Bill Text: IL HB0103 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: Amends the Illinois Power Agency Act and the Public Utilities Act to provide for the procurement of renewable energy resources from a clean coal facility, initial clean coal facility, and clean coal SNG facility, including amending provisions concerning Agency powers, aggregate distributed renewable energy, the renewable portfolio standard, and procurement of energy efficiency products and adding provisions concerning the development of feedstock procurement plans and feedstock procurement processes; makes corresponding changes in the Illinois Procurement Code. Allows certain facilities to recover certain costs and revenue associated with the generation of electricity and sequestration. Contains provisions concerning the permitting, oversight, and investigation for capture, transport, and sequestration of carbon dioxide. Makes other changes. Contains a severability provision. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB0103 Detail]

Download: Illinois-2013-HB0103-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB0103 Introduced , by Rep. Robert Rita SYNOPSIS AS INTRODUCED:
20 ILCS 3855/1-10
20 ILCS 3855/1-20
20 ILCS 3855/1-75
20 ILCS 3855/1-76 new
20 ILCS 3855/1-76.5 new
20 ILCS 3855/1-77.5 new
20 ILCS 3855/1-79 new
20 ILCS 3855/1-81 new
30 ILCS 500/1-10
30 ILCS 500/20-10
220 ILCS 5/16-115
220 ILCS 5/16-116
Amends the Illinois Power Agency Act and the Public Utilities Act to provide for the procurement of renewable energy resources from a clean coal facility, initial clean coal facility, and clean coal SNG facility, including amending provisions concerning Agency powers, aggregate distributed renewable energy, the renewable portfolio standard, and procurement of energy efficiency products and adding provisions concerning the development of feedstock procurement plans and feedstock procurement processes; makes corresponding changes in the Illinois Procurement Code. Allows certain facilities to recover certain costs and revenue associated with the generation of electricity and sequestration. Contains provisions concerning the permitting, oversight, and investigation for capture, transport, and sequestration of carbon dioxide. Makes other changes. Contains a severability provision. Effective immediately.
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A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This amendatory Act may be referred
to as the Illinois Renewable Electricity Resources Act.
Section 5. The Illinois Power Agency Act is amended by
changing Sections 1-10, 1-20, and 1-75 and by adding Sections
1-76, 1-76.5, 1-77.5, 1-79, and 1-81 as follows:
(20 ILCS 3855/1-10)
Sec. 1-10. Definitions.
"Agency" means the Illinois Power Agency.
"Agency loan agreement" means any agreement pursuant to
which the Illinois Finance Authority agrees to loan the
proceeds of revenue bonds issued with respect to a project to
the Agency upon terms providing for loan repayment installments
at least sufficient to pay when due all principal of, interest
and premium, if any, on those revenue bonds, and providing for
maintenance, insurance, and other matters in respect of the
project.
"Authority" means the Illinois Finance Authority.
"Clean coal electricity buyer" means (1) each electric
utility and (2) each alternative electric retail supplier that

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is subject to the requirements of subsection (d) of Section
1-75 of this Act and paragraph (5) of subsection (d) of Section
16-115 of the Public Utilities Act.
"Clean coal energy" means all energy produced by the
initial clean coal facility.
"Clean coal facility" means an electric generating
facility that uses primarily coal as a feedstock and that
captures and sequesters carbon dioxide emissions at the
following levels: at least 50% of the total carbon dioxide
emissions that the facility would otherwise emit if, at the
time construction commences, the facility is scheduled to
commence operation before 2016, at least 70% of the total
carbon dioxide emissions that the facility would otherwise emit
if, at the time construction commences, the facility is
scheduled to commence operation during 2016 or 2017, and at
least 90% of the total carbon dioxide emissions that the
facility would otherwise emit if, at the time construction
commences, the facility is scheduled to commence operation
after 2017. The power block of the clean coal facility shall
not exceed allowable emission rates for sulfur dioxide,
nitrogen oxides, carbon monoxide, particulates and mercury for
a natural gas-fired combined-cycle facility the same size as
and in the same location as the clean coal facility at the time
the clean coal facility obtains an approved air permit. All
coal used by a clean coal facility shall have high volatile
bituminous rank and greater than 1.7 pounds of sulfur per

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million btu content, unless the clean coal facility does not
use gasification technology and was operating as a conventional
coal-fired electric generating facility on June 1, 2009 (the
effective date of Public Act 95-1027).
"Clean coal fraction" means, with respect to a clean coal
electricity buyer for a month, a fraction, the numerator of
which is such clean coal electricity buyer's retail market
sales of electricity (expressed in kilowatthours sold) in the
State during the third month preceding the applicable month and
the denominator of which is the total retail market sales of
electricity (expressed in kilowatthours sold) in the State by
all clean coal electricity buyers during such third month
preceding the applicable month, as such fraction may be
adjusted pursuant to subparagraph (E) of paragraph (2) of
subsection (d) of Section 1-75 of this Act.
"Clean coal SNG brownfield facility" means a facility that
(1) has commenced construction by July 1, 2015 on an urban
brownfield site in a municipality with at least 1,000,000
residents; (2) uses a gasification process to produce
substitute natural gas; (3) uses coal as at least 50% of the
total feedstock over the term of any sourcing agreement with a
utility and the remainder of the feedstock may be either
petroleum coke or coal, with all such coal having a high
bituminous rank and greater than 1.7 pounds of sulfur per
million Btu content unless the facility reasonably determines
that it is necessary to use additional petroleum coke to

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deliver additional consumer savings, in which case the facility
shall use coal for at least 35% of the total feedstock over the
term of any sourcing agreement; and (4) captures and sequesters
at least 85% of the total carbon dioxide emissions that the
facility would otherwise emit.
"Clean coal SNG facility" means a facility that uses a
gasification process to produce substitute natural gas, that
sequesters at least 90% of the total carbon dioxide emissions
that the facility would otherwise emit, that uses at least 90%
coal as a feedstock, with all such coal having a high
bituminous rank and greater than 1.7 pounds of sulfur per
million btu content, and that has a valid and effective permit
to construct emission sources and air pollution control
equipment and approval with respect to the federal regulations
for Prevention of Significant Deterioration of Air Quality
(PSD) for the plant pursuant to the federal Clean Air Act;
provided, however, a clean coal SNG brownfield facility shall
not be a clean coal SNG facility.
"Coal gasification unit" means equipment that is designed
to process coal and convert the energy content of coal into
SNG.
"Commission" means the Illinois Commerce Commission.
"Costs incurred in connection with the development and
construction of a facility" means:
(1) the cost of acquisition of all real property,
fixtures, and improvements in connection therewith and

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equipment, personal property, and other property, rights,
and easements acquired that are deemed necessary for the
operation and maintenance of the facility;
(2) financing costs with respect to bonds, notes, and
other evidences of indebtedness of the Agency;
(3) all origination, commitment, utilization,
facility, placement, underwriting, syndication, credit
enhancement, and rating agency fees;
(4) engineering, design, procurement, consulting,
legal, accounting, title insurance, survey, appraisal,
escrow, trustee, collateral agency, interest rate hedging,
interest rate swap, capitalized interest, contingency, as
required by lenders, and other financing costs, and other
expenses for professional services; and
(5) the costs of plans, specifications, site study and
investigation, installation, surveys, other Agency costs
and estimates of costs, and other expenses necessary or
incidental to determining the feasibility of any project,
together with such other expenses as may be necessary or
incidental to the financing, insuring, acquisition, and
construction of a specific project and starting up,
commissioning, and placing that project in operation.
"Delivery services" has the same definition as found in
Section 16-102 of the Public Utilities Act.
"Department" means the Department of Commerce and Economic
Opportunity.

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"Director" means the Director of the Illinois Power Agency.
"Demand-response" means measures that decrease peak
electricity demand or shift demand from peak to off-peak
periods.
"Distributed renewable energy generation device" means a
device that is:
(1) powered by wind, solar thermal energy,
photovoltaic cells and panels, biodiesel, crops and
untreated and unadulterated organic waste biomass, tree
waste, and hydropower that does not involve new
construction or significant expansion of hydropower dams;
(2) interconnected at the distribution system level of
either an electric utility as defined in this Section, an
alternative retail electric supplier as defined in Section
16-102 of the Public Utilities Act, a municipal utility as
defined in Section 3-105 of the Public Utilities Act, or a
rural electric cooperative as defined in Section 3-119 of
the Public Utilities Act;
(3) located on the customer side of the customer's
electric meter and is primarily used to offset that
customer's electricity load; and
(4) limited in nameplate capacity to no more than 2,000
kilowatts.
"Energy efficiency" means measures that reduce the amount
of electricity or natural gas required to achieve a given end
use.

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"Electric utility" has the same definition as found in
Section 16-102 of the Public Utilities Act.
"Facility" means an electric generating unit or a
co-generating unit that produces electricity along with
related equipment necessary to connect the facility to an
electric transmission or distribution system.
"Governmental aggregator" means one or more units of local
government that individually or collectively procure
electricity to serve residential retail electrical loads
located within its or their jurisdiction.
"Initial clean coal facility" means an electric generating
facility using gasification technology or an SNG-ready
generating facility that: (1) has a nameplate capacity of at
least 500 MW; (2) irrevocably commits in its proposed sourcing
agreement to use coal for at least 50% of the total feedstock
over the term of a sourcing agreement, with all coal having
high volatile bituminous rank and greater than 1.7 pounds of
sulfur per million btu content, but this clause (2) shall not
apply if the facility is an SNG-ready generating facility; (3)
is designed to capture and sequester at least 90% of the carbon
dioxide emissions that the portion of the facility, if any,
that produces SNG would otherwise emit and at least 50% of the
total carbon dioxide emissions that the facility as a whole
would otherwise emit, but this clause (3) shall not apply if
the facility is an SNG-ready generating facility; (4) absent an
appeal of a permit or regulatory order, is reasonably capable

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of achieving commercial operation by no later than 5 years
after the execution of the sourcing agreements; (5) has a
feasible financing plan; (6) has a reliable and cost-effective
transmission plan to deliver energy to Commonwealth Edison
Company and Ameren Illinois; and (7) has a power block designed
not to exceed allowable emission rates for sulfur dioxide,
nitrogen oxides, carbon monoxide, particulates, and mercury
for a natural gas-fired combined-cycle facility the same size
as and in the same location as the electric generating facility
at the time the electric generating facility obtains an
approved air permit.
"Large electric customer" means a customer that (1) obtains
retail electric service in the State from an electric utility
or an alternative retail electric supplier and (2) is not a
small electric customer.
"Local government" means a unit of local government as
defined in Section 1 of Article VII of the Illinois
Constitution.
"Municipality" means a city, village, or incorporated
town.
"Person" means any natural person, firm, partnership,
corporation, either domestic or foreign, company, association,
limited liability company, joint stock company, or association
and includes any trustee, receiver, assignee, or personal
representative thereof.
"Project" means the planning, bidding, and construction of

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a facility.
"Public utility" has the same definition as found in
Section 3-105 of the Public Utilities Act.
"Real property" means any interest in land together with
all structures, fixtures, and improvements thereon, including
lands under water and riparian rights, any easements,
covenants, licenses, leases, rights-of-way, uses, and other
interests, together with any liens, judgments, mortgages, or
other claims or security interests related to real property.
"Renewable energy credit" means a tradable credit that
represents the environmental attributes of a certain amount of
energy produced from a renewable energy resource.
"Renewable energy resources" includes energy and its
associated renewable energy credit or renewable energy credits
from wind, solar thermal energy, photovoltaic cells and panels,
biodiesel, anaerobic digestion, crops and untreated and
unadulterated organic waste biomass, tree waste, hydropower
that does not involve new construction or significant expansion
of hydropower dams, and other alternative sources of
environmentally preferable energy. For purposes of this Act,
landfill gas produced in the State is considered a renewable
energy resource. "Renewable energy resources" does not include
the incineration or burning of tires, garbage, general
household, institutional, and commercial waste, industrial
lunchroom or office waste, landscape waste other than tree
waste, railroad crossties, utility poles, or construction or

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demolition debris, other than untreated and unadulterated
waste wood.
"Revenue bond" means any bond, note, or other evidence of
indebtedness issued by the Authority, the principal and
interest of which is payable solely from revenues or income
derived from any project or activity of the Agency.
"Sequester" means permanent storage of carbon dioxide by
injecting it into a saline aquifer, a depleted gas reservoir,
or an oil reservoir, directly or through an enhanced oil
recovery process that may involve intermediate storage,
regardless of whether these activities are conducted by a clean
coal facility, a clean coal SNG facility, a clean coal SNG
brownfield facility, or a party with which a clean coal
facility, the initial clean coal facility, a clean coal SNG
facility, or a clean coal SNG brownfield facility has
contracted for such purposes.
"Service area" has the same definition as found in Section
16-102 of the Public Utilities Act.
"Small electric customer" means a residential retail
electric customer that obtains electric service in the State
from an electric utility or an alternative retail electric
supplier.
"SNG-ready capital costs" means the portion of the capital
costs of an SNG-ready generating facility that are necessary to
accommodate future integrated operation of such generating
facility with one or more coal gasification units, but only to

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the extent such capital costs would not have been part of the
capital costs of a similar electric generating facility that is
not designed to accommodate future integrated operation with
one or more coal gasification units.
"SNG-ready capital rate component" means, for any year, the
portion of the amounts paid under sourcing agreements with the
initial clean coal facility that is attributable to SNG-ready
capital costs being included in the return of capital and
return on capital components of the formula rate.
"SNG-ready generating facility" means an electric
generating facility that is capable of using SNG as a fuel and
is designed to accommodate future integrated operation with one
or more coal gasification units located on or adjacent to the
generating facility site, but with no gasification units
constructed as part of the initial construction of such
facility. An SNG-ready generating facility shall be designed to
accommodate such future integrated operation if its steam
turbine, steam piping, air cooled condenser, condensate and
feedwater systems, and certain heat recovery steam generator
sections (high pressure superheater, low pressure superheater
and reheater) are designed to accommodate the steam and water
flows expected from the coal gasification units and if the
overall plant layout includes reservation of an adjacent plot
space (over which such generating facility holds and shall
maintain site control) for efficient installation of the future
coal gasification units and related equipment, including fuel

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handling equipment.
"Sourcing agreement" means (i) in the case of an electric
utility, an agreement between the owner of a clean coal
facility or initial clean coal facility and such electric
utility, which agreement shall have terms and conditions
meeting the requirements of paragraph (3) of subsection (d) of
Section 1-75, (ii) in the case of an alternative retail
electric supplier, an agreement between the owner of a clean
coal facility or initial clean coal facility and such
alternative retail electric supplier, which agreement shall
have terms and conditions meeting the requirements of Section
16-115(d)(5) of the Public Utilities Act, and (iii) in case of
a gas utility, an agreement between the owner of a clean coal
SNG brownfield facility and the gas utility, which agreement
shall have the terms and conditions meeting the requirements of
subsection (h-1) of Section 9-220 of the Public Utilities Act.
"Substitute natural gas" or "SNG" means a gas manufactured
by gasification of hydrocarbon feedstock, which is
substantially interchangeable in use and distribution with
conventional natural gas.
"Total resource cost test" or "TRC test" means a standard
that is met if, for an investment in energy efficiency or
demand-response measures, the benefit-cost ratio is greater
than one. The benefit-cost ratio is the ratio of the net
present value of the total benefits of the program to the net
present value of the total costs as calculated over the

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lifetime of the measures. A total resource cost test compares
the sum of avoided electric utility costs, representing the
benefits that accrue to the system and the participant in the
delivery of those efficiency measures, as well as other
quantifiable societal benefits, including avoided natural gas
utility costs, to the sum of all incremental costs of end-use
measures that are implemented due to the program (including
both utility and participant contributions), plus costs to
administer, deliver, and evaluate each demand-side program, to
quantify the net savings obtained by substituting the
demand-side program for supply resources. In calculating
avoided costs of power and energy that an electric utility
would otherwise have had to acquire, reasonable estimates shall
be included of financial costs likely to be imposed by future
regulations and legislation on emissions of greenhouse gases.
(Source: P.A. 96-33, eff. 7-10-09; 96-159, eff. 8-10-09;
96-784, eff. 8-28-09; 96-1000, eff. 7-2-10; 97-96, eff.
7-13-11; 97-239, eff. 8-2-11; 97-491, eff. 8-22-11; 97-616,
eff. 10-26-11; 97-813, eff. 7-13-12.)
(20 ILCS 3855/1-20)
Sec. 1-20. General powers of the Agency.
(a) The Agency is authorized to do each of the following:
(1) Develop electricity procurement plans to ensure
adequate, reliable, affordable, efficient, and
environmentally sustainable electric service at the lowest

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total cost over time, taking into account any benefits of
price stability, for electric utilities that on December
31, 2005 provided electric service to at least 100,000
customers in Illinois and for small multi-jurisdictional
electric utilities that (A) on December 31, 2005 served
less than 100,000 customers in Illinois and (B) request a
procurement plan for their Illinois jurisdictional load.
The procurement plans shall be updated on an annual basis
and shall include electricity generated from renewable
resources sufficient to achieve the standards specified in
this Act.
(2) Conduct competitive procurement processes to
procure the supply resources identified in the procurement
plan, pursuant to Section 16-111.5 of the Public Utilities
Act.
(3) Develop electric generation and co-generation
facilities that use indigenous coal or renewable
resources, or both, financed with bonds issued by the
Illinois Finance Authority.
(4) Supply electricity from the Agency's facilities at
cost to one or more of the following: municipal electric
systems, governmental aggregators, or rural electric
cooperatives in Illinois.
(b) Except as otherwise limited by this Act, the Agency has
all of the powers necessary or convenient to carry out the
purposes and provisions of this Act, including without

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limitation, each of the following:
(1) To have a corporate seal, and to alter that seal at
pleasure, and to use it by causing it or a facsimile to be
affixed or impressed or reproduced in any other manner.
(2) To use the services of the Illinois Finance
Authority necessary to carry out the Agency's purposes.
(3) To negotiate and enter into loan agreements and
other agreements with the Illinois Finance Authority.
(4) To obtain and employ personnel and hire consultants
that are necessary to fulfill the Agency's purposes, and to
make expenditures for that purpose within the
appropriations for that purpose.
(5) To purchase, receive, take by grant, gift, devise,
bequest, or otherwise, lease, or otherwise acquire, own,
hold, improve, employ, use, and otherwise deal in and with,
real or personal property whether tangible or intangible,
or any interest therein, within the State.
(6) To acquire real or personal property, whether
tangible or intangible, including without limitation
property rights, interests in property, franchises,
obligations, contracts, and debt and equity securities,
and to do so by the exercise of the power of eminent domain
in accordance with Section 1-21; except that any real
property acquired by the exercise of the power of eminent
domain must be located within the State.
(7) To sell, convey, lease, exchange, transfer,

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abandon, or otherwise dispose of, or mortgage, pledge, or
create a security interest in, any of its assets,
properties, or any interest therein, wherever situated.
(8) To purchase, take, receive, subscribe for, or
otherwise acquire, hold, make a tender offer for, vote,
employ, sell, lend, lease, exchange, transfer, or
otherwise dispose of, mortgage, pledge, or grant a security
interest in, use, and otherwise deal in and with, bonds and
other obligations, shares, or other securities (or
interests therein) issued by others, whether engaged in a
similar or different business or activity.
(9) To make and execute agreements, contracts, and
other instruments necessary or convenient in the exercise
of the powers and functions of the Agency under this Act,
including contracts with any person, including personal
service contracts, or with any local government, State
agency, or other entity; and all State agencies and all
local governments are authorized to enter into and do all
things necessary to perform any such agreement, contract,
or other instrument with the Agency. No such agreement,
contract, or other instrument shall exceed 40 years.
(10) To lend money, invest and reinvest its funds in
accordance with the Public Funds Investment Act, and take
and hold real and personal property as security for the
payment of funds loaned or invested.
(11) To borrow money at such rate or rates of interest

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as the Agency may determine, issue its notes, bonds, or
other obligations to evidence that indebtedness, and
secure any of its obligations by mortgage or pledge of its
real or personal property, machinery, equipment,
structures, fixtures, inventories, revenues, grants, and
other funds as provided or any interest therein, wherever
situated.
(12) To enter into agreements with the Illinois Finance
Authority to issue bonds whether or not the income
therefrom is exempt from federal taxation.
(13) To procure insurance against any loss in
connection with its properties or operations in such amount
or amounts and from such insurers, including the federal
government, as it may deem necessary or desirable, and to
pay any premiums therefor.
(14) To negotiate and enter into agreements with
trustees or receivers appointed by United States
bankruptcy courts or federal district courts or in other
proceedings involving adjustment of debts and authorize
proceedings involving adjustment of debts and authorize
legal counsel for the Agency to appear in any such
proceedings.
(15) To file a petition under Chapter 9 of Title 11 of
the United States Bankruptcy Code or take other similar
action for the adjustment of its debts.
(16) To enter into management agreements for the

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operation of any of the property or facilities owned by the
Agency.
(17) To enter into an agreement to transfer and to
transfer any land, facilities, fixtures, or equipment of
the Agency to one or more municipal electric systems,
governmental aggregators, or rural electric agencies or
cooperatives, for such consideration and upon such terms as
the Agency may determine to be in the best interest of the
citizens of Illinois.
(18) To enter upon any lands and within any building
whenever in its judgment it may be necessary for the
purpose of making surveys and examinations to accomplish
any purpose authorized by this Act.
(19) To maintain an office or offices at such place or
places in the State as it may determine.
(20) To request information, and to make any inquiry,
investigation, survey, or study that the Agency may deem
necessary to enable it effectively to carry out the
provisions of this Act.
(21) To accept and expend appropriations.
(22) To engage in any activity or operation that is
incidental to and in furtherance of efficient operation to
accomplish the Agency's purposes, including hiring
employees that the Director deems essential for the
operations of the Agency.
(23) To adopt, revise, amend, and repeal rules with

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respect to its operations, properties, and facilities as
may be necessary or convenient to carry out the purposes of
this Act, subject to the provisions of the Illinois
Administrative Procedure Act and Sections 1-22 and 1-35 of
this Act.
(24) To establish and collect charges and fees as
described in this Act.
(25) To conduct competitive gasification feedstock
procurement processes to procure the feedstocks for the
clean coal SNG brownfield facility in accordance with the
requirements of Section 1-78 of this Act.
(26) To review, revise, and approve sourcing
agreements and mediate and resolve disputes between gas
utilities and the clean coal SNG brownfield facility
pursuant to subsection (h-1) of Section 9-220 of the Public
Utilities Act.
(27) To review, revise, and approve sourcing
agreements and mediate and resolve disputes between
electric utilities or alternative retail electric
suppliers and the initial clean coal facility pursuant to
paragraph (4) of subsection (d) of Section 1-75 of this
Act.
(28) To conduct competitive gasification feedstock
procurement processes to procure the feedstocks for the
initial clean coal facility in accordance with the
requirements of Section 1-79 of this Act.

