SB 678 — POWER AGCY-UTILITY-CLEAN COAL

(3) located on the customer side of the customer's electric meter and is generally used to offset that customer's electricity load;

and SB0678 Engrossed - 7 - LRB097 04938 ASK 44978 b (4) limited in nameplate capacity to no more than 2,000 kilowatts.

"Energy efficiency" means measures that reduce the amount of electricity or natural gas required to achieve a given end use.

"Electric utility" has the same definition as found in Section 16-102 of the Public Utilities Act.

"Excluded renewable energy resources contract costs" means the amount by which the costs of renewable energy resources, purchased for a particular year to meet the renewable energy resources standards of paragraph (1) of subsection (c) of Section 1-75 of this Act applicable to the load of an electric utility's eligible retail customers pursuant to a contract with a term greater than one year that the electric utility entered into in a previous year in accordance with a procurement approved by the Commission pursuant to Section 16-111.5 of the Public Utilities Act, exceed the limitations imposed by paragraph (2) of subsection (c) of Section 1-75 of this Act for the particular year.

"Facility" means an electric generating unit or a co-generating unit that produces electricity along with related equipment necessary to connect the facility to an electric transmission or distribution system.

"Governmental aggregator" means one or more units of local government that individually or collectively procure electricity to serve residential retail electrical loads SB0678 Engrossed - 8 - LRB097 04938 ASK 44978 b located within its or their jurisdiction.

"Initial clean coal facility" means an electric generating facility using gasification technology that:

(1) has a nameplate capacity of at least 500 MW;

(2) irrevocably commits in its proposed sourcing agreement to use coal for at least 50% of the total feedstock over the term of a sourcing agreement, with all coal having high volatile bituminous rank and greater than 1.7 pounds of sulfur per million btu content;

(3) is designed to capture and sequester at least 90% of the carbon dioxide emissions that the portion of the facility, if any, that produces SNG would otherwise emit and at least 50% of the total carbon dioxide emissions that the facility as a whole would otherwise emit;

(4) absent an appeal of a permit or regulatory order, is reasonably capable of achieving commercial operation by no later than 5 years after the execution of the sourcing agreements;

(5) has a feasible financing plan;

(6) has a reliable and cost-effective transmission plan to deliver energy to Commonwealth Edison Company and Ameren Illinois;

and (7) has a power block designed not to exceed allowable emission rates for sulfur dioxide, nitrogen oxides, carbon monoxide, particulates, and mercury for a natural gas-fired combined-cycle facility the same size as and in the same location as the electric generating facility at the time the electric generating facility obtains an approved air permit.

"Large electric customer" means a customer that (1) obtains SB0678 Engrossed - 9 - LRB097 04938 ASK 44978 b retail electric service in the State from an electric utility or an alternative retail electric supplier and (2) is not a small electric customer.

"Local government" means a unit of local government as defined in Article VII of Section 1 of the Illinois Constitution.

"Municipality" means a city, village, or incorporated town.

"Person" means any natural person, firm, partnership, corporation, either domestic or foreign, company, association, limited liability company, joint stock company, or association and includes any trustee, receiver, assignee, or personal representative thereof.

"Project" means the planning, bidding, and construction of a facility.

"Public utility" has the same definition as found in Section 3-105 of the Public Utilities Act.

"Real property" means any interest in land together with all structures, fixtures, and improvements thereon, including lands under water and riparian rights, any easements, covenants, licenses, leases, rights-of-way, uses, and other interests, together with any liens, judgments, mortgages, or other claims or security interests related to real property.

"Renewable energy credit" means a tradable credit that represents the environmental attributes of a certain amount of energy produced from a renewable energy resource.

SB0678 Engrossed - 10 - LRB097 04938 ASK 44978 b "Renewable energy resources" includes energy and its associated renewable energy credit or renewable energy credits from wind, solar thermal energy, photovoltaic cells and panels, biodiesel, anaerobic digestion, crops and untreated and unadulterated organic waste biomass, tree waste, hydropower that does not involve new construction or significant expansion of hydropower dams, and other alternative sources of environmentally preferable energy.

For purposes of this Act, landfill gas produced in the State is considered a renewable energy resource.

"Renewable energy resources" does not include the incineration or burning of tires, garbage, general household, institutional, and commercial waste, industrial lunchroom or office waste, landscape waste other than tree waste, railroad crossties, utility poles, or construction or demolition debris, other than untreated and unadulterated waste wood.

"Revenue bond" means any bond, note, or other evidence of indebtedness issued by the Authority, the principal and interest of which is payable solely from revenues or income derived from any project or activity of the Agency.

"Sequester" means permanent storage of carbon dioxide by injecting it into a saline aquifer, a depleted gas reservoir, or an oil reservoir, directly or through an enhanced oil recovery process that may involve intermediate storage, regardless of whether these activities are conducted by a clean coal facility, the initial clean coal facility, a clean coal SB0678 Engrossed - 11 - LRB097 04938 ASK 44978 b SNG facility, a clean coal SNG brownfield facility, or a party with which a clean coal facility, initial clean coal facility, or clean coal SNG facility, or clean coal SNG brownfield facility has contracted for such purposes.

"Service area" has the same definition as found in Section 16-102 of the Public Utilities Act.

"Sourcing agreement" means (i) in the case of an electric utility, an agreement between the owner of a clean coal facility or initial clean coal facility and such electric utility, which agreement shall have terms and conditions meeting the requirements of paragraph (3) of subsection (d) of Section 1-75, (ii) in the case of an alternative retail electric supplier, an agreement between the owner of a clean coal facility or initial clean coal facility and such alternative retail electric supplier, which agreement shall have terms and conditions meeting the requirements of Section 16-115(d)(5) of the Public Utilities Act, and (iii) in case of a gas utility, an agreement between the owner of a clean coal SNG brownfield facility and the gas utility, which agreement shall have the terms and conditions meeting the requirements of subsection (h-1) of Section 9-220 of the Public Utilities Act.

"Small electric customer" means a residential retail electric customer that obtains electric service in the State from an electric utility or an alternative retail electric supplier.

"Substitute natural gas" or "SNG" means a gas manufactured SB0678 Engrossed - 12 - LRB097 04938 ASK 44978 b by gasification of hydrocarbon feedstock, which is substantially interchangeable in use and distribution with conventional natural gas.

"Total resource cost test" or "TRC test" means a standard that is met if, for an investment in energy efficiency or demand-response measures, the benefit-cost ratio is greater than one.

The benefit-cost ratio is the ratio of the net present value of the total benefits of the program to the net present value of the total costs as calculated over the lifetime of the measures.

A total resource cost test compares the sum of avoided electric utility costs, representing the benefits that accrue to the system and the participant in the delivery of those efficiency measures, as well as other quantifiable societal benefits, including avoided natural gas utility costs, to the sum of all incremental costs of end-use measures that are implemented due to the program (including both utility and participant contributions), plus costs to administer, deliver, and evaluate each demand-side program, to quantify the net savings obtained by substituting the demand-side program for supply resources.

In calculating avoided costs of power and energy that an electric utility would otherwise have had to acquire, reasonable estimates shall be included of financial costs likely to be imposed by future regulations and legislation on emissions of greenhouse gases.

96-33,96-1499, eff.

7-10-09;1-18-11;

96-159,97-706, eff.

8-10-09;6-25-12;

96-784,97-778, eff.

8-28-09;7-13-12;

96-1000,97-804, eff.

7-2-10;1-1-13;

97-96,97-979, eff.

SB06788-17-12; Engrossed - 13 - LRB097 04938 ASK 44978 b 7-13-11;

97-239,97-1048, eff.

8-2-11;8-22-12;

97-491,97-1130, eff.

8-22-11;8-28-12;

revised 9-7-11.)9-20-12.) (20(5 ILCS 3855/1-20)80/4.24) Sec.

1-20.4.24.

GeneralActs powersand ofSection therepealed Agency.on January 1, 2014.

(a) The Agencyfollowing isActs authorizedand toSection doof eachan ofAct theare following:repealed on January 1, 2014:

(1)The DevelopElectrologist electricityLicensing procurementAct. plans to ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time, taking into account any benefits of price stability, for electric utilities that on December 31, 2005 provided electric service to at least 100,000 customers in Illinois and for small multi-jurisdictional electric utilities that (A) on December 31, 2005 served less than 100,000 customers in Illinois and (B) request a procurement plan for their Illinois jurisdictional load.

The procurementIllinois plansCertified shallShorthand beReporters updatedAct onof an1984. annual basis and shall include electricity generated from renewable resources sufficient to achieve the standards specified in this Act.

ForThe periodsIllinois beginningOccupational onTherapy andPractice afterAct. June 1, 2012, the procurement plans shall also include procurement of renewable energy credits, in accordance with subsection (c) of Section 1-75 of this Act, in amounts projected to be sufficient to meet the renewable energy resources standard specified in subsection (c) of Section 1-75 of this Act with respect to the kilowatthour usage of delivery services SB0678 Engrossed - 14 - LRB097 04938 ASK 44978 b non-eligible retail customers in such electric utilities' service areas.

(2)SB0678 ConductEnrolled competitive- procurement2 processes- toLRB097 procure04938 theASK supply44978 resourcesb identifiedThe inIllinois the procurement plan, pursuant to Section 16-111.5 of the Public UtilitiesAccounting Act.

(3)The DevelopPrivate electricDetective, generationPrivate andAlarm, co-generationPrivate facilitiesSecurity, thatFingerprint useVendor, indigenousand coalLocksmith orAct renewableof resources,2004. or both, financed with bonds issued by the Illinois Finance Authority.

(4)The SupplyRegistered electricitySurgical fromAssistant theand Agency'sRegistered facilitiesSurgical atTechnologist costTitle toProtection oneAct. or more of the following:

municipalSection electric2.5 systems,of governmentalthe aggregators,Illinois orPlumbing ruralLicense electricLaw. cooperatives in Illinois.

