Sen. James F. Clayborne, Jr.

Filed: 5/27/2016

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2939

2    AMENDMENT NO. ______. Amend Senate Bill 2939 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Power Agency Act is amended by
5changing Section 1-75 as follows:
 
6    (20 ILCS 3855/1-75)
7    Sec. 1-75. Planning and Procurement Bureau. The Planning
8and Procurement Bureau has the following duties and
9responsibilities:
10    (a) The Planning and Procurement Bureau shall each year,
11beginning in 2008, develop procurement plans and conduct
12competitive procurement processes in accordance with the
13requirements of Section 16-111.5 of the Public Utilities Act
14for the eligible retail customers of electric utilities that on
15December 31, 2005 provided electric service to at least 100,000
16customers in Illinois. The Planning and Procurement Bureau

 

 

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1shall also develop procurement plans and conduct competitive
2procurement processes in accordance with the requirements of
3Section 16-111.5 of the Public Utilities Act for the eligible
4retail customers of small multi-jurisdictional electric
5utilities that (i) on December 31, 2005 served less than
6100,000 customers in Illinois and (ii) request a procurement
7plan for their Illinois jurisdictional load. This Section shall
8not apply to a small multi-jurisdictional utility until such
9time as a small multi-jurisdictional utility requests the
10Agency to prepare a procurement plan for their Illinois
11jurisdictional load. For the purposes of this Section, the term
12"eligible retail customers" has the same definition as found in
13Section 16-111.5(a) of the Public Utilities Act.
14        (1) The Agency shall each year, beginning in 2008, as
15    needed, issue a request for qualifications for experts or
16    expert consulting firms to develop the procurement plans in
17    accordance with Section 16-111.5 of the Public Utilities
18    Act. In order to qualify an expert or expert consulting
19    firm must have:
20            (A) direct previous experience assembling
21        large-scale power supply plans or portfolios for
22        end-use customers;
23            (B) an advanced degree in economics, mathematics,
24        engineering, risk management, or a related area of
25        study;
26            (C) 10 years of experience in the electricity

 

 

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1        sector, including managing supply risk;
2            (D) expertise in wholesale electricity market
3        rules, including those established by the Federal
4        Energy Regulatory Commission and regional transmission
5        organizations;
6            (E) expertise in credit protocols and familiarity
7        with contract protocols;
8            (F) adequate resources to perform and fulfill the
9        required functions and responsibilities; and
10            (G) the absence of a conflict of interest and
11        inappropriate bias for or against potential bidders or
12        the affected electric utilities.
13        (2) The Agency shall each year, as needed, issue a
14    request for qualifications for a procurement administrator
15    to conduct the competitive procurement processes in
16    accordance with Section 16-111.5 of the Public Utilities
17    Act. In order to qualify an expert or expert consulting
18    firm must have:
19            (A) direct previous experience administering a
20        large-scale competitive procurement process;
21            (B) an advanced degree in economics, mathematics,
22        engineering, or a related area of study;
23            (C) 10 years of experience in the electricity
24        sector, including risk management experience;
25            (D) expertise in wholesale electricity market
26        rules, including those established by the Federal

 

 

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1        Energy Regulatory Commission and regional transmission
2        organizations;
3            (E) expertise in credit and contract protocols;
4            (F) adequate resources to perform and fulfill the
5        required functions and responsibilities; and
6            (G) the absence of a conflict of interest and
7        inappropriate bias for or against potential bidders or
8        the affected electric utilities.
9        (3) The Agency shall provide affected utilities and
10    other interested parties with the lists of qualified
11    experts or expert consulting firms identified through the
12    request for qualifications processes that are under
13    consideration to develop the procurement plans and to serve
14    as the procurement administrator. The Agency shall also
15    provide each qualified expert's or expert consulting
16    firm's response to the request for qualifications. All
17    information provided under this subparagraph shall also be
18    provided to the Commission. The Agency may provide by rule
19    for fees associated with supplying the information to
20    utilities and other interested parties. These parties
21    shall, within 5 business days, notify the Agency in writing
22    if they object to any experts or expert consulting firms on
23    the lists. Objections shall be based on:
24            (A) failure to satisfy qualification criteria;
25            (B) identification of a conflict of interest; or
26            (C) evidence of inappropriate bias for or against

 

 

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1        potential bidders or the affected utilities.
2        The Agency shall remove experts or expert consulting
3    firms from the lists within 10 days if there is a
4    reasonable basis for an objection and provide the updated
5    lists to the affected utilities and other interested
6    parties. If the Agency fails to remove an expert or expert
7    consulting firm from a list, an objecting party may seek
8    review by the Commission within 5 days thereafter by filing
9    a petition, and the Commission shall render a ruling on the
10    petition within 10 days. There is no right of appeal of the
11    Commission's ruling.
12        (4) The Agency shall issue requests for proposals to
13    the qualified experts or expert consulting firms to develop
14    a procurement plan for the affected utilities and to serve
15    as procurement administrator.
16        (5) The Agency shall select an expert or expert
17    consulting firm to develop procurement plans based on the
18    proposals submitted and shall award contracts of up to 5
19    years to those selected.
20        (6) The Agency shall select an expert or expert
21    consulting firm, with approval of the Commission, to serve
22    as procurement administrator based on the proposals
23    submitted. If the Commission rejects, within 5 days, the
24    Agency's selection, the Agency shall submit another
25    recommendation within 3 days based on the proposals
26    submitted. The Agency shall award a 5-year contract to the

 

 

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1    expert or expert consulting firm so selected with
2    Commission approval.
3    (b) The experts or expert consulting firms retained by the
4Agency shall, as appropriate, prepare procurement plans, and
5conduct a competitive procurement process as prescribed in
6Section 16-111.5 of the Public Utilities Act, to ensure
7adequate, reliable, affordable, efficient, and environmentally
8sustainable electric service at the lowest total cost over
9time, taking into account any benefits of price stability, for
10eligible retail customers of electric utilities that on
11December 31, 2005 provided electric service to at least 100,000
12customers in the State of Illinois, and for eligible Illinois
13retail customers of small multi-jurisdictional electric
14utilities that (i) on December 31, 2005 served less than
15100,000 customers in Illinois and (ii) request a procurement
16plan for their Illinois jurisdictional load.
17    (c) Renewable portfolio standard.
18        (1) The procurement plans shall include cost-effective
19    renewable energy resources. A minimum percentage of each
20    utility's total supply to serve the load of eligible retail
21    customers, as defined in Section 16-111.5(a) of the Public
22    Utilities Act, procured for each of the following years
23    shall be generated from cost-effective renewable energy
24    resources: at least 2% by June 1, 2008; at least 4% by June
25    1, 2009; at least 5% by June 1, 2010; at least 6% by June 1,
26    2011; at least 7% by June 1, 2012; at least 8% by June 1,

 

 

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1    2013; at least 9% by June 1, 2014; at least 10% by June 1,
2    2015; and increasing by at least 1.5% each year thereafter
3    to at least 25% by June 1, 2025. To the extent that it is
4    available, at least 75% of the renewable energy resources
5    used to meet these standards shall come from wind
6    generation and, beginning on June 1, 2011, at least the
7    following percentages of the renewable energy resources
8    used to meet these standards shall come from photovoltaics
9    on the following schedule: 0.5% by June 1, 2012, 1.5% by
10    June 1, 2013; 3% by June 1, 2014; and 6% by June 1, 2015 and
11    thereafter. Of the renewable energy resources procured
12    pursuant to this Section, at least the following
13    percentages shall come from distributed renewable energy
14    generation devices: 0.5% by June 1, 2013, 0.75% by June 1,
15    2014, and 1% by June 1, 2015 and thereafter. To the extent
16    available, half of the renewable energy resources procured
17    from distributed renewable energy generation shall come
18    from devices of less than 25 kilowatts in nameplate
19    capacity. Renewable energy resources procured from
20    distributed generation devices may also count towards the
21    required percentages for wind and solar photovoltaics.
22    Procurement of renewable energy resources from distributed
23    renewable energy generation devices shall be done on an
24    annual basis through multi-year contracts of no less than 5
25    years, and shall consist solely of renewable energy
26    credits.

