Bill Text: IL HB3687 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Public Utilities Act. Modifies Sections concerning energy efficiency and demand-response measures to require a utility under those Sections to develop a program that provides residential and small commercial customers a rebate for customer investment in technologies which result in at least a 3% reduction in the customers' energy usage from the previous calendar year. Provides accompanying requirements for the developed programs. Effective immediately or on the date that specified provisions of Public Act 99-906 take effect, whichever is later.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2019-01-08 - Session Sine Die [HB3687 Detail]

Download: Illinois-2017-HB3687-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3687

Introduced , by Rep. Kelly M. Burke

SYNOPSIS AS INTRODUCED:
220 ILCS 5/8-103
220 ILCS 5/8-103B
220 ILCS 5/8-104

Amends the Public Utilities Act. Modifies Sections concerning energy efficiency and demand-response measures to require a utility under those Sections to develop a program that provides residential and small commercial customers a rebate for customer investment in technologies which result in at least a 3% reduction in the customers' energy usage from the previous calendar year. Provides accompanying requirements for the developed programs. Effective immediately or on the date that specified provisions of Public Act 99-906 take effect, whichever is later.
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A BILL FOR

HB3687LRB100 06860 RJF 16909 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 5. The Public Utilities Act is amended by changing
5Sections 8-103, 8-103B, and 8-104 as follows:
6 (220 ILCS 5/8-103)
7 (Text of Section before amendment by P.A. 99-906)
8 Sec. 8-103. Energy efficiency and demand-response
9measures.
10 (a) It is the policy of the State that electric utilities
11are required to use cost-effective energy efficiency and
12demand-response measures to reduce delivery load. Requiring
13investment in cost-effective energy efficiency and
14demand-response measures will reduce direct and indirect costs
15to consumers by decreasing environmental impacts and by
16avoiding or delaying the need for new generation, transmission,
17and distribution infrastructure. It serves the public interest
18to allow electric utilities to recover costs for reasonably and
19prudently incurred expenses for energy efficiency and
20demand-response measures. As used in this Section,
21"cost-effective" means that the measures satisfy the total
22resource cost test. The low-income measures described in
23subsection (f)(4) of this Section shall not be required to meet

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1the total resource cost test. For purposes of this Section, the
2terms "energy-efficiency", "demand-response", "electric
3utility", and "total resource cost test" shall have the
4meanings set forth in the Illinois Power Agency Act. For
5purposes of this Section, the amount per kilowatthour means the
6total amount paid for electric service expressed on a per
7kilowatthour basis. For purposes of this Section, the total
8amount paid for electric service includes without limitation
9estimated amounts paid for supply, transmission, distribution,
10surcharges, and add-on-taxes.
11 (b) Electric utilities shall implement cost-effective
12energy efficiency measures to meet the following incremental
13annual energy savings goals:
14 (1) 0.2% of energy delivered in the year commencing
15 June 1, 2008;
16 (2) 0.4% of energy delivered in the year commencing
17 June 1, 2009;
18 (3) 0.6% of energy delivered in the year commencing
19 June 1, 2010;
20 (4) 0.8% of energy delivered in the year commencing
21 June 1, 2011;
22 (5) 1% of energy delivered in the year commencing June
23 1, 2012;
24 (6) 1.4% of energy delivered in the year commencing
25 June 1, 2013;
26 (7) 1.8% of energy delivered in the year commencing

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1 June 1, 2014; and
2 (8) 2% of energy delivered in the year commencing June
3 1, 2015 and each year thereafter.
4 Electric utilities may comply with this subsection (b) by
5meeting the annual incremental savings goal in the applicable
6year or by showing that the total cumulative annual savings
7within a 3-year planning period associated with measures
8implemented after May 31, 2014 was equal to the sum of each
9annual incremental savings requirement from May 31, 2014
10through the end of the applicable year.
11 (c) Electric utilities shall implement cost-effective
12demand-response measures to reduce peak demand by 0.1% over the
13prior year for eligible retail customers, as defined in Section
1416-111.5 of this Act, and for customers that elect hourly
15service from the utility pursuant to Section 16-107 of this
16Act, provided those customers have not been declared
17competitive. This requirement commences June 1, 2008 and
18continues for 10 years.
19 (d) Notwithstanding the requirements of subsections (b)
20and (c) of this Section, an electric utility shall reduce the
21amount of energy efficiency and demand-response measures
22implemented over a 3-year planning period by an amount
23necessary to limit the estimated average annual increase in the
24amounts paid by retail customers in connection with electric
25service due to the cost of those measures to:
26 (1) in 2008, no more than 0.5% of the amount paid per

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1 kilowatthour by those customers during the year ending May
2 31, 2007;
3 (2) in 2009, the greater of an additional 0.5% of the
4 amount paid per kilowatthour by those customers during the
5 year ending May 31, 2008 or 1% of the amount paid per
6 kilowatthour by those customers during the year ending May
7 31, 2007;
8 (3) in 2010, the greater of an additional 0.5% of the
9 amount paid per kilowatthour by those customers during the
10 year ending May 31, 2009 or 1.5% of the amount paid per
11 kilowatthour by those customers during the year ending May
12 31, 2007;
13 (4) in 2011, the greater of an additional 0.5% of the
14 amount paid per kilowatthour by those customers during the
15 year ending May 31, 2010 or 2% of the amount paid per
16 kilowatthour by those customers during the year ending May
17 31, 2007; and
18 (5) thereafter, the amount of energy efficiency and
19 demand-response measures implemented for any single year
20 shall be reduced by an amount necessary to limit the
21 estimated average net increase due to the cost of these
22 measures included in the amounts paid by eligible retail
23 customers in connection with electric service to no more
24 than the greater of 2.015% of the amount paid per
25 kilowatthour by those customers during the year ending May
26 31, 2007 or the incremental amount per kilowatthour paid

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1 for these measures in 2011.
2 No later than June 30, 2011, the Commission shall review
3the limitation on the amount of energy efficiency and
4demand-response measures implemented pursuant to this Section
5and report to the General Assembly its findings as to whether
6that limitation unduly constrains the procurement of energy
7efficiency and demand-response measures.
8 (e) Electric utilities shall be responsible for overseeing
9the design, development, and filing of energy efficiency and
10demand-response plans with the Commission. Electric utilities
11shall implement 100% of the demand-response measures in the
12plans. Electric utilities shall implement 75% of the energy
13efficiency measures approved by the Commission, and may, as
14part of that implementation, outsource various aspects of
15program development and implementation. The remaining 25% of
16those energy efficiency measures approved by the Commission
17shall be implemented by the Department of Commerce and Economic
18Opportunity, and must be designed in conjunction with the
19utility and the filing process. The Department may outsource
20development and implementation of energy efficiency measures.
21A minimum of 10% of the entire portfolio of cost-effective
22energy efficiency measures shall be procured from units of
23local government, municipal corporations, school districts,
24and community college districts. The Department shall
25coordinate the implementation of these measures.
26 The apportionment of the dollars to cover the costs to

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1implement the Department's share of the portfolio of energy
2efficiency measures shall be made to the Department once the
3Department has executed rebate agreements, grants, or
4contracts for energy efficiency measures and provided
5supporting documentation for those rebate agreements, grants,
6and contracts to the utility. The Department is authorized to
7adopt any rules necessary and prescribe procedures in order to
8ensure compliance by applicants in carrying out the purposes of
9rebate agreements for energy efficiency measures implemented
10by the Department made under this Section.
11 The details of the measures implemented by the Department
12shall be submitted by the Department to the Commission in
13connection with the utility's filing regarding the energy
14efficiency and demand-response measures that the utility
15implements.
16 A utility providing approved energy efficiency and
17demand-response measures in the State shall be permitted to
18recover costs of those measures through an automatic adjustment
19clause tariff filed with and approved by the Commission. The
20tariff shall be established outside the context of a general
21rate case. Each year the Commission shall initiate a review to
22reconcile any amounts collected with the actual costs and to
23determine the required adjustment to the annual tariff factor
24to match annual expenditures.
25 Each utility shall include, in its recovery of costs, the
26costs estimated for both the utility's and the Department's

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1implementation of energy efficiency and demand-response
2measures. Costs collected by the utility for measures
3implemented by the Department shall be submitted to the
4Department pursuant to Section 605-323 of the Civil
5Administrative Code of Illinois, shall be deposited into the
6Energy Efficiency Portfolio Standards Fund, and shall be used
7by the Department solely for the purpose of implementing these
8measures. A utility shall not be required to advance any moneys
9to the Department but only to forward such funds as it has
10collected. The Department shall report to the Commission on an
11annual basis regarding the costs actually incurred by the
12Department in the implementation of the measures. Any changes
13to the costs of energy efficiency measures as a result of plan
14modifications shall be appropriately reflected in amounts
15recovered by the utility and turned over to the Department.
16 The portfolio of measures, administered by both the
17utilities and the Department, shall, in combination, be
18designed to achieve the annual savings targets described in
19subsections (b) and (c) of this Section, as modified by
20subsection (d) of this Section.
21 The utility and the Department shall agree upon a
22reasonable portfolio of measures and determine the measurable
23corresponding percentage of the savings goals associated with
24measures implemented by the utility or Department.
25 No utility shall be assessed a penalty under subsection (f)
26of this Section for failure to make a timely filing if that

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1failure is the result of a lack of agreement with the
2Department with respect to the allocation of responsibilities
3or related costs or target assignments. In that case, the
4Department and the utility shall file their respective plans
5with the Commission and the Commission shall determine an
6appropriate division of measures and programs that meets the
7requirements of this Section.
8 If the Department is unable to meet incremental annual
9performance goals for the portion of the portfolio implemented
10by the Department, then the utility and the Department shall
11jointly submit a modified filing to the Commission explaining
12the performance shortfall and recommending an appropriate
13course going forward, including any program modifications that
14may be appropriate in light of the evaluations conducted under
15item (7) of subsection (f) of this Section. In this case, the
16utility obligation to collect the Department's costs and turn
17over those funds to the Department under this subsection (e)
18shall continue only if the Commission approves the
19modifications to the plan proposed by the Department.
20 (f) No later than November 15, 2007, each electric utility
21shall file an energy efficiency and demand-response plan with
22the Commission to meet the energy efficiency and
23demand-response standards for 2008 through 2010. No later than
24October 1, 2010, each electric utility shall file an energy
25efficiency and demand-response plan with the Commission to meet
26the energy efficiency and demand-response standards for 2011

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1through 2013. Every 3 years thereafter, each electric utility
2shall file, no later than September 1, an energy efficiency and
3demand-response plan with the Commission. If a utility does not
4file such a plan by September 1 of an applicable year, it shall
5face a penalty of $100,000 per day until the plan is filed.
6Each utility's plan shall set forth the utility's proposals to
7meet the utility's portion of the energy efficiency standards
8identified in subsection (b) and the demand-response standards
9identified in subsection (c) of this Section as modified by
10subsections (d) and (e), taking into account the unique
11circumstances of the utility's service territory. The
12Commission shall seek public comment on the utility's plan and
13shall issue an order approving or disapproving each plan within
145 months after its submission. If the Commission disapproves a
15plan, the Commission shall, within 30 days, describe in detail
16the reasons for the disapproval and describe a path by which
17the utility may file a revised draft of the plan to address the
18Commission's concerns satisfactorily. If the utility does not
19refile with the Commission within 60 days, the utility shall be
20subject to penalties at a rate of $100,000 per day until the
21plan is filed. This process shall continue, and penalties shall
22accrue, until the utility has successfully filed a portfolio of
23energy efficiency and demand-response measures. Penalties
24shall be deposited into the Energy Efficiency Trust Fund. In
25submitting proposed energy efficiency and demand-response
26plans and funding levels to meet the savings goals adopted by

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1this Act the utility shall:
2 (1) Demonstrate that its proposed energy efficiency
3 and demand-response measures will achieve the requirements
4 that are identified in subsections (b) and (c) of this
5 Section, as modified by subsections (d) and (e).
6 (2) Present specific proposals to implement new
7 building and appliance standards that have been placed into
8 effect.
9 (3) Present estimates of the total amount paid for
10 electric service expressed on a per kilowatthour basis
11 associated with the proposed portfolio of measures
12 designed to meet the requirements that are identified in
13 subsections (b) and (c) of this Section, as modified by
14 subsections (d) and (e).
15 (4) Coordinate with the Department to present a
16 portfolio of energy efficiency measures proportionate to
17 the share of total annual utility revenues in Illinois from
18 households at or below 150% of the poverty level. The
19 energy efficiency programs shall be targeted to households
20 with incomes at or below 80% of area median income.
21 (5) Demonstrate that its overall portfolio of energy
22 efficiency and demand-response measures, not including
23 programs covered by item (4) of this subsection (f), are
24 cost-effective using the total resource cost test and
25 represent a diverse cross-section of opportunities for
26 customers of all rate classes to participate in the

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1 programs.
2 (6) Include a proposed cost-recovery tariff mechanism
3 to fund the proposed energy efficiency and demand-response
4 measures and to ensure the recovery of the prudently and
5 reasonably incurred costs of Commission-approved programs.
6 (7) Provide for an annual independent evaluation of the
7 performance of the cost-effectiveness of the utility's
8 portfolio of measures and the Department's portfolio of
9 measures, as well as a full review of the 3-year results of
10 the broader net program impacts and, to the extent
11 practical, for adjustment of the measures on a
12 going-forward basis as a result of the evaluations. The
13 resources dedicated to evaluation shall not exceed 3% of
14 portfolio resources in any given year.
15 (g) No more than 3% of energy efficiency and
16demand-response program revenue may be allocated for
17demonstration of breakthrough equipment and devices.
18 (h) This Section does not apply to an electric utility that
19on December 31, 2005 provided electric service to fewer than
20100,000 customers in Illinois.
21 (i) If, after 2 years, an electric utility fails to meet
22the efficiency standard specified in subsection (b) of this
23Section, as modified by subsections (d) and (e), it shall make
24a contribution to the Low-Income Home Energy Assistance
25Program. The combined total liability for failure to meet the
26goal shall be $1,000,000, which shall be assessed as follows: a

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1large electric utility shall pay $665,000, and a medium
2electric utility shall pay $335,000. If, after 3 years, an
3electric utility fails to meet the efficiency standard
4specified in subsection (b) of this Section, as modified by
5subsections (d) and (e), it shall make a contribution to the
6Low-Income Home Energy Assistance Program. The combined total
7liability for failure to meet the goal shall be $1,000,000,
8which shall be assessed as follows: a large electric utility
9shall pay $665,000, and a medium electric utility shall pay
10$335,000. In addition, the responsibility for implementing the
11energy efficiency measures of the utility making the payment
12shall be transferred to the Illinois Power Agency if, after 3
13years, or in any subsequent 3-year period, the utility fails to
14meet the efficiency standard specified in subsection (b) of
15this Section, as modified by subsections (d) and (e). The
16Agency shall implement a competitive procurement program to
17procure resources necessary to meet the standards specified in
18this Section as modified by subsections (d) and (e), with costs
19for those resources to be recovered in the same manner as
20products purchased through the procurement plan as provided in
21Section 16-111.5. The Director shall implement this
22requirement in connection with the procurement plan as provided
23in Section 16-111.5.
24 For purposes of this Section, (i) a "large electric
25utility" is an electric utility that, on December 31, 2005,
26served more than 2,000,000 electric customers in Illinois; (ii)

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1a "medium electric utility" is an electric utility that, on
2December 31, 2005, served 2,000,000 or fewer but more than
3100,000 electric customers in Illinois; and (iii) Illinois
4electric utilities that are affiliated by virtue of a common
5parent company are considered a single electric utility.
6 (j) If, after 3 years, or any subsequent 3-year period, the
7Department fails to implement the Department's share of energy
8efficiency measures required by the standards in subsection
9(b), then the Illinois Power Agency may assume responsibility
10for and control of the Department's share of the required
11energy efficiency measures. The Agency shall implement a
12competitive procurement program to procure resources necessary
13to meet the standards specified in this Section, with the costs
14of these resources to be recovered in the same manner as
15provided for the Department in this Section.
16 (k) No electric utility shall be deemed to have failed to
17meet the energy efficiency standards to the extent any such
18failure is due to a failure of the Department or the Agency.
19(Source: P.A. 97-616, eff. 10-26-11; 97-841, eff. 7-20-12;
2098-90, eff. 7-15-13.)
21 (Text of Section after amendment by P.A. 99-906)
22 Sec. 8-103. Energy efficiency and demand-response
23measures.
24 (a) It is the policy of the State that electric utilities
25are required to use cost-effective energy efficiency and

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1demand-response measures to reduce delivery load. Requiring
2investment in cost-effective energy efficiency and
3demand-response measures will reduce direct and indirect costs
4to consumers by decreasing environmental impacts and by
5avoiding or delaying the need for new generation, transmission,
6and distribution infrastructure. It serves the public interest
7to allow electric utilities to recover costs for reasonably and
8prudently incurred expenses for energy efficiency and
9demand-response measures. As used in this Section,
10"cost-effective" means that the measures satisfy the total
11resource cost test. The low-income measures described in
12subsection (f)(4) of this Section shall not be required to meet
13the total resource cost test. For purposes of this Section, the
14terms "energy-efficiency", "demand-response", "electric
15utility", and "total resource cost test" shall have the
16meanings set forth in the Illinois Power Agency Act. For
17purposes of this Section, the amount per kilowatthour means the
18total amount paid for electric service expressed on a per
19kilowatthour basis. For purposes of this Section, the total
20amount paid for electric service includes without limitation
21estimated amounts paid for supply, transmission, distribution,
22surcharges, and add-on-taxes.
23 (a-5) This Section applies to electric utilities serving
24500,000 or less but more than 200,000 retail customers in this
25State. Through December 31, 2017, this Section also applies to
26electric utilities serving more than 500,000 retail customers

