Public Act 103-0613
HB5539 EnrolledLRB103 38494 CES 68630 b HB5539 Enrolled LRB103 38494 CES 68630 b
HB5539 Enrolled LRB103 38494 CES 68630 b
AN ACT concerning utilities.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Utilities Act is amended by changing
Sections 8-103, 8-103B, and 8-104 as follows:
(220 ILCS 5/8-103)
Sec. 8-103. Energy efficiency and demand-response
measures.
(a) It is the policy of the State that electric utilities
are required to use cost-effective energy efficiency and
demand-response measures to reduce delivery load. Requiring
investment in cost-effective energy efficiency and
demand-response measures will reduce direct and indirect costs
to consumers by decreasing environmental impacts and by
avoiding or delaying the need for new generation,
transmission, and distribution infrastructure. It serves the
public interest to allow electric utilities to recover costs
for reasonably and prudently incurred expenses for energy
efficiency and demand-response measures. As used in this
Section, "cost-effective" means that the measures satisfy the
total resource cost test. The low-income measures described in
subsection (f)(4) of this Section shall not be required to
meet the total resource cost test. For purposes of this
HB5539 Enrolled LRB103 38494 CES 68630 b
Section, the terms "energy-efficiency", "demand-response",
"electric utility", and "total resource cost test" shall have
the meanings set forth in the Illinois Power Agency Act. For
purposes of this Section, the amount per kilowatthour means
the total amount paid for electric service expressed on a per
kilowatthour basis. For purposes of this Section, the total
amount paid for electric service includes without limitation
estimated amounts paid for supply, transmission, distribution,
surcharges, and add-on-taxes.
(a-5) This Section applies to electric utilities serving
500,000 or less but more than 200,000 retail customers in this
State. Through December 31, 2017, this Section also applies to
electric utilities serving more than 500,000 retail customers
in the State.
(b) Electric utilities shall implement cost-effective
energy efficiency measures to meet the following incremental
annual energy savings goals:
(1) 0.2% of energy delivered in the year commencing
June 1, 2008;
(2) 0.4% of energy delivered in the year commencing
June 1, 2009;
(3) 0.6% of energy delivered in the year commencing
June 1, 2010;
(4) 0.8% of energy delivered in the year commencing
June 1, 2011;
(5) 1% of energy delivered in the year commencing June
1, 2012;
(6) 1.4% of energy delivered in the year commencing
June 1, 2013;
(7) 1.8% of energy delivered in the year commencing
June 1, 2014; and
(8) 2% of energy delivered in the year commencing June
1, 2015 and each year thereafter.
Electric utilities may comply with this subsection (b) by
meeting the annual incremental savings goal in the applicable
year or by showing that the total cumulative annual savings
within a 3-year planning period associated with measures
implemented after May 31, 2014 was equal to the sum of each
annual incremental savings requirement from May 31, 2014
through the end of the applicable year.
(c) Electric utilities shall implement cost-effective
demand-response measures to reduce peak demand by 0.1% over
the prior year for eligible retail customers, as defined in
Section 16-111.5 of this Act, and for customers that elect
hourly service from the utility pursuant to Section 16-107 of
this Act, provided those customers have not been declared
competitive. This requirement commences June 1, 2008 and
continues for 10 years.
(d) Notwithstanding the requirements of subsections (b)
and (c) of this Section, an electric utility shall reduce the
amount of energy efficiency and demand-response measures
implemented over a 3-year planning period by an amount
necessary to limit the estimated average annual increase in
the amounts paid by retail customers in connection with
electric service due to the cost of those measures to:
(1) in 2008, no more than 0.5% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(2) in 2009, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2008 or 1% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(3) in 2010, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2009 or 1.5% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(4) in 2011, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2010 or 2% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007; and
(5) thereafter, the amount of energy efficiency and
demand-response measures implemented for any single year
shall be reduced by an amount necessary to limit the
estimated average net increase due to the cost of these
measures included in the amounts paid by eligible retail
customers in connection with electric service to no more
than the greater of 2.015% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007 or the incremental amount per kilowatthour paid
for these measures in 2011.
No later than June 30, 2011, the Commission shall review
the limitation on the amount of energy efficiency and
demand-response measures implemented pursuant to this Section
and report to the General Assembly its findings as to whether
that limitation unduly constrains the procurement of energy
efficiency and demand-response measures.
(e) Electric utilities shall be responsible for overseeing
the design, development, and filing of energy efficiency and
demand-response plans with the Commission. Electric utilities
shall implement 100% of the demand-response measures in the
plans. Electric utilities shall implement 75% of the energy
efficiency measures approved by the Commission, and may, as
part of that implementation, outsource various aspects of
program development and implementation. The remaining 25% of
those energy efficiency measures approved by the Commission
shall be implemented by the Department of Commerce and
Economic Opportunity, and must be designed in conjunction with
the utility and the filing process. The Department may
outsource development and implementation of energy efficiency
measures. A minimum of 10% of the entire portfolio of
cost-effective energy efficiency measures shall be procured
from units of local government, municipal corporations, school
districts, public institutions of higher education, and
community college districts. The Department shall coordinate
the implementation of these measures.
The apportionment of the dollars to cover the costs to
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and contracts to the utility. The Department is authorized to
adopt any rules necessary and prescribe procedures in order to
ensure compliance by applicants in carrying out the purposes
of rebate agreements for energy efficiency measures
implemented by the Department made under this Section.
The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency and demand-response measures that the utility
implements.
A utility providing approved energy efficiency and
demand-response measures in the State shall be permitted to
recover costs of those measures through an automatic
adjustment clause tariff filed with and approved by the
Commission. The tariff shall be established outside the
context of a general rate case. Each year the Commission shall
initiate a review to reconcile any amounts collected with the
actual costs and to determine the required adjustment to the
annual tariff factor to match annual expenditures.
Each utility shall include, in its recovery of costs, the
costs estimated for both the utility's and the Department's
implementation of energy efficiency and demand-response
measures. Costs collected by the utility for measures
implemented by the Department shall be submitted to the
Department pursuant to Section 605-323 of the Civil
Administrative Code of Illinois, shall be deposited into the
Energy Efficiency Portfolio Standards Fund, and shall be used
by the Department solely for the purpose of implementing these
measures. A utility shall not be required to advance any
moneys to the Department but only to forward such funds as it
has collected. The Department shall report to the Commission
on an annual basis regarding the costs actually incurred by
the Department in the implementation of the measures. Any
changes to the costs of energy efficiency measures as a result
of plan modifications shall be appropriately reflected in
amounts recovered by the utility and turned over to the
Department.
The portfolio of measures, administered by both the
utilities and the Department, shall, in combination, be
designed to achieve the annual savings targets described in
subsections (b) and (c) of this Section, as modified by
subsection (d) of this Section.
The utility and the Department shall agree upon a
reasonable portfolio of measures and determine the measurable
corresponding percentage of the savings goals associated with
measures implemented by the utility or Department.
No utility shall be assessed a penalty under subsection
(f) of this Section for failure to make a timely filing if that
failure is the result of a lack of agreement with the
Department with respect to the allocation of responsibilities
or related costs or target assignments. In that case, the
Department and the utility shall file their respective plans
with the Commission and the Commission shall determine an
appropriate division of measures and programs that meets the
requirements of this Section.
If the Department is unable to meet incremental annual
performance goals for the portion of the portfolio implemented
by the Department, then the utility and the Department shall
jointly submit a modified filing to the Commission explaining
the performance shortfall and recommending an appropriate
course going forward, including any program modifications that
may be appropriate in light of the evaluations conducted under
item (7) of subsection (f) of this Section. In this case, the
utility obligation to collect the Department's costs and turn
over those funds to the Department under this subsection (e)
shall continue only if the Commission approves the
modifications to the plan proposed by the Department.
(f) No later than November 15, 2007, each electric utility
shall file an energy efficiency and demand-response plan with
the Commission to meet the energy efficiency and
demand-response standards for 2008 through 2010. No later than
October 1, 2010, each electric utility shall file an energy
efficiency and demand-response plan with the Commission to
meet the energy efficiency and demand-response standards for
2011 through 2013. Every 3 years thereafter, each electric
utility shall file, no later than September 1, an energy
efficiency and demand-response plan with the Commission. If a
utility does not file such a plan by September 1 of an
applicable year, it shall face a penalty of $100,000 per day
until the plan is filed. Each utility's plan shall set forth
the utility's proposals to meet the utility's portion of the
energy efficiency standards identified in subsection (b) and
the demand-response standards identified in subsection (c) of
this Section as modified by subsections (d) and (e), taking
into account the unique circumstances of the utility's service
territory. The Commission shall seek public comment on the
utility's plan and shall issue an order approving or
disapproving each plan within 5 months after its submission.
If the Commission disapproves a plan, the Commission shall,
within 30 days, describe in detail the reasons for the
disapproval and describe a path by which the utility may file a
revised draft of the plan to address the Commission's concerns
satisfactorily. If the utility does not refile with the
Commission within 60 days, the utility shall be subject to
penalties at a rate of $100,000 per day until the plan is
filed. This process shall continue, and penalties shall
accrue, until the utility has successfully filed a portfolio
of energy efficiency and demand-response measures. Penalties
shall be deposited into the Energy Efficiency Trust Fund. In
submitting proposed energy efficiency and demand-response
plans and funding levels to meet the savings goals adopted by
this Act the utility shall:
(1) Demonstrate that its proposed energy efficiency
and demand-response measures will achieve the requirements
that are identified in subsections (b) and (c) of this
Section, as modified by subsections (d) and (e).
(2) Present specific proposals to implement new
building and appliance standards that have been placed
into effect.
(3) Present estimates of the total amount paid for
electric service expressed on a per kilowatthour basis
associated with the proposed portfolio of measures
designed to meet the requirements that are identified in
subsections (b) and (c) of this Section, as modified by
subsections (d) and (e).
(4) Coordinate with the Department to present a
portfolio of energy efficiency measures proportionate to
the share of total annual utility revenues in Illinois
from households at or below 150% of the poverty level. The
energy efficiency programs shall be targeted to households
with incomes at or below 80% of area median income.
(5) Demonstrate that its overall portfolio of energy
efficiency and demand-response measures, not including
programs covered by item (4) of this subsection (f), are
cost-effective using the total resource cost test and
represent a diverse cross-section of opportunities for
customers of all rate classes to participate in the
programs.
(6) Include a proposed cost-recovery tariff mechanism
to fund the proposed energy efficiency and demand-response
measures and to ensure the recovery of the prudently and
reasonably incurred costs of Commission-approved programs.
(7) Provide for an annual independent evaluation of
the performance of the cost-effectiveness of the utility's
portfolio of measures and the Department's portfolio of
measures, as well as a full review of the 3-year results of
the broader net program impacts and, to the extent
practical, for adjustment of the measures on a
going-forward basis as a result of the evaluations. The
resources dedicated to evaluation shall not exceed 3% of
portfolio resources in any given year.
(g) No more than 3% of energy efficiency and
demand-response program revenue may be allocated for
demonstration of breakthrough equipment and devices.
(h) This Section does not apply to an electric utility
that on December 31, 2005 provided electric service to fewer
than 100,000 customers in Illinois.
(i) If, after 2 years, an electric utility fails to meet
the efficiency standard specified in subsection (b) of this
Section, as modified by subsections (d) and (e), it shall make
a contribution to the Low-Income Home Energy Assistance
Program. The combined total liability for failure to meet the
goal shall be $1,000,000, which shall be assessed as follows:
a large electric utility shall pay $665,000, and a medium
electric utility shall pay $335,000. If, after 3 years, an
electric utility fails to meet the efficiency standard
specified in subsection (b) of this Section, as modified by
subsections (d) and (e), it shall make a contribution to the
Low-Income Home Energy Assistance Program. The combined total
liability for failure to meet the goal shall be $1,000,000,
which shall be assessed as follows: a large electric utility
shall pay $665,000, and a medium electric utility shall pay
$335,000. In addition, the responsibility for implementing the
energy efficiency measures of the utility making the payment
shall be transferred to the Illinois Power Agency if, after 3
years, or in any subsequent 3-year period, the utility fails
to meet the efficiency standard specified in subsection (b) of
this Section, as modified by subsections (d) and (e). The
Agency shall implement a competitive procurement program to
procure resources necessary to meet the standards specified in
this Section as modified by subsections (d) and (e), with
costs for those resources to be recovered in the same manner as
products purchased through the procurement plan as provided in
Section 16-111.5. The Director shall implement this
requirement in connection with the procurement plan as
provided in Section 16-111.5.
For purposes of this Section, (i) a "large electric
utility" is an electric utility that, on December 31, 2005,
served more than 2,000,000 electric customers in Illinois;
(ii) a "medium electric utility" is an electric utility that,
on December 31, 2005, served 2,000,000 or fewer but more than
100,000 electric customers in Illinois; and (iii) Illinois
electric utilities that are affiliated by virtue of a common
parent company are considered a single electric utility.
(j) If, after 3 years, or any subsequent 3-year period,
the Department fails to implement the Department's share of
energy efficiency measures required by the standards in
subsection (b), then the Illinois Power Agency may assume
responsibility for and control of the Department's share of
the required energy efficiency measures. The Agency shall
implement a competitive procurement program to procure
resources necessary to meet the standards specified in this
Section, with the costs of these resources to be recovered in
the same manner as provided for the Department in this
Section.
(k) No electric utility shall be deemed to have failed to
meet the energy efficiency standards to the extent any such
failure is due to a failure of the Department or the Agency.
(l)(1) The energy efficiency and demand-response plans of
electric utilities serving more than 500,000 retail customers
in the State that were approved by the Commission on or before
the effective date of this amendatory Act of the 99th General
Assembly for the period June 1, 2014 through May 31, 2017 shall
continue to be in force and effect through December 31, 2017 so
that the energy efficiency programs set forth in those plans
continue to be offered during the period June 1, 2017 through
December 31, 2017. Each such utility is authorized to
increase, on a pro rata basis, the energy savings goals and
budgets approved in its plan to reflect the additional 7
months of the plan's operation, provided that such increase
shall also incorporate reductions to goals and budgets to
reflect the proportion of the utility's load attributable to
customers who are exempt from this Section under subsection
(m) of this Section.
