Illinois-2017-HB4236-Introduced

100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB4236

Introduced , by Rep. Reginald Phillips

SYNOPSIS AS INTRODUCED:

20 ILCS 3855/1-75

Amends the Illinois Power Agency Act. Provides that the Illinois Power Agency and Illinois Commerce Commission shall include sourcing agreements covering power produced by clean coal and other facilities in each annual power procurement plan. Provides that utilities and alternative retail electric suppliers shall enter into sourcing agreements as part of the annual power procurement process. Provides that the Agency and Commission shall establish competitive bidding procedures for sourcing terms. Sets the requirements of the sourcing agreements. Effective June 1, 2018.

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A BILL FOR

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1 AN ACT concerning regulation.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Power Agency Act is amended by

5 changing Section 1-75 as follows:

6 (20 ILCS 3855/1-75)

7 Sec. 1-75. Planning and Procurement Bureau. The Planning

8 and Procurement Bureau has the following duties and

9 responsibilities:

10 (a) The Planning and Procurement Bureau shall each year,

11 beginning in 2008, develop procurement plans and conduct

12 competitive procurement processes in accordance with the

13 requirements of Section 16-111.5 of the Public Utilities Act

14 for the eligible retail customers of electric utilities that on

15 December 31, 2005 provided electric service to at least 100,000

16 customers in Illinois. Beginning with the delivery year

17 commencing on June 1, 2017, the Planning and Procurement Bureau

18 shall develop plans and processes for the procurement of zero

19 emission credits from zero emission facilities in accordance

20 with the requirements of subsection (d-5) of this Section. The

21 Planning and Procurement Bureau shall also develop procurement

22 plans and conduct competitive procurement processes in

23 accordance with the requirements of Section 16-111.5 of the

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1 Public Utilities Act for the eligible retail customers of small

2 multi-jurisdictional electric utilities that (i) on December

3 31, 2005 served less than 100,000 customers in Illinois and

4 (ii) request a procurement plan for their Illinois

5 jurisdictional load. This Section shall not apply to a small

6 multi-jurisdictional utility until such time as a small

7 multi-jurisdictional utility requests the Agency to prepare a

8 procurement plan for their Illinois jurisdictional load. For

9 the purposes of this Section, the term "eligible retail

10 customers" has the same definition as found in Section

11 16-111.5(a) of the Public Utilities Act.

12 Beginning with the plan or plans to be implemented in the

13 2017 delivery year, the Agency shall no longer include the

14 procurement of renewable energy resources in the annual

15 procurement plans required by this subsection (a), except as

16 provided in subsection (q) of Section 16-111.5 of the Public

17 Utilities Act, and shall instead develop a long-term renewable

18 resources procurement plan in accordance with subsection (c) of

19 this Section and Section 16-111.5 of the Public Utilities Act.

20 (1) The Agency shall each year, beginning in 2008, as

21 needed, issue a request for qualifications for experts or

22 expert consulting firms to develop the procurement plans in

23 accordance with Section 16-111.5 of the Public Utilities

24 Act. In order to qualify an expert or expert consulting

25 firm must have:

26 (A) direct previous experience assembling

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1 large-scale power supply plans or portfolios for

2 end-use customers;

3 (B) an advanced degree in economics, mathematics,

4 engineering, risk management, or a related area of

5 study;

6 (C) 10 years of experience in the electricity

7 sector, including managing supply risk;

8 (D) expertise in wholesale electricity market

9 rules, including those established by the Federal

10 Energy Regulatory Commission and regional transmission

11 organizations;

12 (E) expertise in credit protocols and familiarity

13 with contract protocols;

14 (F) adequate resources to perform and fulfill the

15 required functions and responsibilities; and

16 (G) the absence of a conflict of interest and

17 inappropriate bias for or against potential bidders or

18 the affected electric utilities.

19 (2) The Agency shall each year, as needed, issue a

20 request for qualifications for a procurement administrator

21 to conduct the competitive procurement processes in

22 accordance with Section 16-111.5 of the Public Utilities

23 Act. In order to qualify an expert or expert consulting

24 firm must have:

25 (A) direct previous experience administering a

26 large-scale competitive procurement process;

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1 (B) an advanced degree in economics, mathematics,

2 engineering, or a related area of study;

3 (C) 10 years of experience in the electricity

4 sector, including risk management experience;

5 (D) expertise in wholesale electricity market

6 rules, including those established by the Federal

7 Energy Regulatory Commission and regional transmission

8 organizations;

9 (E) expertise in credit and contract protocols;

10 (F) adequate resources to perform and fulfill the

11 required functions and responsibilities; and

12 (G) the absence of a conflict of interest and

13 inappropriate bias for or against potential bidders or

14 the affected electric utilities.

15 (3) The Agency shall provide affected utilities and

16 other interested parties with the lists of qualified

17 experts or expert consulting firms identified through the

18 request for qualifications processes that are under

19 consideration to develop the procurement plans and to serve

20 as the procurement administrator. The Agency shall also

21 provide each qualified expert's or expert consulting

22 firm's response to the request for qualifications. All

23 information provided under this subparagraph shall also be

24 provided to the Commission. The Agency may provide by rule

25 for fees associated with supplying the information to

26 utilities and other interested parties. These parties

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1 shall, within 5 business days, notify the Agency in writing

2 if they object to any experts or expert consulting firms on

3 the lists. Objections shall be based on:

4 (A) failure to satisfy qualification criteria;

5 (B) identification of a conflict of interest; or

6 (C) evidence of inappropriate bias for or against

7 potential bidders or the affected utilities.

8 The Agency shall remove experts or expert consulting

9 firms from the lists within 10 days if there is a

10 reasonable basis for an objection and provide the updated

11 lists to the affected utilities and other interested

12 parties. If the Agency fails to remove an expert or expert

13 consulting firm from a list, an objecting party may seek

14 review by the Commission within 5 days thereafter by filing

15 a petition, and the Commission shall render a ruling on the

16 petition within 10 days. There is no right of appeal of the

17 Commission's ruling.

18 (4) The Agency shall issue requests for proposals to

19 the qualified experts or expert consulting firms to develop

20 a procurement plan for the affected utilities and to serve

21 as procurement administrator.

22 (5) The Agency shall select an expert or expert

23 consulting firm to develop procurement plans based on the

24 proposals submitted and shall award contracts of up to 5

25 years to those selected.

26 (6) The Agency shall select an expert or expert

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1 consulting firm, with approval of the Commission, to serve

2 as procurement administrator based on the proposals

3 submitted. If the Commission rejects, within 5 days, the

4 Agency's selection, the Agency shall submit another

5 recommendation within 3 days based on the proposals

6 submitted. The Agency shall award a 5-year contract to the

7 expert or expert consulting firm so selected with

8 Commission approval.

9 (b) The experts or expert consulting firms retained by the

10 Agency shall, as appropriate, prepare procurement plans, and

11 conduct a competitive procurement process as prescribed in

12 Section 16-111.5 of the Public Utilities Act, to ensure

13 adequate, reliable, affordable, efficient, and environmentally

14 sustainable electric service at the lowest total cost over

15 time, taking into account any benefits of price stability, for

16 eligible retail customers of electric utilities that on

17 December 31, 2005 provided electric service to at least 100,000

18 customers in the State of Illinois, and for eligible Illinois

19 retail customers of small multi-jurisdictional electric

20 utilities that (i) on December 31, 2005 served less than

21 100,000 customers in Illinois and (ii) request a procurement

22 plan for their Illinois jurisdictional load.

23 (c) Renewable portfolio standard.

24 (1)(A) The Agency shall develop a long-term renewable

25 resources procurement plan that shall include procurement

26 programs and competitive procurement events necessary to

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1 meet the goals set forth in this subsection (c). The

2 initial long-term renewable resources procurement plan

3 shall be released for comment no later than 160 days after

4 June 1, 2017 (the effective date of Public Act 99-906) ~~this~~

5 ~~amendatory Act of the 99th General Assembly~~. The Agency

6 shall review, and may revise on an expedited basis, the

7 long-term renewable resources procurement plan at least

8 every 2 years, which shall be conducted in conjunction with

9 the procurement plan under Section 16-111.5 of the Public

10 Utilities Act to the extent practicable to minimize

11 administrative expense. The long-term renewable resources

12 procurement plans shall be subject to review and approval

13 by the Commission under Section 16-111.5 of the Public

14 Utilities Act.

15 (B) Subject to subparagraph (F) of this paragraph (1),

16 the long-term renewable resources procurement plan shall

17 include the goals for procurement of renewable energy

18 credits to meet at least the following overall percentages:

19 13% by the 2017 delivery year; increasing by at least 1.5%

20 each delivery year thereafter to at least 25% by the 2025

21 delivery year; and continuing at no less than 25% for each

22 delivery year thereafter. In the event of a conflict

23 between these goals and the new wind and new photovoltaic

24 procurement requirements described in items (i) through

25 (iii) of subparagraph (C) of this paragraph (1), the

26 long-term plan shall prioritize compliance with the new

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1 wind and new photovoltaic procurement requirements

2 described in items (i) through (iii) of subparagraph (C) of

3 this paragraph (1) over the annual percentage targets

4 described in this subparagraph (B).

5 For the delivery year beginning June 1, 2017, the

6 procurement plan shall include cost-effective renewable

7 energy resources equal to at least 13% of each utility's

8 load for eligible retail customers and 13% of the

9 applicable portion of each utility's load for retail

10 customers who are not eligible retail customers, which

11 applicable portion shall equal 50% of the utility's load

12 for retail customers who are not eligible retail customers

13 on February 28, 2017.

14 For the delivery year beginning June 1, 2018, the

15 procurement plan shall include cost-effective renewable

16 energy resources equal to at least 14.5% of each utility's

17 load for eligible retail customers and 14.5% of the

18 applicable portion of each utility's load for retail

19 customers who are not eligible retail customers, which

20 applicable portion shall equal 75% of the utility's load

21 for retail customers who are not eligible retail customers

22 on February 28, 2017.

23 For the delivery year beginning June 1, 2019, and for

24 each year thereafter, the procurement plans shall include

25 cost-effective renewable energy resources equal to a

26 minimum percentage of each utility's load for all retail

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1 customers as follows: 16% by June 1, 2019; increasing by

2 1.5% each year thereafter to 25% by June 1, 2025; and 25%

3 by June 1, 2026 and each year thereafter.

4 For each delivery year, the Agency shall first

5 recognize each utility's obligations for that delivery

6 year under existing contracts. Any renewable energy

7 credits under existing contracts, including renewable

8 energy credits as part of renewable energy resources, shall

9 be used to meet the goals set forth in this subsection (c)

10 for the delivery year.

11 (C) Of the renewable energy credits procured under this

12 subsection (c), at least 75% shall come from wind and

13 photovoltaic projects. The long-term renewable resources

14 procurement plan described in subparagraph (A) of this

15 paragraph (1) shall include the procurement of renewable

16 energy credits in amounts equal to at least the following:

17 (i) By the end of the 2020 delivery year:

18 At least 2,000,000 renewable energy credits

19 for each delivery year shall come from new wind

20 projects; and

21 At least 2,000,000 renewable energy credits

22 for each delivery year shall come from new

23 photovoltaic projects; of that amount, to the

24 extent possible, the Agency shall procure: at

25 least 50% from solar photovoltaic projects using

26 the program outlined in subparagraph (K) of this

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1 paragraph (1) from distributed renewable energy

2 generation devices or community renewable

3 generation projects; at least 40% from

4 utility-scale solar projects; at least 2% from

5 brownfield site photovoltaic projects that are not

6 community renewable generation projects; and the

7 remainder shall be determined through the

8 long-term planning process described in

9 subparagraph (A) of this paragraph (1).

