Bill Text: IL HB5539 | 2015-2016 | 99th General Assembly | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Amends the Illinois Power Agency Act. Makes establishment of the Resource Development Bureau discretionary, and makes related changes. Moves language providing that each year the Illinois Power Agency shall prepare a public report for the General Assembly and the Illinois Commerce Commission that shall include certain criteria associated with the procurement of renewable energy resources from under a provision concerning the renewable portfolio standard to a provision concerning Agency annual reports within the Act. In a provision concerning Agency annual reports: provides that the Agency shall report annually each February 15 (currently December 15) on the operations and transactions of the Agency; removes a provision regarding reporting the quantity, price, and rate of all renewable resources purchased under the electricity procurement plans for electric utilities; and provides that average quantity (rather than total quantity) be used for certain reporting criteria. Makes other changes. Effective immediately.

Spectrum: Slight Partisan Bill (Republican 18-10)

Status: (Failed) 2016-11-17 - Total Veto Stands - No Positive Action Taken [HB5539 Detail]

Download: Illinois-2015-HB5539-Engrossed.html

---

HB5539 Engrossed LRB099 19598 EGJ 43993 b
AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Power Agency Act is amended by
changing Sections 1-70, 1-75, 1-80, and 1-125 as follows:
(20 ILCS 3855/1-70)
Sec. 1-70. Agency officials.
(a) The Agency shall have a Director who meets the
qualifications specified in Section 5-222 of the Civil
Administrative Code of Illinois (20 ILCS 5/5-222).
(b) Within the Illinois Power Agency, the Agency shall
establish a Planning and Procurement Bureau and may establish a
Resource Development Bureau. Each Bureau shall report to the
Director.
(c) The Chief of the Planning and Procurement Bureau shall
be appointed by the Director, at the Director's sole
discretion, and (i) shall have at least 5 years of direct
experience in electricity supply planning and procurement and
(ii) shall also hold an advanced degree in risk management,
law, business, or a related field.
(d) The Chief of the Resource Development Bureau may shall
be appointed by the Director and (i) shall have at least 5
years of direct experience in electric generating project

HB5539 Engrossed - 2 - LRB099 19598 EGJ 43993 b
development and (ii) shall also hold an advanced degree in
economics, engineering, law, business, or a related field.
(e) The Director shall receive an annual salary of $100,000
or as set by the Compensation Review Board, whichever is
higher. The Bureau Chiefs shall each receive an annual salary
of $85,000 or as set by the Compensation Review Board,
whichever is higher.
(f) The Director and Bureau Chiefs shall not, for 2 years
prior to appointment or for 2 years after he or she leaves his
or her position, be employed by an electric utility,
independent power producer, power marketer, or alternative
retail electric supplier regulated by the Commission or the
Federal Energy Regulatory Commission.
(g) The Director and Bureau Chiefs are prohibited from: (i)
owning, directly or indirectly, 5% or more of the voting
capital stock of an electric utility, independent power
producer, power marketer, or alternative retail electric
supplier; (ii) being in any chain of successive ownership of 5%
or more of the voting capital stock of any electric utility,
independent power producer, power marketer, or alternative
retail electric supplier; (iii) receiving any form of
compensation, fee, payment, or other consideration from an
electric utility, independent power producer, power marketer,
or alternative retail electric supplier, including legal fees,
consulting fees, bonuses, or other sums. These limitations do
not apply to any compensation received pursuant to a defined

HB5539 Engrossed - 3 - LRB099 19598 EGJ 43993 b
benefit plan or other form of deferred compensation, provided
that the individual has otherwise severed all ties to the
utility, power producer, power marketer, or alternative retail
electric supplier.
(Source: P.A. 97-618, eff. 10-26-11.)
(20 ILCS 3855/1-75)
Sec. 1-75. Planning and Procurement Bureau. The Planning
and Procurement Bureau has the following duties and
responsibilities:
(a) The Planning and Procurement Bureau shall each year,
beginning in 2008, develop procurement plans and conduct
competitive procurement processes in accordance with the
requirements of Section 16-111.5 of the Public Utilities Act
for the eligible retail customers of electric utilities that on
December 31, 2005 provided electric service to at least 100,000
customers in Illinois. The Planning and Procurement Bureau
shall also develop procurement plans and conduct competitive
procurement processes in accordance with the requirements of
Section 16-111.5 of the Public Utilities Act for the eligible
retail customers of small multi-jurisdictional electric
utilities that (i) on December 31, 2005 served less than
100,000 customers in Illinois and (ii) request a procurement
plan for their Illinois jurisdictional load. This Section shall
not apply to a small multi-jurisdictional utility until such
time as a small multi-jurisdictional utility requests the

HB5539 Engrossed - 4 - LRB099 19598 EGJ 43993 b
Agency to prepare a procurement plan for their Illinois
jurisdictional load. For the purposes of this Section, the term
"eligible retail customers" has the same definition as found in
Section 16-111.5(a) of the Public Utilities Act.
(1) The Agency shall each year, beginning in 2008, as
needed, issue a request for qualifications for experts or
expert consulting firms to develop the procurement plans in
accordance with Section 16-111.5 of the Public Utilities
Act. In order to qualify an expert or expert consulting
firm must have:
(A) direct previous experience assembling
large-scale power supply plans or portfolios for
end-use customers;
(B) an advanced degree in economics, mathematics,
engineering, risk management, or a related area of
study;
(C) 10 years of experience in the electricity
sector, including managing supply risk;
(D) expertise in wholesale electricity market
rules, including those established by the Federal
Energy Regulatory Commission and regional transmission
organizations;
(E) expertise in credit protocols and familiarity
with contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and

HB5539 Engrossed - 5 - LRB099 19598 EGJ 43993 b
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the affected electric utilities.
(2) The Agency shall each year, as needed, issue a
request for qualifications for a procurement administrator
to conduct the competitive procurement processes in
accordance with Section 16-111.5 of the Public Utilities
Act. In order to qualify an expert or expert consulting
firm must have:
(A) direct previous experience administering a
large-scale competitive procurement process;
(B) an advanced degree in economics, mathematics,
engineering, or a related area of study;
(C) 10 years of experience in the electricity
sector, including risk management experience;
(D) expertise in wholesale electricity market
rules, including those established by the Federal
Energy Regulatory Commission and regional transmission
organizations;
(E) expertise in credit and contract protocols;
(F) adequate resources to perform and fulfill the
required functions and responsibilities; and
(G) the absence of a conflict of interest and
inappropriate bias for or against potential bidders or
the affected electric utilities.
(3) The Agency shall provide affected utilities and

