Bill Text: IL SB3426 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: Creates the Energy and Environmental Security Act. Contains legislative findings. Amends the Illinois Finance Authority Act. Provides that the aggregate amount of bonds that may be issued by the Illinois Finance Authority for Clean Coal Projects may also be used to finance certain Qualified Clean Coal Projects. Creates the Clean Coal Technology Development and Utilization Fund. Provides that the Fund shall be used by the Illinois Finance Authority to administer the Agency's responsibilities to support the financing and installation of qualified clean coal projects. Amends the Illinois Power Agency Act. Contains provisions concerning diverse energy portfolio standards. Provides that nothing in the Act prohibits the Agency from taking title to indigenous or bituminous coal in order to fulfill any purpose enumerated by this Act. Amends the Public Utilities Act. Makes changes concerning procurement and certificates of service authority.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2016-05-11 - Referred to Assignments [SB3426 Detail]

Download: Illinois-2015-SB3426-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 SB3426 Introduced 5/11/2016, by Sen. Andy Manar SYNOPSIS AS INTRODUCED:
20 ILCS 3501/825-65
20 ILCS 3501/825-70
20 ILCS 3501/825-75
20 ILCS 3501/825-120 new
20 ILCS 3855/1-5
20 ILCS 3855/1-10
20 ILCS 3855/1-20
20 ILCS 3855/1-75
220 ILCS 5/16-111.5
220 ILCS 5/16-115
30 ILCS 105/5.875 new
Creates the Energy and Environmental Security Act. Contains legislative findings. Amends the Illinois Finance Authority Act. Provides that the aggregate amount of bonds that may be issued by the Illinois Finance Authority for Clean Coal Projects may also be used to finance certain Qualified Clean Coal Projects. Creates the Clean Coal Technology Development and Utilization Fund. Provides that the Fund shall be used by the Illinois Finance Authority to administer the Agency's responsibilities to support the financing and installation of qualified clean coal projects. Amends the Illinois Power Agency Act. Contains provisions concerning diverse energy portfolio standards. Provides that nothing in the Act prohibits the Agency from taking title to indigenous or bituminous coal in order to fulfill any purpose enumerated by this Act. Amends the Public Utilities Act. Makes changes concerning procurement and certificates of service authority.
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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:
ARTICLE 1. SHORT TITLE; LEGISLATIVE FINDINGS.
Section 1-1. Short title. This Act may be cited as the
Energy and Environmental Security Act.
Section 1-5. Diverse Energy Portfolio Standards;
legislative findings. The General Assembly finds and declares
the following:
(1) Currently, Illinois has the most diverse portfolio
of electrical generating units of any state in the United
States. That portfolio consists of the following: (i)
nuclear plants, which constitute 48% of the generation
statewide; (ii) coal-fired plants, which constitute 41% of
the generation statewide; (iii) renewables, which
constitute 5% of the generation statewide; (iv) natural
gas, which constitutes 4.5% of the generation statewide;
and (v) hydro and petroleum fired units which constitute
1.4% of the generation statewide. Illinois must focus on
maintaining existing electric utility generating units to
the maximum extent possible in order to retain the State's
position as a net exporter of electricity and to keep

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in-state electricity reliable and affordable.
(2) As the General Assembly considers emissions
reductions it must take into account the regulatory impacts
to the environment and to the economy of Illinois and the
public policy of Illinois to produce electricity in an
economically sound manner while also maintaining Illinois'
electric system reliability.
(3) The future energy policy of Illinois must ensure
continued access to adequate, reliable, affordable,
efficient, and environmentally sustainable electric
service at the lowest total cost per kilowatt hour over
time, taking into account the benefits of price stability
to Illinois consumers.
(4) According to the United States Energy Information
Administration, the emission factors for bituminous coal
range from a low of 202.8 pounds of carbon dioxide per
million Btu in Ohio to a high of 210.2 pounds of carbon
dioxide per million Btu in Maryland. For Illinois Basin
coal, all bituminous in rank, the emission factors are
relatively uniform, ranging from 203.2 in western Kentucky
to 203.6 in Indiana. In coal basins in the Western United
States, the emission factors for bituminous coal range from
more than 201 pounds of carbon dioxide per million Btu in
Missouri, Iowa, and Nevada to more than 209 in Arizona,
Arkansas, and Montana.
(5) Bituminous coal is found in every coal basin in the

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United States, and, in general, the carbon dioxide emission
factors are lowest for coal produced in states east of the
Mississippi River, where the predominant coals are
bituminous in rank and therefore have relatively low
emission factors.
(6) The Energy Information Administration analysis
confirmed the long-recognized finding that anthracite
emits the largest amount of carbon dioxide per million Btu,
followed by lignite, subbituminous coal, and bituminous
coal. The average factors in the United States are 227.4
for anthracite, 216.3 for lignite, 211.9 for subbituminous
coal, and 205.3 for bituminous coal.
(7) By utilizing bituminous coal, Illinois electric
utility generating units will have the opportunity to
utilize less coal to generate the same number of Btus while
reducing carbon dioxide emissions in a way intended to
permit Illinois to maintain its existing diverse portfolio
of electric utility generating units. A diverse and
reliable electric utility generating unit portfolio
provides Illinois consumers with reliable and affordable
electric service at the lowest total cost per kilowatt hour
over the long-term.
ARTICLE 5. AMENDATORY PROVISIONS
Section 5-5. The Illinois Finance Authority Act is amended

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by changing Sections 825-65, 825-70, and 825-75 and by adding
Section 825-120 as follows:
(20 ILCS 3501/825-65)
Sec. 825-65. Clean Coal, Coal, Qualified Clean Coal, Energy
Efficiency, and Renewable Energy Project Financing.
(a) Findings and declaration of policy.
(i) It is hereby found and declared that Illinois has
abundant coal resources and, in some areas of Illinois, the
demand for power exceeds the generating capacity.
Incentives to encourage the construction of coal-fueled
electric generating plants in Illinois to ensure power
generating capacity into the future and to advance clean
coal technology and the use of Illinois coal are in the
best interests of all of the citizens of Illinois.
(ii) It is further found and declared that Illinois has
abundant potential and resources to develop renewable
energy resource projects and that there are many
opportunities to invest in cost-effective energy
efficiency projects throughout the State. The development
of those projects will create jobs and investment as well
as decrease environmental impacts and promote energy
independence in Illinois. Accordingly, the development of
those projects is in the best interests of all of the
citizens of Illinois.
(iii) The Authority is authorized to issue bonds to

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help finance Clean Coal, Qualified Clean Coal, Coal, Energy
Efficiency, and Renewable Energy projects pursuant to this
Section.
(b) Definitions.
(i) "Clean Coal Project" means (A) "clean coal
facility", as defined in Section 1-10 of the Illinois Power
Agency Act; (B) "clean coal SNG facility", as defined in
Section 1-10 of the Illinois Power Agency Act; (C)
transmission lines and associated equipment that transfer
electricity from points of supply to points of delivery for
projects described in this subsection (b); (D) pipelines or
other methods to transfer carbon dioxide from the point of
production to the point of storage or sequestration for
projects described in this subsection (b); or (E) projects
to provide carbon abatement technology for existing
generating facilities.
(ii) "Coal Project" means new electric generating
facilities or new gasification facilities, as defined in
Section 605-332 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of
Illinois, which may include mine-mouth power plants,
projects that employ the use of clean coal technology,
projects to provide scrubber technology for existing
energy generating plants, or projects to provide electric
transmission facilities or new gasification facilities.
(iii) "Energy Efficiency Project" means measures that

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reduce the amount of electricity or natural gas required to
achieve a given end use, consistent with Section 1-10 of
the Illinois Power Agency Act. "Energy Efficiency Project"
also includes measures that reduce the total Btus of
electricity and natural gas needed to meet the end use or
uses consistent with Section 1-10 of the Illinois Power
Agency Act.
(iv) "Renewable Energy Project" means (A) a project
that uses renewable energy resources, as defined in Section
1-10 of the Illinois Power Agency Act; (B) a project that
uses environmentally preferable technologies and practices
that result in improvements to the production of renewable
fuels, including but not limited to, cellulosic
conversion, water and energy conservation, fractionation,
alternative feedstocks, or reduced green house gas
emissions; (C) transmission lines and associated equipment
that transfer electricity from points of supply to points
of delivery for projects described in this subsection (b);
or (D) projects that use technology for the storage of
renewable energy, including, without limitation, the use
of battery or electrochemical storage technology for
mobile or stationary applications.
(v) "Qualified Clean Coal Project" means a project
located at a generating facility that uses or seeks to use
qualified pollution control equipment, as defined in
Section 1-10 of the Illinois Power Agency Act, to qualify

