (d);
                (ii) provide that the utility's payment
            obligation in respect of the quantity of
            electricity determined pursuant to the preceding
            clause (i) shall be limited to an amount equal to
            (1) the difference between the contract price
            determined pursuant to subparagraph (A) of
            paragraph (3) of this subsection (d) and the
            day-ahead price for electricity delivered to the
            regional transmission organization market of the
            utility that is party to such sourcing agreement
            (or any successor delivery point at which such
            utility's supply obligations are financially
            settled on an hourly basis) (the "reference
            price") on the day preceding the day on which the
            electricity is delivered to the initial clean coal
            facility busbar, multiplied by (2) the quantity of
            electricity determined pursuant to the preceding
            clause (i); and
                (iii) not require the utility to take physical
            delivery of the electricity produced by the
            facility;
            (D) general provisions, which shall:
                (i) specify a term of no more than 30 years,
            commencing on the commercial operation date of the
            facility;
                (ii) provide that utilities shall maintain
            adequate records documenting purchases under the
            sourcing agreements entered into to comply with
            this subsection (d) and shall file an accounting
            with the load forecast that must be filed with the
            Agency by July 15 of each year, in accordance with
            subsection (d) of Section 16-111.5 of the Public
            Utilities Act.
                (iii) provide that all costs associated with
            the initial clean coal facility will be
            periodically reported to the Federal Energy
            Regulatory Commission and to purchasers in
            accordance with applicable laws governing
            cost-based wholesale power contracts;
                (iv) permit the Illinois Power Agency to
            assume ownership of the initial clean coal
            facility, without monetary consideration and
            otherwise on reasonable terms acceptable to the
            Agency, if the Agency so requests no less than 3
            years prior to the end of the stated contract term;
                (v) require the owner of the initial clean coal
            facility to provide documentation to the
            Commission each year, starting in the facility's
            first year of commercial operation, accurately
            reporting the quantity of carbon emissions from
            the facility that have been captured and
            sequestered and report any quantities of carbon
            released from the site or sites at which carbon
            emissions were sequestered in prior years, based
            on continuous monitoring of such sites. If, in any
            year after the first year of commercial operation,
            the owner of the facility fails to demonstrate that
            the initial clean coal facility captured and
            sequestered at least 50% of the total carbon
            emissions that the facility would otherwise emit
            or that sequestration of emissions from prior
            years has failed, resulting in the release of
            carbon dioxide into the atmosphere, the owner of
            the facility must offset excess emissions. Any
            such carbon offsets must be permanent, additional,
            verifiable, real, located within the State of
            Illinois, and legally and practicably enforceable.
            The cost of such offsets for the facility that are
            not recoverable shall not exceed $15 million in any
            given year. No costs of any such purchases of
            carbon offsets may be recovered from a utility or
            its customers. All carbon offsets purchased for
            this purpose and any carbon emission credits
            associated with sequestration of carbon from the
            facility must be permanently retired. The initial
            clean coal facility shall not forfeit its
            designation as a clean coal facility if the
            facility fails to fully comply with the applicable
            carbon sequestration requirements in any given
            year, provided the requisite offsets are
            purchased. However, the Attorney General, on
            behalf of the People of the State of Illinois, may
            specifically enforce the facility's sequestration
            requirement and the other terms of this contract
            provision. Compliance with the sequestration
            requirements and offset purchase requirements
            specified in paragraph (3) of this subsection (d)
            shall be reviewed annually by an independent
            expert retained by the owner of the initial clean
            coal facility, with the advance written approval
            of the Attorney General. The Commission may, in the
            course of the review specified in item (vii),
            reduce the allowable return on equity for the
            facility if the facility wilfully fails to comply
            with the carbon capture and sequestration
            requirements set forth in this item (v);
                (vi) include limits on, and accordingly
            provide for modification of, the amount the
            utility is required to source under the sourcing
            agreement consistent with paragraph (2) of this
            subsection (d);
                (vii) require Commission review: (1) to
            determine the justness, reasonableness, and
            prudence of the inputs to the formula referenced in
            subparagraphs (A)(i) through (A)(iii) of paragraph
            (3) of this subsection (d), prior to an adjustment
            in those inputs including, without limitation, the
            capital structure and return on equity, fuel
            costs, and other operations and maintenance costs
            and (2) to approve the costs to be passed through
            to customers under the sourcing agreement by which
            the utility satisfies its statutory obligations.
