Bill Text: IL HB2875 | 2023-2024 | 103rd General Assembly | Engrossed

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Bill Title: Reinserts the provisions of the introduced bill with the following changes: Makes changes to legislative findings. Provides that the Illinois Commerce Commission shall initiate a proceeding within 6 months (rather than 3 months) after the effective date of the amendatory Act to support the development of pilot thermal energy networks. Provides that within 12 months (rather than 3 months) after the effective date of the amendatory Act, any gas public utility, electric public utility, or combination public utility serving over 100,000 customers shall file with the Commission a petition seeking Commission approval of at least one and no more than 3 proposed pilot thermal energy network projects. Provides that a gas public utility, electric public utility, or combination public utility required to develop any pilot thermal energy network project shall be permitted to recover all reasonable and prudently incurred costs associated with the development, construction, and operation of one or more pilot thermal energy network projects through general rates. Removes provisions amending the Illinois Power Agency Act. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 10-0)

Status: (Engrossed) 2023-05-26 - Rule 3-9(a) / Re-referred to Assignments [HB2875 Detail]

Download: Illinois-2023-HB2875-Engrossed.html

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AN ACT concerning utilities.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be referred to as the
Thermal Energy Network and Jobs Act.
Section 5. Legislative findings and intent.
(a) The General Assembly finds and declares that:
(1) This State has a strong interest in ensuring that
emissions of greenhouse gases from buildings are reduced
because buildings are one of this State's largest sources
of greenhouse gases due to the combustion of fossil fuels
for heating, domestic hot water production, cooking, and
other end uses.
(2) The decarbonization of buildings must be pursued
in a manner that is affordable and accessible, preserves
and creates living-wage jobs, and retains the knowledge
and experience of the existing utility union workforce.
(3) Thermal energy networks have the potential to
decarbonize buildings at the community and utility scale
and help achieve the goals of Public Act 102-662 (also
known as the Climate and Equitable Jobs Act).
(4) Thermal energy networks consist of pipe loops
between multiple buildings and energy sources, which carry

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water and can be connected to by building owners to
support heating and cooling and hot water services.
Building owners can connect to the loops to support water
heating and cooling and hot water services.
(5) Many utilities in this State have been seeking to
develop thermal energy networks but have encountered legal
and regulatory barriers.
(6) This State has a strong interest in ensuring an
adequate supply of reliable electrical power and,
therefore, needs to promote the development of alternative
power sources and take steps to assure reliable
deliverability. Thermal energy networks are highly
efficient because they use and exchange thermal energy
from many underground sources and buildings, including
recycled thermal energy, which minimizes impacts on the
electricity grid.
(7) Access to thermal energy networks has the
potential to reduce the upfront and operating costs of
building electrification for customers.
(8) A utility's access to capital, the utility's
experience with networked infrastructure in public
rights-of-way, and the requirement that the utility serve
all customers positions the utility well to develop and
scale thermal energy networks that are accessible to all
customers and to coordinate the development of thermal
energy networks with any orderly rightsizing of the

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utility gas system.
(9) This State also has an interest in the efficient
and reliable delivery of energy and the energy
infrastructure of the State, which interest is
acknowledged throughout the Public Utilities Act. Utility
corporations and other power suppliers share these
interests and, moreover, have a duty to protect
proprietary interests in the projects they fund. Such
investments of ratepayer resources can be protected by
establishing effective contractor qualification and
performance standards, including requirements for
prevailing wage rates, bona fide apprenticeship criteria,
and project labor agreements.
(10) The construction industry is highly skilled and
labor intensive, and the installation of modern thermal
energy networks involves particularly complex work.
Therefore, effective qualification standards for craft
labor personnel employed on these projects are critically
needed to promote successful project delivery.
(11) Finally, these findings are especially vital now
because the construction industry is experiencing
widespread skill shortages across the country, which are
crippling existing capital projects and threatening
projects planned for the future. The construction of
thermal energy networks will utilize many of the same
skills that the current utility and building trades

