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

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

Spectrum: Partisan Bill (Democrat 1-0)

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

Download: Illinois-2017-HB3687-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB3687 Introduced , by Rep. Kelly M. Burke SYNOPSIS AS INTRODUCED:
220 ILCS 5/8-103
220 ILCS 5/8-103B
220 ILCS 5/8-104
Amends the Public Utilities Act. Modifies Sections concerning energy efficiency and demand-response measures to require a utility under those Sections to develop a program that provides residential and small commercial customers a rebate for customer investment in technologies which result in at least a 3% reduction in the customers' energy usage from the previous calendar year. Provides accompanying requirements for the developed programs. Effective immediately or on the date that specified provisions of Public Act 99-906 take effect, whichever is later.
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A BILL FOR
HB3687 LRB100 06860 RJF 16909 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Utilities Act is amended by changing
Sections 8-103, 8-103B, and 8-104 as follows:
(220 ILCS 5/8-103)
(Text of Section before amendment by P.A. 99-906)
Sec. 8-103. Energy efficiency and demand-response
measures.
(a) It is the policy of the State that electric utilities
are required to use cost-effective energy efficiency and
demand-response measures to reduce delivery load. Requiring
investment in cost-effective energy efficiency and
demand-response measures will reduce direct and indirect costs
to consumers by decreasing environmental impacts and by
avoiding or delaying the need for new generation, transmission,
and distribution infrastructure. It serves the public interest
to allow electric utilities to recover costs for reasonably and
prudently incurred expenses for energy efficiency and
demand-response measures. As used in this Section,
"cost-effective" means that the measures satisfy the total
resource cost test. The low-income measures described in
subsection (f)(4) of this Section shall not be required to meet

HB3687 - 2 - LRB100 06860 RJF 16909 b
the total resource cost test. For purposes of this Section, the
terms "energy-efficiency", "demand-response", "electric
utility", and "total resource cost test" shall have the
meanings set forth in the Illinois Power Agency Act. For
purposes of this Section, the amount per kilowatthour means the
total amount paid for electric service expressed on a per
kilowatthour basis. For purposes of this Section, the total
amount paid for electric service includes without limitation
estimated amounts paid for supply, transmission, distribution,
surcharges, and add-on-taxes.
(b) Electric utilities shall implement cost-effective
energy efficiency measures to meet the following incremental
annual energy savings goals:
(1) 0.2% of energy delivered in the year commencing
June 1, 2008;
(2) 0.4% of energy delivered in the year commencing
June 1, 2009;
(3) 0.6% of energy delivered in the year commencing
June 1, 2010;
(4) 0.8% of energy delivered in the year commencing
June 1, 2011;
(5) 1% of energy delivered in the year commencing June
1, 2012;
(6) 1.4% of energy delivered in the year commencing
June 1, 2013;
(7) 1.8% of energy delivered in the year commencing

HB3687 - 3 - LRB100 06860 RJF 16909 b
June 1, 2014; and
(8) 2% of energy delivered in the year commencing June
1, 2015 and each year thereafter.
Electric utilities may comply with this subsection (b) by
meeting the annual incremental savings goal in the applicable
year or by showing that the total cumulative annual savings
within a 3-year planning period associated with measures
implemented after May 31, 2014 was equal to the sum of each
annual incremental savings requirement from May 31, 2014
through the end of the applicable year.
(c) Electric utilities shall implement cost-effective
demand-response measures to reduce peak demand by 0.1% over the
prior year for eligible retail customers, as defined in Section
16-111.5 of this Act, and for customers that elect hourly
service from the utility pursuant to Section 16-107 of this
Act, provided those customers have not been declared
competitive. This requirement commences June 1, 2008 and
continues for 10 years.
(d) Notwithstanding the requirements of subsections (b)
and (c) of this Section, an electric utility shall reduce the
amount of energy efficiency and demand-response measures
implemented over a 3-year planning period by an amount
necessary to limit the estimated average annual increase in the
amounts paid by retail customers in connection with electric
service due to the cost of those measures to:
(1) in 2008, no more than 0.5% of the amount paid per

HB3687 - 4 - LRB100 06860 RJF 16909 b
kilowatthour by those customers during the year ending May
31, 2007;
(2) in 2009, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2008 or 1% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(3) in 2010, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2009 or 1.5% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(4) in 2011, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2010 or 2% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007; and
(5) thereafter, the amount of energy efficiency and
demand-response measures implemented for any single year
shall be reduced by an amount necessary to limit the
estimated average net increase due to the cost of these
measures included in the amounts paid by eligible retail
customers in connection with electric service to no more
than the greater of 2.015% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007 or the incremental amount per kilowatthour paid

HB3687 - 5 - LRB100 06860 RJF 16909 b
for these measures in 2011.
No later than June 30, 2011, the Commission shall review
the limitation on the amount of energy efficiency and
demand-response measures implemented pursuant to this Section
and report to the General Assembly its findings as to whether
that limitation unduly constrains the procurement of energy
efficiency and demand-response measures.
(e) Electric utilities shall be responsible for overseeing
the design, development, and filing of energy efficiency and
demand-response plans with the Commission. Electric utilities
shall implement 100% of the demand-response measures in the
plans. Electric utilities shall implement 75% of the energy
efficiency measures approved by the Commission, and may, as
part of that implementation, outsource various aspects of
program development and implementation. The remaining 25% of
those energy efficiency measures approved by the Commission
shall be implemented by the Department of Commerce and Economic
Opportunity, and must be designed in conjunction with the
utility and the filing process. The Department may outsource
development and implementation of energy efficiency measures.
A minimum of 10% of the entire portfolio of cost-effective
energy efficiency measures shall be procured from units of
local government, municipal corporations, school districts,
and community college districts. The Department shall
coordinate the implementation of these measures.
The apportionment of the dollars to cover the costs to

HB3687 - 6 - LRB100 06860 RJF 16909 b
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and contracts to the utility. The Department is authorized to
adopt any rules necessary and prescribe procedures in order to
ensure compliance by applicants in carrying out the purposes of
rebate agreements for energy efficiency measures implemented
by the Department made under this Section.
The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency and demand-response measures that the utility
implements.
A utility providing approved energy efficiency and
demand-response measures in the State shall be permitted to
recover costs of those measures through an automatic adjustment
clause tariff filed with and approved by the Commission. The
tariff shall be established outside the context of a general
rate case. Each year the Commission shall initiate a review to
reconcile any amounts collected with the actual costs and to
determine the required adjustment to the annual tariff factor
to match annual expenditures.
Each utility shall include, in its recovery of costs, the
costs estimated for both the utility's and the Department's

HB3687 - 7 - LRB100 06860 RJF 16909 b
implementation of energy efficiency and demand-response
measures. Costs collected by the utility for measures
implemented by the Department shall be submitted to the
Department pursuant to Section 605-323 of the Civil
Administrative Code of Illinois, shall be deposited into the
Energy Efficiency Portfolio Standards Fund, and shall be used
by the Department solely for the purpose of implementing these
measures. A utility shall not be required to advance any moneys
to the Department but only to forward such funds as it has
collected. The Department shall report to the Commission on an
annual basis regarding the costs actually incurred by the
Department in the implementation of the measures. Any changes
to the costs of energy efficiency measures as a result of plan
modifications shall be appropriately reflected in amounts
recovered by the utility and turned over to the Department.
The portfolio of measures, administered by both the
utilities and the Department, shall, in combination, be
designed to achieve the annual savings targets described in
subsections (b) and (c) of this Section, as modified by
subsection (d) of this Section.
The utility and the Department shall agree upon a
reasonable portfolio of measures and determine the measurable
corresponding percentage of the savings goals associated with
measures implemented by the utility or Department.
No utility shall be assessed a penalty under subsection (f)
of this Section for failure to make a timely filing if that

HB3687 - 8 - LRB100 06860 RJF 16909 b
failure is the result of a lack of agreement with the
Department with respect to the allocation of responsibilities
or related costs or target assignments. In that case, the
Department and the utility shall file their respective plans
with the Commission and the Commission shall determine an
appropriate division of measures and programs that meets the
requirements of this Section.
If the Department is unable to meet incremental annual
performance goals for the portion of the portfolio implemented
by the Department, then the utility and the Department shall
jointly submit a modified filing to the Commission explaining
the performance shortfall and recommending an appropriate
course going forward, including any program modifications that
may be appropriate in light of the evaluations conducted under
item (7) of subsection (f) of this Section. In this case, the
utility obligation to collect the Department's costs and turn
over those funds to the Department under this subsection (e)
shall continue only if the Commission approves the
modifications to the plan proposed by the Department.
(f) No later than November 15, 2007, each electric utility
shall file an energy efficiency and demand-response plan with
the Commission to meet the energy efficiency and
demand-response standards for 2008 through 2010. No later than
October 1, 2010, each electric utility shall file an energy
efficiency and demand-response plan with the Commission to meet
the energy efficiency and demand-response standards for 2011

