Bill Text: IL SB3935 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Public Utilities Act. Provides that a gas utility may cease providing service if the Illinois Commerce Commission determines that adequate substitute service is available at a reasonable cost to support the existing end uses of the affected utility customers. Provides for cost-effective energy efficiency measures for natural gas utilities that supersede existing provisions concerning natural gas energy efficiency programs and take effect beginning January 1, 2025. Provides that gas main and gas service extension policies shall be based on the principle that the full incremental cost associated with new development and growth shall be borne by the customers that cause those incremental costs. Provides that, no later than 60 days after the effective date of the amendatory Act, the Commission shall initiate a docketed rulemaking reviewing each gas public utility tariff that provides for gas main and gas service extensions without additional charge to new customers in excess of the default extensions as specified in administrative rule. Adds the Clean Building Heating Law Article to the Act, with provisions concerning emissions standards for heating in buildings, as well as related and other provisions. Adds the 2050 Heat Decarbonization Standard Article to the Act, with provisions concerning options for compliance, measures for customer emission reduction, customer emission reductions, tradable clean heat credits, banking of emission reductions, equity in emission reductions, enforcement, the 2050 Heat Decarbonization Pathways Study, gas infrastructure planning, a study on gas utility financial incentive reform, and reporting requirements. Adds the Statewide Navigator Program Law Article to the Act, with provisions concerning creation of a statewide navigator program, as well as related and other provisions. Amends the Energy Transition Act to add electrification industries to clean energy jobs. Effective immediately.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced) 2024-05-22 - Added as Co-Sponsor Sen. Laura Fine [SB3935 Detail]

Download: Illinois-2023-SB3935-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3935 Introduced 4/29/2024, by Sen. Celina Villanueva SYNOPSIS AS INTRODUCED:
See Index
Amends the Public Utilities Act. Provides that a gas utility may cease providing service if the Illinois Commerce Commission determines that adequate substitute service is available at a reasonable cost to support the existing end uses of the affected utility customers. Provides for cost-effective energy efficiency measures for natural gas utilities that supersede existing provisions concerning natural gas energy efficiency programs and take effect beginning January 1, 2025. Provides that gas main and gas service extension policies shall be based on the principle that the full incremental cost associated with new development and growth shall be borne by the customers that cause those incremental costs. Provides that, no later than 60 days after the effective date of the amendatory Act, the Commission shall initiate a docketed rulemaking reviewing each gas public utility tariff that provides for gas main and gas service extensions without additional charge to new customers in excess of the default extensions as specified in administrative rule. Adds the Clean Building Heating Law Article to the Act, with provisions concerning emissions standards for heating in buildings, as well as related and other provisions. Adds the 2050 Heat Decarbonization Standard Article to the Act, with provisions concerning options for compliance, measures for customer emission reduction, customer emission reductions, tradable clean heat credits, banking of emission reductions, equity in emission reductions, enforcement, the 2050 Heat Decarbonization Pathways Study, gas infrastructure planning, a study on gas utility financial incentive reform, and reporting requirements. Adds the Statewide Navigator Program Law Article to the Act, with provisions concerning creation of a statewide navigator program, as well as related and other provisions. Amends the Energy Transition Act to add electrification industries to clean energy jobs. Effective immediately.
LRB103 40383 LNS 72670 b
A BILL FOR
SB3935 LRB103 40383 LNS 72670 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Energy Transition Act is amended by
changing Section 5-25 as follows:
(20 ILCS 730/5-25)
(Section scheduled to be repealed on September 15, 2045)
Sec. 5-25. Clean Jobs Curriculum.
(a) As used in this Section, "clean energy jobs", subject
to administrative rules, means jobs in the solar energy, wind
energy, energy efficiency, energy storage, solar thermal,
green hydrogen, geothermal, electric vehicle industries,
electrification industries, other renewable energy industries,
industries achieving emission reductions, and other related
sectors including related industries that manufacture,
develop, build, maintain, or provide ancillary services to
renewable energy resources or energy efficiency products or
services, including the manufacture and installation of
healthier building materials that contain fewer hazardous
chemicals. "Clean energy jobs" includes administrative, sales,
other support functions within these industries and other
related sector industries.
(b) The Department shall convene a comprehensive

SB3935 - 2 - LRB103 40383 LNS 72670 b
stakeholder process that includes representatives from the
State Board of Education, the Illinois Community College
Board, the Department of Labor, community-based organizations,
workforce development providers, labor unions, building
trades, educational institutions, residents of BIPOC and
low-income communities, residents of environmental justice
communities, clean energy businesses, nonprofit organizations,
worker-owned cooperatives, other groups that provide clean
energy jobs opportunities, groups that provide construction
and building trades job opportunities, and other participants
to identify the career pathways and training curriculum needed
for participants to be skilled, work ready, and able to enter
clean energy jobs. The curriculum shall:
(1) identify the core training curricular competency
areas needed to prepare workers to enter clean energy and
related sector jobs;
(2) identify a set of required core cross-training
competencies provided in each training area for clean
energy jobs with the goal of enabling any trainee to
receive a standard set of skills common to multiple
training areas that would provide a foundation for
pursuing a career composed of multiple clean energy job
types;
(3) include approaches to integrate broad occupational
training to provide career entry into the general
construction and building trades sector and any remedial

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education and work readiness support necessary to achieve
educational and professional eligibility thresholds; and
(4) identify on-the-job training formats, where
relevant, and identify suggested trainer certification
standards, where relevant.
(c) The Department shall publish a report that includes
the findings, recommendations, and core curriculum identified
by the stakeholder group and shall post a copy of the report on
its public website. The Department shall convene the process
described to update and modify the recommended curriculum
every 3 years to ensure the curriculum contents are current to
the evolving clean energy industries, practices, and
technologies.
(d) Organizations that receive funding to provide training
under the Clean Jobs Workforce Network Program, including, but
not limited to, community-based and labor-based training
providers, and educational institutions must use the core
curriculum that is developed under this Section.
(Source: P.A. 102-662, eff. 9-15-21.)
Section 10. The Public Utilities Act is amended by
changing Sections 1-102, 8-101, 9-229, 9-241, and 16-111.10
and by adding Sections 1-103, 3-127, 8-104B, 9-228.5, 9-235,
9-254, and 9-255, and Articles XXIII, XXIV, and XXV as
follows:

SB3935 - 4 - LRB103 40383 LNS 72670 b
(220 ILCS 5/1-102) (from Ch. 111 2/3, par. 1-102)
Sec. 1-102. Findings and Intent. The General Assembly
finds that the health, welfare, and prosperity of all Illinois
citizens require the provision of adequate, efficient,
reliable, affordable, environmentally safe, and least-cost
public utility services at prices which accurately reflect the
long-term cost of such services and which are equitable to all
citizens. It is therefore declared to be the policy of the
State that public utilities shall continue to be regulated
effectively and comprehensively. It is further declared that
the goals and objectives of such regulation shall be to
ensure:
(a) Efficiency: the provision of reliable and
affordable energy services that meet the State's climate
and emissions reduction targets at the lowest societal
least possible cost to the citizens of the State; in such
manner that:
(i) physical, human, and financial resources are
allocated efficiently and equitably;
(ii) all supply and demand options are considered
and evaluated using comparable terms and methods in
order to determine how utilities shall meet State
emissions reduction targets and their customers'
demands for public utility services at the lowest
societal least cost;
(iii) utilities are allowed a sufficient return on

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investment so as to enable them to attract capital in
financial markets at competitive rates;
(iv) tariff rates for the sale of various public
utility services are authorized such that they
accurately reflect the cost of delivering those
services and allow utilities to recover the total
costs prudently and reasonably incurred;
(v) variation in costs by customer class and time
of use is taken into consideration in authorizing
rates for each class.
(b) Environmental Quality: the protection of the
environment, people, and communities from the adverse
external costs of public utility services, including
environmental costs, so that:
(i) environmental costs of proposed actions having
a significant impact on the environment and the
environmental impact of the alternatives are
identified, documented, monetized, included in
assessments of cost, and considered in all aspects of
the regulatory process;
(ii) the prudently and reasonably incurred costs
of environmental controls are recovered.
(c) Reliability: the ability of utilities to provide
consumers with public utility services under varying
demand conditions in such manner that suppliers of public
utility services are able to provide service at varying

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levels of economic reliability giving appropriate
consideration to the costs likely to be incurred as a
result of service interruptions, and to the costs of
increasing or maintaining current levels of reliability
consistent with commitments to consumers.
(d) Equity: the fair treatment of consumers, including
equity investment eligible persons and equity investment
eligible communities, as defined in the Energy Transition
Act, and investors in order that
(i) the public health, safety, and welfare shall
be protected;
(ii) the application of rates is based on public
understandability and acceptance of the reasonableness
of the rate structure and level;
(iii) the cost of supplying public utility
services is allocated to those who cause the costs to
be incurred;
(iv) if factors other than cost of service are
considered in regulatory decisions, the rationale for
these actions is set forth;
(v) regulation allows for orderly transition
periods to accommodate changes in public utility
service markets;
(vi) regulation does not result in undue or
sustained adverse impact on utility earnings;
(vii) the impacts of regulatory actions on all

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sectors of the State are carefully weighed;
(viii) the rates for utility services are
affordable and, therefore, ensure and preserve the
availability and accessibility of such services to all
customers, and customers are not energy burdened or
severely energy burdened citizens.
As used in this subsection (d):
(I) "Energy burdened" means, with respect to a
customer's household, that the household pays 6% or
more of its income toward electricity and gas bills.
(II) "Severely energy burdened" means, with
respect to a customer's household, that the household
pays 10% or more of its income toward electricity and
gas bills.
(e) Affordability: the ability of utilities to ensure
uninterrupted access to essential utility service; to
minimize and reduce over time the number of households who
are energy burdened and severely energy burdened, as
defined in this Act, ideally to zero; and to minimize
disconnections to residential customers in a manner which
ensures that:
(i) all low-income customers, defined as those
whose income is less than or equal to 80% of the area
median income, as defined by the United States
Department of Housing and Urban Development, have
access to a discounted utility rate;

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(ii) low-income customers 65 years of age or older
are not disconnected from essential utility service
due to inability to afford the monthly bill;
(iii) low-income customers with children under the
age of 6 are not disconnected from essential utility
service due to inability to afford the monthly bill;
(iv) persons with medical conditions are not
disconnected from essential utility service if a
medical or qualified professional as described in
subsection (b) of Section 8-202.7 certifies that the
condition will be exacerbated by disconnection from
essential utility service;
(v) disconnection of essential utility service is
not accelerated based on a utility's payment risk
assessment of a customer; and
(vi) a utility assesses whether a customer may be
eligible for energy assistance programs under the
Energy Assistance Act, provides the customer with
specific information on where and how to obtain energy
assistance, and ceases disconnection activity for 60
days to allow the customer to apply for and establish
eligibility for the energy assistance.
It is further declared to be the policy of the State that
this Act shall not apply in relation to motor carriers and rail
carriers as defined in the Illinois Commercial Transportation
Law, or to the Commission in the regulation of such carriers.

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Nothing in this Act shall be construed to limit, restrict,
or mitigate in any way the power and authority of the State's
Attorneys or the Attorney General under the Consumer Fraud and
Deceptive Business Practices Act.
(Source: P.A. 92-22, eff. 6-30-01.)
(220 ILCS 5/1-103 new)
Sec. 1-103. Commission methodologies and metrics. The
Commission shall oversee the objectives identified in Section
1-102 by establishing and implementing methodologies for
tracking each of the following metrics:
(1) Environmental costs: The Commission shall
establish a social cost of greenhouse gases, measured in
dollars per ton of carbon dioxide equivalent, that shall
serve as a monetary estimate of the value of not emitting a
ton of greenhouse gas emissions. The Commission shall
consider prior or existing estimates of the social cost of
carbon issued or adopted by the federal government,
appropriate international bodies, or other appropriate and
reputable scientific organizations. The social cost of
greenhouse gases shall:
(A) estimate the emissions for all relevant
greenhouse gases, including carbon, methane, nitrous
oxide, hydrofluorocarbons and hydrofluoroolefins,
perfluorocarbons, sulfur hexafluoride, and nitrogen
trifluoride;

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(B) consider the fullest geographic and temporal
scope of damages;
(C) for the purposes of this Act, the cost of
greenhouse gas emissions is no less than the cost per
metric ton of carbon dioxide equivalent emissions,
using the 2.5% discount rate, listed in Table ES-1 of
"Technical Support Document: Social Cost of Carbon,
Methane, and Nitrous Oxide Interim Estimates under
Executive Order 13990", a report prepared in support
of federal Executive Order 13990 and dated February
2021.
The Commission must annually adjust the costs
established in this Section to reflect the effect of
inflation and may, at its discretion, set the price at a
higher level than described above, but no lower.
(2) Impacts to public health: The Commission shall
develop a methodology for measuring and monetizing in cost
assessments the public health impacts of pollutants,
including impacts of both indoor and outdoor air quality,
including carbon monoxide and carbon dioxide, nitrogen
oxides, including nitrogen dioxide, particulate matter,
formaldehyde, sulfur dioxide, ozone, and lead. The
Commission shall integrate its methodology into
assessments of utility system planning and supply and
demand-side resource selection.
It is further declared to be the policy of the State that

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this Section does not apply to motor carriers and rail
carriers as defined in the Illinois Commercial Transportation
Law or to the Commission in the regulation of such carriers.
Nothing in this Section shall be construed to limit,
restrict, or mitigate in any way the power and authority of the
State's Attorneys or the Attorney General under the Consumer
Fraud and Deceptive Business Practices Act.
(220 ILCS 5/3-127 new)
Sec. 3-127. Fixed charge. "Fixed charge" means a charge
that is assessed by a public utility as part of its rates, is
equal across all customers or customers of a certain class,
and is not directly proportional to a customer's usage.
(220 ILCS 5/8-101) (from Ch. 111 2/3, par. 8-101)
Sec. 8-101. Duties of public utilities; nondiscrimination.
A public utility shall furnish, provide, and maintain such
service instrumentalities, equipment, and facilities as shall
promote the safety, health, comfort, and convenience of its
patrons, employees, and public and as shall be in all respects
adequate, efficient, just, and reasonable.
All rules and regulations made by a public utility
affecting or pertaining to its charges or service to the
public shall be just and reasonable.
An electric A public utility shall, and a gas utility may,
upon reasonable notice, furnish to all persons who may apply

