Illinois General Assembly - Full Text of SB2939
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Full Text of SB2939  99th General Assembly




State of Illinois
2015 and 2016


Introduced 2/18/2016, by Sen. James F. Clayborne, Jr.


20 ILCS 3501/825-65
20 ILCS 3855/1-10

    Amends the Illinois Finance Authority Act. In the definition of "Energy Efficiency Project", includes measures that decrease the heat rate in the generation of electricity. Amends the Illinois Power Agency Act. In the definition of "energy efficiency", includes measures that decrease the heat rate in the generation of electricity. Effective immediately.

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SB2939LRB099 19038 EGJ 43427 b

1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Finance Authority Act is amended by
5changing Section 825-65 as follows:
6    (20 ILCS 3501/825-65)
7    Sec. 825-65. Clean Coal, Coal, Energy Efficiency, and
8Renewable Energy Project Financing.
9    (a) Findings and declaration of policy.
10        (i) It is hereby found and declared that Illinois has
11    abundant coal resources and, in some areas of Illinois, the
12    demand for power exceeds the generating capacity.
13    Incentives to encourage the construction of coal-fueled
14    electric generating plants in Illinois to ensure power
15    generating capacity into the future and to advance clean
16    coal technology and the use of Illinois coal are in the
17    best interests of all of the citizens of Illinois.
18        (ii) It is further found and declared that Illinois has
19    abundant potential and resources to develop renewable
20    energy resource projects and that there are many
21    opportunities to invest in cost-effective energy
22    efficiency projects throughout the State. The development
23    of those projects will create jobs and investment as well



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1    as decrease environmental impacts and promote energy
2    independence in Illinois. Accordingly, the development of
3    those projects is in the best interests of all of the
4    citizens of Illinois.
5        (iii) The Authority is authorized to issue bonds to
6    help finance Clean Coal, Coal, Energy Efficiency, and
7    Renewable Energy projects pursuant to this Section.
8    (b) Definitions.
9        (i) "Clean Coal Project" means (A) "clean coal
10    facility", as defined in Section 1-10 of the Illinois Power
11    Agency Act; (B) "clean coal SNG facility", as defined in
12    Section 1-10 of the Illinois Power Agency Act; (C)
13    transmission lines and associated equipment that transfer
14    electricity from points of supply to points of delivery for
15    projects described in this subsection (b); (D) pipelines or
16    other methods to transfer carbon dioxide from the point of
17    production to the point of storage or sequestration for
18    projects described in this subsection (b); or (E) projects
19    to provide carbon abatement technology for existing
20    generating facilities.
21        (ii) "Coal Project" means new electric generating
22    facilities or new gasification facilities, as defined in
23    Section 605-332 of the Department of Commerce and Economic
24    Opportunity Law of the Civil Administrative Code of
25    Illinois, which may include mine-mouth power plants,
26    projects that employ the use of clean coal technology,



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1    projects to provide scrubber technology for existing
2    energy generating plants, or projects to provide electric
3    transmission facilities or new gasification facilities.
4        (iii) "Energy Efficiency Project" means measures that
5    reduce the amount of electricity or natural gas required to
6    achieve a given end use, consistent with Section 1-10 of
7    the Illinois Power Agency Act. "Energy Efficiency Project"
8    also includes measures that reduce the total Btus of
9    electricity and natural gas needed to meet the end use or
10    uses and measures that decrease the heat rate in the
11    generation of electricity consistent with Section 1-10 of
12    the Illinois Power Agency Act.
13        (iv) "Renewable Energy Project" means (A) a project
14    that uses renewable energy resources, as defined in Section
15    1-10 of the Illinois Power Agency Act; (B) a project that
16    uses environmentally preferable technologies and practices
17    that result in improvements to the production of renewable
18    fuels, including but not limited to, cellulosic
19    conversion, water and energy conservation, fractionation,
20    alternative feedstocks, or reduced green house gas
21    emissions; (C) transmission lines and associated equipment
22    that transfer electricity from points of supply to points
23    of delivery for projects described in this subsection (b);
24    or (D) projects that use technology for the storage of
25    renewable energy, including, without limitation, the use
26    of battery or electrochemical storage technology for