HB5539 Engrossed - 6 - LRB099 19598 EGJ 43993 b
other interested parties with the lists of qualified
experts or expert consulting firms identified through the
request for qualifications processes that are under
consideration to develop the procurement plans and to serve
as the procurement administrator. The Agency shall also
provide each qualified expert's or expert consulting
firm's response to the request for qualifications. All
information provided under this subparagraph shall also be
provided to the Commission. The Agency may provide by rule
for fees associated with supplying the information to
utilities and other interested parties. These parties
shall, within 5 business days, notify the Agency in writing
if they object to any experts or expert consulting firms on
the lists. Objections shall be based on:
(A) failure to satisfy qualification criteria;
(B) identification of a conflict of interest; or
(C) evidence of inappropriate bias for or against
potential bidders or the affected utilities.
The Agency shall remove experts or expert consulting
firms from the lists within 10 days if there is a
reasonable basis for an objection and provide the updated
lists to the affected utilities and other interested
parties. If the Agency fails to remove an expert or expert
consulting firm from a list, an objecting party may seek
review by the Commission within 5 days thereafter by filing
a petition, and the Commission shall render a ruling on the

HB5539 Engrossed - 7 - LRB099 19598 EGJ 43993 b
petition within 10 days. There is no right of appeal of the
Commission's ruling.
(4) The Agency shall issue requests for proposals to
the qualified experts or expert consulting firms to develop
a procurement plan for the affected utilities and to serve
as procurement administrator.
(5) The Agency shall select an expert or expert
consulting firm to develop procurement plans based on the
proposals submitted and shall award contracts of up to 5
years to those selected.
(6) The Agency shall select an expert or expert
consulting firm, with approval of the Commission, to serve
as procurement administrator based on the proposals
submitted. If the Commission rejects, within 5 days, the
Agency's selection, the Agency shall submit another
recommendation within 3 days based on the proposals
submitted. The Agency shall award a 5-year contract to the
expert or expert consulting firm so selected with
Commission approval.
(b) The experts or expert consulting firms retained by the
Agency shall, as appropriate, prepare procurement plans, and
conduct a competitive procurement process as prescribed in
Section 16-111.5 of the Public Utilities Act, to ensure
adequate, reliable, affordable, efficient, and environmentally
sustainable electric service at the lowest total cost over
time, taking into account any benefits of price stability, for

HB5539 Engrossed - 8 - LRB099 19598 EGJ 43993 b
eligible retail customers of electric utilities that on
December 31, 2005 provided electric service to at least 100,000
customers in the State of Illinois, and for eligible Illinois
retail customers of small multi-jurisdictional electric
utilities that (i) on December 31, 2005 served less than
100,000 customers in Illinois and (ii) request a procurement
plan for their Illinois jurisdictional load.
(c) Renewable portfolio standard.
(1) The procurement plans shall include cost-effective
renewable energy resources. A minimum percentage of each
utility's total supply to serve the load of eligible retail
customers, as defined in Section 16-111.5(a) of the Public
Utilities Act, procured for each of the following years
shall be generated from cost-effective renewable energy
resources: at least 2% by June 1, 2008; at least 4% by June
1, 2009; at least 5% by June 1, 2010; at least 6% by June 1,
2011; at least 7% by June 1, 2012; at least 8% by June 1,
2013; at least 9% by June 1, 2014; at least 10% by June 1,
2015; and increasing by at least 1.5% each year thereafter
to at least 25% by June 1, 2025. To the extent that it is
available, at least 75% of the renewable energy resources
used to meet these standards shall come from wind
generation and, beginning on June 1, 2011, at least the
following percentages of the renewable energy resources
used to meet these standards shall come from photovoltaics
on the following schedule: 0.5% by June 1, 2012, 1.5% by

HB5539 Engrossed - 9 - LRB099 19598 EGJ 43993 b
June 1, 2013; 3% by June 1, 2014; and 6% by June 1, 2015 and
thereafter. Of the renewable energy resources procured
pursuant to this Section, at least the following
percentages shall come from distributed renewable energy
generation devices: 0.5% by June 1, 2013, 0.75% by June 1,
2014, and 1% by June 1, 2015 and thereafter. To the extent
available, half of the renewable energy resources procured
from distributed renewable energy generation shall come
from devices of less than 25 kilowatts in nameplate
capacity. Renewable energy resources procured from
distributed generation devices may also count towards the
required percentages for wind and solar photovoltaics.
Procurement of renewable energy resources from distributed
renewable energy generation devices shall be done on an
annual basis through multi-year contracts of no less than 5
years, and shall consist solely of renewable energy
credits.
The Agency shall create credit requirements for
suppliers of distributed renewable energy. In order to
minimize the administrative burden on contracting
entities, the Agency shall solicit the use of third-party
organizations to aggregate distributed renewable energy
into groups of no less than one megawatt in installed
capacity. These third-party organizations shall administer
contracts with individual distributed renewable energy
generation device owners. An individual distributed

HB5539 Engrossed - 10 - LRB099 19598 EGJ 43993 b
renewable energy generation device owner shall have the
ability to measure the output of his or her distributed
renewable energy generation device.
For purposes of this subsection (c), "cost-effective"
means that the costs of procuring renewable energy
resources do not cause the limit stated in paragraph (2) of
this subsection (c) to be exceeded and do not exceed
benchmarks based on market prices for renewable energy
resources in the region, which shall be developed by the
procurement administrator, in consultation with the
Commission staff, Agency staff, and the procurement
monitor and shall be subject to Commission review and
approval.
(2) For purposes of this subsection (c), the required
procurement of cost-effective renewable energy resources
for a particular year shall be measured as a percentage of
the actual amount of electricity (megawatt-hours) supplied
by the electric utility to eligible retail customers in the
planning year ending immediately prior to the procurement.
For purposes of this subsection (c), the amount paid per
kilowatthour means the total amount paid for electric
service expressed on a per kilowatthour basis. For purposes
of this subsection (c), the total amount paid for electric
service includes without limitation amounts paid for
supply, transmission, distribution, surcharges, and add-on
taxes.