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therefor and be reasonably entitled thereto, suitable
facilities and service, without discrimination and without
delay. Notwithstanding any other provision of law, a gas
utility may cease providing service if the Commission
determines that adequate substitute service is available at a
reasonable cost to support the existing end uses of the
affected utility customers. Any applicant for gas service
shall receive clear, timely information from the gas utility,
written in plain language, and approved by the Commission
after stakeholder input on incentives and opportunities for
installing, as alternatives to gas, energy-efficient electric
technologies and incentives and opportunities for other energy
efficiency measures, weatherization, demand management, and
distributed energy resource programs. The information provided
must include, among other things, information detailing
electrification incentives in the Inflation Reduction Act and
describing how the applicant can elect to receive the upfront
discounts or tax incentives applicable to the applicant's
electric purchases.
Nothing in this Section shall be construed to prevent a
public utility from accepting payment electronically or by the
use of a customer-preferred financially accredited credit or
debit methodology.
(Source: P.A. 92-22, eff. 6-30-01.)
(220 ILCS 5/8-104B new)

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Sec. 8-104B. Gas energy efficiency.
(a) As used in this Section:
"Benefit-cost ratio" means 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.
"Cost-effective measure" means a measure that satisfies
the total resource cost test.
"Energy efficiency measure" means a measure that reduces
(i) the total Btus of electricity and natural gas and other
utility-delivered gaseous fuels needed to meet an end use or
end uses and (ii) the amount of natural gas and other
utility-delivered gaseous fuels consumed on site, at the home
or business facility, to meet an end use or end uses.
"Total resource cost test" means a standard that is met
if, for an investment in an energy efficiency measure, the
benefit-cost ratio is greater than one. The total resource
cost test quantifies the net savings obtained through the
substitution of demand-side measures for supply resources by
comparing (i) the sum of avoided natural gas utility costs,
representing the benefits that accrue to the natural gas
system and the participant in the delivery of those energy
efficiency measures and including avoided costs associated
with the use of electricity or other fuels, avoided costs
associated with reduced water consumption, and avoided
operation and maintenance costs, as well as other quantifiable

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societal benefits and (ii) the sum of all incremental costs of
end-use measures, including both utility and participant
contribution costs to administer, deliver, and evaluate each
demand-side measure. In calculating avoided costs, reasonable
estimates shall be included for financial costs likely to be
imposed by future regulation of emissions of greenhouse gases.
In discounting future societal costs and benefits for the
purpose of calculating net present values, a societal discount
rate based on actual, long-term U.S. Treasury bond yields
shall be used. The income-qualified measures described in
paragraphs (5) and (6) of subsection (d) shall not be required
to meet the total resource cost test.
(b) It is the policy of the State for gas utilities to be
required to use cost-effective energy efficiency measures to
reduce delivery load. Requiring investment in cost-effective
energy efficiency measures will reduce direct and indirect
costs to consumers by decreasing environmental impacts,
reducing the amount of natural gas and other utility-delivered
gaseous fuels that need to be purchased, and avoiding or
delaying the need for new transmission, distribution, storage,
and other related infrastructure. Moreover, the public
interest is served by allowing gas utilities to recover costs
for reasonably and prudently incurred expenditures for energy
efficiency measures.
(c) This Section applies to all gas distribution utilities
in the State and supersedes Section 8-104 beginning January 1,

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2024.
(d) Natural gas utilities shall implement cost-effective
energy efficiency measures to achieve all of the following
requirements:
(1) Total incremental annual savings shall be equal to
at least 0.6% of annual sales to distribution customers in
2025, 0.8% of such sales in 2026, and at least 1% of such
sales in 2027 and each subsequent year. For the purpose of
calculating savings as a percent of sales to distribution
customers for a given program year, the denominator of
sales to distribution customers shall be annual average
sales over the second, third, and fourth full calendar
years prior to the beginning of the program year.
(2) The savings achieved must have an average life of
at least 12 years.
(3) Savings may not be applied toward achievement of
utility savings goals if the savings arise from the
installation of efficient new gas furnaces, gas boilers,
gas water heaters, or other gas-consuming equipment in a
residential building, such as a single-family,
individually metered multifamily building or a
master-metered multifamily building.
(4) At least 50% of the entire budget for efficiency
programs shall be spent on energy efficiency measures that
reduce space heating needs through improvements to the
efficiency of building envelopes, including, but not

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limited to, insulation measures and efficient windows and
energy efficiency measures that reduce air leakage through
improvements to systems for distributing heat, including,
but not limited to, duct leakage reduction, duct
insulation, or pipe insulation in buildings or through
improved heating systems controls, including, but not
limited to, advanced thermostats and demand control
ventilation. Spending on efficient furnaces, efficient
boilers, or other efficient heating systems is permitted
within business efficiency programs but does not count
toward this minimum requirement for spending on building
envelope, heating distribution, and control efficiencies.
Spending on income-qualified building envelope measures,
heating distribution system measures, and heating controls
does count toward this requirement. The portion of
portfolio spending on program marketing, training of
installers, audits of buildings, inspections of work
performed, and other administrative and technical expenses
that are clearly tied to promotion or installation of
building envelope or heating distribution system measures
shall count toward this requirement. If this minimum
requirement is not met, any performance incentive earned
under subsection (h) should be reduced by the percentage
point level of shortfall in meeting this requirement.
(5) The portion of the entire budget for efficiency
programs that is spent on efficiency measures for

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income-qualified households shall be the greater of 20% or
5 percentage points more than the proportion of total
residential and business customer gas sales going to
income-qualified households. For purposes of this Section,
households at or below 80% of area median income are
income-qualified. At least 80% of spending on measures in
programs targeted at income-qualified households shall be
delivered through whole building weatherization programs
and spent on measures that reduce space heating needs
through improvements to the building envelope, heating
distribution systems, or heating controls. The utilities
shall invest in health and safety measures appropriate and
necessary for comprehensively weatherizing the homes and
multifamily buildings of income-qualified households, with
up to 15% of income-qualified program spending made
available for such purposes. The ratio of spending on
efficiency programs targeted at multifamily buildings of
income-qualified households to spending on energy
efficiency programs targeted at single-family buildings of
income-qualified households shall be designed to achieve
levels of savings from each building type that are
approximately proportional to the magnitude of
cost-effective lifetime savings potential in each building
type. The gas utilities shall participate in a Low-Income
Energy Efficiency Accountability Committee as established
in Section 8-103B.

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Gas utilities must conduct customer outreach and
education efforts in equity investment eligible
communities in order to provide notice of and explanations
concerning the following types of programs:
(A) energy efficiency programs, the Illinois Solar
for All Program, and whole home retrofit programs that
reduce natural gas usage;
(B) income-qualified financial assistance
programs, including rebate programs from the federal
government; and
(C) general education programs designed to explain
utility bills and the decisions customers can make to
lower energy usage.
These outreach and education efforts must be brought
to communities in a diversity of ways, must be created
with input from members of the communities, and must be
provided through, among other things:
(i) information on customers' bills in the main
languages spoken in the communities;
(ii) a quarterly posting in local newspapers that
cover the service area;
(iii) a dedicated section on the investor-owned
utility's website; and
(iv) in-person and virtual educational sessions
that take place in the income-qualified and Justice40
community, provide food and child care for

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participating customers, and are codesigned with
interested community-based organization
representatives.
(6) Implementation of energy efficiency measures and
programs targeted at income-qualified households shall be
contracted, when practicable, to independent third parties
that have demonstrated the capability of serving those
households, with a preference for not-for-profit entities
and government agencies that have existing relationships
with, experience serving, or working directly within and
alongside income-qualified communities in the State. Each
gas utility shall develop and implement reporting
procedures that address and assist in determining the
amount of energy savings that can be applied to the
income-qualified procurement and expenditure requirements
set forth in this paragraph.
(7) A minimum of 10% 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, community college districts,
and nonprofit-owned buildings as long as a minimum
percentage of available funds shall be used to procure
energy efficiency from public housing, which percentage
shall be, at a minimum, equal to public housing's share of
public building energy consumption. Spending on public

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housing may count toward minimum spending requirements on
efficiency improvements for income-qualified households.
(e) Notwithstanding any other provision of law, a utility
providing approved energy efficiency measures in the State may
recover all reasonable and prudently incurred costs of those
measures from its retail customers. However, nothing in this
subsection permits the double recovery of such costs from
customers.
(f) Beginning in 2024, each gas utility shall file an
energy efficiency plan with the Commission to meet the energy
efficiency standards in subsection (d) for the next applicable
multiyear period beginning January 1 of the year following the
filing, according to the schedule set forth in paragraphs (1)
through (4). If a utility does not file such a plan on or
before the applicable filing deadline for the plan, the
utility shall be liable for a civil penalty of $100,000 per day
until the plan is filed.
(1) No later than 120 days after the effective date of
this amendatory Act of the 103rd General Assembly, each
gas utility shall file an energy efficiency plan to
supersede its previously filed energy efficiency plan for
calendar year 2025 that is designed to achieve through
implementation of energy efficiency measures the
incremental annual savings goals, minimum average savings
life, and other requirements specified in paragraphs (1)
through (7) of subsection (d). An energy efficiency plan

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submitted by a gas utility under this paragraph supersedes
any energy efficiency plan previously filed by the gas
utility for calendar year 2025.
(2) No later than March 1, 2025, each gas utility
shall file a 4-year energy efficiency plan that takes
effect on January 1, 2026 and is designed to achieve,
through implementation of emergency efficiency measures,
the incremental annual savings goals, minimum average
savings life, and other requirements specified in
paragraphs (1) through (7) of subsection (d). However, the
incremental annual savings goals may be reduced if the
plan's analysis and forecasts of the utility's ability to
acquire energy savings demonstrate by clear and convincing
evidence and through independent analysis that achievement
of such goals is not cost-effective. In no event may
incremental annual savings goals for any year be reduced
to levels below (i) those actually achieved in calendar
year 2024, (ii) those forecast to be achieved in calendar
year 2025, or (iii) 0.75% of sales. The Commission shall
review any proposed goal reduction as part of its review
and approval of the utility's proposed plan.
(3) Beginning in 2029 and every 4 years thereafter,
each gas utility shall file by no later than March 1 of the
applicable year, a 4-year energy efficiency plan that
takes effect on the following January 1 and is designed to
achieve, through implementation of energy efficiency

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measures, the incremental annual savings goals, minimum
average savings life, and other requirements specified in
paragraphs (1) through (7) of subsection (d). However, the
incremental annual savings goals may be reduced if the
plan's analysis and forecasts of the utility's ability to
acquire energy savings demonstrate by clear and convincing
evidence and through independent analysis that achievement
of such goals is not cost-effective. In no event may
incremental annual savings goals for any year be reduced
to levels below (i) those actually achieved in the
calendar year before the plan filing, (ii) those forecast
to be achieved in the calendar year in which the plan
filing is made, or (iii) 0.75% of sales. The Commission
shall review any proposed goal reduction as part of its
review and approval of the utility's proposed plan.
(4) Each utility's plan shall set forth the utility's
proposals to meet the energy efficiency standards
identified in subsection (d). The Commission shall seek
public comment on each plan that takes effect on January
1, 2024 and before January 1, 2026 and shall issue an order
approving or disapproving the plan no later than November
30, 2023, or 225 days after the effective date of this
amendatory Act of the 103rd General Assembly, whichever is
later. The Commission shall seek public comment on each
plan that takes effect on January 1, 2026 and shall issue
an order approving or disapproving the plan within 6

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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 civil penalties at a
rate of $100,000 per day until the plan is refiled. 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.
(g) In submitting proposed plans and funding levels under
subsection (f) to meet the savings goals identified in
subsection (d), the utility shall:
(1) demonstrate that its proposed energy efficiency
measures will achieve the requirements that are identified
in subsection (d);
(2) demonstrate consideration of program options for
supporting efforts to improve compliance with new building
codes, appliance standards, and municipal regulations as
potentially cost-effective means of acquiring energy
savings to count toward energy savings goals;
(3) demonstrate that its overall portfolio of measures
and programs, not including income-qualified programs
described in subsection (d), is cost-effective using the

SB3935 - 24 - LRB103 40383 LNS 72670 b
total resource cost test and represents a diverse cross
section of opportunities for customers of all rate classes
to participate in programs. Individual measures need not
be cost-effective;
(4) demonstrate that the utility's plan integrates the
delivery of energy efficiency programs with electric
efficiency programs, programs promoting demand response,
and other efforts to address bill payment issues,
including, but not limited to, the Low Income Home Energy
Assistance Program and the Percentage of Income Payment
Plans;
(5) include a proposed or revised cost-recovery
mechanism to fund the proposed energy efficiency measures
and ensure the recovery of the prudently and reasonably
incurred costs of Commission-approved programs;
(6) provide, using not more than 3% of portfolio
resources in any given year, an annual independent
evaluation of the performance and cost-effectiveness of
the utility's portfolio of measures and programs;
(7) demonstrate how it will ensure that program
implementation contractors and energy efficiency
installation vendors will promote workforce equity and
quality jobs. Utilities shall collect, and make publicly
available at least quarterly, data necessary to
demonstrate how efforts are advancing workforce equity.
Utilities shall work with relevant vendors providing

