Illinois 2025-2026 Regular Session

Illinois House Bill HB2862 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2862 Introduced , by Rep. Amy Elik SYNOPSIS AS INTRODUCED: 220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220 Amends the Public Utilities Act. Provides that the Illinois Commerce Commission shall not authorize any charges based upon changes in the cost of fuel. Removes provisions concerning the Commission's ability to authorize the increase or decrease of a public utility's rates and charges based upon changes in the cost of fuel used in the generation or production of electric power, changes in the cost of purchased power, or changes in the cost of purchased gas through the application of fuel adjustment clauses or purchased gas adjustment clauses and based upon expenditures or revenues resulting from the purchase or sale of emission allowances through such fuel adjustment clauses as a cost of fuel. Removes provisions concerning a public utility's ability to, at any time during the mandatory transition period, file with the Commission proposed tariff sheets that establish the rate of the provided utility to be applied pursuant to the public utility's fuel adjustment clause at the average value for such rate during the preceding 24 months, provided that such average rate results in a credit to customers' bills, without making any revisions to the public utility's base rate tariffs. LRB104 10764 AAS 20844 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2862 Introduced , by Rep. Amy Elik SYNOPSIS AS INTRODUCED: 220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220 220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220 Amends the Public Utilities Act. Provides that the Illinois Commerce Commission shall not authorize any charges based upon changes in the cost of fuel. Removes provisions concerning the Commission's ability to authorize the increase or decrease of a public utility's rates and charges based upon changes in the cost of fuel used in the generation or production of electric power, changes in the cost of purchased power, or changes in the cost of purchased gas through the application of fuel adjustment clauses or purchased gas adjustment clauses and based upon expenditures or revenues resulting from the purchase or sale of emission allowances through such fuel adjustment clauses as a cost of fuel. Removes provisions concerning a public utility's ability to, at any time during the mandatory transition period, file with the Commission proposed tariff sheets that establish the rate of the provided utility to be applied pursuant to the public utility's fuel adjustment clause at the average value for such rate during the preceding 24 months, provided that such average rate results in a credit to customers' bills, without making any revisions to the public utility's base rate tariffs. LRB104 10764 AAS 20844 b LRB104 10764 AAS 20844 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2862 Introduced , by Rep. Amy Elik SYNOPSIS AS INTRODUCED:
3	3	220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220 220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220
4	4	220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220
5	5	Amends the Public Utilities Act. Provides that the Illinois Commerce Commission shall not authorize any charges based upon changes in the cost of fuel. Removes provisions concerning the Commission's ability to authorize the increase or decrease of a public utility's rates and charges based upon changes in the cost of fuel used in the generation or production of electric power, changes in the cost of purchased power, or changes in the cost of purchased gas through the application of fuel adjustment clauses or purchased gas adjustment clauses and based upon expenditures or revenues resulting from the purchase or sale of emission allowances through such fuel adjustment clauses as a cost of fuel. Removes provisions concerning a public utility's ability to, at any time during the mandatory transition period, file with the Commission proposed tariff sheets that establish the rate of the provided utility to be applied pursuant to the public utility's fuel adjustment clause at the average value for such rate during the preceding 24 months, provided that such average rate results in a credit to customers' bills, without making any revisions to the public utility's base rate tariffs.
6	6	LRB104 10764 AAS 20844 b LRB104 10764 AAS 20844 b
7	7	LRB104 10764 AAS 20844 b
8	8	A BILL FOR
9	9	HB2862LRB104 10764 AAS 20844 b HB2862 LRB104 10764 AAS 20844 b
10	10	HB2862 LRB104 10764 AAS 20844 b
11	11	1 AN ACT concerning regulation.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Public Utilities Act is amended by changing
15	15	5 Section 9-220 as follows:
16	16	6 (220 ILCS 5/9-220) (from Ch. 111 2/3, par. 9-220)
17	17	7 Sec. 9-220. Rate changes based on changes in fuel costs.
18	18	8 (a) The Commission shall not authorize any charges based
19	19	9 upon changes in the cost of fuel. Notwithstanding the
20	20	10 provisions of Section 9-201, the Commission may authorize the
21	21	11 increase or decrease of rates and charges based upon changes
22	22	12 in the cost of fuel used in the generation or production of
23	23	13 electric power, changes in the cost of purchased power, or
24	24	14 changes in the cost of purchased gas through the application
25	25	15 of fuel adjustment clauses or purchased gas adjustment
26	26	16 clauses. The Commission may also authorize the increase or
27	27	17 decrease of rates and charges based upon expenditures or
28	28	18 revenues resulting from the purchase or sale of emission
29	29	19 allowances created under the federal Clean Air Act Amendments
30	30	20 of 1990, through such fuel adjustment clauses, as a cost of
31	31	21 fuel. For the purposes of this paragraph, cost of fuel used in
32	32	22 the generation or production of electric power shall include
33	33	23 the amount of any fees paid by the utility for the
34	34
35	35
36	36
37	37	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2862 Introduced , by Rep. Amy Elik SYNOPSIS AS INTRODUCED:
38	38	220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220 220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220
39	39	220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220
40	40	Amends the Public Utilities Act. Provides that the Illinois Commerce Commission shall not authorize any charges based upon changes in the cost of fuel. Removes provisions concerning the Commission's ability to authorize the increase or decrease of a public utility's rates and charges based upon changes in the cost of fuel used in the generation or production of electric power, changes in the cost of purchased power, or changes in the cost of purchased gas through the application of fuel adjustment clauses or purchased gas adjustment clauses and based upon expenditures or revenues resulting from the purchase or sale of emission allowances through such fuel adjustment clauses as a cost of fuel. Removes provisions concerning a public utility's ability to, at any time during the mandatory transition period, file with the Commission proposed tariff sheets that establish the rate of the provided utility to be applied pursuant to the public utility's fuel adjustment clause at the average value for such rate during the preceding 24 months, provided that such average rate results in a credit to customers' bills, without making any revisions to the public utility's base rate tariffs.
41	41	LRB104 10764 AAS 20844 b LRB104 10764 AAS 20844 b
42	42	LRB104 10764 AAS 20844 b
43	43	A BILL FOR
44	44
45	45
46	46
47	47
48	48
49	49	220 ILCS 5/9-220 from Ch. 111 2/3, par. 9-220
50	50
51	51
52	52
53	53	LRB104 10764 AAS 20844 b
54	54
55	55
56	56
57	57
58	58
59	59
60	60
61	61
62	62
63	63	HB2862 LRB104 10764 AAS 20844 b
64	64
65	65
66	66	HB2862- 2 -LRB104 10764 AAS 20844 b HB2862 - 2 - LRB104 10764 AAS 20844 b
67	67	HB2862 - 2 - LRB104 10764 AAS 20844 b
68	68	1 implementation and operation of a process for the
69	69	2 desulfurization of the flue gas when burning high sulfur coal
70	70	3 at any location within the State of Illinois irrespective of
71	71	4 the attainment status designation of such location; but shall
72	72	5 not include transportation costs of coal (i) except to the
73	73	6 extent that for contracts entered into on and after the
74	74	7 effective date of this amendatory Act of 1997, the cost of the
75	75	8 coal, including transportation costs, constitutes the lowest
76	76	9 cost for adequate and reliable fuel supply reasonably
77	77	10 available to the public utility in comparison to the cost,
78	78	11 including transportation costs, of other adequate and reliable
79	79	12 sources of fuel supply reasonably available to the public
80	80	13 utility, or (ii) except as otherwise provided in the next 3
81	81	14 sentences of this paragraph. Such costs of fuel shall, when
82	82	15 requested by a utility or at the conclusion of the utility's
83	83	16 next general electric rate proceeding, whichever shall first
84	84	17 occur, include transportation costs of coal purchased under
85	85	18 existing coal purchase contracts. For purposes of this
86	86	19 paragraph "existing coal purchase contracts" means contracts
87	87	20 for the purchase of coal in effect on the effective date of
88	88	21 this amendatory Act of 1991, as such contracts may thereafter
89	89	22 be amended, but only to the extent that any such amendment does
90	90	23 not increase the aggregate quantity of coal to be purchased
91	91	24 under such contract. Nothing herein shall authorize an
92	92	25 electric utility to recover through its fuel adjustment clause
93	93	26 any amounts of transportation costs of coal that were included
94	94
95	95
96	96
97	97
98	98
99	99	HB2862 - 2 - LRB104 10764 AAS 20844 b
100	100
101	101
102	102	HB2862- 3 -LRB104 10764 AAS 20844 b HB2862 - 3 - LRB104 10764 AAS 20844 b
103	103	HB2862 - 3 - LRB104 10764 AAS 20844 b
104	104	1 in the revenue requirement used to set base rates in its most
105	105	2 recent general rate proceeding. Cost shall be based upon
106	106	3 uniformly applied accounting principles. Annually, the
107	107	4 Commission shall initiate public hearings to determine whether
108	108	5 the clauses reflect actual costs of fuel, gas, power, or coal
109	109	6 transportation purchased to determine whether such purchases
110	110	7 were prudent, and to reconcile any amounts collected with the
111	111	8 actual costs of fuel, power, gas, or coal transportation
112	112	9 prudently purchased. In each such proceeding, the burden of
113	113	10 proof shall be upon the utility to establish the prudence of
114	114	11 its cost of fuel, power, gas, or coal transportation purchases
115	115	12 and costs. The Commission shall issue its final order in each
116	116	13 such annual proceeding for an electric utility by December 31
117	117	14 of the year immediately following the year to which the
118	118	15 proceeding pertains, provided, that the Commission shall issue
119	119	16 its final order with respect to such annual proceeding for the
120	120	17 years 1996 and earlier by December 31, 1998.
121	121	18 (b) (Blank). A public utility providing electric service,
122	122	19 other than a public utility described in subsections (e) or
123	123	20 (f) of this Section, may at any time during the mandatory
124	124	21 transition period file with the Commission proposed tariff
125	125	22 sheets that eliminate the public utility's fuel adjustment
126	126	23 clause and adjust the public utility's base rate tariffs by
127	127	24 the amount necessary for the base fuel component of the base
128	128	25 rates to recover the public utility's average fuel and power
129	129	26 supply costs per kilowatt-hour for the 2 most recent years for
130	130
131	131
132	132
133	133
134	134
135	135	HB2862 - 3 - LRB104 10764 AAS 20844 b
136	136
137	137
138	138	HB2862- 4 -LRB104 10764 AAS 20844 b HB2862 - 4 - LRB104 10764 AAS 20844 b
139	139	HB2862 - 4 - LRB104 10764 AAS 20844 b
140	140	1 which the Commission has issued final orders in annual
141	141	2 proceedings pursuant to subsection (a), where the average fuel
142	142	3 and power supply costs per kilowatt-hour shall be calculated
143	143	4 as the sum of the public utility's prudent and allowable fuel
144	144	5 and power supply costs as found by the Commission in the 2
145	145	6 proceedings divided by the public utility's actual
146	146	7 jurisdictional kilowatt-hour sales for those 2 years.
147	147	8 Notwithstanding any contrary or inconsistent provisions in
148	148	9 Section 9-201 of this Act, in subsection (a) of this Section or
149	149	10 in any rules or regulations promulgated by the Commission
150	150	11 pursuant to subsection (g) of this Section, the Commission
151	151	12 shall review and shall by order approve, or approve as
152	152	13 modified, the proposed tariff sheets within 60 days after the
153	153	14 date of the public utility's filing. The Commission may modify
154	154	15 the public utility's proposed tariff sheets only to the extent
155	155	16 the Commission finds necessary to achieve conformance to the
156	156	17 requirements of this subsection (b). During the 5 years
157	157	18 following the date of the Commission's order, but in any event
158	158	19 no earlier than January 1, 2007, a public utility whose fuel
159	159	20 adjustment clause has been eliminated pursuant to this
160	160	21 subsection shall not file proposed tariff sheets seeking, or
161	161	22 otherwise petition the Commission for, reinstatement of a fuel
162	162	23 adjustment clause.
163	163	24 (c) (Blank). Notwithstanding any contrary or inconsistent
164	164	25 provisions in Section 9-201 of this Act, in subsection (a) of
165	165	26 this Section or in any rules or regulations promulgated by the
166	166
167	167
168	168
169	169
170	170
171	171	HB2862 - 4 - LRB104 10764 AAS 20844 b
172	172
173	173
174	174	HB2862- 5 -LRB104 10764 AAS 20844 b HB2862 - 5 - LRB104 10764 AAS 20844 b
175	175	HB2862 - 5 - LRB104 10764 AAS 20844 b
176	176	1 Commission pursuant to subsection (g) of this Section, a
177	177	2 public utility providing electric service, other than a public
178	178	3 utility described in subsection (e) or (f) of this Section,
179	179	4 may at any time during the mandatory transition period file
180	180	5 with the Commission proposed tariff sheets that establish the
181	181	6 rate per kilowatt-hour to be applied pursuant to the public
182	182	7 utility's fuel adjustment clause at the average value for such
183	183	8 rate during the preceding 24 months, provided that such
184	184	9 average rate results in a credit to customers' bills, without
185	185	10 making any revisions to the public utility's base rate
186	186	11 tariffs. The proposed tariff sheets shall establish the fuel
187	187	12 adjustment rate for a specific time period of at least 3 years
188	188	13 but not more than 5 years, provided that the terms and
189	189	14 conditions for any reinstatement earlier than 5 years shall be
190	190	15 set forth in the proposed tariff sheets and subject to
191	191	16 modification or approval by the Commission. The Commission
192	192	17 shall review and shall by order approve the proposed tariff
193	193	18 sheets if it finds that the requirements of this subsection
194	194	19 are met. The Commission shall not conduct the annual hearings
195	195	20 specified in the last 3 sentences of subsection (a) of this
196	196	21 Section for the utility for the period that the factor
197	197	22 established pursuant to this subsection is in effect.
198	198	23 (d) (Blank). A public utility providing electric service,
199	199	24 or a public utility providing gas service may file with the
200	200	25 Commission proposed tariff sheets that eliminate the public
201	201	26 utility's fuel or purchased gas adjustment clause and adjust
202	202
203	203
204	204
205	205
206	206
207	207	HB2862 - 5 - LRB104 10764 AAS 20844 b
208	208
209	209
210	210	HB2862- 6 -LRB104 10764 AAS 20844 b HB2862 - 6 - LRB104 10764 AAS 20844 b
211	211	HB2862 - 6 - LRB104 10764 AAS 20844 b
212	212	1 the public utility's base rate tariffs to provide for recovery
213	213	2 of power supply costs or gas supply costs that would have been
214	214	3 recovered through such clause; provided, that the provisions
215	215	4 of this subsection (d) shall not be available to a public
216	216	5 utility described in subsections (e) or (f) of this Section to
217	217	6 eliminate its fuel adjustment clause. Notwithstanding any
218	218	7 contrary or inconsistent provisions in Section 9-201 of this
219	219	8 Act, in subsection (a) of this Section, or in any rules or
220	220	9 regulations promulgated by the Commission pursuant to
221	221	10 subsection (g) of this Section, the Commission shall review
222	222	11 and shall by order approve, or approve as modified in the
223	223	12 Commission's order, the proposed tariff sheets within 240 days
224	224	13 after the date of the public utility's filing. The
225	225	14 Commission's order shall approve rates and charges that the
226	226	15 Commission, based on information in the public utility's
227	227	16 filing or on the record if a hearing is held by the Commission,
228	228	17 finds will recover the reasonable, prudent and necessary
229	229	18 jurisdictional power supply costs or gas supply costs incurred
230	230	19 or to be incurred by the public utility during a 12 month
231	231	20 period found by the Commission to be appropriate for these
232	232	21 purposes, provided, that such period shall be either (i) a 12
233	233	22 month historical period occurring during the 15 months ending
234	234	23 on the date of the public utility's filing, or (ii) a 12 month
235	235	24 future period ending no later than 15 months following the
236	236	25 date of the public utility's filing. The public utility shall
237	237	26 include with its tariff filing information showing both (1)
238	238
239	239
240	240
241	241
242	242
243	243	HB2862 - 6 - LRB104 10764 AAS 20844 b
244	244
245	245
246	246	HB2862- 7 -LRB104 10764 AAS 20844 b HB2862 - 7 - LRB104 10764 AAS 20844 b
247	247	HB2862 - 7 - LRB104 10764 AAS 20844 b
248	248	1 its actual jurisdictional power supply costs or gas supply
249	249	2 costs for a 12 month historical period conforming to (i) above
250	250	3 and (2) its projected jurisdictional power supply costs or gas
251	251	4 supply costs for a future 12 month period conforming to (ii)
252	252	5 above. If the Commission's order requires modifications in the
253	253	6 tariff sheets filed by the public utility, the public utility
254	254	7 shall have 7 days following the date of the order to notify the
255	255	8 Commission whether the public utility will implement the
256	256	9 modified tariffs or elect to continue its fuel or purchased
257	257	10 gas adjustment clause in force as though no order had been
258	258	11 entered. The Commission's order shall provide for any
259	259	12 reconciliation of power supply costs or gas supply costs, as
260	260	13 the case may be, and associated revenues through the date that
261	261	14 the public utility's fuel or purchased gas adjustment clause
262	262	15 is eliminated. During the 5 years following the date of the
263	263	16 Commission's order, a public utility whose fuel or purchased
264	264	17 gas adjustment clause has been eliminated pursuant to this
265	265	18 subsection shall not file proposed tariff sheets seeking, or
266	266	19 otherwise petition the Commission for, reinstatement or
267	267	20 adoption of a fuel or purchased gas adjustment clause. Nothing
268	268	21 in this subsection (d) shall be construed as limiting the
269	269	22 Commission's authority to eliminate a public utility's fuel
270	270	23 adjustment clause or purchased gas adjustment clause in
271	271	24 accordance with any other applicable provisions of this Act.
