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Public Act 096-1364 | ||||
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AN ACT concerning utilities.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Public Utilities Act is amended by changing | ||||
Section 9-220 as follows: | ||||
(220 ILCS 5/9-220) (from Ch. 111 2/3, par. 9-220) | ||||
Sec. 9-220. Rate changes based on changes in fuel costs. | ||||
(a) Notwithstanding the provisions of Section 9-201, the
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Commission may authorize the increase or decrease of rates and | ||||
charges
based upon changes in the cost of fuel used in the | ||||
generation or production
of electric power, changes in the cost | ||||
of purchased power, or changes in
the cost of purchased gas | ||||
through the application of fuel adjustment
clauses or purchased | ||||
gas adjustment clauses. The Commission may also
authorize the | ||||
increase or decrease of rates and charges based upon | ||||
expenditures
or revenues resulting from the purchase or sale of | ||||
emission allowances created
under the federal Clean Air Act | ||||
Amendments of 1990,
through such fuel adjustment clauses, as a | ||||
cost of fuel. For the purposes of
this paragraph, cost of fuel | ||||
used in the generation or production of electric
power shall | ||||
include the amount of any fees paid by the utility for the
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implementation and operation of a process for the | ||||
desulfurization of the
flue gas when burning high sulfur coal |
at any location within the State of
Illinois irrespective of | ||
the attainment status designation of such
location; but shall | ||
not include transportation costs
of coal
(i) except to the | ||
extent that for contracts entered into on
and after the | ||
effective date of this amendatory Act of 1997,
the cost of the | ||
coal, including transportation costs,
constitutes the lowest | ||
cost for adequate and reliable fuel
supply reasonably available | ||
to the public utility in
comparison to the cost, including | ||
transportation costs, of
other adequate and reliable sources of | ||
fuel supply reasonably
available to the public utility, or (ii)
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except as otherwise provided in the next 3 sentences of this | ||
paragraph.
Such costs of fuel
shall, when requested by a | ||
utility or at the conclusion of the utility's
next general | ||
electric rate proceeding, whichever shall first occur, include
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transportation costs of coal purchased under existing coal | ||
purchase
contracts. For purposes of this paragraph "existing | ||
coal purchase
contracts" means contracts for the purchase of | ||
coal in effect on the
effective date of this amendatory Act of | ||
1991, as such contracts may
thereafter be amended, but only to | ||
the extent that any such amendment does
not increase the | ||
aggregate quantity of coal to be purchased under such
contract.
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Nothing herein shall authorize an electric utility
to recover | ||
through its fuel adjustment clause any amounts of
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transportation costs of coal that were included in the revenue
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requirement used to set base rates in its most recent general
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rate proceeding.
Cost shall be based upon uniformly applied |
accounting
principles. Annually, the Commission shall initiate | ||
public hearings to
determine whether the clauses reflect actual | ||
costs of fuel, gas, power, or
coal transportation purchased to | ||
determine whether such purchases were
prudent, and to reconcile | ||
any amounts collected with the actual costs of
fuel, power, | ||
gas, or coal transportation prudently purchased. In each such
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proceeding, the burden of proof shall be upon the utility to | ||
establish the
prudence of its cost of fuel, power, gas, or coal
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transportation purchases
and costs.