SB3935 - 25 - LRB103 40383 LNS 72670 b
education, training, and other resources needed to ensure
compliance and, where necessary, adjusting or terminating
work with vendors that cannot assist with compliance; and
(8) include any plans for research, development, or
pilot deployment of new measures or program approaches.
For utilities with unmodified savings goals, no more than
4% of energy efficiency portfolio spending may be
allocated for such purposes. For utilities with modified
savings goals, no more than 2% of energy efficiency
portfolio spending may be allocated for such purposes.
Utilities shall work with interested stakeholders to
formulate a plan for how any proposed funds should be
spent, incorporate statewide approaches for these
allocations whenever such approaches would be more
effective or cost-efficient, and demonstrate such
collaboration in the utilities' plans.
(h) Each gas utility shall be eligible to earn a
shareholder incentive for effective implementation of its
efficiency programs. The incentive shall be tied to each
utility's annual energy efficiency spending and its savings.
There shall be no incentive if the independent evaluator
determines the utility either (i) failed to achieve the
minimum average savings life specified in paragraph (2) of
subsection (d), (ii) did not fully meet all of the
requirements specified in paragraphs (3) through (7) of
subsection (d), or (iii) failed to achieve incremental annual

SB3935 - 26 - LRB103 40383 LNS 72670 b
savings equal to at least 90% of the incremental savings goal
specified in paragraph (1) of subsection (d). If a utility
meets all of the requirements specified in paragraphs (2)
through (7) of subsection (d), it can earn an incentive equal
0.5% of total annual efficiency spending in the year being
evaluated for every one percentage point above 90% of its
incremental annual savings goal that it achieves for that
year, with a maximum incentive of 15% for achieving 120% of its
incremental annual savings goal.
(i) The utility shall submit 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
incremental annual savings and average savings life, as well
as an estimate of the job impacts and other macroeconomic
impacts of the efficiency programs for that year, achieved 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 incremental annual savings for the year, identifying
average savings life for the year, documenting compliance with
other requirements in subsection (d), and, as applicable, the
magnitude of any shareholder incentive which the utility has
earned.
(j) Gas utilities shall report annually to the Commission
and General Assembly on how hiring, contracting, job training,

SB3935 - 27 - LRB103 40383 LNS 72670 b
and other practices related to its energy efficiency programs
enhance the diversity of vendors working on such programs.
These reports must include data on vendor and employee
diversity.
(k) 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 measure life
values for energy efficiency measures implemented for
income-qualified households are separately incorporated into
such Commission-approved manuals, the income-qualified
measures shall have the same measure life values that are
established for the same measures implemented in households
that are not income-qualified households.
(220 ILCS 5/9-228.5 new)
Sec. 9-228.5. Consideration of gas main and gas service
extension costs. Gas main and gas service extension policies
shall be based on the principle that the full incremental cost
associated with new development and growth shall be borne by
the customers that cause those incremental costs. Gas main and
gas service extension policies, procedures, and conditions
shall align with the greenhouse gas emission reduction goals
established in Article XXIV.
(220 ILCS 5/9-229)

SB3935 - 28 - LRB103 40383 LNS 72670 b
Sec. 9-229. Consideration of attorney and expert
compensation as an expense and intervenor compensation fund.
(a) The Commission shall specifically assess the justness
and reasonableness of any amount expended by a public utility
to compensate attorneys or technical experts to prepare and
litigate a general rate case filing. This issue shall be
expressly addressed in the Commission's final order.
(b) The State of Illinois shall create a Consumer
Intervenor Compensation Fund subject to the following:
(1) Provision of compensation for Consumer Interest
Representatives that intervene in Illinois Commerce
Commission proceedings will increase public engagement,
encourage additional transparency, expand the information
available to the Commission, and improve decision-making.
(2) As used in this Section, "consumer Consumer
interest representative" means:
(A) a residential utility customer or group of
residential utility customers represented by a
not-for-profit group or organization registered with
the Illinois Attorney General under the Solicitation
for of Charity Act;
(B) representatives of not-for-profit groups or
organizations whose membership is limited to
residential utility customers; or
(C) representatives of not-for-profit groups or
organizations whose membership includes Illinois

SB3935 - 29 - LRB103 40383 LNS 72670 b
residents and that address the community, economic,
environmental, or social welfare of Illinois
residents, except government agencies or intervenors
specifically authorized by Illinois law to participate
in Commission proceedings on behalf of Illinois
consumers.
(3) A consumer interest representative is eligible to
receive compensation from the consumer intervenor
compensation fund if its participation included lay or
expert testimony or legal briefing and argument concerning
the expenses, investments, rate design, rate impact, or
other matters affecting the pricing, rates, costs or other
charges associated with utility service, the Commission
adopts a material recommendation related to a significant
issue in the docket, and participation caused a
significant financial cost hardship to the participant;
however, no consumer interest representative shall be
eligible to receive an award pursuant to this Section if
the consumer interest representative receives any
compensation, funding, or donations, directly or
indirectly, from parties that have a financial interest in
the outcome of the proceeding.
(4) Within 30 days after September 15, 2021 (the
effective date of Public Act 102-662) this amendatory Act
of the 102nd General Assembly, each utility that files a
request for an increase in rates under Article IX or

SB3935 - 30 - LRB103 40383 LNS 72670 b
Article XVI shall deposit an amount equal to one half of
the rate case attorney and expert expense allowed by the
Commission, but not to exceed $500,000, into the fund
within 35 days of the date of the Commission's Final final
Order in the rate case or 20 days after the denial of
rehearing under Section 10-113 of this Act, whichever is
later. The Consumer Intervenor Compensation Fund shall be
used to provide payment to consumer interest
representatives as described in this Section.
(5) An electric public utility with 3,000,000 or more
retail customers shall contribute $450,000 to the Consumer
Intervenor Compensation Fund within 60 days after
September 15, 2021 (the effective date of Public Act
102-662) this amendatory Act of the 102nd General
Assembly. A combined electric and gas public utility
serving fewer than 3,000,000 but more than 500,000 retail
customers shall contribute $225,000 to the Consumer
Intervenor Compensation Fund within 60 days after
September 15, 2021 (the effective date of Public Act
102-662) this amendatory Act of the 102nd General
Assembly. A gas public utility with 1,500,000 or more
retail customers that is not a combined electric and gas
public utility shall contribute $225,000 to the Consumer
Intervenor Compensation Fund within 60 days after
September 15, 2021 (the effective date of Public Act
102-662) this amendatory Act of the 102nd General

SB3935 - 31 - LRB103 40383 LNS 72670 b
Assembly. A gas public utility with fewer than 1,500,000
retail customers but more than 300,000 retail customers
that is not a combined electric and gas public utility
shall contribute $80,000 to the Consumer Intervenor
Compensation Fund within 60 days after September 15, 2021
(the effective date of Public Act 102-662) this amendatory
Act of the 102nd General Assembly. A gas public utility
with fewer than 300,000 retail customers that is not a
combined electric and gas public utility shall contribute
$20,000 to the Consumer Intervenor Compensation Fund
within 60 days after September 15, 2021 (the effective
date of Public Act 102-662) this amendatory Act of the
102nd General Assembly. A combined electric and gas public
utility serving fewer than 500,000 retail customers shall
contribute $20,000 to the Consumer Intervenor Compensation
Fund within 60 days after September 15, 2021 (the
effective date of Public Act 102-662) this amendatory Act
of the 102nd General Assembly. A water or sewer public
utility serving more than 100,000 retail customers shall
contribute $80,000, and a water or sewer public utility
serving fewer than 100,000 but more than 10,000 retail
customers shall contribute $20,000.
(6)(A) Prior to the entry of a Final Order in a
docketed case, the Commission Administrator shall provide
a payment to a consumer interest representative that
demonstrates through a verified application for funding

SB3935 - 32 - LRB103 40383 LNS 72670 b
that the consumer interest representative's participation
or intervention without an award of fees or costs imposes
a significant financial hardship based on a schedule to be
developed by the Commission. The Administrator may require
verification of costs incurred, including statements of
hours spent, as a condition to paying the consumer
interest representative prior to the entry of a Final
Order in a docketed case.
(B) If the Commission adopts a material recommendation
related to a significant issue in the docket and
participation caused a significant financial cost hardship
to the participant, then the consumer interest
representative shall be allowed payment for some or all of
the consumer interest representative's reasonable
attorney's or advocate's fees, reasonable expert witness
fees, and other reasonable costs of preparation for and
participation in a hearing or proceeding. Expenses related
to travel or meals shall not be compensable.
(C) The consumer interest representative shall submit
an itemized request for compensation to the Consumer
Intervenor Compensation Fund, including the advocate's or
attorney's reasonable fee rate, the number of hours
expended, reasonable expert and expert witness fees, and
other reasonable costs for the preparation for and
participation in the hearing and briefing within 30 days
of the Commission's final order after denial or decision

SB3935 - 33 - LRB103 40383 LNS 72670 b
on rehearing, if any.
(7) Administration of the Fund.
(A) The Consumer Intervenor Compensation Fund is
created as a special fund in the State treasury. All
disbursements from the Consumer Intervenor Compensation
Fund shall be made only upon warrants of the Comptroller
drawn upon the Treasurer as custodian of the Fund upon
vouchers signed by the Executive Director of the
Commission or by the person or persons designated by the
Director for that purpose. The Comptroller is authorized
to draw the warrant upon vouchers so signed. The Treasurer
shall accept all warrants so signed and shall be released
from liability for all payments made on those warrants.
The Consumer Intervenor Compensation Fund shall be
administered by an Administrator that is a person or
entity that is independent of the Commission. The
administrator will be responsible for the prudent
management of the Consumer Intervenor Compensation Fund
and for recommendations for the award of consumer
intervenor compensation from the Consumer Intervenor
Compensation Fund. The Commission shall issue a request
for qualifications for a third-party program administrator
to administer the Consumer Intervenor Compensation Fund.
The third-party administrator shall be chosen through a
competitive bid process based on selection criteria and
requirements developed by the Commission. The Illinois

SB3935 - 34 - LRB103 40383 LNS 72670 b
Procurement Code does not apply to the hiring or payment
of the Administrator. All Administrator costs may be paid
for using monies from the Consumer Intervenor Compensation
Fund, but the Program Administrator shall strive to
minimize costs in the implementation of the program.
(B) The computation of compensation awarded from the
fund shall take into consideration the market rates paid
to persons of comparable training and experience who offer
similar services, but may not exceed the comparable market
rate for services paid by the public utility as part of its
rate case expense.
(C)(1) Recommendations on the award of compensation by
the administrator shall include consideration of whether
the participation raised Commission adopted a material
recommendation related to a significant issue in the
docket and whether participation caused a significant
financial cost hardship to the participant and the payment
of compensation is fair, just, and reasonable.
(2) Recommendations on the award of compensation by
the administrator shall be submitted to the Commission for
approval. Unless the Commission initiates an investigation
within 45 days after the notice to the Commission, the
award of compensation shall be allowed 45 days after
notice to the Commission. Such notice shall be given by
filing with the Commission on the Commission's e-docket
system, and keeping open for public inspection the award

SB3935 - 35 - LRB103 40383 LNS 72670 b
for compensation proposed by the Administrator. The
Commission shall have power, and it is hereby given
authority, either upon complaint or upon its own
initiative without complaint, at once, and if it so
orders, without answer or other formal pleadings, but upon
reasonable notice, to enter upon a hearing concerning the
propriety of the award.
(c) The Commission may adopt rules to implement this
Section.
(Source: P.A. 102-662, eff. 9-15-21; revised 1-20-24.)
(220 ILCS 5/9-235 new)
Sec. 9-235. Tariffed gas main and gas service extension
provisions. No later than 60 days after the effective date of
this amendatory Act of the 103rd General Assembly, the
Commission shall initiate a docketed rulemaking reviewing each
gas public utility tariff that provides for gas main and gas
service extensions without additional charge to new customers
in excess of the default extensions without charge as
specified in 83 Ill. Adm. Code 501. The focus of the rulemaking
shall be to modify each gas utility's gas main and gas service
extension tariff to align with the provisions set forth in
Section 9-228.5.
(220 ILCS 5/9-241) (from Ch. 111 2/3, par. 9-241)
Sec. 9-241. No public utility shall, as to rates or other

SB3935 - 36 - LRB103 40383 LNS 72670 b
charges, services, facilities, or in other respect, make or
grant any preference or advantage to any corporation or person
or subject any corporation or person to any prejudice or
disadvantage. No public utility shall establish or maintain
any unreasonable difference as to rates or other charges,
services, facilities, or in any other respect, either as
between localities or as between classes of service.
However, nothing in this Section shall be construed as
limiting the authority of the Commission to permit the
establishment of economic development rates as incentives to
economic development either in enterprise zones as designated
by the State of Illinois or in other areas of a utility's
service area. Such rates should be available to existing
businesses which demonstrate an increase to existing load as
well as new businesses which create new load for a utility so
as to create a more balanced utilization of generating
capacity. The Commission shall ensure that such rates are
established at a level which provides a net benefit to
customers within a public utility's service area.
On or before January 1, 2025 2023, the Commission shall
conduct a comprehensive study to assess whether low-income
discount rates for electric and natural gas residential
customers are appropriate and the potential design and
implementation of any such rates. The Commission shall include
its findings, together with the appropriate recommendations,
in a report to be provided to the General Assembly. Upon

SB3935 - 37 - LRB103 40383 LNS 72670 b
completion of the study, the Commission shall have the
authority to permit or require electric and natural gas
utilities to file a tariff establishing low-income discount
rates.
Such study shall assess, at a minimum, the following:
(1) customer eligibility requirements, including
income-based eligibility and eligibility based on
participation in or eligibility for certain public
assistance programs;
(2) appropriate rate structures, including
consideration of tiered discounts for different income
levels;
(3) appropriate recovery mechanisms, including the
consideration of volumetric charges and customer charges;
(4) appropriate verification mechanisms;
(5) measures to ensure customer confidentiality and
data safeguards;
(6) outreach and consumer education procedures; and
(7) the impact that a low-income discount rate would
have on the affordability of delivery service to
low-income customers and customers overall.
On or before January 1, 2026, the Commission shall begin a
docketed rulemaking process to implement low-income discount
rates for electric and natural gas residential customers,
incorporating the recommendations of the report required by
this Section, released by the Commission in December 2022 and

