103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1666

 

Introduced 2/8/2023, by Sen. Robert Peters

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3855/1-83 new
220 ILCS 5/3-101  from Ch. 111 2/3, par. 3-101
220 ILCS 5/3-105  from Ch. 111 2/3, par. 3-105
220 ILCS 5/3-127 new
220 ILCS 5/3-128 new
220 ILCS 5/8-513 new

    Provides that the amendatory Act may be referred to as the Thermal Energy Network and Jobs Acts. Sets forth a statement of legislative findings and intent. Amends the Public Utilities Act. Defines "thermal energy" and "thermal energy network". Provides that the Illinois Commerce Commission shall initiate a proceeding within 3 months after the effective date of the amendatory Act to support the development of thermal energy networks. Specifies the matters the Commission shall consider in such proceeding. Provides that the Commission shall adopt rules within 2 years after the effective date of the amendatory Act to do specified tasks. Provides for procedures for submittal of proposed pilot thermal energy network projects with the Commission. Provides that each gas, electric, or combination gas and utility corporation shall report to the Commission, on a quarterly basis and until completion of the pilot thermal energy network project, the status of each project. Provides that any thermal energy network created shall demonstrate that the gas, electric, or combination gas and electric corporation has entered into a labor peace agreement with a bona fide labor organization of jurisdiction that is actively engaged in representing gas and electric corporation employees. Makes corresponding changes to the Act and the Illinois Power Agency Act. Effective immediately.


LRB103 26363 AMQ 52725 b

 

 

A BILL FOR

 

SB1666LRB103 26363 AMQ 52725 b

1    AN ACT concerning utilities.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be referred to as the
5Thermal Energy Network and Jobs Act.
 
6    Section 5. Legislative findings and intent.
7    (a) The General Assembly finds and declares that:
8        (1) This State has a strong interest in ensuring that
9    building emissions are kept at a minimum. Buildings are
10    one of this State's largest sources of greenhouse gases
11    and other climate emissions due to the combustion of
12    fossil fuels for heating, domestic hot water, cooking, and
13    other end uses.
14        (2) The decarbonization of buildings must be pursued
15    in a manner that is affordable, accessible, preserves and
16    creates living-wage jobs, and retains the knowledge and
17    experience of the existing utility union workforce.
18        (3) Thermal energy networks have the potential to
19    decarbonize buildings at the community and utility scale.
20        (4) Thermal energy networks consist of pipe loops
21    between multiple buildings and energy sources carrying
22    water at ambient temperature. Building owners can connect
23    to the ambient temperature loops with water heating and

 

 

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1    cooling and hot water services.
2        (5) Many utilities in this State have been seeking to
3    develop thermal energy networks, but legal and regulatory
4    barriers and the current, and outdated, Public Utilities
5    Act framework have prevented them from moving these
6    proposals forward.
7        (6) This State has a strong interest in ensuring an
8    adequate supply of reliable electrical power and,
9    therefore, needs to promote the development of alternative
10    power sources and take steps to assure reliable
11    deliverability. Thermal energy networks are highly
12    efficient because they utilize and exchange thermal energy
13    from many underground sources and buildings, including
14    recycled thermal energy, which minimizes impact on the
15    electricity grid.
16        (7) Access to thermal energy networks has the
17    potential to reduce the up-front and operating costs of
18    building electrification for customers.
19        (8) A utility's access to capital, the utility's
20    experience with networked infrastructure in public
21    rights-of-way, and the requirement that the utility serve
22    all customers positions the utility well to develop and
23    scale thermal energy networks that are accessible to all
24    customers and to coordinate the development of thermal
25    energy networks with any downsizing of the utility gas
26    system.

 

 

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1        (9) This State also has a proprietary interest in the
2    efficient and reliable delivery of energy and the energy
3    infrastructure of the State, which interest is
4    acknowledged throughout the Public Utilities Act. Utility
5    corporations and other power suppliers share these
6    interests and, moreover, have a duty to protect
7    proprietary interests in the projects they fund. Such
8    investments of ratepayer resources can be protected by
9    establishing effective contractor qualification and
10    performance standards, including requirements for
11    prevailing wage rates, bona fide apprenticeship criteria,
12    and project labor agreements.
13        (10) The construction industry is highly skilled and
14    labor intensive, and the installation of modern thermal
15    energy networks involves particularly complex work.
16    Therefore, effective qualification standards for craft
17    labor personnel employed on these projects are critically
18    needed to promote successful project delivery.
19        (11) Finally, these findings are especially vital now
20    because the construction industry is experiencing
21    widespread skill shortages across the country, which are
22    crippling existing capital projects and threatening
23    projects planned for the future. The construction of
24    thermal energy networks will utilize many of the same
25    skills that the current utility and building trades
26    workforces already possess.