            Commission review shall occur no less than every 3
            years, regardless of whether any adjustments have
            been proposed, and shall be completed within 9
            months;
                (viii) limit the utility's obligation to such
            amount as the utility is allowed to recover through
            tariffs filed with the Commission, provided that
            neither the clean coal facility nor the utility
            waives any right to assert federal pre-emption or
            any other argument in response to a purported
            disallowance of recovery costs;
                (ix) limit the utility's or alternative retail
            electric supplier's obligation to incur any
            liability until such time as the facility is in
            commercial operation and generating power and
            energy and such power and energy is being delivered
            to the facility busbar;
                (x) provide that the owner or owners of the
            initial clean coal facility, which is the
            counterparty to such sourcing agreement, shall
            have the right from time to time to elect whether
            the obligations of the utility party thereto shall
            be governed by the power purchase provisions or the
            contract for differences provisions;
                (xi) append documentation showing that the
            formula rate and contract, insofar as they relate
            to the power purchase provisions, have been
            approved by the Federal Energy Regulatory
            Commission pursuant to Section 205 of the Federal
            Power Act;
                (xii) provide that any changes to the terms of
            the contract, insofar as such changes relate to the
            power purchase provisions, are subject to review
            under the public interest standard applied by the
            Federal Energy Regulatory Commission pursuant to
            Sections 205 and 206 of the Federal Power Act; and
                (xiii) conform with customary lender
            requirements in power purchase agreements used as
            the basis for financing non-utility generators.
        (4) Effective date of sourcing agreements with the
    initial clean coal facility. Any proposed sourcing
    agreement with the initial clean coal facility shall not
    become effective unless the following reports are prepared
    and submitted and authorizations and approvals obtained:
                (i) Facility cost report. The owner of the
            initial clean coal facility shall submit to the
            Commission, the Agency, and the General Assembly a
            front-end engineering and design study, a facility
            cost report, method of financing (including but
            not limited to structure and associated costs),
            and an operating and maintenance cost quote for the
            facility (collectively "facility cost report"),
            which shall be prepared in accordance with the
            requirements of this paragraph (4) of subsection
            (d) of this Section, and shall provide the
            Commission and the Agency access to the work
            papers, relied upon documents, and any other
            backup documentation related to the facility cost
            report.
                (ii) Commission report. Within 6 months
            following receipt of the facility cost report, the
            Commission, in consultation with the Agency, shall
            submit a report to the General Assembly setting
            forth its analysis of the facility cost report.
            Such report shall include, but not be limited to, a
            comparison of the costs associated with
            electricity generated by the initial clean coal
            facility to the costs associated with electricity
            generated by other types of generation facilities,
            an analysis of the rate impacts on residential and
            small business customers over the life of the
            sourcing agreements, and an analysis of the
            likelihood that the initial clean coal facility
            will commence commercial operation by and be
            delivering power to the facility's busbar by 2016.
            To assist in the preparation of its report, the
            Commission, in consultation with the Agency, may
            hire one or more experts or consultants, the costs
            of which shall be paid for by the owner of the
            initial clean coal facility. The Commission and
            Agency may begin the process of selecting such
            experts or consultants prior to receipt of the
            facility cost report.
                (iii) General Assembly approval. The proposed
            sourcing agreements shall not take effect unless,
            based on the facility cost report and the
            Commission's report, the General Assembly enacts
            authorizing legislation approving (A) the
            projected price, stated in cents per kilowatthour,
            to be charged for electricity generated by the
            initial clean coal facility, (B) the projected
            impact on residential and small business
            customers' bills over the life of the sourcing
            agreements, and (C) the maximum allowable return
            on equity for the project; and
                (iv) Commission review. If the General
            Assembly enacts authorizing legislation pursuant
            to subparagraph (iii) approving a sourcing
            agreement, the Commission shall, within 90 days of
            such enactment, complete a review of such sourcing
            agreement. During such time period, the Commission
            shall implement any directive of the General
            Assembly, resolve any disputes between the parties
            to the sourcing agreement concerning the terms of
            such agreement, approve the form of such
            agreement, and issue an order finding that the
            sourcing agreement is prudent and reasonable.