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(Source: P.A. 96-784, eff. 8-28-09; 96-1000, eff. 7-2-10;
97-96, eff. 7-13-11; 97-325, eff. 8-12-11; 97-618, eff.
10-26-11; 97-813, eff. 7-13-12.)
(20 ILCS 3855/1-75)
Sec. 1-75. Planning and Procurement Bureau. The Planning
and Procurement Bureau has the following duties and
responsibilities:
(a) The Planning and Procurement Bureau shall each year,
beginning in 2008, develop procurement plans and conduct
competitive procurement processes in accordance with the
requirements of Section 16-111.5 of the Public Utilities Act
for the eligible retail customers of electric utilities that on
December 31, 2005 provided electric service to at least 100,000
customers in Illinois. The Planning and Procurement Bureau
shall also develop procurement plans and conduct competitive
procurement processes in accordance with the requirements of
Section 16-111.5 of the Public Utilities Act for the eligible
retail customers of small multi-jurisdictional electric
utilities that (i) on December 31, 2005 served less than
100,000 customers in Illinois and (ii) request a procurement
plan for their Illinois jurisdictional load. This Section shall
not apply to a small multi-jurisdictional utility until such
time as a small multi-jurisdictional utility requests the
Agency to prepare a procurement plan for their Illinois
jurisdictional load. For the purposes of this Section, the term

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"eligible retail customers" has the same definition as found in
Section 16-111.5(a) of the Public Utilities Act.
(1) The Agency shall each year, beginning in 2008, as
needed, issue a request for qualifications for experts or
expert consulting firms to develop the procurement plans in
accordance with Section 16-111.5 of the Public Utilities
Act. In order to qualify an expert or expert consulting
firm must have:
(A) direct previous experience assembling
large-scale power supply plans or portfolios for
end-use customers;
(B) an advanced degree in economics, mathematics,
engineering, risk management, or a related area of
study;
(C) 10 years of experience in the electricity
sector, including managing supply risk;
(D) expertise in wholesale electricity market
rules, including those established by the Federal
Energy Regulatory Commission and regional transmission
organizations;
(E) expertise in credit protocols and familiarity
with contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or

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the affected electric utilities.
(2) The Agency shall each year, as needed, issue a
request for qualifications for a procurement administrator
to conduct the competitive procurement processes in
accordance with Section 16-111.5 of the Public Utilities
Act. In order to qualify an expert or expert consulting
firm must have:
(A) direct previous experience administering a
large-scale competitive procurement process;
(B) an advanced degree in economics, mathematics,
engineering, or a related area of study;
(C) 10 years of experience in the electricity
sector, including risk management experience;
(D) expertise in wholesale electricity market
rules, including those established by the Federal
Energy Regulatory Commission and regional transmission
organizations;
(E) expertise in credit and contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the affected electric utilities.
(3) The Agency shall provide affected utilities and
other interested parties with the lists of qualified
experts or expert consulting firms identified through the

HB0103 - 23 - LRB098 04222 AMC 34247 b
request for qualifications processes that are under
consideration to develop the procurement plans and to serve
as the procurement administrator. The Agency shall also
provide each qualified expert's or expert consulting
firm's response to the request for qualifications. All
information provided under this subparagraph shall also be
provided to the Commission. The Agency may provide by rule
for fees associated with supplying the information to
utilities and other interested parties. These parties
shall, within 5 business days, notify the Agency in writing
if they object to any experts or expert consulting firms on
the lists. Objections shall be based on:
(A) failure to satisfy qualification criteria;
(B) identification of a conflict of interest; or
(C) evidence of inappropriate bias for or against
potential bidders or the affected utilities.
The Agency shall remove experts or expert consulting
firms from the lists within 10 days if there is a
reasonable basis for an objection and provide the updated
lists to the affected utilities and other interested
parties. If the Agency fails to remove an expert or expert
consulting firm from a list, an objecting party may seek
review by the Commission within 5 days thereafter by filing
a petition, and the Commission shall render a ruling on the
petition within 10 days. There is no right of appeal of the
Commission's ruling.

HB0103 - 24 - LRB098 04222 AMC 34247 b
(4) The Agency shall issue requests for proposals to
the qualified experts or expert consulting firms to develop
a procurement plan for the affected utilities and to serve
as procurement administrator.
(5) The Agency shall select an expert or expert
consulting firm to develop procurement plans based on the
proposals submitted and shall award contracts of up to 5
years to those selected.
(6) The Agency shall select an expert or expert
consulting firm, with approval of the Commission, to serve
as procurement administrator based on the proposals
submitted. If the Commission rejects, within 5 days, the
Agency's selection, the Agency shall submit another
recommendation within 3 days based on the proposals
submitted. The Agency shall award a 5-year contract to the
expert or expert consulting firm so selected with
Commission approval.
(a-5) The Planning and Procurement Bureau shall at least
every 5 years beginning in 2014 develop feedstock procurement
plans and conduct competitive feedstock procurement processes
in accordance with the requirements of Section 1-79 of this
Act.
(1) The Agency shall, at least once every 5 years
beginning in 2014, issue a request for qualifications for
experts or expert consulting firms to develop the feedstock
procurement plans in accordance with Section 1-79 of this

HB0103 - 25 - LRB098 04222 AMC 34247 b
Act. In order to qualify, an expert or, in the case of an
expert consulting firm, the individual who shall be
directly responsible for the work, must have:
(A) direct previous experience assembling large
scale feedstock supply plans or portfolios involving
coal and natural gas for industrial customers;
(B) an advanced degree in economics, mathematics,
engineering, risk management, or a related area of
study;
(C) ten years of experience in the energy sector,
including coal and gas procurement and managing fuel
supply risk;
(D) expertise in the feedstock markets, which may
be particularized to the specific type of feedstock to
be purchased in that procurement event;
(E) expertise in credit protocols and familiarity
with contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the initial clean coal facility.
(2) The Agency shall at least every 5 years beginning
in 2014, as needed, issue a request for qualifications for
a feedstock procurement administrator to conduct the
competitive feedstock procurement processes in accordance

HB0103 - 26 - LRB098 04222 AMC 34247 b
with Section 1-79 of this Act. In order to qualify, an
expert or, in the case of an expert consulting firm, the
individual who shall be directly responsible for the work,
must have:
(A) direct previous experience administering a
large scale competitive feedstock procurement process
involving coal and natural gas;
(B) an advanced degree in economics, mathematics,
engineering, or a related area of study;
(C) ten years of experience in the energy sector,
including coal and gas procurement and managing fuel
supply risk;
(D) expertise in feedstock market rules and
practices, which may be particularized to the specific
type of feedstock to be purchased in that procurement
event;
(E) expertise in credit and contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the initial clean coal facility.
(3) The Agency shall provide the initial clean coal
facility and other interested parties with the lists of
qualified experts or expert consulting firms identified
through the request for qualifications processes that are

HB0103 - 27 - LRB098 04222 AMC 34247 b
under consideration to develop the feedstock procurement
plans and to serve as the feedstock procurement
administrator. The Agency shall also provide the initial
clean coal facility and other interested parties with each
qualified expert's or expert consulting firm's response to
the request for qualifications. All information provided
under this subparagraph (3) shall also be provided to the
Commission. The Agency may provide by rule for fees
associated with supplying the information to the initial
clean coal facility and other interested parties. The
initial clean coal facility and other interested parties
shall, within 5 business days after receiving the lists and
information, notify the Agency in writing if they object to
any experts or expert consulting firms on the lists.
Objections shall be based on:
(A) failure to satisfy qualification criteria;
(B) identification of a conflict of interest; or
(C) evidence of inappropriate bias for or against
potential bidders or the initial clean coal facility.
The Agency shall remove experts or expert consulting
firms from the lists within 10 days after receiving the
objections if there is a reasonable basis for an objection
and provide the updated lists to the initial clean coal
facility and other interested parties. If the Agency fails
to remove an expert or expert consulting firm from a list,
then an objecting party may seek review by the Commission

HB0103 - 28 - LRB098 04222 AMC 34247 b
within 5 days thereafter by filing a petition, and the
Commission shall render a ruling on the petition within 10
days. There is no right of appeal of the Commission's
ruling.
(4) The Agency shall issue requests for proposals to
the qualified experts or expert consulting firms to develop
a feedstock procurement plan for the initial clean coal
facility and to serve as feedstock procurement
administrator.
(5) The Agency shall select an expert or expert
consulting firm to develop feedstock procurement plans
based on the proposals submitted and shall award at least
one-year contracts to those selected with an option for the
Agency for renewal for an additional length of time equal
to the term of the contract.
(6) The Agency shall select, with approval of the
Commission, an expert or expert consulting firm to serve as
feedstock procurement administrator based on the proposals
submitted. If the Commission rejects the Agency's
selection within 5 days after being notified of the
Agency's selection, then the Agency shall submit another
recommendation within 3 days after the Commission's
rejection based on the proposals submitted. The Agency
shall award a 5-year contract to the expert or expert
consulting firm so selected with Commission approval with
an option for the Agency for a 5-year renewal.

HB0103 - 29 - LRB098 04222 AMC 34247 b
(7) If and for so long as the initial clean coal
facility is an SNG-ready generating facility, the expert or
consultant that shall develop the feedstock procurement
plan and the feedstock procurement administrator, each as
selected pursuant to this subsection (a-5), shall not be
required to have experience in coal procurement.
(b) The experts or expert consulting firms retained by the
Agency under subsection (a) of this Section shall, as
appropriate, prepare procurement plans, and conduct a
competitive procurement process as prescribed in Section
16-111.5 of the Public Utilities Act, to ensure adequate,
reliable, affordable, efficient, and environmentally
sustainable electric service at the lowest total cost over
time, taking into account any benefits of price stability, for
eligible retail customers of electric utilities that on
December 31, 2005 provided electric service to at least 100,000
customers in the State of Illinois, and for eligible Illinois
retail customers of small multi-jurisdictional electric
utilities that (i) on December 31, 2005 served less than
100,000 customers in Illinois and (ii) request a procurement
plan for their Illinois jurisdictional load.
(b-5) The experts or expert consulting firms retained by
the Agency pursuant to subsection (a-5) of this Section shall,
as appropriate, prepare feedstock procurement plans and
conduct a competitive feedstock procurement process as
prescribed in Section 1-79 of this Act to ensure adequate,

HB0103 - 30 - LRB098 04222 AMC 34247 b
reliable, affordable feedstocks, taking into account any
benefits of price stability, for the initial clean coal
facility.
(c) Renewable portfolio standard.
(1) The procurement plans under subsection (a) of this
Section shall include cost-effective renewable energy
resources. A minimum percentage of each utility's total
supply to serve the load of eligible retail customers, as
defined in Section 16-111.5(a) of the Public Utilities Act,
procured for each of the following years shall be generated
from cost-effective renewable energy resources: at least
2% by June 1, 2008; at least 4% by June 1, 2009; at least 5%
by June 1, 2010; at least 6% by June 1, 2011; at least 7% by
June 1, 2012; at least 8% by June 1, 2013; at least 9% by
June 1, 2014; at least 10% by June 1, 2015; and increasing
by at least 1.5% each year thereafter to at least 25% by
June 1, 2025. To the extent that it is available, at least
75% of the renewable energy resources used to meet these
standards shall come from wind generation and, beginning on
June 1, 2011, at least the following percentages of the
renewable energy resources used to meet these standards
shall come from photovoltaics on the following schedule:
0.5% by June 1, 2012, 1.5% by June 1, 2013; 3% by June 1,
2014; and 6% by June 1, 2015 and thereafter. Of the
renewable energy resources procured pursuant to this
Section, at least the following percentages shall come from

HB0103 - 31 - LRB098 04222 AMC 34247 b
distributed renewable energy generation devices: 0.5% by
June 1, 2013, 0.75% by June 1, 2014, and 1% by June 1, 2015
and thereafter. To the extent available, half of the
renewable energy resources procured from distributed
renewable energy generation shall come from devices of less
than 25 kilowatts in nameplate capacity. Renewable energy
resources procured from distributed generation devices may
also count towards the required percentages for wind and
solar photovoltaics. Procurement of renewable energy
resources from distributed renewable energy generation
devices shall be done on an annual basis through multi-year
contracts of no less than 5 years, and shall consist solely
of renewable energy credits.
The Agency shall create credit requirements for
suppliers of distributed renewable energy. In order to
minimize the administrative burden on contracting
entities, the Agency shall solicit the use of third-party
organizations to aggregate distributed renewable energy
into groups of no less than one megawatt in installed
capacity. These third-party organizations shall administer
contracts with individual distributed renewable energy
generation device owners. An individual distributed
renewable energy generation device owner shall have the
ability to measure the output of his or her distributed
renewable energy generation device.
For purposes of this subsection (c), "cost-effective"

HB0103 - 32 - LRB098 04222 AMC 34247 b
means that the costs of procuring renewable energy
resources do not cause the limit stated in paragraph (2) of
this subsection (c) to be exceeded and do not exceed
benchmarks based on market prices for renewable energy
resources in the region, which shall be developed by the
procurement administrator, in consultation with the
Commission staff, Agency staff, and the procurement
monitor and shall be subject to Commission review and
approval.
(2) For purposes of this subsection (c), the required
procurement of cost-effective renewable energy resources
for a particular year shall be measured as a percentage of
the actual amount of electricity (megawatt-hours) supplied
by the electric utility to eligible retail customers in the
planning year ending immediately prior to the procurement.
For purposes of this subsection (c), the amount paid per
kilowatthour means the total amount paid for electric
service expressed on a per kilowatthour basis. For purposes
of this subsection (c), the total amount paid for electric
service includes without limitation amounts paid for
supply, transmission, distribution, surcharges, and add-on
taxes.
Notwithstanding the requirements of this subsection
(c), the total of renewable energy resources procured
pursuant to the procurement plan for any single year shall
be reduced by an amount necessary to limit the annual

HB0103 - 33 - LRB098 04222 AMC 34247 b
estimated average net increase due to the costs of these
resources included in the amounts paid by eligible retail
customers in connection with electric service to:
(A) in 2008, no more than 0.5% of the amount paid
per kilowatthour by those customers during the year
ending May 31, 2007;
(B) in 2009, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2008 or 1% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2007;
(C) in 2010, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2009 or 1.5% of the
amount paid per kilowatthour by those customers during
the year ending May 31, 2007;
(D) in 2011, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2010 or 2% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2007; and
(E) thereafter, the amount of renewable energy
resources procured pursuant to the procurement plan
for any single year shall be reduced by an amount
necessary to limit the estimated average net increase
due to the cost of these resources included in the

HB0103 - 34 - LRB098 04222 AMC 34247 b
amounts paid by eligible retail customers in
connection with electric service to no more than the
greater of 2.015% of the amount paid per kilowatthour
by those customers during the year ending May 31, 2007
or the incremental amount per kilowatthour paid for
these resources in 2011.
No later than June 30, 2011, the Commission shall
review the limitation on the amount of renewable energy
resources procured pursuant to this subsection (c) and
report to the General Assembly its findings as to
whether that limitation unduly constrains the
procurement of cost-effective renewable energy
resources.
(3) Through June 1, 2011, renewable energy resources
shall be counted for the purpose of meeting the renewable
energy standards set forth in paragraph (1) of this
subsection (c) only if they are generated from facilities
located in the State, provided that cost-effective
renewable energy resources are available from those
facilities. If those cost-effective resources are not
available in Illinois, they shall be procured in states
that adjoin Illinois and may be counted towards compliance.
If those cost-effective resources are not available in
Illinois or in states that adjoin Illinois, they shall be
purchased elsewhere and shall be counted towards
compliance. After June 1, 2011, cost-effective renewable

HB0103 - 35 - LRB098 04222 AMC 34247 b
energy resources located in Illinois and in states that
adjoin Illinois may be counted towards compliance with the
standards set forth in paragraph (1) of this subsection
(c). If those cost-effective resources are not available in
Illinois or in states that adjoin Illinois, they shall be
purchased elsewhere and shall be counted towards
compliance.
(4) The electric utility shall retire all renewable
energy credits used to comply with the standard.
(5) Beginning with the year commencing June 1, 2010, an
electric utility subject to this subsection (c) shall apply
the lesser of the maximum alternative compliance payment
rate or the most recent estimated alternative compliance
payment rate for its service territory for the
corresponding compliance period, established pursuant to
subsection (d) of Section 16-115D of the Public Utilities
Act to its retail customers that take service pursuant to
the electric utility's hourly pricing tariff or tariffs.
The electric utility shall retain all amounts collected as
a result of the application of the alternative compliance
payment rate or rates to such customers, and, beginning in
2011, the utility shall include in the information provided
under item (1) of subsection (d) of Section 16-111.5 of the
Public Utilities Act the amounts collected under the
alternative compliance payment rate or rates for the prior
year ending May 31. Notwithstanding any limitation on the

HB0103 - 36 - LRB098 04222 AMC 34247 b
procurement of renewable energy resources imposed by item
(2) of this subsection (c), the Agency shall increase its
spending on the purchase of renewable energy resources to
be procured by the electric utility for the next plan year
by an amount equal to the amounts collected by the utility
under the alternative compliance payment rate or rates in
the prior year ending May 31. Beginning April 1, 2012, and
each year thereafter, the Agency shall prepare a public
report for the General Assembly and Illinois Commerce
Commission that shall include, but not necessarily be
limited to:
(A) a comparison of the costs associated with the
Agency's procurement of renewable energy resources to
(1) the Agency's costs associated with electricity
generated by other types of generation facilities and
(2) the benefits associated with the Agency's
procurement of renewable energy resources; and
(B) an analysis of the rate impacts associated with
the Illinois Power Agency's procurement of renewable
resources, including, but not limited to, any
long-term contracts, on the eligible retail customers
of electric utilities.
The analysis shall include the Agency's estimate of the
total dollar impact that the Agency's procurement of
renewable resources has had on the annual electricity bills
of the customer classes that comprise each eligible retail