10 (ii) By the end of the 2025 delivery year:

11 At least 3,000,000 renewable energy credits

12 for each delivery year shall come from new wind

13 projects; and

14 At least 3,000,000 renewable energy credits

15 for each delivery year shall come from new

16 photovoltaic projects; of that amount, to the

17 extent possible, the Agency shall procure: at

18 least 50% from solar photovoltaic projects using

19 the program outlined in subparagraph (K) of this

20 paragraph (1) from distributed renewable energy

21 devices or community renewable generation

22 projects; at least 40% from utility-scale solar

23 projects; at least 2% from brownfield site

24 photovoltaic projects that are not community

25 renewable generation projects; and the remainder

26 shall be determined through the long-term planning

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1 process described in subparagraph (A) of this

2 paragraph (1).

3 (iii) By the end of the 2030 delivery year:

4 At least 4,000,000 renewable energy credits

5 for each delivery year shall come from new wind

6 projects; and

7 At least 4,000,000 renewable energy credits

8 for each delivery year shall come from new

9 photovoltaic projects; of that amount, to the

10 extent possible, the Agency shall procure: at

11 least 50% from solar photovoltaic projects using

12 the program outlined in subparagraph (K) of this

13 paragraph (1) from distributed renewable energy

14 devices or community renewable generation

15 projects; at least 40% from utility-scale solar

16 projects; at least 2% from brownfield site

17 photovoltaic projects that are not community

18 renewable generation projects; and the remainder

19 shall be determined through the long-term planning

20 process described in subparagraph (A) of this

21 paragraph (1).

22 For purposes of this Section:

23 "New wind projects" means wind renewable

24 energy facilities that are energized after June 1,

25 2017 for the delivery year commencing June 1, 2017

26 or within 3 years after the date the Commission

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1 approves contracts for subsequent delivery years.

2 "New photovoltaic projects" means photovoltaic

3 renewable energy facilities that are energized

4 after June 1, 2017. Photovoltaic projects

5 developed under Section 1-56 of this Act shall not

6 apply towards the new photovoltaic project

7 requirements in this subparagraph (C).

8 (D) Renewable energy credits shall be cost effective.

9 For purposes of this subsection (c), "cost effective" means

10 that the costs of procuring renewable energy resources do

11 not cause the limit stated in subparagraph (E) of this

12 paragraph (1) to be exceeded and, for renewable energy

13 credits procured through a competitive procurement event,

14 do not exceed benchmarks based on market prices for like

15 products in the region. For purposes of this subsection

16 (c), "like products" means contracts for renewable energy

17 credits from the same or substantially similar technology,

18 same or substantially similar vintage (new or existing),

19 the same or substantially similar quantity, and the same or

20 substantially similar contract length and structure.

21 Benchmarks shall be developed by the procurement

22 administrator, in consultation with the Commission staff,

23 Agency staff, and the procurement monitor and shall be

24 subject to Commission review and approval. If price

25 benchmarks for like products in the region are not

26 available, the procurement administrator shall establish

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1 price benchmarks based on publicly available data on

2 regional technology costs and expected current and future

3 regional energy prices. The benchmarks in this Section

4 shall not be used to curtail or otherwise reduce

5 contractual obligations entered into by or through the

6 Agency prior to June 1, 2017 (the effective date of Public

7 Act 99-906) ~~this amendatory Act of the 99th General~~

8 ~~Assembly~~.

9 (E) For purposes of this subsection (c), the required

10 procurement of cost-effective renewable energy resources

11 for a particular year commencing prior to June 1, 2017

12 shall be measured as a percentage of the actual amount of

13 electricity (megawatt-hours) supplied by the electric

14 utility to eligible retail customers in the delivery year

15 ending immediately prior to the procurement, and, for

16 delivery years commencing on and after June 1, 2017, the

17 required procurement of cost-effective renewable energy

18 resources for a particular year shall be measured as a

19 percentage of the actual amount of electricity

20 (megawatt-hours) delivered by the electric utility in the

21 delivery year ending immediately prior to the procurement,

22 to all retail customers in its service territory. For

23 purposes of this subsection (c), the amount paid per

24 kilowatthour means the total amount paid for electric

25 service expressed on a per kilowatthour basis. For purposes

26 of this subsection (c), the total amount paid for electric

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1 service includes without limitation amounts paid for

2 supply, transmission, distribution, surcharges, and add-on

3 taxes.

4 Notwithstanding the requirements of this subsection

5 (c), the total of renewable energy resources procured under

6 the procurement plan for any single year shall be subject

7 to the limitations of this subparagraph (E). Such

8 procurement shall be reduced for all retail customers based

9 on the amount necessary to limit the annual estimated

10 average net increase due to the costs of these resources

11 included in the amounts paid by eligible retail customers

12 in connection with electric service to no more than the

13 greater of 2.015% of the amount paid per kilowatthour by

14 those customers during the year ending May 31, 2007 or the

15 incremental amount per kilowatthour paid for these

16 resources in 2011. To arrive at a maximum dollar amount of

17 renewable energy resources to be procured for the

18 particular delivery year, the resulting per kilowatthour

19 amount shall be applied to the actual amount of

20 kilowatthours of electricity delivered, or applicable

21 portion of such amount as specified in paragraph (1) of

22 this subsection (c), as applicable, by the electric utility

23 in the delivery year immediately prior to the procurement

24 to all retail customers in its service territory. The

25 calculations required by this subparagraph (E) shall be

26 made only once for each delivery year at the time that the

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1 renewable energy resources are procured. Once the

2 determination as to the amount of renewable energy

3 resources to procure is made based on the calculations set

4 forth in this subparagraph (E) and the contracts procuring

5 those amounts are executed, no subsequent rate impact

6 determinations shall be made and no adjustments to those

7 contract amounts shall be allowed. All costs incurred under

8 such contracts shall be fully recoverable by the electric

9 utility as provided in this Section.

10 (F) If the limitation on the amount of renewable energy

11 resources procured in subparagraph (E) of this paragraph

12 (1) prevents the Agency from meeting all of the goals in

13 this subsection (c), the Agency's long-term plan shall

14 prioritize compliance with the requirements of this

15 subsection (c) regarding renewable energy credits in the

16 following order:

17 (i) renewable energy credits under existing

18 contractual obligations;

19 (i-5) funding for the Illinois Solar for All

20 Program, as described in subparagraph (O) of this

21 paragraph (1);

22 (ii) renewable energy credits necessary to comply

23 with the new wind and new photovoltaic procurement

24 requirements described in items (i) through (iii) of

25 subparagraph (C) of this paragraph (1); and

26 (iii) renewable energy credits necessary to meet

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1 the remaining requirements of this subsection (c).

2 (G) The following provisions shall apply to the

3 Agency's procurement of renewable energy credits under

4 this subsection (c):

5 (i) Notwithstanding whether a long-term renewable

6 resources procurement plan has been approved, the

7 Agency shall conduct an initial forward procurement

8 for renewable energy credits from new utility-scale

9 wind projects within 160 days after June 1, 2017 (the

10 effective date of Public Act 99-906) ~~this amendatory~~

11 ~~Act of the 99th General Assembly~~. For the purposes of

12 this initial forward procurement, the Agency shall

13 solicit 15-year contracts for delivery of 1,000,000

14 renewable energy credits delivered annually from new

15 utility-scale wind projects to begin delivery on June

16 1, 2019, if available, but not later than June 1, 2021.

17 Payments to suppliers of renewable energy credits

18 shall commence upon delivery. Renewable energy credits

19 procured under this initial procurement shall be

20 included in the Agency's long-term plan and shall apply

21 to all renewable energy goals in this subsection (c).

22 (ii) Notwithstanding whether a long-term renewable

23 resources procurement plan has been approved, the

24 Agency shall conduct an initial forward procurement

25 for renewable energy credits from new utility-scale

26 solar projects and brownfield site photovoltaic

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1 projects within one year after June 1, 2017 (the

2 effective date of Public Act 99-906) ~~this amendatory~~

3 ~~Act of the 99th General Assembly~~. For the purposes of

4 this initial forward procurement, the Agency shall

5 solicit 15-year contracts for delivery of 1,000,000

6 renewable energy credits delivered annually from new

7 utility-scale solar projects and brownfield site

8 photovoltaic projects to begin delivery on June 1,

9 2019, if available, but not later than June 1, 2021.

10 The Agency may structure this initial procurement in

11 one or more discrete procurement events. Payments to

12 suppliers of renewable energy credits shall commence

13 upon delivery. Renewable energy credits procured under

14 this initial procurement shall be included in the

15 Agency's long-term plan and shall apply to all

16 renewable energy goals in this subsection (c).

17 (iii) Subsequent forward procurements for

18 utility-scale wind projects shall solicit at least

19 1,000,000 renewable energy credits delivered annually

20 per procurement event and shall be planned, scheduled,

21 and designed such that the cumulative amount of

22 renewable energy credits delivered from all new wind

23 projects in each delivery year shall not exceed the

24 Agency's projection of the cumulative amount of

25 renewable energy credits that will be delivered from

26 all new photovoltaic projects, including utility-scale

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1 and distributed photovoltaic devices, in the same

2 delivery year at the time scheduled for wind contract

3 delivery.

4 (iv) If, at any time after the time set for

5 delivery of renewable energy credits pursuant to the

6 initial procurements in items (i) and (ii) of this

7 subparagraph (G), the cumulative amount of renewable

8 energy credits projected to be delivered from all new

9 wind projects in a given delivery year exceeds the

10 cumulative amount of renewable energy credits

11 projected to be delivered from all new photovoltaic

12 projects in that delivery year by 200,000 or more

13 renewable energy credits, then the Agency shall within

14 60 days adjust the procurement programs in the

15 long-term renewable resources procurement plan to

16 ensure that the projected cumulative amount of

17 renewable energy credits to be delivered from all new

18 wind projects does not exceed the projected cumulative

19 amount of renewable energy credits to be delivered from

20 all new photovoltaic projects by 200,000 or more

21 renewable energy credits, provided that nothing in

22 this Section shall preclude the projected cumulative

23 amount of renewable energy credits to be delivered from

24 all new photovoltaic projects from exceeding the

25 projected cumulative amount of renewable energy

26 credits to be delivered from all new wind projects in

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1 each delivery year and provided further that nothing in

2 this item (iv) shall require the curtailment of an

3 executed contract. The Agency shall update, on a

4 quarterly basis, its projection of the renewable

5 energy credits to be delivered from all projects in

6 each delivery year. Notwithstanding anything to the

7 contrary, the Agency may adjust the timing of

8 procurement events conducted under this subparagraph

9 (G). The long-term renewable resources procurement

10 plan shall set forth the process by which the

11 adjustments may be made.

12 (v) All procurements under this subparagraph (G)

13 shall comply with the geographic requirements in

14 subparagraph (I) of this paragraph (1) and shall follow

15 the procurement processes and procedures described in

16 this Section and Section 16-111.5 of the Public

17 Utilities Act to the extent practicable, and these

18 processes and procedures may be expedited to

19 accommodate the schedule established by this

20 subparagraph (G).

21 (H) The procurement of renewable energy resources for a

22 given delivery year shall be reduced as described in this

23 subparagraph (H) if an alternative ~~alternate~~ retail

24 electric supplier meets the requirements described in this

25 subparagraph (H).

