Public Act 099-0536
 
SB2522 EnrolledLRB099 18581 EGJ 42960 b

    AN ACT concerning State government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Power Agency Act is amended by
changing Sections 1-70, 1-75, 1-80, and 1-125 as follows:
 
    (20 ILCS 3855/1-70)
    Sec. 1-70. Agency officials.
    (a) The Agency shall have a Director who meets the
qualifications specified in Section 5-222 of the Civil
Administrative Code of Illinois (20 ILCS 5/5-222).
    (b) Within the Illinois Power Agency, the Agency shall
establish a Planning and Procurement Bureau and may establish a
Resource Development Bureau. Each Bureau shall report to the
Director.
    (c) The Chief of the Planning and Procurement Bureau shall
be appointed by the Director, at the Director's sole
discretion, and (i) shall have at least 5 years of direct
experience in electricity supply planning and procurement and
(ii) shall also hold an advanced degree in risk management,
law, business, or a related field.
    (d) The Chief of the Resource Development Bureau may shall
be appointed by the Director and (i) shall have at least 5
years of direct experience in electric generating project
development and (ii) shall also hold an advanced degree in
economics, engineering, law, business, or a related field.
    (e) The Director shall receive an annual salary of $100,000
or as set by the Compensation Review Board, whichever is
higher. The Bureau Chiefs shall each receive an annual salary
of $85,000 or as set by the Compensation Review Board,
whichever is higher.
    (f) The Director and Bureau Chiefs shall not, for 2 years
prior to appointment or for 2 years after he or she leaves his
or her position, be employed by an electric utility,
independent power producer, power marketer, or alternative
retail electric supplier regulated by the Commission or the
Federal Energy Regulatory Commission.
    (g) The Director and Bureau Chiefs are prohibited from: (i)
owning, directly or indirectly, 5% or more of the voting
capital stock of an electric utility, independent power
producer, power marketer, or alternative retail electric
supplier; (ii) being in any chain of successive ownership of 5%
or more of the voting capital stock of any electric utility,
independent power producer, power marketer, or alternative
retail electric supplier; (iii) receiving any form of
compensation, fee, payment, or other consideration from an
electric utility, independent power producer, power marketer,
or alternative retail electric supplier, including legal fees,
consulting fees, bonuses, or other sums. These limitations do
not apply to any compensation received pursuant to a defined
benefit plan or other form of deferred compensation, provided
that the individual has otherwise severed all ties to the
utility, power producer, power marketer, or alternative retail
electric supplier.
(Source: P.A. 97-618, eff. 10-26-11.)
 
    (20 ILCS 3855/1-75)
    Sec. 1-75. Planning and Procurement Bureau. The Planning
and Procurement Bureau has the following duties and
responsibilities:
    (a) The Planning and Procurement Bureau shall each year,
beginning in 2008, develop procurement plans and conduct
competitive procurement processes in accordance with the
requirements of Section 16-111.5 of the Public Utilities Act
for the eligible retail customers of electric utilities that on
December 31, 2005 provided electric service to at least 100,000
customers in Illinois. The Planning and Procurement Bureau
shall also develop procurement plans and conduct competitive
procurement processes in accordance with the requirements of
Section 16-111.5 of the Public Utilities Act for the eligible
retail customers of small multi-jurisdictional electric
utilities that (i) on December 31, 2005 served less than
100,000 customers in Illinois and (ii) request a procurement
plan for their Illinois jurisdictional load. This Section shall
not apply to a small multi-jurisdictional utility until such
time as a small multi-jurisdictional utility requests the
Agency to prepare a procurement plan for their Illinois
jurisdictional load. For the purposes of this Section, the term
"eligible retail customers" has the same definition as found in
Section 16-111.5(a) of the Public Utilities Act.
        (1) The Agency shall each year, beginning in 2008, as
    needed, issue a request for qualifications for experts or
    expert consulting firms to develop the procurement plans in
    accordance with Section 16-111.5 of the Public Utilities
    Act. In order to qualify an expert or expert consulting
    firm must have:
            (A) direct previous experience assembling
        large-scale power supply plans or portfolios for
        end-use customers;
            (B) an advanced degree in economics, mathematics,
        engineering, risk management, or a related area of
        study;
            (C) 10 years of experience in the electricity
        sector, including managing supply risk;
            (D) expertise in wholesale electricity market
        rules, including those established by the Federal
        Energy Regulatory Commission and regional transmission
        organizations;
            (E) expertise in credit protocols and familiarity
        with contract protocols;
            (F) adequate resources to perform and fulfill the
        required functions and responsibilities; and
            (G) the absence of a conflict of interest and
        inappropriate bias for or against potential bidders or
        the affected electric utilities.
        (2) The Agency shall each year, as needed, issue a
    request for qualifications for a procurement administrator
    to conduct the competitive procurement processes in
    accordance with Section 16-111.5 of the Public Utilities
    Act. In order to qualify an expert or expert consulting
    firm must have:
            (A) direct previous experience administering a
        large-scale competitive procurement process;
            (B) an advanced degree in economics, mathematics,
        engineering, or a related area of study;
            (C) 10 years of experience in the electricity
        sector, including risk management experience;
            (D) expertise in wholesale electricity market
        rules, including those established by the Federal
        Energy Regulatory Commission and regional transmission
        organizations;
            (E) expertise in credit and contract protocols;
            (F) adequate resources to perform and fulfill the
        required functions and responsibilities; and
            (G) the absence of a conflict of interest and
        inappropriate bias for or against potential bidders or
        the affected electric utilities.
        (3) The Agency shall provide affected utilities and
    other interested parties with the lists of qualified
    experts or expert consulting firms identified through the
    request for qualifications processes that are under
    consideration to develop the procurement plans and to serve
    as the procurement administrator. The Agency shall also
    provide each qualified expert's or expert consulting
    firm's response to the request for qualifications. All
    information provided under this subparagraph shall also be
    provided to the Commission. The Agency may provide by rule
    for fees associated with supplying the information to
    utilities and other interested parties. These parties
    shall, within 5 business days, notify the Agency in writing
    if they object to any experts or expert consulting firms on
    the lists. Objections shall be based on:
            (A) failure to satisfy qualification criteria;
            (B) identification of a conflict of interest; or
            (C) evidence of inappropriate bias for or against
        potential bidders or the affected utilities.
