Bill Text: IL SB2392 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: Amends the Illinois Power Agency Act and the Public Utilities Act to provide for the procurement of renewable energy resources from a clean coal facility, initial clean coal facility, and clean coal SNG facility, including amending provisions concerning Agency powers, aggregate distributed renewable energy, the renewable portfolio standard, and procurement of energy efficiency products and adding provisions concerning the development of feedstock procurement plans and feedstock procurement processes; makes corresponding changes in various other Acts. Allows certain facilities to recover certain costs and revenue associated with the generation of electricity and sequestration. Contains provisions concerning the permitting, oversight, and investigation for capture, transport, and sequestration of carbon dioxide. In the Public Utilities Act, makes changes to provisions concerning net electricity metering. Makes other changes. Contains a severability provision.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2015-01-13 - Session Sine Die [SB2392 Detail]

Download: Illinois-2013-SB2392-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 SB2392 Introduced 2/15/2013, by Sen. Andy Manar SYNOPSIS AS INTRODUCED:
See Index
Amends the Illinois Power Agency Act and the Public Utilities Act to provide for the procurement of renewable energy resources from a clean coal facility, initial clean coal facility, and clean coal SNG facility, including amending provisions concerning Agency powers, aggregate distributed renewable energy, the renewable portfolio standard, and procurement of energy efficiency products and adding provisions concerning the development of feedstock procurement plans and feedstock procurement processes; makes corresponding changes in various other Acts. Allows certain facilities to recover certain costs and revenue associated with the generation of electricity and sequestration. Contains provisions concerning the permitting, oversight, and investigation for capture, transport, and sequestration of carbon dioxide. In the Public Utilities Act, makes changes to provisions concerning net electricity metering. Makes other changes. Contains a severability provision.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This amendatory Act may be referred
to as the Illinois Renewable Electricity Resources Act.
Section 5. The Illinois Power Agency Act is amended by
changing Sections 1-10, 1-20, 1-56, and 1-75 and by adding
Sections 1-76, 1-76.5, 1-77.5, 1-79, and 1-81 as follows:
(20 ILCS 3855/1-10)
Sec. 1-10. Definitions.
"Agency" means the Illinois Power Agency.
"Agency loan agreement" means any agreement pursuant to
which the Illinois Finance Authority agrees to loan the
proceeds of revenue bonds issued with respect to a project to
the Agency upon terms providing for loan repayment installments
at least sufficient to pay when due all principal of, interest
and premium, if any, on those revenue bonds, and providing for
maintenance, insurance, and other matters in respect of the
project.
"Authority" means the Illinois Finance Authority.
"Bundled renewable energy resources" means electricity
generated by a renewable energy resource and its associated

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renewable energy credit.
"Clean coal electricity buyer" means (1) each electric
utility and (2) each alternative electric retail supplier that
is subject to the requirements of subsection (d) of Section
1-75 of this Act and paragraph (5) of subsection (d) of Section
16-115 of the Public Utilities Act.
"Clean coal energy" means all energy produced by the
initial clean coal facility.
"Clean coal facility" means an electric generating
facility that uses primarily coal as a feedstock and that
captures and sequesters carbon dioxide emissions at the
following levels: at least 50% of the total carbon dioxide
emissions that the facility would otherwise emit if, at the
time construction commences, the facility is scheduled to
commence operation before 2016, at least 70% of the total
carbon dioxide emissions that the facility would otherwise emit
if, at the time construction commences, the facility is
scheduled to commence operation during 2016 or 2017, and at
least 90% of the total carbon dioxide emissions that the
facility would otherwise emit if, at the time construction
commences, the facility is scheduled to commence operation
after 2017. The power block of the clean coal facility shall
not exceed allowable emission rates for sulfur dioxide,
nitrogen oxides, carbon monoxide, particulates and mercury for
a natural gas-fired combined-cycle facility the same size as
and in the same location as the clean coal facility at the time

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the clean coal facility obtains an approved air permit. All
coal used by a clean coal facility shall have high volatile
bituminous rank and greater than 1.7 pounds of sulfur per
million btu content, unless the clean coal facility does not
use gasification technology and was operating as a conventional
coal-fired electric generating facility on June 1, 2009 (the
effective date of Public Act 95-1027).
"Clean coal fraction" means, with respect to a clean coal
electricity buyer for a month, a fraction, the numerator of
which is such clean coal electricity buyer's retail market
sales of electricity (expressed in kilowatthours sold) in the
State during the third month preceding the applicable month and
the denominator of which is the total retail market sales of
electricity (expressed in kilowatthours sold) in the State by
all clean coal electricity buyers during such third month
preceding the applicable month, as such fraction may be
adjusted pursuant to subparagraph (E) of paragraph (2) of
subsection (d) of Section 1-75 of this Act.
"Clean coal SNG brownfield facility" means a facility that
(1) has commenced construction by July 1, 2015 on an urban
brownfield site in a municipality with at least 1,000,000
residents; (2) uses a gasification process to produce
substitute natural gas; (3) uses coal as at least 50% of the
total feedstock over the term of any sourcing agreement with a
utility and the remainder of the feedstock may be either
petroleum coke or coal, with all such coal having a high

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bituminous rank and greater than 1.7 pounds of sulfur per
million Btu content unless the facility reasonably determines
that it is necessary to use additional petroleum coke to
deliver additional consumer savings, in which case the facility
shall use coal for at least 35% of the total feedstock over the
term of any sourcing agreement; and (4) captures and sequesters
at least 85% of the total carbon dioxide emissions that the
facility would otherwise emit.
"Clean coal SNG facility" means a facility that uses a
gasification process to produce substitute natural gas, that
sequesters at least 90% of the total carbon dioxide emissions
that the facility would otherwise emit, that uses at least 90%
coal as a feedstock, with all such coal having a high
bituminous rank and greater than 1.7 pounds of sulfur per
million btu content, and that has a valid and effective permit
to construct emission sources and air pollution control
equipment and approval with respect to the federal regulations
for Prevention of Significant Deterioration of Air Quality
(PSD) for the plant pursuant to the federal Clean Air Act;
provided, however, a clean coal SNG brownfield facility shall
not be a clean coal SNG facility.
"Commission" means the Illinois Commerce Commission.
"Costs incurred in connection with the development and
construction of a facility" means:
(1) the cost of acquisition of all real property,
fixtures, and improvements in connection therewith and

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equipment, personal property, and other property, rights,
and easements acquired that are deemed necessary for the
operation and maintenance of the facility;
(2) financing costs with respect to bonds, notes, and
other evidences of indebtedness of the Agency;
(3) all origination, commitment, utilization,
facility, placement, underwriting, syndication, credit
enhancement, and rating agency fees;
(4) engineering, design, procurement, consulting,
legal, accounting, title insurance, survey, appraisal,
escrow, trustee, collateral agency, interest rate hedging,
interest rate swap, capitalized interest, contingency, as
required by lenders, and other financing costs, and other
expenses for professional services; and
(5) the costs of plans, specifications, site study and
investigation, installation, surveys, other Agency costs
and estimates of costs, and other expenses necessary or
incidental to determining the feasibility of any project,
together with such other expenses as may be necessary or
incidental to the financing, insuring, acquisition, and
construction of a specific project and starting up,
commissioning, and placing that project in operation.
"Delivery services" has the same definition as found in
Section 16-102 of the Public Utilities Act.
"Delivery services non-eligible retail customers" means
the retail customers in an electric utility's service area for

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which the electric utility provides delivery services, but
which are not eligible retail customers as defined in
subsection (a) of Section 1-75 of this Act.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of the Illinois Power Agency.
"Demand-response" means measures that decrease peak
electricity demand or shift demand from peak to off-peak
periods.
"Distributed renewable energy generation device" means a
device that is:
(1) powered by wind, solar thermal energy,
photovoltaic cells and panels, biodiesel, crops and
untreated and unadulterated organic waste biomass, tree
waste, and hydropower that does not involve new
construction or significant expansion of hydropower dams;
(2) interconnected at the distribution system level of
either an electric utility as defined in this Section, an
alternative retail electric supplier as defined in Section
16-102 of the Public Utilities Act, a municipal utility as
defined in Section 3-105 of the Public Utilities Act, or a
rural electric cooperative as defined in Section 3-119 of
the Public Utilities Act;
(3) located on the customer side of the customer's
electric meter and is primarily used to offset that
customer's electricity load; and

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(4) limited in nameplate capacity to no more than 2,000
kilowatts.
"Energy efficiency" means measures that reduce the amount
of electricity or natural gas required to achieve a given end
use.
"Electric utility" has the same definition as found in
Section 16-102 of the Public Utilities Act.
"Excluded renewable energy resources contract costs" means
the amount by which the costs of renewable energy resources,
purchased for a particular year to meet the renewable energy
resources standards of paragraph (1) of subsection (c) of
Section 1-75 of this Act applicable to the load of an electric
utility's eligible retail customers pursuant to a contract with
a term greater than one year that the electric utility entered
into in a previous year in accordance with a procurement
approved by the Commission pursuant to Section 16-111.5 of the
Public Utilities Act, exceed the limitations imposed by
paragraph (2) of subsection (c) of Section 1-75 of this Act for
the particular year.
"Facility" means an electric generating unit or a
co-generating unit that produces electricity along with
related equipment necessary to connect the facility to an
electric transmission or distribution system.
"Governmental aggregator" means one or more units of local
government that individually or collectively procure
electricity to serve residential retail electrical loads

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located within its or their jurisdiction.
"Initial clean coal facility" means an electric generating
facility using gasification technology that: (1) has a
nameplate capacity of at least 500 MW; (2) irrevocably commits
in its proposed sourcing agreement to use coal for at least 50%
of the total feedstock over the term of a sourcing agreement,
with all coal having high volatile bituminous rank and greater
than 1.7 pounds of sulfur per million btu content; (3) is
designed to capture and sequester at least 90% of the carbon
dioxide emissions that the portion of the facility, if any,
that produces SNG would otherwise emit and at least 50% of the
total carbon dioxide emissions that the facility as a whole
would otherwise emit; (4) absent an appeal of a permit or
regulatory order, is reasonably capable of achieving
commercial operation by no later than 5 years after the
execution of the sourcing agreements; (5) has a feasible
financing plan; (6) has a reliable and cost-effective
transmission plan to deliver energy to Commonwealth Edison
Company and Ameren Illinois; and (7) has a power block designed
not to exceed allowable emission rates for sulfur dioxide,
nitrogen oxides, carbon monoxide, particulates, and mercury
for a natural gas-fired combined-cycle facility the same size
as and in the same location as the electric generating facility
at the time the electric generating facility obtains an
approved air permit.
"Large electric customer" means a customer that (1) obtains

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retail electric service in the State from an electric utility
or an alternative retail electric supplier and (2) is not a
small electric customer.
"Local government" means a unit of local government as
defined in Section 1 of Article VII of the Illinois
Constitution.
"Municipality" means a city, village, or incorporated
town.
"Person" means any natural person, firm, partnership,
corporation, either domestic or foreign, company, association,
limited liability company, joint stock company, or association
and includes any trustee, receiver, assignee, or personal
representative thereof.
"Project" means the planning, bidding, and construction of
a facility.
"Public utility" has the same definition as found in
Section 3-105 of the Public Utilities Act.
"Real property" means any interest in land together with
all structures, fixtures, and improvements thereon, including
lands under water and riparian rights, any easements,
covenants, licenses, leases, rights-of-way, uses, and other
interests, together with any liens, judgments, mortgages, or
other claims or security interests related to real property.
"Renewable energy credit" means a tradable credit that
represents the environmental attributes of a certain amount of
energy produced from a renewable energy resource.

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"Renewable energy resources" includes energy and its
associated renewable energy credit or renewable energy credits
from wind, solar thermal energy, photovoltaic cells and panels,
biodiesel, anaerobic digestion, crops and untreated and
unadulterated organic waste biomass, tree waste, hydropower
that does not involve new construction or significant expansion
of hydropower dams, and other alternative sources of
environmentally preferable energy. For purposes of this Act,
landfill gas produced in the State is considered a renewable
energy resource. "Renewable energy resources" does not include
the incineration or burning of tires, garbage, general
household, institutional, and commercial waste, industrial
lunchroom or office waste, landscape waste other than tree
waste, railroad crossties, utility poles, or construction or
demolition debris, other than untreated and unadulterated
waste wood.
"Revenue bond" means any bond, note, or other evidence of
indebtedness issued by the Authority, the principal and
interest of which is payable solely from revenues or income
derived from any project or activity of the Agency.
"Sequester" means permanent storage of carbon dioxide by
injecting it into a saline aquifer, a depleted gas reservoir,
or an oil reservoir, directly or through an enhanced oil
recovery process that may involve intermediate storage,
regardless of whether these activities are conducted by a clean
coal facility, the initial clean coal facility, a clean coal

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SNG facility, a clean coal SNG brownfield facility, or a party
with which a clean coal facility, initial clean coal facility,
clean coal SNG facility, or clean coal SNG brownfield facility
has contracted for such purposes.
"Service area" has the same definition as found in Section
16-102 of the Public Utilities Act.
"Sourcing agreement" means (i) in the case of an electric
utility, an agreement between the owner of a clean coal
facility or initial clean coal facility and such electric
utility, which agreement shall have terms and conditions
meeting the requirements of paragraph (3) of subsection (d) of
Section 1-75, (ii) in the case of an alternative retail
electric supplier, an agreement between the owner of a clean
coal facility or initial clean coal facility and such
alternative retail electric supplier, which agreement shall
have terms and conditions meeting the requirements of Section
16-115(d)(5) of the Public Utilities Act, and (iii) in case of
a gas utility, an agreement between the owner of a clean coal
SNG brownfield facility and the gas utility, which agreement
shall have the terms and conditions meeting the requirements of
subsection (h-1) of Section 9-220 of the Public Utilities Act.
"Small electric customer" means a residential retail
electric customer that obtains electric service in the State
from an electric utility or an alternative retail electric
supplier.
"Substitute natural gas" or "SNG" means a gas manufactured

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by gasification of hydrocarbon feedstock, which is
substantially interchangeable in use and distribution with
conventional natural gas.
"Total resource cost test" or "TRC test" means a standard
that is met if, for an investment in energy efficiency or
demand-response measures, the benefit-cost ratio is greater
than one. The benefit-cost ratio is the ratio of the net
present value of the total benefits of the program to the net
present value of the total costs as calculated over the
lifetime of the measures. A total resource cost test compares
the sum of avoided electric utility costs, representing the
benefits that accrue to the system and the participant in the
delivery of those efficiency measures, as well as other
quantifiable societal benefits, including avoided natural gas
utility costs, to the sum of all incremental costs of end-use
measures that are implemented due to the program (including
both utility and participant contributions), plus costs to
administer, deliver, and evaluate each demand-side program, to
quantify the net savings obtained by substituting the
demand-side program for supply resources. In calculating
avoided costs of power and energy that an electric utility
would otherwise have had to acquire, reasonable estimates shall
be included of financial costs likely to be imposed by future
regulations and legislation on emissions of greenhouse gases.
(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
96-784, eff. 8-28-09; 96-1000, eff. 7-2-10; 97-96, eff.

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7-13-11; 97-239, eff. 8-2-11; 97-491, eff. 8-22-11; 97-616,
eff. 10-26-11; 97-813, eff. 7-13-12.)
(20 ILCS 3855/1-20)
Sec. 1-20. General powers of the Agency.
(a) The Agency is authorized to do each of the following:
(1) Develop electricity procurement plans 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 electric utilities that on December
31, 2005 provided electric service to at least 100,000
customers in Illinois and for small multi-jurisdictional
electric utilities that (A) on December 31, 2005 served
less than 100,000 customers in Illinois and (B) request a
procurement plan for their Illinois jurisdictional load.
The procurement plans shall be updated on an annual basis
and shall include electricity generated from renewable
resources sufficient to achieve the standards specified in
this Act. For periods beginning on and after June 1, 2014,
the procurement plans shall also include procurement of
renewable energy credits, in accordance with subsection
(c) of Section 1-75 of this Act, in amounts projected to be
sufficient to meet the renewable energy resources standard
specified in subsection (c) of Section 1-75 of this Act
with respect to the kilowatthour usage of delivery services

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non-eligible retail customers in such electric utilities'
service areas.
(2) Conduct competitive procurement processes to
procure the supply resources identified in the procurement
plan, pursuant to Section 16-111.5 of the Public Utilities
Act.
(3) Develop electric generation and co-generation
facilities that use indigenous coal or renewable
resources, or both, financed with bonds issued by the
Illinois Finance Authority.
(4) Supply electricity from the Agency's facilities at
cost to one or more of the following: municipal electric
systems, governmental aggregators, or rural electric
cooperatives in Illinois.
(b) Except as otherwise limited by this Act, the Agency has
all of the powers necessary or convenient to carry out the
purposes and provisions of this Act, including without
limitation, each of the following:
(1) To have a corporate seal, and to alter that seal at
pleasure, and to use it by causing it or a facsimile to be
affixed or impressed or reproduced in any other manner.
(2) To use the services of the Illinois Finance
Authority necessary to carry out the Agency's purposes.
(3) To negotiate and enter into loan agreements and
other agreements with the Illinois Finance Authority.
(4) To obtain and employ personnel and hire consultants

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that are necessary to fulfill the Agency's purposes, and to
make expenditures for that purpose within the
appropriations for that purpose.
(5) To purchase, receive, take by grant, gift, devise,
bequest, or otherwise, lease, or otherwise acquire, own,
hold, improve, employ, use, and otherwise deal in and with,
real or personal property whether tangible or intangible,
or any interest therein, within the State.
(6) To acquire real or personal property, whether
tangible or intangible, including without limitation
property rights, interests in property, franchises,
obligations, contracts, and debt and equity securities,
and to do so by the exercise of the power of eminent domain
in accordance with Section 1-21; except that any real
property acquired by the exercise of the power of eminent
domain must be located within the State.
(7) To sell, convey, lease, exchange, transfer,
abandon, or otherwise dispose of, or mortgage, pledge, or
create a security interest in, any of its assets,
properties, or any interest therein, wherever situated.
(8) To purchase, take, receive, subscribe for, or
otherwise acquire, hold, make a tender offer for, vote,
employ, sell, lend, lease, exchange, transfer, or
otherwise dispose of, mortgage, pledge, or grant a security
interest in, use, and otherwise deal in and with, bonds and
other obligations, shares, or other securities (or

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interests therein) issued by others, whether engaged in a
similar or different business or activity.
(9) To make and execute agreements, contracts, and
other instruments necessary or convenient in the exercise
of the powers and functions of the Agency under this Act,
including contracts with any person, including personal
service contracts, or with any local government, State
agency, or other entity; and all State agencies and all
local governments are authorized to enter into and do all
things necessary to perform any such agreement, contract,
or other instrument with the Agency. No such agreement,
contract, or other instrument shall exceed 40 years.
(10) To lend money, invest and reinvest its funds in
accordance with the Public Funds Investment Act, and take
and hold real and personal property as security for the
payment of funds loaned or invested.
(11) To borrow money at such rate or rates of interest
as the Agency may determine, issue its notes, bonds, or
other obligations to evidence that indebtedness, and
secure any of its obligations by mortgage or pledge of its
real or personal property, machinery, equipment,
structures, fixtures, inventories, revenues, grants, and
other funds as provided or any interest therein, wherever
situated.
(12) To enter into agreements with the Illinois Finance
Authority to issue bonds whether or not the income

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therefrom is exempt from federal taxation.
(13) To procure insurance against any loss in
connection with its properties or operations in such amount
or amounts and from such insurers, including the federal
government, as it may deem necessary or desirable, and to
pay any premiums therefor.
(14) To negotiate and enter into agreements with
trustees or receivers appointed by United States
bankruptcy courts or federal district courts or in other
proceedings involving adjustment of debts and authorize
proceedings involving adjustment of debts and authorize
legal counsel for the Agency to appear in any such
proceedings.
(15) To file a petition under Chapter 9 of Title 11 of
the United States Bankruptcy Code or take other similar
action for the adjustment of its debts.
(16) To enter into management agreements for the
operation of any of the property or facilities owned by the
Agency.
(17) To enter into an agreement to transfer and to
transfer any land, facilities, fixtures, or equipment of
the Agency to one or more municipal electric systems,
governmental aggregators, or rural electric agencies or
cooperatives, for such consideration and upon such terms as
the Agency may determine to be in the best interest of the
citizens of Illinois.

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(18) To enter upon any lands and within any building
whenever in its judgment it may be necessary for the
purpose of making surveys and examinations to accomplish
any purpose authorized by this Act.
(19) To maintain an office or offices at such place or
places in the State as it may determine.
(20) To request information, and to make any inquiry,
investigation, survey, or study that the Agency may deem
necessary to enable it effectively to carry out the
provisions of this Act.
(21) To accept and expend appropriations.
(22) To engage in any activity or operation that is
incidental to and in furtherance of efficient operation to
accomplish the Agency's purposes, including hiring
employees that the Director deems essential for the
operations of the Agency.
(23) To adopt, revise, amend, and repeal rules with
respect to its operations, properties, and facilities as
may be necessary or convenient to carry out the purposes of
this Act, subject to the provisions of the Illinois
Administrative Procedure Act and Sections 1-22 and 1-35 of
this Act.
(24) To establish and collect charges and fees as
described in this Act.
(25) To conduct competitive gasification feedstock
procurement processes to procure the feedstocks for the

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clean coal SNG brownfield facility in accordance with the
requirements of Section 1-78 of this Act.
(26) To review, revise, and approve sourcing
agreements and mediate and resolve disputes between gas
utilities and the clean coal SNG brownfield facility
pursuant to subsection (h-1) of Section 9-220 of the Public
Utilities Act.
(27) To review, revise, and approve sourcing
agreements and mediate and resolve disputes between
electric utilities or alternative retail electric
suppliers and the initial clean coal facility pursuant to
paragraph (4) of subsection (d) of Section 1-75 of this
Act.
(28) To conduct competitive gasification feedstock
procurement processes to procure the feedstocks for the
initial clean coal facility in accordance with the
requirements of Section 1-79 of this Act.
(Source: P.A. 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10;
97-96, eff. 7-13-11; 97-325, eff. 8-12-11; 97-618, eff.
10-26-11; 97-813, eff. 7-13-12.)
(20 ILCS 3855/1-56)
Sec. 1-56. Illinois Power Agency Renewable Energy
Resources Fund.
(a) The Illinois Power Agency Renewable Energy Resources
Fund is created as a special fund in the State treasury.