 

 

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1    (b) It is the intent of the General Assembly that passage
2of this Act is for the following purposes:
3        (1) to remove the legal barriers to utility
4    development of thermal energy networks and require the
5    Illinois Commerce Commission to authorize and direct
6    utilities to immediately commence piloting thermal energy
7    networks in each and every utility territory;
8        (2) to direct and authorize the Illinois Commerce
9    Commission to develop a regulatory structure for utility
10    thermal energy networks that scales affordable and
11    accessible building electrification, protects customers,
12    and balances the role of incumbent monopoly utilities with
13    other market and public actors;
14        (3) to promote the successful planning and delivery of
15    thermal energy networks and protect critical investments
16    in such projects by requiring the use of appropriate
17    quality craft labor policies that ensure the development
18    of and access to an adequate supply of well trained,
19    highly skilled craft persons needed to support timely,
20    reliable, high-quality projects;
21        (4) to promote strong economic development and good
22    jobs for local residents in the expanding decarbonized
23    sector by requiring application of progressive State labor
24    and employment policies that ensure public utility
25    investments and related State subsidies create
26    unparalleled skill training and employment opportunities

 

 

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1    for residents in project areas through the use of local
2    prevailing wage standards and successful, bona fide
3    apprenticeship programs or project labor agreements that
4    incorporate prevailing wage and training standards and
5    provide additional benefits for project owners and
6    workers; and
7        (5) to promote the use of preapprenticeship programs
8    that will fortify and expand existing apprenticeship
9    programs through systematic outreach efforts to recruit
10    and assist persons from underrepresented and low income
11    communities by providing such persons with remedial
12    education, social services, and unique opportunities for
13    direct access into high-quality apprenticeship programs
14    and gainful employment in the growing building
15    decarbonization workforce.
 
16    Section 10. The Illinois Power Agency Act is amended by
17adding Section 1-83 as follows:
 
18    (20 ILCS 3855/1-83 new)
19    Sec. 1-83. Pilot thermal energy network projects. No later
20than 3 months after the effective date of this amendatory Act
21of the 103rd General Assembly, the Resource Development
22Bureau, the Agency, and the Agency's service provider shall
23submit for review to the Commission at least one and as many as
245 proposed pilot thermal energy network projects as described

 

 

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1in Section 8-513 of the Public Utilities Act. No later than 6
2months after the effective date of this amendatory Act of the
3103rd General Assembly, and upon recommendation by the Agency,
4the Commission shall determine whether it is in the public
5interest to approve or modify such pilot thermal energy
6network projects and shall direct the service provider to
7implement such proposed or modified pilot thermal energy
8network projects. The Commission shall adopt rules consistent
9with the standards set forth in subsections (b) and (c) of
10Section 8-513 of the Public Utilities Act.
 
11    Section 905. The Public Utilities Act is amended by
12changing Sections 3-101 and 3-105 and by adding Sections
133-127, 3-128, and 8-513 as follows:
 
14    (220 ILCS 5/3-101)  (from Ch. 111 2/3, par. 3-101)
15    Sec. 3-101. Definitions. Unless otherwise specified, the
16terms set forth in Sections 3-102 through 3-128 3-126 are used
17in this Act as therein defined.
18(Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11;
1997-813, eff. 7-13-12.)
 
20    (220 ILCS 5/3-105)  (from Ch. 111 2/3, par. 3-105)
21    Sec. 3-105. Public utility.
22    (a) "Public utility" means and includes, except where
23otherwise expressly provided in this Section, every

 

 

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1corporation, company, limited liability company, association,
2joint stock company or association, firm, partnership or
3individual, their lessees, trustees, or receivers appointed by
4any court whatsoever that owns, controls, operates or manages,
5within this State, directly or indirectly, for public use, any
6plant, equipment or property used or to be used for or in
7connection with, or owns or controls any franchise, license,
8permit, or right to engage in:
9        (1) the production, storage, transmission, sale,
10    delivery, or furnishing of heat, cold, power, electricity,
11    water, or light, except when used solely for
12    communications purposes;
13        (2) the disposal of sewerage; or
14        (3) the conveyance of oil or gas by pipe line; or .
15        (4) a thermal energy network.
16    (b) "Public utility" does not include, however:
17        (1) public utilities that are owned and operated by
18    any political subdivision, public institution of higher
19    education or municipal corporation of this State, or
20    public utilities that are owned by such political
21    subdivision, public institution of higher education, or
22    municipal corporation and operated by any of its lessees
23    or operating agents;
24        (2) water companies which are purely mutual concerns,
25    having no rates or charges for services, but paying the
26    operating expenses by assessment upon the members of such

