Illinois General Assembly - Full Text of HB4236
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Full Text of HB4236  100th General Assembly

HB4236ham002 100TH GENERAL ASSEMBLY

Rep. Reginald Phillips

Filed: 4/20/2018

 

 


 

 


 
10000HB4236ham002LRB100 15343 SMS 38834 a

1
AMENDMENT TO HOUSE BILL 4236

2    AMENDMENT NO. ______. Amend House Bill 4236, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Power Agency Act is amended by
6changing Section 1-75 as follows:
 
7    (20 ILCS 3855/1-75)
8    Sec. 1-75. Planning and Procurement Bureau. The Planning
9and Procurement Bureau has the following duties and
10responsibilities:
11    (a) The Planning and Procurement Bureau shall each year,
12beginning in 2008, develop procurement plans and conduct
13competitive procurement processes in accordance with the
14requirements of Section 16-111.5 of the Public Utilities Act
15for the eligible retail customers of electric utilities that on
16December 31, 2005 provided electric service to at least 100,000

 

 

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1customers in Illinois. Beginning with the delivery year
2commencing on June 1, 2017, the Planning and Procurement Bureau
3shall develop plans and processes for the procurement of zero
4emission credits from zero emission facilities in accordance
5with the requirements of subsection (d-5) of this Section. The
6Planning and Procurement Bureau shall also develop procurement
7plans and conduct competitive procurement processes in
8accordance with the requirements of Section 16-111.5 of the
9Public Utilities Act for the eligible retail customers of small
10multi-jurisdictional electric utilities that (i) on December
1131, 2005 served less than 100,000 customers in Illinois and
12(ii) request a procurement plan for their Illinois
13jurisdictional load. This Section shall not apply to a small
14multi-jurisdictional utility until such time as a small
15multi-jurisdictional utility requests the Agency to prepare a
16procurement plan for their Illinois jurisdictional load. For
17the purposes of this Section, the term "eligible retail
18customers" has the same definition as found in Section
1916-111.5(a) of the Public Utilities Act.
20    Beginning with the plan or plans to be implemented in the
212017 delivery year, the Agency shall no longer include the
22procurement of renewable energy resources in the annual
23procurement plans required by this subsection (a), except as
24provided in subsection (q) of Section 16-111.5 of the Public
25Utilities Act, and shall instead develop a long-term renewable
26resources procurement plan in accordance with subsection (c) of

 

 

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1this Section and Section 16-111.5 of the Public Utilities Act.
2        (1) The Agency shall each year, beginning in 2008, as
3    needed, issue a request for qualifications for experts or
4    expert consulting firms to develop the procurement plans in
5    accordance with Section 16-111.5 of the Public Utilities
6    Act. In order to qualify an expert or expert consulting
7    firm must have:
8            (A) direct previous experience assembling
9        large-scale power supply plans or portfolios for
10        end-use customers;
11            (B) an advanced degree in economics, mathematics,
12        engineering, risk management, or a related area of
13        study;
14            (C) 10 years of experience in the electricity
15        sector, including managing supply risk;
16            (D) expertise in wholesale electricity market
17        rules, including those established by the Federal
18        Energy Regulatory Commission and regional transmission
19        organizations;
20            (E) expertise in credit protocols and familiarity
21        with contract protocols;
22            (F) adequate resources to perform and fulfill the
23        required functions and responsibilities; and
24            (G) the absence of a conflict of interest and
25        inappropriate bias for or against potential bidders or
26        the affected electric utilities.

 

 

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

 

 

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1    consideration to develop the procurement plans and to serve
2    as the procurement administrator. The Agency shall also
3    provide each qualified expert's or expert consulting
4    firm's response to the request for qualifications. All
5    information provided under this subparagraph shall also be
6    provided to the Commission. The Agency may provide by rule
7    for fees associated with supplying the information to
8    utilities and other interested parties. These parties
9    shall, within 5 business days, notify the Agency in writing
10    if they object to any experts or expert consulting firms on
11    the lists. Objections shall be based on:
12            (A) failure to satisfy qualification criteria;
13            (B) identification of a conflict of interest; or
14            (C) evidence of inappropriate bias for or against
15        potential bidders or the affected utilities.
16        The Agency shall remove experts or expert consulting
17    firms from the lists within 10 days if there is a
18    reasonable basis for an objection and provide the updated
19    lists to the affected utilities and other interested
20    parties. If the Agency fails to remove an expert or expert
21    consulting firm from a list, an objecting party may seek
22    review by the Commission within 5 days thereafter by filing
23    a petition, and the Commission shall render a ruling on the
24    petition within 10 days. There is no right of appeal of the
25    Commission's ruling.
26        (4) The Agency shall issue requests for proposals to

 

 

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1    the qualified experts or expert consulting firms to develop
2    a procurement plan for the affected utilities and to serve
3    as procurement administrator.
4        (5) The Agency shall select an expert or expert
5    consulting firm to develop procurement plans based on the
6    proposals submitted and shall award contracts of up to 5
7    years to those selected.
8        (6) The Agency shall select an expert or expert
9    consulting firm, with approval of the Commission, to serve
10    as procurement administrator based on the proposals
11    submitted. If the Commission rejects, within 5 days, the
12    Agency's selection, the Agency shall submit another
13    recommendation within 3 days based on the proposals
14    submitted. The Agency shall award a 5-year contract to the
15    expert or expert consulting firm so selected with
16    Commission approval.
17    (b) The experts or expert consulting firms retained by the
18Agency shall, as appropriate, prepare procurement plans, and
19conduct a competitive procurement process as prescribed in
20Section 16-111.5 of the Public Utilities Act, to ensure
21adequate, reliable, affordable, efficient, and environmentally
22sustainable electric service at the lowest total cost over
23time, taking into account any benefits of price stability, for
24eligible retail customers of electric utilities that on
25December 31, 2005 provided electric service to at least 100,000
26customers in the State of Illinois, and for eligible Illinois

 

 

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1retail customers of small multi-jurisdictional electric
2utilities that (i) on December 31, 2005 served less than
3100,000 customers in Illinois and (ii) request a procurement
4plan for their Illinois jurisdictional load.
5    (c) Renewable portfolio standard.
6        (1)(A) The Agency shall develop a long-term renewable
7    resources procurement plan that shall include procurement
8    programs and competitive procurement events necessary to
9    meet the goals set forth in this subsection (c). The
10    initial long-term renewable resources procurement plan
11    shall be released for comment no later than 160 days after
12    June 1, 2017 (the effective date of Public Act 99-906) this
13    amendatory Act of the 99th General Assembly. The Agency
14    shall review, and may revise on an expedited basis, the
15    long-term renewable resources procurement plan at least
16    every 2 years, which shall be conducted in conjunction with
17    the procurement plan under Section 16-111.5 of the Public
18    Utilities Act to the extent practicable to minimize
19    administrative expense. The long-term renewable resources
20    procurement plans shall be subject to review and approval
21    by the Commission under Section 16-111.5 of the Public
22    Utilities Act.
23        (B) Subject to subparagraph (F) of this paragraph (1),
24    the long-term renewable resources procurement plan shall
25    include the goals for procurement of renewable energy
26    credits to meet at least the following overall percentages:

 

 

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1    13% by the 2017 delivery year; increasing by at least 1.5%
2    each delivery year thereafter to at least 25% by the 2025
3    delivery year; and continuing at no less than 25% for each
4    delivery year thereafter. In the event of a conflict
5    between these goals and the new wind and new photovoltaic
6    procurement requirements described in items (i) through
7    (iii) of subparagraph (C) of this paragraph (1), the
8    long-term plan shall prioritize compliance with the new
9    wind and new photovoltaic procurement requirements
10    described in items (i) through (iii) of subparagraph (C) of
11    this paragraph (1) over the annual percentage targets
12    described in this subparagraph (B).
13        For the delivery year beginning June 1, 2017, the
14    procurement plan shall include cost-effective renewable
15    energy resources equal to at least 13% of each utility's
16    load for eligible retail customers and 13% of the
17    applicable portion of each utility's load for retail
18    customers who are not eligible retail customers, which
19    applicable portion shall equal 50% of the utility's load
20    for retail customers who are not eligible retail customers
21    on February 28, 2017.
22        For the delivery year beginning June 1, 2018, the
23    procurement plan shall include cost-effective renewable
24    energy resources equal to at least 14.5% of each utility's
25    load for eligible retail customers and 14.5% of the
26    applicable portion of each utility's load for retail

 

 

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1    customers who are not eligible retail customers, which
2    applicable portion shall equal 75% of the utility's load
3    for retail customers who are not eligible retail customers
4    on February 28, 2017.
5        For the delivery year beginning June 1, 2019, and for
6    each year thereafter, the procurement plans shall include
7    cost-effective renewable energy resources equal to a
8    minimum percentage of each utility's load for all retail
9    customers as follows: 16% by June 1, 2019; increasing by
10    1.5% each year thereafter to 25% by June 1, 2025; and 25%
11    by June 1, 2026 and each year thereafter.
12        For each delivery year, the Agency shall first
13    recognize each utility's obligations for that delivery
14    year under existing contracts. Any renewable energy
15    credits under existing contracts, including renewable
16    energy credits as part of renewable energy resources, shall
17    be used to meet the goals set forth in this subsection (c)
18    for the delivery year.
19        (C) Of the renewable energy credits procured under this
20    subsection (c), at least 75% shall come from wind and
21    photovoltaic projects. The long-term renewable resources
22    procurement plan described in subparagraph (A) of this
23    paragraph (1) shall include the procurement of renewable
24    energy credits in amounts equal to at least the following:
25            (i) By the end of the 2020 delivery year:
26                At least 2,000,000 renewable energy credits

 

 

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1            for each delivery year shall come from new wind
2            projects; and
3                At least 2,000,000 renewable energy credits
4            for each delivery year shall come from new
5            photovoltaic projects; of that amount, to the
6            extent possible, the Agency shall procure: at
7            least 50% from solar photovoltaic projects using
8            the program outlined in subparagraph (K) of this
9            paragraph (1) from distributed renewable energy
10            generation devices or community renewable
11            generation projects; at least 40% from
12            utility-scale solar projects; at least 2% from
13            brownfield site photovoltaic projects that are not
14            community renewable generation projects; and the
15            remainder shall be determined through the
16            long-term planning process described in
17            subparagraph (A) of this paragraph (1).
18            (ii) By the end of the 2025 delivery year:
19                At least 3,000,000 renewable energy credits
20            for each delivery year shall come from new wind
21            projects; and
22                At least 3,000,000 renewable energy credits
23            for each delivery year shall come from new
24            photovoltaic projects; of that amount, to the
25            extent possible, the Agency shall procure: at
26            least 50% from solar photovoltaic projects using

 

 

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1            the program outlined in subparagraph (K) of this
2            paragraph (1) from distributed renewable energy
3            devices or community renewable generation
4            projects; at least 40% from utility-scale solar
5            projects; at least 2% from brownfield site
6            photovoltaic projects that are not community
7            renewable generation projects; and the remainder
8            shall be determined through the long-term planning
9            process described in subparagraph (A) of this
10            paragraph (1).
11            (iii) By the end of the 2030 delivery year:
12                At least 4,000,000 renewable energy credits
13            for each delivery year shall come from new wind
14            projects; and
15                At least 4,000,000 renewable energy credits
16            for each delivery year shall come from new
17            photovoltaic projects; of that amount, to the
18            extent possible, the Agency shall procure: at
19            least 50% from solar photovoltaic projects using
20            the program outlined in subparagraph (K) of this
21            paragraph (1) from distributed renewable energy
22            devices or community renewable generation
23            projects; at least 40% from utility-scale solar
24            projects; at least 2% from brownfield site
25            photovoltaic projects that are not community
26            renewable generation projects; and the remainder