The Commission shall
issue | ||
its final order in each such annual proceeding for an
electric | ||
utility by December 31 of the year immediately
following the | ||
year to which the proceeding pertains, provided,
that the | ||
Commission shall issue its final order with respect
to such | ||
annual proceeding for the years 1996 and earlier by December | ||
31, 1998. | ||
(b) A public utility providing electric service, other than | ||
a public utility
described in subsections (e) or (f) of this | ||
Section, may at
any time during the mandatory transition period | ||
file with the
Commission proposed tariff sheets that eliminate | ||
the public
utility's fuel adjustment clause and adjust the | ||
public
utility's base rate tariffs by the amount necessary for | ||
the
base fuel component of the base rates to recover the public
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utility's average fuel and power supply costs per kilowatt-hour | ||
for the 2
most recent years for which the Commission
has issued | ||
final orders in annual proceedings pursuant to
subsection (a), | ||
where the average fuel and power supply costs
per kilowatt-hour |
shall be calculated as the sum of the public
utility's prudent | ||
and allowable fuel and power supply costs as
found by the | ||
Commission in the 2 proceedings divided by the
public utility's | ||
actual jurisdictional kilowatt-hour sales for
those 2 years. | ||
Notwithstanding any contrary or inconsistent
provisions in | ||
Section 9-201 of this Act, in subsection (a) of
this Section or | ||
in any rules or regulations promulgated by the
Commission | ||
pursuant to subsection (g) of this Section, the
Commission | ||
shall review and shall by order approve, or approve
as | ||
modified, the proposed tariff sheets within 60 days after
the | ||
date of the public utility's filing. The Commission may
modify | ||
the public utility's proposed tariff sheets only to the
extent | ||
the Commission finds necessary to achieve conformance
to the | ||
requirements of this subsection (b). During the 5
years | ||
following the date of the Commission's order, but in any
event | ||
no earlier than January 1, 2007, a public utility whose
fuel | ||
adjustment clause has been eliminated pursuant to this
| ||
subsection shall not file proposed tariff sheets seeking, or
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otherwise petition the Commission for, reinstatement of a fuel
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adjustment clause. | ||
(c) Notwithstanding any contrary or inconsistent
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provisions in Section 9-201 of this Act, in subsection (a) of
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this Section or in any rules or regulations promulgated by the
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Commission pursuant to subsection (g) of this Section, a
public | ||
utility providing electric service, other than a public utility
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described
in subsection (e) or (f) of this Section, may at any |
time
during the mandatory transition period file with the
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Commission proposed tariff sheets that establish the rate per
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kilowatt-hour to be applied pursuant to the public utility's
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fuel adjustment clause at the average value for such rate
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during the preceding 24 months, provided that such average
rate | ||
results in a credit to customers' bills, without making
any | ||
revisions to the public utility's base rate tariffs. The
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proposed tariff sheets shall establish the fuel adjustment
rate | ||
for a specific time period of at least 3 years but not
more | ||
than 5 years, provided that the terms and conditions for
any | ||
reinstatement earlier than 5 years shall be set forth in
the | ||
proposed tariff sheets and subject to modification or
approval | ||
by the Commission. The Commission shall review and
shall by | ||
order approve the proposed tariff sheets if it finds
that the | ||
requirements of this subsection are met. The
Commission shall | ||
not conduct the annual hearings specified in the
last 3 | ||
sentences of subsection (a) of this Section for the
utility for | ||
the period that the factor established pursuant to
this | ||
subsection is in effect. | ||
(d) A public utility providing electric service, or a | ||
public utility
providing gas service
may file with the | ||
Commission proposed tariff sheets that
eliminate the public | ||
utility's fuel or purchased gas
adjustment clause and adjust | ||
the public utility's base rate
tariffs to provide for recovery | ||
of power supply costs or gas
supply costs that would have been | ||
recovered through such