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1in the State.
2 (b) Electric utilities shall implement cost-effective
3energy efficiency measures to meet the following incremental
4annual energy savings goals:
5 (1) 0.2% of energy delivered in the year commencing
6 June 1, 2008;
7 (2) 0.4% of energy delivered in the year commencing
8 June 1, 2009;
9 (3) 0.6% of energy delivered in the year commencing
10 June 1, 2010;
11 (4) 0.8% of energy delivered in the year commencing
12 June 1, 2011;
13 (5) 1% of energy delivered in the year commencing June
14 1, 2012;
15 (6) 1.4% of energy delivered in the year commencing
16 June 1, 2013;
17 (7) 1.8% of energy delivered in the year commencing
18 June 1, 2014; and
19 (8) 2% of energy delivered in the year commencing June
20 1, 2015 and each year thereafter.
21 Electric utilities may comply with this subsection (b) by
22meeting the annual incremental savings goal in the applicable
23year or by showing that the total cumulative annual savings
24within a 3-year planning period associated with measures
25implemented after May 31, 2014 was equal to the sum of each
26annual incremental savings requirement from May 31, 2014

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1through the end of the applicable year.
2 (c) Electric utilities shall implement cost-effective
3demand-response measures to reduce peak demand by 0.1% over the
4prior year for eligible retail customers, as defined in Section
516-111.5 of this Act, and for customers that elect hourly
6service from the utility pursuant to Section 16-107 of this
7Act, provided those customers have not been declared
8competitive. This requirement commences June 1, 2008 and
9continues for 10 years.
10 (d) Notwithstanding the requirements of subsections (b)
11and (c) of this Section, an electric utility shall reduce the
12amount of energy efficiency and demand-response measures
13implemented over a 3-year planning period by an amount
14necessary to limit the estimated average annual increase in the
15amounts paid by retail customers in connection with electric
16service due to the cost of those measures to:
17 (1) in 2008, no more than 0.5% of the amount paid per
18 kilowatthour by those customers during the year ending May
19 31, 2007;
20 (2) in 2009, the greater of an additional 0.5% of the
21 amount paid per kilowatthour by those customers during the
22 year ending May 31, 2008 or 1% of the amount paid per
23 kilowatthour by those customers during the year ending May
24 31, 2007;
25 (3) in 2010, the greater of an additional 0.5% of the
26 amount paid per kilowatthour by those customers during the

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1 year ending May 31, 2009 or 1.5% of the amount paid per
2 kilowatthour by those customers during the year ending May
3 31, 2007;
4 (4) in 2011, the greater of an additional 0.5% of the
5 amount paid per kilowatthour by those customers during the
6 year ending May 31, 2010 or 2% of the amount paid per
7 kilowatthour by those customers during the year ending May
8 31, 2007; and
9 (5) thereafter, the amount of energy efficiency and
10 demand-response measures implemented for any single year
11 shall be reduced by an amount necessary to limit the
12 estimated average net increase due to the cost of these
13 measures included in the amounts paid by eligible retail
14 customers in connection with electric service to no more
15 than the greater of 2.015% of the amount paid per
16 kilowatthour by those customers during the year ending May
17 31, 2007 or the incremental amount per kilowatthour paid
18 for these measures in 2011.
19 No later than June 30, 2011, the Commission shall review
20the limitation on the amount of energy efficiency and
21demand-response measures implemented pursuant to this Section
22and report to the General Assembly its findings as to whether
23that limitation unduly constrains the procurement of energy
24efficiency and demand-response measures.
25 (e) Electric utilities shall be responsible for overseeing
26the design, development, and filing of energy efficiency and

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1demand-response plans with the Commission. Electric utilities
2shall implement 100% of the demand-response measures in the
3plans. Electric utilities shall implement 75% of the energy
4efficiency measures approved by the Commission, and may, as
5part of that implementation, outsource various aspects of
6program development and implementation. The remaining 25% of
7those energy efficiency measures approved by the Commission
8shall be implemented by the Department of Commerce and Economic
9Opportunity, and must be designed in conjunction with the
10utility and the filing process. The Department may outsource
11development and implementation of energy efficiency measures.
12A minimum of 10% of the entire portfolio of cost-effective
13energy efficiency measures shall be procured from units of
14local government, municipal corporations, school districts,
15and community college districts. The Department shall
16coordinate the implementation of these measures.
17 The apportionment of the dollars to cover the costs to
18implement the Department's share of the portfolio of energy
19efficiency measures shall be made to the Department once the
20Department has executed rebate agreements, grants, or
21contracts for energy efficiency measures and provided
22supporting documentation for those rebate agreements, grants,
23and contracts to the utility. The Department is authorized to
24adopt any rules necessary and prescribe procedures in order to
25ensure compliance by applicants in carrying out the purposes of
26rebate agreements for energy efficiency measures implemented

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1by the Department made under this Section.
2 The details of the measures implemented by the Department
3shall be submitted by the Department to the Commission in
4connection with the utility's filing regarding the energy
5efficiency and demand-response measures that the utility
6implements.
7 A utility providing approved energy efficiency and
8demand-response measures in the State shall be permitted to
9recover costs of those measures through an automatic adjustment
10clause tariff filed with and approved by the Commission. The
11tariff shall be established outside the context of a general
12rate case. Each year the Commission shall initiate a review to
13reconcile any amounts collected with the actual costs and to
14determine the required adjustment to the annual tariff factor
15to match annual expenditures.
16 Each utility shall include, in its recovery of costs, the
17costs estimated for both the utility's and the Department's
18implementation of energy efficiency and demand-response
19measures. Costs collected by the utility for measures
20implemented by the Department shall be submitted to the
21Department pursuant to Section 605-323 of the Civil
22Administrative Code of Illinois, shall be deposited into the
23Energy Efficiency Portfolio Standards Fund, and shall be used
24by the Department solely for the purpose of implementing these
25measures. A utility shall not be required to advance any moneys
26to the Department but only to forward such funds as it has

HB3687- 20 -LRB100 06860 RJF 16909 b
1collected. The Department shall report to the Commission on an
2annual basis regarding the costs actually incurred by the
3Department in the implementation of the measures. Any changes
4to the costs of energy efficiency measures as a result of plan
5modifications shall be appropriately reflected in amounts
6recovered by the utility and turned over to the Department.
7 The portfolio of measures, administered by both the
8utilities and the Department, shall, in combination, be
9designed to achieve the annual savings targets described in
10subsections (b) and (c) of this Section, as modified by
11subsection (d) of this Section.
12 The utility and the Department shall agree upon a
13reasonable portfolio of measures and determine the measurable
14corresponding percentage of the savings goals associated with
15measures implemented by the utility or Department.
16 No utility shall be assessed a penalty under subsection (f)
17of this Section for failure to make a timely filing if that
18failure is the result of a lack of agreement with the
19Department with respect to the allocation of responsibilities
20or related costs or target assignments. In that case, the
21Department and the utility shall file their respective plans
22with the Commission and the Commission shall determine an
23appropriate division of measures and programs that meets the
24requirements of this Section.
25 If the Department is unable to meet incremental annual
26performance goals for the portion of the portfolio implemented

HB3687- 21 -LRB100 06860 RJF 16909 b
1by the Department, then the utility and the Department shall
2jointly submit a modified filing to the Commission explaining
3the performance shortfall and recommending an appropriate
4course going forward, including any program modifications that
5may be appropriate in light of the evaluations conducted under
6item (7) of subsection (f) of this Section. In this case, the
7utility obligation to collect the Department's costs and turn
8over those funds to the Department under this subsection (e)
9shall continue only if the Commission approves the
10modifications to the plan proposed by the Department.
11 (f) No later than November 15, 2007, each electric utility
12shall file an energy efficiency and demand-response plan with
13the Commission to meet the energy efficiency and
14demand-response standards for 2008 through 2010. No later than
15October 1, 2010, each electric utility shall file an energy
16efficiency and demand-response plan with the Commission to meet
17the energy efficiency and demand-response standards for 2011
18through 2013. Every 3 years thereafter, each electric utility
19shall file, no later than September 1, an energy efficiency and
20demand-response plan with the Commission. If a utility does not
21file such a plan by September 1 of an applicable year, it shall
22face a penalty of $100,000 per day until the plan is filed.
23Each utility's plan shall set forth the utility's proposals to
24meet the utility's portion of the energy efficiency standards
25identified in subsection (b) and the demand-response standards
26identified in subsection (c) of this Section as modified by

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1subsections (d) and (e), taking into account the unique
2circumstances of the utility's service territory. The
3Commission shall seek public comment on the utility's plan and
4shall issue an order approving or disapproving each plan within
55 months after its submission. If the Commission disapproves a
6plan, the Commission shall, within 30 days, describe in detail
7the reasons for the disapproval and describe a path by which
8the utility may file a revised draft of the plan to address the
9Commission's concerns satisfactorily. If the utility does not
10refile with the Commission within 60 days, the utility shall be
11subject to penalties at a rate of $100,000 per day until the
12plan is filed. This process shall continue, and penalties shall
13accrue, until the utility has successfully filed a portfolio of
14energy efficiency and demand-response measures. Penalties
15shall be deposited into the Energy Efficiency Trust Fund. In
16submitting proposed energy efficiency and demand-response
17plans and funding levels to meet the savings goals adopted by
18this Act the utility shall:
19 (1) Demonstrate that its proposed energy efficiency
20 and demand-response measures will achieve the requirements
21 that are identified in subsections (b) and (c) of this
22 Section, as modified by subsections (d) and (e).
23 (2) Present specific proposals to implement new
24 building and appliance standards that have been placed into
25 effect.
26 (3) Present estimates of the total amount paid for

HB3687- 23 -LRB100 06860 RJF 16909 b
1 electric service expressed on a per kilowatthour basis
2 associated with the proposed portfolio of measures
3 designed to meet the requirements that are identified in
4 subsections (b) and (c) of this Section, as modified by
5 subsections (d) and (e).
6 (4) Coordinate with the Department to present a
7 portfolio of energy efficiency measures proportionate to
8 the share of total annual utility revenues in Illinois from
9 households at or below 150% of the poverty level. The
10 energy efficiency programs shall be targeted to households
11 with incomes at or below 80% of area median income.
12 (5) Demonstrate that its overall portfolio of energy
13 efficiency and demand-response measures, not including
14 programs covered by item (4) of this subsection (f), are
15 cost-effective using the total resource cost test and
16 represent a diverse cross-section of opportunities for
17 customers of all rate classes to participate in the
18 programs.
19 (6) Include a proposed cost-recovery tariff mechanism
20 to fund the proposed energy efficiency and demand-response
21 measures and to ensure the recovery of the prudently and
22 reasonably incurred costs of Commission-approved programs.
23 (7) Provide for an annual independent evaluation of the
24 performance of the cost-effectiveness of the utility's
25 portfolio of measures and the Department's portfolio of
26 measures, as well as a full review of the 3-year results of

HB3687- 24 -LRB100 06860 RJF 16909 b
1 the broader net program impacts and, to the extent
2 practical, for adjustment of the measures on a
3 going-forward basis as a result of the evaluations. The
4 resources dedicated to evaluation shall not exceed 3% of
5 portfolio resources in any given year.
6 (g) No more than 3% of energy efficiency and
7demand-response program revenue may be allocated for
8demonstration of breakthrough equipment and devices.
9 (g-5) The utility shall develop a program that provides
10residential and small commercial customers a rebate for
11customer investment in technologies which result in at least a
123% reduction in the customers' energy usage from the previous
13calendar year on a weather normalized basis. The approved
14methodology shall be specific to the technology used. The
15program shall provide an option for the technology vendor or
16alternative retail electric supplier to conduct the
17verification calculation and submit rebates on behalf of the
18customer. A customer may not receive recovery under more than
19one utility energy efficiency program, as defined in this
20Section, per technology.
21 (h) This Section does not apply to an electric utility that
22on December 31, 2005 provided electric service to fewer than
23100,000 customers in Illinois.
24 (i) If, after 2 years, an electric utility fails to meet
25the efficiency standard specified in subsection (b) of this
26Section, as modified by subsections (d) and (e), it shall make

HB3687- 25 -LRB100 06860 RJF 16909 b
1a contribution to the Low-Income Home Energy Assistance
2Program. The combined total liability for failure to meet the
3goal shall be $1,000,000, which shall be assessed as follows: a
4large electric utility shall pay $665,000, and a medium
5electric utility shall pay $335,000. If, after 3 years, an
6electric utility fails to meet the efficiency standard
7specified in subsection (b) of this Section, as modified by
8subsections (d) and (e), it shall make a contribution to the
9Low-Income Home Energy Assistance Program. The combined total
10liability for failure to meet the goal shall be $1,000,000,
11which shall be assessed as follows: a large electric utility
12shall pay $665,000, and a medium electric utility shall pay
13$335,000. In addition, the responsibility for implementing the
14energy efficiency measures of the utility making the payment
15shall be transferred to the Illinois Power Agency if, after 3
16years, or in any subsequent 3-year period, the utility fails to
17meet the efficiency standard specified in subsection (b) of
18this Section, as modified by subsections (d) and (e). The
19Agency shall implement a competitive procurement program to
20procure resources necessary to meet the standards specified in
21this Section as modified by subsections (d) and (e), with costs
22for those resources to be recovered in the same manner as
23products purchased through the procurement plan as provided in
24Section 16-111.5. The Director shall implement this
25requirement in connection with the procurement plan as provided
26in Section 16-111.5.

HB3687- 26 -LRB100 06860 RJF 16909 b
1 For purposes of this Section, (i) a "large electric
2utility" is an electric utility that, on December 31, 2005,
3served more than 2,000,000 electric customers in Illinois; (ii)
4a "medium electric utility" is an electric utility that, on
5December 31, 2005, served 2,000,000 or fewer but more than
6100,000 electric customers in Illinois; and (iii) Illinois
7electric utilities that are affiliated by virtue of a common
8parent company are considered a single electric utility.
9 (j) If, after 3 years, or any subsequent 3-year period, the
10Department fails to implement the Department's share of energy
11efficiency measures required by the standards in subsection
12(b), then the Illinois Power Agency may assume responsibility
13for and control of the Department's share of the required
14energy efficiency measures. The Agency shall implement a
15competitive procurement program to procure resources necessary
16to meet the standards specified in this Section, with the costs
17of these resources to be recovered in the same manner as
18provided for the Department in this Section.
19 (k) No electric utility shall be deemed to have failed to
20meet the energy efficiency standards to the extent any such
21failure is due to a failure of the Department or the Agency.
22 (l)(1) The energy efficiency and demand-response plans of
23electric utilities serving more than 500,000 retail customers
24in the State that were approved by the Commission on or before
25the effective date of this amendatory Act of the 99th General
26Assembly for the period June 1, 2014 through May 31, 2017 shall

HB3687- 27 -LRB100 06860 RJF 16909 b
1continue to be in force and effect through December 31, 2017 so
2that the energy efficiency programs set forth in those plans
3continue to be offered during the period June 1, 2017 through
4December 31, 2017. Each such utility is authorized to increase,
5on a pro rata basis, the energy savings goals and budgets
6approved in its plan to reflect the additional 7 months of the
7plan's operation, provided that such increase shall also
8incorporate reductions to goals and budgets to reflect the
9proportion of the utility's load attributable to customers who
10are exempt from this Section under subsection (m) of this
11Section.
12 (2) If an electric utility serving more than 500,000 retail
13customers in the State filed with the Commission, under
14subsection (f) of this Section, its proposed energy efficiency
15and demand-response plan for the period June 1, 2017 through
16May 31, 2020, and the Commission has not yet entered its final
17order approving such plan on or before the effective date of
18this amendatory Act of the 99th General Assembly, then the
19utility shall file a notice of withdrawal with the Commission,
20following such effective date, to withdraw the proposed energy
21efficiency and demand-response plan. Upon receipt of such
22notice, the Commission shall dismiss with prejudice any docket
23that had been initiated to investigate such plan, and the plan
24and the record related thereto shall not be the subject of any
25further hearing, investigation, or proceeding of any kind.
26 (3) For those electric utilities that serve more than

HB3687- 28 -LRB100 06860 RJF 16909 b
1500,000 retail customers in the State, this amendatory Act of
2the 99th General Assembly preempts and supersedes any orders
3entered by the Commission that approved such utilities' energy
4efficiency and demand response plans for the period commencing
5June 1, 2017 and ending May 31, 2020. Any such orders shall be
6void, and the provisions of paragraph (1) of this subsection
7(l) shall apply.
8(m) Notwithstanding anything to the contrary, after May 31,
92017, this Section does not apply to any retail customers of an
10electric utility that serves more than 3,000,000 retail
11customers in the State and whose total highest 30 minute demand
12was more than 10,000 kilowatts, or any retail customers of an
13electric utility that serves less than 3,000,000 retail
14customers but more than 500,000 retail customers in the State
15and whose total highest 15 minute demand was more than 10,000
16kilowatts. For purposes of this subsection (m), "retail
17customer" has the meaning set forth in Section 16-102 of this
18Act. The criteria for determining whether this subsection (m)
19is applicable to a retail customer shall be based on the 12
20consecutive billing periods prior to the start of the first
21year of each such multi-year plan.
22(Source: P.A. 98-90, eff. 7-15-13; 99-906, eff. 6-1-17.)
23 (220 ILCS 5/8-103B)
24 (This Section may contain text from a Public Act with a
25delayed effective date)

HB3687- 29 -LRB100 06860 RJF 16909 b
1 Sec. 8-103B. Energy efficiency and demand-response
2measures.
3 (a) It is the policy of the State that electric utilities
4are required to use cost-effective energy efficiency and
5demand-response measures to reduce delivery load. Requiring
6investment in cost-effective energy efficiency and
7demand-response measures will reduce direct and indirect costs
8to consumers by decreasing environmental impacts and by
9avoiding or delaying the need for new generation, transmission,
10and distribution infrastructure. It serves the public interest
11to allow electric utilities to recover costs for reasonably and
12prudently incurred expenditures for energy efficiency and
13demand-response measures. As used in this Section,
14"cost-effective" means that the measures satisfy the total
15resource cost test. The low-income measures described in
16subsection (c) of this Section shall not be required to meet
17the total resource cost test. For purposes of this Section, the
18terms "energy-efficiency", "demand-response", "electric
19utility", and "total resource cost test" have the meanings set
20forth in the Illinois Power Agency Act.
21 (a-5) This Section applies to electric utilities serving
22more than 500,000 retail customers in the State for those
23multi-year plans commencing after December 31, 2017.
24 (b) For purposes of this Section, electric utilities
25subject to this Section that serve more than 3,000,000 retail
26customers in the State shall be deemed to have achieved a