HB0103 - 37 - LRB098 04222 AMC 34247 b
customer class taking service from an electric utility. The
Agency's report shall also analyze how the operation of the
alternative compliance payment mechanism, any long-term
contracts, or other aspects of the applicable renewable
portfolio standards impacts the rates of customers of
alternative retail electric suppliers.
(d) Clean coal portfolio standard.
(1) The General Assembly finds that there are abundant
and cost-effective supplies of high volatile rank
bituminous coal with a sulfur content of at least 1.7
pounds per million btu energy content, and that it is
technologically feasible to produce electric energy using
such coal supplies reliably. The General Assembly further
finds that state-of-the-art gasification systems are
available to convert coal supplies with the foregoing
characteristics into gas and that it is feasible to use
such gas to generate electric energy without exceeding
allowable emission rates for sulfur dioxide, nitrogen
oxides, carbon monoxide, particulates, and mercury for a
natural gas-fired combined-cycle facility of the same size
as and in the same location as a clean coal facility
incorporating a gasification system and a combined cycle
power block. The General Assembly also finds that it is
feasible to engineer and construct systems designed to
capture and sequester the percentages of the carbon dioxide
emissions from clean coal facilities as specified in this

HB0103 - 38 - LRB098 04222 AMC 34247 b
Act. Accordingly, the General Assembly finds it necessary
for the health, safety, welfare, and prosperity of Illinois
citizens to require Illinois electric utilities and
alternative retail electric suppliers to contract with the
initial clean coal facility to meet a portion of the needs
of each such electric utility's and alternative retail
electric supplier's retail load on the terms and conditions
described under this Act.
The procurement plans under subsection (a) of this
Section shall include electricity generated using clean
coal. Each electric utility shall enter into one or more
sourcing agreements with the initial clean coal facility,
as provided in paragraph (3) of this subsection (d),
covering electricity generated by the initial clean coal
facility representing (A) at least 5% of that each
utility's total supply to serve the load of eligible retail
customers in the immediately preceding year 2015 and each
year thereafter, as described in paragraph (3) of this
subsection (d), or (B) such lesser amount as may be
available from the initial clean coal facility, reduced by
subject to the limits on the amount of power to be
purchased specified in paragraph (2) of this subsection
(d). It is the goal of the State that by January 1, 2025,
25% of the electricity used in the State shall be generated
by cost-effective clean coal facilities. For purposes of
this subsection (d), "cost-effective" means that the

HB0103 - 39 - LRB098 04222 AMC 34247 b
expenditures pursuant to such sourcing agreements do not
cause the limit stated in paragraph (2) of this subsection
(d) to be exceeded and do not exceed cost-based benchmarks,
which shall be developed to assess all expenditures
pursuant to such sourcing agreements covering electricity
generated by clean coal facilities, other than the initial
clean coal facility, by the procurement administrator, in
consultation with the Commission staff, Agency staff, and
the procurement monitor and shall be subject to Commission
review and approval.
A utility party to a sourcing agreement shall
immediately retire any emission credits that it receives in
connection with the electricity covered by such agreement.
Utilities shall maintain adequate records documenting
the purchases under the sourcing agreement to comply with
this subsection (d) and shall file an accounting with the
load forecast that must be filed with the Agency by July 15
of each year, in accordance with subsection (d) of Section
16-111.5 of the Public Utilities Act.
A utility shall be deemed to have complied with the
clean coal portfolio standard specified in this subsection
(d) if the utility enters into a sourcing agreement as
required by this subsection (d).
(2) For purposes of this subsection (d), the required
execution of sourcing agreements with the initial clean
coal facility for a particular year shall be measured as a

HB0103 - 40 - LRB098 04222 AMC 34247 b
percentage of the actual amount of electricity
(megawatt-hours) supplied by the electric utility to
eligible retail customers in the the immediately preceding
year planning year ending immediately prior to the
agreement's execution. For purposes of this subsection
(d), the amount paid per kilowatthour means the total
amount paid for electric service expressed on a per
kilowatthour basis. For purposes of this subsection (d),
the total amount paid for electric service includes without
limitation amounts paid for supply, transmission,
distribution, surcharges and add-on taxes.
Notwithstanding the requirements of this subsection
(d), the total amount paid under sourcing agreements with
clean coal facilities pursuant to the procurement plan for
any given year shall be reduced by an amount necessary to
limit the annual estimated average net increase due to the
costs of these resources included in the amounts paid by
eligible retail customers in connection with electric
service to:
(A) in 2010, no more than 0.5% of the amount paid
per kilowatthour by those customers during the year
ending May 31, 2009;
(B) in 2011, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2010 or 1% of the amount
paid per kilowatthour by those customers during the

HB0103 - 41 - LRB098 04222 AMC 34247 b
year ending May 31, 2009;
(C) in 2012, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2011 or 1.5% of the
amount paid per kilowatthour by those customers during
the year ending May 31, 2009;
(D) in 2013, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2012 or 2% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009; and
(E) thereafter, the total amount paid under
sourcing agreements with clean coal facilities
pursuant to the procurement plan for any single year
shall be reduced by an amount necessary to limit the
estimated average net increase due to the cost of these
resources included in the amounts paid by eligible
retail customers in connection with electric service
to no more than the greater of (i) 2.015% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009 or (ii) the incremental amount
per kilowatthour paid for these resources in 2013.
These requirements may be altered only as provided by
statute.
No later than June 30, 2015, the Commission shall
review the limitation on the total amount paid under

HB0103 - 42 - LRB098 04222 AMC 34247 b
sourcing agreements, if any, with clean coal facilities
pursuant to this subsection (d) and report to the General
Assembly its findings as to whether that limitation unduly
constrains the amount of electricity generated by
cost-effective clean coal facilities that is covered by
sourcing agreements.
Notwithstanding the requirements of this subsection
(d), the total amount purchased under sourcing agreements
with the initial clean coal facility pursuant to the
procurement plan for any given year shall be reduced by an
amount necessary to limit the annual estimated average net
increase due to the costs of these resources included in
the amounts paid by eligible retail customers in connection
with electric service to:
(A) in 2013, no more than 0.5% of the amount paid
per kilowatthour by those customers during the year
ending May 31, 2009;
(B) in 2014, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2013 or 1% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009;
(C) in 2015, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2014 or 1.5% of the
amount paid per kilowatthour by those customers during

HB0103 - 43 - LRB098 04222 AMC 34247 b
the year ending May 31, 2009;
(D) in 2016, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2015 or 2% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009; and
(E) thereafter:
(i) A calculation shall be made for each year
to determine whether the estimated average net per
killowatthour increase due to the cost of electric
power purchased under sourcing agreements and
included in the amounts paid by small electric
customers in connection with electric service
exceeds the greater of (1) 2.015% of the amount
paid per kilowatthour by eligible retail customers
during the year ending May 31, 2009 or (2) the
incremental amount per kilowatthour paid for these
resources in 2016. If and for so long as the
initial clean coal facility is an SNG-ready
generating facility, the percentage in the
immediately preceding sentence shall be 0.75% and
not 2.015%. These requirements may be altered only
as provided by statute. For purposes of such
calculation, such average net per kilowatthour
increase in rates of small electric customers that
are not eligible retail customers shall be deemed

HB0103 - 44 - LRB098 04222 AMC 34247 b
to be equal to such average net per kilowatthour
increase in rates of eligible retail customers.
(ii) If, for any year, the small customer rate
impact would exceed the limitation described in
item (i) of this subparagraph (E), the clean coal
fraction for each clean coal electricity buyer
shall be adjusted for such year in a manner that
shall result in (1) the quantity of electric power
projected to be purchased by each clean coal
electricity buyer being reduced by an amount
sufficient to result in such deemed rate impact on
all small electric customers (whether served by
electric utilities or alternative retail electric
suppliers) being equal to such limitation for such
year and (2) any such reductions in amounts
allocated to the clean coal electricity buyers in
order to achieve the objective described in clause
(1) of this item (ii) being allocated to, and
purchased and paid for by, the clean coal
electricity buyers in proportion to their retail
sales to large electric customers.
(iii) Each year, after taking account of the
adjustment, if any, provided for in item (ii) of
this subparagraph (E), a calculation shall be made
to determine whether the large customer deemed
rate impact for such year exceeds $0.005 per

HB0103 - 45 - LRB098 04222 AMC 34247 b
kilowatthour. If and for so long as the initial
clean coal facility is an SNG-ready generating
facility, the amount in the immediately preceding
sentence shall be $0.00085, and not $0.005. The
"large customer deemed rate impact" for any year is
the projected increase in electric rates of large
electric customers (whether served by electric
utilities or alternative retail electric
suppliers) due to the cost of electric power
purchased under sourcing agreements to the extent
it is based on each clean coal electricity buyer's
retail sales to large electric customers, which
shall be calculated in substantially the same
manner as the calculation of rate impact on small
electric customers, and shall assume that such
cost of purchases under sourcing agreements is
passed through proportionally by the clean coal
electricity buyers to their large electric
customers. The calculation of the large customer
deemed rate impact shall (1) assume that the total
retail sales (expressed in kilowatthours sold) to
large electric customers by all clean coal
electricity buyers for any year is the greater of
the actual amount of such sales in such year and
the amount of such sales in 2009 and (2) exclude
from the calculation any actual costs for such year

HB0103 - 46 - LRB098 04222 AMC 34247 b
incurred by the initial clean coal facility to the
extent such costs exceed the corresponding amount
assumed in the "reference case" of the facility
cost report for the initial clean coal facility for
such year and are not principally within the
reasonable control of the initial clean coal
facility.
Any operating costs or revenues deviating from
the corresponding costs assumed in the "reference
case" of the facility cost report for the initial
clean coal facility as a result of changes in
market prices, including, but not limited to,
prices of coal, natural gas, electricity,
by-products, and emissions allowances, shall be
deemed to be outside of the reasonable control of
the initial clean coal facility and excluded from
the calculation.
Any costs exceeding the corresponding costs
assumed in the "reference case" of the facility
cost report for the initial clean coal facility as
a result of changes in capital costs, fixed
operating costs, variable operating costs,
operating efficiency, and availability, except in
each case to the extent resulting from a change in
market prices, as described in the immediately
preceding paragraph, or from a change in law, as

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defined in subsection (b) of Section 1-76 of this
Act, shall be deemed to be within the reasonable
control of the initial clean coal facility and
included in the calculation.
If and for so long as the initial clean coal
facility is an SNG-ready generating facility,
clause (2) of the fourth sentence and all of the
second and third paragraphs of this item (iii)
shall not apply.
(iv) If, for any year, the large customer
deemed rate impact would exceed the limitation
described in item (iii) of this subparagraph (E),
the quantity of electric power required to be
purchased by each clean coal electricity buyer
that serves large electric customers under its
sourcing agreement for such year shall be reduced
by such amount as will result in the large customer
deemed rate impact being equal to such limitation
for such year, and the clean coal fractions of each
clean coal electricity buyer that serves large
electric customers shall be adjusted for such year
to reflect this reduction; provided, however, that
the reduction under this item (iv) shall not exceed
in any year an amount that would result in revenues
under the sourcing agreements being reduced by
more than $50,000,000 in the aggregate for such

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year, but this provision shall not apply if and for
so long as the initial clean coal facility is an
SNG-ready generating facility. Any quantities of
electric power not required to be purchased
pursuant to the operation of the immediately
preceding sentence may be disposed of by the
initial clean coal facility for its own account,
and the proceeds of any sales of such electric
power shall not be included in the formula rate.
(v) The details of the calculations
contemplated by this subparagraph (E) shall be set
forth in the sourcing agreements.
(vi) No later than June 30, 2016, the
Commission shall review the limitation on the
total amount paid under sourcing agreements, if
any, with the initial clean coal facility pursuant
to this subsection (d) and report to the General
Assembly its findings as to the effect of the
limitation on the initial clean coal facility,
electric utilities, alternative retail electric
suppliers, and customers of the electric utilities
and the alternative retail electric suppliers.
(3) Initial clean coal facility. In order to promote
the use development of clean coal electric power facilities
in Illinois, each electric utility subject to this Section
shall execute a sourcing agreement to source electricity

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from the initial clean coal facility. The Agency shall
accept applications to be designated the initial clean coal
facility for a period of 30 days after the effective date
of this amendatory Act of the 98th General Assembly. Each
application shall include a proposed sourcing agreement in
accordance with the requirements of this paragraph (3) and
information showing that the applicant meets the other
criteria set out in the definition of initial clean coal
facility provided in Section 1-10 of this Act. In the event
that only one proposed initial clean coal facility that
meets each of the requirements submits a proposed sourcing
agreement to the Agency within that time period, the Agency
shall select such proposed initial clean coal facility as
the initial clean coal facility. In the event that more
than one proposed initial clean coal facility that meets
each of the requirements submit a proposed sourcing
agreement to the Agency within that time period, the Agency
shall select as the initial clean coal facility the
electric generating facility that the Agency determines
best promotes the needs and interests of the citizens of
the State of Illinois. In making such determination, the
Agency shall take into account for each proposed initial
clean coal facility the technical and economic feasibility
of such facility as established by engineering and design
studies, including access to capital and the
financeability of the facility based upon the proposed

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sourcing agreement, the projected environmental
performance of such facility, the ability of such facility
to be dispatched to support the transmission grid's
capability to integrate with wind, solar, and other
intermittent resources, the reliability and cost of
electric transmission service from the facility to the
electric utilities, the amount of engineering and design
work that has been done for the facility, including, in the
case of an SNG-ready generating facility, the engineering
and design work relating to features that would accommodate
future integrated operation with one or more coal
gasification units, the facility's water use and overall
environmental attributes, and the schedule for
commencement of construction and operation of the
facility. The Agency shall announce the designation of the
initial clean coal facility within 45 days after the
effective date of this amendatory Act of the 98th General
Assembly. The facility designated as the initial clean coal
facility under this Section shall operate as an SNG-ready
generating facility unless and until it becomes an electric
generating facility using gasification technology by
adding one or more coal gasification units. The initial
clean coal facility may add one or more coal gasification
units only after:
(A) the General Assembly, by enactment of a law,
authorizes the addition; provided that, within 2 years

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preceding the effective date of such enactment, the
initial clean coal facility shall have submitted a
facility cost report for the coal gasification unit or
units otherwise meeting the requirements of paragraph
(4) of subsection (d) of this Section;
(B) a determination is made by the Commission
either that a carbon dioxide pipeline capable of
transporting the carbon dioxide captured from such
gasification unit or units may be constructed, which
shall be deemed to have been made if the Commission
issued a certificate of authority of the construction
of such a carbon dioxide pipeline, or that the initial
clean coal facility has obtained a Class VI injection
permit from the United States Environmental Protection
Agency or the Illinois Environmental Protection Agency
and has completed the other material elements
necessary for it to sequester carbon dioxide captured
from such gasification unit or units;
(C) a determination of capital costs associated
with the addition is made by the Capital Development
Board and the Commission according to the process in
subsection (b) of Section 1-76 of this Act; and
(D) a determination of sequestration capital costs
and sequestration operation and maintenance costs
associated with the addition is made by the Capital
Development Board according to the process in

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subsection (e) of Section 1-76 of this Act.
The initial clean coal facility may accomplish the
addition of the coal gasification unit or units either (i)
by having the coal gasification unit or units owned by the
same entity that owns the SNG-ready generating facility and
the costs associated with the coal gasification unit or
units included in the formula rate under sourcing
agreements between the clean coal electricity buyers and
the initial clean coal facility or (ii) by having the coal
gasification unit or units be owned by a different entity
that would sell the SNG produced by such gasification unit
or units to the SNG-ready generating facility under a
separate formula rate with the SNG-ready generating
facility incorporating the costs of the SNG into the
formula rate under its sourcing agreement with the clean
coal electricity buyers. a proposed clean coal facility in
Illinois (the "initial clean coal facility") that will have
a nameplate capacity of at least 500 MW when commercial
operation commences, that has a final Clean Air Act permit
on the effective date of this amendatory Act of the 95th
General Assembly, and that will meet the definition of
clean coal facility in Section 1-10 of this Act when
commercial operation commences. The sourcing agreements
with this initial clean coal facility shall be subject to
both approval of the initial clean coal facility by the
General Assembly and satisfaction of the requirements of

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paragraph (4) of this subsection (d) and shall be executed
within 90 days after any such approval by the General
Assembly. The Agency and the Commission shall have
authority to inspect all books and records associated with
the initial clean coal facility during the term of such a
sourcing agreement. A utility's sourcing agreement for
electricity produced by the initial clean coal facility
shall include:
(A) provisions governing the price paid for
electricity generated by the initial clean coal
facility, which shall be determined according to
clause (iv) of subparagraph (B) of this paragraph (3);
(B) power purchase provisions, which shall:
(i) provide that the utility party to the
sourcing agreement shall pay the contract price
under such sourcing agreement determined pursuant
to subparagraph (A);
(ii) require delivery of electricity by the
initial clean coal facility to the regional
transmission organization market of the utility
party to the sourcing agreement;
(iii) require the utility party to the
sourcing agreement to buy from the initial clean
coal facility in each hour an amount of energy
equal to all clean coal energy made available from
the initial clean coal facility during such hour

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times the clean coal fraction for such utility for
the applicable month, provided that the amount
purchased by the utility in any year will be
limited by paragraph (2) of this subsection (d);
(iv) require the utility party to the sourcing
agreement to pay to the initial clean coal facility
for each month the following: the electric
generation variable charge multiplied by the
quantity of energy required to be purchased by such
utility in such month plus the product of the sum
of the fuel charge plus the fixed monthly charge,
based on the MW of nameplate capacity of the
initial clean coal facility's power block, for
such month, multiplied by the fraction determined
for the utility for such month according to clause
(iii) of this subparagraph (B); for purposes of
this clause (iv), "electric generation variable
charge", "fuel charge", and "fixed monthly charge"
shall each have the meaning ascribed to the term in
subsection (a) of Section 1-76 of this Act; and
(v) be considered pre-existing contracts in
the utility's procurement plans for eligible
retail customers.
The provisions of this subparagraph (B) are
severable under Section 1.31 of the Statute on
Statutes.