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as a qualified clean coal facility as defined in Section
1-10 of the Illinois Power Agency Act.
(c) Creation of reserve funds. The Authority may establish
and maintain one or more reserve funds to enhance bonds issued
by the Authority for a Clean Coal Project, a Coal Project, an
Energy Efficiency Project, a Qualified Clean Coal Project, or a
Renewable Energy Project. There may be one or more accounts in
these reserve funds in which there may be deposited:
(1) any proceeds of the bonds issued by the Authority
required to be deposited therein by the terms of any
contract between the Authority and its bondholders or any
resolution of the Authority;
(2) any other moneys or funds of the Authority that it
may determine to deposit therein from any other source; and
(3) any other moneys or funds made available to the
Authority. Subject to the terms of any pledge to the owners
of any bonds, moneys in any reserve fund may be held and
applied to the payment of principal, premium, if any, and
interest of such bonds.
(d) Powers and duties. The Authority has the power:
(1) To issue bonds in one or more series pursuant to
one or more resolutions of the Authority for any Clean Coal
Project, Coal Project, Energy Efficiency Project,
Qualified Clean Coal Project, or Renewable Energy Project
authorized under this Section, within the authorization
set forth in subsection (e).

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(2) To provide for the funding of any reserves or other
funds or accounts deemed necessary by the Authority in
connection with any bonds issued by the Authority.
(3) To pledge any funds of the Authority or funds made
available to the Authority that may be applied to such
purpose as security for any bonds or any guarantees,
letters of credit, insurance contracts or similar credit
support or liquidity instruments securing the bonds.
(4) To enter into agreements or contracts with third
parties, whether public or private, including, without
limitation, the United States of America, the State or any
department or agency thereof, to obtain any
appropriations, grants, loans or guarantees that are
deemed necessary or desirable by the Authority. Any such
guarantee, agreement or contract may contain terms and
provisions necessary or desirable in connection with the
program, subject to the requirements established by the
Act.
(5) To exercise such other powers as are necessary or
incidental to the foregoing.
(e) Clean Coal Project, Coal Project, Energy Efficiency
Project, Qualified Clean Coal Project, and Renewable Energy
Project bond authorization and financing limits. In addition to
any other bonds authorized to be issued under Sections
801-40(w), 825-60, 830-25 and 845-5, the Authority may have
outstanding, at any time, bonds for the purpose enumerated in

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this Section 825-65 in an aggregate principal amount that shall
not exceed $3,000,000,000, subject to the following
limitations: (i) up to $300,000,000 may be issued to finance
projects, as described in clause (C) of subsection (b)(i) and
clause (C) of subsection (b)(iv) of this Section 825-65; (ii)
up to $500,000,000 may be issued to finance projects, as
described in clauses (D) and (E) of subsection (b)(i) of this
Section 825-65; (iii) up to $2,000,000,000 may be issued to
finance Clean Coal Projects, as described in clauses (A) and
(B) of subsection (b)(i) of this Section 825-65, and Coal
Projects, as described in subsection (b)(ii) of this Section
825-65, and for a Qualified Clean Coal Project, as described in
paragraph (v) of subsection (b) of this Section; and (iv) up to
$2,000,000,000 may be issued to finance Energy Efficiency
Projects, as described in subsection (b)(iii) of this Section
825-65 and Renewable Energy Projects, as described in clauses
(A), (B), and (D) of subsection (b)(iii) of this Section
825-65. An application for a loan financed from bond proceeds
from a borrower or its affiliates for a Clean Coal Project, a
Coal Project, Energy Efficiency Project, or a Renewable Energy
Project may not be approved by the Authority for an amount in
excess of $450,000,000 for any borrower or its affiliates. A
Clean Coal Project, Qualified Clean Coal Project, or Coal
Project must be located within the State. An Energy Efficiency
Project may be located within the State or outside the State,
provided that, if the Energy Efficiency Project is located

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outside of the State, it must be owned, operated, leased, or
managed by an entity located within the State or any entity
affiliated with an entity located within the State. These bonds
shall not constitute an indebtedness or obligation of the State
of Illinois and it shall be plainly stated on the face of each
bond that it does not constitute an indebtedness or obligation
of the State of Illinois, but is payable solely from the
revenues, income or other assets of the Authority pledged
therefor.
(f) The bonding authority granted under this Section is in
addition to and not limited by the provisions of Section 845-5.
(Source: P.A. 98-90, eff. 7-15-13.)
(20 ILCS 3501/825-70)
Sec. 825-70. Criteria for participation in the program.
Applications to the Authority for financing of any Clean Coal,
Coal, Energy Efficiency Project, Qualified Clean Coal Project,
or Renewable Energy Project shall be reviewed by the Authority.
Upon submission of any such application, the Authority staff
shall review the application for its completeness and may, at
the discretion of the Authority staff, request such additional
information as it deems necessary or advisable to aid in
review. If the Authority receives applications for financing
for Clean Coal, Coal, Energy Efficiency Project, Qualified
Clean Coal Project, or Renewable Energy Projects in excess of
the bond authorization available for such financing at any one

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time, it shall consider applications in the order of priority
as it shall determine, in consultation with other State
agencies, and consistent with State policy to promote
environmentally preferable technology and energy independence.
An application for a loan for a Qualified Clean Coal Project
submitted by a borrower or any of its affiliates that is
financed from bond proceeds may not be approved by the
Authority in an amount in excess of $450,000,000 for any
borrower or affiliate for any one Qualified Clean Coal Project.
(Source: P.A. 96-103, eff. 1-1-10; 96-817, eff. 1-1-10.)
(20 ILCS 3501/825-75)
Sec. 825-75. Additional Security. In the event that the
Authority determines that monies of the Authority will not be
sufficient for the payment of the principal of and interest on
any bonds issued by the Authority under Sections 825-65 through
825-75 of this Act for Clean Coal Projects, Coal Projects,
Energy Efficiency Projects, Qualified Clean Coal Project, or
Renewable Energy Projects during the next State fiscal year,
the Chairperson, as soon as practicable, shall certify to the
Governor the amount required by the Authority to enable it to
pay such principal, premium, if any, and interest on such
bonds. The Governor shall submit the amount so certified to the
General Assembly as soon as practicable, but no later than the
end of the current State fiscal year. This subsection shall
apply to any bonds or notes as to which the Authority shall

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have determined, in the resolution authorizing the issuance of
the bonds or notes, that this subsection shall apply. Whenever
the Authority makes such a determination, that fact shall be
plainly stated on the face of the bonds or notes and that fact
should also be reported to the Governor. In the event of a
withdrawal of moneys from a reserve fund established with
respect to any issue or issues of bonds of the Authority to pay
principal, premium, if any, and interest on such bonds, the
Chairman of the Authority, as soon as practicable, shall
certify to the Governor the amount required to restore the
reserve fund to the level required in the resolution or
indenture securing those bonds. The Governor shall submit the
amount so certified to the General Assembly as soon as
practicable, but no later than the end of the current State
fiscal year. The Authority shall obtain written approval from
the Governor for any bonds and notes to be issued under this
Section.
(Source: P.A. 95-470, eff. 8-27-07; 96-103, eff. 1-1-10;
96-817, eff. 1-1-10.)
(20 ILCS 3501/825-120 new)
Sec. 825-120. Clean Coal Technology Development and
Utilization Fund. The Clean Coal Technology Development and
Utilization Fund is hereby created as a special fund in the
State Treasury. The Illinois Finance Authority shall use all
moneys from the Clean Coal Technology Development and

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Utilization Fund to administer the Illinois Power Agency's
responsibilities to support the financing and installation of
qualified clean coal projects. The Illinois Commerce
Commission shall adopt rules in accordance with the Illinois
Administrative Procedure Act to provide funding for qualified
clean coal projects by any lawful means, and those moneys shall
be deposited into the Clean Coal Technology Development and
Utilization Fund. Notwithstanding any other law to the
contrary, the Clean Coal Technology Development and
Utilization Fund is not subject to sweeps, administrative
charge-backs, or any other fiscal or budgetary maneuver that
would in any way transfer any amounts from the Clean Coal
Technology Development and Utilization Fund into any other fund
of the State.
Section 5-10. The Illinois Power Agency Act is amended by
changing Sections 1-5, 1-10, 1-20, and 1-75 as follows:
(20 ILCS 3855/1-5)
Sec. 1-5. Legislative declarations and findings. The
General Assembly finds and declares:
(1) The health, welfare, and prosperity of all Illinois
citizens require the provision of adequate, reliable,
affordable, efficient, and environmentally sustainable
electric service at the lowest total cost over time, taking
into account any benefits of price stability.