HB3687 - 9 - LRB100 06860 RJF 16909 b
through 2013. Every 3 years thereafter, each electric utility
shall file, no later than September 1, an energy efficiency and
demand-response plan with the Commission. If a utility does not
file such a plan by September 1 of an applicable year, it shall
face a penalty of $100,000 per day until the plan is filed.
Each utility's plan shall set forth the utility's proposals to
meet the utility's portion of the energy efficiency standards
identified in subsection (b) and the demand-response standards
identified in subsection (c) of this Section as modified by
subsections (d) and (e), taking into account the unique
circumstances of the utility's service territory. The
Commission shall seek public comment on the utility's plan and
shall issue an order approving or disapproving each plan within
5 months after its submission. If the Commission disapproves a
plan, the Commission shall, within 30 days, describe in detail
the reasons for the disapproval and describe a path by which
the utility may file a revised draft of the plan to address the
Commission's concerns satisfactorily. If the utility does not
refile with the Commission within 60 days, the utility shall be
subject to penalties at a rate of $100,000 per day until the
plan is filed. This process shall continue, and penalties shall
accrue, until the utility has successfully filed a portfolio of
energy efficiency and demand-response measures. Penalties
shall be deposited into the Energy Efficiency Trust Fund. In
submitting proposed energy efficiency and demand-response
plans and funding levels to meet the savings goals adopted by

HB3687 - 10 - LRB100 06860 RJF 16909 b
this Act the utility shall:
(1) Demonstrate that its proposed energy efficiency
and demand-response measures will achieve the requirements
that are identified in subsections (b) and (c) of this
Section, as modified by subsections (d) and (e).
(2) Present specific proposals to implement new
building and appliance standards that have been placed into
effect.
(3) Present estimates of the total amount paid for
electric service expressed on a per kilowatthour basis
associated with the proposed portfolio of measures
designed to meet the requirements that are identified in
subsections (b) and (c) of this Section, as modified by
subsections (d) and (e).
(4) Coordinate with the Department to present a
portfolio of energy efficiency measures proportionate to
the share of total annual utility revenues in Illinois from
households at or below 150% of the poverty level. The
energy efficiency programs shall be targeted to households
with incomes at or below 80% of area median income.
(5) Demonstrate that its overall portfolio of energy
efficiency and demand-response measures, not including
programs covered by item (4) of this subsection (f), are
cost-effective using the total resource cost test and
represent a diverse cross-section of opportunities for
customers of all rate classes to participate in the

HB3687 - 11 - LRB100 06860 RJF 16909 b
programs.
(6) Include a proposed cost-recovery tariff mechanism
to fund the proposed energy efficiency and demand-response
measures and to ensure the recovery of the prudently and
reasonably incurred costs of Commission-approved programs.
(7) Provide for an annual independent evaluation of the
performance of the cost-effectiveness of the utility's
portfolio of measures and the Department's portfolio of
measures, as well as a full review of the 3-year results of
the broader net program impacts and, to the extent
practical, for adjustment of the measures on a
going-forward basis as a result of the evaluations. The
resources dedicated to evaluation shall not exceed 3% of
portfolio resources in any given year.
(g) No more than 3% of energy efficiency and
demand-response program revenue may be allocated for
demonstration of breakthrough equipment and devices.
(h) This Section does not apply to an electric utility that
on December 31, 2005 provided electric service to fewer than
100,000 customers in Illinois.
(i) If, after 2 years, an electric utility fails to meet
the efficiency standard specified in subsection (b) of this
Section, as modified by subsections (d) and (e), it shall make
a contribution to the Low-Income Home Energy Assistance
Program. The combined total liability for failure to meet the
goal shall be $1,000,000, which shall be assessed as follows: a

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

HB3687 - 13 - LRB100 06860 RJF 16909 b
a "medium electric utility" is an electric utility that, on
December 31, 2005, served 2,000,000 or fewer but more than
100,000 electric customers in Illinois; and (iii) Illinois
electric utilities that are affiliated by virtue of a common
parent company are considered a single electric utility.
(j) If, after 3 years, or any subsequent 3-year period, the
Department fails to implement the Department's share of energy
efficiency measures required by the standards in subsection
(b), then the Illinois Power Agency may assume responsibility
for and control of the Department's share of the required
energy efficiency measures. The Agency shall implement a
competitive procurement program to procure resources necessary
to meet the standards specified in this Section, with the costs
of these resources to be recovered in the same manner as
provided for the Department in this Section.
(k) No electric utility shall be deemed to have failed to
meet the energy efficiency standards to the extent any such
failure is due to a failure of the Department or the Agency.
(Source: P.A. 97-616, eff. 10-26-11; 97-841, eff. 7-20-12;
98-90, eff. 7-15-13.)
(Text of Section after amendment by P.A. 99-906)
Sec. 8-103. Energy efficiency and demand-response
measures.
(a) It is the policy of the State that electric utilities
are required to use cost-effective energy efficiency and

HB3687 - 14 - LRB100 06860 RJF 16909 b
demand-response measures to reduce delivery load. Requiring
investment in cost-effective energy efficiency and
demand-response measures will reduce direct and indirect costs
to consumers by decreasing environmental impacts and by
avoiding or delaying the need for new generation, transmission,
and distribution infrastructure. It serves the public interest
to allow electric utilities to recover costs for reasonably and
prudently incurred expenses for energy efficiency and
demand-response measures. As used in this Section,
"cost-effective" means that the measures satisfy the total
resource cost test. The low-income measures described in
subsection (f)(4) of this Section shall not be required to meet
the total resource cost test. For purposes of this Section, the
terms "energy-efficiency", "demand-response", "electric
utility", and "total resource cost test" shall have the
meanings set forth in the Illinois Power Agency Act. For
purposes of this Section, the amount per kilowatthour means the
total amount paid for electric service expressed on a per
kilowatthour basis. For purposes of this Section, the total
amount paid for electric service includes without limitation
estimated amounts paid for supply, transmission, distribution,
surcharges, and add-on-taxes.
(a-5) This Section applies to electric utilities serving
500,000 or less but more than 200,000 retail customers in this
State. Through December 31, 2017, this Section also applies to
electric utilities serving more than 500,000 retail customers

HB3687 - 15 - LRB100 06860 RJF 16909 b
in the State.
(b) Electric utilities shall implement cost-effective
energy efficiency measures to meet the following incremental
annual energy savings goals:
(1) 0.2% of energy delivered in the year commencing
June 1, 2008;
(2) 0.4% of energy delivered in the year commencing
June 1, 2009;
(3) 0.6% of energy delivered in the year commencing
June 1, 2010;
(4) 0.8% of energy delivered in the year commencing
June 1, 2011;
(5) 1% of energy delivered in the year commencing June
1, 2012;
(6) 1.4% of energy delivered in the year commencing
June 1, 2013;
(7) 1.8% of energy delivered in the year commencing
June 1, 2014; and
(8) 2% of energy delivered in the year commencing June
1, 2015 and each year thereafter.
Electric utilities may comply with this subsection (b) by
meeting the annual incremental savings goal in the applicable
year or by showing that the total cumulative annual savings
within a 3-year planning period associated with measures
implemented after May 31, 2014 was equal to the sum of each
annual incremental savings requirement from May 31, 2014

HB3687 - 16 - LRB100 06860 RJF 16909 b
through the end of the applicable year.
(c) Electric utilities shall implement cost-effective
demand-response measures to reduce peak demand by 0.1% over the
prior year for eligible retail customers, as defined in Section
16-111.5 of this Act, and for customers that elect hourly
service from the utility pursuant to Section 16-107 of this
Act, provided those customers have not been declared
competitive. This requirement commences June 1, 2008 and
continues for 10 years.
(d) Notwithstanding the requirements of subsections (b)
and (c) of this Section, an electric utility shall reduce the
amount of energy efficiency and demand-response measures
implemented over a 3-year planning period by an amount
necessary to limit the estimated average annual increase in the
amounts paid by retail customers in connection with electric
service due to the cost of those measures to:
(1) in 2008, no more than 0.5% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(2) in 2009, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2008 or 1% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(3) in 2010, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the

