Bill Text: IL HB3115 | 2021-2022 | 102nd General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Creates the Renewable Gas and Low-Carbon Fuels Act. Provides that a public utility that provides natural gas distribution services in the State shall incorporate low-carbon fuels into its gas supply portfolio. Provides for goals for the total amount of renewable gas and other low-carbon fuels incorporated by the natural gas utility. Provides that for purposes of meeting the goals, low-carbon fuels that are purchased by the natural gas utility must include environmental commodities associated with the gas. Provides that a natural gas utility may seek authorization from the Illinois Commerce Commission to engage in low-carbon fuels activities. Provides that the Commission shall approve a low-carbon fuels activity if it determines the low-carbon fuels activity investment and expenses are consistent with the provisions of the Act and the natural gas utility has demonstrated that the low-carbon fuels activity provides one or more specified benefits. Provides that the Commission shall review and, by order, approve, or approve as modified, the natural gas utility's low-carbon fuels activity proposal within 180 days after the date on which it is filed. Provides that the Commission shall adopt rules governing filing requirements, reporting requirements, and the process for natural gas utilities to fully recover prudently incurred costs associated with low-carbon fuels activity. Provides that all environmental commodities from low-carbon fuels resulting from the purchase of low-carbon fuels for gas supply or the ownership of a low-carbon fuels facility shall be applied to the benefit of gas customers. Amends the Illinois Administrative Procedure Act to allow the Illinois Commerce Commission to adopt emergency rules. Effective immediately.

Spectrum: Moderate Partisan Bill (Democrat 4-1)

Status: (Introduced) 2021-04-23 - Rule 19(a) / Re-referred to Rules Committee [HB3115 Detail]

Download: Illinois-2021-HB3115-Introduced.html


102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3115

Introduced , by Rep. Eva Dina Delgado

SYNOPSIS AS INTRODUCED:
New Act
5 ILCS 100/5-45.8 new

Creates the Renewable Gas and Low-Carbon Fuels Act. Provides that a public utility that provides natural gas distribution services in the State shall incorporate low-carbon fuels into its gas supply portfolio. Provides for goals for the total amount of renewable gas and other low-carbon fuels incorporated by the natural gas utility. Provides that for purposes of meeting the goals, low-carbon fuels that are purchased by the natural gas utility must include environmental commodities associated with the gas. Provides that a natural gas utility may seek authorization from the Illinois Commerce Commission to engage in low-carbon fuels activities. Provides that the Commission shall approve a low-carbon fuels activity if it determines the low-carbon fuels activity investment and expenses are consistent with the provisions of the Act and the natural gas utility has demonstrated that the low-carbon fuels activity provides one or more specified benefits. Provides that the Commission shall review and, by order, approve, or approve as modified, the natural gas utility's low-carbon fuels activity proposal within 180 days after the date on which it is filed. Provides that the Commission shall adopt rules governing filing requirements, reporting requirements, and the process for natural gas utilities to fully recover prudently incurred costs associated with low-carbon fuels activity. Provides that all environmental commodities from low-carbon fuels resulting from the purchase of low-carbon fuels for gas supply or the ownership of a low-carbon fuels facility shall be applied to the benefit of gas customers. Amends the Illinois Administrative Procedure Act to allow the Illinois Commerce Commission to adopt emergency rules. Effective immediately.
LRB102 14890 SPS 20243 b

A BILL FOR

HB3115LRB102 14890 SPS 20243 b
1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5Renewable Gas and Low-Carbon Fuels Act.
6 Section 5. Findings. The General Assembly finds the
7following:
8 (1) Natural gas provides the citizens and businesses
9 of the State a safe, reliable, and affordable source of
10 energy.
11 (2) As Illinois transitions to a low-carbon energy
12 economy, alternative low-carbon energy carriers that can
13 support the needs of energy storage, resiliency, and
14 emissions reductions are essential.
15 (3) Hydrogen, or its derivatives, has significant
16 potential as a low-carbon energy carrier. Hydrogen is a
17 storable gas with high energy density and zero CO2
18 emissions at the point of use. Hydrogen can be produced in
19 a variety of low-carbon or no-carbon methods.
20 (4) Methane emissions from organic waste are a
21 powerful greenhouse gas with approximately 25 times the
22 global warming potential of carbon dioxide.
23 (5) These methane emissions that would otherwise enter