 

 

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1        The Agency shall create credit requirements for
2    suppliers of distributed renewable energy. In order to
3    minimize the administrative burden on contracting
4    entities, the Agency shall solicit the use of third-party
5    organizations to aggregate distributed renewable energy
6    into groups of no less than one megawatt in installed
7    capacity. These third-party organizations shall administer
8    contracts with individual distributed renewable energy
9    generation device owners. An individual distributed
10    renewable energy generation device owner shall have the
11    ability to measure the output of his or her distributed
12    renewable energy generation device.
13        For purposes of this subsection (c), "cost-effective"
14    means that the costs of procuring renewable energy
15    resources do not cause the limit stated in paragraph (2) of
16    this subsection (c) to be exceeded and do not exceed
17    benchmarks based on market prices for renewable energy
18    resources in the region, which shall be developed by the
19    procurement administrator, in consultation with the
20    Commission staff, Agency staff, and the procurement
21    monitor and shall be subject to Commission review and
22    approval.
23        (2) For purposes of this subsection (c), the required
24    procurement of cost-effective renewable energy resources
25    for a particular year shall be measured as a percentage of
26    the actual amount of electricity (megawatt-hours) supplied

 

 

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1    by the electric utility to eligible retail customers in the
2    planning year ending immediately prior to the procurement.
3    For purposes of this subsection (c), the amount paid per
4    kilowatthour means the total amount paid for electric
5    service expressed on a per kilowatthour basis. For purposes
6    of this subsection (c), the total amount paid for electric
7    service includes without limitation amounts paid for
8    supply, transmission, distribution, surcharges, and add-on
9    taxes.
10        Notwithstanding the requirements of this subsection
11    (c), the total of renewable energy resources procured
12    pursuant to the procurement plan for any single year shall
13    be reduced by an amount necessary to limit the annual
14    estimated average net increase due to the costs of these
15    resources included in the amounts paid by eligible retail
16    customers in connection with electric service to:
17            (A) in 2008, no more than 0.5% of the amount paid
18        per kilowatthour by those customers during the year
19        ending May 31, 2007;
20            (B) in 2009, the greater of an additional 0.5% of
21        the amount paid per kilowatthour by those customers
22        during the year ending May 31, 2008 or 1% of the amount
23        paid per kilowatthour by those customers during the
24        year ending May 31, 2007;
25            (C) in 2010, the greater of an additional 0.5% of
26        the amount paid per kilowatthour by those customers

 

 

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1        during the year ending May 31, 2009 or 1.5% of the
2        amount paid per kilowatthour by those customers during
3        the year ending May 31, 2007;
4            (D) in 2011, the greater of an additional 0.5% of
5        the amount paid per kilowatthour by those customers
6        during the year ending May 31, 2010 or 2% of the amount
7        paid per kilowatthour by those customers during the
8        year ending May 31, 2007; and
9            (E) thereafter, the amount of renewable energy
10        resources procured pursuant to the procurement plan
11        for any single year shall be reduced by an amount
12        necessary to limit the estimated average net increase
13        due to the cost of these resources included in the
14        amounts paid by eligible retail customers in
15        connection with electric service to no more than the
16        greater of 2.015% of the amount paid per kilowatthour
17        by those customers during the year ending May 31, 2007
18        or the incremental amount per kilowatthour paid for
19        these resources in 2011.
20            No later than June 30, 2011, the Commission shall
21        review the limitation on the amount of renewable energy
22        resources procured pursuant to this subsection (c) and
23        report to the General Assembly its findings as to
24        whether that limitation unduly constrains the
25        procurement of cost-effective renewable energy
26        resources.

 

 

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1        (3) Through June 1, 2011, renewable energy resources
2    shall be counted for the purpose of meeting the renewable
3    energy standards set forth in paragraph (1) of this
4    subsection (c) only if they are generated from facilities
5    located in the State, provided that cost-effective
6    renewable energy resources are available from those
7    facilities. If those cost-effective resources are not
8    available in Illinois, they shall be procured in states
9    that adjoin Illinois and may be counted towards compliance.
10    If those cost-effective resources are not available in
11    Illinois or in states that adjoin Illinois, they shall be
12    purchased elsewhere and shall be counted towards
13    compliance. After June 1, 2011, cost-effective renewable
14    energy resources located in Illinois and in states that
15    adjoin Illinois may be counted towards compliance with the
16    standards set forth in paragraph (1) of this subsection
17    (c). If those cost-effective resources are not available in
18    Illinois or in states that adjoin Illinois, they shall be
19    purchased elsewhere and shall be counted towards
20    compliance.
21        (4) The electric utility shall retire all renewable
22    energy credits used to comply with the standard.
23        (5) Beginning with the year commencing June 1, 2010, an
24    electric utility subject to this subsection (c) shall apply
25    the lesser of the maximum alternative compliance payment
26    rate or the most recent estimated alternative compliance

 

 

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1    payment rate for its service territory for the
2    corresponding compliance period, established pursuant to
3    subsection (d) of Section 16-115D of the Public Utilities
4    Act to its retail customers that take service pursuant to
5    the electric utility's hourly pricing tariff or tariffs.
6    The electric utility shall retain all amounts collected as
7    a result of the application of the alternative compliance
8    payment rate or rates to such customers, and, beginning in
9    2011, the utility shall include in the information provided
10    under item (1) of subsection (d) of Section 16-111.5 of the
11    Public Utilities Act the amounts collected under the
12    alternative compliance payment rate or rates for the prior
13    year ending May 31. Notwithstanding any limitation on the
14    procurement of renewable energy resources imposed by item
15    (2) of this subsection (c), the Agency shall increase its
16    spending on the purchase of renewable energy resources to
17    be procured by the electric utility for the next plan year
18    by an amount equal to the amounts collected by the utility
19    under the alternative compliance payment rate or rates in
20    the prior year ending May 31. Beginning April 1, 2012, and
21    each year thereafter, the Agency shall prepare a public
22    report for the General Assembly and Illinois Commerce
23    Commission that shall include, but not necessarily be
24    limited to:
25            (A) a comparison of the costs associated with the
26        Agency's procurement of renewable energy resources to

 

 

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1        (1) the Agency's costs associated with electricity
2        generated by other types of generation facilities and
3        (2) the benefits associated with the Agency's
4        procurement of renewable energy resources; and
5            (B) an analysis of the rate impacts associated with
6        the Illinois Power Agency's procurement of renewable
7        resources, including, but not limited to, any
8        long-term contracts, on the eligible retail customers
9        of electric utilities.
10        The analysis shall include the Agency's estimate of the
11    total dollar impact that the Agency's procurement of
12    renewable resources has had on the annual electricity bills
13    of the customer classes that comprise each eligible retail
14    customer class taking service from an electric utility. The
15    Agency's report shall also analyze how the operation of the
16    alternative compliance payment mechanism, any long-term
17    contracts, or other aspects of the applicable renewable
18    portfolio standards impacts the rates of customers of
19    alternative retail electric suppliers.
20    (d) Clean coal portfolio standard.
21        (1) The procurement plans shall include electricity
22    generated using clean coal. Each utility shall enter into
23    one or more sourcing agreements with the initial clean coal
24    facility, as provided in paragraph (3) of this subsection
25    (d), covering electricity generated by the initial clean
26    coal facility representing at least 5% of each utility's

 

 

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1    total supply to serve the load of eligible retail customers
2    in 2015 and each year thereafter, as described in paragraph
3    (3) of this subsection (d), subject to the limits specified
4    in paragraph (2) of this subsection (d). It is the goal of
5    the State that by January 1, 2025, 25% of the electricity
6    used in the State shall be generated by cost-effective
7    clean coal facilities. For purposes of this subsection (d),
8    "cost-effective" means that the expenditures pursuant to
9    such sourcing agreements do not cause the limit stated in
10    paragraph (2) of this subsection (d) to be exceeded and do
11    not exceed cost-based benchmarks, which shall be developed
12    to assess all expenditures pursuant to such sourcing
13    agreements covering electricity generated by clean coal
14    facilities, other than the initial clean coal facility, by
15    the procurement administrator, in consultation with the
16    Commission staff, Agency staff, and the procurement
17    monitor and shall be subject to Commission review and
18    approval.
19        A utility party to a sourcing agreement shall
20    immediately retire any emission credits that it receives in
21    connection with the electricity covered by such agreement.
22        Utilities shall maintain adequate records documenting
23    the purchases under the sourcing agreement to comply with
24    this subsection (d) and shall file an accounting with the
25    load forecast that must be filed with the Agency by July 15
26    of each year, in accordance with subsection (d) of Section

 

 

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1    16-111.5 of the Public Utilities Act.
2        A utility shall be deemed to have complied with the
3    clean coal portfolio standard specified in this subsection
4    (d) if the utility enters into a sourcing agreement as
5    required by this subsection (d).
6        (2) For purposes of this subsection (d), the required
7    execution of sourcing agreements with the initial clean
8    coal facility for a particular year shall be measured as a
9    percentage of the actual amount of electricity
10    (megawatt-hours) supplied by the electric utility to
11    eligible retail customers in the planning year ending
12    immediately prior to the agreement's execution. For
13    purposes of this subsection (d), the amount paid per
14    kilowatthour means the total amount paid for electric
15    service expressed on a per kilowatthour basis. For purposes
16    of this subsection (d), the total amount paid for electric
17    service includes without limitation amounts paid for
18    supply, transmission, distribution, surcharges and add-on
19    taxes.
20        Notwithstanding the requirements of this subsection
21    (d), the total amount paid under sourcing agreements with
22    clean coal facilities pursuant to the procurement plan for
23    any given year shall be reduced by an amount necessary to
24    limit the annual estimated average net increase due to the
25    costs of these resources included in the amounts paid by
26    eligible retail customers in connection with electric

 

 

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1    service to:
2            (A) in 2010, no more than 0.5% of the amount paid
3        per kilowatthour by those customers during the year
4        ending May 31, 2009;
5            (B) in 2011, the greater of an additional 0.5% of
6        the amount paid per kilowatthour by those customers
7        during the year ending May 31, 2010 or 1% of the amount
8        paid per kilowatthour by those customers during the
9        year ending May 31, 2009;
10            (C) in 2012, the greater of an additional 0.5% of
11        the amount paid per kilowatthour by those customers
12        during the year ending May 31, 2011 or 1.5% of the
13        amount paid per kilowatthour by those customers during
14        the year ending May 31, 2009;
15            (D) in 2013, the greater of an additional 0.5% of
16        the amount paid per kilowatthour by those customers
17        during the year ending May 31, 2012 or 2% of the amount
18        paid per kilowatthour by those customers during the
19        year ending May 31, 2009; and
20            (E) thereafter, the total amount paid under
21        sourcing agreements with clean coal facilities
22        pursuant to the procurement plan for any single year
23        shall be reduced by an amount necessary to limit the
24        estimated average net increase due to the cost of these
25        resources included in the amounts paid by eligible
26        retail customers in connection with electric service