(b)The ExceptVeterinary asMedicine otherwise limited by this Act, the Agency has all of the powers necessary or convenient to carry out the purposes and provisionsSurgery ofPractice thisAct Act, including without limitation, each of the2004. following:

(1) To have a corporate seal, and to alter that seal at pleasure, and to use it by causing it or a facsimile to be affixed or impressed or reproduced in any other manner.

(2) To use the services of the Illinois Finance Authority necessary to carry out the Agency's purposes.

(3) To negotiate and enter into loan agreements and other agreements with the Illinois Finance Authority.

(4) To obtain and employ personnel and hire consultants SB0678 Engrossed - 15 - LRB097 04938 ASK 44978 b that are necessary to fulfill the Agency's purposes, and to make expenditures for that purpose within the appropriations for that purpose.

(5) To purchase, receive, take by grant, gift, devise, bequest, or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use, and otherwise deal in and with, real or personal property whether tangible or intangible, or any interest therein, within the State.

(6) To acquire real or personal property, whether tangible or intangible, including without limitation property rights, interests in property, franchises, obligations, contracts, and debt and equity securities, and to do so by the exercise of the power of eminent domain in accordance with Section 1-21;

except that any real property acquired by the exercise of the power of eminent domain must be located within the State.

(7) To sell, convey, lease, exchange, transfer, abandon, or otherwise dispose of, or mortgage, pledge, or create a security interest in, any of its assets, properties, or any interest therein, wherever situated.

(8) To purchase, take, receive, subscribe for, or otherwise acquire, hold, make a tender offer for, vote, employ, sell, lend, lease, exchange, transfer, or otherwise dispose of, mortgage, pledge, or grant a security interest in, use, and otherwise deal in and with, bonds and other obligations, shares, or other securities (or SB0678 Engrossed - 16 - LRB097 04938 ASK 44978 b interests therein) issued by others, whether engaged in a similar or different business or activity.

(9) To make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of the powers and functions of the Agency under this Act, including contracts with any person, local government, State agency, or other entity;

and all State agencies and all local governments are authorized to enter into and do all things necessary to perform any such agreement, contract, or other instrument with the Agency.

No such agreement, contract, or other instrument shall exceed 40 years.

(10) To lend money, invest and reinvest its funds in accordance with the Public Funds Investment Act, and take and hold real and personal property as security for the payment of funds loaned or invested.

(11) To borrow money at such rate or rates of interest as the Agency may determine, issue its notes, bonds, or other obligations to evidence that indebtedness, and secure any of its obligations by mortgage or pledge of its real or personal property, machinery, equipment, structures, fixtures, inventories, revenues, grants, and other funds as provided or any interest therein, wherever situated.

(12) To enter into agreements with the Illinois Finance Authority to issue bonds whether or not the income SB0678 Engrossed - 17 - LRB097 04938 ASK 44978 b therefrom is exempt from federal taxation.

(13) To procure insurance against any loss in connection with its properties or operations in such amount or amounts and from such insurers, including the federal government, as it may deem necessary or desirable, and to pay any premiums therefor.

(14) To negotiate and enter into agreements with trustees or receivers appointed by United States bankruptcy courts or federal district courts or in other proceedings involving adjustment of debts and authorize proceedings involving adjustment of debts and authorize legal counsel for the Agency to appear in any such proceedings.

(15) To file a petition under Chapter 9 of Title 11 of the United States Bankruptcy Code or take other similar action for the adjustment of its debts.

(16) To enter into management agreements for the operation of any of the property or facilities owned by the Agency.

(17) To enter into an agreement to transfer and to transfer any land, facilities, fixtures, or equipment of the Agency to one or more municipal electric systems, governmental aggregators, or rural electric agencies or cooperatives, for such consideration and upon such terms as the Agency may determine to be in the best interest of the citizens of Illinois.

SB0678 Engrossed - 18 - LRB097 04938 ASK 44978 b (18) To enter upon any lands and within any building whenever in its judgment it may be necessary for the purpose of making surveys and examinations to accomplish any purpose authorized by this Act.

(19) To maintain an office or offices at such place or places in the State as it may determine.

(20) To request information, and to make any inquiry, investigation, survey, or study that the Agency may deem necessary to enable it effectively to carry out the provisions of this Act.

(21) To accept and expend appropriations.

(22) To engage in any activity or operation that is incidental to and in furtherance of efficient operation to accomplish the Agency's purposes.

(23) To adopt, revise, amend, and repeal rules with respect to its operations, properties, and facilities as may be necessary or convenient to carry out the purposes of this Act, subject to the provisions of the Illinois Administrative Procedure Act and Sections 1-22 and 1-35 of this Act.

(24) To establish and collect charges and fees as described in this Act.

(25) To conduct competitive gasification feedstock procurement processes to procure the feedstocks for the clean coal SNG brownfield facility in accordance with the requirements of Section 1-78 of this Act.

SB0678 Engrossed - 19 - LRB097 04938 ASK 44978 b (26) To review, revise, and approve sourcing agreements and mediate and resolve disputes between gas utilities and the clean coal SNG brownfield facility pursuant to subsection (h-1) of Section 9-220 of the Public Utilities Act.

(27) To review, revise, and approve sourcing agreements and mediate and resolve disputes between electric utilities or alternative retail electric suppliers and the initial clean coal facility pursuant to paragraph (4) of subsection (d) of Section 1-75 of this Act.

(28) To conduct competitive gasification feedstock procurement processes to procure the feedstocks for the initial clean coal facility in accordance with the requirements of Section 1-79 of this Act.

96-784,95-331, eff.

8-28-09;8-21-07;

96-1000,95-613, eff.

7-2-10;9-11-07.) Section 99.

97-96,Effective eff.date.

7-13-11;This Act takes effect upon becoming law.

97-325, eff.

8-12-11;

revised 9-7-11.) (20 ILCS 3855/1-56) Sec.

1-56.

Illinois Power Agency Renewable Energy Resources Fund.

(a) The Illinois Power Agency Renewable Energy Resources Fund is created as a special fund in the State treasury.

(b) The Illinois Power Agency Renewable Energy Resources Fund shall be administered by the Agency to procure renewable energy resources.

Prior to June 1, 2011, resources procured SB0678 Engrossed - 20 - LRB097 04938 ASK 44978 b pursuant to this Section shall be procured from facilities located in Illinois, provided the resources are available from those facilities.

If resources are not available in Illinois, then they shall be procured in states that adjoin Illinois.

If resources are not available in Illinois or in states that adjoin Illinois, then they may be purchased elsewhere.

Beginning June 1, 2011, resources procured pursuant to this Section shall be procured from facilities located in Illinois or states that adjoin Illinois.

If resources are not available in Illinois or in states that adjoin Illinois, then they may be procured elsewhere.

To the extent available, at least 75% of these renewable energy resources shall come from wind generation.

Of the renewable energy resources procured pursuant to this Section at least the following specified percentages shall come from photovoltaics on the following schedule:

0.5% by June 1, 2012;

1.5% by June 1, 2013;

3% by June 1, 2014;

and 6% by June 1, 2015 and thereafter.

Of the renewable energy resources procured pursuant to this Section at least the following percentages shall come from distributed renewable energy generation devices:

0.5% by June 1, 2013, 0.75% by June 1, 2014, and 1% by June 1, 2015 and thereafter.

To the extent available, half of the renewable energy resources procured from distributed renewable energy generation shall come from devices of less than 25 kilowatts in nameplate capacity.

Renewable energy resources procured from distributed generation devices may also count towards the required SB0678 Engrossed - 21 - LRB097 04938 ASK 44978 b percentages for wind and solar photovoltaics.

Procurement of renewable energy resources from distributed renewable energy generation devices shall be done on an annual basis through multi-year contracts of no less than 5 years, and shall consist solely of renewable energy credits.

The Agency shall create credit requirements for suppliers of distributed renewable energy.

In order to minimize the administrative burden on contracting entities, the Agency shall solicit the use of third-party organizations to aggregate distributed renewable energy into groups of no less than one megawatt in installed capacity.

These third-party organizations shall administer contracts with individual distributed renewable energy generation device owners.

An individual distributed renewable energy generation device owner shall have the ability to measure the output of his or her distributed renewable energy generation device.

(c) The Agency shall procure renewable energy resources at least once each year in conjunction with a procurement event for electric utilities required to comply with Section 1-75 of the Act and shall, whenever possible, enter into long-term contracts on an annual basis for a portion of the incremental requirement for the given procurement year.

(d) The price paid to procure renewable energy credits using monies from the Illinois Power Agency Renewable Energy Resources Fund shall not exceed the winning bid prices paid for like resources procured for electric utilities required to SB0678 Engrossed - 22 - LRB097 04938 ASK 44978 b comply with Section 1-75 of this Act.

(e) All renewable energy credits procured using monies from the Illinois Power Agency Renewable Energy Resources Fund shall be permanently retired.

(f) The procurement process described in this Section is exempt from the requirements of the Illinois Procurement Code, pursuant to Section 20-10 of that Code.

(g) All disbursements from the Illinois Power Agency Renewable Energy Resources Fund shall be made only upon warrants of the Comptroller drawn upon the Treasurer as custodian of the Fund upon vouchers signed by the Director 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.

(h) The Illinois Power Agency Renewable Energy Resources Fund shall not be subject to sweeps, administrative charges, or chargebacks, including, but not limited to, those authorized under Section 8h of the State Finance Act, that would in any way result in the transfer of any funds from this Fund to any other fund of this State or in having any such funds utilized for any purpose other than the express purposes set forth in this Section.

(i) The Illinois Power Agency Renewable Energy Resources Fund shall be terminated upon depletion of all funds therein SB0678 Engrossed - 23 - LRB097 04938 ASK 44978 b through the purchase of renewable energy credits.

(Source:

P.A.

96-159, eff.

8-10-09;

96-1000, eff.