HB3687- 30 -LRB100 06860 RJF 16909 b
1cumulative persisting annual savings of 6.6% from energy
2efficiency measures and programs implemented during the period
3beginning January 1, 2012 and ending December 31, 2017, which
4percent is based on the deemed average weather normalized sales
5of electric power and energy during calendar years 2014, 2015,
6and 2016 of 88,000,000 MWhs. For the purposes of this
7subsection (b) and subsection (b-5), the 88,000,000 MWhs of
8deemed electric power and energy sales shall be reduced by the
9number of MWhs equal to the sum of the annual consumption of
10customers that are exempt from subsections (a) through (j) of
11this Section under subsection (l) of this Section, as averaged
12across the calendar years 2014, 2015, and 2016. After 2017, the
13deemed value of cumulative persisting annual savings from
14energy efficiency measures and programs implemented during the
15period beginning January 1, 2012 and ending December 31, 2017,
16shall be reduced each year, as follows, and the applicable
17value shall be applied to and count toward the utility's
18achievement of the cumulative persisting annual savings goals
19set forth in subsection (b-5):
20 (1) 5.8% deemed cumulative persisting annual savings
21 for the year ending December 31, 2018;
22 (2) 5.2% deemed cumulative persisting annual savings
23 for the year ending December 31, 2019;
24 (3) 4.5% deemed cumulative persisting annual savings
25 for the year ending December 31, 2020;
26 (4) 4.0% deemed cumulative persisting annual savings

HB3687- 31 -LRB100 06860 RJF 16909 b
1 for the year ending December 31, 2021;
2 (5) 3.5% deemed cumulative persisting annual savings
3 for the year ending December 31, 2022;
4 (6) 3.1% deemed cumulative persisting annual savings
5 for the year ending December 31, 2023;
6 (7) 2.8% deemed cumulative persisting annual savings
7 for the year ending December 31, 2024;
8 (8) 2.5% deemed cumulative persisting annual savings
9 for the year ending December 31, 2025;
10 (9) 2.3% deemed cumulative persisting annual savings
11 for the year ending December 31, 2026;
12 (10) 2.1% deemed cumulative persisting annual savings
13 for the year ending December 31, 2027;
14 (11) 1.8% deemed cumulative persisting annual savings
15 for the year ending December 31, 2028;
16 (12) 1.7% deemed cumulative persisting annual savings
17 for the year ending December 31, 2029; and
18 (13) 1.5% deemed cumulative persisting annual savings
19 for the year ending December 31, 2030.
20 For purposes of this Section, "cumulative persisting
21annual savings" means the total electric energy savings in a
22given year from measures installed in that year or in previous
23years, but no earlier than January 1, 2012, that are still
24operational and providing savings in that year because the
25measures have not yet reached the end of their useful lives.
26 (b-5) Beginning in 2018, electric utilities subject to this

HB3687- 32 -LRB100 06860 RJF 16909 b
1Section that serve more than 3,000,000 retail customers in the
2State shall achieve the following cumulative persisting annual
3savings goals, as modified by subsection (f) of this Section
4and as compared to the deemed baseline of 88,000,000 MWhs of
5electric power and energy sales set forth in subsection (b), as
6reduced by the number of MWhs equal to the sum of the annual
7consumption of customers that are exempt from subsections (a)
8through (j) of this Section under subsection (l) of this
9Section as averaged across the calendar years 2014, 2015, and
102016, through the implementation of energy efficiency measures
11during the applicable year and in prior years, but no earlier
12than January 1, 2012:
13 (1) 7.8% cumulative persisting annual savings for the
14 year ending December 31, 2018;
15 (2) 9.1% cumulative persisting annual savings for the
16 year ending December 31, 2019;
17 (3) 10.4% cumulative persisting annual savings for the
18 year ending December 31, 2020;
19 (4) 11.8% cumulative persisting annual savings for the
20 year ending December 31, 2021;
21 (5) 13.1% cumulative persisting annual savings for the
22 year ending December 31, 2022;
23 (6) 14.4% cumulative persisting annual savings for the
24 year ending December 31, 2023;
25 (7) 15.7% cumulative persisting annual savings for the
26 year ending December 31, 2024;

HB3687- 33 -LRB100 06860 RJF 16909 b
1 (8) 17% cumulative persisting annual savings for the
2 year ending December 31, 2025;
3 (9) 17.9% cumulative persisting annual savings for the
4 year ending December 31, 2026;
5 (10) 18.8% cumulative persisting annual savings for
6 the year ending December 31, 2027;
7 (11) 19.7% cumulative persisting annual savings for
8 the year ending December 31, 2028;
9 (12) 20.6% cumulative persisting annual savings for
10 the year ending December 31, 2029; and
11 (13) 21.5% cumulative persisting annual savings for
12 the year ending December 31, 2030.
13 (b-10) For purposes of this Section, electric utilities
14subject to this Section that serve less than 3,000,000 retail
15customers but more than 500,000 retail customers in the State
16shall be deemed to have achieved a cumulative persisting annual
17savings of 6.6% from energy efficiency measures and programs
18implemented during the period beginning January 1, 2012 and
19ending December 31, 2017, which is based on the deemed average
20weather normalized sales of electric power and energy during
21calendar years 2014, 2015, and 2016 of 36,900,000 MWhs. For the
22purposes of this subsection (b-10) and subsection (b-15), the
2336,900,000 MWhs of deemed electric power and energy sales shall
24be reduced by the number of MWhs equal to the sum of the annual
25consumption of customers that are exempt from subsections (a)
26through (j) of this Section under subsection (l) of this

HB3687- 34 -LRB100 06860 RJF 16909 b
1Section, as averaged across the calendar years 2014, 2015, and
22016. After 2017, the deemed value of cumulative persisting
3annual savings from energy efficiency measures and programs
4implemented during the period beginning January 1, 2012 and
5ending December 31, 2017, shall be reduced each year, as
6follows, and the applicable value shall be applied to and count
7toward the utility's achievement of the cumulative persisting
8annual savings goals set forth in subsection (b-15):
9 (1) 5.8% deemed cumulative persisting annual savings
10 for the year ending December 31, 2018;
11 (2) 5.2% deemed cumulative persisting annual savings
12 for the year ending December 31, 2019;
13 (3) 4.5% deemed cumulative persisting annual savings
14 for the year ending December 31, 2020;
15 (4) 4.0% deemed cumulative persisting annual savings
16 for the year ending December 31, 2021;
17 (5) 3.5% deemed cumulative persisting annual savings
18 for the year ending December 31, 2022;
19 (6) 3.1% deemed cumulative persisting annual savings
20 for the year ending December 31, 2023;
21 (7) 2.8% deemed cumulative persisting annual savings
22 for the year ending December 31, 2024;
23 (8) 2.5% deemed cumulative persisting annual savings
24 for the year ending December 31, 2025;
25 (9) 2.3% deemed cumulative persisting annual savings
26 for the year ending December 31, 2026;

HB3687- 35 -LRB100 06860 RJF 16909 b
1 (10) 2.1% deemed cumulative persisting annual savings
2 for the year ending December 31, 2027;
3 (11) 1.8% deemed cumulative persisting annual savings
4 for the year ending December 31, 2028;
5 (12) 1.7% deemed cumulative persisting annual savings
6 for the year ending December 31, 2029; and
7 (13) 1.5% deemed cumulative persisting annual savings
8 for the year ending December 31, 2030.
9 (b-15) Beginning in 2018, electric utilities subject to
10this Section that serve less than 3,000,000 retail customers
11but more than 500,000 retail customers in the State shall
12achieve the following cumulative persisting annual savings
13goals, as modified by subsection (b-20) and subsection (f) of
14this Section and as compared to the deemed baseline as reduced
15by the number of MWhs equal to the sum of the annual
16consumption of customers that are exempt from subsections (a)
17through (j) of this Section under subsection (l) of this
18Section as averaged across the calendar years 2014, 2015, and
192016, through the implementation of energy efficiency measures
20during the applicable year and in prior years, but no earlier
21than January 1, 2012:
22 (1) 7.4% cumulative persisting annual savings for the
23 year ending December 31, 2018;
24 (2) 8.2% cumulative persisting annual savings for the
25 year ending December 31, 2019;
26 (3) 9.0% cumulative persisting annual savings for the

HB3687- 36 -LRB100 06860 RJF 16909 b
1 year ending December 31, 2020;
2 (4) 9.8% cumulative persisting annual savings for the
3 year ending December 31, 2021;
4 (5) 10.6% cumulative persisting annual savings for the
5 year ending December 31, 2022;
6 (6) 11.4% cumulative persisting annual savings for the
7 year ending December 31, 2023;
8 (7) 12.2% cumulative persisting annual savings for the
9 year ending December 31, 2024;
10 (8) 13% cumulative persisting annual savings for the
11 year ending December 31, 2025;
12 (9) 13.6% cumulative persisting annual savings for the
13 year ending December 31, 2026;
14 (10) 14.2% cumulative persisting annual savings for
15 the year ending December 31, 2027;
16 (11) 14.8% cumulative persisting annual savings for
17 the year ending December 31, 2028;
18 (12) 15.4% cumulative persisting annual savings for
19 the year ending December 31, 2029; and
20 (13) 16% cumulative persisting annual savings for the
21 year ending December 31, 2030.
22 The difference between the cumulative persisting annual
23savings goal for the applicable calendar year and the
24cumulative persisting annual savings goal for the immediately
25preceding calendar year is 0.8% for the period of January 1,
262018 through December 31, 2025 and 0.6% for the period of

HB3687- 37 -LRB100 06860 RJF 16909 b
1January 1, 2026 through December 31, 2030.
2 (b-20) Each electric utility subject to this Section may
3include cost-effective voltage optimization measures in its
4plans submitted under subsections (f) and (g) of this Section,
5and the costs incurred by a utility to implement the measures
6under a Commission-approved plan shall be recovered under the
7provisions of Article IX or Section 16-108.5 of this Act. For
8purposes of this Section, the measure life of voltage
9optimization measures shall be 15 years. The measure life
10period is independent of the depreciation rate of the voltage
11optimization assets deployed.
12 Within 270 days after the effective date of this amendatory
13Act of the 99th General Assembly, an electric utility that
14serves less than 3,000,000 retail customers but more than
15500,000 retail customers in the State shall file a plan with
16the Commission that identifies the cost-effective voltage
17optimization investment the electric utility plans to
18undertake through December 31, 2024. The Commission, after
19notice and hearing, shall approve or approve with modification
20the plan within 120 days after the plan's filing and, in the
21order approving or approving with modification the plan, the
22Commission shall adjust the applicable cumulative persisting
23annual savings goals set forth in subsection (b-15) to reflect
24any amount of cost-effective energy savings approved by the
25Commission that is greater than or less than the following
26cumulative persisting annual savings values attributable to

HB3687- 38 -LRB100 06860 RJF 16909 b
1voltage optimization for the applicable year:
2 (1) 0.0% of cumulative persisting annual savings for
3 the year ending December 31, 2018;
4 (2) 0.17% of cumulative persisting annual savings for
5 the year ending December 31, 2019;
6 (3) 0.17% of cumulative persisting annual savings for
7 the year ending December 31, 2020;
8 (4) 0.33% of cumulative persisting annual savings for
9 the year ending December 31, 2021;
10 (5) 0.5% of cumulative persisting annual savings for
11 the year ending December 31, 2022;
12 (6) 0.67% of cumulative persisting annual savings for
13 the year ending December 31, 2023;
14 (7) 0.83% of cumulative persisting annual savings for
15 the year ending December 31, 2024; and
16 (8) 1.0% of cumulative persisting annual savings for
17 the year ending December 31, 2025.
18 (b-25) In the event an electric utility jointly offers an
19energy efficiency measure or program with a gas utility under
20plans approved under this Section and Section 8-104 of this
21Act, the electric utility may continue offering the program,
22including the gas energy efficiency measures, in the event the
23gas utility discontinues funding the program. In that event,
24the energy savings value associated with such other fuels shall
25be converted to electric energy savings on an equivalent Btu
26basis for the premises. However, the electric utility shall

HB3687- 39 -LRB100 06860 RJF 16909 b
1prioritize programs for low-income residential customers to
2the extent practicable. An electric utility may recover the
3costs of offering the gas energy efficiency measures under this
4subsection (b-25).
5 For those energy efficiency measures or programs that save
6both electricity and other fuels but are not jointly offered
7with a gas utility under plans approved under this Section and
8Section 8-104 or not offered with an affiliated gas utility
9under paragraph (6) of subsection (f) of Section 8-104 of this
10Act, the electric utility may count savings of fuels other than
11electricity toward the achievement of its annual savings goal,
12and the energy savings value associated with such other fuels
13shall be converted to electric energy savings on an equivalent
14Btu basis at the premises.
15 In no event shall more than 10% of each year's applicable
16annual incremental goal as defined in paragraph (7) of
17subsection (g) of this Section be met through savings of fuels
18other than electricity.
19 (c) Electric utilities shall be responsible for overseeing
20the design, development, and filing of energy efficiency plans
21with the Commission and may, as part of that implementation,
22outsource various aspects of program development and
23implementation. A minimum of 10%, for electric utilities that
24serve more than 3,000,000 retail customers in the State, and a
25minimum of 7%, for electric utilities that serve less than
263,000,000 retail customers but more than 500,000 retail

HB3687- 40 -LRB100 06860 RJF 16909 b
1customers in the State, of the utility's entire portfolio
2funding level for a given year shall be used to procure
3cost-effective energy efficiency measures from units of local
4government, municipal corporations, school districts, public
5housing, and community college districts, provided that a
6minimum percentage of available funds shall be used to procure
7energy efficiency from public housing, which percentage shall
8be equal to public housing's share of public building energy
9consumption.
10 The utilities shall also implement energy efficiency
11measures targeted at low-income households, which, for
12purposes of this Section, shall be defined as households at or
13below 80% of area median income, and expenditures to implement
14the measures shall be no less than $25,000,000 per year for
15electric utilities that serve more than 3,000,000 retail
16customers in the State and no less than $8,350,000 per year for
17electric utilities that serve less than 3,000,000 retail
18customers but more than 500,000 retail customers in the State.
19 Each electric utility shall assess opportunities to
20implement cost-effective energy efficiency measures and
21programs through a public housing authority or authorities
22located in its service territory. If such opportunities are
23identified, the utility shall propose such measures and
24programs to address the opportunities. Expenditures to address
25such opportunities shall be credited toward the minimum
26procurement and expenditure requirements set forth in this

HB3687- 41 -LRB100 06860 RJF 16909 b
1subsection (c).
2 Implementation of energy efficiency measures and programs
3targeted at low-income households should be contracted, when it
4is practicable, to independent third parties that have
5demonstrated capabilities to serve such households, with a
6preference for not-for-profit entities and government agencies
7that have existing relationships with or experience serving
8low-income communities in the State.
9 Each electric utility shall develop and implement
10reporting procedures that address and assist in determining the
11amount of energy savings that can be applied to the low-income
12procurement and expenditure requirements set forth in this
13subsection (c).
14 The electric utilities shall also convene a low-income
15energy efficiency advisory committee to assist in the design
16and evaluation of the low-income energy efficiency programs.
17The committee shall be comprised of the electric utilities
18subject to the requirements of this Section, the gas utilities
19subject to the requirements of Section 8-104 of this Act, the
20utilities' low-income energy efficiency implementation
21contractors, and representatives of community-based
22organizations.
23 (d) Notwithstanding any other provision of law to the
24contrary, a utility providing approved energy efficiency
25measures and, if applicable, demand-response measures in the
26State shall be permitted to recover all reasonable and

HB3687- 42 -LRB100 06860 RJF 16909 b
1prudently incurred costs of those measures from all retail
2customers, except as provided in subsection (l) of this
3Section, as follows, provided that nothing in this subsection
4(d) permits the double recovery of such costs from customers:
5 (1) The utility may recover its costs through an
6 automatic adjustment clause tariff filed with and approved
7 by the Commission. The tariff shall be established outside
8 the context of a general rate case. Each year the
9 Commission shall initiate a review to reconcile any amounts
10 collected with the actual costs and to determine the
11 required adjustment to the annual tariff factor to match
12 annual expenditures. To enable the financing of the
13 incremental capital expenditures, including regulatory
14 assets, for electric utilities that serve less than
15 3,000,000 retail customers but more than 500,000 retail
16 customers in the State, the utility's actual year-end
17 capital structure that includes a common equity ratio,
18 excluding goodwill, of up to and including 50% of the total
19 capital structure shall be deemed reasonable and used to
20 set rates.
21 (2) A utility may recover its costs through an energy
22 efficiency formula rate approved by the Commission under a
23 filing under subsections (f) and (g) of this Section, which
24 shall specify the cost components that form the basis of
25 the rate charged to customers with sufficient specificity
26 to operate in a standardized manner and be updated annually