(2) If an electric utility serving more than 500,000
retail customers in the State filed with the Commission, under
subsection (f) of this Section, its proposed energy efficiency
and demand-response plan for the period June 1, 2017 through
May 31, 2020, and the Commission has not yet entered its final
order approving such plan on or before the effective date of
this amendatory Act of the 99th General Assembly, then the
utility shall file a notice of withdrawal with the Commission,
following such effective date, to withdraw the proposed energy
efficiency and demand-response plan. Upon receipt of such
notice, the Commission shall dismiss with prejudice any docket
that had been initiated to investigate such plan, and the plan
and the record related thereto shall not be the subject of any
further hearing, investigation, or proceeding of any kind.
(3) For those electric utilities that serve more than
500,000 retail customers in the State, this amendatory Act of
the 99th General Assembly preempts and supersedes any orders
entered by the Commission that approved such utilities' energy
efficiency and demand response plans for the period commencing
June 1, 2017 and ending May 31, 2020. Any such orders shall be
void, and the provisions of paragraph (1) of this subsection
(l) shall apply.
(m) Notwithstanding anything to the contrary, after May
31, 2017, this Section does not apply to any retail customers
of an electric utility that serves more than 3,000,000 retail
customers in the State and whose total highest 30 minute
demand was more than 10,000 kilowatts, or any retail customers
of an electric utility that serves less than 3,000,000 retail
customers but more than 500,000 retail customers in the State
and whose total highest 15 minute demand was more than 10,000
kilowatts. For purposes of this subsection (m), "retail
customer" has the meaning set forth in Section 16-102 of this
Act. The criteria for determining whether this subsection (m)
is applicable to a retail customer shall be based on the 12
consecutive billing periods prior to the start of the first
year of each such multi-year plan.
(Source: P.A. 98-90, eff. 7-15-13; 99-906, eff. 6-1-17.)
(220 ILCS 5/8-103B)
Sec. 8-103B. Energy efficiency and demand-response
measures.
(a) It is the policy of the State that electric utilities
are required to use cost-effective energy efficiency and
demand-response measures to reduce delivery load. Requiring
investment in cost-effective energy efficiency and
demand-response measures will reduce direct and indirect costs
to consumers by decreasing environmental impacts and by
avoiding or delaying the need for new generation,
transmission, and distribution infrastructure. It serves the
public interest to allow electric utilities to recover costs
for reasonably and prudently incurred expenditures for energy
efficiency and demand-response measures. As used in this
Section, "cost-effective" means that the measures satisfy the
total resource cost test. The low-income measures described in
subsection (c) of this Section shall not be required to meet
the total resource cost test. For purposes of this Section,
the terms "energy-efficiency", "demand-response", "electric
utility", and "total resource cost test" have the meanings set
forth in the Illinois Power Agency Act. "Black, indigenous,
and people of color" and "BIPOC" means people who are members
of the groups described in subparagraphs (a) through (e) of
paragraph (A) of subsection (1) of Section 2 of the Business
Enterprise for Minorities, Women, and Persons with
Disabilities Act.
(a-5) This Section applies to electric utilities serving
more than 500,000 retail customers in the State for those
multi-year plans commencing after December 31, 2017.
(b) For purposes of this Section, electric utilities
subject to this Section that serve more than 3,000,000 retail
customers in the State shall be deemed to have achieved a
cumulative persisting annual savings of 6.6% from energy
efficiency measures and programs implemented during the period
beginning January 1, 2012 and ending December 31, 2017, which
percent is based on the deemed average weather normalized
sales of electric power and energy during calendar years 2014,
2015, and 2016 of 88,000,000 MWhs. For the purposes of this
subsection (b) and subsection (b-5), the 88,000,000 MWhs of
deemed electric power and energy sales shall be reduced by the
number of MWhs equal to the sum of the annual consumption of
customers that have opted out of subsections (a) through (j)
of this Section under paragraph (1) of subsection (l) of this
Section, as averaged across the calendar years 2014, 2015, and
2016. After 2017, the deemed value of cumulative persisting
annual savings from energy efficiency measures and programs
implemented during the period beginning January 1, 2012 and
ending December 31, 2017, shall be reduced each year, as
follows, and the applicable value shall be applied to and
count toward the utility's achievement of the cumulative
persisting annual savings goals set forth in subsection (b-5):
(1) 5.8% deemed cumulative persisting annual savings
for the year ending December 31, 2018;
(2) 5.2% deemed cumulative persisting annual savings
for the year ending December 31, 2019;
(3) 4.5% deemed cumulative persisting annual savings
for the year ending December 31, 2020;
(4) 4.0% deemed cumulative persisting annual savings
for the year ending December 31, 2021;
(5) 3.5% deemed cumulative persisting annual savings
for the year ending December 31, 2022;
(6) 3.1% deemed cumulative persisting annual savings
for the year ending December 31, 2023;
(7) 2.8% deemed cumulative persisting annual savings
for the year ending December 31, 2024;
(8) 2.5% deemed cumulative persisting annual savings
for the year ending December 31, 2025;
(9) 2.3% deemed cumulative persisting annual savings
for the year ending December 31, 2026;
(10) 2.1% deemed cumulative persisting annual savings
for the year ending December 31, 2027;
(11) 1.8% deemed cumulative persisting annual savings
for the year ending December 31, 2028;
(12) 1.7% deemed cumulative persisting annual savings
for the year ending December 31, 2029;
(13) 1.5% deemed cumulative persisting annual savings
for the year ending December 31, 2030;
(14) 1.3% deemed cumulative persisting annual savings
for the year ending December 31, 2031;
(15) 1.1% deemed cumulative persisting annual savings
for the year ending December 31, 2032;
(16) 0.9% deemed cumulative persisting annual savings
for the year ending December 31, 2033;
(17) 0.7% deemed cumulative persisting annual savings
for the year ending December 31, 2034;
(18) 0.5% deemed cumulative persisting annual savings
for the year ending December 31, 2035;
(19) 0.4% deemed cumulative persisting annual savings
for the year ending December 31, 2036;
(20) 0.3% deemed cumulative persisting annual savings
for the year ending December 31, 2037;
(21) 0.2% deemed cumulative persisting annual savings
for the year ending December 31, 2038;
(22) 0.1% deemed cumulative persisting annual savings
for the year ending December 31, 2039; and
(23) 0.0% deemed cumulative persisting annual savings
for the year ending December 31, 2040 and all subsequent
years.
For purposes of this Section, "cumulative persisting
annual savings" means the total electric energy savings in a
given year from measures installed in that year or in previous
years, but no earlier than January 1, 2012, that are still
operational and providing savings in that year because the
measures have not yet reached the end of their useful lives.
(b-5) Beginning in 2018, electric utilities subject to
this Section that serve more than 3,000,000 retail customers
in the State shall achieve the following cumulative persisting
annual savings goals, as modified by subsection (f) of this
Section and as compared to the deemed baseline of 88,000,000
MWhs of electric power and energy sales set forth in
subsection (b), as reduced by the number of MWhs equal to the
sum of the annual consumption of customers that have opted out
of subsections (a) through (j) of this Section under paragraph
(1) of subsection (l) of this Section as averaged across the
calendar years 2014, 2015, and 2016, through the
implementation of energy efficiency measures during the
applicable year and in prior years, but no earlier than
January 1, 2012:
(1) 7.8% cumulative persisting annual savings for the
year ending December 31, 2018;
(2) 9.1% cumulative persisting annual savings for the
year ending December 31, 2019;
(3) 10.4% cumulative persisting annual savings for the
year ending December 31, 2020;
(4) 11.8% cumulative persisting annual savings for the
year ending December 31, 2021;
(5) 13.1% cumulative persisting annual savings for the
year ending December 31, 2022;
(6) 14.4% cumulative persisting annual savings for the
year ending December 31, 2023;
(7) 15.7% cumulative persisting annual savings for the
year ending December 31, 2024;
(8) 17% cumulative persisting annual savings for the
year ending December 31, 2025;
(9) 17.9% cumulative persisting annual savings for the
year ending December 31, 2026;
(10) 18.8% cumulative persisting annual savings for
the year ending December 31, 2027;
(11) 19.7% cumulative persisting annual savings for
the year ending December 31, 2028;
(12) 20.6% cumulative persisting annual savings for
the year ending December 31, 2029; and
(13) 21.5% cumulative persisting annual savings for
the year ending December 31, 2030.
No later than December 31, 2021, the Illinois Commerce
Commission shall establish additional cumulative persisting
annual savings goals for the years 2031 through 2035. No later
than December 31, 2024, the Illinois Commerce Commission shall
establish additional cumulative persisting annual savings
goals for the years 2036 through 2040. The Commission shall
also establish additional cumulative persisting annual savings
goals every 5 years thereafter to ensure that utilities always
have goals that extend at least 11 years into the future. The
cumulative persisting annual savings goals beyond the year
2030 shall increase by 0.9 percentage points per year, absent
a Commission decision to initiate a proceeding to consider
establishing goals that increase by more or less than that
amount. Such a proceeding must be conducted in accordance with
the procedures described in subsection (f) of this Section. If
such a proceeding is initiated, the cumulative persisting
annual savings goals established by the Commission through
that proceeding shall reflect the Commission's best estimate
of the maximum amount of additional savings that are forecast
to be cost-effectively achievable unless such best estimates
would result in goals that represent less than 0.5 percentage
point annual increases in total cumulative persisting annual
savings. The Commission may only establish goals that
represent less than 0.5 percentage point annual increases in
cumulative persisting annual savings if it can demonstrate,
based on clear and convincing evidence and through independent
analysis, that 0.5 percentage point increases are not
cost-effectively achievable. The Commission shall inform its
decision based on an energy efficiency potential study that
conforms to the requirements of this Section.
(b-10) For purposes of this Section, electric utilities
subject to this Section that serve less than 3,000,000 retail
customers but more than 500,000 retail customers in the State
shall be deemed to have achieved a cumulative persisting
annual savings of 6.6% from energy efficiency measures and
programs implemented during the period beginning January 1,
2012 and ending December 31, 2017, which is based on the deemed
average weather normalized sales of electric power and energy
during calendar years 2014, 2015, and 2016 of 36,900,000 MWhs.
For the purposes of this subsection (b-10) and subsection
(b-15), the 36,900,000 MWhs of deemed electric power and
energy sales shall be reduced by the number of MWhs equal to
the sum of the annual consumption of customers that have opted
out of subsections (a) through (j) of this Section under
paragraph (1) of subsection (l) of this Section, as averaged
across the calendar years 2014, 2015, and 2016. After 2017,
the deemed value of cumulative persisting annual savings from
energy efficiency measures and programs implemented during the
period beginning January 1, 2012 and ending December 31, 2017,
shall be reduced each year, as follows, and the applicable
value shall be applied to and count toward the utility's
achievement of the cumulative persisting annual savings goals
set forth in subsection (b-15):
(1) 5.8% deemed cumulative persisting annual savings
for the year ending December 31, 2018;
(2) 5.2% deemed cumulative persisting annual savings
for the year ending December 31, 2019;
(3) 4.5% deemed cumulative persisting annual savings
for the year ending December 31, 2020;
(4) 4.0% deemed cumulative persisting annual savings
for the year ending December 31, 2021;
(5) 3.5% deemed cumulative persisting annual savings
for the year ending December 31, 2022;
(6) 3.1% deemed cumulative persisting annual savings
for the year ending December 31, 2023;
(7) 2.8% deemed cumulative persisting annual savings
for the year ending December 31, 2024;
(8) 2.5% deemed cumulative persisting annual savings
for the year ending December 31, 2025;
(9) 2.3% deemed cumulative persisting annual savings
for the year ending December 31, 2026;
(10) 2.1% deemed cumulative persisting annual savings
for the year ending December 31, 2027;
(11) 1.8% deemed cumulative persisting annual savings
for the year ending December 31, 2028;
(12) 1.7% deemed cumulative persisting annual savings
for the year ending December 31, 2029;
(13) 1.5% deemed cumulative persisting annual savings
for the year ending December 31, 2030;
(14) 1.3% deemed cumulative persisting annual savings
for the year ending December 31, 2031;
(15) 1.1% deemed cumulative persisting annual savings
for the year ending December 31, 2032;
(16) 0.9% deemed cumulative persisting annual savings
for the year ending December 31, 2033;
(17) 0.7% deemed cumulative persisting annual savings
for the year ending December 31, 2034;
(18) 0.5% deemed cumulative persisting annual savings
for the year ending December 31, 2035;
(19) 0.4% deemed cumulative persisting annual savings
for the year ending December 31, 2036;
(20) 0.3% deemed cumulative persisting annual savings
for the year ending December 31, 2037;
(21) 0.2% deemed cumulative persisting annual savings
for the year ending December 31, 2038;
(22) 0.1% deemed cumulative persisting annual savings
for the year ending December 31, 2039; and
(23) 0.0% deemed cumulative persisting annual savings
for the year ending December 31, 2040 and all subsequent
years.
(b-15) Beginning in 2018, electric utilities subject to
this Section that serve less than 3,000,000 retail customers
but more than 500,000 retail customers in the State shall
achieve the following cumulative persisting annual savings
goals, as modified by subsection (b-20) and subsection (f) of
this Section and as compared to the deemed baseline as reduced
by the number of MWhs equal to the sum of the annual
consumption of customers that have opted out of subsections
(a) through (j) of this Section under paragraph (1) of
subsection (l) of this Section as averaged across the calendar
years 2014, 2015, and 2016, through the implementation of
energy efficiency measures during the applicable year and in
prior years, but no earlier than January 1, 2012:
(1) 7.4% cumulative persisting annual savings for the
year ending December 31, 2018;
(2) 8.2% cumulative persisting annual savings for the
year ending December 31, 2019;
(3) 9.0% cumulative persisting annual savings for the
year ending December 31, 2020;
(4) 9.8% cumulative persisting annual savings for the
year ending December 31, 2021;
(5) 10.6% cumulative persisting annual savings for the
year ending December 31, 2022;
(6) 11.4% cumulative persisting annual savings for the
year ending December 31, 2023;
(7) 12.2% cumulative persisting annual savings for the
year ending December 31, 2024;
(8) 13% cumulative persisting annual savings for the
year ending December 31, 2025;
(9) 13.6% cumulative persisting annual savings for the
year ending December 31, 2026;
(10) 14.2% cumulative persisting annual savings for
the year ending December 31, 2027;
(11) 14.8% cumulative persisting annual savings for
the year ending December 31, 2028;
(12) 15.4% cumulative persisting annual savings for
the year ending December 31, 2029; and
(13) 16% cumulative persisting annual savings for the
year ending December 31, 2030.