 

 

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1        to no more than the greater of (i) 2.015% of the amount
2        paid per kilowatthour by those customers during the
3        year ending May 31, 2009 or (ii) the incremental amount
4        per kilowatthour paid for these resources in 2013, in
5        each of cases (i) and (ii) reduced during the period
6        November 1, 2016 through the termination of the
7        transitional reliability capacity credit program
8        provided for in subsection (d-10) of this Section, by
9        0.114 cents per kilowatthour. These requirements may
10        be altered only as provided by statute.
11        No later than June 30, 2015, the Commission shall
12    review the limitation on the total amount paid under
13    sourcing agreements, if any, with clean coal facilities
14    pursuant to this subsection (d) and report to the General
15    Assembly its findings as to whether that limitation unduly
16    constrains the amount of electricity generated by
17    cost-effective clean coal facilities that is covered by
18    sourcing agreements.
19        (3) Initial clean coal facility. In order to promote
20    development of clean coal facilities in Illinois, each
21    electric utility subject to this Section shall execute a
22    sourcing agreement to source electricity from a proposed
23    clean coal facility in Illinois (the "initial clean coal
24    facility") that will have a nameplate capacity of at least
25    500 MW when commercial operation commences, that has a
26    final Clean Air Act permit on the effective date of this

 

 

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1    amendatory Act of the 95th General Assembly, and that will
2    meet the definition of clean coal facility in Section 1-10
3    of this Act when commercial operation commences. The
4    sourcing agreements with this initial clean coal facility
5    shall be subject to both approval of the initial clean coal
6    facility by the General Assembly and satisfaction of the
7    requirements of paragraph (4) of this subsection (d) and
8    shall be executed within 90 days after any such approval by
9    the General Assembly. The Agency and the Commission shall
10    have authority to inspect all books and records associated
11    with the initial clean coal facility during the term of
12    such a sourcing agreement. A utility's sourcing agreement
13    for electricity produced by the initial clean coal facility
14    shall include:
15            (A) a formula contractual price (the "contract
16        price") approved pursuant to paragraph (4) of this
17        subsection (d), which shall:
18                (i) be determined using a cost of service
19            methodology employing either a level or deferred
20            capital recovery component, based on a capital
21            structure consisting of 45% equity and 55% debt,
22            and a return on equity as may be approved by the
23            Federal Energy Regulatory Commission, which in any
24            case may not exceed the lower of 11.5% or the rate
25            of return approved by the General Assembly
26            pursuant to paragraph (4) of this subsection (d);

 

 

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1            and
2                (ii) provide that all miscellaneous net
3            revenue, including but not limited to net revenue
4            from the sale of emission allowances, if any,
5            substitute natural gas, if any, grants or other
6            support provided by the State of Illinois or the
7            United States Government, firm transmission
8            rights, if any, by-products produced by the
9            facility, energy or capacity derived from the
10            facility and not covered by a sourcing agreement
11            pursuant to paragraph (3) of this subsection (d) or
12            item (5) of subsection (d) of Section 16-115 of the
13            Public Utilities Act, whether generated from the
14            synthesis gas derived from coal, from SNG, or from
15            natural gas, shall be credited against the revenue
16            requirement for this initial clean coal facility;
17            (B) power purchase provisions, which shall:
18                (i) provide that the utility party to such
19            sourcing agreement shall pay the contract price
20            for electricity delivered under such sourcing
21            agreement;
22                (ii) require delivery of electricity to the
23            regional transmission organization market of the
24            utility that is party to such sourcing agreement;
25                (iii) require the utility party to such
26            sourcing agreement to buy from the initial clean

 

 

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1            coal facility in each hour an amount of energy
2            equal to all clean coal energy made available from
3            the initial clean coal facility during such hour
4            times a fraction, the numerator of which is such
5            utility's retail market sales of electricity
6            (expressed in kilowatthours sold) in the State
7            during the prior calendar month and the
8            denominator of which is the total retail market
9            sales of electricity (expressed in kilowatthours
10            sold) in the State by utilities during such prior
11            month and the sales of electricity (expressed in
12            kilowatthours sold) in the State by alternative
13            retail electric suppliers during such prior month
14            that are subject to the requirements of this
15            subsection (d) and paragraph (5) of subsection (d)
16            of Section 16-115 of the Public Utilities Act,
17            provided that the amount purchased by the utility
18            in any year will be limited by paragraph (2) of
19            this subsection (d); and
20                (iv) be considered pre-existing contracts in
21            such utility's procurement plans for eligible
22            retail customers;
23            (C) contract for differences provisions, which
24        shall:
25                (i) require the utility party to such sourcing
26            agreement to contract with the initial clean coal

 

 

09900SB2939sam002- 21 -LRB099 19038 EGJ 49058 a

1            facility in each hour with respect to an amount of
2            energy equal to all clean coal energy made
3            available from the initial clean coal facility
4            during such hour times a fraction, the numerator of
5            which is such utility's retail market sales of
6            electricity (expressed in kilowatthours sold) in
7            the utility's service territory in the State
8            during the prior calendar month and the
9            denominator of which is the total retail market
10            sales of electricity (expressed in kilowatthours
11            sold) in the State by utilities during such prior
12            month and the sales of electricity (expressed in
13            kilowatthours sold) in the State by alternative
14            retail electric suppliers during such prior month
15            that are subject to the requirements of this
16            subsection (d) and paragraph (5) of subsection (d)
17            of Section 16-115 of the Public Utilities Act,
18            provided that the amount paid by the utility in any
19            year will be limited by paragraph (2) of this
20            subsection (d);
21                (ii) provide that the utility's payment
22            obligation in respect of the quantity of
23            electricity determined pursuant to the preceding
24            clause (i) shall be limited to an amount equal to
25            (1) the difference between the contract price
26            determined pursuant to subparagraph (A) of

 

 

09900SB2939sam002- 22 -LRB099 19038 EGJ 49058 a

1            paragraph (3) of this subsection (d) and the
2            day-ahead price for electricity delivered to the
3            regional transmission organization market of the
4            utility that is party to such sourcing agreement
5            (or any successor delivery point at which such
6            utility's supply obligations are financially
7            settled on an hourly basis) (the "reference
8            price") on the day preceding the day on which the
9            electricity is delivered to the initial clean coal
10            facility busbar, multiplied by (2) the quantity of
11            electricity determined pursuant to the preceding
12            clause (i); and
13                (iii) not require the utility to take physical
14            delivery of the electricity produced by the
15            facility;
16            (D) general provisions, which shall:
17                (i) specify a term of no more than 30 years,
18            commencing on the commercial operation date of the
19            facility;
20                (ii) provide that utilities shall maintain
21            adequate records documenting purchases under the
22            sourcing agreements entered into to comply with
23            this subsection (d) and shall file an accounting
24            with the load forecast that must be filed with the
25            Agency by July 15 of each year, in accordance with
26            subsection (d) of Section 16-111.5 of the Public

 

 

09900SB2939sam002- 23 -LRB099 19038 EGJ 49058 a

1            Utilities Act;
2                (iii) provide that all costs associated with
3            the initial clean coal facility will be
4            periodically reported to the Federal Energy
5            Regulatory Commission and to purchasers in
6            accordance with applicable laws governing
7            cost-based wholesale power contracts;
8                (iv) permit the Illinois Power Agency to
9            assume ownership of the initial clean coal
10            facility, without monetary consideration and
11            otherwise on reasonable terms acceptable to the
12            Agency, if the Agency so requests no less than 3
13            years prior to the end of the stated contract term;
14                (v) require the owner of the initial clean coal
15            facility to provide documentation to the
16            Commission each year, starting in the facility's
17            first year of commercial operation, accurately
18            reporting the quantity of carbon emissions from
19            the facility that have been captured and
20            sequestered and report any quantities of carbon
21            released from the site or sites at which carbon
22            emissions were sequestered in prior years, based
23            on continuous monitoring of such sites. If, in any
24            year after the first year of commercial operation,
25            the owner of the facility fails to demonstrate that
26            the initial clean coal facility captured and

 

 

09900SB2939sam002- 24 -LRB099 19038 EGJ 49058 a

1            sequestered at least 50% of the total carbon
2            emissions that the facility would otherwise emit
3            or that sequestration of emissions from prior
4            years has failed, resulting in the release of
5            carbon dioxide into the atmosphere, the owner of
6            the facility must offset excess emissions. Any
7            such carbon offsets must be permanent, additional,
8            verifiable, real, located within the State of
9            Illinois, and legally and practicably enforceable.
10            The cost of such offsets for the facility that are
11            not recoverable shall not exceed $15 million in any
12            given year. No costs of any such purchases of
13            carbon offsets may be recovered from a utility or
14            its customers. All carbon offsets purchased for
15            this purpose and any carbon emission credits
16            associated with sequestration of carbon from the
17            facility must be permanently retired. The initial
18            clean coal facility shall not forfeit its
19            designation as a clean coal facility if the
20            facility fails to fully comply with the applicable
21            carbon sequestration requirements in any given
22            year, provided the requisite offsets are
23            purchased. However, the Attorney General, on
24            behalf of the People of the State of Illinois, may
25            specifically enforce the facility's sequestration
26            requirement and the other terms of this contract