272	272	25 (e) (Blank). Notwithstanding any contrary or inconsistent
273	273	26 provisions in Section 9-201 of this Act, in subsection (a) of
274	274
275	275
276	276
277	277
278	278
279	279	HB2862 - 7 - LRB104 10764 AAS 20844 b
280	280
281	281
282	282	HB2862- 8 -LRB104 10764 AAS 20844 b HB2862 - 8 - LRB104 10764 AAS 20844 b
283	283	HB2862 - 8 - LRB104 10764 AAS 20844 b
284	284	1 this Section, or in any rules promulgated by the Commission
285	285	2 pursuant to subsection (g) of this Section, a public utility
286	286	3 providing electric service to more than 1,000,000 customers in
287	287	4 this State may, within the first 6 months after the effective
288	288	5 date of this amendatory Act of 1997, file with the Commission
289	289	6 proposed tariff sheets that eliminate, effective January 1,
290	290	7 1997, the public utility's fuel adjustment clause without
291	291	8 adjusting its base rates, and such tariff sheets shall be
292	292	9 effective upon filing. To the extent the application of the
293	293	10 fuel adjustment clause had resulted in net charges to
294	294	11 customers after January 1, 1997, the utility shall also file a
295	295	12 tariff sheet that provides for a refund stated on a per
296	296	13 kilowatt-hour basis of such charges over a period not to
297	297	14 exceed 6 months; provided however, that such refund shall not
298	298	15 include the proportional amounts of taxes paid under the Use
299	299	16 Tax Act, Service Use Tax Act, Service Occupation Tax Act, and
300	300	17 Retailers' Occupation Tax Act on fuel used in generation. The
301	301	18 Commission shall issue an order within 45 days after the date
302	302	19 of the public utility's filing approving or approving as
303	303	20 modified such tariff sheet. If the fuel adjustment clause is
304	304	21 eliminated pursuant to this subsection, the Commission shall
305	305	22 not conduct the annual hearings specified in the last 3
306	306	23 sentences of subsection (a) of this Section for the utility
307	307	24 for any period after December 31, 1996 and prior to any
308	308	25 reinstatement of such clause. A public utility whose fuel
309	309	26 adjustment clause has been eliminated pursuant to this
310	310
311	311
312	312
313	313
314	314
315	315	HB2862 - 8 - LRB104 10764 AAS 20844 b
316	316
317	317
318	318	HB2862- 9 -LRB104 10764 AAS 20844 b HB2862 - 9 - LRB104 10764 AAS 20844 b
319	319	HB2862 - 9 - LRB104 10764 AAS 20844 b
320	320	1 subsection shall not file a proposed tariff sheet seeking, or
321	321	2 otherwise petition the Commission for, reinstatement of the
322	322	3 fuel adjustment clause prior to January 1, 2007.
323	323	4 (f) (Blank). Notwithstanding any contrary or inconsistent
324	324	5 provisions in Section 9-201 of this Act, in subsection (a) of
325	325	6 this Section, or in any rules or regulations promulgated by
326	326	7 the Commission pursuant to subsection (g) of this Section, a
327	327	8 public utility providing electric service to more than 500,000
328	328	9 customers but fewer than 1,000,000 customers in this State
329	329	10 may, within the first 6 months after the effective date of this
330	330	11 amendatory Act of 1997, file with the Commission proposed
331	331	12 tariff sheets that eliminate, effective January 1, 1997, the
332	332	13 public utility's fuel adjustment clause and adjust its base
333	333	14 rates by the amount necessary for the base fuel component of
334	334	15 the base rates to recover 91% of the public utility's average
335	335	16 fuel and power supply costs for the 2 most recent years for
336	336	17 which the Commission, as of January 1, 1997, has issued final
337	337	18 orders in annual proceedings pursuant to subsection (a), where
338	338	19 the average fuel and power supply costs per kilowatt-hour
339	339	20 shall be calculated as the sum of the public utility's prudent
340	340	21 and allowable fuel and power supply costs as found by the
341	341	22 Commission in the 2 proceedings divided by the public
342	342	23 utility's actual jurisdictional kilowatt-hour sales for those
343	343	24 2 years, provided, that such tariff sheets shall be effective
344	344	25 upon filing. To the extent the application of the fuel
345	345	26 adjustment clause had resulted in net charges to customers
346	346
347	347
348	348
349	349
350	350
351	351	HB2862 - 9 - LRB104 10764 AAS 20844 b
352	352
353	353
354	354	HB2862- 10 -LRB104 10764 AAS 20844 b HB2862 - 10 - LRB104 10764 AAS 20844 b
355	355	HB2862 - 10 - LRB104 10764 AAS 20844 b
356	356	1 after January 1, 1997, the utility shall also file a tariff
357	357	2 sheet that provides for a refund stated on a per kilowatt-hour
358	358	3 basis of such charges over a period not to exceed 6 months.
359	359	4 Provided however, that such refund shall not include the
360	360	5 proportional amounts of taxes paid under the Use Tax Act,
361	361	6 Service Use Tax Act, Service Occupation Tax Act, and
362	362	7 Retailers' Occupation Tax Act on fuel used in generation. The
363	363	8 Commission shall issue an order within 45 days after the date
364	364	9 of the public utility's filing approving or approving as
365	365	10 modified such tariff sheet. If the fuel adjustment clause is
366	366	11 eliminated pursuant to this subsection, the Commission shall
367	367	12 not conduct the annual hearings specified in the last 3
368	368	13 sentences of subsection (a) of this Section for the utility
369	369	14 for any period after December 31, 1996 and prior to any
370	370	15 reinstatement of such clause. A public utility whose fuel
371	371	16 adjustment clause has been eliminated pursuant to this
372	372	17 subsection shall not file a proposed tariff sheet seeking, or
373	373	18 otherwise petition the Commission for, reinstatement of the
374	374	19 fuel adjustment clause prior to January 1, 2007.
375	375	20 (g) The Commission shall have authority to promulgate
376	376	21 rules and regulations to carry out the provisions of this
377	377	22 Section.
378	378	23 (h) Any Illinois gas utility may enter into a contract on
379	379	24 or before September 30, 2011 for up to 10 years of supply with
380	380	25 any company for the purchase of substitute natural gas (SNG)
381	381	26 produced from coal through the gasification process if the
382	382
383	383
384	384
385	385
386	386
387	387	HB2862 - 10 - LRB104 10764 AAS 20844 b
388	388
389	389
390	390	HB2862- 11 -LRB104 10764 AAS 20844 b HB2862 - 11 - LRB104 10764 AAS 20844 b
391	391	HB2862 - 11 - LRB104 10764 AAS 20844 b
392	392	1 company has commenced construction of a clean coal SNG
393	393	2 facility by July 1, 2012 and commencement of construction
394	394	3 shall mean that material physical site work has occurred, such
395	395	4 as site clearing and excavation, water runoff prevention,
396	396	5 water retention reservoir preparation, or foundation
397	397	6 development. The contract shall contain the following
398	398	7 provisions: (i) at least 90% of feedstock to be used in the
399	399	8 gasification process shall be coal with a high volatile
400	400	9 bituminous rank and greater than 1.7 pounds of sulfur per
401	401	10 million Btu content; (ii) at the time the contract term
402	402	11 commences, the price per million Btu may not exceed $7.95 in
403	403	12 2008 dollars, adjusted annually based on the change in the
404	404	13 Annual Consumer Price Index for All Urban Consumers for the
405	405	14 Midwest Region as published in April by the United States
406	406	15 Department of Labor, Bureau of Labor Statistics (or a suitable
407	407	16 Consumer Price Index calculation if this Consumer Price Index
408	408	17 is not available) for the previous calendar year; provided
409	409	18 that the price per million Btu shall not exceed $9.95 at any
410	410	19 time during the contract; (iii) the utility's supply contract
411	411	20 for the purchase of SNG does not exceed 15% of the annual
412	412	21 system supply requirements of the utility as of 2008; and (iv)
413	413	22 the contract costs pursuant to subsection (h-10) of this
414	414	23 Section shall not include any lobbying expenses, charitable
415	415	24 contributions, advertising, organizational memberships,
416	416	25 carbon dioxide pipeline or sequestration expenses, or
417	417	26 marketing expenses.
418	418
419	419
420	420
421	421
422	422
423	423	HB2862 - 11 - LRB104 10764 AAS 20844 b
424	424
425	425
426	426	HB2862- 12 -LRB104 10764 AAS 20844 b HB2862 - 12 - LRB104 10764 AAS 20844 b
427	427	HB2862 - 12 - LRB104 10764 AAS 20844 b
428	428	1 Any gas utility that is providing service to more than
429	429	2 150,000 customers on August 2, 2011 (the effective date of
430	430	3 Public Act 97-239) shall either elect to enter into a contract
431	431	4 on or before September 30, 2011 for 10 years of SNG supply with
432	432	5 the owner of a clean coal SNG facility or to file biennial rate
433	433	6 proceedings before the Commission in the years 2012, 2014, and
434	434	7 2016, with such filings made after August 2, 2011 and no later
435	435	8 than September 30 of the years 2012, 2014, and 2016 consistent
436	436	9 with all requirements of 83 Ill. Adm. Code 255 and 285 as
437	437	10 though the gas utility were filing for an increase in its
438	438	11 rates, without regard to whether such filing would produce an
439	439	12 increase, a decrease, or no change in the gas utility's rates,
440	440	13 and the Commission shall review the gas utility's filing and
441	441	14 shall issue its order in accordance with the provisions of
442	442	15 Section 9-201 of this Act.
443	443	16 Within 7 days after August 2, 2011, the owner of the clean
444	444	17 coal SNG facility shall submit to the Illinois Power Agency
445	445	18 and each gas utility that is providing service to more than
446	446	19 150,000 customers on August 2, 2011 a copy of a draft contract.
447	447	20 Within 30 days after the receipt of the draft contract, each
448	448	21 such gas utility shall provide the Illinois Power Agency and
449	449	22 the owner of the clean coal SNG facility with its comments and
450	450	23 recommended revisions to the draft contract. Within 7 days
451	451	24 after the receipt of the gas utility's comments and
452	452	25 recommended revisions, the owner of the facility shall submit
453	453	26 its responsive comments and a further revised draft of the
454	454
455	455
456	456
457	457
458	458
459	459	HB2862 - 12 - LRB104 10764 AAS 20844 b
460	460
461	461
462	462	HB2862- 13 -LRB104 10764 AAS 20844 b HB2862 - 13 - LRB104 10764 AAS 20844 b
463	463	HB2862 - 13 - LRB104 10764 AAS 20844 b
464	464	1 contract to the Illinois Power Agency. The Illinois Power
465	465	2 Agency shall review the draft contract and comments.
466	466	3 During its review of the draft contract, the Illinois
467	467	4 Power Agency shall:
468	468	5 (1) review and confirm in writing that the terms
469	469	6 stated in this subsection (h) are incorporated in the SNG
470	470	7 contract;
471	471	8 (2) review the SNG pricing formula included in the
472	472	9 contract and approve that formula if the Illinois Power
473	473	10 Agency determines that the formula, at the time the
474	474	11 contract term commences: (A) starts with a price of $6.50
475	475	12 per MMBtu adjusted by the adjusted final capitalized plant
476	476	13 cost; (B) takes into account budgeted miscellaneous net
477	477	14 revenue after cost allowance, including sale of SNG
478	478	15 produced by the clean coal SNG facility above the
479	479	16 nameplate capacity of the facility and other by-products
480	480	17 produced by the facility, as approved by the Illinois
481	481	18 Power Agency; (C) does not include carbon dioxide
482	482	19 transportation or sequestration expenses; and (D) includes
483	483	20 all provisions required under this subsection (h); if the
484	484	21 Illinois Power Agency does not approve of the SNG pricing
485	485	22 formula, then the Illinois Power Agency shall modify the
486	486	23 formula to ensure that it meets the requirements of this
487	487	24 subsection (h);
488	488	25 (3) review and approve the amount of budgeted
489	489	26 miscellaneous net revenue after cost allowance, including
490	490
491	491
492	492
493	493
494	494
495	495	HB2862 - 13 - LRB104 10764 AAS 20844 b
496	496
497	497
498	498	HB2862- 14 -LRB104 10764 AAS 20844 b HB2862 - 14 - LRB104 10764 AAS 20844 b
499	499	HB2862 - 14 - LRB104 10764 AAS 20844 b
500	500	1 sale of SNG produced by the clean coal SNG facility above
501	501	2 the nameplate capacity of the facility and other
502	502	3 by-products produced by the facility, to be included in
503	503	4 the pricing formula; the Illinois Power Agency shall
504	504	5 approve the amount of budgeted miscellaneous net revenue
505	505	6 to be included in the pricing formula if it determines the
506	506	7 budgeted amount to be reasonable and accurate;
507	507	8 (4) review and confirm in writing that using the EIA
508	508	9 Annual Energy Outlook-2011 Henry Hub Spot Price, the
509	509	10 contract terms set out in subsection (h), the
510	510	11 reconciliation account terms as set out in subsection
511	511	12 (h-15), and an estimated inflation rate of 2.5% for each
512	512	13 corresponding year, that there will be no cumulative
513	513	14 estimated increase for residential customers; and
514	514	15 (5) allocate the nameplate capacity of the clean coal
515	515	16 SNG by total therms sold to ultimate customers by each gas
516	516	17 utility in 2008; provided, however, no utility shall be
517	517	18 required to purchase more than 42% of the projected annual
518	518	19 output of the facility; additionally, the Illinois Power
519	519	20 Agency shall further adjust the allocation only as
520	520	21 required to take into account (A) adverse consolidation,
521	521	22 derivative, or lease impacts to the balance sheet or
522	522	23 income statement of any gas utility or (B) the physical
523	523	24 capacity of the gas utility to accept SNG.
524	524	25 If the parties to the contract do not agree on the terms
525	525	26 therein, then the Illinois Power Agency shall retain an
526	526
527	527
528	528
529	529
530	530
531	531	HB2862 - 14 - LRB104 10764 AAS 20844 b
532	532
533	533
534	534	HB2862- 15 -LRB104 10764 AAS 20844 b HB2862 - 15 - LRB104 10764 AAS 20844 b
535	535	HB2862 - 15 - LRB104 10764 AAS 20844 b
536	536	1 independent mediator to mediate the dispute between the
537	537	2 parties. If the parties are in agreement on the terms of the
538	538	3 contract, then the Illinois Power Agency shall approve the
539	539	4 contract. If after mediation the parties have failed to come
540	540	5 to agreement, then the Illinois Power Agency shall revise the
541	541	6 draft contract as necessary to confirm that the contract
542	542	7 contains only terms that are reasonable and equitable. The
543	543	8 Illinois Power Agency may, in its discretion, retain an
544	544	9 independent, qualified, and experienced expert to assist in
545	545	10 its obligations under this subsection (h). The Illinois Power
546	546	11 Agency shall adopt and make public policies detailing the
547	547	12 processes for retaining a mediator and an expert under this
548	548	13 subsection (h). Any mediator or expert retained under this
549	549	14 subsection (h) shall be retained no later than 60 days after
550	550	15 August 2, 2011.
551	551	16 The Illinois Power Agency shall complete all of its
552	552	17 responsibilities under this subsection (h) within 60 days
553	553	18 after August 2, 2011. The clean coal SNG facility shall pay a
554	554	19 reasonable fee as required by the Illinois Power Agency for
555	555	20 its services under this subsection (h) and shall pay the
556	556	21 mediator's and expert's reasonable fees, if any. A gas utility
557	557	22 and its customers shall have no obligation to reimburse the
558	558	23 clean coal SNG facility or the Illinois Power Agency of any
559	559	24 such costs.
560	560	25 Within 30 days after commercial production of SNG has
561	561	26 begun, the Commission shall initiate a review to determine
562	562
563	563
564	564
565	565
566	566
567	567	HB2862 - 15 - LRB104 10764 AAS 20844 b
568	568
569	569
570	570	HB2862- 16 -LRB104 10764 AAS 20844 b HB2862 - 16 - LRB104 10764 AAS 20844 b
571	571	HB2862 - 16 - LRB104 10764 AAS 20844 b
572	572	1 whether the final capitalized plant cost of the clean coal SNG
573	573	2 facility reflects actual incurred costs and whether the
574	574	3 incurred costs were reasonable. In determining the actual
575	575	4 incurred costs included in the final capitalized plant cost
576	576	5 and the reasonableness of those costs, the Commission may in
577	577	6 its discretion retain independent, qualified, and experienced
578	578	7 experts to assist in its determination. The expert shall not
579	579	8 own or control any direct or indirect interest in the clean
580	580	9 coal SNG facility and shall have no contractual relationship
581	581	10 with the clean coal SNG facility. If an expert is retained by
582	582	11 the Commission, then the clean coal SNG facility shall pay the
583	583	12 expert's reasonable fees. The fees shall not be passed on to a
584	584	13 utility or its customers. The Commission shall adopt and make
585	585	14 public a policy detailing the process for retaining experts
586	586	15 under this subsection (h).
587	587	16 Within 30 days after completion of its review, the
588	588	17 Commission shall initiate a formal proceeding on the final
589	589	18 capitalized plant cost of the clean coal SNG facility at which
590	590	19 comments and testimony may be submitted by any interested
591	591	20 parties and the public. If the Commission finds that the final
592	592	21 capitalized plant cost includes costs that were not actually
593	593	22 incurred or costs that were unreasonably incurred, then the
594	594	23 Commission shall disallow the amount of non-incurred or
595	595	24 unreasonable costs from the SNG price under contracts entered
596	596	25 into under this subsection (h). If the Commission disallows
597	597	26 any costs, then the Commission shall adjust the SNG price
598	598
599	599
600	600
601	601
602	602
603	603	HB2862 - 16 - LRB104 10764 AAS 20844 b
604	604
605	605
606	606	HB2862- 17 -LRB104 10764 AAS 20844 b HB2862 - 17 - LRB104 10764 AAS 20844 b
607	607	HB2862 - 17 - LRB104 10764 AAS 20844 b
608	608	1 using the price formula in the contract approved by the
609	609	2 Illinois Power Agency under this subsection (h) to reflect the
610	610	3 disallowed costs and shall enter an order specifying the
611	611	4 revised price. In addition, the Commission's order shall
612	612	5 direct the clean coal SNG facility to issue refunds of such
613	613	6 sums as shall represent the difference between actual gross
614	614	7 revenues and the gross revenue that would have been obtained
615	615	8 based upon the same volume, from the price revised by the
616	616	9 Commission. Any refund shall include interest calculated at a
617	617	10 rate determined by the Commission and shall be returned
618	618	11 according to procedures prescribed by the Commission.