HB3687- 43 -LRB100 06860 RJF 16909 b
1 with transparent information that reflects the utility's
2 actual costs to be recovered during the applicable rate
3 year, which is the period beginning with the first billing
4 day of January and extending through the last billing day
5 of the following December. The energy efficiency formula
6 rate shall be implemented through a tariff filed with the
7 Commission under subsections (f) and (g) of this Section
8 that is consistent with the provisions of this paragraph
9 (2) and that shall be applicable to all delivery services
10 customers. The Commission shall conduct an investigation
11 of the tariff in a manner consistent with the provisions of
12 this paragraph (2), subsections (f) and (g) of this
13 Section, and the provisions of Article IX of this Act to
14 the extent they do not conflict with this paragraph (2).
15 The energy efficiency formula rate approved by the
16 Commission shall remain in effect at the discretion of the
17 utility and shall do the following:
18 (A) Provide for the recovery of the utility's
19 actual costs incurred under this Section that are
20 prudently incurred and reasonable in amount consistent
21 with Commission practice and law. The sole fact that a
22 cost differs from that incurred in a prior calendar
23 year or that an investment is different from that made
24 in a prior calendar year shall not imply the imprudence
25 or unreasonableness of that cost or investment.
26 (B) Reflect the utility's actual year-end capital

HB3687- 44 -LRB100 06860 RJF 16909 b
1 structure for the applicable calendar year, excluding
2 goodwill, subject to a determination of prudence and
3 reasonableness consistent with Commission practice and
4 law. To enable the financing of the incremental capital
5 expenditures, including regulatory assets, for
6 electric utilities that serve less than 3,000,000
7 retail customers but more than 500,000 retail
8 customers in the State, a participating electric
9 utility's actual year-end capital structure that
10 includes a common equity ratio, excluding goodwill, of
11 up to and including 50% of the total capital structure
12 shall be deemed reasonable and used to set rates.
13 (C) Include a cost of equity, which shall be
14 calculated as the sum of the following:
15 (i) the average for the applicable calendar
16 year of the monthly average yields of 30-year U.S.
17 Treasury bonds published by the Board of Governors
18 of the Federal Reserve System in its weekly H.15
19 Statistical Release or successor publication; and
20 (ii) 580 basis points.
21 At such time as the Board of Governors of the
22 Federal Reserve System ceases to include the monthly
23 average yields of 30-year U.S. Treasury bonds in its
24 weekly H.15 Statistical Release or successor
25 publication, the monthly average yields of the U.S.
26 Treasury bonds then having the longest duration

HB3687- 45 -LRB100 06860 RJF 16909 b
1 published by the Board of Governors in its weekly H.15
2 Statistical Release or successor publication shall
3 instead be used for purposes of this paragraph (2).
4 (D) Permit and set forth protocols, subject to a
5 determination of prudence and reasonableness
6 consistent with Commission practice and law, for the
7 following:
8 (i) recovery of incentive compensation expense
9 that is based on the achievement of operational
10 metrics, including metrics related to budget
11 controls, outage duration and frequency, safety,
12 customer service, efficiency and productivity, and
13 environmental compliance; however, this protocol
14 shall not apply if such expense related to costs
15 incurred under this Section is recovered under
16 Article IX or Section 16-108.5 of this Act;
17 incentive compensation expense that is based on
18 net income or an affiliate's earnings per share
19 shall not be recoverable under the energy
20 efficiency formula rate;
21 (ii) recovery of pension and other
22 post-employment benefits expense, provided that
23 such costs are supported by an actuarial study;
24 however, this protocol shall not apply if such
25 expense related to costs incurred under this
26 Section is recovered under Article IX or Section

HB3687- 46 -LRB100 06860 RJF 16909 b
1 16-108.5 of this Act;
2 (iii) recovery of existing regulatory assets
3 over the periods previously authorized by the
4 Commission;
5 (iv) as described in subsection (e),
6 amortization of costs incurred under this Section;
7 and
8 (v) projected, weather normalized billing
9 determinants for the applicable rate year.
10 (E) Provide for an annual reconciliation, as
11 described in paragraph (3) of this subsection (d), less
12 any deferred taxes related to the reconciliation, with
13 interest at an annual rate of return equal to the
14 utility's weighted average cost of capital, including
15 a revenue conversion factor calculated to recover or
16 refund all additional income taxes that may be payable
17 or receivable as a result of that return, of the energy
18 efficiency revenue requirement reflected in rates for
19 each calendar year, beginning with the calendar year in
20 which the utility files its energy efficiency formula
21 rate tariff under this paragraph (2), with what the
22 revenue requirement would have been had the actual cost
23 information for the applicable calendar year been
24 available at the filing date.
25 The utility shall file, together with its tariff, the
26 projected costs to be incurred by the utility during the

HB3687- 47 -LRB100 06860 RJF 16909 b
1 rate year under the utility's multi-year plan approved
2 under subsections (f) and (g) of this Section, including,
3 but not limited to, the projected capital investment costs
4 and projected regulatory asset balances with
5 correspondingly updated depreciation and amortization
6 reserves and expense, that shall populate the energy
7 efficiency formula rate and set the initial rates under the
8 formula.
9 The Commission shall review the proposed tariff in
10 conjunction with its review of a proposed multi-year plan,
11 as specified in paragraph (5) of subsection (g) of this
12 Section. The review shall be based on the same evidentiary
13 standards, including, but not limited to, those concerning
14 the prudence and reasonableness of the costs incurred by
15 the utility, the Commission applies in a hearing to review
16 a filing for a general increase in rates under Article IX
17 of this Act. The initial rates shall take effect beginning
18 with the January monthly billing period following the
19 Commission's approval.
20 The tariff's rate design and cost allocation across
21 customer classes shall be consistent with the utility's
22 automatic adjustment clause tariff in effect on the
23 effective date of this amendatory Act of the 99th General
24 Assembly; however, the Commission may revise the tariff's
25 rate design and cost allocation in subsequent proceedings
26 under paragraph (3) of this subsection (d).

HB3687- 48 -LRB100 06860 RJF 16909 b
1 If the energy efficiency formula rate is terminated,
2 the then current rates shall remain in effect until such
3 time as the energy efficiency costs are incorporated into
4 new rates that are set under this subsection (d) or Article
5 IX of this Act, subject to retroactive rate adjustment,
6 with interest, to reconcile rates charged with actual
7 costs.
8 (3) The provisions of this paragraph (3) shall only
9 apply to an electric utility that has elected to file an
10 energy efficiency formula rate under paragraph (2) of this
11 subsection (d). Subsequent to the Commission's issuance of
12 an order approving the utility's energy efficiency formula
13 rate structure and protocols, and initial rates under
14 paragraph (2) of this subsection (d), the utility shall
15 file, on or before June 1 of each year, with the Chief
16 Clerk of the Commission its updated cost inputs to the
17 energy efficiency formula rate for the applicable rate year
18 and the corresponding new charges, as well as the
19 information described in paragraph (9) of subsection (g) of
20 this Section. Each such filing shall conform to the
21 following requirements and include the following
22 information:
23 (A) The inputs to the energy efficiency formula
24 rate for the applicable rate year shall be based on the
25 projected costs to be incurred by the utility during
26 the rate year under the utility's multi-year plan

HB3687- 49 -LRB100 06860 RJF 16909 b
1 approved under subsections (f) and (g) of this Section,
2 including, but not limited to, projected capital
3 investment costs and projected regulatory asset
4 balances with correspondingly updated depreciation and
5 amortization reserves and expense. The filing shall
6 also include a reconciliation of the energy efficiency
7 revenue requirement that was in effect for the prior
8 rate year (as set by the cost inputs for the prior rate
9 year) with the actual revenue requirement for the prior
10 rate year (determined using a year-end rate base) that
11 uses amounts reflected in the applicable FERC Form 1
12 that reports the actual costs for the prior rate year.
13 Any over-collection or under-collection indicated by
14 such reconciliation shall be reflected as a credit
15 against, or recovered as an additional charge to,
16 respectively, with interest calculated at a rate equal
17 to the utility's weighted average cost of capital
18 approved by the Commission for the prior rate year, the
19 charges for the applicable rate year. Such
20 over-collection or under-collection shall be adjusted
21 to remove any deferred taxes related to the
22 reconciliation, for purposes of calculating interest
23 at an annual rate of return equal to the utility's
24 weighted average cost of capital approved by the
25 Commission for the prior rate year, including a revenue
26 conversion factor calculated to recover or refund all

HB3687- 50 -LRB100 06860 RJF 16909 b
1 additional income taxes that may be payable or
2 receivable as a result of that return. Each
3 reconciliation shall be certified by the participating
4 utility in the same manner that FERC Form 1 is
5 certified. The filing shall also include the charge or
6 credit, if any, resulting from the calculation
7 required by subparagraph (E) of paragraph (2) of this
8 subsection (d).
9 Notwithstanding any other provision of law to the
10 contrary, the intent of the reconciliation is to
11 ultimately reconcile both the revenue requirement
12 reflected in rates for each calendar year, beginning
13 with the calendar year in which the utility files its
14 energy efficiency formula rate tariff under paragraph
15 (2) of this subsection (d), with what the revenue
16 requirement determined using a year-end rate base for
17 the applicable calendar year would have been had the
18 actual cost information for the applicable calendar
19 year been available at the filing date.
20 For purposes of this Section, "FERC Form 1" means
21 the Annual Report of Major Electric Utilities,
22 Licensees and Others that electric utilities are
23 required to file with the Federal Energy Regulatory
24 Commission under the Federal Power Act, Sections 3,
25 4(a), 304 and 209, modified as necessary to be
26 consistent with 83 Ill. Admin. Code Part 415 as of May

HB3687- 51 -LRB100 06860 RJF 16909 b
1 1, 2011. Nothing in this Section is intended to allow
2 costs that are not otherwise recoverable to be
3 recoverable by virtue of inclusion in FERC Form 1.
4 (B) The new charges shall take effect beginning on
5 the first billing day of the following January billing
6 period and remain in effect through the last billing
7 day of the next December billing period regardless of
8 whether the Commission enters upon a hearing under this
9 paragraph (3).
10 (C) The filing shall include relevant and
11 necessary data and documentation for the applicable
12 rate year. Normalization adjustments shall not be
13 required.
14 Within 45 days after the utility files its annual
15 update of cost inputs to the energy efficiency formula
16 rate, the Commission shall with reasonable notice,
17 initiate a proceeding concerning whether the projected
18 costs to be incurred by the utility and recovered during
19 the applicable rate year, and that are reflected in the
20 inputs to the energy efficiency formula rate, are
21 consistent with the utility's approved multi-year plan
22 under subsections (f) and (g) of this Section and whether
23 the costs incurred by the utility during the prior rate
24 year were prudent and reasonable. The Commission shall also
25 have the authority to investigate the information and data
26 described in paragraph (9) of subsection (g) of this

HB3687- 52 -LRB100 06860 RJF 16909 b
1 Section, including the proposed adjustment to the
2 utility's return on equity component of its weighted
3 average cost of capital. During the course of the
4 proceeding, each objection shall be stated with
5 particularity and evidence provided in support thereof,
6 after which the utility shall have the opportunity to rebut
7 the evidence. Discovery shall be allowed consistent with
8 the Commission's Rules of Practice, which Rules of Practice
9 shall be enforced by the Commission or the assigned hearing
10 examiner. The Commission shall apply the same evidentiary
11 standards, including, but not limited to, those concerning
12 the prudence and reasonableness of the costs incurred by
13 the utility, during the proceeding as it would apply in a
14 proceeding to review a filing for a general increase in
15 rates under Article IX of this Act. The Commission shall
16 not, however, have the authority in a proceeding under this
17 paragraph (3) to consider or order any changes to the
18 structure or protocols of the energy efficiency formula
19 rate approved under paragraph (2) of this subsection (d).
20 In a proceeding under this paragraph (3), the Commission
21 shall enter its order no later than the earlier of 195 days
22 after the utility's filing of its annual update of cost
23 inputs to the energy efficiency formula rate or December
24 15. The utility's proposed return on equity calculation, as
25 described in paragraphs (7) through (9) of subsection (g)
26 of this Section, shall be deemed the final, approved

HB3687- 53 -LRB100 06860 RJF 16909 b
1 calculation on December 15 of the year in which it is filed
2 unless the Commission enters an order on or before December
3 15, after notice and hearing, that modifies such
4 calculation consistent with this Section. The Commission's
5 determinations of the prudence and reasonableness of the
6 costs incurred, and determination of such return on equity
7 calculation, for the applicable calendar year shall be
8 final upon entry of the Commission's order and shall not be
9 subject to reopening, reexamination, or collateral attack
10 in any other Commission proceeding, case, docket, order,
11 rule, or regulation; however, nothing in this paragraph (3)
12 shall prohibit a party from petitioning the Commission to
13 rehear or appeal to the courts the order under the
14 provisions of this Act.
15 (e) Beginning on the effective date of this amendatory Act
16of the 99th General Assembly, a utility subject to the
17requirements of this Section may elect to defer, as a
18regulatory asset, up to the full amount of its expenditures
19incurred under this Section for each annual period, including,
20but not limited to, any expenditures incurred above the funding
21level set by subsection (f) of this Section for a given year.
22The total expenditures deferred as a regulatory asset in a
23given year shall be amortized and recovered over a period that
24is equal to the weighted average of the energy efficiency
25measure lives implemented for that year that are reflected in
26the regulatory asset. The unamortized balance shall be

HB3687- 54 -LRB100 06860 RJF 16909 b
1recognized as of December 31 for a given year. The utility
2shall also earn a return on the total of the unamortized
3balances of all of the energy efficiency regulatory assets,
4less any deferred taxes related to those unamortized balances,
5at an annual rate equal to the utility's weighted average cost
6of capital that includes, based on a year-end capital
7structure, the utility's actual cost of debt for the applicable
8calendar year and a cost of equity, which shall be calculated
9as the sum of the (i) the average for the applicable calendar
10year of the monthly average yields of 30-year U.S. Treasury
11bonds published by the Board of Governors of the Federal
12Reserve System in its weekly H.15 Statistical Release or
13successor publication; and (ii) 580 basis points, including a
14revenue conversion factor calculated to recover or refund all
15additional income taxes that may be payable or receivable as a
16result of that return. Capital investment costs shall be
17depreciated and recovered over their useful lives consistent
18with generally accepted accounting principles. The weighted
19average cost of capital shall be applied to the capital
20investment cost balance, less any accumulated depreciation and
21accumulated deferred income taxes, as of December 31 for a
22given year.
23 When an electric utility creates a regulatory asset under
24the provisions of this Section, the costs are recovered over a
25period during which customers also receive a benefit which is
26in the public interest. Accordingly, it is the intent of the

HB3687- 55 -LRB100 06860 RJF 16909 b
1General Assembly that an electric utility that elects to create
2a regulatory asset under the provisions of this Section shall
3recover all of the associated costs as set forth in this
4Section. After the Commission has approved the prudence and
5reasonableness of the costs that comprise the regulatory asset,
6the electric utility shall be permitted to recover all such
7costs, and the value and recoverability through rates of the
8associated regulatory asset shall not be limited, altered,
9impaired, or reduced.
10 (f) Beginning in 2017, each electric utility shall file an
11energy efficiency plan with the Commission to meet the energy
12efficiency standards for the next applicable multi-year period
13beginning January 1 of the year following the filing, according
14to the schedule set forth in paragraphs (1) through (3) of this
15subsection (f). If a utility does not file such a plan on or
16before the applicable filing deadline for the plan, it shall
17face a penalty of $100,000 per day until the plan is filed.
18 (1) No later than 30 days after the effective date of
19 this amendatory Act of the 99th General Assembly or May 1,
20 2017, whichever is later, each electric utility shall file
21 a 4-year energy efficiency plan commencing on January 1,
22 2018 that is designed to achieve the cumulative persisting
23 annual savings goals specified in paragraphs (1) through
24 (4) of subsection (b-5) of this Section or in paragraphs
25 (1) through (4) of subsection (b-15) of this Section, as
26 applicable, through implementation of energy efficiency

HB3687- 56 -LRB100 06860 RJF 16909 b
1 measures; however, the goals may be reduced if the
2 utility's expenditures are limited pursuant to subsection
3 (m) of this Section or, for a utility that serves less than
4 3,000,000 retail customers, if each of the following
5 conditions are met: (A) the plan's analysis and forecasts
6 of the utility's ability to acquire energy savings
7 demonstrate that achievement of such goals is not cost
8 effective; and (B) the amount of energy savings achieved by
9 the utility as determined by the independent evaluator for
10 the most recent year for which savings have been evaluated
11 preceding the plan filing was less than the average annual
12 amount of savings required to achieve the goals for the
13 applicable 4-year plan period. Except as provided in
14 subsection (m) of this Section, annual increases in
15 cumulative persisting annual savings goals during the
16 applicable 4-year plan period shall not be reduced to
17 amounts that are less than the maximum amount of cumulative
18 persisting annual savings that is forecast to be
19 cost-effectively achievable during the 4-year plan period.
20 The Commission shall review any proposed goal reduction as
21 part of its review and approval of the utility's proposed
22 plan.
23 (2) No later than March 1, 2021, each electric utility
24 shall file a 4-year energy efficiency plan commencing on
25 January 1, 2022 that is designed to achieve the cumulative
26 persisting annual savings goals specified in paragraphs

HB3687- 57 -LRB100 06860 RJF 16909 b
1 (5) through (8) of subsection (b-5) of this Section or in
2 paragraphs (5) through (8) of subsection (b-15) of this
3 Section, as applicable, through implementation of energy
4 efficiency measures; however, the goals may be reduced if
5 the utility's expenditures are limited pursuant to
6 subsection (m) of this Section or, each of the following
7 conditions are met: (A) the plan's analysis and forecasts
8 of the utility's ability to acquire energy savings
9 demonstrate that achievement of such goals is not cost
10 effective; and (B) the amount of energy savings achieved by
11 the utility as determined by the independent evaluator for
12 the most recent year for which savings have been evaluated
13 preceding the plan filing was less than the average annual
14 amount of savings required to achieve the goals for the
15 applicable 4-year plan period. Except as provided in
16 subsection (m) of this Section, annual increases in
17 cumulative persisting annual savings goals during the
18 applicable 4-year plan period shall not be reduced to
19 amounts that are less than the maximum amount of cumulative
20 persisting annual savings that is forecast to be
21 cost-effectively achievable during the 4-year plan period.
22 The Commission shall review any proposed goal reduction as
23 part of its review and approval of the utility's proposed
24 plan.
25 (3) No later than March 1, 2025, each electric utility
26 shall file a 5-year energy efficiency plan commencing on

HB3687- 58 -LRB100 06860 RJF 16909 b
1 January 1, 2026 that is designed to achieve the cumulative
2 persisting annual savings goals specified in paragraphs
3 (9) through (13) of subsection (b-5) of this Section or in
4 paragraphs (9) through (13) of subsection (b-15) of this
5 Section, as applicable, through implementation of energy
6 efficiency measures; however, the goals may be reduced if
7 the utility's expenditures are limited pursuant to
8 subsection (m) of this Section or, each of the following
9 conditions are met: (A) the plan's analysis and forecasts
10 of the utility's ability to acquire energy savings
11 demonstrate that achievement of such goals is not cost
12 effective; and (B) the amount of energy savings achieved by
13 the utility as determined by the independent evaluator for
14 the most recent year for which savings have been evaluated
15 preceding the plan filing was less than the average annual
16 amount of savings required to achieve the goals for the
17 applicable 5-year plan period. Except as provided in
18 subsection (m) of this Section, annual increases in
19 cumulative persisting annual savings goals during the
20 applicable 5-year plan period shall not be reduced to
21 amounts that are less than the maximum amount of cumulative
22 persisting annual savings that is forecast to be
23 cost-effectively achievable during the 5-year plan period.
24 The Commission shall review any proposed goal reduction as
25 part of its review and approval of the utility's proposed
26 plan.