26 (i) Within 45 days after June 1, 2017 (the

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1 effective date of Public Act 99-906) ~~this amendatory~~

2 ~~Act of the 99th General Assembly~~, an alternative retail

3 electric supplier or its successor shall submit an

4 informational filing to the Illinois Commerce

5 Commission certifying that, as of December 31, 2015,

6 the alternative retail electric supplier owned one or

7 more electric generating facilities that generates

8 renewable energy resources as defined in Section 1-10

9 of this Act, provided that such facilities are not

10 powered by wind or photovoltaics, and the facilities

11 generate one renewable energy credit for each

12 megawatthour of energy produced from the facility.

13 The informational filing shall identify each

14 facility that was eligible to satisfy the alternative

15 retail electric supplier's obligations under Section

16 16-115D of the Public Utilities Act as described in

17 this item (i).

18 (ii) For a given delivery year, the alternative

19 retail electric supplier may elect to supply its retail

20 customers with renewable energy credits from the

21 facility or facilities described in item (i) of this

22 subparagraph (H) that continue to be owned by the

23 alternative retail electric supplier.

24 (iii) The alternative retail electric supplier

25 shall notify the Agency and the applicable utility, no

26 later than February 28 of the year preceding the

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1 applicable delivery year or 15 days after June 1, 2017

2 (the effective date of Public Act 99-906) ~~this~~

3 ~~amendatory Act of the 99th General Assembly~~, whichever

4 is later, of its election under item (ii) of this

5 subparagraph (H) to supply renewable energy credits to

6 retail customers of the utility. Such election shall

7 identify the amount of renewable energy credits to be

8 supplied by the alternative retail electric supplier

9 to the utility's retail customers and the source of the

10 renewable energy credits identified in the

11 informational filing as described in item (i) of this

12 subparagraph (H), subject to the following

13 limitations:

14 For the delivery year beginning June 1, 2018,

15 the maximum amount of renewable energy credits to

16 be supplied by an alternative retail electric

17 supplier under this subparagraph (H) shall be 68%

18 multiplied by 25% multiplied by 14.5% multiplied

19 by the amount of metered electricity

20 (megawatt-hours) delivered by the alternative

21 retail electric supplier to Illinois retail

22 customers during the delivery year ending May 31,

23 2016.

24 For delivery years beginning June 1, 2019 and

25 each year thereafter, the maximum amount of

26 renewable energy credits to be supplied by an

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1 alternative retail electric supplier under this

2 subparagraph (H) shall be 68% multiplied by 50%

3 multiplied by 16% multiplied by the amount of

4 metered electricity (megawatt-hours) delivered by

5 the alternative retail electric supplier to

6 Illinois retail customers during the delivery year

7 ending May 31, 2016, provided that the 16% value

8 shall increase by 1.5% each delivery year

9 thereafter to 25% by the delivery year beginning

10 June 1, 2025, and thereafter the 25% value shall

11 apply to each delivery year.

12 For each delivery year, the total amount of

13 renewable energy credits supplied by all alternative

14 retail electric suppliers under this subparagraph (H)

15 shall not exceed 9% of the Illinois target renewable

16 energy credit quantity. The Illinois target renewable

17 energy credit quantity for the delivery year beginning

18 June 1, 2018 is 14.5% multiplied by the total amount of

19 metered electricity (megawatt-hours) delivered in the

20 delivery year immediately preceding that delivery

21 year, provided that the 14.5% shall increase by 1.5%

22 each delivery year thereafter to 25% by the delivery

23 year beginning June 1, 2025, and thereafter the 25%

24 value shall apply to each delivery year.

25 If the requirements set forth in items (i) through

26 (iii) of this subparagraph (H) are met, the charges

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1 that would otherwise be applicable to the retail

2 customers of the alternative retail electric supplier

3 under paragraph (6) of this subsection (c) for the

4 applicable delivery year shall be reduced by the ratio

5 of the quantity of renewable energy credits supplied by

6 the alternative retail electric supplier compared to

7 that supplier's target renewable energy credit

8 quantity. The supplier's target renewable energy

9 credit quantity for the delivery year beginning June 1,

10 2018 is 14.5% multiplied by the total amount of metered

11 electricity (megawatt-hours) delivered by the

12 alternative retail supplier in that delivery year,

13 provided that the 14.5% shall increase by 1.5% each

14 delivery year thereafter to 25% by the delivery year

15 beginning June 1, 2025, and thereafter the 25% value

16 shall apply to each delivery year.

17 On or before April 1 of each year, the Agency shall

18 annually publish a report on its website that

19 identifies the aggregate amount of renewable energy

20 credits supplied by alternative retail electric

21 suppliers under this subparagraph (H).

22 (I) The Agency shall design its long-term renewable

23 energy procurement plan to maximize the State's interest in

24 the health, safety, and welfare of its residents, including

25 but not limited to minimizing sulfur dioxide, nitrogen

26 oxide, particulate matter and other pollution that

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1 adversely affects public health in this State, increasing

2 fuel and resource diversity in this State, enhancing the

3 reliability and resiliency of the electricity distribution

4 system in this State, meeting goals to limit carbon dioxide

5 emissions under federal or State law, and contributing to a

6 cleaner and healthier environment for the citizens of this

7 State. In order to further these legislative purposes,

8 renewable energy credits shall be eligible to be counted

9 toward the renewable energy requirements of this

10 subsection (c) if they are generated from facilities

11 located in this State. The Agency may qualify renewable

12 energy credits from facilities located in states adjacent

13 to Illinois if the generator demonstrates and the Agency

14 determines that the operation of such facility or

15 facilities will help promote the State's interest in the

16 health, safety, and welfare of its residents based on the

17 public interest criteria described above. To ensure that

18 the public interest criteria are applied to the procurement

19 and given full effect, the Agency's long-term procurement

20 plan shall describe in detail how each public interest

21 factor shall be considered and weighted for facilities

22 located in states adjacent to Illinois.

23 (J) In order to promote the competitive development of

24 renewable energy resources in furtherance of the State's

25 interest in the health, safety, and welfare of its

26 residents, renewable energy credits shall not be eligible

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1 to be counted toward the renewable energy requirements of

2 this subsection (c) if they are sourced from a generating

3 unit whose costs were being recovered through rates

4 regulated by this State or any other state or states on or

5 after January 1, 2017. Each contract executed to purchase

6 renewable energy credits under this subsection (c) shall

7 provide for the contract's termination if the costs of the

8 generating unit supplying the renewable energy credits

9 subsequently begin to be recovered through rates regulated

10 by this State or any other state or states; and each

11 contract shall further provide that, in that event, the

12 supplier of the credits must return 110% of all payments

13 received under the contract. Amounts returned under the

14 requirements of this subparagraph (J) shall be retained by

15 the utility and all of these amounts shall be used for the

16 procurement of additional renewable energy credits from

17 new wind or new photovoltaic resources as defined in this

18 subsection (c). The long-term plan shall provide that these

19 renewable energy credits shall be procured in the next

20 procurement event.

21 Notwithstanding the limitations of this subparagraph

22 (J), renewable energy credits sourced from generating

23 units that are constructed, purchased, owned, or leased by

24 an electric utility as part of an approved project,

25 program, or pilot under Section 1-56 of this Act shall be

26 eligible to be counted toward the renewable energy

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1 requirements of this subsection (c), regardless of how the

2 costs of these units are recovered.

3 (K) The long-term renewable resources procurement plan

4 developed by the Agency in accordance with subparagraph (A)

5 of this paragraph (1) shall include an Adjustable Block

6 program for the procurement of renewable energy credits

7 from new photovoltaic projects that are distributed

8 renewable energy generation devices or new photovoltaic

9 community renewable generation projects. The Adjustable

10 Block program shall be designed to provide a transparent

11 schedule of prices and quantities to enable the

12 photovoltaic market to scale up and for renewable energy

13 credit prices to adjust at a predictable rate over time.

14 The prices set by the Adjustable Block program can be

15 reflected as a set value or as the product of a formula.

16 The Adjustable Block program shall include for each

17 category of eligible projects: a schedule of standard block

18 purchase prices to be offered; a series of steps, with

19 associated nameplate capacity and purchase prices that

20 adjust from step to step; and automatic opening of the next

21 step as soon as the nameplate capacity and available

22 purchase prices for an open step are fully committed or

23 reserved. Only projects energized on or after June 1, 2017

24 shall be eligible for the Adjustable Block program. For

25 each block group the Agency shall determine the number of

26 blocks, the amount of generation capacity in each block,

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1 and the purchase price for each block, provided that the

2 purchase price provided and the total amount of generation

3 in all blocks for all block groups shall be sufficient to

4 meet the goals in this subsection (c). The Agency may

5 periodically review its prior decisions establishing the

6 number of blocks, the amount of generation capacity in each

7 block, and the purchase price for each block, and may

8 propose, on an expedited basis, changes to these previously

9 set values, including but not limited to redistributing

10 these amounts and the available funds as necessary and

11 appropriate, subject to Commission approval as part of the

12 periodic plan revision process described in Section

13 16-111.5 of the Public Utilities Act. The Agency may define

14 different block sizes, purchase prices, or other distinct

15 terms and conditions for projects located in different

16 utility service territories if the Agency deems it

17 necessary to meet the goals in this subsection (c).

18 The Adjustable Block program shall include at least the

19 following block groups in at least the following amounts,

20 which may be adjusted upon review by the Agency and

21 approval by the Commission as described in this

22 subparagraph (K):

23 (i) At least 25% from distributed renewable energy

24 generation devices with a nameplate capacity of no more

25 than 10 kilowatts.

26 (ii) At least 25% from distributed renewable

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1 energy generation devices with a nameplate capacity of

2 more than 10 kilowatts and no more than 2,000

3 kilowatts. The Agency may create sub-categories within

4 this category to account for the differences between

5 projects for small commercial customers, large

6 commercial customers, and public or non-profit

7 customers.

8 (iii) At least 25% from photovoltaic community

9 renewable generation projects.

10 (iv) The remaining 25% shall be allocated as

11 specified by the Agency in the long-term renewable

12 resources procurement plan.

13 The Adjustable Block program shall be designed to

14 ensure that renewable energy credits are procured from

15 photovoltaic distributed renewable energy generation

16 devices and new photovoltaic community renewable energy

17 generation projects in diverse locations and are not

18 concentrated in a few geographic areas.

19 (L) The procurement of photovoltaic renewable energy

20 credits under items (i) through (iv) of subparagraph (K) of

21 this paragraph (1) shall be subject to the following

22 contract and payment terms:

23 (i) The Agency shall procure contracts of at least

24 15 years in length.

25 (ii) For those renewable energy credits that

26 qualify and are procured under item (i) of subparagraph

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1 (K) of this paragraph (1), the renewable energy credit

2 purchase price shall be paid in full by the contracting

3 utilities at the time that the facility producing the

4 renewable energy credits is interconnected at the

5 distribution system level of the utility and

6 energized. The electric utility shall receive and

7 retire all renewable energy credits generated by the

8 project for the first 15 years of operation.

9 (iii) For those renewable energy credits that

10 qualify and are procured under item (ii) and (iii) of

11 subparagraph (K) of this paragraph (1) and any

12 additional categories of distributed generation

13 included in the long-term renewable resources

14 procurement plan and approved by the Commission, 20

15 percent of the renewable energy credit purchase price

16 shall be paid by the contracting utilities at the time

17 that the facility producing the renewable energy

18 credits is interconnected at the distribution system

19 level of the utility and energized. The remaining

20 portion shall be paid ratably over the subsequent

21 4-year period. The electric utility shall receive and

22 retire all renewable energy credits generated by the

23 project for the first 15 years of operation.