HB3687 - 17 - LRB100 06860 RJF 16909 b
year ending May 31, 2009 or 1.5% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007;
(4) in 2011, the greater of an additional 0.5% of the
amount paid per kilowatthour by those customers during the
year ending May 31, 2010 or 2% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007; and
(5) thereafter, the amount of energy efficiency and
demand-response measures implemented for any single year
shall be reduced by an amount necessary to limit the
estimated average net increase due to the cost of these
measures included in the amounts paid by eligible retail
customers in connection with electric service to no more
than the greater of 2.015% of the amount paid per
kilowatthour by those customers during the year ending May
31, 2007 or the incremental amount per kilowatthour paid
for these measures in 2011.
No later than June 30, 2011, the Commission shall review
the limitation on the amount of energy efficiency and
demand-response measures implemented pursuant to this Section
and report to the General Assembly its findings as to whether
that limitation unduly constrains the procurement of energy
efficiency and demand-response measures.
(e) Electric utilities shall be responsible for overseeing
the design, development, and filing of energy efficiency and

HB3687 - 18 - LRB100 06860 RJF 16909 b
demand-response plans with the Commission. Electric utilities
shall implement 100% of the demand-response measures in the
plans. Electric utilities shall implement 75% of the energy
efficiency measures approved by the Commission, and may, as
part of that implementation, outsource various aspects of
program development and implementation. The remaining 25% of
those energy efficiency measures approved by the Commission
shall be implemented by the Department of Commerce and Economic
Opportunity, and must be designed in conjunction with the
utility and the filing process. The Department may outsource
development and implementation of energy efficiency measures.
A minimum of 10% of the entire portfolio of cost-effective
energy efficiency measures shall be procured from units of
local government, municipal corporations, school districts,
and community college districts. The Department shall
coordinate the implementation of these measures.
The apportionment of the dollars to cover the costs to
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and contracts to the utility. The Department is authorized to
adopt any rules necessary and prescribe procedures in order to
ensure compliance by applicants in carrying out the purposes of
rebate agreements for energy efficiency measures implemented

HB3687 - 19 - LRB100 06860 RJF 16909 b
by the Department made under this Section.
The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency and demand-response measures that the utility
implements.
A utility providing approved energy efficiency and
demand-response measures in the State shall be permitted to
recover costs of those measures through an automatic adjustment
clause tariff filed with and approved by the Commission. The
tariff shall be established outside the context of a general
rate case. Each year the Commission shall initiate a review to
reconcile any amounts collected with the actual costs and to
determine the required adjustment to the annual tariff factor
to match annual expenditures.
Each utility shall include, in its recovery of costs, the
costs estimated for both the utility's and the Department's
implementation of energy efficiency and demand-response
measures. Costs collected by the utility for measures
implemented by the Department shall be submitted to the
Department pursuant to Section 605-323 of the Civil
Administrative Code of Illinois, shall be deposited into the
Energy Efficiency Portfolio Standards Fund, and shall be used
by the Department solely for the purpose of implementing these
measures. A utility shall not be required to advance any moneys
to the Department but only to forward such funds as it has

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

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

HB3687 - 22 - LRB100 06860 RJF 16909 b
subsections (d) and (e), taking into account the unique
circumstances of the utility's service territory. The
Commission shall seek public comment on the utility's plan and
shall issue an order approving or disapproving each plan within
5 months after its submission. If the Commission disapproves a
plan, the Commission shall, within 30 days, describe in detail
the reasons for the disapproval and describe a path by which
the utility may file a revised draft of the plan to address the
Commission's concerns satisfactorily. If the utility does not
refile with the Commission within 60 days, the utility shall be
subject to penalties at a rate of $100,000 per day until the
plan is filed. This process shall continue, and penalties shall
accrue, until the utility has successfully filed a portfolio of
energy efficiency and demand-response measures. Penalties
shall be deposited into the Energy Efficiency Trust Fund. In
submitting proposed energy efficiency and demand-response
plans and funding levels to meet the savings goals adopted by
this Act the utility shall:
(1) Demonstrate that its proposed energy efficiency
and demand-response measures will achieve the requirements
that are identified in subsections (b) and (c) of this
Section, as modified by subsections (d) and (e).
(2) Present specific proposals to implement new
building and appliance standards that have been placed into
effect.
(3) Present estimates of the total amount paid for

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

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the broader net program impacts and, to the extent
practical, for adjustment of the measures on a
going-forward basis as a result of the evaluations. The
resources dedicated to evaluation shall not exceed 3% of
portfolio resources in any given year.
(g) No more than 3% of energy efficiency and
demand-response program revenue may be allocated for
demonstration of breakthrough equipment and devices.
(g-5) The utility shall develop a program that provides
residential and small commercial customers a rebate for
customer investment in technologies which result in at least a
3% reduction in the customers' energy usage from the previous
calendar year on a weather normalized basis. The approved
methodology shall be specific to the technology used. The
program shall provide an option for the technology vendor or
alternative retail electric supplier to conduct the
verification calculation and submit rebates on behalf of the
customer. A customer may not receive recovery under more than
one utility energy efficiency program, as defined in this
Section, per technology.
(h) This Section does not apply to an electric utility that
on December 31, 2005 provided electric service to fewer than
100,000 customers in Illinois.
(i) If, after 2 years, an electric utility fails to meet
the efficiency standard specified in subsection (b) of this
Section, as modified by subsections (d) and (e), it shall make

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a contribution to the Low-Income Home Energy Assistance
Program. The combined total liability for failure to meet the
goal shall be $1,000,000, which shall be assessed as follows: a
large electric utility shall pay $665,000, and a medium
electric utility shall pay $335,000. If, after 3 years, an
electric utility fails to meet the efficiency standard
specified in subsection (b) of this Section, as modified by
subsections (d) and (e), it shall make a contribution to the
Low-Income Home Energy Assistance Program. The combined total
liability for failure to meet the goal shall be $1,000,000,
which shall be assessed as follows: a large electric utility
shall pay $665,000, and a medium electric utility shall pay
$335,000. In addition, the responsibility for implementing the
energy efficiency measures of the utility making the payment
shall be transferred to the Illinois Power Agency if, after 3
years, or in any subsequent 3-year period, the utility fails to
meet the efficiency standard specified in subsection (b) of
this Section, as modified by subsections (d) and (e). The
Agency shall implement a competitive procurement program to
procure resources necessary to meet the standards specified in
this Section as modified by subsections (d) and (e), with costs
for those resources to be recovered in the same manner as
products purchased through the procurement plan as provided in
Section 16-111.5. The Director shall implement this
requirement in connection with the procurement plan as provided
in Section 16-111.5.

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For purposes of this Section, (i) a "large electric
utility" is an electric utility that, on December 31, 2005,
served more than 2,000,000 electric customers in Illinois; (ii)
a "medium electric utility" is an electric utility that, on
December 31, 2005, served 2,000,000 or fewer but more than
100,000 electric customers in Illinois; and (iii) Illinois
electric utilities that are affiliated by virtue of a common
parent company are considered a single electric utility.
(j) If, after 3 years, or any subsequent 3-year period, the
Department fails to implement the Department's share of energy
efficiency measures required by the standards in subsection
(b), then the Illinois Power Agency may assume responsibility
for and control of the Department's share of the required
energy efficiency measures. The Agency shall implement a
competitive procurement program to procure resources necessary
to meet the standards specified in this Section, with the costs
of these resources to be recovered in the same manner as
provided for the Department in this Section.
(k) No electric utility shall be deemed to have failed to
meet the energy efficiency standards to the extent any such
failure is due to a failure of the Department or the Agency.
(l)(1) The energy efficiency and demand-response plans of
electric utilities serving more than 500,000 retail customers
in the State that were approved by the Commission on or before
the effective date of this amendatory Act of the 99th General
Assembly for the period June 1, 2014 through May 31, 2017 shall

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

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

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

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

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

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Section that serve more than 3,000,000 retail customers in the
State shall achieve the following cumulative persisting annual
savings goals, as modified by subsection (f) of this Section
and as compared to the deemed baseline of 88,000,000 MWhs of
electric power and energy sales set forth in subsection (b), as
reduced by the number of MWhs equal to the sum of the annual
consumption of customers that are exempt from subsections (a)
through (j) of this Section under subsection (l) of this
Section as averaged across the calendar years 2014, 2015, and
2016, through the implementation of energy efficiency measures
during the applicable year and in prior years, but no earlier
than January 1, 2012:
(1) 7.8% cumulative persisting annual savings for the
year ending December 31, 2018;
(2) 9.1% cumulative persisting annual savings for the
year ending December 31, 2019;
(3) 10.4% cumulative persisting annual savings for the
year ending December 31, 2020;
(4) 11.8% cumulative persisting annual savings for the
year ending December 31, 2021;
(5) 13.1% cumulative persisting annual savings for the
year ending December 31, 2022;
(6) 14.4% cumulative persisting annual savings for the
year ending December 31, 2023;
(7) 15.7% cumulative persisting annual savings for the
year ending December 31, 2024;