 

 

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1            shall be determined through the long-term planning
2            process described in subparagraph (A) of this
3            paragraph (1).
4            For purposes of this Section:
5                "New wind projects" means wind renewable
6            energy facilities that are energized after June 1,
7            2017 for the delivery year commencing June 1, 2017
8            or within 3 years after the date the Commission
9            approves contracts for subsequent delivery years.
10                "New photovoltaic projects" means photovoltaic
11            renewable energy facilities that are energized
12            after June 1, 2017. Photovoltaic projects
13            developed under Section 1-56 of this Act shall not
14            apply towards the new photovoltaic project
15            requirements in this subparagraph (C).
16        (D) Renewable energy credits shall be cost effective.
17    For purposes of this subsection (c), "cost effective" means
18    that the costs of procuring renewable energy resources do
19    not cause the limit stated in subparagraph (E) of this
20    paragraph (1) to be exceeded and, for renewable energy
21    credits procured through a competitive procurement event,
22    do not exceed benchmarks based on market prices for like
23    products in the region. For purposes of this subsection
24    (c), "like products" means contracts for renewable energy
25    credits from the same or substantially similar technology,
26    same or substantially similar vintage (new or existing),

 

 

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1    the same or substantially similar quantity, and the same or
2    substantially similar contract length and structure.
3    Benchmarks shall be developed by the procurement
4    administrator, in consultation with the Commission staff,
5    Agency staff, and the procurement monitor and shall be
6    subject to Commission review and approval. If price
7    benchmarks for like products in the region are not
8    available, the procurement administrator shall establish
9    price benchmarks based on publicly available data on
10    regional technology costs and expected current and future
11    regional energy prices. The benchmarks in this Section
12    shall not be used to curtail or otherwise reduce
13    contractual obligations entered into by or through the
14    Agency prior to June 1, 2017 (the effective date of Public
15    Act 99-906) this amendatory Act of the 99th General
16    Assembly.
17        (E) For purposes of this subsection (c), the required
18    procurement of cost-effective renewable energy resources
19    for a particular year commencing prior to June 1, 2017
20    shall be measured as a percentage of the actual amount of
21    electricity (megawatt-hours) supplied by the electric
22    utility to eligible retail customers in the delivery year
23    ending immediately prior to the procurement, and, for
24    delivery years commencing on and after June 1, 2017, the
25    required procurement of cost-effective renewable energy
26    resources for a particular year shall be measured as a

 

 

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1    percentage of the actual amount of electricity
2    (megawatt-hours) delivered by the electric utility in the
3    delivery year ending immediately prior to the procurement,
4    to all retail customers in its service territory. For
5    purposes of this subsection (c), the amount paid per
6    kilowatthour means the total amount paid for electric
7    service expressed on a per kilowatthour basis. For purposes
8    of this subsection (c), the total amount paid for electric
9    service includes without limitation amounts paid for
10    supply, transmission, distribution, surcharges, and add-on
11    taxes.
12        Notwithstanding the requirements of this subsection
13    (c), the total of renewable energy resources procured under
14    the procurement plan for any single year shall be subject
15    to the limitations of this subparagraph (E). Such
16    procurement shall be reduced for all retail customers based
17    on the amount necessary to limit the annual estimated
18    average net increase due to the costs of these resources
19    included in the amounts paid by eligible retail customers
20    in connection with electric service to no more than the
21    greater of 2.015% of the amount paid per kilowatthour by
22    those customers during the year ending May 31, 2007 or the
23    incremental amount per kilowatthour paid for these
24    resources in 2011. To arrive at a maximum dollar amount of
25    renewable energy resources to be procured for the
26    particular delivery year, the resulting per kilowatthour

 

 

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1    amount shall be applied to the actual amount of
2    kilowatthours of electricity delivered, or applicable
3    portion of such amount as specified in paragraph (1) of
4    this subsection (c), as applicable, by the electric utility
5    in the delivery year immediately prior to the procurement
6    to all retail customers in its service territory. The
7    calculations required by this subparagraph (E) shall be
8    made only once for each delivery year at the time that the
9    renewable energy resources are procured. Once the
10    determination as to the amount of renewable energy
11    resources to procure is made based on the calculations set
12    forth in this subparagraph (E) and the contracts procuring
13    those amounts are executed, no subsequent rate impact
14    determinations shall be made and no adjustments to those
15    contract amounts shall be allowed. All costs incurred under
16    such contracts shall be fully recoverable by the electric
17    utility as provided in this Section.
18        (F) If the limitation on the amount of renewable energy
19    resources procured in subparagraph (E) of this paragraph
20    (1) prevents the Agency from meeting all of the goals in
21    this subsection (c), the Agency's long-term plan shall
22    prioritize compliance with the requirements of this
23    subsection (c) regarding renewable energy credits in the
24    following order:
25            (i) renewable energy credits under existing
26        contractual obligations;

 

 

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1            (i-5) funding for the Illinois Solar for All
2        Program, as described in subparagraph (O) of this
3        paragraph (1);
4            (ii) renewable energy credits necessary to comply
5        with the new wind and new photovoltaic procurement
6        requirements described in items (i) through (iii) of
7        subparagraph (C) of this paragraph (1); and
8            (iii) renewable energy credits necessary to meet
9        the remaining requirements of this subsection (c).
10        (G) The following provisions shall apply to the
11    Agency's procurement of renewable energy credits under
12    this subsection (c):
13            (i) Notwithstanding whether a long-term renewable
14        resources procurement plan has been approved, the
15        Agency shall conduct an initial forward procurement
16        for renewable energy credits from new utility-scale
17        wind projects within 160 days after June 1, 2017 (the
18        effective date of Public Act 99-906) this amendatory
19        Act of the 99th General Assembly. For the purposes of
20        this initial forward procurement, the Agency shall
21        solicit 15-year contracts for delivery of 1,000,000
22        renewable energy credits delivered annually from new
23        utility-scale wind projects to begin delivery on June
24        1, 2019, if available, but not later than June 1, 2021.
25        Payments to suppliers of renewable energy credits
26        shall commence upon delivery. Renewable energy credits

 

 

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1        procured under this initial procurement shall be
2        included in the Agency's long-term plan and shall apply
3        to all renewable energy goals in this subsection (c).
4            (ii) Notwithstanding whether a long-term renewable
5        resources procurement plan has been approved, the
6        Agency shall conduct an initial forward procurement
7        for renewable energy credits from new utility-scale
8        solar projects and brownfield site photovoltaic
9        projects within one year after June 1, 2017 (the
10        effective date of Public Act 99-906) this amendatory
11        Act of the 99th General Assembly. For the purposes of
12        this initial forward procurement, the Agency shall
13        solicit 15-year contracts for delivery of 1,000,000
14        renewable energy credits delivered annually from new
15        utility-scale solar projects and brownfield site
16        photovoltaic projects to begin delivery on June 1,
17        2019, if available, but not later than June 1, 2021.
18        The Agency may structure this initial procurement in
19        one or more discrete procurement events. Payments to
20        suppliers of renewable energy credits shall commence
21        upon delivery. Renewable energy credits procured under
22        this initial procurement shall be included in the
23        Agency's long-term plan and shall apply to all
24        renewable energy goals in this subsection (c).
25            (iii) Subsequent forward procurements for
26        utility-scale wind projects shall solicit at least

 

 

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1        1,000,000 renewable energy credits delivered annually
2        per procurement event and shall be planned, scheduled,
3        and designed such that the cumulative amount of
4        renewable energy credits delivered from all new wind
5        projects in each delivery year shall not exceed the
6        Agency's projection of the cumulative amount of
7        renewable energy credits that will be delivered from
8        all new photovoltaic projects, including utility-scale
9        and distributed photovoltaic devices, in the same
10        delivery year at the time scheduled for wind contract
11        delivery.
12            (iv) If, at any time after the time set for
13        delivery of renewable energy credits pursuant to the
14        initial procurements in items (i) and (ii) of this
15        subparagraph (G), the cumulative amount of renewable
16        energy credits projected to be delivered from all new
17        wind projects in a given delivery year exceeds the
18        cumulative amount of renewable energy credits
19        projected to be delivered from all new photovoltaic
20        projects in that delivery year by 200,000 or more
21        renewable energy credits, then the Agency shall within
22        60 days adjust the procurement programs in the
23        long-term renewable resources procurement plan to
24        ensure that the projected cumulative amount of
25        renewable energy credits to be delivered from all new
26        wind projects does not exceed the projected cumulative

 

 

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1        amount of renewable energy credits to be delivered from
2        all new photovoltaic projects by 200,000 or more
3        renewable energy credits, provided that nothing in
4        this Section shall preclude the projected cumulative
5        amount of renewable energy credits to be delivered from
6        all new photovoltaic projects from exceeding the
7        projected cumulative amount of renewable energy
8        credits to be delivered from all new wind projects in
9        each delivery year and provided further that nothing in
10        this item (iv) shall require the curtailment of an
11        executed contract. The Agency shall update, on a
12        quarterly basis, its projection of the renewable
13        energy credits to be delivered from all projects in
14        each delivery year. Notwithstanding anything to the
15        contrary, the Agency may adjust the timing of
16        procurement events conducted under this subparagraph
17        (G). The long-term renewable resources procurement
18        plan shall set forth the process by which the
19        adjustments may be made.
20            (v) All procurements under this subparagraph (G)
21        shall comply with the geographic requirements in
22        subparagraph (I) of this paragraph (1) and shall follow
23        the procurement processes and procedures described in
24        this Section and Section 16-111.5 of the Public
25        Utilities Act to the extent practicable, and these
26        processes and procedures may be expedited to

 

 

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1        accommodate the schedule established by this
2        subparagraph (G).
3        (H) The procurement of renewable energy resources for a
4    given delivery year shall be reduced as described in this
5    subparagraph (H) if an alternative alternate retail
6    electric supplier meets the requirements described in this
7    subparagraph (H).
8            (i) Within 45 days after June 1, 2017 (the
9        effective date of Public Act 99-906) this amendatory
10        Act of the 99th General Assembly, an alternative retail
11        electric supplier or its successor shall submit an
12        informational filing to the Illinois Commerce
13        Commission certifying that, as of December 31, 2015,
14        the alternative retail electric supplier owned one or
15        more electric generating facilities that generates
16        renewable energy resources as defined in Section 1-10
17        of this Act, provided that such facilities are not
18        powered by wind or photovoltaics, and the facilities
19        generate one renewable energy credit for each
20        megawatthour of energy produced from the facility.
21            The informational filing shall identify each
22        facility that was eligible to satisfy the alternative
23        retail electric supplier's obligations under Section
24        16-115D of the Public Utilities Act as described in
25        this item (i).
26            (ii) For a given delivery year, the alternative

 

 