24 (iv) Each contract shall include provisions to

25 ensure the delivery of the renewable energy credits for

26 the full term of the contract.

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1 (v) The utility shall be the counterparty to the

2 contracts executed under this subparagraph (L) that

3 are approved by the Commission under the process

4 described in Section 16-111.5 of the Public Utilities

5 Act. No contract shall be executed for an amount that

6 is less than one renewable energy credit per year.

7 (vi) If, at any time, approved applications for the

8 Adjustable Block program exceed funds collected by the

9 electric utility or would cause the Agency to exceed

10 the limitation described in subparagraph (E) of this

11 paragraph (1) on the amount of renewable energy

12 resources that may be procured, then the Agency shall

13 consider future uncommitted funds to be reserved for

14 these contracts on a first-come, first-served basis,

15 with the delivery of renewable energy credits required

16 beginning at the time that the reserved funds become

17 available.

18 (vii) Nothing in this Section shall require the

19 utility to advance any payment or pay any amounts that

20 exceed the actual amount of revenues collected by the

21 utility under paragraph (6) of this subsection (c) and

22 subsection (k) of Section 16-108 of the Public

23 Utilities Act, and contracts executed under this

24 Section shall expressly incorporate this limitation.

25 (M) The Agency shall be authorized to retain one or

26 more experts or expert consulting firms to develop,

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1 administer, implement, operate, and evaluate the

2 Adjustable Block program described in subparagraph (K) of

3 this paragraph (1), and the Agency shall retain the

4 consultant or consultants in the same manner, to the extent

5 practicable, as the Agency retains others to administer

6 provisions of this Act, including, but not limited to, the

7 procurement administrator. The selection of experts and

8 expert consulting firms and the procurement process

9 described in this subparagraph (M) are exempt from the

10 requirements of Section 20-10 of the Illinois Procurement

11 Code, under Section 20-10 of that Code. The Agency shall

12 strive to minimize administrative expenses in the

13 implementation of the Adjustable Block program.

14 The Agency and its consultant or consultants shall

15 monitor block activity, share program activity with

16 stakeholders and conduct regularly scheduled meetings to

17 discuss program activity and market conditions. If

18 necessary, the Agency may make prospective administrative

19 adjustments to the Adjustable Block program design, such as

20 redistributing available funds or making adjustments to

21 purchase prices as necessary to achieve the goals of this

22 subsection (c). Program modifications to any price,

23 capacity block, or other program element that do not

24 deviate from the Commission's approved value by more than

25 25% shall take effect immediately and are not subject to

26 Commission review and approval. Program modifications to

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1 any price, capacity block, or other program element that

2 deviate more than 25% from the Commission's approved value

3 must be approved by the Commission as a long-term plan

4 amendment under Section 16-111.5 of the Public Utilities

5 Act. The Agency shall consider stakeholder feedback when

6 making adjustments to the Adjustable Block design and shall

7 notify stakeholders in advance of any planned changes.

8 (N) The long-term renewable resources procurement plan

9 required by this subsection (c) shall include a community

10 renewable generation program. The Agency shall establish

11 the terms, conditions, and program requirements for

12 community renewable generation projects with a goal to

13 expand renewable energy generating facility access to a

14 broader group of energy consumers, to ensure robust

15 participation opportunities for residential and small

16 commercial customers and those who cannot install

17 renewable energy on their own properties. Any plan approved

18 by the Commission shall allow subscriptions to community

19 renewable generation projects to be portable and

20 transferable. For purposes of this subparagraph (N),

21 "portable" means that subscriptions may be retained by the

22 subscriber even if the subscriber relocates or changes its

23 address within the same utility service territory; and

24 "transferable" means that a subscriber may assign or sell

25 subscriptions to another person within the same utility

26 service territory.

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1 Electric utilities shall provide a monetary credit to a

2 subscriber's subsequent bill for service for the

3 proportional output of a community renewable generation

4 project attributable to that subscriber as specified in

5 Section 16-107.5 of the Public Utilities Act.

6 The Agency shall purchase renewable energy credits

7 from subscribed shares of photovoltaic community renewable

8 generation projects through the Adjustable Block program

9 described in subparagraph (K) of this paragraph (1) or

10 through the Illinois Solar for All Program described in

11 Section 1-56 of this Act. The electric utility shall

12 purchase any unsubscribed energy from community renewable

13 generation projects that are Qualifying Facilities ("QF")

14 under the electric utility's tariff for purchasing the

15 output from QFs under Public Utilities Regulatory Policies

16 Act of 1978.

17 The owners of and any subscribers to a community

18 renewable generation project shall not be considered

19 public utilities or alternative retail electricity

20 suppliers under the Public Utilities Act solely as a result

21 of their interest in or subscription to a community

22 renewable generation project and shall not be required to

23 become an alternative retail electric supplier by

24 participating in a community renewable generation project

25 with a public utility.

26 (O) For the delivery year beginning June 1, 2018, the

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1 long-term renewable resources procurement plan required by

2 this subsection (c) shall provide for the Agency to procure

3 contracts to continue offering the Illinois Solar for All

4 Program described in subsection (b) of Section 1-56 of this

5 Act, and the contracts approved by the Commission shall be

6 executed by the utilities that are subject to this

7 subsection (c). The long-term renewable resources

8 procurement plan shall allocate 5% of the funds available

9 under the plan for the applicable delivery year, or

10 $10,000,000 per delivery year, whichever is greater, to

11 fund the programs, and the plan shall determine the amount

12 of funding to be apportioned to the programs identified in

13 subsection (b) of Section 1-56 of this Act; provided that

14 for the delivery years beginning June 1, 2017, June 1,

15 2021, and June 1, 2025, the long-term renewable resources

16 procurement plan shall allocate 10% of the funds available

17 under the plan for the applicable delivery year, or

18 $20,000,000 per delivery year, whichever is greater, and

19 $10,000,000 of such funds in such year shall be used by an

20 electric utility that serves more than 3,000,000 retail

21 customers in the State to implement a Commission-approved

22 plan under Section 16-108.12 of the Public Utilities Act.

23 In making the determinations required under this

24 subparagraph (O), the Commission shall consider the

25 experience and performance under the programs and any

26 evaluation reports. The Commission shall also provide for

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1 an independent evaluation of those programs on a periodic

2 basis that are funded under this subparagraph (O).

3 (2) (Blank).

4 (3) (Blank).

5 (4) The electric utility shall retire all renewable

6 energy credits used to comply with the standard.

7 (5) Beginning with the 2010 delivery year and ending

8 June 1, 2017, an electric utility subject to this

9 subsection (c) shall apply the lesser of the maximum

10 alternative compliance payment rate or the most recent

11 estimated alternative compliance payment rate for its

12 service territory for the corresponding compliance period,

13 established pursuant to subsection (d) of Section 16-115D

14 of the Public Utilities Act to its retail customers that

15 take service pursuant to the electric utility's hourly

16 pricing tariff or tariffs. The electric utility shall

17 retain all amounts collected as a result of the application

18 of the alternative compliance payment rate or rates to such

19 customers, and, beginning in 2011, the utility shall

20 include in the information provided under item (1) of

21 subsection (d) of Section 16-111.5 of the Public Utilities

22 Act the amounts collected under the alternative compliance

23 payment rate or rates for the prior year ending May 31.

24 Notwithstanding any limitation on the procurement of

25 renewable energy resources imposed by item (2) of this

26 subsection (c), the Agency shall increase its spending on

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1 the purchase of renewable energy resources to be procured

2 by the electric utility for the next plan year by an amount

3 equal to the amounts collected by the utility under the

4 alternative compliance payment rate or rates in the prior

5 year ending May 31.

6 (6) The electric utility shall be entitled to recover

7 all of its costs associated with the procurement of

8 renewable energy credits under plans approved under this

9 Section and Section 16-111.5 of the Public Utilities Act.

10 These costs shall include associated reasonable expenses

11 for implementing the procurement programs, including, but

12 not limited to, the costs of administering and evaluating

13 the Adjustable Block program, through an automatic

14 adjustment clause tariff in accordance with subsection (k)

15 of Section 16-108 of the Public Utilities Act.

16 (7) Renewable energy credits procured from new

17 photovoltaic projects or new distributed renewable energy

18 generation devices under this Section after June 1, 2017

19 (the effective date of Public Act 99-906) ~~this amendatory~~

20 ~~Act of the 99th General Assembly~~ must be procured from

21 devices installed by a qualified person in compliance with

22 the requirements of Section 16-128A of the Public Utilities

23 Act and any rules or regulations adopted thereunder.

24 In meeting the renewable energy requirements of this

25 subsection (c), to the extent feasible and consistent with

26 State and federal law, the renewable energy credit

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1 procurements, Adjustable Block solar program, and

2 community renewable generation program shall provide

3 employment opportunities for all segments of the

4 population and workforce, including minority-owned and

5 female-owned business enterprises, and shall not,

6 consistent with State and federal law, discriminate based

7 on race or socioeconomic status.

8 (d) Clean coal portfolio standard.

9 (1) The procurement plans shall include electricity

10 generated using clean coal. Each utility shall enter into

11 one or more sourcing agreements with the initial clean coal

12 facility, as provided in paragraph (3) of this subsection

13 (d), covering electricity generated by the initial clean

14 coal facility representing at least 5% of each utility's

15 total supply to serve the load of eligible retail customers

16 in 2015 and each year thereafter, as described in paragraph

17 (3) of this subsection (d), subject to the limits specified

18 in paragraph (2) of this subsection (d). It is the goal of

19 the State that by January 1, 2025, 25% of the electricity

20 used in the State shall be generated by cost-effective

21 clean coal facilities. For purposes of this subsection (d),

22 "cost-effective" means that the expenditures pursuant to

23 such sourcing agreements do not cause the limit stated in

24 paragraph (2) of this subsection (d) to be exceeded and do

25 not exceed cost-based benchmarks, which shall be developed

26 to assess all expenditures pursuant to such sourcing

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1 agreements covering electricity generated by clean coal

2 facilities, other than the initial clean coal facility, by

3 the procurement administrator, in consultation with the

4 Commission staff, Agency staff, and the procurement

5 monitor and shall be subject to Commission review and

6 approval.

7 A utility party to a sourcing agreement shall

8 immediately retire any emission credits that it receives in

9 connection with the electricity covered by such agreement.

10 Utilities shall maintain adequate records documenting

11 the purchases under the sourcing agreement to comply with

12 this subsection (d) and shall file an accounting with the

13 load forecast that must be filed with the Agency by July 15

14 of each year, in accordance with subsection (d) of Section

15 16-111.5 of the Public Utilities Act.

16 A utility shall be deemed to have complied with the

17 clean coal portfolio standard specified in this subsection

18 (d) if the utility enters into a sourcing agreement as

19 required by this subsection (d).

20 (2) For purposes of this subsection (d), the required

21 execution of sourcing agreements with the initial clean

22 coal facility for a particular year shall be measured as a

23 percentage of the actual amount of electricity

24 (megawatt-hours) supplied by the electric utility to

25 eligible retail customers in the planning year ending

26 immediately prior to the agreement's execution. For

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1 purposes of this subsection (d), the amount paid per

2 kilowatthour means the total amount paid for electric

3 service expressed on a per kilowatthour basis. For purposes

4 of this subsection (d), the total amount paid for electric

5 service includes without limitation amounts paid for

6 supply, transmission, distribution, surcharges and add-on

7 taxes.