        The Agency shall remove experts or expert consulting
    firms from the lists within 10 days if there is a
    reasonable basis for an objection and provide the updated
    lists to the affected utilities and other interested
    parties. If the Agency fails to remove an expert or expert
    consulting firm from a list, an objecting party may seek
    review by the Commission within 5 days thereafter by filing
    a petition, and the Commission shall render a ruling on the
    petition within 10 days. There is no right of appeal of the
    Commission's ruling.
        (4) The Agency shall issue requests for proposals to
    the qualified experts or expert consulting firms to develop
    a procurement plan for the affected utilities and to serve
    as procurement administrator.
        (5) The Agency shall select an expert or expert
    consulting firm to develop procurement plans based on the
    proposals submitted and shall award contracts of up to 5
    years to those selected.
        (6) The Agency shall select an expert or expert
    consulting firm, with approval of the Commission, to serve
    as procurement administrator based on the proposals
    submitted. If the Commission rejects, within 5 days, the
    Agency's selection, the Agency shall submit another
    recommendation within 3 days based on the proposals
    submitted. The Agency shall award a 5-year contract to the
    expert or expert consulting firm so selected with
    Commission approval.
    (b) The experts or expert consulting firms retained by the
Agency shall, as appropriate, prepare procurement plans, and
conduct a competitive procurement process as prescribed in
Section 16-111.5 of the Public Utilities Act, to ensure
adequate, reliable, affordable, efficient, and environmentally
sustainable electric service at the lowest total cost over
time, taking into account any benefits of price stability, for
eligible retail customers of electric utilities that on
December 31, 2005 provided electric service to at least 100,000
customers in the State of Illinois, and for eligible Illinois
retail customers of small multi-jurisdictional electric
utilities that (i) on December 31, 2005 served less than
100,000 customers in Illinois and (ii) request a procurement
plan for their Illinois jurisdictional load.
    (c) Renewable portfolio standard.
        (1) The procurement plans shall include cost-effective
    renewable energy resources. A minimum percentage of each
    utility's total supply to serve the load of eligible retail
    customers, as defined in Section 16-111.5(a) of the Public
    Utilities Act, procured for each of the following years
    shall be generated from cost-effective renewable energy
    resources: at least 2% by June 1, 2008; at least 4% by June
    1, 2009; at least 5% by June 1, 2010; at least 6% by June 1,
    2011; at least 7% by June 1, 2012; at least 8% by June 1,
    2013; at least 9% by June 1, 2014; at least 10% by June 1,
    2015; and increasing by at least 1.5% each year thereafter
    to at least 25% by June 1, 2025. To the extent that it is
    available, at least 75% of the renewable energy resources
    used to meet these standards shall come from wind
    generation and, beginning on June 1, 2011, at least the
    following percentages of the renewable energy resources
    used to meet these standards shall come from photovoltaics
    on the following schedule: 0.5% by June 1, 2012, 1.5% by
    June 1, 2013; 3% by June 1, 2014; and 6% by June 1, 2015 and
    thereafter. Of the renewable energy resources procured
    pursuant to this Section, at least the following
    percentages shall come from distributed renewable energy
    generation devices: 0.5% by June 1, 2013, 0.75% by June 1,
    2014, and 1% by June 1, 2015 and thereafter. To the extent
    available, half of the renewable energy resources procured
    from distributed renewable energy generation shall come
    from devices of less than 25 kilowatts in nameplate
    capacity. Renewable energy resources procured from
    distributed generation devices may also count towards the
    required percentages for wind and solar photovoltaics.
    Procurement of renewable energy resources from distributed
    renewable energy generation devices shall be done on an
    annual basis through multi-year contracts of no less than 5
    years, and shall consist solely of renewable energy
    credits.
        The Agency shall create credit requirements for
    suppliers of distributed renewable energy. In order to
    minimize the administrative burden on contracting
    entities, the Agency shall solicit the use of third-party
    organizations to aggregate distributed renewable energy
    into groups of no less than one megawatt in installed
    capacity. These third-party organizations shall administer
    contracts with individual distributed renewable energy
    generation device owners. An individual distributed
    renewable energy generation device owner shall have the
    ability to measure the output of his or her distributed
    renewable energy generation device.
        For purposes of this subsection (c), "cost-effective"
    means that the costs of procuring renewable energy
    resources do not cause the limit stated in paragraph (2) of
    this subsection (c) to be exceeded and do not exceed
    benchmarks based on market prices for renewable energy
    resources in the region, which shall be developed by the
    procurement administrator, in consultation with the
    Commission staff, Agency staff, and the procurement
    monitor and shall be subject to Commission review and
    approval.
        (2) For purposes of this subsection (c), the required
    procurement of cost-effective renewable energy resources
    for a particular year shall be measured as a percentage of
    the actual amount of electricity (megawatt-hours) supplied
    by the electric utility to eligible retail customers in the
    planning year ending immediately prior to the procurement.
    For purposes of this subsection (c), the amount paid per
    kilowatthour means the total amount paid for electric
    service expressed on a per kilowatthour basis. For purposes
    of this subsection (c), the total amount paid for electric
    service includes without limitation amounts paid for
    supply, transmission, distribution, surcharges, and add-on
    taxes.