clause; provided, that the provisions of |
this subsection (d) shall not be
available to a public utility | ||
described in subsections (e) or (f) of this
Section to | ||
eliminate its fuel adjustment clause. Notwithstanding any | ||
contrary
or inconsistent
provisions in Section 9-201 of this | ||
Act, in subsection (a) of
this Section, or in any rules or | ||
regulations promulgated by
the Commission pursuant to | ||
subsection (g) of this Section, the
Commission shall review and | ||
shall by order approve, or approve
as modified in the | ||
Commission's order, the proposed tariff
sheets within 240 days | ||
after the date of the public utility's
filing. The Commission's | ||
order shall approve rates and
charges that the Commission, | ||
based on information in the
public utility's filing or on the | ||
record if a hearing is held
by the Commission, finds will | ||
recover the reasonable, prudent
and necessary jurisdictional | ||
power supply costs or gas supply
costs incurred or to be | ||
incurred by the public utility during
a 12 month period found | ||
by the Commission to be appropriate
for these purposes, | ||
provided, that such period shall be either
(i) a 12 month | ||
historical period occurring during the 15
months ending on the | ||
date of the public utility's filing, or
(ii) a 12 month future | ||
period ending no later than 15 months
following the date of the | ||
public utility's filing. The public
utility shall include with | ||
its tariff filing information
showing both (1) its actual | ||
jurisdictional power supply costs
or gas supply costs for a 12 | ||
month historical period
conforming to (i) above and (2) its | ||
projected jurisdictional
power supply costs or gas supply costs |
for a future 12 month
period conforming to (ii) above. If the | ||
Commission's order
requires modifications in the tariff sheets | ||
filed by the
public utility, the public utility shall have 7 | ||
days following
the date of the order to notify the Commission | ||
whether the
public utility will implement the modified tariffs | ||
or elect to
continue its fuel or purchased gas adjustment | ||
clause in force
as though no order had been entered. The | ||
Commission's order
shall provide for any reconciliation of | ||
power supply costs or
gas supply costs, as the case may be, and | ||
associated revenues
through the date that the public utility's | ||
fuel or purchased
gas adjustment clause is eliminated. During | ||
the 5 years
following the date of the Commission's order, a | ||
public utility
whose fuel or purchased gas adjustment clause | ||
has been
eliminated pursuant to this subsection shall not file | ||
proposed
tariff sheets seeking, or otherwise petition the | ||
Commission
for, reinstatement or adoption of a fuel or | ||
purchased gas
adjustment clause. Nothing in this subsection (d) | ||
shall be
construed as limiting the Commission's authority to | ||
eliminate
a public utility's fuel adjustment clause or | ||
purchased gas
adjustment clause in accordance with any other | ||
applicable
provisions of this Act. | ||
(e) Notwithstanding any contrary or inconsistent | ||
provisions in
Section 9-201 of this Act, in subsection (a) of | ||
this Section, or in
any rules promulgated by the Commission | ||
pursuant
to subsection (g) of this Section, a public utility | ||
providing
electric service to more than 1,000,000 customers in |
this State may, within the
first 6 months after the
effective | ||
date of this amendatory Act of 1997, file with the
Commission | ||
proposed tariff sheets that eliminate, effective
January 1, | ||
1997, the public utility's fuel adjustment clause
without | ||
adjusting its base rates, and such tariff sheets shall be
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effective upon filing. To the extent the application of the | ||
fuel
adjustment clause had resulted in net charges to customers | ||
after
January 1, 1997, the utility shall also file a tariff | ||
sheet that
provides for a refund stated on a per kilowatt-hour | ||
basis of such
charges over a period not to exceed 6 months; | ||
provided
however, that such refund shall not include the | ||
proportional
amounts of taxes paid under the Use Tax Act, | ||
Service Use Tax Act,
Service Occupation Tax Act, and Retailers' | ||
Occupation Tax Act on
fuel used in generation. The Commission | ||
shall issue an order
within 45 days after the date of the | ||
public utility's filing
approving or approving as modified such | ||
tariff sheet. If the fuel
adjustment clause is eliminated | ||
pursuant to this subsection, the
Commission shall not conduct | ||
the annual hearings specified in the
last 3 sentences of | ||
subsection (a) of this Section for the
utility for any period | ||
after December 31, 1996 and prior to any
reinstatement of such | ||
clause. A public utility whose fuel
adjustment clause has been | ||
eliminated pursuant to this subsection
shall not file a | ||
proposed tariff sheet seeking, or otherwise