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1 the Earth's atmosphere, or non-beneficially flared, can be
2 captured and converted to renewable gas to create a fuel
3 compatible with natural gas utility systems that is
4 considered carbon-neutral and under certain circumstances
5 can be carbon-negative.
6 (7) Constructing a renewable gas production facility
7 to capture this methane from organic waste or other
8 renewable resources for use by the utility or its
9 customers has the added benefit of displacing geologic
10 natural gas, thus integrating and beneficially using what
11 would otherwise be waste methane and reducing the State's
12 carbon footprint, among other environmental benefits.
13 (8) Encouraging the gas utility industry to undertake
14 certain physical plant investments will promote the
15 development of the renewable gas and other low-carbon
16 fuels industry which, in turn, will create economic
17 activity and jobs in this State while also improving the
18 environment.
19 (9) Including renewable gas and other low-carbon fuels
20 resources in a natural gas utility's supply portfolio is a
21 cost effective way to provide beneficial environmental
22 impacts utilizing the natural gas utility infrastructure.
23 (10) The development of renewable gas and other
24 low-carbon fuels resources serves the public interest and
25 should be encouraged to leverage the natural gas system to
26 reduce greenhouse gas emissions and support a smooth

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1 transition to a low-carbon energy economy in Illinois.
2 Section 10. Definitions. As used in this Act:
3 "Biogas" means a mixture consisting of primarily methane
4and carbon dioxide that is released from the biological
5decomposition or conversion of organic materials, including,
6without limitation, biomass, manure, plant material, sewage,
7and landfill waste.
8 "Biomass" has the meaning given that term in subsection
9(d) of Section 16-127 of the Public Utilities Act.
10 "Commission" means the Illinois Commerce Commission.
11 "Environmental commodities" means non-tangible energy
12credits, and any and all current and future rights, credits,
13benefits, air quality credits, methane capture credits,
14renewable energy credits, emission reductions, offsets, and
15allowances, howsoever referred to, associated with the
16capture, production, generation, transportation, use, and
17environmental characteristics of biogas and low-carbon fuels,
18the displacement of fossil-based natural gas for any use
19(including, without limitation, thermal use, electricity
20generation, and use as a transportation fuel), the reduction
21of air pollutants or the avoidance of the emission of any gas,
22chemical or other substance, including, without limitation,
23any similar commodities, whether arising out of international,
24federal, State, or local laws or regulations.
25 "Facility" means a facility or any part of the equipment

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1located at a facility that is used to create biogas, hydrogen,
2low-carbon fuels, methanate hydrogen, or other fuels, gather
3biogas, gather hydrogen, gather low-carbon fuels or other
4sources to make low-carbon fuels, process biogas or other
5sources into low-carbon fuels, inject low-carbon fuels into a
6natural gas pipeline or distribution system or determine the
7constituents of low-carbon fuels before the injection of the
8low-carbon Fuels into a natural gas pipeline or distribution
9system.
10 "Low-carbon fuels" means renewable gas and other
11low-carbon fuels, collectively or interchangeably.
12 "Natural gas utility" means a public utility that provides
13natural gas distribution services in Illinois.
14 "Other low-carbon fuels" means any of the following
15products processed to meet pipeline quality standards or
16transportation fuel grade requirements:
17 (1) hydrogen or other fuels derived from zero-carbon
18 or low-carbon energy sources or from other sources where
19 the CO2 produced is capture and stored; or
20 (2) methane gas derived from hydrogen or other fuels
21 derived from zero-carbon or low-carbon energy sources or
22 from other sources where the CO2 produced is capture and
23 stored.
24 "Renewable energy sources" means hydroelectric,
25geothermal, solar photovoltaic, wind, tidal, wave, biomass, or
26biogas energy sources.