SB3935 - 38 - LRB103 40383 LNS 72670 b
titled the "Illinois Commerce Commission Low-Income Discount
Rate Study Report to the Illinois General Assembly".
The Commission shall adopt rules requiring utility
companies to produce information, in the form of a mailing,
and other approved methods of distribution, to its consumers,
to inform the consumers of available rebates, discounts,
credits, and other cost-saving mechanisms that can help them
lower their monthly utility bills, and send out such
information semi-annually, unless otherwise provided by this
Article.
Prior to October 1, 1989, no public utility providing
electrical or gas service shall consider the use of solar or
other nonconventional renewable sources of energy by a
customer as a basis for establishing higher rates or charges
for any service or commodity sold to such customer; nor shall a
public utility subject any customer utilizing such energy
source or sources to any other prejudice or disadvantage on
account of such use. No public utility shall without the
consent of the Commission, charge or receive any greater
compensation in the aggregate for a lesser commodity, product,
or service than for a greater commodity, product, or service
of like character.
The Commission, in order to expedite the determination of
rate questions, or to avoid unnecessary and unreasonable
expense, or to avoid unjust or unreasonable discrimination
between classes of customers, or, whenever in the judgment of

SB3935 - 39 - LRB103 40383 LNS 72670 b
the Commission public interest so requires, may, for rate
making and accounting purposes, or either of them, consider
one or more municipalities either with or without the adjacent
or intervening rural territory as a regional unit where the
same public utility serves such region under substantially
similar conditions, and may within such region prescribe
uniform rates for consumers or patrons of the same class.
Any public utility, with the consent and approval of the
Commission, may as a basis for the determination of the
charges made by it classify its service according to the
amount used, the time when used, the purpose for which used,
and other relevant factors.
(Source: P.A. 102-662, eff. 9-15-21.)
(220 ILCS 5/9-254 new)
Sec. 9-254. Independent gas system assessment.
(a) The General Assembly finds that an independent audit
of the current state of the gas distribution system, and of the
expenditures made since 2012, will need to be made.
Specifically, the General Assembly finds:
(1) Pursuant to 2013 legislation establishing the
qualifying infrastructure plant charge, gas utilities in
this State that serve over 700,000 retail customers have
spent significant amounts of ratepayer dollars on system
investments purporting to refurbish, rebuild, modernize,
and expand gas system infrastructure.

SB3935 - 40 - LRB103 40383 LNS 72670 b
(2) The qualifying infrastructure plant charge is set
to conclude at its statutory deadline of December 31,
2023, and it is in the interest of this State and in the
interest of gas utilities' customers to understand the
benefits of these investments to the gas system and to
customers and to evaluate the current condition of the gas
system.
(3) It is also necessary for gas utilities, the
Commission, and stakeholders to have an independently
verified set of data to draw upon for future gas rate cases
and any other proposed gas system spending.
(4) Meeting the State's climate goals will require an
ordered transition away from gas, and toward electric
heating and appliances, for all or nearly all buildings,
and planning this transition will require a thorough
understanding of the current state of the gas system.
(5) The Commission has authority to order and
implement the requirements of this Section under Section
8-102.
(b) Terms used in this Section shall have the meanings
given to them in Section 19-105.
(c) Within 30 days after the effective date of this
amendatory Act of the 103rd General Assembly, the Commission
shall issue an order initiating an audit of each gas utility
serving over 700,000 retail customers in the State, which
shall examine the following:

SB3935 - 41 - LRB103 40383 LNS 72670 b
(1) An assessment of the gas distribution system, as
described in paragraph (2) of subsection (a). The
Commission shall have the authority to require additional
items that it deems necessary.
(2) An analysis of the utility's capital projects
placed into service in the preceding 10 years, including,
but not limited to, an assessment of the value and safety
impact of pipe replacement, increased system pressure, and
pipe capacity expansion.
(3) An assessment of the utility's emissions
reductions to date and what preparations the utility has
made to meet the terms of the Paris Climate Agreement,
with which it is the policy of the State to comply.
(4) The creation of a visual, geographic map of the
gas system displaying the level of risk of various
pipelines and showing the areas where pipelines have
already been replaced.
(5) The identifying areas of the gas system where the
cost to replace pipeline is likely to be high, including,
but not limited to, identifying places where
decommissioning a portion of the gas system and planning
to provide for electric heating and appliance needs in
that area may be preferable, considering the costs and
benefits for affordability, health, and climate.
(d) It is contemplated that the auditor will use materials
filed with the Commission by the utilities with respect to the

SB3935 - 42 - LRB103 40383 LNS 72670 b
auditor's expenditures in the preceding 10 years; however, the
auditor may also, with Commission approval, assess other
information deemed necessary to make its report. The results
of the audit described in this Section shall be reflected in a
report delivered to the Commission, describing the information
specified in this Section. The report is to be delivered no
later than 180 days after the Commission enters its order
under subsection (c). It is understood that any public report
may not contain items that are confidential or proprietary.
(e) The costs of a gas utility's audit described in this
Section shall not exceed $500,000 and shall be paid for by the
electric utility that is the subject of the audit. Such costs
shall be a recoverable expense.
(f) The Commission shall have the authority to retain the
services of an auditor to assist with the distribution
planning process, as well as in docketed proceedings. Such
expenses for these activities shall also be borne by the
Commission.
(220 ILCS 5/9-255 new)
Sec. 9-255. Phase-out of gas fixed changes. Beginning
January 1, 2035, a public utility providing gas service may
not assess fixed charges as part of its rates. Beginning
January 1, 2030, a public utility providing gas service must
limit, for each customer class, any fixed charges in its rates
to no greater than 50% of the average of monthly fixed charges

SB3935 - 43 - LRB103 40383 LNS 72670 b
for that customer class during the period January 1, 2019 to
December 31, 2021.
(220 ILCS 5/16-111.10)
Sec. 16-111.10. Equitable Energy Upgrade Program.
(a) The General Assembly finds and declares that Illinois
homes and businesses can contribute to the creation of a clean
energy economy, conservation of natural resources, and
reliability of the electricity grid through the installation
of cost-effective renewable energy generation, energy
efficiency and demand response equipment, and energy storage
systems. Further, a large portion of Illinois residents and
businesses that would benefit from the installation of energy
efficiency, storage, and renewable energy generation systems
are unable to purchase systems due to capital or credit
barriers. This State should pursue options to enable many more
Illinoisans to access the health, environmental, and financial
benefits of new clean energy technology.
(b) As used in this Section:
"Commission" means the Illinois Commerce Commission.
"Energy project" means renewable energy generation
systems, including solar projects, energy efficiency upgrades,
decarbonization and electrification measures, energy storage
systems, demand response equipment, or any combination
thereof.
"Fund" means the Clean Energy Jobs and Justice Fund

SB3935 - 44 - LRB103 40383 LNS 72670 b
established in the Clean Energy Jobs and Justice Fund Act.
"Program" means the Equitable Energy Upgrade Program
established under subsection (c).
"Utility" means electric public utilities providing
services to 500,000 or more customers under this Act.
(c) The Commission shall open an investigation into and
direct all electric and gas public utilities in this State to
adopt an Equitable Energy Upgrade Program that permits
customers to finance the construction of energy projects
through an optional tariff payable directly through their
utility bill, modeled after the Pay As You Save system,
developed by the Energy Efficiency Institute. The Program
model shall enable utilities to offer to make investments in
energy projects to customer properties with low-cost capital
and use an opt-in tariff to recover the costs. The Program
shall be designed to provide customers with immediate
financial savings if they choose to participate. The Program
shall allow residential electric and gas utility customers
that own the property, or renters that have permission of the
property owner, for which they subscribe to utility service to
agree to the installation of an energy project. The Program
shall ensure:
(1) eligible projects do not require upfront payments;
however, customers may pay down the costs for projects
with a payment to the installing contractor in order to
qualify projects that would otherwise require upfront

SB3935 - 45 - LRB103 40383 LNS 72670 b
payments;
(2) eligible projects have sufficient estimated
savings and estimated life span to produce significant,
immediate net savings;
(3) participants shall agree the utility can recover
its costs for the projects at their location by paying for
the project through an optional tariff directly through
the participant's utility electricity bill, allowing
participants to benefit from installation of energy
projects without traditional loans;
(4) accessibility by lower-income residents and
environmental justice community residents; and
(5) the utility must ensure that customers who are
interested in participating are notified that if they are
income qualified, they may also be eligible for the
Percentage of Income Payment Plan program and free energy
improvements through other programs and facilitate
interested customers' enrollment in those programs; and
provide contact information.
(6) coordination with existing utility, state, and
federal energy efficiency, solar, electrification, and
other energy savings funding and implementation programs.
(d) The Commission shall establish Program guidelines with
the anticipated schedule of Program availability as follows:
(1) Year 1: Beginning in the first year of operation,
each utility with greater than 100,000 retail customers is

SB3935 - 46 - LRB103 40383 LNS 72670 b
required to obtain low-cost capital of at least
$20,000,000 annually for investments in energy projects.
(2) Year 2: Beginning in the second year of operation,
each utility with greater than 100,000 retail customers is
required to obtain low-cost capital for investments in
energy projects of at least $40,000,000 annually.
(3) Year 3: Beginning in the third year of operation,
each utility with greater than 100,000 retail customers is
required to obtain low-cost capital for investments in as
many systems as customers demand, subject to available
capital provided by the utility, State, or other lenders.
(e) In the design of the Program, the Commission shall:
(1) Within 90 days after the effective date of this
amendatory Act of the 103rd General Assembly, begin a
process to update the Program guidelines for
implementation of the Program. Any such process shall
allow for participation from interested stakeholders.
Within 270 days after the effective date of this
amendatory Act of the 102nd General Assembly, convene a
workshop during which interested participants may discuss
issues and submit comments related to the Program.
(2) Establish Program guidelines for implementation of
the Program in accordance with the Pay As You Save
Essential Elements and Minimum Program Requirements that
electric and gas utilities must abide by when implementing
the Program. Program guidelines established by the

SB3935 - 47 - LRB103 40383 LNS 72670 b
Commission shall include the following elements:
(A) The Commission shall establish conditions
under which utilities secure capital to fund the
energy projects. The Commission may allow utilities to
raise capital independently, work with third-party
lenders to secure the capital for participants, or a
combination thereof. Any process the Commission
approves must use a market mechanism to identify the
least costly sources of capital funds so as to pass on
maximum savings to participants. The State or the
Clean Energy Jobs and Justice Fund may also provide
capital for the Program.
(B) Customer protection guidelines should be
designed consistent with Pay As You Save Essential
Elements and Minimum Program Requirements.
(C) The Commission shall establish conditions by
which utilities may connect Program participants to
energy project vendors. In setting conditions for
connection, the Commission may prioritize vendors that
have a history of good relations with the State,
including vendors that have hired participants from
State-created job training programs.
(D) Guarantee that conservative estimates of
financial savings will immediately and significantly
exceed estimated Program costs for Program
participants.

SB3935 - 48 - LRB103 40383 LNS 72670 b
(E) Require any customer data sharing between
electric and gas utilities and third-party vendors
needed to evaluate the energy and demand saving and
energy services revenue opportunities of all customers
and otherwise facilitate a positive customer
experience. Such data sharing may include but shall
not be limited to historical and ongoing customer
usage data and billing rates. The Commission may allow
utilities to recover the costs associated with data
sharing from all customers.
(F) Notwithstanding the method used to estimate
site-specific energy savings or measure direct energy
savings for Program participants, the utility will
report aggregate savings to the Commission for
regulatory filings in the same or a similar manner as
other energy efficiency or clean energy programs.
(f) Within 90 120 days after the Commission releases the
Program conditions established under this Section, each
utility subject to the requirements of this Section shall
submit an informational filing to the Commission that
describes its plan for implementing the provisions of this
Section. If the Commission finds that the submission does not
properly comply with the statutory or regulatory requirements
of the Program, the Commission may require that the utility
make modifications to its filing.
(g) An independent process evaluation shall be conducted

SB3935 - 49 - LRB103 40383 LNS 72670 b
after one year of the Program's operation. An independent
impact evaluation shall be conducted after 3 years of
operation, excluding one-time startup costs and results from
the first 12 months of the Program. The Commission shall
convene an advisory council of stakeholders, including
representation of low-income and environmental justice
community members to make recommendations in response to the
findings of the independent evaluation.
(h) The Program shall be designed using the Pay As You Save
system guidelines to be cost-effective for customers. Only
projects that are deemed to be cost-effective and can be
reasonably expected to ensure customer savings are eligible
for funding through the Program, unless, as specified in
paragraph (1) of subsection (c), customers able to make
upfront copayments to installers buy down the cost of projects
so it can be deemed cost-effective.
(i) Eligible customers must be:
(1) property renters with permission of the property
owner; or
(2) property owners.
(j) The calculation of project cost-effectiveness shall be
based upon the Pay As You Save system requirements.
(1) The calculation of cost-effectiveness must be
conducted by an objective process approved by the
Commission and based on rates in effect at the time of
installation.