HB5539 Engrossed - 11 - LRB099 19598 EGJ 43993 b
Notwithstanding the requirements of this subsection
(c), the total of renewable energy resources procured
pursuant to the procurement plan for any single year shall
be reduced by an amount necessary to limit the annual
estimated average net increase due to the costs of these
resources included in the amounts paid by eligible retail
customers in connection with electric service to:
(A) in 2008, no more than 0.5% of the amount paid
per kilowatthour by those customers during the year
ending May 31, 2007;
(B) in 2009, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2008 or 1% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2007;
(C) in 2010, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2009 or 1.5% of the
amount paid per kilowatthour by those customers during
the year ending May 31, 2007;
(D) in 2011, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2010 or 2% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2007; and
(E) thereafter, the amount of renewable energy

HB5539 Engrossed - 12 - LRB099 19598 EGJ 43993 b
resources procured pursuant to the procurement plan
for any single year shall be reduced by an amount
necessary to limit the estimated average net increase
due to the cost of these resources included in the
amounts paid by eligible retail customers in
connection with electric service to no more than the
greater of 2.015% of the amount paid per kilowatthour
by those customers during the year ending May 31, 2007
or the incremental amount per kilowatthour paid for
these resources in 2011.
No later than June 30, 2011, the Commission shall
review the limitation on the amount of renewable energy
resources procured pursuant to this subsection (c) and
report to the General Assembly its findings as to
whether that limitation unduly constrains the
procurement of cost-effective renewable energy
resources.
(3) Through June 1, 2011, renewable energy resources
shall be counted for the purpose of meeting the renewable
energy standards set forth in paragraph (1) of this
subsection (c) only if they are generated from facilities
located in the State, provided that cost-effective
renewable energy resources are available from those
facilities. If those cost-effective resources are not
available in Illinois, they shall be procured in states
that adjoin Illinois and may be counted towards compliance.

HB5539 Engrossed - 13 - LRB099 19598 EGJ 43993 b
If those cost-effective resources are not available in
Illinois or in states that adjoin Illinois, they shall be
purchased elsewhere and shall be counted towards
compliance. After June 1, 2011, cost-effective renewable
energy resources located in Illinois and in states that
adjoin Illinois may be counted towards compliance with the
standards set forth in paragraph (1) of this subsection
(c). If those cost-effective resources are not available in
Illinois or in states that adjoin Illinois, they shall be
purchased elsewhere and shall be counted towards
compliance.
(4) The electric utility shall retire all renewable
energy credits used to comply with the standard.
(5) Beginning with the year commencing June 1, 2010, an
electric utility subject to this subsection (c) shall apply
the lesser of the maximum alternative compliance payment
rate or the most recent estimated alternative compliance
payment rate for its service territory for the
corresponding compliance period, established pursuant to
subsection (d) of Section 16-115D of the Public Utilities
Act to its retail customers that take service pursuant to
the electric utility's hourly pricing tariff or tariffs.
The electric utility shall retain all amounts collected as
a result of the application of the alternative compliance
payment rate or rates to such customers, and, beginning in
2011, the utility shall include in the information provided

HB5539 Engrossed - 14 - LRB099 19598 EGJ 43993 b
under item (1) of subsection (d) of Section 16-111.5 of the
Public Utilities Act the amounts collected under the
alternative compliance payment rate or rates for the prior
year ending May 31. Notwithstanding any limitation on the
procurement of renewable energy resources imposed by item
(2) of this subsection (c), the Agency shall increase its
spending on the purchase of renewable energy resources to
be procured by the electric utility for the next plan year
by an amount equal to the amounts collected by the utility
under the alternative compliance payment rate or rates in
the prior year ending May 31. Beginning April 1, 2012, and
each year thereafter, the Agency shall prepare a public
report for the General Assembly and Illinois Commerce
Commission that shall include, but not necessarily be
limited to:
(A) a comparison of the costs associated with the
Agency's procurement of renewable energy resources to
(1) the Agency's costs associated with electricity
generated by other types of generation facilities and
(2) the benefits associated with the Agency's
procurement of renewable energy resources; and
(B) an analysis of the rate impacts associated with
the Illinois Power Agency's procurement of renewable
resources, including, but not limited to, any
long-term contracts, on the eligible retail customers
of electric utilities.

HB5539 Engrossed - 15 - LRB099 19598 EGJ 43993 b
The analysis shall include the Agency's estimate of the
total dollar impact that the Agency's procurement of
renewable resources has had on the annual electricity bills
of the customer classes that comprise each eligible retail
customer class taking service from an electric utility. The
Agency's report shall also analyze how the operation of the
alternative compliance payment mechanism, any long-term
contracts, or other aspects of the applicable renewable
portfolio standards impacts the rates of customers of
alternative retail electric suppliers.
(d) Clean coal portfolio standard.
(1) The procurement plans shall include electricity
generated using clean coal. Each utility shall enter into
one or more sourcing agreements with the initial clean coal
facility, as provided in paragraph (3) of this subsection
(d), covering electricity generated by the initial clean
coal facility representing at least 5% of each utility's
total supply to serve the load of eligible retail customers
in 2015 and each year thereafter, as described in paragraph
(3) of this subsection (d), subject to the limits specified
in paragraph (2) of this subsection (d). It is the goal of
the State that by January 1, 2025, 25% of the electricity
used in the State shall be generated by cost-effective
clean coal facilities. For purposes of this subsection (d),
"cost-effective" means that the expenditures pursuant to
such sourcing agreements do not cause the limit stated in