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1    mobile or stationary applications.
2    (c) Creation of reserve funds. The Authority may establish
3and maintain one or more reserve funds to enhance bonds issued
4by the Authority for a Clean Coal Project, a Coal Project, an
5Energy Efficiency Project, or a Renewable Energy Project. There
6may be one or more accounts in these reserve funds in which
7there may be deposited:
8        (1) any proceeds of the bonds issued by the Authority
9    required to be deposited therein by the terms of any
10    contract between the Authority and its bondholders or any
11    resolution of the Authority;
12        (2) any other moneys or funds of the Authority that it
13    may determine to deposit therein from any other source; and
14        (3) any other moneys or funds made available to the
15    Authority. Subject to the terms of any pledge to the owners
16    of any bonds, moneys in any reserve fund may be held and
17    applied to the payment of principal, premium, if any, and
18    interest of such bonds.
19    (d) Powers and duties. The Authority has the power:
20        (1) To issue bonds in one or more series pursuant to
21    one or more resolutions of the Authority for any Clean Coal
22    Project, Coal Project, Energy Efficiency Project, or
23    Renewable Energy Project authorized under this Section,
24    within the authorization set forth in subsection (e).
25        (2) To provide for the funding of any reserves or other
26    funds or accounts deemed necessary by the Authority in



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1    connection with any bonds issued by the Authority.
2        (3) To pledge any funds of the Authority or funds made
3    available to the Authority that may be applied to such
4    purpose as security for any bonds or any guarantees,
5    letters of credit, insurance contracts or similar credit
6    support or liquidity instruments securing the bonds.
7        (4) To enter into agreements or contracts with third
8    parties, whether public or private, including, without
9    limitation, the United States of America, the State or any
10    department or agency thereof, to obtain any
11    appropriations, grants, loans or guarantees that are
12    deemed necessary or desirable by the Authority. Any such
13    guarantee, agreement or contract may contain terms and
14    provisions necessary or desirable in connection with the
15    program, subject to the requirements established by the
16    Act.
17        (5) To exercise such other powers as are necessary or
18    incidental to the foregoing.
19    (e) Clean Coal Project, Coal Project, Energy Efficiency
20Project, and Renewable Energy Project bond authorization and
21financing limits. In addition to any other bonds authorized to
22be issued under Sections 801-40(w), 825-60, 830-25 and 845-5,
23the Authority may have outstanding, at any time, bonds for the
24purpose enumerated in this Section 825-65 in an aggregate
25principal amount that shall not exceed $3,000,000,000, subject
26to the following limitations: (i) up to $300,000,000 may be



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1issued to finance projects, as described in clause (C) of
2subsection (b)(i) and clause (C) of subsection (b)(iv) of this
3Section 825-65; (ii) up to $500,000,000 may be issued to
4finance projects, as described in clauses (D) and (E) of
5subsection (b)(i) of this Section 825-65; (iii) up to
6$2,000,000,000 may be issued to finance Clean Coal Projects, as
7described in clauses (A) and (B) of subsection (b)(i) of this
8Section 825-65 and Coal Projects, as described in subsection
9(b)(ii) of this Section 825-65; and (iv) up to $2,000,000,000
10may be issued to finance Energy Efficiency Projects, as
11described in subsection (b)(iii) of this Section 825-65 and
12Renewable Energy Projects, as described in clauses (A), (B),
13and (D) of subsection (b)(iii) of this Section 825-65. An
14application for a loan financed from bond proceeds from a
15borrower or its affiliates for a Clean Coal Project, a Coal
16Project, Energy Efficiency Project, or a Renewable Energy
17Project may not be approved by the Authority for an amount in
18excess of $450,000,000 for any borrower or its affiliates. A
19Clean Coal Project or Coal Project must be located within the
20State. An Energy Efficiency Project may be located within the
21State or outside the State, provided that, if the Energy
22Efficiency Project is located outside of the State, it must be
23owned, operated, leased, or managed by an entity located within
24the State or any entity affiliated with an entity located
25within the State. These bonds shall not constitute an
26indebtedness or obligation of the State of Illinois and it