 

 

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1    a company and no other person;
2        (3) electric cooperatives as defined in Section 3-119;
3        (4) the following natural gas cooperatives:
4            (A) residential natural gas cooperatives that are
5        not-for-profit corporations established for the
6        purpose of administering and operating, on a
7        cooperative basis, the furnishing of natural gas to
8        residences for the benefit of their members who are
9        residential consumers of natural gas. For entities
10        qualifying as residential natural gas cooperatives and
11        recognized by the Illinois Commerce Commission as
12        such, the State shall guarantee legally binding
13        contracts entered into by residential natural gas
14        cooperatives for the express purpose of acquiring
15        natural gas supplies for their members. The Illinois
16        Commerce Commission shall establish rules and
17        regulations providing for such guarantees. The total
18        liability of the State in providing all such
19        guarantees shall not at any time exceed $1,000,000,
20        nor shall the State provide such a guarantee to a
21        residential natural gas cooperative for more than 3
22        consecutive years; and
23            (B) natural gas cooperatives that are
24        not-for-profit corporations operated for the purpose
25        of administering, on a cooperative basis, the
26        furnishing of natural gas for the benefit of their

 

 

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1        members and that, prior to 90 days after the effective
2        date of this amendatory Act of the 94th General
3        Assembly, either had acquired or had entered into an
4        asset purchase agreement to acquire all or
5        substantially all of the operating assets of a public
6        utility or natural gas cooperative with the intention
7        of operating those assets as a natural gas
8        cooperative;
9        (5) sewage disposal companies which provide sewage
10    disposal services on a mutual basis without establishing
11    rates or charges for services, but paying the operating
12    expenses by assessment upon the members of the company and
13    no others;
14        (6) (blank);
15        (7) cogeneration facilities, small power production
16    facilities, and other qualifying facilities, as defined in
17    the Public Utility Regulatory Policies Act and regulations
18    promulgated thereunder, except to the extent State
19    regulatory jurisdiction and action is required or
20    authorized by federal law, regulations, regulatory
21    decisions or the decisions of federal or State courts of
22    competent jurisdiction;
23        (8) the ownership or operation of a facility that
24    sells compressed natural gas at retail to the public for
25    use only as a motor vehicle fuel and the selling of
26    compressed natural gas at retail to the public for use

 

 

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1    only as a motor vehicle fuel;
2        (9) alternative retail electric suppliers as defined
3    in Article XVI; and
4        (10) the Illinois Power Agency.
5    (c) An entity that furnishes the service of charging
6electric vehicles does not and shall not be deemed to sell
7electricity and is not and shall not be deemed a public utility
8notwithstanding the basis on which the service is provided or
9billed. If, however, the entity is otherwise deemed a public
10utility under this Act, or is otherwise subject to regulation
11under this Act, then that entity is not exempt from and remains
12subject to the otherwise applicable provisions of this Act.
13The installation, maintenance, and repair of an electric
14vehicle charging station shall comply with the requirements of
15subsection (a) of Section 16-128 and Section 16-128A of this
16Act.
17    For purposes of this subsection, the term "electric
18vehicles" has the meaning ascribed to that term in Section 10
19of the Electric Vehicle Act.
20(Source: P.A. 97-1128, eff. 8-28-12.)
 
21    (220 ILCS 5/3-127 new)
22    Sec. 3-127. Thermal energy. "Thermal energy" means piped
23noncombustible fluids used for transferring heat into and out
24of buildings for the purpose of eliminating any resultant
25onsite greenhouse gas emissions of all types of heating and

 

 

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1cooling processes, including, but not limited to, comfort
2heating and cooling, domestic hot water, and refrigeration.
 
3    (220 ILCS 5/3-128 new)
4    Sec. 3-128. Thermal energy network. "Thermal energy
5network" means all real estate, fixtures, and personal
6property operated, owned, used, or to be used for, in
7connection with, or to facilitate a utility-scale distribution
8infrastructure project that supplies thermal energy.
 