10000HB4236ham002- 21 -LRB100 15343 SMS 38834 a

1        retail electric supplier may elect to supply its retail
2        customers with renewable energy credits from the
3        facility or facilities described in item (i) of this
4        subparagraph (H) that continue to be owned by the
5        alternative retail electric supplier.
6            (iii) The alternative retail electric supplier
7        shall notify the Agency and the applicable utility, no
8        later than February 28 of the year preceding the
9        applicable delivery year or 15 days after June 1, 2017
10        (the effective date of Public Act 99-906) this
11        amendatory Act of the 99th General Assembly, whichever
12        is later, of its election under item (ii) of this
13        subparagraph (H) to supply renewable energy credits to
14        retail customers of the utility. Such election shall
15        identify the amount of renewable energy credits to be
16        supplied by the alternative retail electric supplier
17        to the utility's retail customers and the source of the
18        renewable energy credits identified in the
19        informational filing as described in item (i) of this
20        subparagraph (H), subject to the following
21        limitations:
22                For the delivery year beginning June 1, 2018,
23            the maximum amount of renewable energy credits to
24            be supplied by an alternative retail electric
25            supplier under this subparagraph (H) shall be 68%
26            multiplied by 25% multiplied by 14.5% multiplied

 

 

10000HB4236ham002- 22 -LRB100 15343 SMS 38834 a

1            by the amount of metered electricity
2            (megawatt-hours) delivered by the alternative
3            retail electric supplier to Illinois retail
4            customers during the delivery year ending May 31,
5            2016.
6                For delivery years beginning June 1, 2019 and
7            each year thereafter, the maximum amount of
8            renewable energy credits to be supplied by an
9            alternative retail electric supplier under this
10            subparagraph (H) shall be 68% multiplied by 50%
11            multiplied by 16% multiplied by the amount of
12            metered electricity (megawatt-hours) delivered by
13            the alternative retail electric supplier to
14            Illinois retail customers during the delivery year
15            ending May 31, 2016, provided that the 16% value
16            shall increase by 1.5% each delivery year
17            thereafter to 25% by the delivery year beginning
18            June 1, 2025, and thereafter the 25% value shall
19            apply to each delivery year.
20            For each delivery year, the total amount of
21        renewable energy credits supplied by all alternative
22        retail electric suppliers under this subparagraph (H)
23        shall not exceed 9% of the Illinois target renewable
24        energy credit quantity. The Illinois target renewable
25        energy credit quantity for the delivery year beginning
26        June 1, 2018 is 14.5% multiplied by the total amount of

 

 

10000HB4236ham002- 23 -LRB100 15343 SMS 38834 a

1        metered electricity (megawatt-hours) delivered in the
2        delivery year immediately preceding that delivery
3        year, provided that the 14.5% shall increase by 1.5%
4        each delivery year thereafter to 25% by the delivery
5        year beginning June 1, 2025, and thereafter the 25%
6        value shall apply to each delivery year.
7            If the requirements set forth in items (i) through
8        (iii) of this subparagraph (H) are met, the charges
9        that would otherwise be applicable to the retail
10        customers of the alternative retail electric supplier
11        under paragraph (6) of this subsection (c) for the
12        applicable delivery year shall be reduced by the ratio
13        of the quantity of renewable energy credits supplied by
14        the alternative retail electric supplier compared to
15        that supplier's target renewable energy credit
16        quantity. The supplier's target renewable energy
17        credit quantity for the delivery year beginning June 1,
18        2018 is 14.5% multiplied by the total amount of metered
19        electricity (megawatt-hours) delivered by the
20        alternative retail supplier in that delivery year,
21        provided that the 14.5% shall increase by 1.5% each
22        delivery year thereafter to 25% by the delivery year
23        beginning June 1, 2025, and thereafter the 25% value
24        shall apply to each delivery year.
25            On or before April 1 of each year, the Agency shall
26        annually publish a report on its website that

 

 

10000HB4236ham002- 24 -LRB100 15343 SMS 38834 a

1        identifies the aggregate amount of renewable energy
2        credits supplied by alternative retail electric
3        suppliers under this subparagraph (H).
4        (I) The Agency shall design its long-term renewable
5    energy procurement plan to maximize the State's interest in
6    the health, safety, and welfare of its residents, including
7    but not limited to minimizing sulfur dioxide, nitrogen
8    oxide, particulate matter and other pollution that
9    adversely affects public health in this State, increasing
10    fuel and resource diversity in this State, enhancing the
11    reliability and resiliency of the electricity distribution
12    system in this State, meeting goals to limit carbon dioxide
13    emissions under federal or State law, and contributing to a
14    cleaner and healthier environment for the citizens of this
15    State. In order to further these legislative purposes,
16    renewable energy credits shall be eligible to be counted
17    toward the renewable energy requirements of this
18    subsection (c) if they are generated from facilities
19    located in this State. The Agency may qualify renewable
20    energy credits from facilities located in states adjacent
21    to Illinois if the generator demonstrates and the Agency
22    determines that the operation of such facility or
23    facilities will help promote the State's interest in the
24    health, safety, and welfare of its residents based on the
25    public interest criteria described above. To ensure that
26    the public interest criteria are applied to the procurement

 

 

10000HB4236ham002- 25 -LRB100 15343 SMS 38834 a

1    and given full effect, the Agency's long-term procurement
2    plan shall describe in detail how each public interest
3    factor shall be considered and weighted for facilities
4    located in states adjacent to Illinois.
5        (J) In order to promote the competitive development of
6    renewable energy resources in furtherance of the State's
7    interest in the health, safety, and welfare of its
8    residents, renewable energy credits shall not be eligible
9    to be counted toward the renewable energy requirements of
10    this subsection (c) if they are sourced from a generating
11    unit whose costs were being recovered through rates
12    regulated by this State or any other state or states on or
13    after January 1, 2017. Each contract executed to purchase
14    renewable energy credits under this subsection (c) shall
15    provide for the contract's termination if the costs of the
16    generating unit supplying the renewable energy credits
17    subsequently begin to be recovered through rates regulated
18    by this State or any other state or states; and each
19    contract shall further provide that, in that event, the
20    supplier of the credits must return 110% of all payments
21    received under the contract. Amounts returned under the
22    requirements of this subparagraph (J) shall be retained by
23    the utility and all of these amounts shall be used for the
24    procurement of additional renewable energy credits from
25    new wind or new photovoltaic resources as defined in this
26    subsection (c). The long-term plan shall provide that these

 

 

10000HB4236ham002- 26 -LRB100 15343 SMS 38834 a

1    renewable energy credits shall be procured in the next
2    procurement event.
3        Notwithstanding the limitations of this subparagraph
4    (J), renewable energy credits sourced from generating
5    units that are constructed, purchased, owned, or leased by
6    an electric utility as part of an approved project,
7    program, or pilot under Section 1-56 of this Act shall be
8    eligible to be counted toward the renewable energy
9    requirements of this subsection (c), regardless of how the
10    costs of these units are recovered.
11        (K) The long-term renewable resources procurement plan
12    developed by the Agency in accordance with subparagraph (A)
13    of this paragraph (1) shall include an Adjustable Block
14    program for the procurement of renewable energy credits
15    from new photovoltaic projects that are distributed
16    renewable energy generation devices or new photovoltaic
17    community renewable generation projects. The Adjustable
18    Block program shall be designed to provide a transparent
19    schedule of prices and quantities to enable the
20    photovoltaic market to scale up and for renewable energy
21    credit prices to adjust at a predictable rate over time.
22    The prices set by the Adjustable Block program can be
23    reflected as a set value or as the product of a formula.
24        The Adjustable Block program shall include for each
25    category of eligible projects: a schedule of standard block
26    purchase prices to be offered; a series of steps, with

 

 

10000HB4236ham002- 27 -LRB100 15343 SMS 38834 a

1    associated nameplate capacity and purchase prices that
2    adjust from step to step; and automatic opening of the next
3    step as soon as the nameplate capacity and available
4    purchase prices for an open step are fully committed or
5    reserved. Only projects energized on or after June 1, 2017
6    shall be eligible for the Adjustable Block program. For
7    each block group the Agency shall determine the number of
8    blocks, the amount of generation capacity in each block,
9    and the purchase price for each block, provided that the
10    purchase price provided and the total amount of generation
11    in all blocks for all block groups shall be sufficient to
12    meet the goals in this subsection (c). The Agency may
13    periodically review its prior decisions establishing the
14    number of blocks, the amount of generation capacity in each
15    block, and the purchase price for each block, and may
16    propose, on an expedited basis, changes to these previously
17    set values, including but not limited to redistributing
18    these amounts and the available funds as necessary and
19    appropriate, subject to Commission approval as part of the
20    periodic plan revision process described in Section
21    16-111.5 of the Public Utilities Act. The Agency may define
22    different block sizes, purchase prices, or other distinct
23    terms and conditions for projects located in different
24    utility service territories if the Agency deems it
25    necessary to meet the goals in this subsection (c).
26        The Adjustable Block program shall include at least the

 

 

10000HB4236ham002- 28 -LRB100 15343 SMS 38834 a

1    following block groups in at least the following amounts,
2    which may be adjusted upon review by the Agency and
3    approval by the Commission as described in this
4    subparagraph (K):
5            (i) At least 25% from distributed renewable energy
6        generation devices with a nameplate capacity of no more
7        than 10 kilowatts.
8            (ii) At least 25% from distributed renewable
9        energy generation devices with a nameplate capacity of
10        more than 10 kilowatts and no more than 2,000
11        kilowatts. The Agency may create sub-categories within
12        this category to account for the differences between
13        projects for small commercial customers, large
14        commercial customers, and public or non-profit
15        customers.
16            (iii) At least 25% from photovoltaic community
17        renewable generation projects.
18            (iv) The remaining 25% shall be allocated as
19        specified by the Agency in the long-term renewable
20        resources procurement plan.
21        The Adjustable Block program shall be designed to
22    ensure that renewable energy credits are procured from
23    photovoltaic distributed renewable energy generation
24    devices and new photovoltaic community renewable energy
25    generation projects in diverse locations and are not
26    concentrated in a few geographic areas.

