HB 3609 — THERMAL ENERGY NETWORKS

*LRB10412086AAS22184b* HB3609 104THEngrossed GENERALLRB104 ASSEMBLY12086 StateAAS of22184 Illinoisb andAN 2026ACT HB3609concerning Introducedregulation. 2/18/2025, by Rep.

Ann M.

Williams SYNOPSIS AS INTRODUCED:

ILCS 5/3-101 from Ch.

111 2/3, par.

3-101 ILCS 5/3-128 new ILCS 5/3-129 new ILCS 5/8-513 new Provides that the amendatory Act may be referred to as the Thermal Energy Network and Jobs Acts.

Sets forth a statement of legislative findings and intent.

Amends the Public Utilities Act.

Defines "thermal energy" and "thermal energy network".

Requires the Illinois Commerce Commission to initiate a proceeding within 6 months after the effective date of the amendatory Act to support the development of pilot thermal energy networks.

Provides that within 10 months after the effective date of the amendatory Act, every gas public utility, electric public utility, or combination public utility serving over 100,000 customers shall file with the Commission a petition seeking Commission-approval of at least one and no more than 3 proposed pilot thermal energy network projects.

Requires every gas public utility, electric public utility, or combination public utility constructing or operating a Commission-approved pilot thermal energy network project to report to the Commission, on a quarterly basis and until completion of the pilot thermal energy network project, the status of each pilot thermal energy network project.

Requires every gas public utility, electric public utility, or combination public utility constructing or operating a Commission-approved pilot thermal energy network project to demonstrate that it has entered into a labor peace agreement with a bona fide labor organization that is actively engaged in representing its employees.

Requires the Commission to adopt specified rules within 4 years after the completion of the construction of all thermal energy network projects.

Provides that a gas public utility, electric public utility, or combination public utility required to develop a pilot thermal energy network project shall be permitted to recover all reasonable and prudently incurred costs associated with the development, construction, and operation of one or more pilot thermal energy network projects through general rates or through rates set in a Multi-Year Rate Plan.

Effective immediately.

LRB104 12086 AAS 22184 b A BILL FOR HB3609 LRB104 12086 AAS 22184 b AN ACT concerning regulation.

(4) Thermal energy networks consist of pipe loops between multiple buildings and energy sources, which carry HB3609 Engrossed - 2 - LRB104 12086 AAS 22184 b water and can be connected to by building owners to support heating and cooling and hot water services.

(8) Thermal loop technology provides benefits to participants and non-participants alikealike, including societal benefits to the environment and the market benefits associated with the reduction of both the volume and peak demand of electricity and natural gas.

(9) A utility's access to capital, the utility's experience with networked infrastructure in public HB3609 Engrossed - 3 - LRB104 12086 AAS 22184 b rights-of-way, and the requirement that the utility serve all customers positions the utility well to develop and scale thermal energy networks that are accessible to all customers and to coordinate the development of thermal energy networks with any orderly rightsizing of the utility gas system.

(12) Finally, these findings are especially vital now because the construction industry is experiencing HB3609 Engrossed - 4 - LRB104 12086 AAS 22184 b widespread skill shortages across the country, which are crippling existing capital projects and threatening projects planned for the future.

(3) to promote the successful planning and delivery of thermal energy networks and protect critical investments in such projects by requiring the use of appropriate quality craft labor policies that ensure the development of and access to an adequate supply of well trained, HB3609 Engrossed - 5 - LRB104 12086 AAS 22184 b highly skilled craft persons needed to support timely, reliable, high-quality projects;

The Public Utilities Act is amended by changing Section 3-101 and by adding Sections 3-128, 3-129, HB3609 Engrossed - 6 - LRB104 12086 AAS 22184 b and 8-513 as follows:

"Thermal energy network" means all real estate, fixtures, and personal property operated, owned, used, or to be used for, in connection with, or to facilitate a utility-scale distribution infrastructure project that supplies non-combusting thermal energy.