        Notwithstanding the requirements of this subsection
    (c), the total of renewable energy resources procured
    pursuant to the procurement plan for any single year shall
    be reduced by an amount necessary to limit the annual
    estimated average net increase due to the costs of these
    resources included in the amounts paid by eligible retail
    customers in connection with electric service to:
            (A) in 2008, no more than 0.5% of the amount paid
        per kilowatthour by those customers during the year
        ending May 31, 2007;
            (B) in 2009, the greater of an additional 0.5% of
        the amount paid per kilowatthour by those customers
        during the year ending May 31, 2008 or 1% of the amount
        paid per kilowatthour by those customers during the
        year ending May 31, 2007;
            (C) in 2010, the greater of an additional 0.5% of
        the amount paid per kilowatthour by those customers
        during the year ending May 31, 2009 or 1.5% of the
        amount paid per kilowatthour by those customers during
        the year ending May 31, 2007;
            (D) in 2011, the greater of an additional 0.5% of
        the amount paid per kilowatthour by those customers
        during the year ending May 31, 2010 or 2% of the amount
        paid per kilowatthour by those customers during the
        year ending May 31, 2007; and
            (E) thereafter, the amount of renewable energy
        resources procured pursuant to the procurement plan
        for any single year shall be reduced by an amount
        necessary to limit the estimated average net increase
        due to the cost of these resources included in the
        amounts paid by eligible retail customers in
        connection with electric service to no more than the
        greater of 2.015% of the amount paid per kilowatthour
        by those customers during the year ending May 31, 2007
        or the incremental amount per kilowatthour paid for
        these resources in 2011.
            No later than June 30, 2011, the Commission shall
        review the limitation on the amount of renewable energy
        resources procured pursuant to this subsection (c) and
        report to the General Assembly its findings as to
        whether that limitation unduly constrains the
        procurement of cost-effective renewable energy
        resources.
        (3) Through June 1, 2011, renewable energy resources
    shall be counted for the purpose of meeting the renewable
    energy standards set forth in paragraph (1) of this
    subsection (c) only if they are generated from facilities
    located in the State, provided that cost-effective
    renewable energy resources are available from those
    facilities. If those cost-effective resources are not
    available in Illinois, they shall be procured in states
    that adjoin Illinois and may be counted towards compliance.
    If those cost-effective resources are not available in
    Illinois or in states that adjoin Illinois, they shall be
    purchased elsewhere and shall be counted towards
    compliance. After June 1, 2011, cost-effective renewable
    energy resources located in Illinois and in states that
    adjoin Illinois may be counted towards compliance with the
    standards set forth in paragraph (1) of this subsection
    (c). If those cost-effective resources are not available in
    Illinois or in states that adjoin Illinois, they shall be
    purchased elsewhere and shall be counted towards
    compliance.
        (4) The electric utility shall retire all renewable
    energy credits used to comply with the standard.
        (5) Beginning with the year commencing June 1, 2010, an
    electric utility subject to this subsection (c) shall apply
    the lesser of the maximum alternative compliance payment
    rate or the most recent estimated alternative compliance
    payment rate for its service territory for the
    corresponding compliance period, established pursuant to
    subsection (d) of Section 16-115D of the Public Utilities
    Act to its retail customers that take service pursuant to
    the electric utility's hourly pricing tariff or tariffs.
    The electric utility shall retain all amounts collected as
    a result of the application of the alternative compliance
    payment rate or rates to such customers, and, beginning in
    2011, the utility shall include in the information provided
    under item (1) of subsection (d) of Section 16-111.5 of the
    Public Utilities Act the amounts collected under the
    alternative compliance payment rate or rates for the prior
    year ending May 31. Notwithstanding any limitation on the
    procurement of renewable energy resources imposed by item
    (2) of this subsection (c), the Agency shall increase its
    spending on the purchase of renewable energy resources to
    be procured by the electric utility for the next plan year
    by an amount equal to the amounts collected by the utility
    under the alternative compliance payment rate or rates in
    the prior year ending May 31. Beginning April 1, 2012, and
    each year thereafter, the Agency shall prepare a public
    report for the General Assembly and Illinois Commerce
    Commission that shall include, but not necessarily be
    limited to:
            (A) a comparison of the costs associated with the
        Agency's procurement of renewable energy resources to
        (1) the Agency's costs associated with electricity
        generated by other types of generation facilities and
        (2) the benefits associated with the Agency's
        procurement of renewable energy resources; and
            (B) an analysis of the rate impacts associated with
        the Illinois Power Agency's procurement of renewable
        resources, including, but not limited to, any
        long-term contracts, on the eligible retail customers
        of electric utilities.
        The analysis shall include the Agency's estimate of the
    total dollar impact that the Agency's procurement of
    renewable resources has had on the annual electricity bills
    of the customer classes that comprise each eligible retail
    customer class taking service from an electric utility. The
    Agency's report shall also analyze how the operation of the
    alternative compliance payment mechanism, any long-term
    contracts, or other aspects of the applicable renewable
    portfolio standards impacts the rates of customers of
    alternative retail electric suppliers.
    (d) Clean coal portfolio standard.
        (1) The procurement plans shall include electricity
    generated using clean coal. Each utility shall enter into
    one or more sourcing agreements with the initial clean coal
    facility, as provided in paragraph (3) of this subsection
    (d), covering electricity generated by the initial clean
    coal facility representing at least 5% of each utility's
    total supply to serve the load of eligible retail customers
    in 2015 and each year thereafter, as described in paragraph
    (3) of this subsection (d), subject to the limits specified
    in paragraph (2) of this subsection (d). It is the goal of
    the State that by January 1, 2025, 25% of the electricity
    used in the State shall be generated by cost-effective
    clean coal facilities. For purposes of this subsection (d),
    "cost-effective" means that the expenditures pursuant to
    such sourcing agreements do not cause the limit stated in
    paragraph (2) of this subsection (d) to be exceeded and do
    not exceed cost-based benchmarks, which shall be developed
    to assess all expenditures pursuant to such sourcing
    agreements covering electricity generated by clean coal
    facilities, other than the initial clean coal facility, by
    the procurement administrator, in consultation with the
    Commission staff, Agency staff, and the procurement
    monitor and shall be subject to Commission review and
    approval.
        A utility party to a sourcing agreement shall
    immediately retire any emission credits that it receives in
    connection with the electricity covered by such agreement.
        Utilities shall maintain adequate records documenting
    the purchases under the sourcing agreement to comply with
    this subsection (d) and shall file an accounting with the
    load forecast that must be filed with the Agency by July 15
    of each year, in accordance with subsection (d) of Section
    16-111.5 of the Public Utilities Act.