 

 

10000HB4236ham002- 29 -LRB100 15343 SMS 38834 a

1        (L) The procurement of photovoltaic renewable energy
2    credits under items (i) through (iv) of subparagraph (K) of
3    this paragraph (1) shall be subject to the following
4    contract and payment terms:
5            (i) The Agency shall procure contracts of at least
6        15 years in length.
7            (ii) For those renewable energy credits that
8        qualify and are procured under item (i) of subparagraph
9        (K) of this paragraph (1), the renewable energy credit
10        purchase price shall be paid in full by the contracting
11        utilities at the time that the facility producing the
12        renewable energy credits is interconnected at the
13        distribution system level of the utility and
14        energized. The electric utility shall receive and
15        retire all renewable energy credits generated by the
16        project for the first 15 years of operation.
17            (iii) For those renewable energy credits that
18        qualify and are procured under item (ii) and (iii) of
19        subparagraph (K) of this paragraph (1) and any
20        additional categories of distributed generation
21        included in the long-term renewable resources
22        procurement plan and approved by the Commission, 20
23        percent of the renewable energy credit purchase price
24        shall be paid by the contracting utilities at the time
25        that the facility producing the renewable energy
26        credits is interconnected at the distribution system

 

 

10000HB4236ham002- 30 -LRB100 15343 SMS 38834 a

1        level of the utility and energized. The remaining
2        portion shall be paid ratably over the subsequent
3        4-year period. The electric utility shall receive and
4        retire all renewable energy credits generated by the
5        project for the first 15 years of operation.
6            (iv) Each contract shall include provisions to
7        ensure the delivery of the renewable energy credits for
8        the full term of the contract.
9            (v) The utility shall be the counterparty to the
10        contracts executed under this subparagraph (L) that
11        are approved by the Commission under the process
12        described in Section 16-111.5 of the Public Utilities
13        Act. No contract shall be executed for an amount that
14        is less than one renewable energy credit per year.
15            (vi) If, at any time, approved applications for the
16        Adjustable Block program exceed funds collected by the
17        electric utility or would cause the Agency to exceed
18        the limitation described in subparagraph (E) of this
19        paragraph (1) on the amount of renewable energy
20        resources that may be procured, then the Agency shall
21        consider future uncommitted funds to be reserved for
22        these contracts on a first-come, first-served basis,
23        with the delivery of renewable energy credits required
24        beginning at the time that the reserved funds become
25        available.
26            (vii) Nothing in this Section shall require the

 

 

10000HB4236ham002- 31 -LRB100 15343 SMS 38834 a

1        utility to advance any payment or pay any amounts that
2        exceed the actual amount of revenues collected by the
3        utility under paragraph (6) of this subsection (c) and
4        subsection (k) of Section 16-108 of the Public
5        Utilities Act, and contracts executed under this
6        Section shall expressly incorporate this limitation.
7        (M) The Agency shall be authorized to retain one or
8    more experts or expert consulting firms to develop,
9    administer, implement, operate, and evaluate the
10    Adjustable Block program described in subparagraph (K) of
11    this paragraph (1), and the Agency shall retain the
12    consultant or consultants in the same manner, to the extent
13    practicable, as the Agency retains others to administer
14    provisions of this Act, including, but not limited to, the
15    procurement administrator. The selection of experts and
16    expert consulting firms and the procurement process
17    described in this subparagraph (M) are exempt from the
18    requirements of Section 20-10 of the Illinois Procurement
19    Code, under Section 20-10 of that Code. The Agency shall
20    strive to minimize administrative expenses in the
21    implementation of the Adjustable Block program.
22        The Agency and its consultant or consultants shall
23    monitor block activity, share program activity with
24    stakeholders and conduct regularly scheduled meetings to
25    discuss program activity and market conditions. If
26    necessary, the Agency may make prospective administrative

 

 

10000HB4236ham002- 32 -LRB100 15343 SMS 38834 a

1    adjustments to the Adjustable Block program design, such as
2    redistributing available funds or making adjustments to
3    purchase prices as necessary to achieve the goals of this
4    subsection (c). Program modifications to any price,
5    capacity block, or other program element that do not
6    deviate from the Commission's approved value by more than
7    25% shall take effect immediately and are not subject to
8    Commission review and approval. Program modifications to
9    any price, capacity block, or other program element that
10    deviate more than 25% from the Commission's approved value
11    must be approved by the Commission as a long-term plan
12    amendment under Section 16-111.5 of the Public Utilities
13    Act. The Agency shall consider stakeholder feedback when
14    making adjustments to the Adjustable Block design and shall
15    notify stakeholders in advance of any planned changes.
16        (N) The long-term renewable resources procurement plan
17    required by this subsection (c) shall include a community
18    renewable generation program. The Agency shall establish
19    the terms, conditions, and program requirements for
20    community renewable generation projects with a goal to
21    expand renewable energy generating facility access to a
22    broader group of energy consumers, to ensure robust
23    participation opportunities for residential and small
24    commercial customers and those who cannot install
25    renewable energy on their own properties. Any plan approved
26    by the Commission shall allow subscriptions to community

 

 

10000HB4236ham002- 33 -LRB100 15343 SMS 38834 a

1    renewable generation projects to be portable and
2    transferable. For purposes of this subparagraph (N),
3    "portable" means that subscriptions may be retained by the
4    subscriber even if the subscriber relocates or changes its
5    address within the same utility service territory; and
6    "transferable" means that a subscriber may assign or sell
7    subscriptions to another person within the same utility
8    service territory.
9        Electric utilities shall provide a monetary credit to a
10    subscriber's subsequent bill for service for the
11    proportional output of a community renewable generation
12    project attributable to that subscriber as specified in
13    Section 16-107.5 of the Public Utilities Act.
14        The Agency shall purchase renewable energy credits
15    from subscribed shares of photovoltaic community renewable
16    generation projects through the Adjustable Block program
17    described in subparagraph (K) of this paragraph (1) or
18    through the Illinois Solar for All Program described in
19    Section 1-56 of this Act. The electric utility shall
20    purchase any unsubscribed energy from community renewable
21    generation projects that are Qualifying Facilities ("QF")
22    under the electric utility's tariff for purchasing the
23    output from QFs under Public Utilities Regulatory Policies
24    Act of 1978.
25        The owners of and any subscribers to a community
26    renewable generation project shall not be considered

 

 

10000HB4236ham002- 34 -LRB100 15343 SMS 38834 a

1    public utilities or alternative retail electricity
2    suppliers under the Public Utilities Act solely as a result
3    of their interest in or subscription to a community
4    renewable generation project and shall not be required to
5    become an alternative retail electric supplier by
6    participating in a community renewable generation project
7    with a public utility.
8        (O) For the delivery year beginning June 1, 2018, the
9    long-term renewable resources procurement plan required by
10    this subsection (c) shall provide for the Agency to procure
11    contracts to continue offering the Illinois Solar for All
12    Program described in subsection (b) of Section 1-56 of this
13    Act, and the contracts approved by the Commission shall be
14    executed by the utilities that are subject to this
15    subsection (c). The long-term renewable resources
16    procurement plan shall allocate 5% of the funds available
17    under the plan for the applicable delivery year, or
18    $10,000,000 per delivery year, whichever is greater, to
19    fund the programs, and the plan shall determine the amount
20    of funding to be apportioned to the programs identified in
21    subsection (b) of Section 1-56 of this Act; provided that
22    for the delivery years beginning June 1, 2017, June 1,
23    2021, and June 1, 2025, the long-term renewable resources
24    procurement plan shall allocate 10% of the funds available
25    under the plan for the applicable delivery year, or
26    $20,000,000 per delivery year, whichever is greater, and

 

 

10000HB4236ham002- 35 -LRB100 15343 SMS 38834 a

1    $10,000,000 of such funds in such year shall be used by an
2    electric utility that serves more than 3,000,000 retail
3    customers in the State to implement a Commission-approved
4    plan under Section 16-108.12 of the Public Utilities Act.
5    In making the determinations required under this
6    subparagraph (O), the Commission shall consider the
7    experience and performance under the programs and any
8    evaluation reports. The Commission shall also provide for
9    an independent evaluation of those programs on a periodic
10    basis that are funded under this subparagraph (O).
11        (2) (Blank).
12        (3) (Blank).
13        (4) The electric utility shall retire all renewable
14    energy credits used to comply with the standard.
15        (5) Beginning with the 2010 delivery year and ending
16    June 1, 2017, an electric utility subject to this
17    subsection (c) shall apply the lesser of the maximum
18    alternative compliance payment rate or the most recent
19    estimated alternative compliance payment rate for its
20    service territory for the corresponding compliance period,
21    established pursuant to subsection (d) of Section 16-115D
22    of the Public Utilities Act to its retail customers that
23    take service pursuant to the electric utility's hourly
24    pricing tariff or tariffs. The electric utility shall
25    retain all amounts collected as a result of the application
26    of the alternative compliance payment rate or rates to such

 

 

10000HB4236ham002- 36 -LRB100 15343 SMS 38834 a

1    customers, and, beginning in 2011, the utility shall
2    include in the information provided under item (1) of
3    subsection (d) of Section 16-111.5 of the Public Utilities
4    Act the amounts collected under the alternative compliance
5    payment rate or rates for the prior year ending May 31.
6    Notwithstanding any limitation on the procurement of
7    renewable energy resources imposed by item (2) of this
8    subsection (c), the Agency shall increase its spending on
9    the purchase of renewable energy resources to be procured
10    by the electric utility for the next plan year by an amount
11    equal to the amounts collected by the utility under the
12    alternative compliance payment rate or rates in the prior
13    year ending May 31.
14        (6) The electric utility shall be entitled to recover
15    all of its costs associated with the procurement of
16    renewable energy credits under plans approved under this
17    Section and Section 16-111.5 of the Public Utilities Act.
18    These costs shall include associated reasonable expenses
19    for implementing the procurement programs, including, but
20    not limited to, the costs of administering and evaluating
21    the Adjustable Block program, through an automatic
22    adjustment clause tariff in accordance with subsection (k)
23    of Section 16-108 of the Public Utilities Act.
24        (7) Renewable energy credits procured from new
25    photovoltaic projects or new distributed renewable energy
26    generation devices under this Section after June 1, 2017

 

 

10000HB4236ham002- 37 -LRB100 15343 SMS 38834 a

1    (the effective date of Public Act 99-906) this amendatory
2    Act of the 99th General Assembly must be procured from
3    devices installed by a qualified person in compliance with
4    the requirements of Section 16-128A of the Public Utilities
5    Act and any rules or regulations adopted thereunder.
6        In meeting the renewable energy requirements of this
7    subsection (c), to the extent feasible and consistent with
8    State and federal law, the renewable energy credit
9    procurements, Adjustable Block solar program, and
10    community renewable generation program shall provide
11    employment opportunities for all segments of the
12    population and workforce, including minority-owned and
13    female-owned business enterprises, and shall not,
14    consistent with State and federal law, discriminate based
15    on race or socioeconomic status.
16    (d) Clean coal portfolio standard.
17        (1) The procurement plans shall include electricity
18    generated using clean coal. Each utility shall enter into
19    one or more sourcing agreements with the initial clean coal
20    facility, as provided in paragraph (3) of this subsection
21    (d), covering electricity generated by the initial clean
22    coal facility representing at least 5% of each utility's
23    total supply to serve the load of eligible retail customers
24    in 2015 and each year thereafter, as described in paragraph
25    (3) of this subsection (d), subject to the limits specified
26    in paragraph (2) of this subsection (d). It is the goal of

 

 

10000HB4236ham002- 38 -LRB100 15343 SMS 38834 a

1    the State that by January 1, 2025, 25% of the electricity
2    used in the State shall be generated by cost-effective
3    clean coal facilities. For purposes of this subsection (d),
4    "cost-effective" means that the expenditures pursuant to
5    such sourcing agreements do not cause the limit stated in
6    paragraph (2) of this subsection (d) to be exceeded and do
7    not exceed cost-based benchmarks, which shall be developed
8    to assess all expenditures pursuant to such sourcing
9    agreements covering electricity generated by clean coal
10    facilities, other than the initial clean coal facility, by
11    the procurement administrator, in consultation with the
12    Commission staff, Agency staff, and the procurement
13    monitor and shall be subject to Commission review and
14    approval.
15        A utility party to a sourcing agreement shall
16    immediately retire any emission credits that it receives in
17    connection with the electricity covered by such agreement.
18        Utilities shall maintain adequate records documenting
19    the purchases under the sourcing agreement to comply with
20    this subsection (d) and shall file an accounting with the
21    load forecast that must be filed with the Agency by July 15
22    of each year, in accordance with subsection (d) of Section
23    16-111.5 of the Public Utilities Act.
24        A utility shall be deemed to have complied with the
25    clean coal portfolio standard specified in this subsection
26    (d) if the utility enters into a sourcing agreement as