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1shall be plainly stated on the face of each bond that it does
2not constitute an indebtedness or obligation of the State of
3Illinois, but is payable solely from the revenues, income or
4other assets of the Authority pledged therefor.
5    (f) The bonding authority granted under this Section is in
6addition to and not limited by the provisions of Section 845-5.
7(Source: P.A. 98-90, eff. 7-15-13.)
8    Section 10. The Illinois Power Agency Act is amended by
9changing Section 1-10 as follows:
10    (20 ILCS 3855/1-10)
11    Sec. 1-10. Definitions.
12    "Agency" means the Illinois Power Agency.
13    "Agency loan agreement" means any agreement pursuant to
14which the Illinois Finance Authority agrees to loan the
15proceeds of revenue bonds issued with respect to a project to
16the Agency upon terms providing for loan repayment installments
17at least sufficient to pay when due all principal of, interest
18and premium, if any, on those revenue bonds, and providing for
19maintenance, insurance, and other matters in respect of the
21    "Authority" means the Illinois Finance Authority.
22    "Clean coal facility" means an electric generating
23facility that uses primarily coal as a feedstock and that
24captures and sequesters carbon dioxide emissions at the



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1following levels: at least 50% of the total carbon dioxide
2emissions that the facility would otherwise emit if, at the
3time construction commences, the facility is scheduled to
4commence operation before 2016, at least 70% of the total
5carbon dioxide emissions that the facility would otherwise emit
6if, at the time construction commences, the facility is
7scheduled to commence operation during 2016 or 2017, and at
8least 90% of the total carbon dioxide emissions that the
9facility would otherwise emit if, at the time construction
10commences, the facility is scheduled to commence operation
11after 2017. The power block of the clean coal facility shall
12not exceed allowable emission rates for sulfur dioxide,
13nitrogen oxides, carbon monoxide, particulates and mercury for
14a natural gas-fired combined-cycle facility the same size as
15and in the same location as the clean coal facility at the time
16the clean coal facility obtains an approved air permit. All
17coal used by a clean coal facility shall have high volatile
18bituminous rank and greater than 1.7 pounds of sulfur per
19million btu content, unless the clean coal facility does not
20use gasification technology and was operating as a conventional
21coal-fired electric generating facility on June 1, 2009 (the
22effective date of Public Act 95-1027).
23    "Clean coal SNG brownfield facility" means a facility that
24(1) has commenced construction by July 1, 2015 on an urban
25brownfield site in a municipality with at least 1,000,000
26residents; (2) uses a gasification process to produce



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1substitute natural gas; (3) uses coal as at least 50% of the
2total feedstock over the term of any sourcing agreement with a
3utility and the remainder of the feedstock may be either
4petroleum coke or coal, with all such coal having a high
5bituminous rank and greater than 1.7 pounds of sulfur per
6million Btu content unless the facility reasonably determines
7that it is necessary to use additional petroleum coke to
8deliver additional consumer savings, in which case the facility
9shall use coal for at least 35% of the total feedstock over the
10term of any sourcing agreement; and (4) captures and sequesters
11at least 85% of the total carbon dioxide emissions that the
12facility would otherwise emit.
13    "Clean coal SNG facility" means a facility that uses a
14gasification process to produce substitute natural gas, that
15sequesters at least 90% of the total carbon dioxide emissions
16that the facility would otherwise emit, that uses at least 90%
17coal as a feedstock, with all such coal having a high
18bituminous rank and greater than 1.7 pounds of sulfur per
19million btu content, and that has a valid and effective permit
20to construct emission sources and air pollution control
21equipment and approval with respect to the federal regulations
22for Prevention of Significant Deterioration of Air Quality
23(PSD) for the plant pursuant to the federal Clean Air Act;
24provided, however, a clean coal SNG brownfield facility shall
25not be a clean coal SNG facility.
26    "Commission" means the Illinois Commerce Commission.