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(2) The transition to retail competition is not
complete. Some customers, especially residential and small
commercial customers, have failed to benefit from lower
electricity costs from retail and wholesale competition.
(3) Escalating prices for electricity in Illinois pose
a serious threat to the economic well-being, health, and
safety of the residents of and the commerce and industry of
the State.
(4) To protect against this threat to economic
well-being, health, and safety it is necessary to improve
the process of procuring electricity to serve Illinois
residents, to promote investment in energy efficiency and
demand-response measures, and to support development of
clean coal technologies and renewable resources.
(5) Procuring a diverse electricity supply portfolio
will ensure the lowest total cost over time for adequate,
reliable, efficient, and environmentally sustainable
electric service.
(6) Including cost-effective renewable resources in
that portfolio will reduce long-term direct and indirect
costs to consumers by decreasing environmental impacts and
by avoiding or delaying the need for new generation,
transmission, and distribution infrastructure.
(7) Energy efficiency, demand-response measures, and
renewable energy are resources currently underused in
Illinois.

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(8) The State should encourage the use of advanced
clean coal technologies that capture and sequester carbon
dioxide emissions and reduce emissions by utilizing
pollution control equipment to facilitate the use of
bituminous coal, to advance environmental protection
goals, and to demonstrate the viability of coal and
coal-derived fuels in a carbon-constrained economy.
(9) The General Assembly enacted Public Act 96-0795 to
reform the State's purchasing processes, recognizing that
government procurement is susceptible to abuse if
structural and procedural safeguards are not in place to
ensure independence, insulation, oversight, and
transparency.
(10) The principles that underlie the procurement
reform legislation apply also in the context of power
purchasing.
The General Assembly therefore finds that it is necessary
to create the Illinois Power Agency and that the goals and
objectives of that Agency are to accomplish each of the
following:
(A) 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

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customers in Illinois and for 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.
The procurement plan shall be updated on an annual basis
and shall include renewable energy resources sufficient to
achieve the standards specified in this Act.
(B) Conduct competitive procurement processes to
procure the supply resources identified in the procurement
plan.
(C) 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.
(D) 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.
(E) Ensure that the process of power procurement is
conducted in an ethical and transparent fashion, immune
from improper influence.
(F) Continue to review its policies and practices to
determine how best to meet its mission of providing the
lowest cost power to the greatest number of people, at any
given point in time, in accordance with applicable law.
(G) Operate in a structurally insulated, independent,

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and transparent fashion so that nothing impedes the
Agency's mission to secure power at the best prices the
market will bear, provided that the Agency meets all
applicable legal requirements.
(Source: P.A. 97-325, eff. 8-12-11; 97-618, eff. 10-26-11;
97-813, eff. 7-13-12.)
(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.
"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

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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
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 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.
"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

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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
(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. "Energy efficiency" also includes measures that reduce the
total Btus of electricity and natural gas needed to meet the
end use or uses.

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"Electric utility" has the same definition as found in
Section 16-102 of the Public Utilities Act.
"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
located within its or their jurisdiction.
"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.
"Qualified clean coal facility" means an electric
generating facility which uses United States high volatile rank

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bituminous coal with an inherent carbon dioxide content of less
than 210 pounds of carbon dioxide per million Btu as its
primary fuel source or which provides the lowest carbon dioxide
emission per kilowatt-hour utilizing qualified pollution
control equipment.
"Qualified pollution control equipment" means new
construction of equipment or the retrofit of an existing
generation facility which allows the use of high volatile rank
bituminous coal with an inherent carbon dioxide content of less
than 210 pounds of carbon dioxide per million Btu. This
equipment shall include, but is not limited to, scrubbers or
flue gas desulfurization, electrostatic precipitators, or
other technologies which can provide heat rate improvements,
facilitate changes in fuel type to the use of low carbon
dioxide emitting bituminous coal, burner modifications,
installation on new control equipment, or any technologies
designed for retrofitting existing plants to meet the
requirements of the federal law or regulations.
"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

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energy produced from a renewable energy resource.
"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.
"Retail customer" has the same definition as found in
Section 16-102 of the Public Utilities Act.
"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

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recovery process that may involve intermediate storage,
regardless of whether these activities are conducted by a clean
coal facility, a clean coal SNG facility, a clean coal SNG
brownfield facility, or a party with which a clean coal
facility, clean coal SNG facility, or clean coal SNG brownfield
facility has contracted for such purposes.
"Sourcing agreement" means (i) in the case of an electric
utility, an agreement between the owner of a 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 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, (iv) in the
case of an electric utility, an agreement between the owner of
the qualified clean coal facility and the electric utility,
which agreement shall have the terms and conditions meeting the
requirements of subsection (d-5) of Section 1-75, and (v) in
the case of an alternative retail electric supplier, an
agreement between the owner of a qualified clean coal facility

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and the alternative retail electric supplier, which agreement
shall have the terms and conditions meeting the requirements of
paragraph (5) of subsection (d) of Section 16-115 of the Public
Utilities Act.
"Substitute natural gas" or "SNG" means a gas manufactured
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

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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. 97-96, eff. 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;
98-90, eff. 7-15-13.)
(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.
(2) Conduct competitive procurement processes to
procure the supply resources identified in the procurement

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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. Nothing shall prohibit the
Agency from taking title to indigenous or bituminous coal
in order to fulfill any purpose enumerated by this Act. The
Agency shall provide by rule for the terms and conditions
under which the Agency may take title to indigenous or
bituminous coal.
(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.

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(4) To obtain and employ personnel and hire consultants
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

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other obligations, shares, or other securities (or
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

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Authority to issue bonds whether or not the income
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

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citizens of Illinois.
(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

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procurement processes to procure the feedstocks for the
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.
(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 3855/1-75)
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, beginning with the 2020 planning
year, the Planning and Procurement Bureau shall include in such
plans and processes the procurement of electricity generated by
qualified clean coal facilities pursuant to subsection (d-5) of

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this Section for all of the utilities' retail customers. The
Planning and Procurement Bureau shall also develop procurement
plans and conduct competitive procurement processes in
accordance with the requirements of Section 16-111.5 of the
Public Utilities Act for the eligible retail customers of small
multi-jurisdictional electric utilities that (i) on December
31, 2005 served less than 100,000 customers in Illinois and
(ii) request a procurement plan for their Illinois
jurisdictional load. This Section shall not apply to a small
multi-jurisdictional utility until such time as a small
multi-jurisdictional utility requests the Agency to prepare a
procurement plan for their Illinois jurisdictional load. For
the purposes of this Section, the term "eligible retail
customers" has the same definition as found in Section
16-111.5(a) of the Public Utilities Act.
(1) The Agency shall each year, beginning in 2008, as
needed, issue a request for qualifications for experts or
expert consulting firms to develop the procurement plans in
accordance with Section 16-111.5 of the Public Utilities
Act. In order to qualify an expert or expert consulting
firm must have:
(A) direct previous experience assembling
large-scale power supply plans or portfolios for
end-use customers;
(B) an advanced degree in economics, mathematics,
engineering, risk management, or a related area of