No later than December 31, 2021, the Illinois Commerce
Commission shall establish additional cumulative persisting
annual savings goals for the years 2031 through 2035. No later
than December 31, 2024, the Illinois Commerce Commission shall
establish additional cumulative persisting annual savings
goals for the years 2036 through 2040. The Commission shall
also establish additional cumulative persisting annual savings
goals every 5 years thereafter to ensure that utilities always
have goals that extend at least 11 years into the future. The
cumulative persisting annual savings goals beyond the year
2030 shall increase by 0.6 percentage points per year, absent
a Commission decision to initiate a proceeding to consider
establishing goals that increase by more or less than that
amount. Such a proceeding must be conducted in accordance with
the procedures described in subsection (f) of this Section. If
such a proceeding is initiated, the cumulative persisting
annual savings goals established by the Commission through
that proceeding shall reflect the Commission's best estimate
of the maximum amount of additional savings that are forecast
to be cost-effectively achievable unless such best estimates
would result in goals that represent less than 0.4 percentage
point annual increases in total cumulative persisting annual
savings. The Commission may only establish goals that
represent less than 0.4 percentage point annual increases in
cumulative persisting annual savings if it can demonstrate,
based on clear and convincing evidence and through independent
analysis, that 0.4 percentage point increases are not
cost-effectively achievable. The Commission shall inform its
decision based on an energy efficiency potential study that
conforms to the requirements of this Section.
(b-20) Each electric utility subject to this Section may
include cost-effective voltage optimization measures in its
plans submitted under subsections (f) and (g) of this Section,
and the costs incurred by a utility to implement the measures
under a Commission-approved plan shall be recovered under the
provisions of Article IX or Section 16-108.5 of this Act. For
purposes of this Section, the measure life of voltage
optimization measures shall be 15 years. The measure life
period is independent of the depreciation rate of the voltage
optimization assets deployed. Utilities may claim savings from
voltage optimization on circuits for more than 15 years if
they can demonstrate that they have made additional
investments necessary to enable voltage optimization savings
to continue beyond 15 years. Such demonstrations must be
subject to the review of independent evaluation.
Within 270 days after June 1, 2017 (the effective date of
Public Act 99-906), an electric utility that serves less than
3,000,000 retail customers but more than 500,000 retail
customers in the State shall file a plan with the Commission
that identifies the cost-effective voltage optimization
investment the electric utility plans to undertake through
December 31, 2024. The Commission, after notice and hearing,
shall approve or approve with modification the plan within 120
days after the plan's filing and, in the order approving or
approving with modification the plan, the Commission shall
adjust the applicable cumulative persisting annual savings
goals set forth in subsection (b-15) to reflect any amount of
cost-effective energy savings approved by the Commission that
is greater than or less than the following cumulative
persisting annual savings values attributable to voltage
optimization for the applicable year:
(1) 0.0% of cumulative persisting annual savings for
the year ending December 31, 2018;
(2) 0.17% of cumulative persisting annual savings for
the year ending December 31, 2019;
(3) 0.17% of cumulative persisting annual savings for
the year ending December 31, 2020;
(4) 0.33% of cumulative persisting annual savings for
the year ending December 31, 2021;
(5) 0.5% of cumulative persisting annual savings for
the year ending December 31, 2022;
(6) 0.67% of cumulative persisting annual savings for
the year ending December 31, 2023;
(7) 0.83% of cumulative persisting annual savings for
the year ending December 31, 2024; and
(8) 1.0% of cumulative persisting annual savings for
the year ending December 31, 2025 and all subsequent
years.
(b-25) In the event an electric utility jointly offers an
energy efficiency measure or program with a gas utility under
plans approved under this Section and Section 8-104 of this
Act, the electric utility may continue offering the program,
including the gas energy efficiency measures, in the event the
gas utility discontinues funding the program. In that event,
the energy savings value associated with such other fuels
shall be converted to electric energy savings on an equivalent
Btu basis for the premises. However, the electric utility
shall prioritize programs for low-income residential customers
to the extent practicable. An electric utility may recover the
costs of offering the gas energy efficiency measures under
this subsection (b-25).
For those energy efficiency measures or programs that save
both electricity and other fuels but are not jointly offered
with a gas utility under plans approved under this Section and
Section 8-104 or not offered with an affiliated gas utility
under paragraph (6) of subsection (f) of Section 8-104 of this
Act, the electric utility may count savings of fuels other
than electricity toward the achievement of its annual savings
goal, and the energy savings value associated with such other
fuels shall be converted to electric energy savings on an
equivalent Btu basis at the premises.
In no event shall more than 10% of each year's applicable
annual total savings requirement as defined in paragraph (7.5)
of subsection (g) of this Section be met through savings of
fuels other than electricity.
(b-27) Beginning in 2022, an electric utility may offer
and promote measures that electrify space heating, water
heating, cooling, drying, cooking, industrial processes, and
other building and industrial end uses that would otherwise be
served by combustion of fossil fuel at the premises, provided
that the electrification measures reduce total energy
consumption at the premises. The electric utility may count
the reduction in energy consumption at the premises toward
achievement of its annual savings goals. The reduction in
energy consumption at the premises shall be calculated as the
difference between: (A) the reduction in Btu consumption of
fossil fuels as a result of electrification, converted to
kilowatt-hour equivalents by dividing by 3,412 Btus per
kilowatt hour; and (B) the increase in kilowatt hours of
electricity consumption resulting from the displacement of
fossil fuel consumption as a result of electrification. An
electric utility may recover the costs of offering and
promoting electrification measures under this subsection
(b-27).
In no event shall electrification savings counted toward
each year's applicable annual total savings requirement, as
defined in paragraph (7.5) of subsection (g) of this Section,
be greater than:
(1) 5% per year for each year from 2022 through 2025;
(2) 10% per year for each year from 2026 through 2029;
and
(3) 15% per year for 2030 and all subsequent years.
In addition, a minimum of 25% of all electrification savings
counted toward a utility's applicable annual total savings
requirement must be from electrification of end uses in
low-income housing. The limitations on electrification savings
that may be counted toward a utility's annual savings goals
are separate from and in addition to the subsection (b-25)
limitations governing the counting of the other fuel savings
resulting from efficiency measures and programs.
As part of the annual informational filing to the
Commission that is required under paragraph (9) of subsection
(g) of this Section, each utility shall identify the specific
electrification measures offered under this subsection (b-27);
the quantity of each electrification measure that was
installed by its customers; the average total cost, average
utility cost, average reduction in fossil fuel consumption,
and average increase in electricity consumption associated
with each electrification measure; the portion of
installations of each electrification measure that were in
low-income single-family housing, low-income multifamily
housing, non-low-income single-family housing, non-low-income
multifamily housing, commercial buildings, and industrial
facilities; and the quantity of savings associated with each
measure category in each customer category that are being
counted toward the utility's applicable annual total savings
requirement. Prior to installing an electrification measure,
the utility shall provide a customer with an estimate of the
impact of the new measure on the customer's average monthly
electric bill and total annual energy expenses.
(c) Electric utilities shall be responsible for overseeing
the design, development, and filing of energy efficiency plans
with the Commission and may, as part of that implementation,
outsource various aspects of program development and
implementation. A minimum of 10%, for electric utilities that
serve more than 3,000,000 retail customers in the State, and a
minimum of 7%, for electric utilities that serve less than
3,000,000 retail customers but more than 500,000 retail
customers in the State, of the utility's entire portfolio
funding level for a given year shall be used to procure
cost-effective energy efficiency measures from units of local
government, municipal corporations, school districts, public
housing, public institutions of higher education, and
community college districts, provided that a minimum
percentage of available funds shall be used to procure energy
efficiency from public housing, which percentage shall be
equal to public housing's share of public building energy
consumption.
The utilities shall also implement energy efficiency
measures targeted at low-income households, which, for
purposes of this Section, shall be defined as households at or
below 80% of area median income, and expenditures to implement
the measures shall be no less than $40,000,000 per year for
electric utilities that serve more than 3,000,000 retail
customers in the State and no less than $13,000,000 per year
for electric utilities that serve less than 3,000,000 retail
customers but more than 500,000 retail customers in the State.
The ratio of spending on efficiency programs targeted at
low-income multifamily buildings to spending on efficiency
programs targeted at low-income single-family buildings shall
be designed to achieve levels of savings from each building
type that are approximately proportional to the magnitude of
cost-effective lifetime savings potential in each building
type. Investment in low-income whole-building weatherization
programs shall constitute a minimum of 80% of a utility's
total budget specifically dedicated to serving low-income
customers.
The utilities shall work to bundle low-income energy
efficiency offerings with other programs that serve low-income
households to maximize the benefits going to these households.
The utilities shall market and implement low-income energy
efficiency programs in coordination with low-income assistance
programs, the Illinois Solar for All Program, and
weatherization whenever practicable. The program implementer
shall walk the customer through the enrollment process for any
programs for which the customer is eligible. The utilities
shall also pilot targeting customers with high arrearages,
high energy intensity (ratio of energy usage divided by home
or unit square footage), or energy assistance programs with
energy efficiency offerings, and then track reduction in
arrearages as a result of the targeting. This targeting and
bundling of low-income energy programs shall be offered to
both low-income single-family and multifamily customers
(owners and residents).
The utilities shall invest in health and safety measures
appropriate and necessary for comprehensively weatherizing a
home or multifamily building, and shall implement a health and
safety fund of at least 15% of the total income-qualified
weatherization budget that shall be used for the purpose of
making grants for technical assistance, construction,
reconstruction, improvement, or repair of buildings to
facilitate their participation in the energy efficiency
programs targeted at low-income single-family and multifamily
households. These funds may also be used for the purpose of
making grants for technical assistance, construction,
reconstruction, improvement, or repair of the following
buildings to facilitate their participation in the energy
efficiency programs created by this Section: (1) buildings
that are owned or operated by registered 501(c)(3) public
charities; and (2) day care centers, day care homes, or group
day care homes, as defined under 89 Ill. Adm. Code Part 406,
407, or 408, respectively.
Each electric utility shall assess opportunities to
implement cost-effective energy efficiency measures and
programs through a public housing authority or authorities
located in its service territory. If such opportunities are
identified, the utility shall propose such measures and
programs to address the opportunities. Expenditures to address
such opportunities shall be credited toward the minimum
procurement and expenditure requirements set forth in this
subsection (c).
Implementation of energy efficiency measures and programs
targeted at low-income households should be contracted, when
it is practicable, to independent third parties that have
demonstrated capabilities to serve such households, with a
preference for not-for-profit entities and government agencies
that have existing relationships with or experience serving
low-income communities in the State.
Each electric utility shall develop and implement
reporting procedures that address and assist in determining
the amount of energy savings that can be applied to the
low-income procurement and expenditure requirements set forth
in this subsection (c). Each electric utility shall also track
the types and quantities or volumes of insulation and air
sealing materials, and their associated energy saving
benefits, installed in energy efficiency programs targeted at
low-income single-family and multifamily households.
The electric utilities shall participate in a low-income
energy efficiency accountability committee ("the committee"),
which will directly inform the design, implementation, and
evaluation of the low-income and public-housing energy
efficiency programs. The committee shall be comprised of the
electric utilities subject to the requirements of this
Section, the gas utilities subject to the requirements of
Section 8-104 of this Act, the utilities' low-income energy
efficiency implementation contractors, nonprofit
organizations, community action agencies, advocacy groups,
State and local governmental agencies, public-housing
organizations, and representatives of community-based
organizations, especially those living in or working with
environmental justice communities and BIPOC communities. The
committee shall be composed of 2 geographically differentiated
subcommittees: one for stakeholders in northern Illinois and
one for stakeholders in central and southern Illinois. The
subcommittees shall meet together at least twice per year.
There shall be one statewide leadership committee led by
and composed of community-based organizations that are
representative of BIPOC and environmental justice communities
and that includes equitable representation from BIPOC
communities. The leadership committee shall be composed of an
equal number of representatives from the 2 subcommittees. The
subcommittees shall address specific programs and issues, with
the leadership committee convening targeted workgroups as
needed. The leadership committee may elect to work with an
independent facilitator to solicit and organize feedback,
recommendations and meeting participation from a wide variety
of community-based stakeholders. If a facilitator is used,
they shall be fair and responsive to the needs of all
stakeholders involved in the committee.
All committee meetings must be accessible, with rotating
locations if meetings are held in-person, virtual
participation options, and materials and agendas circulated in
advance.
There shall also be opportunities for direct input by
committee members outside of committee meetings, such as via
individual meetings, surveys, emails and calls, to ensure
robust participation by stakeholders with limited capacity and
ability to attend committee meetings. Committee meetings shall
emphasize opportunities to bundle and coordinate delivery of
low-income energy efficiency with other programs that serve
low-income communities, such as the Illinois Solar for All
Program and bill payment assistance programs. Meetings shall
include educational opportunities for stakeholders to learn
more about these additional offerings, and the committee shall
assist in figuring out the best methods for coordinated
delivery and implementation of offerings when serving
low-income communities. The committee shall directly and
equitably influence and inform utility low-income and
public-housing energy efficiency programs and priorities.
Participating utilities shall implement recommendations from
the committee whenever possible.
Participating utilities shall track and report how input
from the committee has led to new approaches and changes in
their energy efficiency portfolios. This reporting shall occur
at committee meetings and in quarterly energy efficiency
reports to the Stakeholder Advisory Group and Illinois
Commerce Commission, and other relevant reporting mechanisms.
Participating utilities shall also report on relevant equity
data and metrics requested by the committee, such as energy
burden data, geographic, racial, and other relevant
demographic data on where programs are being delivered and
what populations programs are serving.