    The facility cost report shall be prepared as follows:
            (A) The facility cost report shall be prepared by
        duly licensed engineering and construction firms
        detailing the estimated capital costs payable to one or
        more contractors or suppliers for the engineering,
        procurement and construction of the components
        comprising the initial clean coal facility and the
        estimated costs of operation and maintenance of the
        facility. The facility cost report shall include:
                (i) an estimate of the capital cost of the core
            plant based on one or more front end engineering
            and design studies for the gasification island and
            related facilities. The core plant shall include
            all civil, structural, mechanical, electrical,
            control, and safety systems.
                (ii) an estimate of the capital cost of the
            balance of the plant, including any capital costs
            associated with sequestration of carbon dioxide
            emissions and all interconnects and interfaces
            required to operate the facility, such as
            transmission of electricity, 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 quoted construction costs shall be expressed
        in nominal dollars as of the date that the quote is
        prepared and shall include (1) capitalized financing
        costs during construction, (2) taxes, insurance, and
        other owner's costs, and (3) an assumed escalation in
        materials and labor beyond the date as of which the
        construction cost quote is expressed.
            (B) The front end engineering and design study for
        the gasification island and the cost study for the
        balance of 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 clean coal facility.
            (C) The facility cost report shall also include 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
        operations and maintenance costs.
                (a) The delivered fuel cost estimate will 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 will be developed based on the inputs
            provided by duly licensed engineering and
            construction firms 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
            (including the cost of the front end engineering
            and design study) shall be expressed in nominal
            dollars as of the date that the quote is prepared
            and shall include (1) taxes, insurance, and other
            owner's costs, and (2) an assumed escalation in
            materials and labor beyond the date as of which the
            operating and maintenance cost quote is expressed.
            (D) The facility cost report shall also include (i)
        an analysis of the initial clean coal facility's
        ability to deliver power and energy into the applicable
        regional transmission organization markets and (ii) an
        analysis of the expected capacity factor for the
        initial clean coal facility.
            (E) Amounts paid to third parties unrelated to the
        owner or owners of the initial clean coal facility to
        prepare the core plant construction cost quote,
        including the front end engineering and design study,
        and the operating and maintenance cost quote will be
        reimbursed through Coal Development Bonds.
        (5) Re-powering and retrofitting coal-fired power
    plants previously owned by Illinois utilities to qualify as
    clean coal facilities. During the 2009 procurement
    planning process and thereafter, the Agency and the
    Commission shall consider sourcing agreements covering
    electricity generated by power plants that were previously
    owned by Illinois utilities and that have been or will be
    converted into clean coal facilities, as defined by Section
    1-10 of this Act. Pursuant to such procurement planning
    process, the owners of such facilities may propose to the
    Agency sourcing agreements with utilities and alternative
    retail electric suppliers required to comply with
    subsection (d) of this Section and item (5) of subsection
    (d) of Section 16-115 of the Public Utilities Act, covering
    electricity generated by such facilities. In the case of
    sourcing agreements that are power purchase agreements,
    the contract price for electricity sales shall be
    established on a cost of service basis. In the case of
    sourcing agreements that are contracts for differences,
    the contract price from which the reference price is
    subtracted shall be established on a cost of service basis.
    The Agency and the Commission may approve any such utility
    sourcing agreements that do not exceed cost-based
    benchmarks developed by the procurement administrator, in
    consultation with the Commission staff, Agency staff and
    the procurement monitor, subject to Commission review and
    approval. The Commission shall have authority to inspect
    all books and records associated with these clean coal
    facilities during the term of any such contract.
        (6) Costs incurred under this subsection (d) or
    pursuant to a contract entered into under this subsection
    (d) 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.