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1    "Costs incurred in connection with the development and
2construction of a facility" means:
3        (1) the cost of acquisition of all real property,
4    fixtures, and improvements in connection therewith and
5    equipment, personal property, and other property, rights,
6    and easements acquired that are deemed necessary for the
7    operation and maintenance of the facility;
8        (2) financing costs with respect to bonds, notes, and
9    other evidences of indebtedness of the Agency;
10        (3) all origination, commitment, utilization,
11    facility, placement, underwriting, syndication, credit
12    enhancement, and rating agency fees;
13        (4) engineering, design, procurement, consulting,
14    legal, accounting, title insurance, survey, appraisal,
15    escrow, trustee, collateral agency, interest rate hedging,
16    interest rate swap, capitalized interest, contingency, as
17    required by lenders, and other financing costs, and other
18    expenses for professional services; and
19        (5) the costs of plans, specifications, site study and
20    investigation, installation, surveys, other Agency costs
21    and estimates of costs, and other expenses necessary or
22    incidental to determining the feasibility of any project,
23    together with such other expenses as may be necessary or
24    incidental to the financing, insuring, acquisition, and
25    construction of a specific project and starting up,
26    commissioning, and placing that project in operation.



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1    "Department" means the Department of Commerce and Economic
3    "Director" means the Director of the Illinois Power Agency.
4    "Demand-response" means measures that decrease peak
5electricity demand or shift demand from peak to off-peak
7    "Distributed renewable energy generation device" means a
8device that is:
9        (1) powered by wind, solar thermal energy,
10    photovoltaic cells and panels, biodiesel, crops and
11    untreated and unadulterated organic waste biomass, tree
12    waste, and hydropower that does not involve new
13    construction or significant expansion of hydropower dams;
14        (2) interconnected at the distribution system level of
15    either an electric utility as defined in this Section, an
16    alternative retail electric supplier as defined in Section
17    16-102 of the Public Utilities Act, a municipal utility as
18    defined in Section 3-105 of the Public Utilities Act, or a
19    rural electric cooperative as defined in Section 3-119 of
20    the Public Utilities Act;
21        (3) located on the customer side of the customer's
22    electric meter and is primarily used to offset that
23    customer's electricity load; and
24        (4) limited in nameplate capacity to no more than 2,000
25    kilowatts.
26    "Energy efficiency" means measures that reduce the amount



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1of electricity or natural gas required to achieve a given end
2use. "Energy efficiency" also includes measures that reduce the
3total Btus of electricity and natural gas needed to meet the
4end use or uses and measures that decrease the heat rate in the
5generation of electricity.
6    "Electric utility" has the same definition as found in
7Section 16-102 of the Public Utilities Act.
8    "Facility" means an electric generating unit or a
9co-generating unit that produces electricity along with
10related equipment necessary to connect the facility to an
11electric transmission or distribution system.
12    "Governmental aggregator" means one or more units of local
13government that individually or collectively procure
14electricity to serve residential retail electrical loads
15located within its or their jurisdiction.
16    "Local government" means a unit of local government as
17defined in Section 1 of Article VII of the Illinois
19    "Municipality" means a city, village, or incorporated
21    "Person" means any natural person, firm, partnership,
22corporation, either domestic or foreign, company, association,
23limited liability company, joint stock company, or association
24and includes any trustee, receiver, assignee, or personal
25representative thereof.
26    "Project" means the planning, bidding, and construction of