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(b) The Illinois Power Agency Renewable Energy Resources
Fund shall be administered by the Agency to procure renewable
energy resources. Prior to June 1, 2011, resources procured
pursuant to this Section shall be procured from facilities
located in Illinois, provided the resources are available from
those facilities. If resources are not available in Illinois,
then they shall be procured in states that adjoin Illinois. If
resources are not available in Illinois or in states that
adjoin Illinois, then they may be purchased elsewhere.
Beginning June 1, 2011, resources procured pursuant to this
Section shall be procured from facilities located in Illinois
or states that adjoin Illinois. If resources are not available
in Illinois or in states that adjoin Illinois, then they may be
procured elsewhere. To the extent available, at least 75% of
these renewable energy resources shall come from wind
generation. Of the renewable energy resources procured
pursuant to this Section at least the following specified
percentages 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, 2014 2013,
0.75% by June 1, 2015 2014, and 1% by June 1, 2016 2015 and
thereafter. To the extent available, half of the renewable
energy resources procured from distributed renewable energy

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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.
(c) The Agency shall procure renewable energy resources at
least once each year in conjunction with a procurement event
for electric utilities required to comply with Section 1-75 of
the Act and shall, whenever possible, enter into long-term
contracts on an annual basis for a portion of the incremental
requirement for the given procurement year.
(d) The price paid to procure renewable energy credits

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using monies from the Illinois Power Agency Renewable Energy
Resources Fund shall not exceed the winning bid prices paid for
like resources procured for electric utilities required to
comply with Section 1-75 of this Act.
(e) All renewable energy credits procured using monies from
the Illinois Power Agency Renewable Energy Resources Fund shall
be permanently retired.
(f) The procurement process described in this Section is
exempt from the requirements of the Illinois Procurement Code,
pursuant to Section 20-10 of that Code.
(g) All disbursements from the Illinois Power Agency
Renewable Energy Resources Fund shall be made only upon
warrants of the Comptroller drawn upon the Treasurer as
custodian of the Fund upon vouchers signed by the Director or
by the person or persons designated by the Director for that
purpose. The Comptroller is authorized to draw the warrant upon
vouchers so signed. The Treasurer shall accept all warrants so
signed and shall be released from liability for all payments
made on those warrants.
(h) The Illinois Power Agency Renewable Energy Resources
Fund shall not be subject to sweeps, administrative charges, or
chargebacks, including, but not limited to, those authorized
under Section 8h of the State Finance Act, that would in any
way result in the transfer of any funds from this Fund to any
other fund of this State or in having any such funds utilized
for any purpose other than the express purposes set forth in

SB2392 - 23 - LRB098 10321 CEL 40506 b
this Section.
(i) The Illinois Power Agency Renewable Energy Resources
Fund shall be terminated upon depletion of all funds therein
through the purchase of renewable energy credits.
(Source: P.A. 96-159, eff. 8-10-09; 96-1000, eff. 7-2-10;
96-1437, eff. 8-17-10; 97-616, 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, and for years beginning on and after
June 1, 2014, for the procurement of renewable energy credits
in respect of the kilowatthour usage of delivery services
non-eligible retail customers in such electric utilities'
service areas. 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

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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

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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

SB2392 - 26 - LRB098 10321 CEL 40506 b
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

SB2392 - 27 - LRB098 10321 CEL 40506 b
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.
(a-5) The Planning and Procurement Bureau shall at least
every 5 years beginning in 2014 develop feedstock procurement

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plans and conduct competitive feedstock procurement processes
in accordance with the requirements of Section 1-79 of this
Act.
(1) The Agency shall, at least once every 5 years
beginning in 2014, issue a request for qualifications for
experts or expert consulting firms to develop the feedstock
procurement plans in accordance with Section 1-79 of this
Act. In order to qualify, an expert or, in the case of an
expert consulting firm, the individual who shall be
directly responsible for the work, must have:
(A) direct previous experience assembling large
scale feedstock supply plans or portfolios involving
coal and natural gas for industrial customers;
(B) an advanced degree in economics, mathematics,
engineering, risk management, or a related area of
study;
(C) ten years of experience in the energy sector,
including coal and gas procurement and managing fuel
supply risk;
(D) expertise in the feedstock markets, which may
be particularized to the specific type of feedstock to
be purchased in that procurement event;
(E) expertise in credit protocols and familiarity
with contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and

SB2392 - 29 - LRB098 10321 CEL 40506 b
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the initial clean coal facility.
(2) The Agency shall at least every 5 years beginning
in 2014, as needed, issue a request for qualifications for
a feedstock procurement administrator to conduct the
competitive feedstock procurement processes in accordance
with Section 1-79 of this Act. In order to qualify, an
expert or, in the case of an expert consulting firm, the
individual who shall be directly responsible for the work,
must have:
(A) direct previous experience administering a
large scale competitive feedstock procurement process
involving coal and natural gas;
(B) an advanced degree in economics, mathematics,
engineering, or a related area of study;
(C) ten years of experience in the energy sector,
including coal and gas procurement and managing fuel
supply risk;
(D) expertise in feedstock market rules and
practices, which may be particularized to the specific
type of feedstock to be purchased in that procurement
event;
(E) expertise in credit and contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and

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(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the initial clean coal facility.
(3) The Agency shall provide the initial clean coal
facility 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 feedstock procurement
plans and to serve as the feedstock procurement
administrator. The Agency shall also provide the initial
clean coal facility and other interested parties with each
qualified expert's or expert consulting firm's response to
the request for qualifications. All information provided
under this subparagraph (3) shall also be provided to the
Commission. The Agency may provide by rule for fees
associated with supplying the information to the initial
clean coal facility and other interested parties. The
initial clean coal facility and other interested parties
shall, within 5 business days after receiving the lists and
information, 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 initial clean coal facility.

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The Agency shall remove experts or expert consulting
firms from the lists within 10 days after receiving the
objections if there is a reasonable basis for an objection
and provide the updated lists to the initial clean coal
facility and other interested parties. If the Agency fails
to remove an expert or expert consulting firm from a list,
then 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 feedstock procurement plan for the initial clean coal
facility and to serve as feedstock procurement
administrator.
(5) The Agency shall select an expert or expert
consulting firm to develop feedstock procurement plans
based on the proposals submitted and shall award at least
one-year contracts to those selected with an option for the
Agency for renewal for an additional length of time equal
to the term of the contract.
(6) The Agency shall select, with approval of the
Commission, an expert or expert consulting firm to serve as
feedstock procurement administrator based on the proposals
submitted. If the Commission rejects the Agency's

SB2392 - 32 - LRB098 10321 CEL 40506 b
selection within 5 days after being notified of the
Agency's selection, then the Agency shall submit another
recommendation within 3 days after the Commission's
rejection 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 with
an option for the Agency for a 5-year renewal.
(b) The experts or expert consulting firms retained by the
Agency under subsection (a) of this Section 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.
(b-5) The experts or expert consulting firms retained by
the Agency pursuant to subsection (a-5) of this Section shall,
as appropriate, prepare feedstock procurement plans and
conduct a competitive feedstock procurement process as

SB2392 - 33 - LRB098 10321 CEL 40506 b
prescribed in Section 1-79 of this Act to ensure adequate,
reliable, affordable feedstocks, taking into account any
benefits of price stability, for the initial clean coal
facility.
(c) Renewable portfolio standard.
(1) The procurement plans under subsection (a) of this
Section 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. For periods beginning on and after June 1,
2014, the procurement plans shall include the procurement
of cost-effective renewable energy credits equal to the
projected kilowatthour usage of the delivery services
non-eligible retail customers within the service area of
the electric utility times the applicable renewable energy
resource percentage for that year as set forth under this
paragraph (1). To the extent that it is available, at least
75% of the renewable energy resources used to meet these

SB2392 - 34 - LRB098 10321 CEL 40506 b
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, 2014 2013, 0.75% by June 1, 2015 2014, and 1% by
June 1, 2016 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

SB2392 - 35 - LRB098 10321 CEL 40506 b
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 to serve the load of the electric utility's
eligible retail customers and the costs of procuring
renewable energy credits with respect to the kilowatthour
usage of the delivery services non-eligible retail
customers within the electric utility's service area do not
cause the applicable limits 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
to serve the load of the electric utility's eligible retail
customers for a particular year shall be measured as a

SB2392 - 36 - LRB098 10321 CEL 40506 b
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 and, for periods
beginning on and after June 1, 2014, the required
procurement of cost-effective renewable energy credits
with respect to the delivery services non-eligible retail
customers of the electric utility shall be based on the
actual amount of electricity (megawatt-hours) delivered by
the electric utility to delivery services non-eligible
retail customers in its service area 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 with respect to the load
of the electric utility's eligible retail customers 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

SB2392 - 37 - LRB098 10321 CEL 40506 b
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

SB2392 - 38 - LRB098 10321 CEL 40506 b
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.
For periods beginning on and after June 1, 2014,
any excluded renewable energy resources contract costs
shall be recoverable by the electric utility through
its tariffed charges for delivery services pursuant to
Section 16-108 of the Public Utilities Act to its
residential class delivery services non-eligible
retail customers.
Notwithstanding the requirements of this
subsection (c), for years beginning on and after June
1, 2014, the total amount of renewable energy credits
procured pursuant to the procurement plan with respect
to the kilowatthour usage of the delivery services
non-eligible retail customers in the electric
utility's service area shall be reduced by an amount
necessary to limit the cost of renewable energy credits
and excluded renewable energy resources costs included
in the electric utility's charges per kilowatthour for
delivery services to its delivery services
non-eligible retail customers to an amount equal to no
more than 2.015% of the amount paid by the electric
utility's eligible retail customers per kilowatthour
for electric service during the year ended May 31,

SB2392 - 39 - LRB098 10321 CEL 40506 b
2007.
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) (Blank). 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

SB2392 - 40 - LRB098 10321 CEL 40506 b
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,
and ending with the year commencing June 1, 2014, 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

SB2392 - 41 - LRB098 10321 CEL 40506 b
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. For years commencing on and
after June 1, 2014, the kilowatthours supplied by the
electric utility to its retail customers that take service
pursuant to the electric utility's hourly pricing tariff or
tariffs shall be considered usage of delivery services
non-eligible retail customers. 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

SB2392 - 42 - LRB098 10321 CEL 40506 b
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.
(6) Each annual procurement plan for periods beginning
on and after June 1, 2014 shall include (i) the procurement
of electricity from cost-effective renewable energy
resources to meet the renewable energy resource
requirements specified in paragraph (2) of this subsection
(c) with respect to the load of the electric utility's
eligible retail customers and (ii) the procurement of
renewable energy credits to meet the renewable energy
resource requirements specified in paragraph (2) of this
subsection (c) with respect to the kilowatthour usage of
the electric utility's delivery services non-eligible
retail customers; provided that the electric utility's
obligation to purchase renewable energy credits with
respect to the kilowatthour usage of delivery services
non-eligible retail customers shall be reduced by the
amount of any purchases of renewable energy credits by the
Agency for the year in respect of the electric utility's
service area pursuant to Section 1-56 of this Act using the
Illinois Power Agency Renewable Energy Resources Fund. All

SB2392 - 43 - LRB098 10321 CEL 40506 b
procurements of bundled renewable energy resources and
renewable energy credits in the procurement plans of the
electric utilities shall be pursuant to competitive
bidding processes and shall be approved by the Commission
pursuant to Section 16-111.5 of the Public Utilities Act.
Procurements of bundled renewable energy resources shall
be used to secure supply from renewable energy assets that
can provide monthly energy quantity guarantees for peak and
off-peak wrap periods. Projects shall be chosen based on
the value of the energy procured. The value of the energy
shall be determined by the Agency by utilizing a "time of
day" methodology to evaluate the energy profile of each
project.
(d) Clean coal portfolio standard.
(1) The General Assembly finds that there are abundant
and cost-effective supplies of high volatile rank
bituminous coal with a sulfur content of at least 1.7
pounds per million btu energy content, and that it is
technologically feasible to produce electric energy using
such coal supplies reliably. The General Assembly further
finds that state-of-the-art gasification systems are
available to convert coal supplies with the foregoing
characteristics into gas and that it is feasible to use
such gas to generate electric energy without exceeding
allowable emission rates for sulfur dioxide, nitrogen
oxides, carbon monoxide, particulates, and mercury for a

SB2392 - 44 - LRB098 10321 CEL 40506 b
natural gas-fired combined-cycle facility of the same size
as and in the same location as a clean coal facility
incorporating a gasification system and a combined cycle
power block. The General Assembly also finds that it is
feasible to engineer and construct systems designed to
capture and sequester the percentages of the carbon dioxide
emissions from clean coal facilities as specified in this
Act. Accordingly, the General Assembly finds it necessary
for the health, safety, welfare, and prosperity of Illinois
citizens to require Illinois electric utilities and
alternative retail electric suppliers to contract with the
initial clean coal facility to meet a portion of the needs
of each such electric utility's and alternative retail
electric supplier's retail load on the terms and conditions
described under this Act.
The procurement plans under subsection (a) of this
Section shall include electricity generated using clean
coal. Each electric 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 (A) at least 5% of that each
utility's total supply to serve the load of eligible retail
customers in the immediately preceding year 2015 and each
year thereafter, as described in paragraph (3) of this
subsection (d), or (B) such lesser amount as may be

SB2392 - 45 - LRB098 10321 CEL 40506 b
available from the initial clean coal facility, reduced by
subject to the limits on the amount of power to be
purchased 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.

SB2392 - 46 - LRB098 10321 CEL 40506 b
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 immediately preceding
year 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 purchased paid under sourcing
agreements with the initial clean coal facility 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:

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(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:
(i) A calculation shall be made for each year
to determine whether , 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 per kilowatthour
increase due to the cost of electric power

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purchased under sourcing agreements and these
resources included in the amounts paid by small
electric eligible retail customers in connection
with electric service exceeds to no more than the
greater of (i) 2.015% of the amount paid per
kilowatthour by eligible retail 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. For purposes
of such calculation, such average net per
kilowatthour increase in rates of small electric
customers that are not eligible retail customers
shall be deemed to be equal to such average net per
kilowatthour increase in rates of eligible retail
customers.
(ii) If for any year the small customer rate
impact would exceed the limitation described in
item (i) of this subparagraph (E), the clean coal
fraction for each clean coal electricity buyer
shall be adjusted for such year in a manner that
will result in (a) the quantity of electric power
projected to be purchased by each clean coal
electricity buyer being reduced by an amount
sufficient to result in such deemed rate impact on
all small electric customers (whether served by

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electric utilities or alternative retail electric
suppliers) being equal to such limitation for such
year and (b) any such reductions in amounts
allocated to the clean coal electricity buyers in
order to achieve the objective described in clause
(a) of this item (ii) being allocated to, and
purchased and paid for by, the clean coal
electricity buyers in proportion to their retail
sales to large electric customers.
(iii) Each year, after taking account of the
adjustment, if any, provided for in item (ii) of
this subparagraph (E), a calculation shall be made
to determine whether the large customer deemed
rate impact for such year exceeds $0.005 per
kilowatthour. The "large customer deemed rate
impact" for any year is the projected increase in
electric rates of large electric customers
(whether served by electric utilities or
alternative retail electric suppliers) due to the
cost of electric power purchased under sourcing
agreements to the extent it is based on each clean
coal electricity buyer's retail sales to large
electric customers, which shall be calculated in
substantially the same manner as the calculation
of rate impact on small electric customers, and
shall assume that such cost of purchases under

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sourcing agreements is passed through
proportionally by the clean coal electricity
buyers to their large electric customers. The
calculation of the large customer deemed rate
impact shall (a) assume that the total retail sales
(expressed in kilowatthours sold) to large
electric customers by all clean coal electricity
buyers for any year is the greater of the actual
amount of such sales in such year and the amount of
such sales in 2009 and (b) exclude from the
calculation any actual costs for such year
incurred by the initial clean coal facility to the
extent such costs exceed the corresponding amount
assumed in the "reference case" of the facility
cost report for the initial clean coal facility for
such year and are not principally within the
reasonable control of the initial clean coal
facility.
Any operating costs or revenues deviating from
the corresponding costs assumed in the "reference
case" of the facility cost report for the initial
clean coal facility as a result of changes in
market prices, including, but not limited to,
prices of coal, natural gas, electricity,
by-products, and emissions allowances, shall be
deemed to be outside of the reasonable control of

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the initial clean coal facility and excluded from
the calculation.
Any costs exceeding the corresponding costs
assumed in the "reference case" of the facility
cost report for the initial clean coal facility as
a result of changes in capital costs, fixed
operating costs, variable operating costs,
operating efficiency, and availability, except in
each case to the extent resulting from a change in
market prices, as described in the immediately
preceding paragraph, or from a change in law, as
defined in subsection (b) of Section 1-76 of this
Act, shall be deemed to be within the reasonable
control of the initial clean coal facility and
included in the calculation.
(iv) If for any year the large customer deemed
rate impact would exceed the limitation described
in item (iii) of this subparagraph (E), the
quantity of electric power required to be
purchased by each clean coal electricity buyer
that serves large electric customers under its
sourcing agreement for such year shall be reduced
by such amount as will result in the large customer
deemed rate impact being equal to such limitation
for such year, and the clean coal fractions of each
clean coal electricity buyer that serves large

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electric customers shall be adjusted for such year
to reflect this reduction; provided, however, that
the reduction under this item (iv) shall not exceed
in any year an amount that would result in revenues
under the sourcing agreements being reduced by
more than $50,000,000 in the aggregate for such
year. Any quantities of electric power not
required to be purchased pursuant to the operation
of the immediately preceding sentence may be
disposed of by the initial clean coal facility for
its own account, and the proceeds of any sales of
such electric power shall not be included in the
formula rate.
(v) The details of the calculations
contemplated by this subparagraph (E) shall be set
forth in the sourcing agreements.
(vi) No later than June 30, 2016 2015, the
Commission shall review the limitation on the
total amount purchased paid under sourcing
agreements, if any, with the initial clean coal
facility facilities pursuant to this subsection
(d) and report to the General Assembly its findings
as to the effect of the whether that limitation on
the initial clean coal facility, electric
utilities, alternative retail electric suppliers,
and customers of the electric utilities and the

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alternative retail electric suppliers 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
the use development of clean coal electric power facilities
in Illinois, each electric utility subject to this Section
shall execute a sourcing agreement to source electricity
from the initial clean coal facility. The Agency shall
accept applications to be designated the initial clean coal
facility for a period of 30 days after the effective date
of this amendatory Act of the 98th General Assembly. Each
application shall include a proposed sourcing agreement in
accordance with the requirements of this paragraph (3) and
information showing that the applicant meets the other
criteria set out in the definition of initial clean coal
facility provided in Section 1-10 of this Act. In the event
that only one proposed initial clean coal facility that
meets each of the requirements submits a proposed sourcing
agreement to the Agency within that time period, the Agency
shall select such proposed initial clean coal facility as
the initial clean coal facility. In the event that more
than one proposed initial clean coal facility that meets
each of the requirements submit a proposed sourcing
agreement to the Agency within that time period, the Agency
shall select as the initial clean coal facility the

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electric generating facility that the Agency determines
best promotes the needs and interests of the citizens of
the State of Illinois. In making such determination, the
Agency shall take into account for each proposed initial
clean coal facility the technical and economic feasibility
of such facility, including access to capital and the
financeability of the facility based upon the proposed
sourcing agreement, the projected environmental
performance of such facility, the ability of such facility
to be dispatched to support the transmission grid's
capability to integrate with wind, solar, and other
intermittent resources, and the reliability and cost of
electric transmission service from the facility to the
electric utilities. The Agency shall announce the
designation of the initial clean coal facility within 45
days after the effective date of this amendatory Act of the
98th General Assembly. 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

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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) provisions governing the price paid for
electricity generated by the initial clean coal
facility, which shall be determined according to
clause (iv) of subparagraph (B) of this paragraph (3);
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

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(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 the
sourcing agreement shall pay the contract price
under such sourcing agreement determined pursuant
to subparagraph (A);
(ii) require delivery of electricity by the
initial clean coal facility to the regional
transmission organization market of the utility
party to the sourcing agreement;
(iii) require the utility party to the
sourcing agreement to buy from the initial clean

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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 the clean coal fraction for such utility for
the applicable month, provided that the amount
purchased by the utility in any year will be
limited by paragraph (2) of this subsection (d);
(iv) require the utility party to the sourcing
agreement to pay to the initial clean coal facility
for each month the following: the electric
generation variable charge multiplied by the
quantity of energy required to be purchased by such
utility in such month plus the product of the sum
of the fuel charge plus the fixed monthly charge,
based on the MW of nameplate capacity of the
initial clean coal facility's power block, for
such month, multiplied by the fraction determined
for the utility for such month according to clause
(iii) of this subparagraph (B); for purposes of
this clause (iv), "electric generation variable
charge", "fuel charge", and "fixed monthly charge"
shall each have the meaning ascribed to the term in
subsection (a) of Section 1-76 of this Act; and
(v) be considered pre-existing contracts in
the utility's procurement plans for eligible
retail customers; the provisions of this

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subparagraph (B) are severable under Section 1.31
of the Statute on Statutes;
(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)

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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 the clean coal a fraction
for such utility for applicable month, 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

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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 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) for any month shall be limited to an
amount equal to (1) the difference of the electric
generation variable charge, the fuel charge, and
the fixed monthly charge, that would be payable by
the utility for such month based on such quantity
of electricity between the contract price
determined pursuant to clause (iv) of subparagraph
(B) (A) of this paragraph (3), minus the product of
of this subsection (d) and the day-ahead price for
electricity delivered to the regional transmission
organization market of the electric 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

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busbar, multiplied by (2) the quantity of
electricity determined pursuant to the preceding
clause (i), calculated for each hour in such month;
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 electric 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, if it is

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so authorized by law, 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 comply with provisions reflecting
those set forth in Section 1-76.5 of this Act
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

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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

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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 a reduction 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

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months;
(vii) (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;
(viii) (ix) limit the utility's or alternative
retail electric supplier's obligation to incur any
liability to only those times after 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;
(ix) provide that each electric utility shall
have the right to determine whether the
obligations of the utility party under the
sourcing agreement shall be governed by the power
purchase provisions or the contract for
differences provisions before entering into the
sourcing agreements; the provisions of this item
(ix) are severable under Section 1.31 of the
Statute on Statutes;
(x) provide that the owner or owners of the
initial clean coal facility, which is the
counterparty to such sourcing agreement, shall

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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;
(x) (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;
(xi) (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
(xii) (xiii) conform with customary lender
requirements in power purchase agreements used as
the basis for financing non-utility generators; .
(xiii) provide for performance incentives
regarding availability, efficiency, and by-product
quantities, with premium performance and
shortfalls in performance to result in positive
and negative adjustments, respectively, to the
rate of return approved by the Commission,

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provided that such rate of return in any year shall
not be decreased by more than $25,000,000 or
increased by more than $12,500,000 as a result of
such performance incentives. Such performance
incentives shall be structured so that any
increases in the rate of return as a result of such
performance incentives are designed not to exceed
the projected benefits to the buyers resulting
from the initial clean coal facility's achievement
of that performance incentive;
(xiv) include forecasting and scheduling
obligations that take account of the requirements
of the applicable regional transmission
organizations;
(xv) include operating guidelines relating to
the operating configuration and dispatch of the
initial clean coal facility, which guidelines
shall be subject to change from time to time with
input from a committee consisting of
representatives of the electric utilities and
alternative retail electric suppliers that are
parties to sourcing agreements with the initial
clean coal facility; such operating guidelines
shall take account the initial clean coal
facility's obligations under any agreement for the
purchase of SNG entered into pursuant to item (xvi)

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of this subparagraph (D) and shall be based on
principles of economic dispatch and the assumption
that the variable cost of SNG purchased pursuant to
such agreement is equal to the market price of
natural gas delivered to the initial clean coal
facility; any actions taken or not taken by the
owner of the initial clean coal facility in
compliance with such operating guidelines shall be
deemed to be prudent, and the prudence of the costs
resulting from the action shall be evaluated in
light of the fact that the initial clean coal
facility is required to comply with such operating
guidelines; and
(xvi) authorize the initial clean coal
facility to enter into an agreement with a clean
coal SNG facility or a clean coal SNG brownfield
facility for the purchase by the initial clean coal
facility during all or part of the term of the
sourcing agreement a quantity of SNG produced by
such clean coal SNG facility or clean coal SNG
brownfield facility each year up to the lesser of
(x) the initial clean coal facility's requirements
for imported methane in such year and (y) 16% of
the SNG produced by such clean coal SNG facility or
clean coal SNG brownfield facility during such
year at a delivered price to be set forth in such

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agreement; such agreement shall provide for the
timing of gas deliveries in a manner that
reasonably accommodates the initial clean coal
facility's fuel requirements and generation
schedule; the parties to such agreement may, if
they mutually agree, structure such agreement as a
financial settlement arrangement for the
quantities of SNG set forth above, and such
arrangement shall be deemed to be an agreement
contemplated by this item (xvi); the form for such
agreement shall be subject to approval by the
Agency pursuant to a procedure substantially the
same as that provided in paragraph (4) of this
subsection (d) for the sourcing agreements, with
the clean coal SNG facility or clean coal SNG
brownfield facility participating in place of each
electric utility, and pursuant to a schedule to be
proposed by the initial clean coal facility and
approved by the Agency.
(4) Effective date of sourcing agreements with the
initial clean coal facility. No later than 30 days after
the effective date of this amendatory Act of the 98th
General Assembly, the initial clean coal facility shall
submit a draft sourcing agreement to the Agency and each
electric utility required to enter into such agreements
pursuant to paragraph (3) of this subsection and the

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initial clean coal facility and each such electric utility
shall promptly and diligently negotiate in good faith over
the terms of the sourcing agreement. Within 30 days after
receipt of the draft sourcing agreement, each such electric
utility shall provide the Agency and the owner of the
initial clean coal facility with its comments and
recommended revisions to the draft sourcing agreement.
Within 15 days after the receipt of the electric utility's
comments and recommended revisions, the owner of the
initial clean coal facility shall submit its responsive
comments and a further revised draft of the sourcing
agreement to the Agency. The Agency shall review the draft
sourcing agreement and comments and retain an independent,
qualified, and experienced mediator to mediate disputes
over the draft sourcing agreement's terms. The mediator
shall not own or control any direct or indirect interest in
the initial clean coal facility and shall have no
contractual relationship with the initial clean coal
facility. The mediator shall have knowledge of the energy
industry.
If the parties to the sourcing agreement do not agree
on the terms in the sourcing agreement within 15 days after
receiving the owner's responsive comments and further
revised draft, then the mediator retained by the Agency
shall mediate the dispute between the parties. If the
parties are in agreement on the terms of the sourcing

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agreement, then the Agency shall approve the final draft
sourcing agreement within 30 days after the parties reach
agreement and notify the Commission of that agreement. If,
within 30 days after the commencement of mediation, the
parties have failed to come to agreement, then the Agency
shall, with assistance, as appropriate, from the mediator
retained pursuant to this paragraph (4), review and revise
the draft sourcing agreement as necessary.
The Agency may approve a sourcing agreement only after
it finds the sourcing agreement is consistent with the
provisions of this Act and contains only terms that are
balanced and equitable and fairly protect the interests of
the parties to the sourcing agreement, with such approval
to occur no later than 60 days after the commencement of
the mediation. The Agency shall not withhold or condition
its approval of the sourcing agreement based upon least
cost resource principles or whether or not it would be
prudent for buyers to enter into such an agreement if there
were no legal requirement to do so, nor shall the
resolution of open issues be based on these principles.
If the sourcing agreement is approved, then each
electric utility required to enter into a sourcing
agreement shall have 30 days after either the Agency's
approval or the issuance of any necessary approval by the
Federal Energy Regulatory Commission, whichever is later,
to enter into the sourcing agreement. The Agency shall

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submit the approved sourcing agreement to the Commission
within 15 days after approval. Each electric utility and
the initial clean coal facility shall pay a reasonable fee
as required by the Agency for its services under this
paragraph (4) and shall pay the mediator's reasonable fees,
if any. The Agency shall adopt and make public a policy
detailing the process for retaining a mediator under this
paragraph (4).
(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 a facility
cost report and Commission report, as described in this
paragraph (4), the following reports are prepared and
submitted, whether prepared and submitted before or after
the effective date of this amendatory Act of the 98th
General Assembly. 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

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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
Commission 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

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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

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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; and .
(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.
In the facility cost report, the The quoted
construction costs shall be expressed in nominal
dollars as of the date that the quote is prepared and

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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) In the facility cost report, the 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

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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

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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.