8 Notwithstanding the requirements of this subsection

9 (d), the total amount paid under sourcing agreements with

10 clean coal facilities pursuant to the procurement plan for

11 any given year shall be reduced by an amount necessary to

12 limit the annual estimated average net increase due to the

13 costs of these resources included in the amounts paid by

14 eligible retail customers in connection with electric

15 service to:

16 (A) in 2010, no more than 0.5% of the amount paid

17 per kilowatthour by those customers during the year

18 ending May 31, 2009;

19 (B) in 2011, the greater of an additional 0.5% of

20 the amount paid per kilowatthour by those customers

21 during the year ending May 31, 2010 or 1% of the amount

22 paid per kilowatthour by those customers during the

23 year ending May 31, 2009;

24 (C) in 2012, the greater of an additional 0.5% of

25 the amount paid per kilowatthour by those customers

26 during the year ending May 31, 2011 or 1.5% of the

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1 amount paid per kilowatthour by those customers during

2 the year ending May 31, 2009;

3 (D) in 2013, the greater of an additional 0.5% of

4 the amount paid per kilowatthour by those customers

5 during the year ending May 31, 2012 or 2% of the amount

6 paid per kilowatthour by those customers during the

7 year ending May 31, 2009; and

8 (E) thereafter, the total amount paid under

9 sourcing agreements with clean coal facilities

10 pursuant to the procurement plan 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 resources included in the amounts paid by eligible

14 retail customers in connection with electric service

15 to no more than the greater of (i) 2.015% of the amount

16 paid per kilowatthour by those customers during the

17 year ending May 31, 2009 or (ii) the incremental amount

18 per kilowatthour paid for these resources in 2013.

19 These requirements may be altered only as provided by

20 statute.

21 No later than June 30, 2015, the Commission shall

22 review the limitation on the total amount paid under

23 sourcing agreements, if any, with clean coal facilities

24 pursuant to this subsection (d) and report to the General

25 Assembly its findings as to whether that limitation unduly

26 constrains the amount of electricity generated by

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1 cost-effective clean coal facilities that is covered by

2 sourcing agreements.

3 (3) Initial clean coal facility. In order to promote

4 development of clean coal facilities in Illinois, each

5 electric utility subject to this Section shall execute a

6 sourcing agreement to source electricity from a proposed

7 clean coal facility in Illinois (the "initial clean coal

8 facility") that will have a nameplate capacity of at least

9 500 MW when commercial operation commences, that has a

10 final Clean Air Act permit on June 1, 2009 (the effective

11 date of Public Act 95-1027) ~~this amendatory Act of the 95th~~

12 ~~General Assembly~~, and that will meet the definition of

13 clean coal facility in Section 1-10 of this Act when

14 commercial operation commences. The sourcing agreements

15 with this initial clean coal facility shall be subject to

16 both approval of the initial clean coal facility by the

17 General Assembly and satisfaction of the requirements of

18 paragraph (4) of this subsection (d) and shall be executed

19 within 90 days after any such approval by the General

20 Assembly. The Agency and the Commission shall have

21 authority to inspect all books and records associated with

22 the initial clean coal facility during the term of such a

23 sourcing agreement. A utility's sourcing agreement for

24 electricity produced by the initial clean coal facility

25 shall include:

26 (A) a formula contractual price (the "contract

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1 price") approved pursuant to paragraph (4) of this

2 subsection (d), which shall:

3 (i) be determined using a cost of service

4 methodology employing either a level or deferred

5 capital recovery component, based on a capital

6 structure consisting of 45% equity and 55% debt,

7 and a return on equity as may be approved by the

8 Federal Energy Regulatory Commission, which in any

9 case may not exceed the lower of 11.5% or the rate

10 of return approved by the General Assembly

11 pursuant to paragraph (4) of this subsection (d);

12 and

13 (ii) provide that all miscellaneous net

14 revenue, including but not limited to net revenue

15 from the sale of emission allowances, if any,

16 substitute natural gas, if any, grants or other

17 support provided by the State of Illinois or the

18 United States Government, firm transmission

19 rights, if any, by-products produced by the

20 facility, energy or capacity derived from the

21 facility and not covered by a sourcing agreement

22 pursuant to paragraph (3) of this subsection (d) or

23 item (5) of subsection (d) of Section 16-115 of the

24 Public Utilities Act, whether generated from the

25 synthesis gas derived from coal, from SNG, or from

26 natural gas, shall be credited against the revenue

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1 requirement for this initial clean coal facility;

2 (B) power purchase provisions, which shall:

3 (i) provide that the utility party to such

4 sourcing agreement shall pay the contract price

5 for electricity delivered under such sourcing

6 agreement;

7 (ii) require delivery of electricity to the

8 regional transmission organization market of the

9 utility that is party to such sourcing agreement;

10 (iii) require the utility party to such

11 sourcing agreement to buy from the initial clean

12 coal facility in each hour an amount of energy

13 equal to all clean coal energy made available from

14 the initial clean coal facility during such hour

15 times a fraction, the numerator of which is such

16 utility's retail market sales of electricity

17 (expressed in kilowatthours sold) in the State

18 during the prior calendar month and the

19 denominator of which is the total retail market

20 sales of electricity (expressed in kilowatthours

21 sold) in the State by utilities during such prior

22 month and the sales of electricity (expressed in

23 kilowatthours sold) in the State by alternative

24 retail electric suppliers during such prior month

25 that are subject to the requirements of this

26 subsection (d) and paragraph (5) of subsection (d)

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1 of Section 16-115 of the Public Utilities Act,

2 provided that the amount purchased by the utility

3 in any year will be limited by paragraph (2) of

4 this subsection (d); and

5 (iv) be considered pre-existing contracts in

6 such utility's procurement plans for eligible

7 retail customers;

8 (C) contract for differences provisions, which

9 shall:

10 (i) require the utility party to such sourcing

11 agreement to contract with the initial clean coal

12 facility in each hour with respect to an amount of

13 energy equal to all clean coal energy made

14 available from the initial clean coal facility

15 during such hour times a fraction, the numerator of

16 which is such utility's retail market sales of

17 electricity (expressed in kilowatthours sold) in

18 the utility's service territory in the State

19 during the prior calendar month and the

20 denominator of which is the total retail market

21 sales of electricity (expressed in kilowatthours

22 sold) in the State by utilities during such prior

23 month and the sales of electricity (expressed in

24 kilowatthours sold) in the State by alternative

25 retail electric suppliers during such prior month

26 that are subject to the requirements of this

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1 subsection (d) and paragraph (5) of subsection (d)

2 of Section 16-115 of the Public Utilities Act,

3 provided that the amount paid by the utility in any

4 year will be limited by paragraph (2) of this

5 subsection (d);

6 (ii) provide that the utility's payment

7 obligation in respect of the quantity of

8 electricity determined pursuant to the preceding

9 clause (i) shall be limited to an amount equal to

10 (1) the difference between the contract price

11 determined pursuant to subparagraph (A) of

12 paragraph (3) of this subsection (d) and the

13 day-ahead price for electricity delivered to the

14 regional transmission organization market of the

15 utility that is party to such sourcing agreement

16 (or any successor delivery point at which such

17 utility's supply obligations are financially

18 settled on an hourly basis) (the "reference

19 price") on the day preceding the day on which the

20 electricity is delivered to the initial clean coal

21 facility busbar, multiplied by (2) the quantity of

22 electricity determined pursuant to the preceding

23 clause (i); and

24 (iii) not require the utility to take physical

25 delivery of the electricity produced by the

26 facility;

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1 (D) general provisions, which shall:

2 (i) specify a term of no more than 30 years,

3 commencing on the commercial operation date of the

4 facility;

5 (ii) provide that utilities shall maintain

6 adequate records documenting purchases under the

7 sourcing agreements entered into to comply with

8 this subsection (d) and shall file an accounting

9 with the load forecast that must be filed with the

10 Agency by July 15 of each year, in accordance with

11 subsection (d) of Section 16-111.5 of the Public

12 Utilities Act;

13 (iii) provide that all costs associated with

14 the initial clean coal facility will be

15 periodically reported to the Federal Energy

16 Regulatory Commission and to purchasers in

17 accordance with applicable laws governing

18 cost-based wholesale power contracts;

19 (iv) permit the Illinois Power Agency to

20 assume ownership of the initial clean coal

21 facility, without monetary consideration and

22 otherwise on reasonable terms acceptable to the

23 Agency, if the Agency so requests no less than 3

24 years prior to the end of the stated contract term;

25 (v) require the owner of the initial clean coal

26 facility to provide documentation to the

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1 Commission each year, starting in the facility's

2 first year of commercial operation, accurately

3 reporting the quantity of carbon emissions from

4 the facility that have been captured and

5 sequestered and report any quantities of carbon

6 released from the site or sites at which carbon

7 emissions were sequestered in prior years, based

8 on continuous monitoring of such sites. If, in any

9 year after the first year of commercial operation,

10 the owner of the facility fails to demonstrate that

11 the initial clean coal facility captured and

12 sequestered at least 50% of the total carbon

13 emissions that the facility would otherwise emit

14 or that sequestration of emissions from prior

15 years has failed, resulting in the release of

16 carbon dioxide into the atmosphere, the owner of

17 the facility must offset excess emissions. Any

18 such carbon offsets must be permanent, additional,

19 verifiable, real, located within the State of

20 Illinois, and legally and practicably enforceable.

21 The cost of such offsets for the facility that are

22 not recoverable shall not exceed $15 million in any

23 given year. No costs of any such purchases of

24 carbon offsets may be recovered from a utility or

25 its customers. All carbon offsets purchased for

26 this purpose and any carbon emission credits

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1 associated with sequestration of carbon from the

2 facility must be permanently retired. The initial

3 clean coal facility shall not forfeit its

4 designation as a clean coal facility if the

5 facility fails to fully comply with the applicable

6 carbon sequestration requirements in any given

7 year, provided the requisite offsets are

8 purchased. However, the Attorney General, on

9 behalf of the People of the State of Illinois, may

10 specifically enforce the facility's sequestration

11 requirement and the other terms of this contract

12 provision. Compliance with the sequestration

13 requirements and offset purchase requirements

14 specified in paragraph (3) of this subsection (d)

15 shall be reviewed annually by an independent

16 expert retained by the owner of the initial clean

17 coal facility, with the advance written approval

18 of the Attorney General. The Commission may, in the

19 course of the review specified in item (vii),

20 reduce the allowable return on equity for the

21 facility if the facility wilfully fails to comply

22 with the carbon capture and sequestration

23 requirements set forth in this item (v);

24 (vi) include limits on, and accordingly

25 provide for modification of, the amount the

26 utility is required to source under the sourcing

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1 agreement consistent with paragraph (2) of this

2 subsection (d);

3 (vii) require Commission review: (1) to

4 determine the justness, reasonableness, and

5 prudence of the inputs to the formula referenced in

6 subparagraphs (A)(i) through (A)(iii) of paragraph

7 (3) of this subsection (d), prior to an adjustment

8 in those inputs including, without limitation, the

9 capital structure and return on equity, fuel

10 costs, and other operations and maintenance costs

11 and (2) to approve the costs to be passed through

12 to customers under the sourcing agreement by which

13 the utility satisfies its statutory obligations.

