Full Text of HB3115 102nd General Assembly
HB3115eng 102ND GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Renewable Gas and Low-Carbon Fuels Act. | 6 | | Section 5. Findings. The General Assembly finds the | 7 | | following: | 8 | | (1) Natural gas provides the citizens and businesses | 9 | | of the State a safe, reliable, and affordable source of | 10 | | energy. | 11 | | (2) As Illinois transitions to a low-carbon energy | 12 | | economy, alternative low-carbon energy carriers that can | 13 | | support the needs of energy storage, resiliency, and | 14 | | emissions reductions are essential. | 15 | | (3) Hydrogen, or its derivatives, has significant | 16 | | potential as a low-carbon energy carrier. Hydrogen is a | 17 | | storable gas with high energy density and zero CO 2 | 18 | | emissions at the point of use. Hydrogen can be produced in | 19 | | a variety of low-carbon or no-carbon methods. | 20 | | (4) Methane emissions from organic waste are a | 21 | | powerful greenhouse gas with approximately 25 times the | 22 | | global warming potential of carbon dioxide. | 23 | | (5) These methane emissions that would otherwise enter |
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| 1 | | the Earth's atmosphere, or non-beneficially flared, can be | 2 | | captured and converted to renewable gas to create a fuel | 3 | | compatible with natural gas utility systems that is | 4 | | considered carbon-neutral and under certain circumstances | 5 | | can be carbon-negative. | 6 | | (7) Constructing a renewable gas production facility | 7 | | to capture this methane from organic waste or other | 8 | | renewable resources for use by the utility or its | 9 | | customers has the added benefit of displacing geologic | 10 | | natural gas, thus integrating and beneficially using what | 11 | | would otherwise be waste methane and reducing the State's | 12 | | carbon footprint, among other environmental benefits. | 13 | | (8) Encouraging the gas utility industry to undertake | 14 | | certain physical plant investments will promote the | 15 | | development of the renewable gas and other low-carbon | 16 | | fuels industry which, in turn, will create economic | 17 | | activity and jobs in this State while also improving the | 18 | | environment. | 19 | | (9) Including renewable gas and other low-carbon fuels | 20 | | resources in a natural gas utility's supply portfolio is a | 21 | | cost effective way to provide beneficial environmental | 22 | | impacts utilizing the natural gas utility infrastructure. | 23 | | (10) The development of renewable gas and other | 24 | | low-carbon fuels resources serves the public interest and | 25 | | should be encouraged to leverage the natural gas system to | 26 | | reduce greenhouse gas emissions and support a smooth |
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| 1 | | transition to a low-carbon energy economy in Illinois. | 2 | | Section 10. Definitions. As used in this Act: | 3 | | "Biogas" means a mixture consisting of primarily methane | 4 | | and carbon dioxide that is released from the biological | 5 | | decomposition or conversion of organic materials, including, | 6 | | without limitation, biomass, manure, plant material, sewage, | 7 | | and landfill waste. | 8 | | "Biomass" has the meaning given that term in subsection | 9 | | (d) of Section 16-127 of the Public Utilities Act. | 10 | | "Commission" means the Illinois Commerce Commission. | 11 | | "Environmental commodities" means non-tangible energy | 12 | | credits, and any and all current and future rights, credits, | 13 | | benefits, air quality credits, methane capture credits, | 14 | | renewable energy credits, emission reductions, offsets, and | 15 | | allowances, howsoever referred to, associated with the | 16 | | capture, production, generation, transportation, use, and | 17 | | environmental characteristics of biogas and low-carbon fuels, | 18 | | the displacement of fossil-based natural gas for any use | 19 | | (including, without limitation, thermal use, electricity | 20 | | generation, and use as a transportation fuel), the reduction | 21 | | of air pollutants or the avoidance of the emission of any gas, | 22 | | chemical or other substance, including, without limitation, | 23 | | any similar commodities, whether arising out of international, | 24 | | federal, State, or local laws or regulations. | 25 | | "Facility" means a facility or any part of the equipment |