The Illinois Commerce Commission shall oversee and have
relevant staff participate in the committee. The committee
shall have a budget of 0.25% of each utility's entire
efficiency portfolio funding for a given year. The budget
shall be overseen by the Commission. The budget shall be used
to provide grants for community-based organizations serving on
the leadership committee, stipends for community-based
organizations participating in the committee, grants for
community-based organizations to do energy efficiency outreach
and education, and relevant meeting needs as determined by the
leadership committee. The education and outreach shall
include, but is not limited to, basic energy efficiency
education, information about low-income energy efficiency
programs, and information on the committee's purpose,
structure, and activities.
(d) Notwithstanding any other provision of law to the
contrary, a utility providing approved energy efficiency
measures and, if applicable, demand-response measures in the
State shall be permitted to recover all reasonable and
prudently incurred costs of those measures from all retail
customers, except as provided in subsection (l) of this
Section, as follows, provided that nothing in this subsection
(d) permits the double recovery of such costs from customers:
(1) The utility may recover its costs through an
automatic adjustment clause tariff filed with and approved
by the Commission. The tariff shall be established outside
the context of a general rate case. Each year the
Commission shall initiate a review to reconcile any
amounts collected with the actual costs and to determine
the required adjustment to the annual tariff factor to
match annual expenditures. To enable the financing of the
incremental capital expenditures, including regulatory
assets, for electric utilities that serve less than
3,000,000 retail customers but more than 500,000 retail
customers in the State, the utility's actual year-end
capital structure that includes a common equity ratio,
excluding goodwill, of up to and including 50% of the
total capital structure shall be deemed reasonable and
used to set rates.
(2) A utility may recover its costs through an energy
efficiency formula rate approved by the Commission under a
filing under subsections (f) and (g) of this Section,
which shall specify the cost components that form the
basis of the rate charged to customers with sufficient
specificity to operate in a standardized manner and be
updated annually with transparent information that
reflects the utility's actual costs to be recovered during
the applicable rate year, which is the period beginning
with the first billing day of January and extending
through the last billing day of the following December.
The energy efficiency formula rate shall be implemented
through a tariff filed with the Commission under
subsections (f) and (g) of this Section that is consistent
with the provisions of this paragraph (2) and that shall
be applicable to all delivery services customers. The
Commission shall conduct an investigation of the tariff in
a manner consistent with the provisions of this paragraph
(2), subsections (f) and (g) of this Section, and the
provisions of Article IX of this Act to the extent they do
not conflict with this paragraph (2). The energy
efficiency formula rate approved by the Commission shall
remain in effect at the discretion of the utility and
shall do the following:
(A) Provide for the recovery of the utility's
actual costs incurred under this Section that are
prudently incurred and reasonable in amount consistent
with Commission practice and law. The sole fact that a
cost differs from that incurred in a prior calendar
year or that an investment is different from that made
in a prior calendar year shall not imply the
imprudence or unreasonableness of that cost or
investment.
(B) Reflect the utility's actual year-end capital
structure for the applicable calendar year, excluding
goodwill, subject to a determination of prudence and
reasonableness consistent with Commission practice and
law. To enable the financing of the incremental
capital expenditures, including regulatory assets, for
electric utilities that serve less than 3,000,000
retail customers but more than 500,000 retail
customers in the State, a participating electric
utility's actual year-end capital structure that
includes a common equity ratio, excluding goodwill, of
up to and including 50% of the total capital structure
shall be deemed reasonable and used to set rates.
(C) Include a cost of equity, which shall be
calculated as the sum of the following:
(i) the average for the applicable calendar
year of the monthly average yields of 30-year U.S.
Treasury bonds published by the Board of Governors
of the Federal Reserve System in its weekly H.15
Statistical Release or successor publication; and
(ii) 580 basis points.
At such time as the Board of Governors of the
Federal Reserve System ceases to include the monthly
average yields of 30-year U.S. Treasury bonds in its
weekly H.15 Statistical Release or successor
publication, the monthly average yields of the U.S.
Treasury bonds then having the longest duration
published by the Board of Governors in its weekly H.15
Statistical Release or successor publication shall
instead be used for purposes of this paragraph (2).
(D) Permit and set forth protocols, subject to a
determination of prudence and reasonableness
consistent with Commission practice and law, for the
following:
(i) recovery of incentive compensation expense
that is based on the achievement of operational
metrics, including metrics related to budget
controls, outage duration and frequency, safety,
customer service, efficiency and productivity, and
environmental compliance; however, this protocol
shall not apply if such expense related to costs
incurred under this Section is recovered under
Article IX or Section 16-108.5 of this Act;
incentive compensation expense that is based on
net income or an affiliate's earnings per share
shall not be recoverable under the energy
efficiency formula rate;
(ii) recovery of pension and other
post-employment benefits expense, provided that
such costs are supported by an actuarial study;
however, this protocol shall not apply if such
expense related to costs incurred under this
Section is recovered under Article IX or Section
16-108.5 of this Act;
(iii) recovery of existing regulatory assets
over the periods previously authorized by the
Commission;
(iv) as described in subsection (e),
amortization of costs incurred under this Section;
and
(v) projected, weather normalized billing
determinants for the applicable rate year.
(E) Provide for an annual reconciliation, as
described in paragraph (3) of this subsection (d),
less any deferred taxes related to the reconciliation,
with interest at an annual rate of return equal to the
utility's weighted average cost of capital, including
a revenue conversion factor calculated to recover or
refund all additional income taxes that may be payable
or receivable as a result of that return, of the energy
efficiency revenue requirement reflected in rates for
each calendar year, beginning with the calendar year
in which the utility files its energy efficiency
formula rate tariff under this paragraph (2), with
what the revenue requirement would have been had the
actual cost information for the applicable calendar
year been available at the filing date.
The utility shall file, together with its tariff, the
projected costs to be incurred by the utility during the
rate year under the utility's multi-year plan approved
under subsections (f) and (g) of this Section, including,
but not limited to, the projected capital investment costs
and projected regulatory asset balances with
correspondingly updated depreciation and amortization
reserves and expense, that shall populate the energy
efficiency formula rate and set the initial rates under
the formula.
The Commission shall review the proposed tariff in
conjunction with its review of a proposed multi-year plan,
as specified in paragraph (5) of subsection (g) of this
Section. The review shall be based on the same evidentiary
standards, including, but not limited to, those concerning
the prudence and reasonableness of the costs incurred by
the utility, the Commission applies in a hearing to review
a filing for a general increase in rates under Article IX
of this Act. The initial rates shall take effect beginning
with the January monthly billing period following the
Commission's approval.
The tariff's rate design and cost allocation across
customer classes shall be consistent with the utility's
automatic adjustment clause tariff in effect on June 1,
2017 (the effective date of Public Act 99-906); however,
the Commission may revise the tariff's rate design and
cost allocation in subsequent proceedings under paragraph
(3) of this subsection (d).
If the energy efficiency formula rate is terminated,
the then current rates shall remain in effect until such
time as the energy efficiency costs are incorporated into
new rates that are set under this subsection (d) or
Article IX of this Act, subject to retroactive rate
adjustment, with interest, to reconcile rates charged with
actual costs.
(3) The provisions of this paragraph (3) shall only
apply to an electric utility that has elected to file an
energy efficiency formula rate under paragraph (2) of this
subsection (d). Subsequent to the Commission's issuance of
an order approving the utility's energy efficiency formula
rate structure and protocols, and initial rates under
paragraph (2) of this subsection (d), the utility shall
file, on or before June 1 of each year, with the Chief
Clerk of the Commission its updated cost inputs to the
energy efficiency formula rate for the applicable rate
year and the corresponding new charges, as well as the
information described in paragraph (9) of subsection (g)
of this Section. Each such filing shall conform to the
following requirements and include the following
information:
(A) The inputs to the energy efficiency formula
rate for the applicable rate year shall be based on the
projected costs to be incurred by the utility during
the rate year under the utility's multi-year plan
approved under subsections (f) and (g) of this
Section, including, but not limited to, projected
capital investment costs and projected regulatory
asset balances with correspondingly updated
depreciation and amortization reserves and expense.
The filing shall also include a reconciliation of the
energy efficiency revenue requirement that was in
effect for the prior rate year (as set by the cost
inputs for the prior rate year) with the actual
revenue requirement for the prior rate year
(determined using a year-end rate base) that uses
amounts reflected in the applicable FERC Form 1 that
reports the actual costs for the prior rate year. Any
over-collection or under-collection indicated by such
reconciliation shall be reflected as a credit against,
or recovered as an additional charge to, respectively,
with interest calculated at a rate equal to the
utility's weighted average cost of capital approved by
the Commission for the prior rate year, the charges
for the applicable rate year. Such over-collection or
under-collection shall be adjusted to remove any
deferred taxes related to the reconciliation, for
purposes of calculating interest at an annual rate of
return equal to the utility's weighted average cost of
capital approved by the Commission for the prior rate
year, including a revenue conversion factor calculated
to recover or refund all additional income taxes that
may be payable or receivable as a result of that
return. Each reconciliation shall be certified by the
participating utility in the same manner that FERC
Form 1 is certified. The filing shall also include the
charge or credit, if any, resulting from the
calculation required by subparagraph (E) of paragraph
(2) of this subsection (d).
Notwithstanding any other provision of law to the
contrary, the intent of the reconciliation is to
ultimately reconcile both the revenue requirement
reflected in rates for each calendar year, beginning
with the calendar year in which the utility files its
energy efficiency formula rate tariff under paragraph
(2) of this subsection (d), with what the revenue
requirement determined using a year-end rate base for
the applicable calendar year would have been had the
actual cost information for the applicable calendar
year been available at the filing date.
For purposes of this Section, "FERC Form 1" means
the Annual Report of Major Electric Utilities,
Licensees and Others that electric utilities are
required to file with the Federal Energy Regulatory
Commission under the Federal Power Act, Sections 3,
4(a), 304 and 209, modified as necessary to be
consistent with 83 Ill. Adm. Code Part 415 as of May 1,
2011. Nothing in this Section is intended to allow
costs that are not otherwise recoverable to be
recoverable by virtue of inclusion in FERC Form 1.
(B) The new charges shall take effect beginning on
the first billing day of the following January billing
period and remain in effect through the last billing
day of the next December billing period regardless of
whether the Commission enters upon a hearing under
this paragraph (3).
(C) The filing shall include relevant and
necessary data and documentation for the applicable
rate year. Normalization adjustments shall not be
required.
Within 45 days after the utility files its annual
update of cost inputs to the energy efficiency formula
rate, the Commission shall with reasonable notice,
initiate a proceeding concerning whether the projected
costs to be incurred by the utility and recovered during
the applicable rate year, and that are reflected in the
inputs to the energy efficiency formula rate, are
consistent with the utility's approved multi-year plan
under subsections (f) and (g) of this Section and whether
the costs incurred by the utility during the prior rate
year were prudent and reasonable. The Commission shall
also have the authority to investigate the information and
data described in paragraph (9) of subsection (g) of this
Section, including the proposed adjustment to the
utility's return on equity component of its weighted
average cost of capital. During the course of the
proceeding, each objection shall be stated with
particularity and evidence provided in support thereof,
after which the utility shall have the opportunity to
rebut the evidence. Discovery shall be allowed consistent
with the Commission's Rules of Practice, which Rules of
Practice shall be enforced by the Commission or the
assigned administrative law judge. The Commission shall
apply the same evidentiary standards, including, but not
limited to, those concerning the prudence and
reasonableness of the costs incurred by the utility,
during the proceeding as it would apply in a proceeding to
review a filing for a general increase in rates under
Article IX of this Act. The Commission shall not, however,
have the authority in a proceeding under this paragraph
(3) to consider or order any changes to the structure or
protocols of the energy efficiency formula rate approved
under paragraph (2) of this subsection (d). In a
proceeding under this paragraph (3), the Commission shall
enter its order no later than the earlier of 195 days after
the utility's filing of its annual update of cost inputs
to the energy efficiency formula rate or December 15. The
utility's proposed return on equity calculation, as
described in paragraphs (7) through (9) of subsection (g)
of this Section, shall be deemed the final, approved
calculation on December 15 of the year in which it is filed
unless the Commission enters an order on or before
December 15, after notice and hearing, that modifies such
calculation consistent with this Section. The Commission's
determinations of the prudence and reasonableness of the
costs incurred, and determination of such return on equity
calculation, for the applicable calendar year shall be
final upon entry of the Commission's order and shall not
be subject to reopening, reexamination, or collateral
attack in any other Commission proceeding, case, docket,
order, rule, or regulation; however, nothing in this
paragraph (3) shall prohibit a party from petitioning the
Commission to rehear or appeal to the courts the order
under the provisions of this Act.
(e) Beginning on June 1, 2017 (the effective date of
Public Act 99-906), a utility subject to the requirements of
this Section may elect to defer, as a regulatory asset, up to
the full amount of its expenditures incurred under this
Section for each annual period, including, but not limited to,
any expenditures incurred above the funding level set by
subsection (f) of this Section for a given year. The total
expenditures deferred as a regulatory asset in a given year
shall be amortized and recovered over a period that is equal to
the weighted average of the energy efficiency measure lives
implemented for that year that are reflected in the regulatory
asset. The unamortized balance shall be recognized as of
December 31 for a given year. The utility shall also earn a
return on the total of the unamortized balances of all of the
energy efficiency regulatory assets, less any deferred taxes
related to those unamortized balances, at an annual rate equal
to the utility's weighted average cost of capital that
includes, based on a year-end capital structure, the utility's
actual cost of debt for the applicable calendar year and a cost
of equity, which shall be calculated as the sum of the (i) the
average for the applicable calendar year of the monthly
average yields of 30-year U.S. Treasury bonds published by the
Board of Governors of the Federal Reserve System in its weekly
H.15 Statistical Release or successor publication; and (ii)
580 basis points, including a revenue conversion factor
calculated to recover or refund all additional income taxes
that may be payable or receivable as a result of that return.
Capital investment costs shall be depreciated and recovered
over their useful lives consistent with generally accepted
accounting principles. The weighted average cost of capital
shall be applied to the capital investment cost balance, less
any accumulated depreciation and accumulated deferred income
taxes, as of December 31 for a given year.