HB5539 Engrossed - 16 - LRB099 19598 EGJ 43993 b
paragraph (2) of this subsection (d) to be exceeded and do
not exceed cost-based benchmarks, which shall be developed
to assess all expenditures pursuant to such sourcing
agreements covering electricity generated by clean coal
facilities, other than the initial clean coal facility, by
the procurement administrator, in consultation with the
Commission staff, Agency staff, and the procurement
monitor and shall be subject to Commission review and
approval.
A utility party to a sourcing agreement shall
immediately retire any emission credits that it receives in
connection with the electricity covered by such agreement.
Utilities shall maintain adequate records documenting
the purchases under the sourcing agreement to comply with
this subsection (d) and shall file an accounting with the
load forecast that must be filed with the Agency by July 15
of each year, in accordance with subsection (d) of Section
16-111.5 of the Public Utilities Act.
A utility shall be deemed to have complied with the
clean coal portfolio standard specified in this subsection
(d) if the utility enters into a sourcing agreement as
required by this subsection (d).
(2) For purposes of this subsection (d), the required
execution of sourcing agreements with the initial clean
coal facility for a particular year shall be measured as a
percentage of the actual amount of electricity

HB5539 Engrossed - 17 - LRB099 19598 EGJ 43993 b
(megawatt-hours) supplied by the electric utility to
eligible retail customers in the planning year ending
immediately prior to the agreement's execution. For
purposes of this subsection (d), the amount paid per
kilowatthour means the total amount paid for electric
service expressed on a per kilowatthour basis. For purposes
of this subsection (d), the total amount paid for electric
service includes without limitation amounts paid for
supply, transmission, distribution, surcharges and add-on
taxes.
Notwithstanding the requirements of this subsection
(d), the total amount paid under sourcing agreements with
clean coal facilities pursuant to the procurement plan for
any given year shall be reduced by an amount necessary to
limit the annual estimated average net increase due to the
costs of these resources included in the amounts paid by
eligible retail customers in connection with electric
service to:
(A) in 2010, no more than 0.5% of the amount paid
per kilowatthour by those customers during the year
ending May 31, 2009;
(B) in 2011, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2010 or 1% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009;

HB5539 Engrossed - 18 - LRB099 19598 EGJ 43993 b
(C) in 2012, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2011 or 1.5% of the
amount paid per kilowatthour by those customers during
the year ending May 31, 2009;
(D) in 2013, the greater of an additional 0.5% of
the amount paid per kilowatthour by those customers
during the year ending May 31, 2012 or 2% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009; and
(E) thereafter, the total amount paid under
sourcing agreements with clean coal facilities
pursuant to the procurement plan for any single year
shall be reduced by an amount necessary to limit the
estimated average net increase due to the cost of these
resources included in the amounts paid by eligible
retail customers in connection with electric service
to no more than the greater of (i) 2.015% of the amount
paid per kilowatthour by those customers during the
year ending May 31, 2009 or (ii) the incremental amount
per kilowatthour paid for these resources in 2013.
These requirements may be altered only as provided by
statute.
No later than June 30, 2015, the Commission shall
review the limitation on the total amount paid under
sourcing agreements, if any, with clean coal facilities

HB5539 Engrossed - 19 - LRB099 19598 EGJ 43993 b
pursuant to this subsection (d) and report to the General
Assembly its findings as to whether that limitation unduly
constrains the amount of electricity generated by
cost-effective clean coal facilities that is covered by
sourcing agreements.
(3) Initial clean coal facility. In order to promote
development of clean coal facilities in Illinois, each
electric utility subject to this Section shall execute a
sourcing agreement to source electricity from a proposed
clean coal facility in Illinois (the "initial clean coal
facility") that will have a nameplate capacity of at least
500 MW when commercial operation commences, that has a
final Clean Air Act permit on the effective date of this
amendatory Act of the 95th General Assembly, and that will
meet the definition of clean coal facility in Section 1-10
of this Act when commercial operation commences. The
sourcing agreements with this initial clean coal facility
shall be subject to both approval of the initial clean coal
facility by the General Assembly and satisfaction of the
requirements of paragraph (4) of this subsection (d) and
shall be executed within 90 days after any such approval by
the General Assembly. The Agency and the Commission shall
have authority to inspect all books and records associated
with the initial clean coal facility during the term of
such a sourcing agreement. A utility's sourcing agreement
for electricity produced by the initial clean coal facility

HB5539 Engrossed - 20 - LRB099 19598 EGJ 43993 b
shall include:
(A) a formula contractual price (the "contract
price") approved pursuant to paragraph (4) of this
subsection (d), which shall:
(i) be determined using a cost of service
methodology employing either a level or deferred
capital recovery component, based on a capital
structure consisting of 45% equity and 55% debt,
and a return on equity as may be approved by the
Federal Energy Regulatory Commission, which in any
case may not exceed the lower of 11.5% or the rate
of return approved by the General Assembly
pursuant to paragraph (4) of this subsection (d);
and
(ii) provide that all miscellaneous net
revenue, including but not limited to net revenue
from the sale of emission allowances, if any,
substitute natural gas, if any, grants or other
support provided by the State of Illinois or the
United States Government, firm transmission
rights, if any, by-products produced by the
facility, energy or capacity derived from the
facility and not covered by a sourcing agreement
pursuant to paragraph (3) of this subsection (d) or
item (5) of subsection (d) of Section 16-115 of the
Public Utilities Act, whether generated from the

HB5539 Engrossed - 21 - LRB099 19598 EGJ 43993 b
synthesis gas derived from coal, from SNG, or from
natural gas, shall be credited against the revenue
requirement for this initial clean coal facility;
(B) power purchase provisions, which shall:
(i) provide that the utility party to such
sourcing agreement shall pay the contract price
for electricity delivered under such sourcing
agreement;
(ii) require delivery of electricity to the
regional transmission organization market of the
utility that is party to such sourcing agreement;
(iii) require the utility party to such
sourcing agreement to buy from the initial clean
coal facility in each hour an amount of energy
equal to all clean coal energy made available from
the initial clean coal facility during such hour
times a fraction, the numerator of which is such
utility's retail market sales of electricity
(expressed in kilowatthours sold) in the State
during the prior calendar month and the
denominator of which is the total retail market
sales of electricity (expressed in kilowatthours
sold) in the State by utilities during such prior
month and the sales of electricity (expressed in
kilowatthours sold) in the State by alternative
retail electric suppliers during such prior month