        (e) The draft procurement plans are subject to public
    comment, as required by Section 16-111.5 of the Public
    Utilities Act.
        (f) The Agency shall submit the final procurement plan
    to the Commission. The Agency shall revise a procurement
    plan if the Commission determines that it does not meet the
    standards set forth in Section 16-111.5 of the Public
    Utilities Act.
        (g) The Agency shall assess fees to each affected
    utility to recover the costs incurred in preparation of the
    annual procurement plan for the utility.
        (h) The Agency shall assess fees to each bidder to
    recover the costs incurred in connection with a competitive
    procurement process.
(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09;
96-159, eff. 8-10-09; 96-1437, eff. 8-17-10.)
 
    (20 ILCS 3855/1-125)
    Sec. 1-125. Agency annual reports. By December 1, 2011 and
each December 1 thereafter, the The Agency shall report
annually to the Governor and the General Assembly on the
operations and transactions of the Agency. The annual report
shall include, but not be limited to, each of the following:
        (1) The quantity, price, and term of all contracts for
    electricity procured under the procurement plans for
    electric utilities.
        (2) The quantity, price, and rate impact of all
    renewable resources purchased under the electricity
    procurement plans for electric utilities.
        (3) The quantity, price, and rate impact of all energy
    efficiency and demand response measures purchased for
    electric utilities.
        (4) The amount of power and energy produced by each
    Agency facility.
        (5) The quantity of electricity supplied by each Agency
    facility to municipal electric systems, governmental
    aggregators, or rural electric cooperatives in Illinois.
        (6) The revenues as allocated by the Agency to each
    facility.
        (7) The costs as allocated by the Agency to each
    facility.
        (8) The accumulated depreciation for each facility.
        (9) The status of any projects under development.
        (10) Basic financial and operating information
    specifically detailed for the reporting year and
    including, but not limited to, income and expense
    statements, balance sheets, and changes in financial
    position, all in accordance with generally accepted
    accounting principles, debt structure, and a summary of
    funds on a cash basis.
        (11) The quantity, price, and rate impact of all
    renewable resources purchased pursuant to long-term
    contracts under the electricity procurement plans for
    electric utilities.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    Section 10. The Public Utilities Act is amended by changing
Section 16-115D as follows:
 
    (220 ILCS 5/16-115D)
    Sec. 16-115D. Renewable portfolio standard for alternative
retail electric suppliers and electric utilities operating
outside their service territories.
    (a) An alternative retail electric supplier shall be
responsible for procuring cost-effective renewable energy
resources as required under item (5) of subsection (d) of
Section 16-115 of this Act as outlined herein:
        (1) The definition of renewable energy resources
    contained in Section 1-10 of the Illinois Power Agency Act
    applies to all renewable energy resources required to be
    procured by alternative retail electric suppliers.
        (2) The quantity of renewable energy resources shall be
    measured as a percentage of the actual amount of metered
    electricity (megawatt-hours) delivered by the alternative
    retail electric supplier to Illinois retail customers
    during the 12-month period June 1 through May 31,
    commencing June 1, 2009, and the comparable 12-month period
    in each year thereafter except as provided in item (6) of
    this subsection (a).
        (3) The quantity of renewable energy resources shall be
    in amounts at least equal to the annual percentages set
    forth in item (1) of subsection (c) of Section 1-75 of the
    Illinois Power Agency Act. At least 60% of the renewable
    energy resources procured pursuant to items (1) through (3)
    of subsection (b) of this Section shall come from wind
    generation and, starting June 1, 2015, at least 6% of the
    renewable energy resources procured pursuant to items (1)
    through (3) of subsection (b) of this Section shall come
    from solar photovoltaics. If, in any given year, an
    alternative retail electric supplier does not purchase at
    least these levels of renewable energy resources, then the
    alternative retail electric supplier shall make
    alternative compliance payments, as described in
    subsection (d) of this Section.