7-2-10;

96-1437, eff.

8-17-10.) (20 ILCS 3855/1-75) Sec.

1-75.

Planning and Procurement Bureau.

The Planning and Procurement Bureau has the following duties and responsibilities:

(a) The Planning and Procurement Bureau shall each year, beginning in 2008, develop procurement plans and conduct competitive procurement processes in accordance with the requirements of Section 16-111.5 of the Public Utilities Act for the eligible retail customers of electric utilities that on December 31, 2005 provided electric service to at least 100,000 customers in Illinois, and for years beginning on and after June 1, 2012, for the procurement of renewable energy credits in respect of the kilowatthour usage of delivery services non-eligible retail customers in such electric utilities' service areas.

The Planning and Procurement Bureau shall also develop procurement plans and conduct competitive procurement processes in accordance with the requirements of Section 16-111.5 of the Public Utilities Act for the eligible retail customers of small multi-jurisdictional electric utilities that (i) on December 31, 2005 served less than 100,000 customers in Illinois and (ii) request a SB0678 Engrossed - 24 - LRB097 04938 ASK 44978 b procurement plan for their Illinois jurisdictional load.

This Section shall not apply to a small multi-jurisdictional utility until such time as a small multi-jurisdictional utility requests the Agency to prepare a procurement plan for their Illinois jurisdictional load.

For the purposes of this Section, the term "eligible retail customers" has the same definition as found in Section 16-111.5(a) of the Public Utilities Act.

(1) The Agency shall each year, beginning in 2008, as needed, issue a request for qualifications for experts or expert consulting firms to develop the procurement plans in accordance with Section 16-111.5 of the Public Utilities Act.

In order to qualify an expert or expert consulting firm must have:

(A) direct previous experience assembling large-scale power supply plans or portfolios for end-use customers;

(B) an advanced degree in economics, mathematics, engineering, risk management, or a related area of study;

(C) 10 years of experience in the electricity sector, including managing supply risk;

(D) expertise in wholesale electricity market rules, including those established by the Federal Energy Regulatory Commission and regional transmission organizations;

SB0678 Engrossed - 25 - LRB097 04938 ASK 44978 b (E) expertise in credit protocols and familiarity with contract protocols;

(F) adequate resources to perform and fulfill the required functions and responsibilities;

and (G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the affected electric utilities.

(2) The Agency shall each year, as needed, issue a request for qualifications for a procurement administrator to conduct the competitive procurement processes in accordance with Section 16-111.5 of the Public Utilities Act.

In order to qualify an expert or expert consulting firm must have:

(A) direct previous experience administering a large-scale competitive procurement process;

(B) an advanced degree in economics, mathematics, engineering, or a related area of study;

(C) 10 years of experience in the electricity sector, including risk management experience;

(D) expertise in wholesale electricity market rules, including those established by the Federal Energy Regulatory Commission and regional transmission organizations;

(E) expertise in credit and contract protocols;

SB0678 Engrossed - 26 - LRB097 04938 ASK 44978 b (F) adequate resources to perform and fulfill the required functions and responsibilities;

and (G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the affected electric utilities.

(3) The Agency shall provide affected utilities and other interested parties with the lists of qualified experts or expert consulting firms identified through the request for qualifications processes that are under consideration to develop the procurement plans and to serve as the procurement administrator.

The Agency shall also provide each qualified expert's or expert consulting firm's response to the request for qualifications.

All information provided under this subparagraph shall also be provided to the Commission.

The Agency may provide by rule for fees associated with supplying the information to utilities and other interested parties.

These parties shall, within 5 business days, notify the Agency in writing if they object to any experts or expert consulting firms on the lists.

Objections shall be based on:

(A) failure to satisfy qualification criteria;

(B) identification of a conflict of interest;

or (C) evidence of inappropriate bias for or SB0678 Engrossed - 27 - LRB097 04938 ASK 44978 b against potential bidders or the affected utilities.

The Agency shall remove experts or expert consulting firms from the lists within 10 days if there is a reasonable basis for an objection and provide the updated lists to the affected utilities and other interested parties.

If the Agency fails to remove an expert or expert consulting firm from a list, an objecting party may seek review by the Commission within 5 days thereafter by filing a petition, and the Commission shall render a ruling on the petition within 10 days.

There is no right of appeal of the Commission's ruling.

(4) The Agency shall issue requests for proposals to the qualified experts or expert consulting firms to develop a procurement plan for the affected utilities and to serve as procurement administrator.

(5) The Agency shall select an expert or expert consulting firm to develop procurement plans based on the proposals submitted and shall award one-year contracts to those selected with an option for the Agency for a one-year renewal.

(6) The Agency shall select an expert or expert consulting firm, with approval of the Commission, to serve as procurement administrator based on the proposals submitted.

If the Commission rejects, within SB0678 Engrossed - 28 - LRB097 04938 ASK 44978 b 5 days, the Agency's selection, the Agency shall submit another recommendation within 3 days based on the proposals submitted.

The Agency shall award a one-year contract to the expert or expert consulting firm so selected with Commission approval with an option for the Agency for a one-year renewal.

(a-5) The Planning and Procurement Bureau shall at least every 5 years beginning in 2012 develop feedstock procurement plans and conduct competitive feedstock procurement processes in accordance with the requirements of Section 1-79 of this Act.

(1) The Agency shall, at least once every 5 years beginning in 2012, issue a request for qualifications for experts or expert consulting firms to develop the feedstock procurement plans in accordance with Section 1-79 of this Act.

In order to qualify, an expert or, in the case of an expert consulting firm, the individual who shall be directly responsible for the work, must have:

(A) direct previous experience assembling large scale feedstock supply plans or portfolios involving coal and natural gas for industrial customers;

(B) an advanced degree in economics, mathematics, engineering, risk management, or a related area of study;

(C) ten years of experience in the energy sector, including coal and gas procurement and managing fuel SB0678 Engrossed - 29 - LRB097 04938 ASK 44978 b supply risk;

(D) expertise in the feedstock markets, which may be particularized to the specific type of feedstock to be purchased in that procurement event;

(E) expertise in credit protocols and familiarity with contract protocols;

(F) adequate resources to perform and fulfill the required functions and responsibilities;

and (G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the initial clean coal facility.

(2) The Agency shall at least every 5 years beginning in 2012, as needed, issue a request for qualifications for a feedstock procurement administrator to conduct the competitive feedstock procurement processes in accordance with Section 1-79 of this Act.

In order to qualify, an expert or, in the case of an expert consulting firm, the individual who shall be directly responsible for the work, must have:

(A) direct previous experience administering a large scale competitive feedstock procurement process involving coal and natural gas;

(B) an advanced degree in economics, mathematics, engineering, or a related area of study;

(C) ten years of experience in the energy sector, including coal and gas procurement and managing fuel SB0678 Engrossed - 30 - LRB097 04938 ASK 44978 b supply risk;

(D) expertise in feedstock market rules and practices, which may be particularized to the specific type of feedstock to be purchased in that procurement event;

(E) expertise in credit and contract protocols;

(F) adequate resources to perform and fulfill the required functions and responsibilities;

and (G) the absence of a conflict of interest and inappropriate bias for or against potential bidders or the initial clean coal facility.

(3) The Agency shall provide the initial clean coal facility and other interested parties with the lists of qualified experts or expert consulting firms identified through the request for qualifications processes that are under consideration to develop the feedstock procurement plans and to serve as the feedstock procurement administrator.

The Agency shall also provide the initial clean coal facility and other interested parties with each qualified expert's or expert consulting firm's response to the request for qualifications.

All information provided under this subparagraph (3) shall also be provided to the Commission.

The Agency may provide by rule for fees associated with supplying the information to the initial clean coal facility and other interested parties.

The initial clean coal facility and other interested parties SB0678 Engrossed - 31 - LRB097 04938 ASK 44978 b shall, within 5 business days after receiving the lists and information, notify the Agency in writing if they object to any experts or expert consulting firms on the lists.

Objections shall be based on:

(A) failure to satisfy qualification criteria;

(B) identification of a conflict of interest;

or (C) evidence of inappropriate bias for or against potential bidders or the initial clean coal facility.

The Agency shall remove experts or expert consulting firms from the lists within 10 days after receiving the objections if there is a reasonable basis for an objection and provide the updated lists to the initial clean coal facility and other interested parties.

If the Agency fails to remove an expert or expert consulting firm from a list, then an objecting party may seek review by the Commission within 5 days thereafter by filing a petition, and the Commission shall render a ruling on the petition within 10 days.

There is no right of appeal of the Commission's ruling.

(4) The Agency shall issue requests for proposals to the qualified experts or expert consulting firms to develop a feedstock procurement plan for the initial clean coal facility and to serve as feedstock procurement administrator.

(5) The Agency shall select an expert or expert consulting firm to develop feedstock procurement plans SB0678 Engrossed - 32 - LRB097 04938 ASK 44978 b based on the proposals submitted and shall award at least one-year contracts to those selected with an option for the Agency for renewal for an additional length of time equal to the term of the contract.

(6) The Agency shall select, with approval of the Commission, an expert or expert consulting firm to serve as feedstock procurement administrator based on the proposals submitted.

If the Commission rejects the Agency's selection within 5 days after being notified of the Agency's selection, then the Agency shall submit another recommendation within 3 days after the Commission's rejection based on the proposals submitted.

The Agency shall award a 5-year contract to the expert or expert consulting firm so selected with Commission approval with an option for the Agency for a 5-year renewal.

(b) The experts or expert consulting firms retained by the Agency under subsection (a) of this Section shall, as appropriate, prepare procurement plans, and conduct a competitive procurement process as prescribed in Section 16-111.5 of the Public Utilities Act, to ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time, taking into account any benefits of price stability, for eligible retail customers of electric utilities that on December 31, 2005 provided electric service to at least 100,000 customers in the State of Illinois, and for SB0678 Engrossed - 33 - LRB097 04938 ASK 44978 b eligible Illinois retail customers of small multi-jurisdictional electric utilities that (i) on December 31, 2005 served less than 100,000 customers in Illinois and (ii) request a procurement plan for their Illinois jurisdictional load.