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study;
(C) 10 years of experience in the electricity
sector, including managing supply risk;
(D) expertise in wholesale electricity market
rules, including those established by the Federal
Energy Regulatory Commission and regional transmission
organizations;
(E) expertise in credit protocols and familiarity
with contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the affected electric utilities.
(2) The Agency shall each year, as needed, issue a
request for qualifications for a procurement administrator
to conduct the competitive procurement processes in
accordance with Section 16-111.5 of the Public Utilities
Act. In order to qualify an expert or expert consulting
firm must have:
(A) direct previous experience administering a
large-scale competitive procurement process;
(B) an advanced degree in economics, mathematics,
engineering, or a related area of study;
(C) 10 years of experience in the electricity
sector, including risk management experience;

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(D) expertise in wholesale electricity market
rules, including those established by the Federal
Energy Regulatory Commission and regional transmission
organizations;
(E) expertise in credit and contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the affected electric utilities.
(3) The Agency shall provide affected utilities and
other interested parties with the lists of qualified
experts or expert consulting firms identified through the
request for qualifications processes that are under
consideration to develop the procurement plans and to serve
as the procurement administrator. The Agency shall also
provide each qualified expert's or expert consulting
firm's response to the request for qualifications. All
information provided under this subparagraph shall also be
provided to the Commission. The Agency may provide by rule
for fees associated with supplying the information to
utilities and other interested parties. These parties
shall, within 5 business days, notify the Agency in writing
if they object to any experts or expert consulting firms on
the lists. Objections shall be based on:
(A) failure to satisfy qualification criteria;

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(B) identification of a conflict of interest; or
(C) evidence of inappropriate bias for or against
potential bidders or the affected utilities.
The Agency shall remove experts or expert consulting
firms from the lists within 10 days if there is a
reasonable basis for an objection and provide the updated
lists to the affected utilities and other interested
parties. If the Agency fails to remove an expert or expert
consulting firm from a list, an objecting party may seek
review by the Commission within 5 days thereafter by filing
a petition, and the Commission shall render a ruling on the
petition within 10 days. There is no right of appeal of the
Commission's ruling.
(4) The Agency shall issue requests for proposals to
the qualified experts or expert consulting firms to develop
a procurement plan for the affected utilities and to serve
as procurement administrator.
(5) The Agency shall select an expert or expert
consulting firm to develop procurement plans based on the
proposals submitted and shall award contracts of up to 5
years to those selected.
(6) The Agency shall select an expert or expert
consulting firm, with approval of the Commission, to serve
as procurement administrator based on the proposals
submitted. If the Commission rejects, within 5 days, the
Agency's selection, the Agency shall submit another

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recommendation within 3 days based on the proposals
submitted. The Agency shall award a 5-year contract to the
expert or expert consulting firm so selected with
Commission approval.
(b) The experts or expert consulting firms retained by the
Agency shall, as appropriate, prepare procurement plans, and
conduct a competitive procurement process as prescribed in
Section 16-111.5 of the Public Utilities Act, to ensure
adequate, reliable, affordable, efficient, and environmentally
sustainable electric service at the lowest total cost over
time, taking into account any benefits of price stability, for
eligible retail customers of electric utilities that on
December 31, 2005 provided electric service to at least 100,000
customers in the State of Illinois, and for eligible Illinois
retail customers of small multi-jurisdictional electric
utilities that (i) on December 31, 2005 served less than
100,000 customers in Illinois and (ii) request a procurement
plan for their Illinois jurisdictional load.
(c) Renewable portfolio standard.
(1) The procurement plans shall include cost-effective
renewable energy resources. A minimum percentage of each
utility's total supply to serve the load of eligible retail
customers, as defined in Section 16-111.5(a) of the Public
Utilities Act, procured for each of the following years
shall be generated from cost-effective renewable energy
resources: at least 2% by June 1, 2008; at least 4% by June

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1, 2009; at least 5% by June 1, 2010; at least 6% by June 1,
2011; at least 7% by June 1, 2012; at least 8% by June 1,
2013; at least 9% by June 1, 2014; at least 10% by June 1,
2015; and increasing by at least 1.5% each year thereafter
to at least 25% by June 1, 2025. To the extent that it is
available, at least 75% of the renewable energy resources
used to meet these standards shall come from wind
generation and, beginning on June 1, 2011, at least the
following percentages of the renewable energy resources
used to meet these standards shall come from photovoltaics
on the following schedule: 0.5% by June 1, 2012, 1.5% by
June 1, 2013; 3% by June 1, 2014; and 6% by June 1, 2015 and
thereafter. Of the renewable energy resources procured
pursuant to this Section, at least the following
percentages shall come from distributed renewable energy
generation devices: 0.5% by June 1, 2013, 0.75% by June 1,
2014, and 1% by June 1, 2015 and thereafter. To the extent
available, half of the renewable energy resources procured
from distributed renewable energy generation shall come
from devices of less than 25 kilowatts in nameplate
capacity. Renewable energy resources procured from
distributed generation devices may also count towards the
required percentages for wind and solar photovoltaics.
Procurement of renewable energy resources from distributed
renewable energy generation devices shall be done on an
annual basis through multi-year contracts of no less than 5

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years, and shall consist solely of renewable energy
credits.
The Agency shall create credit requirements for
suppliers of distributed renewable energy. In order to
minimize the administrative burden on contracting
entities, the Agency shall solicit the use of third-party
organizations to aggregate distributed renewable energy
into groups of no less than one megawatt in installed
capacity. These third-party organizations shall administer
contracts with individual distributed renewable energy
generation device owners. An individual distributed
renewable energy generation device owner shall have the
ability to measure the output of his or her distributed
renewable energy generation device.
For purposes of this subsection (c), "cost-effective"
means that the costs of procuring renewable energy
resources do not cause the limit stated in paragraph (2) of
this subsection (c) to be exceeded and do not exceed
benchmarks based on market prices for renewable energy
resources in the region, which shall be developed by the
procurement administrator, in consultation with the
Commission staff, Agency staff, and the procurement
monitor and shall be subject to Commission review and
approval.
(2) For purposes of this subsection (c), the required
procurement of cost-effective renewable energy resources

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for a particular year shall be measured as a percentage of
the actual amount of electricity (megawatt-hours) supplied
by the electric utility to eligible retail customers in the
planning year ending immediately prior to the procurement.
For purposes of this subsection (c), the amount paid per
kilowatthour means the total amount paid for electric
service expressed on a per kilowatthour basis. For purposes
of this subsection (c), the total amount paid for electric
service includes without limitation amounts paid for
supply, transmission, distribution, surcharges, and add-on
taxes.
Notwithstanding the requirements of this subsection
(c), the total of renewable energy resources procured
pursuant to the procurement plan for any single year shall
be reduced by an amount necessary to limit the annual
estimated average net increase due to the costs of these
resources included in the amounts paid by eligible retail
customers in connection with electric service to:
(A) in 2008, no more than 0.5% of the amount paid
per kilowatthour by those customers during the year
ending May 31, 2007;
(B) in 2009, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2008 or 1% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2007;

SB3426 - 42 - LRB099 21805 HLH 48563 b
(C) in 2010, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2009 or 1.5% of the
amount paid per kilowatthour by those customers during
the year ending May 31, 2007;
(D) in 2011, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2010 or 2% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2007; and
(E) thereafter, the amount of renewable energy
resources procured pursuant to the procurement plan
for any single year shall be reduced by an amount
necessary to limit the estimated average net increase
due to the cost of these resources included in the
amounts paid by eligible retail customers in
connection with electric service to no more than the
greater of 2.015% of the amount paid per kilowatthour
by those customers during the year ending May 31, 2007
or the incremental amount per kilowatthour paid for
these resources in 2011.
No later than June 30, 2011, the Commission shall
review the limitation on the amount of renewable energy
resources procured pursuant to this subsection (c) and
report to the General Assembly its findings as to
whether that limitation unduly constrains the