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(A) a formula contractual price (the "contract
price") approved pursuant to paragraph (4) of this
subsection (d), which shall:
(i) be determined using a cost of service
methodology employing either a level or deferred
capital recovery component, based on a capital
structure consisting of 45% equity and 55% debt,
and a return on equity as may be approved by the
Federal Energy Regulatory Commission, which in any
case may not exceed the lower of 11.5% or the rate
of return approved by the General Assembly
pursuant to paragraph (4) of this subsection (d);
and
(ii) provide that all miscellaneous net
revenue, including but not limited to net revenue
from the sale of emission allowances, if any,
substitute natural gas, if any, grants or other
support provided by the State of Illinois or the
United States Government, firm transmission
rights, if any, by-products produced by the
facility, energy or capacity derived from the
facility and not covered by a sourcing agreement
pursuant to paragraph (3) of this subsection (d) or
item (5) of subsection (d) of Section 16-115 of the
Public Utilities Act, whether generated from the
synthesis gas derived from coal, from SNG, or from

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natural gas, shall be credited against the revenue
requirement for this initial clean coal facility;
(B) power purchase provisions, which shall:
(i) provide that the utility party to such
sourcing agreement shall pay the contract price
for electricity delivered under such sourcing
agreement;
(ii) require delivery of electricity to the
regional transmission organization market of the
utility that is party to such sourcing agreement;
(iii) require the utility party to such
sourcing agreement to buy from the initial clean
coal facility in each hour an amount of energy
equal to all clean coal energy made available from
the initial clean coal facility during such hour
times a fraction, the numerator of which is such
utility's retail market sales of electricity
(expressed in kilowatthours sold) in the State
during the prior calendar month and the
denominator of which is the total retail market
sales of electricity (expressed in kilowatthours
sold) in the State by utilities during such prior
month and the sales of electricity (expressed in
kilowatthours sold) in the State by alternative
retail electric suppliers during such prior month
that are subject to the requirements of this

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subsection (d) and paragraph (5) of subsection (d)
of Section 16-115 of the Public Utilities Act,
provided that the amount purchased by the utility
in any year will be limited by paragraph (2) of
this subsection (d); and
(iv) be considered pre-existing contracts in
such utility's procurement plans for eligible
retail customers;
(C) contract for differences provisions, which
shall:
(i) require the utility party to such sourcing
agreement to contract with the initial clean coal
facility in each hour with respect to an amount of
energy equal to all clean coal energy made
available from the initial clean coal facility
during such hour times the clean coal a fraction
for such utility for the applicable month, the
numerator of which is such utility's retail market
sales of electricity (expressed in kilowatthours
sold) in the utility's service territory in the
State during the prior calendar month and the
denominator of which is the total retail market
sales of electricity (expressed in kilowatthours
sold) in the State by utilities during such prior
month and the sales of electricity (expressed in
kilowatthours sold) in the State by alternative

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retail electric suppliers during such prior month
that are subject to the requirements of this
subsection (d) and paragraph (5) of subsection (d)
of Section 16-115 of the Public Utilities Act,
provided that the amount purchased paid by the
utility in any year will be limited by paragraph
(2) of this subsection (d);
(ii) provide that the utility's payment
obligation in respect of the quantity of
electricity determined pursuant to the preceding
clause (i) for any month shall be limited to an
amount equal to (1) the difference of the electric
generation variable charge, the fuel charge, and
the fixed monthly charge, that would be payable by
the utility for such month based on such quantity
of electricity between the contract price
determined pursuant to clause (iv) of subparagraph
(B) (A) of this paragraph (3), minus the product of
(1) of this subsection (d) and the day-ahead price
for electricity delivered to the regional
transmission organization market of the electric
utility that is party to such sourcing agreement
(or any successor delivery point at which such
utility's supply obligations are financially
settled on an hourly basis) (the "reference
price") on the day preceding the day on which the

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electricity is delivered to the initial clean coal
facility busbar, multiplied by (2) the quantity of
electricity determined pursuant to the preceding
clause (i), calculated for each hour in such month;
and
(iii) not require the utility to take physical
delivery of the electricity produced by the
facility;
(D) general provisions, which shall:
(i) specify a term of no more than 30 years,
commencing on the commercial operation date of the
facility;
(ii) provide that electric utilities shall
maintain adequate records documenting purchases
under the sourcing agreements entered into to
comply with this subsection (d) and shall file an
accounting with the load forecast that must be
filed with the Agency by July 15 of each year, in
accordance with subsection (d) of Section 16-111.5
of the Public Utilities Act; .
(iii) provide that all costs associated with
the initial clean coal facility will be
periodically reported to the Federal Energy
Regulatory Commission and to purchasers in
accordance with applicable laws governing
cost-based wholesale power contracts;

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(iv) permit the Illinois Power Agency, if it is
so authorized by law, to assume ownership of the
initial clean coal facility, without monetary
consideration and otherwise on reasonable terms
acceptable to the Agency, if the Agency so requests
no less than 3 years prior to the end of the stated
contract term;
(v) require the owner of the initial clean coal
facility to comply with provisions reflecting
those set forth in Section 1-76.5 of this Act;
provide documentation to the Commission each year,
starting in the facility's first year of
commercial operation, accurately reporting the
quantity of carbon emissions from the facility
that have been captured and sequestered and report
any quantities of carbon released from the site or
sites at which carbon emissions were sequestered
in prior years, based on continuous monitoring of
such sites. If, in any year after the first year of
commercial operation, the owner of the facility
fails to demonstrate that the initial clean coal
facility captured and sequestered at least 50% of
the total carbon emissions that the facility would
otherwise emit or that sequestration of emissions
from prior years has failed, resulting in the
release of carbon dioxide into the atmosphere, the

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owner of the facility must offset excess
emissions. Any such carbon offsets must be
permanent, additional, verifiable, real, located
within the State of Illinois, and legally and
practicably enforceable. The cost of such offsets
for the facility that are not recoverable shall not
exceed $15 million in any given year. No costs of
any such purchases of carbon offsets may be
recovered from a utility or its customers. All
carbon offsets purchased for this purpose and any
carbon emission credits associated with
sequestration of carbon from the facility must be
permanently retired. The initial clean coal
facility shall not forfeit its designation as a
clean coal facility if the facility fails to fully
comply with the applicable carbon sequestration
requirements in any given year, provided the
requisite offsets are purchased. However, the
Attorney General, on behalf of the People of the
State of Illinois, may specifically enforce the
facility's sequestration requirement and the other
terms of this contract provision. Compliance with
the sequestration requirements and offset purchase
requirements specified in paragraph (3) of this
subsection (d) shall be reviewed annually by an
independent expert retained by the owner of the

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initial clean coal facility, with the advance
written approval of the Attorney General. The
Commission may, in the course of the review
specified in item (vii), reduce the allowable
return on equity for the facility if the facility
wilfully fails to comply with the carbon capture
and sequestration requirements set forth in this
item (v);
(vi) include limits on, and accordingly
provide for a reduction modification of, the
amount the utility is required to source under the
sourcing agreement consistent with paragraph (2)
of this subsection (d);
(vii) require Commission review: (1) to
determine the justness, reasonableness, and
prudence of the inputs to the formula referenced in
subparagraphs (A)(i) through (A)(iii) of paragraph
(3) of this subsection (d), prior to an adjustment
in those inputs including, without limitation, the
capital structure and return on equity, fuel
costs, and other operations and maintenance costs
and (2) to approve the costs to be passed through
to customers under the sourcing agreement by which
the utility satisfies its statutory obligations.
Commission review shall occur no less than every 3
years, regardless of whether any adjustments have

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been proposed, and shall be completed within 9
months;
(vii) (viii) limit the utility's obligation to
such amount as the utility is allowed to recover
through tariffs filed with the Commission,
provided that neither the clean coal facility nor
the utility waives any right to assert federal
pre-emption or any other argument in response to a
purported disallowance of recovery costs;
(viii) (ix) limit the utility's or alternative
retail electric supplier's obligation to incur any
liability to only those times after until such time
as the facility is in commercial operation and
generating power and energy and such power and
energy is being delivered to the facility busbar;
(ix) provide that each electric utility shall
have the right to determine whether the
obligations of the utility party under the
sourcing agreement shall be governed by the power
purchase provisions or the contract for
differences provisions before entering into the
sourcing agreements; the provisions of this item
(ix) are severable under Section 1.31 of the
Statute on Statutes;
(x) provide that the owner or owners of the
initial clean coal facility, which is the

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counterparty to such sourcing agreement, shall
have the right from time to time to elect whether
the obligations of the utility party thereto shall
be governed by the power purchase provisions or the
contract for differences provisions;
(x) (xi) append documentation showing that the
formula rate and contract, insofar as they relate
to the power purchase provisions, have been
approved by the Federal Energy Regulatory
Commission pursuant to Section 205 of the Federal
Power Act;
(xi) (xii) provide that any changes to the
terms of the contract, insofar as such changes
relate to the power purchase provisions, are
subject to review under the public interest
standard applied by the Federal Energy Regulatory
Commission pursuant to Sections 205 and 206 of the
Federal Power Act; and
(xii) (xiii) conform with customary lender
requirements in power purchase agreements used as
the basis for financing non-utility generators; .
(xiii) provide for performance incentives
regarding availability, efficiency, and by-product
quantities, with premium performance and
shortfalls in performance to result in positive
and negative adjustments, respectively, to the

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rate of return approved by the Commission,
provided that such rate of return in any year shall
not be decreased by more than $25,000,000 or
increased by more than $12,500,000 as a result of
such performance incentives. Such performance
incentives shall be structured so that any
increases in the rate of return as a result of such
performance incentives are designed not to exceed
the projected benefits to the buyers resulting
from the initial clean coal facility's achievement
of that performance incentive;
(xiv) include forecasting and scheduling
obligations that take account of the requirements
of the applicable regional transmission
organizations;
(xv) include operating guidelines relating to
the operating configuration and dispatch of the
initial clean coal facility, which guidelines
shall be subject to change from time to time with
input from a committee consisting of
representatives of the electric utilities and
alternative retail electric suppliers that are
parties to sourcing agreements with the initial
clean coal facility; such operating guidelines
shall take account the initial clean coal
facility's obligations under any agreement for the

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purchase of SNG entered into pursuant to item (xvi)
of this subparagraph (D) and shall be based on
principles of economic dispatch and the assumption
that the variable cost of SNG purchased pursuant to
such agreement is equal to the market price of
natural gas delivered to the initial clean coal
facility; any actions taken or not taken by the
owner of the initial clean coal facility in
compliance with such operating guidelines shall be
deemed to be prudent, and the prudence of the costs
resulting from the action shall be evaluated in
light of the fact that the initial clean coal
facility is required to comply with such operating
guidelines;
(xvi) authorize the initial clean coal
facility to enter into an agreement with a clean
coal SNG facility or a clean coal SNG brownfield
facility for the purchase by the initial clean coal
facility during all or part of the term of the
sourcing agreement a quantity of SNG produced by
such clean coal SNG facility or clean coal SNG
brownfield facility each year up to the lesser of
(x) the initial clean coal facility's requirements
for imported methane in such year and (y) 16% of
the SNG produced by such clean coal SNG facility or
clean coal SNG brownfield facility during such

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year at a delivered price to be set forth in such
agreement; such agreement shall provide for the
timing of gas deliveries in a manner that
reasonably accommodates the initial clean coal
facility's fuel requirements and generation
schedule; the parties to such agreement may, if
they mutually agree, structure such agreement as a
financial settlement arrangement for the
quantities of SNG set forth above, and such
arrangement shall be deemed to be an agreement
contemplated by this item (xvi); the form for such
agreement shall be subject to approval by the
Agency pursuant to a procedure substantially the
same as that provided in paragraph (4) of this
subsection (d) for the sourcing agreements, with
the clean coal SNG facility or clean coal SNG
brownfield facility participating in place of each
electric utility, and pursuant to a schedule to be
proposed by the initial clean coal facility and
approved by the Agency; and
(xvii) if the initial clean coal facility is an
SNG-ready generating facility, set out a mechanism
for adjusting the quantity of electric power
purchased by each clean coal electricity buyer so
that the small customer rate impact would not
exceed 0.375% of the amount paid per kilowatthour

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by eligible retail customers during the year
ending May 31, 2009 and the large customer deemed
rate impact would not exceed $0.000425 per
kilowatthour, in each case due to the SNG-ready
capital rate component; such mechanism shall
include a carryforward to subsequent years for any
reduced revenues suffered by the initial clean
coal facility as a result of such adjustments, but
subject to the application of these limitations in
subsequent years; such mechanism shall be
effective for so long as the initial clean coal
facility is an SNG-ready generating facility and
shall be compatible with the provisions of
subparagraph (E) of paragraph (2) of this
subsection.
(4) Effective date of sourcing agreements with the
initial clean coal facility. No later than 30 days after
the effective date of this amendatory Act of the 98th
General Assembly, the initial clean coal facility shall
submit a draft sourcing agreement to the Agency and each
electric utility required to enter into such agreements
pursuant to paragraph (3) of this subsection and the
initial clean coal facility and each such electric utility
shall promptly and diligently negotiate in good faith over
the terms of the sourcing agreement. Within 30 days after
receipt of the draft sourcing agreement, each such electric

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utility shall provide the Agency and the owner of the
initial clean coal facility with its comments and
recommended revisions to the draft sourcing agreement.
Within 15 days after the receipt of the electric utility's
comments and recommended revisions, the owner of the
initial clean coal facility shall submit its responsive
comments and a further revised draft of the sourcing
agreement to the Agency. The Agency shall review the draft
sourcing agreement and comments and retain an independent,
qualified, and experienced mediator to mediate disputes
over the draft sourcing agreement's terms. The mediator
shall not own or control any direct or indirect interest in
the initial clean coal facility and shall have no
contractual relationship with the initial clean coal
facility. The mediator shall have knowledge of the energy
industry.
If the parties to the sourcing agreement do not agree
on the terms in the sourcing agreement within 15 days after
receiving the owner's responsive comments and further
revised draft, then the mediator retained by the Agency
shall mediate the dispute between the parties. If the
parties are in agreement on the terms of the sourcing
agreement, then the Agency shall approve the final draft
sourcing agreement within 30 days after the parties reach
agreement and notify the Commission of that agreement. If,
within 30 days after the commencement of mediation, the

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parties have failed to come to agreement, then the Agency
shall, with assistance, as appropriate, from the mediator
retained pursuant to this paragraph (4), review and revise
the draft sourcing agreement as necessary.
The Agency may approve a sourcing agreement only after
it finds the sourcing agreement is consistent with the
provisions of this Act and contains only terms that are
balanced and equitable and fairly protect the interests of
the parties to the sourcing agreement, with such approval
to occur no later than 60 days after the commencement of
the mediation. The Agency shall not withhold or condition
its approval of the sourcing agreement based upon least
cost resource principles or whether or not it would be
prudent for buyers to enter into such an agreement if there
were no legal requirement to do so, nor shall the
resolution of open issues be based on these principles.
If the sourcing agreement is approved, then each
electric utility required to enter into a sourcing
agreement shall have 30 days after either the Agency's
approval or the issuance of any necessary approval by the
Federal Energy Regulatory Commission, whichever is later,
to enter into the sourcing agreement. The Agency shall
submit the approved sourcing agreement to the Commission
within 15 days after approval. Each electric utility and
the initial clean coal facility shall pay a reasonable fee
as required by the Agency for its services under this

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paragraph (4) and shall pay the mediator's reasonable fees,
if any. The Agency shall adopt and make public a policy
detailing the process for retaining a mediator under this
paragraph (4).
(4) Effective date of sourcing agreements with the
initial clean coal facility.
Any proposed sourcing agreement with the initial clean
coal facility shall not become effective unless a facility
cost report and Commission report, as described in this
paragraph (4), the following reports are prepared and
submitted, whether prepared and submitted before or after
the effective date of this amendatory Act of the 98th
General Assembly. and authorizations and approvals
obtained:
(i) Facility cost report. The owner of the initial
clean coal facility shall submit to the Commission, the
Agency, and the General Assembly a front-end
engineering and design study, a facility cost report,
method of financing (including but not limited to
structure and associated costs), and an operating and
maintenance cost quote for the facility (collectively
"facility cost report"), which shall be prepared in
accordance with the requirements of this paragraph (4)
of subsection (d) of this Section, and shall provide
the Commission and the Agency access to the work
papers, relied upon documents, and any other backup

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documentation related to the facility cost report.
(ii) Commission report. Within 6 months following
receipt of the facility cost report, the Commission, in
consultation with the Agency, shall submit a report to
the General Assembly setting forth its analysis of the
facility cost report. Such report shall include, but
not be limited to, a comparison of the costs associated
with electricity generated by the initial clean coal
facility to the costs associated with electricity
generated by other types of generation facilities, an
analysis of the rate impacts on residential and small
business customers over the life of the sourcing
agreements, and an analysis of the likelihood that the
initial clean coal facility will commence commercial
operation by and be delivering power to the facility's
busbar by 2016. To assist in the preparation of its
report, the Commission, in consultation with the
Agency, may hire one or more experts or consultants,
the costs of which shall be paid for by the owner of
the initial clean coal facility. The Commission and
Agency may begin the process of selecting such experts
or consultants prior to receipt of the facility cost
report.
(iii) General Assembly approval. The proposed
sourcing agreements shall not take effect unless,
based on the facility cost report and the Commission's

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report, the General Assembly enacts authorizing
legislation approving (A) the projected price, stated
in cents per kilowatthour, to be charged for
electricity generated by the initial clean coal
facility, (B) the projected impact on residential and
small business customers' bills over the life of the
sourcing agreements, and (C) the maximum allowable
return on equity for the project; and
(iv) Commission review. If the General Assembly
enacts authorizing legislation pursuant to
subparagraph (iii) approving a sourcing agreement, the
Commission shall, within 90 days of such enactment,
complete a review of such sourcing agreement. During
such time period, the Commission shall implement any
directive of the General Assembly, resolve any
disputes between the parties to the sourcing agreement
concerning the terms of such agreement, approve the
form of such agreement, and issue an order finding that
the sourcing agreement is prudent and reasonable.
The facility cost report shall be prepared as follows:
(A) The facility cost report shall be prepared by
duly licensed engineering and construction firms
detailing the estimated capital costs payable to one or
more contractors or suppliers for the engineering,
procurement and construction of the components
comprising the initial clean coal facility and the

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estimated costs of operation and maintenance of the
facility. The facility cost report shall include:
(i) an estimate of the capital cost of the core
plant based on one or more front end engineering
and design studies for the gasification island and
related facilities. The core plant shall include
all civil, structural, mechanical, electrical,
control, and safety systems; and .
(ii) an estimate of the capital cost of the
balance of the plant, including any capital costs
associated with sequestration of carbon dioxide
emissions and all interconnects and interfaces
required to operate the facility, such as
transmission of electricity, construction or
backfeed power supply, pipelines to transport
substitute natural gas or carbon dioxide, potable
water supply, natural gas supply, water supply,
water discharge, landfill, access roads, and coal
delivery.
In the facility cost report, the The quoted
construction costs shall be expressed in nominal
dollars as of the date that the quote is prepared and
shall include capitalized financing costs during
construction, taxes, insurance, and other owner's
costs, and an assumed escalation in materials and labor
beyond the date as of which the construction cost quote

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is expressed.
(B) In the facility cost report, the The front end
engineering and design study for the gasification
island and the cost study for the balance of plant
shall include sufficient design work to permit
quantification of major categories of materials,
commodities and labor hours, and receipt of quotes from
vendors of major equipment required to construct and
operate the clean coal facility.
(C) The facility cost report shall also include an
operating and maintenance cost quote that will provide
the estimated cost of delivered fuel, personnel,
maintenance contracts, chemicals, catalysts,
consumables, spares, and other fixed and variable
operations and maintenance costs. The delivered fuel
cost estimate will be provided by a recognized third
party expert or experts in the fuel and transportation
industries. The balance of the operating and
maintenance cost quote, excluding delivered fuel
costs, will be developed based on the inputs provided
by duly licensed engineering and construction firms
performing the construction cost quote, potential
vendors under long-term service agreements and plant
operating agreements, or recognized third party plant
operator or operators.
The operating and maintenance cost quote

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(including the cost of the front end engineering and
design study) shall be expressed in nominal dollars as
of the date that the quote is prepared and shall
include taxes, insurance, and other owner's costs, and
an assumed escalation in materials and labor beyond the
date as of which the operating and maintenance cost
quote is expressed.
(D) The facility cost report shall also include an
analysis of the initial clean coal facility's ability
to deliver power and energy into the applicable
regional transmission organization markets and an
analysis of the expected capacity factor for the
initial clean coal facility.
(E) Amounts paid to third parties unrelated to the
owner or owners of the initial clean coal facility to
prepare the core plant construction cost quote,
including the front end engineering and design study,
and the operating and maintenance cost quote will be
reimbursed through Coal Development Bonds.
(5) Re-powering and retrofitting coal-fired power
plants previously owned by Illinois utilities to qualify as
clean coal facilities. During the 2009 procurement
planning process and thereafter, the Agency and the
Commission shall consider sourcing agreements covering
electricity generated by power plants that were previously
owned by Illinois utilities and that have been or will be

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converted into clean coal facilities, as defined by Section
1-10 of this Act. Pursuant to such procurement planning
process, the owners of such facilities may propose to the
Agency sourcing agreements with utilities and alternative
retail electric suppliers required to comply with
subsection (d) of this Section and item (5) of subsection
(d) of Section 16-115 of the Public Utilities Act, covering
electricity generated by such facilities. In the case of
sourcing agreements that are power purchase agreements,
the contract price for electricity sales shall be
established on a cost of service basis. In the case of
sourcing agreements that are contracts for differences,
the contract price from which the reference price is
subtracted shall be established on a cost of service basis.
The Agency and the Commission may approve any such utility
sourcing agreements that do not exceed cost-based
benchmarks developed by the procurement administrator, in
consultation with the Commission staff, Agency staff and
the procurement monitor, subject to Commission review and
approval. The Commission shall have authority to inspect
all books and records associated with these clean coal
facilities during the term of any such contract.
(6) Costs incurred by a utility under this subsection
(d) or pursuant to a contract or sourcing agreement entered
into under this subsection (d) shall be deemed prudently
incurred and reasonable in amount and the electric utility