(b-5) The experts or expert consulting firms retained by the Agency pursuant to subsection (a-5) of this Section shall, as appropriate, prepare feedstock procurement plans and conduct a competitive feedstock procurement process as prescribed in Section 1-79 of this Act to ensure adequate, reliable, affordable feedstocks, taking into account any benefits of price stability, for the initial clean coal facility.

(c) Renewable portfolio standard.

(1) The procurement plans under subsection (a) of this Section shall include cost-effective renewable energy resources.

A minimum percentage of each utility's total supply to serve the load of eligible retail customers, as defined in Section 16-111.5(a) of the Public Utilities Act, procured for each of the following years shall be generated from cost-effective renewable energy resources:

at least 2% by June 1, 2008;

at least 4% by June 1, 2009;

at least 5% by June 1, 2010;

at least 6% by June 1, 2011;

at least 7% by June 1, 2012;

at least 8% by June 1, 2013;

at least 9% by June 1, 2014;

at least 10% by June 1, 2015;

and SB0678 Engrossed - 34 - LRB097 04938 ASK 44978 b increasing by at least 1.5% each year thereafter to at least 25% by June 1, 2025.

For periods beginning on and after June 1, 2012, the procurement plans shall include the procurement of cost-effective renewable energy credits equal to the projected kilowatthour usage of the delivery services non-eligible retail customers within the service area of the electric utility times the applicable renewable energy resource percentage for that year as set forth under this paragraph (1).

To the extent that it is available, at least 75% of the renewable energy resources used to meet these standards shall come from wind generation and, beginning on June 1, 2011, at least the following percentages of the renewable energy resources used to meet these standards shall come from photovoltaics on the following schedule:

0.5% by June 1, 2012, 1.5% by June 1, 2013;

3% by June 1, 2014;

and 6% by June 1, 2015 and thereafter.

Of the renewable energy resources procured pursuant to this Section at least the following percentages shall come from distributed renewable energy generation devices:

0.5% by June 1, 2013, 0.75% by June 1, 2014, and 1% by June 1, 2015 and thereafter.

To the extent available, half of the renewable energy resources procured from distributed renewable energy generation shall come from devices of less than 25 kilowatts in nameplate capacity.

SB0678 Engrossed - 35 - LRB097 04938 ASK 44978 b Renewable energy resources procured from distributed generation devices may also count towards the required percentages for wind and solar photovoltaics.

Procurement of renewable energy resources from distributed renewable energy generation devices shall be done on an annual basis through multi-year contracts of no less than 5 years, and shall consist solely of renewable energy credits.

The Agency shall create credit requirements for suppliers of distributed renewable energy.

In order to minimize the administrative burden on contracting entities, the Agency shall solicit the use of third-party organizations to aggregate distributed renewable energy into groups of no less than one megawatt in installed capacity.

These third-party organizations shall administer contracts with individual distributed renewable energy generation device owners.

An individual distributed renewable energy generation device owner shall have the ability to measure the output of his or her distributed renewable energy generation device.

For purposes of this subsection (c), "cost-effective" means that the costs of procuring renewable energy resources to serve the load of the electric utility's eligible retail customers and the costs of procuring renewable energy credits with respect to the kilowatthour usage of the delivery services non-eligible retail customers within the electric SB0678 Engrossed - 36 - LRB097 04938 ASK 44978 b utility's service area do not cause the applicable limits limit stated in paragraph (2) of this subsection (c) to be exceeded and do not exceed benchmarks based on market prices for renewable energy resources in the region, which shall be developed by the procurement administrator, in consultation with the Commission staff, Agency staff, and the procurement monitor and shall be subject to Commission review and approval.

(2) For purposes of this subsection (c), the required procurement of cost-effective renewable energy resources to serve the load of the electric utility's eligible retail customers for a particular year shall be measured as a percentage of the actual amount of electricity (megawatt-hours) supplied by the electric utility to eligible retail customers in the planning year ending immediately prior to the procurement and, for periods beginning on and after June 1, 2012, the required procurement of cost-effective renewable energy credits with respect to the delivery services non-eligible retail customers of the electric utility shall be based on the actual amount of electricity (megawatt-hours) delivered by the electric utility to delivery services non-eligible retail customers in its service area in the planning year ending immediately prior to the procurement.

For purposes of this subsection (c), the amount paid per SB0678 Engrossed - 37 - LRB097 04938 ASK 44978 b kilowatthour means the total amount paid for electric service expressed on a per kilowatthour basis.

For purposes of this subsection (c), the total amount paid for electric service includes without limitation amounts paid for supply, transmission, distribution, surcharges, and add-on taxes.

Notwithstanding the requirements of this subsection (c), the total of renewable energy resources procured pursuant to the procurement plan with respect to the load of the electric utility's eligible retail customers for any single year shall be reduced by an amount necessary to limit the annual estimated average net increase due to the costs of these resources included in the amounts paid by eligible retail customers in connection with electric service to:

(A) in 2008, no more than 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007;

(B) in 2009, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2008 or 1% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007;

(C) in 2010, the greater of an additional 0.5% of the amount paid per kilowatthour by those SB0678 Engrossed - 38 - LRB097 04938 ASK 44978 b customers during the year ending May 31, 2009 or 1.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007;

(D) in 2011, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2010 or 2% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007;

and (E) thereafter, the amount of renewable energy resources procured pursuant to the procurement plan for any single year shall be reduced by an amount necessary to limit the estimated average net increase due to the cost of these resources included in the amounts paid by eligible retail customers in connection with electric service to no more than the greater of 2.015% of the amount paid per kilowatthour by those customers during the year ending May 31, 2007 or the incremental amount per kilowatthour paid for these resources in 2011.

For periods beginning on and after June 1, 2012, any excluded renewable energy resources contract costs shall be recoverable by the electric utility through its tariffed charges for delivery services pursuant to Section 16-108 of the Public Utilities Act to its residential class delivery services non-eligible SB0678 Engrossed - 39 - LRB097 04938 ASK 44978 b retail customers.

Notwithstanding the requirements of this subsection (c), for years beginning on and after June 1, 2012, the total amount of renewable energy credits procured pursuant to the procurement plan with respect to the kilowatthour usage of the delivery services non-eligible retail customers in the electric utility's service area shall be reduced by an amount necessary to limit the cost of renewable energy credits and excluded renewable energy resources costs included in the electric utility's charges per kilowatthour for delivery services to its delivery services non-eligible retail customers to an amount equal to no more than 2.015% of the amount paid by the electric utility's eligible retail customers per kilowatthour for electric service during the year ended May 31, 2007.

No later than June 30, 2011, the Commission shall review the limitation on the amount of renewable energy resources procured pursuant to this subsection (c) and report to the General Assembly its findings as to whether that limitation unduly constrains the procurement of cost-effective renewable energy resources.

(3) (Blank).

Through June 1, 2011, renewable energy resources shall be counted for the purpose of SB0678 Engrossed - 40 - LRB097 04938 ASK 44978 b meeting the renewable energy standards set forth in paragraph (1) of this subsection (c) only if they are generated from facilities located in the State, provided that cost-effective renewable energy resources are available from those facilities.

If those cost-effective resources are not available in Illinois, they shall be procured in states that adjoin Illinois and may be counted towards compliance.

If those cost-effective resources are not available in Illinois or in states that adjoin Illinois, they shall be purchased elsewhere and shall be counted towards compliance.

After June 1, 2011, cost-effective renewable energy resources located in Illinois and in states that adjoin Illinois may be counted towards compliance with the standards set forth in paragraph (1) of this subsection (c).

If those cost-effective resources are not available in Illinois or in states that adjoin Illinois, they shall be purchased elsewhere and shall be counted towards compliance.

(4) The electric utility shall retire all renewable energy credits used to comply with the standard.

(5) Beginning with the year commencing June 1, 2010, and ending with the year commencing June 1, 2011, an electric utility subject to this subsection (c) shall apply the lesser of the maximum alternative SB0678 Engrossed - 41 - LRB097 04938 ASK 44978 b compliance payment rate or the most recent estimated alternative compliance payment rate for its service territory for the corresponding compliance period, established pursuant to subsection (d) of Section 16-115D of the Public Utilities Act to its retail customers that take service pursuant to the electric utility's hourly pricing tariff or tariffs.

The electric utility shall retain all amounts collected as a result of the application of the alternative compliance payment rate or rates to such customers, and, beginning in 2011, the utility shall include in the information provided under item (1) of subsection (d) of Section 16-111.5 of the Public Utilities Act the amounts collected under the alternative compliance payment rate or rates for the prior year ending May 31.

Notwithstanding any limitation on the procurement of renewable energy resources imposed by item (2) of this subsection (c), the Agency shall increase its spending on the purchase of renewable energy resources to be procured by the electric utility for the next plan year by an amount equal to the amounts collected by the utility under the alternative compliance payment rate or rates in the prior year ending May 31.

For years commencing on and after June 1, 2012, the kilowatthours supplied by the electric utility to its retail customers that take service pursuant to the electric SB0678 Engrossed - 42 - LRB097 04938 ASK 44978 b utility's hourly pricing tariff or tariffs shall be considered usage of delivery services non-eligible retail customers.

(6) Each annual procurement plan for periods beginning on and after June 1, 2012 shall include (i) the procurement of electricity from cost-effective renewable energy resources to meet the renewable energy resource requirements specified in paragraph (2) of this subsection (c) with respect to the load of the electric utility's eligible retail customers and (ii) the procurement of renewable energy credits to meet the renewable energy resource requirements specified in paragraph (2) of this subsection (c) with respect to the kilowatthour usage of the electric utility's delivery services non-eligible retail customers;

provided that the electric utility's obligation to purchase renewable energy credits with respect to the kilowatthour usage of delivery services non-eligible retail customers shall be reduced by the amount of any purchases of renewable energy credits by the Agency for the year in respect of the electric utility's service area pursuant to Section 1-56 of this Act using the Illinois Power Agency Renewable Energy Resources Fund.