SB3426 - 43 - LRB099 21805 HLH 48563 b
procurement of cost-effective renewable energy
resources.
(3) Through June 1, 2011, renewable energy resources
shall be counted for the purpose of meeting the renewable
energy standards set forth in paragraph (1) of this
subsection (c) only if they are generated from facilities
located in the State, provided that cost-effective
renewable energy resources are available from those
facilities. If those cost-effective resources are not
available in Illinois, they shall be procured in states
that adjoin Illinois and may be counted towards compliance.
If those cost-effective resources are not available in
Illinois or in states that adjoin Illinois, they shall be
purchased elsewhere and shall be counted towards
compliance. After June 1, 2011, cost-effective renewable
energy resources located in Illinois and in states that
adjoin Illinois may be counted towards compliance with the
standards set forth in paragraph (1) of this subsection
(c). If those cost-effective resources are not available in
Illinois or in states that adjoin Illinois, they shall be
purchased elsewhere and shall be counted towards
compliance.
(4) The electric utility shall retire all renewable
energy credits used to comply with the standard.
(5) Beginning with the year commencing June 1, 2010, an
electric utility subject to this subsection (c) shall apply

SB3426 - 44 - LRB099 21805 HLH 48563 b
the lesser of the maximum alternative compliance payment
rate or the most recent estimated alternative compliance
payment rate for its service territory for the
corresponding compliance period, established pursuant to
subsection (d) of Section 16-115D of the Public Utilities
Act to its retail customers that take service pursuant to
the electric utility's hourly pricing tariff or tariffs.
The electric utility shall retain all amounts collected as
a result of the application of the alternative compliance
payment rate or rates to such customers, and, beginning in
2011, the utility shall include in the information provided
under item (1) of subsection (d) of Section 16-111.5 of the
Public Utilities Act the amounts collected under the
alternative compliance payment rate or rates for the prior
year ending May 31. Notwithstanding any limitation on the
procurement of renewable energy resources imposed by item
(2) of this subsection (c), the Agency shall increase its
spending on the purchase of renewable energy resources to
be procured by the electric utility for the next plan year
by an amount equal to the amounts collected by the utility
under the alternative compliance payment rate or rates in
the prior year ending May 31. Beginning April 1, 2012, and
each year thereafter, the Agency shall prepare a public
report for the General Assembly and Illinois Commerce
Commission that shall include, but not necessarily be
limited to:

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(A) a comparison of the costs associated with the
Agency's procurement of renewable energy resources to
(1) the Agency's costs associated with electricity
generated by other types of generation facilities and
(2) the benefits associated with the Agency's
procurement of renewable energy resources; and
(B) an analysis of the rate impacts associated with
the Illinois Power Agency's procurement of renewable
resources, including, but not limited to, any
long-term contracts, on the eligible retail customers
of electric utilities.
The analysis shall include the Agency's estimate of the
total dollar impact that the Agency's procurement of
renewable resources has had on the annual electricity bills
of the customer classes that comprise each eligible retail
customer class taking service from an electric utility. The
Agency's report shall also analyze how the operation of the
alternative compliance payment mechanism, any long-term
contracts, or other aspects of the applicable renewable
portfolio standards impacts the rates of customers of
alternative retail electric suppliers.
(d) Clean coal portfolio standard.
(1) The procurement plans shall include electricity
generated using clean coal. Each utility shall enter into
one or more sourcing agreements with the initial clean coal
facility, as provided in paragraph (3) of this subsection

SB3426 - 46 - LRB099 21805 HLH 48563 b
(d), covering electricity generated by the initial clean
coal facility representing at least 5% of each utility's
total supply to serve the load of eligible retail customers
in 2015 and each year thereafter, as described in paragraph
(3) of this subsection (d), subject to the limits specified
in paragraph (2) of this subsection (d). It is the goal of
the State that by January 1, 2025, 25% of the electricity
used in the State shall be generated by cost-effective
clean coal facilities. For purposes of this subsection (d),
"cost-effective" means that the expenditures pursuant to
such sourcing agreements do not cause the limit stated in
paragraph (2) of this subsection (d) to be exceeded and do
not exceed cost-based benchmarks, which shall be developed
to assess all expenditures pursuant to such sourcing
agreements covering electricity generated by clean coal
facilities, other than the initial clean coal facility, by
the procurement administrator, in consultation with the
Commission staff, Agency staff, and the procurement
monitor and shall be subject to Commission review and
approval.
A utility party to a sourcing agreement shall
immediately retire any emission credits that it receives in
connection with the electricity covered by such agreement.
Utilities shall maintain adequate records documenting
the purchases under the sourcing agreement to comply with
this subsection (d) and shall file an accounting with the

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load forecast that must be filed with the Agency by July 15
of each year, in accordance with subsection (d) of Section
16-111.5 of the Public Utilities Act.
A utility shall be deemed to have complied with the
clean coal portfolio standard specified in this subsection
(d) if the utility enters into a sourcing agreement as
required by this subsection (d).
(2) For purposes of this subsection (d), the required
execution of sourcing agreements with the initial clean
coal facility for a particular year shall be measured as a
percentage of the actual amount of electricity
(megawatt-hours) supplied by the electric utility to
eligible retail customers in the planning year ending
immediately prior to the agreement's execution. For
purposes of this subsection (d), the amount paid per
kilowatthour means the total amount paid for electric
service expressed on a per kilowatthour basis. For purposes
of this subsection (d), the total amount paid for electric
service includes without limitation amounts paid for
supply, transmission, distribution, surcharges and add-on
taxes.
Notwithstanding the requirements of this subsection
(d), the total amount paid under sourcing agreements with
clean coal facilities pursuant to the procurement plan for
any given year shall be reduced by an amount necessary to
limit the annual estimated average net increase due to the

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costs of these resources included in the amounts paid by
eligible retail customers in connection with electric
service to:
(A) in 2010, no more than 0.5% of the amount paid
per kilowatthour by those customers during the year
ending May 31, 2009;
(B) in 2011, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2010 or 1% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009;
(C) in 2012, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2011 or 1.5% of the
amount paid per kilowatthour by those customers during
the year ending May 31, 2009;
(D) in 2013, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2012 or 2% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009; and
(E) thereafter, the total amount paid under
sourcing agreements with clean coal facilities
pursuant to the procurement plan for any single year
shall be reduced by an amount necessary to limit the
estimated average net increase due to the cost of these

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resources included in the amounts paid by eligible
retail customers in connection with electric service
to no more than the greater of (i) 2.015% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009 or (ii) the incremental amount
per kilowatthour paid for these resources in 2013.
These requirements may be altered only as provided by
statute.
No later than June 30, 2015, the Commission shall
review the limitation on the total amount paid under
sourcing agreements, if any, with clean coal facilities
pursuant to this subsection (d) and report to the General
Assembly its findings as to whether that limitation unduly
constrains the amount of electricity generated by
cost-effective clean coal facilities that is covered by
sourcing agreements.
(3) Initial clean coal facility. In order to promote
development of clean coal facilities in Illinois, each
electric utility subject to this Section shall execute a
sourcing agreement to source electricity from a proposed
clean coal facility in Illinois (the "initial clean coal
facility") that will have a nameplate capacity of at least
500 MW when commercial operation commences, that has a
final Clean Air Act permit on the effective date of this
amendatory Act of the 95th General Assembly, and that will
meet the definition of clean coal facility in Section 1-10

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of this Act when commercial operation commences. The
sourcing agreements with this initial clean coal facility
shall be subject to both approval of the initial clean coal
facility by the General Assembly and satisfaction of the
requirements of paragraph (4) of this subsection (d) and
shall be executed within 90 days after any such approval by
the General Assembly. The Agency and the Commission shall
have authority to inspect all books and records associated
with the initial clean coal facility during the term of
such a sourcing agreement. A utility's sourcing agreement
for electricity produced by the initial clean coal facility
shall include:
(A) a formula contractual price (the "contract
price") approved pursuant to paragraph (4) of this
subsection (d), which shall:
(i) be determined using a cost of service
methodology employing either a level or deferred
capital recovery component, based on a capital
structure consisting of 45% equity and 55% debt,
and a return on equity as may be approved by the
Federal Energy Regulatory Commission, which in any
case may not exceed the lower of 11.5% or the rate
of return approved by the General Assembly
pursuant to paragraph (4) of this subsection (d);
and
(ii) provide that all miscellaneous net