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shall be entitled to full cost recovery pursuant to the
tariffs filed with the Commission.
(e) The draft procurement plans are subject to public
comment, as required by Section 16-111.5 of the Public
Utilities Act and Section 1-78 of this Act.
(f) The Agency shall submit the final procurement plan to
the Commission. The Agency shall revise a procurement plan if
the Commission determines that it does not meet the standards
set forth in Section 16-111.5 of the Public Utilities Act and
Section 1-78 of this Act.
(g) The Agency shall assess fees to each affected utility
to recover the costs incurred in preparation of the annual
procurement plan for the utility.
(h) The Agency shall assess fees to each bidder to recover
the costs incurred in connection with a competitive procurement
process.
(i) The Agency shall assess fees to the initial clean coal
facility to recover the costs incurred in preparation of each
procurement plan for the initial clean coal facility.
(j) The General Assembly finds that enterprises owned by
minorities, women, and persons with disabilities are
under-represented in sales of goods and services used in the
construction of energy projects and accordingly deems it a
prudent business practice that is in the interests of the
People of the State of Illinois to develop and promote economic
opportunities for enterprises owned by minorities, women, and

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persons with disabilities in the energy production industry.
The initial clean coal facility, any clean coal facility,
any clean coal SNG brownfield facility, and any clean coal SNG
facility shall include in any agreement to sell electric power
or SNG entered into pursuant to this Act provisions that
require the owner of the facility to make a good faith effort
to ensure that an amount equal to not less than 15% of the
value of its prime construction contract for the facility shall
be established as a goal to be awarded to minority owned
businesses, female owned businesses, and businesses owned by a
person with a disability; provided that at least 75% of the
amount of such total goal shall be for minority owned
businesses.
"Minority owned business", "female owned business", and
"business owned by a person with a disability" shall have the
meanings ascribed to them in Section 2 of the Business
Enterprise for Minorities, Females, and Persons with
Disabilities Act.
(k) Any clean coal SNG facility or clean coal SNG
brownfield facility shall be authorized to enter into an SNG
purchase agreement with the initial clean coal facility as
described in item (xvi) of subparagraph (D) of paragraph (3) of
subsection (d) of this Section.
(l) If the initial clean coal facility is an SNG-ready
generating facility, then the initial clean coal facility shall
continue with its efforts to obtain permits for carbon capture

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and sequestration facilities that could be used in connection
with the portion of the facility that produces SNG if such
portion of the facility were to be constructed.
(Source: P.A. 96-159, eff. 8-10-09; 96-1437, eff. 8-17-10;
97-325, eff. 8-12-11; 97-616, eff. 10-26-11; 97-618, eff.
10-26-11; 97-658, eff. 1-13-12; 97-813, eff. 7-13-12; revised
7-25-12.)
(20 ILCS 3855/1-76 new)
Sec. 1-76. Costs and revenue recoverable by the initial
clean coal facility.
(a) The price paid for electricity generated by the initial
clean coal facility shall be based on a formula rate using a
cost of service methodology applicable to wholesale electric
power contracts employing a level or deferred capital component
and in accordance with the Uniform System of Accounts, subject
to and as specifically limited by the provisions set forth in
this Section.
The formula rate shall determine 3 components of the price
under the sourcing agreements: (1) a fuel charge, (2) an
electric generation variable charge, and (3) a fixed monthly
charge. The fuel charge for any month shall be stated in
dollars per month and shall consist of the total actual fuel
costs incurred, after taking account of the subtraction of
miscellaneous net revenue as provided in subsection (d) of this
Section. The electric generation variable charge for any period

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shall be stated in dollars per MWh and shall consist of all
costs incurred by the initial clean coal facility, other than
fuel costs, associated with production of electric energy by
the initial clean coal facility's power block, which costs vary
directly with the level of production of electric energy. The
fixed monthly charge shall be stated in dollars per month per
MW of nameplate capacity of the initial clean coal facility's
power block and shall consist of all costs incurred by the
initial clean coal facility that are described in, and as
limited by the provisions of, subsections (b), (c), (d), (e),
(f), and (g) of this Section, other than the costs incorporated
into the calculation of the fuel charge and the electric
generation variable charge.
No later than 30 days after the approval of the sourcing
agreement by the Agency pursuant to paragraph (4) of subsection
(d) of Section 1-75 of this Act, the initial clean coal
facility shall provide to the Commission projections of its
costs for the term of the sourcing agreements. Within 90 days
thereafter, the Commission shall, based upon such projections
and the provisions of this Section, determine the projected
components of the price for each year for the initial clean
coal facility. No later than 6 months before the expected
commencement of commercial operation of the initial clean coal
facility and the commencement of each operating year
thereafter, the initial clean coal facility shall submit to the
Commission projections of its costs and dispatch levels for the

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upcoming year. Within 120 days after the receipt of the initial
clean coal facility's projections of its costs and dispatch
levels for the upcoming year, the Commission shall calculate a
fixed monthly charge and an electric generation variable charge
for the upcoming year using the inputs to the formula rate
under the provisions of this Section. If the Commission does
not calculate such components of the price for any year as of
the beginning of such year, then the initial clean coal
facility shall calculate such components of the price based
upon its projections and the provisions of this Section, with
any subsequent cost disallowance by the Commission to be
reflected through a true-up of costs in the next year. If at
any time the Commission, acting in accordance with this
Section, disallows any cost, then the amount of such
disallowance shall be incorporated as a deduction into the
calculation of the fixed monthly charge and the electric
generation variable charge, as applicable, for the next year.
(b) Capital costs set by the Commission according to this
subsection (b) shall be included in the formula rate. "Capital
costs" means costs for the purchase of land, buildings,
construction, and equipment to be used in the production of
electricity, and other costs recorded in the Electric Plant
Accounts and other applicable Balance Sheet Accounts of the
Uniform System of Accounts for the initial clean coal facility.
The Capital Development Board shall calculate a range of
capital costs that it believes would be a reasonable cost for

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the initial clean coal facility. If the initial clean coal
facility is an SNG-ready generating facility, the capital costs
of the SNG-ready generating facility shall include reasonable
development costs relating to the initial clean coal facility
without regard to whether such costs relate to the power block
or the proposed portion of the facility that produces SNG and
without regard to whether the proposed portion of the facility
that produces SNG is to be constructed. If the initial clean
coal facility is an SNG-ready generating facility, the Capital
Development Board shall include in its calculation of capital
costs an identification of which capital costs constitute
SNG-ready capital costs and shall not include in the range of
capital costs any SNG-ready capital costs that exceed 10% of
the total of all capital costs. The Capital Development Board
shall commence performing its responsibilities under this
subsection (b) within 30 days after the effective date of this
amendatory Act of the 98th General Assembly. In determining a
range of capital costs, the Capital Development Board shall
base its evaluation and judgment on professional engineering
and regulatory accounting principles and include any cost
information and update on costs that may be provided by the
initial clean coal facility and shall not employ least cost
resource principles. In addition, the Capital Development
Board may:
(1) include in its consideration the information in a
facility cost report, if any, that was prepared and

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submitted by the initial clean coal facility to the
Commission in accordance with paragraph (4) of subsection
(d) of Section 1-75 of this Act;
(2) consult as much as it deems necessary with the
initial clean coal facility;
(3) conduct whatever research and investigation it
deems necessary; and
(4) retain third parties to assist in its
determination, provided that such third parties shall not
own or control any direct or indirect interest in the
initial clean coal facility and shall have no contractual
relationship with the initial clean coal facility.
The initial clean coal facility shall cooperate with the
Capital Development Board in any investigation it deems
necessary.
The Capital Development Board shall make its final
determination of the range of capital costs confidentially and
shall submit that range to the Commission in a confidential
filing no later than 90 days after the Capital Development
Board is required to commence performing its responsibilities
under this subsection (b). The initial clean coal facility
shall submit to the Commission its estimate of the capital
costs to be included in the formula rate. Only after the
initial clean coal facility has submitted this estimate shall
the Commission publicly announce the range of capital costs
submitted by the Capital Development Board. In the event that

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the estimate submitted by the initial clean coal facility is
within or below the range submitted by the Capital Development
Board, the initial clean coal facility's estimate shall be
approved by the Commission as the amount of pre-approved
capital costs.
In the event that the estimate submitted by the initial
clean coal facility is above the range submitted by the Capital
Development Board, the amount of capital costs at the lowest
end of the range submitted by the Capital Development Board
shall be approved by the Commission as the amount of
pre-approved capital costs. "Pre-approved capital costs" means
the amount of capital costs that will be included in the
formula rate to the extent such costs are actually incurred,
with no further review or approval with respect to whether they
are prudently incurred. The Commission's determination of
pre-approved capital costs shall be made within 15 days after
the initial clean coal facility submits its capital cost
estimate. The Commission's decision regarding pre-approved
capital costs shall be final and shall not be subject to
judicial or administrative review.
Once made, the Commission's determination of the amount of
pre-approved capital costs may not be increased unless the
Commission determines that the incremental costs are
reasonable, in which case one-third of such reasonable
incremental costs shall be included in the formula rate and
recoverable by the initial clean coal facility and two-thirds

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of such costs shall be borne by the initial clean coal facility
and its contractors, provided that to the extent such
reasonable incremental costs are the result of change in law or
non-insurable force majeure, all of such costs shall be
included in the formula rate and recoverable by the initial
clean coal facility. If the initial clean coal facility is an
SNG-ready generating facility, any capital costs of the
SNG-ready generating facility that exceed the pre-approved
capital costs and any SNG-ready capital costs that exceed 10%
of the pre-approved capital costs shall not be included in the
formula rate and shall be borne by the initial clean coal
facility and its contractors, provided that, to the extent any
of such incremental costs are the result of change in law or
non-insurable force majeure, all of such costs shall be
included in the formula rate and recoverable by the initial
clean coal facility.
"Change in law" means any change, including any enactment,
repeal, or amendment, in a law, ordinance, rule, regulation,
interpretation, permit, license, consent or order, including
those relating to taxes or to environmental matters, or in the
interpretation or application thereof by any governmental
authority occurring after the Commission determines the amount
of pre-approved capital costs.
"Non-insurable force majeure" means events outside of the
reasonable control of the owner of the initial clean coal
facility and its contractors, subcontractors, and agents that

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are not included on a list, to be attached to the sourcing
agreement and subject to the procedures set forth in paragraph
(4) of subsection (d) of Section 1-75 of this Act, of events
that are customarily covered by builder's risk insurance
policies for the construction of electric generating plants and
other large process plants in the United States. "Non-insurable
force majeure" shall not include changes in prices or other
changes in market conditions.
Any rebates, refunds, or other payments received by the
owner of the initial clean coal facility from any of its
contractors with respect to the contractor bearing risk for
capital cost overruns shall be excluded from miscellaneous net
revenue and shall not otherwise reduce the costs of the owner
of the initial clean coal facility for purposes of the formula
rate. For purposes of this subsection (b), "reasonable" means
that the decisions, construction, and supervision of
construction by the owner of the initial clean coal facility
and its contractors underlying the initial capital cost and
significant additions to the initial capital cost of the
initial clean coal facility resulted in efficient, economical,
and timely construction. In determining the reasonableness of
the capital costs of the initial clean coal facility, the
Commission shall consider the knowledge and circumstances
prevailing at the time of each relevant decision or action of
the owner of the initial clean coal facility and its
contractors.

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The Commission may determine that the amount of
pre-approved capital costs may be increased only after notice
and a hearing. At that hearing, the Capital Development Board
shall submit a report recommending whether the incremental
costs should be approved in full or in part or rejected. The
Commission may approve in whole or in part or reject the
incremental capital costs based on whether they are reasonable.
At the request of the owner of the initial clean coal facility
made not more often than once every 12 months during the
construction period of the initial clean coal facility, the
Commission shall conduct interim reviews to determine whether
capital costs specified in such request and incurred or to be
incurred by the owner of the initial clean coal facility are
reasonable.
The Capital Development Board shall monitor the
construction of the initial clean coal facility for the full
duration of construction. The Capital Development Board, in its
discretion, may retain third parties to facilitate such
monitoring, provided that such third parties shall not own or
control any direct or indirect interest in the initial clean
coal facility and shall have no contractual relationship with
the initial clean coal facility. The initial clean coal
facility shall pay a reasonable fee as required by the Capital
Development Board for the Capital Development Board's services
under this subsection (b), and such fee shall not be passed
through to a utility or its customers. If a third party is

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retained by the Capital Development Board for the determination
of a range of capital costs or monitoring of construction, the
initial clean coal facility must pay for the third party's
reasonable fees, and such costs may not be passed through to a
utility or its customers.
The provisions of this subsection (b) shall apply to the
capital costs for the initial construction of the initial clean
coal facility and, if the initial clean coal facility is an
SNG-ready generating facility, for the initial construction of
any coal gasification unit or units that may be added following
authorization thereof pursuant to subparagraph (A) of
paragraph (3) of subsection (d) of Section 1-75 of this Act,
and not to capital costs incurred beyond the initial
construction, including costs for replacement of equipment and
capital improvements, which capital costs shall be subject to
review by the Commission and included in the formula rate to
the extent they are determined to be prudently incurred.
(c) Operations and maintenance costs set by the Commission
according to this subsection (c) shall be included in the
formula rate. Operations and maintenance costs mean costs
incurred for the administration, supervision, operation,
maintenance, preservation, and protection of the initial clean
coal facility's physical plant and other costs recorded in the
Operation and Maintenance Expense Accounts and other
applicable Income Statement Accounts of the Uniform System of
Accounts for the initial clean coal facility. The Commission

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shall assess the prudency of the operations and maintenance
costs for the initial clean coal facility and shall allow the
initial clean coal facility to include in the formula rate only
those costs the Commission deems to be prudent. The Commission
may in its discretion retain an expert to assist in its review
of operations and maintenance costs. The initial clean coal
facility shall pay for the expert's fees if an expert is
retained by the Commission, and such costs may not be passed
through to a utility or its customers. The Commission's
determination regarding the amount of operations and
maintenance costs that may be included in the formula rate for
each year shall be made in accordance with this Section.
(d) Actual fuel costs shall be set by the Agency through a
SNG feedstock procurement, pursuant to Section 1-79 of this
Act, to be performed at least every 5 years, and purchased by
the initial clean coal facility pursuant to a reasonable fuel
supply plan, with coal comprising at least 50% of the total
feedstock over the term of a sourcing agreement with all coal
having high volatile bituminous rank and greater than 1.7
pounds of sulfur per million btu content, SNG derived from coal
comprising at least 50% of the fuel to generate electricity,
SNG derived from biomass comprising up to 10% of the fuel to
generate electricity with the approval of the Commission, and
natural gas comprising the remainder of the fuel to generate
electricity, provided that, if and for so long as the initial
clean coal facility is an SNG-ready generating facility, the

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minimum feedstock procurement requirements in this sentence
shall be inapplicable and the reference in this sentence to the
term of a sourcing agreement shall be deemed to refer only to
the portion, if any, of such term occurring after such
SNG-ready generating facility adds one or more coal
gasification units following authorization thereof pursuant to
subparagraph (A) of paragraph (3) of subsection (d) of Section
1-75 of this Act. Actual fuel costs shall consist of all costs
associated with the procurement of fuel, including, but not
limited to, commodity costs, transportation costs,
administrative costs, and costs relating to the procurement
process. Actual fuel costs, as so determined, shall be reduced
by miscellaneous net revenue received by the owner of the
initial clean coal facility, including, but not limited to, net
revenue from the sale of emission allowances, if any,
substitute natural gas, if any, grants or other support
provided by the State of Illinois or the United States
Government, firm transmission rights, if any, by-products
produced by the facility, any capacity derived from the
facility and bid into the capacity markets or otherwise sold
and any energy generated as a result of such capacity being
called, whether generated from synthesis gas derived from coal,
from SNG, or from natural gas, less non-generation variable
costs. "Non-generation variable costs" means all costs, other
than fuel costs, associated with the production of SNG that is
not consumed by the initial clean coal facility's power block,

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which costs vary directly with the level of production of SNG.
Actual fuel costs shall be calculated pursuant to this
subsection (d) and included in the formula rate without any
determination by the Commission as to prudency.
(e) Sequestration costs set by the Commission according to
this subsection (e) shall be included in the formula rate. If
and for so long as the initial clean coal facility is an
SNG-ready generating facility, the provisions of this
subsection (e) shall be inapplicable.
"Sequestration costs" means costs incurred to (1) capture
carbon dioxide; (2) compress carbon dioxide; (3) build,
operate, and maintain a sequestration site in which carbon
dioxide may be injected; (4) build, operate, and maintain a
carbon dioxide pipeline, which is owned by the initial clean
coal facility; (5) transport the carbon dioxide to a
sequestration site or a pipeline; and (6) perform monitoring,
verification and other activities associated with carbon
capture and sequestration.
"Sequestration capital costs" means sequestration costs
recorded in the Electric Plant Accounts and other applicable
Balance Sheet Accounts of the Uniform System of Accounts for
the initial clean coal facility.
"Sequestration operations and maintenance costs" means
sequestration costs that are recorded in the Operation and
Maintenance Expense Accounts and other applicable Income
Statement Accounts of the Uniform System of Accounts for the

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initial clean coal facility and shall include maintenance,
monitoring, and verification costs.
The Capital Development Board shall calculate an estimate
of sequestration capital costs that it believes would be a
reasonable cost for the initial clean coal facility's
sequestration facilities and an estimate of average annual
sequestration operations and maintenance costs that it
believes would be a reasonable average annual operation and
maintenance cost for the initial clean coal facility's carbon
capture and sequestration activities. The Capital Development
Board shall commence performing its responsibilities under
this subsection (e) within 30 days after the effective date of
this amendatory Act of the 98th General Assembly. In
determining sequestration capital costs and sequestration
operations and maintenance costs, the Capital Development
Board shall base its evaluation and judgment on professional
engineering and regulatory accounting principles and include
any cost information and update on costs that may be provided
by the initial clean coal facility and shall not employ least
cost resource principles. In addition, the Capital Development
Board may: (A) include in its consideration cost estimate
information in a facility cost report, if any, that was
prepared and submitted by the initial clean coal facility to
the Commission in accordance with paragraph (4) of subsection
(d) of Section 1-75 of this Act; (B) consult as much as it
deems necessary with the initial clean coal facility; (C)

HB0103 - 94 - LRB098 04222 AMC 34247 b
conduct whatever research and investigation it deems
necessary; and (D) retain third parties to assist in its
determination, provided that such third parties shall not own
or control any direct or indirect interest in the initial clean
coal facility and shall have no contractual relationship with
the initial clean coal facility. The initial clean coal
facility shall cooperate with the Capital Development Board in
any investigation it deems necessary.
The Capital Development Board shall make its final
determination of sequestration capital costs and sequestration
operations and maintenance costs and submit such determination
to the Commission no later than 90 days after the Capital
Development Board is required to commence performing its
responsibilities under this subsection (e). The Capital
Development Board shall monitor construction of the
sequestration facilities in the same manner, and with the same
rights to retain an expert and recover the costs thereof, as
set forth in subsection (b) of this Section.
"Actual sequestration costs" means for any year the sum of:
(i) the annual amortized portion of sequestration capital
costs, based on level amortization from the later of the date
such costs are incurred and the commercial operation date until
the end of the term of the sourcing agreements; (ii) the rate
of return approved by the Commission pursuant to subsection (f)
of this Section applied to sequestration capital costs; and
(iii) the sequestration operations and maintenance costs

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incurred in such year.
"Target sequestration costs" means the sum of: (i) the
annual amortized portion of the estimated sequestration
capital costs determined by the Capital Development Board,
based on level amortization from the later of the date such
costs are incurred and the commercial operation date until the
end of the term of the sourcing agreements; (ii) the rate of
return approved by the Commission pursuant to subsection (f) of
this Section applied to the estimated sequestration capital
costs determined by the Capital Development Board; (iii) the
estimate of average annual sequestration operations and
maintenance costs determined by the Capital Development Board,
escalated in accordance with an escalation factor to be
provided in the sourcing agreement from the date of the Capital
Development Board's determination to the mid-point of the
applicable year; (iv) the sequestration cost underrun, if any,
for the immediately preceding year, except to the extent
applied to allow recovery of a sequestration cost overrun from
a prior year; and (v) any sequestration costs that are the
result of a change in law or non-insurable force majeure.
"Sequestration cost underrun" means for any year the
excess, if any, of target sequestration costs for such year
over actual sequestration costs for such year.
"Sequestration cost overrun" means for any year the excess,
if any, of actual sequestration costs for such year over target
sequestration costs for such year.