 

 

09900SB2939sam002- 25 -LRB099 19038 EGJ 49058 a

1            provision. Compliance with the sequestration
2            requirements and offset purchase requirements
3            specified in paragraph (3) of this subsection (d)
4            shall be reviewed annually by an independent
5            expert retained by the owner of the initial clean
6            coal facility, with the advance written approval
7            of the Attorney General. The Commission may, in the
8            course of the review specified in item (vii),
9            reduce the allowable return on equity for the
10            facility if the facility wilfully fails to comply
11            with the carbon capture and sequestration
12            requirements set forth in this item (v);
13                (vi) include limits on, and accordingly
14            provide for modification of, the amount the
15            utility is required to source under the sourcing
16            agreement consistent with paragraph (2) of this
17            subsection (d);
18                (vii) require Commission review: (1) to
19            determine the justness, reasonableness, and
20            prudence of the inputs to the formula referenced in
21            subparagraphs (A)(i) through (A)(iii) of paragraph
22            (3) of this subsection (d), prior to an adjustment
23            in those inputs including, without limitation, the
24            capital structure and return on equity, fuel
25            costs, and other operations and maintenance costs
26            and (2) to approve the costs to be passed through

 

 

09900SB2939sam002- 26 -LRB099 19038 EGJ 49058 a

1            to customers under the sourcing agreement by which
2            the utility satisfies its statutory obligations.
3            Commission review shall occur no less than every 3
4            years, regardless of whether any adjustments have
5            been proposed, and shall be completed within 9
6            months;
7                (viii) limit the utility's obligation to such
8            amount as the utility is allowed to recover through
9            tariffs filed with the Commission, provided that
10            neither the clean coal facility nor the utility
11            waives any right to assert federal pre-emption or
12            any other argument in response to a purported
13            disallowance of recovery costs;
14                (ix) limit the utility's or alternative retail
15            electric supplier's obligation to incur any
16            liability until such time as the facility is in
17            commercial operation and generating power and
18            energy and such power and energy is being delivered
19            to the facility busbar;
20                (x) provide that the owner or owners of the
21            initial clean coal facility, which is the
22            counterparty to such sourcing agreement, shall
23            have the right from time to time to elect whether
24            the obligations of the utility party thereto shall
25            be governed by the power purchase provisions or the
26            contract for differences provisions;

 

 

09900SB2939sam002- 27 -LRB099 19038 EGJ 49058 a

1                (xi) append documentation showing that the
2            formula rate and contract, insofar as they relate
3            to the power purchase provisions, have been
4            approved by the Federal Energy Regulatory
5            Commission pursuant to Section 205 of the Federal
6            Power Act;
7                (xii) provide that any changes to the terms of
8            the contract, insofar as such changes relate to the
9            power purchase provisions, are subject to review
10            under the public interest standard applied by the
11            Federal Energy Regulatory Commission pursuant to
12            Sections 205 and 206 of the Federal Power Act; and
13                (xiii) conform with customary lender
14            requirements in power purchase agreements used as
15            the basis for financing non-utility generators.
16        (4) Effective date of sourcing agreements with the
17    initial clean coal facility.
18        Any proposed sourcing agreement with the initial clean
19    coal facility shall not become effective unless the
20    following reports are prepared and submitted and
21    authorizations and approvals obtained:
22            (i) Facility cost report. The owner of the initial
23        clean coal facility shall submit to the Commission, the
24        Agency, and the General Assembly a front-end
25        engineering and design study, a facility cost report,
26        method of financing (including but not limited to

 

 

09900SB2939sam002- 28 -LRB099 19038 EGJ 49058 a

1        structure and associated costs), and an operating and
2        maintenance cost quote for the facility (collectively
3        "facility cost report"), which shall be prepared in
4        accordance with the requirements of this paragraph (4)
5        of subsection (d) of this Section, and shall provide
6        the Commission and the Agency access to the work
7        papers, relied upon documents, and any other backup
8        documentation related to the facility cost report.
9            (ii) Commission report. Within 6 months following
10        receipt of the facility cost report, the Commission, in
11        consultation with the Agency, shall submit a report to
12        the General Assembly setting forth its analysis of the
13        facility cost report. Such report shall include, but
14        not be limited to, a comparison of the costs associated
15        with electricity generated by the initial clean coal
16        facility to the costs associated with electricity
17        generated by other types of generation facilities, an
18        analysis of the rate impacts on residential and small
19        business customers over the life of the sourcing
20        agreements, and an analysis of the likelihood that the
21        initial clean coal facility will commence commercial
22        operation by and be delivering power to the facility's
23        busbar by 2016. To assist in the preparation of its
24        report, the Commission, in consultation with the
25        Agency, may hire one or more experts or consultants,
26        the costs of which shall be paid for by the owner of

 

 

09900SB2939sam002- 29 -LRB099 19038 EGJ 49058 a

1        the initial clean coal facility. The Commission and
2        Agency may begin the process of selecting such experts
3        or consultants prior to receipt of the facility cost
4        report.
5            (iii) General Assembly approval. The proposed
6        sourcing agreements shall not take effect unless,
7        based on the facility cost report and the Commission's
8        report, the General Assembly enacts authorizing
9        legislation approving (A) the projected price, stated
10        in cents per kilowatthour, to be charged for
11        electricity generated by the initial clean coal
12        facility, (B) the projected impact on residential and
13        small business customers' bills over the life of the
14        sourcing agreements, and (C) the maximum allowable
15        return on equity for the project; and
16            (iv) Commission review. If the General Assembly
17        enacts authorizing legislation pursuant to
18        subparagraph (iii) approving a sourcing agreement, the
19        Commission shall, within 90 days of such enactment,
20        complete a review of such sourcing agreement. During
21        such time period, the Commission shall implement any
22        directive of the General Assembly, resolve any
23        disputes between the parties to the sourcing agreement
24        concerning the terms of such agreement, approve the
25        form of such agreement, and issue an order finding that
26        the sourcing agreement is prudent and reasonable.

 

 

09900SB2939sam002- 30 -LRB099 19038 EGJ 49058 a

1        The facility cost report shall be prepared as follows:
2            (A) The facility cost report shall be prepared by
3        duly licensed engineering and construction firms
4        detailing the estimated capital costs payable to one or
5        more contractors or suppliers for the engineering,
6        procurement and construction of the components
7        comprising the initial clean coal facility and the
8        estimated costs of operation and maintenance of the
9        facility. The facility cost report shall include:
10                (i) an estimate of the capital cost of the core
11            plant based on one or more front end engineering
12            and design studies for the gasification island and
13            related facilities. The core plant shall include
14            all civil, structural, mechanical, electrical,
15            control, and safety systems.
16                (ii) an estimate of the capital cost of the
17            balance of the plant, including any capital costs
18            associated with sequestration of carbon dioxide
19            emissions and all interconnects and interfaces
20            required to operate the facility, such as
21            transmission of electricity, construction or
22            backfeed power supply, pipelines to transport
23            substitute natural gas or carbon dioxide, potable
24            water supply, natural gas supply, water supply,
25            water discharge, landfill, access roads, and coal
26            delivery.

 

 

09900SB2939sam002- 31 -LRB099 19038 EGJ 49058 a

1            The quoted construction costs shall be expressed
2        in nominal dollars as of the date that the quote is
3        prepared and shall include capitalized financing costs
4        during construction, taxes, insurance, and other
5        owner's costs, and an assumed escalation in materials
6        and labor beyond the date as of which the construction
7        cost quote is expressed.
8            (B) The front end engineering and design study for
9        the gasification island and the cost study for the
10        balance of plant shall include sufficient design work
11        to permit quantification of major categories of
12        materials, commodities and labor hours, and receipt of
13        quotes from vendors of major equipment required to
14        construct and operate the clean coal facility.
15            (C) The facility cost report shall also include an
16        operating and maintenance cost quote that will provide
17        the estimated cost of delivered fuel, personnel,
18        maintenance contracts, chemicals, catalysts,
19        consumables, spares, and other fixed and variable
20        operations and maintenance costs. The delivered fuel
21        cost estimate will be provided by a recognized third
22        party expert or experts in the fuel and transportation
23        industries. The balance of the operating and
24        maintenance cost quote, excluding delivered fuel
25        costs, will be developed based on the inputs provided
26        by duly licensed engineering and construction firms

 

 

