Illinois General Assembly - Full Text of SB1242
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Full Text of SB1242  103rd General Assembly




State of Illinois
2023 and 2024


Introduced 2/2/2023, by Sen. Chapin Rose


New Act

    Creates the State Power Purchase Agreement Act. Provides that the Smart Energy Design Assistance Center (SEDAC) is designated as the lead agency for the development and promotion of a program to facilitate the deployment of renewable energy power purchase agreements with State agencies. Provides for the selection of qualified renewable energy power purchase agreement project developers. Allows State agencies to enter into renewable energy power purchase agreements with renewable energy developers for the construction and use of solar or wind energy, or both, on State property controlled by the State agency or on which daily operations of the State agency occur. Provides further requirements concerning the awarding of contracts to developers and purchase of power under power purchase agreements. Specifies the duration of power purchase agreement contracts. Provides for third-party financing of renewable energy power purchase agreement projects. Provides for the use of moneys saved by State agencies by entering into renewable energy power purchase agreements. Provides for reporting to the Illinois Commerce Commission. Defines terms. Effective immediately.

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SB1242LRB103 04778 HLH 49788 b

1    AN ACT concerning finance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the State
5Power Purchase Agreement Act.
6    Section 5. Purpose. The purpose of this Act is to obtain
7long-term energy and cost-savings for State agencies by
8facilitating engagement in Power Purchase Agreements in
9connection with buildings, facilities, and lands owned,
10operated, or under the supervision and control of State
11agencies. These agreements will improve and protect the
12health, safety, security, and welfare of the people of this
13State by promoting renewable energy deployment, reducing air
14emissions, and reducing costs.
15    Section 10. Definitions. As used in this Act:
16    "Renewable energy infrastructure" means solar and wind
17energy infrastructure constructed on State property under the
18provisions of a power purchase project agreement.
19    "Renewable energy power purchase agreement" is a long-term
20contract between a party that generates renewable electricity
21(typically an independent power developer) and a State agency
22that purchases electricity.



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1    "Renewable energy power purchase agreement project
2developer" or "developer" means a person or organization with
3a record of successful deployment and operation of renewable
4energy power purchase agreement projects.
5    "Renewable energy project" means any system comprised of
6equipment, devices, or fuels that enable the use or storage of
7renewable energy sources such as wind, solar, geothermal, or
9    "State agency" has the meaning provided in Section 1-7 of
10the Illinois State Auditing Act.
11    Section 15. Smart Energy Design Assistance Center (SEDAC).
12    (a) The Smart Energy Design Assistance Center (SEDAC)
13based at the University of Illinois at Urbana-Champaign is
14hereby designated to be the lead agency for the development
15and promotion of a program to facilitate the deployment of
16renewable energy power purchase agreements with State
17agencies. SEDAC will coordinate its activities with the
18Department of Central Management Services and other relevant
19State agencies, under the direction of the Governor, and will
20have the following duties with respect to this program:
21        (1) assistance to the Department of Central Management
22    Services to assemble a list of qualified renewable energy
23    project developers and to negotiate with such qualified
24    project developers master service contracts and pricing
25    schedules;



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1        (2) development of a standardized power purchase
2    agreement contract process and standard contract
3    documents, including requests for qualifications, requests
4    for proposals, and reporting metrics and content on the
5    operations and status of the renewable energy power
6    purchase project agreement; and
7        (3) promotion of the renewable energy power purchase
8    agreements to all State agencies.
9    (b) SEDAC shall assist State agencies in identifying,
10evaluating, and implementing cost-effective renewable energy
11power purchase agreements at their facilities. The assistance
12shall include:
13        (1) notifying State agencies of this Act;
14        (2) apprising State agencies of opportunities to
15    implement renewable energy power purchase agreements;
16        (3) providing technical and analytical support,
17    including assessment and identification of site specific
18    renewable energy opportunities;
19        (4) reviewing and verifying estimates for energy
20    savings and emissions reductions; and
21        (5) assisting in the structuring and arranging of
22    renewable energy power purchase agreements and projects.
23    (c) SEDAC is authorized to fix, charge, and collect
24reasonable fees, not to exceed 2% of the energy cost savings of
25the renewable energy power purchase agreement for any
26administrative or technical support provided by SEDAC, or its



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1designee, under this subsection (c) from the State agency that
2uses its technical support services. State agencies are
3authorized to add the costs of these fees to the total cost of
4the renewable energy power purchase agreement.
5    (d) The Governor is encouraged to develop and submit to
6the General Assembly a regular or supplemental budget request
7for the additional funds and staffing required by the Smart
8Energy Design Assistance Center to fulfill the duties required
9under this Section.
10    Section 20. Selection of qualified renewable energy power
11purchase agreement project developers. The State process of
12implementing renewable energy power purchase agreements shall
13be as provided in this Section.
14    (a) Regarding requests for qualifications, the Department
15of Central Management Services is authorized to assemble a
16list of qualified renewable energy power purchase agreements
17project developers, in accordance with the provisions of the
18Illinois Procurement Code. The Department of Central
19Management Services shall attempt to use objective criteria in
20the selection process. The criteria for evaluation shall
21include substantive factors to assess the capability of the
22qualified renewable energy power purchase agreement project
23developers in the areas of design, engineering, installation,
24maintenance, and repairs associated with renewable energy
25systems. The substantive factors shall be as follows:



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1        (1) experience in the design, implementation, and
2    maintenance of renewable energy systems;
3        (2) post-installation project monitoring, data
4    collection, and reporting of savings;
5        (3) overall project experience and qualifications;
6        (4) management capability;
7        (5) ability to access long-term financing;
8        (6) experience with projects of similar size and
9    scope; and
10        (7) other factors determined by the State agency to be
11    relevant and appropriate and relate to the ability to
12    perform the project.
13    (b) Regarding requests for proposals, before entering into
14a renewable energy power purchase agreement under this
15Section, a State agency shall issue a request for proposals
16from up to 3 qualified renewable energy power purchase
17agreement project developers. A State agency may thereafter
18award the performance contract to the qualified purchase
19agreement project developer that best meets the needs of the
20State agency, which need not be the lowest cost provided. A
21cost-effective feasibility analysis shall be prepared in
22response to the request for proposals. The feasibility
23analysis included in the response to the request for proposals
24shall serve as the selection document for purposes of
25selecting a renewable energy power purchase agreement project
26developer to engage in final contract negotiations. Factors to



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1be included in selecting among the renewable energy power
2purchase agreement project developers include contract terms,
3comprehensiveness of the proposal, technical feasibility,
4experience, and overall benefits to the State agency.
5    Section 25. Renewable energy power purchase agreement
7    (a) Subject to the provisions of Section 20, a State
8agency may enter into a renewable energy power purchase
9agreement with renewable energy developers for the
10construction and use of solar or wind energy, or both, on State
11property controlled by the State agency or on which daily
12operations of the State agency occur.
13    (b) State agencies choosing to enter into a renewable
14energy power purchase agreement under subsection (a) shall
15enter into such agreement with a developer chosen through a
16process in accordance with Section 20 and otherwise meeting
17the requirements of the Illinois Procurement Code regarding
18requests for proposals. A developer bidding for a contract
19under this Section shall include a list of potential
20third-party investors that would be ready and willing to
21invest in the project upon awarding of the contract. A bid made
22without a list of potential investors shall not be accepted
23and no contract shall be awarded.
24    (c) The developer awarded a contract under subsection (b)
25shall be provided land and facility access to the property



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1used by the State agency for the purpose of constructing and
2managing a renewable energy infrastructure. The State agency,
3based upon the renewable energy power purchase agreement,
4shall then be able to purchase the power produced by the
5renewable energy infrastructure from the developer at a lower
6rate than it would otherwise pay for power. The developer
7shall be responsible for the construction and management of
8the renewable energy infrastructure on property used by the
9State agency.
10    (d) Upon the awarding of a contract under subsection (b),
11and in addition to the provisions of subsection (c), the
12potential investors listed in the developer's bid shall be
13contacted for the purposes of investing capital toward the
14construction and operation of a renewable energy
15infrastructure on property used by the State agency as
16provided under the renewable energy power purchase agreement.
17The investor shall be compensated through a subsequent
18contract entered into between the investor and the State
19agency. Failure of the developer to secure an investor
20provided for in its bid may, at the discretion of the State
21agency, render the contract between the developer and the
22State agency void.
23    (e) No State agency that has entered into a renewable
24energy power purchase agreement under this Section shall
25purchase more power than is that State agency's normal
26consumption for a given yearly period, nor shall that State



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1agency contract for the construction of renewable energy
2infrastructure estimated to produce more power than is that
3State agency's normal consumption for a given yearly period.
4    (f) Each State agency that has entered into a renewable
5energy power purchase agreement under this Section shall,
6within 2 years after entering into the agreement, issue a
7report to the General Assembly on the operations and status of
8the renewable energy power purchase agreement.
9    Section 30. Duration of contracts; financing. A renewable
10energy power purchase agreement, and payments provided
11thereunder, shall extend for periods of between 5 and 25
12years. The allowable length of the contract may also reflect
13the useful life of renewable energy equipment and facilities.
14A renewable energy power purchase agreement may provide for
15financing, including tax incentives by a third party. The
16contract for third-party financing may be separate from the
17renewable energy power purchase agreement. A separate contract
18for third-party financing must include a provision that the
19third-party financier must not be granted rights or privileges
20that exceed the rights and privileges available to the
21renewable energy power purchase agreement project developer.
22    Section 35. Use of moneys. The State agency engaging in
23the renewable energy power purchase agreement shall retain the
24savings achieved by entering into the renewable energy power



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1purchase agreement contract. State agencies are encouraged to
2reinvest savings wherever practical into additional cost
3savings measures. Unless otherwise provided by law, a State
4agency shall use funds designated for operating and capital
5expenditures or utilities for any renewable energy power
6purchase agreement.
7    Section 40. Reports. For all projects carried out under
8this Act, the State agency shall report the name of the
9project, the project host, the investment on the project, the
10energy savings, the energy cost savings, and the greenhouse
11gas emission reductions to the Illinois Commerce Commission.
12The Illinois Commerce Commission may report energy savings and
13greenhouse gas emission reductions to the federal Energy
14Information Administration under the Energy Policy Act of 1992
15reporting standards.
16    Section 99. Effective date. This Act takes effect upon
17becoming law.