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For any year in which there is a sequestration cost
underrun, all actual sequestration costs shall be conclusively
deemed to be prudent and shall be included in the formula rate
with no further review or approval in respect of whether they
are prudently incurred. The Commission shall review the costs
to ensure they are mathematically correct.
For any year in which there is a sequestration cost
overrun, the Commission shall determine whether all or a
portion of such sequestration cost overrun was prudently
incurred, except that the rate of return shall not be subject
to review. If the Commission determines that the sequestration
cost overrun was prudently incurred, one-third of such
sequestration cost overrun shall be included in the formula
rate and recoverable by the initial clean coal facility and
two-thirds of such sequestration cost overrun shall be borne by
the initial clean coal facility and not passed through to a
utility, an alternative retail electric supplier, or the
customers of a utility unless and until there is a
sequestration cost underrun for a subsequent year, in which
event the sequestration cost overrun will be included in the
formula rate and recoverable by the initial clean coal facility
up to the amount of the sequestration cost underrun; provided,
however, that if for any year two-thirds of such sequestration
cost overrun exceeds the difference of $20,000,000 minus the
amount of penalty, if any, payable by the initial clean coal
facility pursuant to Section 1-76.5 with respect to that year,

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the amount of such excess shall also be included in the formula
rate and recoverable by the initial clean coal facility. The
detailed procedures for implementing this provision shall be
set forth in the sourcing agreements, which procedures shall
include a mechanism for equitably adjusting target
sequestration costs for any year in which the quantity of
carbon dioxide actually captured and sequestered by the initial
clean coal facility is greater than the quantity assumed in
calculating the estimated costs for such year.
"Change in law" means any change, including any enactment,
repeal, or amendment, in a law, ordinance, rule, regulation,
interpretation, permit, license, consent or order, including
those relating to taxes or to environmental matters, or in the
interpretation or application thereof by any governmental
authority occurring after the Capital Development Board makes
its final determination of sequestration capital costs and
sequestration operations and maintenance costs.
"Non-insurable force majeure" means events outside of the
reasonable control of the owner of the initial clean coal
facility and its contractors, subcontractors, and agents that
are not included on a list, to be attached to the sourcing
agreement and subject to the procedures set forth in paragraph
(4) of subsection (d) of Section 1-75 of this Act, of events
that are customarily covered by builder's risk insurance
policies for the construction of electric generating plants and
other large process plants in the United States. "Non-insurable

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force majeure" shall not include changes in prices or other
changes in market conditions.
(f) The Commission shall determine within 120 days after
the effective date of this amendatory Act of the 98th General
Assembly or 120 days after the owner of the initial clean coal
facility files initial direct testimony regarding rate of
return with the Commission, whichever is later, the total rate
of return on invested capital for the initial clean coal
facility following notice and a public hearing. At the hearing,
all interested parties, including utilities, alternative
retail electric suppliers, the Attorney General, the Agency,
and customers, shall be given an opportunity to be heard. In
determining the rate of return, the Commission shall select a
sufficient return on investment so as to enable the initial
clean coal facility to attract capital in financial markets at
competitive rates. The Commission shall consider the rates of
return received by developers of facilities similar to the
initial clean coal facility inside or outside Illinois, the
need to balance an incentive for clean-coal technology with the
need to protect Illinois ratepayers from high electricity
costs, and any other information the Commission deems relevant.
The Agency shall recommend a rate of return to the
Commission utilizing the criteria in this subsection (f). The
Commission shall further take into account the recommendation
of the Agency, but shall not be bound by it. The rate of return
shall be no lower than the weighted average authorized total

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rates of return of the electric utilities in accordance with
original cost rate base for their electric distribution assets
as of the effective date of this amendatory Act of the 98th
General Assembly. Notwithstanding the minimum rate of return
established in the preceding sentence, the rate of return shall
be no greater than the total rate of return on invested capital
that the initial clean coal facility would achieve based on an
assumed 55% debt and 45% equity capital structure, with the
cost of debt being the actual average cost, including all
associated costs and fees, of the initial clean coal facility's
debt and the cost of equity being 11.5%. The Commission's
determination of the rate of return shall include a mechanism
providing for a one-time adjustment at or about the
commencement of commercial operation of the initial clean coal
facility to adjust for changes in applicable Treasury yield
rates between the date of its provisional determination of the
rate of return and the dates of construction period borrowing
by the initial clean coal facility, which adjustment shall
apply to 55% of total capital.
The Commission's decision shall be final and not subject to
any rehearing or administrative or judicial review. The rate of
return determined by the Commission pursuant to this subsection
(f) shall apply for the term of the sourcing agreements and
shall not be subject to change, except for the one-time
adjustment to reflect Treasury yield rate changes as expressly
contemplated by this subsection (f) and as otherwise expressly

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provided in subsection (b) of Section 1-76.5 of this Act.
(g) The following shall not be included in determining the
formula rate: advertising expenses that do not meet the
requirements of Sections 9-225 and 9-226 of the Public
Utilities Act, political activity or lobbying expenses as
defined by Section 9-224 of the Public Utilities Act, social
club dues, or charitable contributions, to the extent, in each
case, that a utility would not be permitted to recover such
costs.
(h) Except as otherwise provided in subsections (b) and (f)
of this Section 1-76, within 30 days after a decision of the
Commission on recoverable costs under this Section, any
interested party to the Commission's decision may apply for a
rehearing with respect to the decision. The Commission shall
receive and consider such application for rehearing and shall
grant or deny the application in whole or in part within 20
days from the date of the receipt thereof by the Commission. If
no rehearing is applied for within the required 30 days or an
application for rehearing is denied, the Commission decision
shall be final.
If an application for rehearing is granted, the Commission
shall hold a rehearing within 30 days after granting the
application. The decision of the Commission upon rehearing
shall be final. Except as otherwise provided in subsections (b)
and (f) of this Section 1-76, any person affected by a decision
of the Commission under this Section 1-76 may have the decision

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reviewed only under and in accordance with the Administrative
Review Law. Except as otherwise provided in subsections (b) and
(f) of this Section 1-76, the provisions of the Administrative
Review Law, all amendments and modifications thereof and the
rules adopted pursuant thereto, shall apply to and govern all
proceedings for the judicial review of final administrative
decisions of the Commission under this subsection (h). The term
"administrative decision" is defined as in Section 3-101 of the
Code of Civil Procedure.
(i) The Capital Development Board shall adopt and make
public a policy detailing the process for retaining third
parties under this Section. Any third parties retained to
assist with calculating the capital costs or sequestration
costs shall be retained no later than 45 days after the
effective date of this amendatory Act of the 98th General
Assembly.
(20 ILCS 3855/1-76.5 new)
Sec. 1-76.5. Capture and sequestration requirements for
initial clean coal facility.
(a) The initial clean coal facility shall provide
documentation to the Commission each year of commercial
operation accurately reporting the quantity of carbon
emissions from the facility that have been captured and
sequestered and report any quantities of carbon released from
the site or sites at which carbon emissions were sequestered in

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prior years, based on continuous monitoring of such sites. If,
in any year, the owner of the facility fails to demonstrate
that (1) the portion of the facility that produces SNG captured
and sequestered at least 90% of the carbon dioxide it would
otherwise emit and (2) the initial clean coal facility as a
whole captured and sequestered at least 50% of the total carbon
emissions that the facility would otherwise emit or if the
sequestration of emissions from prior years has failed,
resulting in the release of carbon dioxide into the atmosphere,
or both, then the owner of the initial clean coal facility must
pay a penalty of $20,000,000, which shall be deposited into the
Energy Efficiency Trust Fund and distributed pursuant to
subsection (b) of Section 6-6 of the Renewable Energy, Energy
Efficiency, and Coal Resources Development Law of 1997.
If during the first 12 months of commercial operation of
the initial clean coal facility, there are more than 4 stops
and starts of the portion of the facility that produces SNG,
with each stop and start of an individual unit constituting one
stop and start, then the calculation of the quantities
described in this subsection (a) shall not take into account
any carbon dioxide emissions from the portion of the facility
that produces SNG occurring during the stop and start-up
periods, including related periods of non-steady state
operation, associated with such excess stops and starts. The
penalty resulting from the failure to capture and sequester at
least the minimum amount of carbon dioxide shall not be passed

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through to a utility, an alternative retail electric supplier,
or the customers of a utility. The initial clean coal facility
shall not forfeit its designation as the initial clean coal
facility if the facility fails to fully comply with the
applicable carbon sequestration requirements in any given
year, provided the requisite penalties are complied with.
(b) In addition to any penalty for the initial clean coal
facility's failure to capture and sequester at least its
minimum sequestration requirement, the Attorney General, on
behalf of the People of the State of Illinois, shall
specifically enforce the facility's sequestration requirement
and the other terms of this contract provision. Such action may
be filed in any circuit court in Illinois. By entering into a
sourcing agreement pursuant to subsection (d) of Section 1-75
of this Act, the initial clean coal facility agrees to waive
any objections to venue or to the jurisdiction of the court
with regard to the Attorney General's action for specific
performance under this Section. The Commission may reduce the
recoverable rate of return approved pursuant to Section 1-76 of
this Act for the facility if the facility willfully fails to
comply with the carbon capture and sequestration requirements
set forth in this Section.
(c) Compliance with the capture and sequestration
requirements of this Section shall be assessed annually by the
Commission, which may in its discretion retain an expert to
facilitate its assessment. The initial clean coal facility

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shall pay for the expert's reasonable fees if an expert is
retained by the Commission, and such costs shall not be passed
through to a utility, an alternative retail electric supplier,
or the customers of a utility. The Commission shall adopt and
make public a policy detailing the process for retaining an
expert under this Section.
(d) Responsibility for compliance with the capture and
sequestration requirements specified in this Section for the
initial clean coal facility shall reside solely with the
initial clean coal facility regardless of whether the facility
has contracted with another party to capture, transport, or
sequester carbon dioxide.
(e) If and for so long as the initial clean coal facility
is an SNG-ready generating facility, all requirements of this
Section relating to carbon capture and sequestration shall be
deemed to be satisfied if the carbon dioxide emissions from the
SNG-ready generating facility are less than 1,000 pounds per
megawatt-hour of electricity generated by the SNG-ready
generating facility on an average annual basis; the initial
clean coal facility shall submit to the Commission on an annual
basis information demonstrating compliance with such emissions
limit.
(20 ILCS 3855/1-77.5 new)
Sec. 1-77.5. Sequestration permitting.
(a) No initial clean coal facility may transport or

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sequester carbon dioxide unless the Commission approves the
method of carbon dioxide transportation or sequestration as
provided in this Section. Approval shall be required regardless
of whether the facility has contracted with another party to
transport or sequester the carbon dioxide. Nothing in this
subsection (a) shall release the owner or operator of a carbon
dioxide sequestration site or carbon dioxide pipeline from any
other permitting requirements under applicable State and
federal laws, statutes, rules, or regulations.
(b) No later than 6 months prior to the date upon which the
owner of the initial clean coal facility intends to commence
construction of any coal gasification unit or units, the owner
of such facility shall file with the Commission a carbon
dioxide transportation or sequestration plan. The Commission
shall review proposed carbon dioxide transportation and
sequestration methods and shall approve those methods it deems
reasonable and cost-effective. For purposes of this review,
"cost-effective" means a commercially reasonable price for
similar carbon dioxide transportation or sequestration
techniques. In determining whether sequestration through
injection is reasonable and cost-effective, the Commission may
consult with the Illinois State Geological Survey.
The Commission shall hold a public hearing within 30 days
after receipt of the facility's carbon dioxide transportation
or sequestration plan. The Commission shall post notice of the
review on its website upon submission of a carbon dioxide

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transportation or sequestration method and shall accept
written public comments. The Commission shall take the comments
into account when making its decision. However, the Commission
shall not approve a carbon dioxide sequestration method if the
owner or operator of the sequestration site has not received
(1) an Underground Injection Control permit from the Illinois
Environmental Protection Agency or the United States
Environmental Protection Agency pursuant to the Environmental
Protection Act, (2) an Underground Injection Control permit
from the Illinois Department of Natural Resources pursuant to
the Illinois Oil and Gas Act, or (3) any applicable permit from
the state in which the sequestration site is located if the
sequestration shall take place outside of Illinois. The
Commission shall approve or deny the carbon dioxide
transportation or sequestration method within 90 days after the
receipt of all required information.
(20 ILCS 3855/1-79 new)
Sec. 1-79. Feedstock procurement.
(a) A feedstock procurement plan shall, every 5 years, or
more frequently with respect to feedstock that cannot
reasonably be procured for a 5-year period on acceptable terms,
be prepared for the initial clean coal facility based on the
initial clean coal facility's projection of feedstock usage and
ratios, and consistent with the applicable requirements of this
Act. The plan shall specifically identify the feedstock

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products to be procured following plan approval and shall
follow all the requirements set forth in this Act and all
applicable State and federal laws, statutes, rules, or
regulations, as well as Commission orders. Nothing in this
Section precludes consideration of contracts longer than 5
years and related forecast data. Any feedstock procurement
occurring in accordance with this plan shall be competitively
bid through a request for proposals process. Approval and
implementation of the feedstock procurement plan shall be
subject to review and approval by the Commission according to
the provisions set forth in this Section. A feedstock
procurement plan shall include each of the following
components:
(1) Daily generation analysis. This analysis shall
include:
(A) multi-year historical analysis of hourly
generation; and
(B) known or projected changes to future
generation.
(2) Determination of the fuel specifications required
for the initial clean coal facility, including:
(A) feedstock mix, as set by the initial clean coal
facility with coal having high volatile bituminous
rank and greater than 1.7 pounds of sulfur per million
btu content and comprising at least 50% of the total
feedstock over the term of the sourcing agreement;

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(B) volume of each feedstock required;
(C) quality standards of each feedstock;
(D) transportation and delivery requirements and
associated costs and impacts on the performance,
availability, and reliability of the initial clean
coal facility;
(E) technical specifications of the initial clean
coal facility for its feedstocks; and
(F) appropriate testing of any proposed feedstock
before it is incorporated into the feedstock
procurement plan or process to determine the effect of
such feedstock on the performance, availability, and
reliability of the initial clean coal facility.
(b) The feedstock procurement process shall be
administered by a feedstock procurement administrator and
monitored by a feedstock procurement monitor.
(1) The feedstock procurement administrator shall:
(A) design the final feedstock procurement process
in accordance with subsection (d) of this Section
following Commission approval of the feedstock
procurement plan;
(B) develop feedstock benchmarks in accordance
with paragraph (3) of subsection (d) of this Section to
be used to evaluate bids; these benchmarks shall be
submitted to the Commission for review and approval on
a confidential basis prior to the feedstock

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procurement event;
(C) serve as the interface between the initial
clean coal facility and feedstock suppliers regarding
bidding and contract negotiations;
(D) manage the bidder pre-qualification and
registration process;
(E) obtain the initial clean coal facility's
agreement to the final form of all supply contracts and
credit collateral agreements;
(F) administer the request for feedstock proposals
process;
(G) have the discretion to negotiate to determine
whether bidders are willing to lower the price of bids
that meet the benchmarks approved by the Commission;
any post-bid negotiations with bidders shall be
limited to price only and shall be completed within 24
hours after opening the sealed bids and shall be
conducted in a fair and unbiased manner; in conducting
the negotiations, there shall be no disclosure of any
information derived from proposals submitted by
competing bidders; if information is disclosed to any
bidder, it shall be provided to all competing bidders;
(H) maintain confidentiality of supplier and
bidding information in a manner consistent with all
applicable laws, rules, regulations, and tariffs;
(I) submit a confidential report to the Commission

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recommending acceptance or rejection of bids;
(J) notify the facility of contract counterparties
and contract specifics; and
(K) administer related contingency feedstock
procurement events.
(2) The feedstock procurement monitor, who shall be
retained by the Commission, shall:
(A) monitor interactions among the feedstock
procurement administrator, suppliers, and the initial
clean coal facility;
(B) monitor and report to the Commission on the
progress of the feedstock procurement process;
(C) provide an independent confidential report to
the Commission regarding the results of the feedstock
procurement event;
(D) preserve the confidentiality of supplier and
bidding information in a manner consistent with all
applicable laws, rules, regulations, and tariffs;
(E) provide expert advice to the Commission and
consult with the feedstock procurement administrator
regarding issues related to feedstock procurement
process design, rules, protocols, and policy-related
matters;
(F) consult with the feedstock procurement
administrator regarding the development and use of
benchmark criteria, standard form contracts, credit

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policies, and bid documents; and
(G) assess compliance with the procurement plans
approved by the Commission.
(c) The feedstock procurement process shall be conducted as
follows:
(1) Beginning in 2014, the initial clean coal facility
shall annually provide a range of feedstock requirement
forecasts to the Agency by July 15 of each year, or such
other date as may be required by the Commission or Agency.
The feedstock requirement forecasts shall cover the 5-year
feedstock procurement planning period for the next
feedstock procurement plan, or such other longer period
that the Agency or the Commission may require, and shall
include daily data representing a high generation, low
generation and expected generation scenario for the
initial clean coal facility. The initial clean coal
facility shall provide supporting data and assumptions for
each of the scenarios.
(2) Beginning in 2014, the Agency shall at least every
5 years prepare a feedstock procurement plan by August 15th
of the applicable year, or such other date as may be
required by the Commission. The feedstock procurement plan
shall identify the portfolio of feedstocks to be procured.
Copies of the feedstock procurement plan shall be posted
and made publicly available on the Agency's and
Commission's websites, and copies shall also be provided to

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the initial clean coal facility. The initial clean coal
facility shall have 30 days following the date of posting
to provide comment to the Agency on the feedstock
procurement plan. Other interested entities also may
comment on the feedstock procurement plan. All comments
submitted to the Agency shall be specific, supported by
data or other detailed analyses, and, if objecting to all
or a portion of the feedstock procurement plan, accompanied
by specific alternative wording or proposals. All comments
shall be posted on the Agency's and Commission's websites.
During this 30-day comment period, the Agency shall hold at
least one public hearing for the purpose of receiving
public comment on the procurement plan. Within 14 days
following the end of the 30-day review period, the Agency
shall revise the feedstock procurement plan as necessary
based on the comments received, file the feedstock
procurement plan with the Commission, and post the
feedstock procurement plan on the websites.
(3) Within 5 days after the filing of the feedstock
procurement plan, any person objecting to the feedstock
procurement plan shall file an objection with the
Commission. Within 10 days after the filing, the Commission
shall determine whether a hearing is necessary. The
Commission shall enter its order confirming or modifying
the feedstock procurement plan within 90 days after the
filing of the feedstock procurement plan by the Agency.

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(4) The Commission shall approve the feedstock
procurement plan, including expressly the forecast used in
the feedstock procurement plan, if the Commission
determines that it shall ensure adequate, reliable,
affordable, and environmentally sustainable feedstocks to
the initial clean coal facility at the lowest total cost
over time, taking into account any benefits of price
stability and other criteria set forth in this Section.
(d) The feedstock procurement process shall include each of
the following components:
(1) Solicitation, pre-qualification, and registration
of bidders. The feedstock procurement administrator shall
disseminate information to potential bidders to promote a
feedstock procurement event, notify potential bidders that
the feedstock procurement administrator may enter into a
post-bid price negotiation with bidders that meet the
applicable benchmarks, provide supply requirements, and
otherwise explain the competitive feedstock procurement
process. In addition to such other publication as the
feedstock procurement administrator determines is
appropriate, this information shall be posted on the
Agency's and the Commission's websites. The feedstock
procurement administrator shall also administer the
prequalification process, including evaluation of
creditworthiness, compliance with feedstock procurement
rules, and agreement to the standard form contract

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developed pursuant to paragraph (2) of this subsection (d).
The feedstock procurement administrator shall then
identify and register bidders to participate in the
feedstock procurement event.
(2) Standard contract forms and credit terms and
instruments. The feedstock procurement administrator, in
consultation with the initial clean coal facility,
electric utilities, alternative retail electric suppliers,
the Commission, and other interested parties and subject to
Commission oversight, shall develop and provide standard
contract forms for the supplier contracts that meet
generally accepted industry practices. Standard credit
terms and instruments that meet generally accepted
industry practices shall be similarly developed. The
feedstock procurement administrator shall make available
to the Commission all written comments it receives on the
contract forms, credit terms, or instruments. If the
feedstock procurement administrator cannot reach agreement
with the initial clean coal facility as to the contract
terms and conditions, then the feedstock procurement
administrator must notify the Commission of any disputed
terms and the Commission shall resolve the dispute. The
terms of the contracts shall not be subject to negotiation
by winning bidders, and the bidders must agree to the terms
of the contract in advance so that winning bids are
selected solely on the basis of price.