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(6) Costs incurred by a utility under this subsection
(d) or pursuant to a contract or sourcing agreement 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 and Section 1-78 of this 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 and
Section 1-78 of this 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.
(i) The Agency shall assess fees to the initial clean coal
facility to recover the costs incurred in preparation of each
procurement plan for the initial clean coal facility.
(j) The General Assembly finds that enterprises owned by
minorities, women, and persons with disabilities are
under-represented in sales of goods and services used in the

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construction of energy projects and accordingly deems it a
prudent business practice that is in the interests of the
People of the State of Illinois to develop and promote economic
opportunities for enterprises owned by minorities, women, and
persons with disabilities in the energy production industry.
The initial clean coal facility, any clean coal facility,
any clean coal SNG brownfield facility, and any clean coal SNG
facility shall include in any agreement to sell electric power
or SNG entered into pursuant to this Act provisions that
require the owner of the facility to make a good faith effort
to ensure that an amount equal to not less than 15% of the
value of its prime construction contract for the facility shall
be established as a goal to be awarded to minority owned
businesses, female owned businesses, and businesses owned by a
person with a disability; provided that at least 75% of the
amount of such total goal shall be for minority owned
businesses.
"Minority owned business", "female owned business", and
"business owned by a person with a disability" shall have the
meanings ascribed to them in Section 2 of the Business
Enterprise for Minorities, Females, and Persons with
Disabilities Act.
(k) Any clean coal SNG facility or clean coal SNG
brownfield facility shall be authorized to enter into an SNG
purchase agreement with the initial clean coal facility as
described in item (xvi) of subparagraph (D) of paragraph (3) of

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subsection (d) of this Section.
(Source: P.A. 96-159, eff. 8-10-09; 96-1437, eff. 8-17-10;
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; revised
7-25-12.)
(20 ILCS 3855/1-76 new)
Sec. 1-76. Costs and revenue recoverable by the initial
clean coal facility.
(a) The price paid for electricity generated by the initial
clean coal facility shall be based on a formula rate using a
cost of service methodology applicable to wholesale electric
power contracts employing a level or deferred capital component
and in accordance with the Uniform System of Accounts, subject
to and as specifically limited by the provisions set forth in
this Section.
The formula rate shall determine 3 components of the price
under the sourcing agreements: (1) a fuel charge, (2) an
electric generation variable charge, and (3) a fixed monthly
charge. The fuel charge for any month shall be stated in
dollars per month and shall consist of the total actual fuel
costs incurred, after taking account of the subtraction of
miscellaneous net revenue as provided in subsection (d) of this
Section. The electric generation variable charge for any period
shall be stated in dollars per MWh and shall consist of all
costs incurred by the initial clean coal facility, other than

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fuel costs, associated with production of electric energy by
the initial clean coal facility's power block, which costs vary
directly with the level of production of electric energy. The
fixed monthly charge shall be stated in dollars per month per
MW of nameplate capacity of the initial clean coal facility's
power block and shall consist of all costs incurred by the
initial clean coal facility that are described in, and as
limited by the provisions of, subsections (b), (c), (d), (e),
(f), and (g) of this Section, other than the costs incorporated
into the calculation of the fuel charge and the electric
generation variable charge.
No later than 30 days after the approval of the sourcing
agreement by the Agency pursuant to paragraph (4) of subsection
(d) of Section 1-75 of this Act, the initial clean coal
facility shall provide to the Commission projections of its
costs for the term of the sourcing agreements. Within 90 days
thereafter, the Commission shall, based upon such projections
and the provisions of this Section, determine the projected
components of the price for each year for the initial clean
coal facility. No later than 6 months before the expected
commencement of commercial operation of the initial clean coal
facility and the commencement of each operating year
thereafter, the initial clean coal facility shall submit to the
Commission projections of its costs and dispatch levels for the
upcoming year. Within 120 days after the receipt of the initial
clean coal facility's projections of its costs and dispatch

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levels for the upcoming year, the Commission shall calculate a
fixed monthly charge and an electric generation variable charge
for the upcoming year using the inputs to the formula rate
under the provisions of this Section. If the Commission does
not calculate such components of the price for any year as of
the beginning of such year, then the initial clean coal
facility shall calculate such components of the price based
upon its projections and the provisions of this Section, with
any subsequent cost disallowance by the Commission to be
reflected through a true-up of costs in the next year. If at
any time the Commission, acting in accordance with this
Section, disallows any cost, then the amount of such
disallowance shall be incorporated as a deduction into the
calculation of the fixed monthly charge and the electric
generation variable charge, as applicable, for the next year.
(b) Capital costs set by the Commission according to this
subsection (b) shall be included in the formula rate. "Capital
costs" means costs for the purchase of land, buildings,
construction, and equipment to be used in the production of
electricity, and other costs recorded in the Electric Plant
Accounts and other applicable Balance Sheet Accounts of the
Uniform System of Accounts for the initial clean coal facility.
The Capital Development Board shall calculate a range of
capital costs that it believes would be a reasonable cost for
the initial clean coal facility. The Capital Development Board
shall commence performing its responsibilities under this

SB2392 - 84 - LRB098 10321 CEL 40506 b
subsection (b) within 30 days after the effective date of this
amendatory Act of the 98th General Assembly. In determining a
range of capital costs, the Capital Development Board shall
base its evaluation and judgment on professional engineering
and regulatory accounting principles and include any cost
information and update on costs that may be provided by the
initial clean coal facility and shall not employ least cost
resource principles. In addition, the Capital Development
Board may:
(1) include in its consideration the information in a
facility cost report, if any, that was prepared and
submitted by the initial clean coal facility to the
Commission in accordance with paragraph (4) of subsection
(d) of Section 1-75 of this Act;
(2) consult as much as it deems necessary with the
initial clean coal facility;
(3) conduct whatever research and investigation it
deems necessary; and
(4) retain third parties to assist in its
determination, provided that such third parties shall not
own or control any direct or indirect interest in the
initial clean coal facility and shall have no contractual
relationship with the initial clean coal facility.
The initial clean coal facility shall cooperate with the
Capital Development Board in any investigation it deems
necessary.

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The Capital Development Board shall make its final
determination of the range of capital costs confidentially and
shall submit that range to the Commission in a confidential
filing no later than 90 days after the Capital Development
Board is required to commence performing its responsibilities
under this subsection (b). The initial clean coal facility
shall submit to the Commission its estimate of the capital
costs to be included in the formula rate. Only after the
initial clean coal facility has submitted this estimate shall
the Commission publicly announce the range of capital costs
submitted by the Capital Development Board. In the event that
the estimate submitted by the initial clean coal facility is
within or below the range submitted by the Capital Development
Board, the initial clean coal facility's estimate shall be
approved by the Commission as the amount of pre-approved
capital costs.
In the event that the estimate submitted by the initial
clean coal facility is above the range submitted by the Capital
Development Board, the amount of capital costs at the lowest
end of the range submitted by the Capital Development Board
shall be approved by the Commission as the amount of
pre-approved capital costs. "Pre-approved capital costs" means
the amount of capital costs that will be included in the
formula rate to the extent such costs are actually incurred,
with no further review or approval with respect to whether they
are prudently incurred. The Commission's determination of

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pre-approved capital costs shall be made within 15 days after
the initial clean coal facility submits its capital cost
estimate. The Commission's decision regarding pre-approved
capital costs shall be final and shall not be subject to
judicial or administrative review.
Once made, the Commission's determination of the amount of
pre-approved capital costs may not be increased unless the
Commission determines that the incremental costs are
reasonable, in which case one-third of such reasonable
incremental costs shall be included in the formula rate and
recoverable by the initial clean coal facility and two-thirds
of such costs shall be borne by the initial clean coal facility
and its contractors, provided that to the extent such
reasonable incremental costs are the result of change in law or
non-insurable force majeure, all of such costs shall be
included in the formula rate and recoverable by the initial
clean coal facility.
"Change in law" means any change, including any enactment,
repeal, or amendment, in a law, ordinance, rule, regulation,
interpretation, permit, license, consent or order, including
those relating to taxes or to environmental matters, or in the
interpretation or application thereof by any governmental
authority occurring after May 31, 2013.
"Non-insurable force majeure" means events outside of the
reasonable control of the owner of the initial clean coal
facility and its contractors, subcontractors, and agents that

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are not included on a list, to be attached to the sourcing
agreement and subject to the procedures set forth in paragraph
(4) of subsection (d) of Section 1-75 of this Act, of events
that are customarily covered by builder's risk insurance
policies for the construction of electric generating plants and
other large process plants in the United States. "Non-insurable
force majeure" shall not include changes in prices or other
changes in market conditions.
Any rebates, refunds, or other payments received by the
owner of the initial clean coal facility from any of its
contractors with respect to the contractor bearing risk for
capital cost overruns shall be excluded from miscellaneous net
revenue and shall not otherwise reduce the costs of the owner
of the initial clean coal facility for purposes of the formula
rate. For purposes of this subsection (b), "reasonable" means
that the decisions, construction, and supervision of
construction by the owner of the initial clean coal facility
and its contractors underlying the initial capital cost and
significant additions to the initial capital cost of the
initial clean coal facility resulted in efficient, economical,
and timely construction. In determining the reasonableness of
the capital costs of the initial clean coal facility, the
Commission shall consider the knowledge and circumstances
prevailing at the time of each relevant decision or action of
the owner of the initial clean coal facility and its
contractors.

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The Commission may determine that the amount of
pre-approved capital costs may be increased only after notice
and a hearing. At that hearing, the Capital Development Board
shall submit a report recommending whether the incremental
costs should be approved in full or in part or rejected. The
Commission may approve in whole or in part or reject the
incremental capital costs based on whether they are reasonable.
At the request of the owner of the initial clean coal facility
made not more often than once every 12 months during the
construction period of the initial clean coal facility, the
Commission shall conduct interim reviews to determine whether
capital costs specified in such request and incurred or to be
incurred by the owner of the initial clean coal facility are
reasonable.
The Capital Development Board shall monitor the
construction of the initial clean coal facility for the full
duration of construction. The Capital Development Board, in its
discretion, may retain third parties to facilitate such
monitoring, provided that such third parties shall not own or
control any direct or indirect interest in the initial clean
coal facility and shall have no contractual relationship with
the initial clean coal facility. The initial clean coal
facility shall pay a reasonable fee as required by the Capital
Development Board for the Capital Development Board's services
under this subsection (b), and such fee shall not be passed
through to a utility or its customers. If a third party is

SB2392 - 89 - LRB098 10321 CEL 40506 b
retained by the Capital Development Board for the determination
of a range of capital costs or monitoring of construction, the
initial clean coal facility must pay for the third party's
reasonable fees, and such costs may not be passed through to a
utility or its customers.
The provisions of this subsection (b) shall apply to the
capital costs for the initial construction of the initial clean
coal facility and not to capital costs incurred beyond the
initial construction, including costs for replacement of
equipment and capital improvements, which capital costs shall
be subject to review by the Commission and included in the
formula rate to the extent they are determined to be prudently
incurred.
(c) Operations and maintenance costs set by the Commission
according to this subsection (c) shall be included in the
formula rate. Operations and maintenance costs mean costs
incurred for the administration, supervision, operation,
maintenance, preservation, and protection of the initial clean
coal facility's physical plant and other costs recorded in the
Operation and Maintenance Expense Accounts and other
applicable Income Statement Accounts of the Uniform System of
Accounts for the initial clean coal facility. The Commission
shall assess the prudency of the operations and maintenance
costs for the initial clean coal facility and shall allow the
initial clean coal facility to include in the formula rate only
those costs the Commission deems to be prudent. The Commission

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may in its discretion retain an expert to assist in its review
of operations and maintenance costs. The initial clean coal
facility shall pay for the expert's fees if an expert is
retained by the Commission, and such costs may not be passed
through to a utility or its customers. The Commission's
determination regarding the amount of operations and
maintenance costs that may be included in the formula rate for
each year shall be made in accordance with this Section.
(d) Actual fuel costs shall be set by the Agency through a
SNG feedstock procurement, pursuant to Section 1-79 of this
Act, to be performed at least every 5 years, and purchased by
the initial clean coal facility pursuant to a reasonable fuel
supply plan, with coal comprising at least 50% of the total
feedstock over the term of a sourcing agreement with all coal
having high volatile bituminous rank and greater than 1.7
pounds of sulfur per million btu content, SNG derived from coal
comprising at least 50% of the fuel to generate electricity,
SNG derived from biomass comprising up to 10% of the fuel to
generate electricity with the approval of the Commission, and
natural gas comprising the remainder of the fuel to generate
electricity. Actual fuel costs shall consist of all costs
associated with the procurement of fuel, including, but not
limited to, commodity costs, transportation costs,
administrative costs, and costs relating to the procurement
process. Actual fuel costs, as so determined, shall be reduced
by miscellaneous net revenue received by the owner of the

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initial clean coal facility, 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, any capacity derived from the
facility and bid into the capacity markets or otherwise sold
and any energy generated as a result of such capacity being
called, whether generated from synthesis gas derived from coal,
from SNG, or from natural gas, less non-generation variable
costs. "Non-generation variable costs" means all costs, other
than fuel costs, associated with the production of SNG that is
not consumed by the initial clean coal facility's power block,
which costs vary directly with the level of production of SNG.
Actual fuel costs shall be calculated pursuant to this
subsection (d) and included in the formula rate without any
determination by the Commission as to prudency.
(e) Sequestration costs set by the Commission according to
this subsection (e) shall be included in the formula rate.
"Sequestration costs" means costs incurred to (1) capture
carbon dioxide; (2) compress carbon dioxide; (3) build,
operate, and maintain a sequestration site in which carbon
dioxide may be injected; (4) build, operate, and maintain a
carbon dioxide pipeline, which is owned by the initial clean
coal facility; (5) transport the carbon dioxide to a
sequestration site or a pipeline; and (6) perform monitoring,

SB2392 - 92 - LRB098 10321 CEL 40506 b
verification and other activities associated with carbon
capture and sequestration.
"Sequestration capital costs" means sequestration costs
recorded in the Electric Plant Accounts and other applicable
Balance Sheet Accounts of the Uniform System of Accounts for
the initial clean coal facility.
"Sequestration operations and maintenance costs" means
sequestration costs that are recorded in the Operation and
Maintenance Expense Accounts and other applicable Income
Statement Accounts of the Uniform System of Accounts for the
initial clean coal facility and shall include maintenance,
monitoring, and verification costs.
The Capital Development Board shall calculate an estimate
of sequestration capital costs that it believes would be a
reasonable cost for the initial clean coal facility's
sequestration facilities and an estimate of average annual
sequestration operations and maintenance costs that it
believes would be a reasonable average annual operation and
maintenance cost for the initial clean coal facility's carbon
capture and sequestration activities. The Capital Development
Board shall commence performing its responsibilities under
this subsection (e) within 30 days after the effective date of
this amendatory Act of the 98th General Assembly. In
determining sequestration capital costs and sequestration
operations and maintenance costs, the Capital Development
Board shall base its evaluation and judgment on professional

SB2392 - 93 - LRB098 10321 CEL 40506 b
engineering and regulatory accounting principles and include
any cost information and update on costs that may be provided
by the initial clean coal facility and shall not employ least
cost resource principles. In addition, the Capital Development
Board may: (A) include in its consideration cost estimate
information in a facility cost report, if any, that was
prepared and submitted by the initial clean coal facility to
the Commission in accordance with paragraph (4) of subsection
(d) of Section 1-75 of this Act; (B) consult as much as it
deems necessary with the initial clean coal facility; (C)
conduct whatever research and investigation it deems
necessary; and (D) retain third parties to assist in its
determination, provided that such third parties shall not own
or control any direct or indirect interest in the initial clean
coal facility and shall have no contractual relationship with
the initial clean coal facility. The initial clean coal
facility shall cooperate with the Capital Development Board in
any investigation it deems necessary.
The Capital Development Board shall make its final
determination of sequestration capital costs and sequestration
operations and maintenance costs and submit such determination
to the Commission no later than 90 days after the Capital
Development Board is required to commence performing its
responsibilities under this subsection (e). The Capital
Development Board shall monitor construction of the
sequestration facilities in the same manner, and with the same

SB2392 - 94 - LRB098 10321 CEL 40506 b
rights to retain an expert and recover the costs thereof, as
set forth in subsection (b) of this Section.
"Actual sequestration costs" means for any year the sum of:
(i) the annual amortized portion of sequestration capital
costs, based on level amortization from the later of the date
such costs are incurred and the commercial operation date until
the end of the term of the sourcing agreements; (ii) the rate
of return approved by the Commission pursuant to subsection (f)
of this Section applied to sequestration capital costs; and
(iii) the sequestration operations and maintenance costs
incurred in such year.
"Target sequestration costs" means the sum of: (i) the
annual amortized portion of the estimated sequestration
capital costs determined by the Capital Development Board,
based on level amortization from the later of the date such
costs are incurred and the commercial operation date until the
end of the term of the sourcing agreements; (ii) the rate of
return approved by the Commission pursuant to subsection (f) of
this Section applied to the estimated sequestration capital
costs determined by the Capital Development Board; (iii) the
estimate of average annual sequestration operations and
maintenance costs determined by the Capital Development Board,
escalated in accordance with an escalation factor to be
provided in the sourcing agreement from the date of the Capital
Development Board's determination to the mid-point of the
applicable year; (iv) the sequestration cost underrun, if any,

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for the immediately preceding year, except to the extent
applied to allow recovery of a sequestration cost overrun from
a prior year; and (v) any sequestration costs that are the
result of a change in law or non-insurable force majeure.
"Sequestration cost underrun" means for any year the
excess, if any, of target sequestration costs for such year
over actual sequestration costs for such year.
"Sequestration cost overrun" means for any year the excess,
if any, of actual sequestration costs for such year over target
sequestration costs for such year.
For any year in which there is a sequestration cost
underrun, all actual sequestration costs shall be conclusively
deemed to be prudent and shall be included in the formula rate
with no further review or approval in respect of whether they
are prudently incurred. The Commission shall review the costs
to ensure they are mathematically correct.
For any year in which there is a sequestration cost
overrun, the Commission shall determine whether all or a
portion of such sequestration cost overrun was prudently
incurred, except that the rate of return shall not be subject
to review. If the Commission determines that the sequestration
cost overrun was prudently incurred, one-third of such
sequestration cost overrun shall be included in the formula
rate and recoverable by the initial clean coal facility and
two-thirds of such sequestration cost overrun shall be borne by
the initial clean coal facility and not passed through to a

SB2392 - 96 - LRB098 10321 CEL 40506 b
utility, an alternative retail electric supplier, or the
customers of a utility unless and until there is a
sequestration cost underrun for a subsequent year, in which
event the sequestration cost overrun will be included in the
formula rate and recoverable by the initial clean coal facility
up to the amount of the sequestration cost underrun; provided,
however, that if for any year two-thirds of such sequestration
cost overrun exceeds the difference of $20,000,000 minus the
amount of penalty, if any, payable by the initial clean coal
facility pursuant to Section 1-76.5 with respect to that year,
the amount of such excess shall also be included in the formula
rate and recoverable by the initial clean coal facility. The
detailed procedures for implementing this provision shall be
set forth in the sourcing agreements, which procedures shall
include a mechanism for equitably adjusting target
sequestration costs for any year in which the quantity of
carbon dioxide actually captured and sequestered by the initial
clean coal facility is greater than the quantity assumed in
calculating the estimated costs for such year.
"Change in law" means any change, including any enactment,
repeal, or amendment, in a law, ordinance, rule, regulation,
interpretation, permit, license, consent or order, including
those relating to taxes or to environmental matters, or in the
interpretation or application thereof by any governmental
authority occurring after May 31, 2013.
"Non-insurable force majeure" means events outside of the

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reasonable control of the owner of the initial clean coal
facility and its contractors, subcontractors, and agents that
are not included on a list, to be attached to the sourcing
agreement and subject to the procedures set forth in paragraph
(4) of subsection (d) of Section 1-75 of this Act, of events
that are customarily covered by builder's risk insurance
policies for the construction of electric generating plants and
other large process plants in the United States. "Non-insurable
force majeure" shall not include changes in prices or other
changes in market conditions.
(f) The Commission shall determine within 120 days after
the effective date of this amendatory Act of the 98th General
Assembly or 120 days after the owner of the initial clean coal
facility files initial direct testimony regarding rate of
return with the Commission, whichever is later, the total rate
of return on invested capital for the initial clean coal
facility following notice and a public hearing. At the hearing,
all interested parties, including utilities, alternative
retail electric suppliers, the Attorney General, the Agency,
and customers, shall be given an opportunity to be heard. In
determining the rate of return, the Commission shall select a
sufficient return on investment so as to enable the initial
clean coal facility to attract capital in financial markets at
competitive rates. The Commission shall consider the rates of
return received by developers of facilities similar to the
initial clean coal facility inside or outside Illinois, the

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need to balance an incentive for clean-coal technology with the
need to protect Illinois ratepayers from high electricity
costs, and any other information the Commission deems relevant.
The Agency shall recommend a rate of return to the
Commission utilizing the criteria in this subsection (f). The
Commission shall further take into account the recommendation
of the Agency, but shall not be bound by it. The rate of return
shall be no lower than 75 basis points lower than the weighted
average authorized total rates of return of the electric
utilities in accordance with original cost rate base for their
electric distribution assets as of the effective date of this
amendatory Act of the 98th General Assembly. Notwithstanding
the minimum rate of return established in the preceding
sentence, the rate of return shall be no greater than the total
rate of return on invested capital that the initial clean coal
facility would achieve based on an assumed 55% debt and 45%
equity capital structure, with the cost of debt being the
actual average cost, including all associated costs and fees,
of the initial clean coal facility's debt and the cost of
equity being 11.5%. The Commission's determination of the rate
of return shall include a mechanism providing for a one-time
adjustment at or about the commencement of commercial operation
of the initial clean coal facility to adjust for changes in
applicable Treasury yield rates between the date of its
provisional determination of the rate of return and the dates
of construction period borrowing by the initial clean coal

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facility, which adjustment shall apply to 55% of total capital.
The Commission's decision shall be final and not subject to
any rehearing or administrative or judicial review. The rate of
return determined by the Commission pursuant to this subsection
(f) shall apply for the term of the sourcing agreements and
shall not be subject to change, except for the one-time
adjustment to reflect Treasury yield rate changes as expressly
contemplated by this subsection (f) and as otherwise expressly
provided in subsection (b) of Section 1-76.5 of this Act.
(g) The following shall not be included in determining the
formula rate: advertising expenses that do not meet the
requirements of Sections 9-225 and 9-226 of the Public
Utilities Act, political activity or lobbying expenses as
defined by Section 9-224 of the Public Utilities Act, social
club dues, or charitable contributions, to the extent, in each
case, that a utility would not be permitted to recover such
costs.
(h) Except as otherwise provided in subsections (b) and (f)
of this Section 1-76, within 30 days after a decision of the
Commission on recoverable costs under this Section, any
interested party to the Commission's decision may apply for a
rehearing with respect to the decision. The Commission shall
receive and consider such application for rehearing and shall
grant or deny the application in whole or in part within 20
days from the date of the receipt thereof by the Commission. If
no rehearing is applied for within the required 30 days or an

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application for rehearing is denied, the Commission decision
shall be final.
If an application for rehearing is granted, the Commission
shall hold a rehearing within 30 days after granting the
application. The decision of the Commission upon rehearing
shall be final. Except as otherwise provided in subsections (b)
and (f) of this Section 1-76, any person affected by a decision
of the Commission under this Section 1-76 may have the decision
reviewed only under and in accordance with the Administrative
Review Law. Except as otherwise provided in subsections (b) and
(f) of this Section 1-76, the provisions of the Administrative
Review Law, all amendments and modifications thereof and the
rules adopted pursuant thereto, shall apply to and govern all
proceedings for the judicial review of final administrative
decisions of the Commission under this subsection (h). The term
"administrative decision" is defined as in Section 3-101 of the
Code of Civil Procedure.
(i) The Capital Development Board shall adopt and make
public a policy detailing the process for retaining third
parties under this Section. Any third parties retained to
assist with calculating the capital costs or sequestration
costs shall be retained no later than 45 days after the
effective date of this amendatory Act of the 98th General
Assembly.
(20 ILCS 3855/1-76.5 new)