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

HB3687 - 34 - LRB100 06860 RJF 16909 b
Section, as averaged across the calendar years 2014, 2015, and
2016. After 2017, the deemed value of cumulative persisting
annual savings from energy efficiency measures and programs
implemented during the period beginning January 1, 2012 and
ending December 31, 2017, shall be reduced each year, as
follows, and the applicable value shall be applied to and count
toward the utility's achievement of the cumulative persisting
annual savings goals set forth in subsection (b-15):
(1) 5.8% deemed cumulative persisting annual savings
for the year ending December 31, 2018;
(2) 5.2% deemed cumulative persisting annual savings
for the year ending December 31, 2019;
(3) 4.5% deemed cumulative persisting annual savings
for the year ending December 31, 2020;
(4) 4.0% deemed cumulative persisting annual savings
for the year ending December 31, 2021;
(5) 3.5% deemed cumulative persisting annual savings
for the year ending December 31, 2022;
(6) 3.1% deemed cumulative persisting annual savings
for the year ending December 31, 2023;
(7) 2.8% deemed cumulative persisting annual savings
for the year ending December 31, 2024;
(8) 2.5% deemed cumulative persisting annual savings
for the year ending December 31, 2025;
(9) 2.3% deemed cumulative persisting annual savings
for the year ending December 31, 2026;

HB3687 - 35 - LRB100 06860 RJF 16909 b
(10) 2.1% deemed cumulative persisting annual savings
for the year ending December 31, 2027;
(11) 1.8% deemed cumulative persisting annual savings
for the year ending December 31, 2028;
(12) 1.7% deemed cumulative persisting annual savings
for the year ending December 31, 2029; and
(13) 1.5% deemed cumulative persisting annual savings
for the year ending December 31, 2030.
(b-15) Beginning in 2018, electric utilities subject to
this Section that serve less than 3,000,000 retail customers
but more than 500,000 retail customers in the State shall
achieve the following cumulative persisting annual savings
goals, as modified by subsection (b-20) and subsection (f) of
this Section and as compared to the deemed baseline as reduced
by the number of MWhs equal to the sum of the annual
consumption of customers that are exempt from subsections (a)
through (j) of this Section under subsection (l) of this
Section as averaged across the calendar years 2014, 2015, and
2016, through the implementation of energy efficiency measures
during the applicable year and in prior years, but no earlier
than January 1, 2012:
(1) 7.4% cumulative persisting annual savings for the
year ending December 31, 2018;
(2) 8.2% cumulative persisting annual savings for the
year ending December 31, 2019;
(3) 9.0% cumulative persisting annual savings for the

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year ending December 31, 2020;
(4) 9.8% cumulative persisting annual savings for the
year ending December 31, 2021;
(5) 10.6% cumulative persisting annual savings for the
year ending December 31, 2022;
(6) 11.4% cumulative persisting annual savings for the
year ending December 31, 2023;
(7) 12.2% cumulative persisting annual savings for the
year ending December 31, 2024;
(8) 13% cumulative persisting annual savings for the
year ending December 31, 2025;
(9) 13.6% cumulative persisting annual savings for the
year ending December 31, 2026;
(10) 14.2% cumulative persisting annual savings for
the year ending December 31, 2027;
(11) 14.8% cumulative persisting annual savings for
the year ending December 31, 2028;
(12) 15.4% cumulative persisting annual savings for
the year ending December 31, 2029; and
(13) 16% cumulative persisting annual savings for the
year ending December 31, 2030.
The difference between the cumulative persisting annual
savings goal for the applicable calendar year and the
cumulative persisting annual savings goal for the immediately
preceding calendar year is 0.8% for the period of January 1,
2018 through December 31, 2025 and 0.6% for the period of

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January 1, 2026 through December 31, 2030.
(b-20) Each electric utility subject to this Section may
include cost-effective voltage optimization measures in its
plans submitted under subsections (f) and (g) of this Section,
and the costs incurred by a utility to implement the measures
under a Commission-approved plan shall be recovered under the
provisions of Article IX or Section 16-108.5 of this Act. For
purposes of this Section, the measure life of voltage
optimization measures shall be 15 years. The measure life
period is independent of the depreciation rate of the voltage
optimization assets deployed.
Within 270 days after the effective date of this amendatory
Act of the 99th General Assembly, an electric utility that
serves less than 3,000,000 retail customers but more than
500,000 retail customers in the State shall file a plan with
the Commission that identifies the cost-effective voltage
optimization investment the electric utility plans to
undertake through December 31, 2024. The Commission, after
notice and hearing, shall approve or approve with modification
the plan within 120 days after the plan's filing and, in the
order approving or approving with modification the plan, the
Commission shall adjust the applicable cumulative persisting
annual savings goals set forth in subsection (b-15) to reflect
any amount of cost-effective energy savings approved by the
Commission that is greater than or less than the following
cumulative persisting annual savings values attributable to

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

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

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customers in the State, of the utility's entire portfolio
funding level for a given year shall be used to procure
cost-effective energy efficiency measures from units of local
government, municipal corporations, school districts, public
housing, and community college districts, provided that a
minimum percentage of available funds shall be used to procure
energy efficiency from public housing, which percentage shall
be equal to public housing's share of public building energy
consumption.
The utilities shall also implement energy efficiency
measures targeted at low-income households, which, for
purposes of this Section, shall be defined as households at or
below 80% of area median income, and expenditures to implement
the measures shall be no less than $25,000,000 per year for
electric utilities that serve more than 3,000,000 retail
customers in the State and no less than $8,350,000 per year for
electric utilities that serve less than 3,000,000 retail
customers but more than 500,000 retail customers in the State.
Each electric utility shall assess opportunities to
implement cost-effective energy efficiency measures and
programs through a public housing authority or authorities
located in its service territory. If such opportunities are
identified, the utility shall propose such measures and
programs to address the opportunities. Expenditures to address
such opportunities shall be credited toward the minimum
procurement and expenditure requirements set forth in this

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subsection (c).
Implementation of energy efficiency measures and programs
targeted at low-income households should be contracted, when it
is practicable, to independent third parties that have
demonstrated capabilities to serve such households, with a
preference for not-for-profit entities and government agencies
that have existing relationships with or experience serving
low-income communities in the State.
Each electric utility shall develop and implement
reporting procedures that address and assist in determining the
amount of energy savings that can be applied to the low-income
procurement and expenditure requirements set forth in this
subsection (c).
The electric utilities shall also convene a low-income
energy efficiency advisory committee to assist in the design
and evaluation of the low-income energy efficiency programs.
The committee shall be comprised of the electric utilities
subject to the requirements of this Section, the gas utilities
subject to the requirements of Section 8-104 of this Act, the
utilities' low-income energy efficiency implementation
contractors, and representatives of community-based
organizations.
(d) Notwithstanding any other provision of law to the
contrary, a utility providing approved energy efficiency
measures and, if applicable, demand-response measures in the
State shall be permitted to recover all reasonable and

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

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with transparent information that reflects the utility's
actual costs to be recovered during the applicable rate
year, which is the period beginning with the first billing
day of January and extending through the last billing day
of the following December. The energy efficiency formula
rate shall be implemented through a tariff filed with the
Commission under subsections (f) and (g) of this Section
that is consistent with the provisions of this paragraph
(2) and that shall be applicable to all delivery services
customers. The Commission shall conduct an investigation
of the tariff in a manner consistent with the provisions of
this paragraph (2), subsections (f) and (g) of this
Section, and the provisions of Article IX of this Act to
the extent they do not conflict with this paragraph (2).
The energy efficiency formula rate approved by the
Commission shall remain in effect at the discretion of the
utility and shall do the following:
(A) Provide for the recovery of the utility's
actual costs incurred under this Section that are
prudently incurred and reasonable in amount consistent
with Commission practice and law. The sole fact that a
cost differs from that incurred in a prior calendar
year or that an investment is different from that made
in a prior calendar year shall not imply the imprudence
or unreasonableness of that cost or investment.
(B) Reflect the utility's actual year-end capital