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workforces already possess.
(b) It is the intent of the General Assembly that passage
of this Act is for the following purposes:
(1) to remove the legal barriers to utility
development of thermal energy networks and require the
Illinois Commerce Commission, within 90 days after the
effective date of this amendatory Act of the 103rd General
Assembly, to begin to authorize and direct utilities to
immediately commence piloting thermal energy networks in
each and every utility territory;
(2) to direct and authorize the Illinois Commerce
Commission to develop a regulatory structure for utility
thermal energy networks that scales affordable and
accessible building electrification, protects customers,
and balances the role of incumbent monopoly utilities with
other market and public actors;
(3) to promote the successful planning and delivery of
thermal energy networks and protect critical investments
in such projects by requiring the use of appropriate
quality craft labor policies that ensure the development
of and access to an adequate supply of well trained,
highly skilled craft persons needed to support timely,
reliable, high-quality projects;
(4) to promote strong economic development and good
jobs for local residents in the expanding decarbonized
sector by requiring application of progressive State labor

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and employment policies that ensure public utility
investments and related State subsidies create
unparalleled skill training and employment opportunities
for residents in project areas through the use of local
prevailing wage standards and successful, bona fide
apprenticeship programs or project labor agreements that
incorporate prevailing wage and training standards and
provide additional benefits for project owners and
workers; and
(5) to promote the use of preapprenticeship programs
that will fortify and expand existing apprenticeship
programs through systematic outreach efforts to recruit
and assist persons from underrepresented and low income
communities by providing such persons with remedial
education, social services, and unique opportunities for
direct access into high-quality apprenticeship programs
and gainful employment in the growing building
decarbonization workforce.
Section 900. The Public Utilities Act is amended by
changing Sections 3-101 and by adding Sections 3-127, 3-128,
and 8-513 as follows:
(220 ILCS 5/3-101) (from Ch. 111 2/3, par. 3-101)
Sec. 3-101. Definitions. Unless otherwise specified, the
terms set forth in Sections 3-102 through 3-128 3-126 are used

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in this Act as therein defined.
(Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11;
97-813, eff. 7-13-12.)
(220 ILCS 5/3-127 new)
Sec. 3-127. Thermal energy. "Thermal energy" means piped
noncombustible fluids used for transferring heat into and out
of buildings for the purpose of reducing any resultant onsite
greenhouse gas emissions of all types of heating and cooling
processes, including, but not limited to, comfort heating and
cooling, domestic hot water, and refrigeration.
(220 ILCS 5/3-128 new)
Sec. 3-128. Thermal energy network. "Thermal energy
network" means all real estate, fixtures, and personal
property operated, owned, used, or to be used for, in
connection with, or to facilitate a utility-scale distribution
infrastructure project that supplies thermal energy.
(220 ILCS 5/8-513 new)
Sec. 8-513. Pilot thermal energy network development.
(a) The Illinois Commerce Commission shall initiate a
proceeding within 6 months after the effective date of this
amendatory Act of the 103rd General Assembly to support the
development of pilot thermal energy networks. The Commission
shall consider matters in the proceeding, including, but not

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limited to, the appropriate ownership, market, and rate
structures for pilot thermal energy networks and whether the
provision of thermal energy services by thermal network energy
providers is in the public interest.
(b) Within 12 months after the effective date of this
amendatory Act of the 103rd General Assembly, any gas public
utility, electric public utility, or combination public
utility serving over 100,000 customers shall file with the
Commission a petition seeking Commission approval of at least
one and no more than 3 proposed pilot thermal energy network
projects. Designs for the projects should coordinate and
maximize the value of existing State energy efficiency and
weatherization programs and take full advantage of federal
funding opportunities. No later than 18 months after the
effective date of this amendatory Act of the 103rd General
Assembly, the Commission shall enter an order approving,
approving with modification, or rejecting each proposed pilot
thermal energy network project and shall direct the public
utility to implement the pilot thermal energy network projects
as approved or approved as modified. In considering whether to
approve or approve as modified each pilot thermal energy
network project, the Commission shall consider whether the
pilot thermal energy network project is in the public
interest, whether the pilot thermal energy network project
will develop information useful for the Commission in adopting
rules governing thermal energy networks, whether the pilot