        A utility shall be deemed to have complied with the
    clean coal portfolio standard specified in this subsection
    (d) if the utility enters into a sourcing agreement as
    required by this subsection (d).
        (2) For purposes of this subsection (d), the required
    execution of sourcing agreements with the initial clean
    coal facility for a particular year shall be measured as a
    percentage of the actual amount of electricity
    (megawatt-hours) supplied by the electric utility to
    eligible retail customers in the planning year ending
    immediately prior to the agreement's execution. For
    purposes of this subsection (d), the amount paid per
    kilowatthour means the total amount paid for electric
    service expressed on a per kilowatthour basis. For purposes
    of this subsection (d), the total amount paid for electric
    service includes without limitation amounts paid for
    supply, transmission, distribution, surcharges and add-on
    taxes.
        Notwithstanding the requirements of this subsection
    (d), the total amount paid under sourcing agreements with
    clean coal facilities pursuant to the procurement plan for
    any given year shall be reduced by an amount necessary to
    limit the annual estimated average net increase due to the
    costs of these resources included in the amounts paid by
    eligible retail customers in connection with electric
    service to:
            (A) in 2010, no more than 0.5% of the amount paid
        per kilowatthour by those customers during the year
        ending May 31, 2009;
            (B) in 2011, the greater of an additional 0.5% of
        the amount paid per kilowatthour by those customers
        during the year ending May 31, 2010 or 1% of the amount
        paid per kilowatthour by those customers during the
        year ending May 31, 2009;
            (C) in 2012, the greater of an additional 0.5% of
        the amount paid per kilowatthour by those customers
        during the year ending May 31, 2011 or 1.5% of the
        amount paid per kilowatthour by those customers during
        the year ending May 31, 2009;
            (D) in 2013, the greater of an additional 0.5% of
        the amount paid per kilowatthour by those customers
        during the year ending May 31, 2012 or 2% of the amount
        paid per kilowatthour by those customers during the
        year ending May 31, 2009; and
            (E) thereafter, the total amount paid under
        sourcing agreements with clean coal facilities
        pursuant to the procurement plan for any single year
        shall be reduced by an amount necessary to limit the
        estimated average net increase due to the cost of these
        resources included in the amounts paid by eligible
        retail customers in connection with electric service
        to no more than the greater of (i) 2.015% of the amount
        paid per kilowatthour by those customers during the
        year ending May 31, 2009 or (ii) the incremental amount
        per kilowatthour paid for these resources in 2013.
        These requirements may be altered only as provided by
        statute.
        No later than June 30, 2015, the Commission shall
    review the limitation on the total amount paid under
    sourcing agreements, if any, with clean coal facilities
    pursuant to this subsection (d) and report to the General
    Assembly its findings as to whether that limitation unduly
    constrains the amount of electricity generated by
    cost-effective clean coal facilities that is covered by
    sourcing agreements.
        (3) Initial clean coal facility. In order to promote
    development of clean coal facilities in Illinois, each
    electric utility subject to this Section shall execute a
    sourcing agreement to source electricity from a proposed
    clean coal facility in Illinois (the "initial clean coal
    facility") that will have a nameplate capacity of at least
    500 MW when commercial operation commences, that has a
    final Clean Air Act permit on the effective date of this
    amendatory Act of the 95th General Assembly, and that will
    meet the definition of clean coal facility in Section 1-10
    of this Act when commercial operation commences. The
    sourcing agreements with this initial clean coal facility
    shall be subject to both approval of the initial clean coal
    facility by the General Assembly and satisfaction of the
    requirements of paragraph (4) of this subsection (d) and
    shall be executed within 90 days after any such approval by
    the General Assembly. The Agency and the Commission shall
    have authority to inspect all books and records associated
    with the initial clean coal facility during the term of
    such a sourcing agreement. A utility's sourcing agreement
    for electricity produced by the initial clean coal facility
    shall include:
            (A) a formula contractual price (the "contract
        price") approved pursuant to paragraph (4) of this
        subsection (d), which shall:
                (i) be determined using a cost of service
            methodology employing either a level or deferred
            capital recovery component, based on a capital
            structure consisting of 45% equity and 55% debt,
            and a return on equity as may be approved by the
            Federal Energy Regulatory Commission, which in any
            case may not exceed the lower of 11.5% or the rate
            of return approved by the General Assembly
            pursuant to paragraph (4) of this subsection (d);
            and
                (ii) provide that all miscellaneous net
            revenue, including but not limited to net revenue
            from the sale of emission allowances, if any,
            substitute natural gas, if any, grants or other
            support provided by the State of Illinois or the
            United States Government, firm transmission
            rights, if any, by-products produced by the
            facility, energy or capacity derived from the
            facility and not covered by a sourcing agreement
            pursuant to paragraph (3) of this subsection (d) or
            item (5) of subsection (d) of Section 16-115 of the
            Public Utilities Act, whether generated from the
            synthesis gas derived from coal, from SNG, or from
            natural gas, shall be credited against the revenue
            requirement for this initial clean coal facility;
            (B) power purchase provisions, which shall:
                (i) provide that the utility party to such
            sourcing agreement shall pay the contract price
            for electricity delivered under such sourcing
            agreement;
                (ii) require delivery of electricity to the
            regional transmission organization market of the
            utility that is party to such sourcing agreement;
                (iii) require the utility party to such
            sourcing agreement to buy from the initial clean
            coal facility in each hour an amount of energy
            equal to all clean coal energy made available from
            the initial clean coal facility during such hour
            times a fraction, the numerator of which is such
            utility's retail market sales of electricity
            (expressed in kilowatthours sold) in the State
            during the prior calendar month and the
            denominator of which is the total retail market
            sales of electricity (expressed in kilowatthours
            sold) in the State by utilities during such prior
            month and the sales of electricity (expressed in
            kilowatthours sold) in the State by alternative
            retail electric suppliers during such prior month
            that are subject to the requirements of this
            subsection (d) and paragraph (5) of subsection (d)
            of Section 16-115 of the Public Utilities Act,
            provided that the amount purchased by the utility