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

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

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16-108.5 of this Act;
(iii) recovery of existing regulatory assets
over the periods previously authorized by the
Commission;
(iv) as described in subsection (e),
amortization of costs incurred under this Section;
and
(v) projected, weather normalized billing
determinants for the applicable rate year.
(E) Provide for an annual reconciliation, as
described in paragraph (3) of this subsection (d), less
any deferred taxes related to the reconciliation, with
interest at an annual rate of return equal to the
utility's weighted average cost of capital, including
a revenue conversion factor calculated to recover or
refund all additional income taxes that may be payable
or receivable as a result of that return, of the energy
efficiency revenue requirement reflected in rates for
each calendar year, beginning with the calendar year in
which the utility files its energy efficiency formula
rate tariff under this paragraph (2), with what the
revenue requirement would have been had the actual cost
information for the applicable calendar year been
available at the filing date.
The utility shall file, together with its tariff, the
projected costs to be incurred by the utility during the

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rate year under the utility's multi-year plan approved
under subsections (f) and (g) of this Section, including,
but not limited to, the projected capital investment costs
and projected regulatory asset balances with
correspondingly updated depreciation and amortization
reserves and expense, that shall populate the energy
efficiency formula rate and set the initial rates under the
formula.
The Commission shall review the proposed tariff in
conjunction with its review of a proposed multi-year plan,
as specified in paragraph (5) of subsection (g) of this
Section. The review shall be based on the same evidentiary
standards, including, but not limited to, those concerning
the prudence and reasonableness of the costs incurred by
the utility, the Commission applies in a hearing to review
a filing for a general increase in rates under Article IX
of this Act. The initial rates shall take effect beginning
with the January monthly billing period following the
Commission's approval.
The tariff's rate design and cost allocation across
customer classes shall be consistent with the utility's
automatic adjustment clause tariff in effect on the
effective date of this amendatory Act of the 99th General
Assembly; however, the Commission may revise the tariff's
rate design and cost allocation in subsequent proceedings
under paragraph (3) of this subsection (d).

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If the energy efficiency formula rate is terminated,
the then current rates shall remain in effect until such
time as the energy efficiency costs are incorporated into
new rates that are set under this subsection (d) or Article
IX of this Act, subject to retroactive rate adjustment,
with interest, to reconcile rates charged with actual
costs.
(3) The provisions of this paragraph (3) shall only
apply to an electric utility that has elected to file an
energy efficiency formula rate under paragraph (2) of this
subsection (d). Subsequent to the Commission's issuance of
an order approving the utility's energy efficiency formula
rate structure and protocols, and initial rates under
paragraph (2) of this subsection (d), the utility shall
file, on or before June 1 of each year, with the Chief
Clerk of the Commission its updated cost inputs to the
energy efficiency formula rate for the applicable rate year
and the corresponding new charges, as well as the
information described in paragraph (9) of subsection (g) of
this Section. Each such filing shall conform to the
following requirements and include the following
information:
(A) The inputs to the energy efficiency formula
rate for the applicable rate year shall be based on the
projected costs to be incurred by the utility during
the rate year under the utility's multi-year plan

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approved under subsections (f) and (g) of this Section,
including, but not limited to, projected capital
investment costs and projected regulatory asset
balances with correspondingly updated depreciation and
amortization reserves and expense. The filing shall
also include a reconciliation of the energy efficiency
revenue requirement that was in effect for the prior
rate year (as set by the cost inputs for the prior rate
year) with the actual revenue requirement for the prior
rate year (determined using a year-end rate base) that
uses amounts reflected in the applicable FERC Form 1
that reports the actual costs for the prior rate year.
Any over-collection or under-collection indicated by
such reconciliation shall be reflected as a credit
against, or recovered as an additional charge to,
respectively, with interest calculated at a rate equal
to the utility's weighted average cost of capital
approved by the Commission for the prior rate year, the
charges for the applicable rate year. Such
over-collection or under-collection shall be adjusted
to remove any deferred taxes related to the
reconciliation, for purposes of calculating interest
at an annual rate of return equal to the utility's
weighted average cost of capital approved by the
Commission for the prior rate year, including a revenue
conversion factor calculated to recover or refund all

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

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1, 2011. Nothing in this Section is intended to allow
costs that are not otherwise recoverable to be
recoverable by virtue of inclusion in FERC Form 1.
(B) The new charges shall take effect beginning on
the first billing day of the following January billing
period and remain in effect through the last billing
day of the next December billing period regardless of
whether the Commission enters upon a hearing under this
paragraph (3).
(C) The filing shall include relevant and
necessary data and documentation for the applicable
rate year. Normalization adjustments shall not be
required.
Within 45 days after the utility files its annual
update of cost inputs to the energy efficiency formula
rate, the Commission shall with reasonable notice,
initiate a proceeding concerning whether the projected
costs to be incurred by the utility and recovered during
the applicable rate year, and that are reflected in the
inputs to the energy efficiency formula rate, are
consistent with the utility's approved multi-year plan
under subsections (f) and (g) of this Section and whether
the costs incurred by the utility during the prior rate
year were prudent and reasonable. The Commission shall also
have the authority to investigate the information and data
described in paragraph (9) of subsection (g) of this

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

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

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

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

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

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

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

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

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

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third-party energy efficiency programs in an amount
that is no less than $25,000,000 per year, and electric
utilities that serve less than 3,000,000 retail
customers but more than 500,000 retail customers in the
State shall fund third-party energy efficiency
programs in an amount that is no less than $8,350,000
per year;
(B) during 2018, the utility shall conduct a
solicitation process for purposes of requesting
proposals from third-party vendors for those
third-party energy efficiency programs to be offered
during one or more of the years commencing January 1,
2019, January 1, 2020, and January 1, 2021; for those
multi-year plans commencing on January 1, 2022 and
January 1, 2026, the utility shall conduct a
solicitation process during 2021 and 2025,
respectively, for purposes of requesting proposals
from third-party vendors for those third-party energy
efficiency programs to be offered during one or more
years of the respective multi-year plan period; for
each solicitation process, the utility shall identify
the sector, technology, or geographical area for which
it is seeking requests for proposals;
(C) the utility shall propose the bidder
qualifications, performance measurement process, and
contract structure, which must include a performance

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

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

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the utility failed to achieve the goal.
(ii) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is more than the applicable
annual incremental goal, then the return on equity
component shall be increased by a maximum of 200
basis points in the event that the utility achieved
at least 125% of such goal. If the utility achieved
more than 100% of the applicable annual
incremental goal but less than 125% of such goal,
then the return on equity component shall be
increased by 8 basis points for each percent by
which the utility achieved above the goal. If the
applicable annual incremental goal was reduced
under paragraphs (1) or (2) of subsection (f) of
this Section, then the following adjustments shall
be made to the calculations described in this item
(ii):
(aa) the calculation for determining
achievement that is at least 125% of the
applicable annual incremental goal shall use
the unreduced applicable annual incremental
goal to set the value; and
(bb) the calculation for determining
achievement that is less than 125% but more
than 100% of the applicable annual incremental

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goal shall use the reduced applicable annual
incremental goal to set the value for 100%
achievement of the goal and shall use the
unreduced goal to set the value for 125%
achievement. The 8 basis point value shall also
be modified, as necessary, so that the 200
basis points are evenly apportioned among each
percentage point value between 100% and 125%
achievement.
(B) For the period January 1, 2026 through December
31, 2030, provide for an adjustment to the return on
equity component of the utility's weighted average
cost of capital calculated under subsection (d) of this
Section:
(i) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is less than the applicable
annual incremental goal, then the return on equity
component shall be reduced by a maximum of 200
basis points in the event that the utility achieved
no more than 66% of such goal. If the utility
achieved more than 66% of the applicable annual
incremental goal but less than 100% of such goal,
then the return on equity component shall be
reduced by 6 basis points for each percent by which
the utility failed to achieve the goal.