14 Commission review shall occur no less than every 3

15 years, regardless of whether any adjustments have

16 been proposed, and shall be completed within 9

17 months;

18 (viii) limit the utility's obligation to such

19 amount as the utility is allowed to recover through

20 tariffs filed with the Commission, provided that

21 neither the clean coal facility nor the utility

22 waives any right to assert federal pre-emption or

23 any other argument in response to a purported

24 disallowance of recovery costs;

25 (ix) limit the utility's or alternative retail

26 electric supplier's obligation to incur any

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1 liability until such time as the facility is in

2 commercial operation and generating power and

3 energy and such power and energy is being delivered

4 to the facility busbar;

5 (x) provide that the owner or owners of the

6 initial clean coal facility, which is the

7 counterparty to such sourcing agreement, shall

8 have the right from time to time to elect whether

9 the obligations of the utility party thereto shall

10 be governed by the power purchase provisions or the

11 contract for differences provisions;

12 (xi) append documentation showing that the

13 formula rate and contract, insofar as they relate

14 to the power purchase provisions, have been

15 approved by the Federal Energy Regulatory

16 Commission pursuant to Section 205 of the Federal

17 Power Act;

18 (xii) provide that any changes to the terms of

19 the contract, insofar as such changes relate to the

20 power purchase provisions, are subject to review

21 under the public interest standard applied by the

22 Federal Energy Regulatory Commission pursuant to

23 Sections 205 and 206 of the Federal Power Act; and

24 (xiii) conform with customary lender

25 requirements in power purchase agreements used as

26 the basis for financing non-utility generators.

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1 (4) Effective date of sourcing agreements with the

2 initial clean coal facility.

3 Any proposed sourcing agreement with the initial clean

4 coal facility shall not become effective unless the

5 following reports are prepared and submitted and

6 authorizations and approvals obtained:

7 (i) Facility cost report. The owner of the initial

8 clean coal facility shall submit to the Commission, the

9 Agency, and the General Assembly a front-end

10 engineering and design study, a facility cost report,

11 method of financing (including but not limited to

12 structure and associated costs), and an operating and

13 maintenance cost quote for the facility (collectively

14 "facility cost report"), which shall be prepared in

15 accordance with the requirements of this paragraph (4)

16 of subsection (d) of this Section, and shall provide

17 the Commission and the Agency access to the work

18 papers, relied upon documents, and any other backup

19 documentation related to the facility cost report.

20 (ii) Commission report. Within 6 months following

21 receipt of the facility cost report, the Commission, in

22 consultation with the Agency, shall submit a report to

23 the General Assembly setting forth its analysis of the

24 facility cost report. Such report shall include, but

25 not be limited to, a comparison of the costs associated

26 with electricity generated by the initial clean coal

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1 facility to the costs associated with electricity

2 generated by other types of generation facilities, an

3 analysis of the rate impacts on residential and small

4 business customers over the life of the sourcing

5 agreements, and an analysis of the likelihood that the

6 initial clean coal facility will commence commercial

7 operation by and be delivering power to the facility's

8 busbar by 2016. To assist in the preparation of its

9 report, the Commission, in consultation with the

10 Agency, may hire one or more experts or consultants,

11 the costs of which shall be paid for by the owner of

12 the initial clean coal facility. The Commission and

13 Agency may begin the process of selecting such experts

14 or consultants prior to receipt of the facility cost

15 report.

16 (iii) General Assembly approval. The proposed

17 sourcing agreements shall not take effect unless,

18 based on the facility cost report and the Commission's

19 report, the General Assembly enacts authorizing

20 legislation approving (A) the projected price, stated

21 in cents per kilowatthour, to be charged for

22 electricity generated by the initial clean coal

23 facility, (B) the projected impact on residential and

24 small business customers' bills over the life of the

25 sourcing agreements, and (C) the maximum allowable

26 return on equity for the project; and

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1 (iv) Commission review. If the General Assembly

2 enacts authorizing legislation pursuant to

3 subparagraph (iii) approving a sourcing agreement, the

4 Commission shall, within 90 days of such enactment,

5 complete a review of such sourcing agreement. During

6 such time period, the Commission shall implement any

7 directive of the General Assembly, resolve any

8 disputes between the parties to the sourcing agreement

9 concerning the terms of such agreement, approve the

10 form of such agreement, and issue an order finding that

11 the sourcing agreement is prudent and reasonable.

12 The facility cost report shall be prepared as follows:

13 (A) The facility cost report shall be prepared by

14 duly licensed engineering and construction firms

15 detailing the estimated capital costs payable to one or

16 more contractors or suppliers for the engineering,

17 procurement and construction of the components

18 comprising the initial clean coal facility and the

19 estimated costs of operation and maintenance of the

20 facility. The facility cost report shall include:

21 (i) an estimate of the capital cost of the core

22 plant based on one or more front end engineering

23 and design studies for the gasification island and

24 related facilities. The core plant shall include

25 all civil, structural, mechanical, electrical,

26 control, and safety systems.

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1 (ii) an estimate of the capital cost of the

2 balance of the plant, including any capital costs

3 associated with sequestration of carbon dioxide

4 emissions and all interconnects and interfaces

5 required to operate the facility, such as

6 transmission of electricity, construction or

7 backfeed power supply, pipelines to transport

8 substitute natural gas or carbon dioxide, potable

9 water supply, natural gas supply, water supply,

10 water discharge, landfill, access roads, and coal

11 delivery.

12 The quoted construction costs shall be expressed

13 in nominal dollars as of the date that the quote is

14 prepared and shall include capitalized financing costs

15 during construction, taxes, insurance, and other

16 owner's costs, and an assumed escalation in materials

17 and labor beyond the date as of which the construction

18 cost quote is expressed.

19 (B) The front end engineering and design study for

20 the gasification island and the cost study for the

21 balance of plant shall include sufficient design work

22 to permit quantification of major categories of

23 materials, commodities and labor hours, and receipt of

24 quotes from vendors of major equipment required to

25 construct and operate the clean coal facility.

26 (C) The facility cost report shall also include an

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1 operating and maintenance cost quote that will provide

2 the estimated cost of delivered fuel, personnel,

3 maintenance contracts, chemicals, catalysts,

4 consumables, spares, and other fixed and variable

5 operations and maintenance costs. The delivered fuel

6 cost estimate will be provided by a recognized third

7 party expert or experts in the fuel and transportation

8 industries. The balance of the operating and

9 maintenance cost quote, excluding delivered fuel

10 costs, will be developed based on the inputs provided

11 by duly licensed engineering and construction firms

12 performing the construction cost quote, potential

13 vendors under long-term service agreements and plant

14 operating agreements, or recognized third party plant

15 operator or operators.

16 The operating and maintenance cost quote

17 (including the cost of the front end engineering and

18 design study) shall be expressed in nominal dollars as

19 of the date that the quote is prepared and shall

20 include taxes, insurance, and other owner's costs, and

21 an assumed escalation in materials and labor beyond the

22 date as of which the operating and maintenance cost

23 quote is expressed.

24 (D) The facility cost report shall also include an

25 analysis of the initial clean coal facility's ability

26 to deliver power and energy into the applicable

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1 regional transmission organization markets and an

2 analysis of the expected capacity factor for the

3 initial clean coal facility.

4 (E) Amounts paid to third parties unrelated to the

5 owner or owners of the initial clean coal facility to

6 prepare the core plant construction cost quote,

7 including the front end engineering and design study,

8 and the operating and maintenance cost quote will be

9 reimbursed through Coal Development Bonds.

10 (5) Re-powering and retrofitting coal-fired power

11 plants previously owned by Illinois utilities to qualify as

12 clean coal facilities. During the 2009 procurement

13 planning process and thereafter, the Agency and the

14 Commission shall consider sourcing agreements covering

15 electricity generated by power plants that were previously

16 owned by Illinois utilities and that have been or will be

17 converted into clean coal facilities, as defined by Section

18 1-10 of this Act. Pursuant to such procurement planning

19 process, the owners of such facilities may propose to the

20 Agency sourcing agreements with utilities and alternative

21 retail electric suppliers required to comply with

22 subsection (d) of this Section and item (5) of subsection

23 (d) of Section 16-115 of the Public Utilities Act, covering

24 electricity generated by such facilities. In the case of

25 sourcing agreements that are power purchase agreements,

26 the contract price for electricity sales shall be

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1 established on a cost of service basis. In the case of

2 sourcing agreements that are contracts for differences,

3 the contract price from which the reference price is

4 subtracted shall be established on a cost of service basis.

5 The Agency and the Commission may approve any such utility

6 sourcing agreements that do not exceed cost-based

7 benchmarks developed by the procurement administrator, in

8 consultation with the Commission staff, Agency staff and

9 the procurement monitor, subject to Commission review and

10 approval. The Commission shall have authority to inspect

11 all books and records associated with these clean coal

12 facilities during the term of any such contract.

13 (5.5) In order to promote the development of clean coal

14 power generation, and in furtherance of the State's goal of

15 having at least 25% of the State's electricity generated by

16 cost-effective clean coal facilities by January 1, 2025 as

17 provided in paragraph (1) of this subsection (d), the

18 Agency and Commission shall include sourcing agreements

19 covering power produced by (i) clean coal facilities, as

20 defined in Section 1-10 of this Act; and (ii) facilities

21 specified in paragraphs (3) and (5) of this subsection (d),

22 in each annual power procurement plan.

23 The Agency and Commission shall require utilities and

24 alternative retail electric suppliers to enter into such

25 sourcing agreements as part of the annual power procurement

26 process.

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1 The Agency and Commission shall establish a

2 competitive procedure to solicit and receive proposed

3 sourcing terms from producers of clean coal power

4 interested in selection for sourcing agreements. The

5 competitive procedure shall include a method of selection

6 for inclusion in those agreements.

7 These sourcing agreements shall be subject to the

8 limits contained in items (A) through (E) of paragraph (2)

9 of this subsection (d), the benchmarks as set forth by

10 paragraph (1) of this subsection (d), and the requirements

11 for sourcing agreements contained in paragraph (3) of this

12 subsection (d). As part of the annual procurement planning

13 process, the owners of clean coal facilities may offer

14 proposals to the Agency sourcing agreements with utilities

15 and alternate retail electric suppliers required to comply

16 with this subsection (d), as well as item (5) of subsection

17 (d) of Section 16-115 of the Public Utilities Act, covering

18 electricity generated by such facilities. In the case of

19 sourcing agreements that are power purchase agreements,

20 the contract price for electricity sales shall be

21 established on a cost-of-service basis. In the case of

22 sourcing agreements that are contracts for differences,

23 the contract price from which the reference price is

24 subtracted shall be established on a cost-of-service

25 basis. The sourcing agreements shall be included under and

26 governed by provisions of the Public Utilities Act.

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1 (6) Costs incurred under this subsection (d) or

2 pursuant to a contract entered into under this subsection

3 (d) shall be deemed prudently incurred and reasonable in

4 amount and the electric utility shall be entitled to full

5 cost recovery pursuant to the tariffs filed with the

6 Commission.

7 (d-5) Zero emission standard.

8 (1) Beginning with the delivery year commencing on June

9 1, 2017, the Agency shall, for electric utilities that

10 serve at least 100,000 retail customers in this State,

11 procure contracts with zero emission facilities that are

12 reasonably capable of generating cost-effective zero

13 emission credits in an amount approximately equal to 16% of

14 the actual amount of electricity delivered by each electric

15 utility to retail customers in the State during calendar

16 year 2014. For an electric utility serving fewer than

17 100,000 retail customers in this State that requested,

18 under Section 16-111.5 of the Public Utilities Act, that

19 the Agency procure power and energy for all or a portion of

20 the utility's Illinois load for the delivery year

21 commencing June 1, 2016, the Agency shall procure contracts

22 with zero emission facilities that are reasonably capable

23 of generating cost-effective zero emission credits in an

24 amount approximately equal to 16% of the portion of power

25 and energy to be procured by the Agency for the utility.