09900SB2939sam002- 32 -LRB099 19038 EGJ 49058 a

1        performing the construction cost quote, potential
2        vendors under long-term service agreements and plant
3        operating agreements, or recognized third party plant
4        operator or operators.
5            The operating and maintenance cost quote
6        (including the cost of the front end engineering and
7        design study) shall be expressed in nominal dollars as
8        of the date that the quote is prepared and shall
9        include taxes, insurance, and other owner's costs, and
10        an assumed escalation in materials and labor beyond the
11        date as of which the operating and maintenance cost
12        quote is expressed.
13            (D) The facility cost report shall also include an
14        analysis of the initial clean coal facility's ability
15        to deliver power and energy into the applicable
16        regional transmission organization markets and an
17        analysis of the expected capacity factor for the
18        initial clean coal facility.
19            (E) Amounts paid to third parties unrelated to the
20        owner or owners of the initial clean coal facility to
21        prepare the core plant construction cost quote,
22        including the front end engineering and design study,
23        and the operating and maintenance cost quote will be
24        reimbursed through Coal Development Bonds.
25        (5) Re-powering and retrofitting coal-fired power
26    plants previously owned by Illinois utilities to qualify as

 

 

09900SB2939sam002- 33 -LRB099 19038 EGJ 49058 a

1    clean coal facilities. During the 2009 procurement
2    planning process and thereafter, the Agency and the
3    Commission shall consider sourcing agreements covering
4    electricity generated by power plants that were previously
5    owned by Illinois utilities and that have been or will be
6    converted into clean coal facilities, as defined by Section
7    1-10 of this Act. Pursuant to such procurement planning
8    process, the owners of such facilities may propose to the
9    Agency sourcing agreements with utilities and alternative
10    retail electric suppliers required to comply with
11    subsection (d) of this Section and item (5) of subsection
12    (d) of Section 16-115 of the Public Utilities Act, covering
13    electricity generated by such facilities. In the case of
14    sourcing agreements that are power purchase agreements,
15    the contract price for electricity sales shall be
16    established on a cost of service basis. In the case of
17    sourcing agreements that are contracts for differences,
18    the contract price from which the reference price is
19    subtracted shall be established on a cost of service basis.
20    The Agency and the Commission may approve any such utility
21    sourcing agreements that do not exceed cost-based
22    benchmarks developed by the procurement administrator, in
23    consultation with the Commission staff, Agency staff and
24    the procurement monitor, subject to Commission review and
25    approval. The Commission shall have authority to inspect
26    all books and records associated with these clean coal

 

 

09900SB2939sam002- 34 -LRB099 19038 EGJ 49058 a

1    facilities during the term of any such contract.
2        (6) Costs incurred under this subsection (d) or
3    pursuant to a contract entered into under this subsection
4    (d) shall be deemed prudently incurred and reasonable in
5    amount and the electric utility shall be entitled to full
6    cost recovery pursuant to the tariffs filed with the
7    Commission.
8    (d-10) Transitional reliability capacity credit program.
9        (1) Beginning November 1, 2016 and ending upon the
10    termination of the transitional reliability capacity
11    credit program provided for in this subsection (d-10), each
12    electric utility subject to subsection (a) of this Section
13    shall impose a transitional electric generation
14    reliability support charge of 0.114 cents per kilowatthour
15    on each kilowatthour of electricity delivered to its
16    delivery services customers within its service territory.
17    The electric utility shall include this charge in its
18    delivery services tariff authorized by Section 16-108 of
19    the Public Utilities Act. The electric utility shall
20    maintain a reserve fund to hold all moneys collected
21    through application of the transitional electric
22    generation reliability support charge and not used for the
23    purchase of transitional reliability capacity credits in
24    accordance with subsection (d-10) of this Section until the
25    electric utility is authorized to refund the balance, if
26    any, of moneys in the reserve fund to its retail customers

 

 

09900SB2939sam002- 35 -LRB099 19038 EGJ 49058 a

1    in accordance with subsection (d-10). The electric
2    utility's administrative costs of billing, collecting, and
3    accounting for the transitional electric generation
4    reliability support charge shall be deemed prudently
5    incurred and reasonable in amount and the electric utility
6    shall be entitled to full cost recovery pursuant to the
7    tariff filed with the Commission.
8        (2) Beginning December 1, 2016, and continuing until
9    the transitional reliability capacity credit program is
10    terminated in accordance with this subsection (d-10), each
11    electric utility subject to subsection (a) of this Section
12    shall purchase transitional reliability capacity credits
13    in accordance with this subsection (d-10), but not to
14    exceed the amount of transitional reliability capacity
15    credits that can be purchased with the revenues collected
16    by the electric utility through the transitional electric
17    generation reliability support charge, as provided in this
18    subsection (d-10). The electric utilities shall purchase
19    transitional reliability capacity credits in procurement
20    events conducted by the Agency as provided in this
21    subsection (d-10).
22        (3) A transitional reliability capacity credit shall
23    be equal to one megawatt of electric generating capacity of
24    an eligible electric generating unit, as determined in
25    accordance with paragraph (5) of this subsection (d-10),
26    for one day. The megawatts of electric generating capacity

 

 

09900SB2939sam002- 36 -LRB099 19038 EGJ 49058 a

1    on which transitional reliability capacity credits are
2    based shall be referred to as reliability capacity. A
3    transitional reliability capacity credit shall represent
4    the reliability attributes of one megawatt-day of electric
5    generating capacity of a specified electric generating
6    unit, but shall not represent a right or entitlement to
7    utilize or receive the capacity or energy of the electric
8    generating unit. The electrical capacity of the megawatts
9    of reliability capacity of an electric generating unit
10    which is contracted to provide transitional reliability
11    capacity credits may be sold to an electric utility or to
12    another purchaser located within the geographic boundaries
13    of the regional transmission organization in which the
14    electric generating unit is located, or to an electric
15    utility subject to subsection (a) of this Section located
16    outside such boundaries. The electrical energy produced by
17    megawatts of reliability capacity of an electric
18    generating unit may be sold to any purchaser, regardless of
19    location. A megawatt-day of the reliability capacity of an
20    electric generating unit may be supplied and used only once
21    as a transitional reliability capacity credit.
22        (4) The total number of transitional reliability
23    capacity credits to be purchased, in the aggregate, by the
24    electric utilities subject to subsection (a) of this
25    Section in a month shall be 5,000 multiplied by the number
26    of days in the month; provided, that the total number of

 

 

09900SB2939sam002- 37 -LRB099 19038 EGJ 49058 a

1    transitional reliability capacity credits to be purchased
2    in an annual period (or in a 6-month period in the case of
3    the initial procurement of transitional reliability
4    capacity credits) shall be reduced, to the extent
5    necessary, so that the total estimated dollar obligation of
6    each electric utility for transitional reliability
7    capacity credits for the period shall not exceed the moneys
8    projected to be available from collections of the
9    transitional electric generation reliability support
10    charge plus the balance in the electric utility's reserve
11    fund for transitional electric generation reliability
12    support charge collections, as provided in paragraph (8) of
13    this subsection (d-10). The price of each transitional
14    reliability capacity credit shall be $150 per megawatt-day
15    minus the clearing price in the most recent Midcontinent
16    Independent System Operator, Inc. Planning Resource
17    Auction. Each electric utility that is subject to
18    subsection (a) of this Section shall purchase a fraction of
19    the total reliability capacity credits to be purchased in
20    the month by all electric utilities (prior to taking into
21    account any reduction for an individual electric utility
22    due to a projected insufficiency of funds as hereinabove
23    provided), where such fraction is equal to the electric
24    utility's percentage of megawatt hour deliveries to retail
25    customers in its service area during the calendar year
26    ended December 31 preceding the procurement event to the

 

 

09900SB2939sam002- 38 -LRB099 19038 EGJ 49058 a

1    total megawatt hour deliveries to retail customers by all
2    electric utilities subject to subsection (a) of this
3    Section in their respective service areas during the
4    calendar year ended December 31.
5        (5) To be eligible for selection as a source of
6    transitional reliability capacity credits in a procurement
7    event, an electric generating unit must meet each of the
8    following requirements, as determined by the Agency. Prior
9    to each procurement event, the Agency shall determine the
10    eligibility of each electric generating unit seeking to
11    participate in that procurement event.
12            (A) The electric generating unit is physically
13        located within the service area of an electric utility
14        that served more than 100,000 delivery services
15        customers in Illinois as of December 31, 2015.
16            (B) The electric generating unit utilizes a solid
17        fuel, and the owner of the generating unit commits to
18        maintain an inventory of the fuel equal to at least 20
19        days supply at the site of the generating unit during
20        the period that the generating unit is providing
21        transitional reliability capacity credits.
22            (C) For the 3 consecutive calendar years ending on
23        December 31 immediately prior to the procurement
24        event, the generating unit achieved an equivalent
25        availability factor of at least 75%.
26            (D) The owner of the electric generating unit

 

 

09900SB2939sam002- 39 -LRB099 19038 EGJ 49058 a

1        certifies (i) that, if the electric generating unit is
2        selected as a supplier of transitional reliability
3        capacity credits, the owner will continue to operate
4        the electric generating unit during the period in which
5        the transitional reliability capacity credits are to
6        be provided, and (ii) that the owner has no reason to
7        believe that the generating unit will be unable to
8        achieve an equivalent availability factor of at least
9        75% for the period for which transitional reliability
10        capacity credits are to be provided.
11            (E) The owner and the operator (which may be
12        separate entities) of the electric generating unit is
13        or are registered with the North American Electric
14        Reliability Corporation as the generator owner and
15        generator operator for the generating unit and are
16        subject to the North American Electric Reliability
17        Corporation's mandatory reliability standards
18        applicable to generator owners and generator
19        operators, adopted in accordance with Section 215(d)
20        of the Federal Power Act, for the electric generating
21        unit.
22            (F) The electric generating unit is connected to
23        the bulk electric system at an interconnection voltage
24        of at least 100 kilovolts.
25            (G) On and after June 1, 2017, the electric
26        generating unit is located within the geographic