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Sec. 1-76.5. Capture and sequestration requirements for
initial clean coal facility.
(a) The initial clean coal facility shall provide
documentation to the Commission each 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, the owner of the facility fails to demonstrate
that (1) the portion of the facility that produces SNG captured
and sequestered at least 90% of the carbon dioxide it would
otherwise emit and (2) the initial clean coal facility as a
whole captured and sequestered at least 50% of the total carbon
emissions that the facility would otherwise emit or if the
sequestration of emissions from prior years has failed,
resulting in the release of carbon dioxide into the atmosphere,
or both, then the owner of the initial clean coal facility must
pay a penalty of $20,000,000, which shall be deposited into the
Energy Efficiency Trust Fund and distributed pursuant to
subsection (b) of Section 6-6 of the Renewable Energy, Energy
Efficiency, and Coal Resources Development Law of 1997.
If during the first 12 months of commercial operation of
the initial clean coal facility, there are more than 4 stops
and starts of the portion of the facility that produces SNG,
with each stop and start of an individual unit constituting one

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stop and start, then the calculation of the quantities
described in this subsection (a) shall not take into account
any carbon dioxide emissions from the portion of the facility
that produces SNG occurring during the stop and start-up
periods, including related periods of non-steady state
operation, associated with such excess stops and starts. The
penalty resulting from the failure to capture and sequester at
least the minimum amount of carbon dioxide shall not be passed
through to a utility, an alternative retail electric supplier,
or the customers of a utility. The initial clean coal facility
shall not forfeit its designation as the initial clean coal
facility if the facility fails to fully comply with the
applicable carbon sequestration requirements in any given
year, provided the requisite penalties are complied with.
(b) In addition to any penalty for the initial clean coal
facility's failure to capture and sequester at least its
minimum sequestration requirement, the Attorney General, on
behalf of the People of the State of Illinois, shall
specifically enforce the facility's sequestration requirement
and the other terms of this contract provision. Such action may
be filed in any circuit court in Illinois. By entering into a
sourcing agreement pursuant to subsection (d) of Section 1-75
of this Act, the initial clean coal facility agrees to waive
any objections to venue or to the jurisdiction of the court
with regard to the Attorney General's action for specific
performance under this Section. The Commission may reduce the

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recoverable rate of return approved pursuant to Section 1-76 of
this Act for the facility if the facility willfully fails to
comply with the carbon capture and sequestration requirements
set forth in this Section.
(c) Compliance with the capture and sequestration
requirements of this Section shall be assessed annually by the
Commission, which may in its discretion retain an expert to
facilitate its assessment. The initial clean coal facility
shall pay for the expert's reasonable fees if an expert is
retained by the Commission, and such costs shall not be passed
through to a utility, an alternative retail electric supplier,
or the customers of a utility. The Commission shall adopt and
make public a policy detailing the process for retaining an
expert under this Section.
(d) Responsibility for compliance with the capture and
sequestration requirements specified in this Section for the
initial clean coal facility shall reside solely with the
initial clean coal facility regardless of whether the facility
has contracted with another party to capture, transport, or
sequester carbon dioxide.
(20 ILCS 3855/1-77.5 new)
Sec. 1-77.5. Sequestration permitting, oversight, and
investigations.
(a) No clean coal facility, initial clean coal facility,
clean coal SNG brownfield facility, or clean coal SNG facility

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may transport or sequester carbon dioxide unless the Commission
approves the method of carbon dioxide transportation or
sequestration as provided in this Section. Approval shall be
required regardless of whether the facility has contracted with
another party to transport or sequester the carbon dioxide.
Nothing in this subsection (a) shall release the owner or
operator of a carbon dioxide sequestration site or carbon
dioxide pipeline from any other permitting requirements under
applicable State and federal laws, statutes, rules, or
regulations.
(b) No later than 3 months prior to the date upon which the
company intends to commence construction of the facility, the
owner of the facility shall file with the Commission a carbon
dioxide transportation or sequestration plan. The Commission
shall review proposed carbon dioxide transportation and
sequestration methods and shall approve those methods it deems
reasonable and cost-effective. For purposes of this review,
"cost-effective" means a commercially reasonable price for
similar carbon dioxide transportation or sequestration
techniques. In determining whether sequestration through
injection is reasonable and cost-effective, the Commission may
consult with the Illinois State Geological Survey.
The Commission shall hold a public hearing within 30 days
after receipt of the facility's carbon dioxide transportation
or sequestration plan. The Commission shall post notice of the
review on its website upon submission of a carbon dioxide

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transportation or sequestration method and shall accept
written public comments. The Commission shall take the comments
into account when making its decision. However, the Commission
shall not approve a carbon dioxide sequestration method if the
owner or operator of the sequestration site has not received
(1) an Underground Injection Control permit from the Illinois
Environmental Protection Agency or the United States
Environmental Protection Agency pursuant to the Environmental
Protection Act, (2) an Underground Injection Control permit
from the Illinois Department of Natural Resources pursuant to
the Illinois Oil and Gas Act, or (3) any applicable permit from
the state in which the sequestration site is located if the
sequestration shall take place outside of Illinois. The
Commission shall approve or deny the carbon dioxide
transportation or sequestration method within 90 days after the
receipt of all required information.
(c) At least annually, the Illinois Environmental
Protection Agency shall inspect all carbon dioxide
sequestration sites in Illinois to ensure the safety and
feasibility of those sequestration sites. However, the
Illinois Environmental Protection Agency may, as often as
deemed necessary, monitor and conduct investigations of those
sites. The owner or operator of the sequestration site must
cooperate with the Illinois Environmental Protection Agency
investigations of carbon dioxide sequestration sites. If the
Illinois Environmental Protection Agency determines at any

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time a site creates conditions that warrant the issuance of a
seal order under Section 34 of the Environmental Protection
Act, then the Illinois Environmental Protection Agency shall
seal the site pursuant to the Environmental Protection Act. If
the Illinois Environmental Protection Agency determines at any
time a carbon dioxide sequestration site creates conditions
that warrant the institution of a civil action for an
injunction under Section 43 of the Environmental Protection
Act, then the Illinois Environmental Protection Agency shall
request the State's Attorney or the Attorney General to
institute such action. The Illinois Environmental Protection
Agency shall provide notice of any such actions as soon as
possible on its website.
(d) At least annually, the Commission shall inspect all
carbon dioxide pipelines in Illinois that transport carbon
dioxide to ensure the safety and feasibility of those
pipelines. However, the Commission may, as often as deemed
necessary, monitor and conduct investigations of those
pipelines. The owner or operator of the pipeline must cooperate
with the Commission investigations of the carbon dioxide
pipelines. If the Commission determines at any time that a
carbon dioxide pipeline creates conditions that warrant the
issuance of a seal order under Section 34 of the Environmental
Protection Act, then the Commission shall notify the Illinois
Environmental Protection Agency of such conditions. In
circumstances in which the carbon dioxide pipeline creates a

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substantial danger to the environment or public health or to
the welfare of persons when the danger is to the livelihood of
those persons, the State's Attorney or Attorney General may,
upon the request of the Commission or on his or her own motion,
institute a civil action for an immediate injunction to halt
any discharge or other activity causing or contributing to the
danger or require any other action as may be necessary. The
Court may issue an ex parte order and shall schedule a hearing
on the matter no later than 3 business days after the date of
the injunction. The Commission shall provide notice of any such
actions as soon as possible on its website.
(20 ILCS 3855/1-79 new)
Sec. 1-79. Feedstock procurement.
(a) A feedstock procurement plan shall, every 5 years, or
more frequently with respect to feedstock that cannot
reasonably be procured for a 5-year period on acceptable terms,
be prepared for the initial clean coal facility based on the
initial clean coal facility's projection of feedstock usage and
ratios, and consistent with the applicable requirements of this
Act. The plan shall specifically identify the feedstock
products to be procured following plan approval and shall
follow all the requirements set forth in this Act and all
applicable State and federal laws, statutes, rules, or
regulations, as well as Commission orders. Nothing in this
Section precludes consideration of contracts longer than 5

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years and related forecast data. Any feedstock procurement
occurring in accordance with this plan shall be competitively
bid through a request for proposals process. Approval and
implementation of the feedstock procurement plan shall be
subject to review and approval by the Commission according to
the provisions set forth in this Section. A feedstock
procurement plan shall include each of the following
components:
(1) Daily generation analysis. This analysis shall
include:
(A) multi-year historical analysis of hourly
generation; and
(B) known or projected changes to future
generation.
(2) Determination of the fuel specifications required
for the initial clean coal facility, including:
(A) feedstock mix, as set by the initial clean coal
facility with coal having high volatile bituminous
rank and greater than 1.7 pounds of sulfur per million
btu content and comprising at least 50% of the total
feedstock over the term of the sourcing agreement;
(B) volume of each feedstock required;
(C) quality standards of each feedstock;
(D) transportation and delivery requirements and
associated costs and impacts on the performance,
availability, and reliability of the initial clean

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coal facility;
(E) technical specifications of the initial clean
coal facility for its feedstocks; and
(F) appropriate testing of any proposed feedstock
before it is incorporated into the feedstock
procurement plan or process to determine the effect of
such feedstock on the performance, availability, and
reliability of the initial clean coal facility.
(b) The feedstock procurement process shall be
administered by a feedstock procurement administrator and
monitored by a feedstock procurement monitor.
(1) The feedstock procurement administrator shall:
(A) design the final feedstock procurement process
in accordance with subsection (d) of this Section
following Commission approval of the feedstock
procurement plan;
(B) develop feedstock benchmarks in accordance
with paragraph (3) of subsection (d) of this Section to
be used to evaluate bids; these benchmarks shall be
submitted to the Commission for review and approval on
a confidential basis prior to the feedstock
procurement event;
(C) serve as the interface between the initial
clean coal facility and feedstock suppliers regarding
bidding and contract negotiations;
(D) manage the bidder pre-qualification and

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registration process;
(E) obtain the initial clean coal facility's
agreement to the final form of all supply contracts and
credit collateral agreements;
(F) administer the request for feedstock proposals
process;
(G) have the discretion to negotiate to determine
whether bidders are willing to lower the price of bids
that meet the benchmarks approved by the Commission;
any post-bid negotiations with bidders shall be
limited to price only and shall be completed within 24
hours after opening the sealed bids and shall be
conducted in a fair and unbiased manner; in conducting
the negotiations, there shall be no disclosure of any
information derived from proposals submitted by
competing bidders; if information is disclosed to any
bidder, it shall be provided to all competing bidders;
(H) maintain confidentiality of supplier and
bidding information in a manner consistent with all
applicable laws, rules, regulations, and tariffs;
(I) submit a confidential report to the Commission
recommending acceptance or rejection of bids;
(J) notify the facility of contract counterparties
and contract specifics; and
(K) administer related contingency feedstock
procurement events.

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(2) The feedstock procurement monitor, who shall be
retained by the Commission, shall:
(A) monitor interactions among the feedstock
procurement administrator, suppliers, and the initial
clean coal facility;
(B) monitor and report to the Commission on the
progress of the feedstock procurement process;
(C) provide an independent confidential report to
the Commission regarding the results of the feedstock
procurement event;
(D) preserve the confidentiality of supplier and
bidding information in a manner consistent with all
applicable laws, rules, regulations, and tariffs;
(E) provide expert advice to the Commission and
consult with the feedstock procurement administrator
regarding issues related to feedstock procurement
process design, rules, protocols, and policy-related
matters;
(F) consult with the feedstock procurement
administrator regarding the development and use of
benchmark criteria, standard form contracts, credit
policies, and bid documents; and
(G) assess compliance with the procurement plans
approved by the Commission.
(c) The feedstock procurement process shall be conducted as
follows:

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(1) Beginning in 2014, the initial clean coal facility
shall annually provide a range of feedstock requirement
forecasts to the Agency by July 15 of each year, or such
other date as may be required by the Commission or Agency.
The feedstock requirement forecasts shall cover the 5-year
feedstock procurement planning period for the next
feedstock procurement plan, or such other longer period
that the Agency or the Commission may require, and shall
include daily data representing a high generation, low
generation and expected generation scenario for the
initial clean coal facility. The initial clean coal
facility shall provide supporting data and assumptions for
each of the scenarios.
(2) Beginning in 2014, the Agency shall at least every
5 years prepare a feedstock procurement plan by August 15th
of the applicable year, or such other date as may be
required by the Commission. The feedstock procurement plan
shall identify the portfolio of feedstocks to be procured.
Copies of the feedstock procurement plan shall be posted
and made publicly available on the Agency's and
Commission's websites, and copies shall also be provided to
the initial clean coal facility. The initial clean coal
facility shall have 30 days following the date of posting
to provide comment to the Agency on the feedstock
procurement plan. Other interested entities also may
comment on the feedstock procurement plan. All comments

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submitted to the Agency shall be specific, supported by
data or other detailed analyses, and, if objecting to all
or a portion of the feedstock procurement plan, accompanied
by specific alternative wording or proposals. All comments
shall be posted on the Agency's and Commission's websites.
During this 30-day comment period, the Agency shall hold at
least one public hearing for the purpose of receiving
public comment on the procurement plan. Within 14 days
following the end of the 30-day review period, the Agency
shall revise the feedstock procurement plan as necessary
based on the comments received, file the feedstock
procurement plan with the Commission, and post the
feedstock procurement plan on the websites.
(3) Within 5 days after the filing of the feedstock
procurement plan, any person objecting to the feedstock
procurement plan shall file an objection with the
Commission. Within 10 days after the filing, the Commission
shall determine whether a hearing is necessary. The
Commission shall enter its order confirming or modifying
the feedstock procurement plan within 90 days after the
filing of the feedstock procurement plan by the Agency.
(4) The Commission shall approve the feedstock
procurement plan, including expressly the forecast used in
the feedstock procurement plan, if the Commission
determines that it shall ensure adequate, reliable,
affordable, and environmentally sustainable feedstocks to

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the initial clean coal facility at the lowest total cost
over time, taking into account any benefits of price
stability and other criteria set forth in this Section.
(d) The feedstock procurement process shall include each of
the following components:
(1) Solicitation, pre-qualification, and registration
of bidders. The feedstock procurement administrator shall
disseminate information to potential bidders to promote a
feedstock procurement event, notify potential bidders that
the feedstock procurement administrator may enter into a
post-bid price negotiation with bidders that meet the
applicable benchmarks, provide supply requirements, and
otherwise explain the competitive feedstock procurement
process. In addition to such other publication as the
feedstock procurement administrator determines is
appropriate, this information shall be posted on the
Agency's and the Commission's websites. The feedstock
procurement administrator shall also administer the
prequalification process, including evaluation of
creditworthiness, compliance with feedstock procurement
rules, and agreement to the standard form contract
developed pursuant to paragraph (2) of this subsection (d).
The feedstock procurement administrator shall then
identify and register bidders to participate in the
feedstock procurement event.
(2) Standard contract forms and credit terms and

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instruments. The feedstock procurement administrator, in
consultation with the initial clean coal facility,
electric utilities, alternative retail electric suppliers,
the Commission, and other interested parties and subject to
Commission oversight, shall develop and provide standard
contract forms for the supplier contracts that meet
generally accepted industry practices. Standard credit
terms and instruments that meet generally accepted
industry practices shall be similarly developed. The
feedstock procurement administrator shall make available
to the Commission all written comments it receives on the
contract forms, credit terms, or instruments. If the
feedstock procurement administrator cannot reach agreement
with the initial clean coal facility as to the contract
terms and conditions, then the feedstock procurement
administrator must notify the Commission of any disputed
terms and the Commission shall resolve the dispute. The
terms of the contracts shall not be subject to negotiation
by winning bidders, and the bidders must agree to the terms
of the contract in advance so that winning bids are
selected solely on the basis of price.
(3) Establishment of a market-based price benchmark.
As part of the development of the feedstock procurement
process, the feedstock procurement administrator, in
consultation with the Commission staff, Agency staff, and
the feedstock procurement monitor, shall establish

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benchmarks for evaluating the final prices in the contracts
for each of the feedstocks that shall be procured through
the feedstock procurement process. The benchmarks shall be
based on price data for similar feedstocks for the same
delivery period and similar delivery points, or other
delivery points after adjusting for that difference. The
price benchmarks may also be adjusted to take into account
differences between the information reflected in the
underlying data sources and the specific feedstocks and
gasification feedstock procurement process being used to
procure for the initial clean coal facility. The benchmarks
shall be confidential but shall be provided to the
Commission, and shall be subject to Commission review and
approval, prior to a feedstock procurement event.
(4) Request for proposals. The feedstock procurement
administrator shall design and issue a request for
proposals to supply coal or natural gas in accordance with
the initial clean coal facility's usage plan, as approved
by the Commission. The request for proposals shall set
forth a procedure for sealed, binding commitment bidding
with pay-as-bid settlement, and provision for selection of
bids on the basis of price.
(5) A plan for implementing contingencies in the event
of supplier default or failure of the feedstock procurement
process to fully meet the expected generation requirement
due to insufficient supplier participation, Commission

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rejection of results, or any other cause. The plan must be
specific to the initial clean coal facility's feedstock
specifications and requirements.
The feedstock procurement process described in this
subsection (d) is exempt from the requirements of the Illinois
Procurement Code pursuant to Section 20-10 of the Illinois
Procurement Code.
(e) Within 2 business days after opening the sealed bids,
the feedstock procurement administrator shall submit a
confidential report to the Commission. The report shall contain
the results of the bidding for each of the feedstock types
along with the feedstock procurement administrator's
recommendation for the acceptance and rejection of bids based
on the price benchmark criteria and other factors observed in
the process. The feedstock procurement monitor also shall
submit a confidential report to the Commission within 2
business days after opening the sealed bids. The report shall
contain the feedstock procurement monitor's assessment of
bidder behavior in the process, as well as an assessment of the
feedstock procurement administrator's compliance with the
feedstock procurement process and rules. The Commission shall
review the confidential reports submitted by the feedstock
procurement administrator and feedstock procurement monitor
and shall accept or reject the recommendations of the feedstock
procurement administrator within 2 business days after receipt
of the reports.

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(f) Within 3 business days after the Commission decision
approving the results of a feedstock procurement event, the
initial clean coal facility shall enter into binding
contractual arrangements with the winning suppliers using
standard form contracts.
(g) The names of the successful bidders and the amount of
feedstock to be delivered for each contract type and for each
contract term shall be made available to the public at the time
of Commission approval of a feedstock procurement event. The
Commission, the feedstock procurement monitor, the feedstock
procurement administrator, the Agency, and all participants in
the feedstock procurement process shall maintain the
confidentiality of all other supplier and bidding information
in a manner consistent with all applicable laws, rules,
regulations, and tariffs. Confidential information, including
the confidential reports submitted by the feedstock
procurement administrator and feedstock procurement monitor
pursuant to subsection (e) of this Section, shall not be made
publicly available and shall not be discoverable by any party
in any proceeding, absent a compelling demonstration of need,
nor shall those reports be admissible in any proceeding other
than one for law enforcement purposes.
(h) Within 2 business days after a Commission decision
approving the results of a feedstock procurement event or such
other date as may be required by the Commission from time to
time, the initial clean coal facility shall file for

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informational purposes with the Commission its actual or
estimated feedstock costs reflecting the costs associated with
the feedstock procurement.
(i) The initial clean coal facility shall pay for
reasonable costs incurred by the Agency in administering the
feedstock procurement events. The Agency shall determine the
amount owed for each feedstock procurement event, and the
initial clean coal facility shall pay that amount to the Agency
within 30 days after being informed by the Agency of the amount
owed. Those funds shall be deposited into the Agency Operations
Fund, pursuant to Section 1-55 of this Act, to be used to
reimburse expenses related to the feedstock procurement.
(j) The Commission has the authority to adopt rules to
carry out the provisions of this Section. For the public
interest, safety, and welfare, the Commission also has the
authority to adopt rules to carry out the provisions of this
Section on an emergency basis.
(k) On or before April 1 of each year, the Commission may,
hold an informal hearing for the purpose of receiving comments
on the prior year's feedstock procurement process and any
recommendations for change.
(l) For all purposes of this Section 1-79 and subsection
(a-5) of Section 1-75 of this Act, (i) feedstock procurement
shall be deemed to include transportation of the feedstock
products to the initial clean coal facility (including the
acquisition by the initial clean coal facility, as appropriate,

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of trucks, railcars or other transportation equipment), (ii)
feedstock procurement shall not be deemed to include day-to-day
performance and administration of feedstock procurement and
transportation arrangements, including scheduling, weighing,
quality determination, acceptance or rejection of shipments,
price adjustments, documentation and related activities, all
of which shall be performed by the owner of the initial clean
coal facility, and (iii) feedstock supplier shall be deemed to
include feedstock transporters and providers of feedstock
transportation equipment.
(m) Any agreement for the purchase of SNG entered into by
the initial clean coal facility pursuant to item (xvi) of
subparagraph (D) of paragraph (3) of subsection (d) of Section
1-75 of this Act shall be deemed for all purposes, including,
but not limited to, the inclusion of costs under such agreement
being included as part of the initial clean coal facility's
actual fuel costs pursuant to subsection (d) of Section 1-76 of
this Act, to have been entered into pursuant to the procurement
process set forth in this Section 1-79, even though such
agreement shall not be subject to competitive bidding. The
Agency, the feedstock procurement administrator, and the
feedstock procurement monitor shall take account of the initial
clean coal facility's obligations under any such agreement in
determining the feedstock procurement arrangements that may be
entered into by the initial clean coal facility pursuant to
this Section 1-79, as well as the implementation and

SB2392 - 121 - LRB098 10321 CEL 40506 b
administration of such feedstock procurement arrangements.
(20 ILCS 3855/1-81 new)
Sec. 1-81. Limited non-impairment.
(a) The State of Illinois pledges that the State shall not
enact any law or take any action to:
(1) break, or repeal the authority for, sourcing
agreements in a form approved by the Agency and entered
into between electric utilities and the initial clean coal
facility pursuant to subsection (d) of Section 1-75 of this
Act;
(2) break, or repeal the authority for, sourcing
agreements in a form approved by the Agency and entered
into between alternative retail electric suppliers and the
initial clean coal facility;
(3) deny electric utilities full cost recovery for
their costs incurred under those sourcing agreements;
(4) deny the initial clean coal facility full cost
recovery under those sourcing agreements for costs that are
recoverable under Section 1-76 of this Act.
(5) repeal or remove the requirement that electric
utilities shall enter into sourcing agreements with the
initial clean coal facility under paragraph (3) of
subsection (d) of Section 1-75 of this Act or subsection
(c) of Section 16-116 of the Public Utilities Act; or
(6) repeal or remove the requirement that alternative

SB2392 - 122 - LRB098 10321 CEL 40506 b
retail electric suppliers shall enter into sourcing
agreements with the initial clean coal facility under item
(iv) of paragraph (5) of subsection (d) of Section 16-115
of the Public Utilities Act.
These pledges are for the benefit of the parties to those
sourcing agreements and the issuers and holders of bonds or
other obligations issued or incurred to finance or refinance
the initial clean coal facility. The initial clean coal
facility is authorized to include and refer to these pledges in
any financing agreement into which it may enter in regard to
those sourcing agreements.
(b) The State of Illinois retains and reserves all other
rights to enact new or amendatory legislation or take any other
action, without impairment of the right of the initial clean
coal facility to recover prudently incurred costs resulting
from the new or amendatory legislation or other action as
approved by the Commission, including, but not limited to,
legislation or other action that would: (1) directly or
indirectly raise the costs that the initial clean coal facility
must incur; (2) directly or indirectly place additional
restrictions, regulations, or requirements on the initial
clean coal facility; (3) prohibit sequestration in general or
prohibit a specific sequestration method or project; or (4)
increase minimum sequestration requirements for the initial
clean coal facility to a technically feasible extent.

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Section 10. The Illinois Procurement Code is amended by
changing Sections 1-10 and 20-10 as follows:
(30 ILCS 500/1-10)
Sec. 1-10. Application.
(a) This Code applies only to procurements for which
contractors were first solicited on or after July 1, 1998. This
Code shall not be construed to affect or impair any contract,
or any provision of a contract, entered into based on a
solicitation prior to the implementation date of this Code as
described in Article 99, including but not limited to any
covenant entered into with respect to any revenue bonds or
similar instruments. All procurements for which contracts are
solicited between the effective date of Articles 50 and 99 and
July 1, 1998 shall be substantially in accordance with this
Code and its intent.
(b) This Code shall apply regardless of the source of the
funds with which the contracts are paid, including federal
assistance moneys. This Code shall not apply to:
(1) Contracts between the State and its political
subdivisions or other governments, or between State
governmental bodies except as specifically provided in
this Code.
(2) Grants, except for the filing requirements of
Section 20-80.
(3) Purchase of care.