9    (220 ILCS 5/8-513 new)
10    Sec. 8-513. Thermal energy network development.
11    (a) The Illinois Commerce Commission shall initiate a
12proceeding within 3 months of the effective date after this
13amendatory Act of the 103rd General Assembly to support the
14development of thermal energy networks. The matters the
15Commission shall consider in such proceeding shall include,
16but is not limited to, the appropriate ownership, market, and
17rate structures for thermal energy networks and whether the
18provision of thermal energy services by gas or electric
19utilities is in the public interest.
20    (b) The Commission shall adopt rules within 2 years after
21the effective date of this amendatory Act of the 103rd General
22Assembly to:
23        (1) create fair market access rules for utility-owned
24    thermal energy networks to accept thermal energy that

 

 

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1    aligns with the Illinois Power Agency Act and that does
2    not increase greenhouse gas emissions or copollutants;
3        (2) exempt small-scale thermal energy networks not
4    owned by utilities from regulation by the Commission;
5        (3) promote the training and transition of utility
6    workers impacted by this amendatory Act of the 103rd
7    General Assembly; and
8        (4) encourage third-party participation and
9    competition where it will maximize benefits to customers.
10    (c) Within 3 months after the effective date of this
11amendatory Act of the 103rd General Assembly, each of the
12largest gas, electric, or combination gas and electric
13corporations shall submit to the Commission for review and
14approval at least one and as many as 5 proposed pilot thermal
15energy network projects. In developing the pilot project
16proposals, at least one pilot project in each utility
17territory shall be proposed in a disadvantaged community, as
18described in the Illinois Power Agency Act, and if a utility
19proposes 4 or more pilot projects, at least 2 shall be proposed
20in disadvantaged communities. Each utility shall coordinate
21with other utility participants, the Illinois Power Agency,
22and consultants with expertise on successful pilot projects to
23ensure that the pilot projects are diverse and designed to
24inform the Commission's decisions in the proceeding on the
25various ownership, market, and rate structures for thermal
26energy networks. The pilot project proposals shall include

 

 

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1specific customer protection plans, shall be made publicly
2available on the Commission's website, and shall be subject to
3a public comment period of no less than 30 days. Within 6
4months after the effective date of this amendatory Act of the
5103rd General Assembly, the Commission shall determine whether
6it is in the public interest to approve or modify such pilot
7thermal energy network projects and shall issue an order
8directing each gas, electric, or combination gas and electric
9corporation to implement such proposed or modified pilot
10thermal energy network projects. In considering whether pilot
11thermal energy network projects are in the public interest,
12the Commission shall consider whether the pilot project will
13develop information useful for the Commission's adoption of
14rules governing thermal energy networks, whether the pilot
15project furthers the climate justice and emissions reduction,
16whether the pilot project advances financial and technical
17approaches to equitable and affordable building
18electrification, and whether the pilot project creates
19benefits to customers and society at large, including, but not
20limited to, public health benefits in areas with
21disproportionate environmental or public health burdens, job
22retention and creation, reliability, and increased
23affordability of renewable thermal energy options.
24    (d) Each gas, electric, or combination gas and utility
25corporation shall report to the Commission, on a quarterly
26basis and until completion of the pilot thermal energy network

 

 

SB1666- 14 -LRB103 26363 AMQ 52725 b

1project, as determined by the Commission, the status of each
2pilot thermal energy network project. The Commission shall
3post and make publicly available such reports on its website.
4The report shall include, but not be limited to:
5        (1) the stage of development of each pilot project;
6        (2) the barriers to development;
7        (3) the number of customers served;
8        (4) the costs of the pilot project;
9        (5) the number of jobs retained or created by the
10    pilot project; and
11        (6) any other such information the Commission deems to
12    be in the public interest.
13    (e) Any thermal energy network created under this Section
14shall demonstrate that the gas, electric, or combination gas
15and electric corporation has entered into a labor peace
16agreement with a bona fide labor organization of jurisdiction
17that is actively engaged in representing gas, electric, and
18combination gas and electric corporation employees. The labor
19peace agreement shall apply to the employees necessary for the
20maintenance and operation of such thermal energy network. The
21labor peace agreement shall be an ongoing material condition
22of authorization to maintain and operate such thermal energy
23networks. The employees eligible for these positions shall
24first be selected from and offered to a pool of transitioning
25utility workers who have lost, or are at risk of losing, their
26employment with a utility downsizing its gas transmission and

 

 

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1distribution system. Such list of potential employees shall be
2provided by affected unions and provided to the Illinois
3Department of Labor. The Illinois Department of Labor shall
4update and provide such list to the gas, electric, or
5combination gas and electric corporation 90 days prior to the
6purchase, acquisition, or construction of any thermal energy
7network created under this Section.
 
8    Section 999. Effective date. This Act takes effect upon
9becoming law.