HB3687- 59 -LRB100 06860 RJF 16909 b
1 Each utility's plan shall set forth the utility's proposals
2to meet the energy efficiency standards identified in
3subsection (b-5) or (b-15), as applicable and as such standards
4may have been modified under this subsection (f), taking into
5account the unique circumstances of the utility's service
6territory. For those plans commencing on January 1, 2018, the
7Commission shall seek public comment on the utility's plan and
8shall issue an order approving or disapproving each plan no
9later than August 31, 2017, or 105 days after the effective
10date of this amendatory Act of the 99th General Assembly,
11whichever is later. For those plans commencing after December
1231, 2021, the Commission shall seek public comment on the
13utility's plan and shall issue an order approving or
14disapproving each plan within 6 months after its submission. If
15the Commission disapproves a plan, the Commission shall, within
1630 days, describe in detail the reasons for the disapproval and
17describe a path by which the utility may file a revised draft
18of the plan to address the Commission's concerns
19satisfactorily. If the utility does not refile with the
20Commission within 60 days, the utility shall be subject to
21penalties at a rate of $100,000 per day until the plan is
22filed. This process shall continue, and penalties shall accrue,
23until the utility has successfully filed a portfolio of energy
24efficiency and demand-response measures. Penalties shall be
25deposited into the Energy Efficiency Trust Fund.
26 (g) In submitting proposed plans and funding levels under

HB3687- 60 -LRB100 06860 RJF 16909 b
1subsection (f) of this Section to meet the savings goals
2identified in subsection (b-5) or (b-15) of this Section, as
3applicable, the utility shall:
4 (1) Demonstrate that its proposed energy efficiency
5 measures will achieve the applicable requirements that are
6 identified in subsection (b-5) or (b-15) of this Section,
7 as modified by subsection (f) of this Section.
8 (2) Present specific proposals to implement new
9 building and appliance standards that have been placed into
10 effect.
11 (3) Demonstrate that its overall portfolio of
12 measures, not including low-income programs described in
13 subsection (c) of this Section, is cost-effective using the
14 total resource cost test or complies with paragraphs (1)
15 through (3) of subsection (f) of this Section and
16 represents a diverse cross-section of opportunities for
17 customers of all rate classes, other than those customers
18 described in subsection (l) of this Section, to participate
19 in the programs. Individual measures need not be cost
20 effective.
21 (4) Present a third-party energy efficiency
22 implementation program subject to the following
23 requirements:
24 (A) beginning with the year commencing January 1,
25 2019, electric utilities that serve more than
26 3,000,000 retail customers in the State shall fund

HB3687- 61 -LRB100 06860 RJF 16909 b
1 third-party energy efficiency programs in an amount
2 that is no less than $25,000,000 per year, and electric
3 utilities that serve less than 3,000,000 retail
4 customers but more than 500,000 retail customers in the
5 State shall fund third-party energy efficiency
6 programs in an amount that is no less than $8,350,000
7 per year;
8 (B) during 2018, the utility shall conduct a
9 solicitation process for purposes of requesting
10 proposals from third-party vendors for those
11 third-party energy efficiency programs to be offered
12 during one or more of the years commencing January 1,
13 2019, January 1, 2020, and January 1, 2021; for those
14 multi-year plans commencing on January 1, 2022 and
15 January 1, 2026, the utility shall conduct a
16 solicitation process during 2021 and 2025,
17 respectively, for purposes of requesting proposals
18 from third-party vendors for those third-party energy
19 efficiency programs to be offered during one or more
20 years of the respective multi-year plan period; for
21 each solicitation process, the utility shall identify
22 the sector, technology, or geographical area for which
23 it is seeking requests for proposals;
24 (C) the utility shall propose the bidder
25 qualifications, performance measurement process, and
26 contract structure, which must include a performance

HB3687- 62 -LRB100 06860 RJF 16909 b
1 payment mechanism and general terms and conditions;
2 the proposed qualifications, process, and structure
3 shall be subject to Commission approval; and
4 (D) the utility shall retain an independent third
5 party to score the proposals received through the
6 solicitation process described in this paragraph (4),
7 rank them according to their cost per lifetime
8 kilowatt-hours saved, and assemble the portfolio of
9 third-party programs.
10 The electric utility shall recover all costs
11 associated with Commission-approved, third-party
12 administered programs regardless of the success of those
13 programs.
14 (4.5)Implement cost-effective demand-response measures
15 to reduce peak demand by 0.1% over the prior year for
16 eligible retail customers, as defined in Section 16-111.5
17 of this Act, and for customers that elect hourly service
18 from the utility pursuant to Section 16-107 of this Act,
19 provided those customers have not been declared
20 competitive. This requirement continues until December 31,
21 2026.
22 (5) Include a proposed or revised cost-recovery tariff
23 mechanism, as provided for under subsection (d) of this
24 Section, to fund the proposed energy efficiency and
25 demand-response measures and to ensure the recovery of the
26 prudently and reasonably incurred costs of

HB3687- 63 -LRB100 06860 RJF 16909 b
1 Commission-approved programs.
2 (6) Provide for an annual independent evaluation of the
3 performance of the cost-effectiveness of the utility's
4 portfolio of measures, as well as a full review of the
5 multi-year plan results of the broader net program impacts
6 and, to the extent practical, for adjustment of the
7 measures on a going-forward basis as a result of the
8 evaluations. The resources dedicated to evaluation shall
9 not exceed 3% of portfolio resources in any given year.
10 (7) For electric utilities that serve more than
11 3,000,000 retail customers in the State:
12 (A) Through December 31, 2025, provide for an
13 adjustment to the return on equity component of the
14 utility's weighted average cost of capital calculated
15 under subsection (d) of this Section:
16 (i) If the independent evaluator determines
17 that the utility achieved a cumulative persisting
18 annual savings that is less than the applicable
19 annual incremental goal, then the return on equity
20 component shall be reduced by a maximum of 200
21 basis points in the event that the utility achieved
22 no more than 75% of such goal. If the utility
23 achieved more than 75% of the applicable annual
24 incremental goal but less than 100% of such goal,
25 then the return on equity component shall be
26 reduced by 8 basis points for each percent by which

HB3687- 64 -LRB100 06860 RJF 16909 b
1 the utility failed to achieve the goal.
2 (ii) If the independent evaluator determines
3 that the utility achieved a cumulative persisting
4 annual savings that is more than the applicable
5 annual incremental goal, then the return on equity
6 component shall be increased by a maximum of 200
7 basis points in the event that the utility achieved
8 at least 125% of such goal. If the utility achieved
9 more than 100% of the applicable annual
10 incremental goal but less than 125% of such goal,
11 then the return on equity component shall be
12 increased by 8 basis points for each percent by
13 which the utility achieved above the goal. If the
14 applicable annual incremental goal was reduced
15 under paragraphs (1) or (2) of subsection (f) of
16 this Section, then the following adjustments shall
17 be made to the calculations described in this item
18 (ii):
19 (aa) the calculation for determining
20 achievement that is at least 125% of the
21 applicable annual incremental goal shall use
22 the unreduced applicable annual incremental
23 goal to set the value; and
24 (bb) the calculation for determining
25 achievement that is less than 125% but more
26 than 100% of the applicable annual incremental

HB3687- 65 -LRB100 06860 RJF 16909 b
1 goal shall use the reduced applicable annual
2 incremental goal to set the value for 100%
3 achievement of the goal and shall use the
4 unreduced goal to set the value for 125%
5 achievement. The 8 basis point value shall also
6 be modified, as necessary, so that the 200
7 basis points are evenly apportioned among each
8 percentage point value between 100% and 125%
9 achievement.
10 (B) For the period January 1, 2026 through December
11 31, 2030, provide for an adjustment to the return on
12 equity component of the utility's weighted average
13 cost of capital calculated under subsection (d) of this
14 Section:
15 (i) If the independent evaluator determines
16 that the utility achieved a cumulative persisting
17 annual savings that is less than the applicable
18 annual incremental goal, then the return on equity
19 component shall be reduced by a maximum of 200
20 basis points in the event that the utility achieved
21 no more than 66% of such goal. If the utility
22 achieved more than 66% of the applicable annual
23 incremental goal but less than 100% of such goal,
24 then the return on equity component shall be
25 reduced by 6 basis points for each percent by which
26 the utility failed to achieve the goal.

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1 (ii) If the independent evaluator determines
2 that the utility achieved a cumulative persisting
3 annual savings that is more than the applicable
4 annual incremental goal, then the return on equity
5 component shall be increased by a maximum of 200
6 basis points in the event that the utility achieved
7 at least 134% of such goal. If the utility achieved
8 more than 100% of the applicable annual
9 incremental goal but less than 134% of such goal,
10 then the return on equity component shall be
11 increased by 6 basis points for each percent by
12 which the utility achieved above the goal. If the
13 applicable annual incremental goal was reduced
14 under paragraph (3) of subsection (f) of this
15 Section, then the following adjustments shall be
16 made to the calculations described in this item
17 (ii):
18 (aa) the calculation for determining
19 achievement that is at least 134% of the
20 applicable annual incremental goal shall use
21 the unreduced applicable annual incremental
22 goal to set the value; and
23 (bb) the calculation for determining
24 achievement that is less than 134% but more
25 than 100% of the applicable annual incremental
26 goal shall use the reduced applicable annual

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1 incremental goal to set the value for 100%
2 achievement of the goal and shall use the
3 unreduced goal to set the value for 134%
4 achievement. The 6 basis point value shall also
5 be modified, as necessary, so that the 200
6 basis points are evenly apportioned among each
7 percentage point value between 100% and 134%
8 achievement.
9 (7.5) For purposes of this Section, the term
10 "applicable annual incremental goal" means the difference
11 between the cumulative persisting annual savings goal for
12 the calendar year that is the subject of the independent
13 evaluator's determination and the cumulative persisting
14 annual savings goal for the immediately preceding calendar
15 year, as such goals are defined in subsections (b-5) and
16 (b-15) of this Section and as these goals may have been
17 modified as provided for under subsection (b-20) and
18 paragraphs (1) through (3) of subsection (f) of this
19 Section. Under subsections (b), (b-5), (b-10), and (b-15)
20 of this Section, a utility must first replace energy
21 savings from measures that have reached the end of their
22 measure lives and would otherwise have to be replaced to
23 meet the applicable savings goals identified in subsection
24 (b-5) or (b-15) of this Section before any progress towards
25 achievement of its applicable annual incremental goal may
26 be counted. Notwithstanding anything else set forth in this

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1 Section, the difference between the actual annual
2 incremental savings achieved in any given year, including
3 the replacement of energy savings from measures that have
4 expired, and the applicable annual incremental goal shall
5 not affect adjustments to the return on equity for
6 subsequent calendar years under this subsection (g).
7 (8) For electric utilities that serve less than
8 3,000,000 retail customers but more than 500,000 retail
9 customers in the State:
10 (A) Through December 31, 2025, the applicable
11 annual incremental goal shall be compared to the annual
12 incremental savings as determined by the independent
13 evaluator.
14 (i) The return on equity component shall be
15 reduced by 8 basis points for each percent by which
16 the utility did not achieve 84.4% of the applicable
17 annual incremental goal.
18 (ii) The return on equity component shall be
19 increased by 8 basis points for each percent by
20 which the utility exceeded 100% of the applicable
21 annual incremental goal.
22 (iii) The return on equity component shall not
23 be increased or decreased if the annual
24 incremental savings as determined by the
25 independent evaluator is greater than 84.4% of the
26 applicable annual incremental goal and less than

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1 100% of the applicable annual incremental goal.
2 (iv) The return on equity component shall not
3 be increased or decreased by an amount greater than
4 200 basis points pursuant to this subparagraph
5 (A).
6 (B) For the period of January 1, 2026 through
7 December 31, 2030, the applicable annual incremental
8 goal shall be compared to the annual incremental
9 savings as determined by the independent evaluator.
10 (i) The return on equity component shall be
11 reduced by 6 basis points for each percent by which
12 the utility did not achieve 100% of the applicable
13 annual incremental goal.
14 (ii) The return on equity component shall be
15 increased by 6 basis points for each percent by
16 which the utility exceeded 100% of the applicable
17 annual incremental goal.
18 (iii) The return on equity component shall not
19 be increased or decreased by an amount greater than
20 200 basis points pursuant to this subparagraph
21 (B).
22 (C) If the applicable annual incremental goal was
23 reduced under paragraphs (1), (2) or (3) of subsection
24 (f) of this Section, then the following adjustments
25 shall be made to the calculations described in
26 subparagraphs (A) and (B) of this paragraph (8):

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1 (i) The calculation for determining
2 achievement that is at least 125% or 134%, as
3 applicable, of the applicable annual incremental
4 goal shall use the unreduced applicable annual
5 incremental goal to set the value.
6 (ii) For the period through December 31, 2025,
7 the calculation for determining achievement that
8 is less than 125% but more than 100% of the
9 applicable annual incremental goal shall use the
10 reduced applicable annual incremental goal to set
11 the value for 100% achievement of the goal and
12 shall use the unreduced goal to set the value for
13 125% achievement. The 8 basis point value shall
14 also be modified, as necessary, so that the 200
15 basis points are evenly apportioned among each
16 percentage point value between 100% and 125%
17 achievement.
18 (iii) For the period of January 1, 2026 through
19 December 31, 2030, the calculation for determining
20 achievement that is less than 134% but more than
21 100% of the applicable annual incremental goal
22 shall use the reduced applicable annual
23 incremental goal to set the value for 100%
24 achievement of the goal and shall use the unreduced
25 goal to set the value for 125% achievement. The 6
26 basis point value shall also be modified, as

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1 necessary, so that the 200 basis points are evenly
2 apportioned among each percentage point value
3 between 100% and 134% achievement.
4 (9) The utility shall submit the energy savings data to
5 the independent evaluator no later than 30 days after the
6 close of the plan year. The independent evaluator shall
7 determine the cumulative persisting annual savings for a
8 given plan year no later than 120 days after the close of
9 the plan year. The utility shall submit an informational
10 filing to the Commission no later than 160 days after the
11 close of the plan year that attaches the independent
12 evaluator's final report identifying the cumulative
13 persisting annual savings for the year and calculates,
14 under paragraph (7) or (8) of this subsection (g), as
15 applicable, any resulting change to the utility's return on
16 equity component of the weighted average cost of capital
17 applicable to the next plan year beginning with the January
18 monthly billing period and extending through the December
19 monthly billing period. However, if the utility recovers
20 the costs incurred under this Section under paragraphs (2)
21 and (3) of subsection (d) of this Section, then the utility
22 shall not be required to submit such informational filing,
23 and shall instead submit the information that would
24 otherwise be included in the informational filing as part
25 of its filing under paragraph (3) of such subsection (d)
26 that is due on or before June 1 of each year.