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(4) Hiring of an individual as employee and not as an
independent contractor, whether pursuant to an employment
code or policy or by contract directly with that
individual.
(5) Collective bargaining contracts.
(6) Purchase of real estate, except that notice of this
type of contract with a value of more than $25,000 must be
published in the Procurement Bulletin within 7 days after
the deed is recorded in the county of jurisdiction. The
notice shall identify the real estate purchased, the names
of all parties to the contract, the value of the contract,
and the effective date of the contract.
(7) Contracts necessary to prepare for anticipated
litigation, enforcement actions, or investigations,
provided that the chief legal counsel to the Governor shall
give his or her prior approval when the procuring agency is
one subject to the jurisdiction of the Governor, and
provided that the chief legal counsel of any other
procuring entity subject to this Code shall give his or her
prior approval when the procuring entity is not one subject
to the jurisdiction of the Governor.
(8) Contracts for services to Northern Illinois
University by a person, acting as an independent
contractor, who is qualified by education, experience, and
technical ability and is selected by negotiation for the
purpose of providing non-credit educational service

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activities or products by means of specialized programs
offered by the university.
(9) Procurement expenditures by the Illinois
Conservation Foundation when only private funds are used.
(10) Procurement expenditures by the Illinois Health
Information Exchange Authority involving private funds
from the Health Information Exchange Fund. "Private funds"
means gifts, donations, and private grants.
(11) Public-private agreements entered into according
to the procurement requirements of Section 20 of the
Public-Private Partnerships for Transportation Act and
design-build agreements entered into according to the
procurement requirements of Section 25 of the
Public-Private Partnerships for Transportation Act.
(c) This Code does not apply to the electric power
procurement process provided for under Section 1-75 of the
Illinois Power Agency Act and Section 16-111.5 of the Public
Utilities Act.
(d) Except for Section 20-160 and Article 50 of this Code,
and as expressly required by Section 9.1 of the Illinois
Lottery Law, the provisions of this Code do not apply to the
procurement process provided for under Section 9.1 of the
Illinois Lottery Law.
(e) This Code does not apply to the process used by the
Capital Development Board to retain a person or entity to
assist the Capital Development Board with its duties related to

SB2392 - 126 - LRB098 10321 CEL 40506 b
the determination of costs of a clean coal SNG brownfield
facility, as defined by Section 1-10 of the Illinois Power
Agency Act, as required in subsection (h-3) of Section 9-220 of
the Public Utilities Act, including calculating the range of
capital costs, the range of operating and maintenance costs, or
the sequestration costs or monitoring the construction of clean
coal SNG brownfield facility for the full duration of
construction.
(f) This Code does not apply to the process used by the
Illinois Power Agency to retain a mediator to mediate sourcing
agreement disputes between gas utilities and the clean coal SNG
brownfield facility, as defined in Section 1-10 of the Illinois
Power Agency Act, as required under subsection (h-1) of Section
9-220 of the Public Utilities Act.
(g) This Code does not apply to the processes used by the
Illinois Power Agency to retain a mediator to mediate contract
disputes between gas utilities and the clean coal SNG facility
and to retain an expert to assist in the review of contracts
under subsection (h) of Section 9-220 of the Public Utilities
Act. This Code does not apply to the process used by the
Illinois Commerce Commission to retain an expert to assist in
determining the actual incurred costs of the clean coal SNG
facility and the reasonableness of those costs as required
under subsection (h) of Section 9-220 of the Public Utilities
Act.
(h) This Code does not apply to the process to procure or

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contracts entered into in accordance with Sections 11-5.2 and
11-5.3 of the Illinois Public Aid Code.
(i) (h) Each chief procurement officer may access records
necessary to review whether a contract, purchase, or other
expenditure is or is not subject to the provisions of this
Code, unless such records would be subject to attorney-client
privilege.
(j) This Code does not apply to the process used by the
Capital Development Board to retain a person or entity to
assist the Capital Development Board with its duties related to
the determination of costs of an initial clean coal facility,
as defined under Section 1-10 of the Illinois Power Agency Act,
as required under Section 1-76 of the Illinois Power Agency
Act, including calculating the range of capital costs or the
sequestration costs or monitoring the construction of initial
clean coal facility for the full duration of construction.
(k) This Code does not apply to the process used by the
Illinois Power Agency to retain a mediator to mediate sourcing
agreement disputes between electric utilities or alternative
retail electric suppliers and the initial clean coal facility,
as defined under Section 1-10 of the Illinois Power Agency Act,
as required under paragraph (4) of subsection (d) of Section
1-75 of the Illinois Power Agency Act. This Code does not apply
to the process used by the Illinois Commerce Commission to
retain an expert to assist the Commission with its duties
related to the determination of the costs of an initial clean

SB2392 - 128 - LRB098 10321 CEL 40506 b
coal facility, as defined under Section 1-10 of the Illinois
Power Agency Act, as required under Section 1-76 of the
Illinois Power Agency Act, including determining the initial
clean coal facility's operations and maintenance costs, or
compliance with capture and sequestration requirements.
(Source: P.A. 96-840, eff. 12-23-09; 96-1331, eff. 7-27-10;
97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-502, eff. 8-23-11;
97-689, eff. 6-14-12; 97-813, eff. 7-13-12; 97-895, eff.
8-3-12; revised 8-23-12.)
(30 ILCS 500/20-10)
(Text of Section from P.A. 96-159, 96-588, 97-96, and
97-895)
Sec. 20-10. Competitive sealed bidding; reverse auction.
(a) Conditions for use. All contracts shall be awarded by
competitive sealed bidding except as otherwise provided in
Section 20-5.
(b) Invitation for bids. An invitation for bids shall be
issued and shall include a purchase description and the
material contractual terms and conditions applicable to the
procurement.
(c) Public notice. Public notice of the invitation for bids
shall be published in the Illinois Procurement Bulletin at
least 14 days before the date set in the invitation for the
opening of bids.
(d) Bid opening. Bids shall be opened publicly in the

SB2392 - 129 - LRB098 10321 CEL 40506 b
presence of one or more witnesses at the time and place
designated in the invitation for bids. The name of each bidder,
the amount of each bid, and other relevant information as may
be specified by rule shall be recorded. After the award of the
contract, the winning bid and the record of each unsuccessful
bid shall be open to public inspection.
(e) Bid acceptance and bid evaluation. Bids shall be
unconditionally accepted without alteration or correction,
except as authorized in this Code. Bids shall be evaluated
based on the requirements set forth in the invitation for bids,
which may include criteria to determine acceptability such as
inspection, testing, quality, workmanship, delivery, and
suitability for a particular purpose. Those criteria that will
affect the bid price and be considered in evaluation for award,
such as discounts, transportation costs, and total or life
cycle costs, shall be objectively measurable. The invitation
for bids shall set forth the evaluation criteria to be used.
(f) Correction or withdrawal of bids. Correction or
withdrawal of inadvertently erroneous bids before or after
award, or cancellation of awards of contracts based on bid
mistakes, shall be permitted in accordance with rules. After
bid opening, no changes in bid prices or other provisions of
bids prejudicial to the interest of the State or fair
competition shall be permitted. All decisions to permit the
correction or withdrawal of bids based on bid mistakes shall be
supported by written determination made by a State purchasing

SB2392 - 130 - LRB098 10321 CEL 40506 b
officer.
(g) Award. The contract shall be awarded with reasonable
promptness by written notice to the lowest responsible and
responsive bidder whose bid meets the requirements and criteria
set forth in the invitation for bids, except when a State
purchasing officer determines it is not in the best interest of
the State and by written explanation determines another bidder
shall receive the award. The explanation shall appear in the
appropriate volume of the Illinois Procurement Bulletin. The
written explanation must include:
(1) a description of the agency's needs;
(2) a determination that the anticipated cost will be
fair and reasonable;
(3) a listing of all responsible and responsive
bidders; and
(4) the name of the bidder selected, the total contract
price, and the reasons for selecting that bidder.
Each chief procurement officer may adopt guidelines to
implement the requirements of this subsection (g).
The written explanation shall be filed with the Legislative
Audit Commission and the Procurement Policy Board, and be made
available for inspection by the public, within 30 days after
the agency's decision to award the contract.
(h) Multi-step sealed bidding. When it is considered
impracticable to initially prepare a purchase description to
support an award based on price, an invitation for bids may be

SB2392 - 131 - LRB098 10321 CEL 40506 b
issued requesting the submission of unpriced offers to be
followed by an invitation for bids limited to those bidders
whose offers have been qualified under the criteria set forth
in the first solicitation.
(i) Alternative procedures. Notwithstanding any other
provision of this Act to the contrary, the Director of the
Illinois Power Agency may create alternative bidding
procedures to be used in procuring professional services under
subsections subsection (a) and (a-5) of Section 1-75, and
subsection (d) of Section 1-78, and subsection (d) of Section
1-79 of the Illinois Power Agency Act and Section 16-111.5(c)
of the Public Utilities Act and to procure renewable energy
resources under Section 1-56 of the Illinois Power Agency Act.
These alternative procedures shall be set forth together with
the other criteria contained in the invitation for bids, and
shall appear in the appropriate volume of the Illinois
Procurement Bulletin.
(j) Reverse auction. Notwithstanding any other provision
of this Section and in accordance with rules adopted by the
chief procurement officer, that chief procurement officer may
procure supplies or services through a competitive electronic
auction bidding process after the chief procurement officer
determines that the use of such a process will be in the best
interest of the State. The chief procurement officer shall
publish that determination in his or her next volume of the
Illinois Procurement Bulletin.

SB2392 - 132 - LRB098 10321 CEL 40506 b
An invitation for bids shall be issued and shall include
(i) a procurement description, (ii) all contractual terms,
whenever practical, and (iii) conditions applicable to the
procurement, including a notice that bids will be received in
an electronic auction manner.
Public notice of the invitation for bids shall be given in
the same manner as provided in subsection (c).
Bids shall be accepted electronically at the time and in
the manner designated in the invitation for bids. During the
auction, a bidder's price shall be disclosed to other bidders.
Bidders shall have the opportunity to reduce their bid prices
during the auction. At the conclusion of the auction, the
record of the bid prices received and the name of each bidder
shall be open to public inspection.
After the auction period has terminated, withdrawal of bids
shall be permitted as provided in subsection (f).
The contract shall be awarded within 60 days after the
auction by written notice to the lowest responsible bidder, or
all bids shall be rejected except as otherwise provided in this
Code. Extensions of the date for the award may be made by
mutual written consent of the State purchasing officer and the
lowest responsible bidder.
This subsection does not apply to (i) procurements of
professional and artistic services, (ii) telecommunications
services, communication services, and information services,
and (iii) contracts for construction projects, including

SB2392 - 133 - LRB098 10321 CEL 40506 b
design professional services.
(Source: P.A. 96-159, eff. 8-10-09; 96-588, eff. 8-18-09;
97-96, eff. 7-13-11; 97-895, eff. 8-3-12.)
(Text of Section from P.A. 96-159, 96-795, 97-96, and
97-895)
Sec. 20-10. Competitive sealed bidding; reverse auction.
(a) Conditions for use. All contracts shall be awarded by
competitive sealed bidding except as otherwise provided in
Section 20-5.
(b) Invitation for bids. An invitation for bids shall be
issued and shall include a purchase description and the
material contractual terms and conditions applicable to the
procurement.
(c) Public notice. Public notice of the invitation for bids
shall be published in the Illinois Procurement Bulletin at
least 14 days before the date set in the invitation for the
opening of bids.
(d) Bid opening. Bids shall be opened publicly in the
presence of one or more witnesses at the time and place
designated in the invitation for bids. The name of each bidder,
the amount of each bid, and other relevant information as may
be specified by rule shall be recorded. After the award of the
contract, the winning bid and the record of each unsuccessful
bid shall be open to public inspection.
(e) Bid acceptance and bid evaluation. Bids shall be

SB2392 - 134 - LRB098 10321 CEL 40506 b
unconditionally accepted without alteration or correction,
except as authorized in this Code. Bids shall be evaluated
based on the requirements set forth in the invitation for bids,
which may include criteria to determine acceptability such as
inspection, testing, quality, workmanship, delivery, and
suitability for a particular purpose. Those criteria that will
affect the bid price and be considered in evaluation for award,
such as discounts, transportation costs, and total or life
cycle costs, shall be objectively measurable. The invitation
for bids shall set forth the evaluation criteria to be used.
(f) Correction or withdrawal of bids. Correction or
withdrawal of inadvertently erroneous bids before or after
award, or cancellation of awards of contracts based on bid
mistakes, shall be permitted in accordance with rules. After
bid opening, no changes in bid prices or other provisions of
bids prejudicial to the interest of the State or fair
competition shall be permitted. All decisions to permit the
correction or withdrawal of bids based on bid mistakes shall be
supported by written determination made by a State purchasing
officer.
(g) Award. The contract shall be awarded with reasonable
promptness by written notice to the lowest responsible and
responsive bidder whose bid meets the requirements and criteria
set forth in the invitation for bids, except when a State
purchasing officer determines it is not in the best interest of
the State and by written explanation determines another bidder

SB2392 - 135 - LRB098 10321 CEL 40506 b
shall receive the award. The explanation shall appear in the
appropriate volume of the Illinois Procurement Bulletin. The
written explanation must include:
(1) a description of the agency's needs;
(2) a determination that the anticipated cost will be
fair and reasonable;
(3) a listing of all responsible and responsive
bidders; and
(4) the name of the bidder selected, the total contract
price, and the reasons for selecting that bidder.
Each chief procurement officer may adopt guidelines to
implement the requirements of this subsection (g).
The written explanation shall be filed with the Legislative
Audit Commission and the Procurement Policy Board, and be made
available for inspection by the public, within 30 days after
the agency's decision to award the contract.
(h) Multi-step sealed bidding. When it is considered
impracticable to initially prepare a purchase description to
support an award based on price, an invitation for bids may be
issued requesting the submission of unpriced offers to be
followed by an invitation for bids limited to those bidders
whose offers have been qualified under the criteria set forth
in the first solicitation.
(i) Alternative procedures. Notwithstanding any other
provision of this Act to the contrary, the Director of the
Illinois Power Agency may create alternative bidding

SB2392 - 136 - LRB098 10321 CEL 40506 b
procedures to be used in procuring professional services under
subsections subsection (a) and (a-5) of Section 1-75, and
subsection (d) of Section 1-78, and subsection (d) of Section
1-79 of the Illinois Power Agency Act and Section 16-111.5(c)
of the Public Utilities Act and to procure renewable energy
resources under Section 1-56 of the Illinois Power Agency Act.
These alternative procedures shall be set forth together with
the other criteria contained in the invitation for bids, and
shall appear in the appropriate volume of the Illinois
Procurement Bulletin.
(j) Reverse auction. Notwithstanding any other provision
of this Section and in accordance with rules adopted by the
chief procurement officer, that chief procurement officer may
procure supplies or services through a competitive electronic
auction bidding process after the chief procurement officer
determines that the use of such a process will be in the best
interest of the State. The chief procurement officer shall
publish that determination in his or her next volume of the
Illinois Procurement Bulletin.
An invitation for bids shall be issued and shall include
(i) a procurement description, (ii) all contractual terms,
whenever practical, and (iii) conditions applicable to the
procurement, including a notice that bids will be received in
an electronic auction manner.
Public notice of the invitation for bids shall be given in
the same manner as provided in subsection (c).

SB2392 - 137 - LRB098 10321 CEL 40506 b
Bids shall be accepted electronically at the time and in
the manner designated in the invitation for bids. During the
auction, a bidder's price shall be disclosed to other bidders.
Bidders shall have the opportunity to reduce their bid prices
during the auction. At the conclusion of the auction, the
record of the bid prices received and the name of each bidder
shall be open to public inspection.
After the auction period has terminated, withdrawal of bids
shall be permitted as provided in subsection (f).
The contract shall be awarded within 60 days after the
auction by written notice to the lowest responsible bidder, or
all bids shall be rejected except as otherwise provided in this
Code. Extensions of the date for the award may be made by
mutual written consent of the State purchasing officer and the
lowest responsible bidder.
This subsection does not apply to (i) procurements of
professional and artistic services, (ii) telecommunications
services, communication services, and information services,
and (iii) contracts for construction projects, including
design professional services.
(Source: P.A. 96-159, eff. 8-10-09; 96-795, eff. 7-1-10 (see
Section 5 of P.A. 96-793 for the effective date of changes made
by P.A. 96-795); 97-96, eff. 7-13-11; 97-895, eff. 8-3-12.)
Section 15. The Public Utilities Act is amended by changing
Sections 16-107.5, 16-108, 16-111.5, 16-115, 16-115D, and

SB2392 - 138 - LRB098 10321 CEL 40506 b
16-116 as follows:
(220 ILCS 5/16-107.5)
Sec. 16-107.5. Net electricity metering.
(a) The Legislature finds and declares that a program to
provide net electricity metering, as defined in this Section,
for eligible customers can encourage private investment in
renewable energy resources, stimulate economic growth, enhance
the continued diversification of Illinois' energy resource
mix, and protect the Illinois environment.
(b) As used in this Section, (i) "eligible customer" means
a retail customer that owns or operates a solar, wind, or other
eligible renewable electrical generating facility with a rated
capacity of not more than 2,000 kilowatts that is located on
the customer's premises or is interconnected to the
distribution grid of the customer's electricity provider or
alternative retail electric supplierand is intended primarily
to offset the customer's own electrical requirements; (ii)
"electricity provider" means an electric utility or
alternative retail electric supplier; (iii) "eligible
renewable electrical generating facility" means a generator
powered by solar electric energy, wind, dedicated crops grown
for electricity generation, agricultural residues, untreated
and unadulterated wood waste, landscape trimmings, livestock
manure, anaerobic digestion of livestock or food processing
waste, fuel cells or microturbines powered by renewable fuels,

SB2392 - 139 - LRB098 10321 CEL 40506 b
or hydroelectric energy; and (iv) "net electricity metering"
(or "net metering") means the measurement, during the billing
period applicable to an eligible customer, of the net amount of
electricity supplied by an electricity provider to the
customer's premises or provided to the electricity provider by
the customer.
(c) A net metering facility shall be equipped with metering
equipment that can measure the flow of electricity in both
directions at the same rate.
(1) For eligible customers whose electric service has
not been declared competitive pursuant to Section 16-113 of
this Act as of July 1, 2011 and whose electric delivery
service is provided and measured on a kilowatt-hour basis
and electric supply service is not provided based on hourly
pricing, this shall typically be accomplished through use
of a single, bi-directional meter. If the eligible
customer's existing electric revenue meter does not meet
this requirement, the electricity provider shall arrange
for the local electric utility or a meter service provider
to install and maintain a new revenue meter at the
electricity provider's expense.
(2) For eligible customers whose electric service has
not been declared competitive pursuant to Section 16-113 of
this Act as of July 1, 2011 and whose electric delivery
service is provided and measured on a kilowatt demand basis
and electric supply service is not provided based on hourly

SB2392 - 140 - LRB098 10321 CEL 40506 b
pricing, this shall typically be accomplished through use
of a dual channel meter capable of measuring the flow of
electricity both into and out of the customer's facility at
the same rate and ratio. If such customer's existing
electric revenue meter does not meet this requirement, then
the electricity provider shall arrange for the local
electric utility or a meter service provider to install and
maintain a new revenue meter at the electricity provider's
expense.
(3) For all other eligible customers, the electricity
provider may arrange for the local electric utility or a
meter service provider to install and maintain metering
equipment capable of measuring the flow of electricity both
into and out of the customer's facility at the same rate
and ratio, typically through the use of a dual channel
meter. If the eligible customer's existing electric
revenue meter does not meet this requirement, then the
costs of installing such equipment shall be paid for by the
customer.
(d) An electricity provider shall measure and charge or
credit for the net electricity supplied to eligible customers
or provided by eligible customers whose electric service has
not been declared competitive pursuant to Section 16-113 of the
Act as of July 1, 2011 and whose electric delivery service is
provided and measured on a kilowatt-hour basis and electric
supply service is not provided based on hourly pricing in the

SB2392 - 141 - LRB098 10321 CEL 40506 b
following manner:
(1) If the amount of electricity used by the customer
during the billing period exceeds the amount of electricity
produced by the customer, the electricity provider shall
charge the customer for the net electricity supplied to and
used by the customer as provided in subsection (e-5) of
this Section.
(2) If the amount of electricity produced by a customer
during the billing period exceeds the amount of electricity
used by the customer during that billing period, the
electricity provider supplying that customer shall apply a
1:1 kilowatt-hour credit to a subsequent bill for service
to the customer for the net electricity supplied to the
electricity provider. The electricity provider shall
continue to carry over any excess kilowatt-hour credits
earned and apply those credits to subsequent billing
periods to offset any customer-generator consumption in
those billing periods until all credits are used or until
service is terminated the end of the annualized period.
(3) In At the end of the year or annualized over the
period that service is supplied by means of net metering,
or in the event that the retail customer terminates service
with the electricity provider prior to the end of the year
or the annualized period, any remaining credits in the
customer's account shall expire.
(d-5) An electricity provider shall measure and charge or

SB2392 - 142 - LRB098 10321 CEL 40506 b
credit for the net electricity supplied to eligible customers
or provided by eligible customers whose electric service has
not been declared competitive pursuant to Section 16-113 of
this Act as of July 1, 2011 and whose electric delivery service
is provided and measured on a kilowatt-hour basis and electric
supply service is provided based on hourly pricing in the
following manner:
(1) If the amount of electricity used by the customer
during any hourly period exceeds the amount of electricity
produced by the customer, the electricity provider shall
charge the customer for the net electricity supplied to and
used by the customer according to the terms of the contract
or tariff to which the same customer would be assigned to
or be eligible for if the customer was not a net metering
customer.
(2) If the amount of electricity produced by a customer
during any hourly period exceeds the amount of electricity
used by the customer during that hourly period, the energy
provider shall apply a credit for the net kilowatt-hours
produced in such period. The credit shall consist of an
energy credit and a delivery service credit. The energy
credit shall be valued at the same price per kilowatt-hour
as the electric service provider would charge for
kilowatt-hour energy sales during that same hourly period.
The delivery credit shall be equal to the net
kilowatt-hours produced in such hourly period times a

SB2392 - 143 - LRB098 10321 CEL 40506 b
credit that reflects all kilowatt-hour based charges in the
customer's electric service rate, excluding energy
charges.
(e) An electricity provider shall measure and charge or
credit for the net electricity supplied to eligible customers
whose electric service has not been declared competitive
pursuant to Section 16-113 of this Act as of July 1, 2011 and
whose electric delivery service is provided and measured on a
kilowatt demand basis and electric supply service is not
provided based on hourly pricing in the following manner:
(1) If the amount of electricity used by the customer
during the billing period exceeds the amount of electricity
produced by the customer, then the electricity provider
shall charge the customer for the net electricity supplied
to and used by the customer as provided in subsection (e-5)
of this Section. The customer shall remain responsible for
all taxes, fees, and utility delivery charges that would
otherwise be applicable to the net amount of electricity
used by the customer.
(2) If the amount of electricity produced by a customer
during the billing period exceeds the amount of electricity
used by the customer during that billing period, then the
electricity provider supplying that customer shall apply a
1:1 kilowatt-hour credit that reflects the kilowatt-hour
based charges in the customer's electric service rate to a
subsequent bill for service to the customer for the net

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electricity supplied to the electricity provider. The
electricity provider shall continue to carry over any
excess kilowatt-hour credits earned and apply those
credits to subsequent billing periods to offset any
customer-generator consumption in those billing periods
until all credits are used or until the end of the
annualized period.
(3) At the end of the year or annualized over the
period that service is supplied by means of net metering,
or in the event that the retail customer terminates service
with the electricity provider prior to the end of the year
or the annualized period, any remaining credits in the
customer's account shall expire.
(e-5) An electricity provider shall provide electric
service to eligible customers who utilize net metering at
non-discriminatory rates that are identical, with respect to
rate structure, retail rate components, and any monthly
charges, to the rates that the customer would be charged if not
a net metering customer. An electricity provider shall not
charge net metering customers any fee or charge or require
additional equipment, insurance, or any other requirements not
specifically authorized by interconnection standards
authorized by the Commission, unless the fee, charge, or other
requirement would apply to other similarly situated customers
who are not net metering customers. The customer will remain
responsible for all taxes, fees, and utility delivery charges

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that would otherwise be applicable to the net amount of
electricity used by the customer. Subsections (c) through (e)
of this Section shall not be construed to prevent an
arms-length agreement between an electricity provider and an
eligible customer that sets forth different prices, terms, and
conditions for the provision of net metering service,
including, but not limited to, the provision of the appropriate
metering equipment for non-residential customers.
(f) Notwithstanding the requirements of subsections (c)
through (e-5) of this Section, an electricity provider must
require dual-channel metering for customers operating eligible
renewable electrical generating facilities with a nameplate
rating up to 2,000 kilowatts and to whom the provisions of
neither subsection (d), (d-5), nor (e) of this Section apply.
In such cases, electricity charges and credits shall be
determined as follows:
(1) The electricity provider shall assess and the
customer remains responsible for all taxes, fees, and
utility delivery charges that would otherwise be
applicable to the gross amount of kilowatt-hours supplied
to the eligible customer by the electricity provider.
(2) Each month that service is supplied by means of
dual-channel metering, the electricity provider shall
compensate the eligible customer for any excess
kilowatt-hour credits at the electricity provider's
avoided cost of electricity supply over the monthly period

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or as otherwise specified by the terms of a power-purchase
agreement negotiated between the customer and electricity
provider.
(3) For all eligible net metering customers taking
service from an electricity provider under contracts or
tariffs employing time of use rates, any monthly
consumption of electricity shall be calculated according
to the terms of the contract or tariff to which the same
customer would be assigned to or be eligible for if the
customer was not a net metering customer. When those same
customer-generators are net generators during any discrete
time of use period, the net kilowatt-hours produced shall
be valued at the same price per kilowatt-hour as the
electric service provider would charge for retail
kilowatt-hour sales during that same time of use period.
(g) For purposes of federal and State laws providing
renewable energy credits or greenhouse gas credits, the
eligible customer shall be treated as owning and having title
to the renewable energy attributes, renewable energy credits,
and greenhouse gas emission credits related to any electricity
produced by the qualified generating unit. The electricity
provider may not condition participation in a net metering
program on the signing over of a customer's renewable energy
credits; provided, however, this subsection (g) shall not be
construed to prevent an arms-length agreement between an
electricity provider and an eligible customer that sets forth

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the ownership or title of the credits.
(h) Within 120 days after the effective date of this
amendatory Act of the 95th General Assembly, the Commission
shall establish standards for net metering and, if the
Commission has not already acted on its own initiative,
standards for the interconnection of eligible renewable
generating equipment to the utility system. The
interconnection standards shall address any procedural
barriers, delays, and administrative costs associated with the
interconnection of customer-generation while ensuring the
safety and reliability of the units and the electric utility
system. The Commission shall consider the Institute of
Electrical and Electronics Engineers (IEEE) Standard 1547 and
the issues of (i) reasonable and fair fees and costs, (ii)
clear timelines for major milestones in the interconnection
process, (iii) nondiscriminatory terms of agreement, and (iv)
any best practices for interconnection of distributed
generation.
(i) All electricity providers shall begin to offer net
metering no later than April 1, 2008.
(j) An electricity provider shall provide net metering to
eligible customers until the load of its net metering customers
equals 5% of the total peak demand supplied by that electricity
provider during the previous year. Electricity providers are
authorized to offer net metering beyond the 5% level if they so
choose.