619	619	12 Nothing in this subsection (h) shall preclude any party
620	620	13 affected by a decision of the Commission under this subsection
621	621	14 (h) from seeking judicial review of the Commission's decision.
622	622	15 (h-1) Any Illinois gas utility may enter into a sourcing
623	623	16 agreement for up to 30 years of supply with the clean coal SNG
624	624	17 brownfield facility if the clean coal SNG brownfield facility
625	625	18 has commenced construction. Any gas utility that is providing
626	626	19 service to more than 150,000 customers on July 13, 2011 (the
627	627	20 effective date of Public Act 97-096) shall either elect to
628	628	21 file biennial rate proceedings before the Commission in the
629	629	22 years 2012, 2014, and 2016 or enter into a sourcing agreement
630	630	23 or sourcing agreements with a clean coal SNG brownfield
631	631	24 facility with an initial term of 30 years for either (i) a
632	632	25 percentage of 43,500,000,000 cubic feet per year, such that
633	633	26 the utilities entering into sourcing agreements with the clean
634	634
635	635
636	636
637	637
638	638
639	639	HB2862 - 17 - LRB104 10764 AAS 20844 b
640	640
641	641
642	642	HB2862- 18 -LRB104 10764 AAS 20844 b HB2862 - 18 - LRB104 10764 AAS 20844 b
643	643	HB2862 - 18 - LRB104 10764 AAS 20844 b
644	644	1 coal SNG brownfield facility purchase 100%, allocated by total
645	645	2 therms sold to ultimate customers by each gas utility in 2008
646	646	3 or (ii) such lesser amount as may be available from the clean
647	647	4 coal SNG brownfield facility; provided that no utility shall
648	648	5 be required to purchase more than 42% of the projected annual
649	649	6 output of the clean coal SNG brownfield facility, with the
650	650	7 remainder of such utility's obligation to be divided
651	651	8 proportionately between the other utilities, and provided that
652	652	9 the Illinois Power Agency shall further adjust the allocation
653	653	10 only as required to take into account adverse consolidation,
654	654	11 derivative, or lease impacts to the balance sheet or income
655	655	12 statement of any gas utility.
656	656	13 A gas utility electing to file biennial rate proceedings
657	657	14 before the Commission must file a notice of its election with
658	658	15 the Commission within 60 days after July 13, 2011 or its right
659	659	16 to make the election is irrevocably waived. A gas utility
660	660	17 electing to file biennial rate proceedings shall make such
661	661	18 filings no later than August 1 of the years 2012, 2014, and
662	662	19 2016, consistent with all requirements of 83 Ill. Adm. Code
663	663	20 255 and 285 as though the gas utility were filing for an
664	664	21 increase in its rates, without regard to whether such filing
665	665	22 would produce an increase, a decrease, or no change in the gas
666	666	23 utility's rates, and notwithstanding any other provisions of
667	667	24 this Act, the Commission shall fully review the gas utility's
668	668	25 filing and shall issue its order in accordance with the
669	669	26 provisions of Section 9-201 of this Act, regardless of whether
670	670
671	671
672	672
673	673
674	674
675	675	HB2862 - 18 - LRB104 10764 AAS 20844 b
676	676
677	677
678	678	HB2862- 19 -LRB104 10764 AAS 20844 b HB2862 - 19 - LRB104 10764 AAS 20844 b
679	679	HB2862 - 19 - LRB104 10764 AAS 20844 b
680	680	1 the Commission has approved a formula rate for the gas
681	681	2 utility.
682	682	3 Within 15 days after July 13, 2011, the owner of the clean
683	683	4 coal SNG brownfield facility shall submit to the Illinois
684	684	5 Power Agency and each gas utility that is providing service to
685	685	6 more than 150,000 customers on July 13, 2011 a copy of a draft
686	686	7 sourcing agreement. Within 45 days after receipt of the draft
687	687	8 sourcing agreement, each such gas utility shall provide the
688	688	9 Illinois Power Agency and the owner of a clean coal SNG
689	689	10 brownfield facility with its comments and recommended
690	690	11 revisions to the draft sourcing agreement. Within 15 days
691	691	12 after the receipt of the gas utility's comments and
692	692	13 recommended revisions, the owner of the clean coal SNG
693	693	14 brownfield facility shall submit its responsive comments and a
694	694	15 further revised draft of the sourcing agreement to the
695	695	16 Illinois Power Agency. The Illinois Power Agency shall review
696	696	17 the draft sourcing agreement and comments.
697	697	18 If the parties to the sourcing agreement do not agree on
698	698	19 the terms therein, then the Illinois Power Agency shall retain
699	699	20 an independent mediator to mediate the dispute between the
700	700	21 parties. If the parties are in agreement on the terms of the
701	701	22 sourcing agreement, the Illinois Power Agency shall approve
702	702	23 the final draft sourcing agreement. If after mediation the
703	703	24 parties have failed to come to agreement, then the Illinois
704	704	25 Power Agency shall revise the draft sourcing agreement as
705	705	26 necessary to confirm that the final draft sourcing agreement
706	706
707	707
708	708
709	709
710	710
711	711	HB2862 - 19 - LRB104 10764 AAS 20844 b
712	712
713	713
714	714	HB2862- 20 -LRB104 10764 AAS 20844 b HB2862 - 20 - LRB104 10764 AAS 20844 b
715	715	HB2862 - 20 - LRB104 10764 AAS 20844 b
716	716	1 contains only terms that are reasonable and equitable. The
717	717	2 Illinois Power Agency shall adopt and make public a policy
718	718	3 detailing the process for retaining a mediator under this
719	719	4 subsection (h-1). Any mediator retained to assist with
720	720	5 mediating disputes between the parties regarding the sourcing
721	721	6 agreement shall be retained no later than 60 days after July
722	722	7 13, 2011.
723	723	8 Upon approval of a final draft agreement, the Illinois
724	724	9 Power Agency shall submit the final draft agreement to the
725	725	10 Capital Development Board and the Commission no later than 90
726	726	11 days after July 13, 2011. The gas utility and the clean coal
727	727	12 SNG brownfield facility shall pay a reasonable fee as required
728	728	13 by the Illinois Power Agency for its services under this
729	729	14 subsection (h-1) and shall pay the mediator's reasonable fees,
730	730	15 if any. The Illinois Power Agency shall adopt and make public a
731	731	16 policy detailing the process for retaining a mediator under
732	732	17 this Section.
733	733	18 The sourcing agreement between a gas utility and the clean
734	734	19 coal SNG brownfield facility shall contain the following
735	735	20 provisions:
736	736	21 (1) Any and all coal used in the gasification process
737	737	22 must be coal that has high volatile bituminous rank and
738	738	23 greater than 1.7 pounds of sulfur per million Btu content.
739	739	24 (2) Coal and petroleum coke are feedstocks for the
740	740	25 gasification process, with coal comprising at least 50% of
741	741	26 the total feedstock over the term of the sourcing
742	742
743	743
744	744
745	745
746	746
747	747	HB2862 - 20 - LRB104 10764 AAS 20844 b
748	748
749	749
750	750	HB2862- 21 -LRB104 10764 AAS 20844 b HB2862 - 21 - LRB104 10764 AAS 20844 b
751	751	HB2862 - 21 - LRB104 10764 AAS 20844 b
752	752	1 agreement unless the facility reasonably determines that
753	753	2 it is necessary to use additional petroleum coke to
754	754	3 deliver net consumer savings, in which case the facility
755	755	4 shall use coal for at least 35% of the total feedstock over
756	756	5 the term of any sourcing agreement and with the feedstocks
757	757	6 to be procured in accordance with requirements of Section
758	758	7 1-78 of the Illinois Power Agency Act.
759	759	8 (3) The sourcing agreement has an initial term that
760	760	9 once entered into terminates no more than 30 years after
761	761	10 the commencement of the commercial production of SNG at
762	762	11 the clean coal SNG brownfield facility.
763	763	12 (4) The clean coal SNG brownfield facility guarantees
764	764	13 a minimum of $100,000,000 in consumer savings to customers
765	765	14 of the utilities that have entered into sourcing
766	766	15 agreements with the clean coal SNG brownfield facility,
767	767	16 calculated in real 2010 dollars at the conclusion of the
768	768	17 term of the sourcing agreement by comparing the delivered
769	769	18 SNG price to the Chicago City-gate price on a weighted
770	770	19 daily basis for each day over the entire term of the
771	771	20 sourcing agreement, to be provided in accordance with
772	772	21 subsection (h-2) of this Section.
773	773	22 (5) Prior to the clean coal SNG brownfield facility
774	774	23 issuing a notice to proceed to construction, the clean
775	775	24 coal SNG brownfield facility shall establish a consumer
776	776	25 protection reserve account for the benefit of the
777	777	26 customers of the utilities that have entered into sourcing
778	778
779	779
780	780
781	781
782	782
783	783	HB2862 - 21 - LRB104 10764 AAS 20844 b
784	784
785	785
786	786	HB2862- 22 -LRB104 10764 AAS 20844 b HB2862 - 22 - LRB104 10764 AAS 20844 b
787	787	HB2862 - 22 - LRB104 10764 AAS 20844 b
788	788	1 agreements with the clean coal SNG brownfield facility
789	789	2 pursuant to this subsection (h-1), with cash principal in
790	790	3 the amount of $150,000,000. This cash principal shall only
791	791	4 be recoverable through the consumer protection reserve
792	792	5 account and not as a cost to be recovered in the delivered
793	793	6 SNG price pursuant to subsection (h-3) of this Section.
794	794	7 The consumer protection reserve account shall be
795	795	8 maintained and administered by an independent trustee that
796	796	9 is mutually agreed upon by the clean coal SNG brownfield
797	797	10 facility, the utilities, and the Commission in an
798	798	11 interest-bearing account in accordance with subsection
799	799	12 (h-2) of this Section.
800	800	13 "Consumer protection reserve account principal maximum
801	801	14 amount" shall mean the maximum amount of principal to be
802	802	15 maintained in the consumer protection reserve account.
803	803	16 During the first 2 years of operation of the facility,
804	804	17 there shall be no consumer protection reserve account
805	805	18 maximum amount. After the first 2 years of operation of
806	806	19 the facility, the consumer protection reserve account
807	807	20 maximum amount shall be $150,000,000. After 5 years of
808	808	21 operation, and every 5 years thereafter, the trustee shall
809	809	22 calculate the 5-year average balance of the consumer
810	810	23 protection reserve account. If the trustee determines that
811	811	24 during the prior 5 years the consumer protection reserve
812	812	25 account has had an average account balance of less than
813	813	26 $75,000,000, then the consumer protection reserve account
814	814
815	815
816	816
817	817
818	818
819	819	HB2862 - 22 - LRB104 10764 AAS 20844 b
820	820
821	821
822	822	HB2862- 23 -LRB104 10764 AAS 20844 b HB2862 - 23 - LRB104 10764 AAS 20844 b
823	823	HB2862 - 23 - LRB104 10764 AAS 20844 b
824	824	1 principal maximum amount shall be increased by $5,000,000.
825	825	2 If the trustee determines that during the prior 5 years
826	826	3 the consumer protection reserve account has had an average
827	827	4 account balance of more than $75,000,000, then the
828	828	5 consumer protection reserve account principal maximum
829	829	6 amount shall be decreased by $5,000,000.
830	830	7 (6) The clean coal SNG brownfield facility shall
831	831	8 identify and sell economically viable by-products produced
832	832	9 by the facility.
833	833	10 (7) Fifty percent of all additional net revenue,
834	834	11 defined as miscellaneous net revenue from products
835	835	12 produced by the facility and delivered during the month
836	836	13 after cost allowance for costs associated with additional
837	837	14 net revenue that are not otherwise recoverable pursuant to
838	838	15 subsection (h-3) of this Section, including net revenue
839	839	16 from sales of substitute natural gas derived from the
840	840	17 facility above the nameplate capacity of the facility and
841	841	18 other by-products produced by the facility, shall be
842	842	19 credited to the consumer protection reserve account
843	843	20 pursuant to subsection (h-2) of this Section.
844	844	21 (8) The delivered SNG price per million btu to be paid
845	845	22 monthly by the utility to the clean coal SNG brownfield
846	846	23 facility, which shall be based only upon the following:
847	847	24 (A) a capital recovery charge, operations and maintenance
848	848	25 costs, and sequestration costs, only to the extent
849	849	26 approved by the Commission pursuant to paragraphs (1),
850	850
851	851
852	852
853	853
854	854
855	855	HB2862 - 23 - LRB104 10764 AAS 20844 b
856	856
857	857
858	858	HB2862- 24 -LRB104 10764 AAS 20844 b HB2862 - 24 - LRB104 10764 AAS 20844 b
859	859	HB2862 - 24 - LRB104 10764 AAS 20844 b
860	860	1 (2), and (3) of subsection (h-3) of this Section; (B) the
861	861	2 actual delivered and processed fuel costs pursuant to
862	862	3 paragraph (4) of subsection (h-3) of this Section; (C)
863	863	4 actual costs of SNG transportation pursuant to paragraph
864	864	5 (6) of subsection (h-3) of this Section; (D) certain taxes
865	865	6 and fees imposed by the federal government, the State, or
866	866	7 any unit of local government as provided in paragraph (6)
867	867	8 of subsection (h-3) of this Section; and (E) the credit,
868	868	9 if any, from the consumer protection reserve account
869	869	10 pursuant to subsection (h-2) of this Section. The
870	870	11 delivered SNG price per million Btu shall proportionately
871	871	12 reflect these elements over the term of the sourcing
872	872	13 agreement.
873	873	14 (9) A formula to translate the recoverable costs and
874	874	15 charges under subsection (h-3) of this Section into the
875	875	16 delivered SNG price per million btu.
876	876	17 (10) Title to the SNG shall pass at a mutually
877	877	18 agreeable point in Illinois, and may provide that, rather
878	878	19 than the utility taking title to the SNG, a mutually
879	879	20 agreed upon third-party gas marketer pursuant to a
880	880	21 contract approved by the Illinois Power Agency or its
881	881	22 designee may take title to the SNG pursuant to an
882	882	23 agreement between the utility, the owner of the clean coal
883	883	24 SNG brownfield facility, and the third-party gas marketer.
884	884	25 (11) A utility may exit the sourcing agreement without
885	885	26 penalty if the clean coal SNG brownfield facility does not
886	886
887	887
888	888
889	889
890	890
891	891	HB2862 - 24 - LRB104 10764 AAS 20844 b
892	892
893	893
894	894	HB2862- 25 -LRB104 10764 AAS 20844 b HB2862 - 25 - LRB104 10764 AAS 20844 b
895	895	HB2862 - 25 - LRB104 10764 AAS 20844 b
896	896	1 commence construction by July 1, 2015.
897	897	2 (12) A utility is responsible to pay only the
898	898	3 Commission determined unit price cost of SNG that is
899	899	4 purchased by the utility. Nothing in the sourcing
900	900	5 agreement will obligate a utility to invest capital in a
901	901	6 clean coal SNG brownfield facility.
902	902	7 (13) The quality of SNG must, at a minimum, be
903	903	8 equivalent to the quality required for interstate pipeline
904	904	9 gas before a utility is required to accept and pay for SNG
905	905	10 gas.
906	906	11 (14) Nothing in the sourcing agreement will require a
907	907	12 utility to construct any facilities to accept delivery of
908	908	13 SNG. Provided, however, if a utility is required by law or
909	909	14 otherwise elects to connect the clean coal SNG brownfield
910	910	15 facility to an interstate pipeline, then the utility shall
911	911	16 be entitled to recover pursuant to its tariffs all just
912	912	17 and reasonable costs that are prudently incurred. Any
913	913	18 costs incurred by the utility to receive, deliver, manage,
914	914	19 or otherwise accommodate purchases under the SNG sourcing
915	915	20 agreement will be fully recoverable through a utility's
916	916	21 purchased gas adjustment clause rider mechanism in
917	917	22 conjunction with a SNG brownfield facility rider
918	918	23 mechanism. The SNG brownfield facility rider mechanism (A)
919	919	24 shall be applicable to all customers who receive
920	920	25 transportation service from the utility, (B) shall be
921	921	26 designed to have an equal percent impact on the
922	922
923	923
924	924
925	925
926	926
927	927	HB2862 - 25 - LRB104 10764 AAS 20844 b
928	928
929	929
930	930	HB2862- 26 -LRB104 10764 AAS 20844 b HB2862 - 26 - LRB104 10764 AAS 20844 b
931	931	HB2862 - 26 - LRB104 10764 AAS 20844 b
932	932	1 transportation services rates of each class of the
933	933	2 utility's customers, and (C) shall accurately reflect the
934	934	3 net consumer savings, if any, and above-market costs, if
935	935	4 any, associated with the utility receiving, delivering,
936	936	5 managing, or otherwise accommodating purchases under the
937	937	6 SNG sourcing agreement.
938	938	7 (15) Remedies for the clean coal SNG brownfield
939	939	8 facility's failure to deliver a designated amount for a
940	940	9 designated period.
941	941	10 (16) The clean coal SNG brownfield facility shall make
942	942	11 a good faith effort to ensure that an amount equal to not
943	943	12 less than 15% of the value of its prime construction
944	944	13 contract for the facility shall be established as a goal
945	945	14 to be awarded to minority-owned businesses, women-owned
946	946	15 businesses, and businesses owned by a person with a
947	947	16 disability; provided that at least 75% of the amount of
948	948	17 such total goal shall be for minority-owned businesses.
949	949	18 "Minority-owned business", "women-owned business", and
950	950	19 "business owned by a person with a disability" shall have
951	951	20 the meanings ascribed to them in Section 2 of the Business
952	952	21 Enterprise for Minorities, Women, and Persons with
953	953	22 Disabilities Act.