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(3) Establishment of a market-based price benchmark.
As part of the development of the feedstock procurement
process, the feedstock procurement administrator, in
consultation with the Commission staff, Agency staff, and
the feedstock procurement monitor, shall establish
benchmarks for evaluating the final prices in the contracts
for each of the feedstocks that shall be procured through
the feedstock procurement process. The benchmarks shall be
based on price data for similar feedstocks for the same
delivery period and similar delivery points, or other
delivery points after adjusting for that difference. The
price benchmarks may also be adjusted to take into account
differences between the information reflected in the
underlying data sources and the specific feedstocks and
gasification feedstock procurement process being used to
procure for the initial clean coal facility. The benchmarks
shall be confidential but shall be provided to the
Commission, and shall be subject to Commission review and
approval, prior to a feedstock procurement event.
(4) Request for proposals. The feedstock procurement
administrator shall design and issue a request for
proposals to supply coal or natural gas in accordance with
the initial clean coal facility's usage plan, as approved
by the Commission. The request for proposals shall set
forth a procedure for sealed, binding commitment bidding
with pay-as-bid settlement, and provision for selection of

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bids on the basis of price.
(5) A plan for implementing contingencies in the event
of supplier default or failure of the feedstock procurement
process to fully meet the expected generation requirement
due to insufficient supplier participation, Commission
rejection of results, or any other cause. The plan must be
specific to the initial clean coal facility's feedstock
specifications and requirements.
The feedstock procurement process described in this
subsection (d) is exempt from the requirements of the Illinois
Procurement Code pursuant to Section 20-10 of the Illinois
Procurement Code.
(e) Within 2 business days after opening the sealed bids,
the feedstock procurement administrator shall submit a
confidential report to the Commission. The report shall contain
the results of the bidding for each of the feedstock types
along with the feedstock procurement administrator's
recommendation for the acceptance and rejection of bids based
on the price benchmark criteria and other factors observed in
the process. The feedstock procurement monitor also shall
submit a confidential report to the Commission within 2
business days after opening the sealed bids. The report shall
contain the feedstock procurement monitor's assessment of
bidder behavior in the process, as well as an assessment of the
feedstock procurement administrator's compliance with the
feedstock procurement process and rules. The Commission shall

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review the confidential reports submitted by the feedstock
procurement administrator and feedstock procurement monitor
and shall accept or reject the recommendations of the feedstock
procurement administrator within 2 business days after receipt
of the reports.
(f) Within 3 business days after the Commission decision
approving the results of a feedstock procurement event, the
initial clean coal facility shall enter into binding
contractual arrangements with the winning suppliers using
standard form contracts.
(g) The names of the successful bidders and the amount of
feedstock to be delivered for each contract type and for each
contract term shall be made available to the public at the time
of Commission approval of a feedstock procurement event. The
Commission, the feedstock procurement monitor, the feedstock
procurement administrator, the Agency, and all participants in
the feedstock procurement process shall maintain the
confidentiality of all other supplier and bidding information
in a manner consistent with all applicable laws, rules,
regulations, and tariffs. Confidential information, including
the confidential reports submitted by the feedstock
procurement administrator and feedstock procurement monitor
pursuant to subsection (e) of this Section, shall not be made
publicly available and shall not be discoverable by any party
in any proceeding, absent a compelling demonstration of need,
nor shall those reports be admissible in any proceeding other

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than one for law enforcement purposes.
(h) Within 2 business days after a Commission decision
approving the results of a feedstock procurement event or such
other date as may be required by the Commission from time to
time, the initial clean coal facility shall file for
informational purposes with the Commission its actual or
estimated feedstock costs reflecting the costs associated with
the feedstock procurement.
(i) The initial clean coal facility shall pay for
reasonable costs incurred by the Agency in administering the
feedstock procurement events. The Agency shall determine the
amount owed for each feedstock procurement event, and the
initial clean coal facility shall pay that amount to the Agency
within 30 days after being informed by the Agency of the amount
owed. Those funds shall be deposited into the Agency Operations
Fund, pursuant to Section 1-55 of this Act, to be used to
reimburse expenses related to the feedstock procurement.
(j) The Commission has the authority to adopt rules to
carry out the provisions of this Section. For the public
interest, safety, and welfare, the Commission also has the
authority to adopt rules to carry out the provisions of this
Section on an emergency basis.
(k) On or before April 1 of each year, the Commission may
hold an informal hearing for the purpose of receiving comments
on the prior year's feedstock procurement process and any
recommendations for change.

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(l) For all purposes of this Section 1-79 and subsection
(a-5) of Section 1-75 of this Act, (i) feedstock procurement
shall be deemed to include transportation of the feedstock
products to the initial clean coal facility (including the
acquisition by the initial clean coal facility, as appropriate,
of trucks, railcars or other transportation equipment), (ii)
feedstock procurement shall not be deemed to include day-to-day
performance and administration of feedstock procurement and
transportation arrangements, including scheduling, weighing,
quality determination, acceptance or rejection of shipments,
price adjustments, documentation and related activities, all
of which shall be performed by the owner of the initial clean
coal facility, and (iii) feedstock supplier shall be deemed to
include feedstock transporters and providers of feedstock
transportation equipment.
(m) Any agreement for the purchase of SNG entered into by
the initial clean coal facility pursuant to item (xvi) of
subparagraph (D) of paragraph (3) of subsection (d) of Section
1-75 of this Act shall be deemed for all purposes, including,
but not limited to, the inclusion of costs under such agreement
being included as part of the initial clean coal facility's
actual fuel costs pursuant to subsection (d) of Section 1-76 of
this Act, to have been entered into pursuant to the procurement
process set forth in this Section 1-79, even though such
agreement shall not be subject to competitive bidding. The
Agency, the feedstock procurement administrator, and the

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feedstock procurement monitor shall take account of the initial
clean coal facility's obligations under any such agreement in
determining the feedstock procurement arrangements that may be
entered into by the initial clean coal facility pursuant to
this Section 1-79, as well as the implementation and
administration of such feedstock procurement arrangements.
(n) If and for so long as the initial clean coal facility
is an SNG-ready generating facility, the provisions of this
Section relating to the procurement of coal or other feedstock
that would be used by coal gasification units or relating to
any minimum feedstock procurement or minimum feedstock usage
shall not be applicable.
(20 ILCS 3855/1-81 new)
Sec. 1-81. Limited non-impairment.
(a) The State of Illinois pledges that the State shall not
enact any law or take any action to:
(1) break, or repeal the authority for, sourcing
agreements in a form approved by the Agency and entered
into between electric utilities and the initial clean coal
facility pursuant to subsection (d) of Section 1-75 of this
Act;
(2) break, or repeal the authority for, sourcing
agreements in a form approved by the Agency and entered
into between alternative retail electric suppliers and the
initial clean coal facility;

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(3) deny electric utilities full cost recovery for
their costs incurred under those sourcing agreements;
(4) deny the initial clean coal facility full cost
recovery under those sourcing agreements for costs that are
recoverable under Section 1-76 of this Act;
(5) repeal or remove the requirement that electric
utilities shall enter into sourcing agreements with the
initial clean coal facility under paragraph (3) of
subsection (d) of Section 1-75 of this Act or subsection
(c) of Section 16-116 of the Public Utilities Act; or
(6) repeal or remove the requirement that alternative
retail electric suppliers shall enter into sourcing
agreements with the initial clean coal facility under item
(iv) of paragraph (5) of subsection (d) of Section 16-115
of the Public Utilities Act.
These pledges are for the benefit of the parties to those
sourcing agreements and the issuers and holders of bonds or
other obligations issued or incurred to finance or refinance
the initial clean coal facility. The initial clean coal
facility is authorized to include and refer to these pledges in
any financing agreement into which it may enter in regard to
those sourcing agreements.
(b) The State of Illinois retains and reserves all other
rights to enact new or amendatory legislation or take any other
action, without impairment of the right of the initial clean
coal facility to recover prudently incurred costs resulting

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from the new or amendatory legislation or other action as
approved by the Commission, including, but not limited to,
legislation or other action that would: (1) directly or
indirectly raise the costs that the initial clean coal facility
must incur; (2) directly or indirectly place additional
restrictions, regulations, or requirements on the initial
clean coal facility; (3) prohibit sequestration in general or
prohibit a specific sequestration method or project; or (4)
increase minimum sequestration requirements for the initial
clean coal facility to a technically feasible extent.
Section 10. The Illinois Procurement Code is amended by
changing Sections 1-10 and 20-10 as follows:
(30 ILCS 500/1-10)
Sec. 1-10. Application.
(a) This Code applies only to procurements for which
contractors were first solicited on or after July 1, 1998. This
Code shall not be construed to affect or impair any contract,
or any provision of a contract, entered into based on a
solicitation prior to the implementation date of this Code as
described in Article 99, including but not limited to any
covenant entered into with respect to any revenue bonds or
similar instruments. All procurements for which contracts are
solicited between the effective date of Articles 50 and 99 and
July 1, 1998 shall be substantially in accordance with this

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Code and its intent.
(b) This Code shall apply regardless of the source of the
funds with which the contracts are paid, including federal
assistance moneys. This Code shall not apply to:
(1) Contracts between the State and its political
subdivisions or other governments, or between State
governmental bodies except as specifically provided in
this Code.
(2) Grants, except for the filing requirements of
Section 20-80.
(3) Purchase of care.
(4) Hiring of an individual as employee and not as an
independent contractor, whether pursuant to an employment
code or policy or by contract directly with that
individual.
(5) Collective bargaining contracts.
(6) Purchase of real estate, except that notice of this
type of contract with a value of more than $25,000 must be
published in the Procurement Bulletin within 7 days after
the deed is recorded in the county of jurisdiction. The
notice shall identify the real estate purchased, the names
of all parties to the contract, the value of the contract,
and the effective date of the contract.
(7) Contracts necessary to prepare for anticipated
litigation, enforcement actions, or investigations,
provided that the chief legal counsel to the Governor shall

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give his or her prior approval when the procuring agency is
one subject to the jurisdiction of the Governor, and
provided that the chief legal counsel of any other
procuring entity subject to this Code shall give his or her
prior approval when the procuring entity is not one subject
to the jurisdiction of the Governor.
(8) Contracts for services to Northern Illinois
University by a person, acting as an independent
contractor, who is qualified by education, experience, and
technical ability and is selected by negotiation for the
purpose of providing non-credit educational service
activities or products by means of specialized programs
offered by the university.
(9) Procurement expenditures by the Illinois
Conservation Foundation when only private funds are used.
(10) Procurement expenditures by the Illinois Health
Information Exchange Authority involving private funds
from the Health Information Exchange Fund. "Private funds"
means gifts, donations, and private grants.
(11) Public-private agreements entered into according
to the procurement requirements of Section 20 of the
Public-Private Partnerships for Transportation Act and
design-build agreements entered into according to the
procurement requirements of Section 25 of the
Public-Private Partnerships for Transportation Act.
(c) This Code does not apply to the electric power

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procurement process provided for under Section 1-75 of the
Illinois Power Agency Act and Section 16-111.5 of the Public
Utilities Act.
(d) Except for Section 20-160 and Article 50 of this Code,
and as expressly required by Section 9.1 of the Illinois
Lottery Law, the provisions of this Code do not apply to the
procurement process provided for under Section 9.1 of the
Illinois Lottery Law.
(e) This Code does not apply to the process used by the
Capital Development Board to retain a person or entity to
assist the Capital Development Board with its duties related to
the determination of costs of a clean coal SNG brownfield
facility, as defined by Section 1-10 of the Illinois Power
Agency Act, as required in subsection (h-3) of Section 9-220 of
the Public Utilities Act, including calculating the range of
capital costs, the range of operating and maintenance costs, or
the sequestration costs or monitoring the construction of clean
coal SNG brownfield facility for the full duration of
construction.
(f) This Code does not apply to the process used by the
Illinois Power Agency to retain a mediator to mediate sourcing
agreement disputes between gas utilities and the clean coal SNG
brownfield facility, as defined in Section 1-10 of the Illinois
Power Agency Act, as required under subsection (h-1) of Section
9-220 of the Public Utilities Act.
(g) This Code does not apply to the processes used by the

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Illinois Power Agency to retain a mediator to mediate contract
disputes between gas utilities and the clean coal SNG facility
and to retain an expert to assist in the review of contracts
under subsection (h) of Section 9-220 of the Public Utilities
Act. This Code does not apply to the process used by the
Illinois Commerce Commission to retain an expert to assist in
determining the actual incurred costs of the clean coal SNG
facility and the reasonableness of those costs as required
under subsection (h) of Section 9-220 of the Public Utilities
Act.
(h) This Code does not apply to the process to procure or
contracts entered into in accordance with Sections 11-5.2 and
11-5.3 of the Illinois Public Aid Code.
(i) (h) Each chief procurement officer may access records
necessary to review whether a contract, purchase, or other
expenditure is or is not subject to the provisions of this
Code, unless such records would be subject to attorney-client
privilege.
(j) This Code does not apply to the process used by the
Capital Development Board to retain a person or entity to
assist the Capital Development Board with its duties related to
the determination of costs of an initial clean coal facility,
as defined under Section 1-10 of the Illinois Power Agency Act,
as required under Section 1-76 of the Illinois Power Agency
Act, including calculating the range of capital costs or the
sequestration costs or monitoring the construction of initial

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clean coal facility for the full duration of construction.
(k) This Code does not apply to the process used by the
Illinois Power Agency to retain a mediator to mediate sourcing
agreement disputes between electric utilities or alternative
retail electric suppliers and the initial clean coal facility,
as defined under Section 1-10 of the Illinois Power Agency Act,
as required under paragraph (4) of subsection (d) of Section
1-75 of the Illinois Power Agency Act. This Code does not apply
to the process used by the Illinois Commerce Commission to
retain an expert to assist the Commission with its duties
related to the determination of the costs of an initial clean
coal facility, as defined under Section 1-10 of the Illinois
Power Agency Act, as required under Section 1-76 of the
Illinois Power Agency Act, including determining the initial
clean coal facility's operations and maintenance costs, or
compliance with capture and sequestration requirements.
(Source: P.A. 96-840, eff. 12-23-09; 96-1331, eff. 7-27-10;
97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-502, eff. 8-23-11;
97-689, eff. 6-14-12; 97-813, eff. 7-13-12; 97-895, eff.
8-3-12; revised 8-23-12.)
(30 ILCS 500/20-10)
(Text of Section from P.A. 96-159, 96-588, 97-96, and
97-895)
Sec. 20-10. Competitive sealed bidding; reverse auction.
(a) Conditions for use. All contracts shall be awarded by

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competitive sealed bidding except as otherwise provided in
Section 20-5.
(b) Invitation for bids. An invitation for bids shall be
issued and shall include a purchase description and the
material contractual terms and conditions applicable to the
procurement.
(c) Public notice. Public notice of the invitation for bids
shall be published in the Illinois Procurement Bulletin at
least 14 days before the date set in the invitation for the
opening of bids.
(d) Bid opening. Bids shall be opened publicly in the
presence of one or more witnesses at the time and place
designated in the invitation for bids. The name of each bidder,
the amount of each bid, and other relevant information as may
be specified by rule shall be recorded. After the award of the
contract, the winning bid and the record of each unsuccessful
bid shall be open to public inspection.
(e) Bid acceptance and bid evaluation. Bids shall be
unconditionally accepted without alteration or correction,
except as authorized in this Code. Bids shall be evaluated
based on the requirements set forth in the invitation for bids,
which may include criteria to determine acceptability such as
inspection, testing, quality, workmanship, delivery, and
suitability for a particular purpose. Those criteria that will
affect the bid price and be considered in evaluation for award,
such as discounts, transportation costs, and total or life

HB0103 - 129 - LRB098 04222 AMC 34247 b
cycle costs, shall be objectively measurable. The invitation
for bids shall set forth the evaluation criteria to be used.
(f) Correction or withdrawal of bids. Correction or
withdrawal of inadvertently erroneous bids before or after
award, or cancellation of awards of contracts based on bid
mistakes, shall be permitted in accordance with rules. After
bid opening, no changes in bid prices or other provisions of
bids prejudicial to the interest of the State or fair
competition shall be permitted. All decisions to permit the
correction or withdrawal of bids based on bid mistakes shall be
supported by written determination made by a State purchasing
officer.
(g) Award. The contract shall be awarded with reasonable
promptness by written notice to the lowest responsible and
responsive bidder whose bid meets the requirements and criteria
set forth in the invitation for bids, except when a State
purchasing officer determines it is not in the best interest of
the State and by written explanation determines another bidder
shall receive the award. The explanation shall appear in the
appropriate volume of the Illinois Procurement Bulletin. The
written explanation must include:
(1) a description of the agency's needs;
(2) a determination that the anticipated cost will be
fair and reasonable;
(3) a listing of all responsible and responsive
bidders; and

HB0103 - 130 - LRB098 04222 AMC 34247 b
(4) the name of the bidder selected, the total contract
price, and the reasons for selecting that bidder.
Each chief procurement officer may adopt guidelines to
implement the requirements of this subsection (g).
The written explanation shall be filed with the Legislative
Audit Commission and the Procurement Policy Board, and be made
available for inspection by the public, within 30 days after
the agency's decision to award the contract.
(h) Multi-step sealed bidding. When it is considered
impracticable to initially prepare a purchase description to
support an award based on price, an invitation for bids may be
issued requesting the submission of unpriced offers to be
followed by an invitation for bids limited to those bidders
whose offers have been qualified under the criteria set forth
in the first solicitation.
(i) Alternative procedures. Notwithstanding any other
provision of this Act to the contrary, the Director of the
Illinois Power Agency may create alternative bidding
procedures to be used in procuring professional services under
subsections subsection (a) and (a-5) of Section 1-75, and
subsection (d) of Section 1-78, and subsection (d) of Section
1-79 of the Illinois Power Agency Act and Section 16-111.5(c)
of the Public Utilities Act and to procure renewable energy
resources under Section 1-56 of the Illinois Power Agency Act.
These alternative procedures shall be set forth together with
the other criteria contained in the invitation for bids, and

HB0103 - 131 - LRB098 04222 AMC 34247 b
shall appear in the appropriate volume of the Illinois
Procurement Bulletin.
(j) Reverse auction. Notwithstanding any other provision
of this Section and in accordance with rules adopted by the
chief procurement officer, that chief procurement officer may
procure supplies or services through a competitive electronic
auction bidding process after the chief procurement officer
determines that the use of such a process will be in the best
interest of the State. The chief procurement officer shall
publish that determination in his or her next volume of the
Illinois Procurement Bulletin.
An invitation for bids shall be issued and shall include
(i) a procurement description, (ii) all contractual terms,
whenever practical, and (iii) conditions applicable to the
procurement, including a notice that bids will be received in
an electronic auction manner.
Public notice of the invitation for bids shall be given in
the same manner as provided in subsection (c).
Bids shall be accepted electronically at the time and in
the manner designated in the invitation for bids. During the
auction, a bidder's price shall be disclosed to other bidders.
Bidders shall have the opportunity to reduce their bid prices
during the auction. At the conclusion of the auction, the
record of the bid prices received and the name of each bidder
shall be open to public inspection.
After the auction period has terminated, withdrawal of bids