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1 For those utilities that must submit the informational
2 filing, the Commission may, on its own motion or by
3 petition, initiate an investigation of such filing,
4 provided, however, that the utility's proposed return on
5 equity calculation shall be deemed the final, approved
6 calculation on December 15 of the year in which it is filed
7 unless the Commission enters an order on or before December
8 15, after notice and hearing, that modifies such
9 calculation consistent with this Section.
10 The adjustments to the return on equity component
11 described in paragraphs (7) and (8) of this subsection (g)
12 shall be applied as described in such paragraphs through a
13 separate tariff mechanism, which shall be filed by the
14 utility under subsections (f) and (g) of this Section.
15 (h) No more than 6% of energy efficiency and
16demand-response program revenue may be allocated for research,
17development, or pilot deployment of new equipment or measures.
18 (h-5) The utility shall develop a program that provides
19residential and small commercial customers a rebate for
20customer investment in technologies which result in at least a
213% reduction in the customers' energy usage from the previous
22calendar year on a weather normalized basis. The approved
23methodology shall be specific to the technology used. The
24program shall provide an option for the technology vendor or
25alternative retail electric supplier to conduct the
26verification calculation and submit rebates on behalf of the

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1customer. A customer may not receive recovery under more than
2one utility energy efficiency program, as defined in this
3Section, per technology.
4 (i) When practicable, electric utilities shall incorporate
5advanced metering infrastructure data into the planning,
6implementation, and evaluation of energy efficiency measures
7and programs, subject to the data privacy and confidentiality
8protections of applicable law.
9 (j) The independent evaluator shall follow the guidelines
10and use the savings set forth in Commission-approved energy
11efficiency policy manuals and technical reference manuals, as
12each may be updated from time to time. Until such time as
13measure life values for energy efficiency measures implemented
14for low-income households under subsection (c) of this Section
15are incorporated into such Commission-approved manuals, the
16low-income measures shall have the same measure life values
17that are established for same measures implemented in
18households that are not low-income households.
19 (k) Notwithstanding any provision of law to the contrary,
20an electric utility subject to the requirements of this Section
21may file a tariff cancelling an automatic adjustment clause
22tariff in effect under this Section or Section 8-103, which
23shall take effect no later than one business day after the date
24such tariff is filed. Thereafter, the utility shall be
25authorized to defer and recover its expenditures incurred under
26this Section through a new tariff authorized under subsection

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1(d) of this Section or in the utility's next rate case under
2Article IX or Section 16-108.5 of this Act, with interest at an
3annual rate equal to the utility's weighted average cost of
4capital as approved by the Commission in such case. If the
5utility elects to file a new tariff under subsection (d) of
6this Section, the utility may file the tariff within 10 days
7after the effective date of this amendatory Act of the 99th
8General Assembly, and the cost inputs to such tariff shall be
9based on the projected costs to be incurred by the utility
10during the calendar year in which the new tariff is filed and
11that were not recovered under the tariff that was cancelled as
12provided for in this subsection. Such costs shall include those
13incurred or to be incurred by the utility under its multi-year
14plan approved under subsections (f) and (g) of this Section,
15including, but not limited to, projected capital investment
16costs and projected regulatory asset balances with
17correspondingly updated depreciation and amortization reserves
18and expense. The Commission shall, after notice and hearing,
19approve, or approve with modification, such tariff and cost
20inputs no later than 75 days after the utility filed the
21tariff, provided that such approval, or approval with
22modification, shall be consistent with the provisions of this
23Section to the extent they do not conflict with this subsection
24(k). The tariff approved by the Commission shall take effect no
25later than 5 days after the Commission enters its order
26approving the tariff.

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1 No later than 60 days after the effective date of the
2tariff cancelling the utility's automatic adjustment clause
3tariff, the utility shall file a reconciliation that reconciles
4the moneys collected under its automatic adjustment clause
5tariff with the costs incurred during the period beginning June
61, 2016 and ending on the date that the electric utility's
7automatic adjustment clause tariff was cancelled. In the event
8the reconciliation reflects an under-collection, the utility
9shall recover the costs as specified in this subsection (k). If
10the reconciliation reflects an over-collection, the utility
11shall apply the amount of such over-collection as a one-time
12credit to retail customers' bills.
13 (l) For the calendar years covered by a multi-year plan
14commencing after December 31, 2017, subsections (a) through (j)
15of this Section do not apply to any retail customers of an
16electric utility that serves more than 3,000,000 retail
17customers in the State and whose total highest 30 minute demand
18was more than 10,000 kilowatts, or any retail customers of an
19electric utility that serves less than 3,000,000 retail
20customers but more than 500,000 retail customers in the State
21and whose total highest 15 minute demand was more than 10,000
22kilowatts. For purposes of this subsection (l), "retail
23customer" has the meaning set forth in Section 16-102 of this
24Act. A determination of whether this subsection is applicable
25to a customer shall be made for each multi-year plan beginning
26after December 31, 2017. The criteria for determining whether

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1this subsection (l) is applicable to a retail customer shall be
2based on the 12 consecutive billing periods prior to the start
3of the first year of each such multi-year plan.
4 (m) Notwithstanding the requirements of this Section, as
5part of a proceeding to approve a multi-year plan under
6subsections (f) and (g) of this Section, the Commission shall
7reduce the amount of energy efficiency measures implemented for
8any single year, and whose costs are recovered under subsection
9(d) of this Section, by an amount necessary to limit the
10estimated average net increase due to the cost of the measures
11to no more than
12 (1) 3.5% for the each of the 4 years beginning January
13 1, 2018,
14 (2) 3.75% for each of the 4 years beginning January 1,
15 2022, and
16 (3) 4% for each of the 5 years beginning January 1,
17 2026,
18of the average amount paid per kilowatthour by residential
19eligible retail customers during calendar year 2015. To
20determine the total amount that may be spent by an electric
21utility in any single year, the applicable percentage of the
22average amount paid per kilowatthour shall be multiplied by the
23total amount of energy delivered by such electric utility in
24the calendar year 2015, adjusted to reflect the proportion of
25the utility's load attributable to customers who are exempt
26from subsections (a) through (j) of this Section under

HB3687- 77 -LRB100 06860 RJF 16909 b
1subsection (l) of this Section. For purposes of this subsection
2(m), the amount paid per kilowatthour includes, without
3limitation, estimated amounts paid for supply, transmission,
4distribution, surcharges, and add-on taxes. For purposes of
5this Section, "eligible retail customers" shall have the
6meaning set forth in Section 16-111.5 of this Act. Once the
7Commission has approved a plan under subsections (f) and (g) of
8this Section, no subsequent rate impact determinations shall be
9made.
10(Source: P.A. 99-906, eff. 6-1-17.)
11 (220 ILCS 5/8-104)
12 (Text of Section before amendment by P.A. 99-906)
13 Sec. 8-104. Natural gas energy efficiency programs.
14 (a) It is the policy of the State that natural gas
15utilities and the Department of Commerce and Economic
16Opportunity are required to use cost-effective energy
17efficiency to reduce direct and indirect costs to consumers. It
18serves the public interest to allow natural gas utilities to
19recover costs for reasonably and prudently incurred expenses
20for cost-effective energy efficiency measures.
21 (b) For purposes of this Section, "energy efficiency" means
22measures that reduce the amount of energy required to achieve a
23given end use. "Energy efficiency" also includes measures that
24reduce the total Btus of electricity and natural gas needed to
25meet the end use or uses. "Cost-effective" means that the

HB3687- 78 -LRB100 06860 RJF 16909 b
1measures satisfy the total resource cost test which, for
2purposes of this Section, means a standard that is met if, for
3an investment in energy efficiency, the benefit-cost ratio is
4greater than one. The benefit-cost ratio is the ratio of the
5net present value of the total benefits of the measures to the
6net present value of the total costs as calculated over the
7lifetime of the measures. The total resource cost test compares
8the sum of avoided natural gas utility costs, representing the
9benefits that accrue to the system and the participant in the
10delivery of those efficiency measures, as well as other
11quantifiable societal benefits, including avoided electric
12utility costs, to the sum of all incremental costs of end use
13measures (including both utility and participant
14contributions), plus costs to administer, deliver, and
15evaluate each demand-side measure, to quantify the net savings
16obtained by substituting demand-side measures for supply
17resources. In calculating avoided costs, reasonable estimates
18shall be included for financial costs likely to be imposed by
19future regulation of emissions of greenhouse gases. The
20low-income programs described in item (4) of subsection (f) of
21this Section shall not be required to meet the total resource
22cost test.
23 (c) Natural gas utilities shall implement cost-effective
24energy efficiency measures to meet at least the following
25natural gas savings requirements, which shall be based upon the
26total amount of gas delivered to retail customers, other than

HB3687- 79 -LRB100 06860 RJF 16909 b
1the customers described in subsection (m) of this Section,
2during calendar year 2009 multiplied by the applicable
3percentage. Natural gas utilities may comply with this Section
4by meeting the annual incremental savings goal in the
5applicable year or by showing that total cumulative annual
6savings within a 3-year planning period associated with
7measures implemented after May 31, 2011 were equal to the sum
8of each annual incremental savings requirement from May 31,
92011 through the end of the applicable year:
10 (1) 0.2% by May 31, 2012;
11 (2) an additional 0.4% by May 31, 2013, increasing
12 total savings to .6%;
13 (3) an additional 0.6% by May 31, 2014, increasing
14 total savings to 1.2%;
15 (4) an additional 0.8% by May 31, 2015, increasing
16 total savings to 2.0%;
17 (5) an additional 1% by May 31, 2016, increasing total
18 savings to 3.0%;
19 (6) an additional 1.2% by May 31, 2017, increasing
20 total savings to 4.2%;
21 (7) an additional 1.4% by May 31, 2018, increasing
22 total savings to 5.6%;
23 (8) an additional 1.5% by May 31, 2019, increasing
24 total savings to 7.1%; and
25 (9) an additional 1.5% in each 12-month period
26 thereafter.

HB3687- 80 -LRB100 06860 RJF 16909 b
1 (d) Notwithstanding the requirements of subsection (c) of
2this Section, a natural gas utility shall limit the amount of
3energy efficiency implemented in any 3-year reporting period
4established by subsection (f) of Section 8-104 of this Act, by
5an amount necessary to limit the estimated average increase in
6the amounts paid by retail customers in connection with natural
7gas service to no more than 2% in the applicable 3-year
8reporting period. The energy savings requirements in
9subsection (c) of this Section may be reduced by the Commission
10for the subject plan, if the utility demonstrates by
11substantial evidence that it is highly unlikely that the
12requirements could be achieved without exceeding the
13applicable spending limits in any 3-year reporting period. No
14later than September 1, 2013, the Commission shall review the
15limitation on the amount of energy efficiency measures
16implemented pursuant to this Section and report to the General
17Assembly, in the report required by subsection (k) of this
18Section, its findings as to whether that limitation unduly
19constrains the procurement of energy efficiency measures.
20 (e) Natural gas utilities shall be responsible for
21overseeing the design, development, and filing of their
22efficiency plans with the Commission. The utility shall utilize
2375% of the available funding associated with energy efficiency
24programs approved by the Commission, and may outsource various
25aspects of program development and implementation. The
26remaining 25% of available funding shall be used by the

HB3687- 81 -LRB100 06860 RJF 16909 b
1Department of Commerce and Economic Opportunity to implement
2energy efficiency measures that achieve no less than 20% of the
3requirements of subsection (c) of this Section. Such measures
4shall be designed in conjunction with the utility and approved
5by the Commission. The Department may outsource development and
6implementation of energy efficiency measures. A minimum of 10%
7of the entire portfolio of cost-effective energy efficiency
8measures shall be procured from local government, municipal
9corporations, school districts, and community college
10districts. Five percent of the entire portfolio of
11cost-effective energy efficiency measures may be granted to
12local government and municipal corporations for market
13transformation initiatives. The Department shall coordinate
14the implementation of these measures and shall integrate
15delivery of natural gas efficiency programs with electric
16efficiency programs delivered pursuant to Section 8-103 of this
17Act, unless the Department can show that integration is not
18feasible.
19 The apportionment of the dollars to cover the costs to
20implement the Department's share of the portfolio of energy
21efficiency measures shall be made to the Department once the
22Department has executed rebate agreements, grants, or
23contracts for energy efficiency measures and provided
24supporting documentation for those rebate agreements, grants,
25and contracts to the utility. The Department is authorized to
26adopt any rules necessary and prescribe procedures in order to

HB3687- 82 -LRB100 06860 RJF 16909 b
1ensure compliance by applicants in carrying out the purposes of
2rebate agreements for energy efficiency measures implemented
3by the Department made under this Section.
4 The details of the measures implemented by the Department
5shall be submitted by the Department to the Commission in
6connection with the utility's filing regarding the energy
7efficiency measures that the utility implements.
8 A utility providing approved energy efficiency measures in
9this State shall be permitted to recover costs of those
10measures through an automatic adjustment clause tariff filed
11with and approved by the Commission. The tariff shall be
12established outside the context of a general rate case and
13shall be applicable to the utility's customers other than the
14customers described in subsection (m) of this Section. Each
15year the Commission shall initiate a review to reconcile any
16amounts collected with the actual costs and to determine the
17required adjustment to the annual tariff factor to match annual
18expenditures.
19 Each utility shall include, in its recovery of costs, the
20costs estimated for both the utility's and the Department's
21implementation of energy efficiency measures. Costs collected
22by the utility for measures implemented by the Department shall
23be submitted to the Department pursuant to Section 605-323 of
24the Civil Administrative Code of Illinois, shall be deposited
25into the Energy Efficiency Portfolio Standards Fund, and shall
26be used by the Department solely for the purpose of

HB3687- 83 -LRB100 06860 RJF 16909 b
1implementing these measures. A utility shall not be required to
2advance any moneys to the Department but only to forward such
3funds as it has collected. The Department shall report to the
4Commission on an annual basis regarding the costs actually
5incurred by the Department in the implementation of the
6measures. Any changes to the costs of energy efficiency
7measures as a result of plan modifications shall be
8appropriately reflected in amounts recovered by the utility and
9turned over to the Department.
10 The portfolio of measures, administered by both the
11utilities and the Department, shall, in combination, be
12designed to achieve the annual energy savings requirements set
13forth in subsection (c) of this Section, as modified by
14subsection (d) of this Section.
15 The utility and the Department shall agree upon a
16reasonable portfolio of measures and determine the measurable
17corresponding percentage of the savings goals associated with
18measures implemented by the Department.
19 No utility shall be assessed a penalty under subsection (f)
20of this Section for failure to make a timely filing if that
21failure is the result of a lack of agreement with the
22Department with respect to the allocation of responsibilities
23or related costs or target assignments. In that case, the
24Department and the utility shall file their respective plans
25with the Commission and the Commission shall determine an
26appropriate division of measures and programs that meets the

HB3687- 84 -LRB100 06860 RJF 16909 b
1requirements of this Section.
2 If the Department is unable to meet performance
3requirements for the portion of the portfolio implemented by
4the Department, then the utility and the Department shall
5jointly submit a modified filing to the Commission explaining
6the performance shortfall and recommending an appropriate
7course going forward, including any program modifications that
8may be appropriate in light of the evaluations conducted under
9item (8) of subsection (f) of this Section. In this case, the
10utility obligation to collect the Department's costs and turn
11over those funds to the Department under this subsection (e)
12shall continue only if the Commission approves the
13modifications to the plan proposed by the Department.
14 (f) No later than October 1, 2010, each gas utility shall
15file an energy efficiency plan with the Commission to meet the
16energy efficiency standards through May 31, 2014. Every 3 years
17thereafter, each utility shall file, no later than October 1,
18an energy efficiency plan with the Commission. If a utility
19does not file such a plan by October 1 of the applicable year,
20then it shall face a penalty of $100,000 per day until the plan
21is filed. Each utility's plan shall set forth the utility's
22proposals to meet the utility's portion of the energy
23efficiency standards identified in subsection (c) of this
24Section, as modified by subsection (d) of this Section, taking
25into account the unique circumstances of the utility's service
26territory. The Commission shall seek public comment on the

HB3687- 85 -LRB100 06860 RJF 16909 b
1utility's plan and shall issue an order approving or
2disapproving each plan. If the Commission disapproves a plan,
3the Commission shall, within 30 days, describe in detail the
4reasons for the disapproval and describe a path by which the
5utility may file a revised draft of the plan to address the
6Commission's concerns satisfactorily. If the utility does not
7refile with the Commission within 60 days after the
8disapproval, the utility shall be subject to penalties at a
9rate of $100,000 per day until the plan is filed. This process
10shall continue, and penalties shall accrue, until the utility
11has successfully filed a portfolio of energy efficiency
12measures. Penalties shall be deposited into the Energy
13Efficiency Trust Fund and the cost of any such penalties may
14not be recovered from ratepayers. In submitting proposed energy
15efficiency plans and funding levels to meet the savings goals
16adopted by this Act the utility shall:
17 (1) Demonstrate that its proposed energy efficiency
18 measures will achieve the requirements that are identified
19 in subsection (c) of this Section, as modified by
20 subsection (d) of this Section.
21 (2) Present specific proposals to implement new
22 building and appliance standards that have been placed into
23 effect.
24 (3) Present estimates of the total amount paid for gas
25 service expressed on a per therm basis associated with the
26 proposed portfolio of measures designed to meet the

HB3687- 86 -LRB100 06860 RJF 16909 b
1 requirements that are identified in subsection (c) of this
2 Section, as modified by subsection (d) of this Section.
3 (4) Coordinate with the Department to present a
4 portfolio of energy efficiency measures proportionate to
5 the share of total annual utility revenues in Illinois from
6 households at or below 150% of the poverty level. Such
7 programs shall be targeted to households with incomes at or
8 below 80% of area median income.
9 (5) Demonstrate that its overall portfolio of energy
10 efficiency measures, not including programs covered by
11 item (4) of this subsection (f), are cost-effective using
12 the total resource cost test and represent a diverse cross
13 section of opportunities for customers of all rate classes
14 to participate in the programs.
15 (6) Demonstrate that a gas utility affiliated with an
16 electric utility that is required to comply with Section
17 8-103 of this Act has integrated gas and electric
18 efficiency measures into a single program that reduces
19 program or participant costs and appropriately allocates
20 costs to gas and electric ratepayers. The Department shall
21 integrate all gas and electric programs it delivers in any
22 such utilities' service territories, unless the Department
23 can show that integration is not feasible or appropriate.
24 (7) Include a proposed cost recovery tariff mechanism
25 to fund the proposed energy efficiency measures and to
26 ensure the recovery of the prudently and reasonably

HB3687- 87 -LRB100 06860 RJF 16909 b
1 incurred costs of Commission-approved programs.
2 (8) Provide for quarterly status reports tracking
3 implementation of and expenditures for the utility's
4 portfolio of measures and the Department's portfolio of
5 measures, an annual independent review, and a full
6 independent evaluation of the 3-year results of the
7 performance and the cost-effectiveness of the utility's
8 and Department's portfolios of measures and broader net
9 program impacts and, to the extent practical, for
10 adjustment of the measures on a going forward basis as a
11 result of the evaluations. The resources dedicated to
12 evaluation shall not exceed 3% of portfolio resources in
13 any given 3-year period.
14 (g) No more than 3% of expenditures on energy efficiency
15measures may be allocated for demonstration of breakthrough
16equipment and devices.
17 (h) Illinois natural gas utilities that are affiliated by
18virtue of a common parent company may, at the utilities'
19request, be considered a single natural gas utility for
20purposes of complying with this Section.
21 (i) If, after 3 years, a gas utility fails to meet the
22efficiency standard specified in subsection (c) of this Section
23as modified by subsection (d), then it shall make a
24contribution to the Low-Income Home Energy Assistance Program.
25The total liability for failure to meet the goal shall be
26assessed as follows:

HB3687- 88 -LRB100 06860 RJF 16909 b
1 (1) a large gas utility shall pay $600,000;
2 (2) a medium gas utility shall pay $400,000; and
3 (3) a small gas utility shall pay $200,000.
4 For purposes of this Section, (i) a "large gas utility" is
5a gas utility that on December 31, 2008, served more than
61,500,000 gas customers in Illinois; (ii) a "medium gas
7utility" is a gas utility that on December 31, 2008, served
8fewer than 1,500,000, but more than 500,000 gas customers in
9Illinois; and (iii) a "small gas utility" is a gas utility that
10on December 31, 2008, served fewer than 500,000 and more than
11100,000 gas customers in Illinois. The costs of this
12contribution may not be recovered from ratepayers.
13 If a gas utility fails to meet the efficiency standard
14specified in subsection (c) of this Section, as modified by
15subsection (d) of this Section, in any 2 consecutive 3-year
16planning periods, then the responsibility for implementing the
17utility's energy efficiency measures shall be transferred to an
18independent program administrator selected by the Commission.
19Reasonable and prudent costs incurred by the independent
20program administrator to meet the efficiency standard
21specified in subsection (c) of this Section, as modified by
22subsection (d) of this Section, may be recovered from the
23customers of the affected gas utilities, other than customers
24described in subsection (m) of this Section. The utility shall
25provide the independent program administrator with all
26information and assistance necessary to perform the program

HB3687- 89 -LRB100 06860 RJF 16909 b
1administrator's duties including but not limited to customer,
2account, and energy usage data, and shall allow the program
3administrator to include inserts in customer bills. The utility
4may recover reasonable costs associated with any such
5assistance.
6 (j) No utility shall be deemed to have failed to meet the
7energy efficiency standards to the extent any such failure is
8due to a failure of the Department.
9 (k) Not later than January 1, 2012, the Commission shall
10develop and solicit public comment on a plan to foster
11statewide coordination and consistency between statutorily
12mandated natural gas and electric energy efficiency programs to
13reduce program or participant costs or to improve program
14performance. Not later than September 1, 2013, the Commission
15shall issue a report to the General Assembly containing its
16findings and recommendations.
17 (l) This Section does not apply to a gas utility that on
18January 1, 2009, provided gas service to fewer than 100,000
19customers in Illinois.
20 (m) Subsections (a) through (k) of this Section do not
21apply to customers of a natural gas utility that have a North
22American Industry Classification System code number that is
2322111 or any such code number beginning with the digits 31, 32,
24or 33 and (i) annual usage in the aggregate of 4 million therms
25or more within the service territory of the affected gas
26utility or with aggregate usage of 8 million therms or more in

HB3687- 90 -LRB100 06860 RJF 16909 b
1this State and complying with the provisions of item (l) of
2this subsection (m); or (ii) using natural gas as feedstock and
3meeting the usage requirements described in item (i) of this
4subsection (m), to the extent such annual feedstock usage is
5greater than 60% of the customer's total annual usage of
6natural gas.
7 (1) Customers described in this subsection (m) of this
8 Section shall apply, on a form approved on or before
9 October 1, 2009 by the Department, to the Department to be
10 designated as a self-directing customer ("SDC") or as an
11 exempt customer using natural gas as a feedstock from which
12 other products are made, including, but not limited to,
13 feedstock for a hydrogen plant, on or before the 1st day of
14 February, 2010. Thereafter, application may be made not
15 less than 6 months before the filing date of the gas
16 utility energy efficiency plan described in subsection (f)
17 of this Section; however, a new customer that commences
18 taking service from a natural gas utility after February 1,
19 2010 may apply to become a SDC or exempt customer up to 30
20 days after beginning service. Customers described in this
21 subsection (m) that have not already been approved by the
22 Department may apply to be designated a self-directing
23 customer or exempt customer, on a form approved by the
24 Department, between September 1, 2013 and September 30,
25 2013. Customer applications that are approved by the
26 Department under this amendatory Act of the 98th General

HB3687- 91 -LRB100 06860 RJF 16909 b
1 Assembly shall be considered to be a self-directing
2 customer or exempt customer, as applicable, for the current
3 3-year planning period effective December 1, 2013. Such
4 application shall contain the following:
5 (A) the customer's certification that, at the time
6 of its application, it qualifies to be a SDC or exempt
7 customer described in this subsection (m) of this
8 Section;
9 (B) in the case of a SDC, the customer's
10 certification that it has established or will
11 establish by the beginning of the utility's 3-year
12 planning period commencing subsequent to the
13 application, and will maintain for accounting
14 purposes, an energy efficiency reserve account and
15 that the customer will accrue funds in said account to
16 be held for the purpose of funding, in whole or in
17 part, energy efficiency measures of the customer's
18 choosing, which may include, but are not limited to,
19 projects involving combined heat and power systems
20 that use the same energy source both for the generation
21 of electrical or mechanical power and the production of
22 steam or another form of useful thermal energy or the
23 use of combustible gas produced from biomass, or both;
24 (C) in the case of a SDC, the customer's
25 certification that annual funding levels for the
26 energy efficiency reserve account will be equal to 2%

HB3687- 92 -LRB100 06860 RJF 16909 b
1 of the customer's cost of natural gas, composed of the
2 customer's commodity cost and the delivery service
3 charges paid to the gas utility, or $150,000, whichever
4 is less;
5 (D) in the case of a SDC, the customer's
6 certification that the required reserve account
7 balance will be capped at 3 years' worth of accruals
8 and that the customer may, at its option, make further
9 deposits to the account to the extent such deposit
10 would increase the reserve account balance above the
11 designated cap level;
12 (E) in the case of a SDC, the customer's
13 certification that by October 1 of each year, beginning
14 no sooner than October 1, 2012, the customer will
15 report to the Department information, for the 12-month
16 period ending May 31 of the same year, on all deposits
17 and reductions, if any, to the reserve account during
18 the reporting year, and to the extent deposits to the
19 reserve account in any year are in an amount less than
20 $150,000, the basis for such reduced deposits; reserve
21 account balances by month; a description of energy
22 efficiency measures undertaken by the customer and
23 paid for in whole or in part with funds from the
24 reserve account; an estimate of the energy saved, or to
25 be saved, by the measure; and that the report shall
26 include a verification by an officer or plant manager

HB3687- 93 -LRB100 06860 RJF 16909 b
1 of the customer or by a registered professional
2 engineer or certified energy efficiency trade
3 professional that the funds withdrawn from the reserve
4 account were used for the energy efficiency measures;
5 (F) in the case of an exempt customer, the
6 customer's certification of the level of gas usage as
7 feedstock in the customer's operation in a typical year
8 and that it will provide information establishing this
9 level, upon request of the Department;
10 (G) in the case of either an exempt customer or a
11 SDC, the customer's certification that it has provided
12 the gas utility or utilities serving the customer with
13 a copy of the application as filed with the Department;
14 (H) in the case of either an exempt customer or a
15 SDC, certification of the natural gas utility or
16 utilities serving the customer in Illinois including
17 the natural gas utility accounts that are the subject
18 of the application; and
19 (I) in the case of either an exempt customer or a
20 SDC, a verification signed by a plant manager or an
21 authorized corporate officer attesting to the
22 truthfulness and accuracy of the information contained
23 in the application.
24 (2) The Department shall review the application to
25 determine that it contains the information described in
26 provisions (A) through (I) of item (1) of this subsection

HB3687- 94 -LRB100 06860 RJF 16909 b
1 (m), as applicable. The review shall be completed within 30
2 days after the date the application is filed with the
3 Department. Absent a determination by the Department
4 within the 30-day period, the applicant shall be considered
5 to be a SDC or exempt customer, as applicable, for all
6 subsequent 3-year planning periods, as of the date of
7 filing the application described in this subsection (m). If
8 the Department determines that the application does not
9 contain the applicable information described in provisions
10 (A) through (I) of item (1) of this subsection (m), it
11 shall notify the customer, in writing, of its determination
12 that the application does not contain the required
13 information and identify the information that is missing,
14 and the customer shall provide the missing information
15 within 15 working days after the date of receipt of the
16 Department's notification.
17 (3) The Department shall have the right to audit the
18 information provided in the customer's application and
19 annual reports to ensure continued compliance with the
20 requirements of this subsection. Based on the audit, if the
21 Department determines the customer is no longer in
22 compliance with the requirements of items (A) through (I)
23 of item (1) of this subsection (m), as applicable, the
24 Department shall notify the customer in writing of the
25 noncompliance. The customer shall have 30 days to establish
26 its compliance, and failing to do so, may have its status

HB3687- 95 -LRB100 06860 RJF 16909 b
1 as a SDC or exempt customer revoked by the Department. The
2 Department shall treat all information provided by any
3 customer seeking SDC status or exemption from the
4 provisions of this Section as strictly confidential.
5 (4) Upon request, or on its own motion, the Commission
6 may open an investigation, no more than once every 3 years
7 and not before October 1, 2014, to evaluate the
8 effectiveness of the self-directing program described in
9 this subsection (m).
10 Customers described in this subsection (m) that applied to
11the Department on January 3, 2013, were approved by the
12Department on February 13, 2013 to be a self-directing customer
13or exempt customer, and receive natural gas from a utility that
14provides gas service to at least 500,000 retail customers in
15Illinois and electric service to at least 1,000,000 retail
16customers in Illinois shall be considered to be a
17self-directing customer or exempt customer, as applicable, for
18the current 3-year planning period effective December 1, 2013.
19 (n) The applicability of this Section to customers
20described in subsection (m) of this Section is conditioned on
21the existence of the SDC program. In no event will any
22provision of this Section apply to such customers after January
231, 2020.
24(Source: P.A. 97-813, eff. 7-13-12; 97-841, eff. 7-20-12;
2598-90, eff. 7-15-13; 98-225, eff. 8-9-13; 98-604, eff.
2612-17-13.)

HB3687- 96 -LRB100 06860 RJF 16909 b
1 (Text of Section after amendment by P.A. 99-906)
2 Sec. 8-104. Natural gas energy efficiency programs.
3 (a) It is the policy of the State that natural gas
4utilities and the Department of Commerce and Economic
5Opportunity are required to use cost-effective energy
6efficiency to reduce direct and indirect costs to consumers. It
7serves the public interest to allow natural gas utilities to
8recover costs for reasonably and prudently incurred expenses
9for cost-effective energy efficiency measures.
10 (b) For purposes of this Section, "energy efficiency" means
11measures that reduce the amount of energy required to achieve a
12given end use. "Energy efficiency" also includes measures that
13reduce the total Btus of electricity and natural gas needed to
14meet the end use or uses. "Cost-effective" means that the
15measures satisfy the total resource cost test which, for
16purposes of this Section, means a standard that is met if, for
17an investment in energy efficiency, the benefit-cost ratio is
18greater than one. The benefit-cost ratio is the ratio of the
19net present value of the total benefits of the measures to the
20net present value of the total costs as calculated over the
21lifetime of the measures. The total resource cost test compares
22the sum of avoided natural gas utility costs, representing the
23benefits that accrue to the system and the participant in the
24delivery of those efficiency measures, as well as other
25quantifiable societal benefits, including avoided electric

HB3687- 97 -LRB100 06860 RJF 16909 b
1utility costs, to the sum of all incremental costs of end use
2measures (including both utility and participant
3contributions), plus costs to administer, deliver, and
4evaluate each demand-side measure, to quantify the net savings
5obtained by substituting demand-side measures for supply
6resources. In calculating avoided costs, reasonable estimates
7shall be included for financial costs likely to be imposed by
8future regulation of emissions of greenhouse gases. The
9low-income programs described in item (4) of subsection (f) of
10this Section shall not be required to meet the total resource
11cost test.
12 (c) Natural gas utilities shall implement cost-effective
13energy efficiency measures to meet at least the following
14natural gas savings requirements, which shall be based upon the
15total amount of gas delivered to retail customers, other than
16the customers described in subsection (m) of this Section,
17during calendar year 2009 multiplied by the applicable
18percentage. Natural gas utilities may comply with this Section
19by meeting the annual incremental savings goal in the
20applicable year or by showing that total cumulative annual
21savings within a multi-year planning period associated with
22measures implemented after May 31, 2011 were equal to the sum
23of each annual incremental savings requirement from the first
24day of the multi-year planning period through the last day of
25the multi-year planning period:
26 (1) 0.2% by May 31, 2012;

HB3687- 98 -LRB100 06860 RJF 16909 b
1 (2) an additional 0.4% by May 31, 2013, increasing
2 total savings to .6%;
3 (3) an additional 0.6% by May 31, 2014, increasing
4 total savings to 1.2%;
5 (4) an additional 0.8% by May 31, 2015, increasing
6 total savings to 2.0%;
7 (5) an additional 1% by May 31, 2016, increasing total
8 savings to 3.0%;
9 (6) an additional 1.2% by May 31, 2017, increasing
10 total savings to 4.2%;
11 (7) an additional 1.4% in the year commencing January
12 1, 2018;
13 (8) an additional 1.5% in the year commencing January
14 1, 2019; and
15 (9) an additional 1.5% in each 12-month period
16 thereafter.
17 (d) Notwithstanding the requirements of subsection (c) of
18this Section, a natural gas utility shall limit the amount of
19energy efficiency implemented in any multi-year reporting
20period established by subsection (f) of Section 8-104 of this
21Act, by an amount necessary to limit the estimated average
22increase in the amounts paid by retail customers in connection
23with natural gas service to no more than 2% in the applicable
24multi-year reporting period. The energy savings requirements
25in subsection (c) of this Section may be reduced by the
26Commission for the subject plan, if the utility demonstrates by

HB3687- 99 -LRB100 06860 RJF 16909 b
1substantial evidence that it is highly unlikely that the
2requirements could be achieved without exceeding the
3applicable spending limits in any multi-year reporting period.
4No later than September 1, 2013, the Commission shall review
5the limitation on the amount of energy efficiency measures
6implemented pursuant to this Section and report to the General
7Assembly, in the report required by subsection (k) of this
8Section, its findings as to whether that limitation unduly
9constrains the procurement of energy efficiency measures.
10 (e) The provisions of this subsection (e) apply to those
11multi-year plans that commence prior to January 1, 2018. The
12utility shall utilize 75% of the available funding associated
13with energy efficiency programs approved by the Commission, and
14may outsource various aspects of program development and
15implementation. The remaining 25% of available funding shall be
16used by the Department of Commerce and Economic Opportunity to
17implement energy efficiency measures that achieve no less than
1820% of the requirements of subsection (c) of this Section. Such
19measures shall be designed in conjunction with the utility and
20approved by the Commission. The Department may outsource
21development and implementation of energy efficiency measures.
22A minimum of 10% of the entire portfolio of cost-effective
23energy efficiency measures shall be procured from local
24government, municipal corporations, school districts, and
25community college districts. Five percent of the entire
26portfolio of cost-effective energy efficiency measures may be

HB3687- 100 -LRB100 06860 RJF 16909 b
1granted to local government and municipal corporations for
2market transformation initiatives. The Department shall
3coordinate the implementation of these measures and shall
4integrate delivery of natural gas efficiency programs with
5electric efficiency programs delivered pursuant to Section
68-103 of this Act, unless the Department can show that
7integration is not feasible.
8 The apportionment of the dollars to cover the costs to
9implement the Department's share of the portfolio of energy
10efficiency measures shall be made to the Department once the
11Department has executed rebate agreements, grants, or
12contracts for energy efficiency measures and provided
13supporting documentation for those rebate agreements, grants,
14and contracts to the utility. The Department is authorized to
15adopt any rules necessary and prescribe procedures in order to
16ensure compliance by applicants in carrying out the purposes of
17rebate agreements for energy efficiency measures implemented
18by the Department made under this Section.
19 The details of the measures implemented by the Department
20shall be submitted by the Department to the Commission in
21connection with the utility's filing regarding the energy
22efficiency measures that the utility implements.
23 The portfolio of measures, administered by both the
24utilities and the Department, shall, in combination, be
25designed to achieve the annual energy savings requirements set
26forth in subsection (c) of this Section, as modified by

HB3687- 101 -LRB100 06860 RJF 16909 b
1subsection (d) of this Section.
2 The utility and the Department shall agree upon a
3reasonable portfolio of measures and determine the measurable
4corresponding percentage of the savings goals associated with
5measures implemented by the Department.
6 No utility shall be assessed a penalty under subsection (f)
7of this Section for failure to make a timely filing if that
8failure is the result of a lack of agreement with the
9Department with respect to the allocation of responsibilities
10or related costs or target assignments. In that case, the
11Department and the utility shall file their respective plans
12with the Commission and the Commission shall determine an
13appropriate division of measures and programs that meets the
14requirements of this Section.
15 (e-5) The provisions of this subsection (e-5) shall be
16applicable to those multi-year plans that commence after
17December 31, 2017. Natural gas utilities shall be responsible
18for overseeing the design, development, and filing of their
19efficiency plans with the Commission and may outsource
20development and implementation of energy efficiency measures.
21A minimum of 10% of the entire portfolio of cost-effective
22energy efficiency measures shall be procured from local
23government, municipal corporations, school districts, and
24community college districts. Five percent of the entire
25portfolio of cost-effective energy efficiency measures may be
26granted to local government and municipal corporations for