All procurements of bundled renewable energy resources and renewable energy credits in the procurement plans of the electric utilities shall be pursuant to competitive bidding processes and shall be approved by the Commission SB0678 Engrossed - 43 - LRB097 04938 ASK 44978 b pursuant to Section 16-111.5 of the Public Utilities Act.

Procurements of bundled renewable energy resources shall be used to secure supply from renewable energy assets that can provide monthly energy quantity guarantees for peak and off-peak wrap periods.

Projects shall be chosen based on the value of the energy procured.

The value of the energy shall be determined by the Agency by utilizing a "time of day" methodology to evaluate the energy profile of each project.

(d) Clean coal portfolio standard.

(1) The General Assembly finds that there are abundant and cost-effective supplies of high volatile rank bituminous coal with a sulfur content of at least 1.7 pounds per million btu energy content, and that it is technologically feasible to produce electric energy using such coal supplies reliably.

The General Assembly further finds that state-of-the-art gasification systems are available to convert coal supplies with the foregoing characteristics into gas and that it is feasible to use such gas to generate electric energy without exceeding allowable emission rates for sulfur dioxide, nitrogen oxides, carbon monoxide, particulates, and mercury for a natural gas-fired combined-cycle facility of the same size as and in the same location as a clean coal facility incorporating a gasification system and a combined cycle power block.

The General Assembly also finds that it is SB0678 Engrossed - 44 - LRB097 04938 ASK 44978 b feasible to engineer and construct systems designed to capture and sequester the percentages of the carbon dioxide emissions from clean coal facilities as specified in this Act.

Accordingly, the General Assembly finds it necessary for the health, safety, welfare, and prosperity of Illinois citizens to require Illinois electric utilities and alternative retail electric suppliers to contract with the initial clean coal facility to meet a portion of the needs of each such electric utility's and alternative retail electric supplier's retail load on the terms and conditions described under this Act.

The procurement plans under subsection (a) of this Section shall include electricity generated using clean coal.

Each electric utility shall enter into one or more sourcing agreements with the initial clean coal facility, as provided in paragraph (3) of this subsection (d), covering electricity generated by the initial clean coal facility representing (A) at least 5% of that each utility's total supply to serve the load of eligible retail customers in the immediately preceding year 2015 and each year thereafter, as described in paragraph (3) of this subsection (d), or (B) such lesser amount as may be available from the initial clean coal facility, reduced by subject to the limits on the amount of power to be purchased specified in paragraph (2) of this subsection (d).

It is the goal of the State that by January 1, 2025, SB0678 Engrossed - 45 - LRB097 04938 ASK 44978 b 25% of the electricity used in the State shall be generated by cost-effective clean coal facilities.

For purposes of this subsection (d), "cost-effective" means that the expenditures pursuant to such sourcing agreements do not cause the limit stated in paragraph (2) of this subsection (d) to be exceeded and do not exceed cost-based benchmarks, which shall be developed to assess all expenditures pursuant to such sourcing agreements covering electricity generated by clean coal facilities, other than the initial clean coal facility, by the procurement administrator, in consultation with the Commission staff, Agency staff, and the procurement monitor and shall be subject to Commission review and approval.

(A) A utility party to a sourcing agreement shall immediately retire any emission credits that it receives in connection with the electricity covered by such agreement.

(B) Utilities shall maintain adequate records documenting the purchases under the sourcing agreement to comply with this subsection (d) and shall file an accounting with the load forecast that must be filed with the Agency by July 15 of each year, in accordance with subsection (d) of Section 16-111.5 of the Public Utilities Act.

(C) A utility shall be deemed to have complied with the clean coal portfolio standard specified in this SB0678 Engrossed - 46 - LRB097 04938 ASK 44978 b subsection (d) if the utility enters into a sourcing agreement as required by this subsection (d).

(2) For purposes of this subsection (d), the required execution of sourcing agreements with the initial clean coal facility for a particular year shall be measured as a percentage of the actual amount of electricity (megawatt-hours) supplied by the electric utility to eligible retail customers in the immediately preceding year planning year ending immediately prior to the agreement's execution.

For purposes of this subsection (d), the amount paid per kilowatthour means the total amount paid for electric service expressed on a per kilowatthour basis.

For purposes of this subsection (d), the total amount paid for electric service includes without limitation amounts paid for supply, transmission, distribution, surcharges and add-on taxes.

Notwithstanding the requirements of this subsection (d), the total amount purchased paid under sourcing agreements with the initial clean coal facility clean coal facilities pursuant to the procurement plan for any given year shall be reduced by an amount necessary to limit the annual estimated average net increase due to the costs of these resources included in the amounts paid by eligible retail customers in connection with electric service to:

(A) in 2010, no more than 0.5% of the amount paid per kilowatthour by those customers during SB0678 Engrossed - 47 - LRB097 04938 ASK 44978 b the year ending May 31, 2009;

(B) in 2011, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2010 or 1% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009;

(C) in 2012, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2011 or 1.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009;

(D) in 2013, the greater of an additional 0.5% of the amount paid per kilowatthour by those customers during the year ending May 31, 2012 or 2% of the amount paid per kilowatthour by those customers during the year ending May 31, 2009;

and (E) thereafter :

(i) A calculation shall be made for each year to determine whether , the total amount paid under sourcing agreements with clean coal facilities pursuant to the procurement plan for any single year shall be reduced by an amount necessary to limit the estimated average net per kilowatthour increase due to the cost of electric power purchased under sourcing agreements and these resources included in the amounts paid by small SB0678 Engrossed - 48 - LRB097 04938 ASK 44978 b electric eligible retail customers in connection with electric service exceeds to no more than the greater of (i) 2.015% of the amount paid per kilowatthour by eligible retail those customers during the year ending May 31, 2009 or (ii) the incremental amount per kilowatthour paid for these resources in 2013.

These requirements may be altered only as provided by statute.

For purposes of such calculation, such average net per kilowatthour increase in rates of small electric customers that are not eligible retail customers shall be deemed to be equal to such average net per kilowatthour increase in rates of eligible retail customers.

(ii) If for any year the small customer rate impact would exceed the limitation described in item (i) of this subparagraph (E), the clean coal fraction for each clean coal electricity buyer shall be adjusted for such year in a manner that will result in (a) the quantity of electric power projected to be purchased by each clean coal electricity buyer being reduced by an amount sufficient to result in such deemed rate impact on all small electric customers (whether served by electric utilities or alternative retail electric suppliers) being equal to such limitation for such SB0678 Engrossed - 49 - LRB097 04938 ASK 44978 b year and (b) any such reductions in amounts allocated to the clean coal electricity buyers in order to achieve the objective described in clause (a) of this item (ii) being allocated to, and purchased and paid for by, the clean coal electricity buyers in proportion to their retail sales to large electric customers.

(iii) Each year, after taking account of the adjustment, if any, provided for in item (ii) of this subparagraph (E), a calculation shall be made to determine whether the large customer deemed rate impact for such year exceeds $0.005 per kilowatthour.

The "large customer deemed rate impact" for any year is the projected increase in electric rates of large electric customers (whether served by electric utilities or alternative retail electric suppliers) due to the cost of electric power purchased under sourcing agreements to the extent it is based on each clean coal electricity buyer's retail sales to large electric customers, which shall be calculated in substantially the same manner as the calculation of rate impact on small electric customers, and shall assume that such cost of purchases under sourcing agreements is passed through proportionally by the clean coal electricity SB0678 Engrossed - 50 - LRB097 04938 ASK 44978 b buyers to their large electric customers.

The calculation of the large customer deemed rate impact shall (a) assume that the total retail sales (expressed in kilowatthours sold) to large electric customers by all clean coal electricity buyers for any year is the greater of the actual amount of such sales in such year and the amount of such sales in 2009 and (b) exclude from the calculation any actual costs for such year incurred by the initial clean coal facility to the extent such costs exceed the corresponding amount assumed in the "reference case" of the facility cost report for the initial clean coal facility for such year and are not principally within the reasonable control of the initial clean coal facility.

Any operating costs or revenues deviating from the corresponding costs assumed in the "reference case" of the facility cost report for the initial clean coal facility as a result of changes in market prices, including, but not limited to, prices of coal, natural gas, electricity, by-products, and emissions allowances, shall be deemed to be outside of the reasonable control of the initial clean coal facility and excluded from the calculation.

SB0678 Engrossed - 51 - LRB097 04938 ASK 44978 b Any costs exceeding the corresponding costs assumed in the "reference case" of the facility cost report for the initial clean coal facility as a result of changes in capital costs, fixed operating costs, variable operating costs, operating efficiency, and availability, except in each case to the extent resulting from a change in market prices, as described in the immediately preceding paragraph, or from a change in law, as defined in subsection (b) of Section 1-76 of this Act, shall be deemed to be within the reasonable control of the initial clean coal facility and included in the calculation.

(iv) If for any year the large customer deemed rate impact would exceed the limitation described in item (iii) of this subparagraph (E), the quantity of electric power required to be purchased by each clean coal electricity buyer that serves large electric customers under its sourcing agreement for such year shall be reduced by such amount as will result in the large customer deemed rate impact being equal to such limitation for such year, and the clean coal fractions of each clean coal electricity buyer that serves large electric customers shall be adjusted for such year to reflect this reduction;

provided, however, that SB0678 Engrossed - 52 - LRB097 04938 ASK 44978 b the reduction under this item (iv) shall not exceed in any year an amount that would result in revenues under the sourcing agreements being reduced by more than $50,000,000 in the aggregate for such year.