 

 

10000HB4236ham002- 39 -LRB100 15343 SMS 38834 a

1    required by this subsection (d).
2        (2) For purposes of this subsection (d), the required
3    execution of sourcing agreements with the initial clean
4    coal facility for a particular year shall be measured as a
5    percentage of the actual amount of electricity
6    (megawatt-hours) supplied by the electric utility to
7    eligible retail customers in the planning year ending
8    immediately prior to the agreement's execution. For
9    purposes of this subsection (d), the amount paid per
10    kilowatthour means the total amount paid for electric
11    service expressed on a per kilowatthour basis. For purposes
12    of this subsection (d), the total amount paid for electric
13    service includes without limitation amounts paid for
14    supply, transmission, distribution, surcharges and add-on
15    taxes.
16        Notwithstanding the requirements of this subsection
17    (d), the total amount paid under sourcing agreements with
18    clean coal facilities pursuant to the procurement plan for
19    any given year shall be reduced by an amount necessary to
20    limit the annual estimated average net increase due to the
21    costs of these resources included in the amounts paid by
22    eligible retail customers in connection with electric
23    service to:
24            (A) in 2010, no more than 0.5% of the amount paid
25        per kilowatthour by those customers during the year
26        ending May 31, 2009;

 

 

10000HB4236ham002- 40 -LRB100 15343 SMS 38834 a

1            (B) in 2011, the greater of an additional 0.5% of
2        the amount paid per kilowatthour by those customers
3        during the year ending May 31, 2010 or 1% of the amount
4        paid per kilowatthour by those customers during the
5        year ending May 31, 2009;
6            (C) in 2012, the greater of an additional 0.5% of
7        the amount paid per kilowatthour by those customers
8        during the year ending May 31, 2011 or 1.5% of the
9        amount paid per kilowatthour by those customers during
10        the year ending May 31, 2009;
11            (D) in 2013, the greater of an additional 0.5% of
12        the amount paid per kilowatthour by those customers
13        during the year ending May 31, 2012 or 2% of the amount
14        paid per kilowatthour by those customers during the
15        year ending May 31, 2009; and
16            (E) thereafter, the total amount paid under
17        sourcing agreements with clean coal facilities
18        pursuant to the procurement plan for any single year
19        shall be reduced by an amount necessary to limit the
20        estimated average net increase due to the cost of these
21        resources included in the amounts paid by eligible
22        retail customers in connection with electric service
23        to no more than the greater of (i) 2.015% of the amount
24        paid per kilowatthour by those customers during the
25        year ending May 31, 2009 or (ii) the incremental amount
26        per kilowatthour paid for these resources in 2013.

 

 

10000HB4236ham002- 41 -LRB100 15343 SMS 38834 a

1        These requirements may be altered only as provided by
2        statute.
3        No later than June 30, 2015, the Commission shall
4    review the limitation on the total amount paid under
5    sourcing agreements, if any, with clean coal facilities
6    pursuant to this subsection (d) and report to the General
7    Assembly its findings as to whether that limitation unduly
8    constrains the amount of electricity generated by
9    cost-effective clean coal facilities that is covered by
10    sourcing agreements.
11        (3) Initial clean coal facility. In order to promote
12    development of clean coal facilities in Illinois, each
13    electric utility subject to this Section shall execute a
14    sourcing agreement to source electricity from a proposed
15    clean coal facility in Illinois (the "initial clean coal
16    facility") that will have a nameplate capacity of at least
17    500 MW when commercial operation commences, that has a
18    final Clean Air Act permit on June 1, 2009 (the effective
19    date of Public Act 95-1027) this amendatory Act of the 95th
20    General Assembly, and that will meet the definition of
21    clean coal facility in Section 1-10 of this Act when
22    commercial operation commences. The sourcing agreements
23    with this initial clean coal facility shall be subject to
24    both approval of the initial clean coal facility by the
25    General Assembly and satisfaction of the requirements of
26    paragraph (4) of this subsection (d) and shall be executed

 

 

10000HB4236ham002- 42 -LRB100 15343 SMS 38834 a

1    within 90 days after any such approval by the General
2    Assembly. The Agency and the Commission shall have
3    authority to inspect all books and records associated with
4    the initial clean coal facility during the term of such a
5    sourcing agreement. A utility's sourcing agreement for
6    electricity produced by the initial clean coal facility
7    shall include:
8            (A) a formula contractual price (the "contract
9        price") approved pursuant to paragraph (4) of this
10        subsection (d), which shall:
11                (i) be determined using a cost of service
12            methodology employing either a level or deferred
13            capital recovery component, based on a capital
14            structure consisting of 45% equity and 55% debt,
15            and a return on equity as may be approved by the
16            Federal Energy Regulatory Commission, which in any
17            case may not exceed the lower of 11.5% or the rate
18            of return approved by the General Assembly
19            pursuant to paragraph (4) of this subsection (d);
20            and
21                (ii) provide that all miscellaneous net
22            revenue, including but not limited to net revenue
23            from the sale of emission allowances, if any,
24            substitute natural gas, if any, grants or other
25            support provided by the State of Illinois or the
26            United States Government, firm transmission

 

 

10000HB4236ham002- 43 -LRB100 15343 SMS 38834 a

1            rights, if any, by-products produced by the
2            facility, energy or capacity derived from the
3            facility and not covered by a sourcing agreement
4            pursuant to paragraph (3) of this subsection (d) or
5            item (5) of subsection (d) of Section 16-115 of the
6            Public Utilities Act, whether generated from the
7            synthesis gas derived from coal, from SNG, or from
8            natural gas, shall be credited against the revenue
9            requirement for this initial clean coal facility;
10            (B) power purchase provisions, which shall:
11                (i) provide that the utility party to such
12            sourcing agreement shall pay the contract price
13            for electricity delivered under such sourcing
14            agreement;
15                (ii) require delivery of electricity to the
16            regional transmission organization market of the
17            utility that is party to such sourcing agreement;
18                (iii) require the utility party to such
19            sourcing agreement to buy from the initial clean
20            coal facility in each hour an amount of energy
21            equal to all clean coal energy made available from
22            the initial clean coal facility during such hour
23            times a fraction, the numerator of which is such
24            utility's retail market sales of electricity
25            (expressed in kilowatthours sold) in the State
26            during the prior calendar month and the

 

 

10000HB4236ham002- 44 -LRB100 15343 SMS 38834 a

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

 

 

10000HB4236ham002- 45 -LRB100 15343 SMS 38834 a

1            during the prior calendar month and the
2            denominator of which is the total retail market
3            sales of electricity (expressed in kilowatthours
4            sold) in the State by utilities during such prior
5            month and the sales of electricity (expressed in
6            kilowatthours sold) in the State by alternative
7            retail electric suppliers during such prior month
8            that are subject to the requirements of this
9            subsection (d) and paragraph (5) of subsection (d)
10            of Section 16-115 of the Public Utilities Act,
11            provided that the amount paid by the utility in any
12            year will be limited by paragraph (2) of this
13            subsection (d);
14                (ii) provide that the utility's payment
15            obligation in respect of the quantity of
16            electricity determined pursuant to the preceding
17            clause (i) shall be limited to an amount equal to
18            (1) the difference between the contract price
19            determined pursuant to subparagraph (A) of
20            paragraph (3) of this subsection (d) and the
21            day-ahead price for electricity delivered to the
22            regional transmission organization market of the
23            utility that is party to such sourcing agreement
24            (or any successor delivery point at which such
25            utility's supply obligations are financially
26            settled on an hourly basis) (the "reference

 

 

10000HB4236ham002- 46 -LRB100 15343 SMS 38834 a

1            price") on the day preceding the day on which the
2            electricity is delivered to the initial clean coal
3            facility busbar, multiplied by (2) the quantity of
4            electricity determined pursuant to the preceding
5            clause (i); and
6                (iii) not require the utility to take physical
7            delivery of the electricity produced by the
8            facility;
9            (D) general provisions, which shall:
10                (i) specify a term of no more than 30 years,
11            commencing on the commercial operation date of the
12            facility;
13                (ii) provide that utilities shall maintain
14            adequate records documenting purchases under the
15            sourcing agreements entered into to comply with
16            this subsection (d) and shall file an accounting
17            with the load forecast that must be filed with the
18            Agency by July 15 of each year, in accordance with
19            subsection (d) of Section 16-111.5 of the Public
20            Utilities Act;
21                (iii) provide that all costs associated with
22            the initial clean coal facility will be
23            periodically reported to the Federal Energy
24            Regulatory Commission and to purchasers in
25            accordance with applicable laws governing
26            cost-based wholesale power contracts;

 

 

10000HB4236ham002- 47 -LRB100 15343 SMS 38834 a

1                (iv) permit the Illinois Power Agency to
2            assume ownership of the initial clean coal
3            facility, without monetary consideration and
4            otherwise on reasonable terms acceptable to the
5            Agency, if the Agency so requests no less than 3
6            years prior to the end of the stated contract term;
7                (v) require the owner of the initial clean coal
8            facility to provide documentation to the
9            Commission each year, starting in the facility's
10            first year of commercial operation, accurately
11            reporting the quantity of carbon emissions from
12            the facility that have been captured and
13            sequestered and report any quantities of carbon
14            released from the site or sites at which carbon
15            emissions were sequestered in prior years, based
16            on continuous monitoring of such sites. If, in any
17            year after the first year of commercial operation,
18            the owner of the facility fails to demonstrate that
19            the initial clean coal facility captured and
20            sequestered at least 50% of the total carbon
21            emissions that the facility would otherwise emit
22            or that sequestration of emissions from prior
23            years has failed, resulting in the release of
24            carbon dioxide into the atmosphere, the owner of
25            the facility must offset excess emissions. Any
26            such carbon offsets must be permanent, additional,

 

 

10000HB4236ham002- 48 -LRB100 15343 SMS 38834 a

1            verifiable, real, located within the State of
2            Illinois, and legally and practicably enforceable.
3            The cost of such offsets for the facility that are
4            not recoverable shall not exceed $15 million in any
5            given year. No costs of any such purchases of
6            carbon offsets may be recovered from a utility or
7            its customers. All carbon offsets purchased for
8            this purpose and any carbon emission credits
9            associated with sequestration of carbon from the
10            facility must be permanently retired. The initial
11            clean coal facility shall not forfeit its
12            designation as a clean coal facility if the
13            facility fails to fully comply with the applicable
14            carbon sequestration requirements in any given
15            year, provided the requisite offsets are
16            purchased. However, the Attorney General, on
17            behalf of the People of the State of Illinois, may
18            specifically enforce the facility's sequestration
19            requirement and the other terms of this contract
20            provision. Compliance with the sequestration
21            requirements and offset purchase requirements
22            specified in paragraph (3) of this subsection (d)
23            shall be reviewed annually by an independent
24            expert retained by the owner of the initial clean
25            coal facility, with the advance written approval
26            of the Attorney General. The Commission may, in the

 

 