26 The duration of the contracts procured under this

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1 subsection (d-5) shall be for a term of 10 years ending May

2 31, 2027. The quantity of zero emission credits to be

3 procured under the contracts shall be all of the zero

4 emission credits generated by the zero emission facility in

5 each delivery year; however, if the zero emission facility

6 is owned by more than one entity, then the quantity of zero

7 emission credits to be procured under the contracts shall

8 be the amount of zero emission credits that are generated

9 from the portion of the zero emission facility that is

10 owned by the winning supplier.

11 The 16% value identified in this paragraph (1) is the

12 average of the percentage targets in subparagraph (B) of

13 paragraph (1) of subsection (c) of Section 1-75 of this Act

14 for the 5 delivery years beginning June 1, 2017.

15 The procurement process shall be subject to the

16 following provisions:

17 (A) Those zero emission facilities that intend to

18 participate in the procurement shall submit to the

19 Agency the following eligibility information for each

20 zero emission facility on or before the date

21 established by the Agency:

22 (i) the in-service date and remaining useful

23 life of the zero emission facility;

24 (ii) the amount of power generated annually

25 for each of the years 2005 through 2015, and the

26 projected zero emission credits to be generated

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1 over the remaining useful life of the zero emission

2 facility, which shall be used to determine the

3 capability of each facility;

4 (iii) the annual zero emission facility cost

5 projections, expressed on a per megawatthour

6 basis, over the next 6 delivery years, which shall

7 include the following: operation and maintenance

8 expenses; fully allocated overhead costs, which

9 shall be allocated using the methodology developed

10 by the Institute for Nuclear Power Operations;

11 fuel expenditures; non-fuel capital expenditures;

12 spent fuel expenditures; a return on working

13 capital; the cost of operational and market risks

14 that could be avoided by ceasing operation; and any

15 other costs necessary for continued operations,

16 provided that "necessary" means, for purposes of

17 this item (iii), that the costs could reasonably be

18 avoided only by ceasing operations of the zero

19 emission facility; and

20 (iv) a commitment to continue operating, for

21 the duration of the contract or contracts executed

22 under the procurement held under this subsection

23 (d-5), the zero emission facility that produces

24 the zero emission credits to be procured in the

25 procurement.

26 The information described in item (iii) of this

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1 subparagraph (A) may be submitted on a confidential basis

2 and shall be treated and maintained by the Agency, the

3 procurement administrator, and the Commission as

4 confidential and proprietary and exempt from disclosure

5 under subparagraphs (a) and (g) of paragraph (1) of Section

6 7 of the Freedom of Information Act. The Office of Attorney

7 General shall have access to, and maintain the

8 confidentiality of, such information pursuant to Section

9 6.5 of the Attorney General Act.

10 (B) The price for each zero emission credit

11 procured under this subsection (d-5) for each delivery

12 year shall be in an amount that equals the Social Cost

13 of Carbon, expressed on a price per megawatthour basis.

14 However, to ensure that the procurement remains

15 affordable to retail customers in this State if

16 electricity prices increase, the price in an

17 applicable delivery year shall be reduced below the

18 Social Cost of Carbon by the amount ("Price

19 Adjustment") by which the market price index for the

20 applicable delivery year exceeds the baseline market

21 price index for the consecutive 12-month period ending

22 May 31, 2016. If the Price Adjustment is greater than

23 or equal to the Social Cost of Carbon in an applicable

24 delivery year, then no payments shall be due in that

25 delivery year. The components of this calculation are

26 defined as follows:

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1 (i) Social Cost of Carbon: The Social Cost of

2 Carbon is $16.50 per megawatthour, which is based

3 on the U.S. Interagency Working Group on Social

4 Cost of Carbon's price in the August 2016 Technical

5 Update using a 3% discount rate, adjusted for

6 inflation for each year of the program. Beginning

7 with the delivery year commencing June 1, 2023, the

8 price per megawatthour shall increase by $1 per

9 megawatthour, and continue to increase by an

10 additional $1 per megawatthour each delivery year

11 thereafter.

12 (ii) Baseline market price index: The baseline

13 market price index for the consecutive 12-month

14 period ending May 31, 2016 is $31.40 per

15 megawatthour, which is based on the sum of (aa) the

16 average day-ahead energy price across all hours of

17 such 12-month period at the PJM Interconnection

18 LLC Northern Illinois Hub, (bb) 50% multiplied by

19 the Base Residual Auction, or its successor,

20 capacity price for the rest of the RTO zone group

21 determined by PJM Interconnection LLC, divided by

22 24 hours per day, and (cc) 50% multiplied by the

23 Planning Resource Auction, or its successor,

24 capacity price for Zone 4 determined by the

25 Midcontinent Independent System Operator, Inc.,

26 divided by 24 hours per day.

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1 (iii) Market price index: The market price

2 index for a delivery year shall be the sum of

3 projected energy prices and projected capacity

4 prices determined as follows:

5 (aa) Projected energy prices: the

6 projected energy prices for the applicable

7 delivery year shall be calculated once for the

8 year using the forward market price for the PJM

9 Interconnection, LLC Northern Illinois Hub.

10 The forward market price shall be calculated as

11 follows: the energy forward prices for each

12 month of the applicable delivery year averaged

13 for each trade date during the calendar year

14 immediately preceding that delivery year to

15 produce a single energy forward price for the

16 delivery year. The forward market price

17 calculation shall use data published by the

18 Intercontinental Exchange, or its successor.

19 (bb) Projected capacity prices:

20 (I) For the delivery years commencing

21 June 1, 2017, June 1, 2018, and June 1,

22 2019, the projected capacity price shall

23 be equal to the sum of (1) 50% multiplied

24 by the Base Residual Auction, or its

25 successor, price for the rest of the RTO

26 zone group as determined by PJM

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1 Interconnection LLC, divided by 24 hours

2 per day and, (2) 50% multiplied by the

3 resource auction price determined in the

4 resource auction administered by the

5 Midcontinent Independent System Operator,

6 Inc., in which the largest percentage of

7 load cleared for Local Resource Zone 4,

8 divided by 24 hours per day, and where such

9 price is determined by the Midcontinent

10 Independent System Operator, Inc.

11 (II) For the delivery year commencing

12 June 1, 2020, and each year thereafter, the

13 projected capacity price shall be equal to

14 the sum of (1) 50% multiplied by the Base

15 Residual Auction, or its successor, price

16 for the ComEd zone as determined by PJM

17 Interconnection LLC, divided by 24 hours

18 per day, and (2) 50% multiplied by the

19 resource auction price determined in the

20 resource auction administered by the

21 Midcontinent Independent System Operator,

22 Inc., in which the largest percentage of

23 load cleared for Local Resource Zone 4,

24 divided by 24 hours per day, and where such

25 price is determined by the Midcontinent

26 Independent System Operator, Inc.

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1 For purposes of this subsection (d-5):

2 "Rest of the RTO" and "ComEd Zone" shall have

3 the meaning ascribed to them by PJM

4 Interconnection, LLC.

5 "RTO" means regional transmission

6 organization.

7 (C) No later than 45 days after June 1, 2017 (the

8 effective date of Public Act 99-906) ~~this amendatory~~

9 ~~Act of the 99th General Assembly~~, the Agency shall

10 publish its proposed zero emission standard

11 procurement plan. The plan shall be consistent with the

12 provisions of this paragraph (1) and shall provide that

13 winning bids shall be selected based on public interest

14 criteria that include, but are not limited to,

15 minimizing carbon dioxide emissions that result from

16 electricity consumed in Illinois and minimizing sulfur

17 dioxide, nitrogen oxide, and particulate matter

18 emissions that adversely affect the citizens of this

19 State. In particular, the selection of winning bids

20 shall take into account the incremental environmental

21 benefits resulting from the procurement, such as any

22 existing environmental benefits that are preserved by

23 the procurements held under Public Act 99-906 ~~this~~

24 ~~amendatory Act of the 99th General Assembly~~ and would

25 cease to exist if the procurements were not held,

26 including the preservation of zero emission

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1 facilities. The plan shall also describe in detail how

2 each public interest factor shall be considered and

3 weighted in the bid selection process to ensure that

4 the public interest criteria are applied to the

5 procurement and given full effect.

6 For purposes of developing the plan, the Agency

7 shall consider any reports issued by a State agency,

8 board, or commission under House Resolution 1146 of the

9 98th General Assembly and paragraph (4) of subsection

10 (d) of Section 1-75 of this Act, as well as publicly

11 available analyses and studies performed by or for

12 regional transmission organizations that serve the

13 State and their independent market monitors.

14 Upon publishing of the zero emission standard

15 procurement plan, copies of the plan shall be posted

16 and made publicly available on the Agency's website.

17 All interested parties shall have 10 days following the

18 date of posting to provide comment to the Agency on the

19 plan. All comments shall be posted to the Agency's

20 website. Following the end of the comment period, but

21 no more than 60 days later than June 1, 2017 (the

22 effective date of Public Act 99-906) ~~this amendatory~~

23 ~~Act of the 99th General Assembly~~, the Agency shall

24 revise the plan as necessary based on the comments

25 received and file its zero emission standard

26 procurement plan with the Commission.

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1 If the Commission determines that the plan will

2 result in the procurement of cost-effective zero

3 emission credits, then the Commission shall, after

4 notice and hearing, but no later than 45 days after the

5 Agency filed the plan, approve the plan or approve with

6 modification. For purposes of this subsection (d-5),

7 "cost effective" means the projected costs of

8 procuring zero emission credits from zero emission

9 facilities do not cause the limit stated in paragraph

10 (2) of this subsection to be exceeded.

11 (C-5) As part of the Commission's review and

12 acceptance or rejection of the procurement results,

13 the Commission shall, in its public notice of

14 successful bidders:

15 (i) identify how the winning bids satisfy the

16 public interest criteria described in subparagraph

17 (C) of this paragraph (1) of minimizing carbon

18 dioxide emissions that result from electricity

19 consumed in Illinois and minimizing sulfur

20 dioxide, nitrogen oxide, and particulate matter

21 emissions that adversely affect the citizens of

22 this State;

23 (ii) specifically address how the selection of

24 winning bids takes into account the incremental

25 environmental benefits resulting from the

26 procurement, including any existing environmental

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1 benefits that are preserved by the procurements

2 held under Public Act 99-906 ~~this amendatory Act of~~

3 ~~the 99th General Assembly~~ and would have ceased to

4 exist if the procurements had not been held, such

5 as the preservation of zero emission facilities;

6 (iii) quantify the environmental benefit of

7 preserving the resources identified in item (ii)

8 of this subparagraph (C-5), including the

9 following:

10 (aa) the value of avoided greenhouse gas

11 emissions measured as the product of the zero

12 emission facilities' output over the contract

13 term multiplied by the U.S. Environmental

14 Protection Agency eGrid subregion carbon

15 dioxide emission rate and the U.S. Interagency

16 Working Group on Social Cost of Carbon's price

17 in the August 2016 Technical Update using a 3%

18 discount rate, adjusted for inflation for each

19 delivery year; and

20 (bb) the costs of replacement with other

21 zero carbon dioxide resources, including wind

22 and photovoltaic, based upon the simple

23 average of the following:

24 (I) the price, or if there is more than

25 one price, the average of the prices, paid

26 for renewable energy credits from new

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1 utility-scale wind projects in the

2 procurement events specified in item (i)

3 of subparagraph (G) of paragraph (1) of

4 subsection (c) of Section 1-75 of this Act;

5 and

6 (II) the price, or if there is more

7 than one price, the average of the prices,

8 paid for renewable energy credits from new

9 utility-scale solar projects and

10 brownfield site photovoltaic projects in

11 the procurement events specified in item

12 (ii) of subparagraph (G) of paragraph (1)

13 of subsection (c) of Section 1-75 of this

14 Act and, after January 1, 2015, renewable

15 energy credits from photovoltaic

16 distributed generation projects in

17 procurement events held under subsection

18 (c) of Section 1-75 of this Act.