HB0103 - 132 - LRB098 04222 AMC 34247 b
shall be permitted as provided in subsection (f).
The contract shall be awarded within 60 days after the
auction by written notice to the lowest responsible bidder, or
all bids shall be rejected except as otherwise provided in this
Code. Extensions of the date for the award may be made by
mutual written consent of the State purchasing officer and the
lowest responsible bidder.
This subsection does not apply to (i) procurements of
professional and artistic services, (ii) telecommunications
services, communication services, and information services,
and (iii) contracts for construction projects, including
design professional services.
(Source: P.A. 96-159, eff. 8-10-09; 96-588, eff. 8-18-09;
97-96, eff. 7-13-11; 97-895, eff. 8-3-12.)
(Text of Section from P.A. 96-159, 96-795, 97-96, and
97-895)
Sec. 20-10. Competitive sealed bidding; reverse auction.
(a) Conditions for use. All contracts shall be awarded by
competitive sealed bidding except as otherwise provided in
Section 20-5.
(b) Invitation for bids. An invitation for bids shall be
issued and shall include a purchase description and the
material contractual terms and conditions applicable to the
procurement.
(c) Public notice. Public notice of the invitation for bids

HB0103 - 133 - LRB098 04222 AMC 34247 b
shall be published in the Illinois Procurement Bulletin at
least 14 days before the date set in the invitation for the
opening of bids.
(d) Bid opening. Bids shall be opened publicly in the
presence of one or more witnesses at the time and place
designated in the invitation for bids. The name of each bidder,
the amount of each bid, and other relevant information as may
be specified by rule shall be recorded. After the award of the
contract, the winning bid and the record of each unsuccessful
bid shall be open to public inspection.
(e) Bid acceptance and bid evaluation. Bids shall be
unconditionally accepted without alteration or correction,
except as authorized in this Code. Bids shall be evaluated
based on the requirements set forth in the invitation for bids,
which may include criteria to determine acceptability such as
inspection, testing, quality, workmanship, delivery, and
suitability for a particular purpose. Those criteria that will
affect the bid price and be considered in evaluation for award,
such as discounts, transportation costs, and total or life
cycle costs, shall be objectively measurable. The invitation
for bids shall set forth the evaluation criteria to be used.
(f) Correction or withdrawal of bids. Correction or
withdrawal of inadvertently erroneous bids before or after
award, or cancellation of awards of contracts based on bid
mistakes, shall be permitted in accordance with rules. After
bid opening, no changes in bid prices or other provisions of

HB0103 - 134 - LRB098 04222 AMC 34247 b
bids prejudicial to the interest of the State or fair
competition shall be permitted. All decisions to permit the
correction or withdrawal of bids based on bid mistakes shall be
supported by written determination made by a State purchasing
officer.
(g) Award. The contract shall be awarded with reasonable
promptness by written notice to the lowest responsible and
responsive bidder whose bid meets the requirements and criteria
set forth in the invitation for bids, except when a State
purchasing officer determines it is not in the best interest of
the State and by written explanation determines another bidder
shall receive the award. The explanation shall appear in the
appropriate volume of the Illinois Procurement Bulletin. The
written explanation must include:
(1) a description of the agency's needs;
(2) a determination that the anticipated cost will be
fair and reasonable;
(3) a listing of all responsible and responsive
bidders; and
(4) the name of the bidder selected, the total contract
price, and the reasons for selecting that bidder.
Each chief procurement officer may adopt guidelines to
implement the requirements of this subsection (g).
The written explanation shall be filed with the Legislative
Audit Commission and the Procurement Policy Board, and be made
available for inspection by the public, within 30 days after

HB0103 - 135 - LRB098 04222 AMC 34247 b
the agency's decision to award the contract.
(h) Multi-step sealed bidding. When it is considered
impracticable to initially prepare a purchase description to
support an award based on price, an invitation for bids may be
issued requesting the submission of unpriced offers to be
followed by an invitation for bids limited to those bidders
whose offers have been qualified under the criteria set forth
in the first solicitation.
(i) Alternative procedures. Notwithstanding any other
provision of this Act to the contrary, the Director of the
Illinois Power Agency may create alternative bidding
procedures to be used in procuring professional services under
subsections subsection (a) and (a-5) of Section 1-75, and
subsection (d) of Section 1-78, and subsection (d) of Section
1-79 of the Illinois Power Agency Act and Section 16-111.5(c)
of the Public Utilities Act and to procure renewable energy
resources under Section 1-56 of the Illinois Power Agency Act.
These alternative procedures shall be set forth together with
the other criteria contained in the invitation for bids, and
shall appear in the appropriate volume of the Illinois
Procurement Bulletin.
(j) Reverse auction. Notwithstanding any other provision
of this Section and in accordance with rules adopted by the
chief procurement officer, that chief procurement officer may
procure supplies or services through a competitive electronic
auction bidding process after the chief procurement officer

HB0103 - 136 - LRB098 04222 AMC 34247 b
determines that the use of such a process will be in the best
interest of the State. The chief procurement officer shall
publish that determination in his or her next volume of the
Illinois Procurement Bulletin.
An invitation for bids shall be issued and shall include
(i) a procurement description, (ii) all contractual terms,
whenever practical, and (iii) conditions applicable to the
procurement, including a notice that bids will be received in
an electronic auction manner.
Public notice of the invitation for bids shall be given in
the same manner as provided in subsection (c).
Bids shall be accepted electronically at the time and in
the manner designated in the invitation for bids. During the
auction, a bidder's price shall be disclosed to other bidders.
Bidders shall have the opportunity to reduce their bid prices
during the auction. At the conclusion of the auction, the
record of the bid prices received and the name of each bidder
shall be open to public inspection.
After the auction period has terminated, withdrawal of bids
shall be permitted as provided in subsection (f).
The contract shall be awarded within 60 days after the
auction by written notice to the lowest responsible bidder, or
all bids shall be rejected except as otherwise provided in this
Code. Extensions of the date for the award may be made by
mutual written consent of the State purchasing officer and the
lowest responsible bidder.

HB0103 - 137 - LRB098 04222 AMC 34247 b
This subsection does not apply to (i) procurements of
professional and artistic services, (ii) telecommunications
services, communication services, and information services,
and (iii) contracts for construction projects, including
design professional services.
(Source: P.A. 96-159, eff. 8-10-09; 96-795, eff. 7-1-10 (see
Section 5 of P.A. 96-793 for the effective date of changes made
by P.A. 96-795); 97-96, eff. 7-13-11; 97-895, eff. 8-3-12.)
Section 15. The Public Utilities Act is amended by changing
Sections 16-115 and 16-116 as follows:
(220 ILCS 5/16-115)
Sec. 16-115. Certification of alternative retail electric
suppliers.
(a) Any alternative retail electric supplier must obtain a
certificate of service authority from the Commission in
accordance with this Section before serving any retail customer
or other user located in this State. An alternative retail
electric supplier may request, and the Commission may grant, a
certificate of service authority for the entire State or for a
specified geographic area of the State.
(b) An alternative retail electric supplier seeking a
certificate of service authority shall file with the Commission
a verified application containing information showing that the
applicant meets the requirements of this Section. The

HB0103 - 138 - LRB098 04222 AMC 34247 b
alternative retail electric supplier shall publish notice of
its application in the official State newspaper within 10 days
following the date of its filing. No later than 45 days after
the application is properly filed with the Commission, and such
notice is published, the Commission shall issue its order
granting or denying the application.
(c) An application for a certificate of service authority
shall identify the area or areas in which the applicant intends
to offer service and the types of services it intends to offer.
Applicants that seek to serve residential or small commercial
retail customers within a geographic area that is smaller than
an electric utility's service area shall submit evidence
demonstrating that the designation of this smaller area does
not violate Section 16-115A. An applicant that seeks to serve
residential or small commercial retail customers may state in
its application for certification any limitations that will be
imposed on the number of customers or maximum load to be
served.
(d) The Commission shall grant the application for a
certificate of service authority if it makes the findings set
forth in this subsection based on the verified application and
such other information as the applicant may submit:
(1) That the applicant possesses sufficient technical,
financial and managerial resources and abilities to
provide the service for which it seeks a certificate of
service authority. In determining the level of technical,

HB0103 - 139 - LRB098 04222 AMC 34247 b
financial and managerial resources and abilities which the
applicant must demonstrate, the Commission shall consider
(i) the characteristics, including the size and financial
sophistication, of the customers that the applicant seeks
to serve, and (ii) whether the applicant seeks to provide
electric power and energy using property, plant and
equipment which it owns, controls or operates;
(2) That the applicant will comply with all applicable
federal, State, regional and industry rules, policies,
practices and procedures for the use, operation, and
maintenance of the safety, integrity and reliability, of
the interconnected electric transmission system;
(3) That the applicant will only provide service to
retail customers in an electric utility's service area that
are eligible to take delivery services under this Act;
(4) That the applicant will comply with such
informational or reporting requirements as the Commission
may by rule establish and provide the information required
by Section 16-112. Any data related to contracts for the
purchase and sale of electric power and energy shall be
made available for review by the Staff of the Commission on
a confidential and proprietary basis and only to the extent
and for the purposes which the Commission determines are
reasonably necessary in order to carry out the purposes of
this Act;
(5) That the applicant will procure renewable energy

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resources in accordance with Section 16-115D of this Act,
and will source electricity from clean coal facilities, as
defined in Section 1-10 of the Illinois Power Agency Act,
in amounts at least equal to the amounts percentages set
forth in subsections (c) and (d) of Section 1-75 of the
Illinois Power Agency Act. For purposes of this Section:
(i) (blank) (Blank);
(ii) (blank) (Blank);
(iii) the required sourcing of electricity
generated by clean coal facilities, other than the
initial clean coal facility, shall be limited to the
amount of electricity that can be procured or sourced
at a price at or below the benchmarks approved by the
Commission each year in accordance with item (1) of
subsection (c) and items (1) and (5) of subsection (d)
of Section 1-75 of the Illinois Power Agency Act;
(iv) all alternative retail electric suppliers,
whether certified before or after the effective date of
this amendatory Act of the 98th General Assembly, shall
execute a sourcing agreement to source electricity
from the initial clean coal facility, on the terms set
forth in paragraphs (3) and (4) of subsection (d) of
Section 1-75 of the Illinois Power Agency Act, with
each reference therein to "utility" being deemed to be
a reference to an alternative retail electric
supplier, except that in lieu of the requirements in

HB0103 - 141 - LRB098 04222 AMC 34247 b
subparagraphs (B)(v), (D)(ii), and (D)(vii) (A)(v),
(B)(i), (C)(v), and (C)(vi) of paragraph (3) of that
subsection (d) shall not apply; , the applicant shall
execute one or more of the following:
(1) if the sourcing agreement is a power
purchase agreement, a contract with the initial
clean coal facility to purchase in each hour an
amount of electricity equal to all clean coal
energy made available from the initial clean coal
facility during such hour, which the utilities are
not required to procure under the terms of
subsection (d) of Section 1-75 of the Illinois
Power Agency Act, multiplied by a fraction, the
numerator of which is the alternative retail
electric supplier's retail market sales of
electricity (expressed in kilowatthours sold) in
the State during the prior calendar month and the
denominator of which is the total sales of
electricity (expressed in kilowatthours sold) in
the State by alternative retail electric suppliers
during such prior month that are subject to the
requirements of this paragraph (5) of subsection
(d) of this Section and subsection (d) of Section
1-75 of the Illinois Power Agency Act plus the
total sales of electricity (expressed in
kilowatthours sold) by utilities outside of their

HB0103 - 142 - LRB098 04222 AMC 34247 b
service areas during such prior month, pursuant to
subsection (c) of Section 16-116 of this Act; or
(2) if the sourcing agreement is a contract for
differences, a contract with the initial clean
coal facility in each hour with respect to an
amount of electricity equal to all clean coal
energy made available from the initial clean coal
facility during such hour, which the utilities are
not required to procure under the terms of
subsection (d) of Section 1-75 of the Illinois
Power Agency Act, multiplied by a fraction, the
numerator of which is the alternative retail
electric supplier's retail market sales of
electricity (expressed in kilowatthours sold) in
the State during the prior calendar month and the
denominator of which is the total sales of
electricity (expressed in kilowatthours sold) in
the State by alternative retail electric suppliers
during such prior month that are subject to the
requirements of this paragraph (5) of subsection
(d) of this Section and subsection (d) of Section
1-75 of the Illinois Power Agency Act plus the
total sales of electricity (expressed in
kilowatthours sold) by utilities outside of their
service areas during such prior month, pursuant to
subsection (c) of Section 16-116 of this Act;

HB0103 - 143 - LRB098 04222 AMC 34247 b
(v) (blank); if, in any year after the first year
of commercial operation, the owner of the clean coal
facility fails to demonstrate to the Commission that
the initial clean coal facility captured and
sequestered at least 50% of the total carbon emissions
that the facility would otherwise emit or that
sequestration of emissions from prior years has
failed, resulting in the release of carbon into the
atmosphere, the owner of the facility must offset
excess emissions. Any such carbon offsets must be
permanent, additional, verifiable, real, located
within the State of Illinois, and legally and
practicably enforceable. The costs of any such offsets
that are not recoverable shall not exceed $15 million
in any given year. No costs of any such purchases of
carbon offsets may be recovered from an alternative
retail electric supplier or its customers. All carbon
offsets purchased for this purpose and any carbon
emission credits associated with sequestration of
carbon from the facility must be permanently retired.
The initial clean coal facility shall not forfeit its
designation as a clean coal facility if the facility
fails to fully comply with the applicable carbon
sequestration requirements in any given year, provided
the requisite offsets are purchased. However, the
Attorney General, on behalf of the People of the State

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of Illinois, may specifically enforce the facility's
sequestration requirement and the other terms of this
contract provision. Compliance with the sequestration
requirements and offset purchase requirements that
apply to the initial clean coal facility shall be
reviewed annually by an independent expert retained by
the owner of the initial clean coal facility, with the
advance written approval of the Attorney General;
(vi) the The Commission shall, after notice and
hearing, revoke the certification of any alternative
retail electric supplier that fails to execute a
sourcing agreement with the initial clean coal
facility as required by item (5) of subsection (d) of
this Section. The sourcing agreements with the this
initial clean coal facility shall be subject to
approval both approval of the initial clean coal
facility by the Illinois Power Agency pursuant to
paragraph (4) of subsection (d) of Section 1-75 of the
Illinois Power Agency Act General Assembly and
satisfaction of the requirements of item (4) of
subsection (d) of Section 1-75 of the Illinois Power
Agency Act, and shall be executed within 30 90 days
after any such approval by the Illinois Power Agency or
the issuance of any necessary approval by the Federal
Energy Regulatory Commission, whichever is later;
(vii) The Commission shall have jurisdiction over

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disciplinary proceedings and complaints for violations
of this Section. If, upon complaint, the Commission
determines an alternative retail electric supplier has
failed to execute a sourcing agreement with the initial
clean coal facility, then the Commission shall issue
notice of the finding to the alternative retail
electric supplier. The alternative retail electric
supplier shall have 30 days after the receipt of notice
to enter into a sourcing agreement. If, after the
notice period, the Commission finds an alternative
retail electric supplier has failed to comply, then the
Commission shall revoke the alternative retail
electric supplier's certificate for 6 months General
Assembly. The Commission shall not accept an
application for certification from an alternative
retail electric supplier that has lost certification
under this subsection (d), or any corporate affiliate
thereof, for at least one year from the date of
revocation;
(6) With respect to an applicant that seeks to serve
residential or small commercial retail customers, that the
area to be served by the applicant and any limitations it
proposes on the number of customers or maximum amount of
load to be served meet the provisions of Section 16-115A,
provided, that the Commission can extend the time for
considering such a certificate request by up to 90 days,

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and can schedule hearings on such a request;
(7) That the applicant meets the requirements of
subsection (a) of Section 16-128; and
(8) That the applicant will comply with all other
applicable laws and regulations.
(d-5) (Blank).
(e) A retail customer that owns a cogeneration or
self-generation facility and that seeks certification only to
provide electric power and energy from such facility to retail
customers at separate locations which customers are both (i)
owned by, or a subsidiary or other corporate affiliate of, such
applicant and (ii) eligible for delivery services, shall be
granted a certificate of service authority upon filing an
application and notifying the Commission that it has entered
into an agreement with the relevant electric utilities pursuant
to Section 16-118. Provided, however, that if the retail
customer owning such cogeneration or self-generation facility
would not be charged a transition charge due to the exemption
provided under subsection (f) of Section 16-108 prior to the
certification, and the retail customers at separate locations
are taking delivery services in conjunction with purchasing
power and energy from the facility, the retail customer on
whose premises the facility is located shall not thereafter be
required to pay transition charges on the power and energy that
such retail customer takes from the facility.
(f) The Commission shall have the authority to promulgate

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rules and regulations to carry out the provisions of this
Section. On or before May 1, 1999, the Commission shall adopt a
rule or rules applicable to the certification of those
alternative retail electric suppliers that seek to serve only
nonresidential retail customers with maximum electrical
demands of one megawatt or more which shall provide for (i)
expedited and streamlined procedures for certification of such
alternative retail electric suppliers and (ii) specific
criteria which, if met by any such alternative retail electric
supplier, shall constitute the demonstration of technical,
financial and managerial resources and abilities to provide
service required by subsection (d) (1) of this Section, such as
a requirement to post a bond or letter of credit, from a
responsible surety or financial institution, of sufficient
size for the nature and scope of the services to be provided;
demonstration of adequate insurance for the scope and nature of
the services to be provided; and experience in providing
similar services in other jurisdictions.
(g) In any proceeding initiated by a public utility
pursuant to Section 8-406 or Section 8-406.1 of this Act for a
certificate of public convenience and necessity to construct
and operate any utility plant, equipment, or facility required
to provide service to the initial clean coal facility, it shall
be conclusively presumed that the public convenience and
necessity require the construction of such utility plant,
equipment, or facility. In any proceeding initiated by a public

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utility pursuant to Section 8-503 of this Act for an order
directing the addition, extension, or improvement of any
utility plant, equipment, facilities, or other property or the
erection of any new utility plant, equipment, or facilities to
provide service to the initial clean coal facility, it shall be
conclusively presumed that such additional, extended, improved
or new utility plant, equipment, facility, or other property is
necessary and should be added, extended, or erected.
(Source: P.A. 95-130, eff. 1-1-08; 95-1027, eff. 6-1-09;
96-159, eff. 8-10-09.)
(220 ILCS 5/16-116)
Sec. 16-116. Commission oversight of electric utilities
serving retail customers outside their service areas or
providing competitive, non-tariffed services.
(a) An electric utility that has a tariff on file for
delivery services may, without regard to any otherwise
applicable tariffs on file, provide electric power and energy
to one or more retail customers located outside its service
area, but only to the extent (i) such retail customer (A) is
eligible for delivery services under any delivery services
tariff filed with the Commission by the electric utility in
whose service area the retail customer is located and (B) has
either elected to take such delivery services or has paid or
contracted to pay the charges specified in Sections 16-108 and
16-114, or (ii) if such retail customer is served by a

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municipal system or electric cooperative, the customer is
eligible for delivery services under the terms and conditions
for such service established by the municipal system or
electric cooperative serving that customer.
(b) An electric utility may offer any competitive service
to any customer or group of customers without filing contracts
with or seeking approval of the Commission, notwithstanding any
rule or regulation that would require such approval. The
Commission shall not increase or decrease the prices, and may
not alter or add to the terms and conditions for the utility's
competitive services, from those agreed to by the electric
utility and the customer or customers. Non-tariffed,
competitive services shall not be subject to the provisions of
the Electric Supplier Act or to Articles V, VII, VIII or IX of
the Act, except to the extent that any provisions of such
Articles are made applicable to alternative retail electric
suppliers pursuant to Sections 16-115 and 16-115A, but shall be
subject to the provisions of subsections (b) through (g) of
Section 16-115A, and Section 16-115B to the same extent such
provisions are applicable to the services provided by
alternative retail electric suppliers.
(c) Electric utilities serving retail customers outside
their service areas shall be subject to the requirements of
paragraph (5) of subsection (d) of Section 16-115 of the Public
Utilities Act, except that the numerators referred to in that
subsection (d) shall be the utility's retail market sales of

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electricity (expressed in kilowatthours sold) in the State
outside of the utility's service territory in the prior month.
(Source: P.A. 95-1027, eff. 6-1-09.)
Section 900. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
Section 999. Effective date. This Act takes effect upon
becoming law.