SB3935 - 50 - LRB103 40383 LNS 72670 b
(2) A project shall be considered cost-effective only
if it is estimated to produce significant immediate net
savings, not counting copayments voluntarily made by
customers. The Commission may establish guidelines by
which this required savings is estimated.
(3) Net savings shall include savings across all fuel
sources, not limited to electricity and natural gas.
(4) The calculation of project cost-effectiveness
shall not exclude projects that:
(A) would raise customer costs in a particular
month so long as customers see annual project savings;
or
(B) increase electric load and accompanying costs
when a heating electrification project results in the
ability to cool part or all of a home that was not
previously cooled. In such cases, the increased
electricity consumption associated with that added
cooling shall not be included in calculations of net
savings. Extreme heat poses an increasing risk to
Illinois communities. As such, it is in the public
interest to mitigate that risk through the addition of
building cooling systems.
However, any expected increase in electric load and
customer costs should be clearly communicated to impacted
customers, along with any options for mitigating that
increase.

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(k) The Program should be modeled after the Pay As You Save
system, by which Program participants finance energy projects
using the savings that the energy project creates with a
tariffed on-bill program. Eligible projects shall not create
personal debt for the customer, result in a lien in the event
of nonpayment, or require customers to pay monthly charges for
any upgrade that fails and is not repaired within 21 days. The
utility may restart charges once the upgrade is repaired and
functioning and extend the term of payments to recover its
costs for missed payments and deferred cost recovery,
providing the upgrade continues to function.
(l) Any energy project that is defective or damaged due to
no fault of the participant must be either replaced or
repaired with parts that meet industry standards at the cost
of the utility or vendor, as specified by the Commission, and
charges shall be suspended until repairs or replacement is
completed. The Commission may establish, increase, or replace
the requirements imposed in this subsection. The Commission
may determine that this responsibility is best handled by
participating project vendors in the form of insurance,
contractual guarantees, or other mechanisms, and issue rules
detailing this requirement. Customers shall not be charged
monthly payments for upgrades that are no longer functioning.
(m) In the event of nonpayment, the remaining balance due
to pay off the system shall remain with the utility meter at an
upgraded location. The Commission shall establish conditions

SB3935 - 52 - LRB103 40383 LNS 72670 b
subject to this constraint in the event of nonpayment that are
in accordance with the Pay As You Save system.
(n) The utility shall make every effort to ensure that
customers who are income-qualified for free energy upgrade
programs take full advantage of those programs first before
using the Equitable Energy Upgrade Program. If the demand by
utility customers exceeds the Program capital supply in a
given year, utilities shall ensure that 50% of participants
are:
(1) customers in neighborhoods where a majority of
households make 150% or less of area median income; or
(2) residents of environmental justice communities.
(o) Utilities shall endeavor to inform customers about the
availability of the Program, their potential eligibility for
participation in the Program, and whether they are likely to
save money on the basis of an estimate conducted using
variables consistent with the Program that the utility has at
its disposal. The Commission may establish guidelines by which
utilities must abide by this directive and alternatives if the
Commission deems utilities' efforts as inadequate.
(p) Subject to Commission specifications under subsection
(c), each utility shall work with certified project vendors
selected using a request for proposals process to establish
the terms and processes under which a utility can install
eligible renewable energy generation and energy storage
systems using the capital to fit the Equitable Energy Upgrade

SB3935 - 53 - LRB103 40383 LNS 72670 b
model. The utility certified project vendor shall explain and
offer the approved upgrades to customers and shall assist
customers in applying for financing through the Program. As
part of the process, utilities vendors shall also provide
participants with information about any other relevant
incentives that may be available and customer service
regarding the effective use of the upgrades.
Nothing shall preclude gas and electric utilities that
have overlapping service territories from jointly implementing
and delivering the Program.
(q) A participating An electric utility shall recover all
of the prudently incurred costs of offering a program approved
by the Commission under this Section. For investor-owned
utilities, shareholder incentives will be proportional to
meeting Commission approved thresholds for the number of
customers served and the amount of its investments in those
locations.
(r) The Commission shall adopt all rules necessary for the
administration of this Section.
(Source: P.A. 102-662, eff. 9-15-21.)
(220 ILCS 5/Art. XXIII heading new)
ARTICLE XXIII. CLEAN BUILDING HEATING LAW
(220 ILCS 5/23-101 new)
Sec. 23-101. Short title. This Article may be cited as the

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Clean Building Heating Law. References in this Article to
"this Act" mean this Article.
(220 ILCS 5/23-102 new)
Sec. 23-102. Findings. The General Assembly finds that the
adoption and use of clean, zero-pollution space and water
heating appliances in residential and commercial buildings
would benefit the State by (i) protecting the air that
Illinoisans breathe through reducing unhealthy levels of smog
and ozone, (ii) minimizing health risks associated with air
pollution, including respiratory ailments, cardiovascular
illnesses, and premature death, which are linked to exposure
to fine particulate matter and nitrogen dioxide, (iii)
assisting the State in achieving attainment of federal
National Ambient Air Quality Standards for ozone and meeting
the State's obligations under the federal Regional Haze Rule,
(iv) reducing climate pollution in service to the State's
net-zero greenhouse gas goals, and (v) contributing to the
State's economy through building and mobilizing a trained and
competitive workforce to install and maintain newly purchased
appliances.
(220 ILCS 5/23-103 new)
Sec. 23-103. Definitions. As used in this Article:
"Annual fuel utilization efficiency" or "AFUE" means the
efficiency as defined by Section 4.2.35 of the Code of Federal

SB3935 - 55 - LRB103 40383 LNS 72670 b
Regulations, Title 10, Part 430, Subpart B, Appendix N.
"Boiler" or "water heater" means a product used to heat
water or produce steam and that is not exclusively used to
produce electricity for sale. "Boiler" does not include any
waste heat recovery boiler that is used to recover sensible
heat from the exhaust of a combustion turbine or any unfired
waste heat recovery boiler that is used to recover sensible
heat from the exhaust of any combustion equipment.
"Btu" means British thermal unit, which is a scientific
unit of measurement equal to the quantity of heat required to
raise the temperature of one pound of water by one degree
Fahrenheit at approximately 60 degrees Fahrenheit.
"Director" means the Director of the Environmental
Protection Agency or the Director's designee.
"Fan-type central furnace" means a self-contained space
heater providing for circulation of heated air at pressures
other than atmospheric through ducts more than 25 cm (10 in) in
length.
"Furnace" means a product designed to be a source of
interior space heating.
"Heat input" means the heat released by the combustion of
fuels in a unit based on the higher heating value of fuel,
excluding the enthalpy of incoming combustion air.
"Heat output" means the product obtained by multiplying
the recovery efficiency, as defined by Section 6.1.3 of the
Code of Federal Regulation, Title 10, Part 430, Subpart B,

SB3935 - 56 - LRB103 40383 LNS 72670 b
Appendix E, by the input rating of the unit.
"NOx" and "NOx emissions" means the sum of nitric oxide and
nitrogen dioxide in the unit's flue gas, collectively
expressed as nitrogen dioxide.
"Rated heat input capacity" means the heat input capacity
specified on the nameplate of the combustion unit. If a unit
has been altered or modified such that its maximum heat input
is different from the heat input capacity specified on the
nameplate, the new maximum heat input is the unit's rated heat
input capacity.
"Useful heat delivered to the heated space" means the
annual fuel utilization efficiency (expressed as a fraction)
multiplied by the heat input.
(220 ILCS 5/23-104 new)
Sec. 23-104. Applicability. This Article applies to any
person who sells, installs, offers for sale, leases, or offers
for lease the following products in this State, as well as any
manufacturer who intends to sell or distribute for sale or
installation the following products in this State: (i) new
water heaters and boilers with a rated heat input capacity of
2,000,000 Btus per hour or less; and (ii) new furnaces with a
rated heat input capacity of 175,000 Btus per hour or less,
and, in the case of combination heating and cooling units, a
cooling rate of 65,000 Btus per hour or less.

SB3935 - 57 - LRB103 40383 LNS 72670 b
(220 ILCS 5/23-105 new)
Sec. 23-105. Emissions standards for new building heating
and water heating appliances.
(a) On and after January 1, 2025, a person shall not sell,
install, offer for sale, lease, or offer for lease, and a
manufacturer shall not sell or distribute for sale or
installation, the following new products in this State:
(1) water heaters with a rated heat input capacity of
75,000 Btus per hour or less, and any water heaters with
power assist, that emit more than 10 nanograms of NOx per
joule of heat output;
(2) water heaters and boilers with a rated heat input
capacity from 75,001 to 2,000,000 Btus per hour,
inclusive, that emit more than 14 nanograms of NOx per
joule of heat output; or
(3) fan-type central furnaces with a rated heat input
capacity of 175,000 Btus per hour or less that emit more
than 14 nanograms of NOx per joule of heat output.
(b) On and after January 1, 2030, a person shall not sell,
install, offer for sale, lease, or offer for lease, and a
manufacturer shall not sell or distribute for sale or
installation, the following new products in this State:
(1) water heaters and boilers with a rated heat input
capacity of 2,000,000 Btus per hour or less that emit more
than 0.0 nanograms of NOx per joule of heat output; or
(2) furnaces with a rated heat input capacity of

SB3935 - 58 - LRB103 40383 LNS 72670 b
175,000 Btus per hour or less that emit more than 0.0
nanograms of NOx per joule of heat output. This includes
non-central installations, such as wall furnaces, as well
as units installed in non-residential applications.
(220 ILCS 5/23-106 new)
Sec. 23-106. Certification and identification of compliant
products.
(a) The manufacturer shall obtain confirmation from an
independent testing laboratory that each water heater, boiler,
or furnace model that is subject to the requirements of this
Article and that the manufacturer intends to sell or
distribute for sale or installation into the State has been
tested in accordance with the procedures in Section 23-107.
This confirmation shall include the following statement signed
and dated by the person responsible for the report at the
independent testing laboratory: "Based on my inquiry of those
individuals with primary responsibility for obtaining the
information, I certify that the statements and information in
this source test report are to the best of my knowledge and
belief true, accurate, and complete. I am aware that there are
significant civil and criminal penalties for submitting false
statements or information or omitting required statements or
information, including the possibility of fine or
imprisonment."
(b) For each such product model, the manufacturer shall

SB3935 - 59 - LRB103 40383 LNS 72670 b
submit to the Director either of the following:
(1) A statement that each product model meets the
emission standards set forth in Section 23-105. The
statement must:
(A) provide the following general information:
name and address of manufacturer, brand name, trade
name, model number, and rated heat input capacity;
(B) provide a description of the model being
certified;
(C) include a complete certification source test
report demonstrating that the product model was tested
in accordance with procedures in Section 23-107 and a
written statement that the model complies with Section
23-105;
(D) include the following statement signed and
dated by a managerial level employee responsible for
the certification request at the manufacturer: "Based
on my inquiry of those individuals with primary
responsibility for obtaining the information, I
certify that the statements and information in this
request for certification are to the best of my
knowledge and belief true, accurate, and complete. I
am aware that there are significant civil and criminal
penalties for submitting false statements or
information or omitting required statements or
information, including the possibility of fine or

SB3935 - 60 - LRB103 40383 LNS 72670 b
imprisonment.";
(E) be submitted to the Director no more than 90
days after the date of the emissions compliance test
conducted in accordance with Section 23-107; and
(F) be submitted to the Director no less than 90
days before the intention to sell or distribute a new
product model within the State or no less than 90 days
before the dates described in Section 23-105.
(2) An approved South Coast Air Quality Management
District (SCAQMD) certification for each product model
issued pursuant to SCAQMD Rules 1111, 1121, or 1146.2, to
demonstrate compliance with subsection (a) of Section
23-105.
(c) The manufacturer shall display the model number and
the certification status of a product complying with this
Article on the shipping carton and rating plate of each unit.
(220 ILCS 5/23-107 new)
Sec. 23-107. Determination of emissions. Emissions from
products subject to the requirements of this Article shall be
tested in accordance with the following provisions:
(1) Each product model shall receive certification
based on emission tests of a randomly selected unit of
that model.
(2) The measurement of NOx emissions shall be
conducted in accordance with EPA Reference Method 7 (40

SB3935 - 61 - LRB103 40383 LNS 72670 b
CFR Part 60, Appendix A), Test Methods 7A-7E.
(3) Each tested water heater shall be operated in
accordance with Section 2.4 of American National Standards
ANSI Z21.10.1-1990 at normal test pressure, input rates,
and with a 5-foot exhaust stack installed during the NOx
emissions tests.
(4) Each tested furnace shall be operated in
accordance with the procedures specified in Section 3.1 of
the Code of Federal Regulations, Title 10, Part 430,
Subpart B, Appendix N.
(5) One of the 2 following formulas shall be used to
calculate the NOx emission rate in nanograms of NOx per
joule of heat output:
N=4.566×104PUHCE
or
N=3.655×1010P20.9-YZE
Where:
N = Calculated mass emissions of NOx per unit of useful
heat (nanograms per joule of useful heat delivered to the
heated space).
P = Measured concentration of NOx in flue gas (parts
per million by volume).
Y = Measured concentration of O2 in flue gas
(percentage by volume).
Z = Gross heating value of gas (joules per cubic meter
at 0.0 degrees Celsius, 1 atm).