HB5539 Engrossed - 22 - LRB099 19598 EGJ 43993 b
that are subject to the requirements of this
subsection (d) and paragraph (5) of subsection (d)
of Section 16-115 of the Public Utilities Act,
provided that the amount purchased by the utility
in any year will be limited by paragraph (2) of
this subsection (d); and
(iv) be considered pre-existing contracts in
such utility's procurement plans for eligible
retail customers;
(C) contract for differences provisions, which
shall:
(i) require the utility party to such sourcing
agreement to contract with the initial clean coal
facility in each hour with respect to an amount of
energy equal to all clean coal energy made
available from the initial clean coal facility
during such hour times a fraction, the numerator of
which is such utility's retail market sales of
electricity (expressed in kilowatthours sold) in
the utility's service territory in the State
during the prior calendar month and the
denominator of which is the total retail market
sales of electricity (expressed in kilowatthours
sold) in the State by utilities during such prior
month and the sales of electricity (expressed in
kilowatthours sold) in the State by alternative

HB5539 Engrossed - 23 - LRB099 19598 EGJ 43993 b
retail electric suppliers during such prior month
that are subject to the requirements of this
subsection (d) and paragraph (5) of subsection (d)
of Section 16-115 of the Public Utilities Act,
provided that the amount paid by the utility in any
year will be limited by paragraph (2) of this
subsection (d);
(ii) provide that the utility's payment
obligation in respect of the quantity of
electricity determined pursuant to the preceding
clause (i) shall be limited to an amount equal to
(1) the difference between the contract price
determined pursuant to subparagraph (A) of
paragraph (3) of this subsection (d) and the
day-ahead price for electricity delivered to the
regional transmission organization market of the
utility that is party to such sourcing agreement
(or any successor delivery point at which such
utility's supply obligations are financially
settled on an hourly basis) (the "reference
price") on the day preceding the day on which the
electricity is delivered to the initial clean coal
facility busbar, multiplied by (2) the quantity of
electricity determined pursuant to the preceding
clause (i); and
(iii) not require the utility to take physical

HB5539 Engrossed - 24 - LRB099 19598 EGJ 43993 b
delivery of the electricity produced by the
facility;
(D) general provisions, which shall:
(i) specify a term of no more than 30 years,
commencing on the commercial operation date of the
facility;
(ii) provide that utilities shall maintain
adequate records documenting purchases under the
sourcing agreements entered into to comply with
this subsection (d) and shall file an accounting
with the load forecast that must be filed with the
Agency by July 15 of each year, in accordance with
subsection (d) of Section 16-111.5 of the Public
Utilities Act;
(iii) provide that all costs associated with
the initial clean coal facility will be
periodically reported to the Federal Energy
Regulatory Commission and to purchasers in
accordance with applicable laws governing
cost-based wholesale power contracts;
(iv) permit the Illinois Power Agency to
assume ownership of the initial clean coal
facility, without monetary consideration and
otherwise on reasonable terms acceptable to the
Agency, if the Agency so requests no less than 3
years prior to the end of the stated contract term;

HB5539 Engrossed - 25 - LRB099 19598 EGJ 43993 b
(v) require the owner of the initial clean coal
facility to provide documentation to the
Commission each year, starting in the facility's
first year of commercial operation, accurately
reporting the quantity of carbon emissions from
the facility that have been captured and
sequestered and report any quantities of carbon
released from the site or sites at which carbon
emissions were sequestered in prior years, based
on continuous monitoring of such sites. If, in any
year after the first year of commercial operation,
the owner of the facility fails to demonstrate that
the initial clean coal facility captured and
sequestered at least 50% of the total carbon
emissions that the facility would otherwise emit
or that sequestration of emissions from prior
years has failed, resulting in the release of
carbon dioxide into the atmosphere, the owner of
the facility must offset excess emissions. Any
such carbon offsets must be permanent, additional,
verifiable, real, located within the State of
Illinois, and legally and practicably enforceable.
The cost of such offsets for the facility that are
not recoverable shall not exceed $15 million in any
given year. No costs of any such purchases of
carbon offsets may be recovered from a utility or

HB5539 Engrossed - 26 - LRB099 19598 EGJ 43993 b
its customers. All carbon offsets purchased for
this purpose and any carbon emission credits
associated with sequestration of carbon from the
facility must be permanently retired. The initial
clean coal facility shall not forfeit its
designation as a clean coal facility if the
facility fails to fully comply with the applicable
carbon sequestration requirements in any given
year, provided the requisite offsets are
purchased. However, the Attorney General, on
behalf of the People of the State of Illinois, may
specifically enforce the facility's sequestration
requirement and the other terms of this contract
provision. Compliance with the sequestration
requirements and offset purchase requirements
specified in paragraph (3) of this subsection (d)
shall be reviewed annually by an independent
expert retained by the owner of the initial clean
coal facility, with the advance written approval
of the Attorney General. The Commission may, in the
course of the review specified in item (vii),
reduce the allowable return on equity for the
facility if the facility wilfully fails to comply
with the carbon capture and sequestration
requirements set forth in this item (v);
(vi) include limits on, and accordingly

HB5539 Engrossed - 27 - LRB099 19598 EGJ 43993 b
provide for modification of, the amount the
utility is required to source under the sourcing
agreement consistent with paragraph (2) of this
subsection (d);
(vii) require Commission review: (1) to
determine the justness, reasonableness, and
prudence of the inputs to the formula referenced in
subparagraphs (A)(i) through (A)(iii) of paragraph
(3) of this subsection (d), prior to an adjustment
in those inputs including, without limitation, the
capital structure and return on equity, fuel
costs, and other operations and maintenance costs
and (2) to approve the costs to be passed through
to customers under the sourcing agreement by which
the utility satisfies its statutory obligations.
Commission review shall occur no less than every 3
years, regardless of whether any adjustments have
been proposed, and shall be completed within 9
months;
(viii) limit the utility's obligation to such
amount as the utility is allowed to recover through
tariffs filed with the Commission, provided that
neither the clean coal facility nor the utility
waives any right to assert federal pre-emption or
any other argument in response to a purported
disallowance of recovery costs;