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(k) Each electricity provider shall maintain records and
report annually to the Commission the total number of net
metering customers served by the provider, as well as the type,
capacity, and energy sources of the generating systems used by
the net metering customers. Nothing in this Section shall limit
the ability of an electricity provider to request the redaction
of information deemed by the Commission to be confidential
business information. Each electricity provider shall notify
the Commission when the total generating capacity of its net
metering customers is equal to or in excess of the 5% cap
specified in subsection (j) of this Section.
(l) Notwithstanding the definition of "eligible customer"
in item (i) of subsection (b) of this Section, each electricity
provider shall consider whether to allow meter aggregation for
the purposes of net metering on:
(1) properties owned or leased by multiple customers
that contribute to the operation of an eligible renewable
electrical generating facility, such as a community-owned
wind project, a community-owned biomass project, a
community-owned solar project, or a community methane
digester processing livestock waste from multiple sources;
and
(2) individual units, apartments, or properties owned
or leased by multiple customers and collectively served by
a common eligible renewable electrical generating
facility, such as an apartment building served by

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photovoltaic panels on the roof; and .
(3) multiple meters that are located on an eligible
customer's contiguous property and are used to measure only
electricity used for the eligible customer's requirements.
For the purposes of this subsection (l), "meter
aggregation" means the combination of reading and billing on a
pro rata basis for the types of eligible customers described in
this Section such as to allocate benefits of participation onto
the customers' monthly electric bills. Meter aggregation shall
be allowed whether the eligible renewable energy generating
device is located on the premises of the eligible customer or
is interconnected to the distribution grid of the eligible
customer's electricity provider or alternative retail electric
supplier. Such meter aggregation shall be subject to the terms
and conditions approved by the Commission in a proceeding
establishing the rules applicable to meter aggregation under
this subsection (l), which shall commence no less than 180 days
after the effective date of this amendatory Act of the 98th
General Assembly and be completed within 365 days after the
effective date of this amendatory Act of the 98th General
Assembly.
(m) Nothing in this Section shall affect the right of an
electricity provider to continue to provide, or the right of a
retail customer to continue to receive service pursuant to a
contract for electric service between the electricity provider
and the retail customer in accordance with the prices, terms,

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and conditions provided for in that contract. Either the
electricity provider or the customer may require compliance
with the prices, terms, and conditions of the contract.
(Source: P.A. 97-616, eff. 10-26-11; 97-646, eff. 12-30-11;
97-824, eff. 7-18-12.)
(220 ILCS 5/16-108)
Sec. 16-108. Recovery of costs associated with the
provision of delivery services.
(a) An electric utility shall file a delivery services
tariff with the Commission at least 210 days prior to the date
that it is required to begin offering such services pursuant to
this Act. An electric utility shall provide the components of
delivery services that are subject to the jurisdiction of the
Federal Energy Regulatory Commission at the same prices, terms
and conditions set forth in its applicable tariff as approved
or allowed into effect by that Commission. The Commission shall
otherwise have the authority pursuant to Article IX to review,
approve, and modify the prices, terms and conditions of those
components of delivery services not subject to the jurisdiction
of the Federal Energy Regulatory Commission, including the
authority to determine the extent to which such delivery
services should be offered on an unbundled basis. In making any
such determination the Commission shall consider, at a minimum,
the effect of additional unbundling on (i) the objective of
just and reasonable rates, (ii) electric utility employees, and

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(iii) the development of competitive markets for electric
energy services in Illinois.
(b) The Commission shall enter an order approving, or
approving as modified, the delivery services tariff no later
than 30 days prior to the date on which the electric utility
must commence offering such services. The Commission may
subsequently modify such tariff pursuant to this Act.
(c) The electric utility's tariffs shall define the classes
of its customers for purposes of delivery services charges.
Delivery services shall be priced and made available to all
retail customers electing delivery services in each such class
on a nondiscriminatory basis regardless of whether the retail
customer chooses the electric utility, an affiliate of the
electric utility, or another entity as its supplier of electric
power and energy. Charges for delivery services shall be cost
based, and shall allow the electric utility to recover the
costs of providing delivery services through its charges to its
delivery service customers that use the facilities and services
associated with such costs. Such costs shall include the costs
of owning, operating and maintaining transmission and
distribution facilities. Beginning June 1, 2014, charges for
delivery services shall also include the recovery of the
electric utility's costs of renewable energy credits and
excluded renewable energy resources contract costs in
accordance with subsection (k) of this Section. The Commission
shall also be authorized to consider whether, and if so to what

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extent, the following costs are appropriately included in the
electric utility's delivery services rates: (i) the costs of
that portion of generation facilities used for the production
and absorption of reactive power in order that retail customers
located in the electric utility's service area can receive
electric power and energy from suppliers other than the
electric utility, and (ii) the costs associated with the use
and redispatch of generation facilities to mitigate
constraints on the transmission or distribution system in order
that retail customers located in the electric utility's service
area can receive electric power and energy from suppliers other
than the electric utility. Nothing in this subsection shall be
construed as directing the Commission to allocate any of the
costs described in (i) or (ii) that are found to be
appropriately included in the electric utility's delivery
services rates to any particular customer group or geographic
area in setting delivery services rates.
(d) The Commission shall establish charges, terms and
conditions for delivery services that are just and reasonable
and shall take into account customer impacts when establishing
such charges. In establishing charges, terms and conditions for
delivery services, the Commission shall take into account
voltage level differences. A retail customer shall have the
option to request to purchase electric service at any delivery
service voltage reasonably and technically feasible from the
electric facilities serving that customer's premises provided

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that there are no significant adverse impacts upon system
reliability or system efficiency. A retail customer shall also
have the option to request to purchase electric service at any
point of delivery that is reasonably and technically feasible
provided that there are no significant adverse impacts on
system reliability or efficiency. Such requests shall not be
unreasonably denied.
(e) Electric utilities shall recover the costs of
installing, operating or maintaining facilities for the
particular benefit of one or more delivery services customers,
including without limitation any costs incurred in complying
with a customer's request to be served at a different voltage
level, directly from the retail customer or customers for whose
benefit the costs were incurred, to the extent such costs are
not recovered through the charges referred to in subsections
(c) and (d) of this Section.
(f) An electric utility shall be entitled but not required
to implement transition charges in conjunction with the
offering of delivery services pursuant to Section 16-104. If an
electric utility implements transition charges, it shall
implement such charges for all delivery services customers and
for all customers described in subsection (h), but shall not
implement transition charges for power and energy that a retail
customer takes from cogeneration or self-generation facilities
located on that retail customer's premises, if such facilities
meet the following criteria:

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(i) the cogeneration or self-generation facilities
serve a single retail customer and are located on that
retail customer's premises (for purposes of this
subparagraph and subparagraph (ii), an industrial or
manufacturing retail customer and a third party contractor
that is served by such industrial or manufacturing customer
through such retail customer's own electrical distribution
facilities under the circumstances described in subsection
(vi) of the definition of "alternative retail electric
supplier" set forth in Section 16-102, shall be considered
a single retail customer);
(ii) the cogeneration or self-generation facilities
either (A) are sized pursuant to generally accepted
engineering standards for the retail customer's electrical
load at that premises (taking into account standby or other
reliability considerations related to that retail
customer's operations at that site) or (B) if the facility
is a cogeneration facility located on the retail customer's
premises, the retail customer is the thermal host for that
facility and the facility has been designed to meet that
retail customer's thermal energy requirements resulting in
electrical output beyond that retail customer's electrical
demand at that premises, comply with the operating and
efficiency standards applicable to "qualifying facilities"
specified in title 18 Code of Federal Regulations Section
292.205 as in effect on the effective date of this

SB2392 - 155 - LRB098 10321 CEL 40506 b
amendatory Act of 1999;
(iii) the retail customer on whose premises the
facilities are located either has an exclusive right to
receive, and corresponding obligation to pay for, all of
the electrical capacity of the facility, or in the case of
a cogeneration facility that has been designed to meet the
retail customer's thermal energy requirements at that
premises, an identified amount of the electrical capacity
of the facility, over a minimum 5-year period; and
(iv) if the cogeneration facility is sized for the
retail customer's thermal load at that premises but exceeds
the electrical load, any sales of excess power or energy
are made only at wholesale, are subject to the jurisdiction
of the Federal Energy Regulatory Commission, and are not
for the purpose of circumventing the provisions of this
subsection (f).
If a generation facility located at a retail customer's
premises does not meet the above criteria, an electric utility
implementing transition charges shall implement a transition
charge until December 31, 2006 for any power and energy taken
by such retail customer from such facility as if such power and
energy had been delivered by the electric utility. Provided,
however, that an industrial retail customer that is taking
power from a generation facility that does not meet the above
criteria but that is located on such customer's premises will
not be subject to a transition charge for the power and energy

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taken by such retail customer from such generation facility if
the facility does not serve any other retail customer and
either was installed on behalf of the customer and for its own
use prior to January 1, 1997, or is both predominantly fueled
by byproducts of such customer's manufacturing process at such
premises and sells or offers an average of 300 megawatts or
more of electricity produced from such generation facility into
the wholesale market. Such charges shall be calculated as
provided in Section 16-102, and shall be collected on each
kilowatt-hour delivered under a delivery services tariff to a
retail customer from the date the customer first takes delivery
services until December 31, 2006 except as provided in
subsection (h) of this Section. Provided, however, that an
electric utility, other than an electric utility providing
service to at least 1,000,000 customers in this State on
January 1, 1999, shall be entitled to petition for entry of an
order by the Commission authorizing the electric utility to
implement transition charges for an additional period ending no
later than December 31, 2008. The electric utility shall file
its petition with supporting evidence no earlier than 16
months, and no later than 12 months, prior to December 31,
2006. The Commission shall hold a hearing on the electric
utility's petition and shall enter its order no later than 8
months after the petition is filed. The Commission shall
determine whether and to what extent the electric utility shall
be authorized to implement transition charges for an additional

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period. The Commission may authorize the electric utility to
implement transition charges for some or all of the additional
period, and shall determine the mitigation factors to be used
in implementing such transition charges; provided, that the
Commission shall not authorize mitigation factors less than
110% of those in effect during the 12 months ended December 31,
2006. In making its determination, the Commission shall
consider the following factors: the necessity to implement
transition charges for an additional period in order to
maintain the financial integrity of the electric utility; the
prudence of the electric utility's actions in reducing its
costs since the effective date of this amendatory Act of 1997;
the ability of the electric utility to provide safe, adequate
and reliable service to retail customers in its service area;
and the impact on competition of allowing the electric utility
to implement transition charges for the additional period.
(g) The electric utility shall file tariffs that establish
the transition charges to be paid by each class of customers to
the electric utility in conjunction with the provision of
delivery services. The electric utility's tariffs shall define
the classes of its customers for purposes of calculating
transition charges. The electric utility's tariffs shall
provide for the calculation of transition charges on a
customer-specific basis for any retail customer whose average
monthly maximum electrical demand on the electric utility's
system during the 6 months with the customer's highest monthly

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maximum electrical demands equals or exceeds 3.0 megawatts for
electric utilities having more than 1,000,000 customers, and
for other electric utilities for any customer that has an
average monthly maximum electrical demand on the electric
utility's system of one megawatt or more, and (A) for which
there exists data on the customer's usage during the 3 years
preceding the date that the customer became eligible to take
delivery services, or (B) for which there does not exist data
on the customer's usage during the 3 years preceding the date
that the customer became eligible to take delivery services, if
in the electric utility's reasonable judgment there exists
comparable usage information or a sufficient basis to develop
such information, and further provided that the electric
utility can require customers for which an individual
calculation is made to sign contracts that set forth the
transition charges to be paid by the customer to the electric
utility pursuant to the tariff.
(h) An electric utility shall also be entitled to file
tariffs that allow it to collect transition charges from retail
customers in the electric utility's service area that do not
take delivery services but that take electric power or energy
from an alternative retail electric supplier or from an
electric utility other than the electric utility in whose
service area the customer is located. Such charges shall be
calculated, in accordance with the definition of transition
charges in Section 16-102, for the period of time that the

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customer would be obligated to pay transition charges if it
were taking delivery services, except that no deduction for
delivery services revenues shall be made in such calculation,
and usage data from the customer's class shall be used where
historical usage data is not available for the individual
customer. The customer shall be obligated to pay such charges
on a lump sum basis on or before the date on which the customer
commences to take service from the alternative retail electric
supplier or other electric utility, provided, that the electric
utility in whose service area the customer is located shall
offer the customer the option of signing a contract pursuant to
which the customer pays such charges ratably over the period in
which the charges would otherwise have applied.
(i) An electric utility shall be entitled to add to the
bills of delivery services customers charges pursuant to
Sections 9-221, 9-222 (except as provided in Section 9-222.1),
and Section 16-114 of this Act, Section 5-5 of the Electricity
Infrastructure Maintenance Fee Law, Section 6-5 of the
Renewable Energy, Energy Efficiency, and Coal Resources
Development Law of 1997, and Section 13 of the Energy
Assistance Act.
(j) If a retail customer that obtains electric power and
energy from cogeneration or self-generation facilities
installed for its own use on or before January 1, 1997,
subsequently takes service from an alternative retail electric
supplier or an electric utility other than the electric utility

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in whose service area the customer is located for any portion
of the customer's electric power and energy requirements
formerly obtained from those facilities (including that amount
purchased from the utility in lieu of such generation and not
as standby power purchases, under a cogeneration displacement
tariff in effect as of the effective date of this amendatory
Act of 1997), the transition charges otherwise applicable
pursuant to subsections (f), (g), or (h) of this Section shall
not be applicable in any year to that portion of the customer's
electric power and energy requirements formerly obtained from
those facilities, provided, that for purposes of this
subsection (j), such portion shall not exceed the average
number of kilowatt-hours per year obtained from the
cogeneration or self-generation facilities during the 3 years
prior to the date on which the customer became eligible for
delivery services, except as provided in subsection (f) of
Section 16-110.
(k) Beginning June 1, 2014, the electric utility shall be
entitled to recover through its tariffed charges for delivery
services (1) the costs of any renewable energy credits
purchased to meet the renewable energy resource standards of
subsection (c) of Section 1-75 of the Illinois Power Agency
Act, pursuant to the electric utility's procurement plan as
approved in accordance with Section 16-111.5 of this Act, and
(2) any excluded renewable energy resources contract costs as
defined in Section 1-10 of the Illinois Power Agency Act. The

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Commission shall determine a just and reasonable allocation of
such costs to the various classes of customers taking delivery
services from the electric utility, taking into account the
provisions of paragraphs (2) and (6) of subsection (c) of
Section 1-75 of the Illinois Power Agency Act and, with respect
to excluded renewable energy resources contract costs, the
extent to which the electric utility's eligible retail
customers have become delivery services non-eligible retail
customers subsequent to the year that the contracts giving rise
to the excluded renewable energy resources costs were entered
into. Provided, that in no event shall the Commission allocate
the costs of renewable energy credits and excluded renewable
energy resources contract costs in a manner that causes the
rate limitations specified in paragraph (2) of subsection (c)
of Section 1-75 of the Illinois Power Agency Act to be exceeded
for any class of customers.
For purposes of recovery through the electric utility's
tariffed charges for delivery services, the cost of the
renewable energy credits included in purchases of bundled
renewable energy resources, as defined in Section 1-10 of the
Illinois Power Agency Act, to meet the renewable energy
resource standards applicable to the load of the electric
utility's eligible retail customers, as defined in subsection
(a) of Section 16-111.5 of this Act, shall be the allocated
renewable energy credit prices approved by the Commission in
accordance with subsection (f) of Section 16-111.5 of this Act.

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The electric utility shall be entitled to recover the cost
of such renewable energy credits and excluded renewable energy
resources contract costs through an automatic adjustment
charge provision in the electric utility's delivery services
tariffs that allows the electric utility to adjust its tariffed
charges on a quarterly basis for changes in its costs incurred
to purchase renewable energy credits and its excluded renewable
energy resources contract costs, if any, without the need to
file a general delivery services rate case. The electric
utility's collections pursuant to such an automatic adjustment
charge tariff shall be subject to annual review,
reconciliation, and true-up against actual costs by the
Commission pursuant to a procedure that shall be specified in
the electric utility's tariff and approved by the Commission in
connection with its approval of the tariff. The procedure shall
provide that any difference between the electric utility's
collections pursuant to the automatic adjustment charge for an
annual period and the electric utility's actual costs of
renewable energy credits and actual excluded renewable energy
resources contract costs for the annual period shall be
refunded to or collected from, as applicable, the electric
utility's delivery services customers in subsequent periods.
(Source: P.A. 91-50, eff. 6-30-99; 92-690, eff. 7-18-02.)
(220 ILCS 5/16-111.5)
Sec. 16-111.5. Provisions relating to procurement.

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(a) An electric utility that on December 31, 2005 served at
least 100,000 customers in Illinois shall procure power, energy
efficiency products, and energy for its eligible retail
customers in accordance with the applicable provisions set
forth in Section 1-75 of the Illinois Power Agency Act and this
Section and, for years beginning on and after June 1, 2012,
shall procure renewable energy credits with respect to the
kilowatthour usage of delivery services non-eligible retail
customers in the electric utility's service area in accordance
with the applicable provisions set forth in Section 1-75 of the
Illinois Power Agency Act and this Section. A small
multi-jurisdictional electric utility that on December 31,
2005 served less than 100,000 customers in Illinois may elect
to procure power and energy for all or a portion of its
eligible Illinois retail customers in accordance with the
applicable provisions set forth in this Section and Section
1-75 of the Illinois Power Agency Act. This Section shall not
apply to a small multi-jurisdictional utility until such time
as a small multi-jurisdictional utility requests the Illinois
Power Agency to prepare a procurement plan for its eligible
retail customers. "Eligible retail customers" for the purposes
of this Section means those retail customers that purchase
power and energy from the electric utility under fixed-price
bundled service tariffs, other than those retail customers
whose service is declared or deemed competitive under Section
16-113 and those other customer groups specified in this

SB2392 - 164 - LRB098 10321 CEL 40506 b
Section, including self-generating customers, customers
electing hourly pricing, or those customers who are otherwise
ineligible for fixed-price bundled tariff service. "Delivery
services non-eligible retail customers" for the purposes of
this Section has the meaning set forth in Section 1-10 of the
Illinois Power Agency Act. Those customers that are excluded
from the definition of "eligible retail customers" shall not be
included in the procurement plan electric supply service load
requirements, and the utility shall procure any supply
requirements, including capacity, ancillary services, energy
efficiency products, and hourly priced energy, in the
applicable markets as needed to serve those customers, provided
that the utility may include in its procurement plan load
requirements for the load that is associated with those retail
customers whose service has been declared or deemed competitive
pursuant to Section 16-113 of this Act to the extent that those
customers are purchasing power and energy during one of the
transition periods identified in subsection (b) of Section
16-113 of this Act.
(b) A procurement plan shall be prepared for each electric
utility consistent with the applicable requirements of the
Illinois Power Agency Act and this Section. For purposes of
this Section, Illinois electric utilities that are affiliated
by virtue of a common parent company are considered to be a
single electric utility. Small multi-jurisdictional utilities
may request a procurement plan for a portion of or all of its

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Illinois load. Each procurement plan shall analyze the
projected balance of supply and demand for eligible retail
customers over a 5-year period with the first planning year
beginning on June 1 of the year following the year in which the
plan is filed. The plan shall specifically identify the
wholesale products to be procured following plan approval, and
shall follow all the requirements set forth in the Public
Utilities Act and all applicable State and federal laws,
statutes, rules, or regulations, as well as Commission orders.
Nothing in this Section precludes consideration of contracts
longer than 5 years and related forecast data. Unless specified
otherwise in this Section, in the procurement plan or in the
implementing tariff, any procurement occurring in accordance
with this plan shall be competitively bid through a request for
proposals process. Approval and implementation of the
procurement plan shall be subject to review and approval by the
Commission according to the provisions set forth in this
Section. A procurement plan shall include each of the following
components:
(1) Hourly load analysis. This analysis shall include:
(i) multi-year historical analysis of hourly
loads;
(ii) switching trends and competitive retail
market analysis;
(iii) known or projected changes to future loads;
and

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(iv) growth forecasts by customer class.
(2) Analysis of the impact of any demand side and
renewable energy initiatives. This analysis shall include:
(i) the impact of demand response programs and
energy efficiency programs, both current and
projected; for small multi-jurisdictional utilities,
the impact of demand response and energy efficiency
programs approved pursuant to Section 8-408 of this
Act, both current and projected; and
(ii) supply side needs that are projected to be
offset by purchases of renewable energy resources, if
any.
(3) A plan for meeting the expected load requirements
that will not be met through preexisting contracts. This
plan shall include:
(i) definitions of the different Illinois retail
customer classes for which supply is being purchased;
(ii) the proposed mix of demand-response products
for which contracts will be executed during the next
year. For small multi-jurisdictional electric
utilities that on December 31, 2005 served fewer than
100,000 customers in Illinois, these shall be defined
as demand-response products offered in an energy
efficiency plan approved pursuant to Section 8-408 of
this Act. The cost-effective demand-response measures
shall be procured whenever the cost is lower than

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procuring comparable capacity products, provided that
such products shall:
(A) be procured by a demand-response provider
from eligible retail customers;
(B) at least satisfy the demand-response
requirements of the regional transmission
organization market in which the utility's service
territory is located, including, but not limited
to, any applicable capacity or dispatch
requirements;
(C) provide for customers' participation in
the stream of benefits produced by the
demand-response products;
(D) provide for reimbursement by the
demand-response provider of the utility for any
costs incurred as a result of the failure of the
supplier of such products to perform its
obligations thereunder; and
(E) meet the same credit requirements as apply
to suppliers of capacity, in the applicable
regional transmission organization market;
(iii) the proposed energy efficiency products for
which contracts will be executed during the next year.
The cost-effective energy efficiency measures shall be
procured whenever the cost is lower than the combined
avoided costs of energy, capacity, transmission, and