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revenue, including but not limited to net revenue
from the sale of emission allowances, if any,
substitute natural gas, if any, grants or other
support provided by the State of Illinois or the
United States Government, firm transmission
rights, if any, by-products produced by the
facility, energy or capacity derived from the
facility and not covered by a sourcing agreement
pursuant to paragraph (3) of this subsection (d) or
item (5) of subsection (d) of Section 16-115 of the
Public Utilities Act, whether generated from the
synthesis gas derived from coal, from SNG, or from
natural gas, shall be credited against the revenue
requirement for this initial clean coal facility;
(B) power purchase provisions, which shall:
(i) provide that the utility party to such
sourcing agreement shall pay the contract price
for electricity delivered under such sourcing
agreement;
(ii) require delivery of electricity to the
regional transmission organization market of the
utility that is party to such sourcing agreement;
(iii) require the utility party to such
sourcing agreement to buy from the initial clean
coal facility in each hour an amount of energy
equal to all clean coal energy made available from

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the initial clean coal facility during such hour
times a fraction, the numerator of which is such
utility's retail market sales of electricity
(expressed in kilowatthours sold) in the State
during the prior calendar month and the
denominator of which is the total retail market
sales of electricity (expressed in kilowatthours
sold) in the State by utilities during such prior
month and the sales of electricity (expressed in
kilowatthours sold) in the State by alternative
retail electric suppliers during such prior month
that are subject to the requirements of this
subsection (d) and paragraph (5) of subsection (d)
of Section 16-115 of the Public Utilities Act,
provided that the amount purchased by the utility
in any year will be limited by paragraph (2) of
this subsection (d); and
(iv) be considered pre-existing contracts in
such utility's procurement plans for eligible
retail customers;
(C) contract for differences provisions, which
shall:
(i) require the utility party to such sourcing
agreement to contract with the initial clean coal
facility in each hour with respect to an amount of
energy equal to all clean coal energy made

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available from the initial clean coal facility
during such hour times a fraction, the numerator of
which is such utility's retail market sales of
electricity (expressed in kilowatthours sold) in
the utility's service territory in the State
during the prior calendar month and the
denominator of which is the total retail market
sales of electricity (expressed in kilowatthours
sold) in the State by utilities during such prior
month and the sales of electricity (expressed in
kilowatthours sold) in the State by alternative
retail electric suppliers during such prior month
that are subject to the requirements of this
subsection (d) and paragraph (5) of subsection (d)
of Section 16-115 of the Public Utilities Act,
provided that the amount paid by the utility in any
year will be limited by paragraph (2) of this
subsection (d);
(ii) provide that the utility's payment
obligation in respect of the quantity of
electricity determined pursuant to the preceding
clause (i) shall be limited to an amount equal to
(1) the difference between the contract price
determined pursuant to subparagraph (A) of
paragraph (3) of this subsection (d) and the
day-ahead price for electricity delivered to the

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regional transmission organization market of the
utility that is party to such sourcing agreement
(or any successor delivery point at which such
utility's supply obligations are financially
settled on an hourly basis) (the "reference
price") on the day preceding the day on which the
electricity is delivered to the initial clean coal
facility busbar, multiplied by (2) the quantity of
electricity determined pursuant to the preceding
clause (i); and
(iii) not require the utility to take physical
delivery of the electricity produced by the
facility;
(D) general provisions, which shall:
(i) specify a term of no more than 30 years,
commencing on the commercial operation date of the
facility;
(ii) provide that utilities shall maintain
adequate records documenting purchases under the
sourcing agreements entered into to comply with
this subsection (d) and shall file an accounting
with the load forecast that must be filed with the
Agency by July 15 of each year, in accordance with
subsection (d) of Section 16-111.5 of the Public
Utilities Act;
(iii) provide that all costs associated with

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the initial clean coal facility will be
periodically reported to the Federal Energy
Regulatory Commission and to purchasers in
accordance with applicable laws governing
cost-based wholesale power contracts;
(iv) permit the Illinois Power Agency to
assume ownership of the initial clean coal
facility, without monetary consideration and
otherwise on reasonable terms acceptable to the
Agency, if the Agency so requests no less than 3
years prior to the end of the stated contract term;
(v) require the owner of the initial clean coal
facility to provide documentation to the
Commission each year, starting in the facility's
first year of commercial operation, accurately
reporting the quantity of carbon emissions from
the facility that have been captured and
sequestered and report any quantities of carbon
released from the site or sites at which carbon
emissions were sequestered in prior years, based
on continuous monitoring of such sites. If, in any
year after the first year of commercial operation,
the owner of the facility fails to demonstrate that
the initial clean coal facility captured and
sequestered at least 50% of the total carbon
emissions that the facility would otherwise emit

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or that sequestration of emissions from prior
years has failed, resulting in the release of
carbon dioxide into the atmosphere, the owner of
the facility must offset excess emissions. Any
such carbon offsets must be permanent, additional,
verifiable, real, located within the State of
Illinois, and legally and practicably enforceable.
The cost of such offsets for the facility that are
not recoverable shall not exceed $15 million in any
given year. No costs of any such purchases of
carbon offsets may be recovered from a utility or
its customers. All carbon offsets purchased for
this purpose and any carbon emission credits
associated with sequestration of carbon from the
facility must be permanently retired. The initial
clean coal facility shall not forfeit its
designation as a clean coal facility if the
facility fails to fully comply with the applicable
carbon sequestration requirements in any given
year, provided the requisite offsets are
purchased. However, the Attorney General, on
behalf of the People of the State of Illinois, may
specifically enforce the facility's sequestration
requirement and the other terms of this contract
provision. Compliance with the sequestration
requirements and offset purchase requirements

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specified in paragraph (3) of this subsection (d)
shall be reviewed annually by an independent
expert retained by the owner of the initial clean
coal facility, with the advance written approval
of the Attorney General. The Commission may, in the
course of the review specified in item (vii),
reduce the allowable return on equity for the
facility if the facility wilfully fails to comply
with the carbon capture and sequestration
requirements set forth in this item (v);
(vi) include limits on, and accordingly
provide for modification of, the amount the
utility is required to source under the sourcing
agreement consistent with paragraph (2) of this
subsection (d);
(vii) require Commission review: (1) to
determine the justness, reasonableness, and
prudence of the inputs to the formula referenced in
subparagraphs (A)(i) through (A)(iii) of paragraph
(3) of this subsection (d), prior to an adjustment
in those inputs including, without limitation, the
capital structure and return on equity, fuel
costs, and other operations and maintenance costs
and (2) to approve the costs to be passed through
to customers under the sourcing agreement by which
the utility satisfies its statutory obligations.

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Commission review shall occur no less than every 3
years, regardless of whether any adjustments have
been proposed, and shall be completed within 9
months;
(viii) limit the utility's obligation to such
amount as the utility is allowed to recover through
tariffs filed with the Commission, provided that
neither the clean coal facility nor the utility
waives any right to assert federal pre-emption or
any other argument in response to a purported
disallowance of recovery costs;
(ix) limit the utility's or alternative retail
electric supplier's obligation to incur any
liability until such time as the facility is in
commercial operation and generating power and
energy and such power and energy is being delivered
to the facility busbar;
(x) provide that the owner or owners of the
initial clean coal facility, which is the
counterparty to such sourcing agreement, shall
have the right from time to time to elect whether
the obligations of the utility party thereto shall
be governed by the power purchase provisions or the
contract for differences provisions;
(xi) append documentation showing that the
formula rate and contract, insofar as they relate

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to the power purchase provisions, have been
approved by the Federal Energy Regulatory
Commission pursuant to Section 205 of the Federal
Power Act;
(xii) provide that any changes to the terms of
the contract, insofar as such changes relate to the
power purchase provisions, are subject to review
under the public interest standard applied by the
Federal Energy Regulatory Commission pursuant to
Sections 205 and 206 of the Federal Power Act; and
(xiii) conform with customary lender
requirements in power purchase agreements used as
the basis for financing non-utility generators.
(4) Effective date of sourcing agreements with the
initial clean coal facility.
Any proposed sourcing agreement with the initial clean
coal facility shall not become effective unless the
following reports are prepared and submitted and
authorizations and approvals obtained:
(i) Facility cost report. The owner of the initial
clean coal facility shall submit to the Commission, the
Agency, and the General Assembly a front-end
engineering and design study, a facility cost report,
method of financing (including but not limited to
structure and associated costs), and an operating and
maintenance cost quote for the facility (collectively