954	954	23 (17) Prior to the clean coal SNG brownfield facility
955	955	24 issuing a notice to proceed to construction, the clean
956	956	25 coal SNG brownfield facility shall file with the
957	957	26 Commission a certificate from an independent engineer that
958	958
959	959
960	960
961	961
962	962
963	963	HB2862 - 26 - LRB104 10764 AAS 20844 b
964	964
965	965
966	966	HB2862- 27 -LRB104 10764 AAS 20844 b HB2862 - 27 - LRB104 10764 AAS 20844 b
967	967	HB2862 - 27 - LRB104 10764 AAS 20844 b
968	968	1 the clean coal SNG brownfield facility has (A) obtained
969	969	2 all applicable State and federal environmental permits
970	970	3 required for construction; (B) obtained approval from the
971	971	4 Commission of a carbon capture and sequestration plan; and
972	972	5 (C) obtained all necessary permits required for
973	973	6 construction for the transportation and sequestration of
974	974	7 carbon dioxide as set forth in the Commission-approved
975	975	8 carbon capture and sequestration plan.
976	976	9 (h-2) Consumer protection reserve account. The clean coal
977	977	10 SNG brownfield facility shall guarantee a minimum of
978	978	11 $100,000,000 in consumer savings to customers of the utilities
979	979	12 that have entered into sourcing agreements with the clean coal
980	980	13 SNG brownfield facility, calculated in real 2010 dollars at
981	981	14 the conclusion of the term of the sourcing agreement by
982	982	15 comparing the delivered SNG price to the Chicago City-gate
983	983	16 price on a weighted daily basis for each day over the entire
984	984	17 term of the sourcing agreement. Prior to the clean coal SNG
985	985	18 brownfield facility issuing a notice to proceed to
986	986	19 construction, the clean coal SNG brownfield facility shall
987	987	20 establish a consumer protection reserve account for the
988	988	21 benefit of the retail customers of the utilities that have
989	989	22 entered into sourcing agreements with the clean coal SNG
990	990	23 brownfield facility pursuant to subsection (h-1), with cash
991	991	24 principal in the amount of $150,000,000. Such cash principal
992	992	25 shall only be recovered through the consumer protection
993	993	26 reserve account and not as a cost to be recovered in the
994	994
995	995
996	996
997	997
998	998
999	999	HB2862 - 27 - LRB104 10764 AAS 20844 b
1000	1000
1001	1001
1002	1002	HB2862- 28 -LRB104 10764 AAS 20844 b HB2862 - 28 - LRB104 10764 AAS 20844 b
1003	1003	HB2862 - 28 - LRB104 10764 AAS 20844 b
1004	1004	1 delivered SNG price pursuant to subsection (h-3) of this
1005	1005	2 Section. The consumer protection reserve account shall be
1006	1006	3 maintained and administered by an independent trustee that is
1007	1007	4 mutually agreed upon by the clean coal SNG brownfield
1008	1008	5 facility, the utilities, and the Commission in an
1009	1009	6 interest-bearing account in accordance with the following:
1010	1010	7 (1) The clean coal SNG brownfield facility monthly
1011	1011	8 shall calculate (A) the difference between the monthly
1012	1012	9 delivered SNG price and the Chicago City-gate price, by
1013	1013	10 comparing the delivered SNG price, which shall include the
1014	1014	11 cost of transportation to the delivery point, if any, to
1015	1015	12 the Chicago City-gate price on a weighted daily basis for
1016	1016	13 each day of the prior month based upon a mutually agreed
1017	1017	14 upon published index and (B) the overage amount, if any,
1018	1018	15 by calculating the annualized incremental additional cost,
1019	1019	16 if any, of the delivered SNG in excess of 2.015% of the
1020	1020	17 average annual inflation-adjusted amounts paid by all gas
1021	1021	18 distribution customers in connection with natural gas
1022	1022	19 service during the 5 years ending May 31, 2010.
1023	1023	20 (2) During the first 2 years of operation of the
1024	1024	21 facility:
1025	1025	22 (A) to the extent there is an overage amount, the
1026	1026	23 consumer protection reserve account shall be used to
1027	1027	24 provide a credit to reduce the SNG price by an amount
1028	1028	25 equal to the overage amount; and
1029	1029	26 (B) to the extent the monthly delivered SNG price
1030	1030
1031	1031
1032	1032
1033	1033
1034	1034
1035	1035	HB2862 - 28 - LRB104 10764 AAS 20844 b
1036	1036
1037	1037
1038	1038	HB2862- 29 -LRB104 10764 AAS 20844 b HB2862 - 29 - LRB104 10764 AAS 20844 b
1039	1039	HB2862 - 29 - LRB104 10764 AAS 20844 b
1040	1040	1 is less than or equal to the Chicago City-gate price,
1041	1041	2 the utility shall credit the difference between the
1042	1042	3 monthly delivered SNG price and the monthly Chicago
1043	1043	4 City-gate price, if any, to the consumer protection
1044	1044	5 reserve account. Such credit issued pursuant to this
1045	1045	6 paragraph (B) shall be deemed prudent and reasonable
1046	1046	7 and not subject to a Commission prudence review;
1047	1047	8 (3) After 2 years of operation of the facility, and
1048	1048	9 monthly, on an on-going basis, thereafter:
1049	1049	10 (A) to the extent that the monthly delivered SNG
1050	1050	11 price is less than or equal to the Chicago City-gate
1051	1051	12 price, calculated using the weighted average of the
1052	1052	13 daily Chicago City-gate price on a daily basis over
1053	1053	14 the entire month, the utility shall credit the
1054	1054	15 difference, if any, to the consumer protection reserve
1055	1055	16 account. Such credit issued pursuant to this
1056	1056	17 subparagraph (A) shall be deemed prudent and
1057	1057	18 reasonable and not subject to a Commission prudence
1058	1058	19 review;
1059	1059	20 (B) any amounts in the consumer protection reserve
1060	1060	21 account in excess of the consumer protection reserve
1061	1061	22 account principal maximum amount shall be distributed
1062	1062	23 as follows: (i) if retail customers have not realized
1063	1063	24 net consumer savings, calculated by comparing the
1064	1064	25 delivered SNG price to the weighted average of the
1065	1065	26 daily Chicago City-gate price on a daily basis over
1066	1066
1067	1067
1068	1068
1069	1069
1070	1070
1071	1071	HB2862 - 29 - LRB104 10764 AAS 20844 b
1072	1072
1073	1073
1074	1074	HB2862- 30 -LRB104 10764 AAS 20844 b HB2862 - 30 - LRB104 10764 AAS 20844 b
1075	1075	HB2862 - 30 - LRB104 10764 AAS 20844 b
1076	1076	1 the entire term of the sourcing agreement to date,
1077	1077	2 then 50% of any amounts in the consumer protection
1078	1078	3 reserve account in excess of the consumer protection
1079	1079	4 reserve account principal maximum shall be distributed
1080	1080	5 to the clean coal SNG brownfield facility, with the
1081	1081	6 remaining 50% of any such additional amounts being
1082	1082	7 credited to retail customers, and (ii) if retail
1083	1083	8 customers have realized net consumer savings, then
1084	1084	9 100% of any amounts in the consumer protection reserve
1085	1085	10 account in excess of the consumer protection reserve
1086	1086	11 account principal maximum shall be distributed to the
1087	1087	12 clean coal SNG brownfield facility; provided, however,
1088	1088	13 that under no circumstances shall the total cumulative
1089	1089	14 amount distributed to the clean coal SNG brownfield
1090	1090	15 facility under this subparagraph (B) exceed
1091	1091	16 $150,000,000;
1092	1092	17 (C) to the extent there is an overage amount,
1093	1093	18 after distributing the amounts pursuant to
1094	1094	19 subparagraph (B) of this paragraph (3), if any, the
1095	1095	20 consumer protection reserve account shall be used to
1096	1096	21 provide a credit to reduce the SNG price by an amount
1097	1097	22 equal to the overage amount;
1098	1098	23 (D) if retail customers have realized net consumer
1099	1099	24 savings, calculated by comparing the delivered SNG
1100	1100	25 price to the weighted average of the daily Chicago
1101	1101	26 City-gate price on a daily basis over the entire term
1102	1102
1103	1103
1104	1104
1105	1105
1106	1106
1107	1107	HB2862 - 30 - LRB104 10764 AAS 20844 b
1108	1108
1109	1109
1110	1110	HB2862- 31 -LRB104 10764 AAS 20844 b HB2862 - 31 - LRB104 10764 AAS 20844 b
1111	1111	HB2862 - 31 - LRB104 10764 AAS 20844 b
1112	1112	1 of the sourcing agreement to date, then after
1113	1113	2 distributing the amounts pursuant to subparagraphs (B)
1114	1114	3 and (C) of this paragraph (3), 50% of any additional
1115	1115	4 amounts in the consumer protection reserve account in
1116	1116	5 excess of the consumer protection reserve account
1117	1117	6 principal maximum shall be distributed to the clean
1118	1118	7 coal SNG brownfield facility, with the remaining 50%
1119	1119	8 of any such additional amounts being credited to
1120	1120	9 retail customers; provided, however, that if retail
1121	1121	10 customers have not realized such net consumer savings,
1122	1122	11 no such distribution shall be made to the clean coal
1123	1123	12 SNG brownfield facility, and 100% of such additional
1124	1124	13 amounts shall be credited to the retail customers to
1125	1125	14 the extent the consumer protection reserve account
1126	1126	15 exceeds the consumer protection reserve account
1127	1127	16 principal maximum amount.
1128	1128	17 (4) Fifty percent of all additional net revenue,
1129	1129	18 defined as miscellaneous net revenue after cost allowance
1130	1130	19 for costs associated with additional net revenue that are
1131	1131	20 not otherwise recoverable pursuant to subsection (h-3) of
1132	1132	21 this Section, including net revenue from sales of
1133	1133	22 substitute natural gas derived from the facility above the
1134	1134	23 nameplate capacity of the facility and other by-products
1135	1135	24 produced by the facility, shall be credited to the
1136	1136	25 consumer protection reserve account.
1137	1137	26 (5) At the conclusion of the term of the sourcing
1138	1138
1139	1139
1140	1140
1141	1141
1142	1142
1143	1143	HB2862 - 31 - LRB104 10764 AAS 20844 b
1144	1144
1145	1145
1146	1146	HB2862- 32 -LRB104 10764 AAS 20844 b HB2862 - 32 - LRB104 10764 AAS 20844 b
1147	1147	HB2862 - 32 - LRB104 10764 AAS 20844 b
1148	1148	1 agreement, to the extent retail customers have not saved
1149	1149	2 the minimum of $100,000,000 in consumer savings as
1150	1150	3 guaranteed in this subsection (h-2), amounts in the
1151	1151	4 consumer protection reserve account shall be credited to
1152	1152	5 retail customers to the extent the retail customers have
1153	1153	6 saved the minimum of $100,000,000; 50% of any additional
1154	1154	7 amounts in the consumer protection reserve account shall
1155	1155	8 be distributed to the company, and the remaining 50% shall
1156	1156	9 be distributed to retail customers.
1157	1157	10 (6) If, at the conclusion of the term of the sourcing
1158	1158	11 agreement, the customers have not saved the minimum
1159	1159	12 $100,000,000 in savings as guaranteed in this subsection
1160	1160	13 (h-2) and the consumer protection reserve account has been
1161	1161	14 depleted, then the clean coal SNG brownfield facility
1162	1162	15 shall be liable for any remaining amount owed to the
1163	1163	16 retail customers to the extent that the customers are
1164	1164	17 provided with the $100,000,000 in savings as guaranteed in
1165	1165	18 this subsection (h-2). The retail customers shall have
1166	1166	19 first priority in recovering that debt above any
1167	1167	20 creditors, except the original senior secured lender to
1168	1168	21 the extent that the original senior secured lender has any
1169	1169	22 senior secured debt outstanding, including any clean coal
1170	1170	23 SNG brownfield facility parent companies or affiliates.
1171	1171	24 (7) The clean coal SNG brownfield facility, the
1172	1172	25 utilities, and the trustee shall work together to take
1173	1173	26 commercially reasonable steps to minimize the tax impact
1174	1174
1175	1175
1176	1176
1177	1177
1178	1178
1179	1179	HB2862 - 32 - LRB104 10764 AAS 20844 b
1180	1180
1181	1181
1182	1182	HB2862- 33 -LRB104 10764 AAS 20844 b HB2862 - 33 - LRB104 10764 AAS 20844 b
1183	1183	HB2862 - 33 - LRB104 10764 AAS 20844 b
1184	1184	1 of these transactions, while preserving the consumer
1185	1185	2 benefits.
1186	1186	3 (8) The clean coal SNG brownfield facility shall each
1187	1187	4 month, starting in the facility's first year of commercial
1188	1188	5 operation, file with the Commission, in such form as the
1189	1189	6 Commission shall require, a report as to the consumer
1190	1190	7 protection reserve account. The monthly report must
1191	1191	8 contain the following information:
1192	1192	9 (A) the extent the monthly delivered SNG price is
1193	1193	10 greater than, less than, or equal to the Chicago
1194	1194	11 City-gate price;
1195	1195	12 (B) the amount credited or debited to the consumer
1196	1196	13 protection reserve account during the month;
1197	1197	14 (C) the amounts credited to consumers and
1198	1198	15 distributed to the clean coal SNG brownfield facility
1199	1199	16 during the month;
1200	1200	17 (D) the total amount of the consumer protection
1201	1201	18 reserve account at the beginning and end of the month;
1202	1202	19 (E) the total amount of consumer savings to date;
1203	1203	20 (F) a confidential summary of the inputs used to
1204	1204	21 calculate the additional net revenue; and
1205	1205	22 (G) any other additional information the
1206	1206	23 Commission shall require.
1207	1207	24 When any report is erroneous or defective or appears
1208	1208	25 to the Commission to be erroneous or defective, the
1209	1209	26 Commission may notify the clean coal SNG brownfield
1210	1210
1211	1211
1212	1212
1213	1213
1214	1214
1215	1215	HB2862 - 33 - LRB104 10764 AAS 20844 b
1216	1216
1217	1217
1218	1218	HB2862- 34 -LRB104 10764 AAS 20844 b HB2862 - 34 - LRB104 10764 AAS 20844 b
1219	1219	HB2862 - 34 - LRB104 10764 AAS 20844 b
1220	1220	1 facility to amend the report within 30 days, and, before
1221	1221	2 or after the termination of the 30-day period, the
1222	1222	3 Commission may examine the trustee of the consumer
1223	1223	4 protection reserve account or the officers, agents,
1224	1224	5 employees, books, records, or accounts of the clean coal
1225	1225	6 SNG brownfield facility and correct such items in the
1226	1226	7 report as upon such examination the Commission may find
1227	1227	8 defective or erroneous. All reports shall be under oath.
1228	1228	9 All reports made to the Commission by the clean coal
1229	1229	10 SNG brownfield facility and the contents of the reports
1230	1230	11 shall be open to public inspection and shall be deemed a
1231	1231	12 public record under the Freedom of Information Act. Such
1232	1232	13 reports shall be preserved in the office of the
1233	1233	14 Commission. The Commission shall publish an annual summary
1234	1234	15 of the reports prior to February 1 of the following year.
1235	1235	16 The annual summary shall be made available to the public
1236	1236	17 on the Commission's website and shall be submitted to the
1237	1237	18 General Assembly.
1238	1238	19 Any facility that fails to file a report required
1239	1239	20 under this paragraph (8) to the Commission within the time
1240	1240	21 specified or to make specific answer to any question
1241	1241	22 propounded by the Commission within 30 days from the time
1242	1242	23 it is lawfully required to do so, or within such further
1243	1243	24 time not to exceed 90 days as may in its discretion be
1244	1244	25 allowed by the Commission, shall pay a penalty of $500 to
1245	1245	26 the Commission for each day it is in default.
1246	1246
1247	1247
1248	1248
1249	1249
1250	1250
1251	1251	HB2862 - 34 - LRB104 10764 AAS 20844 b
1252	1252
1253	1253
1254	1254	HB2862- 35 -LRB104 10764 AAS 20844 b HB2862 - 35 - LRB104 10764 AAS 20844 b
1255	1255	HB2862 - 35 - LRB104 10764 AAS 20844 b
1256	1256	1 Any person who willfully makes any false report to the
1257	1257	2 Commission or to any member, officer, or employee thereof,
1258	1258	3 any person who willfully in a report withholds or fails to
1259	1259	4 provide material information to which the Commission is
1260	1260	5 entitled under this paragraph (8) and which information is
1261	1261	6 either required to be filed by statute, rule, regulation,
1262	1262	7 order, or decision of the Commission or has been requested
1263	1263	8 by the Commission, and any person who willfully aids or
1264	1264	9 abets such person shall be guilty of a Class A
1265	1265	10 misdemeanor.
1266	1266	11 (h-3) Recoverable costs and revenue by the clean coal SNG
1267	1267	12 brownfield facility.
1268	1268	13 (1) A capital recovery charge approved by the
1269	1269	14 Commission shall be recoverable by the clean coal SNG
1270	1270	15 brownfield facility under a sourcing agreement. The
1271	1271	16 capital recovery charge shall be comprised of capital
1272	1272	17 costs and a reasonable rate of return. "Capital costs"
1273	1273	18 means costs to be incurred in connection with the
1274	1274	19 construction and development of a facility, as defined in
1275	1275	20 Section 1-10 of the Illinois Power Agency Act, and such
1276	1276	21 other costs as the Capital Development Board deems
1277	1277	22 appropriate to be recovered in the capital recovery
1278	1278	23 charge.