HB5539 Engrossed - 28 - LRB099 19598 EGJ 43993 b
(ix) limit the utility's or alternative retail
electric supplier's obligation to incur any
liability until such time as the facility is in
commercial operation and generating power and
energy and such power and energy is being delivered
to the facility busbar;
(x) provide that the owner or owners of the
initial clean coal facility, which is the
counterparty to such sourcing agreement, shall
have the right from time to time to elect whether
the obligations of the utility party thereto shall
be governed by the power purchase provisions or the
contract for differences provisions;
(xi) append documentation showing that the
formula rate and contract, insofar as they relate
to the power purchase provisions, have been
approved by the Federal Energy Regulatory
Commission pursuant to Section 205 of the Federal
Power Act;
(xii) provide that any changes to the terms of
the contract, insofar as such changes relate to the
power purchase provisions, are subject to review
under the public interest standard applied by the
Federal Energy Regulatory Commission pursuant to
Sections 205 and 206 of the Federal Power Act; and
(xiii) conform with customary lender

HB5539 Engrossed - 29 - LRB099 19598 EGJ 43993 b
requirements in power purchase agreements used as
the basis for financing non-utility generators.
(4) Effective date of sourcing agreements with the
initial clean coal facility.
Any proposed sourcing agreement with the initial clean
coal facility shall not become effective unless the
following reports are prepared and submitted and
authorizations and approvals obtained:
(i) Facility cost report. The owner of the initial
clean coal facility shall submit to the Commission, the
Agency, and the General Assembly a front-end
engineering and design study, a facility cost report,
method of financing (including but not limited to
structure and associated costs), and an operating and
maintenance cost quote for the facility (collectively
"facility cost report"), which shall be prepared in
accordance with the requirements of this paragraph (4)
of subsection (d) of this Section, and shall provide
the Commission and the Agency access to the work
papers, relied upon documents, and any other backup
documentation related to the facility cost report.
(ii) Commission report. Within 6 months following
receipt of the facility cost report, the Commission, in
consultation with the Agency, shall submit a report to
the General Assembly setting forth its analysis of the
facility cost report. Such report shall include, but

HB5539 Engrossed - 30 - LRB099 19598 EGJ 43993 b
not be limited to, a comparison of the costs associated
with electricity generated by the initial clean coal
facility to the costs associated with electricity
generated by other types of generation facilities, an
analysis of the rate impacts on residential and small
business customers over the life of the sourcing
agreements, and an analysis of the likelihood that the
initial clean coal facility will commence commercial
operation by and be delivering power to the facility's
busbar by 2016. To assist in the preparation of its
report, the Commission, in consultation with the
Agency, may hire one or more experts or consultants,
the costs of which shall be paid for by the owner of
the initial clean coal facility. The Commission and
Agency may begin the process of selecting such experts
or consultants prior to receipt of the facility cost
report.
(iii) General Assembly approval. The proposed
sourcing agreements shall not take effect unless,
based on the facility cost report and the Commission's
report, the General Assembly enacts authorizing
legislation approving (A) the projected price, stated
in cents per kilowatthour, to be charged for
electricity generated by the initial clean coal
facility, (B) the projected impact on residential and
small business customers' bills over the life of the

HB5539 Engrossed - 31 - LRB099 19598 EGJ 43993 b
sourcing agreements, and (C) the maximum allowable
return on equity for the project; and
(iv) Commission review. If the General Assembly
enacts authorizing legislation pursuant to
subparagraph (iii) approving a sourcing agreement, the
Commission shall, within 90 days of such enactment,
complete a review of such sourcing agreement. During
such time period, the Commission shall implement any
directive of the General Assembly, resolve any
disputes between the parties to the sourcing agreement
concerning the terms of such agreement, approve the
form of such agreement, and issue an order finding that
the sourcing agreement is prudent and reasonable.
The facility cost report shall be prepared as follows:
(A) The facility cost report shall be prepared by
duly licensed engineering and construction firms
detailing the estimated capital costs payable to one or
more contractors or suppliers for the engineering,
procurement and construction of the components
comprising the initial clean coal facility and the
estimated costs of operation and maintenance of the
facility. The facility cost report shall include:
(i) an estimate of the capital cost of the core
plant based on one or more front end engineering
and design studies for the gasification island and
related facilities. The core plant shall include

HB5539 Engrossed - 32 - LRB099 19598 EGJ 43993 b
all civil, structural, mechanical, electrical,
control, and safety systems.
(ii) an estimate of the capital cost of the
balance of the plant, including any capital costs
associated with sequestration of carbon dioxide
emissions and all interconnects and interfaces
required to operate the facility, such as
transmission of electricity, construction or
backfeed power supply, pipelines to transport
substitute natural gas or carbon dioxide, potable
water supply, natural gas supply, water supply,
water discharge, landfill, access roads, and coal
delivery.
The quoted construction costs shall be expressed
in nominal dollars as of the date that the quote is
prepared and shall include capitalized financing costs
during construction, taxes, insurance, and other
owner's costs, and an assumed escalation in materials
and labor beyond the date as of which the construction
cost quote is expressed.
(B) The front end engineering and design study for
the gasification island and the cost study for the
balance of plant shall include sufficient design work
to permit quantification of major categories of
materials, commodities and labor hours, and receipt of
quotes from vendors of major equipment required to

HB5539 Engrossed - 33 - LRB099 19598 EGJ 43993 b
construct and operate the clean coal facility.
(C) The facility cost report shall also include an
operating and maintenance cost quote that will provide
the estimated cost of delivered fuel, personnel,
maintenance contracts, chemicals, catalysts,
consumables, spares, and other fixed and variable
operations and maintenance costs. The delivered fuel
cost estimate will be provided by a recognized third
party expert or experts in the fuel and transportation
industries. The balance of the operating and
maintenance cost quote, excluding delivered fuel
costs, will be developed based on the inputs provided
by duly licensed engineering and construction firms
performing the construction cost quote, potential
vendors under long-term service agreements and plant
operating agreements, or recognized third party plant
operator or operators.
The operating and maintenance cost quote
(including the cost of the front end engineering and
design study) shall be expressed in nominal dollars as
of the date that the quote is prepared and shall
include taxes, insurance, and other owner's costs, and
an assumed escalation in materials and labor beyond the
date as of which the operating and maintenance cost
quote is expressed.
(D) The facility cost report shall also include an