Any quantities of electric power not required to be purchased pursuant to the operation of the immediately preceding sentence may be disposed of by the initial clean coal facility for its own account, and the proceeds of any sales of such electric power shall not be included in the formula rate.

(v) The details of the calculations contemplated by this subparagraph (E) shall be set forth in the sourcing agreements.

(vi) No later than June 30, 2016 2015, the Commission shall review the limitation on the total amount purchased paid under sourcing agreements, if any, with the initial clean coal facility facilities pursuant to this subsection (d) and report to the General Assembly its findings as to the effect of the whether that limitation on the initial clean coal facility, electric utilities, alternative retail electric suppliers, and customers of the electric utilities and the alternative retail electric suppliers unduly constrains the amount of electricity generated by SB0678 Engrossed - 53 - LRB097 04938 ASK 44978 b cost-effective clean coal facilities that is covered by sourcing agreements.

(3) Initial clean coal facility.

In order to promote the use development of clean coal electric power facilities in Illinois, each electric utility subject to this Section shall execute a sourcing agreement to source electricity from the initial clean coal facility.

The Agency shall accept applications to be designated the initial clean coal facility for a period of 30 days after the effective date of this amendatory Act of the 97th General Assembly.

Each application shall include a proposed sourcing agreement in accordance with the requirements of this paragraph (3) and information showing that the applicant meets the other criteria set out in the definition of initial clean coal facility provided in Section 1-10 of this Act.

In the event that only one proposed initial clean coal facility that meets each of the requirements submits a proposed sourcing agreement to the Agency within that time period, the Agency shall select such proposed initial clean coal facility as the initial clean coal facility.

In the event that more than one proposed initial clean coal facility that meets each of the requirements submit a proposed sourcing agreement to the Agency within that time period, the Agency shall select as the initial clean coal facility the electric generating facility that the Agency determines best promotes the needs and interests of the citizens of SB0678 Engrossed - 54 - LRB097 04938 ASK 44978 b the State of Illinois.

In making such determination, the Agency shall take into account for each proposed initial clean coal facility the technical and economic feasibility of such facility, including access to capital and the financeability of the facility based upon the proposed sourcing agreement, the projected environmental performance of such facility, the ability of such facility to be dispatched to support the transmission grid's capability to integrate with wind, solar, and other intermittent resources, and the reliability and cost of electric transmission service from the facility to the electric utilities.

The Agency shall announce the designation of the initial clean coal facility within 45 days after the effective date of this amendatory Act of the 97th General Assembly.

a proposed clean coal facility in Illinois (the "initial clean coal facility") that will have a nameplate capacity of at least 500 MW when commercial operation commences, that has a final Clean Air Act permit on the effective date of this amendatory Act of the 95th General Assembly, and that will meet the definition of clean coal facility in Section 1-10 of this Act when commercial operation commences.

The sourcing agreements with this initial clean coal facility shall be subject to both approval of the initial clean coal facility by the General Assembly and satisfaction of the requirements of paragraph (4) of this subsection (d) and shall be executed SB0678 Engrossed - 55 - LRB097 04938 ASK 44978 b within 90 days after any such approval by the General Assembly.

The Agency and the Commission shall have authority to inspect all books and records associated with the initial clean coal facility during the term of such a sourcing agreement.

A utility's sourcing agreement for electricity produced by the initial clean coal facility shall include:

(A) provisions governing the price paid for electricity generated by the initial clean coal facility, which shall be determined according to clause (iv) of subparagraph (B) of this paragraph (3);

a formula contractual price (the "contract price") approved pursuant to paragraph (4) of this subsection (d), which shall:

(i) be determined using a cost of service methodology employing either a level or deferred capital recovery component, based on a capital structure consisting of 45% equity and 55% debt, and a return on equity as may be approved by the Federal Energy Regulatory Commission, which in any case may not exceed the lower of 11.5% or the rate of return approved by the General Assembly pursuant to paragraph (4) of this subsection (d);

and (ii) provide that all miscellaneous net revenue, including but not limited to net revenue SB0678 Engrossed - 56 - LRB097 04938 ASK 44978 b from the sale of emission allowances, if any, substitute natural gas, if any, grants or other support provided by the State of Illinois or the United States Government, firm transmission rights, if any, by-products produced by the facility, energy or capacity derived from the facility and not covered by a sourcing agreement pursuant to paragraph (3) of this subsection (d) or item (5) of subsection (d) of Section 16-115 of the Public Utilities Act, whether generated from the synthesis gas derived from coal, from SNG, or from natural gas, shall be credited against the revenue requirement for this initial clean coal facility;

(B) power purchase provisions, which shall:

(i) provide that the utility party to the sourcing agreement shall pay the contract price under such sourcing agreement determined pursuant to subparagraph (A);

(ii) require delivery of electricity by the initial clean coal facility to the regional transmission organization market of the utility party to the sourcing agreement;

(iii) require the utility party to the sourcing agreement to buy from the initial clean coal facility in each hour an amount of energy equal to all clean coal energy made available from SB0678 Engrossed - 57 - LRB097 04938 ASK 44978 b the initial clean coal facility during such hour times the clean coal fraction for such utility for the applicable month, provided that the amount purchased by the utility in any year will be limited by paragraph (2) of this subsection (d);

(iv) require the utility party to the sourcing agreement to pay to the initial clean coal facility for each month the following:

the electric generation variable charge multiplied by the quantity of energy required to be purchased by such utility in such month plus the product of the sum of the fuel charge plus the fixed monthly charge, based on the MW of nameplate capacity of the initial clean coal facility's power block, for such month, multiplied by the fraction determined for the utility for such month according to clause (iii) of this subparagraph (B);

for purposes of this clause (iv), "electric generation variable charge", "fuel charge", and "fixed monthly charge" shall each have the meaning ascribed to the term in subsection (a) of Section 1-76 of this Act;

and (v) be considered pre-existing contracts in the utility's procurement plans for eligible retail customers;

the provisions of this subparagraph (B) are severable under Section 1.31 of the Statute on Statutes.

SB0678 Engrossed - 58 - LRB097 04938 ASK 44978 b (B) power purchase provisions, which shall:

(i) provide that the utility party to such sourcing agreement shall pay the contract price for electricity delivered under such sourcing agreement;

(ii) require delivery of electricity to the regional transmission organization market of the utility that is party to such sourcing agreement;

(iii) require the utility party to such sourcing agreement to buy from the initial clean coal facility in each hour an amount of energy equal to all clean coal energy made available from the initial clean coal facility during such hour times a fraction, the numerator of which is such utility's retail market sales of electricity (expressed in kilowatthours sold) in the State during the prior calendar month and the denominator of which is the total retail market sales of electricity (expressed in kilowatthours sold) in the State by utilities during such prior month and the sales of electricity (expressed in kilowatthours sold) in the State by alternative retail electric suppliers during such prior month that are subject to the requirements of this subsection (d) and paragraph (5) of subsection (d) of Section 16-115 of the Public Utilities Act, SB0678 Engrossed - 59 - LRB097 04938 ASK 44978 b provided that the amount purchased by the utility in any year will be limited by paragraph (2) of this subsection (d);

and (iv) be considered pre-existing contracts in such utility's procurement plans for eligible retail customers;

(C) contract for differences provisions, which shall:

(i) require the utility party to such sourcing agreement to contract with the initial clean coal facility in each hour with respect to an amount of energy equal to all clean coal energy made available from the initial clean coal facility during such hour times the clean coal a fraction for such utility for applicable month, the numerator of which is such utility's retail market sales of electricity (expressed in kilowatthours sold) in the utility's service territory in the State during the prior calendar month and the denominator of which is the total retail market sales of electricity (expressed in kilowatthours sold) in the State by utilities during such prior month and the sales of electricity (expressed in kilowatthours sold) in the State by alternative retail electric suppliers during such prior month that are subject to the requirements of this SB0678 Engrossed - 60 - LRB097 04938 ASK 44978 b subsection (d) and paragraph (5) of subsection (d) of Section 16-115 of the Public Utilities Act, provided that the amount purchased paid by the utility in any year will be limited by paragraph (2) of this subsection (d);

(ii) provide that the utility's payment obligation in respect of the quantity of electricity determined pursuant to the preceding clause (i) for any month shall be limited to an amount equal to (1) the difference of the electric generation variable charge, the fuel charge, and the fixed monthly charge, that would be payable by the utility for such month based on such quantity of electricity between the contract price determined pursuant to clause (iv) of subparagraph (B) (A) of this paragraph (3), minus the product of (1) of this subsection (d) and the day-ahead price for electricity delivered to the regional transmission organization market of the electric utility that is party to such sourcing agreement (or any successor delivery point at which such utility's supply obligations are financially settled on an hourly basis) (the "reference price") on the day preceding the day on which the electricity is delivered to the initial clean coal facility busbar, multiplied by (2) the quantity of SB0678 Engrossed - 61 - LRB097 04938 ASK 44978 b electricity determined pursuant to the preceding clause (i), calculated for each hour in such month;

and (iii) not require the utility to take physical delivery of the electricity produced by the facility;

(D) general provisions, which shall:

(i) specify a term of no more than 30 years, commencing on the commercial operation date of the facility;

(ii) provide that electric utilities shall maintain adequate records documenting purchases under the sourcing agreements entered into to comply with this subsection (d) and shall file an accounting with the load forecast that must be filed with the Agency by July 15 of each year, in accordance with subsection (d) of Section 16-111.5 of the Public Utilities Act.

(iii) provide that all costs associated with the initial clean coal facility will be periodically reported to the Federal Energy Regulatory Commission and to purchasers in accordance with applicable laws governing cost-based wholesale power contracts;

(iv) permit the Illinois Power Agency, if it is so authorized by law, to assume ownership of the SB0678 Engrossed - 62 - LRB097 04938 ASK 44978 b initial clean coal facility, without monetary consideration and otherwise on reasonable terms acceptable to the Agency, if the Agency so requests no less than 3 years prior to the end of the stated contract term;

(v) require the owner of the initial clean coal facility to comply with provisions reflecting those set forth in Section 1-76.5 of this Act;

provide documentation to the Commission each year, starting in the facility's first year of commercial operation, accurately reporting the quantity of carbon emissions from the facility that have been captured and sequestered and report any quantities of carbon released from the site or sites at which carbon emissions were sequestered in prior years, based on continuous monitoring of such sites.