petition the | ||
Commission for, reinstatement of the fuel adjustment
clause | ||
prior to January 1, 2007. |
(f) Notwithstanding any contrary or inconsistent | ||
provisions in Section
9-201 of this Act, in subsection (a) of | ||
this Section, or in any rules or
regulations promulgated by the | ||
Commission pursuant to subsection (g) of this
Section, a public | ||
utility providing electric service to more than 500,000
| ||
customers but fewer than 1,000,000 customers in this State may, | ||
within the
first
6 months after the effective date of this | ||
amendatory Act of 1997, file with the
Commission proposed | ||
tariff sheets that eliminate, effective January 1, 1997,
the | ||
public utility's fuel adjustment clause and adjust its base | ||
rates by the
amount necessary for the base fuel component of | ||
the base rates to recover
91% of the public utility's average | ||
fuel and power supply costs for the 2 most
recent years for | ||
which the Commission, as of January 1, 1997, has issued final
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orders in annual proceedings pursuant to subsection (a), where | ||
the average fuel
and power supply costs per kilowatt-hour shall | ||
be calculated as the sum of the
public utility's prudent and | ||
allowable fuel and power supply costs as found by
the | ||
Commission in the 2 proceedings divided by the public utility's | ||
actual
jurisdictional kilowatt-hour sales for those 2 years, | ||
provided, that such
tariff sheets shall be effective upon | ||
filing. To the extent the application of
the fuel adjustment | ||
clause had resulted in net charges to customers after
January | ||
1, 1997, the utility shall also file a tariff sheet that | ||
provides for a
refund stated on a per kilowatt-hour basis of | ||
such charges over a period not to
exceed 6 months. Provided |
however, that such refund shall not include the
proportional | ||
amounts of taxes paid under the Use Tax Act, Service Use Tax | ||
Act,
Service Occupation Tax Act, and Retailers' Occupation Tax | ||
Act on fuel used in
generation. The Commission shall issue an | ||
order within 45 days after the date
of the public utility's | ||
filing approving or approving as modified such tariff
sheet. If | ||
the fuel adjustment clause is eliminated pursuant to this
| ||
subsection, the Commission shall not conduct the annual | ||
hearings specified in
the last 3 sentences of subsection (a) of | ||
this Section for the utility for any
period after December 31, | ||
1996 and prior to any reinstatement of such clause.
A public | ||
utility whose fuel adjustment clause has been eliminated | ||
pursuant to
this subsection shall not file a proposed tariff | ||
sheet seeking, or otherwise
petition the Commission for, | ||
reinstatement of the fuel adjustment clause prior
to January 1, | ||
2007. | ||
(g) The Commission shall have authority to promulgate rules | ||
and
regulations to
carry out the provisions of this Section. | ||
(h) Any Illinois gas utility may enter into a contract on | ||
or before March 31, 2011 for up to 10 20 years of supply with | ||
any company for the purchase of substitute natural gas (SNG) | ||
produced from coal through the gasification process if the | ||
company has commenced construction of a coal gasification | ||
facility by July 1, 2012 in Jefferson County and commencement | ||
of construction shall mean that material physical site work has | ||
occurred, such as site clearing and excavation, water runoff |
prevention, water retention reservoir preparation, or | ||
foundation development 2010 . The contract shall contain the | ||
following provisions cost for the SNG is reasonable and prudent | ||
and recoverable through the purchased gas adjustment clause for | ||
years one through 10 of the contract if : (i) the only coal to | ||
be used in the gasification process has high volatile | ||
bituminous rank and greater than 1.7 pounds of sulfur per | ||
million Btu content; (ii) at the time the contract term | ||
commences, the price per million Btu may does not exceed $7.95 | ||
in 2008 dollars, adjusted annually based on the change in the | ||
Annual Consumer Price Index for All Urban Consumers for the | ||
Midwest Region as published in April by the United States | ||
Department of Labor, Bureau of Labor Statistics (or a suitable | ||
Consumer Price Index calculation if this Consumer Price Index | ||
is not available) for the previous calendar year; provided that | ||
the price per million Btu shall not exceed $9.95 at any time | ||
during the contract; (iii) the utility's aggregate long-term | ||
supply contracts for the purchase of SNG does not exceed 25% of | ||
the annual system supply requirements of the utility as of 2008 | ||
at the time the contract is entered into and the quantity of | ||
SNG supplied to a utility may not exceed 16 million MMBtus; and | ||
(iv) contract costs pursuant to subsection (h-10) of this | ||
Section shall not include any lobbying expenses, charitable | ||