 

 

09900SB2939sam002- 40 -LRB099 19038 EGJ 49058 a

1        boundaries of a regional transmission organization
2        that the Agency determines does not meet the criteria
3        specified in paragraph (9) of this subsection (d-10).
4        This requirement is not applicable to procurement
5        events to procure transitional reliability capacity
6        credits for periods beginning prior to June 1, 2017.
7            (H) For the period to be covered by the procurement
8        event, the electric generating unit has capacity that
9        has not been committed for sale to any purchaser or
10        purchasers located within the geographic boundaries of
11        a regional transmission organization other than the
12        regional transmission organization in which the
13        electric generating unit is located, other than an
14        electric utility subject to subsection (a) of this
15        Section. The owner of the electric generating unit
16        shall commit that if the electric generating unit is
17        selected to provide transitional reliability capacity
18        credits, then during the period covered by the
19        procurement event, the reliability capacity on which
20        the transitional reliability capacity credits are
21        based shall not be contracted for sale or committed to
22        any purchaser, other than an electric utility subject
23        to subsection (a) of this Section, that is located
24        within the geographic boundaries of a regional
25        transmission organization other than the regional
26        transmission organization in which the electric

 

 

09900SB2939sam002- 41 -LRB099 19038 EGJ 49058 a

1        generating unit is physically located.
2            (I) The electric generating unit is not eligible to
3        sell or provide renewable energy credits or zero
4        emission credits.
5            (J) The electric generating unit is not owned by a
6        municipal utility, an electric cooperative, or a group
7        or consortium of municipal utilities or electric
8        cooperatives whose end user customers do not pay the
9        transitional electric generation reliability support
10        charge.
11            (K) The owner of the electric generating unit
12        commits to pay any fees assessed by the Agency to
13        recover the Agency's costs of conducting the
14        procurement event and related activities, as provided
15        in subparagraph (C) of paragraph (7) of this subsection
16        (d-10).
17        (6) On or before October 31, 2016, the Agency shall
18    conduct a procurement event for the procurement of
19    transitional reliability capacity credits by the electric
20    utilities for the period December 1, 2016 through May 31,
21    2017. On or before March 31, 2017 and on or before March 31
22    of each year thereafter until the termination of the
23    transitional reliability capacity credit program, the
24    Agency shall conduct a procurement event for the
25    procurement of transitional reliability capacity credits
26    by the electric utilities for the period beginning the

 

 

09900SB2939sam002- 42 -LRB099 19038 EGJ 49058 a

1    following June 1 and ending on May 31 of the following
2    calendar year. The Agency is authorized to retain one or
3    more third-party consultants or contractors to assist the
4    Agency in conducting each procurement event and related
5    activities required by this subsection (d-10). At least 30
6    days prior to the date of each procurement event, the
7    Agency shall:
8            (A) announce the date of the procurement event and
9        the period for which transitional reliability capacity
10        credits will be procured;
11            (B) receive expressions of interest from owners of
12        electric generating units that their electric
13        generating units be selected as providers of
14        transitional reliability capacity credits in the
15        procurement event, which expressions of interest shall
16        include (i) a statement of the electric generating unit
17        or units and the amount of transitional reliability
18        capacity credits from each electric generating unit
19        that the owner intends to offer for selection in the
20        procurement event, and (ii) information demonstrating
21        that each electric generating unit meets the
22        eligibility requirements for selection specified in
23        paragraph (5) of this subsection (d-10), with the
24        information to be submitted to the Agency on such forms
25        and through such processes as established by the
26        Agency;

 

 

09900SB2939sam002- 43 -LRB099 19038 EGJ 49058 a

1            (C) request and obtain from each electric utility
2        (i) a forecast of the electric utility's kilowatthour
3        deliveries of electricity to its retail customers in
4        its service area during the period to be covered by the
5        procurement event and (ii) the estimated balance in the
6        electric utility's reserve fund for transitional
7        electric generation reliability support charge
8        collections, as of the start of the period to be
9        covered by the procurement event; provided, that for
10        purposes of this subparagraph (C), the Agency may use
11        the load forecast of an electric utility for the period
12        to be covered by the procurement event that the Agency
13        obtained in connection with the preparation of a
14        procurement plan pursuant to subsection (a) of this
15        Section;
16            (D) announce an estimate of the number of
17        transitional reliability capacity credits to be
18        procured by each electric utility in the procurement
19        event, taking into account the electric utilities'
20        forecast of electricity deliveries, the amounts of the
21        transitional electric generation reliability support
22        charge estimated to be collected by each electric
23        utility during the period beginning one month prior to
24        the start of and ending one month prior to the end of
25        the period to be covered by the procurement event and
26        the estimated balance in the electric utility's

 

 

09900SB2939sam002- 44 -LRB099 19038 EGJ 49058 a

1        reserve fund as of the start of the period to be
2        covered by the procurement event, with the total number
3        of transitional reliability capacity credits to be
4        procured for all electric utilities subject to
5        subsection (a) of this Section not to exceed the
6        transitional reliability capacity credits associated
7        with 5,000 megawatts of reliability capacity for the
8        period to be covered by the procurement event; and
9            (E) notify the owners of all electric generating
10        units seeking to be selected as providers of
11        transitional reliability capacity credits in the
12        procurement event, and the electric utilities, as to
13        which electric generating units the Agency has
14        determined are eligible to be selected as providers of
15        transitional reliability capacity credits in the
16        procurement event.
17        (7) The procurement events for transitional
18    reliability capacity credits shall be conducted as
19    follows:
20            (A) The owner of each electric generating unit that
21        the Agency has determined to be eligible to be selected
22        as a provider of transitional reliability capacity
23        credits shall specify the amount of transitional
24        reliability capacity credits per day that is being
25        offered from the electric generating unit for the
26        period to be covered by the procurement event. The same

 

 

09900SB2939sam002- 45 -LRB099 19038 EGJ 49058 a

1        number of transitional reliability capacity credits
2        being offered from the electric generating unit shall
3        be offered for every day of the entire period to be
4        covered by the procurement event. The owner shall not
5        offer transitional reliability capacity credits from
6        an electric generating unit based on megawatts of
7        capacity of the electric generating unit that have been
8        sold or committed to one or more purchasers, other than
9        an electric utility subject to subsection (a) of this
10        Section, that is located within the geographic
11        boundaries of a regional transmission organization
12        other than the regional transmission organization in
13        which the electric generating unit is physically
14        located.
15            (B) If more transitional reliability capacity
16        credits are offered for purchase by an electric utility
17        than the amount which the Agency has determined should
18        be purchased for the period to be covered by the
19        procurement event, the Agency shall select the
20        electric generating units to provide the transitional
21        reliability capacity credits, and the associated
22        amount of reliability capacity of each electric
23        generating unit, based on the equivalent availability
24        factor achieved by each electric generating unit
25        during the 3 calendar years ended on December 31
26        preceding the procurement event, with the electric

 

 

09900SB2939sam002- 46 -LRB099 19038 EGJ 49058 a

1        generating units achieving the highest equivalent
2        availability factor in the 3-year period selected
3        first, and so forth, until the required amount of
4        transitional reliability capacity credits is obtained.
5            (C) Costs incurred by the Agency to conduct a
6        procurement event, including the activities of the
7        Agency described in paragraphs (5), (6), and (7) of
8        this subsection (d-10), and including any costs
9        incurred by the Agency to retain consultants or
10        contractors to assist in conducting the procurement
11        event and related activities, shall be recovered by the
12        Agency through fees charged to the owners of electric
13        generating units that are selected in the procurement
14        event as the providers of transition reliability
15        capacity credits to the electric utilities. Any such
16        fees to recover the Agency's costs shall be charged to
17        the owners of the electric generating units on a
18        proportional basis based on the amounts of
19        transitional reliability capacity credits that are to
20        be supplied by each owner's electric generating unit or
21        units.
22        (8) The owner of each electric generating unit selected
23    by the Agency to provide transitional reliability capacity
24    credits to an electric utility, and the electric utility,
25    shall enter into binding contractual arrangements for the
26    provision of and payment for the transitional electric

 

 

09900SB2939sam002- 47 -LRB099 19038 EGJ 49058 a

1    reliability credits, using forms developed by the Agency
2    with consideration of input provided by the electric
3    utilities and interested suppliers. The contractual
4    arrangements shall include the following provisions:
5            (A) The source of moneys to be used to pay for the
6        transitional reliability capacity credits for the
7        period covered by all contracts awarded pursuant to a
8        procurement event shall be (i) the electric utility's
9        collection of transitional electric generation
10        reliability support charges during the period
11        beginning one month prior to the start of, and ending
12        one month prior to the end of, the period covered by
13        the contracts, plus the balance in the electric
14        utility's reserve fund during the period covered by the
15        contracts; and the electric utility shall not be
16        obligated to pay for any transitional reliability
17        capacity credits for which there are insufficient
18        funds from such sources. In the event of a shortfall of
19        funding to pay for all of the contracted transitional
20        reliability capacity credits for an annual period (or
21        6-month period in the case of the original procurement
22        event), the number of transitional reliability
23        capacity credits for which the electric utility is
24        required to make payment shall be reduced pro rata for
25        each generating unit based on the number of
26        transitional reliability capacity credits contracted