(220"Thermal ILCSenergy 5/8-513network" new)includes Sec.real estate, fixtures, and personal property that is operated, owned, or used by multiple parties.

HB3609 Engrossed - 7 - LRB104 12086 AAS 22184 b (220 ILCS 5/8-513 new) Sec.

HB3609 - 7 - LRB104 12086 AAS 22184 b (a) The Illinois Commerce Commission shall initiate a proceeding within 6 months after the effective date of this amendatory Act of the 104th General Assembly to support the development of pilot thermal energy networks.

No later than 18 months after the effective date of this amendatory Act of the 104th General Assembly, the Commission shall enter an order approving, approving with modification, or rejecting each proposed pilot thermal energy network project and shall direct HB3609 Engrossed - 8 - LRB104 12086 AAS 22184 b the public utility to implement the pilot thermal energy network projects as approved or approved as modified.

In considering whether to approve or approve as modified each HB3609 - 8 - LRB104 12086 AAS 22184 b pilot thermal energy network project, the Commission shall consider whether the pilot thermal energy network project is in the public interest, whether the pilot thermal energy network project will develop information useful for the Commission in adopting rules governing thermal energy networks, whether the pilot thermal energy network project furthers climate justice and emissions reduction, whether the pilot thermal energy network project advances financial and technical approaches to equitable and affordable building electrification, and whether the pilot thermal energy network project creates benefits to customers and society at large, including, but not limited to, public health benefits in areas with disproportionate environmental or public health burdens, job retention and creation, reliability, and increased affordability of renewable thermal energy options.

(c) If a utility proposes 3 pilot thermal energy network projects, at least one project shall be proposed in economically disadvantaged communities as defined in Section HB3609 Engrossed - 9 - LRB104 12086 AAS 22184 b 5-35 of the Energy Transition Act and at least one shall beinclude focusedan onindustrial existingheat electricapplication heatthat customers.may additionally include residential and commercial applications.

EachPriority public utility shall coordinatebe withgiven otherto publicpilot utilitiesproposals andthat HB3609replace -leak-prone 9natural -gas LRB104distribution 12086infrastructure AAS 22184 b consultants with expertisedistribution oninfrastructure successful pilot projects to ensure that thesupplies pilotnon-combusting projectsthermal areenergy diverseor andthat designedreplaces tothermal informenergy thefor Commission'sbuildings decisionscurrently inheated thewith proceedingelectric onresistance theheat. various ownership, market, and rate structures for thermal energy networks.

Each public utility shall coordinate with other public utilities and consultants with expertise on successful pilot projects to ensure that the pilot projects are diverse and designed to inform the Commission's decisions in the proceeding on the various ownership, market, and rate structures for thermal energy networks.

(c-5) Each public utility shall hold at least one pre-filing public meeting to receive public comment concerning HB3609 Engrossed - 10 - LRB104 12086 AAS 22184 b the proposed thermal energy network in the municipality where the thermal energy network is to be located.

Notice of the public meeting shall be published in a newspaper of general circulation for 3 consecutive weeks, beginning no earlier than one month before the first public meeting.

Notice of the public meeting, including a description of the thermal energy network, must be provided in writing to the clerk of the county where the project is to be located and to the Chief Clerk of the Commission.

A representative of the Commission shall be invited to each pre-filing public meeting.

HB3609 - 10 - LRB104 12086 AAS 22184 b (3) the number of customers served;

and (6) other information the Commission deems to be in HB3609 Engrossed - 11 - LRB104 12086 AAS 22184 b the public interest or considers likely to prove useful or relevant to the rulemaking described in subsection (h).

(d-5) The Commission shall require projects submitted to the utility-scale renewable thermal energy network program for approval to include a proposed rate structure for thermal energy services supplied to network end users and consumer protection plans for end users.

The Commission may approve the proposed rate structure if the projected heating and cooling costs for end users is not greater than the heating and cooling costs the end users would have incurred if the end users had not participated in the program.