HB1871 95TH GENERAL ASSEMBLY

LRB095 09347 MJR 31995 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1871

Introduced 2/23/2007, by Rep. Elaine Nekritz

SYNOPSIS AS INTRODUCED:

220 ILCS 5/9-220.3 new

Amends the Public Utilities Act. Requires an electric utility to procure or obtain renewable energy resources in amounts equal to provided quantities. Requires an electric utility to report to the Illinois Commerce Commission regarding compliance with renewable energy resource standards by April 1 of each year beginning in 2008. Provides penalties for an electric utility that fails to procure or obtain the full amount of renewable energy resources as required by specified provisions. Provides that the Commission shall adopt rules as necessary within 12 months after the effective date of the amendatory Act to assist in implementing methods of procurement, accounting, tracking, and reporting in order to achieve the stated objectives. Provides that electric utilities may enter into long-term contracts of up to 20 years with providers of renewable energy resources. Provides that the provisions shall not prohibit an electric utility from issuing a competitive solicitation for renewable energy resources in order to meet the required standards. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

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

Section 5. The Public Utilities Act is amended by adding Section 9-220.3 as follows:

(220 ILCS 5/9-220.3 new)

Sec. 9-220.3. Renewable energy portfolio standard and energy efficiency portfolio standard.

(a) The General Assembly finds and declares that it is desirable to obtain the environmental quality, public health, employment, economic development, rate stabilization, and fuel diversity benefits of developing new renewable energy resources for use in Illinois. The General Assembly has previously found and declared that the benefits of electricity from renewable energy resources accrue to the public at large, thus consumers and electric utilities and alternative retail electric suppliers share an interest in developing and using a significant level of these environmentally preferable resources in the State's electricity supply portfolio. The General Assembly has previously found and declared that renewable forms of energy should be promoted as an important element of the energy and environmental policies of the State.

(b) For purposes of this Section:

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

"Renewable energy resources" includes energy and renewable energy credits from wind, solar thermal energy, photovoltaic cells and panels, dedicated crops grown for energy production and organic waste biomass, hydropower that does not involve new construction or significant expansion of hydropower dams, and other such alternative sources of environmentally preferable energy. "Renewable energy resources" does not include, however, energy from the incineration, burning or heating of waste wood, tires, garbage, general household, institutional and commercial waste, industrial lunchroom or office waste, landscape waste, or construction or demolition debris.

(c) The following renewable energy portfolio standards shall apply:

(1) Each electric utility shall procure or obtain renewable energy resources in amounts equal to at least the following percentages of the total electricity that it supplies to its Illinois customers: 2% by December 31, 2007; 3% by December 31, 2008; 4% by December 31, 2009; 5% by December 31, 2010; 6% by December 31, 2011; 7% by December 31, 2012; 8% by December 31, 2013; 9% by December 31, 2014; and 10% by December 31, 2015. 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.

(2) For the purpose of this subsection (c), the required procurement of renewable energy resources for a particular year shall be measured as a percentage of the actual amount of electricity (megawatthours) supplied by the electric utility in the calendar year ending immediately prior to the procurement.

(3) Notwithstanding the requirements of item (1), an electric utility may reduce the amount of electric energy procured under new contracts from renewable energy resources in any single year by an amount necessary to limit the estimated average net increase to customers, due to these contracts, to be no more than 0.5% of customers' total electricity bills for the calendar year ending immediately prior to the procurement, subject to adjustments for any known subsequent rate increases. Any reductions in one year shall be offset by additional procurement in the following years subject to the annual limitation set forth in this subsection (c).

(4) In order to achieve improved air and water quality, additional environmental benefits, and better public health and economic development for Illinois, renewable energy resources shall be counted for the purpose of meeting the renewable energy standards set forth in item (1) only if they are generated from facilities located in Illinois or in a serious or severe ozone non-attainment area as designated by the United States Environmental Protection Agency, in another directly adjacent state. Renewable energy resources may be counted for purposes of the renewable energy standards set forth in item (1) after December 31, 2010 if they are generated from a facility anywhere in a directly adjacent state or in any state that is currently in the United States Environmental Protection Agency Region V, and if that state has entered into an agreement with Illinois as provided in item (5), and if the renewable energy resources procured meet the definition set forth in subsection (b) of this Section.

(5) The Department of Commerce and Economic Opportunity and other State officials shall attempt to work with public officials in directly adjacent states and other states currently in United States Environmental Protection Agency Region V to develop an agreement in which electric utilities in Illinois shall be allowed after December 31, 2010, to count for the purpose of meeting the designated renewable energy standards set forth in item (1) some renewable energy resources generated in a directly adjacent state or in any state that is currently in United States Environmental Protection Agency Region V if that state has enacted renewable energy portfolio standards and that other state also allows renewable energy resources generated in Illinois to be counted towards meeting its statutory renewable energy standards on substantially the same basis. For the purposes of such an agreement, all renewable energy resources procured must meet the definition set forth in subsection (b) of this Section.

(6) Each electric utility shall report to the Commission on compliance with these standards by April 1st of each year, beginning in 2008.

(7) If an electric utility does not procure or obtain the full amount of renewable energy resources specified by the standards in item (1), as modified by the limitations of item (3), then the electric utility shall pay a penalty of $50 per megawatthour each year for any shortfall unless and until the utility makes sufficient purchases to meet the requirement. Provided, however, that, if the electric utility proves to the Commission that renewable energy resources are not available in sufficient quantities to meet the renewable energy standards set forth in item (1), as modified by the limitations of item (3), and, if the Commission finds that the electric utility has, in fact, proved that the renewable energy resources are not available in sufficient quantities, after notice and a hearing conducted in accordance with the Commission's rules of practice, then the Commission shall waive the penalty. Any penalty payment shall be deposited into the Renewable Energy Resource Trust Fund to be only used by the Department of Commerce and Economic Opportunity for the sole purposes of supporting the actual development, construction, and utilization of renewable energy projects in Illinois.

(8) The Commission shall adopt rules as necessary within 12 months after the effective date of this amendatory Act of the 95th General Assembly to assist in implementing this Section including, but not limited to, methods of procurement, accounting, tracking, and reporting in order to achieve the full objectives of this Section. Such rules shall also provide for recovery of costs incurred and the pass through to customers of any savings achieved by electric utilities as a result of procuring or obtaining the renewable energy resources specified under item (1). The rate elements and rates used for such cost recovery may be established by the electric utility, subject to the Commission's review and approval, outside the context of a general rate case.

(9) In connection with their compliance with the requirements of item (1), electric utilities may enter into long-term contracts of up to 20 years in length with providers of renewable energy resources and the costs or savings associated with those contracts shall be reflected in tariffed rates for the duration of those contracts.

(10) Nothing in this Section shall prohibit an electric utility from issuing a competitive solicitation for renewable energy resources in order to meet the standards of item (1) and from beginning to recover the associated costs in advance of the conclusion of the rulemaking referenced in item (8), provided that such electric utility shall have first requested and received Commission approval for the design and conduct of such solicitation and the associated cost recovery methodology and tariff, which the Commission shall review and consider.

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