            in any year will be limited by paragraph (2) of
            this subsection (d); and
                (iv) be considered pre-existing contracts in
            such utility's procurement plans for eligible
            retail customers;
            (C) contract for differences provisions, which
        shall:
                (i) require the utility party to such sourcing
            agreement to contract with the initial clean coal
            facility in each hour with respect to an amount of
            energy equal to all clean coal energy made
            available from the initial clean coal facility
            during such hour times a fraction, the numerator of
            which is such utility's retail market sales of
            electricity (expressed in kilowatthours sold) in
            the utility's service territory in the State
            during the prior calendar month and the
            denominator of which is the total retail market
            sales of electricity (expressed in kilowatthours
            sold) in the State by utilities during such prior
            month and the sales of electricity (expressed in
            kilowatthours sold) in the State by alternative
            retail electric suppliers during such prior month
            that are subject to the requirements of this
            subsection (d) and paragraph (5) of subsection (d)
            of Section 16-115 of the Public Utilities Act,
            provided that the amount paid by the utility in any
            year will be limited by paragraph (2) of this
            subsection (d);
                (ii) provide that the utility's payment
            obligation in respect of the quantity of
            electricity determined pursuant to the preceding
            clause (i) shall be limited to an amount equal to
            (1) the difference between the contract price
            determined pursuant to subparagraph (A) of
            paragraph (3) of this subsection (d) and the
            day-ahead price for electricity delivered to the
            regional transmission organization market of the
            utility that is party to such sourcing agreement
            (or any successor delivery point at which such
            utility's supply obligations are financially
            settled on an hourly basis) (the "reference
            price") on the day preceding the day on which the
            electricity is delivered to the initial clean coal
            facility busbar, multiplied by (2) the quantity of
            electricity determined pursuant to the preceding
            clause (i); and
                (iii) not require the utility to take physical
            delivery of the electricity produced by the
            facility;
            (D) general provisions, which shall:
                (i) specify a term of no more than 30 years,
            commencing on the commercial operation date of the
            facility;
                (ii) provide that utilities shall maintain
            adequate records documenting purchases under the
            sourcing agreements entered into to comply with
            this subsection (d) and shall file an accounting
            with the load forecast that must be filed with the
            Agency by July 15 of each year, in accordance with
            subsection (d) of Section 16-111.5 of the Public
            Utilities Act;
                (iii) provide that all costs associated with
            the initial clean coal facility will be
            periodically reported to the Federal Energy
            Regulatory Commission and to purchasers in
            accordance with applicable laws governing
            cost-based wholesale power contracts;
                (iv) permit the Illinois Power Agency to
            assume ownership of the initial clean coal
            facility, without monetary consideration and
            otherwise on reasonable terms acceptable to the
            Agency, if the Agency so requests no less than 3
            years prior to the end of the stated contract term;
                (v) require the owner of the initial clean coal
            facility to provide documentation to the
            Commission each year, starting in the facility's
            first year of commercial operation, accurately
            reporting the quantity of carbon emissions from
            the facility that have been captured and
            sequestered and report any quantities of carbon
            released from the site or sites at which carbon
            emissions were sequestered in prior years, based
            on continuous monitoring of such sites. If, in any
            year after the first year of commercial operation,
            the owner of the facility fails to demonstrate that
            the initial clean coal facility captured and
            sequestered at least 50% of the total carbon
            emissions that the facility would otherwise emit
            or that sequestration of emissions from prior
            years has failed, resulting in the release of
            carbon dioxide into the atmosphere, the owner of
            the facility must offset excess emissions. Any
            such carbon offsets must be permanent, additional,
            verifiable, real, located within the State of
            Illinois, and legally and practicably enforceable.
            The cost of such offsets for the facility that are
            not recoverable shall not exceed $15 million in any
            given year. No costs of any such purchases of
            carbon offsets may be recovered from a utility or
            its customers. All carbon offsets purchased for
            this purpose and any carbon emission credits
            associated with sequestration of carbon from the
            facility must be permanently retired. The initial
            clean coal facility shall not forfeit its
            designation as a clean coal facility if the
            facility fails to fully comply with the applicable
            carbon sequestration requirements in any given
            year, provided the requisite offsets are
            purchased. However, the Attorney General, on
            behalf of the People of the State of Illinois, may
            specifically enforce the facility's sequestration
            requirement and the other terms of this contract
            provision. Compliance with the sequestration
            requirements and offset purchase requirements
            specified in paragraph (3) of this subsection (d)
            shall be reviewed annually by an independent
            expert retained by the owner of the initial clean
            coal facility, with the advance written approval
            of the Attorney General. The Commission may, in the
            course of the review specified in item (vii),
            reduce the allowable return on equity for the
            facility if the facility wilfully fails to comply
            with the carbon capture and sequestration
            requirements set forth in this item (v);
                (vi) include limits on, and accordingly
            provide for modification of, the amount the
            utility is required to source under the sourcing
            agreement consistent with paragraph (2) of this
            subsection (d);
                (vii) require Commission review: (1) to
            determine the justness, reasonableness, and
            prudence of the inputs to the formula referenced in
            subparagraphs (A)(i) through (A)(iii) of paragraph
            (3) of this subsection (d), prior to an adjustment
            in those inputs including, without limitation, the
            capital structure and return on equity, fuel
            costs, and other operations and maintenance costs
            and (2) to approve the costs to be passed through
            to customers under the sourcing agreement by which
            the utility satisfies its statutory obligations.