1279	1279	24 (A) Capital costs. The Capital Development Board
1280	1280	25 shall calculate a range of capital costs that it
1281	1281	26 believes would be reasonable for the clean coal SNG
1282	1282
1283	1283
1284	1284
1285	1285
1286	1286
1287	1287	HB2862 - 35 - LRB104 10764 AAS 20844 b
1288	1288
1289	1289
1290	1290	HB2862- 36 -LRB104 10764 AAS 20844 b HB2862 - 36 - LRB104 10764 AAS 20844 b
1291	1291	HB2862 - 36 - LRB104 10764 AAS 20844 b
1292	1292	1 brownfield facility to recover under the sourcing
1293	1293	2 agreement. In making this determination, the Capital
1294	1294	3 Development Board shall review the facility cost
1295	1295	4 report, if any, of the clean coal SNG brownfield
1296	1296	5 facility, adjusting the results based on the change in
1297	1297	6 the Annual Consumer Price Index for All Urban
1298	1298	7 Consumers for the Midwest Region as published in April
1299	1299	8 by the United States Department of Labor, Bureau of
1300	1300	9 Labor Statistics, the final draft of the sourcing
1301	1301	10 agreement, and the rate of return approved by the
1302	1302	11 Commission. In addition, the Capital Development Board
1303	1303	12 may consult as much as it deems necessary with the
1304	1304	13 clean coal SNG brownfield facility and conduct
1305	1305	14 whatever research and investigation it deems
1306	1306	15 necessary.
1307	1307	16 The Capital Development Board shall retain an
1308	1308	17 engineering expert to assist in determining both the
1309	1309	18 range of capital costs and the range of operations and
1310	1310	19 maintenance costs that it believes would be reasonable
1311	1311	20 for the clean coal SNG brownfield facility to recover
1312	1312	21 under the sourcing agreement. Provided, however, that
1313	1313	22 such expert shall: (i) not have been involved in the
1314	1314	23 clean coal SNG brownfield facility's facility cost
1315	1315	24 report, if any, (ii) not own or control any direct or
1316	1316	25 indirect interest in the initial clean coal facility,
1317	1317	26 and (iii) have no contractual relationship with the
1318	1318
1319	1319
1320	1320
1321	1321
1322	1322
1323	1323	HB2862 - 36 - LRB104 10764 AAS 20844 b
1324	1324
1325	1325
1326	1326	HB2862- 37 -LRB104 10764 AAS 20844 b HB2862 - 37 - LRB104 10764 AAS 20844 b
1327	1327	HB2862 - 37 - LRB104 10764 AAS 20844 b
1328	1328	1 clean coal SNG brownfield facility. In order to
1329	1329	2 qualify as an independent expert, a person or company
1330	1330	3 must have:
1331	1331	4 (i) direct previous experience conducting
1332	1332	5 front-end engineering and design studies for
1333	1333	6 large-scale energy facilities and administering
1334	1334	7 large-scale energy operations and maintenance
1335	1335	8 contracts, which may be particularized to the
1336	1336	9 specific type of financing associated with the
1337	1337	10 clean coal SNG brownfield facility;
1338	1338	11 (ii) an advanced degree in economics,
1339	1339	12 mathematics, engineering, or a related area of
1340	1340	13 study;
1341	1341	14 (iii) ten years of experience in the energy
1342	1342	15 sector, including construction and risk management
1343	1343	16 experience;
1344	1344	17 (iv) expertise in assisting companies with
1345	1345	18 obtaining financing for large-scale energy
1346	1346	19 projects, which may be particularized to the
1347	1347	20 specific type of financing associated with the
1348	1348	21 clean coal SNG brownfield facility;
1349	1349	22 (v) expertise in operations and maintenance
1350	1350	23 which may be particularized to the specific type
1351	1351	24 of operations and maintenance associated with the
1352	1352	25 clean coal SNG brownfield facility;
1353	1353	26 (vi) expertise in credit and contract
1354	1354
1355	1355
1356	1356
1357	1357
1358	1358
1359	1359	HB2862 - 37 - LRB104 10764 AAS 20844 b
1360	1360
1361	1361
1362	1362	HB2862- 38 -LRB104 10764 AAS 20844 b HB2862 - 38 - LRB104 10764 AAS 20844 b
1363	1363	HB2862 - 38 - LRB104 10764 AAS 20844 b
1364	1364	1 protocols;
1365	1365	2 (vii) adequate resources to perform and
1366	1366	3 fulfill the required functions and
1367	1367	4 responsibilities; and
1368	1368	5 (viii) the absence of a conflict of interest
1369	1369	6 and inappropriate bias for or against an affected
1370	1370	7 gas utility or the clean coal SNG brownfield
1371	1371	8 facility.
1372	1372	9 The clean coal SNG brownfield facility and the
1373	1373	10 Illinois Power Agency shall cooperate with the Capital
1374	1374	11 Development Board in any investigation it deems
1375	1375	12 necessary. The Capital Development Board shall make
1376	1376	13 its final determination of the range of capital costs
1377	1377	14 confidentially and shall submit that range to the
1378	1378	15 Commission in a confidential filing within 120 days
1379	1379	16 after July 13, 2011 (the effective date of Public Act
1380	1380	17 97-096). The clean coal SNG brownfield facility shall
1381	1381	18 submit to the Commission its estimate of the capital
1382	1382	19 costs to be recovered under the sourcing agreement.
1383	1383	20 Only after the clean coal SNG brownfield facility has
1384	1384	21 submitted this estimate shall the Commission publicly
1385	1385	22 announce the range of capital costs submitted by the
1386	1386	23 Capital Development Board.
1387	1387	24 In the event that the estimate submitted by the
1388	1388	25 clean coal SNG brownfield facility is within or below
1389	1389	26 the range submitted by the Capital Development Board,
1390	1390
1391	1391
1392	1392
1393	1393
1394	1394
1395	1395	HB2862 - 38 - LRB104 10764 AAS 20844 b
1396	1396
1397	1397
1398	1398	HB2862- 39 -LRB104 10764 AAS 20844 b HB2862 - 39 - LRB104 10764 AAS 20844 b
1399	1399	HB2862 - 39 - LRB104 10764 AAS 20844 b
1400	1400	1 the clean coal SNG brownfield facility's estimate
1401	1401	2 shall be approved by the Commission as the amount of
1402	1402	3 capital costs to be recovered under the sourcing
1403	1403	4 agreement. In the event that the estimate submitted by
1404	1404	5 the clean coal SNG brownfield facility is above the
1405	1405	6 range submitted by the Capital Development Board, the
1406	1406	7 amount of capital costs at the lowest end of the range
1407	1407	8 submitted by the Capital Development Board shall be
1408	1408	9 approved by the Commission as the amount of capital
1409	1409	10 costs to be recovered under the sourcing agreement.
1410	1410	11 Within 15 days after the Capital Development Board has
1411	1411	12 submitted its range and the clean coal SNG brownfield
1412	1412	13 facility has submitted its estimate, the Commission
1413	1413	14 shall approve the capital costs for the clean coal SNG
1414	1414	15 brownfield facility.
1415	1415	16 The Capital Development Board shall monitor the
1416	1416	17 construction of the clean coal SNG brownfield facility
1417	1417	18 for the full duration of construction to assess
1418	1418	19 potential cost overruns. The Capital Development
1419	1419	20 Board, in its discretion, may retain an expert to
1420	1420	21 facilitate such monitoring. The clean coal SNG
1421	1421	22 brownfield facility shall pay a reasonable fee as
1422	1422	23 required by the Capital Development Board for the
1423	1423	24 Capital Development Board's services under this
1424	1424	25 subsection (h-3) to be deposited into the Capital
1425	1425	26 Development Board Revolving Fund, and such fee shall
1426	1426
1427	1427
1428	1428
1429	1429
1430	1430
1431	1431	HB2862 - 39 - LRB104 10764 AAS 20844 b
1432	1432
1433	1433
1434	1434	HB2862- 40 -LRB104 10764 AAS 20844 b HB2862 - 40 - LRB104 10764 AAS 20844 b
1435	1435	HB2862 - 40 - LRB104 10764 AAS 20844 b
1436	1436	1 not be passed through to a utility or its customers. If
1437	1437	2 an expert is retained by the Capital Development Board
1438	1438	3 for monitoring of construction, then the clean coal
1439	1439	4 SNG brownfield facility must pay for the expert's
1440	1440	5 reasonable fees and such costs shall not be passed
1441	1441	6 through to a utility or its customers.
1442	1442	7 (B) Rate of Return. No later than 30 days after the
1443	1443	8 date on which the Illinois Power Agency submits a
1444	1444	9 final draft sourcing agreement, the Commission shall
1445	1445	10 hold a public hearing to determine the rate of return
1446	1446	11 to be recovered under the sourcing agreement. Rate of
1447	1447	12 return shall be comprised of the clean coal SNG
1448	1448	13 brownfield facility's actual cost of debt, including
1449	1449	14 mortgage-style amortization, and a reasonable return
1450	1450	15 on equity. The Commission shall post notice of the
1451	1451	16 hearing on its website no later than 10 days prior to
1452	1452	17 the date of the hearing. The Commission shall provide
1453	1453	18 the public and all interested parties, including the
1454	1454	19 gas utilities, the Attorney General, and the Illinois
1455	1455	20 Power Agency, an opportunity to be heard.
1456	1456	21 In determining the return on equity, the
1457	1457	22 Commission shall select a commercially reasonable
1458	1458	23 return on equity taking into account the return on
1459	1459	24 equity being received by developers of similar
1460	1460	25 facilities in or outside of Illinois, the need to
1461	1461	26 balance an incentive for clean-coal technology with
1462	1462
1463	1463
1464	1464
1465	1465
1466	1466
1467	1467	HB2862 - 40 - LRB104 10764 AAS 20844 b
1468	1468
1469	1469
1470	1470	HB2862- 41 -LRB104 10764 AAS 20844 b HB2862 - 41 - LRB104 10764 AAS 20844 b
1471	1471	HB2862 - 41 - LRB104 10764 AAS 20844 b
1472	1472	1 the need to protect ratepayers from high gas prices,
1473	1473	2 the risks being borne by the clean coal SNG brownfield
1474	1474	3 facility in the final draft sourcing agreement, and
1475	1475	4 any other information that the Commission may deem
1476	1476	5 relevant. The Commission may establish a return on
1477	1477	6 equity that varies with the amount of savings, if any,
1478	1478	7 to customers during the term of the sourcing
1479	1479	8 agreement, comparing the delivered SNG price to a
1480	1480	9 daily weighted average price of natural gas, based
1481	1481	10 upon an index. The Illinois Power Agency shall
1482	1482	11 recommend a return on equity to the Commission using
1483	1483	12 the same criteria. Within 60 days after receiving the
1484	1484	13 final draft sourcing agreement from the Illinois Power
1485	1485	14 Agency, the Commission shall approve the rate of
1486	1486	15 return for the clean coal brownfield facility. Within
1487	1487	16 30 days after obtaining debt financing for the clean
1488	1488	17 coal SNG brownfield facility, the clean coal SNG
1489	1489	18 brownfield facility shall file a notice with the
1490	1490	19 Commission identifying the actual cost of debt.
1491	1491	20 (2) Operations and maintenance costs approved by the
1492	1492	21 Commission shall be recoverable by the clean coal SNG
1493	1493	22 brownfield facility under the sourcing agreement. The
1494	1494	23 operations and maintenance costs mean costs that have been
1495	1495	24 incurred for the administration, supervision, operation,
1496	1496	25 maintenance, preservation, and protection of the clean
1497	1497	26 coal SNG brownfield facility's physical plant.
1498	1498
1499	1499
1500	1500
1501	1501
1502	1502
1503	1503	HB2862 - 41 - LRB104 10764 AAS 20844 b
1504	1504
1505	1505
1506	1506	HB2862- 42 -LRB104 10764 AAS 20844 b HB2862 - 42 - LRB104 10764 AAS 20844 b
1507	1507	HB2862 - 42 - LRB104 10764 AAS 20844 b
1508	1508	1 The Capital Development Board shall calculate a range
1509	1509	2 of operations and maintenance costs that it believes would
1510	1510	3 be reasonable for the clean coal SNG brownfield facility
1511	1511	4 to recover under the sourcing agreement, incorporating an
1512	1512	5 inflation index or combination of inflation indices to
1513	1513	6 most accurately reflect the actual costs of operating the
1514	1514	7 clean coal SNG brownfield facility. In making this
1515	1515	8 determination, the Capital Development Board shall review
1516	1516	9 the facility cost report, if any, of the clean coal SNG
1517	1517	10 brownfield facility, adjusting the results for inflation
1518	1518	11 based on the change in the Annual Consumer Price Index for
1519	1519	12 All Urban Consumers for the Midwest Region as published in
1520	1520	13 April by the United States Department of Labor, Bureau of
1521	1521	14 Labor Statistics, the final draft of the sourcing
1522	1522	15 agreement, and the rate of return approved by the
1523	1523	16 Commission. In addition, the Capital Development Board may
1524	1524	17 consult as much as it deems necessary with the clean coal
1525	1525	18 SNG brownfield facility and conduct whatever research and
1526	1526	19 investigation it deems necessary. As set forth in
1527	1527	20 subparagraph (A) of paragraph (1) of this subsection
1528	1528	21 (h-3), the Capital Development Board shall retain an
1529	1529	22 independent engineering expert to assist in determining
1530	1530	23 both the range of operations and maintenance costs that it
1531	1531	24 believes would be reasonable for the clean coal SNG
1532	1532	25 brownfield facility to recover under the sourcing
1533	1533	26 agreement. The clean coal SNG brownfield facility and the
1534	1534
1535	1535
1536	1536
1537	1537
1538	1538
1539	1539	HB2862 - 42 - LRB104 10764 AAS 20844 b
1540	1540
1541	1541
1542	1542	HB2862- 43 -LRB104 10764 AAS 20844 b HB2862 - 43 - LRB104 10764 AAS 20844 b
1543	1543	HB2862 - 43 - LRB104 10764 AAS 20844 b
1544	1544	1 Illinois Power Agency shall cooperate with the Capital
1545	1545	2 Development Board in any investigation it deems necessary.
1546	1546	3 The Capital Development Board shall make its final
1547	1547	4 determination of the range of operations and maintenance
1548	1548	5 costs confidentially and shall submit that range to the
1549	1549	6 Commission in a confidential filing within 120 days after
1550	1550	7 July 13, 2011.
1551	1551	8 The clean coal SNG brownfield facility shall submit to
1552	1552	9 the Commission its estimate of the operations and
1553	1553	10 maintenance costs to be recovered under the sourcing
1554	1554	11 agreement. Only after the clean coal SNG brownfield
1555	1555	12 facility has submitted this estimate shall the Commission
1556	1556	13 publicly announce the range of operations and maintenance
1557	1557	14 costs submitted by the Capital Development Board. In the
1558	1558	15 event that the estimate submitted by the clean coal SNG
1559	1559	16 brownfield facility is within or below the range submitted
1560	1560	17 by the Capital Development Board, the clean coal SNG
1561	1561	18 brownfield facility's estimate shall be approved by the
1562	1562	19 Commission as the amount of operations and maintenance
1563	1563	20 costs to be recovered under the sourcing agreement. In the
1564	1564	21 event that the estimate submitted by the clean coal SNG
1565	1565	22 brownfield facility is above the range submitted by the
1566	1566	23 Capital Development Board, the amount of operations and
1567	1567	24 maintenance costs at the lowest end of the range submitted
1568	1568	25 by the Capital Development Board shall be approved by the
1569	1569	26 Commission as the amount of operations and maintenance
1570	1570
1571	1571
1572	1572
1573	1573
1574	1574
1575	1575	HB2862 - 43 - LRB104 10764 AAS 20844 b
1576	1576
1577	1577
1578	1578	HB2862- 44 -LRB104 10764 AAS 20844 b HB2862 - 44 - LRB104 10764 AAS 20844 b
1579	1579	HB2862 - 44 - LRB104 10764 AAS 20844 b
1580	1580	1 costs to be recovered under the sourcing agreement. Within
1581	1581	2 15 days after the Capital Development Board has submitted
1582	1582	3 its range and the clean coal SNG brownfield facility has
1583	1583	4 submitted its estimate, the Commission shall approve the
1584	1584	5 operations and maintenance costs for the clean coal SNG
1585	1585	6 brownfield facility.
1586	1586	7 The clean coal SNG brownfield facility shall pay for
1587	1587	8 the independent engineering expert's reasonable fees and
1588	1588	9 such costs shall not be passed through to a utility or its
1589	1589	10 customers. The clean coal SNG brownfield facility shall
1590	1590	11 pay a reasonable fee as required by the Capital
1591	1591	12 Development Board for the Capital Development Board's
1592	1592	13 services under this subsection (h-3) to be deposited into
1593	1593	14 the Capital Development Board Revolving Fund, and such fee
1594	1594	15 shall not be passed through to a utility or its customers.
1595	1595	16 (3) Sequestration costs approved by the Commission
1596	1596	17 shall be recoverable by the clean coal SNG brownfield
1597	1597	18 facility. "Sequestration costs" means costs to be incurred
1598	1598	19 by the clean coal SNG brownfield facility in accordance
1599	1599	20 with its Commission-approved carbon capture and
1600	1600	21 sequestration plan to:
1601	1601	22 (A) capture carbon dioxide;
1602	1602	23 (B) build, operate, and maintain a sequestration
1603	1603	24 site in which carbon dioxide may be injected;
1604	1604	25 (C) build, operate, and maintain a carbon dioxide
1605	1605	26 pipeline; and
1606	1606
1607	1607
1608	1608
1609	1609
1610	1610
1611	1611	HB2862 - 44 - LRB104 10764 AAS 20844 b
1612	1612
1613	1613
1614	1614	HB2862- 45 -LRB104 10764 AAS 20844 b HB2862 - 45 - LRB104 10764 AAS 20844 b
1615	1615	HB2862 - 45 - LRB104 10764 AAS 20844 b
1616	1616	1 (D) transport the carbon dioxide to the
1617	1617	2 sequestration site or a pipeline.
1618	1618	3 The Commission shall assess the prudency of the
1619	1619	4 sequestration costs for the clean coal SNG brownfield
1620	1620	5 facility before construction commences at the
1621	1621	6 sequestration site or pipeline. Any revenues the clean
1622	1622	7 coal SNG brownfield facility receives as a result of the
1623	1623	8 capture, transportation, or sequestration of carbon
1624	1624	9 dioxide shall be first credited against all sequestration
1625	1625	10 costs, with the positive balance, if any, treated as
1626	1626	11 additional net revenue.