 

 

09900SB2939sam002- 48 -LRB099 19038 EGJ 49058 a

1        for from the generating unit relative to the total
2        number of transitional reliability capacity credits
3        contracted by the electric utility for the period.
4            (B) On or before the 10th day of each month,
5        subject to the limitation set forth in subparagraph
6        (A), the electric utility shall pay the owner of the
7        generating unit for transitional reliability capacity
8        credits in the preceding month, based on the number of
9        days in the preceding month.
10        (9) The program for provision and purchase of
11    transitional reliability capacity credits provided for in
12    this subsection (d-10) and the obligation of electric
13    utilities to purchase transitional reliability capacity
14    credits shall terminate on May 31 next following the date
15    that the Agency determines that each electric utility that
16    on December 31, 2015 provided delivery services to at least
17    100,000 retail electric customers have become members of a
18    regional transmission organization meeting the following
19    criteria:
20            (A) The regional transmission organization
21        maintains a market for the provision and acquisition of
22        electric generation capacity resources that includes
23        an electric generation capacity auction process that
24        has the following characteristics: (i) a
25        downward-sloping demand curve for electric generation
26        capacity resources; (ii) buyer-side and supplier-side

 

 

09900SB2939sam002- 49 -LRB099 19038 EGJ 49058 a

1        market power mitigation mechanisms sufficient to
2        prevent manipulation of the electric capacity market
3        by both buyers and sellers of electric generation
4        capacity, such as must-offer requirements for electric
5        generation capacity resources, mandatory participation
6        by load-serving entities for all load, structural
7        market power tests based on numbers of suppliers, and
8        minimum and maximum offer price requirements with
9        energy and ancillary services revenue offsets; (iii) a
10        forward term for the base electric generation capacity
11        auction of at least 3 years from the date of each base
12        electric generation capacity auction to the date when
13        the electric generation capacity acquired in the
14        auction is to be provided by the supplier; and (iv) an
15        explicit capacity performance product component
16        designed to drive improved generator reliability (A)
17        that provides incentives to generators to make
18        investments that help ensure that they perform
19        reliably during extreme weather events and (B) that
20        places value upon dependable fuel supplies; and
21            (B) At least 50% of the electric utilities that are
22        members of the regional transmission organization
23        primarily serve retail electricity customers located
24        in states offering retail electricity competition, or
25        the option to choose the customer's electricity
26        supplier, to a majority of the retail customers in the

 

 

09900SB2939sam002- 50 -LRB099 19038 EGJ 49058 a

1        State.
2    Following the termination of the program provided for in
3this subsection (d-10) and the completion of all contractual
4arrangements for the provision of and payment for transitional
5reliability capacity credits, any balance remaining in an
6electric utility's reserve fund shall be refunded to the
7electric utility's delivery services customers at the rate of
80.114 cents per kilowatthour until exhausted.
9    (e) The draft procurement plans are subject to public
10comment, as required by Section 16-111.5 of the Public
11Utilities Act.
12    (f) The Agency shall submit the final procurement plan to
13the Commission. The Agency shall revise a procurement plan if
14the Commission determines that it does not meet the standards
15set forth in Section 16-111.5 of the Public Utilities Act.
16    (g) The Agency shall assess fees to each affected utility
17to recover the costs incurred in preparation of the annual
18procurement plan for the utility.
19    (h) The Agency shall assess fees to each bidder to recover
20the costs incurred in connection with a competitive procurement
21process.
22(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;
2397-618, eff. 10-26-11; 97-658, eff. 1-13-12; 97-813, eff.
247-13-12; 98-463, eff. 8-16-13.)
 
25    Section 10. The Public Utilities Act is amended by changing

 

 

09900SB2939sam002- 51 -LRB099 19038 EGJ 49058 a

1Sections 16-108 and 16-126.1 as follows:
 
2    (220 ILCS 5/16-108)
3    Sec. 16-108. Recovery of costs associated with the
4provision of delivery services and certain other charges.
5    (a) An electric utility shall file a delivery services
6tariff with the Commission at least 210 days prior to the date
7that it is required to begin offering such services pursuant to
8this Act. An electric utility shall provide the components of
9delivery services that are subject to the jurisdiction of the
10Federal Energy Regulatory Commission at the same prices, terms
11and conditions set forth in its applicable tariff as approved
12or allowed into effect by that Commission. The Commission shall
13otherwise have the authority pursuant to Article IX to review,
14approve, and modify the prices, terms and conditions of those
15components of delivery services not subject to the jurisdiction
16of the Federal Energy Regulatory Commission, including the
17authority to determine the extent to which such delivery
18services should be offered on an unbundled basis. In making any
19such determination the Commission shall consider, at a minimum,
20the effect of additional unbundling on (i) the objective of
21just and reasonable rates, (ii) electric utility employees, and
22(iii) the development of competitive markets for electric
23energy services in Illinois.
24    (b) The Commission shall enter an order approving, or
25approving as modified, the delivery services tariff no later

 

 

09900SB2939sam002- 52 -LRB099 19038 EGJ 49058 a

1than 30 days prior to the date on which the electric utility
2must commence offering such services. The Commission may
3subsequently modify such tariff pursuant to this Act.
4    (c) The electric utility's tariffs shall define the classes
5of its customers for purposes of delivery services charges.
6Delivery services shall be priced and made available to all
7retail customers electing delivery services in each such class
8on a nondiscriminatory basis regardless of whether the retail
9customer chooses the electric utility, an affiliate of the
10electric utility, or another entity as its supplier of electric
11power and energy. Charges for delivery services shall be cost
12based, and shall allow the electric utility to recover the
13costs of providing delivery services through its charges to its
14delivery service customers that use the facilities and services
15associated with such costs. Such costs shall include the costs
16of owning, operating and maintaining transmission and
17distribution facilities. The Commission shall also be
18authorized to consider whether, and if so to what extent, the
19following costs are appropriately included in the electric
20utility's delivery services rates: (i) the costs of that
21portion of generation facilities used for the production and
22absorption of reactive power in order that retail customers
23located in the electric utility's service area can receive
24electric power and energy from suppliers other than the
25electric utility, and (ii) the costs associated with the use
26and redispatch of generation facilities to mitigate

 

 

09900SB2939sam002- 53 -LRB099 19038 EGJ 49058 a

1constraints on the transmission or distribution system in order
2that retail customers located in the electric utility's service
3area can receive electric power and energy from suppliers other
4than the electric utility. Nothing in this subsection shall be
5construed as directing the Commission to allocate any of the
6costs described in (i) or (ii) that are found to be
7appropriately included in the electric utility's delivery
8services rates to any particular customer group or geographic
9area in setting delivery services rates.
10    (d) The Commission shall establish charges, terms and
11conditions for delivery services that are just and reasonable
12and shall take into account customer impacts when establishing
13such charges. In establishing charges, terms and conditions for
14delivery services, the Commission shall take into account
15voltage level differences. A retail customer shall have the
16option to request to purchase electric service at any delivery
17service voltage reasonably and technically feasible from the
18electric facilities serving that customer's premises provided
19that there are no significant adverse impacts upon system
20reliability or system efficiency. A retail customer shall also
21have the option to request to purchase electric service at any
22point of delivery that is reasonably and technically feasible
23provided that there are no significant adverse impacts on
24system reliability or efficiency. Such requests shall not be
25unreasonably denied.
26    (e) Electric utilities shall recover the costs of

 

 

09900SB2939sam002- 54 -LRB099 19038 EGJ 49058 a

1installing, operating or maintaining facilities for the
2particular benefit of one or more delivery services customers,
3including without limitation any costs incurred in complying
4with a customer's request to be served at a different voltage
5level, directly from the retail customer or customers for whose
6benefit the costs were incurred, to the extent such costs are
7not recovered through the charges referred to in subsections
8(c) and (d) of this Section.
9    (f) An electric utility shall be entitled but not required
10to implement transition charges in conjunction with the
11offering of delivery services pursuant to Section 16-104. If an
12electric utility implements transition charges, it shall
13implement such charges for all delivery services customers and
14for all customers described in subsection (h), but shall not
15implement transition charges for power and energy that a retail
16customer takes from cogeneration or self-generation facilities
17located on that retail customer's premises, if such facilities
18meet the following criteria:
19        (i) the cogeneration or self-generation facilities
20    serve a single retail customer and are located on that
21    retail customer's premises (for purposes of this
22    subparagraph and subparagraph (ii), an industrial or
23    manufacturing retail customer and a third party contractor
24    that is served by such industrial or manufacturing customer
25    through such retail customer's own electrical distribution
26    facilities under the circumstances described in subsection

 

 