            Commission review shall occur no less than every 3
            years, regardless of whether any adjustments have
            been proposed, and shall be completed within 9
            months;
                (viii) limit the utility's obligation to such
            amount as the utility is allowed to recover through
            tariffs filed with the Commission, provided that
            neither the clean coal facility nor the utility
            waives any right to assert federal pre-emption or
            any other argument in response to a purported
            disallowance of recovery costs;
                (ix) limit the utility's or alternative retail
            electric supplier's obligation to incur any
            liability until such time as the facility is in
            commercial operation and generating power and
            energy and such power and energy is being delivered
            to the facility busbar;
                (x) provide that the owner or owners of the
            initial clean coal facility, which is the
            counterparty to such sourcing agreement, shall
            have the right from time to time to elect whether
            the obligations of the utility party thereto shall
            be governed by the power purchase provisions or the
            contract for differences provisions;
                (xi) append documentation showing that the
            formula rate and contract, insofar as they relate
            to the power purchase provisions, have been
            approved by the Federal Energy Regulatory
            Commission pursuant to Section 205 of the Federal
            Power Act;
                (xii) provide that any changes to the terms of
            the contract, insofar as such changes relate to the
            power purchase provisions, are subject to review
            under the public interest standard applied by the
            Federal Energy Regulatory Commission pursuant to
            Sections 205 and 206 of the Federal Power Act; and
                (xiii) conform with customary lender
            requirements in power purchase agreements used as
            the basis for financing non-utility generators.
        (4) Effective date of sourcing agreements with the
    initial clean coal facility.
        Any proposed sourcing agreement with the initial clean
    coal facility shall not become effective unless the
    following reports are prepared and submitted and
    authorizations and approvals obtained:
            (i) Facility cost report. The owner of the initial
        clean coal facility shall submit to the Commission, the
        Agency, and the General Assembly a front-end
        engineering and design study, a facility cost report,
        method of financing (including but not limited to
        structure and associated costs), and an operating and
        maintenance cost quote for the facility (collectively
        "facility cost report"), which shall be prepared in
        accordance with the requirements of this paragraph (4)
        of subsection (d) of this Section, and shall provide
        the Commission and the Agency access to the work
        papers, relied upon documents, and any other backup
        documentation related to the facility cost report.
            (ii) Commission report. Within 6 months following
        receipt of the facility cost report, the Commission, in
        consultation with the Agency, shall submit a report to
        the General Assembly setting forth its analysis of the
        facility cost report. Such report shall include, but
        not be limited to, a comparison of the costs associated
        with electricity generated by the initial clean coal
        facility to the costs associated with electricity
        generated by other types of generation facilities, an
        analysis of the rate impacts on residential and small
        business customers over the life of the sourcing
        agreements, and an analysis of the likelihood that the
        initial clean coal facility will commence commercial
        operation by and be delivering power to the facility's
        busbar by 2016. To assist in the preparation of its
        report, the Commission, in consultation with the
        Agency, may hire one or more experts or consultants,
        the costs of which shall be paid for by the owner of
        the initial clean coal facility. The Commission and
        Agency may begin the process of selecting such experts
        or consultants prior to receipt of the facility cost
        report.
            (iii) General Assembly approval. The proposed
        sourcing agreements shall not take effect unless,
        based on the facility cost report and the Commission's
        report, the General Assembly enacts authorizing
        legislation approving (A) the projected price, stated
        in cents per kilowatthour, to be charged for
        electricity generated by the initial clean coal
        facility, (B) the projected impact on residential and
        small business customers' bills over the life of the
        sourcing agreements, and (C) the maximum allowable
        return on equity for the project; and
            (iv) Commission review. If the General Assembly
        enacts authorizing legislation pursuant to
        subparagraph (iii) approving a sourcing agreement, the
        Commission shall, within 90 days of such enactment,
        complete a review of such sourcing agreement. During
        such time period, the Commission shall implement any
        directive of the General Assembly, resolve any
        disputes between the parties to the sourcing agreement
        concerning the terms of such agreement, approve the
        form of such agreement, and issue an order finding that
        the sourcing agreement is prudent and reasonable.
        The facility cost report shall be prepared as follows:
            (A) The facility cost report shall be prepared by
        duly licensed engineering and construction firms
        detailing the estimated capital costs payable to one or
        more contractors or suppliers for the engineering,
        procurement and construction of the components
        comprising the initial clean coal facility and the
        estimated costs of operation and maintenance of the
        facility. The facility cost report shall include:
                (i) an estimate of the capital cost of the core
            plant based on one or more front end engineering
            and design studies for the gasification island and
            related facilities. The core plant shall include
            all civil, structural, mechanical, electrical,
            control, and safety systems.
                (ii) an estimate of the capital cost of the
            balance of the plant, including any capital costs
            associated with sequestration of carbon dioxide
            emissions and all interconnects and interfaces
            required to operate the facility, such as
            transmission of electricity, construction or
            backfeed power supply, pipelines to transport
            substitute natural gas or carbon dioxide, potable
            water supply, natural gas supply, water supply,
            water discharge, landfill, access roads, and coal
            delivery.
            The quoted construction costs shall be expressed
        in nominal dollars as of the date that the quote is
        prepared and shall include capitalized financing costs
        during construction, taxes, insurance, and other
        owner's costs, and an assumed escalation in materials
        and labor beyond the date as of which the construction
        cost quote is expressed.
            (B) The front end engineering and design study for
        the gasification island and the cost study for the
        balance of plant shall include sufficient design work
        to permit quantification of major categories of
        materials, commodities and labor hours, and receipt of
        quotes from vendors of major equipment required to
        construct and operate the clean coal facility.
            (C) The facility cost report shall also include an
        operating and maintenance cost quote that will provide
        the estimated cost of delivered fuel, personnel,
        maintenance contracts, chemicals, catalysts,
        consumables, spares, and other fixed and variable
        operations and maintenance costs. The delivered fuel
        cost estimate will be provided by a recognized third
        party expert or experts in the fuel and transportation
        industries. The balance of the operating and
        maintenance cost quote, excluding delivered fuel
        costs, will be developed based on the inputs provided
        by duly licensed engineering and construction firms
        performing the construction cost quote, potential
        vendors under long-term service agreements and plant
        operating agreements, or recognized third party plant
        operator or operators.
            The operating and maintenance cost quote
        (including the cost of the front end engineering and
        design study) shall be expressed in nominal dollars as
        of the date that the quote is prepared and shall
        include taxes, insurance, and other owner's costs, and
        an assumed escalation in materials and labor beyond the
        date as of which the operating and maintenance cost
        quote is expressed.