HB5539 Engrossed - 34 - LRB099 19598 EGJ 43993 b
analysis of the initial clean coal facility's ability
to deliver power and energy into the applicable
regional transmission organization markets and an
analysis of the expected capacity factor for the
initial clean coal facility.
(E) Amounts paid to third parties unrelated to the
owner or owners of the initial clean coal facility to
prepare the core plant construction cost quote,
including the front end engineering and design study,
and the operating and maintenance cost quote will be
reimbursed through Coal Development Bonds.
(5) Re-powering and retrofitting coal-fired power
plants previously owned by Illinois utilities to qualify as
clean coal facilities. During the 2009 procurement
planning process and thereafter, the Agency and the
Commission shall consider sourcing agreements covering
electricity generated by power plants that were previously
owned by Illinois utilities and that have been or will be
converted into clean coal facilities, as defined by Section
1-10 of this Act. Pursuant to such procurement planning
process, the owners of such facilities may propose to the
Agency sourcing agreements with utilities and alternative
retail electric suppliers required to comply with
subsection (d) of this Section and item (5) of subsection
(d) of Section 16-115 of the Public Utilities Act, covering
electricity generated by such facilities. In the case of

HB5539 Engrossed - 35 - LRB099 19598 EGJ 43993 b
sourcing agreements that are power purchase agreements,
the contract price for electricity sales shall be
established on a cost of service basis. In the case of
sourcing agreements that are contracts for differences,
the contract price from which the reference price is
subtracted shall be established on a cost of service basis.
The Agency and the Commission may approve any such utility
sourcing agreements that do not exceed cost-based
benchmarks developed by the procurement administrator, in
consultation with the Commission staff, Agency staff and
the procurement monitor, subject to Commission review and
approval. The Commission shall have authority to inspect
all books and records associated with these clean coal
facilities during the term of any such contract.
(6) Costs incurred under this subsection (d) or
pursuant to a contract entered into under this subsection
(d) shall be deemed prudently incurred and reasonable in
amount and the electric utility shall be entitled to full
cost recovery pursuant to the tariffs filed with the
Commission.
(e) The draft procurement plans are subject to public
comment, as required by Section 16-111.5 of the Public
Utilities Act.
(f) The Agency shall submit the final procurement plan to
the Commission. The Agency shall revise a procurement plan if
the Commission determines that it does not meet the standards

HB5539 Engrossed - 36 - LRB099 19598 EGJ 43993 b
set forth in Section 16-111.5 of the Public Utilities Act.
(g) The Agency shall assess fees to each affected utility
to recover the costs incurred in preparation of the annual
procurement plan for the utility.
(h) The Agency shall assess fees to each bidder to recover
the costs incurred in connection with a competitive procurement
process.
(Source: P.A. 97-325, eff. 8-12-11; 97-616, eff. 10-26-11;
97-618, eff. 10-26-11; 97-658, eff. 1-13-12; 97-813, eff.
7-13-12; 98-463, eff. 8-16-13.)
(20 ILCS 3855/1-80)
Sec. 1-80. Resource Development Bureau. Upon its
establishment by the Agency, the The Resource Development
Bureau has the following duties and responsibilities:
(a) At the Agency's discretion, conduct feasibility
studies on the construction of any facility. Funding for a
study shall come from either:
(i) fees assessed by the Agency on municipal
electric systems, governmental aggregators, unit or
units of local government, or rural electric
cooperatives requesting the feasibility study; or
(ii) an appropriation from the General Assembly.
(b) If the Agency undertakes the construction of a
facility, moneys generated from the sale of revenue bonds
by the Authority for the facility shall be used to

HB5539 Engrossed - 37 - LRB099 19598 EGJ 43993 b
reimburse the source of the money used for the facility's
feasibility study.
(c) The Agency may develop, finance, construct, or
operate electric generation and co-generation facilities
that use indigenous coal or renewable resources, or both,
financed with bonds issued by the Authority on behalf of
the Agency. Any such facility that uses coal must be a
clean coal facility and must be constructed in a location
where the geology is suitable for carbon sequestration. The
Agency may also develop, finance, construct, or operate a
carbon sequestration facility.
(1) The Agency may enter into contractual
arrangements with private and public entities,
including but not limited to municipal electric
systems, governmental aggregators, and rural electric
cooperatives, to plan, site, construct, improve,
rehabilitate, and operate those electric generation
and co-generation facilities. No contract shall be
entered into by the Agency that would jeopardize the
tax-exempt status of any bond issued in connection with
a project for which the Agency entered into the
contract.
(2) The Agency shall hold at least one public
hearing before entering into any such contractual
arrangements. At least 30-days' notice of the hearing
shall be given by publication once in each week during

HB5539 Engrossed - 38 - LRB099 19598 EGJ 43993 b
that period in 6 newspapers within the State, at least
one of which has a circulation area that includes the
location of the proposed facility.
(3) The first facility that the Agency develops,
finances, or constructs shall be a facility that uses
coal produced in Illinois. The Agency may, however,
also develop, finance, or construct renewable energy
facilities after work on the first facility has
commenced.
(4) The Agency may not develop, finance, or
construct a nuclear power plant.
(5) The Agency shall assess fees to applicants
seeking to partner with the Agency on projects.
(d) Use of electricity generated by the Agency's
facilities. The Agency may supply electricity produced by
the Agency's facilities to municipal electric systems,
governmental aggregators, or rural electric cooperatives
in Illinois. The electricity shall be supplied at cost.
(1) Contracts to supply power and energy from the
Agency's facilities shall provide for the effectuation
of the policies set forth in this Act.
(2) The contracts shall also provide that,
notwithstanding any provision in the Public Utilities
Act, entities supplied with power and energy from an
Agency facility shall supply the power and energy to
retail customers at the same price paid to purchase