If, in any year after the first year of commercial operation, the owner of the facility fails to demonstrate that the initial clean coal facility captured and sequestered at least 50% of the total carbon emissions that the facility would otherwise emit or that sequestration of emissions from prior years has failed, resulting in the release of carbon dioxide into the atmosphere, the owner of the facility must offset excess emissions.

Any such carbon offsets must be SB0678 Engrossed - 63 - LRB097 04938 ASK 44978 b permanent, additional, verifiable, real, located within the State of Illinois, and legally and practicably enforceable.

The cost of such offsets for the facility that are not recoverable shall not exceed $15 million in any given year.

No costs of any such purchases of carbon offsets may be recovered from a utility or its customers.

All carbon offsets purchased for this purpose and any carbon emission credits associated with sequestration of carbon from the facility must be permanently retired.

The initial clean coal facility shall not forfeit its designation as a clean coal facility if the facility fails to fully comply with the applicable carbon sequestration requirements in any given year, provided the requisite offsets are purchased.

However, the Attorney General, on behalf of the People of the State of Illinois, may specifically enforce the facility's sequestration requirement and the other terms of this contract provision.

Compliance with the sequestration requirements and offset purchase requirements specified in paragraph (3) of this subsection (d) shall be reviewed annually by an independent expert retained by the owner of the initial clean coal facility, with the advance written approval of the Attorney General.

The SB0678 Engrossed - 64 - LRB097 04938 ASK 44978 b Commission may, in the course of the review specified in item (vii), reduce the allowable return on equity for the facility if the facility wilfully fails to comply with the carbon capture and sequestration requirements set forth in this item (v);

(vi) include limits on, and accordingly provide for a reduction modification of, the amount the utility is required to source under the sourcing agreement consistent with paragraph (2) of this subsection (d);

(vii) require Commission review:

(1) to determine the justness, reasonableness, and prudence of the inputs to the formula referenced in subparagraphs (A)(i) through (A)(iii) of paragraph (3) of this subsection (d), prior to an adjustment in those inputs including, without limitation, the capital structure and return on equity, fuel costs, and other operations and maintenance costs and (2) to approve the costs to be passed through to customers under the sourcing agreement by which the utility satisfies its statutory obligations.

Commission review shall occur no less than every 3 years, regardless of whether any adjustments have been proposed, and shall be completed within 9 months;

SB0678 Engrossed - 65 - LRB097 04938 ASK 44978 b (vii) (viii) limit the utility's obligation to such amount as the utility is allowed to recover through tariffs filed with the Commission, provided that neither the clean coal facility nor the utility waives any right to assert federal pre-emption or any other argument in response to a purported disallowance of recovery costs;

(viii) (ix) limit the utility's or alternative retail electric supplier's obligation to incur any liability to only those times after until such time as the facility is in commercial operation and generating power and energy and such power and energy is being delivered to the facility busbar;

(ix) provide that each electric utility shall have the right to determine whether the obligations of the utility party under the sourcing agreement shall be governed by the power purchase provisions or the contract for differences provisions before entering into the sourcing agreements;

the provisions of this item (ix) are severable under Section 1.31 of the Statute on Statutes;

(x) provide that the owner or owners of the initial clean coal facility, which is the counterparty to such sourcing agreement, shall have the right from time to time to elect whether SB0678 Engrossed - 66 - LRB097 04938 ASK 44978 b the obligations of the utility party thereto shall be governed by the power purchase provisions or the contract for differences provisions;

(x) (xi) append documentation showing that the formula rate and contract, insofar as they relate to the power purchase provisions, have been approved by the Federal Energy Regulatory Commission pursuant to Section 205 of the Federal Power Act;

(xi) (xii) provide that any changes to the terms of the contract, insofar as such changes relate to the power purchase provisions, are subject to review under the public interest standard applied by the Federal Energy Regulatory Commission pursuant to Sections 205 and 206 of the Federal Power Act;

and (xii) (xiii) conform with customary lender requirements in power purchase agreements used as the basis for financing non-utility generators;.

(xiii) provide for performance incentives regarding availability, efficiency, and by-product quantities, with premium performance and shortfalls in performance to result in positive and negative adjustments, respectively, to the rate of return approved by the Commission, provided that such rate of return in any year shall SB0678 Engrossed - 67 - LRB097 04938 ASK 44978 b not be decreased by more than $25,000,000 or increased by more than $12,500,000 as a result of such performance incentives.

Such performance incentives shall be structured so that any increases in the rate of return as a result of such performance incentives are designed not to exceed the projected benefits to the buyers resulting from the initial clean coal facility's achievement of that performance incentive;

(xiv) include forecasting and scheduling obligations that take account of the requirements of the applicable regional transmission organizations;

(xv) include operating guidelines relating to the operating configuration and dispatch of the initial clean coal facility, which guidelines shall be subject to change from time to time with input from a committee consisting of representatives of the electric utilities and alternative retail electric suppliers that are parties to sourcing agreements with the initial clean coal facility;

such operating guidelines shall take account the initial clean coal facility's obligations under any agreement for the purchase of SNG entered into pursuant to item (xvi) of this subparagraph (D) and shall be based on SB0678 Engrossed - 68 - LRB097 04938 ASK 44978 b principles of economic dispatch and the assumption that the variable cost of SNG purchased pursuant to such agreement is equal to the market price of natural gas delivered to the initial clean coal facility;

any actions taken or not taken by the owner of the initial clean coal facility in compliance with such operating guidelines shall be deemed to be prudent, and the prudence of the costs resulting from the action shall be evaluated in light of the fact that the initial clean coal facility is required to comply with such operating guidelines;

and (xvi) authorize the initial clean coal facility to enter into an agreement with a clean coal SNG facility or a clean coal SNG brownfield facility for the purchase by the initial clean coal facility during all or part of the term of the sourcing agreement a quantity of SNG produced by such clean coal SNG facility or clean coal SNG brownfield facility each year up to the lesser of (x) the initial clean coal facility's requirements for imported methane in such year and (y) 16% of the SNG produced by such clean coal SNG facility or clean coal SNG brownfield facility during such year at a delivered price to be set forth in such agreement;

such agreement shall provide for the SB0678 Engrossed - 69 - LRB097 04938 ASK 44978 b timing of gas deliveries in a manner that reasonably accommodates the initial clean coal facility's fuel requirements and generation schedule;

the parties to such agreement may, if they mutually agree, structure such agreement as a financial settlement arrangement for the quantities of SNG set forth above, and such arrangement shall be deemed to be an agreement contemplated by this item (xvi);

the form for such agreement shall be subject to approval by the Agency pursuant to a procedure substantially the same as that provided in paragraph (4) of this subsection (d) for the sourcing agreements, with the clean coal SNG facility or clean coal SNG brownfield facility participating in place of each electric utility, and pursuant to a schedule to be proposed by the initial clean coal facility and approved by the Agency.

(4) Effective date of sourcing agreements with the initial clean coal facility.

No later than 30 days after the effective date of this amendatory Act of the 97th General Assembly, the initial clean coal facility shall submit a draft sourcing agreement to the Agency and each electric utility required to enter into such agreements pursuant to paragraph (3) of this subsection and the initial clean coal facility and each such electric utility SB0678 Engrossed - 70 - LRB097 04938 ASK 44978 b shall promptly and diligently negotiate in good faith over the terms of the sourcing agreement.

Within 30 days after receipt of the draft sourcing agreement, each such electric utility shall provide the Agency and the owner of the initial clean coal facility with its comments and recommended revisions to the draft sourcing agreement.

Within 15 days after the receipt of the electric utility's comments and recommended revisions, the owner of the initial clean coal facility shall submit its responsive comments and a further revised draft of the sourcing agreement to the Agency.

The Agency shall review the draft sourcing agreement and comments and retain an independent, qualified, and experienced mediator to mediate disputes over the draft sourcing agreement's terms.

The mediator shall not own or control any direct or indirect interest in the initial clean coal facility and shall have no contractual relationship with the initial clean coal facility.

The mediator shall have knowledge of the energy industry.

If the parties to the sourcing agreement do not agree on the terms in the sourcing agreement within 15 days after receiving the owner's responsive comments and further revised draft, then the mediator retained by the Agency shall mediate the dispute between the parties.

If the parties are in agreement on the terms of the sourcing agreement, then the Agency shall approve the final draft SB0678 Engrossed - 71 - LRB097 04938 ASK 44978 b sourcing agreement within 30 days after the parties reach agreement and notify the Commission of that agreement.

If, within 30 days after the commencement of mediation, the parties have failed to come to agreement, then the Agency shall, with assistance, as appropriate, from the mediator retained pursuant to this paragraph (4), review and revise the draft sourcing agreement as necessary.

The Agency may approve a sourcing agreement only after it finds the sourcing agreement is consistent with the provisions of this Act and contains only terms that are balanced and equitable and fairly protect the interests of the parties to the sourcing agreement, with such approval to occur no later than 60 days after the commencement of the mediation.

The Agency shall not withhold or condition its approval of the sourcing agreement based upon least cost resource principles or whether or not it would be prudent for buyers to enter into such an agreement if there were no legal requirement to do so, nor shall the resolution of open issues be based on these principles.

If the sourcing agreement is approved, then each electric utility required to enter into a sourcing agreement shall have 30 days after either the Agency's approval or the issuance of any necessary approval by the Federal Energy Regulatory Commission, whichever is later, to enter into the sourcing agreement.