            (D) The facility cost report shall also include an
        analysis of the initial clean coal facility's ability
        to deliver power and energy into the applicable
        regional transmission organization markets and an
        analysis of the expected capacity factor for the
        initial clean coal facility.
            (E) Amounts paid to third parties unrelated to the
        owner or owners of the initial clean coal facility to
        prepare the core plant construction cost quote,
        including the front end engineering and design study,
        and the operating and maintenance cost quote will be
        reimbursed through Coal Development Bonds.
        (5) Re-powering and retrofitting coal-fired power
    plants previously owned by Illinois utilities to qualify as
    clean coal facilities. During the 2009 procurement
    planning process and thereafter, the Agency and the
    Commission shall consider sourcing agreements covering
    electricity generated by power plants that were previously
    owned by Illinois utilities and that have been or will be
    converted into clean coal facilities, as defined by Section
    1-10 of this Act. Pursuant to such procurement planning
    process, the owners of such facilities may propose to the
    Agency sourcing agreements with utilities and alternative
    retail electric suppliers required to comply with
    subsection (d) of this Section and item (5) of subsection
    (d) of Section 16-115 of the Public Utilities Act, covering
    electricity generated by such facilities. In the case of
    sourcing agreements that are power purchase agreements,
    the contract price for electricity sales shall be
    established on a cost of service basis. In the case of
    sourcing agreements that are contracts for differences,
    the contract price from which the reference price is
    subtracted shall be established on a cost of service basis.
    The Agency and the Commission may approve any such utility
    sourcing agreements that do not exceed cost-based
    benchmarks developed by the procurement administrator, in
    consultation with the Commission staff, Agency staff and
    the procurement monitor, subject to Commission review and
    approval. The Commission shall have authority to inspect
    all books and records associated with these clean coal
    facilities during the term of any such contract.
        (6) Costs incurred under this subsection (d) or
    pursuant to a contract entered into under this subsection
    (d) shall be deemed prudently incurred and reasonable in
    amount and the electric utility shall be entitled to full
    cost recovery pursuant to the tariffs filed with the
    Commission.
    (e) The draft procurement plans are subject to public
comment, as required by Section 16-111.5 of the Public
Utilities Act.
    (f) The Agency shall submit the final procurement plan to
the Commission. The Agency shall revise a procurement plan if
the Commission determines that it does not meet the standards
set forth in Section 16-111.5 of the Public Utilities Act.
    (g) The Agency shall assess fees to each affected utility
to recover the costs incurred in preparation of the annual
procurement plan for the utility.
    (h) The Agency shall assess fees to each bidder to recover
the costs incurred in connection with a competitive procurement
process.
(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;
97-618, eff. 10-26-11; 97-658, eff. 1-13-12; 97-813, eff.
7-13-12; 98-463, eff. 8-16-13.)
 
    (20 ILCS 3855/1-80)
    Sec. 1-80. Resource Development Bureau. Upon its
establishment by the Agency, the The Resource Development
Bureau has the following duties and responsibilities:
        (a) At the Agency's discretion, conduct feasibility
    studies on the construction of any facility. Funding for a
    study shall come from either:
            (i) fees assessed by the Agency on municipal
        electric systems, governmental aggregators, unit or
        units of local government, or rural electric
        cooperatives requesting the feasibility study; or
            (ii) an appropriation from the General Assembly.
        (b) If the Agency undertakes the construction of a
    facility, moneys generated from the sale of revenue bonds
    by the Authority for the facility shall be used to
    reimburse the source of the money used for the facility's
    feasibility study.
        (c) The Agency may develop, finance, construct, or
    operate electric generation and co-generation facilities
    that use indigenous coal or renewable resources, or both,
    financed with bonds issued by the Authority on behalf of
    the Agency. Any such facility that uses coal must be a
    clean coal facility and must be constructed in a location
    where the geology is suitable for carbon sequestration. The
    Agency may also develop, finance, construct, or operate a
    carbon sequestration facility.
            (1) The Agency may enter into contractual
        arrangements with private and public entities,
        including but not limited to municipal electric
        systems, governmental aggregators, and rural electric
        cooperatives, to plan, site, construct, improve,
        rehabilitate, and operate those electric generation
        and co-generation facilities. No contract shall be
        entered into by the Agency that would jeopardize the
        tax-exempt status of any bond issued in connection with
        a project for which the Agency entered into the
        contract.
            (2) The Agency shall hold at least one public
        hearing before entering into any such contractual
        arrangements. At least 30-days' notice of the hearing
        shall be given by publication once in each week during
        that period in 6 newspapers within the State, at least
        one of which has a circulation area that includes the
        location of the proposed facility.
            (3) The first facility that the Agency develops,
        finances, or constructs shall be a facility that uses
        coal produced in Illinois. The Agency may, however,
        also develop, finance, or construct renewable energy
        facilities after work on the first facility has
        commenced.
            (4) The Agency may not develop, finance, or
        construct a nuclear power plant.
            (5) The Agency shall assess fees to applicants
        seeking to partner with the Agency on projects.
        (d) Use of electricity generated by the Agency's
    facilities. The Agency may supply electricity produced by
    the Agency's facilities to municipal electric systems,
    governmental aggregators, or rural electric cooperatives
    in Illinois. The electricity shall be supplied at cost.
            (1) Contracts to supply power and energy from the
        Agency's facilities shall provide for the effectuation
        of the policies set forth in this Act.
            (2) The contracts shall also provide that,
        notwithstanding any provision in the Public Utilities
        Act, entities supplied with power and energy from an
        Agency facility shall supply the power and energy to
        retail customers at the same price paid to purchase
        power and energy from the Agency.
    (e) Electric utilities shall not be required to purchase
electricity directly or indirectly from facilities developed
or sponsored by the Agency.
    (f) The Agency may sell excess capacity and excess energy
into the wholesale electric market at prevailing market rates;
provided, however, the Agency may not sell excess capacity or
excess energy through the procurement process described in
Section 16-111.5 of the Public Utilities Act.