When an electric utility creates a regulatory asset under
the provisions of this Section, the costs are recovered over a
period during which customers also receive a benefit which is
in the public interest. Accordingly, it is the intent of the
General Assembly that an electric utility that elects to
create a regulatory asset under the provisions of this Section
shall recover all of the associated costs as set forth in this
Section. After the Commission has approved the prudence and
reasonableness of the costs that comprise the regulatory
asset, the electric utility shall be permitted to recover all
such costs, and the value and recoverability through rates of
the associated regulatory asset shall not be limited, altered,
impaired, or reduced.
(f) Beginning in 2017, each electric utility shall file an
energy efficiency plan with the Commission to meet the energy
efficiency standards for the next applicable multi-year period
beginning January 1 of the year following the filing,
according to the schedule set forth in paragraphs (1) through
(3) of this subsection (f). If a utility does not file such a
plan on or before the applicable filing deadline for the plan,
it shall face a penalty of $100,000 per day until the plan is
filed.
(1) No later than 30 days after June 1, 2017 (the
effective date of Public Act 99-906), each electric
utility shall file a 4-year energy efficiency plan
commencing on January 1, 2018 that is designed to achieve
the cumulative persisting annual savings goals specified
in paragraphs (1) through (4) of subsection (b-5) of this
Section or in paragraphs (1) through (4) of subsection
(b-15) of this Section, as applicable, through
implementation of energy efficiency measures; however, the
goals may be reduced if the utility's expenditures are
limited pursuant to subsection (m) of this Section or, for
a utility that serves less than 3,000,000 retail
customers, if each of the following conditions are met:
(A) the plan's analysis and forecasts of the utility's
ability to acquire energy savings demonstrate that
achievement of such goals is not cost effective; and (B)
the amount of energy savings achieved by the utility as
determined by the independent evaluator for the most
recent year for which savings have been evaluated
preceding the plan filing was less than the average annual
amount of savings required to achieve the goals for the
applicable 4-year plan period. Except as provided in
subsection (m) of this Section, annual increases in
cumulative persisting annual savings goals during the
applicable 4-year plan period shall not be reduced to
amounts that are less than the maximum amount of
cumulative persisting annual savings that is forecast to
be cost-effectively achievable during the 4-year plan
period. The Commission shall review any proposed goal
reduction as part of its review and approval of the
utility's proposed plan.
(2) No later than March 1, 2021, each electric utility
shall file a 4-year energy efficiency plan commencing on
January 1, 2022 that is designed to achieve the cumulative
persisting annual savings goals specified in paragraphs
(5) through (8) of subsection (b-5) of this Section or in
paragraphs (5) through (8) of subsection (b-15) of this
Section, as applicable, through implementation of energy
efficiency measures; however, the goals may be reduced if
either (1) clear and convincing evidence demonstrates,
through independent analysis, that the expenditure limits
in subsection (m) of this Section preclude full
achievement of the goals or (2) each of the following
conditions are met: (A) the plan's analysis and forecasts
of the utility's ability to acquire energy savings
demonstrate by clear and convincing evidence and through
independent analysis that achievement of such goals is not
cost effective; and (B) the amount of energy savings
achieved by the utility as determined by the independent
evaluator for the most recent year for which savings have
been evaluated preceding the plan filing was less than the
average annual amount of savings required to achieve the
goals for the applicable 4-year plan period. If there is
not clear and convincing evidence that achieving the
savings goals specified in paragraph (b-5) or (b-15) of
this Section is possible both cost-effectively and within
the expenditure limits in subsection (m), such savings
goals shall not be reduced. Except as provided in
subsection (m) of this Section, annual increases in
cumulative persisting annual savings goals during the
applicable 4-year plan period shall not be reduced to
amounts that are less than the maximum amount of
cumulative persisting annual savings that is forecast to
be cost-effectively achievable during the 4-year plan
period. The Commission shall review any proposed goal
reduction as part of its review and approval of the
utility's proposed plan.
(3) No later than March 1, 2025, each electric utility
shall file a 4-year energy efficiency plan commencing on
January 1, 2026 that is designed to achieve the cumulative
persisting annual savings goals specified in paragraphs
(9) through (12) of subsection (b-5) of this Section or in
paragraphs (9) through (12) of subsection (b-15) of this
Section, as applicable, through implementation of energy
efficiency measures; however, the goals may be reduced if
either (1) clear and convincing evidence demonstrates,
through independent analysis, that the expenditure limits
in subsection (m) of this Section preclude full
achievement of the goals or (2) each of the following
conditions are met: (A) the plan's analysis and forecasts
of the utility's ability to acquire energy savings
demonstrate by clear and convincing evidence and through
independent analysis that achievement of such goals is not
cost effective; and (B) the amount of energy savings
achieved by the utility as determined by the independent
evaluator for the most recent year for which savings have
been evaluated preceding the plan filing was less than the
average annual amount of savings required to achieve the
goals for the applicable 4-year plan period. If there is
not clear and convincing evidence that achieving the
savings goals specified in paragraphs (b-5) or (b-15) of
this Section is possible both cost-effectively and within
the expenditure limits in subsection (m), such savings
goals shall not be reduced. Except as provided in
subsection (m) of this Section, annual increases in
cumulative persisting annual savings goals during the
applicable 4-year plan period shall not be reduced to
amounts that are less than the maximum amount of
cumulative persisting annual savings that is forecast to
be cost-effectively achievable during the 4-year plan
period. The Commission shall review any proposed goal
reduction as part of its review and approval of the
utility's proposed plan.
(4) No later than March 1, 2029, and every 4 years
thereafter, each electric utility shall file a 4-year
energy efficiency plan commencing on January 1, 2030, and
every 4 years thereafter, respectively, that is designed
to achieve the cumulative persisting annual savings goals
established by the Illinois Commerce Commission pursuant
to direction of subsections (b-5) and (b-15) of this
Section, as applicable, through implementation of energy
efficiency measures; however, the goals may be reduced if
either (1) clear and convincing evidence and independent
analysis demonstrates that the expenditure limits in
subsection (m) of this Section preclude full achievement
of the goals or (2) each of the following conditions are
met: (A) the plan's analysis and forecasts of the
utility's ability to acquire energy savings demonstrate by
clear and convincing evidence and through independent
analysis that achievement of such goals is not
cost-effective; and (B) the amount of energy savings
achieved by the utility as determined by the independent
evaluator for the most recent year for which savings have
been evaluated preceding the plan filing was less than the
average annual amount of savings required to achieve the
goals for the applicable 4-year plan period. If there is
not clear and convincing evidence that achieving the
savings goals specified in paragraphs (b-5) or (b-15) of
this Section is possible both cost-effectively and within
the expenditure limits in subsection (m), such savings
goals shall not be reduced. Except as provided in
subsection (m) of this Section, annual increases in
cumulative persisting annual savings goals during the
applicable 4-year plan period shall not be reduced to
amounts that are less than the maximum amount of
cumulative persisting annual savings that is forecast to
be cost-effectively achievable during the 4-year plan
period. The Commission shall review any proposed goal
reduction as part of its review and approval of the
utility's proposed plan.
Each utility's plan shall set forth the utility's
proposals to meet the energy efficiency standards identified
in subsection (b-5) or (b-15), as applicable and as such
standards may have been modified under this subsection (f),
taking into account the unique circumstances of the utility's
service territory. For those plans commencing on January 1,
2018, the Commission shall seek public comment on the
utility's plan and shall issue an order approving or
disapproving each plan no later than 105 days after June 1,
2017 (the effective date of Public Act 99-906). For those
plans commencing after December 31, 2021, the Commission shall
seek public comment on the utility's plan and shall issue an
order approving or disapproving each plan within 6 months
after its submission. If the Commission disapproves a plan,
the Commission shall, within 30 days, describe in detail the
reasons for the disapproval and describe a path by which the
utility may file a revised draft of the plan to address the
Commission's concerns satisfactorily. If the utility does not
refile with the Commission within 60 days, the utility shall
be subject to penalties at a rate of $100,000 per day until the
plan is filed. This process shall continue, and penalties
shall accrue, until the utility has successfully filed a
portfolio of energy efficiency and demand-response measures.
Penalties shall be deposited into the Energy Efficiency Trust
Fund.
(g) In submitting proposed plans and funding levels under
subsection (f) of this Section to meet the savings goals
identified in subsection (b-5) or (b-15) of this Section, as
applicable, the utility shall:
(1) Demonstrate that its proposed energy efficiency
measures will achieve the applicable requirements that are
identified in subsection (b-5) or (b-15) of this Section,
as modified by subsection (f) of this Section.
(2) (Blank).
(2.5) Demonstrate consideration of program options for
(A) advancing new building codes, appliance standards, and
municipal regulations governing existing and new building
efficiency improvements and (B) supporting efforts to
improve compliance with new building codes, appliance
standards and municipal regulations, as potentially
cost-effective means of acquiring energy savings to count
toward savings goals.
(3) Demonstrate that its overall portfolio of
measures, not including low-income programs described in
subsection (c) of this Section, is cost-effective using
the total resource cost test or complies with paragraphs
(1) through (3) of subsection (f) of this Section and
represents a diverse cross-section of opportunities for
customers of all rate classes, other than those customers
described in subsection (l) of this Section, to
participate in the programs. Individual measures need not
be cost effective.
(3.5) Demonstrate that the utility's plan integrates
the delivery of energy efficiency programs with natural
gas efficiency programs, programs promoting distributed
solar, programs promoting demand response and other
efforts to address bill payment issues, including, but not
limited to, LIHEAP and the Percentage of Income Payment
Plan, to the extent such integration is practical and has
the potential to enhance customer engagement, minimize
market confusion, or reduce administrative costs.
(4) Present a third-party energy efficiency
implementation program subject to the following
requirements:
(A) beginning with the year commencing January 1,
2019, electric utilities that serve more than
3,000,000 retail customers in the State shall fund
third-party energy efficiency programs in an amount
that is no less than $25,000,000 per year, and
electric utilities that serve less than 3,000,000
retail customers but more than 500,000 retail
customers in the State shall fund third-party energy
efficiency programs in an amount that is no less than
$8,350,000 per year;
(B) during 2018, the utility shall conduct a
solicitation process for purposes of requesting
proposals from third-party vendors for those
third-party energy efficiency programs to be offered
during one or more of the years commencing January 1,
2019, January 1, 2020, and January 1, 2021; for those
multi-year plans commencing on January 1, 2022 and
January 1, 2026, the utility shall conduct a
solicitation process during 2021 and 2025,
respectively, for purposes of requesting proposals
from third-party vendors for those third-party energy
efficiency programs to be offered during one or more
years of the respective multi-year plan period; for
each solicitation process, the utility shall identify
the sector, technology, or geographical area for which
it is seeking requests for proposals; the solicitation
process must be either for programs that fill gaps in
the utility's program portfolio and for programs that
target low-income customers, business sectors,
building types, geographies, or other specific parts
of its customer base with initiatives that would be
more effective at reaching these customer segments
than the utilities' programs filed in its energy
efficiency plans;
(C) the utility shall propose the bidder
qualifications, performance measurement process, and
contract structure, which must include a performance
payment mechanism and general terms and conditions;
the proposed qualifications, process, and structure
shall be subject to Commission approval; and
(D) the utility shall retain an independent third
party to score the proposals received through the
solicitation process described in this paragraph (4),
rank them according to their cost per lifetime
kilowatt-hours saved, and assemble the portfolio of
third-party programs.
The electric utility shall recover all costs
associated with Commission-approved, third-party
administered programs regardless of the success of those
programs.
(4.5) Implement cost-effective demand-response
measures to reduce peak demand by 0.1% over the prior year
for eligible retail customers, as defined in Section
16-111.5 of this Act, and for customers that elect hourly
service from the utility pursuant to Section 16-107 of
this Act, provided those customers have not been declared
competitive. This requirement continues until December 31,
2026.
(5) Include a proposed or revised cost-recovery tariff
mechanism, as provided for under subsection (d) of this
Section, to fund the proposed energy efficiency and
demand-response measures and to ensure the recovery of the
prudently and reasonably incurred costs of
Commission-approved programs.
(6) Provide for an annual independent evaluation of
the performance of the cost-effectiveness of the utility's
portfolio of measures, as well as a full review of the
multi-year plan results of the broader net program impacts
and, to the extent practical, for adjustment of the
measures on a going-forward basis as a result of the
evaluations. The resources dedicated to evaluation shall
not exceed 3% of portfolio resources in any given year.
(7) For electric utilities that serve more than
3,000,000 retail customers in the State:
(A) Through December 31, 2025, provide for an
adjustment to the return on equity component of the
utility's weighted average cost of capital calculated
under subsection (d) of this Section:
(i) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is less than the applicable
annual incremental goal, then the return on equity
component shall be reduced by a maximum of 200
basis points in the event that the utility
achieved no more than 75% of such goal. If the
utility achieved more than 75% of the applicable
annual incremental goal but less than 100% of such
goal, then the return on equity component shall be
reduced by 8 basis points for each percent by
which the utility failed to achieve the goal.
(ii) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is more than the applicable
annual incremental goal, then the return on equity
component shall be increased by a maximum of 200
basis points in the event that the utility
achieved at least 125% of such goal. If the
utility achieved more than 100% of the applicable
annual incremental goal but less than 125% of such
goal, then the return on equity component shall be
increased by 8 basis points for each percent by
which the utility achieved above the goal. If the
applicable annual incremental goal was reduced
under paragraph (1) or (2) of subsection (f) of
this Section, then the following adjustments shall
be made to the calculations described in this item
(ii):
(aa) the calculation for determining
achievement that is at least 125% of the
applicable annual incremental goal shall use
the unreduced applicable annual incremental
goal to set the value; and
(bb) the calculation for determining
achievement that is less than 125% but more
than 100% of the applicable annual incremental
goal shall use the reduced applicable annual
incremental goal to set the value for 100%
achievement of the goal and shall use the
unreduced goal to set the value for 125%
achievement. The 8 basis point value shall
also be modified, as necessary, so that the
200 basis points are evenly apportioned among
each percentage point value between 100% and
125% achievement.
(B) For the period January 1, 2026 through
December 31, 2029 and in all subsequent 4-year
periods, provide for an adjustment to the return on
equity component of the utility's weighted average
cost of capital calculated under subsection (d) of
this Section:
(i) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is less than the applicable
annual incremental goal, then the return on equity
component shall be reduced by a maximum of 200
basis points in the event that the utility
achieved no more than 66% of such goal. If the
utility achieved more than 66% of the applicable
annual incremental goal but less than 100% of such
goal, then the return on equity component shall be
reduced by 6 basis points for each percent by
which the utility failed to achieve the goal.