1627	1627	12 The Commission may, in its discretion, retain an
1628	1628	13 expert to assist in its review of sequestration costs. The
1629	1629	14 clean coal SNG brownfield facility shall pay for the
1630	1630	15 expert's reasonable fees if an expert is retained by the
1631	1631	16 Commission, and such costs shall not be passed through to
1632	1632	17 a utility or its customers. Once made, the Commission's
1633	1633	18 determination of the amount of recoverable sequestration
1634	1634	19 costs shall not be increased unless the clean coal SNG
1635	1635	20 brownfield facility can show by clear and convincing
1636	1636	21 evidence that (i) the costs were not reasonably
1637	1637	22 foreseeable; (ii) the costs were due to circumstances
1638	1638	23 beyond the clean coal SNG brownfield facility's control;
1639	1639	24 and (iii) the clean coal SNG brownfield facility took all
1640	1640	25 reasonable steps to mitigate the costs. If the Commission
1641	1641	26 determines that sequestration costs may be increased, the
1642	1642
1643	1643
1644	1644
1645	1645
1646	1646
1647	1647	HB2862 - 45 - LRB104 10764 AAS 20844 b
1648	1648
1649	1649
1650	1650	HB2862- 46 -LRB104 10764 AAS 20844 b HB2862 - 46 - LRB104 10764 AAS 20844 b
1651	1651	HB2862 - 46 - LRB104 10764 AAS 20844 b
1652	1652	1 Commission shall provide for notice and a public hearing
1653	1653	2 for approval of the increased sequestration costs.
1654	1654	3 (4) Actual delivered and processed fuel costs shall be
1655	1655	4 set by the Illinois Power Agency through a SNG feedstock
1656	1656	5 procurement, pursuant to Sections 1-20, 1-77, and 1-78 of
1657	1657	6 the Illinois Power Agency Act, to be performed at least
1658	1658	7 every 5 years and purchased by the clean coal SNG
1659	1659	8 brownfield facility pursuant to feedstock procurement
1660	1660	9 contracts developed by the Illinois Power Agency, with
1661	1661	10 coal comprising at least 50% of the total feedstock over
1662	1662	11 the term of the sourcing agreement and petroleum coke
1663	1663	12 comprising the remainder of the SNG feedstock. If the
1664	1664	13 Commission fails to approve a feedstock procurement plan
1665	1665	14 or fails to approve the results of a feedstock procurement
1666	1666	15 event, then the fuel shall be purchased by the company
1667	1667	16 month-by-month on the spot market and those actual
1668	1668	17 delivered and processed fuel costs shall be recoverable
1669	1669	18 under the sourcing agreement. If a supplier defaults under
1670	1670	19 the terms of a procurement contract, then the Illinois
1671	1671	20 Power Agency shall immediately initiate a feedstock
1672	1672	21 procurement process to obtain a replacement supply, and,
1673	1673	22 prior to the conclusion of that process, fuel shall be
1674	1674	23 purchased by the company month-by-month on the spot market
1675	1675	24 and those actual delivered and processed fuel costs shall
1676	1676	25 be recoverable under the sourcing agreement.
1677	1677	26 (5) Taxes and fees imposed by the federal government,
1678	1678
1679	1679
1680	1680
1681	1681
1682	1682
1683	1683	HB2862 - 46 - LRB104 10764 AAS 20844 b
1684	1684
1685	1685
1686	1686	HB2862- 47 -LRB104 10764 AAS 20844 b HB2862 - 47 - LRB104 10764 AAS 20844 b
1687	1687	HB2862 - 47 - LRB104 10764 AAS 20844 b
1688	1688	1 the State, or any unit of local government applicable to
1689	1689	2 the clean coal SNG brownfield facility, excluding income
1690	1690	3 tax, shall be recoverable by the clean coal SNG brownfield
1691	1691	4 facility under the sourcing agreement to the extent such
1692	1692	5 taxes and fees were not applicable to the facility on July
1693	1693	6 13, 2011.
1694	1694	7 (6) The actual transportation costs, in accordance
1695	1695	8 with the applicable utility's tariffs, and third-party
1696	1696	9 marketer costs incurred by the company, if any, associated
1697	1697	10 with transporting the SNG from the clean coal SNG
1698	1698	11 brownfield facility to the Chicago City-gate to sell such
1699	1699	12 SNG into the natural gas markets shall be recoverable
1700	1700	13 under the sourcing agreement.
1701	1701	14 (7) Unless otherwise provided, within 30 days after a
1702	1702	15 decision of the Commission on recoverable costs under this
1703	1703	16 Section, any interested party to the Commission's decision
1704	1704	17 may apply for a rehearing with respect to the decision.
1705	1705	18 The Commission shall receive and consider the application
1706	1706	19 for rehearing and shall grant or deny the application in
1707	1707	20 whole or in part within 20 days after the date of the
1708	1708	21 receipt of the application by the Commission. If no
1709	1709	22 rehearing is applied for within the required 30 days or an
1710	1710	23 application for rehearing is denied, then the Commission
1711	1711	24 decision shall be final. If an application for rehearing
1712	1712	25 is granted, then the Commission shall hold a rehearing
1713	1713	26 within 30 days after granting the application. The
1714	1714
1715	1715
1716	1716
1717	1717
1718	1718
1719	1719	HB2862 - 47 - LRB104 10764 AAS 20844 b
1720	1720
1721	1721
1722	1722	HB2862- 48 -LRB104 10764 AAS 20844 b HB2862 - 48 - LRB104 10764 AAS 20844 b
1723	1723	HB2862 - 48 - LRB104 10764 AAS 20844 b
1724	1724	1 decision of the Commission upon rehearing shall be final.
1725	1725	2 Any person affected by a decision of the Commission
1726	1726	3 under this subsection (h-3) may have the decision reviewed
1727	1727	4 only under and in accordance with the Administrative
1728	1728	5 Review Law. Unless otherwise provided, the provisions of
1729	1729	6 the Administrative Review Law, all amendments and
1730	1730	7 modifications to that Law, and the rules adopted pursuant
1731	1731	8 to that Law shall apply to and govern all proceedings for
1732	1732	9 the judicial review of final administrative decisions of
1733	1733	10 the Commission under this subsection (h-3). The term
1734	1734	11 "administrative decision" is defined as in Section 3-101
1735	1735	12 of the Code of Civil Procedure.
1736	1736	13 (8) The Capital Development Board shall adopt and make
1737	1737	14 public a policy detailing the process for retaining
1738	1738	15 experts under this Section. Any experts retained to assist
1739	1739	16 with calculating the range of capital costs or operations
1740	1740	17 and maintenance costs shall be retained no later than 45
1741	1741	18 days after July 13, 2011.
1742	1742	19 (h-4) No later than 90 days after the Illinois Power
1743	1743	20 Agency submits the final draft sourcing agreement pursuant to
1744	1744	21 subsection (h-1), the Commission shall approve a sourcing
1745	1745	22 agreement containing (i) the capital costs, rate of return,
1746	1746	23 and operations and maintenance costs established pursuant to
1747	1747	24 subsection (h-3) and (ii) all other terms and conditions,
1748	1748	25 rights, provisions, exceptions, and limitations contained in
1749	1749	26 the final draft sourcing agreement; provided, however, the
1750	1750
1751	1751
1752	1752
1753	1753
1754	1754
1755	1755	HB2862 - 48 - LRB104 10764 AAS 20844 b
1756	1756
1757	1757
1758	1758	HB2862- 49 -LRB104 10764 AAS 20844 b HB2862 - 49 - LRB104 10764 AAS 20844 b
1759	1759	HB2862 - 49 - LRB104 10764 AAS 20844 b
1760	1760	1 Commission shall correct typographical and scrivener's errors
1761	1761	2 and modify the contract only as necessary to provide that the
1762	1762	3 gas utility does not have the right to terminate the sourcing
1763	1763	4 agreement due to any future events that may occur other than
1764	1764	5 the clean coal SNG brownfield facility's failure to timely
1765	1765	6 meet milestones, uncured default, extended force majeure, or
1766	1766	7 abandonment. Once the sourcing agreement is approved, then the
1767	1767	8 gas utility subject to that sourcing agreement shall have 45
1768	1768	9 days after the date of the Commission's approval to enter into
1769	1769	10 the sourcing agreement.
1770	1770	11 (h-5) Sequestration enforcement.
1771	1771	12 (A) All contracts entered into under subsection (h) of
1772	1772	13 this Section and all sourcing agreements under subsection
1773	1773	14 (h-1) of this Section, regardless of duration, shall
1774	1774	15 require the owner of any facility supplying SNG under the
1775	1775	16 contract or sourcing agreement to provide certified
1776	1776	17 documentation to the Commission each year, starting in the
1777	1777	18 facility's first year of commercial operation, accurately
1778	1778	19 reporting the quantity of carbon dioxide emissions from
1779	1779	20 the facility that have been captured and sequestered and
1780	1780	21 reporting any quantities of carbon dioxide released from
1781	1781	22 the site or sites at which carbon dioxide emissions were
1782	1782	23 sequestered in prior years, based on continuous monitoring
1783	1783	24 of those sites.
1784	1784	25 (B) If, in any year, the owner of the clean coal SNG
1785	1785	26 facility fails to demonstrate that the SNG facility
1786	1786
1787	1787
1788	1788
1789	1789
1790	1790
1791	1791	HB2862 - 49 - LRB104 10764 AAS 20844 b
1792	1792
1793	1793
1794	1794	HB2862- 50 -LRB104 10764 AAS 20844 b HB2862 - 50 - LRB104 10764 AAS 20844 b
1795	1795	HB2862 - 50 - LRB104 10764 AAS 20844 b
1796	1796	1 captured and sequestered at least 90% of the total carbon
1797	1797	2 dioxide emissions that the facility would otherwise emit
1798	1798	3 or that sequestration of emissions from prior years has
1799	1799	4 failed, resulting in the release of carbon dioxide into
1800	1800	5 the atmosphere, then the owner of the clean coal SNG
1801	1801	6 facility must pay a penalty of $20 per ton of excess carbon
1802	1802	7 dioxide emissions not to exceed $40,000,000, in any given
1803	1803	8 year which shall be deposited into the Energy Efficiency
1804	1804	9 Trust Fund and distributed pursuant to subsection (b) of
1805	1805	10 Section 6-6 of the Renewable Energy, Energy Efficiency,
1806	1806	11 and Coal Resources Development Law of 1997. On or before
1807	1807	12 the 5-year anniversary of the execution of the contract
1808	1808	13 and every 5 years thereafter, an expert hired by the owner
1809	1809	14 of the facility with the approval of the Attorney General
1810	1810	15 shall conduct an analysis to determine the cost of
1811	1811	16 sequestration of at least 90% of the total carbon dioxide
1812	1812	17 emissions the plant would otherwise emit. If the analysis
1813	1813	18 shows that the actual annual cost is greater than the
1814	1814	19 penalty, then the penalty shall be increased to equal the
1815	1815	20 actual cost. Provided, however, to the extent that the
1816	1816	21 owner of the facility described in subsection (h) of this
1817	1817	22 Section can demonstrate that the failure was as a result
1818	1818	23 of acts of God (including fire, flood, earthquake,
1819	1819	24 tornado, lightning, hurricane, or other natural disaster);
1820	1820	25 any amendment, modification, or abrogation of any
1821	1821	26 applicable law or regulation that would prevent
1822	1822
1823	1823
1824	1824
1825	1825
1826	1826
1827	1827	HB2862 - 50 - LRB104 10764 AAS 20844 b
1828	1828
1829	1829
1830	1830	HB2862- 51 -LRB104 10764 AAS 20844 b HB2862 - 51 - LRB104 10764 AAS 20844 b
1831	1831	HB2862 - 51 - LRB104 10764 AAS 20844 b
1832	1832	1 performance; war; invasion; act of foreign enemies;
1833	1833	2 hostilities (regardless of whether war is declared); civil
1834	1834	3 war; rebellion; revolution; insurrection; military or
1835	1835	4 usurped power or confiscation; terrorist activities; civil
1836	1836	5 disturbance; riots; nationalization; sabotage; blockage;
1837	1837	6 or embargo, the owner of the facility described in
1838	1838	7 subsection (h) of this Section shall not be subject to a
1839	1839	8 penalty if and only if (i) it promptly provides notice of
1840	1840	9 its failure to the Commission; (ii) as soon as practicable
1841	1841	10 and consistent with any order or direction from the
1842	1842	11 Commission, it submits to the Commission proposed
1843	1843	12 modifications to its carbon capture and sequestration
1844	1844	13 plan; and (iii) it carries out its proposed modifications
1845	1845	14 in the manner and time directed by the Commission.
1846	1846	15 If the Commission finds that the facility has not
1847	1847	16 satisfied each of these requirements, then the facility
1848	1848	17 shall be subject to the penalty. If the owner of the clean
1849	1849	18 coal SNG facility captured and sequestered more than 90%
1850	1850	19 of the total carbon dioxide emissions that the facility
1851	1851	20 would otherwise emit, then the owner of the facility may
1852	1852	21 credit such additional amounts to reduce the amount of any
1853	1853	22 future penalty to be paid. The penalty resulting from the
1854	1854	23 failure to capture and sequester at least the minimum
1855	1855	24 amount of carbon dioxide shall not be passed on to a
1856	1856	25 utility or its customers.
1857	1857	26 If the clean coal SNG facility fails to meet the
1858	1858
1859	1859
1860	1860
1861	1861
1862	1862
1863	1863	HB2862 - 51 - LRB104 10764 AAS 20844 b
1864	1864
1865	1865
1866	1866	HB2862- 52 -LRB104 10764 AAS 20844 b HB2862 - 52 - LRB104 10764 AAS 20844 b
1867	1867	HB2862 - 52 - LRB104 10764 AAS 20844 b
1868	1868	1 requirements specified in this subsection (h-5), then the
1869	1869	2 Attorney General, on behalf of the People of the State of
1870	1870	3 Illinois, shall bring an action to enforce the obligations
1871	1871	4 related to the facility set forth in this subsection
1872	1872	5 (h-5), including any penalty payments owed, but not
1873	1873	6 including the physical obligation to capture and sequester
1874	1874	7 at least 90% of the total carbon dioxide emissions that
1875	1875	8 the facility would otherwise emit. Such action may be
1876	1876	9 filed in any circuit court in Illinois. By entering into a
1877	1877	10 contract pursuant to subsection (h) of this Section, the
1878	1878	11 clean coal SNG facility agrees to waive any objections to
1879	1879	12 venue or to the jurisdiction of the court with regard to
1880	1880	13 the Attorney General's action under this subsection (h-5).
1881	1881	14 Compliance with the sequestration requirements and any
1882	1882	15 penalty requirements specified in this subsection (h-5)
1883	1883	16 for the clean coal SNG facility shall be assessed annually
1884	1884	17 by the Commission, which may in its discretion retain an
1885	1885	18 expert to facilitate its assessment. If any expert is
1886	1886	19 retained by the Commission, then the clean coal SNG
1887	1887	20 facility shall pay for the expert's reasonable fees, and
1888	1888	21 such costs shall not be passed through to the utility or
1889	1889	22 its customers.
1890	1890	23 In addition, carbon dioxide emission credits received
1891	1891	24 by the clean coal SNG facility in connection with
1892	1892	25 sequestration of carbon dioxide from the facility must be
1893	1893	26 sold in a timely fashion with any revenue, less applicable
1894	1894
1895	1895
1896	1896
1897	1897
1898	1898
1899	1899	HB2862 - 52 - LRB104 10764 AAS 20844 b
1900	1900
1901	1901
1902	1902	HB2862- 53 -LRB104 10764 AAS 20844 b HB2862 - 53 - LRB104 10764 AAS 20844 b
1903	1903	HB2862 - 53 - LRB104 10764 AAS 20844 b
1904	1904	1 fees and expenses and any expenses required to be paid by
1905	1905	2 facility for carbon dioxide transportation or
1906	1906	3 sequestration, deposited into the reconciliation account
1907	1907	4 within 30 days after receipt of such funds by the owner of
1908	1908	5 the clean coal SNG facility.
1909	1909	6 The clean coal SNG facility is prohibited from
1910	1910	7 transporting or sequestering carbon dioxide unless the
1911	1911	8 owner of the carbon dioxide pipeline that transfers the
1912	1912	9 carbon dioxide from the facility and the owner of the
1913	1913	10 sequestration site where the carbon dioxide captured by
1914	1914	11 the facility is stored has acquired all applicable permits
1915	1915	12 under applicable State and federal laws, statutes, rules,
1916	1916	13 or regulations prior to the transfer or sequestration of
1917	1917	14 carbon dioxide. The responsibility for compliance with the
1918	1918	15 sequestration requirements specified in this subsection
1919	1919	16 (h-5) for the clean coal SNG facility shall reside solely
1920	1920	17 with the clean coal SNG facility, regardless of whether
1921	1921	18 the facility has contracted with another party to capture,
1922	1922	19 transport, or sequester carbon dioxide.