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the renewable portfolio standard for a comparable
volume of energy provided that the energy efficiency
products shall:
(A) be procured by an energy efficiency
provider from eligible retail customers;
(B) at least satisfy evaluation, measurement,
and verification standards established pursuant to
Section 8-103 of this Act;
(C) provide for reimbursement by the energy
efficiency provider of the utility for any costs
incurred as a result of the failure of the supplier
of such products to perform its obligations
thereunder; and
(D) meet the same credit requirements as apply
to suppliers of capacity, in the applicable
regional transmission organization market;
(iv) (iii) monthly forecasted system supply
requirements, including expected minimum, maximum, and
average values for the planning period;
(v) (iv) the proposed mix and selection of standard
wholesale products for which contracts will be
executed during the next year, separately or in
combination, to meet that portion of its load
requirements not met through pre-existing contracts,
including but not limited to monthly 5 x 16 peak period
block energy, monthly off-peak wrap energy, monthly 7 x

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24 energy, annual 5 x 16 energy, annual off-peak wrap
energy, annual 7 x 24 energy, monthly capacity, annual
capacity, peak load capacity obligations, capacity
purchase plan, and ancillary services;
(vi) (v) proposed term structures for each
wholesale product type included in the proposed
procurement plan portfolio of products; and
(vii) (vi) an assessment of the price risk, load
uncertainty, and other factors that are associated
with the proposed procurement plan; this assessment,
to the extent possible, shall include an analysis of
the following factors: contract terms, time frames for
securing products or services, fuel costs, weather
patterns, transmission costs, market conditions, and
the governmental regulatory environment; the proposed
procurement plan shall also identify alternatives for
those portfolio measures that are identified as having
significant price risk.
(4) Proposed procedures for balancing loads. The
procurement plan shall include, for load requirements
included in the procurement plan, the process for (i)
hourly balancing of supply and demand and (ii) the criteria
for portfolio re-balancing in the event of significant
shifts in load.
(c) The procurement process set forth in Section 1-75 of
the Illinois Power Agency Act and subsection (e) of this

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Section shall be administered by a procurement administrator
and monitored by a procurement monitor.
(1) The procurement administrator shall:
(i) design the final procurement process in
accordance with Section 1-75 of the Illinois Power
Agency Act and subsection (e) of this Section following
Commission approval of the procurement plan;
(ii) develop benchmarks in accordance with
subsection (e)(3) to be used to evaluate bids; these
benchmarks shall be submitted to the Commission for
review and approval on a confidential basis prior to
the procurement event;
(iii) serve as the interface between the electric
utility and suppliers;
(iv) manage the bidder pre-qualification and
registration process;
(v) obtain the electric utilities' agreement to
the final form of all supply contracts and credit
collateral agreements;
(vi) administer the request for proposals process;
(vii) have the discretion to negotiate to
determine whether bidders are willing to lower the
price of bids that meet the benchmarks approved by the
Commission; any post-bid negotiations with bidders
shall be limited to price only and shall be completed
within 24 hours after opening the sealed bids and shall

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be conducted in a fair and unbiased manner; in
conducting the negotiations, there shall be no
disclosure of any information derived from proposals
submitted by competing bidders; if information is
disclosed to any bidder, it shall be provided to all
competing bidders;
(viii) maintain confidentiality of supplier and
bidding information in a manner consistent with all
applicable laws, rules, regulations, and tariffs;
(ix) submit a confidential report to the
Commission recommending acceptance or rejection of
bids;
(x) notify the utility of contract counterparties
and contract specifics; and
(xi) administer related contingency procurement
events.
(2) The procurement monitor, who shall be retained by
the Commission, shall:
(i) monitor interactions among the procurement
administrator, suppliers, and utility;
(ii) monitor and report to the Commission on the
progress of the procurement process;
(iii) provide an independent confidential report
to the Commission regarding the results of the
procurement event;
(iv) assess compliance with the procurement plans

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approved by the Commission for each utility that on
December 31, 2005 provided electric service to a least
100,000 customers in Illinois and for each small
multi-jurisdictional utility that on December 31, 2005
served less than 100,000 customers in Illinois;
(v) preserve the confidentiality of supplier and
bidding information in a manner consistent with all
applicable laws, rules, regulations, and tariffs;
(vi) provide expert advice to the Commission and
consult with the procurement administrator regarding
issues related to procurement process design, rules,
protocols, and policy-related matters; and
(vii) consult with the procurement administrator
regarding the development and use of benchmark
criteria, standard form contracts, credit policies,
and bid documents.
(d) Except as provided in subsection (j), the planning
process shall be conducted as follows:
(1) Beginning in 2008, each Illinois utility procuring
power pursuant to this Section shall annually provide a
range of load forecasts to the Illinois Power Agency by
July 15 of each year, or such other date as may be required
by the Commission or Agency. The load forecasts shall cover
the 5-year procurement planning period for the next
procurement plan and shall include hourly data
representing a high-load, low-load and expected-load

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scenario for the load of the eligible retail customers. For
procurement planning periods beginning on and after June 1,
2014, the electric utility shall provide a range of annual
forecasts for the 5-year procurement planning period of the
total kilowatthour usage of eligible retail customers and
the total annual kilowatthour usage of delivery services
non-eligible retail customers in its service area.The
utility shall provide supporting data and assumptions for
each of the scenarios.
(2) Beginning in 2008, the Illinois Power Agency shall
prepare a procurement plan by August 15th of each year, or
such other date as may be required by the Commission. The
procurement plan shall identify the portfolio of
demand-response, energy efficiency products, and power and
energy products to be procured. Cost-effective
demand-response measures and cost-effective energy
measures shall be procured as set forth in items item (iii)
and (iv) of subsection (b) of this Section. Copies of the
procurement plan shall be posted and made publicly
available on the Agency's and Commission's websites, and
copies shall also be provided to each affected electric
utility. An affected utility shall have 30 days following
the date of posting to provide comment to the Agency on the
procurement plan. Other interested entities also may
comment on the procurement plan. All comments submitted to
the Agency shall be specific, supported by data or other

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detailed analyses, and, if objecting to all or a portion of
the procurement plan, accompanied by specific alternative
wording or proposals. All comments shall be posted on the
Agency's and Commission's websites. During this 30-day
comment period, the Agency shall hold at least one public
hearing within each utility's service area for the purpose
of receiving public comment on the procurement plan. Within
14 days following the end of the 30-day review period, the
Agency shall revise the procurement plan as necessary based
on the comments received and file the procurement plan with
the Commission and post the procurement plan on the
websites.
(3) Within 5 days after the filing of the procurement
plan, any person objecting to the procurement plan shall
file an objection with the Commission. Within 10 days after
the filing, the Commission shall determine whether a
hearing is necessary. The Commission shall enter its order
confirming or modifying the procurement plan within 90 days
after the filing of the procurement plan by the Illinois
Power Agency.
(4) The Commission shall approve the procurement plan,
including expressly the forecast used in the procurement
plan, if the Commission determines that it will ensure
adequate, reliable, affordable, efficient, and
environmentally sustainable electric service at the lowest
total cost over time, taking into account any benefits of

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price stability.
(e) The procurement process shall include each of the
following components:
(1) Solicitation, pre-qualification, and registration
of bidders. The procurement administrator shall
disseminate information to potential bidders to promote a
procurement event, notify potential bidders that the
procurement administrator may enter into a post-bid price
negotiation with bidders that meet the applicable
benchmarks, provide supply requirements, and otherwise
explain the competitive procurement process. In addition
to such other publication as the procurement administrator
determines is appropriate, this information shall be
posted on the Illinois Power Agency's and the Commission's
websites. The procurement administrator shall also
administer the prequalification process, including
evaluation of credit worthiness, compliance with
procurement rules, and agreement to the standard form
contract developed pursuant to paragraph (2) of this
subsection (e). The procurement administrator shall then
identify and register bidders to participate in the
procurement event.
(2) Standard contract forms and credit terms and
instruments. The procurement administrator, in
consultation with the utilities, the Commission, and other
interested parties and subject to Commission oversight,

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shall develop and provide standard contract forms for the
supplier contracts that meet generally accepted industry
practices. Standard credit terms and instruments that meet
generally accepted industry practices shall be similarly
developed. The procurement administrator shall make
available to the Commission all written comments it
receives on the contract forms, credit terms, or
instruments. If the procurement administrator cannot reach
agreement with the applicable electric utility as to the
contract terms and conditions, the procurement
administrator must notify the Commission of any disputed
terms and the Commission shall resolve the dispute. The
terms of the contracts shall not be subject to negotiation
by winning bidders, and the bidders must agree to the terms
of the contract in advance so that winning bids are
selected solely on the basis of price.
(3) Establishment of a market-based price benchmark.
As part of the development of the procurement process, the
procurement administrator, in consultation with the
Commission staff, Agency staff, and the procurement
monitor, shall establish benchmarks for evaluating the
final prices in the contracts for each of the products that
will be procured through the procurement process. The
benchmarks shall be based on price data for similar
products for the same delivery period and same delivery
hub, or other delivery hubs after adjusting for that

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difference. The price benchmarks may also be adjusted to
take into account differences between the information
reflected in the underlying data sources and the specific
products and procurement process being used to procure
power for the Illinois utilities. The benchmarks shall be
confidential but shall be provided to, and will be subject
to Commission review and approval, prior to a procurement
event.
(4) Request for proposals competitive procurement
process. The procurement administrator shall design and
issue a request for proposals to supply electricity in
accordance with each utility's procurement plan, as
approved by the Commission. The request for proposals shall
set forth a procedure for sealed, binding commitment
bidding with pay-as-bid settlement, and provision for
selection of bids on the basis of price.
(5) A plan for implementing contingencies in the event
of supplier default or failure of the procurement process
to fully meet the expected load requirement due to
insufficient supplier participation, Commission rejection
of results, or any other cause.
(i) Event of supplier default: In the event of
supplier default, the utility shall review the
contract of the defaulting supplier to determine if the
amount of supply is 200 megawatts or greater, and if
there are more than 60 days remaining of the contract

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term. If both of these conditions are met, and the
default results in termination of the contract, then
the utility shall immediately notify the Illinois
Power Agency that a request for proposals must be
issued to procure replacement power or energy
efficiency products, and the procurement administrator
shall run an additional procurement event. If the
contracted supply of the defaulting supplier is less
than 200 megawatts or there are less than 60 days
remaining of the contract term, the utility shall
procure energy efficiency products or power and energy
from the applicable regional transmission organization
market, including ancillary services, capacity, energy
efficiency products, and day-ahead or real time
energy, or both, for the duration of the contract term
to replace the contracted supply; provided, however,
that if a needed product is not available through the
regional transmission organization market it shall be
purchased from the wholesale market.
(ii) Failure of the procurement process to fully
meet the expected load requirement: If the procurement
process fails to fully meet the expected load
requirement due to insufficient supplier participation
or due to a Commission rejection of the procurement
results, the procurement administrator, the
procurement monitor, and the Commission staff shall

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meet within 10 days to analyze potential causes of low
supplier interest or causes for the Commission
decision. If changes are identified that would likely
result in increased supplier participation, or that
would address concerns causing the Commission to
reject the results of the prior procurement event, the
procurement administrator may implement those changes
and rerun the request for proposals process according
to a schedule determined by those parties and
consistent with Section 1-75 of the Illinois Power
Agency Act and this subsection. In any event, a new
request for proposals process shall be implemented by
the procurement administrator within 90 days after the
determination that the procurement process has failed
to fully meet the expected load requirement.
(iii) In all cases where there is insufficient
supply provided under contracts awarded through the
procurement process to fully meet the electric
utility's load requirement, the utility shall meet the
load requirement by procuring power and energy from the
applicable regional transmission organization market,
including ancillary services, capacity, and day-ahead
or real time energy or both; provided, however, that if
a needed product is not available through the regional
transmission organization market it shall be purchased
from the wholesale market.

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(6) The procurement process described in this
subsection is exempt from the requirements of the Illinois
Procurement Code, pursuant to Section 20-10 of that Code.
(f) Within 2 business days after opening the sealed bids,
the procurement administrator shall submit a confidential
report to the Commission. The report shall contain the results
of the bidding for each of the products along with the
procurement administrator's recommendation for the acceptance
and rejection of bids based on the price benchmark criteria and
other factors observed in the process. For procurements
applicable to periods beginning on and after June 1, 2014, the
report shall also include, with respect to each recommended
purchase of bundled renewable energy resources as defined in
Section 1-10 of the Illinois Power Agency Act, an allocation of
the price between the price of the electricity generated by
renewable energy resources and the price of the associated
renewable energy credits. The procurement monitor also shall
submit a confidential report to the Commission within 2
business days after opening the sealed bids. The report shall
contain the procurement monitor's assessment of bidder
behavior in the process as well as an assessment of the
procurement administrator's compliance with the procurement
process and rules. The Commission shall review the confidential
reports submitted by the procurement administrator and
procurement monitor, and shall accept or reject the
recommendations of the procurement administrator, including

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the recommended allocation of the price of each purchase of
bundled renewable energy resources between the price of the
electricity and the price of the associated renewable energy
credits, within 2 business days after receipt of the reports.
(g) Within 3 business days after the Commission decision
approving the results of a procurement event, the utility shall
enter into binding contractual arrangements with the winning
suppliers using the standard form contracts; except that the
utility shall not be required either directly or indirectly to
execute the contracts if a tariff that is consistent with
subsection (l) of this Section has not been approved and placed
into effect for that utility.
(h) The names of the successful bidders and the load
weighted average of the winning bid prices for each contract
type and for each contract term shall be made available to the
public at the time of Commission approval of a procurement
event. The Commission, the procurement monitor, the
procurement administrator, the Illinois Power Agency, and all
participants in the procurement process shall maintain the
confidentiality of all other supplier and bidding information
in a manner consistent with all applicable laws, rules,
regulations, and tariffs. Confidential information, including
the confidential reports submitted by the procurement
administrator and procurement monitor pursuant to subsection
(f) of this Section, shall not be made publicly available and
shall not be discoverable by any party in any proceeding,

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absent a compelling demonstration of need, nor shall those
reports be admissible in any proceeding other than one for law
enforcement purposes.
(i) Within 2 business days after a Commission decision
approving the results of a procurement event or such other date
as may be required by the Commission from time to time, the
utility shall file for informational purposes with the
Commission its actual or estimated retail supply charges, as
applicable, by customer supply group reflecting the costs
associated with the procurement and computed in accordance with
the tariffs filed pursuant to subsection (l) of this Section
and approved by the Commission.
(j) Within 60 days following the effective date of this
amendatory Act, each electric utility that on December 31, 2005
provided electric service to at least 100,000 customers in
Illinois shall prepare and file with the Commission an initial
procurement plan, which shall conform in all material respects
to the requirements of the procurement plan set forth in
subsection (b); provided, however, that the Illinois Power
Agency Act shall not apply to the initial procurement plan
prepared pursuant to this subsection. The initial procurement
plan shall identify the portfolio of power and energy products
to be procured and delivered for the period June 2008 through
May 2009, and shall identify the proposed procurement
administrator, who shall have the same experience and expertise
as is required of a procurement administrator hired pursuant to

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Section 1-75 of the Illinois Power Agency Act. Copies of the
procurement plan shall be posted and made publicly available on
the Commission's website. The initial procurement plan may
include contracts for renewable resources that extend beyond
May 2009.
(i) Within 14 days following filing of the initial
procurement plan, any person may file a detailed objection
with the Commission contesting the procurement plan
submitted by the electric utility. All objections to the
electric utility's plan shall be specific, supported by
data or other detailed analyses. The electric utility may
file a response to any objections to its procurement plan
within 7 days after the date objections are due to be
filed. Within 7 days after the date the utility's response
is due, the Commission shall determine whether a hearing is
necessary. If it determines that a hearing is necessary, it
shall require the hearing to be completed and issue an
order on the procurement plan within 60 days after the
filing of the procurement plan by the electric utility.
(ii) The order shall approve or modify the procurement
plan, approve an independent procurement administrator,
and approve or modify the electric utility's tariffs that
are proposed with the initial procurement plan. The
Commission shall approve the procurement plan if the
Commission determines that it will ensure adequate,
reliable, affordable, efficient, and environmentally

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sustainable electric service at the lowest total cost over
time, taking into account any benefits of price stability.
(k) In order to promote price stability for residential and
small commercial customers during the transition to
competition in Illinois, and notwithstanding any other
provision of this Act, each electric utility subject to this
Section shall enter into one or more multi-year financial swap
contracts that become effective on the effective date of this
amendatory Act. These contracts may be executed with generators
and power marketers, including affiliated interests of the
electric utility. These contracts shall be for a term of no
more than 5 years and shall, for each respective utility or for
any Illinois electric utilities that are affiliated by virtue
of a common parent company and that are thereby considered a
single electric utility for purposes of this subsection (k),
not exceed in the aggregate 3,000 megawatts for any hour of the
year. The contracts shall be financial contracts and not energy
sales contracts. The contracts shall be executed as
transactions under a negotiated master agreement based on the
form of master agreement for financial swap contracts sponsored
by the International Swaps and Derivatives Association, Inc.
and shall be considered pre-existing contracts in the
utilities' procurement plans for residential and small
commercial customers. Costs incurred pursuant to a contract
authorized by this subsection (k) shall be deemed prudently
incurred and reasonable in amount and the electric utility

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shall be entitled to full cost recovery pursuant to the tariffs
filed with the Commission.
(k-5) In order to promote price stability for residential
and small commercial customers during the infrastructure
investment program described in subsection (b) of Section
16-108.5 of this Act, and notwithstanding any other provision
of this Act or the Illinois Power Agency Act, for each electric
utility that serves more than one million retail customers in
Illinois, the Illinois Power Agency shall conduct a procurement
event within 120 days after October 26, 2011 (the effective
date of Public Act 97-616) and may procure contracts for energy
and renewable energy credits for the period June 1, 2013
through December 31, 2017 that satisfy the requirements of this
subsection (k-5), including the benchmarks described in this
subsection. These contracts shall be entered into as the result
of a competitive procurement event, and, to the extent that any
provisions of this Section or the Illinois Power Agency Act do
not conflict with this subsection (k-5), such provisions shall
apply to the procurement event. The energy contracts shall be
for 24 hour by 7 day supply over a term that runs from the first
delivery year through December 31, 2017. For a utility that
serves over 2 million customers, the energy contracts shall be
multi-year with pricing escalating at 2.5% per annum. The
energy contracts may be designed as financial swaps or may
require physical delivery.
Within 30 days of October 26, 2011 (the effective date of

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Public Act 97-616), each such utility shall submit to the
Agency updated load forecasts for the period June 1, 2013
through December 31, 2017. The megawatt volume of the contracts
shall be based on the updated load forecasts of the minimum
monthly on-peak or off-peak average load requirements shown in
the forecasts, taking into account any existing energy
contracts in effect as well as the expected migration of the
utility's customers to alternative retail electric suppliers.
The renewable energy credit volume shall be based on the number
of credits that would satisfy the requirements of subsection
(c) of Section 1-75 of the Illinois Power Agency Act, subject
to the rate impact caps and other provisions of subsection (c)
of Section 1-75 of the Illinois Power Agency Act. The
evaluation of contract bids in the competitive procurement
events for energy and for renewable energy credits shall
incorporate price benchmarks set collaboratively by the
Agency, the procurement administrator, the staff of the
Commission, and the procurement monitor. If the contracts are
swap contracts, then they shall be executed as transactions
under a negotiated master agreement based on the form of master
agreement for financial swap contracts sponsored by the
International Swaps and Derivatives Association, Inc. Costs
incurred pursuant to a contract authorized by this subsection
(k-5) 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.

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The cost of administering the procurement event described
in this subsection (k-5) shall be paid by the winning supplier
or suppliers to the procurement administrator through a
supplier fee. In the event that there is no winning supplier
for a particular utility, such utility will pay the procurement
administrator for the costs associated with the procurement
event, and those costs shall not be a recoverable expense.
Nothing in this subsection (k-5) is intended to alter the
recovery of costs for any other procurement event.
(l) An electric utility shall recover its costs incurred
under this Section, including, but not limited to, the costs of
procuring power, energy efficiency products, and energy
demand-response resources under this Section. The utility
shall file with the initial procurement plan its proposed
tariffs through which its costs of procuring power that are
incurred pursuant to a Commission-approved procurement plan
and those other costs identified in this subsection (l), will
be recovered. The tariffs shall include a formula rate or
charge designed to pass through both the costs incurred by the
utility in procuring a supply of electric power and energy for
the applicable customer classes with no mark-up or return on
the price paid by the utility for that supply, plus any just
and reasonable costs that the utility incurs in arranging and
providing for the supply of electric power and energy. The
formula rate or charge shall also contain provisions that
ensure that its application does not result in over or under

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recovery due to changes in customer usage and demand patterns,
and that provide for the correction, on at least an annual
basis, of any accounting errors that may occur. A utility shall
recover through the tariff all reasonable costs incurred to
implement or comply with any procurement plan that is developed
and put into effect pursuant to Section 1-75 of the Illinois
Power Agency Act and this Section, including any fees assessed
by the Illinois Power Agency, costs associated with load
balancing, and contingency plan costs. The electric utility
shall also recover its full costs of procuring electric supply
for which it contracted before the effective date of this
Section in conjunction with the provision of full requirements
service under fixed-price bundled service tariffs subsequent
to December 31, 2006. All such costs shall be deemed to have
been prudently incurred. The pass-through tariffs that are
filed and approved pursuant to this Section shall not be
subject to review under, or in any way limited by, Section
16-111(i) of this Act. Beginning June 1, 2014, the costs
incurred by the electric utility to purchase renewable energy
credits in accordance with subsection (c) of Section 1-75 of
the Illinois Power Agency Act, and any excluded renewable
energy resources contract costs as defined in Section 1-10 of
the Illinois Power Agency Act, shall be recovered through the
electric utility's tariffed charges for delivery services
pursuant to Section 16-108 of this Act and shall not be
recovered through the electric utility's tariffed charges for

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electric power and energy supply to its eligible retail
customers.
(m) The Commission has the authority to adopt rules to
carry out the provisions of this Section. For the public
interest, safety, and welfare, the Commission also has
authority to adopt rules to carry out the provisions of this
Section on an emergency basis immediately following the
effective date of this amendatory Act.
(n) Notwithstanding any other provision of this Act, any
affiliated electric utilities that submit a single procurement
plan covering their combined needs may procure for those
combined needs in conjunction with that plan, and may enter
jointly into power supply contracts, purchases, and other
procurement arrangements, and allocate capacity, energy
efficiency products, and energy and cost responsibility
therefor among themselves in proportion to their requirements.
(o) On or before June 1 of each year, the Commission shall
hold an informal hearing for the purpose of receiving comments
on the prior year's procurement process and any recommendations
for change.
(p) An electric utility subject to this Section may propose
to invest, lease, own, or operate an electric generation
facility as part of its procurement plan, provided the utility
demonstrates that such facility is the least-cost option to
provide electric service to eligible retail customers. If the
facility is shown to be the least-cost option and is included

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in a procurement plan prepared in accordance with Section 1-75
of the Illinois Power Agency Act and this Section, then the
electric utility shall make a filing pursuant to Section 8-406
of this Act, and may request of the Commission any statutory
relief required thereunder. If the Commission grants all of the
necessary approvals for the proposed facility, such supply
shall thereafter be considered as a pre-existing contract under
subsection (b) of this Section. The Commission shall in any
order approving a proposal under this subsection specify how
the utility will recover the prudently incurred costs of
investing in, leasing, owning, or operating such generation
facility through just and reasonable rates charged to eligible
retail customers. Cost recovery for facilities included in the
utility's procurement plan pursuant to this subsection shall
not be subject to review under or in any way limited by the
provisions of Section 16-111(i) of this Act. Nothing in this
Section is intended to prohibit a utility from filing for a
fuel adjustment clause as is otherwise permitted under Section
9-220 of this Act.
(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;
97-813, eff. 7-13-12.)
(220 ILCS 5/16-115)
Sec. 16-115. Certification of alternative retail electric
suppliers.
(a) Any alternative retail electric supplier must obtain a

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certificate of service authority from the Commission in
accordance with this Section before serving any retail customer
or other user located in this State. An alternative retail
electric supplier may request, and the Commission may grant, a
certificate of service authority for the entire State or for a
specified geographic area of the State.
(b) An alternative retail electric supplier seeking a
certificate of service authority shall file with the Commission
a verified application containing information showing that the
applicant meets the requirements of this Section. The
alternative retail electric supplier shall publish notice of
its application in the official State newspaper within 10 days
following the date of its filing. No later than 45 days after
the application is properly filed with the Commission, and such
notice is published, the Commission shall issue its order
granting or denying the application.
(c) An application for a certificate of service authority
shall identify the area or areas in which the applicant intends
to offer service and the types of services it intends to offer.
Applicants that seek to serve residential or small commercial
retail customers within a geographic area that is smaller than
an electric utility's service area shall submit evidence
demonstrating that the designation of this smaller area does
not violate Section 16-115A. An applicant that seeks to serve
residential or small commercial retail customers may state in
its application for certification any limitations that will be