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1a facility.
2    "Public utility" has the same definition as found in
3Section 3-105 of the Public Utilities Act.
4    "Real property" means any interest in land together with
5all structures, fixtures, and improvements thereon, including
6lands under water and riparian rights, any easements,
7covenants, licenses, leases, rights-of-way, uses, and other
8interests, together with any liens, judgments, mortgages, or
9other claims or security interests related to real property.
10    "Renewable energy credit" means a tradable credit that
11represents the environmental attributes of a certain amount of
12energy produced from a renewable energy resource.
13    "Renewable energy resources" includes energy and its
14associated renewable energy credit or renewable energy credits
15from wind, solar thermal energy, photovoltaic cells and panels,
16biodiesel, anaerobic digestion, crops and untreated and
17unadulterated organic waste biomass, tree waste, hydropower
18that does not involve new construction or significant expansion
19of hydropower dams, and other alternative sources of
20environmentally preferable energy. For purposes of this Act,
21landfill gas produced in the State is considered a renewable
22energy resource. "Renewable energy resources" does not include
23the incineration or burning of tires, garbage, general
24household, institutional, and commercial waste, industrial
25lunchroom or office waste, landscape waste other than tree
26waste, railroad crossties, utility poles, or construction or



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1demolition debris, other than untreated and unadulterated
2waste wood.
3    "Revenue bond" means any bond, note, or other evidence of
4indebtedness issued by the Authority, the principal and
5interest of which is payable solely from revenues or income
6derived from any project or activity of the Agency.
7    "Sequester" means permanent storage of carbon dioxide by
8injecting it into a saline aquifer, a depleted gas reservoir,
9or an oil reservoir, directly or through an enhanced oil
10recovery process that may involve intermediate storage,
11regardless of whether these activities are conducted by a clean
12coal facility, a clean coal SNG facility, a clean coal SNG
13brownfield facility, or a party with which a clean coal
14facility, clean coal SNG facility, or clean coal SNG brownfield
15facility has contracted for such purposes.
16    "Sourcing agreement" means (i) in the case of an electric
17utility, an agreement between the owner of a clean coal
18facility and such electric utility, which agreement shall have
19terms and conditions meeting the requirements of paragraph (3)
20of subsection (d) of Section 1-75, (ii) in the case of an
21alternative retail electric supplier, an agreement between the
22owner of a clean coal facility and such alternative retail
23electric supplier, which agreement shall have terms and
24conditions meeting the requirements of Section 16-115(d)(5) of
25the Public Utilities Act, and (iii) in case of a gas utility,
26an agreement between the owner of a clean coal SNG brownfield



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1facility and the gas utility, which agreement shall have the
2terms and conditions meeting the requirements of subsection
3(h-1) of Section 9-220 of the Public Utilities Act.
4    "Substitute natural gas" or "SNG" means a gas manufactured
5by gasification of hydrocarbon feedstock, which is
6substantially interchangeable in use and distribution with
7conventional natural gas.
8    "Total resource cost test" or "TRC test" means a standard
9that is met if, for an investment in energy efficiency or
10demand-response measures, the benefit-cost ratio is greater
11than one. The benefit-cost ratio is the ratio of the net
12present value of the total benefits of the program to the net
13present value of the total costs as calculated over the
14lifetime of the measures. A total resource cost test compares
15the sum of avoided electric utility costs, representing the
16benefits that accrue to the system and the participant in the
17delivery of those efficiency measures, as well as other
18quantifiable societal benefits, including avoided natural gas
19utility costs, to the sum of all incremental costs of end-use
20measures that are implemented due to the program (including
21both utility and participant contributions), plus costs to
22administer, deliver, and evaluate each demand-side program, to
23quantify the net savings obtained by substituting the
24demand-side program for supply resources. In calculating
25avoided costs of power and energy that an electric utility
26would otherwise have had to acquire, reasonable estimates shall



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1be included of financial costs likely to be imposed by future
2regulations and legislation on emissions of greenhouse gases.
3(Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-491,
4eff. 8-22-11; 97-616, eff. 10-26-11; 97-813, eff. 7-13-12;
598-90, eff. 7-15-13.)
6    Section 99. Effective date. This Act takes effect upon
7becoming law.