contributions, advertising, organizational memberships, or | ||
marketing expenses by any one producer may not exceed 20 | ||
billion cubic feet per year ; and (iv) the contract is entered |
into within 120 days after the effective date of this | ||
amendatory Act of the 95th General Assembly and terminates no | ||
more than 20 years after the commencement of the commercial | ||
production of SNG at the facility. Contracts greater than 10 | ||
years shall provide that if, at any time during supply years 11 | ||
through 20 of the contract, the Commission determines that the | ||
cost for the synthetic natural gas purchased under the contract | ||
during supply years 11 through 20 is not reasonable and | ||
prudent, then the company shall reimburse the utility for the | ||
difference between the cost deemed reasonable and prudent by | ||
the Commission and the cost imposed under the contract . | ||
(h-5) The Attorney General, on behalf of the people of the | ||
State of Illinois, may specifically enforce the requirements of | ||
this subsection (h-5). All such contracts, regardless of | ||
duration, shall require the owner of any facility supplying SNG | ||
under the contract to provide documentation to the Commission | ||
each year, starting in the facility's first year of commercial | ||
operation, accurately reporting the quantity of carbon dioxide | ||
emissions from the facility that have been captured and | ||
sequestered and reporting any quantities of carbon dioxide | ||
released from the site or sites at which carbon dioxide | ||
emissions were sequestered in prior years, based on continuous | ||
monitoring of those sites. If, in any year, the owner of the | ||
facility fails to demonstrate that the SNG facility captured | ||
and sequestered at least 90% of the total carbon dioxide | ||
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, | ||
then the owner of the facility must offset excess emissions. | ||
Any such carbon dioxide offsets must be permanent, additional, | ||
verifiable, real, located within the State of Illinois, and | ||
legally and practicably enforceable ; provided that the owner of | ||
the facility shall not be obligated to acquire carbon dioxide | ||
emission offsets to the extent that the cost of acquiring . The | ||
costs of such offsets would shall not exceed $40 million in any | ||
given year. No costs of any purchases of carbon offsets may be | ||
recovered from a utility or its customers. All carbon offsets | ||
purchased for this purpose must be permanently retired. In | ||
addition, carbon dioxide emission credits equivalent to 50% of | ||
the amount of credits associated with the required | ||
sequestration of carbon dioxide from the facility must be | ||
permanently retired. Compliance with the sequestration | ||
requirements and the offset purchase requirements specified in | ||
this subsection (h-5) (h) shall be assessed annually by an | ||
independent expert retained by the owner of the SNG facility, | ||
with the advance written approval of the Attorney General. A An | ||
SNG facility operating pursuant to this subsection (h-5) (h) | ||
shall not forfeit its designation as a clean coal SNG 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 | ||
requirements. | ||
(h-10) Contract costs for SNG incurred by an Illinois gas | ||
utility are reasonable and prudent and recoverable through the | ||
purchased gas adjustment clause and are not subject to review | ||
or disallowance by the Commission. Contract costs are costs | ||
incurred by the utility under the terms of a contract that | ||
incorporates the terms stated in subsection (h) of this Section | ||
as confirmed in writing by the Illinois Power Agency as set | ||
forth in subsection (h-20) of this Section, which confirmation | ||
shall be deemed conclusive, or as a consequence of or condition | ||
to its performance under the contract, including (i) amounts | ||
paid for SNG under the SNG contract and (ii) costs of | ||
transportation and storage services of SNG purchased from | ||
interstate pipelines under federally approved tariffs. Any | ||
contract, the terms of which have been confirmed in writing by | ||
the Illinois Power Agency as set forth in subsection (h-20) of | ||
this Section and the performance of the parties under such | ||
contract cannot be grounds for challenging prudence or cost | ||
recovery by the utility through the purchased gas adjustment | ||
clause, and in such cases, the Commission is directed not to | ||
consider, and has no authority to consider, any attempted | ||
challenges. | ||
The contracts entered into by Illinois gas utilities shall | ||
provide that the utility retains the right to terminate the | ||
contract without further obligation or liability to any party |
if the contract has been impaired as a result of any | ||
legislative, administrative, judicial, or other governmental | ||
action that is taken that eliminates all or part of the | ||