1923	1923	20 (C) If, in any year, the owner of a clean coal SNG
1924	1924	21 brownfield facility fails to demonstrate that the clean
1925	1925	22 coal SNG brownfield facility captured and sequestered at
1926	1926	23 least 85% of the total carbon dioxide emissions that the
1927	1927	24 facility would otherwise emit, then the owner of the clean
1928	1928	25 coal SNG brownfield facility must pay a penalty of $20 per
1929	1929	26 ton of excess carbon emissions up to $20,000,000, which
1930	1930
1931	1931
1932	1932
1933	1933
1934	1934
1935	1935	HB2862 - 53 - LRB104 10764 AAS 20844 b
1936	1936
1937	1937
1938	1938	HB2862- 54 -LRB104 10764 AAS 20844 b HB2862 - 54 - LRB104 10764 AAS 20844 b
1939	1939	HB2862 - 54 - LRB104 10764 AAS 20844 b
1940	1940	1 shall be deposited into the Energy Efficiency Trust Fund
1941	1941	2 and distributed pursuant to subsection (b) of Section 6-6
1942	1942	3 of the Renewable Energy, Energy Efficiency, and Coal
1943	1943	4 Resources Development Law of 1997. Provided, however, to
1944	1944	5 the extent that the owner of the clean coal SNG brownfield
1945	1945	6 facility can demonstrate that the failure was as a result
1946	1946	7 of acts of God (including fire, flood, earthquake,
1947	1947	8 tornado, lightning, hurricane, or other natural disaster);
1948	1948	9 any amendment, modification, or abrogation of any
1949	1949	10 applicable law or regulation that would prevent
1950	1950	11 performance; war; invasion; act of foreign enemies;
1951	1951	12 hostilities (regardless of whether war is declared); civil
1952	1952	13 war; rebellion; revolution; insurrection; military or
1953	1953	14 usurped power or confiscation; terrorist activities; civil
1954	1954	15 disturbances; riots; nationalization; sabotage; blockage;
1955	1955	16 or embargo, the owner of the clean coal SNG brownfield
1956	1956	17 facility shall not be subject to a penalty if and only if
1957	1957	18 (i) it promptly provides notice of its failure to the
1958	1958	19 Commission; (ii) as soon as practicable and consistent
1959	1959	20 with any order or direction from the Commission, it
1960	1960	21 submits to the Commission proposed modifications to its
1961	1961	22 carbon capture and sequestration plan; and (iii) it
1962	1962	23 carries out its proposed modifications in the manner and
1963	1963	24 time directed by the Commission. If the Commission finds
1964	1964	25 that the facility has not satisfied each of these
1965	1965	26 requirements, then the facility shall be subject to the
1966	1966
1967	1967
1968	1968
1969	1969
1970	1970
1971	1971	HB2862 - 54 - LRB104 10764 AAS 20844 b
1972	1972
1973	1973
1974	1974	HB2862- 55 -LRB104 10764 AAS 20844 b HB2862 - 55 - LRB104 10764 AAS 20844 b
1975	1975	HB2862 - 55 - LRB104 10764 AAS 20844 b
1976	1976	1 penalty. If the owner of a clean coal SNG brownfield
1977	1977	2 facility demonstrates that the clean coal SNG brownfield
1978	1978	3 facility captured and sequestered more than 85% of the
1979	1979	4 total carbon emissions that the facility would otherwise
1980	1980	5 emit, the owner of the clean coal SNG brownfield facility
1981	1981	6 may credit such additional amounts to reduce the amount of
1982	1982	7 any future penalty to be paid. The penalty resulting from
1983	1983	8 the failure to capture and sequester at least the minimum
1984	1984	9 amount of carbon dioxide shall not be passed on to a
1985	1985	10 utility or its customers.
1986	1986	11 In addition to any penalty for the clean coal SNG
1987	1987	12 brownfield facility's failure to capture and sequester at
1988	1988	13 least its minimum sequestration requirement, the Attorney
1989	1989	14 General, on behalf of the People of the State of Illinois,
1990	1990	15 shall bring an action for specific performance of this
1991	1991	16 subsection (h-5). Such action may be filed in any circuit
1992	1992	17 court in Illinois. By entering into a sourcing agreement
1993	1993	18 pursuant to subsection (h-1) of this Section, the clean
1994	1994	19 coal SNG brownfield facility agrees to waive any
1995	1995	20 objections to venue or to the jurisdiction of the court
1996	1996	21 with regard to the Attorney General's action for specific
1997	1997	22 performance under this subsection (h-5).
1998	1998	23 Compliance with the sequestration requirements and
1999	1999	24 penalty requirements specified in this subsection (h-5)
2000	2000	25 for the clean coal SNG brownfield facility shall be
2001	2001	26 assessed annually by the Commission, which may in its
2002	2002
2003	2003
2004	2004
2005	2005
2006	2006
2007	2007	HB2862 - 55 - LRB104 10764 AAS 20844 b
2008	2008
2009	2009
2010	2010	HB2862- 56 -LRB104 10764 AAS 20844 b HB2862 - 56 - LRB104 10764 AAS 20844 b
2011	2011	HB2862 - 56 - LRB104 10764 AAS 20844 b
2012	2012	1 discretion retain an expert to facilitate its assessment.
2013	2013	2 If an expert is retained by the Commission, then the clean
2014	2014	3 coal SNG brownfield facility shall pay for the expert's
2015	2015	4 reasonable fees, and such costs shall not be passed
2016	2016	5 through to a utility or its customers. A SNG facility
2017	2017	6 operating pursuant to this subsection (h-5) shall not
2018	2018	7 forfeit its designation as a clean coal SNG facility or a
2019	2019	8 clean coal SNG brownfield facility if the facility fails
2020	2020	9 to fully comply with the applicable carbon sequestration
2021	2021	10 requirements in any given year, provided the requisite
2022	2022	11 offsets are purchased or requisite penalties are paid.
2023	2023	12 Responsibility for compliance with the sequestration
2024	2024	13 requirements specified in this subsection (h-5) for the
2025	2025	14 clean coal SNG brownfield facility shall reside solely
2026	2026	15 with the clean coal SNG brownfield facility regardless of
2027	2027	16 whether the facility has contracted with another party to
2028	2028	17 capture, transport, or sequester carbon dioxide.
2029	2029	18 (h-7) Sequestration permitting, oversight, and
2030	2030	19 investigations.
2031	2031	20 (1) No clean coal facility or clean coal SNG
2032	2032	21 brownfield facility may transport or sequester carbon
2033	2033	22 dioxide unless the Commission approves the method of
2034	2034	23 carbon dioxide transportation or sequestration. Such
2035	2035	24 approval shall be required regardless of whether the
2036	2036	25 facility has contracted with another to transport or
2037	2037	26 sequester the carbon dioxide. Nothing in this subsection
2038	2038
2039	2039
2040	2040
2041	2041
2042	2042
2043	2043	HB2862 - 56 - LRB104 10764 AAS 20844 b
2044	2044
2045	2045
2046	2046	HB2862- 57 -LRB104 10764 AAS 20844 b HB2862 - 57 - LRB104 10764 AAS 20844 b
2047	2047	HB2862 - 57 - LRB104 10764 AAS 20844 b
2048	2048	1 (h-7) shall release the owner or operator of a carbon
2049	2049	2 dioxide sequestration site or carbon dioxide pipeline from
2050	2050	3 any other permitting requirements under applicable State
2051	2051	4 and federal laws, statutes, rules, or regulations.
2052	2052	5 (2) The Commission shall review carbon dioxide
2053	2053	6 transportation and sequestration methods proposed by a
2054	2054	7 clean coal facility or a clean coal SNG brownfield
2055	2055	8 facility and shall approve those methods it deems
2056	2056	9 reasonable and cost-effective. For purposes of this
2057	2057	10 review, "cost-effective" means a commercially reasonable
2058	2058	11 price for similar carbon dioxide transportation or
2059	2059	12 sequestration techniques. In determining whether
2060	2060	13 sequestration is reasonable and cost-effective, the
2061	2061	14 Commission may consult with the Illinois State Geological
2062	2062	15 Survey and retain third parties to assist in its
2063	2063	16 determination, provided that such third parties shall not
2064	2064	17 own or control any direct or indirect interest in the
2065	2065	18 facility that is proposing the carbon dioxide
2066	2066	19 transportation or the carbon dioxide sequestration method
2067	2067	20 and shall have no contractual relationship with that
2068	2068	21 facility. If a third party is retained by the Commission,
2069	2069	22 then the facility proposing the carbon dioxide
2070	2070	23 transportation or sequestration method shall pay for the
2071	2071	24 expert's reasonable fees, and these costs shall not be
2072	2072	25 passed through to a utility or its customers.
2073	2073	26 No later than 6 months prior to the date upon which the
2074	2074
2075	2075
2076	2076
2077	2077
2078	2078
2079	2079	HB2862 - 57 - LRB104 10764 AAS 20844 b
2080	2080
2081	2081
2082	2082	HB2862- 58 -LRB104 10764 AAS 20844 b HB2862 - 58 - LRB104 10764 AAS 20844 b
2083	2083	HB2862 - 58 - LRB104 10764 AAS 20844 b
2084	2084	1 owner intends to commence construction of a clean coal
2085	2085	2 facility or the clean coal SNG brownfield facility, the
2086	2086	3 owner of the facility shall file with the Commission a
2087	2087	4 carbon dioxide transportation or sequestration plan. The
2088	2088	5 Commission shall hold a public hearing within 30 days
2089	2089	6 after receipt of the facility's carbon dioxide
2090	2090	7 transportation or sequestration plan. The Commission shall
2091	2091	8 post notice of the review on its website upon submission
2092	2092	9 of a carbon dioxide transportation or sequestration method
2093	2093	10 and shall accept written public comments. The Commission
2094	2094	11 shall take the comments into account when making its
2095	2095	12 decision.
2096	2096	13 The Commission may not approve a carbon dioxide
2097	2097	14 sequestration method if the owner or operator of the
2098	2098	15 sequestration site has not received (i) an Underground
2099	2099	16 Injection Control permit from the United States
2100	2100	17 Environmental Protection Agency, or from the Illinois
2101	2101	18 Environmental Protection Agency pursuant to the
2102	2102	19 Environmental Protection Act; (ii) an Underground
2103	2103	20 Injection Control permit from the Illinois Department of
2104	2104	21 Natural Resources pursuant to the Illinois Oil and Gas
2105	2105	22 Act; or (iii) an Underground Injection Control permit from
2106	2106	23 the United States Environmental Protection Agency or a
2107	2107	24 permit similar to items (i) or (ii) from the state in which
2108	2108	25 the sequestration site is located if the sequestration
2109	2109	26 will take place outside of Illinois. The Commission shall
2110	2110
2111	2111
2112	2112
2113	2113
2114	2114
2115	2115	HB2862 - 58 - LRB104 10764 AAS 20844 b
2116	2116
2117	2117
2118	2118	HB2862- 59 -LRB104 10764 AAS 20844 b HB2862 - 59 - LRB104 10764 AAS 20844 b
2119	2119	HB2862 - 59 - LRB104 10764 AAS 20844 b
2120	2120	1 approve or deny the carbon dioxide transportation or
2121	2121	2 sequestration method within 90 days after the receipt of
2122	2122	3 all required information.
2123	2123	4 (3) At least annually, the Illinois Environmental
2124	2124	5 Protection Agency shall inspect all carbon dioxide
2125	2125	6 sequestration sites in Illinois. The Illinois
2126	2126	7 Environmental Protection Agency may, as often as deemed
2127	2127	8 necessary, monitor and conduct investigations of those
2128	2128	9 sites. The owner or operator of the sequestration site
2129	2129	10 must cooperate with the Illinois Environmental Protection
2130	2130	11 Agency investigations of carbon dioxide sequestration
2131	2131	12 sites.
2132	2132	13 If the Illinois Environmental Protection Agency
2133	2133	14 determines at any time a site creates conditions that
2134	2134	15 warrant the issuance of a seal order under Section 34 of
2135	2135	16 the Environmental Protection Act, then the Illinois
2136	2136	17 Environmental Protection Agency shall seal the site
2137	2137	18 pursuant to the Environmental Protection Act. If the
2138	2138	19 Illinois Environmental Protection Agency determines at any
2139	2139	20 time a carbon dioxide sequestration site creates
2140	2140	21 conditions that warrant the institution of a civil action
2141	2141	22 for an injunction under Section 43 of the Environmental
2142	2142	23 Protection Act, then the Illinois Environmental Protection
2143	2143	24 Agency shall request the State's Attorney or the Attorney
2144	2144	25 General institute such action. The Illinois Environmental
2145	2145	26 Protection Agency shall provide notice of any such actions
2146	2146
2147	2147
2148	2148
2149	2149
2150	2150
2151	2151	HB2862 - 59 - LRB104 10764 AAS 20844 b
2152	2152
2153	2153
2154	2154	HB2862- 60 -LRB104 10764 AAS 20844 b HB2862 - 60 - LRB104 10764 AAS 20844 b
2155	2155	HB2862 - 60 - LRB104 10764 AAS 20844 b
2156	2156	1 as soon as possible on its website. The SNG facility shall
2157	2157	2 incur all reasonable costs associated with any such
2158	2158	3 inspection or monitoring of the sequestration sites, and
2159	2159	4 these costs shall not be recoverable from utilities or
2160	2160	5 their customers.
2161	2161	6 (4) (Blank).
2162	2162	7 (h-9) The clean coal SNG brownfield facility shall have
2163	2163	8 the right to recover prudently incurred increased costs or
2164	2164	9 reduced revenue resulting from any new or amendatory
2165	2165	10 legislation or other action. The State of Illinois pledges
2166	2166	11 that the State will not enact any law or take any action to:
2167	2167	12 (1) break, or repeal the authority for, sourcing
2168	2168	13 agreements approved by the Commission and entered into
2169	2169	14 between public utilities and the clean coal SNG brownfield
2170	2170	15 facility;
2171	2171	16 (2) deny public utilities full cost recovery for their
2172	2172	17 costs incurred under those sourcing agreements; or
2173	2173	18 (3) deny the clean coal SNG brownfield facility full
2174	2174	19 cost and revenue recovery as provided under those sourcing
2175	2175	20 agreements that are recoverable pursuant to subsection
2176	2176	21 (h-3) of this Section.
2177	2177	22 These pledges are for the benefit of the parties to those
2178	2178	23 sourcing agreements and the issuers and holders of bonds or
2179	2179	24 other obligations issued or incurred to finance or refinance
2180	2180	25 the clean coal SNG brownfield facility. The clean coal SNG
2181	2181	26 brownfield facility is authorized to include and refer to
2182	2182
2183	2183
2184	2184
2185	2185
2186	2186
2187	2187	HB2862 - 60 - LRB104 10764 AAS 20844 b
2188	2188
2189	2189
2190	2190	HB2862- 61 -LRB104 10764 AAS 20844 b HB2862 - 61 - LRB104 10764 AAS 20844 b
2191	2191	HB2862 - 61 - LRB104 10764 AAS 20844 b
2192	2192	1 these pledges in any financing agreement into which it may
2193	2193	2 enter in regard to those sourcing agreements.
2194	2194	3 The State of Illinois retains and reserves all other
2195	2195	4 rights to enact new or amendatory legislation or take any
2196	2196	5 other action, without impairment of the right of the clean
2197	2197	6 coal SNG brownfield facility to recover prudently incurred
2198	2198	7 increased costs or reduced revenue resulting from the new or
2199	2199	8 amendatory legislation or other action, including, but not
2200	2200	9 limited to, such legislation or other action that would (i)
2201	2201	10 directly or indirectly raise the costs the clean coal SNG
2202	2202	11 brownfield facility must incur; (ii) directly or indirectly
2203	2203	12 place additional restrictions, regulations, or requirements on
2204	2204	13 the clean coal SNG brownfield facility; (iii) prohibit
2205	2205	14 sequestration in general or prohibit a specific sequestration
2206	2206	15 method or project; or (iv) increase minimum sequestration
2207	2207	16 requirements for the clean coal SNG brownfield facility to the
2208	2208	17 extent technically feasible. The clean coal SNG brownfield
2209	2209	18 facility shall have the right to recover prudently incurred
2210	2210	19 increased costs or reduced revenue resulting from the new or
2211	2211	20 amendatory legislation or other action as described in this
2212	2212	21 subsection (h-9).
2213	2213	22 (h-10) Contract costs for SNG incurred by an Illinois gas
2214	2214	23 utility are reasonable and prudent and recoverable through the
2215	2215	24 purchased gas adjustment clause and are not subject to review
2216	2216	25 or disallowance by the Commission. Contract costs are costs
2217	2217	26 incurred by the utility under the terms of a contract that
2218	2218
2219	2219
2220	2220
2221	2221
2222	2222
2223	2223	HB2862 - 61 - LRB104 10764 AAS 20844 b
2224	2224
2225	2225
2226	2226	HB2862- 62 -LRB104 10764 AAS 20844 b HB2862 - 62 - LRB104 10764 AAS 20844 b
2227	2227	HB2862 - 62 - LRB104 10764 AAS 20844 b
2228	2228	1 incorporates the terms stated in subsection (h) of this
2229	2229	2 Section as confirmed in writing by the Illinois Power Agency
2230	2230	3 as set forth in subsection (h) of this Section, which
2231	2231	4 confirmation shall be deemed conclusive, or as a consequence
2232	2232	5 of or condition to its performance under the contract,
2233	2233	6 including (i) amounts paid for SNG under the SNG contract and
2234	2234	7 (ii) costs of transportation and storage services of SNG
2235	2235	8 purchased from interstate pipelines under federally approved
2236	2236	9 tariffs. The Illinois gas utility shall initiate a clean coal
2237	2237	10 SNG facility rider mechanism that (A) shall be applicable to
2238	2238	11 all customers who receive transportation service from the
2239	2239	12 utility, (B) shall be designed to have an equal percentage
2240	2240	13 impact on the transportation services rates of each class of
2241	2241	14 the utility's total customers, and (C) shall accurately
2242	2242	15 reflect the net customer savings, if any, and above market
2243	2243	16 costs, if any, under the SNG contract. Any contract, the terms
2244	2244	17 of which have been confirmed in writing by the Illinois Power
2245	2245	18 Agency as set forth in subsection (h) of this Section and the
2246	2246	19 performance of the parties under such contract cannot be
2247	2247	20 grounds for challenging prudence or cost recovery by the
2248	2248	21 utility through the purchased gas adjustment clause, and in
2249	2249	22 such cases, the Commission is directed not to consider, and
2250	2250	23 has no authority to consider, any attempted challenges.