10000HB4236ham002- 49 -LRB100 15343 SMS 38834 a

1            course of the review specified in item (vii),
2            reduce the allowable return on equity for the
3            facility if the facility willfully wilfully fails
4            to comply with the carbon capture and
5            sequestration requirements set forth in this item
6            (v);
7                (vi) include limits on, and accordingly
8            provide for modification of, the amount the
9            utility is required to source under the sourcing
10            agreement consistent with paragraph (2) of this
11            subsection (d);
12                (vii) require Commission review: (1) to
13            determine the justness, reasonableness, and
14            prudence of the inputs to the formula referenced in
15            subparagraphs (A)(i) through (A)(iii) of paragraph
16            (3) of this subsection (d), prior to an adjustment
17            in those inputs including, without limitation, the
18            capital structure and return on equity, fuel
19            costs, and other operations and maintenance costs
20            and (2) to approve the costs to be passed through
21            to customers under the sourcing agreement by which
22            the utility satisfies its statutory obligations.
23            Commission review shall occur no less than every 3
24            years, regardless of whether any adjustments have
25            been proposed, and shall be completed within 9
26            months;

 

 

10000HB4236ham002- 50 -LRB100 15343 SMS 38834 a

1                (viii) limit the utility's obligation to such
2            amount as the utility is allowed to recover through
3            tariffs filed with the Commission, provided that
4            neither the clean coal facility nor the utility
5            waives any right to assert federal pre-emption or
6            any other argument in response to a purported
7            disallowance of recovery costs;
8                (ix) limit the utility's or alternative retail
9            electric supplier's obligation to incur any
10            liability until such time as the facility is in
11            commercial operation and generating power and
12            energy and such power and energy is being delivered
13            to the facility busbar;
14                (x) provide that the owner or owners of the
15            initial clean coal facility, which is the
16            counterparty to such sourcing agreement, shall
17            have the right from time to time to elect whether
18            the obligations of the utility party thereto shall
19            be governed by the power purchase provisions or the
20            contract for differences provisions;
21                (xi) append documentation showing that the
22            formula rate and contract, insofar as they relate
23            to the power purchase provisions, have been
24            approved by the Federal Energy Regulatory
25            Commission pursuant to Section 205 of the Federal
26            Power Act;

 

 

10000HB4236ham002- 51 -LRB100 15343 SMS 38834 a

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

 

 

10000HB4236ham002- 52 -LRB100 15343 SMS 38834 a

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

 

 

10000HB4236ham002- 53 -LRB100 15343 SMS 38834 a

1        based on the facility cost report and the Commission's
2        report, the General Assembly enacts authorizing
3        legislation approving (A) the projected price, stated
4        in cents per kilowatthour, to be charged for
5        electricity generated by the initial clean coal
6        facility, (B) the projected impact on residential and
7        small business customers' bills over the life of the
8        sourcing agreements, and (C) the maximum allowable
9        return on equity for the project; and
10            (iv) Commission review. If the General Assembly
11        enacts authorizing legislation pursuant to
12        subparagraph (iii) approving a sourcing agreement, the
13        Commission shall, within 90 days of such enactment,
14        complete a review of such sourcing agreement. During
15        such time period, the Commission shall implement any
16        directive of the General Assembly, resolve any
17        disputes between the parties to the sourcing agreement
18        concerning the terms of such agreement, approve the
19        form of such agreement, and issue an order finding that
20        the sourcing agreement is prudent and reasonable.
21        The facility cost report shall be prepared as follows:
22            (A) The facility cost report shall be prepared by
23        duly licensed engineering and construction firms
24        detailing the estimated capital costs payable to one or
25        more contractors or suppliers for the engineering,
26        procurement and construction of the components

 

 

10000HB4236ham002- 54 -LRB100 15343 SMS 38834 a

1        comprising the initial clean coal facility and the
2        estimated costs of operation and maintenance of the
3        facility. The facility cost report shall include:
4                (i) an estimate of the capital cost of the core
5            plant based on one or more front end engineering
6            and design studies for the gasification island and
7            related facilities. The core plant shall include
8            all civil, structural, mechanical, electrical,
9            control, and safety systems.
10                (ii) an estimate of the capital cost of the
11            balance of the plant, including any capital costs
12            associated with sequestration of carbon dioxide
13            emissions and all interconnects and interfaces
14            required to operate the facility, such as
15            transmission of electricity, construction or
16            backfeed power supply, pipelines to transport
17            substitute natural gas or carbon dioxide, potable
18            water supply, natural gas supply, water supply,
19            water discharge, landfill, access roads, and coal
20            delivery.
21            The quoted construction costs shall be expressed
22        in nominal dollars as of the date that the quote is
23        prepared and shall include capitalized financing costs
24        during construction, taxes, insurance, and other
25        owner's costs, and an assumed escalation in materials
26        and labor beyond the date as of which the construction

 

 

10000HB4236ham002- 55 -LRB100 15343 SMS 38834 a

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

 

 

10000HB4236ham002- 56 -LRB100 15343 SMS 38834 a

1        design study) shall be expressed in nominal dollars as
2        of the date that the quote is prepared and shall
3        include taxes, insurance, and other owner's costs, and
4        an assumed escalation in materials and labor beyond the
5        date as of which the operating and maintenance cost
6        quote is expressed.
7            (D) The facility cost report shall also include an
8        analysis of the initial clean coal facility's ability
9        to deliver power and energy into the applicable
10        regional transmission organization markets and an
11        analysis of the expected capacity factor for the
12        initial clean coal facility.
13            (E) Amounts paid to third parties unrelated to the
14        owner or owners of the initial clean coal facility to
15        prepare the core plant construction cost quote,
16        including the front end engineering and design study,
17        and the operating and maintenance cost quote will be
18        reimbursed through Coal Development Bonds.
19        (5) Re-powering and retrofitting coal-fired power
20    plants previously owned by Illinois utilities to qualify as
21    clean coal facilities. During the 2009 procurement
22    planning process and thereafter, the Agency and the
23    Commission shall consider sourcing agreements covering
24    electricity generated by power plants that were previously
25    owned by Illinois utilities and that have been or will be
26    converted into clean coal facilities, as defined by Section

 

 

10000HB4236ham002- 57 -LRB100 15343 SMS 38834 a

1    1-10 of this Act. Pursuant to such procurement planning
2    process, the owners of such facilities may propose to the
3    Agency sourcing agreements with utilities and alternative
4    retail electric suppliers required to comply with
5    subsection (d) of this Section and item (5) of subsection
6    (d) of Section 16-115 of the Public Utilities Act, covering
7    electricity generated by such facilities. In the case of
8    sourcing agreements that are power purchase agreements,
9    the contract price for electricity sales shall be
10    established on a cost of service basis. In the case of
11    sourcing agreements that are contracts for differences,
12    the contract price from which the reference price is
13    subtracted shall be established on a cost of service basis.
14    The Agency and the Commission may approve any such utility
15    sourcing agreements that do not exceed cost-based
16    benchmarks developed by the procurement administrator, in
17    consultation with the Commission staff, Agency staff and
18    the procurement monitor, subject to Commission review and
19    approval. The Commission shall have authority to inspect
20    all books and records associated with these clean coal
21    facilities during the term of any such contract.
22        (5.5) In order to promote the development of clean coal
23    power generation, and in furtherance of the State's goal of
24    having at least 25% of the State's electricity generated by
25    cost-effective clean coal facilities by January 1, 2025 as
26    provided in paragraph (1) of this subsection (d), the

 

 

10000HB4236ham002- 58 -LRB100 15343 SMS 38834 a

1    Agency and Commission shall include sourcing agreements
2    covering power produced by clean coal facilities, as
3    defined in Section 1-10, in each annual power procurement
4    plan.
5        The Agency and Commission shall require electric
6    utilities to enter into such sourcing agreements as part of
7    the annual power procurement process. The electric
8    utilities shall assess a non-bypassable charge to
9    alternative retail electric suppliers for the recovery of
10    sourcing agreement costs, with such costs commensurate
11    with the share of retail customer load served by individual
12    alternative retail electric suppliers.
13        The Agency and Commission shall establish a
14    competitive procedure to solicit and receive proposed
15    sourcing terms from producers of clean coal power
16    interested in selection for sourcing agreements. The
17    competitive procedure shall include a method of selection
18    for inclusion in those agreements.
19        Electric utilities shall enter into sourcing
20    agreements with clean coal facilities in an amount
21    sufficient to cover all of the output of such facilities,
22    subject to the limitations of paragraph (2) of this
23    subsection (d). Electric utilities may file tariffs for the
24    recovery of those costs from their eligible retail
25    customers and hourly pricing customers, with such costs
26    commensurate with the share of retail customer load

 

 

10000HB4236ham002- 59 -LRB100 15343 SMS 38834 a

1    represented by those customers.
2        These sourcing agreements shall be subject to the
3    limits contained in items (A) through (E) of paragraph (2)
4    of this subsection (d) and the benchmarks as set forth by
5    paragraph (1) of this subsection (d).
6        The Commission shall have authority to inspect all
7    books and records associated with these clean coal
8    facilities during the term of any such contract.
9        As part of the annual procurement planning process, the
10    owners of clean coal facilities may offer proposals to the
11    Agency for sourcing agreements with electric utilities
12    required to comply with this subsection (d) 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
20    basis. The sourcing agreements shall be included under and
21    governed by provisions of the Public Utilities Act.
22        (6) Costs incurred under this subsection (d) or
23    pursuant to a contract entered into under this subsection
24    (d) shall be deemed prudently incurred and reasonable in
25    amount and the electric utility shall be entitled to full
26    cost recovery pursuant to the tariffs filed with the

 

 

10000HB4236ham002- 60 -LRB100 15343 SMS 38834 a

1    Commission.
2    (d-5) Zero emission standard.
3        (1) Beginning with the delivery year commencing on June
4    1, 2017, the Agency shall, for electric utilities that
5    serve at least 100,000 retail customers in this State,
6    procure contracts with zero emission facilities that are
7    reasonably capable of generating cost-effective zero
8    emission credits in an amount approximately equal to 16% of
9    the actual amount of electricity delivered by each electric
10    utility to retail customers in the State during calendar
11    year 2014. For an electric utility serving fewer than
12    100,000 retail customers in this State that requested,
13    under Section 16-111.5 of the Public Utilities Act, that
14    the Agency procure power and energy for all or a portion of
15    the utility's Illinois load for the delivery year
16    commencing June 1, 2016, the Agency shall procure contracts
17    with zero emission facilities that are reasonably capable
18    of generating cost-effective zero emission credits in an
19    amount approximately equal to 16% of the portion of power
20    and energy to be procured by the Agency for the utility.
21    The duration of the contracts procured under this
22    subsection (d-5) shall be for a term of 10 years ending May
23    31, 2027. The quantity of zero emission credits to be
24    procured under the contracts shall be all of the zero
25    emission credits generated by the zero emission facility in
26    each delivery year; however, if the zero emission facility

 

 

10000HB4236ham002- 61 -LRB100 15343 SMS 38834 a

1    is owned by more than one entity, then the quantity of zero
2    emission credits to be procured under the contracts shall
3    be the amount of zero emission credits that are generated
4    from the portion of the zero emission facility that is
5    owned by the winning supplier.
6        The 16% value identified in this paragraph (1) is the
7    average of the percentage targets in subparagraph (B) of
8    paragraph (1) of subsection (c) of Section 1-75 of this Act
9    for the 5 delivery years beginning June 1, 2017.
10        The procurement process shall be subject to the
11    following provisions:
12            (A) Those zero emission facilities that intend to
13        participate in the procurement shall submit to the
14        Agency the following eligibility information for each
15        zero emission facility on or before the date
16        established by the Agency:
17                (i) the in-service date and remaining useful
18            life of the zero emission facility;
19                (ii) the amount of power generated annually
20            for each of the years 2005 through 2015, and the
21            projected zero emission credits to be generated
22            over the remaining useful life of the zero emission
23            facility, which shall be used to determine the
24            capability of each facility;
25                (iii) the annual zero emission facility cost
26            projections, expressed on a per megawatthour