(ii) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is more than the applicable
annual incremental goal, then the return on equity
component shall be increased by a maximum of 200
basis points in the event that the utility
achieved at least 134% of such goal. If the
utility achieved more than 100% of the applicable
annual incremental goal but less than 134% of such
goal, then the return on equity component shall be
increased by 6 basis points for each percent by
which the utility achieved above the goal. If the
applicable annual incremental goal was reduced
under paragraph (3) of subsection (f) of this
Section, then the following adjustments shall be
made to the calculations described in this item
(ii):
(aa) the calculation for determining
achievement that is at least 134% of the
applicable annual incremental goal shall use
the unreduced applicable annual incremental
goal to set the value; and
(bb) the calculation for determining
achievement that is less than 134% but more
than 100% of the applicable annual incremental
goal shall use the reduced applicable annual
incremental goal to set the value for 100%
achievement of the goal and shall use the
unreduced goal to set the value for 134%
achievement. The 6 basis point value shall
also be modified, as necessary, so that the
200 basis points are evenly apportioned among
each percentage point value between 100% and
134% achievement.
(C) Notwithstanding the provisions of
subparagraphs (A) and (B) of this paragraph (7), if
the applicable annual incremental goal for an electric
utility is ever less than 0.6% of deemed average
weather normalized sales of electric power and energy
during calendar years 2014, 2015, and 2016, an
adjustment to the return on equity component of the
utility's weighted average cost of capital calculated
under subsection (d) of this Section shall be made as
follows:
(i) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is less than would have been
achieved had the applicable annual incremental
goal been achieved, then the return on equity
component shall be reduced by a maximum of 200
basis points if the utility achieved no more than
75% of its applicable annual total savings
requirement as defined in paragraph (7.5) of this
subsection. If the utility achieved more than 75%
of the applicable annual total savings requirement
but less than 100% of such goal, then the return on
equity component shall be reduced by 8 basis
points for each percent by which the utility
failed to achieve the goal.
(ii) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is more than would have been
achieved had the applicable annual incremental
goal been achieved, then the return on equity
component shall be increased by a maximum of 200
basis points if the utility achieved at least 125%
of its applicable annual total savings
requirement. If the utility achieved more than
100% of the applicable annual total savings
requirement but less than 125% of such goal, then
the return on equity component shall be increased
by 8 basis points for each percent by which the
utility achieved above the applicable annual total
savings requirement. If the applicable annual
incremental goal was reduced under paragraph (1)
or (2) of subsection (f) of this Section, then the
following adjustments shall be made to the
calculations described in this item (ii):
(aa) the calculation for determining
achievement that is at least 125% of the
applicable annual total savings requirement
shall use the unreduced applicable annual
incremental goal to set the value; and
(bb) the calculation for determining
achievement that is less than 125% but more
than 100% of the applicable annual total
savings requirement shall use the reduced
applicable annual incremental goal to set the
value for 100% achievement of the goal and
shall use the unreduced goal to set the value
for 125% achievement. The 8 basis point value
shall also be modified, as necessary, so that
the 200 basis points are evenly apportioned
among each percentage point value between 100%
and 125% achievement.
(7.5) For purposes of this Section, the term
"applicable annual incremental goal" means the difference
between the cumulative persisting annual savings goal for
the calendar year that is the subject of the independent
evaluator's determination and the cumulative persisting
annual savings goal for the immediately preceding calendar
year, as such goals are defined in subsections (b-5) and
(b-15) of this Section and as these goals may have been
modified as provided for under subsection (b-20) and
paragraphs (1) through (3) of subsection (f) of this
Section. Under subsections (b), (b-5), (b-10), and (b-15)
of this Section, a utility must first replace energy
savings from measures that have expired before any
progress towards achievement of its applicable annual
incremental goal may be counted. Savings may expire
because measures installed in previous years have reached
the end of their lives, because measures installed in
previous years are producing lower savings in the current
year than in the previous year, or for other reasons
identified by independent evaluators. Notwithstanding
anything else set forth in this Section, the difference
between the actual annual incremental savings achieved in
any given year, including the replacement of energy
savings that have expired, and the applicable annual
incremental goal shall not affect adjustments to the
return on equity for subsequent calendar years under this
subsection (g).
In this Section, "applicable annual total savings
requirement" means the total amount of new annual savings
that the utility must achieve in any given year to achieve
the applicable annual incremental goal. This is equal to
the applicable annual incremental goal plus the total new
annual savings that are required to replace savings that
expired in or at the end of the previous year.
(8) For electric utilities that serve less than
3,000,000 retail customers but more than 500,000 retail
customers in the State:
(A) Through December 31, 2025, the applicable
annual incremental goal shall be compared to the
annual incremental savings as determined by the
independent evaluator.
(i) The return on equity component shall be
reduced by 8 basis points for each percent by
which the utility did not achieve 84.4% of the
applicable annual incremental goal.
(ii) The return on equity component shall be
increased by 8 basis points for each percent by
which the utility exceeded 100% of the applicable
annual incremental goal.
(iii) The return on equity component shall not
be increased or decreased if the annual
incremental savings as determined by the
independent evaluator is greater than 84.4% of the
applicable annual incremental goal and less than
100% of the applicable annual incremental goal.
(iv) The return on equity component shall not
be increased or decreased by an amount greater
than 200 basis points pursuant to this
subparagraph (A).
(B) For the period of January 1, 2026 through
December 31, 2029 and in all subsequent 4-year
periods, the applicable annual incremental goal shall
be compared to the annual incremental savings as
determined by the independent evaluator.
(i) The return on equity component shall be
reduced by 6 basis points for each percent by
which the utility did not achieve 100% of the
applicable annual incremental goal.
(ii) The return on equity component shall be
increased by 6 basis points for each percent by
which the utility exceeded 100% of the applicable
annual incremental goal.
(iii) The return on equity component shall not
be increased or decreased by an amount greater
than 200 basis points pursuant to this
subparagraph (B).
(C) Notwithstanding provisions in subparagraphs
(A) and (B) of paragraph (7) of this subsection, if the
applicable annual incremental goal for an electric
utility is ever less than 0.6% of deemed average
weather normalized sales of electric power and energy
during calendar years 2014, 2015 and 2016, an
adjustment to the return on equity component of the
utility's weighted average cost of capital calculated
under subsection (d) of this Section shall be made as
follows:
(i) The return on equity component shall be
reduced by 8 basis points for each percent by
which the utility did not achieve 100% of the
applicable annual total savings requirement.
(ii) The return on equity component shall be
increased by 8 basis points for each percent by
which the utility exceeded 100% of the applicable
annual total savings requirement.
(iii) The return on equity component shall not
be increased or decreased by an amount greater
than 200 basis points pursuant to this
subparagraph (C).
(D) If the applicable annual incremental goal was
reduced under paragraph (1), (2), (3), or (4) of
subsection (f) of this Section, then the following
adjustments shall be made to the calculations
described in subparagraphs (A), (B), and (C) of this
paragraph (8):
(i) The calculation for determining
achievement that is at least 125% or 134%, as
applicable, of the applicable annual incremental
goal or the applicable annual total savings
requirement, as applicable, shall use the
unreduced applicable annual incremental goal to
set the value.
(ii) For the period through December 31, 2025,
the calculation for determining achievement that
is less than 125% but more than 100% of the
applicable annual incremental goal or the
applicable annual total savings requirement, as
applicable, shall use the reduced applicable
annual incremental goal to set the value for 100%
achievement of the goal and shall use the
unreduced goal to set the value for 125%
achievement. The 8 basis point value shall also be
modified, as necessary, so that the 200 basis
points are evenly apportioned among each
percentage point value between 100% and 125%
achievement.
(iii) For the period of January 1, 2026
through December 31, 2029 and all subsequent
4-year periods, the calculation for determining
achievement that is less than 125% or 134%, as
applicable, but more than 100% of the applicable
annual incremental goal or the applicable annual
total savings requirement, as applicable, shall
use the reduced applicable annual incremental goal
to set the value for 100% achievement of the goal
and shall use the unreduced goal to set the value
for 125% achievement. The 6 basis-point value or 8
basis-point value, as applicable, shall also be
modified, as necessary, so that the 200 basis
points are evenly apportioned among each
percentage point value between 100% and 125% or
between 100% and 134% achievement, as applicable.
(9) The utility shall submit the energy savings data
to the independent evaluator no later than 30 days after
the close of the plan year. The independent evaluator
shall determine the cumulative persisting annual savings
for a given plan year, as well as an estimate of job
impacts and other macroeconomic impacts of the efficiency
programs for that year, no later than 120 days after the
close of the plan year. The utility shall submit an
informational filing to the Commission no later than 160
days after the close of the plan year that attaches the
independent evaluator's final report identifying the
cumulative persisting annual savings for the year and
calculates, under paragraph (7) or (8) of this subsection
(g), as applicable, any resulting change to the utility's
return on equity component of the weighted average cost of
capital applicable to the next plan year beginning with
the January monthly billing period and extending through
the December monthly billing period. However, if the
utility recovers the costs incurred under this Section
under paragraphs (2) and (3) of subsection (d) of this
Section, then the utility shall not be required to submit
such informational filing, and shall instead submit the
information that would otherwise be included in the
informational filing as part of its filing under paragraph
(3) of such subsection (d) that is due on or before June 1
of each year.
For those utilities that must submit the informational
filing, the Commission may, on its own motion or by
petition, initiate an investigation of such filing,
provided, however, that the utility's proposed return on
equity calculation shall be deemed the final, approved
calculation on December 15 of the year in which it is filed
unless the Commission enters an order on or before
December 15, after notice and hearing, that modifies such
calculation consistent with this Section.
The adjustments to the return on equity component
described in paragraphs (7) and (8) of this subsection (g)
shall be applied as described in such paragraphs through a
separate tariff mechanism, which shall be filed by the
utility under subsections (f) and (g) of this Section.
(9.5) The utility must demonstrate how it will ensure
that program implementation contractors and energy
efficiency installation vendors will promote workforce
equity and quality jobs.
(9.6) Utilities shall collect data necessary to ensure
compliance with paragraph (9.5) no less than quarterly and
shall communicate progress toward compliance with
paragraph (9.5) to program implementation contractors and
energy efficiency installation vendors no less than
quarterly. Utilities shall work with relevant vendors,
providing education, training, and other resources needed
to ensure compliance and, where necessary, adjusting or
terminating work with vendors that cannot assist with
compliance.
(10) Utilities required to implement efficiency
programs under subsections (b-5) and (b-10) shall report
annually to the Illinois Commerce Commission and the
General Assembly on how hiring, contracting, job training,
and other practices related to its energy efficiency
programs enhance the diversity of vendors working on such
programs. These reports must include data on vendor and
employee diversity, including data on the implementation
of paragraphs (9.5) and (9.6). If the utility is not
meeting the requirements of paragraphs (9.5) and (9.6),
the utility shall submit a plan to adjust their activities
so that they meet the requirements of paragraphs (9.5) and
(9.6) within the following year.
(h) No more than 4% of energy efficiency and
demand-response program revenue may be allocated for research,
development, or pilot deployment of new equipment or measures.
Electric utilities shall work with interested stakeholders to
formulate a plan for how these funds should be spent,
incorporate statewide approaches for these allocations, and
file a 4-year plan that demonstrates that collaboration. If a
utility files a request for modified annual energy savings
goals with the Commission, then a utility shall forgo spending
portfolio dollars on research and development proposals.
(i) When practicable, electric utilities shall incorporate
advanced metering infrastructure data into the planning,
implementation, and evaluation of energy efficiency measures
and programs, subject to the data privacy and confidentiality
protections of applicable law.
(j) The independent evaluator shall follow the guidelines
and use the savings set forth in Commission-approved energy
efficiency policy manuals and technical reference manuals, as
each may be updated from time to time. Until such time as
measure life values for energy efficiency measures implemented
for low-income households under subsection (c) of this Section
are incorporated into such Commission-approved manuals, the
low-income measures shall have the same measure life values
that are established for same measures implemented in
households that are not low-income households.
(k) Notwithstanding any provision of law to the contrary,
an electric utility subject to the requirements of this
Section may file a tariff cancelling an automatic adjustment
clause tariff in effect under this Section or Section 8-103,
which shall take effect no later than one business day after
the date such tariff is filed. Thereafter, the utility shall
be authorized to defer and recover its expenditures incurred
under this Section through a new tariff authorized under
subsection (d) of this Section or in the utility's next rate
case under Article IX or Section 16-108.5 of this Act, with
interest at an annual rate equal to the utility's weighted
average cost of capital as approved by the Commission in such
case. If the utility elects to file a new tariff under
subsection (d) of this Section, the utility may file the
tariff within 10 days after June 1, 2017 (the effective date of
Public Act 99-906), and the cost inputs to such tariff shall be
based on the projected costs to be incurred by the utility
during the calendar year in which the new tariff is filed and
that were not recovered under the tariff that was cancelled as
provided for in this subsection. Such costs shall include
those incurred or to be incurred by the utility under its
multi-year plan approved under subsections (f) and (g) of this
Section, including, but not limited to, projected capital
investment costs and projected regulatory asset balances with
correspondingly updated depreciation and amortization reserves
and expense. The Commission shall, after notice and hearing,
approve, or approve with modification, such tariff and cost
inputs no later than 75 days after the utility filed the
tariff, provided that such approval, or approval with
modification, shall be consistent with the provisions of this
Section to the extent they do not conflict with this
subsection (k). The tariff approved by the Commission shall
take effect no later than 5 days after the Commission enters
its order approving the tariff.
No later than 60 days after the effective date of the
tariff cancelling the utility's automatic adjustment clause
tariff, the utility shall file a reconciliation that
reconciles the moneys collected under its automatic adjustment
clause tariff with the costs incurred during the period
beginning June 1, 2016 and ending on the date that the electric
utility's automatic adjustment clause tariff was cancelled. In
the event the reconciliation reflects an under-collection, the
utility shall recover the costs as specified in this
subsection (k). If the reconciliation reflects an
over-collection, the utility shall apply the amount of such
over-collection as a one-time credit to retail customers'
bills.