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1 "Renewable gas" means any of the following products
2processed to meet pipeline quality standards or transportation
3fuel grade requirements:
4 (1) biogas;
5 (2) hydrogen derived from renewable energy sources; or
6 (3) methane gas derived from any combination of:
7 (A) biogas;
8 (B) hydrogen derived from renewable energy
9 sources; or
10 (C) carbon dioxide.
11 Section 15. Renewable gas and low-carbon fuels programs.
12 (a) A natural gas utility shall incorporate low-carbon
13fuels into its natural gas supply portfolio. The goals for the
14total amount of renewable gas and other low-carbon fuels
15incorporated by the natural gas utility shall be as follows:
16 (1) by January 1, 2030, not less than 2% of the natural
17 gas utility's total gas supply portfolio (by volume);
18 (2) by January 1, 2035, not less than 3% of the natural
19 gas utility's total gas supply portfolio (by volume).
20 The calculation of the share of the supply portfolio shall
21not include the volume of gas of any type delivered but not
22sold by the natural gas utility.
23 (b) The natural gas utility shall make progress towards
24the goals set forth in this Section prior to the first
25milestone set forth in paragraph (1) of subsection (a). Within

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12 years after the effective date of this Act, the natural gas
2utility shall submit a plan setting forth, as of the date of
3the plan, how it expects to achieve the goals set forth in
4paragraphs (1) and (2) of subsection (a). This plan shall also
5include a description of the natural gas utility's progress
6towards the goals set forth in paragraphs (1) and (2) of
7subsection (a).
8 (c) For purposes of meeting the goals set forth in
9subsection (a), low-carbon fuels that are purchased by the
10natural gas utility must include environmental commodities
11associated with the gas. Nothing in this Section shall be
12interpreted as preventing the gas utility from purchasing
13low-carbon fuels without environmental commodities, although
14such purchases shall not be applicable to meeting the goals
15set forth in subsection (a) of this Section.
16 (d) A natural gas utility may seek authorization from the
17Commission under this Section to engage in low-carbon fuels
18activities, including, without limitation:
19 (1) making a financial investment in a low-carbon
20 fuels facility, including, but not limited to, owning, in
21 whole or in part, and operating a low-carbon fuels
22 facility connected to its distribution system;
23 (2) contracting with a producer of low-carbon fuels to
24 purchase gas supply from a low-carbon fuels facility;
25 (3) extending the transmission or distribution system
26 of the natural gas utility to interconnect with a

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1 low-carbon fuels facility;
2 (4) purchasing gas produced from a low-carbon fuels
3 facility, whether or not the gas has environmental
4 commodities:
5 (A) to incorporate the gas produced from a
6 low-carbon fuels facility into the supply portfolio of
7 the natural gas utility; or
8 (B) to sell the gas produced from a low-carbon
9 fuels facility directly to the customers of the
10 natural gas utility;
11 (5) participating in a State or federal renewable
12 energy program or project if participation in the program
13 or project by the natural gas utility:
14 (A) consists of the purchase or sale of gas
15 produced by a low-carbon fuels facility or
16 environmental commodities by the natural gas utility;
17 and
18 (B) results in a reduction of the cost of gas
19 produced from a low-carbon fuels facility to the
20 customers of the natural gas utility;
21 (6) providing customers of the natural gas utility
22 with the option to purchase gas produced from a low-carbon
23 fuels facility, with or without environmental commodities,
24 directly from the natural gas utility;
25 (7) any other activity which develops sources of
26 low-carbon fuels in this State for the purpose of

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1 providing the environmental benefits to this State noted
2 in subsection (e), creating jobs through the construction
3 and operation of low-carbon fuels facilities in this State
4 or diversifying the supply of energy in this State; or
5 (8) any other prudently incurred investments made by a
6 natural gas utility that contribute to the natural gas
7 utility meeting the targets set forth in subsection (a).
8 (e) The Commission shall approve a low-carbon fuels
9activity pursuant to subsection (d) if it determines the
10low-carbon fuels activity investment and expenses are: (1)
11consistent with the provisions of this Section; and (2) the
12natural gas utility has demonstrated that the low-carbon fuels
13activity provides one or more of the following environmental
14benefits to this State:
15 (1) the reduction or avoidance of emissions of any air
16 pollutant or greenhouse gas in this State;
17 (2) the displacement of geologic natural gas with
18 low-carbon fuels;
19 (3) the reduction or avoidance of any pollutant that
20 could have an adverse impact on the waters of this State;
21 or
22 (4) the alleviation of a local nuisance within this
23 State that is associated with the emission of odors.
24 Investments and costs incurred pursuant to this Section
25shall be deemed prudent and reasonable if the Commission
26determines that the natural gas utility's expenditures are