        (4) The quantity and source of renewable energy
    resources shall be independently verified through the PJM
    Environmental Information System Generation Attribute
    Tracking System (PJM-GATS) or the Midwest Renewable Energy
    Tracking System (M-RETS), which shall document the
    location of generation, resource type, month, and year of
    generation for all qualifying renewable energy resources
    that an alternative retail electric supplier uses to comply
    with this Section. No later than June 1, 2009, the Illinois
    Power Agency shall provide PJM-GATS, M-RETS, and
    alternative retail electric suppliers with all information
    necessary to identify resources located in Illinois,
    within states that adjoin Illinois or within portions of
    the PJM and MISO footprint in the United States that
    qualify under the definition of renewable energy resources
    in Section 1-10 of the Illinois Power Agency Act for
    compliance with this Section 16-115D. Alternative retail
    electric suppliers shall not be subject to the requirements
    in item (3) of subsection (c) of Section 1-75 of the
    Illinois Power Agency Act.
        (5) All renewable energy credits used to comply with
    this Section shall be permanently retired.
        (6) The required procurement of renewable energy
    resources by an alternative retail electric supplier shall
    apply to all metered electricity delivered to Illinois
    retail customers by the alternative retail electric
    supplier pursuant to contracts executed or extended after
    March 15, 2009.
    (b) An alternative retail electric supplier shall comply
with the renewable energy portfolio standards by making an
alternative compliance payment, as described in subsection (d)
of this Section, to cover at least one-half of the alternative
retail electric supplier's compliance obligation and any one or
combination of the following means to cover the remainder of
the alternative retail electric supplier's compliance
obligation:
        (1) Generating electricity using renewable energy
    resources identified pursuant to item (4) of subsection (a)
    of this Section.
        (2) Purchasing electricity generated using renewable
    energy resources identified pursuant to item (4) of
    subsection (a) of this Section through an energy contract.
        (3) Purchasing renewable energy credits from renewable
    energy resources identified pursuant to item (4) of
    subsection (a) of this Section.
        (4) Making an alternative compliance payment as
    described in subsection (d) of this Section.
    (c) Use of renewable energy credits.
        (1) Renewable energy credits that are not used by an
    alternative retail electric supplier to comply with a
    renewable portfolio standard in a compliance year may be
    banked and carried forward up to 2 12-month compliance
    periods after the compliance period in which the credit was
    generated for the purpose of complying with a renewable
    portfolio standard in those 2 subsequent compliance
    periods. For the 2009-2010 and 2010-2011 compliance
    periods, an alternative retail electric supplier may use
    renewable credits generated after December 31, 2008 and
    before June 1, 2009 to comply with this Section.
        (2) An alternative retail electric supplier is
    responsible for demonstrating that a renewable energy
    credit used to comply with a renewable portfolio standard
    is derived from a renewable energy resource and that the
    alternative retail electric supplier has not used, traded,
    sold, or otherwise transferred the credit.
        (3) The same renewable energy credit may be used by an
    alternative retail electric supplier to comply with a
    federal renewable portfolio standard and a renewable
    portfolio standard established under this Act. An
    alternative retail electric supplier that uses a renewable
    energy credit to comply with a renewable portfolio standard
    imposed by any other state may not use the same credit to
    comply with a renewable portfolio standard established
    under this Act.
    (d) Alternative compliance payments.