 

 

10000HB4236ham002- 62 -LRB100 15343 SMS 38834 a

1            basis, over the next 6 delivery years, which shall
2            include the following: operation and maintenance
3            expenses; fully allocated overhead costs, which
4            shall be allocated using the methodology developed
5            by the Institute for Nuclear Power Operations;
6            fuel expenditures; non-fuel capital expenditures;
7            spent fuel expenditures; a return on working
8            capital; the cost of operational and market risks
9            that could be avoided by ceasing operation; and any
10            other costs necessary for continued operations,
11            provided that "necessary" means, for purposes of
12            this item (iii), that the costs could reasonably be
13            avoided only by ceasing operations of the zero
14            emission facility; and
15                (iv) a commitment to continue operating, for
16            the duration of the contract or contracts executed
17            under the procurement held under this subsection
18            (d-5), the zero emission facility that produces
19            the zero emission credits to be procured in the
20            procurement.
21        The information described in item (iii) of this
22    subparagraph (A) may be submitted on a confidential basis
23    and shall be treated and maintained by the Agency, the
24    procurement administrator, and the Commission as
25    confidential and proprietary and exempt from disclosure
26    under subparagraphs (a) and (g) of paragraph (1) of Section

 

 

10000HB4236ham002- 63 -LRB100 15343 SMS 38834 a

1    7 of the Freedom of Information Act. The Office of Attorney
2    General shall have access to, and maintain the
3    confidentiality of, such information pursuant to Section
4    6.5 of the Attorney General Act.
5            (B) The price for each zero emission credit
6        procured under this subsection (d-5) for each delivery
7        year shall be in an amount that equals the Social Cost
8        of Carbon, expressed on a price per megawatthour basis.
9        However, to ensure that the procurement remains
10        affordable to retail customers in this State if
11        electricity prices increase, the price in an
12        applicable delivery year shall be reduced below the
13        Social Cost of Carbon by the amount ("Price
14        Adjustment") by which the market price index for the
15        applicable delivery year exceeds the baseline market
16        price index for the consecutive 12-month period ending
17        May 31, 2016. If the Price Adjustment is greater than
18        or equal to the Social Cost of Carbon in an applicable
19        delivery year, then no payments shall be due in that
20        delivery year. The components of this calculation are
21        defined as follows:
22                (i) Social Cost of Carbon: The Social Cost of
23            Carbon is $16.50 per megawatthour, which is based
24            on the U.S. Interagency Working Group on Social
25            Cost of Carbon's price in the August 2016 Technical
26            Update using a 3% discount rate, adjusted for

 

 

10000HB4236ham002- 64 -LRB100 15343 SMS 38834 a

1            inflation for each year of the program. Beginning
2            with the delivery year commencing June 1, 2023, the
3            price per megawatthour shall increase by $1 per
4            megawatthour, and continue to increase by an
5            additional $1 per megawatthour each delivery year
6            thereafter.
7                (ii) Baseline market price index: The baseline
8            market price index for the consecutive 12-month
9            period ending May 31, 2016 is $31.40 per
10            megawatthour, which is based on the sum of (aa) the
11            average day-ahead energy price across all hours of
12            such 12-month period at the PJM Interconnection
13            LLC Northern Illinois Hub, (bb) 50% multiplied by
14            the Base Residual Auction, or its successor,
15            capacity price for the rest of the RTO zone group
16            determined by PJM Interconnection LLC, divided by
17            24 hours per day, and (cc) 50% multiplied by the
18            Planning Resource Auction, or its successor,
19            capacity price for Zone 4 determined by the
20            Midcontinent Independent System Operator, Inc.,
21            divided by 24 hours per day.
22                (iii) Market price index: The market price
23            index for a delivery year shall be the sum of
24            projected energy prices and projected capacity
25            prices determined as follows:
26                    (aa) Projected energy prices: the

 

 

10000HB4236ham002- 65 -LRB100 15343 SMS 38834 a

1                projected energy prices for the applicable
2                delivery year shall be calculated once for the
3                year using the forward market price for the PJM
4                Interconnection, LLC Northern Illinois Hub.
5                The forward market price shall be calculated as
6                follows: the energy forward prices for each
7                month of the applicable delivery year averaged
8                for each trade date during the calendar year
9                immediately preceding that delivery year to
10                produce a single energy forward price for the
11                delivery year. The forward market price
12                calculation shall use data published by the
13                Intercontinental Exchange, or its successor.
14                    (bb) Projected capacity prices:
15                        (I) For the delivery years commencing
16                    June 1, 2017, June 1, 2018, and June 1,
17                    2019, the projected capacity price shall
18                    be equal to the sum of (1) 50% multiplied
19                    by the Base Residual Auction, or its
20                    successor, price for the rest of the RTO
21                    zone group as determined by PJM
22                    Interconnection LLC, divided by 24 hours
23                    per day and, (2) 50% multiplied by the
24                    resource auction price determined in the
25                    resource auction administered by the
26                    Midcontinent Independent System Operator,

 

 

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1                    Inc., in which the largest percentage of
2                    load cleared for Local Resource Zone 4,
3                    divided by 24 hours per day, and where such
4                    price is determined by the Midcontinent
5                    Independent System Operator, Inc.
6                        (II) For the delivery year commencing
7                    June 1, 2020, and each year thereafter, the
8                    projected capacity price shall be equal to
9                    the sum of (1) 50% multiplied by the Base
10                    Residual Auction, or its successor, price
11                    for the ComEd zone as determined by PJM
12                    Interconnection LLC, divided by 24 hours
13                    per day, and (2) 50% multiplied by the
14                    resource auction price determined in the
15                    resource auction administered by the
16                    Midcontinent Independent System Operator,
17                    Inc., in which the largest percentage of
18                    load cleared for Local Resource Zone 4,
19                    divided by 24 hours per day, and where such
20                    price is determined by the Midcontinent
21                    Independent System Operator, Inc.
22            For purposes of this subsection (d-5):
23                "Rest of the RTO" and "ComEd Zone" shall have
24            the meaning ascribed to them by PJM
25            Interconnection, LLC.
26                "RTO" means regional transmission

 

 

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1            organization.
2            (C) No later than 45 days after June 1, 2017 (the
3        effective date of Public Act 99-906) this amendatory
4        Act of the 99th General Assembly, the Agency shall
5        publish its proposed zero emission standard
6        procurement plan. The plan shall be consistent with the
7        provisions of this paragraph (1) and shall provide that
8        winning bids shall be selected based on public interest
9        criteria that include, but are not limited to,
10        minimizing carbon dioxide emissions that result from
11        electricity consumed in Illinois and minimizing sulfur
12        dioxide, nitrogen oxide, and particulate matter
13        emissions that adversely affect the citizens of this
14        State. In particular, the selection of winning bids
15        shall take into account the incremental environmental
16        benefits resulting from the procurement, such as any
17        existing environmental benefits that are preserved by
18        the procurements held under Public Act 99-906 this
19        amendatory Act of the 99th General Assembly and would
20        cease to exist if the procurements were not held,
21        including the preservation of zero emission
22        facilities. The plan shall also describe in detail how
23        each public interest factor shall be considered and
24        weighted in the bid selection process to ensure that
25        the public interest criteria are applied to the
26        procurement and given full effect.

 

 

10000HB4236ham002- 68 -LRB100 15343 SMS 38834 a

1            For purposes of developing the plan, the Agency
2        shall consider any reports issued by a State agency,
3        board, or commission under House Resolution 1146 of the
4        98th General Assembly and paragraph (4) of subsection
5        (d) of Section 1-75 of this Act, as well as publicly
6        available analyses and studies performed by or for
7        regional transmission organizations that serve the
8        State and their independent market monitors.
9            Upon publishing of the zero emission standard
10        procurement plan, copies of the plan shall be posted
11        and made publicly available on the Agency's website.
12        All interested parties shall have 10 days following the
13        date of posting to provide comment to the Agency on the
14        plan. All comments shall be posted to the Agency's
15        website. Following the end of the comment period, but
16        no more than 60 days later than June 1, 2017 (the
17        effective date of Public Act 99-906) this amendatory
18        Act of the 99th General Assembly, the Agency shall
19        revise the plan as necessary based on the comments
20        received and file its zero emission standard
21        procurement plan with the Commission.
22            If the Commission determines that the plan will
23        result in the procurement of cost-effective zero
24        emission credits, then the Commission shall, after
25        notice and hearing, but no later than 45 days after the
26        Agency filed the plan, approve the plan or approve with

 

 

10000HB4236ham002- 69 -LRB100 15343 SMS 38834 a

1        modification. For purposes of this subsection (d-5),
2        "cost effective" means the projected costs of
3        procuring zero emission credits from zero emission
4        facilities do not cause the limit stated in paragraph
5        (2) of this subsection to be exceeded.
6            (C-5) As part of the Commission's review and
7        acceptance or rejection of the procurement results,
8        the Commission shall, in its public notice of
9        successful bidders:
10                (i) identify how the winning bids satisfy the
11            public interest criteria described in subparagraph
12            (C) of this paragraph (1) of minimizing carbon
13            dioxide emissions that result from electricity
14            consumed in Illinois and minimizing sulfur
15            dioxide, nitrogen oxide, and particulate matter
16            emissions that adversely affect the citizens of
17            this State;
18                (ii) specifically address how the selection of
19            winning bids takes into account the incremental
20            environmental benefits resulting from the
21            procurement, including any existing environmental
22            benefits that are preserved by the procurements
23            held under Public Act 99-906 this amendatory Act of
24            the 99th General Assembly and would have ceased to
25            exist if the procurements had not been held, such
26            as the preservation of zero emission facilities;

 

 

10000HB4236ham002- 70 -LRB100 15343 SMS 38834 a

1                (iii) quantify the environmental benefit of
2            preserving the resources identified in item (ii)
3            of this subparagraph (C-5), including the
4            following:
5                    (aa) the value of avoided greenhouse gas
6                emissions measured as the product of the zero
7                emission facilities' output over the contract
8                term multiplied by the U.S. Environmental
9                Protection Agency eGrid subregion carbon
10                dioxide emission rate and the U.S. Interagency
11                Working Group on Social Cost of Carbon's price
12                in the August 2016 Technical Update using a 3%
13                discount rate, adjusted for inflation for each
14                delivery year; and
15                    (bb) the costs of replacement with other
16                zero carbon dioxide resources, including wind
17                and photovoltaic, based upon the simple
18                average of the following:
19                        (I) the price, or if there is more than
20                    one price, the average of the prices, paid
21                    for renewable energy credits from new
22                    utility-scale wind projects in the
23                    procurement events specified in item (i)
24                    of subparagraph (G) of paragraph (1) of
25                    subsection (c) of Section 1-75 of this Act;
26                    and

 

 