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(ii) If the independent evaluator determines
that the utility achieved a cumulative persisting
annual savings that is more than the applicable
annual incremental goal, then the return on equity
component shall be increased by a maximum of 200
basis points in the event that the utility achieved
at least 134% of such goal. If the utility achieved
more than 100% of the applicable annual
incremental goal but less than 134% of such goal,
then the return on equity component shall be
increased by 6 basis points for each percent by
which the utility achieved above the goal. If the
applicable annual incremental goal was reduced
under paragraph (3) of subsection (f) of this
Section, then the following adjustments shall be
made to the calculations described in this item
(ii):
(aa) the calculation for determining
achievement that is at least 134% of the
applicable annual incremental goal shall use
the unreduced applicable annual incremental
goal to set the value; and
(bb) the calculation for determining
achievement that is less than 134% but more
than 100% of the applicable annual incremental
goal shall use the reduced applicable annual

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

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

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

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(i) The calculation for determining
achievement that is at least 125% or 134%, as
applicable, of the applicable annual incremental
goal shall use the unreduced applicable annual
incremental goal to set the value.
(ii) For the period through December 31, 2025,
the calculation for determining achievement that
is less than 125% but more than 100% of the
applicable annual incremental goal shall use the
reduced applicable annual incremental goal to set
the value for 100% achievement of the goal and
shall use the unreduced goal to set the value for
125% achievement. The 8 basis point value shall
also be modified, as necessary, so that the 200
basis points are evenly apportioned among each
percentage point value between 100% and 125%
achievement.
(iii) For the period of January 1, 2026 through
December 31, 2030, the calculation for determining
achievement that is less than 134% but more than
100% of the applicable annual incremental goal
shall use the reduced applicable annual
incremental goal to set the value for 100%
achievement of the goal and shall use the unreduced
goal to set the value for 125% achievement. The 6
basis point value shall also be modified, as

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

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

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

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

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

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

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

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measures satisfy the total resource cost test which, for
purposes of this Section, means a standard that is met if, for
an investment in energy efficiency, the benefit-cost ratio is
greater than one. The benefit-cost ratio is the ratio of the
net present value of the total benefits of the measures to the
net present value of the total costs as calculated over the
lifetime of the measures. The total resource cost test compares
the sum of avoided natural gas utility costs, representing the
benefits that accrue to the system and the participant in the
delivery of those efficiency measures, as well as other
quantifiable societal benefits, including avoided electric
utility costs, to the sum of all incremental costs of end use
measures (including both utility and participant
contributions), plus costs to administer, deliver, and
evaluate each demand-side measure, to quantify the net savings
obtained by substituting demand-side measures for supply
resources. In calculating avoided costs, reasonable estimates
shall be included for financial costs likely to be imposed by
future regulation of emissions of greenhouse gases. The
low-income programs described in item (4) of subsection (f) of
this Section shall not be required to meet the total resource
cost test.
(c) Natural gas utilities shall implement cost-effective
energy efficiency measures to meet at least the following
natural gas savings requirements, which shall be based upon the
total amount of gas delivered to retail customers, other than

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

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(d) Notwithstanding the requirements of subsection (c) of
this Section, a natural gas utility shall limit the amount of
energy efficiency implemented in any 3-year reporting period
established by subsection (f) of Section 8-104 of this Act, by
an amount necessary to limit the estimated average increase in
the amounts paid by retail customers in connection with natural
gas service to no more than 2% in the applicable 3-year
reporting period. The energy savings requirements in
subsection (c) of this Section may be reduced by the Commission
for the subject plan, if the utility demonstrates by
substantial evidence that it is highly unlikely that the
requirements could be achieved without exceeding the
applicable spending limits in any 3-year reporting period. No
later than September 1, 2013, the Commission shall review the
limitation on the amount of energy efficiency measures
implemented pursuant to this Section and report to the General
Assembly, in the report required by subsection (k) of this
Section, its findings as to whether that limitation unduly
constrains the procurement of energy efficiency measures.
(e) Natural gas utilities shall be responsible for
overseeing the design, development, and filing of their
efficiency plans with the Commission. The utility shall utilize
75% of the available funding associated with energy efficiency
programs approved by the Commission, and may outsource various
aspects of program development and implementation. The
remaining 25% of available funding shall be used by the

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Department of Commerce and Economic Opportunity to implement
energy efficiency measures that achieve no less than 20% of the
requirements of subsection (c) of this Section. Such measures
shall be designed in conjunction with the utility and approved
by the Commission. The Department may outsource development and
implementation of energy efficiency measures. A minimum of 10%
of the entire portfolio of cost-effective energy efficiency
measures shall be procured from local government, municipal
corporations, school districts, and community college
districts. Five percent of the entire portfolio of
cost-effective energy efficiency measures may be granted to
local government and municipal corporations for market
transformation initiatives. The Department shall coordinate
the implementation of these measures and shall integrate
delivery of natural gas efficiency programs with electric
efficiency programs delivered pursuant to Section 8-103 of this
Act, unless the Department can show that integration is not
feasible.
The apportionment of the dollars to cover the costs to
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and contracts to the utility. The Department is authorized to
adopt any rules necessary and prescribe procedures in order to

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ensure compliance by applicants in carrying out the purposes of
rebate agreements for energy efficiency measures implemented
by the Department made under this Section.
The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency measures that the utility implements.
A utility providing approved energy efficiency measures in
this State shall be permitted to recover costs of those
measures through an automatic adjustment clause tariff filed
with and approved by the Commission. The tariff shall be
established outside the context of a general rate case and
shall be applicable to the utility's customers other than the
customers described in subsection (m) of this Section. Each
year the Commission shall initiate a review to reconcile any
amounts collected with the actual costs and to determine the
required adjustment to the annual tariff factor to match annual
expenditures.
Each utility shall include, in its recovery of costs, the
costs estimated for both the utility's and the Department's
implementation of energy efficiency measures. Costs collected
by the utility for measures implemented by the Department shall
be submitted to the Department pursuant to Section 605-323 of
the Civil Administrative Code of Illinois, shall be deposited
into the Energy Efficiency Portfolio Standards Fund, and shall
be used by the Department solely for the purpose of

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implementing these measures. A utility shall not be required to
advance any moneys to the Department but only to forward such
funds as it has collected. The Department shall report to the
Commission on an annual basis regarding the costs actually
incurred by the Department in the implementation of the
measures. Any changes to the costs of energy efficiency
measures as a result of plan modifications shall be
appropriately reflected in amounts recovered by the utility and
turned over to the Department.
The portfolio of measures, administered by both the
utilities and the Department, shall, in combination, be
designed to achieve the annual energy savings requirements set
forth in subsection (c) of this Section, as modified by
subsection (d) of this Section.
The utility and the Department shall agree upon a
reasonable portfolio of measures and determine the measurable
corresponding percentage of the savings goals associated with
measures implemented by the Department.
No utility shall be assessed a penalty under subsection (f)
of this Section for failure to make a timely filing if that
failure is the result of a lack of agreement with the
Department with respect to the allocation of responsibilities
or related costs or target assignments. In that case, the
Department and the utility shall file their respective plans
with the Commission and the Commission shall determine an
appropriate division of measures and programs that meets the

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

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

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

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

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(1) a large gas utility shall pay $600,000;
(2) a medium gas utility shall pay $400,000; and
(3) a small gas utility shall pay $200,000.
For purposes of this Section, (i) a "large gas utility" is
a gas utility that on December 31, 2008, served more than
1,500,000 gas customers in Illinois; (ii) a "medium gas
utility" is a gas utility that on December 31, 2008, served
fewer than 1,500,000, but more than 500,000 gas customers in
Illinois; and (iii) a "small gas utility" is a gas utility that
on December 31, 2008, served fewer than 500,000 and more than
100,000 gas customers in Illinois. The costs of this
contribution may not be recovered from ratepayers.
If a gas utility fails to meet the efficiency standard
specified in subsection (c) of this Section, as modified by
subsection (d) of this Section, in any 2 consecutive 3-year
planning periods, then the responsibility for implementing the
utility's energy efficiency measures shall be transferred to an
independent program administrator selected by the Commission.
Reasonable and prudent costs incurred by the independent
program administrator to meet the efficiency standard
specified in subsection (c) of this Section, as modified by
subsection (d) of this Section, may be recovered from the
customers of the affected gas utilities, other than customers
described in subsection (m) of this Section. The utility shall
provide the independent program administrator with all
information and assistance necessary to perform the program

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administrator's duties including but not limited to customer,
account, and energy usage data, and shall allow the program
administrator to include inserts in customer bills. The utility
may recover reasonable costs associated with any such
assistance.
(j) No utility shall be deemed to have failed to meet the
energy efficiency standards to the extent any such failure is
due to a failure of the Department.
(k) Not later than January 1, 2012, the Commission shall
develop and solicit public comment on a plan to foster
statewide coordination and consistency between statutorily
mandated natural gas and electric energy efficiency programs to
reduce program or participant costs or to improve program
performance. Not later than September 1, 2013, the Commission
shall issue a report to the General Assembly containing its
findings and recommendations.
(l) This Section does not apply to a gas utility that on
January 1, 2009, provided gas service to fewer than 100,000
customers in Illinois.
(m) Subsections (a) through (k) of this Section do not
apply to customers of a natural gas utility that have a North
American Industry Classification System code number that is
22111 or any such code number beginning with the digits 31, 32,
or 33 and (i) annual usage in the aggregate of 4 million therms
or more within the service territory of the affected gas
utility or with aggregate usage of 8 million therms or more in