        (1) The Commission shall establish and post on its
    website, within 5 business days after entering an order
    approving a procurement plan pursuant to Section 1-75 of
    the Illinois Power Agency Act, maximum alternative
    compliance payment rates, expressed on a per kilowatt-hour
    basis, that will be applicable in the first compliance
    period following the plan approval. A separate maximum
    alternative compliance payment rate shall be established
    for the service territory of each electric utility that is
    subject to subsection (c) of Section 1-75 of the Illinois
    Power Agency Act. Each maximum alternative compliance
    payment rate shall be equal to the maximum allowable annual
    estimated average net increase due to the costs of the
    utility's purchase of renewable energy resources included
    in the amounts paid by eligible retail customers in
    connection with electric service, as described in item (2)
    of subsection (c) of Section 1-75 of the Illinois Power
    Agency Act for the compliance period, and as established in
    the approved procurement plan. Following each procurement
    event through which renewable energy resources are
    purchased for one or more of these utilities for the
    compliance period, the Commission shall establish and post
    on its website estimates of the alternative compliance
    payment rates, expressed on a per kilowatt-hour basis, that
    shall apply for that compliance period. Posting of the
    estimates shall occur no later than 10 business days
    following the procurement event, however, the Commission
    shall not be required to establish and post such estimates
    more often than once per calendar month. By July 1 of each
    year, the Commission shall establish and post on its
    website the actual alternative compliance payment rates
    for the preceding compliance year. For compliance years
    beginning prior to June 1, 2014, each alternative
    compliance payment rate shall be equal to the total amount
    of dollars that the utility contracted to spend on
    renewable resources, excepting the additional incremental
    cost attributable to solar resources, for the compliance
    period divided by the forecasted load of eligible retail
    customers, at the customers' meters, as previously
    established in the Commission-approved procurement plan
    for that compliance year. For compliance years commencing
    on or after June 1, 2014, each alternative compliance
    payment rate shall be equal to the total amount of dollars
    that the utility contracted to spend on all renewable
    resources for the compliance period divided by the
    forecasted load of eligible retail customers, at the
    customers' meters, as previously established in the
    Commission-approved procurement plan for that compliance
    year. The actual alternative compliance payment rates may
    not exceed the maximum alternative compliance payment
    rates established for the compliance period. For purposes
    of this subsection (d), the term "eligible retail
    customers" has the same meaning as found in Section
    16-111.5 of this Act.
        (2) In any given compliance year, an alternative retail
    electric supplier may elect to use alternative compliance
    payments to comply with all or a part of the applicable
    renewable portfolio standard. In the event that an
    alternative retail electric supplier elects to make
    alternative compliance payments to comply with all or a
    part of the applicable renewable portfolio standard, such
    payments shall be made by September 1, 2010 for the period
    of June 1, 2009 to May 1, 2010 and by September 1 of each
    year thereafter for the subsequent compliance period, in
    the manner and form as determined by the Commission. Any
    election by an alternative retail electric supplier to use
    alternative compliance payments is subject to review by the
    Commission under subsection (e) of this Section.
        (3) An alternative retail electric supplier's
    alternative compliance payments shall be computed
    separately for each electric utility's service territory
    within which the alternative retail electric supplier
    provided retail service during the compliance period,
    provided that the electric utility was subject to
    subsection (c) of Section 1-75 of the Illinois Power Agency
    Act. For each service territory, the alternative retail
    electric supplier's alternative compliance payment shall
    be equal to (i) the actual alternative compliance payment
    rate established in item (1) of this subsection (d),
    multiplied by (ii) the actual amount of metered electricity
    delivered by the alternative retail electric supplier to
    retail customers within the service territory during the
    compliance period, multiplied by (iii) the result of one
    minus the ratios of the quantity of renewable energy
    resources used by the alternative retail electric supplier
    to comply with the requirements of this Section within the
    service territory to the product of the percentage of
    renewable energy resources required under item (3) of
    subsection (a) of this Section and the actual amount of
    metered electricity delivered by the alternative retail
    electric supplier to retail customers within the service
    territory during the compliance period.
        (4) All alternative compliance payments by alternative
    retail electric suppliers shall be deposited in the
    Illinois Power Agency Renewable Energy Resources Fund and
    used to purchase renewable energy credits, in accordance
    with Section 1-56 of the Illinois Power Agency Act.
    Beginning April 1, 2012 and by April 1 of each year
    thereafter, the Illinois Power Agency shall submit an
    annual report to the General Assembly, the Commission, and
    alternative retail electric suppliers that shall include,
    but not be limited to:
            (A) the total amount of alternative compliance
        payments received in aggregate from alternative retail
        electric suppliers by planning year for all previous
        planning years in which the alternative compliance
        payment was in effect;
            (B) the amount of those payments utilized to
        purchased renewable energy credits itemized by the
        date of each procurement in which the payments were
        utilized; and
            (C) the unused and remaining balance in the Agency
        Renewable Energy Resources Fund attributable to those
        payments.