10000HB4236ham002- 71 -LRB100 15343 SMS 38834 a

1                        (II) the price, or if there is more
2                    than one price, the average of the prices,
3                    paid for renewable energy credits from new
4                    utility-scale solar projects and
5                    brownfield site photovoltaic projects in
6                    the procurement events specified in item
7                    (ii) of subparagraph (G) of paragraph (1)
8                    of subsection (c) of Section 1-75 of this
9                    Act and, after January 1, 2015, renewable
10                    energy credits from photovoltaic
11                    distributed generation projects in
12                    procurement events held under subsection
13                    (c) of Section 1-75 of this Act.
14            Each utility shall enter into binding contractual
15        arrangements with the winning suppliers.
16            The procurement described in this subsection
17        (d-5), including, but not limited to, the execution of
18        all contracts procured, shall be completed no later
19        than May 10, 2017. Based on the effective date of
20        Public Act 99-906 this amendatory Act of the 99th
21        General Assembly, the Agency and Commission may, as
22        appropriate, modify the various dates and timelines
23        under this subparagraph and subparagraphs (C) and (D)
24        of this paragraph (1). The procurement and plan
25        approval processes required by this subsection (d-5)
26        shall be conducted in conjunction with the procurement

 

 

10000HB4236ham002- 72 -LRB100 15343 SMS 38834 a

1        and plan approval processes required by subsection (c)
2        of this Section and Section 16-111.5 of the Public
3        Utilities Act, to the extent practicable.
4        Notwithstanding whether a procurement event is
5        conducted under Section 16-111.5 of the Public
6        Utilities Act, the Agency shall immediately initiate a
7        procurement process on June 1, 2017 (the effective date
8        of Public Act 99-906) this amendatory Act of the 99th
9        General Assembly.
10            (D) Following the procurement event described in
11        this paragraph (1) and consistent with subparagraph
12        (B) of this paragraph (1), the Agency shall calculate
13        the payments to be made under each contract for the
14        next delivery year based on the market price index for
15        that delivery year. The Agency shall publish the
16        payment calculations no later than May 25, 2017 and
17        every May 25 thereafter.
18            (E) Notwithstanding the requirements of this
19        subsection (d-5), the contracts executed under this
20        subsection (d-5) shall provide that the zero emission
21        facility may, as applicable, suspend or terminate
22        performance under the contracts in the following
23        instances:
24                (i) A zero emission facility shall be excused
25            from its performance under the contract for any
26            cause beyond the control of the resource,

 

 

10000HB4236ham002- 73 -LRB100 15343 SMS 38834 a

1            including, but not restricted to, acts of God,
2            flood, drought, earthquake, storm, fire,
3            lightning, epidemic, war, riot, civil disturbance
4            or disobedience, labor dispute, labor or material
5            shortage, sabotage, acts of public enemy,
6            explosions, orders, regulations or restrictions
7            imposed by governmental, military, or lawfully
8            established civilian authorities, which, in any of
9            the foregoing cases, by exercise of commercially
10            reasonable efforts the zero emission facility
11            could not reasonably have been expected to avoid,
12            and which, by the exercise of commercially
13            reasonable efforts, it has been unable to
14            overcome. In such event, the zero emission
15            facility shall be excused from performance for the
16            duration of the event, including, but not limited
17            to, delivery of zero emission credits, and no
18            payment shall be due to the zero emission facility
19            during the duration of the event.
20                (ii) A zero emission facility shall be
21            permitted to terminate the contract if legislation
22            is enacted into law by the General Assembly that
23            imposes or authorizes a new tax, special
24            assessment, or fee on the generation of
25            electricity, the ownership or leasehold of a
26            generating unit, or the privilege or occupation of

 

 

10000HB4236ham002- 74 -LRB100 15343 SMS 38834 a

1            such generation, ownership, or leasehold of
2            generation units by a zero emission facility.
3            However, the provisions of this item (ii) do not
4            apply to any generally applicable tax, special
5            assessment or fee, or requirements imposed by
6            federal law.
7                (iii) A zero emission facility shall be
8            permitted to terminate the contract in the event
9            that the resource requires capital expenditures in
10            excess of $40,000,000 that were neither known nor
11            reasonably foreseeable at the time it executed the
12            contract and that a prudent owner or operator of
13            such resource would not undertake.
14                (iv) A zero emission facility shall be
15            permitted to terminate the contract in the event
16            the Nuclear Regulatory Commission terminates the
17            resource's license.
18            (F) If the zero emission facility elects to
19        terminate a contract under this subparagraph (E, of
20        this paragraph (1), then the Commission shall reopen
21        the docket in which the Commission approved the zero
22        emission standard procurement plan under subparagraph
23        (C) of this paragraph (1) and, after notice and
24        hearing, enter an order acknowledging the contract
25        termination election if such termination is consistent
26        with the provisions of this subsection (d-5).

 

 

10000HB4236ham002- 75 -LRB100 15343 SMS 38834 a

1        (2) For purposes of this subsection (d-5), the amount
2    paid per kilowatthour means the total amount paid for
3    electric service expressed on a per kilowatthour basis. For
4    purposes of this subsection (d-5), the total amount paid
5    for electric service includes, without limitation, amounts
6    paid for supply, transmission, distribution, surcharges,
7    and add-on taxes.
8        Notwithstanding the requirements of this subsection
9    (d-5), the contracts executed under this subsection (d-5)
10    shall provide that the total of zero emission credits
11    procured under a procurement plan shall be subject to the
12    limitations of this paragraph (2). For each delivery year,
13    the contractual volume receiving payments in such year
14    shall be reduced for all retail customers based on the
15    amount necessary to limit the net increase that delivery
16    year to the costs of those credits included in the amounts
17    paid by eligible retail customers in connection with
18    electric service to no more than 1.65% of the amount paid
19    per kilowatthour by eligible retail customers during the
20    year ending May 31, 2009. The result of this computation
21    shall apply to and reduce the procurement for all retail
22    customers, and all those customers shall pay the same
23    single, uniform cents per kilowatthour charge under
24    subsection (k) of Section 16-108 of the Public Utilities
25    Act. To arrive at a maximum dollar amount of zero emission
26    credits to be paid for the particular delivery year, the

 

 

10000HB4236ham002- 76 -LRB100 15343 SMS 38834 a

1    resulting per kilowatthour amount shall be applied to the
2    actual amount of kilowatthours of electricity delivered by
3    the electric utility in the delivery year immediately prior
4    to the procurement, to all retail customers in its service
5    territory. Unpaid contractual volume for any delivery year
6    shall be paid in any subsequent delivery year in which such
7    payments can be made without exceeding the amount specified
8    in this paragraph (2). The calculations required by this
9    paragraph (2) shall be made only once for each procurement
10    plan year. Once the determination as to the amount of zero
11    emission credits to be paid is made based on the
12    calculations set forth in this paragraph (2), no subsequent
13    rate impact determinations shall be made and no adjustments
14    to those contract amounts shall be allowed. All costs
15    incurred under those contracts and in implementing this
16    subsection (d-5) shall be recovered by the electric utility
17    as provided in this Section.
18        No later than June 30, 2019, the Commission shall
19    review the limitation on the amount of zero emission
20    credits procured under this subsection (d-5) and report to
21    the General Assembly its findings as to whether that
22    limitation unduly constrains the procurement of
23    cost-effective zero emission credits.
24        (3) Six years after the execution of a contract under
25    this subsection (d-5), the Agency shall determine whether
26    the actual zero emission credit payments received by the

 

 

10000HB4236ham002- 77 -LRB100 15343 SMS 38834 a

1    supplier over the 6-year period exceed the Average ZEC
2    Payment. In addition, at the end of the term of a contract
3    executed under this subsection (d-5), or at the time, if
4    any, a zero emission facility's contract is terminated
5    under subparagraph (E) of paragraph (1) of this subsection
6    (d-5), then the Agency shall determine whether the actual
7    zero emission credit payments received by the supplier over
8    the term of the contract exceed the Average ZEC Payment,
9    after taking into account any amounts previously credited
10    back to the utility under this paragraph (3). If the Agency
11    determines that the actual zero emission credit payments
12    received by the supplier over the relevant period exceed
13    the Average ZEC Payment, then the supplier shall credit the
14    difference back to the utility. The amount of the credit
15    shall be remitted to the applicable electric utility no
16    later than 120 days after the Agency's determination, which
17    the utility shall reflect as a credit on its retail
18    customer bills as soon as practicable; however, the credit
19    remitted to the utility shall not exceed the total amount
20    of payments received by the facility under its contract.
21        For purposes of this Section, the Average ZEC Payment
22    shall be calculated by multiplying the quantity of zero
23    emission credits delivered under the contract times the
24    average contract price. The average contract price shall be
25    determined by subtracting the amount calculated under
26    subparagraph (B) of this paragraph (3) from the amount

 

 

10000HB4236ham002- 78 -LRB100 15343 SMS 38834 a

1    calculated under subparagraph (A) of this paragraph (3), as
2    follows:
3            (A) The average of the Social Cost of Carbon, as
4        defined in subparagraph (B) of paragraph (1) of this
5        subsection (d-5), during the term of the contract.
6            (B) The average of the market price indices, as
7        defined in subparagraph (B) of paragraph (1) of this
8        subsection (d-5), during the term of the contract,
9        minus the baseline market price index, as defined in
10        subparagraph (B) of paragraph (1) of this subsection
11        (d-5).
12    If the subtraction yields a negative number, then the
13Average ZEC Payment shall be zero.
14        (4) Cost-effective zero emission credits procured from
15    zero emission facilities shall satisfy the applicable
16    definitions set forth in Section 1-10 of this Act.
17        (5) The electric utility shall retire all zero emission
18    credits used to comply with the requirements of this
19    subsection (d-5).
20        (6) Electric utilities shall be entitled to recover all
21    of the costs associated with the procurement of zero
22    emission credits through an automatic adjustment clause
23    tariff in accordance with subsection (k) and (m) of Section
24    16-108 of the Public Utilities Act, and the contracts
25    executed under this subsection (d-5) shall provide that the
26    utilities' payment obligations under such contracts shall

 

 

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1    be reduced if an adjustment is required under subsection
2    (m) of Section 16-108 of the Public Utilities Act.
3        (7) This subsection (d-5) shall become inoperative on
4    January 1, 2028.
5    (e) The draft procurement plans are subject to public
6comment, as required by Section 16-111.5 of the Public
7Utilities Act.
8    (f) The Agency shall submit the final procurement plan to
9the Commission. The Agency shall revise a procurement plan if
10the Commission determines that it does not meet the standards
11set forth in Section 16-111.5 of the Public Utilities Act.
12    (g) The Agency shall assess fees to each affected utility
13to recover the costs incurred in preparation of the annual
14procurement plan for the utility.
15    (h) The Agency shall assess fees to each bidder to recover
16the costs incurred in connection with a competitive procurement
17process.
18    (i) A renewable energy credit, carbon emission credit, or
19zero emission credit can only be used once to comply with a
20single portfolio or other standard as set forth in subsection
21(c), subsection (d), or subsection (d-5) of this Section,
22respectively. A renewable energy credit, carbon emission
23credit, or zero emission credit cannot be used to satisfy the
24requirements of more than one standard. If more than one type
25of credit is issued for the same megawatt hour of energy, only
26one credit can be used to satisfy the requirements of a single

 

 

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1standard. After such use, the credit must be retired together
2with any other credits issued for the same megawatt hour of
3energy.
4(Source: P.A. 98-463, eff. 8-16-13; 99-536, eff. 7-8-16;
599-906, eff. 6-1-17; revised 1-22-18.)
 
6    Section 99. Effective date. This Act takes effect June 1,
72018.".