(l) For the calendar years covered by a multi-year plan
commencing after December 31, 2017, subsections (a) through
(j) of this Section do not apply to eligible large private
energy customers that have chosen to opt out of multi-year
plans consistent with this subsection (1).
(1) For purposes of this subsection (l), "eligible
large private energy customer" means any retail customers,
except for federal, State, municipal, and other public
customers, of an electric utility that serves more than
3,000,000 retail customers, except for federal, State,
municipal and other public customers, in the State and
whose total highest 30 minute demand was more than 10,000
kilowatts, or any retail customers of an electric utility
that serves less than 3,000,000 retail customers but more
than 500,000 retail customers in the State and whose total
highest 15 minute demand was more than 10,000 kilowatts.
For purposes of this subsection (l), "retail customer" has
the meaning set forth in Section 16-102 of this Act.
However, for a business entity with multiple sites located
in the State, where at least one of those sites qualifies
as an eligible large private energy customer, then any of
that business entity's sites, properly identified on a
form for notice, shall be considered eligible large
private energy customers for the purposes of this
subsection (l). A determination of whether this subsection
is applicable to a customer shall be made for each
multi-year plan beginning after December 31, 2017. The
criteria for determining whether this subsection (l) is
applicable to a retail customer shall be based on the 12
consecutive billing periods prior to the start of the
first year of each such multi-year plan.
(2) Within 45 days after September 15, 2021 (the
effective date of Public Act 102-662), the Commission
shall prescribe the form for notice required for opting
out of energy efficiency programs. The notice must be
submitted to the retail electric utility 12 months before
the next energy efficiency planning cycle. However, within
120 days after the Commission's initial issuance of the
form for notice, eligible large private energy customers
may submit a form for notice to an electric utility. The
form for notice for opting out of energy efficiency
programs shall include all of the following:
(A) a statement indicating that the customer has
elected to opt out;
(B) the account numbers for the customer accounts
to which the opt out shall apply;
(C) the mailing address associated with the
customer accounts identified under subparagraph (B);
(D) an American Society of Heating, Refrigerating,
and Air-Conditioning Engineers (ASHRAE) level 2 or
higher audit report conducted by an independent
third-party expert identifying cost-effective energy
efficiency project opportunities that could be
invested in over the next 10 years. A retail customer
with specialized processes may utilize a self-audit
process in lieu of the ASHRAE audit;
(E) a description of the customer's plans to
reallocate the funds toward internal energy efficiency
efforts identified in the subparagraph (D) report,
including, but not limited to: (i) strategic energy
management or other programs, including descriptions
of targeted buildings, equipment and operations; (ii)
eligible energy efficiency measures; and (iii)
expected energy savings, itemized by technology. If
the subparagraph (D) audit report identifies that the
customer currently utilizes the best available energy
efficient technology, equipment, programs, and
operations, the customer may provide a statement that
more efficient technology, equipment, programs, and
operations are not reasonably available as a means of
satisfying this subparagraph (E); and
(F) the effective date of the opt out, which will
be the next January 1 following notice of the opt out.
(3) Upon receipt of a properly and timely noticed
request for opt out submitted by an eligible large private
energy customer, the retail electric utility shall grant
the request, file the request with the Commission and,
beginning January 1 of the following year, the opted out
customer shall no longer be assessed the costs of the plan
and shall be prohibited from participating in that 4-year
plan cycle to give the retail utility the certainty to
design program plan proposals.
(4) Upon a customer's election to opt out under
paragraphs (1) and (2) of this subsection (l) and
commencing on the effective date of said opt out, the
account properly identified in the customer's notice under
paragraph (2) shall not be subject to any cost recovery
and shall not be eligible to participate in, or directly
benefit from, compliance with energy efficiency cumulative
persisting savings requirements under subsections (a)
through (j).
(5) A utility's cumulative persisting annual savings
targets will exclude any opted out load.
(6) The request to opt out is only valid for the
requested plan cycle. An eligible large private energy
customer must also request to opt out for future energy
plan cycles, otherwise the customer will be included in
the future energy plan cycle.
(m) Notwithstanding the requirements of this Section, as
part of a proceeding to approve a multi-year plan under
subsections (f) and (g) of this Section if the multi-year plan
has been designed to maximize savings, but does not meet the
cost cap limitations of this Section, the Commission shall
reduce the amount of energy efficiency measures implemented
for any single year, and whose costs are recovered under
subsection (d) of this Section, by an amount necessary to
limit the estimated average net increase due to the cost of the
measures to no more than
(1) 3.5% for each of the 4 years beginning January 1,
2018,
(2) (blank),
(3) 4% for each of the 4 years beginning January 1,
2022,
(4) 4.25% for the 4 years beginning January 1, 2026,
and
(5) 4.25% plus an increase sufficient to account for
the rate of inflation between January 1, 2026 and January
1 of the first year of each subsequent 4-year plan cycle,
of the average amount paid per kilowatthour by residential
eligible retail customers during calendar year 2015. An
electric utility may plan to spend up to 10% more in any year
during an applicable multi-year plan period to
cost-effectively achieve additional savings so long as the
average over the applicable multi-year plan period does not
exceed the percentages defined in items (1) through (5). To
determine the total amount that may be spent by an electric
utility in any single year, the applicable percentage of the
average amount paid per kilowatthour shall be multiplied by
the total amount of energy delivered by such electric utility
in the calendar year 2015, adjusted to reflect the proportion
of the utility's load attributable to customers that have
opted out of subsections (a) through (j) of this Section under
subsection (l) of this Section. For purposes of this
subsection (m), the amount paid per kilowatthour includes,
without limitation, estimated amounts paid for supply,
transmission, distribution, surcharges, and add-on taxes. For
purposes of this Section, "eligible retail customers" shall
have the meaning set forth in Section 16-111.5 of this Act.
Once the Commission has approved a plan under subsections (f)
and (g) of this Section, no subsequent rate impact
determinations shall be made.
(n) A utility shall take advantage of the efficiencies
available through existing Illinois Home Weatherization
Assistance Program infrastructure and services, such as
enrollment, marketing, quality assurance and implementation,
which can reduce the need for similar services at a lower cost
than utility-only programs, subject to capacity constraints at
community action agencies, for both single-family and
multifamily weatherization services, to the extent Illinois
Home Weatherization Assistance Program community action
agencies provide multifamily services. A utility's plan shall
demonstrate that in formulating annual weatherization budgets,
it has sought input and coordination with community action
agencies regarding agencies' capacity to expand and maximize
Illinois Home Weatherization Assistance Program delivery using
the ratepayer dollars collected under this Section.
(Source: P.A. 102-662, eff. 9-15-21; 103-154, eff. 6-30-23.)
(220 ILCS 5/8-104)
Sec. 8-104. Natural gas energy efficiency programs.
(a) It is the policy of the State that natural gas
utilities and the Department of Commerce and Economic
Opportunity are required to use cost-effective energy
efficiency to reduce direct and indirect costs to consumers.
It serves the public interest to allow natural gas utilities
to recover costs for reasonably and prudently incurred
expenses for cost-effective energy efficiency measures.
(b) For purposes of this Section, "energy efficiency"
means measures that reduce the amount of energy required to
achieve a given end use. "Energy efficiency" also includes
measures that reduce the total Btus of electricity and natural
gas needed to meet the end use or uses. "Cost-effective" means
that the measures satisfy the total resource cost test which,
for purposes of this Section, means a standard that is met if,
for an investment in energy efficiency, the benefit-cost ratio
is greater than one. The benefit-cost ratio is the ratio of the
net present value of the total benefits of the measures to the
net present value of the total costs as calculated over the
lifetime of the measures. The total resource cost test
compares the sum of avoided natural gas utility costs,
representing the benefits that accrue to the system and the
participant in the delivery of those efficiency measures, as
well as other quantifiable societal benefits, including
avoided electric utility costs, to the sum of all incremental
costs of end use measures (including both utility and
participant contributions), plus costs to administer, deliver,
and evaluate each demand-side measure, to quantify the net
savings obtained by substituting demand-side measures for
supply resources. In calculating avoided costs, reasonable
estimates shall be included for financial costs likely to be
imposed by future regulation of emissions of greenhouse gases.
The low-income programs described in item (4) of subsection
(f) of this Section shall not be required to meet the total
resource cost test.
(c) Natural gas utilities shall implement cost-effective
energy efficiency measures to meet at least the following
natural gas savings requirements, which shall be based upon
the total amount of gas delivered to retail customers, other
than the customers described in subsection (m) of this
Section, during calendar year 2009 multiplied by the
applicable percentage. Natural gas utilities may comply with
this Section by meeting the annual incremental savings goal in
the applicable year or by showing that total cumulative annual
savings within a multi-year planning period associated with
measures implemented after May 31, 2011 were equal to the sum
of each annual incremental savings requirement from the first
day of the multi-year planning period through the last day of
the multi-year planning period:
(1) 0.2% by May 31, 2012;
(2) an additional 0.4% by May 31, 2013, increasing
total savings to .6%;
(3) an additional 0.6% by May 31, 2014, increasing
total savings to 1.2%;
(4) an additional 0.8% by May 31, 2015, increasing
total savings to 2.0%;
(5) an additional 1% by May 31, 2016, increasing total
savings to 3.0%;
(6) an additional 1.2% by May 31, 2017, increasing
total savings to 4.2%;
(7) an additional 1.4% in the year commencing January
1, 2018;
(8) an additional 1.5% in the year commencing January
1, 2019; and
(9) an additional 1.5% in each 12-month period
thereafter.
(d) Notwithstanding the requirements of subsection (c) of
this Section, a natural gas utility shall limit the amount of
energy efficiency implemented in any multi-year reporting
period established by subsection (f) of Section 8-104 of this
Act, by an amount necessary to limit the estimated average
increase in the amounts paid by retail customers in connection
with natural gas service to no more than 2% in the applicable
multi-year reporting period. The energy savings requirements
in subsection (c) of this Section may be reduced by the
Commission for the subject plan, if the utility demonstrates
by substantial evidence that it is highly unlikely that the
requirements could be achieved without exceeding the
applicable spending limits in any multi-year reporting period.
No later than September 1, 2013, the Commission shall review
the limitation on the amount of energy efficiency measures
implemented pursuant to this Section and report to the General
Assembly, in the report required by subsection (k) of this
Section, its findings as to whether that limitation unduly
constrains the procurement of energy efficiency measures.
(e) The provisions of this subsection (e) apply to those
multi-year plans that commence prior to January 1, 2018. The
utility shall utilize 75% of the available funding associated
with energy efficiency programs approved by the Commission,
and may outsource various aspects of program development and
implementation. The remaining 25% of available funding shall
be used by the Department of Commerce and Economic Opportunity
to implement energy efficiency measures that achieve no less
than 20% of the requirements of subsection (c) of this
Section. Such measures shall be designed in conjunction with
the utility and approved by the Commission. The Department may
outsource development and implementation of energy efficiency
measures. A minimum of 10% of the entire portfolio of
cost-effective energy efficiency measures shall be procured
from local government, municipal corporations, school
districts, public institutions of higher education, and
community college districts. Five percent of the entire
portfolio of cost-effective energy efficiency measures may be
granted to local government and municipal corporations for
market transformation initiatives. The Department shall
coordinate the implementation of these measures and shall
integrate delivery of natural gas efficiency programs with
electric efficiency programs delivered pursuant to Section
8-103 of this Act, unless the Department can show that
integration is not feasible.
The apportionment of the dollars to cover the costs to
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and contracts to the utility. The Department is authorized to
adopt any rules necessary and prescribe procedures in order to
ensure compliance by applicants in carrying out the purposes
of rebate agreements for energy efficiency measures
implemented by the Department made under this Section.
The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency measures that the utility implements.
The portfolio of measures, administered by both the
utilities and the Department, shall, in combination, be
designed to achieve the annual energy savings requirements set
forth in subsection (c) of this Section, as modified by
subsection (d) of this Section.
The utility and the Department shall agree upon a
reasonable portfolio of measures and determine the measurable
corresponding percentage of the savings goals associated with
measures implemented by the Department.
No utility shall be assessed a penalty under subsection
(f) of this Section for failure to make a timely filing if that
failure is the result of a lack of agreement with the
Department with respect to the allocation of responsibilities
or related costs or target assignments. In that case, the
Department and the utility shall file their respective plans
with the Commission and the Commission shall determine an
appropriate division of measures and programs that meets the
requirements of this Section.
(e-5) The provisions of this subsection (e-5) shall be
applicable to those multi-year plans that commence after
December 31, 2017. Natural gas utilities shall be responsible
for overseeing the design, development, and filing of their
efficiency plans with the Commission and may outsource
development and implementation of energy efficiency measures.
A minimum of 10% of the entire portfolio of cost-effective
energy efficiency measures shall be procured from local
government, municipal corporations, school districts, public
institutions of higher education, and community college
districts. Five percent of the entire portfolio of
cost-effective energy efficiency measures may be granted to
local government and municipal corporations for market
transformation initiatives.
The utilities shall also present a portfolio of energy
efficiency measures proportionate to the share of total annual
utility revenues in Illinois from households at or below 150%
of the poverty level. Such programs shall be targeted to
households with incomes at or below 80% of area median income.
(e-10) A utility providing approved energy efficiency
measures in this State shall be permitted to recover costs of
those measures through an automatic adjustment clause tariff
filed with and approved by the Commission. The tariff shall be
established outside the context of a general rate case and
shall be applicable to the utility's customers other than the
customers described in subsection (m) of this Section. Each
year the Commission shall initiate a review to reconcile any
amounts collected with the actual costs and to determine the
required adjustment to the annual tariff factor to match
annual expenditures.
(e-15) For those multi-year plans that commence prior to
January 1, 2018, each utility shall include, in its recovery
of costs, the costs estimated for both the utility's and the
Department's implementation of energy efficiency measures.
Costs collected by the utility for measures implemented by the
Department shall be submitted to the Department pursuant to
Section 605-323 of the Civil Administrative Code of Illinois,
shall be deposited into the Energy Efficiency Portfolio
Standards Fund, and shall be used by the Department solely for
the purpose of implementing these measures. A utility shall
not be required to advance any moneys to the Department but
only to forward such funds as it has collected. The Department
shall report to the Commission on an annual basis regarding
the costs actually incurred by the Department in the
implementation of the measures. Any changes to the costs of
energy efficiency measures as a result of plan modifications
shall be appropriately reflected in amounts recovered by the
utility and turned over to the Department.