    (g) The Agency shall not directly sell electric power and
energy to retail customers. Nothing in this paragraph shall be
construed to prohibit sales to municipal electric systems,
governmental aggregators, or rural electric cooperatives.
(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09.)
 
    (20 ILCS 3855/1-125)
    Sec. 1-125. Agency annual reports. By February 15 of each
year December 1, 2011 and each December 1 thereafter, the
Agency shall report annually to the Governor and the General
Assembly on the operations and transactions of the Agency. The
annual report shall include, but not be limited to, each of the
following:
        (1) The average quantity, price, and term of all
    contracts for electricity procured under the procurement
    plans for electric utilities.
        (2) (Blank). The quantity, price, and rate impact of
    all renewable resources purchased under the electricity
    procurement plans for electric utilities.
        (3) The quantity, price, and rate impact of all energy
    efficiency and demand response measures purchased for
    electric utilities, and any measures included in the
    procurement plan pursuant to Section 16-111.5B of the
    Public Utilities Act.
        (4) The amount of power and energy produced by each
    Agency facility.
        (5) The quantity of electricity supplied by each Agency
    facility to municipal electric systems, governmental
    aggregators, or rural electric cooperatives in Illinois.
        (6) The revenues as allocated by the Agency to each
    facility.
        (7) The costs as allocated by the Agency to each
    facility.
        (8) The accumulated depreciation for each facility.
        (9) The status of any projects under development.
        (10) Basic financial and operating information
    specifically detailed for the reporting year and
    including, but not limited to, income and expense
    statements, balance sheets, and changes in financial
    position, all in accordance with generally accepted
    accounting principles, debt structure, and a summary of
    funds on a cash basis.
        (11) The average quantity, price, contract type and
    term, and rate impact of all renewable resources purchased
    pursuant to long-term contracts under the electricity
    procurement plans for electric utilities.
        (12) A comparison of the costs associated with the
    Agency's procurement of renewable energy resources to (A)
    the Agency's costs associated with electricity generated
    by other types of generation facilities and (B) the
    benefits associated with the Agency's procurement of
    renewable energy resources.
        (13) An analysis of the rate impacts associated with
    the Illinois Power Agency's procurement of renewable
    resources, including, but not limited to, any long-term
    contracts, on the eligible retail customers of electric
    utilities. The analysis shall include the Agency's
    estimate of the total dollar impact that the Agency's
    procurement of renewable resources has had on the annual
    electricity bills of the customer classes that comprise
    each eligible retail customer class taking service from an
    electric utility.
        (14) An analysis of how the operation of the
    alternative compliance payment mechanism, any long-term
    contracts, or other aspects of the applicable renewable
    portfolio standards impacts the rates of customers of
    alternative retail electric suppliers.
(Source: P.A. 97-658, eff. 1-13-12.)
 
    Section 10. The State Finance Act is amended by changing
Section 6z-75 as follows:
 
    (30 ILCS 105/6z-75)
    Sec. 6z-75. The Illinois Power Agency Trust Fund.
    (a) Creation. The Illinois Power Agency Trust Fund is
created as a special fund in the State treasury. The State
Treasurer shall be the custodian of the Fund. Amounts in the
Fund, both principal and interest not appropriated, shall be
invested as provided by law.
    (b) Funding and investment.
        (1) The Illinois Power Agency Trust Fund may accept,
    receive, and administer any grants, loans, or other funds
    made available to it by any source. Any such funds received
    by the Fund shall not be considered income, but shall be
    added to the principal of the Fund.
        (2) The investments of the Fund shall be managed by the
    Illinois State Board of Investment, for the purpose of
    obtaining a total return on investments for the long term,
    as provided for under Article 22A of the Illinois Pension
    Code.
    (c) Investment proceeds. Subject to the provisions of
subsection (d) of this Section, the General Assembly may
annually appropriate from the Illinois Power Agency Trust Fund
to the Illinois Power Agency Operations Fund an amount
calculated not to exceed 90% of the prior fiscal year's annual
investment income earned by the Fund to the Illinois Power
Agency. Any investment income not appropriated by the General
Assembly in a given fiscal year shall be added to the principal
of the Fund, and thereafter considered a part thereof and not
subject to appropriation as income earned by the Fund.
    (d) Expenditures.
        (1) During Fiscal Year 2008 and Fiscal Year 2009, the
    General Assembly shall not appropriate any of the
    investment income earned by the Illinois Power Agency Trust
    Fund to the Illinois Power Agency.
        (2) During Fiscal Year 2010 and Fiscal Year 2011, the
    General Assembly shall appropriate a portion of the
    investment income earned by the Illinois Power Agency Trust
    Fund to repay to the General Revenue Fund of the State of
    Illinois those amounts, if any, appropriated from the
    General Revenue Fund for the operation of the Illinois
    Power Agency during Fiscal Year 2008 and Fiscal Year 2009,
    so that at the end of Fiscal Year 2011, the entire amount,
    if any, appropriated from the General Revenue Fund for the
    operation of the Illinois Power Agency during Fiscal Year
    2008 and Fiscal Year 2009 will be repaid in full to the
    General Revenue Fund.
        (3) In Fiscal Year 2012 and thereafter, the General
    Assembly shall consider the need to balance its
    appropriations from the investment income earned by the
    Fund with the need to provide for the growth of the
    principal of the Illinois Power Agency Trust Fund in order
    to ensure that the Fund is able to produce sufficient
    investment income to fund the operations of the Illinois
    Power Agency in future years.
        (4) If the Illinois Power Agency shall cease
    operations, then, unless otherwise provided for by law or
    appropriation, the principal and any investment income
    earned by the Fund shall be transferred into the
    Supplemental Low-Income Energy Assistance Program (LIHEAP)
    Fund under Section 13 of the Energy Assistance Act of 1989.
    (e) Implementation. The provisions of this Section shall
not be operative until the Illinois Power Agency Trust Fund has
accumulated a principal balance of $25,000,000.
(Source: P.A. 95-481, eff. 8-28-07.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.