        (5) The Commission, in consultation with the Illinois
    Power Agency, shall establish a process or proceeding to
    consider the impact of a federal renewable portfolio
    standard, if enacted, on the operation of the alternative
    compliance mechanism, which shall include, but not be
    limited to, developing, to the extent permitted by the
    applicable federal statute, an appropriate methodology to
    apportion renewable energy credits retired as a result of
    alternative compliance payments made in accordance with
    this Section. The Commission shall commence any such
    process or proceeding within 35 days after enactment of a
    federal renewable portfolio standard.
    (e) Each alternative retail electric supplier shall, by
September 1, 2010 and by September 1 of each year thereafter,
prepare and submit to the Commission a report, in a format to
be specified by the Commission on or before December 31, 2009,
that provides information certifying compliance by the
alternative retail electric supplier with this Section,
including copies of all PJM-GATS and M-RETS reports, and
documentation relating to banking, retiring renewable energy
credits, and any other information that the Commission
determines necessary to ensure compliance with this Section. An
alternative retail electric supplier may file commercially or
financially sensitive information or trade secrets with the
Commission as provided under the rules of the Commission. To be
filed confidentially, the information shall be accompanied by
an affidavit that sets forth both the reasons for the
confidentiality and a public synopsis of the information.
    (f) The Commission may initiate a contested case to review
allegations that the alternative retail electric supplier has
violated this Section, including an order issued or rule
promulgated under this Section. In any such proceeding, the
alternative retail electric supplier shall have the burden of
proof. If the Commission finds, after notice and hearing, that
an alternative retail electric supplier has violated this
Section, then the Commission shall issue an order requiring the
alternative retail electric supplier to:
        (1) immediately comply with this Section; and
        (2) if the violation involves a failure to procure the
    requisite quantity of renewable energy resources or pay the
    applicable alternative compliance payment by the annual
    deadline, the Commission shall require the alternative
    retail electric supplier to double the applicable
    alternative compliance payment that would otherwise be
    required to bring the alternative retail electric supplier
    into compliance with this Section.
    If an alternative retail electric supplier fails to comply
with the renewable energy resource portfolio requirement in
this Section more than once in a 5-year period, then the
Commission shall revoke the alternative electric supplier's
certificate of service authority. The Commission shall not
accept an application for a certificate of service authority
from an alternative retail electric supplier that has lost
certification under this subsection (f), or any corporate
affiliate thereof, for at least one year after the date of
revocation.
    (g) All of the provisions of this Section apply to electric
utilities operating outside their service area except under
item (2) of subsection (a) of this Section the quantity of
renewable energy resources shall be measured as a percentage of
the actual amount of electricity (megawatt-hours) supplied in
the State outside of the utility's service territory during the
12-month period June 1 through May 31, commencing June 1, 2009,
and the comparable 12-month period in each year thereafter
except as provided in item (6) of subsection (a) of this
Section.
    If any such utility fails to procure the requisite quantity
of renewable energy resources by the annual deadline, then the
Commission shall require the utility to double the alternative
compliance payment that would otherwise be required to bring
the utility into compliance with this Section.
    If any such utility fails to comply with the renewable
energy resource portfolio requirement in this Section more than
once in a 5-year period, then the Commission shall order the
utility to cease all sales outside of the utility's service
territory for a period of at least one year.
    (h) The provisions of this Section and the provisions of
subsection (d) of Section 16-115 of this Act relating to
procurement of renewable energy resources shall not apply to an
alternative retail electric supplier that operates a combined
heat and power system in this State or that has a corporate
affiliate that operates such a combined heat and power system
in this State that supplies electricity primarily to or for the
benefit of: (i) facilities owned by the supplier, its
subsidiary, or other corporate affiliate; (ii) facilities
electrically integrated with the electrical system of
facilities owned by the supplier, its subsidiary, or other
corporate affiliate; or (iii) facilities that are adjacent to
the site on which the combined heat and power system is
located.
(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
96-1437, eff. 8-17-10.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.