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| 1 | | located at a facility that is used to create biogas, hydrogen, | 2 | | low-carbon fuels, methanate hydrogen, or other fuels, gather | 3 | | biogas, gather hydrogen, gather low-carbon fuels or other | 4 | | sources to make low-carbon fuels, process biogas or other | 5 | | sources into low-carbon fuels, inject low-carbon fuels into a | 6 | | natural gas pipeline or distribution system or determine the | 7 | | constituents of low-carbon fuels before the injection of the | 8 | | low-carbon Fuels into a natural gas pipeline or distribution | 9 | | system. | 10 | | "Low-carbon fuels" means renewable gas and other | 11 | | low-carbon fuels, collectively or interchangeably. | 12 | | "Natural gas utility" means a public utility that provides | 13 | | natural gas distribution services in Illinois. | 14 | | "Other low-carbon fuels" means any of the following | 15 | | products processed to meet pipeline quality standards or | 16 | | transportation fuel grade requirements: | 17 | | (1) hydrogen or other fuels derived from zero-carbon | 18 | | or low-carbon energy sources or from other sources where | 19 | | the CO 2 produced is capture and stored; or | 20 | | (2) methane gas derived from hydrogen or other fuels | 21 | | derived from zero-carbon or low-carbon energy sources or | 22 | | from other sources where the CO 2 produced is capture and | 23 | | stored. | 24 | | "Renewable energy sources" means hydroelectric, | 25 | | geothermal, solar photovoltaic, wind, tidal, wave, biomass, or | 26 | | biogas energy sources. |
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| 1 | | "Renewable gas" means any of the following products | 2 | | processed to meet pipeline quality standards or transportation | 3 | | fuel grade requirements: | 4 | | (1) biogas; | 5 | | (2) hydrogen derived from renewable energy sources; or | 6 | | (3) methane gas derived from any combination of: | 7 | | (A) biogas; | 8 | | (B) hydrogen derived from renewable energy | 9 | | sources; or | 10 | | (C) carbon dioxide. | 11 | | Section 15. Renewable gas and low-carbon fuels programs. | 12 | | (a) A natural gas utility shall incorporate low-carbon | 13 | | fuels into its natural gas supply portfolio. The goals for the | 14 | | total amount of renewable gas and other low-carbon fuels | 15 | | incorporated by the natural gas utility shall be as follows: | 16 | | (1) by January 1, 2030, not less than 2% of the natural | 17 | | gas utility's total gas supply portfolio (by volume); | 18 | | (2) by January 1, 2035, not less than 3% of the natural | 19 | | gas utility's total gas supply portfolio (by volume). | 20 | | The calculation of the share of the supply portfolio shall | 21 | | not include the volume of gas of any type delivered but not | 22 | | sold by the natural gas utility. | 23 | | (b) The natural gas utility shall make progress towards | 24 | | the goals set forth in this Section prior to the first | 25 | | milestone set forth in paragraph (1) of subsection (a). Within |
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| 1 | | 2 years after the effective date of this Act, the natural gas | 2 | | utility shall submit a plan setting forth, as of the date of | 3 | | the plan, how it expects to achieve the goals set forth in | 4 | | paragraphs (1) and (2) of subsection (a). This plan shall also | 5 | | include a description of the natural gas utility's progress | 6 | | towards the goals set forth in paragraphs (1) and (2) of | 7 | | subsection (a). | 8 | | (c) For purposes of meeting the goals set forth in | 9 | | subsection (a), low-carbon fuels that are purchased by the | 10 | | natural gas utility must include environmental commodities | 11 | | associated with the gas. Nothing in this Section shall be | 12 | | interpreted as preventing the gas utility from purchasing | 13 | | low-carbon fuels without environmental commodities, although | 14 | | such purchases shall not be applicable to meeting the goals | 15 | | set forth in subsection (a) of this Section. | 16 | | (d) A natural gas utility may seek authorization from the | 17 | | Commission under this Section to engage in low-carbon fuels | 18 | | activities, including, without limitation: | 19 | | (1) making a financial investment in a low-carbon | 20 | | fuels facility, including, but not limited to, owning, in | 21 | | whole or in part, and operating a low-carbon fuels | 22 | | facility connected to its distribution system; | 23 | | (2) contracting with a producer of low-carbon fuels to | 24 | | purchase gas supply from a low-carbon fuels facility; | 25 | | (3) extending the transmission or distribution system | 26 | | of the natural gas utility to interconnect with a |