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imposed on the number of customers or maximum load to be
served.
(d) The Commission shall grant the application for a
certificate of service authority if it makes the findings set
forth in this subsection based on the verified application and
such other information as the applicant may submit:
(1) That the applicant possesses sufficient technical,
financial and managerial resources and abilities to
provide the service for which it seeks a certificate of
service authority. In determining the level of technical,
financial and managerial resources and abilities which the
applicant must demonstrate, the Commission shall consider
(i) the characteristics, including the size and financial
sophistication, of the customers that the applicant seeks
to serve, and (ii) whether the applicant seeks to provide
electric power and energy using property, plant and
equipment which it owns, controls or operates;
(2) That the applicant will comply with all applicable
federal, State, regional and industry rules, policies,
practices and procedures for the use, operation, and
maintenance of the safety, integrity and reliability, of
the interconnected electric transmission system;
(3) That the applicant will only provide service to
retail customers in an electric utility's service area that
are eligible to take delivery services under this Act;
(4) That the applicant will comply with such

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informational or reporting requirements as the Commission
may by rule establish and provide the information required
by Section 16-112. Any data related to contracts for the
purchase and sale of electric power and energy shall be
made available for review by the Staff of the Commission on
a confidential and proprietary basis and only to the extent
and for the purposes which the Commission determines are
reasonably necessary in order to carry out the purposes of
this Act;
(5) That the applicant will procure renewable energy
resources in accordance with Section 16-115D of this Act,
and will source electricity from clean coal facilities, as
defined in Section 1-10 of the Illinois Power Agency Act,
in amounts at least equal to the amounts percentages set
forth in subsections (c) and (d) of Section 1-75 of the
Illinois Power Agency Act. For purposes of this Section:
(i) (blank) (Blank);
(ii) (blank) (Blank);
(iii) (blank); the required sourcing of
electricity generated by clean coal facilities, other
than the initial clean coal facility, shall be limited
to the amount of electricity that can be procured or
sourced at a price at or below the benchmarks approved
by the Commission each year in accordance with item (1)
of subsection (c) and items (1) and (5) of subsection
(d) of Section 1-75 of the Illinois Power Agency Act;

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(iv) all alternative retail electric suppliers,
whether certified before or after the effective date of
this amendatory Act of the 98th General Assembly, shall
execute a sourcing agreement to source electricity
from the initial clean coal facility, on the terms set
forth in paragraphs (3) and (4) of subsection (d) of
Section 1-75 of the Illinois Power Agency Act, with
each reference therein to "utility" being deemed to be
a reference to an alternative retail electric
supplier, except that in lieu of the requirements in
subparagraphs (B)(v), (D)(ii), and (D)(vii) (A)(v),
(B)(i), (C)(v), and (C)(vi) of paragraph (3) of that
subsection (d), shall not apply; the applicant shall
execute one or more of the following:
(1) if the sourcing agreement is a power
purchase agreement, a contract with the initial
clean coal facility to purchase in each hour an
amount of electricity equal to all clean coal
energy made available from the initial clean coal
facility during such hour, which the utilities are
not required to procure under the terms of
subsection (d) of Section 1-75 of the Illinois
Power Agency Act, multiplied by a fraction, the
numerator of which is the alternative retail
electric supplier's retail market sales of
electricity (expressed in kilowatthours sold) in

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the State during the prior calendar month and the
denominator of which is the total 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 paragraph (5) of subsection
(d) of this Section and subsection (d) of Section
1-75 of the Illinois Power Agency Act plus the
total sales of electricity (expressed in
kilowatthours sold) by utilities outside of their
service areas during such prior month, pursuant to
subsection (c) of Section 16-116 of this Act; or
(2) if the sourcing agreement is a contract for
differences, a contract with the initial clean
coal facility in each hour with respect to an
amount of electricity equal to all clean coal
energy made available from the initial clean coal
facility during such hour, which the utilities are
not required to procure under the terms of
subsection (d) of Section 1-75 of the Illinois
Power Agency Act, multiplied by a fraction, the
numerator of which is the alternative retail
electric supplier'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 sales of

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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 paragraph (5) of subsection
(d) of this Section and subsection (d) of Section
1-75 of the Illinois Power Agency Act plus the
total sales of electricity (expressed in
kilowatthours sold) by utilities outside of their
service areas during such prior month, pursuant to
subsection (c) of Section 16-116 of this Act;
(v) (blank); if, in any year after the first year
of commercial operation, the owner of the clean coal
facility fails to demonstrate to the Commission 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 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 costs of any such offsets
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 an alternative

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retail electric supplier 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 that
apply to the initial clean coal facility 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;
(vi) the The Commission shall, after notice and
hearing, revoke the certification of any alternative
retail electric supplier that fails to execute a
sourcing agreement with the initial clean coal
facility as required by item (5) of subsection (d) of
this Section. The sourcing agreements with the this
initial clean coal facility shall be subject to
approval both approval of the initial clean coal

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facility by the Illinois Power Agency pursuant to
paragraph (4) of subsection (d) of Section 1-75 of the
Illinois Power Agency Act General Assembly and
satisfaction of the requirements of item (4) of
subsection (d) of Section 1-75 of the Illinois Power
Agency Act, and shall be executed within 30 90 days
after any such approval by the Illinois Power Agency or
the issuance of any necessary approval by the Federal
Energy Regulatory Commission, whichever is later;
(vii) The Commission shall have jurisdiction over
disciplinary proceedings and complaints for violations
of this Section. If, upon complaint, the Commission
determines an alternative retail electric supplier has
failed to execute a sourcing agreement with the initial
clean coal facility, then the Commission shall issue
notice of the finding to the alternative retail
electric supplier. The alternative retail electric
supplier shall have 30 days after the receipt of notice
to enter into a sourcing agreement. If, after the
notice period, the Commission finds an alternative
retail electric supplier has failed to comply, then the
Commission shall revoke the alternative retail
electric supplier's certificate for 6 months General
Assembly. The Commission shall not accept an
application for certification from an alternative
retail electric supplier that has lost certification

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under this subsection (d), or any corporate affiliate
thereof, for at least one year from the date of
revocation;
(6) With respect to an applicant that seeks to serve
residential or small commercial retail customers, that the
area to be served by the applicant and any limitations it
proposes on the number of customers or maximum amount of
load to be served meet the provisions of Section 16-115A,
provided, that the Commission can extend the time for
considering such a certificate request by up to 90 days,
and can schedule hearings on such a request;
(7) That the applicant meets the requirements of
subsection (a) of Section 16-128; and
(8) That the applicant will comply with all other
applicable laws and regulations.
(d-5) (Blank).
(e) A retail customer that owns a cogeneration or
self-generation facility and that seeks certification only to
provide electric power and energy from such facility to retail
customers at separate locations which customers are both (i)
owned by, or a subsidiary or other corporate affiliate of, such
applicant and (ii) eligible for delivery services, shall be
granted a certificate of service authority upon filing an
application and notifying the Commission that it has entered
into an agreement with the relevant electric utilities pursuant
to Section 16-118. Provided, however, that if the retail

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customer owning such cogeneration or self-generation facility
would not be charged a transition charge due to the exemption
provided under subsection (f) of Section 16-108 prior to the
certification, and the retail customers at separate locations
are taking delivery services in conjunction with purchasing
power and energy from the facility, the retail customer on
whose premises the facility is located shall not thereafter be
required to pay transition charges on the power and energy that
such retail customer takes from the facility.
(f) The Commission shall have the authority to promulgate
rules and regulations to carry out the provisions of this
Section. On or before May 1, 1999, the Commission shall adopt a
rule or rules applicable to the certification of those
alternative retail electric suppliers that seek to serve only
nonresidential retail customers with maximum electrical
demands of one megawatt or more which shall provide for (i)
expedited and streamlined procedures for certification of such
alternative retail electric suppliers and (ii) specific
criteria which, if met by any such alternative retail electric
supplier, shall constitute the demonstration of technical,
financial and managerial resources and abilities to provide
service required by subsection (d) (1) of this Section, such as
a requirement to post a bond or letter of credit, from a
responsible surety or financial institution, of sufficient
size for the nature and scope of the services to be provided;
demonstration of adequate insurance for the scope and nature of

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the services to be provided; and experience in providing
similar services in other jurisdictions.
(g) In any proceeding initiated by a public utility
pursuant to Section 8-406 or Section 8-406.1 of this Act for a
certificate of public convenience and necessity to construct
and operate any utility plant, equipment, or facility required
to provide service to the initial clean coal facility, it shall
be conclusively presumed that the public convenience and
necessity require the construction of such utility plant,
equipment, or facility. In any proceeding initiated by a public
utility pursuant to Section 8-503 of this Act for an order
directing the addition, extension, or improvement of any
utility plant, equipment, facilities, or other property or the
erection of any new utility plant, equipment, or facilities to
provide service to the initial clean coal facility, it shall be
conclusively presumed that such additional, extended, improved
or new utility plant, equipment, facility, or other property is
necessary and should be added, extended, or erected.
(Source: P.A. 95-130, eff. 1-1-08; 95-1027, eff. 6-1-09;
96-159, eff. 8-10-09.)
(220 ILCS 5/16-115D)
Sec. 16-115D. Renewable portfolio standard for alternative
retail electric suppliers and electric utilities operating
outside their service territories.
(a) Until May 31, 2014 an An alternative retail electric

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supplier shall be responsible for procuring cost-effective
renewable energy resources as required under item (5) of
subsection (d) of Section 16-115 of this Act as outlined
herein:
(1) The definition of renewable energy resources
contained in Section 1-10 of the Illinois Power Agency Act
applies to all renewable energy resources required to be
procured by alternative retail electric suppliers.
(2) The quantity of renewable energy resources shall be
measured as a percentage of the actual amount of metered
electricity (megawatt-hours) delivered by the alternative
retail electric supplier to Illinois retail customers
during the 12-month period June 1 through May 31,
commencing June 1, 2009, and the comparable 12-month period
in each year thereafter except as provided in item (6) of
this subsection (a).
(3) The quantity of renewable energy resources shall be
in amounts at least equal to the annual percentages set
forth in item (1) of subsection (c) of Section 1-75 of the
Illinois Power Agency Act. At least 60% of the renewable
energy resources procured pursuant to items (1) through (3)
of subsection (b) of this Section shall come from wind
generation and, starting June 1, 2015, at least 6% of the
renewable energy resources procured pursuant to items (1)
through (3) of subsection (b) of this Section shall come
from solar photovoltaics. If, in any given year, an

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alternative retail electric supplier does not purchase at
least these levels of renewable energy resources, then the
alternative retail electric supplier shall make
alternative compliance payments, as described in
subsection (d) of this Section.
(4) The quantity and source of renewable energy
resources shall be independently verified through the PJM
Environmental Information System Generation Attribute
Tracking System (PJM-GATS) or the Midwest Renewable Energy
Tracking System (M-RETS), which shall document the
location of generation, resource type, month, and year of
generation for all qualifying renewable energy resources
that an alternative retail electric supplier uses to comply
with this Section. No later than June 1, 2009, the Illinois
Power Agency shall provide PJM-GATS, M-RETS, and
alternative retail electric suppliers with all information
necessary to identify resources located in Illinois,
within states that adjoin Illinois or within portions of
the PJM and MISO footprint in the United States that
qualify under the definition of renewable energy resources
in Section 1-10 of the Illinois Power Agency Act for
compliance with this Section 16-115D. Alternative retail
electric suppliers shall not be subject to the requirements
in item (3) of subsection (c) of Section 1-75 of the
Illinois Power Agency Act.
(5) All renewable energy credits used to comply with

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this Section shall be permanently retired.
(6) The required procurement of renewable energy
resources by an alternative retail electric supplier shall
apply to all metered electricity delivered to Illinois
retail customers by the alternative retail electric
supplier pursuant to contracts executed or extended after
March 15, 2009.
(b) Until May 31, 2014 an An alternative retail electric
supplier shall comply with the renewable energy portfolio
standards by making an alternative compliance payment, as
described in subsection (d) of this Section, to cover at least
one-half of the alternative retail electric supplier's
compliance obligation and any one or combination of the
following means to cover the remainder of the alternative
retail electric supplier's compliance obligation:
(1) Generating electricity using renewable energy
resources identified pursuant to item (4) of subsection (a)
of this Section.
(2) Purchasing electricity generated using renewable
energy resources identified pursuant to item (4) of
subsection (a) of this Section through an energy contract.
(3) Purchasing renewable energy credits from renewable
energy resources identified pursuant to item (4) of
subsection (a) of this Section.
(4) Making an alternative compliance payment as
described in subsection (d) of this Section.

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(c) Use of renewable energy credits.
(1) Renewable energy credits that are not used by an
alternative retail electric supplier to comply with a
renewable portfolio standard in a compliance year may be
banked and carried forward up to 2 12-month compliance
periods after the compliance period in which the credit was
generated for the purpose of complying with a renewable
portfolio standard in those 2 subsequent compliance
periods. For the 2009-2010 and 2010-2011 compliance
periods, an alternative retail electric supplier may use
renewable credits generated after December 31, 2008 and
before June 1, 2009 to comply with this Section.
(2) An alternative retail electric supplier is
responsible for demonstrating that a renewable energy
credit used to comply with a renewable portfolio standard
is derived from a renewable energy resource and that the
alternative retail electric supplier has not used, traded,
sold, or otherwise transferred the credit.
(3) The same renewable energy credit may be used by an
alternative retail electric supplier to comply with a
federal renewable portfolio standard and a renewable
portfolio standard established under this Act. An
alternative retail electric supplier that uses a renewable
energy credit to comply with a renewable portfolio standard
imposed by any other state may not use the same credit to
comply with a renewable portfolio standard established

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under this Act.
(d) Alternative compliance payments.
(1) The Commission shall establish and post on its
website, within 5 business days after entering an order
approving a procurement plan pursuant to Section 1-75 of
the Illinois Power Agency Act, maximum alternative
compliance payment rates, expressed on a per kilowatt-hour
basis, that will be applicable in the first compliance
period following the plan approval. A separate maximum
alternative compliance payment rate shall be established
for the service territory of each electric utility that is
subject to subsection (c) of Section 1-75 of the Illinois
Power Agency Act. Each maximum alternative compliance
payment rate shall be equal to the maximum allowable annual
estimated average net increase due to the costs of the
utility's purchase of renewable energy resources included
in the amounts paid by eligible retail customers in
connection with electric service, as described in item (2)
of subsection (c) of Section 1-75 of the Illinois Power
Agency Act for the compliance period, and as established in
the approved procurement plan. Following each procurement
event through which renewable energy resources are
purchased for one or more of these utilities for the
compliance period, the Commission shall establish and post
on its website estimates of the alternative compliance
payment rates, expressed on a per kilowatt-hour basis, that

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shall apply for that compliance period. Posting of the
estimates shall occur no later than 10 business days
following the procurement event, however, the Commission
shall not be required to establish and post such estimates
more often than once per calendar month. By July 1 of each
year, the Commission shall establish and post on its
website the actual alternative compliance payment rates
for the preceding compliance year. For compliance years
beginning prior to June 1, 2014, each alternative
compliance payment rate shall be equal to the total amount
of dollars that the utility contracted to spend on
renewable resources, excepting the additional incremental
cost attributable to solar resources, for the compliance
period divided by the forecasted load of eligible retail
customers, at the customers' meters, as previously
established in the Commission-approved procurement plan
for that compliance year. For compliance years commencing
on or after June 1, 2014, each alternative compliance
payment rate shall be equal to the total amount of dollars
that the utility contracted to spend on all renewable
resources for the compliance period divided by the
forecasted load of eligible retail customers, at the
customers' meters, as previously established in the
Commission-approved procurement plan for that compliance
year. The actual alternative compliance payment rates may
not exceed the maximum alternative compliance payment

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rates established for the compliance period. For purposes
of this subsection (d), the term "eligible retail
customers" has the same meaning as found in Section
16-111.5 of this Act.
(2) In any given compliance year, an alternative retail
electric supplier may elect to use alternative compliance
payments to comply with all or a part of the applicable
renewable portfolio standard. In the event that an
alternative retail electric supplier elects to make
alternative compliance payments to comply with all or a
part of the applicable renewable portfolio standard, such
payments shall be made by September 1, 2010 for the period
of June 1, 2009 to May 1, 2010 and by September 1 of each
year thereafter for the subsequent compliance period, in
the manner and form as determined by the Commission. Any
election by an alternative retail electric supplier to use
alternative compliance payments is subject to review by the
Commission under subsection (e) of this Section.
(3) An alternative retail electric supplier's
alternative compliance payments shall be computed
separately for each electric utility's service territory
within which the alternative retail electric supplier
provided retail service during the compliance period,
provided that the electric utility was subject to
subsection (c) of Section 1-75 of the Illinois Power Agency
Act. For each service territory, the alternative retail

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electric supplier's alternative compliance payment shall
be equal to (i) the actual alternative compliance payment
rate established in item (1) of this subsection (d),
multiplied by (ii) the actual amount of metered electricity
delivered by the alternative retail electric supplier to
retail customers within the service territory during the
compliance period, multiplied by (iii) the result of one
minus the ratios of the quantity of renewable energy
resources used by the alternative retail electric supplier
to comply with the requirements of this Section within the
service territory to the product of the percentage of
renewable energy resources required under item (3) of
subsection (a) of this Section and the actual amount of
metered electricity delivered by the alternative retail
electric supplier to retail customers within the service
territory during the compliance period.
(4) All alternative compliance payments by alternative
retail electric suppliers shall be deposited in the
Illinois Power Agency Renewable Energy Resources Fund and
used to purchase renewable energy credits, in accordance
with Section 1-56 of the Illinois Power Agency Act.
Beginning April 1, 2012 and by April 1 of each year
thereafter, the Illinois Power Agency shall submit an
annual report to the General Assembly, the Commission, and
alternative retail electric suppliers that shall include,
but not be limited to:

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(A) the total amount of alternative compliance
payments received in aggregate from alternative retail
electric suppliers by planning year for all previous
planning years in which the alternative compliance
payment was in effect;
(B) the amount of those payments utilized to
purchased renewable energy credits itemized by the
date of each procurement in which the payments were
utilized; and
(C) the unused and remaining balance in the Agency
Renewable Energy Resources Fund attributable to those
payments.
(5) The Commission, in consultation with the Illinois
Power Agency, shall establish a process or proceeding to
consider the impact of a federal renewable portfolio
standard, if enacted, on the operation of the alternative
compliance mechanism, which shall include, but not be
limited to, developing, to the extent permitted by the
applicable federal statute, an appropriate methodology to
apportion renewable energy credits retired as a result of
alternative compliance payments made in accordance with
this Section. The Commission shall commence any such
process or proceeding within 35 days after enactment of a
federal renewable portfolio standard.
(e) Each alternative retail electric supplier shall, by
September 1, 2010 and by September 1 of each year thereafter,

SB2392 - 211 - LRB098 10321 CEL 40506 b
prepare and submit to the Commission a report, in a format to
be specified by the Commission on or before December 31, 2009,
that provides information certifying compliance by the
alternative retail electric supplier with this Section,
including copies of all PJM-GATS and M-RETS reports, and
documentation relating to banking, retiring renewable energy
credits, and any other information that the Commission
determines necessary to ensure compliance with this Section. An
alternative retail electric supplier may file commercially or
financially sensitive information or trade secrets with the
Commission as provided under the rules of the Commission. To be
filed confidentially, the information shall be accompanied by
an affidavit that sets forth both the reasons for the
confidentiality and a public synopsis of the information.
(f) The Commission may initiate a contested case to review
allegations that the alternative retail electric supplier has
violated this Section, including an order issued or rule
promulgated under this Section. In any such proceeding, the
alternative retail electric supplier shall have the burden of
proof. If the Commission finds, after notice and hearing, that
an alternative retail electric supplier has violated this
Section, then the Commission shall issue an order requiring the
alternative retail electric supplier to:
(1) immediately comply with this Section; and
(2) if the violation involves a failure to procure the
requisite quantity of renewable energy resources or pay the

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applicable alternative compliance payment by the annual
deadline, the Commission shall require the alternative
retail electric supplier to double the applicable
alternative compliance payment that would otherwise be
required to bring the alternative retail electric supplier
into compliance with this Section.
If an alternative retail electric supplier fails to comply
with the renewable energy resource portfolio requirement in
this Section more than once in a 5-year period, then the
Commission shall revoke the alternative electric supplier's
certificate of service authority. The Commission shall not
accept an application for a certificate of service authority
from an alternative retail electric supplier that has lost
certification under this subsection (f), or any corporate
affiliate thereof, for at least one year after the date of
revocation.
(g) All of the provisions of this Section apply to electric
utilities operating outside their service area except under
item (2) of subsection (a) of this Section the quantity of
renewable energy resources shall be measured as a percentage of
the actual amount of electricity (megawatt-hours) supplied in
the State outside of the utility's service territory during the
12-month period June 1 through May 31, commencing June 1, 2009,
and the comparable 12-month period in each year thereafter
except as provided in item (6) of subsection (a) of this
Section.

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If any such utility fails to procure the requisite quantity
of renewable energy resources by the annual deadline, then the
Commission shall require the utility to double the alternative
compliance payment that would otherwise be required to bring
the utility into compliance with this Section.
If any such utility fails to comply with the renewable
energy resource portfolio requirement in this Section more than
once in a 5-year period, then the Commission shall order the
utility to cease all sales outside of the utility's service
territory for a period of at least one year.
(h) The provisions of this Section and the provisions of
subsection (d) of Section 16-115 of this Act relating to
procurement of renewable energy resources shall not apply to an
alternative retail electric supplier that operates a combined
heat and power system in this State or that has a corporate
affiliate that operates such a combined heat and power system
in this State that supplies electricity primarily to or for the
benefit of: (i) facilities owned by the supplier, its
subsidiary, or other corporate affiliate; (ii) facilities
electrically integrated with the electrical system of
facilities owned by the supplier, its subsidiary, or other
corporate affiliate; or (iii) facilities that are adjacent to
the site on which the combined heat and power system is
located.
(i) The obligations specified in this Section of
alternative retail electric suppliers and electric utilities

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operating outside their service territories to procure
renewable energy resources, make alternative compliance
payments, and file annual reports, and the obligations of the
Commission to determine and post alternative compliance
payment rates, shall terminate effective May 31, 2014, provided
that alternative retail electric suppliers and electric
utilities operating outside their service territories shall be
obligated to make all alternative compliance payments that they
were obligated to pay for periods through and including May 31,
2014, but were not paid as of that date and to file all
required reports for periods prior to June 1, 2014. The
Commission shall continue to enforce the payment of unpaid
alternative compliance payments after May 31, 2014 in
accordance with subsections (f) and (g) of this Section. All
alternative compliance payments made after May 31, 2014 shall
be deposited in the Illinois Power Agency Renewable Energy
Resources Fund and used to purchase renewable energy credits,
in accordance with Section 1-56 of the Illinois Power Agency
Act.
(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
96-1437, eff. 8-17-10; 97-658, eff. 1-13-12.)
(220 ILCS 5/16-116)
Sec. 16-116. Commission oversight of electric utilities
serving retail customers outside their service areas or
providing competitive, non-tariffed services.

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(a) An electric utility that has a tariff on file for
delivery services may, without regard to any otherwise
applicable tariffs on file, provide electric power and energy
to one or more retail customers located outside its service
area, but only to the extent (i) such retail customer (A) is
eligible for delivery services under any delivery services
tariff filed with the Commission by the electric utility in
whose service area the retail customer is located and (B) has
either elected to take such delivery services or has paid or
contracted to pay the charges specified in Sections 16-108 and
16-114, or (ii) if such retail customer is served by a
municipal system or electric cooperative, the customer is
eligible for delivery services under the terms and conditions
for such service established by the municipal system or
electric cooperative serving that customer.
(b) An electric utility may offer any competitive service
to any customer or group of customers without filing contracts
with or seeking approval of the Commission, notwithstanding any
rule or regulation that would require such approval. The
Commission shall not increase or decrease the prices, and may
not alter or add to the terms and conditions for the utility's
competitive services, from those agreed to by the electric
utility and the customer or customers. Non-tariffed,
competitive services shall not be subject to the provisions of
the Electric Supplier Act or to Articles V, VII, VIII or IX of
the Act, except to the extent that any provisions of such

SB2392 - 216 - LRB098 10321 CEL 40506 b
Articles are made applicable to alternative retail electric
suppliers pursuant to Sections 16-115 and 16-115A, but shall be
subject to the provisions of subsections (b) through (g) of
Section 16-115A, and Section 16-115B to the same extent such
provisions are applicable to the services provided by
alternative retail electric suppliers.
(c) Electric utilities serving retail customers outside
their service areas shall be subject to the requirements of
paragraph (5) of subsection (d) of Section 16-115 of the Public
Utilities Act, except that the numerators referred to in that
subsection (d) shall be the utility's retail market sales of
electricity (expressed in kilowatthours sold) in the State
outside of the utility's service territory in the prior month.
(Source: P.A. 95-1027, eff. 6-1-09.)
Section 900. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
SB2392 - 217 - LRB098 10321 CEL 40506 b
INDEX
Statutes amended in order of appearance