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this State and complying with the provisions of item (l) of
this subsection (m); or (ii) using natural gas as feedstock and
meeting the usage requirements described in item (i) of this
subsection (m), to the extent such annual feedstock usage is
greater than 60% of the customer's total annual usage of
natural gas.
(1) Customers described in this subsection (m) of this
Section shall apply, on a form approved on or before
October 1, 2009 by the Department, to the Department to be
designated as a self-directing customer ("SDC") or as an
exempt customer using natural gas as a feedstock from which
other products are made, including, but not limited to,
feedstock for a hydrogen plant, on or before the 1st day of
February, 2010. Thereafter, application may be made not
less than 6 months before the filing date of the gas
utility energy efficiency plan described in subsection (f)
of this Section; however, a new customer that commences
taking service from a natural gas utility after February 1,
2010 may apply to become a SDC or exempt customer up to 30
days after beginning service. Customers described in this
subsection (m) that have not already been approved by the
Department may apply to be designated a self-directing
customer or exempt customer, on a form approved by the
Department, between September 1, 2013 and September 30,
2013. Customer applications that are approved by the
Department under this amendatory Act of the 98th General

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

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of the customer's cost of natural gas, composed of the
customer's commodity cost and the delivery service
charges paid to the gas utility, or $150,000, whichever
is less;
(D) in the case of a SDC, the customer's
certification that the required reserve account
balance will be capped at 3 years' worth of accruals
and that the customer may, at its option, make further
deposits to the account to the extent such deposit
would increase the reserve account balance above the
designated cap level;
(E) in the case of a SDC, the customer's
certification that by October 1 of each year, beginning
no sooner than October 1, 2012, the customer will
report to the Department information, for the 12-month
period ending May 31 of the same year, on all deposits
and reductions, if any, to the reserve account during
the reporting year, and to the extent deposits to the
reserve account in any year are in an amount less than
$150,000, the basis for such reduced deposits; reserve
account balances by month; a description of energy
efficiency measures undertaken by the customer and
paid for in whole or in part with funds from the
reserve account; an estimate of the energy saved, or to
be saved, by the measure; and that the report shall
include a verification by an officer or plant manager

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of the customer or by a registered professional
engineer or certified energy efficiency trade
professional that the funds withdrawn from the reserve
account were used for the energy efficiency measures;
(F) in the case of an exempt customer, the
customer's certification of the level of gas usage as
feedstock in the customer's operation in a typical year
and that it will provide information establishing this
level, upon request of the Department;
(G) in the case of either an exempt customer or a
SDC, the customer's certification that it has provided
the gas utility or utilities serving the customer with
a copy of the application as filed with the Department;
(H) in the case of either an exempt customer or a
SDC, certification of the natural gas utility or
utilities serving the customer in Illinois including
the natural gas utility accounts that are the subject
of the application; and
(I) in the case of either an exempt customer or a
SDC, a verification signed by a plant manager or an
authorized corporate officer attesting to the
truthfulness and accuracy of the information contained
in the application.
(2) The Department shall review the application to
determine that it contains the information described in
provisions (A) through (I) of item (1) of this subsection

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

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

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

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

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

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

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granted to local government and municipal corporations for
market transformation initiatives. The Department shall
coordinate the implementation of these measures and shall
integrate delivery of natural gas efficiency programs with
electric efficiency programs delivered pursuant to Section
8-103 of this Act, unless the Department can show that
integration is not feasible.
The apportionment of the dollars to cover the costs to
implement the Department's share of the portfolio of energy
efficiency measures shall be made to the Department once the
Department has executed rebate agreements, grants, or
contracts for energy efficiency measures and provided
supporting documentation for those rebate agreements, grants,
and contracts to the utility. The Department is authorized to
adopt any rules necessary and prescribe procedures in order to
ensure compliance by applicants in carrying out the purposes of
rebate agreements for energy efficiency measures implemented
by the Department made under this Section.
The details of the measures implemented by the Department
shall be submitted by the Department to the Commission in
connection with the utility's filing regarding the energy
efficiency measures that the utility implements.
The portfolio of measures, administered by both the
utilities and the Department, shall, in combination, be
designed to achieve the annual energy savings requirements set
forth in subsection (c) of this Section, as modified by

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subsection (d) of this Section.
The utility and the Department shall agree upon a
reasonable portfolio of measures and determine the measurable
corresponding percentage of the savings goals associated with
measures implemented by the Department.
No utility shall be assessed a penalty under subsection (f)
of this Section for failure to make a timely filing if that
failure is the result of a lack of agreement with the
Department with respect to the allocation of responsibilities
or related costs or target assignments. In that case, the
Department and the utility shall file their respective plans
with the Commission and the Commission shall determine an
appropriate division of measures and programs that meets the
requirements of this Section.
(e-5) The provisions of this subsection (e-5) shall be
applicable to those multi-year plans that commence after
December 31, 2017. Natural gas utilities shall be responsible
for overseeing the design, development, and filing of their
efficiency plans with the Commission and may outsource
development and implementation of energy efficiency measures.
A minimum of 10% of the entire portfolio of cost-effective
energy efficiency measures shall be procured from local
government, municipal corporations, school districts, and
community college districts. Five percent of the entire
portfolio of cost-effective energy efficiency measures may be
granted to local government and municipal corporations for

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

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the purpose of implementing these measures. A utility shall not
be required to advance any moneys to the Department but only to
forward such funds as it has collected. The Department shall
report to the Commission on an annual basis regarding the costs
actually incurred by the Department in the implementation of
the measures. Any changes to the costs of energy efficiency
measures as a result of plan modifications shall be
appropriately reflected in amounts recovered by the utility and
turned over to the Department.
(f) No later than October 1, 2010, each gas utility shall
file an energy efficiency plan with the Commission to meet the
energy efficiency standards through May 31, 2014. No later than
October 1, 2013, each gas utility shall file an energy
efficiency plan with the Commission to meet the energy
efficiency standards through May 31, 2017. Beginning in 2017
and every 4 years thereafter, each utility shall file an energy
efficiency plan with the Commission to meet the energy
efficiency standards for the next applicable 4-year period
beginning January 1 of the year following the filing. For those
multi-year plans commencing on January 1, 2018, each utility
shall file its proposed energy efficiency plan no later than 30
days after the effective date of this amendatory Act of the
99th General Assembly or May 1, 2017, whichever is later.
Beginning in 2021 and every 4 years thereafter, each utility
shall file its energy efficiency plan no later than March 1. If
a utility does not file such a plan on or before the applicable

HB3687 - 104 - LRB100 06860 RJF 16909 b
filing deadline for the plan, then it shall face a penalty of
$100,000 per day until the plan is filed.
Each utility's plan shall set forth the utility's proposals
to meet the utility's portion of the energy efficiency
standards identified in subsection (c) of this Section, as
modified by subsection (d) of this Section, taking into account
the unique circumstances of the utility's service territory.
For those plans commencing after December 31, 2021, the
Commission shall seek public comment on the utility's plan and
shall issue an order approving or disapproving each plan within
6 months after its submission. For those plans commencing on
January 1, 2018, the Commission shall seek public comment on
the utility's plan and shall issue an order approving or
disapproving each plan no later than August 31, 2017, or 105
days after the effective date of this amendatory Act of the
99th General Assembly, whichever is later. If the Commission
disapproves a plan, the Commission shall, within 30 days,
describe in detail the reasons for the disapproval and describe
a path by which the utility may file a revised draft of the
plan to address the Commission's concerns satisfactorily. If
the utility does not refile with the Commission within 60 days
after the disapproval, the utility shall be subject to
penalties at a rate of $100,000 per day until the plan is
filed. This process shall continue, and penalties shall accrue,
until the utility has successfully filed a portfolio of energy
efficiency measures. Penalties shall be deposited into the