The Agency shall submit the approved sourcing agreement to the Commission SB0678 Engrossed - 72 - LRB097 04938 ASK 44978 b within 15 days after approval.

Each electric utility and the initial clean coal facility shall pay a reasonable fee as required by the Agency for its services under this paragraph (4) and shall pay the mediator's reasonable fees, if any.

The Agency shall adopt and make public a policy detailing the process for retaining a mediator under this paragraph (4).

(4) Effective date of sourcing agreements with the initial clean coal facility.

Any proposed sourcing agreement with the initial clean coal facility shall not become effective unless a facility cost report and Commission report, as described in this paragraph (4), the following reports are prepared and submitted, whether prepared and submitted before or after the effective date of this amendatory Act of the 97th General Assembly.

and authorizations and approvals obtained:

(i) Facility cost report.

The owner of the initial clean coal facility shall submit to the Commission, the Agency, and the General Assembly a front-end engineering and design study, a facility cost report, method of financing (including but not limited to structure and associated costs), and an operating and maintenance cost quote for the facility (collectively "facility cost report"), which shall be prepared in accordance with the requirements of this paragraph (4) of subsection (d) of this Section, and shall provide the Commission and the SB0678 Engrossed - 73 - LRB097 04938 ASK 44978 b Agency access to the work papers, relied upon documents, and any other backup documentation related to the facility cost report.

(ii) Commission report.

Within 6 months following receipt of the facility cost report, the Commission, in consultation with the Agency, shall submit a Commission report to the General Assembly setting forth its analysis of the facility cost report.

Such report shall include, but not be limited to, a comparison of the costs associated with electricity generated by the initial clean coal facility to the costs associated with electricity generated by other types of generation facilities, an analysis of the rate impacts on residential and small business customers over the life of the sourcing agreements, and an analysis of the likelihood that the initial clean coal facility will commence commercial operation by and be delivering power to the facility's busbar by 2016.

To assist in the preparation of its report, the Commission, in consultation with the Agency, may hire one or more experts or consultants, the costs of which shall be paid for by the owner of the initial clean coal facility.

The Commission and Agency may begin the process of selecting such experts or consultants prior to receipt of the facility cost report.

(iii) General Assembly approval.

The proposed sourcing agreements shall not take effect unless, SB0678 Engrossed - 74 - LRB097 04938 ASK 44978 b based on the facility cost report and the Commission's report, the General Assembly enacts authorizing legislation approving (A) the projected price, stated in cents per kilowatthour, to be charged for electricity generated by the initial clean coal facility, (B) the projected impact on residential and small business customers' bills over the life of the sourcing agreements, and (C) the maximum allowable return on equity for the project;

and (iv) Commission review.

If the General Assembly enacts authorizing legislation pursuant to subparagraph (iii) approving a sourcing agreement, the Commission shall, within 90 days of such enactment, complete a review of such sourcing agreement.

During such time period, the Commission shall implement any directive of the General Assembly, resolve any disputes between the parties to the sourcing agreement concerning the terms of such agreement, approve the form of such agreement, and issue an order finding that the sourcing agreement is prudent and reasonable.

The facility cost report shall be prepared as follows:

(A) The facility cost report shall be prepared by duly licensed engineering and construction firms detailing the estimated capital costs payable to one or SB0678 Engrossed - 75 - LRB097 04938 ASK 44978 b more contractors or suppliers for the engineering, procurement and construction of the components comprising the initial clean coal facility and the estimated costs of operation and maintenance of the facility.

The facility cost report shall include:

(i) an estimate of the capital cost of the core plant based on one or more front end engineering and design studies for the gasification island and related facilities.

The core plant shall include all civil, structural, mechanical, electrical, control, and safety systems ;

and.

(ii) an estimate of the capital cost of the balance of the plant, including any capital costs associated with sequestration of carbon dioxide emissions and all interconnects and interfaces required to operate the facility, such as transmission of electricity, construction or backfeed power supply, pipelines to transport substitute natural gas or carbon dioxide, potable water supply, natural gas supply, water supply, water discharge, landfill, access roads, and coal delivery.

In the facility cost report, the The quoted construction costs shall be expressed in nominal dollars as of the date that the quote is prepared and shall include (1) capitalized financing costs during SB0678 Engrossed - 76 - LRB097 04938 ASK 44978 b construction, (2) taxes, insurance, and other owner's costs, and (3) an assumed escalation in materials and labor beyond the date as of which the construction cost quote is expressed.

(B) In the facility cost report, the The front end engineering and design study for the gasification island and the cost study for the balance of plant shall include sufficient design work to permit quantification of major categories of materials, commodities and labor hours, and receipt of quotes from vendors of major equipment required to construct and operate the clean coal facility.

(C) The facility cost report shall also include an operating and maintenance cost quote that will provide the estimated cost of delivered fuel, personnel, maintenance contracts, chemicals, catalysts, consumables, spares, and other fixed and variable operations and maintenance costs.

(a) The delivered fuel cost estimate will be provided by a recognized third party expert or experts in the fuel and transportation industries.

(b) The balance of the operating and maintenance cost quote, excluding delivered fuel costs, will be developed based on the inputs provided by duly licensed engineering and construction firms performing the construction SB0678 Engrossed - 77 - LRB097 04938 ASK 44978 b cost quote, potential vendors under long-term service agreements and plant operating agreements, or recognized third party plant operator or operators.

The operating and maintenance cost quote (including the cost of the front end engineering and design study) shall be expressed in nominal dollars as of the date that the quote is prepared and shall include (1) taxes, insurance, and other owner's costs, and (2) an assumed escalation in materials and labor beyond the date as of which the operating and maintenance cost quote is expressed.

(D) The facility cost report shall also include (i) an analysis of the initial clean coal facility's ability to deliver power and energy into the applicable regional transmission organization markets and (ii) an analysis of the expected capacity factor for the initial clean coal facility.

(E) Amounts paid to third parties unrelated to the owner or owners of the initial clean coal facility to prepare the core plant construction cost quote, including the front end engineering and design study, and the operating and maintenance cost quote will be reimbursed through Coal Development Bonds.

(5) Re-powering and retrofitting coal-fired power plants previously owned by Illinois utilities to qualify as SB0678 Engrossed - 78 - LRB097 04938 ASK 44978 b clean coal facilities.

During the 2009 procurement planning process and thereafter, the Agency and the Commission shall consider sourcing agreements covering electricity generated by power plants that were previously owned by Illinois utilities and that have been or will be converted into clean coal facilities, as defined by Section 1-10 of this Act.

Pursuant to such procurement planning process, the owners of such facilities may propose to the Agency sourcing agreements with utilities and alternative retail electric suppliers required to comply with subsection (d) of this Section and item (5) of subsection (d) of Section 16-115 of the Public Utilities Act, covering electricity generated by such facilities.

In the case of sourcing agreements that are power purchase agreements, the contract price for electricity sales shall be established on a cost of service basis.

In the case of sourcing agreements that are contracts for differences, the contract price from which the reference price is subtracted shall be established on a cost of service basis.

The Agency and the Commission may approve any such utility sourcing agreements that do not exceed cost-based benchmarks developed by the procurement administrator, in consultation with the Commission staff, Agency staff and the procurement monitor, subject to Commission review and approval.

The Commission shall have authority to inspect all books and records associated with these clean coal SB0678 Engrossed - 79 - LRB097 04938 ASK 44978 b facilities during the term of any such contract.

(6) Costs incurred by a utility under this subsection (d) or pursuant to a contract or sourcing agreement entered into under this subsection (d) shall be deemed prudently incurred and reasonable in amount and the electric utility shall be entitled to full cost recovery pursuant to the tariffs filed with the Commission.

(e) The draft procurement plans are subject to public comment, as required by Section 16-111.5 of the Public Utilities Act and Section 1-78 of this Act.

(f) The Agency shall submit the final procurement plan to the Commission.

The Agency shall revise a procurement plan if the Commission determines that it does not meet the standards set forth in Section 16-111.5 of the Public Utilities Act and Section 1-78 of this Act.

(g) The Agency shall assess fees to each affected utility to recover the costs incurred in preparation of the annual procurement plan for the utility.

(h) The Agency shall assess fees to each bidder to recover the costs incurred in connection with a competitive procurement process.

(i) The Agency shall assess fees to the initial clean coal facility to recover the costs incurred in preparation of each procurement plan for the initial clean coal facility.

(j) The General Assembly finds that enterprises owned SB0678 Engrossed - 80 - LRB097 04938 ASK 44978 b by minorities, women, and persons with disabilities are under-represented in sales of goods and services used in the construction of energy projects and accordingly deems it a prudent business practice that is in the interests of the People of the State of Illinois to develop and promote economic opportunities for enterprises owned by minorities, women, and persons with disabilities in the energy production industry.

The initial clean coal facility, any clean coal facility, any clean coal SNG brownfield facility, and any clean coal SNG facility shall include in any agreement to sell electric power or SNG entered into pursuant to this Act provisions that require the owner of the facility to make a good faith effort to ensure that an amount equal to not less than 15% of the value of its prime construction contract for the facility shall be established as a goal to be awarded to minority owned businesses, female owned businesses, and businesses owned by a person with a disability;

provided that at least 75% of the amount of such total goal shall be for minority owned businesses.

"Minority owned business", "female owned business", and "business owned by a person with a disability" shall have the meanings ascribed to them in Section 2 of the Business Enterprise for Minorities, Females, and Persons with Disabilities Act.

(k) Any clean coal SNG facility or clean coal SNG SB0678 Engrossed - 81 - LRB097 04938 ASK 44978 b brownfield facility shall be authorized to enter into an SNG purchase agreement with the initial clean coal facility as described in item (xvi) of subparagraph (D) of paragraph (3) of subsection (d) of this Section.

(Source:

P.A.

96-159, eff.

8-10-09;

96-1437, eff.

8-17-10;

97-325, eff.

8-12-11.) (20 ILCS 3855/1-76 new) Sec.

1-76.