SB3935 - 62 - LRB103 40383 LNS 72670 b
E = AFUE (percentage), as defined in Section 23-103.
U = Concentration of CO2 in water-free flue gas for
stoichiometric combustion (percentage by volume).
H = Gross heating value of the fuel (Btu per cubic
foot, 60 degrees Fahrenheit, 30-in Hg).
C = Measured concentration of CO2 in flue gas
(percentage by volume).
(220 ILCS 5/23-108 new)
Sec. 23-108. Enforcement and penalties.
(a) The Director may require the emission test results to
be provided when deemed necessary to verify compliance and may
periodically conduct on-site inspections and tests as are
deemed necessary to ensure compliance. Such verifications
shall be conducted at least once within 2 years of the date
described in subsection (a) of Section 23-105 and again at
least once every 5 years thereafter.
(b) If the Director determines that a manufacturer,
distributor, retailer, installer, or other person is in
violation of any provision of this Act, that violation is
subject to fines and penalties according to the Director's
authority.
(c) For purposes of this Section, fines or penalties may
be levied against an installer who installs a product covered
by this Article in violation of this Article, however they
shall not be levied against such installer's nonmanagerial

SB3935 - 63 - LRB103 40383 LNS 72670 b
employees, if any, who perform such installation.
(d) Fines and penalties collected under this Section may
be used for supplemental environmental programs to offset the
cost of furnace and water heater replacements in low-income
and moderate-income households or households in environmental
justice communities, according to the Director's authority to
use fines and penalties.
(e) On or before the date described in subsection (a) of
Section 23-105, the Director shall establish a process whereby
individuals may anonymously report potential violations of
this Act. The Director shall investigate any such reported
potential violations.
(220 ILCS 5/23-109 new)
Sec. 23-109. Additional regulation. The Director may adopt
rules as necessary to ensure the proper implementation and
enforcement of this Article.
(220 ILCS 5/23-111 new)
Sec. 23-111. Revisions to building codes to comply with
greenhouse gas emissions reduction requirements.
(a) Beginning no later than July 1, 2025, to support the
State's achievement of its greenhouse gas emissions
requirements and to improve public health outcomes, the State
building code shall require that the site energy use intensity
between minimally compliant but otherwise similar buildings of

SB3935 - 64 - LRB103 40383 LNS 72670 b
differing fuel types shall not be significantly unequal in all
new construction statewide. Beginning no later than July 1,
2025, to the fullest extent feasible, the building code shall
require that any area or service within a project where
infrastructure, building systems, or equipment used for the
combustion of fossil fuels are installed must be all-electric
ready.
(b) Requirements for all-electric ready new construction
for residential buildings shall include:
(1) a heat pump space heater ready. Systems using gas
or propane furnaces to serve individual dwelling units
shall include the following:
(A) a dedicated 240 volt branch circuit wiring
shall be installed within 3 feet from the furnace and
accessible to the furnace with no obstructions. The
branch circuit conductors shall be rated at 30 amps
minimum. The blank cover shall be identified as "240V
ready"; and
(B) the main electrical service panel shall have a
reserved space to allow for the installation of a
double pole circuit breaker for a future heat pump
space heater installation. The reserved space shall be
permanently marked as "For Future 240V use";
(2) an electric cooktop ready. Systems using gas or
propane cooktops to serve individual dwelling units shall
include the following:

SB3935 - 65 - LRB103 40383 LNS 72670 b
(A) a dedicated 240 volt branch circuit wiring
shall be installed within 3 feet from the cooktop and
accessible to the cooktop with no obstructions. The
branch circuit conductors shall be rated at 50 amps
minimum. The blank cover shall be identified as "240V
ready"; and
(B) the main electrical service panel shall have a
reserved space to allow for the installation of a
double pole circuit breaker for a future electric
cooktop installation. The reserved space shall be
permanently marked as "For Future 240V Use";
(3) an electric clothes dryer ready. Clothes dryer
locations with gas or propane plumbing shall include the
following:
(A) systems serving individual dwelling units
shall include:
(i) a dedicated 240 volt branch circuit wiring
shall be installed within 3 feet from the clothes
dryer location and accessible to the clothes dryer
location with no obstructions. The branch circuit
conductors shall be rated at 30 amps minimum. The
blank cover shall be identified as "240V ready";
and
(ii) the main electrical service panel shall
have a reserved space to allow for the
installation of a double pole circuit breaker for

SB3935 - 66 - LRB103 40383 LNS 72670 b
a future electric clothes dryer installation. The
reserved space shall be permanently marked as "For
Future 240V Use"; and
(B) systems in common use areas shall include
conductors or raceway shall be installed with
termination points at the main electrical panel, via
subpanels if applicable, to a location no more than 3
feet from each gas outlet or a designated location of
future electric replacement equipment. Both ends of
the conductors or raceway shall be labeled "Future
240V Use". The conductors or raceway and any
intervening subpanels, panelboards, switchboards, and
busbars shall be sized to meet the future electric
power requirements, at the service voltage to the
point at which the conductors serving the building
connect to the utility distribution system. The
capacity requirements may be adjusted for demand
factors. Gas flow rates shall be determined in
accordance with State plumbing code. Capacity shall be
one of the following:
(i) 0.24 amps at 208/240 volts per clothes
dryer;
(ii) 2.6 kVA for each 10,000 Btu per hour of
rated gas input or gas pipe capacity; or
(iii) the electrical power required to provide
equivalent functionality of the gas-powered

SB3935 - 67 - LRB103 40383 LNS 72670 b
equipment as calculated and documented by the
responsible person associated with the project;
and
(4) a heat pump water heater ready. Systems using gas
or propane service water heaters to serve individual
dwelling units shall include the following:
(A) a dedicated 240 volt branch circuit wiring
shall be installed within 3 feet from the furnace and
accessible to the furnace with no obstructions. The
branch circuit conductors shall be rated at 30 amps
minimum. The blank cover shall be identified as "240V
ready";
(B) the main electrical service panel shall have a
reserved space to allow for the installation of a
double pole circuit breaker for a future heat pump
water heater installation. The reserved space shall be
permanently marked as "For Future 240V use"; and
(C) an indoor space that is at least 3 feet by 3
feet by 7 feet high shall be available surrounding or
within 3 feet of the installed water heater, except
where a tankless water heater is installed.
(c) Newly constructed commercial buildings shall meet the
requirements of Appendix CH of the 2024 version of the
International Energy Conservation Code.
(d) Beginning no later than January 1, 2026, the State
building code must include a prescriptive requirement for

SB3935 - 68 - LRB103 40383 LNS 72670 b
central air conditioning systems that are being removed due to
equipment failure or as part of a larger renovation project,
that they must be replaced with a heat pump capable of both
heating and cooling in accordance with the following
requirements:
(1) Requirements for residential buildings:
(A) If an existing central air conditioner is
removed from a natural gas, propane, or fuel oil
forced air system that is to remain in place, the
replacement heat pump must be sized to meet the
cooling load of the home with controls allowing the
heat pump to provide the primary heating and furnace
as "backup" heating.
(B) If an existing central air conditioner is
connected to a natural gas, propane, or fuel oil
forced air system that is to also be replaced, the
replacement heat pump must be sized to meet all loads
of the home. Exceptions may be given for replacement
systems that require the main electrical service panel
to be upgraded.
(C) If an existing central air conditioner and its
accompanying ductwork are replaced, the replacement
heat pump must be sized to meet all loads of the home.
(2) Requirements for commercial buildings: If an
existing rooftop packaged unit is removed, the replacement
unit must be a heat pump. This requirement only applies to

SB3935 - 69 - LRB103 40383 LNS 72670 b
existing rooftop packaged units that are 65,000 Btu/h or
less. Exceptions may be given for replacement systems that
require the main electrical service panel to be upgraded.
(220 ILCS 5/23-112 new)
Sec. 23-112. Revisions to gas service line extensions to
comply with greenhouse gas emissions reduction requirements.
(a) To support the State's achievement of its greenhouse
gas emissions requirements, and to improve public health
outcomes, no gas company may furnish or supply gas service,
instrumentalities, and facilities to any commercial or
residential location that did not receive gas service or did
not file applications for gas service on or before June 30,
2027.
(b) The following locations are exempt from the
requirements of subsection (a):
(1) buildings that require gas systems for emergency
backup power; and
(2) buildings specifically designated for occupancy by
a commercial food establishment, laboratory, laundromat,
hospital, or crematorium.
(220 ILCS 5/23-301 new)
Sec. 23-301. Severability. If any provision of this
Article or the application of this Article to any person or
circumstance is held invalid, such invalidity does not affect

SB3935 - 70 - LRB103 40383 LNS 72670 b
other provisions or applications of the Article that can be
given effect without the invalid provision or application, and
to this end the provisions of this Article are declared to be
severable.
(220 ILCS 5/Art. XXIV heading new)
ARTICLE XXIV. 2050 HEAT DECARBONIZATION STANDARD
(220 ILCS 5/24-101 new)
Sec. 24-101. Legislative policy. To provide the highest
quality of life for the residents of this State and to provide
for a clean and healthy environment, it is the policy of this
State that natural gas utilities, otherwise referred to as
"obligated parties", shall transition to 100% zero emissions
by 2050. Under the heat decarbonization standard, each gas
utility has an annual obligation, beginning in 2030, to reduce
the greenhouse gas emissions resulting from the combustion of
the fuels it delivers to its customers. The emission reduction
obligation for 2030 shall be 20% relative to each utility's
2020 greenhouse gas emissions levels on a weather-normalized
basis. The emission reduction obligation shall grow by 4
percentage points per year every year thereafter, such that
the annual emission reduction requirement will reach 24% in
2031, 28% in 2032, 32% in 2033, 36% in 2034, 40% by 2035, 44%
by 2036, 48% by 2037, 52% by 2038, 56% by 2039, 60% by 2040,
64% by 2041, 68% by 2042, 72% by 2043, 76% by 2044, 80% by

SB3935 - 71 - LRB103 40383 LNS 72670 b
2045, 84% by 2046, 88% by 2047, 92% by 2048, 96% by 2049, and
100% by 2050. This obligation shall be referred to as the "heat
decarbonization standard". The heat decarbonization standard
must be met by the lowest societal cost combination of supply
and demand-side resources. References in this Article to "this
Act" means this Article.
(220 ILCS 5/24-102 new)
Sec. 24-102. Options for compliance.
(a) Obligated parties must demonstrate compliance with the
heat decarbonization standard using a combination of:
(1) emission reductions achieved from the obligated
parties' own customers; and
(2) clean heat credits purchased from other gas
utilities that are also obligated parties in this State.
(b) Prior to 2035, at least 70% of each obligated party's
emission reduction obligation must be met through emission
reductions achieved from its own customers, with no more than
30% of the emission reduction obligation in any year met
through the purchase of clean heat credits. From 2035 through
2040, at least 80% of each obligated party's emission
reduction requirement must be met through emission reductions
from its own customers, with no more than 20% met through the
purchase of clean heat credits. After 2040, at least 90% of
each obligated party's emission reduction requirement must be
met through emission reductions achieved from its own

SB3935 - 72 - LRB103 40383 LNS 72670 b
customers, with no more than 10% met through the purchase of
clean heat credits.
(220 ILCS 5/24-103 new)
Sec. 24-103. Measures for customer emission reduction.
Emissions must be achieved through improvements in customers'
energy conservation practices, improvements in customers'
end-use efficiency, full or partial electrification of any end
use, or switching from fossil methane to lower-emitting liquid
or gaseous fuels that are delivered by the obligated party and
directly consumed by end-use customers at the customers' homes
or businesses. Lower-emitting liquid or gaseous fuels may
include biomethane, but lower-emitting liquid or gaseous fuels
may not include hydrogen except for industrial applications.
For emission reductions from lower-emitting liquid or gaseous
fuels to be counted toward an obligated party's emission
reduction obligation, the obligated party must both acquire
the lower-emitting fuel, including its environmental
attributes, and demonstrate a contractual pathway for the
physical delivery of the fuel from the point of injection into
a pipeline to the obligated party's delivery system. Gas
utilities may not use reductions in emissions from sources
unrelated to combustion of fossil gas at customers' homes and
businesses in this State as emissions offsets or alternatives
to reductions in the customers' own emissions.
Obligated parties must meet the heat decarbonization

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standard with the lowest societal cost combination of
resources, where societal cost includes infrastructure costs,
utility return on capital, the social cost of greenhouse gas
emissions and leakage, and the cost of health impacts
attributable to pollution from a given measure.
(220 ILCS 5/24-104 new)
Sec. 24-104. Demonstrating customer emission reductions.
(a) Each obligated party's emissions in each year shall be
calculated as:
(1) a weather-normalized estimate of emissions from
the actual amount of fossil methane consumed by its
customers in the year, plus;
(2) a weather-normalized estimate of emissions from
the leakage of methane, hydrogen, or other greenhouse
gases from front or behind-the-meter sources in a given
year, plus;
(3) a weather-normalized estimate of the magnitude of
remaining emissions resulting from switching from fossil
methane to lower-emitting liquid or gaseous fuels that are
delivered by the obligated party and directly consumed by
customers at the customers' homes or businesses in the
year. The magnitude of remaining emissions resulting from
switching from fossil methane to lower-emitting liquid or
gaseous fuels shall be calculated as (i) the magnitude of
emissions that would have occurred had fossil methane

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continued to be consumed, multiplied by (ii) one minus the
percent reduction in life cycle emissions resulting from
the fuel substitution. Life cycle emission calculations
shall account for emissions associated with the entire
pathway of a fuel, including extraction, production,
transportation, distribution, and combustion of the fuel
by the consumer.
(b) Obligated parties shall calculate these figures
annually, and electronically submit the figures in an easily
accessible digital format, such as .PDF, .DOCX, or XLSX, to
the Environmental Protection Agency, the Commission, the
Governor, and the General Assembly.
(c) The Environmental Protection Agency shall post these
figures for each utility on a website readily accessible to
the public, within 30 days of obligated parties submitting the
figures to the Agency, and shall maintain all previous years'
records for similar public access.
(d) The Environmental Protection Agency shall also assess
the emissions figures submitted by obligated parties to assess
those parties' compliance or lack thereof with the heat
decarbonization standard. If an obligated party does not
comply, the obligated party shall be subject to enforcement
mechanisms described in Section 24-108.
(220 ILCS 5/24-105 new)
Sec. 24-105. Tradable clean heat credits. A tradable clean

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heat credit is a tradable, intangible commodity that
represents an amount of greenhouse gas reduction, measured in
tons of CO2, achieved by a gas utility from its customers in
this State. An obligated party must achieve excess emission
reductions, over and above its annual obligation, to sell
tradable clean heat credits to another obligated party. The
number of tradable clean heat credits sold by an obligated
party in any year may not exceed the magnitude of the obligated
party's excess emission reductions in that year.
(220 ILCS 5/24-106 new)
Sec. 24-106. Banking of emission reductions. An obligated
party that achieves emission reductions in a given year that
are in excess of its emission reduction obligation in that
year may, in lieu of selling them to another obligated party,
bank them. Emission reductions that are banked in a given year
may be used to comply with emission reduction obligations in
any of the following 3 years. Excess emission reductions may
not be banked for more than 3 years or used as part of an
obligated party's annual compliance more than 3 years after
they were generated. No obligated party may achieve more than
20% of any annual emission reduction obligation using banked
emission reductions.
(220 ILCS 5/24-107 new)
Sec. 24-107. Equity in emission reductions.