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1consistent with the provisions of this Section. The Commission
2shall make determinations as to whether the execution of the
3investments and the costs incurred pursuant to this Section
4are reasonable and prudent in the natural gas utility's next
5rate proceeding.
6 (f) The Commission shall review and, by order, approve, or
7approve as modified, the natural gas utility's low-carbon
8fuels activity proposal within 180 days after the date on
9which it is filed. In the event the Commission approves the
10proposed natural gas activity with modifications, the
11Commission's order shall not become a final order subject to
12petitions for rehearing until 15 days after service of same by
13the Commission. The utility shall have 14 days following the
14date of service of the order to notify the Commission in
15writing whether it will accept any modifications so identified
16in the order or whether it has elected not to proceed with the
17proposal. If the utility notifies the Commission that it will
18accept such modifications, the Commission shall issue an
19amended order, without further hearing, within 14 days
20following such notification, approving the proposal as
21modified and such order shall be considered to be a final order
22of the Commission subject to petitions for rehearing and
23appellate procedures.
24 (g) All environmental commodities from low-carbon fuels
25resulting from the purchase of low-carbon fuels for gas supply
26or the ownership of a low-carbon fuels facility shall be

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1applied to the benefit of gas customers by reducing greenhouse
2gas emissions in the State of Illinois through: (1) where
3possible given the nature of the applicable environmental
4commodities, by offsetting direct greenhouse gas emissions
5from gas utility operations, including methane emissions, and
6(2) replacing customer consumption of conventional natural gas
7with low-carbon fuels, or another application that will reduce
8greenhouse gas emissions in the State of Illinois.
9 (h) The cumulative amount of estimated rate impact of the
10low-carbon fuels activities, measured beginning with the date
11of the natural gas utility's most recent delivery service rate
12order, shall not exceed an annual average 2% per year of the
13utility's delivery base rate revenues. Each natural gas
14utility request for authorization from the Commission under
15subsection (d) shall include an estimate of the rate impacts
16associated with the proposed low-carbon fuels activities. If
17the natural gas utility estimates that the incremental rate
18impact of a proposed low-carbon fuels natural gas activity
19causes the natural gas utility to exceed the rate impact
20limits contained in this subsection, the natural gas utility's
21filing shall provide for a curtailment or delay the proposed
22implementation of the low-carbon fuels activity as required to
23maintain rate impacts below the limits set forth in this
24subsection.
25 (i) The Commission shall adopt rules governing filing
26requirements, reporting requirements, and the process for

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1natural gas utilities to fully recover prudently incurred
2costs associated with low-carbon fuels activity described in
3subsection (d). Rules adopted by the Commission under this
4Section may not prohibit an affiliated interest of a natural
5gas utility from making a capital investment in a low-carbon
6fuels production project if the affiliated interest, as
7defined in Section 7-101 of the Public Utilities Act is not a
8public utility. The Commission shall adopt rules pursuant to
9this subsection not later than December 31, 2021.
10 Section 90. The Illinois Administrative Procedure Act is
11amended by adding Section 5-45.8 as follows:
12 (5 ILCS 100/5-45.8 new)
13 Sec. 5-45.8. Emergency rulemaking; Renewable Gas and
14Low-Carbon Fuels Act. To provide for the expeditious and
15timely implementation of the Renewable Gas and Low-Carbon
16Fuels Act, emergency rules implementing the Renewable Gas and
17Low-Carbon Fuels Act may be adopted in accordance with Section
185-45 by the Illinois Commerce Commission. The adoption of
19emergency rules authorized by Section 5-45 and this Section is
20deemed to be necessary for the public interest, safety, and
21welfare.
22 This Section is repealed on January 1, 2027.
23 Section 99. Effective date. This Act takes effect upon
24becoming law.
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