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| 1 | | low-carbon fuels facility; | 2 | | (4) purchasing gas produced from a low-carbon fuels | 3 | | facility, whether or not the gas has environmental | 4 | | commodities: | 5 | | (A) to incorporate the gas produced from a | 6 | | low-carbon fuels facility into the supply portfolio of | 7 | | the natural gas utility; or | 8 | | (B) to sell the gas produced from a low-carbon | 9 | | fuels facility directly to the customers of the | 10 | | natural gas utility; | 11 | | (5) participating in a State or federal renewable | 12 | | energy program or project if participation in the program | 13 | | or project by the natural gas utility: | 14 | | (A) consists of the purchase or sale of gas | 15 | | produced by a low-carbon fuels facility or | 16 | | environmental commodities by the natural gas utility; | 17 | | and | 18 | | (B) results in a reduction of the cost of gas | 19 | | produced from a low-carbon fuels facility to the | 20 | | customers of the natural gas utility; | 21 | | (6) providing customers of the natural gas utility | 22 | | with the option to purchase gas produced from a low-carbon | 23 | | fuels facility, with or without environmental commodities, | 24 | | directly from the natural gas utility; | 25 | | (7) any other activity which develops sources of | 26 | | low-carbon fuels in this State for the purpose of |
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| 1 | | providing the environmental benefits to this State noted | 2 | | in subsection (e), creating jobs through the construction | 3 | | and operation of low-carbon fuels facilities in this State | 4 | | or diversifying the supply of energy in this State; or | 5 | | (8) any other prudently incurred investments made by a | 6 | | natural gas utility that contribute to the natural gas | 7 | | utility meeting the targets set forth in subsection (a). | 8 | | (e) The Commission shall approve a low-carbon fuels | 9 | | activity pursuant to subsection (d) if it determines the | 10 | | low-carbon fuels activity investment and expenses are: (1) | 11 | | consistent with the provisions of this Section; and (2) the | 12 | | natural gas utility has demonstrated that the low-carbon fuels | 13 | | activity provides one or more of the following environmental | 14 | | benefits to this State: | 15 | | (1) the reduction or avoidance of emissions of any air | 16 | | pollutant or greenhouse gas in this State; | 17 | | (2) the displacement of geologic natural gas with | 18 | | low-carbon fuels; or | 19 | | (3) the reduction or avoidance of any pollutant that | 20 | | could have an adverse impact on the waters of this State. | 21 | | Investments and costs incurred pursuant to this Section | 22 | | shall be deemed prudent and reasonable if the Commission | 23 | | determines that the natural gas utility's expenditures are | 24 | | consistent with the provisions of this Section. The Commission | 25 | | shall make determinations as to whether the execution of the | 26 | | investments and the costs incurred pursuant to this Section |