19 Each utility shall enter into binding contractual

20 arrangements with the winning suppliers.

21 The procurement described in this subsection

22 (d-5), including, but not limited to, the execution of

23 all contracts procured, shall be completed no later

24 than May 10, 2017. Based on the effective date of

25 Public Act 99-906 ~~this amendatory Act of the 99th~~

26 ~~General Assembly~~, the Agency and Commission may, as

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1 appropriate, modify the various dates and timelines

2 under this subparagraph and subparagraphs (C) and (D)

3 of this paragraph (1). The procurement and plan

4 approval processes required by this subsection (d-5)

5 shall be conducted in conjunction with the procurement

6 and plan approval processes required by subsection (c)

7 of this Section and Section 16-111.5 of the Public

8 Utilities Act, to the extent practicable.

9 Notwithstanding whether a procurement event is

10 conducted under Section 16-111.5 of the Public

11 Utilities Act, the Agency shall immediately initiate a

12 procurement process on June 1, 2017 (the effective date

13 of Public Act 99-906) ~~this amendatory Act of the 99th~~

14 ~~General Assembly~~.

15 (D) Following the procurement event described in

16 this paragraph (1) and consistent with subparagraph

17 (B) of this paragraph (1), the Agency shall calculate

18 the payments to be made under each contract for the

19 next delivery year based on the market price index for

20 that delivery year. The Agency shall publish the

21 payment calculations no later than May 25, 2017 and

22 every May 25 thereafter.

23 (E) Notwithstanding the requirements of this

24 subsection (d-5), the contracts executed under this

25 subsection (d-5) shall provide that the zero emission

26 facility may, as applicable, suspend or terminate

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1 performance under the contracts in the following

2 instances:

3 (i) A zero emission facility shall be excused

4 from its performance under the contract for any

5 cause beyond the control of the resource,

6 including, but not restricted to, acts of God,

7 flood, drought, earthquake, storm, fire,

8 lightning, epidemic, war, riot, civil disturbance

9 or disobedience, labor dispute, labor or material

10 shortage, sabotage, acts of public enemy,

11 explosions, orders, regulations or restrictions

12 imposed by governmental, military, or lawfully

13 established civilian authorities, which, in any of

14 the foregoing cases, by exercise of commercially

15 reasonable efforts the zero emission facility

16 could not reasonably have been expected to avoid,

17 and which, by the exercise of commercially

18 reasonable efforts, it has been unable to

19 overcome. In such event, the zero emission

20 facility shall be excused from performance for the

21 duration of the event, including, but not limited

22 to, delivery of zero emission credits, and no

23 payment shall be due to the zero emission facility

24 during the duration of the event.

25 (ii) A zero emission facility shall be

26 permitted to terminate the contract if legislation

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1 is enacted into law by the General Assembly that

2 imposes or authorizes a new tax, special

3 assessment, or fee on the generation of

4 electricity, the ownership or leasehold of a

5 generating unit, or the privilege or occupation of

6 such generation, ownership, or leasehold of

7 generation units by a zero emission facility.

8 However, the provisions of this item (ii) do not

9 apply to any generally applicable tax, special

10 assessment or fee, or requirements imposed by

11 federal law.

12 (iii) A zero emission facility shall be

13 permitted to terminate the contract in the event

14 that the resource requires capital expenditures in

15 excess of $40,000,000 that were neither known nor

16 reasonably foreseeable at the time it executed the

17 contract and that a prudent owner or operator of

18 such resource would not undertake.

19 (iv) A zero emission facility shall be

20 permitted to terminate the contract in the event

21 the Nuclear Regulatory Commission terminates the

22 resource's license.

23 (F) If the zero emission facility elects to

24 terminate a contract under this subparagraph (E, of

25 this paragraph (1), then the Commission shall reopen

26 the docket in which the Commission approved the zero

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1 emission standard procurement plan under subparagraph

2 (C) of this paragraph (1) and, after notice and

3 hearing, enter an order acknowledging the contract

4 termination election if such termination is consistent

5 with the provisions of this subsection (d-5).

6 (2) For purposes of this subsection (d-5), the amount

7 paid per kilowatthour means the total amount paid for

8 electric service expressed on a per kilowatthour basis. For

9 purposes of this subsection (d-5), the total amount paid

10 for electric service includes, without limitation, amounts

11 paid for supply, transmission, distribution, surcharges,

12 and add-on taxes.

13 Notwithstanding the requirements of this subsection

14 (d-5), the contracts executed under this subsection (d-5)

15 shall provide that the total of zero emission credits

16 procured under a procurement plan shall be subject to the

17 limitations of this paragraph (2). For each delivery year,

18 the contractual volume receiving payments in such year

19 shall be reduced for all retail customers based on the

20 amount necessary to limit the net increase that delivery

21 year to the costs of those credits included in the amounts

22 paid by eligible retail customers in connection with

23 electric service to no more than 1.65% of the amount paid

24 per kilowatthour by eligible retail customers during the

25 year ending May 31, 2009. The result of this computation

26 shall apply to and reduce the procurement for all retail

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1 customers, and all those customers shall pay the same

2 single, uniform cents per kilowatthour charge under

3 subsection (k) of Section 16-108 of the Public Utilities

4 Act. To arrive at a maximum dollar amount of zero emission

5 credits to be paid for the particular delivery year, the

6 resulting per kilowatthour amount shall be applied to the

7 actual amount of kilowatthours of electricity delivered by

8 the electric utility in the delivery year immediately prior

9 to the procurement, to all retail customers in its service

10 territory. Unpaid contractual volume for any delivery year

11 shall be paid in any subsequent delivery year in which such

12 payments can be made without exceeding the amount specified

13 in this paragraph (2). The calculations required by this

14 paragraph (2) shall be made only once for each procurement

15 plan year. Once the determination as to the amount of zero

16 emission credits to be paid is made based on the

17 calculations set forth in this paragraph (2), no subsequent

18 rate impact determinations shall be made and no adjustments

19 to those contract amounts shall be allowed. All costs

20 incurred under those contracts and in implementing this

21 subsection (d-5) shall be recovered by the electric utility

22 as provided in this Section.

23 No later than June 30, 2019, the Commission shall

24 review the limitation on the amount of zero emission

25 credits procured under this subsection (d-5) and report to

26 the General Assembly its findings as to whether that

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1 limitation unduly constrains the procurement of

2 cost-effective zero emission credits.

3 (3) Six years after the execution of a contract under

4 this subsection (d-5), the Agency shall determine whether

5 the actual zero emission credit payments received by the

6 supplier over the 6-year period exceed the Average ZEC

7 Payment. In addition, at the end of the term of a contract

8 executed under this subsection (d-5), or at the time, if

9 any, a zero emission facility's contract is terminated

10 under subparagraph (E) of paragraph (1) of this subsection

11 (d-5), then the Agency shall determine whether the actual

12 zero emission credit payments received by the supplier over

13 the term of the contract exceed the Average ZEC Payment,

14 after taking into account any amounts previously credited

15 back to the utility under this paragraph (3). If the Agency

16 determines that the actual zero emission credit payments

17 received by the supplier over the relevant period exceed

18 the Average ZEC Payment, then the supplier shall credit the

19 difference back to the utility. The amount of the credit

20 shall be remitted to the applicable electric utility no

21 later than 120 days after the Agency's determination, which

22 the utility shall reflect as a credit on its retail

23 customer bills as soon as practicable; however, the credit

24 remitted to the utility shall not exceed the total amount

25 of payments received by the facility under its contract.

26 For purposes of this Section, the Average ZEC Payment

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1 shall be calculated by multiplying the quantity of zero

2 emission credits delivered under the contract times the

3 average contract price. The average contract price shall be

4 determined by subtracting the amount calculated under

5 subparagraph (B) of this paragraph (3) from the amount

6 calculated under subparagraph (A) of this paragraph (3), as

7 follows:

8 (A) The average of the Social Cost of Carbon, as

9 defined in subparagraph (B) of paragraph (1) of this

10 subsection (d-5), during the term of the contract.

11 (B) The average of the market price indices, as

12 defined in subparagraph (B) of paragraph (1) of this

13 subsection (d-5), during the term of the contract,

14 minus the baseline market price index, as defined in

15 subparagraph (B) of paragraph (1) of this subsection

16 (d-5).

17 If the subtraction yields a negative number, then the

18 Average ZEC Payment shall be zero.

19 (4) Cost-effective zero emission credits procured from

20 zero emission facilities shall satisfy the applicable

21 definitions set forth in Section 1-10 of this Act.

22 (5) The electric utility shall retire all zero emission

23 credits used to comply with the requirements of this

24 subsection (d-5).

25 (6) Electric utilities shall be entitled to recover all

26 of the costs associated with the procurement of zero

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1 emission credits through an automatic adjustment clause

2 tariff in accordance with subsection (k) and (m) of Section

3 16-108 of the Public Utilities Act, and the contracts

4 executed under this subsection (d-5) shall provide that the

5 utilities' payment obligations under such contracts shall

6 be reduced if an adjustment is required under subsection

7 (m) of Section 16-108 of the Public Utilities Act.

8 (7) This subsection (d-5) shall become inoperative on

9 January 1, 2028.

10 (e) The draft procurement plans are subject to public

11 comment, as required by Section 16-111.5 of the Public

12 Utilities Act.

13 (f) The Agency shall submit the final procurement plan to

14 the Commission. The Agency shall revise a procurement plan if

15 the Commission determines that it does not meet the standards

16 set forth in Section 16-111.5 of the Public Utilities Act.

17 (g) The Agency shall assess fees to each affected utility

18 to recover the costs incurred in preparation of the annual

19 procurement plan for the utility.

20 (h) The Agency shall assess fees to each bidder to recover

21 the costs incurred in connection with a competitive procurement

22 process.

23 (i) A renewable energy credit, carbon emission credit, or

24 zero emission credit can only be used once to comply with a

25 single portfolio or other standard as set forth in subsection

26 (c), subsection (d), or subsection (d-5) of this Section,

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1 respectively. A renewable energy credit, carbon emission

2 credit, or zero emission credit cannot be used to satisfy the

3 requirements of more than one standard. If more than one type

4 of credit is issued for the same megawatt hour of energy, only

5 one credit can be used to satisfy the requirements of a single

6 standard. After such use, the credit must be retired together

7 with any other credits issued for the same megawatt hour of

8 energy.

9 (Source: P.A. 98-463, eff. 8-16-13; 99-536, eff. 7-8-16;

10 99-906, eff. 6-1-17; revised 9-25-17.)

11 Section 99. Effective date. This Act takes effect June 1,

12 2018.