HB5539 Engrossed - 39 - LRB099 19598 EGJ 43993 b
power and energy from the Agency.
(e) Electric utilities shall not be required to purchase
electricity directly or indirectly from facilities developed
or sponsored by the Agency.
(f) The Agency may sell excess capacity and excess energy
into the wholesale electric market at prevailing market rates;
provided, however, the Agency may not sell excess capacity or
excess energy through the procurement process described in
Section 16-111.5 of the Public Utilities Act.
(g) The Agency shall not directly sell electric power and
energy to retail customers. Nothing in this paragraph shall be
construed to prohibit sales to municipal electric systems,
governmental aggregators, or rural electric cooperatives.
(Source: P.A. 95-481, eff. 8-28-07; 95-1027, eff. 6-1-09.)
(20 ILCS 3855/1-125)
Sec. 1-125. Agency annual reports. By February 15 of each
year December 1, 2011 and each December 1 thereafter, the
Agency shall report annually to the Governor and the General
Assembly on the operations and transactions of the Agency. The
annual report shall include, but not be limited to, each of the
following:
(1) The average quantity, price, and term of all
contracts for electricity procured under the procurement
plans for electric utilities.
(2) (Blank). The quantity, price, and rate impact of

HB5539 Engrossed - 40 - LRB099 19598 EGJ 43993 b
all renewable resources purchased under the electricity
procurement plans for electric utilities.
(3) The quantity, price, and rate impact of all energy
efficiency and demand response measures purchased for
electric utilities, and any measures included in the
procurement plan pursuant to Section 16-111.5B of the
Public Utilities Act.
(4) The amount of power and energy produced by each
Agency facility.
(5) The quantity of electricity supplied by each Agency
facility to municipal electric systems, governmental
aggregators, or rural electric cooperatives in Illinois.
(6) The revenues as allocated by the Agency to each
facility.
(7) The costs as allocated by the Agency to each
facility.
(8) The accumulated depreciation for each facility.
(9) The status of any projects under development.
(10) Basic financial and operating information
specifically detailed for the reporting year and
including, but not limited to, income and expense
statements, balance sheets, and changes in financial
position, all in accordance with generally accepted
accounting principles, debt structure, and a summary of
funds on a cash basis.
(11) The average quantity, price, contract type and

HB5539 Engrossed - 41 - LRB099 19598 EGJ 43993 b
term, and rate impact of all renewable resources purchased
pursuant to long-term contracts under the electricity
procurement plans for electric utilities.
(12) A comparison of the costs associated with the
Agency's procurement of renewable energy resources to (A)
the Agency's costs associated with electricity generated
by other types of generation facilities and (B) the
benefits associated with the Agency's procurement of
renewable energy resources.
(13) An analysis of the rate impacts associated with
the Illinois Power Agency's procurement of renewable
resources, including, but not limited to, any long-term
contracts, on the eligible retail customers of electric
utilities. The analysis shall include the Agency's
estimate of the total dollar impact that the Agency's
procurement of renewable resources has had on the annual
electricity bills of the customer classes that comprise
each eligible retail customer class taking service from an
electric utility.
(14) An analysis of how the operation of the
alternative compliance payment mechanism, any long-term
contracts, or other aspects of the applicable renewable
portfolio standards impacts the rates of customers of
alternative retail electric suppliers.
(Source: P.A. 97-658, eff. 1-13-12.)

HB5539 Engrossed - 42 - LRB099 19598 EGJ 43993 b
Section 10. The State Finance Act is amended by changing
Section 6z-75 as follows:
(30 ILCS 105/6z-75)
Sec. 6z-75. The Illinois Power Agency Trust Fund.
(a) Creation. The Illinois Power Agency Trust Fund is
created as a special fund in the State treasury. The State
Treasurer shall be the custodian of the Fund. Amounts in the
Fund, both principal and interest not appropriated, shall be
invested as provided by law.
(b) Funding and investment.
(1) The Illinois Power Agency Trust Fund may accept,
receive, and administer any grants, loans, or other funds
made available to it by any source. Any such funds received
by the Fund shall not be considered income, but shall be
added to the principal of the Fund.
(2) The investments of the Fund shall be managed by the
Illinois State Board of Investment, for the purpose of
obtaining a total return on investments for the long term,
as provided for under Article 22A of the Illinois Pension
Code.
(c) Investment proceeds. Subject to the provisions of
subsection (d) of this Section, the General Assembly may
annually appropriate from the Illinois Power Agency Trust Fund
to the Illinois Power Agency Operations Fund an amount
calculated not to exceed 90% of the prior fiscal year's annual

HB5539 Engrossed - 43 - LRB099 19598 EGJ 43993 b
investment income earned by the Fund to the Illinois Power
Agency. Any investment income not appropriated by the General
Assembly in a given fiscal year shall be added to the principal
of the Fund, and thereafter considered a part thereof and not
subject to appropriation as income earned by the Fund.
(d) Expenditures.
(1) During Fiscal Year 2008 and Fiscal Year 2009, the
General Assembly shall not appropriate any of the
investment income earned by the Illinois Power Agency Trust
Fund to the Illinois Power Agency.
(2) During Fiscal Year 2010 and Fiscal Year 2011, the
General Assembly shall appropriate a portion of the
investment income earned by the Illinois Power Agency Trust
Fund to repay to the General Revenue Fund of the State of
Illinois those amounts, if any, appropriated from the
General Revenue Fund for the operation of the Illinois
Power Agency during Fiscal Year 2008 and Fiscal Year 2009,
so that at the end of Fiscal Year 2011, the entire amount,
if any, appropriated from the General Revenue Fund for the
operation of the Illinois Power Agency during Fiscal Year
2008 and Fiscal Year 2009 will be repaid in full to the
General Revenue Fund.
(3) In Fiscal Year 2012 and thereafter, the General
Assembly shall consider the need to balance its
appropriations from the investment income earned by the
Fund with the need to provide for the growth of the

HB5539 Engrossed - 44 - LRB099 19598 EGJ 43993 b
principal of the Illinois Power Agency Trust Fund in order
to ensure that the Fund is able to produce sufficient
investment income to fund the operations of the Illinois
Power Agency in future years.
(4) If the Illinois Power Agency shall cease
operations, then, unless otherwise provided for by law or
appropriation, the principal and any investment income
earned by the Fund shall be transferred into the
Supplemental Low-Income Energy Assistance Program (LIHEAP)
Fund under Section 13 of the Energy Assistance Act of 1989.
(e) Implementation. The provisions of this Section shall
not be operative until the Illinois Power Agency Trust Fund has
accumulated a principal balance of $25,000,000.
(Source: P.A. 95-481, eff. 8-28-07.)
Section 99. Effective date. This Act takes effect upon
becoming law.