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| 1 | | are reasonable and prudent in the natural gas utility's next | 2 | | rate proceeding. | 3 | | (f) The Commission shall review and, by order, approve, or | 4 | | approve as modified, the natural gas utility's low-carbon | 5 | | fuels activity proposal within 180 days after the date on | 6 | | which it is filed. In the event the Commission approves the | 7 | | proposed natural gas activity with modifications, the | 8 | | Commission's order shall not become a final order subject to | 9 | | petitions for rehearing until 15 days after service of same by | 10 | | the Commission. The utility shall have 14 days following the | 11 | | date of service of the order to notify the Commission in | 12 | | writing whether it will accept any modifications so identified | 13 | | in the order or whether it has elected not to proceed with the | 14 | | proposal. If the utility notifies the Commission that it will | 15 | | accept such modifications, the Commission shall issue an | 16 | | amended order, without further hearing, within 14 days | 17 | | following such notification, approving the proposal as | 18 | | modified and such order shall be considered to be a final order | 19 | | of the Commission subject to petitions for rehearing and | 20 | | appellate procedures. | 21 | | (g) All environmental commodities from low-carbon fuels | 22 | | resulting from the purchase of low-carbon fuels for gas supply | 23 | | or the ownership of a low-carbon fuels facility shall be | 24 | | applied to the benefit of gas customers by reducing greenhouse | 25 | | gas emissions in the State of Illinois through: (1) where | 26 | | possible given the nature of the applicable environmental |
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| 1 | | commodities, by offsetting direct greenhouse gas emissions | 2 | | from gas utility operations, including methane emissions, and | 3 | | (2) replacing customer consumption of conventional natural gas | 4 | | with low-carbon fuels, or another application that will reduce | 5 | | greenhouse gas emissions in the State of Illinois. | 6 | | (h) The cumulative amount of estimated rate impact of the | 7 | | low-carbon fuels activities, measured beginning with the date | 8 | | of the natural gas utility's most recent delivery service rate | 9 | | order, shall not exceed an annual average 2% per year of the | 10 | | utility's delivery base rate revenues. Each natural gas | 11 | | utility request for authorization from the Commission under | 12 | | subsection (d) shall include an estimate of the rate impacts | 13 | | associated with the proposed low-carbon fuels activities. If | 14 | | the natural gas utility estimates that the incremental rate | 15 | | impact of a proposed low-carbon fuels natural gas activity | 16 | | causes the natural gas utility to exceed the rate impact | 17 | | limits contained in this subsection, the natural gas utility's | 18 | | filing shall provide for a curtailment or delay the proposed | 19 | | implementation of the low-carbon fuels activity as required to | 20 | | maintain rate impacts below the limits set forth in this | 21 | | subsection. | 22 | | (i) The Commission shall adopt rules governing filing | 23 | | requirements, reporting requirements, and the process for | 24 | | natural gas utilities to fully recover prudently incurred | 25 | | costs associated with low-carbon fuels activity described in | 26 | | subsection (d). Rules adopted by the Commission under this |
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| 1 | | Section may not prohibit an affiliated interest of a natural | 2 | | gas utility from making a capital investment in a low-carbon | 3 | | fuels production project if the affiliated interest, as | 4 | | defined in Section 7-101 of the Public Utilities Act is not a | 5 | | public utility. The Commission shall adopt rules pursuant to | 6 | | this subsection not later than December 31, 2021. | 7 | | Section 90. The Illinois Administrative Procedure Act is | 8 | | amended by adding Section 5-45.8 as follows: | 9 | | (5 ILCS 100/5-45.8 new) | 10 | | Sec. 5-45.8. Emergency rulemaking; Renewable Gas and | 11 | | Low-Carbon Fuels Act. To provide for the expeditious and | 12 | | timely implementation of the Renewable Gas and Low-Carbon | 13 | | Fuels Act, emergency rules implementing the Renewable Gas and | 14 | | Low-Carbon Fuels Act may be adopted in accordance with Section | 15 | | 5-45 by the Illinois Commerce Commission. The adoption of | 16 | | emergency rules authorized by Section 5-45 and this Section is | 17 | | deemed to be necessary for the public interest, safety, and | 18 | | welfare. | 19 | | This Section is repealed on January 1, 2027.
| 20 | | Section 99. Effective date. This Act takes effect upon | 21 | | becoming law.
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