2251	2251	24 The contracts entered into by Illinois gas utilities
2252	2252	25 pursuant to subsection (h) of this Section shall provide that
2253	2253	26 the utility retains the right to terminate the contract
2254	2254
2255	2255
2256	2256
2257	2257
2258	2258
2259	2259	HB2862 - 62 - LRB104 10764 AAS 20844 b
2260	2260
2261	2261
2262	2262	HB2862- 63 -LRB104 10764 AAS 20844 b HB2862 - 63 - LRB104 10764 AAS 20844 b
2263	2263	HB2862 - 63 - LRB104 10764 AAS 20844 b
2264	2264	1 without further obligation or liability to any party if the
2265	2265	2 contract has been impaired as a result of any legislative,
2266	2266	3 administrative, judicial, or other governmental action that is
2267	2267	4 taken that eliminates all or part of the prudence protection
2268	2268	5 of this subsection (h-10) or denies the recoverability of all
2269	2269	6 or part of the contract costs through the purchased gas
2270	2270	7 adjustment clause. Should any Illinois gas utility exercise
2271	2271	8 its right under this subsection (h-10) to terminate the
2272	2272	9 contract, all contract costs incurred prior to termination are
2273	2273	10 and will be deemed reasonable, prudent, and recoverable as and
2274	2274	11 when incurred and not subject to review or disallowance by the
2275	2275	12 Commission. Any order, issued by the State requiring or
2276	2276	13 authorizing the discontinuation of the merchant function,
2277	2277	14 defined as the purchase and sale of natural gas by an Illinois
2278	2278	15 gas utility for the ultimate consumer in its service territory
2279	2279	16 shall include provisions necessary to prevent the impairment
2280	2280	17 of the value of any contract hereunder over its full term.
2281	2281	18 (h-11) All costs incurred by an Illinois gas utility in
2282	2282	19 procuring SNG from a clean coal SNG brownfield facility
2283	2283	20 pursuant to subsection (h-1) or a third-party marketer
2284	2284	21 pursuant to subsection (h-1) are reasonable and prudent and
2285	2285	22 recoverable through the purchased gas adjustment clause in
2286	2286	23 conjunction with a SNG brownfield facility rider mechanism and
2287	2287	24 are not subject to review or disallowance by the Commission;
2288	2288	25 provided that if a utility is required by law or otherwise
2289	2289	26 elects to connect the clean coal SNG brownfield facility to an
2290	2290
2291	2291
2292	2292
2293	2293
2294	2294
2295	2295	HB2862 - 63 - LRB104 10764 AAS 20844 b
2296	2296
2297	2297
2298	2298	HB2862- 64 -LRB104 10764 AAS 20844 b HB2862 - 64 - LRB104 10764 AAS 20844 b
2299	2299	HB2862 - 64 - LRB104 10764 AAS 20844 b
2300	2300	1 interstate pipeline, then the utility shall be entitled to
2301	2301	2 recover pursuant to its tariffs all just and reasonable costs
2302	2302	3 that are prudently incurred. Sourcing agreement costs are
2303	2303	4 costs incurred by the utility under the terms of a sourcing
2304	2304	5 agreement that incorporates the terms stated in subsection
2305	2305	6 (h-1) of this Section as approved by the Commission as set
2306	2306	7 forth in subsection (h-4) of this Section, which approval
2307	2307	8 shall be deemed conclusive, or as a consequence of or
2308	2308	9 condition to its performance under the contract, including (i)
2309	2309	10 amounts paid for SNG under the SNG contract and (ii) costs of
2310	2310	11 transportation and storage services of SNG purchased from
2311	2311	12 interstate pipelines under federally approved tariffs. Any
2312	2312	13 sourcing agreement, the terms of which have been approved by
2313	2313	14 the Commission as set forth in subsection (h-4) of this
2314	2314	15 Section, and the performance of the parties under the sourcing
2315	2315	16 agreement cannot be grounds for challenging prudence or cost
2316	2316	17 recovery by the utility, and in these cases, the Commission is
2317	2317	18 directed not to consider, and has no authority to consider,
2318	2318	19 any attempted challenges.
2319	2319	20 (h-15) Reconciliation account. The clean coal SNG facility
2320	2320	21 shall establish a reconciliation account for the benefit of
2321	2321	22 the retail customers of the utilities that have entered into
2322	2322	23 contracts with the clean coal SNG facility pursuant to
2323	2323	24 subsection (h). The reconciliation account shall be maintained
2324	2324	25 and administered by an independent trustee that is mutually
2325	2325	26 agreed upon by the owners of the clean coal SNG facility, the
2326	2326
2327	2327
2328	2328
2329	2329
2330	2330
2331	2331	HB2862 - 64 - LRB104 10764 AAS 20844 b
2332	2332
2333	2333
2334	2334	HB2862- 65 -LRB104 10764 AAS 20844 b HB2862 - 65 - LRB104 10764 AAS 20844 b
2335	2335	HB2862 - 65 - LRB104 10764 AAS 20844 b
2336	2336	1 utilities, and the Commission in an interest-bearing account
2337	2337	2 in accordance with the following:
2338	2338	3 (1) The clean coal SNG facility shall conduct an
2339	2339	4 analysis annually within 60 days after receiving the
2340	2340	5 necessary cost information, which shall be provided by the
2341	2341	6 gas utility within 6 months after the end of the preceding
2342	2342	7 calendar year, to determine (i) the average annual
2343	2343	8 contract SNG cost, which shall be calculated as the total
2344	2344	9 amount paid for SNG purchased from the clean coal SNG
2345	2345	10 facility over the preceding 12 months, plus the cost to
2346	2346	11 the utility of the required transportation and storage
2347	2347	12 services of SNG, divided by the total number of MMBtus of
2348	2348	13 SNG actually purchased from the clean coal SNG facility in
2349	2349	14 the preceding 12 months under the utility contract; (ii)
2350	2350	15 the average annual natural gas purchase cost, which shall
2351	2351	16 be calculated as the total annual supply costs paid for
2352	2352	17 baseload natural gas (excluding any SNG) purchased by such
2353	2353	18 utility over the preceding 12 months plus the costs of
2354	2354	19 transportation and storage services of such natural gas
2355	2355	20 (excluding such costs for SNG), divided by the total
2356	2356	21 number of MMbtus of baseload natural gas (excluding SNG)
2357	2357	22 actually purchased by the utility during the year; (iii)
2358	2358	23 the cost differential, which shall be the difference
2359	2359	24 between the average annual contract SNG cost and the
2360	2360	25 average annual natural gas purchase cost; and (iv) the
2361	2361	26 revenue share target which shall be the cost differential
2362	2362
2363	2363
2364	2364
2365	2365
2366	2366
2367	2367	HB2862 - 65 - LRB104 10764 AAS 20844 b
2368	2368
2369	2369
2370	2370	HB2862- 66 -LRB104 10764 AAS 20844 b HB2862 - 66 - LRB104 10764 AAS 20844 b
2371	2371	HB2862 - 66 - LRB104 10764 AAS 20844 b
2372	2372	1 multiplied by the total amount of SNG purchased over the
2373	2373	2 preceding 12 months under such utility contract.
2374	2374	3 (A) To the extent the annual average contract SNG
2375	2375	4 cost is less than the annual average natural gas
2376	2376	5 purchase cost, the utility shall credit an amount
2377	2377	6 equal to the revenue share target to the
2378	2378	7 reconciliation account. Such credit payment shall be
2379	2379	8 made monthly starting within 30 days after the
2380	2380	9 completed analysis in this subsection (h-15) and based
2381	2381	10 on collections from all customers via a line item
2382	2382	11 charge in all customer bills designed to have an equal
2383	2383	12 percentage impact on the transportation services of
2384	2384	13 each class of customers. Credit payments made pursuant
2385	2385	14 to this subparagraph (A) shall be deemed prudent and
2386	2386	15 reasonable and not subject to Commission prudence
2387	2387	16 review.
2388	2388	17 (B) To the extent the annual average contract SNG
2389	2389	18 cost is greater than the annual average natural gas
2390	2390	19 purchase cost, the reconciliation account shall be
2391	2391	20 used to provide a credit equal to the revenue share
2392	2392	21 target to the utilities to be used to reduce the
2393	2393	22 utility's natural gas costs through the purchased gas
2394	2394	23 adjustment clause. Such payment shall be made within
2395	2395	24 30 days after the completed analysis pursuant to this
2396	2396	25 subsection (h-15), but only to the extent that the
2397	2397	26 reconciliation account has a positive balance.
2398	2398
2399	2399
2400	2400
2401	2401
2402	2402
2403	2403	HB2862 - 66 - LRB104 10764 AAS 20844 b
2404	2404
2405	2405
2406	2406	HB2862- 67 -LRB104 10764 AAS 20844 b HB2862 - 67 - LRB104 10764 AAS 20844 b
2407	2407	HB2862 - 67 - LRB104 10764 AAS 20844 b
2408	2408	1 (2) At the conclusion of the term of the SNG contracts
2409	2409	2 pursuant to subsection (h) and the completion of the final
2410	2410	3 annual analysis pursuant to this subsection (h-15), to the
2411	2411	4 extent the facility owes any amount to retail customers,
2412	2412	5 amounts in the account shall be credited to retail
2413	2413	6 customers to the extent the owed amount is repaid; 50% of
2414	2414	7 any additional amount in the reconciliation account shall
2415	2415	8 be distributed to the utilities to be used to reduce the
2416	2416	9 utilities' natural gas costs through the purchase gas
2417	2417	10 adjustment clause with the remaining amount distributed to
2418	2418	11 the clean coal SNG facility. Such payment shall be made
2419	2419	12 within 30 days after the last completed analysis pursuant
2420	2420	13 to this subsection (h-15). If the facility has repaid all
2421	2421	14 owed amounts, if any, to retail customers and has
2422	2422	15 distributed 50% of any additional amount in the account to
2423	2423	16 the utilities, then the owners of the clean coal SNG
2424	2424	17 facility shall have no further obligation to the utility
2425	2425	18 or the retail customers.
2426	2426	19 If, at the conclusion of the term of the contracts
2427	2427	20 pursuant to subsection (h) and the completion of the final
2428	2428	21 annual analysis pursuant to this subsection (h-15), the
2429	2429	22 facility owes any amount to retail customers and the
2430	2430	23 account has been depleted, then the clean coal SNG
2431	2431	24 facility shall be liable for any remaining amount owed to
2432	2432	25 the retail customers. The clean coal SNG facility shall
2433	2433	26 market the daily production of SNG and distribute on a
2434	2434
2435	2435
2436	2436
2437	2437
2438	2438
2439	2439	HB2862 - 67 - LRB104 10764 AAS 20844 b
2440	2440
2441	2441
2442	2442	HB2862- 68 -LRB104 10764 AAS 20844 b HB2862 - 68 - LRB104 10764 AAS 20844 b
2443	2443	HB2862 - 68 - LRB104 10764 AAS 20844 b
2444	2444	1 monthly basis 5% of the amounts collected with respect to
2445	2445	2 such future sales to the utilities in proportion to each
2446	2446	3 utility's SNG contract to be used to reduce the utility's
2447	2447	4 natural gas costs through the purchase gas adjustment
2448	2448	5 clause; such payments to the utility shall continue until
2449	2449	6 either 15 years after the conclusion of the contract or
2450	2450	7 such time as the sum of such payments equals the remaining
2451	2451	8 amount owed to the retail customers at the end of the
2452	2452	9 contract, whichever is earlier. If the debt to the retail
2453	2453	10 customers is not repaid within 15 years after the
2454	2454	11 conclusion of the contract, then the owner of the clean
2455	2455	12 coal SNG facility must sell the facility, and all proceeds
2456	2456	13 from that sale must be used to repay any amount owed to the
2457	2457	14 retail customers under this subsection (h-15).
2458	2458	15 The retail customers shall have first priority in
2459	2459	16 recovering that debt above any creditors, except the
2460	2460	17 secured lenders to the extent that the secured lenders
2461	2461	18 have any secured debt outstanding, including any parent
2462	2462	19 companies or affiliates of the clean coal SNG facility.
2463	2463	20 (3) 50% of all additional net revenue, defined as
2464	2464	21 miscellaneous net revenue after cost allowance and above
2465	2465	22 the budgeted estimate established for revenue pursuant to
2466	2466	23 subsection (h), including sale of substitute natural gas
2467	2467	24 derived from the clean coal SNG facility above the
2468	2468	25 nameplate capacity of the facility and other by-products
2469	2469	26 produced by the facility, shall be credited to the
2470	2470
2471	2471
2472	2472
2473	2473
2474	2474
2475	2475	HB2862 - 68 - LRB104 10764 AAS 20844 b
2476	2476
2477	2477
2478	2478	HB2862- 69 -LRB104 10764 AAS 20844 b HB2862 - 69 - LRB104 10764 AAS 20844 b
2479	2479	HB2862 - 69 - LRB104 10764 AAS 20844 b
2480	2480	1 reconciliation account on an annual basis with such
2481	2481	2 payment made within 30 days after the end of each calendar
2482	2482	3 year during the term of the contract.
2483	2483	4 (4) The clean coal SNG facility shall each year,
2484	2484	5 starting in the facility's first year of commercial
2485	2485	6 operation, file with the Commission, in such form as the
2486	2486	7 Commission shall require, a report as to the
2487	2487	8 reconciliation account. The annual report must contain the
2488	2488	9 following information:
2489	2489	10 (A) the revenue share target amount;
2490	2490	11 (B) the amount credited or debited to the
2491	2491	12 reconciliation account during the year;
2492	2492	13 (C) the amount credited to the utilities to be
2493	2493	14 used to reduce the utilities natural gas costs though
2494	2494	15 the purchase gas adjustment clause;
2495	2495	16 (D) the total amount of reconciliation account at
2496	2496	17 the beginning and end of the year;
2497	2497	18 (E) the total amount of consumer savings to date;
2498	2498	19 and
2499	2499	20 (F) any additional information the Commission may
2500	2500	21 require.
2501	2501	22 When any report is erroneous or defective or appears to
2502	2502	23 the Commission to be erroneous or defective, the Commission
2503	2503	24 may notify the clean coal SNG facility to amend the report
2504	2504	25 within 30 days; before or after the termination of the 30-day
2505	2505	26 period, the Commission may examine the trustee of the
2506	2506
2507	2507
2508	2508
2509	2509
2510	2510
2511	2511	HB2862 - 69 - LRB104 10764 AAS 20844 b
2512	2512
2513	2513
2514	2514	HB2862- 70 -LRB104 10764 AAS 20844 b HB2862 - 70 - LRB104 10764 AAS 20844 b
2515	2515	HB2862 - 70 - LRB104 10764 AAS 20844 b
2516	2516	1 reconciliation account or the officers, agents, employees,
2517	2517	2 books, records, or accounts of the clean coal SNG facility and
2518	2518	3 correct such items in the report as upon such examination the
2519	2519	4 Commission may find defective or erroneous. All reports shall
2520	2520	5 be under oath.
2521	2521	6 All reports made to the Commission by the clean coal SNG
2522	2522	7 facility and the contents of the reports shall be open to
2523	2523	8 public inspection and shall be deemed a public record under
2524	2524	9 the Freedom of Information Act. Such reports shall be
2525	2525	10 preserved in the office of the Commission. The Commission
2526	2526	11 shall publish an annual summary of the reports prior to
2527	2527	12 February 1 of the following year. The annual summary shall be
2528	2528	13 made available to the public on the Commission's website and
2529	2529	14 shall be submitted to the General Assembly.
2530	2530	15 Any facility that fails to file the report required under
2531	2531	16 this paragraph (4) to the Commission within the time specified
2532	2532	17 or to make specific answer to any question propounded by the
2533	2533	18 Commission within 30 days after the time it is lawfully
2534	2534	19 required to do so, or within such further time not to exceed 90
2535	2535	20 days as may be allowed by the Commission in its discretion,
2536	2536	21 shall pay a penalty of $500 to the Commission for each day it
2537	2537	22 is in default.
2538	2538	23 Any person who willfully makes any false report to the
2539	2539	24 Commission or to any member, officer, or employee thereof, any
2540	2540	25 person who willfully in a report withholds or fails to provide
2541	2541	26 material information to which the Commission is entitled under
2542	2542
2543	2543
2544	2544
2545	2545
2546	2546
2547	2547	HB2862 - 70 - LRB104 10764 AAS 20844 b
2548	2548
2549	2549
2550	2550	HB2862- 71 -LRB104 10764 AAS 20844 b HB2862 - 71 - LRB104 10764 AAS 20844 b
2551	2551	HB2862 - 71 - LRB104 10764 AAS 20844 b
2552	2552	1 this paragraph (4) and which information is either required to
2553	2553	2 be filed by statute, rule, regulation, order, or decision of
2554	2554	3 the Commission or has been requested by the Commission, and
2555	2555	4 any person who willfully aids or abets such person shall be
2556	2556	5 guilty of a Class A misdemeanor.
2557	2557	6 (h-20) The General Assembly authorizes the Illinois
2558	2558	7 Finance Authority to issue bonds to the maximum extent
2559	2559	8 permitted to finance coal gasification facilities described in
2560	2560	9 this Section, which constitute both "industrial projects"
2561	2561	10 under Article 801 of the Illinois Finance Authority Act and
2562	2562	11 "clean coal and energy projects" under Sections 825-65 through
2563	2563	12 825-75 of the Illinois Finance Authority Act.
2564	2564	13 Administrative costs incurred by the Illinois Finance
2565	2565	14 Authority in performance of this subsection (h-20) shall be
2566	2566	15 subject to reimbursement by the clean coal SNG facility on
2567	2567	16 terms as the Illinois Finance Authority and the clean coal SNG
2568	2568	17 facility may agree. The utility and its customers shall have
2569	2569	18 no obligation to reimburse the clean coal SNG facility or the
2570	2570	19 Illinois Finance Authority for any such costs.
2571	2571	20 (h-25) The State of Illinois pledges that the State may
2572	2572	21 not enact any law or take any action to (1) break or repeal the
2573	2573	22 authority for SNG purchase contracts entered into between
2574	2574	23 public gas utilities and the clean coal SNG facility pursuant
2575	2575	24 to subsection (h) of this Section or (2) deny public gas
2576	2576	25 utilities their full cost recovery for contract costs, as
2577	2577	26 defined in subsection (h-10), that are incurred under such SNG
2578	2578
2579	2579
2580	2580
2581	2581
2582	2582
2583	2583	HB2862 - 71 - LRB104 10764 AAS 20844 b
2584	2584
2585	2585
2586	2586	HB2862- 72 -LRB104 10764 AAS 20844 b HB2862 - 72 - LRB104 10764 AAS 20844 b
2587	2587	HB2862 - 72 - LRB104 10764 AAS 20844 b
2588	2588
2589	2589
2590	2590
2591	2591
2592	2592
2593	2593	HB2862 - 72 - LRB104 10764 AAS 20844 b