prudence protection of this subsection (h-10) or denies the | ||
recoverability of all or part of the contract costs through the | ||
purchased gas adjustment clause. Should any Illinois gas | ||
utility exercise its right under this subsection (h-10) to | ||
terminate the contract, all contract costs incurred prior to | ||
termination are and will be deemed reasonable, prudent, and | ||
recoverable as and when incurred and not subject to review or | ||
disallowance by the Commission. Any order, issued by the State | ||
requiring or authorizing the discontinuation of the merchant | ||
function, defined as the purchase and sale of natural gas by an | ||
Illinois gas utility for the ultimate consumer in its service | ||
territory shall include provisions necessary to prevent the | ||
impairment of the value of any contract hereunder over its full | ||
term. | ||
(h-15) With respect to each contract entered into by the | ||
company with an Illinois utility in accordance with the terms | ||
stated in subsection (h) of this Section, within 60 days | ||
following the completion of purchases of SNG, the Illinois | ||
Power Agency shall conduct an analysis to determine (i) the | ||
average contract SNG cost, which shall be calculated as the | ||
total amount paid to a company for SNG over the contract term, | ||
plus the cost to the utility of the required transportation and | ||
storage services of SNG, divided by the total number of MMBtus |
of SNG actually purchased under the utility contract; (ii) the | ||
average natural gas purchase cost, which shall be calculated as | ||
the total annual supply costs paid for natural gas (excluding | ||
SNG) purchased by such utility over the contract term, plus the | ||
costs of transportation and storage services of such natural | ||
gas (excluding such costs for SNG), divided by the total number | ||
of MMBtus of natural gas (excluding SNG) actually purchased by | ||
the utility during the contract term; (iii) the cost | ||
differential, which shall be the difference between the average | ||
contract SNG cost and the average natural gas purchase cost; | ||
and (iv) the revenue share target, which shall be the cost | ||
differential multiplied by the total amount of SNG purchased | ||
under such utility contract. If the average contract SNG cost | ||
is equal to or less than the average natural gas purchase cost, | ||
then the company shall have no further obligation to the | ||
utility. If the average contract SNG cost for such SNG contract | ||
is greater than the average natural gas purchase cost for such | ||
utility, then the company shall market the daily production of | ||
SNG and distribute on a monthly basis 5% of amounts collected | ||
with respect to such future sales to the utilities in | ||
proportion to each utility's SNG purchases from the company | ||
during the term of the SNG contract to be used to reduce the | ||
utility's natural gas costs through the purchased gas | ||
adjustment clause; such payments to the utility shall continue | ||
until such time as the sum of such payments equals the revenue | ||
share target of that utility. The company or utilities shall |
have no obligation to repay the revenue share target except as | ||
provided for in this subsection (h-15). | ||
(h-20) The General Assembly authorizes the Illinois | ||
Finance Authority to issue bonds to the maximum extent | ||
permitted to finance coal gasification facilities described in | ||
this Section, which constitute both "industrial projects" | ||
under Article 801 of the Illinois Finance Authority Act and | ||
"clean coal and energy projects" under Sections 825-65 through | ||
825-75 of the Illinois Finance Authority Act. The General | ||
Assembly further authorizes the Illinois Power Agency to become | ||
party to agreements and take such actions as necessary to | ||
enable the Illinois Power Agency or its designate to (i) review | ||
and confirm in writing that the terms stated in subsection (h) | ||
of this Section are incorporated in the SNG contract, and (ii) | ||
conduct an analysis pursuant to subsection (h-15) of this | ||
Section. Administrative costs incurred by the Illinois Finance | ||
Authority and Illinois Power Agency in performance of this | ||
subsection (h-20) shall be subject to reimbursement by the | ||
company on terms as the Illinois Finance Authority, the | ||
Illinois Power Agency, and the company may agree. The utility | ||
and its customers shall have no obligation to reimburse the | ||
company, the Illinois Finance Authority, or the Illinois Power | ||
Agency for any such costs. | ||
(i) If a gas utility or an affiliate of a gas utility has | ||
an ownership interest in any entity that produces or sells | ||
synthetic natural gas, Article VII of this Act shall apply.
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(Source: P.A. 94-63, eff. 6-21-05; 95-1027, eff. 6-1-09 .)
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law. |