HB3687- 102 -LRB100 06860 RJF 16909 b
1market transformation initiatives.
2 The utilities shall also present a portfolio of energy
3efficiency measures proportionate to the share of total annual
4utility revenues in Illinois from households at or below 150%
5of the poverty level. Such programs shall be targeted to
6households with incomes at or below 80% of area median income.
7 (e-10) A utility providing approved energy efficiency
8measures in this State shall be permitted to recover costs of
9those measures through an automatic adjustment clause tariff
10filed with and approved by the Commission. The tariff shall be
11established outside the context of a general rate case and
12shall be applicable to the utility's customers other than the
13customers described in subsection (m) of this Section. Each
14year the Commission shall initiate a review to reconcile any
15amounts collected with the actual costs and to determine the
16required adjustment to the annual tariff factor to match annual
17expenditures.
18 (e-15) For those multi-year plans that commence prior to
19January 1, 2018, each utility shall include, in its recovery of
20costs, the costs estimated for both the utility's and the
21Department's implementation of energy efficiency measures.
22Costs collected by the utility for measures implemented by the
23Department shall be submitted to the Department pursuant to
24Section 605-323 of the Civil Administrative Code of Illinois,
25shall be deposited into the Energy Efficiency Portfolio
26Standards Fund, and shall be used by the Department solely for

HB3687- 103 -LRB100 06860 RJF 16909 b
1the purpose of implementing these measures. A utility shall not
2be required to advance any moneys to the Department but only to
3forward such funds as it has collected. The Department shall
4report to the Commission on an annual basis regarding the costs
5actually incurred by the Department in the implementation of
6the measures. Any changes to the costs of energy efficiency
7measures as a result of plan modifications shall be
8appropriately reflected in amounts recovered by the utility and
9turned over to the Department.
10 (f) No later than October 1, 2010, each gas utility shall
11file an energy efficiency plan with the Commission to meet the
12energy efficiency standards through May 31, 2014. No later than
13October 1, 2013, each gas utility shall file an energy
14efficiency plan with the Commission to meet the energy
15efficiency standards through May 31, 2017. Beginning in 2017
16and every 4 years thereafter, each utility shall file an energy
17efficiency plan with the Commission to meet the energy
18efficiency standards for the next applicable 4-year period
19beginning January 1 of the year following the filing. For those
20multi-year plans commencing on January 1, 2018, each utility
21shall file its proposed energy efficiency plan no later than 30
22days after the effective date of this amendatory Act of the
2399th General Assembly or May 1, 2017, whichever is later.
24Beginning in 2021 and every 4 years thereafter, each utility
25shall file its energy efficiency plan no later than March 1. If
26a utility does not file such a plan on or before the applicable

HB3687- 104 -LRB100 06860 RJF 16909 b
1filing deadline for the plan, then it shall face a penalty of
2$100,000 per day until the plan is filed.
3 Each utility's plan shall set forth the utility's proposals
4to meet the utility's portion of the energy efficiency
5standards identified in subsection (c) of this Section, as
6modified by subsection (d) of this Section, taking into account
7the unique circumstances of the utility's service territory.
8For those plans commencing after December 31, 2021, the
9Commission shall seek public comment on the utility's plan and
10shall issue an order approving or disapproving each plan within
116 months after its submission. For those plans commencing on
12January 1, 2018, the Commission shall seek public comment on
13the utility's plan and shall issue an order approving or
14disapproving each plan no later than August 31, 2017, or 105
15days after the effective date of this amendatory Act of the
1699th General Assembly, whichever is later. If the Commission
17disapproves a plan, the Commission shall, within 30 days,
18describe in detail the reasons for the disapproval and describe
19a path by which the utility may file a revised draft of the
20plan to address the Commission's concerns satisfactorily. If
21the utility does not refile with the Commission within 60 days
22after the disapproval, the utility shall be subject to
23penalties at a rate of $100,000 per day until the plan is
24filed. This process shall continue, and penalties shall accrue,
25until the utility has successfully filed a portfolio of energy
26efficiency measures. Penalties shall be deposited into the

HB3687- 105 -LRB100 06860 RJF 16909 b
1Energy Efficiency Trust Fund and the cost of any such penalties
2may not be recovered from ratepayers. In submitting proposed
3energy efficiency plans and funding levels to meet the savings
4goals adopted by this Act the utility shall:
5 (1) Demonstrate that its proposed energy efficiency
6 measures will achieve the requirements that are identified
7 in subsection (c) of this Section, as modified by
8 subsection (d) of this Section.
9 (2) Present specific proposals to implement new
10 building and appliance standards that have been placed into
11 effect.
12 (3) Present estimates of the total amount paid for gas
13 service expressed on a per therm basis associated with the
14 proposed portfolio of measures designed to meet the
15 requirements that are identified in subsection (c) of this
16 Section, as modified by subsection (d) of this Section.
17 (4) For those multi-year plans that commence prior to
18 January 1, 2018, coordinate with the Department to present
19 a portfolio of energy efficiency measures proportionate to
20 the share of total annual utility revenues in Illinois from
21 households at or below 150% of the poverty level. Such
22 programs shall be targeted to households with incomes at or
23 below 80% of area median income.
24 (5) Demonstrate that its overall portfolio of energy
25 efficiency measures, not including low-income programs
26 described in item (4) of this subsection (f) and subsection

HB3687- 106 -LRB100 06860 RJF 16909 b
1 (e-5) of this Section, are cost-effective using the total
2 resource cost test and represent a diverse cross section of
3 opportunities for customers of all rate classes to
4 participate in the programs.
5 (6) Demonstrate that a gas utility affiliated with an
6 electric utility that is required to comply with Section
7 8-103 or 8-103B of this Act has integrated gas and electric
8 efficiency measures into a single program that reduces
9 program or participant costs and appropriately allocates
10 costs to gas and electric ratepayers. For those multi-year
11 plans that commence prior to January 1, 2018, the
12 Department shall integrate all gas and electric programs it
13 delivers in any such utilities' service territories,
14 unless the Department can show that integration is not
15 feasible or appropriate.
16 (7) Include a proposed cost recovery tariff mechanism
17 to fund the proposed energy efficiency measures and to
18 ensure the recovery of the prudently and reasonably
19 incurred costs of Commission-approved programs.
20 (8) Provide for quarterly status reports tracking
21 implementation of and expenditures for the utility's
22 portfolio of measures and, if applicable, the Department's
23 portfolio of measures, an annual independent review, and a
24 full independent evaluation of the multi-year results of
25 the performance and the cost-effectiveness of the
26 utility's and, if applicable, Department's portfolios of

HB3687- 107 -LRB100 06860 RJF 16909 b
1 measures and broader net program impacts and, to the extent
2 practical, for adjustment of the measures on a going
3 forward basis as a result of the evaluations. The resources
4 dedicated to evaluation shall not exceed 3% of portfolio
5 resources in any given multi-year period.
6 (g) No more than 3% of expenditures on energy efficiency
7measures may be allocated for demonstration of breakthrough
8equipment and devices.
9 (g-5) The utility shall develop a program that provides
10residential and small commercial customers a rebate for
11customer investment in technologies which result in at least a
123% reduction in the customers' energy usage from the previous
13calendar year on a weather normalized basis. The approved
14methodology shall be specific to the technology used. The
15program shall provide an option for the technology vendor or
16alternative retail electric supplier to conduct the
17verification calculation and submit rebates on behalf of the
18customer. A customer may not receive recovery under more than
19one utility energy efficiency program, as defined in this
20Section, per technology.
21 (h) Illinois natural gas utilities that are affiliated by
22virtue of a common parent company may, at the utilities'
23request, be considered a single natural gas utility for
24purposes of complying with this Section.
25 (i) If, after 3 years, a gas utility fails to meet the
26efficiency standard specified in subsection (c) of this Section

HB3687- 108 -LRB100 06860 RJF 16909 b
1as modified by subsection (d), then it shall make a
2contribution to the Low-Income Home Energy Assistance Program.
3The total liability for failure to meet the goal shall be
4assessed as follows:
5 (1) a large gas utility shall pay $600,000;
6 (2) a medium gas utility shall pay $400,000; and
7 (3) a small gas utility shall pay $200,000.
8 For purposes of this Section, (i) a "large gas utility" is
9a gas utility that on December 31, 2008, served more than
101,500,000 gas customers in Illinois; (ii) a "medium gas
11utility" is a gas utility that on December 31, 2008, served
12fewer than 1,500,000, but more than 500,000 gas customers in
13Illinois; and (iii) a "small gas utility" is a gas utility that
14on December 31, 2008, served fewer than 500,000 and more than
15100,000 gas customers in Illinois. The costs of this
16contribution may not be recovered from ratepayers.
17 If a gas utility fails to meet the efficiency standard
18specified in subsection (c) of this Section, as modified by
19subsection (d) of this Section, in any 2 consecutive multi-year
20planning periods, then the responsibility for implementing the
21utility's energy efficiency measures shall be transferred to an
22independent program administrator selected by the Commission.
23Reasonable and prudent costs incurred by the independent
24program administrator to meet the efficiency standard
25specified in subsection (c) of this Section, as modified by
26subsection (d) of this Section, may be recovered from the

HB3687- 109 -LRB100 06860 RJF 16909 b
1customers of the affected gas utilities, other than customers
2described in subsection (m) of this Section. The utility shall
3provide the independent program administrator with all
4information and assistance necessary to perform the program
5administrator's duties including but not limited to customer,
6account, and energy usage data, and shall allow the program
7administrator to include inserts in customer bills. The utility
8may recover reasonable costs associated with any such
9assistance.
10 (j) No utility shall be deemed to have failed to meet the
11energy efficiency standards to the extent any such failure is
12due to a failure of the Department.
13 (k) Not later than January 1, 2012, the Commission shall
14develop and solicit public comment on a plan to foster
15statewide coordination and consistency between statutorily
16mandated natural gas and electric energy efficiency programs to
17reduce program or participant costs or to improve program
18performance. Not later than September 1, 2013, the Commission
19shall issue a report to the General Assembly containing its
20findings and recommendations.
21 (l) This Section does not apply to a gas utility that on
22January 1, 2009, provided gas service to fewer than 100,000
23customers in Illinois.
24 (m) Subsections (a) through (k) of this Section do not
25apply to customers of a natural gas utility that have a North
26American Industry Classification System code number that is

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122111 or any such code number beginning with the digits 31, 32,
2or 33 and (i) annual usage in the aggregate of 4 million therms
3or more within the service territory of the affected gas
4utility or with aggregate usage of 8 million therms or more in
5this State and complying with the provisions of item (l) of
6this subsection (m); or (ii) using natural gas as feedstock and
7meeting the usage requirements described in item (i) of this
8subsection (m), to the extent such annual feedstock usage is
9greater than 60% of the customer's total annual usage of
10natural gas.
11 (1) Customers described in this subsection (m) of this
12 Section shall apply, on a form approved on or before
13 October 1, 2009 by the Department, to the Department to be
14 designated as a self-directing customer ("SDC") or as an
15 exempt customer using natural gas as a feedstock from which
16 other products are made, including, but not limited to,
17 feedstock for a hydrogen plant, on or before the 1st day of
18 February, 2010. Thereafter, application may be made not
19 less than 6 months before the filing date of the gas
20 utility energy efficiency plan described in subsection (f)
21 of this Section; however, a new customer that commences
22 taking service from a natural gas utility after February 1,
23 2010 may apply to become a SDC or exempt customer up to 30
24 days after beginning service. Customers described in this
25 subsection (m) that have not already been approved by the
26 Department may apply to be designated a self-directing

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1 customer or exempt customer, on a form approved by the
2 Department, between September 1, 2013 and September 30,
3 2013. Customer applications that are approved by the
4 Department under this amendatory Act of the 98th General
5 Assembly shall be considered to be a self-directing
6 customer or exempt customer, as applicable, for the current
7 3-year planning period effective December 1, 2013. Such
8 application shall contain the following:
9 (A) the customer's certification that, at the time
10 of its application, it qualifies to be a SDC or exempt
11 customer described in this subsection (m) of this
12 Section;
13 (B) in the case of a SDC, the customer's
14 certification that it has established or will
15 establish by the beginning of the utility's multi-year
16 planning period commencing subsequent to the
17 application, and will maintain for accounting
18 purposes, an energy efficiency reserve account and
19 that the customer will accrue funds in said account to
20 be held for the purpose of funding, in whole or in
21 part, energy efficiency measures of the customer's
22 choosing, which may include, but are not limited to,
23 projects involving combined heat and power systems
24 that use the same energy source both for the generation
25 of electrical or mechanical power and the production of
26 steam or another form of useful thermal energy or the

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1 use of combustible gas produced from biomass, or both;
2 (C) in the case of a SDC, the customer's
3 certification that annual funding levels for the
4 energy efficiency reserve account will be equal to 2%
5 of the customer's cost of natural gas, composed of the
6 customer's commodity cost and the delivery service
7 charges paid to the gas utility, or $150,000, whichever
8 is less;
9 (D) in the case of a SDC, the customer's
10 certification that the required reserve account
11 balance will be capped at 3 years' worth of accruals
12 and that the customer may, at its option, make further
13 deposits to the account to the extent such deposit
14 would increase the reserve account balance above the
15 designated cap level;
16 (E) in the case of a SDC, the customer's
17 certification that by October 1 of each year, beginning
18 no sooner than October 1, 2012, the customer will
19 report to the Department information, for the 12-month
20 period ending May 31 of the same year, on all deposits
21 and reductions, if any, to the reserve account during
22 the reporting year, and to the extent deposits to the
23 reserve account in any year are in an amount less than
24 $150,000, the basis for such reduced deposits; reserve
25 account balances by month; a description of energy
26 efficiency measures undertaken by the customer and

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1 paid for in whole or in part with funds from the
2 reserve account; an estimate of the energy saved, or to
3 be saved, by the measure; and that the report shall
4 include a verification by an officer or plant manager
5 of the customer or by a registered professional
6 engineer or certified energy efficiency trade
7 professional that the funds withdrawn from the reserve
8 account were used for the energy efficiency measures;
9 (F) in the case of an exempt customer, the
10 customer's certification of the level of gas usage as
11 feedstock in the customer's operation in a typical year
12 and that it will provide information establishing this
13 level, upon request of the Department;
14 (G) in the case of either an exempt customer or a
15 SDC, the customer's certification that it has provided
16 the gas utility or utilities serving the customer with
17 a copy of the application as filed with the Department;
18 (H) in the case of either an exempt customer or a
19 SDC, certification of the natural gas utility or
20 utilities serving the customer in Illinois including
21 the natural gas utility accounts that are the subject
22 of the application; and
23 (I) in the case of either an exempt customer or a
24 SDC, a verification signed by a plant manager or an
25 authorized corporate officer attesting to the
26 truthfulness and accuracy of the information contained

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1 in the application.
2 (2) The Department shall review the application to
3 determine that it contains the information described in
4 provisions (A) through (I) of item (1) of this subsection
5 (m), as applicable. The review shall be completed within 30
6 days after the date the application is filed with the
7 Department. Absent a determination by the Department
8 within the 30-day period, the applicant shall be considered
9 to be a SDC or exempt customer, as applicable, for all
10 subsequent multi-year planning periods, as of the date of
11 filing the application described in this subsection (m). If
12 the Department determines that the application does not
13 contain the applicable information described in provisions
14 (A) through (I) of item (1) of this subsection (m), it
15 shall notify the customer, in writing, of its determination
16 that the application does not contain the required
17 information and identify the information that is missing,
18 and the customer shall provide the missing information
19 within 15 working days after the date of receipt of the
20 Department's notification.
21 (3) The Department shall have the right to audit the
22 information provided in the customer's application and
23 annual reports to ensure continued compliance with the
24 requirements of this subsection. Based on the audit, if the
25 Department determines the customer is no longer in
26 compliance with the requirements of items (A) through (I)

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1 of item (1) of this subsection (m), as applicable, the
2 Department shall notify the customer in writing of the
3 noncompliance. The customer shall have 30 days to establish
4 its compliance, and failing to do so, may have its status
5 as a SDC or exempt customer revoked by the Department. The
6 Department shall treat all information provided by any
7 customer seeking SDC status or exemption from the
8 provisions of this Section as strictly confidential.
9 (4) Upon request, or on its own motion, the Commission
10 may open an investigation, no more than once every 3 years
11 and not before October 1, 2014, to evaluate the
12 effectiveness of the self-directing program described in
13 this subsection (m).
14 Customers described in this subsection (m) that applied to
15the Department on January 3, 2013, were approved by the
16Department on February 13, 2013 to be a self-directing customer
17or exempt customer, and receive natural gas from a utility that
18provides gas service to at least 500,000 retail customers in
19Illinois and electric service to at least 1,000,000 retail
20customers in Illinois shall be considered to be a
21self-directing customer or exempt customer, as applicable, for
22the current 3-year planning period effective December 1, 2013.
23 (n) The applicability of this Section to customers
24described in subsection (m) of this Section is conditioned on
25the existence of the SDC program. In no event will any
26provision of this Section apply to such customers after January

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11, 2020.
2 (o) Utilities' 3-year energy efficiency plans approved by
3the Commission on or before the effective date of this
4amendatory Act of the 99th General Assembly for the period June
51, 2014 through May 31, 2017 shall continue to be in force and
6effect through December 31, 2017 so that the energy efficiency
7programs set forth in those plans continue to be offered during
8the period June 1, 2017 through December 31, 2017. Each utility
9is authorized to increase, on a pro rata basis, the energy
10savings goals and budgets approved in its plan to reflect the
11additional 7 months of the plan's operation.
12(Source: P.A. 98-90, eff. 7-15-13; 98-225, eff. 8-9-13; 98-604,
13eff. 12-17-13; 99-906, eff. 6-1-17.)
14 Section 95. No acceleration or delay. Where this Act makes
15changes in a statute that is represented in this Act by text
16that is not yet or no longer in effect (for example, a Section
17represented by multiple versions), the use of that text does
18not accelerate or delay the taking effect of (i) the changes
19made by this Act or (ii) provisions derived from any other
20Public Act.
21 Section 99. Effective date. This Act takes effect upon
22becoming law or on the date that the provisions of Public Act
2399-906 amending Sections 8-103, 8-103B, and 8-104 of the Public
24Utilities Act take effect, whichever is later.
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