(f) No later than October 1, 2010, each gas utility shall
file an energy efficiency plan with the Commission to meet the
energy efficiency standards through May 31, 2014. No later
than October 1, 2013, each gas utility shall file an energy
efficiency plan with the Commission to meet the energy
efficiency standards through May 31, 2017. Beginning in 2017
and every 4 years thereafter, each utility shall file an
energy efficiency plan with the Commission to meet the energy
efficiency standards for the next applicable 4-year period
beginning January 1 of the year following the filing. For
those multi-year plans commencing on January 1, 2018, each
utility shall file its proposed energy efficiency plan no
later than 30 days after the effective date of this amendatory
Act of the 99th General Assembly or May 1, 2017, whichever is
later. Beginning in 2021 and every 4 years thereafter, each
utility shall file its energy efficiency plan no later than
March 1. If a utility does not file such a plan on or before
the applicable filing deadline for the plan, then it shall
face a penalty of $100,000 per day until the plan is filed.
Each utility's plan shall set forth the utility's
proposals to meet the utility's portion of the energy
efficiency standards identified in subsection (c) of this
Section, as modified by subsection (d) of this Section, taking
into account the unique circumstances of the utility's service
territory. For those plans commencing after December 31, 2021,
the Commission shall seek public comment on the utility's plan
and shall issue an order approving or disapproving each plan
within 6 months after its submission. For those plans
commencing on January 1, 2018, the Commission shall seek
public comment on the utility's plan and shall issue an order
approving or disapproving each plan no later than August 31,
2017, or 105 days after the effective date of this amendatory
Act of the 99th General Assembly, whichever is later. If the
Commission disapproves a plan, the Commission shall, within 30
days, describe in detail the reasons for the disapproval and
describe a path by which the utility may file a revised draft
of the plan to address the Commission's concerns
satisfactorily. If the utility does not refile with the
Commission within 60 days after the disapproval, the utility
shall be subject to penalties at a rate of $100,000 per day
until the plan is filed. This process shall continue, and
penalties shall accrue, until the utility has successfully
filed a portfolio of energy efficiency measures. Penalties
shall be deposited into the Energy Efficiency Trust Fund and
the cost of any such penalties may not be recovered from
ratepayers. In submitting proposed energy efficiency plans and
funding levels to meet the savings goals adopted by this Act
the utility shall:
(1) Demonstrate that its proposed energy efficiency
measures will achieve the requirements that are identified
in subsection (c) of this Section, as modified by
subsection (d) of this Section.
(2) Present specific proposals to implement new
building and appliance standards that have been placed
into effect.
(3) Present estimates of the total amount paid for gas
service expressed on a per therm basis associated with the
proposed portfolio of measures designed to meet the
requirements that are identified in subsection (c) of this
Section, as modified by subsection (d) of this Section.
(4) For those multi-year plans that commence prior to
January 1, 2018, coordinate with the Department to present
a portfolio of energy efficiency measures proportionate to
the share of total annual utility revenues in Illinois
from households at or below 150% of the poverty level.
Such programs shall be targeted to households with incomes
at or below 80% of area median income.
(5) Demonstrate that its overall portfolio of energy
efficiency measures, not including low-income programs
described in item (4) of this subsection (f) and
subsection (e-5) of this Section, are cost-effective using
the total resource cost test and represent a diverse cross
section of opportunities for customers of all rate classes
to participate in the programs.
(6) Demonstrate that a gas utility affiliated with an
electric utility that is required to comply with Section
8-103 or 8-103B of this Act has integrated gas and
electric efficiency measures into a single program that
reduces program or participant costs and appropriately
allocates costs to gas and electric ratepayers. For those
multi-year plans that commence prior to January 1, 2018,
the Department shall integrate all gas and electric
programs it delivers in any such utilities' service
territories, unless the Department can show that
integration is not feasible or appropriate.
(7) Include a proposed cost recovery tariff mechanism
to fund the proposed energy efficiency measures and to
ensure the recovery of the prudently and reasonably
incurred costs of Commission-approved programs.
(8) Provide for quarterly status reports tracking
implementation of and expenditures for the utility's
portfolio of measures and, if applicable, the Department's
portfolio of measures, an annual independent review, and a
full independent evaluation of the multi-year results of
the performance and the cost-effectiveness of the
utility's and, if applicable, Department's portfolios of
measures and broader net program impacts and, to the
extent practical, for adjustment of the measures on a
going forward basis as a result of the evaluations. The
resources dedicated to evaluation shall not exceed 3% of
portfolio resources in any given multi-year period.
(g) No more than 3% of expenditures on energy efficiency
measures may be allocated for demonstration of breakthrough
equipment and devices.
(h) Illinois natural gas utilities that are affiliated by
virtue of a common parent company may, at the utilities'
request, be considered a single natural gas utility for
purposes of complying with this Section.
(i) If, after 3 years, a gas utility fails to meet the
efficiency standard specified in subsection (c) of this
Section as modified by subsection (d), then it shall make a
contribution to the Low-Income Home Energy Assistance Program.
The total liability for failure to meet the goal shall be
assessed as follows:
(1) a large gas utility shall pay $600,000;
(2) a medium gas utility shall pay $400,000; and
(3) a small gas utility shall pay $200,000.
For purposes of this Section, (i) a "large gas utility" is
a gas utility that on December 31, 2008, served more than
1,500,000 gas customers in Illinois; (ii) a "medium gas
utility" is a gas utility that on December 31, 2008, served
fewer than 1,500,000, but more than 500,000 gas customers in
Illinois; and (iii) a "small gas utility" is a gas utility that
on December 31, 2008, served fewer than 500,000 and more than
100,000 gas customers in Illinois. The costs of this
contribution may not be recovered from ratepayers.
If a gas utility fails to meet the efficiency standard
specified in subsection (c) of this Section, as modified by
subsection (d) of this Section, in any 2 consecutive
multi-year planning periods, then the responsibility for
implementing the utility's energy efficiency measures shall be
transferred to an independent program administrator selected
by the Commission. Reasonable and prudent costs incurred by
the independent program administrator to meet the efficiency
standard specified in subsection (c) of this Section, as
modified by subsection (d) of this Section, may be recovered
from the customers of the affected gas utilities, other than
customers described in subsection (m) of this Section. The
utility shall provide the independent program administrator
with all information and assistance necessary to perform the
program administrator's duties including but not limited to
customer, account, and energy usage data, and shall allow the
program administrator to include inserts in customer bills.
The utility may recover reasonable costs associated with any
such assistance.
(j) No utility shall be deemed to have failed to meet the
energy efficiency standards to the extent any such failure is
due to a failure of the Department.
(k) Not later than January 1, 2012, the Commission shall
develop and solicit public comment on a plan to foster
statewide coordination and consistency between statutorily
mandated natural gas and electric energy efficiency programs
to reduce program or participant costs or to improve program
performance. Not later than September 1, 2013, the Commission
shall issue a report to the General Assembly containing its
findings and recommendations.
(l) This Section does not apply to a gas utility that on
January 1, 2009, provided gas service to fewer than 100,000
customers in Illinois.
(m) Subsections (a) through (k) of this Section do not
apply to customers of a natural gas utility that have a North
American Industry Classification System code number that is
22111 or any such code number beginning with the digits 31, 32,
or 33 and (i) annual usage in the aggregate of 4 million therms
or more within the service territory of the affected gas
utility or with aggregate usage of 8 million therms or more in
this State and complying with the provisions of item (l) of
this subsection (m); or (ii) using natural gas as feedstock
and meeting the usage requirements described in item (i) of
this subsection (m), to the extent such annual feedstock usage
is greater than 60% of the customer's total annual usage of
natural gas.
(1) Customers described in this subsection (m) of this
Section shall apply, on a form approved on or before
October 1, 2009 by the Department, to the Department to be
designated as a self-directing customer ("SDC") or as an
exempt customer using natural gas as a feedstock from
which other products are made, including, but not limited
to, feedstock for a hydrogen plant, on or before the 1st
day of February, 2010. Thereafter, application may be made
not less than 6 months before the filing date of the gas
utility energy efficiency plan described in subsection (f)
of this Section; however, a new customer that commences
taking service from a natural gas utility after February
1, 2010 may apply to become a SDC or exempt customer up to
30 days after beginning service. Customers described in
this subsection (m) that have not already been approved by
the Department may apply to be designated a self-directing
customer or exempt customer, on a form approved by the
Department, between September 1, 2013 and September 30,
2013. Customer applications that are approved by the
Department under this amendatory Act of the 98th General
Assembly shall be considered to be a self-directing
customer or exempt customer, as applicable, for the
current 3-year planning period effective December 1, 2013.
Such application shall contain the following:
(A) the customer's certification that, at the time
of its application, it qualifies to be a SDC or exempt
customer described in this subsection (m) of this
Section;
(B) in the case of a SDC, the customer's
certification that it has established or will
establish by the beginning of the utility's multi-year
planning period commencing subsequent to the
application, and will maintain for accounting
purposes, an energy efficiency reserve account and
that the customer will accrue funds in said account to
be held for the purpose of funding, in whole or in
part, energy efficiency measures of the customer's
choosing, which may include, but are not limited to,
projects involving combined heat and power systems
that use the same energy source both for the
generation of electrical or mechanical power and the
production of steam or another form of useful thermal
energy or the use of combustible gas produced from
biomass, or both;
(C) in the case of a SDC, the customer's
certification that annual funding levels for the
energy efficiency reserve account will be equal to 2%
of the customer's cost of natural gas, composed of the
customer's commodity cost and the delivery service
charges paid to the gas utility, or $150,000,
whichever is less;
(D) in the case of a SDC, the customer's
certification that the required reserve account
balance will be capped at 3 years' worth of accruals
and that the customer may, at its option, make further
deposits to the account to the extent such deposit
would increase the reserve account balance above the
designated cap level;
(E) in the case of a SDC, the customer's
certification that by October 1 of each year,
beginning no sooner than October 1, 2012, the customer
will report to the Department information, for the
12-month period ending May 31 of the same year, on all
deposits and reductions, if any, to the reserve
account during the reporting year, and to the extent
deposits to the reserve account in any year are in an
amount less than $150,000, the basis for such reduced
deposits; reserve account balances by month; a
description of energy efficiency measures undertaken
by the customer and paid for in whole or in part with
funds from the reserve account; an estimate of the
energy saved, or to be saved, by the measure; and that
the report shall include a verification by an officer
or plant manager of the customer or by a registered
professional engineer or certified energy efficiency
trade professional that the funds withdrawn from the
reserve account were used for the energy efficiency
measures;
(F) in the case of an exempt customer, the
customer's certification of the level of gas usage as
feedstock in the customer's operation in a typical
year and that it will provide information establishing
this level, upon request of the Department;
(G) in the case of either an exempt customer or a
SDC, the customer's certification that it has provided
the gas utility or utilities serving the customer with
a copy of the application as filed with the
Department;
(H) in the case of either an exempt customer or a
SDC, certification of the natural gas utility or
utilities serving the customer in Illinois including
the natural gas utility accounts that are the subject
of the application; and
(I) in the case of either an exempt customer or a
SDC, a verification signed by a plant manager or an
authorized corporate officer attesting to the
truthfulness and accuracy of the information contained
in the application.
(2) The Department shall review the application to
determine that it contains the information described in
provisions (A) through (I) of item (1) of this subsection
(m), as applicable. The review shall be completed within
30 days after the date the application is filed with the
Department. Absent a determination by the Department
within the 30-day period, the applicant shall be
considered to be a SDC or exempt customer, as applicable,
for all subsequent multi-year planning periods, as of the
date of filing the application described in this
subsection (m). If the Department determines that the
application does not contain the applicable information
described in provisions (A) through (I) of item (1) of
this subsection (m), it shall notify the customer, in
writing, of its determination that the application does
not contain the required information and identify the
information that is missing, and the customer shall
provide the missing information within 15 working days
after the date of receipt of the Department's
notification.
(3) The Department shall have the right to audit the
information provided in the customer's application and
annual reports to ensure continued compliance with the
requirements of this subsection. Based on the audit, if
the Department determines the customer is no longer in
compliance with the requirements of items (A) through (I)
of item (1) of this subsection (m), as applicable, the
Department shall notify the customer in writing of the
noncompliance. The customer shall have 30 days to
establish its compliance, and failing to do so, may have
its status as a SDC or exempt customer revoked by the
Department. The Department shall treat all information
provided by any customer seeking SDC status or exemption
from the provisions of this Section as strictly
confidential.
(4) Upon request, or on its own motion, the Commission
may open an investigation, no more than once every 3 years
and not before October 1, 2014, to evaluate the
effectiveness of the self-directing program described in
this subsection (m).
Customers described in this subsection (m) that applied to
the Department on January 3, 2013, were approved by the
Department on February 13, 2013 to be a self-directing
customer or exempt customer, and receive natural gas from a
utility that provides gas service to at least 500,000 retail
customers in Illinois and electric service to at least
1,000,000 retail customers in Illinois shall be considered to
be a self-directing customer or exempt customer, as
applicable, for the current 3-year planning period effective
December 1, 2013.
(n) The applicability of this Section to customers
described in subsection (m) of this Section is conditioned on
the existence of the SDC program. In no event will any
provision of this Section apply to such customers after
January 1, 2020.
(o) Utilities' 3-year energy efficiency plans approved by
the Commission on or before the effective date of this
amendatory Act of the 99th General Assembly for the period
June 1, 2014 through May 31, 2017 shall continue to be in force
and effect through December 31, 2017 so that the energy
efficiency programs set forth in those plans continue to be
offered during the period June 1, 2017 through December 31,
2017. Each utility is authorized to increase, on a pro rata
basis, the energy savings goals and budgets approved in its
plan to reflect the additional 7 months of the plan's
operation.
(Source: P.A. 98-90, eff. 7-15-13; 98-225, eff. 8-9-13;
98-604, eff. 12-17-13; 99-906, eff. 6-1-17.)