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thermal energy network project furthers climate justice and
emissions reduction, whether the pilot thermal energy network
project advances financial and technical approaches to
equitable and affordable building electrification, and whether
the pilot thermal energy network project creates benefits to
customers and society at large, including, but not limited to,
public health benefits in areas with disproportionate
environmental or public health burdens, job retention and
creation, reliability, and increased affordability of
renewable thermal energy options.
(c) If a utility proposes 3 pilot thermal energy network
projects, at least one project shall be proposed in
economically disadvantaged communities and at least one shall
be focused on existing electric heat customers. Each public
utility shall coordinate with other public utilities and
consultants with expertise on successful pilot projects to
ensure that the pilot projects are diverse and designed to
inform the Commission's decisions in the proceeding on the
various ownership, market, and rate structures for thermal
energy networks. The pilot project proposals shall be made
publicly available on the Commission's website.
(d) Any gas public utility, electric public utility, or
combination public utility constructing or operating a
Commission-approved pilot thermal energy network project shall
report to the Commission, on a quarterly basis and until
completion of the pilot thermal energy network project, as

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determined by the Commission, the status of each pilot thermal
energy network project. The Commission shall post and make
publicly available the reports on its website. The report
shall include, but not be limited to:
(1) the stage of development of each pilot project;
(2) the barriers to development;
(3) the number of customers served;
(4) the costs of the pilot project;
(5) the number of jobs retained or created by the
pilot project; and
(6) any other information the Commission deems to be
in the public interest or considers likely to prove useful
or relevant to the rulemaking described in subsection (h).
(e) Any gas public utility, electric public utility, or
combination public utility constructing or operating a
Commission-approved pilot thermal energy network project shall
demonstrate that it has entered into a labor peace agreement
with a bona fide labor organization that is actively engaged
in representing its employees. The labor peace agreement shall
apply to the employees necessary for the ongoing maintenance
and operation of the thermal energy network. The labor peace
agreement shall be an ongoing material condition of
authorization to maintain and operate the thermal energy
networks.
(f) Any contractor or subcontractor that performs work on
a pilot thermal energy network under this Section shall be a

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responsible bidder as described in Section 30-22 of the
Illinois Procurement Code and shall certify that not less than
prevailing wage, as determined under the Prevailing Wage Act,
was or will be paid to employees who are engaged in
construction activities associated with the pilot thermal
energy network project. The contractor or subcontractor shall
submit evidence to the Commission that it complied with the
requirements of this subsection.
(g) For any pending application for a thermal energy
network, the contractor or subcontractor shall submit evidence
that the contractor or subcontractor has entered into a fully
executed project labor agreement with the applicable local
building trades council. The Commission shall not approve any
pending applications until the contractor or subcontractor has
submitted the information required under this subsection.
(h) Within 4 years after the completion of the
construction of all thermal energy network projects under this
Section, the Commission shall adopt rules to, at a minimum:
(1) create fair market access rules for thermal energy
networks to accept thermal energy and that do not increase
greenhouse gas emissions or copollutants;
(2) to the extent it is in the public interest to do
so, exempt small-scale thermal energy networks from active
regulation by the Commission;
(3) promote the training and transition of utility
workers impacted by this amendatory Act of the 103rd

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General Assembly; and
(4) encourage third-party participation and
competition where it will maximize benefits to customers.
(i) A gas public utility, electric public utility, or
combination public utility required to develop any pilot
thermal energy network project under this Section shall be
permitted to recover all reasonable and prudently incurred
costs associated with the development, construction, and
operation of one or more pilot thermal energy network projects
through general rates set pursuant to Section 9-201 or through
rates set in a Multi-Year Rate Plan pursuant to Section
16-108.18.
Section 999. Effective date. This Act takes effect upon
becoming law.