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(a) As used in this Section:
"Equity investment eligible communities" has the meaning
given to that term in the Energy Transition Act.
"Income-qualified households" means those households whose
annual incomes are at or below 80% of the area median income.
(b) Each obligated party must achieve real emission
reductions from income-qualified households and environmental
justice communities that are at least 5 percentage points
greater than a proportional percentage of the annual gas
consumption of such customers multiplied by each obligated
party's annual emissions reduction requirements. At least half
of the emission reductions from equity investment eligible
communities shall be from measures that require capital
investments in homes, have expected lives of at least 10
years, and are estimated to lower annual energy bills.
Emission reductions in equity investment eligible communities
shall include codelivery and coordinated implementation of all
relevant programs, measures, and complementary services. This
includes, but is not limited to, pairing high efficiency
electrification measures and programs with energy efficiency,
building envelope improvements, the Illinois Solar for All
Program, energy assistance, health and safety improvements,
and federal incentives targeted to disadvantaged communities.
Emission reductions from income-qualified and environmental
justice communities, including efforts to codeliver and
coordinate other programs and services, shall be reported on

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at least annually to the Commission. Tradable clean heat
credits cannot be used to fulfill this requirement.
(220 ILCS 5/24-108 new)
Sec. 24-108. Enforcement.
(a) The Commission shall order an obligated party that
fails to achieve its emission reduction obligation in a given
year, including required amounts from income-qualified
customers and front-line communities, to make a noncompliance
payment. The noncompliance payment shall be equal to 3 times
the estimated cost per unit of emission reduction incurred by
all obligated parties in the State for the emission reductions
the obligated parties achieved in the prior year.
(b) The Commission may waive the noncompliance payment if:
(1) it finds that the obligated party made a good
faith effort to achieve the required amount of emission
reduction and its failure to achieve the required
reduction resulted from market factors beyond its control,
that could not have reasonably been anticipated, and for
which the obligated party could not have planned; and
(2) it directs the obligated party to add the
difference between its obligated level of emission
reduction and actual emission reduction achieved to its
required emission reduction amount in subsequent years,
with the shortfall being made up in no more than 3 years.
(c) Payments received pursuant to the noncompliance

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penalty shall be directed to the Commission.
(d) The Commission shall use any noncompliance payments to
contract with an independent third party to achieve emission
reductions in the service territory of the noncomplying
utility. The Commission shall prioritize achieving such
reductions from weatherization or electrification of
income-qualified households, to the extent that such
reductions would lower annual energy bills.
(220 ILCS 5/24-109 new)
Sec. 24-109. 2050 Heat Decarbonization Pathways Study.
(a) In order to ensure sufficient planning for achieving
this goal, the Commission shall complete a 2050 Heat
Decarbonization Pathways Study by June 1, 2025, to examine
feasible and practical pathways for investor-owned natural gas
utilities to achieve the State's decarbonization requirement
to be net zero by 2050, and the impacts of decarbonization on
customers and the electric and natural gas utilities that
serve the customers.
(b) The Commission shall host the study in collaboration
with a technical working group whose members are appointed by
the Governor and a consultant selected by the technical
working group. The Commission and technical working group
shall host a public process for stakeholder input regarding
(i) the proposed scope of the study, (ii) initial draft
assumptions for the study, (iii) draft study results, and (iv)

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the draft study report. The technical working group shall
consist of the following members:
(1) one representative of natural gas utilities;
(2) one representative of electric utilities;
(3) the chair of the Commission, or the chair's
designee;
(4) one representative of the Office of
Decarbonization Planning within the Illinois Commerce
Commission;
(5) one representative of the Environmental Protection
Agency;
(6) one representative of an environmental advocacy
group;
(7) one representative of a labor organization;
(8) one representative of commercial and industrial
gas customers;
(9) one representative of an organization that
represents residential ratepayer advocates;
(10) one representative of a group that represents
environmental justice or front-line communities;
(11) one representative of a group that represents
low-income residents;
(12) one representative of an organization that
focuses on access to and promotion of energy efficiency;
and
(13) one climate scientist from a national laboratory

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or institution of higher education in the State.
(c) The 2050 Heat Decarbonization Pathways Study shall
consider:
(1) future clean heating strategies for residential,
commercial, and industrial customers, including
electrification, geothermal heat and thermal networks, and
energy efficiency that would comply with each gas
utility's obligation under the heat decarbonization
standard;
(2) a comparative assessment of the marginal
greenhouse gas abatement cost curve of resources and
technologies, including electrification, that are
available for helping the utility meet its heat
decarbonization standard requirements;
(3) how a reduction in natural gas and other
utility-delivered gaseous fuels throughput will impact
customer gas and electric rates, considering various price
scenarios for electricity, natural gas, and other gaseous
fuels and reference medium and high electrification
scenarios;
(4) strategies to ensure equitable prioritization of
decarbonization measures and programs in income-qualified
and environmental justice communities while minimizing
energy transition costs on ratepayers, with an emphasis on
an accessible and affordable transition for low-income
residents, fixed-income residents, and residents within

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equity investment eligible communities;
(5) an assessment of demand-side resource potential,
including load management, energy efficiency,
conservation, demand response, and fuel switching,
including electrification, available federal, State,
county, local, and private incentives, or financing
options related to building electrification and
efficiency;
(6) that the federal incentives analysis must include
ways that investor-owned utilities can leverage rebates
and tax incentives in the Inflation Reduction Act and
Infrastructure Investment and Jobs Act; in addition, the
assessment must include ways for the investor-owned
utilities to maximize low-income qualified households'
participation in the electrification incentive programs;
(7) the impacts of building and vehicle
electrification on the electric grid and strategies to
integrate gas and electric system planning and resource
optimization;
(8) specific natural gas end uses that may be suitable
for the use of alternative fuels, such as biomethane and
green hydrogen, and an assessment of the natural gas end
uses' commercial availability, social cost, and life cycle
emissions;
(9) a comparative evaluation of the cost of natural
gas purchasing strategies, storage options, delivery

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resources, and improvements in demand-side resources using
a consistent method to calculate cost-effectiveness; and
(10) an evaluation of employment metrics associated
with each alternative, including a projection of gas
distribution jobs affected by a given alternative and jobs
made available through the alternative, a description of
opportunities to transition any affected gas distribution
jobs to the alternative, and an explanation of how
employment impacts associated with each alternative could
affect equity investment eligible communities. Given its
findings, the study will create a Just Transition Plan,
inclusive of funding needs, for the current gas workforce.
(d) The Chair of the Commission, or the Chair's designee,
will also serve as the Chair of the Technical Working Group.
(220 ILCS 5/24-110 new)
Sec. 24-110. Gas infrastructure planning.
(a) This Article creates the Office of Decarbonization
Planning within the Commission to manage an iterative
statewide heat decarbonization plan located within the
Commission. On a timeline concurrent with the 2050 Heat
Decarbonization Pathways Study, the Office of Decarbonization
Planning shall adopt rules for implementing the heat
decarbonization plans.
(b) As used in this Section:
"Environmental justice communities" has the meaning given

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to that term in the Illinois Power Agency Act.
"Lowest reasonable cost" means the least-cost, least-risk
mix of demand-side, supply-side, and electrification resources
determined through a detailed and consistent analysis of a
wide range of commercially available sources. At a minimum,
this analysis must consider resource costs, resource
availability, market-volatility risks, the risks imposed on
ratepayers, resource effect on system operations, public
policies regarding resource preferences, the cost of risks
associated with environmental effects, including emissions of
carbon dioxide, the ability to scale to meet 2050 goals, air
pollution and resulting public health impacts, equity impacts,
and the need for security of supply.
"Planned project" means any programmatic expense or
related group of programmatic expenses with a defined scope of
work and associated cost estimate that exceeds $1,000,000 in
2020 dollars or $500,000 in 2020 dollars for gas utilities
with less than 50,000 full service customers, as adjusted
annually for inflation.
"Resources" means both demand-side and supply-side
resources, including, but not limited to, natural gas,
biomethane, green hydrogen for industrial application,
conservation, energy efficiency, demand response, and
electrification.
(c) Each natural gas utility regulated by the Commission
has the responsibility to meet system demand and public policy

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requirements, including the State's heat decarbonization
standard, with the lowest reasonable cost and most feasible
mix of resources. In furtherance of that responsibility, each
natural gas utility must develop a gas infrastructure plan for
meeting the utility's heat decarbonization standard, including
5-year interim milestones from 2025 until 2050. The gas
infrastructure plan must take into account the findings of the
2050 Heat Decarbonization Pathways Study.
(d) Natural gas utilities shall file biennial gas
infrastructure plans that create alignment between gas utility
distribution system investments and the utility's heat
decarbonization standard obligations at lowest reasonable cost
and that consider nonpipeline infrastructure projects that
minimize costs over the long term.
(e) Before the filing of each biennial gas infrastructure
plan, the Office of Decarbonization Planning shall contract
for gas demand forecasts for each regulated gas utility in the
State from an independent party. Gas utilities must reasonably
provide accurate and timely system data to the independent
contractor selected to conduct the forecasts. For each
regulated gas utility in the State, the third party must
produce forecasts for each customer class that consider slow,
medium, and rapid acceleration of residential, commercial, and
industrial electrification of the end uses that rely upon the
direct combustion of natural gas in buildings. The forecasts
must include, to the extent possible, the effects of updated

SB3935 - 85 - LRB103 40383 LNS 72670 b
State and local building codes, changes to the number of gas
utility customers, consumer responses to building
electrification programs or incentives offered within a gas
utility's service territory, the price elasticity of gas
demand if rates increase due to reduced gas throughput and the
impacts of commodity prices, and any other criteria as
stipulated by the Commission. The forecasts shall be due to
the Commission and the gas utilities at least 8 months prior to
the filing of a gas infrastructure plan.
(f) A gas infrastructure plan must:
(1) cover the 20 years immediately following the
approval of the plan with a 5-year action plan of
investments;
(2) provide the estimated total cost and annual
incremental revenue requirements of the proposed action
plan, assuming both conventional depreciation and
accelerated depreciation, as applicable;
(3) use the various gas demand forecasts provided to
it under this article and include a range of possible
future scenarios and input sensitivities for the purpose
of testing the robustness of the utility's portfolio of
planned projects under various parameters;
(4) take into account the findings of the 2050 Heat
Decarbonization Pathways Study;
(5) demonstrate that the utility's infrastructure
investment plans align with obligations under the heat

SB3935 - 86 - LRB103 40383 LNS 72670 b
decarbonization standard;
(6) include a list of all proposed system expenditures
and investments, including an analysis of infrastructure
needs and detailed information on all planned projects
within the action plan;
(7) include the results of nonpipeline alternative
analyses conducted for all planned projects not necessary
to mitigate a near-term safety or reliability risk subject
to rules by the Commission that include, but are not
limited to:
(A) a consideration of both supply and demand-side
alternatives to traditional capital investments,
including gas demand response and electrification; and
(B) a cost-benefit analysis of the various options
that consider non-energy benefits and the societal
value, including health benefits, of reduced carbon
emissions and surface-level pollutants, particularly
in equity investment eligible communities;
(8) minimize rate impacts on customers, particularly
low-income households and households within equity
investment eligible communities;
(9) describe the methodology, criteria, and
assumptions used to develop the plan;
(10) include one or more system maps indicating
locations of individual planned projects, pressure
districts served by the individual project, locations of

SB3935 - 87 - LRB103 40383 LNS 72670 b
equity investment eligible communities, and any other
information as required by the Commission;
(11) provide a summary of stakeholder participation
and input from a public stakeholder process, and an
explanation of how input was incorporated into the plan,
including for all projects located within equity
investment eligible communities, a description of its
outreach to members of that community and findings from
those efforts; and
(12) requires the utility, to the extent that the
utility assumes the use of alternative fuels, such as
biomethane or green hydrogen, to meet its obligations
under the heat decarbonization standard, to demonstrate a
plan to procure firm supply and cost-effectiveness as
compared to nonfuel alternatives, inclusive of the costs
to retrofit all public and private infrastructure to
accommodate the fuels; green hydrogen may only be used for
industrial applications; hydrogen blending with methane
shall not be part of decarbonization plans.
(g) Not later than 12 months before the due date of a plan,
the utility must provide a work plan for the Commission to
review. The work plan must outline the content of the resource
plan to be developed by the utility, the method for assessing
potential resources, and the timing and extent of public
participation. In addition, the Commission will hear comments
on the plan at a minimum of 3 public hearings, held at times

SB3935 - 88 - LRB103 40383 LNS 72670 b
and locations accessible and convenient to most people,
including at least one in an equity investment eligible
community, which are scheduled after the utility submits its
plan for Commission review.
(h) No later than July 1, 2025, gas utilities in this State
must file the first gas infrastructure plan application for
approval. The Commission may approve, deny, or require
modifications to the plan. Once approved, the plan must be
incorporated into the utility's next general rate case using
the approved ratemaking treatments. Deviations based on
unforeseen circumstances must be justified and approved by the
Commission.
(i) The Commission shall adopt new rules, amend existing
rules, as necessary, and dedicate sufficient resources to
implement this Section.
(220 ILCS 5/24-111 new)
Sec. 24-111. Study on gas utility financial incentive
reform.
(a) The General Assembly finds that:
(1) Improving the alignment of gas utility customer
interests, State policy, and company interests is critical
to ensuring the expected decline in the use of natural gas
is done efficiently, safely, cost-effectively, and
transparently.
(2) There is urgency around addressing increasing