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"facility cost report"), which shall be prepared in
accordance with the requirements of this paragraph (4)
of subsection (d) of this Section, and shall provide
the Commission and the Agency access to the work
papers, relied upon documents, and any other backup
documentation related to the facility cost report.
(ii) Commission report. Within 6 months following
receipt of the facility cost report, the Commission, in
consultation with the Agency, shall submit a report to
the General Assembly setting forth its analysis of the
facility cost report. Such report shall include, but
not be limited to, a comparison of the costs associated
with electricity generated by the initial clean coal
facility to the costs associated with electricity
generated by other types of generation facilities, an
analysis of the rate impacts on residential and small
business customers over the life of the sourcing
agreements, and an analysis of the likelihood that the
initial clean coal facility will commence commercial
operation by and be delivering power to the facility's
busbar by 2016. To assist in the preparation of its
report, the Commission, in consultation with the
Agency, may hire one or more experts or consultants,
the costs of which shall be paid for by the owner of
the initial clean coal facility. The Commission and
Agency may begin the process of selecting such experts

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or consultants prior to receipt of the facility cost
report.
(iii) General Assembly approval. The proposed
sourcing agreements shall not take effect unless,
based on the facility cost report and the Commission's
report, the General Assembly enacts authorizing
legislation approving (A) the projected price, stated
in cents per kilowatthour, to be charged for
electricity generated by the initial clean coal
facility, (B) the projected impact on residential and
small business customers' bills over the life of the
sourcing agreements, and (C) the maximum allowable
return on equity for the project; and
(iv) Commission review. If the General Assembly
enacts authorizing legislation pursuant to
subparagraph (iii) approving a sourcing agreement, the
Commission shall, within 90 days of such enactment,
complete a review of such sourcing agreement. During
such time period, the Commission shall implement any
directive of the General Assembly, resolve any
disputes between the parties to the sourcing agreement
concerning the terms of such agreement, approve the
form of such agreement, and issue an order finding that
the sourcing agreement is prudent and reasonable.
The facility cost report shall be prepared as follows:
(A) The facility cost report shall be prepared by

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duly licensed engineering and construction firms
detailing the estimated capital costs payable to one or
more contractors or suppliers for the engineering,
procurement and construction of the components
comprising the initial clean coal facility and the
estimated costs of operation and maintenance of the
facility. The facility cost report shall include:
(i) an estimate of the capital cost of the core
plant based on one or more front end engineering
and design studies for the gasification island and
related facilities. The core plant shall include
all civil, structural, mechanical, electrical,
control, and safety systems.
(ii) an estimate of the capital cost of the
balance of the plant, including any capital costs
associated with sequestration of carbon dioxide
emissions and all interconnects and interfaces
required to operate the facility, such as
transmission of electricity, construction or
backfeed power supply, pipelines to transport
substitute natural gas or carbon dioxide, potable
water supply, natural gas supply, water supply,
water discharge, landfill, access roads, and coal
delivery.
The quoted construction costs shall be expressed
in nominal dollars as of the date that the quote is

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prepared and shall include capitalized financing costs
during construction, taxes, insurance, and other
owner's costs, and an assumed escalation in materials
and labor beyond the date as of which the construction
cost quote is expressed.
(B) The front end engineering and design study for
the gasification island and the cost study for the
balance of plant shall include sufficient design work
to permit quantification of major categories of
materials, commodities and labor hours, and receipt of
quotes from vendors of major equipment required to
construct and operate the clean coal facility.
(C) The facility cost report shall also include an
operating and maintenance cost quote that will provide
the estimated cost of delivered fuel, personnel,
maintenance contracts, chemicals, catalysts,
consumables, spares, and other fixed and variable
operations and maintenance costs. The delivered fuel
cost estimate will be provided by a recognized third
party expert or experts in the fuel and transportation
industries. The balance of the operating and
maintenance cost quote, excluding delivered fuel
costs, will be developed based on the inputs provided
by duly licensed engineering and construction firms
performing the construction cost quote, potential
vendors under long-term service agreements and plant

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operating agreements, or recognized third party plant
operator or operators.
The operating and maintenance cost quote
(including the cost of the front end engineering and
design study) shall be expressed in nominal dollars as
of the date that the quote is prepared and shall
include taxes, insurance, and other owner's costs, and
an assumed escalation in materials and labor beyond the
date as of which the operating and maintenance cost
quote is expressed.
(D) The facility cost report shall also include an
analysis of the initial clean coal facility's ability
to deliver power and energy into the applicable
regional transmission organization markets and an
analysis of the expected capacity factor for the
initial clean coal facility.
(E) Amounts paid to third parties unrelated to the
owner or owners of the initial clean coal facility to
prepare the core plant construction cost quote,
including the front end engineering and design study,
and the operating and maintenance cost quote will be
reimbursed through Coal Development Bonds.
(5) Re-powering and retrofitting coal-fired power
plants previously owned by Illinois utilities to qualify as
clean coal facilities. During the 2009 procurement
planning process and thereafter, the Agency and the

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Commission shall consider sourcing agreements covering
electricity generated by power plants that were previously
owned by Illinois utilities and that have been or will be
converted into clean coal facilities, as defined by Section
1-10 of this Act. Pursuant to such procurement planning
process, the owners of such facilities may propose to the
Agency sourcing agreements with utilities and alternative
retail electric suppliers required to comply with
subsection (d) of this Section and item (5) of subsection
(d) of Section 16-115 of the Public Utilities Act, covering
electricity generated by such facilities. In the case of
sourcing agreements that are power purchase agreements,
the contract price for electricity sales shall be
established on a cost of service basis. In the case of
sourcing agreements that are contracts for differences,
the contract price from which the reference price is
subtracted shall be established on a cost of service basis.
The Agency and the Commission may approve any such utility
sourcing agreements that do not exceed cost-based
benchmarks developed by the procurement administrator, in
consultation with the Commission staff, Agency staff and
the procurement monitor, subject to Commission review and
approval. The Commission shall have authority to inspect
all books and records associated with these clean coal
facilities during the term of any such contract.
(6) Costs incurred under this subsection (d) or

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pursuant to a contract entered into under this subsection
(d) shall be deemed prudently incurred and reasonable in
amount and the electric utility shall be entitled to full
cost recovery pursuant to the tariffs filed with the
Commission.
(d-5) Diverse energy portfolio standard.
(1) Beginning in planning year 2020 and each planning
year thereafter, the procurement plans shall include
electricity generated by qualified clean coal facilities.
Each utility shall enter into one or more sourcing
agreements with qualified clean coal facilities. It is the
goal of the State that, by June 1, 2020, each utility shall
enter into sourcing agreements with qualified clean coal
facilities covering electricity generated by qualified
clean coal facilities representing at least 40% of each
utility's annual retail sales of electricity to retail
customers in the State during the planning year immediately
prior to the development of a procurement plan, subject to
the limits specified in paragraph (3) of this subsection
(d-5). The percentage required to be procured by a utility
under this subsection (d-5) shall be reduced by the
percentage of clean coal procured by the utility under a
sourcing agreement under subsection (d) of this Act.
Utilities shall maintain adequate records documenting
the purchases under the sourcing agreement to comply with
this subsection (d-5) and shall file an accounting with the

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load forecast that must be filed with the Agency by July 15
of each year, under subsection (d) of Section 16-111.5 of
the Public Utilities Act.
A utility shall be deemed to have complied with the
diverse energy portfolio standard specified in this
subsection (d-5) if the utility enters into a sourcing
agreement as required by this subsection (d-5).
(2) For the purposes of this subsection (d-5), the
required execution of sourcing agreements for a particular
year shall be measured as a percentage of the actual amount
of electricity (megawatt-hours) supplied by the electric
utility to all retail customers in the planning year ending
immediately prior to the agreement's execution. For
purposes of this subsection (d-5), 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-5), the total amount paid for
electric service includes without limitation amounts paid
for supply, transmission, distribution, surcharges, and
add-on taxes.
(3) Notwithstanding the requirements of this
subsection (d-5), the total procured from qualified clean
coal facilities under the procurement plan for any single
year shall be subject to the limitations of this paragraph
(3). The procurement shall be reduced for all retail
customers based on the amount necessary to limit the annual