09900SB2939sam002- 55 -LRB099 19038 EGJ 49058 a

1    (vi) of the definition of "alternative retail electric
2    supplier" set forth in Section 16-102, shall be considered
3    a single retail customer);
4        (ii) the cogeneration or self-generation facilities
5    either (A) are sized pursuant to generally accepted
6    engineering standards for the retail customer's electrical
7    load at that premises (taking into account standby or other
8    reliability considerations related to that retail
9    customer's operations at that site) or (B) if the facility
10    is a cogeneration facility located on the retail customer's
11    premises, the retail customer is the thermal host for that
12    facility and the facility has been designed to meet that
13    retail customer's thermal energy requirements resulting in
14    electrical output beyond that retail customer's electrical
15    demand at that premises, comply with the operating and
16    efficiency standards applicable to "qualifying facilities"
17    specified in title 18 Code of Federal Regulations Section
18    292.205 as in effect on the effective date of this
19    amendatory Act of 1999;
20        (iii) the retail customer on whose premises the
21    facilities are located either has an exclusive right to
22    receive, and corresponding obligation to pay for, all of
23    the electrical capacity of the facility, or in the case of
24    a cogeneration facility that has been designed to meet the
25    retail customer's thermal energy requirements at that
26    premises, an identified amount of the electrical capacity

 

 

09900SB2939sam002- 56 -LRB099 19038 EGJ 49058 a

1    of the facility, over a minimum 5-year period; and
2        (iv) if the cogeneration facility is sized for the
3    retail customer's thermal load at that premises but exceeds
4    the electrical load, any sales of excess power or energy
5    are made only at wholesale, are subject to the jurisdiction
6    of the Federal Energy Regulatory Commission, and are not
7    for the purpose of circumventing the provisions of this
8    subsection (f).
9If a generation facility located at a retail customer's
10premises does not meet the above criteria, an electric utility
11implementing transition charges shall implement a transition
12charge until December 31, 2006 for any power and energy taken
13by such retail customer from such facility as if such power and
14energy had been delivered by the electric utility. Provided,
15however, that an industrial retail customer that is taking
16power from a generation facility that does not meet the above
17criteria but that is located on such customer's premises will
18not be subject to a transition charge for the power and energy
19taken by such retail customer from such generation facility if
20the facility does not serve any other retail customer and
21either was installed on behalf of the customer and for its own
22use prior to January 1, 1997, or is both predominantly fueled
23by byproducts of such customer's manufacturing process at such
24premises and sells or offers an average of 300 megawatts or
25more of electricity produced from such generation facility into
26the wholesale market. Such charges shall be calculated as

 

 

09900SB2939sam002- 57 -LRB099 19038 EGJ 49058 a

1provided in Section 16-102, and shall be collected on each
2kilowatt-hour delivered under a delivery services tariff to a
3retail customer from the date the customer first takes delivery
4services until December 31, 2006 except as provided in
5subsection (h) of this Section. Provided, however, that an
6electric utility, other than an electric utility providing
7service to at least 1,000,000 customers in this State on
8January 1, 1999, shall be entitled to petition for entry of an
9order by the Commission authorizing the electric utility to
10implement transition charges for an additional period ending no
11later than December 31, 2008. The electric utility shall file
12its petition with supporting evidence no earlier than 16
13months, and no later than 12 months, prior to December 31,
142006. The Commission shall hold a hearing on the electric
15utility's petition and shall enter its order no later than 8
16months after the petition is filed. The Commission shall
17determine whether and to what extent the electric utility shall
18be authorized to implement transition charges for an additional
19period. The Commission may authorize the electric utility to
20implement transition charges for some or all of the additional
21period, and shall determine the mitigation factors to be used
22in implementing such transition charges; provided, that the
23Commission shall not authorize mitigation factors less than
24110% of those in effect during the 12 months ended December 31,
252006. In making its determination, the Commission shall
26consider the following factors: the necessity to implement

 

 

09900SB2939sam002- 58 -LRB099 19038 EGJ 49058 a

1transition charges for an additional period in order to
2maintain the financial integrity of the electric utility; the
3prudence of the electric utility's actions in reducing its
4costs since the effective date of this amendatory Act of 1997;
5the ability of the electric utility to provide safe, adequate
6and reliable service to retail customers in its service area;
7and the impact on competition of allowing the electric utility
8to implement transition charges for the additional period.
9    (g) The electric utility shall file tariffs that establish
10the transition charges to be paid by each class of customers to
11the electric utility in conjunction with the provision of
12delivery services. The electric utility's tariffs shall define
13the classes of its customers for purposes of calculating
14transition charges. The electric utility's tariffs shall
15provide for the calculation of transition charges on a
16customer-specific basis for any retail customer whose average
17monthly maximum electrical demand on the electric utility's
18system during the 6 months with the customer's highest monthly
19maximum electrical demands equals or exceeds 3.0 megawatts for
20electric utilities having more than 1,000,000 customers, and
21for other electric utilities for any customer that has an
22average monthly maximum electrical demand on the electric
23utility's system of one megawatt or more, and (A) for which
24there exists data on the customer's usage during the 3 years
25preceding the date that the customer became eligible to take
26delivery services, or (B) for which there does not exist data

 

 

09900SB2939sam002- 59 -LRB099 19038 EGJ 49058 a

1on the customer's usage during the 3 years preceding the date
2that the customer became eligible to take delivery services, if
3in the electric utility's reasonable judgment there exists
4comparable usage information or a sufficient basis to develop
5such information, and further provided that the electric
6utility can require customers for which an individual
7calculation is made to sign contracts that set forth the
8transition charges to be paid by the customer to the electric
9utility pursuant to the tariff.
10    (h) An electric utility shall also be entitled to file
11tariffs that allow it to collect transition charges from retail
12customers in the electric utility's service area that do not
13take delivery services but that take electric power or energy
14from an alternative retail electric supplier or from an
15electric utility other than the electric utility in whose
16service area the customer is located. Such charges shall be
17calculated, in accordance with the definition of transition
18charges in Section 16-102, for the period of time that the
19customer would be obligated to pay transition charges if it
20were taking delivery services, except that no deduction for
21delivery services revenues shall be made in such calculation,
22and usage data from the customer's class shall be used where
23historical usage data is not available for the individual
24customer. The customer shall be obligated to pay such charges
25on a lump sum basis on or before the date on which the customer
26commences to take service from the alternative retail electric

 

 

09900SB2939sam002- 60 -LRB099 19038 EGJ 49058 a

1supplier or other electric utility, provided, that the electric
2utility in whose service area the customer is located shall
3offer the customer the option of signing a contract pursuant to
4which the customer pays such charges ratably over the period in
5which the charges would otherwise have applied.
6    (i) An electric utility shall be entitled to add to the
7bills of delivery services customers charges pursuant to
8Sections 9-221, 9-222 (except as provided in Section 9-222.1),
9and Section 16-114 of this Act, Section 5-5 of the Electricity
10Infrastructure Maintenance Fee Law, Section 6-5 of the
11Renewable Energy, Energy Efficiency, and Coal Resources
12Development Law of 1997, and Section 13 of the Energy
13Assistance Act. Beginning November 1, 2016, an electric utility
14required to impose the transitional electric generation
15reliability support charge provided for in subsection (d-10) of
16Section 1-75 of the Illinois Power Agency Act shall add such
17charge to the bills of its delivery services customers. The
18electric utility shall use the collections from imposition of
19the transitional electric generation reliability support
20charge to pay for transitional reliability capacity credits in
21accordance with subsection (d-10) of Section 1-75 of the
22Illinois Power Agency Act, with any collections in excess of
23current period payment obligations to be maintained in a
24reserve fund until the electric utility is authorized to refund
25the balance, if any, in the reserve fund to its delivery
26services customers in accordance with subsection (d-10) of

 

 

09900SB2939sam002- 61 -LRB099 19038 EGJ 49058 a

1Section 1-75 of the Illinois Power Agency Act.
2    (j) If a retail customer that obtains electric power and
3energy from cogeneration or self-generation facilities
4installed for its own use on or before January 1, 1997,
5subsequently takes service from an alternative retail electric
6supplier or an electric utility other than the electric utility
7in whose service area the customer is located for any portion
8of the customer's electric power and energy requirements
9formerly obtained from those facilities (including that amount
10purchased from the utility in lieu of such generation and not
11as standby power purchases, under a cogeneration displacement
12tariff in effect as of the effective date of this amendatory
13Act of 1997), the transition charges otherwise applicable
14pursuant to subsections (f), (g), or (h) of this Section shall
15not be applicable in any year to that portion of the customer's
16electric power and energy requirements formerly obtained from
17those facilities, provided, that for purposes of this
18subsection (j), such portion shall not exceed the average
19number of kilowatt-hours per year obtained from the
20cogeneration or self-generation facilities during the 3 years
21prior to the date on which the customer became eligible for
22delivery services, except as provided in subsection (f) of
23Section 16-110.
24(Source: P.A. 91-50, eff. 6-30-99; 92-690, eff. 7-18-02.)
 
25    (220 ILCS 5/16-126.1)

 

 

09900SB2939sam002- 62 -LRB099 19038 EGJ 49058 a

1    Sec. 16-126.1. Regional transmission organization
2memberships. The State shall not directly or indirectly
3prohibit an electric utility that on December 31, 2005 provided
4electric service to at least 100,000 customers in Illinois from
5membership in a Federal Energy Regulatory Commission approved
6regional transmission organization of its choosing. Nothing in
7this Section limits any authority the Commission otherwise has
8to regulate that electric utility. This Section ceases to be
9effective on July 1, 2016 2022 unless extended by the General
10Assembly by law.
11(Source: P.A. 95-481, eff. 8-28-07.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.".