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

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

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

HB3687 - 108 - LRB100 06860 RJF 16909 b
as modified by subsection (d), then it shall make a
contribution to the Low-Income Home Energy Assistance Program.
The total liability for failure to meet the goal shall be
assessed as follows:
(1) a large gas utility shall pay $600,000;
(2) a medium gas utility shall pay $400,000; and
(3) a small gas utility shall pay $200,000.
For purposes of this Section, (i) a "large gas utility" is
a gas utility that on December 31, 2008, served more than
1,500,000 gas customers in Illinois; (ii) a "medium gas
utility" is a gas utility that on December 31, 2008, served
fewer than 1,500,000, but more than 500,000 gas customers in
Illinois; and (iii) a "small gas utility" is a gas utility that
on December 31, 2008, served fewer than 500,000 and more than
100,000 gas customers in Illinois. The costs of this
contribution may not be recovered from ratepayers.
If a gas utility fails to meet the efficiency standard
specified in subsection (c) of this Section, as modified by
subsection (d) of this Section, in any 2 consecutive multi-year
planning periods, then the responsibility for implementing the
utility's energy efficiency measures shall be transferred to an
independent program administrator selected by the Commission.
Reasonable and prudent costs incurred by the independent
program administrator to meet the efficiency standard
specified in subsection (c) of this Section, as modified by
subsection (d) of this Section, may be recovered from the

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

HB3687 - 110 - LRB100 06860 RJF 16909 b
22111 or any such code number beginning with the digits 31, 32,
or 33 and (i) annual usage in the aggregate of 4 million therms
or more within the service territory of the affected gas
utility or with aggregate usage of 8 million therms or more in
this State and complying with the provisions of item (l) of
this subsection (m); or (ii) using natural gas as feedstock and
meeting the usage requirements described in item (i) of this
subsection (m), to the extent such annual feedstock usage is
greater than 60% of the customer's total annual usage of
natural gas.
(1) Customers described in this subsection (m) of this
Section shall apply, on a form approved on or before
October 1, 2009 by the Department, to the Department to be
designated as a self-directing customer ("SDC") or as an
exempt customer using natural gas as a feedstock from which
other products are made, including, but not limited to,
feedstock for a hydrogen plant, on or before the 1st day of
February, 2010. Thereafter, application may be made not
less than 6 months before the filing date of the gas
utility energy efficiency plan described in subsection (f)
of this Section; however, a new customer that commences
taking service from a natural gas utility after February 1,
2010 may apply to become a SDC or exempt customer up to 30
days after beginning service. Customers described in this
subsection (m) that have not already been approved by the
Department may apply to be designated a self-directing

HB3687 - 111 - LRB100 06860 RJF 16909 b
customer or exempt customer, on a form approved by the
Department, between September 1, 2013 and September 30,
2013. Customer applications that are approved by the
Department under this amendatory Act of the 98th General
Assembly shall be considered to be a self-directing
customer or exempt customer, as applicable, for the current
3-year planning period effective December 1, 2013. Such
application shall contain the following:
(A) the customer's certification that, at the time
of its application, it qualifies to be a SDC or exempt
customer described in this subsection (m) of this
Section;
(B) in the case of a SDC, the customer's
certification that it has established or will
establish by the beginning of the utility's multi-year
planning period commencing subsequent to the
application, and will maintain for accounting
purposes, an energy efficiency reserve account and
that the customer will accrue funds in said account to
be held for the purpose of funding, in whole or in
part, energy efficiency measures of the customer's
choosing, which may include, but are not limited to,
projects involving combined heat and power systems
that use the same energy source both for the generation
of electrical or mechanical power and the production of
steam or another form of useful thermal energy or the

HB3687 - 112 - LRB100 06860 RJF 16909 b
use of combustible gas produced from biomass, or both;
(C) in the case of a SDC, the customer's
certification that annual funding levels for the
energy efficiency reserve account will be equal to 2%
of the customer's cost of natural gas, composed of the
customer's commodity cost and the delivery service
charges paid to the gas utility, or $150,000, whichever
is less;
(D) in the case of a SDC, the customer's
certification that the required reserve account
balance will be capped at 3 years' worth of accruals
and that the customer may, at its option, make further
deposits to the account to the extent such deposit
would increase the reserve account balance above the
designated cap level;
(E) in the case of a SDC, the customer's
certification that by October 1 of each year, beginning
no sooner than October 1, 2012, the customer will
report to the Department information, for the 12-month
period ending May 31 of the same year, on all deposits
and reductions, if any, to the reserve account during
the reporting year, and to the extent deposits to the
reserve account in any year are in an amount less than
$150,000, the basis for such reduced deposits; reserve
account balances by month; a description of energy
efficiency measures undertaken by the customer and

HB3687 - 113 - LRB100 06860 RJF 16909 b
paid for in whole or in part with funds from the
reserve account; an estimate of the energy saved, or to
be saved, by the measure; and that the report shall
include a verification by an officer or plant manager
of the customer or by a registered professional
engineer or certified energy efficiency trade
professional that the funds withdrawn from the reserve
account were used for the energy efficiency measures;
(F) in the case of an exempt customer, the
customer's certification of the level of gas usage as
feedstock in the customer's operation in a typical year
and that it will provide information establishing this
level, upon request of the Department;
(G) in the case of either an exempt customer or a
SDC, the customer's certification that it has provided
the gas utility or utilities serving the customer with
a copy of the application as filed with the Department;
(H) in the case of either an exempt customer or a
SDC, certification of the natural gas utility or
utilities serving the customer in Illinois including
the natural gas utility accounts that are the subject
of the application; and
(I) in the case of either an exempt customer or a
SDC, a verification signed by a plant manager or an
authorized corporate officer attesting to the
truthfulness and accuracy of the information contained

HB3687 - 114 - LRB100 06860 RJF 16909 b
in the application.
(2) The Department shall review the application to
determine that it contains the information described in
provisions (A) through (I) of item (1) of this subsection
(m), as applicable. The review shall be completed within 30
days after the date the application is filed with the
Department. Absent a determination by the Department
within the 30-day period, the applicant shall be considered
to be a SDC or exempt customer, as applicable, for all
subsequent multi-year planning periods, as of the date of
filing the application described in this subsection (m). If
the Department determines that the application does not
contain the applicable information described in provisions
(A) through (I) of item (1) of this subsection (m), it
shall notify the customer, in writing, of its determination
that the application does not contain the required
information and identify the information that is missing,
and the customer shall provide the missing information
within 15 working days after the date of receipt of the
Department's notification.
(3) The Department shall have the right to audit the
information provided in the customer's application and
annual reports to ensure continued compliance with the
requirements of this subsection. Based on the audit, if the
Department determines the customer is no longer in
compliance with the requirements of items (A) through (I)

HB3687 - 115 - LRB100 06860 RJF 16909 b
of item (1) of this subsection (m), as applicable, the
Department shall notify the customer in writing of the
noncompliance. The customer shall have 30 days to establish
its compliance, and failing to do so, may have its status
as a SDC or exempt customer revoked by the Department. The
Department shall treat all information provided by any
customer seeking SDC status or exemption from the
provisions of this Section as strictly confidential.
(4) Upon request, or on its own motion, the Commission
may open an investigation, no more than once every 3 years
and not before October 1, 2014, to evaluate the
effectiveness of the self-directing program described in
this subsection (m).
Customers described in this subsection (m) that applied to
the Department on January 3, 2013, were approved by the
Department on February 13, 2013 to be a self-directing customer
or exempt customer, and receive natural gas from a utility that
provides gas service to at least 500,000 retail customers in
Illinois and electric service to at least 1,000,000 retail
customers in Illinois shall be considered to be a
self-directing customer or exempt customer, as applicable, for
the current 3-year planning period effective December 1, 2013.
(n) The applicability of this Section to customers
described in subsection (m) of this Section is conditioned on
the existence of the SDC program. In no event will any
provision of this Section apply to such customers after January

HB3687 - 116 - LRB100 06860 RJF 16909 b
1, 2020.
(o) Utilities' 3-year energy efficiency plans approved by
the Commission on or before the effective date of this
amendatory Act of the 99th General Assembly for the period June
1, 2014 through May 31, 2017 shall continue to be in force and
effect through December 31, 2017 so that the energy efficiency
programs set forth in those plans continue to be offered during
the period June 1, 2017 through December 31, 2017. Each utility
is authorized to increase, on a pro rata basis, the energy
savings goals and budgets approved in its plan to reflect the
additional 7 months of the plan's operation.
(Source: P.A. 98-90, eff. 7-15-13; 98-225, eff. 8-9-13; 98-604,
eff. 12-17-13; 99-906, eff. 6-1-17.)
Section 95. No acceleration or delay. Where this Act makes
changes in a statute that is represented in this Act by text
that is not yet or no longer in effect (for example, a Section
represented by multiple versions), the use of that text does
not accelerate or delay the taking effect of (i) the changes
made by this Act or (ii) provisions derived from any other
Public Act.
Section 99. Effective date. This Act takes effect upon
becoming law or on the date that the provisions of Public Act
99-906 amending Sections 8-103, 8-103B, and 8-104 of the Public
Utilities Act take effect, whichever is later.