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estimated average net increase due to the costs of
electricity generated by a qualified clean coal facility
included in the amounts paid by all retail customers in
connection with electric service to no more than 2.015% of
the amount paid per kilowatthour by all retail customers
during the year ending May 31, 2009. This requirement may
be altered only as provided in statute.
(4) Costs incurred under this subsection (d-5) or under
a contract entered into under this subsection (d-5) shall
be deemed prudently incurred and reasonable in amount and
the electric utility shall be entitled to full cost
recovery under the tariffs filed with the Commission.
(e) The draft procurement plans are subject to public
comment, as required by Section 16-111.5 of the Public
Utilities Act.
(f) The Agency shall submit the final procurement plan to
the Commission. The Agency shall revise a procurement plan if
the Commission determines that it does not meet the standards
set forth in Section 16-111.5 of the Public Utilities Act.
(g) The Agency shall assess fees to each affected utility
to recover the costs incurred in preparation of the annual
procurement plan for the utility.
(h) The Agency shall assess fees to each bidder to recover
the costs incurred in connection with a competitive procurement
process.
(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;

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97-618, eff. 10-26-11; 97-658, eff. 1-13-12; 97-813, eff.
7-13-12; 98-463, eff. 8-16-13.)
Section 5-35. The Public Utilities Act is amended by
changing Sections 16-111.5 and 16-115 as follows:
(220 ILCS 5/16-111.5)
Sec. 16-111.5. Provisions relating to procurement.
(a) An electric utility that on December 31, 2005 served at
least 100,000 customers in Illinois shall procure power 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 beginning with the 2020
planning year, shall procure electricity generated by
qualified clean coal facilities for all retail customers in its
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

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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 Section, including self-generating customers, customers
electing hourly pricing, or those customers who are otherwise
ineligible for fixed-price bundled tariff service. Those
customers that are excluded from the definition of "eligible
retail customers" shall not be included in the procurement plan
load requirements, and the utility shall procure any supply
requirements, including capacity, ancillary services, 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

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single electric utility. Small multi-jurisdictional utilities
may request a procurement plan for a portion of or all of its
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;

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(iii) known or projected changes to future loads;
and
(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

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this Act. The cost-effective demand-response measures
shall be procured whenever the cost is lower than
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) monthly forecasted system supply
requirements, including expected minimum, maximum, and
average values for the planning period;

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(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
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;
(v) proposed term structures for each wholesale
product type included in the proposed procurement plan
portfolio of products; and
(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

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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
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;

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(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
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

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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
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

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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
scenario for the load of the eligible retail customers. 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 and power and energy products to be
procured. Cost-effective demand-response measures shall be
procured as set forth in item (iii) 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 detailed analyses,

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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
price stability.

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(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,
shall develop and provide standard contract forms for the

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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
difference. The price benchmarks may also be adjusted to

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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
term. If both of these conditions are met, and the

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default results in termination of the contract, the
utility shall immediately notify the Illinois Power
Agency that a request for proposals must be issued to
procure replacement power, 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 power and energy from the
applicable regional transmission organization market,
including ancillary services, capacity, 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
meet within 10 days to analyze potential causes of low
supplier interest or causes for the Commission

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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.
(6) The procurement process described in this
subsection is exempt from the requirements of the Illinois

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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. 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 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.

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(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,
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.

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(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
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

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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
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

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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
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

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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
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)

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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.
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 and energy demand-response resources under

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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 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

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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.
(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 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

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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
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)

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Sec. 16-115. Certification of alternative retail electric
suppliers.
(a) Any alternative retail electric supplier must obtain a
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

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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
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

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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
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,
and will source electricity from qualified clean coal
facilities as defined in Section 1-10 of the Illinois Power
Agency Act in amounts at least equal to the percentages set
forth in subsections (c), and (d), and (d-5) of Section
1-75 of the Illinois Power Agency Act. For purposes of this
Section:
(i) (Blank);
(ii) (Blank);
(iii) the required sourcing of electricity
generated by clean coal facilities, other than the

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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), and item (1) of subsection (d-5) of Section 1-75
of the Illinois Power Agency Act;
(iv) all alternative retail electric suppliers
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, except that in lieu of the requirements in
subparagraphs (A)(v), (B)(i), (C)(v), and (C)(vi) of
paragraph (3) of that subsection (d), 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

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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
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

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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;
(v) 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

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in any given year. No costs of any such purchases of
carbon offsets may be recovered from an alternative
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 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 this

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initial clean coal facility shall be subject to both
approval of the initial clean coal facility by the
General Assembly and satisfaction of the requirements
of item (4) of subsection (d) of Section 1-75 of the
Illinois Power Agency Act, and shall be executed within
90 days after any such approval by the General
Assembly. The Commission shall not accept an
application for certification from an alternative
retail electric supplier that has lost certification
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

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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
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

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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
the services to be provided; and experience in providing
similar services in other jurisdictions.
(g) An alternative retail electric supplier may seek
confidential treatment for the following information by filing
an affidavit with the Commission so long as the affidavit meets
the requirements in this subsection (g):
(1) the total annual kilowatt-hours delivered and sold
by an alternative retail electric supplier to retail
customers within each utility service territory and the
total annual kilowatt-hours delivered and sold by an
alternative retail electric supplier to retail customers
in all utility service territories in the preceding
calendar year as required by 83 Ill. Adm. Code 451.770;
(2) the total peak demand supplied by an alternative
retail electric supplier during the previous year in each
utility service territory as required by 83 Ill. Adm. Code
465.40;

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(3) a good faith estimate of the amount an alternative
retail electric supplier expects to be obliged to pay the
utility under single billing tariffs during the next 12
months and the amount of any bond or letter of credit used
to demonstrate an alternative retail electric supplier's
credit worthiness to provide single billing services
pursuant to 83 Ill. Adm. Code 451.510(a) and (b).
The affidavit must be filed contemporaneously with the
information for which confidential treatment is sought and must
clearly state that the affiant seeks confidential treatment
pursuant to this subsection (g) and the information for which
confidential treatment is sought must be clearly identified on
the confidential version of the document filed with the
Commission. The affidavit must be accompanied by a
"confidential" and a "public" version of the document or
documents containing the information for which confidential
treatment is sought.
If the alternative retail electric supplier has met the
affidavit requirements of this subsection (g), then the
Commission shall afford confidential treatment to the
information identified in the affidavit for a period of 2 years
after the date the affidavit is received by the Commission.
Nothing in this subsection (g) prevents an alternative
retail electric supplier from filing a petition with the
Commission seeking confidential treatment for information
beyond that identified in this subsection (g) or for

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information contained in other reports or documents filed with
the Commission.
Nothing in this subsection (g) prevents the Commission, on
its own motion, or any party from filing a formal petition with
the Commission seeking to reconsider the conferring of
confidential status on an item of information afforded
confidential treatment pursuant to this subsection (g).
The Commission, on its own motion, may at any time initiate
a docketed proceeding to investigate the continued
applicability of this subsection (g) to the information
contained in items (i), (ii), and (iii) of this subsection (g).
If, at the end of such investigation, the Commission determines
that a particular item of information should no longer be
eligible for the affidavit-based process outlined in this
subsection (g), the Commission may enter an order to remove
that item from the list of items eligible for the process set
forth in this subsection (g). Notwithstanding any such order,
in the event the Commission makes such a determination, nothing
in this subsection (g) prevents an alternative retail electric
supplier desiring confidential treatment for such information
from filing a formal petition with the Commission seeking
confidential treatment for such information.
(Source: P.A. 99-332, eff. 8-10-15.)
Section 5-40. The State Finance Act is amended by adding
Section 5.875 as follows:

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(30 ILCS 105/5.875 new)
Sec. 5.875. The Clean Coal Technology Development and
Utilization Fund.