SB3935 - 89 - LRB103 40383 LNS 72670 b
threats from climate change and assisting communities that
have borne disproportionate impacts from climate change,
including air pollution, greenhouse gas emissions, and
energy burdens. Addressing this problem requires changes
to the energy used to power homes and businesses, and
changes to the gas utility business model under which
utilities in the State have traditionally functioned.
(3) Gas utility ratepayers may face upwardly spiraling
bills if steps are not taken to contain costs and
strategically prune parts of the gas distribution network.
(4) There is a need to encourage gas utilities to
innovate and find new lines of business to maintain
financial health as their main business, the provision of
fossil natural gas, winds down.
(5) The current regulatory framework has encouraged
infrastructure programs that have been plagued by
excessive cost overruns and delays.
(6) Discussions of performance incentive mechanisms
must always take into account the affordability of
customer rates and bills via stakeholder input.
The General Assembly, therefore, directs the Commission to
reform the gas utility financial incentives structure to
further specified goals and objectives related to the
provision of clean, affordable heat and the advancement of an
equitable distribution of benefits and reduction in harms in
equity investment eligible communities and economically

SB3935 - 90 - LRB103 40383 LNS 72670 b
disadvantaged communities.
(b) The Commission shall open an investigation to consider
performance-based ratemaking tools and other financial
mechanisms to advance the goals of affordability, equity,
pollution reduction, energy system flexibility and
electrification, reliability, safety, customer experience,
cost-effectiveness, and the financial health of gas utilities
as the gas utilities scale down their core business of
delivering fuel-based energy through the distribution network.
The investigation shall consider the following mechanisms, in
addition to any others that the Commission or stakeholders
deem necessary:
(1) accelerated and shortened depreciation schedules;
(2) performance metrics and benchmarking;
(3) revenue decoupling;
(4) cost-recovery options for nonpipeline
alternatives;
(5) electrification;
(6) networked geothermal systems;
(7) securitization;
(8) fuel-cost sharing;
(9) multiyear rate plans;
(10) performance incentive mechanisms;
(11) the equalization of capital and operational
expenditures;
(12) return on equity levels for different investment

SB3935 - 91 - LRB103 40383 LNS 72670 b
types;
(13) rate designs at the electric and gas nexus;
(14) low-income rates;
(15) luxury gas rates; and
(16) intersectoral cost recovery.
(c) The Commission must create a framework to evaluate
each mechanism on its own and as part of a set of mechanisms to
achieve the policy objectives determined by the General
Assembly, stakeholders, and the general public after a minimum
of 3 public hearings held at times and locations accessible
and convenient to most people, including at least one in an
equity investment eligible community.
(d) The investigation shall consist of a series of
workshops facilitated by an independent consultant that
encourages representation from diverse stakeholders, ensures
equitable opportunities for participation, and does not
require formal intervention or representation by an attorney.
(e) Any recommendations at the conclusion of the process
must be shared with the General Assembly, and those
recommendations already within the Commission's existing
authorities must be adopted in the next applicable general
rate case or relevant filing.
(220 ILCS 5/24-112 new)
Sec. 24-112. Reporting requirements.
(a) Each gas utility in the State must report data to the

SB3935 - 92 - LRB103 40383 LNS 72670 b
Commission in January and July of each year that satisfy
metrics that are set by the Commission to assess, on a system,
segment, and neighborhood basis, the level of system safety
and risk. The metrics must include, but are not limited to, the
following:
(1) the overall average leak rate of replaced and
to-be-replaced mains and leak-prone pipes;
(2) the overall average leak rate using only
leak-prone pipe and current leaks;
(3) the neighborhood average leak rate using only
remaining leak-prone pipes and current leaks; and
(4) the neighborhood historic average leak rate using
leaks on leak-prone pipes for the past 2 years, on a
rolling basis, normalized for weather, and incorporating
all class 2 leaks except third-party damage.
(b) Gas utilities must include in the report an assessment
of whether the actions taken in the prior 3 years produced the
best value, in terms of risk reduction, for the amounts
expended and a prediction of how planned projects will change
risk levels on a neighborhood, segment, and system basis. The
report filed by Peoples Gas Light and Coke Company must also
include updates on steps taken to implement the
recommendations of the Final Report on Phase One of an
Investigation of Peoples Gas Light and Coke Company's AMRP.
The Commission may require any other gas utility to adopt new
and revised practices and processes by Peoples Gas Light and

SB3935 - 93 - LRB103 40383 LNS 72670 b
Coke Company to ensure consistency across utilities.
(c) In its review of the data and metrics provided, the
Commission may order adjustments in infrastructure replacement
plans as it deems necessary to meet an acceptable level of risk
at appropriate cost.
(220 ILCS 5/Art. XXV heading new)
ARTICLE XXV. STATE NAVIGATOR PROGRAM LAW
(220 ILCS 5/25-101 new)
Sec. 25-101. Short title. This Article may be cited as the
State Navigator Program Law. References in this Article to
"this Act" mean this Article.
(220 ILCS 5/25-102 new)
Sec. 25-102. Intent. The General Assembly finds that
improving the energy efficiency of, and reducing the
greenhouse gases from, residential buildings are critical to
meeting the State's adopted climate goals in Public Act
102-662.
The General Assembly recognizes that making information
about energy efficiency and weatherization programs,
electrification services, skilled contractors, and federal and
State electrification incentives available to State residents
will assist obligated parties to comply with the Clean Heat
Standard set out in Article XXIII. Further, the General

SB3935 - 94 - LRB103 40383 LNS 72670 b
Assembly recognizes that establishing a comprehensive
statewide navigator program is essential to ensuring equitable
access to electrification and energy efficient services. This
program requires the Administrator to help State residents
combine local, State, federal, and utility services related to
electrification, energy efficiency, and the reduction of
energy burdens to maximize electrification and energy
efficiency in this State, and fill gaps as needed.
(220 ILCS 5/25-103 new)
Sec. 25-103. Definitions. As used in this Article:
"Administrator" means an entity, including, but not
limited to, a nonprofit corporation or community-based
organization. "Administrator" does not include an energy
utility.
"Customers" means residents, businesses, and building
owners.
"Department" means the Department of Commerce and Economic
Opportunity.
"Electrification services" includes energy audits,
assistance converting to on-site renewable energy, installing
electric heat pumps and heat pump water heaters, electric
appliance replacement, assistance with paperwork, arranging
for financing, energy efficiency, weatherization, health and
safety, and any related services and work.
"Equity investment eligible communities" has the meaning

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given to that term in Section 5-5 of the Energy Transition Act.
"Income-qualified households" means those whose annual
incomes are at or below 80% of area median income.
"Navigator Working Group" means representatives appointed
by the Department who represent members from either the
electrician trades, construction industry, community
organizations that work in energy burdened communities,
community organizations who have experience with
weatherization programs, members from equity investment
eligible communities or the Illinois Commerce Commission or
staff, and electric utilities and obligated parties as
indicated in Article XXIII.
(220 ILCS 5/25-104 new)
Sec. 25-104. Creation of State navigator program.
(a) The Department may establish and oversee a statewide
building energy upgrade navigator program. The purpose of the
navigator program is to provide a statewide resource to assist
building owners and building renters with accessing
electrification services and energy efficiency services and
programs, funding, and any other assistance that will result
in aiding obligated parties' compliance with the Clean Heat
Standard in Article XXIII. This includes, but is not limited
to, utility programs, the weatherization assistance program,
federal funding, rebates, health and safety funding, and other
State and local funding.

SB3935 - 96 - LRB103 40383 LNS 72670 b
(b) The Department must coordinate and collaborate with
the navigator working group on the design, administration, and
implementation of the navigator program.
(c) The Department must ensure that all State residents
have equitable access to the navigator program.
(d) The Department may consult with other programs,
entities, and stakeholders as the Department determines to be
appropriate on the design, administration, and implementation
of the navigator program.
(e) Third-Party Administrator.
(1) The Department may contract out this program to
the Administrator. Subject to the following requirements:
(A) The Administrator must be selected through a
competitive process.
(B) The Administrator must have experience with
running statewide programs related to energy
efficiency, electrification services, or
weatherization programs.
(C) The Administrator must have experience working
with multifamily building owners and renters.
(D) The Administrator must have experience
assisting people with low incomes or energy burdened
households.
(E) The Administrator must have experience running
programs in both urban and rural parts of the State,
including covering a range of geographic and community

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diversity.
(2) If the Department decides to hire an
Administrator, they must enter into a contract within a
year of the effective date of this amendatory Act of the
103rd General Assembly.
(3) If the Department decides to hire an
Administrator, the contract expires after 4 years. After 4
years, the Department can renew the contract or select a
different Administrator. If the Administrator is not
meeting the requirements of the program and its
participants, the contract may be terminated early, and a
new Administrator may be hired.
(4) The Administrator shall have the same
responsibilities as the Department in creating,
overseeing, and implementing the programs in the navigator
program.
(f) The Department or Administrator of the naviga
tor
program must:
(1) provide outreach and deliver energy services to:
(A) owner occupied and rental residences; and
(B) single-family and multifamily dwellings;
(2) provide coverage for all geographic regions in the
State;
(3) support energy efficient and emissions reductions
alternatives for all types of fuel used in buildings; the
Department or Administrator shall ensure funding is used

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for projects that include electrification and energy
efficiency work, and any related health and safety,
renewable energy, and whole building needs; funding shall
not be used for the installation of new natural gas or
other fossil fuel equipment;
(4) create strategies to ensure that the navigator
program prioritizes services in equity investment eligible
communities, one of which must include dedicating at least
40% of the total funding for the navigator program to
deploy electrification services, energy efficiency
measures, renewable energy, health and safety upgrades,
and related upgrades in equity investment eligible
communities, through;
(A) weatherization services, including air sealing
and insulation;
(B) health and safety improvements;
(C) purchase and installation of efficient
electric equipment;
(D) energy efficiency improvements, as needed;
(E) health and safety improvements that aid in
energy conservation;
(F) weatherization services;
(G) solar, storage, and renewable energy, as
needed; and
(G) workforce development programs;
(5) create a strategy for how the navigator program

SB3935 - 99 - LRB103 40383 LNS 72670 b
will equitably assist residents in accessing rebates and
incentives in the federal Inflation Reduction Act;
(6) create a strategy for how the navigator program
will assist customers in accessing State funding
opportunities available to access electrification
services;
(7) create a strategy to stack funding from all
available incentives and tax rebates together with the
goal of creating a 'one-stop shop' for all weatherization,
energy efficiency and electrification services;
(8) support the integrated implementation of all
relevant clean building programs funded in the State
budget, including, but not limited to:
(A) the Low Income Home Energy Assistance Program;
and
(B) the Illinois Home Weatherization Assistance
Program; and
(9) maintain a recommended contractor list.
(220 ILCS 5/25-105 new)
Sec. 25-105. Education materials and outreach. The
Department or Administrator shall:
(1) create educational materials, which must include
information about all relevant funds and financial
assistance available from federal, State, local, and
energy utility programs, including, but not limited to,

SB3935 - 100 - LRB103 40383 LNS 72670 b
incentives, rebates, tax credits, grants, and loan
programs;
(2) contract with one or more community-based
organizations that demonstrate past success in working
with equity investment eligible communities in order to
create and distribute educational materials specifically
targeted at equity investment eligible communities;
(3) support and connect community-based organizations
in their region to training programs in areas of
electrification, energy efficiency, building envelope, and
installation technical assistance, and other relevant
areas; and
(4) ensure the education and outreach work is
coordinated with other State energy efficiency,
weatherization, electrification, and related programs and
providers.
(220 ILCS 5/25-106 new)
Sec. 25-106. Delivered services for equity investment
eligible communities.
(a) The Department or Administrator must implement the
navigator program for income-qualified households, which must
include support navigating to existing programs or directly
providing and filling gaps related to:
(1) energy audits to provide recommendations to
customers on a wide range of cost-effective energy and

SB3935 - 101 - LRB103 40383 LNS 72670 b
health improvements;
(2) weatherization and energy efficiency services,
including, but not limited to,
adding insulation, sealing
cracks, and making other changes that reduce heat loss,
save money on heating bills, and improve the health and
safety of buildings;
(3) appliance upgrades;
(4) electrification services, including installation
of air-sourced heat pumps, heat pump hot water heaters,
cooling, and electric panel upgrades and wiring;
(5) accessing qualified energy contractors; and
(6) securing financing.
(b) Nothing in this Section shall preclude the
implementation of measures that, in addition to producing
energy savings, increase electric load by adding building
cooling systems where none existed before.
Section 99. Effective date. This Act takes effect upon
becoming law.
SB3935 - 102 - LRB103 40383 LNS 72670 b
INDEX
Statutes amended in order of appearance
20 ILCS 730/5-25
220 ILCS 5/1-102 from Ch. 111 2/3, par. 1-102
220 ILCS 5/1-103 new
220 ILCS 5/3-127 new
220 ILCS 5/8-101 from Ch. 111 2/3, par. 8-101
220 ILCS 5/8-104B new
220 ILCS 5/9-228.5 new
220 ILCS 5/9-229
220 ILCS 5/9-235 new
220 ILCS 5/9-241 from Ch. 111 2/3, par. 9-241
220 ILCS 5/9-254 new
220 ILCS 5/9-255 new
220 ILCS 5/16-111.10
220 ILCS 5/Art. XXIII
heading new
220 ILCS 5/23-101 new
220 ILCS 5/23-102 new
220 ILCS 5/23-103 new
220 ILCS 5/23-104 new
220 ILCS 5/23-105 new
220 ILCS 5/23-106 new
220 ILCS 5/23-107 new
220 ILCS 5/23-108 new
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